MARATHON PETROLEUM CORPORATION
2023 ANNUAL REPORT
TABLE OF CONTEN TS
1
4
6
7
8
12
13
CEO LETTER
OPERATIONS OVERVIEW
CORE VALUES
FINANCIAL HIGHLIGHTS
SUSTAINABILITY
BOARD OF DIRECTORS
LEADERSHIP TEAM
On the cover: Refining Maintenance
Planner Helio Alvarez supporting the
integrity and reliability of our refinery
in Los Angeles, California
FRO M THE CEO
Fellow Shareholders,
Throughout 2023, Marathon Petroleum Corporation (MPC) delivered on our strategic
commitments. Strong operational performance, commercial execution and disciplined
capital allocation, combined with a supportive macroeconomic environment, led to
total shareholder returns of approximately 31% last year. Operating our portfolio to
meet consumer demand, full-year refining utilization was 92%, and we generated more
than $14 billion of cash from operations. In line with our steadfast commitment to
return of capital, we returned $11.6 billion to shareholders through share repurchases
during the year and demonstrated our commitment to a secure, competitive and
growing dividend by increasing MPC’s quarterly dividend 10%.
At the same time, we made meaningful progress in our ongoing sustainability
efforts. Our sustainability-driven approach supports our relentless aspiration to be
a better company and contributes to our long-term success in an evolving energy
industry. Our achievements are a credit to the dedication and ingenuity of our many
talented teams, and we remain resolute in our commitment to safely and reliably
operate our assets, protect the health and safety of our people, and contribute to the
communities where we live and work.
MPC’s strong results over the past few years benefited from the improvements we have
made to our cost structure, asset portfolio and commercial capabilities, which have
created sustainable, structural benefits, irrespective of the market environment.
With this solid groundwork, our unwavering focus on safe and reliable operations, and
many other value-creating opportunities still ahead, we continue to pursue our goal to
position MPC as the refiner investment of choice, with the strongest through-cycle cash
generation and the ability to deliver superior returns to our shareholders.
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FRO M THE CEO
ENHANCING OUR
STRATEGIC ADVANTAGE
Since 2020, executing on our three
strategic pillars – strengthening
the competitive position of our
assets, fostering a low-cost culture,
and improving our commercial
performance – has created significant
value, and these pillars remain
foundational to our efforts to
increase profitability and create value
across our business.
Throughout our operations, we have
identified and are continually seeking
areas where we can improve margins
and increase reliability. We have made
a step change in how we approach
our commercial business, finding new
ways to optimize our system and
maximize total value. Reflective of our
team’s commitment to commercial
excellence, we achieved a full-year
capture rate of 100% in 2023. But we
are far from done.
At the beginning of 2024, to put
more emphasis on advancing
important value-creating initiatives,
driving increased performance,
and making a step change in our
cash flow generation capability,
we implemented organizational
changes focused on maximizing
margin capture across our portfolio
and strengthening our value chain
optimization efforts.
DELIVERING ON OUR
FINANCIAL PRIORITIES
In 2023, we continued to grow
earnings while exercising strict
capital discipline, leading to
superior cash flow generation that
supported our initiatives to return
excess capital to shareholders.
Maintaining a strong balance sheet
is foundational to our strategy
execution, and our capital allocation
framework remains unchanged.
First, we continue to prioritize
sustaining capital to ensure the
safe and reliable performance of
our assets, consistent with our core
values. Second, we’re committed to
paying a secure, competitive and
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M PC 2023 ANNUAL REPORT
growing dividend, which we intend
to evaluate at least annually. Third,
we invest capital in a disciplined
manner where we believe there are
attractive returns and benefit to our
long-term competitive positioning.
Beyond these three objectives,
we return excess capital through
share repurchases to meaningfully
lower our share count. From
May 2021 through January 2024,
MPC repurchased more than $29
billion of shares, reducing our
total outstanding share count by
approximately 45%.
Our master limited partnership MPLX
is a strategic enabler in our portfolio.
MPLX’s annual distribution to MPC
has grown approximately 25% since
2020, and its current pace of cash
distributions fully funds MPC’s
dividend and more than half of our
planned 2024 capital program. We
anticipate MPLX will raise its cash
distributions as it pursues growth
opportunities, further enhancing the
value of our strategic relationship.
DISCIPLINED INVESTMENTS
IN OUR BUSINESS
Because we believe we are a
return of capital business and a
return on capital business, we
conduct rigorous analysis through
a lens of strict capital discipline
to select the capital projects and
investment opportunities we believe
will best amplify the impacts of
our operational and commercial
execution and create value.
Consistent with 2023, our 2024
growth capital plan is allocated
between traditional and low carbon
investments and strategically
prioritizes projects at our most
cash-generative, competitively
advantaged facilities.
In the second quarter of last year, we
completed the STAR project at our
Galveston Bay refinery, increasing
the facility’s residual fuel and heavy
crude oil processing capacity, as well
as its distillate recovery capabilities.
Starting in 2024, we are investing in
a multi-year project to construct a
90,000 barrel-per-day high-pressure
distillate hydrotreater, planned to
increase production of higher-value
finished products. The project is
expected to be completed by year-
end 2027. This strategic investment
will further enable us to provide
the cleaner-burning fuels the world
demands and strengthen our U.S.
Gulf Coast value chain.
On the West Coast, our Los Angeles
refinery is a core value chain asset
and one of the most competitive
refineries in the region. We have
allocated capital to integrate and
modernize utility systems at the
facility, which will improve reliability,
reduce emissions and increase
energy efficiency. We anticipate
completion by the end of 2025.
In 2023, our midstream segment
had strong operational performance,
setting throughput records in our
pipeline, gathering, processing and
fractionation operations. We advanced
high-return growth projects anchored
in the Marcellus and Permian basins
while growing segment adjusted
EBITDA by approximately 7%
year over year. MPLX’s integrated
footprints in these basins provide
a steady source of opportunities to
expand its value chains, particularly
around its natural gas and natural gas
liquids (NGL) assets.
Our joint venture Green Bison
Soy Processing complex in
Spiritwood, North Dakota, which
began receiving soybeans in
September, was recognized by the
Economic Development Association
of North Dakota as the 2023
Economic Development Project
of the Year. Exclusively providing
advantaged feedstock for MPC,
the facility is expected to deliver
enough soybean oil to produce
approximately 75 million gallons per
year of renewable diesel.
Additionally, we are making smaller-
scale investments in emerging
opportunities and early-stage
developments where we can leverage
our expertise. One example is our
joint venture with LF Bioenergy,
LOOKING AHEAD, I am optimistic
about our opportunities and our
future. We expect demand for our
products to continue to grow and
global supply of those products
to remain tight. Although it is very
hard to predict, we believe the U.S.
refining industry will experience an
extended, enhanced mid-cycle
environment due to relative
advantages over international
sources of supply, including energy
costs, feedstock acquisition costs
and refinery complexity.
MPC will remain focused on the
elements of our business that
are within our control – safely
and reliably operating our assets,
executing on our commercial
strategy, and investing capital where
the expected returns are supportive
– striving to generate superior cash
flow and deliver peer-leading total
returns for our shareholders.
I am honored to lead MPC and proud
of the work our people do each day
to safely provide critical energy the
world needs.
Thank you for supporting our
company.
Sincerely,
Michael J. Hennigan
Chief Executive Officer
which is focused on developing and
growing a portfolio of dairy-based,
low carbon-intensity renewable
natural gas (RNG) projects.
ADVANCING OUR SUSTAINABILTY
COMMITMENTS
Our approach to sustainability focuses
on three areas:
• Strengthening the resiliency of
our operations,
•
Innovating for the future, and
• Embedding sustainability in
our decision-making and in our
engagement with employees and
our many stakeholders.
Among many important stakeholders
are our neighbors in the communities
where we operate. We continually
look for innovative ways to make a
positive, measurable impact where
we live and work through identifying
mutual priorities that create shared
value in pursuit of our common goals.
In 2023, the company invested more
than $23.5 million in our communities
as well as in the broader causes
that united many of us, and our
employees contributed approximately
$4.5 million in additional support.
Across the many components of our
business, we are taking disciplined
steps to advance our goal to lower
the carbon intensity of our operations
and the products we manufacture,
while continuing to supply a growing
and evolving market. Last year,
through our dedicated initiatives and
programs, we progressed toward
achieving our set targets to reduce
greenhouse gas (GHG) emissions,
methane emissions, and freshwater
withdrawal intensity. Notably, MPC
produced approximately 485 million
gallons of renewable fuels1 in 2023,
the most in the company’s history.
Above all, our goal is an incident-free,
injury-free workplace, where everyone
who comes to our sites goes home
healthy and safe at the end of the
workday. We remain unwavering in
our resolve to prevent incidents and
injuries throughout our operations.
1Total includes renewable naphthas and renewable propanes and is also inclusive
of MPC’s equity share of volume produced at its joint ventures with Neste and The Andersons.
MP C 2023 ANNUAL R EPO RT
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®
APPROX.
3 MILLION
BARRELS PER CALENDAR DAY OF
CRUDE OIL REFINING CAPACITY
APPROX.
2.6 BILLION
GALLONS OF RENEWABLE
FUEL DELIVERED IN 2023
829,000
BARRELS PER DAY OF
NATURAL GAS LIQUID
FRACTIONATION CAPACITY
40.2
MILLION
BARRELS OF TERMINAL
STORAGE CAPACITY
12
BILLION
STANDARD CUBIC FEET
PER DAY OF NATURAL GAS
PROCESSING CAPACITY
2
STRONG
BRANDS
MARATHON AND ARCO
APPROX.
20,000
MILES OF PIPELINE WE
OWN, LEASE OR HAVE AN
OWNERSHIP INTEREST IN
APPROX.
8,300
NORTH AMERICAN RETAIL &
MARKETING LOCATIONS
334
585
VESSELS AND BARGES
OWNED AND OPERATED
THROUGH MARINE BUSINESS
TRANSPORT TRUCKS OWNED
AND OPERATED
APPROX.
APPROX.
425,000
TONNES CO 2 CAPTURED
FROM OPERATIONS AND
JOINT VENTURES IN 2023
13,300
RAIL TANK CARS WE OWN,
LEASE AND OPERATE
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M PC 2023 ANNUAL REPORT
®
Note: Illustrative representation of asset map
As of Dec. 31, 2023
(a) Includes MPC/MPLX owned and operated lines,
MPC/MPLX interest lines operated by others and
MPC/MPLX operated lines owned by others.
(b) Wholly owned subsidiary of MPC working to
commercialize the conversion of biobased
feedstocks into renewable fuels and chemicals.
(c) Includes MPLX owned and operated natural gas
processing complexes.
OPER ATIONS OVERVIEW
MPC Refinery
MPC Owned and Part-Owned
Light Product Terminal
MPC Owned Asphalt/
Heavy Oil Terminal
MPC Owned and Part-Owned
Marine Facility
MPC/MPLX Pipeline(a)
Martinez Renewables
Joint Venture
MPC Marketing Area
Ethanol Facility
(joint venture with The Andersons)
MPC Renewable Feedstock
Processing Facility
®
Virent(b)
MPC Renewable
Fuels Facility
MPLX Owned and Part-Owned
Light Product Terminal
MPLX Owned Asphalt/
Heavy Oil Terminal
MPLX Natural Gas
Processing Complex(c)
MPLX Refining
Logistics Asset
MPLX Gathering
System
MPLX Owned
Marine Facility
Cavern
MP C 2023 ANNUAL R EPO RT
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CORE VALUE S
At Marathon
Petroleum, we are
proud of the role we
play in helping meet
the world’s growing
energy needs while
steadfastly adhering
to the values we
place at the core of
our business.
Over the past 137 years, and as we continue
to innovate and evolve, our core values have
been and will always be at the heart of our
success – guiding the way we treat each
other and all our stakeholders. We believe
that how we perform our work holds equal
importance with the work we perform.
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M PC 2023 ANNUAL REPORT
SAFETY A ND ENVIRO NMENTAL
STEWARDS HIP
• Protect our people and the world we all share
• Aim for an incident-free, injury-free
workplace
• Demonstrate our unwavering commitment
to safe and environmentally responsible
operations every day
INTEGRITY
• Set high expectations for ourselves and
build trust in each other, with business
partners, shareholders and the communities
where we work and live
• Say what we’re going to do — and then do it
• Behave ethically in all we do
RESPECT
• Treat everyone professionally, with courtesy,
honesty and trust
• Consider how other people’s ideas can
improve what we do and encourage
everyone to openly share their perspectives,
ideas and concerns
INCLU SION
• Value diversity in culture, background,
perspective and experiences
• 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
COLLAB ORATION
• Actively partner with our stakeholders to
find and create shared value, making a
positive difference together
• Foster constructive, solution-oriented dialogues
• Genuinely listen to one another and seek out
perspectives different from our own
DELIVERING ON OUR COMMITME N TS
In 2023, we continued to deliver on our strategic areas of focus and
demonstrate our dedication to growing shareholder value. Strong
operational performance and commercial execution generated
$14.1 billion of net cash from operations that enabled significant return
of capital to shareholders along with disciplined capital investments in
high-return projects. Our results indicate that the improvements we have
made to our cost structure, asset portfolio and commercial execution
over the last few years have driven sustainable benefits and established
a strong foundation for further value creation throughout our business.
R ET URNI NG CAPITA L TO SH AR E H O LDE RS
Executing on our consistent capital allocation framework, we returned
$11.6 billion through share repurchases in 2023. From May 2021 through
January 2024, we repurchased $29 billion of company shares, reducing
our total share count by approximately 45%. In addition, effective with the
third quarter dividend, we increased MPC’s quarterly dividend by 10%.
FI NANC IAL H IGHLIGHTS
202 3
Refining Utilization: 92%
Full-year Capture*: 100%
Operating Cash Flow: $14.1 billion
*Capture reflects the percentage of our Refining &
Marketing (R&M) Margin Indicator realized in
our reported R&M Margin. The calculation of our R&M
margin indicator is available on our website at
www.marathonpetroleum.com/Investors/Investor-Market-Data.
SHARE BUYBACKS*
Remaining Share
Repurchase Authorization
Completed Share
Repurchases
5.9
29
S
N
O
L
L
I
I
B
$
*Data reflects May 1, 2021 to Jan. 31, 2024
202 3
DIVIDENDS PAID PER SHARE
$2.32
$2.49
$ 3.08
2021
2022
2023
INVESTING WITH D ISCIPLIN E
Total Capital Returned to Shareholders: $12.8 billion
Share Repurchases: $11.6 billion
Total Shareholder Return*: 31%
*Total shareholder return calculation based on MPC’s share price increase from 12/31/2022 to
12/31/2023 with dividends received assumed to be reinvested in MPC shares.
This past year, following our established priorities, we invested capital to grow earnings while exercising strict capital
discipline. Projected capital spending for 2024 remains 50% below 2019 levels, reflecting our continued focus on
financial discipline. We remain steadfast in our commitment to safety and environmental performance and will
continue to prioritize sustaining capital investments that ensure the integrity and reliability of our assets. Allocation
of growth capital in the coming year is aimed at projects that enhance margin and reduce cost. We are investing,
primarily at our large, competitively advantaged facilities, to increase shareholder value and position MPC well
into the future.
2,505
SUSTAINING AND
GROWTH CAPITAL*
2024 CAPITAL
SPENDING OUTLOOK
1,47 1
1,6 24
1,0 66
1,396
1,2 5 0
TRADITIONAL
LOW CARBON
I
S
N
O
L
L
M
$
I
2019
2020
2021
2022
2023
2024
Outlook
*Does not include capital spending associated with MPLX or capitalized interest. Capitalized spending for MPLX in
2024 is expected to be $1,100 million net of reimbursements and excluding approximately $100 million for repayment
of MPLX’s share of a pipeline joint venture’s debt due in 2024.
OTHER
MAINTENANCE
MP C 2023 ANNUAL R EPO RT
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SUSTAINAB ILITY
We continue to challenge ourselves to lead in sustainable energy, driving us to be a better company and positioning
us for success in an evolving energy industry. This effort touches important aspects of our business – environmental
stewardship, our people, our communities, and the governance processes and structures we use to guide our actions.
To direct our progress, we focus on strengthening the resiliency of our operations, innovating for the future, and
embedding sustainability in our decision-making and how we create value with stakeholders.
As we strive to meet the needs of today while investing in an energy diverse future, one indication of our progress is
recognition we have received from prominent environmental, social and governance (ESG) rating organizations.
5th
consecutive year
listed on the Dow Jones
Sustainability North America Index
Recognized
as a leader
on the JUST 100 List, ranked
#1 Oil and Gas company
Top decile
ESG rating
by Sustainalytics in U.S. Oil and Gas
Refining and Marketing sector
STRENGTHENING R ESILIENCY
To create a stronger, more durable company, we are committed to lowering the carbon footprint of our operations
and the products we manufacture, improving the energy efficiency of our operations, and advancing practices
that conserve natural resources. To hold ourselves accountable for continuous improvement on environmental
performance, we set meaningful, tangible targets to reduce greenhouse gas (GHG) emissions, methane emissions,
and freshwater withdrawal intensity.
We assess progress on our suite of targets on an annual basis and evaluate potential adjustments to them as we
achieve our goals or new information, opportunities and/or technologies become available.
Scope 1 and 2 GHG Emissions
Intensity(1)(2) (tonnes CO2e/
thousand boe input)
2030 Goal
Progress
Absolute Scope 3 - Category 11
GHG Emissions(1)(2) (tonnes CO2e)
2030 Goal
Progress
Methane Emissions Intensity(1)(2)
(methane-scf/natural gas input-scf)
Freshwater Withdrawal Intensity(1)(3)
(megaliters/million boe input)
2030 Goal
Progress
2025 Goal
2030 Goal
Progress
30% reduction of Scope 1 and 2 GHG
emissions intensity by 2030 from
2014 levels
15% reduction of Scope 3 - Category
11 GHG emissions by 2030 from 2019
levels
Reduce MPLX G&P methane
emissions intensity 50% by 2025 and
75% by 2030 from 2016 levels
20% reduction of freshwater
withdrawal intensity by 2030 from
2016 levels
(1) Additional information regarding our targets, including calculation methodologies, can be found in our
2023 Perspectives on Climate-Related Scenarios report, available at www.marathonpetroleum.com/sustainability.
(2) 2023 estimated values are preliminary and subject to change.
(3) Progress shown through 2022.
Industry-leading Energy Efficiency
MPC earned the ENERGY STAR® Partner of the Year – Sustained
Excellence award from the U.S. Environmental Protection Agency (EPA)
for a fourth consecutive year. Five of our refineries also earned 2023
ENERGY STAR® certifications from the EPA. Since refineries first became
eligible for ENERGY STAR certification in 2006, MPC has received more
certifications than all other refining companies combined.
~425,000
tonnes of CO2
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M PC 2023 ANNUAL REPORT
Top decile
ESG rating
IN NOVATI NG FOR TH E FUTUR E
MPC has a long history of innovation, and our investments in
renewables and other lower-carbon technologies are an important
facet of our strategy. We put tremendous effort and diligence into
planning these strategic investments and in balancing them with our
performance goals, our commitment to capital discipline and serving
the world’s present-day energy needs.
SUSTAI NABILITY
Renewables and
Emerging Technologies
• Strive to be a market leader in
the production and delivery of
renewable fuels
• Seek ways to expand the use
of renewable energy in our
operations
• Deploy emerging technologies
that reduce environmental
impact while enhancing
business performance
Our facility in Martinez, California, which we co-own through our Martinez Renewables joint venture with Neste, began
producing renewable diesel in the first quarter of 2023. In the fall, operations began at the Green Bison Soy Processing
facility in Spiritwood, North Dakota. A joint venture with ADM, Green Bison is North Dakota’s first dedicated soybean
processing complex, and its production of refined soybean oil will be supplied exclusively to MPC as a feedstock for
renewable fuels. This new, state-of-the-art processing plant enhances our ability to source and optimize logistically
advantaged feedstock for our growing renewable fuels business, which includes renewable diesel production at our
facility in Dickinson, North Dakota.
We expanded our portfolio to include renewable natural gas (RNG)
through acquisition of a 49.9% interest in LF Bioenergy, a renewable
energy developer which builds, owns, and operates facilities that turn
organic waste on dairy farms into RNG. In April, the company initiated
commercial operations at its first facility, located in Lawrence, New York.
RNG represents a drop-in alternative to using conventional natural
gas in fuel production processes. Dairy-based RNG has a negative
lifecycle carbon intensity, because it captures methane that is
currently entering the atmosphere to instead use as fuel.*
*See California Air Resources Board, LCFS Pathway Certified Carbon Intensities, available at
https://ww2.arb.ca.gov/resources/documents/lcfs-pathway-certified-carbon-intensities.
~425,000
tonnes of CO2
captured from MPC and
MPLX operations and joint
ventures in 2023 for use in
industrial
applications
food and
beverage
industry
We support the continued development and use of carbon capture,
utilization and sequestration (CCUS) technology as a strategy to
reduce emissions of CO2 and the carbon intensity of the critical
products we supply. To further the goal of large-scale CCUS
deployment, alliances of private industry, government, academia and
others are bringing their resources and expertise to bear.
Near-term efforts of these alliances are to increase the understanding
of CCUS and progress enabling legislation and regulations that are
foundational for the development of large-scale CCUS projects.
MP C 2023 ANNUAL R EPO RT
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SUSTAINAB ILITY
EMBEDDING SU STA IN A BIL ITY
We embrace sustainability in all we do. From project evaluation
to employee engagement, we strive to create shared value with
all our stakeholders – empowering people to achieve more,
contributing to progress in our communities and protecting the
environment we all share.
Engaged and Energized Workforce
At MPC, we know that our people provide us a competitive advantage.
We demonstrate our commitment to attract, develop and retain
top talent in many ways, including providing extensive professional
development opportunities and offering comprehensive benefits that
support the wellbeing of our employees and their families. We seek
unique perspectives, value differences and strive to create a work
environment that fosters collaboration and embraces diversity, equity
and inclusion (DE&I) – one where we build on each other’s strengths and
talents to unlock our full potential.
Our DE&I program is based on a three-pillar strategy, guided by a
dedicated team of subject matter experts and supported by leadership
companywide. Also helping build our culture each day are the more
than 5,100 employees who belong to our 76 employee network chapters
across 16 states. Focused on seven populations – Asian, Black, Disability,
Hispanic, LGBTQ+, Veterans and Women – the networks connect
employees with others who have a shared identity and life experiences.
These groups use a member and ally model to promote inclusion.
MPC scored a 100% on the Human Rights Campaign’s
Corporate Equality Index for the fourth consecutive year.
This index evaluates corporate policies, practices and benefits
pertinent to LGBTQ+ employees.
Stakeholder Engagement
MPC’s sustainability strategy is guided by ongoing dialogue with
stakeholders to inform our understanding of the issues and trends facing
our industry and company. By building relationships with stakeholders,
understanding their goals and perspectives, and incorporating their
feedback into our planning, we consistently strive to create shared value
outcomes. We maintain several dedicated forums that help to facilitate
internal and external engagement on a variety of topics, and we adapt
our engagement efforts to meet the changing needs of our company and
our stakeholders.
MPC’s community investment strategy focuses on contributions to and
partnerships with charitable organizations that align with our core values,
the priorities of our community stakeholders, our sustainability strategy,
and our ability to make a positive, measurable impact. We encourage
employees to support the causes and community efforts that are
important to them by matching their donations to eligible organizations
and funding volunteer incentive awards. In 2023, the company invested
more than $23.5 million in the communities where we live and work as
well as broader causes. Our employees contributed approximately $4.5
million in additional support. The company also raised more than $2.4
million for charitable causes through fundraising events, many of which
engaged our business partners, customers and suppliers.
