Marathon Petroleum
Annual Report 2014

Plain-text annual report

Marathon Petroleum Corporation | 2014 Annual Report | 1 2014 Annual Report 2 | Marathon Petroleum Corporation | 2014 Annual Report Marathon Petroleum Corporation | 2014 Annual Report | 1 DELIVERING FOR INVESTORS Since becoming an independent company July 1, 2011 CUMULATIVE CAPITAL RETURN TO SHAREHOLDERS In Billions $7.8 $5.2 $1.9 2012 2013 2014 Dividends Share repurchases MORE THAN 25% OF SHARES REPURCHASED $7.8 Billion $9.7 Billion RETURN OF CAPITAL TO SHAREHOLDERS CAPITAL INVESTED IN THE BUSINESS MPC HAS RETURNED AN AVERAGE OF $6 Million per day TO SHAREHOLDERS TABLE OF CONTENTS Chairman’s Letter ..................................1 CEO’s Letter .............................................3 Financial and Operational Highlights ...............................................20 Board of Directors ...............................21 Corporate Officers ...............................22 On the cover: A Hess station newly converted to the Speedway brand in Florida. On this page: MPC's Detroit refinery From the Chairman Fellow shareholders, AS THE U.S. PETROLEUM INDUSTRY’S RESURGENCE CONTINUES, ENERGY CONSUMERS HAVE INCREASINGLY BENEFITED FROM THE GREATER PROSPERITY, MOBILITY AND SAFETY THAT RESULT FROM PLENTIFUL AND COST- EFFECTIVE ENERGY SUPPLIES. I am proud to serve as chairman of Marathon Petroleum Corporation, not only because it is an outstanding company, but also due to its role in an industry that improves people’s lives in innumerable ways. During 2014, MPC helped to fuel our nation’s economy while working to exceed shareholder expectations. We have continued to balance investments in its future growth and capital returns to shareholders. In 2014, MPC’s talented employees and management team achieved excellent results by addressing market needs as they emerged, while simultaneously focusing on the long-term performance of the company. We also returned approximately $2.7 billion to you through share repurchases and dividends. MPC is committed to growing its higher-value, stable cash-flow segments of the business, and in 2014 we made tremendous strides in executing this strategy. We have expanded Speedway, our retail segment, to 22 states and almost doubled its store count. In the midstream, we have increased our ownership interest in projects that will help move domestic crude oil to high-demand markets. We are also substantially accelerating the growth of MPLX LP, the midstream master limited partnership sponsored by MPC. We expect our shareholders to continue to benefit from MPC’s general partner interest in MPLX. The recent volatility in crude oil and transportation fuel prices reminds us that MPC’s strategy to grow its more stable cash-flow business segments is prudent for the long-term investor. At the same time, we continued to invest in our seven-plant refining network to enhance our ability to use the most cost- effective feedstocks and produce the refined products most in demand. MPC’s board of directors, its management team, and its thousands of employees made the company stronger and more resilient in 2014, and we will continue to work toward enhancing the value of your investment in MPC, and the value of MPC to our society. Sincerely, Thomas J. Usher Chairman 2 | Marathon Petroleum Corporation | 2014 Annual Report MPC DELIVERING RESULTS Earnings** ($ billion) Dividend Increase Share Repurchases ($ billion) Return on Capital Employed 2011* 2.39 25% 0 19% Capital Spending/Investments*** ($ billion) 1.32 *Includes two quarters as an independent, publicly traded company **Represents net income attributable to MPC ***Includes acquisitions 2012 3.39 40% 1.35 25% 1.46 2013 2.11 2014 2.52 20% 19% 2.79 2.13 15% 17% 2.79 4.74 ALLOCATING CAPITAL TO MORE STABLE CASH-FLOW BUSINESSES 2015 CAPITAL PLAN $2.4 BILLION* 2012 CAPITAL SPENDING $1.3 BILLION* 22% 27% 37% 51% 44% 19% MIDSTREAM** *Excludes Corporate and Other **Includes Pipeline Transportation and Midstream investments in Refining & Marketing SPEEDWAY REFINING & MARKETING Marathon Petroleum Corporation | 2014 Annual Report | 3 From the President and CEO Fellow shareholders, MPC’S PERFORMANCE DURING 2014 WAS EXCELLENT. WE MADE SIGNIFICANT PROGRESS IN GROWING OUR STABLE CASH-FLOW BUSINESSES AND IMPLEMENTING PROJECTS TO ENHANCE OUR REFINING MARGINS. AT THE SAME TIME, WE ACHIEVED EARNINGS OF $2.52 BILLION, A 19 PERCENT INCREASE OVER 2013. EARNINGS PER DILUTED SHARE FOR THE YEAR WERE $8.78. WE ALSO CONTINUED TO RETURN CAPITAL TO SHAREHOLDERS AT A STEADY PACE THROUGHOUT THE YEAR. TOTAL DIVIDENDS PAID WERE $524 MILLION, AND SHARE REPURCHASES RETURNED AN ADDITIONAL $2.13 BILLION. AS OF DEC. 31, 2014, $1.73 BILLION REMAINED IN THE SHARE REPURCHASE AUTHORIZATION APPROVED BY THE BOARD OF DIRECTORS. MPC's refinery in Garyville, La. SPEEDWAY MERCHANDISE GROSS MARGIN $ Million 975* 795 825 SPEEDWAY MERCHANDISE SALES $ Billion 3.61* 3.06 3.14 2012 2013 2014 2012 2013 2014 * Includes impact of acquisition, closed Sept. 30, 2014 Marathon Petroleum Corporation | 2014 Annual Report | 5 EXECUTING STRATEGY: growth in retail During 2014, MPC achieved important milestones in its strategy to grow business segments that generate the most stable cash flows. Our most significant achievement was completing the acquisition of Hess’ retail operations and related assets on Sept. 30. This transaction was truly transformative for Speedway, increasing its store count to approximately 2,750 and expanding its retail presence from nine Midwestern states to 22 states throughout the Midwest, East Coast and Southeast. As the year came to a close, we had converted 60 stores to the Speedway brand as part of an aggressive schedule that will target conversion of all stores by year-end 2016. Securing a larger, integrated platform for Speedway’s growth in new markets is only part of the impetus behind the acquisition. We believe there is significant potential for synergy as we combine Speedway’s ability to generate strong merchandise margins with the newly acquired stores’ leading fuel sales volumes. We anticipate applying Speedway’s scalable technology and organizational infrastructure, disciplined expense control and the Speedy Rewards® customer loyalty program across the expanded network. We believe our focus on merchandise sales will deliver both sales and margin growth, and we see a significant amount of incremental annual merchandise margin potential across the newly acquired stores. 4 | Marathon Petroleum Corporation | 2014 Annual Report SPEEDWAY EXPANSION INTO NEW MARKETS ★ ★ ★ WI ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ MI ★ ★ ★ ★ ★ ★ ★★★★★★ ★ ★★★★★ ★ ★ ★ ★ ★★★★★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★★★ ★★ ★ ★★ ★ ★★★★★ ★ ★ ★ ★ ★ ★ ★ ★ ★★★★★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★★★★ ★ ★ ★ ★★★ ★ ★★ ★ ★ ★ ★★ ★ ★★★ ★ ★ ★★★★ ★ ★★ ★★ ★★ ★★ ★★ ★ ★ ★ ★ ★★★★★★ ★ ★ ★★★ ★ ★ ★★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★★ ★★ ★ ★★ ★ ★ ★ ★★ ★★ ★ ★ ★★★ ★★★ ★ ★★ ★★ ★ ★ ★★ ★ ★ ★ ★★★★★★★★★ ★★★ ★★ ★ ★★ ★ ★ ★★ ★★ ★ ★ ★★★ ★ ★ ★ ★ ★★ ★★★★★ ★ ★ ★ ★★ ★ ★★ ★ ★ ★ ★★ ★ ★★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★★★ ★ ★ ★ ★ ★★ ★★ ★ ★ ★ ★ ★★ ★★ ★ ★ ★ ★ ★ ★ ★★ ★ ★ ★ ★ ★★ ★★★ ★ ★ ★ ★ ★★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★★ ★★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★★ ★★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★★★★ ★ ★ ★ ★ ★ ★★★ ★ ★★ ★★ ★ ★ ★ ★★ ★ ★★★ ★★★ ★ ★ ★ ★ ★★★ ★ ★ ★ 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★ ★ ★ ★ ★ ★ ★ ★ ★★ ★★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★★★★★★★★★★ ★ ★★★★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★★ ★ ★ ★★ ★ ★ ★★ ★★ ★★★★★★★★★★ ★ ★ ★ ★ ★ ★ ★ ★★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★★ ★ ★ ★ ★ ★ ★ ★ ★ FL ★ LARGEST COMPANY-OWNED AND -OPERATED CONVENIENCE STORE chain east of the Mississippi 4 MILLION MEMBERS of the Speedy Rewards® customer loyalty program IL SPEEDWAY 2011-2014 AVERAGE GROSS MARGIN 37% FUEL SALES 63% MERCHANDISE SALES Speedway store in Springfield, Ohio 6 | Marathon Petroleum Corporation | 2014 Annual Report EXECUTING STRATEGY: growth in midstream The rapid development of logistics infrastructure continues to facilitate the U.S. petroleum industry’s resurgence, with transportation and storage of crude oil and refined products representing significant value to energy companies, consumers and investors. This creates growth opportunities where size and scale matter. We are participating in this build-out through our substantial midstream assets and general partner interest in MPLX. Retail acquisition's impact on midstream: In addition to greatly expanding MPC’s retail segment, the Hess acquisition has also opened up strategic options in our logistics business. We acquired allocations on various pipelines, including approximately 40,000 barrels per day (bpd) on Colonial Pipeline, giving us greater flexibility to transport refined products into Northeast markets. The acquisition also adds about 3 billion gallons of annual fuels distribution volume. When added to MPC’s existing volume of approximately 17 billion gallons per year, our total is now approximately 20 billion gallons per year. As the sponsor of MPLX, MPC intends to maintain a growing reserve of master limited partnership (MLP)-eligible assets. That growth of reserves will be accomplished through MPC's continued focus on midstream investments. Accelerating MPLX growth to benefit MPC shareholders: MPC plans to grow MPLX substantially, and we intend to accelerate MPLX’s annual distribution growth rate. As we evolve MPLX into a large-cap, diversified MLP, we will be focused on building size and scale in the partnership more rapidly in the near term. It is our intention to grow MPLX’s December 2015 annualized earnings before interest, taxes, depreciation and amortization (EBITDA) to at least $450 million. This accelerated growth plan will support an average annual distribution growth rate percentage in the mid-20s over the next five years. Toward this objective, during 2014 MPC executed two drop-downs to MPLX with a combined annualized EBITDA of approximately $110 million. These drop-downs increased MPLX’s interest in MPLX Pipe Line Holdings LP to 99.5 percent, from the 56 percent interest MPLX held at year-end 2013. TOTAL ESTIMATED MPLX DISTRIBUTIONS TO MPC* APPROXIMATE LIMITED PARTNER DISTRIBUTIONS: $230 Million APPROXIMATE GENERAL PARTNER DISTRIBUTIONS: $325 Million COMPOUND ANNUAL GROWTH RATE**: 25% COMPOUND ANNUAL GROWTH RATE***: 142% * Represents cash distributions expected to be received in 2019. General partner distributions include incentive distribution rights. **Average over the next five years ***From 2013-2019 Marathon Petroleum Corporation | 2014 Annual Report | 7 We have identified additional MLP-eligible sources of midstream EBITDA worth approximately $1.6 billion. These EBITDA sources include crude oil and refined product pipelines, marine assets such as barges and towboats, light-product and asphalt terminals, railcars, storage tanks, fuel distribution volumes, condensate splitters and more. As MPC shareholders, we anticipate you will benefit from MPC’s general partner interest in MPLX, as well as from incentive distribution rights and the potential for proceeds from asset sales we may make to MPLX. We expect to receive over $550 million of distributions by 2019 based on the average mid-20s percent distribution growth rates for the next five years. The amount of value MPLX contributes to your MPC shares is significant, and we believe the market will increasingly reflect this value over time. It is important to note that although MPLX’s growth initially will be driven by drop-downs of MLP-eligible assets from MPC or acquisitions from third parties, organic projects will also MPC has identified MLP-eligible sources of midstream EBITDA of approximately $1.6 Billion Trucks unload production from the Utica Shale at MPC’s Canton, Ohio, refinery. MPLX Adjusted EBITDA Reconciliation from Net Income ($ Million)Dec. 2015AnnualizedNet income305Plus: Depreciation Net interest and other financial costs Provision for income taxes71714Adjusted EBITDA451Less: Adjusted EBITDA attributable to MPC-retained interest1Adjusted EBITDA attributable to MPLX LP4508 | Marathon Petroleum Corporation | 2014 Annual Report make significant contributions. One such project is MPLX’s proposed 50-mile Cornerstone Pipeline, which will transport hydrocarbon liquids from the Utica Shale region in southeastern Ohio to MPC’s refinery in Canton, Ohio. The pipeline is being routed to provide the opportunity for connections to various Utica Shale condensate stabilization, fractionator and cryogenic facilities, along with potential future gathering and storage facilities. A non-binding open season for the project was completed in the third quarter, and a binding open season began on Feb. 9, 2015. MPLX is also advancing various proposed Utica build-out projects to provide service to additional markets beyond Canton, including new construction and utilization of existing pipelines. These projects would connect many Midwest refineries to Utica Shale production, and ultimately provide the ability to reach Chicago-area refineries, as well as pipelines that supply diluent to Western Canada. Investing in MPC’s midstream growth: As part of our strategy to continue growing our more stable cash-flow businesses, during the second quarter we exercised our option to acquire a 35 percent ownership interest in Enbridge Inc.’s Southern Access Extension Pipeline Project. MPC has also agreed to be the anchor shipper on Southern Access Extension, which will have the capacity to transport 300,000 bpd of crude oil from Flanagan, Ill., to the crude oil storage hub at Patoka, Ill. The line is expected to begin service in late 2015. MPC’s increased stake in Southern Access Extension, along with our investment in Enbridge’s Sandpiper Pipeline from North Dakota to Superior, Wis., will increase takeaway capacity from the prolific Bakken Shale play in North Dakota, and position us to meaningfully participate in systems that will increase our – and other refiners’ – access to affordable crude oil supplies and reduce crude oil transportation costs out of this important region. Similarly, as liquids production from the Utica Shale region in eastern Ohio grows, we are investing in midstream assets that enable us to leverage the geographic proximity of our refineries in Canton and Catlettsburg, Ky., to this feedstock source. During the fourth quarter, we completed construction of a 25,000 bpd condensate splitter at Marathon Petroleum Corporation | 2014 Annual Report | 9 our refinery in Canton, and a 35,000 bpd splitter at Catlettsburg is slated for completion during the second quarter of 2015. We also expanded our crude oil trucking operations, as well as the truck unloading capacity at our Canton refinery and a truck-to-barge facility on the Ohio River in Wellsville, Ohio, to accommodate Utica liquids production. In addition to these crude oil investments, MPC also acquired an additional 7 percent interest in Explorer Pipeline, which transports refined products such as gasoline, diesel, fuel oil and jet fuel from the U.S. Gulf Coast to the Midwest. This brings MPC’s ownership interest in Explorer to 25 percent. In short, MPC continues to invest in, and benefit from, the synergies between our midstream and refining businesses. MPC’s Midwest and Gulf Coast refining assets give us the ability to make major, multiyear commitments to move price-advantaged crude oil and refined products to the markets of highest value, while investing in projects that we anticipate will produce significant, consistent earnings and cash flow for our midstream business well into the future. Construction of a condensate splitter at MPC’s Canton, Ohio, refinery was completed in 2014. Sandpiper and Southern Access Extension (SAX) Pipelines Canton Canadian Crude Oil E n b r i d g e Bakken Shale Crude Oil Sandpiper M a i n l i n e Superior, Wis. E n b r i d g e M a i n l i n e SAX Patoka, Ill. Flanagan, Ill. Corner- stone Canton, Ohio Utica Shale Ohio Pa. Utica Shale W.Va. CORNERSTONE PIPELINE Product Pipelines Terminal Facility Crude Oil Pipelines MPC Refinery Proposed Cornerstone Pipeline Future Build-Out Utica Gas Processing Facilities MPC’s truck-to-barge facility on the Ohio River at Wellsville, Ohio. 10 | Marathon Petroleum Corporation | 2014 Annual Report Marathon Petroleum Corporation | 2014 Annual Report | 11 INCREASING EXPORT CAPACITY Thousand Barrels Per Day 510* 395* 345 320 150 2012 2013 2014 2015 2018 *Estimated EXECUTING STRATEGY: enhancing refining margins Processing light sweet crude: As crude oil production from U.S. shale plays continues to grow, we are enhancing our ability to process light crude oil. As of year-end 2014, our seven-refinery system can process a slate of 68 percent light crude, and our refineries in Canton, Catlettsburg and Texas City are able to process 100 percent light crude. In addition to the condensate splitters at Canton and Catlettsburg, we made progress during 2014 on a debottlenecking project at our Robinson, Ill., refinery that will allow it to run 100 percent light crude oil starting in 2016. Growing export capacity: MPC continued to increase exports in 2014, selling refined products into higher-value overseas markets as we optimized product placement. Our average exports in 2014 were approximately 275,000 bpd, compared to an average of 218,000 bpd in 2013. During 2014 we continued working on dock expansions at our Galveston Bay refinery (GBR) in Texas City, Texas, and at our refinery in Garyville, La., with completion targeted during 2015. We are executing these expansions, in conjunction with others, toward our objective of an export capacity of 510,000 bpd by 2018. Capitalizing on growing diesel demand: In the U.S. and globally, diesel demand is growing and projected to continue growing well into the future. MPC has several projects in progress and under evaluation as we position the company to meet energy consumers’ diesel needs. During 2014, we completed the expansion of a hydrocracker at the Garyville refinery, and we are working on expanding one of the facility’s distillate hydrotreaters, which we anticipate will be completed during the first quarter of 2015. When added to 2015 hydrocracker projects at GBR and Robinson, as well as other refinery projects, we anticipate our diesel production capacity will increase by approximately 80,000 bpd by the end of 2016, for a total of 38 percent of our total refined product yield. TOTAL REFINERY THROUGHPUTS Million Barrels Per Day 1.80** 1.81** 1.36 MECHANICAL AVAILABILITY* Percentage of Combined Unit Capacity 95.7 94.9** 93.5** 2012 2013 2014 2012 2013 2014 Enhancing operational excellence at the Galveston Bay refinery: We began 2014 by executing the largest series of planned refinery maintenance projects in our history, including the first major maintenance work at GBR since its acquisition in early 2013. Our employees and contractors across our refining system completed these turnarounds safely, quickly and efficiently, even as they contended with the effects of adverse weather at many of our facilities. During GBR’s first full year as an MPC asset, the employees and management made excellent progress in moving the facility’s operations toward MPC’s standards. Personal safety performance continues to improve, as does environmental performance. Process-safety and environmental incidents are significantly lower than in prior years. Decline in crude oil costs: One of the most prominent market movements of 2014 was the rapid decline in the price of crude oil during the latter half of the year. When considering the effects of this development on MPC, it’s important to keep in mind that crude oil is MPC’s largest single cost of doing business. As such, the drop in the absolute price of crude oil does not negatively affect our refining segment. Our refining profitability is predicated primarily on crack spreads – the difference between what we pay for crude oil and the prices at which we are able to sell refined products. Crack spreads do not necessarily follow the price of oil as it fluctuates, but are more tied to consumer demand and the price differences between various grades of crude oil. And, as consumers benefit from the new, low-cost fuel environment, the likelihood is that overall demand for refined products will rise. MPC has continued to make great strides in its strategy to grow its more stable cash-flow midstream and retail businesses, which help to mitigate the volatility that often characterizes the refining business. In an environment of changing crude oil and refined product prices, MPC’s sponsored MLP and other midstream assets, along with our high-performing Speedway stores, remain a growing source of stable earnings. An employee at the export dock at MPC's Galveston Bay refinery in Texas City, Texas. *Rated capacity less lost capacity due to planned and unplanned outages, divided by rated capacity **Reflects Galveston Bay refinery and related assets, acquired Feb. 1, 2013 MPC’s refinery in Garyville, La. 12 | Marathon Petroleum Corporation | 2014 Annual Report MEETING CONSUMERS’ ENERGY NEEDS OUR CONTINUAL OPTIMIZATION OF MPC’S REFINING, MIDSTREAM AND RETAIL BUSINESSES ENABLES US TO MEET THE MARKET’S NEED FOR THE MANY PRODUCTS WE MANUFACTURE. WITH THE SIGNIFICANT INCREASE IN U.S. CRUDE OIL PRODUCTION OVER THE LAST SEVERAL YEARS, THE U.S. OIL INDUSTRY HAS EXPERIENCED A REMARKABLE RESURGENCE. AS A RESULT, U.S. REFINERS HAVE HAD GROWING ACCESS TO LIGHT SWEET CRUDE OIL FROM U.S. SHALE PLAYS, AND CONSUMERS HAVE BENEFITED FROM PLENTIFUL, RELIABLE SUPPLIES OF FUEL. U.S. REFINERS, INCLUDING MPC, HAVE KEPT PACE WITH THIS DOMESTIC PRODUCTION, AND ARE MAKING INVESTMENTS TO ENSURE THAT WE CAN CONTINUE TO PROCESS U.S. CRUDE OIL FOR YEARS TO COME. Stewards of the environment Since 2009, MPC has been an ENERGY STAR partner company under the U.S. Environmental Protection Agency (EPA) ENERGY STAR Program. Since the program began, MPC has received 30 of the 39 recognitions awarded to U.S. refineries under this program. This represents 77 percent of such recognitions – a very large share, considering MPC’s refineries represent less than 10 percent of the total U.S. capacity. MPC is an industry leader in energy efficiency, having earned 30 of the 39 EPA ENERGY STAR recognitions awarded to refineries 77% MPC continually researches and implements cost-effective programs, processes and technologies to improve energy efficiency. From 2002 through 2013, the last full year for which data is available, gross refinery throughputs at the six refineries we owned through that period increased by approximately 40 percent, while limiting our direct greenhouse gas emissions – an indicator of energy consumption – to only 6 percent. Alternative energy and efficiency measures: We also invest in alternative energy sources as we seek to meet consumers’ needs. MPC increased its investment in biofuels in 2014 with the purchase of a 60 million gallon-per-year biodiesel production facility in Cincinnati, Ohio. The plant, located on the Ohio River, is in proximity to MPC’s Midwest assets. It produces primarily biodiesel and glycerin, and allows MPC to participate in the development of this market. MPC's 60 million gallon-per-year biodiesel refinery in Cincinnati, Ohio. Marathon Petroleum Corporation | 2014 Annual Report | 13 MPC has blended ethanol into gasoline for decades – since well before it was mandated by the federal government. We have equity interests in three Midwest ethanol plants. We began blending ethanol because it made economic sense for both manufacturers and consumers of fuels. As part of our efforts to continually evaluate energy efficiency measures, we have been studying the electricity production of a 6,000-panel solar array we built in Findlay, Ohio, and will be using a wind turbine to power one of our pipeline facilities. We are undertaking these projects because they have the potential to yield economically viable results that could benefit MPC and consumers through lower costs. Our contributions to society: There is no energy source – or combination of energy sources – that can replace fossil fuels in the foreseeable future. Fossil fuels provide power to hospitals, schools, homes and businesses. They enable farmers to till, irrigate, plant and harvest crops to feed themselves and their communities. Reliable and affordable fuels empower people with the freedom to transport themselves to markets, schools, medical facilities and community events. Diesel and gasoline allow businesses to An MPC towboat and barges enter a lock on the Ohio River. MPC produced 54,000 bpd of asphalt in 2014, enough to repave tens of thousands of miles of two-lane highway. 14 | Marathon Petroleum Corporation | 2014 Annual Report Marathon Petroleum Corporation | 2014 Annual Report | 15 OUR INDUSTRY’S TECHNOLOGICAL ADVANCES have enabled us to PROVIDE INCREASING AMOUNTS OF ENERGY to consumers around the world while continually REDUCING OUR ENVIRONMENTAL FOOTPRINT. provide goods and services, as these fuels’ affordability and reliability enhance the efficiency of every link along the value chain – transporting raw materials, manufacturing goods, and transporting goods to those who need them. Cold winters and hot summers are less hazardous when safe, affordable fuels allow heating and cooling systems to more effectively hold temperature extremes at bay. Recovery from natural disasters is quicker and safer with hydrocarbon-fueled ambulances, fire trucks and law-enforcement resources; as power at hospitals and markets is quickly restored with gasoline- and diesel-powered generators; as food, medical supplies and construction materials arrive in trucks, aircraft and marine vessels powered by hydrocarbon fuels. In addition, the mobility that fossil fuels provide – by air, road, rail, river and ocean – has unlocked unprecedented prosperity around the world. In an effort to address the possibility of weather-related problems in the future, there is an activist community that urges investors to remove their investment dollars from companies that provide this indispensable form of energy to billions of people worldwide. In their zeal, advocates of fossil-fuel divestment are ignoring the immediate threats to health and well-being faced by the world’s most vulnerable; for people who don’t have access to the benefits afforded by plentiful, reliable fossil fuels, access to energy is a real, daily concern. Enormous improvements in the quality of life for hundreds of millions of our fellow human beings can be provided by affordable fuels technologies that exist today and have been proven effective for more than a century. the energy that billions of people rely on, while we also serve as responsible stewards of the environment. While solar, wind and other alternative power sources can play a role in providing the energy needed by billions of people around the world, only fossil fuels can meet the challenge efficiently, and on the scale that is needed. This will remain the case for the foreseeable future. Our industry’s technological advances have enabled us to provide increasing amounts of energy to consumers around the world while continually reducing our environmental footprint. We all share the same land, air and water, and MPC is committed to providing THE MOBILITY THAT FOSSIL FUELS PROVIDE has unlocked UNPRECEDENTED PROSPERITY around the world. As president and CEO of your company, I am proud of our role in manufacturing, transporting and marketing fuels and other products that millions of people use to make their lives better every day. I am also grateful to you for your investment in this critical work. Our management team and employees stand ready to perform as safely and efficiently as possible, and we look forward to continuing to share our prosperity with you. Sincerely, Gary R. Heminger President and Chief Executive Officer MPC manufactures the fuels that make modern agriculture and other necessities of life possible. Filling up at a Marathon station in Batesville, Miss. 16 | Marathon Petroleum Corporation | 2014 Annual Report Marathon Petroleum Corporation | 2014 Annual Report | 17 CRUDE OIL REFINING CAPACITY BPCD NCI* Garyville Galveston Bay Catlettsburg Robinson Detroit Canton 522,000 451,000 242,000 212,000 130,000 90,000 11.4 13.3 10.2 10.1 9.8 8.0 Texas City TOTAL 84,000 1,731,000 8.0 11.1** * Nelson Complexity Index (NCI) calculated per Oil & Gas Journal NCI formula **Weighted Average NCI BPCD: barrels per calendar day Source: MPC Data MPC Refineries Light Product Terminals MPC Owned and Part-owned Third Party Asphalt/Heavy Oil Terminals MPC Owned Third Party Water Supplied Terminals Coastal Inland Pipelines MPC Owned and Operated MPC Interest: Operated by MPC MPC Interest: Operated by Others Pipelines Used by MPC Ethanol Facility Biodiesel Facility ® Tank Farms Butane Cavern Pipelines Barge Dock As of Dec. 31, 2013 As of Dec. 31, 2014 MPC LOGISTICS: By the numbers Owned and part-owned light product terminals Third-party light product terminals Owned asphalt terminals Third-party asphalt terminals Approximate miles of pipeline that MPC owns, leases or has ownership interest in Inland waterway towboats Owned barges Leased barges Owned transport trucks Owned or leased railcars 66 118 18 10 8,300 19 199 12 142 2,210 FOCUSED AND INTEGRATED OPERATIONS Refining, Marketing and Transportation Network MPC’s seven refineries are operated as an integrated system, interconnected by our logistics assets: pipelines, inland towboats and barges, railcars, trucks and an extensive terminal network. We reach consumers through our approximately 2,750 Speedway convenience stores in 22 states, approximately 5,460 independently owned Marathon brand locations, and wholesale customers throughout the Midwest and Southeast. Because we focus on excellence in every aspect of our operations, we have a strategic advantage in the industry and a top-tier record of safety and environmental performance. “ THE INTEGRATION OF OUR FLEXIBLE REFINING SYSTEM, LARGE RETAIL PRESENCE AND EXTENSIVE LOGISTICS NETWORK ALLOWS US TO SUCCESSFULLY ADAPT TO CHANGING PRODUCTION “ AND SUPPLY PATTERNS. - Gary R. Heminger President and Chief Executive Officer 18 | Marathon Petroleum Corporation | 2014 Annual Report MARATHON BRAND AND SPEEDWAY LOCATIONS Extensive Retail Network 74 63 64 303 753 107 344 307 648 487 857 105 60 1 12 117 1 20 243 72 4 144 586 26 328 38 2 202 6 297 1 68 129 288 297 62 124 61 129 As of Dec. 31, 2014 248 523 Speedway Marathon Brand Marathon Petroleum Corporation | 2014 Annual Report | 19 MARATHON BRAND Owned and operated by independent entrepreneurs 5,460 branded locations located in 19 states 2014 gasoline and distillate sales of almost 5 billion gallons SPEEDWAY 2,750 stores 22 states located in SPEEDWAY GASOLINE AND DISTILLATE SALES Billion Gallons MARATHON BRAND GASOLINE AND DISTILLATE SALES Billion Gallons 4.92** 4.98** 3.94* 4.14 3.03 3.15 2014 gasoline and distillate sales of almost 4 billion gallons 2012 2013 2014 2012 2013 2014 25% increase in Speedway gasoline and distillate sales* *Includes impact of Hess acquisition, closed Sept. 30, 2014 **Reflects Galveston Bay refinery and related assets, acquired Feb. 1, 2013 20 | Marathon Petroleum Corporation | 2014 Annual Report Marathon Petroleum Corporation | 2014 Annual Report | 21 FINANCIAL AND OPERATIONAL HIGHLIGHTS mm = millions mbpd = thousand barrels per day Revenues ($mm) Income from operations ($mm) Net income attributable to MPC ($mm) Per-common-share data Net income attributable to MPC – basic ($) Net income attributable to MPC – diluted ($) Dividends ($) Weighted average shares outstanding – basic(a) (mm) Weighted average shares outstanding – diluted(a) (mm) Cash and cash equivalents ($mm) Total debt(b) ($mm) Equity ($mm) Capital expenditures and investments(c) ($mm) Refinery throughput (crude oil – mbpd) Refinery throughput (other charge and blendstocks – mbpd) Total refinery throughput (mbpd) Refined product yields (mbpd) Gasoline Distillates Propane Feedstocks and special products Heavy fuel oil Asphalt Total refined product yields R&M refined product sales volume(d) (mbpd) R&M gross margin(e) ($/barrel) Number of outlets (Marathon brand) Number of convenience stores at year-end (Speedway) Speedway gasoline and distillate sales (mm gallons) 2014 2013 2012 97,817 100,160 82,243 4,051 2,524 3,425 2,112 5,347 3,389 8.84 8.78 1.84 285 287 1,494 6,637 11,390 4,738 1,622 184 1,806 869 580 35 276 25 54 1,839 2,125 15.05 5,455 2,746 3,942 6.69 6.64 1.54 315 317 2,292 3,396 11,332 2,789 1,589 213 1,802 921 572 37 221 31 54 1,836 2,075 13.24 5,166 1,478 3,146 9.95 9.89 1.20 340 342 4,860 3,361 12,105 1,460 1,195 168 1,363 738 433 26 109 18 62 1,386 1,599 17.85 4,964 1,464 3,027 Speedway gasoline and distillate gross margin(f) ($/gallon) 0.1775 0.1441 0.1318 Speedway merchandise sales ($mm) Speedway merchandise gross margin ($mm) Crude oil pipeline throughput (mbpd) Refined products pipeline throughput (mbpd) Total pipeline throughput (mbpd) 3,611 975 1,241 878 2,119 3,135 825 1,293 911 2,204 3,058 795 1,191 980 2,171 Number of employees 45,340 29,865 25,985 (a) The number of weighted average shares for 2014, 2013 and 2012 reflect the impact of shares received under our share repurchase program. (b) Includes long-term debt due within one year. (c) Capital expenditures and investments include acquisitions, changes in capital accruals and capitalized interest. (d) Includes intersegment sales. (e) Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs. (f) 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. BOARD OF DIRECTORS Back row: John P. Surma Retired Chairman and CEO, United States Steel Corporation. Prior to USS, Mr. Surma held various leadership positions at Marathon Oil Company, including senior vice president of Finance & Accounting, president of Speedway SuperAmerica LLC, and president of Marathon Ashland Petroleum LLC. Donna A. James Managing Director, Lardon & Associates LLC. Before joining Lardon & Associates, Ms. James was president of Nationwide Strategic Investments. Prior to being president, Ms. James held various executive positions at Nationwide. William L. Davis Retired Chairman, President and CEO, R.R. Donnelley & Sons Company. Prior to R.R. Donnelley & Sons, Mr. Davis was president of Emerson Electric Co. subsidiaries Appleton Electric Co. and Skil Corporation. Evan Bayh Senior Adviser, Apollo Global Management and Partner, McGuireWoods LLP. Sen. Bayh was U.S. senator from, and governor of, Indiana. Sen. Bayh served on numerous Senate committees, holding key leadership roles on several of them. Steven A. Davis Former Chairman and CEO, Bob Evans Farms Inc. Mr. Davis previously served as president of Long John Silver’s and A&W All-American Food Restaurants, and held executive and operational positions in Yum! Brands’ Pizza Hut division and Kraft General Foods. David A. Daberko Retired Chairman and CEO, National City Corporation. Prior to being chairman and CEO, Mr. Daberko was deputy chairman of the corporation and president of National City Bank in Cleveland. James E. Rohr Retired Executive Chairman and CEO, The PNC Financial Services Group Inc. Mr. Rohr joined PNC in 1972, serving in various capacities of increasing responsibility. He was named CEO in 2000 and oversaw record growth for PNC before stepping down as CEO in 2013. Front row: Seth E. Schofield Retired Chairman and CEO, USAir Group. Mr. Schofield served in various leadership positions with USAir prior to his chairmanship, including executive vice president of Operations, president and chief operating officer, and president and CEO. Gary R. Heminger President and CEO, Marathon Petroleum Corporation. Mr. Heminger joined Marathon Oil Company in 1975 and has held various leadership positions during his 40 years with the company. Prior to his current position, Mr. Heminger was head of Marathon’s downstream operations beginning in 2001. Thomas J. Usher Non-executive Chairman of the Board, Marathon Petroleum Corporation. Mr. Usher held a number of leadership positions at United States Steel Corporation (later named USX Corp.) prior to his retirement, including executive vice president of Heavy Products, president of U. S. Steel Group and director of USX, president and chief operating officer of USX, and chairman of the board and CEO. Charles R. Lee Retired Chairman of the Board, Verizon Communications Inc. Mr. Lee served in various leadership positions with GTE Corp., which merged with Bell Atlantic to form Verizon. Mr. Lee also was senior vice president of Finance for Penn Central Corp. and then for Columbia Pictures Industries Inc. John W. Snow Chairman, Cerberus Capital Management LP. Prior to Cerberus Capital, Mr. Snow was U.S. secretary of the Treasury during the George W. Bush administration. He also was chairman and CEO of CSX Corporation and held several high-ranking positions in the Department of Transportation during the Ford administration. 22 | Marathon Petroleum Corporation | 2014 Annual Report CORPORATE OFFICERS Gary R. Heminger President and Chief Executive Officer Donald C. Templin Senior Vice President and Chief Financial Officer Anthony R. Kenney President, Speedway LLC Richard D. Bedell Senior Vice President, Refining C. Michael Palmer Senior Vice President, Supply, Distribution and Planning Thomas M. Kelley Senior Vice President, Marketing Rodney P. Nichols Senior Vice President, Human Resources and Administrative Services Pamela K.M. Beall Senior Vice President, Corporate Planning, Government and Public Affairs George P. Shaffner Senior Vice President, Transportation and Logistics Timothy T. Griffith Vice President, Finance and Investor Relations, and Treasurer John R. Haley Vice President, Tax John J. Quaid Vice President and Controller John S. Swearingen Vice President, Health, Environment, Safety & Security Donald W. Wehrly Vice President and Chief Information Officer J. Michael Wilder Vice President, General Counsel and Secretary Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-KANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended December 31, 2014Commission file number 001-35054Marathon Petroleum Corporation(Exact name of registrant as specified in its charter)Delaware 27-1284632(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)539 South Main Street, Findlay, OH 45840-3229(Address of principal executive offices)(419) 422-2121(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the ActTitle of Each Class Name of Each Exchange on Which RegisteredCommon Stock, par value $.01 New York Stock Exchange Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No ¨Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No þIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required tobe submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period thatthe registrant was required to submit and post such files). Yes þ No ¨Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the bestof registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form10-K. þIndicate by check mark whether the registrant is a large accelerated filer, accelerated filer, a non-accelerated filer, or a smaller reporting company. Seedefinition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No þThe aggregate market value of Common Stock held by non-affiliates as of June 30, 2014 was approximately $22.2 billion. This amount is based on theclosing price of the registrant’s Common Stock on the New York Stock Exchange on June 30, 2014. Shares of Common Stock held by executive officers anddirectors of the registrant are not included in the computation. The registrant, solely for the purpose of this required presentation, has deemed its directors andexecutive officers to be affiliates.There were 273,062,880 shares of Marathon Petroleum Corporation Common Stock outstanding as of February 13, 2015.Documents Incorporated By ReferencePortions of the registrant’s proxy statement relating to its 2015 Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commissionpursuant to Regulation 14A under the Securities Exchange Act of 1934, are incorporated by reference to the extent set forth in Part III, Items 10-14 of thisReport.Table of ContentsMARATHON PETROLEUM CORPORATIONUnless otherwise stated or the context otherwise indicates, all references in this Annual Report on Form 10-K to “MPC,” “us,” “our,” “we” or “the Company”mean Marathon Petroleum Corporation and its consolidated subsidiaries, and for periods prior to its spinoff from Marathon Oil Corporation, the Refining,Marketing & Transportation Business of Marathon Oil Corporation.Table of Contents PagePART I Item 1.Business3 Item 1A.Risk Factors28 Item 1B.Unresolved Staff Comments38 Item 2.Properties38 Item 3.Legal Proceedings38 Item 4.Mine Safety Disclosures39 PART II Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of EquitySecurities40 Item 6.Selected Financial Data41 Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations42 Item 7A.Quantitative and Qualitative Disclosures about Market Risk69 Item 8.Financial Statements and Supplementary Data72 Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure126 Item 9A.Controls and Procedures126 Item 9B.Other Information126 PART III Item 10.Directors, Executive Officers and Corporate Governance128 Item 11.Executive Compensation128 Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters129 Item 13.Certain Relationships and Related Transactions, and Director Independence129 Item 14.Principal Accountant Fees and Services129 PART IV Item 15.Exhibits and Financial Statement Schedules130 SIGNATURES134Table of ContentsDisclosures Regarding Forward-Looking StatementsThis Annual Report on Form 10-K, particularly Item 1. Business, Item 1A. Risk Factors, Item 3. Legal Proceedings, Item 7. Management’s Discussion andAnalysis of Financial Condition and Results of Operations and Item 7A. Quantitative and Qualitative Disclosures about Market Risk, includes forward-looking statements. You can identify our forward-looking statements by words such as “anticipate,” “believe,” “potential,” “estimate,” “expect,” “forecast,”“goal,” “intend,” “plan,” “predict,” “project,” “seek,” “target,” “could,” “may,” “should,” “will,” “would” or other similar expressions that convey theuncertainty of future events or outcomes. In accordance with “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, thesestatements are accompanied by cautionary language identifying important factors, though not necessarily all such factors, that could cause future outcomesto differ materially from those set forth in the forward-looking statements.Forward-looking statements include, but are not limited to, statements that relate to, or statements that are subject to risks, contingencies or uncertainties thatrelate to:•future levels of revenues, refining and marketing gross margins, operating costs, retail gasoline and distillate gross margins, merchandise margins,income from operations, net income or earnings per share;•anticipated volumes of feedstock, throughput, sales or shipments of refined products;•anticipated levels of regional, national and worldwide prices of crude oil and refined products;•anticipated levels of crude oil and refined product inventories;•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;•business strategies, growth opportunities and expected investments, including planned equity investments in pipeline projects;•expectations regarding the acquisition or divestiture of assets;•our share repurchase authorizations, including the timing and amounts of any common stock repurchases;•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; and•the anticipated effects of actions of third parties such as competitors, or federal, foreign, state or local regulatory authorities, or plaintiffs in litigation.We have based our forward-looking statements on our current expectations, estimates and projections about our industry and our company. We caution thatthese statements are not guarantees of future performance, and you should not rely unduly on them, as they involve risks, uncertainties, and assumptions thatwe 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, regulatoryand other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. Accordingly, our actualresults may differ materially from the future performance that we have expressed or forecast in our forward-looking statements. Differences between actualresults and any future performance suggested in our forward-looking statements could result from a variety of factors, including the following:•volatility or degradation in general economic, market, industry or business conditions;•an easing or lifting of the U.S. crude oil export ban;•availability and pricing of domestic and foreign supplies of crude oil and other feedstocks;•the ability of the members of the Organization of Petroleum Exporting Countries (“OPEC”) to agree on and to influence crude oil price andproduction controls;•availability and pricing of domestic and foreign supplies of refined products such as gasoline, diesel fuel, jet fuel, home heating oil andpetrochemicals;•foreign imports of refined products;•refining industry overcapacity or under capacity;•changes in the cost or availability of third-party vessels, pipelines and other means of transportation for crude oil, feedstocks and refined products;•the price, availability and acceptance of alternative fuels and alternative-fuel vehicles and laws mandating such fuels or vehicles;•fluctuations in consumer demand for refined products, including seasonal fluctuations;1Table of Contents•political and economic conditions in nations that consume refined products, including the United States, and in crude oil producing regions,including the Middle East, Africa, Canada and South America;•actions taken by our competitors, including pricing adjustments, expansion of retail activities, and the expansion and retirement of refining capacityin response to market conditions;•completion of pipeline projects within the U.S.;•changes in fuel and utility costs for our facilities;•failure to realize the benefits projected for capital projects, or cost overruns associated with such projects;•modifications to MPLX LP earnings and distribution growth objectives;•the ability to successfully implement growth opportunities;•the ability to successfully integrate the acquired Hess Corporation retail operations and achieve the strategic and other expected objectives relatingto the acquisition including any expected synergies;•the ability to realize the strategic benefits of joint venture opportunities;•accidents or other unscheduled shutdowns affecting our refineries, machinery, pipelines or equipment, or those of our suppliers or customers;•unusual weather conditions and natural disasters, which can unforeseeably affect the price or availability of crude oil and other feedstocks andrefined products;•acts of war, terrorism or civil unrest that could impair our ability to produce or transport refined products or receive feedstocks;•state and federal environmental, economic, health and safety, energy and other policies and regulations, including the cost of compliance with theRenewable Fuel Standard;•rulings, judgments or settlements and related expenses in litigation or other legal, tax or regulatory matters, including unexpected environmentalremediation costs, in excess of any reserves or insurance coverage;•labor and material shortages;•the maintenance of satisfactory relationships with labor unions and joint venture partners;•the ability and willingness of parties with whom we have material relationships to perform their obligations to us;•the market price of our common stock and its impact on our share repurchase authorizations;•changes in the credit ratings assigned to our debt securities and trade credit, changes in the availability of unsecured credit and changes affecting thecredit markets generally; and•the other factors described in Item 1A. Risk Factors.We undertake no obligation to update any forward-looking statements except to the extent required by applicable law.2Table of ContentsPART IItem 1. BusinessOverviewMarathon Petroleum Corporation (“MPC”) was incorporated in Delaware on November 9, 2009. We have 127 years of experience in the energy business withroots tracing back to the formation of the Ohio Oil Company in 1887. We are one of the largest independent petroleum product refining, marketing, retail andtransportation businesses in the United States and the largest east of the Mississippi. Our operations consist of three reportable operating segments:Refining & Marketing; Speedway; and Pipeline Transportation. Each of these segments is organized and managed based upon the nature of the products andservices it offers.•Refining & Marketing—refines crude oil and other feedstocks at our seven refineries in the Gulf Coast and Midwest regions of the United States,purchases refined products and ethanol for resale and distributes refined products through various means, including barges, terminals and trucks thatwe own or operate. We sell refined products to wholesale marketing customers domestically and internationally, buyers on the spot market, ourSpeedway® business segment and to independent entrepreneurs who operate Marathon® retail outlets.•Speedway—sells transportation fuels and convenience products in the retail market in the Midwest, East Coast and Southeast.•Pipeline Transportation—transports crude oil and other feedstocks to our refineries and other locations, delivers refined products to wholesale andretail market areas and includes the aggregated operations of MPLX LP.See Item 8. Financial Statements and Supplementary Data – Note 11 for operating segment and geographic financial information, which is incorporatedherein by reference.Corporate History and StructureMPC was incorporated in 2009 in connection with an internal restructuring of Marathon Oil Corporation (“Marathon Oil”). On May 25, 2011, the MarathonOil board of directors approved the spinoff of its Refining, Marketing & Transportation Business (“RM&T Business”) into an independent, publicly tradedcompany, MPC, through the distribution of MPC common stock to the stockholders of Marathon Oil common stock on June 30, 2011 (the “Spinoff”).Following the Spinoff, Marathon Oil retained no ownership interest in MPC, and each company had separate public ownership, boards of directors andmanagement. All subsidiaries and equity method investments not contributed by Marathon Oil to MPC remained with Marathon Oil and, together withMarathon Oil, are referred to as the “Marathon Oil Companies.” On July 1, 2011, our common stock began trading “regular-way” on the New York StockExchange (“NYSE”) under the ticker symbol “MPC.”Recent DevelopmentsOn September 30, 2014, we acquired from Hess Corporation (“Hess”) all of its retail locations, transport operations and shipper history on various pipelines,including approximately 40 thousand barrels per day (“mbpd”) on Colonial Pipeline, for $2.82 billion. We refer to these assets as “Hess’ Retail Operationsand Related Assets” and substantially all of these assets are part of our Speedway segment. This acquisition significantly expands our Speedway presencefrom nine to 22 states throughout the East Coast and Southeast and is aligned with our strategy to grow higher-valued, stable cash flow businesses. Thisacquisition also enables us to further leverage our integrated refining and transportation operations, providing an outlet for an incremental 200 mbpd ofassured sales from our refining system. The transaction was funded with a combination of debt and available cash. Our financial results and operatingstatistics for the periods prior to the acquisition do not include amounts for Hess’ Retail Operations and Related Assets.In July 2014, we exercised our option to acquire a 35 percent ownership interest in Enbridge Inc.’s Southern Access Extension (“SAX”) pipeline, which willrun from Flanagan, Ill. to Patoka, Ill. and is expected to be operational in late 2015. This option resulted from our agreement to be the anchor shipper on theSAX pipeline and our commitment to the Sandpiper pipeline project as discussed below. During 2014, we made contributions of $120 million to IllinoisExtension Pipeline Company, LLC (“Illinois Extension Pipeline”) to fund our portion of the construction costs incurred-to-date on the SAX pipeline project.On April 1, 2014, we purchased a facility in Cincinnati, Ohio from Felda Iffco Sdn Bhd, Malaysia for $40 million. The plant currently produces biodiesel,glycerin and other by-products. The capacity of the plant is approximately 60 million gallons per year.3Table of ContentsIn March 2014, we acquired from Chevron Raven Ridge Pipe Line Company an additional seven percent interest in Explorer Pipeline Company (“Explorer”)for $77 million, bringing our ownership interest to 25 percent. Explorer owns approximately 1,900 miles of refined products pipeline from Lake Charles,Louisiana to Hammond, Indiana.In November 2013, we agreed with Enbridge Energy Partners L.P. (“Enbridge Energy Partners”) to serve as an anchor shipper for the Sandpiper pipeline,which will run from Beaver Lodge, North Dakota to Superior, Wisconsin. We also agreed to fund 37.5 percent of the construction of the Sandpiper pipelineproject, which is currently estimated to cost $2.6 billion, of which approximately $1.0 billion is our share. We made contributions of $192 million during2014 and have contributed $216 million since project inception. In exchange for our commitment to be an anchor shipper and our investment in the project,we will earn an approximate 27 percent equity interest in Enbridge Energy Partners’ North Dakota System when the Sandpiper pipeline is placed into service,which is expected to be in 2017. Enbridge Energy Partners’ North Dakota System currently includes approximately 240 miles of crude oil gathering pipelinesconnected to a transportation pipeline that is approximately 730 miles long. We will also have the option to increase our ownership interest to approximately30 percent through additional investments in future system improvements.On August 1, 2013, we acquired from Mitsui & Co. (U.S.A.), Inc. its interests in three ethanol companies for $75 million. Under the purchase agreement, weacquired an additional 24 percent interest in The Andersons Clymers Ethanol LLC (“TACE”), bringing our ownership interest to 60 percent; a 34 percentinterest in The Andersons Ethanol Investment LLC (“TAEI”), which holds a 50 percent ownership in The Andersons Marathon Ethanol LLC (“TAME”),bringing our direct and indirect ownership interest in TAME to 67 percent; and a 40 percent interest in The Andersons Albion Ethanol LLC (“TAAE”), whichowns an ethanol production facility in Albion, Michigan. On October 1, 2013, our ownership interest in TAAE increased to 43 percent as a result of TAAEacquiring one of the owner’s interest.On February 1, 2013, we acquired from BP Products North America Inc. and BP Pipelines (North America) Inc. (collectively, “BP”) the 451,000 barrel percalendar day refinery in Texas City, Texas, three intrastate natural gas liquid pipelines originating at the refinery, four light product terminals, branded-jobber marketing contract assignments for the supply of approximately 1,200 branded sites, a 1,040 megawatt electric cogeneration facility and a 50 mbpdallocation of space on the Colonial Pipeline. We refer to these assets as the “Galveston Bay Refinery and Related Assets.” We paid $1.49 billion for theseassets, which included $935 million for inventory. Pursuant to the purchase and sale agreement, we may also be required to pay BP a contingent earnout ofup to an additional $700 million over six years, subject to certain conditions. In July 2014, we paid BP $180 million for the first period’s contingent earnout.These assets are part of our Refining & Marketing and Pipeline Transportation segments. Our financial results and operating statistics for the periods prior tothe acquisition do not include amounts for the Galveston Bay Refinery and Related Assets.See Item 8. Financial Statements and Supplementary Data – Note 5 for additional information on these acquisitions and investments. See Item 8. FinancialStatements and Supplementary Data – Note 26 for information regarding our future contributions to the SAX pipeline project and the Sandpiper pipelineproject.MPLX LPIn 2012, we formed MPLX LP (“MPLX”), a master limited partnership, to own, operate, develop and acquire pipelines and other midstream assets related tothe transportation and storage of crude oil, refined products and other hydrocarbon-based products. On October 31, 2012, MPLX completed its initial publicoffering of 19.9 million common units, which represented the sale by us of a 26.4 percent interest in MPLX.As of December 31, 2014, we owned a 71.5 percent interest in MPLX, including the two percent general partner interest, and we consolidate this entity forfinancial reporting purposes since we have a controlling financial interest.MPLX’s initial assets consisted of a 51 percent general partner interest in MPLX Pipe Line Holdings LP (“Pipe Line Holdings”), which owns a network ofcommon carrier crude oil and product pipeline systems and associated storage assets in the Midwest and Gulf Coast regions of the United States, and a 100percent interest in a butane storage cavern in West Virginia. We originally retained a 49 percent limited partner interest in Pipe Line Holdings.On May 1, 2013, we sold a five percent interest in Pipe Line Holdings to MPLX for $100 million, which was financed by MPLX with cash on hand.On March 1, 2014, we sold MPLX a 13 percent interest in Pipe Line Holdings for $310 million. MPLX financed this transaction with $40 million of cash on-hand and $270 million of borrowings on its bank revolving credit agreement.4Table of ContentsOn October 30, 2014, we announced plans to substantially accelerate the growth of MPLX, which is expected to provide unitholders an average annualdistribution growth rate percentage in the mid-20s over the next five years as we build meaningful scale more quickly. We believe this increased scaleprovides MPLX greater flexibility to fund organic projects and to pursue acquisition opportunities.On December 1, 2014, we sold and contributed interests in Pipe Line Holdings totaling 30.5 percent to MPLX for $600 million in cash and 2.9 million MPLXcommon units valued at $200 million. MPLX financed the sales portion of this transaction with $600 million of borrowings on its bank revolving creditfacility.On December 8, 2014, MPLX completed a public offering of 3.5 million common units at a price to the public of $66.68 per common unit, with net proceedsof $221 million. MPLX used the net proceeds from this offering to repay borrowings under its bank revolving credit facility and for general partnershippurposes. On December 10, 2014, we exercised our right to maintain our two percent general partner interest in MPLX by purchasing 130 thousand generalpartner units for $9 million.On February 12, 2015, MPLX completed its initial underwritten public offering of $500 million aggregate principal amount of four percent unsecured seniornotes due February 15, 2025 (the “Senior Notes”). The Senior Notes were offered at a price to the public of 99.64 percent of par. The net proceeds of thisoffering were used to repay the amounts outstanding under its bank revolving credit facility, as well as for general partnership purposes.See Item 8. Financial Statements and Supplementary Data – Note 4 for additional information on MPLX.Our Competitive StrengthsHigh Quality Refining AssetsWe believe we are the largest crude oil refiner in the Midwest and the fourth largest in the United States based on crude oil refining capacity. We own aseven-plant refinery network, with approximately 1.7 million barrels per calendar day (“mmbpcd”) of crude oil throughput capacity. Our refineries process awide range of crude oils, including heavy and sour crude oils, which can generally be purchased at a discount to sweet crude oil, and produce transportationfuels such as gasoline and distillates, specialty chemicals and other refined products. While we have historically processed significant quantities of heavyand sour crude oils, our refineries have the ability to process up to 68 percent light sweet crude oils.Strategic LocationThe geographic locations of our refineries provide us with strategic advantages. Located in Petroleum Administration for Defense District (“PADD”) II andPADD III, which consist of states in the Midwest and the Gulf Coast regions of the United States, our refineries have the ability to procure crude oil from avariety of supply sources, including domestic, Canadian and other foreign sources, which provides us with flexibility to optimize crude supply costs. Forexample, geographic proximity to various United States shale oil regions and Canadian crude oil supply sources allows our refineries access to price-advantaged crude oils and lower transportation costs than certain of our competitors. Our refinery locations and midstream distribution system also allow usto access refined product export markets and to serve a broad range of key end-user markets across the United States quickly and cost-effectively.5Table of Contents *As of December 31, 2014Extensive Midstream Distribution NetworksOur assets give us extensive flexibility and optionality to respond promptly to dynamic market conditions, including weather-related and marketplacedisruptions. We believe the relative scale of our transportation and distribution assets and operations distinguishes us from other refining and marketingcompanies. We currently own, lease or have ownership interests in approximately 8,300 miles of crude oil and products pipelines. Through our ownershipinterests in MPLX, we are one of the largest petroleum pipeline companies in the United States on the basis of total volume delivered. We also own one of thelargest private domestic fleets of inland petroleum product barges and one of the largest terminal operations in the United States, as well as trucking and railassets. We operate this system in coordination with our refining and marketing network, which enables us to optimize feedstock and other raw materialsupplies and refined product distribution, and further allows for important economies of scale across our system.6Table of ContentsGeneral Partner and Sponsor of MPLXOur investment in MPLX should allow us to enhance our share price through our limited partner and general partner interests which tend to receive highermarket multiples. MPLX also provides us an efficient vehicle to invest in organic projects and pursue acquisitions of midstream assets. MPLX’s significantliquidity and access to the capital markets should provide us a strong foundation to execute our strategy for growing our midstream logistics business. Ourrole as the general partner allows us to maintain strategic control of the assets so we can continue to optimize our refinery feedstock and distributionnetworks. We have an extensive portfolio of midstream assets that can potentially be sold and/or contributed to MPLX, providing MPLX with a competitiveadvantage. As of December 31, 2014, these assets included:•approximately 5,400 miles of crude oil and products pipelines that MPC owns, leases or has an ownership interest;•19 owned or leased inland towboats and 211 owned or leased inland barges;•63 owned and operated light product terminals with approximately 20 million barrels of storage capacity and 192 loading lanes;•18 owned and operated asphalt terminals with approximately 5 million barrels of storage capacity and 65 loading lanes;•one leased and two non-operated, partially-owned light product terminals;•2,210 owned or leased railcars;•59 million barrels of tank and cavern storage capacity at our refineries;•25 rail and 24 truck loading racks at our refineries;•seven owned and 11 non-owned docks at our refineries;•a condensate splitter at our Canton refinery; and•approximately 20 billion gallons of fuels distribution.We continue to focus resources on growing this portfolio of midstream assets, including investments in the Sandpiper and SAX pipeline projects and acondensate splitter project at our Catlettsburg refinery. We broadly estimate these assets and growth projects can generate annual earnings before interest, tax,depreciation and amortization (“EBITDA”) of $1.6 billion. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results ofOperations for additional information on these pipeline investments.Competitively Positioned Marketing OperationsWe are one of the largest wholesale suppliers of gasoline and distillates to resellers within our market area. We have two strong retail brands: Speedway® andMarathon®. We believe that Speedway LLC, a wholly-owned subsidiary, operates the second largest chain of company-owned and operated retail gasolineand convenience stores in the United States, with approximately 2,750 convenience stores in 22 states throughout the Midwest, East Coast and Southeast.The Marathon brand is an established motor fuel brand in the Midwest and Southeast regions of the United States, comprised of approximately 5,460 retailoutlets operated by independent entrepreneurs in 19 states as of December 31, 2014. In addition, as part of the acquisition of the Galveston Bay Refinery andRelated Assets in 2013 and Hess’ Retail Operations and Related Assets in 2014, we obtained retail marketing contracts that provide us with the opportunityto convert the associated retail outlets to the Marathon brand. As of December 31, 2014, we had outstanding retail marketing contract assignments forapproximately 590 retail outlets. We believe our distribution system allows us to maximize the sales value of our products and minimize cost.Attractive Growth OpportunitiesWe believe we have attractive growth opportunities. Our capital and investment budget for 2015 of $2.53 billion includes $1.28 billion for the Refining &Marketing segment (which includes $234 million for midstream investments), $452 million for the Speedway segment and $659 million for the PipelineTransportation segment.Our Refining & Marketing segment’s midstream investments include building condensate splitters at our Canton, Ohio and Catlettsburg, Kentucky refineriesto increase our capacity to process condensate from the Utica Shale region. The condensate splitter at our Canton refinery began operation at the end of 2014and we expect to complete the condensate splitter at our Catlettsburg refinery in 2015. Our Refining & Marketing segment’s investments also includerefining margin enhancement projects, including projects to further capture synergies at our Galveston Bay refinery, increase our distillate production,expand our export capacity and increase our capacity to process condensates and light crude oils.Our Speedway segment investments include converting and integrating Hess’ Retail Operations and Related Assets, constructing new convenience stores andrebuilding existing locations. We also anticipate acquiring high quality stores through opportunistic acquisitions.7Table of ContentsOur Pipeline Transportation segment’s midstream investments include investments in equity interests in the Sandpiper and SAX pipeline projects that willtransport crude oil from growing North American hydrocarbon production regions to our refineries. MPLX is also pursuing the Cornerstone pipeline project,which will connect the Utica Shale production to our Canton, Ohio refinery. There are also potential opportunities for additional build-out projects toprovide transportation solutions from the Utica Shale region to a wide range of markets.Established Track Record of Profitability and Diversified Income StreamWe have demonstrated an ability to achieve positive financial results throughout all stages of the refining cycle. We believe our business mix and strategiesposition us well to continue to achieve competitive financial results. Income generated by our Speedway segment, which was significantly expanded with theacquisition of Hess’ Retail Operations and Related Assets, and our Pipeline Transportation segment is less sensitive to business cycles while our Refining &Marketing segment enables us to generate significant income and cash flow when market conditions are more favorable.Strong Financial PositionAs of December 31, 2014, we had $1.49 billion in cash and cash equivalents and $3.80 billion in unused committed borrowing facilities, excluding MPLX’scredit facility. We had $6.64 billion of debt at year-end, which represented 37 percent of our total capitalization. This combination of strong liquidity andmanageable leverage provides financial flexibility to fund our growth projects and to pursue our business strategies.Our Business StrategiesAchieve and Maintain Top-Tier Safety and Environmental PerformanceWe remain committed to operating our assets in a safe and reliable manner and targeting continuous improvement in our safety record across all of ouroperations. We have a history of safe and reliable operations, which was demonstrated again in 2014 with a solid performance compared to the industryaverage. Four of our refineries have earned designation as a U.S. Occupational Safety and Health Administration (“OSHA”) Voluntary Protection Program(“VPP”) Star site. In addition, we remain committed to environmental stewardship by continuing to improve the efficiency and reliability of our operations.We proactively address our regulatory requirements and encourage our operations to improve their environmental performance, with our 2014 designatedenvironmental incidents showing an additional 15 percent reduction over 2013 results. Our Robinson, Illinois refinery had no significant designatedenvironmental incidents in 2014, and our Galveston Bay refinery achieved further reduction of approximately 87 percent in designated environmentalincidents since we acquired it on February 1, 2013.Grow Higher-Valued, Stable Cash Flow BusinessesWe intend to allocate significantly more capital to grow our midstream and retail businesses. These businesses typically have more predictable and stableincome and cash flows compared to our refining operations and we believe investors assign a higher value to businesses with stable cash flows. Our capitaland investment budget for 2015 includes investments in both our Refining & Marketing and Pipeline Transportation segments related to midstream assets.We have budgeted $234 million for midstream assets that are part of the Refining & Marketing segment, $659 million for the Pipeline Transportationsegment and $452 million for the Speedway segment.We plan to substantially accelerate the growth of MPLX and intend to evolve it into a large cap, diversified MLP. We intend to increase revenue on theMPLX network of pipeline systems through higher utilization of existing assets, by capitalizing on organic investment opportunities that may arise from thegrowth of MPC’s operations and from increased third-party activity in MPLX’s areas of operations. We also plan to pursue acquisitions of midstream assetsthrough MPLX, both within our existing geographic footprint and in new areas. We expect there will continue to be significant investments in infrastructureto connect growing North American crude oil production with existing refining assets and to move refined products to wholesale and retail marketingcustomers. We intend to aggressively participate in this infrastructure build-out and grow our midstream business primarily through MPLX.We significantly expanded Speedway’s presence along the East Coast and Southeast through our acquisition of Hess’ Retail Operations and Related Assets.We intend to continue growing Speedway’s sales and profitability by focusing on the conversion and integration of these locations, from which we expect torealize increased merchandise sales and other synergies. We also remain focused on organic growth through constructing new stores, rebuilding old stores,acquiring high quality stores through opportunistic acquisitions and improving margins at our existing operations. We have identified numerousopportunities for new convenience stores or store rebuilds in our existing market, western Pennsylvania and Tennessee. In addition, our highly successfulSpeedy Rewards® customer loyalty program, which has more than 3.9 million active members as of December 31, 2014, provides us with a uniquecompetitive advantage and opportunity to increase our Speedway customer base with existing and new Speedway locations, including the stores recentlyacquired from Hess.8Table of ContentsDeliver Top Quartile Refining PerformanceOur refineries are well positioned to benefit from the growing crude oil and condensate production in North America, including the Bakken, Eagle Ford andUtica Shale regions, along with the Canadian oil sands. We are also well positioned to export distillates, gasoline and other products.We intend to enhance our margins in the Refining & Marketing segment by capturing synergies at our Galveston Bay refinery, increasing our condensate andlight crude oil processing capacity, growing our distillate production and expanding our exports. For example, we recently completed construction of acondensate splitter at our Canton refinery and we have a project underway to increase condensate processing capacity at our Catlettsburg refinery. We alsohave projects to increase light crude oil processing capacity at our Robinson refinery, to increase distillate production at our Garyville, Louisiana; GalvestonBay and Robinson refineries and to expand the export capacity at our Garyville and Galveston Bay refineries. We will continue to evaluate opportunities toexpand our existing asset base, with an emphasis on increasing distillate production, light crude oil processing and export capabilities and synergisticopportunities at our Galveston Bay refinery.Sustain Focus on Shareholder ReturnsWe intend to continue our focus on the return of capital to shareholders in the form of a strong and growing base dividend, supplemented by sharerepurchases. We have increased our quarterly dividend by 150 percent since becoming a stand-alone company in June 2011 and our board of directors hasauthorized share repurchases totaling $8.0 billion. Through open market purchases and two accelerated share repurchase (“ASR”) programs, we repurchased89 million shares of our common stock for approximately $6.27 billion, representing approximately 25 percent of our outstanding common shares when webecame a stand-alone company in June 2011. After the effects of these repurchases, $1.73 billion of the $8.0 billion total authorization was available forfuture repurchases as of December 31, 2014.Increase Assured Sales Volumes at our Marathon Brand and Speedway LocationsWe consider assured sales as those sales we make to Marathon brand customers, our Speedway operations and to our wholesale customers with whom we haverequired minimum volume sales contracts. We believe having assured sales brings ratability to our distribution systems, provides a solid base to enhance ouroverall supply reliability and allows us to efficiently and effectively optimize our operations between our refineries, our pipelines and our terminals. TheMarathon brand has been a consistent vehicle for sales volume growth in existing and contiguous markets. The acquisition of Hess’ Retail Operations andRelated Assets significantly expands our Speedway presence from nine to 22 states throughout the East Coast and Southeast and enables us to furtherleverage our integrated refining and transportation operations, providing an outlet for an incremental 200 mbpd of assured sales from our refining system.Utilize and Enhance our High Quality Employee WorkforceWe utilize our high quality employee workforce by continuing to leverage our commercial skills. In addition, we continue to enhance our workforce throughselective hiring practices and effective training programs on safety, environmental stewardship and other professional and technical skills.The above discussion contains forward-looking statements with respect to our competitive strengths and business strategies, including our expectedinvestments, share repurchase authorizations, pursuit of potential acquisitions and other growth opportunities as well as the earnings potential of ourportfolio of midstream assets and growth projects that can potentially be sold and/or contributed to MPLX. There can be no assurance that we will besuccessful, in whole or in part, in carrying out our business strategies, including our expected investments, share repurchase program or pursuit of potentialacquisitions and other growth opportunities, or that our portfolio of midstream assets and growth projects that can potentially be sold and/or contributed toMPLX will achieve expected earnings. Factors that could affect our investments include, but are not limited to, the actual amounts invested, which coulddiffer materially from those estimated, and our success in making such investments. Factors that could affect the share repurchase authorizations and thetiming of any repurchases include, but are not limited to, business conditions, availability of liquidity and the market price of our common stock. Factors thatcould affect the pursuit of potential acquisitions and other growth opportunities include, but are not limited to, our ability to implement and realize thebenefits and synergies of our strategic initiatives, availability of liquidity, actions taken by competitors, regulatory approvals and operating performance.Factors that could affect the earnings of our portfolio of midstream assets and growth projects that can potentially be sold and/or contributed to MPLXinclude, but are not limited to, the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or otherhydrocarbon-based products and volatility in and/or degradation of market and industry conditions. These factors, among others, could cause actual resultsto differ materially from those set forth in the forward-looking statements. For additional information on forward-looking statements and risks that can affectour business, see “Disclosures Regarding Forward-Looking Statements” and Item 1A. Risk Factors in this Annual Report on Form 10-K.9Table of ContentsRefining & MarketingRefineriesWe currently own and operate seven refineries in the Gulf Coast and Midwest regions of the United States with an aggregate crude oil refining capacity of1,731 thousand barrels per calender day (“mbpcd”). During 2014, our refineries processed 1,622 mbpd of crude oil and 184 mbpd of other charge andblendstocks. During 2013, our refineries processed 1,589 mbpd of crude oil and 213 mbpd of other charge and blendstocks. The table below sets forth thelocation, crude oil refining capacity, tank storage capacity and number of tanks for each of our refineries as of December 31, 2014.Refinery Crude Oil RefiningCapacity (mbpcd)(a) Tank Storage Capacity(million barrels) Numberof TanksGaryville, Louisiana522 16.8 78Galveston Bay, Texas City, Texas451 16.3 156Catlettsburg, Kentucky242 5.6 115Robinson, Illinois212 6.3 95Detroit, Michigan130 6.5 86Canton, Ohio90 3.0 75Texas City, Texas84 4.7 61Total 1,731 59.2 666(a) Refining throughput can exceed crude oil capacity due to the processing of other charge and blendstocks in addition to crude oil and the timing of planned turnaround and majormaintenance activity.Our refineries include crude oil atmospheric and vacuum distillation, fluid catalytic cracking, hydrocracking, catalytic reforming, coking, desulfurization andsulfur recovery units. The refineries process a wide variety of light and heavy crude oils purchased from various domestic and foreign suppliers. We producenumerous refined products, ranging from transportation fuels, such as reformulated gasolines, blend-grade gasolines intended for blending with ethanol andultra-low sulfur diesel (“ULSD”) fuel, to heavy fuel oil and asphalt. Additionally, we manufacture aromatics, propane, propylene, cumene and sulfur. See theRefined Product Marketing section for further information about the products we produce.Our refineries are integrated with each other via pipelines, terminals and barges to maximize operating efficiency. The transportation links that connect ourrefineries allow the movement of intermediate products between refineries to optimize operations, produce higher margin products and efficiently utilize ourprocessing capacity. For example, naphtha may be moved from Texas City to Robinson where excess reforming capacity is available. Also, shippingintermediate products between facilities during partial refinery shutdowns allows us to utilize processing capacity that is not directly affected by theshutdown work.Garyville, Louisiana Refinery. Our Garyville, Louisiana refinery is located along the Mississippi River in southeastern Louisiana between New Orleans andBaton Rouge. The Garyville refinery is configured to process a wide variety of crude oils into gasoline, distillates, fuel-grade coke, asphalt, polymer-gradepropylene, propane, slurry, sulfur and dry gas. The refinery has access to the export market and multiple options to sell refined products. A major expansionproject was completed in 2009 that increased Garyville’s crude oil refining capacity, making it one of the largest refineries in the U.S. Our Garyville refineryhas earned designation as an OSHA VPP Star site.Galveston Bay, Texas City, Texas Refinery. Our Galveston Bay refinery, which we acquired on February 1, 2013, is located on the Texas Gulf Coastapproximately 30 miles southeast of Houston, Texas. The refinery can process a wide variety of crude oils into gasoline, distillates, aromatics, refinery-gradepropylene, heavy fuel oil, fuel-grade coke, dry gas and sulfur. The refinery has access to the export market and multiple options to sell refined products. Ourcogeneration facility, which supplies the Galveston Bay refinery, currently has 1,055 megawatts of electrical production capacity and can produce 4.3million pounds of steam per hour. Approximately 45 percent of the power generated in 2014 was used at the refinery, with the remaining electricity beingsold into the electricity grid.Catlettsburg, Kentucky Refinery. Our Catlettsburg, Kentucky refinery is located in northeastern Kentucky on the western bank of the Big Sandy River, nearthe confluence with the Ohio River. The Catlettsburg refinery processes sweet and sour crude oils into gasoline, distillates, asphalt, aromatics, propane andrefinery-grade propylene.10Table of ContentsRobinson, Illinois Refinery. Our Robinson, Illinois refinery is located in southeastern Illinois. The Robinson refinery processes sweet and sour crude oils intogasoline, distillates, propane, anode-grade coke, aromatics and slurry. The Robinson refinery has earned designation as an OSHA VPP Star site.Detroit, Michigan Refinery. Our Detroit, Michigan refinery is located in southwest Detroit. It is the only petroleum refinery currently operating in Michigan.The Detroit refinery processes sweet and heavy sour crude oils into gasoline, distillates, asphalt, fuel-grade coke, chemical-grade propylene, propane, slurryand sulfur. Our Detroit refinery earned designation as a Michigan VPP Star site in 2010. In the fourth quarter of 2012, we completed a heavy oil upgradingand expansion project that enabled the refinery to process up to an additional 80 mbpd of heavy sour crude oils, including Canadian crude oils.Canton, Ohio Refinery. Our Canton, Ohio refinery is located approximately 60 miles south of Cleveland, Ohio. The Canton refinery processes sweet and sourcrude oils, including production from the nearby Utica Shale, into gasoline, distillates, asphalt, roofing flux, propane, refinery-grade propylene and slurry. InDecember 2014, we completed construction of a condensate splitter at our Canton refinery, which increased our capacity to process condensate from theUtica Shale region.Texas City, Texas Refinery. Our Texas City, Texas refinery is located on the Texas Gulf Coast adjacent to our Galveston Bay refinery, approximately 30 milessoutheast of Houston, Texas. The refinery processes light sweet crude oils into gasoline, chemical-grade propylene, propane, aromatics, dry gas and slurry.Our Texas City refinery earned designation as an OSHA VPP Star site in 2012.As of December 31, 2014, our refineries had 25 rail loading racks and 24 truck loading racks and four of our refineries had a total of seven owned and 11 non-owned docks. Total throughput in 2014 was 84 mbpd for the refinery loading racks and 911 mbpd for the refinery docks.Planned maintenance activities, or turnarounds, requiring temporary shutdown of certain refinery operating units, are periodically performed at each refinery.See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional detail.Refined Product YieldsThe following table sets forth our refinery production by product group for each of the last three years.Refined Product Yields (mbpd) 2014 2013 2012Gasoline 869 921 738Distillates 580 572 433Propane 35 37 26Feedstocks and special products 276 221 109Heavy fuel oil 25 31 18Asphalt 54 54 62Total 1,839 1,836 1,386Crude Oil SupplyWe obtain the crude oil we refine through negotiated term contracts and purchases or exchanges on the spot market. Our term contracts generally havemarket-related pricing provisions. The following table provides information on our sources of crude oil for each of the last three years. The crude oil sourcedoutside of North America was acquired from various foreign national oil companies, production companies and trading companies.Sources of Crude Oil Refined (mbpd) 2014 2013 2012United States 1,120 946 649Canada 223 255 195Middle East and other international 279 388 351Total 1,622 1,589 1,195Our refineries receive crude oil and other feedstocks and distribute our refined products through a variety of channels, including pipelines, trucks, railcars,ships and barges. During 2012, we began transporting condensate and crude oil by truck from the Utica Shale region to our Canton refinery.11Table of ContentsRenewable FuelsWe currently own a biofuel production facility in Cincinnati, Ohio that produces biodiesel, glycerin and other by-products. The capacity of the plant isapproximately 60 million gallons per year.We hold interests in ethanol production facilities in Albion, Michigan; Clymers, Indiana and Greenville, Ohio. These plants have a combined ethanolproduction capacity of 275 million gallons per year (18 mbpd) and are managed by a co-owner.Refined Product MarketingWe believe we are one of the largest wholesale suppliers of gasoline and distillates to resellers and consumers within our 19-state market area. Independentretailers, wholesale customers, our Marathon brand jobbers and Speedway brand convenience stores, airlines, transportation companies and utilities comprisethe core of our customer base. In addition, we sell gasoline, distillates and asphalt for export, primarily out of our Garyville and Galveston Bay refineries. Thefollowing table sets forth our refined product sales destined for export by product group for the past three years.Refined Product Sales Destined for Export (mbpd) 2014 2013 2012Gasoline 79 38 1Distillates 191 173 114Asphalt 5 6 8Other — 1 —Total 275 218 123The following table sets forth, as a percentage of total refined product sales volume, the sales of refined products to our different customer types for the pastthree years.Refined Product Sales by Customer Type 2014 2013 2012Private-brand marketers, commercial and industrial customers, including spot market73% 75% 72%Marathon-branded independent entrepreneurs15% 16% 17%Speedway® convenience stores12% 9% 11%12Table of ContentsThe following table sets forth the approximate number of retail outlets by state where independent entrepreneurs maintain Marathon-branded retail outlets, asof December 31, 2014.State Approximate Number ofMarathon® Retail OutletsAlabama202Florida523Georgia297Illinois344Indiana648Kentucky586Louisiana1Maryland1Michigan753Minnesota74Mississippi38North Carolina297Ohio857Pennsylvania60South Carolina129Tennessee328Virginia129West Virginia124Wisconsin64Total5,455As of December 31, 2014, we also had branded marketing contract assignments for retail outlets, primarily in Florida, Mississippi, Tennessee and Alabamaand branded lessee dealer marketing contract assignments, primarily in Connecticut, Maryland and New York, which we acquired as either part of theGalveston Bay Refinery and Related Assets acquisition in 2013 or the acquisition of Hess’ Retail Operations and Related Assets in 2014. As of December 31,2014, we had outstanding retail marketing contract assignments for approximately 590 retail outlets.The following table sets forth our refined product sales volumes by product group for each of the last three years.Refined Product Sales by Product Group (mbpd) 2014 2013 2012Gasoline 1,116 1,126 916Distillates 623 615 463Propane 34 37 27Feedstocks and special products 268 214 112Heavy fuel oil 28 29 19Asphalt 56 54 62Total 2,125 2,075 1,599Gasoline and Distillates. We sell gasoline, gasoline blendstocks and distillates (including No. 1 and No. 2 fuel oils, jet fuel, kerosene and diesel fuel) towholesale customers, Marathon-branded independent entrepreneurs and our Speedway® convenience stores and on the spot market. In addition, we sell dieselfuel and gasoline for export to international customers. We sold 55 percent of our gasoline sales volumes and 89 percent of our distillates sales volumes on awholesale or spot market basis in 2014. The demand for gasoline and distillates is seasonal in many of our markets, with demand typically at its highestlevels during the summer months.13Table of ContentsWe have blended ethanol into gasoline for more than 20 years and began expanding our blending program in 2007, in part due to federal regulations thatrequire us to use specified volumes of renewable fuels. Ethanol volumes sold in blended gasoline were 78 mbpd in 2014, 74 mbpd in 2013 and 68 mbpd in2012. We sell reformulated gasoline, which is also blended with ethanol, in 12 states in our marketing area. We also sell biodiesel-blended diesel fuel in 15states in our marketing area. The future expansion or contraction of our ethanol and biodiesel blending programs will be driven by market economics andgovernment regulations.Propane. We produce propane at most of our refineries. Propane is primarily used for home heating and cooking, as a feedstock within the petrochemicalindustry, for grain drying and as a fuel for trucks and other vehicles. Our propane sales are typically split evenly between the home heating market andindustrial consumers.Feedstocks and Special Products. We are a producer and marketer of feedstocks and specialty products. Product availability varies by refinery and includespropylene, raffinate, butane, benzene, xylene, molten sulfur, cumene and toluene. We market these products domestically to customers in the chemical,agricultural and fuel-blending industries. In addition, we produce fuel-grade coke at our Garyville, Detroit and Galveston Bay refineries, which is used forpower generation and in miscellaneous industrial applications, and anode-grade coke at our Robinson refinery, which is used to make carbon anodes for thealuminum smelting industry. Our feedstocks and special products sales increased to 268 mbpd in 2014 from 214 mbpd in 2013 and 112 mbpd in 2012primarily due to our Galveston Bay refinery.Heavy Fuel Oil. We produce and market heavy residual fuel oil or related components, including slurry, at all of our refineries. Heavy residual fuel oil isprimarily used in the utility and ship bunkering (fuel) industries, though there are other more specialized uses of the product.Asphalt. We have refinery-based asphalt production capacity of up to 101 mbpcd, which includes asphalt cements, polymer-modified asphalt, emulsifiedasphalt, industrial asphalts and roofing flux. We have a broad customer base, including asphalt-paving contractors, government entities (states, counties,cities and townships) and asphalt roofing shingle manufacturers. We sell asphalt in the domestic and export wholesale markets via rail, barge and vessel.14Table of ContentsTerminalsAs of December 31, 2014, we owned and operated 63 light product and 18 asphalt terminals. Our light product and asphalt terminals averaged 1,426 mbpdand 27 mbpd of throughput in 2014, respectively. In addition, we distribute refined products through one leased light product terminal, two light productterminals in which we have partial ownership interests but do not operate and approximately 118 third-party light product and 10 third-party asphaltterminals in our market area. The following table sets forth additional details about our owned and operated terminals at December 31, 2014.Owned and Operated Terminals Number ofTerminals Tank StorageCapacity(million barrels) Numberof Tanks Number ofLoadingLanesLight Product Terminals: Alabama2 0.4 20 4Florida4 2.8 83 22Georgia4 0.9 38 9Illinois4 1.2 44 14Indiana6 2.9 72 17Kentucky6 2.3 68 24Louisiana1 0.1 9 2Michigan9 2.3 89 28North Carolina4 1.1 50 13Ohio13 3.6 156 33Pennsylvania1 0.2 8 2South Carolina1 0.3 9 3Tennessee4 1.0 44 12West Virginia2 0.1 10 2Wisconsin2 0.8 19 7Subtotal light product terminals63 20.0 719 192Asphalt Terminals: Florida1 0.2 4 3Illinois2 0.1 33 6Indiana2 0.5 19 6Kentucky4 0.5 60 14Louisiana1 0.1 11 2Michigan1 — — 8Ohio4 2.1 74 10Pennsylvania1 0.5 22 8Tennessee2 0.5 44 8Subtotal asphalt terminals18 4.5 267 65Total owned and operated terminals81 24.5 986 25715Table of ContentsTransportationAs of December 31, 2014, our marine transportation operations included 18 owned and one leased towboat, as well as 199 owned and 12 leased barges thattransport refined products and crude oil on the Ohio, Mississippi and Illinois rivers and their tributaries and inter-coastal waterways. The following table setsforth additional details about our towboats and barges.Class of Equipment Numberin Class Capacity(thousand barrels)Inland tank barges:(a) Less than 25,000 barrels61 88625,000 barrels and over150 4,392Total211 5,278 Inland towboats: Less than 2,000 horsepower2 2,000 horsepower and over17 Total19 (a) All of our barges are double-hulled.As of December 31, 2014, we owned 142 transport trucks and 151 trailers with an aggregate capacity of 1.4 million gallons for the movement of refinedproducts and crude oil. In addition, we had 2,183 leased and 27 owned railcars of various sizes and capacities for movement and storage of refined products.The following table sets forth additional details about our railcars. Number of Railcars Class of Equipment Owned Leased Total Capacity per RailcarGeneral service tank cars— 794 794 20,000-30,000 gallonsHigh pressure tank cars— 1,171 1,171 33,500 gallonsOpen-top hoppers27 218 245 4,000 cubic feet 27 2,183 2,210 SpeedwayOur Speedway segment sells gasoline, diesel and merchandise through convenience stores that it owns and operates, primarily under the Speedway and Hessbrands. We have the right to use the Hess brand through September 30, 2017. We are in the process of converting convenience stores acquired from Hess tothe Speedway brand, which we target to complete by the end of 2016. Speedway convenience stores offer a wide variety of merchandise, including preparedfoods, beverages and non-food items. Speedway’s Speedy Rewards® loyalty program has been a highly successful loyalty program since its inception in2004, with a consistently growing base of more than 3.9 million active members as of December 31, 2014. Due to Speedway’s ability to capture and analyzemember-specific transactional data, Speedway is able to offer the Speedy Rewards® members discounts and promotions specific to their buying behavior. Webelieve Speedy Rewards® is a key reason customers choose Speedway over competitors and it continues to drive significant value for both Speedway andour Speedy Rewards® members.The demand for gasoline is seasonal, with the highest demand usually occurring during the summer driving season. Margins from the sale of merchandisetend to be less volatile than margins from the retail sale of gasoline and diesel fuel. Merchandise margin as a percent of total gross margin for Speedwaydecreased in 2014, primarily related to the convenience stores acquired from Hess. The following table sets forth Speedway merchandise statistics for the pastthree years.Speedway Merchandise Statistics 2014 2013 2012Merchandise sales (in millions)$3,611 $3,135 $3,058Merchandise gross margin (in millions)975 825 795Merchandise as a percent of total gross margin57% 65% 67%16Table of ContentsAs of December 31, 2014, Speedway had 2,746 convenience stores in 22 states. The following table sets forth the number of convenience stores by stateowned by our Speedway segment as of December 31, 2014.State Number ofConvenience StoresAlabama2Connecticut1Delaware4Florida248Georgia6Illinois107Indiana307Kentucky144Massachusetts117Michigan303New Hampshire12New Jersey72New York243North Carolina288Ohio487Pennsylvania105Rhode Island20South Carolina61Tennessee26Virginia68West Virginia62Wisconsin63Total2,746Pipeline TransportationAs of December 31, 2014, we owned, leased or had ownership interests in approximately 8,300 miles of crude oil and products pipelines, of whichapproximately 2,900 miles are owned through our investments in MPLX.MPLXIn 2012, we formed MPLX, a master limited partnership, to own, operate, develop and acquire pipelines and other midstream assets related to thetransportation and storage of crude oil, refined products and other hydrocarbon-based products. On October 31, 2012, MPLX completed its initial publicoffering. As of December 31, 2014, we owned a 71.5 percent interest in MPLX, including the two percent general partner interest, and MPLX’s assetsconsisted of a 99.5 percent general partner interest in Pipe Line Holdings, which owns common carrier pipeline systems through Marathon Pipe Line LLC(“MPL”) and Ohio River Pipe Line LLC (“ORPL”), and a 100 percent interest in a one million barrel butane storage cavern in West Virginia.17Table of ContentsAs of December 31, 2014, Pipe Line Holdings, through MPL and ORPL, owned or leased and operated 1,004 miles of common carrier crude oil lines and1,902 miles of common carrier products lines located in nine states and four tank farms in Illinois and Indiana with available storage capacity of 3.29 millionbarrels that is committed to MPC. The table below sets forth additional detail regarding these pipeline systems and storage assets as of December 31, 2014.Pipeline System or Storage Asset Origin Destination Diameter(inches) Length(miles) Capacity(a) Associated MPC refineryCrude oil pipeline systems (mbpd): Patoka, IL to Lima, OH crude systemPatoka, IL Lima, OH 20”-22” 302 249 Detroit, CantonCatlettsburg, KY and Robinson, IL crude systemPatoka, IL Catlettsburg, KY &Robinson, IL 20”-24” 484 495 Catlettsburg, RobinsonDetroit, MI crude system(b)Samaria &Romulus, MI Detroit, MI 16” 61 197 DetroitWood River, IL to Patoka, IL crude system(b)Wood River &Roxana, IL Patoka, IL 12”-22” 115 314 All Midwest refineriesInactive pipelines 42 N/A Total 1,004 1,255 Products pipeline systems (mbpd): Garyville, LA products systemGaryville, LA Zachary, LA 20”-36” 72 389 GaryvilleTexas City, TX products systemTexas City, TX Pasadena, TX 16”-36” 42 215 Texas City, Galveston BayORPL products systemVarious Various 6”-14” 518 244 Catlettsburg, CantonRobinson, IL products system(b)Various Various 10”-16” 1,171 548 RobinsonLouisville, KY Airport products systemLouisville, KY Louisville, KY 6”-8” 14 29 RobinsonInactive pipelines(b) 85 N/A Total 1,902 1,425 Wood River, IL barge dock (mbpd) 78 GaryvilleStorage assets (thousand barrels): Neal, WV butane cavern(c) 1,000 CatlettsburgPatoka, IL tank farm 1,386 All Midwest refineriesWood River, IL tank farm 419 All Midwest refineriesMartinsville, IL tank farm 738 Detroit, CantonLebanon, IN tank farm 750 Detroit, CantonTotal 4,293 (a) All capacities reflect 100 percent of the pipeline systems’ and barge dock’s average capacity in thousands of barrels per day and 100 percent of the available storage capacity ofour butane cavern and tank farms in thousand of barrels.(b) Includes pipelines leased from third parties.(c) The Neal, WV butane cavern is 100 percent owned by MPLX.The Pipe Line Holdings common carrier pipeline network is one of the largest petroleum pipeline systems in the United States, based on total volumedelivered. Third parties generated 12 percent of the crude oil and refined product shipments on these common carrier pipelines in 2014, excluding volumesshipped by MPC under joint tariffs with third parties. These common carrier pipelines transported the volumes shown in the following table for each of thelast three years.Pipeline Throughput (mbpd)(a)(b) 2014 2013 2012Crude oil pipelines1,041 1,075 1,032Refined products pipelines878 911 980Total1,919 1,986 2,012(a) MPLX predecessor volumes reported in MPLX’s filings include our undivided joint interest crude oil pipeline systems for periods prior to MPLX’s initial public offering, whichwere not contributed to MPLX. The undivided joint interest volumes are not included above.(b) Volumes represent 100 percent of the throughput through these pipelines.18Table of ContentsMPC-Retained Assets and InvestmentsWe retained ownership interests in several crude oil and products pipeline systems and pipeline companies. MPC consolidated volumes transported throughour common carrier pipelines, which include MPLX and our undivided joint interests, are shown in the following table for each of the last three years.MPC Consolidated Pipeline Throughput (mbpd) 2014 2013 2012Crude oil pipelines 1,241 1,293 1,191Refined products pipelines 878 911 980Total 2,119 2,204 2,171As of December 31, 2014, we owned undivided joint interests in the following common carrier crude oil pipeline systems.Pipeline System Origin Destination Diameter(inches) Length(miles) OwnershipInterest Operatedby MPLCapline St. James, LA Patoka, IL 40” 643 33% YesMaumee Lima, OH Samaria, MI 22” 95 26% NoTotal 738 As of December 31, 2014, we had partial ownership interests in the following pipeline companies.Pipeline Company Origin Destination Diameter(inches) Length(miles) OwnershipInterest Operatedby MPLCrude oil pipeline companies: Illinois Extension Pipeline CompanyLLC(a)Flanagan, IL Patoka, IL TBD TBD 35% NoLOCAP LLCClovelly, LA St. James, LA 48” 57 59% NoLOOP LLCOffshore Gulf of Mexico Clovelly, LA 48” 48 51% NoNorth Dakota Pipeline Company LLC(a)(b)Plentywood, MT Clearbrook, MN TBD TBD 38% NoTotal 105 Products pipeline companies: Ascension Pipeline Company LLC(a)Riverside, LA Garyville TBD TBD 50% NoCentennial Pipeline LLC(c)Beaumont, TX Bourbon, IL 24”-26” 795 50% YesExplorer Pipeline CompanyLake Charles, LA Hammond, IN 12”-28” 1,883 25% NoMuskegon Pipeline LLCGriffith, IN Muskegon, MI 10” 170 60% YesWolverine Pipe Line CompanyChicago, IL Bay City &Ferrysburg, MI 6”-18” 743 6% NoTotal 3,591 (a) The pipeline diameter and length for these companies will be determined when these pipeline projects are placed into service.(b) We own 38 percent of the Class B units in this entity. Upon completion of the Sandpiper pipeline project, which is to construct a pipeline running from Beaver Lodge, NorthDakota to Superior, Wisconsin and targeted for completion in 2017, our Class B units will be converted to an approximate 27 percent ownership interest in the Class A units ofthis entity.(c) Includes 491 miles of inactive pipeline.19Table of ContentsWe also own 183 miles of private crude oil pipelines and 760 miles of private refined products pipelines that are operated by MPL for the benefit of ourRefining & Marketing segment on a cost recovery basis. The following table provides additional information on these assets.Private Pipeline Systems Diameter(inches) Length(miles) Capacity(mbpd)Crude oil pipeline systems: Lima, OH to Canton, OH12”-16” 153 85St. James, LA to Garyville, LA30” 20 620Other6”-14” 2 15Inactive pipelines 8 N/ATotal 183 720Products pipeline systems: Robinson, IL to Lima, OH8” 250 18Louisville, KY to Lexington, KY (a)8” 87 37Woodhaven, MI to Detroit, MI4” 26 12Illinois pipeline systems4”-12” 118 39Texas pipeline systems8” 103 45Ohio pipeline systems4”-12” 57 32Inactive pipelines 119 N/ATotal 760 183(a) We own a 65 percent undivided joint interest in the Louisville, KY to Lexington, KY system.As of December 31, 2014, we owned or leased 60 private tanks with storage capacity of approximately 6.5 million barrels, which are located along MPL andORPL pipelines.Competition, Market Conditions and SeasonalityThe downstream petroleum business is highly competitive, particularly with regard to accessing crude oil and other feedstock supply and the marketing ofrefined products. We compete with a large number of other companies to acquire crude oil for refinery processing and in the distribution and marketing of afull array of petroleum products. Based upon the “The Oil & Gas Journal 2014 Worldwide Refinery Survey,” we ranked fourth among U.S. petroleumcompanies on the basis of U.S. crude oil refining capacity as of December 31, 2014. We compete in four distinct markets for the sale of refined products—wholesale, spot, branded and retail distribution. We believe we compete with about 60 companies in the sale of refined products to wholesale marketingcustomers, including private-brand marketers and large commercial and industrial consumers; about 90 companies in the sale of refined products in the spotmarket; 12 refiners or marketers in the supply of refined products to refiner-branded independent entrepreneurs; and approximately 910 retailers in the retailsale of refined products. In addition, we compete with producers and marketers in other industries that supply alternative forms of energy and fuels to satisfythe requirements of our industrial, commercial and retail consumers. We do not produce any of the crude oil we refine.We also face strong competition for sales of retail gasoline, diesel fuel and merchandise. Our competitors include service stations and convenience storesoperated by fully integrated major oil companies and their independent entrepreneurs and other well-recognized national or regional convenience stores andtravel centers, often selling gasoline, diesel fuel and merchandise at competitive prices. Non-traditional retailers, such as supermarkets, club stores and massmerchants, have affected the convenience store industry with their entrance into sales of retail gasoline and diesel fuel. Energy Analysts International, Inc.estimated such retailers had approximately 14 percent of the U.S. gasoline market in mid-2014.Our pipeline transportation operations are highly regulated, which affects the rates that our common carrier pipelines can charge for transportation servicesand the return we obtain from such pipelines.Market conditions in the oil and gas industry are cyclical and subject to global economic and political events and new and changing governmentalregulations. Our operating results are affected by price changes in crude oil, natural gas and refined products, as well as changes in competitive conditions inthe markets we serve. Price differentials between sweet and sour crude oils, West Texas Intermediate (“WTI”) and Light Louisiana Sweet (“LLS”) crude oilsand other market structure differentials also affect our operating results.20Table of ContentsDemand for gasoline, diesel fuel and asphalt is higher during the spring and summer months than during the winter months in most of our markets, primarilydue to seasonal increases in highway traffic and construction. As a result, the operating results for each of our segments for the first and fourth quarters may belower than for those in the second and third quarters of each calendar year.Environmental MattersOur management is responsible for ensuring that our operating organizations maintain environmental compliance systems that support and foster ourcompliance with applicable laws and regulations, and for reviewing our overall environmental performance. We also have a Corporate Emergency ResponseTeam that oversees our response to any major environmental or other emergency incident involving us or any of our facilities.We believe it is likely that the scientific and political attention to issues concerning the extent and causes of climate change will continue, with the potentialfor further regulations that could affect our operations. Currently, legislative and regulatory measures to address greenhouse gases are in various phases ofreview, discussion or implementation. The cost to comply with these laws and regulations cannot be estimated at this time, but could be significant. Foradditional information, see Item 1A. Risk Factors. We estimate and publicly report greenhouse gas emissions from our operations and products. Additionally,we continuously strive to improve operational and energy efficiencies through resource and energy conservation where practicable.Our operations are subject to numerous other laws and regulations relating to the protection of the environment. Such laws and regulations include, amongothers, the Clean Air Act (“CAA”) with respect to air emissions, the Clean Water Act (“CWA”) with respect to water discharges, the Resource Conservationand Recovery Act (“RCRA”) with respect to solid and hazardous waste treatment, storage and disposal, the Comprehensive Environmental Response,Compensation, and Liability Act (“CERCLA”) with respect to releases and remediation of hazardous substances and the Oil Pollution Act of 1990 (“OPA-90”) with respect to oil pollution and response. In addition, many states where we operate have similar laws. New laws are being enacted and regulations arebeing adopted on a continuing basis, and the costs of compliance with such new laws and regulations are very difficult to estimate until finalized.For a discussion of environmental capital expenditures and costs of compliance for air, water, solid waste and remediation, see Item 7. Management’sDiscussion and Analysis of Financial Condition and Results of Operations-Environmental Matters and Compliance Costs.AirWe are subject to many requirements in connection with air emissions from our operations. The U.S. Environmental Protection Agency (“EPA”) issued an“endangerment finding” in 2009 that greenhouse gas emissions contribute to air pollution that endangers public health and welfare. Related to thisendangerment finding, in April 2010, the EPA finalized a greenhouse gas emissions standard for mobile sources (cars and other light duty vehicles). Theendangerment finding along with the mobile source standard and the EPA’s determination that greenhouse gases are subject to regulation under the CAA,and the EPA’s so-called “tailoring rule” led to permitting of larger stationary sources of greenhouse gas emissions, including refineries. Legal challenges filedagainst these EPA actions were overruled by the D.C. Circuit Court of Appeals. In June 2014, the Supreme Court limited the EPA’s greenhouse gas permittingauthority to only those sources that also trigger Prevention of Significant Deterioration (“PSD”) conventional pollutants. A few MPC projects triggeredgreenhouse gas permitting requirements but any additional capital spend will likely not be significant. Legal challenges continue in the wake of the SupremeCourt decision. The EPA has proposed New Source Performance Standards for greenhouse gas emissions for new and existing electric utility generating units.This could impact electric and natural gas rates for all our operations and could impose new requirements on the combined heat and power unit we operate.Congress may again consider legislation on greenhouse gas emissions or a carbon tax. Private parties have sued utilities and other emitters of greenhouse gasemissions, but such suits have been largely unsuccessful. We have not been named in any of those lawsuits. Private-party litigation is also pending againstfederal and certain state governmental entities seeking additional greenhouse gas emission reductions beyond those currently being undertaken. In sum,requiring reductions in greenhouse gas emissions could result in increased costs to (i) operate and maintain our facilities, (ii) install new emission controls atour facilities and (iii) administer and manage any greenhouse gas emissions programs, including acquiring emission credits or allotments. These requirementsmay also significantly affect MPC’s refinery operations and may have an indirect effect on our business, financial condition and results of operations. Theextent and magnitude of the impact from greenhouse gas regulation or legislation cannot be reasonably estimated due to the uncertainty regarding theadditional measures and how they will be implemented.21Table of ContentsIn 2013, the Obama administration developed the social cost of carbon (“SCC”). The SCC is to be used by the EPA and other federal agencies in regulatorycost-benefit analyses to take into account alleged broad economic consequences associated with changes to emissions of greenhouse gases. The SCC wasfirst issued in 2010. In 2013, the Obama administration significantly increased the estimate to $36 per ton. In response to the regulated community andCongress’ critiques of how the SCC was developed, the Office of Management and Budget provided an opportunity to comment on the SCC, but ultimatelydid not make any significant revisions. In December 2014, the White House Council on Environmental Quality (“CEQ”) issued new draft guidance forassessing greenhouse gas emissions under the National Environmental Policy Act (“NEPA”), adding for the first time language that requires the analyses toalso include the impact of climate change on projects, including using the SCC when analyzing costs and benefits of a project. While the impact of a higherSCC in future regulations is not known at this time, it may result in increased costs to our operations.The EPA has reviewed and has revised, or will propose to revise, the National Ambient Air Quality Standards (“NAAQS”) for criteria air pollutants. TheNAAQS are subject to multiple court challenges, making compliance planning uncertain. The EPA promulgated a revised ozone standard in March 2008 andcommenced a multi-year process to develop the implementing rules required by the CAA. On December 17, 2014, the EPA proposed to revise the NAAQS forozone. If the ozone standard is revised, it is expected to be effective in December 2015 after which states will begin developing implementation plans thatwill take several years to receive final EPA approval. The impact of a stricter standard cannot be accurately estimated due to the present uncertainty regardingthe final standard and the additional requirements that states may impose. Also, in 2010, the EPA adopted new short-term standards for nitrogen dioxide andsulfur dioxide, and in December 2012 issued a more stringent fine particulate matter standard (“PM 2.5”). In December 2014, the EPA finalized the non-attainment areas for PM 2.5. None of our refineries are located in the non-attainment areas for PM 2.5, however, our Cincinnati Renewable Fuels LLC facilityis located in Cincinnati, OH, which was designated as a non-attainment area. We cannot reasonably estimate the final financial impact of these proposed andrevised NAAQS standards until the standards are finalized, individual state implementing rules are established and judicial challenges are resolved.The EPA finalized the Boiler and Process Heater Maximum Achievable Control Technology (“Boiler MACT”) in March 2011 with work practice standardsthat are applicable to refinery and natural gas fired equipment. Subsequently, in January 2013 the EPA made certain revisions to the March 2011 final rule inresponse to petitions for reconsideration. In December 2014, the EPA proposed reconsideration of limited issues and proposed to delete rule provisions for anaffirmative defense for malfunctions. Currently, litigation is pending in the D.C. Circuit Court on both the 2011 and 2013 rule-makings. We anticipatelitigation to continue through 2015. We are in the process of implementing the work practice standards. Final financial impacts of the Boiler MACT rulecannot be determined at this time because the ongoing litigation could affect the final rule.On June 30, 2014, the EPA proposed to revise existing refinery air emissions standards. The final rule is expected to be issued by June 17, 2015 and allowsfor implementation through June 2018. EPA’s periodic review and possible revision of these standards is required under the CAA. This rule may requireadditional controls, lower emission standards and ambient air monitoring. Due to the present uncertainty regarding final standards, we cannot reasonablyestimate the cost associated with this rule.WaterWe maintain numerous discharge permits as required under the National Pollutant Discharge Elimination System program of the CWA and have implementedsystems to oversee our compliance with these permits. In addition, we are regulated under OPA-90, which among other things, requires the owner or operatorof a tank vessel or a facility to maintain an emergency plan to respond to releases of oil or hazardous substances. Also, in case of any such release, OPA-90requires the responsible company to pay resulting removal costs and damages. OPA-90 also provides for civil penalties and imposes criminal sanctions forviolations of its provisions. We have implemented emergency oil response plans for all of our components and facilities covered by OPA-90 and we haveestablished Spill Prevention, Control and Countermeasures plans for all facilities subject to such requirements.Additionally, OPA-90 requires that new tank vessels entering or operating in U.S. waters be double-hulled and that existing tank vessels that are not double-hulled be retrofitted or removed from U.S. service. All barges used for river transport of our raw materials and refined products meet the double-hulledrequirements of OPA-90. We operate facilities at which spills of oil and hazardous substances could occur. Some coastal states in which we operate havepassed state laws similar to OPA-90, but with expanded liability provisions, that include provisions for cargo owner responsibility as well as ship owner andoperator responsibility.22Table of ContentsIn 2013, the EPA and the US Army Corps of Engineers proposed significant changes to the definition of the term “waters of the US” (WOTUS) used innumerous programs under the CWA. The proposed changes have the potential to expand permitting, planning and reporting obligations and extend thetiming to secure permits for pipeline and fixed asset construction and maintenance activities. Some man-made water bodies on our plant sites (firewaterponds, stormwater systems, and green infrastructure systems) may become WOTUS, which may require new permits requiring the control of liquids enteringand exiting these water bodies. A final rule is anticipated in early 2015.In May 2014, the EPA issued the final rule regarding cooling water intake structures which impacts three of our refineries. The final rule established closed-loop cooling as one of eight required technologies. The final rule also requires company engagement with Fish and Wildlife to determine if any endangeredspecies are at risk in the locations during the next NPDES permit cycle. This rule will apply with the next NPDES renewal at our Catlettsburg, Garyville, andRobinson refineries. This rule is not anticipated to have a material impact on our operations.Solid WasteWe continue to seek methods to minimize the generation of hazardous wastes in our operations. RCRA establishes standards for the management of solid andhazardous wastes. Besides affecting waste disposal practices, RCRA also addresses the environmental effects of certain past waste disposal operations, therecycling of wastes and the regulation of underground storage tanks (“USTs”) containing regulated substances. We have ongoing RCRA treatment anddisposal operations at two of our facilities and primarily utilize offsite third-party treatment and disposal facilities. Ongoing RCRA-related costs, however,are not expected to be material to our results of operations or cash flows.RemediationWe own or operate, or have owned or operated, certain convenience stores and other locations where, during the normal course of operations, releases ofrefined products from USTs have occurred. Federal and state laws require that contamination caused by such releases at these sites be assessed and remediatedto meet applicable standards. The enforcement of the UST regulations under RCRA has been delegated to the states, which administer their own USTprograms. Our obligation to remediate such contamination varies, depending on the extent of the releases and the stringency of the applicable state laws andregulations. A portion of these remediation costs may be recoverable from the appropriate state UST reimbursement funds once the applicable deductibleshave been satisfied. We also have ongoing remediation projects at a number of our current and former refinery, terminal and pipeline locations. Penalties orother sanctions may be imposed for noncompliance.Claims under CERCLA and similar state acts have been raised with respect to the clean-up of various waste disposal and other sites. CERCLA is intended tofacilitate the clean-up of hazardous substances without regard to fault. Potentially responsible parties for each site include present and former owners andoperators of, transporters to and generators of the hazardous substances at the site. Liability is strict and can be joint and several. Because of various factorsincluding the difficulty of identifying the responsible parties for any particular site, the complexity of determining the relative liability among them, theuncertainty as to the most desirable remediation techniques and the amount of damages and clean-up costs and the time period during which such costs maybe incurred, we are unable to reasonably estimate our ultimate cost of compliance with CERCLA; however, we do not believe such costs will be material toour business, financial condition, results of operations or cash flows.Mileage Standards, Renewable Fuels and Other Fuels RequirementsIn 2007, the U.S. Congress passed the Energy Independence and Security Act (“EISA”), which, among other things, set a target of 35 miles per gallon for thecombined fleet of cars and light trucks in the United States by model year 2020, and contains a second Renewable Fuel Standard (“RFS2”). In August 2012,the EPA and the National Highway Traffic Safety Administration jointly adopted regulations that establish average industry fleet fuel economy standards forpassenger cars and light trucks of up to 41 miles per gallon by model year 2021 and average fleet fuel economy standards of up to 49.7 miles per gallon bymodel year 2025 (the standards from 2022 to 2025 are the government’s current estimate but will require further rulemaking). New or alternativetransportation fuels such as compressed natural gas could also pose a competitive threat to our operations.23Table of ContentsThe RFS2 required the total volume of renewable transportation fuels sold or introduced annually in the U.S. to reach 16.55 billion gallons in 2013 andincreases to 36.0 billion gallons by 2022. EPA has not finalized the 2014 volumes at this time. In the near term, the RFS2 will be satisfied primarily withethanol blended into gasoline. Vehicle, regulatory and infrastructure constraints limit the blending of significantly more than 10 percent ethanol intogasoline (“E10”), but blending more than E10 could be required if the RFS2 standards are not modified. The RFS2 has required, and may in the futurecontinue to require, additional capital expenditures or expenses by us to accommodate increased renewable fuels use. Within the overall 36.0 billion gallonRFS2, EISA established an advanced biofuel RFS2 volume of 2.0 billion gallons in 2012 increasing to 21.0 billion gallons in 2022. Subsets within theadvanced biofuel RFS2 include biomass-based diesel, which was set at 1.0 billion gallons in 2012, 1.28 billion gallons in 2013, and at least 1.0 billiongallons in 2014 through 2022 (to be determined by the EPA through future rulemaking), and cellulosic biofuel, which was set at 0.5 billion gallons in 2012and 1.0 billion gallons in 2013, increasing to 16.0 billion gallons by 2022. In 2013, the EPA used its waiver authority under the CAA to reduce the amountof cellulosic biofuel required under the statute from 1.0 billion gallons to 6.0 million gallons. Currently, litigation is on-going in the D.C. Circuit Court ofAppeals with respect to the EPA’s determination of the 2013 cellulosic biofuel requirement. Subsequently, industry has requested the EPA to use its waiverauthority for 2014, requesting reductions for total renewable fuel, advanced biofuels and cellulosic biofuels volumetric obligations.On November 29, 2013, the EPA issued a proposed rule for the 2014 renewal fuel volume requirements. On November 21, 2014, the EPA announced the rulewould not become final until sometime in 2015. This continues the lack of clarity and timeliness that has become common place with the EPA’sadministration of the RFS2 requirements. This proposed rule has substantially reduced the RFS2 requirements from the statutory numbers as follows: totalrenewables has been reduced from 18.15 to 15.21 billion gallons, the advanced requirement has been reduced from 3.75 to 2.20 billion gallons, the biomass-based diesel requirement has remained flat from 2013 at 1.28 billion gallons, and the cellulosic requirement has been reduced from 1.75 billion to 17 milliongallons. If these proposed requirements become final, it will allow the obligated parties to comply in 2014 without needing any substantial volumes of 85percent ethanol-blended or 15 percent ethanol-blended (“E15”) gasolines and postpone the issues and concerns of having to blend ethanol past the E10“blendwall” at least for 2014. Likewise, the EPA has not finalized the 2015 renewable fuel volumes as required by the November 30, 2014 statutory deadline.As a result, the future of the RFS still remains undecided and is in need of a legislative re-write or repeal to provide a stable business platform for theobligated parties.With potentially uncertain supplies, the advanced biofuels programs may present specific challenges in that we may have to enter into arrangements withother parties or purchase credits from the EPA to meet our obligations to use advanced biofuels, including biomass-based diesel and cellulosic biofuel.Additionally, the EPA did not finalize the 2013 RFS2 renewable fuel obligations until August 2013. Therefore, it is uncertain how industry will comply withmeeting the advanced biofuels obligation. The continued delay of the final rule for 2014 has also delayed the day when compliance reports are due for 2013.In 2012 and 2013, the EPA also discovered that 173 million biodiesel renewable identification numbers (“RINs”) used to meet the annual requirement forthat fuel had been fraudulently created and sold to unsuspecting third parties, including MPC. The EPA finalized a rule establishing a quality assuranceprogram for RINs purchased to help meet the annual biofuel requirements under the RFS2 program. The program is aimed at reducing the risks that RINs arefraudulently created or sold. We have already instituted internal procedures to help mitigate that risk.We made investments in infrastructure capable of expanding biodiesel blending capability to help comply with the biodiesel RFS2 requirement by buyingand blending biodiesel into our refined diesel product, and by buying needed biodiesel RINs in the EPA-created biodiesel RINs market. On April 1, 2014, wepurchased a facility in Cincinnati, Ohio, which currently produces biodiesel, glycerin and other by-products. The capacity of the plant is approximately 60million gallons per year. As a producer of biodiesel, we now generate RINs, thereby reducing our reliance on the external RIN market.On October 13, 2010, the EPA issued a partial waiver decision under the CAA to allow for an increase in the amount of ethanol permitted to be blended intogasoline from E10 to E15 for 2007 and newer light-duty motor vehicles. On January 21, 2011, the EPA issued a second waiver for the use of E15 in vehiclesmodel year 2001-2006. There are numerous issues, including state and federal regulatory issues, which need to be addressed before E15 can be marketed foruse in traditional gasoline engines.There will be compliance costs and uncertainties regarding how we will comply with the various requirements contained in EISA and related regulations. Wemay experience a decrease in demand for refined petroleum products due to an increase in combined fleet mileage or due to refined petroleum products beingreplaced by renewable fuels.On March 3, 2014, the EPA signed the final Tier 3 fuel standards. The final Tier 3 fuel standards require, among other things, a lower annual average sulfurlevel in gasoline to no more than 10 parts per million (“ppm”) beginning in calendar year 2017. In addition, gasoline refiners and importers may not exceed amaximum per-gallon sulfur standard of 80 ppm while retailers may not exceed a maximum per-gallon sulfur standard of 95 ppm. We anticipate that we willspend an estimated $750 million to $1 billion between 2014 and 2019 for capital expenditures necessary to comply with these standards.24Table of ContentsTrademarks, Patents and LicensesOur Marathon trademark is material to the conduct of our refining and marketing operations, and our Speedway trademark is material to the conduct of ourretail marketing operations. We currently hold a number of U.S. and foreign patents and have various pending patent applications. Although in the aggregateour patents and licenses are important to us, we do not regard any single patent or license or group of related patents or licenses as critical or essential to ourbusiness as a whole. In general, we depend on our technological capabilities and the application of know-how rather than patents and licenses in the conductof our operations.EmployeesWe had approximately 45,340 regular employees as of December 31, 2014, which includes approximately 35,400 employees of Speedway.Certain hourly employees at our Canton, Catlettsburg, Galveston Bay and Texas City refineries are represented by the United Steel, Paper and Forestry,Rubber, Manufacturing, Energy, Allied Industrial and Service Workers Union. The labor agreements for our Canton, Catlettsburg and Galveston Bayrefineries expired on January 31, 2015 and no successor agreements have been negotiated. As of February 1, 2015 our Catlettsburg and Galveston Bayrefineries are experiencing work stoppages. The labor agreement for our Canton refinery was extended on a rolling 24-hour notice of expiration basis. Theimpacted refineries continue to operate as normal. The labor agreement for our Texas City refinery is due to expire on March 31, 2015. The InternationalBrotherhood of Teamsters represents certain hourly employees at our Detroit refinery under a labor agreement that is scheduled to expire in 2019. In addition,they represent certain hourly employees at Speedway under agreements that cover certain outlets in New York and New Jersey that expire between September14, 2015 and June 30, 2016.Executive and Corporate Officers of the RegistrantThe executive and corporate officers of MPC and their ages as of February 1, 2015, are as follows:Name Age Position with MPCGary R. Heminger 61 President and Chief Executive OfficerPamela K.M. Beall 58 Senior Vice President, Corporate Planning, Government & Public AffairsRichard D. Bedell 60 Senior Vice President, RefiningTimothy T. Griffith 45 Vice President, Finance and Investor Relations, and TreasurerJohn R. Haley(a) 58 Vice President, TaxThomas M. Kelley 55 Senior Vice President, MarketingAnthony R. Kenney 61 President, Speedway LLCRodney P. Nichols 62 Senior Vice President, Human Resources and Administrative ServicesC. Michael Palmer 61 Senior Vice President, Supply, Distribution and PlanningJohn J. Quaid 43 Vice President and ControllerGeorge P. Shaffner 55 Senior Vice President, Transportation and LogisticsJohn S. Swearingen(a) 55 Vice President, Health, Environment, Safety & SecurityDonald C. Templin 51 Senior Vice President and Chief Financial OfficerDonald W. Wehrly(a) 55 Vice President and Chief Information OfficerJ. Michael Wilder 62 Vice President, General Counsel and Secretary(a) Corporate officer.Mr. Heminger was appointed president and chief executive officer effective June 30, 2011. Prior to this appointment, Mr. Heminger was president ofMarathon Petroleum Company LP (formerly known as Marathon Ashland Petroleum LLC and Marathon Petroleum Company LLC), currently a whollyowned subsidiary of MPC and prior to the Spinoff, a wholly owned subsidiary of Marathon Oil. He assumed responsibility as president of MarathonPetroleum Company LP in September 2001.Ms. Beall was appointed senior vice president, Corporate Planning, Government & Public Affairs effective January 1, 2014. Prior to this appointment, Ms.Beall was vice president, Investor Relations and Government & Public Affairs beginning June 30, 2011 and was vice president, Products Supply andOptimization of Marathon Petroleum Company LP beginning in June 2010. She served as vice president of Global Procurement for Marathon Oil Companybetween 2007 and 2010 and prior to that as organizational vice president, Business Development—Downstream.25Table of ContentsMr. Bedell was appointed senior vice president, Refining effective June 30, 2011. Prior to this appointment, Mr. Bedell served in the same capacity forMarathon Petroleum Company LP beginning in June 2010 and as manager, Louisiana Refining Division beginning in 2001.Mr. Griffith was appointed vice president, Finance and Investor Relations, and treasurer effective January 1, 2014. Prior to this appointment, Mr. Griffith wasvice president of Finance and treasurer beginning August 1, 2011. Mr. Griffith was vice president Investor Relations and treasurer of Smurfit-Stone ContainerCorporation, a packaging manufacturer, in St. Louis, Missouri, from 2008 to 2011.Mr. Haley was appointed vice president, Tax effective June 1, 2013. Prior to this appointment, Mr. Haley served as director of Tax beginning in July 2011and as a tax manager for Marathon Oil Company beginning in 1996.Mr. Kelley was appointed senior vice president, Marketing effective June 30, 2011. Prior to this appointment, Mr. Kelley served in the same capacity forMarathon Petroleum Company LP beginning in January 2010. Previously, he served as director of Crude Supply and Logistics for Marathon PetroleumCompany LP from January 2008, and as a Brand Marketing manager for eight years prior to that.Mr. Kenney has served as president of Speedway LLC since August 2005.Mr. Nichols was appointed senior vice president, Human Resources and Administrative Services effective March 1, 2012. Prior to this appointment,Mr. Nichols served as vice president, Human Resources and Administrative Services beginning on June 30, 2011 and served in the same capacity forMarathon Petroleum Company LP beginning in April 1998.Mr. Palmer was appointed senior vice president, Supply, Distribution and Planning effective June 30, 2011. Prior to this appointment, Mr. Palmer served asvice president, Supply, Distribution & Planning for Marathon Petroleum Company LP beginning in June 2010. He served as Crude Supply and Logisticsdirector for Marathon Petroleum Company LP beginning in February 2010, and as senior vice president, Oil Sands Operations and Commercial Activities forMarathon Oil Canada Corporation beginning in 2007.Mr. Quaid was appointed vice president and controller effective June 23, 2014. Prior to this appointment, Mr. Quaid was vice president of Iron Ore at UnitedStates Steel Corporation (“U. S. Steel”), an integrated steel producer, beginning in January 2014. Previously, Mr. Quaid served in various leadership positionsat U. S. Steel since February 2002, including vice president and treasurer beginning in August 2011, controller, North American Flat-Rolled Operationsbeginning in July 2010 and assistant corporate controller beginning in 2008.Mr. Shaffner was appointed senior vice president, Transportation and Logistics effective June 30, 2011. Prior to this appointment, Mr. Shaffner served in thesame capacity for Marathon Petroleum Company LP beginning in June 2010. Previously, Mr. Shaffner served as Michigan Refining Division managerbeginning in October 2006.Mr. Swearingen was appointed vice president of Health, Environmental, Safety & Security effective June 30, 2011. Prior to this appointment, Mr. Swearingenwas president of Marathon Pipe Line LLC beginning in 2009 and the Illinois Refining Division manager beginning in November 2001.Mr. Templin was appointed senior vice president and chief financial officer effective June 30, 2011. Prior to this appointment, Mr. Templin was a partner atPricewaterhouseCoopers LLP, an audit, tax and advisory services provider, with various audit and management responsibilities beginning in 1996.Mr. Wehrly was appointed vice president and chief information officer effective June 30, 2011. Prior to this appointment, Mr. Wehrly was the manager ofInformation Technology Services for Marathon Petroleum Company LP beginning in 2003.Mr. Wilder was appointed vice president, general counsel and secretary effective June 30, 2011. Prior to this appointment, Mr. Wilder was associate generalcounsel of Marathon Oil Company beginning in 2010 and general counsel and secretary of Marathon Petroleum Company LP beginning in 1997.Michael G. Braddock, who was vice president and controller since June 30, 2011, retired effective October 1, 2014.Garry L. Peiffer, who was executive vice president of Corporate Planning and Investor & Government Relations since June 30, 2011, retired effective January1, 2014.26Table of ContentsAvailable InformationGeneral information about MPC, including Corporate Governance Principles and Charters for the Audit Committee, Compensation Committee and CorporateGovernance and Nominating Committee, can be found athttp://ir.marathonpetroleum.com. In addition, our Code of Business Conduct and Code of Ethics for Senior Financial Officers are also available in this samelocation.MPC uses its website, www.marathonpetroleum.com, as a channel for routine distribution of important information, including news releases, analystpresentations, financial information and market data. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, aswell as any amendments and exhibits to those reports, are available free of charge through our website as soon as reasonably practicable after the reports arefiled or furnished with the Securities and Exchange Commission. These documents are also available in hard copy, free of charge, by contacting our InvestorRelations office. In addition, our website allows investors and other interested persons to sign up to automatically receive email alerts when we post newsreleases and financial information on our website. Information contained on our website is not incorporated into this Annual Report on Form 10-K or othersecurities filings.27Table of ContentsItem 1A. Risk FactorsYou should carefully consider each of the following risks and all of the other information contained in this Annual Report on Form 10-K in evaluating usand our common stock. Some of these risks relate principally to our business and the industry in which we operate, while others relate to the ownership ofour common stock.Our business, financial condition, results of operations or cash flows could be materially and adversely affected by any of these risks, and, as a result, thetrading price of our common stock could decline.Risks Relating to our BusinessA substantial or extended decline in refining and marketing gross margins would reduce our operating results and cash flows and could materially andadversely impact our future rate of growth, the carrying value of our assets and our ability to execute share repurchases and continue the payment ofour base dividend.Our operating results, cash flows, future rate of growth, the carrying value of our assets and our ability to execute share repurchases and continue the paymentof our base dividend are highly dependent on the margins we realize on our refined products. The measure of the difference between market prices for refinedproducts and crude oil, or crack spread, is commonly used by the industry as a proxy for refining and marketing gross margins. Historically, refining andmarketing gross margins have been volatile, and we believe they will continue to be volatile. Our margins from the sale of gasoline and other refinedproducts are influenced by a number of conditions, including the price of crude oil. We do not produce crude oil and must purchase all of the crude oil werefine. The price of crude oil and the price at which we can sell our refined products may fluctuate independently due to a variety of regional and globalmarket conditions. Any overall change in crack spreads will impact our refining and marketing gross margins. Many of the factors influencing a change incrack spreads and refining and marketing gross margins are beyond our control. These factors include:•worldwide and domestic supplies of and demand for crude oil and refined products;•the cost of crude oil and other feedstocks to be manufactured into refined products;•the prices realized for refined products;•utilization rates of refineries;•natural gas and electricity supply costs incurred by refineries;•the ability of the members of OPEC to agree to and maintain production controls;•political instability or armed conflict in oil and natural gas producing regions;•local weather conditions;•seasonality of demand in our marketing area due to increased highway traffic in the spring and summer months;•natural disasters such as hurricanes and tornadoes;•the price and availability of alternative and competing forms of energy;•domestic and foreign governmental regulations and taxes; and•local, regional, national and worldwide economic conditions.Some of these factors can vary by region and may change quickly, adding to market volatility, while others may have longer-term effects. The longer-termeffects of these and other factors on refining and marketing gross margins are uncertain. We purchase our crude oil and other refinery feedstocks weeks beforewe refine them and sell the refined products. Price level changes during the period between purchasing feedstocks and selling the refined products from thesefeedstocks could have a significant effect on our financial results. We also purchase refined products manufactured by others for resale to our customers. Pricechanges during the periods between purchasing and reselling those refined products also could have a material adverse effect on our business, financialcondition, results of operations and cash flows.Lower refining and marketing gross margins may reduce the amount of refined products we produce, which may reduce our revenues, income from operationsand cash flows. Significant reductions in refining and marketing gross margins could require us to reduce our capital expenditures, impair the carrying valueof our assets (such as property, plant and equipment, inventory or goodwill), decrease or eliminate our share repurchase activity and our base dividend.28Table of ContentsOur operations are subject to business interruptions and casualty losses. Failure to manage risks associated with business interruptions could adverselyimpact our operations, financial condition, results of operations and cash flows.Our operations are subject to business interruptions due to scheduled refinery turnarounds, unplanned maintenance or unplanned events such as explosions,fires, refinery or pipeline releases or other incidents, power outages, severe weather, labor disputes, or other natural or man-made disasters, such as acts ofterrorism. For example, pipelines provide a nearly-exclusive form of transportation of crude oil to, or refined products from, some of our refineries. In suchinstances, a prolonged interruption in service of such a pipeline could materially and adversely affect the operations, profitability and cash flows of theimpacted refinery.Explosions, fires, refinery or pipeline releases or other incidents involving our assets or operations could result in serious personal injury or loss of humanlife, significant damage to property and equipment, environmental pollution, impairment of operations and substantial losses to us. Damages resulting froman incident involving any of our assets or operations may result in our being named as a defendant in one or more lawsuits asserting potentially substantialclaims or in our being assessed potentially substantial fines by governmental authorities.We do not insure against all potential losses, and, therefore, our business, financial condition, results of operations and cash flows could be adverselyaffected by unexpected liabilities and increased costs.We maintain insurance coverage in amounts we believe to be prudent against many, but not all, potential liabilities arising from operating hazards.Uninsured liabilities arising from operating hazards, including but not limited to, explosions, fires, refinery or pipeline releases or other incidents involvingour assets or operations, could reduce the funds available to us for capital and investment spending and could have a material adverse effect on our business,financial condition, results of operations and cash flows. Historically, we also have maintained insurance coverage for physical damage and resultingbusiness interruption to our major facilities, with significant self-insured retentions. In the future, we may not be able to maintain insurance of the types andamounts we desire at reasonable rates.We rely on the performance of our information technology systems, the failure of which could have an adverse effect on our business, financialcondition, results of operations and cash flows.We are heavily dependent on our information technology systems and network infrastructure and maintain and rely upon certain critical information systemsfor the effective operation of our business. These information systems involve data network and telecommunications, Internet access and websitefunctionality, and various computer hardware equipment and software applications, including those that are critical to the safe operation of our business.These systems and infrastructure are subject to damage or interruption from a number of potential sources including natural disasters, software viruses or othermalware, power failures, cyber-attacks and other events. We also face various other cyber-security threats, including threats to gain unauthorized access tosensitive information or to render data or systems unusable. To protect against such attempts of unauthorized access or attack, we have implementedinfrastructure protection technologies and disaster recovery plans. There can be no guarantee such plans, to the extent they are in place, will be effective.The retail market is diverse and highly competitive, and very aggressive competition could adversely impact our business.We face strong competition in the market for the sale of retail gasoline, diesel fuel and merchandise. Our competitors include outlets owned or operated byfully integrated major oil companies or their dealers or jobbers, and other well-recognized national or regional retail outlets, often selling gasoline ormerchandise at very competitive prices. Several non-traditional retailers such as supermarkets, club stores and mass merchants are in the retail business. Thesenon-traditional gasoline retailers have obtained a significant share of the transportation fuels market and we expect their market share to grow. Because oftheir diversity, integration of operations, experienced management and greater financial resources, these companies may be better able to withstand volatilemarket conditions or levels of low or no profitability in the retail segment of the market. In addition, these retailers may use promotional pricing or discounts,both at the pump and in the store, to encourage in-store merchandise sales. These activities by our competitors could pressure us to offer similar discounts,adversely affecting our profit margins. Additionally, the loss of market share by our convenience stores to these and other retailers relating to either gasolineor merchandise could have a material adverse effect on our business, financial condition, results of operations and cash flows.The development, availability and marketing of alternative and competing fuels in the retail market could adversely impact our business. We compete withother industries that provide alternative means to satisfy the energy and fuel needs of our consumers. Increased competition from these alternatives as a resultof governmental regulations, technological advances and consumer demand could have an impact on pricing and demand for our products and ourprofitability.29Table of ContentsWe are subject to interruptions of supply and increased costs as a result of our reliance on third-party transportation of crude oil and refined products.We utilize the services of third parties to transport crude oil and refined products to and from our refineries. In addition to our own operational risks discussedabove, we could experience interruptions of supply or increases in costs to deliver refined products to market if the ability of the pipelines, railways or vesselsto transport crude oil or refined products is disrupted because of weather events, accidents, governmental regulations or third-party actions. A prolongeddisruption of the ability of the pipelines, railways or vessels to transport crude oil or refined products to