Marathon Petroleum Corporation
Company Summary
Description
Marathon Petroleum Corporation (NYSE: MPC) - Nation's fourth largest transportation fuels refiner and largest in the Midwest - Seven-plant refinery system with 1,794,000 barrels per calendar day of capacity - Petroleum products marketer in the Midwest, Southeast, Northeast and Gulf Coast - Marketing network of more than 5,600 Marathon locations and approximately 2,760 Speedway - Owns/operates 80 light product and asphalt terminals - Owns, leases or has ownership interest in 8,300 miles of crude and refined product pipelines - Owns and operates more than 5,000 miles of gas gathering and NGL (natural gas liquids) pipelines - Company roots reach back to the early years of the oil industryWebsite
http://www.marathonpetroleum.com/About_MPC/Financial Data:
NYSE:MPC from Google FinanceTickers:
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MPC - New York Stock Exchange
Related Entities
Firm Transport Commitments
Project: Topolobampo Refined Fuels Terminal
Firm Commitment: 0.5 MM Bbls
Recent news
- 2/16/2024 - Teamsters Local 283... (subscriber access)
- 11/15/2023 - ADM and Marathon... (subscriber access)
- 10/26/2023 - Marathon Petroleum... (subscriber access)
- 8/29/2023 - Marathon Petroleum... (subscriber access)
- 5/16/2023 - Fire at Marathon... (subscriber access)
Investor Presentations
- 2Q21 Earnings Release
- 2Q18 Investor Presentation (subscriber access)
- Fourth Quarter 2017 Earnings Slides (subscriber access)
- Second Quarter 2016 Earnings (subscriber access)
Company Transactions
Date: 3/31/2021
Type: Acquisition
NOTES:
Marathon Petroleum reached a deal to sell its Speedway segment to 7-Eleven for $21 billion in cash, which will result in $16.5 billion in after-tax cash proceeds once the deal closes in the first quarter of 2021.
Marathon Petroleum reached a deal to sell its Speedway segment to 7-Eleven for $21 billion in cash, which will result in $16.5 billion in after-tax cash proceeds once the deal closes in the first quarter of 2021.
REGIONS:
North America
Date: 6/30/2019
Type: Acquisition
NOTES:
Marathon Petroleum has entered into a deal with NOCO Inc. to acquire a 900,000 barrel light product and asphalt terminal and 33 retail stores in Buffalo, NY.
Marathon Petroleum has entered into a deal with NOCO Inc. to acquire a 900,000 barrel light product and asphalt terminal and 33 retail stores in Buffalo, NY.
REGIONS:
Northeast
Date: 12/31/2018
Type: Merger
NOTES:
Marathon Petroleum and Andeavor have entered into a merger agreement whereby Marathon will acquire all of Endeavors outstanding shares, with an equity value of $23.3 billion. The combined company will have an enterprise value of $35.6 billion and Andeavor shareholders may receive 1.87 shares of Marathon stock of $152.27 in cash per share held.
Marathon Petroleum and Andeavor have entered into a merger agreement whereby Marathon will acquire all of Endeavors outstanding shares, with an equity value of $23.3 billion. The combined company will have an enterprise value of $35.6 billion and Andeavor shareholders may receive 1.87 shares of Marathon stock of $152.27 in cash per share held.
REGIONS:
United States
International
Date: 2/15/2017
Type: Acquisition
BUYERS:
Enbridge Energy Partners, L.P.
Enbridge Inc.
Marathon Petroleum Corporation
MarEn Bakken Pipeline Company LLC
MPLX LP
DETAILS:
COST: 2 $B
NOTES:
Enbridge Energy Partners, Enbridge Inc and Marathon Petroleum have announced a joint venture to acquire a 36.75% interest in the Bakken Pipeline System from a holding company with a 75% interest in the System. The joint venture is called the MarEn Bakken Pipeline Company LLC. Enbridge will own 27.6% of the pipelines through MarEn and Marathon will own 9.15% of the pipeline projects.
Enbridge Energy Partners, Enbridge Inc and Marathon Petroleum have announced a joint venture to acquire a 36.75% interest in the Bakken Pipeline System from a holding company with a 75% interest in the System. The joint venture is called the MarEn Bakken Pipeline Company LLC. Enbridge will own 27.6% of the pipelines through MarEn and Marathon will own 9.15% of the pipeline projects.
REGIONS:
Bakken
Gulf Coast
News & Press Releases
Criterion News
- 2/16/2024 - Teamsters Local 283... (subscriber access)
- 11/15/2023 - ADM and Marathon... (subscriber access)
- 10/26/2023 - Marathon Petroleum... (subscriber access)
- 8/29/2023 - Marathon Petroleum... (subscriber access)
- 5/16/2023 - Fire at Marathon... (subscriber access)
- 3/8/2023 - Marathon Petroleum... (subscriber access)
- 2/1/2023 - Marathon Petroleum... (subscriber access)
- 2/1/2023 - Marathon Petroleum... (subscriber access)
- 2/1/2023 - Marathon Petroleum... (subscriber access)
- 1/6/2023 - Marathon Petroleum... (subscriber access)
- 11/2/2022 - Marathon Announces... (subscriber access)
- 11/2/2022 - Marathon Reports 3Q22... (subscriber access)
- 11/2/2022 - Marathon Sells Speedway... (subscriber access)
- 11/2/2022 - Marathon Releases 3Q22... (subscriber access)
- 11/2/2022 - Marathon Reports 3Q22... (subscriber access)
- 11/2/2022 - Marathon Reports 3Q22... (subscriber access)
- 11/2/2022 - Marathon Reports 3Q22... (subscriber access)
- 8/19/2022 - Marathon Granted... (subscriber access)
- 8/4/2022 - Marathon On Pace to... (subscriber access)
- 8/4/2022 - Marathon Petroleum... (subscriber access)
- 8/4/2022 - Marathon Petroleum... (subscriber access)
- 7/12/2022 - Marathon Seeks Extension... (subscriber access)
- 6/3/2022 - ADM and Marathon... (subscriber access)
- 4/22/2022 - U.S. Awards Contracts... (subscriber access)
- 3/2/2022 - Marathon and Neste Agree... (subscriber access)
- 2/2/2022 - Marathon Petroleum... (subscriber access)
- 2/2/2022 - Marathon Petroleum... (subscriber access)
- 2/2/2022 - Marathon Petroleum... (subscriber access)
- 1/14/2022 - Department of Energy... (subscriber access)
- 1/10/2022 - Marathon's Capline... (subscriber access)
Press Releases
- Reported fourth-quarter income of $192 million, or $0.29 per diluted share, which includes net pre-tax benefits of $851 million; reported adjusted loss of $608 million, or ($0.94) per diluted share
- $21 billion Speedway sale targeted to close by end of first quarter; reiterating commitment to use proceeds to strengthen the balance sheet and return capital to shareholders
- Advancing renewable fuels portfolio; Dickinson is 2nd largest renewable diesel facility in the US and progressing Martinez strategic repositioning
- Continuing focus on lowering cost structure
- Announced 2021 MPC standalone capital spending outlook of $1.4 billion, a reduction of $350 million from 2020
- Speedway's results are required to be presented separately as discontinued operations.
- The retained direct dealer business results are reported within the Refining & Marketing segment.
- As a result of the above, MPC no longer presents a separate Retail segment, which had previously included Speedway and the direct dealer business.
- MPC ceased recording depreciation and amortization (D&A) for Speedway at the time of signing the sale agreement.
- Corporate costs are no longer allocable to Speedway under discontinued operations accounting. Results for all periods exclude any allocation of corporate costs to Speedway.
- Reported third-quarter loss of $1.0 billion, or $(1.57) per diluted share, including net pre-tax charges of $525 million; adjusted loss of $649 million, or $(1.00) per diluted share
- On-track to exceed targeted reductions of $1.4 billion of capital spending and $950 million of operating expense; implemented workforce reduction plan
- Progressing $21 billion Speedway sale; continue to target first-quarter 2021 close
- Starting up Dickinson, N.D. renewable fuels facility
- Continuing strategic repositioning of Martinez refinery to renewable diesel facility
- Available liquidity exceeds $7 billion
- Speedway's results are required to be presented separately as discontinued operations.
- The retained direct dealer business results are reported within the Refining & Marketing segment.
- As a result of the above, MPC no longer presents a separate Retail segment, which had included these two businesses.
- MPC ceased recording depreciation and amortization (D&A) for Speedway at the time of signing the sale agreement, and therefore, third quarter results reflect only one month of D&A for Speedway's assets. D&A was $36 million for the month of July 2020.
- Corporate costs are no longer allocable to Speedway under discontinued operations accounting. Results for all periods presented have been recast to exclude any allocation of corporate costs to Speedway. These costs have averaged approximately $7 million per quarter in 2020.
- 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
- Accelerates 7-Eleven's growth trajectory and diversifies presence in the U.S. Speedway and 7-Eleven have complementary geographic footprints with little overlap. 7-Eleven currently has over 9,800 stores in the United States and Canada and with Speedway's high-quality portfolio of approximately 3,900 stores, this acquisition will bring 7-Eleven's total number of stores to approximately 14,000 in the U.S. and Canada. Following the transaction, 7-Eleven will have a presence in 47 of the top 50 most populated metro areas in the U.S., positioning the company as a clear industry leader in a fragmented industry with favorable macroeconomic trends.
- Strengthens financial profile to position company for continued success. Speedway, with annual pre-synergy run-rate EBITDA of approximately $1.5 billion prior to the acquisition, is an exceptional business with significant opportunities for future growth. 7-Eleven expects to achieve $475 million to $575 million of run-rate synergies through the third year following closing, while maintaining financial flexibility and a strong balance sheet. Upon closing, 7–Eleven will be even better positioned to continue to pursue profitable growth opportunities.
- Combined store network significantly enhances economies of scale. Upon closing, 7-Eleven and Speedway will share best practices to deliver products and promotions based upon customer demand and continue both companies' legacy of innovation. In addition, the combined company will be well-positioned to maximize efficiencies and optimize relationships with vendors and business partners.
- Commitment to ensuring a successful integration. 7-Eleven plans to form an integration steering committee with representatives from the leadership of both 7–Eleven and Speedway. Brand 7-Eleven looks forward to welcoming the approximately 40,000 members of the Speedway team into the 7-Eleven family and integrating best practices of both companies.
- Commitment to environmental stewardship. 7-Eleven reaffirms and expands the company's existing commitment to important environmental priorities as a part of its broader Environmental, Social and Governance (ESG) efforts. Together, the combined company will set mutual and shared 2027 targets to reduce CO2 emissions, to utilize more ecofriendly packaging and sustainable food supplies, and to drive reduction in plastic usage. All of these measures will work together to enhance long-term corporate value.
- Compelling financial impact. On a pro forma basis, the transaction reflects an attractive EBITDA multiple of 7.1x after taking into account expected impacts from the transaction, including $475 million to $575 million of run-rate synergies, $3 billion of tax benefits and $5 billion of net sale leaseback proceeds. The transaction is expected to produce compound annual growth in 7–Eleven's operating income and EBITDA of over 15% through the first three years following the close of the acquisition. 7-Eleven expects to reduce its debt-to-EBITDA ratio to less than 3.0x within two years following the close of the acquisition.
- Certainty of Value for MPC Shareholders: The $21 billion valuation represents a significant value unlock. The 100% cash transaction immediately captures value for MPC shareholders relative to potential valuation risks of other alternatives.
- Significant After-Tax Cash Proceeds: This transaction is expected to result in after-tax cash proceeds of approximately $16.5 billion. MPC expects to use the proceeds to both repay debt to protect its investment grade credit profile and return capital to shareholders. Specific details will be announced at the time of transaction close.
- Long-Term Relationship Drives Additional Value: The arrangement includes a 15-year fuel supply agreement for approximately 7.7 billion gallons per year associated with the Speedway business. The company expects incremental opportunities over time to supply 7-Eleven's remaining business as existing arrangements mature and as 7-Eleven adds new locations in connection with its announced U.S. and Canada growth strategy.
- Reported net loss attributable to MPLX of $2.7 billion; includes non-cash impairment charges of $3.4 billion primarily related to goodwill, equity method investments, and long-lived assets
- Reported adjusted EBITDA attributable to MPLX of $1.3 billion
- Generated $1.0 billion in net cash provided by operating activities and reported distribution coverage of 1.44x
- Announced business response to COVID-19 environment, including reductions of over $700 million of capital and approximately $200 million of operating expense
- Maintained quarterly distribution of $0.6875 per common unit
- Growth capital spending target reduced by over $600 million to approximately $900 million. Growth capital spend is primarily related to projects that are already underway, including the Wink-to-Webster crude oil pipeline, the Whistler natural gas pipeline, and the expansion of the Mt. Airy Terminal.
- The original BANGL project scope is no longer being pursued given the current down cycle. Instead, the company is working with others to optimize existing pipeline capacity while continuing to meet producers' needs for flow assurance and future growth. Also, the associated fractionation capacity and export facility have been deferred.
- Net maintenance capital spending target reduced by $100 million to approximately $150 million.
- Gathered volumes averaged 5.8 billion cubic feet per day, a 3% decrease versus the first quarter of 2019.
- Processed volumes averaged 8.8 billion cubic feet per day, a 3% increase versus the first quarter of 2019.
- Fractionated volumes averaged 553 thousand barrels per day, an 8% increase versus the first quarter of 2019.
- Gathered volumes averaged 3.2 billion cubic feet per day (bcf/d) in the first quarter, a 5% decrease versus the first quarter of 2019.
- Processed volumes averaged 6.2 bcf/d in the first quarter, a 3% increase versus the first quarter of 2019, driven by volumes ramping at the Sherwood 12 and 13 processing plants, which were placed in service in the fourth quarter of 2019.
- Fractionated volumes averaged 490 thousand barrels per day in the first quarter, a 6% increase versus the first quarter of 2019. The increase was primarily driven by higher volumes from an expansion at the Sherwood complex.
- Reported first-quarter loss of $9.2 billion, or $(14.25) per diluted share, including pre-tax non-cash charges of $12.4 billion; adjusted loss of $106 million, or $(0.16) per diluted share
- Cash used in operations of $768 million; cash provided by operations of $1.3 billion, excluding working capital changes
- Announced business response to COVID-19 environment, including $1.4 billion of capital and $950 million of expense reductions
- Enhanced liquidity by $3.5 billion through senior notes issuance and additional revolver
- Consolidated capital spending reductions of $1.4 billion, or approximately 30%, which takes expected spending levels down to $3.0 billion for 2020. The reductions are planned across all segments of the business, including: $250 million in refining; $770 million in midstream, which includes MPLX; $250 million in retail; and $80 million in corporate. Remaining capital spend primarily relates to growth projects that are already in progress or spending that supports the safe and reliable operation of our facilities.
- A reduction to forecasted consolidated operating expenses of $950 million in 2020, primarily through reductions of fixed costs and deferral of certain expense projects, which includes $200 million of operating expense reductions at MPLX.
- Throughput levels have been reduced across the organization, including the temporary idling of some facilities. The company plans to continue to monitor market conditions and optimize crude oil acquisition, refining run rates, and logistics systems to respond on a regional basis.
- Share repurchases have temporarily been suspended. The company will evaluate the timing of future repurchases as market conditions evolve.
- The company issued $2.5 billion of senior notes in April.
- The company also secured an additional $1 billion 364-day revolving credit facility in April.
- As of May 5, 2020, MPC's total credit capacity, excluding MPLX, is approximately $7.5 billion and available borrowing capacity is approximately $6.75 billion.
- The company continues to evaluate further actions to enhance liquidity.
- Reported fourth-quarter net loss attributable to MPLX of $581 million and full-year net income attributable to MPLX of $1.0 billion; includes non-cash impairment charges of $1.2 billion in fourth quarter primarily related to goodwill associated with the Andeavor Logistics G&P businesses acquired by MPC as part of its combination with Andeavor in October 2018
- Reported fourth-quarter adjusted EBITDA attributable to MPLX of $1.3 billion and full-year adjusted EBITDA attributable to MPLX of $4.3 billion, or $5.1 billion including results of Andeavor Logistics
- Generated $4.1 billion in net cash provided by operating activities for the full-year 2019, supporting the return of capital of approximately $2.8 billion to unitholders
- Reduced 2020 growth capital spending target to approximately $1.5 billion
- Targeting positive free cash flow, after capital investments and distributions, in 2021
- Gathered volumes: 6.2 billion cubic feet per day, a 5% increase versus the fourth quarter of 2018
- Processed volumes: 8.8 billion cubic feet per day, a 7% increase versus the fourth quarter of 2018
- Fractionated volumes: 557 thousand barrels per day, an 11% increase versus the fourth quarter of 2018
- Gathered volumes averaged 3.6 billion cubic feet per day (bcf/d) in the fourth quarter, an 11% increase versus the fourth quarter of 2018. For the full year, gathered volumes increased 18% year-over-year
- Processed volumes averaged 6.1 bcf/d in the fourth quarter, a 7% increase versus the fourth quarter of 2018 driven by the addition of the Sherwood 12 and 13 processing plants, which were placed in service during the quarter. For the full year, processed volumes increased 14% year-over-year
- Fractionated volumes averaged 487 thousand barrels per day in the fourth quarter, a 9% increase versus the fourth quarter of 2018. The increase was primarily driven by higher volumes from expansions at the Hopedale and Sherwood complexes. For the full year, fractionated volumes increased 12% year-over-year
- Reported full-year income of $2.6 billion and adjusted income of $3.3 billion
- Reported fourth-quarter income of $443 million, or $0.68 per diluted share; adjusted income of $1.0 billion, or $1.56 per diluted share
- Generated $2.4 billion of operating cash flow in the fourth quarter
- Executed across all business segments in the fourth quarter: $420 million of realized synergies, strong refining margin and utilization, solid retail margin capture, and continued progress across midstream projects
- Reported income of $1.1 billion, or $1.66 per diluted share; adjusted income of $1.1 billion, or $1.63 per diluted share
- Generated $2.8 billion of operating cash flow
- Returned $848 million to shareholders through dividends and share repurchases
- Realized synergies of $283 million
- Strong 98% refining utilization, and significant operational improvements on the West Coast
- Record retail merchandise sales; 33 consecutive quarters of same-store merchandise growth
- Announces intent to separate Speedway and formation of Midstream Special Committee
- Reported second-quarter income of $1.1 billion, or earnings per diluted share of $1.66; adjusted income of $1.1 billion, or adjusted earnings per diluted share of $1.73
- Generated $2.6 billion of operating cash flow and returned $852 million of capital to shareholders, including $500 million in share repurchases
- Realized synergies of $270 million in the second quarter
- Strong retail results driven by exceptional execution across Speedway system
- Successfully combined MPLX and ANDX into one public midstream company
- Continued focus on portfolio optimization, which could include asset divestitures
- Reported first-quarter loss of $7 million, or $(0.01) per diluted share, including a net benefit of $0.08 per diluted share due to a non-cash gain, transaction-related costs, and tax adjustments
- Refining & Marketing segment loss from operations of $334 million
- Midstream segment income from operations of $908 million
- Retail segment income from operations of $170 million
- Realized synergies of $133 million in the first quarter
- Generated $1.6 billion of operating cash flow and returned $1.2 billion of capital to shareholders, including $885 million in share repurchases
- Elected not to pursue the Garyville Coker 3 project
- MPLX announced agreement to acquire Andeavor Logistics
- Enhances prospects for full midstream value-chain capture: This combination enhances commercial opportunities building on MPLX's strong footprint in the Marcellus and deepening the presence in the Permian. MPLX's focus will continue to be providing services with stable, fee-based cash flows, expanding export capabilities, and leveraging existing assets for third-party business.
- Creates opportunities to high-grade and enhance returns on project backlog: The broader footprint enhances the ability to combine commercial efforts and selectively deploy capital towards the highest return projects with strategic importance.
- Improves financial profile: MPLX is committed to self-funding the equity portion of its capital investments and enhancing distribution coverage throughout 2019 and 2020. The company remains committed to maintaining its investment grade credit profile and views its increased size, scale, and diversification of fee-based cash flows as credit enhancing attributes.
- Reported full-year net earnings of $600 million and EBITDA of $1.2 billion, an increase of $294 million and $252 million, respectively
- Terminalling and Transportation: segment operating income increased by $101 million primarily due to the 2018 Drop Down and the SLC Core Pipeline System acquisition
- Gathering and Processing: executed on Permian growth strategy and grew gathered volumes by 74 mbpd year-over-year to 225 mbpd and began construction of additional gathering projects
- Full-year net cash from operating activities of $1.0 billion and DCF attributable to common unitholders of $907 million, resulting in 1.02x distribution coverage and 3.8x leverage
- Financial non-GAAP measures:
- EBITDA - U.S. GAAP-based net earnings before interest, income taxes, and depreciation and amortization expense;
- Distributable Cash Flow - U.S. GAAP-based net cash flow from EBITDA adjusted for amounts spent on maintenance capital net of reimbursements and other adjustments;
- Pro forma LTM EBITDA - Last twelve months ("LTM") of our EBITDA adjusted for pro forma contributions from acquisitions; and
- Segment EBITDA - A segment's U.S. GAAP-based operating income before depreciation and amortization expense plus equity in earnings (loss) of equity method investments and other income (expense), net.
- Liquidity non-GAAP measures:
- Distributable Cash Flow - U.S. GAAP-based net cash flow from operating activities adjusted for changes in working capital, amounts spent on maintenance capital net of reimbursements and other adjustments not expected to settle in cash;
- Distributable Cash Flow Attributable to Common Unitholders - Distributable Cash Flow minus distributions associated with the preferred units;
- Distribution Coverage Ratio - Distributable Cash Flow Attributable to Common Unitholders divided by total distributions to be paid to common unitholders for the reporting period; and
- Leverage Ratio - Total debt divided by Pro forma LTM EBITDA.
- Operating performance non-GAAP measure:
- Average Margin on Natural Gas Liquids ("NGLs") Sales per Barrel - NGL sales revenues minus amounts recognized as NGL expense divided by our NGL sales volumes in barrels; and
- Average Wholesale Fuel Sales Margin per Gallon - Wholesale fuel revenues minus wholesale's cost of fuel divided by our total wholesale fuel sales volumes in gallons.
- our operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or financing methods;
- the ability of our assets to generate sufficient cash flow to make distributions to our unitholders;
- our ability to incur and service debt and fund capital expenditures; and
- the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.
- Reported fourth-quarter earnings of $951 million, or $1.35 per diluted share; results included costs of $1.06 per diluted share primarily from transaction-related items
- Refining and Marketing segment income from operations of $923 million driven by high utilization and wide crude differentials
- Midstream segment income from operations of $889 million supported by volume growth
- Retail segment income from operations of $613 million with strong margins
- Returned $4.2 billion of capital to shareholders in 2018, including $675 million in share repurchases in the fourth quarter
- Announced 15% increase in quarterly dividend to $0.53 per share
- Reported third quarter earnings of $737 million, or $1.62 per diluted share
- Refining and Marketing segment income from operations of $666 million as strong market fundamentals supported high utilization
- Midstream segment income from operations of $679 million, achieved significant growth with higher volumes and multiple new assets coming online
- Generated $1.2 billion in cash from operations during the quarter and returned $607 million to shareholders
- Closed Andeavor acquisition on October 1st with integration underway
- Reported record first-quarter net income of $421 million and adjusted EBITDA of $760 million
- Reported first-quarter net cash from operating activities of $450 million and distributable cash flow of $619 million
- Declared 21st consecutive quarterly distribution increase to $0.6175 per common unit, a 14 percent increase over the first quarter of 2017
- Affirmed 2018 distribution growth guidance of 10 percent and execution of self-funding plan
- Reported total gathered volumes of 4.2 billion cubic feet per day in the first quarter of 2018, a 31 percent increase compared with the first quarter of 2017.
- Reported total processed volumes of 6.6 billion cubic feet per day in the first quarter of 2018, an 8 percent increase compared with the first quarter of 2017.
- Reported total fractionated volumes of 423,000 barrels per day in the first quarter of 2018, a 15 percent increase from the first quarter of 2017.
- The new Houston, Pennsylvania, 200-million-cubic-feet-per-day gas processing plant in the Marcellus shale commenced operations.
- The Argo 200-million-cubic-feet-per-day gas processing plant in the Permian Basin commenced operations.
- The Sherwood 9 gas processing plant in the Marcellus shale began ramping up operations.
- The Robinson, Illinois, butane cavern became operational.
- Reported first-quarter earnings of $37 million, or $0.08 per diluted share, and income from operations of $440 million
- Reported record Midstream segment income from operations of $567 million, largely driven by MPLX
- Completed significant Galveston Bay refinery turnaround activity ahead of schedule and under budget
- Returned $1.55 billion of capital to shareholders, including $1.33 billion of share repurchases
- Creates a leading nationwide integrated energy company with an initial enterprise value greater than $90 billion1
- Substantially increases geographic diversification and scale positioning the company for long-term growth and value creation
- Immediately accretive to earnings and cash flow per share2
- Expect ≥ $1 billion of tangible cost and operating synergies, driving substantial long-term earnings and cash flow per share accretion
- Continued commitment to MPC's 2018 capital return plans; MPC's board approved an incremental $5 billion of repurchase authorization
- Commitment to maintaining investment grade credit profile
- Significant shareholder value creation from tangible, identified cost and operating synergies: MPC expects to fully realize ≥$1 billion in annual run-rate cost and operating synergies within the first three years, in addition to the expected synergies from ANDV's Western Refining transaction. The company plans to maintain its current capital allocation strategies, including continued dividend growth, and believes that incremental cash generated by the transaction will exceed $5 billion over the first five years.
- Refining: Geographically diversifies the portfolio into attractive markets and increases access to advantaged feedstocks: Andeavor's refineries in California, the Mid-Continent and the Pacific Northwest complement MPC's existing Gulf Coast and Midwest refining footprint. The combined company will be the No. 1 U.S. refiner by capacity and a top-five refiner globally, with throughput capacity of over 3 million barrels per day. The combination also enhances crude oil integration from wellhead to refinery supply across the integrated system.
- Marketing: Creates a nationwide portfolio, which significantly improves efficiencies and enhances the ability to serve customers: The company combines MPC's strength east of the Mississippi with ANDV's strong presence in the Western U.S. Combining the two businesses unlocks substantial efficiencies and creates a national retail and marketing platform, including a nationwide loyalty program that supports increased customer engagement and substantial revenue enhancement and cost saving opportunities.
- Midstream: Expands the business' growth platform and particularly enhances footprint in the attractive Permian basin: Building on MPC's strong footprint in the Marcellus, the combined company's expanded presence in the Permian and Bakken regions significantly increases MPC's midstream growth opportunities. MPC's midstream business will include two high-quality master limited partnerships (MLPs) – MPLX LP (NYSE: MPLX) and Andeavor Logistics (NYSE: ANDX). Upon close of the transaction, MPC will own the general partner and be the largest unitholder in each of the separate MLPs.
- Reported record fourth-quarter net income of $238 million and adjusted EBITDA of $569 million; reported record full-year net income of $794 million and adjusted EBITDA of $2 billion
- Reported fourth-quarter net cash from operating activities of $569 million and distributable cash flow of $445 million
- Declared 20th consecutive quarterly distribution increase to $0.6075 per common unit; delivered 12.1 percent distribution growth in 2017 with a full-year coverage ratio of 1.28
- Announced closing of transactions completing planned strategic actions with MPC
- Affirmed 2018 distribution growth guidance of 10 percent
- Announced 2018 capital investment plan focused on growth investments for the development of natural gas, gas liquids and crude oil infrastructure
- Reported record gathered volumes in the Marcellus and Utica of 2.7 billion cubic feet per day in the fourth quarter of 2017, a 50 percent increase compared with the fourth quarter of 2016.
- Reported record processed volumes in the Marcellus and Utica of 5.2 billion cubic feet per day in the fourth quarter of 2017, a 17 percent increase compared with the fourth quarter of 2016.
- Reported record fractionated volumes in the Marcellus and Utica of 389,000 barrels per day in the fourth quarter of 2017, a 24 percent increase versus the fourth quarter of 2016.
- Commenced operations of the 40,000-barrel-per-day Majorsville de-ethanization plant in the fourth quarter.
- Commenced operations of the Sherwood IX 200 million-cubic-feet-per-day gas processing plant in January; two additional Sherwood plants are under construction.
- How does conveying key refining assets to MPLX, a midstream gas company, drive long-term value for MPC shareholders?
- How does obligating MPC to future cash payments of $1.4B/year to MPLX, a company with a totally different mission, drive long-term value for MPC shareholders?
- How does a weaker balance sheet at MPC affect the viability of the Company for the next downturn?
- For MPLX, why buy zero growth refining assets from MPC, paying 7-9x EBITDA, when you can concentrate on your own organic growth projects that can be done for 5-6x EBITDA?
- How does obligating MPLX to a debt burden of between $5B-$6B to own static refining assets create a growth vehicle for MPLX unitholders?
- How can we be sure that this complex financial engineering will lower the cost of capital and not lead to value destruction?
Marathon Petroleum Corp. Reports Fourth-Quarter 2020 Results
Source: PR Newswire
Orignial Article: https://contentapi.cision...
FINDLAY, Ohio, Feb. 2, 2021 /PRNewswire/ --
Marathon Petroleum Corp. (NYSE: MPC) today reported net income of $192 million, or $0.29 per diluted share, for the fourth quarter of 2020, compared with net income of $443 million, or $0.68 per diluted share, for the fourth quarter of 2019.
Fourth-quarter 2020 results include net pre-tax benefits of $851 million as shown in the accompanying release tables. Adjusted net loss was $608 million, or $(0.94) per diluted share, for the fourth quarter of 2020, compared with adjusted net income of $1.0 billion, or $1.56 per diluted share, for the fourth quarter of 2019.
"The COVID-19 pandemic presented unprecedented challenges in 2020," said President and Chief Executive Officer Michael J. Hennigan. "The rollout of vaccines in 2021 provides support for the return of global mobility and transportation fuel demand, increasing optimism around steps toward economic recovery and prospects for our industry.
"Throughout the year, we took aggressive action to reposition the company for long-term success. We focused on optimizing our portfolio through the sale of Speedway, indefinitely idling higher cost refineries, structurally reducing operating costs, and expanding our renewable fuel portfolio. Our Dickinson facility began producing renewable diesel and we are advancing discussions with feedstock suppliers and potential commercial partners for the Martinez renewables project. Today we announced our 2021 capital outlook which is yet again below prior year spending levels. And, as we enter 2021 and progress toward the close of the $21 billion sale of our Speedway business, our top priorities remain reducing debt to strengthen our balance sheet and efficiently returning capital to shareholders."
Results from Operations
As previously announced, on Aug. 2, 2020, MPC entered into a definitive agreement to sell Speedway to 7-Eleven, Inc. for $21 billion in cash. Consistent with the reporting from last quarter:
Speedway's results are presented differently under discontinued operations accounting as compared to their previous presentation. The major changes include:
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Income (loss) from continuing operations by segment | |||||||||||||||
Refining & Marketing(a)(b) | $ | (1,579) | $ | 1,106 | $ | (5,189) | $ | 2,856 | |||||||
Midstream | 974 | 889 | 3,708 | 3,594 | |||||||||||
Corporate(c) | (175) | (244) | (800) | (833) | |||||||||||
Income (loss) from continuing operations before items | (780) | 1,751 | (2,281) | 5,617 | |||||||||||
Items not allocated to segments: | |||||||||||||||
LCM inventory valuation adjustment | 1,185 | — | — | — | |||||||||||
Impairments | (146) | (1,239) | (9,741) | (1,239) | |||||||||||
Restructuring expenses | (19) | — | (367) | — | |||||||||||
Litigation | 84 | — | 84 | (22) | |||||||||||
Gain on sale of assets | 66 | — | 66 | — | |||||||||||
Transaction-related costs | — | (6) | (8) | (153) | |||||||||||
Equity method investment restructuring gains | — | 52 | — | 259 | |||||||||||
Income (loss) from continuing operations | $ | 390 | $ | 558 | $ | (12,247) | $ | 4,462 | |||||||
Income from discontinued operations | |||||||||||||||
Speedway(c) | $ | 419 | $ | 290 | $ | 1,701 | $ | 1,121 | |||||||
LCM inventory valuation adjustment | 25 | — | — | — | |||||||||||
Transaction-related costs | (39) | (7) | (114) | (7) | |||||||||||
Income from discontinued operations | $ | 405 | $ | 283 | $ | 1,587 | $ | 1,114 | |||||||
Income (loss) from continuing and discontinued operations | $ | 795 | $ | 841 | $ | (10,660) | $ | 5,576 | |||||||
(a) | Includes direct dealer income from operations of $90 million, $194 million, $393 million and $489 million for the fourth quarter 2020, the fourth quarter 2019, for the year 2020 and for the year 2019, respectively, due to our third quarter 2020 change in segment presentation. |
(b) | Includes last-in, first-out (LIFO) liquidation charges of $305 million for the fourth quarter 2020 and $561 million for the year 2020. |
(c) | Reflects corporate costs of $6 million, $7 million, $26 million and $28 million for the fourth quarter 2020, the fourth quarter 2019, for the year 2020 and for the year 2019, respectively, that are no longer allocable to Speedway under discontinued operations accounting. |
Adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) was $907 million in the fourth quarter of 2020, compared with $3.2 billion for the fourth quarter of 2019. As detailed in the table below, adjusted EBITDA is shown for both continuing and discontinued operations. Adjusted EBITDA from continuing operations excludes refining planned turnaround costs and LIFO liquidation charges.
Reconciliation of Income (Loss) From Operations to Adjusted EBITDA | |||||||||||||||
Three Months Ended | Twelve Months Ended December 31, | ||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Refining & Marketing Segment | |||||||||||||||
Segment income (loss) from operations | $ | (1,579) | $ | 1,106 | $ | (5,189) | $ | 2,856 | |||||||
Add: Depreciation and amortization | 465 | 461 | 1,857 | 1,780 | |||||||||||
Refining planned turnaround costs | 107 | 153 | 832 | 740 | |||||||||||
LIFO liquidation charge | 305 | — | 561 | — | |||||||||||
Segment Adjusted EBITDA | $ | (702) | $ | 1,720 | $ | (1,939) | $ | 5,376 | |||||||
Midstream Segment | |||||||||||||||
Segment income from operations | $ | 974 | $ | 889 | $ | 3,708 | $ | 3,594 | |||||||
Add: Depreciation and amortization | 343 | 342 | 1,353 | 1,267 | |||||||||||
Segment EBITDA | $ | 1,317 | $ | 1,231 | $ | 5,061 | $ | 4,861 | |||||||
Segment Adjusted EBITDA | $ | 615 | $ | 2,951 | $ | 3,122 | $ | 10,237 | |||||||
Corporate | (175) | (244) | (800) | (833) | |||||||||||
Add: Depreciation and amortization | 41 | 47 | 165 | 178 | |||||||||||
Adjusted EBITDA from continuing operations | $ | 481 | $ | 2,754 | $ | 2,487 | $ | 9,582 | |||||||
Speedway | |||||||||||||||
Speedway | $ | 419 | $ | 290 | $ | 1,701 | $ | 1,121 | |||||||
Add: Depreciation and amortization(a) | 7 | 128 | 244 | 413 | |||||||||||
Adjusted EBITDA from discontinued operations | $ | 426 | $ | 418 | $ | 1,945 | $ | 1,534 | |||||||
Adjusted EBITDA from continuing and discontinued | $ | 907 | $ | 3,172 | $ | 4,432 | $ | 11,116 | |||||||
(a) | As of August 2, 2020, MPC ceased recording depreciation and amortization for Speedway. |
Refining & Marketing (R&M)
As discussed above, R&M segment results now include the results of the direct dealer business. Prior periods reflect this change in segment presentation.
R&M segment loss from operations was $1.6 billion in the fourth quarter of 2020, compared with income of $1.1 billion for the fourth quarter of 2019. Fourth-quarter 2020 and fourth-quarter 2019 R&M segment results include direct dealer income from operations of $90 million and $194 million, respectively. Segment results also include a LIFO liquidation charge of $305 million in the fourth quarter of 2020.
Segment adjusted EBITDA was $(702) million in the fourth quarter of 2020, versus $1.7 billion for the fourth quarter of 2019. Segment adjusted EBITDA excludes refining planned turnaround costs, which totaled $107 million in the fourth quarter of 2020 and $153 million in the fourth quarter of 2019, and a LIFO liquidation charge of $305 million in the fourth quarter of 2020. The decrease in R&M earnings was primarily due to lower crack spreads, reduced throughput, and weaker crude differentials, partially offset by lower operating costs.
R&M margin, excluding the LIFO liquidation charge, was $7.42 per barrel for the fourth quarter of 2020, versus $16.35 for the fourth quarter of 2019. Crude capacity utilization was 82% (excluding idled facilities) resulting in total throughput of 2.5 million barrels per day. Clean product yield was 87%.
Midstream
Midstream segment income from operations, which primarily reflects the results of MPLX LP (NYSE: MPLX), was $974 million in the fourth quarter of 2020, compared with $889 million for the fourth quarter of 2019.
Segment adjusted EBITDA was $1.3 billion in the fourth quarter of 2020, versus $1.2 billion for the fourth 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
As discussed above, corporate costs are no longer allocable to Speedway under discontinued operations accounting and all periods include corporate costs previously allocated to Speedway.
Corporate expenses totaled $175 million in the fourth quarter of 2020, compared with $244 million in the fourth quarter of 2019. Fourth-quarter 2020 and fourth-quarter 2019 corporate expenses include expenses of $6 million and $7 million, respectively, which are no longer allocable to Speedway.
Items not allocated to segments included net benefits of $1.2 billion in the fourth quarter of 2020, compared with net charges of $1.2 billion in the fourth quarter of 2019. Fourth-quarter 2020 results from continuing operations include a $1.2 billion lower of cost or market (LCM) inventory benefit, a favorable litigation settlement of $84 million and gains on asset sales of $66 million. These items are partially offset by impairment and restructuring charges of $165 million. Fourth-quarter 2019 results include $1.2 billion of impairment charges primarily related to MPLX goodwill and $6 million of costs incurred in connection with the midstream strategic review and other related activities. These items were partially offset by an equity method restructuring gain of $52 million. Discontinued operations for the fourth quarter of 2020 included a $25 million LCM inventory benefit and $39 million of costs related to the Speedway separation.
Speedway
As discussed above, the results of Speedway are required to be reported separately as discontinued operations. MPC ceased recording D&A for Speedway in August 2020. Therefore, fourth-quarter 2020 results reflect no D&A, as compared to $128 million of D&A in fourth-quarter 2019. Results for all periods presented exclude any allocation of corporate costs to Speedway.
Speedway income from operations was $419 million in the fourth quarter of 2020, compared with $290 million for the fourth quarter of 2019. Speedway adjusted EBITDA was $426 million in the fourth quarter of 2020, versus $418 million for the fourth quarter of 2019. Fourth-quarter 2020 results reflect higher fuel margins partially offset by lower fuel volumes compared to the prior year.
Speedway fuel margin was 28.99 cents per gallon in the fourth quarter of 2020, versus 26.11 cents per gallon in the fourth quarter of 2019. Same-store merchandise sales increased by 1.8% year-over-year and Speedway same-store gasoline sales volume decreased by 18.1% year-over-year.
Financial Position and Liquidity
As of Dec. 31, 2020, the company had $540 million in cash and cash equivalents (excluding MPLX's cash and cash equivalents of $15 million), no borrowings outstanding under its $5 billion five-year bank revolving credit facility, no borrowings outstanding under its two $1 billion 364-day bank revolving credit facilities, and no borrowings outstanding under its $750 million trade receivables securitization facility. The company took advantage of attractive commercial paper rates available during the quarter and had $1.0 billion of outstanding commercial paper borrowings as of Dec. 31, 2020. MPC does not intend to have outstanding commercial paper borrowing in excess of available capacity under its bank revolving credit facilities.
In the fourth quarter, the company redeemed all of the $475 million outstanding aggregate principal amount of its senior notes due October 2022 and repaid all of the $650 million outstanding aggregate principal amount of its senior notes due December 2020.
Strategic and Operations Update
The company continues to progress activities related to the $21 billion sale of Speedway to 7-Eleven, targeting a close of the transaction by the end of the first quarter of 2021. 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 and the opportunity to supply additional 7-Eleven locations.
The Dickinson, North Dakota, renewable fuels facility is ramping operations and is on-track to reach full production by the end of the first quarter. At full capacity, the facility is expected to produce 12,000 barrels per day of 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.
The company also progressed activities associated with the conversion of the Martinez refinery to a renewable diesel facility. Discussions with feedstock suppliers and definition engineering activities continue to advance. As envisioned, the Martinez facility would be expected to start producing renewable diesel by the second half of 2022, with a potential to build to full capacity of 48,000 barrels per day by the end of 2023.
Consistent with MPC's midstream strategy of developing long-haul pipelines and other logistics solutions, several projects advanced 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.
First Quarter 2021 Outlook
Refining & Marketing Segment: | |||
Refining operating costs per barrel(a) | $ | 5.35 | |
Distribution costs (in millions) | $ | 1,290 | |
Refining planned turnaround costs (in millions) | $ | 150 | |
Depreciation and amortization (in millions) | $ | 465 | |
Refinery throughputs (mbpd): | |||
Crude oil refined | 2,385 | ||
Other charge and blendstocks | 175 | ||
Total | 2,560 | ||
(a) | Excludes refining planned turnaround and depreciation and amortization expense. |
Speedway | Range | ||||||
Fuel sales (millions of gallons) | 1,300 | 1,500 | |||||
Merchandise sales (in millions) | $ | 1,425 | $ | 1,525 | |||
Corporate and unallocated items (in millions) | $ | 175 | |||||
2021 Capital Plan ($ millions)
MPC (excluding MPLX) | ||||
Refining & Marketing Segment: | $ | 1,050 | ||
Growth - Ongoing Projects | 450 | |||
Growth - Renewables | 350 | |||
Maintenance | 250 | |||
Midstream Segment (excluding MPLX) | 50 | |||
Speedway Discontinued Operations for 1Q21 (a) | 150 | |||
Corporate and Other (b) | 150 | |||
Total MPC (excluding MPLX) | $ | 1,400 | ||
MPLX Total (c) | $ | 965 | ||
(a) | Speedway represents outlook for only 1Q 2021 |
(b) | Does not include capitalized interest |
(c) | MPLX outlook presented net of project reimbursements and return of capital |
Conference Call
At 11:00 a.m. EST 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 www.marathonpetroleum.com. 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 www.marathonpetroleum.com.
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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
Brian Worthington, Manager, Investor Relations
Taryn Erie, Manager, Investor Relations
Media Contact: (419) 421-3312
Jamal Kheiry, Manager, Communications
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 magnitude and duration of the COVID-19 pandemic and its effects, including travel restrictions, business and school closures, increased remote work, stay at home orders and other actions taken by individuals, government and the private sector to stem the spread of the virus, 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; our ability to reduce capital and operating expenses; with respect to the planned sale of Speedway, the ability to successfully complete the sale within the expected timeframe, on the expected terms, or at all, based on numerous factors, including the failure to satisfy any of the conditions to the consummation of the planned transaction (including obtaining certain governmental or regulatory approvals on the proposed terms and schedule), the occurrence of any event, change or other circumstance that could give rise to the termination of the planned transaction; MPC's ability to utilize the proceeds as anticipated; the risk that the dissynergy costs, costs of restructuring transactions and other costs incurred in connection with the planned transaction will exceed our estimates; and our ability to capture value and realize the other expected benefits from the associated ongoing supply relationship following consummation of the planned sale; the risk that the cost savings and any other synergies from our acquisitions may not be fully realized or may take longer to realize than expected; 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, 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, including the potential conversion of the Martinez Refinery to a renewable diesel facility; the receipt of relevant third party and/or regulatory approvals; the reliability of processing units and other equipment; the successful realization of 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, complete announced capital projects and to effect any share repurchases or to maintain or increase the dividend; the effect of restructuring or reorganization of business components, including those undertaken in connection with the planned sale of Speedway and workforce reduction; the potential effects of judicial or other proceedings, including remedial actions involving removal and reclamation obligations under environmental regulations, 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 (including any related government policies and actions), other infectious disease outbreaks, natural hazards, extreme weather events or otherwise; general economic, political or regulatory developments, including changes in governmental policies relating to refined petroleum products, crude oil, natural gas or NGLs, regulation or taxation and other economic and political developments (including those caused by public health issues and outbreaks); 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, permitting and regulations, including the cost of compliance with the Renewable Fuel Standard, and/or enforcement actions initiated thereunder; the 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 Annual Report on Form 10-K for the year ended December 31, 2019, 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. Any forward-looking statements speak only as of the date of the applicable communication and 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 December 31, | Twelve Months Ended December 31, | ||||||||||||||
(In millions, except per-share data) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Revenues and other income: | |||||||||||||||
Sales and other operating revenues(a) | $ | 17,972 | $ | 28,008 | $ | 69,779 | $ | 111,148 | |||||||
Income (loss) from equity method investments(b) | 102 | 40 | (935) | 312 | |||||||||||
Net gain on disposal of assets | 64 | 58 | 70 | 278 | |||||||||||
Other income | 49 | 34 | 118 | 127 | |||||||||||
Total revenues and other income | 18,187 | 28,140 | 69,032 | 111,865 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of revenues (excludes items below)(a) | 17,216 | 24,602 | 65,733 | 99,228 | |||||||||||
LCM inventory valuation adjustment | (1,185) | — | — | — | |||||||||||
Impairment expense | 146 | 1,197 | 8,426 | 1,197 | |||||||||||
Depreciation and amortization | 849 | 850 | 3,375 | 3,225 | |||||||||||
Selling, general and administrative expenses | 630 | 779 | 2,710 | 3,192 | |||||||||||
Restructuring expenses | 19 | — | 367 | — | |||||||||||
Other taxes | 122 | 154 | 668 | 561 | |||||||||||
Total costs and expenses | 17,797 | 27,582 | 81,279 | 107,403 | |||||||||||
Income (loss) from continuing operations | 390 | 558 | (12,247) | 4,462 | |||||||||||
Net interest and other financial costs | 333 | 297 | 1,365 | 1,229 | |||||||||||
Income (loss) from continuing operations before income | 57 | 261 | (13,612) | 3,233 | |||||||||||
Provision (benefit) for income taxes on continuing operations | (100) | 184 | (2,337) | 784 | |||||||||||
Income (loss) from continuing operations, net of tax | 157 | 77 | (11,275) | 2,449 | |||||||||||
Income from discontinued operations, net of tax | 324 | 185 | 1,205 | 806 | |||||||||||
Net income (loss) | 481 | 262 | (10,070) | 3,255 | |||||||||||
Less net income (loss) attributable to: | |||||||||||||||
Redeemable noncontrolling interest | 20 | 20 | 81 | 81 | |||||||||||
Noncontrolling interests | 269 | (201) | (232) | 537 | |||||||||||
Net income (loss) attributable to MPC | $ | 192 | $ | 443 | $ | (9,919) | $ | 2,637 | |||||||
Per share data | |||||||||||||||
Basic: | |||||||||||||||
Continuing operations | $ | (0.21) | $ | 0.40 | $ | (17.14) | $ | 2.78 | |||||||
Discontinued operations | 0.50 | 0.28 | 1.86 | 1.22 | |||||||||||
Net income (loss) per share | $ | 0.29 | $ | 0.68 | $ | (15.28) | $ | 4.00 | |||||||
Weighted average shares outstanding (in millions) | 650 | 648 | 649 | 659 | |||||||||||
Diluted: | |||||||||||||||
Continuing operations | $ | (0.21) | $ | 0.40 | $ | (17.14) | $ | 2.76 | |||||||
Discontinued operations | 0.50 | 0.28 | 1.86 | 1.21 | |||||||||||
Net income (loss) per share | $ | 0.29 | $ | 0.68 | $ | (15.28) | $ | 3.97 | |||||||
Weighted average shares outstanding (in millions) | 650 | 653 | 649 | 664 | |||||||||||
(a) | In accordance with discontinued operations accounting, Speedway sales to retail customers and net results are reflected in income from discontinued operations, net of tax and Refining & Marketing intercompany sales to Speedway are presented as third-party sales. |
(b) | The 2020 YTD period includes $1.3 billion of impairment expense. |
Income Summary for Continuing Operations (Unaudited) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Income (loss) from continuing operations by segment | |||||||||||||||
Refining & Marketing(a)(b) | $ | (1,579) | $ | 1,106 | $ | (5,189) | $ | 2,856 | |||||||
Midstream | 974 | 889 | 3,708 | 3,594 | |||||||||||
Corporate(c) | (175) | (244) | (800) | (833) | |||||||||||
Income (loss) from continuing operations before items not | (780) | 1,751 | (2,281) | 5,617 | |||||||||||
Items not allocated to segments: | |||||||||||||||
LCM inventory valuation adjustment | 1,185 | — | — | — | |||||||||||
Impairments(d) | (146) | (1,239) | (9,741) | (1,239) | |||||||||||
Restructuring expenses(e) | (19) | — | (367) | — | |||||||||||
Litigation | 84 | — | 84 | (22) | |||||||||||
Gain on sale of assets | 66 | — | 66 | — | |||||||||||
Transaction-related costs(f) | — | (6) | (8) | (153) | |||||||||||
Equity method investment restructuring gains(g) | — | 52 | — | 259 | |||||||||||
Income (loss) from continuing operations | 390 | 558 | (12,247) | 4,462 | |||||||||||
Net interest and other financial costs | 333 | 297 | 1,365 | 1,229 | |||||||||||
Income (loss) from continuing operations before income | 57 | 261 | (13,612) | 3,233 | |||||||||||
Provision (benefit) for income taxes on continuing operations | (100) | 184 | (2,337) | 784 | |||||||||||
Income (loss) from continuing operations, net of tax | $ | 157 | $ | 77 | $ | (11,275) | $ | 2,449 | |||||||
(a) | Includes direct dealer income from operations of $90 million, $194 million, $393 million and $489 million for the fourth quarter 2020, the fourth quarter 2019, for the year 2020 and for the year 2019, respectively, due to our third quarter 2020 change in segment presentation. |
(b) | Includes last-in, first-out (LIFO) liquidation charges of $305 million for the fourth quarter 2020 and $561 million for the year 2020. |
(c) | Reflects corporate costs of $6 million, $7 million, $26 million and $28 million for the fourth quarter 2020, the fourth quarter 2019, for the year 2020 and for the year 2019, respectively, that are no longer allocated to Speedway under discontinued operations accounting. |
(d) | Includes $7.4 billion goodwill impairment, $1.3 billion impairment of equity method investments and $1.0 billion impairment of long-lived assets in 2020 YTD period. |
(e) | Restructuring expenses for the year 2020 include $195 million of exit costs related to the Martinez and Gallup refineries and $172 million of employee separation costs. |
(f) | 2020 includes costs incurred in connection with the Midstream strategic review. 2019 includes employee severance, retention and other costs related to the acquisition of Andeavor. |
(g) | Represents gain related to the formation of a new joint venture: Capline LLC in the 2019 YTD period. |
Income Summary for Discontinued Operations (Unaudited) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Income from discontinued operations | |||||||||||||||
Speedway | $ | 419 | $ | 290 | $ | 1,701 | $ | 1,121 | |||||||
LCM inventory valuation adjustment | 25 | — | — | — | |||||||||||
Transaction-related costs(a) | (39) | (7) | (114) | (7) | |||||||||||
Income from discontinued operations | 405 | 283 | 1,587 | 1,114 | |||||||||||
Net interest and other financial costs | 5 | 5 | 20 | 18 | |||||||||||
Income from discontinued operations before income taxes | 400 | 278 | 1,567 | 1,096 | |||||||||||
Provision for income taxes on discontinued operations | 76 | 93 | 362 | 290 | |||||||||||
Income from discontinued operations, net of tax | $ | 324 | $ | 185 | $ | 1,205 | $ | 806 | |||||||
(a) | Costs related to the Speedway separation. |
Capital Expenditures and Investments (Unaudited) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Refining & Marketing(a) | $ | 175 | $ | 634 | $ | 1,170 | $ | 2,045 | |||||||
Midstream | 199 | 870 | 1,398 | 3,290 | |||||||||||
Corporate(b) | 40 | 96 | 186 | 237 | |||||||||||
Speedway | 77 | 217 | 277 | 561 | |||||||||||
Total | $ | 491 | $ | 1,817 | $ | 3,031 | $ | 6,133 | |||||||
(a) | Includes direct dealer capital expenditures of $13 million, $20 million, $38 million and $46 million for the fourth quarter 2020, the fourth quarter 2019, for the year 2020 and for the year 2019, respectively, due to our third quarter 2020 change in segment presentation. |
(b) | Includes capitalized interest of $21 million, $40 million, $106 million and $137 million for the fourth quarter 2020, the fourth quarter 2019, for the year 2020 and for the year 2019, respectively. |
Refining & Marketing Operating Statistics (Unaudited) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Dollar per barrel of net refinery throughput: | |||||||||||||||
Refining & Marketing margin, excluding LIFO liquidation | $ | 7.42 | $ | 16.35 | $ | 8.96 | $ | 14.77 | |||||||
LIFO liquidation charge | (1.31) | — | (0.59) | — | |||||||||||
Refining & Marketing margin(a)(b) | 6.11 | 16.35 | 8.37 | 14.77 | |||||||||||
Less: | |||||||||||||||
Refining operating costs | 5.14 | 6.25 | 5.68 | 5.66 | |||||||||||
Distribution costs(a)(d) | 5.44 | 4.61 | 5.37 | 4.52 | |||||||||||
Refining planned turnaround costs | 0.46 | 0.54 | 0.88 | 0.65 | |||||||||||
Depreciation and amortization(a) | 2.00 | 1.63 | 1.96 | 1.58 | |||||||||||
Plus (Less): | |||||||||||||||
Biodiesel tax credit | — | 0.55 | — | 0.08 | |||||||||||
Other(a)(e) | 0.14 | 0.05 | 0.03 | 0.08 | |||||||||||
Refining & Marketing income (loss) from operations(a) | $ | (6.79) | $ | 3.92 | $ | (5.49) | $ | 2.52 | |||||||
Fees paid to MPLX included in distribution costs above | $ | 3.74 | $ | 2.99 | $ | 3.66 | $ | 2.84 | |||||||
Refining & Marketing refined product sales volume (mbpd)(f) | 3,223 | 3,750 | 3,222 | 3,735 | |||||||||||
Crude oil refining capacity (mbpcd)(g) | 2,860 | 3,021 | 2,963 | 3,021 | |||||||||||
Crude oil capacity utilization (percent)(g) | 82 | 94 | 82 | 96 | |||||||||||
Refinery throughputs (mbpd): | |||||||||||||||
Crude oil refined | 2,335 | 2,831 | 2,418 | 2,902 | |||||||||||
Other charge and blendstocks | 193 | 238 | 165 | 210 | |||||||||||
Net refinery throughput | 2,528 | 3,069 | 2,583 | 3,112 | |||||||||||
Sour crude oil throughput (percent) | 47 | 45 | 49 | 48 | |||||||||||
Sweet crude oil throughput (percent) | 53 | 55 | 51 | 52 | |||||||||||
Refined product yields (mbpd): | |||||||||||||||
Gasoline | 1,344 | 1,623 | 1,314 | 1,560 | |||||||||||
Distillates | 892 | 1,074 | 905 | 1,087 | |||||||||||
Propane | 51 | 56 | 51 | 55 | |||||||||||
Feedstocks and special products | 176 | 228 | 244 | 315 | |||||||||||
Heavy fuel oil | 28 | 54 | 28 | 49 | |||||||||||
Asphalt | 76 | 81 | 81 | 87 | |||||||||||
Total | 2,567 | 3,116 | 2,623 | 3,153 | |||||||||||
Inter-region refinery transfers excluded from throughput and | 36 | 148 | 60 | 110 | |||||||||||
(a) | Includes direct dealer results due to our third quarter 2020 change in segment presentation. |
(b) | Sales revenue less cost of refinery inputs and purchased products, divided by net refinery throughput. |
(c) | Excludes refining planned turnaround and depreciation and amortization expense. |
(d) | Excludes depreciation and amortization expense. |
(e) | Includes income (loss) from equity method investments, net gain (loss) on disposal of assets and other income. |
(f) | Includes intersegment sales. |
(g) | Based on calendar day capacity, which is an annual average that includes downtime for planned maintenance and other normal operating activities. YTD 2020 crude oil refining capacity excludes idled Martinez, Gallup and Dickinson facilities for the third and fourth quarters of 2020. |
Refining & Marketing Operating Statistics by Region (Unaudited) | |||||||||||||||
Twelve Months Ended | Twelve Months Ended | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Gulf Coast | |||||||||||||||
Dollar per barrel of refinery throughput:(a) | |||||||||||||||
Refining & Marketing margin(b) | $ | 5.96 | $ | 11.49 | $ | 6.71 | $ | 9.94 | |||||||
Refining operating costs(c) | 3.42 | 5.00 | 4.13 | 4.27 | |||||||||||
Refining planned turnaround costs | 0.12 | 0.65 | 0.70 | 0.30 | |||||||||||
Refining depreciation and amortization | 1.47 | 1.16 | 1.45 | 1.10 | |||||||||||
Refinery throughputs (mbpd): | |||||||||||||||
Crude oil refined | 997 | 1,022 | 987 | 1,115 | |||||||||||
Other charge and blendstocks | 113 | 257 | 129 | 202 | |||||||||||
Gross refinery throughput | 1,110 | 1,279 | 1,116 | 1,317 | |||||||||||
Sour crude oil throughput (percent) | 57 | 58 | 63 | 61 | |||||||||||
Sweet crude oil throughput (percent) | 43 | 42 | 37 | 39 | |||||||||||
Refined product yields (mbpd): | |||||||||||||||
Gasoline | 538 | 569 | 498 | 566 | |||||||||||
Distillates | 389 | 400 | 385 | 428 | |||||||||||
Propane | 28 | 29 | 26 | 28 | |||||||||||
Feedstocks and special products | 172 | 280 | 215 | 291 | |||||||||||
Heavy fuel oil | 3 | 17 | 7 | 15 | |||||||||||
Asphalt | 15 | 15 | 17 | 20 | |||||||||||
Total | 1,145 | 1,310 | 1,148 | 1,348 | |||||||||||
Inter-region refinery transfers included in throughput and yields | 12 | 113 | 36 | 69 | |||||||||||
Mid-Continent | |||||||||||||||
Dollar per barrel of refinery throughput:(a) | |||||||||||||||
Refining & Marketing margin(b) | $ | 8.22 | $ | 17.30 | $ | 10.07 | $ | 17.70 | |||||||
Refining operating costs(c) | 5.03 | 5.36 | 5.19 | 5.16 | |||||||||||
Refining planned turnaround costs | 0.84 | 0.42 | 0.86 | 0.66 | |||||||||||
Refining depreciation and amortization | 1.83 | 1.45 | 1.79 | 1.51 | |||||||||||
Refinery throughputs (mbpd): | |||||||||||||||
Crude oil refined | 936 | 1,189 | 989 | 1,150 | |||||||||||
Other charge and blendstocks | 71 | 64 | 52 | 54 | |||||||||||
Gross refinery throughput | 1,007 | 1,253 | 1,041 | 1,204 | |||||||||||
Sour crude oil throughput (percent) | 26 | 26 | 26 | 27 | |||||||||||
Sweet crude oil throughput (percent) | 74 | 74 | 74 | 73 | |||||||||||
Refined product yields (mbpd): | |||||||||||||||
Gasoline | 560 | 674 | 550 | 632 | |||||||||||
Distillates | 346 | 434 | 355 | 413 | |||||||||||
Propane | 17 | 17 | 18 | 18 | |||||||||||
Feedstocks and special products | 15 | 44 | 48 | 60 | |||||||||||
Heavy fuel oil | 11 | 20 | 11 | 16 | |||||||||||
Asphalt | 61 | 66 | 63 | 67 | |||||||||||
Total | 1,010 | 1,255 | 1,045 | 1,206 | |||||||||||
Inter-region refinery transfers included in throughput and yields | 12 | 12 | 10 | 10 | |||||||||||
West Coast | |||||||||||||||
Dollar per barrel of refinery throughput:(a) | |||||||||||||||
Refining & Marketing margin(b)(d) | $ | 9.28 | $ | 23.15 | $ | 11.69 | $ | 18.54 | |||||||
Refining operating costs(c) | 9.27 | 8.84 | 9.57 | 8.19 | |||||||||||
Refining planned turnaround costs | 0.42 | 0.46 | 1.23 | 1.20 | |||||||||||
Refining depreciation and amortization | 1.61 | 1.26 | 1.56 | 1.11 | |||||||||||
Refinery throughputs (mbpd): | |||||||||||||||
Crude oil refined | 402 | 620 | 442 | 637 | |||||||||||
Other charge and blendstocks | 45 | 65 | 44 | 64 | |||||||||||
Gross refinery throughput | 447 | 685 | 486 | 701 | |||||||||||
Sour crude oil throughput (percent) | 72 | 61 | 70 | 63 | |||||||||||
Sweet crude oil throughput (percent) | 28 | 39 | 30 | 37 | |||||||||||
Refined product yields (mbpd): | |||||||||||||||
Gasoline | 246 | 380 | 266 | 362 | |||||||||||
Distillates | 157 | 240 | 165 | 246 | |||||||||||
Propane | 6 | 10 | 7 | 9 | |||||||||||
Feedstocks and special products | 19 | 45 | 32 | 68 | |||||||||||
Heavy fuel oil | 20 | 24 | 19 | 24 | |||||||||||
Asphalt | — | — | 1 | — | |||||||||||
Total | 448 | 699 | 490 | 709 | |||||||||||
Inter-region refinery transfers included in throughput and yields | 12 | 23 | 14 | 31 | |||||||||||
(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. Excludes LIFO liquidation charges of $305 million for the fourth quarter 2020 and $561 million for the year 2020. |
(c) | Excludes refining planned turnaround and depreciation and amortization expense. |
(d) | Includes direct dealer results due to our third quarter 2020 change in segment presentation. |
Midstream Operating Statistics (Unaudited) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Pipeline throughputs (mbpd)(a) | 4,838 | 5,231 | 4,805 | 5,245 | |||||||||||
Terminal throughput (mbpd) | 2,606 | 3,313 | 2,673 | 3,279 | |||||||||||
Gathering system throughput (million cubic feet per day)(b) | 5,265 | 6,192 | 5,475 | 6,094 | |||||||||||
Natural gas processed (million cubic feet per day)(b) | 8,677 | 8,759 | 8,613 | 8,661 | |||||||||||
C2 (ethane) + NGLs fractionated (mbpd)(b) | 585 | 557 | 562 | 534 | |||||||||||
(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. |
Speedway Operating Statistics (Unaudited) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Speedway fuel sales (millions of gallons) | 1,503 | 1,838 | 5,919 | 7,658 | |||||||||||
Speedway fuel margin (dollars per gallon)(a) | $ | 0.2899 | $ | 0.2611 | $ | 0.3452 | $ | 0.2434 | |||||||
Merchandise sales (in millions) | $ | 1,587 | $ | 1,569 | $ | 6,384 | $ | 6,305 | |||||||
Merchandise margin (in millions) | $ | 470 | $ | 451 | $ | 1,846 | $ | 1,827 | |||||||
Merchandise margin percent | 29.7 | % | 28.7 | % | 28.9 | % | 29.0 | % | |||||||
Same store gasoline sales volume (period over period)(b) | (18.1) | % | (4.2) | % | (20.0) | % | (3.3) | % | |||||||
Same store merchandise sales (period over period)(b)(c) | 1.8 | % | 4.7 | % | (0.2) | % | 5.4 | % | |||||||
Total convenience stores at period-end | 3,839 | 3,898 | |||||||||||||
(a) | Includes bankcard processing fees (as applicable). |
(b) | Same store comparison includes only locations owned at least 13 months. |
(c) | Excludes cigarettes. |
Select Financial Data (Unaudited) | |||||||
(In millions) | December 31 | September 30 | |||||
Cash and cash equivalents(a) | $ | 555 | $ | 716 | |||
MPC debt(b) | 11,575 | 11,648 | |||||
MPLX debt | 20,139 | 20,349 | |||||
Total consolidated debt(b) | 31,714 | 31,997 | |||||
Redeemable noncontrolling interest | 968 | 968 | |||||
Equity | 29,159 | 29,546 | |||||
Shares outstanding | 651 | 651 | |||||
(a) | Includes Speedway's cash and cash equivalents of $140 million and $98 million, respectively, which is classified as assets held for sale on MPC's consolidated balance sheets. Includes MPLX cash and cash equivalents of $15 million and $28 million, respectively. |
(b) | Includes Speedway's debt of $130 million and $120 million, respectively, which is classified as liabilities held for sale on MPC's consolidated balance sheets. |
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. For the three and twelve months ended Dec. 31, 2020, we applied a combined federal and state statutory tax rate of 24% to the adjusted pre-tax loss for those periods. 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) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Net income (loss) attributable to MPC | $ | 192 | $ | 443 | $ | (9,919) | $ | 2,637 | |||||||
Pre-tax adjustments: | |||||||||||||||
LCM inventory valuation adjustment | (1,210) | — | — | — | |||||||||||
Impairments | 146 | 1,239 | 9,741 | 1,239 | |||||||||||
Restructuring expenses | 19 | — | 367 | — | |||||||||||
LIFO liquidation charge | 305 | — | 561 | — | |||||||||||
Litigation | (84) | — | (84) | 22 | |||||||||||
Gain on sale of assets | (66) | — | (66) | — | |||||||||||
Transaction-related costs | 39 | 13 | 122 | 160 | |||||||||||
Equity method investment restructuring gains | — | (52) | — | (259) | |||||||||||
Biodiesel tax credit | — | (175) | — | (104) | |||||||||||
Out of period tax adjustment | — | — | — | 36 | |||||||||||
Purchase accounting - depreciation and amortization | — | — | — | (17) | |||||||||||
Tax impact of adjustments(a) | 71 | 9 | (1,638) | 22 | |||||||||||
Non-controlling interest impact of adjustments | (20) | (459) | (1,315) | (457) | |||||||||||
Adjusted net income (loss) attributable to MPC | $ | (608) | $ | 1,018 | $ | (2,231) | $ | 3,279 | |||||||
Diluted income (loss) per share | $ | 0.29 | $ | 0.68 | $ | (15.28) | $ | 3.97 | |||||||
Adjusted diluted income (loss) per share(b) | $ | (0.94) | $ | 1.56 | $ | (3.44) | $ | 4.94 | |||||||
(a) | For the three and twelve months ended Dec. 31, 2020, income taxes for adjusted earnings was calculated by applying a combined federal and state statutory tax rate of 24% to the adjusted pre-tax loss for these periods. The corresponding adjustments to reported income taxes is shown in the table above. |
(b) | For the three and twelve months ended Dec. 31, 2020, weighted-average diluted shares used for the adjusted net loss per share calculations do not assume the conversion of share-based awards, as the effect would be antidilutive. |
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 from Continuing | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Net income (loss) attributable to MPC | $ | 192 | $ | 443 | $ | (9,919) | $ | 2,637 | |||||||
Plus (Less): | |||||||||||||||
Income from discontinued operations, net of tax | (324) | (185) | (1,205) | (806) | |||||||||||
Net interest and other financial costs | 333 | 297 | 1,365 | 1,229 | |||||||||||
Net income (loss) attributable to noncontrolling interests | 289 | (181) | (151) | 618 | |||||||||||
Provision (benefit) for income taxes | (100) | 184 | (2,337) | 784 | |||||||||||
Depreciation and amortization | 849 | 850 | 3,375 | 3,225 | |||||||||||
Refining planned turnaround costs | 107 | 153 | 832 | 740 | |||||||||||
LCM inventory valuation adjustment | (1,185) | — | — | — | |||||||||||
Impairments | 146 | 1,239 | 9,741 | 1,239 | |||||||||||
Restructuring expenses | 19 | — | 367 | — | |||||||||||
LIFO liquidation charge | 305 | — | 561 | — | |||||||||||
Litigation | (84) | — | (84) | 22 | |||||||||||
Gain on sale of assets | (66) | — | (66) | — | |||||||||||
Transaction-related costs | — | 6 | 8 | 153 | |||||||||||
Equity method investment restructuring gains | — | (52) | — | (259) | |||||||||||
Adjusted EBITDA from continuing operations | $ | 481 | $ | 2,754 | $ | 2,487 | $ | 9,582 | |||||||
Reconciliation of Income from Discontinued Operations, Net of Tax to EBITDA from Discontinued | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Income from discontinued operations, net of tax | $ | 324 | $ | 185 | $ | 1,205 | $ | 806 | |||||||
Plus (Less): | |||||||||||||||
Net interest and other financial costs | 5 | 5 | 20 | 18 | |||||||||||
Provision for income taxes | 76 | 93 | 362 | 290 | |||||||||||
Depreciation and amortization(a) | 7 | 128 | 244 | 413 | |||||||||||
LCM inventory valuation adjustment | (25) | — | — | — | |||||||||||
Transaction-related costs | 39 | 7 | 114 | 7 | |||||||||||
Adjusted EBITDA from discontinued operations | $ | 426 | $ | 418 | $ | 1,945 | $ | 1,534 | |||||||
(a) | As of August 2, 2020, MPC ceased recording depreciation and amortization for Speedway. Asset write-offs and retirements charges, which totaled $7 million for the fourth quarter 2020, are presented as depreciation and amortization in our financial statements for all periods presented. |
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 | |||||||||||||||
Effective in the third quarter of 2020, Refining & Marketing historical results have been recast and now | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Refining & Marketing income (loss) from operations(a) | $ | (1,579) | $ | 1,106 | $ | (5,189) | $ | 2,856 | |||||||
Plus (Less): | |||||||||||||||
Selling, general and administrative expenses | 454 | 549 | 2,030 | 2,211 | |||||||||||
LCM inventory valuation adjustment | 1,185 | — | — | — | |||||||||||
(Income) loss from equity method investments | (8) | (1) | (2) | (11) | |||||||||||
Net (gain) loss on disposal of assets | (1) | — | (1) | (8) | |||||||||||
Other income | (26) | (13) | (35) | (43) | |||||||||||
Refining & Marketing gross margin | 25 | 1,641 | (3,197) | 5,005 | |||||||||||
Plus (Less): | |||||||||||||||
Operating expenses (excluding depreciation and amortization) | 2,213 | 2,829 | 9,694 | 10,710 | |||||||||||
LCM inventory valuation adjustment | (1,185) | — | — | — | |||||||||||
Depreciation and amortization | 465 | 461 | 1,857 | 1,780 | |||||||||||
Gross margin excluded from Refining & Marketing margin(b) | (80) | (157) | (365) | (621) | |||||||||||
Other taxes included in Refining & Marketing margin | (17) | (3) | (79) | (11) | |||||||||||
Biodiesel tax credit | — | (153) | — | (93) | |||||||||||
Refining & Marketing margin(a) | 1,421 | 4,618 | 7,910 | 16,770 | |||||||||||
LIFO liquidation charge | 305 | — | 561 | — | |||||||||||
Refining & Marketing margin, excluding LIFO liquidation charge | $ | 1,726 | $ | 4,618 | $ | 8,471 | $ | 16,770 | |||||||
Refining & Marketing margin by region: | |||||||||||||||
Gulf Coast | $ | 601 | $ | 1,233 | $ | 2,652 | $ | 4,525 | |||||||
Mid-Continent | 753 | 1,975 | 3,801 | 7,712 | |||||||||||
West Coast | 372 | 1,410 | 2,018 | 4,533 | |||||||||||
Refining & Marketing margin, excluding LIFO liquidation charge | $ | 1,726 | $ | 4,618 | $ | 8,471 | $ | 16,770 | |||||||
(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 other related operations included in the Refining & Marketing segment such as biodiesel facilities, ethanol ventures, cogeneration power facilities and processing of credit card transactions on behalf of certain of our marketing customers. |
Speedway Fuel Margin
Speedway fuel margin is defined as the price paid by consumers less the cost of refined products, including transportation, consumer excise taxes and bankcard processing fees (where applicable).
Speedway Merchandise Margin
Speedway merchandise margin is defined as the price paid by consumers less the cost of merchandise.
Reconciliation of Income from Discontinued Operations to Speedway Gross Margin and Speedway Margin | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
(in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Income from discontinued operations | $ | 405 | $ | 283 | $ | 1,587 | $ | 1,114 | |||||||
Plus (Less): | |||||||||||||||
Operating, selling, general and administrative expenses | 597 | 617 | 2,376 | 2,371 | |||||||||||
Income from equity method investments | (23) | (24) | (93) | (82) | |||||||||||
Net gain on disposal of assets | (1) | (27) | (1) | (29) | |||||||||||
Other income | (43) | (35) | (170) | (44) | |||||||||||
Speedway gross margin | 935 | 814 | 3,699 | 3,330 | |||||||||||
Plus (Less): | |||||||||||||||
LCM inventory valuation adjustment | (25) | — | — | — | |||||||||||
Depreciation and amortization | 7 | 128 | 244 | 413 | |||||||||||
Speedway margin(a) | $ | 917 | $ | 942 | $ | 3,943 | $ | 3,743 | |||||||
Speedway margin: | |||||||||||||||
Fuel margin | $ | 436 | $ | 479 | $ | 2,043 | $ | 1,864 | |||||||
Merchandise margin | 470 | 451 | 1,846 | 1,827 | |||||||||||
Other margin | 11 | 12 | 54 | 52 | |||||||||||
Speedway margin | $ | 917 | $ | 942 | $ | 3,943 | $ | 3,743 | |||||||
(a) | LCM inventory valuation adjustments are excluded from Speedway margin. |
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-reports-fourth-quarter-2020-results-301219856.html
SOURCE Marathon Petroleum Corporation
Article Date
2/2/2021Marathon Petroleum Corp. Names Brian C. Davis as Chief Commercial Officer
Source: PR Newswire
Orignial Article: https://contentapi.cision...
FINDLAY, Ohio, Feb. 1, 2021 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC) announced today that Brian C. Davis has joined the company as Executive Vice President and Chief Commercial Officer. In this role, Mr. Davis will be responsible for leading all commercial business activities across MPC's integrated value chain and will report to President and Chief Executive Officer Michael J. Hennigan.
"Brian's extensive commercial experience, recent deep background in renewables and alternative energy, and track record of developing and enhancing capabilities is highly complementary to our strategic focus on improving our commercial performance," said Hennigan. "The addition of Brian to our leadership team is a significant step toward maximizing the value of our integrated system and accelerating our go-forward growth strategy."
Prior to joining MPC, Mr. Davis spent 32 years with Royal Dutch Shell in roles spanning the full oil and gas value chain, including a number of global and regional senior leadership positions in which he was responsible for driving transformation and growth. As Global Vice President, Energy Solutions from 2016 to 2020 and Group Vice President, Corporate Strategy from 2014 to 2016, Mr. Davis played a key role in shaping Shell's new energy strategy and developing its low carbon energy business.
During his career with Shell, Mr. Davis also served as Global Vice President, Base Chemicals from 2011 to 2014; Global Vice President, Downstream Strategy from 2009 to 2011; General Manager, Refining and Supply Strategy from 2005 to 2009; and General Manager, Shell Western Supply and Trading from 2001 to 2005. He began his career as a chemical engineer in operational and engineering roles at Shell's Clyde refinery in Australia and has also worked in Asia, Europe, the Middle East, North America and South America.
Mr. Davis holds a bachelor's degree in chemical engineering from the University of Sydney.
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 Contact: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Media Contact:
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
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. 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. We have based our forward-looking statements on our current expectations, estimates and projections about our industry and our company. 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 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. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we have included in MPC's Form 10-K for the year ended Dec. 31, 2019, Forms 10-Q and other SEC filings, 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. 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.
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-names-brian-c-davis-as-chief-commercial-officer-301219384.html
SOURCE Marathon Petroleum Corporation
Article Date
2/1/2021Marathon Petroleum Corp. to host 2021 annual meeting of shareholders
Source: PR Newswire
Orignial Article: https://contentapi.cision...
FINDLAY, Ohio, Feb. 1, 2021 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) announced today that its annual meeting of shareholders will take place April 28, 2021, at 10 a.m. EDT in a virtual-only format via live webcast at www.virtualshareholdermeeting.com/MPC2021. Shareholders of record as of March 2, 2021, are entitled to notice of and to vote at the annual meeting. The company's proxy statement will include additional information regarding how shareholders may access and participate in the virtual annual meeting.
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
Brian Worthington, Manager, Investor Relations
Media Contacts:
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-to-host-2021-annual-meeting-of-shareholders-301218984.html
SOURCE Marathon Petroleum Corporation
Article Date
2/1/2021Marathon Petroleum Corp. Announces Quarterly Dividend
Source: PR Newswire
Orignial Article: https://contentapi.cision...
FINDLAY, Ohio, Jan. 29, 2021 /PRNewswire/ -- The board of directors of Marathon Petroleum Corp. (NYSE: MPC) has declared a dividend of $0.58 per share on common stock. The dividend is payable March 10, 2021, to shareholders of record as of the close of business Feb. 17, 2021.
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
Brian Worthington, Manager, Investor Relations
Taryn Erie, Manager, Investor Relations
Media Contact:
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-announces-quarterly-dividend-301218346.html
SOURCE Marathon Petroleum Corporation
Article Date
1/29/2021Marathon Petroleum Corp. to announce 2020 fourth-quarter and full-year financial results Feb. 2; conference call rescheduled to 11 a.m. EST
Source: PR Newswire
Orignial Article: https://contentapi.cision...
FINDLAY, Ohio, Jan. 26, 2021 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) has adjusted the time of its conference call with analysts on Tuesday, Feb. 2, 2021, to begin at 11 a.m. EST. During the call, MPC executives will discuss 2020 fourth-quarter and full-year financial results, which will be released earlier that day, and provide an update on company operations.
Interested parties may listen to the conference call by visiting MPC's website at www.marathonpetroleum.com. 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 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 Contact: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Brian Worthington, Manager, Investor Relations
Taryn Erie, Manager, Investor Relations
Media Contact:
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-to-announce-2020-fourth-quarter-and-full-year-financial-results-feb-2-conference-call-rescheduled-to-11-am-est-301215572.html
SOURCE Marathon Petroleum Corporation
Article Date
1/26/2021Marathon Petroleum Corp. Names Maryann T. Mannen as Chief Financial Officer
Source: PR Newswire
Orignial Article: https://contentapi.cision...
FINDLAY, Ohio, Jan. 13, 2021 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC) today announced that Maryann T. Mannen will join the company as Executive Vice President and Chief Financial Officer effective January 25. Ms. Mannen will succeed retiring CFO Donald C. Templin.
"Having spent nearly a decade as CFO in the energy services and manufacturing sectors, Maryann brings the financial acumen and strategic leadership experience critical for delivering our business transformation objectives, including strict capital discipline and overall expense management to lower our cost structure," said President and Chief Executive Officer Michael J. Hennigan. "I'm excited for the perspective and business insights Maryann will add to our executive team, as we work together to continue strengthening our financial and competitive positions."
Since 2017, Ms. Mannen has served as Executive Vice President and Chief Financial Officer of TechnipFMC, a leading global engineering services and energy technology company incorporated in the United Kingdom and headquartered in Paris and Houston, with listings on the NYSE and Euronext Paris. From 2011 to 2017, she was Chief Financial Officer at FMC Technologies, prior to its merger with Technip SA, which Ms. Mannen played a key role in negotiating and executing. Before that, she served as the company's Deputy Chief Financial Officer and Treasurer from 2010 to 2011 and Vice President of Administration from 2007 to 2010. Prior to joining FMC Technologies in 1986, Ms. Mannen was Finance Manager for Sheller-Globe Corporation.
Ms. Mannen holds a bachelor's degree in accounting and a master of business administration degree from Rider University. She is a member of the Owens Corning board of directors and has served as the audit committee chair since 2019.
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 Contact: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Media Contact:
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
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. You can identify our forward-looking statements by words such as "anticipate," "believe," "budget," "commitment," "design," "estimate," "expect," "focus," "forecast," "forward," "goal," "guidance," "imply," "intend," "look," "objective," "opportunity," "outlook," "plan," "policy," "position," "potential," "predict," "priority," "project," "projection," "proposition," "prospective," "pursue," "schedule," "seek," "strategy," "target," "could," "may," "should," "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. We have based our forward-looking statements on our current expectations, estimates and projections about our industry and our company. 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 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. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we have included in MPC's Form 10-K for the year ended Dec. 31, 2019, Forms 10-Q and other SEC filings, 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. 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.
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-names-maryann-t--mannen-as-chief-financial-officer-301207086.html
SOURCE Marathon Petroleum Corporation
Article Date
1/13/202112/18/2020 - Marathon Petroleum Corp. to Announce 2020 Fourth-Quarter and Full-Year Financial Results Feb. 2
Marathon Petroleum Corp. to Announce 2020 Fourth-Quarter and Full-Year Financial Results Feb. 2
Source: PR Newswire
FINDLAY, Ohio, Dec. 18, 2020 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) will host a conference call with analysts on Tuesday, Feb. 2, 2021, at 9:30 a.m. EST to discuss 2020 fourth-quarter and full-year financial results, which will be released earlier that day, and to provide an update on company operations.
Interested parties may listen to the conference call by visiting MPC's website at www.marathonpetroleum.com. 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 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 Contact: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Brian Worthington, Manager, Investor Relations
Media Contact:
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-to-announce-2020-fourth-quarter-and-full-year-financial-results-feb-2-301195974.html
SOURCE Marathon Petroleum Corporation
Article Date
12/18/2020MPLX LP to Announce 2020 Fourth-Quarter and Full-Year Financial Results Feb. 2
Source: PR Newswire
FINDLAY, Ohio, Dec. 18, 2020 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will host a conference call with analysts on Tuesday, Feb. 2, 2021, at 11 a.m. EST to discuss 2020 fourth-quarter and full-year financial results, which will be released earlier that day, and to provide an update on company operations.
Interested parties may listen to the conference call by visiting MPLX's website at www.mplx.com. A replay of the webcast will be available on MPLX's website for two weeks. Financial information, including this earnings release and other investor-related material, will also be available online prior to the conference call and webcast at www.mplx.com.
About MPLX LP
MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.MPLX.com.
Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Taryn Erie, Manager, Investor Relations
Media Contact:
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/mplx-lp-to-announce-2020-fourth-quarter-and-full-year-financial-results-feb-2-301195976.html
SOURCE MPLX LP
Article Date
12/18/2020Marathon Petroleum Corp. announces CFO to retire early next year
Source: PR Newswire
FINDLAY, Ohio, Nov. 11, 2020 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC) today announced that Donald C. Templin, executive vice president and chief financial officer, has elected to retire from the company, effective in January 2021. A nationwide search for the company's next CFO is ongoing.
"Don was part of the original management team that established MPC as a publicly-traded company, and his deep financial experience, strong business skills and broad knowledge of our industry have been an integral part of our growth and success," said Michael J. Hennigan, president and chief executive officer. "I'm especially grateful for Don's leadership during this challenging year for our business and the support he provided during my transition to CEO. We thank Don for his many contributions to MPC and MPLX over the past decade, and I look forward to working with him to close out this year before he begins his well-earned retirement."
Mr. Templin joined MPC in 2011 as senior vice president and CFO. He became executive vice president, Supply, Transportation and Marketing in 2015, and was appointed president of MPC in 2017. In 2018, Mr. Templin was named president, Refining, Marketing and Supply, and assumed his current position in 2019. Prior to MPC, Mr. Templin spent more than 25 years with PricewaterhouseCoopers LLP, providing auditing and advisory services to a wide variety of private, public and multinational companies, including serving as managing partner of the audit practice in Georgia, Alabama and Tennessee.
Mr. Templin also serves as a member of the board of directors of the general partner of MPLX LP (NYSE: MPLX), MPC's sponsored master limited partnership. The MPLX board will consider Mr. Templin's continued membership on the board in light of his upcoming retirement as an MPC executive.
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.
About MPLX LP
MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.MPLX.com.
Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Media Contact:
Jamal Kheiry, Manager, Media Relations (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-announces-cfo-to-retire-early-next-year-301171317.html
SOURCE Marathon Petroleum Corporation; MPLX LP
Article Date
11/11/2020Marathon Petroleum Corp. Reports Third-Quarter 2020 Results
Source: PR Newswire
FINDLAY, Ohio, Nov. 2, 2020 /PRNewswire/ --
Marathon Petroleum Corp. (NYSE: MPC) today reported a net loss of $1.0 billion, or $(1.57) per diluted share, for the third quarter of 2020, compared with net income of $1.1 billion, or $1.66 per diluted share, for the third quarter of 2019.
Third-quarter 2020 results include net pre-tax charges of $525 million as shown in the accompanying release tables. Adjusted net loss was $649 million, or $(1.00) per diluted share, for the third quarter of 2020, compared with adjusted net income of $1.1 billion, or $1.63 per diluted share, for the third quarter of 2019.
"The challenges created by COVID continued through the third quarter," said President and Chief Executive Officer Michael J. Hennigan. "Despite some recovery, global demand for our products and services remains significantly below historical levels, which continues to pressure profitability for both our company and the industry.
"As we navigate these challenges, we remain focused on the aspects of our business within our control. First, we strengthened the competitive position of our assets by advancing our investments in renewables. Our Dickinson renewable fuels facility is starting up. With respect to the conversion of our Martinez refinery into a renewable diesel facility, we filed for permits, progressed feedstock supplier discussions, and began detailed engineering activities. Second, we continued working toward a first-quarter 2021 closing for the Speedway sale and remain committed to using the proceeds to strengthen our balance sheet and return capital to shareholders. And third, we took incremental steps to reduce our cost structure, including the implementation of a workforce reduction plan. The difficult decision to reduce our workforce was not made lightly, and we are committed to treating our employees with integrity and respect as we take these necessary steps to position the company for through-cycle resiliency."
Results from Operations
On Aug. 2, 2020, MPC entered into a definitive agreement to sell Speedway to 7-Eleven, Inc. for $21 billion in cash. Due to the announced sale, MPC has made the following changes to its third-quarter 2020 and historical results:
Speedway's results are presented differently under discontinued operations accounting as compared to their previous presentation. The major changes include:
Three Months Ended | |||||||
(In millions) | 2020 | 2019 | |||||
Income (loss) from continuing operations by segment | |||||||
Refining & Marketing(a) | $ | (1,569) | $ | 989 | |||
Midstream | 960 | 919 | |||||
Corporate(b) | (197) | (206) | |||||
Income (loss) from continuing operations before items not allocated to segments | (806) | 1,702 | |||||
Items not allocated to segments: | |||||||
Transaction-related costs | — | (22) | |||||
Impairments | (433) | — | |||||
Restructuring expenses | (348) | — | |||||
LCM inventory valuation adjustment | 530 | — | |||||
Income (loss) from continuing operations | $ | (1,057) | $ | 1,680 | |||
Income from discontinued operations | |||||||
Speedway | $ | 456 | $ | 344 | |||
Transaction-related costs | (18) | — | |||||
Income from discontinued operations | $ | 438 | $ | 344 | |||
Income (loss) from continuing and discontinued operations | $ | (619) | $ | 2,024 | |||
(a) | Recast to reflect direct dealer income from operations of $103 million and $106 million for the third quarters of 2020 and 2019, respectively. Includes a last-in, first-out (LIFO) liquidation charge of $256 million in the third quarter of 2020. |
(b) | Recast to reflect corporate costs of $7 million and $8 million for the third quarters of 2020 and 2019, respectively, that are no longer allocable to Speedway under discontinued operations accounting. |
Adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) was $1.0 billion in the third quarter of 2020, compared with $3.1 billion for the third quarter of 2019. As detailed in the table below, adjusted EBITDA is shown for both continuing and discontinued operations. Adjusted EBITDA from continuing operations excludes refining planned turnaround costs.
Reconciliation of Income (Loss) From Operations to Adjusted EBITDA | |||||||
Three Months Ended | |||||||
(In millions) | 2020 | 2019 | |||||
Refining & Marketing Segment | |||||||
Segment income (loss) from operations | $ | (1,569) | $ | 989 | |||
Add: Depreciation and amortization | 456 | 416 | |||||
Refining planned turnaround costs | 234 | 164 | |||||
LIFO liquidation charge | 256 | — | |||||
Segment Adjusted EBITDA | $ | (623) | $ | 1,569 | |||
Midstream Segment | |||||||
Segment income from operations | $ | 960 | $ | 919 | |||
Add: Depreciation and amortization | 335 | 300 | |||||
Segment EBITDA | $ | 1,295 | $ | 1,219 | |||
Segment Adjusted EBITDA | $ | 672 | $ | 2,788 | |||
Corporate | (197) | (206) | |||||
Add: Depreciation and amortization | 39 | 45 | |||||
Adjusted EBITDA from continuing operations | $ | 514 | $ | 2,627 | |||
Speedway | |||||||
Speedway | $ | 456 | $ | 344 | |||
Add: Depreciation and amortization(a) | 36 | 94 | |||||
Adjusted EBITDA from discontinued operations | $ | 492 | $ | 438 | |||
Adjusted EBITDA from continuing and discontinued operations | $ | 1,006 | $ | 3,065 | |||
(a) | As of August 2, 2020, MPC ceased recording depreciation and amortization for Speedway. |
Refining & Marketing (R&M)
As discussed above, R&M segment results now include the results of the direct dealer business. Prior periods have been recast to reflect this change in segment presentation.
R&M segment loss from operations was $1.6 billion in the third quarter of 2020, compared with income of $989 million for the third quarter of 2019. Third quarter 2020 and third quarter 2019 R&M segment results include direct dealer income from operations of $103 million and $106 million, respectively. Segment results also include a LIFO liquidation charge of $256 million in the third quarter of 2020.
Segment adjusted EBITDA was $(623) million in the third quarter of 2020, versus $1.6 billion for the third quarter of 2019. Segment adjusted EBITDA excludes refining planned turnaround costs, which totaled $234 million in the third quarter of 2020 and $164 million in the third quarter of 2019. It also excludes a non-cash LIFO liquidation charge of $256 million in the third quarter of 2020. The decrease in R&M earnings was primarily due to reduced throughput, lower crack spreads, and weaker crude differentials.
R&M margin, excluding the LIFO liquidation charge, was $8.28 per barrel for the third quarter of 2020, versus $15.11 for the third quarter of 2019. Crude capacity utilization was 84% (excluding idled facilities) resulting in total throughput of 2.5 million barrels per day. Clean product yield was 85%.
Midstream
There have been no changes to the presentation of midstream segment results.
Midstream segment income from operations, which primarily reflects the results of MPLX LP (NYSE: MPLX), was $960 million in the third quarter of 2020, compared with $919 million for the third quarter of 2019.
Segment EBITDA was $1.3 billion in the third quarter of 2020, versus $1.2 billion for the third 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
As discussed above, corporate costs are no longer allocable to Speedway under discontinued operations accounting. Prior periods have been recast to exclude any allocation of corporate costs to Speedway. These costs averaged approximately $7 million per quarter in 2020.
Corporate expenses totaled $197 million in the third quarter of 2020, compared with $206 million in the third quarter of 2019. Third quarter 2020 and third quarter 2019 corporate expenses include expenses of $7 million and $8 million, respectively, which are no longer allocable to Speedway.
Items not allocated to continuing operations included net charges of $251 million in the third quarter of 2020, compared with charges of $22 million in the third quarter of 2019. Third-quarter 2020 results include a $530 million lower of cost or market (LCM) inventory benefit, $433 million of impairment expense related to long-lived assets primarily related to the repositioning of the Martinez refinery, and $348 million of restructuring expenses related to the idling of the Martinez and Gallup refineries and costs related to our announced workforce reduction. Discontinued operations included $18 million of costs related to the Speedway separation in the third quarter of 2020.
Speedway
As discussed above, the results of Speedway are required to be reported separately as discontinued operations. MPC ceased recording D&A for Speedway in August 2020. Therefore, third-quarter 2020 results reflect $36 million for only one month of D&A, as compared to $94 million for three months of D&A in third-quarter 2019. Results for all periods presented exclude any allocation of corporate costs to Speedway. These costs have averaged approximately $7 million per quarter in 2020.
Speedway income from operations was $456 million in the third quarter of 2020, compared with $344 million for the third quarter of 2019. Speedway EBITDA was $492 million in the third quarter of 2020, versus $438 million for the third quarter of 2019. Quarterly results reflect higher fuel margin and merchandise sales partially offset by lower fuel volumes.
Speedway fuel margin was 30.25 cents per gallon in the third quarter of 2020, versus 26.04 cents per gallon in the third quarter of 2019. Same-store merchandise sales increased by 0.8% year-over-year and Speedway same-store gasoline sales volume decreased by 16.6% year-over-year.
Financial Position and Liquidity
As of Sept. 30, 2020, the company had $688 million in cash and cash equivalents (excluding MPLX's cash and cash equivalents of $28 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 $750 million available under its trade receivables securitization facility. The company also renewed its $1 billion 364-day bank revolving credit facility that was to expire in September.
In October, the company redeemed all of the $475 million outstanding aggregate principal amount of its senior notes due Oct. 1, 2022, using available revolver capacity. As of Oct. 31, 2020, the company had total credit facility availability, excluding MPLX facilities, in excess of $7 billion.
Strategic and Operations Update
The company continues to progress activities related to the $21 billion sale of Speedway to 7-Eleven, targeting a close of the transaction in the first quarter of 2021. 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 Dickinson, North Dakota renewable fuels facility is starting up. At full capacity, the facility is expected to produce 12,000 barrels per day of 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.
The company also progressed activities associated with the conversion of the Martinez refinery to a renewable diesel facility, including applying for permits, advancing discussions with feedstock suppliers, and beginning detailed engineering activities. As envisioned, the Martinez facility would be expected to start producing renewable diesel in 2022, with a potential to build to full capacity of 48,000 barrels per day in 2023.
Consistent with MPC's midstream strategy of developing long-haul pipelines and other logistics solutions, the company advanced 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.
Fourth Quarter 2020 Outlook
Refining & Marketing Segment: | ||||||||||||
Refining operating costs per barrel(a) | $ | 5.50 | ||||||||||
Distribution costs (in millions) | $ | 1,320 | ||||||||||
Refining planned turnaround costs (in millions) | $ | 100 | ||||||||||
Depreciation and amortization (in millions) | $ | 465 | ||||||||||
Refinery throughputs (mbpd): | ||||||||||||
Crude oil refined | 2,265 | |||||||||||
Other charge and blendstocks | 215 | |||||||||||
Total | 2,480 | |||||||||||
(a) | Excludes refining planned turnaround and depreciation and amortization expense | |||||||||||
Speedway | Range | ||||||
Fuel sales (millions of gallons) | 1,450 | 1,650 | |||||
Merchandise sales (in millions) | $ | 1,550 | $ | 1,650 | |||
Corporate and unallocated items (in millions) | $ | 185 | |||||
Conference Call
At 9:30 a.m. EST 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 www.marathonpetroleum.com. 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 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
Brian Worthington, Manager, Investor Relations
Media Contact: (419) 421-3312
Jamal Kheiry, Manager, Communications
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, including any related government policies and actions, 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 proposed sale of Speedway, the ability to successfully complete the sale within the expected timeframe, on the expected terms, or at all, based on numerous factors, including the failure to satisfy any of the conditions to the consummation of the proposed transaction (including obtaining certain governmental or regulatory approvals on the proposed terms and schedule), the occurrence of any event, change or other circumstance that could give rise to the termination of the proposed transaction; MPC's ability to utilize the proceeds as anticipated; the risk that the dissynergy costs, costs of restructuring transactions and other costs incurred in connection with the proposed transaction will exceed our estimates; and our ability to capture value and realize the other expected benefits from the associated ongoing supply relationship following consummation of the proposed sale; the risk that the cost savings and any other synergies from our acquisition of Andeavor and the acquisition of Andeavor Logistics LP (ANDX) by MPLX LP (MPLX) may not be fully realized or may take longer to realize than expected, including whether the ANDX transaction will be accretive within the expected timeframe or at all; disruption from the Andeavor or ANDX transactions making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of Andeavor or ANDX, respectively; 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, 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, including the potential conversion of the Martinez Refinery to a renewable diesel facility; the receipt of relevant third party and/or regulatory approvals; the reliability of processing units and other equipment; the successful realization of 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, complete announced capital projects and to effect any share repurchases or to maintain or increase the dividend; the effect of restructuring or reorganization of business components, including those undertaken in connection with the Speedway sale and workforce reduction; the potential effects of judicial or other proceedings, including remedial actions involving removal and reclamation obligations under environmental regulations, 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 (including any related government policies and actions), other infectious disease outbreaks, natural hazards, extreme weather events or otherwise; general economic, political or regulatory developments, including changes in governmental policies relating to refined petroleum products, crude oil, natural gas or NGLs, regulation or taxation and other economic and political developments (including those caused by public health issues and outbreaks); 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, permitting and regulations, including the cost of compliance with the Renewable Fuel Standard, and/or enforcement actions initiated thereunder; the 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 Annual Report on Form 10-K for the year ended December 31, 2019, 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. Any forward-looking statements speak only as of the date of the applicable communication and 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 | Nine Months Ended | ||||||||||||||
(In millions, except per-share data) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Revenues and other income: | |||||||||||||||
Sales and other operating revenues(a) | $ | 17,408 | $ | 27,552 | $ | 51,807 | $ | 83,140 | |||||||
Income (loss) from equity method investments(b) | 117 | 104 | (1,037) | 272 | |||||||||||
Net gain on disposal of assets | 1 | 2 | 6 | 220 | |||||||||||
Other income | 22 | 30 | 69 | 93 | |||||||||||
Total revenues and other income | 17,548 | 27,688 | 50,845 | 83,725 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of revenues (excludes items below)(a) | 16,673 | 24,345 | 48,517 | 74,626 | |||||||||||
LCM inventory valuation adjustment | (530) | — | 1,185 | — | |||||||||||
Impairment expense | 433 | — | 8,280 | — | |||||||||||
Depreciation and amortization | 830 | 761 | 2,526 | 2,375 | |||||||||||
Selling, general and administrative expenses | 673 | 761 | 2,080 | 2,413 | |||||||||||
Restructuring expenses | 348 | — | 348 | — | |||||||||||
Other taxes | 178 | 141 | 546 | 407 | |||||||||||
Total costs and expenses | 18,605 | 26,008 | 63,482 | 79,821 | |||||||||||
Income (loss) from continuing operations | (1,057) | 1,680 | (12,637) | 3,904 | |||||||||||
Net interest and other financial costs | 359 | 312 | 1,032 | 932 | |||||||||||
Income (loss) from continuing operations before income taxes | (1,416) | 1,368 | (13,669) | 2,972 | |||||||||||
Provision (benefit) for income taxes on continuing operations | (304) | 255 | (2,105) | 600 | |||||||||||
Income (loss) from continuing operations, net of tax | (1,112) | 1,113 | (11,564) | 2,372 | |||||||||||
Income from discontinued operations, net of tax | 371 | 254 | 881 | 621 | |||||||||||
Net income (loss) | (741) | 1,367 | (10,683) | 2,993 | |||||||||||
Less net income (loss) attributable to: | |||||||||||||||
Redeemable noncontrolling interest | 20 | 20 | 61 | 61 | |||||||||||
Noncontrolling interests | 257 | 252 | (501) | 738 | |||||||||||
Net income (loss) attributable to MPC | $ | (1,018) | $ | 1,095 | $ | (10,243) | $ | 2,194 | |||||||
Per share data | |||||||||||||||
Basic: | |||||||||||||||
Continuing operations | $ | (2.14) | $ | 1.28 | $ | (17.13) | $ | 2.37 | |||||||
Discontinued operations | 0.57 | 0.39 | 1.35 | 0.94 | |||||||||||
Net income per share | $ | (1.57) | $ | 1.67 | $ | (15.78) | $ | 3.31 | |||||||
Weighted average shares outstanding (in millions) | 650 | 656 | 649 | 663 | |||||||||||
Diluted: | |||||||||||||||
Continuing operations | $ | (2.14) | $ | 1.27 | $ | (17.13) | $ | 2.35 | |||||||
Discontinued operations | 0.57 | 0.39 | 1.35 | 0.93 | |||||||||||
Net income per share | $ | (1.57) | $ | 1.66 | $ | (15.78) | $ | 3.28 | |||||||
Weighted average shares outstanding (in millions) | 650 | 660 | 649 | 668 | |||||||||||
(a) | In accordance with discontinued operations accounting, Speedway sales to retail customers and net results are reflected in income from discontinued operations, net of tax and Refining & Marketing intercompany sales to Speedway are presented as third-party sales. |
(b) | The 2020 YTD period includes $1,315 million of impairment expense. |
Income Summary for Continuing Operations (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Income (loss) from continuing operations by segment | |||||||||||||||
Refining & Marketing(a) | $ | (1,569) | $ | 989 | $ | (3,610) | $ | 1,750 | |||||||
Midstream | 960 | 919 | 2,734 | 2,705 | |||||||||||
Corporate(b) | (197) | (206) | (625) | (589) | |||||||||||
Income (loss) from continuing operations before items not allocated to segments | (806) | 1,702 | (1,501) | 3,866 | |||||||||||
Items not allocated to segments: | |||||||||||||||
Equity method investment restructuring gains(c) | — | — | — | 207 | |||||||||||
Transaction-related costs(d) | — | (22) | (8) | (147) | |||||||||||
Litigation | — | — | — | (22) | |||||||||||
Impairments(e) | (433) | — | (9,595) | — | |||||||||||
Restructuring expenses(f) | (348) | — | (348) | — | |||||||||||
LCM inventory valuation adjustment | 530 | — | (1,185) | — | |||||||||||
Income (loss) from continuing operations | (1,057) | 1,680 | (12,637) | 3,904 | |||||||||||
Net interest and other financial costs | 359 | 312 | 1,032 | 932 | |||||||||||
Income (loss) from continuing operations before income taxes | (1,416) | 1,368 | (13,669) | 2,972 | |||||||||||
Provision (benefit) for income taxes on continuing operations | (304) | 255 | (2,105) | 600 | |||||||||||
Income (loss) from continuing operations, net of tax | $ | (1,112) | $ | 1,113 | $ | (11,564) | $ | 2,372 | |||||||
(a) | Recast to reflect direct dealer income from operations of $103 million, $106 million, $303 million and $295 million for the third quarter 2020, third quarter 2019, first nine months of 2020 and first nine months of 2019, respectively. Includes a LIFO liquidation charge of $256 million in the third quarter of 2020. |
(b) | Recast to reflect corporate costs of $7 million, $8 million, $20 million and $21 million for the third quarter 2020, third quarter 2019, first nine months of 2020 and first nine months of 2019, respectively, that are no longer allocated to Speedway under discontinued operations accounting. |
(c) | Represents gain related to the formation of a new joint venture: Capline LLC in the 2019 YTD period. |
(d) | 2020 includes costs incurred in connection with the Midstream strategic review. 2019 includes employee severance, retention and other costs related to the acquisition of Andeavor. |
(e) | Includes $7.4 billion goodwill impairment, $1.3 billion impairment of equity method investments and $886 million impairment of long-lived assets in 2020 YTD period. |
(f) | Restructuring expenses include $189 million of exit and disposal costs related to indefinite idling of the Martinez and Gallup refineries and $159 million of employee separation costs. |
Income Summary for Discontinued Operations (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Income from discontinued operations | |||||||||||||||
Speedway | $ | 456 | $ | 344 | $ | 1,282 | $ | 831 | |||||||
Transaction-related costs(a) | (18) | — | (75) | — | |||||||||||
LCM inventory valuation adjustment | — | — | (25) | — | |||||||||||
Income from discontinued operations | 438 | 344 | 1,182 | 831 | |||||||||||
Net interest and other financial costs | 5 | 5 | 15 | 13 | |||||||||||
Income from discontinued operations before income taxes | 433 | 339 | 1,167 | 818 | |||||||||||
Provision for income taxes on discontinued operations | 62 | 85 | 286 | 197 | |||||||||||
Income from discontinued operations, net of tax | $ | 371 | $ | 254 | $ | 881 | $ | 621 | |||||||
(a) | Costs related to the Speedway separation. |
Capital Expenditures and Investments (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Refining & Marketing(a) | $ | 254 | $ | 569 | $ | 995 | $ | 1,411 | |||||||
Midstream | 300 | 783 | 1,199 | 2,420 | |||||||||||
Corporate(b) | 45 | 62 | 146 | 141 | |||||||||||
Speedway | 69 | 169 | 200 | 344 | |||||||||||
Total | $ | 668 | $ | 1,583 | $ | 2,540 | $ | 4,316 | |||||||
(a) | Recast to reflect direct dealer capital expenditures of $6 million, $8 million, $25 million and $26 million for the third quarter 2020, third quarter 2019, first nine months of 2020 and first nine months of 2019, respectively. |
(b) | Includes capitalized interest of $29 million, $32 million, $85 million and $97 million for the third quarter 2020, third quarter 2019, first nine months of 2020 and first nine months of 2019, respectively. |
Refining & Marketing Operating Statistics (Unaudited)
The retained direct dealer business is now reported within the Refining & Marketing segment. The historical results have been recast.
