Marathon Petroleum Annual Report 2017

FY2017 Annual Report · Marathon Petroleum

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2017 | ANNUAL REPORT

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MARATHON PETROLEUM CORPORATION | 2017 ANNUAL REPORT

ORPO

DELIVERING SIGNIFICANT RETURNS
FOR OUR SHAREHOLDERS
Since becoming an independent company July 1, 2011, to year-end 2017

MPC Has Returned More Than

$13

BILLION

To Shareholders

CONTENTS

1
2
4
6
10
11
12

CHAIRMAN AND CEO LETTER

REFINING AND MARKETING

SPEEDWAY

MIDSTREAM

FINANCIAL AND OPERATIONAL HIGHLIGHTS

BOARD OF DIRECTORS

CORPORATE OFFICERS

On cover: MPC’s refinery in Garyville, Louisiana
On this page: MPC’s Speedway store in Delaware, Ohio

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From the Chairman and CEO

Fellow shareholders,

Marathon Petroleum Corporation delivered a strong operational and
financial performance across the business for our shareholders in 2017.
Our Refining and Marketing segment substantially increased earnings, and
our Speedway and Midstream segments each turned in record results.

Our earnings in 2017 were $3.43 billion, or $6.70 per diluted share,
including a tax benefit of approximately $1.5 billion, or $2.93 per diluted
share, resulting from the Tax Cuts and Jobs Act.

Our Refining and Marketing segment’s exceptional year was driven
ar was driven
by higher crack spreads and high utilization rates, and our refineries
our refineries
achieved numerous monthly process unit and production records. MPC
tion records. MPC
is now the second-largest U.S. refiner on a crude-throughput basis, and
ughput basis, and
our Galveston Bay and Garyville refineries are the nation’s second- and
ion’s second- and
third-largest refineries, respectively.

Speedway achieved another record performance, with strong earnings
h strong earnings
from light product sales, an increase in same-store merchandise sales,
erchandise sales,
lower operating expenses and contributions from its travel center
ravel center
joint venture.

MPC’s Midstream segment, which primarily reflects the results of
e results of
our sponsored master limited partnership, MPLX LP, reported
eported
record-setting results, driven largely by gathered, processed and
cessed and
fractionated volume growth.

Additionally, we executed on our previously announced strategic
d strategeg
egic
actions throughout 2017, completing them on Feb. 1, 2018. These
2018. Theseese
ese
actions nearly double the size of MPLX, improve its cost of capital,
st of capital,
and provide shareholders a clear valuation for MPC’s interests.
interests.

MPC returned more than $3 billion of capital to MPC shareholders
shareholders
through dividends and share repurchases in the year, supported
supported
in part by proceeds from the year’s dropdowns. On Jan. 29, 2018,
an. 29, 2018,
we announced a 15 percent increase in the quarterly dividend,
dividend,
representing a 26.5 percent compound annual growth rate in the
h rate in the
dividend since 2011.

MPC has tremendous momentum going into 2018. We expect the global
e expect the global
and U.S. macroeconomic picture to be solid and support strong demand
ort strong demand
for our products.

As we continue our critical work of providing the fuels and petrochemicals
and
andand petrochemicals
that make modern life possible, we never lose sight of our responsibility to
our resesponsibility to
operate safely and efficiently. As investors who care about environmental
bout envirvironmental
vir
stewardship and the welfare of future generations, we invite you to read
u to
e invite you toto read
our Perspectives on Climate-Related Scenarios report, which enhances
t, which enhancnces
our disclosures around climate-related strategies, risks and opportunities.
itie
s and opportunitieties.

resp

nce

Our experienced board and leadership team remain committed to
committed to
delivering long-term value for the benefit of all investors. We thank you
ors. We thank you
for investing in MPC and contributing to our success.

Sincerely,

Gary R. Heminger
Chairman and Chief Executive Officer

$16.5 26.5%

BILLION COMPOUND

CUMULATIVE NET INCOME
ATTRIBUTABLE TO MPC
SINCE SPINOFF

ANNUAL
GROWTH RATE
IN BASE DIVIDEND
FROM SPINOFF
THROUGH FIRST
QUARTER 2
QUARTER 2018

TOTAL SHAREHOLDE
TOTAL SHAREHOLDER RETURN
SINCE SPINO
SINCE SPINOFF
Since becoming an independ
Since becoming an independent company
July 1, 2011, to year-en
July 1, 2011, to year-end 2017

275%
275%

252%
252%

175%
175%

133%

MPC
MPC

Peer
Peer
Group(1)
Group(1)

Refining
Refinin
Peers(2)
Peers

S&P
500

(1) Peer Group represents average T
(1) Peer Group represents average TSR of Andeavor
(formerly Tesoro), BP, Chevron, ExxonMobil,
(formerly Tesoro), BP, Chevron, E
HollyFrontier, Phillips 66, Royal D
HollyFrontier, Phillips 66, Royal Dutch Shell and
Valero
Valero

(2) Refi ning Peers represents averag
(2) Refi ning Peers represents average TSR of Andeavor,
HollyFrontier, PBF Energy, Phillip
HollyFrontier, PBF Energy, Phillips 66 and Valero

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MARATHON PETROLEUM CORPORATION • 2017 ANNUAL REPORT 1

INCREASING EXPORT CAPACITY
Thousand Barrels Per Day

510*

395

345

150

2012

2014

2016

2017

2020

*Estimated

REFINING AND MARKETING
MPC remains focused on continuing to capture
the competitive advantages of our flexible and
integrated refining system, enhancing margins
through investment and process improvements.

In 2017, Refining and Marketing delivered a
substantial increase in full-year segment income
from operations of $2.32 billion, a nearly $1 billion
increase over 2016. We operated exceptionally
well throughout 2017 and were able to capture
strong crack spreads and wider crude differentials
across our system. We also achieved numerous
monthly process unit and production records
throughout the year, including monthly records
for crude throughput, and gasoline and distillate
production. As a result, MPC is now the second-
largest U.S. refiner on a crude-throughput basis

2 MARATHON PETROLEUM CORPORATION • 2017 ANNUAL REPORT

Export dock at MPC’s Galveston Bay refinery

and Galveston Bay and Garyville are the nation’s
second- and third-largest refineries, respectively.

February 2018 marked the five-year anniversary
of our acquisition of the Galveston Bay refinery.
Since 2013, MPC has dramatically improved the
environmental and safety performance of the
refinery and advanced its operational excellence,
while cutting unplanned downtime in half and
lowering operating expenses nearly 25 percent.

In 2018, we plan significant investment in our
Refining and Marketing segment, including
approximately $400 million in growth capital
focused on optimizing the Galveston Bay refinery,
upgrading residual fuel oils to higher-value
products, maximizing distillate production, and

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TOTAL REFINERY
THROUGHPUTS
Million Barrels Per Day

1.89

1.85

1.94

MECHANICAL
AVAILABILITY*
Percentage of Combined
Unit Capacity

95.5

94.9

95.7

MPC’s refinery in Catlettsburg, Kentucky

2016

2017

2015
* Rated capacity of all MPC operations, less lost capacity due to planned and
unplanned outages, divided by rated capacity

2015

2017

2016

expanding light product placement flexibility,
including exports.

Looking ahead, we are also pursuing several
projects at our Garyville refinery that we
believe further enhance our ability to
benefit from the adoption of low-sulfur fuels
requirements scheduled to take effect in 2020,
and to take advantage of robust and growing
export opportunities.

Employees at MPC’s refinery in
Robinson, Illinois

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MARATHON PETROLEUM CORPORATION • 2017 ANNUAL REPORT 3

SPEEDWAY
In 2017, Speedway, the second-largest chain of
company-owned and -operated retail gasoline
and convenience stores in the United States,
achieved a record full-year performance. This was
driven by strong earnings from light product sales,
an increase in same-store merchandise sales,
lower operating expenses and contributions from
its travel center joint venture.

It was Speedway’s sixth straight year of record
results and second consecutive year generating
$1 billion of annual EBITDA, reinforcing the
strategic value of this high-performing, stable
cash-flow business.

In September 2017, MPC’s board of directors
concluded, after a rigorous review led by an
independent committee of the board, that long-
term shareholder value is best optimized by
Speedway remaining an integrated part of MPC.

Throughout Speedway, we are building new
stores, as well as remodeling and rebuilding
existing stores. In 2017, we opened 24 new
stores and five rebuilds, and completed 315
remodel projects, with more of these high-return
investments planned for 2018.

A Speedway store in Hartland, Michigan

~6 MILLION

ACTIVE MEMBERS OF THE
SPEEDY REWARDS® PROGRAM IN 2017*

*12-month rolling average

convenience stores in

~2,740
21states

4 MARATHON PETROLEUM CORPORATION • 2017 ANNUAL REPORT

A Speedway store in Enon, Ohio

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In 2018, we plan to invest approximately
$530 million in Speedway, a $150 million
increase from last year. This significant
increase in capital allocation is primarily
targeted for construction of new store
locations, as well as remodeling and rebuilding
existing locations, consistent with MPC’s
commitment to aggressively grow the business
and build upon its industry-leading position.

Speedway finished the year with approximately
2,740 convenience stores in 21 states.
Speedway’s Speedy Rewards loyalty program
averaged approximately 6 million active
members in 2017. We believe Speedy Rewards
is among the key reasons customers choose
Speedway over competitors, and it continues
to drive significant value for both Speedway
and our Speedy Rewards members.

SPEEDWAY
MERCHANDISE SALES
$ Billion

SPEEDWAY
MERCHANDISE MARGIN
$ Billion

4.88

5.01

4.89

1.44

1.40

1.37

975*

2015

2016

2017

2015

2016

2017

SPEEDWAY RECONCILIATION SEGMENT EBITDA
TO SEGMENT INCOME FROM OPERATIONS

(in millions)
Speedway income from operations
Plus: depreciation and amortization

2017
732
275

2016
734
273

Speedway segment EBITDA

1,007

$ 1,007

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MARATHON PETROLEUM CORPORATION • 2017 ANNUAL REPORT 5

AS PART OF ITS 2017 STRATEGIC ACTIONS,
MPC CONTRIBUTED TO MPLX ASSETS AND
SERVICES PROJECTED TO GENERATE
ANNUAL EBITDA OF APPROXIMATELY

$1.4

Billion

The final transactions closed on Feb. 1, 2018

MPLX’s docks at the MPC refinery in Garyville, Louisiana

from the acquisitions in the first quarter of 2017
of the Ozark Pipeline and our indirect ownership
interest in the Bakken Pipeline system, which
includes the Dakota Access Pipeline.

MPLX has undergone transformative changes
since MPC formed the partnership in 2012
as part of its strategy to grow its midstream
platform. In late 2015, the partnership expanded
into the midstream natural gas business with
the addition of MarkWest Energy Partners. Early
in 2017, we announced a strategic action plan
to enhance value for our investors, which we
completed in February 2018. As part of those
strategic actions, we executed the dropdown of
assets and services to MPLX that are projected
to generate approximately $1.4 billion of annual
EBITDA, adding high-quality, fee-based revenue
streams to MPLX and further diversifying the
partnership’s earnings.

We also converted MPC’s general partner
economic interests in MPLX, including its incentive
distribution rights (IDRs), into common units,
providing a clear valuation for MPC’s interests
in MPLX. This eliminates the partnership’s IDR

MIDSTREAM
MPC’s Midstream segment, which primarily
reflects the results of our sponsored master
limited partnership, MPLX LP (NYSE: MPLX),
reported record financial results in 2017,
contributing $1.34 billion in segment income from
operations for the year, a 28 percent increase
from 2016. The record-setting performance was
largely driven by higher gathered, processed and
fractionated volumes and changes in natural gas
and NGL prices. Segment results also benefited

6 MARATHON PETROLEUM CORPORATION • 2017 ANNUAL REPORT

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MPLX’s Sherwood complex in West Virginia

Laying pipe for MPLX’s Cornerstone Pipeline

MPLX’s butane cavern in Robinson, Illinois

burden and improves its cost of capital. These
strategic actions create mutual benefits for both
companies and position MPLX extraordinarily well
to deliver long-term, sustainable growth for all of
its unitholders, including MPC.

additional fractionation capacity in the prolific Marcellus,
Utica and Permian basins. The partnership plans to
construct additional crude oil and refined products
infrastructure, including an export-capacity expansion
at MPC’s Galveston Bay refinery.

MPLX also continues to pursue organic growth
opportunities, with plans for an additional eight
processing plants representing nearly 1.5 billion
cubic feet per day of incremental processing
capacity, as well as 100,000 barrels per day of

MARATHON PETROLEUM CORPORATION • 2017 ANNUAL REPORT 7

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MARATHON BRAND AND SPEEDWAY LOCATIONS
Extensive Retail Network

64
42

305
814

123
285

311
647

489
862

147
573

42
401

268

4
284

235
6

12
109
1

116
69

62
119

277
224

60
114

52
110

MMaMaM rathon
Marathon
Brand
Brand

Speedway
Speedway

33. 3. 3. 33. 3. 31,1, 1, 11, 11, 1, 201201201201012012012010120100 77777777777
As of Dec. 31, 2017
AsAs AAAs As As As AsAAsAAsA of ofof of of of ofooo DecDecDecDececDecDeceDecDeDeD

241
629

MARATHON BRAND

owned and operated by

independent
entrepreneurs
~5,600 branded locations
in 20 states and the District of Columbia
in

2017 gasoline and distillate sales of

4.4 billion gallons

SPEEDWAY
~2,740 stores

located in

21 states

2017 gasoline and distillate sales of

5.8 billion gallons

8 MARATHON PETROLEUM CORPORATION • 2017 ANNUAL REPORT

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ABOUT US

CRUDE OIL
REFINING CAPACITY

BPCD

NCI*

Galveston Bay 571,000

Garyville

Detroit

Robinson

556,000

139,000

245,000

Catlettsburg

277,000

Canton

93,000

11.9

11.1

9.7

9.5

9.2

7.9

TOTAL

1,881,000

10.6**

* Nelson Complexity Index (NCI) calculated
per Oil & Gas Journal NCI formula
**Weighted Average NCI
BPCD: barrels per calendar day
Source: MPC Data

63Owned and

part-owned
light product
terminals

130Third-party

light product
terminals

18Owned

asphalt
terminals

2Third-party

asphalt
terminals

owns, leases or has ownership interest in

10,800 Approximate miles of pipeline that MPC
towboats 208Owned barges 24Leased
18Inland
transport trucks 2,018Owned or
180Owned

leased railcars

waterway

barges

INCLUDES MPLX LP
INCLUDES MPLX LP

As of Dec. 3c 311, 2017
As of Dec. 31, 2017

Marketing Area
Marketing Area

MPC Refineries
MPC Refineries

Light Product Terminals
Light Product Terminals

MPC Owned and Part-owned
MPC Owned and Part-owned

Third Party
Third Party

Asphalt/Heavy Oil Terminals
Asphalt/Heavy Oil Terminals

MPC Owned
MPC Owned

Third Party
Third Party

Water Supplied Terminals
Water Supplied Terminals

Coastal
Coastal

Inland
Inland

Pipelines
Pipelines

MPC Owned & Operated
MPC Owned & Operated

MPC Interest: Operated by MPLX
MPC Interest: Operated by MPLX

MPC Interest: Operated by Others
MPC Interest: Operated by Others

Pipelines Used by MPC
Pipelines Used by MPC

Renewable Fuels
Renewable Fuels

Ethanol Facility
Ethanol Facility

Biodiesel Facility
Biodiesel Facility

®
®

MPLX Terminals:
MPLX Terminals:
Owned and Part-owned
Owned and Part-owned

MPLX Pipelines:
MPLX Pipelines:
Owned & Operated
Owned & Operated

Barge Dock
Barge Dock

Cavern
Cavern

MPLX Interest Pipelines:
MPLX Interest Pipeline
Operated by Others
Operated by Others

MPLX Operated Pipelines:
MPLX Operated Pipeli
Owned by Others
Owned by Others

MarkWest Complex

Marine Repair Facility

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MARATHON PETROLEUM CORPORATION • 2017 ANNUAL REPORT 9

FINANCIAL AND OPEROP
FINANCIAL AND OPERATIONAL HIGHLIGHTS

2017

2016

2015

ReReReReveveveveve
Revenues ($mm)

Per-common-share data
PePeer-r-r-r-r
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InnnnnnnInncocccocoocoommmmmemememememm ffffrooorororom mm m mmm opopopopperererrrataaa iooooonsnsnsnsnsns (((((($m$m$m$m$m$m$mmmm)mmm)m
Income from operations ($mm)

Net income attributable to MPC ($mm)
mmmm)m)m)
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mm = millions
mm mmm m = mm= mm
iononionionssss
mm mmmmmm = m= mmmmmilliillillili
mbpmbpbpd =d =d =d
mbpmbpmbpbpmbpd =d d d =d thththhhhououousousousousandandandndndddddd bbabababbbbarrerreels l perperererr dadayyyy

mbpd = thousand barrels per day17ReReReReR veeveveveenunununununununnununueeseseseses ((((($m$m$m$m$$mm)m)m)m)m)m)

Refinery throughput (other charge and blendstocks – mbpd)

(a) a (m(m(mm)
Weighted average shares outstanding – diluted(a) (mm)
eeees ss ss ououtststs
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(a) ))) (m(m(m(m(m(mmm)m)m)m
Weighted average shares outstanding – basic(a) (mm)
(a)
WeWeWeWeWeWeWeWeWeiiiii
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Capital expenditures and investments(c) ($mm)

Net income attributable to MPC – diluted ($)
) ))
NNNNNNetetetetetetetete iiiincn omommmmeeeee atatattrtrtributabbbbbleleleleleee ttttttoooooo MPMPMPMPMPPPPCCCCCCCCC ––––– diddididididdd lulululuteteteted dd d dd d ($($($($($((

ttababablelele ttt
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Net income attributable to MPC – basic ($)

Refinery throughput (crude oil – mbpd)

CCaCaCaCaCaCaaashshshshs aaaandnddd ccccasasasashhh eeeee
CCCaCaCaCCashshsh aaaannnd ccaash eqqqeqeqeqqqquiuiuiuiuiuiuivavvvavavavavalelelelelentntntntntn ss s ss ($$($($($($mmmmmm )
Cash and cash equivalents ($mm)

Total refinery throughput (mbpd)

Refined product yields (mbpd)

Total debt(b) ($mm)
(b(b)(b) ($($$$($$$$mmmmmmmmmmmmm)) ) ))
ToToToToT tatatatallll dedededebtbtbtbt(b) )(b)
($($($($($$$$$mmmmmmmmmmmmm
ToToTootattatalll dded bt

Equity ($mm)

DDDDDDDivvvivididididdenenenennnndsdsdsdsdsdsdsdsds ((($)$)
Dividends ($)

Distillates

Gasoline

aleleelelel ntntntntntntn s ss s s ($($($(

bbutututtabababblelele

ououououououououtstststststsstttatata

Propane

Feedstocks and special products

Heavy fuel oil

Asphalt

Total refined product yields

R&M refined product sales volume(d) (mbpd)

R&M margin(e) ($/barrel)

Number of outlets (Marathon brand)

Number of convenience stores at year-end (Speedway)

Speedway gasoline and distillate sales (mm gallons)

Speedway merchandise sales ($mm)

Speedway merchandise margin ($mm)(g)

Crude oil and refined product pipeline throughput (mbpd)

Gathering system throughput (mm cubic feet/day)(h)

Natural gas processed (mm cubic feet/day)(h)

C2+ NGLs fractionated (mbpd)(h)

Number of employees

Speedway gasoline and distillate margin(f) ($/gallon)

0.1738

74,733

3,969

3,432

6.76

6.70

1.52

507

512

3,011

12,946

20,828

3,856

1,765

179

1,944

932

641

277

1,986

2,301

12.60

5,617

2,744

5,799

4,893

1,402

3,377

3,608

6,460

394

63,339

72,051

2,378

1,174

4,692

2,852

2.22

2.21

1.36

528

530

887

10,572

20,203

3,069

1,699

151

1,850

900

617

241

1,883

2,259

11.16

5,455

2,733

6,094

0.1656

5,007

1,435

2,948

3,275

5,761

335

5.29

5.26

1.14

538

542

1,127

11,925

19,675

16,283

1,711

177

1,888

913

603

281

1,919

2,289

15.16

5,607

2,766

6,038

0.1823

4,879

1,368

2,829

3,075

5,468

307

43,800

44,460

45,440

(a) The number of weighted average shares for 2017, 2016 and 2015 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) Non-GAAP financial measure, defined as sales revenue less cost of refinery inputs and
purchased products, divided by total refinery throughputs. Excludes lower of cost or market inventory valuation adjustment. See reconciliation in
the MPC Annual Report on Form 10-K for the year ended Dec. 31, 2017, filed with the SEC. (f) Non-GAAP financial measure, defined as 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. Excludes lower of cost or market inventory valuation adjustment. See reconciliation in the MPC Annual Report
on Form 10-K for the year ended Dec. 31, 2017, filed with the SEC. (g) Non-GAAP financial measure, defined as the price paid by consumers less
the cost of merchandise. See reconciliation in the MPC Annual Report on Form 10-K for the year ended Dec. 31, 2017, filed with the SEC. (h) Includes
amounts related to unconsolidated equity method investments. Includes the MarkWest results beginning on the Dec. 4, 2015, merger date.

10 MARATHON PETROLEUM CORPORATION • 2017 ANNUAL REPORT
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BOARD OF DIRECTORS

Standing (left to right):

Evan Bayh
Senior Advisor, 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.

Frank M. Semple
Retired Chairman, President and
CEO, MarkWest Energy Partners,
L.P. Mr. Semple joined MarkWest in
2003 as president and CEO, and
was elected chairman in 2008. He
completed a 22-year career with
The Williams Companies and WilTel
Communications prior to MarkWest.

Seated (left to right):

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 and Accounting, president
of Speedway SuperAmerica LLC,
and president of Marathon Ashland
Petroleum LLC.

J. Michael Stice
Dean, Mewbourne College of Earth &
Energy, The University of Oklahoma.
He is a former director of MarkWest
Energy Partners, L.P. Mr. Stice’s career
includes leadership roles with Conoco
and ConocoPhillips. He also was chief
executive officer and a director of
Chesapeake Midstream Partners, L.P.,
later called Access Midstream.

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.

James E. Rohr
Retired 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.

Charles E. Bunch
Retired Chairman and CEO, PPG
Industries, Inc. Mr. Bunch joined PPG
in 1979 and held various positions of
increasing responsibility before being
appointed president, chief operating
officer and board member in 2002,
and chairman and CEO in 2005.
He retired as CEO in 2015 and as
chairman in 2016.

Abdulaziz F. Alkhayyal
Retired Senior Vice President,
Industrial Relations, Saudi Aramco.
Mr. Alkhayyal joined Saudi Aramco in
1981 and held positions of increasing
responsibility before being named
senior vice president, refining,
marketing and international in 2001,
and senior vice president, industrial
relations in 2007.

Donna A. James
Managing Director, Lardon & Associates, LLC.
Before establishing Lardon & Associates, Ms.
James was president of Nationwide Strategic
Investments. Prior to being president, Ms. James
held various executive positions at Nationwide.
Ms. James is founder and former chair of The
Center for Healthy Families and is the former
chair of the National Women’s Business Council.

Gary R. Heminger
Chairman and CEO, Marathon Petroleum
Corporation. He is also the chairman and
CEO of MPLX GP LLC. Mr. Heminger joined
Marathon Oil Company in 1975 and held various
leadership positions, including head of Marathon’s
downstream operations beginning
in 2001. Mr. Heminger was named president
and CEO of Marathon Petroleum Corporation
in 2011, and chairman in 2016.

David A. Daberko
Retired chairman, National City Corp. Lead
Director, Marathon Petroleum Corporation.
Mr. Daberko joined National City Bank in 1968
and went on to hold a number of management
positions. He was named chairman of the
board and chief executive officer of National
City Corporation in 1995 and served in those
capacities until his retirement in 2007.

MARATHON PETROLEUM CORPORATION • 2017 ANNUAL REPORT 11
11

ROLEUM CORPORATION • 2017 ANNUAL REPORT
ROLEUM CORPORATION

2017 ANNUAL REP

58280.indd 11

3/7/18 10:09 AM

CORPORATE OFFICERS

Standing, starting with the back row (left to right):

D. Rick Linhardt
Vice President, Tax

Molly R. Benson
Vice President,
Corporate Secretary
and Chief Compliance
Officer

David L. Whikehart
Vice President,
Environment, Safety
and Corporate Affairs

David R. Sauber
Senior Vice
President, Human
Resources, Health
and Administrative
Services

Donald W. Wehrly
Vice President and
Chief Information
Officer

Suzanne Gagle
Vice President and
General Counsel

Brian K. Partee
Vice President,
Business
Development

John J. Quaid
Vice President
and Controller

Thomas M. Kelley
Senior Vice President,
Marketing

Rodney P. Nichols
Executive Vice
President of Human
Resources, Health and
Administrative Services
(Retired effective Jan. 1, 2018)

Timothy T. Griffith
Senior Vice President and
Chief Financial Officer

C. Michael Palmer
Senior Vice President,
Supply, Distribution
and Planning

Anthony R. Kenney
President, Speedway LLC

Raymond L. Brooks
Senior Vice President,
Refining

Thomas Kaczynski
Vice President,
Finance and
Treasurer

Chairman and Chief
Executive Officer

Seated (left to right):

Donald C. Templin
President

17 Gary R. Heminger

12 MARATHON PETROLEUM CORPORATION • 2017 ANNUAL REPORT

58280.indd 12

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

(Mark One)
È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the Fiscal Year Ended December 31, 2017
OR
‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from

to
Commission file number 001-35054
Marathon Petroleum Corporation
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

27-1284632
(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 Act

Title of Each Class
Common Stock, par value $.01

Name of Each Exchange on Which Registered
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes Í 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 Í
Indicate 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 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the
past 90 days. Yes Í 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 to be 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 that the registrant was required to submit and post such
files). Yes Í 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 best of 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 Form 10-K. Í
Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, a non-accelerated filer, a smaller
reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer Í Accelerated filer ‘ Non-accelerated filer ‘ Smaller reporting company ‘
Emerging growth company ‘
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act. ‘
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ‘ No Í
The aggregate market value of Common Stock held by non-affiliates as of June 30, 2017 was approximately $26.4 billion.
This amount is based on the closing price of the registrant’s Common Stock on the New York Stock Exchange on June 30,
2017. Shares of Common Stock held by executive officers and directors of the registrant are not included in the computation.
The registrant, solely for the purpose of this required presentation, has deemed its directors and executive officers to be
affiliates.
There were 476,059,729 shares of Marathon Petroleum Corporation Common Stock outstanding as of February 16, 2018.

Documents Incorporated By Reference
Portions of the registrant’s proxy statement relating to its 2018 Annual Meeting of Shareholders, to be filed with the Securities
and Exchange Commission pursuant 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 this Report.

Unless 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.

MARATHON PETROLEUM CORPORATION

Table of Contents

PART I

PART II

Item 1.

Business

Item 1A. Risk Factors

Item 1B. Unresolved Staff Comments

Item 2.

Item 3.

Properties

Legal Proceedings

Item 4. Mine Safety Disclosures

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and

Issuer Purchases of Equity Securities

Item 6.

Selected Financial Data

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of

Operations

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Item 8.

Item 9.

Financial Statements and Supplementary Data

Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure

Item 9A. Controls and Procedures

Item 9B. Other Information

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Item 11. Executive Compensation

Item 12.

Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters

Item 13. Certain Relationships and Related Transactions, and Director Independence

Item 14.

Principal Accountant Fees and Services

PART IV

Item 15. Exhibits and Financial Statement Schedules

Item 16.

Form 10-K Summary

SIGNATURES

Page

101

175

176

177

178

179

185

186

Throughout this report, the following company or industry specific terms and abbreviations are used:

GLOSSARY OF TERMS

ASC
ASR
ATB
barrel

bcf/d
DEI
EBITDA (a non-GAAP financial measure)
EIA
EPA
FASB
FCC
FERC
GAAP
IDR
LCM
LIBO Rate
LIFO
LLS
mbpd
mbpcd
Mcf
mmbpcd
MMcf/d
MMBtu
NYMEX
NYSE
NGL

PADD
OPEC
OSHA
OTC
ppb
ppm
RFS2

RIN
ROUX
SEC
STAR
TCJA
ULSD
USGC
UST
VIE
VPP
WTI

Accounting Standards Codification
Accelerated share repurchase
Articulated tug barges
One stock tank barrel, or 42 United States gallons liquid volume,
used in reference to crude oil or other liquid hydrocarbons.
One billion cubic feet per day
Designated Environmental Incidents
Earnings Before Interest, Tax, Depreciation and Amortization
United States Energy Information Administration
United States Environmental Protection Agency
Financial Accounting Standards Board
Fluid Catalytic Cracking
Federal Energy Regulatory Commission
Accounting principles generally accepted in the United States
Incentive Distribution Right
Lower of cost or market
London Interbank Offered Rate
Last in, first out
Louisiana Light Sweet crude oil, an oil index benchmark price
Thousand barrels per day
Thousand barrels per calender day
One thousand cubic feet of natural gas
Million barrels per calender day
One million cubic feet of natural gas per day
One million British thermal units per day
New York Mercantile Exchange
New York Stock Exchange
Natural gas liquids, such as ethane, propane, butanes and natural
gasoline
Petroleum Administration for Defense District
Organization of Petroleum Exporting Countries
United States Occupational Safety and Health Administration
Over-the-Counter
Parts per billion
Parts per million
Revised Renewable Fuel Standard program, as required by the
Energy Independence and Security Act of 2007
Renewable Identification Number
Residual Oil Upgrader Expansion
United States Securities and Exchange Commission
South Texas Asset Repositioning
Tax Cuts and Jobs Act
Ultra-low sulfur diesel
U.S. Gulf Coast
Underground storage tank
Variable interest entity
Voluntary Protection Program
West Texas Intermediate crude oil, an oil index benchmark price

Disclosures Regarding Forward-Looking Statements

This Annual Report on Form 10-K, particularly Item 1. Business, Item 1A. Risk Factors, Item 3. Legal
Proceedings, Item 7. Management’s Discussion and Analysis 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,” “could,” “design,”
“estimate,” “expect,” “forecast,” “goal,” “guidance,” “imply,” “intend,” “may,” “objective,” “opportunity,”
“outlook,” “plan,” “position,” “potential,” “predict,” “project,” “prospective,” “pursue,” “seek,” “should,”
“strategy,” “target,” “will,” “would” or other similar expressions that convey the uncertainty of future events or
outcomes. In accordance with “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995,
these statements are accompanied by cautionary language identifying important factors, though not necessarily
all such factors, that could cause future outcomes to differ materially from those set forth in the forward-looking
statements.

Forward-looking statements include, but are not limited to, statements that relate to, or statements that are subject
to risks, contingencies or uncertainties that relate to:

•

future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate
margins, merchandise margins, income from operations, net income or earnings per share;

anticipated volumes of feedstock, throughput, sales or shipments of refined products;

anticipated levels of regional, national and worldwide prices of crude oil, natural gas, NGLs 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

our share repurchase authorizations,
repurchases;

including the timing and amounts of any common stock

the adequacy of our capital resources and liquidity, including but not limited to, availability of
sufficient cash flow to execute our business plan;

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, activist investors 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 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
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

to significant business, economic, competitive,

regulatory and other

forward-looking statements. Differences between actual results 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;

availability and pricing of domestic and foreign supplies of natural gas, NGLs and crude oil and other
feedstocks;

the ability of the members of the OPEC to agree on and to influence crude oil price and production
controls;

availability and pricing of domestic and foreign supplies of refined products such as gasoline, diesel
fuel, jet fuel, home heating oil and petrochemicals;

foreign imports and exports of crude oil, refined products, natural gas and NGLs;

refining industry overcapacity or under capacity;

changes in producer customers’ drilling plans or in volumes of throughput of crude oil, natural gas,
NGLs, refined products or other hydrocarbon-based products;

changes in the cost or availability of third-party vessels, pipelines, railcars and other means of
transportation for crude oil, natural gas, NGLs, feedstocks and refined products;

changes to our capital budget, expected construction costs and timing of projects;

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, natural gas and NGLs, including seasonal
fluctuations;

political and economic conditions in nations that consume refined products, natural gas and NGLs,
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, the
expansion and retirement of refining capacity and the expansion and retirement of pipeline capacity,
processing, fractionation and treating facilities in response to market conditions;

completion of pipeline projects within the United States;

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, including strategic initiatives and actions;

risks and uncertainties associated with intangible assets, including any future goodwill or intangible
assets impairment charges;

the ability to realize the strategic benefits of joint venture opportunities;

accidents or other unscheduled shutdowns affecting our refineries, machinery, pipelines, processing,
fractionation and treating facilities or equipment, or those of our suppliers or customers;

unusual weather conditions and natural disasters, which can unforeseeably affect
availability of crude oil and other feedstocks and refined products;

the price or

acts of war, terrorism or civil unrest that could impair our ability to produce refined products, receive
feedstocks or to gather, process, fractionate or transport crude oil, natural gas, NGLs or refined
products;

•

state and federal environmental, economic, health and safety, energy and other policies and regulations,
including the cost of compliance with the renewable fuel standard program;

adverse changes in laws including with respect to tax and regulatory matters;

rulings, judgments or settlements and related expenses in litigation or other legal, tax or regulatory
matters, including unexpected environmental remediation costs, in excess of any reserves or insurance
coverage;

political pressure and influence of environmental groups upon policies and decisions related to the
production, gathering, refining, processing, fractionation, transportation and marketing of crude oil or
other feedstocks, refined products, natural gas, NGLs or other hydrocarbon-based products;

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, changes affecting the credit markets generally and our ability to manage such
changes;

capital market conditions and our ability to raise adequate capital to execute our business plan;

the costs, disruption and diversion of management’s attention associated with campaigns commenced
by activist investors; 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.

PART I

Item 1. Business

Overview

Marathon Petroleum Corporation (“MPC”) has 130 years of experience in the energy business with roots tracing
back to the formation of the Ohio Oil Company in 1887. 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. We are one of the largest natural gas processors in the United States and the largest processor and
fractionator in the Marcellus and Utica shale regions.

Our operations consist of three reportable operating segments: Refining & Marketing; Speedway; and
Midstream. Each of these segments is organized and managed based upon the nature of the products and services
it offers.

• Refining & Marketing – refines crude oil and other feedstocks at our six 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 pipeline and marine transportation,
terminals and storage services provided by our Midstream segment. We sell refined products to
wholesale marketing customers domestically and internationally, buyers on the spot market, our
Speedway® 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 regions of the United States.

• Midstream – gathers, processes and transports natural gas; gathers, transports, fractionates, stores and
markets NGLs; and transports and stores crude oil and refined products principally for the Refining &
Marketing segment via pipelines, terminals, towboats and barges. The Midstream segment primarily
reflects the results of MPLX, our sponsored master limited partnership.

See Item 8. Financial Statements and Supplementary Data – Note 10 for operating segment and geographic
financial information, which is incorporated herein by reference.

Corporate History and Structure

MPC was incorporated in Delaware on November 9, 2009 in connection with an internal restructuring of
Marathon Oil Corporation (“Marathon Oil”). On May 25, 2011, the Marathon Oil board of directors approved the
spinoff of its Refining, Marketing & Transportation Business (“RM&T Business”) into an independent, publicly
traded company, 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 has separate public ownership, boards of directors and management. All
subsidiaries and equity method investments not contributed by Marathon Oil to MPC remained with Marathon
Oil and, together with Marathon Oil, are referred to as the “Marathon Oil Companies.” On July 1, 2011, our
common stock began trading “regular-way” on the NYSE under the ticker symbol “MPC.”

MPLX is a diversified, growth-oriented publicly traded master limited partnership (“MLP”) formed by us in
2012 to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the
gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and
marketing of NGLs; and the gathering, transportation and storage of crude oil and refined petroleum products.
On December 4, 2015, we completed the MarkWest Merger, whereby MarkWest became a wholly-owned
subsidiary of MPLX.

As of December 31, 2017, we owned a 30.4 percent interest in MPLX, including a two percent general partner
interest. MPLX is a VIE because the limited partners of MPLX do not have substantive kick-out or substantive
participating rights over the general partner. We are the primary beneficiary of MPLX because in addition to
significant economic interest, we also have the power, through our 100 percent ownership of the general partner,
to control the decisions that most significantly impact MPLX. We therefore consolidate MPLX and record a
noncontrolling interest for the interest owned by the public. The creditors of MPLX do not have recourse to
MPC’s general credit through guarantees or other financial arrangements. The assets of MPLX are the property
of MPLX and cannot be used to satisfy the obligations of MPC.

Recent Developments

Strategic Actions to Enhance Shareholder Value

On January 3, 2017, we announced plans to significantly accelerate the dropdown of assets with an estimated
$1.4 billion of MLP-eligible annual EBITDA to MPLX and to exchange our economic interests in the general
partner of MPLX, including IDRs, for newly issued MPLX common units. In 2017, in connection with these
plans, we contributed assets to MPLX with projected annual EBITDA of approximately $400 million for
$1.93 billion of cash and approximately 31 million MPLX common units and general partner units. On
February 1, 2018, we completed the dropdown of the remaining identified assets, which included our refining
logistics assets and fuels distribution services with projected annual EBITDA of approximately $1 billion, in
exchange for $4.1 billion of cash and 114 million MPLX common units and general partner units.

The cash consideration for these dropdowns in 2017 and 2018 was financed by MPLX with $6.0 billion of debt.
See “Other Highlights” section for additional information on MPLX debt financing in 2017 and 2018. The equity
financing was funded through new MPLX common units and general partner units issued to us. Immediately
following the closing of the February 1, 2018 dropdown, our IDRs were cancelled and our economic general
partner interest in MPLX was converted into a non-economic general partner interest, all in exchange for
275 million newly issued MPLX common units, which resulted in us owning approximately 64 percent of the
issued and outstanding MPLX common units as of February 1, 2018. These actions were designed to provide a
clear valuation of our midstream platform and to provide an ongoing return of capital to our shareholders in a
manner consistent with maintaining an investment-grade credit profile.

See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for
additional information on our strategic actions to enhance shareholder value. See Item 8. Financial Statements
and Supplementary Data – Note 4 for more information on the 2017 dropdowns to MPLX and Note 26 for more
information on the 2018 dropdown to MPLX.

Acquisitions and Investments

Our acquisition and investment activity in 2017 was primarily focused in our Midstream segment as follows:

• On March 1, 2017, MPLX acquired the Ozark pipeline from Enbridge Pipelines (Ozark) LLC for

approximately $219 million.

• On February 15, 2017, MPLX acquired a partial, indirect equity interest in the Dakota Access Pipeline
(“DAPL”) and Energy Transfer Crude Oil Company Pipeline (“ETCOP”) projects, collectively referred
to as the Bakken Pipeline system, through a joint venture, MarEn Bakken Company LLC (“MarEn
Bakken”), with Enbridge Energy Partners L.P. (“Enbridge Energy Partners”). MPLX holds, through a
subsidiary, a 25 percent interest in MarEn Bakken, which equates to an approximate 9.2 percent
indirect equity interest in the Bakken Pipeline system. MPLX contributed $500 million of the $2 billion
purchase price paid by the joint venture.

• Effective January 1, 2017, MPLX and Antero Midstream formed a joint venture, Sherwood Midstream
the development of Antero Resources Corporation’s

LLC (“Sherwood Midstream”),

to support

Marcellus Shale acreage in West Virginia. MarkWest has a 50 percent ownership interest in Sherwood
Midstream. In connection with this transaction, MarkWest contributed certain gas processing plants
that were under construction at
the Sherwood Complex with a fair value of approximately
$134 million, cash of approximately $20 million and sold Class A Interests in MarkWest Ohio
Fractionation to Sherwood Midstream for $126 million in cash. Sherwood Midstream Holdings LLC
(“Sherwood Midstream Holdings”), a joint venture with MarkWest and Sherwood Midstream, was also
formed to own, operate and maintain certain assets owned by Sherwood Midstream and MarkWest.
MarkWest contributed certain real property, equipment and facilities with a fair value of approximately
$209 million to Sherwood Midstream Holdings in exchange for a 79 percent initial ownership interest.

See Item 8. Financial Statements and Supplementary Data – Note 5 for additional information on these
acquisitions and investments and Note 6 for additional information related to the investments in Sherwood
Midstream, Ohio Fractionation and Sherwood Midstream Holdings.

Other Highlights

• On February 8, 2018, MPLX issued $5.5 billion in aggregate principal amount of senior notes in a
public offering, consisting of $500 million aggregate principal amount of 3.375 percent unsecured
senior notes due March 2023, $1.25 billion aggregate principal amount of 4.000 percent unsecured
senior notes due March 2028, $1.75 billion aggregate principal amount of 4.500 percent unsecured
senior notes due April 2038, $1.5 billion aggregate principal amount of 4.700 percent unsecured senior
notes due April 2048, and $500 million aggregate principal amount of 4.900 percent unsecured senior
notes due April 2058. On February 8, 2018, $4.1 billion of the net proceeds were used to repay the
364-day term-loan facility, which was drawn on February 1, 2018 to fund the cash portion of the
consideration MPLX paid MPC for the dropdown of assets on February 1, 2018. The remaining
proceeds will be used to repay outstanding borrowings under MPLX’s revolving credit facility and
intercompany loan agreement with us and for general partnership purposes.

• On February 10, 2017, MPLX completed a public offering of $1.25 billion aggregate principal amount
of 4.125% unsecured senior notes due March 2027 and $1.0 billion aggregate principal amount
of 5.200% unsecured senior notes due March 2047. MPLX used the net proceeds from this offering to
fund the $1.5 billion cash portion of the consideration MPLX paid MPC for the dropdown of assets on
March 1, 2017, as well as for general partnership purposes.

•

Primarily during the first six months of 2017, MPLX issued an aggregate of 14 million MPLX common
units under the Second Amended and Restated Distribution Agreement (the “Distribution Agreement”)
providing for at-the-market issuances of common units, in amounts, at prices and on terms determined
by market conditions and other factors at the time of the offerings (such at-the-market program,
referred to as the “ATM Program”), generating net proceeds of approximately $473 million.

See Item 8. Financial Statements and Supplementary Data – Note 4 for additional information on MPLX.

Our Competitive Strengths

Extensive Integrated Platform of Midstream, Retail and Refining Assets

We believe the integration of our midstream, retail and refining assets distinguishes us from our competitors. Our
midstream, retail and refining assets have significant scale. We currently own, lease or have ownership interests
in approximately 10,800 miles of crude oil and products pipelines. Additionally, we have more than 6,000 miles
of natural gas gathering and NGL pipelines. We also own or have ownerships interests in one of the largest
private domestic fleets of inland petroleum product barges and one of the largest terminal operations in the
United States, as well as trucking and rail assets. We operate this transportation and distribution system in
coordination with our refining and marketing network, which can process up to 1.9 mmbpcd of crude oil,

enabling us to optimize raw material supplies and refined product distribution, and deliver important economies
of scale across our platform. Our Speedway segment, discussed further below, is one of our largest distribution
channels and also our most ratable.

We believe our integrated platform of assets gives us extensive flexibility and optionality to meet the growth
needs of the market and the ability to respond promptly to dynamic market conditions, including weather-related
and marketplace disruptions.

Competitively Positioned Marketing Operations Provide Assured Product Sales

We are one of the largest wholesale suppliers of gasoline and distillates to resellers within our market area. We
have two strong retail brands: Speedway® and Marathon®. We believe Speedway LLC, a wholly-owned
subsidiary, operates the second largest chain of company-owned and operated retail gasoline and convenience
stores in the United States, with approximately 2,740 convenience stores in 21 states throughout the Midwest,
East Coast and Southeast regions of the United States. In addition, our highly successful Speedy Rewards®
customer loyalty program, which averaged approximately 6 million active members in 2017, provides us with a
unique competitive advantage and opportunity to increase our customer base at existing and new Speedway
locations. The Marathon brand is an established motor fuel brand primarily in the Midwest and Southeast regions
of the United States, comprised of approximately 5,600 retail outlets operated by independent entrepreneurs
across 20 states as of December 31, 2017. The Marathon brand and Speedway have been channels for sales
volume growth in existing and contiguous markets.

We consider assured sales as those sales we make to Marathon brand customers, our Speedway operations and to
our wholesale customers with whom we have required minimum volume sales contracts. Our assured sales
currently account for approximately 70% of our gasoline production. We believe having assured sales brings
ratability to our distribution systems, provides a solid base to enhance our overall supply reliability and allows us
to efficiently and effectively optimize our operations across our refineries and our transportation and distribution
system.

High Quality Network of Strategically Located Assets

We believe we are the largest crude oil refiner in the Midwest and the second largest in the United States based
on crude oil refining capacity. We own a six-plant refinery network, with approximately 1.9 mmbpcd of crude oil
throughput capacity. Our refineries process a wide range of crude oils, feedstocks and condensate, including
heavy and sour crude oils, which can generally be purchased at a discount to sweet crude oil, and produce
transportation fuels such as gasoline and distillates, specialty chemicals and other refined products. While we
have historically processed significant quantities of heavy and sour crude oils, our refineries have the ability to
process as much as 65 percent to 70 percent light sweet or sour crude oils.

The geographic locations of our refineries provide us with strategic advantages. Located in PADD II and PADD
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 a variety of supply sources, including domestic, Canadian and other foreign
sources, which provides us with flexibility to optimize crude supply costs. For example, 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 refining competitors. Our refinery
locations and midstream distribution system also allow us to access refined product export markets and to serve a
broad range of key end-user markets across the United States quickly and cost-effectively.

MPLX’s logistics assets are similarly located in the Midwest and Gulf Coast regions of the United States. These
regions collectively comprised approximately 75 percent of total United States crude distillation capacity and can
serve markets representing approximately 81 percent of total United States finished products demand for the year
ended December 31, 2017, according to the EIA. This significantly complements our Refining & Marketing

segment and creates strategic opportunities for MPC. MPLX is also the largest natural gas processor and
fractionator in the Marcellus and Utica shale regions which provides it with strategic competitive advantages in
capturing and contracting for gathering, processing and fractionation of new supplies of natural gas as production
in these regions continues to increase. MPLX also has a growing presence in the southwestern portion of the
United States with an existing strong competitive position with ample opportunities for long-term continued
organic growth and close proximity to other expansion opportunities. As of December 31, 2017, MPLX’s
gathering and processing operations include approximately 5.9 bcf/d of gathering capacity, 8.0 bcf/d of natural
gas processing capacity and 610 mbpd of fractionation capacity. Our integrated midstream energy asset network
links producers of natural gas, NGLs and crude oil from some of the largest supply basins in the United States to
domestic and international markets.

Our Speedway segment, which operates in the Midwest, East Coast and Southeast, complements our refining and
midstream assets providing a significant and ratable outlet for our refinery production. Speedway’s expansion
from nine to 21 states since 2013 has also enabled us to further leverage our integrated refining and
transportation system. Speedway is a top performer in the convenience store industry with the highest EBITDA
per store per month of its public peers and leading positions with respect to other comparisons based on light
products volume, merchandise sales and total margin on a per store per month basis.

* As of December 31, 2017

General Partner and Sponsor of MPLX

Our investment in MPLX provides us an efficient vehicle to invest in organic projects and pursue acquisitions of
midstream assets; all with the focus of enhancing our share price through our limited partner interest in MPLX.
MLP interests tend to receive higher market multiples. MPLX’s liquidity, size, scale and access to the capital
markets should provide us a strong foundation to execute our strategy for growing our midstream business.

Following the completion of our strategic actions to enhance shareholder value discussed earlier, we own
approximately 505 million MPLX common units with a value of $19.15 billion based on MPLX’s February 1,
2018 closing unit price of $37.95.

See Item 8. Financial Statements and Supplementary Data – Note 4 for additional information on the dropdowns
to MPLX.

Established Track Record of Profitability

We have demonstrated an ability to achieve positive financial results throughout all stages of the business cycle
due in large part to our business mix and geographic diversity. Income generated by our Speedway segment is
less sensitive to business cycles. Similarly, long-term, fee based income generated by our Midstream segment is
more stable over business cycles, while our Refining & Marketing segment enables us to generate significant
income and cash flow when market conditions are more favorable. We also believe our strategies position us well
to continue to achieve competitive financial results.

Strong Financial Position

As of December 31, 2017, we had $3.01 billion in cash and cash equivalents and $4.25 billion in unused
committed borrowing facilities, excluding MPLX’s cash and cash equivalents of $5 million and its credit
facilities. We had $6.00 billion of debt at year-end, excluding MPLX debt of $6.95 billion. This combination of
strong liquidity and manageable leverage provides financial flexibility to fund our growth projects and to pursue
our business strategies.

Our Business Strategies

Maintain Top-Tier Safety and Environmental Performance

We remain committed to operating our assets in a safe and reliable manner and targeting continual improvement
in our safety record across all of our operations. We have a history of safe and reliable operations, which was
demonstrated again in 2017 with solid personal and process safety performance compared to similar industry
averages. In addition, our corporate headquarters, four of our six refineries and 11 additional facilities have
earned designations as an OSHA VPP Star site which recognizes employers and workers who have implemented
effective safety and health management systems.

We also remain committed to environmental stewardship by continuing to improve the efficiency and reliability
of our operations. For instance, in 2010, we established a “Focus on Energy” initiative to bolster our commitment
to improving the efficiency of our existing installations. As part of this initiative, a team of dedicated energy
specialists was formed to: track and communicate nearly 600 individual energy metrics throughout our refining
system; ensure energy efficiency is designed into proposed capital and expense projects; and identify and
implement energy-efficiency improvements at each of our refineries, including multi-year programs to enhance
insulation, steam system performance and heat integration. Through this focus, our refineries have achieved
significant energy-efficiency improvements and performance. Since the EPA began recognizing petroleum
refineries under its Energy Star® program in 2006, we have earned 76 percent of the Energy Star® recognitions,
despite owning and operating just 10 percent of total U.S. refining capacity. We have also implemented similar
initiatives in our transportation fleet which has been recognized as an EPA SmartWay® partner. The SmartWay
program recognizes the best-performing freight carriers for greenhouse gas and energy efficiency. These
measures not only reduce emissions but can also reduce operating costs.

We proactively address our regulatory requirements and encourage our operations to continually improve their
environmental performance through our DEI program, which establishes goals and measures performance. In
2017, we began to include our natural gas gathering and processing operations in certain aspects of the program.
Even with the additional assets included, we maintained our performance from 2016 with 31 DEI’s, a 53 percent
reduction in DEI’s since 2013. Since 2001, MPC’s health, environment, safety and security (“HES&S”)
performance has been continually improving under the Responsible Care® Management System, and we are now
moving into a more rigorous phase of HES&S management that represents a new level of commitment:
RC14001®:2015 certification. RC14001 is a management system that combines Responsible Care with the
globally recognized ISO14001:2015 environmental management system, established by the International
Organization for Standardization (“ISO”). ISO is an independent, nongovernmental international body that
provides world-class specifications for products, services and systems that ensure quality, safety and efficiency.
Similar to Responsible Care, RC14001 provides the Company a management system that integrates health,
environmental stewardship, safety and security, and is third-party audited to ensure compliance and continual
improvement. Two of our six refineries and our Marathon Pipeline organization and Terminal, Transport and
Rail organization are already certified to the RC14001 standard. We expect that our remaining refineries will by
certified in 2018 and our natural gas gathering and processing operations will begin to seek RC14001
certification in 2019.

Grow Higher Valued, Stable Cash Flow Businesses

We intend to continue allocating significant portions of our capital to investments to grow our midstream and
retail businesses. These businesses typically have more predictable and stable income and cash flows compared
to our refining operations and we believe investors assign a higher value to such businesses.

MPLX has significantly expanded its midstream activities through mergers and acquisitions, dropdown
transactions with MPC and organic growth projects. MPLX will consider organic growth projects that provide
attractive returns and cash flows both within its geographic footprint as well as in new regions. MPLX may
pursue these opportunities as standalone projects, with MPC or with other parties. MPLX has identified a number
of potential projects over the next several years. These primarily include projects to expand gathering, processing
and fractionation infrastructure in the Marcellus and Utica regions and infrastructure investments in the Permian
Basin to support significant oil and gas production activities forecasted in those regions.

We intend to continue growing Speedway’s profitability by focusing on organic growth opportunities targeted to
fill in voids in our existing markets by building new locations and by rebuilding or remodeling existing stores.
We will also look to expand our presence by opportunistically acquiring high quality stores in new and existing
markets. We have identified numerous opportunities for new convenience stores or store rebuilds in our existing
market, with a continued focus in Chicago and Tennessee, as well as opportunities for growth in new markets
including Georgia, South Carolina and upstate New York. We also plan to capitalize on diesel demand growth by
building out our network of commercial fueling lane locations, which cater to local and regional transport fleets,
within our core market.

Focus on Long-Term Integrated Relationships with Our Producer Customers

MPLX has developed long-term integrated relationships with its natural gas and NGL producer customers. These
relationships are characterized by an intense focus on customer service and a deep understanding of producer
customers’ requirements coupled with the ability to increase the level of our midstream services in response to
their midstream requirements. Through collaborative planning with these producer customers, MPLX continues
to construct high-quality midstream infrastructure and provide unique solutions that are critical to the ongoing
success of producer customers’ development plans. As a result of these efforts, MPLX’s MarkWest subsidiary
has been a top-rated midstream service provider in customer satisfaction since 2006, as determined by an
independent research provider.

Pursue Margin Enhancing Investments in Refining to Deliver Top Quartile Refining Performance

Our refining system has the flexibility to process a wide array of crude oils, which positions us well to benefit
from economically attractive Canadian heavy crudes, heavy/sour waterborne cargos, as well as the growing crude
oil and condensate production from North American shale plays. In addition to having access to multiple
domestic markets for our refined products, we are also well positioned to export distillates and gasoline from our
Gulf Coast refineries.

We intend to enhance margins in our Refining & Marketing segment by realizing benefits from targeted
investments, primarily in our Gulf Coast refining operations. Over the mid- to long-term, we believe significant
opportunities exist for refiners that can access international markets with their refined products and that can
upgrade residual fuel oil into more valuable refined products, especially distillates. To this end, we are investing
approximately $1.5 billion in Galveston Bay through the STAR project to create a world-class refining complex.
This investment will enable us to upgrade low value residual fuel oil into higher value refined products and
lowers the refinery’s cost of production. The project scope increases heavy crude processing capacity, increases
distillate and gas oil recovery and improves the refinery’s overall reliability. Project implementation began in
2016 and will complete in early 2022. In addition to STAR, we are expanding Galveston Bay’s waterborne
product loading capacity to optimize our Gulf Coast product supply system. We are also investing approximately
$200 million in our Garyville refinery to increase coking capacity and ULSD production, scheduled to complete
in 2020. Both the Galveston Bay STAR and Garyville coker expansion projects will allow MPC to capitalize on
the expected increase in demand for low sulfur distillate arising from the International Maritime Organization
(“IMO”) low sulfur bunker fuel requirements effective in 2020. Additionally, Garyville will complete the final
phase of its Diesel Max project in early-2018, increasing MPC’s ULSD production, anticipated to be a key
blending component for compliant bunker fuel. Finally, MPC has additional projects under development that
would yield benefit through residual fuel oil destruction or increased ULSD production.

Sustain Focus on Disciplined Capital Allocation and Shareholder Returns

We intend to maintain our focus on a disciplined and balanced approach to capital allocation, including return of
capital to shareholders, in a manner consistent with maintaining an investment-grade credit profile. Since
becoming a stand-alone company in June 2011, our dividend has increased by a 26.5 percent compound annual
growth rate and our board of directors has authorized share repurchases totaling $13.0 billion. Through open
market purchases and two ASR programs, we repurchased 246 million shares of our common stock for
approximately $9.81 billion, representing approximately 35 percent of our outstanding common shares when we
became a stand-alone company in June 2011. We achieved these shareholder returns while also investing in the
business and maintaining an investment-grade credit profile. As of December 31, 2017, $3.19 billion of
authorization remains available for future share repurchases.