or from one or more of our refineries could have amaterial adverse effect on our business, financial condition, results of operations and cash flows.We may incur losses to our business as a result of our forward-contract activities and derivative transactions.We currently use commodity derivative instruments, and we expect to enter into these types of transactions in the future. A failure of a futures commissionmerchant or counterparty to perform would affect these transactions. To the extent the instruments we utilize to manage these exposures are not effective, wemay incur losses related to the ineffective portion of the derivative transaction or costs related to moving the derivative positions to another futurescommission merchant or counterparty once a failure has occurred.We have significant debt obligations; therefore our business, financial condition, results of operations and cash flows could be harmed by adeterioration of our credit profile, a decrease in debt capacity or unsecured commercial credit available to us, or by factors adversely affecting creditmarkets generally.At December 31, 2014, our total debt obligations for borrowed money and capital lease obligations were $6.7 billion. We may incur substantial additionaldebt obligations in the future.Our indebtedness may impose various restrictions and covenants on us that could have material adverse consequences, including:•increasing our vulnerability to changing economic, regulatory and industry conditions;•limiting our ability to compete and our flexibility in planning for, or reacting to, changes in our business and the industry;•limiting our ability to pay dividends to our stockholders;•limiting our ability to borrow additional funds; and•requiring us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available forworking capital, capital expenditures, acquisitions, share repurchases, dividends and other purposes.A decrease in our debt or commercial credit capacity, including unsecured credit extended by third-party suppliers, or a deterioration in our credit profilecould increase our costs of borrowing money and/or limit our access to the capital markets and commercial credit, which could materially and adverselyaffect our business, financial condition, results of operations and cash flows.We have a trade receivables securitization facility that provides liquidity of up to $1.3 billion depending on the amount of eligible domestic trade accountsreceivables. In periods of lower prices, we may not have sufficient eligible accounts receivables to support full availability of this facility.30Table of ContentsHistoric or current operations could subject us to significant legal liability or restrict our ability to operate.We currently are defending litigation and anticipate we will be required to defend new litigation in the future. Our operations and those of our predecessorscould expose us to litigation and civil claims by private plaintiffs for alleged damages related to contamination of the environment or personal injuriescaused by releases of hazardous substances from our facilities, products liability, consumer credit or privacy laws, product pricing or antitrust laws or anyother laws or regulations that apply to our operations. While an adverse outcome in most litigation matters would not be expected to be material to us, inclass-action litigation, large classes of plaintiffs may allege damages relating to extended periods of time or other alleged facts and circumstances that couldincrease the amount of potential damages. Attorneys general and other government officials may pursue litigation in which they seek to recover civildamages from companies on behalf of a state or its citizens for a variety of claims, including violation of consumer protection and product pricing laws ornatural resources damages. We are defending litigation of that type and anticipate that we will be required to defend new litigation of that type in the future.If we are not able to successfully defend such litigation, it may result in liability to our company that could materially and adversely affect our business,financial condition, results of operations and cash flows. We do not have insurance covering all of these potential liabilities. In addition to substantialliability, plaintiffs in litigation may also seek injunctive relief which, if imposed, could have a material adverse effect on our future business, financialcondition, results of operations and cash flows.A portion of our workforce is unionized, and we may face labor disruptions that could materially and adversely affect our business, financial condition,results of operations and cash flows.Approximately 38 percent of our refining employees are covered by collective bargaining agreements. The contracts for the hourly refinery workers at ourTexas City and Detroit refineries are scheduled to expire in March 2015 and January 2019, respectively. The contracts for the hourly refinery workers at ourCanton, Catlettsburg and Galveston Bay refineries expired on January 31, 2015 and no successor agreements have been negotiated. In addition, threeagreements scheduled to expire on September 14, 2015, March 14, 2016 and June 30, 2016, respectively, cover certain Speedway LLC hourly employees atcertain outlets in New York and New Jersey. These contracts may be renewed at an increased cost to us. In addition, we have experienced, or may experience,work stoppages as a result of labor disagreements. Any prolonged work stoppages disrupting operations could have a material adverse effect on our business,financial condition, results of operations and cash flows.One of our subsidiaries acts as the general partner of a publicly traded master limited partnership, MPLX, which may involve a greater exposure tocertain legal liabilities than existed under our historic business operations.One of our subsidiaries acts as the general partner of MPLX, a publicly traded master limited partnership. Our control of the general partner of MPLX mayincrease the possibility of claims of breach of fiduciary duties including claims of conflicts of interest related to MPLX. Any liability resulting from suchclaims could have a material adverse effect on our future business, financial condition, results of operations and cash flows.If foreign ownership of our stock exceeds certain levels, we could be prohibited from operating inland river vessels, which could materially andadversely affect our business, financial condition, results of operations and cash flows.The Shipping Act of 1916 and Merchant Marine Act of 1920, which we refer to collectively as the Maritime Laws, generally require that vessels engaged inU.S. coastwise trade be owned by U.S. citizens. Among other requirements to establish citizenship, corporations that own such vessels must be owned at least75 percent by U.S. citizens. If we fail to maintain compliance with the Maritime Laws, we would be prohibited from operating vessels in the U.S. inlandwaters. Such a prohibition could materially and adversely affect our business, financial condition, results of operations and cash flows.We are subject to certain continuing contingent liabilities of Marathon Oil relating to taxes and other matters and to potential liabilities pursuant to thetax sharing agreement we entered into with Marathon Oil that could materially and adversely affect our business, financial condition, results ofoperations and cash flows.Although the Spinoff occurred in mid 2011, certain liabilities of Marathon Oil could become our obligations. For example, under the Internal Revenue Codeof 1986 (the “Code”) and related rules and regulations, each corporation that was a member of the Marathon Oil consolidated tax reporting group during anytaxable period or portion of any taxable period ending on or before the effective time of the Spinoff is jointly and severally liable for the federal income taxliability of the entire Marathon Oil consolidated tax reporting group for that taxable period. In connection with the Spinoff, we entered into a tax sharingagreement with Marathon Oil that allocates the responsibility for prior period taxes of the Marathon Oil consolidated tax reporting group between us andMarathon Oil. However, if Marathon Oil is unable to pay any prior period taxes for which it is responsible, we could be required to pay the entire amount ofsuch taxes. Other provisions of federal law establish similar liability for other matters, including laws governing tax-qualified pension plans as well as othercontingent liabilities.31Table of ContentsAlso pursuant to the tax sharing agreement, following the Spinoff we are responsible generally for all taxes attributable to us or any of our subsidiaries,whether accruing before, on or after the Spinoff. We also agreed to be responsible for, and indemnify Marathon Oil with respect to, all taxes arising as a resultof the Spinoff (or certain internal restructuring transactions) failing to qualify as transactions under Sections 368(a) and 355 of the Code for U.S. federalincome tax purposes to the extent such tax liability arises as a result of any breach of any representation, warranty, covenant or other obligation by us orcertain affiliates made in connection with the issuance of the private letter ruling relating to the Spinoff or in the tax sharing agreement. In addition, weagreed to indemnify Marathon Oil for specified tax-related liabilities associated with our 2005 acquisition of the minority interest in our refining jointventure from Ashland Inc. Our indemnification obligations to Marathon Oil and its subsidiaries, officers and directors are not limited or subject to any cap. Ifwe are required to indemnify Marathon Oil and its subsidiaries and their respective officers and directors under the tax sharing agreement, we may be subjectto substantial liabilities. At this time, we cannot precisely quantify the amount of these liabilities that have been assumed pursuant to the tax sharingagreement, and there can be no assurances as to their final amounts. The tax liabilities described in this paragraph could have a material adverse effect on ourbusiness, financial condition, results of operation and cash flows.The Spinoff could be determined not to qualify as a tax-free transaction, and Marathon Oil and its stockholders could be subject to material amounts oftaxes and, in certain circumstances, we could be required to indemnify Marathon Oil for material taxes pursuant to indemnification obligations underthe tax sharing agreement.Marathon Oil received a private letter ruling from the Internal Revenue Service (the “IRS”), to the effect that, among other things, the distribution of shares ofMPC common stock in the Spinoff qualifies as tax-free to Marathon Oil, us and Marathon Oil stockholders for U.S. federal income tax purposes underSections 355 and 368(a) and related provisions of the Code. If the factual assumptions or representations made in the private letter ruling request areinaccurate or incomplete in any material respect, then Marathon Oil would not be able to continue to rely on the ruling. We are not aware of any facts orcircumstances that would cause the assumptions or representations that were relied on in the private letter ruling to be inaccurate or incomplete in anymaterial respect. If, notwithstanding receipt of the private letter ruling, the Spinoff were determined not to qualify under Section 355 of the Code, MarathonOil would be subject to tax as if it had sold its shares of common stock of our company in a taxable sale for their fair market value and would recognize ataxable gain in an amount equal to the excess of the fair market value of such shares over its tax basis in such shares.With respect to taxes and other liabilities that could be imposed on Marathon Oil in connection with the Spinoff (and certain related transactions) as a resultof a final determination that is inconsistent with the anticipated tax consequences as set forth in the private letter ruling, we would be liable to Marathon Oilunder the tax sharing agreement for any such taxes or liabilities attributable to actions taken by or with respect to us, any of our affiliates, or any person that,after the Spinoff, is our affiliate. We may be similarly liable if we breach specified representations or covenants set forth in the tax sharing agreement. If we arerequired to indemnify Marathon Oil for taxes incurred as a result of the Spinoff (or certain related transactions) being taxable to Marathon Oil, it would have amaterial adverse effect on our business, financial condition, results of operations and cash flows.We have potential liabilities pursuant to the separation and distribution agreement we entered into with Marathon Oil in connection with the Spinoffthat could materially and adversely affect our business, financial condition, results of operations and cash flows.In connection with the Spinoff, we entered into a separation and distribution agreement with Marathon Oil that provides for, among other things, theprincipal corporate transactions that were required to affect the Spinoff, certain conditions to the Spinoff and provisions governing the relationship betweenour company and Marathon Oil with respect to and resulting from the Spinoff. Among other things, the separation and distribution agreement provides forindemnification obligations designed to make us financially responsible for substantially all liabilities that may exist relating to our downstream businessactivities, whether incurred prior to or after the Spinoff, as well as certain obligations of Marathon Oil assumed by us. Our obligations to indemnify MarathonOil under the circumstances set forth in the separation and distribution agreement could subject us to substantial liabilities. Marathon Oil also agreed toindemnify us for certain liabilities. However, third parties could seek to hold us responsible for any of the liabilities retained by Marathon Oil, and there canbe no assurance that the indemnity from Marathon Oil will be sufficient to protect us against the full amount of such liabilities, that Marathon Oil will be ableto fully satisfy its indemnification obligations or that Marathon Oil’s insurers will cover us for liabilities associated with occurrences prior to the Spinoff.Moreover, even if we ultimately succeed in recovering from Marathon Oil or its insurers any amounts for which we are held liable, we may be temporarilyrequired to bear these losses ourselves. If Marathon Oil is unable to satisfy its indemnification obligations, the underlying liabilities could have a materialadverse effect on our business, financial condition, results of operations and cash flows.32Table of ContentsSignificant acquisitions involve the integration of new assets or businesses and present substantial risks that could adversely affect our business,financial conditions, results of operations and cash flows.Significant transactions involving the addition of new assets or businesses present potential risks, which may include, among others:•Inaccurate assumptions about future synergies, revenues, capital expenditures and operating costs;•An inability to successfully integrate assets or businesses we acquire;•A decrease in our liquidity resulting from using a portion of our available cash or borrowing capacity under our revolving credit agreement tofinance transactions;•A significant increase in our interest expense or financial leverage if we incur additional debt to finance transactions;•The assumption of unknown environmental and other liabilities, losses or costs for which we are not indemnified or for which our indemnity isinadequate;•The diversion of management’s attention from other business concerns; and•The incurrence of other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring charges.Risks Relating to Our IndustryChanges in environmental or other laws or regulations may reduce our refining and marketing gross margin and may result in substantial capitalexpenditures and operating costs that could materially and adversely affect our business, financial condition, results of operations and cash flows.Various laws and regulations are expected to impose increasingly stringent and costly requirements on our operations, which may reduce our refining andmarketing gross margin. Laws and regulations expected to become more stringent relate to the following:•the emission or discharge of materials into the environment,•solid and hazardous waste management,•pollution prevention,•greenhouse gas emissions,•characteristics and composition of gasoline and diesel fuels,•public and employee safety and health, and•facility security.The specific impact of laws and regulations on us and our competitors may vary depending on a number of factors, including the age and location ofoperating facilities, marketing areas, crude oil and feedstock sources and production processes. We may be required to make expenditures to modifyoperations, install pollution control equipment, perform site cleanups or curtail operations that could materially and adversely affect our business, financialcondition, results of operations and cash flows.We believe the issue of climate change will likely continue to receive scientific and political attention, with the potential for further laws and regulations thatcould affect our operations. The U.S. pledge in 2009, as part of the Copenhagen Accord, to reduce greenhouse gas emissions 17 percent below 2005 levels by2020 remains in effect and was reaffirmed in the President’s 2013 Climate Action Plan. Meetings of the United Nations Climate Change Conference,however, have produced no legally binding emission reduction requirements on the U.S. Also in 2009, the EPA issued an “endangerment finding” thatgreenhouse gas emissions contribute to air pollution that endangers public health and welfare. Related to the endangerment finding, in April 2010, the EPAfinalized a greenhouse gas emission standard for mobile sources (cars and other light duty vehicles). The endangerment finding, the mobile source standardand the EPA’s determination that greenhouse gases are subject to regulation under the Clean Air Act resulted in permitting of greenhouse gas emissions atstationary sources, but as a result of the EPA’s “tailoring rule,” permit applicability was limited to larger sources such as refineries. Legal challenges werefiled against these EPA actions. In June 2014, the U.S. Supreme Court ruled that the Clean Air Act Prevention of Significant Deterioration program for newand modified stationary sources is not triggered by greenhouse gas emissions alone. The U.S. Supreme Court did, however, uphold the requirement for new ormodified stationary sources that will also emit a criteria pollutant to control greenhouse gas emissions through Best Available Control Technology.Implementing Best Available Control Technology may result in increased costs to our operations.33Table of ContentsIn 2013, the Obama administration developed the social cost of carbon (“SCC”). The SCC is to be used by the EPA and other federal agencies in regulatorycost-benefit analyses to take into account alleged broad economic consequences associated with changes to emissions of greenhouse gases. The SCC wasfirst issued in 2010. In 2013, the Obama administration significantly increased the estimate to $36 per ton. In response to the regulated community andCongress’ critiques of how the SCC was developed, the Office of Management and Budget provided an opportunity to comment on the SCC, but ultimatelydid not make any significant revisions. In December 2014, the White House Council on Environmental Quality (“CEQ”) issued new draft guidance forassessing greenhouse gas emissions under the National Environmental Policy Act (“NEPA”), adding for the first time language that requires that analyses alsoinclude the impact of climate change on projects, including using the SCC when analyzing costs and benefits of a project. While the impact of a higher SCCin future regulations is not known at this time, it may result in increased costs to our operations.In 2013, the EPA proposed carbon emission standards for new power plants built in the future. In June 2014, the EPA proposed the Clean Power Plan, whichwould reduce carbon emissions from existing power plants. Through the Plan, the EPA proposes to reduce nationwide carbon emissions from the powergeneration sector by 30 percent below 2005 levels. These standards, if finalized, could increase our electricity costs and potentially reduce the reliability ofour electricity supply.In the future, Congress may again consider legislation on greenhouse gas emissions or a carbon tax. Other measures to address greenhouse gas emissions arein various phases of review or implementation in the U.S. These measures include state actions to develop statewide or regional programs to impose emissionreductions. Private party litigation is pending against federal and certain state governmental entities seeking additional greenhouse gas emission reductionsbeyond those currently being undertaken. These actions could result in increased costs to operate and maintain our facilities, capital expenditures to installnew emission controls and costs to administer any carbon trading or tax programs implemented. Although uncertain, these developments could increase ourcosts, reduce the demand for the products we sell and create delays in our obtaining air pollution permits for new or modified facilities.In November 2014, the EPA proposed a tightening of the primary (health) ozone National Ambient Air Quality Standards (“NAAQS”) to within the range of65 to 70 parts per billion (“ppb”), while accepting comments on levels as low as 60 ppb and an option of maintaining the current ozone level of 75 ppb. Inaddition, the EPA is asking for comment on a new secondary (welfare) ozone NAAQS using a three-month seasonal index. The final rule is expected to bepromulgated in late 2015. If timely finalized, the EPA would then implement a revised ozone NAAQS with attainment and nonattainment designations bylate 2017, using 2014-2016 air quality monitor data. A lower primary ozone standard may not by attainable in many areas and could result in thecancellation or delay of capital projects at our facilities.The EISA, among other things, sets a target of 35 miles per gallon for the combined fleet of cars and light trucks in the U.S. by model year 2020 and containsa second Renewable Fuel Standard commonly referred to as RFS2. In August 2012, the EPA and the National Highway Traffic Safety Administration jointlyadopted regulations that establish average industry fleet fuel economy standards for passenger cars and light trucks of up to 41 miles per gallon by modelyear 2021 and average fleet fuel economy standards of up to 49.7 miles per gallon by model year 2025 (the standards from 2022 to 2025 are thegovernment’s current estimate but will require further rulemaking). Increases in fuel mileage standards and the increased use of renewable fuels (includingethanol and advanced biofuels) may reduce demand for refined products. Governmental regulations encouraging the use of new or alternative fuels couldalso pose a competitive threat to our operations.The RFS2 required the total volume of renewable transportation fuels sold or introduced annually in the U.S. to reach 16.55 billion gallons in 2013 andincreases to 36.0 billion gallons by 2022. The RFS2 presents production and logistics challenges for both the renewable fuels and petroleum refiningindustries, and may continue to require additional capital expenditures or expenses by us to accommodate increased renewable fuels use. Gasolineconsumption has been lower than forecasted by the EPA, which has led to concerns that the renewable fuel volumes may not be met. As a result, the EPAdelayed issuance of the 2014 RFS2 standards and has not finalized the 2015 renewable fuel volumes as required by the November 30, 2014 statutorydeadline. The advanced biofuels program, a subset of the RFS2 requirements, creates uncertainties and presents challenges of supply, and may require that weand other refiners and other obligated parties purchase credits from the EPA to meet our obligations.Tax incentives and other subsidies have also made renewable fuels more competitive with refined products than they otherwise would have been, which mayfurther reduce refined product margins.On March 3, 2014, the EPA signed the final Tier 3 fuel standards. The final Tier 3 fuel standards require, among other things, a lower annual average sulfurlevel in gasoline to no more than 10 parts per million (“ppm”) beginning in calendar year 2017. In addition, gasoline refiners and importers may not exceed amaximum per-gallon sulfur standard of 80 ppm, while retailers may not exceed a maximum per-gallon sulfur standard of 95 ppm. We anticipate that we willspend an estimated $750 million to $1 billion between 2014 and 2019 for capital expenditures necessary to comply with these standards.34Table of ContentsWe have in the past owned or operated, and currently own and operate, convenience stores and other locations with USTs in various states. The operation ofUSTs poses risks, including soil and groundwater contamination, at our previously or currently operated locations. Such contamination could result insubstantial cleanup costs, fines or civil liabilities.We have in the past and will continue to dispose of various wastes at lawful disposal sites. Environmental laws, including CERCLA, and similar state lawscan impose liability for the entire cost of cleanup on any responsible party, without regard to negligence or fault, and impose liability on us for the conductof others or conditions others have caused, or for our acts that complied with all applicable requirements when performed.Any failure by us to comply with existing or future laws or regulations could result in the imposition of administrative, civil or criminal penalties, injunctionslimiting our operations, investigatory or remedial liabilities or impediments to construction of additional facilities or equipment.Plans we may have to expand existing assets or construct new assets are subject to risks associated with societal and political pressures and other formsof opposition to the future development, transportation and use of carbon-based fuels. Such risks could adversely impact our business and ability torealize certain growth strategies.Our anticipated growth and planned expenditures are based upon the assumption that societal sentiment will continue to enable and existing regulations willremain intact to allow for the future development, transportation and use of carbon-based fuels. A portion of our growth strategy is dependent on our abilityto expand existing assets and to construct additional assets. However, policy decisions relating to the production, refining, transportation and marketing ofcarbon-based fuels are subject to political pressures and the influence of environmental and other special interest groups. The construction of new refineryprocessing units or crude oil or refined products pipelines, or the extension or expansion of existing assets, involve numerous political and legaluncertainties, many of which may cause significant delays or cost increases and most of which are beyond our control. Delays or cost increases related tocapital spending programs involving engineering, procurement and construction of facilities (including improvements and repairs to our existing facilities)could adversely affect our ability to achieve forecasted internal rates of return and operating results, thereby limiting our ability to grow and generate cashflows.Large capital projects can take many years to complete, and market conditions could deteriorate significantly between the project approval date andthe project startup date, negatively impacting project returns. If we are unable to complete capital projects at their expected costs and in a timelymanner, or if the market conditions assumed in our project economics deteriorate, our business, financial condition, results of operations and cash flowscould be materially and adversely affected.Delays or cost increases related to capital spending programs involving engineering, procurement and construction of facilities could materially adverselyaffect our ability to achieve forecasted internal rates of return and operating results. Delays in making required changes or upgrades to our facilities couldsubject us to fines or penalties as well as affect our ability to supply certain products we produce. Such delays or cost increases may arise as a result ofunpredictable factors, many of which are beyond our control, including:•denial of or delay in receiving requisite regulatory approvals and/or permits;•unplanned increases in the cost of construction materials or labor;•disruptions in transportation of components or construction materials;•adverse weather conditions, natural disasters or other events (such as equipment malfunctions, explosions, fires or spills) affecting our facilities, orthose of vendors or suppliers;•shortages of sufficiently skilled labor, or labor disagreements resulting in unplanned work stoppages;•market-related increases in a project’s debt or equity financing costs; and•nonperformance by, or disputes with, vendors, suppliers, contractors or subcontractors.Any one or more of these factors could have a significant impact on our ongoing capital projects. If we were unable to make up the delays associated withsuch factors or to recover the related costs, or if market conditions change, it could materially and adversely affect our business, financial condition, results ofoperations and cash flows.35Table of ContentsThe availability of crude oil and increases in crude oil prices may reduce profitability and refining and marketing gross margins.The profitability of our operations depends largely on the difference between the cost of crude oil and other feedstocks we refine and the selling prices weobtain for refined products. A portion of our crude oil is purchased from various foreign national oil companies, producing companies and trading companies,including suppliers from Canada, the Middle East and various other international locations. The market for crude oil and other feedstocks is largely a worldmarket. We are, therefore, subject to the attendant political, geographic and economic risks of such a market. If one or more major supply sources weretemporarily or permanently eliminated, we believe adequate alternative supplies of crude oil would be available, but it is possible we would be unable to findalternative sources of supply. If we are unable to obtain adequate crude oil volumes or are able to obtain such volumes only at unfavorable prices, ouroperations, sales of refined products and refining and marketing gross margins could be adversely affected, materially and adversely impacting our business,financial condition, results of operations and cash flows.Worldwide political and economic developments could materially and adversely impact our business, financial condition, results of operations andcash flows.In addition to impacting crude oil and other feedstock supplies, political and economic factors in global markets could have a material adverse effect on us inother ways. Hostilities in the Middle East or the occurrence or threat of future terrorist attacks could adversely affect the economies of the U.S. and otherdeveloped countries. A lower level of economic activity could result in a decline in energy consumption, which could cause our revenues and margins todecline and limit our future growth prospects. These risks could lead to increased volatility in prices for refined products. Additionally, these risks couldincrease instability in the financial and insurance markets and make it more difficult and/or costly for us to access capital and to obtain the insurancecoverage that we consider adequate. Additionally, tax policy, legislative or regulatory action and commercial restrictions could reduce our operatingprofitability. For example, the U.S. government could prevent or restrict exports of refined products or the conduct of business with certain foreign countries.Compliance with and changes in tax laws could materially and adversely impact our financial condition, results of operations and cash flows.We are subject to extensive tax liabilities, including federal and state income taxes and transactional taxes such as excise, sales and use, payroll, franchise,withholding and property taxes. New tax laws and regulations and changes in existing tax laws and regulations could result in increased expenditures by usfor tax liabilities in the future and could materially and adversely impact our financial condition, results of operations and cash flows. Additionally, many taxliabilities are subject to periodic audits by taxing authorities, and such audits could subject us to interest and penalties.Terrorist attacks aimed at our facilities or that impact our customers or the markets we serve could adversely affect our business.The U.S. government has issued warnings that energy assets in general, including the nation’s refining, pipeline and terminal infrastructure, may be futuretargets of terrorist organizations. The threat of terrorist attacks has subjected our operations to increased risks. Any future terrorist attacks on our facilities,those of our customers and, in some cases, those of other pipelines, could have a material adverse effect on our business. Similarly, any future terrorist attacksthat severely disrupt the markets we serve could materially and adversely affect our results of operations, financial position and cash flows.An easing or lifting of the U.S. crude oil export ban could adversely affect crack spreads or crude oil price differentials and have a material adverseeffect on our business, financial condition, results of operations and cash flows.Since the 1970s, the U.S. has restricted the ability of producers to export domestic crude oil. As total crude oil production has increased in the U.S. in recentyears, primarily due to the increase in shale crude oil production, there have been increasing calls by crude oil producers and others for an easing or lifting ofthe crude oil export ban. If the export ban were to be significantly eased or lifted, the price of domestic crude oil would likely rise, potentially impactingcrack spreads and price differentials between domestic and foreign crude oils. A deterioration of crack spreads or price differentials between domestic andforeign crude oils could have a material adverse effect on our business, financial condition, results or operations and cash flows.36Table of ContentsRisks Relating to Ownership of Our Common StockProvisions in our corporate governance documents could operate to delay or prevent a change in control of our company, dilute the voting power orreduce the value of our capital stock or affect its liquidity.The existence of some provisions within our restated certificate of incorporation and amended and restated bylaws could discourage, delay or prevent achange in control of us that a stockholder may consider favorable. These include provisions:•providing that our board of directors fixes the number of members of the board;•providing for the division of our board of directors into three classes with staggered terms;•providing that only our board of directors may fill board vacancies;•limiting who may call special meetings of stockholders;•prohibiting stockholder action by written consent, thereby requiring stockholder action to be taken at a meeting of the stockholders;•establishing advance notice requirements for nominations of candidates for election to our board of directors or for proposing matters that can beacted on by stockholders at stockholder meetings;•establishing supermajority vote requirements for certain amendments to our restated certificate of incorporation and stockholder proposals foramendments to our amended and restated bylaws;•providing that our directors may only be removed for cause;•authorizing a large number of shares of common stock that are not yet issued, which would allow our board of directors to issue shares to personsfriendly to current management, thereby protecting the continuity of our management, or which could be used to dilute the stock ownership ofpersons seeking to obtain control of us; and•authorizing the issuance of “blank check” preferred stock, which could be issued by our board of directors to increase the number of outstandingshares and thwart a takeover attempt.We believe these provisions protect our stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with ourboard of directors and by providing our board of directors time to assess any acquisition proposal, and are not intended to make us immune from takeovers.However, these provisions apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition.Our restated certificate of incorporation also authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stockhaving such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over our common stockrespecting dividends and distributions, as our board of directors generally may determine. The terms of one or more classes or series of preferred stock coulddilute the voting power or reduce the value of our common stock. For example, we could grant holders of preferred stock the right to elect some number ofour board of directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemptionrights or liquidation preferences we could assign to holders of preferred stock could affect the residual value of our common stock.Finally, to facilitate compliance with the Maritime Laws, our restated certificate of incorporation limits the aggregate percentage ownership by non-U.S.citizens of our common stock or any other class of our capital stock to 23 percent of the outstanding shares. We may prohibit transfers that would causeownership of our common stock or any other class of our capital stock by non-U.S. citizens to exceed 23 percent. Our restated certificate of incorporation alsoauthorizes us to effect any and all measures necessary or desirable to monitor and limit foreign ownership of our common stock or any other class of ourcapital stock. These limitations could have an adverse impact on the liquidity of the market for our common stock if holders are unable to transfer shares tonon-U.S. citizens due to the limitations on ownership by non-U.S. citizens. Any such limitation on the liquidity of the market for our common stock couldadversely impact the market price of our common stock.37Table of ContentsItem 1B. Unresolved Staff CommentsNone.Item 2. PropertiesThe location and general character of our refineries, convenience stores, pipeline systems and other important physical properties have been described bysegment under Item 1. Business and are incorporated herein by reference. The plants and facilities have been constructed or acquired over a period of yearsand vary in age and operating efficiency. In addition, we believe that our properties and facilities are adequate for our operations and that our facilities areadequately maintained. As of December 31, 2014, we were the lessee under a number of cancellable and noncancellable leases for certain properties,including land and building space, office equipment, storage facilities and transportation equipment. See Item 8. Financial Statements and SupplementaryData – Note 25 for additional information regarding our leases.Item 3. Legal ProceedingsWe are the subject of, or a party to, a number of pending or threatened legal actions, contingencies and commitments involving a variety of matters,including laws and regulations relating to the environment. Some of these matters are discussed below.LitigationWe are a party to a number of lawsuits and other proceedings and cannot predict the outcome of every such matter with certainty. While it is possible that anadverse result in one or more of the lawsuits or proceedings in which we are a defendant could be material to us, based upon current information and ourexperience as a defendant in other matters, we believe that these lawsuits and proceedings, individually or in the aggregate, will not have a material adverseeffect on our consolidated results of operations, financial position or cash flows.Kentucky Emergency Pricing LitigationIn May 2007, the Kentucky attorney general filed a lawsuit against us and Marathon Oil in state court in Franklin County, Kentucky for alleged violations ofKentucky’s emergency pricing and consumer protection laws following Hurricanes Katrina and Rita in 2005. The lawsuit alleges that we overchargedcustomers by $89 million during September and October 2005. The complaint seeks disgorgement of these sums, as well as penalties, under Kentucky’semergency pricing and consumer protection laws. We are vigorously defending this litigation. We believe that this is the first lawsuit for damages andinjunctive relief under the Kentucky emergency pricing laws to progress this far and it contains many novel issues. In May 2011, the Kentucky attorneygeneral amended his complaint to include a request for immediate injunctive relief as well as unspecified damages and penalties related to our wholesalegasoline pricing in April and May 2011 under statewide price controls that were activated by the Kentucky governor on April 26, 2011 and which have sinceexpired. The court denied the attorney general’s request for immediate injunctive relief, and the remainder of the 2011 claims likely will be resolved alongwith those dating from 2005. If the lawsuit is resolved unfavorably in its entirety, it could materially impact our consolidated results of operations, financialposition or cash flows. However, management does not believe the ultimate resolution of this litigation will have a material adverse effect.Environmental ProceedingsDuring 2001, we entered into a New Source Review consent decree and settlement of alleged Clean Air Act and other violations with the EPA covering ourrefineries. The settlement committed us to specific control technologies and implementation schedules for environmental expenditures and improvements toour refineries, which are now complete. We are working with the EPA to terminate the New Source Review consent decree.In January 2011, the EPA notified us of alleged violations of various statutory and regulatory provisions related to motor fuels, some of which we hadpreviously self-reported to the EPA. Subsequently, we self-reported four additional alleged Clean Air Act violations related to motor fuels to the EPA. In July2014, we tentatively agreed to pay a $2.75 million civil penalty as well as undertake certain projects to reduce emissions. In August and December 2014, weself-reported three similar alleged violations to the EPA. The EPA has agreed to include these incidents in the consent decree and increased the civil penaltydemand to $2.9 million. We believe the ultimate resolution of this matter will not have a material impact on our consolidated results of operations, financialposition or cash flows.We have been subject to a pending enforcement matter with the Illinois Environmental Protection Agency and the Illinois attorney general’s office since2002 concerning self-reporting of possible emission exceedences and permitting issues related to storage tanks at the Robinson, Illinois refinery. As a resultof these allegations, we tentatively agreed to pay $150,000 civil penalty and undertake a supplemental environmental project involving the installation ofambient air monitors at the refinery.38Table of ContentsThe consent order is not yet finalized, but the ultimate resolution of this matter will not have a material impact on our consolidated results of operations,financial position or cash flows.On January 3, 2013, the Louisiana Department of Environmental Quality (“LDEQ”) issued a consolidated compliance order and notice of potential penaltyalleging violations related to self-reported air emission events occurring at our Garyville, Louisiana refinery between the years of 2005 and 2011. It ispossible the LDEQ could seek penalties in excess of $100,000 in connection with this matter.We are involved in a number of other environmental proceedings arising in the ordinary course of business. While the ultimate outcome and impact on uscannot be predicted with certainty, we believe the resolution of these environmental proceedings will not have a material adverse effect on our consolidatedresults of operations, financial position or cash flows.Item 4. Mine Safety DisclosuresNot applicable.39Table of ContentsPART IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesOur common stock is listed on the NYSE and traded under the symbol “MPC.” As of February 13, 2015, there were 37,906 registered holders of our commonstock.The following table reflects intraday high and low sales prices of and dividends declared on our common stock by quarter: 2014 2013Dollars per shareHigh Price Low Price Dividends High Price Low Price DividendsQuarter 1$94.88 $80.68 $0.42 $92.73 $60.04 $0.35Quarter 297.70 77.94 0.42 90.54 69.31 0.35Quarter 392.89 75.68 0.50 76.58 62.51 0.42Quarter 497.94 74.64 0.50 91.95 61.32 0.42Year97.94 74.64 1.84 92.73 60.04 1.54DividendsOur board of directors intends to declare and pay dividends on our common stock based on our financial condition and consolidated results of operations. OnJanuary 31, 2015, our board of directors approved a 50 cent per share dividend, payable March 10, 2015 to stockholders of record at the close of business onFebruary 18, 2015.Dividends on our common stock are limited to our legally available funds.Issuer Purchases of Equity SecuritiesThe following table sets forth a summary of our purchases during the quarter ended December 31, 2014, of equity securities that are registered by MPCpursuant to Section 12 of the Securities Exchange Act of 1934, as amended:PeriodTotal Numberof SharesPurchased(a) AveragePrice Paidper Share(b) Total Number ofShares Purchased asPart of PubliclyAnnounced Plansor Programs Maximum DollarValue of Shares thatMay Yet Be PurchasedUnder the Plansor Programs(c)10/01/14-10/31/14835,416 $82.41 834,500 $2,339,234,81211/01/14-11/30/144,948,398 93.36 4,948,217 1,877,249,78412/01/14-12/31/141,657,786 91.42 1,656,562 1,725,807,942Total7,441,600 91.70 7,439,279 (a) The amounts in this column include 916, 181 and 1,224 shares of our common stock delivered by employees to MPC, upon vesting of restricted stock, to satisfy taxwithholding requirements in October, November and December, respectively.(b) Amounts in this column reflect the weighted average price paid for shares purchased under our share repurchase authorizations and for shares tendered to us in satisfactionof employee tax withholding obligations upon the vesting of restricted stock granted under our stock plans. The weighted average price includes commissions paid tobrokers on shares purchased under our share repurchase authorizations.(c) The $2.0 billion share repurchase authorization announced on September 26, 2013 was exhausted during the fourth quarter of 2014. On July 30, 2014, we announced thatour board of directors approved an additional $2.0 billion share repurchase authorization through July 31, 2016, resulting in $8.0 billion of total share repurchaseauthorizations since January 1, 2012. As of December 31, 2014, we have purchased a total of $6.27 billion of our common stock under repurchase authorizations sinceJanuary 1, 2012, leaving $1.73 billion available for repurchases.40Table of ContentsItem 6. Selected Financial Data Selected financial data for periods subsequent to our June 2011 Spinoff from Marathon Oil were derived from our consolidated financial statements. Selectedfinancial data for periods prior to the Spinoff were derived from the results of the RM&T Business, which represented a combined reporting entity. Thefollowing table should be read in conjunction with Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations andItem 8. Financial Statements and Supplementary Data. Year Ended December 31,(In millions, except per share data)2014(a) 2013(a) 20122011 2010(b)Statements of Income Data Revenues$97,817 $100,160 $82,243 $78,638 $62,487Income from operations4,051 3,425 5,347 3,745 1,011Net income2,555 2,133 3,393 2,389 623Net income attributable to MPC2,524 2,112 3,389 2,389 623Per Share Data(c) Basic: Net income attributable to MPC per share$8.84 $6.69 $9.95 $6.70 $1.75Diluted: Net income attributable to MPC per share$8.78 $6.64 $9.89 $6.67 $1.74Dividends per share$1.84 $1.54 $1.20 0.45 —Statements of Cash Flows Data Net cash provided by operating activities$3,110 $3,405 $4,492 $3,309 $2,217Additions to property, plant and equipment1,480 1,206 1,369 1,185 1,217Common stock repurchased2,131 2,793 1,350 — —Dividends paid524 484 407 160 — December 31,(In millions)2014(a) 2013(a) 2012 2011 2010Balance Sheets Data Total assets$30,460 $28,385 $27,223 $25,745 $23,232Long-term debt, including capitalized leases(d)6,637 3,396 3,361 3,307 279Long-term debt payable to Marathon Oil and subsidiaries(e)— — — — 3,618(a) On September 30, 2014, we acquired Hess’ Retail Operations and Related Assets. On February 1, 2013, we acquired the Galveston Bay Refinery and Related Assets. Datapresented subsequent to these acquisitions include amounts for these operations.(b) On December 1, 2010, we disposed of our Minnesota assets. The period prior to the disposition includes amounts for those operations.(c) The number of weighted average shares for 2014, 2013 and 2012 reflect the impacts of shares of common stock repurchased under our share repurchase plans. For comparativepurposes and to provide a more meaningful calculation, for basic weighted average shares we assumed the 356 million shares of common stock distributed to Marathon Oilstockholders in conjunction with the Spinoff were outstanding as of the beginning of each period prior to the Spinoff. In addition, for dilutive weighted average sharecalculations, we assumed the 358 million dilutive securities outstanding at June 30, 2011 were also outstanding for each period prior to the Spinoff.(d) Includes amounts due within one year. During 2011, we issued $3.0 billion aggregate principal amount of senior notes, which replaced a portion of the debt payable to MarathonOil and subsidiaries. During 2014, we issued $1.95 billion aggregate principal amount of senior notes and entered into a $700 million term loan agreement to fund a portion ofthe Hess’ Retail Operations and Related Assets acquisition. Also during 2014, MPLX entered into a $250 million term loan agreement and drew upon their credit facility to fund aportion of its purchase of additional interest in Pipe Line Holdings from MPC.(e) Includes amounts due within one year owed to Marathon Oil and subsidiaries, which were repaid prior to the Spinoff.41Table of ContentsItem 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsManagement’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the information included underItem 1. Business, Item 1A. Risk Factors, Item 6. Selected Financial Data and Item 8. Financial Statements and Supplementary Data.Management’s Discussion and Analysis of Financial Condition and Results of Operations includes various forward-looking statements concerning trends orevents potentially affecting our business. You can identify our forward-looking statements by words such as “anticipate,” “believe,” “estimate,” “objective,”“expect,” “forecast,” “goal,” “intend,” “plan,” “predict,” “project,” “potential,” “seek,” “target,” “could,” “may,” “should,” “would,” “will” or other similarexpressions that convey the uncertainty of future events or outcomes. In accordance with “safe harbor” provisions of the Private Securities Litigation ReformAct of 1995, these statements are accompanied by cautionary language identifying important factors, though not necessarily all such factors, which couldcause future outcomes to differ materially from those set forth in forward-looking statements.Corporate OverviewWe are an independent petroleum refining and marketing, retail and pipeline transportation company. We currently own and operate seven refineries, alllocated in the United States, with an aggregate crude oil refining capacity of approximately 1.7 mmbpcd. Our refineries supply refined products to resellersand consumers within our market areas, including the Midwest, Gulf Coast, East Coast and Southeast regions of the United States. We distribute refinedproducts to our customers through one of the largest private domestic fleets of inland petroleum product barges, one of the largest terminal operations in theUnited States, and a combination of MPC-owned and third-party-owned trucking and rail assets. We are one of the largest wholesale suppliers of gasoline anddistillates to resellers within our market area.We have two strong retail brands: Speedway® and Marathon®. We believe that Speedway LLC, a wholly-owned subsidiary, operates the second largest chainof company-owned and operated retail gasoline and convenience stores in the United States, with approximately 2,750 convenience stores in 22 statesthroughout the Midwest, East Coast and Southeast. The Marathon brand is an established motor fuel brand in the Midwest and Southeast regions of theUnited States, and is available through approximately 5,460 retail outlets operated by independent entrepreneurs in 19 states.As of December 31, 2014, we owned, leased or had ownership interests in approximately 8,300 miles of crude oil and refined product pipelines to delivercrude oil to our refineries and other locations and refined products to wholesale and retail market areas. We are one of the largest petroleum pipelinecompanies in the United States on the basis of total volumes delivered. Overall, we are one of the largest independent petroleum product refining, marketing,retail and transportation businesses in the United States and the largest east of the Mississippi.Our operations consist of three reportable operating segments: Refining & Marketing; Speedway; and Pipeline Transportation. Each of these segments isorganized and managed based upon the nature of the products and services they offer. See Item 1. Business for additional information on our segments.•Refining & Marketing—refines crude oil and other feedstocks at our seven refineries in the Gulf Coast and Midwest regions of the United States,purchases refined products and ethanol for resale and distributes refined products through various means, including barges, terminals and trucks thatwe own or operate. We sell refined products to wholesale marketing customers domestically and internationally, buyers on the spot market, ourSpeedway business segment and to independent entrepreneurs who operate Marathon® retail outlets.•Speedway—sells transportation fuels and convenience products in the retail market in the Midwest, East Coast and Southeast.•Pipeline Transportation—transports crude oil and other feedstocks to our refineries and other locations, delivers refined products to wholesale andretail market areas and includes the aggregated operations of MPLX.42Table of ContentsExecutive SummaryResultsSelect results for 2014 and 2013 are reflected in the following table.(In millions, except per share data) 2014 2013Income from Operations by segment Refining & Marketing$3,609 $3,206Speedway544 375Pipeline Transportation280 210Net income attributable to MPC$2,524 $2,112Net income attributable to MPC per diluted share$8.78 $6.64Net income attributable to MPC increased $412 million, or $2.14 per diluted share, in 2014 compared to 2013, primarily due to our Refining & Marketingsegment.Refining & Marketing segment income from operations increased $403 million in 2014 compared to 2013, primarily due to more favorable net product pricerealizations and higher U.S. Gulf Coast (“USGC”) and Chicago crack spreads, partially offset by narrower crude oil differentials and higher turnaround andother direct operating costs.Speedway segment income from operations increased $169 million in 2014 compared to 2013, primarily due to increases in gasoline and distillate grossmargin and merchandise gross margin, partially offset by higher operating expenses. These increases were primarily attributable to the acquisition ofconvenience stores from Hess.Pipeline Transportation segment income from operations increased $70 million in 2014 compared to 2013, primarily due to higher pipeline transportationrevenue and an increase in income from our pipeline affiliates, partially offset by an increase in operating expenses.MPLX LPIn 2012, we formed MPLX, a master limited partnership, to own, operate, develop and acquire pipelines and other midstream assets related to thetransportation and storage of crude oil, refined products and other hydrocarbon-based products. On October 31, 2012, MPLX completed its initial publicoffering of 19.9 million common units, which represented the sale by us of a 26.4 percent interest in MPLX.As of December 31, 2014, we owned a 71.5 percent interest in MPLX, including the two percent general partner interest, and we consolidate this entity forfinancial reporting purposes since we have a controlling financial interest.MPLX’s initial assets consisted of a 51 percent general partner interest in Pipe Line Holdings, which owns a network of common carrier crude oil and productpipeline systems and associated storage assets in the Midwest and Gulf Coast regions of the United States, and a 100 percent interest in a butane storagecavern in West Virginia. We originally retained a 49 percent limited partner interest in Pipe Line Holdings.On May 1, 2013, we sold a five percent interest in Pipe Line Holdings to MPLX for $100 million, which was financed by MPLX with cash on hand.On March 1, 2014, we sold MPLX a 13 percent interest in Pipe Line Holdings for $310 million. MPLX financed this transaction with $40 million of cash on-hand and $270 million of borrowings on its bank revolving credit agreement.On October 30, 2014, we announced plans to substantially accelerate the growth of MPLX, which is expected to provide unitholders an average annualdistribution growth rate percentage in the mid-20s over the next five years as we build meaningful scale more quickly. We believe this increased scaleprovides MPLX greater flexibility to fund organic projects and to pursue acquisition opportunities.On December 1, 2014, we sold and contributed interests in Pipe Line Holdings totaling 30.5 percent to MPLX for $600 million in cash and 2.9 million MPLXcommon units valued at $200 million. MPLX financed the sales portion of this transaction with $600 million of borrowings on its bank revolving creditfacility.The sales and contribution of our interests in Pipe Line Holdings to MPLX resulted in a change of our ownership in Pipe Line Holdings, but not a change incontrol. We accounted for these sales as transactions between entities under common control and did not record a gain or loss.43Table of ContentsOn December 8, 2014, MPLX completed a public offering of 3.5 million common units at a price to the public of $66.68 per common unit, with net proceedsof $221 million. MPLX used the net proceeds from this offering to repay borrowings under its bank revolving credit facility and for general partnershippurposes. On December 10, 2014, we exercised our right to maintain our two percent general partner interest in MPLX by purchasing 130 thousand generalpartner units for $9 million.On February 12, 2015, MPLX completed its initial underwritten public offering of $500 million aggregate principal amount of four percent unsecured seniornotes due February 15, 2025 (the “Senior Notes”). The Senior Notes were offered at a price to the public of 99.64 percent of par. The net proceeds of thisoffering were used to repay the amounts outstanding under its bank revolving credit facility, as well as for general partnership purposes.The following table summarizes the cash distributions we received from MPLX during 2014 and 2013.(In millions) 2014 2013Cash distributions received from MPLX: General partner distributions, including incentive distribution rights$4 $1Limited partner distributions72 56Total$76 $57The market value of the 19,980,619 MPLX common units and 36,951,515 MPLX subordinated units we owned at December 31, 2014 was $4.18 billionbased on the December 31, 2014 closing unit price of $73.49. Over time, we also believe there will be substantial value attributable to our general partnershipinterests.See Item 8. Financial Statements and Supplementary Data – Note 4 for additional information on MPLX.Acquisitions and InvestmentsOn September 30, 2014, we acquired from Hess all of its retail locations, transport operations and shipper history on various pipelines, includingapproximately 40 mbpd on Colonial Pipeline, for $2.82 billion. We refer to these assets as “Hess’ Retail Operations and Related Assets” and substantially allof these assets are part of our Speedway segment. This acquisition significantly expands our Speedway presence from nine to 22 states throughout the EastCoast and Southeast and is aligned with our strategy to grow higher-valued, stable cash flow businesses. This acquisition also enables us to further leverageour integrated refining and transportation operations, providing an outlet for an incremental 200 mbpd of assured sales from our refining system. Thetransaction was funded with a combination of debt and available cash. Our financial results and operating statistics for the periods prior to the acquisition donot include amounts for Hess’ Retail Operations and Related Assets.In July 2014, we exercised our option to acquire a 35 percent ownership interest in Enbridge Inc.’s SAX pipeline, which will run from Flanagan, Ill. to Patoka,Ill. and is expected to be operational in late 2015. This option resulted from our agreement to be the anchor shipper on the SAX pipeline and our commitmentto the Sandpiper pipeline project. During 2014, we made contributions of $120 million to Illinois Extension Pipeline to fund our portion of the constructioncosts incurred-to-date on the SAX pipeline project.On April 1, 2014, we purchased a facility in Cincinnati, Ohio from Felda Iffco Sdn Bhd, Malaysia for $40 million. The plant currently produces biodiesel,glycerin and other by-products. The capacity of the plant is approximately 60 million gallons per year.In March 2014, we acquired from Chevron Raven Ridge Pipe Line Company an additional seven percent interest in Explorer for $77 million, bringing ourownership interest to 25 percent. Due to this increase in our ownership percentage, we now account for our investment in Explorer using the equity method ofaccounting and report Explorer as a related party. Explorer owns approximately 1,900 miles of refined products pipeline from Lake Charles, Louisiana toHammond, Indiana.In November 2013, we agreed with Enbridge Energy Partners to serve as an anchor shipper for the Sandpiper pipeline, which will run from Beaver Lodge,North Dakota to Superior, Wisconsin. We also agreed to fund 37.5 percent of the construction of the Sandpiper pipeline project, which is currently estimatedto cost $2.6 billion, of which approximately $1.0 billion is our share. We made contributions of $192 million during 2014 and have contributed $216million since project inception. In exchange for our commitment to be an anchor shipper and our investment in the project, we will earn an approximate 27percent equity interest in Enbridge Energy Partners’ North Dakota System when the Sandpiper pipeline is placed into service, which is expected to be in2017. Enbridge Energy Partners’ North Dakota System currently includes approximately 240 miles of crude oil gathering pipelines connected to atransportation pipeline that is approximately 730 miles long. We will also have the option to increase our ownership interest to approximately 30 percentthrough additional investments in future system improvements.44Table of ContentsOn August 1, 2013, we acquired from Mitsui & Co. (U.S.A.), Inc. its interests in three ethanol companies for $75 million. Under the purchase agreement, weacquired an additional 24 percent interest in TACE, bringing our ownership interest to 60 percent; a 34 percent interest in TAEI, which holds a 50 percentownership in TAME, bringing our direct and indirect ownership interest in TAME to 67 percent; and a 40 percent interest in TAAE, which owns an ethanolproduction facility in Albion, Michigan. On October 1, 2013, our ownership interest in TAAE increased to 43 percent as a result of TAAE acquiring one ofthe owner’s interest. We hold a noncontrolling interest in each of these entities and account for them using the equity method of accounting since theminority owners have substantive participating rights.On February 1, 2013, we acquired from BP the 451,000 barrel per calendar day refinery in Texas City, Texas, three intrastate natural gas liquid pipelinesoriginating at the refinery, four light product terminals, branded-jobber marketing contract assignments for the supply of approximately 1,200 branded sites,a 1,040 megawatt electric cogeneration facility and a 50 mbpd allocation of space on the Colonial Pipeline. We refer to these assets as the “Galveston BayRefinery and Related Assets.” We paid $1.49 billion for these assets, which included $935 million for inventory. Pursuant to the purchase and saleagreement, we may also be required to pay BP a contingent earnout of up to an additional $700 million over six years, subject to certain conditions. In July2014, we paid BP $180 million for the first period’s contingent earnout. These assets are part of our Refining & Marketing and Pipeline Transportationsegments. Our financial results and operating statistics for the periods prior to the acquisition do not include amounts for the Galveston Bay Refinery andRelated Assets.See Item 8. Financial Statements and Supplementary Data – Note 5 for additional information on these acquisitions and investments. See Item 8. FinancialStatements and Supplementary Data – Note 26 for information regarding our future contributions to the SAX pipeline project and the Sandpiper pipelineproject.Share RepurchasesOn July 30, 2014, our board of directors approved an additional $2.0 billion share repurchase authorization expiring in July 2016. As of December 31, 2014,our board of directors had approved $8.0 billion in total share repurchase authorizations since January 1, 2012 and we have repurchased a total of $6.27billion of our common stock under these authorizations, leaving $1.73 billion available for repurchases. Under these authorizations, we have acquired 89million shares at an average cost per share of $70.35.LiquidityAs of December 31, 2014, we had cash and cash equivalents of $1.49 billion and no borrowings or letters of credit outstanding under our $2.5 billionrevolving credit agreement or $1.3 billion trade receivables securitization facility. As of January 31, 2015, eligible trade receivables supported borrowings of$700 million. MPLX had $385 million of borrowings outstanding under its $1 billion revolving credit agreement as of December 31, 2014.The above discussion contains forward-looking statements with respect to the estimated construction costs, timing and completion of the Sandpiper and SAXpipeline projects and the share repurchase authorizations. Factors that could affect the estimated construction costs, timing and completion of the Sandpiperand SAX pipeline projects, include, but are not limited to, availability of materials and labor, unforeseen hazards such as weather conditions, delays inobtaining or conditions imposed by necessary government and third-party approvals and other risks customarily associated with construction projects.Factors that could affect the share repurchase authorizations and the timing of any repurchases include, but are not limited to, business conditions,availability of liquidity and the market price of our common stock. These factors, among others, could cause actual results to differ materially from those setforth in the forward-looking statements.Overview of SegmentsRefining & MarketingRefining & Marketing segment income from operations depends largely on our Refining & Marketing gross margin and refinery throughputs.Our Refining & Marketing gross margin is the difference between the prices of refined products sold and the costs of crude oil and other charge andblendstocks refined, including the costs to transport these inputs to our refineries and the costs of products purchased for resale. The crack spread is a measureof the difference between market prices for refined products and crude oil, commonly used by the industry as a proxy for the refining margin. Crack spreadscan fluctuate significantly, particularly when prices of refined products do not move in the same relationship as the cost of crude oil. As a performancebenchmark and a comparison with other industry participants, we calculate Midwest (Chicago) and USGC crack spreads that we believe most closely trackour operations and slate of products. LLS prices and a 6-3-2-1 ratio of products (6 barrels of LLS crude oil producing 3 barrels of unleaded regular gasoline, 2barrels of ultra-low sulfur diesel and 1 barrel of three percent residual fuel oil) are used for these crack-spread calculations.45Table of ContentsRefined product prices have historically moved relative to international crude oil prices like Brent crude. In recent years, domestic U.S. crude oils, such asWTI and LLS, traded at prices less than Brent due to the growth in U.S. crude oil production, logistical constraints and other market factors. These pricediscounts compared to Brent favorably impacted the LLS 6-3-2-1 crack spread. During 2011 and continuing through the first half of 2013, WTI traded atprices significantly less than Brent and LLS, which favorably impacted our Refining & Marketing gross margin. The differential between WTI and LLSsignificantly narrowed during the second half of 2013 with a further narrowing broadly continuing through 2014. In addition, the differential between LLSand Brent narrowed significantly during the second half of 2014. The spread between domestic crude oils and Brent could remain narrow if there is a changein existing U.S. energy policy regarding crude oil exports, or if low crude oil prices reduce U.S. crude oil production growth substantially. If either were tooccur, it could reduce our Refining & Marketing gross margin.Our refineries can process significant amounts of sour crude oil, which typically can be purchased at a discount to sweet crude oil. The amount of thisdiscount, the sweet/sour differential, can vary significantly, causing our Refining & Marketing gross margin to differ from crack spreads based on sweet crudeoil. In general, a larger sweet/sour differential will enhance our Refining & Marketing gross margin.Future crude oil differentials will be dependent on a variety of market and economic factors, as well as U.S. energy policy.The following table provides sensitivities showing an estimated change in annual net income due to potential changes in market conditions. (In millions, after-tax) LLS 6-3-2-1 crack spread sensitivity(a) (per $1.00/barrel change)$450Sweet/sour differential sensitivity(b) (per $1.00/barrel change)200LLS-WTI differential sensitivity(c) (per $1.00/barrel change)100Natural gas price sensitivity (per $1.00/million British thermal unit change)140(a) Weighted 38 percent Chicago and 62 percent USGC LLS 6-3-2-1 crack spreads and assumes all other differentials and pricing relationships remain unchanged.(b) LLS (prompt) – [delivered cost of sour crude oil: Arab Light, Kuwait, Maya, Western Canadian Select and Mars].