Three Months Ended | Nine Months Ended | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Dollar per barrel of net refinery throughput: | |||||||||||||||
Refining & Marketing margin, excluding LIFO liquidation charge(a)(b) | $ | 8.28 | $ | 15.11 | $ | 9.46 | $ | 14.17 | |||||||
LIFO liquidation charge | (1.10) | — | (0.36) | — | |||||||||||
Refining & Marketing margin(a)(b) | 7.18 | 15.11 | 9.10 | 14.17 | |||||||||||
Less: | |||||||||||||||
Refining operating costs | 5.41 | 5.44 | 5.85 | 5.45 | |||||||||||
Distribution costs(a)(d) | 5.61 | 4.32 | 5.35 | 4.49 | |||||||||||
Refining planned turnaround costs | 1.01 | 0.56 | 1.02 | 0.69 | |||||||||||
Depreciation and amortization(a) | 1.96 | 1.55 | 1.95 | 1.56 | |||||||||||
Plus (Less): | |||||||||||||||
Purchase accounting - depreciation and amortization(a) | — | 0.12 | — | 0.01 | |||||||||||
Other(a)(e) | 0.08 | 0.05 | 0.01 | 0.06 | |||||||||||
Refining & Marketing income (loss) from operations(a) | $ | (6.73) | $ | 3.41 | $ | (5.06) | $ | 2.05 | |||||||
Refining & Marketing refined product sales volume (mbpd)(f) | 3,201 | 3,706 | 3,222 | 3,730 | |||||||||||
Crude oil refining capacity (mbpcd)(g) | 2,860 | 3,021 | 2,997 | 3,021 | |||||||||||
Crude oil capacity utilization (percent)(g) | 84 | 98 | 82 | 97 | |||||||||||
Refinery throughputs (mbpd):(h) | |||||||||||||||
Crude oil refined | 2,390 | 2,969 | 2,446 | 2,925 | |||||||||||
Other charge and blendstocks | 146 | 187 | 155 | 200 | |||||||||||
Net refinery throughput | 2,536 | 3,156 | 2,601 | 3,125 | |||||||||||
Sour crude oil throughput (percent) | 49 | 47 | 50 | 49 | |||||||||||
Sweet crude oil throughput (percent) | 51 | 53 | 50 | 51 | |||||||||||
Refined product yields (mbpd):(h) | |||||||||||||||
Gasoline | 1,311 | 1,553 | 1,305 | 1,538 | |||||||||||
Distillates | 872 | 1,103 | 908 | 1,091 | |||||||||||
Propane | 50 | 56 | 51 | 55 | |||||||||||
Feedstocks and special products | 230 | 334 | 266 | 345 | |||||||||||
Heavy fuel oil | 21 | 44 | 28 | 47 | |||||||||||
Asphalt | 92 | 106 | 83 | 90 | |||||||||||
Total | 2,576 | 3,196 | 2,641 | 3,166 | |||||||||||
(a) | Recast to reflect direct dealer results in the Refining & Marketing segment. |
(b) | Sales revenue less cost of refinery inputs and purchased products, divided by net refinery throughput. |
(c) | Excludes refining planned turnaround and depreciation and amortization expense. |
(d) | Includes fees paid to MPLX, on a per barrel throughput basis, of $3.81, $2.74, $3.63 and $2.79, for the third quarter 2020, third quarter 2019, first nine months of 2020 and first nine months of 2019, respectively. Excludes depreciation and amortization expense. |
(e) | Includes income (loss) from equity method investments, net gain (loss) on disposal of assets and other income. |
(f) | Includes intersegment sales. |
(g) | Based on calendar day capacity, which is an annual average that includes downtime for planned maintenance and other normal operating activities. Third-quarter and the first nine months of 2020 crude oil refining capacity excludes idled Martinez, Gallup and Dickinson facilities for the third quarter of 2020. |
(h) | Excludes inter-refinery volumes of 55 mbpd,116 mbpd, 68 mbpd and 98 mbpd for the third quarter 2020, third quarter 2019, first nine months of 2020 and first nine months of 2019, respectively. |
Refining & Marketing Operating Statistics by Region (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Gulf Coast | |||||||||||||||
Dollar per barrel of refinery throughput:(a) | |||||||||||||||
Refining & Marketing margin(b) | $ | 6.59 | $ | 11.26 | $ | 6.96 | $ | 9.46 | |||||||
Refining operating costs(c) | 3.83 | 4.23 | 4.36 | 4.05 | |||||||||||
Refining planned turnaround costs | 0.35 | 0.15 | 0.90 | 0.18 | |||||||||||
Refining depreciation and amortization | 1.49 | 1.08 | 1.45 | 1.08 | |||||||||||
Refinery throughputs (mbpd):(d) | |||||||||||||||
Crude oil refined | 962 | 1,115 | 984 | 1,146 | |||||||||||
Other charge and blendstocks | 122 | 203 | 134 | 183 | |||||||||||
Gross refinery throughput | 1,084 | 1,318 | 1,118 | 1,329 | |||||||||||
Sour crude oil throughput (percent) | 65 | 62 | 65 | 61 | |||||||||||
Sweet crude oil throughput (percent) | 35 | 38 | 35 | 39 | |||||||||||
Refined product yields (mbpd):(d) | |||||||||||||||
Gasoline | 502 | 559 | 485 | 565 | |||||||||||
Distillates | 388 | 429 | 383 | 438 | |||||||||||
Propane | 25 | 27 | 26 | 27 | |||||||||||
Feedstocks and special products | 182 | 297 | 228 | 295 | |||||||||||
Heavy fuel oil | 4 | 14 | 8 | 15 | |||||||||||
Asphalt | 16 | 20 | 18 | 21 | |||||||||||
Total | 1,117 | 1,346 | 1,148 | 1,361 | |||||||||||
Mid-Continent | |||||||||||||||
Dollar per barrel of refinery throughput:(a) | |||||||||||||||
Refining & Marketing margin(b) | $ | 9.18 | $ | 17.42 | $ | 10.66 | $ | 17.69 | |||||||
Refining operating costs(c) | 4.79 | 4.88 | 5.24 | 5.08 | |||||||||||
Refining planned turnaround costs | 0.68 | 1.26 | 0.87 | 0.75 | |||||||||||
Refining depreciation and amortization | 1.65 | 1.43 | 1.77 | 1.54 | |||||||||||
Refinery throughputs (mbpd):(e) | |||||||||||||||
Crude oil refined | 1,024 | 1,197 | 1,007 | 1,137 | |||||||||||
Other charge and blendstocks | 42 | 48 | 45 | 51 | |||||||||||
Gross refinery throughput | 1,066 | 1,245 | 1,052 | 1,188 | |||||||||||
Sour crude oil throughput (percent) | 26 | 27 | 26 | 27 | |||||||||||
Sweet crude oil throughput (percent) | 74 | 73 | 74 | 73 | |||||||||||
Refined product yields (mbpd):(e) | |||||||||||||||
Gasoline | 559 | 628 | 546 | 618 | |||||||||||
Distillates | 343 | 415 | 358 | 405 | |||||||||||
Propane | 19 | 19 | 18 | 19 | |||||||||||
Feedstocks and special products | 66 | 86 | 59 | 65 | |||||||||||
Heavy fuel oil | 9 | 14 | 12 | 15 | |||||||||||
Asphalt | 75 | 84 | 64 | 68 | |||||||||||
Total | 1,071 | 1,246 | 1,057 | 1,190 | |||||||||||
West Coast | |||||||||||||||
Dollar per barrel of refinery throughput:(a) | |||||||||||||||
Refining & Marketing margin(b)(g) | $ | 10.15 | $ | 17.93 | $ | 12.42 | $ | 16.96 | |||||||
Refining operating costs(c) | 10.15 | 7.74 | 9.66 | 7.98 | |||||||||||
Refining planned turnaround costs | 3.28 | 0.02 | 1.47 | 1.45 | |||||||||||
Refining depreciation and amortization | 1.69 | 1.08 | 1.54 | 1.06 | |||||||||||
Refinery throughputs (mbpd):(f) | |||||||||||||||
Crude oil refined | 404 | 657 | 455 | 642 | |||||||||||
Other charge and blendstocks | 37 | 52 | 44 | 64 | |||||||||||
Gross refinery throughput | 441 | 709 | 499 | 706 | |||||||||||
Sour crude oil throughput (percent) | 70 | 59 | 70 | 63 | |||||||||||
Sweet crude oil throughput (percent) | 30 | 41 | 30 | 37 | |||||||||||
Refined product yields (mbpd):(f) | |||||||||||||||
Gasoline | 250 | 366 | 274 | 355 | |||||||||||
Distillates | 141 | 259 | 167 | 248 | |||||||||||
Propane | 6 | 10 | 7 | 9 | |||||||||||
Feedstocks and special products | 30 | 60 | 37 | 76 | |||||||||||
Heavy fuel oil | 15 | 23 | 18 | 24 | |||||||||||
Asphalt | 1 | 2 | 1 | 1 | |||||||||||
Total | 443 | 720 | 504 | 713 | |||||||||||
(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. Excludes LIFO liquidation charge of $256 million in the 2020 periods. |
(c) | Excludes refining planned turnaround and depreciation and amortization expense. |
(d) | Includes inter-refinery transfer volumes of 34 mbpd, 79 mbpd, 44 mbpd and 54 mbpd for the third quarter 2020, third quarter 2019, first nine months of 2020 and first nine months of 2019, respectively. |
(e) | Includes inter-refinery transfer volumes of 8 mbpd, 11 mbpd, 9 mbpd and 11 mbpd for the third quarter 2020, third quarter 2019, first nine months of 2020 and first nine months of 2019, respectively. |
(f) | Includes inter-refinery transfer volumes of 13 mbpd, 26 mbpd, 15 mbpd and 33 mbpd for the third quarter 2020, third quarter 2019, first nine months of 2020 and first nine months of 2019, respectively. |
(g) | Recast to reflect direct dealer results in the Refining & Marketing segment. |
Midstream Operating Statistics (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Pipeline throughputs (mbpd)(a) | 4,783 | 5,319 | 4,794 | 5,250 | |||||||||||
Terminal throughput (mbpd) | 2,701 | 3,292 | 2,696 | 3,267 | |||||||||||
Gathering system throughput (million cubic feet per day)(b) | 5,396 | 6,281 | 5,546 | 6,061 | |||||||||||
Natural gas processed (million cubic feet per day)(b) | 8,512 | 8,804 | 8,592 | 8,629 | |||||||||||
C2 (ethane) + NGLs fractionated (mbpd)(b) | 567 | 547 | 555 | 527 | |||||||||||
(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. |
Speedway Operating Statistics (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Speedway fuel sales (millions of gallons) | 1,583 | 1,992 | 4,416 | 5,820 | |||||||||||
Speedway fuel margin (dollars per gallon)(a) | $ | 0.3025 | $ | 0.2604 | $ | 0.3640 | $ | 0.2379 | |||||||
Merchandise sales (in millions) | $ | 1,733 | $ | 1,703 | $ | 4,797 | $ | 4,736 | |||||||
Merchandise margin (in millions) | $ | 510 | $ | 498 | $ | 1,376 | $ | 1,376 | |||||||
Merchandise margin percent | 29.4 | % | 29.2 | % | 28.7 | % | 29.1 | % | |||||||
Same store gasoline sales volume (period over period)(b) | (16.6) | % | (2.8) | % | (20.6) | % | (2.8) | % | |||||||
Same store merchandise sales (period over period)(b)(c) | 0.8 | % | 5.2 | % | (0.9) | % | 5.6 | % | |||||||
Total convenience stores at period-end | 3,854 | 3,931 | |||||||||||||
(a) | Includes bankcard processing fees (as applicable). |
(b) | Same store comparison includes only locations owned at least 13 months. |
(c) | Excludes cigarettes. |
Select Financial Data (Unaudited) | |||||||
(In millions) | September 30 | June 30 | |||||
Cash and cash equivalents(a) | $ | 716 | $ | 1,091 | |||
MPC debt(b) | 11,648 | 11,607 | |||||
MPLX debt | 20,349 | 20,559 | |||||
Total consolidated debt(b) | 31,997 | 32,166 | |||||
Redeemable noncontrolling interest | 968 | 968 | |||||
Equity | 29,414 | 30,849 | |||||
Shares outstanding | 651 | 650 | |||||
(a) | Includes Speedway's cash and cash equivalents of $98 million and $126 million, respectively, which is classified as assets held for sale on MPC's consolidated balance sheets. |
(b) | Includes Speedway's debt of $120 million and $112 million, respectively, which is classified as liabilities held for sale on MPC's consolidated balance sheets. |
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. For the three and nine months ended Sept. 30, 2020, we applied a combined federal and state statutory tax rate of 24% to the adjusted pre-tax loss for those periods. 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 | Nine Months Ended | ||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Net income (loss) attributable to MPC | $ | (1,018) | $ | 1,095 | $ | (10,243) | $ | 2,194 | |||||||
Pre-tax adjustments: | |||||||||||||||
Equity method investment restructuring gains | — | — | — | (207) | |||||||||||
Transaction-related costs | 18 | 22 | 83 | 147 | |||||||||||
Litigation | — | — | — | 22 | |||||||||||
Impairments | 433 | — | 9,595 | — | |||||||||||
Restructuring expenses | 348 | — | 348 | — | |||||||||||
LIFO liquidation charge | 256 | — | 256 | — | |||||||||||
LCM inventory valuation adjustment | (530) | — | 1,210 | — | |||||||||||
Purchase accounting - depreciation and amortization | — | (57) | — | (17) | |||||||||||
Out of period tax adjustment | — | — | — | 36 | |||||||||||
Tax impact of adjustments(a) | (132) | 7 | (1,577) | 13 | |||||||||||
Non-controlling interest impact of adjustments | (24) | 6 | (1,295) | 2 | |||||||||||
Adjusted net income (loss) attributable to MPC | $ | (649) | $ | 1,073 | $ | (1,623) | $ | 2,190 | |||||||
Diluted income (loss) per share | $ | (1.57) | $ | 1.66 | $ | (15.78) | $ | 3.28 | |||||||
Adjusted diluted income (loss) per share(b) | $ | (1.00) | $ | 1.63 | $ | (2.50) | $ | 3.27 | |||||||
(a) | For the three and nine months ended Sept. 30, 2020, income taxes for adjusted earnings was calculated by applying a combined federal and state statutory tax rate of 24% to the adjusted pre-tax loss for these periods. The corresponding adjustments to reported income taxes is shown in the table above. |
(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. |
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 from Continuing Operations | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Net income (loss) attributable to MPC | $ | (1,018) | $ | 1,095 | $ | (10,243) | $ | 2,194 | |||||||
Plus (Less): | |||||||||||||||
Income from discontinued operations, net of tax | (371) | (254) | (881) | (621) | |||||||||||
Net interest and other financial costs | 359 | 312 | 1,032 | 932 | |||||||||||
Net income (loss) attributable to noncontrolling interests | 277 | 272 | (440) | 799 | |||||||||||
Provision (benefit) for income taxes | (304) | 255 | (2,105) | 600 | |||||||||||
Depreciation and amortization | 830 | 761 | 2,526 | 2,375 | |||||||||||
Refining planned turnaround costs | 234 | 164 | 725 | 587 | |||||||||||
Equity method investment restructuring gains | — | — | — | (207) | |||||||||||
Transaction-related costs | — | 22 | 8 | 147 | |||||||||||
Litigation | — | — | — | 22 | |||||||||||
Impairments | 433 | — | 9,595 | — | |||||||||||
Restructuring expenses | 348 | — | 348 | — | |||||||||||
LIFO liquidation charge | 256 | — | 256 | — | |||||||||||
LCM inventory valuation adjustment | (530) | — | 1,185 | — | |||||||||||
Adjusted EBITDA from continuing operations | $ | 514 | $ | 2,627 | $ | 2,006 | $ | 6,828 | |||||||
Reconciliation of Income from Discontinued Operations, Net of Tax to EBITDA from Discontinued Operations (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Income from discontinued operations, net of tax | $ | 371 | $ | 254 | $ | 881 | $ | 621 | |||||||
Plus: | |||||||||||||||
Net interest and other financial costs | 5 | 5 | 15 | 13 | |||||||||||
Provision for income taxes | 62 | 85 | 286 | 197 | |||||||||||
Depreciation and amortization(a) | 36 | 94 | 237 | 285 | |||||||||||
Transaction-related costs | 18 | — | 75 | — | |||||||||||
LCM inventory valuation adjustment | — | — | 25 | — | |||||||||||
Adjusted EBITDA from discontinued operations | $ | 492 | $ | 438 | $ | 1,519 | $ | 1,116 | |||||||
(a) | As of August 2, 2020, Speedway ceased recording depreciation and amortization. |
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
Effective in the third quarter of 2020, Refining & Marketing historical results have been recast and now include the results of the retained direct dealer business.
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Refining & Marketing income (loss) from operations(a) | $ | (1,569) | $ | 989 | $ | (3,610) | $ | 1,750 | |||||||
Plus (Less): | |||||||||||||||
Selling, general and administrative expenses | 518 | 536 | 1,576 | 1,662 | |||||||||||
LCM inventory valuation adjustment | 530 | — | (1,185) | — | |||||||||||
(Income) loss from equity method investments | (16) | (6) | 6 | (10) | |||||||||||
Net (gain) loss on disposal of assets | (1) | — | — | (8) | |||||||||||
Other income | (1) | (8) | (9) | (30) | |||||||||||
Refining & Marketing gross margin | (539) | 1,511 | (3,222) | 3,364 | |||||||||||
Plus (Less): | |||||||||||||||
Operating expenses (excluding depreciation and amortization) | 2,408 | 2,643 | 7,481 | 7,881 | |||||||||||
LCM inventory valuation adjustment | (530) | — | 1,185 | — | |||||||||||
Depreciation and amortization | 456 | 416 | 1,392 | 1,319 | |||||||||||
Gross margin excluded from Refining & Marketing margin(b) | (101) | (179) | (285) | (464) | |||||||||||
Other taxes included in Refining & Marketing margin | (19) | (3) | (62) | (8) | |||||||||||
Refining & Marketing margin(a) | 1,675 | 4,388 | 6,489 | 12,092 | |||||||||||
LIFO liquidation charge | 256 | — | 256 | — | |||||||||||
Refining & Marketing margin, excluding LIFO liquidation charge | $ | 1,931 | $ | 4,388 | $ | 6,745 | $ | 12,092 | |||||||
Refining & Marketing margin by region: | |||||||||||||||
Gulf Coast | $ | 637 | $ | 1,285 | $ | 2,051 | $ | 3,292 | |||||||
Mid-Continent | 894 | 1,977 | 3,048 | 5,687 | |||||||||||
West Coast | 400 | 1,126 | 1,646 | 3,113 | |||||||||||
Refining & Marketing margin, excluding LIFO liquidation charge | $ | 1,931 | $ | 4,388 | $ | 6,745 | $ | 12,092 | |||||||
(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 other related operations included in the Refining & Marketing segment such as biodiesel facilities, ethanol ventures, cogeneration power facilities and processing of credit card transactions on behalf of certain of our marketing customers. |
Speedway Fuel Margin
Speedway fuel margin is defined as the price paid by consumers less the cost of refined products, including transportation, consumer excise taxes and bankcard processing fees (where applicable).
Speedway Merchandise Margin
Speedway merchandise margin is defined as the price paid by consumers less the cost of merchandise.
Reconciliation of Income from Discontinued Operations to Speedway Gross Margin and Speedway Margin | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Income from discontinued operations(a) | $ | 438 | $ | 344 | $ | 1,182 | $ | 831 | |||||||
Plus (Less): | |||||||||||||||
Operating, selling, general and administrative expenses | 584 | 618 | 1,779 | 1,754 | |||||||||||
Income from equity method investments | (21) | (20) | (70) | (58) | |||||||||||
Net gain on disposal of assets | 1 | (2) | — | (2) | |||||||||||
Other income | (34) | (3) | (127) | (9) | |||||||||||
Speedway gross margin | 968 | 937 | 2,764 | 2,516 | |||||||||||
Plus (Less): | |||||||||||||||
LCM inventory valuation adjustment | — | — | 25 | — | |||||||||||
Depreciation and amortization | 36 | 94 | 237 | 285 | |||||||||||
Speedway margin(a) | $ | 1,004 | $ | 1,031 | $ | 3,026 | $ | 2,801 | |||||||
Speedway margin: | |||||||||||||||
Fuel margin | $ | 478 | $ | 519 | $ | 1,607 | $ | 1,385 | |||||||
Merchandise margin | 510 | 498 | 1,376 | 1,376 | |||||||||||
Other margin | 16 | 14 | 43 | 40 | |||||||||||
Speedway margin | $ | 1,004 | $ | 1,031 | $ | 3,026 | $ | 2,801 | |||||||
(a) | LCM inventory valuation adjustments are excluded from income from discontinued operations and Speedway margin. |
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-reports-third-quarter-2020-results-301164653.html
SOURCE Marathon Petroleum Corporation
Article Date
11/2/2020Marathon Petroleum Corp. Announces Quarterly Dividend
Source: PR Newswire
FINDLAY, Ohio, Oct. 28, 2020 /PRNewswire/ -- The board of directors of Marathon Petroleum Corp. (NYSE: MPC) has declared a dividend of $0.58 per share on common stock. The dividend is payable Dec. 10, 2020, to shareholders of record as of the close of business Nov. 18, 2020.
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
Brian Worthington, Manager, Investor Relations
Media Contact:
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-announces-quarterly-dividend-301162110.html
SOURCE Marathon Petroleum Corporation
Article Date
10/28/2020Marathon Petroleum Corp. to Announce 2020 Third-Quarter Financial Results Nov. 2
Source: PR Newswire
FINDLAY, Ohio, Sept. 25, 2020 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) will host a conference call with analysts on Monday, Nov. 2, 2020, at 9:30 a.m. EST to discuss 2020 third-quarter financial results, which will be released earlier that day, and to provide an update on company operations.
Interested parties may listen to the conference call by visiting MPC's website at http://www.marathonpetroleum.com and clicking on "Events and Presentations" under the "Investors" tab. A replay of the conference call will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, also will be available online.
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 Contact: (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, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-to-announce-2020-third-quarter-financial-results-nov-2-301138323.html
SOURCE Marathon Petroleum Corporation
Article Date
9/25/2020MPLX LP to Announce 2020 Third-Quarter Financial Results Nov. 2
Source: PR Newswire
FINDLAY, Ohio, Sept. 25, 2020 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will host a conference call with analysts on Monday, Nov. 2, 2020, at 11 a.m. EST to discuss 2020 third-quarter financial results, which will be released earlier that day, and to provide an update on company operations.
Interested parties may listen to the conference call by visiting MPLX's website at http://www.mplx.com and clicking on the "2020 Third-Quarter Financial Results" link. A replay of the conference call will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, also will be available online.
About MPLX LP
MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.MPLX.com.
Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Evan Barbosa, Manager, Investor Relations
Jim Mallamaci, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/mplx-lp-to-announce-2020-third-quarter-financial-results-nov-2-301138328.html
SOURCE MPLX LP
Article Date
9/25/2020Marathon Petroleum Corp. and MPLX LP announce redemption of outstanding senior notes
Source: PR Newswire
FINDLAY, Ohio, Sept. 25, 2020 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC) and MPLX LP (NYSE: MPLX) today announced the redemption of (i) all of the $650 million outstanding aggregate principal amount of MPC's 3.400% senior notes due Dec. 15, 2020, and (ii) all of the $300 million outstanding aggregate principal amount of MPLX's 6.250% senior notes due Oct. 15, 2022, including the approximately $34 million in aggregate principal amount of senior notes issued by Andeavor Logistics LP and Tesoro Logistics Finance Corp.
The MPC 2020 senior notes will be redeemed on Nov. 15, 2020, at a price equal to par, plus accrued and unpaid interest to, but not including, such date. The MPLX 2022 senior notes will be redeemed on Oct. 15, 2020, at par. The regular semiannual interest payment due on the MPLX 2022 senior notes on Oct. 15, 2020, will be paid in the usual manner to holders of record at the close of business on Oct. 1, 2020. MPLX had previously announced that it intended to redeem the MPLX 2022 senior notes with the proceeds of a recently completed senior notes offering.
This news release is for informational purposes only and is neither an offer to buy nor a solicitation to sell any of the MPC 2020 senior notes or the MPLX 2022 senior notes. The foregoing does not constitute a notice of redemption under the indentures governing either the MPC 2020 senior notes or the MPLX 2022 senior notes, respectively, and is qualified in its entirety by the redemption notices distributed to the holders of the MPC 2020 senior notes and MPLX 2022 senior notes under such indentures.
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.
About MPLX LP
MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.MPLX.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, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-and-mplx-lp-announce-redemption-of-outstanding-senior-notes-301138185.html
SOURCE Marathon Petroleum Corporation; MPLX LP
Article Date
9/25/20209/1/2020 - Marathon Petroleum Corp. announces redemption of outstanding 5.375% senior notes due 2022
Marathon Petroleum Corp. announces redemption of outstanding 5.375% senior notes due 2022
Source: PR Newswire
FINDLAY, Ohio, Sept. 1, 2020 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) today announced that it has issued notices of redemption to redeem all of the $475 million outstanding aggregate principal amount of its 5.375% senior notes due Oct. 1, 2022, including the portion of such notes for which Andeavor LLC, a wholly-owned subsidiary of MPC, is the obligor. The 2022 senior notes are expected to be redeemed on Oct. 1, 2020, at a price equal to par. The regular semi-annual interest payment due on the 2022 senior notes on Oct. 1, 2020, will be paid in the usual manner to holders of record at the close of business on Sept. 15, 2020.
This news release is for informational purposes only and is neither an offer to buy nor a solicitation to sell any of the 2022 senior notes. The foregoing does not constitute a notice of redemption under the indentures governing the 2022 senior notes and is qualified in its entirety by the redemption notices issued by MPC and Andeavor LLC.
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 Contact: (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, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-announces-redemption-of-outstanding-5-375-senior-notes-due-2022--301122413.html
SOURCE Marathon Petroleum Corporation
Article Date
9/1/2020Marathon Petroleum Corp. Reports Second-Quarter 2020 Results
Source: PR Newswire
FINDLAY, Ohio, Aug. 3, 2020 /PRNewswire/ --
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 | |||||||
(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 | |||||||
Three Months Ended | |||||||
(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 | Six Months Ended | ||||||||||||||
(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 | Six Months Ended | ||||||||||||||
(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 | (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 | Six Months Ended | ||||||||||||||
(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 | Six Months Ended | ||||||||||||||
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 | Six Months Ended | ||||||||||||||
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 | Six Months Ended | ||||||||||||||
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 | Six Months Ended | ||||||||||||||
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 | March 31 | |||||
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 | Six Months Ended | ||||||||||||||
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) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(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 | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(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 | Six Months Ended | ||||||||||||||
(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 | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(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 | Six Months Ended | ||||||||||||||
(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
Article Date
8/3/20207-Eleven, Inc. Transforms its U.S. Store Network Through Acquisition of Speedway
Source: PR Newswire
IRVING, Texas, Aug. 2, 2020 /PRNewswire/ -- 7-Eleven, Inc. ("7-Eleven"), the premier name and largest chain in the convenience-retailing industry, is pleased to announce it has entered into an agreement to acquire Speedway, a leading convenience store chain, from Marathon Petroleum Corp. (NYSE: MPC). As part of the agreement, 7-Eleven will acquire approximately 3,900 Speedway stores located in 35 states, for $21 billion in cash.
"This acquisition is the largest in our company's history and will allow us to continue to grow and diversify our presence in the U.S., particularly in the Midwest and East Coast," said Joe DePinto, President and Chief Executive Officer of 7-Eleven. "By adding these quality locations to our portfolio, 7-Eleven will have the opportunity to bring convenience to more customers than ever before."
Strategic and Financial Rationale
Closing and Advisors
The transaction is subject to customary regulatory approvals and closing conditions and is expected to be completed in the first quarter of 2021.
Nomura Securities International, Inc. and Credit Suisse are acting as 7-Eleven's financial advisors. Both Nomura and Credit Suisse provided 7-Eleven's Board of Directors with a fairness opinion.
Affiliates of Credit Suisse and Sumitomo Mitsui Banking Corporation (SMBC) provided committed financing for the acquisition. SMBC and SMBC Nikko also provided financial advisory services to Seven & i Holdings Co., Ltd. in regards to the financing consideration.
Akin Gump Strauss Hauer & Feld LLP and Nishimura & Asahi are providing legal counsel.
About 7-Eleven, Inc.
7–Eleven, Inc. is the premier name and largest chain in the convenience-retailing industry. Based in Irving, Texas, 7–Eleven operates, franchises and/or licenses more than 71,100 stores in 17 countries, including approximately 11,800 in North America. Known for its iconic brands such as Slurpee®, Big Bite® and Big Gulp®, 7–Eleven has expanded into high-quality sandwiches, salads, side dishes, cut fruit and protein boxes, as well as pizza, chicken wings and mini beef tacos. 7–Eleven offers customers industry-leading private brand products under the 7-Select™ brand including healthy options, decadent treats and everyday favorites, at an outstanding value. Customers can earn and redeem points on various items in stores nationwide through its 7Rewards® loyalty program, place an order in the 7NOW® delivery app in 28 participating markets, or rely on 7-Eleven for bill payment service, self-service lockers and other convenient services. Find out more online at www.7-Eleven.com, via the 7Rewards customer loyalty platform on the 7-Eleven mobile app, or on social media at Facebook, Twitter and Instagram.
View original content to download multimedia:http://www.prnewswire.com/news-releases/7-eleven-inc-transforms-its-us-store-network-through-acquisition-of-speedway-301104406.html
SOURCE 7-Eleven, Inc.
Article Date
8/2/2020Marathon Petroleum Corp. Announces Agreement for $21 Billion Sale of Speedway
Source: PR Newswire
FINDLAY, Ohio, Aug. 2, 2020 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) today announced that it and certain of its subsidiaries have entered into a definitive agreement with 7-Eleven, Inc., a wholly owned, indirect subsidiary of Seven & i Holdings Co., Ltd. (3382: Tokyo), whereby 7-Eleven will acquire Speedway for $21 billion in cash. The transaction is expected to close in the first quarter of 2021, subject to customary closing conditions and regulatory approvals.
"This transaction marks a milestone on the strategic priorities we outlined earlier this year," said Michael J. Hennigan, president and chief executive officer. "Our announcement crystalizes the significant value of the Speedway business, creates certainty around value realization and delivers on our commitment to unlock the value of our assets. At the same time, the establishment of a long-term strategic relationship with 7-Eleven creates opportunities to improve our commercial performance."
Strategic Rationale:
Approvals and Timing
The transaction has been unanimously approved by the boards of directors of both companies. The transaction is expected to close in the first quarter of 2021 and is subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Conference Call and Earnings Report
At 9:30 a.m. ET tomorrow, MPC will hold a conference call and webcast to discuss 2020 second-quarter financial 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.
Advisors
Barclays acted as exclusive financial advisor and Wachtell, Lipton, Rosen & Katz acted as legal advisor to MPC. J.P. Morgan acted as independent financial advisor to the Speedway transaction committee of MPC's Board of Directors.
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 Contact: (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, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
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: 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 ongoing supply relationship and realize the other expected benefits; 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; the effects of any 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.
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-announces-agreement-for-21-billion-sale-of-speedway-301104405.html
SOURCE Marathon Petroleum Corporation
Article Date
8/2/2020Marathon Petroleum Corp. Announces Quarterly Dividend
Source: PR Newswire
FINDLAY, Ohio, July 29, 2020 /PRNewswire/ -- The board of directors of Marathon Petroleum Corp. (NYSE: MPC) has declared a dividend of $0.58 per share on common stock. The dividend is payable Sept. 10, 2020, to shareholders of record as of the close of business Aug. 19, 2020.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests 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, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-announces-quarterly-dividend-301102492.html
SOURCE Marathon Petroleum Corporation
Article Date
7/29/20206/25/2020 - Marathon Petroleum Corp. Names Ehren D. Powell as Senior Vice President, Chief Digital Officer
Marathon Petroleum Corp. Names Ehren D. Powell as Senior Vice President, Chief Digital Officer
Source: PR Newswire
FINDLAY, Ohio, June 25, 2020 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) today announced Ehren D. Powell will join the company as Senior Vice President, Chief Digital Officer, effective July 20. Powell, who will lead technology strategy across the company's businesses and manage its digital and information technology assets, will report to MPC President and Chief Executive Officer Michael J. Hennigan. He will be based in San Antonio, Texas.
"Ehren's experience building digital capabilities that improve operational performance, enhance the value of commercial systems, and drive cost productivity and process efficiencies will help enable critical steps for continuing to unlock our company's potential," said President and Chief Executive Officer Mike Hennigan. "Ehren is a strong addition to our executive team, and his deep understanding of the digital and IT landscapes will allow us to make significant business improvements."
Powell joins MPC from GE Healthcare, where he has served as Corporate Officer and Chief Information Officer since 2018. Prior to that, he served as SVP and CIO, Services for General Electric from 2017 to 2018 and SVP and CIO, Power Services for GE Power from 2014 to 2017. During his 20-year career with GE and its subsidiary companies, Powell has held several executive IT leadership roles with increasing responsibility, including positions with GE Power, GE Transportation and GE Hitachi Nuclear Energy. He began his career in IT and information management roles supporting multiple operations for GE Aviation.
Powell holds a bachelor of business administration degree in management and information systems from the University of Cincinnati.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 which 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, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-names-ehren-d-powell-as-senior-vice-president-chief-digital-officer-301083636.html
SOURCE Marathon Petroleum Corporation
Article Date
6/25/2020Marathon Petroleum Corp. to Announce 2020 Second-Quarter Financial Results Aug. 3
Source: PR Newswire
FINDLAY, Ohio, June 12, 2020 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) will host a conference call with analysts on Monday, Aug. 3, 2020, at 9:30 a.m. EDT to discuss 2020 second-quarter financial results, which will be released earlier that day, and to provide an update on company operations.
Interested parties may listen to the conference call by visiting MPC's website at http://www.marathonpetroleum.com and clicking on "Events and Presentations" under the "Investors" tab. A replay of the conference call will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, also will be available online.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 which 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 Contact: (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, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-to-announce-2020-second-quarter-financial-results-aug-3-301075183.html
SOURCE Marathon Petroleum Corporation
Article Date
6/12/2020MPLX LP to Announce 2020 Second-Quarter Financial Results Aug. 3
Source: PR Newswire
FINDLAY, Ohio, June 12, 2020 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will host a conference call with analysts on Monday, Aug. 3, 2020, at 11 a.m. EDT to discuss 2020 second-quarter financial results, which will be released earlier that day, and to provide an update on company operations.
Interested parties may listen to the conference call by visiting MPLX's website at http://www.mplx.com and clicking on the "2020 Second-Quarter Financial Results" link. A replay of the conference call will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, also will be available online.
About MPLX LP
MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.MPLX.com.
Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Evan Barbosa, Manager, Investor Relations
Jim Mallamaci, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/mplx-lp-to-announce-2020-second-quarter-financial-results-aug-3-301075202.html
SOURCE MPLX LP
Article Date
6/12/2020MPLX LP Reports First-Quarter 2020 Financial Results
Source: PR Newswire
FINDLAY, Ohio, May 5, 2020 /PRNewswire/ --
MPLX LP (NYSE: MPLX) today reported a first-quarter 2020 net loss attributable to MPLX of $2.7 billion, compared with net income of $503 million for the first quarter of 2019. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) attributable to MPLX was $1.3 billion, compared with $1.3 billion in the first quarter of 2019. First-quarter 2020 results include non-cash impairment charges of $3.4 billion. These charges include a goodwill impairment associated with Marcellus gathering and processing assets, impairments of equity method investments primarily located in the Utica region, and long-lived asset impairments related to assets located in East Texas.
The Logistics and Storage (L&S) segment reported segment income from operations of $723 million and adjusted EBITDA of $872 million for the quarter, up $36 million and $44 million, respectively, versus the first quarter of last year. The Gathering and Processing (G&P) segment reported a segment loss from operations of $3.2 billion and adjusted EBITDA of $422 million for the quarter, down $3.4 billion and $13 million, respectively, versus the first quarter of last year. G&P results include the non-cash impairment charges discussed above.
During the quarter, MPLX generated $1.0 billion in net cash provided by operating activities and $1.1 billion of distributable cash flow. Distribution coverage was 1.44x for the first quarter of 2020. MPLX also announced a first-quarter 2020 distribution of $0.6875 per common unit, consistent with the prior quarter and a 4.6% increase over the prior year's first quarter.
"COVID-19 has created an extraordinary set of circumstances and challenges across the country, impacting the personal and professional lives of many, as well as the demand for hydrocarbons that we transport through our logistics assets," said Michael J. Hennigan, president and chief executive officer. "In this environment, we are taking proactive steps by reducing planned 2020 capital and operating expenses to offset the impacts from the related demand destruction, as well as potential impacts from the current commodity price environment on our Gathering and Processing business segment."
Spending Reductions for 2020
MPLX 2020 capital spending target reduced by over $700 million to approximately $1.0 billion.
The company also expects to reduce forecasted annual operating expenses by approximately $200 million, primarily through the deferral of certain expense projects.
MPLX is maintaining its goal to achieve positive free cash flow, after capital investments and distributions, in 2021.
Financial Highlights
Three Months Ended | |||||||
(In millions, except per unit and ratio data) | 2020 | 2019 | |||||
Net (loss) income attributable to MPLX | $ | (2,724) | $ | 503 | |||
Adjusted net income attributable to MPLX(a) | N/A | 683 | |||||
Adjusted EBITDA attributable to MPLX LP(b) | 1,294 | 1,263 | |||||
Net cash provided by operating activities | 1,009 | 853 | |||||
Distributable cash flow attributable to MPLX LP(b) | 1,078 | 1,021 | |||||
Distribution per common unit(c) | $ | 0.6875 | $ | 0.6575 | |||
Distribution coverage ratio(d) | 1.44x | 1.89x | |||||
Consolidated debt to adjusted EBITDA(e) | 4.1x | 3.9x | |||||
(a) | Includes net income attributable to predecessor for the three months ended March 31, 2019. The predecessor period represents the period prior to MPLX's acquisition of ANDX on July 30, 2019. |
(b) | Non-GAAP measures calculated before distributions to preferred unitholders. See reconciliation below. Includes adjusted EBITDA and DCF adjustments attributable to predecessor. For the three months ended March 31, 2019, adjusted EBITDA attributable to MPLX LP excluding predecessor results was $930 million. |
(c) | Distributions declared by the board of directors of MPLX's general partner. |
(d) | DCF attributable to GP and LP unitholders (including DCF attributable to predecessor) divided by total GP and LP distribution declared. For the three months ended March 31, 2019, DCF attributable to predecessor has been included with no corresponding distribution being declared by MPLX relating to the predecessor, resulting in a distribution coverage ratio of 1.89x. |
(e) | Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. See reconciliation below. 2019 is shown as historically presented and has not been adjusted for predecessor impacts. |
Segment Results (including predecessor)
(In millions) | Three Months Ended | ||||
Segment income (loss) from operations (unaudited) | 2020 | 2019 | |||
Logistics and Storage | $ | 723 | $ | 687 | |
Gathering and Processing | (3,209) | 225 | |||
Segment adjusted EBITDA attributable to MPLX LP (unaudited) | |||||
Logistics and Storage | 872 | 828 | |||
Gathering and Processing | $ | 422 | $ | 435 | |
Logistics & Storage
L&S segment income from operations and segment adjusted EBITDA for the first quarter of 2020 increased by $36 million and $44 million, respectively, compared to the same period in 2019. The increase was primarily due to increased pipeline volumes as well as growth in the marine business.
Total pipeline throughputs were 5.1 million barrels per day in the first quarter, an increase of 2% versus the same quarter of 2019. The average tariff rate was $0.88 per barrel for the quarter. Terminal throughput was 3 million barrels per day for the quarter, a decrease of 8% versus the same quarter of 2019.
Gathering & Processing
G&P segment income from operations and segment adjusted EBITDA for the first quarter of 2020 decreased by $3.4 billion and $13 million, respectively, compared to the same period in 2019. Year-over-year results were impacted by non-cash impairment charges primarily related to goodwill, equity method investments, and long-lived assets during the quarter. In the first quarter of 2020:
In the Marcellus and Utica:
Strategic Update
In the L&S segment, MPLX continues to advance its strategy of creating integrated crude oil and natural gas logistics systems from the Permian to the U.S. Gulf Coast. The Wink-to-Webster crude oil pipeline, in which MPLX has an equity interest, remains on schedule to be completed in the first half of 2021. The 36-inch diameter pipeline, of which 100% of the contractible capacity is committed with minimum volume commitments, will originate in the Permian Basin and have destination points in the Houston market, including Marathon Petroleum Corporation's (NYSE: MPC) Galveston Bay refinery.
Also in the Permian, the Whistler Pipeline is being designed to transport approximately 2 bcf/d of natural gas from Waha, Texas, to the Agua Dulce market in south Texas, ultimately reaching MPC's Galveston Bay refinery. MPLX has an equity interest in Whistler, which is expected to be placed in service in the second half of 2021. Whistler is more than 90% committed with minimum volume commitments.
Financial Position and Liquidity
As of March 31, 2020, MPLX had $57 million in cash, $2.8 billion available through its bank revolving credit facility expiring in July 2024 and $1.5 billion available through its intercompany loan agreement with MPC. The company's leverage ratio was 4.1 times at March 31, 2020. MPLX remains committed to maintaining an investment-grade credit profile.
Conference Call
At 11 a.m. ET today, MPLX will hold a conference call and webcast to discuss the reported results and provide an update on operations. Interested parties may listen by visiting MPLX's website at http://www.mplx.com and clicking on the "2020 First-Quarter Financial Results" link in the "Financial Results" section. A replay of the webcast will be available on MPLX's website for two weeks. Financial information, including this earnings release and other investor-related material, will also be available online prior to the conference call and webcast at http://ir.mplx.com.
About MPLX LP
MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.MPLX.com
Investor Relations Contact: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Evan Barbosa, Manager, Investor Relations
Jim Mallamaci, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Communications (419) 421-2521
Jamal Kheiry, Manager, Communications (419) 421-3312
Non-GAAP references
In addition to our financial information presented in accordance with U.S. generally accepted accounting principles (GAAP), management utilizes additional non-GAAP measures to facilitate comparisons of past performance and future periods. This press release and supporting schedules include the non-GAAP measures adjusted EBITDA and consolidated debt to last twelve months pro forma adjusted EBITDA, which we refer to as our leverage ratio, distributable cash flow (DCF) and distribution coverage ratio. The amount of adjusted EBITDA and DCF generated is considered by the board of directors of our general partner in approving the Partnership's cash distribution. Adjusted EBITDA and DCF should not be considered separately from or as a substitute for net income, income from operations, or cash flow as reflected in our financial statements. The GAAP measures most directly comparable to adjusted EBITDA and DCF are net income and net cash provided by operating activities. We define Adjusted EBITDA as net income adjusted for (i) depreciation and amortization; (ii) provision for income taxes; (iii) amortization of deferred financing costs; (iv) non-cash equity-based compensation; (v) net interest and other financial costs; (vi) income from equity method investments; (vii) distributions and adjustments related to equity method investments; (viii) unrealized derivative gains and losses; (ix) acquisition costs; (x) noncontrolling interest and (xi) other adjustments as deemed necessary. In general, we define DCF as adjusted EBITDA adjusted for (i) deferred revenue impacts; (ii) net interest and other financial costs; (iii) maintenance capital expenditures; (iv) equity method investment capital expenditures paid out; and (v) other non-cash items.
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, we record changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, we reverse the previously recorded unrealized gain or loss and record the realized gain or loss of the contract.
Adjusted EBITDA is a financial performance measure used by management, industry analysts, investors, lenders, and rating agencies to assess the financial performance and operating results of our ongoing business operations. Additionally, we believe adjusted EBITDA provides useful information to investors for trending, analyzing and benchmarking our operating results from period to period as compared to other companies that may have different financing and capital structures.
DCF is a financial performance measure used by management as a key component in the determination of cash distributions paid to unitholders. We believe DCF is an important financial measure for unitholders as an indicator of cash return on investment and to evaluate whether the partnership is generating sufficient cash flow to support quarterly distributions. In addition, DCF is commonly used by the investment community because the market value of publicly traded partnerships is based, in part, on DCF and cash distributions paid to unitholders.
Distribution coverage ratio is a financial performance measure used by management to reflect the relationship between the partnership's financial operating performance and cash distribution capability. We define the distribution coverage ratio as the ratio of DCF attributable to GP and LP unitholders to total GP and LP distributions declared.
Leverage ratio is a liquidity measure used by management, industry analysts, investors, lenders and rating agencies to analyze our ability to incur and service debt and fund capital expenditures.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP (MPLX). These forward-looking statements relate to, among other things, MPLX's expectations, estimates and projections concerning the business and operations, financial priorities and strategic plans of MPLX. 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 MPLX'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 our growth, operating costs, labor availability, logistical capabilities, customer demand for our services and industry demand generally, 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 ability to reduce capital and operating expenses; the risk of further impairments; the risk that anticipated opportunities and any other synergies from or anticipated benefits of the Andeavor Logistics LP (ANDX) acquisition 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; disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of ANDX; the amount and timing of future distributions; negative capital market conditions, including an increase of the current yield on common units; the ability to achieve strategic and financial objectives, including positive free cash flow in 2021, and with respect to distribution coverage, future distribution levels, proposed projects and completed transactions; the success of MPC's portfolio optimization, including 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; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and access to debt on commercially reasonable terms, and the ability to successfully execute business plans, growth strategies and self-funding models; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry 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; changes to the expected construction costs and timing of projects and planned investments, and the ability to obtain regulatory and other approvals with respect thereto; completion of midstream infrastructure by competitors; disruptions due to equipment interruption or failure, including electrical shortages and power grid failures; the suspension, reduction or termination of MPC's obligations under MPLX's commercial agreements; modifications to financial policies, capital budgets, and earnings and distributions; the ability to manage disruptions in credit markets or changes to credit ratings; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations and/or enforcement actions initiated thereunder; adverse results in litigation; other risk factors inherent to MPLX's industry; risks related to MPC; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2019, and in Forms 10-Q and other filings, filed with Securities and Exchange Commission (SEC).
Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include: the effects of the recent outbreak of COVID-19 and the adverse impact thereof on the business, financial condition, results of operations and cash flows, including, but not limited to, growth, operating costs, labor availability, logistical capabilities, customer demand for products and industry demand generally, margins, inventory value, cash position, taxes, the price of securities and trading markets with respect thereto, the 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 working capital, cash flows and liquidity, which can be significantly affected by decreases in commodity prices; the ability to reduce capital and operating expenses; with respect to the planned Speedway separation, the ability to successfully complete the separation within the expected timeframe or at all, based on numerous factors including the macroeconomic environment, credit markets and equity markets, the ability to satisfy customary conditions, including obtaining regulatory approvals, and the ability to achieve the strategic and other objectives discussed herein; with respect to the Midstream review, the ability to achieve the strategic and other objectives related thereto; 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 ANDX by 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; 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.
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. 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. 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.
Condensed Results of Operations (unaudited) | |||||
Three Months Ended | |||||
(In millions, except per unit data) | 2020 | 2019 | |||
Revenues and other income: | |||||
Operating revenue | $ | 916 | $ | 963 | |
Operating revenue - related parties | 1,195 | 1,169 | |||
(Loss) income from equity method investments | (1,184) | 77 | |||
Other income | 65 | 26 | |||
Total revenues and other income | 992 | 2,235 | |||
Costs and expenses: | |||||
Operating expenses | 538 | 570 | |||
Operating expenses - related parties | 322 | 321 | |||
Depreciation and amortization | 325 | 301 | |||
Impairment expense | 2,165 | — | |||
General and administrative expenses | 97 | 101 | |||
Other taxes | 31 | 30 | |||
Total costs and expenses | 3,478 | 1,323 | |||
(Loss) income from operations | (2,486) | 912 | |||
Interest and other financial costs | 230 | 224 | |||
(Loss) income before income taxes | (2,716) | 688 | |||
(Benefit) provision for income taxes | — | (1) | |||
Net (loss) income | (2,716) | 689 | |||
Less: Net income attributable to noncontrolling interests | 8 | 6 | |||
Less: Net income attributable to Predecessor | — | 180 | |||
Net (loss) income attributable to MPLX LP | (2,724) | 503 | |||
Less: Series A preferred unit distributions | 20 | 20 | |||
Less: Series B preferred unit distributions | 11 | — | |||
Limited partners' interest in net (loss) income attributable to MPLX LP | $ | (2,755) | $ | 483 | |
Per Unit Data | |||||
Net (loss) income attributable to MPLX LP per limited partner unit: | |||||
Common - basic | $ | (2.60) | $ | 0.61 | |
Common - diluted | $ | (2.60) | $ | 0.61 | |
Weighted average limited partner units outstanding: | |||||
Common units – basic | 1,058 | 794 | |||
Common units – diluted | 1,058 | 795 | |||
Select Financial Statistics (unaudited) | Three Months Ended | ||||
(In millions, except ratio data) | 2020 | 2019 | |||
Common unit distributions declared by MPLX | |||||
Common units (LP) - public(a) | $ | 270 | $ | 191 | |
Common units - MPC(a) | 458 | 332 | |||
Total GP and LP distribution declared | 728 | 523 | |||
Preferred unit distributions(b) | |||||
Series A preferred unit distributions(c) | 20 | 20 | |||
Series B preferred unit distributions(d) | 11 | — | |||
Total preferred unit distributions | 31 | 20 | |||
Other Financial Data | |||||
Adjusted EBITDA attributable to MPLX LP(e)(f) | 1,294 | 1,263 | |||
DCF attributable to GP and LP unitholders(e)(f) | $ | 1,047 | $ | 991 | |
Distribution coverage ratio(g) | 1.44x | 1.89x | |||
Cash Flow Data | |||||
Net cash flow provided by (used in): | |||||
Operating activities | $ | 1,009 | $ | 853 | |
Investing activities | (362) | (700) | |||
Financing activities | $ | (605) | $ | (116) | |
(a) | The distribution on common units for the three months ended March 31, 2019 excludes the impact of the issuance of approximately 102 million units issued to public unitholders and approximately 161 million units issued to MPC in connection with MPLX's acquisition of ANDX on July 30, 2019. |
(b) | Includes MPLX distributions declared on the Series A and Series B preferred units as well as distributions earned on the Series B preferred assuming a distribution is declared by the Board of Directors (distributions on Series B preferred units are declared and payable semi-annually on February 15th and August 15th or the first business day thereafter). Cash distributions declared/to be paid to holders of the Series A and Series B preferred units are not available to common unitholders. |
(c) | Series A preferred units are considered redeemable securities due to the existence of redemption provisions upon a deemed liquidation event which is outside our control. These units rank senior to all common units with respect to distributions and rights upon liquidation and effective May 13, 2018, on an as-converted basis, preferred unit holders receive the greater of $0.528125 per unit or the amount of per unit distributions paid to holders of MPLX LP common units. |
(d) | Series B preferred unitholders are entitled to receive a fixed distribution of $68.75 per unit, per annum, payable semi-annually in arrears on February 15 and August 15 or the first business day thereafter. |
(e) | Non-GAAP measure. See reconciliation below. |
(f) | Includes predecessor EBITDA and DCF that is attributable to the period prior to the acquisition date of July 30, 2019. For the three months ended March 31, 2019, adjusted EBITDA attributable to MPLX LP excluding predecessor results was $930 million. |
(g) | DCF attributable to GP and LP unitholders (including DCF attributable to predecessor) divided by total GP and LP distribution declared. For the three months and year ended March 31, 2019, DCF attributable to predecessor has been included with no corresponding distribution being declared by MPLX, resulting in a distribution coverage ratio of 1.89x. |
Select Balance Sheet Data (unaudited) | |||||
(In millions, except ratio data) | March 31, | December 31, | |||
Cash and cash equivalents | $ | 57 | $ | 15 | |
Total assets | 37,006 | 40,430 | |||
Total long-term debt(a) | 20,471 | 20,307 | |||
Redeemable preferred units | 968 | 968 | |||
Total equity | $ | 13,356 | $ | 16,613 | |
Consolidated total debt to adjusted EBITDA(b) | 4.1x | 4.1x | |||
Partnership units outstanding: | |||||
MPC-held common units | 666 | 666 | |||
Public common units | 393 | 392 | |||
(a) | Outstanding intercompany borrowings were zero as of March 31, 2020 and $594 million as of December 31, 2019. Includes current portion of long-term debt. |
(b) | Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. Face value total debt includes approximately $393 million and $406 million of unamortized discount and debt issuance costs as of March 31, 2020 and December 31, 2019, respectively. |
Operating Statistics (unaudited)(a) | ||||||||
Three Months Ended | ||||||||
2020 | 2019 | % Change | ||||||
Logistics and Storage | ||||||||
Pipeline throughput (mbpd) | ||||||||
Crude oil pipelines | 3,210 | 3,105 | 3 | % | ||||
Product pipelines | 1,905 | 1,897 | 0 | % | ||||
Total pipelines | 5,115 | 5,002 | 2 | % | ||||
Average tariff rates ($ per barrel) | ||||||||
Crude oil pipelines | $ | 0.93 | $ | 0.96 | (3) | % | ||
Product pipelines | 0.79 | 0.68 | 16 | % | ||||
Total pipelines | $ | 0.88 | $ | 0.85 | 4 | % | ||
Terminal throughput (mbpd) | 2,966 | 3,220 | (8) | % | ||||
Barges at period-end | 305 | 256 | 19 | % | ||||
Towboats at period-end | 23 | 23 | — | % | ||||
(a) | Three months ended March 31, 2019 is inclusive of predecessor operations. |
Gathering and Processing Operating Statistics (unaudited) - Consolidated(a) | Three Months Ended | |||||||||
2020 | 2019 | % Change | ||||||||
Gathering throughput (mmcf/d) | ||||||||||
Marcellus Operations | 1,420 | 1,282 | 11 | % | ||||||
Utica Operations(b) | — | — | — | % | ||||||
Southwest Operations | 1,557 | 1,581 | (2) | % | ||||||
Bakken Operations | 156 | 152 | 3 | % | ||||||
Rockies Operations | 592 | 642 | (8) | % | ||||||
Total gathering throughput | 3,725 | 3,657 | 2 | % | ||||||
Natural gas processed (mmcf/d) | ||||||||||
Marcellus Operations | 4,198 | 4,152 | 1 | % | ||||||
Utica Operations(b) | — | — | — | % | ||||||
Southwest Operations | 1,648 | 1,599 | 3 | % | ||||||
Southern Appalachian Operations | 243 | 235 | 3 | % | ||||||
Bakken Operations | 156 | 152 | 3 | % | ||||||
Rockies Operations | 539 | 570 | (5) | % | ||||||
Total natural gas processed | 6,784 | 6,708 | 1 | % | ||||||
C2 + NGLs fractionated (mbpd) | ||||||||||
Marcellus Operations | 456 | 420 | 9 | % | ||||||
Utica Operations(b) | — | — | — | % | ||||||
Southwest Operations | 15 | 17 | (12) | % | ||||||
Southern Appalachian Operations | 12 | 13 | (8) | % | ||||||
Bakken Operations | 31 | 16 | 94 | % | ||||||
Rockies Operations | 5 | 4 | 25 | % | ||||||
Total C2 + NGLs fractionated | 519 | 470 | 10 | % | ||||||
(a) | Includes operating data for entities that have been consolidated into the MPLX financial statements. Three months ended March 31, 2019 is inclusive of predecessor operations. |
(b) | The Utica region relates to operations for partnership-operated equity method investments and thus does not have any operating statistics from a consolidated perspective. See table below for details on Utica. |
Gathering and Processing Operating Statistics (unaudited) - Operated(a) | Three Months Ended | |||||||
2020 | 2019 | % Change | ||||||
Gathering throughput (mmcf/d) | ||||||||
Marcellus Operations | 1,420 | 1,282 | 11 | % | ||||
Utica Operations | 1,800 | 2,109 | (15) | % | ||||
Subtotal | 3,220 | 3,391 | (5) | % | ||||
Southwest Operations | 1,601 | 1,581 | 1 | % | ||||
Bakken Operations | 156 | 152 | 3 | % | ||||
Rockies Operations | 775 | 827 | (6) | % | ||||
Total gathering throughput | 5,752 | 5,951 | (3) | % | ||||
Natural gas processed (mmcf/d) | ||||||||
Marcellus Operations | 5,522 | 5,148 | 7 | % | ||||
Utica Operations | 648 | 817 | (21) | % | ||||
Subtotal | 6,170 | 5,965 | 3 | % | ||||
Southwest Operations | 1,679 | 1,599 | 5 | % | ||||
Southern Appalachian Operations | 243 | 235 | 3 | % | ||||
Bakken Operations | 156 | 152 | 3 | % | ||||
Rockies Operations | 539 | 570 | (5) | % | ||||
Total natural gas processed | 8,787 | 8,521 | 3 | % | ||||
C2 + NGLs fractionated (mbpd) | ||||||||
Marcellus Operations | 456 | 420 | 9 | % | ||||
Utica Operations | 34 | 44 | (23) | % | ||||
Subtotal | 490 | 464 | 6 | % | ||||
Southwest Operations | 15 | 17 | (12) | % | ||||
Southern Appalachian Operations | 12 | 13 | (8) | % | ||||
Bakken Operations | 31 | 16 | 94 | % | ||||
Rockies Operations | 5 | 4 | 25 | % | ||||
Total C2 + NGLs fractionated | 553 | 514 | 8 | % | ||||
(a) | Includes operating data for entities that have been consolidated into the MPLX financial statements as well as operating data for partnership-operated equity method investments. Three months ended March 31, 2019 is inclusive of predecessor operations. |
Reconciliation of Segment Adjusted EBITDA to Net Income (unaudited) | ||||||
Three Months Ended | ||||||
(In millions) | 2020 | 2019 | ||||
L&S segment adjusted EBITDA attributable to MPLX LP (including predecessor results) | $ | 872 | $ | 828 | ||
G&P segment adjusted EBITDA attributable to MPLX LP (including predecessor results) | 422 | 435 | ||||
Adjusted EBITDA attributable to MPLX LP (including predecessor results) | 1,294 | 1,263 | ||||
Depreciation and amortization | (325) | (301) | ||||
Benefit (provision) for income taxes | — | 1 | ||||
Amortization of deferred financing costs | (14) | (7) | ||||
Loss on extinguishment of debt | — | — | ||||
Non-cash equity-based compensation | (5) | (7) | ||||
Impairment expense | (2,165) | — | ||||
Net interest and other financial costs | (216) | (217) | ||||
(Loss) income from equity method investments(a) | (1,184) | 77 | ||||
Distributions/adjustments related to equity method investments | (124) | (122) | ||||
Unrealized derivative (losses) gains(b) | 15 | (4) | ||||
Acquisition costs | — | (1) | ||||
Other | (1) | — | ||||
Adjusted EBITDA attributable to noncontrolling interests | 9 | 7 | ||||
Net (loss) income | $ | (2,716) | $ | 689 | ||
(a) | Includes impairment charges of $1,264 million for the three months ended March 31, 2020. |
(b) | MPLX makes a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
L&S Reconciliation of Segment Income from Operations to Segment Adjusted EBITDA (unaudited) | ||||||
Three Months Ended | ||||||
(In millions) | 2020 | 2019 | ||||
L&S segment income from operations | $ | 723 | $ | 687 | ||
Depreciation and amortization | 138 | 126 | ||||
Income from equity method investments | (50) | (45) | ||||
Distributions/adjustments related to equity method investments | 57 | 54 | ||||
Acquisition costs | — | 1 | ||||
Non-cash equity-based compensation | 3 | 5 | ||||
Other | 1 | — | ||||
L&S segment adjusted EBITDA attributable to MPLX LP (including predecessor results) | 872 | 828 | ||||
L&S predecessor segment adjusted EBITDA attributable to MPLX LP | — | (269) | ||||
L&S segment adjusted EBITDA attributable to MPLX LP | $ | 872 | $ | 559 | ||
G&P Reconciliation of Segment Income from Operations to Segment Adjusted EBITDA (unaudited) | ||||||
Three Months Ended | ||||||
(In millions) | 2020 | 2019 | ||||
G&P segment (loss) income from operations | $ | (3,209) | $ | 225 | ||
Depreciation and amortization | 187 | 175 | ||||
Impairment expense | 2,165 | — | ||||
Loss (income) from equity method investments | 1,234 | (32) | ||||
Distributions/adjustments related to equity method investments | 67 | 68 | ||||
Unrealized derivative (gains) losses(a) | (15) | 4 | ||||
Non-cash equity-based compensation | 2 | 2 | ||||
Adjusted EBITDA attributable to noncontrolling interest | (9) | (7) | ||||
G&P segment adjusted EBITDA attributable to MPLX LP (including predecessor results) | 422 | 435 | ||||
G&P predecessor segment adjusted EBITDA attributable to MPLX LP | — | (64) | ||||
G&P segment adjusted EBITDA attributable to MPLX LP | $ | 422 | $ | 371 | ||
(a) | MPLX makes a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
Reconciliation of Adjusted EBITDA Attributable to MPLX LP and DCF Attributable to GP and LP Unitholders from Net Income (Loss) (unaudited) | ||||||
Three Months Ended | ||||||
(In millions) | 2020 | 2019 | ||||
Net (loss) income | $ | (2,716) | $ | 689 | ||
(Benefit) provision for income taxes | — | (1) | ||||
Amortization of deferred financing costs | 14 | 7 | ||||
Net interest and other financial costs | 216 | 217 | ||||
(Loss) income from operations | (2,486) | 912 | ||||
Depreciation and amortization | 325 | 301 | ||||
Non-cash equity-based compensation | 5 | 7 | ||||
Impairment expense | 2,165 | — | ||||
Loss (Income) from equity method investments | 1,184 | (77) | ||||
Distributions/adjustments related to equity method investments | 124 | 122 | ||||
Unrealized derivative (gains) losses(a) | (15) | 4 | ||||
Acquisition costs | — | 1 | ||||
Other | 1 | — | ||||
Adjusted EBITDA | 1,303 | 1,270 | ||||
Adjusted EBITDA attributable to noncontrolling interests | (9) | (7) | ||||
Adjusted EBITDA attributable to predecessor(b) | — | (333) | ||||
Adjusted EBITDA attributable to MPLX LP | 1,294 | 930 | ||||
Deferred revenue impacts | 23 | 9 | ||||
Net interest and other financial costs | (216) | (217) | ||||
Maintenance capital expenditures | (34) | (37) | ||||
Maintenance capital expenditures reimbursements | 14 | 7 | ||||
Equity method investment capital expenditures paid out | (7) | (4) | ||||
Other | 4 | — | ||||
Portion of DCF adjustments attributable to predecessor(b) | — | 69 | ||||
DCF attributable to MPLX LP | 1,078 | 757 | ||||
Preferred unit distributions(c) | (31) | (30) | ||||
DCF attributable to GP and LP unitholders (excluding predecessor results) | 1,047 | 727 | ||||
Adjusted EBITDA attributable to predecessor(b) | — | 333 | ||||
Portion of DCF adjustments attributable to predecessor(b) | — | (69) | ||||
DCF attributable to GP and LP unitholders (including predecessor results) | $ | 1,047 | $ | 991 | ||
(a) | MPLX makes a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
(b) | The adjusted EBITDA and DCF adjustments related to predecessor are excluded from adjusted EBITDA attributable to MPLX LP and DCF attributable to GP and LP unitholders prior to the acquisition date. |
(c) | Includes MPLX distributions declared on the Series A and Series B preferred units as well as cash distributions earned by the Series B preferred units (as the Series B preferred units are declared and payable semi-annually) assuming a distribution is declared by the Board of Directors. Cash distributions declared/to be paid to holders of the Series A and Series B preferred units are not available to common unitholders. |
Reconciliation of Net Income to LTM Pro forma adjusted EBITDA (unaudited) | |||||
Three Months Ended | |||||
(In millions) | 2020 | 2019 | |||
LTM Net (loss) income | $ | (1,943) | $ | 1,920 | |
LTM Net income to adjusted EBITDA adjustments | 6,641 | 1,725 | |||
LTM Adjusted EBITDA attributable to MPLX LP | 4,698 | 3,645 | |||
LTM Pro forma/Predecessor adjustments for acquisitions | 437 | 4 | |||
LTM Pro forma adjusted EBITDA | 5,135 | 3,649 | |||
Consolidated debt | $ | 20,864 | $ | 14,283 | |
Consolidated debt to adjusted EBITDA(a) | 4.1x | 3.9x | |||
(a) | 2019 is shown as historically presented and has not been adjusted for predecessor impacts. |
Reconciliation of Adjusted EBITDA Attributable to MPLX LP and DCF Attributable to GP and LP Unitholders from Net Cash Provided by Operating Activities (unaudited) | |||||
Three Months Ended | |||||
(In millions) | 2020 | 2019 | |||
Net cash provided by operating activities | $ | 1,009 | $ | 853 | |
Changes in working capital items | 112 | 196 | |||
All other, net | (30) | (15) | |||
Non-cash equity-based compensation | 5 | 7 | |||
Net gain (loss) on disposal of assets | — | (1) | |||
Current income taxes | — | 1 | |||
Net interest and other financial costs | 216 | 217 | |||
Unrealized derivative (gains) losses(a) | (15) | 4 | |||
Acquisition costs | — | 1 | |||
Other adjustments related to equity method investments | 5 | 7 | |||
Other | 1 | — | |||
Adjusted EBITDA | 1,303 | 1,270 | |||
Adjusted EBITDA attributable to noncontrolling interests | (9) | (7) | |||
Adjusted EBITDA attributable to predecessor(b) | — | (333) | |||
Adjusted EBITDA attributable to MPLX LP | 1,294 | 930 | |||
Deferred revenue impacts | 23 | 9 | |||
Net interest and other financial costs | (216) | (217) | |||
Maintenance capital expenditures | (34) | (37) | |||
Maintenance capital expenditures reimbursements | 14 | 7 | |||
Equity method investment capital expenditures paid out | (7) | (4) | |||
Other | 4 | — | |||
Portion of DCF adjustments attributable to predecessor(b) | — | 69 | |||
DCF attributable to MPLX LP | 1,078 | 757 | |||
Preferred unit distributions(c) | (31) | (30) | |||
DCF attributable to GP and LP unitholders (excluding predecessor results) | 1,047 | 727 | |||
Adjusted EBITDA attributable to predecessor(b) | — | 333 | |||
Portion of DCF adjustments attributable to predecessor(b) | — | (69) | |||
DCF attributable to GP and LP unitholders (including predecessor results) | $ | 1,047 | $ | 991 | |
(a) | MPLX makes a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
(b) | The adjusted EBITDA and DCF adjustments related to predecessor are excluded from adjusted EBITDA attributable to MPLX LP and DCF attributable to GP and LP unitholders prior to the acquisition date. |
(c) | Includes MPLX distributions declared on the Series A and Series B preferred units as well as cash distributions earned by the Series B preferred units (as the Series B preferred units are declared and payable semi-annually) assuming a distribution is declared by the Board of Directors. Cash distributions declared/to be paid to holders of the Series A and Series B preferred units are not available to common unitholders. |
Capital Expenditures (unaudited) | |||||
Three Months Ended | |||||
(In millions) | 2020 | 2019 | |||
Capital Expenditures: | |||||
Maintenance | $ | 34 | $ | 37 | |
Maintenance reimbursements | (14) | (7) | |||
Growth | 284 | 467 | |||
Growth reimbursements | — | (5) | |||
Total capital expenditures | 304 | 492 | |||
Less: Increase (decrease) in capital accruals | (61) | (71) | |||
Additions to property, plant and equipment, net(a) | 365 | 563 | |||
Investments in unconsolidated affiliates | 91 | 135 | |||
Acquisitions | — | (1) | |||
Total capital expenditures and acquisitions | 456 | $ | 697 | ||
Less: Maintenance capital expenditures (including reimbursements) | 20 | 30 | |||
Acquisitions | — | (1) | |||
Total growth capital expenditures(b) | $ | 436 | $ | 668 | |
(a) | This amount is represented in the Consolidated Statements of Cash Flows as Additions to property, plant and equipment after excluding growth and maintenance reimbursements. Reimbursements are shown as Contributions from MPC within the Financing activities section of the Consolidated Statements of Cash Flows. |
(b) | Amount excludes contributions from noncontrolling interests of zero and $94 million for the three months ended March 31, 2020 and 2019, respectively, as reflected in the financing section of our statement of cash flows. Also excludes a $69 million return of capital from our Wink to Webster joint venture which is reflected in the investing section of our statement of cash flows for the three months ended March 31, 2020. The table below shows our 2020 adjusted growth capital expenditures which excludes the impact of changes in capital accruals and capitalized interest and also factors in any contributions from noncontrolling interests. |
2020 adjusted growth capital expenditures | Three Months Ended | |
(In millions) | ||
Total growth capital expenditures | $ | 436 |
Decrease in capital accruals | (61) | |
Capitalized interest | (12) | |
Return of Capital | (69) | |
Contributions from noncontrolling interests | — | |
Total adjusted growth capital expenditures | $ | 294 |
View original content:http://www.prnewswire.com/news-releases/mplx-lp-reports-first-quarter-2020-financial-results-301052814.html
SOURCE MPLX LP
Article Date
5/5/2020Marathon Petroleum Corp. Reports First-Quarter 2020 Results
Source: PR Newswire
FINDLAY, Ohio, May 5, 2020 /PRNewswire/ --
Marathon Petroleum Corp. (NYSE: MPC) today reported a net loss of $9.2 billion, or $(14.25) per diluted share, for the first quarter of 2020, compared to a loss of $7 million, or $(0.01) per diluted share, for the first quarter of 2019.
First-quarter 2020 results include pre-tax charges of $12.4 billion primarily related to non-cash impairments. Details on these and other adjustments are shown in the accompanying release tables. Adjusted net loss was $106 million, or $(0.16) per diluted share, for the first quarter of 2020, compared to an adjusted net loss of $59 million, or $(0.09) per diluted share, for the first quarter of 2019.
"Recent global events, including the COVID-19 pandemic and oil price tensions, have been disruptive to the personal and professional lives of many and significantly impacted demand for the transportation fuels we manufacture," said President and Chief Executive Officer Michael J. Hennigan. "In addressing these challenges, first and foremost, we are focused on the health and safety of our employees, our customers, and the communities where we operate. We are grateful for everyone working on the front lines of this pandemic and are proud to do our part by contributing supplies to those affected by this crisis. These are unprecedented times, leading us to make prudent tactical changes for 2020. We believe these proactive steps will help maintain our financial strength, support our investment-grade credit rating, and enhance the through-cycle resiliency of our business."
The company announced the following actions in response to the COVID-19 environment:
Capital Spending, Millions of Dollars | |||||
Prior 2020 | Revised 2020 | ||||
Guidance(a) | Outlook | % Decrease | |||
Refining & Marketing | 1,550 | 1,300 | -16% | ||
Midstream | |||||
MPC Midstream(b) | 300 | 230 | -23% | ||
MPLX | 1,750 | 1,050 | -40% | ||
2,050 | 1,280 | -38% | |||
Retail | 550 | 300 | -45% | ||
Corporate/Other | 200 | 120 | -40% | ||
MPC Consolidated | 4,350 | 3,000 | -31% | ||
(a) | As previously announced January 29, 2020 | ||||
(b) | Excludes capital budget associated with MPLX | ||||
Segment Results
Loss from operations was $11.8 billion in the first quarter of 2020, compared to income of $669 million in the first quarter of 2019. First-quarter 2020 results include $12.4 billion of non-cash charges.
Three Months Ended March 31, | |||||||
(In millions) | 2020 | 2019 | |||||
Income (loss) from operations by segment: | |||||||
Refining & Marketing | $ | (622) | $ | (334) | |||
Retail | 519 | 170 | |||||
Midstream | 905 | 908 | |||||
Corporate and other unallocated items | (227) | (191) | |||||
Segment income before other items not allocated to segments | 575 | 553 | |||||
Other items not allocated to segments: | |||||||
Equity method investment restructuring gains | — | 207 | |||||
Transaction-related costs | (35) | (91) | |||||
Impairments | (9,137) | — | |||||
Inventory market valuation adjustment | (3,220) | — | |||||
Income (loss) from operations | $ | (11,817) | $ | 669 | |||
Adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) was $1.9 billion in the first quarter of 2020, compared to $1.7 billion for the first quarter of 2019. Adjusted EBITDA excludes refining planned turnaround costs of $329 million for the first quarter of 2020 and $186 million for the first quarter of 2019.
Reconciliation of Segment Income (Loss) From Operations to Segment Adjusted EBITDA and Adjusted EBITDA | |||||||
Three Months Ended March 31, | |||||||
(In millions) | 2020 | 2019 | |||||
Refining & Marketing Segment | |||||||
Segment loss from operations | $ | (622) | $ | (334) | |||
Add: Depreciation and amortization | 447 | 427 | |||||
Refining planned turnaround costs | 329 | 186 | |||||
Segment Adjusted EBITDA | $ | 154 | $ | 279 | |||
Retail Segment | |||||||
Segment income from operations | $ | 519 | $ | 170 | |||
Add: Depreciation and amortization | 125 | 126 | |||||
Segment EBITDA | $ | 644 | $ | 296 | |||
Midstream Segment | |||||||
Segment income from operations | $ | 905 | $ | 908 | |||
Add: Depreciation and amortization | 345 | 307 | |||||
Segment EBITDA | $ | 1,250 | $ | 1,215 | |||
Segment Adjusted EBITDA | $ | 2,048 | $ | 1,790 | |||
Corporate and other unallocated items | (227) | (191) | |||||
Add: Depreciation and amortization | 45 | 59 | |||||
Adjusted EBITDA | $ | 1,866 | $ | 1,658 | |||
Refining & Marketing (R&M)
R&M segment loss from operations was $622 million in the first quarter of 2020 compared to a loss from operations of $334 million for the first quarter of 2019. The quarter-over-quarter decrease in R&M earnings was primarily due to lower blended crack spreads, lower sweet differentials, and higher planned turnaround expenses.
Segment adjusted EBITDA was $154 million in the first quarter of 2020, versus $279 million for the first quarter of 2019. Segment adjusted EBITDA excludes refinery planned turnaround costs, which totaled $329 million in the first quarter of 2020 and $186 million in the first quarter of 2019.
R&M margin was $11.30 per barrel for the first quarter of 2020. Crude capacity utilization was 91%, resulting in total throughputs of 3.0 million barrels per day, and clean product yield was 83%.
Retail
Retail segment income from operations was $519 million in the first quarter of 2020, compared with $170 million for the first quarter of 2019. Segment EBITDA was $644 million in the first quarter of 2020, versus $296 million for the first quarter of 2019. The increase in quarterly results was primarily due to higher fuel margins, partially offset by lower fuel volume.
Retail fuel margin increased to 32.91 cents per gallon in the first quarter of 2020, from 17.15 cents per gallon in the first quarter of 2019. Same-store merchandise sales increased by 0.7% year-over-year and same-store gasoline sales volume decreased by 8.3% year-over-year.
Midstream
Midstream segment income from operations, which primarily reflects the results of MPLX, was $905 million in the first quarter of 2020, compared with $908 million for the first quarter of 2019.
Segment EBITDA was $1.3 billion in the first quarter of 2020, versus $1.2 billion for the first quarter of 2019. Strong performance in the midstream business was driven by stable, fee-based earnings as well as contributions from organic growth projects.
Items Not Allocated to Segments and Other
Items not allocated to segments totaled $12.6 billion of expense in the first quarter of 2020, compared to $75 million in the first quarter of 2019. First quarter 2020 results include a $3.2 billion lower of cost or market inventory charge; $9.1 billion of impairment expense related to goodwill, equity method investments, and long-lived assets; as well as $35 million of costs incurred in connection with the Speedway separation, midstream strategic review, and other related activities.
The effective tax rate for the first quarter of 2020 was 16%, primarily due to the effect of non-tax deductible goodwill impairments.
Financial Position and Liquidity
As of March 31, 2020, the company had $1.6 billion in cash and cash equivalents (excluding MPLX's cash and cash equivalents of $57 million), $3 billion available under a five-year bank revolving credit facility, $1 billion available under a 364-day bank revolving credit facility, and $750 million available under its trade receivables securitization facility. MPC drew $2 billion on the five-year bank revolving credit facility in the first quarter of 2020. This borrowing was undertaken to provide financial flexibility given the recent commodity price downturn and the significant working capital impact associated with the decline in crude oil prices. The company has made borrowings to manage the impact of working capital in the past and expects to do so from time to time in the future.
In mid-April, the company borrowed an incremental $1.5 billion on the five-year bank revolving credit facility. In late April, the company issued $2.5 billion of senior notes. Net proceeds were used to repay amounts outstanding on the five-year revolving credit facility. Also in late April, the company added an additional $1 billion 364-day revolver.
As of May 5, 2020, the company had total credit capacity, excluding MPLX, of $7.5 billion, comprised of $5 billion on the five-year bank revolving credit facility, $2 billion under two 364-day bank revolving credit facilities, and $517 million under a trade receivables securitization facility. Of this amount, $6.75 billion is undrawn and available.
Strategic and Operations Update
During the quarter, the company announced the unanimous decision of its Board of Directors to maintain MPC's current midstream structure, with the company remaining the general partner of MPLX. MPC continues to target fourth quarter 2020 for the completion of the separation of Speedway, however timing could change given the COVID-19 related impacts to the business environment and access to capital markets.
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 Gray Oak pipeline began full service on April 1, 2020. The Gray Oak pipeline connects to multiple terminals, including the South Texas Gateway terminal, which is expected to start up in the third quarter of 2020. MPC owns a 25% interest in both the Gray Oak pipeline and the South Texas Gateway terminal.
In keeping with the company's retail strategy of driving merchandise growth and operating cost efficiencies, Speedway continues to expand its brand through store conversions, completing 39 store conversions in the quarter prior to suspending activities due to impacts from COVID-19.
In refining, growth capital spend is primarily focused on high-return projects that are in progress or spending that supports the safe and reliable operation of our facilities. At Garyville, the second phase of the coker project was completed in the first quarter of 2020. 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.
Second Quarter 2020 Outlook
Refining & Marketing Segment: | |||
Refining operating costs per barrel(a) | $ | 6.90 | |
Distribution costs (in millions) | $ | 1,275 | |
Refining planned turnaround costs (in millions) | $ | 215 | |
Depreciation and amortization (in millions) | $ | 440 | |
Refinery throughputs (mbpd): | |||
Crude oil refined | 2,045 | ||
Other charge and blendstocks | 80 | ||
Total | 2,125 | ||
(a) | Includes refining major maintenance and operating costs. Excludes turnaround and depreciation and amortization expenses. |
Retail Segment: | Range | ||||||
Fuel sales (millions of gallons) | 1,450 | 1,650 | |||||
Merchandise sales (in millions) | $ | 1,400 | $ | 1,500 | |||
Corporate and unallocated items (in millions) | $ | 220 | |||||
Conference Call
At 9:30 a.m. ET 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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 which 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 separation, the ability to successfully complete the separation within the expected timeframe or at all, based on numerous factors including the macroeconomic environment, credit markets and equity markets, our ability to satisfy customary conditions, including obtaining regulatory approvals, and the ability to achieve the strategic and other objectives discussed herein; with respect to the Midstream review, our ability to achieve the strategic and other objectives related thereto; 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 March 31, | |||||||
(In millions, except per-share data) | 2020 | 2019 | |||||
Revenues and other income: | |||||||
Sales and other operating revenues | $ | 25,215 | $ | 28,253 | |||
Income (loss) from equity method investments(a) | (1,210) | 99 | |||||
Net gain on disposal of assets | 4 | 214 | |||||
Other income | 71 | 35 | |||||
Total revenues and other income | 24,080 | 28,601 | |||||
Costs and expenses: | |||||||
Cost of revenues (excludes items below) | 22,821 | 25,960 | |||||
Inventory market valuation adjustment | 3,220 | — | |||||
Impairment expense | 7,822 | — | |||||
Depreciation and amortization | 962 | 919 | |||||
Selling, general and administrative expenses | 821 | 867 | |||||
Other taxes | 251 | 186 | |||||
Total costs and expenses | 35,897 | 27,932 | |||||
Income (loss) from operations | (11,817) | 669 | |||||
Net interest and other financial costs | 338 | 306 | |||||
Income (loss) before income taxes | (12,155) | 363 | |||||
Provision (benefit) for income taxes | (1,937) | 104 | |||||
Net income (loss) | (10,218) | 259 | |||||
Less net income attributable to: | |||||||
Redeemable noncontrolling interest | 20 | 20 | |||||
Noncontrolling interests | (1,004) | 246 | |||||
Net loss attributable to MPC | $ | (9,234) | $ | (7) | |||
Per-share data | |||||||
Basic: | |||||||
Net loss attributable to MPC per share | $ | (14.25) | $ | (0.01) | |||
Weighted average shares: | 648 | 673 | |||||
Diluted: | |||||||
Net loss attributable to MPC per share | $ | (14.25) | $ | (0.01) | |||
Weighted average shares: | 648 | 673 | |||||
(a) | The 2020 period includes $1,315 million of impairment expense. |
Income Summary (Unaudited) | |||||||
Three Months Ended March 31, | |||||||
(In millions) | 2020 | 2019 | |||||
Income (loss) from operations by segment | |||||||
Refining & Marketing | $ | (622) | $ | (334) | |||
Retail | 519 | 170 | |||||
Midstream | 905 | 908 | |||||
Items not allocated to segments: | |||||||
Corporate and other unallocated items | (227) | (191) | |||||
Equity method investment restructuring gains(a) | — | 207 | |||||
Transaction-related costs(b) | (35) | (91) | |||||
Impairments(c) | (9,137) | — | |||||
Inventory market valuation adjustment | (3,220) | — | |||||
Income (loss) from operations | (11,817) | 669 | |||||
Net interest and other financial costs | 338 | 306 | |||||
Income (loss) before income taxes | (12,155) | 363 | |||||
Provision (benefit) for income taxes | (1,937) | 104 | |||||
Net income (loss) | (10,218) | 259 | |||||
Less net income (loss) attributable to: | |||||||
Redeemable noncontrolling interest | 20 | 20 | |||||
Noncontrolling interests | (1,004) | 246 | |||||
Net loss attributable to MPC | $ | (9,234) | $ | (7) | |||
(a) | Represents gain related to the formation of a new joint venture: Capline LLC in the first quarter of 2019. |
(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 $492 million impairment of long lived assets in the first quarter of 2020. |
Capital Expenditures and Investments (Unaudited) | |||||||
Three Months Ended March 31, | |||||||
(In millions) | 2020 | 2019 | |||||
Refining & Marketing | $ | 459 | $ | 394 | |||
Retail | 76 | 73 | |||||
Midstream | 474 | 823 | |||||
Corporate and Other(a) | 56 | 41 | |||||
Total | $ | 1,065 | $ | 1,331 | |||
(a) | Includes capitalized interest of $29 million and $31 million, respectively. |
Refining & Marketing Operating Statistics (Unaudited) | |||||||
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Dollar per barrel of net refinery throughput: | |||||||
Refining & Marketing margin(a) | $ | 11.30 | $ | 11.17 | |||
Less: | |||||||
Refining operating costs(b) | 6.00 | 5.58 | |||||
Distribution costs(c) | 4.73 | 4.65 | |||||
Refining planned turnaround costs | 1.21 | 0.68 | |||||
Depreciation and amortization | 1.64 | 1.54 | |||||
Plus: | |||||||
Other(d) | — | 0.07 | |||||
Refining & Marketing segment loss | $ | (2.28) | $ | (1.21) | |||
Refining & Marketing refined product sales volume (mbpd)(e) | 3,588 | 3,669 | |||||
Crude oil capacity utilization (percent)(f) | 91 | 95 | |||||
Refinery throughputs (mbpd):(g) | |||||||
Crude oil refined | 2,784 | 2,869 | |||||
Other charge and blendstocks | 210 | 215 | |||||
Net refinery throughput | 2,994 | 3,084 | |||||
Sour crude oil throughput (percent) | 49 | 52 | |||||
Sweet crude oil throughput (percent) | 51 | 48 | |||||
Refined product yields (mbpd):(g) | |||||||
Gasoline | 1,488 | 1,533 | |||||
Distillates | 1,020 | 1,091 | |||||
Propane | 58 | 53 | |||||
Feedstocks and special products | 352 | 330 | |||||
Heavy fuel oil | 37 | 45 | |||||
Asphalt | 80 | 80 | |||||
Total | 3,035 | 3,132 | |||||
(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 $3.15 and $2.83, respectively. Excludes depreciation and amortization expense. |
(d) | Includes income from equity method investments, net gain 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 78 mbpd and 76 mbpd, respectively. |
Refining & Marketing Operating Statistics by Region (Unaudited) | |||||||
Three Months Ended | |||||||
2020 | 2019 | ||||||
Gulf Coast | |||||||
Dollar per barrel of refinery throughput:(a) | |||||||
Refining & Marketing margin dollars(b) | $ | 8.56 | $ | 7.83 | |||
Refining operating costs(c) | 4.31 | 3.88 | |||||
Refining planned turnaround costs | 1.04 | 0.16 | |||||
Refining depreciation and amortization | 1.22 | 1.13 | |||||
Refinery throughputs (mbpd):(d) | |||||||
Crude oil refined | 1,137 | 1,171 | |||||
Other charge and blendstocks | 164 | 168 | |||||
Gross refinery throughput | 1,301 | 1,339 | |||||
Sour crude oil throughput (percent) | 58 | 63 | |||||
Sweet crude oil throughput (percent) | 42 | 37 | |||||
Refined product yields (mbpd):(d) | |||||||
Gasoline | 549 | 573 | |||||
Distillates | 416 | 445 | |||||
Propane | 30 | 28 | |||||
Feedstocks and special products | 302 | 294 | |||||
Heavy fuel oil | 10 | 13 | |||||
Asphalt | 20 | 22 | |||||
Total | 1,327 | 1,375 | |||||
Mid-Continent | |||||||
Dollar per barrel of refinery throughput:(a) | |||||||
Refining & Marketing margin(b) | $ | 13.05 | $ | 15.26 | |||
Refining operating costs(c) | 5.86 | 5.64 | |||||
Refining planned turnaround costs | 1.51 | 0.68 | |||||
Refining depreciation and amortization | 1.77 | 1.65 | |||||
Refinery throughputs (mbpd):(e) | |||||||
Crude oil refined | 1,074 | 1,057 | |||||
Other charge and blendstocks | 59 | 57 | |||||
Gross refinery throughput | 1,133 | 1,114 | |||||
Sour crude oil throughput (percent) | 26 | 26 | |||||
Sweet crude oil throughput (percent) | 74 | 74 | |||||
Refined product yields (mbpd):(e) | |||||||
Gasoline | 603 | 599 | |||||
Distillates | 391 | 388 | |||||
Propane | 19 | 17 | |||||
Feedstocks and special products | 50 | 39 | |||||
Heavy fuel oil | 15 | 16 | |||||
Asphalt | 60 | 58 | |||||
Total | 1,138 | 1,117 | |||||
West Coast | |||||||
Dollar per barrel of refinery throughput:(a) | |||||||
Refining & Marketing margin(b) | $ | 13.69 | $ | 10.94 | |||
Refining operating costs(c) | 8.96 | 8.19 | |||||
Refining planned turnaround costs | 0.86 | 1.55 | |||||
Refining depreciation and amortization | 1.26 | 1.34 | |||||
Refinery throughputs (mbpd):(f) | |||||||
Crude oil refined | 573 | 641 | |||||
Other charge and blendstocks | 65 | 66 | |||||
Gross refinery throughput | 638 | 707 | |||||
Sour crude oil throughput (percent) | 74 | 73 | |||||
Sweet crude oil throughput (percent) | 26 | 27 | |||||
Refined product yields (mbpd):(f) | |||||||
Gasoline | 336 | 361 | |||||
Distillates | 213 | 258 | |||||
Propane | 9 | 8 | |||||
Feedstocks and special products | 64 | 64 | |||||
Heavy fuel oil | 26 | 25 | |||||
Asphalt | — | — | |||||
Total | 648 | 716 | |||||
(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 46 mbpd and 36 mbpd, respectively. |
(e) | Includes inter-refinery transfer volumes of 9 mbpd and 10 mbpd, respectively. |
(f) | Includes inter-refinery transfer volumes of 23 mbpd and 30 mbpd, respectively. |
Retail Operating Statistics (Unaudited) | |||||||
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Speedway fuel sales (millions of gallons) | 1,636 | 1,871 | |||||
Direct dealer fuel sales (millions of gallons) | 585 | 630 | |||||
Retail fuel margin (dollars per gallon)(a) | $ | 0.3291 | $ | 0.1715 | |||
Merchandise sales (in millions) | $ | 1,461 | $ | 1,413 | |||
Merchandise margin (in millions) | $ | 414 | $ | 407 | |||
Merchandise margin percent | 28.3 | % | 28.8 | % | |||
Same store gasoline sales volume (period over period)(b) | (8.3) | % | (3.2) | % | |||
Same store merchandise sales (period over period)(b)(c) | 0.7 | % | 5.4 | % | |||
Total convenience stores at period-end | 3,881 | 3,918 | |||||
Direct dealer locations at period-end | 1,070 | 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 March 31, | |||||||
2020 | 2019 | ||||||
Pipeline throughputs (mbpd)(a) | 5,220 | 5,248 | |||||
Terminal throughput (mbpd) | 2,966 | 3,220 | |||||
Gathering system throughput (million cubic feet per day)(b) | 5,752 | 5,951 | |||||
Natural gas processed (million cubic feet per day)(b) | 8,787 | 8,522 | |||||
C2 (ethane) + NGLs fractionated (mbpd)(b) | 553 | 514 | |||||
(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) | March 31 | December 31 | |||||
Cash and cash equivalents | $ | 1,690 | $ | 1,527 | |||
MPC debt | 11,138 | 9,125 | |||||
MPLX debt(a) | 20,471 | 19,713 | |||||
Total consolidated debt | 31,609 | 28,838 | |||||
Redeemable noncontrolling interest | 968 | 968 | |||||
Equity | 31,228 | 42,139 | |||||
Shares outstanding | 650 | 649 | |||||
(a) | MPLX debt as shown on MPC's consolidated balance sheet as of December 31, 2019 excluded $594 million of MPLX's borrowings on its intercompany loan agreement with MPC. The loan was repaid during the first quarter of 2020 and MPLX ended the quarter with borrowings of $750 million on its revolver. |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Cash provided by (used in) operations | $ | (768) | $ | 1,623 | |||
Dividends paid per share | $ | 0.58 | $ | 0.53 | |||
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 Loss Attributable to MPC to Adjusted Net Loss Attributable to MPC | |||||||
Three Months Ended March 31, | |||||||
(In millions) | 2020 | 2019 | |||||
Net loss attributable to MPC | $ | (9,234) | $ | (7) | |||
Pre-tax adjustments: | |||||||
Equity method investment restructuring gains | — | (207) | |||||
Transaction-related costs | 35 | 91 | |||||
Impairments | 9,137 | — | |||||
Inventory market valuation adjustment | 3,220 | — | |||||
Out of period tax adjustment | — | 36 | |||||
Tax impact of adjustments(a) | (1,993) | 28 | |||||
Non-controlling interest impact of adjustments | (1,271) | — | |||||
Adjusted net loss attributable to MPC | $ | (106) | $ | (59) | |||
Diluted loss per share | $ | (14.25) | $ | (0.01) | |||
Adjusted diluted loss per share(b) | $ | (0.16) | $ | (0.09) | |||
(a) | For the three months ended March 31, 2020, we adjusted our income (loss) before income taxes to exclude the adjustments listed above and applied a federal and state statutory income tax rate of 24%. For the three months ended March 31, 2019, we generally applied a combined federal and state statutory income tax rate of 24% to the adjustments to net income (loss) attributable to MPC. |
(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. |
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 March 31, | |||||||
(In millions) | 2020 | 2019 | |||||
Net cash provided by (used in) operations | $ | (768) | $ | 1,623 | |||
Less changes in: | |||||||
Current receivables | 1,899 | (1,018) | |||||
Inventories | (422) | (4) | |||||
Current accounts payable and accrued liabilities | (3,453) | 1,483 | |||||
Fair value of derivative instruments | (47) | 29 | |||||
Right of use assets and operating lease liabilities, net | (4) | (1) | |||||
Total changes in working capital | (2,027) | 489 | |||||
Operating cash flow before changes in working capital | $ | 1,259 | $ | 1,134 | |||
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 Loss Attributable to MPC to Adjusted EBITDA | |||||||
Three Months Ended March 31, | |||||||
(In millions) | 2020 | 2019 | |||||
Net loss attributable to MPC | $ | (9,234) | $ | (7) | |||
Plus (Less): | |||||||
Net interest and other financial costs | 338 | 306 | |||||
Net income (loss) attributable to noncontrolling interests | (984) | 266 | |||||
Provision (benefit) for income taxes | (1,937) | 104 | |||||
Depreciation and amortization | 962 | 919 | |||||
Refining planned turnaround costs | 329 | 186 | |||||
Equity method investment restructuring gains | — | (207) | |||||
Transaction-related costs | 35 | 91 | |||||
Impairments | 9,137 | — | |||||
Inventory market valuation adjustment | 3,220 | — | |||||
Adjusted EBITDA | $ | 1,866 | $ | 1,658 | |||
Refining & Marketing Margin
Refining margin is defined as sales revenue less the cost of refinery inputs and purchased products.
Reconciliation of Refining & Marketing Loss from Operations to Refining & Marketing Margin | |||||||
Three Months Ended March 31, | |||||||
(In millions) | 2020 | 2019 | |||||
Refining & Marketing loss from operations | $ | (622) | $ | (334) | |||
Plus (Less): | |||||||
Refining operating costs(a) | 1,636 | 1,552 | |||||
Refining depreciation and amortization | 401 | 387 | |||||
Refining planned turnaround costs | 329 | 186 | |||||
Distribution costs(b) | 1,290 | 1,290 | |||||
Distribution depreciation and amortization | 46 | 40 | |||||
(Income) loss from equity method investments | 3 | (1) | |||||
Net gain on disposal of assets | — | (6) | |||||
Other income | (4) | (14) | |||||
Refining & Marketing margin | $ | 3,079 | $ | 3,100 | |||
Refining & Marketing margin by region: | |||||||
Gulf Coast | $ | 977 | $ | 917 | |||
Mid-Continent | 1,335 | 1,517 | |||||
West Coast | 767 | 666 | |||||
Refining & Marketing margin | $ | 3,079 | $ | 3,100 | |||
(a) | Includes refining major maintenance and operating costs. Excludes planned turnaround and depreciation and amortization expense. |
(b) | Includes fees paid to MPLX of $858 million and $786 million, respectively. Excludes depreciation and amortization expense. |
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 Total Margin | |||||||
Three Months Ended March 31, | |||||||
(in millions) | 2020 | 2019 | |||||
Retail income from operations | $ | 519 | $ | 170 | |||
Plus (Less): | |||||||
Operating, selling, general and administrative expenses | 598 | 583 | |||||
Depreciation and amortization | 125 | 126 | |||||
Income from equity method investments | (22) | (17) | |||||
Net gain on disposal of assets | (1) | (2) | |||||
Other income | (49) | (2) | |||||
Retail total margin | $ | 1,170 | $ | 858 | |||
Retail total margin: | |||||||
Fuel margin | $ | 731 | $ | 429 | |||
Merchandise margin | 414 | 407 | |||||
Other margin | 25 | 22 | |||||
Retail total margin | $ | 1,170 | $ | 858 | |||
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-reports-first-quarter-2020-results-301052811.html
SOURCE Marathon Petroleum Corporation
Article Date
5/5/2020Marathon Petroleum Corp. board of directors elects John P. Surma as chairman and Michael J. Hennigan as new director
Source: PR Newswire
FINDLAY, Ohio, April 30, 2020 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) announced today that board member John P. Surma has been elected by the board of directors to serve as non-executive chairman of the board. MPC also announced today that MPC President and Chief Executive Officer Michael J. Hennigan has been elected to serve as a member of the board. Both appointments became effective April 29.
Surma, a member of the MPC board of directors since 2011, retired as chief executive officer of United States Steel Corporation in September 2013 and as executive chairman in December 2013. He is a member of the boards of directors of MPLX GP LLC, Public Service Enterprise Group, Inc. and Trane Technologies plc.
Hennigan assumed his role as president and chief executive officer of MPC in March. He also serves as president and chief executive officer of the general partner of MPC's sponsored master limited partnership, MPLX LP (NYSE: MPLX). Prior to joining MPLX in 2017, Hennigan was president of crude, NGL and refined products of the general partner of Energy Transfer Partners L.P.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 which 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
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-board-of-directors-elects-john-p-surma-as-chairman-and-michael-j-hennigan-as-new-director-301050065.html
SOURCE Marathon Petroleum Corporation
Article Date
4/30/2020Marathon Petroleum Corp. Announces Quarterly Dividend
Source: PR Newswire
FINDLAY, Ohio, April 29, 2020 /PRNewswire/ -- The board of directors of Marathon Petroleum Corp. (NYSE: MPC) has declared a dividend of $0.58 per share on common stock. The dividend is payable June 10, 2020, to shareholders of record as of the close of business May 20, 2020.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests 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, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-announces-quarterly-dividend-301049629.html
SOURCE Marathon Petroleum Corporation
Article Date
4/29/2020Marathon Petroleum Corp. Announces $1 Billion Revolving Credit Facility
Source: PR Newswire
FINDLAY, Ohio, April 27, 2020 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) today announced that it has entered into a $1 billion, 364-day revolving credit facility. This facility provides MPC additional liquidity and financial flexibility during the ongoing commodity price and demand downturn. The facility is in addition to, and does not replace, any of MPC's previously existing credit facilities.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 which 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
Forward-Looking Statements
This press release includes forward-looking statements that are subject to risks, contingencies or uncertainties. 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," "will," "would" or other similar expressions that convey the uncertainty of future events or outcomes. Our forward-looking 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. Material differences between actual results and any future performance suggested in our forward-looking statements could result from a variety of factors, such as the severity and duration of the COVID-19 pandemic and its impact on global economic conditions. Many of such factors are beyond our control. These factors also include such risks and uncertainties detailed in MPC's periodic public filings with the SEC, including but not limited to those discussed under "Risk Factors" in MPC's annual report on Form 10-K for the year ended December 31, 2019, its quarterly Form 10-Q filings and other filings made with the SEC from time to time. MPC undertakes no obligation to update any forward-looking statement except to the extent required by applicable law. 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.
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-announces-1-billion-revolving-credit-facility-301047800.html
SOURCE Marathon Petroleum Corporation
Article Date
4/27/2020Marathon Petroleum Corp. prices $2.5 billion senior notes offering
Source: PR Newswire
FINDLAY, Ohio, April 23, 2020 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC) announced today that it has priced $2.5 billion in aggregate principal amount of unsecured senior notes in an underwritten public offering consisting of $1.25 billion principal amount of 4.500% senior notes due 2023 and $1.25 billion principal amount of 4.700% senior notes due 2025.
The 2023 senior notes and the 2025 senior notes were offered at a price to the public of 99.941% and 99.805% of par, respectively.
MPC intends to use the net proceeds from this offering to repay amounts outstanding under its five-year revolving credit facility, prefund the repayment of other indebtedness with near term maturities and for general corporate purposes.
The closing of the senior notes offering is expected to occur on April 27, 2020, subject to satisfaction of customary closing conditions.
Citigroup Global Markets Inc., J.P. Morgan Securities LLC, and Mizuho Securities USA LLC are acting as joint book-running managers for the offering.
MPC has filed a registration statement (including a prospectus and related preliminary prospectus supplement for the offering) with the Securities and Exchange Commission (SEC) for the offering to which this communication relates. Before investing, investors should read the preliminary prospectus supplement, the accompanying prospectus in that registration statement and the other documents MPC has filed with the SEC for more complete information about MPC and this offering. Investors may get these documents for free by visiting EDGAR on the SEC's website at www.sec.gov. Alternatively, MPC, any underwriter or any dealer participating in the offering will arrange to send investors the preliminary prospectus supplement and the accompanying prospectus upon request by contacting the following, which are acting as representatives of the underwriters:
Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
(800) 831-9146 (toll-free)
J.P. Morgan Securities LLC
383 Madison Avenue
New York, New York 10179
(212) 834-4533 (collect)
Mizuho Securities USA LLC
1271 Avenue of the Americas
New York, New York 10020
(866) 271-7403 (toll-free)
This news release shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests 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:
Kristina Kazarian, Vice President, Investor Relations (419) 421-2071
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
Forward-Looking Statements
This press release includes forward-looking statements that are subject to risks, contingencies or uncertainties. 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," "will," "would" or other similar expressions that convey the uncertainty of future events or outcomes. Our forward-looking 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. Material differences between actual results and any future performance suggested in our forward-looking statements could result from a variety of factors, such as the severity and duration of the COVID-19 pandemic and its impact on global economic conditions, the satisfaction of the customary closing conditions of the offering and our plan regarding the use of proceeds of the senior notes offering. Many of such factors are beyond are control. These factors also include such risks and uncertainties detailed in MPC's periodic public filings with the SEC, including but not limited to those discussed under "Risk Factors" in MPC's annual report on Form 10-K for the year ended December 31, 2019, its quarterly Form 10-Q filings and other filings made with the SEC and in other MPC investor communications from time to time. MPC undertakes no obligation to update any forward-looking statement except to the extent required by applicable law.
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-prices-2-5-billion-senior-notes-offering-301046508.html
SOURCE Marathon Petroleum Corporation
Article Date
4/23/2020Marathon Petroleum Corp. Announces Business Update
Source: PR Newswire
FINDLAY, Ohio, April 22, 2020 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) today provided an update on its business operations as well as certain preliminary first quarter 2020 financial information in a Current Report on Form 8-K filed with the Securities and Exchange Commission. This report is accessible on the SEC's website at http://www.sec.gov, MPC's website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC's Investor Relations office.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 which 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
Forward-Looking Statements
This press release includes forward-looking statements that are subject to risks, contingencies or uncertainties. 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," "will," "would" or other similar expressions that convey the uncertainty of future events or outcomes. Our forward-looking 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. Material differences between actual results and any future performance suggested in our forward-looking statements could result from a variety of factors, such as the severity and duration of the COVID-19 pandemic and its impact on global economic conditions. Many of such factors are beyond our control. These factors also include such risks and uncertainties detailed in MPC's periodic public filings with the SEC, including but not limited to those discussed under "Risk Factors" in MPC's annual report on Form 10-K for the year ended December 31, 2019, its quarterly Form 10-Q filings and other filings made with the SEC from time to time. MPC undertakes no obligation to update any forward-looking statement except to the extent required by applicable law. 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.
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-announces-business-update-301045678.html
SOURCE Marathon Petroleum Corporation
Article Date
4/22/2020Marathon Petroleum Corporation Delivers for Healthcare and Local Communities
Source: PR Newswire
FINDLAY, Ohio, April 7, 2020 /PRNewswire/ -- Marathon Petroleum Corporation (MPC) has responded to the COVID-19 pandemic by donating personal protective equipment to healthcare providers and contributing $1 million to the American Red Cross through Marathon Petroleum Foundation, Inc.
To address the nationwide need, MPC donated more than 575,000 N95 respirator masks to 45 hospitals and other healthcare organizations in 20 states to help protect healthcare providers as they treat patients infected with COVID-19. The masks were from a supply MPC prepared years ago as part of its pandemic response plan.
In addition, the Marathon Petroleum Foundation's $1 million donation to the American Red Cross will help supply critical resources necessary to safely provide disaster relief and support to those in crisis during the COVID-19 pandemic and beyond.
"We are incredibly grateful for the selfless actions of doctors, nurses and other healthcare providers on the front lines of this pandemic, and we are grateful that we can make this contribution to their safety," said MPC President and Chief Executive Officer Michael J. Hennigan. "Likewise, the American Red Cross provides vital services in the communities where we do business and throughout the nation, and we are proud to be part of their efforts through this donation from the Marathon Petroleum Foundation."
Trevor Riggen, senior vice president of Disaster Services at the American Red Cross, said the relief organization responds to more than 60,000 disasters a year, and will continue to help people in need. "Thanks to partners like the Marathon Petroleum Foundation, the Red Cross can continue to provide food, shelter and care to people impacted by disasters nationwide," he said. "We are extremely grateful for their support during this public health crisis."
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests 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.
About Marathon Petroleum Foundation
Marathon Petroleum Foundation, Inc. is a philanthropic affiliate of Marathon Petroleum Corporation and its subsidiaries. The foundation strategically focuses its community investments on three core areas where it can make a positive, measurable impact: science, technology, engineering and math (STEM) education, public safety, and environmental conservation/sustainability. The Marathon Petroleum Foundation also provides limited support to community-based organizations to address local health, human and social service needs.
Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corporation-delivers-for-healthcare-and-local-communities-301036829.html
SOURCE Marathon Petroleum Corporation
Article Date
4/7/2020MPLX LP Reschedules 2020 First-Quarter Earnings Call to May 5
Source: PR Newswire
FINDLAY, Ohio, April 3, 2020 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), has rescheduled its 2020 first-quarter earnings conference call to Tuesday, May 5, at 11 a.m. EDT. During the conference call, company executives will discuss 2020 first-quarter financial results, which will be released earlier that day, and provide an update on company operations.
