Marathon Petroleum Corp. Reports Fourth-Quarter 2023 Results

Rhea-AI Summary

Marathon Petroleum Corp. (MPC) reported fourth-quarter net income of $1.5 billion, or $3.84 per diluted share, and full-year net cash provided by operating activities of $14.1 billion, supporting the return of $12.8 billion of capital to shareholders in 2023. The company's standalone capital spending outlook for 2024 is $1.25 billion, with a focus on growth and sustaining capital. The refining and marketing segment saw a decrease in adjusted EBITDA due to lower market crack spreads, while the midstream segment's adjusted EBITDA increased. MPC's financial position shows $10.2 billion of cash and $5 billion available on its bank revolving credit facility as of December 31, 2023.

Positive

• Strong net cash from operations in 2023
• Return of $12.8 billion of capital to shareholders in 2023
• Standalone capital spending outlook for 2024 is $1.25 billion
• Midstream segment's adjusted EBITDA increased in the fourth quarter of 2023

Negative

• Decrease in refining and marketing segment adjusted EBITDA due to lower market crack spreads

Insights

Financial Analyst

The reported net income of $1.5 billion for Q4 2023, representing a decrease from the $3.3 billion in Q4 2022, indicates a substantial year-over-year decline in profitability. This contraction could be attributed to various factors, such as lower market crack spreads, which directly impact refining margins. The adjusted EBITDA also shows a significant drop from $5.8 billion in Q4 2022 to $3.5 billion in Q4 2023. This metric is crucial as it reflects the company's operating performance before the influence of non-operational factors like taxes and interest payments and it is often used by investors to assess a company's financial health.

The capital return to shareholders amounting to $12.8 billion in 2023, through dividends and share repurchases, demonstrates a strong commitment to shareholder returns. However, this strategy must be balanced against the need for reinvestment into the company's operations, particularly in a year where net income has seen a notable decrease. The share repurchase activity, with $2.5 billion in Q4 and an additional $0.9 billion by January 26, may signal management's confidence in the intrinsic value of the company, but it also reduces cash reserves which could otherwise be used for strategic investments or as a buffer against market volatility.

Investors and analysts will likely scrutinize the 2024 capital spending outlook of $1.25 billion, especially the allocation towards growth capital. The focus on margin-enhancing and cost-reducing projects, such as the Los Angeles refinery improvements and the Galveston Bay high-pressure distillate hydrotreater, suggests a strategic effort to improve operational efficiency and product value. However, the execution and eventual outcome of these projects will be critical in determining their impact on the company's financial performance.

Energy Sector Analyst

The decrease in segment adjusted EBITDA for the Refining & Marketing (R&M) segment from $4.6 billion in Q4 2022 to $2.2 billion in Q4 2023 is a cause for concern, indicating a less favorable refining environment. The decline in R&M margin from $28.82 per barrel to $17.79 per barrel illustrates a challenging market for refined products, which could be due to factors such as fluctuating crude oil prices, oversupply, or reduced demand. Additionally, the reported crude capacity utilization of approximately 91% suggests that the company is not operating at full capacity, which could be a strategic decision to manage costs or a response to market conditions.

On the other hand, the Midstream segment's adjusted EBITDA increase from $1.4 billion in Q4 2022 to $1.6 billion in Q4 2023 reflects a stronger performance, likely driven by higher throughput volumes and rates. This performance is particularly significant given the strategic role of midstream operations in generating stable cash flows, especially in the context of the volatile refining sector.

The capital outlook for MPLX, focusing on growth projects in the Marcellus and Permian basins, aligns with the broader industry trend of investing in regions with rich natural gas and NGL assets. The steady source of opportunities in these basins could provide a competitive advantage for MPLX, enhancing its position in the midstream sector and potentially contributing positively to the parent company's overall financial health.

Market Research Analyst

The reported financials suggest a shift in Marathon Petroleum Corp.'s operational dynamics. While the capital return to shareholders is robust, the decrease in profitability year-over-year may raise questions about the sustainability of such high payouts in the future. The strategic focus on growth and sustaining capital, with a significant portion directed towards traditional growth and low carbon initiatives, reflects an industry-wide pivot towards more sustainable and efficient operations.

