Marathon Petroleum Annual Report 2018

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FY2018 Annual Report · Marathon Petroleum

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MARATHON PETROLEUM CORPORATION
539 South Main St.
Findlay, OH 45840

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2018 | ANNUAL REPORT

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, 2018, cautionary language identifying important
factors, though not necessarily all such factors, that could cause future outcomes to differ materially from those set forth in the forward-looking statements.

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TABLE OF CONTENTS

1 LETTER TO OUR

SHAREHOLDERS

FINANCIAL
HIGHLIGHTS

BOARD OF DIRECTORS &
CORPORATE OFFICERS

OUR
BUSINESS

OUR
STRATEGY

Front cover: Garyville refi nery in Louisiana

Inside cover: Kenai refi nery in Alaska

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
ir@marathonpetroleum.com

Kristina Kazarian
Vice President, Investor Relations
(419) 421-2071

Notice of Annual Meeting
The 2019 Annual Meeting of Shareholders
will be held in Findlay, Ohio, on April 24, 2019.

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
2018 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, 2013, to Dec. 31, 2018, compared to the
cumulative total return of a $100 investment in the S&P 500 Index
and an index of peer companies (selected by us) for the same period.
Our peer group consists of the following companies that engage in
domestic refining operations: BP plc, Chevron Corporation, ExxonMobil
Corporation, HollyFrontier Corporation, PBF Energy Inc., Phillips 66 and
Valero Energy Corporation. The peer group for 2018 was changed, by
removing Royal Dutch Shell plc and adding PBF Energy Inc., to align
with peer groups used for certain incentive compensation programs. In
addition, Andeavor is no longer in our peer group due to its merger with
and into an MPC subsidiary effective Oct. 1, 2018.

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*
Among Marathon Petroleum Corporation, The S&P 500 Index,
2017 Peer Group and 2018 Peer Group

$180

$160

$140

$120

$100

$80

$60

$40

$20

$0
12/13

12/14

12/15

12/16

12/17

12/18

Marathon Petroleum Corporation

S&P 500

2017 Peer Group

2018 Peer Group

* $100 invested on Dec. 31, 2013 in stock or index, including reinvestment of dividends.
Fiscal year ending Dec. 31.

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MARATHON PETROLEUM CORPORATION I 2018 ANNUAL REPORT I 1

FROM THE CHAIRMAN AND CEO

Fellow shareholders,

2018 was a transformative year for Marathon Petroleum Corporation. Through our strategic combination

with Andeavor, we took another step in our journey building a company that provides energy solutions

and enhances life’s possibilities.

This strategic combination has strengthened your company by expanding the opportunities for

profitable growth. Our coast-to-coast refining, midstream and retail footprint has reached an

unprecedented scale in our 130-year history. The integration of these assets into a single system

creates tremendous competitive advantages, as our broader market presence gives us additional

access to price-advantaged feedstocks, creates new product-placement options and increases our

speed to market.

As we continue unlocking this tremendous potential, the extraordinary work ethic of our 60,000

employees and a deep commitment to our values of health and safety, environmental stewardship,

integrity, corporate citizenship and an inclusive culture, will underpin our success.

We invest in energy-efficiency technologies that not only reduce our greenhouse gas emissions, they

also result in hundreds of millions of dollars in cost savings. We invest in safety not only because we

want every employee to finish each workday as safe as they started it, but also because we know that

process safety and personal safety are essential to maximizing asset reliability.

We are confident that our fourth-quarter 2018 performance –

our first full quarter after combining with Andeavor – points

to the potential ahead. We have seen strong earnings and

returned billions of dollars in capital to you, our shareholders,

through share repurchases and steadily increasing dividends.

At the same time, we expect our strategic and disciplined

investments will provide superior returns and further enhance

our long-term profitability.

This annual report provides more about our strategic vision for

your company and the compelling, long-term value creation we

see for our shareholders. Thank you for your investment in our

future, and we look forward to sharing our continued success.

Sincerely,

Gary R. Heminger

Chairman and Chief Executive Officer

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2 I MARATHON PETROLEUM CORPORATION I 2018 ANNUAL REPORT

CREATING A LEADING ENERGY COMPANY

On October 1, 2018, we completed the Andeavor acquisition, combining two strong,
complementary companies to create a leading, nationwide U.S. downstream energy company.
The transaction expanded our footprint across key markets nationwide, capitalizing on the
strong position MPC has historically enjoyed east of the Mississippi combined with the
Mid-Continent and Western U.S. presence Andeavor built over time. As a larger company with
a much broader geography, we are well-positioned to continue our important work on an even
greater scale.

This powerful and transformative combination substantially increases our geographic
diversifi cation and scale, and we believe it strengthens each of our operating segments by
diversifying our refi ning portfolio into attractive markets and increasing access to advantaged
feedstocks, enhancing our midstream footprint in the Permian and Bakken basins, and creating
a nationwide retail and marketing portfolio, all of which is expected to substantially improve
effi ciencies and our ability to serve customers.

We expect the combination to generate gross run-rate synergies of up to $600 million at
year-end 2019 and up to $1.4 billion by the end of 2021, signifi cantly enhancing our long-term
cash fl ow generation profi le.

Bulk storage at Kenai refi nery in Alaska

Garyville refi nery in Louisiana

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MARATHON PETROLEUM CORPORATION I 2018 ANNUAL REPORT I 3

3.0million

barrels per day of
crude oil capacity

Up to$1.4 billion

of potential synergies
by year-end 2021

~12,000

Nationwide retail and
marketing locations

Strong midstream
footprint in

Marcellus,
Permian and
Bakken

An MPC towboat passes the Catlettsburg refi nery in Kentucky

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I 2018 ANNUAL REPORT
4 I MARATHON PETROLEUM CORPORATION I 2018 ANNUAL REPORT

4 I MARATHON PETROLEUM CORPORATION

STRATEGIC VISION

The principles that power our success have not changed in our over
130-year history as a player in U.S. energy markets. Building a team
of exceptional people, fostering alignment on strategic vision, driving
powerful collaboration and achieving operational excellence are key
tenets that have enabled our growth into a leading energy company.
Our strategic priorities are to utilize our integrated business model and
maintain a disciplined approach to capital allocation to deliver profi table
growth and enhance shareholder returns while focusing on safe and
reliable operations. Collectively, these pillars ensure maximum value
creation potential, through-cycle resiliency, and a strong corporate
culture for our employees.

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MARATHON PETROLEUM CORPORATION I 2018 ANNUAL REPORT I 5

CORE VALUES/
OPERATIONAL EXCELLENCE

We strive to be the best operators in our industry
by maintaining a fi rm commitment to the safety
of our people, the communities in which we
operate and the environment we all share. Our
goal is to maximize asset reliability and potential
while creating a positive environment for our
employees and being a good neighbor.

INTEGRATED
BUSINESS MODEL

With a national footprint spanning Refi ning &
Marketing, Midstream and Retail, our uniquely
integrated platform provides extensive fl exibility
and optionality. This gives us the ability to meet
the growth needs of the market and to respond
promptly to dynamic market conditions.

STRATEGIC AND
DISCIPLINED INVESTMENTS

Our focus on disciplined deployment of capital
into high-returning, opportunistic investments
for the company allows us to create competitive
advantages for MPC while growing profi tability
and providing shareholder returns.

FINANCIAL
STRENGTH

We intend to maintain a disciplined and balanced
approach to capital allocation, including return
of capital to shareholders, while maintaining an
investment grade credit profi le.

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6 I MARATHON PETROLEUM CORPORATION I 2018 ANNUAL REPORT

CORE VALUES

Our success has been predicated on an unwavering commitment to our core values of health
and safety, environmental stewardship, integrity, corporate citizenship and an inclusive culture.
We have built a culture that encourages our people to challenge themselves each and every
day, and we constantly strive for operational excellence with a focus on safety. These are all
valuable criteria for our shareholder community.

SAFETY PERFORMANCE (1)

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e
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0.8

0.6

0.4

0.2

0.0

t
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t

f
o
s
e
r
r
a
b

0.45

2014

0.37

0.33

0.36

2015
MPC Refining

2016

2017
Industry Average

0.27

2018

ENVIRONMENTAL PERFORMANCE (2)

2014

2015

2016
MPC Refining

2017

(1) Safety performance based on OSHA Recordable Incident Rate for Refi ning industry; industry average source: Bureau of Labor

Statistics; 2018 includes MPC and legacy Andeavor refi neries

(2) Environmental performance based on criteria pollutant emissions and includes MPC, MPLX and the legacy Andeavor refi neries;

does not include emissions from ANDX

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MARATHON PETROLEUM CORPORATION I 2018 ANNUAL REPORT I 7
MARA THON PETROLEUM CORPORA TION I 2018 ANNUAL REPOR T I 7

ENVIRONMENTAL
ACHIEVEMENT
AWARDS
earned from state
environmental agencies

2018

EPA
ENERGY STAR
PARTNER OF
THE YEAR

MPC has earned

75%

of the EPA’s
ENERGY STAR
recognitions awarded
to refi neries

18Facilities earned

Voluntary Protection Programs
An OSHA Cooperative Program

OSHA’S
highest status

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8 II MARATHON PETROLEUM CORPORATION I 2018 ANNUAL REPORT
8 I MARATHON PETROLEUM CORPORATION I 2018 ANNUAL REPORT

ENHANCING RETURNS: OUR INTEGRATED BUSINESS MODEL

REFINING

Largest refi ner in U.S. with more than
3 million barrels per day of capacity.
Feedstock advantaged portfolio
with 16 refi neries in the Gulf Coast,
Mid-Continent and West Coast
regions of the U.S.

MIDDSSTREAMM

General partner and majority
limited partner unitholder in two
midstream companies, MPLX LP
and Andeavor Logistics LP, which
own and operate crude oil and
light product transportation and
logistics infrastructure and gathering,
processing and fractionation assets.

RETAIL

Nation’s second-largest company-
owned and -operated convenience
store chain. Sells gasoline, diesel and
merchandise through convenience
stores that we own and operate,
primarily under the Speedway
brand, as well as through direct
dealer locations.

2018 INCOME
FROM OPERATIONS
BY SEGMENT

40%

44%

16%

Refi ning

Midstream

Retail

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MARATHON PETROLEUM CORPORATION I 2018 ANNUAL REPORT I 9

FEEDSTOCK ACQUISITION

Enhanced
scale and integration

INBOUND LOGISTICS

REFINING & PROCESSING

MARKETING & RETAIL

Expanded
platform for growth

OUTBOUND LOGISTICS

Broader
commercial opportunity

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10 I MARATHON PETROLEUM CORPORATION I 2018 ANNUAL REPORT
10 I MARATHON PETROLEUM CORPORATION I 2018 ANNUAL REPORT

STRATEGIC & DISCIPLINED INVESTMENTS

We focus on deploying capital only into high-returning, opportunistic investments. Our
investment discipline seeks to create competitive advantages for MPC while providing
long-term profi tability and strong shareholder returns.

CAPITAL EXPENDITURES
$ Millions

4,304

3,059

3,106

$5,000

$4,000

$3,000

$2,000

$,000

2016

2017

2018 (1)

(1) Includes the results of Andeavor from the Oct. 1, 2018 acquisition date forward.

REFINING

Focus on refi nery optimization, production of higher value products and
increased capacity to upgrade residual fuel oil. Projects include adding a
third coker at the Garyville refi nery, optimization and upgrading projects at
the Galveston Bay and Los Angeles refi neries, and converting the Dickinson
refi nery into a renewable diesel facility.

MIDSTREAM

Investments focused on meeting market needs in premier basins such as
the Permian, Marcellus and Bakken. Projects include the development of
long-haul pipelines and the expansion of export capabilities designed to
further enhance full value-chain capture.

RETAIL

Strategy of real estate and store portfolio optimization and investing in
technology enhancement. Our plans include the conversion of recently
acquired locations to the Speedway brand and systems, growth in existing
and new markets, commercial fueling/diesel expansion, food service through
store remodels and high-quality acquisitions.

Top: Installing the new pipeline from Owensboro to Catlettsburg.
Middle: Galveston Bay refi nery turnaround preparation.
Bottom: MPLX facility in Sherwood, West Virginia

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MARATHON PETROLEUM CORPORATION I 2018 ANNUAL REPORT I 11

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12 I MARATHON PETROLEUM CORPORATION I 2018 ANNUAL REPORT

Marathon Petroleum Corporation
headquarters in Findlay, Ohio

FINANCIAL STRENGTH

We have a disciplined and balanced approach to capital allocation. Maintaining an investment grade
credit profi le and a core liquidity position remains a priority for the company.

Focusing on maintaining the safety, integrity and reliability of our assets enables our ability to operate our
high-quality asset base. For growth investments, we pursue projects with returns expected to exceed
our cost of capital across the business and believe that continued strategic investments will support
meaningful return of capital over the long term.

We are committed to returning excess cash to shareholders through a combination of dividends
and share repurchases. Since becoming a public company in 2011, our dividend has increased by a
25 percent compound annual growth rate. We believe this regular, predictable and growing dividend
is an important part of the value proposition for our investors, while at the same time we have also
repurchased more than $13 billion of our common stock. We expect to return over 50 percent of our
discretionary free cash fl ow (1) to shareholders going forward.

(1) Discretionary free cash fl ow = operating cash fl ow less maintenance and regulatory capital expenditures

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MARATHON PETROLEUM CORPORATION I 2018 ANNUAL REPORT I 13

~$18

Billion
Returned to
Shareholders
Since July 1, 2011

25%

Dividend Growth
(Compounded
Annual Growth Rate
since 2011)

50%

of discretionary
free cash fl ow (1)
targeted for return
to shareholders

TOTAL SHARES REPURCHASED
$ Billions

s
n
o

i
l
l
i

B
$

s
n
o

i
l
l
i

B
$

$15

$10

7.2

7.4

13.1

9.8

1.4

4.1

6.3

2011

2012

2013

2014

2015

2016

2017

2018

Cumulative Repurchases

ANNUAL DIVIDENDS
($ per share)

$2.12

1.4

$1.84

1.0

$1.52

$1.36

0.8

0.7

$1.14

0.6

$0.92

$0.77

0.5

$0.60

0.4

2012

2013

2014

2015

2016

2017

2018

2019E (2)

Total Dividends Paid

(1) Discretionary free cash fl ow = operating cash fl ow less maintenance and regulatory capital expenditures.

(2) 2019E based on annualized $0.53 per share dividend announced on Jan. 28, 2019.

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14 I MARATHON PETROLEUM CORPORATION I 2018 ANNUAL REPORT

Marathon Petroleum Corporation
headquarters in Findlay, Ohio

FINANCIAL HIGHLIGHTS

Year Ended Dec. 31

Sales and other operating revenue ($mm) (1)
Income from operations ($mm)
Net income attributable to MPC ($mm)
Per-common-share data

Net income attributable to MPC – basic ($)
Net income attributable to MPC – diluted ($)
Dividends ($)

Cash and cash equivalents ($mm)
Total debt ($mm)
Equity ($mm)
Capital expenditures and investments ($mm)
Debt-to-book capitalization (%)

(1) Includes sales to related parties

2016

63,339
2,386
1,174

2.22
2.21
1.36

2016

887
10,572
20,203
3,059
33

2017

74,733
4,018
3,432

6.76
6.70
1.52

2017

3,011
12,946
20,828
3,106
37

2018

96,504
5,571
2,780

5.36
5.28
1.84

2018

1,687
27,524
44,049
4,304
38

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I 15
MARATHON PETROLEUM CORPORATION I 2018 ANNUAL REPORT I 15

MARATHON PETROLEUM CORPORATION

I 2018 ANNUAL REPORT

$5.6

Billion
Income from
operations in 2018

$4.2

Billion
Returned to
shareholders in 2018

38%

Leverage
Debt-to-Capital

INCOME FROM OPERATIONS
$ Millions

CASH RETURNED TO SHAREHOLDERS
$ Millions

5,571

4,018

$6,000

$4,000

$2,000

2,386

$5,000

$4,000

$3,000

$2,000

$1,000

916

4,241

3,145

2016

2017

2018

2016

2017

2018

Dividends

Common Stock Repurchased

TOTAL SHAREHOLDER RETURN

266%

MPC Total Return
S&P 500: 129%
Peers: 114%

500%

400%

300%

200%

100%

2011

2012 2013

2014

2015 2016

2017

2018

MPC S&P 500 Peers (1)

(1) Peer group includes: BP plc, Chevron Corporation, ExxonMobil Corporation, HollyFrontier Corporation, PBF Energy Inc, Phillips 66 and Valero Energy Corporation.

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16 I MARATHON PETROLEUM CORPORATION I 2018 ANNUAL REPORT

BOARD OF DIRECTORS

Standing: S. Tomasky, A. Alkhayyal, S. Davis, C. Bunch, J. Stice, E. Galante, K. Rucker
Seated: E. Bayh, J. Rohr, G. Heminger, G. Goff, J. Surma

Susan Tomasky
Retired President of AEP Transmission
American Electric Power. Ms. Tomasky
held various executive ofﬁ cer positions at
AEP, including executive vice president and
general counsel, executive vice president
of Finance and chief ﬁ nancial ofﬁ cer, and
executive vice president of Shared Services.
Prior to joining AEP, Ms. Tomasky served
as a partner at the law ﬁ rm of Hogan &
Hartson (now Hogan Lovells).

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,
Reﬁ ning, Marketing and International in
2001, and senior vice president, Industrial
Relations in 2007.

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
senior executive and operational positions
in Yum! Brands’ Pizza Hut division and Kraft
General Foods.

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 ofﬁ cer and board
member in 2002, and chairman and CEO
in 2005. He retired as CEO in 2015 and as
chairman in 2016.

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
ofﬁ cer and a director of Chesapeake
Midstream Partners, L.P., later called
Access Midstream Partners G.P., L.L.C.

Edward G. Galante
Retired Senior Vice President and
Management Committee Member of
ExxonMobil Corporation. Mr. Galante held
various management positions of increasing
responsibility during his more than 30 years
with ExxonMobil Corporation, including
serving as executive vice president of
ExxonMobil Chemical Company from 1999
to 2001.

Kim K.W. Rucker
Former Executive Vice President, General
Counsel and Secretary for Andeavor. Ms.
Rucker previously served as executive vice
president, Corporate and Legal Affairs,
general counsel and corporate secretary of
Kraft Foods Group, Inc. She held executive
positions with Avon Products Inc., Energy
Future Holdings Corp., and Kimberly-Clark
Corporation and was a partner in the law
ﬁ rm of Sidley Austin LLP.

Evan Bayh
Senior Advisor, Apollo Global Management
and Senior Advisor, and of Counsel, Cozen
O’Connor Public Strategies. 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.

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.

Gary R. Heminger
Chairman and CEO of Marathon Petroleum
Corporation. He is also chairman and CEO
of the general partners of MPLX LP and
Andeavor Logistics LP. 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.

Gregory J. Goff
Executive Vice Chairman of Marathon
Petroleum Corporation. Mr. Goff
previously served as chairman, president
and CEO of Andeavor and chairman and
CEO of the general partner of Andeavor
Logistics LP. He completed a 29-year career
with ConocoPhillips, where he held several
senior leadership positions.

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.

6165Txt.indd 16

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MARATHON PETROLEUM CORPORATION I 2018 ANNUAL REPORT I 17

CORPORATE OFFICERS

Back row: C. Case, K. Thomson, J. Wilkins, D. Wehrly, R. Hernandez, D. Linhardt, J. Quaid, D. Heppner
Middle row: R. Hessling, B. Partee, S. Gagle, T. Griffi th, T. Kaczynski, D. Whikehart, D. Sauber, K. Kazarian
Seated: A. Kenney, F. Laird, D. Templin, G. Heminger, G. Goff, M. Benson, R. Brooks

Gary R. Heminger
Chairman and Chief Executive Offi cer

Molly R. Benson
Vice President, Chief Securities, Governance and Compliance Offi cer
and Corporate Secretary

Raymond L. Brooks
Executive Vice President, Refi ning

C. Tracy Case
Senior Vice President, Western Refi ning Operations

Suzanne Gagle
General Counsel

Gregory J. Goff
Executive Vice Chairman

Timothy T. Griffi th
Senior Vice President and Chief Financial Offi cer

David R. Heppner
Vice President, Commercial and Business Development

Richard A. Hernandez
Senior Vice President, Eastern Refi ning Operations

Rick D. Hessling
Senior Vice President, Crude Oil Supply and Logistics

Thomas Kaczynski
Vice President, Finance and Treasurer

Kristina A. Kazarian
Vice President, Investor Relations

Anthony R. Kenney
President, Speedway LLC

Fiona C. Laird
Chief Human Resources Offi cer

D. Rick Linhardt
Vice President, Tax

Brian K. Partee
Senior Vice President, Marketing

Glenn M. Plumby
Senior Vice President and Chief Operating Offi cer, Speedway LLC

John J. Quaid
Vice President and Controller

David R. Sauber
Senior Vice President, Labor Relations, Operations, Health and
Administrative Services

Donald C. Templin
President, Refi ning, Marketing and Supply

Karma M. Thomson
Vice President, Corporate Affairs

Donald W. Wehrly
Vice President and Chief Information Offi cer

David L. Whikehart
Senior Vice President, Light Products Supply and Logistics

James R. Wilkins
Vice President, Environment, Safety and Security

6165Txt.indd 17

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[THIS PAGE INTENTIONALLY LEFT BLANK]

6165Txtc3.indd 18

3/6/19 12:50 PM

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, 2018

OR
‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the transition period from

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 every Interactive Data File required to be
submitted 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 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. ‘
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, 2018 was approximately $31.9 billion.
This amount is based on the closing price of the registrant’s Common Stock on the New York Stock Exchange on June 29,
2018. 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 673,619,190 shares of Marathon Petroleum Corporation Common Stock outstanding as of February 15, 2019.

Documents Incorporated By Reference
Portions of the registrant’s proxy statement relating to its 2019 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.

PROPERTIES

ITEM 3.

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.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ITEM 9.

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.

ITEM 13.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS

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

107

111

183

184

185

186

196

197

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

GLOSSARY OF TERMS

ASC
ANS
ASU
ASR
ATB
barrel

bcf/d
CARB
CARBOB

CBOB
DEI
EBITDA (a non-GAAP financial measure)
EPA
FASB
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
SEC
STAR
TCJA
ULSD
USGC
UST
VIE
VPP
WTI

Accounting Standards Codification
Alaskan North Slope crude oil, an oil index benchmark price
Accounting Standards Update
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
California Air Resources Board
California Reformulated Gasoline Blendstock for Oxygenate
Blending
Conventional Blending for Oxygenate Blending
Designated Environmental Incidents
Earnings Before Interest, Tax, Depreciation and Amortization
United States Environmental Protection Agency
Financial Accounting Standards Board
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
United States Securities and Exchange Commission
South Texas Asset Repositioning
Tax Cuts and Jobs Act of 2017
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:

•

the risk that the cost savings and any other synergies from the Andeavor acquisition may not be fully
realized or may take longer to realize than expected;

disruption from the Andeavor acquisition making it more difficult to maintain relationships with
customers, employees or suppliers;

risks relating to any unforeseen liabilities of Andeavor;

the potential merger, consolidation or combination of MPLX LP with Andeavor Logistics LP;

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

the regional, national and worldwide availability and pricing of refined products, crude oil, natural gas,
NGLs and other feedstocks;

consumer demand for refined products;

our ability to manage disruptions in credit markets or changes to our credit rating;

future levels of capital, environmental or maintenance expenditures, general and administrative and
other expenses;

the success or timing of completion of ongoing or anticipated capital or maintenance projects;

the reliability of processing units and other equipment;

business strategies, growth opportunities and expected investments;

share repurchase authorizations, including the timing and amounts of any common stock repurchases;

the adequacy of our capital resources and liquidity, including but not limited to, availability of
sufficient cash flow to execute our business plan and to effect any share repurchases or dividend
increases, including within the expected timeframe;

the effect of restructuring or reorganization of business components;

the potential effects of judicial or other proceedings on our business, financial condition, results of
operations and cash flows;

continued or further volatility in and/or degradation of general economic, market, industry or business
conditions;

•

compliance with federal and state environmental, economic, health and safety, energy and other
policies and regulations, including the cost of compliance with the Renewable Fuel Standard, and/or
enforcement actions initiated thereunder; 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.

Our forward-looking statements are not guarantees of future performance, and you should not rely unduly on
them, as they involve risks, uncertainties and assumptions that we cannot predict. Material differences between
actual results and any future performance suggested in our forward-looking statements could result from a
variety of factors, 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 and ANDX 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 131 years of experience in the energy business with roots tracing
back to the formation of the Ohio Oil Company in 1887. We are a leading, integrated, downstream energy
company headquartered in Findlay, Ohio. With the acquisition of Andeavor October 1, 2018 (as described further
below), we are the largest independent petroleum product refining, marketing, retail and midstream business in
the United States. We operate the nation’s largest refining system with more than 3 million barrels per day of
crude oil capacity across 16 refineries. MPC’s marketing system includes branded locations across the United
States. We also own and operate retail convenience stores across the United States. MPC’s midstream operations
are primarily conducted through MPLX LP (“MPLX”) and Andeavor Logistics LP (“ANDX”), which own and
operate crude oil and light product transportation and logistics infrastructure as well as gathering, processing and
fractionation assets. We own the general partner and majority limited partner interests in these two midstream
companies.

Our operations consist of three reportable operating segments: Refining & Marketing; Retail; 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 16 refineries in the West Coast,
Gulf Coast and Mid-Continent regions of the United States, purchases refined products and ethanol for
resale and distributes refined products largely through transportation, storage, distribution and
marketing services provided largely by our Midstream segment. We sell refined products to wholesale
marketing customers domestically and internationally, to buyers on the spot market, to our Retail
business segment and to independent entrepreneurs who operate primarily Marathon® branded outlets.

• Retail – sells transportation fuels and convenience products in the retail market across the United States
through company-owned and operated convenience stores, primarily under the Speedway brand, and
long-term fuel supply contracts with direct dealers who operate locations mainly under the ARCO
brand.

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

Andeavor Acquisition

On October 1, 2018, we completed the Andeavor acquisition. Under the terms of the merger agreement,
Andeavor stockholders had the option to choose 1.87 shares of MPC common stock or $152.27 in cash per share
of Andeavor common stock. The merger agreement included election proration provisions that resulted in
approximately 22.9 million shares of Andeavor common stock being converted into cash consideration and the
remaining 128.2 million shares of Andeavor common stock being converted into stock consideration. Andeavor
stockholders received in the aggregate approximately 239.8 million shares of MPC common stock valued at
$19.8 billion and approximately $3.5 billion in cash in connection with the Andeavor acquisition. Through the
Andeavor acquisition, we acquired the general partner and 156 million common units of ANDX, which is a
publicly traded master limited partnership (“MLP”) that was formed to own, operate, develop and acquire
logistics assets.

other third parties, transporting the crude oil to one of its 10 refineries, and producing, marketing and distributing
refined products. Its marketing system included more than 3,300 stations marketed under multiple well-known
fuel brands including ARCO®. Also, as noted above, we acquired the general partner and 156 million common
units of ANDX, a leading growth-oriented, full service, and diversified midstream company which owns and
operates networks of crude oil, refined products and natural gas pipelines, terminals with crude oil and refined
products storage capacity, rail
loading and offloading facilities, marine terminals including storage, bulk
petroleum distribution facilities, a trucking fleet and natural gas processing and fractionation complexes.

This transaction combined two strong, complementary companies to create a leading nationwide U.S.
downstream energy company. The acquisition substantially increases our geographic diversification and scale
and strengthens each of our operating segments by diversifying our refining portfolio into attractive markets and
increasing access to advantaged feedstocks, enhancing our midstream footprint in the Permian Basin, and
creating a nationwide retail and marketing portfolio all of which is expected to substantially improve efficiencies
and our ability to serve customers. We expect the combination to generate up to approximately $1.4 billion in
gross run-rate synergies within the first three years, significantly enhancing our long-term cash flow generation
profile.

See Item 8. Financial Statements and Supplementary Data – Note 5 for additional information on other
acquisitions and investments in affiliates.

Transactions with MPLX

On February 1, 2018, we completed the dropdown of the remaining identified assets related to our strategic
actions to enhance shareholder value announced in January 2017. 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 common units. Immediately following the 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. MPLX financed the cash portion of the February 1, 2018
dropdown with its $4.1 billion 364-day term loan facility, which was entered into on January 2, 2018. On
February 8, 2018, MPLX issued $5.5 billion in aggregate principal amount of senior notes in a public offering.
MPLX used $4.1 billion of the net proceeds of the offering to repay the 364-day term-loan facility. The
remaining proceeds were used to repay outstanding borrowings under MPLX’s revolving credit facility and
intercompany loan agreement with us and for general partnership purposes.

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 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. Our common stock trades on the NYSE under the ticker symbol “MPC.”

MPLX is a diversified, large-cap publicly traded MLP formed by us in 2012 that owns and operates midstream
energy infrastructure and logistics assets, and provides fuels distribution services. As of December 31, 2018, we
owned the general partner and 63.6 percent of the outstanding MPLX common units.

ANDX is a publicly traded MLP that was formed in 2010 to own, operate, develop and acquire logistics assets.
As of December 31, 2018, we owned the general partner and 63.6 percent of the outstanding ANDX common
units.

OUR BUSINESS STRATEGIES

By following our core values, we aim to achieve our strategic vision outlined below.

Core Values and Operational Excellence

Our core values are the foundation for all we do and include the following:

• Health and Safety: We have the highest regard for the health and safety of our employees, contractors

and neighboring communities.

• Environmental Stewardship: We are committed to minimizing our environmental

impact and

continually look for ways to reduce our footprint.

•

Integrity: We uphold the highest standards of business ethics and integrity, enforcing strict principles
of corporate governance. We strive for transparency in all of our operations.

• Corporate Citizenship: We work to make a positive difference in the communities where we have the

privilege to operate.

•

Inclusive Culture: We value diversity and strive to provide our employees with a collaborative,
supportive, and inclusive work environment where they can maximize their full potential for personal
and business success.

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 and environmental record across our operations through the use of a rigorous, independently audited
management system, RC14001®:2015. This management system integrates health, environmental stewardship,
safety and security to ensure compliance and continual improvement. Six of our 16 refineries, the Marathon
Pipeline organization and the Terminal, Transport and Rail organization are already certified to the RC14001
standard. We expect our natural gas gathering and processing operations will begin to seek RC14001 certification
in 2020 and we have begun the process of integrating our newly acquired operations into the RC14004
management system.

As noted in the graph below, our Refining operations continue to demonstrate solid personal safety performance
as compared to similar industry averages.

Safety Performance(a)

e
t
a
R

t
n
e
d
i
c
n
I

e
l
b
a
d
r
o
c
e
R
A
H
S
O

1.0

0.8

0.6

0.4

0.2

0.0

0.45

0.37

0.33

0.36

0.27

2014

2015

2016

2017

2018 (b)

MPC Refining

Industry Average

(a)

(b)

Safety performance is based on the OSHA Recordable Incident Rate for the Refining industry. The industry average source is the Bureau
of Labor Statistics and data is not yet available for 2018.
Legacy Andeavor refineries included beginning full year 2018.

In addition, our corporate headquarters, four of our 16 refineries and 14 additional facilities have earned
designations as an OSHA VPP Star site. This designation recognizes the outstanding efforts of employers and
employees who have implemented effective safety and health management systems and achieved exemplary
occupational safety and health performance. Three additional sites have completed their OSHA VPP inspections
in 2018 and will be eligible for VPP status in 2019.

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. DEI is
includes three categories of
a metric adopted by MPC to capture several categories simultaneously. It
environmental incidents: releases to the environment (air, land or water), environmental permit exceedances and
agency enforcement actions. We rank DEIs in terms of their severity, with Tier 4 being the most severe, and Tier
1 being the least. We report and track these as a leading indicator that helps us to identify potential problems
before they occur. We continually strive for improvements in our environmental performance. In 2018, we
experienced 23 DEIs, a 62 percent reduction from 2013, and we have already begun to integrate our recently
acquired operations into these programs.

In 2018, the EPA recognized Marathon Petroleum Corporation as an ENERGY STAR Partner of the Year, the
only oil and gas company to receive such honor. This award recognized the significant energy efficiency gains
achieved since we established our “Focus on Energy” program at our refineries nearly a decade ago. Through the
implementation of this program, we have earned 75 percent of the total ENERGY STAR certifications awarded
to the U.S. refining sector since 2006. Overall, we have realized considerable savings in energy costs and our
energy efficiency efforts have enabled us to significantly lower our greenhouse gas intensity.

Capture Value and Leverage Integrated Business Model

With the acquisition of Andeavor on October 1, 2018, we believe the enhanced scale and integration of our
midstream, retail and refining assets distinguishes us from our competitors. Our nationwide footprint enables
connectivity to key supply sources and demand hubs. We have additional access to advantaged feedstocks and
our expanded logistics system lowers crude acquisition costs, increases optionality, and increases our speed to
market. Our broader market presence creates new product placement options and our nationwide marketing
channels create even further optimization opportunities. With operations coast to coast, we intend to leverage and
optimize the significant scale of our midstream, retail and refining assets to recognize up to approximately
$1.4 billion of gross run-rate synergies by the end of 2021. Further information about our synergy outlook and
estimated gross run-rate synergies are included below:

Synergy Outlook(a)
(In millions)

Estimated Gross Run-Rate Synergies
(In millions)

$55

$300
$90

$210

$380
$110

$270

$1,400

$400

$1,000

$1,400

$450

$950

$1,000

$290

$710

$600
$120

$480

Retail

Midstream

Corporate

Total

YE2019

YE2020

YE2021

Initial Synergy Estimates(b)

Updated Synergy Estimates

$665

$200

$465

Refining &
Marketing

(a)

(b)

Procurement synergies allocated 50/50 to Refining & Marketing and Corporate.

Initial synergy estimates provided April 30, 2018.

Strategically Invest in Attractive Long-Term Growth Opportunities

We intend to allocate significant portions of our capital to investments focused on enhancing margins system
wide with disciplined allocation to projects with superior returns.

Our Refining & Marketing segment projects are focused on refinery optimization, production of higher value
products, increased capacity to upgrade residual fuel oil and expanded export capacity. Investing to enhance
margins, we will continue our disciplined high-return investments in resid upgrading capacity and the ability to
produce more diesel. We also plan to continue investing in domestic light products supply placement flexibility,
as well as increasing our export capacity.

In our Retail segment, projects are focused on high value growth opportunities, real estate and store portfolio
optimization and technology enhancements. Our plans include conversion of recently acquired locations to the
Speedway brand and systems, growth in existing and new markets, dealer sites, commercial fueling/diesel
expansion, food service through store remodels and high quality acquisitions.

In our Midstream segment, projects are focused on meeting market needs in the Permian, Marcellus and Utica
basins as well as investments in export opportunities and long-haul pipelines. We plan to invest in gathering
systems to create significant growth opportunities in the Permian Basin and in long-haul pipelines to generate
stable, fee-based midstream income while helping to lower feedstock costs for our refineries. We also plan to
expand our value chain by connecting growing natural gas production to demand from our refineries and global
export markets and by connecting growing NGL production and developing new fractionation infrastructure in
the Gulf Coast. Export facilities create the ability to generate third party revenue and meet global demand for
crude, refined products and NGLs.

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 24.9 percent compound annual
growth rate and our board of directors has authorized share repurchases totaling $18.0 billion. Through open
market purchases and two ASR programs, we have repurchased 293 million shares of our common stock for
approximately $13.10 billion, representing approximately 41 percent of our outstanding common shares when we
became a stand-alone company in June 2011. We achieved these shareholder returns while meaningfully
investing in the business and maintaining an investment-grade credit profile. As of December 31, 2018,
$4.90 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 and business
acumen. In addition, we continue to enhance our workforce through active recruitment of the best candidates,
including those from diverse backgrounds, and effective training programs on safety, environmental stewardship,
diversity and inclusion and other professional and technical skills.

OUR OPERATIONS

Our operations consist of three reportable operating segments: Refining & Marketing; Retail; and Midstream.