Interested parties may listen to the conference call by visiting MPLX's website at http://www.mplx.com and clicking on the "2020 First-Quarter Financial Results" link. A replay of the conference call will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, also will be available online.
About MPLX LP
MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.MPLX.com.
Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/mplx-lp-reschedules-2020-first-quarter-earnings-call-to-may-5-301034847.html
SOURCE MPLX LP
Article Date
4/3/2020Marathon Petroleum Corp. Reschedules 2020 First-Quarter Earnings Call to May 5
Source: PR Newswire
FINDLAY, Ohio, April 3, 2020 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) has rescheduled its 2020 first-quarter earnings conference call to Tuesday, May 5, at 9:30 a.m. EDT. During the conference call, company executives will discuss 2020 first-quarter financial results, which will be released earlier that day, and provide an update on company operations.
Interested parties may listen to the conference call by visiting MPC's website at http://www.marathonpetroleum.com and clicking on "Events and Presentations" under the "Investors" tab. A replay of the conference call will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, also will be available online.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 which 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 Contact: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-reschedules-2020-first-quarter-earnings-call-to-may-5-301034845.html
SOURCE Marathon Petroleum Corporation
Article Date
4/3/2020Marathon Petroleum Corp. to Hold 2020 Annual Meeting of Shareholders in Virtual Format
Source: PR Newswire
FINDLAY, Ohio, April 2, 2020 /PRNewswire/ -- Due to the evolving impact of the coronavirus outbreak (COVID-19), and to support the health and well-being of the company's shareholders, employees and community, the Board of Directors of Marathon Petroleum Corp. (NYSE: MPC) has determined to change the format of the company's 2020 annual meeting of shareholders scheduled for Wednesday, April 29, 2020, at 10 a.m. EDT from in-person to virtual-only.
Shareholders of record as of the close of business on March 2, 2020, can attend the virtual annual meeting via the internet at www.virtualshareholdermeeting.com/MPC2020 by using the 16-digit control number included on the proxy card, voting instruction form or notice previously received. The company has designed the format of the annual meeting to ensure that shareholders are afforded the same rights and opportunities to participate as they would have at an in-person meeting, using online tools to ensure shareholder access and participation. For additional information regarding accessing and participating in the virtual meeting, please refer to the company's supplemental proxy materials filed with the Securities and Exchange Commission on April 2, 2020.
The company urges shareholders to vote and submit proxies in advance of the annual meeting by one of the methods described in the proxy materials for the annual meeting.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests 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, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-to-hold-2020-annual-meeting-of-shareholders-in-virtual-format-301034101.html
SOURCE Marathon Petroleum Corporation
Article Date
4/2/2020Marathon Petroleum Corporation earns 2020 ENERGY STAR® Partner of the Year - Sustained Excellence Award
Source: PR Newswire
FINDLAY, Ohio, April 1, 2020 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC) has earned the U.S. Environmental Protection Agency's (EPA's) 2020 ENERGY STAR Partner of the Year – Sustained Excellence Award, the highest honor among ENERGY STAR awards. MPC is the only fuels manufacturing company to earn the award, which recognizes the company for sustained, top-tier energy efficiency and excellent environmental compliance.
"I salute the 2020 ENERGY STAR award winners," said Anne Idsal, EPA Principal Deputy Assistant Administrator for Air and Radiation. "These leaders demonstrate how energy efficiency drives economic competitiveness in tandem with environmental protection."
MPC President and Chief Executive Officer Michael J. Hennigan credits the company's long-time commitment to environmental stewardship as a driver of its ENERGY STAR performance. "We have always recognized the value of energy-efficient operations, and we joined the ENERGY STAR program as soon as refineries were eligible to participate," he said. "We're proud that our energy efficiency programs are recognized for their consistent results."
EPA presents the Sustained Excellence Award to partners like MPC that have already received ENERGY STAR Partner of the Year recognition for a minimum of two consecutive years and have gone above and beyond the criteria needed to qualify for recognition.
Hennigan pointed out that the company's energy-efficiency efforts are part of its broader approach to sustainability. MPC recently announced a companywide goal to reduce its greenhouse gas (GHG) emissions per barrel of oil equivalent (BOE) processed to 30% below 2014 levels by 2030. "Marathon Petroleum is committed to continual improvement and being responsive to stakeholder concerns," Hennigan said.
In addition to its GHG emissions intensity reductions, MPC is also committed to further expanding its renewable fuel manufacturing and blending capabilities. Current projects include the conversion of its Dickinson, North Dakota, refinery into a renewable diesel plant and processing of biocrude generated from municipal waste at its Martinez, California, refinery. In addition, MPC is actively working with and investing in Virent, Inc., its wholly owned research and development subsidiary in Madison, Wisconsin, toward the commercialization of Virent's BioForming® technology for producing bio-gasoline and bio-jet fuel from various sugars.
"We're grateful that the EPA recognizes our energy-efficiency efforts, which make significant contributions to our sustainability goals," Hennigan said.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests 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
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
About ENERGY STAR
ENERGY STAR® is the government-backed symbol for energy efficiency, providing simple, credible, and unbiased information that consumers and businesses rely on to make well-informed decisions. Thousands of industrial, commercial, utility, state, and local organizations—including more than 40 percent of the Fortune 500 companies—rely on their partnership with EPA to deliver cost-saving energy efficiency solutions. Since 1992, ENERGY STAR and its thousands of partners helped American families and businesses save more than 4 trillion kilowatt-hours of electricity and achieve over 3.5 billion metric tons of greenhouse gas reductions. In 2018 alone, ENERGY STAR and its partners helped Americans avoid nearly $35 billion in energy costs. More background information about ENERGY STAR can be found at: energystar.gov/about and energystar.gov/numbers.
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 MPC's greenhouse gas emissions intensity goals and strategies to achieve those goals. 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 our forward-looking statements by words such as "anticipate," "believe," "budget," "commitment," "design," "estimate," "expect," "focus," "forecast," "forward," "goal," "guidance," "imply," "intend," "look," "objective," "opportunity," "outlook," "plan," "policy," "position," "potential," "predict," "priority," "project," "projection," "proposition," "prospective," "pursue," "schedule," "seek," "strategy," "target," "could," "may," "should," "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 our actual results to differ materially from those implied in the forward-looking statements include: the effects of any divestitures on the business or our 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 or earnings per share; the regional, national and worldwide availability and pricing of refined products, crude oil, natural gas, NGLs, renewable feedstocks and other feedstocks; consumer demand for refined products and renewable fuels; future levels of capital, environmental or 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; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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 or otherwise; 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 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, filed with Securities and Exchange Commission (SEC).
We have based our forward-looking statements on our current expectations, estimates and projections about our 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. Copies of MPC's Form 10-K and Forms 10-Q are available on the SEC's website, MPC's website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC's Investor Relations office.
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SOURCE Marathon Petroleum Corporation
Article Date
4/1/2020John Fox, Founder, Former Chairman and CEO of MarkWest Energy Partners, Issues Open Letter To The Board Of Directors Of Marathon Petroleum Corporation Supporting Recent Decisions and The Appointment of Michael Hennigan as CEO
Source: PR Newswire
DENVER, March 30, 2020 /PRNewswire/ -- John M. Fox, beneficial owner of 1,427,826 common units of MPLX LP and 62,583 shares of Marathon Petroleum Company, today released the following open letter to the board of directors of Marathon Petroleum Corporation (MPC) and MPLX LP (MPLX) outlining his support of management. Mr. Fox believes that recent decisions to appoint Michael Hennigan as CEO of MPC, maintain the current structure and direction of MPLX, and to downsize capex in line with current industry conditions are keys to generating long-term MPC and MPLX value for shareholders, and that the board of directors is working diligently to ensure all of the above are delivered.
Please see disclosures at the end of this release.
The full text of the letter follows:
March 30, 2020
Board of Directors
Marathon Petroleum Corporation
539 S Main St
FINDLAY, OH 45840-3229
Attention:
To the Board of Directors of Marathon Petroleum Corporation:
I am writing to express my support …
As you know I am the Founder and a former Chairman, Chief Executive Officer and director of MarkWest Energy GP, L.L.C. As of this date, through the merger of MPLX and MarkWest on December 4, 2015, and from follow-on investment, I am the beneficial owner of 1,427,826 common units of MPLX LP and 62,583 shares of Marathon Petroleum Corporation.
In the past I have had some differences with Marathon, but with Gary Heminger's leadership in guiding the company through the Andeavor acquisition and the board's subsequent decision to maintain the MPLX LP structure and to appoint Michael J. Hennigan as the new CEO, Marathon is now positioned for a very robust future. Gary announced in the annual report that the cost synergies from the Andeavor acquisition are ahead of schedule and now amount to $1.4 billion from the initially estimated $1 billion. The spin-off of Speedway's impressive 4,000 convenience store network across the country by the end 2020 is an added bonus.
After careful consideration, the special committee of the board concluded that Marathon's 63% interest in MPLX is best served by keeping the MPLX MLP structure the same. MPLX provides MPC with a steady and growing distribution stream of $1.8 billion per year and helps immensely in mitigating the cyclical nature of the refining business. It is my judgement that as investors learn more about the powerful complementary combination of Marathon and Andeavor, and begin to recognize the underlying value of the growth engine at MPLX, that both MPC and MPLX holders will be well rewarded.
Finally, Michael Hennigan is an excellent choice as the CEO to lead both MPC and MPLX into the future. Not only does he have extensive experience in the refining business from his thirty years of operational, financial planning, and marketing experience at Sunoco Inc., but he has had extensive midstream experience leading MPLX as CEO since 2017. Michael started out as a young engineer at Sunoco's Marcus Hook refinery in 1981 and after a distinguished career and increasing responsibility was named chief executive officer of Sunoco Logistics in 2012.
The COVID-19 virus has been a setback for all of us, but as we emerge from this crisis, I think the financial strength and commitment to operational excellence at MPC and MPLX will lead to attractive shareholder returns. As a shareholder of MPC and a unitholder of MPLX LP, I strongly support the Board's recent decisions for the future of both companies.
Sincerely,
John Fox
About John M. Fox
John Fox is the founder, former CEO, and Chairman of MarkWest Energy GP, L.L.C. ("MarkWest GP"), the general partner of MarkWest Energy Partners, L.P. ("MarkWest"), and beneficial owner of 1,427,826 MPLX common units, and 62,583 shares of Marathon Petroleum Company, through its merger with MarkWest in 2015 and from follow-on investments.
Disclosure:
John Fox is providing this material for general informational purposes only. None of the information provided herein is intended to be relied upon as investment advice. The opinions expressed in this letter are those of Mr. Fox as of March 30, 2020 and are subject to change at any time due to changes in market, economic conditions, or new public information. These opinions are Mr. Fox's alone, and do not reflect the opinions of any other member of the Fox family. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Mr. Fox to be reliable and are not necessarily all-inclusive. Mr. Fox does not guarantee the accuracy or completeness of this information. There is no guarantee that any forecasts made by any party will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
View original content:SOURCE John M. Fox
Article Date
3/31/2020Marathon Petroleum Corp. Establishes Greenhouse Gas Emissions Goal and Links Goal to Executive and Employee Compensation Programs
Source: PR Newswire
FINDLAY, Ohio, March 4, 2020 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) has established a companywide goal to reduce its greenhouse gas (GHG) emissions per barrel of oil equivalent (BOE) processed to 30% below 2014 levels by 2030. The company has linked achievement of the goal to its executive compensation program and certain employee programs.
"Marathon Petroleum has long been a leader in reducing its GHG emissions intensity, and due to our culture of continual improvement and responsiveness to stakeholder concerns, setting a goal and linking further reduction achievements to our compensation is a logical progression," said MPC Chairman and Chief Executive Officer Gary R. Heminger. "We have added GHG emissions intensity reduction as one of our sustainability metrics for 2020, along with environmental incidents, safety performance, and process safety."
MPC's GHG emissions intensity reductions encompass Scope 1, defined as direct emissions from its operations – such as refineries, trucks, compressors and other equipment – as well as Scope 2, which are indirect emissions resulting from the electricity and steam MPC purchases to support its business activities. These GHG emissions reductions will be measured per BOE because the company uses a variety of feedstocks, including crude oil, natural gas and renewable feedstocks, such as soybean oil. BOE, a unit of measure defined by the U.S. federal government, allows these different throughputs to be measured on a common basis.
The 2030 goal builds upon the business strategy MPC highlighted in its Perspectives on Climate-Related Scenarios report, which has lowered MPC's GHG emissions intensity by approximately 20% over the past five years. Additional focus areas to achieve the 2030 goal include expanding its energy efficiency program, reducing methane emissions and increasing use of renewable energy. MPC is committed to reassessing this goal as achievements toward GHG emissions intensity reductions are realized.
In addition to its GHG emissions intensity reductions, MPC is also committed to further expanding its renewable fuel manufacturing and blending capabilities. Current projects include the conversion of its Dickinson, North Dakota, refinery into a renewable diesel plant at a cost of $470 million, and processing of biocrude generated from municipal waste at its Martinez, California, refinery. In addition, MPC is actively working with and investing in Virent, Inc., its wholly owned research and development subsidiary in Madison, Wisconsin, toward the commercialization of Virent's BioForming® technology for producing bio-gasoline and bio-jet fuel from various sugars.
Heminger said that MPC's commitment to environmental performance is long-standing. "We have earned more of the U.S. Environmental Protection Agency's ENERGY STAR® plant certifications than all other refining companies combined," he noted. "This demonstrates our years-long commitment to energy efficiency, and we look forward to achieving even more in the years ahead."
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests 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, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
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 MPC's greenhouse gas emissions intensity goals and strategies to achieve such goals. 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 our forward-looking statements by words such as "anticipate," "believe," "budget," "commitment," "design," "estimate," "expect," "focus," "forecast," "forward," "goal," "guidance," "imply," "intend," "look," "objective," "opportunity," "outlook," "plan," "policy," "position," "potential," "predict," "priority," "project," "projection," "proposition," "prospective," "pursue," "schedule," "seek," "strategy," "target," "could," "may," "should," "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 our actual results to differ materially from those implied in the forward-looking statements include: the effects of any divestitures on the business or our 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 or earnings per share; the regional, national and worldwide availability and pricing of refined products, crude oil, natural gas, NGLs, renewable feedstocks and other feedstocks; consumer demand for refined products and renewable fuels; future levels of capital, environmental or 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; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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; 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 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, filed with Securities and Exchange Commission (SEC).
We have based our forward-looking statements on our current expectations, estimates and projections about our 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. Copies of MPC's Form 10-K and Forms 10-Q are available on the SEC's website, MPC's website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC's Investor Relations office.
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SOURCE Marathon Petroleum Corporation
Article Date
3/4/2020MPLX LP Reports Fourth-Quarter and Full-Year Financial Results
Source: PR Newswire
FINDLAY, Ohio, Jan. 29, 2020 /PRNewswire/ --
MPLX LP (NYSE: MPLX) today reported a fourth-quarter 2019 net loss attributable to MPLX of $581 million compared with net income of $434 million for the fourth quarter of 2018. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) attributable to MPLX was $1.3 billion, compared with $1.2 billion in the fourth quarter of 2018. Fourth-quarter 2019 results include non-cash impairment charges of $1.2 billion, primarily related to goodwill associated with the Andeavor Logistics (ANDX) gathering and processing businesses acquired by Marathon Petroleum Corporation (NYSE: MPC) as part of its combination with Andeavor in October 2018.
The Logistics and Storage (L&S) segment reported segment income from operations of $677 million and adjusted EBITDA of $853 million for the quarter, up $40 million and $44 million, respectively, versus the fourth quarter of last year. The Gathering and Processing (G&P) segment reported a segment loss from operations of $1.0 billion and adjusted EBITDA of $466 million for the quarter, down $1.3 billion and up $29 million, respectively, on a year-over-year basis. G&P results include the non-cash impairment charges discussed above.
MPLX today announced an updated 2020 growth capital target of approximately $1.5 billion from the previously announced target of approximately $2.0 billion. Michael J. Hennigan, president and chief executive officer, commented, "We have further streamlined our project portfolio to focus on projects that deliver the highest returns. Our continued efforts to high-grade our capital spending will help accomplish our target of positive free cash flow generation, after capital investments and distributions, in 2021. This inflection is expected to allow both the funding of our distribution and capital program entirely from internally generated cash flow, as well as increase our flexibility to reduce debt or repurchase units."
During the quarter, MPLX generated $1.1 billion in net cash provided by operating activities and $1.0 billion of distributable cash flow, which provided adjusted distribution coverage of 1.42 times. MPLX also announced its 28th consecutive distribution increase, to $0.6875 per common unit, a $0.01 increase over the prior quarter and a 6.2% increase over the prior year's fourth quarter.
Financial Highlights
Three Months Ended | Year Ended | ||||||||||||||||||
(In millions, except per unit and ratio data) | 2019 | 2018 | 2019 | 2018 | |||||||||||||||
Net (loss) income attributable to MPLX | $ | (581) | $ | 434 | $ | 1,033 | $ | 1,818 | |||||||||||
Adjusted net (loss) income attributable to MPLX(a) | (581) | 606 | 1,434 | 1,990 | |||||||||||||||
Adjusted EBITDA attributable to MPLX LP (excluding | 1,319 | 911 | 4,334 | 3,475 | |||||||||||||||
Adjusted EBITDA attributable to MPLX LP (including | 1,319 | 1,246 | 5,104 | 3,810 | |||||||||||||||
Net cash provided by operating activities | 1,092 | 1,044 | 4,082 | 3,071 | |||||||||||||||
Distributable cash flow attributable to MPLX LP(c) | 1,045 | 955 | 4,100 | 3,035 | |||||||||||||||
Distribution per common unit(d) | $ | 0.6875 | $ | 0.6475 | $ | 2.6900 | $ | 2.5300 | |||||||||||
Distribution coverage ratio(e) | 1.42x | 1.80x | 1.51x | 1.49x | |||||||||||||||
Consolidated debt to adjusted EBITDA(f) | 4.1x | 3.9x | N/A | N/A | |||||||||||||||
(a) | Includes net income attributable to predecessor. |
(b) | Non-GAAP measure calculated before distributions to preferred unitholders. See reconciliation below. Excludes adjusted EBITDA attributable to predecessor. |
(c) | Non-GAAP measure calculated before distributions to preferred unitholders. See reconciliation below. Includes adjusted EBITDA and DCF adjustments attributable to predecessor. |
(d) | Distributions declared by the board of directors of MPLX's general partner. |
(e) | DCF attributable to GP and LP unitholders (including DCF attributable to predecessor) divided by total GP and LP distribution declared. For the three months and year ended December 31, 2018, DCF attributable to predecessor for the fourth quarter has been included with no corresponding distribution being declared by MPLX relating to the predecessor, resulting in distribution coverage ratios of 1.80x and 1.49x, respectively. For the year ended December 31, 2019, DCF attributable to predecessor has been included with no corresponding distribution being declared by MPLX relating to the predecessor for the first quarter of 2019, resulting in a distribution coverage ratio of 1.51x. |
(f) | Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. See reconciliation below. |
Segment Results (including predecessor)
(In millions) | Three Months Ended | Year Ended | ||||||||||||||
Segment income (loss) from operations (unaudited) | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Logistics and Storage | $ | 677 | $ | 637 | $ | 2,752 | $ | 1,924 | ||||||||
Gathering and Processing | (1,023) | 254 | (375) | 804 | ||||||||||||
Segment adjusted EBITDA attributable to MPLX LP | ||||||||||||||||
Logistics and Storage | 853 | 809 | 3,351 | 2,319 | ||||||||||||
Gathering and Processing | $ | 466 | $ | 437 | $ | 1,753 | $ | 1,491 | ||||||||
Logistics & Storage
L&S segment income from operations and adjusted EBITDA for the fourth quarter of 2019 increased by $40 million and $44 million, respectively, compared to the same period in 2018. The increase was primarily due to the acquisition of ANDX and the performance of the underlying base business.
Total pipeline throughputs were 5.1 million barrels per day in the fourth quarter, relatively flat versus the same quarter of 2018, despite volume impacts related to project work at MPC's Garyville refinery. The average tariff rate was $0.90 per barrel for the quarter. Terminal throughput was 3.3 million barrels per day for the quarter, an increase of 4% versus the same quarter of 2018.
Gathering & Processing
G&P segment income from operations and segment adjusted EBITDA for the fourth quarter of 2019 decreased by $1.3 billion and increased by $29 million, respectively, compared to the same period in 2018. Year-over-year results were impacted by non-cash impairment charges of $1.2 billion, primarily related to goodwill associated with the ANDX G&P businesses acquired by MPC as part of its combination with Andeavor in October 2018. In the fourth quarter of 2019:
In the Marcellus and Utica, the company continued to experience significant year-over-year growth:
Strategic Update
Today, MPLX announced an updated 2020 growth capital target of approximately $1.5 billion from the previously announced target of approximately $2.0 billion. The company also announced it is targeting positive free cash flow, after capital investments and distributions, in 2021. This inflection is expected to allow both the funding of its distribution and capital program entirely from internally generated cash flow. Removing MPLX's reliance on external funding and shifting to a model focused on generating cash flow beyond the needs of the business is anticipated to enable MPLX to focus its capital allocation toward opportunities like debt reduction or unit repurchases.
In the L&S segment, MPLX continues to advance its strategy of creating integrated crude oil and natural gas logistics systems from the Permian to the U.S. Gulf Coast. The Wink-to-Webster crude oil pipeline, in which MPLX has an equity interest, remains on schedule to be completed in the first half of 2021. The 36-inch diameter pipeline will originate in the Permian Basin and have destination points in the Houston market, including MPC's Galveston Bay refinery.
Also in the Permian, the Whistler Pipeline is being designed to transport approximately 2 bcf/d of natural gas from Waha, Texas, to the Agua Dulce market in south Texas, ultimately reaching MPC's Galveston Bay refinery. MPLX has an equity interest in Whistler, which is expected to be placed in service in the second half of 2021.
MPLX continues to progress its Permian-to-Gulf Coast NGL pipeline, called BANGL, which has a planned capacity of approximately 500 thousand barrels per day. The company expects a final investment decision in the near term.
Reversal of the Capline pipeline continues to progress, with a purge of the mainline completed in the fourth quarter. Once reversed, Capline will be capable of supplying discounted mid-continent and Canadian crude to St. James, Louisiana, which has a direct connection to MPC's Garyville refinery. Capline, which is partially owned by MPC and operated by MPLX, is expected to begin light crude service in mid-2021, with heavy crude service expected in 2022.
To support additional growth in the G&P segment, following the Sherwood 12 and Torñado processing plants that came online in October 2019, MPLX completed the Sherwood 13 processing plant late in the fourth quarter. This added another 200 million cubic feet per day of incremental capacity. The company expects to place in service the Omega 2 processing plant in the STACK shale play in Oklahoma in the first quarter of 2020, the Preakness processing plant in the Permian in the second quarter of 2020, and the Smithburg 1 processing plant in the Marcellus in the third quarter of 2020.
Financial Position and Liquidity
As of Dec. 31, 2019, MPLX had $15 million in cash, $3.5 billion available through its bank revolving credit facility expiring in July 2024 and $0.9 billion available through its intercompany loan agreement with MPC. The company's leverage ratio was 4.1 times at Dec. 31, 2019. MPLX remains committed to maintaining an investment-grade credit profile.
Conference Call
At 11 a.m. ET today, MPLX will hold a conference call and webcast to discuss the reported results and provide an update on operations. Interested parties may listen by visiting MPLX's website at http://www.mplx.com and clicking on the "2019 Fourth-Quarter and Full-Year Financial Results" link in the "Financial Results" section. A replay of the webcast will be available on MPLX's website for two weeks. Financial information, including this earnings release and other investor-related material, will also be available online prior to the conference call and webcast at http://ir.mplx.com.
About MPLX LP
MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.MPLX.com
Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Jim Mallamaci, Manager, Investor Relations
Evan Barbosa, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Communications (419) 421-2521
Jamal Kheiry, Manager, Communications (419) 421-3312
Non-GAAP references
In addition to our financial information presented in accordance with U.S. generally accepted accounting principles (GAAP), management utilizes additional non-GAAP measures to facilitate comparisons of past performance and future periods. This press release and supporting schedules include the non-GAAP measures adjusted EBITDA and consolidated debt to last twelve months pro forma adjusted EBITDA, which we refer to as our leverage ratio, distributable cash flow (DCF) and distribution coverage ratio. The amount of adjusted EBITDA and DCFgenerated is considered by the board of directors of our general partner in approving the Partnership's cash distribution. Adjusted EBITDA and DCF should not be considered separately from or as a substitute for net income, income from operations, or cash flow as reflected in our financial statements. The GAAP measures most directly comparable to adjusted EBITDA and DCF are net income and net cash provided by operating activities. We define Adjusted EBITDA as net income adjusted for (i) depreciation and amortization; (ii) provision for income taxes; (iii) amortization of deferred financing costs; (iv) non-cash equity-based compensation; (v) net interest and other financial costs; (vi) income from equity method investments; (vii) distributions and adjustments related to equity method investments; (viii) unrealized derivative gains and losses; (ix) acquisition costs; (x) noncontrolling interest and (xi) other adjustments as deemed necessary. In general, we define DCF as adjusted EBITDA adjusted for (i) deferred revenue impacts; (ii) net interest and other financial costs; (iii) maintenance capital expenditures; (iv) equity method investment capital expenditures paid out; and (v) other non-cash items.
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, we record changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, we reverse the previously recorded unrealized gain or loss and record the realized gain or loss of the contract.
Adjusted EBITDA is a financial performance measure used by management, industry analysts, investors, lenders, and rating agencies to assess the financial performance and operating results of our ongoing business operations. Additionally, we believe adjusted EBITDA provides useful information to investors for trending, analyzing and benchmarking our operating results from period to period as compared to other companies that may have different financing and capital structures.
DCF is a financial performance measure used by management as a key component in the determination of cash distributions paid to unitholders. We believe DCF is an important financial measure for unitholders as an indicator of cash return on investment and to evaluate whether the partnership is generating sufficient cash flow to support quarterly distributions. In addition, DCF is commonly used by the investment community because the market value of publicly traded partnerships is based, in part, on DCF and cash distributions paid to unitholders.
Distribution coverage ratio is a financial performance measure used by management to reflect the relationship between the partnership's financial operating performance and cash distribution capability. We define the distribution coverage ratio as the ratio of DCF attributable to GP and LP unitholders to total GP and LP distributions declared.
Leverage ratio is a liquidity measure used by management, industry analysts, investors, lenders and rating agencies to analyze our ability to incur and service debt and fund capital expenditures.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP (MPLX). These forward-looking statements relate to, among other things, MPLX's expectations, estimates and projections concerning the business and operations, financial priorities and strategic plans of MPLX. 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 MPLX's actual results to differ materially from those implied in the forward-looking statements include but are not limited to: Marathon Petroleum Corporation's (MPC) ability to achieve the strategic and other objectives related to the strategic initiatives and review; the risk of further impairments; the risk that anticipated opportunities and any other synergies from or anticipated benefits of the Andeavor Logistics acquisition 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; disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of ANDX; the amount and timing of future distributions; negative capital market conditions, including an increase of the current yield on common units; the ability to achieve strategic and financial objectives, including positive free cash flow in 2021, and with respect to distribution coverage, future distribution levels, proposed projects and completed transactions; the success of MPC's portfolio optimization, including 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; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and access to debt on commercially reasonable terms, and the ability to successfully execute business plans, growth strategies and self-funding models; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects and planned investments, and the ability to obtain regulatory and other approvals with respect thereto; completion of midstream infrastructure by competitors; disruptions due to equipment interruption or failure, including electrical shortages and power grid failures; the suspension, reduction or termination of MPC's obligations under MPLX's commercial agreements; modifications to financial policies, capital budgets, and earnings and distributions; the ability to manage disruptions in credit markets or changes to credit ratings; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations and/or enforcement actions initiated thereunder; adverse results in litigation; other risk factors inherent to MPLX's industry; risks related to MPC; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2018, and in Forms 10-Q, filed with Securities and Exchange Commission (SEC).
Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include: with respect to the planned Speedway separation, the ability to successfully complete the separation within the expected timeframe or at all, based on numerous factors including the macroeconomic environment, credit markets and equity markets, and the ability to satisfy customary conditions, including obtaining regulatory approvals, and achieve the strategic and other objectives related thereto; with respect to the Midstream review, the ability to achieve the strategic and other objectives related to the strategic review related thereto; 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, 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; 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, 2018, and in Forms 10-Q, filed with the SEC.
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. Copies of MPLX's Form 10-K and Forms 10-Q are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office. Copies of MPC's Form 10-K and Forms 10-Q are available on the SEC website, MPC's website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC's Investor Relations office.
Condensed Results of Operations (unaudited) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(In millions, except per unit data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Revenues and other income: | |||||||||||||||
Operating revenue | $ | 1,014 | $ | 1,009 | $ | 3,832 | $ | 3,315 | |||||||
Operating revenue - related parties | 1,231 | 1,189 | 4,793 | 3,337 | |||||||||||
Income from equity method investments | 35 | 72 | 290 | 247 | |||||||||||
Other income | 36 | 25 | 126 | 106 | |||||||||||
Total revenues and other income | 2,316 | 2,295 | 9,041 | 7,005 | |||||||||||
Costs and expenses: | |||||||||||||||
Operating expenses | 625 | 649 | 2,316 | 2,055 | |||||||||||
Operating expenses - related parties | 378 | 326 | 1,396 | 956 | |||||||||||
Depreciation and amortization | 338 | 302 | 1,254 | 867 | |||||||||||
Impairment expense | 1,197 | — | 1,197 | — | |||||||||||
General and administrative expenses | 95 | 99 | 388 | 316 | |||||||||||
Other taxes | 29 | 28 | 113 | 83 | |||||||||||
Total costs and expenses | 2,662 | 1,404 | 6,664 | 4,277 | |||||||||||
Income from operations | (346) | 891 | 2,377 | 2,728 | |||||||||||
Interest and other financial costs | 229 | 280 | 915 | 714 | |||||||||||
Income before income taxes | (575) | 611 | 1,462 | 2,014 | |||||||||||
(Benefit) provision for income taxes | (2) | — | — | 8 | |||||||||||
Net (loss) income | (573) | 611 | 1,462 | 2,006 | |||||||||||
Less: Net income attributable to noncontrolling interests | 8 | 5 | 28 | 16 | |||||||||||
Less: Net income attributable to Predecessor | — | 172 | 401 | 172 | |||||||||||
Net (loss) income attributable to MPLX LP | (581) | 434 | 1,033 | 1,818 | |||||||||||
Less: Series A preferred unit distributions | 20 | 20 | 81 | 75 | |||||||||||
Less: Series B preferred unit distributions | 10 | — | 17 | — | |||||||||||
Limited partners' interest in net (loss) income | $ | (611) | $ | 414 | $ | 935 | $ | 1,743 | |||||||
Per Unit Data | |||||||||||||||
Net (loss) income attributable to MPLX LP per limited | |||||||||||||||
Common - basic | $ | (0.58) | $ | 0.52 | $ | 1.00 | $ | 2.29 | |||||||
Common - diluted | $ | (0.58) | $ | 0.52 | $ | 1.00 | $ | 2.29 | |||||||
Weighted average limited partner units outstanding: | |||||||||||||||
Common units – basic | 1,058 | 794 | 906 | 761 | |||||||||||
Common units – diluted | 1,058 | 794 | 907 | 761 | |||||||||||
Select Financial Statistics (unaudited) | Three Months Ended | Year Ended | |||||||||||||
(In millions, except ratio data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Common unit distributions declared by MPLX | |||||||||||||||
Common units (LP) - public(a) | $ | 270 | $ | 187 | $ | 988 | $ | 732 | |||||||
Common units - MPC(a)(b) | 446 | 327 | 1,647 | 1,253 | |||||||||||
Total GP and LP distribution declared | 716 | 514 | 2,635 | 1,985 | |||||||||||
Preferred unit distributions(c) | |||||||||||||||
Series A preferred unit distributions(d) | 20 | 20 | 81 | 75 | |||||||||||
Series B preferred unit distributions(e) | 11 | — | 42 | — | |||||||||||
Total preferred unit distributions | 31 | 20 | 123 | 75 | |||||||||||
Other Financial Data | |||||||||||||||
Adjusted EBITDA attributable to MPLX LP (excluding | 1,319 | 911 | 4,334 | 3,475 | |||||||||||
Adjusted EBITDA attributable to MPLX LP (including | 1,319 | 1,246 | 5,104 | 3,810 | |||||||||||
DCF attributable to GP and LP unitholders(f)(h) | $ | 1,015 | $ | 925 | $ | 3,978 | $ | 2,950 | |||||||
Distribution coverage ratio(i) | 1.42x | 1.80x | 1.51x | 1.49x | |||||||||||
Cash Flow Data | |||||||||||||||
Net cash flow provided by (used in): | |||||||||||||||
Operating activities | $ | 1,092 | $ | 1,044 | $ | 4,082 | $ | 3,071 | |||||||
Investing activities | (874) | (851) | (3,063) | (2,878) | |||||||||||
Financing activities | $ | (244) | $ | (147) | $ | (1,089) | $ | (117) | |||||||
(a) | The distribution on common units for 2019 includes the impact of the issuance of approximately 102 million units issued to public |
(b) | Distributions to MPC exclude $12.5 million in distributions waived by MPC in connection with MPLX's acquisition of ANDX with ANDX |
(c) | Includes MPLX distributions declared on the Series A and Series B preferred units as well as distributions earned on the Series B |
(d) | Series A preferred units are considered redeemable securities due to the existence of redemption provisions upon a deemed |
(e) | As a result of the ANDX acquisition, 600,000 ANDX preferred units were converted into 600,000 preferred units of MPLX (the "Series |
(f) | Non-GAAP measure. See reconciliation below. |
(g) | Excludes predecessor EBITDA that is attributable to the period prior to the acquisition date of July 30, 2019. |
(h) | Includes predecessor EBITDA and DCF that is attributable to the period prior to the acquisition date of July 30, 2019. |
(i) | DCF attributable to GP and LP unitholders (including DCF attributable to predecessor) divided by total GP and LP distribution |
Select Balance Sheet Data (unaudited) | |||||||
(In millions, except ratio data) |
Dec. 31, 2019 |
Dec. 31, 2018(a) | |||||
Cash and cash equivalents | $ | 15 | $ | 77 | |||
Total assets | 40,430 | 39,325 | |||||
Total long-term debt(b) | 20,307 | 18,435 | |||||
Redeemable preferred units | 968 | 1,004 | |||||
Total equity | $ | 16,613 | $ | 17,731 | |||
Consolidated total debt to adjusted EBITDA(c) | 4.1x | 3.9x | |||||
Partnership units outstanding: | |||||||
MPC-held common units | 666 | 505 | |||||
Public common units | 392 | 289 | |||||
(a) | Financial information has been retrospectively adjusted for the acquisition of ANDX. |
(b) | Outstanding intercompany borrowings were $594 million as of December 31, 2019 and zero December 31, 2018. Includes current portion of long-term debt. |
(c) | Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. Face value total debt includes approximately $406 million and $431 million of unamortized discount and debt issuance costs as of December 31, 2019 and December 31, 2018, respectively. |
Operating Statistics (unaudited)(a) | |||||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||||
2019 | 2018 | % | 2019 | 2018 | % | ||||||||||||||||
Logistics and Storage | |||||||||||||||||||||
Pipeline throughput (mbpd) | |||||||||||||||||||||
Crude oil pipelines | 3,196 | 3,214 | (1) | % | 3,228 | 3,121 | 3 | % | |||||||||||||
Product pipelines | 1,923 | 1,943 | (1) | % | 1,886 | 1,823 | 3 | % | |||||||||||||
Total pipelines | 5,119 | 5,157 | (1) | % | 5,114 | 4,944 | 3 | % | |||||||||||||
Average tariff rates ($ per barrel) | |||||||||||||||||||||
Crude oil pipelines | $ | 0.97 | $ | 0.85 | 14 | % | $ | 0.94 | $ | 0.67 | 40 | % | |||||||||
Product pipelines | 0.78 | 0.67 | 16 | % | 0.75 | 0.75 | — | % | |||||||||||||
Total pipelines | $ | 0.90 | $ | 0.78 | 15 | % | 0.87 | 0.70 | 24 | % | |||||||||||
Terminal throughput (mbpd) | 3,313 | 3,188 | 4 | % | 3,279 | 3,148 | 4 | % | |||||||||||||
Barges at period-end | 286 | 256 | 12 | % | 286 | 256 | 12 | % | |||||||||||||
Towboats at period-end | 23 | 23 | — | % | 23 | 23 | — | % | |||||||||||||
(a) Inclusive of predecessor operations beginning October 1, 2018. | |||||||||||||||||||||
Gathering and Processing | Three Months Ended | Twelve Months Ended | |||||||||||||||||||
2019 |
2018 | % |
2019 | 2018 | % | ||||||||||||||||
Gathering throughput (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 1,329 | 1,148 | 16 | % | 1,287 | 1,155 | 11 | % | |||||||||||||
Utica Operations | — | — | — | % | — | — | — | % | |||||||||||||
Southwest Operations | 1,651 | 1,694 | (3) | % | 1,625 | 1,566 | 4 | % | |||||||||||||
Bakken Operations | 158 | 147 | 7 | % | 151 | 147 | 3 | % | |||||||||||||
Rockies Operations | 602 | 654 | (8) | % | 630 | 654 | (4) | % | |||||||||||||
Total gathering throughput | 3,740 | 3,643 | 3 | % | 3,693 | 3,522 | 5 | % | |||||||||||||
Natural gas processed (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 4,136 | 3,977 | 4 | % | 4,192 | 3,826 | 10 | % | |||||||||||||
Utica Operations | — | — | — | % | — | — | — | % | |||||||||||||
Southwest Operations | 1,690 | 1,542 | 10 | % | 1,629 | 1,438 | 13 | % | |||||||||||||
Southern Appalachian Operations | 244 | 255 | (4) | % | 244 | 247 | (1) | % | |||||||||||||
Bakken Operations | 158 | 147 | 7 | % | 151 | 147 | 3 | % | |||||||||||||
Rockies Operations | 564 | 573 | (2) | % | 572 | 573 | — | % | |||||||||||||
Total natural gas processed | 6,792 | 6,494 | 5 | % | 6,788 | 6,231 | 9 | % | |||||||||||||
C2 + NGLs fractionated (mbpd) | |||||||||||||||||||||
Marcellus Operations | 446 | 398 | 12 | % | 435 | 379 | 15 | % | |||||||||||||
Utica Operations | — | — | — | % | — | — | — | % | |||||||||||||
Southwest Operations | 21 | 17 | 24 | % | 15 | 18 | (17) | % | |||||||||||||
Southern Appalachian Operations | 13 | 18 | (28) | % | 12 | 15 | (20) | % | |||||||||||||
Bakken Operations | 31 | 15 | 107 | % | 24 | 15 | 60 | % | |||||||||||||
Rockies Operations | 5 | 4 | 25 | % | 4 | 4 | — | % | |||||||||||||
Total C2 + NGLs fractionated | 516 | 452 | 14 | % | 490 | 431 | 14 | % | |||||||||||||
(a) | Includes operating data for entities that have been consolidated into the MPLX financial statements. Also inclusive of predecessor |
Gathering and Processing | Three Months Ended | Twelve Months Ended | |||||||||||||||||||
2019 |
2018 | % |
2019 |
2018 | % | ||||||||||||||||
Gathering throughput (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 1,329 | 1,148 | 16 | % | 1,287 | 1,155 | 11 | % | |||||||||||||
Utica Operations | 2,241 | 2,067 | 8 | % | 2,200 | 1,809 | 22 | % | |||||||||||||
Southwest Operations | 1,658 | 1,694 | (2) | % | 1,628 | 1,567 | 4 | % | |||||||||||||
Bakken Operations | 158 | 147 | 7 | % | 151 | 147 | 3 | % | |||||||||||||
Rockies Operations | 806 | 841 | (4) | % | 828 | 841 | (2) | % | |||||||||||||
Total gathering throughput | 6,192 | 5,897 | 5 | % | 6,094 | 5,519 | 10 | % | |||||||||||||
Natural gas processed (mmcf/d) | |||||||||||||||||||||
Marcellus Operations | 5,339 | 4,773 | 12 | % | 5,248 | 4,448 | 18 | % | |||||||||||||
Utica Operations | 734 | 877 | (16) | % | 810 | 886 | (9) | % | |||||||||||||
Southwest Operations | 1,720 | 1,542 | 12 | % | 1,636 | 1,438 | 14 | % | |||||||||||||
Southern Appalachian Operations | 244 | 255 | (4) | % | 244 | 247 | (1) | % | |||||||||||||
Bakken Operations | 158 | 147 | 7 | % | 151 | 147 | 3 | % | |||||||||||||
Rockies Operations | 564 | 573 | (2) | % | 572 | 573 | — | % | |||||||||||||
Total natural gas processed | 8,759 | 8,167 | 7 | % | 8,661 | 7,739 | 12 | % | |||||||||||||
C2 + NGLs fractionated (mbpd) | |||||||||||||||||||||
Marcellus Operations | 446 | 398 | 12 | % | 435 | 379 | 15 | % | |||||||||||||
Utica Operations | 41 | 50 | (18) | % | 44 | 47 | (6) | % | |||||||||||||
Southwest Operations | 21 | 17 | 24 | % | 15 | 18 | (17) | % | |||||||||||||
Southern Appalachian Operations | 13 | 18 | (28) | % | 12 | 15 | (20) | % | |||||||||||||
Bakken Operations | 31 | 15 | 107 | % | 24 | 15 | 60 | % | |||||||||||||
Rockies Operations | 5 | 4 | 25 | % | 4 | 4 | — | % | |||||||||||||
Total C2 + NGLs fractionated | 557 | 502 | 11 | % | 534 | 478 | 12 | % | |||||||||||||
(a) | Includes operating data for entities that have been consolidated into the MPLX financial statements as well as operating data for |
Reconciliation of Segment Adjusted EBITDA to Net | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
L&S segment adjusted EBITDA attributable to MPLX LP | $ | 853 | $ | 809 | $ | 3,351 | $ | 2,319 | |||||||
G&P segment adjusted EBITDA attributable to MPLX LP | 466 | 437 | 1,753 | 1,491 | |||||||||||
Adjusted EBITDA attributable to MPLX LP (including | 1,319 | 1,246 | 5,104 | 3,810 | |||||||||||
Depreciation and amortization | (338) | (302) | (1,254) | (867) | |||||||||||
Benefit (provision) for income taxes | 2 | — | — | (8) | |||||||||||
Amortization of deferred financing costs | (13) | (10) | (42) | (55) | |||||||||||
Loss on extinguishment of debt | — | (46) | — | (46) | |||||||||||
Non-cash equity-based compensation | (5) | (8) | (22) | (23) | |||||||||||
Impairment expense | (1,197) | — | (1,197) | — | |||||||||||
Net interest and other financial costs | (216) | (224) | (873) | (613) | |||||||||||
Income from equity method investments | 35 | 72 | 290 | 247 | |||||||||||
Distributions/adjustments related to equity method | (163) | (144) | (562) | (458) | |||||||||||
Unrealized derivative (losses) gains(a) | (6) | 23 | 1 | 5 | |||||||||||
Acquisition costs | — | (1) | (14) | (4) | |||||||||||
Other | — | — | (1) | — | |||||||||||
Adjusted EBITDA attributable to noncontrolling interests | 9 | 5 | 32 | 18 | |||||||||||
Net income | $ | (573) | $ | 611 | $ | 1,462 | $ | 2,006 | |||||||
(a) | MPLX makes a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative |
L&S Reconciliation of Segment Income from | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
L&S segment income from operations | $ | 677 | $ | 637 | $ | 2,752 | $ | 1,924 | |||||||
Depreciation and amortization | 130 | 137 | 503 | 308 | |||||||||||
Income from equity method investments | (41) | (48) | (200) | (171) | |||||||||||
Distributions/adjustments related to equity method investments | 83 | 78 | 267 | 242 | |||||||||||
Acquisition costs | — | 1 | 14 | 4 | |||||||||||
Non-cash equity-based compensation | 4 | 4 | 14 | 12 | |||||||||||
Other | — | — | 1 | — | |||||||||||
L&S segment adjusted EBITDA attributable to MPLX LP | 853 | 809 | 3,351 | 2,319 | |||||||||||
L&S predecessor segment adjusted EBITDA attributable to | — | (262) | (603) | (262) | |||||||||||
L&S segment adjusted EBITDA attributable to MPLX LP | $ | 853 | $ | 547 | $ | 2,748 | $ | 2,057 | |||||||
G&P Reconciliation of Segment Income from | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
G&P segment income from operations | $ | (1,023) | $ | 254 | $ | (375) | $ | 804 | |||||||
Depreciation and amortization | 208 | 165 | 751 | 559 | |||||||||||
Impairment expense | 1,197 | — | 1,197 | — | |||||||||||
Loss (Income) from equity method investments | 6 | (24) | (90) | (76) | |||||||||||
Distributions/adjustments related to equity method investments | 80 | 66 | 295 | 216 | |||||||||||
Unrealized derivative losses (gains)(a) | 6 | (23) | (1) | (5) | |||||||||||
Non-cash equity-based compensation | 1 | 5 | 8 | 12 | |||||||||||
Adjusted EBITDA attributable to noncontrolling interest | (9) | (6) | (32) | (19) | |||||||||||
G&P segment adjusted EBITDA attributable to MPLX LP | 466 | 437 | 1,753 | 1,491 | |||||||||||
G&P predecessor segment adjusted EBITDA attributable to | — | (73) | (167) | (73) | |||||||||||
G&P segment adjusted EBITDA attributable to MPLX LP | $ | 466 | $ | 364 | $ | 1,586 | $ | 1,418 | |||||||
(a) | MPLX makes a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative |
Reconciliation of Adjusted EBITDA Attributable to MPLX
| |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net income | $ | (573) | $ | 611 | $ | 1,462 | $ | 2,006 | |||||||
(Benefit) provision for income taxes | (2) | — | — | 8 | |||||||||||
Amortization of deferred financing costs | 13 | 10 | 42 | 55 | |||||||||||
Loss on extinguishment of debt | — | 46 | — | 46 | |||||||||||
Net interest and other financial costs | 216 | 224 | 873 | 613 | |||||||||||
Income from operations | (346) | 891 | 2,377 | 2,728 | |||||||||||
Depreciation and amortization | 338 | 302 | 1,254 | 867 | |||||||||||
Non-cash equity-based compensation | 5 | 8 | 22 | 23 | |||||||||||
Impairment expense | 1,197 | — | 1,197 | — | |||||||||||
Income from equity method investments | (35) | (72) | (290) | (247) | |||||||||||
Distributions/adjustments related to equity method | 163 | 144 | 562 | 458 | |||||||||||
Unrealized derivative losses (gains)(a) | 6 | (23) | (1) | (5) | |||||||||||
Acquisition costs | — | 1 | 14 | 4 | |||||||||||
Other | — | — | 1 | — | |||||||||||
Adjusted EBITDA | 1,328 | 1,251 | 5,136 | 3,828 | |||||||||||
Adjusted EBITDA attributable to noncontrolling | (9) | (5) | (32) | (18) | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | — | (335) | (770) | (335) | |||||||||||
Adjusted EBITDA attributable to MPLX LP | 1,319 | 911 | 4,334 | 3,475 | |||||||||||
Deferred revenue impacts | 27 | 4 | 94 | 28 | |||||||||||
Net interest and other financial costs | (216) | (224) | (873) | (613) | |||||||||||
Maintenance capital expenditures | (88) | (77) | (262) | (175) | |||||||||||
Maintenance capital expenditures reimbursements | 19 | 8 | 53 | 8 | |||||||||||
Equity method investment capital expenditures paid | (12) | (9) | (28) | (31) | |||||||||||
Other | (4) | 7 | 12 | 8 | |||||||||||
Portion of DCF adjustments attributable to | — | 81 | 159 | 81 | |||||||||||
DCF attributable to MPLX LP | 1,045 | 701 | 3,489 | 2,781 | |||||||||||
Preferred unit distributions(c) | (30) | (30) | (122) | (85) | |||||||||||
DCF attributable to GP and LP unitholders (excluding | 1,015 | 671 | 3,367 | 2,696 | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | — | 335 | 770 | 335 | |||||||||||
Portion of DCF adjustments attributable to predecessor(b) | — | (81) | (159) | (81) | |||||||||||
DCF attributable to GP and LP unitholders (including | $ | 1,015 | $ | 925 | $ | 3,978 | $ | 2,950 | |||||||
(a) | MPLX makes a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative |
(b) | The adjusted EBITDA and DCF adjustments related to predecessor are excluded from adjusted EBITDA attributable to MPLX LP and |
(c) | Includes MPLX distributions declared on the Series A and Series B preferred units as well as cash distributions earned by the Series |
Reconciliation of Net Income to LTM Pro forma adjusted EBITDA (unaudited) | |||||||
Year Ended | |||||||
(In millions) | 2019 | 2018 | |||||
LTM Net income | $ | 1,462 | $ | 1,834 | |||
LTM Net income to adjusted EBITDA adjustments | 2,872 | 1,641 | |||||
LTM Adjusted EBITDA attributable to MPLX LP | 4,334 | 3,475 | |||||
LTM Pro forma/Predecessor adjustments for acquisitions | 770 | 92 | |||||
LTM Pro forma adjusted EBITDA | 5,104 | 3,567 | |||||
Consolidated debt | $ | 20,713 | $ | 13,856 | |||
Consolidated debt to adjusted EBITDA(a) | 4.1x | 3.9x | |||||
(a) | 2018 is shown as historically presented and has not been adjusted for predecessor impacts. |
Reconciliation of Adjusted EBITDA Attributable to | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net cash provided by operating activities | $ | 1,092 | $ | 1,044 | $ | 4,082 | $ | 3,071 | |||||||
Changes in working capital items | (26) | (47) | 108 | 31 | |||||||||||
All other, net | 14 | (10) | (9) | (5) | |||||||||||
Non-cash equity-based compensation | 5 | 8 | 22 | 23 | |||||||||||
Net gain (loss) on disposal of assets | 3 | (2) | 6 | (3) | |||||||||||
Current income taxes | 1 | (1) | 2 | — | |||||||||||
Loss on extinguishment of debt | — | 46 | — | 46 | |||||||||||
Net interest and other financial costs | 216 | 224 | 873 | 613 | |||||||||||
Asset retirement expenditures | — | — | 1 | 7 | |||||||||||
Unrealized derivative (gains) losses(a) | 6 | (23) | (1) | (5) | |||||||||||
Acquisition costs | — | 1 | 14 | 4 | |||||||||||
Other adjustments related to equity method | 17 | 11 | 37 | 46 | |||||||||||
Other | — | — | 1 | — | |||||||||||
Adjusted EBITDA | 1,328 | 1,251 | 5,136 | 3,828 | |||||||||||
Adjusted EBITDA attributable to noncontrolling interests | (9) | (5) | (32) | (18) | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | — | (335) | (770) | (335) | |||||||||||
Adjusted EBITDA attributable to MPLX LP | 1,319 | 911 | 4,334 | 3,475 | |||||||||||
Deferred revenue impacts | 27 | 4 | 94 | 28 | |||||||||||
Net interest and other financial costs | (216) | (224) | (873) | (613) | |||||||||||
Maintenance capital expenditures | (88) | (77) | (262) | (175) | |||||||||||
Maintenance capital expenditures reimbursements | 19 | 8 | 53 | 8 | |||||||||||
Equity method investment capital expenditures paid out | (12) | (9) | (28) | (31) | |||||||||||
Other | (4) | 7 | 12 | 8 | |||||||||||
Portion of DCF adjustments attributable to | — | 81 | 159 | 81 | |||||||||||
DCF attributable to MPLX LP | 1,045 | 701 | 3,489 | 2,781 | |||||||||||
Preferred unit distributions(c) | (30) | (30) | (122) | (85) | |||||||||||
DCF attributable to GP and LP unitholders (excluding | 1,015 | 671 | 3,367 | 2,696 | |||||||||||
Adjusted EBITDA attributable to predecessor(b) | — | 335 | 770 | 335 | |||||||||||
Portion of DCF adjustments attributable to | — | (81) | (159) | (81) | |||||||||||
DCF attributable to GP and LP unitholders (including | $ | 1,015 | $ | 925 | $ | 3,978 | $ | 2,950 | |||||||
(a) | MPLX makes a distinction between realized and unrealized gains and losses on derivatives. During the period when a derivative |
(b) | The adjusted EBITDA and DCF adjustments related to predecessor are excluded from adjusted EBITDA attributable to MPLX LP and |
(c) | Includes MPLX distributions declared on the Series A and Series B preferred units as well as cash distributions earned by the Series |
Capital Expenditures (unaudited) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Capital Expenditures: | |||||||||||||||
Maintenance | $ | 88 | $ | 77 | $ | 262 | $ | 175 | |||||||
Maintenance reimbursements | (19) | (8) | (53) | (8) | |||||||||||
Growth | 522 | 696 | 2,001 | 2,078 | |||||||||||
Growth reimbursements | (4) | (16) | (21) | (16) | |||||||||||
Total capital expenditures | 587 | 749 | 2,189 | 2,229 | |||||||||||
Less: Increase (decrease) in capital accruals | (79) | 45 | (146) | 135 | |||||||||||
Asset retirement expenditures | — | — | 1 | 7 | |||||||||||
Additions to property, plant and equipment, net(a) | 666 | 704 | 2,334 | 2,087 | |||||||||||
Investments in unconsolidated affiliates | 219 | 126 | 713 | 341 | |||||||||||
Acquisitions | — | — | (6) | 451 | |||||||||||
Total capital expenditures and acquisitions | 885 | $ | 830 | $ | 3,041 | $ | 2,879 | ||||||||
Less: Maintenance capital expenditures (including | 69 | 69 | 209 | 167 | |||||||||||
Acquisitions | — | — | (6) | 451 | |||||||||||
Total growth capital expenditures(b) | $ | 816 | $ | 761 | $ | 2,838 | $ | 2,261 | |||||||
(a) | This amount is represented in the Consolidated Statements of Cash Flows as Additions to property, plant and equipment after excluding growth |
(b) | Amount excludes contributions from noncontrolling interests of $95 million and $11 million for the year ended December 21, 2019 and 2018, |
2019 adjusted growth capital expenditures |
Year Ended | ||
(In millions) | 2019 | ||
Total growth capital expenditures | $ | 2,838 | |
Decrease in capital accruals | (146) | ||
Capitalized interest | (44) | ||
Contributions from noncontrolling interests | (95) | ||
Total adjusted growth capital expenditures | $ | 2,553 | |
View original content:http://www.prnewswire.com/news-releases/mplx-lp-reports-fourth-quarter-and-full-year-financial-results-300995208.html
SOURCE MPLX LP
Article Date
1/29/2020Marathon Petroleum Corp. Reports Full-Year and Fourth-Quarter Results
Source: PR Newswire
FINDLAY, Ohio, Jan. 29, 2020 /PRNewswire/ --
Marathon Petroleum Corp. (NYSE: MPC) today reported net income of $443 million, or $0.68 per diluted share, for the fourth quarter of 2019 compared to $951 million, or $1.35 per diluted share, for the fourth quarter of 2018.
Fourth-quarter 2019 results include a pre-tax charge of $1.2 billion primarily related to a midstream goodwill impairment related to MPLX LP (NYSE: MPLX). Details on this and other adjustments are shown in the accompanying release tables. Adjusted net income was $1.0 billion, or $1.56 per diluted share, for the fourth quarter of 2019, compared to $1.7 billion, or $2.41 per diluted share, for the fourth quarter of 2018.
MPC returned $409 million of capital to shareholders during the fourth quarter and $3.3 billion for the full year 2019, including $2.0 billion of share repurchases. In addition, the company announced a 9.4% increase in its quarterly dividend to $0.58 per share.
"This quarter demonstrated our continued ability to execute across all segments and capture incremental synergies at an accelerated pace," said Gary R. Heminger, chairman and chief executive officer. "In refining, we continued our focus on margin enhancement opportunities and progressed several projects including completion of the first phase of the Garyville coker expansion project. Our commercial team optimized crude sourcing and product placement opportunities across all regions of our business. The team's commitment to execution enabled us to achieve 94% utilization and strong capture of 105% for the quarter. Across the retail footprint, our team converted over 700 stores since the combination, positioning us to capture merchandise growth and synergy opportunities. And within midstream, we advanced several long-haul pipeline projects that are key to the development of our integrated Permian-to-Gulf Coast logistics system and are expected to generate returns that meaningfully exceed our hurdle rates.
"As we look into 2020, we are optimistic about the prospects for our business," continued Heminger. "With continuous progress of high-grading our midstream project backlog, MPLX is targeting positive free cash flow, after capital investments and distributions, in 2021. We are progressing the Speedway separation while continuing to identify opportunities to grow merchandise margins through store conversions and remodels. In refining, we have made significant enhancements in the operations and reliability of the assets we acquired. And we continue to believe that the configuration and upgrading capacity at our coastal refineries positions us well to capture the market opportunities that are expected to arise from implementation of IMO 2020 regulations."
Synergies
MPC realized $420 million of synergies in the fourth quarter. The majority of the synergy capture was in the Refining and Marketing segment, including: $62 million from catalyst formulation improvements at multiple refineries, $55 million in crude supply optimization in the Mid-Continent region, and $15 million in marine optimization.
The company realized $1.1 billion of total synergies in 2019, exceeding the targeted $600 million of annual gross run-rate synergies. The majority of the synergy capture for the year related to operational and commercial performance in the Refining and Marketing segment, including: $128 million in catalyst formulation enhancements at seven refineries, $76 million in turnaround execution improvements at the Los Angeles, Martinez, and St. Paul Park refineries, $127 million in crude supply optimization in the Mid-Continent region, and $25 million in improved crude sourcing for the West Coast refineries. The company also realized $121 million of synergies in the Retail segment associated with economies of scale and the application of the Speedway merchandise model at newly converted stores. Lastly, MPC realized $24 million of synergies in the Midstream segment and $109 million of corporate synergies. Corporate synergies were driven by cost eliminations and contract negotiations made possible by the combination.
Segment Results
Income from operations was $841 million in the fourth quarter of 2019 compared to $2.0 billion for the fourth quarter of 2018. Adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) was $3.2 billion in the fourth quarter of 2019 compared to $4.1 billion for the fourth quarter of 2018. Adjusted EBITDA excludes refining planned turnaround costs of $153 million for the fourth quarter of 2019 and $232 million for the fourth quarter of 2018.
Full-year income from operations was $5.6 billion in 2019 compared to $5.6 billion in 2018. Adjusted EBITDA was $11.1 billion in 2019 compared to $9.7 billion in 2018. Full-year adjusted EBITDA excludes refining planned turnaround costs of $740 million and $664 million for 2019 and 2018, respectively.
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||
Income from Operations by Segment | |||||||||||
Refining & Marketing | $ | 912 | $ | 923 | $ | 2,367 | $ | 2,481 | |||
Retail | 477 | 613 | 1,582 | 1,028 | |||||||
Midstream | 889 | 889 | 3,594 | 2,752 | |||||||
Items not allocated to segments: | |||||||||||
Corporate and other unallocated items | (237) | (233) | (805) | (502) | |||||||
Equity method investment restructuring gains | 52 | — | 259 | — | |||||||
Transaction-related costs | (13) | (183) | (160) | (197) | |||||||
Litigation | — | — | (22) | — | |||||||
Impairments | (1,239) | 8 | (1,239) | 9 | |||||||
Income from operations | $ | 841 | $ | 2,017 | $ | 5,576 | $ | 5,571 | |||
Midstream
Midstream segment income from operations, which primarily reflects the results of MPLX, was $889 million in the fourth quarter of 2019 compared with $889 million for the fourth quarter of 2018.
Segment EBITDA was $1.2 billion in the fourth quarter of 2019 versus $1.2 billion for the fourth quarter of 2018. Strong performance across MPLX's base business included increased terminal throughputs. During the quarter, MPLX brought three natural gas processing plants and a fractionation plant online. Additionally, gathered, processed, and fractionated volumes all increased in the fourth quarter of 2019 compared to the fourth quarter of 2018, primarily due to continued growth in the Northeast region.
Full-year income from operations was $3.6 billion for 2019, compared with $2.8 billion for 2018. Segment EBITDA was $4.9 billion for 2019, versus $3.6 billion for 2018.
Retail
Retail segment income from operations was $477 million in the fourth quarter of 2019 compared with $613 million for the fourth quarter of 2018. Segment EBITDA was $636 million in the fourth quarter of 2019 versus $738 million for the fourth quarter of 2018. The decrease in quarterly results was primarily due to lower fuel margins, partially offset by higher merchandise margin contributions.
Retail fuel margin decreased to 28.65 cents per gallon in the fourth quarter of 2019, from 32.35 cents per gallon in the fourth quarter of 2018. Same-store merchandise sales increased by 4.7% year-over-year and same-store gasoline sales volume decreased by 4.2% year-over-year.
Full-year income from operations was $1.6 billion in 2019, compared with $1.0 billion in 2018. Segment EBITDA was $2.1 billion in 2019, versus $1.4 billion in 2018.
Refining & Marketing (R&M)
R&M segment income from operations was $912 million in the fourth quarter of 2019 compared to $923 million for the fourth quarter of 2018. Fourth-quarter 2019 results included a benefit of $153 million for the biodiesel blender's tax credit attributable to volumes blended in 2018 and the first three quarters of 2019. The benefit was recognized in the fourth quarter since the legislation authorizing the credit was enacted in December 2019. Fourth-quarter 2018 results included estimated costs of $759 million due to purchase accounting-related inventory effects.
Segment adjusted EBITDA was $1.5 billion in the fourth quarter of 2019, versus $2.3 billion for the fourth quarter of 2018. Segment adjusted EBITDA excludes refinery planned turnaround costs, which totaled $153 million in the fourth quarter of 2019 and $232 million in the fourth quarter of 2018. The quarter-over-quarter decrease in R&M earnings was primarily due to narrower sweet and sour crude differentials partially offset by higher blended crack spreads.
R&M margin was $15.55 per barrel for the fourth quarter. Crude capacity utilization was 94%, resulting in total throughputs of 3.1 million barrels per day for the fourth quarter of 2019. Fourth-quarter 2019 clean product yield was 87 percent.
Full-year segment income from operations was $2.4 billion for 2019, compared to $2.5 billion in 2018. Segment adjusted EBITDA was $4.8 billion in 2019, versus $5.1 billion in 2018.
Items Not Allocated to Segments and Other
Items not allocated to segments totaled $1.4 billion of expense in the fourth quarter of 2019, compared to $408 million in the fourth quarter of 2018. Fourth-quarter 2019 results include $1.2 billion of impairment charges primarily related to MPLX goodwill and $13 million of costs incurred in connection with the Speedway separation, midstream strategic review, and other related activities. These items were partially offset by an equity method restructuring gain of $52 million. The non-cash impairment charge is primarily related to goodwill associated with gathering and processing businesses acquired as a part of the Andeavor combination. Fourth-quarter 2018 results included $183 million of transaction-related costs associated with the Andeavor combination.
Strong Financial Position and Liquidity
As of Dec. 31, 2019, the company had $1.5 billion in cash and cash equivalents (excluding MPLX's cash and cash equivalents of $15 million), $5 billion available under a five-year bank revolving credit facility, $1 billion available under a 364-day bank revolving credit facility, and $750 million available under its trade receivables securitization facility.
Strategic and Operations Update
As previously announced, MPC is targeting early fourth quarter 2020 for the completion of the separation of Speedway. Additionally, the special committee of the MPC board evaluating alternatives to enhance value across the midstream business continues its work and remains on track to provide an update in the first quarter of 2020.
Consistent with MPC's midstream strategy of developing long-haul pipelines and other logistics solutions, the company progressed several projects during the quarter.
Initial startup of the Gray Oak pipeline began during the fourth quarter, with full service expected in the second quarter of 2020. The pipeline will provide crude oil transportation from the Permian and Eagle Ford Basins to the Texas Gulf Coast region, including Corpus Christi. The Gray Oak pipeline will connect to multiple terminals, including the South Texas Gateway terminal, which is expected to start up in the third quarter of 2020. The terminal is designed to have two deepwater docks, with storage capacity of approximately 8.5 million barrels and up to 800 thousand barrels per day (mbpd) of throughput capacity. MPC owns a 25% interest in both the Gray Oak pipeline and the South Texas Gateway terminal.
The Wink-to-Webster crude oil pipeline, in which MPLX has an equity interest, remains on schedule to be competed in the first half of 2021. The 36-inch diameter pipeline will originate in the Permian Basin and have destination points in the Houston market, including MPC's Galveston Bay refinery.
Also in the Permian, the Whistler pipeline is being designed to transport approximately 2 billion cubic feet per day of natural gas from Waha, Texas, to the Agua Dulce market in South Texas, ultimately reaching MPC's Galveston Bay refinery. MPLX has an equity interest in Whistler, which is expected to be placed in service in the second half of 2021.
Reversal of the Capline pipeline continues to progress, with a purge of the mainline completed in the fourth quarter. Once reversed, Capline will be capable of supplying discounted Mid-Continent and Canadian crude to St. James, Louisiana, which has a direct connection to MPC's Garyville refinery. Capline, which is partially owned by MPC and operated by MPLX, is expected to begin light crude service in mid-2021, with heavy crude service expected in 2022.
In keeping with the company's retail strategy of driving merchandise growth and operating cost efficiencies, Speedway continues to expand its brand through store conversions of the acquired Andeavor sites. As of December 31, 2019, Speedway had completed 708 store conversions since the combination with Andeavor, putting the company ahead of schedule and on track to complete all planned store conversions in less than two years.
MPC also continues to expand its presence in Mexico. In addition to significant exports from the Gulf Coast and investments in refined product distribution, the company is now supplying over 218 retail sites, including 179 that are branded ARCO as of December 31, 2019. The network of sites in Mexico provides additional product outlets for, and enhanced integration with, the refining business.
In refining, the company is focused on high-return projects that enhance margin, produce higher-value products, and promote resid destruction. At Garyville, the crude revamp project and the first phase of the coker project were commissioned in the fourth quarter of 2019, allowing the company to realize higher coker unit rates from expanded drum sizing. The second phase of the coker project is on schedule to be completed in the first quarter of 2020. Early operating results on the first coker have been very positive and the company has been able to achieve a 17 percent capacity increase, exceeding original project expectations. The company anticipates the second phase to achieve a similar rate increase.
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 mbpd biorefinery that will process corn and soybean oil to produce renewable diesel. MPC intends to sell the renewable diesel into the California market to comply with the California Low Carbon Fuel Standard.
The Los Angeles Refinery Integration and Compliance (LARIC) project to physically connect the adjacent Carson and Wilmington facilities for cleaner and more efficient operations is nearing completion. The last phase, which is the expansion of the Wilmington hydrocracker, is on track to be completed in the first half of 2020.
First Quarter 2020 Outlook
Refining & Marketing Segment: | ||
Refining operating costs per barrel(a) | $ | 6.05 |
Distribution costs (in millions) | $ | 1,300 |
Refining planned turnaround costs (in millions) | $ | 425 |
Depreciation and amortization (in millions) | $ | 440 |
Refinery throughputs (mbpd): | ||
Crude oil refined | 2,775 | |
Other charge and blendstocks | 200 | |
Total | 2,975 | |
(a) | Includes refining major maintenance and operating costs. Excludes turnaround and depreciation and amortization expenses. |
Retail Segment: | Range | ||||
Fuel sales (millions of gallons) | 2,325 | 2,450 | |||
Merchandise sales (in millions) | $ | 1,450 | $ | 1,550 | |
Corporate and unallocated items (in millions) | $ | 225 | |||
2020 Capital Plan ($ millions)
MPC (excluding MPLX) | ||
Refining & Marketing Segment: | $ | 1,550 |
Growth | 1,100 | |
Maintenance | 450 | |
Retail | 550 | |
Midstream Segment (excluding MPLX) | 300 | |
Corporate and Other | 200 | |
Total MPC (excluding MPLX) | $ | 2,600 |
MPLX | ||
Growth | 1,500 | |
Maintenance | 250 | |
Total MPLX | $ | 1,750 |
Conference Call
At 9:30 a.m. ET 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 below the "2019 Fourth-Quarter and Full-Year Financial Results." 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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 which 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
Doug Wendt, 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. Discretionary free cash flow is defined as operating cash flow less maintenance and regulatory capital.
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: with respect to the planned Speedway separation, the ability to successfully complete the separation within the expected timeframe or at all, based on numerous factors including the macroeconomic environment, credit markets and equity markets, our ability to satisfy customary conditions, including obtaining regulatory approvals, and the ability to achieve the strategic and other objectives discussed herein; with respect to the Midstream review, our ability to achieve the strategic and other objectives related to the strategic review discussed herein; 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; 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, 2018, and in Forms 10-Q, filed with the SEC. Copies of MPC's Form 10-K and Forms 10-Q are available on the SEC 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 and Forms 10-Q are available on the SEC 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 December 31, | Twelve Months Ended December 31, | ||||||||||
(In millions, except per-share data) | 2019 | 2018 | 2019 | 2018 | |||||||
Revenues and other income: | |||||||||||
Sales and other operating revenues | $ | 31,159 | $ | 32,333 | $ | 124,016 | $ | 96,504 | |||
Income from equity method investments | 64 | 111 | 394 | 373 | |||||||
Net gain on disposal of assets | 85 | 17 | 307 | 23 | |||||||
Other income | 67 | 80 | 163 | 202 | |||||||
Total revenues and other income | 31,375 | 32,541 | 124,880 | 97,102 | |||||||
Costs and expenses: | |||||||||||
Cost of revenues (excludes items below) | 27,301 | 28,294 | 110,243 | 86,066 | |||||||
Impairment expense | 1,197 | — | 1,197 | — | |||||||
Depreciation and amortization | 978 | 874 | 3,638 | 2,490 | |||||||
Selling, general and administrative expenses | 857 | 1,147 | 3,475 | 2,418 | |||||||
Other taxes | 201 | 209 | 751 | 557 | |||||||
Total costs and expenses | 30,534 | 30,524 | 119,304 | 91,531 | |||||||
Income from operations | 841 | 2,017 | 5,576 | 5,571 | |||||||
Net interest and other financial costs | 302 | 385 | 1,247 | 1,003 | |||||||
Income before income taxes | 539 | 1,632 | 4,329 | 4,568 | |||||||
Provision for income taxes | 277 | 437 | 1,074 | 962 | |||||||
Net income | 262 | 1,195 | 3,255 | 3,606 | |||||||
Less net income attributable to: | |||||||||||
Redeemable noncontrolling interest | 20 | 20 | 81 | 75 | |||||||
Noncontrolling interests | (201) | 224 | 537 | 751 | |||||||
Net income attributable to MPC | $ | 443 | $ | 951 | $ | 2,637 | $ | 2,780 | |||
Per-share data | |||||||||||
Basic: | |||||||||||
Net income attributable to MPC per share | $ | 0.68 | $ | 1.38 | $ | 4.00 | $ | 5.36 | |||
Weighted average shares: | 648 | 687 | 659 | 518 | |||||||
Diluted: | |||||||||||
Net income attributable to MPC per share | $ | 0.68 | $ | 1.35 | $ | 3.97 | $ | 5.28 | |||
Weighted average shares: | 653 | 704 | 664 | 526 | |||||||
Income Summary (Unaudited) | |||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||
(In millions) | 2019 | 2018(a) | 2019 | 2018(a) | |||||||
Income from Operations by segment | |||||||||||
Refining & Marketing(b) | $ | 912 | $ | 923 | $ | 2,367 | $ | 2,481 | |||
Retail | 477 | 613 | 1,582 | 1,028 | |||||||
Midstream | 889 | 889 | 3,594 | 2,752 | |||||||
Items not allocated to segments: | |||||||||||
Corporate and other unallocated items | (237) | (233) | (805) | (502) | |||||||
Equity method investment restructuring gains(c) | 52 | — | 259 | — | |||||||
Transaction-related costs(d) | (13) | (183) | (160) | (197) | |||||||
Litigation | — | — | (22) | — | |||||||
Impairments(e) | (1,239) | 8 | (1,239) | 9 | |||||||
Income from operations | 841 | 2,017 | 5,576 | 5,571 | |||||||
Net interest and other financial costs | 302 | 385 | 1,247 | 1,003 | |||||||
Income before income taxes | 539 | 1,632 | 4,329 | 4,568 | |||||||
Provision for income taxes | 277 | 437 | 1,074 | 962 | |||||||
Net income | 262 | 1,195 | 3,255 | 3,606 | |||||||
Less net income attributable to: | |||||||||||
Redeemable noncontrolling interest | 20 | 20 | 81 | 75 | |||||||
Noncontrolling interests | (201) | 224 | 537 | 751 | |||||||
Net income attributable to MPC | $ | 443 | $ | 951 | $ | 2,637 | $ | 2,780 | |||
(a) | Includes the results of Andeavor from the October 1, 2018 acquisition date forward. |
(b) | R&M segment results includes a benefit of $153 million and $93 million in the fourth quarter and full year 2019, respectively, for the biodiesel tax credit attributable to volumes blended in prior periods. The benefit was recognized in the fourth quarter because the legislation authorizing the credit was enacted in December 2019. R&M segment results for the 2018 periods included estimated costs of $759 million due to purchase accounting related inventory effects. |
(c) | Includes gains related to the formation of two new joint ventures: The Andersons Marathon Holdings LLC (4Q 2019) and Capline LLC (1Q 2019). |
(d) | The fourth quarter of 2019 includes costs incurred in connection with the Speedway separation, Midstream strategic review and other related efforts. Full year 2019 and both 2018 periods also include employee severance, retention and other costs related to the acquisition of Andeavor. Effective October 1, 2019, we discontinued reporting Andeavor transaction-related costs separately as one year has passed since the acquisition and any remaining costs are not material. |
(e) | 2019 primarily reflects an MPLX goodwill impairment. |
Capital Expenditures and Investments (Unaudited) | |||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||
(In millions) | 2019 | 2018(a) | 2019 | 2018(a) | |||||||||
Refining & Marketing | $ | 614 | $ | 444 | $ | 1,999 | $ | 1,057 | |||||
Retail | 237 | 235 | 607 | 460 | |||||||||
Midstream | 870 | 954 | 3,290 | 2,630 | |||||||||
Corporate and Other(b) | 96 | 60 | 237 | 157 | |||||||||
Total | $ | 1,817 | $ | 1,693 | $ | 6,133 | $ | 4,304 | |||||
(a) | Includes the results of Andeavor from the October 1, 2018 acquisition date forward. |
(b) | Includes capitalized interest of $40 million, $25 million, $137 million and $80 million, respectively. |
Refining & Marketing Operating Statistics (Unaudited) | |||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||
(per barrel) | 2019 | 2018 | 2019 | 2018 | |||||||||
Refining & Marketing margin(a) | $ | 15.55 | $ | 15.70 | $ | 14.23 | $ | 14.25 | |||||
Less: | |||||||||||||
Refining operating costs(b) | 6.25 | 5.79 | 5.66 | 4.99 | |||||||||
Distribution costs(c) | 4.60 | 4.64 | 4.51 | 4.23 | |||||||||
Refining planned turnaround costs | 0.54 | 0.81 | 0.65 | 0.80 | |||||||||
Depreciation and amortization | 1.52 | 1.44 | 1.47 | 1.41 | |||||||||
Plus: | |||||||||||||
Purchase accounting - depreciation and amortization(d) | — | — | 0.01 | — | |||||||||
Biodiesel tax credit(e) | 0.55 | — | 0.08 | — | |||||||||
Other(f) | 0.04 | 0.21 | 0.05 | 0.17 | |||||||||
Refining & Marketing segment income | $ | 3.23 | $ | 3.23 | $ | 2.08 | $ | 2.99 | |||||
Refining & Marketing refined product sales volume (mbpd)(g) | 3,750 | 3,764 | 3,735 | 2,703 | |||||||||
Crude oil capacity utilization (percent)(h) | 94 | 94 | 96 | 96 | |||||||||
Refinery throughputs (mbpd):(i) | |||||||||||||
Crude oil refined | 2,831 | 2,857 | 2,902 | 2,081 | |||||||||
Other charge and blendstocks | 238 | 254 | 210 | 193 | |||||||||
Total | 3,069 | 3,111 | 3,112 | 2,274 | |||||||||
Sour crude oil throughput (percent) | 45 | 50 | 48 | 52 | |||||||||
Sweet crude oil throughput (percent) | 55 | 50 | 52 | 48 | |||||||||
Refined product yields (mbpd):(i) | |||||||||||||
Gasoline | 1,623 | 1,593 | 1,560 | 1,107 | |||||||||
Distillates | 1,074 | 1,111 | 1,087 | 773 | |||||||||
Propane | 56 | 53 | 55 | 41 | |||||||||
Feedstocks and special products | 228 | 273 | 315 | 288 | |||||||||
Heavy fuel oil | 54 | 62 | 49 | 38 | |||||||||
Asphalt | 81 | 74 | 87 | 69 | |||||||||
Total | 3,116 | 3,166 | 3,153 | 2,316 | |||||||||
(a) | Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs. Fourth quarter and full year 2018 are not adjusted for estimated costs of $759 million due to purchase accounting related inventory effects. |
(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 $2.99, $2.11, $2.84 and $2.74, respectively. Excludes depreciation and amortization expense. |
(d) | Reflects the cumulative effects related to a measurement period adjustment arising from the finalization of purchase accounting. |
(e) | Reflects a benefit of $153 million and $93 million in the fourth quarter and full year 2019, respectively, for the biodiesel tax credit attributable to volumes blended in prior periods. |
(f) | Includes income from equity method investments, net gain on disposal of assets and other income. |
(g) | Includes intersegment sales. |
(h) | Based on calendar day capacity, which is an annual average that includes downtime for planned maintenance and other normal operating activities. |
(i) | Excludes inter-refinery volumes of 148 mbpd, 85 mbpd, 110 mbpd and 61 mbpd, respectively. |
Refining & Marketing Operating Statistics by Region (Unaudited) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Gulf Coast | |||||||||||||||
(per barrel) | |||||||||||||||
Refining & Marketing margin dollars(a) | $ | 11.49 | $ | N/A | $ | 9.94 | $ | N/A | |||||||
Refining operating costs(b) | $ | 5.00 | $ | 3.90 | $ | 4.27 | $ | 4.09 | |||||||
Refining planned turnaround costs | $ | 0.65 | $ | 0.06 | $ | 0.30 | $ | 0.44 | |||||||
Refining depreciation and amortization(c) | $ | 1.16 | $ | 1.03 | $ | 1.10 | $ | 1.03 | |||||||
Refinery throughputs (mbpd):(d) | |||||||||||||||
Crude oil refined | 1,022 | 1,177 | 1,115 | 1,135 | |||||||||||
Other charge and blendstocks | 257 | 197 | 202 | 190 | |||||||||||
Total | 1,279 | 1,374 | 1,317 | 1,325 | |||||||||||
Sour crude oil throughput (percent) | 58 | 60 | 61 | 62 | |||||||||||
Sweet crude oil throughput (percent) | 42 | 40 | 39 | 38 | |||||||||||
Refined product yields (mbpd):(d) | |||||||||||||||
Gasoline | 569 | 622 | 566 | 574 | |||||||||||
Distillates | 400 | 467 | 428 | 432 | |||||||||||
Propane | 29 | 28 | 28 | 25 | |||||||||||
Feedstocks and special products | 280 | 260 | 291 | 291 | |||||||||||
Heavy fuel oil | 17 | 20 | 15 | 18 | |||||||||||
Asphalt | 15 | 16 | 20 | 19 | |||||||||||
Total | 1,310 | 1,413 | 1,348 | 1,359 | |||||||||||
Mid-Continent | |||||||||||||||
(per barrel) | |||||||||||||||
Refining & Marketing margin(a) | $ | 17.30 | $ | N/A | $ | 17.70 | $ | N/A | |||||||
Refining operating costs(b) | $ | 5.36 | $ | 5.73 | $ | 5.16 | $ | 5.21 | |||||||
Refining planned turnaround costs | $ | 0.42 | $ | 1.02 | $ | 0.66 | $ | 1.10 | |||||||
Refining depreciation and amortization(c) | $ | 1.45 | $ | 1.60 | $ | 1.51 | $ | 1.67 | |||||||
Refinery throughputs (mbpd):(e) | |||||||||||||||
Crude oil refined | 1,189 | 1,069 | 1,150 | 792 | |||||||||||
Other charge and blendstocks | 64 | 72 | 54 | 47 | |||||||||||
Total | 1,253 | 1,141 | 1,204 | 839 | |||||||||||
Sour crude oil throughput (percent) | 26 | 26 | 27 | 33 | |||||||||||
Sweet crude oil throughput (percent) | 74 | 74 | 73 | 67 | |||||||||||
Refined product yields (mbpd):(e) | |||||||||||||||
Gasoline | 674 | 617 | 632 | 444 | |||||||||||
Distillates | 434 | 398 | 413 | 279 | |||||||||||
Propane | 17 | 18 | 18 | 14 | |||||||||||
Feedstocks and special products | 44 | 36 | 60 | 43 | |||||||||||
Heavy fuel oil | 20 | 19 | 16 | 14 | |||||||||||
Asphalt | 66 | 58 | 67 | 50 | |||||||||||
Total | 1,255 | 1,146 | 1,206 | 844 | |||||||||||
West Coast | |||||||||||||||
(per barrel) | |||||||||||||||
Refining & Marketing margin(a) | $ | 19.44 | $ | N/A | $ | 16.03 | $ | N/A | |||||||
Refining operating costs(b) | $ | 8.84 | $ | 9.00 | $ | 8.19 | $ | 9.00 | |||||||
Refining planned turnaround costs | $ | 0.46 | $ | 1.86 | $ | 1.20 | $ | 1.86 | |||||||
Refining depreciation and amortization(c) | $ | 1.26 | $ | 1.26 | $ | 1.11 | $ | 1.26 | |||||||
Refinery throughputs (mbpd):(f) | |||||||||||||||
Crude oil refined | 620 | 611 | 637 | 154 | |||||||||||
Other charge and blendstocks | 65 | 70 | 64 | 17 | |||||||||||
Total | 685 | 681 | 701 | 171 | |||||||||||
Sour crude oil throughput (percent) | 61 | 72 | 63 | 72 | |||||||||||
Sweet crude oil throughput (percent) | 39 | 28 | 37 | 28 | |||||||||||
Refined product yields (mbpd):(f) | |||||||||||||||
Gasoline | 380 | 354 | 362 | 89 | |||||||||||
Distillates | 240 | 246 | 246 | 62 | |||||||||||
Propane | 10 | 7 | 9 | 2 | |||||||||||
Feedstocks and special products | 45 | 56 | 68 | 14 | |||||||||||
Heavy fuel oil | 24 | 29 | 24 | 7 | |||||||||||
Asphalt | — | — | — | — | |||||||||||
Total | 699 | 692 | 709 | 174 | |||||||||||
(a) | Sales revenue less cost of refinery inputs and purchased products, divided by refinery throughputs, excluding inter-refinery transfer volumes. The 2019 margin amounts exclude the biodiesel tax credit related to volumes blended in periods other than the fourth quarter and 2019. |
(b) | Includes refining major maintenance and operating costs. Excludes planned turnaround and depreciation and amortization expense. |
(c) | Purchase accounting measurement period adjustments related to prior periods are not allocated to regional depreciation and amortization. |
(d) | Includes inter-refinery transfer volumes of 113 mbpd and 69 mbpd for the three and twelve months ended December 31, 2019, respectively. |
(e) | Includes inter-refinery transfer volumes of 12 mbpd and 10 mbpd for the three and twelve months ended December 31, 2019, respectively. |
(f) | Includes inter-refinery transfer volumes of 23 mbpd and 31 mbpd for the three and twelve months ended December 31, 2019, respectively. |
Retail Operating Statistics (Unaudited) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Speedway fuel sales (millions of gallons) | 1,838 | 1,976 | 7,658 | 6,293 | |||||||||||
Direct dealer fuel sales (millions of gallons) | 625 | 644 | 2,554 | 644 | |||||||||||
Retail fuel margin (dollars per gallon)(a) | $ | 0.2865 | $ | 0.3235 | $ | 0.2426 | $ | 0.2230 | |||||||
Merchandise sales (in millions) | $ | 1,569 | $ | 1,479 | $ | 6,305 | $ | 5,232 | |||||||
Merchandise margin (in millions) | $ | 451 | $ | 417 | $ | 1,827 | $ | 1,486 | |||||||
Merchandise margin percent | 28.7 | % | 28.2 | % | 29.0 | % | 28.4 | % | |||||||
Same store gasoline sales volume (period over period)(b) | (4.2) | % | (0.7) | % | (3.3) | % | (1.5) | % | |||||||
Same store merchandise sales (period over period)(b)(c) | 4.7 | % | 6.5 | % | 5.4 | % | 4.2 | % | |||||||
Total convenience stores at period-end | 3,898 | 3,923 | |||||||||||||
Direct dealer locations at period-end | 1,068 | 1,065 | |||||||||||||
(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 December 31, | Twelve Months Ended December 31, | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||
Pipeline throughputs (mbpd)(a) | 5,231 | 5,612 | 5,245 | 4,177 | ||||||||||
Terminal throughput (mbpd) | 3,313 | 3,188 | 3,279 | 1,901 | ||||||||||
Gathering system throughput (million cubic feet per day)(b) | 6,192 | 5,893 | 6,094 | 4,779 | ||||||||||
Natural gas processed (million cubic feet per day)(b) | 8,759 | 8,161 | 8,661 | 7,199 | ||||||||||
C2 (ethane) + NGLs fractionated (mbpd)(b) | 557 | 501 | 534 | 464 | ||||||||||
(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) | |||||
December 31 | September 30 | ||||
(In millions) | 2019 | 2019 | |||
Cash and cash equivalents | $ | 1,527 | $ | 1,525 | |
MPC debt | 9,125 | 9,139 | |||
MPLX debt | 19,713 | 19,700 | |||
Total consolidated debt | 28,838 | 28,839 | |||
Redeemable noncontrolling interest | 968 | 968 | |||
Equity | 42,139 | 42,656 | |||
Shares outstanding | 649 | 650 | |||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Cash provided by operations | $ | 2,409 | $ | 2,727 | $ | 9,441 | $ | 6,158 | |||
Dividends paid per share | $ | 0.53 | $ | 0.46 | $ | 2.12 | $ | 1.84 | |||
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 Attributable to MPC to Adjusted Net Income Attributable to MPC | |||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||
Net income attributable to MPC | $ | 443 | $ | 951 | $ | 2,637 | $ | 2,780 | |||
Pre-tax adjustments: | |||||||||||
Purchase accounting related inventory effects | — | 759 | — | 759 | |||||||
MPLX debt extinguishment costs | — | 60 | — | 60 | |||||||
Equity method investment restructuring gains | (52) | — | (259) | — | |||||||
Transaction-related costs | 13 | 183 | 160 | 197 | |||||||
Litigation | — | — | 22 | — | |||||||
Impairments | 1,239 | — | 1,239 | — | |||||||
Pension settlement | — | — | — | 45 | |||||||
Purchase accounting - depreciation and amortization | — | — | (17) | — | |||||||
Biodiesel tax credit | (175) | — | (104) | — | |||||||
Out of period tax adjustment | — | — | 36 | — | |||||||
Tax impact of adjustments(a) | 9 | (236) | 22 | (250) | |||||||
NCI impact of adjustments | (459) | (22) | (457) | (22) | |||||||
Adjusted net income attributable to MPC | $ | 1,018 | $ | 1,695 | $ | 3,279 | $ | 3,569 | |||
Diluted earnings per share | $ | 0.68 | $ | 1.35 | $ | 3.97 | $ | 5.28 | |||
Adjusted diluted earnings per share(b) | $ | 1.56 | $ | 2.41 | $ | 4.94 | $ | 6.78 | |||
(a) | We generally tax effect pre-tax earnings adjustments to reported earnings using a combined federal and state statutory rate of approximately 24 percent. However, since the Midstream impairments, net of the portion attributable to NCI, and the biodiesel tax credit are largely non-taxable items, these adjustments are not tax affected for adjusted earnings purposes. |
(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. |
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 Attributable to MPC to Adjusted EBITDA | |||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||
December 31, | December 31, | ||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||
Net income attributable to MPC | $ | 443 | $ | 951 | $ | 2,637 | $ | 2,780 | |||
Plus (Less): | |||||||||||
Net interest and other financial costs | 302 | 385 | 1,247 | 1,003 | |||||||
Net income attributable to noncontrolling interests | (181) | 244 | 618 | 826 | |||||||
Provision for income taxes | 277 | 437 | 1,074 | 962 | |||||||
Depreciation and amortization | 978 | 874 | 3,638 | 2,490 | |||||||
Refining planned turnaround costs | 153 | 232 | 740 | 664 | |||||||
Equity method investment restructuring gains | (52) | — | (259) | — | |||||||
Purchase accounting inventory related effects | — | 759 | — | 759 | |||||||
Transaction-related costs | 13 | 183 | 160 | 197 | |||||||
Litigation | — | — | 22 | — | |||||||
Impairments | 1,239 | (8) | 1,239 | (9) | |||||||
Adjusted EBITDA | $ | 3,172 | $ | 4,057 | $ | 11,116 | $ | 9,672 | |||
Reconciliation of Segment Income From Operations to Segment Adjusted EBITDA and Adjusted EBITDA | |||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||
Refining & Marketing Segment | |||||||||||
Segment income from operations | $ | 912 | $ | 923 | $ | 2,367 | $ | 2,481 | |||
Add: Depreciation and amortization | 430 | 413 | 1,665 | 1,174 | |||||||
Refining planned turnaround costs | 153 | 232 | 740 | 664 | |||||||
Purchase accounting inventory effect, net of LIFO | — | 759 | — | 759 | |||||||
Segment Adjusted EBITDA | $ | 1,495 | $ | 2,327 | $ | 4,772 | $ | 5,078 | |||
Retail Segment | |||||||||||
Segment income from operations | $ | 477 | $ | 613 | $ | 1,582 | $ | 1,028 | |||
Add: Depreciation and amortization | 159 | 125 | 528 | 353 | |||||||
Segment EBITDA | $ | 636 | $ | 738 | $ | 2,110 | $ | 1,381 | |||
Midstream Segment | |||||||||||
Segment income from operations | $ | 889 | $ | 889 | $ | 3,594 | $ | 2,752 | |||
Add: Depreciation and amortization | 342 | 308 | 1,267 | 885 | |||||||
Segment EBITDA | $ | 1,231 | $ | 1,197 | $ | 4,861 | $ | 3,637 | |||
Segment Adjusted EBITDA | $ | 3,362 | $ | 4,262 | $ | 11,743 | $ | 10,096 | |||
Corporate and other unallocated items | (237) | (233) | (805) | (502) | |||||||
Add: Depreciation and amortization | 47 | 28 | 178 | 78 | |||||||
Adjusted EBITDA | $ | 3,172 | $ | 4,057 | $ | 11,116 | $ | 9,672 | |||
Refining & Marketing Margin
Refining margin is defined as sales revenue less the cost of refinery inputs and purchased products and excludes any LCM inventory market adjustment and other items reflected in the table below.
Reconciliation of Refining & Marketing Income from Operations to Refining & Marketing Margin | |||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||
Refining & Marketing income from operations | $ | 912 | $ | 923 | $ | 2,367 | $ | 2,481 | |||
Plus (Less): | |||||||||||
Refining operating costs(a) | 1,765 | 1,657 | 6,421 | 4,137 | |||||||
Refining depreciation and amortization | 382 | 377 | 1,465 | 1,089 | |||||||
Refining planned turnaround costs | 153 | 232 | 740 | 664 | |||||||
Distribution costs(b) | 1,299 | 1,329 | 5,117 | 3,512 | |||||||
Distribution depreciation and amortization | 48 | 36 | 200 | 85 | |||||||
Income from equity method investments | (1) | (1) | (11) | (15) | |||||||
Net gain on disposal of assets | — | 1 | (6) | (4) | |||||||
Other income | (13) | (62) | (43) | (125) | |||||||
Biodiesel tax credit | (153) | — | (93) | — | |||||||
Refining & Marketing margin | $ | 4,392 | $ | 4,492 | $ | 16,157 | $ | 11,824 | |||
Refining & Marketing margin by region: | |||||||||||
Gulf Coast | $ | 1,233 | $ | N/A | $ | 4,525 | $ | N/A | |||
Mid-Continent | 1,975 | N/A | 7,712 | N/A | |||||||
West Coast | 1,184 | N/A | 3,920 | N/A | |||||||
Refining & Marketing margin | $ | 4,392 | $ | N/A | $ | 16,157 | $ | N/A | |||
(a) | Includes refining major maintenance and operating costs. Excludes planned turnaround and depreciation and amortization expense. |
(b) | Includes fees paid to MPLX of $845 million, $603 million, $3,223 million and $2,278 million, respectively. Excludes depreciation and amortization expense. |
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) and excluding any LCM inventory market adjustment.
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 Total Margin | ||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | ||||||||||
Retail income from operations | $ | 477 | $ | 613 | $ | 1,582 | $ | 1,028 | ||||||
Plus (Less): | ||||||||||||||
Operating, selling, general and administrative expenses | 632 | 593 | 2,456 | 1,796 | ||||||||||
Depreciation and amortization | 159 | 125 | 528 | 353 | ||||||||||
Income from equity method investments | (24) | (23) | (82) | (74) | ||||||||||
Net gain on disposal of assets | (27) | (16) | (31) | (17) | ||||||||||
Other income | (35) | (2) | (44) | (7) | ||||||||||
Retail total margin | $ | 1,182 | $ | 1,290 | $ | 4,409 | $ | 3,079 | ||||||
Retail total margin: | ||||||||||||||
Fuel margin | $ | 706 | $ | 848 | $ | 2,478 | $ | 1,547 | ||||||
Merchandise margin | 451 | 417 | 1,827 | 1,486 | ||||||||||
Other margin | 25 | 25 | 104 | 46 | ||||||||||
Retail total margin | $ | 1,182 | $ | 1,290 | $ | 4,409 | $ | 3,079 | ||||||
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SOURCE Marathon Petroleum Corp.
Article Date
1/29/2020Marathon Petroleum Corp. to host 2020 annual meeting of shareholders
Source: PR Newswire
FINDLAY, Ohio, Jan. 27, 2020 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) announced today that its annual meeting of shareholders will take place April 29, 2020, at 10 a.m. EDT at the company's headquarters in Findlay, Ohio. Shareholders of record as of March 2, 2020, are entitled to notice of and to vote at the annual meeting.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests 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
Doug Wendt, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-to-host-2020-annual-meeting-of-shareholders-300992411.html
SOURCE Marathon Petroleum Corporation
Article Date
1/27/2020Marathon Petroleum Corp. Increases Quarterly Dividend
Source: PR Newswire
FINDLAY, Ohio, Jan. 27, 2020 /PRNewswire/ -- The board of directors of Marathon Petroleum Corp. (NYSE: MPC) has declared a dividend of $0.58 per share on common stock. The dividend is payable March 10, 2020, to shareholders of record as of the close of business February 19, 2020.
"The $0.58 dividend approved by our board represents a 9.4% increase to our previous quarterly dividend," said Gary R. Heminger, chairman and chief executive officer. "This dividend increase underscores our continuing commitment to returning capital to shareholders and our confidence in the cash flow generation capabilities of MPC."
Since the company became independent in 2011, capital returned to shareholders through both dividends and repurchase activity totals over $21 billion through year-end 2019.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests 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
Doug Wendt, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
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: 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; 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, 2018, and in Forms 10-Q, filed with the SEC. Copies of MPC's Form 10-K and Forms 10-Q are available on the SEC 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 and Forms 10-Q are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office.
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SOURCE Marathon Petroleum Corporation
Article Date
1/27/202012/16/2019 - Marathon Petroleum Corp. Announces Appointment of New Director and Provides Update on Strategic Initiatives
Marathon Petroleum Corp. Announces Appointment of New Director and Provides Update on Strategic Initiatives
Source: PR Newswire
FINDLAY, Ohio, Dec. 16, 2019 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) today announced that it has entered into an agreement with Elliott Management and will appoint Jonathan Z. Cohen to the company's board of directors, effective Dec. 16, 2019. Mr. Cohen will fill the seat of retiring executive and board member Greg Goff.
Cohen brings broad industry and financial experience to the board, including as a founder and executive of multiple energy-related businesses in the exploration and production, and midstream sectors. Among others, he was co-founder and vice chairman of Atlas Energy, Inc.; co-founder of Atlas Pipeline Partners, LP; and co-founder of the general partner of Arc Logistics Partners LP. Mr. Cohen currently serves as chairman of the board of directors of Falcon Minerals Corporation and previously served on the board of directors of Energen Corp. He received his Bachelor of Arts degree from the University of Pennsylvania and his Juris Doctor from American University School of Law.
"We are pleased to welcome Jonathan to the MPC board," said Gary R. Heminger, MPC chairman and chief executive officer. Cohen joins the board with valuable executive leadership experience in the energy and natural resources industry. "We look forward to his contributions as we continue executing on our strategic initiatives," said Heminger.
Mr. Cohen will serve on the special committee of the MPC board charged with evaluating options for the midstream business, as well as the special committee of the MPC board charged with overseeing the MPC CEO search process, which continues to progress.
Elliott's Senior Portfolio Manager John Pike and Associate Portfolio Manager Phillip Zeigler commented on Mr. Cohen's appointment to the board: "We believe Jonathan will be a positive addition to the MPC board and the special committees given his extensive energy experience and financial expertise. We look forward to the continued progress of the company's ongoing strategic initiatives and think Jonathan will add a valuable perspective to those efforts."
Additionally, MPC announced today its agreement to the addition of an independent advisor to serve in a non-voting capacity as advisor to the special committee of the MPC board evaluating midstream options. The MPC board expects to provide an update on the work of the special midstream committee in the first quarter of 2020.
As announced on Oct. 31, 2019, MPC intends to separate Speedway into an independent, publicly traded company, creating the largest U.S. listed convenience store operator. In an update, MPC today announced that work on the separation is progressing well and the company is targeting early fourth quarter 2020 for completion of the transaction, subject to customary closing conditions and regulatory approvals.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 which 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
Doug Wendt, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
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," "progress," "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: with respect to the planned Speedway separation, the ability to successfully complete the separation within the expected timeframe or at all, based on numerous factors including the macroeconomic environment, credit markets and equity markets, our ability to satisfy customary conditions, and the ability to achieve the strategic and other objectives discussed herein; with respect to the midstream review, our ability to achieve the strategic and other objectives related to the strategic review discussed herein; 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, 2018, and in Forms 10-Q, filed with the SEC. Copies of MPC's Form 10-K and Forms 10-Q are available on the SEC website, MPC's website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC'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.
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SOURCE Marathon Petroleum Corporation
Article Date
12/16/201912/10/2019 - Marathon Petroleum Corp. to Announce 2019 Fourth-Quarter and Full-Year Financial Results Jan. 29
Marathon Petroleum Corp. to Announce 2019 Fourth-Quarter and Full-Year Financial Results Jan. 29
Source: PR Newswire
FINDLAY, Ohio, Dec. 10, 2019 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) will host a conference call with analysts on Wednesday, Jan. 29, 2020, at 9:30 a.m. EST to discuss 2019 fourth-quarter and full-year financial results, which will be released earlier that day, and to provide an update on company operations.
Interested parties may listen to the conference call by visiting MPC's website at http://www.marathonpetroleum.com and clicking on "Events and Presentations" under the "Investors" tab. A replay of the conference call will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, also will be available online.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 which 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
Doug Wendt, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
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SOURCE Marathon Petroleum Corporation
Article Date
12/10/201910/31/2019 - Gary R. Heminger Announces Plan To Retire From Marathon Petroleum In 2020 After 45 Years
Gary R. Heminger Announces Plan To Retire From Marathon Petroleum In 2020 After 45 Years
Source: PR Newswire
FINDLAY, Ohio, Oct. 31, 2019 /PRNewswire/ -- Gary R. Heminger, Chairman and Chief Executive Officer of Marathon Petroleum Corporation (NYSE: MPC), today announced his plan to retire from MPC, where he has served as president and CEO since the company's spin-off from Marathon Oil in June 2011, and as chairman and CEO since 2016. He has also served as chairman and CEO of MPLX GP LLC since 2012.
Lead Independent Director James E. Rohr said: "On behalf of the Board of Directors, I am grateful to Gary for his distinguished and successful leadership of this great company, for which he has earned the unqualified and unanimous support of the board. We thank him also for his commitment to the board's request that he remain on for extended service following the announcement of the Andeavor combination to ensure the successful integration of the two companies." Mr. Heminger's retirement will come two full years after the announcement of the transaction.
Under Mr. Heminger's leadership, the company has continued to create value for shareholders. Since 2011, the company has delivered returns of 323%, outstripping the 183% growth of the S&P 500 over the same period, and returned nearly $21 billion to shareholders. As CEO, Mr. Heminger has headed several transformative acquisitions, resulting in Marathon Petroleum's current position amongst the highest performers in the refining, retail and midstream segments of the industry.
"I am very proud of the management team with whom I have served over the years", said Mr. Heminger, "and I thank them for their dedication, loyalty, and diligence that has fueled the steady growth of the company. Their expertise, and the commitment to superior execution by everyone at Marathon Petroleum, has resulted in MPC being considered one of the very best operators in the industry today."
The board has appointed a committee, led by Edward G. Galante, that will consider internal and external candidates to succeed Mr. Heminger. A nationwide search is currently under way.
Concurrent with Mr. Heminger's MPC retirement, he will also retire from MPLX GP LLC, the general partner of MPLX LP (NYSE: MPLX).
Mr. Heminger joined Marathon in 1975 and his experience spans more than four decades in a range of business groups and functions. As vice president of Business Development he was integral to the formation of Marathon Ashland Petroleum in January 1998, and was named senior vice president, Business Development in 1999. In January 2001, he was appointed executive vice president, Supply, Transportation and Marketing and, subsequently, president of Marathon Ashland Petroleum LLC, in September 2001. In addition, he was named executive vice president – Downstream of Marathon Oil Corporation and served as a member of Marathon's Executive Committee. Mr. Heminger was appointed president and chief executive officer of Marathon Petroleum Corporation on July 1, 2011, and elected Chairman of the board in 2016. Under Mr. Heminger's leadership, Marathon Petroleum was honored by Forbes magazine as the Best Employer of 2015.
Mr. Heminger earned a bachelor's degree in accounting from Tiffin University and a master's degree in business administration from the University of Dayton, Ohio; he is also a graduate of the Wharton School Advanced Management Program at the University of Pennsylvania. Mr. Heminger is a member of the Oxford Institute for Energy Studies; past chairman of the Board of Trustees of Tiffin University; and was recently elected Chairman of the Board of Trustees of The Ohio State University. He sits on the Boards of Directors and Executive Committees of the American Petroleum Institute (API) and American Fuel & Petrochemical Manufacturers (AFPM), and also on the Boards of Directors of Fifth Third Bancorp and PPG Industries, Inc.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 which 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
Doug Wendt, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Communications (419) 421-2521
Jamal Kheiry, Manager, Communications (419) 421-3312
Important Additional Information
MPC, its directors and certain of its executive officers may be deemed to be participants in the solicitation of proxies from MPC shareholders in connection with the matters to be considered at MPC's 2020 Annual Meeting. MPC intends to file a proxy statement with the SEC in connection with any such solicitation of proxies from MPC shareholders. MPC shareholders are encouraged to read any such proxy statement and accompanying white proxy card when they become available as they will contain important information. Information regarding the ownership of MPC's directors and executive officers in MPC shares, restricted shares and options is included in their SEC filings on Forms 3, 4 and 5. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the proxy statement and other materials to be filed with the SEC in connection with MPC's 2020 Annual Meeting. Information can also be found in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed with the SEC, and Current Reports on Form 8-K filed with the SEC. Shareholders will be able to obtain any proxy statement, any amendments or supplements to the proxy statement and other documents filed by MPC with the SEC for no charge on the SEC website, MPC's website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC's Investor Relations office.
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SOURCE Marathon Petroleum Corporation
Article Date
10/31/2019Marathon Petroleum Corporation And MPLX LP Announce The Retirement Of Gregory J. Goff And Appointment Of Michael J. Hennigan As CEO Of MPLX GP LLC
Source: PR Newswire
FINDLAY, Ohio, Oct. 31, 2019 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC) and MPLX LP (NYSE: MPLX) today announced that Gregory J. Goff, executive vice chairman of MPC and a member of each of the boards of directors of MPC and MPLX's general partner, has elected to retire effective December 31, 2019. In addition, Michael J. Hennigan, current president of MPLX GP LLC, has been appointed chief executive officer of the same organization, effective November 1, 2019.