Utilize and Enhance our High Quality Employee Workforce

We utilize our high quality employee workforce by continuously leveraging their commercial skills. In addition,
we continue to enhance our workforce through active recruitment of the best candidates from diverse
backgrounds and effective training programs on safety, environmental stewardship, diversity and inclusion and
other professional and technical skills.

The above discussion contains forward-looking statements with respect to the business and operations of MPC
and our competitive strengths and business strategies, including our expected investments and the adequacy of
our capital resources and liquidity. Factors that could impact our competitive strengths and business strategies,
including the adequacy of our capital resources and liquidity include, but are not limited to, our ability to achieve
the strategic and other objectives related to the strategic initiatives discussed herein; our ability to generate
including within the expected
sufficient
timeframe; our ability to manage disruptions in credit markets or changes to our credit rating; the potential

income and cash flow to effect

the intended share repurchases,

impact on our share price if we are unable to effect the intended share repurchases; adverse changes in laws
including with respect to tax and regulatory matters; changes to the expected construction costs and timing of
projects; continued/further volatility in and/or degradation of market and industry conditions; the availability and
pricing of crude oil and other feedstocks; slower growth in domestic and Canadian crude supply; the effects of
the lifting of the U.S. crude oil export ban; completion of pipeline capacity to areas outside the U.S. Midwest;
consumer demand for refined products; transportation logistics; the reliability of processing units and other
equipment; MPC’s ability to successfully implement growth opportunities;
the impact of adverse market
conditions affecting MPC’s and MPLX’s midstream business; modifications to MPLX earnings and distribution
growth objectives; compliance with federal and state environmental, economic, health and safety, energy and
other policies and regulations, including the cost of compliance with the Renewable Fuel Standard, and/or
enforcement actions initiated thereunder; adverse results in litigation; changes to MPC’s capital budget; other
risk factors inherent to MPC’s industry. These factors, among others, could cause actual results to differ
materially from those set forth in the forward-looking statements. For additional information on forward-looking
statements and risks that can affect our business, see “Disclosures Regarding Forward-Looking Statements” and
Item 1A. Risk Factors in this Annual Report on Form 10-K.

Refining & Marketing

Refineries

We currently own and operate six refineries in the Gulf Coast and Midwest regions of the United States with an
aggregate crude oil refining capacity of 1,881 mbpcd. During 2017, we merged the management and operations
of the Galveston Bay and Texas City refineries into a single world-class refining complex that is now operated as
Galveston Bay Refinery. As of December 31, 2017, historical refinery data reported for Galveston Bay will
include the former Texas City refinery. During 2017, our refineries processed 1,765 mbpd of crude oil and
179 mbpd of other charge and blendstocks. During 2016, our refineries processed 1,699 mbpd of crude oil and
151 mbpd of other charge and blendstocks.

Our refineries include crude oil atmospheric and vacuum distillation, fluid catalytic cracking, hydrocracking,
catalytic reforming, coking, desulfurization and sulfur recovery units. The refineries process a wide variety of
condensate, light and heavy crude oils purchased from various domestic and foreign suppliers. We produce
numerous refined products, ranging from transportation fuels, such as reformulated gasolines, blend-grade
gasolines intended for blending with ethanol and ULSD fuel, to heavy fuel oil and asphalt. Additionally, we
manufacture aromatics, propane, propylene and sulfur. See the Refined 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 our refineries allow the movement of intermediate products
between refineries to optimize operations, produce higher margin products and efficiently utilize our processing
capacity. For example, naphtha may be moved from Galveston Bay to Robinson where excess reforming capacity
is available. Also, shipping intermediate products between facilities during partial refinery shutdowns allows us
to utilize processing capacity that is not directly affected by the shutdown work.

Following is a description of each of our refineries and their capacity.

Galveston Bay, Texas City, Texas Refinery (571 mbpcd). Our Galveston Bay refinery is a world-class refining
complex resulting from the combination of our former Texas City refinery and Galveston Bay refinery, which we
acquired on February 1, 2013. The refinery is located on the Texas Gulf Coast approximately 30 miles southeast
of Houston, Texas and can process a wide variety of crude oils into gasoline, distillates, aromatics, heavy fuel oil,
refinery-grade propylene, fuel-grade coke, dry gas and sulfur. The refinery has access to the export market and
multiple options to sell refined products. Our cogeneration facility, which supplies the Galveston Bay refinery,
currently has 1,055 megawatts of electrical production capacity and can produce 4.3 million pounds of steam per
hour. Approximately 46 percent of the power generated in 2017 was used at the refinery, with the remaining
electricity being sold into the electricity grid.

Garyville, Louisiana Refinery (556 mbpcd). Our Garyville, Louisiana refinery is located along the Mississippi
River in southeastern Louisiana between New Orleans, Louisiana and Baton Rouge, Louisiana. The Garyville
refinery is configured to process a wide variety of crude oils into gasoline, distillates, fuel-grade coke, asphalt,
polymer-grade propylene, propane, dry gas, heavy fuel oil, slurry, refinery-grade propylene and sulfur. The
refinery has access to the export market and multiple options to sell refined products. A major expansion project
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 refinery has earned designation as an OSHA VPP Star site.

Catlettsburg, Kentucky Refinery (277 mbpcd). Our Catlettsburg, Kentucky refinery is located in northeastern
Kentucky on the western bank of the Big Sandy River, near the confluence with the Ohio River. The Catlettsburg
refinery processes sweet and sour crude oils into gasoline, distillates, asphalt, aromatics, heavy fuel oil and
propane. In the second quarter of 2015, we completed construction of a condensate splitter at our Catlettsburg
refinery, which increased our capacity to process condensate from the Utica shale region.

Robinson, Illinois Refinery (245 mbpcd). Our Robinson, Illinois refinery is located in southeastern Illinois. The
Robinson refinery processes sweet and sour crude oils into gasoline, distillates, anode-grade coke, propane,
aromatics, slurry and refinery-grade propylene. The Robinson refinery has earned designation as an OSHA VPP
Star site.

Detroit, Michigan Refinery (139 mbpcd). 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 and slurry. Our
Detroit refinery earned designation as an OSHA VPP Star site. In the fourth quarter of 2012, we completed a
heavy oil upgrading and 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 (93 mbpcd). Our Canton, Ohio refinery is located approximately 60 miles south of
Cleveland, Ohio. The Canton refinery processes sweet and sour crude oils, including production from the nearby
Utica Shale, into gasoline, distillates, asphalt, roofing flux, propane, refinery-grade propylene and slurry. In
December 2014, we completed construction of a condensate splitter at our Canton refinery, which increased our
capacity to process condensate from the Utica shale region. The Canton refinery has earned designation as an
OSHA VPP Star site.

As of December 31, 2017, our refineries had 22 rail loading racks and 26 truck loading racks and three of our
refineries had a total of seven owned and 12 non-owned docks. Total throughput in 2017 was 99 mbpd for the
refinery loading racks and 875 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 Yields

The following table sets forth our refinery production by product group for each of the last three years.

Refined Product Yields (mbpd)

2017

2016

2015

Gasoline

Distillates

Propane

Feedstocks and special products

Heavy fuel oil

Asphalt

Total

Crude Oil Supply

932

641

277

900

617

241

913

603

281

1,986

1,883

1,919

We obtain the crude oil we refine through negotiated term contracts and purchases or exchanges on the spot
market. Our term contracts generally have market-related pricing provisions. The following table provides
information on our sources of crude oil for each of the last three years. The crude oil sourced outside of North
America was acquired from various foreign national oil companies, production companies and trading
companies.

Sources of Crude Oil Refined (mbpd)

2017

2016

2015

United States

Canada

Middle East and other international

Total

999

381

385

986

326

387

1,765

1,699

1,138

244

329

1,711

Our refineries receive crude oil and other feedstocks and distribute our refined products through a variety of
channels, including pipelines, trucks, railcars, ships and barges.

Renewable Fuels

We currently own a biofuel production facility in Cincinnati, Ohio that produces biodiesel, glycerin and other by-
products. The capacity of the plant is approximately 70 million gallons per year.

We hold ownership interests in ethanol production facilities in Albion, Michigan; Clymers, Indiana and
Greenville, Ohio. These plants have a combined ethanol production capacity of approximately 415 million
gallons per year (27 mbpd) and are managed by a co-owner.

Refined Product Marketing

We believe we are one of the largest wholesale suppliers of gasoline and distillates to resellers and consumers
within our 26-state market area. Independent retailers, wholesale customers, our Marathon brand jobbers and
Speedway brand convenience stores, airlines, transportation companies and utilities comprise the core of our
customer base.

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)

2017

2016

2015

Gasoline

Distillates

Propane

Feedstocks and special products

Heavy fuel oil

Asphalt

Total

1,201

1,219

1,241

691

265

676

231

667

258

2,331

2,259

2,289

In addition, we sell gasoline, distillates and asphalt for export, primarily out of our Garyville and Galveston Bay
refineries. The following 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)

2017

2016

2015

Gasoline

Distillates

Asphalt

Total

192

297

199

296

101

214

319

Gasoline and Distillates. We sell gasoline, gasoline blendstocks and distillates (including No. 1 and No. 2 fuel
oils, jet fuel, kerosene and diesel fuel) to wholesale customers, Marathon-branded independent entrepreneurs and
our Speedway® convenience stores and on the spot market. In addition, we sell diesel fuel and gasoline for export
to international customers. We sold 52 percent of our gasoline sales volumes and 89 percent of our distillates
sales volumes on a wholesale or spot market basis in 2017. The demand for gasoline and distillates is seasonal in
many of our markets, with demand typically at its highest levels during the summer months.

We have blended ethanol into gasoline for more than 25 years and began expanding our blending program in
2007, in part due to federal regulations that require us to use specified volumes of renewable fuels. Ethanol
volumes sold in blended gasoline were 81 mbpd in 2017, 84 mbpd in 2016 and 85 mbpd in 2015. 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 17 states in our marketing area. The future expansion or contraction of our
ethanol and biodiesel blending programs will be driven by market economics and government regulations.

Propane. We produce propane at all of our refineries. Propane is primarily used for home heating and cooking, as
a feedstock within the petrochemical industry, for grain drying and as a fuel for trucks and other vehicles. Our
propane sales are typically split evenly between the home heating market and petrochemical consumers.

Feedstocks and Special Products. We are a producer and marketer of feedstocks and special products. Product
availability varies by refinery and includes platformate, alkylate, FCC unit gas, naptha, dry gas, propylene,
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 for power generation and in miscellaneous
industrial applications, and anode-grade coke at our Robinson refinery, which is used to make carbon anodes for
the aluminum smelting industry. Our feedstocks and special products sales increased to 265 mbpd in 2017 from
231 mbpd in 2016 and decreased in 2016 from 258 mbpd in 2015. The increase in 2017 was primarily due to

more feedstocks and special products sold on the spot market as a result of increased product yields. The
decrease in 2016 was primarily due to more feedstocks used in production versus selling them on the spot
market.

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 is primarily 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 104 mbpcd, which includes asphalt
cements, polymer-modified asphalt, emulsified asphalt, 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.

The 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 past three years.

Refined Product Sales by Customer Type

2017

2016

2015

Private-brand marketers, commercial and industrial customers, including spot

market

Marathon-branded independent entrepreneurs

Speedway® convenience stores

71%

13%

16%

69%

14%

17%

69%

14%

17%

As of December 31, 2017, there were 5,617 retail outlets in 20 states and the District of Columbia where
independent entrepreneurs maintain Marathon-branded retail outlets.

Terminals

As of December 31, 2017, our Refining & Marketing segment owned and operated 18 asphalt terminals and two
light products terminals. In addition, we distribute refined products through 59 light products terminals owned by
MPLX and approximately 130 third-party light products and two third-party asphalt terminals in our market area.

Transportation – Truck and Rail

As of December 31, 2017, we owned 180 transport trucks and 193 trailers with an aggregate capacity of
1.8 million gallons for the movement of refined products and crude oil. In addition, we had 1,999 leased and
19 owned railcars of various sizes and capacities for movement and storage of refined products.

The locations and detailed information about our Refining & Marketing assets are included under Item 2.
Properties and are incorporated herein by reference.

Speedway

Our Speedway segment sells gasoline, diesel and merchandise through convenience stores that it owns and
operates under the Speedway brand. Speedway convenience stores offer a wide variety of merchandise, including
prepared foods, beverages and non-food items. Speedway’s Speedy Rewards® loyalty program has been a highly
successful loyalty program since its inception in 2004, with a consistently growing base which averaged
approximately 6 million active members in 2017. Speedway’s ability to capture and analyze member-specific
transactional data enables us to offer Speedy Rewards® members discounts and promotions specific to their
buying behavior. We believe Speedy Rewards® is a key reason customers choose Speedway over competitors
and it continues to drive significant value for both Speedway and our 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 merchandise tend to be less volatile than margins from the retail sale of gasoline
and diesel fuel.

As of December 31, 2017, Speedway had 2,744 convenience stores in 21 states. Speedway also owns a
29 percent interest in PFJ Southeast LLC (“PFJ Southeast”), which is a joint venture between Speedway and
Pilot Flying J with 124 travel center locations primarily in the Southeast United States as of December 31, 2017.

As of December 31, 2017, Speedway owned 109 transport trucks and 103 trailers for the movement of gasoline
and distillate.

The locations and detailed information about our Speedway assets are included under Item 2. Properties and are
incorporated herein by reference.

Midstream

The Midstream segment, which primarily includes the operations of MPLX, gathers, processes and transports
natural gas; gathers, transports, fractionates, stores and markets NGLs; and transports and stores crude oil and
refined products principally for the Refining & Marketing segment via pipelines, terminals, towboats and barges.
The Midstream segment also includes certain related operations retained by MPC.

MPLX

As of December 31, 2017, MPLX assets included approximately 5.9 bcf/d of natural gas gathering capacity,
8.0 bcf/d of natural gas processing capacity and 610 mbpd of NGL fractionation capacity.

MPLX assets as of December 31, 2017, also included 1,613 miles of owned or leased and operated common
carrier crude oil pipelines and 2,360 miles of common carrier products pipelines and partial ownership in 2,194
miles of crude oil pipelines and 1,917 miles of products pipelines, all of which are across 17 states. In 2017, third
parties generated 16 percent of the crude oil and product shipments on MPLX’s common carrier pipelines,
excluding volumes shipped by MPC under joint tariffs with third parties. MPLX owns nine butane and propane
storage caverns with total capacity of approximately 3 million barrels.

As of December 31, 2017, MPLX owned and operated 59 light products terminals and distributes refined
products through one leased light products terminal and two light products terminals in which it has partial
ownership interests but does not operate.

As of December 31, 2017, MPLX’s marine transportation operations included 18 owned towboats, as well as
208 owned and 24 leased barges that transport refined products and crude oil on the Ohio, Mississippi and
Illinois rivers and their tributaries and inter-coastal waterways.

MPC-Retained Midstream Assets and Investments

We retained ownership interests in several crude oil and products pipeline systems and pipeline companies. We
own 228 miles of private products pipelines that are operated by MPL for the benefit of our Refining &
Marketing segment on a cost recovery basis. We also have undivided joint interests in 739 miles of common
carrier crude oil pipeline systems and partial ownership interests in pipeline companies including 1,741 miles of
products pipelines.

As of December 31, 2017, we also have indirect ownership interests in two ocean vessel joint ventures with
Crowley through our investment in Crowley Coastal Partners. These joint ventures operate and charter four Jones

Act product tankers, most of which are leased to MPC, and own and operate three 750 Series ATB vessels that
are leased to MPC.

The locations and detailed information about our Midstream assets are included under Item 2. Properties and are
incorporated herein by reference.

Competition, Market Conditions and Seasonality

The downstream petroleum business is highly competitive, particularly with regard to accessing crude oil and
other feedstock supply and the marketing of refined products. We compete with a large number of other
companies to acquire crude oil for refinery processing and in the distribution and marketing of a full array of
refined products. Based upon the “The Oil & Gas Journal 2018 Worldwide Refinery Survey,” we ranked second
among U.S. petroleum companies on the basis of U.S. crude oil refining capacity.

We compete in four distinct markets for the sale of refined products – wholesale, spot, branded and retail
distribution. We believe we compete with about 50 companies in the sale of refined products to wholesale
marketing customers, including private-brand marketers and large commercial and industrial consumers; about
110 companies in the sale of refined products in the spot market; about 10 refiners or marketers in the supply of
refined products to refiner-branded independent entrepreneurs; and approximately 830 retailers in the retail sale
of refined products. In addition, we compete with producers and marketers in other industries that supply
alternative forms of energy and fuels to satisfy the 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 stores operated by fully integrated major oil companies,
independent
entrepreneurs and other well-recognized national or regional convenience stores and travel centers, often selling
gasoline, diesel fuel and merchandise at competitive prices. Non-traditional retailers, such as supermarkets, club
stores and mass merchants, 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
15 percent of the U.S. gasoline market in mid-2017.

Our Midstream operations face competition for natural gas gathering, crude oil transportation and in obtaining
natural gas supplies for our processing and related services; in obtaining unprocessed NGLs for gathering and
fractionation; and in marketing our products and services. Competition for natural gas supplies is based primarily
on the location of gas gathering facilities and gas processing plants, operating efficiency and reliability and the
ability to obtain a satisfactory price for products recovered. Competitive factors affecting our fractionation
services include availability of capacity, proximity to supply and industry marketing centers and cost efficiency
and reliability of service. Competition for customers to purchase our natural gas and NGLs is based primarily on
price, delivery capabilities, flexibility and maintenance of high-quality customer relationships. In addition,
certain of our Midstream operations are highly regulated, which affects the rates that our common carrier
pipelines can charge for transportation services and 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 governmental regulations. Our operating results are affected by price changes in crude oil,
natural gas and refined products, as well as changes in competitive conditions in the markets we serve. Price
differentials between sweet and sour crude oils, WTI and LLS crude oils and other market structure differentials
also affect our operating results.

Demand for gasoline, diesel fuel and asphalt is higher during the spring and summer months than during the
winter months in most of our markets, primarily due 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 be lower than for
those in the second and third quarters of each calendar year.

Our Midstream segment can be affected by seasonal fluctuations in the demand for natural gas and NGLs and the
related fluctuations in commodity prices caused by various factors such as changes in transportation and travel
patterns and variations in weather patterns from year to year. Overall, our exposure to the seasonal fluctuations in
the commodity markets is declining due to our growth in fee-based business.

Environmental Matters

Our management is responsible for ensuring that our operating organizations maintain environmental compliance
systems that support and foster our compliance with applicable laws and regulations, and for reviewing our
overall environmental performance. We also have a Corporate Emergency Response Team 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 potential for further regulations that could affect our operations. Currently,
legislative and regulatory measures to address greenhouse gases are in various phases of review, discussion or
implementation. The cost to comply with these laws and regulations cannot be estimated at this time, but could
be significant. For additional
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, among others, the Clean Air Act (“CAA”) with respect to air emissions, the
Clean Water Act (“CWA”) with respect to water discharges, the Resource Conservation and Recovery Act
(“RCRA”) with respect to solid and hazardous waste treatment, storage and disposal, the Comprehensive
Environmental Response, Compensation, and Liability Act
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 are being adopted on a continuing basis, and the costs of compliance with such new laws and
regulations are very difficult to estimate until finalized.

(“CERCLA”) with respect

For a discussion of environmental capital expenditures and costs of compliance for air, water, solid waste and
remediation, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations-Environmental Matters and Compliance Costs.

Air

We are subject to many requirements in connection with air emissions from our operations. Internationally and
domestically, emphasis has been placed on reducing greenhouse gas emissions. There has been a dramatic shift
in climate-related policy under the Trump Administration as compared to the Obama Administration’s policies.
On March 28, 2017, President Trump published Executive Order 13783, pledging, among other things, to review,
rescind, revoke or withdraw much of the Obama-era climate change policies, regulations and guidance. The most
prominent policies and regulations impacted by the Executive Order include the Obama Administration’s 2013
Climate Action Plan, the “Clean Power Plan,” the “Social Cost of Carbon,” the “Social Cost of Methane” and the
Council on Environmental Quality’s “Final Guidance for Federal Departments and Agencies on Consideration of
Greenhouse Gas Emissions and the Effects of Climate Change in National Environmental Policy Act Reviews.”
President Trump also announced the United States would withdraw from the 2015 Paris UN Climate Change
Conference Agreement, which aims to hold the increase in the global average temperature to well below two
degrees Celsius as compared to pre-industrial levels. Many of the policies and regulations rescinded through
Executive Order 13783 had been adopted to meet the United States’ pledge under the Agreement. The U.S.
climate change strategy and implementation of that strategy through legislation and regulation may change under
future administrations; therefore, the impact to our industry and operations due to greenhouse gas regulation is
unknown at this time.

Regardless of whether legislation or regulation is enacted, given the continuing global demand for oil and gas –
even under different hypothetical carbon-constrained scenarios – MPC has taken actions that have resulted in
lower greenhouse gas emissions and we are positioned to remain a successful company well into the future. We
have instituted a program to improve energy efficiency of our refineries and other assets which will continue to
pay dividends in reducing our environmental footprint as well as making us more cost-competitive. We believe
our mature governance and risk-management processes enable the company to effectively monitor and adjust to
any transitional or physical climate-related risks.

In 2009, the EPA issued an “endangerment finding” that greenhouse gas emissions contribute to air pollution that
endangers public health and welfare. Related to the endangerment finding, in April 2010, the EPA finalized a
greenhouse gas emission standard for mobile sources (cars and other light duty vehicles). The endangerment
finding, the mobile source standard and the EPA’s determination that greenhouse gases are subject to regulation
under the Clean Air Act resulted in permitting of greenhouse gas emissions at stationary sources. Through a
series of legal challenges filed against the EPA, the requirement to control greenhouse gas emissions through
Best Available Control Technology has been limited to new and modified large stationary sources, such as
refineries, that will also emit a criteria pollutant. Implementing Best Available Control Technology may result in
increased costs to our operations. A few MPC projects may trigger greenhouse gas permitting requirements but
any additional capital spending will likely not be significant.

The EPA has finalized Source Performance Standards for greenhouse gas emissions for new and existing electric
utility generating units. These standards could impact electric and natural gas rates for all our operations. Legal
challenges have been filed by several states and by industry groups seeking to overturn the final rules. In
February 2016, the United States Supreme Court stayed implementation of the standards for existing utility
generating units (also known as the Clean Power Plan) until complete disposition of the litigation. The litigation
has been placed in abeyance. On October 10, 2017, the EPA issued a Notice of Proposed Rulemaking proposing
to repeal the Clean Power Plan. The EPA has also announced its intention to replace the Clean Power Plan with a
narrower rule. A proposed replacement rule is expected in 2018.

In the absence of federal legislation or regulation of greenhouse gas emissions, states are becoming more active
in regulating greenhouse gas emissions. These measures may include state actions to develop statewide or
regional programs to impose emission reductions. These measures may also include low-carbon fuel standards,
such as the California program, or a state carbon tax. These measures could result in increased costs to operate
and maintain our facilities, capital expenditures to install new emission controls and costs to administer any
carbon trading or tax programs implemented.

We could also face increased climate-related litigation with respect to our operations or products. Private party
litigation seeking damages and injunctive relief is pending against MPC and other oil and gas companies in
California state court. Although uncertain, these actions could increase our costs or operations or reduce the
demand for the refined products we produce, transport, store and sell.

Private parties have also sued federal 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 at our facilities and (iii) administer and manage any greenhouse gas emissions programs, including
acquiring emission credits or allotments. These requirements may also significantly affect MPC’s refinery
operations and may have an indirect effect on our business, financial condition and results of operations. The
extent and magnitude of the impact from greenhouse gas regulation or legislation cannot be reasonably estimated
due to the uncertainty regarding the additional measures and how they will be implemented.

In 2015, the EPA finalized a revision to the National Ambient Air Quality Standards (“NAAQS”) for ozone. The
EPA lowered the primary ozone NAAQS from 75 ppb to 70 ppb. This revision initiated a multi-year process in
which nonattainment designations will be made based on more recent ozone measurements that includes data

from 2016. On November 6, 2017, the EPA finalized ozone attainment/unclassifiable designations for certain
areas under the new standard. The EPA has not yet designated any counties as nonattainment under the lower
primary ozone standard, but such nonattainment designations could result in increased costs associated with, or
result in cancellation or delay of, capital projects at our facilities. For areas designated nonattainment, states will
be required to adopt State Implementation Plans (“SIPs”) for nonattainment areas. These SIPs may include NOx
and/or VOC reductions that could result in increased costs to our facilities. We cannot predict the various SIPs
requirements at this time.

On September 29, 2015, the EPA signed the final regulations revising existing refinery air emissions standards.
The revised regulations were published in the Federal Register on December 1, 2015. The revised rule requires
additional controls, lower emission standards and ambient air monitoring to be implemented over a multi-year
period. We do not anticipate that MPC’s costs to comply with the revised regulations will be material to our
results of operations or cash flows.

Water

We maintain numerous discharge permits as required under the National Pollutant Discharge Elimination System
program of the CWA and have implemented systems to oversee our compliance with these permits. In addition,
we are regulated under OPA-90, which among other things, requires the owner or operator of a tank vessel or a
facility to maintain an emergency plan to respond to releases of oil or hazardous substances. OPA-90 also
requires the responsible company to pay resulting removal costs and damages and provides for civil penalties and
criminal sanctions for violations of its provisions. We operate tank vessels and facilities from which spills of oil
and hazardous substances could occur. We have implemented emergency oil response plans for all of our
components and facilities covered by OPA-90 and we have established 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-hulled requirements of OPA-90.
Some coastal states in which we operate have passed state laws similar to OPA-90, but with expanded liability
provisions,
include provisions for cargo owner responsibility as well as ship owner and operator
responsibility.

that

In June 2015, the EPA and the United States Army Corps of Engineers finalized significant changes to the
definition of the term “waters of the United States” (“WOTUS”) used in numerous programs under the CWA.
This final rulemaking is referred to as the Clean Water Rule. The Clean Water Rule, as written, expands
permitting, planning and reporting obligations and may extend the timing to secure permits for pipeline and fixed
asset construction and maintenance activities. The Clean Water Rule has been challenged in multiple federal
courts by many states, trade groups, and other interested parties, and in October 2015, a United States Court of
Appeals issued a nationwide stay of the Clean Water Rule. On appeal, however, the Supreme Court determined
that the court of appeals did not have original jurisdiction to review challenges to the 2015 Rule. As such, legal
challenges to the rule will proceed in federal district courts. Concurrent with the legal challenges, on
February 28, 2017, President Trump signed Executive Order 13778, directing the EPA and the Army Corps of
Engineers to review the 2015 Rule for consistency with the policy outlined in the Order, and to issue a proposed
rule rescinding or revising the 2015 Rule as appropriate and consistent with law. The Order also directed the
agencies to consider interpreting the term ‘‘navigable waters’’ in a manner consistent with Justice Scalia’s
plurality opinion in Rapanos v. United States, 547 U.S. 715 (2006). On June 27, 2017, the EPA and the U.S.
Army Corps of Engineers proposed a rule to rescind the Clean Water Rule and re-codify the regulatory text that
existed prior to 2015 defining “waters of the United States.” Then, on February 6, 2018, the EPA and the U.S.
Army Corps of Engineers published a final rule adding an applicability date of February 6, 2020, to the 2015
Clean Water Rule. Establishing an applicable date in 2020 will allow the agencies the time needed to reconsider
the definition of “waters of the United States” consistent with the Executive Order.

In 2015, the EPA issued its intent to review the CWA categorical effluent limitation guidelines (“ELG”) for the
petroleum refining sector. During 2017, the EPA prepared and issued a draft information request (“ICR”)
requesting significant wastewater and treatment process details from select refineries, four of which were ours.
EPA may also perform sampling of effluent at one or more of our refineries. The EPA has indicated they believe
there have been significant changes in the characteristics of waste waters generated within refining operations
that warrant the review. Specific targets for the review are the impacts of processing heavier crude oils and the
transfer of air pollutants to wastewater when air pollution abatement devices are in use. A similar project,
initiated in 2007 for steam electric power generation with similar attributes, resulted in a significant change in the
treatment requirements for coal-fired power plants. However, on September 18, 2017, EPA postponed certain
compliance dates while it conducts a rulemaking to revise the ELGs for power plants. The refining sector ELG
review has the potential to result in a similar impact. The typical life-cycle for an ELG review from the intent to
review to issuance of a final rule that would require upgrades is seven years. The impact of an ELG review
cannot be accurately estimated at this time.

Solid Waste

We continue to seek methods to minimize the generation of hazardous wastes in our operations. RCRA
establishes standards for the management of solid and hazardous wastes. Besides affecting waste disposal
practices, RCRA also addresses the environmental effects of certain past waste disposal operations, the recycling
of wastes and the regulation of USTs containing regulated substances. We have ongoing RCRA treatment and
disposal operations at our Galveston Bay and Robinson refineries 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.

Remediation

We own or operate, or have owned or operated, certain convenience stores and other locations where, during the
normal course of operations, releases of refined products from USTs have occurred. Federal and state laws
require that contamination caused by such releases at these sites be assessed and remediated to meet applicable
standards. Penalties or other sanctions may be imposed for noncompliance. The enforcement of the UST
regulations under RCRA has been delegated to the states, which administer their own UST programs. Our
obligation to remediate such contamination varies, depending on the extent of the releases and the stringency of
the applicable state laws and regulations. A portion of these remediation costs may be recoverable from the
appropriate state UST reimbursement funds once the applicable deductibles have been satisfied. We also have
ongoing remediation projects at a number of our current and former refinery, terminal and pipeline locations.

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 to facilitate the clean-up of hazardous substances without regard to
fault. Potentially responsible parties for each site include present and former owners and operators of,
transporters to and generators of the hazardous substances at the site. Liability is strict and can be joint and
several. Because of various factors including the difficulty of identifying the responsible parties for any particular
site, the complexity of determining the relative liability among them, the uncertainty as to the most desirable
remediation techniques and the amount of damages and clean-up costs and the time period during which such
costs may be incurred, we are unable to reasonably estimate our ultimate cost of compliance with CERCLA;
however, we do not believe such costs will be material to our business, financial condition, results of operations
or cash flows.

Mileage Standards, Renewable Fuels and Other Fuels Requirements

The U.S. Congress passed the Energy Independence and Security Act of 2007 (“EISA”), which, among other
things, set a target of 35 miles per gallon for the combined fleet of cars and light trucks in the United States by
model year 2020, and contains the RFS2. In August 2012, the EPA and the National Highway Traffic Safety

Administration (“NHTSA”) jointly adopted regulations that establish average industry fleet fuel economy
standards for passenger 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 by model year 2025. The standards from 2022 to 2025 are
the government’s current estimate but will require further rulemaking by the NHTSA. In 2017, the EPA
announced its intention to reconsider whether the light-duty vehicle greenhouse gas emission standards
previously established for years 2022-2025 are appropriate under section 202(a) of the Clean Air Act and to
coordinate its reconsideration with the parallel rulemaking process to be undertaken by the Department of
Transportation’s NHTSA regarding Corporate Average Fuel Economy (CAFE) standards for cars and light trucks
for the same model years. Higher CAFE standards for cars and light trucks have the potential to reduce demand
for our transportation fuels. New or alternative transportation fuels such as compressed natural gas could also
pose a competitive threat to our operations.

The RFS2 requires the total volume of renewable transportation fuels sold or introduced annually in the U.S. to
reach 24.0 billion gallons in 2017, 26.0 billion gallons in 2018 and increase to 36.0 billion gallons by 2022.
Within the total volume of renewable fuel, EISA established an advanced biofuel volume of 9.0 billion gallons in
2017, 11.0 billion gallons in 2018 and increasing to 21.0 billion gallons in 2022. Subsets within the advanced
biofuel volume include biomass-based diesel, which was set as at least 1.0 billion gallons in 2014 through 2022
(to be determined by the EPA through rulemaking), and cellulosic biofuel, which was set at 5.5 billion gallons in
2017, 7.0 billion gallons in 2018 and increasing to 16.0 billion gallons in 2022.

On November 30, 2015, the EPA finalized the renewable fuel standards for the years of 2014, 2015 and 2016 as
well as the biomass-based diesel standard for 2017. In a legal challenge to the 2014-2016 volumes, the court
vacated the total renewable volume for 2016 and remanded to EPA for reconsideration consistent with the court’s
opinion. A remanded rule that increases the 2016 total renewable volume could increase our cost of compliance
with the Renewable Fuels Standards and be detrimental to the RIN market.

On November 23, 2016, the EPA finalized the renewable fuel standards for the year 2017 and the biomass based
diesel standard for 2018. The EPA used its cellulosic waiver authority to reduce the standards for 2017 from the
statutory amounts to the following: 19.28 billion gallons total renewable fuel; 4.28 billion gallons advanced
biofuel; and 311 million gallons cellulosic ethanol. The EPA increased the biomass based diesel standard for
2018 to 2.1 billion gallons. The 2017 standards have been challenged in court. On November 30, 2017, the EPA
announced the final renewable fuel standards for 2018 and the biomass based diesel standard for 2019. The EPA
again used its cellulosic waiver authority to reduce the standards for 2018 from the statutory amounts to the
following: 19.29 billion gallons total renewable fuel; 4.29 billion gallons advanced biofuel; and 288 million
gallons cellulosic ethanol. The EPA maintained the biomass based diesel standard for 2019 at 2.1 billion gallons.
In the near term, the RFS2 will be satisfied primarily with ethanol blended into gasoline. Vehicle, regulatory and
infrastructure constraints limit the blending of significantly more than 10 percent ethanol into gasoline (“E10”).
The volumes for 2016, 2017 and 2018 result in the ethanol content of gasoline exceeding the E10 blendwall,
which will require obligated parties to either sell E15 or ethanol flex fuel at levels that exceed historical levels or
retire carryover RINs. In October 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 into gasoline from E10 to E15 for model year 2007 and
newer light-duty motor vehicles. In January 2011, the EPA issued a second waiver for the use of E15 in vehicles
model year 2001-2006. There are numerous issues, including state and federal regulatory issues, associated with
marketing E15 such as infrastructure compatibility issues and vehicle manufacturer warranty concerns related to
E15 usage. Neither E15 nor ethanol flex fuel has been readily accepted by the consumer.

With potentially uncertain supplies, the advanced biofuels programs may present specific challenges in that we
may have to enter into arrangements with other parties or purchase credits from the EPA to meet our obligations
to use advanced biofuels, including biomass-based diesel and cellulosic biofuel.

We made investments in infrastructure capable of expanding biodiesel blending capability to help comply with
the biodiesel RFS2 requirement by buying and blending biodiesel into our refined diesel product, and by buying

needed biodiesel RINs in the EPA-created biodiesel RINs market. On April 1, 2014, we purchased a facility in
Cincinnati, Ohio, which currently produces biodiesel, glycerin and other by-products. The capacity of the plant is
approximately 60 million gallons per year. As a producer of biodiesel, we now generate RINs, thereby reducing
our reliance on the external RIN market.

In November 2017, the EPA finalized its decision to deny petitions requesting that the point of obligation for the
RFS2 be moved to the terminal rack. Legal challenge of the EPA’s decision is expected and, should the court
decide that EPA’s decision was incorrect and move the point of obligation, we could be subject to increased costs
and compliance uncertainties.

The RFS2 has required, and may in the future continue to require, additional capital expenditures or expenses by
us to accommodate increased renewable fuels use. We may experience a decrease in demand for refined products
due to an increase in combined fleet mileage or due to refined products being replaced by renewable fuels.
Demand for our refined products also may increase as a result of low carbon fuel standard programs or electric
vehicle mandates.

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 sulfur level in gasoline to no more than 10 ppm beginning in calendar year
2017. In addition, gasoline refiners and importers may not exceed a maximum 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 will
spend an estimated $650 million between 2014 and 2019 for capital expenditures necessary to comply with these
standards, which includes estimated capital expenditures of approximately $400 million in 2018-2019.

Trademarks, Patents and Licenses

Our Marathon trademark is material to the conduct of our refining and marketing operations, and our Speedway
trademark is material to the conduct of our retail marketing operations. We currently hold a number of U.S. and
foreign patents and have various pending patent applications. Although in the aggregate our 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 our business as a whole. In general, we depend on our technological capabilities and the
application of know-how rather than patents and licenses in the conduct of our operations.

Employees

We had approximately 43,800 regular full-time and part-time employees as of December 31, 2017, which
includes approximately 32,150 employees of Speedway.

Certain hourly employees at our Canton, Catlettsburg and Galveston Bay refineries are represented by the United
Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers Union under
labor agreements that are due to expire in 2019. The International Brotherhood of Teamsters represents certain
hourly employees at our Detroit refinery under a labor agreement that is also scheduled to expire in 2019. In
addition, they represent certain hourly employees at Speedway under agreements that cover certain retail
locations in New York and New Jersey that expire on March 14, 2019 and June 30, 2019, respectively. In
addition, certain hourly employees at our Cincinnati biofuel production facility are represented by the Employees
Representation Association under a labor agreement that is due to expire in 2021.

Executive and Corporate Officers of the Registrant

The executive and corporate officers of MPC are as follows:

Name

February 1, 2018 Position with MPC

Age as of

Gary R. Heminger

Molly R. Benson(a)

Raymond L. Brooks

Suzanne Gagle

Timothy T. Griffith

Thomas Kaczynski

Thomas M. Kelley

Anthony R. Kenney

D. Rick Linhardt(a)

C. Michael Palmer

Brian K. Partee(a)

John J. Quaid

David R. Sauber

Donald C. Templin

Donald W. Wehrly(a)

David L. Whikehart(a)

(a) Corporate officer.

Chairman and Chief Executive Officer

Vice President, Corporate Secretary and Chief Compliance Officer

Senior Vice President, Refining

Vice President and General Counsel

Senior Vice President and Chief Financial Officer

Vice President, Finance and Treasurer

Senior Vice President, Marketing

President, Speedway LLC

Vice President, Tax

Senior Vice President, Supply, Distribution and Planning

Vice President, Business Development

Vice President and Controller

Senior Vice President, Human Resources, Health and Administrative
Services

President

Vice President and Chief Information Officer

Vice President, Environment, Safety and Corporate Affairs

Mr. Heminger is chairman of the board and chief executive officer. He has served as the chairman of the board
since April 2016 and as chief executive officer since 2011. Mr. Heminger also served as president from 2011
until 2017, and as president of Marathon Petroleum Company LP (formerly known as Marathon Ashland
Petroleum LLC and Marathon Petroleum Company LLC), currently a wholly owned subsidiary of MPC and prior
to the Spinoff, a wholly owned subsidiary of Marathon Oil. He assumed responsibility as president of Marathon
Petroleum Company LP in September 2001.

Ms. Benson was appointed vice president, corporate secretary and chief compliance officer effective March 1,
2016. Prior to this appointment, Ms. Benson was assistant general counsel, corporate and finance beginning in
April 2012, group counsel, corporate and finance beginning in 2011, group counsel, North American production
for Marathon Oil Company beginning in 2010 and senior attorney, downstream business beginning in 2006.

Mr. Brooks was appointed senior vice president, Refining effective March 1, 2016. Prior to this appointment,
Mr. Brooks was general manager, Galveston Bay refinery beginning in February 2013, general manager,
Robinson refinery beginning in 2010 and general manager, St. Paul Park, Minnesota refinery (no longer owned
by MPC) beginning in 2006.

Ms. Gagle was appointed vice president and general counsel effective March 1, 2016. Prior to this appointment,
Ms. Gagle was assistant general counsel, litigation and Human Resources beginning in April 2011, senior group
counsel, downstream operations beginning in 2010 and group counsel, litigation, beginning in 2003.

Mr. Griffith was appointed senior vice president and chief financial officer effective March 3, 2015. Prior to this
appointment, Mr. Griffith served as vice president, Finance and Investor Relations, and treasurer beginning in

January 2014. He was vice president of Finance and treasurer beginning in August 2011. Previously, Mr. Griffith
was vice president Investor Relations and treasurer of Smurfit-Stone Container Corporation, a packaging
manufacturer, in St. Louis, Missouri, from 2008 to 2011.

Mr. Kaczynski was appointed vice president, Finance and treasurer effective August 31, 2015. Prior to this
appointment, Mr. Kaczynski was vice president and treasurer of Goodyear Tire and Rubber Company, one of the
world’s largest tire manufacturers, beginning in 2014. Previously, he served as vice president, Investor Relations,
of Goodyear Tire and Rubber Company beginning in 2013, vice president and corporate treasurer of Affinia
Group Inc. beginning in 2005, and director of affiliate finance and of capital markets and bank relations of
Visteon Corporation beginning in 2000.

Mr. Kelley was appointed senior vice president, Marketing effective June 30, 2011. Prior to this appointment,
Mr. Kelley served in the same capacity for Marathon Petroleum Company LP beginning in January 2010.
Previously, he served as director of Crude Supply and Logistics for Marathon Petroleum Company LP beginning
in 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. Prior to this appointment, Mr. Kenney
served as vice president, Business Development of Marathon Ashland Petroleum LLC beginning in 2001.

Mr. Linhardt was appointed vice president, Tax effective February 1, 2018. Prior to this appointment,
Mr. Linhardt served as director of Tax beginning in June 2017 and manager of Tax Compliance beginning in
May 2013. Previously, he served as head of tax at RRI Energy, Inc., an energy service provider, beginning in
2009.

Mr. Palmer was appointed senior vice president, Supply, Distribution and Planning effective June 30, 2011. Prior
to this appointment, Mr. Palmer served as vice president, Crude, Supply and Logistics for Marathon Petroleum
Company LP beginning in June 2010. He served as director of Crude, Supply and Logistics beginning in
February 2010, and as senior vice president, Oil Sands Operations and Commercial Activities for Marathon Oil
Canada Corporation beginning in 2007.

Mr. Partee was appointed vice president, Business Development effective February 1, 2018. Prior to this
appointment, Mr. Partee was director of Business Development beginning in January 2017. Previously, he was
manager of crude oil
logistics beginning in September 2014, vice president, Business Development and
Franchise at Speedway beginning in November 2012 and commercial director for Speedway beginning in
December 2009.

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 United States Steel Corporation (“U. S. Steel”), an integrated steel
producer, beginning in January 2014. Previously, Mr. Quaid served in various leadership positions at U. S. Steel
since February 2002, including vice president and treasurer beginning in August 2011, controller, North
American Flat-Rolled Operations beginning in July 2010 and assistant corporate controller beginning in 2008.

Mr. Sauber was appointed senior vice president, Human Resources, Health and Administrative services effective
January 1, 2018. Prior to this appointment, Mr. Sauber served as vice president, Human Resources and Labor
Relations beginning February 1, 2017. Previously he was vice president, Human Resources Policy, Benefits and
Services of Shell Oil Company, a global energy and petrochemical company, beginning in 2013 and served in
various leadership positions at Shell Oil Company since 2000 including regional Human Resources manager for
U.S. manufacturing in 2009.

Mr. Templin was appointed president effective July 1, 2017. Prior to this appointment, Mr. Templin served as
executive vice president beginning January 1, 2016, executive vice president, Supply, Transportation and
Marketing beginning March 3, 2015 and senior vice president and chief financial officer beginning on June 30,
2011. Previously, he was a partner at PricewaterhouseCoopers 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 of Information Technology Services for Marathon Petroleum
Company LP beginning in 2003.

Mr. Whikehart was appointed vice president, Environment, Safety and Corporate Affairs effective February 29,
2016. Prior to this appointment, Mr. Whikehart served as vice president, Corporate Planning, Government &
Public Affairs effective January 1, 2016 and director, Product Supply and Optimization beginning in March
2011. Previously, Mr. Whikehart served as director, Climate Change and Carbon Management beginning in 2010
and director, Business Development beginning in 2008.

Available Information

information about MPC,

General
Committee, Compensation Committee and Corporate Governance and Nominating Committee, can be found at
http://ir.marathonpetroleum.com. In addition, our Code of Business Conduct and Code of Ethics for Senior
Financial Officers are also available in this same location.

including Corporate Governance Principles and Charters for the Audit

MPC uses its website, www.marathonpetroleum.com, as a channel for routine distribution of important
information, including news releases, analyst presentations, 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, as well as any
amendments and exhibits to those reports, are available free of charge through our website as soon as reasonably
practicable after the reports are filed or furnished with the SEC. These documents are also available in hard copy,
free of charge, by contacting our Investor Relations office. In addition, our website allows investors and other
interested persons to sign up to automatically receive email alerts when we post news releases and financial
information on our website. Information contained on our website is not incorporated into this Annual Report on
Form 10-K or other securities filings.

Item 1A. Risk Factors

You 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 us and 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 of our 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, the trading price of our common stock could decline.

Risks Relating to our Business

A substantial or extended decline in refining and marketing margins would reduce our operating results
and cash flows and could materially and adversely impact our future rate of growth, the carrying value of
our assets and our ability to execute share repurchases and continue the payment of our 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 payment of our base dividend are highly dependent on the margins we realize
on our refined products. The measure of the difference between market prices for refined products and crude oil,
or crack spread, is commonly used by the industry as a proxy for refining and marketing margins. Historically,
refining and marketing margins have been volatile, and we believe they will continue to be volatile. Our margins
from the sale of gasoline and other refined products 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 we refine. 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 global market conditions. Any overall change in crack spreads will impact our refining and marketing
margins. Many of the factors influencing a change in crack spreads and refining and marketing 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-term effects of these and other factors on refining and marketing margins
are uncertain. We purchase our crude oil and other refinery feedstocks weeks before we refine them and sell the
refined products. Price level changes during the period between purchasing feedstocks and selling the refined
products from these feedstocks could have a significant effect on our financial results. We also purchase refined

products manufactured by others for resale to our customers. Price changes during the periods between
purchasing and reselling those refined products also could have a material adverse effect on our business,
financial condition, results of operations and cash flows.

Lower refining and marketing margins may reduce the amount of refined products we produce, which may
reduce our revenues, income from operations and cash flows. Significant reductions in refining and marketing
margins could require us to reduce our capital expenditures, impair the carrying value of our assets (such as
property, plant and equipment, inventory or goodwill), decrease or eliminate our share repurchase activity and
our base dividend.

Our operations are subject to business interruptions and casualty losses. Failure to manage risks
associated with business interruptions could adversely impact 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 of terrorism. For
example, pipelines provide a nearly-exclusive form of transportation of crude oil to, or refined products from,
some of our refineries. In such instances, a prolonged interruption in service of such a pipeline could materially
and adversely affect the operations, profitability and cash flows of the impacted refinery.

Explosions, fires, refinery or pipeline releases or other incidents involving our assets or operations could result in
serious personal injury or loss of human life, significant damage to property and equipment, environmental
pollution, impairment of operations and substantial losses to us. Damages resulting from an incident involving
any of our assets or operations may result in our being named as a defendant in one or more lawsuits asserting
potentially substantial claims 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 adversely affected 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 involving our 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 resulting business interruption to our major facilities,
with significant self-insured retentions. In the future, we may not be able to maintain insurance of the types and
amounts we desire at reasonable rates.

We rely on the performance of our information technology systems, the failure of which due to cyber-
security threats or other risks could have an adverse effect on our business, financial condition, results of
operations and cash flows.

We are heavily dependent on our information technology systems, network infrastructure and maintain cloud
applications for the effective operation of our business. We rely on such systems to process, transmit and store
electronic information, including financial records and personally identifiable information such as employee,
customer, investor and payroll data, and to manage or support a variety of business processes, including our
supply chain, pipeline operations, gathering and processing operations, retail sales, credit card payments and
transactions, banking and
authorizations at our Speedway and Marathon branded retail outlets, financial
numerous other processes and transactions. These information systems
involve data network and
telecommunications, Internet access and website functionality, and various computer hardware equipment and
software applications, including those that are critical to the safe operation of our business. Our systems and

infrastructure are subject to damage or interruption from a number of potential sources including natural
disasters, software viruses or other malware, power failures, cyber-attacks and other events. We also face various
other cyber-security threats from criminal hackers, state-sponsored intrusion, industrial espionage and employee
malfeasance, including threats to gain unauthorized access to sensitive information or to render data or systems
unusable. To protect against such attempts of unauthorized access or attack, we have implemented infrastructure
protection technologies and disaster recovery plans and continuously provide employee awareness training
around phishing, malware and other cyber-attacks to help ensure we are protected against cyber risks and security
breaches. While we have invested significant amounts in the protection of our technology systems and maintain
what we believe are adequate security controls over personally identifiable customer, investor and employee
data, there can be no guarantee such plans, to the extent they are in place, will be effective. Certain vendors have
access to sensitive information, including personally identifiable customer, investor and employee data and a
breakdown of their technology systems or infrastructure as a result of a cyber-attack or otherwise could result in
unauthorized disclosure of such information. Unauthorized disclosure of sensitive or personally identifiable
information,
including by cyber-attacks or other security breach, could cause loss of data, give rise to
remediation or other expenses, expose us to liability under federal and state laws, reduce our customers’
willingness to do business with us, disrupt the services we provide to customers and subject us to litigation and
investigations, which could have an adverse effect on our reputation, business, financial condition, results of
operations and cash flows. In addition, our applicable insurance may not compensate us adequately for losses that
may occur. State and federal cyber-security legislation could also impose new requirements, which could
increase our cost of doing business.

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 by fully integrated major oil companies or their dealers or jobbers,
and other well-recognized national or regional retail outlets, often selling gasoline or merchandise at very
competitive prices. Several non-traditional retailers such as supermarkets, club stores and mass merchants are in
the retail business. These non-traditional gasoline retailers have obtained a significant share of the transportation
fuels market and we expect their market share to grow. Because of their diversity, integration of operations,
experienced management and greater financial resources, these companies may be better able to withstand
volatile market 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 gasoline or 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 with other industries that provide alternative means to satisfy the
energy and fuel needs of our consumers. Increased competition from these alternatives as a result of
governmental regulations, technological advances and consumer demand could have an impact on pricing and
demand for our products and our profitability.

We 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 discussed above, we could experience interruptions of supply or increases
in costs to deliver refined products to market if the ability of the pipelines, railways or vessels to transport crude
oil or refined products is disrupted because of weather events, accidents, governmental regulations or third-party
actions. A prolonged disruption 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 a material 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 commission merchant or counterparty to perform would affect these transactions. To
the extent the instruments we utilize to manage these exposures are not effective, we may incur losses related to
the ineffective portion of the derivative transaction or costs related to moving the derivative positions to another
futures commission 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 a deterioration of our credit profile, a decrease in debt capacity or
unsecured commercial credit available to us, or by factors adversely affecting credit markets generally.

At December 31, 2017, our total debt obligations for borrowed money and capital lease obligations were
$13.4 billion,
including $7.4 billion of obligations of MPLX. We may incur substantial additional debt
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 for working 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 profile could increase our costs of borrowing money and/or limit our
access to the capital markets and commercial credit, which could materially and adversely affect our business,
financial condition, results of operations and cash flows.

We have a trade receivables securitization facility that provides liquidity of up to $750 million depending on the
amount of eligible domestic trade accounts receivables. In periods of lower prices, we may not have sufficient
eligible accounts receivables to support full availability of this facility.

Historic 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, including those of MPLX, and those of our predecessors could expose us to litigation and civil
claims by private plaintiffs for alleged damages related to contamination of the environment or personal injuries
caused by releases of hazardous substances from our facilities, products liability, consumer credit or privacy
laws, product pricing or antitrust laws or any other 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, in class-action litigation,

large classes of plaintiffs may allege damages relating to extended periods of time or other alleged facts and
circumstances that could increase the amount of potential damages. Attorneys general and other government
officials may pursue litigation in which they seek to recover civil damages from companies on behalf of a state or
its citizens for a variety of claims, including violation of consumer protection and product pricing laws or natural
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
substantial liability, plaintiffs in litigation may also seek injunctive relief which, if imposed, could have a
material adverse effect on our future business, financial condition, 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 37 percent of our refining employees are covered by collective bargaining agreements. 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
under labor agreements that are due to expire in 2019. The International Brotherhood of Teamsters represents
certain hourly employees at our Detroit refinery under a labor agreement that is also scheduled to expire in 2019.
In addition, they represent certain hourly employees at Speedway under agreements that cover certain retail
locations in New York and New Jersey that expire on March 14, 2019 and June 30, 2019, respectively. 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 to certain 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 may increase the possibility of claims of breach of fiduciary duties
including claims of conflicts of interest related to MPLX. Any liability resulting from such claims could have a
material adverse effect on our future business, financial condition, results of operations and cash flows.

If foreign investment in us or MPLX exceeds certain levels, MPLX could be prohibited from operating
inland river vessels, which could materially and adversely 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 in U.S. coastwise trade be owned by U.S. citizens. Among other
requirements to establish citizenship, entities that own such vessels must be owned at least 75 percent by U.S.
citizens. If we fail to maintain compliance with the Maritime Laws, MPLX would be prohibited from operating
vessels in the U.S. inland waters. 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 the tax sharing agreement and separation and distribution
agreement we entered into with Marathon Oil that could materially and adversely affect our business,
financial condition, results of operations 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 Code of 1986 (the “Code”) and related rules and regulations, each

corporation that was a member of the Marathon Oil consolidated tax reporting group during any taxable 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 tax liability of the entire Marathon Oil consolidated tax reporting group for that taxable
period. In connection with the Spinoff, we entered into a tax sharing agreement with Marathon Oil that allocates
the responsibility for prior period taxes of the Marathon Oil consolidated tax reporting group between us and
Marathon 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 of such taxes. Other provisions of federal law establish similar
liability for other matters, including laws governing tax-qualified pension plans as well as other contingent
liabilities.

Also 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 result of the Spinoff (or
certain internal restructuring transactions) failing to qualify as transactions under Sections 368(a) and 355 of the
Code for U.S. federal income 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 or certain affiliates made in connection with the
issuance of the private letter ruling relating to the Spinoff or in the tax sharing agreement. In addition, we agreed
to indemnify Marathon Oil for specified tax-related liabilities associated with our 2005 acquisition of the
minority interest in our refining joint venture from Ashland Inc. Our indemnification obligations to Marathon Oil
and its subsidiaries, officers and directors are not limited or subject to any cap. If we are required to indemnify
Marathon Oil and its subsidiaries and their respective officers and directors under the tax sharing agreement, we
may be subject to substantial liabilities. At this time, we cannot precisely quantify the amount of these liabilities
that have been assumed pursuant to the tax sharing agreement, and there can be no assurances as to their final
amounts.

Also, in connection with the Spinoff, we entered into a separation and distribution agreement with Marathon Oil
that provides for, among other things, the principal corporate transactions that were required to effect the Spinoff,
certain conditions to the Spinoff and provisions governing the relationship between our company and Marathon
Oil with respect to and resulting from the Spinoff. Among other things, the separation and distribution agreement
provides for indemnification obligations designed to make us financially responsible for substantially all
liabilities that may exist relating to our downstream business activities, whether incurred prior to or after the
Spinoff, as well as certain obligations of Marathon Oil assumed by us. Our obligations to indemnify Marathon
Oil under the circumstances set forth in the separation and distribution agreement could subject us to substantial
liabilities. Marathon Oil also agreed to indemnify us for certain liabilities. However, third parties could seek to
hold us responsible for any of the liabilities retained by Marathon Oil, and there can be 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 able to 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 temporarily
required to bear these losses ourselves. The tax liabilities and underlying liabilities in the event Marathon Oil is
unable to satisfy its indemnification obligations described in this paragraph could have a material adverse effect
on our business, financial condition, results of operation and cash flows.

Significant acquisitions in the future will 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 future transactions involving the addition of new assets or businesses will 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 to finance 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 is inadequate;

• 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.

A significant decrease or delay in oil and natural gas production in MPLX’s areas of operation, whether
due to sustained declines in oil, natural gas and NGL prices, natural declines in well production, or
otherwise, may adversely affect MPLX’s business, results of operations and financial condition, and could
reduce MPLX’s ability to make distributions to us.