Investors should note the company's proactive approach to regulatory changes, as seen in the Los Angeles refinery improvements aimed at reducing emissions. This not only mitigates regulatory risks but also improves the company's environmental footprint, which is increasingly important to socially conscious investors. The construction of the high-pressure distillate hydrotreater at the Galveston Bay refinery is another strategic move to enhance product value, potentially allowing MPC to tap into higher-margin markets.

Overall, the financial performance and strategic initiatives of MPC should be evaluated in the context of broader market trends, including the global energy transition, regulatory changes and evolving consumer demands. The company's ability to adapt to these changes while maintaining financial discipline and delivering shareholder value will be key to its long-term success.

FINDLAY, Ohio, Jan. 30, 2024 /PRNewswire/ -- 

• Fourth-quarter net income attributable to MPC of $1.5 billion, or $3.84 per diluted share; adjusted net income of $1.5 billion, or $3.98 per adjusted diluted share
• Full-year 2023 net income attributable to MPC of $9.7 billion, or $23.63 per diluted share; adjusted net income of $9.7 billion, or $23.63 per adjusted diluted share
• Full-year net cash provided by operating activities of $14.1 billion, supporting the return of $12.8 billion of capital to shareholders in 2023
• 2024 MPC standalone (excluding MPLX) capital spending outlook of $1.25 billion

Marathon Petroleum Corp. (NYSE: MPC) today reported net income attributable to MPC of $1.5 billion, or $3.84 per diluted share, for the fourth quarter of 2023. This compares to net income attributable to MPC of $3.3 billion, or $7.09 per diluted share, for the fourth quarter of 2022.

Adjusted net income was $1.5 billion, or $3.98 per diluted share, for the fourth quarter of 2023. This compares to adjusted net income of $3.1 billion, or $6.65 per diluted share, for the fourth quarter of 2022. Adjustments are shown in the accompanying release tables.

The fourth quarter of 2023 adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) was $3.5 billion, compared with $5.8 billion for the fourth quarter of 2022. Adjustments are shown in the accompanying release tables.

For the full year 2023, net income attributable to MPC was $9.7 billion, or $23.63 per diluted share, compared with net income attributable to MPC of $14.5 billion, or $28.12 per diluted share for the full year 2022. Adjusted net income was $9.7 billion, or $23.63 per diluted share for the full year 2023. This compares to adjusted net income of $13.5 billion, or $26.16 per diluted share for the full year 2022. Adjustments are shown in the accompanying release tables.

"In 2023, the business generated $14.1 billion of net cash from operations, driven by strong operational performance and commercial execution," said Chief Executive Officer Michael J. Hennigan. "This enabled the return of $12.8 billion of capital to shareholders. We believe MPC is positioned to generate strong through-cycle cash flow with the ability to deliver superior returns to our shareholders."

Results from Operations

Adjusted EBITDA (unaudited)

		Three Months Ended  December 31,						Twelve Months Ended  December 31,
(In millions)		2023			2022			2023			2022
Refining & Marketing Segment
Segment income from operations	$	1,242		$	3,910		$	10,318		$	16,437
Add: Depreciation and amortization		476			455			1,887			1,850
Refining planned turnaround costs		299			442			1,201			1,122
LIFO inventory charge (credit)		145			(176)			145			(148)
Refining & Marketing segment adjusted EBITDA		2,162			4,631			13,551			19,261
Midstream Segment
Segment income from operations		1,285			1,088			4,835			4,462
Add: Depreciation and amortization		332			327			1,320			1,310
Garyville incident response (recoveries) costs		(47)			—			16			—
Midstream segment adjusted EBITDA		1,570			1,415			6,171			5,772
Subtotal		3,732			6,046			19,722			25,033
Corporate		(224)			(259)			(837)			(753)
Add: Depreciation and amortization		20			15			100			55
Adjusted EBITDA	$	3,528		$	5,802		$	18,985		$	24,335

Refining & Marketing (R&M)

Segment adjusted EBITDA was $2.2 billion in the fourth quarter of 2023, versus $4.6 billion for the fourth quarter of 2022. R&M segment adjusted EBITDA was $8.02 per barrel for the fourth quarter of 2023, versus $17.39 per barrel for the fourth quarter of 2022. Segment adjusted EBITDA excludes refining planned turnaround costs, which totaled $299 million in the fourth quarter of 2023 and $442 million in the fourth quarter of 2022. The decrease in segment adjusted EBITDA was driven by lower market crack spreads.