REFINING & MARKETING

Refineries

We currently own and operate 16 refineries in the Gulf Coast, Mid-Continent and West Coast regions of the
United States with an aggregate crude oil refining capacity of 3,021 mbpcd. On October 1, 2018, we acquired 10

refineries as part of the Andeavor acquisition which added approximately 1,117 mbpcd to our total capacity.
During 2018, our refineries processed 2,081 mbpd of crude oil and 193 mbpd of other charge and blendstocks.
During 2017, our refineries processed 1,765 mbpd of crude oil and 179 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.

terminals and barges to maximize operating
Our refineries are integrated with each other via pipelines,
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 by region.

Gulf Coast Region (1,149 mbpcd)

Galveston Bay, Texas City, Texas Refinery (585 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,
dry gas, fuel-grade coke, refinery-grade propylene, chemical-grade propylene 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 45 percent of the power generated in 2018 was used at the
refinery, with the remaining electricity being sold into the electricity grid.

Garyville, Louisiana Refinery (564 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, refinery-grade propylene, dry gas, slurry 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.

Mid-Continent Region (1,161 mbpcd)

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, propane, anode-grade coke, fuel-
grade coke and aromatics. The Robinson refinery has earned designation as an OSHA VPP Star site.

Detroit, Michigan Refinery (140 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.

El Paso, Texas Refinery (131 mbpcd). Our El Paso Refinery is located approximately three miles east of
downtown El Paso, Texas. The El Paso refinery processes sweet and sour crudes into gasoline, distillates, heavy
fuel oil, asphalt and propane. The refinery has access to the Permian Basin shale region.

St. Paul Park, Minnesota Refinery (98 mbpcd). Our St. Paul Park Refinery is located along the Mississippi River
southeast of St. Paul Park, Minnesota and was originally built in 1939. The St. Paul Park refinery primarily
processes sweet crude from the Bakken region in North Dakota as well as various grades of Canadian sweet and
heavy sour crude and manufactures gasoline, distillates, asphalt, heavy fuel oil, propane and refinery-grade
propylene.

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.

Mandan, North Dakota Refinery (71 mbpcd). Our Mandan Refinery began operations in 1954. The Mandan
refinery processes primarily sweet domestic crude oil from North Dakota and manufactures gasoline, distillates,
propane and heavy fuel oil.

Salt Lake City, Utah Refinery (61 mbpcd). Our Salt Lake City Refinery began operations in 1908 and is now the
largest in Utah. The Salt Lake City refinery processes crude oil from Utah, Colorado, Wyoming and Canada to
manufacture gasoline, distillates, propane and heavy fuel oil.

Gallup, New Mexico Refinery (26 mbpcd). Our Gallup Refinery is located near Gallup, New Mexico and is the
only active refinery in the Four Corners area. The Gallup refinery primarily processes high-quality crude known
as Four Corners Sweet into gasoline, distillate, heavy fuel oil and propane.

Dickinson, North Dakota Refinery (19 mbpcd). Our Dickinson Refinery is located four miles west of Dickinson,
North Dakota and is the first refinery in the U.S. to be built in over 30 years. The Dickinson refinery primarily
processes domestic crude oil from North Dakota and manufactures ultra-low sulfur diesel and gasoline
blendstocks. We plan to convert this refinery into a 12 mbpcd, 100 percent renewable diesel facility that will
process refined soy oil and other organically derived feedstocks by December 2020.

West Coast Region (711 mbpcd)

Los Angeles, California Refinery (363 mbpcd). Our Los Angeles Refinery is located in Los Angeles County, near
the Los Angeles Harbor. The Los Angeles Refinery is the largest refinery on the West Coast and is a major
producer of clean fuels. The Los Angeles refinery processes heavy crude from California’s San Joaquin Valley
and Los Angeles Basin as well as crudes from the Alaska North Slope, South America, West Africa and other
international sources and manufactures cleaner-burning CARB gasoline and CARB diesel fuel, as well as
conventional gasoline, distillates, petroleum coke, anode-grade coke, chemical-grade propylene, fuel-grade coke,
heavy fuel oil and propane.

Martinez, California Refinery (161 mbpcd). Our Martinez Refinery is located in Martinez, California. The
Martinez refinery processes crude oils from California and other domestic and foreign sources and manufactures
cleaner-burning CARB gasoline and CARB diesel fuel, as well as conventional gasoline and distillates,
petroleum coke, propane, heavy fuel oil and refinery-grade propylene.

Anacortes, Washington Refinery (119 mbpcd). Our Anacortes Refinery is located about 70 miles north of Seattle
on Puget Sound. The Anacortes refinery processes Canadian crude, domestic crude from North Dakota and
Alaska North Slope and international crudes to manufacture gasoline, distillates, heavy fuel oil and propane.

Kenai, Alaska Refinery (68 mbpcd). Our Kenai Refinery is located on the Cook Inlet, 60 miles southwest of
Anchorage. The Kenai refinery processes mainly Alaska domestic crude along with limited international crude
and manufactures gasoline, distillates, heavy fuel oil, asphalt and propane.

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 including
production from the refineries acquired in the Andeavor acquisition from October 1, 2018 forward.

(mbpd)

Gasoline

Distillates

Propane

Feedstocks and petrochemicals

Heavy fuel oil

Asphalt

Total

Crude Oil Supply

2018

2017

2016

1,107

773

288

932

641

277

900

617

241

2,316

1,986

1,883

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 and includes production from the
refineries acquired in the Andeavor acquisition from October 1, 2018 forward. The crude oil sourced outside of
North America was acquired from various foreign national oil companies, production companies and trading
companies.

(mbpd)

United States

Canada

Middle East and other international

Total

2018

2017

2016

1,319

297

465

2,081

999

381

385

986

326

387

1,765

1,699

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 80 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 410 million
gallons per year (27 mbpd) and are managed by a co-owner.

Refined Product Marketing

Our refined products are primarily sold to independent retailers, wholesale customers, our brand jobbers, our
Retail segment, airlines, transportation companies and utilities. Our Brand footprint expanded by approximately
1,100 branded outlets in the Western and Mid-Continental regions of the U.S. and Mexico through the Andeavor
acquisition. As of December 31, 2018, there were 6,813 branded outlets in 35 states, the District of Columbia and
Mexico where independent entrepreneurs primarily maintain Marathon-branded outlets. We believe we are one
of the largest wholesale suppliers of gasoline and distillates to resellers and consumers within our 41-state market
area.

The following table sets forth our refined product sales volumes by product group for each of the last three years
including sales from the refineries acquired in the Andeavor acquisition from October 1, 2018 forward.

(mbpd)

Gasoline

Distillates

Propane

Feedstocks and petrochemicals

Heavy fuel oil

Asphalt

Total

2018

2017

2016

1,416

1,201

1,219

847

289

691

265

676

231

2,703

2,301

2,259

Refined Product Sales Destined for Export

We sell gasoline, distillates and asphalt for export, primarily out of our Garyville, Galveston Bay, Anacortes,
Martinez, Los Angeles and Kenai refineries. The following table sets forth our refined product sales destined for
export by product group for the past three years including sales from the refineries acquired in the Andeavor
acquisition from October 1, 2018 forward.

(mbpd)

Gasoline

Distillates

Asphalt and other

Total

2018

2017

2016

117

193

334

192

297

199

296

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, our
Retail segment, and on the spot market. In addition, we sell diesel fuel and gasoline for export to international
customers. The demand for gasoline and distillates is seasonal in many of our markets, with demand typically at
its highest levels during the summer months.

Propane. We produce propane at all of our refineries except Dickinson. 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 split approximately 60 percent and 40 percent between the home
heating market and petrochemical consumers, respectively.

Feedstocks and Petrochemicals. We are a producer and marketer of feedstocks and petrochemicals. Product
availability varies by refinery and includes naptha, raffinate, benzene, butane, alkylate, dry gas, xylene,
propylene, cumene, platformate 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, Galveston Bay and Los Angeles refineries, which is used for power generation and in miscellaneous
industrial applications, and anode-grade coke at our Los Angeles and Robinson refineries, which is used to make
carbon anodes for the aluminum smelting industry.

Heavy Fuel Oil. We produce and market heavy residual fuel oil or related components, including slurry, at all of
our refineries except Dickinson. 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 136 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.

Terminals and Transportation

We transport, store and distribute crude oil, feedstocks and refined products through pipelines, terminals and
marine fleets owned by MPLX, ANDX and third parties in our market areas.

We own a fleet of transport trucks and trailers for the movement of refined products and crude oil. In addition,
we maintain a fleet of leased and owned railcars for the 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.

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 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 first 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. Our marketing operations compete with numerous other independent marketers, integrated oil
companies and high-volume retailers. We compete with companies in the sale of refined products to wholesale
marketing customers,
including private-brand marketers and large commercial and industrial consumers;
companies in the sale of refined products in the spot market; and refiners or marketers in the supply of refined
products to refiner-branded independent entrepreneurs. 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.

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, ANS, 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 our Refining & Marketing segment for the first and fourth quarters may be
lower than for those in the second and third quarters of each calendar year.

RETAIL

Our Retail segment sells gasoline, diesel and merchandise through convenience stores that it owns and operates,
primarily under the Speedway brand, as well as through direct dealer locations. Our company-owned and
operated 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 6.2 million active
members in 2018. 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.

As of December 31, 2018, our Retail segment had 3,923 company-owned and operated convenience stores across
the United States. We acquired approximately 1,100 company-owned and operated retail convenience stores and
fuel only locations as part of the Andeavor acquisition in the Western and Mid-Continental regions of the United
States. In addition, we acquired long-term supply contracts for 1,065 direct dealer locations primarily in Southern
California, largely under the ARCO® brand, which are also included in our Retail segment.

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 127 travel center locations primarily in the Southeast United States as
of December 31, 2018. We also own SuperMom’s®, a high-quality bakery and commissary.

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

Competition, Market Conditions and Seasonality

We face strong competition for sales of retail gasoline, diesel fuel and merchandise. Our competitors include
independent
service stations and convenience stores operated by fully integrated major oil companies,
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
16 percent of the U.S. gasoline market in mid-2018.

Demand for gasoline and diesel fuel 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. As a result, the operating
results for our Retail segment for the first and fourth quarters may be lower than for those in the second and third
quarters of each calendar year. Margins from the sale of merchandise tend to be less volatile than margins from
the retail sale of gasoline and diesel fuel.

MIDSTREAM

The Midstream segment primarily includes the operations of MPLX and ANDX, our sponsored master limited
partnerships, which transport, store, distribute and market crude oil and refined products principally for the
Refining & Marketing segment via refining logistics assets, pipelines, terminals, towboats and barges; gather,
process and transport natural gas; and gather, transport, fractionate, store and market NGLs. The Midstream
segment also includes certain related operations retained by MPC.

MPLX

MPLX owns and operates a network of crude oil, natural gas and product pipelines and has joint ownership
interests in other crude oil and products pipelines. MPLX also owns and operates light products terminals,
storage assets and maintains a fleet of owned and leased towboats and barges. MPLX’s assets also include
natural gas gathering complexes, natural gas processing complexes and NGL fractionation complexes. On
February 1, 2018, we contributed our refining logistics assets to MPLX, which include rail and truck loading
racks and docks.

ANDX

ANDX owns and operates a network of crude oil, natural gas, product and water pipelines and has joint
ownership interests in other crude oil and natural gas pipelines. ANDX owns and operates light products, asphalt
and crude terminals, storage assets and barge docks. ANDX’s assets also include natural gas gathering
complexes, natural gas processing complexes and NGL fractionation complexes.

MPC-Retained Midstream Assets and Investments

We retained ownership interests in several crude oil and products pipeline systems and pipeline companies and
have indirect ownership interests in two ocean vessel joint ventures with Crowley through our investment in
Crowley Coastal Partners.

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

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.

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.

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, see Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations-Environmental Matters and
Compliance Costs.

Air

Greenhouse Gas Emissions

In 2018,

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.
the Trump
Administration continued its shift in climate-related policy away from the Obama Administration’s policies. One
of the major policy shifts is related to the administration’s efforts to repeal and replace the “Clean Power Plan.”
On August 21, 2018, the U.S. Environmental Protection Agency (“EPA”) proposed the Affordable Clean Energy
(“ACE”) rule, which would establish emission guidelines for states to develop plans to address greenhouse gas
emissions from existing coal-fired power plants. The ACE rule would replace the 2015 Clean Power Plan, which
had been stayed by the U.S. Supreme Court. President Trump also announced the United States’ intention to
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.

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.

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. For example, in California, the state legislature adopted SB 32 in
2016. SB 32 set a cap on emissions of 40% below 1990 levels by 2030 but did not establish a particular
mechanism to achieve that target. The legislature also adopted a companion bill, AB 197, that most significantly
directs the CARB to prioritize direct emission reductions on large stationary sources. In 2017, the state
legislature adopted AB 398 which provides direction and parameters on utilizing cap and trade after 2020 to meet
the 40% reduction target from 1990 levels by 2030 specified in SB 32. Compliance with the cap and trade
program is demonstrated through a market-based credit system. The compliance costs associated with these
California regulations are ultimately passed on to the consumer in the form of higher fuel costs. We cannot
currently predict the impact of these regulations on our liquidity, financial position, or results of operations, but
we do not believe such impact will be material.

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
multiple jurisdictions. Although uncertain, these actions could increase our costs of 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.

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 emission intensity 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, reputational or physical climate-related risks.

Clean Air Act

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. In actions dated April 30, 2018, and July 25, 2018,
the EPA finalized
nonattainment designations for certain areas under the lower primary ozone standard. In some areas, these
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 volatile organic
compound (“VOC”) reductions that could result in increased costs to our facilities. We cannot predict the effects
of the various SIPs requirements at this time.

In California, the Board for the South Coast Air Quality Management District (“SCAQMD”) passed amendments
to the Regional Clean Air Incentives Market (“RECLAIM”) that became effective in 2016, requiring a staged
reduction of nitrogen oxide emissions through 2022. In 2017, the State of California passed AB 617, which
requires each air district that is a nonattainment area for one or more air pollutants to adopt an expedited schedule
for implementation of best available retrofit control technology (“BARCT”) on specific facilities. BARCT

applies to all facilities subject to RECLAIM. In response to AB 617, the SCAQMD is currently working to
“sunset” the existing RECLAIM program and replace it with applicable BARCT regulations.

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” 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. Three federal district courts have stayed the Clean
Water Rule in twenty-eight states. 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. On December 11, 2018, the EPA and the Army Corps of Engineers
announced its proposed new definition of “waters of the United States.” The proposal, once finalized, would
replace the 2015 Clean Water Rule.

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 an information request (“ICR”) requesting
significant wastewater and treatment process details from select refineries, seven of which were ours. Responses
to the ICR were submitted to the EPA in early 2018. As of late 2018, the EPA is in the process of reviewing the
ICR response data submitted and determining the next steps for the ELG review. 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,
the 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.

Pursuant to an order received in 2004 from the San Francisco Bay Regional Water Quality Control Board, we are
performing remediation of certain waste management units and completing investigations of the design
conditions of certain active wastewater and storm water impoundments at our Martinez refinery. The
investigative and remedial costs associated with the 2004 Order could have a material impact on our results of
operations. The costs that are estimable and probable at this time have been accrued.

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. In 2018, the EPA and the NHTSA
jointly proposed the Safer Affordable Fuel-Efficient Vehicles Rules for Model Years 2021-2026, which would
propose new Corporate Average Fuel Economy (“CAFE”) standards for model years 2022 through 2026, amend
the 2021 model year CAFE standards, amend the EPA’s carbon dioxide emission standards for model years 2021
through 2025, and establish new carbon dioxide emission standards for model year 2026. The EPA’s preferred
alternative is to retain the model year 2020 standards for both programs through model year 2026. The standards
established by the final regulation may differ. Additionally, California may establish per its Clean Air Act waiver
authority different standards that could apply in multiple states. 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 26.0 billion gallons in 2018, 28.0 billion gallons in 2019, and increase to 36.0 billion gallons by 2022.
Within the total volume of renewable fuel, EISA established an advanced biofuel volume of 11.0 billion gallons
in 2018, 13.0 billion gallons in 2019, 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 7.0 billion gallons in
2018, 8.5 billion gallons in 2019, 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 the 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 Fuel Standards and be detrimental to the RIN market. The 2017 and 2018 RFS
volumes have also been challenged in court.

On November 30, 2018, the EPA finalized RFS volume requirements for the year 2019, and the biomass-based
diesel volume requirement for year 2020. The EPA used its cellulosic waiver authority to reduce the volumes for
2019 from the statutory amounts to the following: 19.92 billion gallons total renewable fuel; 4.92 billion gallons
advanced biofuel; and 418 million gallons cellulosic biofuel. The EPA set the biomass-based diesel volume
requirement for 2020 at 2.43 billion gallons, which is significantly greater than the statutory floor of 1.0 billion
gallons.

The RFS2 is 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”). Since 2016, the
volume requirements have resulted 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.

We have made investments in infrastructure capable of expanding biodiesel blending capability to help comply
with the annually-increasing 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. As a
producer of biodiesel, we 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. The EPA’s final decision was challenged in court 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.

In addition to federal renewable fuel standards, certain states have, or are considering, promulgation of state
renewable or low carbon fuel standards. For example, California began implementing its Low Carbon Fuel
Standard (“LCFS”) in January 2011. In September 2015, the CARB approved the re-adoption of the LCFS,
which became effective on January 1, 2016, to address procedural deficiencies in the way the original regulation
was adopted. The LCFS was amended again in 2018 with the current version targeting a 20 percent reduction in
fuel carbon intensity from a 2010 baseline by 2030.

In sum, 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 decrease 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. From 2014 through 2018,
we made approximately $490 million in capital expenditures to comply with these standards, and expect to make
approximately $260 million in capital expenditures for these standards in 2019.

Tribal Lands

Various federal agencies, including the EPA and the Department of the Interior, along with certain Native
American tribes, promulgate and enforce regulations pertaining to oil and gas operations on Native American
tribal lands where we operate. These regulations include such matters as lease provisions, drilling and production
requirements, and standards to protect environmental quality and cultural resources. For example, the EPA has
established a preconstruction permitting program for new and modified minor sources throughout Indian country,
and new and modified major sources in nonattainment areas in Indian country. In addition, each Native American
tribe is a sovereign nation having the right to enforce certain laws and regulations and to grant approvals
independent from federal, state and local statutes and regulations. These laws and regulations may increase our
costs of doing business on Native American tribal lands and impact the viability of, or prevent or delay our
ability to conduct, our operations on such lands.

TRADEMARKS, PATENTS AND LICENSES

Our Marathon trademark is material to the conduct of our refining and marketing operations, and our Speedway
and ARCO trademarks are material to the conduct of our retail operations. Additionally, the retail and marketing
businesses we acquired in the Andeavor acquisition primarily use the Shell® and Mobil® brands for fuel sales
and ampm® and Giant® brands for convenience store merchandise. 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 60,350 regular full-time and part-time employees as of December 31, 2018, which
includes approximately 40,230 employees of our Retail segment.

Approximately 4,780 of our employees are covered by collective bargaining agreements. Of these employees,
approximately 1,465 employees at our Galveston Bay, Mandan and Martinez refineries are covered by collective
bargaining agreements which were set to expire on January 31, 2019. The parties continue their negotiations
toward a new agreement, and are working under rolling extensions. Approximately 425 employees at our
Martinez Chemical Plant, our Los Angeles refinery and our Galveston Bay refinery are covered by collective
bargaining agreements expiring over the next several months. Approximately 410 hourly employees at Speedway
are represented under collective bargaining agreements. The majority of these employees work at certain retail
locations in New York and New Jersey under agreements which expire on March 14, 2019 and June 30, 2019,
respectively. The remaining Speedway represented employees are drivers in Minnesota under an agreement
which expires in 2021. Approximately 300 employees at our St. Paul Park and Gallup refineries are covered by
collective bargaining agreements scheduled to expire in 2020. Approximately 1,620 employees at our Anacortes,
Canton, Catlettsburg, Los Angeles, and Salt Lake City refineries are covered by collective bargaining agreements
that are due to expire in 2022. The remaining 560 hourly represented employees are covered by collective
bargaining agreements with expiration dates ranging from 2021 to 2024.

Executive and Corporate Officers of the Registrant

The executive and corporate officers of MPC are as follows:

Name

Gary R. Heminger

Gregory J. Goff

Molly R. Benson(a)

Raymond L. Brooks

C. Tracy Case(a)

Suzanne Gagle

Timothy T. Griffith

David R. Heppner(a)

Richard A. Hernandez(a)

Rick D. Hessling(a)

Thomas Kaczynski

Kristina A. Kazarian(a)

Anthony R. Kenney

Fiona C. Laird(a)

D. Rick Linhardt(a)

Brian K. Partee(a)

Glenn M. Plumby(a)

John J. Quaid

David R. Sauber(a)

Donald C. Templin

Karma M. Thomson(a)

Donald W. Wehrly(a)

David L. Whikehart(a)

James R. Wilkins(a)

(a) Corporate officer.

Age as of

February 1, 2019 Position with MPC

Chairman and Chief Executive Officer

Executive Vice Chairman

Vice President, Chief Securities, Governance & Compliance Officer
and Corporate Secretary

Executive Vice President, Refining

Senior Vice President, Western Refining Operations

General Counsel

Senior Vice President and Chief Financial Officer

Vice President, Commercial and Business Development

Senior Vice President, Eastern Refining Operations

Senior Vice President, Crude Oil Supply and Logistics

Vice President, Finance and Treasurer

Vice President, Investor Relations

President, Speedway LLC

Chief Human Resources Officer

Vice President, Tax

Senior Vice President, Marketing

Senior Vice President and Chief Operating Officer, Speedway LLC

Vice President and Controller

Senior Vice President, Labor Relations, Operations, Health and
Administrative Services

President, Refining, Marketing and Supply

Vice President, Corporate Affairs

Vice President and Chief Information Officer

Senior Vice President, Light Products, Supply and Logistics

Vice President, Environment, Safety and Security

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 June 2011. Mr. Heminger also served as President
from July 2011 until June 2017.

Mr. Goff was appointed Executive Vice Chairman effective October 2018. Prior to this appointment, Mr. Goff
was President and Chief Executive Officer of Andeavor beginning in May 2010 and Chairman of its Board of
Directors beginning in December 2014.

Ms. Benson was appointed Vice President, Chief Compliance Officer and Corporate Secretary in March 2016
and Chief Securities and Governance Officer in May 2018. Prior to her appointment in 2016, Ms. Benson was
Assistant General Counsel, Corporate and Finance beginning in April 2012.

Mr. Brooks was appointed Executive Vice President, Refining effective October 2018. Prior to this appointment,
Mr. Brooks was Senior Vice President, Refining beginning in March 2016. Previously, Mr. Brooks served as
General Manager of the Galveston Bay refinery beginning in February 2013, and General Manager of the
Robinson refinery beginning in 2010.

Mr. Case was appointed Senior Vice President, Western Refining Operations effective October 2018. Prior to
this appointment, Mr. Case was General Manager of the Garyville refinery beginning in December 2014.
Previously, Mr. Case served as General Manager of the Detroit refinery beginning in June 2010.

Ms. Gagle was appointed General Counsel in March 2016. Prior to this appointment, Ms. Gagle was Assistant
General Counsel, Litigation and Human Resources beginning in April 2011.

Mr. Griffith was appointed Senior Vice President and Chief Financial Officer in March 2015. Prior to this
appointment, Mr. Griffith served as Vice President, Finance and Investor Relations, and Treasurer beginning in
January 2014. Previously, Mr. Griffith was Vice President of Finance and Treasurer beginning in August 2011.

Mr. Heppner was appointed Vice President, Commercial and Business Development effective October 2018.
Prior to this appointment, Mr. Heppner was Senior Vice President of Engineering Services and Corporate
Support of Speedway LLC beginning in September 2014. Previously, Mr. Heppner served as Director, Wholesale
Marketing beginning in January 2010.

Mr. Hernandez was appointed Senior Vice President, Eastern Refining Operations effective October 2018. Prior
to this appointment, Mr. Hernandez was General Manager of the Galveston Bay refinery beginning in February
2016. Previously, Mr. Hernandez served as the General Manager of the Catlettsburg refinery beginning in June
2013.

Mr. Hessling was appointed Senior Vice President, Crude Oil Supply and Logistics effective October 2018. Prior
to this appointment, Mr. Hessling was Manager, Crude Oil & Natural Gas Supply and Trading beginning in
September 2014. Previously, Mr. Hessling served as Crude Oil Logistics & Analysis Manager beginning in July
2011.

Mr. Kaczynski was appointed Vice President, Finance and Treasurer in August 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, Mr. Kaczynski served as Vice President, Investor
Relations, of Goodyear Tire and Rubber Company beginning in 2013.

Ms. Kazarian was appointed Vice President, Investor Relations in April 2018. Prior to this appointment,
Ms. Kazarian was Managing Director and head of the MLP, Midstream and Refining Equity Research teams at
Credit Suisse, a global
investment bank and financial services company, beginning in September 2017.
Previously, Ms. Kazarian worked at Deutsche Bank, a global investment bank and financial services company, as
Managing Director of MLP, Midstream and Natural Gas Equity Research beginning in September 2014, and as
an analyst specializing on various energy industry subsectors with Fidelity Management & Research Company, a
privately held investment manager, beginning in 2005.

Mr. Kenney has served as President of Speedway LLC since August 2005.

Ms. Laird was appointed Chief Human Resources Officer effective October 2018. Prior to this appointment,
Ms. Laird was Chief Human Resources Officer at Andeavor beginning in February 2018. Previously, Ms. Laird
was the Chief Human Resources and Communications Officer for Newell Brands, a global consumer goods
company, beginning in May 2016 and Executive Vice President, Human Resources for Unilever, a global
consumer goods company, beginning in July 2011.

Mr. Linhardt was appointed Vice President, Tax in February 2018. Prior to this appointment, Mr. Linhardt served
as Director of Tax beginning in June 2017. Previously, Mr. Linhardt served as Manager of Tax Compliance
beginning in May 2013.

Mr. Partee was appointed Senior Vice President, Marketing effective October 2018. Prior to this appointment,
Mr. Partee served as Vice President, Business Development beginning in February 2018. Previously, Mr. Partee
was Director of Business Development beginning in January 2017, Manager of Crude Oil Logistics beginning in
September 2014 and Vice President, Business Development and Franchise at Speedway beginning in November
2012.

Mr. Plumby was named Senior Vice President and Chief Operating Officer, Speedway LLC in January 2018 and
was appointed an officer of MPC in February 2019. Previously, Mr. Plumby was Senior Vice President of
Operations of Speedway LLC beginning in September 2013 and Vice President of Operations of Speedway LLC
beginning in December 2010.

Mr. Quaid was appointed Vice President and Controller in June 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 as Vice President and Treasurer at U.S. Steel beginning
in August 2011.

Mr. Sauber was appointed Senior Vice President, Labor Relations, Operations, Health and Administrative
Services effective October 2018. Prior to this appointment, Mr. Sauber was Senior Vice President, Human
Resources, Health and Administrative Services beginning in January 2018, and Vice President, Human
Resources and Labor Relations beginning February 2017. Previously, Mr. Sauber was Vice President, Human
Resources Policy, Benefits and Services of Shell Oil Company, a global energy and petrochemical company,
beginning in 2013.

Mr. Templin was appointed President, Refining, Marketing and Supply effective October 2018. Prior to this
appointment, Mr. Templin served as President beginning in July 2017; Executive Vice President beginning in
January 2016; Executive Vice President, Supply, Transportation and Marketing beginning in March 2015; and
Senior Vice President and Chief Financial Officer beginning in June 2011.

Ms. Thomson was appointed Vice President, Corporate Affairs effective October 2018. Prior to this appointment,
Ms. Thomson served as Vice President of Andeavor Logistics beginning in June 2017. Previously, at Andeavor,
Ms. Thomson served as Vice President, Salt Lake City refinery beginning in October 2012.

Mr. Wehrly was appointed Vice President and Chief Information Officer effective June 2011.

Mr. Whikehart was appointed Senior Vice President, Light Products, Supply and Logistics effective October
2018. Prior to this appointment, Mr. Whikehart served as Vice President, Environment, Safety and Corporate
Affairs effective February 2016. Previously, Mr. Whikehart served as Vice President, Corporate Planning,
Government & Public Affairs beginning in January 2016, and Director, Product Supply and Optimization
beginning in March 2011.

Mr. Wilkins was appointed Vice President, Environment, Safety and Security effective October 2018. Prior to
this appointment, Mr. Wilkins was Director, Environment, Safety, Security and Product Quality beginning
February 2016. Previously, Mr. Wilkins served as Director, Refining Environmental, Safety, Security and
Process Safety Management beginning in June 2013.

Available Information

information about MPC,

General
including Corporate Governance Principles and Charters for the Audit
Committee, Compensation Committee and Corporate Governance and Nominating Committee, can be found at
www.marathonpetroleum.com by selecting “Investors” under “Corporate Governance” and “Board of Directors”.
In addition, our Code of Business Conduct and Code of Ethics for Senior Financial Officers are also available in
this same location. We will post on our website any amendments to, or waivers from, either of our codes
requiring disclosure under applicable rules within four business days of the amendment or waiver.

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. 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. 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 factors that are
beyond our control, including:

• 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;

transportation infrastructure availability,
refineries in our markets;

utilization rates of refineries;

local market conditions and operation levels of other

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, threatened or actual terrorist incidents, armed conflict, or other global political
conditions;

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 and 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), and 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 such as 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 or railroads 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, material reduction or cessation
of service of such a pipeline or railway, whether due to private party or governmental action or other reason,
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 may 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.

In addition, we operate in and adjacent to environmentally sensitive waters where tanker, pipeline, rail car and
refined product transportation and storage operations are closely regulated by federal, state and local agencies
and monitored by environmental interest groups. Our coastal refineries receive crude oil and other feedstocks by
tanker. In addition, our refineries receive crude oil and other feedstocks by rail car,
truck and barge.
Transportation and storage of crude oil, other feedstocks and refined products over and adjacent to water involves
inherent risk and subjects us to the provisions of the OPA-90 and state laws in U.S. coastal and Great Lakes
states and states bordering inland waterways on which we operate, as well as international
laws in the
jurisdictions in which we operate. If we are unable to promptly and adequately contain any accident or discharge
involving tankers, pipelines, rail cars or above ground storage tanks transporting or storing crude oil, other
feedstocks or refined products, we may be subject to substantial liability. In addition, the service providers we
have contracted to aid us in a discharge response may be unavailable due to weather conditions, governmental
regulations or other local or global events. International, federal or state rulings could divert our response
resources to other global events.

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, cybersecurity breaches 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. Marine vessel
charter agreements may not provide complete indemnity for oil spills, and any marine charterer’s liability
insurance we carry may not cover all losses. 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, and the interruption or failure of any
information technology system, including an interruption or failure due to a cybersecurity breach, 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, including our network infrastructure and 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
authorizations at our retail outlets, financial transactions, banking and 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 cybersecurity 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 multiple layers of
cybersecurity protections, infrastructure protection technologies, disaster recovery plans and employee training.
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. State and federal cybersecurity legislation could also impose new
requirements, which could increase our cost of doing business.

Competition in our industry is intense, and very aggressive competition could adversely impact our
business.

We compete with a broad range of refining and marketing companies, including certain multinational oil
companies. Competitors with integrated operations with exploration and production resources and broader access
to resources may be better able to withstand volatile market conditions and to bear the risks inherent in the
refining industry. For example, competitors that engage in exploration and production of crude oil may be better
positioned to withstand periods of depressed refining margins or feedstock shortages.

We also 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 trucks, 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.

Our investments in joint ventures decrease our ability to manage risk.

We conduct some of our operations through joint ventures in which we share control over certain economic and
business interests with our joint venture partners. Our joint venture partners may have economic, business or
legal interests or goals that are inconsistent with our goals and interests or may be unable to meet their
obligations. Failure by us, or an entity in which we have a joint-venture interest, to adequately manage the risks
associated with any acquisitions or joint ventures could have a material adverse effect on the financial condition
or results of operations of our joint ventures and adversely affect 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, 2018, our total debt obligations for borrowed money and capital lease obligations were
$27.98 billion, including $13.86 billion of obligations of MPLX and $5.01 billion of obligations of ANDX. 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. Our credit rating is determined by independent credit rating
agencies. We cannot provide assurance that any of our credit ratings will remain in effect for any given period of
time or that a rating will not be lowered or withdrawn entirely by a rating agency if, in its judgment,
circumstances so warrant. Any changes in our credit capacity or credit profile 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 ANDX, and those of our predecessors and Andeavor’s
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.

bargaining agreements which were set to expire on January 31, 2019. The parties continue their negotiations
toward a new agreement, and are working under rolling extensions. Approximately 425 employees at our
Martinez Chemical Plant, our Los Angeles refinery and our Galveston Bay refinery are covered by collective
bargaining agreements expiring over the next several months. Approximately 410 hourly employees at Speedway
are represented under collective bargaining agreements. The majority of these employees work at certain retail
locations in New York and New Jersey under agreements which expire on March 14, 2019 and June 30, 2019,
respectively. The remaining Speedway represented employees are drivers in Minnesota under an agreement
which expires in 2021. Approximately 300 employees at our St. Paul Park and Gallup refineries are covered by
collective bargaining agreements scheduled to expire in 2020. Approximately 1,620 employees at our Anacortes,
Canton, Catlettsburg, Los Angeles, and Salt Lake City refineries are covered by collective bargaining agreements
that are due to expire in 2022. The remaining 560 hourly represented employees are covered by collective
bargaining agreements with expiration dates ranging from 2021 to 2024. These contracts may be renewed at an
increased cost to us. In addition, we have experienced in the past, and may experience in the future, 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.

In addition, California requires refinery owners to pay prevailing wages to contract craft workers and restricts
refiners’ ability to hire qualified employees to a limited pool of applicants. Legislation or changes in regulations
could result in labor shortages higher labor costs, and an increased risk that contract employees become joint
employees, which could trigger bargaining issues, employment discrimination liability issues as well as wage and
benefit consequences, especially during critical maintenance and construction periods.

Two of our subsidiaries act as general partners of publicly traded master limited partnerships, 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 MLP. Another of our subsidiaries
acts as the general partner of ANDX, a publicly traded MLP. We acquired control of ANDX’s general partner
through the Andeavor acquisition. Our control of the general partners of MPLX and ANDX may increase the
possibility of claims of breach of fiduciary duties, including claims of conflicts of interest related to MPLX and
ANDX. 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 or ANDX’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 or ANDX’s business, results of operations and
financial condition, and could reduce their 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. Similarly, ANDX’s operations
are dependent in part on the production of crude oil in the Bakken region and the production of natural gas and
NGLs in the Green River, Uinta and Williston basins.

We have no control over the level of drilling activity in the areas of MPLX’s or ANDX’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 or ANDX assets, producers may choose not to develop those
reserves. If MPLX and ANDX are not able to obtain new supplies of oil, natural gas or NGLs to replace the
natural decline in volumes from existing wells, throughput on their pipelines and the utilization rates of their
facilities would decline, which could have a material adverse effect on their business, results of operations and
financial condition and could reduce their 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 and ANDX’s facilities and
adversely affect their 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, the purchase and
resale of natural gas and NGLs in the ordinary course exposes our Midstream operations to 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 production processes. Also, the significant volatility in natural gas, NGL and oil prices could adversely impact
MPLX’s or ANDX’s unit price, thereby increasing its distribution yield and cost of capital. Such impacts could
adversely impact MPLX’s and ANDX’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.

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.

We do not own all of the land on which our assets are located, which could disrupt our operations.

We do not own all of the land on which certain of our assets are located, particularly our midstream assets, but
rather obtain the rights to construct and operate such assets on land owned by third parties and governmental
agencies for a specific period of time. Therefore, we are subject to the possibility of more burdensome terms and
increased costs to retain necessary land use if our leases, rights-of-way or other property rights lapse or terminate
or it is determined that we do not have valid leases, rights-of-way or other property rights. Our loss of these
rights, including loss through our inability to renew leases, right-of-way agreements or permits on satisfactory
terms or at all, could have a material adverse effect on our business, financial condition, results of operations and
cash flows.