DE&I Strategy
Building a Diverse
Workforce
Creating a more
Inclusive Culture
Contributing to our
Thriving Communities
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M PC 2023 ANNUAL REPORT
Culture of Safety and Environmental Stewardship
SUSTAI NABILITY
Above all else, our goal is an incident-free, injury-free workplace. We remain steadfast in our commitment to safely
operate our assets, protect the health and safety of our employees and communities, and aim to achieve leading
environmental performance. Safety is a responsibility shared across the company, and everyone at MPC is empowered to
create and maintain a safe and healthy workplace.
We use a combination of proven management systems, best practice-based operational standards, and documented
work processes that reinforce our strong safety culture. To improve our performance, we continue to implement enhanced
programs that focus on reducing safety risks through peer observations and feedback, identifying leading indicators, and
focusing on human and organizational performance foundational beliefs. While our primary objective is to prevent issues
from occurring, we consistently invest in our response capabilities and preparedness training, which equips us to mitigate
and manage impacts to people and the environment should an incident occur. In these instances, we devote ourselves to
thoroughly examining and learning from the occurrence to strengthen our processes and practices.
Refining Process Safety Event (PSE)
Rate Tier 1 & Tier 2
Events/200,000 hours
Tier 1 PSE
Refining OSHA Recordable Rate
Incidents/200,000 hours
Companywide Tier 3 & 4
Designated Environmental Incidents
Count
Tier 2 PSE
0.22
0.16
0.14
0.09
0.08
0.08
0.06
0.04
0.22 0.34
0.31
0.35
69
50
55
52
2020
2021
2022
2023
PSEs are unplanned or uncontrolled releases
of a material from a process. The PSE rate
is the count of events per 200,000 hours of
work. Tier 1 PSEs are the most serious type.
2020 2021 2022 2023
2020 2021
2022 2023
The OSHA Recordable Incident Rate is the number
of incidents per 200,000 hours of work.
Designated Environmental Incidents include three
categories of environmental incidents: releases to
the environment (air, land or water), environmental
permit exceedances and agency enforcement
actions. Tier 4 Designated Environmental Incidents
are the most serious type.
Accountable and Transparent Governance
Our corporate impacts, risks and opportunities are identified and managed by
company leadership with oversight from our Board. An additional layer of oversight
exists with our Enterprise Risk Management program. We believe strong corporate
governance benefits all our stakeholders, including our shareholders, employees,
business partners, customers, communities, the government and others who have a
stake in how we operate.
Our directors bring a range of backgrounds, critical skills, perspectives and
proficiencies to our Board, and our Corporate Governance Principles emphasize the
importance of diversity of director backgrounds and experiences. In January 2024,
MPC announced two new independent board members, Eileen P. Drake and Kimberly
N. Ellison-Taylor, both of whom have strong records of accomplishment in complex
industries, adding to the deep expertise of our current board.
As part of our broader commitment to transparent governance, we maintain regular
dialogue with investor stewardship teams, and our ESG reporting and disclosures are
aligned with TCFD, SASB, CDP and GRI Oil and Gas sector standard.* On our website,
we provide robust information on political engagement and lobbying. Additionally,
20% of MPC’s annual cash bonus program is comprised of ESG metrics.
*CDP: Carbon Disclosure Project; GRI: Global Reporting Initiative; SASB: Sustainability Accounting Standards Board;
TCFD: Task Force on Climate-related Financial Disclosures
Board Oversight and
Risk Management
embedded across multiple
Board committees
y Audit
y
Compensation
and Organization
Development
y
y
Corporate Governance
and Nominating
Sustainability and
Public Policy
MP C 2023 ANNUAL R EPO RT 11
BOARD OF DIR ECTOR S
John P. Surma
Retired Chairman and
Chief Executive Officer,
United States Steel Corporation
- Non-Executive Chairman
of the Board
Evan Bayh
Senior Advisor,
Apollo Global Management
- Corporate Governance and
Nominating Committee Member
- Sustainability and Public Policy
Committee Chair
Jonathan Z. Cohen
Founder, Chief Executive Officer
and President, Hepco Capital
Management, LLC
- Audit Committee Vice Chair
- Corporate Governance and
Nominating Committee Member
Kimberly N. Ellison-Taylor
Former Executive Director of
Finance Thought Leadership,
Oracle Corporation
- Audit Committee Member
- Corporate Governance and
Nominating Committee Member
Michael J. Hennigan
Chief Executive Officer,
Marathon Petroleum Corporation
- Sustainability and Public Policy
Committee Member
Frank M. Semple
Retired Chairman, President and
Chief Executive Officer,
MarkWest Energy Partners, L.P.
- Audit Committee Member
- Compensation and Organization
Development Committee Member
Susan Tomasky
Retired President,
AEP Transmission,
American Electric Power
- Audit Committee Chair
- Sustainability and Public Policy
Committee Member
12
M PC 2023 ANNUAL REPORT
Abdulaziz F. Alkhayyal
Retired Senior Vice President,
Industrial Relations, Saudi Aramco
- Audit Committee Member
- Compensation and Organization
Development Committee Member
- Sustainability and Public Policy
Committee Vice Chair
Charles E. Bunch
Retired Chairman of the
Board and Chief Executive Officer,
PPG Industries, Inc.
- Compensation and Organization
Development Committee Member
- Corporate Governance and
Nominating Committee Chair
Eileen P. Drake
Former Chief Executive Officer and
President, Aerojet Rocketdyne
Holdings, Inc.
- Compensation and Organization
Development Committee Member
- Sustainability and Public Policy
Committee Member
Edward G. Galante
Retired Senior Vice President and
Management Committee Member,
ExxonMobil Corporation
- Compensation and Organization
Development Committee Chair
- Sustainability and Public Policy
Committee Member
Kim K.W. Rucker
Former Executive Vice President,
General Counsel and Secretary,
Andeavor
- Audit Committee Member
- Compensation and Organization
Development Committee Vice Chair
- Sustainability and Public Policy
Committee Member
J. Michael Stice
Professor,
The University of Oklahoma
- Audit Committee Member
- Corporate Governance and
Nominating Committee Vice Chair
- Sustainability and Public Policy
Committee Member
LEADERSHIP T EAM
Michael J. Hennigan
Chief Executive Officer
and Director
Maryann T. Mannen
President
John J. Quaid
Executive Vice President and
Chief Financial Officer
Timothy J. Aydt
Executive Vice
President Refining
Molly R. Benson
Chief Legal Officer and
Corporate Secretary
Rick D. Hessling
Chief Commercial Officer
David R. Heppner
Chief Strategy Officer
and Senior Vice President
Business Development
Fiona C. Laird
Chief Human Resources Officer
and Senior Vice President
Communications
Brian K. Partee
Chief Global Optimization
Officer
Ehren D. Powell
Senior Vice President and
Chief Digital Officer
James R. Wilkins
Senior Vice President
Health, Environment, Safety
and Security
Erin M. Brzezinski
Vice President and Controller
Kristina A. Kazarian
Vice President Finance and
Investor Relations
Kelly S. Niese
Vice President
Treasury
C. Kristopher Hagedorn
Executive Vice President and
Chief Financial Officer
MPLX GP LLC
Gregory S. Floerke
Executive Vice President and
Chief Operating Officer
MPLX GP LLC
Shawn M. Lyon
Senior Vice President
Logistics & Storage
MPLX GP LLC
Kelly D. Wright
Vice President and Controller
MPLX GP LLC
MP C 2023 ANNUAL R EPO RT 13
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒
☐
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 001-35054
Marathon Petroleum Corporation
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
Delaware
27-1284632
539 South Main Street, Findlay, OH 45840-3229
(Address of principal executive offices) (Zip code)
(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
Trading symbol(s)
MPC
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 ☑ 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 ☑
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 ☑ 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 ☑ No ☐
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:
Large accelerated filer ☑ 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 has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b))
by the registered public accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-
based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §
240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
The aggregate market value of common stock held by non-affiliates as of June 30, 2023 was approximately $47.2 billion. This
amount is based on the closing price of the registrant’s common stock on the New York Stock Exchange on June 30, 2023.
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 361,358,732 shares of Marathon Petroleum Corporation common stock outstanding as of February 23, 2024.
Documents Incorporated By Reference
Portions of the registrant’s proxy statement relating to its 2024 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.
Table of Contents
PART I
Item 1.
Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 1C. Cybersecurity
Item 2.
Properties
Item 3.
Legal Proceedings
Item 4. Mine Safety Disclosures
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
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
Item 9C. Disclosures Regarding Foreign Jurisdictions that Prevent Inspections
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accountant Fees and Services
PART IV
Item 15. Exhibits and Financial Statement Schedules
Signatures
Page
4
17
29
29
31
38
39
40
41
66
69
121
121
121
121
122
122
123
123
123
124
128
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.
Throughout this report, the following company or industry specific terms and abbreviations are used:
Glossary of Terms
ANS
ASC
ASU
ATB
barrel
CARB
CARBOB
CBOB
EBITDA
EPA
ESG
FASB
GAAP
GHG
LCFS
LIFO
mbbls
mbpd
mbpcd
MEH
MMcf/d
MMBtu
NGL
NYMEX
NYSE
OSHA
OTC
RFS2
RIN
SEC
SOFR
STAR
ULSD
USGC
UST
VIE
VPP
WTI
Alaska North Slope crude oil, an oil index benchmark price
Accounting Standards Codification
Accounting Standards Update
Articulated tug barges
One stock tank barrel, or 42 U.S. gallons liquid volume, used in reference to crude oil or other liquid
hydrocarbons.
California Air Resources Board
California Reformulated Gasoline Blendstock for Oxygenate Blending
Conventional Gasoline Blendstock for Oxygenate Blending
Earnings Before Interest, Tax, Depreciation and Amortization (a non-GAAP financial measure)
U.S. Environmental Protection Agency
Environmental, social and governance
Financial Accounting Standards Board
Accounting principles generally accepted in the United States
Greenhouse gas
Low Carbon Fuel Standard
Last in, first out
Thousands of barrels
Thousand barrels per day
Thousand barrels per calendar day
Magellan East Houston crude oil, an oil index benchmark price
One million cubic feet of natural gas per day
One million British thermal units
Natural gas liquids, such as ethane, propane, butanes and natural gasoline
New York Mercantile Exchange
New York Stock Exchange
U.S. Occupational Safety and Health Administration
Over-the-Counter
Revised Renewable Fuel Standard program, as required by the Energy Independence and Security Act
of 2007
Renewable Identification Number
U.S. Securities and Exchange Commission
Secured overnight financing rate
South Texas Asset Repositioning
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
1
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 that are subject to risks, contingencies or
uncertainties. You can identify forward-looking statements by words such as “anticipate,” “believe,” “commitment,” “could,”
“design,” “estimate,” “expect,” “forecast,” “goal,” “guidance,” “intend,” “may,” “objective,” “opportunity,” “outlook,” “plan,” “policy,”
“position,” “potential,” “predict,” “priority,” “project,” “prospective,” “pursue,” “seek,” “should,” “strategy,” “target,” “will,” “would” or
other similar expressions that convey the uncertainty of future events or outcomes.
Forward-looking statements include, among other things, statements regarding:
•
•
•
•
•
•
•
•
future financial and operating results;
environmental, social and governance, which we refer to as “ESG”, plans and goals, including those related to
greenhouse gas emissions and intensity, freshwater withdraw intensity, diversity and inclusion and ESG reporting;
future levels of capital, environmental or maintenance expenditures, general and administrative and other expenses;
the success or timing of completion of ongoing or anticipated capital or maintenance projects;
business strategies, growth opportunities and expected investments, including plans to improve commercial
performance, lower costs and optimize our asset portfolio;
consumer demand for refined products, natural gas, renewables and natural gas liquids, such as ethane, propane,
butanes and natural gasoline, which we refer to as “NGLs”;
the timing, amount and form of any future capital return transactions, including dividends and share repurchases by
MPC or distributions and unit repurchases by MPLX LP (“MPLX”); and
the anticipated effects of actions of third parties such as competitors, activist investors, 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. Forward-looking and other statements regarding our ESG
plans and goals are not an indication that these statements are material to investors or required to be disclosed in our filings with
the SEC. In addition, historical, current, and forward-looking ESG-related statements may be based on standards for measuring
progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to
change in the future. 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:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
general economic, political or regulatory developments, including inflation, interest rates, changes in governmental
policies relating to refined petroleum products, crude oil, natural gas, NGLs or renewables, or taxation;
the regional, national and worldwide availability and pricing of refined products, crude oil, natural gas, renewables,
NGLs and other feedstocks;
disruptions in credit markets or changes to credit ratings;
the adequacy of capital resources and liquidity, including availability, timing and amounts of free cash flow necessary to
execute business plans and to effect any share repurchases or to maintain or increase the dividend;
the potential effects of judicial or other proceedings on our business, financial condition, results of operations and cash
flows;
the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other
hydrocarbon-based products, or renewables;
volatility in or degradation of general economic, market, industry or business conditions, including as a result of
pandemics, other infectious disease outbreaks, natural hazards, extreme weather events, regional conflicts such as
hostilities in the Middle East and in Ukraine, inflation or rising interest rates;
our ability to comply with federal and state environmental, economic, health and safety, energy and other policies and
regulations and enforcement actions initiated thereunder;
adverse market conditions or other risks affecting MPLX;
refining industry overcapacity or under capacity;
foreign imports and exports of crude oil, refined products, natural gas and NGLs;
changes in producer customers’ drilling plans or in volumes of throughput of crude oil, natural gas, NGLs, refined
products, other hydrocarbon-based products or renewables;
non-payment or non-performance by our customers;
changes in the cost or availability of third-party vessels, pipelines, railcars and other means of transportation for crude
oil, natural gas, NGLs, feedstocks, refined products and renewables;
2
•
•
•
•
•
•
•
•
•
•
•
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•
•
•
•
the price, availability and acceptance of alternative fuels and alternative-fuel vehicles and laws mandating such fuels or
vehicles;
political and economic conditions in nations that consume refined products, natural gas, renewables and NGLs,
including the United States and Mexico, and in crude oil producing regions, including the Middle East, Russia, Africa,
Canada and South America;
actions taken by our competitors, including pricing adjustments, 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;
industrial incidents or other unscheduled shutdowns affecting our refineries, machinery, pipelines, processing,
fractionation and treating facilities or equipment, means of transportation, or those of our suppliers or customers;
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, refined products or renewables;
political pressure and influence of environmental groups and other stakeholders that are adverse to the production,
gathering, refining, processing, fractionation, transportation and marketing of crude oil or other feedstocks, refined
products, natural gas, NGLs, other hydrocarbon-based products or renewables;
labor and material shortages;
the timing and ability to obtain necessary regulatory approvals and permits and to satisfy other conditions necessary to
complete planned projects or to consummate planned transactions within the expected timeframe, if at all;
the availability of desirable strategic alternatives to optimize portfolio assets and the ability to obtain regulatory and
other approvals with respect thereto;
our ability to successfully implement our sustainable energy strategy and principles and achieve our ESG goals and
targets within the expected timeframe, if at all;
the costs, disruption and diversion of management’s attention associated with campaigns commenced by activist
investors;
personnel changes;
the imposition of windfall profit taxes or maximum margin penalties on companies operating in the energy industry in
California or other jurisdictions; 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.
3
PART I
Item 1. Business
OVERVIEW
MPC has more than 135 years of history in the energy business, and is a leading, integrated, downstream energy company. We
operate one of the nation's largest refining systems with approximately 3.0 million barrels per day of crude oil refining capacity
and believe we are one of the largest wholesale suppliers of gasoline and distillates to resellers in the United States. 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. In addition, 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 operations consist of two reportable operating segments: Refining & Marketing 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, including renewable feedstocks, at our refineries in the
Gulf Coast, Mid-Continent and West Coast regions of the United States, purchases refined products and ethanol for
resale and distributes refined products, including renewable diesel, 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 independent entrepreneurs who operate
primarily Marathon® branded outlets and through long-term supply contracts with direct dealers who operate locations
mainly under the ARCO® brand.
• Midstream – gathers, transports, stores and distributes crude oil, refined products, including renewable diesel, and other
hydrocarbon-based products principally for the Refining & Marketing segment via refining logistics assets, pipelines,
terminals, towboats and barges; gathers, processes and transports natural gas; and transports, fractionates, stores and
markets NGLs. The Midstream segment primarily reflects the results of MPLX. MPLX is a diversified, large-cap master
limited partnership (“MLP”) formed in 2012 that owns and operates midstream energy infrastructure and logistics assets
and provides fuels distribution services. As of December 31, 2023, we owned the general partner of MPLX and
approximately 65 percent of the outstanding MPLX common units.
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 on June 30, 2011. Our common stock trades on the NYSE under the ticker
symbol “MPC.”
On October 1, 2018, we acquired Andeavor. Andeavor shareholders received in the aggregate approximately 239.8 million
shares of MPC common stock valued at $19.8 billion and $3.5 billion in cash. Andeavor was a highly integrated marketing,
logistics and refining company operating primarily in the Western and Mid-Continent United States. Our acquisition of Andeavor
in 2018 substantially increased our geographic diversification and the scale of our assets, which provides increased opportunities
to optimize our system.
On May 14, 2021, we completed the sale of Speedway, LLC (“Speedway”), our company-owned and operated retail
transportation fuel and convenience store business, to 7-Eleven, Inc. (“7-Eleven”) for cash proceeds of $21.38 billion
($17.22 billion after cash-tax payments). This transaction resulted in a pretax gain of $11.68 billion ($8.02 billion after income
taxes), after deducting the book value of the net assets and certain other adjustments.
OUR OPERATIONS
Refining & Marketing
Refineries
We currently own and operate refineries in the Gulf Coast, Mid-Continent and West Coast regions of the United States with an
aggregate crude oil refining capacity of 2,950 mbpcd. During 2023, our refineries processed 2,677 mbpd of crude oil and 237
mbpd of other charge and blendstocks. During 2022, our refineries processed 2,761 mbpd of crude oil and 190 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 and 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
4
and asphalt. Additionally, we manufacture NGLs and petrochemicals and propane. See the Refined Product Sales section for
further information about the products we produce.
Our refineries are largely integrated with each other via pipelines, terminals and barges to maximize operating efficiency. The
transportation links that connect our refineries allow the movement of intermediate products between refineries to optimize
operations, produce higher margin products and efficiently utilize our processing capacity. 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 (1,228 mbpcd)
Galveston Bay, Texas City, Texas Refinery (631 mbpcd)
Our Galveston Bay refinery is a combination of our former Texas City refinery and Galveston Bay refinery. Following the
completion of the STAR project in 2023, which added 40 mbpcd of capacity, it is now our largest refinery. The refinery is located
on the Texas Gulf Coast southeast of Houston, Texas and can process a wide variety of crude oils into gasoline, distillates, NGLs
and petrochemicals, heavy fuel oil and propane. 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 49 percent of the power generated in
2023 was used at the refinery, with the remaining electricity being sold into the electricity grid.
Garyville, Louisiana Refinery (597 mbpcd)
Our Garyville 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,
NGLs and petrochemicals, propane, asphalt and heavy fuel oil. The refinery has access to the export market and multiple
options to sell refined products. Our Garyville refinery has earned designation as an OSHA VPP Star site.
Mid-Continent Region (1,170 mbpcd)
Catlettsburg, Kentucky Refinery (300 mbpcd)
Our Catlettsburg 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, including production from the nearby Utica
Shale, into gasoline, distillates, asphalt, NGLs and petrochemicals, propane and heavy fuel oil. Our Catlettsburg refinery has
earned designation as an OSHA VPP Star site.
Robinson, Illinois Refinery (253 mbpcd)
Our Robinson refinery is located in southeastern Illinois. The Robinson refinery processes sweet and sour crude oils into
gasoline, distillates, NGLs and petrochemicals, propane and heavy fuel oil. The Robinson refinery has earned designation as an
OSHA VPP Star site.
Detroit, Michigan Refinery (140 mbpcd)
Our Detroit 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, NGLs and petrochemicals, asphalt, propane and
heavy fuel oil. Our Detroit refinery has earned designation as an OSHA VPP Star site.
El Paso, Texas Refinery (133 mbpcd)
Our El Paso refinery is located east of downtown El Paso. The El Paso refinery processes sweet and sour crude oils into
gasoline, distillates, heavy fuel oil, asphalt, propane and NGLs and petrochemicals.
St. Paul Park, Minnesota Refinery (105 mbpcd)
Our St. Paul Park refinery is located along the Mississippi River southeast of St. Paul Park. The St. Paul Park refinery processes
sweet and heavy sour crude oils into gasoline, distillates, asphalt, propane, NGLs and petrochemicals and heavy fuel oil.
Canton, Ohio Refinery (100 mbpcd)
Our Canton refinery is located south of Cleveland, Ohio. The Canton refinery processes sweet and sour crude oils, including
production from the nearby Utica Shale, into gasoline, distillates, asphalt, propane, NGLs and petrochemicals and heavy fuel oil.
The Canton refinery has earned designation as an OSHA VPP Star site.
Mandan, North Dakota Refinery (71 mbpcd)
Our Mandan refinery is located outside of Bismarck, North Dakota. The Mandan refinery processes primarily sweet domestic
crude oil from North Dakota into gasoline, distillates, heavy fuel oil, propane and NGLs and petrochemicals.
5
Salt Lake City, Utah Refinery (68 mbpcd)
Our Salt Lake City refinery is the largest in Utah and is located north of downtown Salt Lake City. The Salt Lake City refinery
processes crude oil from Utah, Colorado, Wyoming and Canada into gasoline, distillates, heavy fuel oil, propane and NGLs and
petrochemicals.
West Coast Region (552 mbpcd)
Los Angeles, California Refinery (365 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 cleaner burning CARB fuels. The Los Angeles refinery processes heavy
crude oil from California’s San Joaquin Valley and Los Angeles Basin, as well as crude oils from the Alaska North Slope, South
America, West Africa and other international sources, into CARB gasoline and CARB diesel fuel, as well as conventional
gasoline, distillates, NGLs and petrochemicals, heavy fuel oil and propane.
Anacortes, Washington Refinery (119 mbpcd)
Our Anacortes refinery is located north of Seattle on Puget Sound. The Anacortes refinery processes Canadian crude oil,
domestic crude oil from North Dakota and the Alaska North Slope and international crude oils into gasoline, distillates, heavy fuel
oil, propane and NGLs and petrochemicals.
Kenai, Alaska Refinery (68 mbpcd)
Our Kenai refinery is located on the Cook Inlet, southwest of Anchorage. The Kenai refinery processes mainly Alaska domestic
crude oil, domestic crude oil from North Dakota, along with limited international crude oil into distillates, gasoline, heavy fuel oil,
propane, asphalt and NGLs and petrochemicals.
Planned maintenance activities, or turnarounds, requiring temporary shutdown of certain refinery operating units, are periodically
performed at each refinery.
Refined Product Yields
The following table sets forth our refinery production by product group for each of the last three years.
(mbpd)
Gasoline(a)
Distillates(a)
Propane
NGLs and petrochemicals(a)
Heavy fuel oil
Asphalt
Total
2023
2022
2021
1,526
1,047
66
182
52
80
1,494
1,079
70
178
73
89
1,446
965
52
250
31
91
2,953
2,983
2,835
(a) Product yields include renewable production and ethanol blending.
Crude Oil Supply
We obtain the crude oil we refine through negotiated term contracts and purchases or exchanges on the spot market. Our term
contracts generally have market-related pricing provisions. The following table provides information on our sources of crude oil
for each of the last three years. The crude oil sourced outside of North America was acquired from various foreign national oil
companies, production companies and trading companies.
(mbpd)
United States
Canada
Other international
Total
2023
2022
2021
1,782
597
298
2,677
1,895
539
327
2,761
1,890
445
286
2,621
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
The Martinez Renewable Fuels joint venture (the “Martinez Renewables joint venture”), included within the West Coast region, is
a partnership structured as a 50/50 joint venture with Neste Corporation to convert the Martinez facility from refining petroleum to
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refining renewable feedstocks. The Martinez Renewables facility, which has a design capacity of 730 million gallons per year
including pretreatment capabilities, began ramping up production of renewable diesel in 2023.