R&M margin was $17.79 per barrel for the fourth quarter of 2023, versus $28.82 per barrel for the fourth quarter of 2022. Crude capacity utilization was approximately 91%, resulting in total throughput of 2.9 million barrels per day for the fourth quarter of 2023.

Refining operating costs per barrel were $5.67 for the fourth quarter of 2023, versus $5.62 for the fourth quarter of 2022. 

Midstream

Segment adjusted EBITDA was $1.6 billion in the fourth quarter of 2023, versus $1.4 billion for the fourth quarter of 2022. The results were primarily driven by higher total throughputs and higher rates.

Corporate and Items Not Allocated

Corporate expenses totaled $224 million in the fourth quarter of 2023, compared with $259 million in the fourth quarter of 2022.

Financial Position, Liquidity, and Return of Capital

As of December 31, 2023, MPC had $10.2 billion of cash, cash equivalents, and short-term investments and $5 billion available on its bank revolving credit facility.

In the fourth quarter, the company returned approximately $2.8 billion of capital to shareholders through $2.5 billion of share repurchases and $311 million of dividends. Through January 26, the company repurchased an additional $0.9 billion of company shares. The company currently has approximately $5.9 billion available under its share repurchase authorizations.

Strategic and Operations Update

MPC's standalone (excluding MPLX) capital spending outlook for 2024 is $1.25 billion. Approximately 65% of overall spending is focused on growth capital and 35% on sustaining capital. MPC's $825 million of growth capital is focused on opportunities that enhance margins and reduce cost. 

At its Los Angeles refinery, the company is advancing improvements to enhance the competitiveness of the refinery by improving reliability and lowering costs. The improvements focus on integrating and modernizing utility systems and increasing energy efficiency, with the added benefit of addressing new regulation mandating further reductions in emissions. The improvements are expected to be completed by the end of 2025. 

At its Galveston Bay refinery, the company is investing to construct a 90,000 barrel per day high-pressure distillate hydrotreater. This project is anticipated to strengthen the competitiveness of the refinery by improving the ability to produce higher value finished products. This project is expected to be completed by the end of 2027.

MPLX announced a capital outlook of $1.1 billion. The capital spending plan focuses on advancing growth projects anchored in the Marcellus and Permian basins. MPLX's integrated footprints in these basins have positioned the partnership with a steady source of opportunities to expand its value chains, particularly around its natural gas and NGL assets.

2024 Capital Plan ($ millions)

MPC Standalone (excluding MPLX)
Refining & Marketing Segment:
Growth - Traditional	$	475
Growth - Low Carbon		350
Maintenance		375
Refining & Marketing Segment		1,200
Midstream Segment (excluding MPLX)		—
Corporate and Other(a)		50
Total MPC Standalone (excluding MPLX)	$	1,250
MPLX Total(b)	$	1,100

(a)	Does not include capitalized interest
(b)	Excludes $285 million of reimbursable capital and approximately $100 million for repayment of MPLX's share of the Bakken Pipeline joint venture's debt due in 2024.

First Quarter 2024 Outlook

Refining & Marketing Segment:
Refining operating costs per barrel(a)	$	5.85
Distribution costs (in millions)	$	1,450
Refining planned turnaround costs (in millions)	$	600
Depreciation and amortization (in millions)	$	480
Refinery throughputs (mbpd):
Crude oil refined		2,445
Other charge and blendstocks		240
Total		2,685
Corporate (in millions)	$	185

(a)	Excludes refining planned turnaround and depreciation and amortization expense

Conference Call

At 11:00 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 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 materials, 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. 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, Finance and Investor Relations
Brian Worthington, Director, Investor Relations
Kenan Kinsey, Supervisor, Investor Relations