A significant portion of MPLX’s operations are dependent upon production from oil and natural gas reserves and
wells owned by its producer customers, which will naturally decline over time, which means that MPLX’s cash
flows associated with these wells will also decline over time. To maintain or increase throughput levels and the
utilization rate of MPLX’s facilities, MPLX must continually obtain new oil, natural gas and NGL supplies,
which depends in part on the level of successful drilling activity near its facilities.

We have no control over the level of drilling activity in the areas of MPLX’s operations, the amount of reserves
associated with the wells or the rate at which production from a well will decline. In addition, we have no control
over producers or their production decisions, which are affected by, among other things, prevailing and projected
energy prices, drilling costs per Mcf or barrel, demand for hydrocarbons, operational challenges, access to
downstream markets,
the level of reserves, geological considerations, governmental regulations and the
availability and cost of capital. Because of these factors, even if new oil or natural gas reserves are discovered in
areas served by MPLX assets, producers may choose not to develop those reserves. If MPLX is not able to obtain
new supplies of oil, natural gas or NGLs to replace the natural decline in volumes from existing wells,
throughput on MPLX pipelines and the utilization rates of MPLX facilities would decline, which could have a
material adverse effect on MPLX’s business, results of operations and financial condition and could reduce
MPLX’s ability to make distributions to us.

Decreases in energy prices can decrease drilling activity, production rates and investments by third parties in the
development of new oil and natural gas reserves. The prices for oil, natural gas and NGLs depend upon factors
beyond our control, including global and local demand, production levels, changes in interstate pipeline gas
quality specifications, imports and exports, seasonality and weather conditions, economic and political conditions
domestically and internationally and governmental regulations. Sustained periods of low prices could result in
producers also significantly curtailing or limiting their oil and gas drilling operations which could substantially
delay the production and delivery of volumes of oil, natural gas and NGLs to MPLX’s facilities and adversely
affect MPLX’s revenues and cash available for distribution to us. This impact may also be exacerbated due to the
extent of MPLX’s commodity-based contracts, which are more directly impacted by changes in natural gas and
NGL prices than its fee-based contracts due to frac spread exposure and may result in operating losses when
natural gas becomes more expensive on a Btu equivalent basis than NGL products. In addition, MPLX’s
purchase and resale of natural gas and NGLs in the ordinary course exposes MPLX to significant risk of
volatility in natural gas or NGL prices due to the potential difference in the time of the purchases and sales and
the potential difference in the price associated with each transaction, and direct exposure may also occur
naturally as a result of MPLX’s production processes. Also, the significant volatility in natural gas, NGL and oil
prices could adversely impact MPLX’s unit price, thereby increasing its distribution yield and cost of capital.
Such impacts could adversely impact MPLX’s ability to execute its long-term organic growth projects, satisfy

obligations to its customers and make distributions to unitholders at intended levels, and may also result in non-
cash impairments of long-lived assets or goodwill or other-than-temporary non-cash impairments of our equity
method investments.

Our recently completed strategic actions designed to enhance shareholder value may not deliver the
anticipated benefits.

In January 2017, we announced strategic actions designed to enhance shareholder value, including the significant
acceleration of dropdowns of midstream assets into MPLX and the exchange of our economic interests in the
general partner, including incentive distribution rights, for newly issued MPLX common units in conjunction
with the completion of such dropdowns. On March 1, 2017, we contributed certain terminal, pipeline and storage
assets to MPLX and on September 1, 2017 we contributed our joint-interest ownership in certain pipelines and
storage facilities to MPLX. On February 1, 2018, we completed the dropdown of our refining logistics assets and
fuels distribution services to MPLX and the exchange of our economic interests in the general partner, including
incentive distribution rights, for 275 million newly issued MPLX common units. We may not be able to achieve
the anticipated benefits of these actions and the market price of our common stock could decline if securities or
industry analysts or our investors disagree with these strategic actions or the way we implement such actions.
Accordingly, there is no assurance that these actions will be reflected in the market price of our stock to the
extent currently anticipated by management.

Significant stockholders may attempt to effect changes at our company or acquire control over our
company, which could impact the pursuit of business strategies and adversely affect our results of
operations and financial condition.

Our stockholders may from time to time engage in proxy solicitations, advance stockholder proposals or
otherwise attempt to effect changes or acquire control over our company. Campaigns by stockholders to effect
changes at publicly traded companies are sometimes led by investors seeking to increase short-term stockholder
value through actions such as financial restructuring, increased debt, special dividends, stock repurchases or sales
of assets or the entire company. Responding to proxy contests and other actions by activist stockholders can be
costly and time-consuming and could divert the attention of our board of directors and senior management from
the management of our operations and the pursuit of our business strategies. As a result, stockholder campaigns
could adversely affect our results of operations and financial condition.

Risks Relating to Our Industry

Changes in environmental or other laws or regulations may reduce our refining and marketing margin
and may result in substantial capital expenditures 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 and marketing 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,

climate change,

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 of operating facilities, marketing areas, crude oil and feedstock sources
and production processes. We may be required to make expenditures to modify operations, install pollution
control equipment, perform site cleanups or curtail operations that could materially and adversely affect our
business, financial condition, results of operations and cash flows.

Because the issue of climate change continues to receive scientific and political attention, there is the potential
for further legislation or regulation that could result in increased operating costs and reduced consumer demand
for the traditional transportation fuels we produce, transport, store and sell. Greenhouse gas emissions regulations
could be implemented, such as methods to further reduce methane emissions from our midstream assets, a carbon
tax or similar effort that increases the cost of our products, thereby reducing demand. Regardless of whether
climate change legislation or regulation is enacted, given the continuing global demand for oil and gas – even
under various hypothetical carbon-constrained scenarios – we believe we effectively budget for prospective costs
of climate regulations in our business and strategic planning and our approval of capital project allocations. Our
mature governance and risk-management processes enable us to effectively monitor and adjust to physical
climate-related risks. At this time, however, we cannot predict the extent to which any such legislation or
regulation will be enacted and, if enacted, what its impacts upon our operations would be.

We could also face increased climate-related litigation with respect to our operations or products. Private party
litigation is pending against MPC and other oil and gas companies in California state court. Although uncertain,
these types of actions could increase our costs of operations or reduce the demand for the refined products we
produce, transport, store and sell.

In October 2015, the EPA reduced the primary (health) ozone NAAQS to 70 ppb from the prior ozone level of
75 ppb. On November 6, 2017, the EPA finalized ozone attainment/unclassifiable designations under the new
standard. The EPA has not yet designated any counties as nonattainment under the lower primary ozone standard,
but such nonattainment designations could result in increased costs associated with, or result in cancellation or
delay of, capital projects at our facilities. States will also be required to adopt SIPs for nonattainment areas.
These SIPs may include NOx and/or VOC reductions that could result in increased costs to our facilities. We
cannot predict the various SIP requirements at this time.

The EISA established increases in fuel mileage standards. The Department of Transportation’s National Highway
Safety Administration and the EPA work in conjunction to establish CAFE standards and greenhouse gas
emission standards for light-duty vehicles that become more stringent over time. In addition, pursuant to a waiver
granted by the EPA, California and other states have enacted laws that require vehicle emission reductions.
Increases in fuel mileage standards and requirements for zero emission vehicles may reduce demand for refined
product.

The EISA also expanded the Renewable Fuel Standard (“RFS”) program administered by the EPA.
Governmental regulations encouraging the use of new or alternative fuels could pose a competitive threat to our
operations. The EISA required the total volume of renewable transportation fuels sold or introduced annually in
the U.S. to reach 36.0 billion gallons by 2022. The RFS presents production and logistics challenges for both the
renewable fuels and petroleum refining industries, and may continue to require additional capital expenditures or
expenses by us to accommodate increased renewable fuels use. Gasoline consumption has been lower than
forecasted by the EPA, which has led to concerns that the renewable fuel volumes may not be met. The 2018
renewable fuel standards were finalized and published on December 12, 2017. The final standards are lower than
the statutory requirements but nevertheless result in volumes that breach the ethanol “blendwall.” The advanced
biofuels program, a subset of the RFS requirements, creates uncertainties and presents challenges of supply, and
may require that we and 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 may further reduce refined product margins. The tax incentives and

subsidies are causing uncertainties because they have expired and been reinstituted retroactively. The biodiesel
credit, for example, expired at the end of 2016 and there is uncertainty if it will be reinstituted.

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 sulfur level in gasoline to no more than 10 parts ppm beginning in calendar
year 2017. In addition, gasoline refiners and importers may not exceed a maximum 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
will spend an estimated $650 million between 2014 and 2019 for capital expenditures necessary to comply with
these standards, which includes estimated capital expenditures of approximately $400 million in 2018-2019.

Federal, state and local legislation and regulatory initiatives relating to hydraulic fracturing could delay or
impede producer’s gas production or result in reduced volumes available for our midstream assets to gather,
process and fractionate. While we do not conduct hydraulic fracturing operations, we do provide gathering,
processing and fractionation services with respect to natural gas and natural gas liquids produced by our
customers as a result of such operations. If federal, state or local laws or regulations that significantly restrict
hydraulic fracturing are adopted, such legal requirements could make it more difficult to complete natural gas
wells in shale formations and increase producers’ costs of compliance.

Severe weather events may adversely affect our facilities and ongoing operations.

We have mature systems in place to manage potential acute physical risks, such as floods and hurricane-force
winds, and potential chronic physical risks, such as higher ocean levels. If any such events were to occur, they
could have an adverse effect on our assets and operations. Specifically, where appropriate, we are hardening and
modernizing assets against flood and wind damage and ensuring we have resiliency measures in place, such as
storm-specific readiness plans. We have incurred and will continue to incur additional costs to protect our assets
and operations from such physical risks and employ the evolving technologies and processes available to
mitigate such risks. To the extent such severe weather events increase in frequency and severity, we may be
required to modify operations and incur costs that could materially and adversely affect our business, financial
condition, results of operations and cash flows.

Plans we may have to expand existing assets or construct new assets are subject to risks associated with
societal and political pressures and other forms of opposition to the future development, transportation
and use of carbon-based fuels. Such risks could adversely impact our business and ability to realize certain
growth strategies.

Our anticipated growth and planned expenditures are based upon the assumption that societal sentiment will
continue to enable and existing regulations will remain intact to allow for the future development, transportation
and use of carbon-based fuels. A portion of our growth strategy is dependent on our ability to expand existing
assets and to construct additional assets. However, policy decisions relating to the production, refining,
transportation and marketing of carbon-based fuels are subject to political pressures and the influence and
protests of environmental and other special interest groups. One of the ways we may grow our business is
through the construction of new pipelines or the expansion of existing ones. The construction of a new pipeline
or the expansion of an existing pipeline, by adding horsepower or pump stations or by adding a second pipeline
along an existing pipeline, involves numerous regulatory, environmental, political, and legal uncertainties, most
of which are beyond our control. The approval process for storage and transportation projects has become
increasingly challenging, due in part to state and local concerns related to pipelines and negative public
perception regarding the oil and gas industry. These projects may not be completed on schedule (or at all) or at
the budgeted cost. In addition, our revenues may not increase immediately upon the expenditure of funds on a
particular project. For instance, if we build a new pipeline, the construction will occur over an extended period of
time and we will not receive any material increases in revenues until after completion of the project. Delays or
cost increases related to capital 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
cash flows.

Large capital projects can take many years to complete, and market conditions could deteriorate
significantly between the project approval date and the project startup date, negatively impacting project
returns. If we are unable to complete capital projects at their expected costs and in a timely manner, or if
the market conditions assumed in our project economics deteriorate, our business, financial condition,
results of operations and cash flows could be materially and adversely affected.

Delays or cost
increases related to capital spending programs involving engineering, procurement and
construction of facilities could materially adversely affect our ability to achieve forecasted internal rates of return
and operating results. Delays in making required changes or upgrades to our facilities could subject 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 of unpredictable 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, or those 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 with such factors or to recover the related costs, or if market conditions
change, it could materially and adversely affect our business, financial condition, results of operations and cash
flows.

The availability of crude oil and increases in crude oil prices may reduce profitability and refining and
marketing 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 we obtain for refined products. A portion of our crude oil is purchased
from various foreign national oil companies, production 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 world market. We are, therefore, subject to the attendant political, geographic and
economic risks of such a market. If one or more major supply sources were temporarily or permanently
eliminated, we believe adequate alternative supplies of crude oil would be available, but it is possible we would
be unable to find alternative sources of supply. If we are unable to obtain adequate crude oil volumes or are able
to obtain such volumes only at unfavorable prices, our operations, sales of refined products and refining and
marketing 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 and cash 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 in other 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 other developed countries. A
lower level of economic activity could result in a decline in energy consumption, which could cause our revenues
and margins to decline and limit our future growth prospects. These risks could lead to increased volatility in
prices for refined products, NGLs and natural gas. Additionally, these risks could increase instability in the
financial and insurance markets and make it more difficult and/or costly for us to access capital and to obtain the
insurance coverage that we consider adequate. Additionally, tax policy, legislative or regulatory action and
commercial restrictions could reduce our operating profitability. For example, the U.S. government could prevent
or restrict exports of refined products, NGLs, natural gas 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 us for tax liabilities in the
future and could materially and adversely impact our financial condition, results of operations and cash flows.

Additionally, many tax liabilities 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 future targets 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 attacks that severely disrupt the markets we serve could materially and adversely affect our results
of operations, financial position and cash flows.

Risks Relating to Ownership of Our Common Stock

Provisions in our corporate governance documents could operate to delay or prevent a change in control of
our company, dilute the voting power or reduce 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 a change 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 be acted on by stockholders at stockholder meetings;

establishing supermajority vote requirements for certain amendments to our restated certificate of
incorporation and stockholder proposals for amendments 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 persons friendly to current management, thereby protecting the
continuity of our management, or which could be used to dilute the stock ownership of persons 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 outstanding shares 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 our board 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 stock having such designation, powers, preferences and relative,
including preferences over our common stock respecting
participating, optional and other special rights,
dividends and distributions, as our board of directors generally may determine. The terms of one or more classes
or series of preferred stock could dilute 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 of our board of directors in all events or
on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or
redemption rights 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 cause ownership 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 also authorizes 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 our capital 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 to non-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 could adversely impact the market price of our common stock.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

See the detail below for the assets we own by segment. In addition, as of December 31, 2017, 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
Supplementary Data – Note 24 for additional information regarding our leases.

We believe that our properties and facilities are adequate for our operations and that our facilities are adequately
maintained.

Refining and Marketing

The table below sets forth the location and crude oil refining capacity for each of our refineries, which include
approximately 670 tanks with total tank storage capacity of approximately 60 million barrels, as of December 31,
2017.

Refinery

Galveston Bay, Texas City, Texas
Garyville, Louisiana
Catlettsburg, Kentucky
Robinson, Illinois
Detroit, Michigan
Canton, Ohio

Total

Crude Oil Refining
Capacity (mbpcd)(a)

571
556
277
245
139
93

1,881

(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 major maintenance activity.

The following table sets forth the approximate number of retail outlets by state where independent entrepreneurs
maintain Marathon-branded retail outlets, as of December 31, 2017.

State

Alabama

District of Columbia

Florida

Georgia

Illinois

Indiana

Kentucky

Louisiana

Maryland

Michigan

Minnesota

Mississippi

New York

North Carolina

Ohio

Pennsylvania

South Carolina

Tennessee

Virginia

West Virginia

Wisconsin

Total

Number of Marathon®
Retail Outlets

268

629

284

285

647

573

814

224

862

110

401

119

114

5,617

The following table sets forth details about our Refining & Marketing owned and operated terminals as of
December 31, 2017.

Owned and Operated Terminals

Light Products Terminals:

Ohio

Wisconsin

Subtotal light products terminals

Asphalt Terminals:

Florida

Illinois

Indiana

Kentucky

Louisiana

Michigan

Ohio

Pennsylvania

Tennessee

Subtotal asphalt terminals

Total owned and operated terminals

Number of
Terminals

Tank Storage
Capacity
(thousand barrels)

Number
of Tanks

Number of
Loading
Lanes

495

351

846

132

424

549

1,491

494

483

3,721

4,567

213

234

The following table sets forth details about our railcars as of December 31, 2017.

Class of Equipment

General service tank cars

High pressure tank cars

Open-top hoppers

Number of Railcars
Leased

Total

Owned

793

921

285

793

921

304

1,999

2,018

Capacity per Railcar

20,000-30,000 gallons

33,500 gallons

4,000 cubic feet

Speedway

The following table sets forth the number of Speedway® convenience stores by state as of December 31, 2017.

Number of
Convenience Stores(a)

241

123

311

147

109

305

235

277

489

116

2,744

State

Connecticut

Delaware

Florida

Georgia

Illinois

Indiana

Kentucky

Massachusetts

Michigan

New Hampshire

New Jersey

New York

North Carolina

Ohio

Pennsylvania

Rhode Island

South Carolina

Tennessee

Virginia

West Virginia

Wisconsin

Total

(a)

Includes stores with commercial fueling lanes.

Midstream-MPLX

The following tables set forth certain information relating to our crude and products pipeline systems and storage
assets as of December 31, 2017.

Pipeline System or Storage Asset

Origin

Destination

Diameter
(inches)

Length
(miles) Capacity(a) Associated MPC refinery

302

153

484

433

115

1,613

876

Crude oil pipeline systems (mbpd):

Patoka, IL to Lima, OH crude system

Lima, OH to Canton, OH crude system

Patoka, IL

Lima, OH

Canton, OH

Catlettsburg, KY and Robinson, IL crude

Patoka, IL

20”-22”

12”-16”

20”-24”

Catlettsburg, KY &
Robinson, IL

system

Detroit, MI crude system(b)

Samaria &
Romulus, MI

Detroit, MI

16”

Ozark crude system

Cushing, OK Wood River, IL

22”

Wood River, IL to Patoka, IL crude

system(b)

Wood River &
Roxana, IL

Patoka, IL

12”-22”

St. James, LA to Garyville, LA crude

St James, LA

Garyville, LA

30”

system

Inactive pipelines

Total

Products pipeline systems (mbpd):

Cornerstone products system

Cornerstone

Canton, OH

Garyville, LA products system

Garyville, LA

Zachary, LA

Texas City, TX products system

Texas City, TX

Pasadena, TX

ORPL products system

Robinson, IL products system(b)

Various

8”-16”

20”-36”

16”-36”

4”-14”

10”-16”

1,131

Woodhaven, MI to Detroit, MI

Woodhaven, MI

Detroit, MI

4”

Louisville, KY Airport products system

Louisville, KY

6”-8”

Inactive pipelines(b)

Total

Wood River, IL barge dock (mbpd)

Storage assets (thousand barrels):

Tank Farms(c)

Caverns

Total

140

2,360

Detroit, Canton

Canton

Catlettsburg, Robinson

Detroit

All Midwest refineries

Garyville, LA

Canton

Garyville

Galveston Bay

Catlettsburg, Canton

Robinson

N/A

Robinson

Garyville

N/A

267

515

197

230

314

620

N/A

2,227

238

389

215

368

513

N/A

1,764

18,642

2,755

21,397

(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 of our caverns and tank farms in thousands of barrels.

(b)

Includes pipelines leased from third parties.

As of December 31, 2017, MPLX had partial ownership interests in the following pipeline companies.

Pipeline Company

Origin

Destination

Diameter
(inches)

Length
(miles)

Ownership
Interest

Operated
by MPL

Crude oil pipeline companies:

Bakken Pipeline system

Illinois Extension Pipeline Company

LLC

LOCAP LLC

LOOP LLC (LOOP)(a)

Total

Products pipeline companies:

Bakken/Three
Forks area,
North Dakota

Nederland, TX

30”

1,921

9.2%

Flanagan, IL

Patoka, IL

Clovelly, LA

St. James, LA

Offshore Gulf of
Mexico

Clovelly, LA

24”

48”

35%

59%

41%

Explorer Pipeline Company

Port Arthur, TX Hammond, IN 12”-28”

Louisville, KY to Lexington, KY(c)

Louisville, KY Lexington, KY

8”

25%

65%

Yes

168

2,194

1,830

1,917

(a)

Excludes MPC’s 10% ownership interest in LOOP.

The following table sets forth details about MPLX owned and operated terminals as of December 31, 2017.
Additionally, MPLX operates one leased terminal and has partial ownership interest in two terminals.

Owned and Operated Terminals

Light Products Terminals:

Number of
Terminals

Tank Storage
Capacity
(thousand barrels)

Number
of Tanks

Number of
Loading
Lanes

Alabama

Florida

Georgia

Illinois

Indiana

Kentucky

Louisiana

Michigan

North Carolina

Ohio

Pennsylvania

South Carolina

Tennessee

West Virginia

Total light products terminals

443

3,422

998

1,275

3,229

2,587

2,440

1,509

3,227

390

370

1,148

1,587

22,722

101

552

179

The following table sets forth details about barges and towboats as of December 31, 2017.

Class of Equipment

Inland tank barges:(a)

Less than 25,000 barrels

25,000 barrels and over

Total

Inland towboats:

Less than 2,000 horsepower

2,000 horsepower and over

Total

(a) All of our barges are double-hulled.

Number
in Class

Capacity
(thousand barrels)

942

4,985

5,927

170

232

The following tables set forth certain information relating to our gas processing facilities, fractionation facilities,
de-ethanization facilities and natural gas gathering systems as of December 31, 2017, and include capacities and
throughputs related to operated equity method investments on a 100 percent basis.

Gas Processing Complexes

Location

Design
Throughput
Capacity
(MMcf/d)(a)

Natural Gas
Throughput
(MMcf/d)(b)

Utilization
of Design
Capacity(b)

Bluestone Complex

Houston Complex(c)

Majorsville Complex

Mobley Complex

Sherwood Complex(d)

Cadiz Complex(e)

Seneca Complex(e)

Kenova Complex(f)

Boldman Complex(f)

Cobb Complex

Kermit Complex(f)(g)

Langley Complex

Carthage Complex

Butler County, PA

Washington County, PA

Marshall County, WV

Wetzel County, WV

Doddridge County, WV

Harrison County, OH

Noble County, OH

Wayne County, WV

Pike County, KY

Kanawha County, WV

Mingo County, WV

Langley, KY

Panola County, TX

Western Oklahoma Complex

Custer and Beckham Counties, OK

Hidalgo System

Javelina Complex

Total

Culberson County, TX

Corpus Christi, TX

410

520

1,070

920

1,800

525

800

160

325

600

425

200

142

310

495

905

695

76%

95%

85%

76%

1,480

102%

509

475

108

N/A

101

399

373

199

112

97%

59%

68%

46%

37%

N/A

31%

67%

88%

100%

79%

81%

8,032

6,217

(a) Centrahoma processing capacity of 280 MMcf/d and actual throughput of 243 MMcf/d, that exceeded MPLX’s 40 percent share of the

capacity of 112 MMcf/d, are not included in this table as MPLX owns a non-operating interest.

(b) Natural gas throughput is a weighted average for days in operation. The utilization of design capacity has been calculated using the

weighted average design throughput capacity.

(c) Approximately 35 MMcf/d of processing capacity at the Houston Complex was decommissioned during the first quarter of 2017 and will

be replaced with 200 MMcf/d of processing capacity in 2018.

(d)

(e)

The Sherwood Complex is partially owned by Sherwood Midstream LLC (“Sherwood Midstream”), which MPLX accounts for as an
equity method investment.

The Cadiz and Seneca Complexes are owned by MarkWest Utica EMG, L.L.C. (“MarkWest Utica EMG”), which MPLX accounts for as
an equity method investment.

(f) A portion of the gas processed at the Boldman plant, and all of the gas processed at the Kermit plant, is further processed at the Kenova

plant to recover additional NGLs.

(g)

The Kermit processing plant is operated by a third party solely to prevent liquids from condensing in the gathering and transmission
pipelines upstream of our Kenova plant. MPLX does not receive Kermit gas volume information but does receive all of the liquids
produced at the Kermit Complex. As such, the natural gas throughput has been excluded from the total.

Fractionation & Condensate
Stabilization Complexes

Location

Bluestone Complex(b)(c)

Houston Complex(b)

Hopedale Complex(b)(d)

Ohio Condensate Complex(e)

Siloam Complex(f)

Javelina Complex

Total

Butler County, PA

Washington County, PA

Harrison County, OH

South Shore, KY

Corpus Christi, TX

Design
Throughput
Capacity
(mbpd)

NGL
Throughput
(mbpd)(a)

Utilization
of Design
Capacity(a)

180

345

134

249

40%

102%

77%

57%

58%

73%

(a) NGL throughput is a weighted average for days in operation. The utilization of design capacity has been calculated using the weighted

average design throughput capacity.

(b)

(c)

(d)

(e)

(f)

The MPLX Houston, Hopedale and Bluestone Complexes have above-ground NGL storage with a usable capacity of 32 million gallons,
large-scale truck and rail loading. In addition, the Houston Complex has large-scale truck unloading. MPLX also has access to up to an
additional 50 million gallons of propane storage capacity that can be utilized in the Marcellus Shale, Utica Shale and Appalachia region
under an agreement with a third party that expires in 2018. Lastly, MPLX has up to eight million gallons of propane storage with third
parties that can be utilized in the Marcellus Shale and Utica Shale.

Includes 33 mpbd of de-propanization only capacity.

The MPLX Hopedale Complex is jointly owned by Ohio Fractionation Company, L.L.C. (“Ohio Fractionation”) and MarkWest Utica
EMG. Ohio Fractionation is a joint venture between MarkWest Liberty Midstream & Resources, L.L.C. (“MarkWest Liberty
Midstream”) and Sherwood Midstream (a joint venture between Markwest Liberty Midstream and Antero Midstream LLC). MarkWest
Liberty Midstream and Sherwood Midstream are entities that operate in the Marcellus region, and Markwest Utica EMG is an entity that
operates in the Utica regions. MPLX accounts for MarkWest Utica EMG and Sherwood Midstream as equity method investments.

The Ohio Condensate Complex as up to 7 million gallons of condensate storage. The Ohio Condensate Complex is partially-owned by
MarkWest Utica EMG Condensate, L.L.C. MPLX accounts for Ohio Condensate as an equity method investment.

The MPLX Siloam Complex has both above-ground, pressurized NGL storage facilities, with usable capacity of two million gallons, and
underground storage facilities, with usable capacity of 10 million gallons. Product can be received by truck, pipeline or rail and can be
transported from the facility by truck, rail or barge. This facility has large-scale truck and rail loading and unloading capabilities, and a
river barge facility capable of loading barges up to 860,000 gallons.

De-ethanization Complexes

Location

Bluestone Complex

Houston Complex

Majorsville Complex

Mobley Complex

Sherwood Complex

Cadiz Complex(b)

Javelina Complex

Total

Butler County, PA

Washington County, PA

Marshall County, WV

Wetzel County, WV

Doddridge County, WV

Harrison County, OH

Corpus Christi, TX

Design
Throughput
Capacity
(mbpd)

NGL
Throughput
(mbpd)(a)

Utilization
of Design
Capacity(a)

262

158

63%

100%

99%

110%

75%

13%

67%

72%

(a) NGL throughput is a weighted average for days in operation. The utilization of design capacity has been calculated using the weighted

average design throughput capacity.

(b)

The Cadiz Complex is owned by MarkWest Utica EMG, which MPLX accounts for as an equity method investment.

Natural Gas Gathering Systems

Location

Design
Throughput
Capacity
(MMcf/d)

Natural
Gas
Throughput
(MMcf/d)(a)

Utilization
of Design
Capacity(a)

Bluestone System

Houston System

Ohio Gathering System(b)

Jefferson Gas System(c)

East Texas System

Western Oklahoma System

Southeast Oklahoma System

Eagle Ford System

Other Systems(d)

Total

Butler County, PA

Washington County, PA

Harrison, Monroe, Belmont, Guernsey
and Noble Counties, OH

Jefferson County, OH

Harrison and Panola Counties, TX

Wheeler County, TX and Roger Mills,
Ellis, Custer, Beckham and Washita
Counties, OK

Hughes, Pittsburg and Coal Counties,
OK

Dimmit County, TX

Various

227

1,178

1,123

1,250

680

585

755

165

839

766

426

444

404

525

5,903

3,608

73%

74%

70%

47%

65%

69%

70%

67%

15%

66%

(a) Natural gas throughput is a weighted average for days in operation. The utilization of design capacity has been calculated using the

weighted average design throughput capacity.

(b)

(c)

The Ohio Gathering System is owned by Ohio Gathering Company, L.L.C., which MPLX accounts for as an equity method investment.

The Jefferson Gas System is owned by Jefferson Dry Gas, which is a joint venture between MarkWest Liberty Midstream and EMG
MWE Dry Gas Holdings, LLC. MPLX accounts for Jefferson Dry Gas as an equity method investment.

(d)

Excludes lateral pipelines where revenue is not based on throughput.

The following tables set forth certain information relating to our NGL pipelines and crude oil pipeline as of
December 31, 2017.

NGL Pipelines

Sherwood to Mobley propane and heavier liquids

pipeline

Mobley to Majorsville propane and heavier liquids

pipeline

Majorsville to Houston propane and heavier liquids

pipeline

Majorsville to Hopedale propane and heavier liquids

pipeline

Third party processing plant to Bluestone ethane and

heavier liquids pipeline

Bluestone to Mariner West ethane pipeline(a)

Houston to Ohio River ethane pipeline(b)

Majorsville to Houston ethane pipeline(a)

Sherwood to Mobley ethane pipeline

Mobley to Majorsville ethane pipeline

Seneca to Cadiz propane and heavier liquids pipeline(c)

Cadiz to Hopedale propane and heavier liquids

pipeline(c)

Seneca to Cadiz propane/ethane and heavier liquids

pipeline(c)(d)

Cadiz to Atex ethane pipeline(c)

Cadiz to Utopia ethane pipeline(c)

Langley to Siloam propane and heavier liquids

pipeline(e)

East Texas liquids pipeline

Location

Doddridge County, WV
to Wetzel County, WV

Wetzel County, WV to
Marshall County, WV

Marshall County, WV to
Washington County, PA

Marshall County, WV to
Harrison County, OH

Butler County, PA

Butler County, PA to
Beaver County, PA

Washington County, PA
to Beaver County, PA

Marshall County, WV to
Washington County, PA

Doddridge County, WV
to Wetzel County, WV

Wetzel County, WV to
Marshall County, WV

Noble County, OH to
Harrison County, OH

Harrison County, OH

Noble County, OH to
Harrison County, OH

Harrison County, OH

Langley, KY to South
Shore, KY

Panola County, TX

Design
Throughput
Capacity
(mbpd)

NGL
Throughput
(mbpd)

Utilization
of Design
Capacity

105

140

137

69/82

125

80%

81%

71%

49%

25%

43%

16%

36%

64%

72%

21%

34%

71%

56%

(a)

(b)

(c)

(d)

This pipeline is FERC-regulated.

This is the section of the Mariner West pipeline, which is FERC-regulated, leased to and operated by Sunoco Logistics Partners LP.

This pipeline is owned by MarkWest Utica EMG, which MPLX accounts for as an equity method investment.

This is the same pipeline from Seneca to Cadiz and can only be used for either ethane and heavier liquids or propane and heavier liquids
at one time. Both throughput capacities are listed above, respectively, with ethane included in the total.

(e) NGLs transported through the Langley to Ranger and Ranger to Kenova pipelines are combined with NGLs recovered at the Kenova

facility. The design capacity and volume reported for the Langley to Siloam pipeline represent the combined NGL stream.

Crude Oil Pipeline

Michigan crude pipeline

Design
Throughput
Capacity
(mbpd)

NGL
Throughput
(mbpd)

Utilization
of Design
Capacity

17%

Location

Manistee County, MI to
Crawford County, MI

Midstream-MPC-Retained Assets and Investments

The following tables set forth certain information related to our crude and products pipeline systems not owned
by MPLX.

As of December 31, 2017, we owned undivided joint interests in the following common carrier crude oil pipeline
systems.

Pipeline System

Origin

Destination

Diameter
(inches)

Length
(miles)

Ownership
Interest

Operated
by MPL

Capline

Maumee

Total

St. James, LA

Patoka, IL

Lima, OH

Samaria, MI

40”

22”

33%

26%

Yes

644

739

As of December 31, 2017, we had partial ownership interests in the following pipeline companies.

Pipeline Company

Origin

Destination

Diameter
(inches)

Length
(miles)

Ownership
Interest

Operated
by MPL

Crude oil pipeline companies:

LOOP(a)

Products pipeline companies:

Offshore Gulf of
Mexico

Clovelly, LA

48”

10%

Ascension Pipeline Company LLC

Riverside, LA

Garyville, LA

12”

Centennial Pipeline LLC(b)

Beaumont, TX

Bourbon, IL

24”-26”

Muskegon Pipeline LLC

Griffith, IN

Muskegon, MI

10”

Wolverine Pipe Line Company

Chicago, IL

Bay City &
Ferrysburg, MI

6”-18”

Total

50%

60%

Yes

796

170

743

1,741

(a) Represents interest retained by MPC and excludes MPLX’s 41% ownership interest in LOOP. Pipeline mileage is excluded from total as

it is included with MPLX assets.

(b) All system pipeline miles are inactive.

The following table provides information on private crude oil pipelines and private products pipelines that we
own as of December 31, 2017.

Private Pipeline Systems

Crude oil pipeline systems:

Inactive pipelines

Products pipeline systems:

Illinois pipeline systems

Texas pipeline systems

Inactive pipelines

Total

Diameter
(inches)

Length
(miles)

Capacity
(mbpd)

4”-8”

8”

N/A

118

103

228

N/A

The following table sets forth details about the assets held by two ocean vessel joint ventures in which we hold a
50% interest as of December 31, 2017.

Class of Equipment

Jones Act product tankers(a)

750 Series ATB vessels(b)

Number
in Class

Capacity
(thousand barrels)

1,320

990

(a) Represents ownership through our indirect noncontrolling interest in Crowley Ocean Partners.

(b) Represents ownership through our indirect noncontrolling interest in Crowley Blue Water Partners.

Item 3. Legal Proceedings

Litigation

We 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 an adverse 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 our experience as a
defendant in other matters, we believe that these lawsuits and proceedings, individually or in the aggregate, will
not have a material adverse effect on our consolidated results of operations, financial position or cash flows.

MPLX, MarkWest, MarkWest Liberty Midstream, MarkWest Liberty Bluestone, L.L.C., Ohio Fractionation and
MarkWest Utica EMG (collectively, the “MPLX Parties”) are parties to various lawsuits with Bilfinger Westcon,
Inc. (“Westcon”) that were instituted in 2016 and 2017 in the Court of Common Pleas in Butler County,
Pennsylvania, the Circuit Court in Wetzel County, West Virginia, and the Court of Common Pleas in Harrison
County, Ohio. The lawsuits relate to disputes regarding construction work performed by Westcon at the
Bluestone, Mobley and Cadiz processing complexes in Pennsylvania, West Virginia and Ohio, respectively, and
the Hopedale fractionation complex in Ohio. With respect to work performed by Westcon at the Mobley and
Bluestone processing complexes, one or more of the MPLX Parties have asserted breach of contract, fraud, and
with respect to work performed at the Mobley processing complex, MarkWest Liberty Midstream has also
asserted negligent misrepresentation claims against Westcon. Weston has also asserted claims against one or
more of the MPLX Parties regarding these construction projects for breach of contract, unjust enrichment,

promissory estoppel, fraud and constructive fraud, tortious interference with contractual relations, and civil
conspiracy. The MPLX Parties seek in excess of $10 million, plus an unspecified amount of punitive
damages. Westcon seeks in excess of $40 million, plus an unspecified amount of punitive damages. While the
ultimate outcome and impact cannot be predicted with certainty, and management is not able to provide a
reasonable estimate of the potential loss or range of loss, if any, for these claims, we believe the resolution of
these claims will not have a material adverse effect on its consolidated financial position, results of operations, or
cash flows.

In May 2015, the Kentucky attorney general filed a lawsuit against our wholly-owned subsidiary, Marathon
Petroleum Company LP (“MPC LP”), in the United States District Court for the Western District of Kentucky
asserting claims under federal and state antitrust statutes, the Kentucky Consumer Protection Act, and state
common law. The complaint, as amended in July 2015, alleges that MPC LP used deed restrictions, supply
agreements with customers and exchange agreements with competitors to unreasonably restrain trade in areas
within Kentucky and seeks declaratory relief, unspecified damages, civil penalties, restitution and disgorgement
of profits. At this stage, the ultimate outcome of this litigation remains uncertain, and neither the likelihood of an
unfavorable outcome nor the ultimate liability, if any, can be determined, and we are unable to estimate a
reasonably possible loss (or range of loss) for this matter. We intend to vigorously defend ourselves in this
matter.

In May 2007, the Kentucky attorney general filed a lawsuit against us and Marathon Oil in state court in Franklin
County, Kentucky for alleged violations of Kentucky’s emergency pricing and consumer protection laws
following Hurricanes Katrina and Rita in 2005. The lawsuit alleges that we overcharged customers by $89
million during September and October 2005. The complaint seeks disgorgement of these sums, as well as
penalties, under Kentucky’s emergency pricing and consumer protection laws. We are vigorously defending this
litigation. We believe that this is the first lawsuit for damages and injunctive relief under the Kentucky
emergency pricing laws to progress this far and it contains many novel issues. In May 2011, the Kentucky
attorney general amended his complaint
to include a request for immediate injunctive relief as well as
unspecified damages and penalties related to our wholesale gasoline pricing in April and May 2011 under
statewide price controls that were activated by the Kentucky governor on April 26, 2011 and which have since
expired. The court denied the attorney general’s request for immediate injunctive relief, and the remainder of the
2011 claims likely will be resolved along with those dating from 2005. If the lawsuit is resolved unfavorably in
its entirety, it could materially impact our consolidated results of operations, financial position or cash flows.
However, management does not believe the ultimate resolution of this litigation will have a material adverse
effect.

Environmental Proceedings

The Illinois Environmental Protection Agency (“IEPA”) initiated an enforcement action against Marathon Pipe
Line LLC, a wholly-owned subsidiary of MPLX (“MPL”), in connection with an April 17, 2016 pipeline release
to the Wabash River near Crawleyville, Indiana. MPL responded to a Clean Water Act request for information
from the EPA in furtherance of its investigation of possible violations arising from the April 17, 2016 pipeline
release. MPL has entered into joint settlement negotiations with the IEPA and the EPA and reached a settlement
in principle for payment of a total civil penalty of $335,000.

On December 22, 2017, we entered into a settlement with the Ohio Environmental Protection Agency in
connection with alleged violations of the Clean Air Act at our Canton, Ohio refinery. In accordance with the
settlement, we paid a penalty of $250,000.

In July 2015, representatives from the EPA and the United States Department of Justice conducted a search at a
MarkWest Liberty Midstream pipeline launcher/receiver site utilized for pipeline maintenance operations in
Washington County, Pennsylvania pursuant to a search warrant. The criminal investigation ended without any
charges against MarkWest Liberty Midstream. With respect to the civil enforcement allegations associated with

permitting or other related regulatory obligations for its launcher/receiver and compressor station facilities in the
region, MarkWest Liberty Midstream and its affiliates have agreed in principle to pay a cash penalty of
approximately $0.6 million and to undertake certain supplemental environmental projects with an estimated cost
of approximately $2.4 million.

We are involved in a number of other environmental proceedings arising in the ordinary course of business.
While the ultimate outcome and impact on us cannot be predicted with certainty, we believe the resolution of
these environmental proceedings will not have a material adverse effect on our consolidated results of operations,
financial position or cash flows.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities

Our common stock is listed on the NYSE and traded under the symbol “MPC.” As of February 16, 2018, there
were 32,545 registered holders of our common stock.

The following table reflects intraday high and low sales prices of and dividends declared on our common stock
by quarter:

High
Price

2017

Low
Price

Dividends

High
Price

2016

Low
Price

Dividends

54.59

46.88

55.20

56.81

67.07

47.78

49.30

55.25

46.88

0.36

0.40

1.52

52.83

29.24

0.32

43.26

44.56

51.15

52.83

32.02

35.16

40.01

29.24

0.32

0.36

1.36

Dollars per share

Quarter 1

Quarter 2

Quarter 3

Quarter 4

Year

Dividends

Our board of directors intends to declare and pay dividends on our common stock based on our financial
condition and consolidated results of operations. On January 29, 2018, we announced that our board of directors
approved a 46 cent per share dividend, payable March 12, 2018 to shareholders of record at the close of business
on February 21, 2018.

Dividends on our common stock are limited to our legally available funds.

Issuer Purchases of Equity Securities

The following table sets forth a summary of our purchases during the quarter ended December 31, 2017, of
equity securities that are registered by MPC pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended:

Period

10/01/17-10/31/17

11/01/17-11/30/17

12/01/17-12/31/17

Total

Total Number
of Shares
Purchased(a)

Average
Price Paid
per Share(b)

9,750,623

1,784,657

1,429,515

12,964,795

56.43

62.03

62.78

57.90

Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs

Maximum Dollar
Value of Shares that
May Yet Be Purchased
Under the Plans
or Programs(c)

9,746,982

3,391,603,964

1,784,530

1,423,324

12,954,836

3,280,906,366

3,191,552,142

(a)

The amounts in this column include 3,641, 127 and 6,191 shares of our common stock delivered by employees to MPC, upon vesting of
restricted stock, to satisfy tax withholding 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 satisfaction of employee tax withholding obligations upon the vesting of restricted stock granted under our stock
plans. The weighted average price includes commissions paid to brokers on shares purchased under our share repurchase authorizations.

(c) On May 31, 2017, we announced that our board of directors had approved a $3.0 billion share repurchase authorization and extended the
remaining balance under the previous repurchase authorization announced on July 30, 2015, with both such outstanding authorizations
having no expiration date. These authorizations, together with prior authorizations, result in a total of $13.0 billion of share repurchase
authorizations since January 1, 2012.

Item 6. Selected Financial Data

The following table should be read in conjunction with Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations and Item 8. Financial Statements and Supplementary Data.

(In millions, except per share data)

2017(a)

2016

2015(b)

2014(b)

2013(b)

Year Ended December 31,

3,425

2,133

2,112

3.34

3.32

0.77

3,413

1,206

1,515

151

2,793

484

Statements of Income Data

Revenues

Income from operations

Net income

Net income attributable to MPC

Per Share Data(c)

Net income attributable to MPC per share:

Basic

Diluted

Dividends per share

Statements of Cash Flows Data

$ 74,733

63,339

72,051

97,817

100,160

3,969

3,804

3,432

2,378

1,213

1,174

4,692

2,868

2,852

4,051

2,555

2,524

6.76

6.70

1.52

2.22

2.21

1.36

5.29

5.26

1.14

4.42

4.39

0.92

Net cash provided by operating activities

6,609

3,995

4,073

3,121

Additions to property, plant and equipment

2,732

2,892

Acquisitions, net of cash acquired(b)

Investments – acquisitions, loans and contributions

Common stock repurchased

Dividends paid

249

805

2,372

773

288

197

719

1,998

1,218

331

965

613

1,480

2,821

413

2,131

524

(In millions)

Balance Sheets Data

Total assets

Long-term debt, including capitalized leases(d)

Noncontrolling interests

Total equity

December 31,

2017

2016

2015(b)

2014(b)

2013(b)

$ 49,047

44,413

43,115

30,425

28,367

12,946

6,795

20,828

10,572

6,646

20,203

11,925

6,438

19,675

6,602

639

11,390

3,378

412

11,332

(a)

Earnings for 2017 include a tax benefit of approximately $1.5 billion or $2.93 per diluted share as a result of re-measuring certain net
deferred tax liabilities using the lower corporate tax rate enacted in the fourth quarter 2017.

(b) On December 4, 2015, MPLX, our consolidated subsidiary, merged with MarkWest. 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. The financial results
for these operations are included in our consolidated results from the date of acquisition.

(c)

(d)

The number of weighted average shares reflect the impacts of shares of common stock repurchased under our share repurchase plans.

Includes amounts due within one year. During 2017, MPLX issued $2.25 billion aggregate principal amount of senior notes and used the
net proceeds to fund the $1.5 billion cash portion of the consideration paid to MPC for the dropdown of assets on March 1, 2017. During
2015, in connection with the MarkWest Merger, MPLX assumed MarkWest Senior Notes with an aggregate principal amount of
$4.1 billion and used its credit facility to repay $850 million of the $943 million of borrowings under MarkWest’s credit facility. 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 of the Hess’ Retail Operations and Related Assets acquisition.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of

Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in
conjunction with the information included under Item 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 or events potentially affecting our business. You can identify our
forward-looking statements by words such as “anticipate,” “believe,” “could,” “design,” “estimate,” “expect,”
“forecast,” “goal,” “guidance,” “imply,” “intend,” “may,” “objective,” “opportunity,” “outlook,” “plan,”
“position,” “potential,” “predict,” “project,” “prospective,” “pursue,” “seek,” “should,” “strategy,” “target,”
“will,” “would,” or other similar expressions that convey the uncertainty of future events or outcomes. In
accordance with “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, these
statements are accompanied by cautionary language identifying important factors, though not necessarily all such
factors, which could cause future outcomes to differ materially from those set forth in forward-looking
statements.

Corporate Overview

We are an independent petroleum refining and marketing, retail and midstream company. 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.

We currently own and operate six refineries, all located in the United States, with an aggregate crude oil refining
capacity of approximately 1.9 mmbpcd. Our refineries supply refined products to resellers and consumers within
our market areas, including the Midwest, Northeast, East Coast, Southeast and Gulf Coast regions of the
United States. We distribute refined products to our customers through pipeline and marine transportation,
terminals and storage services provided by our Midstream segment. We are one of the largest wholesale suppliers
of gasoline and distillates 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 chain of company-owned and operated retail gasoline and convenience
stores in the United States, with approximately 2,740 convenience stores in 21 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, and is available through approximately 5,600 retail outlets operated by independent
entrepreneurs in 20 states and the District of Columbia.

Through our ownership interests in MPLX, we are one of the largest processors of natural gas in the United
States and the largest processor and fractionator in the Marcellus and Utica shale regions. Our integrated
midstream energy asset network links producers of natural gas and NGLs from some of the largest supply basins
in the United States to domestic and international markets. Our midstream gathering and processing operations
include: natural gas gathering, processing and transportation; and NGL gathering, transportation, fractionation,
storage and marketing. Our assets include approximately 5.9 bcf/d of gathering capacity, 8.0 bcf/d of natural gas
processing capacity and 610 mbpd of fractionation capacity as of December 31, 2017. As of December 31, 2017,
we owned, leased or had ownership interests in approximately 10,800 miles of crude oil and refined product
pipelines to deliver crude oil to our refineries and other locations and refined products to wholesale and retail
market areas. We distribute our refined products through one of the largest terminal operations in the United
States and one of the largest private domestic fleets of inland petroleum product barges.

Midstream segment. Previously, they were reported as part of our Refining & Marketing segment. Comparable
prior period information has been recast to reflect our revised presentation. The results for the pipeline and
storage assets were recast effective January 1, 2015 and the results for the terminal assets were recast effective
April 1, 2016. Prior to these dates, these assets were not considered businesses for accounting purposes and,
therefore, there are no financial results from which to recast segment results.

• Refining & Marketing – refines crude oil and other feedstocks at our six 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 pipeline and marine transportation,
terminals and storage services provided by our Midstream segment. We sell refined products to
wholesale marketing customers domestically and internationally, buyers on the spot market, our
Speedway business segment and 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.

Strategic Actions to Enhance Shareholder Value

On January 3, 2017, we announced plans to significantly accelerate the dropdown of assets with an estimated
$1.4 billion of MLP-eligible annual EBITDA to MPLX and to exchange our economic interests in the general
partner of MPLX, including IDRs, for newly issued MPLX common units. In 2017, in connection with these
plans, we contributed assets to MPLX with projected annual EBITDA of approximately $400 million for
$1.93 billion of cash and approximately 31 million MPLX common units and general partner units. See
“MPLX LP –MPLX Highlights” for information on these dropdowns. On February 1, 2018, we completed the
dropdown of the remaining identified assets, which included our refining logistics assets and fuels distribution
services with projected annual EBITDA of approximately $1 billion, in exchange for $4.1 billion of cash and
114 million MPLX common units and general partner units.

The cash consideration for these dropdowns in 2017 and 2018 was financed by MPLX with $6.0 billion of debt.
See “MPLX Highlights” section for additional information on MPLX debt financing in 2017 and 2018. The
equity financing was funded through new MPLX common units and general partner units issued to us.
Immediately following the closing of the February 1, 2018 dropdown, our IDRs were cancelled and our
economic general partner interest was converted into a non-economic general partner interest, all in exchange for
275 million newly issued MPLX common units, which resulted in us owning approximately 64 percent of the
issued and outstanding MPLX common units as of February 1, 2018. These actions were designed to provide a
clear valuation of our midstream platform and to provide an ongoing return of capital to our shareholders in a
manner consistent with maintaining an investment-grade credit profile.

Our January 3, 2017 announcement included conducting a full and thorough review of Speedway to ensure
optimum value is being delivered to shareholders over the long term. On September 5, 2017, we announced that
our board of directors, based on a recommendation from its independent special committee, determined that
maintaining Speedway as a fully integrated business with MPC provides the best opportunity for enhancing long-
term shareholder value. Key factors in the board of directors’ decision to maintain Speedway as an integrated
business within MPC included substantial integration synergies, support of MPC’s investment-grade credit
profile and ability to return capital to shareholders and the strong value of cash flow diversification.

Executive Summary

Results

Select results for 2017 and 2016 are reflected in the following table.

(In millions, except per share data)

Income from Operations by segment

Refining & Marketing

Speedway

Midstream

Items not allocated to segments

Total

(Benefit) provision for income taxes

Noncontrolling interests

Net income attributable to MPC

Net income attributable to MPC per diluted share

2017

2016

2,321

1,357

732

1,339

(423)

734

1,048

(761)

3,969

2,378

(460) $

307

3,432

6.70

609

(2)

1,174

2.21

Net income attributable to MPC increased $2.26 billion, or $4.49 per diluted share, in 2017 compared to 2016,
primarily due to an income tax benefit of approximately $1.5 billion resulting from the TCJA and improved
results from our Refining & Marketing segment.

Refining & Marketing segment income from operations increased in 2017 compared to 2016. Excluding the
$345 million LCM inventory benefit recognized in 2016, the increase in segment results for 2017 primarily
resulted from higher LLS crack spreads in both the U.S. Gulf Coast and Chicago markets. The LLS blended
crack spread for 2017 increased to $9.84 per barrel from $6.96 per barrel in 2016. These favorable effects were
partially offset by less favorable product price realizations as compared to the spot market prices used in the LLS
blended crack spread.

Excluding the $25 million LCM inventory benefit recognized in 2016, the increase in Speedway segment results for
2017 was primarily due to contributions from its travel center joint venture formed in the fourth quarter of 2016 and
lower operating expense, partially offset by lower merchandise margin and lower gains from asset sales.

Midstream segment income from operations increased in 2017 compared to 2016, primarily due to higher natural
gas and NGL gathering, processing and fractionating volumes and changes in natural gas and NGL prices.
Segment results also benefited from the first quarter 2017 acquisitions of the Ozark pipeline and our ownership
interest in the Bakken Pipeline system.

Items not allocated in 2017 includes an $86 million litigation charge, a litigation benefit of $57 million,
$52 million of pension settlement expenses and a benefit of $23 million related to MPC’s share of gains from the
sale of assets remaining from the canceled Sandpiper pipeline project. Items not allocated to segments in 2016
includes non-cash impairment charges totaling $486 million, which included $267 million related to our equity
method investment in the Sandpiper pipeline project resulting from the indefinite deferral of this project,
$130 million related to the goodwill recognized in connection with the MarkWest Merger and $89 million related
to an MPLX equity method investment.

During the fourth quarter of 2017, the TCJA significantly revised U.S. corporate income tax law by, among other
things, reducing the corporate income tax rate to 21 percent. Earnings for 2017 includes a tax benefit of
approximately $1.5 billion as a result of remeasuring certain net deferred tax liabilities using the lower corporate
tax rate.

Noncontrolling interests increased in 2017 compared to 2016, primarily due to increased MPLX net income.

MPLX LP

MPLX is a diversified, growth-oriented publicly traded master limited partnership originally formed by us to
own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering,
processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of
NGLs; and the gathering, transportation and storage of crude oil and refined petroleum products. On December 4,
2015, we completed the MarkWest Merger, whereby MarkWest became a wholly-owned subsidiary of MPLX.

As of December 31, 2017, we owned a 30.4 percent interest in MPLX, including a two percent general partner
interest. MPLX is a VIE because the limited partners of MPLX do not have substantive kick-out or substantive
participating rights over the general partner. We are the primary beneficiary of MPLX because in addition to
significant economic interest, we also have the power, through our 100 percent ownership of the general partner,
to control the decisions that most significantly impact MPLX. We therefore consolidate MPLX and record a
noncontrolling interest for the 69.6 percent interest owned by the public. The creditors of MPLX do not have
recourse to MPC’s general credit through guarantees or other financial arrangements. The assets of MPLX are
the property of MPLX and cannot be used to satisfy the obligations of MPC. MPC has effectively guaranteed
certain indebtedness of LOOP and LOCAP, in which MPLX holds an interest. See Item 8. Financial Statements
and Supplementary Data – Note 25 for more information.

See the “Strategic Actions to Enhance Shareholder Value” section for information on our ownership of MPLX
after the dropdown of certain assets and IDR exchange on February 1, 2018.

MPLX Highlights

• On September 1, 2017, we contributed our joint-interest ownership in certain pipelines and storage

facilities to MPLX in exchange for total consideration of $1.05 billion.

• On March 1, 2017, we contributed certain terminal, pipeline and storage assets to MPLX in exchange

for total consideration of $2.0 billion.

• On March 31, 2016, we contributed our inland marine business to MPLX in exchange for 23 million

common units and 460 thousand general partner units.

• On August 4, 2016, MPLX entered into a Second Amended and Restated Distribution Agreement (the
“Distribution Agreement”) providing for at-the-market issuance of common units, in amounts, at prices
and on terms determined by market conditions and other factors at the time of the offerings (such at-
the-market program, referred to as the “ATM Program”). During 2017, MPLX issued an aggregate of

14 million common units under the ATM Program, generating net proceeds of approximately
$473 million. MPLX used the net proceeds from sales under the ATM Program for general partnership
purposes including repayment of debt and funding for acquisitions, working capital requirements and
capital expenditures.

• On September 1, 2016, MPC, MPLX and various affiliates initiated a series of reorganization
transactions in order to simplify MPLX’s ownership structure and its financial and tax reporting. In
connection with these transactions, MPC contributed $225 million to MPLX, and all of the issued and
outstanding MPLX Class A Units, all of which were held by MarkWest Hydrocarbon, a wholly-owned
subsidiary of MPLX, were exchanged for newly issued MPLX common units.

• On May 13, 2016, MPLX completed the private placement of approximately 30.8 million 6.5 percent
Series A Convertible Preferred Units (the “MPLX Preferred Units”) at a cash price of $32.50 per unit.
The aggregate net proceeds of approximately $984 million from the sale of the MPLX Preferred Units
was used for capital expenditures, repayment of debt and general partnership purposes.

Distributions from MPLX

The following table summarizes the cash distributions we received from MPLX during 2017 and 2016.

(In millions)

Cash distributions received from MPLX:

General partner distributions, including IDRs

Limited partner distributions

Total

2017

2016

301

197

498

190

142

332

As discussed in the “Strategic Actions to Enhance Shareholder Value” section above, we believe there is
substantial value in our economic interests in the general partner of MPLX and exchanged these economic
interests for 275 million newly issued MPLX common units in conjunction with the completion of our
dropdowns to highlight that value. After giving effect to the dropdown of certain assets and IDR exchange on
February 1, 2018, we owned approximately 505 million MPLX common units valued at $19.15 billion based on
the February 1, 2018 closing unit price of $37.95.