We hold a 49.9 percent ownership interest in ethanol production facilities in Albion, Michigan; Logansport, Indiana; Greenville,
Ohio and Denison, Iowa. These plants have a combined ethanol production capacity of approximately 405 million gallons per
year and are managed by our joint venture partner, The Andersons, Inc. (“The Andersons”).
The Dickinson, North Dakota, renewable fuels facility, within the Mid-Continent region, has the capacity to produce 184 million
gallons per year of renewable diesel from corn oil, soybean oil, fats and greases. The produced renewable diesel generates
federal RINs and LCFS credits when sold in California or similar markets. These instruments are used to help meet our
Renewable Fuel Standard and LCFS compliance obligations as a petroleum fuel producer.
We formed a joint venture with Archer-Daniels-Midland Company (“ADM”) for the production of soybean oil to supply rapidly
growing demand for renewable diesel fuel. The joint venture, which is named Green Bison Soy Processing, LLC (“Green Bison
Soy Processing”), owns and operates a soybean processing complex in Spiritwood, North Dakota, with ADM owning 75 percent
of the joint venture and MPC owning 25 percent. The Spiritwood facility sources and processes local soybeans and supplies the
resulting soybean oil exclusively to MPC. The Spiritwood complex, which began operations in November 2023, is expected to
produce approximately 600 million pounds of refined soybean oil annually, enough feedstock for approximately 75 million gallons
of renewable diesel per year.
In 2023, we acquired a 49.9 percent equity interest in LF Bioenergy, an emerging producer of renewable natural gas (“RNG”) in
the U.S. LF Bioenergy has been focused on developing and growing a portfolio of dairy farm-based, low carbon intensity RNG
projects. Current projects are under various stages of development, with the first facility reaching full commercial operation in the
first half of 2023.
Our wholly owned subsidiary, Virent Inc. (“Virent”), operates an advanced biofuels facility in Madison, Wisconsin at which it is
working to commercialize a process for converting biobased feedstocks into renewable fuels and chemicals. During 2023, Virent
continued to advance its BioForming® technology to commercialization with demonstration activities in the aviation industry.
Refined Product Sales
Our refined products are sold to independent retailers, wholesale customers, our brand jobbers and direct dealers. In addition,
we sell refined products for export to international customers. As of December 31, 2023, there were 7,217 brand jobber outlets in
39 states, the District of Columbia and Mexico where independent entrepreneurs primarily maintain Marathon-branded outlets.
We also have long-term supply contracts for 1,114 direct dealer locations primarily in Southern California, largely under the
ARCO® brand. We believe we are one of the largest wholesale suppliers of gasoline and distillates to resellers and consumers
within our market area.
The following table sets forth our refined product sales volumes by product group for each of the last three years.
(mbpd)
Gasoline(b)
Distillates(b)
NGLs and petrochemicals(b)
Asphalt
Propane
Heavy fuel oil
Total
2023(a)
2022(a)
2021(a)
1,933
1,144
230
82
90
57
1,870
1,169
221
89
93
66
1,834
1,089
293
94
76
39
3,536
3,508
3,425
(a) Refined product sales include volumes marketed directly to end-users and trading/supply volumes such as bulk sales to large unbranded
resellers and other downstream companies. Marketed volumes directly to end-users such as branded retail stations were 2,385 mbpd,
2,355 mbpd and 2,338 mbpd for the years ended December 31, 2023, 2022 and 2021, respectively.
(b) Sales include renewable products.
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Refined Product Sales Destined for Export
We sell gasoline, distillates and asphalt for export, primarily out of our Garyville, Galveston Bay, Anacortes and Los Angeles
refineries. The following table sets forth our refined product sales destined for export by product group for the past three years.
(mbpd)
Gasoline
Distillates
Other
Total
Gasoline and Distillates
2023
2022
2021
119
156
64
339
105
158
52
315
115
121
41
277
We sell gasoline, gasoline blendstocks and distillates (including No. 1 and No. 2 fuel oils, jet fuel, kerosene, diesel and
renewable diesel) to wholesale customers, branded jobbers, direct dealers and in 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.
NGLs and Petrochemicals
We are a producer and marketer of NGLs and petrochemicals. Product availability varies by refinery and includes, among others,
propylene, butane, xylene, benzene, cumene and toluene. We market these products domestically to customers in the chemical,
agricultural and fuel-blending industries. In addition, we produce fuel-grade coke at our Garyville, Detroit, 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.
Asphalt
We have refinery-based asphalt production capacity of 143 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,
resellers, 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.
Propane
We produce propane at all of our refineries. Propane is primarily used for home heating and cooking, as a feedstock within the
petrochemical industry, for grain drying and as a fuel for trucks and other vehicles. Our propane sales are split approximately 80
percent and 20 percent between the home heating market and industrial/petrochemical consumers, respectively.
Heavy Fuel Oil
We produce and market heavy residual fuel oil or related components, including slurry, at all of our refineries. Heavy residual fuel
oil is primarily used in the utility and ship bunkering (fuel) industries, though there are other more specialized uses of the product.
Terminals and Transportation
We transport, store and distribute crude oil, feedstocks and refined products through pipelines, terminals and marine fleets
owned by MPLX 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.
We compete in four distinct markets for the sale of refined products—wholesale, including exports, 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.
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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 MEH crude oils and other market structure impacts 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.
Midstream
The Midstream segment primarily includes the operations of MPLX, our sponsored MLP, and certain related operations retained
by MPC.
MPLX
MPLX owns and operates a network of crude oil, natural gas and refined product pipelines and has joint ownership interests in
crude oil, refined products and other pipelines. MPLX also owns and operates light products terminals, storage assets and
maintains a fleet of owned and leased towboats and barges in support of fuels distribution on behalf of MPC. MPLX’s assets also
include natural gas gathering systems and natural gas processing and NGL fractionation complexes.
MPC-Retained Midstream Assets and Investments
We own four Jones Act product tankers, have ownership interests in several crude oil and refined products pipeline systems and
pipeline companies and have an indirect ownership interest in an ocean vessel joint venture through our investment in Crowley
Coastal Partners LLC.
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, transportation and fractionation;
and in marketing our products and services. Competition for natural gas supplies is based primarily on the location of gas
gathering systems and gas processing plants, operating efficiency and reliability, residue gas and NGL market connectivity, the
ability to obtain a satisfactory price for products recovered and the fees charged for the services supplied to the customer.
Competition for oil supplies is based primarily on the price and scope of services, location of gathering/transportation and storage
facilities and connectivity to the best priced markets. Competitive factors affecting our fractionation services include availability of
fractionation capacity, proximity to supply and industry marketing centers, the fees charged for fractionation services and
operating efficiency and reliability of service. Competition for customers to purchase our natural gas and NGLs is based primarily
on price, credit and market connectivity. In addition, certain of our Midstream operations are subject to rate regulation, 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.
REGULATORY MATTERS
Our operations are subject to numerous laws and regulations, including those 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
(“CERCLA”) with respect to releases and remediation of hazardous substances and the Oil Pollution Act of 1990 (“OPA-90”) with
respect to oil pollution and response. In addition, many states where we operate have similar laws. New laws are being enacted
and regulations 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.
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. For additional
information regarding regulatory risks, see Item 1A. Risk Factors.
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Rate Regulation
Some of our existing pipelines are considered interstate common carrier pipelines subject to regulation by the Federal Energy
Regulatory Commission (“FERC”) under the Interstate Commerce Act (the “ICA”), Energy Policy Act of 1992 (“EPAct 1992”) and
the rules and regulations promulgated under those laws. The ICA and FERC regulations require that tariff rates for oil pipelines, a
category that includes crude oil and petroleum product pipelines, be just and reasonable and the terms and conditions of service
must not be unduly discriminatory. The ICA permits interested persons to challenge newly proposed tariff rates or terms and
conditions of service, or any change to tariff rates or terms and conditions of service, and authorizes FERC to suspend the
effectiveness of such proposal or change for a period of time to investigate. If, upon completion of an investigation, FERC finds
that the new or changed service or rate is unlawful, it is authorized to require the carrier to refund the revenues in excess of the
prior tariff collected during the pendency of the investigation. An interested person may also challenge existing terms and
conditions of service or rates and FERC may order a carrier to change its terms and conditions of service or rates prospectively.
Upon an appropriate showing, a shipper may also obtain reparations, from a pipeline, for damages sustained as a result of rates
or terms which FERC deemed were not just and reasonable. Such reparation damages may accrue from the complaint through
the final order and during the two years prior to the filing of a complaint.
EPAct 1992 deemed certain interstate petroleum pipeline rates then in effect to be just and reasonable under the ICA. These
rates are commonly referred to as “grandfathered rates.” Our rates for interstate transportation service in effect for the 365-day
period ending on the date of the passage of EPAct 1992 were deemed just and reasonable and therefore are grandfathered.
Subsequent changes to those rates are not grandfathered. New rates have since been established after EPAct 1992 for certain
pipelines, and certain of our pipelines have subsequently been approved to charge market-based rates.
FERC permits regulated oil pipelines to change their rates within prescribed ceiling levels that are tied to an inflation index. A
carrier must, as a general rule, utilize the indexing methodology to change its rates. Cost-of-service ratemaking, market-based
rates and settlement rates are alternatives to the indexing approach and may be used in certain specified circumstances to
change rates.
Air
GHG Emissions
We believe the advancement of public policy intended to address GHG emissions, climate change, and climate adaptation will
continue, with the potential for further regulations that could affect our operations. Currently, legislative and regulatory measures
to address GHG emissions are in various phases of review, discussion or implementation. Reductions in GHG emissions could
result in increased costs to (i) operate and maintain our facilities, (ii) install new emission controls at our facilities, (iii) capture the
emissions from our facilities and (iv) administer and manage any GHG emissions programs, including acquiring emission credits
or allotments.
On December 2, 2023, EPA issued its final rule to regulate methane emissions from the Oil and Natural Gas Sector. The rule
titled “Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources:
Oil and Gas Sector Climate Review” requires MPLX to control and reduce methane emissions within its natural gas gathering
and boosting operations and gas processing facilities. The rule is consistent with the voluntary methane reduction programs that
MPLX has been implementing through its Focus on Methane Program. As a result, although the rule requires MPLX to make
additional investments to further reduce methane emissions, we do not believe the rule will have a material impact to our
operations. Concurrent with its announcement of the final methane emission rules for the oil and natural gas sector, EPA finalized
updates to its social cost of carbon, methane and nitrous oxide (collectively, “social cost of greenhouse gases” or “SC-GHG”).
The updated estimates are significantly higher than past estimates. A higher SC-GHG could support more stringent GHG
emission regulation in various rule makings from methane emissions to vehicle tailpipe emissions.
States are becoming active in regulating GHG emissions. These measures may include state actions to develop statewide or
regional programs to report emissions and 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, California has enacted a cap-and-trade program. Much of the compliance costs associated
with the California program are ultimately passed on to the consumer in the form of higher fuel costs. States are increasingly
announcing aspirational goals to be net-zero carbon emissions by a certain date through both legislation and executive orders.
To date, these states have not provided significant details as to achievement of these goals; however, meeting these aspirations
will require a reduction in fossil fuel combustion and/or a mechanism to capture GHGs from the atmosphere. As a result, we
cannot currently predict the impact of these potential regulations on our liquidity, financial position, or results of operations.
Other Air Emissions
In February 2024, EPA released a final rule to lower the primary (health-based) fine particulate matter annual standard from its
current level of 12.0 µg/m3 to 9.0 µg/m3. Lowering of the National Ambient Air Quality Standards (“NAAQS”) and subsequent
designation as a nonattainment area could result in increased costs associated with, or result in cancellation or delay of, capital
projects at our or our customers’ facilities, or could require emission reductions that could result in increased costs to us or our
customers. We cannot predict the effects of the various state implementation plan requirements at this time.
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In California, the Governing Board for the South Coast Air Quality Management District (“SCAQMD”) adopted Rule 1109.1 in
November 2021, which establishes Best Available Retrofit Control Technology (“BARCT”) oxides of nitrogen (“NOx”) and carbon
monoxide (“CO”) emission limits for combustion equipment at petroleum refineries. These new requirements will replace the
Regional Clean Air Incentives Market (“RECLAIM”) cap-and-trade program which has required a staged refinery-wide reduction
of NOx emissions over the last several years and will result in additional emission reductions from our Los Angeles Refinery.
Compliance with Rule 1109.1 is being phased in through 2032 and will result in increased costs to operate and maintain our Los
Angeles Refinery.
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. Some coastal states in which we operate have passed state laws similar to
OPA-90, but with expanded liability provisions, that include provisions for cargo owner responsibility as well as ship owner and
operator responsibility.
On October 22, 2019, EPA and the United States Army Corps of Engineers (“Army Corps”) published a final rule to repeal the
2015 “Clean Water Rule: Definition of Waters of the United States” (“2015 Rule”), which amended portions of the Code of
Federal Regulations to restore the regulatory text that existed prior to the 2015 Rule, effective December 23, 2019. The rule
repealing the 2015 Rule has been challenged in multiple federal courts. On April 21, 2020, EPA and the Army Corps promulgated
the Navigable Waters Protection Rule (“2020 Rule”) to define “waters of the United States.” The 2020 Rule has been vacated by
a federal court. On January 18, 2023, EPA and the Army Corps published a final rule (“2023 Rule”) repealing the 2020 Rule
defining “waters of the United States” and adopting a rule largely based upon the definition adopted in 1986 with some revisions
based upon subsequent United States Supreme Court rulings, in particular Rapanos v. United States (2006), which produced
two different tests for determining “waters of the United States,” the relatively permanent waters and significant nexus tests. The
2023 Rule has been challenged in multiple federal courts and has been enjoined from applying in 27 states where the pre-2015
“waters of the United States” definition and guidance applies. On May 25, 2023, the United States Supreme Court issued its
decision in Sackett v. EPA rejecting the significant nexus test in favor of the relatively permanent waters test, thereby narrowing
the scope of wetlands and other water bodies regulated as “waters of the United States.” On September 8, 2023, EPA and the
Army Corps revised the 2023 Rule to conform to the Sackett decision (“Revised 2023 Rule”). The Revised 2023 Rule applies in
only 23 states and has also been challenged in multiple federal courts. The regulatory uncertainty could result in delays in
permitting and impact pipeline construction and maintenance activities.
In April 2020, the U.S. District Court in Montana vacated Nationwide Permit 12 (“NWP 12”), which authorizes the placement of fill
material in “waters of the United States” for utility line activities as long as certain best management practices are implemented.
The decision was ultimately appealed to the United States Supreme Court, which partially reversed the district court’s decision,
temporarily reinstating NWP 12 for all projects except the Keystone XL oil pipeline. The Army Corps subsequently reissued its
nationwide permit authorizations on January 13, 2021, by dividing the NWP that authorizes utility line activities (NWP 12) into
three separate NWPs that address the differences in how different utility line projects are constructed, the substances they
convey, and the different standards and best management practices that help ensure those NWPs authorize only those activities
that have no more than minimal adverse environmental effects. A challenge of the 2021 authorization is currently pending before
the U.S. District Court for the District of Columbia (“D.D.C.”), after being transferred from the U.S. District Court for the District of
Montana in August 2022, and the plaintiffs request the court vacate and remand the 2021 authorization. Also, a petition has been
filed with the Army Corps asking it to revoke the 2021 authorization. The Army Corps could repeal or replace the 2021
authorization in a subsequent rulemaking, and proposed modifications to NWP 12 are expected to be published for notice and
comment in early 2024. The repeal, vacatur, revocation or modification of the 2021 authorization could impact pipeline
construction and maintenance activities.
As part of our emergency response activities, we have used aqueous film forming foam (“AFFF”) containing per- and
polyfluoroalkyl substances (“PFAS”) chemicals as a vapor and fire suppressant. At this time, AFFFs containing PFAS are the
most effective foams to prevent and control a flammable petroleum-based liquid fire involving a large storage tank or tank
containment area. Fluorine-free firefighting foams are currently under development but have not yet proven to be as effective as
AFFFs containing PFAS.
In May 2016, EPA issued lifetime health advisory levels (“HALs”) and health effects support documents for two PFAS substances
- perfluorooctanoic acid (“PFOA”) and perfluorooctane sulfonate (“PFOS”). These HALs were updated in June 2022, when EPA
also issued HALs for two additional PFAS substances. In February 2019, EPA issued a PFAS Action Plan identifying actions it is
planning to take to study and regulate various PFAS chemicals. EPA identified that it would evaluate, among other actions, (1)
proposing national drinking water standards for PFOA and PFOS, (2) developing cleanup recommendations for PFOA and
PFOS, (3) evaluating listing PFOA and PFOS as hazardous substances under CERCLA, and (4) conducting toxicity
assessments for other PFAS chemicals. On December 5, 2022, EPA issued to states and EPA regional offices a memorandum
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providing guidance for addressing PFAS discharges in wastewater and stormwater. Also, on March 29, 2023, EPA issued a
notice of proposed rulemaking to establish national drinking water standards for PFOS, PFOA, perfluorohexane sulfonic acid,
perfluorononanoic acid, perfluorobutane sulfonic acid (“PFBS”), and hexafluoropropylene oxide dimer acid and its ammonium
salt (also known as “GenX”). EPA indicates it will issue a final rule in late 2024. Congress may also take further action to regulate
PFAS. We cannot currently predict the impact of potential statutes or regulations on our operations.
In addition, many states are actively proposing and adopting legislation and regulations relating to the use of AFFFs containing
PFAS. Additionally, many states are using EPA HALs for PFOS and PFOA and some states are adopting and proposing state-
specific drinking water and cleanup standards for various PFAS, including but not limited to PFOS and PFOA. We cannot
currently predict the impact of these regulations on our liquidity, financial position, or results of operations.
Solid and Hazardous 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.
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. 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. 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.
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.
On September 6, 2022, EPA issued a notice of proposed rulemaking that would designate PFOS and PFOA as hazardous
substances under CERCLA Section 102(a). EPA indicates it will issue a final action during the first quarter of 2024. In addition,
EPA has received three petitions requesting regulatory action on PFAS under RCRA and in February 2024, proposed two
regulations that would add nine PFAS, including PFOA and PFOS, to the list of RCRA hazardous constituents and broaden the
definition of hazardous waste applicable to corrective action requirements at hazardous waste treatment, storage, and disposal
facilities. We cannot currently predict the impact of potential statutes or regulations on our remediation costs.
Vehicle and Fuel Requirements
Fuel Economy and GHG Emission Standards for Vehicles
The National Highway Traffic Safety Administration (“NHTSA”) establishes corporate average fuel economy (“CAFE”) standards
for passenger cars and light trucks. In addition, EPA establishes carbon dioxide (“CO2”) emission standards for passenger cars
and light trucks. An Executive Order issued on August 5, 2021, set a goal that 50 percent of all new passenger cars and light
trucks sold in 2030 be zero emission vehicles. Consistent with this order, EPA and NHTSA have promulgated separate rules
setting more stringent requirements. NHTSA’s CAFE standards would increase in stringency from model year 2023 levels by
eight percent annually for model years 2024-2025 and ten percent annually for model year 2026. EPA’s model year 2023-2026
CO2 emission standards result in average fuel economy of 40 mpg in model year 2026. These NHTSA and EPA regulations have
been challenged in court. In addition, NHTSA and EPA have proposed new rules setting even more stringent requirements for
model years 2027-2032. NHTSA’s proposed standards would require an increase in fuel efficiency of two percent annually. EPA’s
proposed standards represent a 56 percent reduction in emissions relative to the model year 2026 standards and would require
a significant increase in electric vehicle production to meet the standards. Higher CAFE and CO2 emission standards for cars
and light trucks reduce demand for our transportation fuels.
In addition, California may establish per its Clean Air Act waiver authority different standards that could apply in multiple states.
EPA has issued a rule that reinstates California’s waiver for its Advanced Clean Car I program, which includes requirements for
zero emission vehicle sales through 2025. California’s governor has also issued an executive order requiring sales of all new
passenger vehicles in the state be zero-emission by 2035. The California Air Resources Board followed this executive order by
finalizing its Advanced Clean Car II regulation, which bans the sale of internal combustion engine vehicles in California in 2035.
California is seeking a waiver from EPA for its Advanced Clean Car II program. Other states have issued, or may issue, zero
emission vehicle mandates.
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Renewable Fuels Standards and Low Carbon Fuel Standards
Pursuant to the Energy Policy Act of 2005 and the EISA, Congress established a Renewable Fuel Standard (“RFS”) program that
requires annual volumes of renewable fuel be blended into domestic transportation fuel. The statutory volumes apply through
calendar year 2022. After calendar year 2022, the statute gives EPA the authority to set the annual volumes. EPA has
promulgated annual volumes for 2023-2025 that increase the volume of renewable fuel that must be blended year over year.
There is currently no regulatory method for verifying the validity of most RINs sold on the open market. We have developed a
RIN integrity program to vet the RINs that we purchase, and we incur costs to audit RIN generators. Nevertheless, if any of the
RINs that we purchase and use for compliance are found to be invalid, we could incur costs and penalties for replacing the
invalid RINs.
In addition to the 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 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. CARB has issued a proposed rule expected to be
finalized in early 2024 that would increase the stringency of the carbon intensity targets for 2025 and beyond. We incur costs to
comply with LCFS programs, and these costs may increase if the cost of LCFS credits increases.
In sum, the RFS 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.
Safety Matters
We are subject to oversight pursuant to the federal Occupational Safety and Health Act, as amended (“OSH Act”), as well as
comparable state statutes that regulate the protection of the health and safety of workers. We believe that we have conducted
our operations in substantial compliance with regulations promulgated pursuant to the OSH Act, including general industry
standards, record-keeping requirements and monitoring of occupational exposure to regulated substances.
We are also subject at regulated facilities to the Occupational Safety and Health Administration’s Process Safety Management
(“PSM”) and EPA’s Risk Management Program (“RMP”) requirements, which are intended to prevent or minimize the
consequences of catastrophic releases of toxic, reactive, flammable or explosive chemicals. EPA has proposed revisions to its
RMP regulation. The proposed revisions include a requirement that refineries with hydrofluoric acid alkylation units perform a
safer technologies and alternatives analysis as part of the process hazard analysis and to document the feasibility of inherent
safety measures. The application of these regulations can result in increased compliance expenditures.
In general, we expect industry and regulatory safety standards to become more stringent over time, resulting in increased
compliance expenditures. While these expenditures cannot be accurately estimated at this time, we do not expect such
expenditures will have a material adverse effect on our results of operations.
The DOT has adopted safety regulations with respect to the design, construction, operation, maintenance, inspection and
management of our pipeline assets. These regulations contain requirements for the development and implementation of pipeline
integrity management programs, which include the inspection and testing of pipelines and the correction of anomalies. These
regulations also require that pipeline operation and maintenance personnel meet certain qualifications and that pipeline
operators develop comprehensive spill response plans.
Certain of our facilities are subject to the Department of Homeland Security Chemical Facility Anti-Terrorism Standards, which
expired on July 28, 2023. Congress has introduced bills that, if passed, would extend the program. We also have several
facilities that are subject to the United States Coast Guard’s Maritime Transportation Security Act, and a number of other facilities
that are subject to the Transportation Security Administration’s Pipeline Security Guidelines and are designated as “Critical
Facilities.” We have an internal inspection program designed to monitor and ensure compliance with all of these requirements.
We believe that we are in material compliance with all applicable laws and regulations regarding the security of our facilities.
Tribal Lands
Various federal agencies, including 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. 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.