Media Contact: (419) 421-3577
Jamal Kheiry, Communications Manager

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 regarding MPC. These forward-looking statements may relate to, among other things, MPC's expectations, estimates and projections concerning its business and operations, financial priorities, strategic plans and initiatives, capital return plans, capital expenditure plans, operating cost reduction objectives, and environmental, social and governance ("ESG") plans and goals, including those related to greenhouse gas emissions and intensity reduction targets, freshwater withdrawal intensity reduction targets, diversity, equity and inclusion targets and ESG reporting. Forward-looking and other statements regarding our ESG plans and goals are not an indication that these statements are material to investors or are required to be disclosed in our filings with the Securities Exchange Commission (SEC). In addition, historical, current, and forward-looking ESG-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. You can identify forward-looking statements by words such as "anticipate," "believe," "commitment," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "intend," "may," "objective," "opportunity," "outlook," "plan," "policy," "position," "potential," "predict," "priority," "project," "prospective," "pursue," "seek," "should," "strategy," "target," "will," "would" or other similar expressions that convey the uncertainty of future events or outcomes. MPC cautions that these statements are based on management's current knowledge and expectations and are subject to certain risks and uncertainties, many of which are outside of the control of MPC, that could cause actual results and events to differ materially from the statements made herein. 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: political or regulatory developments, including changes in governmental policies relating to refined petroleum products, crude oil, natural gas, NGLs, or renewables, or taxation; volatility in and degradation of general economic, market, industry or business conditions due to inflation, rising interest rates, the military conflict between Russia and Ukraine, hostilities in the Middle East, future resurgences of the COVID-19 pandemic or otherwise; the regional, national and worldwide demand for refined products and renewables and related margins; the regional, national or worldwide availability and pricing of crude oil, natural gas, NGLs and other feedstocks and related pricing differentials; the adequacy of capital resources and liquidity and timing and amounts of free cash flow necessary to execute our business plans, effect future share repurchases and to maintain or grow our dividend; the success or timing of completion of ongoing or anticipated projects; the timing and ability to obtain necessary regulatory approvals and permits and to satisfy other conditions necessary to complete planned projects or to consummate planned transactions within the expected timeframes if at all; the availability of desirable strategic alternatives to optimize portfolio assets and the ability to obtain regulatory and other approvals with respect thereto; our ability to successfully implement our sustainable energy strategy and principles and achieve our ESG plans and goals within the expected timeframes if at all; changes in government incentives for emission-reduction products and technologies; the outcome of research and development efforts to create future technologies necessary to achieve our ESG plans and goals; our ability to scale projects and technologies on a commercially competitive basis; changes in regional and global economic growth rates and consumer preferences, including consumer support for emission-reduction products and technology; accidents or other unscheduled shutdowns affecting our refineries, machinery, pipelines, processing, fractionation and treating facilities or equipment, means of transportation, or those of our suppliers or customers; our ability to maintain adequate insurance coverage and recover insurance proceeds to offset losses resulting from accidents or other incidents and unscheduled shutdowns; the imposition of windfall profit taxes or maximum refining margin penalties on companies operating within the energy industry in California or other jurisdictions; 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 MPLX's Annual Reports on Form 10-K for the year ended Dec. 31, 2022, and in other filings with the SEC. Any forward-looking statement speaks only as of the date of the applicable communication and we undertake no obligation to update any forward-looking statement except to the extent required by applicable law.

Copies of MPC's Annual Report on Form 10-K, Quarterly Reports on Form 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, Quarterly Reports on Form 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.

Consolidated Statements of Income (unaudited)

		Three Months Ended  December 31,						Twelve Months Ended  December 31,
(In millions, except per-share data)		2023			2022			2023			2022
Revenues and other income:
Sales and other operating revenues	$	36,255		$	39,813		$	148,379		$	177,453
Income from equity method investments		195			186			742			655
Net gain (loss) on disposal of assets		91			(11)			217			1,061
Other income		282			105			969			783
Total revenues and other income		36,823			40,093			150,307			179,952
Costs and expenses:
Cost of revenues (excludes items below)		32,582			33,575			128,566			151,671
Depreciation and amortization		828			797			3,307			3,215
Selling, general and administrative expenses		820			763			3,039			2,772
Other taxes		198			219			881			825
Total costs and expenses		34,428			35,354			135,793			158,483
Income from continuing operations		2,395			4,739			14,514			21,469
Net interest and other financial costs		111			186			525			1,000
Income from continuing operations before income taxes		2,284			4,553			13,989			20,469
Provision for income taxes on continuing operations		407			984			2,817			4,491
Income from continuing operations, net of tax		1,877			3,569			11,172			15,978
Income from discontinued operations, net of tax		—			72			—			72
Net income		1,877			3,641			11,172			16,050
Less net income attributable to:
Redeemable noncontrolling interest		23			23			94			88
Noncontrolling interests		403			297			1,397			1,446
Net income attributable to MPC	$	1,451		$	3,321		$	9,681		$	14,516
Per share data
Basic:
Continuing operations	$	3.86		$	6.98		$	23.73		$	28.17
Discontinued operations		—			0.15			—			0.14
Net income attributable to MPC per share	$	3.86		$	7.13		$	23.73		$	28.31
Weighted average shares outstanding (in millions)		376			465			407			512
Diluted:
Continuing operations	$	3.84		$	6.94		$	23.63		$	27.98
Discontinued operations		—			0.15			—			0.14
Net income attributable to MPC per share	$	3.84		$	7.09		$	23.63		$	28.12
Weighted average shares outstanding (in millions)		377			468			409			516