Mr. Goff was named executive vice chairman upon the closing of MPC's strategic combination with Andeavor in October 2018, and he has served on the board of directors of both MPC and MPLX. Mr. Goff will retire from both boards concurrent with his retirement and Frank M. Semple will succeed Mr. Goff as a member of the MPC board.
"On behalf of Marathon Petroleum Corporation and the board of directors, we thank Greg for his leadership and service both to this company and the industry, and congratulate him on his well-deserved retirement," said Chairman and Chief Executive Officer Gary R. Heminger. "Greg and his team at Andeavor built a highly regarded organization with some of the most attractive refining, marketing and midstream assets in the western U.S.," continued Heminger.
Michael J. Hennigan named president and chief executive officer of MPLX GP LLC
Mr. Hennigan succeeds Gary R. Heminger as chief executive officer of the general partner of MPLX. Mr. Heminger will remain chairman of the board of MPLX GP LLC.
"Mike's strategic leadership has created tremendous value for both MPLX and MPC. His appointment as CEO of MPLX is well-earned and a natural step in positioning both organizations for continued success," said Mr. Heminger. "Mike has a very strong track record and I have every confidence in his ability to further optimize and leverage our portfolio."
Most recently, Mr. Hennigan has overseen the combination of MPLX with Andeavor Logistics LP, which was completed earlier this year. Before joining MPLX GP LLC as president in 2017, Mr. Hennigan was president, Crude, NGL and Refined Products of the general partner of Energy Transfer Partners LP. He earlier spent 36 years with Sunoco and Sunoco Logistics and held many senior refining operations positions between 1981 and 1996; he led the Strategic Planning function from 1996-2000. Subsequently, Hennigan was appointed executive in charge of Wholesale Marketing, and then senior vice president of Crude & Feedstock Supply and Trading. After serving as senior vice president, Business Transportation, from 2008-2012, he was appointed president and chief executive officer of Sunoco Logistics Partners LP.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 which 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.
About MPLX LP
MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.MPLX.com
Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Taryn Erie, Manager, Investor Relations
Doug Wendt, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Communications (419) 421-2521
Jamal Kheiry, Manager, Communications (419) 421-3312
Important Additional Information
MPC, its directors and certain of its executive officers may be deemed to be participants in the solicitation of proxies from MPC shareholders in connection with the matters to be considered at MPC's 2020 Annual Meeting. MPC intends to file a proxy statement with the SEC in connection with any such solicitation of proxies from MPC shareholders. MPC shareholders are encouraged to read any such proxy statement and accompanying white proxy card when they become available as they will contain important information. Information regarding the ownership of MPC's directors and executive officers in MPC shares, restricted shares and options is included in their SEC filings on Forms 3, 4 and 5. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the proxy statement and other materials to be filed with the SEC in connection with MPC's 2020 Annual Meeting. Information can also be found in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed with the SEC, and Current Reports on Form 8-K filed with the SEC. Shareholders will be able to obtain any proxy statement, any amendments or supplements to the proxy statement and other documents filed by MPC with the SEC for no charge on the SEC website, MPC's website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC's Investor Relations office.
View original content:SOURCE Marathon Petroleum Corporation; MPLX LP
Article Date
10/31/2019Marathon Petroleum Corp. Reports Third-Quarter Results
Source: PR Newswire
FINDLAY, Ohio, Oct. 31, 2019 /PRNewswire/ --
Marathon Petroleum Corp. (NYSE: MPC) today reported net income of $1.1 billion, or $1.66 per diluted share, for the third quarter 2019 compared to $737 million, or $1.62 per diluted share, for the third quarter of 2018. Excluding adjustments shown in the accompanying earnings release tables, third quarter 2019 adjusted net income was $1.1 billion, or $1.63 per diluted share, compared to $774 million, or $1.70 per diluted share, for the third quarter of 2018.
MPC returned $848 million of capital to shareholders during the third quarter of 2019, including $500 million in share repurchases.
"Our third-quarter results showcased our operational and commercial excellence," said Gary R. Heminger, chairman and chief executive officer. "Refining system utilization was 98% and leveraging our commercial expertise drove strong capture of 94% vs. market indicators. The retail segment delivered solid fuel margins and exceptional merchandise sales growth across our nationwide footprint, marking the 33rd consecutive quarter of same-store merchandise sales growth.
"The focus of the first year of our combination was execution to unlock unrealized value. We have made significant, observable progress improving mechanical availability and operational integrity, expanding our commercial capabilities, and reducing costs. We have converted roughly 550 of our targeted 700 retail stores and our synergy capture across the company is significantly ahead-of-schedule and on-track to exceed the targeted $600 million by year end."
"Our company has a history of bold strategic actions. Creating value for our shareholders has always been and remains a top priority. Today we announced our next step to unlocking future value: our intent to separate Speedway into an independent company. Additionally, we are forming a special committee of the Board of Directors to continue evaluating alternatives to enhance value across our midstream business."
Synergies
MPC realized $283 million of synergies in the third quarter. Some examples of realized synergies include: approximately $55 million from supply and distribution optimization, approximately $40 million from catalyst reformulation, and approximately $24 million from marketing-related enhancements. The company has realized $686 million of total synergies through the first nine months of the year, and is on track to exceed the $600 million of annual gross run-rate synergies targeted for the end of 2019.
Segment Results
In the third quarter of 2019, total income from operations was $2.0 billion compared to $1.4 billion for the third quarter of 2018. Adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) was $3.1 billion in the third quarter of 2019 compared to $2.2 billion for the same quarter last year. Adjusted EBITDA excludes refining planned turnaround costs of $164 million in the third quarter of 2019 and $197 million in the third quarter of 2018.
Three Months Ended | |||||||
(In millions) | 2019 | 2018 | |||||
Income from Operations by Segment | |||||||
Refining & Marketing | $ | 883 | $ | 666 | |||
Retail | 442 | 161 | |||||
Midstream | 919 | 679 | |||||
Items not allocated to segments: | |||||||
Corporate and other unallocated items | (198) | (99) | |||||
Transaction-related costs | (22) | (4) | |||||
Income from operations | $ | 2,024 | $ | 1,403 | |||
Midstream
Midstream segment income from operations, which primarily reflects the results of MPLX LP (NYSE: MPLX), was $919 million in the third quarter of 2019, compared with $679 million for the third quarter of 2018. The increase was due to growth across MPLX's businesses as well as contributions from legacy Andeavor Logistics. Segment EBITDA was $1.2 billion in the third quarter 2019 versus $884 million for the same quarter last year.
Retail
Retail segment income from operations was $442 million in the third quarter of 2019, compared with $161 million in the third quarter of 2018. The increase in earnings was largely related to the addition of the legacy Andeavor retail operations and higher fuel and merchandise margin contributions across the legacy Speedway system. Segment EBITDA was $555 million in the third quarter 2019 versus $237 million for the same quarter last year.
Retail fuel margin increased to 24.5 cents per gallon in the third quarter of 2019 from 16.5 cents per gallon in the third quarter of 2018. Same-store merchandise sales increased by 5.2 percent year-over-year and same-store gasoline sales volume decreased by 2.8 percent year-over-year.
Refining & Marketing (R&M)
R&M segment income from operations was $883 million in the third quarter of 2019 compared with $666 million in the same quarter of 2018. The year-over-year increase was primarily due to higher throughputs as a result of the Andeavor combination. R&M margin was $14.66 per barrel for the quarter with a clean product yield of 83 percent.
Segment adjusted EBITDA was $1.4 billion in the third quarter of 2019 versus $1.1 billion for the same quarter last year. Segment adjusted EBITDA excludes refinery planned turnaround costs which totaled $164 million in the third quarter of 2019. This compares to $197 million of turnaround-related costs in the third quarter of 2018.
Crude capacity utilization was 98 percent, resulting in total throughputs of 3.2 million barrels per day for the third quarter of 2019, which was 1.1 million barrels per day higher than the throughput for the third quarter of last year. The increase was primarily due to the addition of the Andeavor refineries.
Items Not Allocated to Segments and Other
Items not allocated to segments totaled $220 million of expenses in the third quarter of 2019 compared to $103 million in the third quarter of 2018. Third quarter 2019 results include $22 million of transaction-related expenses and the inclusion of legacy Andeavor corporate costs.
Strong Financial Position and Liquidity
As of Sept. 30, 2019, the company had $1.5 billion in cash and cash equivalents (excluding MPLX's cash and cash equivalents of $41 million), $5 billion available under a five-year bank revolving credit facility, $1 billion available under a 364-day bank revolving credit facility, and $750 million available under its trade receivables securitization facility.
Strategic Update
In a separate release this morning, MPC announced several strategic actions to enhance shareholder value. The company plans to separate its Speedway business into an independent company and also form a special committee of MPC's board to continue to evaluate alternatives to enhance value across the midstream business. Among other aspects, the special committee will analyze the strategic fit of assets with MPC, the ability to realize full valuation credit for midstream earnings and cash flow, balance sheet impacts including liquidity and credit ratings, transaction tax impacts, separation costs, and overall complexity.
During the quarter, the Gray Oak Pipeline project progressed and is expected to be placed in service by the end of 2019. The pipeline will provide crude oil transportation from the Permian and Eagle Ford Basins to the Texas Gulf Coast region, including Corpus Christi. The Gray Oak pipeline will connect to multiple terminals including the South Texas Gateway Terminal, which is expected to start up by mid-2020. The terminal is designed to have two deepwater docks, with initial storage capacity of approximately 7 million barrels and up to 800 mbpd of throughput capacity. MPC owns a 25 percent interest in both the Gray Oak Pipeline and the South Texas Gateway Terminal.
The Wink-to-Webster crude oil pipeline, in which MPLX has an equity interest, remains on schedule to be competed in the first half of 2021. The 36-inch diameter pipeline will originate in the Permian Basin and have destination points in the Houston market, including MPC's Galveston Bay refinery.
Also in the Permian, the Whistler Pipeline is being designed to transport approximately 2 billion cubic feet per day of natural gas from Waha, Texas to the Agua Dulce market in South Texas, ultimately reaching MPC's Galveston Bay refinery. MPLX has an equity interest in Whistler, which is expected to be placed in service in the second half of 2021.
The company also continues to progress the reversal of the Capline pipeline, with a purge of the mainline initiated in the fourth quarter. Once reversed, Capline will be capable of supplying discounted mid-continent and Canadian crude to St. James, Louisiana, which has a direct connection to MPC's Garyville refinery. Capline, which is partially owned by MPC and operated by MPLX, is expected to begin light crude service in the first half of 2021, with heavy crude service expected in 2022.
In the retail segment, Speedway continues to expand its brand through store conversions of the acquired Andeavor sites. As of September 30, 2019, Speedway had completed 379 store conversions in 2019, bringing the total number of conversions since the combination with Andeavor to 549. The company remains on track to complete 700 total cumulative store conversions by the end of 2019, including locations on the West Coast and in the Southwest.
MPC also continues to expand its presence in Mexico. In addition to significant exports from the Gulf Coast and investments in refined product distribution, the company is now supplying over 215 retail sites, including 171 that are branded ARCO as of September 30, 2019. The entire network of sites in Mexico provides additional product outlets for and enhanced integration with the refining business.
In preparation for the IMO fuel specification change, the company has completed infrastructure enhancements at multiple refineries to decrease on-purpose high sulfur fuel oil production and receive outside feedstocks into resid destruction units. The company progressed the completion of its Garyville crude revamp and coker drum replacement projects. The crude project is expected to be completed by the end of 2019. The coker project is expected to increase unit capacity by approximately 14 percent and remains on track to be completed in two phases, fourth quarter of 2019 and first quarter of 2020.
Construction continues on the Dickinson Renewable Diesel project, which remains on-track for planned completion in late 2020. The project will convert the Dickinson refinery into a 12 mbpd biorefinery that will process corn and soybean oil to produce renewable diesel. MPC intends to sell the renewable diesel into the California market to comply with the California Low Carbon Fuel Standard.
The Los Angeles Refinery Integration and Compliance (LARIC) project to physically connect the adjacent Carson and Wilmington facilities for cleaner and more efficient operations is nearing completion. The expansion of the Wilmington hydrocracker is on track to be completed in the first half of 2020.
Fourth Quarter 2019 Outlook | |||
Refining & Marketing Segment: | |||
Refining operating costs per barrel(a) | $ | 6.10 | |
Distribution costs (in millions) | $ | 1,300 | |
Refining planned turnaround costs (in millions) | $ | 185 | |
Depreciation and amortization (in millions) | $ | 425 | |
Refinery throughputs (mbpd): | |||
Crude oil refined | 2,775 | ||
Other charge and blendstocks | 175 | ||
Total | 2,950 | ||
(a) Includes refining major maintenance and operating costs. Excludes turnaround and depreciation and | |||
Retail Segment: | Range | ||||||
Fuel sales (millions of gallons) | 2,450 | 2,575 | |||||
Merchandise sales (in $ millions) | 1,500 | 1,600 | |||||
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 "2019 Third-Quarter Financial Results" 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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 which 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
Doug Wendt, 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. Discretionary free cash flow is defined as operating cash flow less maintenance and regulatory capital.
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: with respect to the planned Speedway separation, the ability to successfully complete the separation within the expected timeframe or at all, based on numerous factors including the macroeconomic environment, credit markets and equity markets, our ability to satisfy customary conditions, and the ability to achieve the strategic and other objectives discussed herein; with respect to the Midstream review, our ability to achieve the strategic and other objectives related to the strategic review discussed herein; 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 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 dividend increases; 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; 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, 2018, and in Forms 10-Q, filed with the SEC. Copies of MPC's Form 10-K and Forms 10-Q are available on the SEC 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 and Forms 10-Q are available on the SEC 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.
Important Additional Information
MPC, its directors and certain of its executive officers may be deemed to be participants in the solicitation of proxies from MPC shareholders in connection with the matters to be considered at MPC's 2020 Annual Meeting. MPC intends to file a proxy statement with the SEC in connection with any such solicitation of proxies from MPC shareholders. MPC shareholders are encouraged to read any such proxy statement and accompanying white proxy card when they become available as they will contain important information. Information regarding the ownership of MPC's directors and executive officers in MPC shares, restricted shares and options is included in their SEC filings on Forms 3, 4 and 5. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the proxy statement and other materials to be filed with the SEC in connection with MPC's 2020 Annual Meeting. Information can also be found in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed with the SEC, and Current Reports on Form 8-K filed with the SEC. Shareholders will be able to obtain any proxy statement, any amendments or supplements to the proxy statement and other documents filed by MPC with the SEC for no charge on the SEC website, MPC's website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC's Investor Relations office.
Consolidated Statements of Income (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions, except per-share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Revenues and other income: | |||||||||||||||
Sales and other operating revenues | $ | 31,043 | $ | 22,988 | $ | 92,857 | $ | 64,171 | |||||||
Income from equity method investments | 124 | 96 | 330 | 262 | |||||||||||
Net gain on disposal of assets | 4 | 1 | 222 | 6 | |||||||||||
Other income | 31 | 47 | 96 | 122 | |||||||||||
Total revenues and other income | 31,202 | 23,132 | 93,505 | 64,561 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of revenues (excludes items below) | 27,300 | 20,606 | 82,942 | 57,772 | |||||||||||
Depreciation and amortization | 855 | 555 | 2,660 | 1,616 | |||||||||||
Selling, general and administrative expenses | 833 | 445 | 2,618 | 1,271 | |||||||||||
Other taxes | 190 | 123 | 550 | 348 | |||||||||||
Total costs and expenses | 29,178 | 21,729 | 88,770 | 61,007 | |||||||||||
Income from operations | 2,024 | 1,403 | 4,735 | 3,554 | |||||||||||
Net interest and other financial costs | 317 | 240 | 945 | 618 | |||||||||||
Income before income taxes | 1,707 | 1,163 | 3,790 | 2,936 | |||||||||||
Provision for income taxes | 340 | 222 | 797 | 525 | |||||||||||
Net income | 1,367 | 941 | 2,993 | 2,411 | |||||||||||
Less net income attributable to: | |||||||||||||||
Redeemable noncontrolling interest | 20 | 19 | 61 | 55 | |||||||||||
Noncontrolling interests | 252 | 185 | 738 | 527 | |||||||||||
Net income attributable to MPC | $ | 1,095 | $ | 737 | $ | 2,194 | $ | 1,829 | |||||||
Per-share data | |||||||||||||||
Basic: | |||||||||||||||
Net income attributable to MPC per share | $ | 1.67 | $ | 1.63 | $ | 3.31 | $ | 3.96 | |||||||
Weighted average shares: | 656 | 451 | 663 | 462 | |||||||||||
Diluted: | |||||||||||||||
Net income attributable to MPC per share | $ | 1.66 | $ | 1.62 | $ | 3.28 | $ | 3.92 | |||||||
Weighted average shares: | 660 | 456 | 668 | 466 | |||||||||||
Income Summary (Unaudited) | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
(In millions) | 2019(a) | 2018 | 2019(a) | 2018 | |||||||||||||
Income from Operations by segment | |||||||||||||||||
Refining & Marketing | $ | 883 | $ | 666 | $ | 1,455 | $ | 1,558 | |||||||||
Retail | 442 | 161 | 1,105 | 415 | |||||||||||||
Midstream | 919 | 679 | 2,705 | 1,863 | |||||||||||||
Items not allocated to segments: | |||||||||||||||||
Corporate and other unallocated items | (198) | (99) | (568) | (269) | |||||||||||||
Capline restructuring gain | — | — | 207 | — | |||||||||||||
Transaction-related costs(b) | (22) | (4) | (147) | (14) | |||||||||||||
Litigation | — | — | (22) | — | |||||||||||||
Impairments | — | — | — | 1 | |||||||||||||
Income from operations | 2,024 | 1,403 | 4,735 | 3,554 | |||||||||||||
Net interest and other financial costs | 317 | 240 | 945 | 618 | |||||||||||||
Income before income taxes | 1,707 | 1,163 | 3,790 | 2,936 | |||||||||||||
Provision for income taxes | 340 | 222 | 797 | 525 | |||||||||||||
Net income | 1,367 | 941 | 2,993 | 2,411 | |||||||||||||
Less net income attributable to: | |||||||||||||||||
Redeemable noncontrolling interest | 20 | 19 | 61 | 55 | |||||||||||||
Noncontrolling interests | 252 | 185 | 738 | 527 | |||||||||||||
Net income attributable to MPC | $ | 1,095 | $ | 737 | $ | 2,194 | $ | 1,829 | |||||||||
(a) Includes the results of Andeavor from the October 1, 2018 acquisition date forward. | |||||||||||||||||
(b) Includes costs related to the Andeavor acquisition including financial advisor and legal fees, employee | |||||||||||||||||
Capital Expenditures and Investments (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2019(a) | 2018 | 2019(a) | 2018 | |||||||||||
Refining & Marketing | $ | 561 | $ | 226 | $ | 1,385 | $ | 613 | |||||||
Retail | 177 | 98 | 370 | 225 | |||||||||||
Midstream | 783 | 593 | 2,420 | 1,676 | |||||||||||
Corporate and Other(b) | 62 | 28 | 141 | 97 | |||||||||||
Total | $ | 1,583 | $ | 945 | $ | 4,316 | $ | 2,611 | |||||||
(a) Includes the results of Andeavor from the October 1, 2018 acquisition date forward. | |||||||||||||||
(b) Includes capitalized interest of $32 million, $21 million, $97 million and $55 million, respectively. | |||||||||||||||
Refining & Marketing Operating Statistics (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(per barrel) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Refining & Marketing margin(a) | $ | 14.66 | $ | 14.25 | $ | 13.72 | $ | 13.48 | |||||||
Less: | |||||||||||||||
Refining operating costs(b) | 5.44 | 4.25 | 5.45 | 4.55 | |||||||||||
Distribution costs(c) | 4.31 | 4.17 | 4.48 | 4.02 | |||||||||||
Other(d) | (0.05) | (0.17) | (0.05) | (0.15) | |||||||||||
Refining planned turnaround costs | 0.56 | 1.06 | 0.69 | 0.80 | |||||||||||
Depreciation and amortization | 1.45 | 1.38 | 1.46 | 1.40 | |||||||||||
Purchase accounting - depreciation and amortization(e) | (0.09) | — | (0.01) | — | |||||||||||
Refining & Marketing segment income | $ | 3.04 | $ | 3.56 | $ | 1.70 | $ | 2.86 | |||||||
Refining & Marketing refined product sales volume (mbpd)(f) | 3,706 | 2,382 | 3,730 | 2,346 | |||||||||||
Crude oil capacity utilization (percent)(g) | 98 | 97 | 97 | 97 | |||||||||||
Refinery throughputs (mbpd):(h) | |||||||||||||||
Crude oil refined | 2,969 | 1,833 | 2,925 | 1,819 | |||||||||||
Other charge and blendstocks | 187 | 199 | 200 | 173 | |||||||||||
Total | 3,156 | 2,032 | 3,125 | 1,992 | |||||||||||
Sour crude oil throughput (percent) | 47 | 52 | 49 | 53 | |||||||||||
Sweet crude oil throughput (percent) | 53 | 48 | 51 | 47 | |||||||||||
Refined product yields (mbpd):(h) | |||||||||||||||
Gasoline | 1,553 | 942 | 1,538 | 942 | |||||||||||
Distillates | 1,103 | 676 | 1,091 | 659 | |||||||||||
Propane | 56 | 40 | 55 | 37 | |||||||||||
Feedstocks and special products | 334 | 313 | 345 | 294 | |||||||||||
Heavy fuel oil | 44 | 29 | 47 | 30 | |||||||||||
Asphalt | 106 | 73 | 90 | 68 | |||||||||||
Total | 3,196 | 2,073 | 3,166 | 2,030 | |||||||||||
(a) Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs. | |||||||||||||||
(b) Includes refining major maintenance and operating costs. Excludes planned turnaround and depreciation and | |||||||||||||||
(c) Includes fees paid to MPLX, on a per barrel throughput basis, of $2.74, $3.22, $2.79 and $3.08, respectively. | |||||||||||||||
(d) Includes income from equity method investments, net gain on disposal of assets and other income. | |||||||||||||||
(e) Reflects the cumulative effects related to a measurement period adjustment arising from the finalization of | |||||||||||||||
(f) Includes intersegment sales. | |||||||||||||||
(g) Based on calendar day capacity, which is an annual average that includes downtime for planned maintenance | |||||||||||||||
(h) Excludes inter-refinery volumes of 116 mbpd, 54 mbpd, 98 mbpd and 53 mbpd, respectively. | |||||||||||||||
Refining & Marketing Operating Statistics by Region (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Gulf Coast | |||||||||||||||
(per barrel) | |||||||||||||||
Refining & Marketing margin dollars(a) | $ | 11.26 | $ | N/A | $ | 9.46 | $ | N/A | |||||||
Refining operating costs(b) | $ | 4.23 | $ | 3.54 | $ | 4.05 | $ | 4.16 | |||||||
Refining planned turnaround costs | $ | 0.15 | $ | 0.30 | $ | 0.18 | $ | 0.57 | |||||||
Refining depreciation and amortization(c) | $ | 1.08 | $ | 1.03 | $ | 1.08 | $ | 1.03 | |||||||
Refinery throughputs (mbpd):(d) | |||||||||||||||
Crude oil refined | 1,115 | 1,150 | 1,146 | 1,121 | |||||||||||
Other charge and blendstocks | 203 | 204 | 183 | 187 | |||||||||||
Total | 1,318 | 1,354 | 1,329 | 1,308 | |||||||||||
Sour crude oil throughput (percent) | 62 | 63 | 61 | 62 | |||||||||||
Sweet crude oil throughput (percent) | 38 | 37 | 39 | 38 | |||||||||||
Refined product yields (mbpd):(d) | |||||||||||||||
Gasoline | 559 | 567 | 565 | 557 | |||||||||||
Distillates | 429 | 442 | 438 | 421 | |||||||||||
Propane | 27 | 27 | 27 | 24 | |||||||||||
Feedstocks and special products | 297 | 314 | 295 | 301 | |||||||||||
Heavy fuel oil | 14 | 16 | 15 | 18 | |||||||||||
Asphalt | 20 | 22 | 21 | 21 | |||||||||||
Total | 1,346 | 1,388 | 1,361 | 1,342 | |||||||||||
Mid-Continent | |||||||||||||||
(per barrel) | |||||||||||||||
Refining & Marketing margin(a) | $ | 17.42 | $ | N/A | $ | 17.69 | $ | N/A | |||||||
Refining operating costs(b) | $ | 4.88 | $ | 5.26 | $ | 5.08 | $ | 4.96 | |||||||
Refining planned turnaround costs | $ | 1.26 | $ | 2.37 | $ | 0.75 | $ | 1.13 | |||||||
Refining depreciation and amortization(c) | $ | 1.43 | $ | 1.68 | $ | 1.54 | $ | 1.70 | |||||||
Refinery throughputs (mbpd):(d) | |||||||||||||||
Crude oil refined | 1,197 | 683 | 1,137 | 698 | |||||||||||
Other charge and blendstocks | 48 | 49 | 51 | 39 | |||||||||||
Total | 1,245 | 732 | 1,188 | 737 | |||||||||||
Sour crude oil throughput (percent) | 27 | 34 | 27 | 37 | |||||||||||
Sweet crude oil throughput (percent) | 73 | 66 | 73 | 63 | |||||||||||
Refined product yields (mbpd):(d) | |||||||||||||||
Gasoline | 628 | 375 | 618 | 385 | |||||||||||
Distillates | 415 | 234 | 405 | 238 | |||||||||||
Propane | 19 | 13 | 19 | 13 | |||||||||||
Feedstocks and special products | 86 | 53 | 65 | 46 | |||||||||||
Heavy fuel oil | 14 | 13 | 15 | 12 | |||||||||||
Asphalt | 84 | 51 | 68 | 47 | |||||||||||
Total | 1,246 | 739 | 1,190 | 741 | |||||||||||
West Coast | |||||||||||||||
(per barrel) | |||||||||||||||
Refining & Marketing margin(a) | $ | 15.85 | $ | N/A | $ | 14.85 | $ | N/A | |||||||
Refining operating costs(b) | $ | 7.74 | $ | — | $ | 7.98 | $ | — | |||||||
Refining planned turnaround costs | $ | 0.02 | $ | — | $ | 1.45 | $ | — | |||||||
Refining depreciation and amortization(c) | $ | 1.08 | $ | — | $ | 1.06 | $ | — | |||||||
Refinery throughputs (mbpd):(d) | |||||||||||||||
Crude oil refined | 657 | — | 642 | — | |||||||||||
Other charge and blendstocks | 52 | — | 64 | — | |||||||||||
Total | 709 | — | 706 | — | |||||||||||
Sour crude oil throughput (percent) | 59 | — | 63 | — | |||||||||||
Sweet crude oil throughput (percent) | 41 | — | 37 | — | |||||||||||
Refined product yields (mbpd):(d) | |||||||||||||||
Gasoline | 366 | — | 355 | — | |||||||||||
Distillates | 259 | — | 248 | — | |||||||||||
Propane | 10 | — | 9 | — | |||||||||||
Feedstocks and special products | 60 | — | 76 | — | |||||||||||
Heavy fuel oil | 23 | — | 24 | — | |||||||||||
Asphalt | 2 | — | 1 | — | |||||||||||
Total | 720 | — | 713 | — | |||||||||||
(a) Sales revenue less cost of refinery inputs and purchased products, divided by refinery throughputs, excluding | |||||||||||||||
(b) Includes refining major maintenance and operating costs. Excludes planned turnaround and depreciation and | |||||||||||||||
(c) Purchase accounting measurement period adjustments related to prior periods are not allocated to regional | |||||||||||||||
(d) Includes inter-refinery transfer volumes. | |||||||||||||||
Retail Operating Statistics (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Speedway fuel sales (millions of gallons) | 1,992 | 1,474 | 5,820 | 4,317 | |||||||||||
Direct dealer fuel sales (millions of gallons) | 653 | N/A | 1,929 | N/A | |||||||||||
Retail fuel margin (dollars per gallon)(a) | $ | 0.2453 | $ | 0.1651 | $ | 0.2286 | $ | 0.1620 | |||||||
Merchandise sales (in millions) | $ | 1,703 | $ | 1,339 | $ | 4,736 | $ | 3,753 | |||||||
Merchandise margin (in millions) | $ | 498 | $ | 384 | $ | 1,376 | $ | 1,069 | |||||||
Merchandise margin percent | 29.2% | 28.7% | 29.1% | 28.5% | |||||||||||
Same store gasoline sales volume (period over period)(b) | (2.8)% | (1.2)% | (2.8)% | (1.8)% | |||||||||||
Same store merchandise sales (period over period)(b)(c) | 5.2% | 4.9% | 5.6% | 3.4% | |||||||||||
Total convenience stores at period-end | 3,931 | 2,745 | |||||||||||||
Direct dealer locations at period-end | 1,067 | N/A | |||||||||||||
(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 | Nine Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Pipeline throughputs (mbpd)(a) | 5,319 | 3,829 | 5,250 | 3,694 | |||||||||||
Terminal throughput (mbpd) | 3,292 | 1,474 | 3,267 | 1,468 | |||||||||||
Gathering system throughput (million cubic feet per day)(b) | 6,281 | 4,737 | 6,061 | 4,403 | |||||||||||
Natural gas processed (million cubic feet per day)(b) | 8,804 | 7,171 | 8,629 | 6,874 | |||||||||||
C2 (ethane) + NGLs fractionated (mbpd)(b) | 547 | 488 | 527 | 451 | |||||||||||
(a) Includes common-carrier pipelines and private pipelines contributed to MPLX. Excludes equity method affiliate | |||||||||||||||
(b) Includes amounts related to unconsolidated equity method investments on a 100% basis. | |||||||||||||||
Select Financial Data (Unaudited) | |||||||
(In millions) | September 30 | June 30 | |||||
Cash and cash equivalents | $ | 1,525 | $ | 1,247 | |||
MPC debt | 9,139 | 9,142 | |||||
MPLX debt | 19,700 | 14,036 | |||||
ANDX debt | — | 5,229 | |||||
Total consolidated debt | 28,839 | 28,407 | |||||
Redeemable noncontrolling interest | 968 | 1,005 | |||||
Equity | 42,656 | 43,061 | |||||
Shares outstanding | 650 | 660 | |||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cash provided by operations | $ | 2,787 | $ | 1,182 | $ | 7,032 | $ | 3,431 | |||||||
Dividends paid per share | $ | 0.53 | $ | 0.46 | $ | 1.59 | $ | 1.38 | |||||||
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 Attributable to MPC to Adjusted Net Income Attributable to MPC | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net income attributable to MPC | $ | 1,095 | $ | 737 | $ | 2,194 | $ | 1,829 | |||||||
Pre-tax adjustments: | |||||||||||||||
Capline restructuring gain | — | — | (207) | — | |||||||||||
Transaction-related costs | 22 | 4 | 147 | 14 | |||||||||||
Litigation | — | — | 22 | — | |||||||||||
Impairments | — | — | — | (1) | |||||||||||
Pension settlement | — | 45 | — | 45 | |||||||||||
Purchase accounting - depreciation and amortization(a) | (57) | — | (17) | — | |||||||||||
Out of period tax adjustment | — | — | 36 | — | |||||||||||
Tax impact of adjustments(b) | 7 | (12) | 13 | (14) | |||||||||||
NCI impact of adjustments | 6 | — | 2 | — | |||||||||||
Adjusted net income attributable to MPC | $ | 1,073 | $ | 774 | $ | 2,190 | $ | 1,873 | |||||||
Diluted earnings per share | $ | 1.66 | $ | 1.62 | $ | 3.28 | $ | 3.92 | |||||||
Adjusted diluted earnings per share(c) | $ | 1.63 | $ | 1.70 | $ | 3.27 | $ | 4.02 | |||||||
(a) Reflects the cumulative effects related to a measurement period adjustment arising from the finalization of | |||||||||||||||
(b) We generally tax effect taxable adjustments to reported earnings using a combined federal and state statutory | |||||||||||||||
(c) Weighted-average diluted shares outstanding and income allocated to participating securities, if applicable, in the | |||||||||||||||
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 and items not allocated to segment results. 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 Attributable to MPC to Adjusted EBITDA | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net income attributable to MPC | $ | 1,095 | $ | 737 | $ | 2,194 | $ | 1,829 | |||||||
Plus (Less): | |||||||||||||||
Net interest and other financial costs | 317 | 240 | 945 | 618 | |||||||||||
Net income attributable to noncontrolling interests | 272 | 204 | 799 | 582 | |||||||||||
Provision for income taxes | 340 | 222 | 797 | 525 | |||||||||||
Depreciation and amortization | 855 | 555 | 2,660 | 1,616 | |||||||||||
Refining planned turnaround costs | 164 | 197 | 587 | 432 | |||||||||||
Capline restructuring gain | — | — | (207) | — | |||||||||||
Transaction-related costs | 22 | 4 | 147 | 14 | |||||||||||
Litigation | — | — | 22 | — | |||||||||||
Impairments | — | — | — | (1) | |||||||||||
Adjusted EBITDA | $ | 3,065 | $ | 2,159 | $ | 7,944 | $ | 5,615 | |||||||
Reconciliation of Segment Income From Operations to Segment Adjusted EBITDA and Adjusted EBITDA | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Refining & Marketing Segment | |||||||||||||||
Segment income from operations | $ | 883 | $ | 666 | $ | 1,455 | $ | 1,558 | |||||||
Add: Depreciation and amortization | 397 | 257 | 1,235 | 761 | |||||||||||
Refining planned turnaround costs | 164 | 197 | 587 | 432 | |||||||||||
Segment Adjusted EBITDA | $ | 1,444 | $ | 1,120 | $ | 3,277 | $ | 2,751 | |||||||
Retail Segment | |||||||||||||||
Segment income from operations | $ | 442 | $ | 161 | $ | 1,105 | $ | 415 | |||||||
Add: Depreciation and amortization | 113 | 76 | 369 | 228 | |||||||||||
Segment EBITDA | $ | 555 | $ | 237 | $ | 1,474 | $ | 643 | |||||||
Midstream Segment | |||||||||||||||
Segment income from operations | $ | 919 | $ | 679 | $ | 2,705 | $ | 1,863 | |||||||
Add: Depreciation and amortization | 300 | 205 | 925 | 577 | |||||||||||
Segment EBITDA | $ | 1,219 | $ | 884 | $ | 3,630 | $ | 2,440 | |||||||
Segment Adjusted EBITDA | $ | 3,218 | $ | 2,241 | $ | 8,381 | $ | 5,834 | |||||||
Corporate and other unallocated items | (198) | (99) | (568) | (269) | |||||||||||
Add: Depreciation and amortization | 45 | 17 | 131 | 50 | |||||||||||
Adjusted EBITDA | $ | 3,065 | $ | 2,159 | $ | 7,944 | $ | 5,615 | |||||||
Refining & Marketing Margin
Refining margin is defined as sales revenue less the cost of refinery inputs and purchased products and excludes any LCM inventory market adjustment.
Reconciliation of Refining & Marketing Income from Operations to Refining & Marketing Margin | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Refining & Marketing income from operations | $ | 883 | $ | 666 | $ | 1,455 | $ | 1,558 | |||||||
Plus (Less): | |||||||||||||||
Refining operating costs(a) | 1,577 | 795 | 4,656 | 2,480 | |||||||||||
Refining depreciation and amortization | 328 | 241 | 1,083 | 712 | |||||||||||
Refining planned turnaround costs | 164 | 197 | 587 | 432 | |||||||||||
Distribution costs(b) | 1,251 | 780 | 3,818 | 2,183 | |||||||||||
Distribution depreciation and amortization | 69 | 16 | 152 | 49 | |||||||||||
Income from equity method investments | (6) | (7) | (10) | (14) | |||||||||||
Net gain on disposal of assets | — | (1) | (6) | (5) | |||||||||||
Other income | (8) | (24) | (30) | (63) | |||||||||||
Refining & Marketing margin | $ | 4,258 | $ | 2,663 | $ | 11,705 | $ | 7,332 | |||||||
Refining & Marketing margin by region: | |||||||||||||||
Gulf Coast | $ | 1,285 | $ | N/A | $ | 3,292 | $ | N/A | |||||||
Mid-Continent | 1,977 | N/A | 5,687 | N/A | |||||||||||
West Coast | 996 | N/A | 2,726 | N/A | |||||||||||
Refining & Marketing margin | $ | 4,258 | $ | N/A | $ | 11,705 | $ | N/A | |||||||
(a) Includes refining major maintenance and operating costs. Excludes planned turnaround and depreciation and amortization expense. | |||||||||||||||
(b) Includes fees paid to MPLX of $794 million, $601 million, $2,378 million and $1,675 million, respectively. Excludes depreciation and amortization expense. | |||||||||||||||
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) and excluding any LCM inventory market adjustment.
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 Total Margin | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Retail income from operations | $ | 442 | $ | 161 | $ | 1,105 | $ | 415 | |||||||
Plus (Less): | |||||||||||||||
Operating, selling, general and administrative expenses | 644 | 418 | 1,824 | 1,203 | |||||||||||
Depreciation and amortization | 113 | 76 | 369 | 228 | |||||||||||
Income from equity method investments | (20) | (18) | (58) | (51) | |||||||||||
Net gain on disposal of assets | (2) | (1) | (4) | (1) | |||||||||||
Other income | (3) | (2) | (9) | (5) | |||||||||||
Retail total margin | $ | 1,174 | $ | 634 | $ | 3,227 | $ | 1,789 | |||||||
Retail total margin: | |||||||||||||||
Fuel margin | $ | 649 | $ | 243 | $ | 1,772 | $ | 699 | |||||||
Merchandise margin | 498 | 384 | 1,376 | 1,069 | |||||||||||
Other margin | 27 | 7 | 79 | 21 | |||||||||||
Retail total margin | $ | 1,174 | $ | 634 | $ | 3,227 | $ | 1,789 | |||||||
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-reports-third-quarter-results-300948965.html
SOURCE Marathon Petroleum Corporation
Article Date
10/31/2019Marathon Petroleum Provides Update On Strategic Review To Enhance Shareholder Value
Source: PR Newswire
FINDLAY, Ohio, Oct. 31, 2019 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC) today announced its intention to separate Speedway into an independent, publicly traded company. Independent Speedway will consist of MPC's company-owned retail store operations with an expected 2019 EBITDA of approximately $1.5 billion. MPC will retain its direct-dealer business, with an expected 2019 EBITDA of approximately $0.4 billion, which is also included in the Retail segment as currently reported. As part of the Speedway separation process, MPC will also initiate a nationwide search for a Speedway CEO from both internal and external sources.
"Today's announcement to separate Speedway will create a new independent company that is well-positioned to achieve sustained growth and create substantial shareholder value," said MPC Chairman and Chief Executive Officer Gary R. Heminger. "We have built Speedway into an exceptional business. Over the past eight years we have grown Speedway nearly four-fold from roughly $400 million of annual EBITDA to approximately $1.5 billion. Speedway has delivered leading same-store merchandise growth, fuel margins, and profitability – and has significant opportunities for further growth. With a potential enterprise value of $15 billion to $18 billion for standalone Speedway, we believe this transaction will unlock significant value for MPC shareholders and form the basis of a compelling value proposition for future Speedway investors." Independent Director John P. Surma will lead a committee of the Board to oversee the separation and CEO search processes.
Additionally, today MPC announced its intent to form a special committee of the Board to enhance its evaluation of potential value-creating options for the Midstream business. Among other aspects, the special Board committee will analyze the strategic fit of assets with MPC, the ability to realize full valuation credit for midstream earnings and cash flow, balance sheet impacts including liquidity and credit ratings, transaction tax impacts, separation costs, and overall complexity. Independent Director J. Mike Stice will lead the special committee charged with this enhanced evaluation of midstream alternatives.
MPC's plan to separate Speedway and to continue evaluating its Midstream business are key elements of the next phase in the company's long track record of taking transformative action to drive shareholder value. Since becoming a public company, MPC has returned nearly $21 billion in capital and has delivered approximately 323% of total shareholder returns, nearly double the S&P 500 returns during that period. "We will execute on the separation of Speedway and evaluate opportunities to unlock the value of Midstream, while continuing to optimize the larger combined business and progress the realization of our targeted synergies. Our goal has been, and continues to be, maximizing shareholder value over the long term," Heminger concluded.
Transaction Details
There can be no assurance regarding the ultimate timing of the separation of Speedway or that the proposed spin-off will be completed. Any transaction of this type is dependent on numerous factors that include the macroeconomic environment, credit markets and equity markets. Although the separation of Speedway will not require a shareholder vote, the separation will be subject to final approval by the MPC board and other customary conditions.
Investor Presentation and Conference Call
MPC will discuss the strategic review on its Third Quarter earnings conference call at 9:30 a.m. ET today. Interested parties may listen by visiting MPC's website at https://www.marathonpetroleum.com and clicking on the "2019 Third-Quarter MPC Financial Results" 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.
MPC issued an investor presentation, which provides additional detail on today's announcement. The presentation can be found by visiting 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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 which 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
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Jamal Kheiry, Manager, Communications (419) 421-3312
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," "progress," "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: with respect to the planned Speedway separation, the ability to successfully complete the separation within the expected timeframe or at all, based on numerous factors including the macroeconomic environment, credit markets and equity markets, our ability to satisfy customary conditions, and the ability to achieve the strategic and other objectives discussed herein; with respect to the Midstream review, our ability to achieve the strategic and other objectives related to the strategic review discussed herein; 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; 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; future levels of capital, environmental and maintenance expenditures; general and administrative and other expenses; business strategies, growth opportunities and expected investment; share repurchase authorizations, including the timing and amounts of any 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 dividend increases; 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; 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, 2018, and in Forms 10-Q, filed with the SEC. Copies of MPC's Form 10-K and Forms 10-Q are available on the SEC 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 and Forms 10-Q are available on the SEC 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.
Important Additional Information
MPC, its directors and certain of its executive officers may be deemed to be participants in the solicitation of proxies from MPC shareholders in connection with the matters to be considered at MPC's 2020 Annual Meeting. MPC intends to file a proxy statement with the SEC in connection with any such solicitation of proxies from MPC shareholders. MPC shareholders are encouraged to read any such proxy statement and accompanying white proxy card when they become available as they will contain important information. Information regarding the ownership of MPC's directors and executive officers in MPC shares, restricted shares and options is included in their SEC filings on Forms 3, 4 and 5. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the proxy statement and other materials to be filed with the SEC in connection with MPC's 2020 Annual Meeting. Information can also be found in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed with the SEC, and Current Reports on Form 8-K filed with the SEC. Shareholders will be able to obtain any proxy statement, any amendments or supplements to the proxy statement and other documents filed by MPC with the SEC for no charge on the SEC website, MPC's website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC's Investor Relations office.
Reconciliation of Segment Income
(In billions of dollars) | 2011 | 2019E | ||||
Speedway | ||||||
Income from operations | 0.3 | 1.1 | ||||
Depreciation and amortization | 0.1 | 0.4 | ||||
Speedway EBITDA | 0.4 | 1.5 | ||||
Direct Dealer | ||||||
Income from operations | - | 0.3 | ||||
Depreciation and amortization | - | 0.1 | ||||
Direct Dealer EBITDA | - | 0.4 | ||||
Retail Segment EBITDA | ||||||
Income from operations | 0.3 | 1.4 | ||||
Depreciation and amortization | 0.1 | 0.5 | ||||
Retail Segment EBITDA | 0.4 | 1.9 | ||||
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-provides-update-on-strategic-review-to-enhance-shareholder-value-300948967.html
SOURCE Marathon Petroleum Corporation
Article Date
10/31/2019Marathon Petroleum Corp. Announces Quarterly Dividend
Source: PR Newswire
FINDLAY, Ohio, Oct. 30, 2019 /PRNewswire/ -- The Marathon Petroleum Corp. (NYSE: MPC) board of directors has declared a dividend of $0.53 per share on common stock. The dividend is payable Dec. 10, 2019, to shareholders of record as of the close of business on Nov. 20, 2019.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests 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
Doug Wendt, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-announces-quarterly-dividend-300948387.html
SOURCE Marathon Petroleum Corporation
Article Date
10/30/2019Marathon Petroleum Responds To Elliott Management Proposal
Source: PR Newswire
FINDLAY, Ohio, Sept. 25, 2019 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC) today issued the following statement regarding the letter and presentation released by Elliott Management to MPC's Board of Directors.
MPC engages in regular communication with its shareholders and welcomes constructive input related to enhancing shareholder value. The company's Board of Directors and management team remain focused on delivering long-term value for shareholders, and will continue to take actions to achieve that objective.
MPC's management team and independent Board have a strong track record of taking action to deliver shareholder value. Since becoming an independent company in 2011, MPC has generated total shareholder return of 254%, exceeding the S&P, which has returned 174%. At the same time MPC has returned over $20 billion to shareholders through dividends and share repurchases.
Our strong operational results and cash flow generation have allowed us to build upon our commitment to returning capital to our shareholders, having returned approximately $850 million to our shareholders in the second quarter of 2019 and more than $2.1 billion year-to-date through a mix of dividends and share repurchases.
We look forward to maintaining an ongoing dialogue with our shareholders as we continue to evaluate opportunities to deliver more value for our shareholders. We will thoroughly evaluate Elliott's proposal and look forward to continuing our constructive engagement around these issues.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests in MPLX LP, a midstream company which 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
Doug Wendt, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
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, MPC's acquisition of Andeavor and include 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," "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: 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 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 or 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 or 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 any common stock repurchases; the adequacy of capital resources and liquidity, including but not limited to, availability of sufficient free cash flow to execute business plans and to effect any share repurchases or dividend increases, including within the expected timeframe and within the targeted amounts; 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; 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, 2018, filed with the SEC. Copies of MPC's Form 10-K are available on the SEC 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 are available on the SEC 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 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.
Important Additional Information
MPC, its directors and certain of its executive officers may be deemed to be participants in the solicitation of proxies from MPC shareholders in connection with the matters to be considered at MPC's 2020 Annual Meeting. MPC intends to file a proxy statement with the SEC in connection with any such solicitation of proxies from MPC shareholders. MPC shareholders are encouraged to read any such proxy statement and accompanying white proxy card when they become available as they will contain important information. Information regarding the ownership of MPC's directors and executive officers in MPC shares, restricted shares and options is included in their SEC filings on Forms 3, 4 and 5. More detailed information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be set forth in the proxy statement and other materials to be filed with the SEC in connection with MPC's 2020 Annual Meeting. Information can also be found in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed with the SEC, and Current Reports on Form 8-K filed with the SEC. Shareholders will be able to obtain any proxy statement, any amendments or supplements to the proxy statement and other documents filed by MPC with the SEC for no charge on the SEC website, MPC's website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC's Investor Relations office.
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-responds-to-elliott-management-proposal-300925422.html
SOURCE Marathon Petroleum Corporation
Article Date
9/25/2019Marathon Petroleum Corp. to Announce 2019 Third-Quarter Financial Results October 31
Source: PR Newswire
FINDLAY, Ohio, Sept. 16, 2019 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) will host a conference call with analysts on Thursday, October 31, at 9:30 a.m. EDT to discuss 2019 third-quarter financial results, which will be published earlier that day, and to provide an update on company operations.
Interested parties may listen to the conference call by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2019 Third-Quarter Financial Results" link. A replay of the conference call will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, also will be available online.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 which 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
Doug Wendt, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-to-announce-2019-third-quarter-financial-results-october-31-300918500.html
SOURCE Marathon Petroleum Corporation
Article Date
9/16/2019MPLX LP to Announce 2019 Third-Quarter Financial Results October 31
Source: PR Newswire
FINDLAY, Ohio, Sept. 16, 2019 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will host a conference call with analysts on Thursday, October 31, at 11 a.m. EDT to discuss 2019 third-quarter financial results, which will be released earlier that day, and to provide an update on company operations.
Interested parties may listen to the conference call by visiting MPLX's website at http://www.mplx.com and clicking on the "2019 Third-Quarter Financial Results" 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, also will be available online.
About MPLX LP
MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.MPLX.com.
Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President, Investor Relations
Jim Mallamaci, Manager, Investor Relations
Evan Barbosa, Manager, Investor Relations
Media Contacts:
Hamish Banks, Vice President, Corporate Communications (419) 421-2521
Jamal Kheiry, Manager, Corporate Communications (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/mplx-lp-to-announce-2019-third-quarter-financial-results-october-31-300918529.html
SOURCE MPLX LP
Article Date
9/16/2019Marathon Petroleum Corp. Reports Second-Quarter Results
Source: PR Newswire
FINDLAY, Ohio, Aug. 1, 2019 /PRNewswire/ --
Marathon Petroleum Corp. (NYSE: MPC) today reported net income of $1.1 billion, or $1.66 per diluted share, for the second quarter 2019 compared to $1.1 billion, or $2.27 per diluted share, for the second quarter of 2018. Excluding adjustments shown in the accompanying earnings release tables, second quarter 2019 adjusted net income was $1.1 billion, or $1.73 per diluted share, compared to $1.1 billion, or $2.29 per diluted share, for the second quarter of 2018.
MPC returned $852 million of capital to shareholders during the second quarter of 2019, including $500 million in share repurchases.
"This quarter we executed across our integrated business and progressed many strategic initiatives," said Gary R. Heminger, chairman and chief executive officer. "Our retail business, comprised of Speedway and our direct dealer network, had an exceptional quarter and demonstrated its ability to capture value. We simplified our midstream structure into one public company to high-grade commercial opportunities and progressed an impressive slate of high-return projects that are expected to enhance integration across our system. Lastly, today we also highlighted our continued focus on portfolio optimization, which could include asset divestitures to strategically streamline our integrated asset base.
"We are confident that strengthening business fundamentals throughout the year and the competitive advantages of our integrated business model will both support a growing cash flow profile," said Heminger.
Synergies
MPC realized $270 million of synergies in the second quarter. Some examples of realized synergies include: approximately $60 million of turnaround savings related to lower spending and incremental earnings from completing maintenance under budget and ahead of schedule, approximately $35 million from leveraging scale and logistics assets to optimize Canadian and Bakken supply sources, and approximately $10 million from improved catcracker yields at the company's Los Angeles refinery.
"Our team's impressive execution this quarter led to strong realized synergies," said Heminger. "Combined with our first quarter results, we have realized $403 million of synergies year to date. Our progress gives us great confidence in achieving our target of up to $600 million of annual gross run-rate synergies by year-end 2019 and $1.4 billion by the end of 2021."
Segment Results
In the second quarter of 2019, total income from operations was $2.0 billion compared to $1.7 billion for the second quarter of 2018. Adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA) was $3.2 billion in the second quarter of 2019 compared to $2.3 billion for the same quarter last year. Adjusted EBITDA excludes refining planned turnaround costs of $237 million in the second quarter of 2019 and $62 million in the second quarter of 2018.
Three Months Ended | |||||||
(In millions) | 2019 | 2018 | |||||
Income from Operations by Segment | |||||||
Refining & Marketing | $ | 906 | $ | 1,025 | |||
Retail | 493 | 159 | |||||
Midstream | 878 | 617 | |||||
Items not allocated to segments: | |||||||
Corporate and other unallocated items | (179) | (81) | |||||
Transaction-related costs | (34) | (10) | |||||
Litigation | (22) | — | |||||
Impairments | — | 1 | |||||
Income from operations | $ | 2,042 | $ | 1,711 | |||
Midstream
Midstream segment income from operations, which primarily reflects the results of MPLX LP (NYSE: MPLX) and Andeavor Logistics (ANDX), was $878 million in the second quarter of 2019, compared with $617 million for the second quarter of 2018. The increase was due to contributions of $223 million from ANDX and a $38 million increase driven primarily by growth across MPLX's businesses. Segment EBITDA was $1.2 billion in the second quarter 2019 versus $808 million for the same quarter last year.
Retail
Retail segment income from operations was $493 million in the second quarter of 2019, compared with $159 million in the second quarter of 2018. The increase in earnings was largely related to the addition of the legacy Andeavor retail operations and higher fuel and merchandise margin contributions across the legacy Speedway system. Segment EBITDA was $623 million in the second quarter 2019 versus $232 million for the same quarter last year.
Retail fuel margin increased to 26.7 cents per gallon in the second quarter of 2019 from 16.5 cents per gallon in the second quarter of 2018. Same-store merchandise sales increased by 6.3 percent year-over-year and same-store gasoline sales volume decreased by 2.4 percent year-over-year.
Refining & Marketing (R&M)
R&M segment income from operations was $906 million in the second quarter of 2019 compared with $1.0 billion in the same quarter of 2018. The year-over-year decrease was primarily driven by narrower crude differentials and lower product realizations. R&M margin was $15.24 per barrel for the quarter with a clean product yield of 82 percent.
Segment adjusted EBITDA was $1.6 billion in the second quarter of 2019 versus $1.3 billion for the same quarter last year. Segment adjusted EBITDA excludes refinery planned turnaround costs which totaled $237 million in the second quarter of 2019, as the company completed maintenance work at its Garyville, Los Angeles, and Martinez refineries. This compares to $62 million of turnaround related work in the second quarter of 2018.
Refinery capacity utilization was 97 percent, resulting in total throughputs of 3.1 million barrels per day for the second quarter, which was 1.1 million barrels per day higher than the throughput for the second quarter of last year. The increase was primarily due to the addition of the Andeavor refineries.
Items Not Allocated to Segments and Other
Items not allocated to segments totaled $235 million of expenses in the second quarter of 2019 compared to $90 million in the second quarter of 2018. Second quarter 2019 results include $34 million of transaction-related expenses, $22 million of litigation charges, and the inclusion of legacy Andeavor corporate costs.
Strong Financial Position and Liquidity
As of June 30, 2019, the company had $1.2 billion in cash and cash equivalents (excluding MPLX and ANDX's cash and cash equivalents of $7 million and $25 million, respectively), approximately $5 billion available under a revolving credit agreement, $1 billion available under a 364-day bank revolving credit facility and $750 million available under its trade receivables securitization facility.
Strategic Update
"This quarter saw significant advancement of strategic initiatives that we expect to enhance the strength and cash generation of our integrated model," said Heminger.
MPC combined its two midstream businesses, MPLX and ANDX, to simplify its midstream structure into one public company to high-grade commercial opportunities. At the same time, the company progressed numerous high-return projects that are expected to advance its strategy of creating integrated crude oil and natural gas systems from the Permian Basin to the U.S. Gulf Coast.
During the quarter, MPLX announced a final investment decision on the Whistler natural gas pipeline. MPLX also signed definitive agreements on the Wink-to-Webster crude oil pipeline, in which it is expected to have an equity interest. The Gray Oak Pipeline, in which MPC has a 25 percent equity interest, remains on schedule and is expected to be placed in service in the fourth quarter of 2019. These pipelines will help connect growing domestic production with global demand while also providing refining value to MPC's integrated business.
In the retail segment, Speedway continues to expand its brand through store conversions. As of June 30, 2019, Speedway had completed 237 store conversions in 2019, bringing the total number of conversions since the combination with Andeavor to 407. The company remains on track to complete 700 total cumulative store conversions by the end of 2019 including locations in the Southwest and on the West Coast. In July 2019, Speedway closed on its acquisition of 33 NOCO Express convenience stores in the Buffalo, New York area. The acquisition further expands Speedway's brand presence in this region while supporting MPC's Midwest product placement strategy and builds upon prior investments to maximize refinery utilization.
MPC also continues to expand its presence in Mexico. In addition to expanding its refined product distribution into this region, the company now has 155 ARCO stations in Mexico as of June 30, 2019, with plans to continue growing its brand. These stores provide additional product outlets and enhanced integration with the refining business.
In anticipation of the expected favorable uplift from the International Maritime Organization low-sulfur marine fuel rule, MPC has positioned its integrated business to optimize around changing market dynamics associated with the bunker fuel regulation change in 2020. The company's preparations have included resid destruction strategies and bunker blending logistics capabilities.
During the quarter, the company progressed the completion of its Garyville crude revamp and coker drum replacement projects. The crude project is expected to be completed by the end of 2019. The coker project is expected to increase unit capacity by approximately 14 percent and remains on track to be completed in two phases, fourth quarter of 2019 and first quarter of 2020. On the logistics side, the company finalized plans to optimize its coker feed and resid processing capabilities between refineries and ensured readiness of its blending and storage capabilities near its key coastal export facilities.
Lastly, the company highlighted its continued focus on portfolio optimization, which could include asset divestitures. Proceeds from any divestitures would be used for general purposes, such as investments in high-return projects as well as debt reduction.
Third Quarter 2019 Outlook | |||
Refining & Marketing Segment: | |||
Refining operating costs per barrel(a)(b) | $ | 5.90 | |
Distribution costs (in millions)(a) | $ | 1,300 | |
Refining planned turnaround costs (in millions)(a) | $ | 155 | |
Depreciation and amortization (in millions)(a) | $ | 420 | |
Refinery throughputs (mbpd): | |||
Crude oil refined | 2,900 | ||
Other charge and blendstocks | 150 | ||
Total | 3,050 | ||
(a) | We revised our Refining & Marketing segment supplemental reporting in the second quarter. Costs formerly included in MPC's direct operating costs category are now reported in three categories: operating costs, planned turnaround costs, and depreciation and amortization. We also report distribution costs which are primarily related to transportation and marketing of refined products, including fees paid to MPLX and ANDX. |
(b) | Includes refining major maintenance and operating costs. Excludes turnaround and depreciation and amortization expenses. |
Retail Segment: | Range | ||||||
Speedway fuel sales (millions of gallons) | 2,525 | 2,675 | |||||
Merchandise sales (in $ millions) | 1,625 | 1,725 | |||||
Corporate and unallocated items (in $ millions) | 190 | ||||||
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 "2019 Second-Quarter Financial Results" 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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 which 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
Doug Wendt, 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. Discretionary free cash flow is defined as operating cash flow less maintenance and regulatory capital.
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, MPC's acquisition of Andeavor and include 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "policy," "position," "potential," "predict," "priority," "project," "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: 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 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 or 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 or 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 any common stock repurchases; the adequacy of capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute business plans and to effect any share repurchases or dividend increases, including within the expected timeframe; 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; 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, 2018, filed with the SEC. Copies of MPC's Form 10-K are available on the SEC 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 are available on the SEC 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 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 | Six Months Ended | ||||||||||||||
(In millions, except per-share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Revenues and other income: | |||||||||||||||
Sales and other operating revenues | $ | 33,547 | $ | 22,317 | $ | 61,814 | $ | 41,183 | |||||||
Income from equity method investments | 107 | 80 | 206 | 166 | |||||||||||
Net gain on disposal of assets | 4 | 3 | 218 | 5 | |||||||||||
Other income | 30 | 45 | 65 | 75 | |||||||||||
Total revenues and other income | 33,688 | 22,445 | 62,303 | 41,429 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of revenues (excludes items below) | 29,682 | 19,655 | 55,642 | 37,166 | |||||||||||
Depreciation and amortization | 886 | 533 | 1,805 | 1,061 | |||||||||||
Selling, general and administrative expenses | 904 | 424 | 1,785 | 826 | |||||||||||
Other taxes | 174 | 122 | 360 | 225 | |||||||||||
Total costs and expenses | 31,646 | 20,734 | 59,592 | 39,278 | |||||||||||
Income from operations | 2,042 | 1,711 | 2,711 | 2,151 | |||||||||||
Net interest and other financial costs | 322 | 195 | 628 | 378 | |||||||||||
Income before income taxes | 1,720 | 1,516 | 2,083 | 1,773 | |||||||||||
Provision for income taxes | 353 | 281 | 457 | 303 | |||||||||||
Net income | 1,367 | 1,235 | 1,626 | 1,470 | |||||||||||
Less net income attributable to: | |||||||||||||||
Redeemable noncontrolling interest | 21 | 20 | 41 | 36 | |||||||||||
Noncontrolling interests | 240 | 160 | 486 | 342 | |||||||||||
Net income attributable to MPC | $ | 1,106 | $ | 1,055 | $ | 1,099 | $ | 1,092 | |||||||
Per-share data | |||||||||||||||
Basic: | |||||||||||||||
Net income attributable to MPC per share | $ | 1.67 | $ | 2.30 | $ | 1.65 | $ | 2.34 | |||||||
Weighted average shares: | 662 | 459 | 667 | 467 | |||||||||||
Diluted: | |||||||||||||||
Net income attributable to MPC per share | $ | 1.66 | $ | 2.27 | $ | 1.63 | $ | 2.31 | |||||||
Weighted average shares: | 666 | 464 | 672 | 472 | |||||||||||
Income Summary (Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(In millions) | 2019(a) | 2018 | 2019(a) | 2018 | |||||||||||
Income from Operations by segment | |||||||||||||||
Refining & Marketing | $ | 906 | $ | 1,025 | $ | 572 | $ | 892 | |||||||
Retail | 493 | 159 | 663 | 254 | |||||||||||
Midstream | 878 | 617 | 1,786 | 1,184 | |||||||||||
Items not allocated to segments: | |||||||||||||||
Corporate and other unallocated items | (179) | (81) | (370) | (170) | |||||||||||
Capline restructuring gain | — | — | 207 | — | |||||||||||
Transaction-related costs(b) | (34) | (10) | (125) | (10) | |||||||||||
Litigation | (22) | — | (22) | — | |||||||||||
Impairments | — | 1 | — | 1 | |||||||||||
Income from operations | 2,042 | 1,711 | 2,711 | 2,151 | |||||||||||
Net interest and other financial costs | 322 | 195 | 628 | 378 | |||||||||||
Income before income taxes | 1,720 | 1,516 | 2,083 | 1,773 | |||||||||||
Provision for income taxes | 353 | 281 | 457 | 303 | |||||||||||
Net income | 1,367 | 1,235 | 1,626 | 1,470 | |||||||||||
Less net income attributable to: | |||||||||||||||
Redeemable noncontrolling interest | 21 | 20 | 41 | 36 | |||||||||||
Noncontrolling interests | 240 | 160 | 486 | 342 | |||||||||||
Net income attributable to MPC | $ | 1,106 | $ | 1,055 | $ | 1,099 | $ | 1,092 | |||||||
(a) | Includes the results of Andeavor from the October 1, 2018 acquisition date forward. |
(b) | Includes costs related to the Andeavor acquisition including financial advisor and legal fees, employee severance, and other expenses. |
Capital Expenditures and Investments (Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(In millions) | 2019(a) | 2018 | 2019(a) | 2018 | |||||||||||
Refining & Marketing | $ | 430 | $ | 196 | $ | 824 | $ | 387 | |||||||
Retail | 120 | 88 | 193 | 127 | |||||||||||
Midstream | 814 | 601 | 1,637 | 1,083 | |||||||||||
Corporate and Other(b) | 38 | 33 | 79 | 69 | |||||||||||
Total | $ | 1,402 | $ | 918 | $ | 2,733 | $ | 1,666 | |||||||
(a) | Includes the results of Andeavor from the October 1, 2018 acquisition date forward. |
(b) | Includes capitalized interest of $34 million, $16 million, $65 million and $34 million, respectively. |
Refining & Marketing Operating Statistics (Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Refining & Marketing margin per barrel(a) | $ | 15.24 | $ | 15.40 | $ | 13.23 | $ | 13.08 | |||||||
Less: | |||||||||||||||
Refining operating costs per barrel(b) | 5.35 | 4.19 | 5.47 | 4.72 | |||||||||||
Distribution costs per barrel(c) | 4.48 | 4.17 | 4.56 | 3.93 | |||||||||||
Other per barrel(d) | (0.04) | (0.18) | (0.06) | (0.14) | |||||||||||
Refining planned turnaround costs per barrel | 0.83 | 0.33 | 0.75 | 0.66 | |||||||||||
Depreciation and amortization per barrel | 1.44 | 1.36 | 1.49 | 1.41 | |||||||||||
Refining & Marketing segment income per barrel | $ | 3.18 | $ | 5.53 | $ | 1.02 | $ | 2.50 | |||||||
Refining & Marketing refined product sales volume (mbpd)(e) | 3,814 | 2,392 | 3,742 | 2,327 | |||||||||||
Crude oil capacity utilization (percent)(f) | 97 | 100 | 96 | 96 | |||||||||||
Refinery throughputs (mbpd):(g) | |||||||||||||||
Crude oil refined | 2,937 | 1,878 | 2,902 | 1,812 | |||||||||||
Other charge and blendstocks | 198 | 160 | 207 | 160 | |||||||||||
Total | 3,135 | 2,038 | 3,109 | 1,972 | |||||||||||
Sour crude oil throughput (percent) | 47 | 55 | 49 | 53 | |||||||||||
Sweet crude oil throughput (percent) | 53 | 45 | 51 | 47 | |||||||||||
Refined product yields (mbpd):(g) | |||||||||||||||
Gasoline | 1,528 | 970 | 1,531 | 943 | |||||||||||
Distillates | 1,080 | 691 | 1,086 | 651 | |||||||||||
Propane | 57 | 40 | 55 | 35 | |||||||||||
Feedstocks and special products | 370 | 278 | 350 | 283 | |||||||||||
Heavy fuel oil | 51 | 27 | 48 | 31 | |||||||||||
Asphalt | 83 | 72 | 81 | 65 | |||||||||||
Total | 3,169 | 2,078 | 3,151 | 2,008 | |||||||||||
(a) | Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs. |
(b) | Includes refining major maintenance and operating costs. Excludes turnaround and depreciation and amortization expense. |
(c) | Includes fees paid to our two sponsored master limited partnerships, MPLX and ANDX, on a per barrel throughput basis, these fees were $2.80, $3.21, $2.81 and $3.01, respectively. Excludes depreciation and amortization expense. |
(d) | Includes income from equity method investments, net gain 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 102 mbpd, 64 mbpd, 88 mbpd and 53 mbpd, respectively. |
Refining & Marketing Operating Statistics by Region (Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Gulf Coast | |||||||||||||||
Refining & Marketing margin dollars per barrel(a) | $ | 9.32 | $ | N/A | $ | 8.58 | $ | N/A | |||||||
Refining operating costs per barrel(b) | $ | 4.03 | $ | 3.69 | $ | 3.95 | 4.47 | ||||||||
Refining planned turnaround costs per barrel | $ | 0.23 | $ | 0.08 | $ | 0.20 | 0.72 | ||||||||
Refining depreciation and amortization per barrel | $ | 1.03 | $ | 0.99 | $ | 1.08 | 1.04 | ||||||||
Refinery throughputs (mbpd):(c) | |||||||||||||||
Crude oil refined | 1,154 | 1,156 | 1,162 | 1,106 | |||||||||||
Other charge and blendstocks | 177 | 190 | 173 | 179 | |||||||||||
Total | 1,331 | 1,346 | 1,335 | 1,285 | |||||||||||
Sour crude oil throughput (percent) | 59 | 65 | 61 | 63 | |||||||||||
Sweet crude oil throughput (percent) | 41 | 35 | 39 | 37 | |||||||||||
Refined product yields (mbpd):(c) | |||||||||||||||
Gasoline | 564 | 570 | 569 | 552 | |||||||||||
Distillates | 440 | 458 | 443 | 410 | |||||||||||
Propane | 29 | 26 | 28 | 22 | |||||||||||
Feedstocks and special products | 293 | 290 | 293 | 294 | |||||||||||
Heavy fuel oil | 15 | 16 | 14 | 20 | |||||||||||
Asphalt | 21 | 23 | 21 | 20 | |||||||||||
Total | 1,362 | 1,383 | 1,368 | 1,318 | |||||||||||
Mid-Continent | |||||||||||||||
Refining & Marketing margin per barrel(a) | $ | 20.21 | $ | N/A | $ | 17.84 | $ | N/A | |||||||
Refining operating costs per barrel(b) | $ | 4.82 | $ | 4.70 | $ | 5.21 | $ | 4.80 | |||||||
Refining planned turnaround costs per barrel | $ | 0.27 | $ | 0.76 | $ | 0.47 | $ | 0.51 | |||||||
Refining depreciation and amortization per barrel | $ | 1.46 | $ | 1.66 | $ | 1.55 | $ | 1.71 | |||||||
Refinery throughputs (mbpd):(c) | |||||||||||||||
Crude oil refined | 1,155 | 722 | 1,106 | 706 | |||||||||||
Other charge and blendstocks | 48 | 34 | 52 | 34 | |||||||||||
Total | 1,203 | 756 | 1,158 | 740 | |||||||||||
Sour crude oil throughput (percent) | 28 | 39 | 27 | 38 | |||||||||||
Sweet crude oil throughput (percent) | 72 | 61 | 73 | 62 | |||||||||||
Refined product yields (mbpd):(c) | |||||||||||||||
Gasoline | 626 | 400 | 612 | 391 | |||||||||||
Distillates | 412 | 233 | 400 | 241 | |||||||||||
Propane | 20 | 14 | 19 | 13 | |||||||||||
Feedstocks and special products | 71 | 52 | 55 | 42 | |||||||||||
Heavy fuel oil | 16 | 11 | 16 | 11 | |||||||||||
Asphalt | 61 | 49 | 59 | 45 | |||||||||||
Total | 1,206 | 759 | 1,161 | 743 | |||||||||||
West Coast | |||||||||||||||
Refining & Marketing margin per barrel(a) | $ | 17.77 | $ | N/A | $ | 14.33 | $ | N/A | |||||||
Refining operating costs per barrel(b) | $ | 8.01 | $ | — | $ | 8.10 | $ | — | |||||||
Refining planned turnaround costs per barrel | $ | 2.80 | $ | — | $ | 2.18 | $ | — | |||||||
Refining depreciation and amortization per barrel | $ | 1.29 | $ | — | $ | 1.31 | $ | — | |||||||
Refinery throughputs (mbpd):(c) | |||||||||||||||
Crude oil refined | 628 | — | 634 | — | |||||||||||
Other charge and blendstocks | 75 | — | 70 | — | |||||||||||
Total | 703 | — | 704 | — | |||||||||||
Sour crude oil throughput (percent) | 58 | — | 66 | — | |||||||||||
Sweet crude oil throughput (percent) | 42 | — | 34 | — | |||||||||||
Refined product yields (mbpd):(c) | |||||||||||||||
Gasoline | 338 | — | 350 | — | |||||||||||
Distillates | 228 | — | 243 | — | |||||||||||
Propane | 8 | — | 8 | — | |||||||||||
Feedstocks and special products | 104 | — | 84 | — | |||||||||||
Heavy fuel oil | 24 | — | 24 | — | |||||||||||
Asphalt | 1 | — | 1 | — | |||||||||||
Total | 703 | — | 710 | — | |||||||||||
(a) | Sales revenue less cost of refinery inputs and purchased products, divided by refinery throughputs, excluding inter-refinery transfer volumes. |
(b) | Includes refining major maintenance and operating costs. Excludes turnaround and depreciation and amortization expense. |
(c) | Includes inter-refinery transfer volumes. |
Retail Operating Statistics (Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Speedway fuel sales (millions of gallons) | 1,957 | 1,450 | 3,828 | 2,843 | |||||||||||
Direct dealer fuel sales (millions of gallons) | 646 | N/A | 1,276 | N/A | |||||||||||
Retail fuel margin (dollars per gallon)(a) | $ | 0.2666 | $ | 0.1645 | $ | 0.2200 | $ | 0.1604 | |||||||
Merchandise sales (in millions) | $ | 1,620 | $ | 1,285 | $ | 3,033 | $ | 2,414 | |||||||
Merchandise margin (in millions) | $ | 471 | $ | 366 | $ | 878 | $ | 685 | |||||||
Merchandise margin percent | 29.1 | % | 28.5 | % | 29.0 | % | 28.4 | % | |||||||
Same store gasoline sales volume (period over period)(b) | (2.4) | % | (2.6) | % | (2.8) | % | (2.1) | % | |||||||
Same store merchandise sales (period over period)(b)(c) | 6.3 | % | 2.9 | % | 5.9 | % | 2.6 | % | |||||||
Total convenience stores at period-end | 3,913 | 2,744 | |||||||||||||
Direct dealer locations at period-end | 1,062 | N/A | |||||||||||||
(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 | Six Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Pipeline throughputs (mbpd)(a) | 5,178 | 3,789 | 5,214 | 3,625 | |||||||||||
Terminal throughput (mbpd) | 3,287 | 1,485 | 3,254 | 1,465 | |||||||||||
Gathering system throughput (million cubic feet per day)(b) | 5,948 | 4,295 | 5,950 | 4,233 | |||||||||||
Natural gas processed (million cubic feet per day)(b) | 8,535 | 6,850 | 8,528 | 6,740 | |||||||||||
C2 (ethane) + NGLs fractionated (mbpd)(b) | 520 | 439 | 517 | 432 | |||||||||||
(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, | March 31 | |||||
Cash and cash equivalents | $ | 1,247 | $ | 877 | |||
MPC debt | 9,142 | 9,150 | |||||
MPLX debt | 14,036 | 13,833 | |||||
ANDX debt | 5,229 | 5,132 | |||||
Total consolidated debt | 28,407 | 28,115 | |||||
Redeemable noncontrolling interest | 1,005 | 1,004 | |||||
Equity | 43,061 | 42,858 | |||||
Shares outstanding | 660 | 667 | |||||
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cash provided by operations | $ | 2,622 | $ | 2,386 | $ | 4,245 | $ | 2,249 | |||||||
Dividends paid per share | $ | 0.53 | $ | 0.46 | $ | 1.06 | $ | 0.92 | |||||||
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 Attributable to MPC to Adjusted Net Income Attributable to MPC | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net income attributable to MPC | $ | 1,106 | $ | 1,055 | $ | 1,099 | $ | 1,092 | |||||||
Pre-tax adjustments: | |||||||||||||||
Capline restructuring gain | — | — | (207) | — | |||||||||||
Transaction-related costs | 34 | 10 | 125 | 10 | |||||||||||
Litigation | 22 | — | 22 | — | |||||||||||
Impairments | — | (1) | — | (1) | |||||||||||
Out of period tax adjustment | — | — | 36 | — | |||||||||||
Tax impact of adjustments(a) | (14) | (2) | 14 | (2) | |||||||||||
Adjusted net income attributable to MPC | $ | 1,148 | $ | 1,062 | $ | 1,089 | $ | 1,099 | |||||||
Diluted earnings per share | $ | 1.66 | $ | 2.27 | $ | 1.63 | $ | 2.31 | |||||||
Adjusted diluted earnings per share(b) | $ | 1.73 | $ | 2.29 | $ | 1.62 | $ | 2.33 | |||||||
(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. |
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 and items not allocated to segment results. 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 Attributable to MPC to Adjusted EBITDA | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Net income attributable to MPC | $ | 1,106 | $ | 1,055 | $ | 1,099 | $ | 1,092 | |||||||
Plus (Less): | |||||||||||||||
Net interest and other financial costs | 322 | 195 | 628 | 378 | |||||||||||
Net income attributable to noncontrolling interests | 261 | 180 | 527 | 378 | |||||||||||
Provision for income taxes | 353 | 281 | 457 | 303 | |||||||||||
Depreciation and amortization | 886 | 533 | 1,805 | 1,061 | |||||||||||
Refining planned turnaround costs | 237 | 62 | 423 | 235 | |||||||||||
Capline restructuring gain | — | — | (207) | — | |||||||||||
Transaction-related costs | 34 | 10 | 125 | 10 | |||||||||||
Litigation | 22 | — | 22 | — | |||||||||||
Impairments | — | (1) | — | (1) | |||||||||||
Adjusted EBITDA | $ | 3,221 | $ | 2,315 | $ | 4,879 | $ | 3,456 | |||||||
Reconciliation of Segment Income From Operations to Segment Adjusted EBITDA and Adjusted EBITDA | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Refining & Marketing Segment | |||||||||||||||
Segment income from operations | $ | 906 | $ | 1,025 | $ | 572 | $ | 892 | |||||||
Add: Depreciation and amortization | 411 | 252 | 838 | 504 | |||||||||||
Refining planned turnaround costs | 237 | 62 | 423 | 235 | |||||||||||
Segment Adjusted EBITDA | $ | 1,554 | $ | 1,339 | $ | 1,833 | $ | 1,631 | |||||||
Retail Segment | |||||||||||||||
Segment income from operations | $ | 493 | $ | 159 | $ | 663 | $ | 254 | |||||||
Add: Depreciation and amortization | 130 | 73 | 256 | 152 | |||||||||||
Segment EBITDA | $ | 623 | $ | 232 | $ | 919 | $ | 406 | |||||||
Midstream Segment | |||||||||||||||
Segment income from operations | $ | 878 | $ | 617 | $ | 1,786 | $ | 1,184 | |||||||
Add: Depreciation and amortization | 318 | 191 | 625 | 372 | |||||||||||
Segment EBITDA | $ | 1,196 | $ | 808 | $ | 2,411 | $ | 1,556 | |||||||
Segment Adjusted EBITDA | $ | 3,373 | $ | 2,379 | $ | 5,163 | $ | 3,593 | |||||||
Corporate and other unallocated items | (179) | (81) | (370) | (170) | |||||||||||
Add: Depreciation and amortization | 27 | 17 | 86 | 33 | |||||||||||
Adjusted EBITDA | $ | 3,221 | $ | 2,315 | $ | 4,879 | $ | 3,456 | |||||||
Refining & Marketing Margin
Refining margin is defined as sales revenue less the cost of refinery inputs and purchased products and excludes any LCM inventory market adjustment.
Reconciliation of Refining & Marketing Income from Operations to Refining & Marketing Margin | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Refining & Marketing income from operations | $ | 906 | $ | 1,025 | $ | 572 | $ | 892 | |||||||
Plus (Less): | |||||||||||||||
Refining operating costs(a) | 1,527 | 776 | 3,079 | 1,685 | |||||||||||
Refining depreciation and amortization | 368 | 235 | 755 | 471 | |||||||||||
Refining planned turnaround costs | 237 | 62 | 423 | 235 | |||||||||||
Distribution costs(b) | 1,277 | 774 | 2,567 | 1,403 | |||||||||||
Distribution depreciation and amortization | 43 | 17 | 83 | 33 | |||||||||||
Income from equity method investments | (3) | (4) | (4) | (7) | |||||||||||
Net gain on disposal of assets | — | (3) | (6) | (4) | |||||||||||
Other income | (8) | (27) | (22) | (39) | |||||||||||
Refining & Marketing margin | $ | 4,347 | $ | 2,855 | $ | 7,447 | $ | 4,669 | |||||||
Refining & Marketing margin by region: | |||||||||||||||
Gulf Coast | $ | 1,090 | $ | N/A | $ | 2,007 | $ | N/A | |||||||
Mid-Continent | 2,193 | N/A | 3,710 | N/A | |||||||||||
West Coast | 1,064 | N/A | 1,730 | N/A | |||||||||||
Refining & Marketing margin | $ | 4,347 | $ | N/A | $ | 7,447 | $ | N/A | |||||||
(a) | Includes refining major maintenance and operating costs. Excludes turnaround and depreciation and amortization expense. |
(b) | Includes fees paid to our two sponsored master limited partnerships, MPLX and ANDX, of $798 million, $596 million, $1,584 million and $1,074 million, respectively. Excludes depreciation and amortization expense. |
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) and excluding any LCM inventory market adjustment.
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 Total Margin | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(in millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Retail income from operations | $ | 493 | $ | 159 | $ | 663 | $ | 254 | |||||||
Plus (Less): | |||||||||||||||
Operating, selling, general and administrative expenses | 597 | 401 | 1,180 | 785 | |||||||||||
Depreciation and amortization | 130 | 73 | 256 | 152 | |||||||||||
Income from equity method investments | (21) | (19) | (38) | (33) | |||||||||||
Net gain on disposal of assets | — | — | (2) | — | |||||||||||
Other income | (4) | (2) | (6) | (3) | |||||||||||
Retail total margin | $ | 1,195 | $ | 612 | $ | 2,053 | $ | 1,155 | |||||||
Retail total margin: | |||||||||||||||
Fuel margin | $ | 694 | $ | 239 | $ | 1,123 | $ | 456 | |||||||
Merchandise margin | 471 | 366 | 878 | 685 | |||||||||||
Other margin | 30 | 7 | 52 | 14 | |||||||||||
Retail total margin | $ | 1,195 | $ | 612 | $ | 2,053 | $ | 1,155 | |||||||
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-reports-second-quarter-results-300894819.html
SOURCE Marathon Petroleum Corporation
Article Date
8/1/2019Marathon Petroleum Corp. Announces Quarterly Dividend
Source: PR Newswire
FINDLAY, Ohio, July 31, 2019 /PRNewswire/ -- The Marathon Petroleum Corp. (NYSE: MPC) board of directors has declared a dividend of $0.53 per share on common stock. The dividend is payable Sept. 10, 2019, to shareholders of record as of the close of business on Aug. 21, 2019.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 which 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 Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Hamish Banks (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-announces-quarterly-dividend-300894195.html
SOURCE Marathon Petroleum Corp.
Article Date
7/31/2019Marathon Petroleum Corp. welcomes settlement of litigation with the office of the Attorney General of the Commonwealth of Kentucky
Source: PR Newswire
FINDLAY, Ohio, July 31, 2019 /PRNewswire/ -- Marathon Petroleum Corporation welcomes the resolution of the long-standing litigation with the Office of the Attorney General of the Commonwealth of Kentucky. Marathon Petroleum Company and Speedway dispute the allegations made against them by the Attorney General's office and expressly deny any liability, wrongdoing or violation of the law. With this resolution, and the Attorney General's Office acknowledgment of no admission of liability or wrongdoing, we welcome putting our differences behind us.
Marathon Petroleum Company and Speedway are proud to serve Kentuckians, and have done so for over 20 years, providing more than 3,500 jobs across the state. As a past Kentucky Manufacturer of the Year, a NE Region Business Conservation Partner of the year, and a trusted partner with emergency responders, the safety of our employees and the local communities is our priority. That's why we've joined with the Attorney General in recommending the distribution of the settlement funds for the purpose of improving rural roads, navigable waterways, and/or emergency management to mitigate the impact of weather events.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 which 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:
Kristina Kazarian (419) 421-2071
Media Contacts:
Hamish Banks (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-welcomes-settlement-of-litigation-with-the-office-of-the-attorney-general-of-the-commonwealth-of-kentucky-300894114.html
SOURCE Marathon Petroleum Corporation
Article Date
7/31/2019Marathon Petroleum Corp. to Announce 2019 Second-Quarter Financial Results Aug. 1; Conference Call Rescheduled to 9:30 a.m. EDT
Source: PR Newswire
FINDLAY, Ohio, July 2, 2019 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) has adjusted the time of its conference call with analysts on Thursday, August 1, to begin at 9:30 a.m. EDT. During the conference call, MPC executives will discuss 2019 second-quarter financial results, which will be released earlier that day, and provide an update on company operations.
Interested parties may listen to the conference call by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2019 Second-Quarter Financial Results" link. A replay of the conference call will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, also will be available online.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests in two midstream companies, MPLX LP and Andeavor Logistics LP, which own and operate 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:
Kristina Kazarian (419) 421-2071
Media Contacts:
Hamish Banks (419) 421-2521
Jamal Kheiry (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-to-announce-2019-second-quarter-financial-results-aug-1-conference-call-rescheduled-to-930-am-edt-300879361.html
SOURCE Marathon Petroleum Corporation
Article Date
7/2/2019MPLX LP to Announce 2019 Second-Quarter Financial Results August 1
Source: PR Newswire
FINDLAY, Ohio, July 1, 2019 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will host a conference call with analysts on Thursday, August 1, at 11 a.m. EDT to discuss 2019 second-quarter financial results, which will be released earlier that day, and to provide an update on company operations.
Interested parties may listen to the conference call by visiting MPLX's website at http://www.mplx.com and clicking on the "2019 Second-Quarter Financial Results" 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, also will be available online.
About MPLX LP
MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.mplx.com.
Investor Relations Contacts:
Kristina Kazarian (419) 421-2071
Media Contacts:
Hamish Banks (419) 421-2521
Jamal Kheiry (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/mplx-lp-to-announce-2019-second-quarter-financial-results-august-1-300878861.html
SOURCE MPLX LP
Article Date
7/1/2019Andeavor Logistics to Release 2019 Second-Quarter Financial Results August 1
Source: PR Newswire
FINDLAY, Ohio, July 1, 2019 /PRNewswire/ -- Andeavor Logistics LP (NYSE: ANDX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), plans to release its 2019 second-quarter earnings before the market opens on Thursday, August 1, 2019.
About Andeavor Logistics LP
Andeavor Logistics LP is a fee-based, full-service, diversified midstream logistics company, with integrated assets across the western and mid-continent regions of the United States. Andeavor Logistics operates through three business segments: Terminalling and Transportation, Gathering and Processing and Wholesale. The Terminalling and Transportation segment consists of marine terminals, refined product truck terminals, rail terminals, dedicated storage facilities and transportation pipelines. The Gathering and Processing segment consists of crude oil gathering systems and pipelines as well as natural gas gathering pipelines, processing facilities and fractionation facilities. The Wholesale segment consists of a fee-based fuel wholesale business. Andeavor Logistics is a Delaware limited partnership headquartered in Findlay, Ohio.
Investor Relations Contacts:
Kristina Kazarian (419) 421-2071
Media Contacts:
Hamish Banks (419) 421-2521
Jamal Kheiry (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/andeavor-logistics-to-release-2019-second-quarter-financial-results-august-1-300878862.html
SOURCE Andeavor Logistics LP
Article Date
7/1/2019Marathon Petroleum Corp. to Announce 2019 Second-Quarter Financial Results August 1
Source: PR Newswire
FINDLAY, Ohio, July 1, 2019 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) will host a conference call with analysts on Thursday, August 1, at 9 a.m. EDT to discuss 2019 second-quarter financial results, which will be released earlier that day, and to provide an update on company operations.
Interested parties may listen to the conference call by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2019 Second-Quarter Financial Results" link. A replay of the conference call will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, also will be available online.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests in two midstream companies, MPLX LP and Andeavor Logistics LP, which own and operate 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:
Kristina Kazarian (419) 421-2071
Media Contacts:
Hamish Banks (419) 421-2521
Jamal Kheiry (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-to-announce-2019-second-quarter-financial-results-august-1-300878849.html
SOURCE Marathon Petroleum Corporation
Article Date
7/1/2019MPLX LP Announces Unitholder Consent Deadline and Anticipated Closing Date of the Andeavor Logistics Acquisition
Source: PR Newswire
FINDLAY, Ohio, June 28, 2019 /PRNewswire/ -- MPLX LP (NYSE: MPLX) and Andeavor Logistics LP (NYSE: ANDX) today announced that the Board of Directors of the general partner of ANDX has set June 28, 2019 as the record date for determining holders of ANDX common units entitled to execute and deliver written consents with respect to the proposed acquisition. The consent process will conclude on July 29, 2019.
ANDX's general partner and a subsidiary of Marathon Petroleum Corporation (NYSE: MPC), which together own approximately 64% of ANDX's common units, have delivered written consents adopting and approving in all respects the Agreement and Plan of Merger, dated as of May 7, 2019 (the "Merger Agreement") and the transactions contemplated thereby. The delivery of these consents is sufficient to adopt the Merger Agreement and approve the acquisition of ANDX by MPLX, without the receipt of written consent from any other holder of ANDX units.
MPLX expects the closing of the acquisition to occur on July 30, 2019, subject to the satisfaction or waiver of the remaining customary conditions to closing. Given the anticipated timing of the closing of the transaction, the parties expect that ANDX common unitholders will not receive any future distributions from ANDX but instead will receive a second quarter 2019 distribution as and when declared by the Board of Directors of the general partner of MPLX (the "MPLX Board") with respect to the MPLX common units expected to be issued in connection with the merger. Additionally, the parties expect that ANDX Series A Preferred unitholders will not receive any future distributions from ANDX, but instead will receive the semi-annual distribution payable August 15, 2019, when declared by the MPLX Board, on MPLX Series B Preferred units expected to be issued in connection with the Merger.
About MPLX LP
MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.MPLX.com
About Andeavor Logistics LP
Andeavor Logistics LP is a fee-based, full-service, diversified midstream logistics company, with integrated assets across the western and mid-continent regions of the United States. Andeavor Logistics operates through three business segments: Terminalling and Transportation, Gathering and Processing and Wholesale. The Terminalling and Transportation segment consists of marine terminals, refined product truck terminals, rail terminals, dedicated storage facilities and transportation pipelines. The Gathering and Processing segment consists of crude oil gathering systems and pipelines as well as natural gas gathering pipelines, processing facilities and fractionation facilities. The Wholesale segment consists of a fee-based fuel wholesale business. Andeavor Logistics is a Delaware limited partnership headquartered in Findlay, Ohio.
Investor Relations Contacts:
Kristina Kazarian (419) 421-2071
Media Contacts:
Hamish Banks (419) 421-2521
Jamal Kheiry (419) 421-3312
Forward-Looking Statements
This communication contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP (MPLX) and Andeavor Logistics LP (ANDX). These forward-looking statements relate to, among other things, the proposed acquisition of ANDX by MPLX and include expectations, estimates and projections concerning the business and operations, financial priorities and strategic plans of the combined entity. 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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 companies' control and are difficult to predict. Factors that could cause MPLX's or ANDX's actual results to differ materially from those implied in the forward-looking statements include: the ability to complete the proposed transaction between MPLX and ANDX on the proposed terms and timetable; the ability to satisfy various conditions to the closing of the transaction contemplated by the merger agreement; the ability to obtain regulatory approvals for the proposed transaction on the proposed terms and schedule, and any conditions imposed on the combined entity in connection with the consummation of the proposed transaction; the risk that anticipated opportunities and any other synergies from or anticipated benefits of the proposed transaction may not be fully realized or may take longer to realize than expected, including whether the proposed transaction will be accretive within the expected timeframe or at all; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of ANDX or MPLX; the amount and timing of future distributions; negative capital market conditions, including an increase of the current yield on common units; the ability to achieve strategic and financial objectives, including with respect to distribution coverage, future distribution levels, proposed projects and completed transactions; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and access to debt on commercially reasonable terms, and the ability to successfully execute business plans, growth strategies and self-funding models; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects and planned investments, and the ability to obtain regulatory and other approvals with respect thereto; completion of midstream infrastructure by competitors; disruptions due to equipment interruption or failure, including electrical shortages and power grid failures; the suspension, reduction or termination of Marathon Petroleum Corporation's (MPC) obligations under MPLX's and ANDX's commercial agreements; modifications to financial policies, capital budgets, and earnings and distributions; the ability to manage disruptions in credit markets or changes to credit ratings; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations and/or enforcement actions initiated thereunder; adverse results in litigation; other risk factors inherent to MPLX's and ANDX's industry; risks related to MPC; and the factors set forth under the heading "Risk Factors" in MPLX's and ANDX's respective Annual Reports on Form 10-K for the year ended Dec. 31, 2018, filed with the Securities and Exchange Commission (SEC).
Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include: 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 as set forth above related to the acquisition of ANDX by MPLX; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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 or 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 any common stock repurchases; the adequacy of capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute business plans and to effect any share repurchases or dividend increases, including within the expected timeframe; 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; 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 or ANDX; 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, 2018, filed with the SEC.
We have based our forward-looking statements on our current expectations, estimates and projections about our 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 respective 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.
Additional Information and Where to Find It
In connection with the proposed acquisition, MPLX and ANDX have filed relevant materials with the SEC, including MPLX's registration statement on Form S-4 that includes a definitive consent statement and a prospectus and was declared effective by the SEC on June 28, 2109. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE DEFINITIVE CONSENT STATEMENT AND PROSPECTUS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final consent statement/prospectus will be sent to unitholders of ANDX. Investors and security holders will be able to obtain these documents free of charge at the SEC's website, www.sec.gov, from ANDX at its website, http://ir.andeavorlogistics.com, or by contacting ANDX's Investor Relations at (419) 421-2414, or from MPLX at its website, http://ir.mplx.com, or by contacting MPLX's Investor Relations at (419) 421-2414.
Participants in Solicitation
MPLX, ANDX, MPC and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of consents in respect of the proposed transaction. Information concerning MPLX's directors and executive officers is set forth in its Annual Report on Form 10-K for the year ended Dec. 31, 2018, which was filed with the SEC on Feb. 28, 2019. Information concerning ANDX's directors and executive officers is set forth in its Annual Report on Form 10-K for the year ended Dec. 31, 2018, which was filed with the SEC on Feb. 28, 2019. Information concerning MPC's executive officers is set forth in its Annual Report on Form 10-K for the year ended Dec. 31, 2018, which was filed with the SEC on Feb. 28, 2019. Information about MPC's directors is set forth in its Definitive Proxy Statement on Schedule 14A for its 2019 Annual Meeting of Shareholders, which was filed with the SEC on March 14, 2019. Investors and security holders will be able to obtain the documents free of charge from the sources indicated above, and with respect to MPC, from its website, https://www.marathonpetroleum.com/Investors/, or by contacting MPC's Investor Relations at (419) 421-2414. Additional information regarding the interests of such participants in the solicitation of consents in respect of the proposed transaction are included in the registration statement and consent statement/prospectus and other relevant materials filed with the SEC.
View original content:http://www.prnewswire.com/news-releases/mplx-lp-announces-unitholder-consent-deadline-and-anticipated-closing-date-of-the-andeavor-logistics-acquisition-300878105.html
SOURCE MPLX LP
Article Date
6/28/2019Marathon Petroleum Corp. Announces Retirement Of Speedway LLC President Anthony R. Kenney, Names Timothy T. Griffith As Successor
Source: PR Newswire
FINDLAY, Ohio, June 20, 2019 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) today announced that Anthony R. Kenney, president of MPC subsidiary Speedway LLC, will retire later this year after 43 years of dedicated service to the company. He will become executive vice president supporting the Speedway transition and other strategic projects until his retirement. Timothy T. Griffith, currently MPC's senior vice president and chief financial officer, has been named president of Speedway LLC. Griffith will begin his new role July 1.
Kenney began his career with the company in 1976 after graduating with a Bachelor of Science degree in accounting from Miami University of Ohio. In 1990, he transitioned to Emro Marketing Company, the predecessor of Speedway LLC, and has led the Speedway business since 2005. Under Kenney's leadership, Speedway has expanded from a Midwest-only brand into one of the nation's largest fuel and convenience store chains.
"Tony's expert leadership of Speedway over the past 14 years has grown our retail business into a nationwide network of nearly 4,000 company-owned and -operated stores," said MPC Chairman and Chief Executive Officer Gary R. Heminger. "We see tremendous growth potential for Speedway moving forward, thanks to Tony's leadership. His retirement is well-earned, and we wish him and his family the best."
Griffith joined MPC as vice president, Finance and Investor Relations, and treasurer in 2011. He assumed the role of senior vice president and chief financial officer in 2015. "The company will benefit from Tim's leadership at Speedway as we continue to explore new markets and pursue new customers in a competitive and evolving sector," said Heminger.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests in two midstream companies, MPLX LP and Andeavor Logistics LP, which own and operate 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:
Kristina Kazarian (419) 421-2071
Media Contacts:
Hamish Banks (419) 421-2521
Jamal Kheiry (419) 421-3312
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-announces-retirement-of-speedway-llc-president-anthony-r-kenney-names-timothy-t-griffith-as-successor-300872370.html
SOURCE Marathon Petroleum Corporation
Article Date
6/20/20196/20/2019 - Marathon Petroleum Corp. Appoints Donald C. Templin Executive Vice President And Chief Financial Officer
Marathon Petroleum Corp. Appoints Donald C. Templin Executive Vice President And Chief Financial Officer
Source: PR Newswire
FINDLAY, Ohio, June 20, 2019 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) today announced that Donald C. Templin, currently MPC's president of Refining, Marketing and Supply, has been appointed executive vice president and chief financial officer, effective July 1. Templin replaces Timothy T. Griffith as chief financial officer, after Griffith was appointed president of MPC subsidiary Speedway LLC.
Templin joined the company as senior vice president and chief financial officer in 2011, and also became chief financial officer of MPLX GP LLC in 2012. Since 2015, he has led segments of MPC's commercial business, most recently serving as president of Refining, Marketing and Supply since 2018, and as President of MPLX GP LLC from 2016 to 2017.
"Don's detailed understanding of our business segments and commercial value strengthens our ability to deliver our strategic plans and commitments," said Heminger. "This past year has been transformative for MPC, and Don has expertly guided our teams in managing the complexities of combining two large, successful companies. In his new role, I'm confident he will uncover further opportunities to capture value and unlock profitable growth."
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests in two midstream companies, MPLX LP and Andeavor Logistics LP, which own and operate 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:
Kristina Kazarian (419) 421-2071
Media Contacts:
Hamish Banks (419) 421-2521
Jamal Kheiry (419) 421-3312
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SOURCE Marathon Petroleum Corporation
Article Date
6/20/2019Marathon Petroleum Corp. Reports First-Quarter Results
Source: PR Newswire
FINDLAY, Ohio, May 8, 2019 /PRNewswire/ --
Marathon Petroleum Corp. (NYSE: MPC) today reported a first-quarter 2019 loss of $7 million, or $(0.01) per diluted share. First quarter 2019 earnings included a net benefit of $0.08 per diluted share related to a non-cash gain which was partially offset by transaction-related costs and prior period tax adjustments. This compares with income of $37 million, or $0.08 per diluted share, in the first quarter of 2018.
"Despite challenging refining market conditions, the stability of our Midstream and Retail segments helped our integrated business generate over $1.6 billion of operating cash flow during the quarter," said Gary R. Heminger, chairman and chief executive officer. "Throughout the quarter refining fundamentals improved, gasoline and distillate inventories rebalanced, and the April blended crack spread of $18.80 is more than double the first-quarter average. We expect positive dynamics across all three of our business segments to support growing cash flows throughout the remainder of 2019."
Heminger added, "One of our core objectives is growing profitability and creating competitive advantages. We continuously assess our project portfolio to ensure disciplined capital allocation. Based on our internal forecasts, the Garyville Coker 3 project no longer comfortably exceeds our internal hurdle rates for refining projects. Consequently, we have decided to remove the project from our investment plans."
The company remains committed to returning at least 50 percent of discretionary free cash flow to investors over the long term. MPC returned $1.2 billion in capital to shareholders during the first quarter of 2019, including $885 million in share repurchases.
MPLX LP (NYSE: MPLX) today announced that it has entered into a definitive merger agreement whereby MPLX will acquire Andeavor Logistics LP (NYSE: ANDX) in a unit-for-unit exchange. "This merger creates a leading, large-scale, diversified midstream company anchored by fee-based cash flows," added Heminger. "The combined entity will have an expanded geographic footprint with enhanced long-term growth opportunities in some of the best basins in the U.S. We are confident about the midstream growth and value-creation opportunities that exist across this combined platform."
Segment Results
In the first quarter of 2019, total income from operations was $669 million and adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA) was $1.5 billion. This compares to $440 million in income from operations and $1.0 billion of Adjusted EBITDA for the first quarter of 2018.
Three Months Ended | |||||||
(In millions) | 2019 | 2018 | |||||
Income (loss) from Operations by Segment | |||||||
Refining & Marketing | $ | (334) | $ | (133) | |||
Retail | 170 | 95 | |||||
Midstream | 908 | 567 | |||||
Items not allocated to segments: | |||||||
Corporate and other unallocated items | (191) | (89) | |||||
Capline restructuring gain | 207 | — | |||||
Transaction-related costs | (91) | — | |||||
Income from operations | $ | 669 | $ | 440 | |||
Refining & Marketing (R&M)
R&M segment loss from operations was $334 million in the first quarter of 2019 compared with a loss from operations of $133 million in the same quarter of 2018. The $201 million decrease in R&M income was primarily driven by narrower crude discounts across our medium and heavy sour crude slate. Additionally, high industry gasoline inventories following the fourth quarter's strong production environment resulted in weaker gasoline margins particularly in January 2019.
Refinery capacity utilization was 95 percent, resulting in total throughputs of 3.1 million barrels per day for the first quarter, which was 1.2 million barrels per day higher than the throughput for the first quarter of last year. The increase was primarily due to the addition of the legacy Andeavor refineries. Refined product exports totaled 430 thousand barrels per day in the first quarter of 2019.
R&M margin was $11.17 per barrel for the quarter. This quarter MPC began providing regional R&M margins. Gulf Coast R&M margins were $7.82 per barrel, Mid-Con R&M margins were $15.26 per barrel, and West Coast R&M margins were $10.94 per barrel.
Segment EBITDA was $93 million in the first quarter 2019 versus $119 million for the same quarter last year. These results include turnaround costs of $186 million in the first quarter of 2019 and $173 million in the first quarter of 2018.
Midstream
Midstream segment income from operations, which primarily reflects the results of MPLX and ANDX, was $908 million in the first quarter of 2019, compared with $567 million for the first quarter of 2018. The increase was due to contributions of $220 million from Andeavor Logistics and a $121 million increase in Midstream segment results driven primarily by growth across MPLX's businesses.
The Midstream segment made progress on its strategy of capturing the full midstream value chain and enhancing its cash flow stability by announcing continued development of long-haul pipelines that meet growing market needs. MPLX signed a letter of intent to participate in the Wink-to-Webster crude oil pipeline in the Permian Basin. Additionally, the previously announced Whistler natural gas and BANGL natural gas liquids pipeline projects are both in the documentation phase, with final investment decisions expected in the near term. The open season on the proposed Capline reversal was completed and received significant interest such that the project will progress with an initial target in-service date of September 2020. Lastly, the Gray Oak Pipeline, in which MPC has a 25 percent equity interest, remains on schedule and is expected to be placed in service in the fourth quarter of 2019.
Retail
Retail segment income from operations was $170 million in the first quarter of 2019, compared with $95 million in the first quarter of 2018. The increase in earnings was largely related to the addition of the legacy Andeavor retail operations as well as a $24 million year-over-year increase in MPC's legacy Speedway segment earnings.
Retail fuel margin increased to 17.15 cents per gallon in the first quarter of 2019 from 15.61 cents per gallon in the first quarter of 2018. Same-store merchandise sales increased by 5.4 percent year-over-year and same-store gasoline sales volume decreased by 3.2 percent year-over-year.
As of April 30, Speedway has completed 112 store conversions in 2019, bringing the total number of conversions since the combination with Andeavor to 282. The store conversions across Minnesota are complete and the company is now focused on conversions in the Southwest. The company is targeting 700 total cumulative store conversions by the end of 2019.
Items Not Allocated to Segments and Other
Items not allocated to segments totaled $75 million of expenses in the first quarter of 2019 compared to $89 million in the first quarter of 2018. First quarter 2019 results included a $207 million gain related to the exchange of MPC's undivided interest in the Capline Pipeline system for an equity ownership in a newly formed entity. The non-cash gain reflects the excess of the estimated fair value of MPC's new entity ownership interest over the carrying value of the company's contributed undivided interest. This gain was partially offset by $91 million of transaction related costs primarily associated with adopting MPC's vacation accrual policies across the legacy Andeavor employee base.
The effective tax rate for the first quarter of 2019 was 29 percent, largely due to $36 million of state deferred tax expense recognized for an out-of-period adjustment to correct the tax effects recorded in 2018 for the Andeavor acquisition.
Strong Financial Position and Liquidity
As of March 31, 2019, the company had $755 million in cash and cash equivalents (excluding MPLX and ANDX's cash and cash equivalents of $93 million and $29 million, respectively), approximately $5 billion available under a revolving credit agreement, $1 billion available under a 364-day bank revolving credit facility and $750 million available under its trade receivables securitization facility.
Strategic Update
MPC realized $133 million of synergies related to the Andeavor combination in the first quarter. The company continues to expect annual gross run-rate synergies of up to $600 million at year-end 2019 and $1.4 billion by the end of 2021.
Today, MPLX announced that it has entered into a definitive merger agreement with ANDX whereby MPLX will acquire ANDX in a unit-for-unit transaction at a 1.07x blended exchange ratio. Under the terms of the agreement, ANDX public unit holders will receive 1.135x MPLX common units for each ANDX common unit held, representing a premium of 7.3%, and MPC will receive 1.0328x MPLX common units for each ANDX common unit held, representing a 2.4% discount based on May 2, 2019 closing prices.
Second Quarter 2019 Outlook
The company's second quarter 2019 outlook for the R&M segment includes total throughput guidance of 2,925 thousand barrels per day and total direct operating costs of $8.70 per barrel. Corporate and other unallocated items are estimated at $200 million.
Conference Call
The company's previously scheduled conference call and webcast has been rescheduled from 9 a.m. EDT to 10 a.m. EDT. At 10 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 "2019 First-Quarter Financial Results" 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 with more than 3.0 million barrels per day of crude oil capacity across sixteen refineries. 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 interests in two midstream companies, MPLX LP and Andeavor Logistics LP, which own and operate 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:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
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. Discretionary free cash flow is defined as operating cash flow less maintenance and regulatory capital.
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, MPC's acquisition of Andeavor and include 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "policy," "position," "potential," "predict," "priority," "project," "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: 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 proposed transaction between MPLX LP (MPLX) and Andeavor Logistics LP (ANDX), including the ability to complete the proposed transaction on the proposed terms and timetable, the ability to satisfy various conditions to the closing of the transaction contemplated by the merger agreement, the ability to obtain regulatory approvals for the proposed transaction on the proposed terms and schedule, and any conditions imposed on the combined entity in connection with the consummation of the proposed transaction, the risk that anticipated opportunities and any other synergies from or anticipated benefits of the proposed transaction may not be fully realized or may take longer to realize than expected, including whether the proposed transaction will be accretive within the expected timeframe or at all, or disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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 or 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 any common stock repurchases; the adequacy of capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute business plans and to effect any share repurchases or dividend increases, including within the expected timeframe; 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; 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 or ANDX; 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, 2018, filed with the SEC.