RISKS RELATING TO THE ANDEAVOR ACQUISITION

The Andeavor acquisition may not be accretive, and may be dilutive, to MPC’s earnings per share and
cash flow from operations per share, which may negatively affect the market price of shares of MPC
common stock.

The Andeavor acquisition may not be accretive, and may be dilutive, to MPC’s earnings per share and cash flow
from operations per share. Earnings per share and cash flow from operations per share in the future are based on
preliminary estimates that may materially change. In addition, future events and conditions could decrease or
delay any accretion, result in dilution or cause greater dilution than is currently expected, including:

•

adverse changes in energy market conditions;

commodity prices for oil, natural gas and natural gas liquids;

production levels;

operating results;

competitive conditions;

laws and regulations affecting the energy business;

capital expenditure obligations;

higher than expected integration costs;

lower than expected synergies; and

general economic conditions.

Any dilution of, or decrease or delay of any accretion to, MPC’s earnings per share or cash flow from operations
per share could cause the price of MPC’s common stock to decline.

MPC has incurred and will continue to incur significant costs in connection with the Andeavor acquisition,
which may be in excess of those anticipated by MPC.

MPC has incurred substantial expenses in connection with the Andeavor acquisition. MPC expects to continue to
incur a number of non-recurring costs associated with combining the operations of the two companies and
achieving desired synergies. These fees and costs have been, and will continue to be, substantial.

MPC will also incur transaction fees and costs related to formulating and implementing integration plans,
including facilities and systems consolidation costs and employment-related costs. Additional unanticipated costs
may be incurred in the integration of the two companies’ businesses. Although MPC expects that the elimination
of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses,
should allow MPC to offset integration-related costs over time, this net benefit may not be achieved in the near
term, or at all. See the risk factor below entitled “The integration of Andeavor into MPC may not be as successful
as anticipated.”

The costs described above, as well as other unanticipated costs and expenses, could materially and adversely
affect MPC’s results of operations, financial position and cash flows.

The integration of Andeavor into MPC may not be as successful as anticipated.

The Andeavor acquisition involves numerous operational, strategic, financial, accounting, legal, tax and other
risks; potential liabilities associated with the acquired businesses; and uncertainties related to design, operation
and integration of Andeavor’s internal control over financial reporting. Difficulties in integrating Andeavor into
MPC may result in legacy Andeavor assets performing differently than expected, in operational challenges or in
the failure to realize anticipated expense-related efficiencies. Potential difficulties that may be encountered in the
integration process include, among other factors:

•

the inability to successfully integrate the businesses of Andeavor into MPC in a manner that permits
MPC to achieve the full revenue and cost savings anticipated from the merger;

complexities associated with managing the larger, more complex, integrated business;

not realizing anticipated operating synergies or incurring unexpected costs to realize such synergies;

integrating personnel from the two companies while maintaining focus on providing consistent, high-
quality products and services;

potential unknown liabilities and unforeseen expenses, delays or regulatory conditions associated with
the merger;

loss of key employees;

integrating relationships with customers, vendors and business partners;

performance shortfalls as a result of the diversion of management’s attention caused by completing the
merger and integrating Andeavor’s operations into MPC; and

the disruption of, or the loss of momentum in, each company’s ongoing business or inconsistencies in
standards, controls, procedures and policies.

MPC’s results may suffer if it does not effectively manage its expanded operations following the Andeavor
acquisition.

MPC’s success depends, in part, on its ability to manage its expansion following the Andeavor acquisition, which
poses numerous risks and uncertainties, including the need to integrate the operations and business of Andeavor

into its existing business in an efficient and timely manner, to combine systems and management controls and to
integrate relationships with customers, vendors and business partners.

MPC may fail to realize all of the anticipated benefits of the Andeavor acquisition.

The success of the Andeavor acquisition depends, in part, on MPC’s ability to realize the anticipated benefits and
including the annual gross, run-rate,
cost savings from combining MPC’s and Andeavor’s businesses,
commercial and corporate synergies that MPC expects to realize within the first
three years after the
combination. The anticipated benefits and cost savings of the Andeavor acquisition may not be realized fully or
at all, may take longer to realize than expected, may require more non-recurring costs and expenditures to realize
than expected or could have other adverse effects. Some of the assumptions that MPC has made, such as with
respect to anticipated: operating synergies or the costs associated with realizing such synergies; significant long-
increase in scale and geographic diversity;
term cash flow generation;
complementary growth platforms for both midstream and retail businesses; positioning for potentially significant
benefits from the International Maritime Organization change in specifications for marine bunker fuel; the
expansion in opportunities for logistics growth in crude oil production basins and regions; further optimization of
crude supply; and the continuation of MPC’s investment grade credit profile, may not be realized. The
integration process may result
the disruption of ongoing businesses or
inconsistencies in standards, controls, procedures and policies. There could be potential unknown liabilities and
unforeseen expenses associated with the Andeavor acquisition that were not discovered in the course of
performing due diligence.

in the loss of key employees,

the benefit from a substantial

We have recorded goodwill and other intangible assets that could become impaired and result in material
non-cash charges to our results of operations.

We accounted for the Andeavor and other acquisitions using the acquisition method of accounting, which
requires that the assets and liabilities of the acquired business be recorded to our balance sheet at their respective
fair values as of the acquisition date. Any excess of the purchase consideration over the fair value of the acquired
net assets is recognized as goodwill.

As of December 31, 2018, our balance sheet reflected $20.2 billion and $3.4 billion of goodwill and other
intangible assets, respectively. These amounts include the preliminary estimates of goodwill and other intangible
assets of $16.3 billion and $2.8 billion, respectively, recognized in connection with the Andeavor acquisition. To
the extent the value of goodwill or intangible assets becomes impaired, we may be required to incur material
non-cash charges relating to such impairment. Our operating results may be significantly impacted from both the
impairment and the underlying trends in the business that triggered the impairment.

RISKS RELATED TO OUR INDUSTRY

Meeting the requirements of evolving 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,

inherently safer technology, 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.

The EPA’s National Ambient Air Quality Standards (“NAAQS”) are among the regulations that impact our
operations. 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. In actions dated April 30, 2018, and July 25, 2018, the EPA finalized nonattainment
designations for certain areas under the lower primary ozone standard. In some areas, these 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 EPA announced that it plans to review the NAAQS level for particulate matter
(“PM”). A reduction in the PM NAAQS and subsequent designation of nonattainment could also result in
increased costs associated with, or result in cancellation or delay of, capital projects at our facilities.

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. On
November 30, 2018, EPA finalized RFS volume requirements for the year 2019, and the biomass-based diesel
volume requirement for year 2020. The EPA used its cellulosic waiver authority to reduce the volumes for 2019
from the statutory amounts to the following: 19.92 billion gallons total renewable fuel; 4.92 billion gallons
advanced biofuel; and 418 million gallons cellulosic biofuel. The EPA set the biomass-based diesel volume
requirement for 2020 at 2.43 billion gallons, which is significantly greater than the statutory floor of 1.0 billion
gallons.

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 was retroactively reinstated in early 2018. It is not certain
whether the credit will be reinstituted beyond 2018.

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. Since 2014, we have
made approximately $490 million in capital expenditures necessary to comply with these standards. For 2019, we
expect an additional $260 million of capital expenditures to comply with these standards.

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.

Climate change and greenhouse gas emission regulation could affect our operations, energy consumption
patterns and regulatory obligations, any of which could affect our results of operations and financial
condition.

Currently, multiple legislative and regulatory measures to address greenhouse gas (including carbon dioxide,
methane and nitrous oxides) and other emissions are in various phases of consideration, promulgation or
implementation. These include actions to develop international, federal, regional or statewide programs, which
could require reductions in our greenhouse gas or other emissions, establish a carbon tax and decrease the
demand for our refined products. Requiring reductions in these 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 emissions programs, including acquiring emission credits or allotments.

For example, in California, the state legislature adopted SB 32 in 2016. SB 32 set a cap on emissions of 40%
below 1990 levels by 2030 but did not establish a particular mechanism to achieve that target. The legislature
also adopted a companion bill, AB 197, that most significantly directs the CARB to prioritize direct emission
reductions on large stationary sources. In 2017, the state legislature adopted AB 398 which provides direction
and parameters on utilizing cap and trade after 2020 to meet the 40% reduction target from 1990 levels by 2030
specified in SB 32. In 2009, CARB adopted the Low Carbon Fuel Standard (“LCFS”). The LCFS was amended
again in 2018 with the current version targeting a 20% reduction in fuel carbon intensity from a 2010 baseline by
2030. Compliance is demonstrated by blending lower carbon intensity biofuels into gasoline and diesel or by
purchasing credits. Compliance with each of the cap and trade and LCFS programs is demonstrated through a
market-based credit system. Other states are proposing, or have already promulgated, low carbon fuel standards
or similar initiatives to reduce emissions from the transportation sector. If we are unable to pass the costs of
compliance on to our customers, sufficient credits are unavailable for purchase, we have to pay a significantly
higher price for credits, or if we are otherwise unable to meet our compliance obligation, our financial condition
and results of operations could be adversely affected.

Regional and state climate change and air emissions goals and regulatory programs are complex, subject to
change and considerable uncertainty due to a number of factors including technological feasibility, legal
challenges and potential changes in federal policy. Increasing concerns about climate change have also resulted
in a number of international and national measures to limit greenhouse gas emissions. Additional stricter
measures can be expected in the future and any of these changes may have a material adverse impact on our
business or financial condition.

International climate change-related efforts, such as the 2015 United Nations Conference on Climate Change,
which led to the creation of the Paris Agreement, may impact the regulatory framework of states whose policies
directly influence our present and future operations. Though the United States has announced its intention to

withdraw from the Paris Agreement, withdrawal it is not possible until November 2019 at the earliest. If the
United States declines to withdraw, the extent of such regulation and the cost associated with compliance cannot
be predicted.

We could also face increased climate-related litigation with respect to our operations or products. Governmental
and other entities in California, New York, Maryland and Rhode Island have filed lawsuits against coal, gas, oil
and petroleum companies, including the Company. The lawsuits allege damages as a result of climate change and
the plaintiffs are seeking unspecified damages and abatement under various tort theories. Similar lawsuits may be
filed in other jurisdictions. There remains a high degree of uncertainty regarding the ultimate outcome of these
lawsuits, as well as their potential effect on the Company’s business, financial condition, results of operation and
cash flows.

Regulatory and other requirements concerning the transportation of crude oil and other commodities by
rail may cause increases in transportation costs or limit the amount of crude oil that we can transport by
rail.

We rely on a variety of systems to transport crude oil, including rail. Rail transportation is regulated by federal,
state and local authorities. New regulations or changes in existing regulations could result
in increased
compliance expenditures. For example, in 2015 the U.S. Department of Transportation issued new standards and
regulations applicable to crude-by-rail transportation (Enhanced Tank Car Standards and Operational Controls
for High-Hazard Flammable Trains). These or other regulations that require the reduction of volatile or
flammable constituents in crude oil that is transported by rail, change the design or standards for rail cars used to
transport the crude oil we purchase, change the routing or scheduling of trains carrying crude oil, or require any
other changes that detrimentally affect the economics of delivering North American crude oil by rail could
increase the time required to move crude oil from production areas to our refineries, increase the cost of rail
transportation and decrease the efficiency of shipments of crude oil by rail within our operations. Any of these
outcomes could have a material adverse effect on our business and results of operations.

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

We have mature systems in place to manage potential acute physical risks, such as floods, hurricane-force winds,
wildfires and snowstorms, 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 weather 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 or other climate conditions 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 additional pipelines
along existing pipelines, 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, negative public perception
regarding the oil and gas industry, and concerns regarding greenhouse gas emissions downstream of pipeline
operations. In addition, government disruptions, such as a U.S. federal government shutdown, may delay or halt
the granting and renewal of permits, licenses and other items required by us and our customers to conduct our
business. We have experienced construction delays related to these factors as a result of the U.S. federal
government’s recent shutdown. Our expansion or construction 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.

increases related to capital spending programs involving engineering, procurement and
Delays or cost
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.

We are subject to risks arising from our non-U.S. operations and generally to worldwide political and
economic developments.

We have expanded the scope of our non-U.S. operations through the Andeavor acquisition, particularly in
Mexico, South America and Asia. Our business, financial condition, results of operations and cash flows could
be negatively impacted by disruptions in any of these markets, including economic instability, restrictions on the
transfer of funds, duties and tariffs, transportation delays, import and export controls, changes in governmental
labor unrest, security issues involving key personnel and changing regulatory and political
policies,
environments. In addition, if trade relationships deteriorate with these countries, if existing trade agreements are
modified or terminated, new economic sanctions relevant to such jurisdictions are passed or if taxes, border
adjustments or tariffs make trading with these countries more costly, it could have a material adverse effect on
our business, financial condition, results of operations and cash flows.

We are required to comply with U.S. and international laws and regulations, including those involving anti-
bribery, anti-corruption and anti-money laundering. For example, the Foreign Corrupt Practices Act and similar
laws and regulations prohibit improper payments to foreign officials for the purpose of obtaining or retaining
business or gaining any business advantage. Our compliance policies and programs mandate compliance with all
applicable anti-corruption laws but may not be completely effective in ensuring our compliance. Our training and
compliance program and our internal control policies and procedures may not always protect us from violations
committed by our employees or agents. Actual or alleged violations of these laws could disrupt our business and
cause us to incur significant legal expenses, and could result in a material adverse effect on our reputation,
business, financial condition, results of operations and cash flows.

More broadly, political and economic factors in global markets could impact crude oil and other feedstock
supplies and 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 in or with
certain foreign countries. In addition, foreign countries could restrict imports, investments or commercial
transactions.

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;

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

We believe that our properties and facilities are adequate for our operations and that our facilities are adequately
maintained. See the following sections for details of our assets by segment.

REFINING & MARKETING

The table below sets forth the location and crude oil refining capacity for each of our refineries as of
December 31, 2018. 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.

Refinery

Gulf Coast Region

Galveston Bay, Texas City, Texas

Garyville, Louisiana

Subtotal Gulf Coast region

Mid-Continent Region

Catlettsburg, Kentucky

Robinson, Illinois

Detroit, Michigan

El Paso, Texas

St. Paul Park, Minnesota

Canton, Ohio

Mandan, North Dakota

Salt Lake City, Utah

Gallup, New Mexico

Dickinson, North Dakota

Subtotal Mid-Continent region

West Coast Region

Los Angeles, California

Martinez, California

Anacortes, Washington

Kenai, Alaska

Subtotal West Coast region

Crude Oil Refining
Capacity (mbpcd)

585

564

1,149

277

245

140

131

1,161

363

161

119

711

3,021

The following table sets forth the approximate number of locations by state where independent entrepreneurs
maintain branded outlets, primarily marketed under Marathon, Shell, Mobil and other brands, as of December 31,
2018.

Location

Alabama

Alaska

Arizona

California

Colorado

District of Columbia

Florida

Georgia

Idaho

Illinois

Indiana

Iowa

Kentucky

Louisiana

Maryland

Mexico

Michigan

Minnesota

Mississippi

Nevada

New Mexico

New York

North Carolina

North Dakota

Ohio

Oregon

Pennsylvania

South Carolina

South Dakota

Tennessee

Texas

Utah

Virginia

Washington

West Virginia

Wisconsin

Wyoming

Total

Number of
Branded Outlets

366

610

298

262

642

554

114

798

295

218

104

842

114

402

117

110

6,813

The following table sets forth details about our Refining & Marketing owned and operated terminals as of
December 31, 2018. See the Midstream – MPLX section for information with respect to MPLX owned and
operated terminals. See the Midstream – ANDX section for information with respect to ANDX owned and
operated terminals.

Owned and Operated Terminals

Light Products Terminal:

Ohio

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)

495

263

424

549

1,800

452

483

4,119

4,614

RETAIL

Our Retail segment sells transportation fuels and merchandise through convenience stores it owns and operates,
primarily under the Speedway brand, and sells transportation fuels through direct dealer locations, primarily
under the ARCO brand. The following table sets forth the number of company-owned convenience stores by
state as of December 31, 2018.

Location

Alaska

Arizona

California

Colorado

Connecticut

Delaware

Florida

Georgia

Idaho

Illinois

Indiana

Kentucky

Massachusetts

Michigan

Minnesota

Nevada

New Hampshire

New Jersey

New Mexico

New York

North Carolina

Ohio

Oregon

Pennsylvania

Rhode Island

South Carolina

South Dakota

Tennessee

Texas

Utah

Virginia

Washington

West Virginia

Wisconsin

Wyoming

Total

Number of
Convenience Stores

492

239

125

309

146

108

306

205

120

309

276

491

122

3,923

The following table sets forth the number of direct dealer locations by state as of December 31, 2018.

Location

Alaska

Arizona

California

Nevada

Washington

Total

Number of
Locations

930

1,065

MIDSTREAM-MPLX

The following tables set forth certain information relating to MPLX’s crude and products pipeline systems and
storage assets as of December 31, 2018.

Pipeline System or Storage Asset

Origin

Destination

Diameter
(inches)

Length
(miles) Capacity(a) Associated MPC refinery

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

Woodhaven, MI to Detroit, MI

Woodhaven, MI

Detroit, MI

Louisville, KY Airport products system

Louisville, KY

Nashville
Bordeaux

Nashville 51st

Tennessee products system(b)

Inactive pipelines(b)

Total

Wood River Barge Dock (mbpd)
Storage assets (thousand barrels):

Refinery tank storage(c)

Mt. Airy Terminal

Canton Crude Truck Unload

Tank Farms

Caverns

Total

302

153

484

433

115

1,617

876

8”-16”

20”-36”

16”-36”

4”-14”

10”-16”

1,131

4”

6”-8”

8”-12”

140

2,363

Detroit, Canton

Canton

Catlettsburg, Robinson

Detroit

All Midwest refineries

Garyville, LA

Canton

Garyville

Galveston Bay

Catlettsburg, Canton

Robinson

N/A

Robinson

N/A

Garyville

Various

Garyville

Canton

N/A

267

515

197

360

454

620

N/A

2,497

238

389

215

383

513

N/A

1,839

55,650

3,979

20,090

4,175

83,897

(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, 2018, 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

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, 2018.
Additionally, MPLX operates one leased terminal and has partial ownership interest in two terminals.

Owned and Operated Terminals

Light Products Terminals:

Alabama

Florida

Georgia

Illinois

Indiana

Kentucky

Louisiana

Michigan

North Carolina

Ohio

Pennsylvania

South Carolina

Tennessee

West Virginia

Total light products terminals

Number of
Terminals

Tank Storage
Capacity
(thousand barrels)

443

3,422

998

1,221

3,229

2,587

2,440

1,509

3,218

390

371

1,149

1,587

22,661

The following table sets forth details about MPLX barges and towboats as of December 31, 2018.

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)

931

5,738

6,669

195

256

The following tables set forth certain information relating to MPLX’s gas processing facilities, fractionation
facilities, de-ethanization facilities and natural gas gathering systems as of December 31, 2018, 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)

Natural Gas
Throughput
(MMcf/d)(a)

Utilization
of Design
Capacity(a)

Bluestone Complex

Harmon Creek Complex

Houston Complex

Majorsville Complex

Mobley Complex

Sherwood Complex(b)

Cadiz Complex(b)

Seneca Complex(b)

Kenova Complex

Boldman Complex

Cobb Complex

Kermit Complex(c)

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

Argo Complex

Javelina Complex

Total

Culberson County, TX

Corpus Christi, TX

410

200

720

1,270

920

2,200

525

800

160

325

600

500

200

142

392

528

1,072

708

1,736

472

414

N/A

102

423

420

199

107

9,307

6,769

96%

75%

78%

92%

77%

94%

90%

52%

60%

43%

29%

N/A

31%

71%

91%

100%

21%

75%

79%

(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) MPLX accounts for as an equity method investment.

(c)

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 design throughput capacity and the natural gas throughput has been excluded from the
subtotal.

Fractionation & Condensate Stabilization Complexes

Location

Bluestone Complex

Houston Complex

Hopedale Complex

Ohio Condensate Complex(b)

Siloam Complex

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)

240

405

158

279

47%

102%

86%

52%

63%

100%

80%

(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) MPLX accounts for as an equity method investment.

De-ethanization Complexes

Location

Bluestone Complex

Harmon Creek 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)

302

192

59%

28%

93%

84%

100%

86%

35%

39%

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) 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(b)

East Texas System

Western Oklahoma System

Southeast Oklahoma System

Eagle Ford System

Other Systems

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, Dewey, Custer, Beckham,
Washita, Kingfisher, Canadian, and
Blaine Counties, OK

Hughes, Pittsburg and Coal Counties,
OK

Dimmit County, TX

Various

227

1,304

1,123

2,000

680

585

755

183

972

764

1,045

476

455

585

6,779

4,531

81%

79%

68%

75%

70%

78%

77%

93%

15%

74%

(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) MPLX accounts for as an equity method investment.

The following tables set forth certain information relating to MPLX’s NGL pipelines as of December 31, 2018.

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

Majorsville to Hopedale propane and heavier 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

Third party processing plant to Bluestone ethane and

Butler County, PA

heavier liquids pipeline

Bluestone to Mariner West ethane pipeline

Butler County, PA to
Beaver County, PA

Sarsen to Bluestone ethane and heavier liquids pipeline

Butler County, PA

Houston to Ohio River ethane pipeline(a)

Majorsville to Houston ethane pipeline

Sherwood to Mobley ethane pipeline

Mobley to Majorsville ethane pipeline

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

Harmon Creek to Houston propane and heavier liquids

Washington County, PA

pipeline

Harmon Creek to Mariner West ethane pipeline

Washington County, PA

Seneca to Cadiz propane and heavier liquids pipeline(b)

Noble County, OH to
Harrison County, OH

Cadiz to Hopedale propane and heavier liquids

Harrison County, OH

pipeline(b)

Seneca to Cadiz propane/ethane and heavier liquids

pipeline(b)(c)

Cadiz to Atex ethane pipeline(b)

Cadiz to Utopia ethane pipeline(b)

Langley to Siloam propane and heavier liquids pipeline

East Texas liquids pipeline

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

422

124

143

137

113

140

110

69/82

125

95%

92%

67%

89%

34%

25%

57%

29%

23%

82%

74%

79%

13%

36%

18%

65%

56%

(a)

This is the section of the Mariner West pipeline that is leased to and operated by Sunoco Logistics Partners LP.

(b) MPLX accounts for as an equity method investment.

(c)

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.

MIDSTREAM – ANDX

The following tables set forth certain information relating to ANDX’s crude and products pipeline systems and
storage assets as of December 31, 2018.

Pipeline System or Storage Asset

Origin

Destination

Diameter
(inches)

Length
(miles) Capacity(a) Associated MPC refinery

Crude oil pipeline systems (mbpd):

Belfield crude system

Delaware Basin crude system

Four Corners crude system
Green River crude system

Northern California crude system
Salt Lake City Short Haul crude

system

Southern California crude system(b)
St. Paul Park Cottage Grove crude

system

Tesoro High Plains crude system
TexNewMex crude system

Salt Lake City Core crude system
Inactive Pipelines

Total

Products pipeline systems (mbpd):
Tesoro Alaska products system
Northern California products system
Northwest Products Pipeline system

Salt Lake City Short Haul products

system

Southern California products system
Wingate system
Inactive Pipelines

Total

Water pipeline systems (mbpd):

Belfield water system
Green River water system

Total

Barge Docks (mbpd)(c)
Storage assets (thousand barrels):

Tank Farms
Caverns

Total

Various

TexNewMex
crude system
Various
Various

Martinez, CA
Salt Lake City,
UT
LA Basin, CA
Minneapolis-Saint
Paul, MN
Various
Four Corners
Crude System
Various

Fryburg Rail/
Dickinson, ND
Various

Various
SLC Core Pipeline
System
Martinez, CA
Salt Lake City, UT

4”-8”

7”-16”

4”-10”
2”-8”

5”-24”
8”-16”

LA Basin, CA
Minneapolis-Saint
Paul, MN
Various
Delaware Basin
Crude System
Various

8”-42”
12”-16”

2”-16”
12”-16”

3”-10”

128

163

192
139

10
5

37
5

908
438

575
563

475

59
23

280
118

711
107

350
365

50
N/A

3,163

2,558

Kenai, AK
Martinez, CA
Salt Lake City,
UT
Salt Lake City,
UT
LA Basin, CA
McKinley, NM

Anchorage, AK
Martinez, CA
Various

8”-10”
8”- 16”
4”-8”

69
4
1,102

Northwest Products
Pipeline system
LA Basin, CA
McKinley, NM

6”-10”

4”-16”
4”

Various
Sublette, WY

4”-8”
3”-4”

100
14
106

1,405

103
11

114

43
160
107

124

489
7
N/A

930

20
15

2,832

48,449
450

48,899

Dickinson, ND

El Paso, TX

Galllup, NM
N/A

Martinez, CA
Salt Lake City, UT

Los Angeles, CA
St. Paul Park, MN

Mandan, ND
El Paso, TX

Salt Lake City, UT

Kenai, AK
Martinez, CA
Salt Lake City, UT

Salt Lake City, UT

Los Angeles, CA
Gallup, NM

Various

(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)

(c)

Includes portions leased from third parties.

Includes a dock leased from a third party.

As of December 31, 2018, ANDX had partial ownership interests in the following pipeline companies.

Pipeline Company

Crude oil pipeline companies:

Origin

Destination

Diameter
(inches)

Length
(miles)

Ownership
Interest

Operated
by ANDX

Rangeland Rio Pipeline LLC

Mentone, TX

Midland County, TX

Minnesota Pipe Line Company LLC

Clearbrook, MN

Minneapolis-Saint
Paul, MN

12”

16”

112

1,073

1,185

67%

17%

Yes

Total

NGL pipeline companies:

Rendezvous Gas Services System

Three Rivers System

Sweetwater
County, WY

Sweetwater County,
WY and Uintah
County, WY

2”-30”

327

78%

Yes

Duchesne County,
UT and Uintah
County, UT

Uintah County, UT

6”-16”

50%

Yes

Uintah Basin Field Services

Uintah County, UT Uintah County, UT

8”-12”

Total

38%

Yes

469

The following table sets forth details about ANDX owned and operated terminals as of December 31, 2018.
Additionally, ANDX operates one leased terminal and has partial ownership interest in one terminal.

Number of
Terminals

Tank Storage
Capacity
(thousand barrels)

1,523

5,608

989

526

778

1,063

10,516

264

720

794

250

204

2,270

117

352

520

989

13,775

Owned and Operated Terminals

Light Products Terminals:

Alaska

California

Idaho

Minnesota

New Mexico

North Dakota

Utah

Washington

Subtotal light products terminals

Asphalt Terminals

Arizona

California

Minnesota

Nevada(a)

New Mexico

Texas

Subtotal asphalt terminals

Crude Terminals

California

New Mexico

North Dakota

Washington

Subtotal crude terminals

Total owned and operated terminals

(a) ANDX accounts for as an equity method investment.

The following tables set forth certain information relating to ANDX’s gas processing facilities, fractionation
facilities and natural gas gathering systems as of December 31, 2018, and include capacities and throughputs
related to operated equity method investments on a 100 percent basis.

Gas Processing Complexes

Location

Belfield Complex

Robinson Lake Complex

24B Plant Complex

Emigrant Trail Complex

Stagecoach/Iron Horse Complex

Blacks Fork Complex

Vermillion Complex

Total

Stark County, ND

Mountrail County, ND

Uintah County, UT

Uintah County, WY

Uintah County, UT

Uintah County, WY

Sweetwater County, WY

(a) Natural gas throughput is a weighted average for days in operation.

Fractionation & Condensate Stabilization Complexes

Location

Blacks Fork Fractionator

Robinson Lake Fractionator

Belfield Fractionator

LaBarge Liquids Complex

Pinedale Liquids Complex

Uintah County, WY

Mountrail County, ND

Stark County, ND

Lincoln County, WY

Sublette County, WY

(a) NGL throughput is a weighted average for days in operation.

Design
Throughput
Capacity
(MMcf/d)

Natural Gas
Throughput
(MMcf/d)(a)

Utilization
of Design
Capacity

130

140

510

795

1,727

122

144

348

710

46%

94%

53%

28%

44%

85%

41%

Design
Throughput
Capacity
(mbpd)

NGL
Throughput
(mbpd)(a)

Utilization
of Design
Capacity

20%

89%

62%

32%

48%

43%

Natural Gas Gathering Systems

Location

Belfield System

Robinson Lake System

Williston Basin System

Green River System

Stark County, ND

Mountrail County, ND

McLean County, ND

Sublette County, WY and Uintah
County, WY

Rendevous Gas Services System(b)

Sweetwater County, WY

Rendevous Pipeline

Three Rivers System(b)

Uinta Basin Field Services(b)

Uintah Basin System

Vermillion System

Sublette County, WY

Duchesne County, UT and Uintah
County, UT

Uintah County, UT

Daggett County, UT, Sweetwater
County, WY and Moffat County, CO

Design
Throughput
Capacity
(MMcf/d)

Natural
Gas
Throughput
(MMcf/d)(a)

Utilization
of Design
Capacity

130

737

1,032

450

212

299

212

122

399

502

253

156

3,141

1,618

46%

94%

19%

54%

49%

56%

30%

37%

52%

44%

52%

(a) Natural gas throughput is a weighted average for days in operation.

(b) ANDX accounts for as an equity method investment.

The following tables set forth certain information relating to ANDX’s NGL pipelines as of December 31, 2018.

NGL Pipelines

Location

Design
Throughput
Capacity
(mbpd)

NGL
Throughput
(mbpd)

Utilization
of Design
Capacity

Ironhorse to Dinosaur 8” NGL

Logistics Hub NGL Pipeline

Uintah County, UT

McKenzie County, ND

0.7

25%

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 or ANDX.

As of December 31, 2018, 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, 2018, 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

16”

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”-16”

Total

50%

60%

Yes

796

170

796

1,794

(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, 2018.

Private Pipeline Systems

Crude oil pipeline systems:

Middle Ground Shoals Pipeline

Inactive pipelines

Total

Products pipeline systems:

Illinois and Indiana pipeline systems

Texas pipeline systems

Inactive pipelines

Total

Diameter
(inches)

Length
(miles)

Capacity
(mbpd)

12”

4”

8”

103

224

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, 2018.

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.

Between June 20 and July 11, 2018, six putative class actions (the “Actions”) were filed against some or all of
Andeavor, the directors of Andeavor, and MPC, Mahi Inc. (“Merger Sub 1”) and Mahi LLC (n/k/a Andeavor
LLC) (“Merger Sub 2” and, together with MPC and Merger Sub 1, the “MPC Defendants”), relating to the
Andeavor merger. Two complaints, Malka Raul v. Andeavor, et al., and Stephen Bushansky v. Andeavor, et al.,
were filed in the U.S. District Court for the Western District of Texas. Four complaints, captioned The Vladimir
Gusinsky Rev. Trust v. Andeavor, et al., Lawrence Zucker v. Andeavor, et al., Mel Gross v. Andeavor, et al., and
Hudson v. Andeavor, et al. were filed in the U.S. District Court for the District of Delaware. The Actions
generally alleged that Andeavor, the directors of Andeavor and the MPC Defendants disseminated a false or
misleading registration statement regarding the merger in violation of Section 14(a) of the Exchange Act and
Rule 14a-9 promulgated thereunder. Specifically, the Actions alleged that the registration statement filed by
MPC misstated or omitted material information regarding the parties’ financial projections and the analyses
performed by Andeavor’s and MPC’s respective financial advisors, and that disclosure of material information
was necessary in light of preclusive deal protection provisions in the merger agreement, the financial interests of
Andeavor’s officers and directors in completing the deal, and the financial interests of Andeavor’s and MPC’s
respective financial advisors. The Actions further alleged that the directors of Andeavor and/or the MPC
Defendants were liable for these violations as “controlling persons” of Andeavor under Section 20(a) of the
Exchange Act. The Actions sought injunctive relief, including to enjoin and/or rescind the merger, damages in
the event the merger was consummated, and an award of attorneys’ fees, in addition to other relief.

On July 5 and July 20, 2018, MPC filed amendments to its Registration Statement on Form S-4, which included
certain supplemental disclosures responding to allegations made by the plaintiffs. On August 3, 2018, Andeavor
filed its proxy statement, and after that date, the parties had numerous discussions regarding the adequacy of
disclosures. The parties ultimately reached an agreement in principle to resolve the Actions in exchange for
additional supplemental disclosures. Consistent with that agreement, Andeavor and MPC each filed a Current
Report on Form 8-K on September 14, 2018 that included certain additional disclosures in response to plaintiffs’
allegations. Between September 21 and September 28, 2018, all the Actions were dismissed as moot, and the
parties reserved their rights in the event of any dispute over attorneys’ fees and expenses. In the fourth quarter of
2018, the Company resolved the remaining disputes over attorneys’ fees for an amount that was not material to
the Company.

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 on our consolidated financial position, results of operations, or cash flows.

Environmental Proceedings

As previously reported, MarkWest Liberty Midstream, Ohio Fractionation and MarkWest Utica EMG, together
with other MarkWest affiliates, agreed to pay a penalty of approximately $0.9 million, undertake certain
monitoring and emission reduction projects at certain facilities with an estimated cost of approximately
$3.3 million, and implement certain process enhancements for its and its affiliates’ leak detection and repair
programs at its gas processing and fractionation sites. On November 1, 2018, the Partnership and 11 of its
subsidiaries entered into a Consent Decree with the EPA, the State of Oklahoma, the Pennsylvania Department of
Environmental Protection and the State of West Virginia resolving these issues. The Consent Decree was
approved by the court on January 8, 2019 and the penalty has been paid.

Governmental and other entities in California, New York, Maryland and Rhode Island have filed lawsuits against
coal, gas, oil and petroleum companies, including the Company. The lawsuits allege damages as a result of
climate change and the plaintiffs are seeking unspecified damages and abatement under various tort theories.
Similar lawsuits may be filed in other jurisdictions. At this early stage, the ultimate outcome of these matters
remain uncertain, and neither the likelihood of an unfavorable outcome nor the ultimate liability, if any, can be
determined.

On February 7, 2019, we received an offer to settle seven NOVs from CARB. The NOVs were issued to the Los
Angeles refinery in 2017, alleging violations of the state’s summer RVP limits. While we are negotiating a
settlement of the allegations with CARB, we cannot currently estimate the timing of the resolution of this matter.

On February 5, 2019, we received an offer to settle seven NOVs from CARB. The NOVs were issued to the Los
Angeles refinery in 2018, alleging the refinery produced fuel which exceeded its reported olefin values. While
we are negotiating a settlement of the allegations with CARB, we cannot currently estimate the timing of the
resolution of this matter.

On October 19, 2018, Western Refining Southwest, Inc. received an offer from the U.S. EPA to settle alleged
violations of the Resource Conservation and Recovery Act regulations. While we are negotiating a settlement of
the allegations with the EPA, we cannot currently estimate the timing of the resolution of this matter.

In March 2016, the EPA conducted a Risk Management Program inspection at our Gallup refinery and issued an
Inspection Report on April 7, 2016 identifying Areas of Concern. While we are working with the EPA to address
the Areas of Concern, we cannot currently estimate the timing of the resolution of this matter.

On March 8, 2018, Tesoro Refining and Marketing LLC (“TRMC”) received an offer to settle allegations by the
CARB relating to the state’s Greenhouse Gas Reporting Standards. The CARB allegations relate to the

self-disclosure and correction of reported greenhouse gas emissions emitted by the Los Angeles refinery Calciner
Unit from May 9, 2014 to June 12, 2017. We have reached an agreement in principle to pay a penalty of
$425,000 and undertake a supplemental environmental project at a cost of $425,000. We expect to finalize the
agreement in the first quarter of 2019.