Income Summary (unaudited)

		Three Months Ended  December 31,						Twelve Months Ended  December 31,
(In millions)		2023			2022			2023			2022
Refining & Marketing	$	1,242		$	3,910		$	10,318		$	16,437
Midstream		1,285			1,088			4,835			4,462
Corporate		(224)			(259)			(837)			(753)
Income from continuing operations before items not allocated to segments		2,303			4,739			14,316			20,146
Items not allocated to segments:
Gain on sale of assets		92			—			198			1,058
Renewable volume obligation requirements		—			—			—			238
Litigation		—			—			—			27
Income from continuing operations	$	2,395		$	4,739		$	14,514		$	21,469

Capital Expenditures and Investments (unaudited)

		Three Months Ended  December 31,						Twelve Months Ended  December 31,
(In millions)		2023			2022			2023			2022
Refining & Marketing	$	392		$	504		$	1,311		$	1,508
Midstream		357			297			1,105			1,069
Corporate(a)		31			48			138			211
Total	$	780		$	849		$	2,554		$	2,788

(a)	Includes capitalized interest of $12 million, $27 million, $55 million and $103 million for the fourth quarter 2023, the fourth quarter 2022, the year 2023 and the year 2022, respectively.

Refining & Marketing Operating Statistics (unaudited)

Dollar per Barrel of Net Refinery Throughput		Three Months Ended  December 31,						Twelve Months Ended  December 31,
		2023			2022			2023			2022
Refining & Marketing margin, excluding LIFO inventory charge/credit(a)	$	18.33		$	28.16		$	23.16		$	28.10
LIFO inventory (charge) credit		(0.54)			0.66			(0.14)			0.14
Refining & Marketing margin(a)	$	17.79		$	28.82		$	23.02		$	28.24
Less:
Refining operating costs(b)		5.67			5.62			5.41			5.41
Distribution costs(c)		5.63			5.12			5.37			4.89
Other (income) loss(d)		(0.99)			0.03			(0.36)			(0.08)
LIFO inventory (charge) credit		(0.54)			0.66			(0.14)			0.14
Refining & Marketing segment adjusted EBITDA		8.02			17.39			12.74			17.88
Less:
Refining planned turnaround costs		1.11			1.66			1.13			1.04
Depreciation and amortization		1.76			1.71			1.77			1.72
LIFO inventory charge (credit)		0.54			(0.66)			0.14			(0.14)
Refining & Marketing income from operations	$	4.61		$	14.68		$	9.70		$	15.26
Fees paid to MPLX included in distribution costs above	$	3.64		$	3.45		$	3.61		$	3.39

(a)	Sales revenue less cost of refinery inputs and purchased products, divided by net refinery throughput.
(b)	Excludes refining planned turnaround and depreciation and amortization expense.
(c)	Excludes depreciation and amortization expense.
(d)	Includes income (loss) from equity method investments, net gain (loss) on disposal of assets and other income.

 

Refining & Marketing - Supplemental Operating Data		Three Months Ended  December 31,						Twelve Months Ended  December 31,
		2023			2022			2023			2022
Refining & Marketing refined product sales volume (mbpd)(a)		3,612			3,532			3,536			3,508
Crude oil refining capacity (mbpcd)(b)		2,936			2,887			2,917			2,887
Crude oil capacity utilization (percent)(b)		91			94			92			96
Refinery throughputs (mbpd):
Crude oil refined		2,668			2,700			2,677			2,761
Other charge and blendstocks		263			195			237			190
Net refinery throughputs		2,931			2,895			2,914			2,951
Sour crude oil throughput (percent)		45			46			44			47
Sweet crude oil throughput (percent)		55			54			56			53
Refined product yields (mbpd):
Gasoline		1,588			1,457			1,526			1,494
Distillates		1,068			1,078			1,047			1,079
Propane		65			65			66			70
NGLs and petrochemicals		142			129			182			178
Heavy fuel oil		41			107			52			73
Asphalt		69			86			80			89
Total		2,973			2,922			2,953			2,983
Inter-region refinery transfers excluded from throughput and yields above (mbpd)		75			59			61			73

(a)	Includes intersegment sales.
(b)	Based on calendar day capacity, which is an annual average that includes downtime for planned maintenance and other normal operating activities.