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TRADEMARKS, PATENTS AND LICENSES
Our Marathon and ARCO trademarks are material to the conduct of our refining and marketing operations. We currently hold a
number of U.S. and foreign patents and have various pending patent applications. Although in the aggregate our patents and
licenses are important to us, we do not regard any single patent or license or group of related patents or licenses as critical or
essential to our business as a whole. In general, we depend on our technological capabilities and the application of know-how
rather than patents and licenses in the conduct of our operations.
HUMAN CAPITAL
We believe our employees are our greatest asset of strength, and our culture reflects the quality of individuals across our
workforce. Our collaborative efforts, which include fostering an inclusive environment, providing broad-based development and
mentorship opportunities, recognizing and rewarding accomplishments and offering benefits that support the well-being of our
employees and their families, contribute to increased engagement and fulfilling careers. Empowering our people and prioritizing
accountability are also key components for developing MPC’s high-performing culture, which is critical to achieving our strategic
vision.
Employee Profile
As of December 31, 2023, we employed approximately 18,200 people in full-time and part-time roles. Many of these employees
provide services to MPLX, for which we are reimbursed in accordance with employee service agreements. Approximately 3,800
of our employees are covered by collective bargaining agreements.
Safety
We are committed to safe operations to protect the health and safety of our employees, contractors and communities. Our
commitment to safe operations is reflected in our safety systems design, our well-maintained equipment and by learning from our
incidents. Part of our effort to promote safety includes our Operational Excellence Management System, which expands on the
RC14001® scope, incorporates a Plan-Do-Check-Act continual improvement cycle, and aligns with ISO 9001, incorporating
quality and an increased stakeholder and process focus. Together, these components of our safety management system provide
us with a comprehensive approach to managing risks and preventing incidents, illnesses and fatalities. Additionally, our annual
cash bonus program metrics include several employee, process and environmental safety metrics.
Talent Management
Our People Strategy holistically addresses the dynamic business environment we operate in. It enables us to be an employer of
choice with the best people and the right capabilities supporting our inclusive culture. Executing our People Strategy requires
that we attract and retain the best talent. Attracting and retaining top talent involves presenting new employees with the tools for
success and providing opportunities for long-term engagement and career advancement. Our Talent Acquisition team consists of
three segments: Executive Recruiting, Experienced Recruiting and University Recruiting. The specialization within each group
allows us to specifically address MPC’s broad range of current and future talent needs, as well as devote time and attention to
candidates during the hiring process. We believe each diverse candidate brings a new perspective to our workforce, and we
actively seek candidates with a variety of backgrounds and experience.
We equip our employees at every level with classroom training, online courses and on the job activities that provide the
knowledge and skills necessary to perform their daily job functions safely and successfully. Simultaneously, we support our
employees with a wide range of career development programs, tools, and key talent processes to help them advance and grow
their careers within MPC.
Compensation and Benefits
To ensure we are offering competitive pay packages, we annually benchmark compensation, including base salaries, bonus
levels and long-term incentive targets. Our annual bonus program, for which all employees are eligible, is a critical component of
our compensation as it rewards employees for MPC’s achievement against preset goals, encouraging employee commitment
and ownership of results. Employees in our senior leader pay grades, as well as most other leaders, receive long-term incentive
awards annually to align their compensation to the interests of MPC shareholders and MPLX unitholders.
We offer comprehensive benefits that are also benchmarked annually, including medical, dental and vision insurance for our
employees, their spouses or domestic partners, and their dependents. We also provide retirement programs, life insurance,
family building and support programs, sick and disability benefits, education assistance, as well as support the well-being of our
employees and their families through a comprehensive Employee Assistance Program and financial wellness tools. In addition,
we encourage our employees to refresh and recharge by providing competitive vacation programs and paid parental leave
benefits for birth mothers and nonbirth parents. Further, we award a significant number of college and trade school scholarships
to high school senior children of our employees through the Marathon Petroleum Scholars Program. Both full-time and part-time
employees are eligible for these benefits.
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Inclusion
Our People Strategy also includes our Diversity, Equity and Inclusion ("DE&I") program guided by a dedicated team of subject
matter experts and supported by leadership. Our program is based on our three-pillar DE&I strategy of building a diverse
workforce, creating an inclusive culture and contributing to our thriving communities.
We promote cultural inclusivity and respect among our employees. We recognize that when employees feel valued, it shows in
their performance. Our employee networks are fundamental to achieving this goal and connect employees with others who have
a shared identity and life experiences. These seven groups use a member and ally model to promote inclusion - Asian, Black,
Hispanic, LGBTQ+, Veterans, Women and People with Disabilities. Led by employees with involvement and support from
executive sponsors, our networks connect colleagues from across the company and provide opportunities for development,
networking and community involvement.
EXECUTIVE OFFICERS
Following is information about the executive officers and corporate officers of MPC:
Name
Michael J. Hennigan
Maryann T. Mannen
John J. Quaid
Timothy J. Aydt
Molly R. Benson
Fiona C. Laird*
David R. Heppner*
Rick D. Hessling
Brian K. Partee*
Ehren D. Powell*
James R. Wilkins*
Erin M. Brzezinski
Kristina A. Kazarian*
Kelly S. Niese*
Gregory S. Floerke
Shawn M. Lyon
* Corporate officer.
Age as of
February 1, 2024
64
61
52
60
57
62
57
57
50
44
57
41
41
44
60
56
Position with MPC
Chief Executive Officer
President
Executive Vice President and Chief Financial Officer
Executive Vice President Refining
Chief Legal Officer and Corporate Secretary
Chief Human Resources Officer and Senior Vice President Communications
Senior Vice President Strategy and Business Development
Chief Commercial Officer
Chief Global Optimization Officer
Senior Vice President and Chief Digital Officer
Senior Vice President Health, Environment, Safety and Security
Vice President and Controller
Vice President Finance and Investor Relations
Vice President Treasury
Executive Vice President and Chief Operating Officer of MPLX GP LLC
MPLX Senior Vice President Logistics & Storage of MPLX GP LLC
Mr. Hennigan was appointed Chief Executive Officer, effective January 1, 2024, having previously served as President and
Chief Executive Officer since March 2020. He has served as a member of the Board of Directors since April 2020. Mr. Hennigan
also has served as Chairman of the Board of MPLX since April 2020, as Chief Executive Officer since November 2019 and as
President since June 2017. Before joining MPLX, Mr. Hennigan was President, Crude, NGL and Refined Products, of the general
partner of Energy Transfer Partners L.P., an energy service provider. He was President and Chief Executive Officer of Sunoco
Logistics Partners L.P., an oil and gas transportation, terminalling and storage company, from 2012 to 2017, President and Chief
Operating Officer beginning in 2010, and Vice President, Business Development, beginning in 2009.
Ms. Mannen was appointed President, effective January 1, 2024, having previously served as Executive Vice President and
Chief Financial Officer since January 2021. She also has served as a member of MPLX’s Board of Directors since February
2021. Before joining MPC, she served as Executive Vice President and Chief Financial Officer of TechnipFMC (a successor to
FMC Technologies, Inc.), a leading global engineering services and energy technology company, since 2017, having previously
served as Executive Vice President and Chief Financial Officer of FMC Technologies, Inc. since 2014, Senior Vice President and
Chief Financial Officer since 2011, and in various positions of increasing responsibility with FMC Technologies, Inc. since 1986.
Mr. Quaid was appointed Executive Vice President and Chief Financial Officer, effective January 1, 2024, having previously
served as MPLX’s Executive Vice President and Chief Financial Officer since September 2021. He also has served as a member
of MPLX’s Board since January 2022. Prior to his 2021 appointment at MPLX, Mr. Quaid served as our Senior Vice President
and Controller beginning in April 2020, and Vice President and Controller beginning in 2014. Before joining MPC, Mr. Quaid was
Vice President of Iron Ore at United States Steel Corporation, an integrated steel producer, beginning in 2014, and Vice
President and Treasurer beginning in 2011, having previously served in various functions including investor relations, business
planning, financial planning and analysis and project management.
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Mr. Aydt was appointed Executive Vice President Refining, effective October 2022, having previously served as Executive Vice
President and Chief Commercial Officer of MPLX since August 2020. Prior to his 2020 appointment, he served as Vice President,
Business Development, beginning in November 2018, Vice President, Operations, and President of Marathon Pipe Line LLC
beginning in January 2017, MPC’s Terminal, Transport and Rail General Manager beginning in 2013, and Project Director for the
$2.2 billion Detroit Heavy Oil Upgrade Project beginning in 2008.
Ms. Benson was appointed Chief Legal Officer and Corporate Secretary, effective January 1, 2024, having previously served as
Vice President, Chief Securities, Governance & Compliance Officer and Corporate Secretary since June 2018, and as Vice
President, Chief Compliance Officer and Corporate Secretary since 2016. Prior to her 2016 appointment, Ms. Benson served as
Assistant General Counsel, Corporate and Finance, beginning in 2012, and Group Counsel, Corporate and Finance, beginning in
2011.
Ms. Laird was appointed Chief Human Resources Officer and Senior Vice President Communications, effective February 2021,
having previously served as Chief Human Resources Officer since October 2018. Prior to her 2018 appointment, she served as
Chief Human Resources Officer at Andeavor since February 2018. Before joining Andeavor, Ms. Laird was 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 2011.
Mr. Heppner was appointed Senior Vice President Strategy and Business Development, effective February 2021. Prior to this
appointment, he served as Vice President, Commercial and Business Development, beginning in October 2018, Senior Vice
President of Engineering Services and Corporate Support of Speedway LLC beginning in 2014, and Director, Wholesale
Marketing, beginning in 2010.
Mr. Hessling was appointed Chief Commercial Officer, effective January 1, 2024, having previously served as Senior Vice
President, Global Feedstocks, since February 2021. Prior to his 2021 appointment, he served as Senior Vice President, Crude
Oil Supply and Logistics, beginning in October 2018, Manager, Crude Oil & Natural Gas Supply and Trading, beginning in 2014,
and Crude Oil Logistics & Analysis Manager beginning in 2011.
Mr. Partee was appointed Chief Global Optimization Officer, effective January 1, 2024, having previously served as Senior Vice
President, Global Clean Products, since February 2021. Prior to his 2021 appointment, he served as Senior Vice President,
Marketing, beginning in October 2018, Vice President, Business Development, beginning in February 2018, Director of Business
Development beginning in January 2017, Manager of Crude Oil Logistics beginning in 2014, and Vice President, Business
Development and Franchise, at Speedway beginning in 2012.
Mr. Powell was appointed Senior Vice President and Chief Digital Officer, effective July 2020. Before joining MPC, he served as
Vice President and Chief Information Officer (“CIO”) at GE Healthcare, a segment of General Electric Company (“GE”) that
provides medical technologies and services, beginning in April 2018, having previously served as Senior Vice President and CIO,
Services, of GE, a multinational conglomerate, since January 2017 and CIO, Power Services, with GE Power since 2014, and in
various positions of increasing responsibility with GE and its subsidiaries since 2000.
Mr. Wilkins was appointed Senior Vice President Health, Environment, Safety and Security, effective February 2021. Prior to this
appointment, he served as Vice President, Environment, Safety and Security, beginning in October 2018, Director, Environment,
Safety, Security and Product Quality, beginning in February 2016, and Director, Refining Environmental, Safety, Security and
Process Safety Management, beginning in 2013.
Ms. Brzezinski was appointed Vice President and Controller, effective January 8, 2024. Prior to this appointment, she served as
Assistant Controller, Technical Accounting, since August 2021, having previously served as Manager, Accounting, since May
2019. Before joining MPC, Ms. Brzezinski was Director, Assurance and Audit Services, at PricewaterhouseCoopers LLP, a
professional services and accounting firm, beginning in 2018, and Senior Manager beginning in 2013. She was Manager,
Technical Accounting, at Cooper Tire & Rubber Company, an automotive tire manufacturer, from 2011 to 2013. Previously, Ms.
Brzezinski served in positions of increasing responsibility with PricewaterhouseCoopers LLP beginning in 2004.
Ms. Kazarian was appointed Vice President Finance and Investor Relations, effective January 2023. Prior to this appointment,
she served as Vice President, Investor Relations, beginning in April 2018. Before joining MPC, she 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 was Managing Director of MLP, Midstream and
Natural Gas Equity Research at Deutsche Bank, a global investment bank and financial services company, beginning in 2014,
and an analyst specializing on various energy industry subsectors with Fidelity Management & Research Company, a privately
held investment manager, beginning in 2005.
Ms. Niese was appointed Vice President Treasury, effective January 2023. Prior to this appointment, she served as Assistant
Treasurer beginning in February 2017, Corporate Finance Manager beginning in October 2014, and Brand Coordinating
Manager beginning in 2011, having previously served in various analytical roles within Crude Supply, Terminals, Transportation
and Rail and Internal Audit since joining MPC in 2003.
Mr. Floerke was appointed Executive Vice President and Chief Operating Officer of MPLX, effective February 2021, having
previously served as Executive Vice President and Chief Operating Officer, Gathering and Processing, Trucks and Rail, since
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August 2020. Prior to the 2020 appointment, he served as Executive Vice President, Gathering and Processing, beginning in
2018, Executive Vice President and Chief Operating Officer, MarkWest Operations, beginning in July 2017, and Executive Vice
President and Chief Commercial Officer, MarkWest Assets, beginning in 2015, at the time of MPLX’s acquisition of MarkWest
Energy Partners, L.P. Before joining MPLX, Mr. Floerke was Executive Vice President and Chief Commercial Officer at MarkWest
beginning in 2015, and Senior Vice President, Northeast region, at MarkWest beginning in 2013. Previously, Mr. Floerke held
senior management positions at Access Midstream Partners, L.P. from 2011 until 2013.
Mr. Lyon was appointed Senior Vice President Logistics and Storage of MPLX, effective September 2022, having previously
served as Vice President, Operations, and President, Marathon Pipe Line LLC, since November 2018. Prior to his 2018
appointment, he was Vice President of Operations for Marathon Pipe Line LLC beginning in 2011. Previously, Mr. Lyon served in
various roles of increasing responsibility with MPC since 1989, including as Manager, Marketing and Transportation Engineering
beginning in 2010, and District Manager, Transport and Rail beginning in 2008. He served as board chair for Liquid Energy
Pipeline Association in 2023 and chairs the board of the Louisiana Offshore Oil Port (“LOOP”).
AVAILABLE INFORMATION
General information about MPC, including our Corporate Governance Principles, our Code of Business Conduct and our Code of
Ethics for Senior Financial Officers, can be found at www.marathonpetroleum.com under the “Investors” tab by selecting
“Corporate Governance.” We would post on our website any amendments to, or waivers from, either of our codes requiring
disclosure under applicable rules within four business days following any such amendment or waiver. Charters for the Audit
Committee, Compensation and Organization Development Committee, Corporate Governance and Nominating Committee and
Sustainability and Public Policy Committee are also available at this site under the “About” tab by selecting “Board of Directors.”
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, or on the
SEC’s website at www.sec.gov. 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 the other information contained in this Annual Report on Form
10-K in evaluating us and our common stock. Although the risks are organized by headings, and each risk is discussed
separately, many are interrelated. Our business, financial condition, results of operations and cash flows could be materially and
adversely affected by these risks, and, as a result, the trading price of our common stock could decline. We have in the past
been adversely affected by certain of, and may in the future be affected by, these risks. You should not interpret the disclosure of
any risk factor to imply that the risk has not already materialized.
Business and Operational Risks
Our financial results are affected by volatile refining margins, which are dependent on factors beyond our control.
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 and other feedstocks. The prices of feedstocks and the prices at which we can sell our refined products 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 feedstocks and refined products;
transportation infrastructure cost and availability;
operation levels of other refineries in our markets;
the development by competitors of new refining or renewable conversion capacity;
natural gas and electricity supply costs;
political instability, threatened or actual terrorist incidents, armed conflict or other global political or economic conditions;
local weather conditions; and
the occurrence of other risks described herein.
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 generally
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purchase our 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 can 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 can have a material and adverse effect on our business,
financial condition, results of operations and cash flows.
Lower refining and marketing margins have in the past, and may in the future, lead us to 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 require us to re-evaluate practices regarding our repurchase activity and
dividends.
Legal, technological, political and scientific developments regarding emissions, fuel efficiency and alternative fuel
vehicles may decrease demand for petroleum-based transportation fuels.
Developments aimed at reducing vehicle emissions, increasing vehicle efficiency or reducing the sale of new petroleum-fueled
vehicles may decrease the demand and may increase the cost for our transportation fuels. An Executive Order issued on August
5, 2021, set a goal that 50 percent of all new passenger cars and light trucks sold in 2030 be zero emission vehicles. Consistent
with this order, EPA and NHTSA have promulgated separate rules setting more stringent requirements for reductions through
model year 2026. NHTSA’s amended CAFE standards increase in stringency from model year 2023 levels by eight percent
annually for model years 2024-2025 and ten percent annually for model year 2026. EPA’s revised model year 2023-2026 CO2
emission standards, which were finalized in December 2021, result in average fuel economy of 40 mpg in model year 2026.
Other jurisdictions have issued or considered issuing similar mandates, and we expect this trend will continue.
Moreover, consumer acceptance and market penetration of electric, hybrid and alternative fuel vehicles continues to increase. In
2021, several automobile manufacturers jointly announced their shared goal that 40-50 percent of their new vehicle sales be
battery electric, fuel cell or plug-in hybrid vehicles by 2030. Other automobile manufacturers have similar, or more aggressive,
goals with respect to vehicle electrification. Technological breakthroughs relating to renewable fuels or other fuel alternatives
such as hydrogen or ammonia, or efficiency improvements for internal combustion engines could reduce demand for petroleum-
based transportation fuels.
Together, these trends and developments have had and are expected to continue to have an adverse effect on sales of our
petroleum-based transportation fuels, which in turn could have a material and adverse effect on our business, financial condition,
results of operations and cash flows.
Our operations are subject to business interruptions and present inherent hazards and risks, which could adversely
impact our results of operations and financial condition.
Our operations are subject to business interruptions, such as scheduled and unscheduled refinery turnarounds, unplanned
maintenance, explosions, fires, refinery or pipeline releases, product quality incidents, power outages, severe weather, labor
disputes, acts of terrorism, or other natural or man-made disasters. These types of incidents adversely affect our operations and
may result in serious personal injury or loss of human life, significant damage to property and equipment, impaired ability to
manufacture our products, environmental pollution, and substantial losses. We have experienced certain of these incidents in the
past.
For assets located near populated areas, the level of damage resulting from such an incident could be greater. 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.
Certain of our refineries receive crude oil and other feedstocks by tanker or barge. MPLX operates a fleet of boats and barges to
transport light products, heavy oils, crude oil, renewable fuels, chemicals and feedstocks to and from our refineries and terminals
owned by MPC and MPLX. 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 contracted to aid us in a discharge response may be unavailable due to
weather conditions, governmental regulations or other local or global events.
Damages resulting from an incident involving any of our assets or operations may result in our being named as a defendant in
one or more lawsuits asserting potentially substantial claims or in our being assessed potentially substantial fines by
governmental authorities.
We are increasingly dependent on the performance of our information technology systems and those of our third-party
business partners and service providers.
We are increasingly dependent on our information technology systems and those of our third-party business partners and service
providers for the safe and 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 and investor data,
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and to manage or support a variety of business processes, including our supply chain, pipeline operations, gathering and
processing operations, credit card payments and authorizations at certain of our customers’ retail outlets, financial transactions,
banking and numerous other processes and transactions.
Our information systems (and those of our third-party business partners and service providers), including our cloud computing
environments and operational technology environments, are subject to numerous and evolving cybersecurity threats and attacks,
including ransomware and other malware, and phishing and social engineering schemes, supply chain attacks, and advanced
artificial intelligence cyberattacks, which can compromise our ability to operate, and the confidentiality, availability, and integrity of
data in our systems or those of our third-party business partners and service providers. These and other cybersecurity threats
may originate with criminal attackers, advanced persistent threats and nation-state actors, state-sponsored actors or employee
error or malfeasance. Because the techniques used to obtain unauthorized access, or to disable or degrade systems
continuously evolve and have become increasingly complex and sophisticated, and can remain undetected for a period of time
despite efforts to detect and respond in a timely manner, we (and our third-party business partners and service providers) are
subject to the risk of cyberattacks.
Our cybersecurity and infrastructure protection technologies, disaster recovery plans and systems, employee training and vendor
risk management may not be sufficient to defend us against all unauthorized attempts to access our information or impact our
systems. We and our third-party vendors and service providers have been and may in the future be subject to cybersecurity
events of varying degrees. To date, the impacts of prior events have not had a material adverse effect on us.
Cybersecurity events involving our information technology systems or those of our third-party business partners and service
providers can result in theft, destruction, loss, misappropriation or release of confidential financial data, regulated personally
identifiable information, intellectual property and other information; give rise to remediation or other expenses; result in litigation,
claims and increased regulatory review or scrutiny; reduce our customers’ willingness to do business with us; disrupt our
operations and the services we provide to customers; and subject us to litigation and legal liability under international, U.S.
federal and state laws. Any of such results could have a material adverse effect on our reputation, business, financial condition,
results of operations and cash flows.
The availability and cost of renewable identification numbers could have an adverse effect on our financial condition
and results of operations.
Pursuant to the Energy Policy Act of 2005 and the EISA, Congress established a Renewable Fuel Standard (“RFS”) program that
requires annual volumes of renewable fuel be blended into domestic transportation fuel. A RIN is assigned to each gallon of
renewable fuel produced in, or imported into, the United States. As a producer of petroleum-based motor fuels, we are obligated
to blend renewable fuels into the products we produce at a rate that is at least commensurate to EPA’s quota and, to the extent
we do not, we must purchase RINs in the open market to satisfy our obligation under the RFS program. We are exposed to the
volatility in the market price of RINs. We cannot predict the future prices of RINs. RINs prices are dependent upon a variety of
factors, including EPA regulations, the availability of RINs for purchase, and levels of transportation fuels produced, which can
vary significantly from quarter to quarter. There is currently no regulatory method for verifying the validity of most RINs sold on
the open market. We have developed a RIN integrity program to vet the RINs that we purchase, and we incur costs to audit RIN
generators. Nevertheless, if any of the RINs that we purchase and use for compliance are found to be invalid, we could incur
costs and penalties for replacing the invalid RINs. See Item 1. Business – Regulatory Matters for additional information on these
and other regulatory compliance matters.
Competitors that produce their own supply of feedstocks, own their own retail sites, or have greater financial resources
may have a competitive advantage.
The refining and marketing industry is highly competitive with respect to both feedstock supply and refined petroleum products.
We compete with many companies for available supplies of crude oil and other feedstocks, and we do not produce any of our
crude oil feedstocks. Our competitors include multinational, integrated major oil companies that can obtain a significant portion of
their feedstocks from company-owned production. Competitors that produce crude oil are at times better positioned to withstand
periods of depressed refining margins or feedstock shortages.
We also compete with other companies for customers for our refined petroleum products. The independent entrepreneurs who
operate primarily Marathon-branded outlets and the direct dealer locations we supply compete with other convenience store
chains, outlets owned or operated by integrated major oil companies or their dealers or jobbers, and other well-recognized
national or regional retail outlets, often selling transportation fuels and merchandise at very competitive prices. Non-traditional
transportation fuel retailers, such as supermarkets, club stores and mass merchants, may be better able to withstand volatile
market conditions or levels of low or no profitability in the retail segment of the market. The loss of market share by those who
operate our branded outlets and the direct dealer locations we supply could adversely affect our business, financial condition,
results of operations and cash flows.
We may be negatively impacted by inflation.
Increases in inflation may have an adverse effect on us. Current and future inflationary effects may be driven by, among other
things, supply chain disruptions and governmental stimulus or fiscal policies. Continuing increases in inflation could impact the
commodity markets generally, the overall demand for our products and services, our costs for labor, material and services and
the margins we are able to realize on our products, all of which could have an adverse impact on our business, financial position,
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results of operations and cash flows. Inflation may also result in higher interest rates, which in turn would result in higher interest
expense related to our variable rate indebtedness and any borrowings we undertake to refinance existing fixed rate
indebtedness.