We have based our forward-looking statements on our current expectations, estimates and projections about our 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 respective 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.
Additional Information and Where to Find It
In connection with the proposed transaction, a registration statement on Form S-4 will be filed with the SEC. INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE CONSENT STATEMENT/PROSPECTUS THAT WILL BE PART OF THE REGISTRATION STATEMENT, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final consent statement/prospectus will be sent to unitholders of ANDX. Investors and security holders will be able to obtain the documents free of charge at the SEC's website, www.sec.gov, from ANDX at its website, http://ir.andeavorlogistics.com, or by contacting ANDX's Investor Relations at (419) 421-2414, or from MPLX at its website, http://ir.mplx.com, or by contacting MPLX's Investor Relations at (419) 421-2414.
Participants in Solicitation
MPLX, ANDX, MPC and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of consents in respect of the proposed transaction. Information concerning MPLX's directors and executive officers is set forth in its Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed Feb. 28, 2019. Information concerning ANDX's directors and executive officers is set forth in its Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed Feb. 28, 2019. Information concerning MPC's executive officers is set forth in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed Feb. 28, 2019. Information about MPC's directors is set forth in MPC's Definitive Proxy Statement on Schedule 14A for its 2019 Annual Meeting of Shareholders, which was filed with the SEC on March 14, 2019. Investors and security holders will be able to obtain the documents free of charge from the sources indicated above, and with respect to MPC, from its website, https://www.marathonpetroleum.com/Investors, or by contacting MPC's Investor Relations at (419) 421-2414. Additional information regarding the interests of such participants in the solicitation of consents in respect of the proposed transaction will be included in the registration statement and consent statement/prospectus and other relevant materials to be filed with the SEC when they become available.
Consolidated Statements of Income (Unaudited) | |||||||
Three Months Ended | |||||||
(In millions, except per-share data) | 2019 | 2018 | |||||
Revenues and other income: | |||||||
Sales and other operating revenues | $ | 28,081 | $ | 18,694 | |||
Sales to related parties | 186 | 172 | |||||
Income from equity method investments | 99 | 86 | |||||
Net gain on disposal of assets | 214 | 2 | |||||
Other income | 35 | 30 | |||||
Total revenues and other income | 28,615 | 18,984 | |||||
Costs and expenses: | |||||||
Cost of revenues (excludes items below) | 25,756 | 17,370 | |||||
Purchases from related parties | 204 | 141 | |||||
Depreciation and amortization | 919 | 528 | |||||
Selling, general and administrative expenses | 881 | 402 | |||||
Other taxes | 186 | 103 | |||||
Total costs and expenses | 27,946 | 18,544 | |||||
Income from operations | 669 | 440 | |||||
Net interest and other financial costs | 306 | 183 | |||||
Income before income taxes | 363 | 257 | |||||
Provision for income taxes | 104 | 22 | |||||
Net income | 259 | 235 | |||||
Less net income attributable to: | |||||||
Redeemable noncontrolling interest | 20 | 16 | |||||
Noncontrolling interests | 246 | 182 | |||||
Net income (loss) attributable to MPC | $ | (7) | $ | 37 | |||
Per-share data | |||||||
Basic: | |||||||
Net income (loss) attributable to MPC per share | $ | (0.01) | $ | 0.08 | |||
Weighted average shares: | 673 | 476 | |||||
Diluted: | |||||||
Net income (loss) attributable to MPC per share | $ | (0.01) | $ | 0.08 | |||
Weighted average shares: | 673 | 480 | |||||
Income Summary (Unaudited) | |||||||
Three Months Ended | |||||||
(In millions) | 2019(a) | 2018 | |||||
Income (Loss) from Operations by segment | |||||||
Refining & Marketing | $ | (334) | $ | (133) | |||
Retail | 170 | 95 | |||||
Midstream | 908 | 567 | |||||
Items not allocated to segments: | |||||||
Corporate and other unallocated items | (191) | (89) | |||||
Capline restructuring gain | 207 | — | |||||
Transaction-related costs(b) | (91) | — | |||||
Income from operations | 669 | 440 | |||||
Net interest and other financial costs | 306 | 183 | |||||
Income before income taxes | 363 | 257 | |||||
Provision for income taxes | 104 | 22 | |||||
Net income | 259 | 235 | |||||
Less net income attributable to: | |||||||
Redeemable noncontrolling interest | 20 | 16 | |||||
Noncontrolling interests | 246 | 182 | |||||
Net income (loss) attributable to MPC | $ | (7) | $ | 37 | |||
(a) | Includes the results of Andeavor from the October 1, 2018 acquisition date forward. |
(b) | Includes costs related to the Andeavor acquisition including financial advisor and legal fees, employee severance, and other expenses. |
Capital Expenditures and Investments (Unaudited) | |||||||
Three Months Ended | |||||||
(In millions) | 2019(a) | 2018 | |||||
Refining & Marketing | $ | 394 | $ | 191 | |||
Retail | 73 | 39 | |||||
Midstream | 823 | 482 | |||||
Corporate and Other(b) | 41 | 36 | |||||
Total | $ | 1,331 | $ | 748 | |||
(a) | Includes the results of Andeavor from the October 1, 2018 acquisition date forward. |
(b) | Includes capitalized interest of $31 million and $18 million, respectively. |
Refining & Marketing Operating Statistics (Unaudited) | |||||||
Three Months Ended | |||||||
2019 | 2018 | ||||||
Refining & Marketing refined product sales volume (mbpd)(a) | 3,669 | 2,261 | |||||
Refining & Marketing margin (dollars per barrel)(b) | $ | 11.17 | $ | 10.58 | |||
Crude oil capacity utilization (percent)(c) | 95 | 93 | |||||
Refinery throughputs (mbpd):(d) | |||||||
Crude oil refined | 2,869 | 1,745 | |||||
Other charge and blendstocks | 215 | 160 | |||||
Total | 3,084 | 1,905 | |||||
Sour crude oil throughput (percent) | 52 | 52 | |||||
Sweet crude oil throughput (percent) | 48 | 48 | |||||
Refined product yields (mbpd):(d) | |||||||
Gasoline | 1,533 | 917 | |||||
Distillates | 1,091 | 609 | |||||
Propane | 53 | 31 | |||||
Feedstocks and special products | 330 | 287 | |||||
Heavy fuel oil | 45 | 34 | |||||
Asphalt | 80 | 58 | |||||
Total | 3,132 | 1,936 | |||||
Refinery direct operating costs ($/barrel):(e) | |||||||
Planned turnaround and major maintenance | $ | 1.23 | $ | 2.22 | |||
Depreciation and amortization | 1.40 | 1.37 | |||||
Other manufacturing(f) | 5.03 | 4.09 | |||||
Total | $ | 7.66 | $ | 7.68 | |||
Memo: Total includes turnaround costs of ($/barrel): (g) | $ | 0.67 | $ | 1.01 | |||
(a) | Includes intersegment sales. |
(b) | Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs. |
(c) | Based on calendar day capacity, which is an annual average that includes downtime for planned maintenance and other normal operating activities. |
(d) | Excludes inter-refinery volumes of 76 mbpd and 42 mbpd for first quarter 2019 and 2018, respectively. |
(e) | Per barrel of total refinery throughputs. |
(f) | Includes utilities, labor, routine maintenance and other operating costs. |
(g) | Reflects costs for turnaround activity which we expense as incurred. |
Refining & Marketing Operating Statistics by Region (Unaudited) | |||||||
Three Months Ended | |||||||
2019 | 2018 | ||||||
Gulf Coast | |||||||
Refining & Marketing margin (dollars per barrel)(a) | $ | 7.82 | $ | N/A | |||
Refinery throughputs (mbpd):(b) | |||||||
Crude oil refined | 1,171 | 1,056 | |||||
Other charge and blendstocks | 168 | 167 | |||||
Total | 1,339 | 1,223 | |||||
Sour crude oil throughput (percent) | 63 | 60 | |||||
Sweet crude oil throughput (percent) | 37 | 40 | |||||
Refined product yields (mbpd):(b) | |||||||
Gasoline | 573 | 534 | |||||
Distillates | 445 | 360 | |||||
Propane | 28 | 19 | |||||
Feedstocks and special products | 294 | 298 | |||||
Heavy fuel oil | 13 | 23 | |||||
Asphalt | 22 | 17 | |||||
Total | 1,375 | 1,251 | |||||
Refinery direct operating costs ($/barrel):(c) | |||||||
Planned turnaround and major maintenance | $ | 0.70 | $ | 2.87 | |||
Depreciation and amortization | 1.13 | 1.09 | |||||
Other manufacturing(d) | 3.34 | 3.91 | |||||
Total | $ | 5.17 | $ | 7.87 | |||
Memo: Total includes turnaround costs of ($/barrel): (e) | $ | 0.16 | $ | 1.43 | |||
Mid-Continent | |||||||
Refining & Marketing margin (dollars per barrel)(a) | $ | 15.26 | $ | N/A | |||
Refinery throughputs (mbpd):(b) | |||||||
Crude oil refined | 1,057 | 689 | |||||
Other charge and blendstocks | 57 | 35 | |||||
Total | 1,114 | 724 | |||||
Sour crude oil throughput (percent) | 26 | 38 | |||||
Sweet crude oil throughput (percent) | 74 | 62 | |||||
Refined product yields (mbpd):(b) | |||||||
Gasoline | 599 | 383 | |||||
Distillates | 388 | 249 | |||||
Propane | 17 | 12 | |||||
Feedstocks and special products | 39 | 31 | |||||
Heavy fuel oil | 16 | 11 | |||||
Asphalt | 58 | 41 | |||||
Total | 1,117 | 727 | |||||
Refinery direct operating costs ($/barrel):(c) | |||||||
Planned turnaround and major maintenance | $ | 1.26 | $ | 0.99 | |||
Depreciation and amortization | 1.65 | 1.77 | |||||
Other manufacturing(d) | 5.06 | 4.16 | |||||
Total | $ | 7.97 | $ | 6.92 | |||
Memo: Total includes turnaround costs of ($/barrel): (e) | $ | 0.68 | $ | 0.25 | |||
West Coast | |||||||
Refining & Marketing margin (dollars per barrel)(a) | $ | 10.94 | $ | N/A | |||
Refinery throughputs (mbpd):(b) | |||||||
Crude oil refined | 641 | — | |||||
Other charge and blendstocks | 66 | — | |||||
Total | 707 | — | |||||
Sour crude oil throughput (percent) | 73 | — | |||||
Sweet crude oil throughput (percent) | 27 | — | |||||
Refined product yields (mbpd):(b) | |||||||
Gasoline | 361 | — | |||||
Distillates | 258 | — | |||||
Propane | 8 | — | |||||
Feedstocks and special products | 64 | — | |||||
Heavy fuel oil | 25 | — | |||||
Asphalt | — | — | |||||
Total | 716 | — | |||||
Refinery direct operating costs ($/barrel):(c) | |||||||
Planned turnaround and major maintenance | $ | 2.06 | $ | — | |||
Depreciation and amortization | 1.34 | — | |||||
Other manufacturing(d) | 7.68 | — | |||||
Total | $ | 11.08 | $ | — | |||
Memo: Total includes turnaround costs of ($/barrel): (e) | $ | 1.55 | $ | — | |||
(a) | Sales revenue less cost of refinery inputs and purchased products, divided by refinery throughputs, excluding inter-refinery transfer volumes. |
(b) | Includes inter-refinery transfer volumes. |
(c) | Per barrel of total refinery throughputs. |
(d) | Includes utilities, labor, routine maintenance and other operating costs. |
(e) | Reflects costs for turnaround activity which we expense as incurred. |
Retail Operating Statistics (Unaudited) | |||||||
Three Months Ended | |||||||
2019 | 2018 | ||||||
Speedway fuel sales (millions of gallons) | 1,871 | 1,393 | |||||
Direct dealer fuel sales (millions of gallons) | 630 | N/A | |||||
Retail fuel margin (dollars per gallon)(a) | $ | 0.1715 | $ | 0.1561 | |||
Merchandise sales (in millions) | $ | 1,413 | $ | 1,129 | |||
Merchandise margin (in millions) | $ | 407 | $ | 319 | |||
Merchandise margin percent | 28.8 | 28.3 | |||||
Same store gasoline sales volume (period over period)(b) | (3.2) | % | (1.5) | % | |||
Same store merchandise sales (period over period)(b)(c) | 5.4 | % | 2.3 | % | |||
Total convenience stores at period-end | 3,918 | 2,742 | |||||
Direct dealer locations at period-end | 1,062 | N/A | |||||
(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 | |||||||
2019 | 2018 | ||||||
Pipeline throughputs (mbpd)(a) | 5,248 | 3,459 | |||||
Terminal throughput (mbpd) | 3,220 | 1,445 | |||||
Gathering system throughput (million cubic feet per day)(b) | 5,951 | 4,171 | |||||
Natural gas processed (million cubic feet per day)(b) | 8,522 | 6,629 | |||||
C2 (ethane) + NGLs fractionated (mbpd)(b) | 514 | 423 | |||||
(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) | March 31, | December 31 | |||||
Cash and cash equivalents | $ | 877 | $ | 1,687 | |||
MPLX debt | 13,833 | 13,393 | |||||
ANDX debt | 5,132 | 4,973 | |||||
Total consolidated debt | 28,115 | 27,524 | |||||
Redeemable noncontrolling interest | 1,004 | 1,004 | |||||
Equity | 42,858 | 44,049 | |||||
Shares outstanding | 667 | 680 | |||||
Three Months Ended | |||||||
2019 | 2018 | ||||||
Cash provided by (used in) operations | $ | 1,623 | $ | (137) | |||
Dividends paid per share | $ | 0.53 | $ | 0.46 | |||
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 its most comparable GAAP financial measure, 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 EBITDA & Segment EBITDA
Adjusted EBITDA represents earnings before net interest and other financial costs, income taxes, depreciation and amortization expense as well as adjustments to exclude items not allocated to segment results. Segment EBITDA represents segment earnings before net interest and other financial costs, income taxes, depreciation and amortization expense. 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. Adjusted EBITDA and Segment 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 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 | |||||||
(In millions) | 2019 | 2018 | |||||
Net income (loss) attributable to MPC | $ | (7) | $ | 37 | |||
Plus (Less): | |||||||
Net interest and other financial costs | 306 | 183 | |||||
Net income attributable to noncontrolling interests | 266 | 198 | |||||
Provision for income taxes | 104 | 22 | |||||
Depreciation and amortization | 919 | 528 | |||||
Capline restructuring gain | (207) | — | |||||
Transaction-related costs | 91 | — | |||||
Adjusted EBITDA | $ | 1,472 | $ | 968 | |||
Reconciliation of Segment Income (Loss) From Operations to Segment EBITDA and Adjusted EBITDA | |||||||
Three Months Ended | |||||||
(In millions) | 2019 | 2018 | |||||
Refining & Marketing Segment | |||||||
Segment loss from operations | $ | (334) | $ | (133) | |||
Add: Depreciation and amortization | 427 | 252 | |||||
Segment EBITDA | $ | 93 | $ | 119 | |||
Retail Segment | |||||||
Segment income from operations | $ | 170 | $ | 95 | |||
Add: Depreciation and amortization | 126 | 79 | |||||
Segment EBITDA | $ | 296 | $ | 174 | |||
Midstream Segment | |||||||
Segment income from operations | $ | 908 | $ | 567 | |||
Add: Depreciation and amortization | 307 | 181 | |||||
Segment EBITDA | $ | 1,215 | $ | 748 | |||
Segment EBITDA | $ | 1,604 | $ | 1,041 | |||
Corporate and other unallocated items | (191) | (89) | |||||
Add: Depreciation and amortization | 59 | 16 | |||||
Adjusted EBITDA | $ | 1,472 | $ | 968 | |||
Refining & Marketing Margin
Refining margin is defined as sales revenue less the cost of refinery inputs and purchased products and excludes any LCM inventory market adjustment.
Reconciliation of Refining & Marketing Loss from Operations to Refining & Marketing Margin | |||||||
Three Months Ended | |||||||
(In millions) | 2019 | 2018 | |||||
Refining & Marketing loss from operations | $ | (334) | $ | (133) | |||
Plus (Less): | |||||||
Refinery direct operating costs(a) | 1,739 | 1,081 | |||||
Refinery depreciation and amortization | 387 | 236 | |||||
Other: | |||||||
Operating expenses(a)(b) | 1,268 | 614 | |||||
Depreciation and amortization | 40 | 16 | |||||
Refining & Marketing margin | $ | 3,100 | $ | 1,814 | |||
Refining & Marketing margin by region: | |||||||
Gulf Coast | $ | 917 | $ | N/A | |||
Mid-Continent | 1,517 | N/A | |||||
West Coast | 666 | N/A | |||||
Refining & Marketing margin | $ | 3,100 | $ | N/A | |||
(a) | Excludes depreciation and amortization. |
(b) | These costs are primarily related to refined product distribution costs, including fees paid to our two sponsored master limited partnerships, MPLX and ANDX (for 1Q 2019 only). Included in these costs were fees paid to MPLX of $609 million and $478 million for the first quarters of 2019 and 2018, respectively. MPLX's and ANDX's results are reported in MPC's Midstream segment. |
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) and excluding any LCM inventory market adjustment.
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 Total Margin | |||||||
Three Months Ended | |||||||
(in millions) | 2019 | 2018 | |||||
Retail income from operations | $ | 170 | $ | 95 | |||
Plus (Less): | |||||||
Operating, selling, general and administrative expenses | 583 | 384 | |||||
Depreciation and amortization | 126 | 79 | |||||
Income from equity method investments | (17) | (14) | |||||
Net gain on disposal of assets | (2) | — | |||||
Other income | (2) | (1) | |||||
Retail total margin | $ | 858 | $ | 543 | |||
Retail total margin: | |||||||
Fuel margin | $ | 429 | $ | 217 | |||
Merchandise margin | 407 | 319 | |||||
Other margin | 22 | 7 | |||||
Retail total margin | $ | 858 | $ | 543 | |||
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-reports-first-quarter-results-300846175.html
SOURCE Marathon Petroleum Corporation
Article Date
5/8/2019MPLX LP Announces Agreement to Acquire Andeavor Logistics LP
Source: PR Newswire
FINDLAY, Ohio, May 8, 2019 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC), MPLX LP (NYSE: MPLX), and Andeavor Logistics LP (NYSE: ANDX) today announced that the two midstream companies have entered into a definitive merger agreement whereby MPLX will acquire ANDX in a unit-for-unit transaction at a blended exchange ratio of 1.07x. This represents an equity value of approximately $9 billion and an enterprise value of $14 billion for the acquired entity. The transaction has been unanimously approved by MPLX's and ANDX's respective Conflicts Committees and both Boards of Directors. Subject to the satisfaction of customary closing conditions and receipt of regulatory approvals, the transaction is expected to close in the second half of 2019.
Under the terms of the merger agreement, ANDX public unitholders will receive 1.135x MPLX common units for each ANDX common unit held, representing a premium of 7.3%, and MPC will receive 1.0328x MPLX common units for each ANDX common unit held, representing a 2.4% discount. The blended exchange ratio of 1.07x represents a 1% premium to market1.
"This transaction simplifies our MLPs into a single listed entity and creates a leading, large-scale, diversified midstream company anchored by fee-based cash flows," said Gary R. Heminger, chairman and chief executive officer. "This transaction is projected to be immediately accretive to MPLX unitholders on distributable cash flow, demonstrating MPC's commitment to positioning its midstream business for long-term success. The combined entity will have an expanded geographic footprint which we believe enhances our long-term growth opportunities and the sustainable cash flow profile of the business. We are confident about the midstream growth and value-creation opportunities that exist across this combined platform in the best basins in the U.S."
Mike Hennigan will remain President of the combined entity and lead all midstream activities.
Strategic Rationale
Approvals and Timing
The transaction has been unanimously approved by MPLX's and ANDX's respective Conflicts Committees and both Boards of Directors. As part of the transaction, ANDX's General Partner and an MPC subsidiary, together representing approximately 64% of ANDX's common units, have entered into a support agreement pursuant to which those entities have agreed to deliver written consents approving the transaction. ANDX expects to maintain its current distribution level through close. The transaction is expected to close in the second half of 2019, subject to customary closing conditions.
Investor Presentation, Conference Call, Webcast
MPLX and ANDX will hold a conference call and webcast at 8:30 a.m. EDT today to discuss the transaction. Interested parties may listen to the conference call by dialing 1-888-455-2707 (confirmation number 2634753) or by visiting MPLX's website at http://www.mplx.com and clicking on the "Events and Presentations" link in the "Investor Center" tab or ANDX's website at http://www.andeavorlogistics.com and clicking on the "Events and Presentations" link in the "Investor" tab. A replay of the webcast will be available on MPLX's and ANDX's websites for two weeks. An investor presentation will also be available online prior to the conference call and webcast at http://ir.mplx.com and http://ir.andeavorlogistics.com.
MPLX and ANDX First-Quarter 2019 Earnings Announcements
MPLX and ANDX also issued their respective first-quarter 2019 financial results this morning. Management will be available to answer questions about the earnings releases on today's conference call. MPLX's and ANDX's previously announced first-quarter 2019 earnings conference calls and webcasts, which had been scheduled for Wednesday, May 8, at 11 a.m. EDT and 1 p.m EDT, respectively, have been canceled.
Advisors
In connection with the transaction, Barclays acted as an exclusive financial advisor and Jones Day acted as legal advisor to MPC, Jefferies LLC acted as financial advisor and Latham & Watkins LLP acted as legal advisor to the Conflicts Committee of MPLX, and Goldman, Sachs & Co. LLC acted as exclusive financial advisor and Sidley Austin LLP acted as legal advisor to the Conflicts Committee of ANDX.
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 with more than 3.0 million barrels per day of crude oil capacity across sixteen refineries. 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 interests in two midstream companies, MPLX LP and Andeavor Logistics LP, which own and operate 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.
About MPLX LP
MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.MPLX.com
About Andeavor Logistics LP
Andeavor Logistics LP is a fee-based, full-service, diversified midstream logistics company, with integrated assets across the western and mid-continent regions of the United States. Andeavor Logistics operates through three business segments: Terminalling and Transportation, Gathering and Processing and Wholesale. The Terminalling and Transportation segment consists of marine terminals, refined product truck terminals, rail terminals, dedicated storage facilities and transportation pipelines. The Gathering and Processing segment consists of crude oil gathering systems and pipelines as well as natural gas gathering pipelines, processing facilities and fractionation facilities. The Wholesale segment consists of a fee-based fuel wholesale business. Andeavor Logistics is a Delaware limited partnership headquartered in Findlay, Ohio.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP (MPLX) and Andeavor Logistics LP (ANDX). These forward-looking statements relate to, among other things, the proposed acquisition of ANDX by MPLX and include expectations, estimates and projections concerning the business and operations, financial priorities and strategic plans of the combined entity. 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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 companies' control and are difficult to predict. Factors that could cause MPLX's or ANDX's actual results to differ materially from those implied in the forward-looking statements include: the ability to complete the proposed transaction between MPLX and ANDX on the proposed terms and timetable; the ability to satisfy various conditions to the closing of the transaction contemplated by the merger agreement; the ability to obtain regulatory approvals for the proposed transaction on the proposed terms and schedule, and any conditions imposed on the combined entity in connection with the consummation of the proposed transaction; the risk that anticipated opportunities and any other synergies from or anticipated benefits of the proposed transaction may not be fully realized or may take longer to realize than expected, including whether the proposed transaction will be accretive within the expected timeframe or at all; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of MPLX or ANDX; the amount and timing of future distributions; negative capital market conditions, including an increase of the current yield on common units; the ability to achieve strategic and financial objectives, including with respect to distribution coverage, future distribution levels, proposed projects and completed transactions; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and access to debt on commercially reasonable terms, and the ability to successfully execute business plans, growth strategies and self-funding models; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects and planned investments, and the ability to obtain regulatory and other approvals with respect thereto; completion of midstream infrastructure by competitors; disruptions due to equipment interruption or failure, including electrical shortages and power grid failures; the suspension, reduction or termination of Marathon Petroleum Corporation's (MPC) obligations under MPLX's and ANDX's commercial agreements; modifications to financial policies, capital budgets, and earnings and distributions; the ability to manage disruptions in credit markets or changes to credit ratings; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations and/or enforcement actions initiated thereunder; adverse results in litigation; other risk factors inherent to MPLX's and ANDX's industry; risks related to MPC; and the factors set forth under the heading "Risk Factors" in MPLX's and ANDX's respective Annual Reports on Form 10-K for the year ended Dec. 31, 2018, filed with Securities and Exchange Commission (SEC).
Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include: 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 as set forth above related to the acquisition of ANDX by MPLX; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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 or 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 any common stock repurchases; the adequacy of capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute business plans and to effect any share repurchases or dividend increases, including within the expected timeframe; 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; 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 or ANDX; 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, 2018, filed with the SEC.
We have based our forward-looking statements on our current expectations, estimates and projections about our 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 respective 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.
Additional Information and Where to Find It
In connection with the proposed transaction, a registration statement on Form S-4 will be filed with the SEC. INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE CONSENT STATEMENT/PROSPECTUS THAT WILL BE PART OF THE REGISTRATION STATEMENT, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final consent statement/prospectus will be sent to unitholders of ANDX. Investors and security holders will be able to obtain the documents free of charge at the SEC's website, www.sec.gov, from ANDX at its website, http://ir.andeavorlogistics.com, or by contacting ANDX's Investor Relations at (419) 421-2414, or from MPLX at its website, http://ir.mplx.com, or by contacting MPLX's Investor Relations at (419) 421-2414.
Participants in Solicitation
MPLX, ANDX, MPC and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of consents in respect of the proposed transaction. Information concerning MPLX's directors and executive officers is set forth in its Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed Feb. 28, 2019. Information concerning ANDX's directors and executive officers is set forth in its Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed Feb. 28, 2019. Information concerning MPC's executive officers is set forth in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2018, filed Feb. 28, 2019. Information about MPC's directors is set forth in MPC's Definitive Proxy Statement on Schedule 14A for its 2019 Annual Meeting of Shareholders, which was filed with the SEC on March 14, 2019. Investors and security holders will be able to obtain the documents free of charge from the sources indicated above, and with respect to MPC, from its website, https://www.marathonpetroleum.com/Investors, or by contacting MPC's Investor Relations at (419) 421-2414. Additional information regarding the interests of such participants in the solicitation of consents in respect of the proposed transaction will be included in the registration statement and consent statement/prospectus and other relevant materials to be filed with the SEC when they become available.
1 Based on May 2, 2019 closing prices
2 Based on projections as of announcement
Investor Relations Contacts: | |
Kristina Kazarian – Vice President, Investor Relations | (419) 421-2071 |
Doug Wendt – Manager, Investor Relations | (419) 421-2423 |
Evan Barbosa – Manager, Investor Relations | (419) 421-2539 |
Jim Clarke – Manager, Investor Relations | (419) 421-4165 |
Media Contacts: | |
Chuck Rice – Director, Communications and Corporate Affairs | (419) 421-2521 |
View original content:http://www.prnewswire.com/news-releases/mplx-lp-announces-agreement-to-acquire-andeavor-logistics-lp-300846153.html
SOURCE MPLX LP; Andeavor Logistics LP
Article Date
5/8/20194/29/2019 - Capline Pipeline Company LLC Announces One-Week Extension to Capline Reversal Binding Open Season
Capline Pipeline Company LLC Announces One-Week Extension to Capline Reversal Binding Open Season
Source: PR Newswire
FINDLAY, Ohio, April 29, 2019 /PRNewswire/ -- Capline Pipeline Company LLC announced today that it will extend its binding open season by one week. In response to feedback from potential shippers, Capline has made minor revisions to its open season documents. The binding open season will be extended to May 7, 2019 at 12:00 EDT to allow potential shippers adequate time to review these revisions, and to provide additional time to finalize commitments to Capline and connecting infrastructure.
The open season underway solicits shipper interest for the Capline system's southbound service from Patoka, Ill., to St. James, La. or Liberty, Miss., with an additional origination point at Cushing, Okla., as part of a joint tariff with Diamond pipeline. Capline is a 40-inch, 632-mile pipeline system extending from Patoka, Ill., to St. James, La. The reversed service is scheduled to commence in September 2020.
Marathon Pipe Line LLC, the pipeline's operator, is managing the open season and the joint tariff with Diamond pipeline. Interested shippers must execute a non-disclosure agreement and will then be provided access to the open season documents. Pending a successful open season, and subject to necessary approvals, Capline will continue project development and begin construction to enable southbound flow.
The binding open season began on Wednesday, January 30, 2019 at 4 p.m. EST, and will now conclude on May 7, 2019, at 12 p.m. EDT. Capline Pipeline Company LLC's majority owner is a Plains All American Pipeline, L.P. subsidiary, and minority owners are a Marathon Petroleum Corporation subsidiary and BP Oil Pipeline Company.
Website for Additional Information: https://www.marathonpipeline.com/About/News_and_Events/Capline_Binding_Open_Season/
Legal Contact:
Elizabeth Kohlhausen (713) 357-6248
ekohlhausen@CBLpipelinelaw.com
Caldwell Boudreaux Lefler PLLC
Commercial Contact:
Matt Heft (419) 429-5499
mrheft@mplx.com
Marathon Pipe Line LLC
Media Contacts:
Chuck Rice (419) 421-2521
Sid Barth (419) 421-2850
Marathon Petroleum Corporation
This press release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements relate to, among other things, timing for the anticipated operations discussed above. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "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 control of the companies and are difficult to predict. Factors that could impact the opportunities described above are: the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of pipeline capacity by competitors; the ability to obtain required regulatory approvals on a timely basis; or the occurrence of an operational hazard or unforeseen interruption. In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions.
View original content to download multimedia:http://www.prnewswire.com/news-releases/capline-pipeline-company-llc-announces-one-week-extension-to-capline-reversal-binding-open-season-300840049.html
SOURCE Marathon Petroleum Corporation
Article Date
4/29/2019Marathon Petroleum Corp. Announces Quarterly Dividend
Source: PR Newswire
FINDLAY, Ohio, April 24, 2019 /PRNewswire/ -- The Marathon Petroleum Corp. (NYSE: MPC) board of directors has declared a dividend of $0.53 per share on common stock. The dividend is payable June 10, 2019, to shareholders of record as of the close of business on May 16, 2019.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests in two midstream companies, MPLX LP and Andeavor Logistics LP, which own and operate 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 Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-announces-quarterly-dividend-300837549.html
SOURCE Marathon Petroleum Corporation
Article Date
4/24/20194/12/2019 - Marathon Petroleum Corp. to acquire a terminal and retail locations in Buffalo, New York
Marathon Petroleum Corp. to acquire a terminal and retail locations in Buffalo, New York
Source: PR Newswire
FINDLAY, Ohio, April 12, 2019 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) today announced that its wholly owned subsidiaries, including Speedway LLC, have entered into a definitive purchase agreement to acquire a 900,000-barrel capacity light product and asphalt terminal and 33 NOCO Express retail stores in Buffalo, New York, from NOCO Incorporated.
"This acquisition supports MPC's Midwest product placement strategy and builds upon prior investments, including Speedway's acquisition of 78 Express Mart locations in western New York, to maximize our refinery utilization," said MPC Chairman and Chief Executive Officer Gary R. Heminger. "The terminal is well positioned to receive supply from the Midwest, Canada or the New York Harbor via multiple supply routes, including pipeline, truck, rail or waterborne vessels and deliver our products in this attractive new market."
"We are excited to continue our growth into western New York," said Speedway President Tony Kenney. "The NOCO Express stores have been very well managed and maintained, and will complement our expanding presence in this region. We look forward to further bringing the Speedway brand to even more consumers in the Buffalo region."
The transaction is subject to standard regulatory approvals, customary due diligence, and other closing conditions.
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 with more than 3.0 million barrels per day of crude oil capacity across sixteen refineries. 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 interests in two midstream companies, MPLX LP and Andeavor Logistics LP, which own and operate 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:
Kristina A. Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
Forward-looking Statements
This press release includes forward-looking statements regarding Marathon Petroleum Corporation (MPC). You can identify forward-looking statements by words such as "anticipate," "believe," "estimate," "expect," "forecast," "goal," "intend," "objective," "opportunity," "plan," "position," "potential," "predict," "project," "seek," "target," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. We have based our forward-looking statements on our current expectations, estimates and projections about our industry and our company. 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 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. Factors that could cause actual results to differ materially from those implied in the forward-looking statements include: the time, costs and ability to obtain regulatory and other approvals and otherwise consummate the proposed transactions described herein; the satisfaction or waiver of conditions in the agreements governing the proposed transactions described herein; and our ability to achieve the strategic and other objectives related to the proposed transactions described herein. In accordance with "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, we have included in MPC's Form 10-K for the year ended Dec. 31, 2018, 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. Copies of MPC's Form 10-K are available on the SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office.
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-to-acquire-a-terminal-and-retail-locations-in-buffalo-new-york-300831301.html
SOURCE Marathon Petroleum Corporation
Article Date
4/12/2019Marathon Petroleum Corporation earns second ENERGY STAR® Partner of the Year award
Source: PR Newswire
FINDLAY, Ohio, April 10, 2019 /PRNewswire/ -- For the second consecutive year, Marathon Petroleum Corporation (NYSE: MPC) has earned the U.S. Environmental Protection Agency (EPA) ENERGY STAR Partner of the Year award, which recognizes not just top-tier energy efficiency across its business, but also excellent environmental compliance.
"I applaud the 2019 ENERGY STAR Award winners," said EPA Assistant Administrator for Air and Radiation Bill Wehrum. "Their innovation and leadership enhance America's economic competitiveness."
Marathon Petroleum has participated in the ENERGY STAR program since the EPA began awarding the energy-efficiency recognitions to refineries in 2006, and its refineries have earned more ENERGY STAR awards than all other U.S. refiners combined. Marathon Petroleum is the only petroleum refining company to earn the award in 2018 and 2019.
"We are proud to partner with the EPA's ENERGY STAR program as it recognizes our environmental compliance and energy efficiency," said Gary R. Heminger, Chairman and CEO of Marathon Petroleum. "Environmental stewardship is one of our core values, and we are always working to improve our performance. The Partner of the Year award recognizes our accomplishments and helps inspire us to continually do more."
In addition to energy efficiency at its refineries, Marathon Petroleum works to optimize energy utilization across its operations. For example, its marine operations have implemented efficiency projects that significantly reduce fuel consumption and carbon emissions, and its fleet of transport trucks participates in the EPA's SmartWay Transport Partnership, through which it measures, benchmarks, and tracks its efforts to increase efficiency and fuel economy.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests in two midstream companies, MPLX LP and Andeavor Logistics LP, which own and operate 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
About ENERGY STAR
ENERGY STAR® is the government-backed symbol for energy efficiency, providing simple, credible, and unbiased information that consumers and businesses rely on to make well-informed decisions. Thousands of industrial, commercial, utility, state, and local organizations – including more than 40 percent of the Fortune 500® – rely on their partnership with the U.S. Environmental Protection Agency (EPA) to deliver cost-saving energy efficiency solutions. Since 1992, ENERGY STAR and its partners helped save American families and businesses nearly 4 trillion kilowatt-hours of electricity and associated reductions of over 3 billion metric tons of greenhouse gases. In 2017 alone, ENERGY STAR and its partners helped Americans save $30 billion in energy costs. More background information about ENERGY STAR can be found at: energystar.gov/about and energystar.gov/numbers.
Investor Relations Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
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SOURCE Marathon Petroleum Corporation
Article Date
4/10/2019Andeavor Logistics to Release 2019 First-Quarter Financial Results May 8
Source: PR Newswire
FINDLAY, Ohio, April 8, 2019 /PRNewswire/ -- Andeavor Logistics LP (NYSE: ANDX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will host a conference call with analysts on Wednesday, May 8, at 1 p.m. EDT to discuss 2019 first-quarter financial results, which will be released earlier that day, and to provide an update on company operations.
Interested parties may listen to the conference call by visiting ANDX's website at www.andeavorlogistics.com. A replay of the conference call will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, also will be available online.
About Andeavor Logistics LP
Andeavor Logistics LP is a fee-based, full-service, diversified midstream logistics company, with integrated assets across the western and mid-continent regions of the United States. Andeavor Logistics operates through three business segments: Terminalling and Transportation, Gathering and Processing and Wholesale. The Terminalling and Transportation segment consists of marine terminals, refined product truck terminals, rail terminals, dedicated storage facilities and transportation pipelines. The Gathering and Processing segment consists of crude oil gathering systems and pipelines as well as natural gas gathering pipelines, processing facilities and fractionation facilities. The Wholesale segment consists of a fee-based fuel wholesale business. Andeavor Logistics is a Delaware limited partnership headquartered in Findlay, Ohio.
Investor Relations Contacts:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/andeavor-logistics-to-release-2019-first-quarter-financial-results-may-8-300826018.html
SOURCE Andeavor Logistics LP
Article Date
4/8/2019MPLX LP to Announce 2019 First-Quarter Financial Results May 8
Source: PR Newswire
FINDLAY, Ohio, April 8, 2019 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will host a conference call with analysts on Wednesday, May 8, at 11 a.m. EDT to discuss 2019 first-quarter financial results, which will be released earlier that day, and to provide an update on company operations.
Interested parties may listen to the conference call by visiting MPLX's website at http://www.mplx.com and clicking on the "2019 First-Quarter Financial Results" 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, also will be available online.
About MPLX LP
MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.mplx.com.
Investor Relations Contacts:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/mplx-lp-to-announce-2019-first-quarter-financial-results-may-8-300826017.html
SOURCE MPLX LP
Article Date
4/8/2019Marathon Petroleum Corp. to Announce 2019 First-Quarter Financial Results May 8
Source: PR Newswire
FINDLAY, Ohio, April 8, 2019 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) will host a conference call with analysts on Wednesday, May 8, at 9 a.m. EDT to discuss 2019 first-quarter financial results, which will be released earlier that day, and to provide an update on company operations.
Interested parties may listen to the conference call by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2019 First-Quarter Financial Results" link. A replay of the conference call will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, also will be available online.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests in two midstream companies, MPLX LP and Andeavor Logistics LP, which own and operate 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:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-to-announce-2019-first-quarter-financial-results-may-8-300826016.html
SOURCE Marathon Petroleum Corporation
Article Date
4/8/2019Andeavor Logistics LP Reports Fourth-Quarter and Full-Year 2018 Results
Source: PR Newswire
FINDLAY, Ohio, Feb. 7, 2019 /PRNewswire/ --
Andeavor Logistics LP (NYSE: ANDX) today reported full year 2018 net earnings of $600 million, compared with $306 million in 2017. Earnings before interest, taxes, depreciation and amortization (EBITDA) was $1.2 billion, compared with $949 million in 2017. The year-over-year increase in earnings and EBITDA was primarily driven by the 2018 Drop Down completed in August 2018, which contributed $55 million of net earnings and $76 million of EBITDA in 2018, as well as the acquisition of the SLC Core Pipeline System, formerly known as the Wamsutter Pipeline System, and the execution of its organic growth program.
"In 2018 Andeavor Logistics expanded its system through a drop down of midstream assets and several organic growth projects focused on the Permian and Bakken regions," said Gary R. Heminger, chairman and chief executive officer. "As we move into 2019, we remain focused on enhancing our financial profile on a standalone basis. This will include careful management of leverage and a focus on meaningfully increasing distribution coverage in the coming quarters."
For the year, the company generated $1.0 billion in net cash from operating activities and distributable cash flow (DCF) attributable to common unitholders of $907 million. On January 25, 2019, Andeavor Logistics announced a quarterly cash distribution of $1.03 per limited partnership unit, or $4.12 on an annualized basis, which was flat with the prior quarter, and finished both the quarter and year with coverage of 1.02x and leverage of 3.8x. The company reiterated its plan to maintain leverage levels below 4.0x, issue no equity, and move toward independent sustainability with limited parent support.
Fourth Quarter Results
Andeavor Logistics reported fourth quarter 2018 net earnings of $171 million, compared with $53 million in the fourth quarter 2017. EBITDA was $333 million, compared with $281 million in the fourth quarter 2017. The year-over-year increase in earnings and EBITDA was primarily driven by the 2018 Drop Down completed in August 2018, in addition to the completion of several organic growth projects. The 2018 Drop Down contributed operating income of $36 million and EBITDA of $50 million during the quarter. Fourth quarter 2018 net earnings and EBITDA included charges of $8 million primarily from increased employee costs related to the close of the parent merger and environmental costs.
Three Months Ended | Twelve Months Ended | ||||||||||||
($ in millions) | 2018 | 2017 (a) | 2018 (a) | 2017 (a) | |||||||||
Net Earnings | $ | 171 | $ | 53 | $ | 600 | $ | 306 | |||||
Segment Operating Income | |||||||||||||
Terminalling and Transportation | $ | 146 | $ | 107 | $ | 498 | $ | 397 | |||||
Gathering and Processing | 84 | 87 | 310 | 245 | |||||||||
Wholesale | 5 | 6 | 27 | 15 | |||||||||
EBITDA (b) | $ | 333 | $ | 281 | $ | 1,201 | $ | 949 | |||||
Segment EBITDA (b) | |||||||||||||
Terminalling and Transportation | $ | 186 | $ | 146 | $ | 660 | $ | 530 | |||||
Gathering and Processing | 146 | 147 | 537 | 446 | |||||||||
Wholesale | 7 | 8 | 38 | 20 | |||||||||
Net Cash From Operating Activities | $ | 310 | $ | 163 | $ | 1,029 | $ | 687 | |||||
Distributable Cash Flow Attributable to Common Unitholders (b) | $ | 243 | $ | 188 | $ | 907 | $ | 665 | |||||
Total Distributions to be Paid to Common Unitholders | $ | 238 | $ | 204 | $ | 890 | $ | 692 | |||||
Distribution Coverage Ratio (b) | 1.02x | 0.92x | 1.02x | 0.96x | |||||||||
(a) | Adjusted to include the historical results of the Predecessors. See "Items Impacting Comparability." |
(b) | For more information on EBITDA, Segment EBITDA, Distributable Cash Flow Attributable to Common Unitholders and Distribution Coverage Ratio, see "Non-GAAP Measures." |
Segment Results
Terminalling and Transportation
Terminalling and Transportation segment operating income was $146 million for the fourth quarter 2018, an increase of $39 million from the prior year, and segment EBITDA was $186 million, an increase of $40 million from the prior year. The year-over-year increase was primarily attributable to contributions from the 2018 Drop Down. The 2018 Drop Down contributed $23 million of segment operating income and $29 million of segment EBITDA in the Terminalling and Transportation segment during the quarter. Terminalling and Transportation segment operating income was $498 million for the full year 2018, an increase of $101 million from last year, and segment EBITDA was $660 million, an increase of $130 million from the prior year.
Gathering and Processing
Gathering and Processing segment operating income was $84 million for the fourth quarter 2018, a decrease of $3 million from the prior year, and segment EBITDA was $146 million, a decrease of $1 million from the prior year. The year-over-year decrease was primarily attributable to lower volumes in the Rockies, offset by Permian Basin crude oil volume growth. The 2018 Drop Down contributed $13 million of segment operating income and $21 million of segment EBITDA in the Gathering and Processing segment during the quarter. Gathering and Processing segment operating income was $310 million for the full year 2018, an increase of $65 million from last year, and segment EBITDA was $537 million, an increase of $91 million from the prior year.
Wholesale
Wholesale segment operating income was $5 million for the fourth quarter 2018, a decrease of $1 million from the prior year, and segment EBITDA for the fourth quarter 2018 was $7 million, a decrease of $1 million from the prior year. This year-over-year decrease was driven by weaker unbranded wholesale pricing impacting margins with retailers in the Southwest region. Wholesale segment operating income was $27 million for the full year 2018, an increase of $12 million from last year, and segment EBITDA was $38 million, an increase of $18 million from the prior year, primarily driven by the WNRL acquisition which closed October 30, 2017.
Balance Sheet and Cash Flow
Net cash from operating activities was $310 million in the fourth quarter 2018, and distributable cash flow attributable to common unitholders for the fourth quarter was $243 million. Net cash from operating activities was $1.0 billion for the full year 2018, and distributable cash flow attributable to common unitholders for the full year was $907 million. Andeavor Logistics ended 2018 with $10 million of cash and $1.4 billion of availability under its credit facilities and intercompany loan with Marathon Petroleum Corporation (NYSE: MPC). Total debt of $5.0 billion resulted in a leverage ratio of 3.8x at December 31, 2018.
Net capital expenditures for the fourth quarter 2018 were $199 million, which included $181 million of net growth investments and $18 million of net maintenance capital. Andeavor Logistics invested $635 million in net growth investments and $60 million in net maintenance capital in 2018. Capital expenditures for 2018 have been retrospectively adjusted to include the investments of the assets from the 2018 Drop Down occurring prior to the August 6, 2018 effective date of the acquisition.
2019 and 2020 Financial Outlook
In December 2018, Andeavor Logistics provided its 2019 and 2020 capital investment plans. This strategic deployment of capital combined with execution of the underlying base business is expected to generate $0.8 billion and $0.8 billion of net earnings in 2019 and 2020, and $1.4 billion and $1.6 billion of annual EBITDA, respectively. Andeavor Logistics plans to invest approximately $0.6 billion in organic growth in both 2019 and 2020.
Conference Call
At 1 p.m. EST today, Andeavor Logistics will hold a conference call and webcast to discuss reported results and provide an update on operations. Interested parties may listen by visiting Andeavor Logistics' website at http://www.andeavorlogistics.com and clicking on the "Investors" 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 http://www.ir.andeavorlogistics.com.
About Andeavor Logistics LP
Andeavor Logistics LP is a fee-based, full-service, diversified midstream logistics company, with integrated assets across the western and mid-continent regions of the United States. Andeavor Logistics operates through three business segments: Terminalling and Transportation, Gathering and Processing and Wholesale. The Terminalling and Transportation segment consists of marine terminals, refined product truck terminals, rail terminals, dedicated storage facilities and transportation pipelines. The Gathering and Processing segment consists of crude oil gathering systems and pipelines as well as natural gas gathering pipelines, processing facilities and fractionation facilities. The Wholesale segment consists of a fee-based fuel wholesale business. Andeavor Logistics is a Delaware limited partnership headquartered in Findlay, Ohio.
This press release contains forward-looking statements within the meaning of federal securities laws regarding Andeavor Logistics LP (ANDX). These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the business and operations, strategy and value creation plans of ANDX. 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "policy, " "position," "potential," "predict," "priority, " "project," "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 ANDX's actual results to differ materially from those implied in the forward-looking statements include: the amount and timing of future distributions; our ability to achieve expected coverage improvement and distributable cash growth; our ability to execute a funding model with no additional equity issuances and limited parent support; net earnings and EBITDA run rate; our ability to achieve our financial and strategic targets; negative capital market conditions, including an increase of the current yield on common units; our financial position, liquidity and capital resources, including available capacity under our credit facilities and access to debt on commercially reasonable terms; our financial and operational outlook, and ability to fulfill that outlook; our Permian Basin growth strategy, expected capital investment, and expectations related to increasing customer demand and additional future growth opportunities; the August 2018 drop down from Andeavor, including the expected benefits thereof and the annual net earnings and EBITDA expected to be generated thereby; the status and expected timing of our current projects, including capital investments; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; changes to the expected construction costs and timing of projects and planned investments, and our ability to obtain regulatory and other approvals with respect thereto; completion of midstream infrastructure by competitors; disruptions due to equipment interruption or failure, including electrical shortages and power grid failures; the suspension, reduction or termination of MPC/Andeavor's obligations under ANDX's commercial agreements; continued/further volatility in and/or degradation of market and industry conditions and their effects on our business; our ability to manage disruptions in credit markets or changes to our credit ratings; adverse changes in laws including with respect to tax and regulatory matters; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations and/or enforcement actions initiated thereunder; adverse results in litigation; changes to ANDX's capital budget; other risk factors inherent to ANDX's industry; risks related to MPC as set forth below, including those related to MPC's acquisition of Andeavor or the potential merger, consolidation or combination of MPLX with ANDX; and the factors set forth under the heading "Risk Factors" in ANDX's Annual Report on Form 10-K for the year ended Dec. 31, 2017, and in ANDX's Forms 10-Q, filed with the Securities and Exchange Commission (SEC). Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include: 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; the potential merger, consolidation or combination of MPLX with ANDX; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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; our ability to manage disruptions in credit markets or changes to our credit rating; future levels of capital, environmental or 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 any common stock repurchases; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan and to effect any share repurchases or dividend increases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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; 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 or ANDX; 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, 2017, and in MPC's Forms 10-Q, filed with the SEC. We have based our forward-looking statements on our current expectations, estimates and projections about our 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. Copies of ANDX's Form 10-K and Forms 10-Q are available on the SEC website, ANDX's website at http://ir.andeavorlogistics.com or by contacting ANDX's Investor Relations office. Copies of MPC's Form 10-K and Forms 10-Q are available on the SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office.
Investor Relations Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
Non-GAAP Measures
As a supplement to our financial information presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), our management uses certain "non-GAAP" measures to analyze our results of operations, assess internal performance against budgeted and forecasted amounts and evaluate future impacts to our financial performance as a result of capital investments, acquisitions, divestitures and other strategic projects. These measures are important factors in assessing our operating results and profitability and include:
We present these measures because we believe they may help investors, analysts, lenders and ratings agencies analyze our results of operations and liquidity in conjunction with our U.S. GAAP results, including but not limited to:
Management also uses these measures to assess internal performance, and we believe they may provide meaningful supplemental information to the users of our financial statements. Non-GAAP measures have important limitations as analytical tools, because they exclude some, but not all, items that affect net earnings, operating income and net cash from operating activities. These measures should not be considered substitutes for their most directly comparable U.S. GAAP financial measures. See "Reconciliation of Amounts Reported Under U.S. GAAP," "Segment Reconciliation of Amounts Reported Under U.S. GAAP," "Average Margin on NGL Sales per Barrel" and "Average Fuel Sales Margin per Gallon" for reconciliations between non-GAAP measures and their most directly comparable U.S. GAAP measures.
Items Impacting Comparability
The Partnership's results of operations may not be comparable to the historical results of operations for the reasons described below.
Acquisitions and Mergers
Other than WNRL and certain assets acquired from the 2018 Drop Down, our Predecessors did not record revenues with Andeavor and our Predecessors recorded general and administrative expenses and financed operations differently than the Partnership. As previously mentioned, on August 6, 2018, we completed the 2018 Drop Down for total consideration of $1.55 billion. As an entity under common control with Andeavor, who merged with and became a wholly-owned subsidiary of Marathon Petroleum Corporation ("MPC") effective October 1, 2018, we accounted for the transfers of businesses as if the transfer occurred at the beginning of the period, and prior periods are retrospectively adjusted to furnish comparative information. Accordingly, the accompanying results of operations have been retrospectively adjusted to include the historical results of the assets acquired prior to the effective date of the acquisition.
On November 8, 2017, we acquired the Anacortes Logistics Assets from a subsidiary of Andeavor for total consideration of $445 million. The Anacortes Logistics Assets include crude oil, feedstock and refined products storage at MPC's Anacortes Refinery, the Anacortes marine terminal with feedstock and refined product throughput, a manifest rail facility and crude oil and refined products pipelines.
Effective October 30, 2017, Andeavor Logistics closed its merger with Western Refining Logistics, LP (the "WNRL Merger"). WNRL's operations included terminalling and storage assets, crude oil and refined product transportation services and a wholesale fuels business. The WNRL Merger was treated as a transaction of entities under common control, thus Andeavor Logistics' results reflect the operations, financial position and cash flows associated with WNRL and their related subsidiaries as of June 1, 2017.
The closing of the WNRL Merger was conditioned upon, among other things, the adoption and effectiveness of the Second Amended and Restated Agreement of Limited Partnership of Andeavor Logistics LP, pursuant to which, simultaneously with the closing of the WNRL Merger: (i) the incentive distribution rights in Andeavor Logistics (the "IDRs") held by Tesoro Logistics GP, LLC ("TLGP"), our general partner, were canceled (the "IDR Exchange"), (ii) the general partner interests in Andeavor Logistics held by TLGP were converted into a non-economic general partner interest in Andeavor Logistics, and (iii) Andeavor, as well as MPC for periods after October 1, 2018, and their affiliates, including TLGP, agreed to increase and extend existing waivers on distributions to them by $60 million to an aggregate of $160 million between 2017 and 2019.
Accounting Standard Adoption
Due to the adoption of Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers" and the associated subsequent amendments (collectively, "ASC 606") on January 1, 2018, the presentation of wholesale fuel sales and cost of fuel and other was impacted by adoption of the new revenue recognition accounting standard on January 1, 2018. Beginning January 1, 2018 in connection with the adoption, the revenues and costs associated with our fuel purchase and supply arrangements were netted.
Andeavor Logistics LP | |||||||
Condensed Consolidated Balance Sheets (Unaudited) (In millions) | |||||||
December 31, | December 31, | ||||||
Assets | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 10 | $ | 75 | |||
Receivables, net of allowance for doubtful accounts | 474 | 483 | |||||
Prepayments and other current assets | 79 | 27 | |||||
Total Current Assets | 563 | 585 | |||||
Property, Plant and Equipment, Net | 6,845 | 6,249 | |||||
Other Noncurrent Assets, Net | 2,887 | 2,671 | |||||
Total Assets | $ | 10,295 | $ | 9,505 | |||
Liabilities and Equity | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 466 | $ | 393 | |||
Accrued interest and financing costs | 41 | 40 | |||||
Current maturities of debt | 504 | 1 | |||||
Other current liabilities | 81 | 84 | |||||
Total Current Liabilities | 1,092 | 518 | |||||
Debt, Net of Unamortized Issuance Costs | 4,460 | 4,127 | |||||
Other Noncurrent Liabilities | 69 | 54 | |||||
Equity | 4,674 | 4,806 | |||||
Total Liabilities and Equity | $ | 10,295 | $ | 9,505 | |||
Andeavor Logistics LP | |||||||||||||||
Results of Operations (Unaudited) (In millions, except per unit amounts) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2018 | 2017 (a) | 2018 (a) | 2017 (a) | ||||||||||||
Revenues | |||||||||||||||
Terminalling and Transportation | $ | 292 | $ | 239 | $ | 1,054 | $ | 838 | |||||||
Gathering and Processing | 318 | 333 | 1,263 | 1,129 | |||||||||||
Wholesale (c) | 17 | 542 | 79 | 1,282 | |||||||||||
Intersegment revenues | (4) | — | (16) | — | |||||||||||
Total Revenues | 623 | 1,114 | 2,380 | 3,249 | |||||||||||
Costs and Expenses | |||||||||||||||
Cost of fuel and other (excluding items shown separately | — | 528 | — | 1,244 | |||||||||||
NGL expense (excluding items shown separately below) | 40 | 86 | 206 | 265 | |||||||||||
Operating expenses (excluding depreciation and amortization) | 227 | 179 | 885 | 691 | |||||||||||
General and administrative expenses | 29 | 51 | 121 | 158 | |||||||||||
Depreciation and amortization expenses | 101 | 91 | 368 | 313 | |||||||||||
(Gain) loss on asset disposals and impairments | 2 | — | 4 | (25) | |||||||||||
Operating Income | 224 | 179 | 796 | 603 | |||||||||||
Interest and financing costs, net | (61) | (137) | (233) | (330) | |||||||||||
Equity in earnings of equity method investments | 6 | 9 | 31 | 22 | |||||||||||
Other income, net | 2 | 2 | 6 | 11 | |||||||||||
Net Earnings | $ | 171 | $ | 53 | $ | 600 | $ | 306 | |||||||
Loss (earnings) attributable to Predecessors | $ | — | $ | (3) | $ | 28 | $ | 43 | |||||||
Net Earnings Attributable to Partners | 171 | 50 | 628 | 349 | |||||||||||
Preferred unitholders' interest in net earnings | (10) | (3) | (44) | (3) | |||||||||||
General partner's interest in net earnings, including incentive | — | — | — | (79) | |||||||||||
Limited Partners' Interest in Net Earnings | $ | 161 | $ | 47 | $ | 584 | $ | 267 | |||||||
Net Earnings per Limited Partner Unit: | |||||||||||||||
Common - basic | $ | 0.66 | $ | 0.25 | $ | 2.57 | $ | 2.11 | |||||||
Common - diluted | $ | 0.66 | $ | 0.25 | $ | 2.57 | $ | 2.11 | |||||||
Weighted Average Limited Partner Units Outstanding: | |||||||||||||||
Common units - basic | 245.5 | 182.6 | 228.7 | 126.0 | |||||||||||
Common units - diluted | 245.7 | 182.7 | 228.9 | 126.1 | |||||||||||
Cash Distributions Paid per Unit | $ | 1.0300 | $ | 0.9850 | $ | 4.0750 | $ | 3.8062 | |||||||
(c) | The presentation of wholesale fuel sales and cost of fuel and other was impacted by adoption of the new revenue recognition accounting standard on January 1, 2018. Beginning January 1, 2018 in connection with the accounting standard adoption, the revenues and costs associated with our fuel purchase and supply arrangements were presented on a net basis versus gross basis in prior years. |
Andeavor Logistics LP | |||||||||||||||
Selected Operating Segment Data (Unaudited) (In millions) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2018 | 2017 (a) | 2018 (a) | 2017 (a) | ||||||||||||
Earnings Before Income Taxes | |||||||||||||||
Terminalling and Transportation | $ | 146 | $ | 107 | $ | 498 | $ | 397 | |||||||
Gathering and Processing | 84 | 87 | 310 | 245 | |||||||||||
Wholesale | 5 | 6 | 27 | 15 | |||||||||||
Total Segment Operating Income | 235 | 200 | 835 | 657 | |||||||||||
Unallocated general and administrative expenses | (11) | (21) | (39) | (54) | |||||||||||
Operating Income | 224 | 179 | 796 | 603 | |||||||||||
Interest and financing costs, net | (61) | (137) | (233) | (330) | |||||||||||
Equity in earnings of equity method investments | 6 | 9 | 31 | 22 | |||||||||||
Other income, net | 2 | 2 | 6 | 11 | |||||||||||
Earnings Before Income Taxes | $ | 171 | $ | 53 | $ | 600 | $ | 306 | |||||||
Depreciation and Amortization Expenses | |||||||||||||||
Terminalling and Transportation | $ | 40 | $ | 32 | $ | 144 | $ | 117 | |||||||
Gathering and Processing | 59 | 57 | 213 | 191 | |||||||||||
Wholesale | 2 | 2 | 11 | 5 | |||||||||||
Total Depreciation and Amortization Expenses | $ | 101 | $ | 91 | $ | 368 | $ | 313 | |||||||
Segment EBITDA (d) | |||||||||||||||
Terminalling and Transportation | $ | 186 | $ | 146 | $ | 660 | $ | 530 | |||||||
Gathering and Processing | 146 | 147 | 537 | 446 | |||||||||||
Wholesale | 7 | 8 | 38 | 20 | |||||||||||
Total Segment EBITDA | $ | 339 | $ | 301 | $ | 1,235 | $ | 996 | |||||||
Capital Expenditures | |||||||||||||||
Terminalling and Transportation | $ | 50 | $ | 61 | $ | 205 | $ | 188 | |||||||
Gathering and Processing | 177 | 90 | 545 | 175 | |||||||||||
Wholesale | — | — | 1 | — | |||||||||||
Total Capital Expenditures | $ | 227 | $ | 151 | $ | 751 | $ | 363 | |||||||
(d) | See "Non-GAAP Reconciliations" section below for further information regarding this non-GAAP measure. |
Andeavor Logistics LP | |||||||||||||||
Components of Cash Flows (Unaudited) (In millions) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2018 | 2017 (a) | 2018 (a) | 2017 (a) | ||||||||||||
Cash Flows From (Used In) | |||||||||||||||
Net earnings | $ | 171 | $ | 53 | $ | 600 | $ | 306 | |||||||
Depreciation and amortization expenses | 101 | 91 | 368 | 313 | |||||||||||
Changes in assets and liabilities | 24 | (65) | 17 | (14) | |||||||||||
Other operating activities | 14 | 84 | 44 | 82 | |||||||||||
Net Cash Flows from Operating Activities | 310 | 163 | 1,029 | 687 | |||||||||||
Investing Activities | (236) | (129) | (1,181) | (1,533) | |||||||||||
Financing Activities | (94) | 3 | 87 | 233 | |||||||||||
Increase (Decrease) in Cash and Cash Equivalents | $ | (20) | $ | 37 | $ | (65) | $ | (613) | |||||||
Andeavor Logistics LP | |||||||||||||||
Selected Operating Segment Data (Unaudited) | |||||||||||||||
(In millions, except volumes and revenue per barrel) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2018 | 2017 (a) | 2018 (a) | 2017 (a) | ||||||||||||
Terminalling and Transportation Segment | |||||||||||||||
Revenues | |||||||||||||||
Terminalling | $ | 245 | $ | 197 | $ | 888 | $ | 690 | |||||||
Pipeline transportation | 45 | 33 | 160 | 130 | |||||||||||
Other revenues | 2 | 9 | 6 | 18 | |||||||||||
Total Revenues | 292 | 239 | 1,054 | 838 | |||||||||||
Costs and Expenses | |||||||||||||||
Operating expenses (e) | 94 | 86 | 373 | 302 | |||||||||||
Depreciation and amortization expenses | 40 | 32 | 144 | 117 | |||||||||||
General and administrative expenses | 11 | 14 | 38 | 47 | |||||||||||
Loss (gain) on asset disposals and impairments | 1 | — | 1 | (25) | |||||||||||
Terminalling and Transportation Segment Operating Income | $ | 146 | $ | 107 | $ | 498 | $ | 397 | |||||||
Volumes | |||||||||||||||
Terminalling throughput (Mbpd) | 1,667 | 1,702 | 1,759 | 1,452 | |||||||||||
Average terminalling revenue per barrel (f) | $ | 1.61 | $ | 1.26 | $ | 1.38 | $ | 1.30 | |||||||
Pipeline transportation throughput (Mbpd) | 1,067 | 946 | 1,012 | 902 | |||||||||||
Average pipeline transportation revenue per barrel (f) | $ | 0.46 | $ | 0.39 | $ | 0.43 | $ | 0.40 | |||||||
(e) | Operating expenses include an imbalance settlement gain of $2 million and $5 million for the three and twelve months ended December 31, 2017, respectively. There were no gains for the three and twelve months ended December 31, 2018. | ||
(f) | Management uses average margin per barrel, average revenue per Million British thermal units ("MMBtu"), average revenue per barrel and fuel sales per gallon to evaluate performance and compare profitability to other companies in the industry. | ||
-
| Average terminalling revenue per barrel—calculated as total terminalling revenue divided by terminalling throughput presented in thousands of barrels per day ("Mbpd") multiplied by 1,000 and multiplied by the number of days in the period (92 days for both the three months ended December 31, 2018 and 2017 and 365 days for both the twelve months ended December 31, 2018 and 2017); | ||
- | Average pipeline transportation revenue per barrel—calculated as total pipeline transportation revenue divided by pipeline transportation throughput presented in Mbpd multiplied by 1,000 and multiplied by the number of days in the period as outlined above; | ||
- | Average margin on NGL sales per barrel—calculated as the difference between the NGL sales revenues and the amounts recognized as NGL expense divided by our NGL sales volumes presented in Mbpd multiplied by 1,000 and multiplied by the number of days in the period as outlined above; | ||
- | Average gas gathering and processing revenue per MMBtu—calculated as total gathering and processing fee-based revenue divided by gas gathering throughput presented in thousands of MMBtu per day ("MMBtu/d") multiplied by 1,000 and multiplied by the number of days in the period as outlined above; | ||
- | Average crude oil and water gathering revenue per barrel—calculated as total crude oil and water gathering fee-based revenue divided by crude oil and water gathering throughput presented in Mbpd multiplied by 1,000 and multiplied by the number of days in the period as outlined above; and | ||
- | Wholesale fuel sales per gallon - calculated as wholesale fuel revenues divided by our total wholesale fuel sales volume in gallons. | ||
There are a variety of ways to calculate these measures; other companies may calculate these in a different way. Amounts may not recalculate due to rounding of dollar and volume information. | |||
Andeavor Logistics LP | |||||||||||||||
Selected Operating Segment Data (Unaudited) | |||||||||||||||
(In millions, except volumes, margin per barrel, revenue per barrel and revenue per MMBtu) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2018 | 2017 (a) | 2018 (a) | 2017 (a) | ||||||||||||
Gathering and Processing Segment | |||||||||||||||
Revenues | |||||||||||||||
NGL sales (g) | $ | 100 | $ | 115 | $ | 436 | $ | 369 | |||||||
Gas gathering and processing | 81 | 81 | 330 | 333 | |||||||||||
Crude oil and water gathering | 95 | 92 | 336 | 262 | |||||||||||
Pass-thru and other (h) | 42 | 45 | 161 | 165 | |||||||||||
Total Revenues | 318 | 333 | 1,263 | 1,129 | |||||||||||
Costs and Expenses | |||||||||||||||
NGL expense (excluding items shown separately below) (g) | 40 | 86 | 206 | 265 | |||||||||||
Operating expenses (i) | 128 | 90 | 489 | 374 | |||||||||||
Depreciation and amortization expenses | 59 | 57 | 213 | 191 | |||||||||||
General and administrative expenses | 6 | 13 | 42 | 54 | |||||||||||
Loss on asset disposals and impairments | 1 | — | 3 | — | |||||||||||
Gathering and Processing Segment Operating Income | $ | 84 | $ | 87 | $ | 310 | $ | 245 | |||||||
Volumes | |||||||||||||||
NGL sales (Mbpd) (g) | 11.4 | 11.4 | 10.4 | 8.3 | |||||||||||
Average margin on NGL sales per barrel (d)(f)(g)(h) | $ | 54.77 | $ | 28.10 | $ | 59.92 | $ | 34.77 | |||||||
Gas gathering and processing throughput (thousands of | 716 | 988 | 763 | 963 | |||||||||||
Average gas gathering and processing revenue per MMBtu | $ | 1.24 | $ | 0.89 | $ | 1.19 | $ | 0.95 | |||||||
Crude oil and water gathering volume (Mbpd) | 522 | 444 | 450 | 385 | |||||||||||
Average crude oil and water gathering revenue per barrel (f) | $ | 1.97 | $ | 2.25 | $ | 2.05 | $ | 1.86 | |||||||
(g) | We had 24.6 Mbpd and 24.4 Mbpd of NGL sales under percent of proceeds ("POP") and keep-whole arrangements, for the three and twelve months ended December 31, 2018, respectively, and 25.6 Mbpd and 22.2 Mbpd for the three and twelve months ended December 31, 2017, respectively, of which we retained 11.4 Mbpd, 10.4 Mbpd, 11.4 Mbpd and 8.3 Mbpd, respectively. The difference between gross sales barrels and barrels retained is reflected in NGL expense resulting from the gross presentation required for the POP arrangements. Volumes represent barrels sold under our keep-whole arrangements, net barrels retained under our POP arrangements and other associated products. |
(h) | Included in NGL expense for the twelve months ended December 31, 2017 were approximately $2 million of crude costs related to crude oil volumes obtained in connection with the acquisition of our North Dakota gathering and processing assets. The corresponding revenues were recognized in pass-thru and other revenue. As such, the calculation of the average margin on NGL sales per barrel excludes this amount. |
(i) | Operating expenses include an imbalance settlement gain of $4 million and $8 million for the three and twelve months ended December 31, 2017, respectively. There were no gains for the three and twelve months ended December 31, 2018. |
(j) | The adoption of ASC 606 changed the presentation of our gas gathering and processing throughput volumes. Volumes processed internally to enhance our NGL sales are no longer reported in our throughput volumes as certain fees contained within our commodity contracts are now reported as a reduction of "NGL expense." The impact of the adoption was 193 thousand MMBtu/d and 176 thousand MMBtu/d for the three and twelve months ended December 31, 2018, respectively, now being used internally and not reported in the throughput volumes used to calculate our average gas gathering and processing revenue per MMBtu. |
Andeavor Logistics LP | |||||||||||||||
Selected Operating Segment Data (Unaudited) | |||||||||||||||
(In millions, except per gallon) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2018 | 2017 (a) | 2018 | 2017 (a) | ||||||||||||
Wholesale Segment | |||||||||||||||
Revenues | |||||||||||||||
Fuel sales (c) | $ | 9 | $ | 537 | $ | 46 | $ | 1,267 | |||||||
Other wholesale | 8 | 5 | 33 | 15 | |||||||||||
Total Revenues | 17 | 542 | 79 | 1,282 | |||||||||||
Costs and Expenses | |||||||||||||||
Cost of fuel and other (excluding items shown separately | — | 528 | — | 1,244 | |||||||||||
Operating expenses | 9 | 3 | 39 | 15 | |||||||||||
Depreciation and amortization expenses | 2 | 2 | 11 | 5 | |||||||||||
General and administrative expenses | 1 | 3 | 2 | 3 | |||||||||||
Wholesale Operating Income | $ | 5 | $ | 6 | $ | 27 | 15 | ||||||||
Volumes | |||||||||||||||
Fuel sales volumes (millions of gallons) | 314 | 292 | 1,218 | 722 | |||||||||||
Wholesale fuel sales per gallon (f) | 3.0 | ¢ | 3.8 | ¢ | |||||||||||
Average wholesale fuel sales margin per gallon (c)(d) | 3.0 | ¢ | 3.0 | ¢ | |||||||||||
Non-GAAP Reconciliations
Andeavor Logistics LP | |||||||||||||||
Reconciliation of Amounts Reported Under U.S. GAAP (Unaudited) | |||||||||||||||
(In millions, except ratios) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2018 | 2017 (a) | 2018 (a) | 2017 (a) | ||||||||||||
Reconciliation of Net Earnings to EBITDA | |||||||||||||||
Net earnings | $ | 171 | $ | 53 | $ | 600 | $ | 306 | |||||||
Depreciation and amortization expenses | 101 | 91 | 368 | 313 | |||||||||||
Interest and financing costs, net of capitalized interest | 61 | 137 | 233 | 330 | |||||||||||
EBITDA | 333 | 281 | 1,201 | 949 | |||||||||||
Predecessor impact | — | (12) | 12 | 8 | |||||||||||
Maintenance capital expenditures (k) | (41) | (39) | (111) | (119) | |||||||||||
Reimbursement for maintenance capital expenditures (k) | 14 | 9 | 33 | 31 | |||||||||||
Changes in deferred revenue (l) | (5) | (2) | 3 | 3 | |||||||||||
Net (gain) loss on asset disposals and impairments | 2 | — | 4 | (25) | |||||||||||
Interest and financing costs, net | (61) | (137) | (233) | (330) | |||||||||||
Proceeds from sale of assets | — | 1 | — | 29 | |||||||||||
Amortized debt costs | 2 | 77 | 10 | 85 | |||||||||||
Adjustments for equity method investments | 4 | 3 | 17 | 18 | |||||||||||
Other (m) | 5 | 10 | 12 | 19 | |||||||||||
Distributable Cash Flow | 253 | 191 | 948 | 668 | |||||||||||
Less: Preferred unit distributions (n) | (10) | (3) | (41) | (3) | |||||||||||
Distributable Cash Flow Attributable to Common | $ | 243 | $ | 188 | $ | 907 | $ | 665 | |||||||
(k) | We adjust our reconciliation of distributable cash flows for maintenance capital expenditures, tank restoration costs and expenditures required to ensure the safety, reliability, integrity and regulatory compliance of our assets with an offset for any reimbursements received for such expenditures. |
(l) | Included in changes in deferred revenue are adjustments to remove the impact of the adoption of the new revenue recognition accounting standard on January 1, 2018 as well as the impact from the timing of recognition with certain of our contracts that contain minimum volume commitment with clawback provisions, which are predominantly recognized annually in the third quarter based on current contract terms. |
(m) | Other includes transaction costs related to recent acquisitions, settlement expenses and unit-based compensation expense. |
(n) | Represents the cash distributions earned by the Preferred Units for the three and twelve months ended December 31, 2018 assuming a distribution is declared by the Board of Directors. Cash distributions to be paid to holders of the Preferred Units are not available to common unitholders. |
Three Months Ended | Twelve Months Ended | ||||||||||||||
2018 | 2017 (a) | 2018 (a) | 2017 (a) | ||||||||||||
Reconciliation of Net Cash from Operating Activities to | |||||||||||||||
Net cash from operating activities | $ | 310 | $ | 163 | $ | 1,029 | $ | 687 | |||||||
Changes in assets and liabilities | (24) | 65 | (17) | 14 | |||||||||||
Predecessors impact | — | (12) | 12 | 8 | |||||||||||
Maintenance capital expenditures (k) | (41) | (39) | (111) | (119) | |||||||||||
Reimbursement for maintenance capital expenditures (k) | 14 | 9 | 33 | 31 | |||||||||||
Adjustments for equity method investments | (1) | (2) | (4) | 3 | |||||||||||
Proceeds from sale of assets | — | 1 | — | 29 | |||||||||||
Changes in deferred revenue (l) | (5) | (2) | 3 | 3 | |||||||||||
Other (o) | — | 8 | 3 | 12 | |||||||||||
Distributable Cash Flow | 253 | 191 | 948 | 668 | |||||||||||
Less: Preferred unit distributions (n) | (10) | (3) | (41) | (3) | |||||||||||
Distributable Cash Flow Attributable to Common | $ | 243 | $ | 188 | $ | 907 | $ | 665 | |||||||
(o) | Other includes transaction costs related to recent acquisitions and settlement expenses. |
Three Months Ended | Twelve Months Ended | |||||||||||||
2018 | 2017 (a) | 2018 (a) | 2017 (a) | |||||||||||
Distributions | ||||||||||||||
Limited partner's distributions on common units | $ | 238 | $ | 204 | $ | 890 | $ | 611 | ||||||
General partner's distributions including IDRs | — | — | — | 81 | ||||||||||
Distributions on preferred units | 10 | 3 | 41 | 3 | ||||||||||
Total Distributions to be Paid | 248 | 207 | 931 | 695 | ||||||||||
Less: Distributions on preferred units | (10) | (3) | (41) | (3) | ||||||||||
Total Distributions to be Paid to Common Unitholders | $ | 238 | $ | 204 | $ | 890 | $ | 692 | ||||||
Distributable Cash Flow Attributable to Common | $ | 243 | $ | 188 | $ | 907 | $ | 665 | ||||||
Distribution Coverage Ratio | 1.02x | 0.92x | 1.02x | 0.96x | ||||||||||
Andeavor Logistics LP | |||||||||||||||
Segment Reconciliation of Amounts Reported Under U.S. GAAP (Unaudited) | |||||||||||||||
(In millions) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2018 | 2017 (a) | 2018 (a) | 2017 (a) | ||||||||||||
Reconciliation of Segment Operating Income to Segment | |||||||||||||||
Terminalling and Transportation segment operating income | $ | 146 | $ | 107 | $ | 498 | $ | 397 | |||||||
Depreciation and amortization expenses | 40 | 32 | 144 | 117 | |||||||||||
Equity in earnings of equity method investments | 3 | 6 | 17 | 12 | |||||||||||
Other income (expense), net | (3) | 1 | 1 | 4 | |||||||||||
Terminalling and Transportation Segment EBITDA | $ | 186 | $ | 146 | $ | 660 | $ | 530 | |||||||
Gathering and Processing segment operating income | $ | 84 | $ | 87 | $ | 310 | $ | 245 | |||||||
Depreciation and amortization expenses | 59 | 57 | 213 | 191 | |||||||||||
Equity in earnings of equity method investments | 3 | 3 | 14 | 10 | |||||||||||
Gathering and Processing Segment EBITDA | $ | 146 | $ | 147 | $ | 537 | $ | 446 | |||||||
Wholesale segment operating income | $ | 5 | $ | 6 | $ | 27 | $ | 15 | |||||||
Depreciation and amortization expenses | 2 | 2 | 11 | 5 | |||||||||||
Wholesale Segment EBITDA | $ | 7 | $ | 8 | $ | 38 | $ | 20 | |||||||
Andeavor Logistics LP | |||||||||||||||
Average Margin on NGL Sales per Barrel (Unaudited) | |||||||||||||||
(In millions, except days and per barrel amounts) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2018 | 2017 (a) | 2018 (a) | 2017 (a) | ||||||||||||
Segment Operating Income | $ | 84 | $ | 87 | $ | 310 | $ | 245 | |||||||
Add back: | |||||||||||||||
Operating expenses | 128 | 90 | 489 | 374 | |||||||||||
General and administrative expenses | 6 | 13 | 42 | 54 | |||||||||||
Depreciation and amortization expenses | 59 | 57 | 213 | 191 | |||||||||||
Loss on asset disposals and impairments | 1 | — | 3 | — | |||||||||||
Other commodity purchases (h) | — | — | — | 2 | |||||||||||
Subtract: | |||||||||||||||
Gas gathering and processing revenues | (81) | (81) | (330) | (333) | |||||||||||
Crude oil gathering revenues | (95) | (92) | (336) | (262) | |||||||||||
Pass-thru and other revenues | (42) | (45) | (161) | (165) | |||||||||||
Margin on NGL Sales | $ | 60 | $ | 29 | $ | 230 | $ | 106 | |||||||
Divided by Total Volumes for the Period: | |||||||||||||||
NGLs sales volumes (Mbpd) | 11.4 | 11.4 | 10.4 | 8.3 | |||||||||||
Number of days in the period | 92 | 92 | 365 | 365 | |||||||||||
Total volumes for the period (thousands of barrels) (p) | 1,049 | 1,049 | 3,796 | 3,030 | |||||||||||
Average Margin on NGL Sales per Barrel (p) | $ | 54.77 | $ | 28.10 | $ | 59.92 | $ | 34.77 | |||||||
(p) | Amounts may not recalculate due to rounding of dollar and volume information. |
Andeavor Logistics LP | |||||||
Average Wholesale Fuel Sales Margin per Gallon (Unaudited) | |||||||
(In millions, except per gallon amounts) | |||||||
Three Months | Seven-Month | ||||||
December 31, 2017 (a) | |||||||
Segment Operating Income | $ | 6 | $ | 15 | |||
Add back: | |||||||
Operating expenses (excluding depreciation and amortization) | 3 | 15 | |||||
Depreciation and amortization expenses | 2 | 5 | |||||
General and administrative expenses | 3 | 3 | |||||
Subtract: | |||||||
Other wholesale revenues | (5) | (15) | |||||
Wholesale Fuel Sales Margin | $ | 9 | $ | 23 | |||
Divided by Total Volumes for the Period: | |||||||
Fuel sales volumes (millions of gallons) | 292 | 722 | |||||
Average Wholesale Fuel Sales Margin per Gallon (p) | 3.0 | ¢ | 3.0 | ¢ | |||
Andeavor Logistics LP | |||||||||||||||
Selected Financial Data (Unaudited) (In millions) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2018 | 2017 (a) | 2018 (a) | 2017 (a) | ||||||||||||
Capital Expenditures | |||||||||||||||
Growth | $ | 197 | $ | 122 | $ | 667 | $ | 266 | |||||||
Maintenance | 30 | 29 | 84 | 97 | |||||||||||
Total Capital Expenditures | $ | 227 | $ | 151 | $ | 751 | $ | 363 | |||||||
Capital Expenditures, Net of Reimbursements | |||||||||||||||
Growth | $ | 181 | $ | 119 | $ | 635 | $ | 246 | |||||||
Maintenance | 18 | 17 | 60 | 76 | |||||||||||
Total Capital Expenditures, Net of Reimbursements | $ | 199 | $ | 136 | $ | 695 | $ | 322 | |||||||
Capital Expenditures, Andeavor Logistics LP (q) | |||||||||||||||
Growth | $ | 197 | $ | 60 | $ | 503 | $ | 160 | |||||||
Maintenance | 30 | 24 | 78 | 77 | |||||||||||
Total Capital Expenditures, Andeavor Logistics LP | $ | 227 | $ | 84 | $ | 581 | $ | 237 | |||||||
Capital Expenditures, Net of Reimbursements, Andeavor Logistics LP (q) | |||||||||||||||
Growth | $ | 181 | $ | 57 | $ | 471 | $ | 140 | |||||||
Maintenance | 18 | 12 | 54 | 56 | |||||||||||
Total Capital Expenditures, Net of Reimbursements, Andeavor Logistics LP | $ | 199 | $ | 69 | $ | 525 | $ | 196 | |||||||
Capital Expenditures, Predecessors | |||||||||||||||
Growth | $ | — | $ | 62 | $ | 164 | $ | 106 | |||||||
Maintenance | — | 5 | 6 | 20 | |||||||||||
Total Capital Expenditures, Predecessors | $ | — | $ | 67 | $ | 170 | $ | 126 | |||||||
Deferred Costs | |||||||||||||||
Turnarounds & Catalysts | $ | 6 | $ | 3 | $ | 12 | $ | 16 | |||||||
Tank Restoration | 8 | 2 | 22 | 12 | |||||||||||
Total Deferred Costs | $ | 14 | $ | 5 | $ | 34 | $ | 28 | |||||||
(q) | We believe that this presentation of our results of operations, excluding results of our Predecessors, will provide useful information to investors in assessing our results of operations. This non-GAAP financial measure should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. |
Three Months Ended | Twelve Months Ended | |||||||||||||
2018 | 2017 (a) | 2018 (a) | 2017 (a) | |||||||||||
General and Administrative Expenses | ||||||||||||||
Terminalling and Transportation | $ | 11 | $ | 14 | $ | 38 | $ | 47 | ||||||
Gathering and Processing | 6 | 13 | 42 | 54 | ||||||||||
Wholesale | 1 | 3 | 2 | 3 | ||||||||||
Unallocated | 11 | 21 | 39 | 54 | ||||||||||
Total General and Administrative Expenses | $ | 29 | $ | 51 | $ | 121 | $ | 158 | ||||||
Andeavor Logistics LP | |||||||||||||||||||||||
Reconciliation of Combined Financial Statements (Unaudited) | |||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Three Months Ended December 31, 2018 | Twelve Months Ended December 31, 2018 | ||||||||||||||||||||||
Combined | Andeavor | Predecessors | Combined | Andeavor | Predecessors | ||||||||||||||||||
Revenues | |||||||||||||||||||||||
Affiliate | $ | 458 | $ | 458 | $ | — | $ | 1,589 | $ | 1,568 | $ | 21 | |||||||||||
Third-party | 165 | 165 | — | 791 | 782 | 9 | |||||||||||||||||
Total Revenues | 623 | 623 | — | 2,380 | 2,350 | 30 | |||||||||||||||||
Costs and Expenses | |||||||||||||||||||||||
NGL expense (exclusive of items | 40 | 40 | — | 206 | 206 | — | |||||||||||||||||
Operating expenses (exclusive of | 227 | 227 | — | 885 | 845 | 40 | |||||||||||||||||
Depreciation and amortization expenses | 101 | 101 | — | 368 | 347 | 21 | |||||||||||||||||
General and administrative expenses | 29 | 29 | — | 121 | 111 | 10 | |||||||||||||||||
Loss on asset disposals and | 2 | 2 | — | 4 | 4 | — | |||||||||||||||||
Operating Income (Loss) | 224 | 224 | — | 796 | 837 | (41) | |||||||||||||||||
Interest and financing costs, net | (61) | (61) | — | (233) | (229) | (4) | |||||||||||||||||
Equity in earnings of equity method | 6 | 6 | — | 31 | 15 | 16 | |||||||||||||||||
Other income, net | 2 | 2 | — | 6 | 5 | 1 | |||||||||||||||||
Net Earnings (Loss) | $ | 171 | $ | 171 | $ | — | $ | 600 | $ | 628 | $ | (28) | |||||||||||
Loss attributable to Predecessors | — | — | — | 28 | — | 28 | |||||||||||||||||
Net Earnings Attributable to | 171 | 171 | — | 628 | 628 | — | |||||||||||||||||
Preferred unitholders' interest in net | (10) | (10) | — | (44) | (44) | — | |||||||||||||||||
Limited Partners' Interest in Net | $ | 161 | $ | 161 | $ | — | $ | 584 | $ | 584 | $ | — | |||||||||||
Andeavor Logistics LP | |||||||||||||||||||||||
Reconciliation of Combined Financial Statements (Unaudited) | |||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Three Months Ended December 31, 2017 | Twelve Months Ended December 31, 2017 | ||||||||||||||||||||||
Combined | Andeavor | Predecessors | Combined | Andeavor | Predecessors | ||||||||||||||||||
Revenues | |||||||||||||||||||||||
Affiliate | $ | 480 | $ | 385 | $ | 95 | $ | 1,431 | $ | 1,009 | $ | 422 | |||||||||||
Third-party | 634 | 489 | 145 | 1,818 | 1,142 | 676 | |||||||||||||||||
Total Revenues | 1,114 | 874 | 240 | 3,249 | 2,151 | 1,098 | |||||||||||||||||
Costs and Expenses | |||||||||||||||||||||||
Cost of fuel and other (exclusive of | 528 | 330 | 198 | 1,244 | 330 | 914 | |||||||||||||||||
NGL expense (exclusive of items | 86 | 86 | — | 265 | 265 | — | |||||||||||||||||
Operating expenses (exclusive of | 179 | 155 | 24 | 691 | 554 | 137 | |||||||||||||||||
Depreciation and amortization | 91 | 77 | 14 | 313 | 255 | 58 | |||||||||||||||||
General and administrative expenses | 51 | 43 | 8 | 158 | 121 | 37 | |||||||||||||||||
Gain on asset disposals and | — | — | — | (25) | (24) | (1) | |||||||||||||||||
Operating Income (Loss) | 179 | 183 | (4) | 603 | 650 | (47) | |||||||||||||||||
Interest and financing costs, net | (137) | (137) | — | (330) | (321) | (9) | |||||||||||||||||
Equity in earnings of equity method | 9 | 3 | 6 | 22 | 10 | 12 | |||||||||||||||||
Other income, net | 2 | 1 | 1 | 11 | 10 | 1 | |||||||||||||||||
Net Earnings (Loss) | $ | 53 | $ | 50 | $ | 3 | $ | 306 | $ | 349 | $ | (43) | |||||||||||
Loss (earnings) attributable to | (3) | — | (3) | 43 | — | 43 | |||||||||||||||||
Net Earnings Attributable to Partners | 50 | 50 | — | 349 | 349 | — | |||||||||||||||||
Preferred unitholders' interest in net earnings | (3) | (3) | — | (3) | (3) | — | |||||||||||||||||
General partner's interest in net | — | — | — | (79) | (79) | — | |||||||||||||||||
Limited Partners' Interest in Net | $ | 47 | $ | 47 | $ | — | $ | 267 | $ | 267 | $ | — | |||||||||||
Andeavor Logistics LP | |||||||||||||||||||||||
Terminalling and Transportation Segment Reconciliation of Combined Financial Statements | |||||||||||||||||||||||
(Unaudited) (In millions) | |||||||||||||||||||||||
Three Months Ended December 31, 2018 | Twelve Months Ended December 31, 2018 | ||||||||||||||||||||||
Combined | Andeavor | Predecessors | Combined | Andeavor | Predecessors | ||||||||||||||||||
Revenues | |||||||||||||||||||||||
Terminalling | $ | 245 | $ | 245 | $ | — | $ | 888 | $ | 885 | $ | 3 | |||||||||||
Pipeline transportation | 45 | 45 | — | 160 | 160 | — | |||||||||||||||||
Other revenues | 2 | 2 | — | 6 | 6 | — | |||||||||||||||||
Terminalling and Transportation | 292 | 292 | — | 1,054 | 1,051 | 3 | |||||||||||||||||
Costs and Expenses | |||||||||||||||||||||||
Operating expenses (exclusive of | 94 | 94 | — | 373 | 339 | 34 | |||||||||||||||||
Depreciation and amortization | 40 | 40 | — | 144 | 134 | 10 | |||||||||||||||||
General and administrative expenses | 11 | 11 | — | 38 | 35 | 3 | |||||||||||||||||
Gain on asset disposals and | 1 | 1 | — | 1 | 1 | — | |||||||||||||||||
Terminalling and Transportation | 146 | 146 | — | 498 | 542 | (44) | |||||||||||||||||
Depreciation and amortization | 40 | 40 | — | 144 | 134 | 10 | |||||||||||||||||
Equity in earnings of unconsolidated | 3 | 3 | — | 17 | 4 | 13 | |||||||||||||||||
Other income, net | (3) | (3) | — | 1 | — | 1 | |||||||||||||||||
Terminalling and Transportation | $ | 186 | $ | 186 | $ | — | $ | 660 | $ | 680 | $ | (20) | |||||||||||
Three Months Ended December 31, 2017 | Twelve Months Ended December 31, 2017 | ||||||||||||||||||||||
Combined | Andeavor | Predecessors | Combined | Andeavor | Predecessors | ||||||||||||||||||
Revenues | |||||||||||||||||||||||
Terminalling | $ | 197 | $ | 185 | $ | 12 | $ | 690 | $ | 632 | $ | 58 | |||||||||||
Pipeline transportation | 33 | 33 | — | 130 | 130 | — | |||||||||||||||||
Other revenues | 9 | 7 | 2 | 18 | 7 | 11 | |||||||||||||||||
Terminalling and Transportation | 239 | 225 | 14 | 838 | 769 | 69 | |||||||||||||||||
Costs and Expenses | |||||||||||||||||||||||
Operating expenses (exclusive of | 86 | 66 | 20 | 302 | 215 | 87 | |||||||||||||||||
Depreciation and amortization | 32 | 29 | 3 | 117 | 97 | 20 | |||||||||||||||||
General and administrative | 14 | 12 | 2 | 47 | 35 | 12 | |||||||||||||||||
Gain on asset disposals and | — | — | — | (25) | (25) | — | |||||||||||||||||
Terminalling and Transportation | 107 | 118 | (11) | 397 | 447 | (50) | |||||||||||||||||
Depreciation and amortization | 32 | 29 | 3 | 117 | 97 | 20 | |||||||||||||||||
Equity in earnings of unconsolidated | 6 | — | 6 | 12 | — | 12 | |||||||||||||||||
Other income, net | 1 | — | 1 | 4 | 3 | 1 | |||||||||||||||||
Terminalling and Transportation | $ | 146 | $ | 147 | $ | (1) | $ | 530 | $ | 547 | $ | (17) | |||||||||||
Andeavor Logistics LP | |||||||||||||||||||||||
Gathering and Processing Segment Reconciliation of Combined Financial Statements | |||||||||||||||||||||||
(Unaudited) (In millions) | |||||||||||||||||||||||
Three Months Ended December 31, 2018 | Twelve Months Ended December 31, 2018 | ||||||||||||||||||||||
Combined | Andeavor | Predecessors | Combined | Andeavor | Predecessors | ||||||||||||||||||
Revenues | |||||||||||||||||||||||
NGL sales | $ | 100 | $ | 100 | $ | — | $ | 436 | $ | 436 | $ | — | |||||||||||
Gas gathering and processing | 81 | 81 | — | 330 | 330 | — | |||||||||||||||||
Crude oil and water gathering | 95 | 95 | — | 336 | 309 | 27 | |||||||||||||||||
Pass-thru and other | 42 | 42 | — | 161 | 161 | — | |||||||||||||||||
Total Revenues | 318 | 318 | — | 1,263 | 1,236 | 27 | |||||||||||||||||
Costs and Expenses | |||||||||||||||||||||||
NGL expense (exclusive of items | 40 | 40 | — | 206 | 206 | — | |||||||||||||||||
Operating expenses (exclusive of | 128 | 128 | — | 489 | 483 | 6 | |||||||||||||||||
Depreciation and amortization | 59 | 59 | — | 213 | 201 | 12 | |||||||||||||||||
General and administrative expenses | 6 | 6 | — | 42 | 36 | 6 | |||||||||||||||||
Loss on asset disposals and | 1 | 1 | — | 3 | 3 | — | |||||||||||||||||
Gathering and Processing Segment | 84 | 84 | — | 310 | 307 | 3 | |||||||||||||||||
Depreciation and amortization | 59 | 59 | — | 213 | 201 | 12 | |||||||||||||||||
Equity in earnings of equity method | 3 | 3 | — | 14 | 11 | 3 | |||||||||||||||||
Gathering and Processing Segment | $ | 146 | $ | 146 | $ | — | $ | 537 | $ | 519 | $ | 18 | |||||||||||
Three Months Ended December 31, 2017 | Twelve Months Ended December 31, 2017 | ||||||||||||||||||||||
Combined | Andeavor | Predecessors | Combined | Andeavor | Predecessors | ||||||||||||||||||
Revenues | |||||||||||||||||||||||
NGL sales | $ | 115 | $ | 115 | $ | — | $ | 369 | $ | 369 | $ | — | |||||||||||
Gas gathering and processing | 81 | 81 | — | 333 | 333 | — | |||||||||||||||||
Crude oil and water gathering | 92 | 73 | 19 | 262 | 189 | 73 | |||||||||||||||||
Pass-thru and other | 45 | 42 | 3 | 165 | 153 | 12 | |||||||||||||||||
Total Revenues | 333 | 311 | 22 | 1,129 | 1,044 | 85 | |||||||||||||||||
Costs and Expenses | |||||||||||||||||||||||
NGL expense (exclusive of items | 86 | 86 | — | 265 | 265 | — | |||||||||||||||||
Operating expenses (exclusive of | 90 | 87 | 3 | 374 | 337 | 37 | |||||||||||||||||
Depreciation and amortization | 57 | 46 | 11 | 191 | 156 | 35 | |||||||||||||||||
General and administrative expenses | 13 | 11 | 2 | 54 | 44 | 10 | |||||||||||||||||
(Gain) loss on asset disposals and | — | — | — | — | 1 | (1) | |||||||||||||||||
Gathering and Processing Segment | 87 | 81 | 6 | 245 | 241 | 4 | |||||||||||||||||
Depreciation and amortization | 57 | 46 | 11 | 191 | 156 | 35 | |||||||||||||||||
Equity in earnings of equity method | 3 | 3 | — | 10 | 10 | — | |||||||||||||||||
Gathering and Processing Segment | $ | 147 | $ | 130 | $ | 17 | $ | 446 | $ | 407 | $ | 39 | |||||||||||
Andeavor Logistics LP | |||||||||||||||||||||||
Wholesale Segment Reconciliation of Combined Financial Statements | |||||||||||||||||||||||
(Unaudited) (In millions) | |||||||||||||||||||||||
Three Months Ended December 31, 2017 | Twelve Months Ended December 31, 2017 | ||||||||||||||||||||||
Combined | Andeavor | Predecessors | Combined | Andeavor | Predecessors | ||||||||||||||||||
Revenues | |||||||||||||||||||||||
Fuel sales | $ | 537 | $ | 337 | $ | 200 | $ | 1,267 | $ | 337 | $ | 930 | |||||||||||
Other wholesale | 5 | 1 | 4 | 15 | 1 | 14 | |||||||||||||||||
Total Revenues | 542 | 338 | 204 | 1,282 | 338 | 944 | |||||||||||||||||
Costs and Expenses | |||||||||||||||||||||||
Cost of fuel and other (excluding | 528 | 330 | 198 | 1,244 | 330 | 914 | |||||||||||||||||
Operating expenses (excluding | 3 | 2 | 1 | 15 | 2 | 13 | |||||||||||||||||
Depreciation and amortization | 2 | 2 | — | 5 | 2 | 3 | |||||||||||||||||
General and administrative expenses | 3 | 2 | 1 | 3 | 2 | 1 | |||||||||||||||||
Wholesale Segment Operating | 6 | 2 | 4 | 15 | 2 | 13 | |||||||||||||||||
Depreciation and amortization | 2 | 2 | — | 5 | 2 | 3 | |||||||||||||||||
Wholesale Segment EBITDA | $ | 8 | $ | 4 | $ | 4 | $ | 20 | $ | 4 | $ | 16 | |||||||||||
Andeavor Logistics LP | |||||||||||
Reconciliation of EBITDA to Amounts Under U.S. GAAP (Unaudited) (In millions) | |||||||||||
2018 Drop Down | |||||||||||
Net Earnings | $ | 55 | |||||||||
Add: Depreciation and amortization expense | 14 | ||||||||||
Add: Interest and financing costs, net | 7 | ||||||||||
EBITDA | $ | 76 | |||||||||
2018 Drop Down Segment EBITDA Contribution Three Months Ended December 31, 2018 | |||||||||||
Terminalling and | Gathering and | Total | |||||||||
Operating Income | $ | 23 | $ | 13 | $ | 36 | |||||
Add: Depreciation and amortization expenses | 3 | 6 | 9 | ||||||||
Add: Equity in earnings of equity method investments | 3 | 2 | 5 | ||||||||
Segment EBITDA | $ | 29 | $ | 21 | $ | 50 | |||||
Andeavor Logistics LP | |||||||
Reconciliation of EBITDA to Amounts Under U.S. GAAP (Unaudited) (In millions) | |||||||
Reconciliation of Projected Annual EBITDA | |||||||
2019E | 2020E | ||||||
Net Earnings | $ | 800 | $ | 800 | |||
Add: Depreciation and amortization expenses | 400 | 500 | |||||
Add: Interest and financing costs, net | 200 | 300 | |||||
EBITDA | $ | 1,400 | $ | 1,600 | |||
Three Months Ended | |||||||||||||||||||
March 31, | June 30, | September 30, | December 31, | Trailing Four | |||||||||||||||
Net Earnings | $ | 131 | $ | 132 | $ | 166 | $ | 171 | $ | 600 | |||||||||
Add: Depreciation and amortization expense | 89 | 93 | 85 | 101 | 368 | ||||||||||||||
Add: Interest and financing costs, net | 55 | 60 | 57 | 61 | 233 | ||||||||||||||
EBITDA | $ | 275 | $ | 285 | $ | 308 | $ | 333 | 1,201 | ||||||||||
Add: Pro forma adjustment for acquisitions | 131 | ||||||||||||||||||
Pro forma LTM EBITDA | $ | 1,332 | |||||||||||||||||
December 31, | ||
Total debt | $ | 5,010 |
Pro forma LTM EBITDA | 1,332 | |
Leverage ratio | 3.8x | |
View original content:http://www.prnewswire.com/news-releases/andeavor-logistics-lp-reports-fourth-quarter-and-full-year-2018-results-300791616.html
SOURCE Andeavor Logistics LP
Article Date
2/7/2019Marathon Petroleum Corp. Reports Fourth-Quarter Results
Source: PR Newswire
FINDLAY, Ohio, Feb. 7, 2019 /PRNewswire/ --
Marathon Petroleum Corp. (NYSE: MPC) today reported fourth-quarter 2018 earnings of $951 million, or $1.35 per diluted share. Earnings included costs of $745 million, or $1.06 per diluted share, due to purchase accounting related inventory effects, expenses associated with the Andeavor combination, and MPLX debt extinguishment costs. This compares with $2.02 billion, or $4.09 per diluted share, in the fourth quarter of 2017. Fourth quarter 2017 results included a benefit of $1.5 billion, or $3.04 per diluted share, resulting from a change in the corporate tax rate.
"This extraordinary fourth quarter represents an early indication of the tremendous value creation opportunities resulting from this powerful combination," said Gary R. Heminger, chairman and chief executive officer. "By executing the strategy outlined during our recent Investor Day, we have realized $160 million of synergies in just three months and continue to expect total annual gross run-rate synergies of up to $600 million at year-end 2019 and $1.4 billion by the end of 2021."
Heminger continued, "These successes combined with a favorable refining margin environment and record performance in our retail segment propelled significant earnings growth during the quarter. Despite normal seasonal trends, we remain optimistic about the prospects for our business in 2019. The transformative combination we have undertaken this past year not only expands our platform and broadens our commercial opportunities, we believe it uniquely positions us to capture market opportunities, enhance the stability of our cash flow, and create long-term value for our shareholders."
In 2018, MPC returned $4.2 billion of capital to shareholders, including $3.3 billion of share repurchases. Additionally, on January 28, 2019, MPC announced a 15 percent increase in the quarterly dividend, to $0.53 per share. The company remains committed to returning at least 50 percent of discretionary free cash flow* to shareholders over the long term through a combination of dividends and share repurchases while maintaining its investment grade credit profile.
Full-year 2018 earnings were $2.78 billion, or $5.28 per diluted share, compared with $3.43 billion, or $6.70 per diluted share, for full-year 2017. 2018 earnings reflect one quarter of results from the combined business following the closing of the Andeavor acquisition on October 1, 2018. Full-year earnings also included costs of $789 million, or $1.50 per diluted share, primarily due to purchase accounting related inventory effects and expenses associated with the Andeavor combination. 2017 earnings included a net benefit of $1.5 billion, or $2.93 per diluted share, resulting from a change in the corporate tax rate.
Total income from operations was $2.02 billion in the fourth quarter of 2018 and $5.57 billion for full-year 2018, compared with $1.17 billion in the fourth quarter of 2017 and $4.02 billion for full-year 2017. MPC reported adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA) of $4.1 billion for the fourth quarter 2018 as compared to $1.8 billion for fourth quarter 2017. See accompanying reconciliation table.
*Discretionary free cash flow = operating cash flow less maintenance and regulatory capital
Synergy Update and Other Items
MPC realized $160 million of synergies related to the Andeavor combination in the fourth quarter. Approximately 60 percent were commercial synergies primarily related to crude acquisition and supply. The remaining synergy capture was the result of implementing refining best practices and expertise across the new enterprise as well as procurement and corporate synergies.
Fourth quarter 2018 results included several factors that reduced reported earnings. MPC's Refining & Marketing (R&M) segment results included estimated costs of $759 million reflecting the difference between recording acquired inventory at fair value on the closing date of the acquisition under purchase accounting and the costs used to value inventory at year end. MPC also incurred $183 million of transaction-related costs for financial and legal advisors, employee severance, and other expenses in connection with the Andeavor acquisition. Lastly, MPLX incurred approximately $60 million of debt extinguishment costs.
Segment Results | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Income from Operations by Segment | |||||||||||||||
Refining & Marketing(a) | $ | 923 | $ | 732 | $ | 2,481 | $ | 2,321 | |||||||
Retail | 613 | 148 | 1,028 | 729 | |||||||||||
Midstream | 889 | 343 | 2,752 | 1,339 | |||||||||||
Items not allocated to segments: | |||||||||||||||
Corporate and other unallocated items | (233) | (114) | (502) | (365) | |||||||||||
Transaction-related costs | (183) | — | (197) | — | |||||||||||
Litigation | — | 57 | — | (29) | |||||||||||
Impairments | 8 | 2 | 9 | 23 | |||||||||||
Income from operations | $ | 2,017 | $ | 1,168 | $ | 5,571 | $ | 4,018 | |||||||
(a) | R&M segment results for the 2018 periods included estimated costs of $759 million due to purchase accounting related inventory effects. |
Refining & Marketing
R&M segment income from operations was $923 million in the fourth quarter of 2018 and $2.48 billion for full-year 2018. Results for the fourth quarter and full-year 2018 included estimated costs of $759 million due to purchase accounting related inventory effects. Fourth quarter and full-year 2017 segment income from operations was $732 million and $2.32 billion, respectively.
The increase in quarter-over-quarter segment results was primarily due to higher throughputs as a result of the Andeavor combination as well as wider WCS- and WTI-based crude differentials. Total refinery utilization was 94 percent during the quarter, resulting in total throughputs of 3.1 million barrels per day, compared to 2.0 million barrels per day in fourth quarter 2017. These favorable effects more than offset the $231 million reduction in R&M segment results associated with the February 1, 2018 dropdown transaction. Prior period R&M segment results do not reflect the impact of the dropdown.
The U.S. Gulf Coast, Chicago, and West Coast blended industry 3-2-1 crack spread was $9.43 in the fourth quarter of 2018 compared to $10.83 in the fourth quarter of 2017. These crack spreads are net of RIN crack adjustments of $0.95 and $3.99 for the fourth quarter of 2018 and 2017, respectively.
Midstream
Midstream segment income from operations, which primarily reflects the results of MPLX and Andeavor Logistics, was $889 million in the fourth quarter of 2018 and $2.75 billion for full-year 2018, compared with $343 million and $1.34 billion for the fourth quarter and full-year 2017, respectively.
The increase in quarterly results was primarily due to contributions of $230 million from Andeavor Logistics, and $231 million from the February 1, 2018, dropdown of refining logistics and fuels distribution services to MPLX. Prior-period Midstream results do not reflect the impact of these items. The remaining $85 million increase in Midstream segment results was driven primarily by MPLX's record pipeline throughput volumes as well as record gathered and processed volumes.
Retail
Retail segment income from operations was $613 million in the fourth quarter of 2018 and $1.03 billion for full-year 2018, compared with $148 million in the fourth quarter of 2017 and $729 million for full-year 2017.
Fourth quarter 2018 results represented a record quarter for MPC's former Speedway segment, even before considering the significant earnings contribution from the legacy Andeavor retail operations. The increase in quarter-over-quarter segment results was primarily due to higher fuel margins and merchandise sales across the combined platform. The retail fuel margin increased to 32.35 cents per gallon in the fourth quarter of 2018 from 17.72 cents per gallon in the fourth quarter of 2017.