On January 26, 2018, MPLX declared a quarterly cash distribution of $0.6075 per common unit, which was
payable February 14, 2018. As a result, MPLX made distributions totaling $346 million to its limited and general
partners. MPC’s portion of this distribution was approximately $170 million.

See Item 8. Financial Statements and Supplementary Data – Note 4 for additional information on MPLX.

Acquisitions and Investments

• On March 1, 2017, MPLX acquired the Ozark pipeline from Enbridge Pipelines (Ozark) LLC for

approximately $219 million.

• Effective January 1, 2017, MPLX and Antero Midstream formed a joint venture, Sherwood Midstream
the development of Antero Resources Corporation’s

LLC (“Sherwood Midstream”),

to support

Marcellus Shale acreage in West Virginia. MarkWest has a 50 percent ownership interest in Sherwood
Midstream. In connection with this transaction, MarkWest contributed certain gas processing plants
currently under construction at the Sherwood Complex with a fair value of approximately $134 million,
cash of approximately $20 million and sold Class A Interests in MarkWest Ohio Fractionation to
Sherwood Midstream for $126 million in cash. Sherwood Midstream Holdings LLC (“Sherwood
Midstream Holdings”), a joint venture with MarkWest and Sherwood Midstream, was also formed to
own, operate and maintain certain assets owned by Sherwood Midstream and MarkWest. MarkWest
contributed certain real property, equipment and facilities with a fair value of approximately
$209 million to Sherwood Midstream Holdings in exchange for a 79 percent initial ownership interest.

•

In the fourth quarter of 2016, Speedway and Pilot Flying J finalized the formation of a joint venture
consisting of 123 travel plazas, primarily in the Southeast United States. The new entity, PFJ Southeast,
consisted of 41 existing locations contributed by Speedway and 82 locations contributed by Pilot Flying J,
all of which carry either the Pilot or Flying J brand and are operated by Pilot Flying J. Our non-cash
contribution was $273 million based on the book value of the assets we contributed to the joint venture.

• On September 1, 2016, Enbridge Energy Partners announced that its affiliate, North Dakota Pipeline,
would withdraw certain pending regulatory applications for the Sandpiper pipeline project and that the
project would be deferred indefinitely. These decisions were considered to indicate an impairment of the
costs capitalized to date on the project. We made contributions of $14 million to North Dakota Pipeline
during the year ended December 31, 2016 and contributed $301 million since project inception to fund
our share of the construction costs for the project. As the operator of North Dakota Pipeline, which owns
the investments made to date in the Sandpiper pipeline project, and the entity responsible for maintaining
its financial records, Enbridge Energy Partners completed a fixed asset impairment analysis as of
August 31, 2016, in accordance with ASC Topic 360, to determine the fixed asset impairment charge.
Based on the estimated liquidation value of the fixed assets, an impairment charge was recorded by North
Dakota Pipeline. Based on our 37.5 percent ownership of North Dakota Pipeline, we recognized
approximately $267 million of this charge in the third quarter of 2016 through “Income (loss) from equity
method investments” on the accompanying consolidated statements of income. See Item 8. Financial
Statements and Supplementary Data – Note 17 to the for information regarding the charge.

•

In September 2015, we acquired a 50 percent ownership interest in a joint venture, Crowley Ocean
Partners, with Crowley. The joint venture owns and operates four new Jones Act product tankers, three
of which are leased to MPC. We contributed a total of $141 million for the four vessels.

In May 2016, MPC and Crowley formed a new ocean vessel joint venture, Crowley Coastal Partners, in
which MPC has a 50 percent ownership interest. MPC and Crowley each contributed their 50 percent
ownership in Crowley Ocean Partners, discussed above, into Crowley Coastal Partners. In addition, we
contributed $48 million in cash and Crowley contributed its 100 percent ownership interest in Crowley
Blue Water Partners to Crowley Coastal Partners. Crowley Blue Water Partners is an entity that owns
and operates three 750 Series ATB vessels that are leased to MPC.

• On December 4, 2015, MPLX completed the MarkWest Merger. Each common unit of MarkWest
issued and outstanding immediately prior to the effective time of the MarkWest Merger was converted
into a right to receive 1.09 common units of MPLX representing limited partner interests in MPLX,
plus a one-time cash payment of $6.20 per unit. We contributed approximately $1.28 billion of cash to
MPLX to pay the aggregate cash consideration to MarkWest unitholders, without receiving any new
equity from MPLX in exchange. At closing, we made a payment of $1.23 billion to MarkWest
common unitholders and the remaining $50 million was paid in equal amounts, the first $25 million
was paid in July 2016 and the second $25 million was paid in July 2017, in connection with the
conversion of the MPLX Class B Units to MPLX common units. MPLX recorded impairment charges
of approximately $130 million in 2016 to impair a portion of the $2.21 billion of goodwill, as adjusted,
recorded in connection with the MarkWest Merger. Our financial results and operating statistics reflect
the results of MarkWest from the date of the MarkWest Merger.

See Item 8. Financial Statements and Supplementary Data – Note 5 for additional information on these
acquisitions and investments, Note 6 for additional information on Crowley Coastal Partners as a VIE and
Note 25 for information regarding our conditional guarantee of the indebtedness of Crowley Ocean Partners and
Crowley Blue Water Partners.

Share Repurchases

As part of our strategic actions to enhance shareholder value, we repurchased $2.37 billion of our common stock
at an average cost per share of $53.85 during 2017. Since January 1, 2012, our board of directors has approved
$13.0 billion in total share repurchase authorizations and we have repurchased a total of $9.81 billion of our
common stock,
leaving $3.19 billion available for repurchases as of December 31, 2017. Under these
authorizations, we have acquired 246 million shares at an average cost per share of $39.82.

Liquidity

As of December 31, 2017, we had cash and cash equivalents of $3.01 billion, excluding MPLX’s cash and cash
equivalents of $5 million, and no borrowings or letters of credit outstanding under our $3.5 billion bank
revolving credit facilities or under our $750 million trade receivables securitization facility (“trade receivables
facility”). As of December 31, 2017, eligible trade receivables supported borrowings of $750 million under the
trade receivable facility. As of December 31, 2017, we do not have any commercial paper borrowings
outstanding. We do not intend to have outstanding commercial paper borrowings in excess of available capacity
under our bank revolving credit facilities. As of December 31, 2017, MPLX had $505 million borrowings
outstanding under its $2.25 billion revolving credit agreement and $114 million available through its
$500 million intercompany loan agreement with MPC.

See Item 8. Financial Statements and Supplementary Data – Note 19 for information on our new bank revolving
credit facilities.

Overview of Segments

Refining & Marketing

Refining & Marketing segment income from operations depends largely on our Refining & Marketing margin
and refinery throughputs. Our total refining capacity was 1,881 mbpcd, 1,817 mbpcd and 1,794 mbpcd as of
December 31, 2017, 2016 and 2015, respectively.

Our Refining & Marketing margin is the difference between the prices of refined products sold and the costs of
crude oil and other charge and blendstocks refined, including the costs to transport these inputs to our refineries
and the costs of products purchased for resale. The crack spread is a measure of the difference between market
prices for refined products and crude oil, commonly used by the industry as a proxy for the refining margin.
Crack spreads can fluctuate significantly, particularly when prices of refined products do not move in the same
relationship as the cost of crude oil. As a performance benchmark and a comparison with other industry
participants, we calculate Midwest (Chicago) and USGC crack spreads that we believe most closely track our
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, 2 barrels of ultra-low sulfur diesel and 1 barrel of three percent residual
fuel oil) are used for these crack-spread calculations.

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 this discount, the sweet/sour differential, can vary significantly, causing our
Refining & Marketing margin to differ from crack spreads based on sweet crude oil. In general, a larger sweet/
sour differential will enhance our Refining & Marketing 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(a))

LLS 6-3-2-1 crack spread sensitivity(b) (per $1.00/barrel change)

Sweet/sour differential sensitivity(c) (per $1.00/barrel change)

LLS-WTI differential sensitivity(d) (per $1.00/barrel change)

Natural gas price sensitivity(e) (per $1.00/million British thermal unit change)

$ 590

300

200

(a)

The tax rate reflects the lower corporate tax rate under the TCJA.

(b) Weighted 40 percent Chicago and 60 percent USGC LLS 6-3-2-1 crack spreads and assumes all other differentials and pricing

relationships remain unchanged.

(c)

LLS (prompt) – [delivered cost of sour crude oil: Arab Light, Kuwait, Maya, Western Canadian Select and Mars] and assumes
approximately 58 percent of crude throughput are sour-based crudes.

(d) Assumes approximately 17 percent of crude oil throughput volumes are WTI-based domestic crude oil.

(e)

This is consumption based exposure for our Refining & Marketing segment and does not include the sales exposure for our Midstream
segment.

In addition to the market changes indicated by the crack spreads, the sweet/sour differential and the LLS to WTI
differential, our Refining & Marketing margin is impacted by factors such as:

•

the selling prices realized for refined products;

the types of crude oil and other charge and blendstocks processed;

our refinery yields;

the cost of products purchased for resale;

the impact of commodity derivative instruments used to hedge price risk; and

the potential impact of LCM adjustments to inventories in periods of declining prices.

Inventories are stated at the lower of cost or market. Costs of crude oil, refinery feedstocks and refined products
are stated under the LIFO inventory costing method and aggregated on a consolidated basis for purposes of
assessing if the cost basis of these inventories may have to be written down to market values. At December 31,
2017, market values for refined products exceed their cost basis and, therefore, there is no LCM inventory market
valuation reserve at the end of the year. Based on movements of refined product prices, future inventory
valuation adjustments could have a negative effect to earnings. Such losses are subject to reversal in subsequent
periods if prices recover.

Refining & Marketing segment income from operations is also affected by changes in refinery direct operating
costs, which include turnaround and major maintenance, depreciation and amortization and other manufacturing
expenses. Changes in manufacturing costs are primarily driven by the cost of energy used by our refineries,
including purchased natural gas, and the level of maintenance costs. Planned major maintenance activities, or
turnarounds, requiring temporary shutdown of certain refinery operating units, are periodically performed at each
refinery. The following table lists the refineries that had significant planned turnaround and major maintenance
activities for each of the last three years.

Year Refinery

2017 Catlettsburg, Galveston Bay and Garyville

2016 Galveston Bay, Garyville and Robinson

2015 Catlettsburg, Galveston Bay, Garyville and Robinson

Speedway

Our retail marketing 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. Gasoline and distillate prices are volatile and are impacted by changes in supply
and demand in PADD 1 and PADD 2 where we operate. Numerous factors impact gasoline and distillate demand
throughout the year, including local competition, seasonal demand fluctuations, the available wholesale supply,
the level of economic activity in our marketing areas and weather conditions. The following PADD 1 and PADD
2 market demands for 2017 are based on current estimates. PADD 2 2017 gasoline demand grew for the fifth
consecutive year, up 0.5 percent from last year’s record level. PADD 1 gasoline demand posted an annual gain in
2017 for the fourth consecutive year, up 0.9 percent year over year. Continuing economic growth and slowing
fleet fuel efficiency gains supported gasoline demand in most of the U.S. Distillate demand in 2017 posted its
first year-over-year increase in three years, up 1.9 percent from 2016. Increases in truck tonnage, which grew by
3.8 percent, the largest annual increase since 2013, and rail traffic (total carloads and intermodal) supported a
3.4 percent increase in 2017 distillate demand over 2016’s six year low. PADD 1 2017 distillate demand was up
0.8 percent from its four year low in 2016. PADD 2 2017 distillate demand is up 2.8 percent year over year. The
margin on merchandise sold at our convenience stores historically has been less volatile and has contributed
substantially to Speedway’s margin. More than half of Speedway’s margin was derived from merchandise sales
in 2017. Speedway’s convenience stores offer a wide variety of merchandise,
including prepared foods,
beverages and non-food items.

Inventories are carried at the lower of cost or market value. Costs of refined products and merchandise are stated
under the LIFO inventory costing method and aggregated on a consolidated basis for purposes of assessing if the
cost basis of these inventories may have to be written down to market values. As of December 31, 2017, market
values for refined products exceed their cost basis and, therefore, there is no LCM inventory market valuation
reserve at the end of the year. Based on movements of refined product prices, future inventory valuation
adjustments could have a negative effect to earnings. Such losses are subject to reversal in subsequent periods if
prices recover.

Midstream

NGL and natural gas prices are volatile and are impacted by changes in fundamental supply and demand, as well
as market uncertainty, availability of NGL transportation and fractionation capacity and a variety of additional
factors. Our Midstream segment profitability is affected by prevailing commodity prices primarily as a result of
processing or conditioning at our own or third-party processing plants, purchasing and selling or gathering and
transporting volumes of natural gas at index-related prices and the cost of third-party transportation and
fractionation services. To the extent that commodity prices influence the level of natural gas drilling volumes by
our producer customers, such prices also affect Midstream segment profitability.

The profitability of our pipeline transportation operations included in our Midstream segment, primarily depends
on tariff rates and the volumes shipped through the pipelines. A majority of the crude oil and refined product
shipments on our common carrier pipelines serve our Refining & Marketing segment. The volume of crude oil
that we transport is directly affected by the 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 are the production levels of
crude oil by producers in various regions or fields,
the availability and cost of alternative modes of
transportation,
the volumes of crude oil processed at refineries and refinery and transportation system
maintenance levels. The volume of refined products that we transport is directly affected 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 during the fall and winter months. As with crude oil, other
transportation alternatives and system maintenance levels influence refined product movements.

Results of Operations

The following discussion includes comments and analysis relating to our results of operations for the years ended
December 31, 2017, 2016 and 2015. This discussion should be read in conjunction with Item 8. Financial
Statements and Supplementary Data and is intended to provide investors with a reasonable basis for assessing our
historical operations, but should not serve as the only criteria for predicting our future performance.

Consolidated Results of Operations

(In millions)

2017

2016

2017 vs.
2016
Variance

2016 vs.
2015
Variance

2015

Revenues and other income:

Sales and other operating revenues (including

consumer excise taxes)

Sales to related parties

Income (loss) from equity method investments

Net gain on disposal of assets

Other income

74,104

63,277

10,827

72,045

(8,768)

629

306

320

(185)

178

567

491

(22)

142

112

(273)

Total revenues and other income

75,369

63,364

12,005

72,258

(8,894)

Costs and expenses:

Cost of revenues (excludes items below)

58,760

49,170

9,590

55,583

(6,413)

Purchases from related parties

Inventory market valuation adjustment

Consumer excise taxes

Impairment expense

Depreciation and amortization

Selling, general and administrative expenses

Other taxes

Total costs and expenses

Income from operations

Net interest and other financial income (costs)

Income before income taxes

(Benefit) provision for income taxes

Net income

Less net income (loss) attributable to:

Redeemable noncontrolling interest

Noncontrolling interests

570

7,759

2,114

1,743

454

71,400

3,969

(625)

3,344

(460)

3,804

307

509

(370)

7,506

130

2,001

1,605

435

60,986

2,378

(556)

1,822

609

1,213

(2)

370

253

(130)

113

138

10,414

1,591

(69)

1,522

(1,069)

2,591

309

308

370

7,692

144

1,502

1,576

391

67,566

4,692

(318)

4,374

1,506

2,868

201

(740)

(186)

(14)

499

(6,580)

(2,314)

(238)

(2,552)

(897)

(1,655)

(18)

Net income attributable to MPC

3,432

1,174

2,258

2,852

(1,678)

Net income attributable to MPC increased $2.26 billion in 2017 compared to 2016 and decreased $1.68 billion in
2016 compared to 2015. The increase in 2017 was primarily due to a tax benefit of $1.5 billion resulting from the
TCJA enacted in the fourth quarter of 2017 and an increase in our Refining & Marketing segment income from
operations of $964 million in 2017 compared to 2016. The decrease in 2016 was primarily due to a decrease in
our Refining & Marketing segment income from operations of $2.64 billion in 2016 compared to 2015, partially
offset by increases in our Midstream and Speedway segment results. Income from operations for 2016 includes a

non-cash benefit of $370 million related to the reversal of the Company’s LCM inventory valuation reserve and
impairment charges of $356 million related to equity method investments and $130 million related to goodwill.
See Segment Results for additional information.

Sales and other operating revenues (including consumer excise taxes) increased $10.83 billion in 2017 compared
to 2016 and decreased $8.77 billion in 2016 compared to 2015. The increase in 2017 was primarily due to higher
averaged refined product sales prices, which increased $0.25 per gallon, and an increase in refined product sales
volumes, which increased 42 mbpd. The decrease in 2016 was primarily due to lower refined product sales
prices, which decreased $0.27 per gallon, and lower sales volumes, which decreased 32 mbpd.

Sales to related parties increased $567 million in 2017 compared to 2016 mainly due to sales from our
Refining & Marketing segment to PFJ Southeast, a joint venture with Pilot Flying J, which commenced in the
fourth quarter of 2016.

Income (loss) from equity method investments increased $491 million in 2017 compared to 2016 and decreased
$273 million in 2016 compared to 2015. The increase in 2017 was primarily due to the absence of impairment
charges related to equity method investments of $356 million recorded in 2016 along with increases in income
from new and existing pipeline, natural gas, retail and marine affiliates. The decrease in 2016 was primarily due
to the $356 million of impairment charges, partially offset by increases in income from new and existing pipeline
and marine equity investments.

Net gain on disposal of assets decreased $22 million in 2017 compared to 2016 and increased $25 million in
2016 compared to 2015 primarily due to gains on the sale of certain Speedway locations in 2016.

Other income increased $142 million in 2017 compared to 2016 and increased $66 million in 2016 compared to
2015. The increase in 2017 was primarily due to increased RIN sales. The increase in 2016 was primarily due to
the inclusion of a full year of MarkWest other income and increased RIN sales.

Cost of revenues increased $9.59 billion in 2017 compared to 2016 and decreased $6.41 billion in 2016
compared to 2015. The increase in 2017 was primarily due to an increase in refined product cost of sales of
$9.18 billion, primarily attributable to an increase in our average crude oil costs of $9.50 per barrel. The decrease
in 2016 was primarily due to a decrease in refined product cost of sales of $6.52 billion, primarily attributable to
a decrease in our average crude oil costs of $7.26 per barrel, partially offset by an increase in refinery direct
operating costs of $407 million, or $0.72 per barrel of total refinery throughput, which reflects significantly
higher turnaround activity in 2016 as compared to a lower than normal level of turnaround costs in 2015.

Purchases from related parties increased $61 million in 2017 compared to 2016 and increased $201 million in
2016 compared to 2015. The increase in 2017 was primarily due to:

•

an increase in transportation services provided by Crowley Ocean Partners of $27 million;

an increase in transportation services provided by Crowley Blue Water Partners of $23 million; and

an increase in volumes purchased from LOOP of $12 million.

The increase in purchases from related parties in 2016 was primarily due to:

•

an increase in volumes transported by Illinois Extension Pipeline, which is a pipeline affiliate that
became operational in December 2015, of $106 million;

an increase in transportation services provided by Crowley Ocean Partners, which was a new marine
joint venture established in September 2015, of $46 million; and

an increase in transportation services provided by Crowley Blue Water Partners, which was a new
marine joint venture established in May 2016, of $37 million.

Inventory market valuation adjustment decreased costs and expenses by $740 million in 2016 compared to 2015.
The LCM inventory reserve recorded in 2015 of $370 million was reversed in 2016 due to increases in refined
product prices during the second quarter of 2016 resulting in reductions to cost of revenues of $370 million in
2016.

Impairment expense decreased $130 million in 2017 compared to 2016 and decreased $14 million in 2016
compared to 2015. Impairment expense in 2016 reflects a $130 million charge recorded by MPLX to impair a
portion of the $2.21 billion of goodwill recorded in connection with the MarkWest Merger. In 2015, an
impairment charge of $144 million was recorded related to the cancellation of the ROUX project at our Garyville
refinery. Impairments related to equity method investments were recorded to Income (loss) from equity method
investments and discussed above.

Depreciation and amortization increased $499 million in 2016 compared to 2015, primarily due to the
depreciation of the fair value of the assets acquired in connection with the MarkWest Merger in December 2015.

Selling, general and administrative expenses increased $138 million in 2017 compared to 2016 and increased
$29 million in 2016 compared to 2015. The increase in 2017 was primarily due a $45 million increase in pension
settlement expenses, increases in employee-related compensation and benefit expenses, higher corporate costs
and net litigation settlement expenses of $29 million. The increase in 2016 was primarily attributable to the
inclusion of MarkWest expenses, largely offset by decreases in contract services and other corporate costs.

Other taxes increased $44 million in 2016 compared to 2015, primarily due to the inclusion of MarkWest’s taxes.

Net interest and other financial costs increased $69 million in 2017 compared to 2016 and increased $238 million
in 2016 compared to 2015. The increase in 2017 reflects the MPLX senior notes issued in February 2017,
partially offset by decreased borrowings on the MPC term loan agreement. The increase in 2016 was primarily
due to interest on the debt assumed in the MarkWest Merger. We capitalized interest of $55 million in 2017,
$63 million in 2016 and $37 million in 2015. See Item 8. Financial Statements and Supplementary Data – Note
19 for further details.

Provision for income taxes decreased $1.07 billion in 2017 compared to 2016 and decreased $897 million in
2016 compared to 2015. The TCJA was signed into law on December 22, 2017 and provided several key changes
to U.S. tax law, including a federal corporate tax rate of 21 percent replacing the current rate applicable to MPC
of 35 percent. MPC was required to calculate the effect of the TCJA on its deferred tax balances as of the
enactment date. The effect of the federal corporate income tax rate change reduced net deferred tax liabilities by
$1.5 billion in 2017. This benefit was partially offset by an increase in our income before income taxes, which
increased $1.52 billion in 2017 compared to 2016. The decrease in 2016 was primarily due to a decrease in our
income before income taxes of $2.55 billion compared to 2015. The TCJA impacted our effective tax rate by
45 percentage points in 2017, decreasing our effective tax rate from 31 percent to (14) percent. The effective tax
rate, excluding the TCJA, of 31 percent in 2017 and the effective tax rates of 33 percent and 34 percent in 2016
and 2015, respectively, are slightly less than the U.S. statutory rate of 35 percent primarily due to certain
permanent benefit differences, including the domestic manufacturing deduction, partially offset by state and local
tax expense. See Item 8. Financial Statements and Supplementary Data – Note 12 for further details.

Segment Results

Non-GAAP Financial Measures

Management uses certain financial measures to evaluate our operating performance that are calculated and
presented on the basis of methodologies other than in accordance with GAAP (“non-GAAP”). We believe these
non-GAAP financial measures are useful to investors and analysts to assess our ongoing financial performance
because, when reconciled to its most comparable GAAP financial measure, they provide improved comparability
between periods through the exclusion of certain items that we believe are not indicative of our core operating
performance and that may obscure our underlying business results and trends. These measures should not be
considered a substitute for, or superior to, measures of financial performance prepared in accordance with
GAAP, and our calculations thereof may not be comparable to similarly titled measures reported by other
companies. The non-GAAP financial measures we use are as follows:

Refining & Marketing Margin

Refining margin is defined as sales revenue less the cost of refinery inputs and purchased products and excludes
the LCM inventory market adjustment.

Speedway Gasoline and Distillate Margin

Speedway gasoline and distillate margin is defined as the price paid by consumers less the cost of refined
products, including transportation, consumer excise taxes and bankcard processing fees and excluding any LCM
inventory market adjustment.

Speedway Merchandise Margin

Speedway merchandise margin is defined as the price paid by consumers less the cost of merchandise.

See the reconciliations of these non-GAAP measures in the following segment discussions.

Refining & Marketing

Key Financial and Operating Data

2017

2016

2015

Refining & Marketing revenues (in millions)

Refining & Marketing intersegment sales to Speedway (in millions)

Refining & Marketing intersegment fees paid to Midstream (in millions)

Refining & Marketing income from operations (in millions)(a)

Consumer excise taxes included in both revenues and costs (in millions)

Refined product sales volumes (thousands of barrels per day)(b)

Refined product intersegment sales volumes to Speedway (millions of gallons)

Refined product sales destined for export (thousands of barrels per day)

Average refined product sales prices (dollars per gallon)

Average refined product intersegment sales prices to Speedway (dollars per gallon)

Refinery throughputs (thousands of barrels per day):

Crude oil refined

Other charge and blendstocks

Total

Sour crude oil throughput percent

WTI-priced crude oil throughput percent

Refining & Marketing margin (dollars per barrel)(c)

Refinery direct operating costs (dollars per barrel):(d)

Planned turnaround and major maintenance

Depreciation and amortization

Other manufacturing(e)

Total

64,691

11,309

1,443

2,321

7,759

2,301

5,611

297

1.72

2.01

1,765

179

1,944

12.60

1.72

1.43

4.07

53,817

10,589

1,262

1,357

7,506

2,259

5,957

296

1.47

1.77

1,699

151

1,850

11.16

1.83

1.47

4.09

7.22

7.39

64,198

12,024

930

3,997

7,692

2,289

5,873

319

1.74

2.04

1,711

177

1,888

15.16

1.13

1.39

4.15

6.67

(a) We revised our operating segment presentation in the first quarter of 2017 in connection with the contribution of certain terminal,
pipeline and storage assets to MPLX. The operating results for these assets, which were previously included in the Refining & Marketing
segment, are now included in the Midstream segment. Comparable prior period information has been recast to reflect our revised
presentation. The results for the pipeline and storage assets were recast effective January 1, 2015, and the results for the terminal assets
were recast effective April 1, 2016. Prior to these dates these assets were not considered businesses and therefore there are no financial
results from which to recast segment results.

(b)

(c)

(d)

(e)

Includes intersegment sales and sales destined for export.

Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs. Excludes the LCM inventory
valuation adjustments.

Per barrel of total refinery throughputs.

Includes utilities, labor, routine maintenance and other operating costs.

Reconciliation of Refining & Marketing margin to
Refining & Marketing income from operations (in millions)

Refining & Marketing income from operations

Plus (Less):

Refinery direct operating costs(a)

Refinery depreciation and amortization

Other:

Operating expenses(a)(b)

Segment (income) expense, net(a)

Depreciation and amortization

Inventory market valuation adjustment

Refining & Marketing margin(c)

2017

2016

2015

2,321

1,357

3,997

4,113

1,013

1,924

(499)

4,007

994

1,835

(360)

(345)

3,640

955

1,742

(325)

345

8,941

7,557

10,451

(a)

(b)

Excludes depreciation and amortization.

Includes fees paid to MPLX for various midstream services, which includes marine and pipeline transportation and terminal and storage
services, but excludes costs related to delivery of crude and feedstocks to our refineries.

(c)

Sales revenue less cost of refinery inputs and purchased products, excluding any LCM inventory market adjustment.

The following table presents certain benchmark prices in our marketing areas and market indicators that we
believe are helpful in understanding the results of our Refining & Marketing segment’s business.

Benchmark prices (dollars per gallon)

Chicago spot unleaded regular gasoline

Chicago spot ultra-low sulfur diesel

USGC spot unleaded regular gasoline

USGC spot ultra-low sulfur diesel

Market Indicators (dollars per barrel)

Chicago LLS 6-3-2-1 crack spread(a)(b)

USGC LLS 6-3-2-1 crack spread(a)

Blended 6-3-2-1 crack spread(a)(c)

LLS

WTI

LLS – WTI crude oil differential(a)

Sweet/Sour crude oil differential(a)(d)

2017

2016

2015

1.58

1.64

1.60

1.62

9.77

9.89

9.84

54.00

50.85

3.15

5.94

1.33

1.34

1.33

1.32

7.19

6.80

6.96

45.01

43.47

1.55

6.52

1.60

1.62

1.55

1.58

10.67

9.11

9.70

52.35

48.76

3.59

6.10

The following table includes the impacts of changes in the market indicators above on Refining & Marketing
segment results.

Market Indicators impact on Refining &
Marketing segment income

Chicago LLS 6-3-2-1 crack spread(a)(b)

USGC LLS 6-3-2-1 crack spread(a)

LLS – WTI crude oil differential(a)

Sweet/Sour crude oil differential(a)(d)

Total

2017 vs. 2016 Variance

2016 vs. 2015 Variance

(dollars per
barrel)

(in millions)

(dollars per
barrel)

(in millions)

2.58

825

$ (3.48)

(846)

3.09

1.60

(0.58)

1,446

249

(189)

(2.31)

(2.04)

0.42

(1,129)

(260)

334

$ 2,331

$ (1,901)

(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 40/60 percent in 2017, 40/60 percent in 2016 and 38/62 percent in 2015 based on MPC’s

refining capacity by region in each period.
LLS (prompt) – [delivered cost of sour crude oil: Arab Light, Kuwait, Maya, Western Canadian Select and Mars].

(d)

Refining & Marketing segment revenues increased $10.87 billion in 2017 compared to 2016 and decreased
$10.38 billion in 2016 compared to 2015. The increase in 2017 was primarily due to higher refined product sales
prices and volumes. The decrease in 2016 was primarily due to lower refined product sales prices and volumes.

Refining & Marketing intersegment sales to our Speedway segment increased $720 million in 2017 compared to
2016 and decreased $1.44 billion in 2016 compared to 2015. The increase in 2017 was primarily due to an
increase in average refined product sales prices, partially offset by a decrease in sales volumes. The decrease in
2016 was primarily due to a decrease in average refined product sales prices, partially offset by an increase in
refined product sales volumes.

Refining & Marketing intersegment fees paid to our Midstream segment increased $181 million in 2017
compared to 2016 and $332 million in 2016 compared to 2015 due the dropdown of certain assets to MPLX.
Certain segment information has been recast to reflect this activity as noted in the “Corporate Overview” section.
After the February 1, 2018 dropdown of assets to MPLX, as noted in the “Corporate Overview—Strategic
Actions to Enhance Shareholder Value” section, Refining & Marketing intersegment fees paid to MPLX will
increase for fuels distribution services and refinery logistics assets and Refining & Marketing direct operating
costs will decrease. These changes will not impact Refining & Marketing margin but will reduce Refining &
Marketing segment results. There will be a corresponding increase in the Midstream segment results.

Refining & Marketing segment income from operations increased $964 million in 2017 compared to 2016 and
decreased $2.64 billion in 2016 compared to 2015. Segment income in 2016 includes a $345 million non-cash
benefit related to the Company’s LCM inventory reserve. Excluding the LCM inventory benefit, the increase in
segment results for 2017 primarily resulted from higher LLS crack spreads in both the U.S. Gulf Coast and
Chicago markets. The LLS blended crack spread for 2017 increased to $9.84 per barrel from $6.96 per barrel in
2016. These favorable effects were partially offset by less favorable product price realizations as compared to the
spot market prices used in the LLS blended crack spread. Segment income in 2015 includes a $345 million non-
cash charge related to the Company’s LCM inventory reserve, which was reversed in 2016. The favorable LCM
inventory adjustment variance was more than offset by the unfavorable effects of lower crack spreads and higher
direct operating costs due to refinery turnarounds.

Based on changes in the market indicators shown above and our refinery throughputs, we estimate a positive
impact of $2.33 billion for 2017 compared to 2016 and a negative impact of $1.90 billion for 2016 compared to
2015 on Refining & Marketing segment income from operations. The market indicators use spot market values

and an estimated mix of crude purchases and product sales. Differences in our results compared to these market
indicators, including product price realizations, the mix of crudes purchased and their costs, the effects of LCM
inventory valuation adjustments, the effects of market structure on our crude oil acquisition prices, and other
items like refinery yields and other feedstock variances, had estimated negative impacts on Refining &
Marketing segment income from operations of $1.35 billion in 2017 compared to 2016 and $304 million in 2016
compared to 2015. The significant elements of the negative impact in both years were unfavorable product price
realizations and unfavorable crude acquisition costs relative to the market indicators. In 2016, these negative
impacts were partially offset by the reversal of the Company’s LCM inventory valuation reserve that was
recorded in 2015.

The cost of inventories of crude oil and refinery feedstocks, refined products and merchandise is determined
primarily under the LIFO method. In the second quarter of 2016, we had recognized the effects of an interim
liquidation of our refined products inventories which we did not expect to reinstate by year end resulting in a pre-
tax charge of approximately $54 million to income. Based on year end refined product inventories, which were
higher than inventories at the beginning of the year, we had a build in refined product inventories for 2016.
Therefore, we recognized the effects of this annual build in our refined products in the fourth quarter of 2016
which had the effect of reversing the second quarter charge. In the fourth quarter of 2015, we recorded a LIFO
charge of $45 million as a result of annual decreased levels in refined products and crude inventory volumes. For
the full year, we recognized a LIFO charge of $7 million in 2017, $2 million in 2016 and $78 million in 2015.

Refinery direct operating costs decreased $0.17 per barrel in 2017 compared to 2016 and increased $0.72 per
barrel in 2016 compared to 2015. The decrease in 2017 includes an $0.11 per barrel decrease in planned
turnaround and major maintenance costs resulting from lower turnaround activity at our Garyville and Robinson
refineries partially offset by higher activity at our Catlettsburg refinery. The change in 2016 compared to 2015
includes an increase in planned turnaround and major maintenance costs of $0.70 per barrel as well as a decrease
in other manufacturing costs of $0.06 per barrel. The increase in planned turnaround and major maintenance
costs for 2016 are primarily attributable to higher turnaround activity at the Galveston Bay, Garyville and
Robinson refineries and a lower than normal schedule of turnaround activity in 2015, partially offset by a
decrease in turnaround activity at the Catlettsburg refinery. In 2016, the decrease in other manufacturing costs
was primarily due to lower routine maintenance costs, general and administrative expenses and waste costs.

We purchase RINs to satisfy a portion of our RFS2 compliance. Our expenses associated with purchased RINs
were $457 million in 2017, $288 million in 2016 and $212 million in 2015. The increase in 2017 was primarily
due to higher weighted average RIN costs driven by higher market prices for purchased RINs and increases in the
number of RINs purchased. In 2015, we recorded a $46 million charge to recognize increased estimated costs for
compliance based on the renewable fuel standards for 2014 and 2015 proposed by the EPA in May 2015 and
finalized in November 2015, particularly those for biomass-based diesel and advanced biofuels. Excluding this
charge, the increase in 2016 was primarily due to the effect of increased purchases of biomass-based diesel RINs
at increased prices.

Speedway

Key Financial and Operating Data

Speedway revenues (in millions)

Speedway income from operations (in millions)

Convenience stores at period-end

Gasoline & distillate sales (millions of gallons)

Average gasoline & distillate sales prices (dollars per gallon)

Gasoline & distillate margin (dollars per gallon)(a)

Same store gasoline sales volume (period over period)

Merchandise sales (in millions)

Same store merchandise sales (period over period)(b)

Merchandise margin (in millions)(c)

Merchandise margin percent

2017

19,033

732

2,744

5,799

2.34

0.1738

(1.3)%

4,893

1.2%

1,402

28.7%

2016

18,286

734

2,733

6,094

2.09

0.1656

(0.4)%

5,007

3.2%

1,435

28.7%

2015

19,693

673

2,766

6,038

2.36

0.1823

(0.3)%

4,879

4.1%

1,368

28.0%

(a)

(b)

(c)

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 volume. Excludes LCM inventory valuation adjustments.
Excludes cigarettes.
The price paid by the consumers less the cost of merchandise.

Reconciliation of Speedway total margin to
Speedway income from operations (in millions)

Speedway income from operations

Plus (Less):

Operating, selling, general and administrative expenses(a)
Depreciation and amortization(a)
Income from equity method investments
Net gain on disposal of assets
Other income(a)
Inventory market valuation adjustment

Speedway total margin

Speedway total margin:(a)

Gasoline and distillate margin(b)
Merchandise margin(c)
Other margin

Speedway total margin

2017

2016

2015

732

734

673

1,530
275
(69)
(14)
(14)
-

2,440

1,008
1,402
30

2,440

1,554
273
(5)
(30)
(18)
(25)

2,483

1,009
1,435
39

1,573
254
-
(1)
(17)
25

2,507

1,101
1,368
38

2,483

2,507

(a)

(b)

(c)

2017 margin and expenses do not reflect any results from the 41 travel centers contributed to PFJ Southeast, whereas they are reflected in
the 2016 and 2015 information. Our share of the net results from the joint venture is reflected in income from equity method investments.
The price paid by consumers less the cost of refined products, including transportation, consumer excise taxes and bankcard processing
fees and excluding any LCM inventory market adjustment.
The price paid by the consumers less the cost of merchandise.

Speedway segment revenues increased $747 million in 2017 compared to 2016 and decreased $1.41 billion in
2016 compared to 2015. The increase in 2017 was due to an increase in gasoline and distillate sales of
$860 million partially offset by a decrease in merchandise sales of $114 million. Average gasoline and distillate
selling prices increased $0.25 per gallon which were partially offset by a decrease in sales volumes in 2017
compared to 2016. The decreases in gasoline and distillate sales volumes and merchandise sales are primarily

attributable to the contribution of 41 travel centers to PJF Southeast in fourth quarter of 2016. The decrease in
2016 was due to a decrease in gasoline and distillate sales of $1.52 billion primarily due to a decrease in gasoline
and distillate selling prices of $0.27 per gallon.

Speedway segment income from operations decreased $2 million in 2017 compared to 2016 and increased
$61 million in 2016 compared to 2015. Segment income in 2016 includes a $25 million non-cash benefit related
to the reversal of the Company’s LCM inventory reserve, which was recorded in 2015. Excluding the LCM
inventory benefit recognized in 2016, the increase in segment results for 2017 was primarily due to a full year of
contributions from Speedway’s travel center joint venture formed in the fourth quarter 2016 and lower operating
expense, partially offset by lower merchandise margin and lower gains from asset sales. In 2016, in addition to
the favorable LCM inventory adjustment variance, the remaining increase during 2016 was primarily due to
higher merchandise margin of $67 million and gains from asset sales, partially offset by lower gasoline and
distillate margin of $91 million, or $0.0167 per gallon. The increase in merchandise margin in 2016 was related
to a combination of higher merchandise and food sales and improved margins.

Midstream

Key Financial and Operating Data

2017

2016

2015

Midstream third party revenues (in millions)

2,322

1,828

Midstream intersegment sales to Refining & Marketing (in millions)

Total Midstream revenues (in millions)

Midstream income from operations (in millions)(a)

Crude oil and refined product pipeline throughputs (mbpd)(b)

Average crude oil and refined products tariff rates (dollars per barrel)(c)

1,443

3,765

1,339

3,377

1,262

3,090

1,048

2,948

187

930

1,117

463

2,829

0.61

0.62

1,477

3,608

6,460

394

1,505

3,275

5,761

335

3,075

5,468

307

3.02

0.66

2.55

0.47

2.04

0.40

Terminal throughput (mbpd)(d)

Gathering system throughput (MMcf/d)(e)

Natural gas processed (MMcf/d)(e)

C2 (ethane) + NGLs fractionated (mbpd)(e)

Benchmark Prices

Natural Gas NYMEX HH ($ per MMBtu)(e)

C2 + NGL Pricing ($ per gallon)(e)(f)

(b) On owned common-carrier pipelines, excluding equity method investments.

(d)

Includes the results of the terminal assets beginning on April 1, 2016, the date the assets became a business.

(e) Beginning December 4, 2015, which was the effective date of the MarkWest Merger.

(f)

C2 + NGL pricing based on Mont Belvieu prices assuming an NGL barrel of approximately 35 percent ethane, 35 percent propane, six
percent Iso-Butane, 12 percent normal butane and 12 percent natural gasoline.

Midstream segment revenue and income from operations increased $675 million and $291 million in 2017
compared to 2016, respectively, and $1.97 billion and $585 million in 2016 compared to 2015, respectively. The
increases in 2017 were primarily due to increased revenue from higher natural gas and NGL gathering,

processing and fractionation volumes and changes in natural gas and NGL prices. Segment results also benefited
from the first quarter 2017 acquisitions of the Ozark pipeline and our ownership interest in the Bakken Pipeline
system. The comparison for 2017 and 2016 also reflects the absence of any revenues for the terminal services
provided to the Refining & Marketing segment in the first quarter of 2016 versus the inclusion of revenues for
these services in the first quarter of 2017. These assets were not considered a business prior to April 1, 2016, and
therefore, no financial results for these assets were available from which to recast first quarter 2016 Midstream
segment results. The increases in 2016 were primarily due to the inclusion of MarkWest’s operating results in
Midstream segment
income following the merger with MPLX from the December 4, 2015 merger date.
Midstream income from operations also increased due to earnings from new and existing pipeline and marine
equity investments.

After the February 1, 2018 dropdown of assets to MPLX, as noted in the “Corporate Overview—Strategic
Actions to Enhance Shareholder Value” section, intersegment sales to our Refining & Marketing segment will
increase for fees charged for fuels distribution services and refinery logistics assets.

Corporate and Other

Key Financial Information (in millions)

Items not allocated to segments:

Corporate and other unallocated items(a)

Pension settlement expenses(b)

Litigation

Impairment(c)

2017

2016

2015

(365) $

(268) $

(293)

(52) $

(29) $

(7) $

(4)

(486) $

(144)

(a) Corporate and other unallocated items consists primarily of MPC’s corporate administrative expenses and costs related to certain non-
operating assets, except for corporate overhead expenses attributable to MPLX, which are included in the Midstream segment. Corporate
overhead expenses are not allocated to the Refining & Marketing and Speedway segments.

(b)

(c)

See Item 8. Financial Statements and Supplementary Data – Note 22.

See Item 8. Financial Statements and Supplementary Data – Notes 16 and 17.

Corporate and other unallocated expenses increased $97 million in 2017 compared to 2016 and decreased
$25 million in 2016 compared to 2015. The increase in 2017 is largely due to higher unallocated corporate costs
and increases in employee-related expenses and corporate costs. The decrease in 2016 is primarily due to
increased allocations of corporate costs to the segments.

Other unallocated items in 2017 include an $86 million litigation charge, a litigation benefit of $57 million and a
benefit of $23 million related to MPC’s share of gains from the sale of assets remaining from the canceled
Sandpiper pipeline project. Other unallocated items in 2016 include impairment charges of $486 million resulting
from non-cash charges of $267 million related to the indefinite deferral of the Sandpiper pipeline project,
$130 million related to the goodwill recognized in connection with the MarkWest Merger and $89 million related
to an MPLX equity method investment. Other unallocated items in 2015 include an impairment charge of
$144 million recorded in the third quarter of 2015 related to the cancellation of the ROUX project at our
Garyville refinery. See Item 8. Financial Statements and Supplementary Data – Note 17 for additional
information on the impairment charges.

We recorded pretax pension settlement expenses of $52 million in 2017, $7 million in 2016 and $4 million in
2015 from the recognition of certain deferred pension plan losses in connection with significant settlements of
our pension obligations during these years.

Liquidity and Capital Resources

Cash Flows

Our cash and cash equivalents balance was $3.01 billion at December 31, 2017 compared to $887 million at
December 31, 2016. Net cash provided by (used in) operating activities, investing activities and financing
activities for the past three years is presented in the following table.

(In millions)

Net cash provided by (used in):

Operating activities

Investing activities

Financing activities

Total

2017

2016

2015

6,609

3,995

4,073

(3,394)

(1,091)

(2,941)

(1,294)

(3,441)

(999)

2,124

(240)

(367)

Net cash provided by operating activities increased $2.61 billion in 2017 compared to 2016, primarily due to
increased operating results and favorable changes in working capital of $1.74 billion compared to 2016. Net cash
provided by operating activities decreased $78 million in 2016 compared to 2015, primarily due to decreased
operating results, partially offset by favorable changes in working capital of $1.22 billion compared to 2015. The
above changes in working capital exclude changes in short-term debt.

For 2017, changes in working capital were a net $1.94 billion source of cash, primarily due to an increase in
accounts payable and accrued liabilities and a decrease in inventories, partially offset by an increase in current
receivables. Changes from December 31, 2016 to December 31, 2017 per the consolidated balance sheets,
excluding the impact of acquisitions, were as follows:

• Accounts payable increased $2.70 billion from year-end 2016, primarily due to higher crude oil

payable volumes and prices.

• Current receivables increased $1.08 billion from year-end 2016, primarily due to higher crude oil and

refined product receivable prices and volumes.

•

Inventories decreased $106 million from year-end 2016, primarily due to lower crude oil inventory
volumes.

For 2016, changes in working capital were a net $200 million source of cash, primarily due to an increase in
accounts payable and accrued liabilities, partially offset by increases in current receivables and inventories.
Accounts payable increased $850 million from year-end 2015, primarily due to higher crude oil payable prices;
current receivables increased $690 million from year-end 2015, primarily due to higher refined product and crude
oil receivable prices; and inventories increased $61 million from year-end 2015, excluding the change in the
Company’s inventory valuation reserve of $370 million, primarily due to higher crude oil and refined product
inventory volumes.

For 2015, changes in working capital were a net $1.02 billion use of cash, primarily due to a decrease in accounts
payable and accrued liabilities, partially offset by decreases in current receivables and inventories. Accounts
payable decreased $1.92 billion from year-end 2014, primarily due to lower crude oil payable prices and
volumes; current receivables decreased $1.13 billion from year-end 2014, primarily due to lower refined product
and crude oil receivable prices and lower crude oil receivable volumes; and inventories decreased $47 million
from year-end 2014, excluding a $370 million LCM inventory valuation charge, primarily due to lower refined
product and crude oil inventory volumes.

Cash flows used in investing activities increased $453 million in 2017 compared to 2016 and decreased $500
million in 2016 compared to 2015.

• Cash used for additions to property, plant and equipment was primarily due to spending in our
Midstream segment. See discussion of capital expenditures and investments under the “Capital
Spending” section.

• Net investments were a use of cash of $740 million in 2017 compared to $262 million in 2016 and
$327 million in 2015. The change in 2017 compared to 2016 was primarily due to MPLX’s investment
of $500 million for a partial interest in the Bakken Pipeline system. The change in 2016 compared to
2015 was primarily due to decreases in contributions to the SAX pipeline project of $114 million, the
Sandpiper pipeline project of $57 million and Crowley Ocean Partners of $38 million, partially offset
by increases in contributions to Crowley Coastal Partners of $82 million and MPLX equity method
investments of $74 million.

• Cash provided by disposal of assets totaled $79 million, $101 million and $21 million in 2017, 2016
and 2015, respectively. Cash provided in 2016 was primarily due the sale of certain Speedway
locations in the normal course of business.

The consolidated statements of cash flows exclude changes to the consolidated balance sheets that did not affect
cash. A reconciliation of additions to property, plant and equipment to total capital expenditures and investments
follows for each of the last three years.

(In millions)

2017

2016

2015

Additions to property, plant and equipment per consolidated statements of cash flows

2,732

2,892

1,998

Non-cash additions to property, plant and equipment

Asset retirement expenditures

Increase (decrease) in capital accruals

Total capital expenditures

Acquisitions(a)

Investments in equity method investees(b)

Total capital expenditures and investments

2,801

250

805

(127)

2,771

288

2,098

13,854

331

3,856

3,069

16,283

(a)

(b)

The 2017 acquisitions include the Ozark pipeline. The 2016 acquisitions include purchase price adjustments related to the MarkWest
Merger. The 2015 acquisitions include the MarkWest Merger. The acquisition numbers above include property, plant and equipment,
equity investments, intangibles and goodwill. See Item 8. Financial Statements and Supplementary Data – Note 5 for further details.

The 2017 investments in equity method investees includes the investment of $500 million in MarEn Bakken related to the Bakken
Pipeline system. The 2016 amount excludes an adjustment of $143 million to the fair value of equity method investments acquired in
connection with the MarkWest Merger.

Financing activities were uses of cash of $1.09 billion in 2017, $1.29 billion in 2016 and $999 million in 2015.

• Long-term debt borrowings and repayments, including debt issuance costs, were a net $2.24 billion
source of cash in 2017 compared to a $1.42 billion use of cash in 2016 and a $746 million source of
cash in 2015. During 2017 MPLX issued $2.25 billion of senior notes, borrowed $505 million under
the MPLX bank revolving credit agreement, repaid the remaining $250 million under the MPLX term
loan agreement and we repaid the remaining $200 million balance under the MPC term loan
agreement. During 2016, MPLX used proceeds from its issuance of the MPLX Preferred Units to repay
amounts outstanding under the MPLX bank revolving credit facility and MPC chose to prepay
$500 million under its term loan. See Item 8. Financial Statements and Supplementary Data – Note 19
for additional information on our long-term debt.

• Cash proceeds from the issuance of MPLX common units were $473 million in 2017 and $776 million
in 2016. Cash proceeds from the issuance of MPLX Preferred Units was $984 million in 2016. See
Item 8. Financial Statements and Supplementary Data – Note 4 for further discussion of MPLX.

• Cash used in common stock repurchases totaled $2.37 billion in 2017, $197 million in 2016 and
$965 million in 2015 associated with the share repurchase plans authorized by our board of directors.
See the “Capital Requirements” section for further discussion of our stock repurchases.

• Cash used in dividend payments totaled $773 million in 2017, $719 million in 2016 and $613 million
in 2015. The increases were primarily due to increases in our base dividend, partially offset by
decreases in the number of outstanding shares of our common stock as a result of share repurchases.
Dividends per share were $1.52 in 2017, $1.36 in 2016 and $1.14 in 2015.

• Cash used in financing activities in all three years included a portion of the payments to the seller of
the Galveston Bay refinery under the contingent earnout provisions of the purchase and sale agreement.

Derivative Instruments

See Item 7A. Quantitative and Qualitative Disclosures about Market Risk for a discussion of derivative
instruments and associated market risk.

Capital Resources

Our liquidity totaled $7.3 billion at December 31, 2017 consisting of:

(In millions)

Bank revolving credit facility(a)

364 day bank revolving credit facility

Trade receivables facility

Total

Cash and cash equivalents(b)

Total liquidity

December 31, 2017
Outstanding
Borrowings

Available
Capacity

Total
Capacity

2,500

1,000

750

4,250

2,500

1,000

750

4,250

3,006

7,256

(a)

(b)

Excludes MPLX’s $2.25 billion bank revolving credit facility, which had $505 million borrowings and $3 million of letters of credit
outstanding as of December 31, 2017.
Excludes $5 million of MPLX cash and cash equivalents.

Because of the alternatives available to us, including internally generated cash flow and access to capital markets,
including a commercial paper program, 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
spending programs, the repurchase of shares of our common stock, dividend payments, defined benefit plan
contributions, repayment of debt maturities and other amounts that may ultimately be paid in connection with
contingencies.

As discussed in the “Strategic Actions to Enhance Shareholder Value” section in the Corporate Overview, MPLX
financed the dropdown transactions in the aggregate with debt and equity in approximately equal proportions.
The equity financing was funded through MPLX common units and general partner units issued to us. These
actions were designed to provide a clear valuation of our midstream platform and to provide an ongoing return of
capital to shareholders in a manner consistent with maintaining an investment-grade credit profile. In connection
with the final dropdown, on January 2, 2018, MPLX entered into a $4.1 billion 364-day term-loan facility to fund
the cash portion of the dropdown consideration.

On February 8, 2018, MPLX issued $5.5 billion in aggregate principal amount of senior notes in a public
offering, consisting of $500 million aggregate principal amount of 3.375 percent unsecured senior notes due
March 2023, $1.25 billion aggregate principal amount of 4.000 percent unsecured senior notes due March 2028,
$1.75 billion aggregate principal amount of 4.500 percent unsecured senior notes due April 2038, $1.5 billion
aggregate principal amount of 4.700 percent unsecured senior notes due April 2048, and $500 million aggregate
principal amount of 4.900 percent unsecured senior notes due April 2058.

On February 8, 2018, $4.1 billion of the net proceeds were used to repay the 364-day term-loan facility, which
was drawn on February 1, 2018 to fund the cash portion of the consideration MPLX paid MPC for the dropdown
of assets on February 1, 2018. The remaining proceeds will be used to repay outstanding borrowings under
MPLX’s revolving credit facility and intercompany loan agreement with us and for general partnership purposes.

Commercial Paper – We established a commercial paper program that allows us to have a maximum of
$2 billion in commercial paper outstanding, with maturities up to 397 days from the date of issuance. We do not
intend to have outstanding commercial paper borrowings in excess of available capacity under our bank
revolving credit facilities. At December 31, 2017, we had no amounts outstanding under the commercial paper
program.

MPC Bank Revolving Credit Facility – On July 21, 2017, we entered into credit agreements with a syndicate of
lenders to replace our previous $2.5 billion four-year revolving credit facility due in 2020 and our previous
$1 billion 364-day credit agreement, dated as of July 20, 2016, which expired on July 19, 2017. The new
agreements provide for a five-year $2.5 billion bank revolving credit agreement (“MPC five-year credit
agreement”) maturing on July 21, 2022 and a 364-day $1 billion bank revolving credit agreement (“MPC 364-
day credit agreement” and together with the MPC five-year credit agreement, the “MPC credit agreements”)
maturing on July 20, 2018. There were no borrowings or letters of credit outstanding under these facilities at
December 31, 2017.

Trade receivables facility – Our trade receivables facility has a borrowing capacity of $750 million (depending
on the amount of our eligible domestic trade accounts receivable) and a maturity date of July 19, 2019. As of
December 31, 2017, eligible trade receivables supported borrowings of $750 million. There were no borrowings
outstanding at December 31, 2017. Availability under our trade receivables facility is primarily a function of
refined product selling prices.

MPLX Credit Agreement – On July 21, 2017, MPLX entered into a credit agreement with a syndicate of lenders
to replace the existing $2 billion five-year bank revolving credit facility with a $2.25 billion five-year bank
revolving credit facility with a maturity date of July 21, 2022 (“MPLX credit agreement”). At December 31,
2017, MPLX had $505 million borrowings and $3 million of letters of credit outstanding under the bank
revolving credit facility, resulting in total unused loan availability of approximately $1.74 billion.

See Item 8. Financial Statements and Supplementary Data – Note 19 for further discussion of our debt.

The MPC credit agreements contain representations and warranties, affirmative and negative covenants and
events of default that we consider usual and customary for agreements of these types. The financial covenant
included in the MPC credit agreements requires us to maintain, as of the last day of each fiscal quarter, a ratio of
Consolidated Net Debt to Total Capitalization (as defined in the MPC credit agreements) of no greater than 0.65
to 1.00. Other covenants restrict us and/or certain of our subsidiaries from incurring debt, creating liens on assets
and entering into transactions with affiliates. As of December 31, 2017, we were in compliance with this debt
covenant with a ratio of Consolidated Net Debt to Total Capitalization of 0.20 to 1.00, as well as the other
covenants contained in the MPC credit agreements.

MPLX credit agreement includes a financial covenant that requires MPLX to maintain a ratio of Consolidated
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 fiscal quarters 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 to adjustments for certain acquisitions
completed and capital projects undertaken during the relevant period. Other covenants restrict MPLX and/or
certain of its subsidiaries from incurring debt, creating liens on assets and entering into transactions with
affiliates. As of December 31, 2017, MPLX was in compliance with the covenants contained in the MPLX credit
agreement, including a ratio of Consolidated Total Debt to Consolidated EBITDA of 3.23 to 1.0.

As disclosed in Item 8. Financial Statements and Supplementary Data – Note 3 to our audited consolidated
financial statements, we expect the adoption of the lease accounting standard update to result in the recognition
of a significant lease obligation. The MPC bank revolving credit facility and the MPLX credit agreement both
contain provisions under which the effects of the new accounting standard are not recognized for purposes of
financial covenant calculations.

Our intention is to maintain an investment-grade credit profile. As of January 31, 2018, the credit ratings on our
and MPLX’s senior unsecured debt were at or above investment-grade level as follows.

Company

MPC

MPLX

Rating Agency

Rating

Moody’s
Standard & Poor’s
Fitch
Moody’s
Standard & Poor’s
Fitch

Baa2 (stable outlook)
BBB (stable outlook)
BBB (stable outlook)
Baa3 (stable outlook)
BBB (stable outlook)
BBB- (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-grade rating, 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 rating agencies if, in their
respective judgments, circumstances so warrant.