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, 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 or limited because of weather
events, accidents, labor disputes, governmental regulations or third-party actions.
In particular, pipelines or railroads provide a nearly exclusive form of transportation of crude oil to, or refined products from, some
of our refineries. 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, or any other 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, can adversely affect us.
A significant decrease in oil and natural gas production in MPLX’s areas of operation may adversely affect MPLX’s
business, financial condition, results of operations and cash available for distribution to its unitholders, including MPC.
A significant portion of MPLX’s operations is dependent on the continued availability of natural gas and crude oil production. The
production from oil and natural gas reserves and wells owned by its producer customers 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, NGL and refined product supplies,
which depend in part on the level of successful drilling activity near its facilities, its ability to compete for volumes from successful
new wells and its ability to expand its system capacity as needed.
We have no control over the level of drilling activity in the areas of MPLX’s operations, the amount of reserves associated with
the wells or the rate at which production from a well will decline. In addition, we have no control over producers or their
production decisions, which are affected by demand, prevailing and projected energy prices, drilling costs, operational
challenges, access to downstream markets, the level of reserves, geological considerations, governmental regulations and the
availability and cost of capital. Reductions in exploration or production activity in MPLX’s areas of operations could lead to
reduced throughput on its pipelines and utilization rates of its facilities.
Decreases in energy prices can lead to decreases in 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 can result in producers deciding to limit their oil and gas drilling
operations, which can substantially delay the production and delivery of volumes of oil, natural gas and NGLs to MPLX’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 unit price, thereby increasing its distribution yield and cost of
capital. Such impacts could adversely impact MPLX’s ability to execute its long-term organic growth projects, satisfy obligations
to its customers and make distributions to unitholders at intended levels, and may also result in non-cash impairments of long-
lived assets or goodwill or other-than-temporary non-cash impairments of our equity method investments.
Severe weather events, other climate conditions and earth movement and other geological hazards may adversely
affect our assets and ongoing operations.
Our assets are subject to acute physical risks, such as floods, hurricane-force winds, wildfires, winter storms, and earth
movement in variable, steep and rugged terrain and terrain with varied or changing subsurface conditions, and chronic physical
risks, such as sea-level rise or water shortages. For example, in 2021, our Galveston Bay refinery was adversely affected by
Winter Storm Uri and our Garyville refinery was adversely affected by Hurricane Ida. The occurrence of these and similar events
have had, and may in the future have, an adverse effect on our assets and operations. 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.
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We are subject to risks arising from our operations outside the United States and generally to worldwide political and
economic developments.
We operate and sell some of our products and procure some feedstocks outside the United States. 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, supply chain disruptions, duties and tariffs, transportation delays,
difficulty in enforcing contractual provisions, import and export controls, changes in governmental policies, political and social
unrest, security issues involving key personnel and changing regulatory and political environments. Future outbreaks of
infectious diseases or pandemics could affect demand for refined products and economic conditions generally. In addition, the
deterioration of trade relationships, modification or termination of existing trade agreements, imposition of new economic
sanctions against Russia or other countries and the effects of potential responsive countermeasures, or increased taxes, border
adjustments or tariffs can make international business operations more costly, which can 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. 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, Russia or elsewhere or the occurrence or threat
of future terrorist attacks could adversely affect the economies of the U.S. and other countries. Lower levels of economic activity
often result in a decline in energy consumption, which may 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 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 or revoke or refuse to grant necessary permits.
Our investments in joint ventures could be adversely affected by our reliance on our joint venture partners and their
financial condition, and our joint venture partners may have interests or goals that are inconsistent with ours.
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 an 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 reputation,
business, financial condition, results of operations and cash flows.
Terrorist attacks or other targeted operational disruptions may affect our facilities or those of our customers and
suppliers.
Refining, gathering and processing, pipeline and terminal infrastructure, and other energy assets, may be the subject of terrorist
attacks or other targeted operational disruptions. Any attack or targeted disruption of our operations, those of our customers or, in
some cases, those of other energy industry participants, could have a material and adverse effect on our business. Similarly, any
similar event that severely disrupts the markets we serve could materially and adversely affect our results of operations, financial
position and cash flows.
Financial Risks
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 or downgrade of our credit ratings, a decrease in debt capacity
or unsecured commercial credit available to us, or by factors adversely affecting credit markets generally.
At December 31, 2023, our total debt obligations for borrowed money and finance lease obligations were $27.62 billion, including
$20.71 billion of obligations of MPLX and its subsidiaries. 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:
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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
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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 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.
Significant variations in the market prices of crude oil and refined products can affect our financial performance.
Significant variations in the market prices of products held in our inventories could have a negative or positive effect on our
financial performance. In addition, a sustained period of low crude oil prices may also result in significant financial constraints on
certain producers from which we acquire our crude oil, which could result in long term crude oil supply constraints for our
business. Such conditions could also result in an increased risk that our customers and other counterparties may be unable to
fully fulfill their obligations in a timely manner, or at all.
A continued period of economic slowdown or recession, or a protracted period of depressed prices for crude oil or refined
petroleum products, could have significant and adverse consequences for our financial condition and the financial condition of
our customers, suppliers and other counterparties, and could diminish our liquidity, trigger additional impairments and negatively
affect our ability to obtain adequate crude oil volumes and to market certain of our products at favorable prices, or at all.
Our working capital, cash flows and liquidity can be significantly affected by decreases in commodity prices.
Payment terms for our crude oil purchases are generally longer than the terms we extend to our customers for refined product
sales. As a result, the payables for our crude oil purchases are proportionally larger than the receivables for our refined product
sales. Due to this net payables position, a decrease in commodity prices generally results in a use of working capital, and given
the significant volume of crude oil that we purchase the impact can materially affect our working capital, cash flows and liquidity.
Increases in interest rates could adversely impact our share price, our ability to issue equity or incur debt for
acquisitions or other purposes and our ability to make dividends at our intended levels.
Our revolving credit facility has a variable interest rate. As a result, future interest rates on our debt could be higher than current
levels, causing our financing costs to increase accordingly. In addition, we may in the future refinance outstanding borrowings
under our revolving credit facility with fixed-rate indebtedness. Interest rates payable on fixed-rate indebtedness typically are
higher than the short-term variable interest rates that we pay on borrowings under our revolving credit facility. We also have other
fixed-rate indebtedness that we may need or desire to refinance in the future at or prior to the applicable stated maturity. A rising
interest rate environment could have an adverse impact on our share price and our ability to issue equity or incur debt for
acquisitions or other purposes and to make dividends at our intended levels.
We may incur losses and additional costs as a result of our forward-contract activities and derivative transactions.
We currently use commodity derivative instruments, and we expect to continue their use in the future. If the instruments we use
to hedge our exposure to various types of risk are not effective, we may incur losses. Derivative transactions involve the risk that
counterparties may be unable to satisfy their obligations to us. The risk of counterparty default is heightened in a poor economic
environment. In addition, we may be required to incur additional costs in connection with future regulation of derivative
instruments to the extent it is applicable to us.
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 such as explosions, fires, refinery or pipeline releases,
cybersecurity breaches or other incidents involving our assets or operations can reduce the funds available to us for capital and
investment spending and could have a material adverse effect on our business, financial condition, results of operations and
cash flows. Historically, we also have maintained insurance coverage for physical damage and resulting business interruption to
our major facilities, with significant self-insured retentions. In the future, we may not be able to maintain insurance of the types
and amounts we desire at reasonable rates.
We have recorded goodwill and other intangible assets that could become further impaired and result in material non-
cash charges to our results of operations.
We accounted for certain 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.
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As of December 31, 2023, our balance sheet reflected $8.2 billion and $1.8 billion of goodwill and other intangible assets,
respectively. We have in the past recorded significant impairments of our goodwill. To the extent the value of goodwill or
intangible assets becomes further impaired, we may be required to incur additional 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.
Large capital projects can be subject to delays, take years to complete, and market conditions could deteriorate
significantly between the project approval date and the project startup date, negatively impacting project returns.
We have several large capital projects underway, including efficiency and modernization improvements at our Los Angeles
Refinery and a Distillate Hydrotreater project at our Galveston Bay Refinery. Delays in completing capital projects or 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:
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denials of, delays in receiving, or revocations of requisite regulatory approvals or permits;
unplanned increases in the cost of construction materials or labor, whether due to inflation or other factors;
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;
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global supply chain disruptions;
nonperformance by, or disputes with, vendors, suppliers, contractors or subcontractors; and
delays due to citizen, state or local political or activist pressure.
Moreover, 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 may not receive any material increases
in revenues until after completion of the project, if at all.
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 capital project returns and our business, financial condition, results of operations and cash flows.
Legal and Regulatory Risks
We expect to continue to incur substantial capital expenditures and operating costs to meet the requirements of
evolving environmental or other laws or regulations. Future environmental laws and regulations may impact our current
business plans and reduce demand for our products and services.
Our business is subject to numerous environmental laws and regulations. These laws and regulations continue to increase in
both number and complexity and affect our business. Laws and regulations expected to become more stringent relate to the
following:
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the emission or discharge of materials into the environment;
solid and hazardous waste management;
the regulatory classification of materials currently or formerly used in our business;
pollution prevention;
climate change and GHG emissions;
characteristics and composition of transportation fuels, including the quantity of renewable fuels that must be blended
into transportation fuels;
public and employee safety and health;
permitting;
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, production processes and subsequent
judicial interpretation of such laws and regulations. We have incurred and will continue to incur substantial capital, operating and
maintenance, and remediation expenditures to modify operations, install pollution control equipment, perform site cleanups or
curtail operations. We have incurred and may in the future incur liability for personal injury, property damage, natural resource
damage or clean-up costs due to alleged contamination and/or exposure to chemicals such as benzene and MTBE. There is also
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increased regulatory interest in PFAS, which we expect will lead to increased monitoring and remediation obligations and
potential liability related thereto. Such expenditures could materially and adversely affect our business, financial condition, results
of operations and cash flows.
The tax treatment of publicly traded partnerships or an investment in MPLX units could be subject to potential
legislative, judicial or administrative changes and differing interpretations, possibly on a retroactive basis.
The present U.S. federal income tax treatment of publicly traded partnerships, including MPLX, or an investment in MPLX
common units may be modified by administrative, legislative or judicial interpretation at any time. From time to time, the
President and members of the U.S. Congress propose and consider substantive changes to the existing U.S. federal income tax
laws that would affect publicly traded partnerships, including proposals that would eliminate MPLX’s ability to qualify for
partnership tax treatment.
We are unable to predict whether any such changes will ultimately be enacted. Any modification to the U.S. federal income tax
laws and interpretations thereof may or may not be applied retroactively and could make it more difficult or impossible for MPLX
to meet the exception for certain publicly traded partnerships to be treated as partnerships for U.S. federal income tax purposes
or increase the amount of taxes payable by unitholders in publicly traded partnerships.
Climate change and GHG emission regulation could affect our operations, energy consumption patterns and regulatory
obligations, any of which could adversely impact our results of operations and financial condition.
Currently, multiple legislative and regulatory measures to address GHG (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 GHG or other emissions, establish a
carbon tax and decrease the demand for 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, California and Washington have enacted cap-and-trade programs. 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.
Certain municipalities have also proposed or enacted restrictions on the installation of natural gas appliances and infrastructure
in new residential or commercial construction, which could affect demand for the natural gas that MPLX transports and stores.
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 and carbon intensity have also resulted in societal concerns and a
number of international and national measures to limit GHG emissions. Additional stricter measures and investor pressure 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. In the United States, an Executive Order issued on January 27, 2021, announced putting the U.S. on a path to
achieve net-zero carbon emissions, economy-wide, by 2050. The Executive Order also calls for the federal government to pause
oil and gas leasing on federal lands and reduce methane emissions from the oil and gas sector as quickly as possible, and
requires federal permitting decisions to consider the effects of GHG emissions and climate change. In December 2023, EPA
completed one provision of the order by promulgating a final rule to reduce methane and volatile organic compounds from oil and
gas operations. Concurrently, EPA significantly increased the social cost of greenhouse gases. A higher social cost of
greenhouse gases could support more stringent GHG emission regulation.
The scope and magnitude of the changes to U.S. climate change strategy under the current and future administrations, however,
remain subject to the passage of legislation and interpretation and action of federal and state regulatory bodies; therefore, the
impact to our industry and operations due to GHG regulation is unknown at this time.
Energy companies are subject to increasing environmental and climate-related litigation.
Governmental and other entities in various U.S. states have filed lawsuits against various energy companies, including us,
alleging damages as a result of climate change, false statements about climate change, and violations of various consumer
protection statutes. The plaintiffs are seeking unspecified damages and abatement under various tort theories. Governments and
private parties may continue to file lawsuits or initiate regulatory action based on allegations that certain public statements
regarding climate change and other ESG related matters and practices by companies are false and misleading “greenwashing”
that violate deceptive trade practices and consumer protection statutes, presenting a high degree of uncertainty regarding the
extent to which energy companies face an increased risk of liability stemming from climate change or ESG disclosures and
practices.
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Attorneys general and other government officials may continue to pursue litigation in which they seek to recover civil damages
against us 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. Additionally, private plaintiffs and government parties have undertaken efforts to shut down
energy assets by challenging operating permits, the validity of easements or the compliance with easement conditions. For
example, the Dakota Access Pipeline, in which MPLX has a minority interest, has been subject to, and may in the future be
subject to, litigation seeking a permanent shutdown of the pipeline. There remains a high degree of uncertainty regarding the
ultimate outcome of these types of proceedings, as well as their potential effect on our business, financial condition, results of
operation and cash flows.
We are subject to risks associated with societal and political pressures and other forms of opposition to the
development, transportation and use of carbon-based fuels. Such risks could adversely impact our business and our
ability to continue to operate or realize certain growth strategies.
We operate and develop our business with the expectation that regulations and societal sentiment will continue to enable the
development, transportation and use of carbon-based fuels. However, policy decisions relating to the production, refining,
transportation, storage and marketing of carbon-based fuels are subject to political pressures and the influence of public
sentiment on GHG emissions, climate change, and climate adaptation. Additionally, societal sentiment regarding carbon-based
fuels may adversely impact our reputation and ability to attract and retain employees.
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 GHG
emissions downstream of pipeline operations. Our expansion or construction projects may not be completed on schedule (or at
all), or at the budgeted cost. We also may be required to incur additional costs and expenses in connection with the design and
installation of our facilities due to their location and the surrounding terrain. We may be required to install additional facilities,
incur additional capital and operating expenditures, or experience interruptions in or impairments of our operations to the extent
that the facilities are not designed or installed correctly.
Increasing attention to environmental, social and governance matters may impact our business and financial results.
In recent years, increasing attention has been given to corporate activities related to ESG matters in public discourse and the
investment community, including climate change, energy transition matters, and diversity, equity and inclusion. A number of
advocacy groups, both domestically and internationally, have campaigned for governmental and private action to promote ESG-
related change at public companies, including, but not limited to, through the investment and voting practices of investment
advisers, pension funds, universities and other members of the investing community. These activities include increasing attention
and demands for action related to climate change and energy transition matters, such as promoting the use of substitutes to
fossil fuel products and encouraging the divestment of fossil fuel equities, as well as pressuring lenders and other financial
services companies to limit or curtail activities with fossil fuel companies. If this were to continue, it could have a material adverse
effect on our access to capital. Members of the investment community have begun to screen companies such as ours for
sustainability performance, including practices related to GHG emission reduction and energy transition strategies. If we are
unable to find economically viable, as well as publicly acceptable, solutions that reduce our GHG emissions, reduce GHG
intensity for new and existing projects, increase our non-fossil fuel product portfolio, and/or address other ESG-related
stakeholder concerns, our business and results of operations could be materially and adversely affected. Further, our reputation
could be damaged as a result of our support of, association with or lack of support or disapproval of certain social causes, as
well as any decisions we make to continue to conduct, or change, certain of our activities in response to such considerations.
Our goals, targets and disclosures related to ESG matters expose us to numerous risks, including risks to our
reputation and stock price.
Companies across all industries are facing increasing scrutiny from stakeholders related to ESG matters, including practices and
disclosures regarding climate-related initiatives. In 2022, MPC established a target to reduce GHG emissions and MPLX
established a target to reduce methane emissions intensity. These targets reflect our current plans and aspirations and are not
guarantees that we will be able to achieve them. We assess progress with these targets on an annual basis. We may modify,
discontinue, update or expand targets or adopt new metrics as new information, opportunities, and technologies become
available. Further, there are conflicting expectations and priorities from regulatory authorities, investors, voluntary reporting frame
works, and other stakeholders surrounding accounting and disclosure of ESG matters and climate related initiatives. Our efforts
to accomplish and accurately report on these goals and objectives, which may be, in part, dependent on the actions of suppliers
and other third parties, present numerous operational, regulatory, reputational, financial, legal, and other risks, any of which
could have a material negative impact, including on our reputation and stock price.
Efforts to achieve goals and targets, such as the foregoing and future internal climate-related initiatives, may increase costs,
require purchase of carbon credits, or limit or impact our business plans and financial results, potentially resulting in the reduction
to the economic end-of-life of certain assets and an impairment of the associated net book value, among other material adverse
impacts. Additionally, as the nature, scope and complexity of ESG reporting, calculation methodologies, voluntary reporting
standards and disclosure requirements expand, including the SEC’s proposed disclosure requirements regarding, among other
matters, GHG emissions, we may have to undertake additional costs to control, assess and report on ESG metrics. Our failure or
perceived failure to pursue or fulfill such goals and targets or to satisfy various reporting standards within the timelines we
announce, or at all, could have a negative impact on investor sentiment, ratings outcomes for evaluating our approach to ESG
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matters, stock price, and cost of capital and expose us to government enforcement actions and private litigation, among other
material adverse impacts.
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.
If California or other jurisdictions (i) establish a maximum refining margin and impose a financial penalty for profits
above such maximum refining margin or (ii) impose restrictions on turnaround and maintenance activities, our financial
results and profitability could be adversely affected.
In June 2023, the provisions of California’s Senate Bill No. 2 (such statute, together with any regulations contemplated or issued
thereunder, “SBx 1-2”) became effective, which, among other things, (i) authorized the establishment of a maximum gross
gasoline refining margin and the imposition of a financial penalty for profits above a maximum gross gasoline refining margin,
(ii) significantly expanded the reporting obligations (e.g., daily, weekly, monthly, and annually reporting of detailed operational and
financial data on all aspects of our operations in California) to the California Energy Commission (“CEC”) for all participants in the
petroleum industry supply chain in California, (iii) created the Division of Petroleum Market Oversight within the CEC to analyze
the data provided under SBx 1-2, and (iv) authorized the CEC to regulate the timing and other aspects of refinery turnaround and
maintenance activities in certain instances. The operational data reporting includes our plans for turnaround and maintenance
activities at our Los Angeles refinery and Martinez renewable fuels facility and our plans to address potential impacts on
feedstock and product inventories in California resulting from such turnaround and maintenance activities.
In late 2023, the CEC adopted (i) an order requiring an informational proceeding on a maximum gross gasoline refining margin
and penalty under SBx 1-2, and (ii) an order initiating rulemaking activity under SBx 1-2 that will be focused on refinery
maintenance and turnarounds.
To the extent that the CEC establishes a maximum gross gasoline refining margin and imposes a financial penalty for profits
above such maximum gross gasoline refining margin, our financial results and profitability could be adversely affected. Our
results of operations, financial performance and safety and maintenance efforts could also be adversely impacted to the extent
that restrictions on turnaround and maintenance activities are imposed by the CEC. We cannot reasonably predict the impact
that full implementation of SBx 1-2 will have on our California operations or our company nor can we predict the impact from
similarly focused legislation or actions in other jurisdictions in which we operate our refineries. The recently adopted legislation in
California, and the future enactment of similar legislation in any of the other jurisdictions, could adversely impact our business,
financial condition, results of operations and cash flows.
Increased regulation of hydraulic fracturing and other oil and gas production activities could result in reductions or
delays in U.S. production of crude oil and natural gas, which could adversely affect our results of operations and
financial condition.
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. Our refineries are also
supplied in part with crude oil produced from unconventional oil shale reservoirs. A range of federal, state and local laws and
regulations currently govern or, in some cases, prohibit, hydraulic fracturing in some jurisdictions. Stricter laws, regulations and
permitting processes may be enacted in the future. If federal, state and local legislation and regulatory initiatives relating to
hydraulic fracturing or other oil and gas production activities are enacted or expanded, such efforts could impede oil and gas
production, increase producers’ cost of compliance, and result in reduced volumes available for our midstream assets to gather,
process and fractionate.
Historic or current operations could subject us to significant legal liability or restrict our ability to operate.
We currently are defending litigation and anticipate we will be required to defend new litigation in the future. Our operations,
including those of MPLX, and those of our predecessors could expose us to litigation and civil claims by private plaintiffs for
alleged damages related to contamination of the environment or personal injuries caused by releases of hazardous substances
from our facilities, products liability, consumer credit or privacy laws, product pricing or antitrust laws or any other laws or
regulations that apply to our operations. While an adverse outcome in most litigation matters would not be expected to be
material to us, in class-action litigation, large classes of plaintiffs may allege damages relating to extended periods of time or
other alleged facts and circumstances that could increase the amount of potential damages. Attorneys general and other
government officials have in the past and may in the future pursue litigation in which they seek to recover civil damages from
26
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. 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. In
addition to substantial liability, plaintiffs in litigation may also seek injunctive relief which, if imposed, could have a material
adverse effect on our future business, financial condition, results of operations and cash flows.
A portion of our workforce is unionized, and we may face labor disruptions that could materially and adversely affect
our business, financial condition, results of operations and cash flows.
Approximately 3,800 of our employees are covered by collective bargaining agreements with expiration dates ranging from 2024
to 2027. These agreements 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
2024, there are two collective bargaining agreements, one expired on January 31 and the other will expire on April 7. These two
agreements cover approximately 500 employees in refining. The parties to the expired agreement continue operating under the
relevant terms of the expired agreement while negotiating a successor agreement. In the event of a work stoppage impacting
operations, we have a contingency plan in place to continue operations.
In addition, some states in which we operate require refinery owners to pay prevailing wages to contract craft workers and
restrict 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 workers become joint employees, which could
trigger bargaining issues, and wage and benefit consequences, especially during critical maintenance and construction periods.
One of our subsidiaries acts as the general partner of a master limited partnership, which may expose us to certain
legal liabilities.
One of our subsidiaries acts as the general partner of MPLX, a master limited partnership. Our control of the general partner of
MPLX may increase the possibility of claims of breach of fiduciary duties, including claims of conflicts of interest. 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, we could be prohibited from operating vessels engaged in
U.S. coastwise trade, which could adversely affect our business, financial condition, results of operations and cash
flows.
The Shipping Act of 1916 and Merchant Marine Act of 1920 (together, 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, we
would be prohibited from operating vessels in the U.S. inland waters or otherwise in U.S. coastwise trade. Such a prohibition
could materially and adversely affect our business, financial condition, results of operations and cash flows.
Our operations could be disrupted if we are unable to maintain or obtain real property rights required for our business.
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, terminate or are reduced or it is determined that we do not have valid
leases, rights-of-way or other property rights. For example, a portion of the Tesoro High Plains pipeline in North Dakota remains
shut down following delays in renewing a right-of-way necessary for the operation of a section of the pipeline. Any loss of or
reduction in our real property rights, including loss or reduction due to legal, governmental or other actions or difficulty renewing
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.
Certain of our facilities are located on Native American tribal lands and are subject to various federal and tribal
approvals and regulations, which can increase our costs and delay or prevent our efforts to conduct operations.