On April 6, 2018, TRMC received an offer to settle five Notices of Violation (“NOV”) from the South Coast Air
Quality Management District. The NOVs were issued to the Los Angeles refinery between June and October
2017, alleging violations of various federal and district air emission regulations. We have reached an agreement
to pay a penalty of $75,000 and undertake certain supplemental environmental projects with an estimated cost of
$75,000.

On February 12, 2016, TRMC received an offer to settle 35 NOVs received from the Bay Area Air Quality
Management District (“BAAQMD”). The NOVs were issued from May 2011 to November 2015 and allege
violations of air quality regulations for ground level monitors located at our Martinez refinery. While we are
negotiating a settlement of the allegations with the BAAQMD, we cannot currently estimate the timing of the
resolution of this matter.

On July 18, 2016, the U.S. Department of Justice (“DOJ”) lodged a complaint on behalf of the EPA and a
Consent Decree with the Western District Court of Texas. Among other things, the Consent Decree required that
the Martinez refinery meet certain annual emission limits for NOx by July 1, 2018. In February 2018, TRMC
informed the EPA that it would need additional time to satisfy requirements of the Consent Decree. We are
currently negotiating a resolution of this matter with the DOJ and the EPA, including the required timing to
complete the project.

On June 14, 2018, TRMC received an offer to settle an NOV issued by the CARB in May 2018. The NOV was
issued in response to TRMC having reported in December 2017 that certain batches of gasoline produced in
December 2017 did not meet California fuel standards. On October 1, 2018, TRMC reached an agreement with
CARB to settle this NOV for $157,500.

The naphtha hydrotreater unit at the Washington refinery was involved in a fire in April 2010, which fatally
injured seven employees and rendered the unit inoperable. The Washington State Department of Labor &
Industries (“L&I”) investigated the incident and issued a citation in October 2010 with an assessed fine of
approximately $2 million. Andeavor appealed the citation in January 2011 as it disagreed with L&I’s
characterizations of operations at the refinery and believed that many of the agency’s conclusions were mistaken.
In separate September 2013, November 2013 and February 2015 orders, the Board of Industrial Insurance
Appeals (“BIIA”) granted partial summary judgment in Andeavor’s favor rejecting 33 of the original 44
allegations in the citation as lacking legal or evidentiary support. The hearing on the remaining 11 allegations
concluded in July 2016. On June 8, 2017, the BIIA Judge issued a proposed decision and order vacating the
entire citation, which L&I and the United Steel Workers (“USW”) appealed. On September 18, 2017, the BIIA
granted L&I and USW’s petitions for review of the BIIA judge’s June 8, 2017 proposed decision and order. On
January 25, 2018, the BIIA issued an order remanding 12 of the allegations for further proceedings. Proceedings
regarding the 12 remanded citations are ongoing.

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 15, 2019, there
were 32,353 registered holders of our common stock.

Issuer Purchases of Equity Securities

The following table sets forth a summary of our purchases during the quarter ended December 31, 2018, of
equity securities that are registered by MPC pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended:

Period

10/01/18-10/31/18

11/01/18-11/30/18

12/01/18-12/31/18

Total

Total Number
of Shares
Purchased(a)

Average
Price Paid
per Share(b)

36,701

3,145,000

7,812,656

10,994,357

82.02

63.75

60.86

61.76

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)

5,579,603,383

3,138,171

7,804,590

10,942,761

5,379,603,637

4,904,604,184

(a)

The amounts in this column include 36,701, 6,829 and 8,066 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 April 30, 2018, we announced that our board of directors had approved a $5 billion share repurchase authorization in addition to the
remaining authorization pursuant to the May 31, 2017 announcement. These share purchase authorizations have no expiration date. The
share repurchase authorization announced on April 30, 2018, together with prior authorizations, result in a total of $18 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)

2018(a)

2017(b)

2016

2015(a)

2014(a)

Statements of Income Data

Sales and other operating revenue(c)

$ 96,504

74,733

63,339

72,051

97,817

Year Ended December 31,

Income from operations

Net income

Net income attributable to MPC

Net income attributable to MPC per share:

Basic

Diluted

Dividends per share

Statements of Cash Flows Data

5,571

3,606

2,780

4,018

3,804

3,432

2,386

1,213

1,174

4,708

2,868

2,852

5.36

5.28

1.84

6.76

6.70

1.52

2.22

2.21

1.36

5.29

5.26

1.14

Net cash provided by operating activities

6,158

6,612

4,017

4,076

Acquisitions, net of cash acquired(a)

Common stock repurchased

Dividends paid

3,822

3,287

954

249

2,372

773

197

719

1,218

965

613

4,149

2,555

2,524

4.42

4.39

0.92

3,130

2,821

2,131

524

(In millions)

Balance Sheets Data

Total assets

December 31,

2018(a)

2017

2016

2015(a)

2014(a)

$ 92,940

49,047

44,413

43,115

30,425

Long-term debt, including capitalized leases(d)

27,524

12,946

10,572

11,925

6,602

(a) On October 1, 2018, we acquired Andeavor. On December 4, 2015, MPLX, our consolidated subsidiary, merged with MarkWest. On
September 30, 2014, we acquired Hess’ Retail Operations and Related Assets. The financial results for these operations are included in
our consolidated results from the date of acquisition.

(b)

(c)

(d)

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.

Includes sales to related parties. The 2018 period reflects an election to present certain taxes on a net basis concurrent with our adoption
of ASU 2014-09, Revenue – Revenue from Contracts with Customers (“ASC 606”).

Includes amounts due within one year. During 2018, MPC assumed Andeavor senior notes with an aggregate principal amount of
$3.374 billion and MPLX issued $7.75 billion aggregate principal amount of senior notes. MPLX used $4.1 billion of the net proceeds of
the offering to repay the 364-day term loan facility drawn on in January to fund the cash portion of the consideration for the February 1,
2018 dropdown and used $750 million of the net proceeds to redeem the 5.500 percent senior notes due February 2023 issued by MPLX
and MarkWest. Also included in 2018 are Andeavor Logistics senior notes with an aggregate principal amount of $3.75 billion. 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

All statements in this section, other than statements of historical fact, are forward-looking statements that are
inherently uncertain. See “Disclosures Regarding Forward-Looking Statements” and “Risk Factors” for a
discussion of the factors that could cause actual results to differ materially from those projected in these
statements. The following information concerning our business, results of operations and financial condition
should also 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.

CORPORATE OVERVIEW

We are an independent petroleum refining and marketing, retail and midstream company. We own and operate
the nation’s largest refining system through 16 refineries, located in the Gulf Coast, Mid-Continent and West
Coast regions of the United States, with an aggregate crude oil refining capacity of approximately 3.0 mmbpcd.
Our refineries supply refined products to resellers and consumers across the United States. We distribute refined
products to our customers through transportation, storage, distribution and marketing services provided largely
by our Midstream segment. We believe we are one of the largest wholesale suppliers of gasoline and distillates to
resellers in the United States.

We have three strong brands: Marathon®, Speedway® and ARCO®. The branded outlets, which primarily include
the Marathon brand, are established motor fuel brands across the United States available through approximately
6,800 branded outlets operated by independent entrepreneurs in 35 states, the District of Columbia and Mexico.
We believe our Retail segment operates the second largest chain of company-owned and operated retail gasoline
and convenience stores in the United States, with approximately 3,920 convenience stores, primarily under the
Speedway brand, and 1,065 direct dealer locations, primarily under the ARCO brand, across the United States.

We primarily conduct our midstream operations through our ownership interests in MPLX and ANDX, which
own and operate crude oil and light product transportation and logistics infrastructure as well as gathering,
processing, and fractionation assets. As of December 31, 2018, we owned, leased or had ownership interests in
approximately 16,600 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. 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 9.9
bcf/d of gathering capacity, 11.0 bcf/d of natural gas processing capacity and 790 mbpd of fractionation capacity
as of December 31, 2018.

Recent Developments

Andeavor Acquisition

On October 1, 2018, we completed the Andeavor acquisition. Under the terms of the merger agreement,
Andeavor stockholders had the option to choose 1.87 shares of MPC common stock or $152.27 in cash per share
of Andeavor common stock. The merger agreement included election proration provisions that resulted in
approximately 22.9 million shares of Andeavor common stock being converted into cash consideration and the
remaining 128.2 million shares of Andeavor common stock being converted into stock consideration. Andeavor
stockholders received in the aggregate approximately 239.8 million shares of MPC common stock valued at
$19.8 billion and approximately $3.5 billion in cash in connection with the Andeavor acquisition. Through the
Andeavor acquisition, we acquired the general partner and 156 million common units of ANDX, which is a
publicly traded MLP that was formed to own, operate, develop and acquire logistics assets.

Andeavor was a highly integrated marketing, logistics and refining company operating primarily in the Western
and Mid-Continent United States. Andeavor’s operations included procuring crude oil from its source or from
other third parties, transporting the crude oil to one of its 10 refineries, and producing, marketing and distributing
refined products. Its marketing system included more than 3,300 stations marketed under multiple well-known
fuel brands including ARCO®. Also, as noted above, we acquired the general partner and 156 million common
units of ANDX, a leading growth-oriented, full service, and diversified midstream company which owns and
operates networks of crude oil, refined products and natural gas pipelines, terminals with crude oil and refined
products storage capacity, rail
loading and offloading facilities, marine terminals including storage, bulk
petroleum distribution facilities, a trucking fleet and natural gas processing and fractionation complexes.

See Item 8. Financial Statements and Supplementary Data – Note 5 for additional information on other
acquisitions and investments in affiliates.

MPLX Financing Activities

In November 2018, MPLX issued $2.25 billion in aggregate principal amount of senior notes in a public offering.
In December 2018, a portion of the net proceeds from the offering was used to redeem the $750 million in
aggregate principal amount of senior notes due February 2023 issued by MPLX and MarkWest. The remaining
net proceeds have or will be used to repay borrowings under MPLX’s revolving credit facility and intercompany
loan with MPC and for general partnership purposes.

EXECUTIVE SUMMARY

Results

Select results for 2018 and 2017 are reflected in the following table. The 2018 amounts include the results of
Andeavor from the October 1, 2018 acquisition date forward.

(In millions, except per share data)

Income from operations by segment

Refining & Marketing

Retail

Midstream

Items not allocated to segments

Income from operations

(Benefit) provision for income taxes

Net income attributable to MPC

Net income attributable to MPC per diluted share

2018

2017

2,481

2,321

1,028

2,752

(690)

5,571

962

2,780

5.28

729

1,339

(371)

4,018

(460)

3,432

6.70

Net income attributable to MPC decreased $652 million, or $1.42 per diluted share, in 2018 compared to 2017.
Increased income from operations was more than offset by the absence of a tax benefit of $1.5 billion resulting
from the TCJA in 2017 and increased net income attributable to noncontrolling interests in 2018. Refer to the
Results of Operations section for a discussion of financial results by segment for the three years ended
December 31, 2018.

MPLX and ANDX

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. Immediately
following the 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.
MPLX financed the cash portion of the February 1, 2018 dropdown with its $4.1 billion 364-day term loan
facility, which was entered into on January 2, 2018. On February 8, 2018, MPLX issued $5.5 billion in aggregate
principal amount of senior notes in a public offering. MPLX used $4.1 billion of the net proceeds of the offering
to repay the 364-day term-loan facility. The remaining proceeds were used to repay outstanding borrowings
under MPLX’s revolving credit facility and intercompany loan agreement with us and for general partnership
purposes.

The following table summarizes the cash distributions we received from MPLX during 2018 and 2017 and
ANDX distributions received after the October 1, 2018 acquisition of Andeavor.

(In millions)

Cash distributions received:

Limited partner distributions – MPLX

Limited partner distributions – ANDX

General partner distributions, including IDRs – MPLX

Total

2018

2017

1,097

197

146

1,243

301

498

We owned approximately 505 million MPLX common units at December 31, 2018 with a market value of
$15.29 billion based on the December 31, 2018 closing unit price of $30.30. On January 25, 2019, MPLX

declared a quarterly cash distribution of $0.6475 per common unit, which was paid February 14, 2019. As a
result, MPLX made distributions totaling $514 million to its common unitholders. MPC’s portion of this
distribution was approximately $327 million.

We owned approximately 156 million ANDX common units at December 31, 2018 with a market value of
$5.07 billion based on the December 31, 2018 closing unit price of $32.49. On January 25, 2019, ANDX
declared a quarterly cash distribution of $1.03 per common unit, which was paid February 14, 2019. As a result,
ANDX made distributions totaling $238 million to its common unitholders. MPC’s portion of this distribution
was approximately $146 million.

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

Share Repurchases

During the year ended December 31, 2018, we returned $3.29 billion to our shareholders through repurchases of
47 million shares of common stock at an average price per share of $69.46. These repurchases were funded
primarily by after tax proceeds from the February 1, 2018 dropdown to MPLX.

Liquidity

As of December 31, 2018, we had cash and cash equivalents of $1.61 billion, excluding MPLX’s and ANDX’s
cash and cash equivalents of $68 million and $10 million, respectively, and no borrowings or letters of credit
outstanding under our $6.0 billion bank revolving credit facilities or under our $750 million trade receivables
securitization facility (“trade receivables facility”). As of December 31, 2018, eligible trade receivables
supported borrowings of $750 million under the trade receivable facility. As of December 31, 2018, MPLX had
approximately $2.25 billion available under its $2.25 billion revolving credit agreement and $1 billion available
through its intercompany loan agreement with MPC. As of December 31, 2018, ANDX had $855 million
available under its $2.10 billion revolving credit agreements and $500 million available through its 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 3,021 mbpcd, 1,881 mbpcd and 1,817 mbpcd as of
December 31, 2018, 2017 and 2016, respectively. The increase in 2018 was primarily due to the acquisition of
Andeavor on October 1, 2018, which added 10 refineries with approximately 1,117 mbpcd of total refining
capacity.

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 West Coast, Mid-Continent and Gulf Coast crack spreads that we believe most closely
track our operations and slate of products. The following will be used for these crack-spread calculations:

• The West Coast crack spread uses three barrels of ANS crude producing two barrels of LA CARBOB

and one barrel of LA CARB Diesel;

• The Mid-Continent Crack spread uses three barrels of WTI crude producing two barrels of Chicago

CBOB gasoline and one barrel of Chicago ULSD; and

• The Gulf Coast Crack Spread uses three barrels of LLS crude producing two barrels of USGC CBOB

gasoline and one barrel of USGC ULSD.

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)

Blended crack spread sensitivity(a) (per $1.00/barrel change)

Sour differential sensitivity(b) (per $1.00/barrel change)

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

Natural gas price sensitivity(d) (per $1.00/MMBtu)

$ 900

450

370

300

(a) Crack spread based on 38 percent WTI, 38 percent LLS and 24 percent ANS with Mid-Continent, Gulf Coast and West Coast product

(b)

(c)

(d)

pricing, respectively and assumes all other differentials and pricing relationships remain unchanged.
Sour crude oil basket consists of the following crudes: ANS, ASCI, Maya and Western Canadian Select
Sweet crude oil basket consists of the following crudes: Bakken, Brent, LLS, WTI-Cushing and WTI-Midland
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 sour differential and the sweet 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,
2018, 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 and only reflects the activity for the acquired refineries after October 1,
2018.

Year Refinery

2018 Canton, Detroit, Galveston Bay and Martinez

2017 Catlettsburg, Galveston Bay and Garyville

2016 Galveston Bay, Garyville and Robinson

We have various long-term, fee-based commercial agreements with MPLX and ANDX. Under these agreements,
MPLX and ANDX, which are reported in our Midstream segment, provide transportation, storage, distribution
and marketing services to our Refining & Marketing segment. Certain of these agreements include commitments
for minimum quarterly throughput and distribution volumes of crude oil and refined products and minimum
refined products and other products. Certain other agreements include
storage volumes of crude oil,
commitments to pay for 100 percent of available capacity for certain marine transportation and refining logistics
assets.

Retail

Our Retail fuel margin for gasoline and distillate, which is the price paid by consumers or direct dealers less the
cost of refined products, including transportation, consumer excise taxes and bankcard processing fees (where
applicable), impacts the Retail segment profitability. Gasoline and distillate prices are volatile and are impacted
by changes in supply and demand in the regions 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. According to
current estimates, 2018 gasoline demand remained at 9.3 million barrels per day for the third consecutive year.
Headwinds from a four-year high in average gasoline prices during 2018 offset the gasoline demand support
from continuing economic growth and slowing fleet fuel efficiency gains. Meanwhile, distillate demand was up
for the second consecutive year on continuing economic growth in 2018, rising 5.2 percent from 2017 to the
highest level since 2007 and the third highest U.S. demand level ever. Truck tonnage posted its largest annual
increase since 1998, rising 6.6 percent year over year in 2018, while port container traffic (at the 10 largest U.S.
ports), grew 4.5 percent year over year in 2018 (through November). The margin on merchandise sold at our
convenience stores historically has been less volatile and has contributed substantially to our Retail segment
margin. Almost half of our Retail margin was derived from merchandise sales in 2018. This percentage
decreased from 2017 due to the addition of long-term fuel supply contracts with direct dealers and fuel only
locations as part of the Andeavor acquisition. Our Retail 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, 2018, 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

Our Midstream segment transports, stores, distributes and markets crude oil and refined products, principally for
our Refining & Marketing segment. The profitability of our pipeline transportation operations primarily depends
on tariff rates and the volumes shipped through the pipelines. The profitability of our marine operations primarily
depends on the quantity and availability of our vessels and barges. The profitability of our light product terminal
operations primarily depends on the throughput volumes at these terminals. The profitability of our fuels
distribution services primarily depends on the sales volumes of certain refined products. The profitability of our
refining logistics operations depends on the quantity and availability of our refining logistics assets. A majority
of the crude oil and refined product shipments on our pipelines and marine vessels and the refined product
throughput at our terminals serve our Refining & Marketing segment and our refining logistics assets and fuels
distribution services are used solely by our Refining & Marketing segment. As discussed above in the Refining &
Marketing section, MPLX and ANDX, which are reported in our Midstream segment, have various long-term,
fee-based commercial agreements related to services provided to our Refining & Marketing segment. Under
these agreements, MPLX and ANDX have received various commitments of minimum throughput, storage and
distribution volumes as well as commitments to pay for all available capacity of certain assets. 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, terminals and marine operations. 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, store, distribute and
market is directly affected by the production levels of, and user demand for, refined products in the markets
served by our refined product pipelines and marine operations. 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.

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 our control. 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 by our producer customers, such prices also affect profitability.

RESULTS OF OPERATIONS

The following discussion includes comments and analysis relating to our results of operations for the years ended
December 31, 2018, 2017 and 2016. The 2018 amounts include the results of Andeavor from the October 1, 2018
acquisition date forward. 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)

2018

2017

Revenues and other income:

2018 vs.
2017
Variance

2017 vs.
2016
Variance

2016

Sales and other operating revenues(a)

95,750

74,104

21,646

63,277

10,827

Sales to related parties

Income (loss) from equity method

investments

Net gain on disposal of assets

Other income

754

373

202

629

306

320

125

(118)

(185)

178

567

491

(22)

142

Total revenues and other income

97,102

75,369

21,733

63,364

12,005

Costs and expenses:

Cost of revenues (excludes items below)(a)

85,456

66,519

18,937

56,676

9,843

Purchases from related parties

610

570

Inventory market valuation adjustment

Impairment expense

Depreciation and amortization

Selling, general and administrative expenses

Other taxes

2,490

2,418

557

2,114

1,694

454

376

724

103

509

(370)

130

2,001

1,597

435

370

(130)

113

Total costs and expenses

91,531

71,351

20,180

60,978

10,373

Income from operations

Net interest and other financial costs

Income before income taxes

(Benefit) provision for income taxes

Net income
Less net income (loss) attributable to:

Redeemable noncontrolling interest

Noncontrolling interests

5,571

1,003

4,568

962

3,606

751

4,018

674

3,344

(460)

3,804

307

1,553

329

1,224

1,422

(198)

444

2,386

564

1,822

609

1,213

1,632

110

1,522

(1,069)

2,591

(2)

309

Net income attributable to MPC

2,780

3,432

(652) $

1,174

2,258

(a) We adopted ASU 2014-09, Revenue – Revenue from Contracts with Customers (“ASC 606”) as of January 1, 2018, and elected to report
certain taxes on a net basis. We adopted the standard using the modified retrospective method, and, therefore, comparative information
continues to reflect certain taxes on a gross basis. See Item 8. Financial Statements and Supplementary Data – Notes 2 and 3 for further
information.

2018 Compared to 2017

Net income attributable to MPC decreased $652 million. Increased income from operations was more than offset
by a tax benefit of $1.5 billion resulting from the TCJA in 2017 and increased income attributable to
noncontrolling interests in 2018. See Segment Results for additional information.

Total revenues and other income increased $21.73 billion in 2018 compared to 2017 primarily due to:

•

increased sales and other operating revenues of $21.65 billion mainly due to an increase in our
Refining & Marketing segment refined product sales volumes, which increased 402 mbpd, and higher
averaged refined product sales prices, which increased $0.34 per gallon. The increase in volume is
largely due to the Andeavor acquisition on October 1, 2018. These increases were partially offset by
our election to present revenues net of certain taxes under ASC 606 prospectively from January 1,
2018, which resulted in a decrease in revenues of $6.66 billion for the year. See Item 8. Financial
Statements and Supplementary Data – Notes 2 and 3 for additional information on recently adopted
accounting standards;

increased sales to related parties of $125 million primarily due to higher average refined product
prices;

increased income from equity method investments of $67 million primarily due to an increase in
income from midstream equity affiliates; and

decreased other income of $118 million primarily due to a decrease in RIN sales.

Total costs and expenses increased $20.18 billion in 2018 compared to 2017 primarily due to:

•

increased cost of revenues of $18.94 billion primarily due to:

•

an increase in refined product cost of sales of $24.97 billion, primarily due to increased operations
following the acquisition of Andeavor along with higher raw material costs attributable to an
increase in our average crude oil costs of $13.87 per barrel; and

a decrease in certain taxes of $6.66 billion as a result of our election to present revenues net of
certain taxes under ASC 606 prospectively from January 1, 2018. For the year, certain taxes
continue to be presented on a gross basis and are included in cost of revenues. See Item 8.
Financial Statements and Supplementary Data – Notes 2 and 3 for additional information on
recently adopted accounting standards;

•

increased depreciation and amortization of $376 million, primarily due to the depreciation of the fair
value of the assets acquired in connection with the Andeavor acquisition;

increased selling, general and administrative expenses of $724 million primarily due to approximately
$197 million of transaction related costs for financial advisors, employee severance and other costs
associated with the Andeavor acquisition in addition to increased costs and expenses for the combined
company; and

increased other taxes of $103 million primarily due to the inclusion of other taxes related to the
acquired Andeavor operations.

Net interest and other financial costs increased $329 million mainly due to increased MPLX borrowings and debt
assumed in the acquisition of Andeavor. In addition, MPLX recognized $60 million of debt extinguishment costs
in 2018 in connection with the redemption of its $750 million of senior notes due in 2023. We capitalized interest
of $80 million in 2018 and $55 million in 2017. See Item 8. Financial Statements and Supplementary Data –
Note 19 for further details.

Provision for income taxes increased $1.42 billion primarily due to the absence of a tax benefit of $1.5 billion in
2017 resulting from the TCJA and an increase in our income before income taxes, which increased $1.22 billion.

The effective tax rate of 21 percent in 2018 is consistent with the U.S. statutory rate of 21 percent, as permanent
benefit differences related to income attributable to noncontrolling interest were offset by state and local tax
expense. In 2017, our effective tax rate was impacted by 45 percentage points as a result of the TCJA which
decreased our effective tax rate from 31 percent to (14) percent. The effective tax rate, excluding the TCJA, of
31 percent in 2017 was slightly less than the U.S. statutory rate of 35 percent primarily due to certain permanent
benefit differences, including differences related to net income attributable to noncontrolling interests and 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.

Noncontrolling interests increased $454 million due to higher MPLX net income resulting primarily from the
February 1, 2018 dropdown transaction, partially offset by the reduced ownership in MPLX held by
noncontrolling interests following the GP/IDR Exchange. Noncontrolling ownership in MPLX decreased to
36.4 percent at December 31, 2018 from 69.6 percent at December 31, 2017. In addition, 2018 reflects
$68 million of net income attributable to the noncontrolling interest in ANDX of 36.4 percent for the period from
October 1, 2018 through the end of the year.

2017 Compared to 2016

Net income attributable to MPC increased $2.26 billion in 2017 compared to 2016 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. See Segment Results for additional information.

Total revenues and other income increased $12.01 billion in 2017 compared to 2016 primarily due to:

•

increased sales and other operating revenues (including consumer excise taxes) of $10.83 billion
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;

increased sales to related parties of $567 million 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;

increased income (loss) from equity method investments of $491 million 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;

increased other income of $142 million primarily due to increased RIN sales; and

decreased net gain on disposal of assets of $22 million primarily due to gains on the sale of certain
Speedway locations in 2016.

Total costs and expenses increased $10.37 billion in 2017 compared to 2016 primarily due to:

•

increased cost of revenues of $9.84 billion 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;

increased purchases from related parties of $61 million 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;

an inventory market valuation adjustment which decreased costs and expenses by $370 million in 2016
related to the reversal of the LCM inventory valuation reserve due to increased refined product prices;

•

decreased impairment expense of $130 million as the 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; and

increased selling, general and administrative expenses of $97 million primarily due to increases in employee-
related compensation and benefit expenses, higher corporate costs and net litigation settlement expenses of
$29 million.

Net interest and other financial costs increased $110 million in 2017 compared to 2016 mainly due to the MPLX senior notes
issued in February 2017 and a $45 million increase in pension settlement expenses, partially offset by decreased borrowings
on the MPC term loan agreement. We capitalized interest of $55 million in 2017 and $63 million in 2016. 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. 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 2017 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 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 rates, excluding the TCJA
in 2017, of 31 percent in 2017 and 33 percent in 2016, are slightly less than the U.S. statutory rate of 35 percent primarily
due to certain permanent benefit differences, including differences related to net income attributable to noncontrolling
interests and 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.

Noncontrolling interests increased $333 million primarily due to increased MPLX net income.

Segment Results

Our segment income from operations was approximately $6.26 billion, $4.39 billion and $3.14 billion for the years ended
December 31, 2018, 2017 and 2016, respectively. The following shows the percentage of segment income from operations
by segment for the last three years.

2018

Midstream
44.0%

2017

Midstream
30.5%

2016

Midstream
33.4%

Retail
16.4%

Retail
16.6%

Refining &
Marketing
39.6%

Retail
23.4%

Refining &
Marketing
52.9%

Refining &
Marketing
43.2%

Refining & Marketing

Refining & Marketing Revenues (a)

Refining & Marketing
Income from Operations (b)

2018

2017

2016

$82,599

2018

2017

2016

$64,691

$53,817

In millions

$2,481

$2,321

$1,357

In millions

(a) We adopted ASC 606 (Revenue from Contracts with Customers), as of January 1, 2018, and elected to report certain taxes on a net basis.
We applied the standard using the modified retrospective method, and, therefore, comparative information continues to reflect certain
taxes on a gross basis.

(b) Results related to refining logistics and fuels distribution are presented in the Midstream segment prospectively from February 1, 2018.

Prior periods are not adjusted as these entities were not considered a business prior to February 1, 2018.

Refined Product Sales Volumes (a)

Average Refined Product Sales
Prices (b)

Refining & Marketing Margin (c)
(d)

2018

2017

2016

2,703
2,703

2,301
2,301

2,259
2,259

2018

2017

2016

$1.88

$1.54

$1.29

2018

2017

2016

$14.03

$12.60

$11.16

Total Refinery Throughputs

mbpd

Dollars per gallon
Refinery Direct Operating Costs (e)

Dollars per barrel

2018

2017

2016

2,274

1,944

1,850

mbpd

Planned
turnaround
and major
maintenance

Depreciation
and
amortization

Other
manufacturing
(f)

2018

$1.59

$1.31

$4.20

$7.10

2017

$1.72

$1.43

$4.07

$7.22

2016

$1.83

$1.47

$4.09

$7.39

Dollars per barrel

(a)

(b)

(c)

(d)

(e)

(f)

Includes intersegment sales and sales destined for export.
For comparability purposes, these amounts exclude sales taxes for all periods presented. As noted above, Refining & Marketing revenues
in 2018 reflect these taxes on a net basis, while 2017 and 2016 Refining & Marketing revenues continue to reflect these taxes on a gross
basis. The average refined product sales prices for 2017 and 2016 included excise taxes of $0.18 per gallon before this adjustment.
Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs. Excludes LCM inventory
valuation adjustments.
See “Non-GAAP Measures” section for reconciliation and further information regarding this non-GAAP measure.
Per barrel of total refinery throughputs.
Includes utilities, labor, routine maintenance and other operating costs.

2018 Compared to 2017

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. With the
acquisition of Andeavor, we revised our market data to include a West Coast 3-2-1 crack spread. Additionally,
the Chicago 6-3-2-1 crack spread was revised to reflect a Mid-Continent 3-2-1 crack spread and the Gulf coast
6-3-2-1 crack spread was also revised to reflect a 3-2-1 crack spread. See the “Overview of Segments” section for
further discussion of our revised crack spreads.

Benchmark spot prices (dollars per gallon)

2018

2017

Chicago CBOB unleaded regular gasoline

Chicago ultra-low sulfur diesel

USGC CBOB unleaded regular gasoline

USGC ultra-low sulfur diesel

LA CARBOB

LA CARB diesel

Market Indicators (dollars per barrel)

LLS

WTI

ANS

Crack Spreads

Mid-Continent WTI 3-2-1

USGC LLS 3-2-1

West Coast ANS 3-2-1

Blended 3-2-1(a)(b)

Crude Oil Differentials

Sweet

Sour

1.86

2.07

1.88

2.05

2.06

2.14

69.93

64.10

68.46

14.02

7.91

11.66

10.62

1.58

1.64

1.60

1.62

54.00

50.85

54.44

12.71

8.55

14.02

10.22

(3.83) $

(7.60)

(1.04)

(5.02)

(a) Blended 3-2-1 WTI/LLS/ANS crack spread 38/38/24 percent in 2018, Blended 6-3-2-1 Chicago/USGC crack spread is 40/60 percent for
the first nine months of 2018 and in 2017 and 38/62 percent in 2016. These blends are based on MPC’s refining capacity by region in
each period.

(b) Beginning 4Q 2018, Blended Mid-Con/USGC/West Coast crack spread is weighted 38/38/24 percent based on MPC’s refining capacity

by PADD. From Q1 2017 through Q3 2018, the blended spread was weighted 40/60 percent Mid-Con/USGC.

Refining & Marketing segment revenues increased $17.91 billion primarily due to higher refined product sales
volumes, which increased 402 mbpd, and higher refined product sales prices, which increased $0.34 per gallon.
The increase in sales volumes is largely due to the acquisition of Andeavor on October 1, 2018. These increases
were partially offset by our election to present revenues net of certain taxes under ASC 606 prospectively from
January 1, 2018, which resulted in a decrease in Refining & Marketing segment revenues of $4.58 billion in
2018. See Item 8. Financial Statements and Supplementary Data – Notes 2 and 3 for additional information on
recently adopted accounting standards.

income from operations increased $160 million primarily due to higher
Refining & Marketing segment
throughputs as a result of the Andeavor acquisition as well as wider sour and sweet crude differentials. For
comparison purposes, as noted in the Market Indicators table, 2017 indicators have been included which reflect
the new indicators we began using subsequent to the acquisition of Andeavor. Based on this, the USGC,
Mid-Continent and West Coast blended 3-2-1 crack spread was $10.62 per barrel in 2018 as compared to 10.22
per barrel in 2017. These crack spreads are net of RIN crack adjustments of $1.61 and $3.57 for 2018 and 2017,
respectively.

Based on changes in the market indicators shown above and our refinery throughputs, we estimate a positive
impact of $3.40 billion on Refining & Marketing segment income from operations, of which $1.81 billion and
$1.59 billion are due to the effects of changes in price and volume, respectively. 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 an estimated negative impact on
Refining & Marketing segment income from operations of $698 million in 2018 compared to 2017. The
significant elements of the negative impact were unfavorable crude acquisition costs and unfavorable product
price realizations relative to the market indicators.

The cost of inventories of crude oil and refinery feedstocks, refined products and merchandise is determined
primarily under the LIFO method. There were no material liquidations of LIFO inventories in 2018 and we
recognized a LIFO charge of $7 million in 2017.

Refinery direct operating costs decreased $0.12 per barrel in 2018 compared to 2017. The decrease includes a
$0.13 per barrel decrease in planned turnaround and major maintenance costs and a $0.12 per barrel decrease in
depreciation and amortization primarily due to higher refinery throughput resulting from the addition of 10
refineries as part of the acquisition of Andeavor. Total turnaround costs increased due to costs related to these
additional refineries as well as higher turnaround costs at our Detroit and Canton refineries, partially offset by
lower turnaround costs at our Galveston Bay and Garyville refineries. The increase in other manufacturing costs
of $0.13 per barrel is mainly due to costs associated with the acquired refineries, partially offset by an increase in
throughput due to the acquisition of Andeavor. In addition, manufacturing costs and depreciation and
amortization costs per barrel decreased due to the dropdown of refining and logistics assets to MPLX on
February 1, 2018.

We purchase RINs to satisfy a portion of our RFS2 compliance. Our expenses associated with purchased RINs
were $316 million in 2018 compared to $457 million in 2017. The decrease in 2018 was primarily due to lower
weighted average RIN costs which more than offset the increase in our RINs obligation subsequent to the
acquisition of Andeavor.

2017 Compared to 2016

Benchmark spot prices (dollars per gallon)

Chicago CBOB unleaded regular gasoline

Chicago ultra-low sulfur diesel

USGC CBOB unleaded regular gasoline

USGC ultra-low sulfur diesel

Market Indicators (dollars per barrel)

LLS

WTI

Crack Spreads

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

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

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

Crude Oil Differentials

LLS – WTI(a)

Sweet/Sour(a)(c)

2017

2016

1.58

1.64

1.60

1.62

1.33

1.34

1.33

1.32

54.00

50.85

45.01

43.47

9.77

9.89

9.84

3.15

5.94

7.19

6.80

6.96

1.55

6.52

(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)

LLS (prompt) – [delivered cost of sour crude oil: Arab Light, Kuwait, Maya, Western Canadian Select and Mars].

Refining & Marketing segment revenues increased $10.87 billion in 2017 compared to 2016 primarily due to
higher refined product sales prices and volumes.

Refining & Marketing segment income from operations increased $964 million in 2017 compared to 2016.
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.

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 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 an estimated negative impact on Refining & Marketing segment income from operations of $1.35 billion in
2017 compared to 2016. The significant elements of the negative impact were unfavorable product price
realizations and unfavorable crude acquisition costs relative to the market indicators.

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. For the full year, we recognized a LIFO charge of
$7 million in 2017 and $2 million in 2016.

Refinery direct operating costs decreased $0.17 per barrel in 2017 compared to 2016. 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.

We purchase RINs to satisfy a portion of our RFS2 compliance. Our expenses associated with purchased RINs
were $457 million in 2017 and $288 million in 2016. 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.