MPC continues to make progress converting the acquired company owned-and-operated stores to the Speedway brand, converting 170 sites in Minnesota in the fourth quarter. The company also converted 34 locations to company owned-and-operated stores during the quarter, allowing the company to benefit from merchandise sales at these locations.
Items Not Allocated to Segments
Items not allocated to segments totaled $408 million of expenses in the fourth quarter of 2018 compared to $55 million in the fourth quarter of 2017. The increase for the quarter was primarily due to $183 million of transaction related costs associated with the Andeavor acquisition and the absence of a $57 million litigation gain recognized in fourth quarter 2017. The balance of the increase largely reflects the increased corporate costs and expenses following the acquisition.
Strong Financial Position and Liquidity
On Dec. 31, 2018, the company had $1.61 billion in cash and cash equivalents (excluding MPLX and ANDX's cash and cash equivalents of $68 million and $10 million, respectively), $5.0 billion available under a revolving credit agreement, $1 billion available under a 364-day bank revolving credit facility and $750 million available under its trade receivables securitization facility.
In connection with the redemption of its Senior Notes due 2023 during the quarter, MPLX incurred approximately $60 million of debt extinguishment costs.
Conference Call
At 9 a.m. EST 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 "2018 Fourth-Quarter and Full-Year Financial Results" 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 http://ir.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 with more than 3.0 million barrels per day of crude oil capacity across sixteen refineries. 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 interests in two midstream companies, MPLX LP and Andeavor Logistics LP, which own and operate 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:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
References to Earnings
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, MPC's acquisition of Andeavor and include 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "policy," "position," "potential," "predict," "priority," "project," "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: 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; the potential merger, consolidation or combination of MPLX with ANDX; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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; our ability to manage disruptions in credit markets or changes to our credit rating; future levels of capital, environmental or 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 any common stock repurchases; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan and to effect any share repurchases or dividend increases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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; 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 or ANDX; 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, 2017, and in MPC's Forms 10-Q, filed with Securities and Exchange Commission (SEC). We have based our forward-looking statements on our current expectations, estimates and projections about our 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. Copies of MPC's Form 10-K and Forms 10-Q are available on the SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office.
Consolidated Statements of Income | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
(In millions, except per-share data) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Revenues and other income: | |||||||||||||||
Sales and other operating revenues(a) | $ | 32,151 | $ | 20,884 | $ | 95,750 | $ | 74,104 | |||||||
Sales to related parties | 182 | 171 | 754 | 629 | |||||||||||
Income from equity method investments | 111 | 82 | 373 | 306 | |||||||||||
Net gain (loss) on disposal of assets | 17 | (2) | 23 | 10 | |||||||||||
Other income | 80 | 101 | 202 | 320 | |||||||||||
Total revenues and other income | 32,541 | 21,236 | 97,102 | 75,369 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of revenues (excludes items below)(a) | 28,112 | 18,855 | 85,456 | 66,519 | |||||||||||
Purchases from related parties | 182 | 150 | 610 | 570 | |||||||||||
Depreciation and amortization | 874 | 540 | 2,490 | 2,114 | |||||||||||
Selling, general and administrative expenses | 1,147 | 408 | 2,418 | 1,694 | |||||||||||
Other taxes | 209 | 115 | 557 | 454 | |||||||||||
Total costs and expenses | 30,524 | 20,068 | 91,531 | 71,351 | |||||||||||
Income from operations | 2,017 | 1,168 | 5,571 | 4,018 | |||||||||||
Net interest and other financial costs | 385 | 209 | 1,003 | 674 | |||||||||||
Income before income taxes | 1,632 | 959 | 4,568 | 3,344 | |||||||||||
(Benefit) provision for income taxes | 437 | (1,166) | 962 | (460) | |||||||||||
Net income | 1,195 | 2,125 | 3,606 | 3,804 | |||||||||||
Less net income attributable to: | |||||||||||||||
Redeemable noncontrolling interest | 20 | 16 | 75 | 65 | |||||||||||
Noncontrolling interests | 224 | 93 | 751 | 307 | |||||||||||
Net income attributable to MPC | $ | 951 | $ | 2,016 | $ | 2,780 | $ | 3,432 | |||||||
Per-share data | |||||||||||||||
Basic: | |||||||||||||||
Net income attributable to MPC per share | $ | 1.38 | $ | 4.13 | $ | 5.36 | $ | 6.76 | |||||||
Weighted average shares: | 687 | 488 | 518 | 507 | |||||||||||
Diluted: | |||||||||||||||
Net income attributable to MPC per share | $ | 1.35 | $ | 4.09 | $ | 5.28 | $ | 6.70 | |||||||
Weighted average shares: | 704 | 493 | 526 | 512 | |||||||||||
(a) | The 2017 periods include consumer excise taxes. In 2018, most of the consumer excise taxes are reported on a net basis following the January 1, 2018 adoption of ASC 606 - Revenue from Contracts with Customers. |
Income Summary | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
(In millions) | 2018(a) | 2017 | 2018(a) | 2017 | |||||||||||
Income from Operations by segment | |||||||||||||||
Refining & Marketing(b) | $ | 923 | $ | 732 | $ | 2,481 | $ | 2,321 | |||||||
Retail | 613 | 148 | 1,028 | 729 | |||||||||||
Midstream | 889 | 343 | 2,752 | 1,339 | |||||||||||
Items not allocated to segments: | |||||||||||||||
Corporate and other unallocated items | (233) | (114) | (502) | (365) | |||||||||||
Transaction-related costs(c) | (183) | — | (197) | — | |||||||||||
Litigation | — | 57 | — | (29) | |||||||||||
Impairments | 8 | 2 | 9 | 23 | |||||||||||
Income from operations | 2,017 | 1,168 | 5,571 | 4,018 | |||||||||||
Net interest and other financial costs(d) | 385 | 209 | 1,003 | 674 | |||||||||||
Income before income taxes | 1,632 | 959 | 4,568 | 3,344 | |||||||||||
(Benefit) provision for income taxes | 437 | (1,166) | 962 | (460) | |||||||||||
Net income | 1,195 | 2,125 | 3,606 | 3,804 | |||||||||||
Less net income attributable to: | |||||||||||||||
Redeemable noncontrolling interest | 20 | 16 | 75 | 65 | |||||||||||
Noncontrolling interests | 224 | 93 | 751 | 307 | |||||||||||
Net income attributable to MPC | $ | 951 | $ | 2,016 | $ | 2,780 | $ | 3,432 | |||||||
(a) | Includes the results of Andeavor from the October 1, 2018 acquisition date forward. |
(b) | R&M segment results for the 2018 periods included estimated costs of $759 million due to purchase accounting related inventory effects. |
(c) | Includes costs related to the Andeavor acquisition including financial advisor and legal fees, employee severance, and other expenses. |
(d) | The 2018 periods include approximately $60 million related to the extinguishment of MPLX debt. |
Capital Expenditures and Investments | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
(In millions) | 2018(a) | 2017 | 2018(a) | 2017 | |||||||||||
Refining & Marketing | $ | 444 | $ | 262 | $ | 1,057 | $ | 832 | |||||||
Retail | 235 | 160 | 460 | 381 | |||||||||||
Midstream | 954 | 488 | 2,630 | 1,755 | |||||||||||
Corporate and Other(b) | 60 | 46 | 157 | 138 | |||||||||||
Total | $ | 1,693 | $ | 956 | $ | 4,304 | $ | 3,106 | |||||||
(a) Includes the results of Andeavor from the October 1, 2018 acquisition date forward. | |||||||||||||||
(b) Includes capitalized interest of $25 million, $16 million, $80 million and $55 million, respectively. | |||||||||||||||
Refining & Marketing Operating Statistics (Unaudited) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
R&M refined product sales volume (mbpd)(a) | 3,764 | 2,414 | 2,703 | 2,301 | |||||||||||
R&M margin (dollars per barrel)(b) | $ | 15.07 | $ | 13.12 | $ | 14.03 | $ | 12.60 | |||||||
Crude oil capacity utilization (percent)(c) | 94 | 101 | 96 | 97 | |||||||||||
Refinery throughputs (mbpd):(d) | |||||||||||||||
Crude oil refined | 2,857 | 1,837 | 2,081 | 1,765 | |||||||||||
Other charge and blendstocks | 254 | 187 | 193 | 179 | |||||||||||
Total | 3,111 | 2,024 | 2,274 | 1,944 | |||||||||||
Sour crude oil throughput (percent) | 50 | 53 | 52 | 59 | |||||||||||
Sweet crude oil throughput (percent) | 50 | 47 | 48 | 41 | |||||||||||
Refined product yields (mbpd):(d) | |||||||||||||||
Gasoline | 1,593 | 997 | 1,107 | 932 | |||||||||||
Distillates | 1,111 | 679 | 773 | 641 | |||||||||||
Propane | 53 | 40 | 41 | 36 | |||||||||||
Feedstocks and special products | 273 | 254 | 288 | 277 | |||||||||||
Heavy fuel oil | 62 | 42 | 38 | 37 | |||||||||||
Asphalt | 74 | 62 | 69 | 63 | |||||||||||
Total | 3,166 | 2,074 | 2,316 | 1,986 | |||||||||||
Refinery direct operating costs ($/barrel):(e) | |||||||||||||||
Planned turnaround and major maintenance | $ | 1.49 | $ | 1.80 | $ | 1.59 | $ | 1.72 | |||||||
Depreciation and amortization | 1.32 | 1.38 | 1.31 | 1.43 | |||||||||||
Other manufacturing(f) | 5.11 | 4.03 | 4.20 | 4.07 | |||||||||||
Total | $ | 7.92 | $ | 7.21 | $ | 7.10 | $ | 7.22 | |||||||
Memo: Total includes turnaround costs ($/barrel) of: (g) | $ | 0.79 | $ | 0.57 | $ | 0.79 | $ | 0.71 | |||||||
(a) | Includes intersegment sales. |
(b) | Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs. |
(c) | Based on calendar day capacity, which is an annual average that includes downtime for planned maintenance and other normal operating activities. |
(d) | Excludes inter-refinery volumes of 85 mbpd and 88 mbpd for fourth quarter 2018 and 2017, respectively, and 61 mbpd and 78 mbpd for the full-year 2018 and 2017, respectively. |
(e) | Per barrel of total refinery throughputs. |
(f) | Includes utilities, labor, routine maintenance and other operating costs. |
(g) | Reflects costs for turnaround activity which we expense as incurred. |
Refining & Marketing Operating Statistics by Region (Unaudited) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Gulf Coast | |||||||||||||||
Refinery throughputs (mbpd):(a) | |||||||||||||||
Crude oil refined | 1,177 | 1,158 | 1,135 | 1,070 | |||||||||||
Other charge and blendstocks | 197 | 237 | 190 | 224 | |||||||||||
Total | 1,374 | 1,395 | 1,325 | 1,294 | |||||||||||
Sour crude oil throughput (percent) | 60 | 62 | 62 | 71 | |||||||||||
Sweet crude oil throughput (percent) | 40 | 38 | 38 | 29 | |||||||||||
Refined product yields (mbpd):(a) | |||||||||||||||
Gasoline | 622 | 608 | 574 | 546 | |||||||||||
Distillates | 467 | 440 | 432 | 405 | |||||||||||
Propane | 28 | 29 | 25 | 26 | |||||||||||
Feedstocks and special products | 260 | 313 | 291 | 311 | |||||||||||
Heavy fuel oil | 20 | 30 | 18 | 25 | |||||||||||
Asphalt | 16 | 17 | 19 | 17 | |||||||||||
Total | 1,413 | 1,437 | 1,359 | 1,330 | |||||||||||
Refinery direct operating costs ($/barrel):(b) | |||||||||||||||
Planned turnaround and major maintenance | $ | 0.61 | $ | 1.45 | $ | 1.12 | $ | 1.75 | |||||||
Depreciation and amortization | 1.03 | 1.05 | 1.03 | 1.12 | |||||||||||
Other manufacturing(c) | 3.35 | 3.55 | 3.41 | 3.74 | |||||||||||
Total | $ | 4.99 | $ | 6.05 | $ | 5.56 | $ | 6.61 | |||||||
Mid-Continent | |||||||||||||||
Refinery throughputs (mbpd):(a) | |||||||||||||||
Crude oil refined | 1,069 | 679 | 792 | 695 | |||||||||||
Other charge and blendstocks | 72 | 38 | 47 | 33 | |||||||||||
Total | 1,141 | 717 | 839 | 728 | |||||||||||
Sour crude oil throughput (percent) | 26 | 36 | 33 | 40 | |||||||||||
Sweet crude oil throughput (percent) | 74 | 64 | 67 | 60 | |||||||||||
Refined product yields (mbpd):(a) | |||||||||||||||
Gasoline | 617 | 389 | 444 | 386 | |||||||||||
Distillates | 398 | 239 | 279 | 236 | |||||||||||
Propane | 18 | 12 | 14 | 11 | |||||||||||
Feedstocks and special products | 36 | 27 | 43 | 42 | |||||||||||
Heavy fuel oil | 19 | 13 | 14 | 13 | |||||||||||
Asphalt | 58 | 45 | 50 | 46 | |||||||||||
Total | 1,146 | 725 | 844 | 734 | |||||||||||
Refinery direct operating costs ($/barrel):(b) | |||||||||||||||
Planned turnaround and major maintenance | $ | 1.67 | $ | 2.25 | $ | 1.97 | $ | 1.48 | |||||||
Depreciation and amortization | 1.60 | 1.86 | 1.67 | 1.81 | |||||||||||
Other manufacturing(c) | 5.08 | 4.46 | 4.34 | 4.26 | |||||||||||
Total | $ | 8.35 | $ | 8.57 | $ | 7.98 | $ | 7.55 | |||||||
West Coast | |||||||||||||||
Refinery throughputs (mbpd):(a) | |||||||||||||||
Crude oil refined | 611 | — | 154 | — | |||||||||||
Other charge and blendstocks | 70 | — | 17 | — | |||||||||||
Total | 681 | — | 171 | — | |||||||||||
Sour crude oil throughput (percent) | 72 | — | 72 | — | |||||||||||
Sweet crude oil throughput (percent) | 28 | — | 28 | — | |||||||||||
Refined product yields (mbpd):(a) | |||||||||||||||
Gasoline | 354 | — | 89 | — | |||||||||||
Distillates | 246 | — | 62 | — | |||||||||||
Propane | 7 | — | 2 | — | |||||||||||
Feedstocks and special products | 56 | — | 14 | — | |||||||||||
Heavy fuel oil | 29 | — | 7 | — | |||||||||||
Asphalt | — | — | — | — | |||||||||||
Total | 692 | — | 174 | — | |||||||||||
Refinery direct operating costs ($/barrel):(b) | |||||||||||||||
Planned turnaround and major maintenance | $ | 2.79 | $ | — | $ | 2.79 | $ | — | |||||||
Depreciation and amortization | 1.26 | — | 1.26 | — | |||||||||||
Other manufacturing(c) | 8.07 | — | 8.07 | — | |||||||||||
Total | $ | 12.12 | $ | — | $ | 12.12 | $ | — | |||||||
(a) Includes inter-refinery transfer volumes. | |||||||||||||||
(b) Per barrel of total refinery throughputs. | |||||||||||||||
(c) Includes utilities, labor, routine maintenance and other operating costs. | |||||||||||||||
Retail Operating Statistics (Unaudited) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Speedway fuel sales (millions of gallons) | 1,976 | 1,467 | 6,293 | 5,799 | |||||||||||
Direct dealer fuel sales (millions of gallons) | 644 | N/A | 644 | N/A | |||||||||||
Retail fuel margin (dollars per gallon)(a) | $ | 0.3235 | $ | 0.1772 | $ | 0.2230 | $ | 0.1738 | |||||||
Merchandise sales (in millions) | $ | 1,479 | $ | 1,200 | $ | 5,232 | $ | 4,893 | |||||||
Merchandise margin (in millions) | $ | 417 | $ | 337 | $ | 1,486 | $ | 1,402 | |||||||
Merchandise margin percent | 28.2 | % | 28.1 | % | 28.4 | % | 28.7 | % | |||||||
Same store gasoline sales volume (period over period)(b) | (0.7) | % | (0.3) | % | (1.5) | % | (1.3) | % | |||||||
Same store merchandise sales (period over period)(b)(c) | 6.5 | % | 0.5 | % | 4.2 | % | 1.2 | % | |||||||
Total convenience stores at period-end | 3,923 | 2,744 | |||||||||||||
Direct dealer locations at period-end | 1,081 | N/A | |||||||||||||
(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 | Twelve Months Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Pipeline throughputs (mbpd)(a) | 5,612 | 3,610 | 4,177 | 3,377 | |||||||||||
Terminal throughput (mbpd) | 3,188 | 1,497 | 1,901 | 1,477 | |||||||||||
Gathering system throughput (million cubic feet per day)(b) | 5,893 | 4,181 | 4,779 | 3,608 | |||||||||||
Natural gas processed (million cubic feet per day)(b) | 8,161 | 6,828 | 7,199 | 6,460 | |||||||||||
C2 (ethane) + NGLs fractionated (mbpd)(b) | 501 | 423 | 464 | 394 | |||||||||||
(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) | December 31, | September 30 | |||||
Cash and cash equivalents | $ | 1,687 | $ | 4,992 | |||
MPLX debt | 13,393 | 12,890 | |||||
ANDX debt | 4,973 | N/A | |||||
Total consolidated debt | 27,524 | 18,449 | |||||
Redeemable noncontrolling interest | 1,004 | 1,003 | |||||
Equity | 44,084 | 19,031 | |||||
Shares outstanding | 680 | 451 | |||||
Cash provided from operations (quarter ended) | $ | 2,727 | $ | 1,182 | |||
Three Months Ended | Twelve Months Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Dividends paid per share | $ | 0.46 | $ | 0.40 | $ | 1.84 | $ | 1.52 | |||||||
Reconciliation of Adjusted Earnings Before Interest, Taxes, Depreciation & Amortization (Adjusted EBITDA) to Net Income Attributable to MPC | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||||||
Adjusted EBITDA(a) | |||||||||||||||||||
Refining & Marketing | $ | 2,321 | $ | 1,115 | $ | 5,072 | $ | 3,904 | |||||||||||
Retail | 738 | 226 | 1,381 | 1,004 | |||||||||||||||
Midstream | 1,197 | 514 | 3,637 | 2,038 | |||||||||||||||
Corporate and other unallocated items | (205) | (100) | (424) | (307) | |||||||||||||||
Total Adjusted EBITDA(a) | 4,051 | 1,755 | 9,666 | 6,639 | |||||||||||||||
Less: | |||||||||||||||||||
Depreciation & amortization | (874) | (540) | (2,490) | (2,114) | |||||||||||||||
Turnaround costs | (226) | (106) | (658) | (501) | |||||||||||||||
Purchase accounting related inventory effects | (759) | — | (759) | — | |||||||||||||||
Transaction-related costs | (183) | — | (197) | — | |||||||||||||||
Litigation | — | 57 | — | (29) | |||||||||||||||
Impairments | 8 | 2 | 9 | 23 | |||||||||||||||
Income from operations | 2,017 | 1,168 | 5,571 | 4,018 | |||||||||||||||
Net interest and other financial costs | 385 | 209 | 1,003 | 674 | |||||||||||||||
Income before income taxes | 1,632 | 959 | 4,568 | 3,344 | |||||||||||||||
(Benefit) provision for income taxes | 437 | (1,166) | 962 | (460) | |||||||||||||||
Net income | 1,195 | 2,125 | 3,606 | 3,804 | |||||||||||||||
Less net income attributable to: | |||||||||||||||||||
Redeemable noncontrolling interest | 20 | 16 | 75 | 65 | |||||||||||||||
Noncontrolling interests | 224 | 93 | 751 | 307 | |||||||||||||||
Net income attributable to MPC | $ | 951 | $ | 2,016 | $ | 2,780 | $ | 3,432 | |||||||||||
(a) | Adjusted EBITDA represents earnings before net interest and other financial costs, income taxes, depreciation and amortization expense as well as adjustments to exclude R&M turnaround costs and the purchase accounting related inventory effects reported in fourth-quarter 2018 R&M segment results. We believe this non-GAAP financial measure is 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. 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 should not be considered as a substitute for, or superior to 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 may not be comparable to similarly titled measures reported by other companies. |
Reconciliation of Refining & Marketing Income from Operations to Refining & Marketing Margin | |||||||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||||||||
Refining & Marketing income from operations | $ | 923 | $ | 732 | $ | 2,481 | $ | 2,321 | |||||||||||||||||||||||
Plus (Less): | |||||||||||||||||||||||||||||||
Refinery direct operating costs(a) | 1,889 | 1,084 | 4,801 | 4,113 | |||||||||||||||||||||||||||
Refinery depreciation and amortization | 377 | 258 | 1,089 | 1,013 | |||||||||||||||||||||||||||
Other: | |||||||||||||||||||||||||||||||
Operating expenses, net(a)(b) | 1,088 | 350 | 3,189 | 1,425 | |||||||||||||||||||||||||||
Depreciation and amortization | 36 | 19 | 85 | 69 | |||||||||||||||||||||||||||
Refining & Marketing margin(c) | $ | 4,313 | $ | 2,443 | $ | 11,645 | $ | 8,941 | |||||||||||||||||||||||
(a) | Excludes depreciation and amortization. |
(b) | Includes fees paid to MPLX for various midstream services. MPLX's results are reported in MPC's Midstream segment. |
(c) | Refining & Marketing margin is defined as sales revenue less cost of refinery inputs and purchased products, excluding any LCM inventory market adjustment. We believe this non-GAAP financial measure is useful to investors and analysts to assess our ongoing financial performance because, when reconciled to its most comparable GAAP measure, it provides 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. This measure 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. |
Reconciliation of Retail Income from Operations to Retail Total Margin | |||||||||||||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||||||||
Retail income from operations | $ | 613 | $ | 148 | $ | 1,028 | $ | 729 | |||||||||||||||||||||||
Plus (Less): | |||||||||||||||||||||||||||||||
Operating, selling, general and administrative expenses | 593 | 400 | 1,796 | 1,533 | |||||||||||||||||||||||||||
Depreciation and amortization | 125 | 78 | 353 | 275 | |||||||||||||||||||||||||||
Income from equity method investments | (23) | (15) | (74) | (69) | |||||||||||||||||||||||||||
Net gain on disposal of assets | (16) | (2) | (17) | (14) | |||||||||||||||||||||||||||
Other income | (2) | (5) | (7) | (14) | |||||||||||||||||||||||||||
Retail total margin | $ | 1,290 | $ | 604 | $ | 3,079 | $ | 2,440 | |||||||||||||||||||||||
Retail total margin:(a) | |||||||||||||||||||||||||||||||
Fuel margin | $ | 848 | $ | 260 | $ | 1,547 | $ | 1,008 | |||||||||||||||||||||||
Merchandise margin | 417 | 337 | 1,486 | 1,402 | |||||||||||||||||||||||||||
Other margin | 25 | 7 | 46 | 30 | |||||||||||||||||||||||||||
Retail total margin | $ | 1,290 | $ | 604 | $ | 3,079 | $ | 2,440 | |||||||||||||||||||||||
(a) | Fuel margin includes bankcard processing fees (as applicable). Merchandise margin is defined as the price paid by consumers less the cost of merchandise. We believe these non-GAAP financial measures are useful to investors and analysts to assess our ongoing financial performance because, when reconciled to the most comparable GAAP 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. |
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-reports-fourth-quarter-results-300791586.html
SOURCE Marathon Petroleum Corporation
Article Date
2/7/2019Glenn M. Plumby Named Marathon Petroleum Corporate Officer
Source: PR Newswire
FINDLAY, Ohio, Feb. 1, 2019 /PRNewswire/ -- Glenn M. Plumby, senior vice president and chief operating officer for Speedway LLC, a wholly owned subsidiary of Marathon Petroleum Corporation (NYSE: MPC), has been appointed an MPC officer, effective today, with the title senior vice president and chief operating officer, Speedway.
"Among Glenn's many notable accomplishments, he has played a key leadership role in Speedway's significant growth in recent years," said MPC Chairman and Chief Executive Officer Gary R. Heminger. "Glenn has gained enormous expertise in our retail business during more than 37 years of dedicated service, making him a welcome addition to our senior management team."
Plumby joined MPC in 1981 and held various accounting and marketing positions until transferring to Emro Marketing Company, the predecessor of Speedway LLC, in 1994. He was appointed vice president of Light Product Marketing in 2000 and served as vice president of Marketing from 2003 to 2009. From 2010 through 2017, Plumby held operations posts as both a vice president and a senior vice president. He was appointed senior vice president and chief operating officer for Speedway in 2018.
Plumby is a member of the board of directors of the National Association of Convenience Stores and serves as a member of the organization's Research Council. He also is a member of the board of governors for the Children's Miracle Network Hospitals.
He graduated with a Bachelor of Science degree in accounting from Miami University in 1981 and earned an MBA from the University of Toledo in 1985. Plumby attended the Indiana University Executive education program in 1993 and attended the University of Pennsylvania Wharton School Advanced Management Program in 2012.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests in two midstream companies, MPLX LP and Andeavor Logistics LP, which own and operate 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:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/glenn-m-plumby-named-marathon-petroleum-corporate-officer-300788337.html
SOURCE Marathon Petroleum Corporation
Article Date
2/1/2019Marathon Petroleum Corp. to Host 2019 Annual Meeting of Shareholders
Source: PR Newswire
FINDLAY, Ohio, Jan. 28, 2019 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) will host its 2019 annual meeting of shareholders on April 24, 2019, at 10 a.m. EDT at the company's headquarters in Findlay, Ohio. Shareholders of record as of Feb. 25, 2019, are entitled to notice of and to vote at the annual meeting.
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, with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests in two midstream companies, MPLX LP and Andeavor Logistics LP, which own and operate 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:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-to-host-2019-annual-meeting-of-shareholders-300784959.html
SOURCE Marathon Petroleum Corporation
Article Date
1/28/2019Marathon Petroleum Corp. Increases Quarterly Dividend
Source: PR Newswire
FINDLAY, Ohio, Jan. 28, 2019 /PRNewswire/ -- The board of directors of Marathon Petroleum Corp. (NYSE: MPC) has declared a dividend of $0.53 per share on common stock. The dividend is payable March 11, 2019, to shareholders of record as of the close of business February 20, 2019.
"The $0.53 dividend approved by our board represents a 15 percent increase to our previous quarterly dividend," said Gary R. Heminger, chairman and chief executive officer.
Since the company became independent in 2011, capital returned to shareholders through both dividends and repurchase activity totals over $17.5 billion through year-end 2018. "We have balanced meaningful return of capital with continued long-term investment in the business," continued Heminger. "This increase in our quarterly dividend underscores our confidence in the expected cash-generating power of our new nationwide enterprise, and our commitment to continued return of capital as we deliver on the projected synergies of the combined business."
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests in two midstream companies, MPLX LP and Andeavor Logistics LP, which own and operate 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 Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
This press release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements relate to, among other things, cash generation expectations, projected synergies and return of capital discussed above. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "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 results to differ materially from those implied in the forward-looking statements include: 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; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan and to effect any share repurchases or dividend increases, including within the expected timeframe; 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, 2017, and in its Forms 10-Q, filed with the Securities and Exchange Commission (SEC). In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here or in MPC's Form 10-K or Forms 10-Q could also have material adverse effects on forward-looking statements. Copies of MPC's Form 10-K and Forms 10-Q are available on the SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office.
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-increases-quarterly-dividend-300784930.html
SOURCE Marathon Petroleum Corporation
Article Date
1/28/20191/16/2019 - Andeavor Logistics to Release 2018 Fourth-Quarter and Full-Year Financial Results February 7
Andeavor Logistics to Release 2018 Fourth-Quarter and Full-Year Financial Results February 7
Source: PR Newswire
FINDLAY, Ohio, Jan. 16, 2019 /PRNewswire/ -- Andeavor Logistics LP (NYSE: ANDX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will release its 2018 fourth-quarter and full-year financial results before the market opens on Thursday, February 7. ANDX will live broadcast its conference call with analysts regarding its financial results and provide an update on company operations at 1 p.m. EST.
Interested parties may listen to the conference call by visiting ANDX's website at www.andeavorlogistics.com. A replay of the conference call will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, also will be available online.
About Andeavor Logistics LP
Andeavor Logistics LP is a fee-based, full-service, diversified midstream logistics company, with integrated assets across the western and mid-continent regions of the United States. Andeavor Logistics operates through three business segments: Terminalling and Transportation, Gathering and Processing and Wholesale. The Terminalling and Transportation segment consists of marine terminals, refined product truck terminals, rail terminals, dedicated storage facilities and transportation pipelines. The Gathering and Processing segment consists of crude oil gathering systems and pipelines as well as natural gas gathering pipelines, processing facilities and fractionation facilities. The Wholesale segment consists of a fee-based fuel wholesale business. Andeavor Logistics is a Delaware limited partnership headquartered in Findlay, Ohio.
Investor Relations Contacts:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/andeavor-logistics-to-release-2018-fourth-quarter-and-full-year-financial-results-february-7-300779456.html
SOURCE Andeavor Logistics LP
Article Date
1/16/20191/16/2019 - Marathon Petroleum Corp. To Announce 2018 Fourth-Quarter And Full-Year Financial Results February 7
Marathon Petroleum Corp. To Announce 2018 Fourth-Quarter And Full-Year Financial Results February 7
Source: PR Newswire
FINDLAY, Ohio, Jan. 16, 2019 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) will release its 2018 fourth-quarter and full-year financial results before the market opens on Thursday, February 7. MPC will live broadcast its conference call with analysts regarding its financial results and provide an update on company operations at 9 a.m. EST.
Interested parties may listen to the conference call by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2018 Fourth-Quarter and Full-Year Financial Results" link. A replay of the conference call will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related material, also will be available online.
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 with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests in two midstream companies, MPLX LP and Andeavor Logistics LP, which own and operate 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:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-to-announce-2018-fourth-quarter-and-full-year-financial-results-february-7-300779453.html
SOURCE Marathon Petroleum Corporation
Article Date
1/16/2019MPLX LP To Announce 2018 Fourth-Quarter And Full-Year Financial Results February 7
Source: PR Newswire
FINDLAY, Ohio, Jan. 16, 2019 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will release its 2018 fourth-quarter and full-year financial results before the market opens on Thursday, February 7. MPLX will live broadcast its conference call with analysts regarding its financial results and provide an update on company operations at 11 a.m. EST.
Interested parties may listen to the conference call by visiting MPLX's website at http://www.mplx.com and clicking on the "2018 Fourth-Quarter and Full-Year Financial Results" 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, also will be available online.
About MPLX LP
MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.mplx.com.
Investor Relations Contacts:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/mplx-lp-to-announce-2018-fourth-quarter-and-full-year-financial-results-february-7-300779455.html
SOURCE MPLX LP
Article Date
1/16/2019Capline Pipeline Owners To Launch Binding Open Season
Source: PR Newswire
FINDLAY, Ohio, Jan. 2, 2019 /PRNewswire/ -- The owners of the Capline pipeline system intend to conduct a binding open season in January 2019 for a reversed Capline system, which would transport crude oil from origination points near Patoka, Illinois, and Collierville, Tennessee, to the U.S. Gulf Coast. The owners – including Plains Pipeline, L.P., BP Oil Pipeline Company, and Marathon Petroleum Corporation – previously conducted a non-binding open season for a reversed Capline system in the fourth quarter of 2017, which generated shipper interest.
Phase I reversal engineering studies have been completed. Subject to the results of the binding open season and regulatory approvals, crude oil service is expected to commence in the third quarter of 2020.
About MPC
Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with more than 3 million barrels per day of crude oil capacity across 16 refineries. 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 interests in two midstream companies, MPLX LP and Andeavor Logistics LP, which own and operate 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.
About MPLX LP
MPLX operates the Capline pipeline system on behalf of the owners. MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.mplx.com.
Investor Relations Contacts:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
This press release contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements relate to, among other things, timing for the anticipated operations discussed above. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "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 control of the companies and are difficult to predict. Factors that could impact the opportunities described above are: the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of pipeline capacity by competitors; the ability to obtain required regulatory approvals on a timely basis; the occurrence of an operational hazard or unforeseen interruption; and the factors set forth under the heading "Risk Factors" in MPC's and MPLX's Annual Reports on Form 10-K for the year ended Dec. 31, 2017, and in their Forms 10-Q, filed with the Securities and Exchange Commission (SEC). In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here or in MPC's and/or MPLX's Forms 10-K or Forms 10-Q could also have material adverse effects on forward-looking statements. Copies of MPC's Form 10-K and Forms 10-Q are available on the SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office. Copies of MPLX's Form 10-K and Forms 10-Q are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office.
View original content:http://www.prnewswire.com/news-releases/capline-pipeline-owners-to-launch-binding-open-season-300771903.html
SOURCE Marathon Petroleum Corporation
Article Date
1/2/201911/19/2018 - Marathon Petroleum Corporation, MPLX LP, and Andeavor Logistics LP 2018 Investor Day to be Webcast Live on Dec. 4
Marathon Petroleum Corporation, MPLX LP, and Andeavor Logistics LP 2018 Investor Day to be Webcast Live on Dec. 4
Source: PR Newswire
FINDLAY, Ohio, Nov. 19, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC), MPLX LP (NYSE: MPLX), and Andeavor Logistics LP (NYSE: ANDX) will jointly host a 2018 Investor Day on December 4, 2018. The presentation and accompanying slides will be webcast via the MPC website at http://ir.marathonpetroleum.com, the MPLX website at http://ir.mplx.com, and the Andeavor Logistics website at http://ir.andeavorlogistics.com beginning at 8:30 a.m. EST.
Gary R. Heminger, MPC's chairman and chief executive officer, and other members of the executive management teams, will provide updates on the companies' strategic objectives and outlook. Replays of the webcast will be available on the Marathon Petroleum, MPLX, and Andeavor Logistics websites after the presentation's completion for two weeks.
Advance registration is required to attend. Please contact investorrelations@marathonpetroleum.com to inquire about attendance.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (NYSE: MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with over 3.0 million barrels per day of crude oil capacity across sixteen refineries. MPC's marketing system includes approximately 7,800 branded locations across the United States, including approximately 5,600 Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates approximately 3,900 retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interests in two midstream companies, MPLX LP (NYSE: MPLX) and Andeavor Logistics LP (NYSE: ANDX), which own and operate gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure.
About MPLX LP
MPLX is a diversified, large-cap master limited partnership that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. MPLX's assets include a network of crude oil and refined product pipelines; an inland marine business; light-product terminals; storage caverns; refinery tanks, docks, loading racks, and associated piping; and crude and light-product marine terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins. More information is available at www.mplx.com.
About Andeavor Logistics
Andeavor Logistics LP is a fee-based, full-service, diversified midstream logistics company, with integrated assets across the western and mid-continent regions of the United States. Andeavor Logistics operates through three business segments: Terminalling and Transportation, Gathering and Processing and Wholesale. The Terminalling and Transportation segment consists of marine terminals, refined product truck terminals, rail terminals, dedicated storage facilities and transportation pipelines. The Gathering and Processing segment consists of crude oil gathering systems and pipelines as well as natural gas gathering pipelines, processing facilities and fractionation facilities. The Wholesale segment consists of a fee-based fuel wholesale business. Andeavor Logistics is a Delaware limited partnership headquartered in Findlay, Ohio.
Investor Relations Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corporation-mplx-lp-and-andeavor-logistics-lp-2018-investor-day-to-be-webcast-live-on-dec-4-300753200.html
SOURCE Marathon Petroleum Corporation; MPLX LP and Andeavor Logistics LP
Article Date
11/19/2018Marathon Petroleum Corp. Reports Third Quarter 2018 Results
Source: PR Newswire
FINDLAY, Ohio, Nov. 1, 2018 /PRNewswire/ --
Marathon Petroleum Corp. (NYSE: MPC) today reported 2018 third quarter earnings of $737 million, or $1.62 per diluted share. Third quarter 2018 earnings included pre-tax charges of $49 million related to pension settlement and transaction costs, or approximately $0.08 per diluted share. This compares with $903 million, or $1.77 per diluted share, in the third quarter of 2017.
"On October 1, we closed on our strategic combination with Andeavor after a vote that demonstrated overwhelming support by both sets of shareholders. We are now the leading, integrated, downstream energy company in the U.S.," said Gary R. Heminger, chairman and chief executive officer. "As we look forward, we see extraordinary potential across our nationwide platform including over $1 billion of annual run-rate synergies within the first three years."
"This was another impressive quarter," Heminger continued. "Our team's strong execution drove over $1.2 billion of cash from operations, allowing us to return $607 million to shareholders, contributing to the $3.2 billion of capital returned so far in 2018. The market environment appears favorable and our integrated business model enables us to capture opportunities including wider crude differentials and the changing dynamics of low-sulfur fuel requirements which we expect to begin to see in the second half of 2019."
Segment Results
MPC's income from operations was $1.40 billion in the third quarter of 2018, compared with $1.58 billion in the third quarter of 2017, driven by strong contributions from the Midstream segment, offset by lower segment income from operations in the Refining and Marketing (R&M) and Speedway segments.
Three Months Ended | |||||||
(In millions) | 2018 | 2017 | |||||
Income from Operations by Segment | |||||||
Refining & Marketing | $ | 666 | $ | 1,097 | |||
Speedway | 161 | 208 | |||||
Midstream | 679 | 355 | |||||
Items not allocated to segments | (103) | (83) | |||||
Income from operations(a) | $ | 1,403 | $ | 1,577 | |||
(a) We adopted Accounting Standards Update 2017-07, Retirement Benefits Presentation of Pension and Postretirement Cost, as | |||||||
Refining & Marketing
R&M segment income from operations was $666 million, compared with $1.1 billion in the third quarter of 2017. The year-over-year decrease in R&M segment results was primarily driven by lower Midwest and Gulf Coast crack spreads, partially offset by wider WCS- and WTI- based crude differentials. In addition, R&M segment income was $230 million lower resulting from the February 1, 2018 dropdown transaction. Prior period R&M segment results do not reflect the impact of the dropdown.
Refinery utilization was 97 percent during the quarter. The U.S. Gulf Coast and Chicago LLS blended 6-3-2-1 crack spread on an ex-RIN basis was $8.03 per barrel in the third quarter of 2018 as compared to $8.68 per barrel in the third quarter of 2017. These crack spreads are net of RIN crack adjustments of $1.73 and $4.00 per barrel for the third quarter of 2018 and 2017, respectively.
Midstream
Midstream segment income from operations, which largely reflects MPLX LP (NYSE: MPLX), was $679 million in the quarter, compared with $355 million in the third quarter of 2017. The results include $230 million from the February 1, 2018 drop of refining logistics and fuels distribution services to MPLX. Prior period Midstream segment results do not reflect the impact of these businesses. The incremental $94 million increase in third quarter Midstream segment results were driven by strong pipeline throughput volumes as well as record gathered, processed and fractionated volumes.
During the quarter, MPLX announced several new projects. First, the company plans to participate in a new 600-mile crude pipeline running from the Permian Basin to the Texas Gulf Coast region. Second, the company also plans to jointly develop the Whistler Pipeline, a 2.0 billion cubic feet per day (bcf/d) pipeline designed to deliver natural gas to the Agua Dulce market hub. Lastly, the company announced the acquisition of a Gulf Coast export terminal in Mt. Airy, Louisiana with 4 million barrels of third-party leased storage capacity and a 120 thousand barrel-per-day (mbpd) dock.
Additionally in October, MPLX announced with Crimson Midstream, LLC the commencement of an open season on the proposed 600 mbpd Swordfish Pipeline from St. James, Louisiana, and Raceland, Louisiana, to the Louisiana Offshore Oil Port LLC (LOOP) terminal facility in Clovelly, Louisiana.
Speedway
Speedway segment income from operations was $161 million in the quarter, compared with $208 million in the third quarter of 2017. The year-over-year decrease in segment results was primarily related to higher operating expenses and lower light product margins. Speedway's gasoline and distillate margin decreased to 16.51 cents per gallon in the third quarter of 2018 compared with 17.72 cents per gallon in the third quarter of 2017 primarily due to the effects of rising crude oil prices.
For the quarter, same-store merchandise sales increased by 4.9 percent and same-store gasoline sales volume decreased by 1.2 percent year-over-year. Expenses increased $28 million, primarily due to higher labor and benefits costs. Depreciation was $8 million higher, primarily due to increased investment in the business.
MPC has begun the process of converting the Andeavor company-owned-and-operated stores to the Speedway brand. Since the closing of the transaction on October 1st, roughly 90 sites in the St. Paul and Minneapolis markets have been converted and the company expects to complete approximately 200 sites in total by the end of 2018.
Items Not Allocated to Segments
Items not allocated to segments totaled $103 million of expenses in the third quarter of 2018, compared with $83 million in the third quarter of 2017. The increase was due to transaction costs related to the combination with Andeavor and increased employee benefit costs.
Strong Financial Position and Liquidity
On September 30, 2018, the company had $5.0 billion of cash and cash equivalents, including the approximately $3.5 billion necessary to close the Andeavor transaction on October 1, 2018; $2.5 billion available under a revolving credit agreement and full availability under its $750 million trade receivables securitization facility.
During the quarter, MPC returned $607 million to MPC shareholders, including $400 million in share repurchases. MPC remains committed to its disciplined capital strategy and returning capital beyond the needs of the business in a manner consistent with maintaining the company's current investment-grade credit profile.
MPC Revolving Credit Agreements
On August 28, 2018, in connection with the Andeavor transaction, MPC entered into agreements with a syndicate of lenders to replace MPC's previous credit facilities. The facilities, which became effective October 1, 2018, provide for a $5 billion five-year revolving credit agreement that expires in 2023 and a $1.0 billion 364-day revolving credit agreement that expires in 2019.
The financial covenants and the interest rate terms contained in the new credit agreements are substantially the same as those contained in the previous bank revolving credit facilities.
MPC Senior Notes
As a result of the completion of the Andeavor transaction, MPC assumed an aggregate principal amount of $3.375 billion senior notes issued by Andeavor. On October 2, 2018, approximately $2.905 billion aggregate principal amount of Andeavor's outstanding senior notes were part of an exchange offer and consent solicitation undertaken by MPC and Andeavor, where unsecured notes were exchanged for new unsecured senior notes issued by MPC having the same maturity and interest rates as the Andeavor senior notes and cash.
Other Strategic Updates
In October, MPC began evaluating the financial business plans of Andeavor Logistics LP (NYSE: ANDX), with the intent to move toward financial policies more consistent with its approach towards MPLX. This approach includes meaningfully higher distribution coverage, leverage levels at or below 4.0x EBITDA, no planned public equity issuances, and independent sustainability with limited parent support.
MPC plans to engage advisors and begin the process of assessing all options for the two MLPs, which could include MPLX acquiring ANDX and ANDX acquiring MPLX.
Conference Call
At 9 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 "2018 Third Quarter Financial Results" 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 http://ir.marathonpetroleum.com.
2018 Investor Day
Marathon Petroleum Corporation, MPLX LP, and Andeavor Logistics LP will host their 2018 Investor Day at the Mandarin Oriental Hotel in New York City on December 4, 2018 at 8:30 a.m. EST. Reservations are required to attend. Interested parties can request an invitation by contacting the Investor Relations department via email at investorrelations@marathonpetroleum.com. The presentation will also be webcast live at http://marathonpetroleum.com, http://mplx.com, and http://andeavorlogistics.com.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (NYSE: MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with over 3.0 million barrels per day of crude oil capacity across sixteen refineries. MPC's marketing system includes approximately 7,800 branded locations across the United States, including approximately 5,600 Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates approximately 3,900 retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interests in two midstream companies, MPLX LP (NYSE: MPLX) and Andeavor Logistics LP (NYSE: ANDX), which own and operate gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure.
Investor Relations Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
References to Earnings
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, the acquisition of Andeavor and include expectations, estimates and projections concerning the business and operations, strategic initiatives 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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: 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; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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; our ability to manage disruptions in credit markets or changes to our credit rating; future levels of capital, environmental or 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; MPC's share repurchase authorizations, including the timing and amounts of any common stock repurchases; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan and to effect any share repurchases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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; 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 or ANDX; 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, 2017, and in MPC's Form 10-Q for the quarter ended June 30, 2018, filed with Securities and Exchange Commission (SEC). We have based our forward-looking statements on our current expectations, estimates and projections about our 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. Copies of MPC's Form 10-K and Forms 10-Q are available on the SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office. Copies of MPLX's Form 10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office. Copies of ANDX's Form 10-K are available on the SEC website, ANDX's website at http://ir.andeavorlogistics.com or by contacting ANDX's Investor Relations office.
Consolidated Statements of Income (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions, except per-share data) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Revenues and other income: | |||||||||||||||
Sales and other operating revenues(a) | $ | 22,787 | $ | 19,053 | $ | 63,599 | $ | 53,220 | |||||||
Sales to related parties | 201 | 157 | 572 | 458 | |||||||||||
Income from equity method investments | 96 | 84 | 262 | 224 | |||||||||||
Net gain on disposal of assets | 1 | — | 6 | 12 | |||||||||||
Other income | 47 | 92 | 122 | 219 | |||||||||||
Total revenues and other income | 23,132 | 19,386 | 64,561 | 54,133 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of revenues (excludes items below)(a) | 20,457 | 16,617 | 57,344 | 47,664 | |||||||||||
Purchases from related parties | 149 | 148 | 428 | 420 | |||||||||||
Depreciation and amortization | 555 | 517 | 1,616 | 1,574 | |||||||||||
Selling, general and administrative expenses(b) | 445 | 411 | 1,271 | 1,286 | |||||||||||
Other taxes | 123 | 116 | 348 | 339 | |||||||||||
Total costs and expenses | 21,729 | 17,809 | 61,007 | 51,283 | |||||||||||
Income from operations(b) | 1,403 | 1,577 | 3,554 | 2,850 | |||||||||||
Net interest and other financial costs(b) | 240 | 158 | 618 | 465 | |||||||||||
Income before income taxes | 1,163 | 1,419 | 2,936 | 2,385 | |||||||||||
Provision for income taxes | 222 | 415 | 525 | 706 | |||||||||||
Net income | 941 | 1,004 | 2,411 | 1,679 | |||||||||||
Less net income attributable to: | |||||||||||||||
Redeemable noncontrolling interest | 19 | 16 | 55 | 49 | |||||||||||
Noncontrolling interests | 185 | 85 | 527 | 214 | |||||||||||
Net income attributable to MPC | $ | 737 | $ | 903 | $ | 1,829 | $ | 1,416 | |||||||
Per-share data | |||||||||||||||
Basic: | |||||||||||||||
Net income attributable to MPC per share | $ | 1.63 | $ | 1.79 | $ | 3.96 | $ | 2.75 | |||||||
Weighted average shares: | 451 | 504 | 462 | 514 | |||||||||||
Diluted: | |||||||||||||||
Net income attributable to MPC per share | $ | 1.62 | $ | 1.77 | $ | 3.92 | $ | 2.73 | |||||||
Weighted average shares: | 456 | 508 | 466 | 518 | |||||||||||
(a) We adopted Accounting Standards Update 2014-09, Revenue - Revenue from contracts with customers, as of Jan. 1, 2018, | |||||||||||||||
(b) We adopted Accounting Standards Update 2017-07, Retirement Benefits Presentation of Pension and Postretirement Cost, as | |||||||||||||||
Supplemental Statistics (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Income from Operations by Segment | |||||||||||||||
Refining & Marketing(a) | $ | 666 | $ | 1,097 | $ | 1,558 | $ | 1,589 | |||||||
Speedway | 161 | 208 | 415 | 581 | |||||||||||
Midstream(a) | 679 | 355 | 1,863 | 996 | |||||||||||
Items not allocated to segments: | |||||||||||||||
Corporate and other unallocated items(b)(c) | (103) | (85) | (283) | (251) | |||||||||||
Litigation | — | — | — | (86) | |||||||||||
Impairments | — | 2 | 1 | 21 | |||||||||||
Income from operations(b) | 1,403 | 1,577 | 3,554 | 2,850 | |||||||||||
Net interest and other financial costs(b) | 240 | 158 | 618 | 465 | |||||||||||
Income before income taxes | 1,163 | 1,419 | 2,936 | 2,385 | |||||||||||
Provision for income taxes | 222 | 415 | 525 | 706 | |||||||||||
Net income | 941 | 1,004 | 2,411 | 1,679 | |||||||||||
Less net income attributable to: | |||||||||||||||
Redeemable noncontrolling interest | 19 | 16 | 55 | 49 | |||||||||||
Noncontrolling interests | 185 | 85 | 527 | 214 | |||||||||||
Net income attributable to MPC | $ | 737 | $ | 903 | $ | 1,829 | $ | 1,416 | |||||||
Capital Expenditures and Investments(d) | |||||||||||||||
Refining & Marketing | $ | 226 | $ | 198 | $ | 613 | $ | 570 | |||||||
Speedway | 98 | 108 | 225 | 221 | |||||||||||
Midstream | 593 | 423 | 1,676 | 1,267 | |||||||||||
Corporate and Other(e) | 28 | 32 | 97 | 92 | |||||||||||
Total | $ | 945 | $ | 761 | $ | 2,611 | $ | 2,150 | |||||||
(a) On Feb. 1, 2018, we contributed certain refining logistics assets and fuels distribution services to MPLX. The results of these | |||||||||||||||
(b) We adopted Accounting Standards Update 2017-07, Retirement Benefits Presentation of Pension and Postretirement Cost, as | |||||||||||||||
(c) Includes transaction-related costs from the Andeavor merger of $4 million and $14 million in the three and nine months ended | |||||||||||||||
(d) Capital expenditures include changes in capital accruals and investments in affiliates, excluding acquisitions. | |||||||||||||||
(e) Includes capitalized interest of $21 million, $13 million, $55 million and $39 million, respectively. | |||||||||||||||
Supplementary Statistics (Unaudited) (continued) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
MPC Consolidated Refined Product Sales Volumes | 2,394 | 2,357 | 2,358 | 2,272 | |||||||||||
Refining & Marketing (R&M) Operating Statistics | |||||||||||||||
R&M refined product sales volume (mbpd)(b) | 2,382 | 2,357 | 2,346 | 2,263 | |||||||||||
Export sales volume (mbpd)(c) | 280 | 331 | 289 | 291 | |||||||||||
R&M margin (dollars per barrel)(d) | $ | 14.25 | $ | 14.14 | $ | 13.48 | $ | 12.42 | |||||||
Crude oil capacity utilization (percent)(e) | 97.4 | 101.5 | 96.7 | 95.8 | |||||||||||
Refinery throughputs (mbpd):(f) | |||||||||||||||
Crude oil refined | 1,833 | 1,845 | 1,819 | 1,741 | |||||||||||
Other charge and blendstocks | 199 | 172 | 173 | 176 | |||||||||||
Total | 2,032 | 2,017 | 1,992 | 1,917 | |||||||||||
Sour crude oil throughput (percent) | 52 | 57 | 53 | 61 | |||||||||||
WTI-priced crude oil throughput (percent) | 30 | 23 | 28 | 20 | |||||||||||
Refined product yields (mbpd):(f) | |||||||||||||||
Gasoline | 942 | 939 | 942 | 910 | |||||||||||
Distillates | 676 | 673 | 659 | 627 | |||||||||||
Propane | 40 | 38 | 37 | 35 | |||||||||||
Feedstocks and special products | 313 | 298 | 294 | 285 | |||||||||||
Heavy fuel oil | 29 | 45 | 30 | 36 | |||||||||||
Asphalt | 73 | 67 | 68 | 64 | |||||||||||
Total | 2,073 | 2,060 | 2,030 | 1,957 | |||||||||||
Refinery direct operating costs ($/barrel):(g) | |||||||||||||||
Planned turnaround and major maintenance | $ | 1.77 | $ | 1.20 | $ | 1.64 | $ | 1.69 | |||||||
Depreciation and amortization | 1.29 | 1.34 | 1.31 | 1.44 | |||||||||||
Other manufacturing(h) | 3.54 | 3.83 | 3.71 | 4.10 | |||||||||||
Total | $ | 6.60 | $ | 6.37 | $ | 6.66 | $ | 7.23 | |||||||
R&M Operating Statistics by Region - Gulf Coast | |||||||||||||||
Refinery throughputs (mbpd):(i) | |||||||||||||||
Crude oil refined | 1,150 | 1,123 | 1,121 | 1,041 | |||||||||||
Other charge and blendstocks | 204 | 217 | 187 | 219 | |||||||||||
Total | 1,354 | 1,340 | 1,308 | 1,260 | |||||||||||
Sour crude oil throughput (percent) | 63 | 69 | 62 | 75 | |||||||||||
WTI-priced crude oil throughput (percent) | 17 | 14 | 15 | 10 | |||||||||||
Refined product yields (mbpd):(i) | |||||||||||||||
Gasoline | 567 | 538 | 557 | 525 | |||||||||||
Distillates | 442 | 438 | 421 | 393 | |||||||||||
Propane | 27 | 25 | 24 | 25 | |||||||||||
Feedstocks and special products | 314 | 326 | 301 | 310 | |||||||||||
Heavy fuel oil | 16 | 31 | 18 | 24 | |||||||||||
Asphalt | 22 | 19 | 21 | 17 | |||||||||||
Total | 1,388 | 1,377 | 1,342 | 1,294 | |||||||||||
Supplementary Statistics (Unaudited) (continued) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Refinery direct operating costs ($/barrel):(g) | |||||||||||||||
Planned turnaround and major maintenance | $ | 0.64 | $ | 0.90 | $ | 1.30 | $ | 1.86 | |||||||
Depreciation and amortization | 1.03 | 1.05 | 1.03 | 1.15 | |||||||||||
Other manufacturing(h) | 3.20 | 3.52 | 3.43 | 3.81 | |||||||||||
Total | $ | 4.87 | $ | 5.47 | $ | 5.76 | $ | 6.82 | |||||||
R&M Operating Statistics by Region - Midwest | |||||||||||||||
Refinery throughputs (mbpd):(i) | |||||||||||||||
Crude oil refined | 683 | 722 | 698 | 700 | |||||||||||
Other charge and blendstocks | 49 | 35 | 39 | 31 | |||||||||||
Total | 732 | 757 | 737 | 731 | |||||||||||
Sour crude oil throughput (percent) | 34 | 38 | 37 | 41 | |||||||||||
WTI-priced crude oil throughput (percent) | 52 | 38 | 49 | 34 | |||||||||||
Refined product yields (mbpd):(i) | |||||||||||||||
Gasoline | 375 | 401 | 385 | 385 | |||||||||||
Distillates | 234 | 235 | 238 | 234 | |||||||||||
Propane | 13 | 14 | 13 | 11 | |||||||||||
Feedstocks and special products | 53 | 50 | 46 | 47 | |||||||||||
Heavy fuel oil | 13 | 15 | 12 | 13 | |||||||||||
Asphalt | 51 | 48 | 47 | 47 | |||||||||||
Total | 739 | 763 | 741 | 737 | |||||||||||
Refinery direct operating costs ($/barrel):(g) | |||||||||||||||
Planned turnaround and major maintenance | $ | 3.74 | $ | 1.60 | $ | 2.13 | $ | 1.22 | |||||||
Depreciation and amortization | 1.68 | 1.72 | 1.70 | 1.80 | |||||||||||
Other manufacturing(h) | 3.89 | 3.96 | 3.96 | 4.19 | |||||||||||
Total | $ | 9.31 | $ | 7.28 | $ | 7.79 | $ | 7.21 | |||||||
Speedway Operating Statistics | |||||||||||||||
Convenience stores at period-end | 2,745 | 2,734 | |||||||||||||
Gasoline and distillate sales (millions of gallons) | 1,474 | 1,464 | 4,317 | 4,332 | |||||||||||
Gasoline and distillate margin (dollars per gallon)(j) | $ | 0.1651 | $ | 0.1772 | $ | 0.1620 | $ | 0.1727 | |||||||
Merchandise sales (in millions) | $ | 1,339 | $ | 1,295 | $ | 3,753 | $ | 3,693 | |||||||
Merchandise margin (in millions) | $ | 384 | $ | 374 | $ | 1,069 | $ | 1,065 | |||||||
Merchandise margin percent | 28.7 | % | 28.9 | % | 28.5 | % | 28.8 | % | |||||||
Same store gasoline sales volume (period over period)(k) | (1.2) | % | (3.1) | % | (1.8) | % | (1.6) | % | |||||||
Same store merchandise sales (period over period)(k)(l) | 4.9 | % | 0.3 | % | 3.4 | % | 1.5 | % | |||||||
Midstream Operating Statistics | |||||||||||||||
Crude oil & refined product pipeline throughputs (mbpd)(m) | 3,829 | 3,562 | 3,694 | 3,299 | |||||||||||
Terminal throughput (mbpd) | 1,474 | 1,496 | 1,468 | 1,470 | |||||||||||
Gathering system throughput (million cubic feet per day)(n) | 4,737 | 3,729 | 4,403 | 3,415 | |||||||||||
Natural gas processed (million cubic feet per day)(n) | 7,171 | 6,581 | 6,874 | 6,336 | |||||||||||
C2 (ethane) + NGLs fractionated (mbpd)(n) | 488 | 397 | 451 | 384 | |||||||||||
(a) Total average daily volumes of refined product sales to wholesale, branded and retail customers. | |||||||||||||||
(b) Includes intersegment sales. | |||||||||||||||
(c) Represents fully loaded export cargoes for each time period. These sales volumes are included in the total sales volume | |||||||||||||||
(d) Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs. | |||||||||||||||
(e) Based on calendar-day capacity, which is an annual average that includes down time for planned maintenance and other | |||||||||||||||
(f) Excludes inter-refinery volumes of 54 mbpd and 80 mbpd for the third quarter of 2018 and 2017, respectively and 53 mbpd and | |||||||||||||||
(g) Per barrel of total refinery throughputs. Effective with the Feb. 1, 2018, dropdown, direct operating costs related to certain | |||||||||||||||
(h) Includes utilities, labor, routine maintenance and other operating costs. | |||||||||||||||
(i) Includes inter-refinery transfer volumes. | |||||||||||||||
(j) The price paid by consumers less the cost of refined products, including transportation, consumer excise taxes and bank card | |||||||||||||||
(k) Same store comparison includes only locations owned at least 13 months. | |||||||||||||||
(l) Excludes cigarettes. | |||||||||||||||
(m) Includes common-carrier pipelines and private pipelines owned or operated by MPLX, excluding equity method investments. | |||||||||||||||
(n) Includes amounts related to unconsolidated equity method investments on a 100% basis. | |||||||||||||||
Segment Earnings Before Interest, Taxes, Depreciation & Amortization (Segment EBITDA) (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Segment EBITDA(a) | |||||||||||||||
Refining & Marketing(b) | $ | 923 | $ | 1,363 | $ | 2,319 | $ | 2,394 | |||||||
Speedway | 237 | 276 | 643 | 778 | |||||||||||
Midstream(b) | 884 | 524 | 2,440 | 1,524 | |||||||||||
Total Segment EBITDA(a) | 2,044 | 2,163 | 5,402 | 4,696 | |||||||||||
Total segment depreciation & amortization | (538) | (503) | (1,566) | (1,530) | |||||||||||
Items not allocated to segments | (103) | (83) | (282) | (316) | |||||||||||
Income from operations | 1,403 | 1,577 | 3,554 | 2,850 | |||||||||||
Net interest and other financial costs | 240 | 158 | 618 | 465 | |||||||||||
Income before income taxes | 1,163 | 1,419 | 2,936 | 2,385 | |||||||||||
Income tax provision | 222 | 415 | 525 | 706 | |||||||||||
Net income | 941 | 1,004 | 2,411 | 1,679 | |||||||||||
Less net income attributable to: | |||||||||||||||
Redeemable noncontrolling interest | 19 | 16 | 55 | 49 | |||||||||||
Noncontrolling interests | 185 | 85 | 527 | 214 | |||||||||||
Net income attributable to MPC | $ | 737 | $ | 903 | $ | 1,829 | $ | 1,416 | |||||||
(a) Segment EBITDA represents segment earnings before interest and financing costs, interest income, income taxes and | |||||||||||||||
(b) On Feb. 1, 2018, we contributed certain refining logistics assets and fuels distribution services to MPLX. The results of these | |||||||||||||||
Select Financial Data (Unaudited) | |||||||
(In millions) | September 30 | June 30 | |||||
Cash and cash equivalents | $ | 4,992 | $ | 4,999 | |||
MPLX debt | 12,890 | 11,875 | |||||
Total consolidated debt | 18,449 | 17,267 | |||||
Redeemable noncontrolling interest | 1,003 | 1,003 | |||||
Equity | 19,031 | 18,818 | |||||
Debt-to-total-capital ratio (percent) | 48 | 47 | |||||
Shares outstanding | 451 | 456 | |||||
Net cash provided by operations (quarter ended) | $ | 1,182 | $ | 2,386 | |||
Three Months Ended | Nine Months Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Dividends paid per share | $ | 0.46 | $ | 0.40 | $ | 1.38 | $ | 1.12 | |||||||
Reconciliation of Refining & Marketing Margin to Refining & Marketing Income from Operations | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(In millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Refining & Marketing income from operations | $ | 666 | $ | 1,097 | $ | 1,558 | $ | 1,589 | |||||||
Plus: | |||||||||||||||
Refinery direct operating costs(a) | 992 | 933 | 2,912 | 3,029 | |||||||||||
Refinery depreciation and amortization | 241 | 249 | 712 | 755 | |||||||||||
Other: | |||||||||||||||
Operating expenses, net(a)(b) | 748 | 328 | 2,101 | 1,075 | |||||||||||
Depreciation and amortization | 16 | 17 | 49 | 50 | |||||||||||
Refining & Marketing margin(c) | $ | 2,663 | $ | 2,624 | $ | 7,332 | $ | 6,498 | |||||||
(a) Excludes depreciation and amortization. | |||||||||||||||
(b) Includes fees paid to MPLX for various midstream services. MPLX's results are reported in MPC's Midstream segment. | |||||||||||||||
(c) Refining & Marketing margin is defined as sales revenue less cost of refinery inputs and purchased products, excluding any | |||||||||||||||
Reconciliation of Speedway Total Margin to Speedway Income from Operations | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Speedway income from operations | $ | 161 | $ | 208 | $ | 415 | $ | 581 | |||||||
Plus (Less): | |||||||||||||||
Operating, selling, general and administrative expenses | 418 | 390 | 1,203 | 1,133 | |||||||||||
Depreciation and amortization | 76 | 68 | 228 | 197 | |||||||||||
Income from equity method investments | (18) | (20) | (51) | (54) | |||||||||||
Net gain on disposal of assets | (1) | (2) | (1) | (12) | |||||||||||
Other income | (2) | (3) | (5) | (9) | |||||||||||
Speedway total margin | $ | 634 | $ | 641 | $ | 1,789 | $ | 1,836 | |||||||
Speedway total margin:(a) | |||||||||||||||
Gasoline and distillate margin | $ | 243 | $ | 259 | $ | 699 | $ | 748 | |||||||
Merchandise margin | 384 | 374 | 1,069 | 1,065 | |||||||||||
Other margin | 7 | 8 | 21 | 23 | |||||||||||
Speedway total margin | $ | 634 | $ | 641 | $ | 1,789 | $ | 1,836 | |||||||
(a) Speedway gasoline and distillate margin is defined as the price paid by consumers less the cost of refined products, including | |||||||||||||||
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-reports-third-quarter-2018-results-300742059.html
SOURCE Marathon Petroleum Corporation
Article Date
11/1/2018Marathon Petroleum Corp. Announces Quarterly Dividend
Source: PR Newswire
FINDLAY, Ohio, Oct. 31, 2018 /PRNewswire/ -- The board of directors of Marathon Petroleum Corp. (NYSE: MPC) has declared a dividend of $0.46 per share on common stock. The dividend is payable Dec. 10, 2018, to shareholders of record as of the close of business Nov. 21, 2018.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (NYSE: MPC) is a leading, nationwide, integrated energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with over 3 million barrels per day of crude oil capacity across 16 refineries. MPC's marketing system includes approximately 7,800 branded locations across the United States, including approximately 5,600 Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates approximately 3,900 retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interests in two midstream companies, MPLX LP (NYSE: MPLX) and Andeavor Logistics LP (NYSE: ANDX), which own and operate gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure.
Investor Relations Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-announces-quarterly-dividend-300741135.html
SOURCE Marathon Petroleum Corporation
Article Date
10/31/201810/26/2018 - Andeavor Logistics Announces Quarterly Distribution
Andeavor Logistics Announces Quarterly Distribution
Source: PR Newswire
FINDLAY, Ohio, Oct. 26, 2018 /PRNewswire/ -- Andeavor Logistics LP (NYSE: ANDX) announced today the declaration of its quarterly cash distribution for the third quarter 2018 of $1.03 per limited partnership unit, or $4.12 on an annualized basis. The distribution is unchanged from the prior quarter and will be paid on Nov. 14, 2018, to common unitholders of record as of Nov. 5, 2018.
"We are evaluating the financial business plans of ANDX, including the partnership's distribution policies, with the intent to move toward practices that are more consistent with the general partner's approach on MPLX LP (NYSE: MPLX)," stated Gary Heminger, who became chairman and chief executive officer of ANDX upon the closing of Marathon Petroleum Corp.'s (NYSE: MPC) combination with Andeavor. "This approach will include meaningfully higher distribution coverage, leverage levels at or below 4.0x debt-to-EBITDA*, no planned public equity issuances, and independent sustainability with limited parent support."
*EBITDA is defined as earnings before interest, taxes, depreciation and amortization.
About Andeavor Logistics LP
Andeavor Logistics LP is a fee-based, full-service, diversified midstream logistics company, with integrated assets across the western and mid-continent regions of the United States. Andeavor Logistics operates through three business segments: Terminalling and Transportation, Gathering and Processing and Wholesale. The Terminalling and Transportation segment consists of marine terminals, refined product truck terminals, rail terminals, dedicated storage facilities and transportation pipelines. The Gathering and Processing segment consists of crude oil gathering systems and pipelines as well as natural gas gathering pipelines, processing facilities and fractionation facilities. The Wholesale segment consists of a fee-based fuel wholesale business. Andeavor Logistics is a Delaware limited partnership, headquartered in Findlay, Ohio.
Forward Looking Statements
This press release contains "forward-looking" statements within the meaning of federal securities laws regarding ANDX. These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the amount and timing of our cash distributions. You can identify forward-looking statements by words such as "anticipate," "approach," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "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 our control and are difficult to predict. Factors that could cause ANDX's actual results to differ materially from those implied in the forward-looking statements include without limitation statements concerning: the amount and timing of future distributions; expected coverage improvement and distributable cash growth; our ability to execute a funding model with no additional equity issuances and limited parent support; net earnings and EBITDA run rate; our ability to achieve our financial and strategic targets; expected unitholder value creation; negative capital market conditions, including an increase of the current yield on common units; our financial position, liquidity and capital resources, including available capacity under our credit facilities and access to debt on commercially reasonable terms; our financial and operational outlook, and ability to fulfill that outlook; continued/further volatility in and/or degradation of market and industry conditions and their effects on our business; our ability to manage disruptions in credit markets or changes to our credit rating; adverse changes in laws including with respect to tax and regulatory matters; other risk factors inherent to ANDX's industry; and the factors set forth under the heading "Risk Factors" in ANDX's Annual Report on Form 10-K for the year ended Dec. 31, 2017, filed with the Securities and Exchange Commission ("SEC"). Although we believe the assumptions concerning future events are reasonable, a number of factors could cause results to differ materially from those projected. Our operations involve risks and uncertainties, many of which are outside of our control and could materially affect our results. For more information concerning factors that could affect these statements, see our annual report on Form 10-K, quarterly reports on Form 10-Q, and other filings with the SEC, available at http://www.andeavorlogistics.com or by contacting ANDX's Investor Relations Office. We undertake no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise.
This release serves as qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b)(4) and (d). Please note that 100 percent of Andeavor Logistics LP's distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, all of Andeavor Logistics' distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate for individuals or corporations, as applicable. Nominees, and not Andeavor Logistics, are treated as withholding agents responsible for withholding distributions received by them on behalf of foreign investors.
Investor Relations Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
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SOURCE Andeavor Logistics LP
Article Date
10/26/2018MPLX LP to Announce Third-Quarter 2018 Financial Results On November 1
Source: PR Newswire
FINDLAY, Ohio, Oct. 15, 2018 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will release its 2018 third-quarter financial results before the market opens on Thursday, November 1, 2018. MPLX will live broadcast its conference call with senior executives regarding its financial results and provide an update on company operations at 11 a.m. EDT.
Interested parties may listen to the conference call by visiting MPLX's website at http://www.mplx.com and clicking on the "2018 Third-Quarter Financial Results" link. A replay of the webcast will be available on the company's website. Financial information, including the earnings release and other investor-related material, also will be available online. Replays of the conference call will be available on the company's website through Thursday, November 15.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; the transportation, storage and distribution of crude oil and refined petroleum products; and the refining logistics and fuels distributions services through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.7 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity.
Investor Relations Contacts:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/mplx-lp-to-announce-third-quarter-2018-financial-results-on-november-1-300730926.html
SOURCE MPLX LP
Article Date
10/15/201810/15/2018 - Marathon Petroleum Corp. To Announce Third-Quarter 2018 Financial Results On November 1
Marathon Petroleum Corp. To Announce Third-Quarter 2018 Financial Results On November 1
Source: PR Newswire
FINDLAY, Ohio, Oct. 15, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) will release its 2018 third-quarter financial results before the market opens on Thursday, November 1, 2018. MPC will live broadcast its conference call with senior executives regarding its financial results and provide an update on company operations at 9 a.m. EDT.
Interested parties may listen to the conference call by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2018 Third-Quarter Financial Results" link. A replay of the webcast will be available on the company's website. Financial information, including the earnings release and other investor-related material, also will be available online. Replays of the conference call will be available on the company's website through Thursday, November 15.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (NYSE: MPC) is a leading, nationwide, integrated energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with over 3 million barrels per day of crude oil capacity across 16 refineries. MPC's marketing system includes approximately 7,800 branded locations across the United States, including approximately 5,600 Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates approximately 4,000 retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interest in two midstream companies, MPLX LP (NYSE: MPLX) and Andeavor Logistics LP (NYSE: ANDX), which own and operate gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure.
Investor Relations Contacts:
Kristina Kazarian (419) 421-2071
Media Contacts:
Chuck Rice (419) 421-2521
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-to-announce-third-quarter-2018-financial-results-on-november-1-300730922.html
SOURCE Marathon Petroleum Corporation
Article Date
10/15/201810/1/2018 - Marathon Petroleum Corporation announces final results of note exchange offers and consent solicitations
Marathon Petroleum Corporation announces final results of note exchange offers and consent solicitations
Source: PR Newswire
FINDLAY, Ohio, Oct. 1, 2018 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC) today announced the final results of the previously announced offers to exchange (the "Exchange Offers") any and all outstanding senior notes issued by Andeavor as set forth in the table below (the "Existing Andeavor Notes") for (1) up to $3,375,000,000 aggregate principal amount of new senior notes issued by MPC (the "New MPC Notes") and (2) cash, and related consent solicitations (the "Consent Solicitations") to adopt certain amendments to each of the indentures governing the Existing Andeavor Notes.
The Exchange Offers and Consent Solicitations expired at 12:01, a.m., New York City time, on Oct. 1, 2018 (the "Expiration Date"). As of the Expiration Date, the following principal amounts of each series of Existing Andeavor Notes were validly tendered and not validly withdrawn (and consents thereby validly given and not validly revoked):
Title of Series/CUSIP Number of Existing | Aggregate Principal Amount | Existing Andeavor Notes Tendered at | |
Principal Amount | Percentage | ||
5.375% Senior Notes due 2022 / 881609AZ4 | $475,000,000 | $336,820,000 | 70.91% |
4.750% Senior Notes due 2023 / | $850,000,000 | $613,986,000 | 72.23% |
5.125% Senior Notes due 2024 / 881609BA8 | $300,000,000 | $241,283,000 | 80.43% |
5.125% Senior Notes due 2026 / | $750,000,000 | $718,710,000 | 95.83% |
3.800% Senior Notes due 2028 / 03349MAA3 | $500,000,000 | $496,487,000 | 99.30% |
4.500% Senior Notes due 2048 / 03349MAB1 | $500,000,000 | $497,590,000 | 99.52% |
The Exchange Offers and Consent Solicitations were made in connection with MPC's acquisition of Andeavor, which was completed on Oct. 1, 2018, and pursuant to the terms and subject to the conditions set forth in the offering memorandum and consent solicitation statement, dated Aug. 29, 2018 (the "Offering Memorandum and Consent Solicitation Statement").
Upon settlement of the Exchange Offers and Consent Solicitations, which is expected to occur on Tuesday, Oct. 2, 2018, MPC will (i) issue to the holders of the Existing Andeavor Notes whose securities were tendered on or before 5:00 p.m., New York City Time, on September 12, 2018 (the "Early Tender Date"), and accepted for exchange, New MPC Notes in an equal aggregate principal amount to the principal amount of the Existing Andeavor Notes that have been accepted for exchange, (ii) issue to the holders of the Existing Andeavor Notes whose securities were tendered after the Early Tender Date but prior to the Expiration Date and accepted for exchange, New MPC Notes in an aggregate principal amount equal to $970 for each $1,000 aggregate principal amount of Existing Andeavor Notes that have been accepted for exchange, and (iii) pay to the holders of the Existing Andeavor Notes whose securities have been accepted for exchange a total of $2,904,874 in cash as part of the exchange consideration.
In addition, as previously disclosed, Andeavor received consents in the Consent Solicitations sufficient to approve amendments to the respective indentures governing the Existing Andeavor Notes. As a result, Andeavor and the trustee for the Existing Andeavor Notes entered into supplemental indentures implementing those amendments to the indentures governing the Existing Andeavor Notes.
The New MPC Notes will only be issued to eligible holders of Existing Andeavor Notes who have completed and returned an eligibility form confirming that they are either (i) "Qualified Institutional Buyers" as that term is defined in Rule 144A under the Securities Act of 1933 (the "Securities Act") or (ii) persons that are outside of the "United States" and that are (a) not "U.S. persons," as those terms are defined in Rule 902 under the Securities Act, (b) "non-U.S. qualified offerees," as defined in the Offering Memorandum and Consent Solicitation Statement, and (c) not located in Canada.
The New MPC Notes have not been and will not be registered under the Securities Act or any state securities laws. Therefore, the New MPC Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any applicable state securities laws.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (NYSE: MPC) is a leading integrated downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with over 3 million barrels per day of crude oil capacity across 16 refineries. MPC's marketing system includes approximately 7,800 branded locations across the United States, including approximately 5,600 Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates approximately 4,000 retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interest in two midstream companies, MPLX LP (NYSE: MPLX) and Andeavor Logistics LP (NYSE: ANDX), which own and operate gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure.
Investor Relations Contact:
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
This communication 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, the acquisition of Andeavor and include expectations, estimates and projections concerning the business and operations, strategic initiatives 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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: 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; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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; our ability to manage disruptions in credit markets or changes to our credit rating; future levels of capital, environmental or 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; MPC's share repurchase authorizations, including the timing and amounts of any common stock repurchases; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan and to effect any share repurchases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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; 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 or Andeavor Logistics LP (ANDX); 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, 2017, and in MPC's Form 10-Q for the quarter ended June 30, 2018, filed with Securities and Exchange Commission (SEC). We have based our forward-looking statements on our current expectations, estimates and projections about our 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. Copies of MPC's Form 10-K are available on the SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office. Copies of MPLX's Form 10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office. Copies of ANDX's Form 10-K are available on the SEC website, ANDX's website at http://ir.andeavorlogistics.com or by contacting ANDX's Investor Relations office.
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SOURCE Marathon Petroleum Corporation
Article Date
10/1/2018Marathon Petroleum Corp. Announces Successful Completion of Andeavor Combination, Creating the Leading US Refining, Midstream and Marketing Company
Source: PR Newswire
FINDLAY, Ohio, Oct. 1, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) has closed the transaction in which it acquired all of the outstanding shares of Andeavor. As of this morning, Andeavor ceased to be publicly traded and its common stock discontinued trading on the New York Stock Exchange.
"This transformative transaction is a significant milestone in our company's more than 130-year history," said MPC Chairman and Chief Executive Officer Gary R. Heminger. "MPC is now the leading refining, midstream, and marketing company in the U.S., and is well-positioned for long-term growth and shareholder value creation."
"We are excited to begin unlocking the extraordinary potential across our new platform, including approximately $1 billion of tangible annual run-rate synergies we expect within the first three years," added Heminger. "We look forward to sharing more details around our plans at our upcoming December Investor Day."
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (NYSE: MPC) is a leading integrated downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system with over 3 million barrels per day of crude oil capacity across 16 refineries. MPC's marketing system includes approximately 7,800 branded locations across the United States, including approximately 5,600 Marathon brand retail outlets. Speedway LLC, an MPC subsidiary, owns and operates approximately 4,000 retail convenience stores across the United States. MPC also owns the general partner and majority limited partner interest in two midstream companies, MPLX LP (NYSE: MPLX) and Andeavor Logistics LP (NYSE: ANDX), which own and operate gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure.
Investor Relations Contact
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
Forward Looking Statements
This communication 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, the acquisition of Andeavor and include expectations, estimates and projections concerning the business and operations, strategic initiatives 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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: 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; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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; our ability to manage disruptions in credit markets or changes to our credit rating; future levels of capital, environmental or 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; MPC's share repurchase authorizations, including the timing and amounts of any common stock repurchases; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan and to effect any share repurchases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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; 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 or Andeavor Logistics LP (ANDX); 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, 2017, and in MPC's Form 10-Q for the quarter ended June 30, 2018, filed with Securities and Exchange Commission (SEC). We have based our forward-looking statements on our current expectations, estimates and projections about our 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. Copies of MPC's Form 10-K are available on the SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office. Copies of MPLX's Form 10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office. Copies of ANDX's Form 10-K are available on the SEC website, ANDX's website at http://ir.andeavorlogistics.com or by contacting ANDX's Investor Relations office.
View original content:SOURCE Marathon Petroleum Corporation
Article Date
10/1/2018Shareholders of Marathon Petroleum Corp. and Andeavor approve strategic combination
Source: PR Newswire
FINDLAY, Ohio, Sept. 24, 2018 /PRNewswire/ -- At special meetings today, shareholders of both Marathon Petroleum Corp. (NYSE: MPC) and Andeavor (NYSE: ANDV) voted to approve the strategic combination of MPC and Andeavor. MPC shareholders approved the issuance of shares of MPC common stock and Andeavor shareholders approved the adoption of the previously announced agreement and plan of merger.
MPC's proposal to issue shares in connection with the transaction was supported by approximately 98 percent of votes cast, representing approximately 73 percent of MPC's outstanding shares. Andeavor's proposal to approve the transaction was supported by approximately 99 percent of votes cast, representing approximately 74 percent of Andeavor's outstanding shares.
"We are pleased that the shareholders of both companies voted overwhelmingly in support of this transaction," said MPC Chairman and Chief Executive Officer Gary R. Heminger. "As we look forward, we remain focused on the tremendous potential this combination will bring our shareholders and are excited to begin executing our strategy to transform our company and realize our expected synergies."
Also at the MPC special meeting, MPC's proposal to increase the size of its board of directors by two members was not approved.
MPC and Andeavor expect the closing of the transaction to occur on Oct. 1, 2018, subject to customary closing conditions.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 22 states. MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Through subsidiaries, MPC owns the general partner of MPLX LP ("MPLX"), a midstream master limited partnership. Through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.7 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, natural gas liquids, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
Investor Relations Contact
Kristina Kazarian (419) 421-2071
Media Contact:
Chuck Rice (419) 421-2521
Forward-looking Statements
This communication 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, the proposed transaction between MPC and Andeavor ("ANDV") and include expectations, estimates and projections concerning the business and operations, strategic initiatives 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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: the ability to complete the proposed transaction between MPC and ANDV on anticipated terms and timetable; the ability to satisfy conditions to the closing of the transaction contemplated by the merger agreement; the ability to obtain regulatory approvals of the proposed transaction on the proposed terms and schedule, and any conditions imposed on the combined entity in connection with consummation of the proposed transaction; the risk that the cost savings and any other synergies from the proposed transaction may not be fully realized or may take longer to realize than expected; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of ANDV; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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; our ability to manage disruptions in credit markets or changes to our credit rating; future levels of capital, environmental or 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; MPC's share repurchase authorizations, including the timing and amounts of any common stock repurchases; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan and to effect any share repurchases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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; 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, 2017, and in the Form S-4 filed by MPC, filed with Securities and Exchange Commission (SEC). We have based our forward-looking statements on our current expectations, estimates and projections about our 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. Investors and security holders are able to obtain the documents free of charge at the SEC's website, www.sec.gov, from MPC at its website, www.marathonpetroleum.com, or by contacting MPC's Investor Relations at 419.421.2414
View original content:http://www.prnewswire.com/news-releases/shareholders-of-marathon-petroleum-corp-and-andeavor-approve-strategic-combination-300717623.html
SOURCE Marathon Petroleum Corporation
Article Date
9/24/20189/13/2018 - Marathon Petroleum Corporation and Andeavor announce successful early note exchange tender period
Marathon Petroleum Corporation and Andeavor announce successful early note exchange tender period
Source: PR Newswire
FINDLAY, Ohio and SAN ANTONIO, Sept. 13, 2018 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC) and Andeavor (NYSE: ANDV) today announced that, in connection with the previously announced offers to exchange (the "Exchange Offers") any and all outstanding senior notes issued by Andeavor as set forth in the table below (the "Existing Andeavor Notes") for (1) up to $3,375,000,000 aggregate principal amount of new senior notes issued by MPC (the "New MPC Notes") and (2) cash, and related consent solicitations (the "Consent Solicitations") to adopt certain amendments to each of the indentures governing the Existing Andeavor Notes (the "Indenture Amendments"), Andeavor has received the requisite number of consents to adopt the Indenture Amendments with respect to each of the six outstanding series of Existing Andeavor Notes that are subject to the Exchange Offers and Consent Solicitations. Andeavor intends to promptly enter into supplemental indentures with the trustee for the Existing Andeavor Notes (the "Supplemental Indentures") to effect the Indenture Amendments.
Withdrawal rights for the Exchange Offers and Consent Solicitations expired as of 5:00 p.m., New York City time, on Sept. 12, 2018 (the "Withdrawal Deadline"). As of the Withdrawal Deadline, the following principal amounts of each series of Existing Andeavor Notes have been validly tendered and not validly withdrawn (and consents thereby validly given and not validly revoked):
Title of Series/CUSIP Number of Existing | Aggregate Principal Amount | Existing Andeavor Notes Tendered at | |
Principal Amount | Percentage | ||
5.375% Senior Notes due 2022 / 881609AZ4 | $475,000,000 | $336,743,000 | 70.89% |
4.750% Senior Notes due 2023 / | $850,000,000 | $613,986,000 | 72.23% |
5.125% Senior Notes due 2024 / 881609BA8 | $300,000,000 | $241,048,000 | 80.35% |
5.125% Senior Notes due 2026 / | $750,000,000 | $716,988,000 | 95.60% |
3.800% Senior Notes due 2028 / 03349MAA3 | $500,000,000 | $495,737,000 | 99.15% |
4.500% Senior Notes due 2048 / 03349MAB1 | $500,000,000 | $496,595,000 | 99.32% |
The Exchange Offers and Consent Solicitations are being made pursuant to the terms and subject to the conditions set forth in the offering memorandum and consent solicitation statement, dated Aug. 29, 2018 (the "Offering Memorandum and Consent Solicitation Statement"). The terms of the Exchange Offers and Consent Solicitations remain as set forth in the Offering Memorandum and Consent Solicitation Statement.
The Exchange Offers and Consent Solicitations are conditioned upon, and the Supplemental Indentures will only become operative upon, the consummation of the proposed acquisition (the "Acquisition") of Andeavor by MPC pursuant to the Agreement and Plan of Merger, dated as of April 29, 2018, as amended, by and among MPC, Andeavor, Mahi Inc., a wholly-owned subsidiary of MPC ("Merger Sub 1"), and Mahi LLC, a wholly-owned subsidiary of MPC ("Merger Sub 2"), pursuant to which Merger Sub 1 has agreed to be merged with and into Andeavor with Andeavor surviving the merger as a wholly-owned subsidiary of MPC, and Andeavor has agreed to, immediately following the first merger, be merged with and into Merger Sub 2 with Merger Sub 2 surviving the merger as a wholly-owned subsidiary of MPC.
The Exchange Offers and Consent Solicitations will expire at 12:01 a.m., New York City time, on Oct. 1, 2018, unless such date is extended (the "Expiration Date"). MPC currently expects settlement of the Exchange Offers to occur on Oct. 2, 2018, unless the Expiration Date is extended. MPC and Andeavor reserve the right to terminate, withdraw, amend or extend the Exchange Offers and Consent Solicitations in their discretion.
Documents relating to the Exchange Offers and Consent Solicitations have been and will only be distributed to eligible holders of Existing Andeavor Notes who complete and return an eligibility form confirming that they are either (a) a "Qualified Institutional Buyer" as that term is defined in Rule 144A under the Securities Act of 1933 or (b) a person that is outside the "United States" and is (i) not a "U.S. person," as those terms are defined in Rule 902 under the Securities Act of 1933, (ii) a "non-U.S. qualified offeree" (as defined in the Offering Memorandum and Consent Solicitation Statement) and (iii) not located in Canada. The complete terms and conditions of the Exchange Offers and Consent Solicitations are described in the Offering Memorandum and Consent Solicitation Statement, a copy of which may be obtained by contacting Global Bondholder Services Corporation, the exchange agent and information agent in connection with the Exchange Offers and Consent Solicitations, at (866) 924-2200 (U.S. toll-free) or (212) 430-3774 (banks and brokers). The eligibility form is available electronically at: http://gbsc-usa.com/eligibility/marathon.
This press release does not constitute an offer to sell or purchase, or a solicitation of an offer to sell or purchase, or the solicitation of tenders or consents with respect to, any security. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful. The Exchange Offers and Consent Solicitations are being made solely pursuant to the Offering Memorandum and Consent Solicitation Statement and only to such persons and in such jurisdictions as is permitted under applicable law.
The New MPC Notes have not been and will not be registered under the Securities Act of 1933 or any state securities laws. Therefore, the New MPC Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act of 1933 and any applicable state securities laws.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 22 states. MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Through subsidiaries, MPC owns the general partner of MPLX LP ("MPLX"), a midstream master limited partnership. Through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.7 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, natural gas liquids, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
About Andeavor
Andeavor is a premier, highly integrated marketing, logistics and refining company. Andeavor's retail-marketing system includes approximately 3,330 stations marketed under multiple well-known fuel brands, including ARCO®, SUPERAMERICA®, Shell®, Exxon™, Mobil™, Tesoro®, USA Gasoline™ and Giant®. It also has ownership in Andeavor Logistics LP (NYSE: ANDX) and its non-economic general partner. Andeavor operates 10 refineries with a combined capacity of approximately 1.2 million barrels per day in the mid-continent and western United States.
Forward-looking Statements
This communication contains forward-looking statements within the meaning of federal securities laws regarding MPC and Andeavor. These forward-looking statements relate to, among other things, the proposed transaction between MPC and Andeavor and include expectations, estimates and projections concerning the business and operations, strategic initiatives and value creation plans of MPC, MPLX, Andeavor and Andeavor Logistics ("ANDX"). 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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 companies' control and are difficult to predict. Factors that could cause MPC's or Andeavor's actual results to differ materially from those implied in the forward-looking statements include: the ability to complete the proposed transaction between MPC and Andeavor on anticipated terms and timetable, if at all; the ability to obtain approval by the shareholders of Andeavor and MPC related to the proposed transaction and the ability to satisfy various other conditions to the closing of the transaction contemplated by the merger agreement; the ability to obtain regulatory approvals of the proposed transaction on the proposed terms and schedule, and any conditions imposed on the combined entities in connection with consummation of the proposed transaction; the risk that the cost savings and any other synergies from the proposed transaction may not be fully realized or may take longer to realize than expected; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of Andeavor; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or earnings per share; the regional, national and worldwide availability and pricing of refined products, crude oil, natural gas, natural gas liquids and other feedstocks; consumer demand for refined products; our ability to manage disruptions in credit markets or changes to our credit rating; future levels of capital, environmental or 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; MPC's share repurchase authorizations, including the timing and amounts of any common stock repurchases; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan and to effect any share repurchases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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; 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 ANDX; and the factors set forth under the heading "Risk Factors" in MPC's and Andeavor's respective Annual Reports on Form 10-K for the year ended Dec. 31, 2017 and in the Form S-4 filed by MPC with the Securities and Exchange Commission and declared effective on August 3, 2018. We have based our forward-looking statements on our current expectations, estimates and projections about our 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 respective 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.
Additional Information and Where to Find It
In connection with the proposed transaction, MPC and Andeavor have filed relevant materials with the SEC, including MPC's registration statement on Form S-4 that includes a definitive joint proxy statement/prospectus and was declared effective by the SEC on August 3, 2018. INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final joint proxy statement/prospectus will be mailed to stockholders of MPC and Andeavor. Investors and security holders will be able to obtain the documents free of charge at the SEC's website, www.sec.gov, from MPC at its website, www.marathonpetroleum.com, or by contacting MPC's Investor Relations at 419.421.2414, or from Andeavor at its website, www.andeavor.com, or by contacting Andeavor's Investor Relations at 210.626.4757.
Participants in the Solicitation Regarding the Proposed Acquisition
MPC and Andeavor and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed Acquisition. Information concerning MPC's participants is set forth in the proxy statement, filed March 15, 2018, for MPC's 2018 annual meeting of stockholders as filed with the SEC on Schedule 14A. Information concerning Andeavor's participants is set forth in the proxy statement, filed March 15, 2018, for Andeavor's 2018 annual meeting of stockholders as filed with the SEC on Schedule 14A. Additional information regarding the interests of such participants in the solicitation of proxies in respect of the proposed transaction are included in the registration statement and joint proxy statement/prospectus and other relevant materials filed with the SEC when they become available.
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corporation-and-andeavor-announce-successful-early-note-exchange-tender-period-300712043.html
SOURCE Marathon Petroleum Corporation
Article Date
9/13/20188/29/2018 - Marathon Petroleum Corporation Commences Exchange Offers and Andeavor Commences Consent Solicitations
Marathon Petroleum Corporation Commences Exchange Offers and Andeavor Commences Consent Solicitations
Source: PR Newswire
FINDLAY, Ohio and SAN ANTONIO, Aug. 29, 2018 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC) ("MPC") and Andeavor (NYSE: ANDV) today announced that, in connection with the anticipated combination of MPC and Andeavor, MPC has commenced offers to exchange (each an "Exchange Offer" and collectively, the "Exchange Offers") any and all outstanding notes issued by Andeavor as set forth in the table below (the "Existing Andeavor Notes") for (1) up to $3,375,000,000 aggregate principal amount of new notes issued by MPC (the "New MPC Notes") and (2) cash.
The following table sets forth the Exchange Consideration, Early Tender Premium and Total Exchange Consideration for each series of Existing Andeavor Notes:
|
Title of |
Maturity |
Aggregate |
Exchange |
Early Tender |
Total Exchange |
|
5.375% Senior Notes |
October 1, |
$475,000,000 |
$970 principal amount of |
$30 principal amount of |
$1,000 principal amount of |
|
4.750% Senior Notes |
December |
$850,000,000 |
$970 principal amount of |
$30 principal amount of |
$1,000 principal amount of |
|
5.125% Senior Notes |
April 1, 2024 |
$300,000,000 |
$970 principal amount of New MPC 5.125% Senior Notes due 2024 and |
$30 principal amount of |
$1,000 principal amount of |
|
5.125% Senior Notes |
December |
$750,000,000 |
$970 principal amount of New MPC 5.125% Senior Notes due 2026 and |
$30 principal amount of |
$1,000 principal amount of |
|
3.800% Senior Notes |
April 1, 2028 |
$500,000,000 |
$970 principal amount of New MPC 3.800% Senior Notes due 2028 and |
$30 principal amount of |
$1,000 principal amount of |
|
4.500% Senior Notes |
April 1, 2048 |
$500,000,000 |
$970 principal amount of New MPC 4.500% Senior Notes due 2048 and |
$30 principal amount of |
$1,000 principal amount of |
|
(1) For each $1,000 principal amount of Existing Andeavor Notes accepted for exchange. | |||||
|
(2) Includes Early Tender Premium. | |||||
In conjunction with the Exchange Offers, Andeavor is soliciting consents (each, a "Consent Solicitation" and, collectively, the "Consent Solicitations") to adopt certain proposed amendments to each of the indentures governing the Existing Andeavor Notes to eliminate certain of the covenants, restrictive provisions and events of default from such indentures. Each Exchange Offer and Consent Solicitation is conditioned upon the completion of the other Exchange Offers and Consent Solicitations, although MPC may waive such condition at any time with respect to an Exchange Offer. Any waiver of a condition by MPC with respect to an Exchange Offer will automatically waive such condition with respect to the corresponding Consent Solicitation, as applicable.
The Exchange Offers and Consent Solicitations are being made pursuant to the terms and subject to the conditions set forth in the offering memorandum and consent solicitation statement dated Aug. 29, 2018 (the "Offering Memorandum and Consent Solicitation Statement").
The Exchange Offers and Consent Solicitations are conditioned upon the consummation of the proposed acquisition (the "Acquisition") of Andeavor by MPC pursuant to the Agreement and Plan of Merger, dated as of April 29, 2018, as amended, by and among MPC, Andeavor, Mahi Inc., a wholly-owned subsidiary of MPC ("Merger Sub 1"), and Mahi LLC, a wholly-owned subsidiary of MPC ("Merger Sub 2"), pursuant to which Merger Sub 1 has agreed to be merged with and into Andeavor with Andeavor surviving the merger as a wholly-owned subsidiary of MPC, and Andeavor has agreed to, immediately following the first merger, be merged with and into Merger Sub 2 with Merger Sub 2 surviving the merger as a wholly-owned subsidiary of MPC.
Holders who validly tender their Existing Andeavor Notes at or prior to 5:00 p.m., New York City time, on Sept. 12, 2018, unless extended (the "Early Tender Date"), will be eligible to receive the applicable Total Exchange Consideration as set forth in the table above, which includes the applicable Early Tender Premium as set forth in the table above, for all such Existing Andeavor Notes that are accepted. For each $1,000 principal amount of Existing Andeavor Notes validly tendered after the Early Tender Date but prior to 12:01 a.m., New York City time, on Oct. 1, 2018, unless extended (the "Expiration Date"), holders of Existing Andeavor Notes will not be eligible to receive the applicable Early Tender Premium and, accordingly, will only be eligible to receive the applicable Exchange Consideration as set forth in the table above on the settlement date. The settlement date is expected to be the business day after the Expiration Date.
Documents relating to the Exchange Offers and Consent Solicitations will only be distributed to eligible holders of Existing Andeavor Notes who complete and return an eligibility form confirming that they are either (a) a "Qualified Institutional Buyer" as that term is defined in Rule 144A under the Securities Act of 1933 or (b) a person that is outside the "United States" and is (i) not a "U.S. person," as those terms are defined in Rule 902 under the Securities Act of 1933, (ii) a "non-U.S. qualified offeree" (as defined in the Offering Memorandum and Consent Solicitation Statement) and (iii) not located in Canada. The complete terms and conditions of the Exchange Offers and Consent Solicitations are described in the Offering Memorandum and Consent Solicitation Statement, a copy of which may be obtained by contacting Global Bondholder Services Corporation, the exchange agent and information agent in connection with the Exchange Offers and Consent Solicitations, at (866) 924-2200 (U.S. toll-free) or (212) 430-3774 (banks and brokers). The eligibility form is available electronically at: http://gbsc-usa.com/eligibility/marathon.
This press release does not constitute an offer to sell or purchase, or a solicitation of an offer to sell or purchase, or the solicitation of tenders or consents with respect to, any security. No offer, solicitation, purchase or sale will be made in any jurisdiction in which such an offer, solicitation, or sale would be unlawful. The Exchange Offers and Consent Solicitations are being made solely pursuant to the Offering Memorandum and Consent Solicitation Statement and only to such persons and in such jurisdictions as is permitted under applicable law.
The New MPC Notes have not been and will not be registered under the Securities Act of 1933 or any state securities laws. Therefore, the New MPC Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act of 1933 and any applicable state securities laws.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 22 states. MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Through subsidiaries, MPC owns the general partner of MPLX LP ("MPLX"), a midstream master limited partnership. Through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.7 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, natural gas liquids, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
About Andeavor
Andeavor is a premier, highly integrated marketing, logistics and refining company. Andeavor's retail-marketing system includes approximately 3,330 stations marketed under multiple well-known fuel brands, including ARCO®, SUPERAMERICA®, Shell®, Exxon™, Mobil™, Tesoro®, USA Gasoline™ and Giant®. It also has ownership in Andeavor Logistics LP (NYSE: ANDX) and its non-economic general partner. Andeavor operates 10 refineries with a combined capacity of approximately 1.2 million barrels per day in the mid-continent and western United States.
Forward-looking Statements
This communication contains forward-looking statements within the meaning of federal securities laws regarding MPC and Andeavor. These forward-looking statements relate to, among other things, the proposed transaction between MPC and Andeavor and include expectations, estimates and projections concerning the business and operations, strategic initiatives and value creation plans of MPC, MPLX, Andeavor and Andeavor Logistics ("ANDX"). 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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 companies' control and are difficult to predict. Factors that could cause MPC's or Andeavor's actual results to differ materially from those implied in the forward-looking statements include: the ability to complete the proposed transaction between MPC and Andeavor on anticipated terms and timetable, if at all; the ability to obtain approval by the shareholders of Andeavor and MPC related to the proposed transaction and the ability to satisfy various other conditions to the closing of the transaction contemplated by the merger agreement; the ability to obtain regulatory approvals of the proposed transaction on the proposed terms and schedule, and any conditions imposed on the combined entities in connection with consummation of the proposed transaction; the risk that the cost savings and any other synergies from the proposed transaction may not be fully realized or may take longer to realize than expected; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of Andeavor; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or earnings per share; the regional, national and worldwide availability and pricing of refined products, crude oil, natural gas, natural gas liquids and other feedstocks; consumer demand for refined products; our ability to manage disruptions in credit markets or changes to our credit rating; future levels of capital, environmental or 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; MPC's share repurchase authorizations, including the timing and amounts of any common stock repurchases; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan and to effect any share repurchases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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; 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 ANDX; and the factors set forth under the heading "Risk Factors" in MPC's and Andeavor's respective Annual Reports on Form 10-K for the year ended Dec. 31, 2017 and in the Form S-4 filed by MPC with the Securities and Exchange Commission and declared effective on August 3, 2018. We have based our forward-looking statements on our current expectations, estimates and projections about our 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 respective 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.
Additional Information and Where to Find It
In connection with the proposed transaction, MPC and Andeavor have filed relevant materials with the SEC, including MPC's registration statement on Form S-4 that includes a definitive joint proxy statement/prospectus and was declared effective by the SEC on August 3, 2018. INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final joint proxy statement/prospectus will be mailed to stockholders of MPC and Andeavor. Investors and security holders will be able to obtain the documents free of charge at the SEC's website, www.sec.gov, from MPC at its website, www.marathonpetroleum.com, or by contacting MPC's Investor Relations at 419.421.2414, or from Andeavor at its website, www.andeavor.com, or by contacting Andeavor's Investor Relations at 210.626.4757.
Participants in the Solicitation Regarding the Proposed Acquisition
MPC and Andeavor and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed Acquisition. Information concerning MPC's participants is set forth in the proxy statement, filed March 15, 2018, for MPC's 2018 annual meeting of stockholders as filed with the SEC on Schedule 14A. Information concerning Andeavor's participants is set forth in the proxy statement, filed March 15, 2018, for Andeavor's 2018 annual meeting of stockholders as filed with the SEC on Schedule 14A. Additional information regarding the interests of such participants in the solicitation of proxies in respect of the proposed transaction are included in the registration statement and joint proxy statement/prospectus and other relevant materials filed with the SEC when they become available.
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SOURCE Marathon Petroleum Corporation
Article Date
8/29/20188/22/2018 - Marathon Petroleum Corp. to present at Barclays 2018 CEO Energy-Power Conference Sept. 5
Marathon Petroleum Corp. to present at Barclays 2018 CEO Energy-Power Conference Sept. 5
Source: PR Newswire
FINDLAY, Ohio, Aug. 22, 2018 /PRNewswire/ -- Gary R. Heminger, chairman and chief executive officer of Marathon Petroleum Corp. (NYSE: MPC), will deliver the lunch keynote presentation to investors and industry analysts at the Barclays 2018 CEO Energy-Power Conference in New York City on Wednesday, Sept. 5.
Heminger's address is scheduled to begin at 11:45 a.m. EDT. The live webcast and archived presentation can be viewed on MPC's Investor Relations website http://ir.marathonpetroleum.com. The archived webcast and presentation support materials will be available for 14 days following the presentation.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 22 states. MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.7 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
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SOURCE Marathon Petroleum Corporation
Article Date
8/22/2018Marathon Petroleum Corp. and Andeavor announce filing of definitive proxy statement
Source: PR Newswire
FINDLAY, Ohio and SAN ANTONIO, Aug. 3, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) and Andeavor (NYSE: ANDV) today filed a joint definitive proxy statement and prospectus with the U.S. Securities and Exchange Commission regarding the pending merger pursuant to which MPC has agreed to acquire all of Andeavor's outstanding shares.
A special meeting of Andeavor stockholders has been set for Monday, Sept. 24, 2018, at 9 a.m. Central Time at the JW Marriott San Antonio, 23808 Resort Parkway, San Antonio, Texas 78261, to approve the previously announced Agreement and Plan of Merger, dated April 30, 2018, by and among Andeavor, MPC and certain wholly owned subsidiaries of MPC, and other matters related to the merger.
A special meeting of MPC stockholders has been set for Monday, Sept. 24, 2018, at 10 a.m. Eastern Time at MPC's offices at 539 South Main Street, Findlay, Ohio 45840, to approve the issuance of MPC common stock in connection with the merger and other matters related to the merger, as well as a proposal to increase the number of authorized shares of MPC common stock and a proposal to increase the maximum number of directors permitted to serve on the MPC board of directors.
Subject to approval of the Andeavor and MPC stockholders and other customary closing conditions, the parties expect to close the transaction on Oct. 1, 2018.
MPC and Andeavor each urge their stockholders to submit their proxies as promptly as possible, either by telephone, via the internet or by marking, signing and dating the applicable proxy card that will be provided to MPC and Andeavor stockholders along with the joint proxy statement and prospectus. The joint proxy statement and prospectus for the special meetings will be mailed to MPC and Andeavor stockholders on or about Aug. 6, 2018.
All holders of record of MPC and/or Andeavor common stock as of the close of business on Aug. 1, 2018, will be entitled to receive notice of their applicable special meeting and to vote their respective common stock, either in person or by proxy, at their respective special meeting.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 22 states. MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.7 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
About Andeavor
Andeavor is a premier, highly integrated marketing, logistics and refining company. Andeavor's retail-marketing system includes more than 3,200 stores marketed under multiple well-known fuel brands, including ARCO®, SUPERAMERICA®, Shell®, Exxon®, Mobil®, Tesoro®, USA Gasoline(TM) and Giant®. It also has ownership in Andeavor Logistics LP and its non-economic general partner. Andeavor operates 10 refineries with a combined capacity of approximately 1.2 million barrels per day in the mid-continent and western United States.
Forward Looking Statements
This communication contains forward-looking statements within the meaning of federal securities laws regarding Marathon Petroleum Corporation ("MPC") and Andeavor ("ANDV"). These forward-looking statements relate to, among other things, the proposed transaction between MPC and ANDV and include expectations, estimates and projections concerning the business and operations, strategic initiatives and value creation plans of MPC, MPLX LP ("MPLX"), ANDV and Andeavor Logistics ("ANDX"). 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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 companies' control and are difficult to predict. Factors that could cause MPC's or ANDV's actual results to differ materially from those implied in the forward-looking statements include: the ability to complete the proposed transaction between MPC and ANDV on anticipated terms and timetable; the ability to obtain approval by the shareholders of ANDV and MPC related to the proposed transaction and the ability to satisfy various other conditions to the closing of the transaction contemplated by the merger agreement; the ability to obtain regulatory approvals of the proposed transaction on the proposed terms and schedule, and any conditions imposed on the combined entities in connection with consummation of the proposed transaction; the risk that the cost savings and any other synergies from the proposed transaction may not be fully realized or may take longer to realize than expected; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of ANDV; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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; our ability to manage disruptions in credit markets or changes to our credit rating; future levels of capital, environmental or 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; MPC's share repurchase authorizations, including the timing and amounts of any common stock repurchases; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan and to effect any share repurchases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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; 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 ANDX; and the factors set forth under the heading "Risk Factors" in MPC's and ANDV's respective Annual Reports on Form 10-K for the year ended Dec. 31, 2017 and in the Form S-4 filed by MPC, filed with Securities and Exchange Commission (SEC). We have based our forward-looking statements on our current expectations, estimates and projections about our 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 respective 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.