Various federal agencies within the U.S. Department of the Interior, particularly the Bureau of Indian Affairs, along with each
Native American tribe, regulate natural gas and oil operations on Native American tribal lands. In addition, each Native American
tribe is a sovereign nation having the right to enforce laws and regulations and to grant approvals independent from federal, state
and local statutes and regulations. These tribal laws and regulations include various taxes, fees, requirements to employ Native
American tribal members and other conditions that apply to operators and contractors conducting operations on Native American
tribal lands. Persons conducting operations on tribal lands are generally subject to the Native American tribal court system. In
addition, if our relationships with any of the relevant Native American tribes were to deteriorate, we could face significant risks to
our ability to continue operations on Native American tribal lands. One or more of these factors has in the past and may in the
future increase our cost of doing business on Native American tribal lands and impact the viability of, or prevent or delay our
ability to conduct operations on such lands. For example, we are subject to ongoing litigation regarding trespass claims relating
to a portion of the Tesoro High Plains pipeline in North Dakota.
27
The Court of Chancery of the State of Delaware will be, to the extent permitted by law, the sole and exclusive forum for
most disputes between us and our shareholders.
Our Restated Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative forum, the
Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have subject matter jurisdiction, the federal
district court for the District of Delaware) will be the sole and exclusive forum for:
•
•
•
•
any derivative action or proceeding brought on behalf of MPC;
any action asserting a claim of breach of a fiduciary duty owed by any director or officer of MPC to MPC or its
stockholders;
any action asserting a claim against MPC arising pursuant to any provision of the General Corporation Law of the State
of Delaware, MPC’s Restated Certificate of Incorporation, any Preferred Stock Designation or the Bylaws of MPC; or
any other action asserting a claim against MPC or any Director or officer of MPC that is governed by or subject to the
internal affairs doctrine for choice of law purposes.
The exclusive forum provision does not apply to suits brought to enforce any liability or duty created by the Exchange Act or any
other claim for which the federal courts have exclusive jurisdiction. Our Restated Certificate of Incorporation also provides that,
unless we consent in writing to the selection of an alternative forum, the U.S. federal district courts shall be, to the fullest extent
permitted by law, the exclusive forum any action asserting a claim under the Securities Act.
The forum selection provision may restrict a stockholder’s ability to bring a claim against us or directors or officers of MPC in a
forum that it finds favorable, which may discourage stockholders from bringing such claims at all. Alternatively, if a court were to
find the forum selection provision contained in our Restated Certificate of Incorporation to be inapplicable or unenforceable in an
action, we may incur additional costs associated with resolving such action in another forum, which could materially adversely
affect our business, financial condition and results of operations.
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:
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•
•
•
•
•
•
•
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.
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, participating, optional and other
special rights, including preferences over our common stock respecting 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
28
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.
General Risk Factors
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.
Future acquisitions will involve the integration of new assets or businesses and may present substantial risks that
could adversely affect our business, financial conditions, results of operations and cash flows.
Future transactions involving the addition of new assets or businesses will present risks, which may include, among others:
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•
inaccurate assumptions about future synergies, revenues, capital expenditures and operating costs;
an inability to successfully integrate, or a delay in the successful integration of, 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;
the loss of customers or key employees from the acquired business; and
the incurrence of other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation
or restructuring charges.
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, state and local income taxes in the United States and in foreign
jurisdictions, and, transactional, payroll, franchise, withholding and property taxes. New tax laws and regulations and changes in,
interpretations of, and guidance regarding tax laws and regulations, including impacts of the Tax Cuts and Jobs Act of 2017, the
Coronavirus Aid, Relief, Economic Security Act of 2020, and the Inflation Reduction Act of 2022, 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.
In addition, we are subject to the examination of our returns by taxing authorities. We regularly assess the likelihood of adverse
outcomes resulting from such examinations to determine the adequacy of our provision for income taxes. Although we believe
we have made appropriate provisions for taxes in the jurisdictions in which we operate, changes in the tax laws or challenges
from tax authorities under existing tax laws could adversely affect our business, financial condition and results of operations and
could subject us to interest and penalties.
Item 1B. Unresolved Staff Comments
None
Item 1C. Cybersecurity
Risk Management and Strategy
We have processes in place designed to protect our information systems, data, assets, infrastructure and computing
environments from cybersecurity threats and risks while maintaining confidentiality, integrity and availability. These enterprise-
wide processes are based upon policies, practices and standards that guide us on identifying, assessing and managing material
cybersecurity risks and include, but are not limited to:
29
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•
•
•
placing security limits on physical and network access to our information technology (“IT”) and operating technology
(“OT”) systems;
employing internal IT and OT controls designed to detect cybersecurity threats by collecting and analyzing data in our
centralized cybersecurity operations center;
utilizing layers of defensive methodologies designed to facilitate cyber resilience, minimize attack surfaces and provide
flexibility and scalability in our ability to address cybersecurity risks and threats;
providing cybersecurity threat and awareness training to employees and contractors;
limiting remote network access to our IT and OT network environments; and
assessing our cybersecurity resiliency through various methods, including penetration testing, tabletop exercises with
varying scenarios and participants ranging from individuals on our operations teams to executive leadership, and
analyzing our corporate cybersecurity incident response plan.
We apply an enterprise risk management (“ERM”) methodology as established and led by our executive leadership team to
identify, assess and manage enterprise-level risks. Our cybersecurity risk program directly integrates and is intended to align with
our governing ERM program.
We engage with external resources to contribute to and provide independent evaluation of our cybersecurity practices, including
a periodical assessment of our cybersecurity program performed by a third party. Our cybersecurity leadership and operational
teams monitor cybersecurity threat intelligence and applicable cybersecurity regulatory requirements in a variety of ways,
including by communicating with federal agencies, trade associations, service providers, and other miscellaneous third-party
resources. Our management team through consultation with our Senior Vice President and Chief Digital Officer (“CDO”), Vice
President and Chief Information Security Officer (“CISO”) and the Audit Committee of our Board use the information gathered
from these sources to inform long-term cybersecurity investments and strategies which seek to identify, protect, detect, respond
and recover from cybersecurity incidents.
We manage third-party service provider cybersecurity risks through contract management, evaluation of applicable security
control assessments, and third party risk assessment processes.
As of February 28, 2024, we do not believe that any past cybersecurity incidents have had, or are reasonably likely to have, a
material adverse effect on the company, including our business, operations or financial condition. However, there can be no
assurance that our cybersecurity processes will prevent or mitigate cybersecurity incidents or threats and that efforts will always
be successful. It is possible that these events may occur and could have a material adverse effect on our business, operations or
financial condition. See “Business and Operational Risks--We are increasingly dependent on the performance of our information
technology systems and those of our third-party business partners and service providers” in Item 1A. Risk Factors of this Annual
Report on Form 10-K.
Governance
Our full Board of Directors oversees enterprise-level risks and has delegated to the Audit Committee of our Board oversight of
risks from cybersecurity threats as informed through the ERM program. Our CDO and CISO are standing members of the ERM
committee, comprised of members of senior management, and as part of the committee, report on and evaluate cybersecurity
threats and risk management efforts, as communicated to them by way of their direct reports and the larger cybersecurity team.
The CDO and CISO provides regular cybersecurity briefings to the Board of Directors and the Audit Committee as needed, with a
minimum of two briefings per year. The Audit Committee further reviews and provides input on our cybersecurity and information
security strategy.
Our CISO is responsible for the cybersecurity program which is comprised of Cybersecurity GRC (Governance, Risk &
Compliance), Cybersecurity Architecture, Operations & Engineering, and a Cyber Fusion Center that includes Threat
Intelligence, Vulnerability Management, & Incident Response. Our CISO has 30 years of experience in the oil and gas industry
and has held various leadership and strategic roles across IT, software R&D and marketing.
Our CISO works at the direction of the CDO, who has more than 20 years of executive IT leadership experience and leads the
company’s Digital and Information Technology functions that seek to provide innovative, secure, and reliable technology products
and services to MPC and its customers.
30
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, 2023.
Refining throughput can exceed crude oil refining 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
Subtotal Mid-Continent region
West Coast Region
Los Angeles, California
Anacortes, Washington
Kenai, Alaska
Subtotal West Coast region
Total
Crude Oil Refining
Capacity (mbpcd)
631
597
1,228
300
253
140
133
105
100
71
68
1,170
365
119
68
552
2,950
The Dickinson, North Dakota, renewable fuels facility has the capacity to produce 184 million gallons per year of renewable
diesel from corn oil, soybean oil, fats and greases. The design capacity of the Martinez facility, a renewable diesel facility, is up to
730 million gallons per year. The Dickinson facility is included within the Mid-Continent region and the Martinez facility is included
within the West Coast region.
31
The following table sets forth the approximate number of locations where jobbers maintain branded outlets, marketing fuels
under the Marathon, ARCO, Shell, Mobil, Tesoro and other brands, as of December 31, 2023.
Location
Alabama
Alaska
Arizona
California
Colorado
District of Columbia
Florida
Georgia
Idaho
Illinois
Indiana
Iowa
Kentucky
Louisiana
Maryland
Massachusetts
Mexico
Michigan
Minnesota
Mississippi
Missouri
Nevada
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Total
Number of
Branded Outlets
400
48
78
111
12
2
622
414
106
165
654
4
492
62
61
1
269
720
297
133
4
18
4
40
74
220
120
841
43
83
3
104
32
385
12
109
199
106
113
52
4
7,217
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The Refining & Marketing segment sells transportation fuels through long-term fuel supply contracts to direct dealer locations,
primarily under the ARCO brand. The following table sets forth the number of direct dealer locations by state as of December 31,
2023.
Location
Arizona
California
Nevada
New Mexico
Total
Number of
Locations
68
952
93
1
1,114
The following table sets forth details about our Refining & Marketing owned and operated terminals as of December 31, 2023.
See the Midstream - MPLX section for information with respect to MPLX owned and operated terminals.
Owned and Operated Terminals
Light Products Terminals:
Alaska
New York
Subtotal light products terminals
Asphalt Terminals:
Florida
Indiana
Kentucky
Louisiana
Michigan
New York
Ohio
Pennsylvania
Tennessee
Subtotal asphalt terminals
Total owned and operated terminals
Number of
Terminals
Tank Storage Capacity
(thousand barrels)
1
1
2
1
1
4
1
1
1
4
1
2
16
18
231
334
565
263
121
549
54
12
417
2,207
451
480
4,554
5,119
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MIDSTREAM - MPLX
The following table sets forth certain information relating to MPLX’s crude oil and refined products pipeline systems and storage
assets as of December 31, 2023.
Pipeline System or Storage Asset
Total crude oil pipeline systems(a)(b)
Total refined products pipeline systems(a)(b)(c)
Diameter
(inches)
2" - 42"
4" - 36"
Length
(miles)
5,159
3,788
Barge Docks (mbpd)
Storage assets: (mbbls)
Refining Logistics(d)
Tank Farms
Caverns
Capacity
Various
Various
4,859
92,719
33,452
3,632
(a)
(b)
(c)
Includes approximately 16 miles of crude oil pipeline and 2 miles of refined product pipeline leased from third parties.
Includes approximately 1,192 miles of inactive crude oil pipeline and 201 miles of inactive refined product pipeline.
Includes approximately 87 miles and 17 miles of refined product pipelines in which MPLX has partial ownership of 65% and 50%,
respectively.
(d) Refining logistics assets primarily include tankage. MPC formed the Martinez Renewables joint venture and began producing renewable
diesel at the Martinez facility in 2023. MPLX owns refining logistics assets with 5,977 mbbls of storage capacity associated with the facility
and has entered into terminalling and storage service agreements with the joint venture and its partners to provide logistics services for the
facility.
The following table sets forth information regarding the pipeline systems which MPLX has an interest in through ownership of its
equity method investments as of December 31, 2023.
Crude Oil Systems:
MarEn Bakken Company LLC(a)
Minnesota Pipe Line Company LLC
Wink to Webster Holdings LLC(b)
Illinois Extension Pipeline Company LLC
Andeavor Logistics Rio Pipeline LLC
LOCAP LLC
LOOP LLC
Refined Product Systems:
Explorer Pipeline Company
Natural Gas and NGL Systems:
Whistler Pipeline LLC(c)
BANGL LLC(d)
Diameter
(inches)
Length
(miles)
Ownership
Percentage
30"
16" - 24"
24" - 36"
24"
12"
48"
48"
1,916
975
652
168
119
57
48
10" - 28"
1,872
36" - 42"
12" - 24"
498
109
25 %
17 %
50 %
35 %
67 %
59 %
41 %
25 %
38 %
25 %
(a) The investment in MarEn Bakken Company LLC includes MPLX’s 9.19 percent indirect interest in a joint venture that owns and operates the
Dakota Access Pipeline and Energy Transfer Crude Oil Pipeline projects (collectively referred to as the “Bakken Pipeline system”).
(b) The investment in W2W Holdings LLC includes MPLX’s 15 percent indirect interest in a joint venture that has partial ownership of the Wink
to Webster pipeline system.
(c) Whistler Pipeline LLC also owns a 50 percent interest in a joint venture owning primarily natural gas storage facilities.
(d) BANGL LLC also owns a 42 percent interest in a 323 mile NGL pipeline.
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The following table sets forth details about MPLX owned and operated terminals as of December 31, 2023. Additionally, MPLX
has partial ownership interest in one terminal.
Number of
Terminals
Tank Storage Capacity
(mbbls)
Owned and Operated Terminals
Refined Products Terminals:
Alabama
Alaska
California
Florida
Georgia
Idaho
Illinois
Indiana
Kentucky
Louisiana
Michigan
Minnesota
New Mexico
North Carolina
North Dakota
Ohio
Pennsylvania
South Carolina
Tennessee
Texas
Utah
Washington
West Virginia
Subtotal light products terminals
Asphalt Terminals
Arizona
Minnesota
Nevada(a)
New Mexico
Texas
Subtotal asphalt terminals
2
3
8
3
4
3
2
7
6
2
8
1
2
3
1
12
1
1
4
1
1
4
2
81
3
1
1
1
1
7
88
443
1,540
3,484
2,265
982
999
562
3,770
2,587
5,469
2,440
13
470
1,343
—
3,144
390
371
1,149
76
21
920
1,564
34,002
556
—
283
38
197
1,074
35,076
Total owned and operated terminals
(a) MPLX accounts for this terminal as an equity method investment.
The following table sets forth details about MPLX barges and towboats as of December 31, 2023.
Class of Equipment
Inland tank barges
Inland towboats
Number
in Class
Capacity
(mbbls)
305
29
8,123
N/A
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The following tables set forth certain information relating to MPLX’s consolidated and operated joint venture gas processing
facilities, fractionation facilities, natural gas gathering systems, NGL pipelines and natural gas pipelines as of and for the year
ended December 31, 2023.
Gas Processing Complexes
Marcellus Operations
Utica Operations
Southern Appalachia Operations
Southwest Operations(b)
Bakken Operations(c)
Rockies Operations
Total
Design
Throughput
Capacity
(MMcf/d)
Natural Gas
Throughput
(MMcf/d)(a)
Utilization
of Design
Capacity(a)
6,320
1,325
495
2,545
185
1,177
12,047
5,773
564
216
1,772
163
483
8,971
91 %
43 %
44 %
70 %
88 %
41 %
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)
(c)
The capacity presented above includes MPLX’s proportionate share of Centrahoma Processing LLC’s processing capacity of 550 MMcf/d,
as MPLX owns a non-operating 40 percent interest in this joint venture. Actual throughput of 159 MMcf/d representing MPLX’s share of
processed volumes is also included and used to compute the utilization presented above.
Includes volumes processed at third-party facilities in the Bakken.
Fractionation & Condensate Stabilization Facilities
Marcellus Operations
Utica Operations(b)
Southern Appalachia Operations
Bakken Operations
Rockies Operations
Total
Design
Throughput
Capacity
(mbpd)
NGL
Throughput
(mbpd)(a)
Utilization
of Design
Capacity(a)
413
—
24
33
5
475
323
—
11
20
3
357
78 %
— %
46 %
61 %
60 %
75 %
(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 operates a condensate stabilization facility with a capacity of 23 mbpd and 77 thousand barrels of condensate storage that is owned
by a joint venture in which it has a 62 percent ownership interest. Actual NGL throughput at this facility was 13 mbpd for the year ended
December 31, 2023.
De-ethanization Facilities
Marcellus Operations
Utica Operations
Rockies Operations
Total
Design
Throughput
Capacity
(mbpd)
309
40
5
354
NGL
Throughput
(mbpd)(a)
Utilization
of Design
Capacity(a)
233
7
—
240
75 %
18 %
— %
68 %
(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.
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Natural Gas Gathering Systems
Marcellus Operations
Utica Operations
Southwest Operations
Bakken Operations
Rockies Operations(b)
Total
Design
Throughput
Capacity
(MMcf/d)
Natural Gas
Throughput
(MMcf/d)(a)
Utilization
of Design
Capacity(a)
1,622
3,183
2,980
239
1,637
9,661
1,389
2,338
1,772
165
593
6,257
88 %
73 %
59 %
69 %
36 %
65 %
(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)
Includes 102 MMcf/d of volumes gathered for third parties by MPLX’s operated joint venture, Rendezvous Gas Services, L.L.C. (“RGS”).
Excludes RGS gathering capacity of 1,032 MMcf/d and volumes gathered by RGS which generally interconnect with MPLX owned Rockies
region gathering systems.
The following table sets forth certain information relating to MPLX’s NGL pipelines as of December 31, 2023.
NGL Pipelines
Marcellus Operations
Utica Operations
Southern Appalachia Operations
Southwest Operations
Bakken Operations
Rockies Operations
Diameter
(inches)
Length
(miles)
4” - 20”
4” - 20”
6” - 8”
6” - 10"
6” - 12”
4” - "10
448
178
140
28
104
36
MIDSTREAM - MPC-RETAINED ASSETS AND INVESTMENTS
The following table sets forth certain information relating to our crude oil and refined products pipeline systems not owned by
MPLX.
As of December 31, 2023, we had partial ownership interests in the following pipeline companies.
Pipeline Company
Crude oil pipeline companies:
Capline Pipeline Company LLC
Gray Oak Pipeline, LLC
LOOP(a)
Total
Refined products pipeline companies:
Ascension Pipeline Company LLC
Centennial Pipeline LLC(b)
Muskegon Pipeline LLC
Wolverine Pipe Line Company
Total
Diameter
(inches)
Length
(miles)
Ownership
Interest
Operated
by MPL
40”
8” - 30”
48”
12”
24” - 26”
10” - 12”
6” - 18”
644
845
48
1,489
34
793
170
798
1,795
33 %
25 %
10 %
50 %
50 %
60 %
6 %
Yes
No
No
No
Yes
Yes
No
(a)
(b)
Represents interest retained by MPC and excludes MPLX’s 41 percent ownership interest in LOOP. Pipeline mileage is excluded from total
as it is included with MPLX assets.
All system pipeline miles are inactive.
37
The following table sets forth details about our ocean vessels as of December 31, 2023.
Class of Equipment
Jones Act product tankers
750 Series ATB vessels(a)
Number
in Class
Capacity
(mbbls)
4
3
1,320
990
(a)
Represents ownership through our indirect noncontrolling 50 percent interest in Crowley Blue Water Partners.
Item 3. Legal Proceedings
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. 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.
Item 103 of Regulation S-K promulgated by the SEC requires disclosure of certain environmental matters when a governmental
authority is a party to the proceedings and such proceedings involve potential monetary sanctions, unless we reasonably believe
that the matter will result in no monetary sanctions, or in monetary sanctions, exclusive of interest and costs, of less than a
specified threshold. We use a threshold of $1 million for this purpose.
Climate Change Litigation
Governmental and other entities in various states have filed climate-related lawsuits against a number of energy companies,
including MPC. Although each suit is separate and unique, the lawsuits generally allege defendants made knowing
misrepresentations about knowingly concealing, or failing to warn of the impacts of their petroleum products, which led to
increased demand and worsened climate change. Plaintiffs are seeking unspecified damages and abatement under various tort
theories, as well as breaches of consumer protection and unfair trade statutes. Similar lawsuits may be filed in other jurisdictions.
The names of the courts in which the proceedings are pending and the dates instituted are as follows:
Plaintiff
County of San Mateo, California
County of Marin, California
City of Imperial Beach, California
County of Santa Cruz, California
City of Santa Cruz, California
City of Richmond, California
State of Rhode Island
Mayor and City Council of
Baltimore, Maryland
City and County of Honolulu, Hawaii
City of Charleston, South Carolina
State of Delaware
County of Maui, Hawaii
City of Annapolis, Maryland
Date Instituted
July 17, 2017
July 17, 2017
July 17, 2017
December 20, 2017
December 20, 2017
January 22, 2018
July 2, 2018
July 20, 2018
March 9, 2020
September 9, 2020
September 10, 2020
October 12, 2020
February 22, 2021
Anne Arundel County, Maryland
April 26, 2021
County of Multnomah, Oregon
June 22, 2023
Dakota Access Pipeline
Name of Court(s) where pending
California Superior Court of San Mateo County
California Superior Court of Marin County
California Superior Court of Contra Costa County
California Superior Court of Santa Cruz County
California Superior Court of Santa Cruz County
California Superior Court of Contra Costa County
Superior Court of Providence County
Circuit Court of Baltimore County
Circuit Court of the First Circuit (State of Hawaii)
Court of Common Pleas of the 9th Circuit; US Court of
Appeals for the Fourth Circuit
Superior Court of Hudson County
Circuit Court of the Second Circuit (State of Hawaii)
Maryland Circuit Court, Anne Arundel County; US Court of
Appeals for the Fourth Circuit
Maryland Circuit Court, Anne Arundel County; U.S. Court of
Appeals for the Fourth Circuit
U.S. District Court of Oregon
MPLX holds a 9.19 percent indirect interest in a joint venture (“Dakota Access”) which owns and operates the Bakken Pipeline
system. In 2020, the D.D.C. ordered the U.S. Army Corps of Engineers (“Army Corps”), which granted permits and an easement
for the Bakken Pipeline system, to prepare an environmental impact statement (“EIS”) relating to an easement under Lake Oahe
in North Dakota. The D.D.C. later vacated the easement. The Army Corps issued a draft EIS in September 2023 detailing various
options for the easement, including denying the easement, approving the easement with additional measures, rerouting the
easement, or approving the easement with no changes. The Army Corps has not selected a preferred alternative, but will make a
decision in its final review, after considering input from the public and other agencies. The pipeline remains operational while the
Army Corps finalizes its decision which is expected to be issued by the end of 2024.
38
MPLX has entered into a Contingent Equity Contribution Agreement whereby it, along with the other joint venture owners in the
Bakken Pipeline system, has agreed to make equity contributions to the joint venture upon certain events occurring to allow the
entities that own and operate the Bakken Pipeline system to satisfy their senior note payment obligations. The senior notes were
issued to repay amounts owed by the pipeline companies to fund the cost of construction of the Bakken Pipeline system.
If the vacation of the easement results in a temporary shutdown of the pipeline, MPLX would have to contribute its 9.19 percent
pro rata share of funds required to pay interest accruing on the notes and any portion of the principal that matures while the
pipeline is shutdown. MPLX also expects to contribute its 9.19 percent pro rata share of any costs to remediate any deficiencies
to reinstate the easement and/or return the pipeline into operation. If the vacation of the easement results in a permanent
shutdown of the pipeline, MPLX would have to contribute its 9.19 percent pro rata share of the cost to redeem the bonds
(including the one percent redemption premium required pursuant to the indenture governing the notes) and any accrued and
unpaid interest. As of December 31, 2023, our maximum potential undiscounted payments under the Contingent Equity
Contribution Agreement were approximately $170 million.