Supplemental Refining & Marketing Statistics

Refining & Marketing Operating Statistics

Crude oil capacity utilization percent(a)

Refinery throughputs (thousands of barrels per day):

Crude oil refined

Other charge and blendstocks

Total

Sour crude oil throughput percent

Sweet crude oil throughput percent

Refined product yields (mbpd):(b)

Gasoline

Distillates

Propane

Feedstocks and petrochemicals

Heavy fuel oil

Asphalt

Total

Refining & Marketing Operating Statistics By Region – Gulf Coast

Refinery throughputs (mbpd):(b)

Crude oil refined

Other charge and blendstocks

Total

Sour crude oil throughput percent

Sweet crude oil throughput percent

Refined product yields (mbpd):(b)

Gasoline

Distillates

Propane

Feedstocks and petrochemicals

Heavy fuel oil

Asphalt

Total

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

Planned turnaround and major maintenance

Depreciation and amortization

Other manufacturing(d)

Total

2018

2017

2016

2,081

193

2,274

1,107

773

288

1,765

179

1,944

932

641

277

1,699

151

1,850

900

617

241

2,316

1,986

1,883

1,135

190

1,325

574

432

291

1,070

224

1,294

546

405

311

1,039

195

1,234

514

399

286

1,359

1,330

1,261

1.12 $

1.75 $

1.03

3.41

1.12

3.74

5.56 $

6.61 $

2.09

1.14

3.70

6.93

Refining & Marketing Operating Statistics By Region – Mid-Continent

2018

2017

2016

Refinery throughputs (mbpd):(b)

Crude oil refined
Other charge and blendstocks

Total

Sour crude oil throughput percent
Sweet crude oil throughput percent
Refined product yields (mbpd):(b)

Gasoline
Distillates
Propane
Feedstocks and petrochemicals
Heavy fuel oil
Asphalt
Total

792
47
839

33
67

444
279
14
43
14
50
844

695
33
728

40
60

386
236
11
42
13
46
734

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

Planned turnaround and major maintenance
Depreciation and amortization
Other manufacturing(d)

Total

Refining & Marketing Operating Statistics By Region – West Coast

1.97 $
1.67
4.34
7.98 $

1.48 $
1.81
4.26
7.55 $

Refinery throughputs (mbpd):(b)

Crude oil refined
Other charge and blendstocks

Total

Sour crude oil throughput percent
Sweet crude oil throughput percent
Refined product yields (mbpd):(b)

Gasoline
Distillates
Propane
Feedstocks and petrochemicals
Heavy fuel oil
Asphalt
Total

154
17
171

72
28

89
62
2
14
7
-
174

-
-
-

-
-

-
-
-
-
-
-
-

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

Planned turnaround and major maintenance
Depreciation and amortization
Other manufacturing(d)

Total

2.79 $
1.26
8.07
12.12 $

- $
-
-
- $

660
39
699

40
60

386
218
11
35
12
43
705

1.15
1.88
4.29
7.32

-
-
-

-
-

-
-
-
-
-
-
-

-
-
-
-

(a) Based on calendar-day capacity, which is an annual average that includes down time for planned maintenance and other normal

operating activities.
Excludes inter-refinery volumes which totaled 61 mbpd, 78 mbpd and 83 mbpd for 2018, 2017 and 2016, respectively, for all regions.
Per barrel of total refinery throughputs.
Includes utilities, labor, routine maintenance and other operating costs.

(b)

(c)

(d)

Retail

2018

2017

2016

s
n
o
l
l
a
G

f
o

s
n
o
i
l
l
i

Retail Revenues

Retail Income from Operations

$23,552

2018

$1,028

$19,033

$18,286

2017

2016

$729

$733

In millions

Retail Fuel Margin (a)(b)

Merchandise Margin

2018

$0.2230

2018

28.4%

2017

$0.1738

2016

$0.1656

Dollars per Gallon

2017

28.7%

2016

28.7%

Retail Fuel
Sales

6,094

5,799

6,937
644
6,293

2016

2017

2018

Speedway

Direct Dealer

(a)

The price paid by consumers or direct dealers less the cost of refined products, including transportation, consumer excise taxes and
bankcard processing fees (where applicable), divided by gasoline and distillate sales volume. Excludes LCM inventory valuation
adjustments.

(b)

See “Non-GAAP Measures” section for reconciliation and further information regarding this non-GAAP measure.

Key Financial and Operating Data

Average fuel sales prices (dollars per gallon)

Merchandise sales (in millions)

Merchandise margin (in millions)(a)(b)

Same store gasoline sales volume (period over period)(c)

Same store merchandise sales (period over period)(c)(d)

Convenience stores at period-end

Direct dealer locations at period-end

2018

2.71

5,232

1,486

2017

2.34

4,893

1,402

2016

2.09

5,007

1,435

(1.5)%

4.2%

3,923

1,065

(1.3)%

1.2%

2,744

N/A

(0.4)%

3.2%

2,733

N/A

(a)

(b)

(c)

(d)

The price paid by the consumers less the cost of merchandise.

See “Non-GAAP Measures” section for reconciliation and further information regarding this non-GAAP measure.

Same store comparison includes only locations owned at least 13 months.

Excludes cigarettes.

2018 Compared to 2017

Retail segment revenues increased $4.52 billion. The majority of this increase is due to the acquisition of
Andeavor on October 1, 2018, which added company-owned and operated retail locations, which are included in
Speedway fuel sales, and direct dealer locations. The existing Retail business also saw a $1.18 billion increase in
fuel and merchandise sales. Total fuel sales increased $5.21 billion primarily due to an increase in Speedway fuel
sales volumes of 494 million gallons, the addition of direct dealer fuel sales of 644 million gallons and an
increase in average gasoline and distillate selling prices of $0.37 per gallon. Merchandise sales increased
$339 million. The increases in Speedway fuel sales and merchandise sales as well as the addition of sales to
direct dealers were primarily due to the acquisition of Andeavor. These increases were partially offset by our
election to present revenues net of certain taxes under ASC 606 prospectively from January 1, 2018, which
resulted in a decrease in Retail segment revenues of $844 million in 2018. See Item 8. Financial Statements and
Supplementary Data – Notes 2 and 3 for additional information on recently adopted accounting standards.

Retail segment income from operations increased $299 million primarily due to contributions from the Retail
operations acquired in the Andeavor acquisition. For locations owned prior to the Andeavor acquisition,
increased gasoline and distillate and merchandise margins were more than offset by increased operating
expenses.

2017 Compared to 2016

Retail segment revenues increased $747 million due to an increase in fuel sales of $860 million partially offset by
a decrease in merchandise sales of $114 million. Average fuel 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 fuel sales
volumes and merchandise sales are primarily attributable to the contribution of 41 travel centers to PJF Southeast
in fourth quarter of 2016.

Retail segment income from operations decreased $4 million. 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.

Midstream

2018

2017

2016

Midstream Revenues (a)(b)

Midstream Income from Operations (b)

$6,660

2018

$2,752

$3,765

$3,090

2017

2016

$1,339

$1,048

In millions

(b) Results related to refining logistics and fuels distribution dropdown into MPLX are presented in the Midstream segment prospectively

from February 1, 2018. Prior periods are not adjusted as these entities were not considered a business prior to February 1, 2018.

Pipeline Throughputs (a)

Terminal Throughput (b)

2018

2017

2016

4,177

2018

1,901

3,377

2,948

2017

2016

1,477

1,505

mbpd

Gathering System Throughput (c)

Natural Gas Processed (c)

C2 (Ethane) + NGLs Fractionated
(c)

2018

2017

2016

4,779

2018

7,199

3,608

3,275

MMcf/d

2017

2016

6,460

5,761

MMcf/d

2018

2017

2016

464

394

335

mbpd

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

(b)

(c)

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

Includes amounts related to unconsolidated equity method investments on a 100 percent basis.

Benchmark Prices

Natural Gas NYMEX HH ($ per MMBtu)
C2 + NGL Pricing ($ per gallon)(a)

2018

2017

2016

$
$

3.07
0.78

$
$

3.02
0.66

$
$

2.55
0.47

(a) 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.

2018 Compared to 2017

On February 1, 2018, we completed the dropdown of our refining logistics assets and fuels distribution services
to MPLX, which is reported in our Midstream segment. Refining logistics contains the integrated tank farm
assets that support MPC’s refining operations. Fuels distribution is structured to provide a broad range of
scheduling and marketing services as MPC’s agent. These new businesses were reported in the Midstream
segment prospectively from February 1, 2018. No effect was given to prior periods as these entities were not
considered businesses prior to February 1, 2018.

Midstream segment revenue and income from operations increased $2.90 billion and $1.41 billion, respectively.
Revenue increased $1.94 billion primarily due to fees charged for fuels distribution and refining logistics services
following the February 1, 2018 dropdown to MPLX in addition to services provided by ANDX following the
acquisition of Andeavor on October 1, 2018. Revenues also increased by approximately $502 million due to ASC
606 gross ups. See Item 8. Financial Statements and Supplementary Data – Note 3 for additional information.

In 2018, Midstream segment income from operations includes $230 million due to contributions from ANDX
and $874 million, from the refining logistics assets and fuels distribution services contributed to MPLX on
February 1, 2018. Prior period Midstream segment results do not reflect the impact of these new businesses. The
incremental $309 million increase in Midstream segment results in 2018, was driven by record gathered,
processed and fractionated volumes and record pipeline throughput volumes for MPLX.

2017 Compared to 2016

Midstream segment revenue and income from operations increased $675 million and $291 million, respectively,
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.

Items not Allocated to Segments

Key Financial Information (in millions)

Items not allocated to segments:

Corporate and other unallocated items(a)
Transaction-related costs
Litigation
Impairment(b)

2018

2017

2016

(502) $
(197)
-
9

(365) $
-
(29)
23

(266)
-
-
(486)

(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 and ANDX, which are included in the Midstream
segment. Corporate overhead expenses are not allocated to the Refining & Marketing and Retail segments.
2018 and 2017 includes MPC’s share of gains from the the sale of assets remaining from the canceled Sandpiper pipeline project. 2016
includes impairments of goodwill and equity method investments. See Item 8. Financial Statements and Supplementary Data – Notes 16
and 17.

(b)

2018 Compared to 2017

Corporate and other unallocated expenses increased $137 million in 2018 compared to 2017 largely due to
increased costs and expenses for the combined company after the Andeavor acquisition on October 1, 2018.

Other unallocated items in 2018 include $197 million of transaction-related costs for financial advisors,
employee severance and other costs associated with the Andeavor acquisition and MPC’s share of gains from the
sale of assets remaining from the canceled Sandpiper pipeline project. 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.

2017 Compared to 2016

Corporate and other unallocated expenses increased $99 million in 2017 compared to 2016 largely due to higher
unallocated corporate costs and increases in employee-related expenses and corporate costs.

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.

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.

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

Refining & Marketing income from operations
Plus (Less):

Refinery direct operating costs(a)
Refinery depreciation and amortization
Other:

Operating expenses(a)(b)
Depreciation and amortization

Inventory market valuation adjustment

Refining & Marketing margin(c)

2018

2017

2016

2,481

2,321

1,357

4,801
1,089

3,189
85
-
11,645

4,113
1,013

1,425
69
-
8,941

4,007
994

1,475
69
(345)
7,557

(a)

(b)

(c)

Excludes depreciation and amortization.
Includes fees paid to MPLX and ANDX for various midstream services. MPLX and ANDX are reported in MPC’s Midstream segment.
Sales revenue less cost of refinery inputs and purchased products, excluding any LCM inventory market adjustment.

Retail Fuel Margin

Retail fuel margin is defined as the price paid by consumers or direct dealers less the cost of refined products,
including transportation, consumer excise taxes and bankcard processing fees (where applicable) and excluding
any LCM inventory market adjustment.

Retail Merchandise Margin

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

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

Retail income from operations

Plus (Less):

2018

2017

2016

1,028

729

733

Operating, selling, general and administrative expenses(a)

1,796

1,533

1,555

Depreciation and amortization(a)

Income from equity method investments

Net gain on disposal of assets

Other income(a)

Inventory market valuation adjustment

Retail total margin

Retail total margin:(a)

Fuel margin(b)

Merchandise margin(c)

Other margin

Retail total margin

353

(74)

(17)

(7)

275

(69)

(14)

273

(5)

(30)

(18)

(25)

3,079

2,440

2,483

1,547

1,008

1,486

1,402

1,009

1,435

3,079

2,440

2,483

(a)

(b)

(c)

2018 and 2017 margins and expenses do not reflect any results from the 41 travel centers contributed to PFJ Southeast, whereas they are
reflected in the 2016 information. Our share of the net results from the joint venture is reflected in income from equity method
investments.
The price paid by consumers or direct dealers less the cost of refined products, including transportation, consumer excise taxes and
bankcard processing fees (where applicable) and excluding any LCM inventory market adjustment.
The price paid by the consumers less the cost of merchandise.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

Our cash and cash equivalents balance was $1.69 billion at December 31, 2018 compared to $3.01 billion at
December 31, 2017. 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

2018

2017

2016

6,158

6,612

4,017

(7,670)

222

(3,398)

(1,091)

(2,967)

(1,294)

(1,290)

2,123

(244)

Net cash provided by operating activities decreased $454 million in 2018 compared to 2017, primarily due to an
unfavorable change in working capital of $2.28 billion partially offset by an increase in operating results. Net
cash provided by operating activities increased $2.60 billion in 2017 compared to 2016, primarily due to
increased operating results and favorable changes in working capital of $1.74 billion compared to 2017. The
above changes in working capital exclude changes in short-term debt.

For 2018, changes in working capital were a net $340 million use of cash, primarily due to the effect of decreases
in energy commodity prices on working capital. Accounts payable decreased primarily due to lower crude oil
payable prices. Inventories decreased primarily due to a decrease in crude and refined product inventories.
Current receivables decreased primarily due to lower crude oil receivable prices. All of these effects exclude the
working capital acquired in connection with the acquisition of Andeavor.

For 2017, changes in working capital were a net $1.94 billion source of cash, primarily due to the effect of increases
in energy commodity prices on working capital. Accounts payable increased primarily due to higher crude oil
payable volumes and prices; current receivables increased primarily due to higher crude oil and refined product
receivable prices and volumes; and inventories decreased 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 the effect of
increases in energy commodity prices on working capital. Accounts payable increased primarily due to higher
crude oil payable prices; current receivables increased primarily due to higher refined product and crude oil
receivable prices; and inventories increased, excluding the change in the Company’s inventory valuation reserve
of $370 million, primarily due to higher crude oil and refined product inventory volumes.

Cash flows used in investing activities increased $4.27 billion in 2018 compared to 2017 and increased
$431 million in 2017 compared to 2016.

• 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.

• Cash used for acquisitions of $3.82 billion in 2018 primarily includes cash paid to Andeavor

stockholders of $3.5 billion in connection with the acquisition of Andeavor on October 1, 2018.

• Net investments were a use of cash of $393 million in 2018 compared to $743 million in 2017 and
$288 million in 2016. Investments in 2017 primarily include MPLX’s $500 million investment in a
partial interest in the Bakken Pipeline system.

• Cash provided by disposal of assets totaled $54 million, $79 million and $101 million in 2018, 2017
and 2016, respectively. Cash provided in 2016 was primarily due to 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)

2018

2017

2016

Additions to property, plant and equipment per consolidated

statements of cash flows
Asset retirement expenditures
Increase (decrease) in capital accruals

Total capital expenditures

Investments in equity method investees(a)

Total capital expenditures and investments

3,578
8
309
3,895
409
4,304

2,732
2
67
2,801
305
3,106

2,892
6
(127)
2,771
288
3,059

(a)

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 a source of cash of $222 million in 2018 and uses of cash of $1.09 billion in 2017 and
$1.29 billion in 2016.

• Long-term debt borrowings and repayments, including debt issuance costs, were a net $5.36 billion
source of cash in 2018 compared to a $2.24 billion source of cash in 2017 and a $1.42 billion use of
cash in 2016. During 2018, MPLX issued $7.75 billion of senior notes, redeemed $750 million of
senior notes, borrowed and repaid $4.1 billion under the MPLX term loan, and borrowed and repaid
$1.41 billion and $1.92 billion, respectively, under the MPLX Credit Agreement. In addition, MPC
redeemed $600 million of senior notes. 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 used in common stock repurchases totaled $3.29 billion in 2018, $2.37 billion in 2017, and
$197 million in 2016 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 $954 million in 2018, $773 million in 2017 and $719 million
in 2016. The increase in 2018 was primarily due to an increase in our base dividend in addition to a net
increase in the number of shares of our common stock outstanding due to issuances related to the
Andeavor acquisition, partially offset by share repurchases. The increase in 2017 was due to an
increase in our base dividend, partially offset by a decrease in the number of outstanding shares of our
common stock as a result of share repurchases. Dividends per share were $1.84 in 2018, $1.52 in 2017
and $1.36 in 2016.

• Distributions to noncontrolling interests increased $209 million in 2018 compared to 2017 and
$152 million in 2017 compared to 2016, primarily due to an increase in MPLX’s distribution per
common unit. In 2018, distributions to noncontrolling interests also included ANDX’s distribution per
common unit paid in the fourth quarter subsequent to the acquisition of Andeavor on October 1, 2018.

• 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 financing activities in 2017 and 2016 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 $8.3 billion at December 31, 2018 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, 2018

Total Capacity

Outstanding
Borrowings

Available
Capacity

5,000

1,000

750

6,750

4,968

1,000

750

6,718

1,609

8,327

(a) Outstanding borrowings include $32 million in letters of credit outstanding under this facility. Excludes MPLX’s $2.25 billion bank
revolving credit facility, which had no borrowings and $3 million of letters of credit outstanding as of December 31, 2018 and ANDX’s
$2.10 billion bank revolving credit facilities, which had $1.25 billion outstanding as of December 31, 2018.
Excludes $68 million and $10 million of MPLX and ANDX cash and cash equivalents, respectively.

(b)

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.

On November 15, 2018, MPLX issued $2.25 billion in aggregate principal amount of senior notes in a public
offering, consisting of $750 million aggregate principal amount of 4.800 percent unsecured senior notes due
February 2029 and $1.5 billion aggregate principal amount of 5.500 percent unsecured senior notes due February
2049. On December 10, 2018, a portion of the net proceeds from the offering was used to redeem the
$750 million in aggregate principal amount of 5.500 percent unsecured notes due February 2023 issued by
MPLX and MarkWest. These notes were redeemed at 101.833 percent of the principal amount, plus the write off
of unamortized deferred financing costs, resulting in a loss on extinguishment of debt of $60 million. The
remaining net proceeds have or will be used to repay borrowings under MPLX’s revolving credit facility and
intercompany loan agreement with MPC and for general partnership purposes.

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 used to finance the cash portion of
the consideration for the dropdown of refining logistics assets and distribution services to MPLX. The remaining
proceeds were used to repay outstanding borrowings under MPLX’s revolving credit facility and intercompany
loan agreement with MPC 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, 2018, we had no amounts outstanding under the commercial paper
program.

MPC Bank Revolving Credit Facilities – On August 28, 2018, in connection with the Andeavor acquisition, we
entered into credit agreements with a syndicate of lenders to replace MPC’s previous five-year $2.5 billion bank
revolving credit facility due in 2022 and our previous 364-day $1 billion bank revolving agreement that expired
in July 2018. The new credit agreements, which became effective October 1, 2018, provide for a $5 billion five-
year revolving credit facility that expires in 2023 and a $1 billion 364-day revolving credit facility that expires in
2019. The financial covenants and the interest rate terms contained in the new credit agreements are substantially
the same as those contained in the previous bank revolving credit facilities. There were no borrowings and
approximately $32 million of letters of credit outstanding under these facilities at December 31, 2018.

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, 2018, eligible trade receivables supported borrowings of $750 million. There were no borrowings
outstanding at December 31, 2018. 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 2022 (“MPLX credit agreement”). At December 31, 2018,
MPLX had no outstanding borrowings and $3 million of letters of credit outstanding under the bank revolving
credit facility, resulting in total unused loan availability of approximately $2.25 billion.

ANDX credit agreements—Through the Andeavor acquisition on October 1, 2018, we acquired the general
partner and 156 million units of ANDX. ANDX is party to a $1.1 billion revolving credit agreement and a
$1.0 billion dropdown credit agreement both of which expire in January 2021 (together, the “ANDX credit
agreements”). As of December 31, 2018, ANDX had approximately $1.25 billion outstanding borrowings under
the ANDX credit agreements, resulting in total unused loan availability of $855 million.

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, 2018, we were in compliance with the
covenants contained in the MPC credit agreements, including a ratio of Consolidated Net Debt to Total
Capitalization of 0.19 to 1.00, as well as the other covenants contained in the MPC credit agreements.

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. The
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, 2018, MPLX was in compliance with the covenants contained in the MPLX credit
agreement, including a ratio of Consolidated Total Debt to Consolidated EBITDA of 3.80 to 1.0.

ANDX credit agreements) for the prior four fiscal quarters of no greater than 5.0 to 1.0 for the prior four fiscal
quarters (or 5.5 to 1.0 for up to two fiscal quarters following certain acquisitions). Consolidated EBITDA used to
calculate the Consolidated Leverage Ratio is subject to adjustments for certain acquisitions completed and capital
projects undertaken during the relevant period. The covenants also restrict, among other things, ANDX’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, 2018, ANDX was in compliance with the covenants contained in the ANDX credit
agreements, including a Consolidated Leverage Ratio of 3.72 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, the MPLX credit agreement and the
ANDX credit agreements 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 February 1, 2019, the credit ratings on our,
MPLX’s and ANDX’s senior unsecured debt are as follows.

Company

MPC

MPLX

ANDX

Rating Agency

Rating

Moody’s
Standard & Poor’s
Fitch
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- (positive outlook)
Ba1 (review for upgrade)
BBB- (positive watch)
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, the ANDX credit agreements 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 could increase the applicable interest rates, yields and other fees payable under such agreements.
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 or other agreements.

Capital Requirements

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

In 2018, we made pension contributions totaling $115 million. We have no required funding for 2019, but may
make voluntary contributions at our discretion.

On January 28, 2019, we announced our board of directors approved a $0.53 per share dividend, payable
March 11, 2019 to shareholders of record at the close of business on February 20, 2019.

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 $18.0 billion in total share repurchase authorizations
and we have repurchased a total of $13.10 billion of our common stock, leaving $4.9 billion available for
repurchases as of December 31, 2018. Under these authorizations, we have acquired 293 million shares at an
average cost per share of $44.60. As part of our strategic actions to enhance shareholder value, for the year ended
December 31, 2018, cash proceeds received from dropdowns to MPLX during the year were used in part to
repurchase $3.29 billion of our common stock. 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

2018

2017

2016

3,287

69.46

2,372

53.85

197

41.84

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, 2018. The contractual obligations detailed below do not include our
contractual obligations to MPLX and ANDX under various fee-based commercial agreements as these
transactions are eliminated in the consolidated financial statements.

(In millions)

Total

2019

2020-2021

2022-2023

Later Years

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

44,673
897
3,423

1,790
65
709

4,128
127
1,172

5,865
148
684

32,890
557
858

10,306

8,881

1,115

2,556

550

1,825

1,794

3,361
18,048

948
12,173

760

1,009
2,915

196

661

574
1,431

114

585

830
1,529

2,734

297

587

531

1,319

69,775

15,034

8,929

8,659

37,153

(a)

Includes interest payments of $18.42 billion for our senior notes, the MPLX senior notes and the ANDX senior notes in addition to
interest on the MPLX credit agreement and ANDX credit agreements, commitment and administrative fees for our credit agreement, the
MPLX credit agreement, the ANDX credit agreements 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 2028. See Item 8. Financial Statements and Supplementary Data – Note 22.

Capital Spending

The 2019 capital investment plan for MPC, MPLX and ANDX and capital expenditures and investments for each
of the last three years are summarized by segment below. MPC’s capital investment plan for 2019 totals
approximately $2.8 billion for capital projects and investments, excluding MPLX, ANDX, capitalized interest
and acquisitions. MPC’s 2019 capital investment plan includes all of the planned capital spending for Refining &
Marketing, Retail and Corporate as well as a portion of the planned capital investments in Midstream. The

remainder of the planned capital spending for Midstream reflects the capital investment plans for MPLX and
ANDX. We continuously evaluate our capital plan and make changes as conditions warrant.

(In millions)

2019 Plan

2018

2017

2016

Capital expenditures and investments:(a)

Refining & Marketing

1,750

1,057

Retail

Midstream

Corporate and Other(b)

Total

500

3,600

460

2,630

157

832

381

1,755

138

1,054

303

1,558

144

5,910

4,304

3,106

3,059

(a) Capital expenditures include changes in capital accruals.

(b)

Includes capitalized interest of $80 million, $55 million and $63 million for 2018, 2017 and 2016, respectively. The 2019 capital
investment plan excludes capitalized interest.

Refining & Marketing

The Refining & Marketing segment’s forecasted 2019 capital spending and investments is approximately
includes approximately $1.02 billion of growth capital focused on refinery
$1.8 billion. This amount
optimization, production of higher value products, increased capacity to upgrade residual fuel oil and expanded
export capacity. Investing to enhance margins, we will continue our disciplined high-return investments in resid
upgrading capacity and the ability to produce more diesel. We also plan to continue investing in domestic light
is
products supply placement
approximately $730 million, which includes approximately $260 million related to regulatory spending for Tier 3
gasoline.

flexibility, as well as increasing our export capacity. Sustaining capital

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

Retail

The Retail segment’s 2019 capital forecast of approximately $500 million is focused on conversion of recently
acquired locations to the Speedway brand and systems, growth in existing and new markets, dealer sites,
commercial fueling/diesel expansion, food service through store remodels and high quality acquisitions.

Major capital projects over the 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 $200 million
of maintenance capital. This growth plan includes the addition of approximately 765 million cubic feet per day of
processing capacity at five gas processing plants, two in the Marcellus basin and three in the Southwest, which
expands MPLX’s processing capacity in the Permian Basin and the STACK shale play of Oklahoma. The growth
plan also includes the addition of approximately 100 mbpd of fractionation capacity in the Marcellus and Utica

basins, continued expansion of MPLX’s marine fleet and other projects including the Permian long-haul crude
oil, natural gas and NGL pipelines as well as export facility projects which will further enhance our full value
chain capture.

Major capital projects over the 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.

ANDX’s capital
investment plan includes $600 million of organic growth capital and approximately
$100 million of maintenance capital. The growth plan includes the construction of additional crude storage
capacity for unloading of marine vessels, the construction of a crude gathering system to provide connectivity to
multiple long-haul pipelines and a pipeline interconnect project designed to provide direct connectivity between
certain MPC refineries.

The remaining Midstream segment’s forecasted 2019 capital spend, excluding MPLX and ANDX,
is
approximately $500 million which primarily relates to investments in equity affiliate pipelines, including our
expected investments in the Gray Oak Pipeline, a new pipeline spanning from the West Texas Permian Basin to
the Gulf Coast which is expected to be in service by the end of 2019.

Corporate and Other

The 2019 capital forecast includes approximately $60 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.

TRANSACTIONS WITH RELATED PARTIES

We believe that transactions with related parties were conducted on terms comparable to those with unaffiliated
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,

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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

2018

2017

2016

380

343

302

525

957

413

792

541

883

(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, twelve percent and eleven percent of capital
expenditures, for 2018, 2017 and 2016, respectively, excluding acquisitions. Our environmental capital
expenditures are expected to approximate $420 million, or 7 percent, of total planned capital expenditures in
2019. 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. The amount of expenditures in 2019 is also dependent upon
the resolution of the matters described in Item 3. Legal Proceedings, which may require us to complete additional
projects and increase our actual environmental capital and operating expenditures.

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 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

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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.

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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 financial information prepared using significant assumptions
including:

• 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, Retail 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 materially 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 or retail
fuel margins, other changes to contracts or changes in the regulatory environment.

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, company-owned convenience store locations
for Retail segment assets, 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.

Unlike long-lived assets, goodwill is subject to annual, or more frequent if necessary, impairment testing. At
December 31, 2018, we had a total of $20.18 billion of goodwill recorded on our consolidated balance sheet,
including $16.31 billion that was preliminarily recognized as a result of the Andeavor acquisition and remains
subject to finalization within one year of the October 1, 2018 acquisition date.

For the reporting units included in our annual impairment testing for 2018, the analysis resulted in the fair value
of the reporting units exceeding their carrying value by percentages ranging from approximately 14 percent to
4,608 percent. The reporting unit with fair value exceeding its carrying value by approximately 14 percent has
goodwill of $228 million at December 31, 2018. An increase of one percentage 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, 2018. 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

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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, 2018, we had $5.90 billion of investments in equity
method investments recorded on our consolidated balance sheet.

An estimate of the sensitivity to net income resulting from impairment calculations is not practicable, given the
numerous assumptions (e.g., pricing, 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.

See Item 8. Financial Statements and Supplementary Data – Note 14 for additional information on our equity
method investments. See Item 8. Financial Statements and Supplementary Data – Note 16 for additional
information on our goodwill and intangibles.

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 valuation 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 future
cash flows 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 materially from the
projected results used to determine fair value.

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

104

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 actuaries’ discount rate
models. These models calculate an equivalent single discount rate for the projected benefit plan cash flows using
yield curves derived from Aa or higher bond yields. The yield curves represent 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 4.21 percent for our pension plans and 4.26 percent for our other postretirement benefit plans by
0.25 percent would increase pension obligations and other postretirement benefit plan obligations by $69 million
and $31 million, respectively, and would increase defined benefit pension expense and other postretirement
benefit plan expense by $8 million and $1 million, respectively.

105

The long-term asset rate of return assumption considers the asset mix of the plans (currently targeted at
approximately 42 percent equity securities and 58 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 6.15 percent
long-term rate of return to determine our 2018 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 6.15 percent effective for 2019. Decreasing the 6.15 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 2018 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.

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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, 2018, 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
into
over-the-counter swaps, options and over-the-counter options. 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.

these derivatives are exchange-traded contracts but we also enter

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 and ANDX’s control. A portion of MPLX’s and ANDX’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

107

commodity prices influence the level of natural gas drilling by MPLX’s and ANDX’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 2019.
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. ANDX does not hedge its exposure using commodity derivative instruments
because of the minimal impact of commodity price risk on its liquidity, financial position and results of
operations.

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 following table includes the composition of net losses/gains on our commodity derivative positions for the
years ended December 31, 2018 and 2017, respectively.

(In millions)

Realized loss on settled derivative positions

Unrealized gain (loss) on open net derivative positions

Net loss

2018

2017

(11)

(27)

(35)

(46) $

(21)

See Item 8. Financial Statements and Supplementary Data – Note 18 for additional information on our open
derivative positions at December 31, 2018.

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, 2018 is provided in the following table.

(In millions)

As of December 31, 2018

Crude

Refined products

Blending 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%

(22)

(55)

(8)

(6)

(19)

(15)

(3)

(7)

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.

108

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,
2018 would cause future IFO effects to differ from those presented above.

Interest Rate Risk

Our use of fixed or variable-rate debt directly exposes us to interest rate risk. Fixed rate debt, such as our senior
notes, exposes us to changes in the fair value of our debt due to changes in market interest rates. Fixed rate debt
also exposes us to the risk that we may need to refinance maturing debt with new debt at higher rates or that our
current fixed rate debt may be higher than the current market. Variable-rate debt, such as borrowings under our
revolving credit facilities, exposes us to short-term changes in market rates that impact our interest expense. See
Item 8. Financial Statements and Supplementary Data – Note 19 for additional information on our 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, 2018 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, 2018(c)

25,272

2,052

1,247

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, 2018.
(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, 2018.

See Item 8. Financial Statements and Supplementary Data – Note 17 for additional information on the fair value
of our debt.

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 2018.

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

109

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.

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.

110

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)

Page

112

113

115

116

117

118

119

120

182

111

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) 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, 2018.

The effectiveness of MPC’s internal control over financial reporting as of December 31, 2018 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

112

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 (the “Company”) as of December 31, 2018 and 2017, 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, 2018, 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, 2018, 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, 2018 and 2017, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 2018 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, 2018, 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.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded
Andeavor from its assessment of internal control over financial reporting as of December 31, 2018 because it was
acquired by the Company in a purchase business combination during 2018. We have also excluded Andeavor
from our audit of internal control over financial reporting. Andeavor is a wholly-owned subsidiary whose total

113

assets and total revenues excluded from management’s assessment and our audit of internal control over financial
reporting represent 27% and 12%, respectively, of the related consolidated financial statement amounts as of and
for the year ended December 31, 2018.

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
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, 2019

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

114

MARATHON PETROLEUM CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

Revenues and other income:

Sales and other operating revenues(a)

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)(a)

Purchases from related parties

Inventory market valuation adjustment

Impairment expense

Depreciation and amortization

Selling, general and administrative expenses

Other taxes

Total costs and expenses

Income from operations

Net interest and other financial 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

2018

2017

2016

95,750

74,104

63,277

754

373

202

629

306

320

(185)

178

97,102

75,369

63,364

85,456

66,519

56,676

610

2,490

2,418

557

570

2,114

1,694

454

509

(370)

130

2,001

1,597

435

91,531

71,351

60,978

5,571

1,003

4,568

962

3,606

751

4,018

674

3,344

(460)

3,804

307

2,386

564

1,822

609

1,213

(2)

2,780

3,432

1,174

5.36

518

5.28

526

6.76

507

6.70

512

2.22

528

2.21

530

(a)

The 2018 period reflects an election to present certain taxes on a net basis concurrent with our adoption of ASU 2014-09, Revenue—
Revenue from Contracts with Customers (“ASC 606”). See Notes 2 and 3 for further information.

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

115

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 $14, $17 and $69, respectively

Prior service costs, net of tax of $12, ($16) and ($18), respectively

Other, net of tax of $1, $0 and $0, respectively

Other comprehensive income

Comprehensive income

Less comprehensive income (loss) attributable to:

Redeemable noncontrolling interest

Noncontrolling interests

Comprehensive income attributable to MPC

2018

2017

2016

3,606

3,804

1,213

(26)

115

(31)

3,693

3,807

1,297

751

307

(2)

2,867

3,435

1,258

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

116

MARATHON PETROLEUM CORPORATION

CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

Assets
Current assets:

Cash and cash equivalents
Receivables, less allowance for doubtful accounts of $9 and $11, respectively
Inventories
Other current assets

Total current assets
Equity method investments
Property, plant and equipment, net
Goodwill
Other noncurrent assets
Total assets

Liabilities
Current liabilities:

Accounts payable
Payroll and benefits payable
Accrued taxes
Debt due within one year
Other current liabilities

Total current liabilities

Long-term debt
Deferred income taxes
Defined benefit postretirement plan obligations
Deferred credits and other liabilities

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 – 975 million and 734 million shares (par value $0.01 per share, 2 billion shares

authorized)

Held in treasury, at cost – 295 million and 248 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.