None of the MPC credit agreements, the MPLX credit agreement or our trade receivables facility contains credit
rating triggers that would result in the acceleration of interest, principal or other payments in the event that our
credit ratings are downgraded. However, any downgrades of our senior unsecured debt would increase the
applicable interest rates, yields and other fees payable under the revolving credit facility and our trade
receivables facility. In addition, a downgrade of our senior unsecured debt rating to below investment-grade
levels could, under certain circumstances, decrease the amount of trade receivables that are eligible to be sold
under our trade receivables facility, impact our ability to purchase crude oil on an unsecured basis and could
result in us having to post letters of credit under existing transportation services agreements.

Capital Requirements

For information about our capital expenditures and investments, see the “Capital Spending” section.

During the second quarter of 2017, we paid BP $131 million for the fourth year’s contingent earnout related to
our 2013 acquisition of the Galveston Bay refinery. This second quarter payment represents the final payment
under the agreement. See Item 8. Financial Statements and Supplementary Data – Note 17.

In 2017, we made pension contributions totaling $128 million. We have no required funding for 2018, but may
make voluntary contributions at our discretion.

On January 29, 2018, we announced our board of directors approved a $0.46 per share dividend, payable
March 12, 2018 to shareholders of record at the close of business on February 21, 2018.

On February 5, 2018, we announced our intent to redeem all of the $600 million outstanding aggregate principal
amount of our 2.700 percent senior notes due on December 14, 2018. The 2018 senior notes will be redeemed
from available cash on March 15, 2018, at a price equal to par plus a make whole premium, plus accrued and
unpaid interest. The make whole premium will be calculated based on the market yield of the applicable treasury
issue as of the redemption date as determined in accordance with the indenture governing the 2018 senior notes.
Based on current treasury yields, we expect the make whole premium on the 2018 senior notes, excluding
accrued and unpaid interest, to be less than $3.0 million or 0.50 percent of the face value of the notes.

We may, from time to time, repurchase notes in the open market, in privately-negotiated transactions or
otherwise in such volumes, at such prices and upon such other terms as we deem appropriate.

Share Repurchases

Since January 1, 2012, our board of directors has approved $13.0 billion in total share repurchase authorizations
and we have repurchased a total of $9.81 billion of our common stock, leaving $3.19 billion available for
repurchases as of December 31, 2017. Under these authorizations, we have acquired 246 million shares at an
average cost per share of $39.82. As part of our strategic actions to enhance shareholder value, for the year ended
December 31, 2017, cash proceeds received from dropdowns to MPLX during the year were used in part to
repurchase $2.37 billion of our common stock. Additionally, we expect to continue repurchasing our common
stock in 2018 with cash received from the dropdown of our refining logistics assets and fuels distribution
services on February 1, 2018. The table below summarizes our total share repurchases. See Item 8. Financial
Statements and Supplementary Data – Note 9 for further discussion of the share repurchase plans.

(In millions, except per share data)

Number of shares repurchased

Cash paid for shares repurchased

Average cost per share

2017

2016

2015

2,372

53.85

197

41.84

965

50.31

We may utilize various methods to effect the repurchases, which could include open market repurchases,
negotiated block transactions, accelerated share repurchases 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.

Contractual Cash Obligations

The table below provides aggregated information on our consolidated obligations to make future payments under
existing contracts as of December 31, 2017. The contractual obligations detailed below do not include our
contractual obligations to MPLX under various fee-based commercial agreements as these transactions are
eliminated in the consolidated financial statements.

(In millions)

Long-term debt(a)

Capital lease obligations(b)

Operating lease obligations

Purchase obligations:(c)

Crude oil, feedstock, refined

product and renewable fuel
contracts(d)

Transportation and related

contracts

Contracts to acquire property,

plant and equipment

Service, materials and other

contracts(e)

Total purchase obligations

Other long-term liabilities reported

in the consolidated balance sheet(f)

Total contractual cash

obligations

Total

2018

2019-2020

2021-2022

Later Years

21,204

1,222

1,855

2,577

15,550

457

1,476

9,680

2,670

484

1,998

14,832

2,084

255

8,967

400

482

419

10,268

225

429

435

692

558

1,687

438

329

152

705

418

1,275

402

230

463

126

873

603

1,602

1,019

40,053

12,016

4,502

4,671

18,864

(a)

Includes interest payments for our senior notes and the MPLX credit agreement and commitment and administrative fees for our credit
agreement, the MPLX credit agreement and our trade receivables facility.

(b) Capital lease obligations represent future minimum payments.

(c)

(d)

(e)

(f)

Includes both short- and long-term purchases obligations.

These contracts include variable price arrangements. For purposes of this disclosure we have estimated prices to be paid primarily based
on futures curves for the commodities to the extent available.

Primarily includes contracts to purchase services such as utilities, supplies and various other maintenance and operating services.

Primarily includes obligations for pension and other postretirement benefits including medical and life insurance, which we have
estimated through 2027. See Item 8. Financial Statements and Supplementary Data – Note 22.

Capital Spending

MPC’s capital investment plan, excluding MPLX, totals approximately $1.6 billion in 2018 for capital projects
and investments, excluding capitalized interest and acquisitions. We continuously evaluate our capital plan and
make changes as conditions warrant. Capital expenditures and investments for each of the last three years are
summarized by segment below.

(In millions)

2018 Plan

2017

2016

2015

Capital expenditures and investments:(a)

Refining & Marketing

Speedway

Midstream(b)

Corporate and Other(c)

Total

950

530

2,405

832

381

2,505

138

1,054

1,045

303

1,568

144

501

14,545

192

3,970

3,856

3,069

16,283

(a) Capital expenditures include changes in capital accruals.
(b)

Includes $220 million for the acquisition of the Ozark pipeline and an investment of $500 million in MarEn Bakken related to the
Bakken Pipeline in 2017, $10 million in 2016 for purchase price adjustments related to the MarkWest Merger and $13.85 billion in 2015
for the MarkWest Merger. See Item 8. Financial Statements and Supplementary Data – Note 5.
Includes capitalized interest of $55 million, $63 million and $37 million for 2017, 2016 and 2015, respectively.

(c)

Refining & Marketing

The Refining & Marketing segment’s forecasted 2018 capital spending and investments is approximately
$950 million. This amount includes approximately $400 million of growth capital focused on optimizing the
Galveston Bay Refinery, upgrading residual fuel oils to higher-value products, maximizing distillate production
and expanding light product placement flexibility including exports. Sustaining capital
is approximately
$550 million, which includes approximately $210 million related to regulatory spending for Tier 3 gasoline. A
number of these projects span multiple years.

Major projects completed over last three years have prepared us to meet the upcoming transportation fuel
regulatory mandate (Tier 3 fuel standards), increase our diesel production, process light crude oil and increase
our export capabilities. In addition, the transformational STAR investment project at our Galveston Bay refinery
is progressing according to plan and is scheduled to complete in 2022.

Speedway

The Speedway segment’s 2018 capital forecast of approximately $530 million is focused on the construction of
new store locations as well as remodeling and rebuilding existing locations, consistent with our commitment to
aggressively grow the business and build upon its industry-leading position.

Major projects over last three years included building new store locations, remodeling and rebuilding existing
locations in core markets and building out our network of commercial fueling lane locations to capitalize on
diesel demand growth. We also invested in the conversion, remodel and maintenance of stores acquired in 2014.

Midstream

MPLX’s capital investment plan includes $2.2 billion of organic growth capital and approximately $190 million
of maintenance capital. This growth plan includes the addition of eight processing plants representing nearly
1.5 bcf/d of incremental processing capacity as well as 100,000 barrels per day of additional fractionation
capacity in the Marcellus, Utica and Permian basins. The remaining growth capital
is planned for the
development of various crude oil and refined petroleum products infrastructure projects, including the export-
capacity expansion project at our Galveston Bay refinery.

Major projects over last three years included investments for the development of natural gas and gas liquids
infrastructure to support MPLX’s producer customers, primarily in the Marcellus and Utica shale regions,
development of various crude oil and refined petroleum products infrastructure projects, including a build-out of
Utica Shale infrastructure in connection with the Cornerstone Pipeline, a butane cavern in Robinson, Illinois, and
a tank farm expansion in Texas City, Texas. The MarkWest Merger comprised 85 percent of our total capital
expenditures and investments in 2015.

The Midstream segment’s forecasted 2018 capital spend, excluding MPLX, is approximately $15 million.

Corporate and Other

The 2018 capital forecast includes approximately $85 million to support corporate activities. Major projects over
the last three years included an expansion project for our corporate headquarters and upgrades to information
technology systems.

Off-Balance Sheet Arrangements

Off-balance sheet arrangements comprise those arrangements that may potentially impact our liquidity, capital
resources and results of operations, even though such arrangements are not recorded as liabilities under
accounting principles generally accepted in the United States. Our off-balance sheet arrangements are limited to
indemnities and guarantees that are described below. Although these arrangements serve a variety of our business
purposes, we are 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 the off-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 and guarantees to Marathon Oil. These arrangements are described in Item 8.
Financial Statements and Supplementary Data – Note 25.

Our opinions concerning liquidity and capital resources and our ability to avail ourselves in the future of the
financing options mentioned in the above forward-looking statements are based on currently available
information. If this information proves to be inaccurate, future availability of financing may be adversely
affected. Factors that affect the availability of financing include our performance (as measured by various
factors, including cash provided by operating activities), the state of worldwide debt and equity markets, investor
perceptions and expectations of past and future performance, the global financial climate, and, in particular, with
respect to borrowings, the levels of our outstanding debt and credit ratings by rating agencies. The discussion of
liquidity and capital resources above also contains forward-looking statements regarding expected capital
requirements and investment spending, costs for projects under construction, project completion dates and
expectations or projections about strategies and goals for growth, upgrades and expansion. The forward-looking
statements about our capital and investment budget are based on current expectations, estimates and projections
and are not guarantees of future performance. Actual results may differ materially from these expectations,
estimates and projections and are subject to certain risks, uncertainties and other factors, some of which are
beyond our control and are difficult to predict. Some factors that could cause actual results to differ materially
include our ability to achieve the objectives related to the strategic initiatives discussed herein; adverse changes
in laws including with respect to tax and regulatory matters; our ability to generate sufficient income and cash
flow to effect the intended share repurchases, including within the expected timeframe; our ability to manage
disruptions in credit markets or changes to our credit rating; the potential impact on our share price if we are
unable to effect the intended share repurchases; the impact of adverse market conditions affecting MPC’s and
MPLX’s midstream businesses; changes to the expected construction costs and timing of projects; continued/
further volatility in and/or degradation of market and industry conditions; the availability and pricing of crude oil
and other feedstocks; slower growth in domestic and Canadian crude supply; the effects of the lifting of the U.S.
crude oil export ban; completion of pipeline capacity to areas outside the U.S. Midwest; consumer demand for

refined products; transportation logistics; the reliability of processing units and other equipment; MPC’s ability
to successfully implement growth opportunities; modifications to MPLX earnings and distribution growth
objectives; compliance with federal and state environmental, economic, health and safety, energy and other
policies and regulations, including the cost of compliance with the Renewable Fuel Standard, and/or enforcement
actions initiated thereunder; adverse results in litigation; changes to MPC’s capital budget; other risk factors
inherent to MPC’s industry; These factors, among others, could cause actual results to differ materially from
those set forth in the forward-looking statements. For additional information on forward-looking statements and
risks that can affect our business, see “Disclosures Regarding Forward-Looking Statements” and Item 1A. Risk
Factors in this Annual Report on Form 10-K.

Transactions with Related Parties

We believe that transactions with related parties were conducted under terms comparable to those with unrelated
parties. See Item 8. Financial Statements and Supplementary Data – Note 7 for discussion of activity with related
parties.

Environmental Matters and Compliance Costs

We have incurred and may continue to incur substantial capital, operating and maintenance, and remediation
expenditures as a result of environmental laws and regulations. If these expenditures, as with all costs, are not
ultimately reflected in the prices of our products and services, our operating results will be adversely affected.
laws and
We believe that substantially all of our competitors must comply with similar environmental
regulations. However, the specific impact on each competitor may vary depending on a number of factors,
including the age and location of its operating facilities, marketing areas, production processes 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 impact our business, financial condition, results of operations and cash
flows, including costs of compliance and permitting delays. The extent and magnitude of these adverse impacts
cannot be reliably or accurately estimated at this time because specific regulatory and legislative requirements
have not been finalized and uncertainty exists with respect to the measures being considered, the costs and the
time frames for compliance, and our ability to pass compliance costs on 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)

Capital

Compliance:(a)

Operating and maintenance

Remediation(b)

Total

2017

2016

2015

343

302

222

413

541

792

883

355

630

(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 reasonably estimated. As environmental remediation matters proceed toward
ultimate resolution or as additional remediation obligations arise, charges in excess of those previously accrued
may be required.

New or expanded environmental requirements, which could increase our environmental costs, may arise in the
future. We believe we comply with all legal requirements regarding the environment, but since not all of them
are fixed or presently determinable (even under existing legislation) and may be affected by future legislation or
regulations, it is not possible to predict all of the ultimate costs of compliance, including remediation costs that
may be incurred and penalties that may be imposed.

Our environmental capital expenditures accounted for ten percent, ten percent and nine percent of capital
expenditures, for 2017, 2016 and 2015, respectively, excluding the acquisition of the Ozark pipeline in 2017 and the
MarkWest Merger in 2015. Our environmental capital expenditures are expected to approximate $370 million, or
9 percent, of total planned capital expenditures in 2018. Predictions beyond 2018 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 of more stringent requirements and the availability of new technologies,
among other matters. Based on currently identified projects, we anticipate that environmental capital expenditures
will be approximately $290 million in 2019; however, actual expenditures may vary as the number and scope of
environmental projects are revised as a result of improved technology or changes in regulatory requirements and
could increase if additional projects are identified 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 Factors and Item 3. Legal Proceedings.

Critical Accounting Estimates

The preparation of financial statements in accordance with US GAAP requires us to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and
liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and
expenses during the respective reporting periods. Accounting estimates are considered 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 for highly uncertain matters or the susceptibility of such matters to change; and (2) the impact of the
estimates and assumptions on financial condition or operating performance is material. Actual results could differ
from the estimates and assumptions used.

Fair Value Estimates

Fair 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 the measurement date. There are three approaches for measuring the fair value of
assets and liabilities: the market approach, the income approach and the cost approach, each of which includes
multiple valuation techniques. The market approach uses prices and other relevant information generated by
market transactions involving identical or comparable assets or liabilities. The income approach uses valuation
techniques to measure fair value by converting future amounts, such as cash flows or earnings, into a single
present value amount using current market expectations about those future amounts. The cost approach 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 replacement cost. 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 of comparable 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 the techniques. These standards establish a fair value hierarchy that
prioritizes the inputs used in applying the various valuation techniques. Inputs broadly refer to the assumptions
that market participants use to make pricing decisions, including assumptions about risk. Level 1 inputs are given
the highest priority in the 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 on an ongoing
basis.

• Level 2 – Observable market-based inputs or unobservable inputs that are corroborated by market data.
These are inputs other than quoted prices in active 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 in management’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 priority level of input that is significant to the fair value measurement. The
assessment of the significance of a particular input to the fair value measurement requires judgment and may
affect the placement of assets and liabilities within the levels of the fair value hierarchy. We use an income or
market approach for recurring fair value measurements and endeavor to use the best information available. See
Item 8. Financial Statements and Supplementary Data – Note 17 for disclosures regarding our fair value
measurements.

Significant uses of fair value measurements include:

•

assessment of impairment of long-lived assets;

assessment of impairment of intangible assets:

assessment of impairment of goodwill;

assessment of impairment of equity method investments;

recorded values for assets acquired and liabilities assumed in connection with acquisitions; and

recorded values of derivative instruments.

Impairment Assessments of Long-Lived Assets, Intangible Assets, Goodwill and Equity Method
Investments

Fair value calculated for the purpose of testing our long-lived assets, intangible assets, goodwill and equity
method investments for impairment is estimated using the expected present value of future cash flows method
and comparative market prices when appropriate. Significant judgment is involved in performing these fair value
estimates 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 demand factors, which include, among other things, industry-wide
capacity, our planned utilization rate, end-user demand, capital expenditures and economic conditions.
Such estimates are consistent with those used in our planning and capital investment reviews.

• Future volumes. Our estimates of future refinery, retail, pipeline throughput and natural gas and NGL
processing volumes are based on internal forecasts prepared by our Refining & Marketing, Speedway
and Midstream 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 and economic conditions, operational risk, regulatory
risk and political risk. This discount rate is also compared to recent observable market transactions, 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 these projections.

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 poor outlook for profitability, a significant reduction in pipeline throughput
volumes, a significant reduction in natural gas or NGLs processed, a significant reduction in refining margins,
other changes to contracts or changes 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 assets may not be recoverable based on the expected undiscounted future
cash flow of an asset group. For purposes of impairment evaluation, long-lived assets must be grouped at the
lowest level for which independent cash flows can be identified, which generally is the refinery and associated
distribution system level for Refining & Marketing segment assets, site level for Speedway segment convenience
stores, and the plant level or pipeline system level for Midstream segment assets. If the sum of the undiscounted
estimated pretax cash flows 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.

We own a 33 percent undivided joint interest in the Capline Pipeline System (“Capline”), which currently
transports crude oil from St. James, Louisiana to Patoka, Illinois. Competing pipelines and changing oil transport
routes in the U.S. may result in a decline in volumes on Capline in future years to levels that cannot sustain
operations. The owners of Capline are considering various alternatives for the use of the pipeline system,
including an assessment of the commercial potential to reverse the pipeline direction within the next several
years. A non-binding open season started in October 2017, and results indicated shipper interest in the reversal of
Capline. As a result, in December 2017, Marathon Pipe Line LLC, a wholly owned subsidiary of MPLX, and
operator of Capline, announced that the pipeline`s owners are proceeding with planning for the potential reversal
of the pipeline, including a plan to evaluate next steps required for a potential binding open season. Pending
agreement among the owners, southbound service is estimated to commence by the second half of 2022.
Developments in the commercial outlook for Capline could result in incurring costs associated with retiring
certain assets or an impairment of the carrying value of our interest which was $159 million as of December 31,
2017.

Unlike long-lived assets, goodwill must be tested for impairment at least annually, and between annual tests if an
event occurs or circumstances change that would 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. We have thirteen
reporting units, nine of which have goodwill allocated to them. At December 31, 2017, we had a total of
$3.59 billion of goodwill recorded on our consolidated balance sheet. The fair value of our reporting units
exceeded book value for each of our reporting units in 2017.

MPC has nine reporting units with goodwill totaling approximately $3.59 billion as of November 30, 2017.
Step 1 of the annual impairment analysis resulted in the fair value of the reporting units exceeding their carrying
value by percentages ranging from approximately 22 percent to 406 percent. The reporting unit with fair value
exceeding its carrying value by approximately 22 percent has goodwill of $228 million at December 31, 2017.
An increase of 1.50 percent to the discount rate used to estimate the fair value of the reporting units would not
have resulted in a goodwill impairment charge as of November 30, 2017. Significant assumptions used to

estimate the reporting units’ fair value included estimates of future cash flows. If estimates for future cash flows,
which are impacted by commodity prices and producers’ production plans, were to decline, the overall reporting
units’ fair value would decrease, resulting in potential goodwill impairment charges. Fair value determinations
require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result,
there can be no assurance that the estimates and assumptions made for purposes of the impairment tests will
prove to be an accurate prediction of the future.

Equity method investments are assessed for impairment whenever factors indicate an other than temporary loss
in value. Factors providing evidence of such a loss 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 to generate income
sufficient to justify our carrying value. At December 31, 2017, we had $4.79 billion of investments in equity
method investments recorded on our consolidated balance sheet.

Centennial is a refined products pipeline which experienced a significant reduction in shipment volumes in the
second half of 2011 that has continued through 2017. At December 31, 2017, Centennial was not shipping
product. As a result, we continued to evaluate the carrying value of our equity investment in Centennial. We
concluded that no impairment was required given our assessment of its fair value based on market participant
assumptions for various potential uses and future cash flows of Centennial’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 a future
impairment of our Centennial interest. As of December 31, 2017, our equity investment in Centennial was $35
million and we had a $25 million guarantee associated with 50 percent of Centennial’s outstanding debt. See
Item 8. Financial Statements and Supplementary Data – Note 25 for additional information on the debt guarantee.

An estimate of the sensitivity to net income resulting from impairment calculations is not practicable, given the
numerous assumptions (e.g., pricing, volumes and discount rates) that can materially affect our estimates. That is,
unfavorable adjustments to some of the above listed assumptions may be offset by favorable adjustments in other
assumptions.

The above discussion contains forward-looking statements with respect to the carrying value of our Centennial
equity investment and our undivided joint interest in Capline. Factors that could affect the carrying value of these
assets include, but are not limited to, a change in business conditions, a further decline or improvement in the
long-term outlook of the potential uses of these assets and the pursuit of different strategic alternatives for such
assets. These factors, among others, could cause actual results to differ materially from those set forth in the
forward-looking statements.

Acquisitions

In accounting for business combinations, acquired assets, assumed liabilities and contingent consideration are
recorded based on estimated fair values as of the date of acquisition. The excess or shortfall of the purchase price
when compared to the fair value of the net tangible and identifiable intangible assets acquired, if any, is recorded
as goodwill or a bargain purchase gain, respectively. A significant amount of judgment is involved in estimating
the individual fair values of property, plant and equipment, intangible assets, contingent consideration and other
assets and liabilities. We use all available information to make 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 cost approach, which requires
estimates of replacement costs and depreciation and obsolescence estimates; and the market approach which uses
market data and adjusts for entity-specific differences. The estimates used in determining fair values are based on
assumptions believed to be reasonable but which are inherently uncertain. Accordingly, actual results may differ
from the projected results used to determine fair value.

information on our
See Item 8. Financial Statements and Supplementary Data – Note 5 for additional
acquisitions. See Item 8. Financial Statements and Supplementary Data – Note 17 for additional information on
fair value measurements.

Derivatives

We record all derivative instruments at fair value. Substantially all of our commodity derivatives are cleared
through exchanges which provide active trading information for identical derivatives and do not require any
assumptions in arriving at fair value. Fair value estimation for all our derivative instruments is discussed in
Item 8. Financial Statements and Supplementary Data – Note 17. Additional information about derivatives and
their valuation may be found in Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Variable Interest Entities

We evaluate all legal entities in which we hold an ownership or other pecuniary interest to determine if the entity
is a VIE. Our interests in a VIE are referred to as variable interests. Variable interests can be contractual,
ownership or other pecuniary interests in an entity that change with changes in the fair value of the VIE’s assets.
When we conclude that we hold an interest in a VIE we must determine if we are the entity’s primary
beneficiary. A primary beneficiary is deemed to have a controlling financial interest in a VIE. This controlling
financial interest is evidenced by both (a) the power to direct the activities of the VIE that most significantly
impact the VIE’s economic performance and (b) the obligation to absorb losses that could potentially be
significant to the VIE or the right to receive benefits that could potentially be significant to the VIE. We
consolidate any VIE when we determine that we are the primary beneficiary. We must disclose the nature of any
interests in a VIE that is not consolidated.

Significant judgment is exercised in determining that a legal entity is a VIE and in evaluating our interest in a
VIE. We use primarily a qualitative analysis to determine if an entity is a VIE. We evaluate the entity’s need for
continuing financial support; the equity holder’s lack of a controlling financial interest; and/or if an equity
holder’s voting interests are disproportionate to its obligation to absorb expected losses or receive residual
returns. We evaluate our interests in a VIE to determine whether we are the primary beneficiary. We use a
primarily qualitative analysis to determine if we are deemed to have a controlling financial interest in the VIE,
either on a standalone basis or as part of a related party group. We continually monitor our interests in legal
entities for changes in the design or activities of an entity and changes in our interests, including our status as the
primary beneficiary to determine if the changes require us to revise our previous conclusions.

Changes in the design or nature of the activities of a VIE, or our involvement with a VIE, may require us to
reconsider our conclusions on the entity’s status as a VIE and/or our status as the primary beneficiary. Such
reconsideration requires significant judgment and understanding of the organization. This could result in the
deconsolidation or consolidation of the affected subsidiary, which would have a significant impact on our
financial statements.

Variable Interest Entities are discussed in Item 8. Financial Statements and Supplementary Data – Note 6 .

Pension and Other Postretirement Benefit Obligations

Accounting 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.

We utilize the work of third-party actuaries to assist in the measurement of these obligations. We have selected
different discount rates for our funded pension plans and our unfunded retiree health care plans due to the
different projected benefit payment patterns. The selected rates are compared to various similar bond indexes for
reasonableness. In determining the assumed discount rates, we use our third-party actuary’s discount rate model.
This model calculates an equivalent single discount rate for the projected benefit plan cash flows using a yield
curve derived from AA bond yields. The yield curve represents a series of 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
and generally only non-callable bonds are included. Outlier bonds that have a yield to maturity that deviate
significantly from the average yield within each maturity 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 effect on the periodic benefit cost reported for the plans. Decreasing the
discount rates of 3.55 percent for our pension plans and 3.70 percent for our other postretirement benefit plans by
0.25 percent would increase pension obligations and other postretirement benefit plan obligations by $53 million
and $31 million, respectively, and would increase defined benefit pension expense and other postretirement
benefit plan expense by $5 million and $3 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 49 percent fixed income securities for the primary funded pension
plan), past performance and other factors. Certain components of the asset mix are modeled with various
assumptions regarding inflation and returns. In addition, our long-term asset rate of return assumption is
compared to those of other companies and to historical returns for reasonableness. We used the 6.50 percent
long-term rate of return to determine our 2017 defined benefit pension expense. After evaluating activity in the
capital markets, along with the current and projected plan investments, we did not change the asset rate of return
for our primary plan from 6.50 percent effective for 2018. Decreasing the 6.50 percent asset rate of return
assumption by 0.25 percent would increase our defined benefit 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 2017 mortality tables from the U.S. Society of Actuaries.

Item 8. Financial Statements and Supplementary Data – Note 22 includes detailed information about the
assumptions used to calculate the components of our annual defined benefit pension and other postretirement
plan expense, as well as the obligations and accumulated other comprehensive loss reported on the year-end
balance sheets.

Contingent Liabilities

We accrue contingent liabilities for legal actions, claims, litigation, environmental remediation, tax deficiencies
related to operating taxes and third-party indemnities for specified tax matters when such contingencies are both
probable and estimable. We regularly assess these estimates in consultation with legal counsel to consider
resolved and new matters, material developments in court proceedings or settlement discussions, new
information obtained as a result of ongoing 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
and assessments of the amount of damages. Similarly, liabilities for environmental remediation may vary from
estimates because of changes in laws, regulations and 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 consolidated statements of income, except for tax deficiencies unrelated to income
taxes, which are recorded as other taxes. For additional information on contingent liabilities, see Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations – Environmental
Matters and Compliance Costs.

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 of contingencies that must be assessed,
the number of underlying
assumptions and the wide range of reasonably possible outcomes, in terms of both the probability of loss and the
estimates of such loss.

Accounting Standards Not Yet Adopted

As discussed in Item 8. Financial Statements and Supplementary Data – Note 3 to our audited consolidated
financial statements, certain new financial accounting pronouncements will be effective for our financial
statements in the future.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

General

We are exposed to market risks related to the volatility of crude oil and refined product prices. We employ
various strategies, including the use of commodity derivative instruments, to hedge the risks related to these price
fluctuations. We are also exposed to market risks related to changes in interest rates and foreign currency
exchange rates. As of December 31, 2017, we did not have any financial derivative instruments to hedge the risks
related to interest rate fluctuations; however, we have used them in the past, and we continually monitor the
market and our exposure and may enter into these agreements again in the 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
related to 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 adverse consequences. While the use of derivative instruments could
materially affect our results of operations in particular quarterly or annual periods, we believe that 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 17 and 18 for more information about the fair
value measurement of our derivatives, as well as the amounts recorded in our consolidated balance sheets and
statements of income. We do not designate any of our commodity derivative instruments as hedges for
accounting purposes.

Commodity Price Risk

Refining & Marketing

Our 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 also authorize 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 LIFO inventory targets. We also use derivative instruments related to
the acquisition of foreign-sourced crude oil and ethanol blended with refined petroleum products to hedge price
risk associated with market volatility between the time we purchase the product and when we use it in the
refinery production process or it is blended. In addition, we may use commodity derivative instruments on fixed
price contracts for the sale of refined products to hedge risk by converting the refined product sales to market-
based prices. The majority of these derivatives are exchange-traded contracts. 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 are monitored daily by a risk control group to ensure compliance with our stated risk management
policy.

Midstream

NGL and natural gas prices are volatile and are impacted by changes in fundamental supply and demand, as well
as market uncertainty, availability of NGL transportation and fractionation capacity and a variety of additional
factors that are beyond MPLX’s control. A portion of MPLX’s profitability is directly affected by prevailing
commodity prices primarily as a result of processing or conditioning at its own or third-party processing plants,
purchasing and selling or gathering and transporting volumes of natural gas at index-related prices and the cost of
third-party transportation and fractionation services. To the extent that commodity prices influence the level of
natural gas drilling by MPLX’s producer customers, such prices also indirectly affect profitability. MPLX has a

committee comprised of senior management that oversees risk management activities, continually monitors the
risk management program and adjusts its strategy as conditions warrant. Derivative contracts utilized for crude
oil, natural gas and NGLs are swaps and options traded on the OTC market and fixed price forward contracts. As
a result of MPLX’s current derivative positions, it believes that it has mitigated a portion of its expected
commodity price risk through the fourth quarter of 2018. MPLX would be exposed to additional commodity risk
in certain situations such as if producers under-deliver or over-deliver products or if processing facilities are
operated in different recovery modes. In the event that MPLX has derivative positions in excess of the product
delivered or expected to be delivered, the excess derivative positions may be terminated.

MPLX management conducts a standard credit review on counterparties to derivative contracts, and it has
provided the counterparties with a guaranty as credit support for its obligations. A separate agreement with
certain counterparties allows MarkWest Liberty Midstream to enter into derivative positions without posting cash
collateral. MPLX uses standardized agreements that allow for offset of certain positive and negative exposures in
the event of default or other terminating events, including bankruptcy.

Open Derivative Positions and Sensitivity Analysis

The table below sets forth information relating to our significant open commodity derivative contracts as of
December 31, 2017.

Crude Oil(a)

Exchange-traded

Natural Gas
OTC

Refined Products(b)

Exchange-traded

OTC

Position

Total Barrels
(In thousands)

December 31, 2017
Weighted Average Price
(Per barrel)

Benchmark

Long

Short

23,299

(25,199)

$56.96

$55.94

CME and ICE Crude(c)(d)

Position

MMBtu

Weighted Average Price
(Per MMBtu)

Long

928,003

$ 2.78

Position

Total Gallons
(In thousands)

Weighted Average Price
(Per gallon)

Benchmark

Long

Short

257,460

(236,460)

(9,587)

$ 1.91

$ 0.73

CME ULSD and RBOB(c)(e)

(a)

(b)

99.8 percent of exchange-traded contracts expire in the first quarter of 2018.

100 percent of exchange-traded contracts expire in the first quarter of 2018.

(d)

Intercontinental Exchange (“ICE”).

(e) Reformulated gasoline Blendstock for Oxygenate Blending (“RBOB”).

Sensitivity analysis of the incremental effects on income from operations (“IFO”) of hypothetical 10 percent and
25 percent increases and decreases in commodity prices for open commodity derivative instruments as of
December 31, 2017 is provided in the following table.

(In millions)

As of December 31, 2017

Crude

Refined products

Embedded derivatives

Change in IFO from a
Hypothetical Price
Increase of

Change in IFO from a
Hypothetical Price
Decrease of

10%

25%

10%

25%

(9)

(23)

(6)

(16)

(6)

(14)

We remain at risk for possible changes in the market value of commodity derivative instruments; however, such
risk should be mitigated by price changes in the 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 market conditions and in risk profiles. Changes to the portfolio after December 31,
2017 would cause future IFO effects to differ from those presented above.

Interest Rate Risk

We are impacted by interest rate fluctuations related to our debt obligations. At December 31, 2017, our debt was
primarily comprised of the $2.25 billion aggregate principal amount of fixed rate senior notes issued February 1,
2011, the $1.95 billion aggregate principal amount of fixed rate senior notes issued September 5, 2014, the
$500 million aggregate principal amount of fixed rate MPLX senior notes issued February 12, 2015, the
$1.50 billion aggregate principal amount of fixed rate senior notes issued December 15, 2015, the $4.04 billion
aggregate principal amount of fixed rate MPLX senior notes issued December 22, 2015 and the $2.25 billion
aggregate principal amount MPLX senior notes issued February 10, 2017. Additionally, we have $505 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,
including the portion classified as current and excluding capital leases, as of December 31, 2017 is provided in
the following table. Fair value of cash and cash equivalents, receivables, accounts payable and accrued interest
approximate carrying value and are relatively insensitive to changes in interest rates due to the short-term
maturity of the instruments. Accordingly, these instruments are excluded from the table.

(In millions)

Long-term debt

Fixed-rate

Variable-rate

Fair Value(a)

Change in
Fair Value(b)

Change in Net Income for the
Twelve Months Ended
December 31, 2017(c)

13,388

1,161

505

n/a

(a)

Fair value was based on market prices, where available, or current borrowing rates for financings with similar terms and maturities.

(b) Assumes a 100-basis point decrease in the weighted average yield-to-maturity at December 31, 2017.

(c) 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, 2017.

At December 31, 2017, our portfolio of long-term debt was comprised of fixed-rate instruments and variable-rate
borrowings under the MPLX bank revolving credit facility. The fair value of our fixed-rate debt is relatively
sensitive to interest rate fluctuations. Our sensitivity to interest rate declines and corresponding increases in the
fair value of our debt portfolio unfavorably affects our results of operations and cash flows only when we elect to
repurchase or otherwise retire fixed-rate debt at prices above carrying value. Interest rate fluctuations generally
do not impact the fair value of borrowings under the MPLX bank revolving credit facility, but may affect our
results of operations and cash flows.

Foreign Currency Exchange Rate Risk

We are impacted by foreign exchange rate fluctuations related to some of our purchases of crude oil denominated
in Canadian dollars. We did not utilize derivatives to hedge our market risk exposure to these foreign exchange
rate fluctuations in 2017.

Counterparty Risk

We are subject to risk of loss resulting from nonpayment by our customers to whom we provide services or sell
natural gas or NGLs. We believe that certain contracts would allow us to pass those losses through to our
customers, thus reducing our risk, when we are selling NGLs and acting as our producer customers’ agent. Our
credit exposure related to these customers is represented by the value of our trade receivables. Where exposed to
credit risk, we analyze the customer’s financial condition prior to entering into a transaction or agreement,
establish credit terms and monitor the appropriateness of these terms on an ongoing basis. In the event of a
customer default, we may sustain a loss and our cash receipts could be negatively impacted.

We are subject to risk of loss resulting from nonpayment or nonperformance by counterparties or future
commission merchants. Our credit exposure related to commodity derivative instruments is represented by the
fair value of contracts with a net positive fair value at the reporting date. These outstanding instruments expose
us to credit
loss in the event of nonperformance by the counterparties to the agreements. Should the
creditworthiness of one or more of our counterparties decline, our ability to mitigate nonperformance risk is
limited to a counterparty agreeing to either a voluntary termination and subsequent cash settlement or a novation
of the derivative contract to a third party. In the event of a counterparty default, we may sustain a loss and our
cash receipts could be negatively impacted. This counterparty credit risk does not apply to our embedded
derivative as the overall value is a liability. We regularly review the creditworthiness of counterparties and
futures commission merchants and enter into master netting agreements when appropriate.

Forward-Looking Statements

These quantitative and qualitative disclosures about market risk include forward-looking statements with respect
to management’s opinion about risks associated with the use of derivative instruments. These statements are
based on certain assumptions with respect to interest rates as well as market prices and industry supply of and
demand for crude oil, other refinery feedstocks, refined products, natural gas, NGLs and ethanol. If these
assumptions prove to be inaccurate, future outcomes with respect to our use of derivative instruments may differ
materially from those discussed in the forward-looking statements.

100

Item 8. Financial Statements and Supplementary Data

Index

Management’s Responsibilities for Financial Statements

Management’s Report on Internal Control Over Financial Reporting

Report of Independent Registered Public Accounting Firm

Audited Consolidated Financial Statements:

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Consolidated Balance Sheets

Consolidated Statements of Cash Flows

Consolidated Statements of Equity and Redeemable Noncontrolling Interest

Notes to Consolidated Financial Statements

Selected Quarterly Financial Data (Unaudited)

Supplementary Statistics (Unaudited)

Page

102

103

105

106

107

108

109

110

170

171

101

Management’s Responsibilities for Financial Statements

The accompanying consolidated financial statements of Marathon Petroleum Corporation and its subsidiaries
(“MPC”) are the responsibility of management and have been prepared in conformity with accounting principles
generally accepted in the United States of America. They necessarily include some amounts that are based on
best judgments and estimates. The financial information displayed in other sections of this Annual Report on
Form 10-K is consistent with these 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 an appropriate division of responsibility and by communications
programs aimed at assuring that its policies and methods are understood throughout the organization.

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 the consolidated financial statements.

/s/ Gary R. Heminger
Gary R. Heminger
Chairman of the Board
and Chief Executive Officer

/s/ Timothy T. Griffith
Timothy T. Griffith
Senior Vice President
and Chief Financial Officer

/s/ John J. Quaid
John J. Quaid
Vice President and
Controller

Management’s Report on Internal Control over Financial Reporting

MPC’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 the
framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission, was conducted under the supervision and with the participation of
management, including our chief executive officer and chief financial officer. Based on the results of this
evaluation, MPC’s management concluded that its internal control over financial reporting was effective as of
December 31, 2017.

The effectiveness of MPC’s internal control over financial reporting as of December 31, 2017 has been audited
by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report
which is included herein.

/s/ Gary R. Heminger
Gary R. Heminger
Chairman of the Board
and Chief Executive Officer

/s/ Timothy T. Griffith
Timothy T. Griffith
Senior Vice President
and Chief Financial Officer

102

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Marathon Petroleum Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Marathon Petroleum Corporation and its
subsidiaries as of December 31, 2017 and 2016, and the related consolidated statements of income, of
comprehensive income, of equity and redeemable noncontrolling interest, and of cash flows for each of the three
years in the period ended December 31, 2017, including the related notes (collectively referred to as the
“consolidated financial statements”). We also have audited the Company’s internal control over financial
reporting as of December 31, 2017, based on criteria established in Internal Control—Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2017 and 2016, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 2017 in conformity with accounting
principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in
all material respects, effective internal control over financial reporting as of December 31, 2017, based on criteria
established in Internal Control—Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its assessment of the effectiveness of internal control over
financial reporting, included in the accompanying Management’s Report on Internal Control over Financial
Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on
the Company’s internal control over financial reporting based on our audits. We are a public accounting firm
registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to
be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are
free of material misstatement, whether due to error or fraud, and whether effective internal control over financial
reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts
and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as well as evaluating the overall presentation of
the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audits also included performing such other procedures as we considered necessary in the circumstances. We
believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in

103

accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely 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
internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

limitations,

/s/PricewaterhouseCoopers LLP

Toledo, Ohio
February 28, 2018

We have served as the Company’s auditor since 2010.

104

Marathon Petroleum Corporation

Consolidated Statements of Income

(In millions, except per share data)

Revenues and other income:

2017

2016

2015

Sales and other operating revenues (including consumer excise taxes)

74,104

63,277

72,045

Sales to related parties

Income (loss) from equity method investments

Net gain on disposal of assets

Other income

Total revenues and other income

Costs and expenses:

Cost of revenues (excludes items below)

Purchases from related parties

Inventory market valuation adjustment

Consumer excise taxes

Impairment expense

Depreciation and amortization

Selling, general and administrative expenses

Other taxes

Total costs and expenses

Income from operations

Net interest and other financial income (costs)

Income before income taxes

(Benefit) provision for income taxes

Net income

Less net income (loss) attributable to:

Redeemable noncontrolling interest

Noncontrolling interests

Net income attributable to MPC

Per Share Data (See Note 8)

Basic:

Net income attributable to MPC per share

Weighted average shares outstanding

Diluted:

Net income attributable to MPC per share

Weighted average shares outstanding

Dividends paid

629

306

320

(185)

178

112

75,369

63,364

72,258

58,760

49,170

55,583

570

7,759

2,114

1,743

454

71,400

3,969

(625)

3,344

(460)

3,804

307

509

(370)

7,506

130

2,001

1,605

435

60,986

2,378

308

370

7,692

144

1,502

1,576

391

67,566

4,692

(556)

(318)

1,822

609

1,213

(2)

4,374

1,506

2,868

3,432

1,174

2,852

6.76

507

6.70

512

1.52

2.22

528

2.21

530

1.36

5.29

538

5.26

542

1.14

The accompanying notes are an integral part of these consolidated financial statements.

105

Marathon Petroleum Corporation

Consolidated Statements of Comprehensive Income

(In millions)

Net income

Other comprehensive income (loss):

Defined benefit postretirement and post-employment plans:

Actuarial changes, net of tax of $17, $69 and $21

Prior service costs, net of tax of ($16), ($18) and ($24)

Other comprehensive income (loss)

Comprehensive income

Less comprehensive income (loss) attributable to:

Redeemable noncontrolling interest

Noncontrolling interests

Comprehensive income attributable to MPC

2017

2016

2015

3,804

1,213

2,868

(26)

115

(31)

(39)

(5)

3,807

1,297

2,863

307

(2)

3,435

1,258

2,847

The accompanying notes are an integral part of these consolidated financial statements.

106

Marathon Petroleum Corporation

Consolidated Balance Sheets

(In millions, except share data)

Assets
Current assets:

Cash and cash equivalents (MPLX: $5 and $234, respectively)
Receivables, less allowance for doubtful accounts of $11 and $12 (MPLX: $299 and $304,

respectively)

Inventories (MPLX: $65 and $55, respectively)
Other current assets (MPLX: $29 and $33, respectively)

Total current assets

Equity method investments (MPLX: $4,010 and $2,471, respectively)
Property, plant and equipment, net (MPLX: $12,187 and $11,408, respectively)
Goodwill (MPLX: $2,245 and $2,245, respectively)
Other noncurrent assets (MPLX: $479 and $506, respectively)

Total assets

Liabilities
Current liabilities:

Accounts payable (MPLX: $621 and $541, respectively)
Payroll and benefits payable (MPLX: $1 and $1, respectively)
Consumer excise taxes payable (MPLX: $3 and $3, respectively)
Accrued taxes (MPLX: $35 and $35, respectively)
Debt due within one year (MPLX: $1 and $1, respectively)
Other current liabilities (MPLX: $130 and $81, respectively)

Total current liabilities

Long-term debt (MPLX: $6,945 and $4,422, respectively)
Deferred income taxes (MPLX: $5 and $6, respectively)
Defined benefit postretirement plan obligations
Deferred credits and other liabilities (MPLX: $230 and $189, respectively)

Total liabilities

Commitments and contingencies (see Note 25)
Redeemable noncontrolling interest
Equity
MPC stockholders’ equity:

Preferred stock, no shares issued and outstanding (par value 0.01 per share, 30 million shares

authorized)
Common stock:

Issued – 734 million and 731 million shares (par value 0.01 per share, 1 billion shares

authorized)

Held in treasury, at cost – 248 million and 203 million shares

Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss
Total MPC stockholders’ equity

Noncontrolling interests
Total equity
Total liabilities, redeemable noncontrolling interest and equity

The accompanying notes are an integral part of these consolidated financial statements.

107

December 31,

2017

2016

3,011

887

4,695
5,550
145
13,401
4,787
26,443
3,586
830
49,047

8,297
591
501
169
624
296
10,478
12,322
2,654
1,099
666
27,219

3,617
5,656
241
10,401
3,827
25,765
3,587
833
44,413

5,593
530
464
153
28
378
7,146
10,544
3,861
1,055
604
23,210

1,000

7
(9,869)
11,262
12,864
(231)
14,033
6,795
20,828
49,047

7
(7,482)
11,060
10,206
(234)
13,557
6,646
20,203
44,413

Marathon Petroleum Corporation

Consolidated Statements of Cash Flows

(In millions)

2017

2016

2015

Increase (decrease) in cash and cash equivalents
Operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:

Amortization of deferred financing costs and debt discount
Impairment expense
Depreciation and amortization
Inventory market valuation adjustment
Pension and other postretirement benefits, net
Deferred income taxes
Net gain on disposal of assets
(Income) loss from equity method investments
Distributions from equity method investments
Changes in the fair value of derivative instruments
Changes in:

Current receivables
Inventories
Current accounts payable and accrued liabilities

All other, net

Net cash provided by operating activities

Investing activities:
Additions to property, plant and equipment
Acquisitions, net of cash acquired
Disposal of assets
Investments – acquisitions, loans and contributions

– redemptions, repayments and return of capital

All other, net

Net cash used in investing activities

Financing activities:
Commercial paper – issued

– repayments
Long-term debt – borrowings
– repayments

Debt issuance costs
Issuance of common stock
Common stock repurchased
Dividends paid
Issuance of MPLX LP common units
Issuance of MPLX LP redeemable preferred units
Distributions to noncontrolling interests
Contributions from noncontrolling interests
Contingent consideration payment
All other, net

Net cash used in financing activities

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

The accompanying notes are an integral part of these consolidated financial statements.

108

3,804

1,213

$ 2,868

64
-
2,114
-
47
(1,233)
(10)
(306)
388
116

(1,093)
106
2,814
(202)
6,609

(2,732)
(249)
79
(805)
65
248
(3,394)

300
(300)
2,911
(642)
(33)
46
(2,372)
(773)
473
-
(694)
129
(89)
(47)
(1,091)
2,124
887
3,011

61
130
2,001
(370)
9
394
(32)
185
291
(41)

(674)
(70)
985
(87)
3,995

(2,892)
-
101
(288)
26
112
(2,941)

1,263
(1,263)
864
(2,269)
(11)
11
(197)
(719)
776
984
(542)
6
(164)
(33)
(1,294)
(240)
1,127
887

16
144
1,502
370
80
134
(7)
(88)
113
4

1,292
80
(2,400)
(35)
4,073

(1,998)
(1,218)
21
(331)
4
81
(3,441)

-
-
2,993
(2,226)
(21)
33
(965)
(613)
-
-
(40)
-
(175)
15
(999)
(367)
1,494
$ 1,127

Marathon Petroleum Corporation

Consolidated Statements of Equity and Redeemable Noncontrolling Interest

(In millions)

Balance as of December 31, 2014

Net income
Dividends declared
Distributions to noncontrolling interests
Other comprehensive loss
Shares repurchased
Shares issued (returned) – stock-based

compensation

Stock-based compensation
Impact from equity transactions of MPLX LP
Noncontrolling interest—MarkWest Merger
Other

Balance as of December 31, 2015

Net income (loss)
Dividends declared
Distributions to noncontrolling interests
Contributions from noncontrolling interests
Other comprehensive income
Shares repurchased
Shares issued (returned) – stock-based

compensation

Stock-based compensation
Impact from equity transactions of MPLX LP
Issuance of MPLX LP redeemable preferred units

Balance as of December 31, 2016

Net income
Dividends declared
Distributions to noncontrolling interests
Contributions from noncontrolling interests
Other comprehensive loss
Shares repurchased
Shares issued (returned) – stock-based

compensation

Stock-based compensation
Impact from equity transactions of MPLX LP

Balance as of December 31, 2017

MPC Stockholders’ Equity

Common
Stock

Treasury
Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Non-
controlling
Interests

Total
Equity

Redeemable
Non-
controlling
Interest

7 $
-
-
-
-
-

-
-
-
-
-
7 $
-
-
-
-
-
-

-
-
-
-
7 $
-
-
-
-
-
-

-
-
-
7 $

(6,299) $
-
-
-
-
(965)

(11)
-
-
-
-
(7,275) $
-
-
-
-
-
(197)

(10)
-
-
-
(7,482) $
-
-
-
-
-
(2,372)

(15)
-
-
(9,869) $

9,841 $
-
-
-
-
-

33
69
1,128
-
-

11,071 $

-
-
-
-
-
-

11
35
(57)
-

11,060 $

-
-
-
-
-
-

7,515
2,852
(615)
-
-
-

-
-
-
-
-
9,752
1,174
(720)
-
-
-
-

-
-
-
-
10,206
3,432
(774)
-
-
-
-

46
46
110
11,262 $

-
-
-
12,864

(313)
-
-
-
(5)
-

-
-
-
-
-
(318)
-
-
-
-
84
-

-
-
-
-
(234)
-
-
-
-
3
-

-
-
-
(231)

639 $
16
-
(40)
-
-

-
16
5,795
13
(1)
6,438 $
(2)
-
(517)
6
-
-

-
6
715
-
6,646 $
307
-
(629)
129
-
-

-
8
334
6,795 $

11,390
2,868
(615)
(40)
(5)
(965)

22
85
6,923
13
(1)
19,675
1,172
(720)
(517)
6
84
(197)

1
41
658
-
20,203
3,739
(774)
(629)
129
3
(2,372)

31
54
444
20,828

-
41
-
(25)
-
-
-

-
-
-
984
1,000
65
-
(65)
-
-
-

-
-
-
1,000

(Shares in millions)

Balance as of December 31, 2014

Shares repurchased
Shares issued – stock-based compensation

Balance as of December 31, 2015

Shares repurchased
Shares issued (returned) – stock-based

compensation

Balance as of December 31, 2016

Shares repurchased
Shares issued (returned)—stock-based

compensation

Balance as of December 31, 2017

Common
Stock

Treasury
Stock

726
-
3
729
-

2
731
-

3
734

(179)
(19)
-
(198)
(4)

(1)
(203)
(44)

(1)
(248)

The accompanying notes are an integral part of these consolidated financial statements.

109

Notes to Consolidated Financial Statements

1. Description of the Business and Basis of Presentation

Description of the Business – Our business consists of refining and marketing, retail and midstream services
conducted primarily in the Midwest, Gulf Coast, East Coast, Northeast and Southeast regions of the
United States, through subsidiaries, including Marathon Petroleum Company LP (“MPC LP”), Speedway LLC
and its subsidiaries (“Speedway”) and MPLX LP and its subsidiaries (“MPLX”).

See Note 10 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&T Business”) into an independent, publicly traded company, MPC,
through the distribution of MPC common stock to the stockholders of Marathon Oil common 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 and accounts have been eliminated.

Certain prior period financial statement amounts have been reclassified to conform to current period presentation.

In the first quarter of 2017, we revised our segment reporting in connection with the contribution of certain
terminal, pipeline and storage assets to MPLX. See Note 4 for additional information. The operating results for
these assets are now reported in our Midstream segment. Previously, they were reported as part of our
Refining & Marketing segment. Comparable prior period information has been recast to reflect our revised
presentation. The results from pipeline and storage assets were recast effective January 1, 2015, and the results
from the terminal assets were recast effective April 1, 2016. Prior to these dates, these assets were not considered
businesses for accounting purposes and, therefore, there are no financial results from which to recast segment
results. Additionally, the MPLX asset and liability balances as of December 31, 2016, reported in parentheses on
our consolidated balance sheets, have also been recast to reflect this transaction. See Note 10 and Note 15 for
additional information.

2. Summary of Principal Accounting Policies

Principles applied in consolidation – These consolidated financial statements include the accounts of our
majority-owned, controlled subsidiaries and MPLX. Changes in ownership interest in consolidated subsidiaries
that do not result in a change in control are recorded as an equity transaction. As of December 31, 2017, we
owned a 30.4 percent interest in MPLX, including a two percent general partner interest. Due to our 100 percent
ownership of the general partner interest, we have determined that we control MPLX and therefore we
consolidate MPLX and record a noncontrolling interest for the 69.6 percent interest owned by the public.

Investments in entities over which we have significant influence, but not control, are accounted for using the
equity method of accounting. This includes entities in which we hold majority ownership but the minority
shareholders have substantive participating rights. Income from equity method investments represents our
proportionate share of net income generated by the equity method investees.

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 remaining useful lives of the underlying assets and liabilities, except for the excess
related to goodwill. Equity method investments are evaluated for impairment whenever changes in the facts and
circumstances indicate an other than temporary loss in value has occurred. When the loss is deemed to be other
than temporary, the carrying value of the equity method investment is written down to fair value.

110

Use of estimates – The preparation of financial statements in accordance with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated 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,
the sales price is fixed or determinable and collectability is reasonably
assured. Costs associated with revenues are recorded in cost of revenues. Shipping and other transportation costs
billed to our customers are presented on a gross basis in revenues and cost of revenues.

title is transferred,

Rebates from vendors are recognized as a reduction of cost of revenues when the initiating transaction
occurs. Incentives that are derived from contractual provisions are accrued based on past experience and
recognized in cost of revenues. Rebates to customers are reflected as a reduction of revenue and are accrued for
in “Accounts payable” on the consolidated balance sheets.

Crude oil and refined product exchanges and matching buy/sell transactions – We enter into exchange
contracts and matching buy/sell arrangements whereby 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 and to receive from the
same counterparty the same commodity at a specified location on the same or another specified date. The
exchange receipts and deliveries are nonmonetary transactions, with the exception of associated grade or location
differentials that are settled in cash. The matching buy/sell purchase and sale transactions are settled in
cash. Both exchange and matching buy/sell transactions are accounted for as exchanges of inventory and no
revenues are recorded. 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 on certain 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 with maturities of three months or less.

Restricted cash – Restricted cash consists of cash and investments that must be maintained as collateral for
letters of credit issued to certain third party producer customers. The balances will be outstanding until certain
capital projects are completed and the third party releases the restriction. Restricted cash also consists of cash
advances to be used for the operation and maintenance of an operated pipeline system. At December 31, 2017
and 2016, the amount of restricted cash included in “Other current assets” on the consolidated balance sheets
were $4 million and $5 million, respectively, which is currently reflected in our Midstream segment.

Accounts receivable and allowance for doubtful accounts – Our receivables primarily consist of customer
accounts receivable. Customer receivables are recorded at the invoiced amounts and generally do not bear
interest. Allowances for doubtful accounts are generally recorded when it becomes probable the receivable will
not be collected and are booked to bad debt expense. The allowance for doubtful accounts is the best estimate of
the amount of probable credit losses in customer accounts receivable. We review the allowance quarterly and
past-due balances over 180 days are reviewed individually for collectability.

Approximately 23 percent of our accounts receivable balances at both December 31, 2017 and 2016 are related to
sales of crude oil or refinery feedstocks to customers with whom we have master netting agreements. We have
master netting agreements with more than 100 companies engaged in the crude oil or refinery feedstock trading
and supply business or the petroleum refining industry. A master netting agreement generally provides for a once
per month net cash settlement of the accounts receivable from and the accounts payable to a particular
counterparty.

111

Inventories – Inventories are carried at the lower of cost or market value. Cost of inventories is determined
primarily under the LIFO method. Costs for crude oil, refinery feedstocks and refined product inventories are
aggregated on a consolidated basis for purposes of assessing if the LIFO cost basis of these inventories 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 rate risk. We also have limited authority to use selective derivative
instruments that assume market risk. All derivative instruments (including derivative instruments embedded in
other contracts) are recorded at fair value. Certain commodity derivatives are reflected on the consolidated
balance sheets on a net basis by counterparty as they are governed by master netting agreements. Cash flows
related to derivatives used to hedge commodity price risk and interest rate risk are classified in operating
activities with the underlying transactions.

Derivatives not designated as accounting hedges – Derivatives that are not designated as accounting hedges may
include commodity derivatives used to hedge price risk on (1) inventories, (2) fixed price sales of refined
products, (3) the acquisition of foreign-sourced crude oil, (4) the acquisition of ethanol for blending with refined
products, (5) the sale of NGLs and (6) the purchase of natural gas. 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 significant portion of our credit risk relates to nonperformance by counterparties. The
counterparties to our financial instruments consist primarily of major financial institutions and companies within
the energy industry. To manage counterparty risk associated with financial instruments, we select and monitor
counterparties based on an assessment of their financial strength and on credit ratings, if available. Additionally,
we limit the level of exposure with any single counterparty.