Tesoro High Plains Pipeline
In July 2020, Tesoro High Plains Pipeline Company, LLC (“THPP”), a subsidiary of MPLX, received a Notification of Trespass
Determination from the Bureau of Indian Affairs (“BIA”) relating to a portion of the Tesoro High Plains Pipeline that crosses the
Fort Berthold Reservation in North Dakota. The notification demanded the immediate cessation of pipeline operations and
assessed trespass damages of approximately $187 million. After subsequent appeal proceedings and in compliance with a new
order issued by the BIA, in December 2020, THPP paid approximately $4 million in assessed trespass damages and ceased use
of the portion of the pipeline that crosses the property at issue. In March 2021, the BIA issued an order purporting to vacate the
BIA's prior orders related to THPP’s alleged trespass and direct the Regional Director of the BIA to reconsider the issue of
THPP’s alleged trespass and issue a new order. In April 2021, THPP filed a lawsuit in the District of North Dakota against the
United States of America, the U.S. Department of the Interior and the BIA (collectively, the “U.S. Government Parties”)
challenging the March 2021 order purporting to vacate all previous orders related to THPP’s alleged trespass. On February 8,
2022, the U.S. Government Parties filed their answer and counterclaims to THPP’s suit claiming THPP is in continued trespass
with respect to the pipeline and seek disgorgement of pipeline profits from June 1, 2013 to present, removal of the pipeline and
remediation. On November 8, 2023, the Court granted THPP’s motion to sever and stay the U.S. Government Parties’
counterclaims. The case will proceed on the merits of THPP’s challenge to the March 2021 order purporting to vacate all
previous orders related to THPP’s alleged trespass. THPP continues not to operate the portion of the pipeline that crosses the
property at issue.
Martinez Refinery
On October 20, 2023, Tesoro Refining & Marketing Company LLC, an indirect wholly owned subsidiary of MPC, received an offer
to settle 59 Notices of Violation (“NOVs”) received from the Bay Area Air Quality Management District. The NOVs were issued for
alleged violations of air quality regulations at our Martinez refinery between June 2018 and May 2022. We cannot currently
estimate the timing of the resolution of this matter but do not believe any civil penalty will have a material impact on our
consolidated results of operations, financial position or cash flows.
Edwardsville Incident
In March 2022, the State of Illinois brought an action in Madison County Circuit Court in Illinois against Marathon Pipe Line LLC,
an indirect wholly owned subsidiary of MPLX, asserting various violations and demanding a permanent injunction and civil
penalties in connection with a release of crude oil on the Wood River to Patoka 22” line near Edwardsville, Illinois. In September
2023, the U.S. Department of Justice and EPA confirmed they will be pursuing federal enforcement for alleged Clean Water Act
violations arising from this incident as well as three pipeline incidents in Illinois and Indiana in 2018, 2020 and 2021. We cannot
currently estimate the amount of any civil penalty or the timing of the resolution of this matter but do not believe any civil penalty
will have a material impact on our consolidated results of operations, financial position or cash flows.
Item 4. Mine Safety Disclosures
Not applicable
39
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 23, 2024, there were
approximately 24,695 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, 2023, of equity securities that
are registered by MPC pursuant to Section 12 of the Securities Exchange Act of 1934, as amended:
Period
10/01/2023-10/31/2023
11/01/2023-11/30/2023
12/01/2023-12/31/2023
Total
Total Number of
Shares
Purchased
Average
Price Paid
per Share(a)
7,137,029
$
5,033,178
4,991,731
17,161,938
147.26
149.18
146.42
147.58
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs
Millions of Dollars
Maximum Dollar Value
of Shares that May Yet
Be Purchased Under
the Plans or
Programs(b)(c)
7,137,029
$
5,033,178
4,991,731
17,161,938
8,266
7,515
6,784
(a)
Amounts in this column reflect the weighted average price paid for shares repurchased under our share repurchase authorizations. The
weighted average price includes any commissions paid to brokers during the relevant period.
(b) On May 2, 2023, we announced that our board of directors had approved a $5.0 billion share repurchase authorization. On October 25,
2023, we announced that our board of directors had approved an additional $5.0 billion share repurchase authorization. These share
repurchase authorizations have no expiration date.
(c)
The maximum dollar value remaining has been reduced by the payment of any commissions paid to brokers during the relevant period.
40
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 Item 1A. 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 and Item 8. Financial Statements and Supplementary Data.
EXECUTIVE SUMMARY
Business Update
For the year ended December 31, 2023, our results were impacted by market prices and seasonal market fluctuations; however,
the demand environment in which our business operates remains strong. Global energy markets continue to experience
disruptions resulting from regional conflicts, such as in the Middle East and Ukraine. We are unable to predict the potential
effects that the continuance or escalation of these military conflicts, and related sanctions or market disruptions on shipping and
energy costs, may have on our financial position and results. It remains uncertain how long these conditions may last or how
severe they may become.
In June 2023, the provisions of California legislature adopted SBx 1-2 became effective, which authorizes the CEC to establish a
“maximum gross gasoline refining margin” with respect to refining activities in California, as well as establish fees for refiners for
exceeding the yet to be issued margin cap. The law further expands on existing reporting requirements for refiners to the CEC. In
late 2023, the CEC adopted (i) an order requiring an informational proceeding on a maximum gross gasoline refining margin and
penalty under SBx 1-2, and (ii) an order initiating rulemaking activity under SBx 1-2 that will be focused on refinery maintenance
and turnarounds. We will evaluate the impact that SBx1-2 and any associated forthcoming CEC regulations may have on our
current or anticipated future operations in California and results of operations when SBx 1-2 is fully implemented.
In response to the current business environment, we continue to focus on the following priorities for our business:
Strengthen Competitive Position of Assets
We are committed to positioning our assets so that we are a leader in operational, financial, and sustainability performance and
are evaluating the strength and fit of assets in our portfolio. Our goal is that each individual asset generates free-cash-flow back
to the business and contributes to shareholder returns. With our investments, we are focused on high returning projects that we
believe will enhance the competitiveness of our portfolio, including our investments in sustainable fuels and technologies that
lower our carbon intensity as the global energy mix evolves.
Improve Commercial Performance
We are focused on leveraging advantaged raw material selection, new approaches in the commercial space to be more dynamic
amidst changing market conditions and achieving technology improvements to advance our commercial performance. A near-
term focus has been securing advantaged renewable feedstocks as we continue to advance our renewable fuels production
capabilities. This includes exploring joint venture opportunities and strategic alliances within the renewable fuels value chain.
Continued Capital Discipline and Focus on Low-Cost Culture
We are committed to achieving operational excellence by reducing costs, improving efficiency, driving operational improvements
and being disciplined in capital allocation. This means lowering our costs in all aspects of our business and challenging
ourselves to be disciplined in every dollar we spend across our organization. We look to optimize our portfolio of investment
opportunities to ensure efficient deployment of capital focusing on projects with the highest returns.
Commitment to Sustainability
Our approach to sustainability spans the environmental, social and governance dimensions of our business. That means
strengthening resiliency by lowering the carbon intensity and conserving natural resources; innovating for the future by investing
in renewables and emerging technologies; and embedding sustainability in decision-making and in how we engage our people
and many stakeholders. Specifically, in 2022, we were the first among U.S. independent refiners to establish a 2030 target to
reduce absolute Scope 3 - Category 11 GHG emissions. This goal added to our existing targets for reducing Scope 1 & 2 GHG
emissions intensity, for lowering methane emissions intensity and for lowering our freshwater withdrawal intensity. Additionally,
MPLX is progressing towards meeting its 2025 and 2030 methane intensity reduction goals, as well as its biodiversity target, by
applying sustainable landscapes to its compatible right of ways.
Strategic Updates
MPLX Acquisition of 40 percent Interest in Gathering and Processing Joint Venture
On December 15, 2023, MPLX used $303 million of cash on hand to purchase the remaining 40 percent interest in MarkWest
Torñado GP, L.L.C. (“Torñado”) for approximately $270 million, including cash paid for working capital, and to extend the term of
a gathering and processing agreement for approximately $33 million. As a result of this transaction, MPLX now owns 100 percent
41
of Torñado and reflects it as a consolidated subsidiary within our consolidated financial results. It was previously accounted for as
an equity method investment. Torñado provides natural gas gathering and processing related services in the Permian basin.
At December 15, 2023, the carrying value of MPLX’s 60 percent equity investment in Torñado was $311 million. Upon acquisition
of the remaining 40 percent member interest, MPLX’s existing equity investment was remeasured to fair value resulting in the
recognition of a $92 million gain.
Green Bison Soy Processing LLC Facility (“Green Bison Soy Processing”)
In November 2023, Green Bison Soy Processing, a dedicated soybean processing complex, opened in Spiritwood, North
Dakota. The facility is North Dakota's first dedicated soybean processing complex, and is a major step towards meeting
increased demand for renewable fuels, in this case renewable green diesel. Green Bison Soy Processing will source and
process local soybeans, with the resulting oil supplied exclusively to MPC as a feedstock for renewable fuels. The facility will
produce approximately 600 million pounds of refined soybean oil annually, enough feedstock for approximately 75 million gallons
of renewable green diesel per year. The approximately $350 million complex, which features state-of-the-art automation
technology, is in the commissioning and startup phase of processing soybeans for meal and oil. The facility is a joint venture with
ADM owning 75 percent and MPC owning 25 percent.
South Texas Gateway Terminal LLC
On August 1, 2023, MPC sold its 25 percent interest in South Texas Gateway Terminal LLC (“South Texas Gateway”) to an
affiliate of Gibson Energy Inc. (“Gibson Energy”). Gibson Energy paid $1.1 billion in cash to acquire 100 percent of the
membership interests of South Texas Gateway from MPC and its other members. South Texas Gateway owns an oil export
facility in the U.S. Gulf Coast. MPC’s proceeds were $270 million, resulting in a gain of $106 million.
LF Bioenergy Acquisition
On March 8, 2023, MPC announced the acquisition of a 49.9 percent equity interest in LF Bioenergy, an emerging producer of
RNG in the U.S., for approximately $56 million, which included funding for on-going operations and project development. LF
Bioenergy has been focused on developing and growing a portfolio of dairy farm-based, low carbon intensity RNG projects.
Current projects are under various stages of development, with the first facility reaching full commercial operation in the first half
of 2023. LF Bioenergy's management and origination teams continue to expand the portfolio with additional sanctioned projects
while progressing their existing pipeline of opportunities toward final investment decisions. As specific project milestones are
achieved, MPC is expected to fund its share of capital expenditures to build out the portfolio.
Martinez Renewables Joint Venture
The Martinez Renewables facility, which has a design capacity of 730 million gallons per year including pretreatment capabilities,
began ramping up production of renewable diesel in 2023.
Share Repurchase Authorization
On October 25, 2023, MPC announced that our board of directors approved an additional $5.0 billion share repurchase
authorization in addition to the $5.0 billion share authorizations announced on January 31, 2023 and May 2, 2023. As of
December 31, 2023, MPC had $6.78 billion remaining under its share repurchase authorizations. Future repurchases under the
authorizations will depend on the macro environment, cash available after opportunities for capital investment and growth of the
business and market conditions. The authorizations have no expiration date.
Other
Succession Planning
As previously disclosed, MPC maintains a mandatory retirement policy that, absent a waiver or extension, requires an executive
officer to retire from service to the company coincident with, or immediately following, the first of the month after such executive
officer reaches age 65 (the "Policy"). Michael J. Hennigan, our Chief Executive Officer, will reach mandatory retirement on
August 1, 2024. Accordingly, the MPC Board of Directors, with a focus on the long-term strategic direction of the company, is
engaged in appropriate succession planning activities, which are expected to include, among other customary steps, the review
of succession candidates, as well as consideration of any waiver or extension of the Policy respecting Mr. Hennigan.
42
Results
Our chief operating decision maker (“CODM”) evaluates the performance of our segments using segment adjusted EBITDA.
Amounts included in income before income taxes and excluded from segment adjusted EBITDA include: (i) depreciation and
amortization; (ii) net interest and other financial costs; (iii) turnaround expenses; and (iv) other adjustments as deemed
necessary. These items are either: (i) believed to be non-recurring in nature; (ii) not believed to be allocable or controlled by the
segment; or (iii) are not tied to the operational performance of the segment.
Select results for continuing operations for 2023 and 2022 are reflected in the following table.
(Millions of dollars)
Segment adjusted EBITDA for reportable segments
Refining & Marketing
Midstream
Total reportable segments
Reconciliation of segment adjusted EBITDA for reportable segments to income
from continuing operations before income taxes
Total reportable segments
Corporate
Refining planned turnaround costs
Garyville incident response costs
LIFO inventory (charge) credit
Gain on sale of assets(a)
Renewable volume obligation requirements(b)
Litigation
Depreciation and amortization
Net interest and other financial costs
Income from continuing operations before income taxes
2023
2022
13,551
$
6,171
19,722
$
19,722
$
(737)
(1,201)
(16)
(145)
198
—
—
(3,307)
(525)
13,989
19,261
5,772
25,033
25,033
(698)
(1,122)
—
148
1,058
238
27
(3,215)
(1,000)
20,469
$
$
$
$
(a)
(b)
2023 includes the $92 million gain associated with the remeasurement of MPLX’s existing equity investment in Torñado arising from the
acquisition of the remaining 40 percent interest and the $106 million gain on the sale of our interest in South Texas Gateway. 2022 includes
the $549 million gain related to the contribution of assets by MPC on the formation of the Martinez Renewables joint venture and the
$509 million gain on lease reclassification. See Item 8. Financial Statements and Supplementary Data - Notes 15 and 27.
Represents retroactive changes in renewable volume obligation requirements published by EPA in June 2022 for the 2020 and 2021 annual
obligations.
The following table includes net income per diluted share data.
Net income per diluted share
Continuing operations
Discontinued operations
Net income attributable to MPC
2023
2022
$
$
23.63
$
—
23.63
$
27.98
0.14
28.12
Net income attributable to MPC decreased $4.84 billion, or $4.49 per diluted share, in 2023 compared to 2022 primarily due to
lower Refining & Marketing margins and net gain on the disposal of assets.
See Item 8. Financial Statements and Supplementary Data – Note 5 for additional information on discontinued operations.
Refer to the Results of Operations section for a discussion of financial results by segment for the three years ended
December 31, 2023.
MPLX
We received limited partner distributions of $2.06 billion and $1.87 billion from MPLX during 2023 and 2022, respectively. We
owned approximately 647 million MPLX common units at December 31, 2023 with a market value of $23.77 billion based on the
December 29, 2023 closing unit price of $36.72. On January 24, 2024, MPLX declared a quarterly cash distribution of $0.8500
per common unit, which was paid February 14, 2024. As a result, MPLX made distributions totaling $853 million to its common
unitholders. MPC’s portion of these distributions was approximately $550 million.
During the year ended December 31, 2023, no MPLX units were repurchased. As of December 31, 2023, $846 million remained
available under the authorization for future repurchases.
43
On February 9, 2023, MPLX issued $1.1 billion aggregate principal amount of 5.00 percent senior notes due 2033 and $500
million aggregate principal amount of 5.65 percent senior notes due 2053 in an underwritten public offering.
On February 15, 2023, MPLX redeemed all of the 600,000 outstanding Series B preferred units at the redemption price of $1,000
per unit. The semi-annual distribution due to Series B unitholders on February 15, 2023, was also paid on that date, in the usual
manner. On March 13, 2023, MPLX redeemed all of MPLX’s and MarkWest’s $1.0 billion aggregate principal amount of 4.50
percent senior notes due July 2023.
See Item 8. Financial Statements and Supplementary Data – Note 6 for additional information on MPLX.
OVERVIEW OF SEGMENTS
Refining & Marketing
Refining & Marketing segment adjusted EBITDA depends largely on our refinery throughputs, Refining & Marketing margin,
refining operating costs and distribution costs. Our total refining capacity was 2,950 mbpcd, 2,898 mbpcd and 2,887 mbpcd as of
December 31, 2023, 2022 and 2021, respectively.
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 Gulf Coast, Mid-Continent and West Coast crack spreads that we
believe most closely track our operations and slate of products. The following are used for these crack-spread calculations:
•
•
•
The Gulf Coast crack spread uses three barrels of MEH crude producing two barrels of USGC CBOB gasoline and one
barrel of USGC ULSD;
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 West Coast crack spread uses three barrels of ANS crude producing two barrels of LA CARBOB and one barrel of
LA CARB Diesel.
Our refineries can process a variety of sweet and sour crude oil, which typically can be purchased at a discount to crude oil
referenced in our Gulf Coast, Mid-Continent and West Coast crack spreads. The amount of these discounts, which we refer to as
the sweet differential and the sour differential, can vary significantly, causing our Refining & Marketing margin to differ from
blended crack spreads. In general, larger sweet and sour differentials 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 Refining & Marketing segment adjusted
EBITDA due to potential changes in market conditions.
(Millions of dollars)
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)
$
1,080
500
500
330
(a)
(b)
(c)
(d)
Crack spread based on 40 percent MEH, 40 percent WTI and 20 percent ANS with Gulf Coast, Mid-Continent and West Coast product
pricing, respectively, and assumes all other differentials and pricing relationships remain unchanged.
Sour crude oil basket consists of the following crudes: ANS, Argus Sour Crude Index, Maya and Western Canadian Select. We assume
approximately 50 percent of the crude processed at our refineries in 2024 will be sour crude.
Sweet crude oil basket consists of the following crudes: Bakken, Brent, MEH, WTI-Cushing and WTI-Midland. We assume approximately 50
percent of the crude processed at our refineries in 2024 will be sweet crude.
This is consumption-based exposure for our Refining & Marketing segment and does not include the sales exposure for our Midstream
segment.
44
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;
the potential impact of lower of cost or market adjustments to inventories in periods of declining prices;
the potential impact of LIFO charges due to changes in historic inventory levels; and
the cost of purchasing RINs in the open market to comply with RFS2 requirements.
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, 2023, market values for refined products exceed
their cost basis and, therefore, there is no lower of cost or market inventory 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 adjusted EBITDA is also affected by changes in refining operating costs in addition to committed
distribution costs. Changes in operating costs are primarily driven by the cost of energy used by our refineries, including
purchased natural gas, and the level of maintenance costs. Distribution costs primarily include long-term agreements with MPLX,
which as discussed below include minimum commitments to MPLX, and will negatively impact segment adjusted EBITDA in
periods when throughput or sales are lower or refineries are idled.
We have various long-term, fee-based commercial agreements with MPLX. Under these agreements, MPLX, which is reported in
our Midstream segment, provides 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 storage volumes of crude oil, refined products and other products. Certain other
agreements include commitments to pay for 100 percent of available capacity for certain marine transportation and refining
logistics assets.
Midstream
Our Midstream segment gathers, transports, stores and distributes crude oil, refined products, including renewable diesel, and
other hydrocarbon-based products, principally for our Refining & Marketing segment. Additionally, the segment markets refined
products. 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, which is reported in
our Midstream segment, has various long-term, fee-based commercial agreements related to services provided to our Refining &
Marketing segment. Under these agreements, MPLX has 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.
Our Midstream segment also gathers, processes and transports natural gas and transports, fractionates, stores and markets
NGLs. 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.
45
RESULTS OF OPERATIONS
The following discussion includes comments and analysis relating to our results of operations for the years ended December 31,
2023, 2022 and 2021. 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
(Millions of dollars)
Revenues and other income:
Sales and other operating revenues(a)
Income (loss) from equity method investments
Net gain on disposal of assets
Other income
2023
2022
2023 vs.
2022
Variance
2021
2022 vs.
2021
Variance
$ 148,379
742
$ 177,453
655
$ (29,074)
87
$ 119,983
458
$ 57,470
197
217
969
1,061
783
(844)
186
21
468
1,040
315
Total revenues and other income
150,307
179,952
(29,645)
120,930
59,022
Costs and expenses:
Cost of revenues (excludes items below)
128,566
151,671
(23,105)
110,008
41,663
Depreciation and amortization
Selling, general and administrative expenses
Other taxes
Total costs and expenses
3,307
3,039
881
3,215
2,772
825
92
267
56
3,364
2,537
721
(149)
235
104
135,793
158,483
(22,690)
116,630
41,853
Income from continuing operations
Net interest and other financial costs
Income from continuing operations before income
taxes
Provision for income taxes on continuing operations
Income from continuing operations, net of tax
Income from discontinued operations, net of tax
Net income
Less net income attributable to:
Redeemable noncontrolling interest
Noncontrolling interests
14,514
525
21,469
1,000
(6,955)
(475)
4,300
1,483
17,169
(483)
13,989
20,469
(6,480)
2,817
17,652
2,817
11,172
—
4,491
15,978
72
(1,674)
(4,806)
(72)
264
2,553
8,448
11,172
16,050
(4,878)
11,001
94
1,397
88
1,446
6
(49)
100
1,163
4,227
13,425
(8,376)
5,049
(12)
283
Net income attributable to MPC
$
9,681
$ 14,516
$
(4,835)
$
9,738
$
4,778
(a)
In accordance with discontinued operations accounting, Speedway sales to retail customers and net results are reflected in Income from
discontinued operations, net of tax, and Refining & Marketing intercompany sales to Speedway are presented as third-party sales through
the close of the sale on May 14, 2021.
2023 Compared to 2022
Net income attributable to MPC decreased $4.84 billion in 2023 compared to 2022, primarily due to lower Refining & Marketing
margins and net gain on the disposal of assets.
Total revenues and other income decreased $29.65 billion in 2023 compared to 2022 primarily due to:
•
•
•
decreased sales and other operating revenues of $29.07 billion primarily due to decreased average refined product
sales prices of $0.52 per gallon, or 17 percent, partially offset by increased refined product sales volumes of 28 mbpd,
or 1 percent;
increased income from equity method investments of $87 million largely due to increased income from Midstream equity
affiliates, partially offset by decreased income from Refining & Marketing equity affiliates;
decreased net gains on disposal of assets of $844 million mainly due to gains of $549 million on the formation of the
Martinez Renewables joint venture and $509 million on a lease reclassification in 2022, partially offset by the
$106 million gain on the sale of MPC’s 25 percent interest in South Texas Gateway and $92 million associated with the
remeasurement of MPLX’s existing equity investment in Torñado, arising from the acquisition of the remaining 40
percent interest in 2023; and
46
•
increased other income of $186 million largely due to the receipt of insurance proceeds, partially offset by lower income
on RIN sales.
Total costs and expenses decreased $22.69 billion in 2023 compared to 2022 primarily due to:
•
•
•
•
decreased cost of revenues of $23.11 billion primarily due to lower crude oil costs;
increased depreciation and amortization of $92 million mainly due to assets placed in service;
increased selling, general and administrative expenses of $267 million primarily due to increased employee
compensation and related expenses, contract services and software maintenance costs; and
increased other taxes of $56 million largely due to the reinstated Petroleum Superfund Tax, which was effective January
1, 2023.
Net interest and other financial costs decreased $475 million largely due to increased interest income, primarily on short-term
investments, and decreased pension non-service costs, partially offset by increased interest expense due to higher MPLX
borrowings. We capitalized interest of $60 million in 2023 and $104 million in 2022. See Item 8. Financial Statements and
Supplementary Data – Note 12 for further details.
We recorded a combined federal, state and foreign income tax expense of $2.82 billion for the year ended December 31, 2023,
which was lower than the tax computed at the U.S. statutory rate primarily due to permanent tax benefits related to net income
attributable to noncontrolling interests, partially offset by state taxes. We recorded a combined federal, state and foreign income
tax expense of $4.49 billion for the year ended December 31, 2022, which was higher than the tax computed at the U.S.
statutory rate primarily due to state taxes, partially offset by permanent tax benefits related to net income attributable to
noncontrolling interests.
Net income attributable to noncontrolling interests decreased $49 million mainly due to MPLX’s redemption of its outstanding
Series B preferred units on February 15, 2023.
