FINDLAY, Ohio, May 8, 2019 /PRNewswire/ --
- 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
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
March 31,
|
(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
March 31,
|
(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
March 31,
|
(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
March 31,
|
(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
March 31,
|
|
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
March 31,
|
|
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
March 31,
|
|
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
March 31,
|
|
|
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,
2019
|
|
December 31
2018
|
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
March 31,
|
|
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
March 31,
|
(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
March 31,
|
(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
March 31,
|
(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
March 31,
|
(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