Refining & Marketing - Supplemental Operating Data by Region (unaudited)

The per barrel for Refining & Marketing margin is calculated based on net refinery throughput (excludes inter-refinery transfer volumes). The per barrel for the refining operating costs, refining planned turnaround costs and refining depreciation and amortization for the regions, as shown in the tables below, is calculated based on the gross refinery throughput (includes inter-refinery transfer volumes).

Refining operating costs exclude refining planned turnaround costs and refining depreciation and amortization expense.

Gulf Coast Region		Three Months Ended  December 31,						Twelve Months Ended  December 31,
		2023			2022			2023			2022
Dollar per barrel of refinery throughput:
Refining & Marketing margin	$	16.62		$	26.86		$	20.83		$	26.88
Refining operating costs		4.28			4.63			4.11			4.27
Refining planned turnaround costs		0.88			2.93			1.11			1.39
Refining depreciation and amortization		1.34			1.34			1.38			1.30
Refinery throughputs (mbpd):
Crude oil refined		1,144			1,069			1,085			1,122
Other charge and blendstocks		186			126			182			148
Gross refinery throughputs		1,330			1,195			1,267			1,270
Sour crude oil throughput (percent)		55			55			53			57
Sweet crude oil throughput (percent)		45			45			47			43
Refined product yields (mbpd):
Gasoline		702			560			654			616
Distillates		475			443			445			458
Propane		38			35			37			40
NGLs and petrochemicals		107			82			112			107
Heavy fuel oil		27			77			33			53
Asphalt		15			16			17			19
Total		1,364			1,213			1,298			1,293
Inter-region refinery transfers included in throughput and yields above (mbpd)		39			31			35			43

 

Mid-Continent Region		Three Months Ended  December 31,						Twelve Months Ended  December 31,
		2023			2022			2023			2022
Dollar per barrel of refinery throughput:
Refining & Marketing margin	$	17.77		$	29.20		$	23.50		$	27.67
Refining operating costs		5.33			5.25			5.12			5.06
Refining planned turnaround costs		0.79			0.72			0.81			0.73
Refining depreciation and amortization		1.55			1.52			1.54			1.54
Refinery throughputs (mbpd):
Crude oil refined		1,061			1,126			1,108			1,129
Other charge and blendstocks		101			74			78			68
Gross refinery throughputs		1,162			1,200			1,186			1,197
Sour crude oil throughput (percent)		27			27			26			26
Sweet crude oil throughput (percent)		73			73			74			74
Refined product yields (mbpd):
Gasoline		637			633			623			619
Distillates		422			440			427			432
Propane		19			22			20			21
NGLs and petrochemicals		20			24			43			45
Heavy fuel oil		12			15			13			14
Asphalt		54			70			63			69
Total		1,164			1,204			1,189			1,200
Inter-region refinery transfers included in throughput and yields above (mbpd)		18			5			10			7

 

West Coast Region		Three Months Ended  December 31,						Twelve Months Ended  December 31,
		2023			2022			2023			2022
Dollar per barrel of refinery throughput:
Refining & Marketing margin	$	24.11		$	28.63		$	28.02		$	31.87
Refining operating costs		9.19			7.95			8.56			8.07
Refining planned turnaround costs		2.24			0.77			1.75			0.78
Refining depreciation and amortization		1.39			1.24			1.37			1.32
Refinery throughputs (mbpd):
Crude oil refined		463			505			484			510
Other charge and blendstocks		51			54			38			47
Gross refinery throughputs		514			559			522			557
Sour crude oil throughput (percent)		63			69			68			71
Sweet crude oil throughput (percent)		37			31			32			29
Refined product yields (mbpd):
Gasoline		268			282			271			286
Distillates		184			207			182			198
Propane		8			8			9			9
NGLs and petrochemicals		23			30			34			33
Heavy fuel oil		37			37			31			36
Asphalt		—			—			—			1
Total		520			564			527			563
Inter-region refinery transfers included in throughput and yields above (mbpd)		18			23			16			23

 

Midstream Operating Statistics (unaudited)