Property, plant and equipment – Property, plant and equipment are recorded at cost and depreciated on a
straight-line basis over the estimated useful lives of the assets, which range from three to 49 years. Such assets
are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount 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 is less than the carrying amount of the asset, an impairment assessment is
performed and the excess of the book value over the fair value of the asset is recorded as an impairment loss.

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 of property, plant and equipment are recognized when earned, which is
generally at the time of closing. If a loss on disposal is expected, such losses are recognized 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 are depreciated over the useful life of the related asset.

Goodwill and intangible assets – Goodwill represents the excess of the purchase price over the estimated fair
value of the net assets acquired in the acquisition of a business. Goodwill is not amortized, but rather is tested for
impairment annually and when events or changes in circumstances indicate that the fair value of a reporting unit
with goodwill has been reduced below carrying value. The impairment test requires allocating goodwill and other
assets and liabilities to reporting units. The fair value of each reporting unit is determined and compared to the
carrying value of the reporting unit. If the fair value of the reporting unit is less than the carrying value, including
goodwill, the implied fair value of goodwill is calculated. The excess, if any, of the book value over the implied
fair value of goodwill is charged to net income as an impairment expense.

Amortization of intangibles with definite lives is calculated using the straight-line method which is reflective of
the benefit pattern in which the estimated economic benefit is expected to be received over the estimated useful

112

life of the intangible asset. Intangibles subject to amortization are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of the intangible may not be recoverable. If the sum
of the expected undiscounted future cash flows related to the asset is less than the carrying amount of the asset,
an impairment loss is recognized based on the fair value of the asset. Intangibles not subject to amortization are
tested for impairment annually and when circumstances indicate that the fair value is less than the carrying
amount of the intangible. If the fair value is less than the carrying value, an impairment is recorded for the
difference.

Major maintenance activities – Costs for planned turnaround, major maintenance and engineered project
activities are expensed in the period incurred. These types of costs include contractor repair services, materials
and supplies, equipment rentals and our labor costs.

Environmental costs – Environmental expenditures are capitalized for additional equipment that mitigates or
prevents future contamination or improves environmental safety or efficiency of the existing assets. We
recognize remediation costs and penalties when the responsibility to remediate is probable and the amount of
associated costs can be reasonably estimated. The timing of remediation accruals coincides with completion of a
feasibility study or the commitment to a formal plan of action. Remediation liabilities are accrued based on
estimates of known environmental exposure and are discounted when the estimated amounts are reasonably fixed
and determinable. If recoveries of remediation costs from third parties are probable, a receivable is recorded and
is discounted 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 reasonable estimate of fair value can be made. The majority of our recognized
asset retirement liability relates to conditional asset retirement obligations for removal and disposal of fire-
retardant material from certain refining facilities. The remaining recognized asset retirement liability relates to
other refining assets, the removal of underground storage tanks at our leased convenience stores, certain pipelines
and processing facilities and other related pipeline assets. The fair values recorded for such obligations are based
on the most probable current cost projections. The recorded asset retirement obligations 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 the obligations are indeterminate. Such obligations will be
recognized in the period when sufficient
information becomes available to estimate a range of potential
settlement dates. The asset retirement obligations principally include the hazardous material disposal and
removal or dismantlement requirements associated with the closure of certain refining, terminal, retail, pipeline
and processing 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 business and by continuing to make improvements based on
technological advances. As a result, we believe that generally these assets have no expected settlement date for
purposes of estimating asset retirement obligations since the dates or ranges of dates upon which we would retire
these assets cannot be reasonably estimated at this time.

Income taxes – Deferred tax assets and liabilities are recognized for the estimated future tax consequences
attributable to differences between the financial statement 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 be realized. The realization
of deferred tax assets is assessed periodically based on several factors, primarily our expectation to generate
sufficient future taxable income.

Stock-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 calculation of fair value and ultimately,

113

the amount of expense that is recognized over the vesting period of the stock option award. Of the required
assumptions, the expected life of the stock option award and the expected volatility of our stock price have the
most significant impact on the fair value calculation. The average expected life is based on our historical
employee exercise behavior. The assumption for expected volatility of our stock price reflects a weighting of 50
percent of our common stock implied volatility and 50 percent of our 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. The fair 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-line attribution method for all service-based awards with a graded vesting
feature. If actual forfeiture results are different than expected, adjustments to recognized compensation expense
may be required in future periods. Unearned stock-based compensation is charged to equity when restricted stock
awards are granted. Compensation expense is recognized over the vesting period and is adjusted if conditions of
the restricted stock award are not met.

Business combinations – We recognize and measure the assets acquired and liabilities assumed in a business
combination based on their estimated fair values at the acquisition date, with any remaining difference versus the
purchase consideration recorded as goodwill or gain from a bargain purchase. For all material acquisitions,
management engages an independent valuation specialist to assist with the determination of fair value of the
assets acquired, liabilities assumed, noncontrolling interest, if any, and goodwill, based on recognized business
valuation methodologies. If the initial accounting for the business combination is incomplete by the end of the
reporting period in which the acquisition occurs, an estimate will be recorded. Subsequent to the acquisition, and
not later than one year from the acquisition date, we will record any material adjustments to the initial estimate
based on new information obtained about facts and circumstances that existed as of the acquisition date. An
income, market or cost valuation method may be utilized to estimate the fair value of the assets acquired,
liabilities assumed, and noncontrolling interest, if any, in a business combination. The income valuation method
represents the present value of future cash flows over the life of the asset using: (i) discrete financial forecasts,
which rely on management’s estimates of revenue and operating expenses; (ii) long-term growth rates; and
(iii) appropriate discount rates. The market valuation method uses prices paid for a reasonably similar asset by
other purchasers in the market, with adjustments relating to any differences between the assets. The cost
valuation method is based on the replacement cost of a comparable asset at prices at the time of the acquisition
reduced for depreciation of the asset. Acquisition-related costs are expensed as incurred in connection with each
business combination.

Renewable fuel identification numbers – We purchase RINs to satisfy a portion of our RFS2 compliance. We
record a short-term intangible asset, included in “Other current assets” on the balance sheet, for RINs owned in
excess of our anticipated current period compliance requirements. The asset value is based on the product of the
excess RINs as of the balance sheet date, if any, and the weighted average cost of our RINs. We record a current
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 the balance 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 of revenues” on the income statement. Any
gains or losses on the sale or expiration of RINs are classified as “Other income” on the income statement.
Proceeds from RIN sales are included in investing activities – “All other, net” on the cash flow statement.

3. Accounting Standards

Recently Adopted

In October 2016, the FASB issued an accounting standards update to amend the consolidation guidance issued in
February 2015 to require that a decision maker consider, in the determination of the primary beneficiary, its

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indirect interest in a VIE held by a related party that is under common control on a proportionate basis only. The
change was effective for our financial statements for fiscal years beginning after December 15, 2016, and interim
periods within those fiscal years. We were required to apply the standard retrospective to January 1, 2016, the
date on which we adopted the consolidation guidance issued in February 2015. Adoption of this accounting
standards update in the first quarter of 2017 did not have an impact on our consolidated financial statements.

In March 2016,
the FASB issued an accounting standards update to simplify some provisions in stock
compensation accounting. The areas for simplification involve the accounting for share-based payment
transactions, including income tax consequences, classifications of awards as either equity or liabilities and
classification within the statement of cash flows. The changes were effective for fiscal years beginning after
December 15, 2016, and interim periods within those fiscal years. Adoption of this accounting standards update
in the first quarter of 2017 did not have a material impact on our consolidated financial statements.

In March 2016, the FASB issued an accounting standards update eliminating the requirement that an investor
retrospectively apply equity method accounting when an investment that it had accounted for by another method
initially qualifies for the equity method. This change was effective for fiscal years beginning after December 15,
2016, and interim periods within those fiscal years. Adoption of this accounting standards update in the first
quarter of 2017 did not have an impact on our consolidated financial statements.

Not Yet Adopted

In August 2017, the FASB issued an accounting standards update to amend the hedge accounting rules to
simplify the application of hedge accounting guidance and better portray the economic results of risk
management activities in the financial statements. The guidance expands the ability to hedge nonfinancial and
financial risk components, reduces complexity in fair value hedges of interest rate risk, eliminates the
requirement to separately measure and report hedge ineffectiveness, as well as eases certain hedge effectiveness
assessment requirements. The guidance is effective beginning in 2019 with early adoption permitted. We are
currently evaluating the impact of this guidance, including transition elections and required disclosures, on our
financial statements and the timing of adoption. However, since we have not historically designated our
commodity derivatives as hedges, we do not expect the adoption of this accounting standards update to have a
material impact on our consolidated financial statements.

In May 2017, the FASB issued an accounting standards update to provide guidance about when changes to the
terms or conditions of a share-based payment award require an entity to apply modification accounting. An entity
should account for the effects of a modification unless the fair value, vesting conditions and balance sheet
classification of the modified award is the same as the original award immediately before the original award is
modified. We will adopt this accounting standards update on a prospective basis beginning on January 1, 2018.
We do not expect the application of this accounting standards update to have a material impact on our
consolidated financial statements.

In March 2017, the FASB issued an accounting standards update requiring that the service cost component of
pension and postretirement benefit costs be presented in the same line item as other current employee
compensation costs and other components of those benefit costs be presented separately from the service cost
component and outside a subtotal of income from operations, if presented. The update also states that only the
service cost component of pension and postretirement benefit cost is eligible for capitalization. We will adopt
this accounting standards update January 1, 2018. Application is retrospective for the presentation of the
components of these benefit costs and prospective for the capitalization of only service costs. We do not expect
the application of this accounting standards update to have a material impact on our consolidated financial
statements.

In February 2017, the FASB issued an accounting standards update addressing the derecognition of nonfinancial
assets. The guidance defines in substance nonfinancial assets, and states that the derecognition of business

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activities should be evaluated under the consolidation guidance, with limited exceptions related to conveyances
of oil and gas mineral rights or contracts with customers. The standard eliminates the previous exclusion for
businesses that are in-substance real estate, and eliminates some differences based on whether a transferred set is
that of assets or a business and whether the transfer is to a joint venture. The standard must be adopted in
conjunction with the adoption date of the revenue recognition accounting standards update, which we will adopt
on January 1, 2018. We plan to adopt the new standard using the modified retrospective method and do not
expect the application of this accounting standards update to have a material impact on our consolidated financial
statements.

In January 2017, the FASB issued an accounting standards update which simplifies the subsequent measurement
of goodwill by eliminating Step 2 from the goodwill impairment test. Under the new guidance, the recognition of
an impairment charge is calculated based on the amount by which the carrying amount exceeds the reporting
unit’s fair value, which could be different from the amount calculated under the current method using the implied
fair value of the goodwill; however, the loss recognized should not exceed the total amount of goodwill allocated
to that reporting unit. The guidance should be applied on a prospective basis, and is effective for annual or any
interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted
for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.

In January 2017, the FASB issued an accounting standards update to clarify the definition of a business with the
objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as
acquisitions (or disposals) of assets or businesses. The standard is intended to narrow the definition of a business
by specifying the minimum inputs and processes and by narrowing the definition of outputs. The change is
effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The
guidance will be applied prospectively.

In November 2016, the FASB issued an accounting standards update requiring that the statement of cash flows
explain the change during the period in the total of cash, cash equivalents and amounts generally described as
restricted cash or restricted cash equivalents. The change is effective for fiscal years beginning after
December 15, 2017, and interim periods within those fiscal years. Retrospective application is required. We do
not expect application of this accounting standards update to have a material impact on our statements of cash
flows.

In October 2016, the FASB issued an accounting standards update that requires recognition of the income tax
consequences of intra-entity transfers of assets other than inventory when the transfer occurs. The change is
effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The
amendments in this accounting standards update should be applied on a modified retrospective basis through a
cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We do
not expect application of this accounting standards update to have a material impact on our consolidated financial
statements.

In August 2016, the FASB issued an accounting standards update related to the classification of certain cash
flows. The accounting standards update provides specific guidance on eight cash flow classification issues,
including debt prepayment or debt extinguishment costs, contingent consideration payments made after a
business combination and distributions received from equity method investees, to reduce diversity in practice.
The change is effective for fiscal years beginning after December 15, 2017, and interim periods within those
fiscal years. Retrospective application is required. We do not expect application of this accounting standards
update to have a material impact on our statements of cash flows.

In June 2016, the FASB issued an accounting standards update related to the accounting for credit losses on
certain financial instruments. The guidance requires that for most financial assets, losses be based on an expected
loss approach which includes estimates of losses over the life of exposure that considers historical, current and
forecasted information. Expanded disclosures related to the methods used to estimate the losses as well as a

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specific disaggregation of balances for financial assets are also required. The change is effective for fiscal years
beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted
for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. We do not
expect application of this accounting standards update to have a material impact on our consolidated financial
statements.

In February 2016, the FASB issued an accounting standards update requiring lessees to record virtually all leases
on their balance sheets. The accounting standards update also requires expanded disclosures to help financial
statement users better understand the amount, timing and uncertainty of cash flows arising from leases. For
lessors, this amended guidance modifies the classification criteria and the accounting for sales-type and direct
financing leases. The change will be effective on a modified retrospective basis for fiscal years beginning after
December 15, 2018, and interim periods within those years, with early adoption permitted. We are currently
internal controls and
evaluating the impact of this standard on our financial statements and disclosures,
accounting policies. This evaluation process includes reviewing all forms of leases, performing a completeness
assessment over the lease population and analyzing the practical expedients in order to determine the best path of
implementing changes to existing processes and controls along with necessary system implementations. We
completed our system implementation evaluation during the fourth quarter of 2017, and concluded we will
implement a third-party supported lease accounting information system solution to account for our leases. We
have begun a project to implement this system and are currently collecting the necessary information on our lease
population, establishing a new lease accounting process and designing new internal controls for the new process.
We do not plan to early adopt the standard. We believe the impact will be material on the consolidated financial
statements as all leases will be recognized as a right of use asset and lease obligation. Based on results of our
evaluation process to date, we also believe the impact on our existing processes, controls and information
systems may be material.

In January 2016, the FASB issued an accounting standards update requiring unconsolidated equity investments,
not accounted for under the equity method, to be measured at fair value with changes in fair value recognized in
net
income. The accounting standards update also amends the presentation and disclosure of financial
instruments. The changes are effective for fiscal years and interim periods within those fiscal years beginning
after December 15, 2017. We do not expect application of this accounting standards update to have a material
impact on our consolidated financial statements.

In May 2014, the FASB issued an accounting standards update for revenue recognition for contracts with
customers. The guidance in the accounting standards update states that revenue is recognized when a customer
obtains control of a good or service. Recognition of the revenue will involve a multiple step approach including
identifying the contract, identifying the separate performance obligations, determining the transaction price,
allocating the price to the performance obligations and recognizing the revenue as the obligations are satisfied.
Additional disclosures will be required to provide adequate information to understand the nature, amount, timing
and uncertainty of reported revenues and revenues expected to be recognized. We completed the evaluation of
the impact of this standard on our financial statements and disclosures, internal controls and accounting policies
in the fourth quarter of 2017. We will adopt the standard effective January 1, 2018, using the modified
retrospective method, resulting in an immaterial cumulative effect adjustment as of the date of adoption. For
most contract types, we do not believe revenue recognition patterns will change materially. We do expect certain
provisions of the contracts in our Midstream segment to be presented on a gross revenue recognition basis as a
result of implementation. In addition, we expect to elect to change our presentation of consumer excise taxes
incurred concurrently with revenue producing transactions and collected on behalf of our customers from gross
to net upon the adoption of this accounting standards update. Based on the results of our evaluation process, we
do not expect our existing revenue recognition processes, controls and information systems to materially change.

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4. MPLX LP

MPLX is a diversified, growth-oriented publicly traded master limited partnership formed by us in 2012 to own,
operate, develop and acquire midstream energy infrastructure assets. On December 4, 2015, MPLX and
MarkWest Energy Partners, L.P. (“MarkWest”) completed a merger, whereby MarkWest became a wholly-
owned subsidiary of MPLX (the “MarkWest Merger”). MarkWest’s operations include: natural gas gathering,
processing and transportation; and NGL gathering, transportation, fractionation, storage and marketing. MPLX
owns or has an interest in a network of private and common carrier crude oil and product pipeline systems and
associated storage assets in the Midwest and Gulf Coast regions of the United States, a butane cavern in Neal,
West Virginia, and NGL storage caverns in Woodhaven, Michigan. MPLX owns an inland marine business,
comprised of tow boats and barges, which transport crude oil and refined products principally for MPC in the
Midwest and Gulf Coast regions of the United States. MPLX also owns a light-product terminal business, which
provides terminalling services principally for MPC in the Midwest and Southeast regions of the United States.

See Note 5 for information on MPLX’s acquisition of the Ozark pipeline, its investment in the Bakken Pipeline
system and the formation of a joint venture with Antero Midstream Partners LP (“Antero Midstream”) during the
first quarter of 2017.

As of December 31, 2017, we owned a 30.4 percent interest in MPLX, including a two percent general partner
interest. MPLX is a VIE because the limited partners of MPLX do not have substantive kick-out or substantive
participating rights over the general partner. We are the primary beneficiary of MPLX because in addition to our
significant economic interest, we also have the power, through our 100 percent ownership of the general partner,
to control the decisions that most significantly impact MPLX. We therefore consolidate MPLX and record a
noncontrolling interest for the 69.6 percent interest owned by the public. The components of our noncontrolling
interest consist of equity-based noncontrolling interest and redeemable noncontrolling interest. The redeemable
noncontrolling interest relates to MPLX’s preferred units, discussed below.

The creditors of MPLX do not have recourse to MPC’s general credit through guarantees or other financial
arrangements. The assets of MPLX are the property of MPLX and cannot be used to satisfy the obligations of
MPC. MPC has effectively guaranteed certain indebtedness of LOOP LLC (“LOOP”) and LOCAP LLC
(“LOCAP”), in which MPLX holds an interest. See Note 25 for more information.

Reorganization Transactions

On September 1, 2016, MPC, MPLX and various affiliates initiated a series of reorganization transactions in
order to simplify MPLX’s ownership structure and its financial and tax reporting. In connection with these
transactions, MPC contributed $225 million to MPLX and all of the issued and outstanding MPLX Class A
Units, all of which were held by MarkWest Hydrocarbon L.L.C. (“MarkWest Hydrocarbon”), a subsidiary of
MPLX, were exchanged for newly issued common units representing limited partner interests in MPLX. The
simple average of the NYSE closing price of MPLX common units for the 10 trading days preceding
September 1, 2016 was used for purposes of these transactions. As a result of these transactions, MPC increased
its ownership interest in MPLX by 7 million MPLX common units, or approximately 1 percent.

Private Placement of Preferred Units

On May 13, 2016, MPLX completed the private placement of approximately 30.8 million 6.5 percent Series A
Convertible Preferred Units (the “MPLX Preferred Units”) at a cash price of $32.50 per unit. The aggregate net
proceeds of approximately $984 million from the sale of the MPLX Preferred Units was used by MPLX for
capital expenditures, repayment of debt and general partnership purposes.

The MPLX Preferred Units rank senior to all MPLX common units with respect to distributions and rights upon
liquidation. The holders of the MPLX Preferred Units are entitled to receive quarterly distributions equal to

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$0.528125 per unit commencing for the quarter ended June 30, 2016, with a prorated amount from the date of
issuance. Following the second anniversary of the issuance of the MPLX Preferred Units, the holders of the
MPLX Preferred Units will receive as a distribution the greater of $0.528125 per unit or the amount of per unit
distributions paid to holders of MPLX common unitholders. The MPLX Preferred Units are convertible into
MPLX common units on a one for one basis after three years, at the purchasers’ option, and after four years at
MPLX’s option, subject to certain conditions.

The MPLX Preferred Units are considered redeemable securities due to the existence of redemption provisions
upon a deemed liquidation event which is considered outside MPLX’s control. Therefore, they are presented as
temporary equity in the mezzanine section of the consolidated balance sheets. We have recorded the MPLX
Preferred Units at their issuance date fair value, net of issuance costs. Since the MPLX Preferred Units are not
currently redeemable and not probable of becoming redeemable in the future, adjustment to the initial carrying
amount is not necessary and would only be required if it becomes probable that the security would become
redeemable.

Dropdowns to MPLX

On September 1, 2017, we contributed our joint-interest ownership in certain pipelines and storage facilities to
MPLX in exchange for total consideration of $1.05 billion. This consideration consisted of MPLX equity and
$420 million in cash. We received approximately 19 million MPLX common units and 378 thousand general
partner units from MPLX, which was determined by dividing $630 million by the simple average of the 10 day
trading volume weighted average NYSE price of an MPLX common unit for the 10 trading days ending at
market close on August 31, 2017, pursuant to a Membership Interests and Shares Contributions Agreement. We
also agreed to waive approximately two-thirds of the third quarter 2017 common unit distributions, IDRs and
general partner distributions with respect to the common units issued in this transaction. The contributions of
these assets were accounted for as transactions between entities under common control and we did not record a
gain or loss.

On March 1, 2017, we contributed certain terminal, pipeline and storage assets to MPLX in exchange total
consideration of $2.0 billion. This consideration consisted of MPLX equity and $1.5 billion in cash. We received
approximately 13 million common units and 264 thousand general partner units from MPLX, which was
determined by dividing $504 million by the simple average of the volume weighted average NYSE price of an
MPLX common unit for the 10 trading days preceding February 28, 2017, pursuant to a Membership Interests
Contributions Agreement. We also agreed to waive two-thirds of the first quarter 2017 common unit
distributions, IDRs and general partner distributions with respect to the common units issued in the transaction.
The contributions of these assets were accounted for as transactions between entities under common control and
we did not record a gain or loss.

On March 31, 2016, we contributed our inland marine business to MPLX in exchange for 23 million MPLX
common units and 460 thousand MPLX general partner units. The number of units we received from MPLX was
determined by dividing $600 million by the simple average of the volume weighted average NYSE price of an
MPLX common unit for the 10 trading days preceding March 14, 2016, pursuant to a Membership Interests
Contribution Agreement. We also agreed to waive first-quarter 2016 common unit distributions, IDRs and
general partner distributions with respect to the common units issued in this transaction. The contribution of our
inland marine business was accounted for as a transaction between entities under common control and therefore,
we did not record a gain or loss.

On December 4, 2015, we sold our remaining 0.5 percent interest in Pipe Line Holdings to MPLX for
$12 million. As a result, MPLX now owns 100 percent of Pipe Line Holdings.

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 in control. We accounted for these sales as transactions between entities
under common control and did not record a gain or loss.

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Public Offerings

On February 10, 2017, MPLX completed a public offering of $1.25 billion aggregate principal amount
of 4.125 percent unsecured senior notes due March 2027 and $1.0 billion aggregate principal amount
of 5.200 percent unsecured senior notes due March 2047. MPLX used the net proceeds from this offering to fund
the $1.5 billion cash portion of the consideration MPLX paid MPC for the dropdown of assets on March 1, 2017,
as well as for general partnership purposes. See Note 19 for more information.

ATM Program

On August 4, 2016, MPLX entered into a Second Amended and Restated Distribution Agreement (the
“Distribution Agreement”) providing for at-the-market issuances of common units, in amounts, at prices and on
terms determined by market conditions and other factors at the time of the offerings (such at-the-market program,
referred to as the “ATM Program”). During 2017, MPLX issued an aggregate of 14 million MPLX common units
under the ATM Program, generating net proceeds of approximately $473 million. MPLX used the net proceeds
from sales under the ATM Program for general partnership purposes including repayment of debt and funding for
acquisitions, working capital requirements and capital expenditures

Noncontrolling Interest

As a result of equity transactions of MPLX, we are required to adjust non-controlling interest and additional
paid-in capital. Changes in MPC’s equity resulting from changes in its ownership interest in MPLX were as
follows:

(In millions)

Transfers (to) from noncontrolling interest

2017

2016

2015

Changes due to the issuance of MPLX LP common units to the public

(60)

1,532

Changes due to the issuance of MPLX LP common units and general partner units to

MPC

Net transfers (to) from noncontrolling interests

Tax impact

114

139

121

(29)

(118)

1,532

(404)

Increase (decrease) in MPC’s additional paid-in capital, net of tax

110

(57)

$ 1,128

Agreements

fee-based transportation,

terminal and storage services agreements with
We have various long-term,
MPLX. Under these agreements, MPLX provides transportation, terminal and storage services to us, and we
commit to provide MPLX with minimum quarterly throughput volumes on crude oil and refined products
systems and minimum storage volumes of crude oil, refined products and butane. We also have agreements with
MPLX which establish fees for operational and management services provided between us and MPLX and for
executive management services and certain general and administrative services provided by us to MPLX. These
transactions are eliminated in consolidation.

5. Acquisitions and Investments

Acquisition of Ozark Pipeline

On March 1, 2017, MPLX acquired the Ozark pipeline from Enbridge Pipelines (Ozark) LLC for approximately
$219 million, including purchase price adjustments made in the second quarter of 2017. Based on the fair value
of assets acquired and liabilities assumed at the acquisition date, the final purchase price was primarily allocated

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to property, plant and equipment. The Ozark pipeline is a 433-mile, 22-inch crude oil pipeline originating in
Cushing, Oklahoma, and terminating in Wood River, Illinois, capable of transporting approximately 230 mbpd.
We account for the Ozark pipeline within the Midstream segment.

The amounts of revenue and income from operations associated with the acquisition included in our consolidated
statements of income, since the March 1, 2017 acquisition date, are as follows:

(In millions)

Sales and other operating revenues (including consumer excise taxes)

Income from operations

2017

Assuming the acquisition of the Ozark pipeline had occurred on January 1, 2016, the consolidated pro forma
results would not have been materially different from reported results.

Investment in Pipeline Company

On February 15, 2017, MPLX closed on the previously announced transaction to acquire a partial, indirect equity
interest in the Dakota Access Pipeline (“DAPL”) and Energy Transfer Crude Oil Company Pipeline (“ETCOP”)
projects, collectively referred to as the Bakken Pipeline system, through a joint venture with Enbridge Energy
Partners L.P. (“Enbridge Energy Partners”). The Bakken Pipeline system is capable of transporting more
520 mbpd of crude oil from the Bakken/Three Forks production area in North Dakota to the Midwest through
Patoka, Illinois and ultimately to the Gulf Coast. MPLX contributed $500 million of the $2 billion purchase price
paid by the joint venture, MarEn Bakken Company LLC (“MarEn Bakken”), to acquire a 36.75 percent indirect
equity interest in the Bakken Pipeline system from Energy Transfer Partners, L.P. (“ETP”) and Sunoco Logistics
Partners, L.P. (“SXL”). MPLX holds, through a subsidiary, a 25 percent interest in MarEn Bakken, which
equates to an approximate 9.2 percent indirect equity interest in the Bakken Pipeline system. In connection with
this investment by MPLX, we have agreed to waive our right to receive IDRs of approximately $1.6 million per
quarter for twelve consecutive quarters beginning with distributions declared by MPLX in the first quarter of
2017 and paid to us in the second quarter, which has been prorated to $0.8 million from the acquisition date. This
waiver is no longer applicable as a result of the IDR exchange on February 1, 2018. We account for the
investment in MarEn Bakken as part of our Midstream segment using the equity method of accounting.

In connection with closing the transaction with ETP and SXL and the previous decision to indefinitely suspend
the Sandpiper project, Enbridge Energy Partners canceled MPC’s transportation services agreement with respect
to the Sandpiper pipeline and released MPC from paying any termination fee per that agreement. See Note 17 for
information regarding the impairment of our investment in the Sandpiper pipeline project.

Formation of Gathering and Processing Joint Venture

Effective January 1, 2017, MPLX and Antero Midstream formed a joint venture, Sherwood Midstream LLC
(“Sherwood Midstream”), to support the development of Antero Resources Corporation’s Marcellus Shale
acreage in West Virginia. MPLX has a 50 percent ownership interest in Sherwood Midstream. In connection with
this transaction, MPLX contributed certain gas processing plants currently under construction at the Sherwood
Complex with a fair value of approximately $134 million and cash of approximately $20 million. Antero
Midstream made an initial capital contribution of approximately $154 million.

Also effective January 1, 2017, MPLX converted all of its ownership interests in MarkWest Ohio Fractionation
Company, L.L.C. (“Ohio Fractionation”), a previously wholly-owned subsidiary, to Class A Interests and
amended its LLC Agreement to create Class B-3 Interests, which were sold to Sherwood Midstream for
$126 million in cash. The Class B-3 Interests provide Sherwood Midstream with the right to fractionation
revenue and the obligation to pay expenses related to 20 mbpd of capacity in the Hopedale 3 fractionator.

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Effective January 1, 2017, MPLX and Sherwood Midstream formed a joint venture, Sherwood Midstream
Holdings LLC (“Sherwood Midstream Holdings”), for the purpose of owning, operating and maintaining all of
the shared assets for the benefit of and use in the operation of the gas plants and other assets owned by Sherwood
Midstream and the gas plants and deethanization facilities owned by MPLX. MPLX contributed certain real
property, equipment and facilities with a fair value of approximately $209 million to Sherwood Midstream
Holdings in exchange for a 79 percent initial ownership interest. Sherwood Midstream contributed cash of
approximately $44 million to Sherwood Midstream Holdings in exchange for a 21 percent ownership interest.
MPLX has a 10.5 percent indirect interest in Sherwood Midstream Holdings through its ownership in Sherwood
Midstream. The net book value of the contributed assets was approximately $203 million. The contribution was
determined to be an in-substance sale of real estate. As such, MPLX only recognized a gain for the portion
attributable to Antero Midstream’s indirect interest of approximately $2 million.

We account for our direct interests in Sherwood Midstream and Sherwood Midstream Holdings as part of our
Midstream segment using the equity method of accounting. We continue to consolidate Ohio Fractionation and
have recognized a noncontrolling interest for Sherwood Midstream’s interest in that entity.

See Note 6 for additional information related to the investments in Sherwood Midstream, Ohio Fractionation and
Sherwood Midstream Holdings.

Formation of Travel Plaza Joint Venture

In the fourth quarter of 2016, Speedway and Pilot Flying J finalized the formation of a joint venture consisting of
travel plazas, primarily in the Southeast United States. The new entity, PFJ Southeast LLC (“PFJ Southeast”),
originally consisted of 41 existing locations contributed by Speedway and 82 locations contributed by Pilot
Flying J, all of which carry either the Pilot or Flying J brand and are operated by Pilot Flying J. We did not
recognize a gain on the $273 million non-cash contribution of our travel plazas to the joint venture since the
contribution was that of in-substance real estate. Our non-cash contribution consisted of $203 million of
property, plant and equipment, $62 million of goodwill and $8 million of inventory.

Marine Investments

We currently have indirect ownership interests in two ocean vessel joint ventures with Crowley Maritime
Corporation (“Crowley”), which were established to own and operate Jones Act vessels in petroleum product
service. We have invested a total of $189 million in these two ventures as described further below.

In September 2015, we acquired a 50 percent ownership interest in a joint venture, Crowley Ocean Partners LLC
(“Crowley Ocean Partners”), with Crowley. The joint venture owns and operates four new Jones Act product
tankers, three of which are leased to MPC. Two of the vessels were delivered in 2015 and the remaining two
were delivered in 2016. We contributed a total of $141 million for the four vessels.

In May 2016, MPC and Crowley formed a new ocean vessel joint venture, Crowley Coastal Partners LLC
(“Crowley Coastal Partners”), in which MPC has a 50 percent ownership interest. MPC and Crowley each
contributed their 50 percent ownership in Crowley Ocean Partners, discussed above, into Crowley Coastal
Partners. In addition, we contributed $48 million in cash and Crowley contributed its 100 percent ownership
interest in Crowley Blue Water Partners LLC (“Crowley Blue Water Partners”) to Crowley Coastal Partners.
Crowley Blue Water Partners is an entity that owns and operates three 750 Series ATB vessels that are leased to
MPC. We account for our 50 percent interest in Crowley Coastal Partners as part of our Midstream segment
using the equity method of accounting.

See Note 6 for information on Crowley Coastal Partners as a VIE and Note 25 for information on our conditional
guarantee of the indebtedness of Crowley Ocean Partners and Crowley Blue Water Partners.

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Merger with MarkWest Energy Partners, L.P.

On December 4, 2015, MPLX completed the MarkWest Merger. Each common unit of MarkWest issued and
outstanding immediately prior to the effective time of the MarkWest Merger was converted into a right to receive
1.09 common units of MPLX representing limited partner interests in MPLX, plus a one-time cash payment of
$6.20 per unit. We contributed approximately $1.28 billion of cash to MPLX to pay the aggregate cash
consideration to MarkWest unitholders, without receiving any new equity from MPLX in exchange. At closing,
we made a payment of $1.23 billion to MarkWest common unitholders and the remaining $50 million was paid
in equal amounts, the first $25 million was paid in July 2016 and the second $25 million was paid in July 2017,
in connection with the conversion of the MPLX Class B Units to MPLX common units. Our financial results and
operating statistics reflect the results of MarkWest from the date of the MarkWest Merger.

The components of the fair value of consideration transferred are as follows:

(In millions)

Fair value of MPLX units issued

Cash payment to MarkWest unitholders

Payable to MarkWest Class B unitholders

Total fair value of consideration transferred

7,326

1,230

8,606

The net fair value of the assets acquired and liabilities assumed in connection with the MarkWest Merger was
less than the fair value of the total consideration resulting in the recognition of $2.21 billion of goodwill in three
reporting units within our Midstream segment, substantially all of which is not deductible for tax purposes.
Goodwill represents the complimentary aspects of the highly diverse asset base of MarkWest and MPLX that
will provide significant additional opportunities across the hydrocarbon value chain.

As further discussed in Note 16, we recorded a goodwill impairment charge of $129 million based on the implied
fair value of goodwill as of the interim impairment analysis in the first quarter of 2016. During the second quarter
of 2016, we finalized the analysis of the purchase price allocation. The completion of the purchase price
allocation resulted in an additional $1 million of impairment expense, as more fully discussed in Note 16.

We recognized $36 million of transaction costs related to the MarkWest Merger. These costs were expensed and
$30 million is included in selling, general and administrative expenses and $6 million is in net interest and other
financial income (costs).

The amounts of revenue and income from operations associated with the MarkWest Merger included in our
consolidated statements of income for 2015 are as follows:

(In millions)

Sales and other operating revenues (including consumer excise taxes)

Income from operations

2015

120

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Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presents consolidated results assuming the MarkWest
Merger occurred on January 1, 2014.

(In millions, except per share data)

Sales and other operating revenues (including consumer excise taxes)

Net income attributable to MPC

Net income attributable to MPC per share – basic

Net income attributable to MPC per share – diluted

2015

73,760

2,825

5.25

5.21

The unaudited pro forma financial information includes adjustments to align accounting policies, increased
depreciation expense to reflect the fair value of property, plant and equipment, increased amortization expense
related to identifiable intangible assets, adjustments to amortize the difference between the fair value and the
principal amount of the MarkWest debt assumed by MPLX, adjustments to reflect the change in our limited
partner interest in MPLX resulting from the MarkWest Merger, as well as the related income tax effects. The
unaudited pro forma financial information does not give effect to potential synergies that could result from the
transactions and is not necessarily indicative of the results of future operations.

6. Variable Interest Entities

In addition to MPLX, as described in Note 4, the following entities are also VIEs.

Crowley Coastal Partners

In May 2016, Crowley Coastal Partners was formed to own an interest in both Crowley Ocean Partners and
Crowley Blue Water Partners. We have determined that Crowley Coastal Partners is a VIE based on the terms of
the existing financing arrangements for Crowley Blue Water Partners and Crowley Ocean Partners and the
associated debt guarantees by MPC and Crowley. Our maximum exposure to loss at December 31, 2017 was
$486 million, which includes our equity method investment in Crowley Coastal Partners and the debt guarantees
provided to each of the lenders to Crowley Blue Water Partners and Crowley Ocean Partners. We are not the
primary beneficiary of this VIE because we do not have the power to control the activities that significantly
influence the economic outcomes of the entity and, therefore, do not consolidate the entity.

MarkWest Utica EMG

On January 1, 2012, MarkWest Utica Operating Company, LLC (“Utica Operating”), a wholly-owned and
consolidated subsidiary of MarkWest, and EMG Utica, LLC (“EMG Utica”) (together the “Members”), executed
agreements to form a joint venture, MarkWest Utica EMG LLC (“MarkWest Utica EMG”),
to develop
significant natural gas gathering, processing and NGL fractionation, transportation and marketing infrastructure
in eastern Ohio.

As of December 31, 2017, MarkWest had a 56 percent legal ownership interest in MarkWest Utica EMG.
MarkWest Utica EMG’s inability to fund its planned activities without subordinated financial support qualify it
as a VIE. Utica Operating is not deemed to be the primary beneficiary due to EMG Utica’s voting rights on
significant matters. We account for our ownership interest in MarkWest Utica EMG as an equity method
investment. MPLX receives engineering and construction and administrative management fee revenue and
reimbursement for other direct personnel costs for operating MarkWest Utica EMG. Our maximum exposure to
loss as a result of our involvement with MarkWest Utica EMG includes our equity investment, any additional
capital contribution commitments and any operating expenses incurred by the subsidiary operator in excess of
compensation received for the performance of the operating services. Our equity investment in MarkWest Utica
EMG at December 31, 2017 was $2.1 billion.

124

Ohio Gathering

Ohio Gathering Company, L.L.C. (“Ohio Gathering”) is a subsidiary of MarkWest Utica EMG and is engaged in
providing natural gas gathering services in the Utica Shale in eastern Ohio. Ohio Gathering is a joint venture
between MarkWest Utica EMG and Summit Midstream Partners, LLC. As of December 31, 2017, we had a 34
percent indirect ownership interest in Ohio Gathering. As this entity is a subsidiary of MarkWest Utica EMG,
which is accounted for as an equity method investment, MPLX reports its portion of Ohio Gathering’s net assets
as a component of its investment in MarkWest Utica EMG. MPLX receives engineering and construction and
administrative management fee revenue and reimbursement for other direct personnel costs for operating Ohio
Gathering.

Sherwood Midstream

As described in Note 5, MPLX and Antero Midstream formed a joint venture, Sherwood Midstream, to support
the development of Antero Resources Corporation’s Marcellus Shale acreage in West Virginia. As of
December 31, 2017, MPLX had a 50 percent ownership interest in Sherwood Midstream. Sherwood Midstream’s
inability to fund its planned activities without additional subordinated financial support qualify it as a VIE.
MPLX is not deemed to be the primary beneficiary, due to Antero Midstream’s voting rights on significant
matters. We account for our ownership interest in Sherwood Midstream using the equity method of accounting.
Our maximum exposure to loss as a result of our involvement with Sherwood Midstream includes our equity
investment, any additional capital contribution commitments and any operating expenses incurred by the
subsidiary operator in excess of compensation received for the performance of the operating services. Our equity
investment in Sherwood Midstream at December 31, 2017 was $236 million.

Ohio Fractionation

As described in Note 5, MPLX converted all of its ownership interests in Ohio Fractionation to Class A Interests
and amended its LLC Agreement to create Class B-3 Interests, which were sold to Sherwood Midstream,
providing it with the right to fractionation revenue and the obligation to pay expenses related to 20 mbpd of
capacity in the Hopedale 3 fractionator. Ohio Fractionation’s inability to fund its operations without additional
subordinated financial support qualify it as a VIE. MPLX has been deemed to be the primary beneficiary of Ohio
Fractionation because it has control over decisions that could significantly impact its financial performance, and
as a result, consolidates Ohio Fractionation.

Sherwood Midstream Holdings

in addition to a 10.5 percent

As described in Note 5, MPLX and Sherwood Midstream entered into a joint venture, Sherwood Midstream
Holdings, for the purpose of owning, operating and maintaining all of the shared assets for the benefit of and use
in the operation of the gas plants and other assets owned by Sherwood Midstream and the gas plants and
deethanization facilities owned by MPLX. MPLX had an initial 79 percent direct ownership in Sherwood
Midstream Holdings,
through its ownership in Sherwood
Midstream. Sherwood Midstream Holdings’ inability to fund its operations without additional subordinated
financial support qualify it as a VIE. We account for our ownership interest in Sherwood Midstream Holdings
using the equity method of accounting as Sherwood Midstream is considered to be the general partner and
controls all decisions related to Sherwood Midstream Holdings. Our maximum exposure to loss as a result of our
involvement with Sherwood Midstream Holdings includes our equity investment, any additional capital
contribution commitments and any operating expenses incurred by the subsidiary operator in excess of
compensation received for the performance of the operating services. Our equity investment in Sherwood
Midstream Holdings at December 31, 2017 was $165 million.

indirect

interest

125

7. Related Party Transactions

Our related parties included:

• Crowley Blue Water Partners, in which we have a 50 percent indirect noncontrolling interest. Crowley

Blue Water Partners owns and operates three Jones Act ATB vessels.

• Crowley Ocean Partners, in which we have a 50 percent indirect noncontrolling interest. Crowley

Ocean Partners owns and operates Jones Act product tankers.

•

Illinois Extension Pipeline Company, LLC (“Illinois Extension Pipeline”),
in which we have a
35 percent noncontrolling interest. Illinois Extension Pipeline owns and operates the Southern Access
Extension (“SAX”) crude oil pipeline.

• LOCAP, in which we have a 59 percent noncontrolling interest. LOCAP owns and operates a crude oil

pipeline.

• LOOP, in which we have a 51 percent noncontrolling interest. LOOP owns and operates the only U.S.

deepwater crude oil port.

• MarkWest Utica EMG, in which we have a 56 percent noncontrolling interest. MarkWest Utica EMG
is engaged in natural gas processing and NGL fractionation, transportation and marketing in Ohio.

• Ohio Gathering, in which we have a 34 percent indirect noncontrolling interest. Ohio Gathering is a
subsidiary of MarkWest Utica EMG providing natural gas gathering service in the Utica Shale region
of eastern Ohio.

•

PFJ Southeast, in which we have a 29 percent noncontrolling interest. PFJ Southeast owns and operates
travel plazas primarily in the Southeast region of the United States.

Sherwood Midstream, in which we have a 50 percent noncontrolling interest. Sherwood Midstream
supports
the development of Antero Resources Corporation’s Marcellus Shale acreage in
West Virginia.

• The Andersons Albion Ethanol LLC (“TAAE”), in which we have a 45 percent noncontrolling interest,
The Andersons Clymers Ethanol LLC (“TACE”), in which we have a 61 percent noncontrolling
interest and The Andersons Marathon Ethanol LLC (“TAME”), in which we have a 67 percent
noncontrolling interest. These companies each own and operate 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.

Sales to related parties were as follows:

(In millions)

PFJ Southeast

Other equity method investees

Total

2017

2016

2015

619

629

Sales to related parties consists primarily of sales of refined products.

126

Other income from related parties, which is included in “Other income” on the accompanying consolidated
statements of income, were as follows:

(In millions)

MarkWest Utica EMG

Ohio Gathering

Sherwood Midstream

Other equity method investees

Total

2017

2016

2015

Other income from related parties consists primarily of fees received for operating transportation assets for our
related parties.

Purchases from related parties were as follows:

(In millions)

Crowley Blue Water Partners

Crowley Ocean Partners

Illinois Extension Pipeline

LOCAP

LOOP

TAAE

TACE

TAME

Other equity method investees

Total

2017

2016

2015

100

110

570

509

308

Related party purchases from Crowley Blue Water Partners and Crowley Ocean Partners consist of leasing
marine equipment primarily used to transport refined products. Related party purchases from Illinois Extension
Pipeline, LOCAP, LOOP and other equity method investees consist primarily 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 accompanying consolidated balance sheets, were as follows:

(In millions)

PFJ Southeast

Other equity method investees

Total

December 31,

2017

2016

The long-term receivable from related parties, which is included in “Other noncurrent assets” on the
accompanying consolidated balance sheet, was $1 million at December 31, 2017 and $1 million at December 31,
2016.

127

Payables to related parties, which are included in “Accounts payable” on the accompanying consolidated balance
sheets, were as follows:

(In millions)

Illinois Extension Pipeline

LOOP

MarkWest Utica EMG

Ohio Gathering

Sherwood Midstream

Other equity method investees

Total

Income per Common Share

December 31,

2017

2016

We compute basic earnings per share by dividing net income attributable to MPC by the weighted average
number of shares of common stock outstanding. The average number of shares of common stock and per share
amounts have been retroactively restated to reflect the two-for-one stock split completed in June 2015. 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 the presence of participating securities, we have calculated our earnings per
share using the two-class method.

(In millions, except per share data)

2017

2016

2015

Basic earnings per share:

Allocation of earnings:

Net income attributable to MPC

Income allocated to participating securities

3,432

1,174

2,852

Income available to common stockholders – basic

3,430

1,173

2,848

Weighted average common shares outstanding

Basic earnings per share

Diluted earnings per share:

Allocation of earnings:

507

528

538

6.76

2.22

5.29

Net income attributable to MPC

Income allocated to participating securities

3,432

1,174

2,852

Income available to common stockholders – diluted

3,430

1,173

2,848

Weighted average common shares outstanding

Effect of dilutive securities

Weighted average common shares, including dilutive effect

507

512

528

530

538

542

Diluted earnings per share

6.70

2.21

5.26

128

The following table summarizes the shares that were anti-dilutive, and therefore, were excluded from the diluted
share calculation.

(In millions)

2017

2016

2015

Shares issued under stock-based compensation plans

9. Equity

On May 31, 2017, our board of directors approved an additional $3.0 billion share repurchase authorization. This
authorization is in addition to its previous authorization, both of which have no expiration date.

As of December 31, 2017, we had $3.19 billion of remaining share repurchase authorizations from our board of
the repurchases, which could include open market
directors. We may utilize various methods to effect
repurchases, negotiated block transactions, accelerated share repurchases or open market solicitations for shares,
some of which may be affected 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.

Total share repurchases were as follows for the respective periods:

(In millions, except per share data)

Number of shares repurchased

Cash paid for shares repurchased

Average cost per share

10. Segment Information

2017

2016

2015

2,372

53.85

197

41.84

965

50.31

In the first quarter of 2017, we revised our segment reporting in connection with the contribution of certain
terminal, pipeline and storage assets to MPLX. The operating results for these assets are now reported in our
Midstream segment. Previously, they were reported as part of our Refining & Marketing segment. Comparable
prior period information has been recast to reflect our revised presentation. The results for the pipeline and
storage assets were recast effective January 1, 2015, and the results for the terminal assets were recast effective
April 1, 2016. Prior to these dates, these assets were not considered businesses and, therefore, there are no
financial results from which to recast segment results.

We have three reportable segments: Refining & Marketing; Speedway; and Midstream. Each of these segments is
organized and managed based upon the nature of the products and services it offers.

• Refining & Marketing – refines crude oil and other feedstocks at our six 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 pipeline and marine transportation,
terminal and storage services provided by our Midstream segment. We sell refined products to
wholesale marketing customers domestically and internationally, to buyers on the spot market, to our
Speedway segment and to independent entrepreneurs who operate Marathon® retail outlets.

•

Speedway – sells transportation fuels and convenience merchandise in retail markets in the Midwest,
East Coast and Southeast regions of the United States.

129

On December 4, 2015, MPLX completed a merger with MarkWest and its results are included in the Midstream
segment. Segment information for periods prior to the merger does not include amounts for these operations. See
Note 5.

income represents income from operations attributable to the reportable segments. Corporate
Segment
administrative expenses, except for those attributable to MPLX, and costs related to certain non-operating assets
are not allocated to the reportable segments. In addition, certain items that affect comparability (as determined by
the chief operating decision maker) are not allocated to the reportable segments.

(In millions)

Year Ended December 31, 2017

Revenues:

Third party

Intersegment(a)

Related party

Segment revenues

Segment income from operations

Income from equity method investments(b)

Depreciation and amortization(b)

Capital expenditures and investments(c)(d)

(In millions)

Year Ended December 31, 2016

Revenues:

Third party

Intersegment(a)

Related party

Segment revenues

Segment income from operations(e)

Income from equity method investments(b)

Depreciation and amortization(b)

Capital expenditures and investments(c)

Refining &
Marketing

Speedway

Midstream

Total

52,761

19,021

2,322

74,104

11,309

621

64,691

2,321

1,082

832

Refining &
Marketing

19,033

732

275

381

1,443

3,765

1,339

197

699

2,505

12,756

629

87,489

4,392

283

2,056

3,718

Speedway

Midstream

Total

43,167

18,282

1,828

63,277

10,589

53,817

1,357

1,063

1,054

1,262

18,286

3,090

734

273

303

$ 1,048

142

605

1,568

11,854

75,193

3,139

171

1,941

2,925

130

(In millions)

Year Ended December 31, 2015

Revenues:

Third party

Intersegment(a)

Related party

Segment revenues

Segment income from operations(e)(f)

Income from equity method investments

Depreciation and amortization(b)

Capital expenditures and investments(c)(g)

Refining &
Marketing

Speedway

Midstream

Total

52,168

19,690

12,024

64,198

3,997

1,052

1,045

19,693

673

254

501

187

930

1,117

463

144

14,545

72,045

12,957

85,008

5,133

1,450

16,091

(a) Management believes intersegment transactions were conducted under terms comparable to those with unaffiliated parties.

(b) Differences between segment totals and MPC totals represent amounts related to unallocated items and are included in “Items not

allocated to segments” in the reconciliation below.

(d)

(e)

(f)

(g)

In 2017, the Midstream segment includes $220 million for the acquisition of the Ozark pipeline and an investment of $500 million in
MarEn Bakken related to the Bakken Pipeline system. See Note 5.

In 2016, the Refining & Marketing and Speedway segments include an inventory LCM benefit of $345 million and $25 million,
respectively. In 2015, the Refining & Marketing and Speedway segments include an inventory LCM charge of $345 million and
$25 million, respectively.

Included in the Midstream segment for 2015 are $36 million of transaction costs related to the MarkWest Merger.

The Midstream segment includes $13.85 billion for the MarkWest Merger.

The following reconciles segment income from operations to income before income taxes as reported in the
consolidated statements of income:

(In millions)

Segment income from operations

Items not allocated to segments:

Corporate and other unallocated items(a)

Pension settlement expenses(b)

Litigation

Impairments(c)

Net interest and other financial income (costs)

Income before income taxes

2017

2016

2015

4,392

3,139

5,133

(365)

(52)

(29)

(625)

(268)

(7)

(486)

(556)

(293)

(4)

(144)

(318)

3,344

1,822

4,374

(b)

(c)

See Note 22 for further information.

2017 includes MPC’s share of gains related to the sale of assets remaining from the Sandpiper pipeline project. 2016 includes
impairments of goodwill and equity method investments. 2015 relates to the cancellation of the ROUX project at our Garyville refinery.
See Notes 16 and 17.

131

The following reconciles segment capital expenditures and investments to total capital expenditures:

(In millions)

Segment capital expenditures and investments

Less investments in equity method investees(a)

Plus items not allocated to segments:

Corporate and Other

Capitalized interest

Total capital expenditures(b)

2017

2016

2015

3,718

2,925

16,091

805

431

2,788

155

3,051

2,638

13,495

(a)

2017 includes an investment of $500 million in MarEn Bakken related to the Bakken Pipeline system. 2016 includes an adjustment of
$143 million to the fair value of equity method investments acquired in connection with the MarkWest Merger. 2015 includes
$2.46 billion related to the MarkWest Merger. See Note 5.

(b) Capital expenditures include changes in capital accruals. See Note 20 for a reconciliation of total capital expenditures to additions to

property, plant and equipment as reported in the consolidated statements of cash flows.

Revenues by product line were:

(In millions)

Refined products

Merchandise

Crude oil and refinery feedstocks

Service, transportation and other

2017

2016

2015

63,846

54,450

63,738

5,174

3,403

1,681

5,297

2,038

1,492

5,188

2,718

401

Sales and other operating revenues (including consumer excise taxes)

74,104

63,277

72,045

No single customer accounted for more than 10 percent of annual revenues for the years ended December 31,
2017, 2016 and 2015.

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.

Total assets by reportable segment were:

(In millions)

Refining & Marketing

Speedway

Midstream

Corporate and Other

Total consolidated assets

December 31,

2017

2016

17,537

17,601

5,563

19,937

6,010

5,426

18,516

2,870

49,047

44,413

132

11. Other Items

Net interest and other financial income (costs) was:

(In millions)

Interest income

Interest expense(a)

Interest capitalized

Loss on extinguishment of debt

Other financial costs(b)

2017

2016

2015

(688)

(27)

(602)

(24)

(325)

(5)

(31)

Net interest and other financial income (costs)

(625)

(556)

(318)

(a)

(b)

Includes $46 million, $44 million and $1 million for 2017, 2016 and 2015, respectively, for the amortization of the discount related to the
difference between the fair value and the principal amount of assumed MarkWest debt.
2015 includes $6 million of transaction costs related to the MarkWest Merger.

12.

Income Taxes

The TCJA was signed into law on December 22, 2017. The TCJA provided several key changes to U.S. tax law,
including a federal corporate tax rate of 21 percent replacing the current rate applicable to MPC of 35 percent.
MPC was required to calculate the effect of the TCJA on its deferred tax balances as of the enactment date. The
effect of the federal corporate income tax rate change reduced net deferred tax liabilities by $1.5 billion in 2017.
Any subsequent effect of a change in estimate affecting deferred taxes as of December 31, 2017 is expected to be
immaterial, but could have an impact on the effective tax rate due to the permanent nature of applying differing
tax rates to such a change in estimate.

Income tax provisions (benefits) were:

(In millions)

Current

Deferred

Total

Current

Deferred

Total

Current

Deferred

Total

2017

2016

2015

Federal

681

$ (1,270)

$ (589)

189

336

525

$ 1,210

134

$ 1,344

State and local

Foreign

Total

(6)

131

(2)

(1)

152

(9)

161

773

$ (1,233)

$ (460)

215

394

609

$ 1,372

134

$ 1,506

A reconciliation of the federal statutory income tax rate (35 percent) applied to income before income taxes to
the provision for income taxes follows:

Statutory rate applied to income before income taxes

35%

2017

2016

2015

State and local income taxes, net of federal income tax effects

Domestic manufacturing deduction

Noncontrolling interests

Biodiesel excise tax credit

TCJA legislation

Other

Provision for income taxes

133

(1)

(4)

(45)

(1)

(2)

(1)

(14)%

33%

34%

Deferred tax assets and liabilities resulted from the following:

(In millions)

Deferred tax assets:

Employee benefits

Environmental

Deferred revenue

Net operating loss carryforwards

Other

Total deferred tax assets

Deferred tax liabilities:

Property, plant and equipment

Inventories

Investments in subsidiaries and affiliates

Other

Total deferred tax liabilities

Net deferred tax liabilities

Net deferred tax liabilities were classified in the consolidated balance sheets as follows:

(In millions)

Assets:

Other noncurrent assets

Liabilities:

Deferred income taxes

Net deferred tax liabilities

December 31,

2017

2016

348

578

420

1,603

473

912

3,061

693

2,591

707

1,145

4,537

2,641

3,844

December 31,

2017

2016

2,654

3,861

2,641

3,844

Tax carryforwards – At December 31, 2017 and 2016, federal operating loss carryforwards were $5 million and
$18 million, respectively, which expire in 2022 through 2036. As of December 31, 2017 and 2016, state and local
operating loss carryforwards were $8 million, which expire in 2017 through 2036. The decrease in both the
federal and state loss carryforwards was due to the utilization of loss carryforwards made available to MPC as a
result of the reorganization transactions which simplified the MPLX ownership structure as discussed in Note 4.