117

December 31,

2018

2017

1,687
5,853
9,837
646
18,023
5,898
45,058
20,184
3,777
92,940

9,366
1,152
1,446
544
708
13,216
26,980
4,864
1,509
1,318
47,887

3,011
4,695
5,550
145
13,401
4,787
26,443
3,586
830
49,047

8,297
591
670
624
296
10,478
12,322
2,654
1,099
666
27,219

1,004

1,000

10
(13,175)
33,729
14,755
(144)
35,175
8,874
44,049
92,940

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

MARATHON PETROLEUM CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

2018

2017

2016

Operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:

3,606

3,804

1,213

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 operating assets and liabilities, net of effects of businesses

acquired:
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 provided by (used in) financing activities

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

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

118

70
-
2,490
-
90
47
(23)
(373)
519
(62)

1,589
931
(2,798)
72
6,158

(3,578)
(3,822)
54
(409)
16
69
(7,670)

-
-
13,476
(8,032)
(86)
24
(3,287)
(954)
-
-
(903)
12
-
(28)
222
(1,290)
3,015
1,725

64
-
2,114
-
47
(1,233)
(10)
(306)
391
116

(1,093)
106
2,814
(202)
6,612

(2,732)
(249)
79
(805)
62
247
(3,398)

300
(300)
2,911
(642)
(33)
46
(2,372)
(773)
473
-
(694)
129
(89)
(47)
(1,091)
2,123
892
3,015

61
130
2,001
(370)
9
394
(32)
185
317
(41)

(674)
(70)
985
(91)
4,017

(2,892)
-
101
(288)
-
112
(2,967)

1,263
(1,263)
864
(2,269)
(11)
11
(197)
(719)
776
984
(542)
6
(164)
(33)
(1,294)
(244)
1,136
892

CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTEREST

MARATHON PETROLEUM CORPORATION

MPC Stockholders’ Equity

Common Stock

Treasury Stock

Shares Amount Shares Amount

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income
(Loss)

Non-
controlling
Interests

Total
Equity

Redeemable
Non-
controlling
Interest

729
-

7
-

(198) $
-

(7,275) $
-

(318)
-

6,438 $
(2)

19,675
1,172

11,071 $

-
-
-
46

(57)

11,060 $

-
-
-
92

-
-
(4)
(1)

-
-
(197)
(10)

(203) $
-

(7,482) $
-

-
-
(2,372)
(15)

-
-
(44)
(1)

9,752
1,174

(720)

-
-
-
-

-
84
-
-

(720)

(517)

(25)

6
-
-
6

715

6
84
(197)
42

658

-
41

-
-
-
-

984

1,000
65

10,206
3,432

(234)
-

6,646 $
307

20,203
3,739

(774)

-
-
-
-

-
3
-
-

(774)

(629)

(65)

129
-
-
8

334

129
3
(2,372)
85

444

-
-
-
-

110

(248) $

(9,869) $

11,262 $

12,864

(231)

6,795 $

20,828

1,000

-
-

-
-
(47)
-

-
-

-
-
(3,287)
(18)

-
-

-
-
-
345

2,357

(1)

19,765

66
2,780

(955)

-
-
-
-

-
-

-
87
-
-

2
751

68
3,531

(955)

-
75

(832)

(71)

12
-
-
14

12
87
(3,287)
342

(2,927)

(570)

19,766

5,059

-
-
-
-

-
-
-
2

731
-

-
-
-
3

734

-
-
-
1

240

-
-
-
-

7
-

-
-
-
-

-
-

-
-
-
1

(In millions)

Balance as of December 31, 2015

Net income (loss)
Dividends declared on common

stock ($1.36 per share)

Distributions to noncontrolling

interests

Contributions from

noncontrolling interests
Other comprehensive income
Shares repurchased
Stock-based compensation
Impact from equity transactions

of MPLX

Issuance of MPLX LP

redeemable preferred units

Balance as of December 31, 2016

Net income
Dividends declared on common

stock ($1.52 per share)

Distributions to noncontrolling

interests

Contributions from

noncontrolling interests
Other comprehensive income
Shares repurchased
Stock-based compensation
Impact from equity transactions

of MPLX

Balance as of December 31, 2017
Cumulative effect of adopting
new accounting standards

Net income
Dividends declared on common

stock ($1.84 per share)

Distributions to noncontrolling

interests

Contributions from

noncontrolling interests
Other comprehensive income
Shares repurchased
Stock based compensation
Impact from equity transactions

of MPLX & ANDX

Issuance of shares for Andeavor

acquisition

Noncontrolling interest acquired

from Andeavor

Balance as of December 31, 2018

975

(295) $

(13,175) $

33,729 $

14,755

(144)

8,874 $

44,049

1,004

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

119

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

Description of the Business

We are a leading, integrated, downstream energy company headquartered in Findlay, Ohio. We operate the
nation’s largest refining system with more than 3 million barrels per day of crude oil capacity across 16
refineries. MPC’s marketing system includes branded locations across the United States, which primarily include
Marathon branded outlets. We own and operate retail convenience stores across the United States. We also own
the general partner and majority limited partner interests in two midstream companies, MPLX LP (“MPLX”) and
Andeavor Logistics LP (“ANDX”), which own and operate crude oil and light product transportation and
logistics infrastructure as well as gathering, processing, and fractionation assets.

Refer to Note 5 for further information on the Andeavor acquisition, which closed on October 1, 2018, and to
Note 10 for additional information about our operations.

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.

2. SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

Principles Applied in Consolidation

These consolidated financial statements include the accounts of our majority-owned, controlled subsidiaries,
MPLX and ANDX. 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, 2018, we owned 63.6 percent of the
outstanding MPLX common units and 63.6 percent of the outstanding ANDX common units and 100 percent of
the general partner interest for each entity. Due to our ownership of the general partner interest, we have
determined that we control MPLX and ANDX and therefore we consolidate MPLX and ANDX and record a
noncontrolling interest for the 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.

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.

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Revenue Recognition

We recognize revenue based on consideration specified in contracts or agreements with customers when we
satisfy our performance obligations by transferring control over products or services to a customer. Concurrent
with our adoption of ASU 2014-09, Revenue from Contracts with Customers (“ASC 606”), we made an
accounting policy election that all taxes assessed by a governmental authority that are both imposed on and
concurrent with a revenue-producing transaction and collected from our customers will be recognized on a net
basis within sales and other operating revenues.

The adoption of ASC 606 did not materially change our revenue recognition patterns, which are described below
by reportable segment:

• Refining & Marketing – The vast majority of our Refining & Marketing contracts contain pricing that
is based on the market price for the product at the time of delivery. Our obligations to deliver product
volumes are typically satisfied and revenue is recognized when control of the product transfers to our
customers. Concurrent with the transfer of control, we typically receive the right to payment for the
delivered product, the customer accepts the product and the customer has significant risks and rewards
of ownership of the product. Payment terms require customers to pay shortly after delivery and do not
contain significant financing components.

• Retail – Revenue is recognized when our customers receive control of the transportation fuels or
merchandise. Payments from customers are received at the time sales occur in cash or by credit or debit
card at our company-owned and operated retail locations and shortly after delivery for our direct
dealers. Our retail operations offer a loyalty rewards program to its customers. We defer a minor
portion of revenue on sales to the loyalty program participants until the participants redeem their
rewards. The related contract liability, as defined in ASC 606, is not material to our financial
statements.

• Midstream – Midstream revenue transactions typically are defined by contracts under which we sell a
product or provide a service. Revenues from sales of product are recognized when control of the
product transfers to the customer. Revenues from sales of services are recognized over time when the
performance obligation is satisfied as services are provided in a series. We have elected to use the
output measure of progress to recognize revenue based on the units delivered, processed or transported.
The transaction prices in our Midstream contracts often have both fixed components, related to
minimum volume commitments, and variable components, which are primarily dependent on volumes.
Variable consideration will generally not be estimated at contract inception as the transaction price is
specifically allocable to the services provided at each period end.

Refer to Note 10 for disclosure of our revenue disaggregated by segment and product line, as well as a
description of our reportable segment operations.

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. No revenues are recorded for exchange and matching buy/sell transactions as
they are accounted for as exchanges of inventory. The exchange transactions are recognized at the carrying
amount of the inventory transferred.

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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.

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.

We mitigate credit risk with master netting agreements with 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.

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.

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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 51 years. Such assets are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If
the sum of the expected undiscounted future cash flows from the use of the asset group and its eventual
disposition is less than the carrying amount of the asset group, an impairment assessment is performed and the
excess of the book value over the fair value of the asset group 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. The fair value is calculated using the expected present value of future cash flows method.
Significant assumptions used in the cash flow forecasts include future net operating margins, future volumes,
discount rates, and future capital requirements. If the carrying amount of the reporting unit exceeds its fair value,
an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill
allocated to that reporting unit.

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
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 and other major maintenance 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 for additional equipment that mitigates or prevents future contamination or improves
environmental safety or efficiency of the existing assets are capitalized. 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

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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.

Our short-term asset retirement obligations were $30 million and $6 million at December 31, 2018 and 2017,
respectively, which are included in other current liabilities in our consolidated balance sheets. Our long-term
asset retirement obligations were $222 million and $121 million at December 31, 2018 and 2017, respectively,
which are included in deferred credits and other liabilities in our consolidated balance sheets. The increase in our
asset retirement obligation was mainly due to obligations recognized in connection with the purchase accounting
for the Andeavor acquisition.

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
tax
differences between the financial statement carrying amounts of assets and liabilities and their
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, 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.

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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. Any excess or surplus of the purchase consideration when compared
to the fair value of the net tangible assets acquired, if any, is 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. 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. 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 date, 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 that would have existed as of the date of the acquisition. Any adjustment that arises from information
obtained that did not exist as of the date of the acquisition will be recorded in the period of the adjustment.
Acquisition-related costs are expensed as incurred in connection with each business combination.

Environmental Credits and Obligations

In order to comply with certain regulations, specifically the RFS2 requirements implemented by the EPA and the
cap-and-trade emission reduction program and low carbon fuel standard implemented by the state of California,
we are required to reduce our emissions, blend certain levels of biofuels or obtain allowances or credits to offset
the obligations created by our operations. In regard to each program, we record an asset, included in other current
or other noncurrent assets on the balance sheet, for allowances or credits owned in excess of our anticipated
current period compliance requirements. The asset value is based on the product of the excess allowances or
credits as of the balance sheet date, if any, and the weighted average cost of those allowances or credits. We
record a liability, included in other current or other noncurrent liabilities on the balance sheet, when we are
deficient allowances or credits based on the product of the deficient amount as of the balance sheet date, if any,
and the market price of the allowances or credits at the balance sheet date. The cost of allowances or credits used
for compliance is reflected in cost of revenues on the income statement. Any gains or losses on the sale or
expiration of allowances or credits are classified as other income on the income statement. Proceeds from offset
or credits sales are included in investing activities – all other, net on the cash flow statement.

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3. ACCOUNTING STANDARDS

Recently Adopted

ASU 2014-09, Revenue – Revenue from Contracts with Customers (ASC 606)

On January 1, 2018, we adopted the new revenue standard, applying the modified retrospective method, whereby
a cumulative effect is recorded to opening retained earnings and ASC 606 is applied prospectively. We recorded
a net increase of $4 million to our retained earnings balance as of January 1, 2018 due to the cumulative effect of
applying the new revenue standard.

Impact of Adoption

The adoption of ASC 606 did not materially change our revenue recognition patterns. The most significant
impacts of adopting ASC 606 for the period ended December 31, 2018 are as follows:

•

a reduction of sales and other operating revenues of $6.66 billion for the year ended December 31,
2018 due to our accounting policy election to present taxes incurred concurrently with revenue
producing transactions and collected on behalf of our customers on a net basis. For the year ended
December 31, 2017, taxes are reflected on a gross basis in sales and other operating revenues and cost
of revenues, and include $5.15 billion of taxes that are now subject to our net basis accounting policy
election.

an increase to both sales and other operating revenues and cost of revenues of $502 million for the year
ended December 31, 2018 related to certain Midstream contract provisions for
third-party
reimbursements, non-cash consideration and imbalances that require gross presentation under ASC
606. Comparative information continues to be reported under the accounting standards in effect for
those periods.

Practical Expedients

We elected the completed contract practical expedient and only applied ASC 606 to contracts that were not
completed as of January 1, 2018.

We do not disclose information on the future performance obligations for any contract with expected duration of
one year or less at inception. As of December 31, 2018, we do not have future performance obligations that are
material to future periods.

Receivables

On the accompanying consolidated balance sheets, receivables, less allowance for doubtful accounts primarily
consists of customer receivables. Significant, non-customer balances included in our receivables at December 31,
2018 include matching buy/sell receivables of $1.64 billion and income taxes receivables of $88 million.

ASU 2016-16, Income Taxes – Intra-Entity Transfers of Assets Other Than Inventory

We adopted this ASU in the first quarter of 2018 and recorded a $62 million cumulative-effect adjustment as an
increase to retained earnings as of January 1, 2018 with the offset recorded as a reduction to deferred income
taxes.

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We also adopted the following ASUs during 2018, none of which had a material impact to our financial
statements or financial statement disclosures:

ASU

2017-09
2017-07

2017-05

2017-01
2016-18
2016-15

2016-01

Not Yet Adopted

Stock Compensation – Scope of Modification Accounting
Retirement Benefits – Improving the Presentation of Net Periodic
Pension Cost and Net Periodic Postretirement Cost
Gains and Losses from the Derecognition of Nonfinancial Assets –
Clarifying the Scope of Asset Derecognition Guidance
Business Combinations – Clarifying the Definition of a Business
Statement of Cash Flows – Restricted Cash
Statement of Cash Flows – Classification of Certain Cash Receipts and
Cash Payments
Financial Instruments – Recognition and Measurement of Financial
Assets and Liabilities

Effective Date

January 1, 2018
January 1, 2018

January 1, 2018

January 1, 2018
January 1, 2018
January 1, 2018

January 1, 2018

ASU 2018-02, Reporting Comprehensive Income – Reclassification of Certain Tax Effects from Accumulated
Other Comprehensive Income

In February 2018, the FASB issued an ASU allowing an entity the choice to reclassify to retained earnings the
tax effects related to the TCJA that are stranded in accumulated other comprehensive income. The amendment
was effective January 1, 2019. We do not expect the application of this accounting standard update to have a
material impact on our consolidated financial statements.

ASU 2017-12, Derivatives and Hedging – Targeted Improvements to Accounting for Hedging Activities

In August 2017, the FASB issued an ASU 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 and eases certain hedge effectiveness assessment requirements. The guidance was effective
January 1, 2019. We do not expect the application of this accounting standard update to have a material impact
on our consolidated financial statements.

ASU 2017-04, Intangibles – Goodwill and Other – Simplifying the Test for Goodwill Impairment

In January 2017, the FASB issued an ASU 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.

ASU 2016-13, Credit Losses – Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued an ASU 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 specific

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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 ASU to have a material impact on our consolidated financial statements.

ASU 2016-02 Leases and related updates

In February 2016, the FASB issued an ASU requiring lessees to record virtually all leases on their balance sheets.
The ASU 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 guidance will be effective
for fiscal years beginning after December 15, 2018, and interim periods within those years. As of January 1,
2019, we have transitioned to the new guidance.

As part of implementing this standard, we evaluated the impact of this standard on our financial statements,
disclosures, internal controls and accounting policies. This evaluation process included 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. We have
implemented a third-party supported lease accounting information system to account for our lease population in
accordance with this new standard and established internal controls over the new system. We expect that
adoption of the standard will result in the recognition of right-of-use assets and lease liabilities for operating
leases on January 1, 2019 in the range of $2.5 billion to $3.0 billion. The adoption of ASC 842 will not have a
material impact on our consolidated statements of income or cash flows, except for the potential effects from
lease modifications where MPLX is the lessor as discussed below.

In addition, based on the changes presented in the standard, MPLX, as a lessor, may be required to re-classify
existing operating leases to sales-type leases upon modification and related reassessment of the leases. If such
modification were to occur, it may result in a de-recognition of existing assets, recognition of a receivable in the
amount of the present value of fixed payments expected to be received by MPLX under the lease, and recognition
of a corresponding gain or loss in the period of change.

4. MASTER LIMITED PARTNERSHIPS

MPLX

MPLX is a diversified, large-cap publicly traded master limited partnership formed by us to own, operate,
develop and acquire midstream energy infrastructure assets. MPLX is engaged in the transportation, storage and
distribution of crude oil and refined petroleum products; gathering, processing and transportation of natural gas;
and the gathering, transportation, fractionation, storage and marketing of NGLs. As of December 31, 2018, we
owned 63.6 percent of the outstanding MPLX common units and we control MPLX through our ownership of the
general partner of MPLX.

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 were 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 received cumulative quarterly distributions equal to

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$0.528125 per unit for the quarters prior to the second quarter of 2018. Beginning with the second quarter of
2018, the holders of the MPLX Preferred Units are entitled to receive a quarterly distribution equal to the greater
of $0.528125 per unit or the amount of distributions they would have received on an as converted basis. For the
income earned in the second through fourth quarters of 2018, the distribution rate declared to MPLX common
unitholders was greater than $0.528125 per unit; accordingly, the holders of the MPLX Preferred Units received
the common unit rates in lieu of the lower $0.528125 base amount.

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 and GP/IDR Exchange

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 112 million common units and 2 million general partner
units from MPLX. 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. We agreed to waive approximately one-third of the first
quarter 2018 distributions on the common units issued in connection with 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.

Immediately following the February 1, 2018 dropdown to MPLX, 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 (“GP/IDR Exchange”). As a result of this transaction, the general
partner units and IDRs were eliminated, are no longer outstanding and longer participate in distributions of cash
from MPLX.

On September 1, 2017, we contributed our joint-interest ownership in certain pipelines and storage facilities to
MPLX in exchange for $420 million in cash and approximately 19 million MPLX common units and
378 thousand general partner units from MPLX. 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 $1.5 billion in cash and approximately 13 million common units and 264 thousand general
partner units from MPLX. 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. 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.

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Agreements

We have various long-term, fee-based commercial agreements with MPLX. Under these agreements, MPLX
provides transportation, storage, distribution and marketing services to us. Under certain agreements, we commit
to provide MPLX with minimum quarterly throughput and distribution volumes of crude oil and refined products
and minimum storage volumes of crude oil, refined products and butane. Under certain other agreements, we
commit to pay for 100 percent of available capacity for certain marine transportation and refining logistics assets.
We also have agreements with MPLX that 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, but are reflected as intersegment
transactions between our Refining & Marketing and Midstream segments.

ANDX

Through the Andeavor acquisition, we acquired control of ANDX, which is a publicly traded limited partnership
that was formed to own, operate, develop and acquire logistics assets. Its assets are integral to the success of our
refining and marketing operations and are used to gather crude oil, natural gas, and water, process natural gas and
distribute,
transport and store crude oil and refined products. ANDX provides us with various pipeline
transportation, trucking, terminal distribution, storage and petroleum-coke handling services under long-term,
fee-based commercial agreements. Each of these agreements, with the exception of the storage and transportation
services agreement, contain minimum volume commitments.

As of December 31, 2018, we owned 63.6 percent of the outstanding ANDX common units. We also hold 80,000
ANDX TexNew Mex Units and all the outstanding non-economic general partner interests as of December 31,
2018.

Noncontrolling Interest

As a result of equity transactions of MPLX and ANDX, we are required to adjust non-controlling interest and
additional paid-in capital. Changes in MPC’s additional paid-in capital resulting from changes in its ownership
interest in MPLX and ANDX were as follows:

(In millions)

Increase (decrease) due to the issuance of MPLX & ANDX common units to the public
Increase due to the issuance of MPLX & ANDX common units and general partner units

to MPC

Increase due to GP/IDR Exchange

Increase in MPC’s additional paid-in capital

Tax impact

2018

2017

2016

(60)

1,114
1,808

2,928
(571)

114
-

139
(29)

121
-

61
(118)

Increase (decrease) in MPC’s additional paid-in capital, net of tax

2,357

110

(57)

5. ACQUISITIONS

Acquisition of Andeavor

On October 1, 2018, we acquired all the outstanding shares of Andeavor. Under the terms of the merger
agreement, Andeavor stockholders had the option to choose 1.87 shares of MPC common stock or $152.27 in
cash per share of Andeavor common stock. The merger agreement included election proration provisions that
resulted in approximately 22.9 million shares of Andeavor common stock being converted into cash
consideration and the remaining 128.2 million shares of Andeavor common stock being converted into stock
consideration. Andeavor stockholders received in the aggregate approximately 239.8 million shares of MPC

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common stock valued at $19.8 billion and approximately $3.5 billion in cash in connection with the Andeavor
acquisition. The fair value of the MPC shares issued was determined on the basis of the closing market price of
MPC’s common shares on the acquisition date. The cash portion of the purchase price was funded using cash on
hand.

At the time of the acquisition, all Andeavor equity awards, with the exception of non-employee director units,
were converted to MPC equity awards. The converted equity awards will continue to be governed by the same
terms and conditions as were applicable to such Andeavor equity awards immediately prior to the acquisition.
We recognized $203 million of purchase consideration to reflect the portion of the fair value of the time-based
converted equity awards attributable to pre-combination service completed by the award holders. The
non-employee director units were accelerated in full and cancelled and the holders of such units received an
amount of cash equal to the number of shares of Andeavor common stock subject to such non-employee director
units multiplied by the cash consideration per share.

Our financial reflect the results of Andeavor from October 1, 2018, the date of the acquisition.

The components of the fair value of consideration transferred are as follows:

(In millions)

Fair value of MPC shares issued

Cash payment to Andeavor stockholders

Cash settlement of non-employee director units

Fair value of converted equity awards

Total fair value of consideration transferred

19,766

3,486

203

23,462

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We accounted for the Andeavor acquisition using the acquisition method of accounting, which requires Andeavor
assets and liabilities to be recorded to our balance sheet at fair value as of the acquisition date. We will complete
a final determination of the fair value of certain assets and liabilities within the one year measurement period
from the date of the acquisition as required by FASB ASC Topic 805, “Business Combinations”. Due to the level
of effort required to develop fair value measurements and the proximity of the acquisition date to December 31,
2018, the valuation studies necessary to determine the fair value of assets acquired and liabilities assumed are
preliminary, including the underlying cash flows used to determine the fair value of identified intangible assets
and economic obsolescence adjustments to property, plant and equipment. The size and the breath of the
Andeavor acquisition necessitates the use of the one year measurement period to fully analyze all the factors used
in establishing the asset and liability fair values as of the acquisition date, including, but not limited to, property,
plant and equipment, intangible assets, real property, leases, environmental and asset retirement obligations and
the related tax impacts of any changes made. Any potential adjustments made could be material in relation to the
preliminary values presented below.

(In millions)

Cash and cash equivalents

Receivables

Inventories

Other current assets

Equity method investments

Property, plant and equipment, net

Other noncurrent assets(a)

Total assets acquired

Accounts payable

Payroll and benefits payable

Accrued taxes

Debt due within one year

Other current liabilities

Long-term debt

Deferred income taxes

Defined benefit postretirement plan obligations

Deferred credit and other liabilities

Noncontrolling interests

Total liabilities and noncontrolling interest assumed

Net assets acquired excluding goodwill

Goodwill

Net assets acquired

(a)

Includes intangible assets.

382

2,744

5,204

378

865

16,545

3,086

29,204

4,003

348

590

392

8,875

1,609

432

714

5,059

22,056

7,148

16,314

23,462

Details of our valuation methodology and significant inputs for fair value measurements are included by asset
class below. The fair value measurements for equity method investments, property, plant and equipment,
intangible assets and long-term debt are based on significant inputs that are not observable in the market and,
therefore, represent Level 3 measurements.

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Goodwill

The preliminary purchase consideration allocation resulted in the recognition of $16.3 billion in goodwill, of
which $893 million is tax deductible due to a carryover basis from Andeavor. Our Refining & Marketing,
Midstream and Retail segments recognized $4.7 billion, $7.7 billion and $3.9 billion of preliminary goodwill.
The recognized goodwill represents the value expected to be created by further optimization of crude supply, a
nationwide retail and marketing platform, diversification of our refining and midstream footprints and
optimization of information systems and business processes.

Inventory

The fair value of inventory was determined by recognizing crude oil and feedstocks at market prices as of
October 1, 2018 and recognizing refined product inventory at market prices less selling costs and profit margin
associated with the remaining distribution process.

Equity Method Investments

The fair value of the equity method investments was determined based on applying income and market
approaches. The income approach relied on the discounted cash flow method and the market approach relied on a
market multiple approach considering historical and projected financial results. Discount rates for the discounted
cash flow models were based on capital structures for similar market participants and included various risk
premiums that account for risks associated with the specific investments. For more information about our equity
method investments, see Note 14.

Property, Plant and Equipment

The preliminary fair value of property, plant and equipment is $16.5 billion, which is based primarily on the cost
approach. Key assumptions in the cost approach include determining the replacement cost by evaluating recent
purchases of similar assets or published data, and adjusting replacement cost for economic and functional
obsolescence, location, normal useful lives, and capacity (if applicable).

Acquired Intangible Assets

The preliminary fair value of the acquired identifiable intangible assets is $2.8 billion, which represents the value
of various customer contracts and relationships, brand rights and tradenames and other intangible assets. The
preliminary fair value of customer contracts and relationships is $2.5 billion, which was valued by applying the
multi-period excess earnings method, which is an income approach. Key assumptions in the income approach
include the underlying contract cash flow estimates, remaining contract term, probability of renewal, growth
rates and discount rates. Brand rights and tradenames were valued by applying the relief of royalty method,
which is an income approach. The intangible assets are all finite lived and will be amortized over 2 to 10 years.

Debt

The fair value of the Andeavor and ANDX unsecured notes was measured using a market approach, based upon
the average of quotes for the acquired debt from major financial institutions and a third-party valuation service.
Additionally, $1.5 billion of borrowings under revolving credit agreements and other debt of approximately
$200 million approximated fair value.

Noncontrolling Interest

Through the Andeavor acquisition, we acquired the general partnership interest of ANDX, which is a VIE
because the limited partners of ANDX do not have substantive kick-out or substantive participating rights over
the general partner. We are the primary beneficiary of ANDX because in addition to our significant economic

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interest, we also have the ability, through our 100 percent ownership of the general partner, to control the
decisions that most significantly impact ANDX. The fair value of the noncontrolling interest in ANDX was based
on the share price, shares outstanding and the percent of public unitholders of ANDX on October 1, 2018. The
share price of ANDX is a Level 1 measurement.

Acquisition Costs

We recognized $47 million in acquisition costs. Additionally, we recognized various other transaction-related
costs, including employee-related costs associated with the Andeavor acquisition. All of these costs are reflected
in selling, general and administrative expenses for the year ended December 31, 2018. The employee-related
costs are primarily due to pre-existing Andeavor change in control and equity award agreements that create
obligations and accelerated equity vesting upon MPC notifying employees of significant changes to or
elimination of their responsibilities as part of our ongoing integration efforts.

Andeavor Revenues and Income from Operations

Andeavor’s results have been included in MPC’s financial statements for the period subsequent to the date of the
acquisition on October 1, 2018. Andeavor contributed revenues of approximately $11.3 billion for the period
from October 1 through December 31, 2018. We do not believe it is practical to disclose Andeavor’s contribution
to earnings for the period from October 1, 2018 through December 31, 2018 as our integration efforts have
resulted in the elimination of Andeavor stand-alone discrete financial information due mainly to our inclusion of
Andeavor inventory in our consolidated LIFO inventory pools, which does not allow us to objectively distinguish
the cost of sales between the two historical reporting entities.

Pro Forma Financial Information

The following unaudited pro forma financial information presents consolidated results assuming the Andeavor
acquisition occurred on January 1, 2017.

(In millions, except per share data)

Sales and other operating revenues(a)

Net income attributable to MPC

Net income attributable to MPC per share – basic

Net income attributable to MPC per share – diluted

2018

2017

131,695

117,549

4,371

8.44

8.31

4,832

6.47

6.41

(a)

The 2018 period reflects an election to present certain taxes on a net basis concurrent with our adoption of ASC 606.

The pro forma information includes adjustments to align accounting policies, an adjustment to depreciation
expense to reflect the increased fair value of property, plant and equipment, increased amortization expense
related to identifiable intangible assets and the related income tax effects. The pro forma information does not
reflect the $727 million effect on net income attributable to MPC related to purchase accounting related
inventory effects and transaction-related costs as these charges do not have a continuing impact on the
consolidated results.

Acquisition of Express Mart

During the fourth quarter of 2018, Speedway acquired 78 store locations from Petr-All Petroleum Consulting
Corporation for total consideration of $266 million. These stores are located primarily in the Syracuse, Rochester
and Buffalo markets in New York and operate under the Express Mart brand.

Based on the final fair value estimates of assets acquired and liabilities assumed at the acquisition date,
$97 million of the purchase price was allocated to property, plant and equipment, $9 million to inventory,
$2 million to intangibles and $158 million to goodwill. Goodwill is tax deductible and represents the value
expected to be created by geographically expanding our retail platform and the assembled workforce.

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The amount of revenue and income from operations associated with the acquisition from the acquisition date to
December 31, 2018 did not have a material impact on the consolidated financial statements. In addition,
assuming the acquisition had occurred on January 1, 2017, the consolidated pro forma results would not have
been materially different from the reported results.

Acquisition of Mt. Airy Terminal

On September 26, 2018, MPLX acquired an eastern U.S. Gulf Coast export terminal (“Mt. Airy Terminal”) from
Pin Oak Holdings, LLC for total consideration of $451 million. The terminal includes 4 million barrels of third-
party leased storage capacity and a 120 mbpd dock. The Mt. Airy Terminal is located on the Mississippi River
between New Orleans and Baton Rouge, near several Gulf Coast refineries, including our Garyville Refinery,
and numerous rail lines and pipelines. The Mt. Airy Terminal is accounted for within the Midstream segment.

Based on the final fair value estimates of assets acquired and liabilities assumed at the acquisition date,
$336 million of the purchase price was allocated to property, plant and equipment and $126 million to goodwill
with the remaining difference being primarily allocated to net assumed liabilities. Goodwill is tax deductible and
represents the significant growth potential of the terminal due to the multiple pipelines and rail lines which cross
the property, the terminal’s position as an aggregation point for liquids growth in the region for both ocean-going
vessels and inland barges, the proximity of the terminal to our Garyville refinery and other refineries in the
region as well as the capability to construct an additional dock at the site.

The amount of revenue and income from operations associated with the acquisition from the terminal acquisition
date to December 31, 2018 did not have a material impact on the consolidated financial statements. In addition,
assuming the terminal acquisition had occurred on January 1, 2017, the consolidated pro forma results would not
have been materially different from the reported results.

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
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 present the Ozark pipeline within the Midstream segment.

The amount of revenue and income from operations associated with the acquisition from the acquisition date to
December 31, 2017 did not have a material impact on the consolidated financial statements. In addition,
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 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 with Enbridge Energy Partners L.P. (“Enbridge Energy Partners”).
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. We account for the investment in MarEn Bakken as part of
our Midstream segment using the equity method of accounting.

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

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acreage in West Virginia. MPLX has a 50 percent ownership interest in Sherwood Midstream. In connection with
this transaction, MPLX contributed assets then 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.

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 initial ownership
interest. 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.

6. VARIABLE INTEREST ENTITIES

Consolidated VIEs

We control MPLX and ANDX through our ownership of the general partner of both entities. MPLX and ANDX
are VIEs because the limited partners do not have substantive kick-out or substantive participating rights over the
general partner. We are the primary beneficiary of both MPLX and ANDX because in addition to our significant
economic interest, we also have the ability, through our ownership of the general partner, to control the decisions
that most significantly impact MPLX and ANDX. We therefore consolidate MPLX and ANDX and record a
noncontrolling interest for the interest owned by the public. We also record a redeemable noncontrolling interest
related to MPLX’s preferred units.

The creditors of MPLX and ANDX do not have recourse to MPC’s general credit through guarantees or other
financial arrangements. 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.

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The assets of MPLX and ANDX can only be used to settle their own obligations and their creditors have no
recourse to our assets. The following table present balance sheet information for the assets and liabilities of
MPLX and ANDX, which are included in our balance sheets.

(In millions)

Assets

Cash and cash equivalents

Receivables, less allowance for doubtful accounts

Inventories

Other current assets

Equity method investments

Property, plant and equipment, net

Goodwill

Other noncurrent assets

Liabilities

Accounts payable

Payroll and benefits payable

Accrued taxes

Debt due within one year

Other current liabilities

Long-term debt

Deferred income taxes

Defined benefit postretirement plan obligations

Deferred credits and other liabilities

December 31,
2018

December 31,
2017

MPLX

ANDX(a)

MPLX

425

4,174

14,639

2,586

458

199

602

6,845

1,051

1,242

776

215

177

13,392

276

504

4,469

299

4,010

12,187

2,245

479

621

130

6,945

230

(a)

The balances reflected here are ANDX’s historical balances as the preliminary purchase accounting adjustments related to ANDX’s
assets and liabilities in connection with the Andeavor acquisition and reflected on our consolidated balance sheet as of December 31,
2018 have not yet been pushed down to this subsidiary.

Non-Consolidated VIEs

Crowley Coastal Partners

In May 2016, Crowley Coastal Partners LLC (“Crowley Coastal Partner”) was formed to own an interest in both
Crowley Ocean Partners LLC (“Crowley Ocean Partners”) and Crowley Blue Water Partners LLC (“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, 2018 was
$481 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 ability 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”), executed agreements to form a joint

137

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, 2018, 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. 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, 2018 was $2.0 billion.

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, 2018, 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.

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, 2018, 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, 2018 was $366 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

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, in addition to an initial 10.5 percent indirect interest through its ownership in Sherwood
Midstream. Sherwood Midstream Holdings’ inability to fund its operations without additional subordinated

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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, 2018 was $157 million.

Other Non-Consolidated VIEs

We have a 67 percent ownership interest in Andeavor Logistics Rio Pipeline LLC (“ALRP”), a recently
constructed crude oil pipeline located in the Delaware and Midland basins in west Texas. We are not the primary
beneficiary of ALRP because we jointly direct the activities of ALRP that most significantly impact its economic
performance with the other minor shareholder. Our equity investment in ALRP at December 31, 2018 was
$181 million.

We have a 78 percent ownership interest in Rendezvous Gas Services, LLC (“RGS”), which owns and operates
the infrastructure that transports gas from certain fields to several re-delivery points in southwestern Wyoming,
including natural gas processing facilities that are owned by us or a third party. We are not the primary
beneficiary of RGS. Our equity investment in RGS at December 31, 2018 was $248 million.

ALRP and RGS are unconsolidated variable interest entities and we use the equity method of accounting with
respect to our investments in each entity.

7. RELATED PARTY TRANSACTIONS

We believe that transactions with related parties were conducted on terms comparable to those with unaffiliated
parties.

Transactions with related parties were as follows:

(In millions)

Sales to related parties(a)

Purchases from related parties(b)

2018

2017

2016

754

610

629

570

509

(a)

Sales to related parties consists primarily of sales of refined products to PFJ Southeast, an equity affiliate which owns and operates travel
plazas primarily in the Southeast region of the United States.

(b) We obtain transportation services and purchase ethanol from certain of our equity affiliates, none of which is individually material.

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INCOME PER COMMON SHARE

We compute basic earnings per share by dividing net income attributable to MPC less income allocated to
participating securities by the weighted average number of shares of common stock outstanding. Since MPC
grants certain incentive compensation awards to employees and non-employee directors that are considered to be
participating securities, we have calculated our earnings per share using the two-class method. Diluted income
per share assumes exercise of certain stock-based compensation awards, provided the effect is not anti-dilutive.

(In millions, except per share data)

2018

2017

2016

Basic earnings per share:

Allocation of earnings:

Net income attributable to MPC

Income allocated to participating securities

2,780

3,432

1,174

Income available to common stockholders – basic

2,779

3,430

1,173

Weighted average common shares outstanding

Basic earnings per share

Diluted earnings per share:

Allocation of earnings:

518

507

528

5.36

6.76

2.22

Net income attributable to MPC

Income allocated to participating securities

2,780

3,432

1,174

Income available to common stockholders – diluted

2,779

3,430

1,173

Weighted average common shares outstanding

Effect of dilutive securities

Weighted average common shares, including dilutive effect

518

526

507

512

528

530

Diluted earnings per share

5.28

6.70

2.21

The following table summarizes the shares that were anti-dilutive, and therefore, were excluded from the diluted
share calculation.

(In millions)

Shares issuable under stock-based compensation plans

2018

2017

2016

—

9. EQUITY

On October 1, 2018, in connection with the Andeavor acquisition, we amended our certificate of incorporation to
increase the number of authorized shares of MPC common stock from one billion to two billion, as approved by
MPC stockholders at MPC’s September 24, 2018 special meeting of stockholders.

As of December 31, 2018, we had $4.90 billion of remaining share repurchase authorizations from our board of
directors. 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.

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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

2018

2017

2016

3,287

69.46

2,372

53.85

197

41.84

We have three reportable segments: Refining & Marketing; Retail; and Midstream. Each of these segments is
organized and managed based upon the nature of the products and services it offers.

On October 1, 2018, we acquired Andeavor and its results are included in each of our segments from the date of
the acquisition. Also, on February 1, 2018, we contributed certain refining logistics assets and fuels distribution
services to MPLX. The results of these new businesses are reported in the Midstream segment prospectively
from February 1, 2018, resulting in a net reduction of $874 million to Refining & Marketing segment results and
a net increase to Midstream segment results of the same amount. No effect was given to prior periods as these
entities were not considered businesses prior to February 1, 2018.

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income represents income from operations attributable to the reportable segments. Corporate
Segment
administrative expenses, except for those attributable to MPLX and ANDX, 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 the third quarter of 2018, we began reporting segment capital expenditures and investments excluding
acquisitions in the current and comparative periods.