		Three Months Ended  December 31,						Twelve Months Ended  December 31,
		2023			2022			2023			2022
Pipeline throughputs (mbpd)(a)		5,866			5,688			5,895			5,743
Terminal throughputs (mbpd)		3,023			3,018			3,130			3,022
Gathering system throughputs (million cubic feet per day)(b)		6,252			6,179			6,257			5,794
Natural gas processed (million cubic feet per day)(b)		9,375			8,588			8,971			8,448
C2 (ethane) + NGLs fractionated (mbpd)(b)		599			583			597			552

(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,  2023			September 30,  2023
(In millions)
Cash and cash equivalents	$	5,443		$	8,452
Short-term investments		4,781			4,604
Total consolidated debt(a)		27,283			27,282
MPC debt		6,852			6,864
MPLX debt		20,431			20,418
Redeemable noncontrolling interest		895			970
Equity		30,504			31,828
Shares outstanding		368			386

(a)	Net of unamortized debt issuance costs and unamortized premium/discount, net.

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. The non-GAAP financial measures we use are as follows:

Adjusted Net Income Attributable to MPC and Adjusted Diluted Earnings Per Share

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. 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.

We believe the use of adjusted net income attributable to MPC and adjusted diluted earnings per share provides us and our investors with important measures of our ongoing financial performance to better assess our underlying business results and trends. Adjusted net income attributable to MPC or adjusted diluted earnings per share should not be considered as a substitute for, or superior to net income attributable to MPC, diluted net income per share or any other measure of financial performance presented in accordance with GAAP. Adjusted net income attributable to MPC and adjusted diluted earnings per share may not be comparable to similarly titled measures reported by other companies.

Reconciliation of Net Income Attributable to MPC to Adjusted Net Income Attributable to MPC (unaudited)

		Three Months Ended  December 31,						Twelve Months Ended  December 31,
(In millions)		2023			2022			2023			2022
Net income attributable to MPC	$	1,451		$	3,321		$	9,681		$	14,516
Pre-tax adjustments:
Garyville incident response (recoveries) costs		(47)			—			16			—
Gain on Speedway sale		—			(60)			—			(60)
Gain on sale of assets		(92)			—			(198)			(1,058)
LIFO inventory charge (credit)		145			(176)			145			(148)
Renewable volume obligation requirements		—			—			—			(238)
Tax impact of adjustments(a)		(1)			27			8			306
Non-controlling interest impact of adjustments		49			—			27			183
Adjusted net income attributable to MPC	$	1,505		$	3,112		$	9,679		$	13,501
Diluted income per share	$	3.84		$	7.09		$	23.63		$	28.12
Adjusted diluted income per share	$	3.98		$	6.65		$	23.63		$	26.16

(a)	Income taxes for adjusted earnings were calculated by applying a combined federal and state statutory tax rate of 22% to the pre-tax adjustments. The corresponding adjustments to reported income taxes are shown in the table above.

Adjusted EBITDA

Amounts included in net income (loss) attributable to MPC and excluded from adjusted EBITDA include (i) net interest and other financial costs; (ii) provision/benefit for income taxes; (iii) noncontrolling interests; (iv) depreciation and amortization; (v) refining planned turnaround costs and (vi) other adjustments as deemed necessary, as shown in the table below. We believe 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 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. Adjusted EBITDA should not be considered as a substitute for, or superior to 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 may not be comparable to similarly titled measures reported by other companies.

Reconciliation of Net Income Attributable to MPC to Adjusted EBITDA from Continuing Operations (unaudited)

		Three Months Ended  December 31,						Twelve Months Ended  December 31,
(In millions)		2023			2022			2023			2022
Net income attributable to MPC	$	1,451		$	3,321		$	9,681		$	14,516
Net income attributable to noncontrolling interests		426			320			1,491			1,534
Income from discontinued operations, net of tax		—			(72)			—			(72)
Provision for income taxes		407			984			2,817			4,491
Net interest and other financial costs		111			186			525			1,000
Depreciation and amortization		828			797			3,307			3,215
Refining planned turnaround costs		299			442			1,201			1,122
Garyville incident response (recoveries) costs		(47)			—			16			—
LIFO inventory charge (credit)		145			(176)			145			(148)
Gain on sale of assets		(92)			—			(198)			(1,058)
Renewable volume obligation requirements		—			—			—			(238)
Litigation		—			—			—			(27)
Adjusted EBITDA from continuing operations	$	3,528		$	5,802		$	18,985		$	24,335