Valuation allowances – As of December 31, 2017 and 2016, $11 million and $10 million of valuation allowances
have been recorded against foreign tax credits and state net operating losses due to the expectation that these
deferred tax assets are not likely to be realized.

MPC is continuously undergoing examination of its U.S. federal income tax returns by the Internal Revenue
Service (“IRS”). Since 2012, we have continued to participate in the Compliance Assurance Process (“CAP”).
CAP is a real-time audit of the U.S. Federal income tax return that allows the IRS, working in conjunction with
MPC, to determine tax return compliance with the U.S. Federal tax law prior to filing the return. This program
provides us with greater certainty about our tax liability for years under examination by the IRS.

134

IRS audits have been completed through the 2009 tax year. We believe adequate provision has been established
for potential tax in periods not closed to examination. Further, we are routinely involved in U.S. state income tax
audits. We believe all other audits will be resolved with the amounts provided for these liabilities. As of
December 31, 2017, our income tax returns remain subject
to examination in the following major tax
jurisdictions for the tax years indicated:

United States Federal

States

2010 - 2016

2008 - 2016

The following table summarizes the activity in unrecognized tax benefits:

(In millions)

January 1 balance

Additions for tax positions of prior years

Reductions for tax positions of prior years

Settlements

December 31 balance

2017

2016

2015

(1)

(10)

(1)

If the unrecognized tax benefits as of December 31, 2017 were recognized, $10 million would affect our effective
income tax rate. There were $10 million of uncertain tax positions as of December 31, 2017 for which it is
reasonably possible that the amount of unrecognized tax benefits would significantly decrease during the next
twelve months.

Prior to its spin-off on June 30, 2011, Marathon Petroleum Corporation was included in the Marathon Oil
Corporation (“Marathon Oil”) federal income tax returns for all applicable years. During the third quarter 2017,
Marathon Oil received a notice of Final Partnership Administrative Adjustment (“FPAA”) from the IRS for
taxable year 2010, relating to certain partnership transactions. Marathon Oil filed a U.S. Tax Court petition
disputing these adjustments during the fourth quarter of 2017. We received an FPAA for taxable years 2011-2014
for items resulting from the Marathon Oil IRS dispute discussed above. We filed a U.S. Tax Court petition in the
fourth quarter of 2017 for tax years 2011-2014 to dispute these corollary adjustments. We continue to believe
that the issue in dispute is more likely than not to be fully sustained and therefore, no liability has been accrued
for this matter.

Pursuant to our tax sharing agreement with Marathon Oil, the unrecognized tax benefits related to pre-spinoff
operations for which Marathon Oil was the taxpayer remain the responsibility of Marathon Oil and we have
indemnified Marathon Oil accordingly. See Note 25 for indemnification information.

Interest and penalties related to income taxes are recorded as part of the provision for income taxes. Such interest
and penalties were net expenses (benefits) of $3 million, $(5) million and $3 million in 2017, 2016 and 2015,
respectively. As of December 31, 2017 and 2016, $17 million and $13 million of interest and penalties were
accrued related to income taxes.

135

13.

Inventories

(In millions)

Crude oil and refinery feedstocks

Refined products

Materials and supplies

Merchandise

Total

December 31,

2017

2016

2,056

2,839

494

161

2,208

2,810

485

153

5,550

5,656

The LIFO method accounted for 90 percent and 91 percent of total inventory value at December 31, 2017 and
2016, respectively. Current acquisition costs of inventories were estimated to exceed the LIFO inventory value at
December 31, 2017 and 2016 by $1.21 billion and $308 million, respectively.

During 2017, we recorded LIFO liquidations caused primarily by permanently decreased levels in our crude oil
inventory. Cost of revenues increased and income from operations decreased by $7 million for the year ended
December 31, 2017 due to LIFO liquidations. There were no material liquidations of LIFO inventories in 2016.
During 2015, we recorded LIFO liquidations caused by permanently decreased levels in crude oil and refined
products inventory levels. Cost of revenues increased and income from operations decreased by $78 million for
the year ended December 31, 2015 due to these LIFO liquidations.

136

14. Equity Method Investments

(In millions)

Centennial

Centrahoma Processing LLC(a)

Crowley Coastal Partners

Explorer(a)

Illinois Extension Pipeline(a)

LOOP(b)

MarEn Bakken Company LLC(a)

MarkWest EMG Jefferson Dry Gas Gathering Company, L.L.C.(a)

MarkWest Utica EMG(a)

PFJ Southeast

Sherwood Midstream(a)

Sherwood Midstream Holdings LLC(a)(c)

TAAE

TACE

TAEI(d)

TAME(d)

Other MPLX investments(a)

Other

Total

Ownership as
of
December 31,
2017

Carrying value at
December 31,

2017

2016

50%

40%

50%

25%

35%

51%

25%

67%

56%

29%

50%

69%

45%

61%

67%

121

188

284

282

520

164

2,139

328

236

165

104

184

293

277

2,224

283

4,787

3,827

(a) Ownership interest held by MPLX as of December 31, 2017.
(b) MPLX held a 41 percent ownership interest as of December 31, 2017.
(c)

Excludes Sherwood Midstream LLC’s investment in Sherwood Midstream Holdings LLC.

(d) On January 1, 2017, we contributed our 34 percent interest in TAEI to TAME in exchange for a 17 percent in TAME.

Summarized financial information for equity method investees is as follows:

(In millions)

Income statement data:

Revenues and other income

Income (loss) from operations

Net income (loss)

Balance sheet data – December 31:

Current assets

Noncurrent assets

Current liabilities

Noncurrent liabilities

2017

2016

2015

6,235

2,421

1,390

1,075

922

(116)

(250)

332

239

860

711

10,854

547

1,714

8,170

884

1,462

As of December 31, 2017, the carrying value of our equity method investments was $1.17 billion higher than the
underlying net assets of investees. This basis difference is being amortized or accreted into net income over the
remaining estimated useful lives of the underlying net assets, except for $509 million of excess related to
goodwill and other assets.

137

Centennial experienced a significant reduction in shipment volumes in the second half of 2011 that has continued
through 2017. At December 31, 2017, Centennial was not shipping product. As a result, we continued to evaluate
the carrying value of our equity investment in Centennial. We concluded that no impairment was required given
our assessment of its fair value based on market participant assumptions for various potential uses and future
cash flows of Centennial’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 a future impairment of our Centennial interest. As of
December 31, 2017, our equity investment in Centennial was $35 million and we had a $25 million guarantee
associated with 50 percent of Centennial’s outstanding debt. See Note 25 for additional information on the debt
guarantee.

Dividends and partnership distributions received from equity method investees (excluding distributions that
represented a return of capital previously contributed) were $388 million, $291 million and $113 million in 2017,
2016 and 2015.

15. Property, Plant and Equipment

(In millions)

Refining & Marketing

Speedway

Midstream

Corporate and Other

Total

Less accumulated depreciation

Property, plant and equipment, net

Estimated
Useful Lives

December 31,

2017

2016(a)

4 - 30 years

19,490

18,590

4 - 25 years

3 - 49 years

4 - 40 years

5,358

14,898

792

40,538

14,095

5,078

13,521

817

38,006

12,241

26,443

25,765

(a)

Prior period balances have been recast in connection with the March 1, 2017 contribution of assets to MPLX. See Note 1 for additional
information.

Property, plant and equipment includes gross assets acquired under capital leases of $576 million and $505
million at December 31, 2017 and 2016, respectively, with related amounts in accumulated depreciation of $237
million and $202 million at December 31, 2017 and 2016. Property, plant and equipment includes construction in
progress of $2.20 billion and $2.02 billion at December 31, 2017 and 2016, respectively, which primarily relates
to capital projects at our refineries and midstream facilities.

16. Goodwill and Intangibles

Goodwill

Goodwill is tested for impairment on an annual basis and when events or changes in circumstances indicate the
fair value of a reporting unit with goodwill has been reduced below the carrying value of the net assets of the
reporting unit. In 2017, no impairment was required based on our annual test. In 2016, we recorded an
impairment of goodwill as outlined below based on an interim impairment analysis.

During the first quarter of 2016, MPLX, our consolidated subsidiary, determined that an interim impairment
analysis of the goodwill recorded in connection with the MarkWest Merger was necessary based on consideration
of a number of first quarter events and circumstances,
including i) continued deterioration of near-term
commodity prices as well as longer term pricing trends, ii) recent guidance on reductions to forecasted capital
spending, the slowing of drilling activity and the resulting reduced production growth forecasts released or
communicated by MPLX’s producer customers and iii) increases in the cost of capital. The combination of these

138

factors was considered to be a triggering event requiring an interim impairment test. Based on the first step of the
interim goodwill impairment analysis, the fair value for three of the reporting units to which goodwill was
assigned in connection with the MarkWest Merger was less than their respective carrying value. In step two of
the impairment analysis, the implied fair values of the goodwill were compared to the carrying values within
those reporting units. Based on this assessment, it was determined that goodwill was impaired in two of the
reporting units. Accordingly, MPLX recorded an impairment charge of approximately $129 million in the first
quarter of 2016. In the second quarter of 2016, MPLX completed its purchase price allocation, which resulted in
an additional $1 million of impairment expense that would have been recorded in the first quarter of 2016 had the
purchase price allocation been completed as of that date. This adjustment to the impairment expense was the
result of completing an evaluation of the deferred tax liabilities associated with the MarkWest Merger and their
impact on the resulting goodwill that was recognized.

The fair value of the reporting units for the 2016 interim goodwill impairment analysis was determined based on
applying the discounted cash flow method, which is an income approach, and the guideline public company
method, which is a market approach. The discounted cash flow fair value estimate was based on known or
knowable information at the interim measurement date. The significant assumptions that were used to develop
the estimates of the fair values under the discounted cash flow method include management’s best estimates of
the expected future results and discount rates, which ranged from 10.5 percent to 11.5 percent. Fair value
determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors.
As a result, there can be no assurance that the estimates and assumptions made for purposes of the 2016 interim
goodwill impairment test will prove to be an accurate prediction of the future.

The changes in the carrying amount of goodwill for 2016 and 2017 were as follows:

(In millions)

Balance at January 1, 2016

Purchase price allocation adjustments
Disposition(a)
Impairment
Transfer of assets related to dropdowns(b)

Balance at December 31, 2016

Disposition(a)

Balance at December 31, 2017

Refining &
Marketing

Speedway

Midstream

Total

539
-
-
-
(20)

519
-
519

853
-
(61)
-
-

792
(1)
791

2,627
(241)
-
(130)
20

2,276
-
2,276

4,019
(241)
(61)
(130)
-

3,587
(1)
3,586

(a) Goodwill associated with our former Speedway travel plaza locations that are now part of the PFJ Southeast joint venture. The amount

was included in the initial basis for our equity method investment in the joint venture.

(b)

Prior period balances have been recast in connection with the March 1, 2017 contribution of assets to MPLX. See Note 1 for additional
information.

139

Intangible Assets

Our intangible assets as of December 31, 2017 and 2016 are as follows:

(In millions)

Balance at December 31, 2017

Refining &
Marketing

Speedway

Midstream

Total

Customer contracts and relationships

120

Royalty agreements

Favorable lease contract terms

Other(a)

Gross

Accumulated amortization

Net

Balance at December 31, 2016

Customer contracts and relationships

Royalty agreements

Favorable lease contract terms

Other(a)

Gross

Accumulated amortization

Net

129

322

(143)

179

102

128

258

(123)

135

533

654

129

148

132

$ 533

$ 987

(39)

133

(35)

(79)

(261)

$ 454

$ 726

533

636

128

102

$ 533

$ 924

(41)

(199)

$ 492

$ 725

(a)

The Refining & Marketing and Speedway segments include unamortized intangible assets of $48 million and $46 million, respectively,
which are primarily emission allowance credits and trademarks.

In December 2017, we accepted non-cash consideration as part of a litigation settlement agreement. The non-
cash consideration consisted of emission allowance credits with an estimated fair value of $45 million. The
emission allowance credits received in the settlement are classified as indefinite lived intangible assets, but can
become finite lived intangible assets once retired and assigned to a permit for a capital project. The fair value was
determined using an income approach and is classified as Level 3.

Amortization expense for 2017 and 2016 was $52 million and $55 million, respectively. Estimated future
amortization expense related to the intangible assets at December 31, 2017 is as follows:

(In millions)

2018

2019

2020

2021

2022

140

17. Fair Value Measurements

Fair Values – Recurring

The following tables present assets and liabilities accounted for at fair value on a recurring basis as of
December 31, 2017 and 2016 by fair value hierarchy level. We have elected to offset the fair value amounts
recognized for multiple derivative contracts executed with the same counterparty, including any related cash
collateral as shown below; however, fair value amounts by hierarchy level are presented on a gross basis in the
following tables.

(In millions)

Commodity derivative instruments,

assets

Other assets

Total assets at fair value

Commodity derivative instruments,

liabilities

Embedded derivatives in commodity

contracts(c)

Total liabilities at fair value

126

Fair Value Hierarchy
Level 2

Level 3

Level 1

December 31, 2017

Netting and
Collateral(a)

Net Carrying
Value on
Balance Sheet(b)

Collateral
Pledged Not
Offset

127

130

126

(118)

N/A

(118)

(126)

Fair Value Hierarchy
Level 2

Level 1

Level 3

December 31, 2016

Netting and
Collateral(a)

Net Carrying
Value on
Balance Sheet(b)

Collateral
Pledged Not
Offset

(In millions)

Commodity derivative instruments, assets

Other assets

Total assets at fair value

Commodity derivative instruments,

liabilities

Embedded derivatives in commodity

contracts(c)

Contingent consideration, liability(d)

688

690

712

Total liabilities at fair value

712

130

190

(688)

N/A

(688)

(712)

N/A

(712)

130

190

126

(a) Represents the impact of netting assets, liabilities and cash collateral when a legal right of offset exists. As of December 31, 2017, cash
collateral of $8 million was netted with mark-to-market derivative liabilities. As of December 31, 2016, cash collateral of $24 million
was netted with mark-to-market derivative liabilities.

(b) We have no derivative contracts which are subject to master netting arrangements reflected gross on the balance sheet.
(c)

Includes $12 million and $13 million classified as current as of December 31, 2017 and 2016, respectively.
Includes $130 million classified as current as of December 31, 2016.

(d)

Commodity derivatives in Level 1 are exchange-traded contracts for crude oil and refined products measured at
fair value with a market approach using the close-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 as Level 1 in the fair value hierarchy.

141

Level 3 instruments include OTC NGL contracts and embedded derivatives in commodity contracts. The
embedded derivative liability relates to a natural gas purchase agreement embedded in a keep-whole processing
agreement. The fair value calculation for these Level 3 instruments at December 31, 2017 used significant
unobservable inputs including: (1) NGL prices interpolated and extrapolated due to inactive markets ranging
from $0.24 to $1.45 per gallon and (2) the probability of renewal of 60 percent for the first five-year term and 80
percent for the second five-year term of the gas purchase agreement and the related keep-whole processing
agreement. For these contracts, increases in forward NGL prices result in a decrease in the fair value of the
derivative assets and an increase in the fair value of the derivative liabilities. The forward prices for the
individual NGL products generally increase or decrease in a positive correlation with one another. Increases or
decreases in forward NGL prices result in an increase or decrease in the fair value of the embedded derivative.
An increase in the probability of renewal would result in an increase in the fair value of the related embedded
derivative liability.

The contingent consideration as of December 31, 2016 represents the fair value of the remaining amount we
expected to pay to BP related to the earnout provision associated with our 2013 acquisition of BP’s refinery in
Texas City, Texas and related logistics and marketing assets. The fair value of the remaining contingent
consideration as of December 31, 2016 was estimated using an income approach and is therefore a Level 3
liability. The fair value calculation used significant unobservable inputs including: (1) an estimate of forecasted
monthly refinery throughput volumes; (2) an internal and external monthly crack spread forecast; and (3) a range
of risk-adjusted discount rates. The fair value of the contingent consideration liability was reassessed each
quarter, with changes in fair value recorded in cost of revenues. The final contingent consideration payment was
calculated using actual crack spread and refinery throughput data resulting in a value of $131 million when
capped by the maximum total payout of $700 million. The balance of $131 million was paid on April 12, 2017.

The following is a reconciliation of the net beginning and ending balances recorded for net assets and liabilities
classified as Level 3 in the fair value hierarchy.

(In millions)

Beginning balance

Contingent consideration payment(a)

Net derivative positions assumed—MarkWest Merger

Unrealized and realized losses included in net income

Settlements of derivative instruments

Ending balance

The amount of total (gains) losses for the period included in earnings

attributable to the change in unrealized (gains) losses relating to assets still
held at the end of period:

Derivative instruments

Contingent consideration agreement

Total

2017

2016

2015

190

342

478

(131)

(200)

(189)

(18)

(7)

190

342

(7)

(a) On the consolidated statements of cash flows for 2017, 2016, and 2015, $89 million, $164 million and $175 million, respectively, of the

contingent earnout payment to BP was included as a financing activity with the remainder included as an operating activity.

See Note 18 for the income statement impacts of our derivative instruments.

142

Fair Values – Nonrecurring

The following table shows the values of assets, by major category, measured at fair value on a nonrecurring basis
in periods subsequent to their initial recognition.

Year Ended December 31,

2017

2016

2015

(In millions)

Fair Value

Impairment Fair Value

Impairment

Equity method investments

Goodwill

Property, plant and equipment, net

356

130

144

During the third quarter of 2016, Enbridge Energy Partners announced that its affiliate, North Dakota Pipeline,
would withdraw certain pending regulatory applications for the Sandpiper pipeline project and that the project
would be deferred indefinitely. These decisions were considered to indicate an impairment of the costs
capitalized to date on the project. As the operator of North Dakota Pipeline and the entity responsible for
maintaining its financial records, Enbridge completed a fixed asset impairment analysis as of August 31, 2016, in
accordance with ASC Topic 360. Based on the estimated liquidation value of the fixed assets, an impairment
charge was recorded by North Dakota Pipeline. Based on our 37.5 percent ownership of North Dakota Pipeline,
we recognized approximately $267 million of this charge in the third quarter of 2016 through “Income (loss)
from equity method investments” on the accompanying consolidated statements of income, which impaired
virtually all of our $301 million investment in the project. Also, in accordance with ASC Topic 323, we
completed an assessment to determine any additional equity method impairment charge to be recorded on our
consolidated financial statements resulting from an other-than-temporary impairment. The result of this analysis
indicated no additional charge was required to be recorded.

The fixed assets of North Dakota Pipeline related to the Sandpiper pipeline project consist primarily of project
management and engineering costs, pipe, valves, motors and other equipment, land and easements. The fair value
of fixed assets was estimated based on a market approach using the estimated price that would be received to sell
pipe, land and other related equipment in its current condition, considering the current market conditions for sale
of these assets and length of disposal period. The valuation considered a range of potential selling prices from
various alternatives that could be used to dispose of these assets. As such, the fair value of the North Dakota
Pipeline equity method investment and its underlying assets represents a Level 3 measurement. As a result, actual
results may differ from the estimates and assumptions made for purposes of this impairment analysis. North
Dakota Pipeline is in the process of disposing of these assets.

During the second quarter of 2016, forecasts for Ohio Condensate, an equity method investment, were reduced in
line with updated forecasts for customer requirements. As the operator of that entity responsible for maintaining
its financial records, we completed a fixed asset impairment analysis as of June 30, 2016, in accordance with
ASC Topic 360, to determine the potential fixed asset impairment charge. The resulting fixed asset impairment
charge recorded within Ohio Condensate’s financial statements was $96 million. Based on our 60 percent
ownership of Ohio Condensate, approximately $58 million was recorded in the second quarter of 2016 in
“Income (loss) from equity method investments” on the accompanying consolidated statements of income.

Our investment in Ohio Condensate, which was established at fair value in connection with the MarkWest
Merger, exceeded its proportionate share of the underlying net assets. Therefore, in conjunction with the ASC
Topic 360 impairment analysis, we completed an equity method impairment analysis in accordance with ASC
Topic 323 to determine the potential additional equity method impairment charge to be recorded on our
consolidated financial statements resulting from an other-than-temporary impairment. As a result, an additional
impairment charge of approximately $31 million was recorded in the second quarter of 2016 in “Income (loss)
from equity method investments” on the accompanying consolidated statements of income, which eliminated the
basis differential established in connection with the MarkWest Merger.

143

The fair value of Ohio Condensate and its underlying assets was determined based upon applying the discounted
cash flow method, which is an income approach, and the guideline public company method, which is a market
approach. The discounted cash flow fair value estimate is based on known or knowable information at the interim
measurement date. The significant assumptions that were used to develop the estimate of the fair value under the
discounted cash flow method include management’s best estimates of the expected future results using a
probability weighted average set of cash flow forecasts and a discount rate of 11.2 percent. Fair value
determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors.
As such, the fair value of the Ohio Condensate equity method investment and its underlying assets represents a
Level 3 measurement. As a result, actual results may differ from the estimates and assumptions made for
purposes of this impairment analysis.

See Note 16 for additional information on the goodwill impairment.

In the third quarter of 2015, we decided to cancel the ROUX project at our Garyville refinery. The work
completed on the project through September 30, 2015 had no alternate use or net salvage value; therefore, we
fully impaired the $144 million of cost capitalized for the project through that date. The fair value of our
investment in the project was determined using an income approach and is classified as Level 3.

Fair Values – Reported

The following table summarizes financial instruments on the basis of their nature, characteristics and risk at
December 31, 2017 and 2016, excluding the derivative financial instruments and contingent consideration
reported above.

(In millions)

Financial assets:

Investments

Other

Total financial assets

Financial liabilities:

Long-term debt(a)

December 31,

2017

2016

Fair Value

Carrying
Value

Fair Value

Carrying
Value

13,893

12,642

10,892

10,297

Deferred credits and other liabilities

122

109

121

109

Total financial liabilities

14,015

12,751

11,013

10,406

(a)

Excludes capital leases and debt issuance costs, however, includes amount classified as debt due within one year.

Our current assets and liabilities include financial instruments, the most significant of which are trade accounts
receivable and payables. We believe the carrying 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 bad debt 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 other liabilities are measured primarily using an income approach and
most inputs are internally generated, which results in a Level 3 classification. Estimated future cash flows are
discounted using a rate deemed appropriate to obtain the fair value. Other financial assets primarily consist of

144

environmental remediation receivables. Deferred credits and other liabilities primarily consist of a liability
resulting from a financing arrangement for the construction of MPLX’s steam methane reformer (“SMR”) at the
Javelina gas processing and fractionation complex in Corpus Christi, Texas,
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
for our debt from major financial institutions and a third-party valuation service. Because these quotes cannot be
independently verified to the market, they are considered Level 3 inputs. Fair value of variable-rate long-term
debt approximates the carrying value.

18. Derivatives

For further information regarding the fair value measurement of derivative instruments, including any effect of
master netting agreements or collateral, see Note 17. 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 derivative instruments as hedges for
accounting purposes.

The following table presents the gross fair values of derivative instruments, excluding cash collateral, and where
they appear on the consolidated balance sheets as of December 31, 2017 and 2016:

(In millions)

Balance Sheet Location

Commodity derivatives

Other current assets

Other current liabilities(a)

Deferred credits and other liabilities(a)

(In millions)

Balance Sheet Location

Commodity derivatives

Other current assets

Other current liabilities(a)

Deferred credits and other liabilities(a)

(a)

Includes embedded derivatives.

December 31, 2017

Asset

Liability

127

126

December 31, 2016

Asset

Liability

688

712

Derivatives not Designated as Accounting Hedges

Derivatives that are not designated as accounting hedges may include commodity derivatives used to hedge price
risk on (1) inventories, (2) fixed price sales of refined products, (3) the acquisition of foreign-sourced crude oil,
(4) the acquisition of ethanol for blending with refined products, (5) sale of NGLs and (6) the purchase of natural
gas.

145

The table below summarizes open commodity derivative contracts for crude oil and refined products as of
December 31, 2017.

Crude Oil(a)

Exchange-traded

(a)

99.8 percent of the exchange-traded contracts expire in the first quarter of 2018.

Refined Products(a)

Exchange-traded

OTC

Position

Total Barrels
(In thousands)

Long

Short

23,299

(25,199)

Position

Total Gallons
(In thousands)

Long

Short

257,460

(236,460)

(9,587)

(a)

100 percent of the exchange-traded contracts expire in the first quarter of 2018.

The following table summarizes the effect of all commodity derivative instruments in our consolidated
statements of income:

(In millions)

Income Statement Location

Sales and other operating revenues

Cost of revenues

Total

Gain (Loss)

2017

2016

2015

(26)

(21)

(13)

(167)

(180)

294

313

146

19. Debt

Our outstanding borrowings at December 31, 2017 and 2016 consisted of the following:

(In millions)

Marathon Petroleum Corporation:

Commercial paper

364-day bank revolving credit facility due July 2018

Trade receivables securitization facility due July 2019

Bank revolving credit facility due 2022

Term loan agreement due 2019

Senior notes, 2.700% due December 2018

Senior notes, 3.400% due December 2020

Senior notes, 5.125% due March 2021

Senior notes, 3.625%, due September 2024

Senior notes, 6.500%, due March 2041

Senior notes, 4.750%, due September 2044

Senior notes, 5.850% due December 2045

Senior notes, 5.000%, due September 2054

Capital lease obligations due 2018-2033

MPLX LP:

MPLX term loan facility due 2019

MPLX bank revolving credit facility due 2022

MPLX senior notes, 5.500%, due February 2023

MPLX senior notes, 4.500%, due July 2023

MPLX senior notes, 4.875%, due December 2024

MPLX senior notes, 4.000%, due February 2025

MPLX senior notes, 4.875%, due June 2025

MarkWest senior notes, 4.500% – 5.500%, due 2023 – 2025

MPLX senior notes, 4.125%, due March 2027

MPLX senior notes, 5.200%, due March 2047

MPLX capital lease obligations due 2020

Total

Unamortized debt issuance costs

Unamortized discount(a)

Amounts due within one year

Total long-term debt due after one year

December 31,

2017

2016

600

650

1,000

750

1,250

800

250

400

356

505

710

989

1,149

500

1,189

1,250

1,000

200

600

650

1,000

750

1,250

800

250

400

311

250

710

989

1,149

500

1,189

13,418

11,069

(59)

(413)

(624)

(44)

(453)

(28)

12,322

10,544

(a)

Includes $374 million and $420 million unamortized discount as of December 31, 2017 and December 31, 2016, respectively, related to
the difference at the time of the acquisition between the fair value and the principal amount of assumed MarkWest debt.

147

The following table shows five years of scheduled debt payments.

(In millions)

2018

2019

2020

2021

2022

626

683

1,031

537

Commercial Paper

On February 26, 2016, we established a commercial paper program that allows us to have a maximum of
$2 billion in commercial paper outstanding, with maturities up to 397 days from the date of issuance. We do not
intend to have outstanding commercial paper borrowings in excess of available capacity under our bank
revolving credit facilities. During 2017, we borrowed and repaid $300 million under the commercial paper
program. At December 31, 2017, we had no amounts outstanding under the commercial paper program.

MPC Revolving Credit Agreements

On July 21, 2017, we entered into credit agreements with a syndicate of lenders to replace our previous
$2.5 billion four-year revolving credit facility due in 2020 and our previous $1 billion 364-day credit agreement,
dated as of July 20, 2016, which expired on July 19, 2017. The new agreements provide for a five-year
$2.5 billion bank revolving credit agreement (“MPC five-year credit agreement”) that expires in July 2022 and a
364-day $1 billion bank revolving credit agreement (“MPC 364-day credit agreement” and together with the
MPC five-year credit agreement, the “MPC credit agreements”) that expires in July 2018.

Under the MPC five-year credit agreement, we have an option to increase the aggregate commitments by up to an
additional $500 million, subject to, among other conditions, the consent of the lenders whose commitments
would be increased. In addition, we may request up to two one-year extensions of the maturity date of the MPC
five-year revolving credit agreement subject to, among other conditions, the consent of lenders holding a
majority of the commitments, provided that the commitments of any non-consenting lenders will terminate on the
then-effective maturity date. The MPC five-year revolving credit agreement includes sub-facilities for swingline
loans of up to $100 million and letters of credit of up to $1.8 billion, subject to the agreement of one of more of
the lenders to increase their issuing commitments thereunder.

Borrowings under the MPC credit agreements bear interest, at our election, at either the Adjusted LIBO Rate or
the Alternate Base Rate (both as defined in the MPC credit agreements), plus an applicable margin. We are
charged various fees and expenses under the MPC credit agreements, including administrative agent fees,
commitment fees on the unused portion of the commitments and fees related to issued and outstanding letters of
credit. The applicable margin to the benchmark interest rates and the commitment fees payable under the MPC
credit agreements fluctuate from time-to-time based on our credit ratings.

The MPC credit agreements contain certain representations and warranties, affirmative and restrictive covenants
and events of default that we consider to be usual and customary for arrangements of this type, including a
financial covenant that requires us to maintain a ratio of Consolidated Net Debt to Total Capitalization (each as
defined in the MPC credit agreements) of no greater than 0.65 to 1.00 as of the last day of each fiscal quarter.
Other covenants, among other things, restrict our ability and/or the ability of certain of our subsidiaries to incur
debt, create liens on assets or enter into transactions with affiliates. As of December 31, 2017, we were in
compliance with the covenants contained in the MPC credit agreements.

There were no borrowings or letters of credit outstanding at December 31, 2017.

148

Trade Receivables Securitization Facility

On December 18, 2013, we entered into a trade receivables securitization facility (“trade receivables facility”)
with a group of committed purchasers and letter of credit issuers evidenced by a receivables purchase agreement
and receivables sales agreement. On July 20, 2016, we amended our trade receivables securitization facility to,
among other things, reduce the capacity from $1 billion to $750 million and to extend the maturity date to
July 19, 2019. The reduction in capacity reflected the lower refined product price environment.

The trade receivables facility consists of one of our wholly-owned subsidiaries, Marathon Petroleum Company
LP (“MPC LP”), selling or contributing on an on-going basis all of 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 purpose subsidiary, MPC Trade Receivables Company LLC (“TRC”), in
exchange for a combination of cash, equity and/or a subordinated note issued by TRC to MPC LP. TRC, in turn,
has the ability to sell undivided ownership interests in qualifying trade receivables, together with all related
security and interests in the proceeds thereof, without recourse, to the purchasing group in exchange for cash
proceeds. The trade receivables facility also provides for the issuance of letters of credit up to $750 million,
provided that the aggregate credit exposure of the purchasing group, including outstanding letters of credit, may
not exceed the lesser of $750 million or the balance of our eligible trade receivables 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 our consolidated financial statements solely as a result of the consolidation
of the financial statements of TRC with those of MPC. The receivables sold or contributed 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 trade
receivables facility are reflected as debt on our consolidated balance sheet. We remain responsible for servicing
the receivables sold to the purchasing group. TRC pays floating-rate interest charges and usage fees on amounts
outstanding under the trade receivables facility, if any, unused fees on the portion of unused commitments and
certain other fees related to the administration of the facility and letters of credit that are issued and outstanding
under the trade receivables facility.

The receivables purchase agreement and receivables sale agreement contain representations and covenants that
we consider usual and customary for arrangements of this type. Trade receivables are subject to customary
criteria, limits and reserves before being deemed to qualify for sale by TRC pursuant to the trade receivables
facility. In addition, further purchases of qualified trade receivables under the trade receivables facility are
subject to termination, and TRC may be subject to default fees, upon the occurrence of certain amortization
events that are included in the receivables purchase agreement, all of which we consider to be usual and
customary for arrangements of this type. At December 31, 2017, we were in compliance with the covenants
contained in the receivables purchase agreement and receivables sale agreement.

There were no borrowings or letters of credit outstanding under the trade receivables facility at December 31,
2017. As of December 31, 2017, eligible trade receivables supported borrowings and letter of credit issuances of
$750 million.

MPC Term Loan Agreement

On August 26, 2014, we entered into a $700 million five-year senior unsecured term loan credit agreement
(“term loan agreement”) with a syndicate of lenders to fund a portion of the purchase price for the acquisition of

149

Hess’ Retail Operations and Related Assets. The term loan was drawn in full on September 24, 2014. The term
loan agreement matures on September 24, 2019 and may be prepaid at any time without premium or penalty. We
pay certain customary fees under the term loan agreement, including an annual administrative fee to the
administrative agent.

On September 30, 2016, we prepaid $500 million under the MPC term loan agreement with available cash on
hand. On March 31, 2017, we repaid the remaining $200 million outstanding under the MPC term loan
agreement with available cash on hand.

MPLX Credit Agreement

On July 21, 2017, MPLX entered into a credit agreement with a syndicate of lenders to replace MPLX’s previous
$2 billion five-year bank revolving credit facility with a $2.25 billion five-year bank revolving credit facility that
expires in July 2022 (“MPLX credit agreement”).

The MPLX credit agreement includes letter of credit issuing capacity of up to approximately $222 million and
swingline loan capacity of up to $100 million. The revolving borrowing capacity may be increased by up to an
additional $500 million, subject to certain conditions, including the consent of the lenders whose commitments
would increase. In addition, the maturity date of the bank revolving credit facility may be extended for up to two
additional one-year periods subject to the consent of the lenders holding a majority of the revolving credit facility
commitments, provided that the commitments held by any non-consenting lenders will terminate on the original
maturity date.

Borrowings under the MPLX credit agreement bear interest, at our election, at the Adjusted LIBO Rate or the
Alternate Base Rate (both as defined in the MPLX credit agreement) plus an applicable 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 commitments and fees with respect to issued and outstanding
letters of credit. The applicable margins to the benchmark interest rates and the commitment fees payable under
the MPLX credit agreement fluctuate from time-to-time based on MPLX’s credit ratings.

The MPLX credit agreement contains certain representations and warranties, affirmative and restrictive
covenants and events of default that we consider to be usual and customary for an agreement of this type,
including a financial covenant that requires MPLX to maintain a ratio of Consolidated 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
fiscal quarters 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 to adjustments for certain acquisitions completed and capital
projects undertaken during the relevant period. Other covenants, among other things, restrict MPLX’s ability
and/or the ability of certain of its subsidiaries to incur debt, create liens on assets and enter into transactions with
affiliates. As of December 31, 2017, MPLX was in compliance with the covenants contained in the MPLX credit
agreement.

During 2017, MPLX borrowed $670 million under the bank revolving credit facility, at an average interest rate of
2.7 percent, per annum, and repaid $165 million of these borrowings. At December 31, 2017, MPLX had $505
million outstanding borrowings and $3 million of letters of credit outstanding under the bank revolving credit
facility, resulting in total unused loan availability of $1.74 billion.

MPLX Term Loan

On July 19, 2017, MPLX prepaid the entire outstanding principal amount of its $250 million term loan with cash
on hand.

150

MPLX Senior Notes

On February 10, 2017, MPLX completed a public offering of $1.25 billion aggregate principal amount of 4.125
percent unsecured senior notes due March 2027 and $1.0 billion aggregate principal amount of 5.200
percent unsecured senior notes due March 2047. The net proceeds, which were approximately $2.22 billion after
deducting underwriting discounts, were used by MPLX to fund the $1.5 billion cash portion of the consideration
paid to MPC for the dropdown of assets on March 1, 2017, as well as for general partnership purposes. Interest is
payable semi-annually in arrears on March 1 and September 1 of each year, commencing on September 1, 2017.

20. Supplemental Cash Flow Information

(In millions)

2017

2016

2015

Net cash provided by operating activities included:

Interest paid (net of amounts capitalized)

Net income taxes paid to taxing authorities

Non-cash investing and financing activities:

Capital lease obligations increase

Contribution of assets to joint venture(a)

Intangible asset acquired(b)

Property, plant and equipment sold

Property, plant and equipment acquired

Acquisition:

Fair value of MPLX units issued(c)

Payable to MPLX Class B unitholders

525

904

337

478

140

272

1,605

273

7,326

(a)

(b)

(c)

2017 includes MPLX’s contribution of assets to Sherwood Midstream and Sherwood Midstream Holdings. 2016 includes Speedway’s
contribution of travel plaza locations to new joint venture with Pilot Flying J. See Note 5.

See Note 16 for further information.

See Note 5 for further information.

The consolidated statements of cash flows exclude changes to the consolidated balance sheets that did not affect
cash. The following is a reconciliation of additions to property, plant and equipment to total capital expenditures:

(In millions)

2017

2016

2015

Additions to property, plant and equipment per consolidated statements of cash flows

$ 2,732

$ 2,892

$ 1,998

Non-cash additions to property, plant and equipment

Asset retirement expenditures(a)

Increase (decrease) in capital accruals

Total capital expenditures before acquisitions

Acquisitions(b)

Total capital expenditures

2,801

250

(127)

2,771

(133)

2,098

11,397

$ 3,051

$ 2,638

$ 13,495

(a)

(b)

Included in All other, net – Operating activities on the consolidated statements of cash flows.

2017 reflects primarily the acquisition of the Ozark pipeline. 2016 includes adjustments to the fair values of property, plant and
equipment, intangibles and goodwill acquired in connection with the MarkWest Merger. The 2015 acquisitions include the MarkWest
Merger. The acquisition numbers above include property, plant and equipment, intangibles and goodwill.

151

21. Accumulated Other Comprehensive Loss

The following table shows the changes in accumulated other comprehensive loss by component. Amounts in
parentheses indicate debits.

(In millions)

Pension
Benefits

Other
Benefits

Gain on
Cash Flow
Hedge

Workers
Compensation

Total

Balance as of December 31, 2015

(255)

(70)

Other comprehensive income (loss)

before reclassifications

Amounts reclassified from accumulated

other comprehensive loss:

Amortization – prior service credit(a)

– actuarial loss(a)

– settlement loss(a)

Other(b)

Tax effect

Other comprehensive income (loss)

Other comprehensive income before

reclassifications

Amounts reclassified from accumulated other

comprehensive loss:

Amortization – prior service credit(a)

– actuarial loss(a)

– settlement loss(a)

Other(b)

Tax effect

Other comprehensive income (loss)

(1)

(318)

(49)

(1)

(234)

(3)

(7)

(38)

(3)

(2)

(41)

(48)

(2)

(234)

(23)

(42)

(2)

(16)

(231)

(46)

(39)

(18)

Balance as of December 31, 2016

(233)

(In millions)

Pension
Benefits

Other
Benefits

Gain on
Cash Flow
Hedge

Workers
Compensation

Total

Balance as of December 31, 2016

(233)

(7)

Balance as of December 31, 2017

(190)

(a)

(b)

These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. See Note 22.
This amount was reclassified out of accumulated other comprehensive loss and is included in selling, general and administrative on the
consolidated statements of income.

22. Defined Benefit Pension and Other Postretirement Plans

We 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 for service beginning
January 1, 2010 are based on a cash balance formula with an annual percentage of eligible pay credited based
upon age and years of service. Eligible Speedway employees accrue benefits under a defined contribution plan
for service years beginning January 1, 2010.

152

We also have other postretirement benefits covering most employees. Health care benefits are provided through
comprehensive hospital, surgical and major medical benefit provisions subject to various cost-sharing features.
Retiree life insurance benefits are provided to a closed group of retirees. Other postretirement benefits are not
funded in advance.

Obligations and funded status – The accumulated benefit obligation for all defined benefit pension plans was
$2,008 million and $1,914 million as of December 31, 2017 and 2016.

The following summarizes our defined benefit pension plans that have accumulated benefit obligations in excess
of plan assets.

(In millions)

Projected benefit obligations

Accumulated benefit obligations

Fair value of plan assets

December 31,

2017

2016

2,164

2,024

2,008

1,840

1,914

1,659

The following summarizes the projected benefit obligations and funded status for our defined benefit pension and
other postretirement plans:

(In millions)

Change in benefit obligations:

Benefit obligations at January 1

Service cost

Interest cost

Actuarial (gain) loss

Benefits paid

Other

Benefit obligations at December 31

Change in plan assets:

Fair value of plan assets at January 1

Actual return on plan assets

Employer contributions

Benefits paid from plan assets

Fair value of plan assets at December 31

Funded status of plans at December 31

Amounts recognized in the consolidated balance sheets:

Current liabilities

Noncurrent liabilities

Accrued benefit cost

Pretax amounts recognized in accumulated other comprehensive loss:(a)

Net actuarial loss

Prior service credit

Pension Benefits
2016
2017

Other Benefits
2016
2017

2,024

1,997

740

$ 800

132

150

114

(217)

(175)

2,164

2,024

1,659

1,570

270

128

(217)

1,840

145

119

(175)

1,659

(30)

826

(30)

(101)

(26)

740

(26)

(324)

(365)

$ (826)

$ (740)

(18)

(33)

(32)

(306)

(347)

(793)

(708)

(324)

(365)

$ (826)

$ (740)

537

645

(238)

(276)

(3)

(6)

(a) Amounts exclude those related to LOOP and Explorer, equity method investees with defined benefit pension and postretirement plans for
which net losses of $17 million and less than $1 million were recorded in accumulated other comprehensive loss in 2017, reflecting our
ownership share.

153

Components of net periodic benefit cost and other comprehensive loss – The following summarizes the net
periodic benefit costs and the amounts recognized as other comprehensive loss for our defined benefit pension
and other postretirement plans.

(In millions)

Components of net periodic benefit cost:

Service cost

Interest cost

Expected return on plan assets

Amortization – prior service credit

– actuarial loss

– settlement loss

Pension Benefits
2016

2017

2015

Other Benefits
2016

2017

2015

132

$ 114

$ 101

(100)

(39)

(98)

(46)

(98)

(46)

(3)

(2)

(3)

$ 31

(4)

Net periodic benefit cost(a)

156

Other changes in plan assets and benefit obligations recognized

in other comprehensive loss (pretax):

Actuarial (gain) loss

Prior service cost(b)

Amortization of actuarial loss

Amortization of prior service cost

Other

Total recognized in other comprehensive loss

Total recognized in net periodic benefit cost and

other comprehensive loss

(20)

$ (33)

$ (101)

$ (63)

(88)

(45)

(55)

(2)

(8)

(69)

$ (32)

$ (100)

$ (54)

$ 143

$ 116

$ (34)

(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 related to the MarkWest Merger in 2015.

Lump sum payments to employees retiring in 2017, 2016 and 2015 exceeded the plan’s total service and interest
costs expected for those years. Settlement losses are required to be recorded when lump sum payments exceed
total service and interest costs. As a result, pension settlement expenses were recorded in 2017, 2016 and 2015
related to our cumulative lump sum payments made during those years.

The estimated net actuarial loss and prior service credit for our defined benefit pension plans that will be
amortized from accumulated other comprehensive loss into net periodic benefit cost in 2018 are $36 million and
$33 million, respectively. The estimated net actuarial loss and prior service credit for our other defined benefit
postretirement plans that will be amortized from accumulated other comprehensive loss into net periodic benefit
cost in 2018 is less than $1 million and $3 million, respectively.

154

Plan assumptions – The following summarizes the assumptions used to determine the benefit obligations at
December 31, and net periodic benefit cost for the defined benefit pension and other postretirement plans for
2017, 2016 and 2015.

Pension Benefits
2016

2015

2017

Other Benefits
2016

2015

2017

Weighted-average assumptions used to determine benefit obligation:

Discount rate

Rate of compensation increase

3.55% 3.90% 4.00% 3.70% 4.25% 4.50%

5.00% 5.00% 3.70% 5.00% 5.00% 3.70%

Weighted-average assumptions used to determine net periodic benefit

cost:

Discount rate

3.85% 3.80% 3.70% 4.25% 4.50% 4.30%

Expected long-term return on plan assets

6.50% 6.50% 6.75%

Rate of compensation increase

5.00% 5.00% 3.70% 5.00% 5.00% 3.70%

Expected long-term return on plan assets

The overall expected long-term return on plan assets assumption is determined based on an asset rate-of-return
modeling tool developed by a third-party investment group. The tool utilizes underlying assumptions based on
actual returns by asset category and inflation and takes into account our asset allocation to derive an expected
long-term rate of return on those assets. Capital market assumptions reflect the long-term capital market outlook.
The assumptions for equity and fixed income investments are developed using a building-block approach,
reflecting observable inflation information and interest rate information available in the fixed income markets.
Long-term assumptions for other asset categories are based on historical results, current market characteristics
and the professional judgment of our internal and external investment teams.

Assumed health care cost trend

The following summarizes the assumed health care cost trend rates.

Health care cost trend rate assumed for the following year:

Medical: Pre-65

Prescription drugs

Rate to which the cost trend rate is assumed to decline (the ultimate trend rate):

Medical: Pre-65

Prescription drugs

Year that the rate reaches the ultimate trend rate:

Medical: Pre-65

Prescription drugs

December 31,
2016

2017

2015

6.75%

8.75%

4.50%

7.00%

9.00%

4.50%

7.50%

7.00%

5.00%

2026

2021

Increases in the post-65 medical plan premium for the Marathon Petroleum Health Plan and the Marathon
Petroleum Retiree Health Plan are the lower of the trend rate or four percent.

155

Assumed health care cost trend rates have a significant effect on the amounts reported for defined benefit retiree
health care plans. A one percentage point change in assumed health care cost trend rates would have the
following effects:

(In millions)

Effect on total of service and interest cost components

Effect on other postretirement benefit obligations

Plan investment policies and strategies

1-Percentage-
Point Increase

1-Percentage-
Point Decrease

(4)

(33)

The investment policies for our pension plan assets reflect the funded status of the plans and expectations
regarding our future ability to make further contributions. Long-term investment goals are to: (1) manage the
assets in accordance with the legal requirements of all applicable laws; (2) diversify plan investments across asset
classes to achieve an optimal balance between risk and return and between income and growth of assets through
capital appreciation; 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 strategy will change over time in response to changes primarily in funded
status, which is dictated by current and anticipated market conditions, the independent actions of our investment
committee, required cash flows to and from the plans and other factors deemed appropriate. Such changes in
asset allocation are intended to allocate additional assets to the fixed income asset class should the funded status
improve. The fixed income asset class shall be invested in such a manner that its interest rate sensitivity
correlates highly with that of the plans’ liabilities. Other asset classes are intended to provide additional return
with associated higher levels of risk. Investment performance and risk is measured and monitored on an ongoing
basis through quarterly investment meetings and periodic asset and liability studies. At December 31, 2017, the
primary plan’s targeted asset allocation was 51 percent equity, private equity, real estate, and timber securities
and 49 percent fixed income securities.

Fair value measurements

Plan assets are measured at fair value. The following provides a description of the valuation techniques employed
for each major plan asset category at December 31, 2017 and 2016.

Cash and cash equivalents – Cash and cash equivalents include a collective fund serving as the investment
vehicle for the cash reserves and cash held by third-party investment managers. The collective fund is valued at
net asset value (“NAV”) on a scheduled basis using a cost approach, and is considered a Level 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 are priced daily in active markets and are considered Level 1. Mutual and
pooled equity funds are well diversified portfolios, representing a mix of strategies in domestic, international and
emerging market strategies. Mutual funds are publicly registered, valued at NAV on a daily basis using a market
approach and are considered Level 1 assets. Pooled funds are valued at NAV using a market approach and are
considered Level 2.

Fixed Income – Fixed income investments include corporate bonds, U.S. dollar treasury bonds and municipal
bonds. These securities are priced on observable inputs using a combination of market, income and cost
approaches. These securities are considered Level 2 assets. Fixed income also includes a well diversified bond
portfolio structured as a pooled fund. This fund is valued at NAV on a daily basis using a market approach and is
considered Level 2.

156

Private Equity – Private equity investments include interests in limited partnerships which are valued using
information provided by external managers for each 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’s assessment 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 the northwest U.S. These holdings are either appraised or valued using
investment manager’s assessment of assets held. These holdings are considered Level 3. Other investments
classified as Level 1 include publicly traded depository receipts.

The following tables present the fair values of our defined benefit pension plans’ assets, by level within the fair
value hierarchy, as of December 31, 2017 and 2016.

(In millions)

Cash and cash equivalents

Equity:

Common stocks

Mutual funds

Pooled funds

Fixed income:

Corporate

Government

Pooled funds

Private equity
Real estate

Other

Level 1

December 31, 2017
Level 3

Level 2

227

-
-

507

673

176

-
-

51
34

Total

227

507

674

176

51
34

Total investments, at fair value

265

1,470

105

1,840

(In millions)

Cash and cash equivalents

Equity:

Common stocks

Mutual funds

Pooled funds

Fixed income:

Corporate

Government

Pooled funds

Private equity

Real estate

Other

Level 1

December 31, 2016
Level 3

Level 2

160

451

570

173

Total

160

451

570

173

Total investments, at fair value

233

1,308

118

1,659

157

The following is a reconciliation of the beginning and ending balances recorded for plan assets classified as
Level 3 in the fair value hierarchy:

(In millions)

Beginning balance

Actual return on plan assets:

Realized

Unrealized

Purchases

Sales

Ending balance

(In millions)

Beginning balance

Actual return on plan assets:

Realized

Unrealized

Purchases

Sales

Ending balance

Cash Flows

2017

Private
Equity

Real
Estate

Other

Total

118

(1)

(21)

(9)

(1)

(31)

105

2016

Private
Equity

Real
Estate

Other

Total

131

(3)

(14)

(1)

(28)

118

Contributions to defined benefit plans – Our funding policy with respect to the funded pension plans is to
contribute amounts necessary to satisfy minimum pension funding requirements, including requirements of the
Pension Protection Act of 2006, plus such additional, discretionary, amounts from time to time as determined
appropriate by management. In 2017, we made pension contributions totaling $128 million. We have no required
funding for 2018, but may make voluntary contributions at our discretion. Cash contributions to be paid from our
general assets for the unfunded pension and postretirement plans are estimated to be approximately $18 million
and $33 million, respectively, in 2018.

Estimated future benefit payments – The following gross benefit payments, which reflect expected future service,
as appropriate, are expected to be paid in the years indicated.

(In millions)

2018

2019

2020

2021

2022

2023 through 2027

Pension Benefits Other Benefits

176

183

161

158

790

229

158

Contributions to defined contribution plans – We also contribute to several defined contribution plans for eligible
employees. Contributions to these plans totaled $116 million, $113 million and $94 million in 2017, 2016 and
2015, respectively.

Multiemployer Pension Plan

We 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 participating employers.

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 of the plan, referred to as a withdrawal liability.

Our participation in this plan for 2017, 2016 and 2015 is outlined in the table below. The “EIN” column provides
the Employee Identification Number for the plan. The most recent Pension Protection Act zone status available
in 2017 and 2016 is for the plan’s year ended December 31, 2016 and December 31, 2015, 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 in the red zone are generally less than 65 percent funded. The “FIP/RP Status Pending/
Implemented” column indicates a financial improvement plan or a rehabilitation plan has been implemented. The
last column lists the expiration date of the collective-bargaining agreement to which the plan is subject. There
have been no significant changes that affect the comparability of 2017, 2016 and 2015 contributions. Our portion
of the contributions does not make up more than five percent of total contributions to the plan.

Pension Fund

EIN

2017

2016

Pension Protection
Act Zone Status

FIP/RP Status
Pending/
Implemented

MPC Contributions (In millions)

2017

2016

2015

Surcharge
Imposed

Expiration Date of
Collective - Bargaining
Agreement

Central States,

Southeast and
Southwest Areas
Pension Plan(a)

366044243

Red

Implemented

January 31, 2019

(a)

This agreement has a minimum contribution requirement of $315 per week per employee for 2018. A total of 282 employees participated
in the plan as of December 31, 2017.

Multiemployer Health and Welfare Plan

We contribute to one multiemployer health and welfare plan that covers both active employees and retirees.
Through the health and welfare plan employees receive medical, dental, vision, prescription and disability
coverage. Our contributions to this plan totaled $7 million, $6 million and $7 million for 2017, 2016 and 2015,
respectively.

23. Stock-Based Compensation Plans

Description of the Plans

Effective April 26, 2012, our employees and non-employee directors became eligible to receive equity awards
under the Amended and Restated Marathon Petroleum Corporation 2012 Incentive Compensation Plan (“MPC
2012 Plan”). The MPC 2012 Plan authorizes the Compensation Committee of our board of directors

159

(“Committee”) to grant non-qualified or incentive stock options, stock appreciation rights, stock awards
(including restricted stock and restricted stock unit awards), cash awards and performance awards to our
employees and non-employee directors. Under the MPC 2012 Plan, no more than 50 million shares of our
common stock may be delivered and no more than 20 million shares of our common stock may be the subject of
awards that are not stock options or stock appreciation rights. In the sole discretion of the Committee, 20 million
shares of our common stock may be granted as incentive stock options. Shares issued as 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 2011 Second Amended and Restated Incentive Compensation Plan (“MPC
2011 Plan”).

Stock-based awards under the Plans

We expense all share-based payments to employees and non-employee directors based on the grant date fair
value of the awards over the requisite service period, adjusted for estimated forfeitures.

Stock Options –We grant stock options to certain officer and non-officer employees. All of the stock options
granted in 2017 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, and vest 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, which requires the input of subjective
assumptions.

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 unit awards granted after 2011 to
officers are subject to an additional one year holding period after the three-year vesting period. Restricted stock
recipients who received grants in 2012 and after have the right to vote such stock; however, dividends are
accrued and will be paid upon vesting. Restricted stock units granted to non-employee directors are considered to
vest immediately at the time of the grant for accounting purposes, 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 have the right to
vote such shares and receive dividend equivalents payable upon vesting. The non-vested shares are not
transferable and are held by our transfer agent. The fair values of restricted 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. Performance units are
dollar denominated. The target value of all performance units is $1.00, with actual payout up to $2.00 per unit
(up to 200 percent of target). Performance units issued under the MPC 2012 Plan have a 36-month requisite
service period. The payout value of these awards will be determined by the relative ranking of the total
shareholder return (“TSR”) of MPC common stock compared to the TSR of 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 will be 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 of the 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 the certification is
made outside of normal trading hours. The performance units paying out in cash are accounted for as liability
awards and recorded at fair value with a mark-to-market adjustment made each quarter. The performance units
that settle in shares are accounted for as equity awards.

160

Total Stock-Based Compensation Expense

The following table reflects activity related to our stock-based compensation arrangements:

(In millions)

Stock-based compensation expense

Tax benefit recognized on stock-based compensation expense

Cash received by MPC upon exercise of stock option awards

Tax benefit received for tax deductions for stock awards exercised

2017

2016

2015

Stock Option Awards

The Black Scholes option-pricing model values used to value stock option awards granted were determined based
on the following weighted average assumptions:

Weighted average exercise price per share

50.57

35.27

50.85

2017

2016

2015

Expected life in years

Expected volatility

Expected dividend yield

Risk-free interest rate

6.3

35%

3.0%

2.1%

6.2

38%

3.0%

1.4%

6.0

33%

2.0%

1.7%

Weighted average grant date fair value of stock option awards granted

13.42

9.84

13.44

The 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 to exercise. The 2017 assumption for expected volatility of our
stock price reflects a weighting of 50 percent of our common stock implied volatility and 50 percent of our
common stock historical volatility. The risk-free interest rate for periods within the expected 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 2017:

Number of
of Shares

Weighted Average
Exercise Price

Weighted Average
Remaining
Contractual Terms
(in years)

Aggregate
Intrinsic Value
(in millions)

Outstanding at December 31, 2016

9,531,440

Granted

Exercised

Forfeited, canceled or expired

Outstanding at December 31, 2017

Vested and expected to vest at December 31,

2017

Exercisable at December 31, 2017

1,214,112

(2,201,768)

(78,386)

8,465,398

8,445,963

5,992,586

28.93

50.57

21.88

41.97

33.74

33.71

29.16

5.5

4.4

273

221

The intrinsic value of options exercised by MPC employees during 2017, 2016 and 2015 was $75 million, $14
million and $60 million, respectively.

As of December 31, 2017, unrecognized compensation cost related to stock option awards was $9 million, which
is expected to be recognized over a weighted average period of 1.3 years.