(c) Assumes 20 percent of crude oil throughput volumes are WTI-based domestic crude oil.In addition to the market changes indicated by the crack spreads, the sweet/sour differential and the discount of WTI to LLS, our Refining & Marketing grossmargin is impacted by factors such as:•the types of crude oil and other charge and blendstocks processed;•our refinery yields;•the selling prices realized for refined products;•the impact of commodity derivative instruments used to hedge price risk;•the cost of products purchased for resale; and•the potential impact of lower of cost or market adjustments to inventories in periods of declining prices.Inventories are stated at the lower of cost or market. The cost of our crude oil and refined product inventories is determined under the last in, first out (“LIFO”)method. During periods of rapidly declining prices, the LIFO cost basis of our crude oil and refined product inventories may have to be written down tomarket value. Despite a significant drop in refined product prices in 2014, we determined that the LIFO cost basis of our crude oil and refined productinventories was recoverable as of December 31, 2014. If prices decrease further in 2015, we may be required to recognize a lower of cost or market adjustmentto these inventories, which totaled approximately 96 million barrels as of December 31, 2014.Refining & Marketing segment income from operations is also affected by changes in refinery direct operating costs, which include turnaround and majormaintenance, depreciation and amortization and other manufacturing expenses. Changes in manufacturing costs are primarily driven by the cost of energyused by our refineries, including purchased natural gas, and the level of maintenance costs. Planned major maintenance activities, or turnarounds, requiringtemporary shutdown of certain refinery operating units, are periodically performed at each refinery. The following table lists the refineries that had significantplanned turnaround and major maintenance activities for each of the last three years.Year Refinery2014 Catlettsburg, Galveston Bay, Garyville and Robinson2013 Canton, Catlettsburg, Galveston Bay, Garyville and Robinson2012 Catlettsburg, Detroit, Garyville and Robinson46Table of ContentsThe table below sets forth the location and daily crude oil refining capacity of each of our refineries at December 31 of each year. Crude Oil Refining Capacity (mbpcd)Refinery 2014 2013 2012Garyville, Louisiana522 522 522Galveston Bay, Texas City, Texas(a)451 451 N/ACatlettsburg, Kentucky242 242 240Robinson, Illinois212 212 206Detroit, Michigan130 123 120Canton, Ohio90 80 80Texas City, Texas84 84 80Total1,731 1,714 1,248(a) We acquired the Galveston Bay refinery on February 1, 2013.SpeedwayOur retail marketing gross margin for gasoline and distillate, which is the price paid by consumers less the cost of refined products, including transportation,consumer excise taxes and bankcard processing fees, impacts the Speedway segment profitability. Numerous factors impact gasoline and distillate demandthroughout the year, including local competition, seasonal demand fluctuations, the available wholesale supply, the level of economic activity in ourmarketing areas and weather conditions. Gasoline demand in PADD 2 is estimated to have grown by about half a percent in 2014 after climbing by 1.4percent in 2013. Meanwhile, gasoline demand in PADD 1 is estimated to have grown by 1.5 percent in 2014 after a 1.5 percent decline in 2013, reversing athree-year trend of declines and returning to 2012 levels. Strong economic growth in the last three quarters of 2014 and strongly falling prices throughout thesecond half supported gasoline demand. Distillate demand was supported by severe winter temperatures in early 2014 and a very strong harvest season.PADD 2 distillate demand is estimated to have grown by 3.7 percent in 2014 after climbing by 1.6 percent in 2013. PADD 1 estimated distillate demand grewover five percent after climbing by 8.8 percent in 2013. Market demand increases for gasoline and distillate generally increase the product margin we canrealize. The gross margin on merchandise sold at convenience stores historically has been less volatile and has contributed substantially to Speedway’s grossmargin. More than half of Speedway’s gross margin was derived from merchandise sales in 2014. Speedway’s convenience stores offer a wide variety ofmerchandise, including prepared foods, beverages and non-food items.Pipeline TransportationThe profitability of our pipeline transportation operations primarily depends on tariff rates and the volumes shipped through the pipelines. A majority of thecrude oil and refined product shipments on our common carrier pipelines serve our Refining & Marketing segment. In 2012, new transportation servicesagreements were entered into between MPC and MPLX, which resulted in higher tariff rates. The volume of crude oil that we transport is directly affected bythe supply of, and refiner demand for, crude oil in the markets served directly by our crude oil pipelines. Key factors in this supply and demand balance arethe production levels of crude oil by producers in various regions or fields, the availability and cost of alternative modes of transportation, the volumes ofcrude oil processed at refineries and refinery and transportation system maintenance levels. The volume of refined products that we transport is directlyaffected by the production levels of, and user demand for, refined products in the markets served by our refined product pipelines. In most of our markets,demand for gasoline and distillate peaks during the summer driving season, which extends from May through September of each year, and declines duringthe fall and winter months. As with crude oil, other transportation alternatives and system maintenance levels influence refined product movements.47Table of ContentsResults of OperationsConsolidated Results of Operations(In millions) 2014 2013 2014 vs. 2013Variance 2012 2013 vs. 2012VarianceRevenues and other income: Sales and other operating revenues (including consumer excisetaxes)$97,817 $100,160 $(2,343) $82,243 $17,917Income from equity method investments153 36 117 26 10Net gain on disposal of assets21 6 15 177 (171)Other income111 52 59 46 6Total revenues and other income98,102 100,254 (2,152) 82,492 17,762Costs and expenses: Cost of revenues (excludes items below)83,770 87,401 (3,631) 68,668 18,733Purchases from related parties505 357 148 280 77Consumer excise taxes6,685 6,263 422 5,709 554Depreciation and amortization1,326 1,220 106 995 225Selling, general and administrative expenses1,375 1,248 127 1,223 25Other taxes390 340 50 270 70Total costs and expenses94,051 96,829 (2,778) 77,145 19,684Income from operations4,051 3,425626 5,347 (1,922)Net interest and other financial income (costs)(216) (179) (37) (109) (70)Income before income taxes3,835 3,246 589 5,238 (1,992)Provision for income taxes1,280 1,113 167 1,845 (732)Net income2,555 2,133 422 3,393 (1,260)Less net income attributable to noncontrolling interests31 21 10 4 17Net income attributable to MPC$2,524 $2,112 $412 $3,389 $(1,277)Net income attributable to MPC increased $412 million in 2014 compared to 2013 and decreased $1.28 billion in 2013 compared to 2012, primarily due toour Refining & Marketing segment income from operations, which increased $403 million in 2014 compared to 2013 and decreased $1.89 billion in 2013compared to 2012. The increase in Refining & Marketing segment income from operations in 2014 was primarily due to more favorable net product pricerealizations and higher USGC and Chicago crack spreads, partially offset by narrower crude oil differentials and higher turnaround and other direct operatingcosts. The decrease in 2013 was primarily due to narrower crude oil differentials and lower net product price realizations, partially offset by higher refinerythroughput and sales volumes.Sales and other operating revenues (including consumer excise taxes) decreased $2.34 billion in 2014 compared to 2013 and increased $17.92 billion in2013 compared to 2012. The decrease in 2014 was primarily due to lower refined product sales prices, partially offset by an increase in refined product salesvolumes and higher merchandise sales for our Speedway segment primarily attributable to the convenience stores acquired from Hess. The increase in 2013was primarily due to higher refined product sales volumes, which were primarily associated with the acquisition of the Galveston Bay refinery in February2013, partially offset by a decrease in refined product sales prices. Consolidated refined product sales increased 52 mbpd in 2014 compared to 2013 and 468mbpd in 2013 compared to 2012.Income from equity method investments increased $117 million in 2014 compared to 2013 and $10 million in 2013 compared to 2012. The increase in 2014was primarily due to increases in income from our ethanol affiliates of $68 million and income from our pipeline affiliates of $49 million. The increase inincome from our ethanol affiliates includes the affects of our acquisition of interests in TAAE, TACE and TAEI in August 2013. The higher income from ourpipeline affiliates is primarily due to increases from LOOP LLC (“LOOP”) and Explorer, which is now accounted for as an equity method investmentfollowing our acquisition of an increased ownership interest in this pipeline company. The increase in 2013 was primarily due to an increase in income fromour ethanol investments of $34 million, partially offset by a decrease in income from our investment in LOOP of $17 million. The increase in income fromethanol investments was primarily due to higher income in 2013 compared to 2012 and the acquisition of interests in TAAE, TACE and TAEI in 2013.48Table of ContentsNet gain on disposal of assets increased $15 million in 2014 compared to 2013 and decreased $171 million in 2013 compared to 2012, primarily due to thesale of two terminals and terminal assets in 2014 and a $171 million gain recognized in the third quarter of 2012 associated with the settlement agreementwith the buyer of our Minnesota assets. See Item 8. Financial Statements and Supplementary Data – Note 6 for additional information on the Minnesota assetssale and subsequent settlement agreement with the buyer.Other income increased $59 million in 2014 compared to 2013 and $6 million in 2013 compared to 2012. The increase in 2014 was primarily due to highergains on sales of excess Renewable Identification Numbers (“RINs”) of $74 million, partially offset by an $11 million impairment in 2014 of an investmentin a company accounted for using the cost method. The increase in 2013 was primarily due to higher gains on sales of excess RINs and dividends receivedfrom a pipeline affiliate, partially offset by the absence of $12 million of dividends received from our preferred equity interest in the buyer of our Minnesotaassets during the third quarter of 2012.Cost of revenues decreased $3.63 billion in 2014 compared to 2013 and increased $18.73 billion in 2013 compared to 2012. The decrease in 2014 wasprimarily due to:•a decrease in refined product cost of sales of $5.01 billion, primarily due to a decrease in our average crude oil costs of $9.30 per barrel, partiallyoffset by an increase in refined product sales volumes;•partially offset by an increase in refinery direct operating costs of $913 million, or $1.37 per barrel of total refinery throughput, which included costsassociated with significant planned turnaround activity; and•an increase in merchandise cost of sales for our Speedway segment of $327 million, primarily attributable to the convenience stores acquired fromHess.The increase in 2013 was primarily due to:•an increase in refined product cost of sales of $17.09 billion, primarily due to an increase in refined product sales volumes attributable to theacquisition of the Galveston Bay refinery; and•an increase in refinery direct operating costs of $1.62 billion, or $1.11 per barrel of total refinery throughput, primarily attributable to the addition ofthe Galveston Bay refinery, which had higher operating costs per barrel of throughput than the average of our other six refineries.Purchases from related parties increased $148 million in 2014 compared to 2013 and $77 million in 2013 compared to 2012. The increase in 2014 wasprimarily due to acquisitions of ownership interests in TAAE in August 2013 and Explorer in March 2014, resulting in purchases from these companiestotaling $118 million in 2014 and $24 million in 2013, being reported as purchases from related parties while purchases from these companies prior to theseacquisitions were reported as cost of revenues. In addition, we also had an increase in purchases from LOOP of $45 million in 2014. The increase in 2013 wasprimarily due to higher ethanol volumes purchased from our ethanol investments, partially offset by lower ethanol prices and decreases in purchases frompipeline affiliates, including Centennial Pipeline LLC (“Centennial”).Consumer excise taxes increased $422 million in 2014 compared to 2013 and $554 million in 2013 compared to 2012, primarily due to increases in taxablerefined product sales volumes, including the effects of the acquisitions of the Galveston Bay Refinery and Related Assets and Hess’ Retail Operations andRelated Assets.Depreciation and amortization increased $106 million in 2014 compared to 2013 and $225 million in 2013 compared to 2012. The increase in 2014 wasprimarily due to completion of certain capital investments at our Galveston Bay refinery, an increase in the number of convenience stores in our Speedwaysegment and the implementation of corporate-level information technology projects, partially offset by an impairment of a light products terminal in 2013.The increase in 2013 was primarily due to the completion of the heavy oil upgrading and expansion project at our Detroit, Michigan refinery in late 2012and our acquisition of the Galveston Bay Refinery and Related Assets in February 2013.Selling, general and administrative expenses increased $127 million in 2014 compared to 2013, primarily due to increases in contract services, employeecompensation and benefit expenses and credit card processing fees.49Table of ContentsOther taxes increased $50 million in 2014 compared to 2013 and $70 million in 2013 compared to 2012. The increase in 2014 was primarily due to increasesin property taxes of $30 million, payroll taxes of $27 million and environmental taxes of $11 million, partially offset by decreases in other tax expenses.These increases were attributable to a number of factors including the acquisitions of the Galveston Bay Refinery and Related Assets and Hess’ RetailOperations and Related Assets and the absence of a Federal Oil Spill Tax refund received in 2013. The increase in 2013 was primarily due to increases inproperty taxes of $41 million, payroll taxes of $21 million and sales and use tax expense of $13 million. The increases in 2013 were attributable to a numberof factors including the completion of the heavy oil upgrading and expansion project at our Detroit refinery, the acquisition of the Galveston Bay Refineryand Related Assets and Speedway’s acquisition of 97 convenience stores in 2012.Net interest and other financial costs increased $37 million in 2014 compared to 2013 and $70 million in 2013 compared to 2012. The increase in 2014 wasprimarily due to an increase in long-term debt related to the acquisition of Hess’ Retail Operations and Related Assets and MPLX’s acquisition of additionalinterest in Pipe Line Holdings. The increase in 2013 was primarily due to a decrease in capitalized interest in 2013 due to the completion of the Detroitrefinery heavy oil upgrading and expansion project in late 2012. We capitalized interest of $27 million in 2014, $28 million in 2013 and $101 million in2012.Provision for income taxes increased $167 million in 2014 compared to 2013 and decreased $732 million in 2013 compared to 2012, primarily due to ourincome before income taxes, which increased $589 million in 2014 compared to 2013 and decreased $1.99 billion in 2013 compared to 2012. The effectivetax rates in 2014, 2013 and 2012 are equivalent to or slightly less than the U.S. statutory rate of 35 percent primarily due to certain permanent benefitdifferences, including the domestic manufacturing deduction, partially offset by state and local tax expense. See Item 8. Financial Statements andSupplementary Data – Note 13 for further details.Segment ResultsRevenues are summarized by segment in the following table.(In millions) 2014 2013 2012Refining & Marketing$91,734 $94,910 $76,710Speedway16,932 14,475 14,243Pipeline Transportation597 537 459Segment revenues$109,263 $109,922 $91,412Items included in both revenues and costs: Consumer excise taxes$6,685 $6,263 $5,709Refining & Marketing segment revenues decreased $3.18 billion in 2014 compared to 2013 and increased $18.20 billion in 2013 compared to 2012. Thedecrease in 2014 was primarily due to lower refined product sales prices, partially offset by an increase in refined product sales volumes. The increase in 2013was primarily due to an increase in refined product sales volumes related to the Galveston Bay refinery acquired in February 2013, partially offset by lowerrefined product selling prices. The table below shows our Refining & Marketing segment refined product sales volumes and prices. 2014 2013 2012Refining & Marketing segment: Refined product sales volumes (thousands of barrels per day)(a)2,125 2,075 1,599Refined product sales destined for export (thousands of barrels per day)275 218 123Average refined product sales prices (dollars per gallon)$2.71 $2.87 $3.00(a) Includes intersegment sales and sales destined for export.The table below shows the average refined product benchmark prices for our marketing areas.(Dollars per gallon) 2014 2013 2012Chicago spot unleaded regular gasoline$2.55 $2.76 $2.84Chicago spot ultra-low sulfur diesel2.80 3.01 3.01USGC spot unleaded regular gasoline2.49 2.69 2.81USGC spot ultra-low sulfur diesel2.71 2.97 3.0550Table of ContentsRefining & Marketing intersegment sales to our Speedway segment increased $1.62 billion in 2014 compared to 2013 and $512 million in 2013 compared to2012, primarily due to increases in intersegment refined product sales volumes, partially offset by lower refined product sales prices. The increase inintersegment refined product sales volumes for 2014 was primarily due to the acquisition of convenience stores from Hess. 2014 2013 2012Refining & Marketing intersegment sales to Speedway: Intersegment sales (in millions)$10,912 $9,294 $8,782Refined product sales volumes (millions of gallons)3,766 2,976 2,727Average refined product sales prices (dollars per gallon)$2.89 $3.11 $3.21Speedway segment revenues increased $2.46 billion in 2014 compared to 2013 and $232 million in 2013 compared to 2012, primarily due to increases ingasoline and distillate sales of $1.98 billion and $138 million, respectively, and increases in merchandise sales of $476 million and $77 million,respectively. The increases in gasoline and distillate sales were primarily due to volume increases of 796 million gallons and 119 million gallons,respectively, primarily due to increases in the number of convenience stores, partially offset by decreases in gasoline and distillate selling prices of $0.20 pergallon and $0.09 per gallon, respectively. The increases in merchandise sales were primarily due to increases in the number of convenience stores and highersame store sales. The increase in the number of convenience stores for 2014 was primarily due to the acquisition of convenience stores from Hess.The following table includes certain revenue statistics for the Speedway segment. 2014 2013 2012Convenience stores at period-end2,746 1,478 1,464Gasoline & distillate sales (millions of gallons)3,942 3,146 3,027Average gasoline & distillate sales prices (dollars per gallon)$3.25 $3.45 $3.54Merchandise sales (in millions)$3,611 $3,135 $3,058Same store gasoline sales volume (period over period)(0.7)% 0.5% (0.8)%Same store merchandise sales (period over period)(a)5.0 % 4.3% 7.0 %(a) Excludes cigarettes.Pipeline Transportation segment revenue increased $60 million in 2014 compared to 2013 and $78 million in 2013 compared to 2012. The increase in 2014was primarily due to an increase in revenue related to volume deficiency credits and higher average tariffs received on crude oil and refined products shipped,partially offset by lower refined products and crude oil pipeline throughput volumes. The increase in 2013 was primarily due to higher average tariffsreceived on the volumes of crude oil and products shipped, higher crude oil throughput volumes and an increase in storage fees and other revenue.The following table includes throughput volumes for the Pipeline Transportation segment. 2014 2013 2012Pipeline Throughputs (thousands of barrels per day):(a) Crude oil pipelines1,241 1,293 1,191Refined products pipelines878 911 980Total2,119 2,204 2,171(a) On owned common-carrier pipelines, excluding equity method investments.51Table of ContentsIncome before income taxes and income from operations by segment are summarized in the following table.(In millions) 2014 2013 2012Income from operations by segment: Refining & Marketing$3,609 $3,206 $5,098Speedway544 375 310Pipeline Transportation(a)280 210 216Items not allocated to segments: Corporate and other unallocated items(a)(286) (271) (336)Minnesota Assets sale settlement gain— — 183Pension settlement expenses(b)(96) (95) (124)Income from operations4,051 3,425 5,347Net interest and other financial income (costs)(216) (179) (109)Income before income taxes$3,835 $3,246 $5,238(a) Included in the Pipeline Transportation segment for 2014, 2013 and 2012 are $19 million, $20 million and $4 million of corporate overhead expenses attributable to MPLX,which were included in items not allocated to segments prior to MPLX’s October 31, 2012 initial public offering. These expenses are not currently allocated to other segments.(b) See Item 8. Financial Statements and Supplementary Data – Note 23.Refining & Marketing segment income from operations increased $403 million in 2014 compared to 2013 and decreased $1.89 billion in 2013 compared to2012. The increase in 2014 was primarily due to more favorable net product price realizations and higher USGC and Chicago crack spreads, partially offsetby narrower crude oil differentials and higher turnaround and other direct operating costs. The decrease in 2013 was primarily due to narrower crude oildifferentials and lower net product price realizations, partially offset by higher refinery throughput and sales volumes.The following table presents certain market indicators that we believe are helpful in understanding the results of our Refining & Marketing segment’sbusiness.(Dollars per barrel) 2014 2013 2012Chicago LLS 6-3-2-1(a)(b)$9.56 $8.16 $6.74USGC LLS 6-3-2-1(a)7.23 6.24 6.67Blended 6-3-2-1(a)(c)8.11 6.97 6.71LLS96.90 107.38 111.67WTI92.91 98.05 94.15LLS – WTI crude oil differential(a)3.99 9.33 17.52Sweet/Sour crude oil differential(a)(d)6.97 8.53 12.47(a) All spreads and differentials are measured against prompt LLS.(b) Calculation utilizes USGC three percent residual fuel oil price as a proxy for Chicago three percent residual fuel oil price.(c) Blended Chicago/USGC crack spread is 38/62 percent in 2014, 38/62 percent in 2013 and 52/48 percent in 2012 based on MPC’s refining capacity by region in each period.(d) LLS (prompt) – [delivered cost of sour crude oil: Arab Light, Kuwait, Maya, Western Canadian Select and Mars].Based on the market indicators above and our refinery throughputs, we estimate the following impacts on Refining & Marketing segment income fromoperations for 2014 compared to 2013 and for 2013 compared to 2012:•The Chicago LLS 6-3-2-1 crack spread increased $1.40 per barrel in 2014 compared to 2013 and $1.42 per barrel in 2013 compared to 2012, whichhad positive impacts on segment income of $354 million and $291 million, respectively.•The USGC LLS 6-3-2-1 crack spread increased $0.99 per barrel in 2014 compared to 2013 which had a positive impact on segment income of $407million. The USGC LLS 6-3-2-1 crack spread decreased $0.43 per barrel in 2013 compared to 2012. This decrease was offset by an increase inrefinery throughput volumes, primarily due to the acquisition of the Galveston Bay refinery, which resulted in a positive impact to segment incomeof $949 million in 2013 compared to 2012.52Table of Contents•The LLS-WTI crude oil differential narrowed $5.34 per barrel in 2014 compared to 2013 and $8.19 per barrel in 2013 compared to 2012, which hadnegative impacts on segment income of $695 million and $978 million, respectively.•The sweet/sour crude oil differential narrowed $1.56 per barrel in 2014 compared to 2013 and $3.94 per barrel in 2013 compared to 2012, which hadnegative impacts on segment income of $489 million and $273 million, respectively. The unfavorable impact from 2013 compared to 2012 waspartially offset by higher refinery throughput and sales volumes.The market indicators shown above use spot market values and an estimated mix of crude purchases and products sold. Differences in our results compared tothese market indicators, including product price realizations, mix and crude costs as well as other items like refinery yields and other feedstock variances, hadestimated positive impacts on Refining & Marketing segment income of $1.73 billion in 2014 compared to 2013 and $298 million in 2013 compared to2012. We estimate the positive impact for 2014 was primarily due to more favorable net product price realizations as compared to spot market values and afavorable effect from valuing year end inventories using the LIFO method of accounting. We estimate the positive impact for 2013 was primarily due tofavorable crude oil and feedstock acquisition costs compared to market indicators, partially offset by lower product price realizations.In the fourth quarter of 2014, we recognized a build in our crude oil and refined products inventories. For purposes of our annual LIFO inventory costing, thisincrease in inventory is recorded based on pricing at the beginning of 2014, which was substantially higher than fourth quarter prices. As a result, Refining &Marketing segment income for the fourth quarter reflects a favorable effect of approximately $240 million. Comparing 2014 to 2013, the favorable LIFOimpact was approximately $130 million.The following table summarizes our refinery throughputs. 2014 2013 2012Refinery throughputs (thousands of barrels per day): Crude oil refined1,622 1,589 1,195Other charge and blendstocks184 213 168Total1,806 1,802 1,363Sour crude oil throughput percent52 53 53WTI-priced crude oil throughput percent19 21 28Total refinery throughputs increased 439 mbpd in 2013 compared to 2012, primarily due to the Galveston Bay refinery, which we acquired on February 1,2013.The following table includes certain key operating statistics for the Refining & Marketing segment. 2014 2013 2012Refining & Marketing gross margin (dollars per barrel)(a)$15.05 $13.24 $17.85Refinery direct operating costs (dollars per barrel):(b) Planned turnaround and major maintenance$1.80 $1.20 $1.00Depreciation and amortization1.41 1.36 1.44Other manufacturing(c)4.86 4.14 3.15Total$8.07 $6.70 $5.59(a) Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs.(b) Per barrel of total refinery throughputs.(c) Includes utilities, labor, routine maintenance and other operating costs.53Table of ContentsRefinery direct operating costs increased $1.37 per barrel in 2014 compared to 2013 and $1.11 per barrel in 2013 compared to 2012, which include increasesin planned turnaround and major maintenance costs of $0.60 per barrel and $0.20 per barrel, respectively, and increases in other manufacturing costs of $0.72per barrel and $0.99 per barrel, respectively. The increase in planned turnaround and major maintenance costs for 2014 was primarily attributable to theGalveston Bay, Robinson and Catlettsburg refineries, partially offset by decreases at the Garyville and Canton refineries. The increase in planned turnaroundand major maintenance costs for 2013 was primarily attributable to the Galveston Bay refinery. The increases in other manufacturing costs were primarilyattributable to higher energy costs, catalyst expenses and routine maintenance costs for 2014 and the addition of the Galveston Bay refinery for 2013, whichhad higher operating costs per barrel of throughput than the average of our other six refineries.We purchase RINs to satisfy a portion of our RFS2 compliance. Our expenses associated with purchased RINs were $141 million in 2014, $264 million in2013 and $105 million in 2012. The decrease in 2014 was primarily due to decreases in the average cost of ethanol and biomass-based biodiesel RINs anddecreases in our estimated advanced biofuel and ethanol obligation volumes. The increase in 2013 was primarily due to increases in the average cost ofethanol and biodiesel RINs.Speedway segment income from operations increased $169 million in 2014 compared to 2013 and $65 million in 2013 compared to 2012, primarily due toincreases in our gasoline and distillate gross margin of $246 million and $54 million, respectively, and increases in our merchandise gross margin of $150million and $30 million, respectively, partially offset by higher operating expenses. The increases were primarily attributable to increases in the number ofconvenience stores, which for 2014 was primarily due to the acquisition of convenience stores from Hess. The increases in merchandise gross margin wererelated to a combination of higher merchandise and food sales and improved margins. The convenience stores acquired from Hess contributed $113 millionto Speedway segment income from operations in 2014.The following table includes margin statistics for the Speedway segment. 2014 2013 2012Gasoline & distillate gross margin (dollars per gallon)(a)$0.1775 $0.1441 $0.1318Merchandise gross margin (in millions)$975 $825 $795Merchandise gross margin percent27.0% 26.3% 26.0%(a) The price paid by consumers less the cost of refined products, including transportation, consumer excise taxes and bankcard processing fees, divided by gasoline and distillatesales volume.Pipeline Transportation segment income from operations increased $70 million in 2014 compared to 2013 and decreased $6 million in 2013 compared to2012. The increase in 2014 was primarily due to higher pipeline transportation revenue and an increase in income from our pipeline affiliates, which wasprimarily attributable to our investment in LOOP, partially offset by an increase in operating expenses primarily attributable to the proposed Cornerstonepipeline project and pipeline maintenance costs. The decrease in 2013 was primarily due to higher operating expenses and depreciation and lower pipelineaffiliate income, partially offset by higher transportation revenue. The higher expenses and revenues were primarily attributable to the formation of MPLX.Corporate and other unallocated expenses increased $15 million in 2014 compared to 2013 and decreased $65 million in 2013 compared to 2012, primarilydue to costs incurred in connection with the acquisition of Hess’ Retail Operations and Related Assets in 2014 and lower unallocated employee benefitexpenses and lower employee incentive compensation expenses in 2013 compared to 2012.We recognized a gain of $183 million in 2012 associated with the settlement agreement with the buyer of our Minnesota assets, which included $86 millionof the deferred gain that was recorded when the sale transaction was originally closed. See Item 8. Financial Statements and Supplementary Data – Note 6 foradditional information on the Minnesota assets sale and subsequent settlement with the buyer.We recorded pretax pension settlement expenses of $96 million in 2014, $95 million in 2013 and $124 million in 2012 resulting from the level of employeelump sum retirement distributions that occurred during these years.54Table of ContentsLiquidity and Capital ResourcesCash FlowsOur cash and cash equivalents balance was $1.49 billion at December 31, 2014 compared to $2.29 billion at December 31, 2013. Net cash provided by (usedin) operating activities, investing activities and financing activities for the past three years is presented in the following table.(In millions) 2014 2013 2012Net cash provided by (used in): Operating activities$3,110 $3,405 $4,492Investing activities(4,543) (2,756) (1,452)Financing activities635 (3,217) (1,259)Total$(798) $(2,568) $1,781Net cash provided by operating activities decreased $295 million in 2014 compared to 2013, primarily due to unfavorable changes in working capital of$892 million compared to 2013, partially offset by an increase in net income of $422 million and non-cash income adjustments of $175 million. Net cashprovided by operating activities decreased $1.09 billion in 2013 compared to 2012, primarily due to decreases in net income of $1.26 billion and non-cashincome adjustments of $453 million, partially offset by favorable changes in working capital of $626 million compared to 2012.For 2014, changes in working capital were a net $694 million use of cash, primarily due to a decrease in accounts payable and accrued liabilities and anincrease in inventories, partially offset by a decrease in current receivables. Changes from December 31, 2013 to December 31, 2014 per the consolidatedbalance sheets, excluding the impact of acquisitions, were as follows:•Accounts payable decreased $1.65 billion from year-end 2013, primarily due to lower crude oil payable prices, partially offset by higher crude oilpayable volumes.•Inventories increased $796 million from year-end 2013, primarily due to higher refined product and crude oil inventory volumes.•Current receivables decreased $1.63 billion from year-end 2013, primarily due to lower refined product and crude oil receivable prices.For 2013, changes in working capital were a net $198 million source of cash, primarily due to an increase in accounts payable and accrued liabilities,partially offset by increases in current receivables and inventory volumes. Accounts payable increased $1.45 billion from year-end 2012, primarily due tohigher crude oil payable volumes, and current receivables increased $949 million from year-end 2012, primarily due to higher refined product receivablevolumes attributable to an increase in refined product sales volumes. Both of these increases are associated with the Galveston Bay refinery acquired inFebruary 2013. Changes in inventories were a $305 million use of cash in 2013, primarily due to higher refined product and crude oil inventory volumes.For 2012, changes in working capital were a net $428 million use of cash, primarily due to a decrease in accounts payable and accrued liabilities resultingprimarily from reductions in crude oil prices and payable volumes, partially offset by a decrease in current receivables resulting primarily from reductions incrude oil prices and receivable volumes.Cash flows used in investing activities increased $1.79 billion in 2014 compared to 2013 and $1.30 billion in 2013 compared to 2012. The investingactivity is further discussed below.55Table of ContentsThe consolidated statements of cash flows exclude changes to the consolidated balance sheets that did not affect cash. A reconciliation of additions toproperty, plant and equipment to total capital expenditures and investments follows for each of the last three years.(In millions) 2014 2013 2012Additions to property, plant and equipment per consolidated statements of cash flows$1,480 $1,206 $1,369Non-cash additions to property, plant and equipment4 — —Asset retirement expenditures2 — —Increase (decrease) in capital accruals95 73 (117)Investments in equity method investees413 124 28Total capital expenditures and investments before acquisitions1,994 1,403 1,280Acquisitions(a)2,744 1,386 180Total capital expenditures and investments$4,738 $2,789 $1,460(a) The 2014 acquisitions include the acquisition of Hess’ Retail Operations and Related Assets. The 2013 acquisitions include the acquisition of the Galveston Bay Refinery andRelated Assets. The acquisition numbers above include property, plant and equipment and intangibles. See Item 8. Financial Statements and Supplementary Data – Note 5 forfurther details.Capital expenditures and investments for each of the last three years are summarized by segment below.(In millions) 2014 2013 2012Capital expenditures and investments:(a)(b) Refining & Marketing$1,104 $2,094 $705Speedway2,981 296 340Pipeline Transportation543 234 211Corporate and Other(c)110 165 204Total$4,738 $2,789 $1,460(a) Capital expenditures include changes in capital accruals.(b) Includes $2.71 billion in 2014 for the acquisition of Hess’ Retail Operations and Related Assets and $1.36 billion in 2013 for the acquisition of the Galveston Bay Refinery andRelated Assets. See Item 8. Financial Statements and Supplementary Data – Note 5.(c) Includes capitalized interest of $27 million, $28 million and $101 million for 2014, 2013 and 2012, respectively.The acquisition of Hess’ Retail Operations and Related Assets comprised 58 percent of our total capital spending in 2014. The acquisition of the GalvestonBay Refinery and Related Assets comprised 49 percent of our total capital spending in 2013. The Detroit refinery heavy oil upgrading and expansion project,which we completed in 2012, comprised 46 percent (excluding capitalized interest associated with this project) of our Refining & Marketing segment capitalspending in 2012.Cash provided by disposal of assets totaled $27 million, $16 million and $53 million in 2014, 2013 and 2012, respectively. The $53 million of cash fromasset disposals in 2012 primarily included proceeds from a settlement agreement with the buyer of our Minnesota assets.Net investments were a $404 million use of cash in 2014 compared to a $74 million use of cash in 2013 and a $51 million source of cash in 2012. The changein 2014 compared to 2013 was primarily due to increases in contributions to the Sandpiper and SAX pipeline projects of $287 million and our investment inExplorer of $77 million, partially offset by a return of capital from our ethanol affiliates of $9 million. The change in 2013 compared to 2012 was primarilydue to investments in our ethanol affiliates of $75 million and the Sandpiper pipeline project of $24 million.Financing activities were a $635 million source of cash in 2014, a $3.22 billion use of cash in 2013 and a $1.26 billion use of cash in 2012. The sources ofcash primarily consisted of net long-term debt borrowings in 2014 and proceeds from the issuance of MPLX common units in 2014 and 2012. The uses ofcash in all three years primarily consisted of common stock repurchases through open market purchases and our ASR programs and dividend payments.Long-term debt borrowings and repayments were a net $3.25 billion source of cash in 2014 compared to a $21 million use of cash in 2013 and a $17 millionuse of cash in 2012. During 2014, we issued $1.95 billion aggregate principal amount of senior unsecured notes and borrowed $700 million under a termloan credit agreement to finance the acquisition of Hess’ Retail Operations and Related Assets. In addition, MPLX had net borrowings of $635 million underits revolving credit agreement and term loan agreement. See Item 8. Financial Statements and Supplementary Data – Note 20 for additional information onour long-term debt.56Table of ContentsCash used in common stock repurchases totaled $2.13 billion in 2014, $2.79 billion in 2013 and $1.35 billion in 2012 associated with the share repurchaseplans authorized by our board of directors. The table below summarizes our total share repurchases. See Item 8. Financial Statements and Supplementary Data– Note 10 for further discussion of the share repurchase plans.(In millions, except per share data)2014 2013 2012Number of shares repurchased(a)24 37 28Cash paid for shares repurchased$2,131 $2,793 $1,350Effective average cost per delivered share$88.63 $76.14 $46.73(a) Shares repurchased in 2013 includes 1 million shares received under the November 2012 ASR program, which were paid for in 2012.Cash used in dividend payments totaled $524 million in 2014, $484 million in 2013 and $407 million in 2012. The increases were primarily due to increasesin our base dividend, partially offset by a decrease in the number of outstanding shares of our common stock as a result of share repurchases. Dividends pershare were $1.84 in 2014, $1.54 in 2013 and $1.20 in 2012.Cash proceeds from the issuance of MPLX common units were $221 million in 2014 and $407 million in 2012. The initial public offering in 2012represented the sale of a 26.4 percent interest in MPLX. See Item 8. Financial Statements and Supplementary Data – Note 4 for further discussion of MPLX.Derivative InstrumentsSee Item 7A. Quantitative and Qualitative Disclosures about Market Risk for a discussion of derivative instruments and associated market risk.Capital ResourcesOur liquidity totaled $5.27 billion at December 31, 2014 consisting of: December 31, 2014(In millions) Total Capacity OutstandingBorrowings AvailableCapacityRevolving credit agreement(a)$2,500 $— $2,500Trade receivables securitization facility(b)1,280 — 1,280Total$3,780 $— $3,780Cash and cash equivalents 1,494Total liquidity $5,274(a) Excludes MPLX’s $1 billion revolving credit agreement, which had $385 million of borrowings outstanding as of December 31, 2014.(b) Availability under our $1.3 billion trade receivables securitization facility is a function of refined product selling prices, which will be lower in a sustained lower priceenvironment. As of January 31, 2015, eligible trade receivables supported borrowings of $700 million.Because of the alternatives available to us, including internally generated cash flow and access to capital markets, we believe that our short-term and long-term liquidity is adequate to fund not only our current operations, but also our near-term and long-term funding requirements, including capital spendingprograms, the repurchase of shares of our common stock, dividend payments, defined benefit plan contributions, repayment of debt maturities and otheramounts that may ultimately be paid in connection with contingencies.MPC Revolving Credit Agreement – We have a $2.5 billion unsecured revolving credit agreement (“Credit Agreement”) in place with a maturity date ofSeptember 14, 2017. The Credit Agreement includes letter of credit issuing capacity of up to $2.0 billion and swingline loan capacity of up to $100 million.We may increase our borrowing capacity under the Credit Agreement by up to an additional $500 million, subject to certain conditions including theconsent of the lenders whose commitments would be increased. In addition, the maturity date may be extended for up to two additional one-year periodssubject to the approval of lenders holding greater than 50 percent of the commitments then outstanding, provided that the commitments of any non-consenting lenders will be terminated on the then-effective maturity date.Borrowings under the Credit Agreement bear interest at either the Adjusted LIBO Rate (as defined in the Credit Agreement) plus a margin or the AlternateBase Rate (as defined in the Credit Agreement) plus a margin. We are charged various fees and expenses in connection with the Credit Agreement, includingadministrative agent fees, commitment fees on the unused portion of our borrowing capacity and fees related to issued and outstanding letters of credit. Theapplicable interest rates and certain of the fees fluctuate based on the credit ratings in effect from time to time on our long-term debt.57Table of ContentsThere were no borrowings or letters of credit outstanding at December 31, 2014.Trade receivables securitization facility – On December 18, 2013, we entered into a three-year, $1.3 billion trade receivables securitization facility with agroup of financial institutions that act as committed purchasers, conduit purchasers, letter of credit issuers and managing agents under the facility. Thefacility is evidenced by a Receivables Purchase Agreement and a Second Amended and Restated Receivables Sale Agreement and replaces the previouslyexisting accounts receivable facility that was set to expire on June 30, 2014.The facility consists of one of our wholly-owned subsidiaries, Marathon Petroleum Company LP (“MPC LP”), selling or contributing on an on-going basis allof its trade receivables (including trade receivables acquired from Marathon Petroleum Trading Canada LLC, a wholly-owned subsidiary of MPC LP),together with all related security and interests in the proceeds thereof, without recourse, to another wholly-owned, bankruptcy-remote special purposesubsidiary, MPC Trade Receivables Company LLC (“TRC”), in exchange for a combination of cash, equity or a subordinated note issued by TRC to MPCLP. TRC, in turn, has the ability to finance its purchase of the receivables from MPC LP by selling undivided ownership interests in qualifying tradereceivables, together with all related security and interests in the proceeds thereof, without recourse, to the purchasing group in exchange for cash proceeds.The facility also provides for the issuance of letters of credit of up to an initial amount of $1.25 billion, provided that the aggregate credit exposure of thepurchasing group is limited to no more than $1.3 billion at any one time.To the extent that TRC retains an ownership interest in the receivables it has purchased or received from MPC LP, such interest will be included in ourconsolidated financial statements solely as a result of the consolidation of the financial statements of TRC with those of MPC. The receivables sold orcontributed to TRC are available first and foremost to satisfy claims of the creditors of TRC and are not available to satisfy the claims of creditors of MPC.TRC has granted a security interest in all of its assets to the purchasing group to secure its obligations under the Receivables Purchase Agreement.Proceeds from the sale of undivided percentage ownership interests in qualifying receivables under the facility will be reflected as debt on our consolidatedbalance sheet. We will remain responsible for servicing the receivables sold to the purchasing group. TRC pays floating-rate interest charges and usage feeson amounts outstanding under the facility, if any, and certain other fees related to the administration of the facility and letters of credit that are issued andoutstanding under the facility.As of December 31, 2014, eligible trade receivables supported borrowings of $1.28 billion. There were no borrowings outstanding at December 31, 2014.Availability under our trade receivables securitization facility is a function of refined product selling prices, which will be lower in a sustained lower priceenvironment. As of January 31, 2015, eligible trade receivables supported borrowings of $700 million.MPLX Credit Agreement – On November 20, 2014, MPLX entered into a credit agreement with a syndicate of lenders (“MPLX Credit Agreement”), whichprovides for a five-year $1 billion bank revolving credit facility and a $250 million term loan facility. The maturity date on both facilities is November 20,2019.The bank revolving credit facility includes letter of credit issuing capacity of up to $250 million and swingline loan capacity of up to $100 million. Theborrowing capacity under the MPLX Credit Agreement may be increased by up to an additional $500 million, subject to certain conditions, including theconsent of the lenders whose commitments would increase. In addition, the maturity date may be extended up to two additional one-year periods subject tothe approval of lenders holding the majority of the commitments then outstanding, provided that the commitments of any non-consenting lenders will beterminated on the original maturity date.The term loan facility was drawn in full on November 20, 2014. The maturity date for the term loan facility may be extended for up to two additional one-year periods subject to the consent of the lenders holding a majority of the outstanding term loan borrowings, provided that the portion of the term loanborrowings held by any non-consenting lenders will continue to be due and payable on the original maturity date. The borrowings under this facility during2014 were at an average interest rate of 1.4 percent.Borrowings under the MPLX Credit Agreement bear interest at either the Adjusted LIBO Rate or the Alternate Base Rate (as defined in the MPLX CreditAgreement) plus a specified margin. MPLX is charged various fees and expenses in connection with the agreement, including administrative agent fees,commitment fees on the unused portion of the bank revolving credit facility and fees with respect to issued and outstanding letters of credit. The applicableinterest rates and certain of the fees fluctuate based the credit ratings in effect from time to time on MPLX’s long-term debt.58Table of ContentsIn connection with entering into this new credit agreement, MPLX terminated its previously existing $500 million five-year MPLX Operations LLC bankrevolving credit agreement, dated as of September 14, 2012. During 2014, MPLX borrowed $280 million under the MPLX Operations LLC bank revolvingcredit agreement, at an average interest rate of 1.5 percent, per annum, and repaid all of these borrowings.During 2014, MPLX borrowed $630 million under the new revolving credit agreement, at an average interest rate of 1.4 percent, per annum, and repaid $245million of these borrowings. At December 31, 2014, MPLX had $385 million of borrowings and no letters of credit outstanding under the MPLX CreditAgreement, resulting in total unused loan availability of $615 million, or 61.5 percent of the borrowing capacity.Debt-to-Total-Capital RatioAs described in further detail below, the increase in debt as of year-end 2014 compared to year-end 2013 was primarily related to financing a portion of thepurchase price for the acquisition of Hess’ Retail Operations and Related Assets. Our debt-to-total capital ratio (total debt to total debt-plus-equity) was 37percent and 23 percent at December 31, 2014 and 2013, respectively. December 31,(In millions) 2014 2013Long-term debt due within one year$27 $23Long-term debt6,610 3,373Total debt$6,637 $3,396Calculation of debt-to-total capital ratio: Total debt$6,637 $3,396Plus equity11,390 11,332Total debt plus equity$18,027 $14,728Debt-to-total capital ratio37% 23%MPC Term Loan Agreement – On August 26, 2014, we entered into a $700 million five-year senior unsecured term loan credit agreement (the “Term LoanAgreement”) with a syndicate of lenders to fund a portion of the purchase price for the acquisition of Hess’ Retail Operations and Related Assets. The TermLoan Agreement matures on September 24, 2019 and may be prepaid at any time without premium or penalty. We are obligated to pay certain customary feesunder the Term Loan Agreement, including an annual administrative fee.Amounts outstanding under the Term Loan Agreement bear interest at either of the following rates at our election (i) the sum of the Adjusted LIBO Rate (asdefined in the Term Loan Agreement), plus a margin ranging between 0.875 percent to 1.75 percent, depending on our credit ratings, or (ii) the sum of theBase Rate (as defined in the Term Loan Agreement), plus a margin ranging between zero percent to 0.75 percent, depending on our credit ratings. Theborrowings under this facility during 2014 were at an average interest rate of 1.3 percent.Senior Notes – On September 5, 2014, we completed a public offering of $1.95 billion aggregate principal amount of senior unsecured notes (the “SeniorNotes”), consisting of $750 million aggregate principal amount of our Senior Notes due 2024, $800 million aggregate principal amount of our Senior Notesdue 2044 and $400 million aggregate principal amount of our Senior Notes due 2054. The net proceeds from the offering of the Senior Notes wereapproximately $1.92 billion, after deducting underwriting discounts and estimated offering expenses. The net proceeds were used to fund a portion of thepurchase price for the acquisition of Hess’ Retail Operations and Related Assets. Interest on each series of Senior Notes is payable semi-annually in arrears onMarch 15 and September 15 of each year, commencing on March 15, 2015.The Senior Notes are unsecured and unsubordinated obligations of ours and rank equally with all our other existing and future unsecured and unsubordinatedindebtedness.The Term Loan Agreement, the Credit Agreement and the MPLX Credit Agreement contain representations and warranties, affirmative and negativecovenants and events of default that we consider usual and customary for agreements of these types. The financial covenant included in the Term LoanAgreement and the MPC Credit Agreement requires us to maintain, as of the last day of each fiscal quarter, a ratio of Consolidated Net Debt to TotalCapitalization (as defined in the Term Loan Agreement and the MPC Credit Agreement) of no greater than 0.65 to 1.00. As of December 31, 2014, we were incompliance with this debt covenant with a ratio of Consolidated Net Debt to Total Capitalization of 0.33 to 1.00, as well as the other covenants contained inthe Term Loan Agreement and the MPC Credit Agreement.59Table of ContentsThe MPLX Credit Agreement includes certain representations and warranties, affirmative and restrictive covenants and events of default that we consider tobe usual and customary for an agreement of this type. The MPLX Credit Agreement includes a financial covenant that requires MPLX to maintain a ratio ofConsolidated Total Debt as of the end of each fiscal quarter to Consolidated EBITDA (both as defined in the MPLX Credit Agreement) for the prior four fiscalquarters of no greater than 5.0 to 1.0 (or 5.5 to 1.0 for up to two fiscal quarters following certain acquisitions). Consolidated EBITDA is subject toadjustments for certain acquisitions completed and capital projects undertaken during the relevant period. Other covenants restrict MPLX from incurringdebt, creating liens on its assets and entering into transactions with affiliates. As of December 31, 2014, MPLX was in compliance with the covenantscontained in the MPLX Credit Agreement, including a ratio of Consolidated Total Debt to Consolidated EBITDA of 2.8 to 1.0.Our intention is to maintain an investment grade credit profile. As of February 9, 2015, the credit ratings on our senior unsecured debt were at or aboveinvestment grade level as follows. Rating AgencyRatingMoody’sBaa2 (stable outlook)Standard & Poor’sBBB (stable outlook)FitchBBB (stable outlook)The ratings reflect the respective views of the rating agencies. Although it is our intention to maintain a credit profile that supports an investment graderating, there is no assurance that these ratings will continue for any given period of time. The ratings may be revised or withdrawn entirely by the ratingagencies if, in their respective judgments, circumstances so warrant.Neither the Credit Agreement, the MPLX Credit Agreement nor our trade receivables securitization facility contains credit rating triggers that would result inthe acceleration of interest, principal or other payments in the event that our credit ratings are downgraded. However, any downgrades of our senior unsecureddebt to below investment grade ratings would increase the applicable interest rates, yields and other fees payable under the Credit Agreement and our tradereceivables securitization facility. In addition, a downgrade of our senior unsecured debt rating to below investment grade levels could, under certaincircumstances, decrease the amount of trade receivables that are eligible to be sold under our trade receivables securitization facility, impact our ability topurchase crude oil on an unsecured basis and could result in us having to post letters of credit under existing transportation services agreements.Capital RequirementsWe have a capital and investment budget for 2015 of $2.53 billion, excluding capitalized interest. Additional details related to the 2015 capital andinvestment budget are discussed in the Capital Budget Outlook section below.Pursuant to the purchase and sale agreement for the Galveston Bay Refinery and Related Assets, we may be required to pay the seller a contingent earnout ofup to an additional $700 million over six years, subject to certain conditions. In July 2014, we paid $180 million for the first period’s contingent earnout. SeeItem 8. Financial Statements and Supplementary Data – Notes 5 and 18.While we have no required contributions to our pension plans for 2015, we may make voluntary contributions at our discretion.On January 31, 2015, our board of directors approved a 50 cents per share dividend, payable March 10, 2015 to stockholders of record at the close of businesson February 18, 2015.On July 30, 2014, our board of directors approved an additional $2.0 billion share repurchase authorization expiring in July 2016. As of December 31, 2014,our board of directors had approved $8.0 billion in total share repurchase authorizations since January 1, 2012 and we have repurchased a total of $6.27billion of our common stock under these authorizations, leaving $1.73 billion available for repurchases. Under these authorizations, we have acquired 89million shares at an average cost per share of $70.35.We may utilize various methods to effect the repurchases, which could include open market repurchases, negotiated block transactions, accelerated sharerepurchases or open market solicitations for shares, some of which may be effected through Rule 10b5-1 plans. The timing and amount of future repurchases,if any, will depend upon several factors, including market and business conditions, and such repurchases may be discontinued at any time.The above discussion contains forward-looking statements with respect to share repurchase authorizations. Factors that could affect the share repurchaseauthorizations and the timing of any repurchases include, but are not limited to business conditions, availability of liquidity and the market price of ourcommon stock. These factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements.60Table of ContentsContractual Cash ObligationsThe table below provides aggregated information on our consolidated obligations to make future payments under existing contracts as of December 31,2014. The contractual obligations detailed below do not include our contractual obligations to MPLX under various fee-based commercial agreements asthese transactions are eliminated in the consolidated financial statements.(In millions) Total 2015 2016-2017 2018-2019 Later YearsLong-term debt(a)$11,141 $276 $1,256 $1,809 $7,800Capital lease obligations(b)470 47 90 84 249Operating lease obligations1,326 249 359 250 468Purchase obligations:(c) Crude oil, feedstock, refined product and renewable fuel contracts(d)10,379 7,500 800 1,023 1,056Transportation and related contracts4,336 257 656 840 2,583Contracts to acquire property, plant and equipment(e)(f)1,727 784 943 — —Service, materials and other contracts(g)2,047 478 532 402 635Total purchase obligations18,489 9,0192,931 2,265 4,274Other long-term liabilities reported in the consolidated balance sheet(h)1,111 77 181 235 618Total contractual cash obligations$32,537 $9,668 $4,817 $4,643 $13,409(a) Includes interest payments for our senior notes, term loans and the MPLX Credit Agreement and commitment and administrative fees for our Credit Agreement, the MPLX CreditAgreement and our trade receivables securitization facility.(b) Capital lease obligations represent future minimum payments.(c) Includes both short- and long-term purchases obligations.(d) These contracts include variable price arrangements with estimated prices to be paid primarily based on futures curves.(e) Includes $703 million to fund 37.5 percent of the construction of the Sandpiper pipeline project and $185 million to fund 35 percent of the construction of the SAX pipelineproject.(f) Includes $520 million of contingent consideration associated with the acquisition of the Galveston Bay Refinery and Related Assets. See Item 8. Financial Statements andSupplementary Data – Note 5 for additional information on this acquisition.(g) Primarily includes contracts to purchase services such as utilities, supplies and various other maintenance and operating services.(h) Primarily includes obligations for pension and other postretirement benefits including medical and life insurance, which we have estimated through 2024. See Item 8. FinancialStatements and Supplementary Data – Note 23.Off-Balance Sheet ArrangementsOff-balance sheet arrangements comprise those arrangements that may potentially impact our liquidity, capital resources and results of operations, eventhough such arrangements are not recorded as liabilities under accounting principles generally accepted in the United States. Our off-balance sheetarrangements are limited to indemnities and guarantees that are described below. Although these arrangements serve a variety of our business purposes, weare not dependent on them to maintain our liquidity and capital resources, and we are not aware of any circumstances that are reasonably likely to cause theoff-balance sheet arrangements to have a material adverse effect on liquidity and capital resources.We have provided various guarantees related to equity method investees. In conjunction with the Spinoff, we entered into various indemnities andguarantees to Marathon Oil. These arrangements are described in Item 8. Financial Statements and Supplementary Data – Note 26.Capital Budget OutlookWe have a capital and investment budget for 2015 of $2.53 billion, excluding capitalized interest and any acquisitions we may make. This represents a 27percent increase from our 2014 spending, excluding the acquisition of Hess’ Retail Operations and Related Assets. The budget includes spending on refining,retail marketing, transportation, logistics and brand marketing projects as well as amounts designated for corporate activities. We continuously evaluate ourcapital budget and make changes as conditions warrant.Refining & MarketingThe Refining & Marketing segment’s 2015 capital budget is $1.28 billion, which includes $234 million for midstream assets, approximately $370 million forrefining margin enhancement projects and approximately $675 million for refinery-sustaining capital. A number of these projects span multiple years.61Table of ContentsThe $234 million budgeted for midstream assets includes projects that will allow us to process condensate from the Utica Shale region and grow Gulf Coastexport capabilities. We have a project to build a condensate splitter at our Catlettsburg refinery to allow it to process up to 35 mbpcd of condensate from theUtica Shale region that we expect to complete in 2015. We began operation of a condensate splitter at our Canton refinery at the end of 2014 to allow it toprocess up to 25 mbpcd of condensate. We have projects at our Galveston Bay and Garyville refineries to increase export capabilities by 165 mbpd by 2018.In 2015, we expect to complete projects representing 50 mbpd of that total.The $370 million budgeted for refining margin enhancement projects includes projects that will allow us to increase our diesel production and to processlight crude oil from the Utica Shale region. At our Garyville refinery, we completed a hydrocracker expansion in the first quarter of 2014 that increased thehydrocracker capacity to 110 mbpcd and we expect to complete a project to expand the distillate hydrotreater by 10 mbpcd in the first quarter of 2015. At ourGalveston Bay refinery, we have a hydrocracker project designed to increase our ULSD production by nine mbpd by shifting yields from gasoline, which weexpect to complete in 2015. At our Robinson refinery, we have a similar project to revamp our distillate hydrocracker to improve margins by processing morefeedstock at a lower conversion and shifting approximately five mbpd of light products to ULSD production and a project to increase the light crude oilprocessing capacity by 30 mbpcd, which will allow it to run 100 percent light crude oil. We expect to complete these projects in 2015 and 2016,respectively.During 2014, we worked on a front-end engineering and design study for a residual fuel hydrocracker project at our Garyville refinery intended to increasemargins by upgrading residual fuel to ULSD and gas oil. We are deferring a final investment decision on this project with estimated total costs of $2.2 billionto $2.5 billion as we further evaluate the implications of current market conditions on the project. As of December 31, 2014, we have capitalized $90 millionof costs associated with this project. If a decision is made to not pursue this project, there could be a future impairment of the costs incurred for the project.The remaining $675 million budget is primarily allocated to maintaining facilities and meeting regulatory requirements at our refineries.SpeedwayThe Speedway segment’s 2015 capital budget of $452 million is focused on continued growth and integrating the convenience stores acquired from Hessinto Speedway. The budget includes approximately $240 million for the Hess retail outlets primarily associated with store conversions and remodels, whichwill drive incremental merchandise sales. The remaining budget is primarily for new convenience store construction and land acquisition to expand ourmarkets and remodeling and rebuilding projects to upgrade and enhance our existing facilities. We have identified numerous opportunities for newconvenience stores or store rebuilds in our existing market, western Pennsylvania and Tennessee. Also included in the capital budget are expenditures fortechnology, equipment and dispenser upgrades.Pipeline TransportationThe Pipeline Transportation segment’s 2015 capital budget of $659 million is focused on projects to support the changing energy landscape in the UnitedStates, including equity investments in major pipeline projects, new infrastructure and upgrades to replace or enhance our existing facilities. We expect toinvest approximately $310 million in the Sandpiper and SAX pipeline projects in 2015 and $1.5 billion in total.In addition, pending the completion of a binding open season, MPLX is planning to construct the Cornerstone pipeline project to connect Utica Shaleproduction in southeastern Ohio to our Canton refinery and related build-out opportunities, which is expected to cost approximately $200 million and isanticipated to be operational in 2016.Corporate and OtherThe remaining 2015 capital budget includes $140 million, primarily related to an expansion project for our corporate headquarters and upgrades toinformation technology systems.62Table of ContentsOur opinions concerning liquidity and capital resources and our ability to avail ourselves in the future of the financing options mentioned in the aboveforward-looking statements are based on currently available information. If this information proves to be inaccurate, future availability of financing may beadversely affected. Factors that affect the availability of financing include our performance (as measured by various factors, including cash provided byoperating activities), the state of worldwide debt and equity markets, investor perceptions and expectations of past and future performance, the globalfinancial climate, and, in particular, with respect to borrowings, the levels of our outstanding debt and credit ratings by rating agencies. The discussion ofliquidity and capital resources above also contains forward-looking statements regarding expected capital and investment spending, costs for projects underconstruction, project completion dates and expectations or projections about strategies and goals for growth, upgrades and expansion. The forward-lookingstatements about our capital and investment budget are based on current expectations, estimates and projections and are not guarantees of futureperformance. Actual results may differ materially from these expectations, estimates and projections and are subject to certain risks, uncertainties and otherfactors, some of which are beyond our control and are difficult to predict. Some factors that could cause actual results to differ materially include prices of anddemand for crude oil and refinery feedstocks and refined products, actions of competitors, delays in obtaining necessary third-party approvals, changes inlabor, materials, and equipment costs and availability, planned and unplanned outages, the delay of, cancellation of or failure to implement planned capitalprojects, project cost overruns, disruptions or interruptions of our refining operations due to the shortage of skilled labor and unforeseen hazards such asweather conditions, acts of war or terrorist acts and the governmental or military response, and other operating and economic considerations.Transactions with Related PartiesWe believe that transactions with related parties were conducted under terms comparable to those with unrelated parties. See Item 8. Financial Statements andSupplementary Data – Note 8 for discussion of activity with related parties.Environmental Matters and Compliance CostsWe have incurred and may continue to incur substantial capital, operating and maintenance, and remediation expenditures as a result of environmental lawsand regulations. If these expenditures, as with all costs, are not ultimately reflected in the prices of our products and services, our operating results will beadversely affected. We believe that substantially all of our competitors must comply with similar environmental laws and regulations. However, the specificimpact on each competitor may vary depending on a number of factors, including the age and location of its operating facilities, marketing areas, productionprocesses and whether it is also engaged in the petrochemical business or the marine transportation of crude oil and refined products.Legislation and regulations pertaining to fuel specifications, climate change and greenhouse gas emissions have the potential to materially adversely impactour business, financial condition, results of operations and cash flows, including costs of compliance and permitting delays. The extent and magnitude ofthese adverse impacts cannot be reliably or accurately estimated at this time because specific regulatory and legislative requirements have not been finalizedand uncertainty exists with respect to the measures being considered, the costs and the time frames for compliance, and our ability to pass compliance costson to our customers. For additional information see Item 1A. Risk Factors.Our environmental expenditures, including non-regulatory expenditures, for each of the last three years were:(In millions) 2014 2013 2012Capital$102 $50 $115Compliance:(a) Operating and maintenance397 321 318Remediation(b)36 22 24Total$535 $393 $457(a) Based on the American Petroleum Institute’s definition of environmental expenditures.(b) These amounts include spending charged against remediation reserves, where permissible, but exclude non-cash provisions recorded for environmental remediation.We accrue for environmental remediation activities when the responsibility to remediate is probable and the amount of associated costs can be reasonablyestimated. As environmental remediation matters proceed toward ultimate resolution or as additional remediation obligations arise, charges in excess of thosepreviously accrued may be required.63Table of ContentsNew or expanded environmental requirements, which could increase our environmental costs, may arise in the future. We believe we comply with all legalrequirements regarding the environment, but since not all of them are fixed or presently determinable (even under existing legislation) and may be affectedby future legislation or regulations, it is not possible to predict all of the ultimate costs of compliance, including remediation costs that may be incurred andpenalties that may be imposed.Our environmental capital expenditures accounted for five percent, four percent and eight percent of capital expenditures excluding the acquisitions of theGalveston Bay Refinery and Related Assets and Hess’ Retail Operations and Related Assets in 2014, 2013 and 2012, respectively. Our environmental capitalexpenditures are expected to approximate $250 million, or ten percent, of total capital expenditures in 2015. Predictions beyond 2015 can only be broad-based estimates, which have varied, and will continue to vary, due to the ongoing evolution of specific regulatory requirements, the possible imposition ofmore stringent requirements and the availability of new technologies, among other matters. Based on currently identified projects, we anticipate thatenvironmental capital expenditures will be approximately $410 million in 2016; however, actual expenditures may vary as the number and scope ofenvironmental projects are revised as a result of improved technology or changes in regulatory requirements and could increase if additional projects areidentified or additional requirements are imposed.For more information on environmental regulations that impact us, or could impact us, see Item 1. Business – Environmental Matters, Item 1A. Risk Factorsand Item 3. Legal Proceedings.Critical Accounting EstimatesThe preparation of financial statements in accordance with accounting principles generally accepted in the United States (“US GAAP”) requires us to makeestimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of theconsolidated financial statements and the reported amounts of revenues and expenses during the respective reporting periods. Accounting estimates areconsidered to be critical if (1) the nature of the estimates and assumptions is material due to the levels of subjectivity and judgment necessary to account forhighly uncertain matters or the susceptibility of such matters to change; and (2) the impact of the estimates and assumptions on financial condition oroperating performance is material. Actual results could differ from the estimates and assumptions used.Fair Value EstimatesFair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date. There are three approaches for measuring the fair value of assets and liabilities: the market approach, the income approach and the costapproach, each of which includes multiple valuation techniques. The market approach uses prices and other relevant information generated by markettransactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to measure fair value by convertingfuture amounts, such as cash flows or earnings, into a single present value amount using current market expectations about those future amounts. The costapproach is based on the amount that would currently be required to replace the service capacity of an asset. This is often referred to as current replacementcost. The cost approach assumes that the fair value would not exceed what it would cost a market participant to acquire or construct a substitute asset ofcomparable utility, adjusted for obsolescence.The fair value accounting standards do not prescribe which valuation technique should be used when measuring fair value and does not prioritize among thetechniques. These standards establish a fair value hierarchy that prioritizes the inputs used in applying the various valuation techniques. Inputs broadly referto the assumptions that market participants use to make pricing decisions, including assumptions about risk. Level 1 inputs are given the highest priority inthe fair value hierarchy while Level 3 inputs are given the lowest priority. The three levels of the fair value hierarchy are as follows:•Level 1 – Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the measurement date.Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information onan ongoing basis.•Level 2 – Observable market-based inputs or unobservable inputs that are corroborated by market data. These are inputs other than quoted prices inactive markets included in Level 1, which are either directly or indirectly observable as of the measurement date.•Level 3 – Unobservable inputs that are not corroborated by market data and may be used with internally developed methodologies that result inmanagement’s best estimate of fair value.Valuation techniques that maximize the use of observable inputs are favored. Assets and liabilities are classified in their entirety based on the lowest prioritylevel of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requiresjudgment and may affect the placement of assets and liabilities within the levels of the fair value hierarchy. We use a market or income approach for recurringfair value measurements and endeavor to use the best information available. See Item 8. Financial Statements and Supplementary Data – Note 18 fordisclosures regarding our fair value measurements.64Table of ContentsSignificant uses of fair value measurements include:•assessment of impairment of long-lived assets;•assessment of impairment of goodwill;•assessment of impairment of equity method investments;•recorded values for acquisitions; and•recorded values of derivative instruments.Impairment Assessments of Long-Lived Assets, Goodwill and Equity Method InvestmentsFair value calculated for the purpose of testing our long-lived assets, goodwill and equity method investments for impairment is estimated using the expectedpresent value of future cash flows method and comparative market prices when appropriate. Significant judgment is involved in performing these fair valueestimates since the results are based on forecasted assumptions. Significant assumptions include:•Future margins on products produced and sold. Our estimates of future product margins are based on our analysis of various supply and demandfactors, which include, among other things, industry-wide capacity, our planned utilization rate, end-user demand, capital expenditures andeconomic conditions. Such estimates are consistent with those used in our planning and capital investment reviews.•Future volumes. Our estimates of future refinery and pipeline throughput volumes are based on internal forecasts prepared by our Refining &Marketing and Pipeline Transportation segments operations personnel.