Additional Information and Where to Find It
In connection with the proposed transaction, MPC and ANDV have filed relevant materials with the SEC, including MPC's registration statement on Form S-4 that includes a definitive joint proxy statement/prospectus and was declared effective by the SEC on August 3, 2018. INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final joint proxy statement/prospectus will be mailed to stockholders of MPC and ANDV. Investors and security holders will be able to obtain the documents free of charge at the SEC's website, www.sec.gov, from MPC at its website, www.marathonpetroleum.com, or by contacting MPC's Investor Relations at 419-421-2414, or from ANDV at its website, www.andeavor.com, or by contacting ANDV's Investor Relations at 210-626-4757.
Participants in Solicitation
MPC and ANDV and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information concerning MPC's participants is set forth in the proxy statement, filed March 15, 2018, for MPC's 2018 annual meeting of stockholders as filed with the SEC on Schedule 14A. Information concerning ANDV's participants is set forth in the proxy statement, filed March 15, 2018, for ANDV's 2018 annual meeting of stockholders as filed with the SEC on Schedule 14A. Additional information regarding the interests of such participants in the solicitation of proxies in respect of the proposed transaction will be included in the registration statement and joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.
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SOURCE Marathon Petroleum Corporation
Article Date
8/3/20187/25/2018 - Marathon Petroleum Corp. announces dividend
Marathon Petroleum Corp. announces dividend
Source: PR Newswire
FINDLAY, Ohio, July 25, 2018 /PRNewswire/ -- The Marathon Petroleum Corp. (NYSE: MPC) board of directors declared a dividend of $0.46 per share on common stock. The dividend is payable Sept. 10, 2018, to shareholders of record as of the close of business Aug. 16, 2018.
On July 26, MPC will provide an update on its 2018 second-quarter results through an earnings release, to be followed by a conference call scheduled for 9 a.m. EDT that day. Interested parties may listen to the conference call by dialing 1-888-989-4720 (confirmation number 4852094) or by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2018 Second-Quarter Financial Results" link.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.4 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
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SOURCE Marathon Petroleum Corporation
Article Date
7/25/2018Marathon Petroleum Corp. announces post-combination executive leadership team
Source: PR Newswire
FINDLAY, Ohio, July 25, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) announced today the executive team that will lead the combined company upon the closing of the combination of MPC and Andeavor (NYSE: ANDV). The new team will include executives from both MPC and Andeavor, leading a premier U.S. refining, marketing and midstream company into the future.
As previously announced, Gary R. Heminger will continue to serve as MPC's Chairman and CEO. "This executive team represents unparalleled business acumen and a steadfast commitment to our core values," said Heminger. "Both MPC and Andeavor are successful companies with excellent track records, and these leaders will enable us to deliver on the full potential of this powerful combination."
The leadership team, consisting of seven executives from MPC and three from Andeavor, will include:
Gregory J. Goff, Executive Vice Chairman
Currently Chairman, President and CEO of Andeavor, Mr. Goff will have responsibility for MPC's information technology, commercial and business development, strategy and corporate affairs functions.
Donald C. Templin, President of Refining, Marketing and Supply
Currently President of MPC, Mr. Templin will have responsibility for MPC's refining, crude and feedstock supply, product distribution, marketing, environment and safety, and supply chain functions.
Anthony R. Kenney, President of Speedway LLC
Currently President of Speedway LLC, Mr. Kenney will have responsibility for all company-owned and -operated convenience stores.
Michael J. Hennigan, President of MPLX LP (NYSE: MPLX)
Mr. Hennigan currently serves as President of MPLX.
Timothy T. Griffith, Senior Vice President and Chief Financial Officer
Currently MPC Senior Vice President and Chief Financial Officer, Mr. Griffith will have responsibility for MPC's controller, audit, tax, treasurer, and budget and analysis functions.
Suzanne Gagle, General Counsel
Ms. Gagle currently serves as MPC General Counsel.
Fiona C. Laird, Chief Human Resources Officer
Ms. Laird currently serves as Andeavor's Chief Human Resources Officer.
David R. Sauber, Senior Vice President of Labor Relations, Operations, Health and Administrative Services
Mr. Sauber is currently Senior Vice President of Human Resources, Health and Administrative Services for MPC. In his new position, he will report to Fiona C. Laird, Chief Human Resources Officer.
Kristina A. Kazarian, Vice President of Investor Relations
Ms. Kazarian currently serves as MPC Vice President of Investor Relations.
Don J. Sorensen, President of Andeavor Logistics LP (NYSE: ANDX)
Mr. Sorensen currently serves as Senior Vice President of ANDX.
MPC expects to close the transaction in the second half of 2018, subject to regulatory and other customary closing conditions.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 22 states. MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.7 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
This communication 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, the proposed transaction between MPC and Andeavor ("ANDV") and include expectations, estimates and projections concerning the business and operations, strategic initiatives 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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: the ability to complete the proposed transaction between MPC and ANDV on anticipated terms and timetable; the ability to obtain approval by the shareholders of ANDV and MPC related to the proposed transaction and the ability to satisfy various other conditions to the closing of the transaction contemplated by the merger agreement; the ability to obtain regulatory approvals of the proposed transaction on the proposed terms and schedule, and any conditions imposed on the combined entity in connection with consummation of the proposed transaction; the risk that the cost savings and any other synergies from the proposed transaction may not be fully realized or may take longer to realize than expected; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of ANDV; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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; our ability to manage disruptions in credit markets or changes to our credit rating; future levels of capital, environmental or 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; MPC's share repurchase authorizations, including the timing and amounts of any common stock repurchases; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan and to effect any share repurchases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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; 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, 2017, and in the Form S-4 filed by MPC, filed with Securities and Exchange Commission (SEC). We have based our forward-looking statements on our current expectations, estimates and projections about our 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 respective 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.
Additional Information and Where to Find It
In connection with the proposed transaction, MPC filed an amendment to the registration statement on Form S-4 with the SEC on July 20, 2018 that includes a preliminary proxy statement of MPC and ANDV. INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PRELIMINARY JOINT PROXY STATEMENT/PROSPECTUS AND, WHEN AVAILABLE, THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS THAT WILL BE PART OF THE REGISTRATION STATEMENT BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final joint proxy statement/prospectus will be mailed to stockholders of MPC and ANDV. Investors and security holders will be able to obtain the documents free of charge at the SEC's website, www.sec.gov, from MPC at its website, www.marathonpetroleum.com, or by contacting MPC's Investor Relations at 419.421.2414, or from ANDV at its website, www.andeavor.com, or by contacting ANDV's Investor Relations at 210.626.4757.
Participants in Solicitation
MPC and ANDV and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information concerning MPC's participants is set forth in the proxy statement, filed March 15, 2018, for MPC's 2018 annual meeting of stockholders as filed with the SEC on Schedule 14A. Information concerning ANDV's participants is set forth in the proxy statement, filed March 15, 2018, for ANDV's 2018 annual meeting of stockholders as filed with the SEC on Schedule 14A. Additional information regarding the interests of such participants in the solicitation of proxies in respect of the proposed transaction will be included in the registration statement and joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.
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SOURCE Marathon Petroleum Corp.
Article Date
7/25/2018Marathon Petroleum Corp. senior vice president Thomas M. Kelley to retire
Source: PR Newswire
FINDLAY, Ohio, July 13, 2018 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC) today announced the retirement of Thomas M. Kelley, senior vice president, Marketing, effective Oct. 1, 2018.
"Tom's dedication, insight and business acumen have been tremendous assets throughout his 37-year career," said MPC Chairman and Chief Executive Officer Gary R. Heminger. "He has played a particularly influential leadership role in growing our marketing organization, and his impact on MPC will be recognized long after he retires. We are thankful for his dedication and service and wish him and his family all the best in his well-earned retirement."
Kelley joined MPC as a marketing associate in 1981 and has held several positions of increasing responsibility in the Marathon Brand and Wholesale Marketing organizations throughout his career. In 1990, Kelley was named district sales manager, marketing. He was named manager, Wholesale Marketing, in conjunction with the formation of Marathon Ashland Petroleum in 1998 and, two years later, he was appointed manager, Brand Marketing. In 2008, he assumed responsibilities as director, Crude Supply and Logistics and in 2010, was named senior vice president, Marketing.
Kelley is a member of the American Petroleum Institute, where he serves on the marketing subcommittee. For the past two years, he also served as chair of Toledo Classic, Inc., which organizes and operates the Marathon Classic, an LPGA tour event.
He graduated with a Bachelor of Science degree in marketing from Indiana State University in 1981. He attended the University of Pennsylvania Wharton School Advanced Management Program in 2002 and the Oxford Institute for Energy Studies in 2008.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.4 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
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SOURCE Marathon Petroleum Corporation
Article Date
7/13/2018MPLX LP to announce 2018 second-quarter financial results July 26
Source: PR Newswire
FINDLAY, Ohio, July 6, 2018 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will host a conference call Thursday, July 26, 2018, at 11 a.m. EDT to discuss 2018 second-quarter financial results, which will be released earlier that day, and to provide an update on partnership operations.
MPLX participants will be Gary R. Heminger, chairman and chief executive officer; Michael J. Hennigan, president; Pamela K.M. Beall, executive vice president and chief financial officer; and other senior executives. The call will be hosted by Kristina A. Kazarian, vice president of Investor Relations.
Interested parties may listen to the conference call by dialing (888) 606-5719 (confirmation number 6033306) or by visiting MPLX's website at http://www.mplx.com and clicking on the "2018 Second-Quarter Financial Results" link in the "News & Headlines" section. Financial information, including the earnings release and other investor-related material, also will be available online. Replays of the conference call will be available on the partnership's website through Thursday, Aug. 9.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; the transportation, storage and distribution of crude oil and refined petroleum products; and the refining logistics and fuels distributions services through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.4 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity.
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SOURCE MPLX LP
Article Date
7/6/2018Marathon Petroleum Corp. to announce 2018 second-quarter financial results July 26
Source: PR Newswire
FINDLAY, Ohio, July 6, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) will host a conference call Thursday, July 26, 2018, at 9 a.m. EDT to discuss 2018 second-quarter financial results, which will be released earlier that day, and to provide an update on company operations.
Participants will be Gary R. Heminger, chairman and chief executive officer; Don Templin, president; Tim Griffith, senior vice president and chief financial officer; Michael J. Hennigan, president of the general partner of MPLX LP (NYSE: MPLX), the master limited partnership sponsored by MPC; and other senior executives. The call will be hosted by Kristina A. Kazarian, vice president of Investor Relations.
Interested parties may listen to the conference call by dialing (888) 989-4720 (confirmation number 4852094) or by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2018 Second-Quarter Financial Results" link. Financial information, including the earnings release and other investor-related material, also will be available online. Replays of the conference call will be available on the company's website through Thursday, Aug. 9.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.4 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
View original content with multimedia:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-to-announce-2018-second-quarter-financial-results-july-26-300676808.html
SOURCE Marathon Petroleum Corporation
Article Date
7/6/2018Marathon Petroleum Corp. and Andeavor announce expiration of HSR Act waiting period
Source: PR Newswire
FINDLAY, Ohio and SAN ANTONIO, July 3, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) and Andeavor (NYSE: ANDV) today announced that the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 has expired in connection with the proposed transaction whereby MPC would acquire all of Andeavor's outstanding shares.
The parties have also received the necessary regulatory clearance by the Canadian Commissioner of Competition pursuant to the Competition Act (Canada).
Together, these matters satisfy certain conditions for the closing of the proposed merger.
The transaction is still expected to close in the second half of 2018, and remains subject to customary closing conditions, including approval by Andeavor shareholders of the proposed merger, approval by MPC shareholders of the new MPC shares to be issued in connection with the transaction, and the receipt of other required regulatory approvals.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.4 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
About Andeavor
Andeavor is a premier, highly integrated marketing, logistics and refining company. Andeavor's retail-marketing system includes more than 3,200 stores marketed under multiple well-known fuel brands, including ARCO®, SUPERAMERICA®, Shell®, Exxon®, Mobil®, Tesoro®, USA Gasoline(TM) and Giant®. It also has ownership in Andeavor Logistics LP and its non-economic general partner. Andeavor operates 10 refineries with a combined capacity of approximately 1.2 million barrels per day in the mid-continent and western United States.
Forward Looking Statements
This communication contains forward-looking statements within the meaning of federal securities laws regarding Marathon Petroleum Corporation ("MPC") and Andeavor ("ANDV"). These forward-looking statements relate to, among other things, the proposed transaction between MPC and ANDV and include expectations, estimates and projections concerning the business and operations, strategic initiatives and value creation plans of MPC, MPLX LP ("MPLX"), ANDV and Andeavor Logistics ("ANDX"). 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may," "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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 companies' control and are difficult to predict. Factors that could cause MPC's or ANDV's actual results to differ materially from those implied in the forward-looking statements include: the ability to complete the proposed transaction between MPC and ANDV on anticipated terms and timetable; the ability to obtain approval by the shareholders of ANDV and MPC related to the proposed transaction and the ability to satisfy various other conditions to the closing of the transaction contemplated by the merger agreement; the ability to obtain governmental approvals of the proposed transaction on the proposed terms and schedule, and any conditions imposed on the combined entities in connection with consummation of the proposed transaction; the risk that the cost savings and any other synergies from the proposed transaction may not be fully realized or may take longer to realize than expected; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of ANDV; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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; our ability to manage disruptions in credit markets or changes to our credit rating; future levels of capital, environmental or 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; MPC's share repurchase authorizations, including the timing and amounts of any common stock repurchases; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan and to effect any share repurchases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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; 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 ANDX; and the factors set forth under the heading "Risk Factors" in MPC's and ANDV's respective Annual Reports on Form 10-K for the year ended Dec. 31, 2017 and in the Form S-4 filed by MPC, filed with Securities and Exchange Commission (SEC). We have based our forward-looking statements on our current expectations, estimates and projections about our 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 respective 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.
Additional Information and Where to Find It
In connection with the proposed transaction, MPC filed a registration statement on Form S-4 with the SEC on May 29, 2018 and includes a preliminary proxy statement of MPC and ANDV. INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PRELIMINARY JOINT PROXY STATEMENT/PROSPECTUS AND, WHEN AVAILABLE, THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS THAT WILL BE PART OF THE REGISTRATION STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final joint proxy statement/prospectus will be mailed to stockholders of MPC and ANDV. Investors and security holders will be able to obtain the documents free of charge at the SEC's website, www.sec.gov, from MPC at its website, www.marathonpetroleum.com, or by contacting MPC's Investor Relations at 419-421-2414, or from ANDV at its website, www.andeavor.com, or by contacting ANDV's Investor Relations at 210-626-4757.
Participants in Solicitation
MPC and ANDV and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information concerning MPC's participants is set forth in the proxy statement, filed March 15, 2018, for MPC's 2018 annual meeting of stockholders as filed with the SEC on Schedule 14A. Information concerning ANDV's participants is set forth in the proxy statement, filed March 15, 2018, for ANDV's 2018 annual meeting of stockholders as filed with the SEC on Schedule 14A. Additional information regarding the interests of such participants in the solicitation of proxies in respect of the proposed transaction will be included in the registration statement and joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-and-andeavor-announce-expiration-of-hsr-act-waiting-period-300675816.html
SOURCE Marathon Petroleum Corporation
Article Date
7/3/2018MPLX LP reports record first-quarter 2018 financial results
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
FINDLAY, Ohio, April 30, 2018 /PRNewswire/ --
MPLX LP (NYSE: MPLX) today reported record first-quarter 2018 net income attributable to MPLX of $421 million compared with $150 million in the first quarter of 2017.
MPLX also reported record adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $760 million and record income from operations of $557 million. Results were driven by strong contributions from the underlying base business as well as the Feb. 1 dropdown of refining logistics assets and fuels distribution services from sponsor Marathon Petroleum Corp. (NYSE: MPC).
The partnership ended the quarter with strong distribution coverage of 1.29 times and affirmed its 2018 distribution growth guidance of 10 percent. Debt-to-pro forma adjusted EBITDA was 3.8 times for the quarter. Consistent with its strategy to maximize unitholder returns and execute a self-funding model, the partnership did not issue public equity during the first quarter.
"Our record financial results reflect MPLX's significant transformation into one of the largest diversified master limited partnerships in the energy sector," said Gary R. Heminger, chairman and chief executive officer. "The dropdowns of the past year have nearly doubled the partnership's earnings base, and the elimination of incentive distribution rights improves the partnership's cost of capital. Combined with our existing business and planned organic growth, the partnership is extraordinarily well-positioned to deliver long-term sustainable distribution growth for our investors."
Gathering and Processing (G&P) reported segment operating income of $350 million for the quarter and segment adjusted EBITDA of $323 million, up $41 million and $42 million on a year-over-year basis, respectively. The G&P segment continues to build upon its strong footprint in the Marcellus, Utica, Permian and STACK shale plays. In the Northeast, the partnership added capacity to support producer needs. The Sherwood 9, 200-million-cubic-feet-per-day gas processing plant was commissioned during the quarter and is expected to ramp up in the second quarter. The partnership also added 200 million cubic feet per day of processing capacity at its highly utilized Houston, Pennsylvania, complex to support increased demand. MPLX expects to further strengthen its position as the largest processor and fractionator in the Northeast by adding approximately 800 million cubic feet per day of incremental processing capacity and 100,000 barrels per day of additional fractionation capacity during the second half of 2018, expanding its earnings base.
Continuing to expand on its Permian growth strategy, MPLX commissioned operations of the 200-million-cubic-feet-per-day Argo plant, doubling the partnership's gas processing capacity in the Permian basin. Construction of the 75-million-cubic-feet-per-day Omega gas processing plant in the STACK shale play in Oklahoma is on schedule and expected to be completed by mid-2018. These new facilities provide an important addition to the partnership's expanding footprint in these regions.
Logistics and Storage (L&S) reported segment operating income of $424 million for the quarter and segment adjusted EBITDA of $437 million, up $268 million and $295 million on a year-over-year basis, respectively. During the quarter, the L&S segment significantly expanded its earnings base with the Feb. 1 acquisition of refining logistics assets and fuels distribution services from MPC. These assets and services are projected to generate annual EBITDA of $1 billion, providing additional high-quality fee-based revenue streams to the partnership.
MPLX also continued to execute its organic growth plan for the L&S segment. The partnership commenced operations of the Robinson butane cavern in late March and expanded its marine fleet by two boats and 13 barges, with further growth planned later this year. The expansions of the Ozark and Wood River-to-Patoka pipeline systems, which deliver Cushing, Oklahoma-sourced crude to Patoka, Illinois, continue to be targeted for completion by mid-2018. These projects are expected to create additional fee-based revenue for the partnership while providing logistics solutions and crude optionality to MPC and other market participants.
"We are enthusiastic about the future for MPLX and the value proposition for our unitholders," Heminger said. "The partnership is extraordinarily well-positioned with strong and growing operations in the most prolific and economic shale plays in the country and a diversified suite of logistics assets. With a strong balance sheet and an investment-grade credit profile, we believe MPLX is one of the most compelling investments in the midstream space."
Financial Highlights
|
Three Months Ended | |||||||
|
(In millions, except per unit and ratio data) |
2018 |
2017 |
|||||
|
Net income attributable to MPLX |
$ |
421 |
$ |
150 |
|||
|
Adjusted EBITDA attributable to MPLX(a) |
760 |
423 |
|||||
|
Net cash provided by operating activities |
450 |
377 |
|||||
|
Distributable cash flow ("DCF")(a) |
619 |
354 |
|||||
|
Distribution per common unit(b) |
0.6175 |
0.5400 |
|||||
|
Distribution coverage ratio(c) |
1.29x |
1.29x |
|||||
|
Growth capital expenditures(d) |
470 |
358 |
|||||
|
(a) |
Non-GAAP measure calculated before the distribution to preferred units. See reconciliation below. |
|
(b) |
Distributions declared by the board of directors of MPLX's general partner. |
|
(c) |
Non-GAAP measure. See calculation below. |
|
(d) |
Excludes non-affiliated joint-venture (JV) members' share of capital expenditures. See capital expenditures table below. |
Operational Highlights
Financial Position and Liquidity
As of March 31, MPLX had $2 million in cash, approximately $2.2 billion available through its bank revolving credit facility expiring in July 2022, and $500 million available through its credit facility with MPC. In February, the partnership issued $5.5 billion in unsecured senior notes with a weighted average coupon of approximately 4.4 percent. MPLX used a significant portion of the net proceeds from this offering to repay the $4.1 billion term loan made on Feb. 1 associated with the dropdown transactions. The remaining proceeds were used to repay the outstanding borrowings on the bank revolving credit facility and the credit facility with MPC, as well as for general partnership purposes. The partnership has since increased availability through its credit facility with MPC to $1 billion. The increased borrowing capacity provides additional financing flexibility to MPLX.
The partnership's $2.7 billion of available liquidity at the end of the first quarter and its access to the capital markets should provide it with sufficient flexibility to meet its day-to-day operational needs and continue investing in organic growth opportunities. The partnership's debt-to-pro forma adjusted EBITDA ratio was 3.8 times at March 31, 2018. MPLX remains committed to maintaining an investment-grade credit profile.
Segment Results
|
(In millions) |
Three Months Ended | ||||||
|
Segment operating income attributable to MPLX LP (unaudited) |
2018 |
2017 |
|||||
|
Logistics and Storage(a) |
$ |
424 |
$ |
156 |
|||
|
Gathering and Processing(a) |
350 |
309 |
|||||
|
Segment adjusted EBITDA attributable to MPLX LP (unaudited) |
|||||||
|
Logistics and Storage(b) |
437 |
142 |
|||||
|
Gathering and Processing(b) |
323 |
281 |
|||||
|
(a) |
See reconciliation below for details. |
|
(b) |
Non-GAAP measure. See reconciliation below for details. |
L&S segment operating income and segment adjusted EBITDA increased for the first quarter of 2018 compared with the same period in 2017. The increase was primarily due to the acquisition of the MPLX Terminals, Hardin Street Transportation, Woodhaven Cavern and Ozark Pipeline businesses on March 1, 2017 (which have a full quarter of results in 2018) as well as the acquisition of the refining logistics assets and fuels distribution services on Feb. 1, 2018.
G&P segment operating income and segment adjusted EBITDA increased for the first quarter of 2018 compared with the same period in 2017. The increase was primarily due to increased gathered, processed and fractionated volumes.
See reconciliations below for detail on items not allocable to, or controllable by, any individual segment, which are therefore excluded when evaluating segment performance.
Conference Call
At 11 a.m. EDT today, MPLX will hold a conference call and webcast to discuss the reported results and provide an update on operations. Interested parties may listen to the conference call by dialing 1-888-606-5719 (confirmation number 6033306) or by visiting MPLX's website at http://www.mplx.com and clicking on the "2018 First-Quarter Financial Results" link in the "News & Headlines" section. Replays of the conference call will be available on MPLX's website through Tuesday, May 15. Investor-related material will also be available online prior to the conference call and webcast at http://ir.mplx.com.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; the transportation, storage and distribution of crude oil and refined petroleum products; and the refining logistics and fuels distributions services through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.4 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity.
Non-GAAP references
In addition to our financial information presented in accordance with U.S. generally accepted accounting principles (GAAP), management utilizes additional non-GAAP measures to facilitate comparisons of past performance and future periods. This press release and supporting schedules include the non-GAAP measures adjusted EBITDA (including segment adjusted EBITDA), distributable cash flow (DCF) and distribution coverage ratio. The amount of adjusted EBITDA and DCF generated is considered by the board of directors of our general partner in approving the Partnership's cash distribution. Adjusted EBITDA and DCF should not be considered separately from or as a substitute for net income, income from operations, or cash flow as reflected in our financial statements. The GAAP measures most directly comparable to adjusted EBITDA and DCF are net income and net cash provided by operating activities. We define Adjusted EBITDA as net income adjusted for (i) depreciation and amortization; (ii) (benefit) provision for income taxes; (iii) amortization of deferred financing costs; (iv) non-cash equity-based compensation; (v) impairment expense; (vi) net interest and other financial costs; (vii) (income) loss from equity method investments; (viii) distributions from unconsolidated subsidiaries; (ix) distributions of cash received from equity method investments to MPC; (x) unrealized derivative losses; (xi) other adjustments to equity method investment distributions; and (xii) acquisition costs. In general, we define DCF as adjusted EBITDA adjusted for (i) deferred revenue impacts; (ii) net interest and other financial costs; (iii) maintenance capital expenditures; (iv) equity method investment capital expenditures paid out; and (v) other non-cash items.
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, we record changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, we reverse the previously recorded unrealized gain or loss and record the realized gain or loss of the contract.
Adjusted EBITDA is a financial performance measure used by management, industry analysts, investors, lenders, and rating agencies to assess the financial performance and operating results of our ongoing business operations. Additionally, we believe adjusted EBITDA provides useful information to investors for trending, analyzing and benchmarking our operating results from period to period as compared to other companies that may have different financing and capital structures.
DCF is a financial performance measure used by management as a key component in the determination of cash distributions paid to unitholders. We believe DCF is an important financial measure for unitholders as an indicator of cash return on investment and to evaluate whether the partnership is generating sufficient cash flow to support quarterly distributions. In addition, DCF is commonly used by the investment community because the market value of publicly traded partnerships is based, in part, on DCF and cash distributions paid to unitholders.
Distribution coverage ratio is a financial performance measure used by management to reflect the relationship between the partnership's financial operating performance and cash distribution capability. We define the distribution coverage ratio as the ratio of DCF attributable to GP and LP unitholders to total GP and LP distribution declared.
Forward-looking statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP ("MPLX") and Marathon Petroleum Corporation ("MPC"). These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the business and operations of MPLX and MPC, including strategic initiatives and our value creation plans. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "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 companies' control and are difficult to predict. Factors that could cause MPLX's actual results to differ materially from those implied in the forward-looking statements include: negative capital market conditions, including an increase of the current yield on common units, adversely affecting MPLX's ability to meet its distribution growth guidance; our ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein and other proposed transactions; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of MPLX's capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and access to debt on commercially reasonable terms, and the ability to successfully execute its business plans and growth strategy; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of midstream infrastructure by competitors; disruptions due to equipment interruption or failure, including electrical shortages and power grid failures; the suspension, reduction or termination of MPC's obligations under MPLX's commercial agreements; modifications to earnings and distribution growth objectives; our ability to manage disruptions in credit markets or changes to our credit rating; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations and/or enforcement actions initiated thereunder; adverse results in litigation; changes to MPLX's capital budget; other risk factors inherent to MPLX's industry; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2017, filed with the Securities and Exchange Commission ("SEC"). Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include: risks associated with the proposed transaction between MPC and Andeavor, including, but not limited to, our ability to complete the proposed transaction on anticipated terms and timetable, the ability to obtain stockholder and government approval, the ability to satisfy various other conditions to the closing of the proposed transaction, the risk that the cost savings and any other synergies from the proposed transaction may not be fully realized or may take longer to realize than expected, disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers, and risks relating to any unforeseen liabilities of Andeavor; our ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein; our ability to manage disruptions in credit markets or changes to our credit rating; adverse changes in laws including with respect to tax and regulatory matters; changes to the expected construction costs and timing of projects; continued/further volatility in and/or degradation of market and industry conditions; the availability and pricing of crude oil and other feedstocks; slower growth in domestic and Canadian crude supply; the effects of the lifting of the U.S. crude oil export ban; completion of pipeline capacity to areas outside the U.S. Midwest; consumer demand for refined products; transportation logistics; the reliability of processing units and other equipment; MPC's ability to successfully implement growth opportunities; the impact of adverse market conditions affecting MPC's midstream business; modifications to MPLX earnings and distribution growth objectives, and other risks described above with respect to MPLX; 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; adverse results in litigation; changes to MPC's capital budget; other risk factors inherent to MPC's industry; 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, 2017, filed with the SEC. In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here, in MPLX's Form 10-K or in MPC's Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPLX's Form 10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office. Copies of MPC's Form 10-K are available on the SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office.
|
Condensed Results of Operations (unaudited) |
Three Months Ended | ||||||
|
(In millions, except per unit data) |
2018 |
2017 |
|||||
|
Revenues and other income: |
|||||||
|
Operating revenue |
$ |
712 |
$ |
532 |
|||
|
Operating revenue - related parties |
620 |
324 |
|||||
|
Income from equity method investments |
61 |
5 |
|||||
|
Other income |
27 |
25 |
|||||
|
Total revenues and other income |
1,420 |
886 |
|||||
|
Costs and expenses: |
|||||||
|
Operating expenses |
422 |
256 |
|||||
|
Operating expenses - related parties |
178 |
107 |
|||||
|
Depreciation and amortization |
176 |
187 |
|||||
|
General and administrative expenses |
69 |
58 |
|||||
|
Other taxes |
18 |
13 |
|||||
|
Total costs and expenses |
863 |
621 |
|||||
|
Income from operations |
557 |
265 |
|||||
|
Interest and other financial costs |
130 |
78 |
|||||
|
Income before income taxes |
427 |
187 |
|||||
|
Provision for income taxes |
4 |
— |
|||||
|
Net income |
423 |
187 |
|||||
|
Less: Net income attributable to noncontrolling interests |
2 |
1 |
|||||
|
Less: Net income attributable to Predecessor(a) |
— |
36 |
|||||
|
Net income attributable to MPLX LP |
421 |
150 |
|||||
|
Less: Preferred unit distributions |
16 |
16 |
|||||
|
Less: General partner's interest in net income attributable to MPLX LP |
— |
62 |
|||||
|
Limited partners' interest in net income attributable to MPLX LP |
$ |
405 |
$ |
72 |
|||
|
Per Unit Data |
|||||||
|
Net income (loss) attributable to MPLX LP per limited partner unit: |
|||||||
|
Common - basic |
$ |
0.61 |
$ |
0.20 |
|||
|
Common - diluted |
0.61 |
0.19 |
|||||
|
Weighted average limited partner units outstanding: |
|||||||
|
Common units – basic |
661 |
362 |
|||||
|
Common units – diluted |
661 |
367 |
|||||
|
(a) |
The pipeline, storage and terminals businesses acquired on March 1, 2017 ("Predecessor"). |
|
Select Financial Statistics (unaudited) |
|||||||
|
Three Months Ended | |||||||
|
(In millions, except ratio data) |
2018 |
2017 |
|||||
|
Distribution declared: |
|||||||
|
Common units (LP) - public |
$ |
179 |
$ |
149 |
|||
|
Common units - MPC(a) |
288 |
49 |
|||||
|
GP units - MPC |
— |
5 |
|||||
|
Incentive distribution rights - MPC |
— |
60 |
|||||
|
Total GP and LP distribution declared |
467 |
263 |
|||||
|
Redeemable preferred units(b) |
16 |
16 |
|||||
|
Total distribution declared |
$ |
483 |
$ |
279 |
|||
|
Distribution coverage ratio(c) |
1.29x |
1.29x | |||||
|
Cash Flow Data |
|||||||
|
Net cash flow provided by (used in): |
|||||||
|
Operating activities |
$ |
450 |
$ |
377 |
|||
|
Investing activities |
(490) |
(955) |
|||||
|
Financing activities |
37 |
607 |
|||||
|
Other Financial Data |
|||||||
|
Adjusted EBITDA attributable to MPLX LP(d) |
$ |
760 |
$ |
423 |
|||
|
DCF attributable to GP and LP unitholders(d) |
603 |
338 |
|||||
|
(a) |
MPC agreed to waive $23.7 million in common unit distributions associated with the units received in connection with the Feb. 1 dropdown. |
|
(b) |
The preferred units are considered redeemable securities due to the existence of redemption provisions upon a deemed liquidation event, which is outside our control. |
|
(c) |
DCF attributable to GP and LP unitholders divided by total GP and LP distribution declared. |
|
(d) |
Non-GAAP measure. See reconciliation below. |
|
Select Balance Sheet Data (unaudited) |
|||||||
|
(In millions, except ratio data) |
March 31 |
Dec. 31, |
|||||
|
Cash and cash equivalents |
$ |
2 |
$ |
5 |
|||
|
Total assets |
21,006 |
19,500 |
|||||
|
Total debt(a) |
11,862 |
7,332 |
|||||
|
Redeemable preferred units |
1,000 |
1,000 |
|||||
|
Total equity |
6,978 |
9,973 |
|||||
|
Consolidated total debt to LTM pro forma adjusted EBITDA(b) |
3.8x |
3.6x |
|||||
|
Partnership units outstanding: |
|||||||
|
GP units |
— |
8 |
|||||
|
MPC-held common units |
505 |
118 |
|||||
|
Public common units |
289 |
289 |
|||||
|
(a) |
Total debt includes $0 million and $386 million of outstanding intercompany borrowings classified in current liabilities as of March 31, 2018, and Dec. 31, 2017, respectively. |
|
(b) |
Calculated using face value total debt and LTM pro forma adjusted EBITDA, which is pro forma for acquisitions. Face value total debt includes approximately $495 million and $416 million of unamortized discount and debt issuance costs as of March 31, 2018, and Dec. 31, 2017, respectively. |
|
Operating Statistics (unaudited) |
|||||||||||
|
Three Months Ended | |||||||||||
|
2018 |
2017 |
% | |||||||||
|
Logistics and Storage |
|||||||||||
|
Pipeline throughput (thousands of barrels per day) |
|||||||||||
|
Crude oil pipelines |
2,006 |
1,624 |
24 |
% | |||||||
|
Product pipelines |
1,056 |
951 |
11 |
% | |||||||
|
Total pipelines |
3,062 |
2,575 |
19 |
% | |||||||
|
Average tariff rates ($ per barrel) |
|||||||||||
|
Crude oil pipelines |
$ |
0.56 |
$ |
0.59 |
(5) |
% | |||||
|
Product pipelines |
0.76 |
0.76 |
0 |
% | |||||||
|
Total pipelines |
0.63 |
0.65 |
(3) |
% | |||||||
|
Terminal throughput (thousands of barrels per day) |
1,445 |
1,424 |
1 |
% | |||||||
|
Barges at period-end |
244 |
231 |
6 |
% | |||||||
|
Towboats at period-end |
20 |
18 |
11 |
% | |||||||
|
Gathering and Processing |
|||||||||||
|
Gathering throughput (mmcf/d)(a) |
|||||||||||
|
Marcellus Operations |
1,123 |
926 |
21 |
% | |||||||
|
Utica Operations |
1,570 |
914 |
72 |
% | |||||||
|
Southwest Operations |
1,478 |
1,344 |
10 |
% | |||||||
|
Total gathering throughput |
4,171 |
3,184 |
31 |
% | |||||||
|
Natural gas processed (mmcf/d)(a) |
|||||||||||
|
Marcellus Operations |
4,114 |
3,532 |
16 |
% | |||||||
|
Utica Operations |
936 |
1,068 |
(12) |
% | |||||||
|
Southwest Operations |
1,326 |
1,267 |
5 |
% | |||||||
|
Southern Appalachian Operations |
253 |
265 |
(5) |
% | |||||||
|
Total natural gas processed |
6,629 |
6,132 |
8 |
% | |||||||
|
C2 + NGLs fractionated (mbpd)(a) |
|||||||||||
|
Marcellus Operations |
352 |
291 |
21 |
% | |||||||
|
Utica Operations |
43 |
43 |
— |
% | |||||||
|
Southwest Operations |
16 |
19 |
(16) |
% | |||||||
|
Southern Appalachian Operations |
12 |
14 |
(14) |
% | |||||||
|
Total C2 + NGLs fractionated |
423 |
367 |
15 |
% | |||||||
|
(a) |
Includes amounts related to unconsolidated equity method investments on a 100 percent basis. |
|
Reconciliation of Segment Operating Income Attributable to MPLX LP to |
|||||||
|
Three Months Ended | |||||||
|
(In millions) |
2018 |
2017 |
|||||
|
L&S segment operating income attributable to MPLX LP |
$ |
424 |
$ |
156 |
|||
|
G&P segment operating income attributable to MPLX LP(a) |
350 |
309 |
|||||
|
Segment portion attributable to equity affiliates |
(53) |
(40) |
|||||
|
Segment portion attributable to Predecessor(b) |
— |
53 |
|||||
|
Income from equity method investments |
61 |
5 |
|||||
|
Other income - related parties |
13 |
11 |
|||||
|
Unrealized derivative gains(c) |
7 |
16 |
|||||
|
Depreciation and amortization |
(176) |
(187) |
|||||
|
General and administrative expenses |
(69) |
(58) |
|||||
|
Income from operations |
$ |
557 |
$ |
265 |
|||
|
(a) |
All Partnership-operated, non-wholly owned subsidiaries are treated as if they are consolidated. |
|
(b) |
The operating income of the Predecessor is excluded from segment operating income attributable to MPLX LP prior to the acquisition date. |
|
(c) |
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
|
Reconciliation of Segment Adjusted EBITDA to Net Income (unaudited) |
|||||||
|
Three Months Ended | |||||||
|
(In millions) |
2018 |
2017 |
|||||
|
L&S segment adjusted EBITDA attributable to MPLX LP |
$ |
437 |
$ |
142 |
|||
|
G&P segment adjusted EBITDA attributable to MPLX LP |
323 |
281 |
|||||
|
Adjusted EBITDA attributable to MPLX LP |
760 |
423 |
|||||
|
Depreciation and amortization |
(176) |
(187) |
|||||
|
Provision for income taxes |
(4) |
— |
|||||
|
Amortization of deferred financing costs |
(16) |
(12) |
|||||
|
Non-cash equity-based compensation |
(4) |
(3) |
|||||
|
Net interest and other financial costs |
(114) |
(66) |
|||||
|
Income from equity method investments |
61 |
5 |
|||||
|
Distributions from unconsolidated subsidiaries |
(68) |
(33) |
|||||
|
Other adjustments to equity method investment distributions |
(22) |
— |
|||||
|
Unrealized derivative (losses) gains(a) |
7 |
16 |
|||||
|
Acquisition costs |
(3) |
(4) |
|||||
|
Noncontrolling interest |
2 |
1 |
|||||
|
Adjusted EBITDA attributable to Predecessor(b) |
— |
47 |
|||||
|
Net income (loss) |
$ |
423 |
$ |
187 |
|||
|
(a) |
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
|
(b) |
The adjusted EBITDA adjustments related to Predecessor are excluded from adjusted EBITDA attributable to MPLX LP prior to the acquisition date. |
|
Reconciliation of Adjusted EBITDA Attributable to MPLX LP and DCF |
|||||||
|
Three Months Ended | |||||||
|
(In millions) |
2018 |
2017 |
|||||
|
Net income |
$ |
423 |
$ |
187 |
|||
|
Depreciation and amortization |
176 |
187 |
|||||
|
Provision for income taxes |
4 |
— |
|||||
|
Amortization of deferred financing costs |
16 |
12 |
|||||
|
Non-cash equity-based compensation |
4 |
3 |
|||||
|
Net interest and other financial costs |
114 |
66 |
|||||
|
Income from equity method investments |
(61) |
(5) |
|||||
|
Distributions from unconsolidated subsidiaries |
68 |
33 |
|||||
|
Other adjustments to equity method investment distributions |
22 |
— |
|||||
|
Unrealized derivative losses (gains)(a) |
(7) |
(16) |
|||||
|
Acquisition costs |
3 |
4 |
|||||
|
Adjusted EBITDA |
762 |
471 |
|||||
|
Adjusted EBITDA attributable to noncontrolling interests |
(2) |
(1) |
|||||
|
Adjusted EBITDA attributable to Predecessor(b) |
— |
(47) |
|||||
|
Adjusted EBITDA attributable to MPLX LP |
760 |
423 |
|||||
|
Deferred revenue impacts |
9 |
8 |
|||||
|
Net interest and other financial costs |
(114) |
(66) |
|||||
|
Maintenance capital expenditures |
(25) |
(12) |
|||||
|
Equity method investment capital expenditures paid out |
(11) |
(2) |
|||||
|
Other |
— |
1 |
|||||
|
Portion of DCF adjustments attributable to Predecessor(b) |
— |
2 |
|||||
|
DCF attributable to MPLX LP |
619 |
354 |
|||||
|
Preferred unit distributions |
(16) |
(16) |
|||||
|
DCF attributable to GP and LP unitholders |
$ |
603 |
$ |
338 |
|||
|
(a) |
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
|
(b) |
The adjusted EBITDA and DCF adjustments related to Predecessor are excluded from adjusted EBITDA attributable to MPLX LP and DCF prior to the acquisition date. |
|
Reconciliation of Adjusted EBITDA Attributable to MPLX LP and DCF |
|||||||
|
Three Months Ended | |||||||
|
(In millions) |
2018 |
2017 |
|||||
|
Net cash provided by operating activities |
$ |
450 |
$ |
377 |
|||
|
Changes in working capital items |
178 |
44 |
|||||
|
All other, net |
(3) |
(9) |
|||||
|
Non-cash equity-based compensation |
4 |
3 |
|||||
|
Net gain on disposal of assets |
— |
(1) |
|||||
|
Net interest and other financial costs |
114 |
66 |
|||||
|
Asset retirement expenditures |
1 |
1 |
|||||
|
Unrealized derivative losses (gains)(a) |
(7) |
(16) |
|||||
|
Acquisition costs |
3 |
4 |
|||||
|
Other adjustments to equity method investment distributions |
22 |
— |
|||||
|
Other |
— |
2 |
|||||
|
Adjusted EBITDA |
762 |
471 |
|||||
|
Adjusted EBITDA attributable to noncontrolling interests |
(2) |
(1) |
|||||
|
Adjusted EBITDA attributable to Predecessor(b) |
— |
(47) |
|||||
|
Adjusted EBITDA attributable to MPLX LP |
760 |
423 |
|||||
|
Deferred revenue impacts |
9 |
8 |
|||||
|
Net interest and other financial costs |
(114) |
(66) |
|||||
|
Maintenance capital expenditures |
(25) |
(12) |
|||||
|
Equity method investment capital expenditures paid out |
(11) |
(2) |
|||||
|
Other |
— |
1 |
|||||
|
Portion of DCF adjustments attributable to Predecessor(b) |
— |
2 |
|||||
|
DCF attributable to MPLX LP |
619 |
354 |
|||||
|
Preferred unit distributions |
(16) |
(16) |
|||||
|
DCF attributable to GP and LP unitholders |
$ |
603 |
$ |
338 |
|||
|
(a) |
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
|
(b) |
The adjusted EBITDA and DCF adjustments related to Predecessor are excluded from adjusted EBITDA attributable to MPLX LP and DCF prior to the acquisition date. |
|
Capital Expenditures (unaudited) |
|||||||
|
Three Months Ended | |||||||
|
(In millions) |
2018 |
2017 |
|||||
|
Capital Expenditures(a): |
|||||||
|
Maintenance |
$ |
25 |
$ |
12 |
|||
|
Growth |
425 |
271 |
|||||
|
Total capital expenditures |
450 |
283 |
|||||
|
Less: Increase in capital accruals |
(6) |
2 |
|||||
|
Asset retirement expenditures |
1 |
1 |
|||||
|
Additions to property, plant and equipment |
455 |
280 |
|||||
|
Capital expenditures of unconsolidated subsidiaries(b) |
54 |
124 |
|||||
|
Total gross capital expenditures |
509 |
404 |
|||||
|
Less: Joint venture partner contributions |
14 |
34 |
|||||
|
Total capital expenditures, net |
495 |
370 |
|||||
|
Less: Maintenance capital |
25 |
12 |
|||||
|
Total growth capital expenditures |
$ |
470 |
$ |
358 |
|||
|
(a) |
Includes capital expenditures of the Predecessor for all periods presented. |
|
(b) |
Capital expenditures includes amounts related to unconsolidated, partnership operated subsidiaries. |
View original content with multimedia:http://www.prnewswire.com/news-releases/mplx-lp-reports-record-first-quarter-2018-financial-results-300638814.html
SOURCE MPLX LP
Article Date
4/30/2018Marathon Petroleum Corp. reports first-quarter 2018 results
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
FINDLAY, Ohio, April 30, 2018 /PRNewswire/ --
Marathon Petroleum Corp. (NYSE: MPC) today reported 2018 first-quarter earnings of $37 million, or $0.08 per diluted share. This compares with $30 million, or $0.06 per diluted share, in the first quarter of 2017.
"So far in 2018, we have accomplished many significant milestones," said Gary R. Heminger, chairman and chief executive officer. "We successfully completed a major turnaround at our Galveston Bay refinery, organically grew our midstream footprint in the Northeast and Permian, announced a definitive agreement to acquire store locations that will expand Speedway into key growth markets, and returned over $1.5 billion of capital to our shareholders.
"As we continue to focus on operational excellence and maximizing our shareholders' long-term returns, we also are pleased to announce that the U.S. Environmental Protection Agency has named MPC a 2018 Energy Star Partner of the Year for Energy Management, recognizing our leadership in energy efficiency. We are proud to manufacture, transport and market cost-efficient energy that makes millions of people's lives better every day, never losing sight of our responsibility to operate safely and efficiently."
MPC's first-quarter 2018 income from operations was $440 million, an increase of $149 million over the first quarter of 2017. The year-over-year increase in first-quarter income from operations was partially offset by higher net interest and other financial costs, as well as the increased amount of net income allocated to noncontrolling interests in MPLX LP (NYSE: MPLX) resulting from the Feb. 1 dropdown and general partner/IDR exchange transactions. In addition, the effective tax rate for the quarter reflects deferred tax benefits of approximately $20 million, primarily resulting from effects of these strategic transactions.
The Refining and Marketing (R&M) segment reported a loss from operations of $133 million, compared with a loss from operations of $70 million in the first quarter of 2017, largely as a result of the February dropdown. This quarter, activities associated with these businesses reduced R&M segment income from operations by approximately $181 million and increased Midstream segment income from operations by a like amount. Excluding these effects, R&M results improved, driven by higher throughputs and lower direct operating costs from decreased turnaround activity, partially offset by lower product-price realizations.
MPC remains focused on realizing the substantial advantages of its flexible and integrated refining system and enhancing margins through further investments and process improvements. During the quarter, the Garyville refinery completed the final phase of its diesel maximization project. This investment further enhances MPC's ability to benefit from the adoption of the International Maritime Organization's (IMO) low-sulfur-fuels requirements, scheduled to take effect in 2020, by increasing ultra-low-sulfur-distillate production by 5,000 barrels per day.
The Midstream segment, which largely reflects MPLX, reported record income from operations of $567 million, up from $309 million in the first quarter last year, driven by a strong underlying base business and the February dropdown. The partnership continues to execute on its significant organic growth plan, commissioning three new processing plants during the quarter, further expanding the partnership's earnings base.
Speedway contributed $95 million in segment income from operations, compared with $135 million in the same quarter last year. Results were affected by increased operating expenses, accelerated depreciation arising from technology investments, and adverse weather. In April, consistent with its growth strategy, Speedway announced its agreement to purchase 78 store locations in Syracuse, Rochester and Buffalo, New York. These stores will enhance the existing network and expand Speedway's brand presence in key growth markets.
During the quarter, MPC returned $1.55 billion to MPC shareholders, including $1.33 billion in share repurchases funded primarily by after-tax cash proceeds from the February dropdown.
"Looking forward, we are very optimistic about the opportunities for our business," Heminger said. "The solid demand backdrop, favorable crude differentials, and changing dynamics of the low-sulfur-fuel market all set the stage to create meaningful benefits across MPC's integrated and diversified business model.
"Additionally, this morning we were excited to announce that MPC entered into a definitive merger agreement to acquire Andeavor (NYSE: ANDV). This transaction combines two strong, complementary companies to create a leading U.S. refining, marketing, and midstream company, building a platform that is well-positioned for long-term growth and shareholder value creation."
MPC and Andeavor will hold a conference call and webcast today at 8:30 a.m. to discuss the transaction and related materials can be found on our website.
Segment Results
Income from operations was $440 million in the first quarter of 2018, compared with $291 million in the first quarter of 2017.
|
Three Months Ended | |||||||
|
(In millions) |
2018 |
2017 | |||||
|
Income (Loss) from Operations by Segment |
|||||||
|
Refining & Marketing |
$ |
(133) |
$ |
(70) |
|||
|
Speedway |
95 |
135 |
|||||
|
Midstream |
567 |
309 |
|||||
|
Items not allocated to segments: |
|||||||
|
Corporate and other unallocated items(a) |
(88) |
(83) |
|||||
|
Pension settlement expenses |
(1) |
— |
|||||
|
Income from operations(a) |
$ |
440 |
$ |
291 |
|||
|
(a) |
We adopted Accounting Standards Update 2017-07, Retirement Benefits Presentation of Pension and Postretirement Cost, as of Jan. 1, 2018, and applied the standard retrospectively. As a result, we reclassified prior period amounts from Selling, general and administrative expenses to Net interest and other financial costs to conform to current period presentation. |
Refining & Marketing
Refining & Marketing (R&M) segment loss from operations was $133 million in the first quarter of 2018, compared with a loss from operations of $70 million in the same quarter of 2017. The decrease in segment results was primarily due to the Feb. 1, 2018, dropdown of refining logistics assets and fuels distribution services to MPLX. These businesses were reported in the Midstream segment prospectively from Feb. 1, resulting in a net reduction of $181 million to R&M segment results and a net increase to Midstream segment results of the same amount. Prior period segment results do not reflect these new businesses.
The change in segment results also reflects the benefits of increased refinery throughputs, lower direct operating costs and the retroactive enactment of a biodiesel blending tax credit for 2017, offset by lower product price realizations as compared with spot market reference prices. Refinery throughputs totaled 1.9 million barrels per day in first quarter 2018, an increase of almost 12 percent from the first quarter of 2017. The U.S. Gulf Coast (USGC) and Chicago LLS blended 6-3-2-1 crack spread was $7.70 per barrel in the first quarter of 2018 as compared to $7.72 per barrel in the first quarter of 2017.
Speedway
Speedway segment income from operations was $95 million in the first quarter of 2018, compared with $135 million in the first quarter of 2017. Speedway's light product margin was 15.61 cents per gallon in the first quarter of 2018 compared with 15.66 cents per gallon in the first quarter of 2017. The decrease in segment results was primarily due to higher operating expense, largely related to labor costs, and accelerated depreciation. The accelerated depreciation resulted from Speedway's upgrade of dispenser technology to provide marketing earnings enhancements and strengthen customer bank card security in advance of the required timeframe. In addition, during the quarter, multiple storms in the Northeast and Midwest markets resulted in reduced traffic at Speedway stores.
Midstream
Midstream segment income from operations, which primarily reflects the results of MPLX, was $567 million in the first quarter of 2018, compared with $309 million for the first quarter of 2017. The increase was primarily due to the Feb. 1 dropdown of refining logistics assets and fuels distribution services to MPLX. Additionally, the Midstream segment benefited from higher gathered, processed and fractionated volumes resulting from new processing facilities.
Items Not Allocated to Segments
Corporate and other unallocated expenses were $88 million in the first quarter of 2018, compared with $83 million in the first quarter of 2017.
Strong Financial Position and Liquidity
On March 31, 2018, the company had $4.7 billion of cash and cash equivalents, excluding MPLX's cash and cash equivalents of $2 million; $2.5 billion available under a revolving credit agreement; $1 billion available under a 364-day bank revolving credit facility; and full availability under its $750 million trade receivables securitization facility. During the quarter, the company completed the redemption of all of the $600 million outstanding aggregate principal amount of its 2.700% senior notes due in December 2018. The company's liquidity should provide it with sufficient flexibility to meet its day-to-day operational needs and continue its balanced approach to investing in the business and returning capital to shareholders while maintaining an investment-grade credit profile.
Conference Call
MPC's previously announced first-quarter 2018 earnings conference call and webcast, which had been scheduled for Tuesday, May 1, has been cancelled. MPC and Andeavor will hold a conference call and webcast at 8:30 a.m. EDT today to discuss the transaction. Interested parties may listen to the conference call by dialing (888) 989-4720 (confirmation number 4852094) or by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "Marathon Petroleum Corp. and Andeavor Strategic Combination" link. Replays of the conference call will be available on both companies' websites through Tuesday, May 15. MPC management will be available to answer questions about the earnings release at the end of today's conference call. Financial information, including the earnings release and other investor-related material, also will be available online prior to the conference call and webcast at http://ir.marathonpetroleum.com in the Quarterly Investor Packet and Earnings Capsule.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.4 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
References to Earnings
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, the proposed transaction between MPC and Andeavor ("ANDV") and include expectations, estimates and projections concerning the business and operations, strategic initiatives 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may", "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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: the ability to complete the proposed transaction between MPC and ANDV on anticipated terms and timetable; the ability to obtain approval by the shareholders of ANDV and MPC related to the proposed transaction and the ability to satisfy various other conditions to the closing of the transaction contemplated by the merger agreement; the ability to obtain governmental approvals of the proposed transaction on the proposed terms and schedule, and any conditions imposed on the combined entity in connection with consummation of the proposed transaction; the risk that the cost savings and any other synergies from the proposed transaction may not be fully realized or may take longer to realize than expected; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of ANDV; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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; our ability to manage disruptions in credit markets or changes to our credit rating; future levels of capital, environmental or 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; MPC's share repurchase authorizations, including the timing and amounts of any common stock repurchases; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan and to effect any share repurchases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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; 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 and ANDV's respective Annual Reports on Form 10-K for the year ended Dec. 31, 2017, filed with Securities and Exchange Commission (SEC). We have based our forward-looking statements on our current expectations, estimates and projections about our 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 respective 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.
Additional Information and Where to Find It
In connection with the proposed transaction, a registration statement on Form S-4 will be filed with the SEC. INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE JOINT PROXY STATEMENT/PROSPECTUS THAT WILL BE PART OF THE REGISTRATION STATEMENT, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final joint proxy statement/prospectus will be mailed to stockholders of Marathon Petroleum Corporation ("MPC") and Andeavor ("ANDV"). Investors and security holders will be able to obtain the documents free of charge at the SEC's website, www.sec.gov, from MPC at its website, www.marathonpetroleum.com, or by contacting MPC's Investor Relations at (419) 421-2414, or from ANDV at its website, www.andeavor.com, or by contacting ANDV's Investor Relations at (210) 626-4757.
Participants in Solicitation
MPC and ANDV and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information concerning MPC's participants is set forth in the proxy statement, filed March 15, 2018, for MPC's 2018 annual meeting of stockholders as filed with the SEC on Schedule 14A. Information concerning ANDV's participants is set forth in the proxy statement, filed March 15, 2018, for ANDV's 2018 annual meeting of stockholders as filed with the SEC on Schedule 14A. Additional information regarding the interests of such participants in the solicitation of proxies in respect of the proposed transaction will be included in the registration statement and joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.
|
Consolidated Statements of Income (Unaudited) | |||||||
|
Three Months Ended | |||||||
|
(In millions, except per-share data) |
2018 |
2017 | |||||
|
Revenues and other income: |
|||||||
|
Sales and other operating revenues(a) |
$ |
18,694 |
$ |
16,134 |
|||
|
Sales to related parties |
172 |
154 |
|||||
|
Income from equity method investments |
86 |
57 |
|||||
|
Net gain on disposal of assets |
2 |
5 |
|||||
|
Other income |
30 |
43 |
|||||
|
Total revenues and other income |
18,984 |
16,393 |
|||||
|
Costs and expenses: |
|||||||
|
Cost of revenues (excludes items below)(a) |
17,370 |
14,946 |
|||||
|
Purchases from related parties |
141 |
122 |
|||||
|
Depreciation and amortization |
528 |
536 |
|||||
|
Selling, general and administrative expenses(b) |
402 |
390 |
|||||
|
Other taxes |
103 |
108 |
|||||
|
Total costs and expenses |
18,544 |
16,102 |
|||||
|
Income from operations(b) |
440 |
291 |
|||||
|
Net interest and other financial costs(b) |
183 |
149 |
|||||
|
Income before income taxes |
257 |
142 |
|||||
|
Provision for income taxes |
22 |
41 |
|||||
|
Net income |
235 |
101 |
|||||
|
Less net income attributable to: |
|||||||
|
Redeemable noncontrolling interest |
16 |
16 |
|||||
|
Noncontrolling interests |
182 |
55 |
|||||
|
Net income attributable to MPC |
$ |
37 |
$ |
30 |
|||
|
Per-share data |
|||||||
|
Basic: |
|||||||
|
Net income attributable to MPC per share |
$ |
0.08 |
$ |
0.06 |
|||
|
Weighted average shares: |
476 |
525 |
|||||
|
Diluted: |
|||||||
|
Net income attributable to MPC per share |
$ |
0.08 |
$ |
0.06 |
|||
|
Weighted average shares: |
480 |
530 |
|||||
|
Dividends paid |
$ |
0.46 |
$ |
0.36 |
|||
|
(a) |
We adopted Accounting Standards Update 2014-09, Revenue - Revenue from contracts with customers, as of Jan. 1, 2018, and elected to report certain taxes on a net basis. We applied the standard using the modified retrospective method and, therefore, comparative information continues to reflect certain taxes on a gross basis. |
|
(b) |
We adopted Accounting Standards Update 2017-07, Retirement Benefits Presentation of Pension and Postretirement Cost, as of Jan. 1, 2018, and applied the standard retrospectively. As a result, we reclassified prior period amounts from Selling, general and administrative expenses to Net interest and other financial costs to conform to current period presentation. |
|
Supplemental Statistics (Unaudited) | |||||||
|
Three Months Ended | |||||||
|
(In millions) |
2018 |
2017 | |||||
|
Income (Loss) from Operations by Segment |
|||||||
|
Refining & Marketing(a) |
$ |
(133) |
$ |
(70) |
|||
|
Speedway |
95 |
135 |
|||||
|
Midstream(a) |
567 |
309 |
|||||
|
Items not allocated to segments: |
|||||||
|
Corporate and other unallocated items(b) |
(88) |
(83) |
|||||
|
Pension settlement expenses |
(1) |
— |
|||||
|
Income from operations(b) |
440 |
291 |
|||||
|
Net interest and other financial costs(b) |
183 |
149 |
|||||
|
Income before income taxes |
257 |
142 |
|||||
|
Provision for income taxes |
22 |
41 |
|||||
|
Net income |
235 |
101 |
|||||
|
Less net income attributable to: |
|||||||
|
Redeemable noncontrolling interest |
16 |
16 |
|||||
|
Noncontrolling interests |
182 |
55 |
|||||
|
Net income attributable to MPC |
$ |
37 |
$ |
30 |
|||
|
Capital Expenditures and Investments |
|||||||
|
Refining & Marketing |
$ |
191 |
$ |
192 |
|||
|
Speedway |
39 |
35 |
|||||
|
Midstream(c) |
482 |
1,070 |
|||||
|
Corporate and Other(d) |
36 |
28 |
|||||
|
Total |
$ |
748 |
$ |
1,325 |
|||
|
(a) |
On Feb. 1, 2018, we contributed certain refining logistics assets and fuels distribution services to MPLX. The results of these new businesses are reported in the Midstream segment prospectively from Feb. 1, resulting in a net increase of $181 million to Midstream segment results and a net decrease to Refining & Marketing segment results of the same amount in the first quarter of 2018. No effect was given to prior periods as these entities were not considered businesses prior to Feb. 1, 2018. |
|
(b) |
We adopted Accounting Standards Update 2017-07, Retirement Benefits Presentation of Pension and Postretirement Cost, as of Jan. 1, 2018, and applied the standard retrospectively. As a result, we reclassified prior period amounts from Selling, general and administrative expenses to Net interest and other financial costs to conform to current period presentation. |
|
(c) |
Includes $220 million for the acquisition of the Ozark pipeline and an investment of $500 million in MarEn Bakken related to the Bakken Pipeline system in the three months ended March 31, 2017. |
|
(d) |
Includes capitalized interest of $18 million and $12 million, respectively. |
|
Supplementary Statistics (Unaudited) (continued) |
Three Months Ended | ||||||
|
2018 |
2017 | ||||||
|
MPC Consolidated Refined Product Sales Volumes (thousands of barrels per day (mbpd)(a) |
2,275 |
2,085 |
|||||
|
Refining & Marketing (R&M) Operating Statistics |
|||||||
|
R&M refined product sales volume (mbpd)(b) |
2,261 |
2,070 |
|||||
|
R&M margin (dollars per barrel)(c) |
$ |
10.58 |
$ |
11.65 |
|||
|
Crude oil capacity utilization (percent)(d) |
93 |
83 |
|||||
|
Refinery throughputs (mbpd):(e) |
|||||||
|
Crude oil refined |
1,745 |
1,511 |
|||||
|
Other charge and blendstocks |
160 |
197 |
|||||
|
Total |
1,905 |
1,708 |
|||||
|
Sour crude oil throughput (percent) |
52 |
67 |
|||||
|
WTI-priced crude oil throughput (percent) |
26 |
15 |
|||||
|
Refined product yields (mbpd):(e) |
|||||||
|
Gasoline |
917 |
867 |
|||||
|
Distillates |
609 |
544 |
|||||
|
Propane |
31 |
28 |
|||||
|
Feedstocks and special products |
287 |
224 |
|||||
|
Heavy fuel oil |
34 |
29 |
|||||
|
Asphalt |
58 |
56 |
|||||
|
Total |
1,936 |
1,748 |
|||||
|
Refinery direct operating costs ($/barrel):(f) |
|||||||
|
Planned turnaround and major maintenance |
$ |
2.22 |
$ |
3.10 |
|||
|
Depreciation and amortization |
1.37 |
1.63 |
|||||
|
Other manufacturing(g) |
4.09 |
4.72 |
|||||
|
Total |
$ |
7.68 |
$ |
9.45 |
|||
|
R&M Operating Statistics by Region - Gulf Coast |
|||||||
|
Refinery throughputs (mbpd):(h) |
|||||||
|
Crude oil refined |
1,056 |
850 |
|||||
|
Other charge and blendstocks |
167 |
222 |
|||||
|
Total |
1,223 |
1,072 |
|||||
|
Sour crude oil throughput (percent) |
60 |
84 |
|||||
|
WTI-priced crude oil throughput (percent) |
13 |
4 |
|||||
|
Refined product yields (mbpd):(h) |
|||||||
|
Gasoline |
534 |
499 |
|||||
|
Distillates |
360 |
309 |
|||||
|
Propane |
19 |
21 |
|||||
|
Feedstocks and special products |
298 |
243 |
|||||
|
Heavy fuel oil |
23 |
18 |
|||||
|
Asphalt |
17 |
14 |
|||||
|
Total |
1,251 |
1,104 |
|||||
|
Refinery direct operating costs ($/barrel):(f) |
|||||||
|
Planned turnaround and major maintenance |
$ |
2.87 |
$ |
4.31 |
|||
|
Depreciation and amortization |
1.09 |
1.35 |
|||||
|
Other manufacturing(g) |
3.91 |
4.62 |
|||||
|
Total |
$ |
7.87 |
$ |
10.28 |
|||
|
Supplementary Statistics (Unaudited) (continued) |
Three Months Ended | ||||||
|
2018 |
2017 | ||||||
|
R&M Operating Statistics by Region - Midwest |
|||||||
|
Refinery throughputs (mbpd):(h) |
|||||||
|
Crude oil refined |
689 |
661 |
|||||
|
Other charge and blendstocks |
35 |
30 |
|||||
|
Total |
724 |
691 |
|||||
|
Sour crude oil throughput (percent) |
38 |
45 |
|||||
|
WTI-priced crude oil throughput (percent) |
47 |
29 |
|||||
|
Refined product yields (mbpd):(h) |
|||||||
|
Gasoline |
383 |
368 |
|||||
|
Distillates |
249 |
235 |
|||||
|
Propane |
12 |
8 |
|||||
|
Feedstocks and special products |
31 |
35 |
|||||
|
Heavy fuel oil |
11 |
11 |
|||||
|
Asphalt |
41 |
42 |
|||||
|
Total |
727 |
699 |
|||||
|
Refinery direct operating costs ($/barrel):(f) |
|||||||
|
Planned turnaround and major maintenance |
$ |
0.99 |
$ |
0.98 |
|||
|
Depreciation and amortization |
1.77 |
1.93 |
|||||
|
Other manufacturing(g) |
4.16 |
4.50 |
|||||
|
Total |
$ |
6.92 |
$ |
7.41 |
|||
|
Speedway Operating Statistics |
|||||||
|
Convenience stores at period-end |
2,742 |
2,731 |
|||||
|
Gasoline and distillate sales (millions of gallons) |
1,393 |
1,393 |
|||||
|
Gasoline and distillate margin (dollars per gallon)(i) |
$ |
0.1561 |
$ |
0.1566 |
|||
|
Merchandise sales (in millions) |
$ |
1,129 |
$ |
1,127 |
|||
|
Merchandise margin (in millions) |
$ |
319 |
$ |
320 |
|||
|
Merchandise margin percent |
28.3 |
% |
28.4 |
% | |||
|
Same store gasoline sales volume (period over period) |
(1.5) |
% |
(1.0) |
% | |||
|
Same store merchandise sales (period over period)(j) |
2.3 |
% |
2.1 |
% | |||
|
Midstream Operating Statistics |
|||||||
|
Crude oil and refined product pipeline throughputs (mbpd)(k) |
3,459 |
2,888 |
|||||
|
Terminal throughput (mbpd) |
1,445 |
1,424 |
|||||
|
Gathering system throughput (million cubic feet per day)(l) |
4,171 |
3,184 |
|||||
|
Natural gas processed (million cubic feet per day)(l) |
6,629 |
6,132 |
|||||
|
C2 (ethane) + NGLs fractionated (mbpd)(l) |
423 |
367 |
|||||
|
(a) |
Total average daily volumes of refined product sales to wholesale, branded and retail customers. |
|
(b) |
Includes intersegment sales. |
|
(c) |
Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs. |
|
(d) |
Based on calendar-day capacity, which is an annual average that includes down time for planned maintenance and other normal operating activities. |
|
(e) |
Excludes inter-refinery volumes of 42 mbpd and 55 mbpd for the first quarter of 2018 and 2017, respectively. |
|
(f) |
Per barrel of total refinery throughputs. Effective with the Feb. 1, 2018, dropdown, direct operating costs related to certain refining logistics assets are now reported in the Midstream segment. Comparative information has not been adjusted. |
|
(g) |
Includes utilities, labor, routine maintenance and other operating costs. |
|
(h) |
Includes inter-refinery transfer volumes. |
|
(i) |
The price paid by consumers less the cost of refined products, including transportation, consumer excise taxes and bank card processing fees, divided by gasoline and distillate sales volumes. |
|
(j) |
Excludes cigarettes. |
|
(k) |
Includes common-carrier pipelines and private pipelines owned or operated by MPLX, excluding equity method investments. |
|
(l) |
Includes amounts related to unconsolidated equity method investments on a 100% basis. |
|
Segment Earnings Before Interest, Taxes, Depreciation & Amortization (Segment EBITDA) (Unaudited) | |||||||
|
Three Months Ended | |||||||
|
(In millions) |
2018 |
2017 | |||||
|
Segment EBITDA(a) |
|||||||
|
Refining & Marketing(b) |
$ |
119 |
$ |
197 |
|||
|
Speedway |
174 |
199 |
|||||
|
Midstream(b) |
748 |
500 |
|||||
|
Total Segment EBITDA(a) |
1,041 |
896 |
|||||
|
Total segment depreciation & amortization |
(512) |
(522) |
|||||
|
Items not allocated to segments |
(89) |
(83) |
|||||
|
Income from operations |
440 |
291 |
|||||
|
Net interest and other financial costs |
183 |
149 |
|||||
|
Income before income taxes |
257 |
142 |
|||||
|
Income tax provision |
22 |
41 |
|||||
|
Net income |
235 |
101 |
|||||
|
Less net income attributable to: |
|||||||
|
Redeemable noncontrolling interest |
16 |
16 |
|||||
|
Noncontrolling interests |
182 |
55 |
|||||
|
Net income attributable to MPC |
$ |
37 |
$ |
30 |
|||
|
(a) |
Segment EBITDA represents segment earnings before interest and financing costs, interest income, income taxes and depreciation and amortization expense. Segment EBITDA is used by some investors and analysts to analyze and compare companies on the basis of operating performance. Segment EBITDA should not be considered as an alternative to 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 accounting principles generally accepted in the United States. Segment EBITDA may not be comparable to similarly titled measures used by other entities. |
|
(b) |
On Feb. 1, 2018, we contributed certain refining logistics assets and fuels distribution services to MPLX. The results of these new businesses are reported in the Midstream segment prospectively from Feb. 1, resulting in a net increase of $181 million to Midstream segment results and a net decrease to Refining & Marketing segment results of the same amount in the first quarter of 2018. No effect was given to prior periods as these entities were not considered businesses prior to Feb. 1, 2018. |
|
Select Financial Data (Unaudited) |
|||||||
|
(In millions) |
March 31 |
Dec. 31 | |||||
|
Cash and cash equivalents |
$ |
4,653 |
$ |
3,011 |
|||
|
MPLX debt |
11,862 |
6,946 |
|||||
|
Total consolidated debt |
17,258 |
12,946 |
|||||
|
Redeemable noncontrolling interest |
1,000 |
1,000 |
|||||
|
Equity |
18,863 |
20,828 |
|||||
|
Debt-to-total-capital ratio (percent) |
46 |
37 |
|||||
|
Shares outstanding |
467 |
486 |
|||||
|
Net cash provided by (used in) operations (quarter ended) |
$ |
(137) |
$ |
2,745 |
|||
|
Reconciliation of Refining & Marketing Margin to Refining & Marketing Income (Loss) from Operations | |||||||
|
Three Months Ended | |||||||
|
(In millions) |
2018 |
2017 | |||||
|
Refining & Marketing loss from operations |
$ |
(133) |
$ |
(70) |
|||
|
Plus (Less): |
|||||||
|
Refinery direct operating costs(a) |
1,081 |
1,202 |
|||||
|
Refinery depreciation and amortization |
236 |
251 |
|||||
|
Other: |
|||||||
|
Operating expenses(a)(b) |
722 |
456 |
|||||
|
Segment (income) expense, net(a) |
(108) |
(64) |
|||||
|
Depreciation and amortization |
16 |
16 |
|||||
|
Refining & Marketing margin(c) |
$ |
1,814 |
$ |
1,791 |
|||
|
(a) |
Excludes depreciation and amortization. |
|
(b) |
Includes fees paid to MPLX for various midstream services. |
|
(c) |
Refining & Marketing margin is defined as sales revenue less cost of refinery inputs and purchased products, excluding any LCM inventory market adjustment. We believe this non-GAAP financial measure is useful to investors and analysts to assess our ongoing financial performance because, when reconciled to its most comparable GAAP measure, it provides 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. This measure 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. |
|
Reconciliation of Speedway Total Margin to Speedway Income from Operations | |||||||
|
Three Months Ended | |||||||
|
(in millions) |
2018 |
2017 | |||||
|
Speedway income from operations |
$ |
95 |
$ |
135 |
|||
|
Plus (Less): |
|||||||
|
Operating, selling, general and administrative expenses |
384 |
366 |
|||||
|
Depreciation and amortization |
79 |
64 |
|||||
|
Income from equity method investments |
(14) |
(13) |
|||||
|
Net gain on disposal of assets |
— |
(4) |
|||||
|
Other income |
(1) |
(3) |
|||||
|
Speedway total margin |
$ |
543 |
$ |
545 |
|||
|
Speedway total margin:(a) |
|||||||
|
Gasoline and distillate margin |
$ |
217 |
$ |
218 |
|||
|
Merchandise margin |
319 |
320 |
|||||
|
Other margin |
7 |
7 |
|||||
|
Speedway total margin |
$ |
543 |
$ |
545 |
|||
|
(a) |
Speedway gasoline and distillate margin is defined as the price paid by consumers less the cost of refined products, including transportation, consumer excise taxes and bank card processing fees and excluding any LCM inventory market adjustment. Speedway merchandise margin is defined as the price paid by consumers less the cost of merchandise. We believe these non-GAAP financial measures are useful to investors and analysts to assess our ongoing financial performance because, when reconciled to the most comparable GAAP 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. |
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SOURCE Marathon Petroleum Corp.
Article Date
4/30/2018Marathon Petroleum Corp. and Andeavor Combination to Create Leading U.S. Refining, Marketing, and Midstream Company
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
FINDLAY, Ohio and SAN ANTONIO, April 30, 2018 /PRNewswire/ --
Marathon Petroleum Corp. (NYSE: MPC) and Andeavor (NYSE: ANDV) today announced that they have entered into a definitive merger agreement under which MPC will acquire all of ANDV's outstanding shares, representing a total equity value of $23.3 billion and total enterprise value of $35.6 billion, based on MPC's April 27, 2018, closing price of $81.43. ANDV shareholders will have the option to choose 1.87 shares of MPC stock, or $152.27 in cash subject to a proration mechanism that will result in 15 percent of ANDV's fully diluted shares receiving cash consideration. This represents a premium of 24.4 percent to ANDV's closing price on April 27, 2018. MPC and ANDV shareholders will own approximately 66 percent and 34 percent of the combined company, respectively. The transaction was unanimously approved by the board of directors of both companies and is expected to close in the second half of 2018, subject to regulatory and other customary closing conditions, including approvals from both MPC and ANDV shareholders. The headquarters will be located in Findlay, Ohio, and the combined business will maintain an office in San Antonio, Texas.
"This transaction combines two strong, complementary companies to create a leading U.S. refining, marketing, and midstream company, building a platform that is well-positioned for long-term growth and shareholder value creation," said Gary R. Heminger, MPC chairman and chief executive officer. "Each of our operating segments are strengthened through this transaction, as it geographically diversifies our refining portfolio into attractive markets, increases access to advantaged feedstocks, enhances our midstream footprint in the Permian basin, and creates a nationwide retail and marketing portfolio that will substantially improve efficiencies and enhance our ability to serve customers.
"Importantly, we expect this transaction will be meaningfully accretive for shareholders, generating approximately $1 billion of tangible annual run-rate synergies within the first three years and significantly enhancing our long-term cash flow generation profile," said Heminger. "Given the confidence in the robust cash flow expected to be generated by the combined business, our board also authorized an incremental $5 billion of share repurchases. As a combined company, we will continue our balanced approach to investing in the business and returning cash to our investors, while maintaining our commitment to an investment-grade credit profile."
At closing, Greg Goff, ANDV chairman and chief executive officer, will join MPC as executive vice chairman. As executive vice chairman and an executive of MPC following closing, Goff will provide leadership and be integrally involved in the strategy for the combined company. Goff, along with three other Andeavor directors, will also join the board of directors of Marathon Petroleum. "With significantly increased scale, a strong platform for our midstream businesses and a leading nationwide retail and marketing distribution portfolio, the combined company presents tremendous value enhancement and growth opportunities for all shareholders," said Goff. "This strategic combination provides our shareholders with a premium for their shares and the opportunity to benefit from substantial future value creation at MPC. As the largest refiner by capacity in the U.S., with a best-in-class operating capability and a strong capital structure, the combined company will be exceptionally well-positioned to deliver on its synergy and earnings targets. We look forward to working together to deliver on the full potential of this powerful combination."
Heminger and Goff added that MPC and ANDV are not only complementary from operational and financial standpoints, but also share similar core values. They said that both MPC and ANDV have been committed to safety, environmental stewardship, and community involvement. Together, the alignment on these values will enable the combined company to remain an excellent corporate citizen wherever it has the privilege to operate, they added.
1 Based on closing share/unit price of MPC/MPLX and ANDV/ANDX on April 27, 2018
2 Based on 2019 consensus
Merits of the Transaction:
Transaction Terms
Under the terms of the agreement, ANDV shareholders will have the option to elect 1.87 shares of MPC stock or $152.27 in cash per share subject to a proration mechanism that will result in 15 percent of ANDV's fully diluted shares receiving cash consideration. The stock portion of the consideration received by Andeavor's shareholders is expected to be tax-free.
Approvals and Timing
The transaction has been unanimously approved by the boards of directors of both companies. The transaction is expected to close in the second half of 2018 and is subject to customary closing conditions, including approval by ANDV shareholders of the merger, and approval by MPC shareholders of the new MPC shares issued in the transaction. It is also subject to approval pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR), and the receipt of other required regulatory approvals.
Investor Presentation, Conference Call, Webcast
The companies will issue an investor presentation today, providing additional detail on the announcement. The presentation will be available on both companies' websites; on MPC's website at http://www.marathonpetroleum.com by clicking on the "Events and Presentations" link in the "Investor Center" tab; on ANDV's website at http://www.andeavor.com by clicking on the "Events and Presentations" link in the "Investor" tab.
MPC and Andeavor will hold a conference call and webcast at 8:30 a.m. EDT today to discuss the transaction. Interested parties may listen to the conference call by dialing (888) 989-4720 (confirmation number 4852094) or by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "Marathon Petroleum Corp. and Andeavor Strategic Combination" link. Replays of the conference call will be available on both companies' websites through Tuesday, May 15.
MPC First-Quarter 2018 Earnings Announcement
MPC plans to issue its first quarter 2018 financial results today following this announcement. Management will be available to answer questions about the earnings release at the end of today's conference call. MPC's previously announced first-quarter 2018 earnings conference call and webcast, which had been scheduled for Tuesday, May 1, at 9 a.m. EDT, has been cancelled.
MPLX will host a conference call and webcast today at 11 a.m. EDT in lieu of the previously scheduled call for Tuesday, May 1 to discuss 2018 first-quarter financial results, which will be released prior to the call, and to provide an update on partnership operations.
Advisors
Barclays acted as financial advisor and Jones Day acted as legal advisor to MPC in connection with the transaction. Goldman, Sachs & Co. LLC acted as exclusive financial advisor and Sullivan & Cromwell LLP acted as legal advisor to Andeavor in connection with the transaction.
About Marathon Petroleum Corp.
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.4 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
About Andeavor
Andeavor is a premier, highly integrated marketing, logistics and refining company. Andeavor's retail-marketing system includes more than 3,200 stores marketed under multiple well-known fuel brands, including ARCO®, SUPERAMERICA®, Shell®, Exxon®, Mobil®, Tesoro®, USA Gasoline(TM) and Giant®. It also has ownership in Andeavor Logistics LP and its non-economic general partner. Andeavor operates 10 refineries with a combined capacity of approximately 1.2 million barrels per day in the mid-continent and western United States.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding Marathon Petroleum Corporation ("MPC") and Andeavor ("ANDV"). These forward-looking statements relate to, among other things, the proposed transaction between MPC and ANDV and include expectations, estimates and projections concerning the business and operations, strategic initiatives and value creation plans of MPC, MPLX LP ("MPLX"), ANDV and Andeavor Logistics ("ANDX"). 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," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "may", "objective," "opportunity," "outlook," "plan," "position," "potential," "predict," "project," "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 companies' control and are difficult to predict. Factors that could cause MPC's or ANDV's actual results to differ materially from those implied in the forward-looking statements include: the ability to complete the proposed transaction between MPC and ANDV on anticipated terms and timetable; the ability to obtain approval by the shareholders of ANDV and MPC related to the proposed transaction and the ability to satisfy various other conditions to the closing of the transaction contemplated by the merger agreement; the ability to obtain governmental approvals of the proposed transaction on the proposed terms and schedule, and any conditions imposed on the combined entities in connection with consummation of the proposed transaction; the risk that the cost savings and any other synergies from the proposed transaction may not be fully realized or may take longer to realize than expected; disruption from the proposed transaction making it more difficult to maintain relationships with customers, employees or suppliers; risks relating to any unforeseen liabilities of ANDV; future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or 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; our ability to manage disruptions in credit markets or changes to our credit rating; future levels of capital, environmental or 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; MPC's share repurchase authorizations, including the timing and amounts of any common stock repurchases; the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan and to effect any share repurchases, including within the expected timeframe; the effect of restructuring or reorganization of business components; the potential effects of judicial or other proceedings on our 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; 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 ANDX; and the factors set forth under the heading "Risk Factors" in MPC's and ANDV's respective Annual Reports on Form 10-K for the year ended Dec. 31, 2017, filed with Securities and Exchange Commission (SEC). We have based our forward-looking statements on our current expectations, estimates and projections about our 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 respective 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.
Additional Information and Where to Find It
In connection with the proposed transaction, a registration statement on Form S-4 will be filed with the SEC. INVESTORS AND SECURITY HOLDERS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE JOINT PROXY STATEMENT/PROSPECTUS THAT WILL BE PART OF THE REGISTRATION STATEMENT, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final joint proxy statement/prospectus will be mailed to stockholders of Marathon Petroleum Corporation ("MPC") and Andeavor ("ANDV"). Investors and security holders will be able to obtain the documents free of charge at the SEC's website, www.sec.gov, from MPC at its website, www.marathonpetroleum.com, or by contacting MPC's Investor Relations at (419) 421-2414, or from ANDV at its website, www.andeavor.com, or by contacting ANDV's Investor Relations at (210) 626-4757.
Participants in Solicitation
MPC and ANDV and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information concerning MPC's participants is set forth in the proxy statement, filed March 15, 2018, for MPC's 2018 annual meeting of stockholders as filed with the SEC on Schedule 14A. Information concerning ANDV's participants is set forth in the proxy statement, filed March 15, 2018, for ANDV's 2018 annual meeting of stockholders as filed with the SEC on Schedule 14A. Additional information regarding the interests of such participants in the solicitation of proxies in respect of the proposed transaction will be included in the registration statement and joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.
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SOURCE Marathon Petroleum Corporation
Article Date
4/30/20184/25/2018 - Marathon Petroleum Corp. announces dividend
Marathon Petroleum Corp. announces dividend
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
FINDLAY, Ohio, April 25, 2018 /PRNewswire/ -- The Marathon Petroleum Corp. (NYSE: MPC) board of directors declared a dividend of $0.46 per share on common stock. The dividend is payable June 11, 2018, to shareholders of record as of the close of business May 16, 2018.
On May 1, MPC will provide an update on its 2018 first-quarter results through an earnings release, to be followed by a conference call scheduled for 9 a.m. EDT that day. Interested parties may listen to the conference call by dialing 1-888-989-4720 (confirmation number 4852094) or by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2018 First-Quarter Financial Results" link.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.4 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
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SOURCE Marathon Petroleum Corporation
Article Date
4/25/2018Marathon Petroleum announces new partnerships with Southwest Airlines®, La Quinta Inns & Suites and the Arbor Day Foundation through Marathon's rewards program
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
FINDLAY, Ohio, April 23, 2018 /PRNewswire/ -- Marathon Petroleum Company LP (MPC) today announced that the Marathon brand is collaborating with Southwest Airlines, La Quinta Inns & Suites, the Arbor Day Foundation and Marathon's own My CentsOff™ fuel savings program to launch a unique rewards program for its brand network featuring these partners.
The new rewards program, titled "MakeItCount™," offers consumers the opportunity to earn points for their purchases of both fuel and featured non-fuel items at participating Marathon branded stations.
MakeItCount™ members will earn points directly in their choice of Southwest Airlines Rapid Rewards®, La Quinta Returns®, Sustain® tree planting program in partnership with the Arbor Day Foundation, or the My CentsOff™ fuel savings program. The MakeItCount™ program will also support achievement-based rewards, based on member purchase activity at participating Marathon branded stations, in the form of bonus partner points or fuel discounts.
To enroll, consumers may text "Join" to 40244, download the MakeItCount™ app, or go through the MakeItCount™ website (http://www.makeitcount.com), and then simply pick a rewards partner and start earning points. Program members can change their partner choice at any time. To make it as easy as possible, no program cards are needed; members just enter 11+ their registered phone number with every purchase.
"This rewards program and our partnerships create a unique loyalty offering that our customers have been anticipating and brings added value to the Marathon brand," states William D. McCleave, Marathon Brand director. "We believe MakeItCount™ offers consumers an ideal mix of choices, and as a result of the program structure, is differentiated from other major oil brand programs."
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.4 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
View original content:SOURCE Marathon Petroleum Corporation
Article Date
4/23/2018MPLX LP to announce 2018 first-quarter financial results May 1
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
FINDLAY, Ohio, April 12, 2018 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will host a conference call Tuesday, May 1, 2018, at 11 a.m. EDT to discuss 2018 first-quarter financial results, which will be released earlier that day, and to provide an update on partnership operations.
MPLX participants will be Gary R. Heminger, chairman and chief executive officer; Michael J. Hennigan, president; Pamela K.M. Beall, executive vice president and chief financial officer; and other senior executives. The call will be hosted by Kristina A. Kazarian, vice president of Investor Relations.
Interested parties may listen to the conference call by dialing (888) 606-5719 (confirmation number 6033306) or by visiting MPLX's website at http://www.mplx.com and clicking on the "2018 First-Quarter Financial Results" link in the "News & Headlines" section. Financial information, including the earnings release and other investor-related material, also will be available online. Replays of the conference call will be available on the partnership's website through Tuesday, May 15.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation (MPC) to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the transportation, storage and distribution of crude oil and refined petroleum products through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. In addition, MPLX provides fuels distribution services to MPC and owns refining logistics assets consisting of tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping.
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SOURCE MPLX LP
Article Date
4/12/2018Marathon Petroleum Corp. to announce 2018 first-quarter financial results May 1
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
FINDLAY, Ohio, April 12, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) will host a conference call Tuesday, May 1, 2018, at 9 a.m. EDT to discuss 2018 first-quarter financial results, which will be released earlier that day, and to provide an update on company operations.
Participants will be Gary R. Heminger, chairman and chief executive officer; Don Templin, president; Tim Griffith, senior vice president and chief financial officer; Michael J. Hennigan, president of the general partner of MPLX LP (NYSE: MPLX), the master limited partnership sponsored by MPC; and other senior executives. The call will be hosted by Kristina A. Kazarian, vice president of Investor Relations.
Interested parties may listen to the conference call by dialing (888) 989-4720 (confirmation number 4852094) or by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2018 First-Quarter Financial Results" link. Replays of the conference call will be available on the company's website through Tuesday, May 15. Financial information, including the earnings release and other investor-related material, also will be available online.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
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SOURCE Marathon Petroleum Corporation
Article Date
4/12/2018Marathon Petroleum Corp. earns 2018 ENERGY STAR® Partner of the Year Award
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
FINDLAY, Ohio, April 10, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) has received the 2018 ENERGY STAR® Partner of the Year Award for its outstanding efforts to increase energy efficiency throughout its business, particularly in its petroleum refining system. MPC's accomplishments will be recognized by the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Energy at a ceremony in Washington, D.C., on April 20, 2018.
MPC has participated in the ENERGY STAR program, which recognizes both energy efficiency and environmental performance, since the EPA began awarding ENERGY STAR recognitions to refineries in 2006. "We are proud of our Partner of the Year recognition," said MPC Chairman and Chief Executive Officer Gary Heminger. "Our refineries have earned more of the EPA's ENERGY STAR awards than all other refining companies combined, and we apply this focus on energy efficiency and environmental performance throughout our operations."
MPC has developed an internal Focus On Energy program to optimize energy utilization and lower operating costs across all its refineries. MPC's fleet of transport trucks is recognized through the EPA's Smartway Transport Partnership as a top-20 percent performer in carbon efficiency, and the company's inland marine fleet implemented an efficiency project that resulted in a 15 percent reduction in fuel use in 2017.
Heminger said the business case for energy efficiency is strong, and the company will continue to seek opportunities to optimize its operations. "Our accomplishments in energy efficiency and emissions reductions are part of a years-long commitment," he said, "and because it's integral to how we conduct our business, we never consider this work complete."
"The 2018 ENERGY STAR Partners of the Year have demonstrated real leadership, showing how American families and businesses can save energy, save money, and reduce air emissions," said Bill Wehrum, EPA Assistant Administrator for Air and Radiation.
In 2016 alone, ENERGY STAR certified products, homes, buildings, and plants helped Americans save over $30 billion in energy costs and approximately 400 billion kilowatt-hours of electricity and while achieving broad emissions reductions.
For a complete list of 2018 winners and more information about ENERGY STAR's awards program, visit http://www.energystar.gov/awardwinners.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
About ENERGY STAR
ENERGY STAR® is the simple choice for energy efficiency. For over 25 years, EPA's ENERGY STAR program has been America's resource for saving energy and protecting the environment. Join the millions already making a difference at http://www.energystar.gov. More background information about ENERGY STAR can be found at http://www.energystar.gov/about and http://www.energystar.gov/numbers. Thousands of industrial, commercial, utility, state, and local organizations — including more than 40 percent of the Fortune 500® — rely on their partnership with the U.S. Environmental Protection Agency (EPA) to deliver cost-saving energy efficiency solutions. Together, since 1992, ENERGY STAR and its partners have helped save American families and businesses over $450 billion and over 3.5 trillion kilowatt-hours of electricity while also achieving broad emissions reductions — all through voluntary action.
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SOURCE Marathon Petroleum Corporation
Article Date
4/10/2018Marathon Petroleum Corp. announces completion of make-whole redemption of its outstanding 2.700% senior notes due 2018
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
FINDLAY, Ohio, March 15, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) today announced that it has completed the redemption of all of the $600 million outstanding aggregate principal amount of its 2.700% senior notes due on Dec. 14, 2018, pursuant to a previously announced notice of redemption delivered to noteholders on Feb. 5, 2018.
This news release is for information purposes only and is neither an offer to buy nor a solicitation to sell any of the 2018 senior notes.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
View original content with multimedia:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-announces-completion-of-make-whole-redemption-of-its-outstanding-2700-senior-notes-due-2018-300614846.html
SOURCE Marathon Petroleum Corporation
Article Date
3/15/2018Marathon Petroleum Corp. and MPLX LP to present at Credit Suisse Energy Summit
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
FINDLAY, Ohio, Feb. 6, 2018 /PRNewswire/ -- On Tuesday, Feb. 13, Gary R. Heminger, the chairman and chief executive officer of Marathon Petroleum Corp. (NYSE: MPC) and MPLX LP (NYSE: MPLX), will deliver a presentation to investors and industry analysts at the Credit Suisse 2018 Energy Summit in Vail, Colorado.
Heminger's presentation is scheduled to begin at 8:35 a.m. MST (10:35 a.m. EST). The live webcast and archived presentation can be viewed on MPC's Investor Relations website, http://ir.marathonpetroleum.com, and MPLX's Investor Relations website, http://ir.mplx.com. The archived webcast and presentation support materials will be available for 14 days following Heminger's presentation.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation (MPC) to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the transportation, storage and distribution of crude oil and refined petroleum products through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. In addition, MPLX provides fuels distribution services to MPC and owns refining logistics assets consisting of tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping.
View original content with multimedia:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-and-mplx-lp-to-present-at-credit-suisse-energy-summit-300594515.html
SOURCE Marathon Petroleum Corp.; MPLX LP
Article Date
2/6/2018Marathon Petroleum Corp. announces make-whole redemption of its outstanding 2.700% senior notes due 2018
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
FINDLAY, Ohio, Feb. 5, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) today announced that it intends to issue a notice of redemption to redeem all of the $600 million outstanding aggregate principal amount of its 2.700% senior notes due on Dec. 14, 2018. The 2018 senior notes will be redeemed on March 15, 2018, at a price equal to par plus a make-whole premium calculated in accordance with the terms of the 2018 senior notes and accrued and unpaid interest to, but not including, the redemption date.
This news release is for information purposes only and is neither an offer to buy nor a solicitation to sell any of the 2018 senior notes.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-announces-make-whole-redemption-of-its-outstanding-2700-senior-notes-due-2018-300593327.html
SOURCE Marathon Petroleum Corporation
Article Date
2/5/2018MPLX LP reports fourth-quarter and full-year 2017 financial results
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
FINDLAY, Ohio, Feb. 1, 2018 /PRNewswire/ --
MPLX LP (NYSE: MPLX) today reported fourth-quarter 2017 net income attributable to MPLX of $238 million and full-year 2017 net income attributable to MPLX of $794 million.
MPLX achieved record financial results in the fourth-quarter and full-year 2017, reporting $1.2 billion in income from operations for the year. This record-setting performance was primarily driven by gathered, processed and fractionated volume growth, resulting in high plant utilization, as well as contributions from acquired logistics and storage assets.
MPLX achieved 12.1 percent distribution growth for 2017, in line with prior guidance and ended the year with strong full-year distribution coverage of 1.28 times and debt-to-pro forma adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of 3.6 times. Higher earnings and cash flow, combined with a disciplined approach to capital investments, have increased the partnership's capacity to fund organic growth with debt and retained cash. As a result, there was no public equity issued in the fourth quarter.
MPLX and its sponsor, Marathon Petroleum Corp. (NYSE: MPC), announced that they are today closing the dropdown of refining logistics assets and fuels distribution services that are projected to generate approximately $1 billion in annual EBITDA as well as the exchange of MPC's general partner (GP) economic interests, including its incentive distribution rights (IDRs), for newly issued MPLX common (LP) units, eliminating the GP cash distribution requirements of the partnership.
"In 2017, MPLX delivered strong results with sequential earnings growth in all four quarters as we executed our strategy to grow the business through increased utilization of our existing assets; an impressive portfolio of organic projects; strategic third-party acquisitions; and strategic actions with our sponsor," said Gary R. Heminger, chairman and chief executive officer. "These actions have transformed MPLX, nearly doubling the partnership's earnings base and improving the partnership's cost of capital by permanently eliminating the IDR burden."
MPLX also announced its 2018 capital investment plan, which includes approximately $2.2 billion of organic growth capital and $190 million of maintenance capital. For the Gathering and Processing (G&P) segment, this robust organic growth plan includes the addition of 8 processing plants representing nearly 1.5 billion cubic feet per day of incremental processing capacity as well as 100,000 barrels per day of additional fractionation capacity in the prolific Marcellus, Utica and Permian basins.
In the Marcellus and Utica basins, MPLX expects to strengthen its position as the largest processor and fractionator with the addition of six gas processing plants in 2018, increasing the partnership's processing capacity by 21 percent to over 7 billion cubic feet per day. Additionally, the partnership expects to add 40,000 barrels per day of ethane fractionation capacity, and 60,000 barrels per day of propane-plus fractionation capacity.
In the Southwest, the partnership also plans to expand its footprint by adding nearly 300 million cubic feet per day of processing capacity. The Argo gas processing plant will be placed in service in the first quarter, doubling the partnership's processing capacity in the Permian basin. Construction of the Omega gas processing plant in the STACK shale play of Oklahoma is on schedule and expected to be complete by mid-2018.
In the Logistics and Storage (L&S) segment, work continues on the expansion of the Ozark and Wood River-to-Patoka pipeline systems, which connect Cushing, Oklahoma, to Patoka, Illinois. Both are targeted for completion in mid-2018. Additional 2018 projects include the completion of a butane cavern in Robinson, Illinois; tank expansions in Patoka, Illinois, and Texas City, Texas; and an expansion of the partnership's marine fleet. Work also continues on the refining logistics project to expand Galveston Bay refinery's export capacity, expected to be completed in 2020. These projects are expected to create additional fee-based revenue for the partnership while providing logistics solutions to MPC and other market participants.
The partnership plans to fund its 2018 organic growth capital plan with retained cash and debt, while maintaining strong coverage and an investment grade credit profile. MPLX does not anticipate the need to issue public equity to fund organic growth capital.
"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," Heminger said. "With a robust portfolio of organic projects in the Marcellus, Utica, Permian and STACK, which are among the most prolific and economic shale plays in the country, and a diversified suite of logistics assets, we believe MPLX is extraordinarily well-positioned to deliver attractive long-term returns."
Financial Highlights
|
Three Months Ended |
Year Ended | ||||||||||||||
|
(In millions, except per unit and ratio data) |
2017 |
2016 |
2017 |
2016 | |||||||||||
|
Net income attributable to MPLX(a) |
$ |
238 |
$ |
133 |
$ |
794 |
$ |
233 |
|||||||
|
Adjusted EBITDA attributable to MPLX(b) |
569 |
391 |
2,004 |
1,419 |
|||||||||||
|
Net cash provided by operating activities |
569 |
516 |
1,907 |
1,491 |
|||||||||||
|
Distributable cash flow ("DCF")(b) |
445 |
318 |
1,628 |
1,140 |
|||||||||||
|
Distribution per common unit(c) |
0.6075 |
0.5200 |
2.2975 |
2.0500 |
|||||||||||
|
Distribution coverage ratio(d) |
1.24x |
1.25x |
1.28x |
1.23x |
|||||||||||
|
Growth capital expenditures(e) |
400 |
358 |
1,518 |
1,292 |
|||||||||||
|
(a) |
The year ended Dec. 31, 2016, includes pretax, non-cash impairments of $89 million related to an equity method investment and $130 million related to the goodwill established in connection with the MarkWest acquisition. |
|
(b) |
Non-GAAP measure calculated before the distribution to preferred units and excluding impairment charges. See reconciliation below. |
|
(c) |
Distributions declared by the board of directors of our general partner. |
|
(d) |
Non-GAAP measure. See calculation below. |
|
(e) |
Excludes non-affiliated joint-venture (JV) members' share of capital expenditures. See capital expenditures table below. |
Operational Highlights
Financial Position and Liquidity
As of Dec. 31, 2017, MPLX had $5 million in cash, $1.7 billion available through its bank revolving credit facility expiring in July 2022, and $114 million available through its credit facility with MPC. In 2017, MPLX received net proceeds from public equity issuances of approximately $473 million related to first- and second-quarter commitments under its at-the-market program. No additional common units were issued through this program in the third and fourth quarters.
The partnership's $1.9 billion of available liquidity and its access to the capital markets should provide it with sufficient flexibility to meet its day-to-day operational needs and continue investing in organic growth opportunities. The partnership's debt-to-pro forma adjusted EBITDA ratio was 3.6 times at Dec. 31, 2017. MPLX remains committed to maintaining an investment-grade credit profile.
Segment Results
|
Segment operating income attributable to MPLX LP |
|||||||||||||||
|
Three Months Ended |
Year Ended | ||||||||||||||
|
(In millions) |
2017 |
2016 |
2017 |
2016 | |||||||||||
|
Logistics and Storage(a) |
$ |
205 |
$ |
118 |
$ |
782 |
$ |
453 |
|||||||
|
Gathering and Processing(a) |
364 |
311 |
1,335 |
1,132 |
|||||||||||
|
(a) |
See reconciliation below for details. |
L&S segment operating income increased for the fourth quarter and full year of 2017, compared with the same periods in 2016. The full-year increase was primarily due to the acquisition of the Hardin Street Marine, MPLX Terminals, Hardin Street Transportation, Woodhaven Cavern, and Ozark Pipeline businesses.
G&P segment operating income increased for the fourth-quarter and full-year 2017, compared with the same periods in 2016. The fourth-quarter increase was predominantly due to record gathered, processed and fractionated volumes, which drove high utilization rates, and a benefit from increased product margins. The full-year increase was predominantly due to record gathered, processed and fractionated volumes resulting in strong utilization of existing and new facilities. The increase also included a benefit from higher product margins.
See reconciliation below for detail on items not allocable to or controllable by any individual segment, which are therefore excluded when evaluating segment performance.
Conference Call
At 11 a.m. EST today, MPLX will hold a conference call and webcast to discuss the reported results and provide an update on operations. Interested parties may listen to the conference call by dialing 1-888-606-5719 (confirmation number 6033306) or by visiting MPLX's website at http://www.mplx.com and clicking on the "2017 Fourth-Quarter and Full-Year Financial Results" link in the "News & Headlines" section. Replays of the conference call will be available on MPLX's website through Thursday, Feb. 15. Investor-related material will also be available online prior to the conference call and webcast at http://ir.mplx.com.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the transportation, storage and distribution of crude oil and refined petroleum products through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. Following today's dropdown, MPLX will provide fuels distribution services to MPC and own refining logistics assets consisting of tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping.
Non-GAAP references
In addition to our financial information presented in accordance with U.S. generally accepted accounting principles (GAAP), management utilizes additional non-GAAP measures to facilitate comparisons of past performance and future periods. This press release and supporting schedules include the non-GAAP measures adjusted EBITDA, distributable cash flow (DCF) and distribution coverage ratio. The amount of adjusted EBITDA and DCF generated is considered by the board of directors of our general partner in approving the Partnership's cash distribution. Adjusted EBITDA and DCF should not be considered separately from or as a substitute for net income, income from operations, or cash flow as reflected in our financial statements. The GAAP measures most directly comparable to adjusted EBITDA and DCF are net income and net cash provided by operating activities. We define Adjusted EBITDA as net income adjusted for (i) depreciation and amortization; (ii) (benefit) provision for income taxes; (iii) amortization of deferred financing costs; (iv) non-cash equity-based compensation; (v) impairment expense; (vi) net interest and other financial costs; (vii) (income) loss from equity method investments; (viii) distributions from unconsolidated subsidiaries; (ix) distributions of cash received from equity method investments to MPC; (x) unrealized derivative losses; (xi) other adjustments to equity method investment distributions; and (xii) acquisition costs. In general, we define DCF as adjusted EBITDA adjusted for (i) deferred revenue impacts; (ii) net interest and other financial costs; (iii) maintenance capital expenditures; (iv) equity method investment capital expenditures paid out; and (v) other non-cash items.
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, we record changes in the fair value of the derivative as an unrealized gain or loss. When a derivative contract matures or is settled, we reverse the previously recorded unrealized gain or loss and record the realized gain or loss of the contract.
Adjusted EBITDA is a financial performance measure used by management, industry analysts, investors, lenders, and rating agencies to assess the financial performance and operating results of our ongoing business operations. Additionally, we believe adjusted EBITDA provides useful information to investors for trending, analyzing and benchmarking our operating results from period to period as compared to other companies that may have different financing and capital structures.
DCF is a financial performance measure used by management as a key component in the determination of cash distributions paid to unitholders. We believe DCF is an important financial measure for unitholders as an indicator of cash return on investment and to evaluate whether the partnership is generating sufficient cash flow to support quarterly distributions. In addition, DCF is commonly used by the investment community because the market value of publicly traded partnerships is based, in part, on DCF and cash distributions paid to unitholders.
Distribution coverage ratio is a financial performance measure used by management to reflect the relationship between the partnership's financial operating performance and cash distribution capability. We define the distribution coverage ratio as the ratio of DCF attributable to GP and LP unitholders to total GP and LP distribution declared.