(In millions)

Year Ended December 31, 2018

Revenues:

Third party
Intersegment
Related party

Segment revenues

Segment income from operations
Income from equity method investments(b)
Depreciation and amortization(b)
Capital expenditures and investments(c)

(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)

(In millions)

Year Ended December 31, 2016

Revenues:

Third party
Intersegment(a)
Related party

Segment revenues

Segment income from operations(d)
Income from equity method investments(b)
Depreciation and amortization(b)
Capital expenditures and investments(c)

Refining &
Marketing

68,939
12,914
746
82,599

2,481
15
1,174
1,057

Refining &
Marketing

52,761
11,309
621
64,691

2,321
17
1,082
832

Refining &
Marketing

43,167
10,589
61
53,817

1,357
24
1,063
1,054

Retail

Midstream

Total

$ 23,538
6
8
23,552

1,028
74
353
460

3,273
3,387
-
6,660

2,752
274
885
2,630

95,750
16,307
754
112,811

6,261
363
2,412
4,147

Retail

Midstream

Total

19,021
4
8
19,033

729
69
275
381

2,322
1,443
-
3,765

1,339
197
699
1,755

74,104
12,756
629
87,489

4,389
283
2,056
2,968

Retail

Midstream

Total

18,282
3
1
18,286

733
5
273
303

1,828
1,262
-
3,090

1,048
142
605
1,558

63,277
11,854
62
75,193

3,138
171
1,941
2,915

(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.

In 2016, the Refining & Marketing and Retail segments include an inventory LCM benefit of $345 million and $25 million, respectively.

142

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)

Transaction-related costs

Litigation

Impairments(b)

Income from operations

Net interest and other financial costs

Income before income taxes

2018

2017

2016

6,261

4,389

3,138

(502)

(197)

5,571

1,003

(365)

(29)

4,018

674

(266)

(486)

2,386

564

4,568

3,344

1,822

(b)

2018 and 2017 includes MPC’s share of gains from the the sale of assets remaining from the canceled Sandpiper pipeline project. 2016
includes impairments of goodwill and equity method investments. See Note 17.

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

Plus items not allocated to segments:

Corporate

Capitalized interest

Total capital expenditures(a)

2018

2017

2016

4,147

2,968

2,915

409

305

288

3,895

2,801

2,771

(a) 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.

143

Revenues by product line were:

(In millions)

Refined products

Merchandise

Crude oil and refinery feedstocks

Midstream services, transportation and other

Sales and other operating revenues(a)

2018

2017

2016

83,888

63,846

54,450

5,332

4,143

2,387

5,174

3,403

1,681

5,297

2,038

1,492

95,750

74,104

63,277

(a)

The 2018 period reflects an election to present certain taxes on a net basis concurrent with our adoption of ASC 606.

No single customer accounted for more than 10 percent of annual revenues for the years ended December 31,
2018, 2017 and 2016.

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.

11. NET INTEREST AND OTHER FINANCIAL COSTS

Net interest and other financial costs was:

(In millions)

Interest income

Interest expense

Interest capitalized

Pension and other postretirement non-service costs(a)

Loss on extinguishment of debt

Other financial costs

2018

2017

2016

(87)

(27)

1,026

(80)

688

(63)

(6)

602

(64)

564

Net interest and other financial costs

1,003

674

(a)

See Note 22.

12.

INCOME TAXES

The TCJA was signed into law on December 22, 2017, providing several significant changes to U.S. tax law,
including a reduction in the corporate tax rate from 35 percent to 21 percent effective for MPC in 2018. As a
result of the rate change, MPC was required to calculate the effect of the TCJA on its deferred tax balances as of
the enactment date, which was to reduce net deferred tax liabilities by $1.5 billion in 2017.

Income tax provisions (benefits) were:

(In millions)

Current

Deferred

Total

Current

Deferred

Total

Current

Deferred

Total

2018

2017

2016

Federal

715

State and local

Foreign

Total

178

(16)

717

681

(1,270) $

(589)

189

336

$ 525

239

(6)

131

(2)

(1)

$ 915

962

773

(1,233) $

(460)

215

394

$ 609

144

A reconciliation of the federal statutory income tax rate applied to income before income taxes to the provision
for income taxes follows:

Statutory rate applied to income before income taxes

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

Deferred tax assets and liabilities resulted from the following:

(In millions)

Deferred tax assets:

Employee benefits

Environmental remediation

Debt financing

Net operating loss carryforwards

Foreign currency

Tax credit carryforwards

Other

Total deferred tax assets

Deferred tax liabilities:

Property, plant and equipment

Inventories

Investments in subsidiaries and affiliates

Intangibles

Other

Total deferred tax liabilities

Net deferred tax liabilities

2018

2017

2016

21%

(4)

35%

(1)

(4)

(45)

(1)

(2)

21%

(14)%

33%

December 31,

2018

2017

660

111

964

2,830

678

2,130

348

420

1,603

473

912

5,799

3,061

4,835

2,641

The increase in net deferred tax liabilities is primarily related to the revaluation of MPC’s legacy deferred tax
liabilities and the recognition of net deferred tax liabilities both as a result of the Andeavor acquisition.

145

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

Tax Carryforwards

December 31,

2018

2017

4,864

2,654

4,835

2,641

At December 31, 2018 and 2017, federal operating loss carryforwards were $7 million and $5 million,
respectively, which expire in 2022 through 2037. As of December 31, 2018 and 2017, state and local operating
loss carryforwards were $10 million and $8 million, respectively, which expire in 2017 through 2037.

Valuation Allowances

As of December 31, 2018 and 2017, $10 million and $11 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. While Andeavor
also undergoes continual IRS examination, it did not participate in the CAP for tax periods prior to the
acquisition of Andeavor.

MPC’s IRS audits have been completed through the 2009 tax year. Andeavor and its subsidiaries’ IRS audits
have been completed through the 2008 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, 2018,
our income tax returns remain subject to examination in the following major tax jurisdictions for the tax years
indicated:

United States Federal

States

2009 - 2017

2006 - 2017

146

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

Statute of limitations

Acquired from Andeavor

December 31 balance

2018

2017

2016

(5)

(12)

209

211

(1)

(10)

(1)

If the unrecognized tax benefits as of December 31, 2018 were recognized, $201 million would affect our
effective income tax rate. There were $15 million of uncertain tax positions as of December 31, 2018 for which it
is reasonably possible that the amount of unrecognized tax benefits would significantly decrease during the next
twelve months. The unrecognized tax benefits acquired from Andeavor arise primarily from a 2009-2010 refund
claim related to the federal income tax effects of receiving an excise tax credit on ethanol blending for those
years.

Prior to its spinoff on June 30, 2011, Marathon Petroleum Corporation was included in the Marathon Oil
Corporation (“Marathon Oil”) U.S. federal income tax returns for all applicable years. During the third quarter of
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 $1 million, $3 million and ($5) million in 2018, 2017 and 2016,
respectively. As of December 31, 2018 and 2017, $18 million and $17 million of interest and penalties were
accrued related to income taxes.

13.

INVENTORIES

(In millions)

Crude oil and refinery feedstocks

Refined products

Materials and supplies

Merchandise

Total

December 31,

2018

2017

3,655

2,056

5,234

720

228

2,839

494

161

9,837

5,550

147

The LIFO method accounted for 92 percent and 90 percent of total inventory value at December 31, 2018 and
2017, respectively. There was no excess of replacement or current cost over our stated LIFO cost as of
December 31, 2018. Current acquisition costs of inventories were estimated to exceed the LIFO inventory value
at December 31, 2017 by $1.21 billion.

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 2018
and 2016.

14. EQUITY METHOD INVESTMENTS

(Dollars in millions)

R&M

Watson Cogeneration Company

Other

R&M Total

Retail

PFJ Southeast LLC

Retail Total

Midstream

Andeavor Logistics Rio Pipeline LLC

Centrahoma Processing LLC

Crowley Coastal Partners, LLC

Illinois Extension Pipeline Company, L.L.C

LOOP LLC

MarEn Bakken Company LLC

MarkWest EMG Jefferson Dry Gas Gathering Company, L.L.C.

MarkWest Utica EMG

Minnesota Pipe Line Company, LLC

Rendezvous Gas Services, L.L.C.

Sherwood Midstream Holdings LLC(a)

Sherwood Midstream LLC

Other

Midstream Total

Total

Ownership as
of
December 31,
2018

Carrying value at
December 31,

2018

2017

51%

29%

67%

40%

50%

35%

51%

25%

67%

56%

17%

78%

60%

50%

121

205

341

181

160

190

275

282

498

236

104

328

121

188

284

282

520

164

2,039

2,139

197

248

157

366

523

165

236

256

5,352

5,898

4,355

4,787

(a)

Excludes Sherwood Midstream LLC’s investment in Sherwood Midstream Holdings LLC.

148

Summarized financial information for all equity method investments in affiliated companies, combined, was 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

2018

2017

2016

7,726

6,235

2,421

1,375

1,242

1,075

922

(116)

(250)

1,443

860

12,408

1,857

1,788

10,854

547

1,714

As of December 31, 2018, the carrying value of our equity method investments was $1.59 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 $721 million of excess related to
goodwill and non-depreciable assets.

Dividends and partnership distributions received from equity method investees (excluding distributions that
represented a return of capital previously contributed) were $519 million, $391 million and $317 million in 2018,
2017 and 2016.

15. PROPERTY, PLANT AND EQUIPMENT

(In millions)

Refining & Marketing

Retail

Midstream

Corporate and Other

Total

Less accumulated depreciation

Property, plant and equipment, net

Estimated
Useful Lives

December 31,

2018

2017

4 - 30 years

27,590

19,490

4 - 25 years

3 - 51 years

4 - 40 years

6,637

25,692

1,294

61,213

16,155

5,358

14,898

792

40,538

14,095

45,058

26,443

includes gross assets acquired under capital

Property, plant and equipment
leases of $786 million and
$602 million at December 31, 2018 and 2017, respectively, with related amounts in accumulated depreciation of
$202 million and $248 million at December 31, 2018 and 2017. Property, plant and equipment includes
construction in progress of $3.49 billion and $2.20 billion at December 31, 2018 and 2017, 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 2018 and 2017, our annual testing did not indicate any impairment of goodwill.

149

The changes in the carrying amount of goodwill for 2017 and 2018 were as follows:

(In millions)

Balance at January 1, 2017

Disposition

Balance at December 31, 2017

Acquisitions

Transfer of assets related to dropdowns

Balance at December 31, 2018

Refining &
Marketing

Retail

Midstream

Total

519

4,717

(216)

792

(1)

791

4,050

2,276

7,831

216

3,587

(1)

3,586

16,598

5,020

4,841

10,323

20,184

The 2018 increase in goodwill resulted mainly from the acquisition of Andeavor. The goodwill represents the
value expected to be created by optimization of crude supply, a nationwide retail and marketing platform,
diversification of our refining and midstream footprints and optimization of information systems and business
processes. As discussed in Note 5, this goodwill is based on our preliminary determination of the fair value of
assets acquired and liabilities assumed in the Andeavor acquisition. We will complete a final determination of the
fair value of certain assets and liabilities and an allocation of the resulting goodwill to our reporting units within
one year from the acquisition.

Intangible Assets

Our finite-lived intangible assets as of December 31, 2018 and 2017 are as shown below. The increases in 2018
reflect preliminary estimates for customer contracts and relationships as well as brand rights and tradenames
acquired in the the Andeavor acquisition.

(In millions)

December 31, 2018
Accumulated
Amortization

Gross

Net

Gross

Customer contracts and relationships

3,184

261

2,923

Brand rights and tradenames

Royalty agreements

Other

Total

208

129

190

175

157

3,711

397

3,314

654

129

892

December 31, 2017
Accumulated
Amortization

Net

139

515

261

631

At December 31, 2018 and 2017, we had indefinite-lived intangible assets of $94 million and $95 million,
respectively, which are primarily emission allowance credits and trademarks.

Amortization expense for 2018 and 2017 was $134 million and $52 million, respectively. Estimated future
amortization expense related to the intangible assets at December 31, 2018 is as follows:

(In millions)

2019

2020

2021

2022

2023

387

385

379

378

361

150

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, 2018 and 2017 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)

December 31, 2018

Fair Value Hierarchy

Level 1 Level 2

Level 3

Netting and
Collateral(a)

Net Carrying
Value on
Balance Sheet(b)

Collateral
Pledged Not
Offset

Commodity derivative instruments, assets

Total assets at fair value

Commodity derivative instruments, liabilities
Embedded derivatives in commodity contracts

Total liabilities at fair value

370 $

255 $
-

255 $

31 $

37 $
-

37 $

- $

61 $

(323)

(284)
-

(284)

8
61

-
-

(In millions)

Commodity derivative instruments, assets
Other assets

Total assets at fair value

Commodity derivative instruments, liabilities
Embedded derivatives in commodity contracts

Total liabilities at fair value

December 31, 2017

Fair Value Hierarchy
Level 1 Level 2 Level 3

Netting and
Collateral(a)

Net Carrying
Value on
Balance Sheet(b)

Collateral
Pledged Not
Offset

127 $
3

130 $

126 $
-

126 $

- $
-

- $

- $
-

- $

- $
-

- $

2 $
64

66 $

(118)
N/A

(118)

(126)
-

(126)

9
3

2
64

8
-

-
-

(a) Represents the impact of netting assets, liabilities and cash collateral when a legal right of offset exists. As of December 31, 2018, cash
collateral of $52 million was netted with mark-to-market derivative assets and $13 million was netted with mark-to-market liabilities. As
of December 31, 2017, cash collateral of $8 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.

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.

Level 2 instruments are valued based on quoted prices for similar assets and liabilities in active markets, and
inputs other than quoted prices, such as liquidity, that are observable for the asset or liability. Commodity
derivatives in Level 2 are OTC contracts, which are valued using market quotations from independent price
reporting agencies, third-party brokers and commodity exchange price curves that are corroborated with market
data.

151

Level 3 instruments are 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, 2018 used significant unobservable
inputs including: (1) NGL prices interpolated and extrapolated due to inactive markets ranging from $0.58 to
$1.01 per gallon and (2) the probability of renewal of 90 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. Increases or decreases in the fractionation spread result in an
increase or decrease in the fair value of the embedded derivative liability. An increase in the probability of
renewal would result in an increase in the fair value of the related embedded derivative liability.

The following is a reconciliation of the net beginning and ending balances recorded for net liabilities classified as
Level 3 in the fair value hierarchy.

(In millions)

Beginning balance

Contingent consideration payment

Unrealized and realized losses included in net income

Settlements of derivative instruments

Ending balance

The amount of total losses for the period included in earnings attributable to the change in

unrealized losses relating to assets still held at the end of period:

Derivative instruments

Contingent consideration agreement

Total

2018

2017

(8)

190

(131)

(18)

See Note 18 for the income statement impacts of our derivative instruments.

Fair Values – Nonrecurring

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

152

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.

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.

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
including i) continued deterioration of near-term
of a number of first quarter events and circumstances,
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
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

153

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.

Fair Values – Reported

instruments,

We believe the carrying value of our other financial
including cash and cash equivalents,
receivables, accounts payable and certain accrued liabilities approximate fair value. Our fair value assessment
incorporates a variety of considerations, including the short-term duration of the instruments and the expected
insignificance of bad debt expense, which includes an evaluation of counterparty credit risk. The borrowings
under our revolving credit facilities, which include variable interest rates, approximate fair value. The fair value
of our fixed rate long-term debt is based on prices from recent trade activity and is categorized in level 3 of the
fair value hierarchy. The carrying and fair values of our debt were approximately $27.0 billion and $26.5 billion
at December 31, 2018, respectively, and approximately $12.6 billion and $13.9 billion at December 31, 2017,
respectively. These carrying and fair values of our debt exclude the unamortized issuance costs which are netted
against our total debt.

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 fair value of derivative instruments as of December 31, 2018 and 2017 and the
line items in the balance sheets in which the fair values are reflected. The fair value amounts below are presented
on a gross basis and do not reflect the netting of asset and liability positions permitted under the terms of our
master netting arrangements including cash collateral on deposit with, or received from, brokers. We offset the
recognized fair value amounts for multiple derivative instruments executed with the same counterparty in our
financial statements when a legal right of offset exists. As a result, the asset and liability amounts below will not
agree with the amounts presented in our consolidated balance sheets.

(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.

154

December 31, 2018

Asset

Liability

400

283

December 31, 2017

Asset

Liability

127

126

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.

The table below summarizes open commodity derivative contracts for crude oil, refined products and blending
products as of December 31, 2018.

(Units in thousands of barrels)

Exchange-traded(a)

Crude oil

Refined products

Blending products

OTC

Crude oil

Blending products

Percentage of
contracts that expire
next quarter

Position

Long

Short

71.5%

75.9%

70.3%

24.1%

40,257

44,709

10,210

11,149

5,194

7,356

880

2,480

(a)

Included in exchange-traded are spread contracts in thousands of barrels: Crude oil – 7,470 long and 6,800 short; Refined products – 450
long and 450 short; Blending products – 2,678 long and 2,767 short

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)

2018

2017

2016

(59)

(46)

(26)

(21)

(13)

(167)

(180)

155

19. DEBT

Our outstanding borrowings at December 31, 2018 and 2017 consisted of the following:

(In millions)

Marathon Petroleum Corporation:

Commercial paper

364-day bank revolving credit facility due September 2019

Trade receivables securitization facility due July 2019

Bank revolving credit facility due October 2023

Senior notes, 2.700% due December 2018

Senior notes, 3.400% due December 2020

Senior notes, 5.125% due March 2021

Senior notes, 5.375% due October 2022

Senior notes, 4.750% due December 2023

Senior notes, 5.125% due April 2024

Senior notes, 3.625%, due September 2024

Senior notes, 5.125% due December 2026

Senior notes, 3.800% due April 2028

Senior notes, 6.500% due March 2041

Senior notes, 4.750% due September 2044

Senior notes, 5.850% due December 2045

Senior notes, 4.500% due April 2048

Andeavor senior notes, 3.800% - 5.375% due 2022 - 2048

Senior notes, 5.000%, due September 2054

Capital lease obligations due 2019-2033

Notes payable

MPLX LP:

MPLX bank revolving credit facility due 2022

MPLX senior notes, 5.500% due February 2023

MPLX senior notes, 3.375% due March 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, 4.000% due March 2028

MPLX senior notes, 4.800% due February 2029

MPLX senior notes, 4.500% due April 2038

MPLX senior notes, 5.200% due March 2047

MPLX senior notes, 4.700% due April 2048

MPLX senior notes, 5.500% due February 2049

MPLX senior notes, 4.900% due April 2058

MPLX capital lease obligations due 2020

156

December 31,

2018

2017

650

1,000

337

614

241

750

719

496

1,250

800

250

498

469

400

629

500

989

1,149

500

1,189

1,250

750

1,750

1,000

1,500

500

600

650

1,000

750

1,250

800

250

400

356

505

710

989

1,149

500

1,189

1,250

1,000

(In millions)

ANDX LP:

ANDX revolving and dropdown credit facilities due 2021

ANDX senior notes, 5.500% due October 2019

ANDX senior notes, 6.250% due October 2022

ANDX senior notes, 3.500% due December 2022

ANDX senior notes, 6.375% due May 2024

ANDX senior notes, 5.250% due January 2025

ANDX senior notes, 4.250% due December 2027

ANDX senior notes, 5.200% due December 2047

ANDX capital lease obligations

Total

Unamortized debt issuance costs

Unamortized (discount) premium, net

Amounts due within one year

December 31,

2018

2017

1,245

500

300

500

450

750

500

27,980

13,418

(128)

(328)

(544)

(59)

(413)

(624)

Total long-term debt due after one year

26,980

12,322

Principal maturities for our debt obligations and capital lease obligations as of December 31, 2018 for the next
five years were as follows:

(In millions)

2019

2020

2021

2022

2023

544

695

2,296

1,320

2,403

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 2018, we had no borrowings or repayments under the commercial paper
program. At December 31, 2018, we had no amounts outstanding under the commercial paper program.

MPC Revolving Credit Agreements

On August 28, 2018, we entered into credit agreements with a syndicate of lenders to replace MPC’s previous
five-year $2.5 billion bank revolving credit facility due in 2022 and our previous 364-day $1 billion bank
revolving agreement that expired in July 2018. The new credit agreements, which became effective October 1,
2018 in connection with the Andeavor acquisition, provide for a $5 billion five-year revolving credit agreement
that expires in 2023 (“new MPC five-year credit agreement”) and a $1 billion 364-day revolving credit
agreement that expires in 2019 (“new MPC 364-day credit agreement” and together with the new MPC five-year
credit agreement, the “new MPC credit agreements”).

157

MPC has an option under the new MPC five-year credit agreement to increase the aggregate commitments by up
to an additional $1 billion, subject to, among other conditions, the consent of the lenders whose commitments
would be increased. In addition, MPC may request up to two one-year extensions of the maturity date of the new
MPC five-year 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 new MPC five-year credit agreement includes sub-facilities for swing-line loans of
up to $250 million and letters of credit of up to $2.2 billion (which may be increased to up to $3 billion upon
receipt of additional letter of credit issuing commitments).

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 new 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 based on changes, if any, to 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.
The covenants also restrict, among other things, 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, 2018, we were in
compliance with the covenants contained in the MPC credit agreements.

There were no borrowings and $32 million of letters of credit outstanding at December 31, 2018.

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 qualifying 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.

158

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. As of December 31, 2018, 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 as of December 31,
2018. As of December 31, 2018, qualified trade receivables supported borrowings and letter of credit issuances
of $750 million.

MPC Senior Notes

As a result of the completion of the Andeavor acquisition, we assumed an aggregate principal amount of
$3.374 billion senior notes issued by Andeavor. On October 2, 2018, approximately $2.905 billion aggregate
principal amount of Andeavor’s outstanding senior notes were exchanged for new unsecured senior notes issued
by MPC having the same maturity and interest rates as the Andeavor senior notes and cash in an exchange offer
and consent solicitation undertaken by MPC and Andeavor.

The new MPC senior notes consist of approximately $337 million aggregate principal amount of 5.375 percent
senior notes due October 1, 2022, approximately $614 million aggregate principal amount of 4.750 percent
senior notes due December 15, 2023, approximately $241 million aggregate principal amount of 5.125 percent
senior notes due April 1, 2024, approximately $719 million aggregate principal amount of 5.125 percent senior
notes due December 15, 2026, approximately $496 million aggregate principal amount of 3.800 percent senior
notes due April 1, 2028 and approximately $498 million aggregate principal amount of 4.500 percent senior
notes due April 1, 2048.

After giving effect to the exchange offer and consent solicitation referred to above, as of December 31, 2018,
Andeavor had outstanding approximately $138 million aggregate principal amount of 5.375 percent senior notes
due October 1, 2022, approximately $236 million aggregate principal amount of 4.750 percent senior notes due
December 15, 2023, approximately $59 million aggregate principal amount of 5.125 percent senior notes due
April 1, 2024, approximately $30 million aggregate principal amount of 5.125 percent senior notes due
December 15, 2026, approximately $4 million aggregate principal amount of 3.800 percent senior notes due
April 1, 2028 and approximately $2 million aggregate principal amount of 4.500 percent senior notes due
April 1, 2048.

Interest on each series of senior notes is payable semi-annually in arrears. The MPC senior notes are unsecured
and unsubordinated obligations of MPC and rank equally with all of MPC’s other existing and future unsecured
and unsubordinated indebtedness. The MPC senior notes are non-recourse and structurally subordinated to the
indebtedness of our subsidiaries, including the outstanding indebtedness of Andeavor, MPLX and ANDX. The
Andeavor senior notes are unsecured, unsubordinated obligations of Andeavor and are non-recourse to MPC and
any of MPC’s subsidiaries other than Andeavor.

159

On March 15, 2018, we redeemed 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 were redeemed at a price equal to
par plus a make whole premium, plus accrued and unpaid interest. The make whole premium of $2.5 million was
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.

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.

Borrowings under the MPLX credit agreement bear interest, at MPLX’s 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 based on changes, if any, to 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. The covenants also restrict, among other things, 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, 2018, MPLX was in compliance with the covenants contained in the MPLX credit
agreement.

During 2018, MPLX borrowed $1.410 billion under the bank revolving credit facility, at an average interest rate
of 3.464 percent, per annum, and repaid $1.915 billion of these borrowings. As of December 31, 2018, MPLX
had no outstanding borrowings and $3 million of letters of credit outstanding under the bank revolving credit
facility, resulting in total unused loan availability of $2.25 billion.

MPLX Term Loan

On January 2, 2018, MPLX entered into a term loan agreement with a syndicate of lenders providing for a
$4.1 billion, 364-day term loan facility. MPLX drew the entire amount of the term loan facility in a single
borrowing to fund the cash portion of the consideration for the February 1, 2018 dropdown. On February 8, 2018,
MPLX used $4.1 billion of the net proceeds from the issuance of MPLX senior notes to repay the 364-day term-
loan facility.

MPLX Senior Notes

160

February 2029 and $1.5 billion aggregate principal amount of 5.500 percent unsecured senior notes due February
2049. On December 10, 2018, a portion of the net proceeds from the offering was used to redeem the
$750 million in aggregate principal amount of 5.500 percent unsecured notes due February 2023 issued by
MPLX and MarkWest. These notes were redeemed at 101.833 percent of the principal amount, plus the write off
of unamortized deferred financing costs, resulting in a loss on extinguishment of debt of $60 million. The
remaining net proceeds have or will be used to repay borrowings under MPLX’s revolving credit facility and
intercompany loan agreement with MPC and for general partnership purposes.

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. The remaining proceeds were used to repay
outstanding borrowings under MPLX’s revolving credit facility and intercompany loan agreement with MPC and
for general partnership purposes.

Interest on each series of MPLX senior notes is payable semi-annually in arrears. The MPLX senior notes are
unsecured, unsubordinated obligations of MPLX and are non-recourse to MPC and its subsidiaries other than
MPLX and MPLX GP LLC, as the general partner of MPLX.

ANDX Credit Agreements

ANDX is party to a $1.1 billion revolving credit facility and a $1.0 billion dropdown credit agreement, both of
which expire in January 2021 (together, the “ANDX credit agreements”). The ANDX credit agreements are
unsecured, but are guaranteed by substantially all of ANDX’s subsidiaries.

The ANDX revolving credit facility includes letter of credit issuing capacity of up to $300 million and swingline
loan capacity of up to $50 million. The aggregate borrowing capacity under the ANDX credit agreements may be
increased by up to an additional $500 million, subject to certain conditions, including the receipt of additional
lender commitments.

Borrowings under the ANDX credit agreements bear interest, at ANDX’s election, at LIBOR or the Base Rate
(as defined in the ANDX credit agreements) plus an applicable margin. ANDX 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 ANDX credit agreements
fluctuate based on changes, if any, to ANDX’s credit ratings.

The ANDX credit agreements contain 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 ANDX to maintain a Consolidated Leverage Ratio (as defined in the
ANDX credit agreements) 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 used to calculate the Consolidated
Leverage Ratio is subject to adjustments for certain acquisitions completed and capital projects undertaken
during the relevant period. The covenants also restrict, among other things, ANDX’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, 2018, ANDX was in compliance with the covenants contained in the ANDX credit agreements.

On December 20, 2018, ANDX amended the ANDX credit agreements to, among other things, revise the
affirmative and negative covenants and events of default to be commensurate with those customarily contained in

161

investment-grade credit facilities of a similar type and nature. Specifically, among other things, the amendments
(i) granted additional flexibility to ANDX and its subsidiaries to create liens and incur indebtedness, subject to
the Consolidated Leverage Ratio covenant described above, (ii) remove restrictions on the ability of ANDX and
its subsidiaries to make investments and (iii) granted additional flexibility to ANDX and its subsidiaries to enter
into acquisitions, sell or dispose of assets and enter into related party transactions. In addition, the amendments
made certain legal and technical updates to the ANDX credit agreements, including the removal of collateral and
security provisions that are no longer applicable and changes to reflect MPC’s acquisition of Andeavor. The
amendments did not impact the borrowing capacity available to ANDX or the interest rates and other fees
payable by ANDX under the Credit Agreements.

During the fourth quarter of 2018, ANDX borrowed $760 million under the ANDX credit facilities, at an average
interest rate of 4.460 percent and repaid $635 million of these borrowings. As of December 31, 2018, ANDX had
$1,245 million outstanding borrowings under the ANDX credit facilities, resulting in total unused loan
availability of $855 million.

ANDX Senior Notes

As of December 31, 2018, ANDX had $3.750 billion aggregate principal amount of senior notes outstanding. The
ANDX senior notes consist of $500 million aggregate principal amount of 5.500 percent senior notes due
October 15, 2019, $500 million aggregate principal amount of 3.500 percent senior notes due December 1, 2022,
$300 million aggregate principal amount of 6.250 percent senior notes due October 15, 2022, $450 million
aggregate principal amount of 6.375 percent senior notes due May 1, 2024, $750 million aggregate principal
amount of 5.250 percent senior notes due January 15, 2025, $750 million aggregate principal amount of
4.250 percent senior notes due December 1, 2027 and $500 million aggregate principal amount of 5.200 percent
senior notes due December 1, 2047.

Interest on each series of ANDX senior notes is payable semi-annually in arrears. The ANDX senior notes are
unsecured, unsubordinated obligations of ANDX and are non-recourse to MPC and its subsidiaries other than
ANDX and Tesoro Logistics GP, LLC, as the general partner of ANDX.

162

20. SUPPLEMENTAL CASH FLOW INFORMATION

(In millions)

2018

2017

2016

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 leases

Contribution of assets to joint venture(a)

Intangible asset acquired

Acquisition:

Fair value of MPC shares issued

Fair value of converted equity awards

887

424

172

19,766

203

525

904

337

478

140

273

(a)

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.

(In millions)

Cash and cash equivalents

Restricted cash(a)

Cash, cash equivalents and restricted cash(b)

December 31,
2018

December 31,
2017

1,687

1,725

3,011

3,015

(a)

The restricted cash balance is included within other current assets on the consolidated balance sheets.

(b) As a result of the adoption of ASU 2016-18, the consolidated statements of cash flows now explain the change during the period of both

cash and cash equivalents and restricted cash.

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)

2018

2017

2016

Additions to property, plant and equipment per the consolidated statements

of cash flows

Asset retirement expenditures(a)

Increase (decrease) in capital accruals

Total capital expenditures

3,578

2,732

2,892

309

(127)

3,895

2,801

2,771

(a)

Included in All other, net – Operating activities on the consolidated statements of cash flows.

163

21. ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table shows the changes in accumulated other comprehensive loss by component.

(In millions)

Pension
Benefits

Other
Benefits

Gain on
Cash Flow
Hedge

Workers
Compensation

Total

Balance as of December 31, 2016

(233)

(7)

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

Tax effect

Other comprehensive income (loss)

(38)

(39)

(18)

(3)

(2)

(41)

(48)

(2)

(234)

(23)

(42)

(2)

(16)

(231)

Balance as of December 31, 2017

(190)

(In millions)

Pension
Benefits

Other
Benefits

Gain on
Cash Flow
Hedge

Workers
Compensation

Total

Balance as of December 31, 2017

(190)

(48)

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

Tax effect

Other comprehensive income (loss)

(33)

(7)

(3)

(1)

Balance as of December 31, 2018

(132)

(23)

(1)

(2)

(5)

(231)

(36)

(6)

(3)

(144)

(a)

These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. See Note 22.

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 employees in our Retail segment accrue benefits under a defined
contribution plan for service years beginning January 1, 2010.

We also have other postretirement benefits covering most employees. Health care benefits are provided through
comprehensive hospital, surgical and major medical benefit provisions subject to various cost-sharing features.

164

Retiree life insurance benefits are provided to a closed group of retirees. Other postretirement benefits are not
funded in advance.

In connection with the Andeavor acquisition, we assumed a number of additional noncontributory benefit
pension plans, covering substantially all former Andeavor employees. Benefits under these plans are determined
based on final average compensation and years of service through December 31, 2010 and a cash balance
formula for service beginning January 1, 2011. These plans were frozen as of December 31, 2018. We also
assumed a number of additional postretirement benefits covering eligible employees. These benefits were merged
with our existing benefits beginning January 1, 2019.

Obligations and Funded Status

The accumulated benefit obligation for all defined benefit pension plans was $2,632 million and $2,008 million
as of December 31, 2018 and 2017.

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,

2018

2017

2,779

2,164

2,632

2,089

2,008

1,840

165

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

Plan amendments

Acquisitions

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

Acquisitions

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 cost (credit)

Pension Benefits
2017
2018

Other Benefits
2017
2018

2,164

2,024

826

740

159

(159)

(273)

(90)

895

132

150

(217)

2,779

2,164

1,840

1,659

(115)

115

(273)

522

270

128

(217)

2,089

1,840

(71)

(36)

884

(36)

(30)

826

(30)

(690)

(324)

$ (884)

$ (826)

(21)

(18)

(44)

(33)

(669)

(306)

(840)

(793)

(690)

(324)

$ (884)

$ (826)

517

537

(295)

(238)

(3)

(a) Amounts exclude those related to LOOP and Explorer, equity method investees with defined benefit pension and postretirement plans for
which net losses of $18 million and less than $1 million were recorded in accumulated other comprehensive loss in 2018, reflecting our
ownership share.

166

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 (gain) loss

– settlement loss

Pension Benefits
2017

2018

2016

2018

Other Benefits
2017

2016

159

132

$ 114

(109)

(33)

(100)

(39)

(98)

(46)

(3)

(1)

(3)

(2)

$ 32

(3)

Net periodic benefit cost(a)

184

156

Other changes in plan assets and benefit obligations
recognized in other comprehensive loss (pretax):

Actuarial (gain) loss

Prior service cost (credit)

Amortization of actuarial gain (loss)

Amortization of prior service credit

Other

Total recognized in other comprehensive loss

Total recognized in net periodic benefit cost

and other comprehensive loss

(20)

$ (33)

$ (71)

$ (101)

(90)

(84)

(77)

107

(88)

(45)

(2)

(69)

$ (32)

$ (33)

$ (100)

$ 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.

Lump sum payments to employees retiring in 2018, 2017 and 2016 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 2018, 2017 and 2016
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 2019 are $18 million and
$45 million, respectively. The estimated amount that will be amortized from accumulated other comprehensive
loss into net periodic benefit cost in 2019 is less than $1 million for both the net actuarial gain and prior service
credit for our other defined benefit postretirement plans.

167

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 2018, 2017 and 2016.

Pension Benefits
2017

2016

2018

Other Benefits
2017

2016

2018

Weighted-average assumptions used to determine benefit obligation:

Discount rate

Rate of compensation increase

4.21% 3.55% 3.90% 4.26% 3.70% 4.25%

5.00% 5.00% 5.00% 5.00% 5.00% 5.00%

Weighted-average assumptions used to determine net periodic benefit

cost:

Discount rate

3.88% 3.85% 3.80% 3.72% 4.25% 4.50%

Expected long-term return on plan assets

6.15% 6.50% 6.50%

Rate of compensation increase

4.80% 5.00% 5.00% 5.00% 5.00% 5.00%

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,
2017

2018

2016

6.80%

9.50%

4.50%

6.75%

8.75%

4.50%

7.00%

9.00%

4.50%

2027

2026

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.

168

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)

(30)

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, 2018, the
primary plan’s targeted asset allocation was 42 percent equity, private equity, real estate, and timber securities
and 58 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, 2018 and 2017.

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. Other investments classified as Level 1 include mutual funds that are publicly registered,
valued at NAV on a daily basis using a market approach.

169

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, 2018 and 2017.

(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, 2018
Level 3

Level 2

159

176

-
-

297

684

141

201

-
-

41
29

Total

175

159

297

860

239

201

41
29

2,089

Total

227

507

674

176

Total investments, at fair value

567

1,434

(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

Total investments, at fair value

265

1,470

105

1,840

170

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

2018

Private
Equity

Real
Estate

Other

Total

$ 105

(22)

(1)

(7)

(2)

(31)

$ 88

2017

Private
Equity

Real
Estate

Other

Total

118

(1)

(21)

(9)

(1)

(31)

105

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 2018, we made pension contributions totaling $115 million. We have no required
funding for 2019, 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 $19 million
and $44 million, respectively, in 2019.