•Discount rate commensurate with the risks involved. We apply a discount rate to our cash flows based on a variety of factors, including market andeconomic conditions, operational risk, regulatory risk and political risk. This discount rate is also compared to recent observable markettransactions, if possible. A higher discount rate decreases the net present value of cash flows.•Future capital requirements. These are based on authorized spending and internal forecasts.We base our fair value estimates on projected financial information which we believe to be reasonable. However, actual results may differ from theseprojections.The need to test for impairment can be based on several indicators, including a significant reduction in prices of or demand for products produced, a pooroutlook for profitability, a significant reduction in pipeline throughput volumes, significant reduction in refining margins, other changes to contracts orchanges in the regulatory environment in which the asset or equity method investment is located.Long-lived assets used in operations are assessed for impairment whenever changes in facts and circumstances indicate that the carrying value of the assetsmay not be recoverable. For purposes of impairment evaluation, long-lived assets must be grouped at the lowest level for which independent cash flows canbe identified, which generally is the refinery and associated distribution system level for Refining & Marketing segment assets, site level for Speedwaysegment convenience stores or the pipeline system level for Pipeline Transportation segment assets. If the sum of the undiscounted estimated pretax cashflows is less than the carrying value of an asset group, fair value is calculated, and the carrying value is written down if greater than the calculated fair value.Unlike long-lived assets, goodwill must be tested for impairment at least annually, or between annual tests if an event occurs or circumstances change thatwould more likely than not reduce the fair value of a reporting unit below its carrying amount. Goodwill is tested for impairment at the reporting unit level.At December 31, 2014, we had a total of $1.57 billion of goodwill recorded on our consolidated balance sheet. The fair value of our reporting units exceededbook value for each of our reporting units in 2014.Equity method investments are assessed for impairment whenever factors indicate an other than temporary loss in value. Factors providing evidence of such aloss include the fair value of an investment that is less than its carrying value, absence of an ability to recover the carrying value or the investee’s inability togenerate income sufficient to justify our carrying value. At December 31, 2014, we had $865 million of investments in equity method investments recordedon our consolidated balance sheet.An estimate of the sensitivity to net income resulting from impairment calculations is not practicable, given the numerous assumptions (e.g., pricing, volumesand discount rates) that can materially affect our estimates. That is, unfavorable adjustments to some of the above listed assumptions may be offset byfavorable adjustments in other assumptions.65Table of ContentsCentennial experienced a significant reduction in shipment volumes in the second half of 2011 that has continued through 2014. At December 31, 2014,Centennial was not shipping product. As a result, we continued to evaluate the carrying value of our equity investment in Centennial. We concluded that noimpairment was required given our assessment of its fair value based on market participant assumptions for various potential uses and future cash flows ofCentennial’s assets. If market conditions were to change and the owners of Centennial are unable to find an alternative use for the assets, there could be afuture impairment of our Centennial interest. As of December 31, 2014, our equity investment in Centennial was $36 million and we had a $38 millionguarantee associated with 50 percent of Centennial’s outstanding debt. See Item 8. Financial Statements and Supplementary Data – Note 26 for additionalinformation on the debt guarantee.The above discussion contains forward-looking statements with respect to the carrying value of our Centennial equity investment. Factors that could affectthe carrying value of our Centennial equity investment include, but are not limited to, a change in business conditions, a further decline or improvement inthe long-term outlook of the potential uses of Centennial’s assets and the pursuit of different strategic alternatives for such assets. These factors, amongothers, could cause actual results to differ materially from those set forth in the forward-looking statements.AcquisitionsIn accounting for business combinations, acquired assets and liabilities and contingent consideration are recorded based on estimated fair values as of thedate of acquisition. The excess or shortfall of the purchase price when compared to the fair value of the net tangible and identifiable intangible assetsacquired, if any, is recorded as goodwill or a bargain purchase gain, respectively. A significant amount of judgment is involved in estimating the individualfair values of property, plant and equipment, intangible assets, contingent consideration and other assets and liabilities. We use all available information tomake these fair value determinations and, for certain acquisitions, engage third-party consultants for assistance.The fair value of assets and liabilities, including contingent consideration, as of the acquisition date are often estimated using a combination of approaches,including the income approach, which requires us to project related future cash inflows and outflows and apply an appropriate discount rate; the costapproach, which requires estimates of replacement costs and depreciation and obsolescence estimates; and the market approach which uses market data andadjusts for entity-specific differences. The estimates used in determining fair values are based on assumptions believed to be reasonable but which areinherently uncertain. Accordingly, actual results may differ from the projected results used to determine fair value.The fair value of the contingent consideration we expect to pay to BP is re-measured each quarter using an income approach, with changes in fair valuerecorded in cost of revenues. The amount of cash to be paid under the arrangement is based on both a market-based crack spread and refinery throughputvolumes for the months during which the contract applies, as well as established thresholds that cap the annual and total payment. We used internal andexternal forecasts for the crack spread and internal forecasts for refinery throughput volumes and applied an appropriate risk-adjusted discount rate to therange of cash flows indicated by various scenarios to determine the fair value of the arrangement. See Item 8. Financial Statements and Supplementary Data –Note 5 for additional information on our acquisitions. See Item 8. Financial Statements and Supplementary Data – Note 18 for additional information on fairvalue measurements.DerivativesWe record all derivative instruments at fair value. All of our commodity derivatives are cleared through exchanges which provide active trading informationfor identical derivatives and do not require any assumptions in arriving at fair value. Fair value estimation for all our derivative instruments is discussed inItem 8. Financial Statements and Supplementary Data – Note 18. Additional information about derivatives and their valuation may be found in Item 7A.Quantitative and Qualitative Disclosures about Market Risk.Pension and Other Postretirement Benefit ObligationsAccounting for pension and other postretirement benefit obligations involves numerous assumptions, the most significant of which relate to the following:•the discount rate for measuring the present value of future plan obligations;•the expected long-term return on plan assets;•the rate of future increases in compensation levels;•health care cost projections; and•the mortality table used in determining future plan obligations.66Table of ContentsWe utilize the work of third-party actuaries to assist in the measurement of these obligations. We have selected different discount rates for our funded pensionplans and our unfunded retiree health care plans due to the different projected benefit payment patterns. The selected rates are compared to various similarbond indexes for reasonableness. In determining the assumed discount rates, we use our third-party actuary’s discount rate model. This model calculates anequivalent single discount rate for the projected benefit plan cash flows using a yield curve derived from Aa bond yields. The yield curve represents a seriesof annualized individual spot discount rates from 0.5 to 99 years. The bonds used have an average rating of Aa or higher by a recognized rating agency andgenerally only non-callable bonds are included. Outlier bonds that have a yield to maturity that deviate significantly from the average yield within eachmaturity grouping are not included. Each issue is required to have at least $250 million par value outstanding.Of the assumptions used to measure the year-end obligations and estimated annual net periodic benefit cost, the discount rate has the most significant effecton the periodic benefit cost reported for the plans. Decreasing the discount rates of 3.65 percent for our pension plans and 4.15 percent for our otherpostretirement benefit plans by 0.25 percent would increase pension obligations and other postretirement benefit plan obligations by $42 million and $32million, respectively, and would increase defined benefit pension expense and other postretirement benefit plan expense by $2 million and $4 million,respectively.The long-term asset rate of return assumption considers the asset mix of the plans (currently targeted at approximately 51 percent equity securities and 49percent fixed income securities for the primary funded pension plan), past performance and other factors. Certain components of the asset mix are modeledwith various assumptions regarding inflation and returns. In addition, our long-term asset rate of return assumption is compared to those of other companiesand to historical returns for reasonableness. After evaluating activity in the capital markets, along with the current and projected plan investments, wereduced the asset rate of return for our primary plan from 7.00 percent to 6.75 percent effective for 2015. We used the 7.00 percent long-term rate of return todetermine our 2014 defined benefit pension expense. Decreasing the 6.75 percent asset rate of return assumption by 0.25 percent would increase our definedbenefit pension expense by $4 million.Compensation change assumptions are based on historical experience, anticipated future management actions and demographics of the benefit plans.Health care cost trend assumptions are developed based on historical cost data, the near-term outlook and an assessment of likely long-term trends.We utilized the 2014 mortality tables from the U.S. Society of Actuaries.Item 8. Financial Statements and Supplementary Data – Note 23 includes detailed information about the assumptions used to calculate the components of ourannual defined benefit pension and other postretirement plan expense, as well as the obligations and accumulated other comprehensive loss reported on theyear-end balance sheets.Contingent LiabilitiesWe accrue contingent liabilities for legal actions, claims, litigation, environmental remediation, tax deficiencies related to operating taxes and third-partyindemnities for specified tax matters when such contingencies are both probable and estimable. We regularly assess these estimates in consultation with legalcounsel to consider resolved and new matters, material developments in court proceedings or settlement discussions, new information obtained as a result ofongoing discovery and past experience in defending and settling similar matters. Actual costs can differ from estimates for many reasons. For instance,settlement costs for claims and litigation can vary from estimates based on differing interpretations of laws, opinions on degree of responsibility andassessments of the amount of damages. Similarly, liabilities for environmental remediation may vary from estimates because of changes in laws, regulationsand their interpretation, additional information on the extent and nature of site contamination and improvements in technology.We generally record losses related to these types of contingencies as cost of revenues or selling, general and administrative expenses in the consolidatedstatements of income, except for tax deficiencies unrelated to income taxes, which are recorded as other taxes. For additional information on contingentliabilities, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Environmental Matters and ComplianceCosts.An estimate of the sensitivity to net income if other assumptions had been used in recording these liabilities is not practical because of the number ofcontingencies that must be assessed, the number of underlying assumptions and the wide range of reasonably possible outcomes, in terms of both theprobability of loss and the estimates of such loss.67Table of ContentsAccounting Standards Not Yet AdoptedIn February 2015, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update making targeted changes to the currentconsolidation guidance. The new standard changes the way certain decisions are made related to substantive rights, related parties, and decision making feeswhen applying the VIE consolidation model and eliminates certain guidance for limited partnerships and similar entities under the voting interestconsolidation model. The update is effective for annual periods beginning after December 15, 2015. Early adoption is permitted. At this point, we have notdetermined the impact of the new standards update on our consolidated financial statements and related disclosures. In August 2014, the FASB issued an accounting standards update requiring management to assess an entity’s ability to continue as a going concern and toprovide related footnote disclosures in certain circumstances. Management will be required to assess if there is substantial doubt about an entity’s ability tocontinue as a going concern within one year after the date that the financial statements are issued. Disclosures will be required if conditions give rise tosubstantial doubt and the type of disclosure will be determined based on whether management’s plans will be able to alleviate the substantial doubt. Theaccounting standards update will be effective for the first annual period ending after December 15, 2016, and for annual periods and interim periods thereafterwith early application permitted.In June 2014, the FASB issued an accounting standards update for the elimination of the concept of development stage entity (“DSE”) from U.S. GAAP andremoves the related incremental reporting. The standards update eliminates the additional financial statement requirements specific to a DSE. In addition, itamends the consolidation model by eliminating the special provisions in the variable interest entity rules for assessing the sufficiency of the equity of a DSE.The portion of the accounting standards update related to the amendment to the consolidation guidance will be effective on a retrospective basis for annualreporting periods beginning after December 15, 2015, and interim periods within those years, with early adoption permitted. The portion of the accountingstandards update related to the removal of the DSE reporting requirements will be effective on a retrospective basis for annual reporting periods beginningafter December 15, 2014, and interim periods within those years, with early adoption permitted. Adoption of this standards update in the first quarters of 2015and 2016 is not expected to have an impact on our consolidated results of operations, financial position or cash flows.In May 2014, the FASB issued an accounting standards update for revenue recognition that is aligned with the International Accounting Standards Board’srevenue recognition standard issued on the same day. The guidance in the update states that revenue is recognized when a customer obtains control of a goodor service. Recognition of the revenue will involve a multiple step approach including identifying the contract, identifying the separate performanceobligations, determining the transaction price, allocating the price to the performance obligations and then recognizing the revenue as the obligations aresatisfied. Additional disclosures will be required to provide adequate information to understand the nature, amount, timing and uncertainty of reportedrevenues and revenues expected to be recognized. The accounting standards update will be effective on a retrospective or modified retrospective basis forannual reporting periods beginning after December 15, 2016, and interim periods within those years, with no early adoption permitted. At this point, we havenot determined the impact of the new standard on our consolidated financial statements.In April 2014, the FASB issued an accounting standards update that redefines the criteria for determining discontinued operations and introduces newdisclosures related to these disposals. The updated definition of a discontinued operation is the disposal of a component (or components) of an entity or theclassification of a component (or components) of an entity as held for sale that represents a strategic shift for an entity and has (or will have) a major impacton an entity’s operations and financial results. The standard requires disclosure of additional financial information for discontinued operations andindividually material components not qualifying for discontinued operation presentation, as well as information regarding an entity’s continuinginvolvement with the discontinued operation. The accounting standards update is effective prospectively for annual periods beginning on or after December15, 2014, and interim periods within those years. Early adoption is permitted. Adoption of this standards update in the first quarter of 2015 is not expected tohave an impact on our consolidated results of operations, financial position or cash flows.68Table of ContentsItem 7A. Quantitative and Qualitative Disclosures about Market RiskGeneralWe are exposed to market risks related to the volatility of crude oil and refined product prices. We employ various strategies, including the use of commodityderivative instruments, to hedge the risks related to these price fluctuations. We are also exposed to market risks related to changes in interest rates andforeign currency exchange rates. As of December 31, 2014, we did not have any financial derivative instruments to hedge the risks related to interest ratefluctuations; however, we have used them in the past, and we continually monitor the market and our exposure and may enter into these agreements again inthe future. We are at risk for changes in fair value of all of our derivative instruments; however, such risk should be mitigated by price or rate changes relatedto the underlying commodity or financial transaction.We believe that our use of derivative instruments, along with our risk assessment procedures and internal controls, does not expose us to material adverseconsequences. While the use of derivative instruments could materially affect our results of operations in particular quarterly or annual periods, we believethat the use of these instruments will not have a material adverse effect on our financial position or liquidity.See Item 8. Financial Statements and Supplementary Data – Notes 18 and 19 for more information about the fair value measurement of our derivatives, as wellas the amounts recorded in our consolidated balance sheets and statements of income. We do not designate any of our commodity derivative instruments ashedges for accounting purposes.Commodity Price RiskOur strategy is to obtain competitive prices for our products and allow operating results to reflect market price movements dictated by supply and demand.We use a variety of commodity derivative instruments, including futures and options, as part of an overall program to hedge commodity price risk. We alsoauthorize the use of the market knowledge gained from these activities to do a limited amount of trading not directly related to our physical transactions.We use commodity derivative instruments on crude oil and refined product inventories to hedge price risk associated with inventories above or below last-in,first-out inventory targets. We also use derivative instruments related to the acquisition of foreign-sourced crude oil and ethanol blended with refinedpetroleum products to hedge price risk associated with market volatility between the time we purchase the product and when we use it in the refineryproduction process or it is blended. In addition, we may use commodity derivative instruments on fixed price contracts for the sale of refined products tohedge risk by converting the refined product sales to market-based prices. The majority of these derivatives are exchange-traded contracts for crude oil,refined products and ethanol.We closely monitor and hedge our exposure to market risk on a daily basis in accordance with policies approved by our board of directors. Our positions aremonitored daily by a risk control group to ensure compliance with our stated risk management policy.Open Derivative Positions and Sensitivity AnalysisThe table below sets forth information relating to our significant open commodity derivative contracts as of December 31, 2014. December 31, 2014 Position Total Barrels(In thousands) Weighted Average Price(Per barrel) BenchmarkCrude Oil(a) Exchange-tradedLong 15,678 $61.53 CME and ICE Crude(c)(d)Exchange-tradedShort (25,257) $65.39 CME and ICE Crude(c)(d) Refined Products(b) Exchange-tradedLong 2,948 $1.74 CME Heating Oil and RBOB(c)(e)Exchange-tradedShort (3,804) $1.71 CME Heating Oil and RBOB(c)(e)(a) 97 percent of these contracts expire in the first quarter of 2015.(b) 100 percent of these contracts expire in the first quarter of 2015.(c) Chicago Mercantile Exchange (“CME”).(d) Intercontinental Exchange (“ICE”).(e) Reformulated gasoline Blendstock for Oxygenate Blending (“RBOB”).69Table of ContentsSensitivity analysis of the incremental effects on income from operations (“IFO”) of hypothetical 10 percent and 25 percent increases and decreases incommodity prices for open commodity derivative instruments as of December 31, 2014 is provided in the following table. Change in IFO from aHypothetical PriceIncrease of Change in IFO from aHypothetical PriceDecrease of(In millions)10% 25% 10% 25%As of December 31, 2014 Crude$(58) $(145) $62 $157Refined products(2) (4) 2 4We remain at risk for possible changes in the market value of commodity derivative instruments; however, such risk should be mitigated by price changes inthe underlying physical commodity. Effects of these offsets are not reflected in the above sensitivity analysis.We evaluate our portfolio of commodity derivative instruments on an ongoing basis and add or revise strategies in anticipation of changes in marketconditions and in risk profiles. Changes to the portfolio after December 31, 2014 would cause future IFO effects to differ from those presented above.Interest Rate RiskWe are impacted by interest rate fluctuations related to our debt obligations. At December 31, 2014, our debt was primarily comprised of the $3.0 billionaggregate principal amount of fixed rate senior notes issued on February 1, 2011 and the $1.95 billion aggregate principal amount of fixed rate senior notesissued September 5, 2014. Additionally, we have $950 million of variable rate term debt.Sensitivity analysis of the effect of a hypothetical 100-basis-point change in interest rates on long-term debt as of December 31, 2014 is provided in thefollowing table. Fair value of cash and cash equivalents, receivables, accounts payable and accrued interest approximate carrying value and are relativelyinsensitive to changes in interest rates due to the short-term maturity of the instruments. Accordingly, these instruments are excluded from the table. (In millions) FairValue(b) Change inFair Value Change in Net Income for the TwelveMonths Ended December 31, 2014 Long-term debt(a) Fixed-rate $5,236 $563(c) n/a Variable-rate 1,338 n/a 4(d) (a) Excludes capital leases.(b) Fair value was based on market prices, where available, or current borrowing rates for financings with similar terms and maturities.(c) Assumes a 100-basis point decrease in the weighted average yield-to-maturity at December 31, 2014.(d) Assumes a 100-basis-point change in interest rates. The change in net income was based on the weighted average balance of debt outstanding for the year ended December 31,2014.At December 31, 2014, our portfolio of long-term debt was comprised of fixed-rate instruments and variable-rate borrowings under the Term Loan Agreementand the MPLX Credit Agreement. The fair value of our fixed-rate debt is relatively sensitive to interest rate fluctuations. Our sensitivity to interest ratedeclines and corresponding increases in the fair value of our debt portfolio unfavorably affects our results of operations and cash flows only when we elect torepurchase or otherwise retire fixed-rate debt at prices above carrying value. Interest rate fluctuations generally do not impact the fair value of borrowingsunder the Term Loan Agreement and the MPLX Credit Agreement, but will affect our results of operations and cash flows.Foreign Currency Exchange Rate RiskWe are impacted by foreign exchange rate fluctuations related to some of our purchases of crude oil denominated in Canadian dollars. We did not utilizederivatives to hedge our market risk exposure to these foreign exchange rate fluctuations in 2014.70Table of ContentsCounterparty RiskWe are also exposed to financial risk in the event of nonperformance by counterparties or futures commission merchants. We regularly review thecreditworthiness of counterparties and futures commission merchants and enter into master netting agreements when appropriate.Forward-Looking StatementsThese quantitative and qualitative disclosures about market risk include forward-looking statements with respect to management’s opinion about risksassociated with the use of derivative instruments. These statements are based on certain assumptions with respect to market prices and industry supply of anddemand for crude oil, other refinery feedstocks, refined products and ethanol. If these assumptions prove to be inaccurate, future outcomes with respect to ouruse of derivative instruments may differ materially from those discussed in the forward-looking statements.71Table of ContentsItem 8. Financial Statements and Supplementary DataIndex Page Management’s Responsibilities for Financial Statements73 Management’s Report on Internal Control Over Financial Reporting73 Report of Independent Registered Public Accounting Firm74 Audited Consolidated Financial Statements: Consolidated Statements of Income75 Consolidated Statements of Comprehensive Income76 Consolidated Balance Sheets77 Consolidated Statements of Cash Flows78 Consolidated Statements of Equity79 Notes to Consolidated Financial Statements80 Selected Quarterly Financial Data (Unaudited)122 Supplementary Statistics (Unaudited)12372Table of ContentsManagement’s Responsibilities for Financial StatementsThe accompanying consolidated financial statements of Marathon Petroleum Corporation and its subsidiaries (“MPC”) are the responsibility of managementand have been prepared in conformity with accounting principles generally accepted in the United States of America. They necessarily include some amountsthat are based on best judgments and estimates. The financial information displayed in other sections of this Annual Report on Form 10-K is consistent withthese consolidated financial statements.MPC seeks to assure the objectivity and integrity of its financial records by careful selection of its managers, by organizational arrangements that provide anappropriate division of responsibility and by communications programs aimed at assuring that its policies and methods are understood throughout theorganization.The board of directors pursues its oversight role in the area of financial reporting and internal control over financial reporting through its Audit Committee.This committee, composed solely of independent directors, regularly meets (jointly and separately) with the independent registered public accounting firm,management and internal auditors to monitor the proper discharge by each of their responsibilities relative to internal accounting controls and theconsolidated financial statements. /s/ Gary R. Heminger /s/ Donald C. Templin /s/ John J. QuaidGary R. HemingerPresident andChief Executive Officer Donald C. TemplinSenior Vice Presidentand Chief FinancialOfficer John J. QuaidVice President andControllerManagement’s Report on Internal Control over Financial ReportingMPC’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934). An evaluation of the design and effectiveness of our internal control over financial reporting, based on theframework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, wasconducted under the supervision and with the participation of management, including our chief executive officer and chief financial officer. Based on theresults of this evaluation, MPC’s management concluded that its internal control over financial reporting was effective as of December 31, 2014.Management has excluded Hess’ Retail Operations and Related Assets (as defined in footnote 5) from the Company’s assessment of internal control overfinancial reporting as of December 31, 2014 as it was acquired by the Company in a business combination on September 30, 2014. Hess’ Retail Operationsand Related Assets represents approximately 8% of consolidated total assets as of December 31, 2014 and 2% of total revenues and other income for the yearended December 31, 2014. We plan to fully integrate the acquired businesses into our internal control over financial reporting in 2015.The effectiveness of MPC’s internal control over financial reporting as of December 31, 2014 has been audited by PricewaterhouseCoopers LLP, anindependent registered public accounting firm, as stated in their report which is included herein./s/ Gary R. Heminger /s/ Donald C. Templin Gary R. HemingerPresident andChief Executive Officer Donald C. TemplinSenior Vice Presidentand Chief FinancialOfficer 73Table of ContentsReport of Independent Registered Public Accounting FirmTo the Stockholders of Marathon Petroleum Corporation:In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, comprehensive income, equity, and cashflows present fairly, in all material respects, the financial position of Marathon Petroleum Corporation and its subsidiaries at December 31, 2014 and 2013,and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2014 in conformity with accountingprinciples generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internalcontrol over financial reporting as of December 31, 2014, based on criteria established in Internal Control – Integrated Framework (2013) issued by theCommittee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements, formaintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, includedin the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financialstatements and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with thestandards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtainreasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reportingwas maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overallfinancial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financialreporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on theassessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits providea reasonable basis for our opinions.A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal controlover financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate.As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Hess’ Retail Operations and Related Assets(as defined in footnote 5) from the Company’s assessment of internal control over financial reporting as of December 31, 2014 as it was acquired by theCompany in a business combination on September 30, 2014. We have also excluded Hess’ Retail Operations and Related Assets from our audit of internalcontrol over financial reporting. Hess’ Retail Operations and Related Assets represents approximately 8% of consolidated total assets as of December 31,2014 and 2% of total revenue and other income for the year ended December 31, 2014./s/PricewaterhouseCoopers LLPToledo, OhioFebruary 27, 201574Table of ContentsMarathon Petroleum CorporationConsolidated Statements of Income (In millions, except per share data)2014 2013 2012Revenues and other income: Sales and other operating revenues (including consumer excise taxes)$97,817 $100,160 $82,243Income from equity method investments153 36 26Net gain on disposal of assets21 6 177Other income111 52 46Total revenues and other income98,102 100,254 82,492Costs and expenses: Cost of revenues (excludes items below)83,770 87,401 68,668Purchases from related parties505 357 280Consumer excise taxes6,685 6,263 5,709Depreciation and amortization1,326 1,220 995Selling, general and administrative expenses1,375 1,248 1,223Other taxes390 340 270Total costs and expenses94,051 96,829 77,145Income from operations4,051 3,425 5,347Net interest and other financial income (costs)(216) (179) (109)Income before income taxes3,835 3,246 5,238Provision for income taxes1,280 1,113 1,845Net income2,555 2,133 3,393Less net income attributable to noncontrolling interests31 21 4Net income attributable to MPC$2,524 $2,112 $3,389Per Share Data (See Note 9) Basic: Net income attributable to MPC per share$8.84 $6.69 $9.95Weighted average shares outstanding285 315 340Diluted: Net income attributable to MPC per share$8.78 $6.64 $9.89Weighted average shares outstanding287 317 342Dividends paid$1.84 $1.54 $1.20The accompanying notes are an integral part of these consolidated financial statements.75Table of ContentsMarathon Petroleum CorporationConsolidated Statements of Comprehensive Income (In millions)2014 2013 2012Net income$2,555 $2,133 $3,393Other comprehensive income (loss): Defined benefit postretirement and post-employment plans: Actuarial changes, net of tax of ($47), $174 and $47(78) 294 78Prior service costs, net of tax of ($19), ($19) and $203(31) (34) 337Other comprehensive income (loss)(109) 260 415Comprehensive income2,446 2,393 3,808Less comprehensive income attributable to noncontrolling interests31 21 4Comprehensive income attributable to MPC$2,415 $2,372 $3,804The accompanying notes are an integral part of these consolidated financial statements.76Table of ContentsMarathon Petroleum CorporationConsolidated Balance Sheets December 31,(In millions, except share data)2014 2013Assets Current assets: Cash and cash equivalents$1,494 $2,292Receivables, less allowance for doubtful accounts of $13 and $94,058 5,559Inventories5,642 4,689Other current assets145 197Total current assets11,339 12,737Equity method investments865 463Property, plant and equipment, net16,261 13,921Goodwill1,566 938Other noncurrent assets429 326Total assets$30,460 $28,385Liabilities Current liabilities: Accounts payable$6,661 $8,234Payroll and benefits payable427 406Consumer excise taxes payable463 373Accrued taxes647 513Long-term debt due within one year27 23Other current liabilities354 275Total current liabilities8,579 9,824Long-term debt6,610 3,373Deferred income taxes2,014 2,304Defined benefit postretirement plan obligations1,099 771Deferred credits and other liabilities768 781Total liabilities19,070 17,053Commitments and contingencies (see Note 26) Equity MPC stockholders’ equity: Preferred stock, no shares issued and outstanding (par value $0.01 per share, 30 million shares authorized)— —Common stock: Issued – 363 million and 362 million shares (par value $0.01 per share, 1 billion shares authorized)4 4Held in treasury, at cost – 89 million and 65 million shares(6,299) (4,155)Additional paid-in capital9,844 9,768Retained earnings7,515 5,507Accumulated other comprehensive loss(313) (204)Total MPC stockholders’ equity10,751 10,920Noncontrolling interests639 412Total equity11,390 11,332Total liabilities and equity$30,460 $28,385The accompanying notes are an integral part of these consolidated financial statements.77Table of ContentsMarathon Petroleum CorporationConsolidated Statements of Cash Flows (In millions)2014 2013 2012Increase (decrease) in cash and cash equivalents Operating activities: Net income$2,555 $2,133 $3,393Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization1,326 1,220 995Pension and other postretirement benefits, net151 (124) 153Deferred income taxes(242) 23 492Net gain on disposal of assets(21) (6) (177)Equity method investments, net17 (18) 11Changes in the fair value of derivative instruments(3) (21) 59Changes in: Current receivables1,642 (940) 851Inventories(786) (305) (115)Current accounts payable and accrued liabilities(1,547) 1,464 (1,223)All other, net18 (21) 53Net cash provided by operating activities3,110 3,405 4,492Investing activities: Additions to property, plant and equipment(1,480) (1,206) (1,369)Acquisitions, net of cash acquired(2,821) (1,515) (190)Disposal of assets27 16 53Investments – acquisitions, loans and contributions(413) (151) (57) – redemptions, repayments and return of capital9 77 108All other, net135 23 3Net cash used in investing activities(4,543) (2,756) (1,452)Financing activities: Long-term debt – borrowings3,793 — — – repayments(548) (21) (17)Debt issuance costs(22) (4) (6)Issuance of common stock26 48 108Common stock repurchased(2,131) (2,793) (1,350)Dividends paid(524) (484) (407)Net proceeds from issuance of MPLX LP common units221 — 407Distributions to noncontrolling interests(27) (21) —Tax settlement with Marathon Oil Corporation— 39 —Contingent consideration payment(172) — —All other, net19 19 6Net cash provided by (used in) financing activities635 (3,217) (1,259)Net increase (decrease) in cash and cash equivalents(798) (2,568) 1,781Cash and cash equivalents at beginning of period2,292 4,860 3,079Cash and cash equivalents at end of period$1,494 $2,292 $4,860The accompanying notes are an integral part of these consolidated financial statements.78Table of ContentsMarathon Petroleum CorporationConsolidated Statements of Equity MPC Stockholders’ Equity (In millions)CommonStock TreasuryStock AdditionalPaid-inCapital RetainedEarnings AccumulatedOtherComprehensiveIncome (Loss) NoncontrollingInterests TotalEquityBalance as of December 31, 2011$4 $— $9,482 $898 $(879) $— $9,505Net income— — — 3,389 — 4 3,393Dividends declared— — — (407) — — (407)Other comprehensive income— — — — 415 — 415Shares repurchased— (1,250) (100) — — — (1,350)Shares issued (returned) – stock-basedcompensation— (3) 108 — — — 105Stock-based compensation— — 46 — — — 46Issuance of MPLX LP common units— — — — — 407 407Other— — (9) — — — (9)Balance as of December 31, 2012$4 $(1,253) $9,527 $3,880 $(464) $411 $12,105Net income— — — 2,112 — 21 2,133Dividends declared— — — (485) — — (485)Distributions to noncontrolling interests— — — — — (21) (21)Other comprehensive income— — — — 260 — 260Shares repurchased— (2,893) 100 — — — (2,793)Shares issued (returned) – stock-basedcompensation— (9) 47 — — — 38Stock-based compensation— — 55 — — 1 56Tax settlement with Marathon Oil Corporation— — 39 — — — 39Balance as of December 31, 2013$4 $(4,155) $9,768 $5,507 $(204) $412 $11,332Net income— — — 2,524 — 31 2,555Dividends declared— — — (525) — — (525)Distributions to noncontrolling interests— — — — — (27) (27)Other comprehensive loss— — — — (109) — (109)Shares repurchased— (2,131) — — — — (2,131)Shares issued (returned) – stock-basedcompensation— (13) 26 — — — 13Stock-based compensation— — 50 — — 2 52Issuance of MPLX LP common units— — — — — 221 221Other— — — 9 — — 9Balance as of December 31, 2014$4 $(6,299) $9,844 $7,515 $(313) $639 $11,390(Shares in millions)CommonStock TreasuryStockBalance as of December 31, 2011357 —Shares repurchased— (28)Shares issued – stock-based compensation4 —Balance as of December 31, 2012361 (28)Shares repurchased— (37)Shares issued – stock-based compensation1 —Balance as of December 31, 2013362 (65)Shares repurchased— (24)Shares issued – stock-based compensation1 —Balance as of December 31, 2014363 (89)The accompanying notes are an integral part of these consolidated financial statements.79Table of ContentsNotes to Consolidated Financial Statements1.Description of the Business and Basis of PresentationDescription of the Business – As used in this report, the terms “MPC,” “we,” “us,” “the Company” or “our” may refer to Marathon Petroleum Corporation,one or more of its consolidated subsidiaries or all of them taken as a whole.Our business consists of refining and marketing, retail and pipeline transportation operations conducted primarily in the Midwest, Gulf Coast, East Coast andSoutheast regions of the United States, through subsidiaries, including Marathon Petroleum Company LP, Speedway LLC and its subsidiaries (“Speedway”)and MPLX LP and its subsidiaries (“MPLX”).See Note 11 for additional information about our operations.Spinoff – On May 25, 2011, the Marathon Oil board of directors approved the spinoff of its Refining, Marketing & Transportation Business (“RM&TBusiness”) into an independent, publicly traded company, MPC, through the distribution of MPC common stock to the stockholders of Marathon Oilcommon stock (the “Spinoff”). MPC became an independent, publicly traded company on July 1, 2011.Basis of Presentation – Our results of operations and cash flows consist of consolidated MPC activities. All significant intercompany transactions andaccounts have been eliminated.During the first quarter of 2014, we recorded an out-of-period adjustment for additional expenses related to the prior year’s bonus programs of $29 million,included in total costs and expenses on the consolidated statements of income. The impact to our consolidated results of operations for the year endedDecember 31, 2014 and for the year ended December 31, 2013 was immaterial.2.Summary of Principal Accounting PoliciesPrinciples applied in consolidation – These consolidated financial statements include the accounts of our majority-owned, controlled subsidiaries. Weconsolidate MPLX, in which we own a 71.5 percent controlling financial interest, and we record a noncontrolling interest for the 28.5 percent interest ownedby the public.Investments in entities over which we have significant influence, but not control, are accounted for using the equity method of accounting. This includesentities in which we hold majority ownership but the minority shareholders have substantive participating rights in the investee. Income from equity methodinvestments represents our proportionate share of net income generated by the equity method investees.Equity method investments are generally carried at our share of net assets plus loans and advances. Such investments are assessed for impairment wheneverchanges in the facts and circumstances indicate a loss in value has occurred, if the loss is deemed to be other than temporary. When the loss is deemed to beother than temporary, the carrying value of the equity method investment is written down to fair value, and the amount of the write-down is included in netincome. Differences in the basis of the investments and the separate net asset values of the investees, if any, are amortized into net income over the remaininguseful lives of the underlying assets and liabilities, except for the excess related to goodwill.Use of estimates – The preparation of financial statements in accordance with generally accepted accounting principles requires management to makeestimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of theconsolidated financial statements and the reported amounts of revenues and expenses during the respective reporting periods.Revenue recognition – Revenues are recognized when products are shipped or services are provided to customers, title is transferred, the sales price is fixed ordeterminable and collectability is reasonably assured. Costs associated with revenues are recorded in cost of revenues. Shipping and other transportationcosts billed to our customers are presented on a gross basis in revenues and cost of revenues.Rebates from vendors are recognized as a reduction of cost of revenues when the initiating transaction occurs. Incentives that are derived from contractualprovisions are accrued based on past experience and recognized in cost of revenues. Rebates to customers are reflected as a reduction of revenue and areaccrued for in accounts payable on the consolidated balance sheets.80Table of ContentsCrude oil and refined product exchanges and matching buy/sell transactions – We enter into exchange contracts and matching buy/sell arrangementswhereby we agree to deliver a particular quantity and quality of crude oil or refined products at a specified location and date to a particular counterparty andto receive from the same counterparty the same commodity at a specified location on the same or another specified date. The exchange receipts and deliveriesare nonmonetary transactions, with the exception of associated grade or location differentials that are settled in cash. The matching buy/sell purchase andsale transactions are settled in cash. Both exchange and matching buy/sell transactions are accounted for as exchanges of inventory and no revenues arerecorded. The exchange transactions are recognized at the carrying amount of the inventory transferred.Consumer excise taxes – We are required by various governmental authorities, including countries, states and municipalities, to collect and remit taxes oncertain consumer products. Such taxes are presented on a gross basis in revenues and costs and expenses in the consolidated statements of income.Cash and cash equivalents – Cash and cash equivalents include cash on hand and on deposit and investments in highly liquid debt instruments withmaturities of three months or less.Restricted cash – Restricted cash consists of cash advances to be used for the operation and maintenance of an operated pipeline system. At December 31,2014 and 2013, the amount of restricted cash included in other current assets on the consolidated balance sheets were $4 million and $7 million,respectively.Accounts receivable and allowance for doubtful accounts – Our receivables primarily consist of customer accounts receivable. The allowance for doubtfulaccounts is the best estimate of the amount of probable credit losses in customer accounts receivable and is based on historical write-off experience. Wereview the allowance quarterly and past-due balances over 180 days are reviewed individually for collectability. All other customer receivables are recordedat the invoiced amounts and generally do not bear interest. Account balances for these customer receivables are generally charged directly to bad debtexpense when it becomes probable the receivable will not be collected.Approximately 41 percent and 38 percent of our accounts receivable balances at December 31, 2014 and 2013, respectively, are related to sales of crude oilor refinery feedstocks to customers with whom we have master netting agreements. We have master netting agreements with more than 100 companiesengaged in the crude oil or refinery feedstock trading and supply business or the petroleum refining industry. A master netting agreement generally providesfor a once per month net cash settlement of the accounts receivable from and the accounts payable to a particular counterparty.Inventories – Inventories are carried at the lower of cost or market value. Cost of inventories is determined primarily under the last-in, first-out (“LIFO”)method. Costs for crude oil and refined product inventories are aggregated on a consolidated basis for purposes of assessing if the LIFO cost basis of theseinventories may have to be written down to market value.Derivative instruments – We use derivatives to economically hedge a portion of our exposure to commodity price risk and, historically, to interest raterisk. We also have limited authority to use selective derivative instruments that assume market risk. All derivative instruments are recorded at fairvalue. Commodity derivatives are reflected on the consolidated balance sheets on a net basis by futures commission merchant, as they are governed by masternetting agreements. Cash flows related to derivatives used to hedge commodity price risk and interest rate risk are classified in operating activities with theunderlying transactions.Fair value accounting hedges – We used interest rate swaps to hedge our exposure to interest rate risk associated with fixed interest rate debt in ourportfolio. Changes in the fair values of both the hedged item and the related derivative were recognized immediately in net income with an offsetting effectincluded in the basis of the hedged item. The net effect was to report in net income the extent to which the accounting hedge was not effective in achievingoffsetting changes in fair value. We terminated our interest rate swap agreements during 2012. There was a gain on the termination of the agreements, whichhas been accounted for as an adjustment to our long-term debt balance. The gain is being amortized over the remaining life of the associated debt, whichreduces our interest expense.Derivatives not designated as accounting hedges –Derivatives that are not designated as accounting hedges may include commodity derivatives used tohedge price risk on (1) inventories, (2) fixed price sales of refined products, (3) the acquisition of foreign-sourced crude oil and (4) the acquisition of ethanolfor blending with refined products. Changes in the fair value of derivatives not designated as accounting hedges are recognized immediately in net income.Concentrations of credit risk – All of our financial instruments, including derivatives, involve elements of credit and market risk. The most significantportion of our credit risk relates to nonperformance by counterparties. The counterparties to our financial instruments consist primarily of major financialinstitutions and companies within the energy industry. To manage counterparty risk associated with financial instruments, we select and monitorcounterparties based on an assessment of their financial strength and on credit ratings, if available. Additionally, we limit the level of exposure with anysingle counterparty.81Table of ContentsProperty, plant and equipment – Property, plant and equipment are recorded at cost and depreciated on a straight-line basis over the estimated useful lives ofthe assets, which range from four to 42 years. Such assets are reviewed for impairment whenever events or changes in circumstances indicate that the carryingamount of an asset may not be recoverable. If the sum of the expected undiscounted future cash flows from the use of the asset and its eventual disposition isless than the carrying amount of the asset, an impairment loss is recognized based on the fair value of the asset.When items of property, plant and equipment are sold or otherwise disposed of, any gains or losses are reported in net income. Gains on the disposal ofproperty, plant and equipment are recognized when earned, which is generally at the time of closing. If a loss on disposal is expected, such losses arerecognized when the assets are classified as held for sale.Interest expense is capitalized for qualifying assets under construction. Capitalized interest costs are included in property, plant and equipment and aredepreciated over the useful life of the related asset.Goodwill – Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in the acquisition of abusiness. Goodwill is not amortized, but rather is tested for impairment annually and when events or changes in circumstances indicate that the fair value of areporting unit with goodwill has been reduced below carrying value. The impairment test requires allocating goodwill and other assets and liabilities toreporting units. The fair value of each reporting unit is determined and compared to the book value of the reporting unit. If the fair value of the reporting unitis less than the book value, including goodwill, the implied fair value of goodwill is calculated. The excess, if any, of the book value over the implied fairvalue of goodwill is charged to net income.Major maintenance activities – Costs for planned turnaround, major maintenance and engineered project activities are expensed in the periodincurred. These types of costs include contractor repair services, materials and supplies, equipment rentals and our labor costs.Environmental costs – Environmental expenditures are capitalized if the costs mitigate or prevent future contamination or if the costs improveenvironmental safety or efficiency of the existing assets. We recognize remediation costs and penalties when the responsibility to remediate is probable andthe amount of associated costs can be reasonably estimated. The timing of remediation accruals coincides with completion of a feasibility study or thecommitment to a formal plan of action. Remediation liabilities are accrued based on estimates of known environmental exposure and are discounted whenthe estimated amounts are reasonably fixed and determinable. If recoveries of remediation costs from third parties are probable, a receivable is recorded and isdiscounted when the estimated amount is reasonably fixed and determinable.Asset retirement obligations – The fair value of asset retirement obligations is recognized in the period in which the obligations are incurred if a reasonableestimate of fair value can be made. Conditional asset retirement obligations for removal and disposal of fire-retardant material from certain refining facilitieshave been recognized. The fair values recorded for such obligations are based on the most probable current cost projections. The recorded asset retirementobligations are not material to the consolidated financial statements.Asset retirement obligations have not been recognized for some assets because the fair value cannot be reasonably estimated since the settlement dates of theobligations are indeterminate. Such obligations will be recognized in the period when sufficient information becomes available to estimate a range ofpotential settlement dates. The asset retirement obligations principally include the removal of underground storage tanks at our leased convenience stores ator near the time of closure and hazardous material disposal and removal or dismantlement requirements associated with the closure of certain refining,terminal and pipeline assets.Our practice is to keep our assets in good operating condition through routine repair and maintenance of component parts in the ordinary course of businessand by continuing to make improvements based on technological advances. As a result, we believe that these assets have no expected settlement date forpurposes of estimating asset retirement obligations since the dates or ranges of dates upon which we would retire these assets cannot be reasonably estimatedat this time.Income taxes – Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financialstatement carrying amounts of assets and liabilities and their tax bases. Deferred tax assets are recorded when it is more likely than not that they will berealized. The realization of deferred tax assets is assessed periodically based on several factors, primarily our expectation to generate sufficient future taxableincome.82Table of ContentsStock-based compensation arrangements – The fair value of stock options granted to our employees is estimated on the date of grant using the Black-Scholes option pricing model. The model employs various assumptions, based on management’s estimates at the time of grant, which impact the calculationof fair value and ultimately, the amount of expense that is recognized over the vesting period of the stock option award. Of the required assumptions, theexpected life of the stock option award and the expected volatility of our stock price have the most significant impact on the fair value calculation. Theaverage expected life is based on our historical employee exercise behavior. The assumption for expected volatility of our stock price reflects a weighting of50 percent of our common stock implied volatility and 50 percent of MPC’s common stock historical volatility.The fair value of restricted stock awards granted to our employees is determined based on the fair market value of our common stock on the date of grant. Thefair value of performance unit awards granted to our employees is estimated on the date of grant using a Monte Carlo valuation model.Our stock-based compensation expense is recognized based on management’s estimate of the awards that are expected to vest, using the straight-lineattribution method for all service-based awards with a graded vesting feature. If actual forfeiture results are different than expected, adjustments to recognizedcompensation expense may be required in future periods. Unearned stock-based compensation is charged to equity when restricted stock awards aregranted. Compensation expense is recognized over the vesting period and is adjusted if conditions of the restricted stock award are not met. Renewable fuel identification numbers (“RINs”) – We purchase RINs to satisfy a portion of our Renewable Fuel Standard (“RFS2”) compliance. We record ashort-term intangible asset, included in other current assets on the balance sheet, for RINs owned in excess of our anticipated current period compliancerequirements. The asset value is based on the product of the excess RINs as of the balance sheet date, if any, and the average cost of our RINs. We record acurrent liability, included in other current liabilities on the balance sheet, when we are deficient RINs based on the product of the deficient RINs as of thebalance sheet date, if any, and the market price of the RINs at the balance sheet date. The cost of RINs used for compliance is reflected in cost ofrevenues. Any gains or losses on the sale or expiration of RINs are classified as other income.3.Accounting StandardsNot Yet AdoptedIn February 2015, the Financial Accounting Standards Board (“FASB”) issued an accounting standards update making targeted changes to the currentconsolidation guidance. The new standard changes the way certain decisions are made related to substantive rights, related parties, and decision making feeswhen applying the VIE consolidation model and eliminates certain guidance for limited partnerships and similar entities under the voting interestconsolidation model. The update is effective for annual periods beginning after December 15, 2015. Early adoption is permitted. At this point, we have notdetermined the impact of the new standards update on our consolidated financial statements and related disclosures. In August 2014, the FASB issued an accounting standards update requiring management to assess an entity’s ability to continue as a going concern and toprovide related footnote disclosures in certain circumstances. Management will be required to assess if there is substantial doubt about an entity’s ability tocontinue as a going concern within one year after the date that the financial statements are issued. Disclosures will be required if conditions give rise tosubstantial doubt and the type of disclosure will be determined based on whether management’s plans will be able to alleviate the substantial doubt. Theaccounting standards update will be effective for the first annual period ending after December 15, 2016, and for annual periods and interim periods thereafterwith early application permitted.In June 2014, the FASB issued an accounting standards update for the elimination of the concept of development stage entity (“DSE”) from U.S. GAAP andremoves the related incremental reporting. The standards update eliminates the additional financial statement requirements specific to a DSE. In addition, itamends the consolidation model by eliminating the special provisions in the variable interest entity rules for assessing the sufficiency of the equity of a DSE.The portion of the accounting standards update related to the amendment to the consolidation guidance will be effective on a retrospective basis for annualreporting periods beginning after December 15, 2015, and interim periods within those years, with early adoption permitted. The portion of the accountingstandards update related to the removal of the DSE reporting requirements will be effective on a retrospective basis for annual reporting periods beginningafter December 15, 2014, and interim periods within those years, with early adoption permitted. Adoption of this standards update in the first quarters of 2015and 2016 is not expected to have an impact on our consolidated results of operations, financial position or cash flows.83Table of ContentsIn May 2014, the FASB issued an accounting standards update for revenue recognition that is aligned with the International Accounting Standards Board’srevenue recognition standard issued on the same day. The guidance in the update states that revenue is recognized when a customer obtains control of a goodor service. Recognition of the revenue will involve a multiple step approach including identifying the contract, identifying the separate performanceobligations, determining the transaction price, allocating the price to the performance obligations and then recognizing the revenue as the obligations aresatisfied. Additional disclosures will be required to provide adequate information to understand the nature, amount, timing and uncertainty of reportedrevenues and revenues expected to be recognized. The accounting standards update will be effective on a retrospective or modified retrospective basis forannual reporting periods beginning after December 15, 2016, and interim periods within those years, with no early adoption permitted. At this point, we havenot determined the impact of the new standard on our consolidated financial statements.In April 2014, the FASB issued an accounting standards update that redefines the criteria for determining discontinued operations and introduces newdisclosures related to these disposals. The updated definition of a discontinued operation is the disposal of a component (or components) of an entity or theclassification of a component (or components) of an entity as held for sale that represents a strategic shift for an entity and has (or will have) a major impacton an entity’s operations and financial results. The standard requires disclosure of additional financial information for discontinued operations andindividually material components not qualifying for discontinued operation presentation, as well as information regarding an entity’s continuinginvolvement with the discontinued operation. The accounting standards update is effective prospectively for annual periods beginning on or after December15, 2014, and interim periods within those years. Early adoption is permitted. Adoption of this standards update in the first quarter of 2015 is not expected tohave an impact on our consolidated results of operations, financial position or cash flows.4.MPLX LP MPLX is a publicly traded master limited partnership that was formed by us to own, operate, develop and acquire pipelines and other midstream assets relatedto the transportation and storage of crude oil, refined products and other hydrocarbon-based products. In October 2012, MPLX completed its initial publicoffering of 19.9 million common units. Net proceeds to MPLX from the sale of the units were $407 million.As of December 31, 2014, we owned a 71.5 percent interest in MPLX, including the two percent general partner interest. We consolidate this entity forfinancial reporting purposes since we have a controlling financial interest, and we record a noncontrolling interest for the interest owned by the public.MPLX’s initial assets consisted of a 51 percent general partner interest in MPLX Pipe Line Holdings LP (“Pipe Line Holdings”), which owns a network ofcommon carrier crude oil and product pipeline systems and associated storage assets in the Midwest and Gulf Coast regions of the United States, and a 100percent interest in a butane storage cavern in West Virginia. On May 1, 2013, we sold a five percent interest in Pipe Line Holdings to MPLX for $100 millionof cash on-hand.On March 1, 2014, we sold MPLX a 13 percent interest in Pipe Line Holdings for $310 million. MPLX financed this transaction with $40 million of cash on-hand and $270 million of borrowings on its bank revolving credit agreement.On December 1, 2014, we sold and contributed interests in Pipe Line Holdings totaling 30.5 percent to MPLX for $600 million in cash and 2.9 million MPLXcommon units valued at $200 million. MPLX financed the sales portion of this transaction with $600 million of borrowings on its bank revolving creditfacility.The sales and contribution of our interests in Pipe Line Holdings to MPLX resulted in a change of our ownership in Pipe Line Holdings, but not a change incontrol. We accounted for these sales as transactions between entities under common control and did not record a gain or loss.On December 8, 2014, MPLX completed a public offering of 3.5 million common units at a price to the public of $66.68 per common unit, with net proceedsof $221 million. MPLX used the net proceeds from this offering to repay borrowings under its bank revolving credit facility and for general partnershippurposes. On December 10, 2014, we exercised our right to maintain our two percent general partner interest in MPLX by purchasing 130 thousand generalpartner units for $9 million.AgreementsMPLX generates revenue primarily by charging tariffs for transporting crude oil, refined products and other hydrocarbon-based products through theirpipelines and at their barge dock and fees for storing crude oil and products at their storage facilities. They are also the operator of additional crude oil andproduct pipelines owned by us and third parties for which they are paid operating fees. They do not take ownership of the crude oil or products that theytransport and store for their customers, and they do not engage in the trading of any commodities.84Table of ContentsWe have various long-term, fee-based transportation and storage services agreements with MPLX. Under these agreements, MPLX provides transportationand storage services to us, and we commit to provide MPLX with minimum quarterly throughput volumes on crude oil and products systems and minimumstorage volumes of crude oil, products and butane. We also have agreements with MPLX which establish fees for operational and management servicesprovided between us and MPLX and for executive management services and certain general and administrative services provided by us to MPLX. Thesetransactions are eliminated in consolidation.5.Acquisitions and InvestmentsAcquisition of Hess’ Retail Operations and Related AssetsOn September 30, 2014, we acquired from Hess Corporation (“Hess”) all of Hess’ retail locations, transport operations and shipper history on variouspipelines, including approximately 40,000 barrels per day on Colonial Pipeline, for $2.82 billion. We refer to these assets as “Hess’ Retail Operations andRelated Assets.” The transaction was funded with a combination of debt and available cash.The transaction provides for an adjustment for working capital, which has not been finalized with Hess. If a change is made for working capital, the fair valueof the assets acquired and liabilities assumed will be revised.The components of the fair value of consideration transferred are as follows:(In millions) Cash$2,824Net working capital adjustment estimate(3)Total fair value of consideration transferred$2,821During the fourth quarter of 2014, an independent appraisal of the assets acquired and liabilities assumed and other evaluations were completed andfinalized. Updates to the preliminary fair value measurements of assets acquired and liabilities assumed were made during the fourth quarter of 2014. Thefollowing table summarizes the amounts assigned to the assets acquired and liabilities assumed as of the acquisition date.(In millions) Cash and cash equivalents$49Receivables123Inventories165Other current assets8Property, plant and equipment, net2,063Other noncurrent assets111Total assets acquired2,519Accounts payable77Payroll and benefits payable15Consumer excise taxes payable64Accrued taxes4Other current liabilities10Defined benefit postretirement plan obligations2Deferred credits and other liabilities155Total liabilities assumed327Net assets acquired excluding goodwill2,192Goodwill629Net assets acquired$2,82185Table of ContentsThe purchase price allocation resulted in the recognition of $629 million in goodwill by our Speedway segment, which is deductible for tax purposes.Goodwill recognized for the acquisition primarily relates to the expected benefits of a significantly expanded retail platform that should enable growth innew markets, as well as the potential for higher merchandise sales at the acquired locations. We also expect strategic benefits from the financial andoperational scale we expect to realize across our entire retail network. This acquisition significantly expands our Speedway presence from nine to 22 statesthroughout the East Coast and Southeast and is aligned with our strategy to grow higher-valued, stable cash flow businesses. This acquisition also enables usto further leverage our integrated refining and transportation operations, providing an outlet for an incremental 200,000 barrels per day of assured sales fromour refining system.Other noncurrent assets includes a $22 million intangible asset related to a trade name and $72 million related to favorable lease contract terms. Deferredcredits and other liabilities includes $90 million related to unfavorable lease contract terms. The trade name is being amortized over its estimated useful lifeof two years based on the utilization of the assets. The favorable and unfavorable lease contract amounts are being amortized over the terms of the leases.We recognized $14 million of acquisition-related costs associated with Hess’ Retail Operations and Related Assets acquisition. These costs were expensedand were included in selling, general and administrative expenses.The amounts of revenue and income from operations associated with Hess’ Retail Operations and Related Assets included in our consolidated statements ofincome for 2014 are as follows:(In millions)2014Sales and other operating revenues (including consumer excise taxes)$2,403Income from operations113Acquisition of Refinery and Related Logistics and Marketing AssetsOn February 1, 2013, we acquired from BP Products North America Inc. and BP Pipelines (North America) Inc. (collectively, “BP”) the 451,000 barrel percalendar day refinery in Texas City, Texas, three intrastate natural gas liquid pipelines originating at the refinery, four light product terminals, branded-jobber marketing contract assignments for the supply of approximately 1,200 branded sites, a 1,040 megawatt electric cogeneration facility and a 50,000barrel per day allocation of space on the Colonial Pipeline. We refer to these assets as the “Galveston Bay Refinery and Related Assets.” We paid $1.49billion for these assets, which included $935 million for inventory. The transaction was funded with cash on hand. Pursuant to the purchase and saleagreement, we may also be required to pay to BP a contingent earnout of up to an additional $700 million over six years. During 2014, we paid BP $180million for the first period’s contingent earnout. On the consolidated statements of cash flows, $172 million of the contingent earnout payment is included asa financing activity with the remainder included as an operating activity. See Note 18 for additional information on the contingent consideration.The transaction provided for a post-closing adjustment for inventory, which was finalized for $9 million, reducing our total consideration.The components of the fair value of consideration transferred are as follows:(In millions) Cash$1,491Fair value of contingent consideration as of acquisition date600Payable to seller6Post-closing adjustment(9)Total fair value of consideration transferred$2,08886Table of ContentsDuring the fourth quarter of 2013, an independent appraisal of the assets acquired and liabilities assumed and other evaluations were completed andfinalized. The following table summarizes the final amounts assigned to the assets acquired and liabilities assumed as of the acquisition date.(In millions) Inventories$935Other current assets1Property, plant and equipment, net1,274Other noncurrent assets88Total assets acquired2,298Accounts payable12Payroll and benefits payable14Long-term debt due within one year(a)2Other current liabilities6Long-term debt(a)58Defined benefit postretirement plan obligations43Deferred credits and other liabilities75Total liabilities assumed210Net assets acquired$2,088(a) Represents a capital lease obligation assumed.Neither goodwill nor a gain from a bargain purchase was recognized in conjunction with the Galveston Bay Refinery and Related Assets acquisition.Other noncurrent assets consist of a $20 million intangible asset related to customer relationships and a $68 million intangible asset related to prepaidlicensed refinery technology agreements. The intangible assets related to customer relationships and prepaid licensed refinery technology agreements arebeing amortized on a straight-line basis over four and 15 years, respectively. The weighted average life over which these acquired intangibles are beingamortized is approximately 13 years.We recognized $7 million of acquisition-related costs associated with the Galveston Bay Refinery and Related Assets acquisition. These costs were expensedand were included in selling, general and administrative expenses.Our refineries and related assets are operated as an integrated system. As the information is not available by refinery, it is not practicable to disclose therevenues and net income associated with the acquisition that were included in our consolidated statements of income for 2013.Unaudited Pro Forma Financial InformationThe following unaudited pro forma financial information presents consolidated results assuming Hess’ Retail Operations and Related Assets acquisitionoccurred on January 1, 2013 and the Galveston Bay Refinery and Related Assets acquisition occurred on January 1, 2012. The pro forma financialinformation does not give effect to potential synergies that could result from the acquisitions and is not necessarily indicative of the results of futureoperations.