Reconciliation of Income from Discontinued Operations, Net of Tax to Adjusted EBITDA from Discontinued Operations (unaudited)

		Three Months Ended  December 31,						Twelve Months Ended  December 31,
(In millions)		2023			2022			2023			2022
Income from discontinued operations, net of tax	$	—		$	72		$	—		$	72
Provision for income taxes		—			(12)			—			(12)
Gain on sale of assets		—			(60)			—			(60)
Adjusted EBITDA from discontinued operations	$	—		$	—		$	—		$	—

Refining & Marketing Margin

Refining & Marketing margin is defined as sales revenue less cost of refinery inputs and purchased products. We use and believe our investors use this non-GAAP financial measure to evaluate our Refining & Marketing segment's operating and financial performance as it is the most comparable measure to the industry's market reference product margins. This measure should not be considered a substitute for, or superior to, Refining & Marketing gross margin or other measures of financial performance prepared in accordance with GAAP, and our calculation thereof may not be comparable to similarly titled measures reported by other companies.

Reconciliation of Refining & Marketing Segment Adjusted EBITDA to Refining & Marketing Gross Margin and Refining & Marketing Margin (unaudited)

		Three Months Ended  December 31,						Twelve Months Ended  December 31,
(In millions)		2023			2022			2023			2022
Refining & Marketing segment adjusted EBITDA	$	2,162		$	4,631		$	13,551		$	19,261
Plus (Less):
Depreciation and amortization		(476)			(455)			(1,887)			(1,850)
Refining planned turnaround costs		(299)			(442)			(1,201)			(1,122)
LIFO inventory (charge) credit		(145)			176			(145)			148
Selling, general and administrative expenses		658			598			2,504			2,294
(Income) loss from equity method investments		(2)			8			(7)			(31)
Net (gain) loss on disposal of assets		1			—			(3)			(37)
Other income		(266)			(80)			(871)			(686)
Refining & Marketing gross margin		1,633			4,436			11,941			17,977
Plus (Less):
Operating expenses (excluding depreciation and amortization)		2,885			2,879			10,986			10,683
Depreciation and amortization		476			455			1,887			1,850
Gross margin excluded from and other income included in Refining & Marketing margin(a)		(124)			(54)			(45)			82
Other taxes included in Refining & Marketing margin		(71)			(41)			(288)			(173)
Refining & Marketing margin		4,799			7,675			24,481			30,419
LIFO inventory charge (credit)		145			(176)			145			(148)
Refining & Marketing margin, excluding LIFO inventory charge/credit	$	4,944		$	7,499		$	24,626		$	30,271
Refining & Marketing margin by region:
Gulf Coast	$	1,972		$	2,877		$	9,365		$	12,038
Mid-Continent		1,871			3,212			10,084			12,013
West Coast		1,101			1,410			5,177			6,220
Refining & Marketing margin	$	4,944		$	7,499		$	24,626		$	30,271

(a)	Reflects the gross margin, excluding depreciation and amortization, of other related operations included in the Refining & Marketing segment and processing of credit card transactions on behalf of certain of our marketing customers, net of other income.

 

View original content:https://www.prnewswire.com/news-releases/marathon-petroleum-corp-reports-fourth-quarter-2023-results-302047668.html

SOURCE Marathon Petroleum Corporation

FAQ

What was Marathon Petroleum Corp.'s (MPC) net income for the fourth quarter of 2023?

Marathon Petroleum Corp. (MPC) reported a net income of $1.5 billion, or $3.84 per diluted share, for the fourth quarter of 2023.

What was MPC's full-year net cash provided by operating activities in 2023?

MPC's full-year net cash provided by operating activities was $14.1 billion, supporting the return of $12.8 billion of capital to shareholders in 2023.

What is MPC's standalone capital spending outlook for 2024?

MPC's standalone capital spending outlook for 2024 is $1.25 billion, with a focus on growth and sustaining capital.

What caused the decrease in refining and marketing segment adjusted EBITDA in the fourth quarter of 2023?

The decrease in segment adjusted EBITDA was driven by lower market crack spreads.

What was MPC's financial position as of December 31, 2023?

As of December 31, 2023, MPC had $10.2 billion of cash, cash equivalents, and short-term investments and $5 billion available on its bank revolving credit facility.