Forward-looking statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding MPLX LP ("MPLX") and Marathon Petroleum Corporation ("MPC"). These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the business and operations of MPLX and MPC, including strategic initiatives and our value creation plans. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "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 companies' control and are difficult to predict. Factors that could cause MPLX's actual results to differ materially from those implied in the forward-looking statements include: negative capital market conditions, including an increase of the current yield on common units, adversely affecting MPLX's ability to meet its distribution growth guidance; the ability to consummate the strategic initiatives discussed herein; our ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein and other proposed transactions; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of MPLX's capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and access to debt to fund anticipated dropdowns on commercially reasonable terms, and the ability to successfully execute its business plans and growth strategy; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of midstream infrastructure by competitors; disruptions due to equipment interruption or failure, including electrical shortages and power grid failures; the suspension, reduction or termination of MPC's obligations under MPLX's commercial agreements; modifications to earnings and distribution growth objectives; our ability to manage disruptions in credit markets or changes to our credit rating; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations and/or enforcement actions initiated thereunder; adverse results in litigation; changes to MPLX's capital budget; other risk factors inherent to MPLX's industry; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2016, filed with the Securities and Exchange Commission (SEC). Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include: the ability to consummate the strategic initiatives discussed herein; our ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein; our ability to manage disruptions in credit markets or changes to our credit rating; adverse changes in laws including with respect to tax and regulatory matters; changes to the expected construction costs and timing of projects; continued/further volatility in and/or degradation of market and industry conditions; the availability and pricing of crude oil and other feedstocks; slower growth in domestic and Canadian crude supply; the effects of the lifting of the U.S. crude oil export ban; completion of pipeline capacity to areas outside the U.S. Midwest; consumer demand for refined products; transportation logistics; the reliability of processing units and other equipment; MPC's ability to successfully implement growth opportunities; the impact of adverse market conditions affecting MPLX's midstream business; modifications to MPLX earnings and distribution growth objectives, and other risks described above with respect to MPLX; 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; adverse results in litigation; other risk factors inherent to MPC's industry; 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, 2016, filed with the SEC. In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here, in MPLX's Form 10-K or in MPC's Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPLX's Form 10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office. Copies of MPC's Form 10-K are available on the SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office.
|
Condensed Results of Operations (unaudited) |
|||||||||||||||
|
Three Months Ended |
Year Ended | ||||||||||||||
|
(In millions, except per unit data) |
2017 |
2016 |
2017 |
2016 | |||||||||||
|
Revenues and other income: |
|||||||||||||||
|
Operating revenue |
$ |
657 |
$ |
504 |
$ |
2,322 |
$ |
1,829 |
|||||||
|
Operating revenue - related parties |
355 |
326 |
1,369 |
1,182 |
|||||||||||
|
Income (loss) from equity method investments |
49 |
(2) |
78 |
(74) |
|||||||||||
|
Other income |
24 |
20 |
98 |
92 |
|||||||||||
|
Total revenues and other income |
1,085 |
848 |
3,867 |
3,029 |
|||||||||||
|
Costs and expenses: |
|||||||||||||||
|
Operating expenses |
375 |
278 |
1,241 |
959 |
|||||||||||
|
Operating expenses - related parties |
126 |
102 |
457 |
389 |
|||||||||||
|
Depreciation and amortization |
168 |
153 |
683 |
591 |
|||||||||||
|
Impairment expense |
— |
— |
— |
130 |
|||||||||||
|
General and administrative expenses |
67 |
55 |
241 |
227 |
|||||||||||
|
Other taxes |
14 |
13 |
54 |
50 |
|||||||||||
|
Total costs and expenses |
750 |
601 |
2,676 |
2,346 |
|||||||||||
|
Income from operations |
335 |
247 |
1,191 |
683 |
|||||||||||
|
Interest and other financial costs |
96 |
65 |
354 |
261 |
|||||||||||
|
Income before income taxes |
239 |
182 |
837 |
422 |
|||||||||||
|
(Benefit) provision for income taxes |
(2) |
— |
1 |
(12) |
|||||||||||
|
Net income |
241 |
182 |
836 |
434 |
|||||||||||
|
Less: Net income (loss) attributable to noncontrolling interests |
3 |
(1) |
6 |
2 |
|||||||||||
|
Less: Net income attributable to Predecessor(a) |
— |
50 |
36 |
199 |
|||||||||||
|
Net income attributable to MPLX LP |
238 |
133 |
794 |
233 |
|||||||||||
|
Less: Preferred unit distributions |
16 |
16 |
65 |
41 |
|||||||||||
|
Less: General partner's interest in net income attributable to MPLX LP |
96 |
55 |
318 |
191 |
|||||||||||
|
Limited partners' interest in net income attributable to MPLX LP |
$ |
126 |
$ |
62 |
$ |
411 |
$ |
1 |
|||||||
|
Per Unit Data |
|||||||||||||||
|
Net income attributable to MPLX LP per limited partner unit: |
|||||||||||||||
|
Common - basic |
$ |
0.31 |
$ |
0.17 |
$ |
1.07 |
$ |
— |
|||||||
|
Common - diluted |
0.31 |
0.17 |
1.06 |
— |
|||||||||||
|
Weighted average limited partner units outstanding: |
|||||||||||||||
|
Common units – basic |
407 |
351 |
385 |
331 |
|||||||||||
|
Common units – diluted |
407 |
356 |
388 |
338 |
|||||||||||
|
(a) |
The inland marine business acquired on March 31, 2016, and the pipeline, storage and terminals businesses acquired on March 1, 2017 (collectively with inland marine business, "Predecessor"). |
|
Select Financial Statistics (unaudited) |
|||||||||||||||
|
Three Months Ended |
Year Ended | ||||||||||||||
|
(In millions, except ratio data) |
2017 |
2016 |
2017 |
2016 | |||||||||||
|
Distribution declared |
|||||||||||||||
|
Common units (LP) - public |
$ |
175 |
$ |
140 |
$ |
656 |
$ |
533 |
|||||||
|
Common units - MPC |
58 |
45 |
210 |
159 |
|||||||||||
|
Common units - General partner (GP) |
113 |
— |
128 |
— |
|||||||||||
|
GP units - MPC |
— |
5 |
18 |
18 |
|||||||||||
|
Incentive distribution rights - MPC |
— |
52 |
211 |
187 |
|||||||||||
|
Total GP and LP distribution declared |
346 |
242 |
1,223 |
897 |
|||||||||||
|
Redeemable preferred units(a) |
16 |
16 |
65 |
41 |
|||||||||||
|
Total distribution declared |
$ |
362 |
$ |
258 |
$ |
1,288 |
$ |
938 |
|||||||
|
Distribution coverage ratio(b) |
1.24x |
1.25x |
1.28x |
1.23x | |||||||||||
|
Cash Flow Data |
|||||||||||||||
|
Net cash flow provided by (used in): |
|||||||||||||||
|
Operating activities |
$ |
569 |
$ |
516 |
$ |
1,907 |
$ |
1,491 |
|||||||
|
Investing activities |
(470) |
(521) |
(2,307) |
(1,413) |
|||||||||||
|
Financing activities |
(97) |
31 |
171 |
113 |
|||||||||||
|
Other Financial Data |
|||||||||||||||
|
Adjusted EBITDA attributable to MPLX LP(c) |
$ |
569 |
$ |
391 |
$ |
2,004 |
$ |
1,419 |
|||||||
|
DCF attributable to GP and LP unitholders(c) |
429 |
302 |
1,563 |
1,099 |
|||||||||||
|
(a) |
The preferred units are considered redeemable securities due to the existence of redemption provisions upon a deemed liquidation event which is outside our control. |
|
(b) |
DCF attributable to GP and LP unitholders divided by total GP and LP distribution declared. |
|
(c) |
Non-GAAP measure. See reconciliation below. |
|
Select Balance Sheet Data (unaudited) |
|||||||
|
(In millions, except ratio data) |
Dec. 31, 2017 |
Dec. 31, 2016 | |||||
|
Cash and cash equivalents |
$ |
5 |
$ |
234 |
|||
|
Total assets |
19,500 |
17,509 |
|||||
|
Total debt(a) |
7,332 |
4,423 |
|||||
|
Redeemable preferred units |
1,000 |
1,000 |
|||||
|
Total equity |
9,973 |
11,110 |
|||||
|
Consolidated total debt to LTM pro forma adjusted EBITDA(b) |
3.6x |
2.9x |
|||||
|
Partnership units outstanding: |
|||||||
|
GP units |
8 |
7 |
|||||
|
Class B units(c) |
— |
4 |
|||||
|
MPC-held common units |
95 |
86 |
|||||
|
GP-held common units |
23 |
— |
|||||
|
Public common units |
289 |
271 |
|||||
|
(a) |
Total debt includes $386 million of outstanding intercompany borrowings classified in current liabilities as of Dec. 31, 2017. |
|
(b) |
Calculated using face value total debt and LTM adjusted EBITDA, which is pro forma for acquisitions. Face value total debt includes approximately $416 million and $435 million of unamortized discount and debt issuance costs as of Dec 31, 2017, and 2016, respectively. |
|
(c) |
Class B units were issued to and were held by M&R MWE Liberty LLC and certain of its affiliates, an affiliate of The Energy & Minerals Group. The Class B units converted into common units at a rate of 1.09 common units and received $6.20 in cash for each Class B unit in two equal installments, on July 1, 2016, and 2017. Class B units did not receive distributions. |
|
Operating Statistics (unaudited) |
|||||||||||||||||||||
|
Three Months Ended |
Year Ended | ||||||||||||||||||||
|
2017 |
2016 |
% |
2017 |
2016 |
% | ||||||||||||||||
|
Logistics and Storage |
|||||||||||||||||||||
|
Pipeline throughput (thousands of barrels |
|||||||||||||||||||||
|
Crude oil pipelines |
2,041 |
1,577 |
29 |
% |
1,936 |
1,643 |
18 |
% | |||||||||||||
|
Product pipelines |
1,186 |
991 |
20 |
% |
1,085 |
990 |
10 |
% | |||||||||||||
|
Total pipelines |
3,227 |
2,568 |
26 |
% |
3,021 |
2,633 |
15 |
% | |||||||||||||
|
Average tariff rates ($ per barrel) |
|||||||||||||||||||||
|
Crude oil pipelines |
$ |
0.55 |
$ |
0.57 |
(4) |
% |
$ |
0.56 |
$ |
0.57 |
(2) |
% | |||||||||
|
Product pipelines |
0.73 |
0.71 |
3 |
% |
0.74 |
0.68 |
9 |
% | |||||||||||||
|
Total pipelines |
0.62 |
0.62 |
— |
% |
0.63 |
0.61 |
3 |
% | |||||||||||||
|
Terminal throughput (thousands of barrels |
1,497 |
1,496 |
— |
% |
1,477 |
1,505 |
(2) |
% | |||||||||||||
|
Barges at period-end |
232 |
222 |
5 |
% |
232 |
222 |
5 |
% | |||||||||||||
|
Towboats at period-end |
18 |
18 |
— |
% |
18 |
18 |
— |
% | |||||||||||||
|
Gathering and Processing |
|||||||||||||||||||||
|
Gathering throughput (mmcf/d)(a) |
|||||||||||||||||||||
|
Marcellus Operations |
1,121 |
874 |
28 |
% |
1,004 |
910 |
10 |
% | |||||||||||||
|
Utica Operations |
1,571 |
922 |
70 |
% |
1,192 |
932 |
28 |
% | |||||||||||||
|
Southwest Operations |
1,489 |
1,368 |
9 |
% |
1,412 |
1,433 |
(1) |
% | |||||||||||||
|
Total gathering throughput |
4,181 |
3,164 |
32 |
% |
3,608 |
3,275 |
10 |
% | |||||||||||||
|
Natural gas processed (mmcf/d)(a) |
|||||||||||||||||||||
|
Marcellus Operations |
4,203 |
3,341 |
26 |
% |
3,885 |
3,210 |
21 |
% | |||||||||||||
|
Utica Operations |
991 |
1,084 |
(9) |
% |
984 |
1,072 |
(8) |
% | |||||||||||||
|
Southwest Operations |
1,373 |
1,277 |
8 |
% |
1,326 |
1,226 |
8 |
% | |||||||||||||
|
Southern Appalachian Operations |
261 |
268 |
(3) |
% |
265 |
253 |
5 |
% | |||||||||||||
|
Total natural gas processed |
6,828 |
5,970 |
14 |
% |
6,460 |
5,761 |
12 |
% | |||||||||||||
|
C2 + NGLs fractionated (mbpd)(a) |
|||||||||||||||||||||
|
Marcellus Operations |
350 |
276 |
27 |
% |
320 |
260 |
23 |
% | |||||||||||||
|
Utica Operations |
39 |
38 |
3 |
% |
40 |
42 |
(5) |
% | |||||||||||||
|
Southwest Operations |
21 |
19 |
11 |
% |
20 |
18 |
11 |
% | |||||||||||||
|
Southern Appalachian Operations |
13 |
13 |
— |
% |
14 |
15 |
(7) |
% | |||||||||||||
|
Total C2 + NGLs fractionated |
423 |
346 |
22 |
% |
394 |
335 |
18 |
% | |||||||||||||
|
(a) |
Includes amounts related to unconsolidated equity method investments on a 100 percent basis. |
|
Reconciliation of Segment Operating Income |
|||||||||||||||
|
Three Months Ended |
Year Ended | ||||||||||||||
|
(In millions) |
2017 |
2016 |
2017 |
2016 | |||||||||||
|
L&S segment operating income attributable to MPLX LP |
$ |
205 |
$ |
118 |
$ |
782 |
$ |
453 |
|||||||
|
G&P segment operating income attributable to MPLX LP(a) |
364 |
311 |
1,335 |
1,132 |
|||||||||||
|
Segment portion attributable to equity affiliates |
(53) |
(43) |
(178) |
(173) |
|||||||||||
|
Segment portion attributable to Predecessor(b) |
— |
73 |
53 |
289 |
|||||||||||
|
Income (loss) from equity method investments |
49 |
(2) |
78 |
(74) |
|||||||||||
|
Other income - related parties |
13 |
11 |
51 |
40 |
|||||||||||
|
Unrealized derivative losses(c) |
(8) |
(13) |
(6) |
(36) |
|||||||||||
|
Depreciation and amortization |
(168) |
(153) |
(683) |
(591) |
|||||||||||
|
Impairment expense |
— |
— |
— |
(130) |
|||||||||||
|
General and administrative expenses |
(67) |
(55) |
(241) |
(227) |
|||||||||||
|
Income from operations |
$ |
335 |
$ |
247 |
$ |
1,191 |
$ |
683 |
|||||||
|
(a) |
All Partnership-operated, non-wholly owned subsidiaries are treated as if they are consolidated. |
|
(b) |
The operating income of the Predecessor is excluded from segment operating income attributable to MPLX LP prior to the acquisition dates. |
|
(c) |
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
|
Reconciliation of Adjusted EBITDA Attributable to
|
|||||||||||||||
|
Three Months Ended |
Year Ended | ||||||||||||||
|
(In millions) |
2017 |
2016 |
2017 |
2016 | |||||||||||
|
Net income |
$ |
241 |
$ |
182 |
$ |
836 |
$ |
434 |
|||||||
|
Depreciation and amortization |
168 |
153 |
683 |
591 |
|||||||||||
|
(Benefit) provision for income taxes |
(2) |
— |
1 |
(12) |
|||||||||||
|
Amortization of deferred financing costs |
15 |
12 |
53 |
46 |
|||||||||||
|
Non-cash equity-based compensation |
5 |
1 |
15 |
10 |
|||||||||||
|
Impairment expense |
— |
— |
— |
130 |
|||||||||||
|
Net interest and other financial costs |
81 |
53 |
301 |
215 |
|||||||||||
|
(Income) loss from equity method investments |
(49) |
2 |
(78) |
74 |
|||||||||||
|
Distributions from unconsolidated subsidiaries |
105 |
37 |
241 |
148 |
|||||||||||
|
Distributions of cash received from equity method |
(18) |
— |
(31) |
— |
|||||||||||
|
Other adjustments to equity method investment |
13 |
2 |
21 |
2 |
|||||||||||
|
Unrealized derivative losses(a) |
8 |
13 |
6 |
36 |
|||||||||||
|
Acquisition costs |
5 |
— |
11 |
(1) |
|||||||||||
|
Adjusted EBITDA |
572 |
455 |
2,059 |
1,673 |
|||||||||||
|
Adjusted EBITDA attributable to noncontrolling |
(3) |
— |
(8) |
(3) |
|||||||||||
|
Adjusted EBITDA attributable to Predecessor(b) |
— |
(64) |
(47) |
(251) |
|||||||||||
|
Adjusted EBITDA attributable to MPLX LP |
569 |
391 |
2,004 |
1,419 |
|||||||||||
|
Deferred revenue impacts |
8 |
8 |
33 |
16 |
|||||||||||
|
Net interest and other financial costs |
(81) |
(53) |
(301) |
(215) |
|||||||||||
|
Maintenance capital expenditures |
(44) |
(26) |
(103) |
(84) |
|||||||||||
|
Equity method investment capital expenditures |
(9) |
(2) |
(13) |
(3) |
|||||||||||
|
Other |
2 |
— |
6 |
(1) |
|||||||||||
|
Portion of DCF adjustments attributable to |
— |
— |
2 |
8 |
|||||||||||
|
DCF attributable to MPLX LP |
445 |
318 |
1,628 |
1,140 |
|||||||||||
|
Preferred unit distributions |
(16) |
(16) |
(65) |
(41) |
|||||||||||
|
DCF attributable to GP and LP unitholders |
$ |
429 |
$ |
302 |
$ |
1,563 |
$ |
1,099 |
|||||||
|
(a) |
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
|
(b) |
The adjusted EBITDA and DCF adjustments related to Predecessor are excluded from adjusted EBITDA attributable to MPLX LP and DCF prior to the acquisition dates. |
|
Reconciliation of Adjusted EBITDA Attributable to |
|||||||||||||||
|
Three Months Ended |
Year Ended | ||||||||||||||
|
(In millions) |
2017 |
2016 |
2017 |
2016 | |||||||||||
|
Net cash provided by operating activities |
$ |
569 |
$ |
516 |
$ |
1,907 |
$ |
1,491 |
|||||||
|
Changes in working capital items |
(106) |
(135) |
(147) |
(76) |
|||||||||||
|
All other, net |
15 |
2 |
(28) |
(16) |
|||||||||||
|
Non-cash equity-based compensation |
5 |
1 |
15 |
10 |
|||||||||||
|
Net gain on disposal of assets |
(1) |
— |
— |
1 |
|||||||||||
|
Current income taxes |
1 |
1 |
2 |
5 |
|||||||||||
|
Net interest and other financial costs |
81 |
53 |
301 |
215 |
|||||||||||
|
Asset retirement expenditures |
— |
2 |
2 |
6 |
|||||||||||
|
Unrealized derivative losses(a) |
8 |
13 |
6 |
36 |
|||||||||||
|
Acquisition costs |
5 |
— |
11 |
(1) |
|||||||||||
|
Distributions of cash received from equity method |
(18) |
— |
(31) |
— |
|||||||||||
|
Other adjustments to equity method investment |
13 |
2 |
21 |
2 |
|||||||||||
|
Adjusted EBITDA |
572 |
455 |
2,059 |
1,673 |
|||||||||||
|
Adjusted EBITDA attributable to noncontrolling |
(3) |
— |
(8) |
(3) |
|||||||||||
|
Adjusted EBITDA attributable to Predecessor(b) |
— |
(64) |
(47) |
(251) |
|||||||||||
|
Adjusted EBITDA attributable to MPLX LP |
569 |
391 |
2,004 |
1,419 |
|||||||||||
|
Deferred revenue impacts |
8 |
8 |
33 |
16 |
|||||||||||
|
Net interest and other financial costs |
(81) |
(53) |
(301) |
(215) |
|||||||||||
|
Maintenance capital expenditures |
(44) |
(26) |
(103) |
(84) |
|||||||||||
|
Equity method investment capital expenditures paid |
(9) |
(2) |
(13) |
(3) |
|||||||||||
|
Other |
2 |
— |
6 |
(1) |
|||||||||||
|
Portion of DCF adjustments attributable to |
— |
— |
2 |
8 |
|||||||||||
|
DCF attributable to MPLX LP |
445 |
318 |
1,628 |
1,140 |
|||||||||||
|
Preferred unit distributions |
(16) |
(16) |
(65) |
(41) |
|||||||||||
|
DCF attributable to GP and LP unitholders |
$ |
429 |
$ |
302 |
$ |
1,563 |
$ |
1,099 |
|||||||
|
(a) |
The Partnership makes a distinction between realized or unrealized gains and losses on derivatives. During the period when a derivative contract is outstanding, changes in the fair value of the derivative are recorded as an unrealized gain or loss. When a derivative contract matures or is settled, the previously recorded unrealized gain or loss is reversed and the realized gain or loss of the contract is recorded. |
|
(b) |
The adjusted EBITDA and DCF adjustments related to Predecessor are excluded from adjusted EBITDA attributable to MPLX LP and DCF prior to the acquisition dates. |
|
Capital Expenditures (unaudited) |
|||||||||||||||
|
Three Months Ended |
Year Ended | ||||||||||||||
|
(In millions) |
2017 |
2016 |
2017 |
2016 | |||||||||||
|
Capital Expenditures(a): |
|||||||||||||||
|
Maintenance |
$ |
44 |
$ |
26 |
$ |
103 |
$ |
84 |
|||||||
|
Growth |
379 |
324 |
1,381 |
1,213 |
|||||||||||
|
Total capital expenditures |
423 |
350 |
1,484 |
1,297 |
|||||||||||
|
Less: Increase (decrease) in capital accruals |
16 |
(22) |
71 |
(22) |
|||||||||||
|
Asset retirement expenditures |
— |
2 |
2 |
6 |
|||||||||||
|
Additions to property, plant and equipment |
407 |
370 |
1,411 |
1,313 |
|||||||||||
|
Capital expenditures of unconsolidated subsidiaries(b) |
78 |
37 |
384 |
131 |
|||||||||||
|
Total gross capital expenditures |
485 |
407 |
1,795 |
1,444 |
|||||||||||
|
Less: Joint venture partner contributions |
37 |
19 |
169 |
64 |
|||||||||||
|
Total capital expenditures, net |
448 |
388 |
1,626 |
1,380 |
|||||||||||
|
Less: Maintenance capital |
48 |
30 |
108 |
88 |
|||||||||||
|
Total growth capital expenditures |
$ |
400 |
$ |
358 |
$ |
1,518 |
$ |
1,292 |
|||||||
|
(a) |
Includes capital expenditures of the Predecessor for all periods presented. |
|
(b) |
Capital expenditures includes amounts related to unconsolidated, partnership operated subsidiaries. |
View original content with multimedia:http://www.prnewswire.com/news-releases/mplx-lp-reports-fourth-quarter-and-full-year-2017-financial-results-300591816.html
SOURCE MPLX LP
Article Date
2/1/2018Marathon Petroleum Corp. reports fourth-quarter and full-year 2017 results
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
FINDLAY, Ohio, Feb. 1, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) today reported 2017 fourth-quarter earnings of $2.02 billion, or $4.09 per diluted share, compared with $227 million, or $0.43 per diluted share, in the fourth quarter of 2016.
Earnings were $3.43 billion, or $6.70 per diluted share, for the full-year 2017, compared with $1.17 billion, or $2.21 per diluted share, for the full-year 2016.
During the fourth quarter, the Tax Cuts and Jobs Act significantly revised U.S. corporate income tax law by, among other things, reducing the corporate income tax rate to 21 percent. Earnings for the fourth quarter and full year include 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 remeasuring certain net deferred tax liabilities using the lower corporate tax rate.
"We delivered a strong operational and financial performance across the business," said Gary R. Heminger, chairman and chief executive officer. "We provided outstanding value for our investors in 2017. The Midstream and Speedway segments each achieved a record full-year performance, which, combined with a substantial increase in earnings from the Refining and Marketing segment, fully demonstrates the robust earnings power of MPC's integrated model."
MPC's Midstream segment, which primarily reflects the results of MPLX LP (NYSE: MPLX), reported record financial results in the fourth quarter and full-year 2017, contributing $1.34 billion in segment income from operations for the year. This record-setting performance was largely driven by gathered, processed and fractionated volume growth, resulting in high plant utilization.
Speedway continued its exceptional performance, finishing the year with segment income of $732 million, a record when excluding the favorable lower of cost or market inventory adjustment (LCM) reversal recorded in 2016, building upon several years of solid segment earnings growth. In 2017, Speedway delivered strong earnings from light product sales, an increase of 1.2 percent in same-store merchandise sales, lower operating expenses and contributions from its travel center joint venture. Speedway's sixth straight year of record segment earnings before interest, taxes, depreciation and amortization (EBITDA) and second consecutive year of approximately $1 billion of annual EBITDA reinforces the strategic value of this high-performing, stable cash-flow business.
The Refining and Marketing segment reported full-year segment income from operations of $2.32 billion, a $964 million increase over 2016. Results were largely driven by higher LLS-based blended crack spreads and high utilization rates. Numerous monthly process unit and production records were achieved in both the fourth quarter and throughout the year, including monthly records for crude throughput and gasoline and distillate production. As a result, MPC is now the second-largest refiner in the U.S. on a crude-throughput basis and Galveston Bay and Garyville are the second- and third-largest refineries, respectively.
"February marks the 5-year anniversary of our acquisition of the Galveston Bay refinery. The accomplishments during this time are impressive," Heminger said. "Since 2013, we have dramatically improved the environmental and safety performance of the refinery and advanced operational excellence, all while achieving lower operating expenses. Some of the accomplishments include an 80 percent reduction in environmental incidents and 33 monthly process-unit rate records in 2017 alone, while cutting unplanned downtime in half and lowering operating expenses nearly 25 percent."
MPC and its sponsored master limited partnership, MPLX, announced that they are today closing the dropdown of refining logistics assets and fuels distribution services as well as the exchange of MPC's general partner (GP) economic interests for newly issued MPLX common (LP) units, completing the previously announced strategic actions.
During 2017, MPC returned over $3 billion of capital to MPC shareholders through dividends and share repurchases, which were supported in part by proceeds from dropdown transactions during the year. The company plans further return of capital with the after-tax cash proceeds from today's dropdown transaction, in a manner consistent with maintaining its current investment grade credit profile.
On Jan. 29, the MPC board of directors announced a 15 percent increase in the quarterly dividend, to $0.46 per share. This represents a 26.5 percent compound annual growth rate in the dividend since becoming an independent company six years ago, demonstrating continued confidence in the cash-flow generation of the business.
"Building on 2017's strong operational and financial results, we are pleased to complete our strategic actions, adding to our long and successful track record of taking steps to create long-term value for our shareholders," Heminger said. "We have tremendous momentum going into 2018 and are encouraged by the high-returning investment opportunities across the business."
MPC also announced its 2018 capital investment plan, which remains focused on strengthening the sustained earnings power of its businesses through growth and margin-enhancing investments across the enterprise. MPC's investment plan, excluding MPLX, totals approximately $1.6 billion.
The capital plan for the Refining and Marketing segment is $950 million. Of that amount, approximately $400 million is growth capital focused on optimizing the Galveston Bay refinery, upgrading residual fuel oils to higher-value products, maximizing distillate production and expanding light product placement flexibility, including exports. Sustaining capital is approximately $550 million, which includes approximately $210 million related to regulatory spending for Tier 3 gasoline.
Speedway's capital plan is $530 million, a $150 million increase from last year. This significant increase in Speedway's capital allocation is primarily targeted for construction of new store locations as well as remodeling and rebuilding existing locations, consistent with MPC's commitment to aggressively grow the business and build upon its industry-leading position.
The capital plan also includes approximately $100 million to support corporate activities and the remaining assets in MPC's Midstream segment, excluding MPLX.
MPLX announced its 2018 capital investment plan, which includes approximately $2.2 billion of organic growth capital and $190 million of maintenance capital. This robust organic growth plan includes the addition of 8 processing plants representing nearly 1.5 billion cubic feet per day of incremental processing capacity as well as 100,000 barrels per day of additional fractionation capacity in the prolific Marcellus, Utica and Permian basins. The remaining growth capital is planned for the development of various crude oil and refined products infrastructure projects, including the export-capacity expansion project at the Galveston Bay refinery.
"Looking forward, we believe the global and U.S. macro picture remains solid and expect that good underlying economic growth will continue to support strong demand for our products. Export markets, which have been important to the high utilization of our refineries, are also expected to remain robust. Recent tax legislation complements our outlook and stimulates further investment in the business," Heminger said. "As the nation's second-largest refiner, the sponsor of one of the largest diversified master limited partnerships in MPLX, and an industry leader in retail through our Speedway business, we are uniquely positioned to deliver compelling and sustainable returns for our investors."
Segment Results
Total income from operations was $1.12 billion in the fourth quarter of 2017 and $3.97 billion for full-year 2017, compared with $553 million in the fourth quarter of 2016 and $2.38 billion for full-year 2016.
|
Three Months Ended |
Twelve Months Ended | ||||||||||||||
|
(In millions) |
2017 |
2016 |
2017 |
2016 | |||||||||||
|
Income from Operations by Segment |
|||||||||||||||
|
Refining & Marketing(a)(b) |
$ |
732 |
$ |
166 |
$ |
2,321 |
$ |
1,357 |
|||||||
|
Speedway(b) |
149 |
165 |
732 |
734 |
|||||||||||
|
Midstream(a) |
343 |
296 |
1,339 |
1,048 |
|||||||||||
|
Items not allocated to segments: |
|||||||||||||||
|
Corporate and other unallocated items(a) |
(114) |
(74) |
(365) |
(268) |
|||||||||||
|
Pension settlement expenses |
(50) |
— |
(52) |
(7) |
|||||||||||
|
Litigation |
57 |
— |
(29) |
— |
|||||||||||
|
Impairments |
2 |
— |
23 |
(486) |
|||||||||||
|
Income from operations |
$ |
1,119 |
$ |
553 |
$ |
3,969 |
$ |
2,378 |
|||||||
|
(a) |
In the first quarter of 2017, segment reporting was revised in connection with the contribution of certain terminal, pipeline and storage assets to MPLX. The results related to these assets are now presented in the Midstream segment. Previously, these results were reported in the Refining & Marketing segment. The results for the pipeline and storage assets were recast effective Jan. 1, 2015, and the results for the terminal assets were recast effective April 1, 2016. Prior to these dates these assets were not considered businesses and therefore there are no financial results from which to recast segment results. |
|
(b) |
Due to increased refined product prices during the second quarter of 2016, the company reversed its lower of cost or market inventory valuation reserve resulting in a $370 million non-cash benefit to income from operations for the full-year 2016, which increased Refining & Marketing and Speedway segment results by $345 million and $25 million, respectively. |
Refining & Marketing
Refining & Marketing (R&M) segment income from operations was $732 million in the fourth quarter of 2017 and $2.32 billion for full-year 2017, compared with $166 million and $1.36 billion in the fourth quarter of 2016 and full-year 2016, respectively.
The increase in quarter-over-quarter segment results was primarily a result of a $1.81 per barrel increase in the R&M margin. This favorable effect was primarily due to higher blended crack spreads and utilization rates as well as the widening of the West Texas Intermediate (WTI) / Light Louisiana Sweet (LLS) crude oil differential. The U.S. Gulf Coast and Chicago LLS blended 6-3-2-1 crack spread increased to $9.75 per barrel in the fourth quarter of 2017 from $7.39 per barrel in the fourth quarter of 2016. These favorable effects were partially offset by less favorable product price realizations relative to the spot market prices used in the LLS blended crack spread. Refinery throughputs exceeded 2 million barrels per day in the fourth quarter and crude oil capacity utilization was 101 percent in the fourth quarter of 2017 as compared to 93 percent in the fourth quarter of 2016.
Excluding the $345 million LCM benefit recognized in 2016, the increase in segment results for full-year 2017 compared with full-year 2016 primarily resulted from higher LLS crack spreads in both the U.S. Gulf Coast and Chicago markets. The LLS blended crack spread for the full-year 2017 increased to $9.84 per barrel from $6.96 per barrel in 2016. These favorable effects were partially offset by less favorable product price realizations as compared to the spot market prices used in the LLS blended crack spread.
Speedway
Speedway segment income from operations was $149 million in the fourth quarter of 2017 and $732 million for full-year 2017, compared with $165 million in the fourth quarter of 2016 and $734 million for full-year 2016, which includes a $25 million LCM benefit.
The decrease in quarter-over-quarter segment results was primarily due to higher operating expenses and lower merchandise margin partially offset by an increase in the light product margin. Speedway's light product margin increased to 17.72 cents per gallon in the fourth quarter of 2017 from 16.17 cents per gallon in the fourth quarter of 2016.
Excluding the $25 million LCM benefit recognized in 2016, the increase in segment results for the full-year 2017 compared to full-year 2016 was primarily due to contributions from its travel center joint venture formed in the fourth quarter 2016 and lower operating expense partially offset by lower merchandise margin and lower gains from asset sales.
Midstream
Midstream segment income from operations, which primarily reflects the results of MPLX's operations on a 100 percent basis, was $343 million in the fourth quarter of 2017 and $1.34 billion for full-year 2017, compared with $296 million and $1.05 billion for the fourth quarter and full-year 2016, respectively. The increases in segment results for the fourth quarter and full year of 2017 compared with respective periods in 2016 were primarily due to higher natural gas and NGL gathering, processing and fractionating volumes and changes in natural gas and NGL prices. Segment results also benefited from the first-quarter 2017 acquisitions of the Ozark Pipeline and our ownership interest in the Bakken Pipeline system.
Items Not Allocated to Segments
Corporate and other unallocated expenses of $114 million in the fourth quarter of 2017 and $365 million for the full-year 2017 compared with $74 million and $268 million for the full-year 2016. The increases for the quarter and full year were due to higher unallocated corporate costs and increases in employee-related expenses and corporate costs.
Strong Financial Position and Liquidity
On Dec. 31, 2017, the company had $3 billion in cash and cash equivalents, excluding MPLX's cash and cash equivalents of $5 million, $2.5 billion available under a revolving credit agreement, $1 billion available under a 364-day bank revolving credit facility and approximately $750 million available under its $750 million trade receivables securitization facility. The company's liquidity should provide it with sufficient flexibility to meet its day-to-day operational needs and continue its balanced approach to investing in the business and returning capital to shareholders. The company remains committed to maintaining an investment-grade credit profile.
Conference Call
At 9 a.m. EST 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 to the conference call by dialing 1-888-989-4720 (confirmation #4852094) or by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2017 Fourth-Quarter and Full-Year Financial Results" link. Replays of the conference call will be available on the company's website through Thursday, Feb. 15. Financial information, including the earnings release and other investor-related material, will also be available online prior to the conference call and webcast at http://ir.marathonpetroleum.com in the Quarterly Investor Packet and Earnings Capsule.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
References to Earnings
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") and MPLX LP ("MPLX"). These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the business and operations of MPC and MPLX, including strategic initiatives and our value creation plans. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "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 companies' 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: the ability to consummate the strategic initiatives discussed herein; our ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein; our ability to manage disruptions in credit markets or changes to our credit rating; adverse changes in laws including with respect to tax and regulatory matters; changes to the expected construction costs and timing of projects; continued/further volatility in and/or degradation of market and industry conditions; the availability and pricing of crude oil and other feedstocks; slower growth in domestic and Canadian crude supply; the effects of the lifting of the U.S. crude oil export ban; completion of pipeline capacity to areas outside the U.S. Midwest; consumer demand for refined products; transportation logistics; the reliability of processing units and other equipment; MPC's ability to successfully implement growth opportunities; the impact of adverse market conditions affecting MPC's and MPLX's midstream businesses; modifications to MPLX earnings and distribution growth objectives, and other risks described below with respect to MPLX; 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; adverse results in litigation; changes to MPC's capital budget; other risk factors inherent to MPC's industry; 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, 2016, filed with Securities and Exchange Commission (SEC). Factors that could cause MPLX's actual results to differ materially from those implied in the forward-looking statements include: negative capital market conditions, including an increase of the current yield on common units, adversely affecting MPLX's ability to meet its distribution growth guidance; the ability to consummate the strategic initiatives discussed herein; our ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein and other proposed transactions; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of MPLX's capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and access to debt to fund anticipated dropdowns on commercially reasonable terms, and the ability to successfully execute its business plans and growth strategy; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of midstream infrastructure by competitors; disruptions due to equipment interruption or failure, including electrical shortages and power grid failures; the suspension, reduction or termination of MPC's obligations under MPLX's commercial agreements; modifications to earnings and distribution growth objectives; our ability to manage disruptions in credit markets or changes to our credit rating; compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations and/or enforcement actions initiated thereunder; adverse results in litigation; changes to MPLX's capital budget; other risk factors inherent to MPLX's industry; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2016, filed with the SEC. In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here, in MPC's Form 10-K or in MPLX's Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPC's Form 10-K are available on the SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office. Copies of MPLX's Form 10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office.
|
Consolidated Statements of Income (Unaudited) | |||||||||||||||
|
Three Months Ended |
Twelve Months Ended | ||||||||||||||
|
(In millions, except per-share data) |
2017 |
2016 |
2017 |
2016 | |||||||||||
|
Revenues and other income: |
|||||||||||||||
|
Sales and other operating revenues (including consumer |
$ |
20,884 |
$ |
17,098 |
$ |
74,104 |
$ |
63,277 |
|||||||
|
Sales to related parties |
171 |
57 |
629 |
62 |
|||||||||||
|
Income (loss) from equity method investments |
82 |
51 |
306 |
(185) |
|||||||||||
|
Net gain (loss) on disposal of assets |
(2) |
6 |
10 |
32 |
|||||||||||
|
Other income |
101 |
72 |
320 |
178 |
|||||||||||
|
Total revenues and other income |
21,236 |
17,284 |
75,369 |
63,364 |
|||||||||||
|
Costs and expenses: |
|||||||||||||||
|
Cost of revenues (excludes items below) |
16,847 |
13,695 |
58,760 |
49,170 |
|||||||||||
|
Purchases from related parties |
150 |
150 |
570 |
509 |
|||||||||||
|
Inventory market valuation charges |
— |
— |
— |
(370) |
|||||||||||
|
Consumer excise taxes |
2,008 |
1,873 |
7,759 |
7,506 |
|||||||||||
|
Impairment expense |
— |
— |
— |
130 |
|||||||||||
|
Depreciation and amortization |
540 |
504 |
2,114 |
2,001 |
|||||||||||
|
Selling, general and administrative expenses |
457 |
406 |
1,743 |
1,605 |
|||||||||||
|
Other taxes |
115 |
103 |
454 |
435 |
|||||||||||
|
Total costs and expenses |
20,117 |
16,731 |
71,400 |
60,986 |
|||||||||||
|
Income from operations |
1,119 |
553 |
3,969 |
2,378 |
|||||||||||
|
Net interest and other financial income (costs) |
(160) |
(136) |
(625) |
(556) |
|||||||||||
|
Income before income taxes |
959 |
417 |
3,344 |
1,822 |
|||||||||||
|
(Benefit) provision for income taxes |
(1,166) |
128 |
(460) |
609 |
|||||||||||
|
Net income |
2,125 |
289 |
3,804 |
1,213 |
|||||||||||
|
Less net income (loss) attributable to: |
|||||||||||||||
|
Redeemable noncontrolling interest |
16 |
16 |
65 |
41 |
|||||||||||
|
Noncontrolling interests |
93 |
46 |
307 |
(2) |
|||||||||||
|
Net income attributable to MPC |
$ |
2,016 |
$ |
227 |
$ |
3,432 |
$ |
1,174 |
|||||||
|
Per-share data |
|||||||||||||||
|
Basic: |
|||||||||||||||
|
Net income attributable to MPC per share |
$ |
4.13 |
$ |
0.43 |
$ |
6.76 |
$ |
2.22 |
|||||||
|
Weighted average shares: |
488 |
526 |
507 |
528 |
|||||||||||
|
Diluted: |
|||||||||||||||
|
Net income attributable to MPC per share |
$ |
4.09 |
$ |
0.43 |
$ |
6.70 |
$ |
2.21 |
|||||||
|
Weighted average shares: |
493 |
529 |
512 |
530 |
|||||||||||
|
Dividends paid |
$ |
0.40 |
$ |
0.36 |
$ |
1.52 |
$ |
1.36 |
|||||||
|
Supplemental Statistics (Unaudited) | |||||||||||||||
|
Three Months Ended |
Twelve Months Ended | ||||||||||||||
|
(In millions) |
2017 |
2016 |
2017 |
2016 | |||||||||||
|
Income from Operations by segment |
|||||||||||||||
|
Refining & Marketing(a)(b) |
$ |
732 |
$ |
166 |
$ |
2,321 |
$ |
1,357 |
|||||||
|
Speedway(a) |
149 |
165 |
732 |
734 |
|||||||||||
|
Midstream(b) |
343 |
296 |
1,339 |
1,048 |
|||||||||||
|
Items not allocated to segments: |
|||||||||||||||
|
Corporate and other unallocated items(b) |
(114) |
(74) |
(365) |
(268) |
|||||||||||
|
Pension settlement expenses |
(50) |
— |
(52) |
(7) |
|||||||||||
|
Litigation |
57 |
— |
(29) |
— |
|||||||||||
|
Impairments(c) |
2 |
— |
23 |
(486) |
|||||||||||
|
Income from operations(a) |
1,119 |
553 |
3,969 |
2,378 |
|||||||||||
|
Net interest and other financial income (costs) |
(160) |
(136) |
(625) |
(556) |
|||||||||||
|
Income before income taxes |
959 |
417 |
3,344 |
1,822 |
|||||||||||
|
(Benefit) provision for income taxes |
(1,166) |
128 |
(460) |
609 |
|||||||||||
|
Net income |
2,125 |
289 |
3,804 |
1,213 |
|||||||||||
|
Less net income (loss) attributable to: |
|||||||||||||||
|
Redeemable noncontrolling interest |
16 |
16 |
65 |
41 |
|||||||||||
|
Noncontrolling interests |
93 |
46 |
307 |
(2) |
|||||||||||
|
Net income attributable to MPC |
$ |
2,016 |
$ |
227 |
$ |
3,432 |
$ |
1,174 |
|||||||
|
Capital Expenditures and Investments |
|||||||||||||||
|
Refining & Marketing(b) |
$ |
262 |
$ |
298 |
$ |
832 |
$ |
1,054 |
|||||||
|
Speedway |
160 |
112 |
381 |
303 |
|||||||||||
|
Midstream(b)(d) |
488 |
389 |
2,505 |
1,568 |
|||||||||||
|
Corporate and Other(e) |
46 |
38 |
138 |
144 |
|||||||||||
|
Total |
$ |
956 |
$ |
837 |
$ |
3,856 |
$ |
3,069 |
|||||||
|
(a) |
The company reversed a $370 million lower of cost or market inventory valuation reserve due to increased refined product prices during the second quarter of 2016 resulting in a $370 million non-cash benefit to income from operations for the full-year 2016, which increased Refining & Marketing and Speedway segment results by $345 million and $25 million, respectively. |
|
(b) |
In the first quarter of 2017, segment reporting was revised in connection with the contribution of certain terminal, pipeline and storage assets to MPLX. The results related to these assets are now presented in the Midstream segment. Previously, these results were reported in the Refining & Marketing segment. The results for the pipeline and storage assets were recast effective Jan. 1, 2015, and the results for the terminal assets were recast effective April 1, 2016. Prior to these dates these assets were not considered businesses and therefore there are no financial results from which to recast segment results. |
|
(c) |
The fourth-quarter and full-year 2017 impairments include MPC's share of gains related to the sale of assets from the Sandpiper Pipeline project. Full-year 2016 includes impairments of our equity method investments and goodwill. |
|
(d) |
Full-year 2017 includes $220 million for the acquisition of the Ozark Pipeline and an investment of $500 million in MarEn Bakken related to the Bakken Pipeline system. |
|
(e) |
Includes capitalized interest of $16 million, $16 million, $55 million and $63 million, respectively. |
|
Supplementary Statistics (Unaudited) (continued) | |||||||||||||||
|
Three Months Ended |
Twelve Months Ended | ||||||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||||
|
MPC Consolidated Refined Product Sales Volumes |
2,427 |
2,252 |
2,311 |
2,269 |
|||||||||||
|
Refining & Marketing (R&M) Operating Statistics |
|||||||||||||||
|
R&M refined product sales volume (mbpd)(b) |
2,414 |
2,240 |
2,301 |
2,259 |
|||||||||||
|
R&M margin (dollars per barrel)(c) |
$ |
13.12 |
$ |
11.31 |
$ |
12.60 |
$ |
11.16 |
|||||||
|
Crude oil capacity utilization (percent)(d) |
101 |
93 |
97 |
95 |
|||||||||||
|
Refinery throughputs (mbpd):(e) |
|||||||||||||||
|
Crude oil refined |
1,837 |
1,672 |
1,765 |
1,699 |
|||||||||||
|
Other charge and blendstocks |
187 |
138 |
179 |
151 |
|||||||||||
|
Total |
2,024 |
1,810 |
1,944 |
1,850 |
|||||||||||
|
Sour crude oil throughput (percent) |
53 |
61 |
59 |
60 |
|||||||||||
|
WTI-priced crude oil throughput (percent) |
26 |
18 |
21 |
19 |
|||||||||||
|
Refined product yields (mbpd):(e) |
|||||||||||||||
|
Gasoline |
997 |
877 |
932 |
900 |
|||||||||||
|
Distillates |
679 |
621 |
641 |
617 |
|||||||||||
|
Propane |
40 |
34 |
36 |
35 |
|||||||||||
|
Feedstocks and special products |
254 |
227 |
277 |
241 |
|||||||||||
|
Heavy fuel oil |
42 |
19 |
37 |
32 |
|||||||||||
|
Asphalt |
62 |
58 |
63 |
58 |
|||||||||||
|
Total |
2,074 |
1,836 |
1,986 |
1,883 |
|||||||||||
|
Refinery direct operating costs ($/barrel):(f) |
|||||||||||||||
|
Planned turnaround and major maintenance |
$ |
1.80 |
$ |
2.16 |
$ |
1.72 |
$ |
1.83 |
|||||||
|
Depreciation and amortization |
1.38 |
1.48 |
1.43 |
1.47 |
|||||||||||
|
Other manufacturing(g) |
4.03 |
4.29 |
4.07 |
4.09 |
|||||||||||
|
Total |
$ |
7.21 |
$ |
7.93 |
$ |
7.22 |
$ |
7.39 |
|||||||
|
R&M Operating Statistics by Region - Gulf Coast |
|||||||||||||||
|
Refinery throughputs (mbpd):(h) |
|||||||||||||||
|
Crude oil refined |
1,158 |
986 |
1,070 |
1,039 |
|||||||||||
|
Other charge and blendstocks |
237 |
184 |
224 |
195 |
|||||||||||
|
Total |
1,395 |
1,170 |
1,294 |
1,234 |
|||||||||||
|
Sour crude oil throughput (percent) |
62 |
73 |
71 |
73 |
|||||||||||
|
WTI-priced crude oil throughput (percent) |
14 |
10 |
11 |
8 |
|||||||||||
|
Refined product yields (mbpd):(h) |
|||||||||||||||
|
Gasoline |
608 |
466 |
546 |
514 |
|||||||||||
|
Distillates |
440 |
377 |
405 |
399 |
|||||||||||
|
Propane |
29 |
24 |
26 |
26 |
|||||||||||
|
Feedstocks and special products |
313 |
294 |
311 |
286 |
|||||||||||
|
Heavy fuel oil |
30 |
10 |
25 |
21 |
|||||||||||
|
Asphalt |
17 |
16 |
17 |
15 |
|||||||||||
|
Total |
1,437 |
1,187 |
1,330 |
1,261 |
|||||||||||
|
Refinery direct operating costs ($/barrel):(f) |
|||||||||||||||
|
Planned turnaround and major maintenance |
$ |
1.45 |
$ |
2.82 |
$ |
1.75 |
$ |
2.09 |
|||||||
|
Depreciation and amortization |
1.05 |
1.16 |
1.12 |
1.14 |
|||||||||||
|
Other manufacturing(g) |
3.55 |
3.94 |
3.74 |
3.70 |
|||||||||||
|
Total |
$ |
6.05 |
$ |
7.92 |
$ |
6.61 |
$ |
6.93 |
|||||||
|
Supplementary Statistics (Unaudited) (continued) |
Three Months Ended |
Twelve Months Ended | |||||||||||||
|
2017 |
2016 |
2017 |
2016 | ||||||||||||
|
R&M Operating Statistics by Region - Midwest |
|||||||||||||||
|
Refinery throughputs (mbpd):(h) |
|||||||||||||||
|
Crude oil refined |
679 |
686 |
695 |
660 |
|||||||||||
|
Other charge and blendstocks |
38 |
44 |
33 |
39 |
|||||||||||
|
Total |
717 |
730 |
728 |
699 |
|||||||||||
|
Sour crude oil throughput (percent) |
36 |
43 |
40 |
40 |
|||||||||||
|
WTI-priced crude oil throughput (percent) |
46 |
29 |
37 |
38 |
|||||||||||
|
Refined product yields (mbpd):(h) |
|||||||||||||||
|
Gasoline |
389 |
411 |
386 |
386 |
|||||||||||
|
Distillates |
239 |
244 |
236 |
218 |
|||||||||||
|
Propane |
12 |
12 |
11 |
11 |
|||||||||||
|
Feedstocks and special products |
27 |
20 |
42 |
35 |
|||||||||||
|
Heavy fuel oil |
13 |
10 |
13 |
12 |
|||||||||||
|
Asphalt |
45 |
42 |
46 |
43 |
|||||||||||
|
Total |
725 |
739 |
734 |
705 |
|||||||||||
|
Refinery direct operating costs ($/barrel):(f) |
|||||||||||||||
|
Planned turnaround and major maintenance |
$ |
2.25 |
$ |
0.84 |
$ |
1.48 |
$ |
1.15 |
|||||||
|
Depreciation and amortization |
1.86 |
1.81 |
1.81 |
1.88 |
|||||||||||
|
Other manufacturing(g) |
4.46 |
4.31 |
4.26 |
4.29 |
|||||||||||
|
Total |
$ |
8.57 |
$ |
6.96 |
$ |
7.55 |
$ |
7.32 |
|||||||
|
Speedway Operating Statistics(i) |
|||||||||||||||
|
Convenience stores at period-end |
2,744 |
2,733 |
|||||||||||||
|
Gasoline and distillate sales (millions of gallons) |
1,467 |
1,489 |
5,799 |
6,094 |
|||||||||||
|
Gasoline and distillate margin (dollars per gallon)(j) |
$ |
0.1772 |
$ |
0.1617 |
$ |
0.1738 |
$ |
0.1656 |
|||||||
|
Merchandise sales (in millions) |
$ |
1,200 |
$ |
1,230 |
$ |
4,893 |
$ |
5,007 |
|||||||
|
Merchandise margin (in millions) |
$ |
337 |
$ |
350 |
$ |
1,402 |
$ |
1,435 |
|||||||
|
Merchandise margin percent |
28.1 |
% |
28.4 |
% |
28.7 |
% |
28.7 |
% | |||||||
|
Same store gasoline sales volume (period over period) |
(0.3) |
% |
(2.4) |
% |
(1.3) |
% |
(0.4) |
% | |||||||
|
Same store merchandise sales (period over period)(k) |
0.5 |
% |
3.7 |
% |
1.2 |
% |
3.2 |
% | |||||||
|
Midstream Operating Statistics |
|||||||||||||||
|
Crude oil and refined product pipeline throughputs (mbpd)(l) |
3,610 |
2,930 |
3,377 |
2,948 |
|||||||||||
|
Terminal throughput (mbpd)(m) |
1,497 |
1,496 |
1,477 |
1,505 |
|||||||||||
|
Gathering system throughput (million cubic feet per day)(n) |
4,181 |
3,164 |
3,608 |
3,275 |
|||||||||||
|
Natural gas processed (million cubic feet per day)(n) |
6,828 |
5,970 |
6,460 |
5,761 |
|||||||||||
|
C2 (ethane) + NGLs fractionated (mbpd)(n) |
423 |
346 |
394 |
335 |
|||||||||||
|
(a) |
Total average daily volumes of refined product sales to wholesale, branded and retail customers. |
|
(b) |
Includes intersegment sales. |
|
(c) |
Excludes LCM inventory valuation adjustments. Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs. Comparable prior period information for R&M margin has been recast in connection with the contribution of certain pipeline assets to MPLX on March 1, 2017. |
|
(d) |
Based on calendar day capacity, which is an annual average that includes downtime for planned maintenance and other normal operating activities. |
|
(e) |
Excludes inter-refinery volumes of 88 mbpd and 90 mbpd for fourth quarter 2017 and 2016, respectively, and 78 mbpd and 83 mbpd for the full-year 2017 and 2016, respectively. |
|
(f) |
Per barrel of total refinery throughputs. |
|
(g) |
Includes utilities, labor, routine maintenance and other operating costs. |
|
(h) |
Includes inter-refinery transfer volumes. |
|
(i) |
Fourth quarter and year-to-date 2017 operating statistics do not reflect any information for the 41 travel centers contributed to PFJ Southeast, whereas they are reflected in the fourth quarter and year-to-date 2016 operating statistics. |
|
(j) |
Excludes LCM inventory valuation adjustments. The price paid by consumers less the cost of refined products, including transportation, consumer excise taxes and bankcard processing fees, divided by gasoline and distillate sales volumes. |
|
(k) |
Excludes cigarettes. |
|
(l) |
Includes common-carrier pipelines and private pipelines contributed to MPLX, excluding equity method investments. |
|
(m) |
Includes the results of the terminal assets beginning on April 1, 2016, the date the assets became a business. |
|
(n) |
Includes amounts related to unconsolidated equity method investments on a 100% basis. |
|
Segment Earnings Before Interest, Taxes, Depreciation & Amortization (Segment EBITDA) (Unaudited) | |||||||||||||||
|
Three Months Ended |
Twelve Months Ended | ||||||||||||||
|
(In millions) |
2017 |
2016 |
2017 |
2016 | |||||||||||
|
Segment EBITDA(a) |
|||||||||||||||
|
Refining & Marketing(b)(c) |
$ |
1,009 |
$ |
428 |
$ |
3,403 |
$ |
2,420 |
|||||||
|
Speedway(b) |
227 |
235 |
1,007 |
1,007 |
|||||||||||
|
Midstream(c) |
514 |
453 |
2,038 |
1,653 |
|||||||||||
|
Total Segment EBITDA(a)(b) |
1,750 |
1,116 |
6,448 |
5,080 |
|||||||||||
|
Total segment depreciation & amortization |
(526) |
(489) |
(2,056) |
(1,941) |
|||||||||||
|
Items not allocated to segments(c)(d) |
(105) |
(74) |
(423) |
(761) |
|||||||||||
|
Income from operations |
1,119 |
553 |
3,969 |
2,378 |
|||||||||||
|
Net interest and other financial income (costs) |
(160) |
(136) |
(625) |
(556) |
|||||||||||
|
Income before income taxes |
959 |
417 |
3,344 |
1,822 |
|||||||||||
|
(Benefit) provision for income taxes |
(1,166) |
128 |
(460) |
609 |
|||||||||||
|
Net income |
2,125 |
289 |
3,804 |
1,213 |
|||||||||||
|
Less net income (loss) attributable to: |
|||||||||||||||
|
Redeemable noncontrolling interest |
16 |
16 |
65 |
41 |
|||||||||||
|
Noncontrolling interests |
93 |
46 |
307 |
(2) |
|||||||||||
|
Net income attributable to MPC |
$ |
2,016 |
$ |
227 |
$ |
3,432 |
$ |
1,174 |
|||||||
|
(a) |
Segment EBITDA represents segment earnings before interest and financing costs, interest income, income taxes, depreciation and amortization expense. Segment EBITDA is a non-GAAP financial measure used by some investors and analysts to analyze and compare companies on the basis of operating performance. Segment EBITDA should not be considered as a substitute for, or superior to 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. Segment EBITDA may not be comparable to similarly titled measures reported by other companies. |
|
(b) |
The company reversed a $370 million lower of cost or market inventory valuation reserve due to increased refined product prices during the second quarter of 2016 resulting in a $370 million non-cash benefit to income from operations for the full-year 2016, which increased Refining & Marketing and Speedway segment results by $345 million and $25 million, respectively. |
|
(c) |
In the first quarter of 2017, segment reporting was revised in connection with the contribution of certain terminal, pipeline and storage assets to MPLX. The results related to these assets are now presented in the Midstream segment. Previously, these results were reported in the Refining & Marketing segment. The results for the pipeline and storage assets were recast effective Jan. 1, 2015, and the results for the terminal assets were recast effective April 1, 2016. Prior to these dates these assets were not considered businesses and therefore there are no financial results from which to recast segment results. |
|
(d) |
The three months ended Dec. 31, 2017, includes MPC's share of gains related to the sale of assets remaining from the Sandpiper pipeline project of $2 million, pension settlement expense of $50 million and a favorable litigation settlement of $57 million. Full-year 2017 includes charges for losses of $29 million related to litigation, pension settlement expenses of $52 million and MPC's share of gains related to the sale of assets remaining from the Sandpiper pipeline project of $23 million. Full-year 2016 includes pension settlement expenses of $7 million and impairment charges of $486 million. |
|
Select Financial Data (Unaudited) | |||||||
|
(In millions) |
December 31, |
September 30, | |||||
|
Cash and cash equivalents |
$ |
3,011 |
$ |
2,088 |
|||
|
MPLX debt |
6,946 |
6,849 |
|||||
|
Total consolidated debt |
12,946 |
12,782 |
|||||
|
Redeemable noncontrolling interest |
1,000 |
1,000 |
|||||
|
Equity |
20,828 |
19,802 |
|||||
|
Shares outstanding |
486 |
498 |
|||||
|
Cash provided from operations (quarter ended) |
$ |
2,746 |
$ |
1,901 |
|||
|
Reconciliation of Refining & Marketing Margin to Refining & Marketing Income from Operations | |||||||||||||||
|
Three Months Ended |
Twelve Months Ended | ||||||||||||||
|
(In millions) |
2017 |
2016 |
2017 |
2016 | |||||||||||
|
Refining & Marketing income from operations |
$ |
732 |
$ |
166 |
$ |
2,321 |
$ |
1,357 |
|||||||
|
Plus (Less): |
|||||||||||||||
|
Refinery direct operating costs(a) |
1,084 |
1,072 |
4,113 |
4,007 |
|||||||||||
|
Refinery depreciation and amortization |
258 |
247 |
1,013 |
994 |
|||||||||||
|
Other: |
|||||||||||||||
|
Operating expenses(a)(b) |
499 |
494 |
1,924 |
1,835 |
|||||||||||
|
Segment (income) expense, net(a) |
(149) |
(111) |
(499) |
(360) |
|||||||||||
|
Depreciation and amortization |
19 |
15 |
69 |
69 |
|||||||||||
|
Inventory market valuation adjustment |
— |
— |
— |
(345) |
|||||||||||
|
Refining & Marketing margin(c) |
$ |
2,443 |
$ |
1,883 |
$ |
8,941 |
$ |
7,557 |
|||||||
|
(a) |
Excludes depreciation and amortization. |
|
(b) |
Includes fees paid to MPLX for various midstream services, which includes marine and pipeline transportation and terminal and storage services, but excludes costs related to delivery of crude and feedstocks to our refineries. |
|
(c) |
Refining & Marketing margin is defined as sales revenue less cost of refinery inputs and purchased products, excluding any LCM inventory market adjustment. We believe this non-GAAP financial measure is useful to investors and analysts to assess our ongoing financial performance because, when reconciled to its most comparable GAAP measure, it provides 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. This measure 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. |
|
Reconciliation of Speedway Total Margin to Speedway Income from Operations | |||||||||||||||
|
Three Months Ended |
Twelve Months Ended | ||||||||||||||
|
(in millions) |
2017 |
2016 |
2017 |
2016 | |||||||||||
|
Speedway income from operations |
$ |
149 |
$ |
165 |
$ |
732 |
$ |
734 |
|||||||
|
Plus (Less): |
|||||||||||||||
|
Operating, selling, general and administrative expenses(a) |
399 |
383 |
1,530 |
1,554 |
|||||||||||
|
Depreciation and amortization(a) |
78 |
70 |
275 |
273 |
|||||||||||
|
Income from equity method investments |
(15) |
(5) |
(69) |
(5) |
|||||||||||
|
Net gain on disposal of assets |
(2) |
(5) |
(14) |
(30) |
|||||||||||
|
Other income(a) |
(5) |
(10) |
(14) |
(18) |
|||||||||||
|
Inventory market valuation adjustment |
— |
— |
— |
(25) |
|||||||||||
|
Speedway total margin |
$ |
604 |
$ |
598 |
$ |
2,440 |
$ |
2,483 |
|||||||
|
Speedway total margin:(a)(b) |
|||||||||||||||
|
Gasoline and distillate margin |
$ |
260 |
$ |
241 |
$ |
1,008 |
$ |
1,009 |
|||||||
|
Merchandise margin |
337 |
350 |
1,402 |
1,435 |
|||||||||||
|
Other margin |
7 |
7 |
30 |
39 |
|||||||||||
|
Speedway total margin |
$ |
604 |
$ |
598 |
$ |
2,440 |
$ |
2,483 |
|||||||
|
(a) |
Fourth-quarter and year-to-date 2017 margin and expenses do not reflect any results from the 41 travel centers contributed to PFJ Southeast, whereas they are reflected in the fourth-quarter and year-to-date 2016 information. Our share of the net results from the joint venture is reflected in income from equity method investments. |
|
(b) |
Speedway gasoline and distillate margin is defined as the price paid by consumers less the cost of refined products, including transportation, consumer excise taxes and bankcard processing fees and excluding any LCM inventory market adjustment. Speedway merchandise margin is defined as the price paid by consumers less the cost of merchandise. We believe these non-GAAP financial measures are useful to investors and analysts to assess our ongoing financial performance because, when reconciled to the most comparable GAAP 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. |
View original content with multimedia:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-reports-fourth-quarter-and-full-year-2017-results-300591817.html
SOURCE Marathon Petroleum Corporation
Article Date
2/1/2018Marathon Petroleum Corp. and MPLX LP closing on strategic transactions
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
FINDLAY, Ohio, Feb. 1, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) and MPLX LP (NYSE: MPLX) today are closing on the final transactions to complete the previously announced strategic actions.
MPC is contributing refining logistics assets and fuels distribution services to MPLX that are projected to generate approximately $1 billion in annual earnings before interest, taxes, depreciation and amortization (EBITDA) for total consideration of $8.1 billion consisting of $4.1 billion in cash and approximately 114 million newly issued MPLX units valued at $4 billion as of the announcement date. MPLX is financing the cash portion of the transaction with its $4.1 billion 364-day term loan facility, which was entered into on Jan. 2, 2018.
Immediately following the dropdown, MPC is exchanging its general partner (GP) economic interests in MPLX, including incentive distribution rights (IDRs), for 275 million newly issued MPLX common (LP) units valued at $10.1 billion as of the announcement date. MPC will continue to control MPLX through its ownership of the non-economic GP interest in MPLX and will own approximately 64 percent of the outstanding MPLX common units.
"We are very pleased to complete these transformative transactions for both MPC and MPLX," said Gary R. Heminger, chairman and chief executive officer of both MPC and MPLX. "The conversion of MPC's GP economic interests in MPLX into LP units provides a clear valuation for MPC's interests. This, combined with the elimination of the IDR burden on the partnership, creates mutual benefits and positions MPLX extraordinarily well to deliver long-term sustainable growth for all of its unitholders, including MPC."
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the transportation, storage and distribution of crude oil and refined petroleum products through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipelines and supporting assets, including storage facilities (tank farms) located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. Following today's dropdown, MPLX will provide fuels distribution services to MPC and own refining logistics assets consisting of tanks with storage capacity of approximately 56 million barrels as well as refinery docks, loading racks and associated piping.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws regarding Marathon Petroleum Corporation ("MPC") and MPLX LP ("MPLX"). These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the business and operations of MPC and MPLX, including strategic initiatives and our value creation plans. You can identify forward-looking statements by words such as "anticipate," "believe," "design," "estimate," "expect," "forecast," "goal," "guidance," "imply," "intend," "objective," "opportunity," "outlook," "plan," "position," "pursue," "prospective," "predict," "project," "potential," "seek," "strategy," "target," "could," "may," "should," "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 companies' 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: the ability to consummate the strategic initiatives discussed herein; our ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein; our ability to manage disruptions in credit markets or changes to our credit rating; adverse changes in laws including with respect to tax and regulatory matters; continued/further volatility in and/or degradation of market and industry conditions; the impact of adverse market conditions affecting MPC's and MPLX's midstream businesses; modifications to MPLX earnings and distribution growth objectives, and other risks described below with respect to MPLX; changes to MPC's capital budget; other risk factors inherent to MPC's industry; 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, 2016, filed with Securities and Exchange Commission (SEC). Factors that could cause MPLX's actual results to differ materially from those implied in the forward-looking statements include: negative capital market conditions, including an increase of the current yield on common units, adversely affecting MPLX's ability to meet its distribution growth guidance; the ability to consummate the strategic initiatives discussed herein; our ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein; adverse changes in laws including with respect to tax and regulatory matters; the adequacy of MPLX's capital resources and liquidity, including, but not limited to, availability of sufficient cash flow to pay distributions and access to debt to fund anticipated dropdowns on commercially reasonable terms, and the ability to successfully execute its business plans and growth strategy; the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products; continued/further volatility in and/or degradation of market and industry conditions; changes to the expected construction costs and timing of projects; completion of midstream infrastructure by competitors; the suspension, reduction or termination of MPC's obligations under MPLX's commercial agreements; modifications to earnings and distribution growth objectives; changes to MPLX's capital budget; other risk factors inherent to MPLX's industry; and the factors set forth under the heading "Risk Factors" in MPLX's Annual Report on Form 10-K for the year ended Dec. 31, 2016, filed with the SEC. In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here, in MPC's Form 10-K or in MPLX's Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPC's Form 10-K are available on the SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office. Copies of MPLX's Form 10-K are available on the SEC website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office.
Non-GAAP Financial Measures
The EBITDA forecasts were determined on an EBITDA-only basis. Accordingly, information related to the elements of net income, including tax and interest, are not available and, therefore, reconciliations of these non-GAAP financial measures to the nearest GAAP financial measures have not been provided.
View original content with multimedia:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-and-mplx-lp-closing-on-strategic-transactions-300591814.html
SOURCE Marathon Petroleum Corporation; MPLX LP
Article Date
2/1/2018Marathon Petroleum Corp. announces 2018 annual meeting of shareholders
Source: PR Newswire
FINDLAY, Ohio, Jan. 29, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) announced today that its annual meeting of shareholders will take place at the company's headquarters in Findlay, Ohio, April 25, 2018, at 10 a.m. EDT.
In addition, the company announced that Feb. 26, 2018, has been fixed as the record date for determination of the shareholders of the company entitled to notice of, and to vote at, the annual meeting.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-announces-2018-annual-meeting-of-shareholders-300589278.html
SOURCE Marathon Petroleum Corporation
Article Date
1/29/20181/29/2018 - Marathon Petroleum Corp. increases dividend
Marathon Petroleum Corp. increases dividend
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
FINDLAY, Ohio, Jan. 29, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) announced today that its board of directors declared a dividend of $0.46 per share on common stock. The dividend is payable March 12, 2018, to shareholders of record as of the close of business Feb. 21, 2018.
"The $0.46 dividend approved by our Board represents a 15 percent increase to our regular dividend under an accelerated timeline," said Gary R. Heminger, chairman and chief executive officer. "As we near the closing of the final phase of the strategic actions undertaken in 2017, we remain highly confident in the long-term cash generation of the business, further supported by the reduced cash burden resulting from tax reform."
Since becoming an independent company in June 2011, MPC has increased its regular quarterly dividend at a 26.5 percent compound annual growth rate. This strong growing base dividend, along with MPC's substantial share repurchases, have combined to return over $13 billion of capital to the company's shareholders over this time period. "We have balanced our return of capital to shareholders with continued long-term investment in the business," said Heminger. "Achieving this balance and maintaining an investment grade credit profile are fundamental elements of MPC's capital-allocation strategy and drive the value proposition for our investors."
On Feb. 1, MPC will provide an update on its 2017 fourth-quarter and full-year results through an earnings release, to be followed by a conference call scheduled for 9 a.m. EST that day. Interested parties may listen to the conference call by dialing 1-888-989-4720 (confirmation number 4852094) or by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2017 Fourth-Quarter and Full-Year Financial Results" link.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
View original content:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-increases-dividend-300589281.html
SOURCE Marathon Petroleum Corporation
Article Date
1/29/2018Marathon Petroleum Corporation announces senior leadership appointments
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
FINDLAY, Ohio, Jan. 23, 2018 /PRNewswire/ -- Marathon Petroleum Corporation (NYSE: MPC) today announced the appointments of Brian K. Partee, currently director of Business Development, to vice president of Business Development, and Rick Linhardt, currently director of Tax, to vice president of Tax. Both positions are effective Feb. 1, 2018. Partee will report to Donald C. Templin, president of MPC, and Michael J. Hennigan, president of the general partner of MPLX LP (NYSE: MPLX), the master limited partnership sponsored by MPC. Linhardt will report to Timothy T. Griffith, senior vice president and chief financial officer of MPC. Both Partee and Linhardt will remain in Findlay.
Partee joined MPC in 1995 as an accountant in Marathon Pipe Line. He progressed through increasingly responsible positions before being named territory manager in the Wholesale Marketing southern region in 2004, district sales manager in 2006 and coordinating manager in 2008. In 2009, Partee was named commercial director for Speedway. In 2012, he was named vice president, Business Development and Franchise at Speedway. He served as MPC's manager of crude oil logistics and analysis beginning in 2014 and assumed his current role in January 2017. Partee holds a bachelor's degree in accounting from Bowling Green State University and an MBA from the University of Findlay.
Linhardt joined MPC in 2013 as manager of Tax Compliance with responsibility for the company's income tax, sales/use tax, property tax, trade and customs tax and motor fuels tax. He was named director of Tax in 2017. Linhardt has 30 years of tax experience in public accounting and the oil and gas industry, including an assignment as the head of the tax department at RRI Energy Inc., where he was instrumental in its merger with NRG Energy. He earned a bachelor's degree in accounting from the University of Kansas, and has been a certified public accountant since 1986.
"We are delighted to welcome Brian and Rick to our executive leadership team," said Gary R. Heminger, chairman and chief executive officer of MPC. "They both have a wealth of experience and knowledge that will benefit our Business Development and Tax organizations."
The respective organizations led by Partee and Linhardt also provide services for MPLX.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,740 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8.2 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
View original content with multimedia:http://www.prnewswire.com/news-releases/marathon-petroleum-corporation-announces-senior-leadership-appointments-300586647.html
SOURCE Marathon Petroleum Corporation
Article Date
1/23/2018MPLX LP to announce 2017 fourth-quarter and full-year financial results Feb. 1
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
FINDLAY, Ohio, Jan. 8, 2018 /PRNewswire/ -- MPLX LP (NYSE: MPLX) a master limited partnership sponsored by Marathon Petroleum Corp. (NYSE: MPC), will host a conference call Thursday, Feb. 1, 2018, at 11 a.m. EST to discuss 2017 fourth-quarter and full-year financial results, which will be released earlier that day, and to provide an update on partnership operations.
MPLX participants will be Gary R. Heminger, chairman and chief executive officer; Michael J. Hennigan, president; Pamela K.M. Beall, executive vice president and chief financial officer; and other senior executives. The call will be hosted by Lisa Wilson, director of Investor Relations.
Interested parties may listen to the conference call by dialing (888) 606-5719 (confirmation number 6033306) or by visiting MPLX's website at http://www.mplx.com and clicking on the "2017 Fourth-Quarter and Full-Year Financial Results" link in the "News & Headlines" section. Financial information, including the earnings release and other investor-related material, also will be available online. Replays of the conference call will be available on the partnership's website through Thursday, Feb. 15.
About MPLX LP
MPLX is a diversified, growth-oriented master limited partnership formed in 2012 by Marathon Petroleum Corporation to own, operate, develop and acquire midstream energy infrastructure assets. We are engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the transportation, storage and distribution of crude oil and refined petroleum products through a marine fleet and approximately 10,000 miles of crude oil and light product pipelines. Headquartered in Findlay, Ohio, MPLX's assets consist of a network of crude oil and products pipeline assets located in the Midwest and Gulf Coast regions of the United States; 62 light-product terminals with approximately 24 million barrels of storage capacity; an inland marine business; storage caverns with approximately 2.8 million barrels of storage capacity; crude oil and product storage facilities (tank farms) with approximately 5 million barrels of available storage capacity; a barge dock facility with approximately 78,000 barrels per day of crude oil and product throughput capacity; and gathering and processing assets that include approximately 5.9 billion cubic feet per day of gathering capacity, 8 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity.
View original content with multimedia:http://www.prnewswire.com/news-releases/mplx-lp-to-announce-2017-fourth-quarter-and-full-year-financial-results-feb-1-300579186.html
SOURCE Marathon Petroleum Corporation
Article Date
1/8/20181/8/2018 - Marathon Petroleum Corp. to announce 2017 fourth-quarter and full-year financial results Feb. 1
Marathon Petroleum Corp. to announce 2017 fourth-quarter and full-year financial results Feb. 1
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
FINDLAY, Ohio, Jan. 8, 2018 /PRNewswire/ -- Marathon Petroleum Corp. (NYSE: MPC) will host a conference call Thursday, Feb. 1, 2018, at 9 a.m. EST to discuss 2017 fourth-quarter and full-year financial results, which will be released earlier that day, and to provide an update on company operations.
Participants will be Gary R. Heminger, chairman and chief executive officer; Don Templin, president; Tim Griffith, senior vice president and chief financial officer; Michael J. Hennigan, president of the general partner of MPLX LP (NYSE: MPLX), the master limited partnership sponsored by MPC; and other senior executives. The call will be hosted by Lisa Wilson, director of Investor Relations.
Interested parties may listen to the conference call by dialing (888) 989-4720 (confirmation number 4852094) or by visiting MPC's website at http://www.marathonpetroleum.com and clicking on the "2017 Fourth-Quarter and Full-Year Financial Results" link. Replays of the conference call will be available on the company's website through Thursday, Feb. 15. Financial information, including the earnings release and other investor-related material, also will be available online.
About Marathon Petroleum Corporation
MPC is the nation's second-largest refiner, with a crude oil refining capacity of approximately 1.9 million barrels per calendar day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,600 independently owned retail outlets across 20 states and the District of Columbia. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's second-largest convenience store chain, with approximately 2,730 convenience stores in 21 states. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. Primarily through MPLX, MPC owns, leases or has ownership interests in approximately 10,800 miles of crude oil and light product pipelines. Also through MPLX, MPC has ownership interests in gathering and processing facilities with approximately 5.9 billion cubic feet per day of gathering capacity, 8 billion cubic feet per day of natural gas processing capacity and 610,000 barrels per day of fractionation capacity. MPC's fully integrated system provides operational flexibility to move crude oil, NGLs, feedstocks and petroleum-related products efficiently through the company's distribution network and midstream service businesses in the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions.
View original content with multimedia:http://www.prnewswire.com/news-releases/marathon-petroleum-corp-to-announce-2017-fourth-quarter-and-full-year-financial-results-feb-1-300579196.html
SOURCE Marathon Petroleum Corporation
Article Date
1/8/2018Alerian Announces Real-Time Launch of the Alerian Energy Infrastructure Capital Strength Select Index
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
DALLAS, Jan. 3, 2018 /PRNewswire/ -- Alerian announced today the real-time launch of the Alerian Energy Infrastructure Capital Strength Select Index, a composite of North American midstream, refining, and utility companies chosen for their ownership of pipeline transportation assets, leverage profile, and above-market dividend payments. The index is disseminated real-time on a price-return basis (AMCS) and on a total-return basis (AMCST).
"The AMCS was designed with the understanding that the portion of the North American energy value chain from midstream to distribution has become increasingly integrated," said Alerian President and CEO Kenny Feng. "The composition of this index also seeks to address growing investor focus on strengthening balance sheets and improving corporate governance."
Constituents as of January 2, 2018
|
Name |
Ticker |
|
AltaGas Ltd |
ALA |
|
Antero Midstream Partners LP |
AM |
|
Andeavor |
ANDV |
|
Buckeye Partners LP |
BPL |
|
Boardwalk Pipeline Partners LP |
BWP |
|
CenterPoint Energy Inc |
CNP |
|
Cheniere Energy Partners LP Holdings LLC |
CQH |
|
Dominion Energy Inc |
D |
|
Enbridge Inc |
ENB |
|
EnLink Midstream LLC |
ENLC |
|
Enterprise Products Partners LP |
EPD |
|
EQT GP Holdings LP |
EQGP |
|
Gibson Energy Inc |
GEI |
|
HollyFrontier Corp |
HFC |
|
Inter Pipeline Ltd |
IPL |
|
Keyera Corp |
KEY |
|
Kinder Morgan Inc |
KMI |
|
Macquarie Infrastructure Corp |
MIC |
|
Magellan Midstream Partners LP |
MMP |
|
Marathon Petroleum Corp |
MPC |
|
OGE Energy Corp |
OGE |
|
ONEOK Inc |
OKE |
|
Plains GP Holdings LP |
PAGP |
|
Pembina Pipeline Corp |
PPL |
|
Phillips 66 |
PSX |
|
Sempra Energy |
SRE |
|
Tallgrass Energy GP LP |
TEGP |
|
TransCanada Corp |
TRP |
|
Valero Energy Corp |
VLO |
|
Western Gas Equity Partners LP |
WGP |
|
The Williams Companies Inc |
WMB |
About Alerian
Alerian equips investors to make informed decisions about Master Limited Partnerships (MLPs) and energy infrastructure. Its benchmarks, including the flagship Alerian MLP Index (AMZ), are widely used by industry executives, investment professionals, research analysts, and national media to analyze relative performance. As of December 31, 2017, over $16 billion is directly tied to the Alerian Index Series through exchange-traded funds and notes, separately managed accounts, and structured products. For more information, including index values and constituents, research content, and announcements regarding rebalancings, please visit alerian.com.
View original content:http://www.prnewswire.com/news-releases/alerian-announces-real-time-launch-of-the-alerian-energy-infrastructure-capital-strength-select-index-300576838.html
SOURCE Alerian
Article Date
1/3/2018John Fox, Co-Founder Of Markwest Hydrocarbon, Issues New Letter to The Board Of Directors Of MPLX Concerning Unprecedented IDR Elimination Valuation
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
DENVER, Dec. 19, 2017 /PRNewswire/ -- John M. Fox today released the following open letter to the board of directors of MPLX responding to Marathon Petroleum Corporation's announcement to demand over $10 billion for its GP economic interest in MPLX.
The full text of the letter follows:
December 19, 2017
Board of Directors
MPLX LP
200 East Hardin Street
FINDLAY, OH 45840-3229
Attention: The Board of Directors of MPLX GP
Dear Gary,
As you have seen from my letter to you and the MPC board yesterday the price contemplated for MPLX's purchase of MPC's IDRs (incentive Distribution Rights) is extraordinarily excessive. As Chairman of MPLX's General Partner it is incumbent on you to ensure that the Conflicts Committee reviewing and approving the proposed IDR take-out transaction act in good faith and "subjectively believe that the determination . . . is not adverse to the best interests of the Partnership Group". The words in quotes are from the Third Amended and Restated Agreement of Limited Partnership of MPLX LP dated as of October 31, 2016 (as amended) and it appears to me that the proposed transaction value is adverse to the best interests of the Partnership Group in that the Partnership Group is paying an unjustified price to eliminate the GP IDR interest, diluting all unitholders. Moreover, I believe the price agreed to by MPLX would not be one agreed to by truly independent directors.
Therefore, I sincerely hope your press release dated December 15, 2017 does not represent the final deal terms. As I outlined in my letter to you on December 5, 2017, any multiple in excess of 14x is both well above the precedent set by the market, and will destroy value for both MPLX and MPC. With a 4.8% single-day decline in the value of MPLX units after your announcement of the transaction, it is clear that investors are voting with their feet.
MPLX is being asked to pay for the MPC IDRs with 275,000,000 new units which is equivalent to 17 times the value of the IDRs being purchased. With approximately 800,000,000 outstanding units following the issuance of these new units, I estimate pro forma distributions will equate to $2.40 per unit. However, without the IDR elimination, I estimate you would be distributing $2.50 - $2.55 per unit. How, then, can the IDR elimination be considered accretive to MPLX as you indicate in your press release?
By MPC insisting on 275,000,000 units of MPLX rather than a more justifiable number of 215,000,000 units you, in effect, cripple MPLX and its value creating potential for MPC. Where is the logic in doing that?
I support MPC's decision to eliminate the IDRs and MPLX's desire to purchase the IDR burden, but it must be done at a multiple which will actually create long-term value for MPLX and its unitholders, MPC included. I urge MPLX to reconsider the inflated multiple it is paying for the IDRs so that it do not lose an opportunity to create real value for its unit holders.
It is not too late to do the right thing!
Sincerely,
John Fox
About John M. Fox
John Fox is the co-founder of MarkWest Hydrocarbon, former CEO, Chairman and Director of MarkWest Energy GP, L.L.C. ("MarkWest GP"), which was the general partner of MarkWest Energy Partners, L.P. ("MarkWest"), and beneficial owner of 1,544,172 MPLX common units, and 20,900 shares of Marathon Petroleum Company, through its merger with MarkWest in 2015 and from follow-on investments. Mr. Fox worked to eliminate the Incentive Distribution Rights (IDRs) at MarkWest in 2007, creating tremendous value that ultimately led to the successful acquisition of MWE by MPLX in 2015. MarkWest generated a 143.3% total return and grew from a $1.2 billion market cap to an $8.6 billion market cap for the period of September 5, 2007, when the IDRs were eliminated, to December 4, 2015.
Disclosure:
John Fox is providing this material for general informational purposes only. None of the information provided herein is intended to be relied upon as investment advice. The opinions expressed in this letter are those of Mr. Fox as of December 19, 2017 and are subject to change at any time due to changes in market, economic conditions, or new public information. These opinions are Mr. Fox's alone, and do not reflect the opinions of any other member of the Fox family. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Mr. Fox to be reliable and are not necessarily all-inclusive. Mr. Fox does not guarantee the accuracy or completeness of this information. There is no guarantee that any forecasts made by any party will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
More information can be found at www.itjustmakessensegary.com.
Contact:
John Fox
Johnfox@itjustmakessensegary.com
720-213-6439
www.itjustmakessensegary.com
View original content:SOURCE John M. Fox
Article Date
12/19/2017John Fox, Co-Founder Of MarkWest Hydrocarbon, Issues Response To The Board Of Directors Of Marathon Petroleum Corporation Concerning Unprecedented IDR Elimination Valuation
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
DENVER, Dec. 18, 2017 /PRNewswire/ -- John M. Fox today released the following open letter to the board of directors of Marathon Petroleum Corporation (MPC) responding to management's announcement to demand over $10 billion for its GP economic interest in MPLX.
The full text of the letter follows:
December 18, 2017
Board of Directors
Marathon Petroleum Corporation
539 S Main St
FINDLAY, OH 45840-3229
Attention: Gary Heminger, Chairman, President and Chief Executive Officer
To the Board of Directors of Marathon Petroleum Corporation:
I was frustrated to see Marathon Petroleum Corporation's Board of Directors continues to push an unjustified inflated price for its Incentive Distribution Right (IDR) burden on MPLX. Therefore, I sincerely hope your press release dated December 15, 2017 does not represent the final deal terms. As I outlined in my letter to you on December 5, 2017, any multiple in excess of 14x is both well above the precedent set by the market, and will destroy value for both MPLX and MPC. With a 4.8% single-day decline in the value of MPLX units after your announcement of the transaction, it is clear that investors are voting with their feet.
Based on the volume-weighted average price of MPLX over the past 10 days which MPC's management is using to value the newly issued MPLX common (LP) units, the IDR elimination will be executed at a multiple of 17x the pro forma value of the GP's IDRs. Given expectations of available Distributable Cashflow to the LP for 2018 of $1.9 billion and approximately 796 million outstanding units following the issuance of your 275 million new units as part of the elimination, pro forma distributions will equate to $2.40 per unit. However, if you didn't do the IDR elimination, I estimate you would be distributing $2.50 - $2.55 per unit. How, then, can the IDR elimination be considered accretive as you indicate in your press release?
Over the past 13 days since my last letter, I have had an overwhelming response from many large institutional holders of MPC and MPLX that share my concern over the valuation. Your more than $10 billion valuation announced on Friday is destructive not only to MPLX but also to MPC who would own two thirds of MPLX if this gets done on these terms!
Gary, you and others have emphasized that a significant part of your effort to create value for MPC shareholders is to enhance the value of your ownership of MPLX where MPC is the largest unit holder. Yet by insisting on a value-destroying multiple from MPLX you are in effect shooting MPLX in the foot!
By insisting on 275,000,000 units of MPLX rather than a more justifiable number of 215,000,000 units you, in effect, cripple MPLX and its value creating potential for MPC. Where is the logic in doing that?
I support MPC's decision to eliminate the IDRs, but it must be done at a multiple which will actually create long-term value for MPLX and its unitholders, MPC included. I urge you to reconsider the inflated multiple you have set to this deal so that you do not lose an opportunity to create real value for MPLX.
It is not too late to do the right thing!
Sincerely,
John Fox
About John M. Fox
John Fox is the co-founder of MarkWest Hydrocarbon, former CEO, Chairman and Director of MarkWest Energy GP, L.L.C. ("MarkWest GP"), which was the general partner of MarkWest Energy Partners, L.P. ("MarkWest"), and beneficial owner of 1,544,172 MPLX common units, and 20,900 shares of Marathon Petroleum Company, through its merger with MarkWest in 2015 and from follow-on investments. Mr. Fox worked to eliminate the Incentive Distribution Rights (IDRs) at MarkWest in 2007, creating tremendous value that ultimately led to the successful acquisition of MWE by MPLX in 2015. MarkWest generated a 143.3% total return and grew from a $1.2 billion market cap to an $8.6 billion market cap for the period of September 5, 2007, when the IDRs were eliminated, to December 4, 2015.
Disclosure:
John Fox is providing this material for general informational purposes only. None of the information provided herein is intended to be relied upon as investment advice. The opinions expressed in this letter are those of Mr. Fox as of December 18, 2017 and are subject to change at any time due to changes in market, economic conditions, or new public information. These opinions are Mr. Fox's alone, and do not reflect the opinions of any other member of the Fox family. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Mr. Fox to be reliable and are not necessarily all-inclusive. Mr. Fox does not guarantee the accuracy or completeness of this information. There is no guarantee that any forecasts made by any party will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
More information can be found at www.itjustmakessensegary.com.
Contact:
John Fox
Johnfox@itjustmakessensegary.com
720-213-6439
www.itjustmakessensegary.com
View original content:SOURCE John M. Fox
Article Date
12/18/2017John Fox, Co-Founder Of Markwest Hydrocarbon, Issues Open Letter To The Board Of Directors Of Marathon Petroleum Corporation Concerning Valuation and MPC's Proposed November 13 Plan to Exchange its General Partner Interests, Including its IDRs, at an Inflated Multiple
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
DENVER, Dec. 5, 2017 /PRNewswire/ -- John M. Fox, beneficial owner of 1,544,172 MPLX common units and 20,900 shares of Marathon Petroleum Company, today released the following open letter to the board of directors of Marathon Petroleum Corporation (MPC) outlining how valuation of the proposed IDR elimination is the key to generating long-term MPC and MPLX value for holders.
Please see disclosures at the end of this release. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Mr. Fox to be reliable and are not necessarily comprehensive. Mr. Fox does not guarantee the accuracy or completeness of this information. There is no guarantee that any forecasts made by any party will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
A new slide deck highlighting key points on growth and valuation implications can be found at www.itjustmakessensegary.com.
The full text of the letter follows:
December 5, 2017
Board of Directors
Marathon Petroleum Corporation
539 S Main St
FINDLAY, OH 45840-3229
Attention: Gary Heminger, Chairman, President and Chief Executive Officer
To the Board of Directors of Marathon Petroleum Corporation:
I support Marathon Petroleum Corporation's (MPC) decision to eliminate the Incentive Distribution Right (IDRs) burden on MPLX and am aligned with you to ensure the best possible path forward. However, I strongly disagree on the valuation MPC management is placing on MPLX's GP. As MPLX's largest holder, I am concerned that such a valuation will destroy long-term value for both MPLX and MPC. MPC management estimates the IDR Elimination will transact between 15x-20x the pro forma value of the GP's IDRS. This valuation is unjustified compared to established benchmarks for this type of transaction. It is really very simple, every new share that MPLX issues as a result of an inflated IDR valuation puts pressure on current distribution and future growth potential.
Based on recent transactions including Plains All American Pipeline (11.6X), Andeavor Logistics (13.1X), and HollyFrontier (14.1X), there is a clear precedent for a 12x-14x multiple. Additionally, based on my analysis, at any valuation above 13.7x, pro forma MPLX distributions will need to be cut and value destroyed as the additional shares to MPC will strain returns on equity and the associated growth rates.
Based on my experience and countless hours my team and I spent at MarkWest analyzing the many disincentives associated with the IDRs, I know first-hand the drag that can be caused by the IDR structure. As a result, I strongly support Marathon Petroleum Corporation's commitment to exchange its IDRs for LP units in MPLX. However, the valuation of the IDR transaction has material impacts on MPC's long-term value, and could vastly diminish growth prospects at MPLX ultimately raising the cost of capital and destroying value for both companies.
As MPC will remain MPLX's largest long-term holder, it is imperative to approach valuation of the IDR elimination with value creation in mind. MPLX has meaningful organic growth potential that will drive growth for MPLX and MPC. I urge you to revise your valuation estimates for the IDR elimination to 12x – 14x, creating a clear path to long-term value growth for MPLX. It just makes sense!
Sincerely,
John Fox
About John M. Fox
John Fox is the co-founder of MarkWest Hydrocarbon, former CEO, Chairman and Director of MarkWest Energy GP, L.L.C. ("MarkWest GP"), which was the general partner of MarkWest Energy Partners, L.P. ("MarkWest"), and beneficial owner of 1,544,172 MPLX common units, and 20,900 shares of Marathon Petroleum Company, through its merger with MarkWest in 2015 and from follow-on investments. Mr. Fox worked to eliminate the Incentive Distribution Rights (IDRs) at MarkWest in 2007, creating tremendous value that ultimately led to the successful acquisition of MWE by MPLX in 2015. MarkWest generated a 143.3% total return and grew from a $1.2 billion market cap to an $8.6 billion market cap for the period of September 5, 2007, when the IDRs were eliminated, to December 4, 2015.
Disclosure:
John Fox is providing this material for general informational purposes only. None of the information provided herein is intended to be relied upon as investment advice. The opinions expressed in this letter are those of Mr. Fox as of December 5, 2017 and are subject to change at any time due to changes in market, economic conditions, or new public information. These opinions are Mr. Fox's alone, and do not reflect the opinions of any other member of the Fox family. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Mr. Fox to be reliable and are not necessarily all-inclusive. Mr. Fox does not guarantee the accuracy or completeness of this information. There is no guarantee that any forecasts made by any party will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
Contact:
John Fox
Johnfox@itjustmakessensegary.com
720-213-6439
www.itjustmakessensegary.com
SOURCE John M. Fox
Article Date
12/5/2017John Fox, Co-Founder of Markwest Hydrocarbon, Issues Open Letter To The MPLX GP Conflicts Committee Concerning MPC's Proposed November 13 Plan to Exchange Its General Partner Interests, Including Its IDRs, at an Inflated Multiple
Source: PR Newswire
Orignial Article: https://www.prnewswire.co...
DENVER, Dec. 5, 2017 /PRNewswire/ -- John M. Fox, beneficial owner of 1,544,172 MPLX common units, and 20,900 shares of Marathon Petroleum Company, today released the following open letter to the board of directors of Marathon Petroleum Corporation (MPC) outlining how valuation of the proposed IDR elimination is the key to generating long-term MPC and MPLX value for holders.
Please see disclosures at the end of this release. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Mr. Fox to be reliable and are not necessarily comprehensive. Mr. Fox does not guarantee the accuracy or completeness of this information. There is no guarantee that any forecasts made by any party will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
A new slide deck highlighting key points on growth and valuation implications can be found at www.itjustmakessensegary.com.
The full text of the letter follows:
December 5, 2017
MPLX GP LLC Conflicts Committee
MPLX LP
200 East Hardin Street
FINDLAY, OH 45840-3229
Attention: Christopher Helms, Chairman, MPLX GP LLC Conflicts Committee, and Members of the Committee Michael Beatty, Dan Sandman, and C. Richard Wilson
To the MPLX GP LLC Conflicts Committee:
I support Marathon Petroleum Corporation's (MPC) decision to eliminate the Incentive Distribution Rights (IDRs) burden on MPLX. It is my belief, however, that MPC's stated target of a 15x – 20x multiple for the elimination of pro forma IDRs is in direct opposition to the interests of the unitholders of MPLX and will ultimately damage both MPC (the largest holder of units) and MPLX in the long-run. It is the responsibility of the MPLX GP Conflicts Committee to recommend to Marathon's Board of Directors a fair and transparent multiple before agreeing to a transaction.
Based on my experience and countless hours my team and I spent at MarkWest analyzing the many disincentives associated with the IDRs, I know first-hand the drag that can be caused by the IDR structure. As a result, I strongly support MPC's commitment to exchange its IDRs for LP units in MPLX. However, the valuation of the IDR transaction has material impact on MPLX's cost of capital and growth prospects, ultimately destroying long-term value for both companies.
MPC management's consistent messaging toward an IDR transaction range of 15x-20x is far above established levels for this type of deal. Based on recent transactions including Plains All American Pipeline (11.6X), Andeavor Logistics (13.1X), and HollyFrontier (14.1X), there is a clear precedent for a 12x-14x multiple. Additionally, based on my analysis, at any valuation above 13.7x, pro forma MPLX future distributions will need to be cut and value destroyed.
As MPC will remain MPLX's largest long-term holder, it is imperative to approach valuation of the IDR elimination with value creation in mind. MPLX has meaningful organic growth potential that will drive growth for MPLX and MPC if this deal is done right. I urge you to not to agree to this transaction at an unjustified multiple, and to ensure that the transaction is completed at a price that is fair and reasonable to the Partnership.
Sincerely,
John Fox
About John M. Fox
John Fox is the co-founder of MarkWest Hydrocarbon, former CEO, Chairman and Director of MarkWest Energy GP, L.L.C. ("MarkWest GP"), which was the general partner of MarkWest Energy Partners, L.P. ("MarkWest"), and beneficial owner of 1,544,172 MPLX common units, and 20,900 shares of Marathon Petroleum Company, through its merger with MarkWest in 2015 and from follow-on investments. Mr. Fox worked to eliminate the Incentive Distribution Rights (IDRs) at MarkWest in 2007, creating tremendous value that ultimately led to the successful acquisition of MWE by MPLX in 2015. MarkWest generated a 143.3% total return and grew from a $1.2 billion market cap to an $8.6 billion market cap for the period of September 5, 2007, when the IDRs were eliminated, to December 4, 2015.
Disclosure:
John Fox is providing this material for general informational purposes only. None of the information provided herein is intended to be relied upon as investment advice. The opinions expressed in this letter are those of Mr. Fox as of December 5, 2017 and are subject to change at any time due to changes in market, economic conditions, or new public information. These opinions are Mr. Fox's alone, and do not reflect the opinions of any other member of the Fox family. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Mr. Fox to be reliable and are not necessarily all-inclusive. Mr. Fox does not guarantee the accuracy or completeness of this information. There is no guarantee that any forecasts made by any party will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
Contact:
John Fox
Johnfox@itjustmakessensegary.com
720-213-6439
www.itjustmakessensegary.com
SOURCE John M. Fox
Article Date
12/5/2017John Fox, Co-Founder Of MarkWest Hydrocarbon, Reaffirms Stance Against Marathon Petroleum Corporation's Proposed January 3, 2017 Plan And Offers Additional Support For A Growth Plan That Provides Immediate Uplift In Value For MPC Shareholders
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DENVER, Jan. 30, 2017 /PRNewswire/ -- John M. Fox, beneficial owner of 1,542,072 MPLX common units, and 20,900 shares of Marathon Petroleum Company, today reaffirms his stance against Marathon Petroleum Corporation's proposed January 3, 2017 plan and offers additional support for a plan that provides immediate uplift in value for MPC shareholders.
A new slide deck highlighting key points on growth and valuation implications can be found at www.itjustmakessensegary.com.
John Fox commented, "The engagement that I have had with investors, analysts and other stakeholders since my open letter to management on January 11, 2017, has confirmed that there are many that also share my concern around management's proposed path forward. The proposed plan is just another complex financial engineering plot that has too many unanswered questions that ultimately sends MPLX down a slow growth path of value destruction. As MPLX's largest unitholder, MPC must understand the implications that growth expectations at the MPLX level have on its own value.
"Companies with slow distribution growth are put in the penalty box, putting downward pressure on the unit price and upward pressure on the yield. Based on our analysis of the MLP space, under a high growth valuation scenario MPLX could expect to attract a 4.1% yield implying a $55.12 per unit price, a 50% uplift to market close on January 12, 2017. Alternatively, under a slow growth plan like the one MPC is currently proposing, MPLX could expect to attract a 7.8% yield implying a $28.97 per unit price, a 20% decline in value compared to the market close on January 12, 2017. This swing has material implications for MPC shareholders. By dropping down slow growth refining assets, MPLX's organic growth assets will be strangled, diminishing MPC's fully integrated value.
"Don't put MPLX in the penalty box. Our simple and less risky plan puts us on a growth path to value creation. If managed properly, MPLX has years of double digit organic growth ahead with high rate of return projects built on its substantial core infrastructure. This high growth path retains management's focus on high-return EBITDA projects in the Marcellus. We estimate the adoption of our plan results in an immediate uplift in value for MPC shareholders of between $20-$30 per share.
"The high growth path is the only real path to value creation for MPC and MPLX. Execute the IDR elimination plan immediately at a fair and transparent price and set MPLX free with its own focused and growth driven management team. It Just Makes Sense!"
About John M. Fox
John Fox is the co-founder of MarkWest Hydrocarbon, former CEO, Chairman and Director of MarkWest Energy GP, L.L.C. ("MarkWest GP"), the general partner of MarkWest Energy Partners, L.P. ("MarkWest"), and beneficial owner of 1,542,072 MPLX common units, and 20,900 shares of Marathon Petroleum Company, through its merger with MarkWest in 2015 and from follow-on investments. Mr. Fox worked to eliminate the Incentive Distribution Rights (IDRs) at MarkWest in 2007, creating tremendous value that ultimately led to the successful acquisition of MWE by MPLX in 2015. MarkWest generated a 143.3% total return and grew from a $1.2 billion market cap to an $8.6 billion market cap for the period of September 5, 2007, when the IDRs were eliminated, to December 4, 2015.
Disclosure:
John Fox is providing this material for general informational purposes only. None of the information provided herein is intended to be relied upon as investment advice. The opinions expressed in this letter are those of Mr. Fox as of January 26, 2017 and are subject to change at any time due to changes in market, economic conditions, or new public information. These opinions are Mr. Fox's alone, and do not reflect the opinions of any other member of the Fox family. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Mr. Fox to be reliable and are not necessarily all-inclusive. Mr. Fox does not guarantee the accuracy or completeness of this information. There is no guarantee that any forecasts made by any party will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
Contact:
John Fox
Johnfox@itjustmakessensegary.com
720-213-6439
www.itjustmakessensegary.com
SOURCE John M. Fox
Article Date
1/30/2017John Fox, Co-Founder Of MarkWest Hydrocarbon, Issues Open Letter To The Board Of Directors Of Marathon Petroleum Corporation Against MPC's Proposed January 3, 2017 Plan And Offers New Plan
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
DENVER, Jan. 11, 2017 /PRNewswire/ -- John M. Fox, the co-founder of MarkWest Hydrocarbon, former CEO, Chairman and Director of MarkWest Energy GP, L.L.C. ("MarkWest GP"), the general partner of MarkWest Energy Partners, L.P. ("MarkWest"), and beneficial owner of 1,542,072 MPLX common units, and 15,900 shares of Marathon Petroleum Corporation through its merger with MarkWest in 2015 and from follow-on investments, today released the following open letter to the board of directors of Marathon Petroleum Corporation (MPC) outlining how the accelerated dropdown of refining assets hurts long-term MPC value and vastly diminishes growth prospects at MPLX.
John Fox is providing this material for general informational purposes only. None of the information provided herein is intended to be relied upon as investment advice. The opinions expressed in this letter are those of Mr. Fox as of January 11, 2017 and are subject to change at any time due to changes in market, economic conditions, or new public information. These opinions are Mr. Fox's alone, and do not reflect the opinions of any other member of the Fox family.
The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Mr. Fox to be reliable and are not necessarily all-inclusive. Mr. Fox does not guarantee the accuracy or completeness of this information. There is no guarantee that any forecasts made by any party will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
Mr. Fox has created a website with his materials at: www.itjustmakessensegary.com
The full text of the letter follows:
January 11, 2017
Board of Directors
Marathon Petroleum Corporation
539 S Main St
FINDLAY, OH 45840-3229
Attention: Gary Heminger, Chairman, President and Chief Executive Officer
To the Board of Directors of Marathon Petroleum Corporation:
There are fundamental flaws and too many questions with Marathon Petroleum Corporation's (MPC) January 3, 2017 Plan that we believe will destroy long-term value for MPC and MPLX.
As you know, I am the co-founder of MarkWest Hydrocarbon, and a former Chairman, Chief Executive Officer and director of MarkWest Energy GP, L.L.C. As of this date, through the merger of MPLX and MarkWest on December 4, 2015, and from follow-on investment, I am the beneficial owner of 1,542,072 common units of MPLX, LP and 15,900 shares of Marathon Petroleum Corporation.
As a shareholder of MPC and a unitholder of MPLX, I agree with you and Elliott Management Corporation's shared opinion that MPC is undervalued. By eliminating the Incentive Distribution Rights (IDRs) at MarkWest in 2007, we created tremendous value that ultimately led to the successful acquisition of MWE by MPLX in 2015. MWE generated a 143.3% total return and grew from a $1.2 billion market cap to an $8.6 billion market cap for the period of September 5, 2007, when the IDRs were eliminated, to December 4, 2015.
Based on my experience and countless hours my team and I spent at MWE analyzing the many disincentives associated with the IDRs, I know first-hand the drag that can be caused by the IDR structure. As a result, I strongly support Marathon Petroleum Corporation commitment to exchange its IDRs for LP units in MPLX. However, the accelerated "dropdown" of refining assets hurts long-term MPC value, vastly diminishes growth prospects at MPLX and raises the cost of capital for both.
As I pointed out, I successfully eliminated the IDR burden at MarkWest and I know these MPLX assets. MPLX has the premier infrastructure position in the largest emerging gas basin in the U.S. If it is managed properly, MPLX now has years of growth ahead with high rate of return projects built on its substantial core infrastructure. Incurring debt and unit dilution to buy low return, zero growth refining assets makes no sense for MPLX and places an unnecessary burden on the fully integrated refining assets of MPC.
In addition, Moody's has also taken notice of the possible negative ramifications from this most recent proposal by changing MPC's outlook to negative from stable. Below is highlighted commentary from the Moody's press release that aligns with our opinion of this value destructive plan.
"In a continuation of its focus on enhancing shareholder value, MPC has proposed a series of transactions between itself and MPLX intended to fund a substantial, ongoing return of capital to MPC shareholders, the result of which is leveraging on both a consolidated and stand-alone basis at MPC," commented Andrew Brooks, Moody's Vice President.
As we are all well aware, there is a direct relationship between growth and yield valuations. With this in mind, dropdowns from MPC will actually stunt long-term growth at MPLX and may restrict available capital for high return, high growth and time sensitive organic investments at MPLX.
Additionally, MPC is primarily focused around a cyclical, slow-growth refining business while MPLX's organic growth opportunities are focused primarily around natural gas gathering and processing – a high-growth business requiring nimble management focused on customer service and performance.
The proposed dropdown assets are core strategic assets for a refining company to source low cost crude and maximize value of refined products thereby maximizing its "crack spread." With these assets in MPLX's hands, MPC is weaker.
Lastly, Timothy T. Griffith, Chief Financial Officer and Senior Vice President of MPC, pointed out on the January 3, 2017 investor call, "...I don't think we've got any absolute clarity on when that happens," referring to timing of the $600 million of dropdowns that are tied up in regulatory clearances. This uncertainty on timing could likely delay or terminate the IDR elimination plan.
The boards of MPLX, MPC and importantly the MPLX conflicts committee have a duty to investors to consider the long-term value destruction and potential inflation of the GP valuation that is inherent with the plan put forward on January 3, 2017.
There are fundamental questions that need to be answered definitively.
Set MPLX Free
The roadmap to create real value is clear. MPC and MPLX need to execute the IDR elimination plan immediately at a fair and transparent price without burdening MPLX with dropdown assets. After IDR elimination, spin out MPC's current ownership of 87 million MPLX units, plus resulting MPLX units from IDR exchange to MPC shareholders. We estimate the resulting immediate uplift in value for MPC shareholders ranges between $20 and $30 per MPC share.
For MPLX, capital is being siphoned away from meaningful growth opportunities. Without the IDR Burden, MPLX could add assets in some of America's best resource plays like the Marcellus and Utica in the Appalachian Basin, and the SCOOP and STACK plays in Oklahoma.
MPLX in its December 2016 investor presentation outlines a "Strong base business with robust growth opportunities" and highlights "Leading the development of Marcellus and Utica Shale play infrastructure." The company also outlines forward estimates $1.1 billion to $1.2 billion and $1.2 billion to $1.6 billion of organic capital investment in 2016 and 2017, respectively. I know these assets and what they are capable of when the right financial structure is put behind them and the right financial structure is one that puts the most cash to work to grow the business.
I'm asking the board to consider an immediate IDR elimination plan at a fair and transparent price without burdening MPLX with dropdown assets and spinning out of resulting MPLX units to MPC shareholders. Our plan outlines a superior uplift in value for both MPC and MPLX with lower operational and financial risks and better growth going forward. At the end of the day, the companies with the best growth prospects and the lowest cost of capital will win. It just makes sense!
Sincerely,
John Fox
Any quotation of analysts herein does not necessarily indicate that such analysts support the views expressed herein, or indicate that Mr. Fox necessarily agrees with the views of such analysts. Mr. Fox has not sought or obtained consent from any third party for the use of previously published information, and any such statements of information should not be viewed as indicating the support of such third party for the views expressed by Mr. Fox.
Contact:
John Fox
johnfox@itjustmakessensegary.com
720-213-6439
www.itjustmakessensegary.com
SOURCE John M. Fox
Article Date
1/11/201710/27/2016 - Jana Partners LLC Releases Statement Supporting Marathon Petroleum Plan To Enhance Shareholder Value
Jana Partners LLC Releases Statement Supporting Marathon Petroleum Plan To Enhance Shareholder Value
Source: PR Newswire
Orignial Article: http://www.prnewswire.com...
NEW YORK, Oct. 27, 2016 /PRNewswire/ -- JANA Partners LLC today issued the following statement on actions announced earlier today by Marathon Petroleum Corporation (NYSE: MPC) to enhance shareholder value.
"We have high regard for Gary Heminger and his team and have found them always willing to listen and to take strategic action when in the best interest of shareholders. We have studied and fully support the actions Marathon Petroleum announced this morning to enhance shareholder value, including a schedule for near-term and future dropdowns to MPLX and potential related changes to its financial reporting, as well as a strategic review of MPLX's general partnership and a focus on optimizing the cost of capital of the partnership," said Barry Rosenstein, Managing Partner of JANA Partners.
Background
JANA Partners LLC is an investment manager specializing in event-driven investing located in New York City. JANA was founded by Barry Rosenstein in 2001.
SOURCE Jana Partners LLC
Article Date
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