(In millions, except per share data)2014 2013Sales and other operating revenues (including consumer excise taxes)$106,482 $114,148Net income attributable to MPC2,547 2,142Net income attributable to MPC per share – basic$8.94 $6.80Net income attributable to MPC per share – diluted8.87 6.76The pro forma information includes adjustments to align accounting policies, an adjustment to depreciation expense to reflect the fair value of property,plant and equipment, increased amortization expense related to identifiable intangible assets, additional interest expense related to financing the acquisitionof Hess’ Retail Operations and Related Assets, as well as the related income tax effects.87Table of ContentsAcquisitions of Convenience StoresDuring 2013, Speedway acquired nine convenience stores located in Tennessee, western Indiana and western Pennsylvania. In connection with theseacquisitions, our Speedway segment recorded $8 million of goodwill.In July 2012, Speedway acquired 10 convenience stores located in the northern Kentucky and southwestern Ohio regions from Road Ranger LLC inexchange for cash and a truck stop location in the Chicago metropolitan area. In connection with this acquisition, our Speedway segment recorded $5 millionof goodwill.In May 2012, Speedway acquired 87 convenience stores situated throughout Indiana and Ohio from GasAmerica Services, Inc., along with the associatedinventory, intangible assets and two parcels of undeveloped real estate. In connection with this acquisition, our Speedway segment recorded $83 million ofgoodwill.The goodwill associated with these acquisitions is deductible for income tax purposes.These acquisitions support our strategic initiative to increase our Speedway segment sales and profitablity. The principal factors contributing to a purchaseprice resulting in goodwill included the acquired stores complementing our existing network in our Midwest market, access to our refined producttransportation systems and the potential for higher merchandise sales.Acquisition of Biodiesel FacilityOn April 1, 2014, we purchased a facility in Cincinnati, Ohio from Felda Iffco Sdn Bhd, Malaysia for $40 million. The plant currently produces biodiesel,glycerin and other by-products. The production capacity of the plant is approximately 60 million gallons per year.Neither goodwill nor a gain from a bargain purchase was recognized in conjunction with the biodiesel facility acquisition.Assuming the acquisitions of the convenience stores in 2013 and 2012 and the biodiesel facility in 2014 had been made at the beginning of any periodpresented, the consolidated pro forma results would not be materially different from reported results.Investments in Ethanol CompaniesOn August 1, 2013, we acquired from Mitsui & Co. (U.S.A.), Inc. its interests in three ethanol companies for $75 million. Under the purchase agreement, weacquired an additional 24 percent interest in The Andersons Clymers Ethanol LLC (“TACE”), bringing our ownership interest to 60 percent; a 34 percentinterest in The Andersons Ethanol Investment LLC (“TAEI”), which holds a 50 percent ownership in The Andersons Marathon Ethanol LLC (“TAME”),bringing our direct and indirect ownership interest in TAME to 67 percent; and a 40 percent interest in The Andersons Albion Ethanol LLC (“TAAE”), whichowns an ethanol production facility in Albion, Michigan. On October 1, 2013, our ownership interest in TAAE increased to 43 percent as a result of TAAEacquiring one of the owner’s interest. We hold a noncontrolling interest in each of these entities and account for them using the equity method of accountingsince the minority owners have substantive participating rights.Investment in Pipeline CompaniesIn July 2014, we exercised our option to acquire a 35 percent ownership interest in Enbridge Inc.’s Southern Access Extension pipeline (“SAX”) through ourinvestment in Illinois Extension Pipeline Company, LLC (“Illinois Extension Pipeline”). During 2014, we made contributions of $120 million to IllinoisExtension Pipeline to fund our portion of the construction costs incurred-to-date on the SAX project. We account for our ownership interest in IllinoisExtension Pipeline as an equity method investment. See Note 26 for information on future contributions to Illinois Extension Pipeline.In March 2014, we acquired from Chevron Raven Ridge Pipe Line Company an additional seven percent interest in Explorer Pipeline Company (“Explorer”)for $77 million, bringing our ownership interest to 25 percent. As a result of this increase in our ownership, we now account for our investment in Explorerusing the equity method of accounting rather than the cost method. The cumulative impact of the change was applied as an adjustment to 2014 retainedearnings.In November 2013, we agreed to serve as an anchor shipper for the Sandpiper pipeline project and fund 37.5 percent of the construction costs of the project,which will become part of Enbridge Energy Partners L.P.’s (“Enbridge Energy Partners”) North Dakota System. In exchange for these commitments, we willearn an approximate 27 percent equity interest in Enbridge Energy Partners’ North Dakota System when the Sandpiper pipeline is placed into service, whichis expected to be in 2017. We also have the option to increase our ownership interest to approximately 30 percent through additional investments in futuresystem improvements. We made contributions of $192 million to North Dakota Pipeline Company LLC (“North Dakota Pipeline”) during 2014. We havecontributed $216 million since project inception. We account for our interest in North Dakota Pipeline using the equity method of accounting. See Note 26for information on future contributions to North Dakota Pipeline.88Table of Contents6.DispositionOn December 1, 2010, we completed the sale of most of our Minnesota assets. These assets included the 74,000 barrel per calendar day St. Paul Park refineryand associated terminals, 166 convenience stores primarily branded SuperAmerica® (including six stores in Wisconsin), along with the SuperMom’s bakery(a baked goods and sandwich supply operation) and certain associated trademarks, SuperAmerica Franchising LLC, interests in pipeline assets in Minnesotaand associated inventories. We refer to these assets as the “Minnesota Assets.”In July 2012, the buyer of our Minnesota Assets successfully completed an initial public offering (“IPO”). The successful completion of this IPO triggered theprovisions in our May 4, 2012 settlement agreement with the buyer to be effective. Under the settlement agreement, we were released from our obligation topay margin support and the buyer was released from its obligation to pay us under the earnout provision contained in the original sales agreement. Also, thebuyer redeemed our $80 million preferred equity interest, paid us $12 million for dividends accrued on our preferred equity interest and paid us $40 millionof cash, for total cash receipts of $132 million. In addition, the buyer issued us a new preferred security valued at $45 million. As a result, we recognizedincome before income taxes of approximately $183 million during 2012, which included $86 million of the deferred gain that was recorded when the saletransaction was originally closed.During 2013, the buyer redeemed the second preferred security for $49 million, which included $4 million of accrued distributions.7.Variable Interest EntityAs stated in Note 5, we have a 35 percent ownership interest in Illinois Extension Pipeline through our contributions to the SAX project. Illinois ExtensionPipeline Company LLC is considered a variable interest entity (“VIE”) because it is a development stage entity and the equity in the entity is not sufficient tofund the current stage of development, which is the construction of the SAX pipeline. Our maximum exposure to loss due to this VIE at December 31, 2014was $120 million, which equates to our contributions to-date to fund our portion of the construction costs for the project.We are not the primary beneficiary of this VIE and, therefore, do not consolidate it because we do not have the power to control the activities thatsignificantly influence the economic activities of the entity. The activities that most significantly impact the VIE’s economic performance during theconstruction phase are the actual construction costs and risks associated with the construction process. Through our vote, we have shared power to direct theconstruction activities, but do not have the sole ability to control the construction activities.8.Related Party TransactionsOur related parties included:•Centennial Pipeline LLC (“Centennial”), in which we have a 50 percent noncontrolling interest. Centennial owns a refined products pipeline andstorage facility.•Explorer, in which we have a 25 percent interest. Explorer owns and operates a refined products pipeline.•LOCAP LLC (“LOCAP”), in which we have a 59 percent noncontrolling interest. LOCAP owns and operates a crude oil pipeline.•LOOP LLC (“LOOP”), in which we have a 51 percent noncontrolling interest. LOOP owns and operates the only U.S. deepwater oil port.•TAAE, in which we have a 43 percent interest, TACE, in which we have a 60 percent noncontrolling interest, and TAME, in which we have a 67percent direct and indirect noncontrolling interest. These companies each own an ethanol production facility.•Other equity method investees.We believe that transactions with related parties were conducted on terms comparable to those with unaffiliated parties.89Table of ContentsSales to related parties, which are included in sales and other operating revenues (including consumer excise taxes) on the consolidated statements of income,were as follows:(In millions)2014 2013 2012Centennial$— $— $1Other equity method investees7 8 7Total$7 $8 $8Related party sales to Centennial consist primarily of petroleum products.The fees received for operating Centennial’s pipeline, which are included in other income on the consolidated statements of income, were $1 million in 2014,2013 and 2012.Purchases from related parties were as follows:(In millions)2014 2013 2012Centennial$7 $3 $7Explorer39 — —LOCAP21 17 24LOOP88 43 44TAAE79 24 —TACE121 130 73TAME141 131 124Other equity method investees9 9 8Total$505 $357 $280Related party purchases from Centennial consist primarily of refinery feedstocks and refined product transportation costs. Related party purchases fromExplorer consist primarily of refined product transportation costs. Related party purchases from LOCAP, LOOP and other equity method investees consistprimarily of crude oil transportation costs. Related party purchases from TAAE, TACE and TAME consist of ethanol purchases.Receivables from related parties, which are included in receivables, less allowance for doubtful accounts on the consolidated balance sheets, were as follows: December 31,(In millions)2014 2013Centennial$2 $1Explorer2 —TAME3 1Total$7 $2Long-term receivable from Centennial, which is included in other noncurrent assets on the consolidated balance sheet, was less than $1 million atDecember 31, 2014 and $2 million at December 31, 2013.90Table of ContentsPayables to related parties, which are included in accounts payable on the consolidated balance sheets, were as follows: December 31,(In millions)2014 2013Explorer$3 $—LOCAP2 2LOOP4 3TAAE2 2TACE2 4TAME5 5Total$18 $169.Income per Common ShareWe compute basic earnings per share by dividing net income attributable to MPC by the weighted average number of shares of common stock outstanding.Diluted income per share assumes exercise of certain stock based compensation awards, provided the effect is not anti-dilutive.MPC grants certain incentive compensation awards to employees and non-employee directors that are considered to be participating securities. Due to thepresence of participating securities, we have calculated our earnings per share using the two-class method.(In millions, except per share data)2014 2013 2012Basic earnings per share: Allocation of earnings: Net income attributable to MPC$2,524 $2,112 $3,389Income allocated to participating securities4 4 6Income available to common stockholders – basic$2,520 $2,108 $3,383Weighted average common shares outstanding285 315 340Basic earnings per share$8.84 $6.69 $9.95Diluted earnings per share: Allocation of earnings: Net income attributable to MPC$2,524 $2,112 $3,389Income allocated to participating securities4 4 6Income available to common stockholders – diluted$2,520 $2,108 $3,383Weighted average common shares outstanding285 315 340Effect of dilutive securities2 2 2Weighted average common shares, including dilutive effect287 317 342Diluted earnings per share$8.78 $6.64 $9.89The following table summarizes the shares that were anti-dilutive, and therefore, were excluded from the diluted share calculation.(In millions)2014 2013 2012Shares issued under stock-based compensation plans— — 291Table of Contents10.EquityOn July 30, 2014, our board of directors approved an additional $2.0 billion share repurchase authorization expiring in July 2016. As of December 31, 2014,our board of directors had approved $8.0 billion in total share repurchase authorizations since January 1, 2012 and we have repurchased a total of $6.27billion of our common stock under these authorizations, leaving $1.73 billion available for repurchases. Under these authorizations, we have acquired 89million shares at an average cost per share of $70.35.We may utilize various methods to effect the repurchases, which could include open market repurchases, negotiated block transactions, accelerated sharerepurchases or open market solicitations for shares, some of which may be effected through Rule 10b5-1 plans. The timing and amount of future repurchases,if any, will depend upon several factors, including market and business conditions, and such repurchases may be discontinued at any time.In February 2012 and November 2012, we entered into $850 million and $500 million accelerated share repurchase (“ASR”) programs, respectively, torepurchase shares of MPC common stock under the approved share repurchase plan authorized by our board of directors. The total number of sharesrepurchased under these ASR programs was based generally on the volume-weighted average price of our common stock during the repurchase periods. Theshares repurchased under the ASR programs were accounted for as treasury stock purchase transactions, reducing the weighted average number of basic anddiluted common shares outstanding by the shares repurchased, and as forward contracts indexed to our common stock. The forward contracts were accountedfor as equity instruments.Total share repurchases were as follows for the respective periods:(In millions, except per share data)2014 2013 2012Number of shares repurchased(a)24 37 28Cash paid for shares repurchased$2,131 $2,793 $1,350Effective average cost per delivered share$88.63 $76.14 $46.73(a) Shares repurchased in 2013 includes 1 million shares received under the November 2012 ASR program, which were paid for in 2012.At December 31, 2014, we had agreements to acquire 99,084 common shares for $9 million, which were settled in early January 2015.11.Segment InformationWe have three reportable segments: Refining & Marketing; Speedway; and Pipeline Transportation. Each of these segments is organized and managed basedupon the nature of the products and services it offers.•Refining & Marketing – refines crude oil and other feedstocks at our refineries in the Gulf Coast and Midwest regions of the United States, purchasesethanol and refined products for resale and distributes refined products through various means, including barges, terminals and trucks that we own oroperate. We sell refined products to wholesale marketing customers domestically and internationally, buyers on the spot market, our Speedwaysegment and to independent entrepreneurs who operate Marathon® retail outlets.•Speedway – sells transportation fuels and convenience products in retail markets in the Midwest, East Coast and Southeast.•Pipeline Transportation – transports crude oil and other feedstocks to our refineries and other locations, delivers refined products to wholesale andretail market areas and includes the aggregated operations of MPLX.On September 30, 2014, we acquired Hess’ Retail Operations and Related Assets, which are part of the Speedway and Refining & Marketing segments. OnFebruary 1, 2013, we acquired the Galveston Bay Refinery and Related Assets, which are part of the Refining & Marketing and Pipeline Transportationsegments. Segment information for periods prior to each acquisition does not include amounts for these operations. See Note 5.Segment income represents income from operations attributable to the reportable segments. Corporate administrative expenses and costs related to certainnon-operating assets are not allocated to the reportable segments. In addition, certain items that affect comparability (as determined by the chief operatingdecision maker) are not allocated to the reportable segments.92Table of Contents(In millions)Refining &Marketing Speedway PipelineTransportation TotalYear Ended December 31, 2014 Revenues: Customer$80,822 $16,927 $70 $97,819Intersegment(a)10,912 5 527 11,444Segment revenues$91,734 $16,932 $597 $109,263Segment income from operations(b)$3,609 $544 $280 $4,433Income from equity method investments96 — 57 153Depreciation and amortization(c)1,045 152 77 1,274Capital expenditures and investments(d)(e)1,104 2,981 543 4,628 (In millions)Refining &Marketing Speedway PipelineTransportation TotalYear Ended December 31, 2013 Revenues: Customer$85,616 $14,471 $79 $100,166Intersegment(a)9,294 4 458 9,756Segment revenues$94,910 $14,475 $537 $109,922Segment income from operations(b)$3,206 $375 $210 $3,791Income from equity method investments28 — 8 36Depreciation and amortization(c)1,011 112 74 1,197Capital expenditures and investments(d)(f)2,094 296 234 2,624 (In millions)Refining &Marketing Speedway PipelineTransportation TotalYear Ended December 31, 2012 Revenues: Customer$67,928 $14,239 $78 $82,245Intersegment(a)8,782 4 381 9,167Segment revenues$76,710 $14,243 $459 $91,412Segment income from operations(b)$5,098 $310 $216 $5,624Income (loss) from equity method investments(6) — 32 26Depreciation and amortization(c)804 114 54 972Capital expenditures and investments(d)705 340 211 1,256(a) Management believes intersegment transactions were conducted under terms comparable to those with unaffiliated parties.(b) Included in the Pipeline Transportation segment for 2014, 2013 and 2012 are $19 million, $20 million and $4 million of corporate overhead expenses attributable to MPLX,which were included in items not allocated to segments prior to MPLX’s October 31, 2012 initial public offering. Corporate overhead expenses are not currently allocated to othersegments.(c) Differences between segment totals and MPC totals represent amounts related to unallocated items and are included in “Items not allocated to segments” in the reconciliationbelow.(d) Capital expenditures include changes in capital accruals, acquisitions and investments in affiliates.(e) The Speedway and Refining & Marketing segments include $2.66 billion and $52 million, respectively, for the acquisition of Hess’ Retail Operations and Related Assets. See Note5.(f) The Refining & Marketing and Pipeline Transportation segments include $1.29 billion and $70 million, respectively, for the acquisition of the Galveston Bay Refinery andRelated Assets. See Note 5.93Table of ContentsThe following reconciles segment income from operations to income before income taxes as reported in the consolidated statements of income:(In millions)2014 2013 2012Segment income from operations$4,433 $3,791 $5,624Items not allocated to segments: Corporate and other unallocated items(a)(b)(286) (271) (336)Minnesota Assets sale settlement gain(c)— — 183Pension settlement expenses(d)(96) (95) (124)Net interest and other financial income (costs)(216) (179) (109)Income before income taxes$3,835 $3,246 $5,238(a) Corporate and other unallocated items consists primarily of MPC’s corporate administrative expenses and costs related to certain non-operating assets.(b) Corporate overhead expenses attributable to MPLX were included in the Pipeline Transportation segment subsequent to MPLX’s October 31, 2012 initial public offering.Corporate overhead expenses are not allocated to the Refining & Marketing and Speedway segments.(c) See Note 6.(d) See Note 23.The following reconciles segment capital expenditures and investments to total capital expenditures:(In millions)2014 2013 2012Segment capital expenditures and investments$4,628 $2,624 $1,256Less: Investments in equity method investees413 124 28Plus: Items not allocated to segments: Capital expenditures not allocated to segments83 137 103Capitalized interest27 28 101Total capital expenditures(a)(b)$4,325 $2,665 $1,432(a) Capital expenditures include changes in capital accruals.(b) See Note 21 for a reconciliation of total capital expenditures to additions to property, plant and equipment as reported in the consolidated statements of cash flows.The following reconciles total revenues to sales and other operating revenues (including consumer excise taxes) as reported in the consolidated statements ofincome:(In millions)2014 2013 2012Customer revenues$97,819 $100,166 $82,245Corporate and other unallocated items(2) (6) (2)Sales and other operating revenues (including consumer excise taxes)$97,817 $100,160 $82,243Revenues by product line were:(In millions)2014 2013 2012Refined products$90,702 $93,520 $76,234Merchandise3,817 3,308 3,229Crude oil and refinery feedstocks2,917 2,988 2,514Transportation and other381 344 266Sales and other operating revenues (including consumer excise taxes)$97,817 $100,160 $82,243No single customer accounted for more than 10 percent of annual revenues for the years ended December 31, 2014 and 2012. Revenue from BP p.l.c.included in the Refining & Marketing segment represented 10 percent of our total annual revenues for the year ended December 31, 2013.We do not have significant operations in foreign countries. Therefore, revenues in foreign countries and long-lived assets located in foreign countries,including property, plant and equipment and investments, are not material to our operations.94Table of ContentsTotal assets by reportable segment were: December 31,(In millions)2014 2013Refining & Marketing$19,751 $19,573Speedway5,296 2,064Pipeline Transportation2,407 1,947Corporate and Other3,006 4,801Total consolidated assets$30,460 $28,38512.Other ItemsNet interest and other financial income (costs) was:(In millions)2014 2013 2012Interest income$7 $9 $6Interest expense(229) (195) (191)Interest capitalized27 28 101Other financial costs(21) (21) (25)Net interest and other financial income (costs)$(216) $(179) $(109)13.Income TaxesIncome tax provisions (benefits) were: 2014 2013 2012(In millions)Current Deferred Total Current Deferred Total Current Deferred TotalFederal$1,382 $(199) $1,183 $954 $20 $974 $1,185 $432 $1,617State and local135 (37) 98 131 8 139 169 57 226Foreign5 (6) (1) 5 (5) — (1) 3 2Total$1,522 $(242) $1,280 $1,090 $23 $1,113 $1,353 $492 $1,845A reconciliation of the federal statutory income tax rate (35 percent) applied to income before income taxes to the provision for income taxes follows: 2014 2013 2012Statutory rate applied to income before income taxes35 % 35 % 35 %State and local income taxes, net of federal income tax effects2 3 2Domestic manufacturing deduction(2) (2) (1)Other(2) (2) (1)Provision for income taxes33 % 34 % 35 %95Table of ContentsDeferred tax assets and liabilities resulted from the following: December 31, (In millions)2014 2013Deferred tax assets: Employee benefits$616 $483Environmental54 37Investments in subsidiaries and affiliates24 —Other70 49Total deferred tax assets764 569Deferred tax liabilities: Property, plant and equipment2,411 2,290Inventories614 614Investments in subsidiaries and affiliates— 267Other101 70Total deferred tax liabilities3,126 3,241Net deferred tax liabilities$2,362 $2,672Net deferred tax liabilities were classified in the consolidated balance sheets as follows: December 31, (In millions)2014 2013Assets: Other noncurrent assets$7 $2Liabilities: Accrued taxes355 370Deferred income taxes2,014 2,304Net deferred tax liabilities$2,362 $2,672Tax carryforwards – At December 31, 2014, our federal operating loss carryforwards included $11 million acquired with the biodiesel facility acquisition,which expire in 2022 through 2034. State and local operating loss carryforwards of $1 million expire in 2015 through 2029.Valuation allowances – As of December 31, 2014 and 2013, $4 million and $3 million of valuation allowances were recognized related to income taxes. Afederal valuation allowance was established for both December 31, 2014 and 2013 of $3 million, primarily due to the expected realizability of foreign taxcredits. A state and local valuation allowance was established as of December 31, 2014 of $1 million, based on estimates of future financial income andexpected realizability of state and local tax operating losses.MPC is continuously undergoing examination of its U.S. federal income tax returns by the Internal Revenue Service. Such audits have been completedthrough the 2009 tax year. We believe adequate provision has been made for federal income taxes and interest which may become payable for years not yetsettled. Further, we are routinely involved in U.S. state income tax audits. We believe all other audits will be resolved with the amounts paid and/or providedfor these liabilities. As of December 31, 2014, our income tax returns remain subject to examination in the following major tax jurisdictions for the tax yearsindicated:United States Federal2010-2013States2004-201396Table of ContentsAs a result of the Spinoff and pursuant to the tax sharing agreement by Marathon Oil and MPC, the unrecognized tax benefits related to MPC operations forwhich Marathon Oil was the taxpayer remain the responsibility of Marathon Oil and MPC has indemnified Marathon Oil. During 2013, we settled withMarathon Oil our U.S. federal and related state return liabilities for the 2008-2009 tax years, resulting in a reduction in unrecognized tax benefits of $21million, which are also reflected in the table below as settlements.During 2013, we settled with Marathon Oil for the 2011 period prior to the spinoff based on filed tax returns and in accordance with the tax sharingagreement, resulting in a $39 million increase to additional paid-in capital.The following table summarizes the activity in unrecognized tax benefits:(In millions)2014 2013 2012January 1 balance$13 $40 $20Additions for tax positions of prior years7 30 32Reductions for tax positions of prior years(10) (25) (6)Settlements2 (30) (6)Statute of limitations— (2) —December 31 balance$12 $13 $40If the unrecognized tax benefits as of December 31, 2014 were recognized, $5 million would affect our effective income tax rate. There were $4 million ofuncertain tax positions as of December 31, 2014 for which it is reasonably possible that the amount of unrecognized tax benefits would significantly decreaseduring the next twelve months.Interest and penalties related to income taxes are recorded as part of the provision for income taxes. Such interest and penalties were net receipts (expenses) ofless than $1 million, ($11 million) and $1 million in 2014, 2013 and 2012, respectively. As of December 31, 2014 and 2013, $14 million and $15 million ofinterest and penalties were accrued related to income taxes.14.Inventories December 31, (In millions)2014 2013Crude oil and refinery feedstocks$2,219 $1,797Refined products2,955 2,367Materials and supplies302 425Merchandise166 100Total (at cost)$5,642 $4,689The LIFO method accounted for 94 percent and 90 percent of total inventory value at December 31, 2014 and 2013, respectively. Current acquisition costs ofinventories were estimated to exceed the LIFO inventory value at December 31, 2014 and 2013 by $684 million and $4,084 million, respectively. There wereno liquidations of LIFO inventories in 2014, 2013 and 2012.97Table of Contents15.Equity Method Investments Ownership as of Carrying value at December 31, December 31,(In millions)2014 2014 2013Centennial50% $36 $29Explorer25% 95 —Illinois Extension Pipeline35% 120 —LOCAP59% 23 24LOOP51% 230 214North Dakota Pipeline(a)38% 216 24TAAE43% 22 29TACE60% 61 70TAEI34% 19 23TAME(b)50% 24 35Other 19 15Total $865 $463(a) We own a 38 percent interest in the Class B units of this entity. Our Class B units will be converted to an approximate 27 percent ownership interest in the Class A units of thisentity upon completion of the Sandpiper pipeline construction project, which is expected to be in 2017.(b) Excludes TAEI’s investment in TAME.Summarized financial information for equity method investees is as follows:(In millions)2014 2013 2012Income statement data: Revenues and other income$1,430 $1,067 $1,025Income from operations379 87 73Net income316 63 47Balance sheet data – December 31: Current assets$990 $339 Noncurrent assets2,166 1,238 Current liabilities280 145 Noncurrent liabilities957 618 As of December 31, 2014, the carrying value of our equity method investments was $110 million higher than the underlying net assets of investees. Thisbasis difference is being amortized or accreted into net income over the remaining estimated useful lives of the underlying net assets, except for $55 millionof excess related to goodwill.Centennial experienced a significant reduction in shipment volumes in the second half of 2011 that has continued through 2014. At December 31, 2014,Centennial was not shipping product. As a result, we continued to evaluate the carrying value of our equity investment in Centennial and concluded that noimpairment was required given our assessment of its fair value based on market participant assumptions for various potential uses of Centennial’s assets. Ifmarket conditions were to change and the owners of Centennial are unable to find an alternative use for the assets, there could be a future impairment of ourCentennial interest. As of December 31, 2014, our equity investment in Centennial was $36 million and we had a $38 million guarantee associated with 50percent of Centennial’s outstanding debt. See Note 26 for additional information on the debt guarantee.Dividends and partnership distributions received from equity method investees (excluding distributions that represented a return of capital previouslycontributed) were $170 million, $18 million and $37 million in 2014, 2013 and 2012.98Table of Contents16.Property, Plant and Equipment(In millions)EstimatedUseful Lives December 31,2014 2013Refining & Marketing4 - 25 years $18,001 $16,982Speedway4 - 25 years 4,639 2,344Pipeline Transportation16 - 42 years 2,044 1,921Corporate and Other4 - 40 years 618 546Total 25,302 21,793Less accumulated depreciation 9,041 7,872Property, plant and equipment, net $16,261 $13,921Property, plant and equipment includes gross assets acquired under capital leases of $510 million at both December 31, 2014 and 2013, with related amountsin accumulated depreciation of $144 million and $111 million at December 31, 2014 and 2013. Property, plant and equipment includes construction inprogress of $1,043 million and $747 million at December 31, 2014 and 2013, which primarily relates to refinery projects.Construction in progress at December 31, 2014 includes $90 million of costs associated with a residual fuel hydrocracker project at our Garyville refinery,intended to increase margins by upgrading residual fuel to ultra-low sulfur diesel and gas oil. We are deferring a final investment decision on this project withestimated total costs of $2.2 billion to $2.5 billion as we further evaluate the implications of current market conditions on the project. If a decision is made tonot pursue this project, there could be a future impairment of the costs incurred for the project.17.GoodwillGoodwill is tested for impairment on an annual basis and when events or changes in circumstances indicate the fair value of a reporting unit with goodwillhas been reduced below the carrying value. We performed our annual impairment tests for 2014 and 2013, and no impairment was required.The changes in the carrying amount of goodwill for 2014 and 2013 were as follows:(In millions)Refining &Marketing Speedway PipelineTransportation Total2013 Beginning balance$551 $217 $162 $930Acquisitions(a)— 8 — 8Ending balance$551 $225 $162 $9382014 Beginning balance$551 $225 $162 $938Acquisitions(a)— 629 — 629Disposition(1) — — (1)Ending balance$550 $854 $162$1,566(a) See Note 5 for information on the acquisitions.99Table of Contents18.Fair Value MeasurementsFair Values – RecurringThe following tables present assets and liabilities accounted for at fair value on a recurring basis as of December 31, 2014 and 2013 by fair value hierarchylevel. We have elected to offset the fair value amounts recognized for multiple derivative contracts executed with the same counterparty, including anyrelated cash collateral as shown below; however, fair value amounts by hierarchy level are presented on a gross basis in the following tables. December 31, 2014 Fair Value Hierarchy (In millions)Level 1 Level 2 Level 3 Netting andCollateral(a) Net Carrying Valueon Balance Sheet(b) CollateralPledged NotOffsetCommodity derivative instruments, assets$317 $— $— $(258) $59 $—Other assets2 — — N/A 2 —Total assets at fair value$319 $— $— $(258) $61 $— Commodity derivative instruments, liabilities$180 $— $— $(180) $— $—Contingent consideration, liability(c)— — 478 N/A 478 —Total liabilities at fair value$180 $— $478 $(180) $478 $— December 31, 2013 Fair Value Hierarchy (In millions)Level 1 Level 2 Level 3 Netting andCollateral(a) Net Carrying Valueon Balance Sheet(b) CollateralPledged NotOffsetCommodity derivative instruments, assets$21 $— $— $(21) $— $61Other assets2 — — N/A 2 —Total assets at fair value$23 $— $—$(21) $2 $61 Commodity derivative instruments, liabilities$53 $— $— $(53) $— $—Contingent consideration, liability(c)— — 625 N/A 625 —Total liabilities at fair value$53 $— $625 $(53) $625 $—(a) Represents the impact of netting assets, liabilities and cash collateral when a legal right of offset exists. As of December 31, 2014, cash collateral of $78 million was netted withmark-to-market derivative assets. As of December 31, 2013, cash collateral of $32 million was netted with mark-to-market derivative liabilities.(b) We have no derivative contracts that are subject to master netting arrangements that are reflected gross on the balance sheet.(c) Includes $174 million at December 31, 2014 and $159 million at December 31, 2013 classified as current.Commodity derivatives in Level 1 are exchange-traded contracts for crude oil and refined products measured at fair value with a market approach using theclose-of-day settlement prices for the market. Commodity derivatives are covered under master netting agreements with an unconditional right to offset.Collateral deposits in futures commission merchant accounts covered by master netting agreements related to Level 1 commodity derivatives are classified asLevel 1 in the fair value hierarchy.The contingent consideration represents the fair value as of December 31, 2014 and 2013 of the amount we expect to pay to BP related to the earnoutprovision for the Galveston Bay Refinery and Related Assets acquisition. See Note 5. The fair value of the contingent consideration was estimated using anincome approach and is therefore a Level 3 liability. The amount of cash to be paid under the arrangement is based on both a market-based crack spread andrefinery throughput volumes for the months during which the contract applies, as well as established thresholds that cap the annual and total payment. Theearnout payment cannot exceed $200 million per year for the first three years of the arrangement or $250 million per year for the last three years of thearrangement, with the total cumulative payment capped at $700 million over the six-year period. Any excess or shortfall from the annual cap for a currentyear’s earnout calculation will not affect subsequent years’ calculations. The fair value calculation used significant unobservable inputs including: (1) anestimate of refinery throughput volumes; (2) a range of internal and external crack spread forecasts from $13 to $15 per barrel; and (3) a range of risk-adjusteddiscount rates from 5 percent to 10 percent. An increase or decrease in crack spread forecasts or refinery throughput volume expectations will result in acorresponding increase or decrease in the fair value. Increases to the fair value as a result of increasing forecasts for both of100Table of Contentsthese unobservable inputs, however, are limited as the earnout payment is subject to annual thresholds. An increase or decrease in the discount rate will resultin a decrease or increase to the fair value, respectively. The fair value of the contingent consideration is reassessed each quarter, with changes in fair valuerecorded in cost of revenues.The following is a reconciliation of the net beginning and ending balances recorded for liabilities classified as Level 3 in the fair value hierarchy.(In millions)2014 2013 2012Beginning balance$625 $— $—Contingent consideration agreement— 600 —Contingent consideration payment(180) — —Unrealized and realized losses included in net income33 25 2Settlements of derivative instruments— — (2)Ending balance$478 $625 $—We did not hold any Level 3 derivative instruments during 2014, 2013 and 2012. See Note 19 for the income statement impacts of our derivativeinstruments. There was an unrealized loss of $33 million and $25 million in 2014 and 2013, respectively, related to the contingent consideration agreement.Fair Values – NonrecurringThe following table shows the values of assets, by major category, measured at fair value on a nonrecurring basis in periods subsequent to their initialrecognition. Year Ended December 31, 2014 2013 2012(In millions)Fair Value Impairment Fair Value Impairment Fair Value ImpairmentProperty, plant and equipment, net$— $— $1 $8 $— $—Other noncurrent assets— 11 — — — 14Based on the financial and operational status of a company in which we have an interest, we fully impaired our $11 million investment in that company in2014. Our investment in this company was accounted for using the cost method and was included in our Refining & Marketing segment. The impairment isincluded in other income on the consolidated statements of income. The fair value of our investment in this cost company was measured using an incomeapproach. This measurement is classified as Level 3.Due to changing market conditions, we assessed one of our light products terminals for impairment. The terminal is operated by our Refining & Marketingsegment. We recorded an impairment charge of $8 million for this terminal in 2013. The impairment is included in depreciation and amortization on theconsolidated statements of income. The fair value of the terminal was measured using a market approach based on comparable area property values which areLevel 3 inputs.As a result of changing market conditions and declining throughput volumes, we impaired our Refining & Marketing segment’s prepaid tariff withCentennial by $14 million in 2012. The fair value measurement of the prepaid tariff was based on the income approach utilizing the probability of shippingsufficient volumes on Centennial’s pipeline over the remaining life of the throughput and deficiency credits, which expired March 31, 2014. Thismeasurement is classified as Level 3.101Table of ContentsFair Values – ReportedThe following table summarizes financial instruments on the basis of their nature, characteristics and risk at December 31, 2014 and 2013, excluding thederivative financial instruments and contingent consideration reported above. December 31, 2014 2013(In millions)Fair Value Carrying Value Fair Value Carrying ValueFinancial assets: Investments$26 $2 $336 $14Other32 32 31 30Total financial assets$58 $34 $367 $44Financial liabilities: Long-term debt(a)$6,571 $6,265 $3,306 $3,001Deferred credits and other liabilities17 17 21 21Total financial liabilities$6,588$6,282 $3,327 $3,022(a) Excludes capital leasesOur current assets and liabilities include financial instruments, the most significant of which are trade accounts receivable and payables. We believe thecarrying values of our current assets and liabilities approximate fair value. Our fair value assessment incorporates a variety of considerations, including (1)the short-term duration of the instruments, (2) our investment-grade credit rating and (3) our historical incurrence of and expected future insignificance of baddebt expense, which includes an evaluation of counterparty credit risk.Fair values of our financial assets included in investments and other financial assets and of our financial liabilities included in deferred credits and otherliabilities are measured primarily using an income approach and most inputs are internally generated, which results in a Level 3 classification. Estimatedfuture cash flows are discounted using a rate deemed appropriate to obtain the fair value. Other financial assets primarily consist of environmentalremediation receivables. Deferred credits and other liabilities primarily consist of insurance liabilities and environmental remediation liabilities.Fair value of fixed-rate long-term debt is measured using a market approach, based upon the average of quotes from major financial institutions and a third-party service for our debt. Because these quotes cannot be independently verified to the market, they are considered Level 3 inputs.19.DerivativesFor further information regarding the fair value measurement of derivative instruments, including any effect of master netting agreements or collateral, seeNote 18. See Note 2 for a discussion of the types of derivatives we use and the reasons for them. We do not designate any of our commodity derivativeinstruments as hedges for accounting purposes. Our interest rate derivative instruments were designated as fair value accounting hedges.The following table presents the gross fair values of derivative instruments, excluding cash collateral, and where they appear on the consolidated balancesheets as of December 31, 2014 and 2013: December 31, 2014 (In millions)Asset Liability Balance Sheet LocationCommodity derivatives$317 $180 Other current assets December 31, 2013 (In millions)Asset Liability Balance Sheet LocationCommodity derivatives$21 $53 Other current assets102Table of ContentsDerivatives Designated as Fair Value Accounting HedgesIn 2012, we terminated interest rate swap agreements with a notional amount of $500 million that had been entered into as fair value accounting hedges onour 3.50 percent senior notes due in March 2016. There was a $20 million gain on the termination of the transactions, which has been accounted for as anadjustment to our long-term debt balance. The gain is being amortized over the remaining life of the 3.50 percent senior notes, which reduces our interestexpense. The interest rate swaps had no accounting hedge ineffectiveness.The following table summarizes the pretax effect of derivative instruments designated as accounting hedges of fair value in our consolidated statements ofincome in 2012: Gain (Loss)(In millions)Income Statement Location 2012Derivative Interest rateNet interest and other financial income (costs) $1Hedged Item Long-term debtNet interest and other financial income (costs) $(1)Derivatives not Designated as Accounting HedgesDerivatives that are not designated as accounting hedges may include commodity derivatives used to hedge price risk on (1) inventories, (2) fixed price salesof refined products, (3) the acquisition of foreign-sourced crude oil and (4) the acquisition of ethanol for blending with refined products.The table below summarizes open commodity derivative contracts for crude oil and refined products as of December 31, 2014. Position Total Barrels(In thousands)Crude oil(a) Exchange-tradedLong 15,678Exchange-tradedShort (25,257)Refined Products(b) Exchange-tradedLong 2,948Exchange-tradedShort (3,804)(a ) 97 percent of these contracts expire in the first quarter of 2015.(b) 100 percent of these contracts expire in the first quarter of 2015.The following table summarizes the effect of all commodity derivative instruments in our consolidated statements of income:(In millions)Gain (Loss)Income Statement Location2014 2013 2012Sales and other operating revenues$37 $12 $8Cost of revenues456 (180) 65Total$493 $(168) $73103Table of Contents20.DebtOur outstanding borrowings at December 31, 2014 and 2013 consisted of the following: December 31,(In millions)2014 2013Marathon Petroleum Corporation: Revolving credit agreement due 2017$— $—Term loan agreement due 2019700 —3.500% senior notes due March 1, 2016750 7505.125% senior notes due March 1, 20211,000 1,0003.625% senior notes due September 15, 2024750 —6.500% senior notes due March 1, 20411,250 1,2504.750% senior notes due September 15, 2044800 —5.000% senior notes due September 15, 2054400 —Consolidated subsidiaries: Capital lease obligations due 2015-2028372 395MPLX Operations LLC bank revolving credit agreement due 2017— —MPLX bank revolving credit facility due 2019385 —MPLX term loan facility due 2019250 —Trade receivables securitization facility due 2016— —Total6,657 3,395Unamortized discount(26) (10)Fair value adjustments(a)6 11Amounts due within one year(27) (23)Total long-term debt due after one year$6,610 $3,373(a) See Note 19 for information on interest rate swaps.The following table shows five years of scheduled debt payments. (In millions) 2015$27201677720172820183020191,362MPC Revolving Credit Agreement – We have a $2.5 billion unsecured revolving credit agreement (“Credit Agreement”) in place with a maturity date ofSeptember 14, 2017. The Credit Agreement includes letter of credit issuing capacity of up to $2.0 billion and swingline loan capacity of up to $100 million.We may increase our borrowing capacity under the Credit Agreement by up to an additional $500 million, subject to certain conditions including theconsent of the lenders whose commitments would be increased. In addition, the maturity date may be extended for up to two additional one-year periodssubject to the approval of lenders holding greater than 50 percent of the commitments then outstanding, provided that the commitments of any non-consenting lenders will be terminated on the then-effective maturity date.Borrowings under the Credit Agreement bear interest at either the Adjusted LIBO Rate (as defined in the Credit Agreement) plus a margin or the AlternateBase Rate (as defined in the Credit Agreement) plus a margin. We are charged various fees and expenses in connection with the Credit Agreement, includingadministrative agent fees, commitment fees on the unused portion of our borrowing capacity and fees related to issued and outstanding letters of credit. Theapplicable interest rates and certain of the fees fluctuate based on the credit ratings in effect from time to time on our long-term debt.104Table of ContentsThe Credit Agreement contains certain representations and warranties, affirmative and restrictive covenants and events of default that we consider to be usualand customary for arrangements of this type, including a financial covenant that requires us to maintain a ratio of Consolidated Net Debt (as defined in theCredit Agreement) to Total Capitalization (as defined in the Credit Agreement) of no greater than 0.65 to 1.00 as of the last day of each fiscal quarter. Othercovenants, among other things, restrict our ability to incur debt, create liens on our assets or enter into transactions with affiliates. As of December 31, 2014,we were in compliance with the covenants contained in the Credit Agreement.There were no borrowings or letters of credit outstanding at December 31, 2014.MPC Term Loan Agreement – On August 26, 2014, we entered into a $700 million five-year senior unsecured term loan credit agreement (the “Term LoanAgreement”) with a syndicate of lenders to fund a portion of the purchase price for the acquisition of Hess’ Retail Operations and Related Assets. The TermLoan Agreement matures on September 24, 2019 and may be prepaid at any time without premium or penalty. We are obligated to pay certain customary feesunder the Term Loan Agreement, including an annual administrative fee.Amounts outstanding under the Term Loan Agreement bear interest at either of the following rates at our election (i) the sum of the Adjusted LIBO Rate (asdefined in the Term Loan Agreement), plus a margin ranging between 0.875 percent to 1.75 percent, depending on our credit ratings, or (ii) the sum of theBase Rate (as defined in the Term Loan Agreement), plus a margin ranging between zero percent to 0.75 percent, depending on our credit ratings. Theborrowings under this facility during 2014 were at an average interest rate of 1.3 percent.The Term Loan Agreement contains representation and warranties, covenants and events of default that are substantially similar to those contained in theMPC revolving credit agreement, including a financial covenant, which requires us to maintain, as of the last day of each fiscal quarter, a ratio ofConsolidated Net Debt to Total Capitalization (as defined in the Term Loan Agreement) of no greater than 0.65 to 1.00. As of December 31, 2014, we were incompliance with the covenants contained in the Credit Agreement.Senior Notes – On September 5, 2014, we completed a public offering of $1.95 billion aggregate principal amount of senior unsecured notes (the “SeniorNotes”), consisting of $750 million aggregate principal amount of our Senior Notes due 2024, $800 million aggregate principal amount of our Senior Notesdue 2044 and $400 million aggregate principal amount of our Senior Notes due 2054. The net proceeds from the offering of the Senior Notes wereapproximately $1.92 billion, after deducting underwriting discounts and estimated offering expenses. The net proceeds were used to fund a portion of thepurchase price for the acquisition of Hess’ Retail Operations and Related Assets. Interest on each series of Senior Notes is payable semi-annually in arrears onMarch 15 and September 15 of each year, commencing on March 15, 2015.The Senior Notes are unsecured and unsubordinated obligations of ours and rank equally with all our other existing and future unsecured and unsubordinatedindebtedness.MPLX Credit Agreement – On November 20, 2014, MPLX entered into a credit agreement with a syndicate of lenders (“MPLX Credit Agreement”), whichprovides for a five-year $1 billion bank revolving credit facility and a $250 million term loan facility. The maturity date on both facilities is November 20,2019.The bank revolving credit facility includes letter of credit issuing capacity of up to $250 million and swingline loan capacity of up to $100 million. Theborrowing capacity under the MPLX Credit Agreement may be increased by up to an additional $500 million, subject to certain conditions, including theconsent of the lenders whose commitments would increase. In addition, the maturity date may be extended up to two additional one-year periods subject tothe approval of lenders holding the majority of the commitments then outstanding, provided that the commitments of any non-consenting lenders will beterminated on the original maturity date.The term loan facility was drawn in full on November 20, 2014. The maturity date for the term loan facility may be extended for up to two additional one-year periods subject to the consent of the lenders holding a majority of the outstanding term loan borrowings, provided that the portion of the term loanborrowings held by any non-consenting lenders will continue to be due and payable on the original maturity date. The borrowings under this facility during2014 were at an average interest rate of 1.4 percent.105Table of ContentsBorrowings under the MPLX Credit Agreement bear interest at either the Adjusted LIBO Rate or the Alternate Base Rate (as defined in the MPLX CreditAgreement) plus a specified margin. MPLX is charged various fees and expenses in connection with the agreement, including administrative agent fees,commitment fees on the unused portion of the bank revolving credit facility and fees with respect to issued and outstanding letters of credit. The applicableinterest rates and certain of the fees fluctuate based on the credit ratings in effect from time to time on MPLX’s long-term debt.The MPLX Credit Agreement includes certain representations and warranties, affirmative and restrictive covenants and events of default that we consider tobe usual and customary for an agreement of this type. The MPLX Credit Agreement includes a financial covenant that requires MPLX to maintain a ratio ofConsolidated Total Debt as of the end of each fiscal quarter to Consolidated EBITDA (both as defined in the MPLX Credit Agreement) for the prior four fiscalquarters of no greater than 5.0 to 1.0 (or 5.5 to 1.0 for up to two fiscal quarters following certain acquisitions). Consolidated EBITDA is subject toadjustments for certain acquisitions completed and capital projects undertaken during the relevant period. Other covenants restrict MPLX from incurringdebt, creating liens on its assets and entering into transactions with affiliates. As of December 31, 2014, MPLX was in compliance with the covenantscontained in the MPLX Credit Agreement.In connection with entering into this new credit agreement, MPLX terminated its previously existing $500 million five-year MPLX Operations LLC bankrevolving credit agreement, dated as of September 14, 2012. During 2014, MPLX borrowed $280 million under the MPLX Operations LLC bank revolvingcredit agreement, at an average interest rate of 1.5 percent, per annum, and repaid all of these borrowings.During 2014, MPLX borrowed $630 million under the new revolving credit agreement, at an average interest rate of 1.4 percent, per annum, and repaid $245million of these borrowings. At December 31, 2014, MPLX had $385 million of borrowings and no letters of credit outstanding under the MPLX CreditAgreement, resulting in total unused loan availability of $615 million, or 61.5 percent of the borrowing capacity.Trade receivables securitization facility – On December 18, 2013, we entered into a three-year, $1.3 billion trade receivables securitization facility with agroup of financial institutions that act as committed purchasers, conduit purchasers, letter of credit issuers and managing agents under the facility. Thefacility is evidenced by a Receivables Purchase Agreement and a Second Amended and Restated Receivables Sale Agreement and replaces the previouslyexisting accounts receivable facility that was set to expire on June 30, 2014.The facility consists of one of our wholly-owned subsidiaries, Marathon Petroleum Company LP (“MPC LP”), selling or contributing on an on-going basis allof its trade receivables (including trade receivables acquired from Marathon Petroleum Trading Canada LLC, a wholly-owned subsidiary of MPC LP),together with all related security and interests in the proceeds thereof, without recourse, to another wholly-owned, bankruptcy-remote special purposesubsidiary, MPC Trade Receivables Company LLC (“TRC”), in exchange for a combination of cash, equity or a subordinated note issued by TRC to MPCLP. TRC, in turn, has the ability to finance its purchase of the receivables from MPC LP by selling undivided ownership interests in qualifying tradereceivables, together with all related security and interests in the proceeds thereof, without recourse, to the purchasing group in exchange for cash proceeds.The facility also provides for the issuance of letters of credit of up to an initial amount of $1.25 billion, provided that the aggregate credit exposure of thepurchasing group is limited to no more than $1.3 billion at any one time.To the extent that TRC retains an ownership interest in the receivables it has purchased or received from MPC LP, such interest will be included in ourconsolidated financial statements solely as a result of the consolidation of the financial statements of TRC with those of MPC. The receivables sold orcontributed to TRC are available first and foremost to satisfy claims of the creditors of TRC and are not available to satisfy the claims of creditors of MPC.TRC has granted a security interest in all of its assets to the purchasing group to secure its obligations under the Receivables Purchase Agreement.Proceeds from the sale of undivided percentage ownership interests in qualifying receivables under the facility will be reflected as debt on our consolidatedbalance sheet. We will remain responsible for servicing the receivables sold to the purchasing group. TRC pays floating-rate interest charges and usage feeson amounts outstanding under the facility, if any, and certain other fees related to the administration of the facility and letters of credit that are issued andoutstanding under the facility.106Table of ContentsThe Receivables Purchase Agreement and Second Amended and Restated Receivables Sale Agreement include representations and covenants that weconsider usual and customary for arrangements of this type. Trade receivables are subject to customary criteria, limits and reserves before being deemed toqualify for sale by TRC pursuant to the facility. In addition, further purchases of qualified trade receivables under the facility are subject to termination, andTRC may be subject to default fees, upon the occurrence of certain amortization events that are included in the Receivables Purchase Agreement, which weconsider to be usual and customary for arrangements of this type. At December 31, 2014, we were in compliance with the covenants contained in theReceivables Purchase Agreement.As of December 31, 2014, eligible trade receivables supported borrowings of $1.28 billion. There were no borrowings outstanding at December 31, 2014. Asof January 31, 2015, eligible trade receivables supported borrowings of $700 million.21.Supplemental Cash Flow Information (In millions)2014 2013 2012Net cash provided by operating activities included: Interest paid (net of amounts capitalized)$166 $161 $67Net income taxes paid to taxing authorities(a)1,362 1,099 1,211Non-cash investing and financing activities: Capital lease obligations increase$— $61 $62Property, plant and equipment sold4 43 —Property, plant and equipment acquired4 — —Preferred equity interest received in contract settlement(b)— — 45Preferred equity interest dividend received in-kind— — 1Acquisition: Contingent consideration(c)— 600 —Payable to seller(c)— 6 —Intangible asset acquired— — 3Liability assumed— — 2(a) U.S. and most state income taxes, if incurred, were paid by Marathon Oil for periods prior to the Spinoff. The amount for 2012 includes payments of $181 million for 2011return period income taxes made to Marathon Oil under our tax sharing agreement, and in return we received an equal amount of tax credits. See Note 26.(b) See Note 6.(c) See Note 5.The consolidated statements of cash flows exclude changes to the consolidated balance sheets that did not affect cash. The following is a reconciliation ofadditions to property, plant and equipment to total capital expenditures:(In millions)2014 2013 2012Additions to property, plant and equipment per consolidated statements of cash flows$1,480 $1,206 $1,369Non-cash additions to property, plant and equipment4 — —Asset retirement expenditures(a)2 — —Increase (decrease) in capital accruals95 73 (117)Total capital expenditures before acquisitions1,581 1,279 1,252Acquisitions(b)2,744 1,386 180Total capital expenditures$4,325 $2,665 $1,432(a) Included in All other, net – Operating activities on the consolidated statements of cash flows.(a) The 2014 acquisitions include the acquisition of Hess’ Retail Operations and Related Assets. The 2013 acquisitions include the acquisition of the Galveston Bay Refinery andRelated Assets. The acquisition numbers above include property, plant and equipment and intangibles. See Note 5.107Table of Contents22. Accumulated Other Comprehensive LossThe following table shows the changes in accumulated other comprehensive loss by component. Amounts in parentheses indicate debits.(In millions)PensionBenefits Other Benefits Gain on CashFlow Hedge Workers Compensation TotalBalance as of December 31, 2012(432) (36) 4 — $(464)Other comprehensive income before reclassifications198 (13) — 4 189Amounts reclassified from accumulated othercomprehensive loss: Amortization – prior service credit(a)(45) (4) — — (49) – actuarial loss(a)66 3 — — 69 – settlement loss(a)95 — — — 95Other(b)— — — (1) (1)Tax effect(43) — — — (43)Other comprehensive income (loss)271 (14) — 3 260Balance as of December 31, 2013$(161) $(50) $4 $3 $(204)(In millions)PensionBenefits Other Benefits Gain on CashFlow Hedge Workers Compensation TotalBalance as of December 31, 2013$(161) $(50) $4 $3 $(204)Other comprehensive income (loss) before reclassifications(119) (53) — 2 (170)Amounts reclassified from accumulated othercomprehensive loss: Amortization – prior service credit(a)(46) (4) — — (50) – actuarial loss(a)51 2 — — 53 – settlement loss(a)96 — — — 96Other(b)— — — (1) (1)Tax effect(38) 1 — — (37)Other comprehensive income (loss)(56) (54) — 1 (109)Balance as of December 31, 2014$(217) $(104) $4 $4 $(313)(a) These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. See Note 23.(b) This amount was reclassified out of accumulated other comprehensive loss and is included in selling, general and administrative expenses on the consolidated statements ofincome.23.Defined Benefit Pension and Other Postretirement PlansWe have noncontributory defined benefit pension plans covering substantially all employees. Benefits under these plans have been based primarily on age,years of service and final average pensionable earnings. The years of service component of this formula was frozen as of December 31, 2009. Benefits forservice beginning January 1, 2010 are based on a cash balance formula with an annual percentage of eligible pay credited based upon age and years ofservice. Eligible Speedway employees accrue benefits under a defined contribution plan for service years beginning January 1, 2010.We also have other postretirement benefits covering most employees. Health care benefits are provided through comprehensive hospital, surgical and majormedical benefit provisions subject to various cost-sharing features. Retiree life insurance benefits are provided to a closed group of retirees. Otherpostretirement benefits are not funded in advance.108Table of ContentsDue to the Galveston Bay Refinery and Related Assets acquisition during 2013, we remeasured certain pension and retiree medical plans resulting in a $122million decrease in liabilities. The decrease in liabilities was due to a 0.2 percent increase in discount rates and an increase in pension plan asset value fromDecember 31, 2012 to the remeasurement date. The net periodic benefit costs for 2013 reflect these remeasurements. The purchase accounting for theGalveston Bay Refinery and Related Assets acquisition includes a $43 million liability related to retiree medical assumed at the acquisition date. See Note 5.Obligations and funded status – The accumulated benefit obligation for all defined benefit pension plans was $2,009 million and $1,912 million as ofDecember 31, 2014 and 2013.The following summarizes our defined benefit pension plans that have accumulated benefit obligations in excess of plan assets. December 31,(In millions)2014 2013Projected benefit obligations$2,075 $1,927Accumulated benefit obligations2,009 1,912Fair value of plan assets1,744 1,800The following summarizes the projected benefit obligations and funded status for our defined benefit pension and other postretirement plans: Pension Benefits Other Benefits(In millions)2014 2013 2014 2013Change in benefit obligations: Benefit obligations at January 1$1,927 $2,192 $687 $591Service cost88 93 27 25Interest cost74 73 33 26Actuarial (gain) loss257 (183) 86 17Benefits paid(271) (248) (23) (20)Other(a)— — 2 48Benefit obligations at December 312,075 1,927 812 687Change in plan assets: Fair value of plan assets at January 11,800 1,478 — —Actual return on plan assets175 241 — —Employer contributions40 329 — —Benefits paid from plan assets(271) (248) — —Fair value of plan assets at December 311,744 1,800 — —Funded status of plans at December 31$(331) $(127) $(812) $(687)Amounts recognized in the consolidated balance sheets: Current liabilities$(17) $(18) $(27) $(25)Noncurrent liabilities(314) (109) (785) (662)Accrued benefit cost$(331) $(127) $(812) $(687)Pretax amounts recognized in accumulated other comprehensiveloss:(b) Net loss$710 $668 $191 $107Prior service credit(369) (415) (26) (30)(a) Includes adjustments related to Hess’ Retail Operations and Related Assets acquisition in 2014. For 2013, it includes adjustments related to plan amendments and adjustmentsrelated to the Galveston Bay Refinery and Related Assets acquisition.(b) Amounts exclude those related to LOOP and Explorer Pipeline, equity method investees with defined benefit pension and postretirement plans for which net losses of $18 millionand $1 million were recorded in accumulated other comprehensive loss in 2014, reflecting our ownership share.109Table of ContentsComponents of net periodic benefit cost and other comprehensive loss – The following summarizes the net periodic benefit costs and the amountsrecognized as other comprehensive loss for our defined benefit pension and other postretirement plans. Pension Benefits Other Benefits(In millions)2014 2013 2012 2014 2013 2012Components of net periodic benefit cost: Service cost$88 $93 $66 $27 $25 $20Interest cost74 73 94 33 26 24Expected return on plan assets(107) (107) (104) — — —Amortization – prior service cost (credit)(46) (45) (18) (4) (4) (2) – actuarial loss51 66 93 2 3 2 – settlement loss96 95 125 — — —Net periodic benefit cost(a)$156 $175 $256 $58 $50 $44Other changes in plan assets and benefit obligations recognized in othercomprehensive loss (pretax): Actuarial (gain) loss$188 $(317) $46 $86 $17 $53Prior service cost (credit)(b)— — (520) — 4 (40)Amortization of actuarial loss(147) (161) (218) (2) (3) (2)Amortization of prior service cost46 45 18 4 4 2Other— — — — — —Total recognized in other comprehensive loss$87 $(433) $(674) $88 $22 $13Total recognized in net periodic benefit cost and othercomprehensive loss$243 $(258) $(418) $146 $72 $57(a) Net periodic benefit cost reflects a calculated market-related value of plan assets which recognizes changes in fair value over three years.(b) Includes adjustments due to plan amendments approved in 2013 and adjustments due to changes made to the defined pension plans and the post-65 medical plan coverageeffective January 1, 2013.Lump sum payments to employees retiring in 2014, 2013 and 2012 exceeded the plan’s total service and interest costs expected for those years. Settlementlosses are required to be recorded when lump sum payments exceed total service and interest costs. As a result, pension settlement expenses were recorded in2014, 2013 and 2012 related to our cumulative lump sum payments made during those years.The estimated net gain/loss and prior service credit for our defined benefit pension plans that will be amortized from accumulated other comprehensive lossinto net periodic benefit cost in 2015 are $51 million and $46 million. The estimated net loss and prior service credit for our other defined benefitpostretirement plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in 2015 is $9 million and $4 million,respectively.110Table of ContentsPlan assumptions – The following summarizes the assumptions used to determine the benefit obligations at December 31, and net periodic benefit cost forthe defined benefit pension and other postretirement plans for 2014, 2013 and 2012. Pension Benefits Other Benefits 2014 2013 2012 2014 2013 2012Weighted-average assumptions used to determine benefit obligation: Discount rate3.65% 4.30% 3.45% 4.15% 4.95% 4.05%Rate of compensation increase3.70% 3.70% 5.00% 3.70% 3.70% 5.00%Weighted-average assumptions used to determine net periodic benefit cost: Discount rate4.05% 3.88% 4.06% 4.95% 4.11% 4.54%Expected long-term return on plan assets(a)7.00% 7.50% 7.50% —% —% —%Rate of compensation increase3.70% 5.00% 5.00% 3.70% 5.00% 5.00%(a) Effective January 1, 2015, the expected long-term rate of return on plan assets is 6.75 percent due to a continuation of a change in our primary plan investment strategy, whichbegan January 1, 2014.Expected long-term return on plan assetsThe overall expected long-term return on plan assets assumption is determined based on an asset rate-of-return modeling tool developed by a third-partyinvestment group. The tool utilizes underlying assumptions based on actual returns by asset category and inflation and takes into account our assetallocation to derive an expected long-term rate of return on those assets. Capital market assumptions reflect the long-term capital market outlook. Theassumptions for equity and fixed income investments are developed using a building-block approach, reflecting observable inflation information and interestrate information available in the fixed income markets. Long-term assumptions for other asset categories are based on historical results, current marketcharacteristics and the professional judgment of our internal and external investment teams.Assumed health care cost trendThe following summarizes the assumed health care cost trend rates. December 31, 2014 2013 2012Health care cost trend rate assumed for the following year: Medical Pre-658.00% 8.00% 8.00%Prescription drugs7.00% 7.00% 7.00%Rate to which the cost trend rate is assumed to decline (the ultimate trend rate): Medical Pre-655.00% 5.00% 5.00%Prescription drugs5.00% 5.00% 5.00%Year that the rate reaches the ultimate trend rate: Medical Pre-652021 2020 2020Prescription drugs2021 2018 2018Effective 2013, as a result of changes in the post-65 medical plan coverage of the Marathon Petroleum Health Plan and the Marathon Petroleum RetireeHealth Plan, increases are the lower of the trend rate or four percent.111Table of ContentsAssumed health care cost trend rates have a significant effect on the amounts reported for defined benefit retiree health care plans. A one percentage pointchange in assumed health care cost trend rates would have the following effects: 1-Percentage- 1-Percentage-(In millions)Point Increase Point DecreaseEffect on total of service and interest cost components$5 $(4)Effect on other postretirement benefit obligations45 (39)Plan investment policies and strategiesThe investment policies for our pension plan assets reflect the funded status of the plans and expectations regarding our future ability to make furthercontributions. Long-term investment goals are to: (1) manage the assets in accordance with the legal requirements of all applicable laws; (2) diversify planinvestments across asset classes to achieve an optimal balance between risk and return and between income and growth of assets through capitalappreciation; and (3) source benefit payments primarily through existing plan assets and anticipated future returns.The investment goals are implemented to manage the plans’ funded status volatility and minimize future cash contributions. The asset allocation strategywill change over time in response to changes primarily in funded status, which is dictated by current and anticipated market conditions, the independentactions of our investment committee, required cash flows to and from the plans and other factors deemed appropriate. Such changes in asset allocation areintended to allocate additional assets to the fixed income asset class should the funded status improve. The fixed income asset class shall be invested in sucha manner that its interest rate sensitivity correlates highly with that of the plans’ liabilities. Other asset classes are intended to provide additional return withassociated higher levels of risk. Investment performance and risk is measured and monitored on an ongoing basis through quarterly investment meetings andperiodic asset and liability studies. At December 31, 2014, the primary plan’s targeted asset allocation was 51 percent equity, private equity, real estate, andtimber securities and 49 percent fixed income securities.Fair value measurementsPlan assets are measured at fair value. The following provides a description of the valuation techniques employed for each major plan asset category atDecember 31, 2014 and 2013.Cash and cash equivalents – Cash and cash equivalents include a collective fund serving as the investment vehicle for the cash reserves and cash held bythird-party investment managers. The collective fund is valued at net asset value (“NAV”) on a scheduled basis using a cost approach, and is considered aLevel 2 asset. Cash and cash equivalents held by third-party investment managers are valued using a cost approach and are considered Level 2.Equity – Equity investments includes common stock, mutual and pooled funds. Common stock investments are valued using a market approach, which arepriced daily in active markets and are considered Level 1. Mutual and pooled equity funds are well diversified portfolios, representing a mix of strategies indomestic, international and emerging market strategies. Mutual funds are publicly registered, valued at NAV on a daily basis using a market approach and areconsidered Level 1 assets. Pooled funds are valued at NAV using a market approach and are considered Level 2 assets.Fixed Income – Fixed income investments include corporate bonds, U.S. dollar treasury bonds and municipal bonds. These securities are priced onobservable inputs using a combination of market, income and cost approaches. These securities are considered Level 2 assets. Fixed income also includes awell diversified bond portfolio structured as a pooled fund. This fund is valued at NAV on a daily basis using a combination of market, income and costapproaches. It is considered a Level 2 asset.Private Equity – Private equity investments include interests in limited partnerships which are valued using information provided by external managers foreach individual investment held in the fund. These holdings are considered Level 3.Real Estate – Real estate investments consist of interests in limited partnerships. These holdings are either appraised or valued using investment manager’sassessment of assets held. These holdings are considered Level 3.Other – Other investments include two limited liability companies (“LLCs”) with no public market. The LLCs were formed to acquire timberland in thenorthwest United States. These holdings are either appraised or valued using investment manager’s assessment of assets held. These holdings are consideredLevel 3.112Table of ContentsThe following tables present the fair values of our defined benefit pension plans’ assets, by level within the fair value hierarchy, as of December 31, 2014 and2013. December 31, 2014(In millions)Level 1 Level 2 Level 3 TotalCash and cash equivalents$— $29 $— $29Equity: Common stocks63 — — 63Mutual funds155 — — 155Pooled funds— 442 — 442Fixed income: Corporate— 554 — 554Government— 99 — 99Pooled funds— 254 — 254Private equity— — 66 66Real estate— — 57 57Other2 2 21 25Total investments, at fair value$220 $1,380 $144 $1,744 December 31, 2013(In millions)Level 1 Level 2 Level 3 TotalCash and cash equivalents$— $189 $— $189Equity: Common stocks69 — — 69Mutual funds217 — — 217Pooled funds— 590 — 590Fixed income: Corporate— 356 — 356Government— 22 — 22Pooled funds— 218 — 218Private equity— — 57 57Real estate— — 60 60Other2 — 20 22Total investments, at fair value$288 $1,375 $137 $1,800113Table of ContentsThe following is a reconciliation of the beginning and ending balances recorded for plan assets classified as Level 3 in the fair value hierarchy: 2014(In millions)Private Equity Real Estate Other TotalBeginning balance$57 $60 $20 $137Actual return on plan assets: Realized6 4 — 10Unrealized6 4 1 11Purchases10 5 — 15Sales(13) (16) — (29)Ending balance$66 $57 $21 $144 2013(In millions)PrivateEquity RealEstate Other TotalBeginning balance$56 $54 $17 $127Actual return on plan assets: Realized13 3 — 16Unrealized3 10 3 16Purchases7 5 — 12Sales(22) (12) — (34)Ending balance$57 $60 $20 $137Cash FlowsContributions to defined benefit plans – Our funding policy with respect to the funded pension plans is to contribute amounts necessary to satisfy minimumpension funding requirements, including requirements of the Pension Protection Act of 2006, plus such additional, discretionary, amounts from time to timeas determined appropriate by management. In 2014, we made pension contributions totaling $16 million. We have no required funding for 2015, but maymake voluntary contributions at our discretion. Cash contributions to be paid from our general assets for the unfunded pension and postretirement plans areestimated to be approximately $18 million and $27 million in 2015.Estimated future benefit payments – The following gross benefit payments, which reflect expected future service, as appropriate, are expected to be paid inthe years indicated.