161

Restricted Stock Awards

The following is a summary of restricted stock award activity of our common stock in 2017:

Shares of Restricted Stock (“RS”)

Restricted Stock Units (“RSU”)

Number of Shares

Weighted Average
Grant Date Fair
Value

Number of
Units

Weighted Average
Grant Date Fair
Value

Outstanding at December 31, 2016

1,250,343

Granted

RS’s Vested/RSU’s Issued

Forfeited

Outstanding at December 31, 2017

579,122

(547,927)

(92,876)

1,188,662

41.51

50.25

42.54

44.32

45.07

361,117

36,345

(98,548)

(13,750)

285,164

28.26

53.19

29.49

50.20

29.95

Of the 285,164 restricted stock units outstanding, 280,850 are vested and have a weighted average grant date fair
value of $29.72. These vested but unissued units are held by our non-employee directors and certain officers, are
non-forfeitable and are issuable upon the director’s departure from our board of directors or officers end of
employment with the company.

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
Awards Vested
During the Period
(in millions)

Weighted Average
Grant Date Fair
Value of Awards
Granted During
the Period

Intrinsic Value
of Awards
Vested During
the Period
(in millions)

Weighted Average
Grant Date Fair
Value of Awards
Granted During
the Period

50.25

36.17

50.64

53.19

40.85

49.87

2017

2016

2015

As of December 31, 2017, unrecognized compensation cost related to restricted stock awards was $34 million,
which is expected to be recognized over a weighted average period of 1.3 years. There was no material
unrecognized compensation cost related to restricted stock unit awards.

Performance Unit Awards

The following table presents a summary of the 2017 activity for performance unit awards to be settled in shares:

Outstanding at December 31, 2016

Granted

Exercised

Canceled

Outstanding at December 31, 2017

162

Number of Units

Weighted
Average Grant
Date Fair Value

6,255,178

2,584,750

(1,854,728)

(133,658)

6,851,542

0.78

0.92

0.85

0.82

0.81

The number of shares that would be issued upon target vesting, using the closing price of our common stock on
December 29, 2017 would be 103,843 shares.

As of December 31, 2017, unrecognized compensation cost related to equity-classified performance unit awards
was $2 million, which is expected to be recognized over a weighted average period of 1.1 years.

Performance units to be settled in MPC shares have a grant date fair value calculated using a Monte Carlo
valuation model, which requires the input of subjective assumptions. The following table provides a summary of
these assumptions:

2017

2016

2015

Risk-free interest rate

Look-back period (in years)

Expected volatility

1.5%

2.8

36.1%

1.0%

2.8

34.2%

Grant date fair value of performance units granted

0.92

0.57

1.0%

2.8

30.4%

0.95

The 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 the average MPC common
stock historical volatility.

MPLX Awards

Our wholly-owned subsidiary and the general partner of MPLX, MPLX GP LLC (“MPLX GP”), maintains a
unit-based compensation plan for officers, directors and employees (including any other individual who may be
considered an “employee” under a Registration Statement on Form S-8 or any successor form) of MPLX GP.

The MPLX 2012 Incentive Compensation Plan (“MPLX Plan”) permits various types of equity awards including
but not limited to grants of phantom units and performance units. Awards granted under the MPLX Plan will be
settled with MPLX units. Total unit-based compensation expense for awards settling in MPLX LP common units
was $18 million in 2017, $10 million in 2016 and $4 million in 2015. Additionally, approximately $15 million
was included in the total MarkWest purchase price in 2015, representing MPLX LP unit-based compensation
awards granted in connection with the MarkWest Merger.

163

24. Leases

Lessee

We lease a wide variety of facilities and equipment under operating leases, including land and building space,
office equipment, storage facilities and transportation equipment. Most long-term leases include renewal options
and, in certain leases, purchase options. Future minimum commitments as of December 31, 2017, for capital
lease obligations and for operating lease obligations having initial or remaining non-cancellable lease terms in
excess of one year are as follows:

(In millions)

2018

2019

2020

2021

2022

Later years

Total minimum lease payments

Less imputed interest costs

Present value of net minimum lease payments

Operating lease rental expense was:

(In millions)

Rental expense

Lessor

Capital
Lease
Obligations

Operating
Lease
Obligations

255

224

205

177

152

463

1,476

265

516

152

364

2017

2016

2015

301

327

331

MPLX has certain natural gas gathering, transportation and processing agreements in which it is considered to be
the lessor under several implicit operating lease arrangements in accordance with U.S. GAAP. MPLX’s primary
implicit lease operations relate to a natural gas gathering agreement in the Marcellus region for which it earns a
fixed-fee for providing gathering services to a single producer using a dedicated gathering system. As the
gathering system is expanded, the fixed-fee charged to the producer is adjusted to include the additional
gathering assets in the lease. The primary term of the natural gas gathering arrangement expires in 2023 and will
continue thereafter on a year to year basis until terminated by either party. Other significant implicit leases relate
to a natural gas processing agreement in the Marcellus region and a natural gas processing agreement in the
Southern Appalachia region for which MPLX earns minimum monthly fees for providing processing services to
a single producer using a dedicated processing plant. The primary term of these natural gas processing
agreements expire during 2023 and 2032.

Our revenue from implicit lease arrangements, excluding executory costs, totaled approximately $218 million,
$246 million and $16 million in 2017, 2016 and 2015, respectively. The implicit lease arrangements related to
the processing facilities contain contingent rental provisions whereby we receive additional fees if the producer
customer exceeds the monthly minimum processed volumes. During the year ended December 31, 2017, we
received $9 million in contingent lease payments and $7 million for the year ended December 31, 2016. The

164

following is a schedule of minimum future rentals on the non-cancellable operating leases as of December 31,
2017:

(In millions)

2018

2019

2020

2021

2022

Later years

Total minimum lease payments

194

193

181

172

320

1,254

The following schedule summarizes our investment in assets held for operating lease by major classes as of
December 31, 2017:

(In millions)

Natural gas gathering and NGL transportation pipelines and facilities

Natural gas processing facilities

Construction in progress

Property, plant and equipment

Less accumulated depreciation

Total property, plant and equipment

25. Commitments and Contingencies

735

644

1,429

153

1,276

We 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. For matters for which we have not recorded an accrued liability, we are unable
to estimate a range of possible loss because the issues involved have not been fully developed through pleadings
and discovery. However, the ultimate resolution of some of these contingencies 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 for control of pollutants released into the environment and require
responsible parties to undertake remediation of hazardous waste disposal sites and certain other locations
including presently or formerly owned or operated retail marketing sites. Penalties may be imposed for
noncompliance.

At December 31, 2017 and 2016, accrued liabilities for remediation totaled $114 million and $132 million. It is
not presently possible to estimate the ultimate amount of all remediation costs that might be incurred or the
penalties if any that may be imposed. Receivables for recoverable costs from certain states, under programs to
assist companies in clean-up efforts related to underground storage tanks at presently or formerly owned or
operated retail marketing sites, were $45 million and $58 million at December 31, 2017 and 2016, 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 be predicted with certainty, management believes the resolution of
individually or collectively, have a material adverse effect on our
these environmental matters will not,
consolidated results of operations, financial position or cash flows.

165

MarkWest Environmental Proceeding – In July 2015, representatives from the EPA and the United States
Department of Justice conducted a search at a pipeline launcher/receiver site of MarkWest Liberty Midstream &
Resources, L.L.C., a wholly owned subsidiary of MPLX (“MarkWest Liberty Midstream”), utilized for pipeline
to a search warrant. The criminal
maintenance operations in Washington County, Pennsylvania pursuant
to the civil
investigation ended without any charges against MarkWest Liberty Midstream. With respect
enforcement allegations associated with permitting or other related regulatory obligations for its launcher/
receiver and compressor station facilities in the region, MarkWest Liberty Midstream and its affiliates have
agreed in principle to pay a cash penalty of approximately $0.6 million and to undertake certain supplemental
environmental projects with an estimated cost of approximately $2.4 million.

Other Lawsuits – MPLX, MarkWest, MarkWest Liberty Midstream, MarkWest Liberty Bluestone, L.L.C., Ohio
Fractionation and MarkWest Utica EMG (collectively, the “MPLX Parties”) are parties to various lawsuits with
Bilfinger Westcon, Inc. (“Westcon”) that were instituted in 2016 and 2017 in the Court of Common Pleas in
Butler County, Pennsylvania, the Circuit Court in Wetzel County, West Virginia, and the Court of Common
Pleas in Harrison County, Ohio. The lawsuits relate to disputes regarding construction work performed by
Westcon at the Bluestone, Mobley and Cadiz processing complexes in Pennsylvania, West Virginia and Ohio,
respectively, and the Hopedale fractionation complex in Ohio. With respect to work performed by Westcon at the
Mobley and Bluestone processing complexes, one or more of the MPLX Parties have asserted breach of contract,
fraud, and with respect to work performed at the Mobley processing complex, MarkWest Liberty Midstream has
also asserted negligent misrepresentation claims against Westcon. Weston has also asserted claims against one or
more of the MPLX Parties regarding these construction projects for breach of contract, unjust enrichment,
promissory estoppel, fraud and constructive fraud, tortious interference with contractual relations, and civil
conspiracy. The MPLX Parties seek in excess of $10 million, plus an unspecified amount of punitive damages.
Westcon seeks in excess of $40 million, plus an unspecified amount of punitive damages. While the ultimate
outcome and impact cannot be predicted with certainty, and management is not able to provide a reasonable
estimate of the potential loss or range of loss, if any, for these claims, we believe the resolution of these claims
will not have a material adverse effect on its consolidated financial position, results of operations, or cash flows.

In May 2015, the Kentucky attorney general filed a lawsuit against our wholly-owned subsidiary, MPC LP, in the
United States District Court for the Western District of Kentucky asserting claims under federal and state
antitrust statutes, the Kentucky Consumer Protection Act, and state common law. The complaint, as amended in
July 2015, alleges that MPC LP used deed restrictions, supply agreements with customers and exchange
agreements with competitors to unreasonably restrain trade in areas within Kentucky and seeks declaratory relief,
unspecified damages, civil penalties, restitution and disgorgement of profits. At this early stage, the ultimate
outcome of this litigation remains uncertain, and neither the likelihood of an unfavorable outcome nor the
ultimate liability, if any, can be determined, and we are unable to estimate a reasonably possible loss (or range of
loss) for this matter. We intend to vigorously defend ourselves in this matter.

In May 2007, the Kentucky attorney general filed a lawsuit against us and Marathon Oil in state court in
Franklin County, Kentucky for alleged violations of Kentucky’s emergency pricing and consumer protection laws
following Hurricanes Katrina and Rita in 2005. The lawsuit alleges that we overcharged customers by $89 million
during September and October 2005. The complaint seeks disgorgement of these sums, as well as penalties, under
Kentucky’s emergency pricing and consumer protection laws. We are vigorously defending this litigation. We
believe that this is the first lawsuit for damages and injunctive relief under the Kentucky emergency pricing laws to
progress this far and it contains many novel issues. In May 2011, the Kentucky attorney general amended his
complaint to include a request for immediate injunctive relief as well as unspecified damages and penalties related
to our wholesale gasoline pricing in April and May 2011 under statewide price controls that were activated by the
Kentucky governor on April 26, 2011 and which have since expired. The court denied the attorney general’s request
for immediate injunctive relief, and the remainder of the 2011 claims likely will be resolved along with those dating
from 2005. If the lawsuit is resolved unfavorably in its entirety, it could materially impact our consolidated results
of operations, financial position or cash flows. However, management does not believe the ultimate resolution of
this litigation will have a material adverse effect.

166

We are also a party to a number of other lawsuits and other proceedings arising in the ordinary course of
business. While the ultimate outcome and impact to us cannot be predicted with certainty, we believe that the
resolution of these other lawsuits and proceedings will not have a material adverse effect on our consolidated
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 guarantee arrangements, we would be required to perform should the
guaranteed party fail to fulfill its obligations under the specified arrangements. In addition to these financial
guarantees, we also have various performance guarantees related to specific agreements.

Guarantees related to indebtedness of equity method investees – MPC and MPLX hold interests in an offshore oil
port, LOOP, and MPLX holds an interest in a crude oil pipeline system, LOCAP. Both LOOP and LOCAP have
secured various project financings with throughput and deficiency agreements. Under the agreements, MPC, as a
shipper, is required to advance funds if the investees are unable to service their debt. Any such advances are
considered prepayments of future transportation charges. The duration of the agreements vary but tend to follow
the terms of the underlying debt, which extend through 2037. Our maximum potential undiscounted payments
under these agreements for the debt principal totaled $160 million as of December 31, 2017.

We hold an interest in a refined products pipeline through our investment in Centennial, and have guaranteed our
portion of the payment of Centennial’s principal, interest and prepayment costs, if applicable, under a Master
Shelf Agreement, which is scheduled to expire in 2024. The guarantee arose in order for Centennial to obtain
adequate financing. Our maximum potential undiscounted payments under this agreement for debt principal
totaled $25 million as of December 31, 2017.

In connection with our 50 percent ownership in Crowley Ocean Partners, we have agreed to conditionally
guarantee our portion of the obligations of the joint venture and its subsidiaries under a senior secured term loan
agreement. The term loan agreement provides for loans of up to $325 million to finance the acquisition of four
product tankers. MPC’s liability under the guarantee for each vessel is conditioned upon the occurrence of
certain events, including if we cease to maintain an investment-grade credit rating or the charter for the relevant
product tanker ceases to be in effect and is not replaced by a charter with an investment-grade company on
certain defined commercial terms. As of December 31, 2017, our maximum potential undiscounted payments
under this agreement for debt principal totaled $163 million.

In connection with our 50 percent indirect interest in Crowley Blue Water Partners, we have agreed to provide a
conditional guarantee of up to 50 percent of its outstanding debt balance in the event there is no charter
agreement in place with an investment-grade customer for the entity’s three vessels as well as other financial
support in certain circumstances. The maximum exposure under these arrangements is 50 percent of the amount
of the debt, which was $135 million as of December 31, 2017.

Marathon Oil indemnifications – In conjunction with the Spinoff, we have entered into arrangements with
Marathon Oil providing indemnities and guarantees with recorded values of $2 million as of December 31, 2017,
which consist of unrecognized tax benefits related to MPC, its consolidated subsidiaries and the RM&T Business
operations prior to the Spinoff which are not already reflected in the unrecognized tax benefits described in Note
12, and other contingent liabilities Marathon Oil may incur related to taxes. Furthermore, the separation and
distribution agreement and other agreements with Marathon Oil
the Spinoff provide for cross-
indemnities between Marathon Oil and us. In general, Marathon Oil is required to indemnify us for any liabilities
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. The terms of these
indemnifications are indefinite and the amounts are not capped.

to effect

Other guarantees – We have entered into other guarantees with maximum potential undiscounted payments
totaling $93 million as of December 31, 2017, which consist primarily of a commitment to contribute cash to an

167

equity method investee for certain catastrophic events, up to $50 million per event, in lieu of procuring insurance
coverage, a commitment to fund a share of the bonds issued by a government entity for construction of public
utilities in the event that other industrial users of the facility default on their utility payments 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 related agreements contain performance and general guarantees, including
guarantees regarding inaccuracies in representations, warranties, covenants and agreements, and environmental
and general indemnifications that require us to perform upon the occurrence of a triggering event or condition.
These guarantees and indemnifications are part of the normal course of selling assets. We are typically not able
to calculate the maximum potential amount of future payments that could be made under such contractual
provisions because of the variability inherent in the guarantees and indemnities. Most often, the nature of the
guarantees and indemnities is such that there is no appropriate method for quantifying the exposure because the
underlying triggering event has little or no past experience upon which a reasonable prediction of the outcome
can be based.

Contractual commitments and contingencies – At December 31, 2017 and 2016, our contractual commitments
to acquire property, plant and equipment and advance funds to equity method investees totaled $484 million and
$487 million. The contractual commitments at December 31, 2016 included the $131 million contingent
consideration associated with the acquisition of the Galveston Bay Refinery and Related Assets. See Note 17 for
additional information on the contingent consideration.

Certain natural gas processing and gathering arrangements require us to construct natural gas processing plants,
natural gas gathering pipelines and NGL pipelines and contain certain fees and charges if specified construction
milestones are not achieved for reasons other than force majeure. In certain cases, certain producer customers
may have the right to cancel the processing arrangements if there are significant delays that are not due to force
majeure.

26. Subsequent Events

On February 1, 2018, we contributed our refining logistics assets and fuels distribution services to MPLX in
exchange for $4.1 billion in cash and approximately 114 million newly issued MPLX units. MPLX financed the
cash portion of the transaction with its $4.1 billion 364-day term loan facility, which was entered into on
January 2, 2018. Immediately following the dropdown, our IDRs were cancelled and our general partner
economic interest was converted into a general partner non-economic interest, all in exchange for 275 million
newly issued MPLX common units. We continue to control MPLX through our ownership of the general partner
non-economic interest in MPLX and own approximately 64 percent of the outstanding MPLX common units as
of February 1, 2018. The contributions of these assets were accounted for as transactions between entities under
common control and we did not record a gain or loss.

On February 5, 2018, we announced our intent to redeem all of the $600 million outstanding aggregate principal
amount of our 2.700 percent senior notes due on December 14, 2018. The 2018 senior notes will be redeemed on
March 15, 2018, at a price equal to par plus a make whole premium, plus accrued and unpaid interest. The make
whole premium will be calculated based on the market yield of the applicable treasury issue as of the redemption
date as determined in accordance with the indenture governing the 2018 senior notes. Based on current treasury
yields, we expect the make whole premium on the 2018 senior notes, excluding accrued and unpaid interest, to be
less than $3.0 million or 0.50 percent of the face value of the notes.

168

$1.75 billion aggregate principal amount of 4.500 percent unsecured senior notes due April 2038, $1.5 billion
aggregate principal amount of 4.700 percent unsecured senior notes due April 2048, and $500 million aggregate
principal amount of 4.900 percent unsecured senior notes due April 2058.

169

Selected Quarterly Financial Data (Unaudited)

(In millions, except per share data)

1st Qtr.

2nd Qtr.

3rd Qtr.

4th Qtr.(a)

1st Qtr.

2nd Qtr.

3rd Qtr.

4th Qtr.

2017

2016

Revenues

$16,288

$18,180

$19,210

$21,055

$12,755

$16,811

$16,618

$17,155

Income from operations

Net income (loss)

Net income attributable to MPC

292

101

982

574

483

1,576

1,004

903

1,119

2,125

2,016

(78)

1,315

783

801

435

219

145

553

289

227

Net income attributable to MPC per

Basic

Diluted

Dividends paid per share

0.06

0.94

1.79

4.13

$ 0.003

1.51

0.28

$ 0.43

0.06

0.36

0.93

0.36

1.77

0.40

4.09

0.40

0.003

0.32

1.51

0.32

0.27

0.36

0.43

0.36

(a) During the fourth quarter of 2017, we recorded a tax benefit of approximately $1.5 billion as a result of remeasuring certain deferred tax

liabilities using the lower corporate tax rate enacted under the TCJA.

170

Supplementary Statistics (Unaudited)

(In millions)

Income from Operations by segment

Refining & Marketing(a)(b)

Speedway(b)

Midstream(a)

Items not allocated to segments:

Corporate and other unallocated items(a)

Pension settlement expenses

Litigation

Impairment(c)

Income from operations

Capital Expenditures and Investments(d)

Refining & Marketing(a)

Speedway

Midstream(a)(e)

Corporate and Other(f)

Total

2017

2016

2015

2,321

1,357

3,997

732

1,339

(365)

(52)

(29)

3,969

832

381

2,505

138

734

1,048

(268)

(7)

(486)

2,378

1,054

303

1,568

144

673

463

(293)

(4)

(144)

4,692

1,045

501

14,545

192

3,856

3,069

16,283

(b)

(c)

2017 includes MPC’s share of gains related to the sale of assets remaining from the Sandpiper pipeline project. 2016 relates to
impairments of goodwill and equity method investments. 2015 relates to the cancellation of the Residual Oil Upgrader Expansion
project. See Notes 16 and 17 to the audited consolidated financial statements.

(d) Capital expenditures include changes in capital accruals, acquisitions and investments in affiliates.

(e)

(f)

2017 includes $220 million for the acquisition of the Ozark pipeline and an investment of $500 million in MarEn Bakken related to the
Bakken Pipeline system. 2015 includes $13.85 billion for the MarkWest Merger.

Includes capitalized interest of $55 million, $63 million and $37 million for 2017, 2016 and 2015, respectively.

171

Supplementary Statistics (Unaudited)

MPC Consolidated Refined Product Sales Volumes (mbpd)(a)
Refining & Marketing Operating Statistics

Refining & Marketing refined product sales volume (mbpd)(b)
Refining & Marketing margin (dollars per barrel)(c)
Crude oil capacity utilization percent(d)
Refinery throughputs (mbpd):(e)

Crude oil refined
Other charge and blendstocks

Total

Sour crude oil throughput percent
WTI-priced crude oil throughput percent
Refined product yields (mbpd):(e)

Gasoline
Distillates
Propane
Feedstocks and special products
Heavy fuel oil
Asphalt

Total

Refinery direct operating costs (dollars per barrel):(f)

Planned turnaround and major maintenance
Depreciation and amortization
Other manufacturing(g)

Total

Refining & Marketing Operating Statistics By Region – Gulf Coast

Refinery throughputs (mbpd):(h)

Crude oil refined
Other charge and blendstocks

Total

Sour crude oil throughput percent
WTI-priced crude oil throughput percent
Refined product yields (mbpd):(h)

Gasoline
Distillates
Propane
Feedstocks and special products
Heavy fuel oil
Asphalt

Total

Refinery direct operating costs (dollars per barrel):(f)

Planned turnaround and major maintenance
Depreciation and amortization
Other manufacturing(g)

Total

2017

2016

2015

2,311

2,301
12.60
97

1,765
179

1,944

59
21

932
641
36
277
37
63

2,269

2,259
11.16
95

1,699
151

1,850

60
19

900
617
35
241
32
58

2,301

2,289
15.16
99

1,711
177

1,888

55
20

913
603
36
281
31
55

1,986

1,883

1,919

1.72
1.43
4.07

7.22

1,070
224

1,294

71
11

546
405
26
311
25
17

1.83
1.47
4.09

7.39

1,039
195

1,234

73
8

514
399
26
286
21
15

1.13
1.39
4.15

6.67

1,060
184

1,244

68
6

534
392
26
286
15
16

1,330

1,261

1,269

1.75
1.12
3.74

6.61

2.09
1.14
3.70

6.93

0.81
1.09
3.88

5.78

172

Supplementary Statistics (Unaudited)

Refining & Marketing Operating Statistics By Region – Midwest

2017

2016

2015

Refinery throughputs (mbpd):(h)

Crude oil refined
Other charge and blendstocks

Total

Sour crude oil throughput percent
WTI-priced crude oil throughput percent
Refined product yields (mbpd):(h)

Gasoline
Distillates
Propane
Feedstocks and special products
Heavy fuel oil
Asphalt

Total

Refinery direct operating costs (dollars per barrel):(f)

Planned turnaround and major maintenance
Depreciation and amortization
Other manufacturing(g)

Total

Speedway Operating Statistics(i)

Convenience stores at period-end
Gasoline and distillate sales (millions of gallons)
Gasoline & distillate margin (dollars per gallon)(j)
Merchandise sales (in millions)
Merchandise margin (in millions)
Merchandise margin percent
Same store gasoline sales volume (period over period)
Same store merchandise sales (period over period)(k)

Midstream Operating Statistics

Crude oil and refined product pipeline throughputs (mbpd)(l)
Terminal throughput (mbpd)(m)
Gathering system throughput (MMcf/d)(n)
Natural gas processed (MMcf/d)(n)
C2 (ethane) + NGLs (natural gas liquids) fractionated (mbpd)(n)

695
33

728

40
37

386
236
11
42
13
46

734

1.48
1.81
4.26

7.55

2,744
5,799
0.1738
4,893
1,402
28.7%
(1.3)%
1.2%

3,377
1,477
3,608
6,460
394

$
$
$

660
39

699

40
38

386
218
11
35
12
43

705

1.15
1.88
4.29

7.32

2,733
6,094
0.1656
5,007
1,435
28.7%
(0.4)%
3.2%

2,948
1,505
3,275
5,761
335

$
$
$

651
39

690

34
43

379
211
12
38
17
39

696

1.64
1.83
4.36

7.83

2,766
6,038
0.1823
4,879
1,368
28.0%
(0.3)%
4.1%

2,829
-
3,075
5,468
307

$
$
$

173

(a)

(b)

(c)

Total average daily volumes of refined product sales to wholesale, branded and retail customers.

Includes intersegment sales.

Excludes LCM inventory valuation adjustments. Sales revenue less cost of refinery inputs and purchased products, divided by total
refinery throughputs. Comparable prior period information for R&M margin has been recast in connection with the contribution of
certain pipeline assets to MPLX on March 1, 2017.

(d) Based on calendar day capacity, which is an annual average that includes downtime for planned maintenance and other normal operating

(e)

(f)

(g)

(h)

(i)

(j)

(k)

(l)

(m)

(n)

activities.

Excludes inter-refinery volumes of 78 mbpd, 83 mbpd and 46 mbpd for 2017, 2016 and 2015, respectively.

Per barrel of total refinery throughputs.

Includes utilities, labor, routine maintenance and other operating costs.

Includes inter-refinery transfer volumes.

2017 operating statistics do not reflect any information for the 41 travel centers contributed to PFJ Southeast, whereas they are reflected
in prior years.

Excludes LCM inventory valuation adjustments. The price paid by consumers less the cost of refined products, including transportation,
consumer excise taxes and bankcard processing fees, divided by gasoline and distillate sales volume.

Excludes cigarettes.

Includes common-carrier pipelines and private pipelines contributed to MPLX, excluding equity method investments.

Includes the results of the terminal assets contributed to MPLX from the date the assets became a business, April 1, 2016.

Includes the results of the MarkWest assets beginning on the Dec. 4, 2015 acquisition date. Includes amounts related to unconsolidated
equity method investments on a 100 percent basis.

174

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure

None.

Item 9A. Controls and Procedures

Disclosure Controls and Procedures

An 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 our chief executive
officer and chief financial officer. Based upon that evaluation, the chief executive officer and chief financial
officer concluded that the design and operation of these disclosure controls and procedures were effective as of
December 31, 2017, the end of the period covered by this Annual Report on Form 10-K.

Internal Control over Financial Reporting and Changes in Internal Control over Financial Reporting

During the quarter ended December 31, 2017, there were no changes in our internal control over financial
reporting that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting. See Item 8. Financial Statements and Supplementary Data – Management’s Report on
Internal Control over Financial Reporting and – Report of Independent Registered Public Accounting Firm,
which reports are incorporated herein by reference.

Item 9B. Other Information

None.

175

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Information 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 2018 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 by this item is incorporated by reference to the material appearing
under the sub-headings “The Board of Directors” and “Audit Committee Financial Expert” located under the
heading “The Board of Directors and Corporate Governance” in our Proxy Statement for the 2018 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 and Controller, 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 Compliance

Information regarding compliance with Section 16(a) of the Securities Exchange Act of 1934 is set forth under
the caption “Section 16(a) Beneficial Ownership Reporting Compliance” in our Proxy Statement for the 2018
Annual Meeting of Shareholders, which is incorporated herein by reference.

Item 11. Executive Compensation

Information required by this item is incorporated by reference to the material appearing under the headings
“Compensation Discussion and Analysis,” “Compensation-Based Risk Assessment,” “Ratio of Annual
Compensation for the CEO to our Median Employee,” and “Executive Compensation;” under the sub-headings
“Compensation Committee” and “Compensation Committee Interlocks and Insider Participation” located under
the heading “The Board of Directors and Corporate Governance;” and under the headings “Compensation of
Directors” and “Compensation Committee Report” in our Proxy Statement for the 2018 Annual Meeting of
Shareholders.

176

Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters

Information concerning security ownership of certain beneficial owners and management required by this item is
incorporated by reference to the material appearing under the headings “Security Ownership of Certain
Beneficial Owners” and “Security Ownership of Directors and Executive Officers” in our Proxy Statement for
the 2018 Annual Meeting of Shareholders.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table provides information as of December 31, 2017 with respect to shares of our common stock
that may be issued under the MPC 2012 Plan and the MPC 2011 Plan:

Plan category

Number of
securities to be
issued upon
exercise of
outstanding
options, warrants
and rights(a)

Weighted-
average
exercise
price of
outstanding
options,
warrants
and rights(b)

Number of
securities
remaining
available for
future issuance
under equity
compensation
plans(c)

Equity compensation plans approved by stockholders

8,958,247

33.74

41,355,420

Equity compensation plan not approved by stockholders

Total

(a)

Includes the following:

8,958,247

N/A

41,355,420

8,465,398 stock options granted pursuant to the MPC 2012 Plan and the MPC 2011 Plan and not forfeited, cancelled or expired as
of December 31, 2017.

285,164 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, 2017.

207,685 shares as the maximum potential number of shares that could be issued in settlement of performance units outstanding as of
December 31, 2017 pursuant to the MPC 2012 Plan, based on the closing price of our common stock on December 29, 2017 of
$65.98 per share. The number of shares reported for this award vehicle may overstate dilution. See Note 23 for more information on
performance unit awards granted under the MPC 2012 Plan.

In addition to the awards reported above, 1,188,662 shares of restricted stock have been issued pursuant to the MPC 2012 Plan and were
outstanding as of December 31, 2017.

(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 2012 Plan by shareholders on April 25, 2012. No more than 16,688,380 of the shares reported in this
column may be issued for awards other than stock options or stock appreciation rights. The number of shares reported in this column
assumes 207,685 as the maximum potential number of shares that could be issued pursuant to the MPC 2012 Plan in settlement of
performance units outstanding as of December 31, 2017, based on the closing price of our common stock on December 29, 2017, of
$65.98 per share. The number of shares assumed for this award vehicle may understate the number of shares available for issuance
pursuant to the MPC 2012 Plan. See Note 23 for more information on performance 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 unexercised become immediately
available for issuance under the MPC 2012 Plan.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Information required by this item is incorporated by reference to the material appearing under the heading
“Certain Relationships and Related Person Transactions,” and under the sub-heading “Board and Committee
Independence” under the heading “The Board of Directors and Corporate Governance” in our Proxy Statement
for the 2018 Annual Meeting of Shareholders.

177

Item 14. Principal Accountant Fees and Services

Information required by this item is incorporated by reference to the material appearing under the heading
“Independent Registered Public Accounting Firm’s Fees, Services and Independence” in our Proxy Statement for
the 2018 Annual Meeting of Shareholders.

178

Item 15. Exhibits and Financial Statement Schedules

A. Documents Filed as Part of the Report

PART IV

1. Financial Statements (see Part II, Item 8. of this Annual Report on Form 10-K regarding financial statements)

2. Financial Statement Schedules

Financial statement schedules required under SEC rules but not included in this Annual Report on Form 10-K
are omitted because they are not applicable or the required information is contained in the consolidated
financial statements or notes thereto.

3. Exhibits:

Exhibit
Number

Exhibit Description

Form Exhibit

Filing
Date

SEC
File No.

Filed
Herewith

Furnished
Herewith

Incorporated by Reference

2.1 †

2.2†

2.3†

2.4†

2.5†

2.6

2.7

3.1

3.2

4.1

Plan of Acquisition, Reorganization, Arrangement,
Liquidation or Succession

Separation and Distribution Agreement, dated as of May 25,
2011, among Marathon Oil Corporation, Marathon Oil Company
and Marathon Petroleum Corporation

Purchase and Sale Agreement, dated as of October 7, 2012, by
and among BP Products North America Inc. and BP Pipelines
(North America) Inc., as the Sellers and Marathon Petroleum
Company LP, as the Buyer

2.1

5/26/2011

001-35054

8-K

2.1

10/9/2012

001-35054

Purchase Agreement by and between Speedway LLC and Hess
Corporation, dated as of May 21, 2014

8-K

2.1

5/27/2014

001-35054

Amendment No. 1 effective as of September 30, 2014, to the
Purchase Agreement by and between Speedway LLC and Hess
Corporation, dated as of May 21, 2014

Agreement and Plan of Merger, dated as of July 11, 2015, by and
among MPLX LP, Sapphire Holdco LLC, MPLX GP LLC,
MarkWest Energy Partners, L.P. and, for certain limited
purposes set forth therein, Marathon Petroleum Corporation.

Amendment to Agreement and Plan of Merger, dated as of
November 10, 2015, by and among MPLX LP, Sapphire Holdco
LLC, MPLX GP LLC, MarkWest Energy Partners, L.P. and
Marathon Petroleum Corporation.

Amendment Number 2 to Agreement and Plan of Merger, dated
as of November 16, 2015, by and among MPLX LP, Sapphire
Holdco LLC, MPLX GP LLC, MarkWest Energy Partners, L.P.
and Marathon Petroleum Corporation.

Articles of Incorporation and Bylaws

8-K

2.2

10/6/2014

001-35054

8-K

2.1

7/16/2015

001-35054

8-K

2.1

11/12/2015 001-35054

8-K

2.1

11/17/2015 001-35054

Restated Certificate of Incorporation of Marathon Petroleum
Corporation

8-K

3.1

6/22/2011

001-35054

Amended and Restated Bylaws of Marathon Petroleum
Corporation

Instruments Defining the Rights of Security Holders,
Including Indentures

8-K

3.1

2/1/2018

001-35054

Indenture dated as of February 1, 2011 between Marathon
Petroleum Corporation and The Bank of New York Mellon Trust
Company, N.A., as Trustee

4.1

5/26/2011

001-35054

179

Exhibit
Number

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9

4.10

4.11

4.12

4.13

4.14

4.15

4.16

4.17

Exhibit Description

Form Exhibit

Filing
Date

SEC
File No.

Filed
Herewith

Furnished
Herewith

Incorporated by Reference

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 Notes due 2041 of
Marathon Petroleum Corporation (including Form of Notes)

First Supplemental Indenture, dated as of September 5, 2014, by
and between Marathon Petroleum Corporation and The Bank of
New York Mellon Trust Company, N.A., as trustee (including
Form of Notes)

Second Supplemental Indenture, dated as of December 14, 2015,
by and between Marathon Petroleum Corporation and the Bank
of New York Mellon Trust Company, N.A., as trustee (including
Form of Notes)

4.2

5/26/2011

001-35054

10-Q 4.1

11/3/2014

001-35054

8-K

4.1

12/14/2015 001-35054

Indenture, dated February 12, 2015, between MPLX LP and The
Bank of New York Mellon Trust Company, N.A., as Trustee

8-K

4.1

2/12/2015

001-35714

First Supplemental Indenture, dated February 12, 2015, between
MPLX LP and The Bank of New York Mellon Trust Company,
N.A., as Trustee (including Form of Notes)

Second Supplemental Indenture, dated as of December 22, 2015,
by and between MPLX LP and the Bank of New York Mellon
Trust Company, N.A. (including Form of Note)

Third Supplemental Indenture, dated as of December 22, 2015,
by and between MPLX LP and the Bank of New York Mellon
Trust Company, N.A. (including Form of Note)

Fourth Supplemental Indenture, dated as of December 22, 2015,
by and between MPLX LP and the Bank of New York Mellon
Trust Company, N.A. (including Form of Note)

Fifth Supplemental Indenture, dated as of December 22, 2015, by
and between MPLX LP and the Bank of New York Mellon Trust
Company, N.A. (including Form of Note)

Sixth Supplemental Indenture, dated as of February 10, 2017, by
and between MPLX LP and the Bank of New York Mellon Trust
Company, N.A. (including Form of Note)

Seventh Supplemental Indenture, dated as of February 10, 2017,
by and between MPLX LP and the Bank of New York Mellon
Trust Company, N.A. (including Form of Note)

Eighth Supplemental Indenture, dated as of February 8, 2018,
between the Issuer and The Bank of New York Mellon Trust
Company, N.A., as Trustee (including Form of Note)

Ninth Supplemental Indenture, dated as of February 8, 2018,
between the Issuer and The Bank of New York Mellon Trust
Company, N.A., as Trustee (including Form of Note)

Tenth Supplemental Indenture, dated as of February 8, 2018,
between the Issuer and The Bank of New York Mellon Trust
Company, N.A., as Trustee (including Form of Note)

Eleventh Supplemental Indenture, dated as of February 8, 2018,
between the Issuer and The Bank of New York Mellon Trust
Company, N.A., as Trustee (including Form of Note)

Twelfth Supplemental Indenture, dated as of February 8, 2018,
between the Issuer and The Bank of New York Mellon Trust
Company, N.A., as Trustee (including Form of Note)

8-K

4.2

2/12/2015

001-35714

8-K

4.2

12/22/2015 001-35714

8-K

4.3

12/22/2015 001-35714

8-K

4.4

12/22/2015 001-35714

8-K

4.5

12/22/2015 001-35714

8-K

4.1

2/10/2017

001-35714

8-K

4.2

2/10/2017

001-35714

8-K

4.1

2/8/2018

001-35714

8-K

4.2

2/8/2018

001-35714

8-K

4.3

2/8/2018

001-35714

8-K

4.4

2/8/2018

001-35714

8-K

4.5

2/8/2018

001-35714

180

Exhibit
Number

10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

Exhibit Description

Form Exhibit

Filing
Date

SEC
File No.

Filed
Herewith

Furnished
Herewith

Incorporated by Reference

Material Contracts

Tax Sharing Agreement dated as of May 25, 2011 by and among
Marathon Oil Corporation, Marathon Petroleum Corporation and
MPC Investment LLC

Employee Matters Agreement dated as of May 25, 2011 by and
between Marathon Oil Corporation and Marathon Petroleum
Corporation

Amendment to Employee Matters Agreement, dated as of June
30, 2011 by and between Marathon Oil Corporation and
Marathon Petroleum Corporation

Receivables Purchase Agreement, dated as of December 18,
2013, by and among MPC Trade Receivables Company, LLC,
Marathon Petroleum Company LP, The Bank of Tokyo-
Mitsubishi UFJ, Ltd., New York Branch, as administrative agent
and sole lead arranger, certain committed purchasers and conduit
purchasers that are parties thereto from time to time and certain
other parties thereto from time to time as managing agents and
letter of credit issuers.

Second Amended and Restated Receivables Sale Agreement,
dated as of December 18, 2013, by and between Marathon
Petroleum Company LP and MPC Trade Receivables Company
LLC

$2,500,000,000 Four-Year Credit Agreement, dated July 20,
2016, by and among Marathon Petroleum Corporation, as
borrower, JPMorgan Chase Bank, N.A., as administrative agent,
each of JPMorgan Chase Bank, N.A., Citigroup Global Markets
Inc., Barclays Bank PLC, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Mizuho Bank, Ltd., The Bank of Tokyo-Mitsubishi
UFJ, Ltd., UBS Securities LLC, and Wells Fargo Securities,
LLC, as joint lead arrangers and joint bookrunners, Citigroup
Global Markets Inc., as syndication agent, each of Bank of
America, N.A., Barclays Bank PLC, Mizuho Bank, Ltd., The
Bank of Tokyo-Mitsubishi UFJ, Ltd., UBS Securities LLC, and
Wells Fargo Bank, National Association, as documentation
agents, and several other commercial lending institutions that are
party thereto.

$1,000,000,000 364-Day Revolving Credit Agreement, dated
July 20, 2016, by and among Marathon Petroleum Corporation,
as borrower, JPMorgan Chase Bank, N.A., as administrative
agent, each of JPMorgan Chase Bank, N.A., Citigroup Global
Markets Inc., Barclays Bank PLC, Merrill Lynch, Pierce, Fenner
& Smith Incorporated, Mizuho Bank, Ltd., The Bank of Tokyo-
Mitsubishi UFJ, Ltd., UBS Securities LLC, and Wells Fargo
Securities, LLC, as joint lead arrangers and joint bookrunners,
Citigroup Global Markets Inc., as syndication agent, each of
Bank of America, N.A., Barclays Bank PLC, Mizuho Bank, Ltd.,
The Bank of Tokyo-Mitsubishi UFJ, Ltd., UBS Securities LLC,
and Wells Fargo Bank, National Association, as documentation
agents, and several other commercial lending institutions that are
party thereto.

Contribution, Conveyance and Assumption Agreement, dated as
of October 31, 2012, among MPLX LP, MPLX GP LLC, MPLX
Operations LLC, MPC Investment LLC, MPLX Logistics
Holdings LLC, Marathon Pipe Line LLC, MPL Investment LLC,
MPLX Pipe Line Holdings LP and Ohio River Pipe Line LLC.

181

10.1

5/26/2011

001-35054

10.2

5/26/2011

001-35054

8-K 10.1

7/1/2011

001-35054

8-K 10.1

12/23/2013 001-35054

8-K 10.2

12/23/2013 001-35054

8-K 10.1

7/26/2016

001-35054

8-K 10.2

7/26/2016

001-35054

8-K 10.1

11/6/2012

001-35054

Exhibit
Number

10.9

10.10*

10.11*

10.12*

10.13*

10.14*

10.15*

10.16*

10.17*

10.18*

10.19*

10.20*

10.21*

10.22*

10.23*

10.24*

10.25*

10.26*

10.27*

10.28*

10.29*

10.30*

10.31*

Exhibit Description

Form Exhibit

Filing
Date

SEC
File No.

Filed
Herewith

Furnished
Herewith

Incorporated by Reference

Omnibus Agreement, dated as of October 31, 2012, among
Marathon Petroleum Corporation, Marathon Petroleum Company
LP, MPL Investment LLC, MPLX Operations LLC, MPLX
Terminal and Storage LLC, MPLX Pipe Line Holdings LP,
Marathon Pipe Line LLC, Ohio River Pipe Line LLC, MPLX LP
and MPLX GP LLC.

8-K 10.2

11/6/2012

001-35054

Marathon Petroleum Corporation Second Amended and Restated
2011 Incentive Compensation Plan

S-3

4.3

12/7/2011 333-175286

Marathon Petroleum Corporation Policy for Recoupment of
Annual Cash Bonus Amounts

10-K 10.10

2/29/2012

001-35054

Marathon Petroleum Corporation Deferred Compensation Plan
for Non-Employee Directors

10-K 10.13

2/28/2013

001-35054

Marathon Petroleum Amended and Restated Excess Benefit Plan 10-K 10.14

2/24/2017

001-35054

Marathon Petroleum Amended and Restated Deferred
Compensation Plan

10-K 10.13

2/29/2012

001-35054

Marathon Petroleum Corporation Executive Tax, Estate, and
Financial Planning Program

10-K 10.14

2/29/2012

001-35054

Speedway Excess Benefit Plan

10-K 10.15

2/29/2012

001-35054

Speedway Deferred Compensation Plan

10-K 10.16

2/29/2012

001-35054

Form of Marathon Petroleum Corporation Amended and
Restated 2011 Incentive Compensation Plan Nonqualified Stock
Option Award Agreement – Section 16 Officer

Form of Marathon Petroleum Corporation 2011 Incentive
Compensation Plan Supplemental Nonqualified Stock Option
Award Agreement – Section 16 Officer

Form of Marathon Petroleum Corporation 2011 Incentive
Compensation Plan Supplemental Restricted Stock Unit Award
Agreement – Non-Employee Director

Marathon Petroleum Corporation Amended and Restated
Executive Change in Control Severance Benefits Plan

Form of Marathon Petroleum Corporation Restricted Stock
Award Agreement – Officer

Form of Marathon Petroleum Corporation Nonqualified Stock
Option Award Agreement – Officer

Amended and Restated Marathon Petroleum Corporation 2012
Incentive Compensation Plan

8-K 10.6

7/7/2011

001-35054

8-K 10.2

12/7/2011

001-35054

10-K 10.22

2/29/2012

001-35054

10-Q 10.4

5/9/2012

001-35054

10-Q 10.5

5/9/2012

001-35054

10-Q 10.1

5/1/2017

001-35054

Marathon Petroleum Annual Cash Bonus Program

10-K 10.31

2/24/2017

001-35054

MPC Non-Employee Director Phantom Unit Award Policy

10-K 10.32

2/28/2013

001-35054

Form of Marathon Petroleum Corporation Restricted Stock
Award Agreement – Officer

10-Q 10.2

5/9/2013

001-35054

Form of Marathon Petroleum Corporation Nonqualified Stock
Option Award Agreement – Officer

10-Q 10.3

5/9/2013

001-35054

MPLX LP – Form of MPC Officer Phantom Unit Award
Agreement

MPLX LP – Form of MPC Officer Performance Unit Award
Agreement – 2013-2015 Performance Cycle

First Amendment to the Marathon Petroleum Corporation
Amended and Restated 2011 Incentive Compensation Plan

10-Q 10.4

5/9/2013

001-35054

10-Q 10.5

5/9/2013

001-35054

10-Q 10.1

8/3/2015

001-35054

182

Exhibit
Number

10.32*

10.33*

10.34*

10.35

10.36

10.37*

10.38*

10.39*

10.40*

10.41*

10.42*

10.43*

10.44

10.45

Exhibit Description

Form Exhibit

Filing
Date

SEC
File No.

Filed
Herewith

Furnished
Herewith

Incorporated by Reference

First Amendment to the Marathon Petroleum Corporation 2012
Incentive Compensation Plan

Form of Modification to Performance Unit Award Agreements
for the 2016-2018 and 2017-2019 Performance Cycles

Marathon Petroleum Thrift Plan

Loan Agreement, by and between MPLX LP and MPC
Investment LLC, dated December 4, 2015

First Amendment to Receivables Purchase Agreement, dated
July 20, 2016, by and among MPC Trade Receivables Company
LLC, Marathon Petroleum Company LP, The Bank of Tokyo-
Mitsubishi UFJ., Ltd., New York Branch, as administrative agent
and sole lead arranger, certain committed purchasers and conduit
purchasers that are parties thereto from time to time and certain
other parties thereto from time to time as managing agents and
letter of credit issuers.

Form of Marathon Petroleum Corporation Performance Unit
Award Agreement

Form of Marathon Petroleum Corporation Restricted Stock
Award Agreement – Officer

Form of Marathon Petroleum Corporation Nonqualified Stock
Option Award Agreement – Officer

Form of MPLX LP Performance Unit Award Agreement –
Marathon Petroleum Corporation Officer

10-Q 10.2

8/3/2015

001-35054

10-K 10.45

2/24/2017

001-35054

8-K 10.1

12/10/2015 001-35054

8-K 10.3

7/26/2016

001-35054

10-Q 10.1

5/2/2016

001-35054

10-Q 10.2

5/2/2016

001-35054

10-Q 10.3

5/2/2016

001-35054

10-Q 10.3

5/1/2017

001-35054

Form of MPLX LP Phantom Unit Award Agreement – Marathon
Petroleum Corporation Officer

10-Q 10.5

5/2/2016

001-35054

Form of MPLX LP Performance Unit Award Agreement

10-Q 10.2

5/1/2017

001-35054

MPLX LP Executive Change in Control Severance Benefits Plan 10-Q 10.4

10/30/2017 001-35054

8-K 10.1

7/27/2017

001-35054

8-K 10.2

7/27/2017

001-35054

$2,500,000,000 Five-Year Revolving Credit Agreement, dated
July 21, 2017, by and among Marathon Petroleum Corporation,
as borrower, JPMorgan Chase Bank, N.A., as administrative
agent, each of JPMorgan Chase Bank, N.A., Wells Fargo
Securities, LLC, Barclays Bank PLC, Citigroup Global Markets
Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Mizuho Bank, Ltd., The Bank of Tokyo-Mitsubishi UFJ, Ltd.,
and RBC Capital Markets, as joint lead arrangers and joint
bookrunners, Wells Fargo Bank, National Association, as
syndication agent, each of Bank of America, N.A., Barclays
Bank PLC, Citigroup Global Markets Inc., Mizuho Bank, Ltd.,
The Bank of Tokyo-Mitsubishi UFJ, Ltd., and Royal Bank of
Canada, as documentation agents, and several other commercial
lending institutions that are party thereto.

$1,000,000,000 364-Day Revolving Credit Agreement, dated
July 21, 2017, by and among Marathon Petroleum Corporation,
as borrower, JPMorgan Chase Bank, N.A., as administrative
agent, each of JPMorgan Chase Bank, N.A., Wells Fargo
Securities, LLC, Barclays Bank PLC, Citigroup Global Markets
Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Mizuho Bank, Ltd., The Bank of Tokyo-Mitsubishi UFJ, Ltd.,
and RBC Capital Markets, as joint lead arrangers and joint
bookrunners, Wells Fargo Bank, National Association, as
syndication agent, each of Bank of America, N.A., Barclays
Bank PLC, Citigroup Global Markets Inc., Mizuho Bank, Ltd.,
The Bank of Tokyo-Mitsubishi UFJ, Ltd., and Royal Bank of
Canada, as documentation agents, and several other commercial
lending institutions that are party thereto.

183

Exhibit Description

Form Exhibit

Filing
Date

SEC
File No.

Filed
Herewith

Furnished
Herewith

Incorporated by Reference

Exhibit
Number

10.46

10.47

10.48

12.1

14.1

21.1

23.1

24.1

31.1

31.2

32.1

32.2

8-K 10.3

7/27/2017

001-35054

Credit Agreement, dated as of July 21, 2017, among MPLX LP,
as borrower, Wells Fargo Bank, National Association, as
administrative agent, each of Wells Fargo Securities, LLC,
JPMorgan Chase Bank, N.A., Barclays Bank PLC, Citigroup
Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Mizuho Bank, Ltd., The Bank of Tokyo-Mitsubishi
UFJ, Ltd. and RBC Capital Markets, as joint lead arrangers and
joint bookrunners, JPMorgan Chase Bank, N.A., as syndication
agent, each of Bank of America, N.A., Barclays Bank PLC,
Citigroup Global Markets Inc., Mizuho Bank, Ltd., The Bank of
Tokyo-Mitsubishi UFJ, Ltd., and Royal Bank of Canada, as
documentation agents, and the other lenders and issuing banks
that are parties thereto.

Partnership Interests Restructuring Agreement, dated as of
December 15, 2017, among MPLX GP LLC and MPLX LP

8-K 10.1

12/19/2017 001-35054

8-K 10.1

1/4/2018

001-35714

Term Loan Agreement, dated as of January 2, 2018, among
MPLX LP, as borrower, Mizuho Bank, Ltd., as administrative
agent, each of Mizuho Bank, Ltd., Merrill Lynch, Pierce, Fenner
& Smith Incorporated, The Bank of Tokyo-Mitsubishi UFJ, Ltd.,
Barclays Bank PLC, JPMorgan Chase Bank, N.A., and Wells
Fargo Securities, LLC, as joint lead arrangers and joint
bookrunners, Bank of America, N.A., The Bank of Tokyo-
Mitsubishi UFJ, Ltd., Barclays Bank PLC, JPMorgan Chase
Bank, N.A., and Wells Fargo Bank, National Association, as
syndication agents, and the other lenders and issuing banks that
are parties thereto.

Computation of Ratio of Earnings to Fixed Charges

Code of Ethics for Senior Financial Officers

10-K 14.1

2/24/2017

001-35054

List of Subsidiaries

Consent of Independent Registered Public Accounting Firm

Power of Attorney of Directors and Officers of Marathon
Petroleum Corporation

Certification of Chief Executive Officer pursuant to Rule 13(a)-
14 and 15(d)-14 under the Securities Exchange Act of 1934.

Certification of Chief Financial Officer pursuant to Rule 13(a)-14
and 15(d)-14 under the Securities Exchange Act of 1934.

Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350.

Certification of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350.

101.INS

XBRL Instance Document.

101.SCH

XBRL Taxonomy Extension Schema.

101.PRE

XBRL Taxonomy Extension Presentation Linkbase.

101.CAL

XBRL Taxonomy Extension Calculation Linkbase.

101.DEF

XBRL Taxonomy Extension Definition Linkbase.

101.LAB

XBRL Taxonomy Extension Label Linkbase.

†

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.

184

Item 16. Form 10-K Summary

Not applicable.

185

SIGNATURES

Pursuant 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 its behalf by the undersigned, thereunto duly authorized.

February 28, 2018

MARATHON PETROLEUM CORPORATION

By:

/s/ John J. Quaid

John J. Quaid
Vice President and Controller

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on February 28, 2018 on behalf of the registrant and in the capacities indicated.

Signature

Title

/s/ Gary R. Heminger

Gary R. Heminger

/s/ Timothy T. Griffith

Timothy T. Griffith

/s/ John J. Quaid

John J. Quaid

Abdulaziz F. Alkhayyal

Evan Bayh

Charles E. Bunch

David A. Daberko

Steven A. Davis

Donna A. James

James E. Rohr

*
Frank M. Semple

Chairman of the Board and Chief Executive Officer
(principal executive officer)

Senior Vice President and Chief Financial Officer
(principal financial officer)

Vice President and Controller
(principal accounting officer)

Director

186

Signature

J. Michael Stice

John P. Surma

Director

Title

* The undersigned, by signing his name hereto, does sign and execute this report pursuant to the Power of
Attorney executed by the above-named directors and officers of the registrant, which is being filed herewith on
behalf of such directors and officers.

By:

/s/ Gary R. Heminger

February 28, 2018

Gary R. Heminger
Attorney-in-Fact

187

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
MPCInvestorRelations@marathonpetroleum.com

Lisa Wilson, Director
Investor Relations
(419) 421-2071

Denice Myers, Manager
Investor Relations
(419) 421-2965

Doug Wendt, Manager
Investor Relations
(419) 421-2423

Notice of Annual Meeting
The 2018 Annual Meeting of Shareholders
will be held in Findlay, Ohio, on April 25, 2018.

Independent Accountants
PricewaterhouseCoopers LLP
406 Washington Street, Suite 200
Toledo, OH 43604

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 505000
Louisville, KY 40233-5000
Overnight correspondence should be mailed to:
462 South 4th Street, Suite 1600
Louisville, KY 40202
(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 2017 Annual Report may be obtained by
contacting:
Public Affairs
539 South Main St.
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.

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 24 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 Dec. 31, 2012, to Dec. 31, 2017, 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: Andeavor (Tesoro prior to Aug. 1, 2017),
BP plc, Royal Dutch Shell plc, Chevron Corporation, HollyFrontier
Corporation, Phillips 66 (ConocoPhillips prior to May 1, 2012),
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 5 Year Cumulative Total Return*
on $100 Invested in MPC Common Stock
on Dec. 31, 2012 vs. S&P 500 Index and Peer Group Index

$250

$200

$150

$100

$50

12/12

12/13

12/14

12/15

12/16

12/17

MPC

Peer Group Index

Standard & Poor’s 500 Index
Total Return

On back cover: MPC’s refinery in Robinson, Illinois

MARATHON PETROLEUM CORPORATION • 2017 ANNUAL REPORT

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MARATHON PETROLEUM CORPORATION
539 South Main St.
Findlay, OH 45840

Non-GAAP Financial Measures
Speedway segment earnings before interest, taxes, depreciation and amortization (EBITDA), refining marketing margin and Speedway total margin are non-GAAP
financial measures provided in this annual report. Reconciliations to the nearest GAAP financial measures are included on Page 5, and in the MPC Annual Report
on Form 10-K for the year ended Dec. 31, 2017, filed with the SEC. These non-GAAP financial measures are not defined by GAAP and should not be considered
in isolation or as an alternative to net income attributable to MPC, net cash provided by (used in) operations or other financial measures prepared in accordance
with GAAP. Certain EBITDA forecasts were determined on an EBITDA-only basis. Accordingly, information related to the elements of net income, including tax and
interest, are not available and, therefore, reconciliations of these non-GAAP financial measures to the nearest GAAP financial measures have not been provided.

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,”
“design,” “estimate,” “expect,” “forecast,” “goal,” “guidance,” “imply,” “intend,” “objective,” “opportunity,” “outlook,” “plan,” “position,” “pursue,” “prospective,”
“predict,” “project,” “potential,” “seek,” “strategy,” “target,” “could,” “may,” “should,” “would,” “will” or other similar expressions that convey the uncertainty of future
events or outcomes. 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, 2017, 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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