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)

2019

2020

2021

2022

2023

2024 through 2028

Pension Benefits Other Benefits

238

254

219

218

213

1,048

271

171

Contributions to defined contribution plans – We also contribute to several defined contribution plans for
eligible employees. Contributions to these plans totaled $144 million, $116 million and $113 million in 2018,
2017 and 2016, 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 2018, 2017 and 2016 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 2018 and 2017 is for the plan’s year ended December 31, 2017 and December 31, 2016, 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 2018, 2017 and 2016 contributions. Our portion
of the contributions does not make up more than five percent of total contributions to the plan.

Pension Fund

EIN

2018

2017

Pension Protection
Act Zone Status

FIP/
RP Status
Pending/
Implemented

MPC Contributions (In millions)

2018

2017

2016

Surcharge
Imposed

Expiration Date of
Collective – Bargaining
Agreement

Central States,

Southeast and
Southwest Areas
Pension Plan(a)

366044243

Red

Implemented

January 31, 2024

(a)

This agreement has a minimum contribution requirement of $328 per week per employee for 2019. A total of 258 employees participated
in the plan as of December 31, 2018.

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 $6 million, $7 million and $6 million for 2018, 2017 and 2016,
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

172

2012 Plan”). The MPC 2012 Plan authorizes the Compensation Committee of our board of directors
(“Committee”) to grant non-qualified or incentive stock options, stock appreciation rights, stock awards
(including restricted stock and restricted stock 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”).

In connection with the Andeavor acquisition, in October of 2018 we converted the outstanding option and equity
incentive awards (other than awards held by non-employee directors of Andeavor, which awards were paid out in
connection with the acquisition) under the Andeavor Plans to awards that provide for rights to acquire (in the
case of options) or be settled in or otherwise determined in reference to shares of MPC common stock in place of
shares of Andeavor common stock (in the case of equity incentive awards). As part of that conversion we used an
exchange ratio for the respective share prices of Andeavor common stock and MPC common stock to ensure that
the award holders’ economic opportunity remained constant, and for converted awards which included a
performance component, performance was determined at the time of the conversion and the awards became
subject to a time-based vesting only design. The converted awards otherwise continue to be subject to the terms
and conditions of their award agreements and the applicable Andeavor Plan under which such awards were
granted. The “Andeavor Plans” as to which the award conversions apply are: the Tesoro Corporation 2006 Long-
Term Incentive Plan; the Andeavor Amended and Restated 2011 Long-Term Incentive Plan; the Andeavor 2018
Long-Term Incentive Plan; and the Amended and Restated Northern Tier Energy LP 2012 Long-Term Incentive
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 2018 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.

173

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.

Total Stock-Based Compensation Expense

The following table reflects activity related to our stock-based compensation arrangements, including the
converted awards related to the acquisition of Andeavor:

(In millions)

2018

2017

2016

Stock-based compensation expense

133

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

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

67.71

50.57

35.27

2018

2017

2016

Expected life in years

Expected volatility

Expected dividend yield

Risk-free interest rate

6.2

34%

3.0%

2.7%

6.3

35%

3.0%

2.1%

6.2

38%

3.0%

1.4%

Weighted average grant date fair value of stock option awards granted

17.21

13.42

9.84

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 2018 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.

174

The following is a summary of our common stock option activity in 2018:

Number of
of Shares

Weighted Average
Exercise Price

Weighted Average
Remaining
Contractual Terms
(in years)

Aggregate
Intrinsic Value
(in millions)

Outstanding at December 31, 2017

8,465,398

Granted

Converted in acquisition

Exercised

Forfeited or expired

Outstanding at December 31, 2018

Vested and expected to vest at December 31,

2018

Exercisable at December 31, 2018

903,797

302,403

(916,566)

(30,437)

8,724,595

8,707,148

6,586,859

33.74

67.71

7.00

26.24

48.96

37.07

37.01

31.42

5.1

4.0

199

182

The intrinsic value of options exercised by MPC employees during 2018, 2017 and 2016 was $44 million,
$75 million and $14 million, respectively.

As of December 31, 2018, unrecognized compensation cost related to stock option awards was $10 million,
which is expected to be recognized over a weighted average period of 1.2 years.

Restricted Stock Awards

The following is a summary of restricted stock award activity of our common stock in 2018:

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, 2017

1,188,662

Granted

Converted in acquisition

RS Vested/RSUs Issued

Forfeited

Outstanding at December 31, 2018

470,951

16,972

(624,934)

(60,951)

990,700

45.07

71.19

82.43

45.98

50.27

57.23

285,164

24,430

4,452,751

(526,254)

(9,235)

4,226,856

29.95

72.43

82.43

65.34

82.43

80.96

Of the 4,226,856 restricted stock units outstanding, 1,106,740 are vested and have a weighted average grant date
fair value of $76.90. These vested but unissued units are held by our non-employee directors, certain of our
officers and certain former officers and employees of Andeavor, are non-forfeitable and are issuable upon the
director’s departure from our board of directors or officers end of employment with the company or, for certain
former officers and employees of Andeavor, upon the expiration of a waiting period under Section 409A of the
Code.

175

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

71.19

50.25

36.17

72.43

53.19

40.85

2018

2017

2016

As of December 31, 2018, unrecognized compensation cost related to restricted stock awards was $35 million,
which is expected to be recognized over a weighted average period of 1.2 years. Unrecognized compensation
cost related to restricted stock unit awards was $110 million, which is expected to be recognized over a weighted
average period of 1.10 years.

Performance Unit Awards

The following table presents a summary of the 2018 activity for performance unit awards to be settled in shares:

Outstanding at December 31, 2017

Granted

Vested

Forfeited

Outstanding at December 31, 2018

Number of Units

Weighted
Average Grant
Date Fair Value

6,851,542

3,830,000

(2,052,959)

(10,000)

8,618,583

0.81

0.83

0.95

0.92

0.79

The number of shares that would be issued upon target vesting, using the closing price of our common stock on
December 31, 2018 would be 146,053 shares.

As of December 31, 2018, unrecognized compensation cost related to equity-classified performance unit awards
was $3 million, which is expected to be recognized over a weighted average period of 1.3 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:

2018

2017

2016

Risk-free interest rate

Look-back period (in years)

Expected volatility

2.3%

2.8

34.0%

1.5%

2.8

36.1%

Grant date fair value of performance units granted

0.83

0.92

1.0%

2.8

34.2%

0.57

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.

176

MPLX and ANDX Awards

Compensation expense for awards related to MPLX and ANDX was not material to our consolidated financial
statements for 2018.

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, 2018, 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)

2019

2020

2021

2022

2023

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

709

619

553

389

295

858

3,423

586

950

301

649

2018

2017

2016

546

367

370

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 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 2038 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 2033.

177

Our revenue from implicit lease arrangements, excluding executory costs, totaled approximately $221 million,
$218 million and $246 million in 2018, 2017 and 2016, 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, 2018, we
received $10 million in contingent lease payments and $9 million for the year ended December 31, 2017. The
following is a schedule of minimum future rentals on the non-cancellable operating leases as of December 31,
2018:

(In millions)

2019

2020

2021

2022

2023

Later years

Total minimum lease payments

160

159

150

148

142

1,111

1,870

The following schedule summarizes our investment in assets held for operating lease by major classes as of
December 31, 2018:

(In millions)

Natural gas gathering and NGL transportation pipelines and facilities

Natural gas processing facilities

Terminal and related assets

Land, building, office equipment and other

Construction in progress

Property, plant and equipment

Less accumulated depreciation

Total property, plant and equipment

965

481

133

1,641

219

1,422

25. COMMITMENTS AND CONTINGENCIES

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, 2018 and 2017, accrued liabilities for remediation totaled $455 million and $114 million. The
increase in accrued liabilities is mainly a result of assuming environmental obligations in connection with the

178

Andeavor acquisition. 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 $35 million and $45 million at December 31, 2018 and
2017, 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
these environmental matters will not,
individually or collectively, have a material adverse effect on our
consolidated results of operations, financial position or cash flows.

Litigation Relating to the Acquisition of Andeavor

The parties ultimately reached an agreement in principle to resolve the Actions in exchange for supplemental
disclosures. Consistent with that agreement, Andeavor and MPC each filed a Current Report on Form 8-K on
September 14, 2018 that included certain additional disclosures in response to plaintiffs’ allegations. Between
September 21 and September 28, 2018, all the Actions were dismissed as moot, and the parties reserved their
rights in the event of any dispute over attorneys’ fees and expenses. In the fourth quarter of 2018, the Company
resolved the remaining disputes over attorneys’ fees for an amount that was not material to the Company.

Other Lawsuits

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 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.

179

$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
to include a request for immediate injunctive relief as well as
attorney general amended his complaint
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 on our consolidated financial position, results of operations, or cash flows.

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 $171 million as of December 31,
2018.

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, 2018, 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 $128 million as of December 31, 2018.

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, 2018,
which consist of unrecognized tax benefits related to MPC, its consolidated subsidiaries and the refining,

180

marketing and transportation 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 to effect
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.

Other guarantees – We have entered into other guarantees with maximum potential undiscounted payments
totaling $123 million as of December 31, 2018, which consist primarily of a commitment to contribute cash to an
equity method investee for certain catastrophic events in lieu of procuring insurance coverage and leases of assets
containing general lease indemnities and guaranteed residual values.

General guarantees associated with dispositions – Over the years, we have sold various assets in the normal
course of our business. Certain of the 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, 2018 and 2017, our contractual commitments to acquire property, plant and equipment and
advance funds to equity method investees totaled $1.8 billion and $484 million.

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.

181

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

(In millions, except per share data)

1st Qtr.

2nd Qtr.

3rd Qtr.

4th Qtr.

1st Qtr.

2nd Qtr.

3rd Qtr.

4th Qtr.(a)

2018

2017

Sales and other operating

revenues(b)

Income from operations

Net income

Net income attributable to MPC

Net income attributable to MPC per

share(c):

Basic

Diluted

$18,866

$22,317

$22,988

$32,333

$16,288

$18,180

$19,210

$21,055

440

235

1,711

1,235

1,055

1,403

941

737

2,017

1,195

951

291

101

982

574

483

1,577

1,004

903

1,168

2,125

2,016

0.08

2.30

1.63

1.38

0.06

0.94

1.79

4.13

0.08

2.27

1.62

1.35

0.06

0.93

1.77

4.09

(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.

(b)

(c)

Includes sales to related parties. The 2018 periods reflect an election to present certain taxes on a net basis concurrent with our adoption
of ASC 606.

The sum of the per-share amounts for the four quarters may not always equal the annual per-share amounts due to differences in the
average number of shares outstanding during the respective periods.

182

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 13a-15(e) under the Exchange Act 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, 2018, 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

On October 1, 2018, the Company completed its acquisition of Andeavor. Accordingly, the acquired assets and
liabilities of Andeavor are included in our consolidated balance sheet as December 31, 2018 and the results of its
operations and cash flows are reported in our consolidated statements of income and cash flows from October 1,
2018 through December 31, 2018. We have elected to exclude Andeavor from the Company’s assessment of
internal control over financial reporting as of December 31, 2018. During the quarter ended December 31, 2018,
there have been no other 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

On February 27, 2019, the Board amended Article IV of the bylaws to clarify the corporate capacities of certain
enumerated officers.

183

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE

Information concerning our executive officers is included in Part I, Item 1 of this Annual Report on Form 10-K.
Information concerning our directors is incorporated by reference to “Proposal 1. Election of Directors” in our
Proxy Statement for the 2019 Annual Meeting of Shareholders, to be filed with the SEC within 120 days of
December 31, 2018 (the “Proxy Statement”).

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 www.marathonpetroleum.com by selecting “Investors,” then “Corporate
Governance,” and clicking on “Code of Ethics for Senior Financial Officers.”

The other information required by this Item is incorporated by reference to “Corporate Governance –
Committees of the Board” and “Stock Ownership Information – Section 16(a) Beneficial Ownership Reporting
Compliance” in our Proxy Statement.

ITEM 11. EXECUTIVE COMPENSATION

Information required by this Item is incorporated by reference to “Compensation Discussion and Analysis,”
“Executive Compensation Tables” and “Director Compensation” in our Proxy Statement.

184

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 “Stock Ownership Information” in our Proxy Statement.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table provides information as of December 31, 2018 with respect to shares of our common stock
that may be issued under the MPC 2012 Plan, the MPC 2011 Plan and the Andeavor Plans:

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 (excluding
securities reflected
in the first column)(c)

Equity compensation plans approved by stockholders

8,868,654

38.15

39,931,756

Equity compensation plan not approved by stockholders

Total

8,868,654

N/A

39,931,756

(a)

Includes the following:
1)

8,422,192 stock options granted pursuant to the MPC 2012 Plan and the MPC 2011 Plan and not forfeited, cancelled or expired as
of December 31, 2018. The amounts in column (a) do not include 302,403 stock options granted under the Andeavor Plans and not
forfeited, cancelled or expired as of December 31, 2018.
158,423 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, 2018. The amounts in column (a) do not include 4,068,433 restricted stock units granted
under the Andeavor Plans and not forfeited, cancelled or expired as of December 31, 2018.
288,039 shares as the maximum potential number of shares that could be issued in settlement of performance units outstanding as of
December 31, 2018 pursuant to the MPC 2012 Plan, based on the closing price of our common stock on December 31, 2018 of
$59.01 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.

(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. Further, the outstanding stock options granted under the Andeavor Plans were not taken into account in
the weighted-average 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, and all granting power under the Andeavor Plans was
revoked at the time of the Andeavor Merger. No more than 16,138,076 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 288,039 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, 2018, based on the closing price of our common stock on December 31, 2018, of $59.01 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 “Related Party Transactions” and “Corporate
Governance – Director Independence” in our Proxy Statement.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information required by this Item is incorporated by reference to “Audit-Related Matters – Audit Fees and
Services” in our Proxy Statement.

185

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

A. Documents Filed as Part of the Report

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 †

2.8

2.9

3.1

3.2

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

2.1

5/26/2011

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.

Agreement and Plan of Merger, dated as of April 29, 2018, by
and among Marathon Petroleum Corporation, Andeavor, Mahi
Inc. and Mahi LLC

Amendment to Agreement and Plan of Merger, dated as of
July 3, 2018, by and among Andeavor, Marathon Petroleum
Corporation, Mahi Inc. and Mahi LLC.

Second Amendment to Agreement and Plan of Merger, dated as
of September 18, 2018, by and among Andeavor, Marathon
Petroleum Corporation, Mahi Inc. and Mahi LLC.

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

8-K

2.1

4/30/2018

001-35054

S-4/A 2.2

7/5/2018

333-225244

8-K

2.1

9/18/2018

001-35054

Restated Certificate of Incorporation of Marathon Petroleum
Corporation, dated October 1, 2018.

8-K

3.2

10/1/2018

001-35054

Amended and Restated Bylaws of Marathon Petroleum
Corporation dated as of February 27, 2019

186

Exhibit
Number

Exhibit Description

Form Exhibit

Filing
Date

SEC
File No.

Filed
Herewith

Furnished
Herewith

Incorporated by Reference

4.1

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

Instruments Defining the Rights of Security Holders,
Including Indentures

Indenture dated as of February 1, 2011 between Marathon
Petroleum Corporation and The Bank of New York Mellon
Trust Company, N.A., as Trustee

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)

Indenture, dated February 12, 2015, between MPLX LP and The
Bank of New York Mellon Trust Company, N.A., as Trustee

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 MPLX LP 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 MPLX LP 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 MPLX LP 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 MPLX LP 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 MPLX LP and The Bank of New York Mellon Trust
Company, N.A., as Trustee (including Form of Note)

187

4.1

3/29/2011

001-35054

4.2

3/29/2011

001-35054

10-Q

4.1

11/3/2014

001-35054

8-K

4.1

12/14/2015 001-35054

8-K

4.1

2/12/2015

001-35714

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

Exhibit
Number

4.18

4.19

4.20

4.21

4.22

4.23

4.24

4.25

4.26

4.27

4.28

4.29

4.30

4.31

Exhibit Description

Form Exhibit

Filing
Date

SEC
File No.

Filed
Herewith

Furnished
Herewith

Incorporated by Reference

Third Supplemental Indenture, dated as of October 2, 2018, by
and between MPC and the Bank of New York Mellon Trust
Company, N.A. (including Form of Note).

Fourth Supplemental Indenture, dated as of October 2, 2018, by
and between MPC and the Bank of New York Mellon Trust
Company, N.A. (including Form of Note).

Fifth Supplemental Indenture, dated as of October 2, 2018, by
and between MPC and the Bank of New York Mellon Trust
Company, N.A. (including Form of Note).

Sixth Supplemental Indenture, dated as of October 2, 2018, by
and between MPC and the Bank of New York Mellon Trust
Company, N.A. (including Form of Note).

Seventh Supplemental Indenture, dated as of October 2, 2018,
by and between MPC and the Bank of New York Mellon Trust
Company, N.A. (including Form of Note).

Eighth Supplemental Indenture, dated as of October 2, 2018, by
and between MPC and the Bank of New York Mellon Trust
Company, N.A. (including Form of Note).

Registration Rights Agreement, dated as of October 2, 2018, by
and between MPC, as issuer, each of Citigroup Global Markets
Inc. and RBC Capital Markets, LLC, as dealer managers.

Indenture (including form of note), dated as of September 27,
2012, among Tesoro Corporation, the guarantors named therein
and U.S. Bank National Association, as trustee, relating to the
4.250% Senior Notes due 2017 and the 5.375% Senior Notes
due 2022

Indenture (including form of note), dated as of March 18, 2014,
among Tesoro Corporation, the guarantors named therein and
U.S. Bank National Association, as trustee, relating to the
5.125% Senior Notes due 2024

Indenture (including form of Notes), dated as of December 22,
2016, among Tesoro Corporation, the guarantors named therein
and U.S. Bank National Association, as trustee, relating to the
4.750% Senior Notes due 2023 and the 5.125% Senior Notes
due 2026

Indenture, dated as of December 21, 2017 among Andeavor and
U.S. Bank National Association, as trustee, relating to the
3.800% Senior Notes due 2028 and the 4.500% Senior Notes
due 2048

First Supplemental Indenture, dated as of December 21, 2017
among Andeavor and U.S. Bank National Association, as
trustee, relating to the 3.800% Senior Notes due 2028 and the
4.500% Senior Notes due 2048

Indenture, dated as of October 29, 2014, among Tesoro
Logistics LP, Tesoro Logistics Finance Corp., the guarantors
named therein and U.S. Bank National Association, as trustee ,
relating to the 5.50% Senior Notes due 2019 and the 6.25%
Senior Notes due 2022

Indenture, dated as of May 12, 2016, among Tesoro Logistics
LP, Tesoro Logistics Finance Corp., the guarantors named
therein and U.S. Bank National Association, as trustee, relating
to the 6.375% Senior Notes due 2024

188

8-K

4.1

10/5/2018

001-35054

8-K

4.2

10/5/2018

001-35054

8-K

4.3

10/5/2018

001-35054

8-K

4.4

10/5/2018

001-35054

8-K

4.5

10/5/2018

001-35054

8-K

4.6

10/5/2018

001-35054

8-K

4.7

10/5/2018

001-35054

8-K

4.1

10/2/2012

001-03473
(Andeavor)

8-K

4.1

3/18/2014

001-03473
(Andeavor)

8-K

4.1

12/22/2016 001-03473
(Andeavor)

8-K

4.1

12/21/2017 001-03473
(Andeavor)

8-K

4.2

12/21/2017 001-03473
(Andeavor)

10-Q

4.3

10/31/2014 001-03473
(Andeavor)

10-K 4.33

2/21/2017

001-03473
(Andeavor)

Exhibit Description

Form Exhibit

Filing
Date

SEC
File No.

Filed
Herewith

Furnished
Herewith

Incorporated by Reference

10-K 4.34

2/21/2017

001-03473
(Andeavor)

First Supplemental Indenture, dated as of September 13, 2018,
to Indenture, dated as of December 22, 2016 between Andeavor
and U.S. Bank National Association, as trustee.

8-K

4.3

9/14/2018

Exhibit
Number

4.32

4.33

4.34

4.35

4.36

4.37

4.38

4.39

10.1

10.2

10.3

10.4

10.5

Indenture, dated as of December 2, 2016, among Tesoro
Logistics LP, Tesoro Logistics Finance Corp., the guarantors
named therein and U.S. Bank National Association, as trustee,
relating to the 5.25% Senior Notes due 2025

Indenture, dated as of November 28, 2017, among Tesoro
Logistics LP, Tesoro Logistics Finance Corp., the guarantors
named therein and U.S. Bank National Association, as trustee,
relating to the 3.500% Senior Notes due 2022, 4.250% Senior
Notes due 2027 and 5.200% Senior Notes due 2047
(incorporated by reference to Exhibit 4.1 to Andeavor Logistics’
Current Report on Form 8-K filed on November 28, 2017, File
No. 1-35143)

Supplemental Indenture, dated as of September 13, 2018, to
Indenture dated as of September 27, 2012 between Andeavor
and U.S. Bank National Association, as trustee.

Supplemental Indenture, dated as of September 13, 2018, to
Indenture, dated as of March 18, 2014 between Andeavor and
U.S. Bank National Association, as trustee.

Second Supplemental Indenture, dated as of September 13,
2018, to Indenture, dated as of December 21, 2017 between
Andeavor and U.S. Bank National Association, as trustee.

Thirteenth Supplemental Indenture, dated as of November 15,
2018, between MPLX LP and The Bank of New York Mellon
Trust Company, N.A., as Trustee (including form of note)

Fourteenth Supplemental Indenture, dated as of November 15,
2018, between MPLX LP and The Bank of New York Mellon
Trust Company, N.A., as Trustee (including form of note)

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

189

8-K

4.1

9/14/2018

8-K

4.2

9/14/2018

001-03473
(Andeavor)

8-K

4.4

9/14/2018

8-K

4.1

11/15/2018 001-35714

8-K

4.2

11/15/2018 001-35714

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

Exhibit
Number

10.6

10.7

10.8*

10.9*

10.10*

10.11*

10.12*

10.13*

Exhibit Description

Form Exhibit

Filing
Date

SEC
File No.

Filed
Herewith

Furnished
Herewith

Incorporated by Reference

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.

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

10.1

11/6/2012

001-35054

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

10.14*

Speedway Excess Benefit Plan

10-K 10.15

2/29/2012

001-35054

10.15*

10.16*

10.17*

10.18*

10.19*

10.20*

10.21*

10.22*

10.23*

10.24*

10.25*

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

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-K 10.21

2/28/2018

001-35054

10-Q 10.4

5/9/2012

001-35054

Form of Marathon Petroleum Corporation Nonqualified Stock
Option Award Agreement – Officer

10-Q 10.5

5/9/2012

001-35054

Amended and Restated Marathon Petroleum Corporation 2012
Incentive Compensation Plan

10-Q 10.1

5/1/2017

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

190

Exhibit
Number

10.26*

10.27*

10.28*

10.29*

10.30*

Exhibit Description

Form Exhibit

Filing
Date

SEC
File No.

Filed
Herewith

Furnished
Herewith

Incorporated by Reference

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

First Amendment to the Marathon Petroleum Corporation 2012
Incentive Compensation Plan

10-Q 10.2

8/3/2015

001-35054

Form of Modification to Performance Unit Award Agreements
for the 2016-2018 and 2017-2019 Performance Cycles

10-K 10.33

2/28/2018

001-35054

10.31*

Marathon Petroleum Thrift Plan

10-K 10.45

2/24/2017

001-35054

10.32

10.33*

10.34*

10.35*

10.36*

10.37*

10.38*

10.39*

10.40

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.

8-K

10.3

7/26/2016

001-35054

Form of Marathon Petroleum Corporation Performance Unit
Award Agreement

Form of Marathon Petroleum Corporation Restricted Stock
Award Agreement – Officer

10-Q 10.1

5/2/2016

001-35054

10-Q 10.2

5/2/2016

001-35054

Form of Marathon Petroleum Corporation Nonqualified Stock
Option Award Agreement – Officer

10-Q 10.3

5/2/2016

001-35054

Form of MPLX LP Performance Unit Award Agreement –
Marathon Petroleum Corporation Officer

Form of MPLX LP Phantom Unit Award Agreement –
Marathon Petroleum Corporation Officer

10-Q 10.3

5/1/2017

001-35054

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

10.3

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.

10.41

10.42

10.43

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

MPLX LP 2018 Incentive Compensation Plan

8-K

10.1

3/5/2018

001-35714

Form of Marathon Petroleum Corporation Performance Unit
Award Agreement

10-Q 10.3

4/30/2018

001-35054

191

Exhibit
Number

10.44

10.45

10.46

10.47

10.48

10.49

10.50

10.51

10.52

10.53*

10.54*

10.55*

10.57*

10.58*

Exhibit Description

Form Exhibit

Filing
Date

SEC
File No.

Filed
Herewith

Furnished
Herewith

Incorporated by Reference

Form of Marathon Petroleum Corporation Restricted Stock
Award Agreement – Officer

Form of MPLX LP Performance Unit Award Agreement –
Marathon Petroleum Corporation Officer

Form of MPLX LP Phantom Unit Award Agreement –
Marathon Petroleum Corporation Officer

10-Q 10.4

4/30/2018

001-35054

10-Q 10.5

4/30/2018

001-35054

10-Q 10.6

4/30/2018

001-35054

Form of MPLX LP Performance Unit Award Agreement

10-Q 10.7

4/30/2018

001-35054

Form of MPLX LP Phantom Unit Award Agreement – Officer

10-Q 10.8

4/30/2018

001-35054

Form of MPLX LP Phantom Unit Award Agreement – Officer –
Three Year Cliff Vesting

10-Q 10.9

4/30/2018

001-35054

Voting and Support Agreement, dated as of April 29, 2018, by
and among Marathon Petroleum Corporation, Andeavor, Mahi
Inc. Mahi LLC, Paul L. Foster and Franklin Mountain
Investments, LP.

Five Year Revolving Credit Agreement, dated as of August 28,
2018, among MPC, as borrower, JPMorgan Chase Bank, N.A.,
as administrative agent, each of JPMorgan Chase Bank, N.A.,
Wells Fargo Securities, LLC, Barclays Bank PLC, Citibank,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Mizuho
Bank, Ltd., MUFG Bank, 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, Citibank N.A., Mizuho
Bank, Ltd., MUFG Bank, Ltd., and Royal Bank of Canada, as
documentation agents, and the other lenders and issuing banks
that are parties thereto.

364 Day Revolving Credit Agreement, dated as of August 28,
2018, among MPC, as borrower, JPMorgan Chase Bank, N.A.,
as administrative agent, each of JPMorgan Chase Bank, N.A.,
Wells Fargo Securities, LLC, Barclays Bank PLC, Citibank,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Mizuho
Bank, Ltd., MUFG Bank, 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, Citibank N.A., Mizuho
Bank, Ltd., MUFG Bank, Ltd., and Royal Bank of Canada, as
documentation agents, and the other lenders and issuing banks
that are parties thereto.

Letter Agreement between Marathon Petroleum Corporation
and Gregory J. Goff, dated as of April 29, 2018 and effective as
of October 1, 2018.

8-K

10.1

4/30/2018

001-35054

8-K

10.1

8/31/2018

001-35054

8-K

10.2

8/31/2018

001-35054

8-K

10.1

10/1/2018

001-35054

Tesoro Corporation 2006 Long-Term Incentive Plan (as
amended and restated)

8-K

10.4

12/18/2008 001-03473
(Andeavor)

Andeavor 2011 Long-Term Incentive Plan (as amended and
restated)

10-K 10.68

2/21/2018

10.56*

Andeavor 2018 Long-Term Incentive Plan

S-8

99.1

5/4/2018

Amended and Restated Northern Tier Energy LP 2012 Long
Term Incentive Plan

S-8

99.1

6/1/2017

Nonqualified stock option inducement award letters, dated as of
May 6, 2010, by and between Tesoro Corporation and Gregory
J. Goff

S-8

99.2

5/11/2011 333-174132
(Andeavor)

192

001-03473
(Andeavor)

333-224688
(Andeavor)

333-218424
(Andeavor)

Exhibit Description

Form Exhibit

Filing
Date

SEC
File No.

Filed
Herewith

Furnished
Herewith

Incorporated by Reference

Marathon Petroleum Annual Cash Bonus Program

Form of Executive Officer Synergy Incentive Award Agreement

8-K

10.1

1/30/2019

001-35054

Form of Chief Executive Officer Synergy Incentive Award
Agreement

8-K

10.2

1/30/2019

001-35054

Exhibit
Number

10.59*

10.60*

10.61*

10.62*

Tesoro Corporation 2016 Performance Share Award Grant
Letter

8-K

10.4

2/3/2016

10.63*

Tesoro Corporation 2017 Performance Share Grant Letter

8-K

10.1

2/21/2017

10.64*

Tesoro Corporation 2016 Market Stock Unit Award Grant
Letter

8-K

10.5

2/3/2016

10.65*

Tesoro Corporation 2017 Market Stock Unit Grant Letter

8-K

10.3

2/21/2017

10.66*

10.67*

10.68*

10.69*

Tesoro Corporation Performance Share Awards Granted in 2016
Summary of Key Provisions

8-K

10.6

2/3/2016

Tesoro Corporation Performance Share Awards Granted in 2017
Summary of Key Provisions

8-K

10.2

2/21/2017

Tesoro Corporation Market Stock Unit Awards Granted in 2016
Summary of Key Provisions

8-K

10.7

2/3/2016

Tesoro Corporation Market Stock Unit Awards Granted in 2017
Summary of Key Provisions

8-K

10.4

2/21/2017

10.70*

Andeavor 2018 Performance Share Award Grant Letter

8-K

10.1

2/20/2018

10.71*

Andeavor Performance Share Awards Granted in 2018
Summary of Key Provisions

8-K

10.2

2/20/2018

10.72*

Andeavor 2018 Market Stock Unit Award Grant Letter

8-K

10.3

2/20/2018

001-03473
(Andeavor)

10.73*

10.74

Andeavor Market Stock Unit Awards Granted in 2018 Summary
of Key Provisions

8-K

10.4

2/20/2018

8-K

10.1

1/4/2018

001-35054

Term Loan Agreement, dated as of January 2, 2018, by and
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, each of 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 lenders that
are parties thereto

10.75

Marathon Petroleum Corporation Deferred Compensation Plan
for Non-Employee Directors, as amended and restated
January 1, 2019

10.76*

Conversion Notice for Andeavor Awards

10.77

First Amendment to Fourth Amended and Restated Omnibus
Agreement, dated as of January 30, 2019, among Andeavor
LLC, Marathon Petroleum Company LP, Tesoro Refining &
Marketing Company LLC, Tesoro Companies, Inc., Tesoro
Alaska Company LLC, Andeavor Logistics LP and Tesoro
Logistics GP, LLC

193

Exhibit
Number

10.78

10.79

10.80

10.81

10.82

10.83

10.84

10.85

10.86

10.87*

14.1

21.1

23.1

24.1

31.1

31.2

Incorporated by Reference

Form Exhibit

8-K

10.2

Filing
Date

SEC
File No.

Filed
Herewith

Furnished
Herewith

10/31/2017 001-35143
(ANDX)

10-Q 10.2

11/17/2018 001-35143
(ANDX)

8-K

10.1

2/3/2016

8-K

10.2

2/3/2016

8-K

10.1

1/5/2018

001-35143
(ANDX)

8-K

10.2

1/5/2018

001-35143
(ANDX)

8-K

10.1

12/27/2018 001-35143
(ANDX)

8-K

10.2

12/27/2018 001-35143
(ANDX)

Exhibit Description

Fourth Amended and Restated Omnibus Agreement, dated as of
October 30, 2017, among Andeavor, Tesoro Refining &
Marketing Company LLC, Tesoro Companies, Inc., Tesoro
Alaska Company LLC, Tesoro Logistics LP and Tesoro
Logistics GP, LLC

Third Amended and Restated Schedules to Fourth Amended and
Restated Omnibus Agreement, effective August 6, 2018, by and
among Andeavor, Tesoro Refining & Marketing Company
LLC, Tesoro Companies, Inc., Tesoro Alaska Company LLC,
Andeavor Logistics LP and Tesoro Logistics GP, LLC

Third Amended and Restated Senior Secured Revolving Credit
Agreement, dated as of January 29, 2016, among Tesoro
Logistics LP, Bank of America, N.A., as administrative agent,
and the other lenders party thereto

Senior Secured Revolving Credit Agreement, dated as of
January 29, 2016, among Tesoro Logistics LP, Bank of
America, N.A., as administrative agent, and the other lenders
party thereto

Amendment No. 1 to Third Amended and Restated Credit
Agreement, dated as of January 5, 2018, among Andeavor
Logistics LP, certain subsidiaries of Andeavor Logistics LP
party thereto, the lenders party thereto, and Bank of America,
N.A.

Amendment No. 1 to Credit Agreement, dated as of January 5,
2018, among Andeavor Logistics LP, certain subsidiaries of
Andeavor Logistics LP party thereto, the lenders party thereto,
and Bank of America, N.A.

Amendment No. 2 to Third Amended and Restated Credit
Agreement, dated as of December 20, 2018, among Andeavor
Logistics LP, as borrower, certain of its subsidiaries party
thereto, as guarantors, the lenders party thereto, and Bank of
America, N.A., as administrative agent

Amendment No. 2 to the Credit Agreement, dated as of
December 20, 2018, among Andeavor Logistics LP, as
borrower, certain of its subsidiaries party thereto, as guarantors,
the lenders party thereto, and Bank of America, N.A., as
administrative agent

MPLX LP 2018 Incentive Compensation Plan MPC
Non-Employee Director Phantom Unit Award Policy

Amended and Restated Marathon Petroleum Corporation 2012
Incentive Compensation Plan

Code of Ethics for Senior Financial Officers

10-K 14.1

2/24/2017

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.

194

Exhibit Description

Form Exhibit

Filing
Date

SEC
File No.

Filed
Herewith

Furnished
Herewith

Incorporated by Reference

Exhibit
Number

32.1

32.2

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.

195

ITEM 16. FORM 10-K SUMMARY

Not applicable.

196

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, 2019

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, 2019 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

*
Steven A. Davis

Edward G. Galante

Gregory J. Goff

James E. Rohr

Kim K.W. Rucker

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

197

Title

Signature

J. Michael Stice

John P. Surma

Susan Tomasky

Director

* 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, 2019

Gary R. Heminger
Attorney-in-Fact

198

TABLE OF CONTENTS

1 LETTER TO OUR

SHAREHOLDERS

FINANCIAL
HIGHLIGHTS

BOARD OF DIRECTORS &
CORPORATE OFFICERS

OUR
BUSINESS

OUR
STRATEGY

Front cover: Garyville refi nery in Louisiana

Inside cover: Kenai refi nery in Alaska

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
ir@marathonpetroleum.com

Kristina Kazarian
Vice President, Investor Relations
(419) 421-2071

Notice of Annual Meeting
The 2019 Annual Meeting of Shareholders
will be held in Findlay, Ohio, on April 24, 2019.

Independent Accountants
PricewaterhouseCoopers LLP
406 Washington Street, Suite 200
Toledo, OH 43604

Stock Exchange Listing
New York Stock Exchange

Common Stock Symbol
MPC

Annual Report on Form 10-K
Additional copies of the Marathon Petroleum Corporation
2018 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.

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.

Comparison of 5 Year Cumulative Total Return*
Among Marathon Petroleum Corporation, The S&P 500 Index,
2017 Peer Group and 2018 Peer Group

$180

$160

$140

$120

$100

$80

$60

$40

$20

$0
12/13

12/14

12/15

12/16

12/17

12/18

Marathon Petroleum Corporation

S&P 500

2017 Peer Group

2018 Peer Group

* $100 invested on Dec. 31, 2013 in stock or index, including reinvestment of dividends.
Fiscal year ending Dec. 31.

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MARATHON PETROLEUM CORPORATION
539 South Main St.
Findlay, OH 45840

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2018 | ANNUAL REPORT

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