(In millions)Pension Benefits Other Benefits2015$179 $272016181 302017181 332018181 372019179 402020 through 2024810 236Contributions to defined contribution plans – We also contribute to several defined contribution plans for eligible employees. Contributions to these planstotaled $86 million, $76 million and $60 million in 2014, 2013 and 2012, respectively.114Table of ContentsMultiemployer Pension PlanWe contribute to one multiemployer defined benefit pension plan under the terms of a collective-bargaining agreement that covers some of our union-represented employees. The risks of participating in this multiemployer plan are different from single-employer plans in the following aspects:•Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.•If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participatingemployers.•If we choose to stop participating in the multiemployer plan, we may be required to pay that plan an amount based on the underfunded status ofthe plan, referred to as a withdrawal liability.Our participation in this plan for 2014, 2013 and 2012 is outlined in the table below. The “EIN” column provides the Employee Identification Number forthe plan. The most recent Pension Protection Act zone status available in 2014 and 2013 is for the plan’s year ended December 31, 2013 and December 31,2012, respectively. The zone status is based on information that we received from the plan and is certified by the plan’s actuary. Among other factors, plans inthe red zone are generally less than 65 percent funded. The “FIP/RP Status Pending/Implemented” column indicates a financial improvement plan or arehabilitation plan has been implemented. The last column lists the expiration date of the collective-bargaining agreement to which the plan is subject. Therehave been no significant changes that affect the comparability of 2014, 2013 and 2012 contributions. Our portion of the contributions does not make upmore than five percent of total contributions to the plan. Pension ProtectionAct Zone Status FIP/RP StatusPending/Implemented MPC Contributions (In millions) SurchargeImposed Expiration Date ofCollective –BargainingAgreementPension Fund EIN 2014 2013 2014 2013 2012 Central States, Southeastand Southwest AreasPension Plan(a) 36-6044243 Red Red Implemented $4 $3 $4 No January 31, 2019(a) This agreement has a minimum contribution requirement of $280 per week per employee for 2015. A total of 267 employees participated in the plan as of December 31, 2014.Multiemployer Health and Welfare PlanWe contribute to one multiemployer health and welfare plan that covers both active employees and retirees. Through the health and welfare plan employeesreceive medical, dental, vision, prescription and disability coverage. Our contributions to this plan totaled $6 million, $5 million and $5 million for 2014,2013 and 2012.24.Stock-Based Compensation PlansDescription of the PlansEffective April 26, 2012, our employees and non-employee directors became eligible to receive equity awards under the Marathon Petroleum Corporation2012 Incentive Compensation Plan (“MPC 2012 Plan”). The MPC 2012 Plan authorizes the Compensation Committee of our board of directors(“Committee”) to grant non-qualified or incentive stock options, stock appreciation rights, stock awards (including restricted stock and restricted stock unitawards), cash awards and performance awards to our employees and non-employee directors. Under the MPC 2012 Plan, no more than 25 million shares of ourcommon stock may be delivered and no more than 10 million shares of our common stock may be the subject of awards that are not stock options or stockappreciation rights. In the sole discretion of the Committee, 10 million shares of our common stock may be granted as incentive stock options. Shares issuedas a result of awards granted under these plans are funded through the issuance of new MPC common shares.Prior to April 26, 2012, our employees and non-employee directors were eligible to receive equity awards under the Marathon Petroleum Corporation 2011Second Amended and Restated Incentive Compensation Plan (“MPC 2011 Plan”).115Table of ContentsStock-based awards under the PlansWe expense all share-based payments to employees and non-employee directors based on the grant date fair value of the awards over the requisite serviceperiod, adjusted for estimated forfeitures.Stock Options – We grant stock options to certain officer and non-officer employees. All of the stock options granted in 2014 fell under the MPC 2012 Plan.Stock options awarded under the MPC 2011 Plan and the MPC 2012 Plan represent the right to purchase shares of our common stock at its fair market value,which is the closing price of MPC’s common stock on the date of grant. Stock options have a maximum term of ten years from the date they are granted, andvest over a requisite service period of three years. We use the Black Scholes option-pricing model to estimate the fair value of stock options granted, whichrequires the input of subjective assumptions.Stock Appreciation Rights (“SARs”) – SARs were granted under the Marathon Oil Corporation incentive compensation plan in effect prior to the Spinoff. NoSARs have been granted under the MPC 2011 Plan or the MPC 2012 Plan. Similar to stock options, SARs represent the right to receive a payment equal tothe excess of the fair market value of shares of MPC or Marathon Oil common stock on the date the right is exercised over the grant price. SARs have amaximum term of ten years from the date they are granted and generally vest over a requisite service period of three years. We use the Black Scholes option-pricing model to estimate the fair value of SARs granted, which requires the input of subjective assumptions. All outstanding SAR’s expired or wereexercised in 2014.Restricted Stock and Restricted Stock Units – We grant restricted stock and restricted stock units to employees and non-employee directors. In general,restricted stock and restricted stock units granted to employees vest over a requisite service period of three years. Restricted stock and restricted stock unitawards granted after 2011 to officers are subject to an additional one year holding period after the completion of the three-year requisite service period. Priorto vesting, restricted stock recipients who received grants prior to 2012 have the right to vote such stock and receive dividends at the same time regularshareholders are paid. Restricted stock recipients who received grants in 2012 and after have the right to vote such stock; however, dividends are accrued andwill be paid upon vesting. Restricted stock units granted to non-employee directors are considered to vest immediately at the time of the grant for accountingpurposes, as they are non-forfeitable, but are not issued until the director’s departure from the board of directors. Restricted stock unit recipients do not havethe right to vote such shares and receive dividend equivalents. The non-vested shares are not transferable and are held by our transfer agent. The fair values ofrestricted stock are equal to the market price of our common stock on the grant date.Performance Units – We grant performance unit awards to certain officer employees. The target value of all performance units is $1.00, with actual payout upto $2.00 per unit (up to 200% of target). Performance units issued under the MPC 2011 and MPC 2012 Plans have a 36-month requisite service period. Thepayout value of these awards will be determined by the relative ranking of the total shareholder return (“TSR”) of MPC common stock compared to the TSRof a select group of peer companies, as well as the Standard & Poor’s 500 Energy Index fund over an average of four measurement periods. These awards willbe settled 25 percent in MPC common stock and 75 percent in cash. The number of shares actually distributed will be determined by dividing 25 percent ofthe final payout by the closing price of MPC common stock on the day the Committee certifies the final TSR rankings, or the next trading day if thecertification is made outside of normal trading hours. The performance units paying out in cash are accounted for as liability awards and recorded at fair valuewith a mark-to-market adjustment made each quarter. The performance units that settle in shares are accounted for as equity awards.Total Stock-Based Compensation ExpenseThe following table reflects activity related to our stock-based compensation arrangements:(In millions)2014 2013 2012Stock-based compensation expense$40 $42 $35Tax benefit recognized on stock-based compensation expense15 15 13Cash received by MPC upon exercise of stock option awards26 48 108Tax benefit received for tax deductions for stock awards exercised19 18 16116Table of ContentsStock Option AwardsThe Black Scholes option-pricing model values used to value stock option awards granted were determined based on the following weighted averageassumptions: 2014 2013 2012Weighted average exercise price per share$85.02 $84.65 $42.02Expected life in years5.8 6.0 5.8Expected volatility36% 40% 47%Expected dividend yield1.9% 2.0% 2.6%Risk-free interest rate1.8% 1.0% 1.1%Weighted average grant date fair value of stock option awards granted$25.37 $27.13 $14.45The expected life of stock options granted is based on historical data and represents the period of time that options granted are expected to be held prior toexercise. The 2014 assumption for expected volatility of our stock price reflects a weighting of 50 percent of our common stock implied volatility and 50percent of MPC’s common stock historical volatility. Prior to 2014, we used a weighting of our common stock implied volatility and the historical volatilityof a selected group of peers. Expected dividend yield is based on annualized dividends at the date of grant. The risk-free interest rate for periods within theexpected life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant.The following is a summary of our common stock option activity in 2014: Number ofof Shares(a) WeightedAverageExercise Price Weighted AverageRemaining ContractualTerms (in years) Aggregate IntrinsicValue (in millions)Outstanding at December 31, 20135,147,837 $40.08 Granted446,310 85.02 Exercised(821,948) 33.04 Forfeited, canceled or expired(20,761) 49.67 Outstanding at December 31, 20144,751,438 45.47 Vested and expected to vest at December 31, 20144,746,653 45.43 5.7 $213Exercisable at December 31, 20143,795,031 38.30 5.0 197(a) Includes an immaterial number of stock appreciation rights.The intrinsic value of options exercised by MPC employees during 2014, 2013 and 2012 was $48 million, $60 million and $37 million, respectively.As of December 31, 2014, unrecognized compensation cost related to stock option awards was $5 million, which is expected to be recognized over aweighted average period of 1.1 years.117Table of ContentsRestricted Stock AwardsThe following is a summary of restricted stock award activity of our common stock in 2014: Shares of Restricted Stock (“RS”) Restricted Stock Units (“RSU”) Number of Shares Weighted Average GrantDate Fair Value Number of Units Weighted Average GrantDate Fair ValueOutstanding at December 31, 2013624,122 $61.11 385,079 $33.96Granted251,351 87.64 26,725 85.90RS’s Vested/RSU’s Issued(330,971) 55.36 (578) 51.99Forfeited(29,429) 70.29 (133) 76.10Outstanding at December 31, 2014515,073 77.23 411,093 37.30Of the 411,093 restricted stock units outstanding, 409,805 are vested and have a weighted average grant date fair value of $37.16. These vested but unissuedunits are held by our non-employee directors, are non-forfeitable and are issuable upon the director’s departure from our board of directors.The following is a summary of the values related to restricted stock and restricted stock unit awards held by MPC employees and non-employee directors: Restricted Stock Restricted Stock Units Intrinsic Value of AwardsVested During the Period(in millions) Weighted AverageGrant Date Fair Value ofAwards Granted Duringthe Period Intrinsic Value of AwardsVested During the Period(in millions) Weighted AverageGrant Date Fair Value ofAwards Granted Duringthe Period2014$28 $87.64 $— $85.90201320 87.06 — 73.4820125 43.11 — 44.38As of December 31, 2014, unrecognized compensation cost related to restricted stock awards was $26 million, which is expected to be recognized over aweighted average period of 1.1 years. There was no material unrecognized compensation cost related to restricted stock unit awards.Performance Unit AwardsThe following table presents a summary of the 2014 activity for performance unit awards to be settled in shares: Number of Units Weighted AverageGrant Date Fair ValueOutstanding at December 31, 20133,822,500 $0.90Granted2,033,700 0.85Canceled(64,375) 0.87Outstanding at December 31, 20145,791,825 0.88The number of shares that would be issued upon target vesting, using the closing price of our common stock on December 31, 2014 would be 64,168 shares.As of December 31, 2014, unrecognized compensation cost related to equity-classified performance unit awards was $2 million, which is expected to berecognized over a weighted average period of 1.5 years.118Table of ContentsPerformance units paying out in units have a grant date fair value calculated using a Monte Carlo valuation model, which requires the input of subjectiveassumptions. The following table provides a summary of these assumptions: 2014 2013 2012Risk-free interest rate0.63% 0.35% 0.41%Look-back period2.84 years 2.84 years 2.84 yearsExpected volatility38.51% 41.67% 56.06%Grant date fair value of performance units granted$0.85 $0.95 $0.80The risk-free interest rate for the remaining performance period as of the grant date is based on the U.S. Treasury yield curve in effect at the time of the grant.The look-back period reflects the remaining performance period at the grant date. The assumption for the expected volatility of our stock price reflects theaverage MPC common stock historical volatility.MPLX AwardsOur wholly-owned subsidiary and the general partner of MPLX, MPLX GP LLC (“MXGP”), maintains a unit-based compensation plan for officers, directorsand employees (including any other individual who may be considered an “employee” under a Registration Statement on Form S-8 or any successor form) ofMXGP.The MPLX 2012 Incentive Compensation Plan (“MPLX Plan”) permits various types of equity awards including but not limited to grants of restrictedphantom units and performance units. Awards granted under the MPLX Plan will be settled with MPLX units. Compensation expense for these awards wasnot material to our consolidated financial statements for the years ended December 31, 2014, 2013 and 2012.25.LeasesWe lease a wide variety of facilities and equipment under operating leases, including land and building space, office equipment, storage facilities andtransportation equipment. Most long-term leases include renewal options and, in certain leases, purchase options. Future minimum commitments as ofDecember 31, 2014, for capital lease obligations and for operating lease obligations having initial or remaining non-cancelable lease terms in excess of oneyear are as follows:(In millions)CapitalLeaseObligations OperatingLeaseObligations2015$52 $249201651 209201750 150201849 136201945 114Later years300 468Total minimum lease payments547 $1,326Less imputed interest costs176 Present value of net minimum lease payments$371 Operating lease rental expense was:(In millions)2014 2013 2012Rental expense$256 $213 $139 119Table of Contents26.Commitments and ContingenciesWe are the subject of, or a party to, a number of pending or threatened legal actions, contingencies and commitments involving a variety of matters,including laws and regulations relating to the environment. Some of these matters are discussed below, including those resulting from the acquisition ofHess’ Retail Operations and Related Assets. For matters for which we have not recorded an accrued liability, we are unable to estimate a range of possible lossbecause the issues involved have not been fully developed through pleadings and discovery. However, the ultimate resolution of some of thesecontingencies could, individually or in the aggregate, be material.Environmental matters – We are subject to federal, state, local and foreign laws and regulations relating to the environment. These laws generally provide forcontrol of pollutants released into the environment and require responsible parties to undertake remediation of hazardous waste disposal sites and certainother locations including presently or formerly owned or operated retail marketing sites. Penalties may be imposed for noncompliance.At December 31, 2014 and 2013, accrued liabilities for remediation totaled $185 million and $123 million. It is not presently possible to estimate theultimate amount of all remediation costs that might be incurred or the penalties if any that may be imposed. Receivables for recoverable costs from certainstates, under programs to assist companies in clean-up efforts related to underground storage tanks at presently or formerly owned or operated retail marketingsites, were $67 million and $51 million at December 31, 2014 and 2013, respectively.We are involved in a number of environmental enforcement matters arising in the ordinary course of business. While the outcome and impact on us cannot bepredicted with certainty, management believes the resolution of these environmental matters will not, individually or collectively, have a material adverseeffect on our consolidated results of operations, financial position or cash flows.Lawsuits – In May 2007, the Kentucky attorney general filed a lawsuit against us and Marathon Oil in state court in Franklin County, Kentucky for allegedviolations of Kentucky’s emergency pricing and consumer protection laws following Hurricanes Katrina and Rita in 2005. The lawsuit alleges that weovercharged customers by $89 million during September and October 2005. The complaint seeks disgorgement of these sums, as well as penalties, underKentucky’s emergency pricing and consumer protection laws. We are vigorously defending this litigation. We believe that this is the first lawsuit for damagesand injunctive relief under the Kentucky emergency pricing laws to progress this far and it contains many novel issues. In May 2011, the Kentucky attorneygeneral amended his complaint to include a request for immediate injunctive relief as well as unspecified damages and penalties related to our wholesalegasoline pricing in April and May 2011 under statewide price controls that were activated by the Kentucky governor on April 26, 2011 and which have sinceexpired. The court denied the attorney general’s request for immediate injunctive relief, and the remainder of the 2011 claims likely will be resolved alongwith those dating from 2005. If the lawsuit is resolved unfavorably in its entirety, it could materially impact our consolidated results of operations, financialposition or cash flows. However, management does not believe the ultimate resolution of this litigation will have a material adverse effect.We are a defendant in a number of other lawsuits and other proceedings arising in the ordinary course of business. While the ultimate outcome and impact tous cannot be predicted with certainty, we believe that the resolution of these other lawsuits and proceedings will not have a material adverse effect on ourconsolidated financial position, results of operations or cash flows.Guarantees – We have provided certain guarantees, direct and indirect, of the indebtedness of other companies. Under the terms of most of these guaranteearrangements, we would be required to perform should the guaranteed party fail to fulfill its obligations under the specified arrangements. In addition to thesefinancial guarantees, we also have various performance guarantees related to specific agreements.Guarantees related to indebtedness of equity method investees – We hold interests in an offshore oil port, LOOP, and a crude oil pipeline system, LOCAPLLC. Both LOOP and LOCAP LLC have secured various financings by assigning certain of their rights under throughput and deficiency agreements that theyhave entered into with us. Under the agreements, we are required to advance funds if the investees are unable to service their debt. Any such advances areconsidered prepayments of future transportation charges. The duration of the agreements follow the terms of the underlying debt obligations, some of whichextend through 2037. Our maximum potential undiscounted payments under these agreements for the debt principal totaled $172 million as of December 31,2014.We hold an interest in a refined products pipeline through our investment in Centennial, and have guaranteed the payment of Centennial’s principal, interestand prepayment costs, if applicable, under a Master Shelf Agreement, which is scheduled to expire in 2024. The guarantee arose in order for Centennial toobtain adequate financing. Our maximum potential undiscounted payments under this agreement for debt principal totaled $38 million as of December 31,2014.120Table of ContentsMarathon Oil indemnifications – In conjunction with the Spinoff, we have entered into arrangements with Marathon Oil providing indemnities andguarantees with recorded values of $2 million as of December 31, 2014, which consist of unrecognized tax benefits related to MPC, its consolidatedsubsidiaries and the RM&T Business operations prior to the Spinoff which are not already reflected in the unrecognized tax benefits described in Note 13,and other contingent liabilities Marathon Oil may incur related to taxes. Furthermore, the separation and distribution agreement and other agreements withMarathon Oil to effect the Spinoff provide for cross-indemnities between Marathon Oil and us. In general, Marathon Oil is required to indemnify us for anyliabilities relating to Marathon Oil’s historical oil and gas exploration and production operations, oil sands mining operations and integrated gas operations,and we are required to indemnify Marathon Oil for any liabilities relating to Marathon Oil’s historical refining, marketing and transportation operations. Theterms of these indemnifications are indefinite and the amounts are not capped.Other guarantees – We have entered into other guarantees with maximum potential undiscounted payments totaling $81 million as of December 31, 2014,which primarily consist of a commitment to contribute cash to an equity method investee for certain catastrophic events, up to $50 million per event, in lieuof procuring insurance coverage and leases of assets containing general lease indemnities and guaranteed residual values.General guarantees associated with dispositions – Over the years, we have sold various assets in the normal course of our business. Certain of the relatedagreements contain performance and general guarantees, including guarantees regarding inaccuracies in representations, warranties, covenants andagreements, and environmental and general indemnifications that require us to perform upon the occurrence of a triggering event or condition. Theseguarantees and indemnifications are part of the normal course of selling assets. We are typically not able to calculate the maximum potential amount of futurepayments that could be made under such contractual provisions because of the variability inherent in the guarantees and indemnities. Most often, the natureof the guarantees and indemnities is such that there is no appropriate method for quantifying the exposure because the underlying triggering event has littleor no past experience upon which a reasonable prediction of the outcome can be based.Contractual commitments – At both December 31, 2014 and 2013, our contractual commitments to acquire property, plant and equipment and advancefunds to equity method investees totaled $1.7 billion. The contractual commitments at December 31, 2014 includes $520 million of contingentconsideration associated with the acquisition of the Galveston Bay Refinery and Related Assets, $703 million for contributions to North Dakota Pipeline and$185 million for contributions to the SAX project. The contractual commitments at December 31, 2013 included the $700 million contingent considerationassociated with the acquisition of the Galveston Bay Refinery and Related Assets and $892 million for contributions to North Dakota Pipeline. See Note 5.27.Subsequent EventOn February 12, 2015, MPLX completed an initial underwritten public offering of $500 million aggregate principal amount of four percent unsecured seniornotes due February 15, 2025 (the “MPLX Senior Notes”). The MPLX Senior Notes were offered at a price to the public of 99.64 percent of par. The netproceeds of this offering were used to repay the amounts outstanding under the MPLX Credit Agreement, as well as for general partnership purposes.121Table of ContentsSelected Quarterly Financial Data (Unaudited) 2014 2013(In millions, except per share data)1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr.Revenues$23,285 $26,844 $25,438 $22,250 $23,330 $25,677 $26,256 $24,897Income from operations361 1,369 1,062 1,259 1,156 960 301 1,008Net income207 864 679 805 730 599 173 631Net income attributable to MPC199 855 672 798 725 593 168 626 Net income attributable to MPC per share: Basic$0.68 $2.97 $2.38 $2.88 $2.19 $1.84 $0.54 $2.09Diluted0.67 2.95 2.36 2.86 2.17 1.83 0.54 2.07Dividends paid per share0.42 0.42 0.50 0.50 0.35 0.35 0.42 0.42122Table of ContentsSupplementary Statistics (Unaudited) (In millions)2014 2013 2012Income from Operations by segment Refining & Marketing$3,609 $3,206 $5,098Speedway544 375 310Pipeline Transportation(a)280 210 216Items not allocated to segments: Corporate and other unallocated items(a)(286) (271) (336) Minnesota Assets sale settlement gain— — 183 Pension settlement expenses(96) (95) (124)Income from operations$4,051 $3,425 $5,347Capital Expenditures and Investments(b)(c) Refining & Marketing$1,104 $2,094 $705Speedway2,981 296 340Pipeline Transportation543 234 211Corporate and Other(d)110 165 204Total$4,738 $2,789 $1,460(a) Included in the Pipeline Transportation segment for 2014, 2013 and 2012 are $19 million, $20 million and $4 million of corporate overhead expenses attributable to MPLX,which were included in items not allocated to segments prior to MPLX’s October 31, 2012 initial public offering. Corporate overhead expenses are not currently allocated toother segments.(b) Capital expenditures include changes in capital accruals.(c) Includes $2.71 billion in 2014 for the acquisition of Hess’ Retail Operations and Related Assets and $1.36 billion in 2013 for the acquisition of the Galveston Bay Refinery andRelated Assets. See Note 5 to the audited consolidated financial statements.(d) Includes capitalized interest of $27 million, $28 million and $101 million for 2014, 2013 and 2012, respectively.123Table of ContentsSupplementary Statistics (Unaudited) 2014 2013 2012MPC Consolidated Refined Product Sales Volumes (thousands of barrels per day)(a)(b)2,138 2,086 1,618Refining & Marketing Operating Statistics(b) Refining & Marketing refined product sales volume (thousands of barrels per day)(c)2,125 2,075 1,599Refining & Marketing gross margin (dollars per barrel)(d)$15.05 $13.24 $17.85Crude oil capacity utilization percent(e)95 96 100Refinery throughputs (thousands of barrels per day):(f) Crude oil refined1,622 1,589 1,195Other charge and blendstocks184 213 168Total1,806 1,802 1,363Sour crude oil throughput percent52 53 53WTI-priced crude oil throughput percent19 21 28Refined product yields (thousands of barrels per day):(f) Gasoline869 921 738Distillates580 572 433Propane35 37 26Feedstocks and special products276 221 109Heavy fuel oil25 31 18Asphalt54 54 62Total1,839 1,836 1,386Refinery direct operating costs (dollars per barrel):(g) Planned turnaround and major maintenance$1.80 $1.20 $1.00Depreciation and amortization1.41 1.36 1.44Other manufacturing(h)4.86 4.14 3.15Total$8.07 $6.70 $5.59Refining & Marketing Operating Statistics By Region – Gulf Coast(b) Refinery throughputs (thousands of barrels per day):(i) Crude oil refined991 964 Other charge and blendstocks182 195 Total1,173 1,159 Sour crude oil throughput percent64 65 WTI-priced crude oil throughput percent3 7 Refined product yields (thousands of barrels per day):(i) Gasoline508 551 Distillates368 365 Propane23 23 Feedstocks and special products274 215 Heavy fuel oil13 19 Asphalt13 13 Total1,199 1,186 Refinery direct operating costs (dollars per barrel):(g) Planned turnaround and major maintenance$1.82 $1.00 Depreciation and amortization1.15 1.09 Other manufacturing(h)4.73 3.98 Total$7.70 $6.07 124Table of ContentsSupplementary Statistics (Unaudited) 2014 2013 2012Refining & Marketing Operating Statistics By Region – Midwest Refinery throughputs (thousands of barrels per day):(i) Crude oil refined631 625 Other charge and blendstocks45 54 Total676 679 Sour crude oil throughput percent33 35 WTI-priced crude oil throughput percent44 42 Refined product yields (thousands of barrels per day):(i) Gasoline361 371 Distillates212 207 Propane13 14 Feedstocks and special products43 41 Heavy fuel oil13 12 Asphalt41 41 Total683 686 Refinery direct operating costs (dollars per barrel):(g) Planned turnaround and major maintenance$1.66 $1.47 Depreciation and amortization1.78 1.74 Other manufacturing(h)4.76 4.21 Total$8.20 $7.42 Speedway Operating Statistics(j) Convenience stores at period-end2,746 1,478 1,464Gasoline and distillate sales (millions of gallons)3,942 3,146 3,027Gasoline & distillate gross margin (dollars per gallon)(k)$0.1775 $0.1441 $0.1318Merchandise sales (in millions)$3,611 $3,135 $3,058Merchandise gross margin (in millions)$975 $825 $795Merchandise gross margin percent27.0 % 26.3% 26.0 %Same store gasoline sales volume (period over period)(0.7)% 0.5% (0.8)%Same store merchandise sales (period over period)(l)5.0 % 4.3% 7.0 %Pipeline Transportation Operating Statistics Pipeline throughputs (thousands of barrels per day):(m) Crude oil pipelines1,241 1,293 1,191Refined products pipelines878 911 980Total2,119 2,204 2,171(a) Total average daily volumes of refined product sales to wholesale, branded and retail (Speedway segment) customers.(b) Includes the impact of the Galveston Bay Refinery and Related Assets beginning on the February 1, 2013 acquisition date.(c) Includes intersegment sales.(d) Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs. Starting in the fourth quarter of 2013, direct operating costs are no longerincluded in the Refining & Marketing gross margin and the gross margin is calculated based on total refinery throughput. All prior periods presented have been recalculated toreflect a consistent approach.(e) Based on calendar day capacity, which is an annual average that includes downtime for planned maintenance and other normal operating activities.(f) Excludes inter-refinery volumes of 43 thousand barrels per day (“mbpd”), 36 mbpd and 25 mbpd for 2014, 2013 and 2012, respectively.(g) Per barrel of total refinery throughputs.(h) Includes utilities, labor, routine maintenance and other operating costs.(i) Includes inter-refinery transfer volumes.(j) Includes the impact of Hess’ Retail Operations and Related Assets beginning on the September 30, 2014 acquisition date.(k) The price paid by consumers less the cost of refined products, including transportation, consumer excise taxes and bankcard processing fees, divided by gasoline and distillatesales volume.(l) Excludes cigarettes.(m) On owned common-carrier pipelines, excluding equity method investments.125Table of ContentsItem 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureNone.Item 9A. Controls and ProceduresDisclosure Controls and ProceduresAn evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e)under the Securities Exchange Act of 1934, as amended) was carried out under the supervision and with the participation of our management, including ourchief executive officer and chief financial officer. Based upon that evaluation, the chief executive officer and chief financial officer concluded that the designand operation of these disclosure controls and procedures were effective as of December 31, 2014, the end of the period covered by this Annual Report onForm 10-K.Internal Control over Financial Reporting and Changes in Internal Control over Financial ReportingSee Item 8. Financial Statements and Supplementary Data – Management’s Report on Internal Control over Financial Reporting and – Report of IndependentRegistered Public Accounting Firm, which reports are incorporated herein by reference.During the quarter ended December 31, 2014, we acquired Hess’ Retail Operations and Related Assets. The scope of our assessment of the effectiveness ofdisclosure controls and procedures does not include Hess’ Retail Operations and Related Assets. There have been no other changes in our internal controlover financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.Item 9B. Other InformationOn February 24, 2015, the Compensation Committee of our Board of Directors (the “Committee”) approved and authorized a retirement lump sum benefitsupplement, as further described below (the “Service Benefit”), to the respective formulaic benefit to be received under the Marathon Petroleum ExcessBenefit Plan (the “Plan”) by Marathon Petroleum Corporation named executive officers, Gary R. Heminger and Anthony R. Kenney, should they individuallyelect to continue service as our employee beyond the age of 62. The Plan was amended and restated by the Committee on October 29, 2014, and suchamended and restated Plan is filed as an exhibit to this Annual Report on Form 10-K (the “Revised Plan”). While the Revised Plan permits the Committee, ona discretionary basis, to extend the Service Benefit to individual officers of Marathon Petroleum Corporation, the amendment and restatement of the Plan byitself had no material impact on the defined benefit plan compensation of our named executive officers prior to the Committee’s subsequent action onFebruary 24, 2015.The Plan is an unfunded, non-qualified retirement plan for the benefit of a select group of management, including our named executive officers and highlycompensated employees. The Plan generally provides benefits that participants would have otherwise received under the tax-qualified Marathon PetroleumRetirement Plan (the “Retirement Plan”) were it not for Internal Revenue Code limitations. Due to the structure of the legacy final average pay benefitformula within the Retirement Plan, the age-related lump sum benefit conversion factors used to calculate lump sum benefits under the Plan result in a year-to-year decrease in the lump sum benefit for participants generally beginning on or after the age of 59. As a result, even if participants want to continue theiremployment with us after they reach age 59, their lump sum benefit may decline year-to-year.The Service Benefit will not correct for any age-related erosion of benefit occurring prior to age 62 but, for those officers selected by the Committee in its solediscretion, the Service Benefit will correct for the age-related erosion of benefit from age 62 until such officer’s actual retirement date or date of death asdescribed herein. If an officer to whom the Service Benefit has been extended by the Committee retires or dies (1) after reaching age 62 and (2) while inservice as our active employee, such officer will be eligible to receive a retirement lump sum benefit supplement calculated as follows:a.If the lump sum interest rate upon such officer reaching the age of 62 used to calculate the retirement lump sum benefit is less than or equal to thelump sum interest rate in effect on such officer’s actual retirement date or date of death, the retirement lump sum benefit supplement shall be thedifference between the legacy final average pay-based lump sum benefit he or she would have been eligible to receive using the age 62 lump sumconversion factor based on the lump sum interest rate in effect on the actual retirement date or date of death and the legacy final average pay-basedlump sum benefit he or she is eligible to receive using the lump sum conversion factor for the actual age at retirement or death based on the lumpsum interest rate in effect on the actual retirement date or date of death; or126Table of Contentsb.If the lump sum interest rate upon such officer reaching the age of 62 used to calculate the retirement lump sum benefit is greater than the lump suminterest rate in effect on such officer’s actual retirement date or date of death, the retirement lump sum benefit supplement shall be the differencebetween the legacy final average pay-based lump sum benefit he or she would have been eligible to receive using the lump sum conversion factorand lump sum interest rate in effect at age 62 and the legacy final average pay-based lump sum benefit he or she is eligible to receive using the lumpsum conversion factor and lump sum interest rate in effect on the actual retirement date or date of death.As designed by the Committee, the Service Benefit does not compensate for unfavorable fluctuations in the lump sum interest rate and is in fact structured toprevent payment of a retirement lump sum benefit supplement greater than intended within a favorable interest rate environment; the Service Benefit isdesigned to correct only for the benefit erosion an officer may experience for continued service should he or she elect to remain our employee beyond the ageof 62.The foregoing description of the Plan, the Revised Plan and the Service Benefit are summary in nature and subject to, and qualified in their entirety by, thefull text of the Revised Plan, a copy of which is attached hereto as Exhibit 10.14 and is incorporated herein by reference.127Table of ContentsPART IIIItem 10. Directors, Executive Officers and Corporate GovernanceInformation concerning our directors required by this item is incorporated by reference to the material appearing under the sub-heading “Proposal No. 1 –Election of Class I Directors” located under the heading “Proposals of the Board” in our Proxy Statement for the 2015 Annual Meeting of Shareholders.Information concerning our executive officers is included in Part I, Item 1 of this Annual Report on Form 10-K.Our board of directors has established the Audit Committee and determined our “Audit Committee Financial Experts.” The related information required bythis item is incorporated by reference to the material appearing under the sub-heading “Audit Committee Financial Expert” located under the heading “TheBoard of Directors and Corporate Governance” in our Proxy Statement for the 2015 Annual Meeting of Shareholders.We have adopted a Code of Ethics for Senior Financial Officers, which applies to our Chief Executive Officer, Chief Financial Officer, Vice President andController, Treasurer and other persons performing similar functions. It is available on our website at http://ir.marathonpetroleum.com by selecting“Corporate Governance” and clicking on “Code of Ethics for Senior Financial Officers.”Section 16(a) Beneficial Ownership Reporting ComplianceInformation regarding compliance with Section 16(a) of the Securities Exchange Act of 1934 is set forth under the caption “Section 16(a) BeneficialOwnership Reporting Compliance” in our Proxy Statement for the 2015 Annual Meeting of Shareholders, which is incorporated herein by reference.Item 11. Executive CompensationInformation required by this item is incorporated by reference to the material appearing under the heading “Executive Compensation;” under the sub-headings “Compensation Committee” and “Compensation Committee Interlocks and Insider Participation” located under the heading “The Board ofDirectors and Corporate Governance;” under the heading “Compensation of Directors;” and under the heading “Compensation Committee Report” in ourProxy Statement for the 2015 Annual Meeting of Shareholders.128Table of ContentsItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersInformation concerning security ownership of certain beneficial owners and management required by this item is incorporated by reference to the materialappearing under the headings “Security Ownership of Certain Beneficial Owners” and “Security Ownership of Directors and Executive Officers” in our ProxyStatement for the 2015 Annual Meeting of Shareholders.Securities Authorized for Issuance Under Equity Compensation PlansThe following table provides information as of December 31, 2014 with respect to shares of our common stock that may be issued under the MPC 2012 Planand the MPC 2011 Plan: Plan categoryNumber of securities to beissued upon exercise ofoutstanding options,warrants and rights(a) Weighted-averageexercise price ofoutstanding options,warrants and rights(b) Number of securitiesremaining available forfuture issuance underequity compensationplans(c)Equity compensation plans approved by stockholders5,290,867$45.47 23,510,876Equity compensation plan not approved by stockholders— — —Total5,290,867 N/A 23,510,876 (a) Includes the following:1)4,751,438 stock options granted pursuant to the MPC 2012 Plan and the MPC 2011 Plan and not forfeited, cancelled or expired as of December 31, 2014.2)411,093 restricted stock units granted pursuant to the MPC 2012 Plan and the MPC 2011 Plan for shares unissued and not forfeited, cancelled or expired as of December 31,2014.3)128,336 shares as the maximum potential number of shares that could be issued in settlement of performance units outstanding as of December 31, 2014 pursuant to theMPC 2012 Plan and the MPC 2011 Plan, based on the closing price of our common stock on December 31, 2014 of $90.26 per share. The number of shares reported forthis award vehicle may overstate dilution. See Note 24 for more information on performance unit awards granted under the MPC 2012 Plan and the MPC 2011 Plan.In addition to the awards reported above, 515,073 shares of restricted stock have been issued pursuant to the MPC 2012 Plan and the MPC 2011 Plan and were outstanding as ofDecember 31, 2014.(b) Restricted stock, restricted stock units and performance units are not taken into account in the weighted-average exercise price as such awards have no exercise price.(c) Reflects the shares available for issuance pursuant to the MPC 2012 Plan. All granting authority under the MPC 2011 Plan was revoked following the approval of the MPC 2012Plan by shareholders on April 25, 2012. No more than 9,357,450 of the shares reported in this column may be issued for awards other than stock options or stock appreciationrights. The number of shares reported in this column assumes 83,226 as the maximum potential number of shares that could be issued pursuant to the MPC 2012 Plan insettlement of performance units outstanding as of December 31, 2014, based on the closing price of our common stock on December 31, 2014, of $90.26 per share. The numberof shares assumed for this award vehicle may understate the number of shares available for issuance pursuant to the MPC 2012 Plan. See Note 24 for more information onperformance unit awards granted pursuant to the MPC 2012 Plan. Shares related to grants made pursuant to the MPC 2012 Plan that are forfeited, cancelled or expire unexercisedbecome immediately available for issuance under the MPC 2012 Plan.Item 13. Certain Relationships and Related Transactions, and Director IndependenceInformation required by this item is incorporated by reference to the material appearing under the heading “Certain Relationships and Related PersonTransactions,” and under the sub-heading “Board and Committee Independence” under the heading “The Board of Directors and Corporate Governance” inour Proxy Statement for the 2015 Annual Meeting of Shareholders.Item 14. Principal Accountant Fees and ServicesInformation required by this item is incorporated by reference to the material appearing under the heading “Independent Registered Public AccountingFirm’s Fees, Services and Independence” in our Proxy Statement for the 2015 Annual Meeting of Shareholders.129Table of ContentsPART IVItem 15. Exhibits and Financial Statement SchedulesA. Documents Filed as Part of the Report1. Financial Statements (see Part II, Item 8. of this Annual Report on Form 10-K regarding financial statements)2. Financial Statement SchedulesFinancial statement schedules required under SEC rules but not included in this Annual Report on Form 10-K are omitted because they are notapplicable or the required information is contained in the consolidated financial statements or notes thereto.3. Exhibits: ExhibitNumber Exhibit Description Incorporated by Reference FiledHerewith FurnishedHerewithForm Exhibit FilingDate SECFile No. 2 Plan of Acquisition, Reorganization, Arrangement,Liquidation or Succession 2.1 † Separation and Distribution Agreement, dated as of May25, 2011, among Marathon Oil Corporation, Marathon OilCompany and Marathon Petroleum Corporation 10 2.1 5/26/2011 001-35054 2.2 † Purchase and Sale Agreement, dated as of October 7, 2012,by and among BP Products North America Inc. and BPPipelines (North America) Inc., as the Sellers and MarathonPetroleum Company LP, as the Buyer 8-K 2.1 10/9/2012 001-35054 2.3 † Purchase Agreement by and between Speedway LLC andHess Corporation, dated as of May 21, 2014 8-K 2.1 5/27/2014 001-35054 2.4 † Amendment No. 1 effective as of September 30, 2014, tothe Purchase Agreement by and between Speedway LLCand Hess Corporation, dated as of May 21, 2014 8-K 2.2 10/6/2014 001-35054 3 Articles of Incorporation and Bylaws 3.1 Restated Certificate of Incorporation of MarathonPetroleum Corporation 8-K 3.1 6/22/2011 001-35054 3.2 Amended and Restated Bylaws of Marathon PetroleumCorporation 10-Q 3.2 8/8/2012 001-35054 4 Instruments Defining the Rights of Security Holders,Including Indentures 4.1 Indenture dated as of February 1, 2011 between MarathonPetroleum Corporation and The Bank of New York MellonTrust Company, N.A., as Trustee 10 4.1 5/26/2011 001-35054 4.2 Form of the terms of the 3 1/2% Senior Notes due 2016,5 1/8% Senior Notes due 2021 and 6 1/2% Senior Notesdue 2041 of Marathon Petroleum Corporation (includingform of note) 10 4.2 5/26/2011 001-35054 4.3 First Supplemental Indenture, dated as of September 5,2014, by and between Marathon Petroleum Corporationand The Bank of New York Mellon Trust Company, N.A.,as trustee 10-Q 4.1 11/3/2014 001-35054 10 Material Contracts 10.1 Tax Sharing Agreement dated as of May 25, 2011 by andamong Marathon Oil Corporation, Marathon PetroleumCorporation and MPC Investment LLC 10 10.1 5/26/2011 001-35054 10.2 Employee Matters Agreement dated as of May 25, 2011 byand between Marathon Oil Corporation and MarathonPetroleum Corporation 10 10.2 5/26/2011 001-35054 10.3 Amendment to Employee Matters Agreement, dated as ofJune 30, 2011 by and between Marathon Oil Corporationand Marathon Petroleum Corporation 8-K 10.1 7/1/2011 001-35054 130Table of ContentsExhibitNumber Exhibit Description Incorporated by Reference FiledHerewith FurnishedHerewithForm Exhibit FilingDate SECFile No. 10.4 Receivables Purchase Agreement, dated as of December 18,2013, by and among MPC Trade Receivables Company,LLC, Marathon Petroleum Company LP, The Bank ofTokyo-Mitsubishi UFJ, Ltd., New York Branch, asadministrative agent and sole lead arranger, certaincommitted purchasers and conduit purchasers that areparties thereto from time to time and certain other partiesthereto from time to time as managing agents and letter ofcredit issuers. 8-K 10.1 12/23/2013 001-35054 10.5 Second Amended and Restated Receivables SaleAgreement, dated as of December 18, 2013, by andbetween Marathon Petroleum Company LP and MPC TradeReceivables Company LLC 8-K 10.2 12/23/2013 001-35054 10.6 Revolving Credit Agreement, dated as of September 14,2012, by and among MPC, as borrower, JPMorgan ChaseBank, N.A., as administrative agent, each of J.P. MorganSecurities LLC, Citigroup Global Markets Inc., MerrillLynch, Pierce, Fenner & Smith Incorporated, MorganStanley Senior Funding, Inc., RBS Securities Inc. and UBSSecurities LLC, as joint lead arrangers and jointbookrunners, Citigroup Global Markets Inc., as syndicationagent, each of Bank of America, N.A., Morgan StanleySenior Funding, Inc., The Royal Bank of Scotland PLC andUSB AG, Stamford Branch, as documentation agents, andseveral other commercial lending institutions that are partiesthereto. 8-K 10.1 9/20/2012 001-35054 10.7 First Amendment, dated December 20, 2012, to theRevolving Credit Agreement, dated as of September 14,2012, by and among MPC, as borrower, the commercialfinancial institutions that are lending parties thereto, andJPMorgan Chase Bank, N.A., as administrative agent. 8-K 10.1 12/20/2012 001-35054 10.8 Credit Agreement, dated as of November 20, 2014, amongMPLX LP, as borrower, Citibank, N.A., as administrativeagent, each of Citigroup Global Markets Inc., Wells FargoSecurities, LLC, Barclays Bank PLC, J.P. Morgan SecuritiesLLC, Merrill Lynch, Pierce, Fenner & Smith Incorporateand RBS Securities Inc., as joint lead arrangers and jointbookrunners, Wells Fargo Bank, N.A., as syndication agent,and each of Bank of America, N.A., Barclays Bank PLC,JPMorgan Chase Bank, N.A., and The Royal Bank ofScotland PLC, as documentation agents, and the otherlenders and issuing banks that are parties thereto. 8-K 10.1 11/26/2014 001-35054 10.9 Contribution, Conveyance and Assumption Agreement,dated as of October 31, 2012, among MPLX LP, MPLX GPLLC, MPLX Operations LLC, MPC Investment LLC,MPLX Logistics Holdings LLC, Marathon Pipe Line LLC,MPL Investment LLC, MPLX Pipe Line Holdings LP andOhio River Pipe Line LLC. 8-K 10.1 11/6/2012 001-35054 10.10 Omnibus Agreement, dated as of October 31, 2012, amongMarathon Petroleum Corporation, Marathon PetroleumCompany LP, MPL Investment LLC, MPLX OperationsLLC, MPLX Terminal and Storage LLC, MPLX Pipe LineHoldings LP, Marathon Pipe Line LLC, Ohio River PipeLine LLC, MPLX LP and MPLX GP LLC. 8-K 10.2 11/6/2012 001-35054 10.11 * Marathon Petroleum Corporation Second Amended andRestated 2011 Incentive Compensation Plan S-3 4.3 12/7/2011 333-175286 10.12 * Marathon Petroleum Corporation Policy for Recoupment ofAnnual Cash Bonus Amounts 10-K 10.1 2/29/2012 001-35054 10.13 * Marathon Petroleum Corporation Deferred CompensationPlan for Non-Employee Directors 10-K 10.13 2/28/2013 001-35054 10.14 * Marathon Petroleum Amended and Restated Excess BenefitPlan X 10.15 * Marathon Petroleum Amended and Restated DeferredCompensation Plan 10-K 10.13 2/29/2012 001-35054 131Table of ContentsExhibitNumber Exhibit Description Incorporated by Reference FiledHerewith FurnishedHerewithForm Exhibit FilingDate SECFile No. 10.16 * Marathon Petroleum Corporation Executive Tax, Estate,and Financial Planning Program 10-K 10.14 2/29/2012 001-35054 10.17 * Speedway Excess Benefit Plan 10-K 10.15 2/29/2012 001-35054 10.18 * Speedway Deferred Compensation Plan 10-K 10.16 2/29/2012 001-35054 10.19 * Form of Marathon Petroleum Corporation Amended andRestated 2011 Incentive Compensation Plan – Section 16Officer Restricted Stock Award Agreement (3 year pro ratavesting) 8-K 10.4 7/7/2011 001-35054 10.20 * Form of Marathon Petroleum Corporation Amended andRestated 2011 Incentive Compensation Plan – Section 16Officer Restricted Stock Award Agreement (3 year cliffvesting) 8-K 10.5 7/7/2011 001-35054 10.21 * Form of Marathon Petroleum Corporation Amended andRestated 2011 Incentive Compensation Plan NonqualifiedStock Option Award Agreement – Section 16 Officer 8-K 10.6 7/7/2011 001-35054 10.22 * Form of Marathon Petroleum Corporation 2011 IncentiveCompensation Plan Supplemental Restricted Stock AwardAgreement – Section 16 Officer 8-K 10.1 12/7/2011 001-35054 10.23 * Form of Marathon Petroleum Corporation 2011 IncentiveCompensation Plan Supplemental Nonqualified StockOption Award Agreement – Section 16 Officer 8-K 10.2 12/7/2011 001-35054 10.24 * Form of Marathon Petroleum Corporation 2011 IncentiveCompensation Plan Supplemental Restricted Stock UnitAward Agreement – Non-Employee Director 10-K 10.22 2/29/2012 001-35054 10.25 * Form of Marathon Petroleum Corporation Amended andRestated 2011 Incentive Compensation Plan – PerformanceUnit Award Agreement 10-K 10.23 2/29/2012 001-35054 10.26 * Marathon Petroleum Corporation Amended and RestatedExecutive Change in Control Severance Benefits Plan 10-K 10.26 2/28/2013 001-35054 10.27 * ` Form of Marathon Petroleum Corporation PerformanceUnit Award Agreement – 2012-2014 Performance Cycle 10-Q 10.3 5/9/2012 001-35054 10.28 * Form of Marathon Petroleum Corporation Restricted StockAward Agreement – Officer 10-Q 10.4 5/9/2012 001-35054 10.29 * Form of Marathon Petroleum Corporation NonqualifiedStock Option Award Agreement – Officer 10-Q 10.5 5/9/2012 001-35054 10.30 * Marathon Petroleum Corporation 2012 IncentiveCompensation Plan S-8 4.3 4/27/2012 333-181007 10.31 * Amended and Restated Marathon Petroleum Annual CashBonus Program X 10.32 * MPC Non-Employee Director Phantom Unit Award Policy 10-K 10.32 2/28/2013 001-35054 10.33 * Form of Marathon Petroleum Corporation PerformanceUnit Award Agreement – 2013-2015 Performance Cycle 10-Q 10.1 5/9/2013 001-35054 10.34 * Form of Marathon Petroleum Corporation Restricted StockAward Agreement – Officer 10-Q 10.2 5/9/2013 001-35054 10.35 * Form of Marathon Petroleum Corporation NonqualifiedStock Option Award Agreement – Officer 10-Q 10.3 5/9/2013 001-35054 10.36 * MPLX LP – Form of MPC Officer Phantom Unit AwardAgreement 10-Q 10.4 5/9/2013 001-35054 10.37 * MPLX LP – Form of MPC Officer Performance UnitAward Agreement – 2013-2015 Performance Cycle 10-Q 10.5 5/9/2013 001-35054 10.38 * Amendment to Certain Outstanding MPC Restricted StockAward Agreements and Performance Unit AwardAgreements of Garry L. Peiffer 10-K 10.38 2/28/2014 001-35054 132Table of ContentsExhibitNumber Exhibit Description Incorporated by Reference FiledHerewith FurnishedHerewithForm Exhibit FilingDate SECFile No. 10.39* Form of Marathon Petroleum Corporation PerformanceUnit Award Agreement – 2014-2016 Performance Cycle 10-Q 10.1 5/5/2014 001-35054 10.4 Term Loan Agreement, dated August 26, 2014, by andamong Marathon Petroleum Corporation, as borrower, TheRoyal Bank of Scotland PLC, as administrative agent, eachof RBS Securities Inc., The Bank of Tokyo-Mitsubishi UFJ,Ltd. Barclays Bank PLC, Citigroup Global Markets Inc.,and Morgan Stanley Senior Funding, Inc., as joint leadarrangers and joint bookrunners. The Bank of Tokyo-Mitsubishi UFJ, Ltd., as syndication agent, each of BarclaysBank PLC, Citigroup Global Markets Inc. and MorganStanley Senior Funding, Inc., as documentation agents, andseveral other commercial lending institutions that are partiesthereto 8-K 10.1 8/29/2014 001-35054 12.1 Computation of Ratio of Earnings to Fixed Charges X 14.1 Code of Ethics for Senior Financial Officers 10-K 14.1 2/29/2012 001-35054 21.1 List of Subsidiaries X 23.1 Consent of Independent Registered Public Accounting Firm X 24.1 Power of Attorney of Directors and Officers of MarathonPetroleum Corporation X 31.1 Certification of President and Chief Executive Officerpursuant to Rule 13(a)-14 and 15(d)-14 under theSecurities Exchange Act of 1934. X 31.2 Certification of Senior Vice President and Chief FinancialOfficer pursuant to Rule 13(a)-14 and 15(d)-14 under theSecurities Exchange Act of 1934. X 32.1 Certification of President and Chief Executive Officerpursuant to 18 U.S.C. Section 1350. X32.2 Certification of Senior Vice President and Chief FinancialOfficer pursuant to 18 U.S.C. Section 1350. X101.INS XBRL Instance Document. X 101.SCH XBRL Taxonomy Extension Schema. X 101.PRE XBRL Taxonomy Extension Presentation Linkbase. X 101.CAL XBRL Taxonomy Extension Calculation Linkbase. X 101.DEF XBRL Taxonomy Extension Definition Linkbase. X 101.LAB XBRL Taxonomy Extension Label Linkbase. X †The exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be provided to the Securities and Exchange Commission upon request.*Indicates management contract or compensatory plan, contract or arrangement in which one or more directors or executive officers of the Registrant may be participants.133Table of ContentsSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized. February 27, 2015 MARATHON PETROLEUM CORPORATION By: /s/ John J. Quaid John J. Quaid Vice President and Controller134Table of ContentsPursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on February 27, 2015 onbehalf of the registrant and in the capacities indicated. Signature Title /s/ Gary R. Heminger President and Chief Executive Officer and Director(Principal Executive Officer)Gary R. Heminger /s/ Donald C. Templin Senior Vice President and Chief Financial Officer(Principal Financial Officer)Donald C. Templin /s/ John J. Quaid Vice President and Controller(Principal Accounting Officer)John J. Quaid * DirectorEvan Bayh * DirectorDavid A. Daberko * DirectorSteven A. Davis * DirectorWilliam L. Davis * DirectorDonna A. James * DirectorCharles R. Lee * DirectorJames E. Rohr * DirectorSeth E. Schofield * John W. Snow Director * DirectorJohn P. Surma * Chairman of the Board and DirectorThomas J. Usher 135Table of Contents* The undersigned, by signing his name hereto, does sign and execute this report pursuant to the Power of Attorney executed by the above-named directorsand officers of the registrant, which is being filed herewith on behalf of such directors and officers. By: /s/ Gary R. Heminger February 27, 2015 Gary R. Heminger Attorney-in-Fact 136Exhibit 10.14MARATHON PETROLEUMEXCESS BENEFIT PLANAmended and Restated As OfOctober 29, 2014EXCESS BENEFIT PLANARTICLE I. PurposeThe Marathon Petroleum Excess Benefit Plan was initially established on February 5, 1976 as the Marathon OilCompany Excess Benefit Plan, and has been amended from time to time. Its stated purpose is to compensateemployees for the loss of benefits that occur due to limitations placed by the Internal Revenue Code on benefits payableand contributions permitted under qualified retirement plans. These limitations include Code section 415, Code section401(k), Code section 401(m), Code section 402(g), and Code section 401(a)(17).On January 1, 1998, Marathon Oil Company and Ashland Petroleum Inc. entered into a joint venture, called MarathonAshland Petroleum LLC (“MAPLLC”). As a result of the formation of the joint venture and the transfer of a significantnumber of Marathon employees to MAPLLC, on April 1, 1998 a portion of the Marathon Oil Company Retirement Planwas spun off to create the Marathon Ashland Petroleum LLC Retirement Plan (“Retirement Plan”). Consistent with thataction and pursuant to the agreement of the parties, Excess Retirement Benefits and Excess Thrift Benefits under theMarathon Oil Company Excess Benefit Plan for employees who transferred to MAPLLC during the 1998 calendar yearwere spun-off to create the Marathon Ashland Petroleum LLC Excess Benefit Plan (the “MAPLLC Excess Benefit Plan”).Any elections in effect under the Marathon Oil Company Excess Benefit Plan (such as beneficiary designations or GroupI employee elections, etc.) continued to apply under the MAPLLC Excess Benefit Plan, until and unless changed. Theterms and conditions of this MAPLLC Excess Benefit Plan were substantially the same as the terms and conditions ofthe Marathon Oil Company Excess Benefit Plan.Effective September 1, 2005, MAPLLC changed its name to Marathon Petroleum Company LLC (“MPC” or “theCompany”). Therefore, “MAP” has been replaced with “MPC” throughout this document, and all references to MPC areone and the same with respect to previous references to MAP. The name change from MAP to MPC does not affect anybenefits under this Plan.Effective January 1, 2006, this Excess Benefit Plan was restated to incorporate prior amendments.Effective January 1, 2009, this Excess Benefit Plan was restated and shall apply only to benefits that are not fullydistributed as of such date, including both 409A Accruals and Grandfathered Accruals. With respect to the 409AAccruals, the Excess Benefit Plan, as amended and restated, is intended to conform to the requirements of Code section409A, and, in all respects, shall be administered and construed in accordance with such requirements. With respect tothe Grandfathered Accruals, the Excess Benefit Plan, as amended and restated, does not represent a materialenhancement of the benefits or rights available under the Excess Benefit Plan on October 3, 2004.1Effective July 1, 2011, this Excess Benefit Plan was restated primarily to provide for the allocation of liabilities betweenthis Excess Benefit Plan and the corresponding excess benefit plan for employees of Marathon Oil Company inaccordance with the Employee Matters Agreement and to provide the Select Group Members with a Final Average Payadjustment for their Legacy Retirement Benefit which corresponds to the Final Average Pay adjustment made availableunder the Retirement Plan to other Members for their Legacy Retirement Benefit. October 1, 2010, Marathon PetroleumCompany LLC changed its name to Marathon Petroleum Company LP and is reflected as such throughout thisdocument. (References to “MPC” include MAPLLC, Marathon Petroleum Company LLC, and Marathon PetroleumCompany LP).Effective October 29, 2014, the Excess Benefit Plan was amended and restated, primarily to provide for an additionalExcess Retirement Benefit, as set forth in Section 3.1(d) herein. This additional Excess Retirement Benefit is intended toaddress the decrease in the lump sum benefit that may occur as a result of age-related conversion factors used tocalculate the lump sum Legacy Retirement Benefit, to provide a retention incentive for certain individuals whosecontinued service is deemed to be in the best interests of the Company, as determined by the Compensation Committeeof the Marathon Petroleum Corporation Board of Directors.This Excess Benefit Plan sets forth the terms and conditions under which benefits designed to compensate Employeesfor the aforementioned losses of benefits shall be accrued and paid by the applicable Employer. Capitalized terms,unless otherwise specified, are defined under the Retirement Plan, the Thrift Plan, and the Employee MattersAgreement. In addition, for purposes of this Article I and the remainder of this Excess Benefit Plan, the followingdefinitions apply:“409A Accruals” means those benefits that were accrued after or became vested after 2004, as adjusted for interest orchanges in present value, as applicable. Such amounts shall be determined in accordance with Code section 409A.“Code” means the Internal Revenue Code.“Code section 409A” means section 409A of the Code and any Treasury and Internal Revenue Service regulations andguidance issued thereunder.“Company” means Marathon Petroleum Company LP.“Distribution Agreement” means the Separation and Distribution Agreement dated as of May 25, 2011 amongMarathon Oil Corporation, Marathon Oil Company and Marathon Petroleum Corporation.“Distribution Date” means June 30, 2011.“Employee” means any individual employed by an Employer.“Employee Matters Agreement” means the agreement respecting certain employee matters dated as of May 25, 2011between Marathon Oil Corporation and Marathon Petroleum Corporation.2“Employer” includes the Company and each related company or business which is part of the same controlled groupunder Code sections 414(b) or 414(c); provided that where specified by the Employer in accordance with Code section409A in applying Code section 1563(a)(1) – (a)(3) for purposes of determining a controlled group of corporations underCode section 414(b) and in applying Treasury Regulation section 1.414(c)-2 for purposes of determining whether tradesor businesses are under common control under Code section 414(c), the phrase “at least 50 percent” is used instead of“at least 80 percent.” In addition, the term “Employer” shall also include any entity that previously met the requirements ofan “Employer” as set forth herein that continues to employ a Participant to the extent so designated by the PlanAdministrator.“Excess Benefit Plan” means the Marathon Petroleum Excess Benefit Plan.“Grandfathered Accruals” means those benefits that are exempt from Code section 409A because they were accruedand vested before January 1, 2005, as adjusted for interest or changes in present value, as applicable. Such amountsshall be determined in accordance with Code section 409A.“Legacy Retirement Benefit” as defined in the Retirement Plan, means the Member’s retirement benefit (if any)determined under Article 6 of the Retirement Plan without taking into account any Plan Participation Service afterDecember 31, 2009.“Retirement Plan” means the Refining, Marketing and Transportation Sub-Plan of the Marathon Petroleum RetirementPlan.“Select Group Member” means a Member of the Retirement Plan who, on August 17, 2009, either was a supervisor inGrade 14 or above or had a base pay of $190,000 (specifically excluding bonus) or higher.“Separation from Service” shall have the same meaning as set forth under Code section 409A with respect to anEmployer.“Specified Employee” shall have the meaning as set forth under Code section 409A and as determined by theEmployer in accordance with its established policy.“Thrift Plan” means the Marathon Petroleum Thrift Plan.ARTICLE II. Eligibility2.1Eligibility for BenefitsThe following individuals are eligible to accrue Excess Benefit Plan benefits:(a) (1) Every individual who qualifies for a benefit under the terms of the Retirement Plan and (i) whose benefitas determined under the Retirement Plan is reduced due to salary deferrals under the Marathon PetroleumDeferred Compensation Plan or any similar plan maintained by the Employer or by either Code section 415 or theannual compensation limit as set forth under Code section 401(a)(17) (collectively, the “Defined Benefit Limits”),or (ii) would accrue a Special Excess Bonus Recognition benefit as set forth in section 3.1(b) hereof and isdesignated by the Plan Administrator and (2) each Select Group Member whose3Legacy Retirement Benefit under the Retirement Plan is determined without taking into account his or herchanges in Final Average Pay after December 31, 2009.(b) Every individual who participates in the Thrift Plan and who (i) has potential contributions to the Thrift Planlimited by Code Requirements (as defined below) to a point which precludes the individual’s receipt of themaximum matching Company Contributions provided under Article VI of the Thrift Plan; (ii) is limited by CodeRequirements to making contributions to the Thrift Plan at a percentage that is less than their elected contributionpercentage; and (iii) continues to make After-Tax and Pre-Tax Contributions to the Thrift Plan at the maximum rateas limited by Code requirements. As used in this Excess Benefit Plan, the term “Code Requirements” includes,and is limited to, the following requirements:(1)Code section 415;(2)Code section 401(k) (Actual Deferral Percentage test) and Code section 401(m) (Actual ContributionPercentage test);(3)The Code section 402(g) annual dollar limitation on MSP Contributions; or(4)The annual compensation limit as set forth under Code section 401(a)(17).Every individual who is eligible to receive benefits under this Excess Benefit Plan by reason of his or her activeemployment with an Employer shall be known as a Participant. Every individual who becomes eligible to receivebenefits under this Excess Benefit Plan in the event of the death of a Participant shall be known as a Beneficiary.The Beneficiary of a Participant under this Excess Benefit Plan shall be such Beneficiary as may be providedunder Section 3.3(b).2.2No Duplication of BenefitsAny individual who is eligible under the terms of the Marathon Petroleum Deferred Compensation Plan or any similarplan maintained by the Employer shall receive excess Thrift accruals under that plan. No Participant shall receiveduplicate benefits under the Thrift Plan, Excess Benefit Plan, or Deferred Compensation Plan.2.3 Allocation of Liabilities under the Employee Matters Agreement(a) Immediately following the Distribution Date this Excess Benefit Plan pursuant to the Employee MattersAgreement shall assume the Liabilities of the Marathon Oil Company Excess Benefit Plan representing anybenefits accrued by individuals (1) who are either MPC Employees or Delayed Transfer Employees who movefrom the MRO Group to the MPC Group and (2) who have accrued benefits under the Marathon Oil CompanyExcess Benefit Plan.4(b) Immediately following the Distribution Date this Excess Benefit Plan pursuant to the Employee MattersAgreement shall no longer have any Liabilities representing benefits accrued under this Excess Benefit Plan byindividuals (1) who are MRO Employees or Delayed Transfer Employees who move from the MPC Group to theMRO Group and (2) who have accrued benefits under this Excess Benefit Plan, and the MRO Employees andTransfer Employees described in this Section 2.3(b) shall after the Distribution Date look exclusively to theMarathon Oil Company Excess Benefit Plan for the payment of such accrued benefits.ARTICLE III. Excess Retirement and Thrift Benefits3.1Amount of Excess Retirement BenefitThe amount of a Participant’s benefit under this Section 3.1 (the “Excess Retirement Benefit”), and as specified inAppendix I, shall be determined as of the Participant’s Separation from Service, as follows:(a) The amount of Excess Retirement Benefit which a Participant or Beneficiary (as defined in Section 3.3(b)) isentitled to receive shall be equal to the excess of (1) over (2) below:(1) The amount of benefit which such Participant or Beneficiary would be entitled to receive under theRetirement Plan if such benefit were computed without giving effect to the Defined Benefit Limitations andincluding elected deferred compensation contributions as permitted under the Marathon PetroleumDeferred Compensation Plan or any similar plan maintained by the Employer; less(2) The amount of benefit which such Participant or Beneficiary is entitled to receive under theRetirement Plan.(b) The following individuals shall be entitled to an additional Excess Retirement Benefit equal to the differencebetween (1) and (2) below (“Special Excess Bonus Recognition”): (i) Eligible Grandfather Employees and (ii) anyGrade 19 and above Employee of Marathon Petroleum Company LP and its subsidiaries, who is recommendedby the Senior Vice President of Human Resources of Marathon Petroleum Corporation and approved by thePresident and CEO of Marathon Petroleum Corporation.(1) An amount calculated under the Retirement Plan benefit formula, without regard to any Codemandated limitations (including, but not limited to, the Defined Benefit Limits) and including electeddeferred compensation contributions as permitted under the Marathon Petroleum Deferred CompensationPlan or any similar plan maintained by the Employer, and substituting the following Final Average Pay(FAP) definition for the definition of “Final Average Pay” contained in the Retirement Plan:5Final Average Pay shall be the highest pay, excluding bonuses, of a member for any consecutive36-month period during the ten years of employment immediately prior to January 1, 2013, plus thehighest three bonuses paid out during the same ten years (not necessarily consecutive), divided by36.(2) An amount as normally determined under the Retirement Plan, plus any retirement benefit otherwisepayable under the Excess Benefit Plan (i.e., exclusive of any benefits attributable to the calculation inSection 3.1(b)(1) above).For purposes of the calculations in (1) and (2) of this Section 3.1(b) “Eligible Grandfather Employee” meansany MPC employee eligible for Special Excess Bonus Recognition under Article III, Section A of this Planprior to October 1, 2006. However, an individual’s Eligible Grandfather Employee status shall permanentlycease upon termination, retirement, or death as an employee.(c) If a Participant is a Select Group Member or a Beneficiary (as defined in Section 3.3(b)) is the Beneficiary ofa Select Group Member, he or she shall be entitled to an additional Excess Retirement Benefit equal to theexcess of (1) over (2) below:(1) The amount of the benefit which such Participant or Beneficiary would have been entitled to receiveunder the Retirement Plan as a Legacy Retirement Benefit if any changes in the Select Group Member’sFinal Average Pay after December 31, 2009, through December 31, 2012, had been taken into accountunder Section 4.02(c) of the Retirement Plan in computing his or her Legacy Retirement Benefit; less(2) The amount of the benefit which such Participant or Beneficiary is entitled to receive under theRetirement Plan as a Legacy Retirement Benefit.(d) If a Participant (i) is appointed an Officer of Marathon Petroleum Corporation by the Marathon PetroleumCorporation Board of Directors, (ii) is approved to be eligible to receive the additional Excess Retirement Benefit,as determined in this Section 3.1(d)(1) and (2) below, by the Marathon Petroleum Corporation Board of DirectorsCompensation Committee, (iii) retires or dies on or after age 62 as an active employee, and (iv) at the time of suchretirement or death, such Participant is eligible for a Legacy Retirement Benefit under the terms of the RetirementPlan and the Excess Benefit Plan, he or she shall be entitled to an additional Excess Retirement Benefit, asfollows:6(1) In the event the lump sum interest rate at age 62 is less than or equal to the lump sum interest rate atretirement or death, the lump sum Legacy Retirement Benefit will be supplemented in an amount equal tothe difference between (a.) and (b.), below:a.The lump sum Legacy Retirement Benefit calculated using the age 62 lump sum conversionfactor based on the applicable lump sum interest rate in effect at retirement or death under the termsof the Retirement Plan and the Excess Benefit Plan; andb.The lump sum Legacy Retirement Benefit calculated using the lump sum conversion factorfor the actual age of retirement or death based on the lump sum interest rate in effect at retirement ordeath under the terms of the Retirement Plan and the Excess Benefit Plan.(2) In the event the lump sum interest rate at age 62 is greater than the lump sum interest rate atretirement or death, the lump sum Legacy Retirement Benefit will be supplemented in an amount equal tothe difference between (a.) and (b.), below:a.The lump sum Legacy Retirement Benefit calculated using the lump sum interest rate andlump sum conversion factor in effect at age 62 under the terms of the Retirement Plan and theExcess Benefit Plan, andb.The lump sum Legacy Retirement Benefit calculated using the lump sum interest rate andlump sum conversion factor in effect at retirement or death under the terms of the Retirement Planand the Excess Benefit Plan.Refer to Appendix II for examples of benefit calculations, as described in this Section 3.1(d).3.2Amount of Excess Thrift BenefitThe amount of the benefit under this Section 3.2 (the “Excess Thrift Benefit”) which a Participant or Beneficiary is entitledto receive shall be equal to the excess of (a) over (b) below for each calendar year accumulated with interest to date ofpayment at the “Stable Value Fund” rate provided under Article VIII of the Thrift Plan:(a) The amount of Company Contributions under Article VI of the Thrift Plan that would have been credited to theParticipant’s Thrift Plan account if the Code Requirements were not given effect for such year and using theParticipant’s rate of contributions at the time the limitation becomes effective as determined by the PlanAdministrator; less(b) The amount of Company Contributions actually credited to the Participant’s Thrift Plan account for such year.73.3Payment of Excess BenefitA Participant shall be entitled to a cash distribution of the Participant’s Excess Retirement Benefit and Excess ThriftBenefit, as applicable (collectively, the “Excess Benefit”), as provided in this Section 3.3.(a) Except as otherwise provided in this Section 3.3, a Participant’s Excess Benefit shall be paid in a lump sumwithin 90 days of Separation from Service for any reason other than death.(b) In the event of the death of a Participant, the Participant’s Excess Benefit shall be paid to the Participant’sapplicable Beneficiary in a lump sum within 90 days of the Participant’s death or, if earlier, within the 90-dayperiod following the Participant’s Separation from Service as described in Section 3.3(a) (or, in the event of aSeparation from Service of a Specified Employee (as defined below) not on account of death, the 90-day perioddescribed in Section 3.3(c)). The Participant’s “Beneficiary” shall be: (i) with respect to the Participant’s ExcessRetirement Benefit, the Beneficiary will be his or her Eligible Surviving Spouse or estate (if no Eligible SurvivingSpouse); and (ii) with respect to the Participant’s Excess Thrift Benefit, the Participant’s Beneficiary will be thebeneficiary or beneficiaries designated under the Thrift Plan. In any event, if there is no valid Beneficiary underthe terms of this Excess Benefit Plan, the Excess Benefit will be paid to the person or persons comprising the firstsurviving class of the eligible classes as set forth: (1) the Participant’s spouse; (2) the Participant’s natural bornand legally adopted children; (3) the Participant’s surviving parents; (4) the Participant’s surviving brothers andsisters; and (5) the executor or administrator of the Participant’s estate.(c) Distribution of the Excess Benefit of a Participant who the Plan Administrator determines is a SpecifiedEmployee (other than such Participant’s Grandfathered Accruals) shall be paid in a lump sum within the 90-dayperiod following the first of the month following 6 months after Separation from Service (other than a Separationfrom Service on account of the death of Participant). In the event of a Separation from Service of a SpecifiedEmployee on account of death, payment shall be made pursuant to Section 3.3(b). Payment of a SpecifiedEmployee’s Grandfathered Accruals shall be made in accordance with Section 3.3(a).(d) A Participant must be vested under the Retirement Plan in order for an Excess Retirement Benefit to bepayable. The amount of any lump sum payment hereunder shall be determined by using the same factors andassumptions which would be used by the Retirement Plan for such Participant or Beneficiary at the Participant’sSeparation from Service. The balance of any Excess Retirement Benefit not paid at the Participant’s Separationfrom Service shall accrue interest beginning at the Participant’s Separation from Service at a rate used under the8Retirement Plan to determine the actuarial equivalent lump sum of a life only monthly annuity.(e) A Participant must be fully vested under the Thrift Plan in order for an Excess Thrift Benefit to be payable.The balance of any Excess Thrift Benefit not paid at the Participant’s Separation from Service shall accrueinterest at the “Stable Value Fund” rate provided under Article VIII of the Thrift Plan until the entire balance hasbeen paid. If the “Stable Value Fund” rate becomes unavailable for any reason, whether for purposes of thisSection 3.3(e) or for purposes of Section 3.2, the Company shall, at its sole discretion, substitute a similar interestrate which will be applicable for time periods thereafter.(f) Distributions of 409A Accruals prior to January 1, 2009 were made under reasonable good faithinterpretations of Code section 409A and transition guidance provided thereunder. Notwithstanding any contraryprovisions of this Section 3.3, to the extent the Plan Administrator permitted a Participant to submit an election toreceive payment in a form of distribution other than a lump sum and such payment commenced prior to 2009, thedistribution of such Participant’s Excess Benefit after 2008 shall be governed by procedures established by thePlan Administrator.ARTICLE IV. FundingBenefits under this Excess Benefit Plan shall be paid from the general assets of the applicable Employer. This ExcessBenefit Plan shall be administered as an unfunded plan which is maintained primarily for the purpose of providingsupplemental retirement compensation “for a select group of management or highly compensated employees” as setforth in sections 201(2), 301(3), and 401(a)(1) of ERISA, and is not intended to meet the qualification requirements ofsection 401 of the Code. Any assets set aside by the Employer for the purpose of paying benefits under this ExcessBenefit Plan shall not be deemed to be the property of the Participant and shall be subject to claims of creditors of theEmployer. No Participant or other person shall have any claim against, right to, or security or other interest in, any fund,account or asset of the Employer from which any payment under the Excess Benefit Plan may be made. Any use of thewords “contributions” or “contribute,” or any similar phrase, shall not require actual contributions or funding of this ExcessBenefit Plan and is only used for convenience when describing the deferral activities of this Excess Benefit Plan.ARTICLE V. Plan Administration5.1 General DutyThe Company has delegated its administrative authority hereunder to the Plan Administrator of the Retirement Plan or itssuccessor (the “Plan Administrator.”) It shall be the principal duty of the Plan Administrator to determine that theprovisions of the Excess Benefit Plan are carried out in accordance with its terms, for the exclusive benefit of personsentitled to participate in this Excess Benefit Plan.95.2 Plan Administrator’s General Powers, Rights and DutiesThe Plan Administrator shall have full power to administer this Excess Benefit Plan in all of its details, subject to theapplicable requirements of law. For this purpose, the Plan Administrator is, as respects the rights and obligations of allparties with an interest in this Excess Benefit Plan, given the powers, rights and duties specifically stated elsewhere inthis Excess Benefit Plan, or any other document, and in addition is given, but not limited to, the following powers, rightsand duties:(a) to determine all questions arising under this Excess Benefit Plan, including the power to determine the rightsor eligibility of Employees or Participants and any other persons, and the amounts of their contributions or benefitsunder this Excess Benefit Plan, to interpret the Excess Benefit Plan, and to remedy ambiguities, inconsistenciesor omissions;(b) to adopt such rules of procedure and regulations, including the establishment of any claims procedure thatmay be required by law, as in its opinion may be necessary for the proper and efficient administration of theExcess Benefit Plan and as are consistent with this Excess Benefit Plan;(c) to direct payments or distributions from this Excess Benefit Plan in accordance with the provisions of thisExcess Benefit Plan;(d) to develop such information as may be required by it for tax or other purposes as respects this ExcessBenefit Plan; and(e) to employ agents, attorneys, accountants or other persons (who also may be employed by the Company),and allocate or delegate to them such powers as the Plan Administrator may consider necessary or advisable toproperly carry out the administration of this Excess Benefit Plan.The Plan Administrator’s decision in any matter involving the interpretation and application of this Excess Benefit Planshall be final and binding. In the event the Plan Administrator would have to decide any issue under this Excess BenefitPlan which could affect the form or timing of the payment of deferred compensation under this Excess Benefit Plan, thenthe Company shall make that decision.5.3 Indemnification of AdministratorThe Company agrees to indemnify and to defend to the fullest extent permitted by law any Employee serving as the PlanAdministrator against all liabilities, damages, costs and expenses (including attorney’s fees and amounts paid insettlement of any claims approved by the Company) occasioned by any act or omission to act in connection with thisExcess Benefit Plan, if such act or omission is or was in good faith. This Section 5.3 shall comply with Code section409A and Treasury Regulation section 1.409A-3(i)(1)(iv) with regard to the requirements for reimbursements, to theextent applicable, for the period that such Employee’s indemnification right hereunder shall exist.105.4 Information Required by Plan AdministratorThe Plan Administrator shall obtain such data and information as deemed necessary or desirable in order to administerthis Excess Benefit Plan. The records of the Company as to an Employee’s or Participant’s period or periods ofemployment, termination of employment and the reason therefor, leave of absence, re-employment and earnings will beconclusive on all persons unless determined by independent agents or delegates of the Plan Administrator to beincorrect. Participants and other persons entitled to benefits under this Excess Benefit Plan also shall furnish the PlanAdministrator with such evidence, data or information, as the Plan Administrator considers necessary or desirable toadminister this Excess Benefit Plan.5.5 Claims and Review Procedures(a) Claims Procedure. If a Participant believes any rights or benefits are being improperly denied under thisExcess Benefit Plan, such Participant may file a claim in writing with the Plan Administrator. If any such claim iswholly or partially denied, the Plan Administrator shall notify such Participant of its decision in writing. Suchnotification shall be written in a manner calculated to be understood by such Participant and shall contain (i)specific reasons for the denial, (ii) specific reference to pertinent Excess Benefit Plan provisions, (iii) a descriptionof any additional material or information necessary for the Participant to perfect such claim and an explanation ofwhy such material or information is necessary, and (iv) information as to the steps to be taken if the Participantwishes to submit a request for review. Such notification shall be given within 90 days after the claim is received bythe Plan Administrator (or within 180 days, if special circumstances require an extension of time for processing theclaim, and if written notice of such extension and circumstances is given to such Participant within the initial 90day period.) If such notification is not given within such period the claim shall be considered denied as of the lastday of such period and such Participant may request a review of his claim.(b) Review Procedure. Within 60 days after the date on which a Participant receives a written notice of a deniedclaim (or, if applicable, within 60 days after the date on which such denial is considered to have occurred) suchParticipant (or the Participant’s duly authorized representative) may (i) file a written request with the PlanAdministrator for a review of his denied claim and of pertinent documents, and (ii) submit written issues andcomments to the Plan Administrator. The Plan Administrator shall notify such Participant of its decision in writing.Such notification shall be written in a manner calculated to be understood by such Participant and shall containspecific reasons for the decision as well as specific references to pertinent Excess Benefit Plan provision. Thedecision on review shall be made within 60 days after the request for review is received by the Plan Administrator(or within 120 days, if special circumstances require an extension of time for processing the request, such as anelection by the Plan Administrator to hold a hearing, and if written notice of such extension and circumstances is11given to such person within the initial 60 day period). If the decision on review is not made within such period, theclaim shall be considered denied.(c) Section 409A Requirements. Any claim for benefits under this Section must be made by the Participant nolater than the time prescribed by Code section 409A. If a claimant’s claim or appeal is approved, any resultingpayment of benefits will be made no later than the time prescribed for payment of benefits by Code Section 409A.ARTICLE VI. Modification and Discontinuance6.1 Amendment and TerminationThe Company reserves the right to modify, suspend, or terminate this Excess Benefit Plan at any time, in whole or inpart, in such manner as it shall determine, provided that such action conforms to the requirements of Code section 409A.Included in the Company’s right to amend, suspend or terminate is the Company’s right at any time to no longer permitany additional Participants under this Excess Benefit Plan, to cease benefit accruals, and to distribute all benefits uponExcess Benefit Plan termination, all subject to the requirements of Code section 409A. The Plan Administrator maypromulgate rules and procedures from time to time to carry out the provisions of this Article VI. However, in no event shallthe Company have the right to eliminate or reduce any benefit, which has been vested or become forfeitable under thisExcess Benefit Plan. o future amendment to this Excess Benefit Plan shall apply to Grandfathered Accruals to the extentsuch provision or amendment would constitute a “material modification” within the meaning of Code section 409A withrespect to the Grandfathered Accruals unless such amendment expressly indicates otherwise.6.2 Delegation of AuthorityIn addition to the other methods of amending MPC’s employee benefit plans, practices, and policies (hereinafter referredto as “MPC Employee Benefit Plans”) which have been authorized, or may in the future be authorized, by MarathonPetroleum’s Board of Directors, the Company’s Senior Vice President of Human Resources may approve the followingtypes of amendments to MPC Employee Benefit Plans:(a) With the opinion of counsel, technical amendments required by applicable laws and regulations;(b) With the opinion of counsel, amendments that are clarifications of plan provisions;(c) Amendments in connection with a signed definitive agreement governing a merger, acquisition or divestituresuch that, for MPC Employee Benefit Plans, needed changes are specifically described in the definitiveagreement, or if not specifically described in the definitive agreement, the needed changes are in keeping with theintent of the definitive agreement;12(d) Amendments in connection with changes that have a minimal cost impact (as defined below) to theCompany; and(e) With the opinion of counsel, amendments in connection with changes resulting from state or federallegislative actions that have a minimal cost impact (as defined below) to the Company.For purposes of the above, “minimal cost impact” is defined as an annual cost impact to the Company per MPCEmployee Benefit Plan case that does not exceed the greater of (i) an amount that is less than one-half of one percent ofits documented total cost (including administrative costs) for the previous calendar year, or (ii) $500,000.6.3 Transfer of LiabilitiesIn the event of a corporate transaction involving a Participant’s Employer, the liabilities with respect to the Participant’sExcess Benefit may be transferred to the entity or organization that becomes the Participant’s employer following thecorporate transaction to the extent that such transfer (i) is permitted by applicable law, (ii) with respect to the 409AAccruals is consistent with Code section 409A, and (iii) with respect to Grandfathered Accruals, does not represent amaterial enhancement of the Participant’s benefits or rights available under the Excess Benefit Plan on October 3, 2004.For these purposes, a corporate transaction shall include, but not be limited to, a merger, consolidation, separation,reorganization, liquidation, split-up, or spin-off.ARTICLE VII. General Provisions7.1 NoticesEach Participant entitled to benefits under this Excess Benefit Plan must file in writing with the Plan Administrator suchParticipant’s post office address and each change of post office address. Any communication, statement or noticeaddressed to any such Participant at the last post office address filed with the Plan Administrator will be binding uponsuch person for all purposes of this Excess Benefit Plan, and the Plan Administrator shall not be obligated to search foror ascertain the whereabouts of any Participant. Any notice or document required to be given or filed with the PlanAdministrator shall be considered as given or filed if delivered or mailed by registered mail, postage prepaid, to RodneyP. Nichols, Senior Vice President of Human Resources, P. O. Box 1, Findlay, Ohio 45839-0001.7.2 Employment RightsThis Excess Benefit Plan does not constitute a contract of employment, and participation in this Excess Benefit Plan willnot give any Participant the right to be retained in the employ of the Company or any Employer nor any right or claim toany benefit under this Excess Benefit Plan, unless such right or claim has specifically accrued under the terms of thisExcess Benefit Plan.137.3 Interests Not TransferableExcept as may be required by law, including the federal income and employment tax withholding provisions of the Code,or of an applicable state’s income tax act, the interests of Participants and their Beneficiaries under this Excess BenefitPlan are not subject to the claims of their creditors and may not be voluntarily or involuntarily sold, transferred, alienated,assigned or encumbered. Notwithstanding any provision of this Excess Benefit Plan to the contrary, this Excess BenefitPlan shall not recognize or give effect to any domestic relations order attempting to alienate, transfer or assign anyParticipant benefits. The preceding shall not preclude the Employer from asserting any claim for damages or for any debtthat the Employer may have with respect to the Participant; provided that any offset shall apply only where such debt isincurred in the ordinary course of the service relationship between the Employer and the Participant, the entire amount ofreduction in any of the Participant’s taxable years does not exceed $5,000, and the reduction is made at the same timeand in the same amount as the debt otherwise would have been due and collected from the Participant.7.4 Facility of PaymentWhen a Participant entitled to benefits under this Excess Benefit Plan is under a legal disability, or, in the PlanAdministrator’s opinion, is in any way incapacitated so as to be unable to manage their financial affairs, the PlanAdministrator may direct that the benefits to which such Participant otherwise would be entitled shall be made to suchParticipant’s legal representative, or to such other person or persons as the Plan Administrator may direct the applicationof the benefits for the benefit of such Participant. Any payment made in accordance with such provisions of this Section7.4 shall be a full and complete discharge of any liability for such payment.7.5 Controlling State LawTo the extent not superseded by the laws of the United States, the laws of the State of Ohio shall be controlling in allmatters relating to the Excess Benefit Plan.7.6 SeverabilityIn case any provisions of this Excess Benefit Plan shall be held illegal or invalid for any reason, such illegality orinvalidity shall not affect the remaining provisions of this Excess Benefit Plan, and this Excess Benefit Plan shall beconstrued and enforced as if such illegal and invalid provisions had never been set forth in this Excess Benefit Plan.7.7 Statutory ReferencesAll references to the Code and ERISA include reference to any comparable or succeeding provisions of any legislation,which amends, supplements or replaces such section or subsection.7.8 HeadingsSection headings and titles are for reference only. In the event of a conflict between a title and the content of a section,the content of the section shall control.147.9 Non-taxable BenefitsIt is the intention of the Company that this Excess Benefit Plan meet all requirements of the Code so that the benefitsprovided be non-taxable during the period of deferral and until actual distribution is made.7.10 Affect on Other Benefit PlansAny benefit payable under the Retirement Plan or the Thrift Plan shall be paid solely in accordance with the terms andprovisions of those Plans, and nothing in this Excess Benefit Plan shall operate or be construed in any way to modify,amend, or affect the terms and provisions of the Retirement Plan or Thrift Plan.15Appendix IThis Appendix I amends Section 3.1(b) of the Plan with respect to Donald C. Templin only. For the purpose ofcalculating Mr. Templin’s benefit under this Plan, Section 3.1(b) of the Plan shall be disregarded, and the followinglanguage shall be substituted:(b)Donald C. Templin shall be entitled to an additional Excess Retirement Benefit equal to the difference between(1) and (2) below.(1)An amount calculated under the Retirement Plan benefit formula as if Mr. Templin had 70 or more Points(as defined in Article 5 of the RMT Sub-Plan of the Marathon Petroleum Retirement Plan), without regard toany Code mandated limitations (including, but not limited to, the Defined Benefit Limitations) and includingelected deferred compensation contributions as permitted under the Marathon Petroleum DeferredCompensation Plan or any similar plan maintained by the Employer.(2)An amount as normally determined under the Retirement Plan, plus any retirement benefit otherwisepayable under this Excess Benefit Plan (i.e., exclusive of any benefits attributable to the calculation inSection 3.1(b)(1) above).16Appendix IIBenefit Calculation Example per Section 3.1(d)Example 1: Lump sum interest rate at age 62 = lump sum interest rate at retirement (age 65) Step 1:Calculate lump sum benefit using the age 62 lump sum conversion factor based on interest rate in effect at retirement (1.00%). Step 2:Calculate lump sum benefit using the conversion factor for the actual age of retirement (65) based on the lump sum interest rate in effect at retirement (1.00%). Step 3:Difference = supplemental payment. Step 1Step 2Step 3 Hypothetical lump sum benefitat age 62Lump sum benefit at age 65SupplementalPayment Annuity Payable$30,000 $30,000 Lump Sum Conversion Factor224.23 197.06 Lump Sum Benefit$6,726,900 $5,911,800 $815,100 Example 2: Lump sum interest rate at age 62 > lump sum interest rate at retirement (age 65) Step 1:Calculate lump sum benefit using the age 62 lump sum conversion factor based on interest rate in effect at age 62 (1.50%) Step 2:Calculate lump sum benefit using the conversion factor for the actual age of retirement (65) based on the lump sum interest rate in effect at retirement (1.00%). Step 3:Difference = supplemental payment. Step 1Step 2Step 3 Hypothetical lump sum benefitat age 62Lump sum benefit at age 65SupplementalPayment Annuity Payable$30,000 $30,000 Lump Sum Conversion Factor211.62 197.06 Lump Sum Benefit$6,348,600 $5,911,800 $436,800 17WHEREAS, Marathon Petroleum Company LP (the “Company”), a subsidiary of Marathon Petroleum Corporation (the“Corporation”), wishes to amend and restate the Marathon Petroleum Excess Benefit Plan for the benefit of certain of itsemployees as set forth herein; andNOW, THEREFORE, the Plan is hereby adopted by the Company, effective October 29, 2014.IN WITNESS WHEREOF, the Company has directed the Senior Vice President, Human Resources and AdministrativeServices of the Corporation to execute this document on its behalf.MARATHON PETROLEUM COMPANY LP /s/ Signature on File By:Rodney P. NicholsIts:Senior Vice President,Human Resources andAdministrative Services18Exhibit 10.31Marathon Petroleum Annual Cash Bonus (“ACB”) ProgramEffective January 1, 2015 PreambleThis program document explains the Annual Cash Bonus Program (the “Program”) of Marathon Petroleum Corporation.The Program is a sub-plan of the Marathon Petroleum Corporation 2012 Incentive Compensation Plan (the “Plan”), andany successor shareholder-approved plan, which are hereby incorporated by reference. All Awards under the Programare granted pursuant to Section 7 of the Plan. Capitalized terms not specifically defined herein have the meaningsspecified in the Plan. In the event of any conflict between the Program and the Plan, the terms of the Plan shall control.Program ObjectivesThe purpose of the Program is to motivate and reward Eligible Employees for achieving short-term (annual) businessobjectives that drive overall shareholder value while encouraging responsible risk taking and accountability.DefinitionsAs used in the Program, the following terms shall have the meanings set forth below:a.“Affiliate” means, with respect to any referenced person or entity, any other person controlling, controlled by, orunder common control with such person.b.“Award” means an award of an Incentive Stock Option, Nonqualified Stock Option, Stock Appreciation Right,Common Share, Restricted Stock, Restricted Stock Unit, or Cash granted to a Participant pursuant to theprovisions of the Plan, any of which the Committee or its delegate may structure to qualify in whole or in partas a Performance Award.c.“Board” means the Board of Directors of Marathon Petroleum Corporation.d.“Change in Control” means a transaction of a nature that would be required to be reported in response toItem 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of 1934, asamended (the “Exchange Act”), whether or not the Corporation is then subject to such reporting requirement;provided that, without limitation, such a Change in Control shall be deemed to have occurred if:(i)any person (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) (a “Person”) is orbecomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, ofsecurities of the Corporation (not including the amount of the securities beneficially owned by such person, any such securities acquired directly from the Corporation or its Affiliates) representingtwenty percent (20%) or more of the combined voting power of the Corporation’s then outstanding votingsecurities; provided, however, that for purposes of this Plan the term “Person” shall not include (A) theCorporation or any of its subsidiaries, (B) a trustee or other fiduciary holding securities under an employeebenefit plan of the Corporation or any of its subsidiaries, (C) an underwriter temporarily holding securitiespursuant to an offering of such securities, or (D) a corporation owned, directly or indirectly, by thestockholders of the Corporation in substantially the same proportions as their ownership of stock of theCorporation; and provided, further, however, that for purposes of this paragraph (i), there shall be excludedany Person(s) who become(s) such a beneficial owner in connection with an Excluded Transaction (asdefined in paragraph (iii) below); or(ii)the following individuals cease for any reason to constitute a majority of the number of directors thenserving: individuals who, on the date hereof, constitute the Board and any new director (other than adirector whose initial assumption of office is in connection with an actual or threatened election contestincluding, but not limited to, a consent solicitation, relating to the election of directors of the Corporation)whose appointment or election by the Board or nomination for election by the Corporation’s stockholderswas approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office whoeither were directors on the date hereof or whose appointment, election or nomination for election waspreviously so approved or recommended; or(iii)there is consummated a merger or consolidation of the Corporation or any direct or indirect subsidiarythereof with any other corporation, other than a merger or consolidation (an “Excluded Transaction”) whichwould result in the voting securities of the Corporation outstanding immediately prior thereto continuing torepresent (either by remaining outstanding or by being converted into voting securities of the survivingcorporation or any parent thereof) at least 50% of the combined voting power of the voting securities of theentity surviving the merger or consolidation (or the parent of such surviving entity) immediately after suchmerger or consolidation, or the shareholders of the Corporation approve a plan of complete liquidation ofthe Corporation; or there is consummated the sale or other disposition of all or substantially all of theCorporation’s assets; or(iv)A Change in Control shall not be deemed to occur if the Company undergoes a bankruptcy, liquidation, orreorganization under the United States Bankruptcy Code.e.“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rulings andregulations issued thereunder. f.“Committee” means the Committee delegated by the Board with the authority to administer the Plan. To theextent the Committee has delegated authority to any person(s) or committee(s) pursuant to Section 6 of thePlan, a reference to the Committee herein may also include such person(s) or committee(s). However, in noevent shall the Committee delegate its authority with respect to the compensation of any Participant whosecompensation the Board or Committee reasonably believes may become subject to Section 162(m) of theCode.g.“Company” means•Blanchard Refining Company LLC,•Catlettsburg Refining, LLC,•Cincinnati Renewable Fuels LLC,•Marathon Petroleum Company Canada, Ltd,•Marathon Petroleum Company LP,•Marathon Petroleum Corporation,•Marathon Petroleum Services LLC,•Marathon Petroleum Logistics Services LLC,•Marathon Petroleum Service Company,•Speedway LLC, and•any other subsidiaries or controlled company of the above, as applicable.All of the above entities are collectively referred to as “Company” or “Marathon Petroleum” for purposes of thisdocument.h.“Covered Employees" has the same meaning as defined in Section 162(m)(3) of the Code.i.“Eligible Employees” means regular full-time and regular part-time Company employees who on the last day ofthe last pay period completed for the Performance Period are assigned to a salary grade within the Companysalary structure. However, eligibility for employees of Speedway LLC and any of its subsidiaries is limited tothose in salary grades 15 and above on the last day of the last pay period completed for the PerformancePeriod. Eligible Employees may also include employees of other companies selected by the Committee andselect employees of an approved Affiliate as approved by the Committee. j.“Eligible Wages” for non-Officer employees include:(i)actual base wages paid and compensation deferred during the Performance Period, and(ii)overtime paid in the Performance Period. Eligible Wages for non-Officer employees exclude non-cash compensation, equity-based compensation,allowances, reimbursements, premiums and any bonus or recognition payments made. They also excludewages paid or processed by a third party.Eligible Wages for employees designated as Officers shall be equal to their annualized base salary in effecton the last day of the Performance Period. However, Eligible Wages for Officers who retire, are hired or whodie during the Performance Period shall be equal to their actual base wages paid plus any compensationdeferred during the Performance Period.In the event of a Change in Control, Eligible Wages shall be the actual wages paid during the Performance Period, as ofthe date of Change in Control, for all employees.k.“Performance Period” means any fiscal year or such other measurement period determined by the Committeeor its delegate in their sole discretion. l.“Qualifying Performance Criteria” shall mean any one or more of the following performance criteria that are inthe Plan and were approved by shareholders (or other performance criteria approved by shareholders in thePlan), either individually, alternatively, or in any combination, applied to either the Company as a whole or to abusiness unit or Subsidiary or Affiliate, either individually, alternatively or in any combination, and measuredeither quarterly, annually, or cumulatively over a period of years, on an absolute basis or relative to a pre-established target, to previous years’ results or to a designated comparison group, in each case as specifiedby the Committee or its delegate: (i) revenue, (ii) income measures (which include revenue, gross margin,income from operations, net income, net sales, earnings per share, earnings before interest, depreciation,taxes, and amortization (“EBIDTA”), earnings before interest, taxes and amortization (“EBITA”) and earningsbefore interest and taxes (“EBIT), and economic value added, (iii) expense measures (which include costs ofgoods sold, selling, finding and development costs, general and administrative expenses, and overheadcosts), (iv) operating measures (which include refinery throughput, mechanical availability, productivity,operating income, funds from operations, product quality, cash from operations, after-tax operating income,market share, margin, and sales volumes), (v) margins (which include crack-spread measures), (vi) refinedproduct measures, (vii) cash management and cash flow measures (which include net cash flow fromoperating activities, working capital, receivables management and related customer terms), (vii) liquiditymeasures (which include earnings before or after the effect of certain items such as interest, taxes, depreciation and amortization, improvement in or attainment of working capitallevels, and free cash flow (viii) leverage measures (which include debt-to-equity ratio, debt reduction and netdebt), (ix) market measures (which include market share, stock price, growth measure, total shareholdersreturn, share price performance, return on equity, return on invested capital and return on assets, and marketcapitalization measures), (x) return measures (which include return on equity, return on assets, and return oninvested capital), (xi) corporate value and sustainability measures (which include compliance, safety,environmental, and personnel matters), (xii) project completion measures (which may include measuresregarding whether interim milestones regarding budgets and deadlines are met, as well as whether projectsare completed on time and on or under budget), and (xii) other measures such as those relating toacquisitions, dispositions, or customer satisfaction.Participants and Target FundingPrior to March 30th of the Performance Period, or at such later time as may be permitted by applicable provisions of theCode, the Committee shall establish in writing (1) the Eligible Employees who will be Participants in the Program, (2)each Participant's target funding percentage for such Performance Period or the formula for determining eachParticipant's Award and (3) the applicable performance objective or objectives for such Performance Period which willbe based on the Qualifying Performance Criteria. Each Participant’s funding range will have a threshold of 0% and amaximum of two times (2X) their target funding percentage.Threshold funding for individual metrics is one-half (.5X) of target and the maximum that can be funded is two times (2X)target. Percentages may be rounded. No metric will fund when results are below threshold performance. Funding ranges for Participants shall be based on grade:ParticipantClassificationTargetAward RangeAbove Grade 18Per the CommitteePer theCommitteeGrade 1850%0% - 100%Grade 1740%0% - 80%Grade 1635%0% - 70%Grade 1530%0% - 60%Grade 1425%0% - 50%Grade 1320%0% - 40%Grade 1215%0% - 30%Grade 1112%0% - 24%Grade 1012%0% - 24%Grade 910%0% - 20%Grade 810%0% - 20%Grade 77%0% - 14%Grade 67%0% - 14%Grade 57%0% - 14%Grade 47%0% - 14%Grade 37%0% - 14%Grade 27%0% - 14%Grade 17%0% - 14%Performance MetricsThe Committee, or its delegate, will establish metrics (in accordance with the Program), with threshold, target andmaximum performance criteria. Once approved, these performance criteria are incorporated into this Program documentby reference.When any final performance metric result falls between threshold and target or between target and maximumperformance levels, linear interpolation will be used to determine funding based on actual achievement. For example, ifthe final result of a metric is halfway between threshold and target performance levels, the funding for that metric wouldbe halfway between the corresponding payout percentages.Determination of AwardsFinal calculated bonus payments are automatically rounded up to the nearest $50 for non-officer employees and to thenearest $1,000 for Officers. Bonus Pool(s)The Program for a Performance Period may consist of one or more umbrella performance pools. The Committee shallapprove the structure of each such pool (if any) and designate the Participants in the pool, the total amount of the pool,and such Participant's allocable percentage share of such pool prior to March 30 of the Performance Period (or suchlater time as may be permitted by applicable provisions of the Code). To the extent a pool includes "CoveredEmployees" within the meaning of Section 162(m) of the Code, the pool shall be operated in compliance with therequirements of Section 162(m), which require that (1) each Participant's percentage share of the pool must beestablished no later than 90 days after the commencement of the applicable Performance Period, and (2) the exercise ofnegative discretion with respect to one Participant in the pool may not result in an increase in the amount payable to anyCovered Employee who is a Participant in such pool. Moreover, if the amount payable to each Participant in a pool thatincludes one or more Covered Employees is stated in terms of a percentage of the pool, the sum of the individualpercentages of the pool may not exceed 100 percent.The performance goals for any performance pools, to the extent they cover or potentially cover Covered Employees, willbe based solely on Qualifying Performance Criteria. Satisfaction of these Criteria will enable a Participant to earn 100%of his or her allocated amount under such pools. The Committee may then take into account other criteria (whether or notQualifying Performance Criteria) and use negative discretion to decrease a Participant's Award, but it may not use othercriteria or positive discretion to increase the Award for any Covered Employee. The same objective goals can be used both to set the amount of each performance pool and to function as the QualifyingPerformance Criteria to determine if a bonus (and the amount of the bonus) was earned. The Committee shall establish aminimum threshold for the Qualifying Performance Criteria, below which no bonus will be earned.Without regard to anything contained within this Program, the Committee reserves the unconditional right to award apayout to any Covered Employee up to the full value of their funding pool allocation without regard to the performanceachieved under this operational program.Individual Funding Vs. PayoutThe operation of this Program funds individual payments based on pre-established metrics and subjective metrics asapproved by the Committee. The final payout to each Participant is determined based on the assessment of theirmanagement considering each Participant’s relative performance to other employees. However, no Participant can beawarded more than their maximum percent as specified on page 6 without approval of the Committee or its delegate. Hires, Promotions and TransfersIn the case of a newly hired, promoted, or transferred Participant, the Committee may provide for a guaranteed bonus, ora bonus that would exceed the bonus that would otherwise be payable in the Program unless the Participant is aCovered Employee, in which case no guarantees or excess payments would apply.Participants who change from one eligible position to another during the Performance Period may experience a changeto their Program target funding, individual objectives or the formula for determining each Participant’s Award. In thissituation, funding shall be based on the associated target level and business unit for the position held by the Participanton the last day of the Performance Period, provided the position held is not temporary.If a Participant transfers to a position that is not eligible under the Program during the Performance Period, suchParticipant will be ineligible for any payout under this Program for such Performance Period. Except however, if aParticipant transfers to a Speedway position that is not eligible under the Program during the Performance Period, suchParticipant will remain eligible for an Award based on their Eligible Wages paid while a Participant under the Program.Temporary AssignmentsEligibility and funding targets for employees who are on a temporary assignment on the last day of the last pay periodcompleted for the Performance Period shall be determined based on their regular assignment.Exclusions and AdjustmentsTo the extent consistent with Section 162(m) of the Code, the Committee or its delegate may (A) adjust the actualperformance or performance goals (either up or down) and the level of the Performance Award that a Participant mayearn under this program if it determines that the occurrence of external changes or other unanticipated businessconditions have materially affected the fairness of the goals and / or have unduly influenced the Company’s ability tomeet them; including, without limitation, events such as material acquisitions, asset write-downs, litigation, claims,judgments or settlements, force majeure events, unlawful acts committed against the Company or its property (includingterrorism), labor disputes, legal mandates, accruals for reorganization and restructuring programs and changes in thecapital structure of the Company, the effect of changes in tax law or other such laws or provisions affecting reportedresults, accruals of any amounts for payment under this Plan or any other compensation arrangement maintained by theCompany, or other events not contemplated at the time the goals are set; provided, however, that Performance Awardsgranted to Covered Employees or Executive Officers shall be adjusted only to the extent permitted under Section 162(m)of the Code. In addition, Performance Goals and Performance Awards shall be calculated without regard to any changesin accounting standards or codifications that may be required by the Financial Accounting Standards Board or other standards board or the effect of changes in tax law or other such laws or provisionsaffecting reported results after such Performance Goals are established.Certification by CommitteeUnless otherwise determined by the Committee, no payments shall be made hereunder in respect of any PerformancePeriod unless the Committee shall certify in writing following the end of the Performance Period that the performanceobjectives applicable to the Performance Period have been satisfied. In all events, no payments hereunder shall bemade to any "Covered Employee" (within the meaning of Section 162(m) of the Code) until after satisfaction of theperformance criteria has been certified in writing by the Committee.Separation of EmploymentUnless otherwise determined by the Committee and except as may otherwise be provided in a Participant's writtenagreement with the Company or an Affiliate, if a Participant's employment terminates for any reason prior to payment,such Participant shall not be eligible for an Award under the Program, unless the Participant's employment terminated asa result of death, Severance, or Retirement (prior to July 1 of a Performance Period). Except in the case of death, anAward will be at the Committee's discretion, but any such payment of Award will (i) only be made after the end of thePerformance Period (and as close as practicable to the same time as all other Award payments for such PerformancePeriod), and (ii) only be paid to the extent that the performance criteria were achieved.Any Participant who retires on or after July 1 of a Performance Period is eligible for an Award under this Program, basedon their Eligible Wages paid during the Performance Period, at the discretion of the Committee. A Participant isconsidered to have Retired if the Participant, at the time of separation:a.has reached the age 50 or more with 10 years of accredited service, andb.is deemed to be in good standing.SeveranceSeverance is defined to include any Participant who separates employment during a Performance Period and whobecomes eligible for a termination allowance under the Company’s Termination Allowance Plan. However, anyParticipant who voluntarily requests termination under the Company’s Termination Allowance Plan is not considered tobe an Eligible Employee under this Program. In addition, Eligible Employees who would have otherwise been eligible for the Marathon Petroleum TerminationAllowance Plan, but accepted an offer of employment with:a.the “buyer” of sold Company assets, orb.the “new operator” of a jointly-owned facility, orc.a company that has been contracted to perform services being outsourced.will remain eligible for consideration of an Award provided the termination date is after June 30th of the PerformancePeriod.Death of ParticipantIf the death of a Participant occurs:a.during a Performance Period, their eligibility for the Program will end and a payment will be made to theParticipant’s estate as soon as practicable following death. Such payment will be based on target performancelevels for all metrics and the Participant’s Eligible Wages paid during a Performance Period.b.after a Performance Period, but before payment for that Performance Period has been made, the full Awardotherwise deemed payable under the Program will be made to the Participant’s estate (as close to the time allother Award payments for such Performance Period are made).Payment of AwardsFollowing the Performance Period, each Participant's Award for the Performance Period will be determined inaccordance with the terms of the Program and the Participant shall be eligible to receive payment of the Award.The Committee shall determine whether payment of the Award will be in cash, Common Shares, the right to receiveCommon Shares, Stock Options or other Awards provided for under the Plan; and whether any such payments will besubject to restrictions on transfer, vesting, forfeiture or deferral requirements. Any equity or equity-based Awards shall begranted under the terms and conditions of the Plan.Change in ControlUnless otherwise determined by the Committee prior to a Change in Control, and except as otherwise may be providedin a Participant’s written agreement with the Company or Affiliate upon a Change in Control, this Program willautomatically terminate and all Participants will be vested and entitled to a pro-rated lump sum payment equal to 100%of the Participant’s target multiplied by their Eligible Wages. This payment will be made as soon as administrativelypracticable following the Change in Control, but in no event later than 45 days from the Change in Control. No Right to AwardsExcept as may be provided for under the Change in Control section of this Program, no Participant or other person shallhave any claim or right to be granted an Award under this Program. Neither the establishment of this Program, nor anyaction taken hereunder, shall be construed as giving any Participant any right to be retained in the employ of theCompany, or participate hereunder in the current or succeeding Performance Periods. Nothing contained in this Programshall limit the ability of the Company to make payments or Awards to Participants under any other Program, agreementor arrangement; provided, however, that no payment under any other Program, agreement, or arrangement will be madebecause of a failure of a Participant to earn an Award hereunder, and no such payment outside of this Program will be inthe nature of or in any way related to make-whole payments for what would have been earned or paid hereunder if theperformance goals had been met.Non-TransferabilityThe rights and benefits of a Participant hereunder are personal to the Participant and, except for any payments that maybe made following a Participant's death, shall not be subject to any voluntary or involuntary alienation, assignment,pledge, transfer, encumbrance, attachment, garnishment or other disposition.No Impact on BenefitsExcept as may be required by law or otherwise be specifically stated under any employee benefit plan, policy, orprogram, no amount payable in respect of any Award shall be treated as compensation for purposes of calculating aParticipant's right under any such plan, policy, or program; nor shall any Award be treated as compensation for purposesof termination indemnities or other similar rights, except as may be required by law.No Constraint on Corporate Actions Nothing in this Program shall be construed (1) to limit, impair, or otherwise affect the Company's right or power to makeadjustments, reclassifications, reorganizations, or changes of its capital or business structure, or to merge or consolidate,or dissolve, liquidate, sell, or transfer all or any part of its business or assets, or (2) to limit the right or power of theCompany or any of its Affiliates to take any action which such entity deems to be necessary or appropriate. Program AdministrationThe program shall be administered by the Committee, which shall have full authority to:a.interpret the Program,b.establish, interpret, amend or revoke rules and regulations relating to the operation of the Program,c.interpret the Program, to correct any defect, supply any omission or reconcile any inconsistency in theProgram,d.adopt such rules for the administration, interpretation and application of the Program, ande.make all determination and take all other actions necessary or appropriate for the proper administration of theProgram.The Committee has complete, unilateral discretion with respect to all aspects of the operation, administration, design,features, benefits and Awards under the Program and can change, terminate, or modify Awards, or otherwise changeany aspect of the Plan in its discretion prospectively or retroactively, regardless of anything stated in this document.Notwithstanding the above, with respect to a Covered Employee, the Committee cannot (1) grant or change an Award, orthe Qualified Performance Criteria thereunder, after the deadline under Code Section 162(m) for setting such Award(generally March 30th of a Performance Period for annual Awards), (2) deem its performance goals satisfied when theyhave not been met, or (3) use its discretion to increase the amount otherwise payable under any Award.The Committee may delegate any or all of their authorities hereunder, provided that the Committee shall, in no event,delegate its authority with respect to the compensation of any Participant whose compensation the Board or Committeereasonably believes may become subject to Section 162(m) of the Code. No member of the Committee shall be eligibleto participate in the Program.TaxesFor U.S. Participants, any Award received under the Program is subject to all applicable employment withholding taxesin the year paid. For Participants outside the United States, local country tax regulations will apply.DeductionsThere shall be deducted from all individual payouts any taxes required to be withheld by national, Federal, stateprovincial or local governments and paid over to such government for the accounts of such Participants. The Company may also deduct from an individual Award, at its sole discretion, any and all amounts determined byCompany management to be owed to the Company by the Participant.Affiliate RequirementsPrior to the selection of employees of an affiliated company to participate in the Program, the Committee may require theAffiliate to consent to the participation of such employee or employees in the Program and to the charging of suchAffiliate with the amount of any Award which may be made to such employee or employees.Recoupment / ClawbackOfficers are subject to recoupment provisions in the Program, in the case of certain forfeiture events. If the Company isrequired, pursuant to a determination made by the SEC or the Audit Committee of the Board, to prepare a materialaccounting restatement due to the noncompliance of the Company with any financial reporting requirement underapplicable securities laws as a result of misconduct, the Audit Committee of the Board may determine that a forfeitureevent has occurred based on an assessment of whether an officer knowingly engaged in misconduct, was grosslynegligent with respect to misconduct, knowingly failed or was grossly negligent in failing to prevent misconduct orengaged in fraud, embezzlement, or other similar misconduct materially detrimental to the Company.Upon the Audit Committee’s determination that forfeiture event has occurred, the Company has the right to request andreceive reimbursement of any portion of an officer’s bonus from the Program that would not have been earned or paidhad the forfeiture event not have taken place.These recoupment provisions are in addition to the requirements in Section 304 of the Sarbanes-Oxley Act of 2002which provide that the CEO and CFO shall reimburse the Company for any bonus or other incentive-based or equity-based compensation as well as any related profits received in the 12-month period prior to the filing of an accountingrestatement due to non-compliance with financial reporting requirements as a result of Company misconduct.Notwithstanding the foregoing or any other provision of this Program to the contrary, the Company may also require thatthe Participant repay to the Company any compensation paid to the Participant under this Program, as is required by theprovisions of the Dodd-Frank Act and the regulations thereunder or any other “clawback” provisions as required by lawor by the applicable listing standards of the exchange on which the Corporation’s common stock is listed for trading. Other ProvisionsIn all events, whether any cash Award is paid to a Participant will depend on the decision of the Committee (or itsdelegate, as appropriate). All Awards are subject to the sole discretion of the Committee or its delegate, and nothing inthis document (except as may be provided for in the Change in Control provisions) or any other document describing orreferring to the Program shall confer any right whatsoever on any person to be considered for any Award.This document does not purport to be complete and is subject to and governed by actions, rules and regulations of theCommittee (or its delegate, as appropriate).The Program may be changed or discontinued at any time without notice or liability at the sole discretion of theCommittee.Awards shall be subject to and governed by the specific terms and conditions of the Program and the applicable Award. Nothing contained herein shall require the Company to segregate any monies from its general fund or to create anytrusts, or to make any special deposits for amounts payable to any Participant.The Program is intended to be operated in accordance with the requirements of Section 162(m) of the Code whereapplicable, and shall be interpreted consistent with that intent.No member of the Committee, or employee of the Company, shall be liable for any act done, or determination made ingood faith, with respect to the administration of this Program. The Company indemnifies and holds harmless to the fullestextend allowed by law such persons individually and collectively, from and against any and all losses resulting fromliability to which the Committee, or the members of the Committee, or employee of the Company may be subjected byreason of any act or conduct (except willful misconduct, fraud or gross negligence) in their official capacities in theadministration of the Program, including all expenses reasonably incurred in their defense, in case the Company fails toprovide such defense. Any provision of the Program prohibited by law shall be ineffective to the extent of such prohibition without invalidatingthe remaining provisions. The terms of this Program document supersede any written or verbal agreements, representations, proposals, or planswith respect to the subject matter hereof; provided, however, that the forgoing shall not act to supersede an existingwritten agreement between a Participant and the Company that has been approved by the Committee.MARATHON PETROLEUM CORPORATION /s/ Signature on File By:Rodney P. NicholsIts:Senior Vice President,Human Resources andAdministrative Services Exhibit 12.1Marathon Petroleum CorporationComputation of Ratio of Earnings to Fixed ChargesTOTAL ENTERPRISE BASIS - Unaudited(In millions) For the Years Ended December 31, 2014 2013 2012 2011 2010Portion of rentals representing interest$85 $71 $46 $41 $45Capitalized interest27 28 101 112 83Other interest and fixed charges201 167 90 60 1Total fixed charges (A)$313 $266 $237 $213 $129Earnings-pretax income with applicable adjustments (B)$4,194 $3,518 $5,423 $3,848 $1,063Ratio of (B) to (A)13.4 13.2 22.9 18.1 8.2Exhibit 21.1MARATHON PETROLEUM CORPORATIONLIST OF SUBSIDIARIESas of December 31, 2014 Name of SubsidiaryJurisdiction of Organization/Incorporation*Ascension Pipeline Company, LLCDelaware Blanchard Holdings Company LLCDelaware Blanchard Pipe Line Company LLCDelaware Blanchard Refining Company LLCDelaware Blanchard Terminal Company LLCDelaware Bonded Oil CompanyDelaware Buckeye Assurance CorporationVermont Catlettsburg Refining, LLCDelaware*Centennial Pipeline LLCDelaware Cincinnati BioRefining Corp.Delaware Cincinnati Renewable Fuels LLCDelaware*Enchi CorporationDelaware*Explorer Pipeline CompanyDelaware*Gravcap, Inc.Delaware*Green Bay Terminal CorporationWisconsin*Guilford County Terminal Company, LLCNorth Carolina Hardin Assurance Ltd.Bermuda Hardin Street Holdings LLCDelaware Hardin Street Marine LLCDelaware Hardin Street Terminals LLCDelaware Hardin Street Transportation LLCDelaware Hess Express of Virginia, LLCVirginia Hess Mart of Massachusetts, LLCMassachusetts Hess Mart of Virginia, LLCVirginia Hess Realty LLCDelaware Hess Retail Holdings LLCDelaware Hess Retail Operations LLCDelaware Hess Retail Services, Inc.New Hampshire Hess Retail Stores LLCDelaware Hess Wilco Holdings, LLCDelaware*Illinois Extension Pipeline Company, L.L.C.Delaware*Johnston County Terminal, LLCDelaware Lincoln Pipeline LLCDelaware*LOCAP LLCDelaware*LOOP LLCDelaware Mannheim Terminal and Warehousing Service CompanyIllinois Marathon Canada Marketing, Ltd.Delaware Marathon Carbon Management LLCDelaware Marathon Petroleum Company Canada, Ltd.Alberta Marathon Petroleum Company LPDelaware Marathon Petroleum Logistics Services LLCDelaware Marathon Petroleum Service CompanyDelaware Marathon Petroleum Supply LLCDelaware Marathon Petroleum Trading Canada LLCDelaware Marathon Pipe Line CompanyNevada*Marathon Pipe Line LLCDelaware Marathon PrePaid Card LLCOhio Marathon Renewable Fuels Corp.Delaware Marathon Renewable Supply LLCDelaware Merit Oil of Connecticut, Inc.Connecticut Merit Oil of Delaware L.P.Delaware Merit Oil of Delaware, Inc.Delaware MPC Investment Fund, Inc.Delaware MPC Investment LLCDelaware MPC LOOP Holdings LLCDelaware MPC Trade Receivables Company LLCDelaware MPL Investment LLCDelaware MPL Louisiana Holdings LLCDelaware MPLX GP LLCDelaware MPLX Logistics Holdings LLCDelaware*MPLX LPDelaware*MPLX Operations LLCDelaware*MPLX Pipe Line Holdings LPDelaware*MPLX Terminal and Storage LLCDelaware*Muskegon Pipeline LLCDelaware Niles Properties LLCDelaware*North Dakota Pipeline Company LLCDelaware*Ohio River Pipe Line LLCDelaware*Oil Insurance LimitedBermuda*Oil Spill Response LimitedEngland & Wales*Port Everglades Environmental Corp.Florida*Resource Environmental, L.L.C.Delaware South Houston Green Power, LLCDelaware Speedway LLCDelaware Speedway Petroleum CorporationDelaware Speedway Prepaid Card LLCOhio Speedway.com LLCDelaware Starvin Marvin, Inc.Delaware*The Andersons Albion Ethanol LLCOhio*The Andersons Clymers Ethanol LLCOhio*The Andersons Ethanol Investment LLCOhio*The Andersons Marathon Ethanol LLCDelaware Wilco Food Services LLCDelaware Wilco Transportation LLCDelaware WilcoHess LLCDelaware Williston Basin Pipe Line LLCDelaware*WIP, LLCIndiana*Wolverine Pipe Line CompanyDelaware Woodhaven Cavern LLCDelaware *Indicates a company that is not wholly owned directly or indirectly by Marathon Petroleum CorporationExhibit 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-197130, 333-197128, and 333-197126) and FormS-8 (No. 333-181007, 333-175245 and 333-175244) of Marathon Petroleum Corporation of our report dated February 27, 2015 relating to the financialstatements and the effectiveness of internal control over financial reporting, which appears in this Form 10‑K. /s/PricewaterhouseCoopers LLPToledo, OhioFebruary 27, 2015Exhibit 24.1POWER OF ATTORNEYKNOW ALL BY THESE PRESENTS, that each of the undersigned officers and directors of Marathon Petroleum Corporation, a Delaware corporation,hereby constitutes and appoints Gary R. Heminger, Donald C. Templin and John J. Quaid, and each of them, as his or her true and lawful attorney orattorneys-in-fact, with full power of substitution and revocation, for each of the undersigned and in the name, place, and stead of each of the undersigned, tosign on behalf of each of the undersigned an Annual Report on Form 10-K for the fiscal year ended December 31, 2014 pursuant to Section 13 of theSecurities Exchange Act of 1934 and to sign any and all amendments to such Annual Report, and to file the same, with all exhibits thereto, and otherdocuments in connection therewith including, without limitation, a Form 12b-25 with the Securities and Exchange Commission, granting to said attorney orattorneys-in-fact, and each of them, full power and authority to do so and perform each and every act and thing requisite and necessary to be done in andabout the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneyor attorneys-in-fact or any of them or their substitute or substitutes may lawfully do or cause to be done by virtue thereof.This power of attorney may be executed in multiple counterparts, each of which shall be deemed an original with respect to the person executing it.IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the 27th day of February, 2015. /s/ Gary R. Heminger /s/ Donald C. TemplinGary R. Heminger Donald C. TemplinPresident, Chief Executive Officer and Director Senior Vice President and Chief Financial Officer(principal executive officer) (principal financial officer) /s/ John J. Quaid /s/ Evan BayhJohn J. Quaid Evan BayhVice President and Controller Director(principal accounting officer) /s/ David A. Daberko /s/ Steven A. DavisDavid A. Daberko Steven A. DavisDirector Director /s/ William L. Davis /s/ Donna A. JamesWilliam L. Davis Donna A. JamesDirector Director /s/ Charles R. Lee /s/ James E. RohrCharles R. Lee James E. RohrDirector Director /s/ Seth E. Schofield /s/ John W. SnowSeth E. Schofield John W. SnowDirector Director /s/ John P. Surma /s/ Thomas J. UsherJohn P. Surma Thomas J. UsherDirector Chairman of the Board and DirectorExhibit 31.1MARATHON PETROLEUM CORPORATIONCERTIFICATION PURSUANT TO SECTION 302 OFTHE SARBANES-OXLEY ACT OF 2002I, Gary R. Heminger, certify that:1.I have reviewed this report on Form 10-K of Marathon Petroleum Corporation;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to makethe statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered bythis report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and15d-15(f)) for the registrant and have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to usby others within those entities, particularly during the period in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed underour supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accounting principles;(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonablylikely to materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’sinternal control over financial reporting.Date:February 27, 2015 /s/ Gary R. Heminger Gary R. Heminger President and Chief Executive OfficerExhibit 31.2MARATHON PETROLEUM CORPORATIONCERTIFICATION PURSUANT TO SECTION 302 OFTHE SARBANES-OXLEY ACT OF 2002I, Donald C. Templin, certify that:1.I have reviewed this report on Form 10-K of Marathon Petroleum Corporation;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to makethe statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered bythis report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respectsthe financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and15d-15(f)) for the registrant and have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to usby others within those entities, particularly during the period in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed underour supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accounting principles;(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonablylikely to materially affect, the registrant’s internal control over financial reporting; and5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’sinternal control over financial reporting.Date:February 27, 2015 /s/ Donald C. Templin Donald C. Templin Senior Vice President and Chief Financial OfficerExhibit 32.1CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of Marathon Petroleum Corporation (the “Company”) on Form 10-K for the period ending December 31, 2014 as filedwith the Securities and Exchange Commission on the date hereof (the “Report”), I, Gary R. Heminger, President and Chief Executive Officer of the Company,certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany.February 27, 2015 /s/ Gary R. Heminger Gary R. Heminger President and Chief Executive Officer Exhibit 32.2CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of Marathon Petroleum Corporation (the “Company”) on Form 10-K for the period ending December 31, 2014 as filedwith the Securities and Exchange Commission on the date hereof (the “Report”), I, Donald C. Templin, Senior Vice President and Chief Financial Officer ofthe Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany.February 27, 2015 /s/ Donald C. Templin Donald C. Templin Senior Vice President and Chief Financial Officer Marathon Petroleum Corporation | 2014 Annual Report | Dividend Reinvestment and Direct Stock Purchase Plan The Dividend Reinvestment and Direct Stock Purchase Plan provides stockholders with a convenient way to purchase additional shares of Marathon Petroleum Corporation common stock through investment of cash dividends or through optional cash payments. Stockholders of record can request a copy of the Plan Prospectus and an authorization form from Computershare. Beneficial holders should contact their brokers. Book-entry Form of Stock Ownership Marathon Petroleum Corporation exclusively maintains book-entry form of stockholder ownership. Account statements issued by stock transfer agent, Computershare, shall serve as stockholders’ record of ownership. Questions regarding stock ownership should be directed to Computershare. Taxpayer Identification Number Federal law requires that each stockholder provide a certified taxpayer identification number (TIN) for his/her stockholder account. For individual stockholders, your TIN is your Social Security number. If you do not provide a certified TIN, Computershare may be required to withhold 28 percent for federal income taxes from your dividends. Address Change It is important that you notify Computershare immediately, by phone, in writing or by fax, when you change your address. Seasonal addresses can be entered for your account. Stock Return Performance Graph The following performance graph compares the cumulative total return, assuming the reinvestment of dividends, of a $100 investment in our common stock from June 30, 2011, (the effective date of our spinoff from Marathon Oil Corporation) to Dec. 31, 2014, compared to the cumulative total return of a $100 investment in the S&P 500 Index and an index of peer companies (selected by us) for the same period. Our peer group consists of the following companies that engage in domestic refining operations: BP PLC, Royal Dutch Shell PLC, Chevron Corporation, HollyFrontier Corporation, Phillips 66 (ConocoPhillips prior to May 1, 2012), Tesoro Corporation, ExxonMobil Corporation, and Valero Energy Corporation. The following performance graph is not “soliciting material” and will not be deemed to be filed with the Securities and Exchange Commission (SEC) or incorporated by reference into any of MPC’s filings with the SEC, except to the extent that we specifically incorporate it by reference into any such filings. Comparison of Cumulative Total Return on $100 Invested in MPC Common Stock on June 30, 2011 vs. S&P 500 Index and Peer Group Index $250 $200 $150 $100 $50 $0 6/30/11 12/31/11 12/31/12 12/31/13 12/31/14 MPC Peer Group Index Standard & Poor’s 500 Index Total Return Marathon Petroleum Corporation S&P 500 Index Peer Group Index 6/30/11 100.00 100.00 100.00 12/31/11 81.37 96.31 103.21 12/31/12 158.03 111.72 114.64 12/31/13 234.79 147.91 138.38 12/31/14 235.80 168.15 128.79 CORPORATE INFORMATION Corporate Headquarters 539 South Main St. Findlay, OH 45840 Marathon Petroleum Corporation Website www.marathonpetroleum.com Investor Relations Office 539 South Main St. Findlay, OH 45840 Geri Ewing, Director Investor Relations (419) 421-2071 Teresa Homan, Manager Investor Relations (419) 421-2965 Notice of Annual Meeting The 2015 Annual Meeting of Shareholders will be held in Findlay, Ohio, on April 29, 2015. Independent Accountants PricewaterhouseCoopers LLP One Seagate, Suite 1800 Toledo, OH 43604-1574 Stock Exchange Listing New York Stock Exchange Common Stock Symbol MPC Principal Stock Transfer Agent Computershare Shareholder correspondence should be mailed to: P.O. Box 30170 College Station, TX 77842-3170 Overnight correspondence should be mailed to: 211 Quality Circle, Suite 210 College Station, TX 77845 (866) 820-7494 (toll free – U.S., Canada, Puerto Rico) (781) 575-2176 (other non-U.S. jurisdictions) web.queries@computershare.com Annual Report on Form 10-K Additional copies of the Marathon Petroleum Corporation 2014 Annual Report may be obtained by contacting: Public Affairs 539 South Main St. Room 312-M Findlay, OH 45840 (419) 421-3577 Dividends Dividends on common stock, as may be declared by the board of directors, are typically paid mid-month in March, June, September and December. Dividend Checks Not Received / Electronic Deposit If you do not receive your dividend check on the appropriate payment date, we suggest that you wait at least 10 days after the payment date to allow for any delay in mail delivery. After that time, advise Computershare by phone or in writing to issue a replacement check. You may contact Computershare to authorize electronic deposit of your dividends into your bank account. 24 | Marathon Petroleum Corporation | 2014 Annual Report Marathon Petroleum Corporation ® MARATHON PETROLEUM CORPORATION 539 South Main St. Findlay, OH 45840 Main Street America is powered by the fuels and other products produced by MPC. Non GAAP Financial Measures Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial measure provided in this Annual Report. An MPLX LP adjusted EBITDA reconciliation to the nearest GAAP financial measure is included on page 6. EBITDA is not defined by GAAP and should not be considered in isolation or as an alternative to net income or other financial measures prepared in accordance with GAAP. Disclosures Regarding Forward-Looking Statements This summary annual report wrap includes forward-looking statements. You can identify our forward-looking statements by words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “plan,” “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. 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. In accordance with “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we have included in our attached Form 10-K for the year ended Dec. 31, 2014, 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. 

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