2022 Compared to 2021
Net income attributable to MPC increased $4.78 billion in 2022 compared to 2021 primarily due to increased average refined
product sales prices and volumes and net gains on the disposal of assets, partially offset by increased operating costs and the
absence of a gain on the sale of Speedway and a partial period of income from discontinued operations due to the sale of the
Speedway business on May 14, 2021.
Total revenues and other income increased $59.02 billion in 2022 compared to 2021 primarily due to:
•
•
•
•
increased sales and other operating revenues of $57.47 billion primarily due to increased average refined product sales
prices of $0.96 per gallon, or 47 percent, and refined product sales volumes of 83 mbpd, or 2 percent, largely due to
continuing recovery in demand for our products across all our regions;
increased income from equity method investments of $197 million largely due to increased income from Midstream
equity affiliates;
increased net gains on disposal of assets of $1.04 billion mainly due to a gain of $549 million on the formation of the
Martinez Renewables joint venture and a gain of $509 million on a lease reclassification; and
increased other income of $315 million primarily due to higher income on RIN sales.
Total costs and expenses increased $41.85 billion in 2022 compared to 2021 primarily due to:
•
•
•
•
increased cost of revenues of $41.66 billion primarily due to higher crude oil costs and finished product purchases;
decreased depreciation and amortization of $149 million mainly due to 2021 Midstream asset impairments and assets
that were fully depreciated in 2021;
increased selling, general and administrative expenses of $235 million mainly due to increased salaries, benefits and
employee related expenses, credit card processing fees, contract services and insurance; and
increased other taxes of $104 million largely due to retroactive operating tax assessments for prior periods.
Net interest and other financial costs decreased $483 million largely due to increased interest income, decreased debt retirement
expenses related to the redemption of MPC senior notes in 2021, decreased interest expense due to lower MPC borrowings and
decreased pension and other postretirement non-service costs, partially offset by increased interest expense due to higher
MPLX borrowings. We capitalized interest of $104 million in 2022 and $73 million in 2021. See Item 8. Financial Statements and
Supplementary Data – Note 12 for further details.
We recorded a combined federal, state and foreign income tax expense of $4.49 billion for the year ended December 31, 2022,
which was higher than the tax computed at the U.S. statutory rate primarily due to state taxes, partially offset by permanent tax
benefits related to net income attributable to noncontrolling interests. We recorded a combined federal, state and foreign income
tax expense of $264 million for the year ended December 31, 2021, which was lower than the tax computed at the U.S. statutory
rate primarily due to certain permanent tax benefits related to net income attributable to noncontrolling interests and a change in
47
benefit related to the net operating loss carryback provided under the Coronavirus Aid, Relief, and Economic Security Act,
partially offset by state taxes. See Item 8. Financial Statements and Supplementary Data – Note 13 for further details.
Net income attributable to noncontrolling interests increased $283 million mainly due to an increase in MPLX’s net income.
Segment Results
We classify our business in the following reportable segments: Refining & Marketing and Midstream. Segment adjusted EBITDA
represents adjusted EBITDA attributable to the reportable segments. Amounts included in income before income taxes and
excluded from segment adjusted EBITDA include: (i) depreciation and amortization; (ii) net interest and other financial costs; (iii)
turnaround expenses and (iv) other adjustments as deemed necessary. These items are either: (i) believed to be non-recurring in
nature; (ii) not believed to be allocable or controlled by the segment; or (iii) are not tied to the operational performance of the
segment.
Our segment adjusted EBITDA for reportable segments was approximately $19.72 billion, $25.03 billion and $8.93 billion for the
years ended December 31, 2023, 2022 and 2021, respectively. The following shows the percentage of segment adjusted
EBITDA by segment for the last three years.
Refining & Marketing
The following includes key financial and operating data for 2023, 2022 and 2021.
48
2023Refining & Marketing69%Midstream31%2022Refining & Marketing77%Midstream23%2021Refining & Marketing39%Midstream61%In millionsRefining & Marketing Sales and Other Operating Revenues$143,575$172,205$115,494202320222021In millionsRefining & Marketing SegmentAdjusted EBITDA$13,551$19,261$3,518202320222021 (a)
Includes intersegment sales to Midstream and sales destined for export.
Refining & Marketing Operating Statistics
2023
2022
2021
Net refinery throughput (mbpd)
Refining & Marketing margin, excluding LIFO inventory credit/
charge per barrel(a)(b)
LIFO inventory credit (charge) per barrel
Refining & Marketing margin per barrel(a)(b)
Less:
Refining operating costs per barrel(c)
Distribution costs per barrel
LIFO inventory credit (charge) per barrel
Other per barrel(d)
Refining & Marketing adjusted EBITDA per barrel
Less:
Storm impacts on refining operating cost per barrel(e)
Refining planned turnaround costs per barrel
LIFO inventory (credit) charge per barrel
Depreciation and amortization per barrel
Refining & Marketing segment income per barrel
Per barrel fees paid to MPLX included in distribution costs above
2,914
2,951
$
23.16
$
28.10
$
(0.14)
23.02
5.41
5.37
(0.14)
(0.36)
12.74
—
1.13
0.14
1.77
9.70
3.61
$
$
0.14
28.24
5.41
4.89
0.14
(0.08)
17.88
—
1.04
(0.14)
1.72
15.26
3.39
$
$
$
$
(a)
(b)
(c)
(d)
(e)
Sales revenue less cost of refinery inputs and purchased products, divided by net refinery throughput.
See “Non-GAAP Measures” section for reconciliation and further information regarding this non-GAAP measure.
Refining operating costs exclude planned turnaround and depreciation and amortization expense.
Includes income (loss) from equity method investments, net gain (loss) on disposal of assets and other income.
Storms in the first and third quarters of 2021 resulted in higher costs, including maintenance and repairs.
2,799
13.36
—
13.36
5.02
5.04
—
(0.14)
3.44
0.05
0.57
—
1.83
0.99
3.40
49
mbpdRefined Product Sales Volumes (a)3,5363,5083,425202320222021Dollars per gallonAverage Refined Product Sales Prices$2.48$3.00$2.04202320222021
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. The benchmark crack spreads below do not reflect the market
cost of RINs necessary to meet EPA renewable volume obligations for attributable products under the Renewable Fuel Standard.
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
LA CARBOB
LA CARB diesel
Market Indicators (dollars per barrel)
WTI
MEH
ANS
Crack Spreads
Mid-Continent WTI 3-2-1
USGC MEH 3-2-1
West Coast ANS 3-2-1
Blended 3-2-1(a)
Crude Oil Differentials
Sweet
Sour
2023
2022
2021
$
$
2.33
2.61
2.34
2.72
2.81
2.91
$
2.87
3.43
2.76
3.46
3.29
3.51
$
77.60
$
94.33
$
79.08
82.41
96.19
98.98
$
18.61
$
26.93
$
17.49
30.11
20.46
22.17
34.91
26.62
2.02
2.06
2.01
2.01
2.20
2.10
68.11
69.01
70.56
10.95
8.89
13.80
10.70
$
(0.48)
$
0.21
$
(6.31)
(6.81)
(0.47)
(4.05)
(a)
The blended crack spreads for 2023, 2022 and 2021 are weighted 40 percent of the USGC crack spread, 40 percent of the Mid-Continent
crack spread and 20 percent of the West Coast crack spread. These blends are based on MPC’s refining capacity by region in each period.
2023 Compared to 2022
Refining & Marketing segment revenues decreased $28.63 billion primarily due to decreased average refined product sales
prices of $0.52 per gallon, partially offset by increased refined product sales volumes of 28 mbpd.
Refinery crude oil capacity utilization was 92 percent during 2023 and net refinery throughput decreased 37 mbpd in 2023.
Refining & Marketing segment adjusted EBITDA decreased $5.71 billion primarily driven by decreased per barrel margin and
throughput, increased distribution costs, excluding depreciation and amortization, partially offset by increased other income and
decreased refining operating costs, excluding depreciation and amortization.
Refining & Marketing margin, excluding LIFO inventory adjustments, was $23.16 per barrel for 2023 compared to $28.10 per
barrel for 2022. Refining & Marketing margin is affected by the market indicators shown earlier, which use spot market values
and an estimated mix of crude purchases and product sales. Based on the market indicators and our crude oil throughput, we
estimate a net negative impact of approximately $6 billion on Refining & Marketing margin, primarily due to lower crack spreads.
Our reported Refining & Marketing margin differs from market indicators due to the mix of crudes purchased and their costs, the
effects of market structure on our crude oil acquisition prices, RIN prices on the crack spread and other items like refinery yields
and other feedstock variances, direct dealer fuel margin, and for 2023, a LIFO inventory charge of $145 million and for 2022, a
LIFO inventory credit of $148 million. These factors had an estimated net positive impact on Refining & Marketing segment
adjusted EBITDA of approximately $700 million in 2023 compared to 2022.
For the year ended December 31, 2023, refining operating costs, excluding depreciation and amortization, were $5.75 billion.
This was a decrease of $83 million, compared to the year ended December 31, 2022, largely due to lower energy costs, partially
offset by higher project expense. These expenses relate to projects that are regularly performed during refinery turnarounds, of
which we had more in 2023, compared to 2022.
Distribution costs, excluding depreciation and amortization, were $5.71 billion and $5.27 billion for 2023 and 2022, respectively,
and include fees paid to MPLX of $3.84 billion and $3.65 billion for 2023 and 2022, respectively. On a per barrel basis,
distribution costs, excluding depreciation and amortization, increased $0.48 primarily due to higher pipeline tariff rates and
logistics fee escalations.
Refining planned turnaround costs increased $79 million, or $0.09 per barrel, due to the scope and timing of turnaround activity.
50
Depreciation and amortization per barrel increased by $0.05, primarily due to an increase in costs and a decrease in throughput.
Other income increased by $0.28 per barrel mainly due to the receipt of insurance proceeds in 2023.
We purchase RINs to satisfy a portion of our RFS2 compliance. Our expenses associated with purchased RINs were $2.07
billion in 2023 and $2.40 billion in 2022, including benefits related to retroactive changes in renewable volume obligation
requirements, and are included in Refining & Marketing margin. The decrease in 2023 was primarily due to increased RINs
acquired with purchased product from third parties and through RINs generated and acquired from our Martinez Renewables
joint venture in addition to lower average RINs prices.
2022 Compared to 2021
Refining & Marketing segment revenues increased $56.71 billion primarily due to increased average refined product sales prices
of $0.96 per gallon and higher refined product sales volumes, which increased 83 mbpd.
Refinery crude oil capacity utilization was 96 percent during 2022 and net refinery throughputs increased 152 mbpd primarily due
to continuing recovery in demand for our products across all our regions.
Refining & Marketing segment adjusted EBITDA increased $15.74 billion primarily driven by higher per barrel margins, partially
offset by increased refining operating costs and distribution costs, both excluding depreciation and amortization.
Refining & Marketing margin, excluding LIFO inventory credit of $148 million, was $28.10 per barrel for 2022 compared to $13.36
per barrel for 2021. Refining & Marketing margin is affected by the market indicators shown earlier, which use spot market values
and an estimated mix of crude purchases and product sales. Based on the market indicators and our crude oil throughput, we
estimate a net positive impact of approximately $18 billion on Refining & Marketing margin, primarily due to higher crack
spreads. Our reported Refining & Marketing margin differs from market indicators due to the mix of crudes purchased and their
costs, the effects of market structure on our crude oil acquisition prices, RIN prices on the crack spread and other items like
refinery yields and other feedstock variances, direct dealer fuel margin, and for 2022, a LIFO inventory credit of $148 million.
These factors had an estimated net negative impact on Refining & Marketing segment adjusted EBITDA of approximately $1.5
billion in 2022 compared to 2021.
For the year ended December 31, 2022, refining operating costs, excluding depreciation and amortization and storm impacts,
were $5.83 billion. This was an increase of $708 million, or $0.39 per barrel, compared to the year ended December 31, 2021,
primarily due to an increase in energy costs largely as a result of higher natural gas and electricity prices.
Distribution costs, excluding depreciation and amortization, were $5.27 billion and $5.15 billion for 2022 and 2021, respectively,
and include fees paid to MPLX of $3.65 billion and $3.47 billion for 2022 and 2021, respectively. On a per barrel basis,
distribution costs, excluding depreciation and amortization, decreased $0.15 due to higher throughput.
Refining planned turnaround costs increased $540 million, or $0.47 per barrel, due to the scope and timing of turnaround activity.
Depreciation and amortization per barrel decreased by $0.11, primarily due to a decrease in costs and an increase in throughput.
We purchase RINs to satisfy a portion of our RFS2 compliance. Our expenses associated with purchased RINs were $2.40
billion in 2022 and $1.49 billion in 2021, including benefits related to retroactive changes in renewable volume obligation
requirements, and are included in Refining & Marketing margin. The increase in 2022 was primarily due to higher weighted
average RIN costs and an increase in RIN obligations due to higher production.
51
Supplemental Refining & Marketing Statistics
Refining & Marketing Operating Statistics
Crude oil capacity utilization percent(a)
Refinery throughputs (mbpd):
Crude oil refined
Other charge and blendstocks
Net refinery throughput
Sour crude oil throughput percent
Sweet crude oil throughput percent
Refined product yields (mbpd):
Gasoline(b)
Distillates(b)
Propane
NGLs and petrochemicals(b)
Heavy fuel oil
Asphalt
Total
2023
2022
2021
92
96
91
2,677
237
2,914
44
56
1,526
1,047
66
182
52
80
2,761
190
2,951
47
53
1,494
1,079
70
178
73
89
2,621
178
2,799
47
53
1,446
965
52
250
31
91
2,953
2,983
2,835
Refined product export sales volumes (mbpd)(c)
339
315
277
(a)
(b)
(c)
Based on calendar-day capacity, which is an annual average that includes down time for planned maintenance and other normal operating
activities.
Product yields include renewable production.
Represents fully loaded export cargoes for each time period. These sales volumes are included in the total sales volumes amounts.
Midstream
52
In millionsMidstream Sales and Other Operating Revenues$10,508$10,590$9,619$4,911$5,366$4,633$5,597$5,224$4,986Third PartyIntersegment - Refining & Marketing202320222021In millionsMidstream Segment Adjusted EBITDA$6,171$5,772$5,410202320222021
(a) On owned common-carrier pipelines, excluding equity method investments.
(b)
Includes amounts related to MPLX operated unconsolidated equity method investments on a 100 percent basis.
Benchmark Prices
Natural Gas NYMEX HH (per MMBtu)
C2 + NGL Pricing (per gallon)(a)
2023
2022
2021
$
$
2.66
0.69
$
$
6.52
1.03
$
$
3.72
0.87
(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.
2023 Compared to 2022
Midstream segment adjusted EBITDA increased $399 million. Sales and operating revenues decreased $82 million mainly due to
lower NGL prices, partially offset by rate escalations and higher throughput. This decrease was more than offset by lower
purchased product costs of $465 million, primarily due to lower NGL prices of $917 million, partially offset by higher volumes of
$405 million, an increase of $47 million due to changes in the fair value of an embedded derivative in a natural gas purchase
commitment and an increase in income from equity method investments of approximately $111 million.
2022 Compared to 2021
Midstream segment revenue and segment adjusted EBITDA increased $971 million and $362 million, respectively. Results
largely benefited from higher product pricing, mainly due to increased average C2 + NGL prices of $0.16 per gallon. These price
increases resulted in higher revenues of approximately $380 million, as well as higher cost of sales of $315 million. The
Midstream segment also benefited from higher gathering system throughputs, resulting in increased revenue of $356 million, in
addition to higher pipeline and terminal throughputs. Segment adjusted EBITDA increased primarily due to income from equity
method investments of approximately $211 million.
53
mbpdPipeline Throughputs (a)5,8955,7435,542202320222021mbpdTerminal Throughput 3,1303,0222,886202320222021MMcf/dGathering System Throughput (b)6,2575,7945,258202320222021MMcf/dNatural Gas Processed (b)8,9718,4488,401202320222021mbpdC2 (Ethane) + NGLs Fractionated (b)597552551202320222021 Corporate
Key Financial Information (millions of dollars)
Corporate(a)
2023
2022
2021
$
(837)
$
(753)
$
(696)
(a)
Corporate costs consist primarily of MPC’s corporate administrative expenses and costs related to certain non-operating assets, except for
corporate overhead expenses attributable to MPLX, which are included in the Midstream segment. Corporate costs include depreciation and
amortization of $100 million, $55 million and $165 million for the years ended December 31, 2023, 2022 and 2021, respectively.
2023 Compared to 2022
Corporate expenses increased $84 million in 2023 compared to 2022 largely due to increases in stock-based compensation
expense of $48 million, depreciation and amortization of $45 million, compensation expense of $31 million, contract services
expense of $26 million and office expense of $22 million, partially offset by increased allocations of corporate costs to the
segments of $75 million.
2022 Compared to 2021
Corporate expenses increased $57 million in 2022 compared to 2021 primarily driven by stock-based and special award
compensation expense and retroactive operating tax assessments for prior periods. The company will continue to pursue
recovery of these tax assessments. These increases were partially offset by decreased depreciation and amortization of $110
million mainly due to 2021 asset impairments of $56 million and assets that were fully depreciated in 2021.
Items not Allocated to Segments
Our CODM evaluates the performance of our segments using segment adjusted EBITDA. Items identified in the table below are
either believed to be non-recurring in nature or not believed to be allocable, controlled by the segment or are not tied to the
operational performance of the segment.
Key Financial Information (millions of dollars)
2023
2022
2021
Items not allocated to segments:
Gain on sale of assets
Renewable volume obligation requirements
Litigation
Impairments
Idling facility expenses
$
198
$
1,058
$
—
—
—
—
238
27
—
—
Total items not allocated to segments
$
198
$
1,323
$
—
—
—
(13)
(12)
(25)
2023 Compared to 2022
In 2023, total items not allocated to segments includes the $106 million gain on the sale of MPC’s 25 percent interest in South
Texas Gateway and the $92 million gain associated with the remeasurement of MPLX’s existing equity investment in Torñado
arising from the acquisition of the remaining 40 percent interest.
2022 Compared to 2021
In 2022, total items not allocated to segments primarily include the gain of $549 million on the formation of the Martinez
Renewables joint venture, the gain of $509 million on a lease reclassification, and a $238 million benefit related to retroactive
changes in renewable volume obligation requirements published by EPA for 2020 and 2021.
Non-GAAP Financial Measure
Management uses a financial measure to evaluate our operating performance that is calculated and presented on the basis of
methodologies other than in accordance with GAAP. The non-GAAP financial measure we use is as follows:
Refining & Marketing Margin
Refining & Marketing margin is defined as sales revenue less cost of refinery inputs and purchased products. We use and
believe our investors use this non-GAAP financial measure to evaluate our Refining & Marketing segment’s operating and
financial performance as it is the most comparable measure to the industry’s market reference product margins. This measure
should not be considered a substitute for, or superior to, Refining & Marketing gross margin or other measures of financial
performance prepared in accordance with GAAP, and our calculations thereof may not be comparable to similarly titled measures
reported by other companies.
54
Reconciliation of Refining & Marketing segment adjusted EBITDA to Refining & Marketing gross margin and Refining &
Marketing margin
(Millions of dollars)
2023
2022
2021
Refining & Marketing segment adjusted EBITDA
$
13,551
$
19,261
$
3,518
Plus (Less):
Depreciation and amortization
Refining planed turnaround costs
Storm impacts
LIFO inventory credit (charge)
Selling, general and administrative expenses
Income from equity method investments
Net gain on disposal of assets
Other income
Refining & Marketing gross margin
Plus (Less):
Operating expenses (excluding depreciation and amortization)
Depreciation and amortization
Gross margin excluded from and other income included in Refining &
Marketing margin(a)
Other taxes included in Refining & Marketing margin
Refining & Marketing margin
LIFO inventory (credit) charge
(1,887)
(1,201)
—
(145)
2,504
(7)
(3)
(871)
11,941
10,986
1,887
(45)
(288)
24,481
145
(1,850)
(1,122)
—
148
2,294
(31)
(37)
(686)
17,977
10,683
1,850
82
(173)
30,419
(148)
(1,870)
(582)
(50)
—
2,021
(59)
(6)
(369)
2,603
9,806
1,870
(485)
(142)
13,652
—
Refining & Marketing margin, excluding LIFO inventory (credit) charge
$
24,626
$
30,271
$
13,652
(a)
Reflects the gross margin, excluding depreciation and amortization, of other related operations included in the Refining & Marketing
segment and processing of credit card transactions on behalf of certain of our marketing customers, net of other income.
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
Our cash and cash equivalents balance for continuing operations was $5.44 billion at December 31, 2023, compared to $8.63
billion at December 31, 2022. Net cash provided by (used in) operating activities, investing activities and financing activities for
the past three years is presented in the following table.
(Millions of dollars)
Net cash provided by (used in):
2023
2022
2021
Operating activities - continuing operations
$
14,117
$
16,319
$
Operating activities - discontinued operations
Total operating activities
Investing activities - continuing operations
Investing activities - discontinued operations
Total investing activities
Financing activities
—
14,117
(3,095)
—
(3,095)
(14,207)
42
16,361
623
—
623
(13,647)
Total increase (decrease) in cash
$
(3,185)
$
3,337
$
8,384
(4,024)
4,360
(6,517)
21,314
14,797
(14,419)
4,738
Operating Activities
Continuing Operations
Net cash provided by operating activities from continuing operations decreased $2.20 billion in 2023 compared to 2022, primarily
due to a decrease in operating results partially offset by a favorable change in working capital of $1.57 billion. Net cash provided
by operating activities from continuing operations increased $7.94 billion in 2022 compared to 2021, primarily due to an increase
in operating results partially offset by an unfavorable change in working capital of $2.29 billion. The above changes in working
capital exclude changes in short-term debt.
55
For 2023, changes in working capital were a net $230 million source of cash, primarily due to the effect of decreases in energy
commodity prices and volumes at the end of the year on working capital. Current receivables decreased primarily due to
decreases in crude oil volumes and prices. Accounts payable decreased primarily due to decreases in crude oil prices and
volumes. Inventories increased primarily due to increases in refined product, crude oil and materials and supplies inventories.
For 2022, changes in working capital were a net $1.34 billion use of cash, primarily due to the effect of increases in energy
commodity prices and volumes at the end of the year on working capital. Current receivables increased primarily due to higher
crude oil and refined product volumes and prices. Inventories increased primarily due to increases in crude oil, refined product
and materials and supplies inventories. Accounts payable increased primarily due to increases in crude oil prices.
For 2021, changes in working capital were a net $947 million source of cash, primarily due to the effect of increases in energy
commodity prices and volumes at the end of the year on working capital. Accounts payable increased primarily due to increases
in crude oil prices and volumes. Current receivables increased primarily due to higher crude oil and refined product prices and
volumes.
Discontinued Operations
Net cash provided by operating activities from discontinued operations was $42 million in 2022 largely due to the settlement of
working capital related to the Speedway sale, partially offset by the payment of state income tax liabilities. Net cash used in
operating activities from discontinued operations was $4.02 billion in 2021 primarily due to tax payments related to the sale of
Speedway, partially offset by a partial year of business income due to the sale of Speedway on May 14, 2021.
Investing Activities
Continuing Operations
Net cash used in investing activities from continuing operations was $3.10 billion in 2023 and $6.52 billion in 2021, compared to
net cash provided by investing activities from continuing operations of $623 million in 2022.
•
•
•
•
•
•
•
In 2023, the change in net cash used in continuing operations was primarily due to purchases of short-term investments
of $8.62 billion, partially offset by maturities and sales of short-term investments of $5.05 billion and $2.08 billion,
respectively. The cash provided by maturities and sales of short-term investments was primarily used to fund our return
of capital initiatives announced as part of the Speedway sale.
In 2022, the change in net cash provided by continuing operations was primarily due to maturities and sales of short-
term investments of $7.16 billion and $1.30 billion, respectively, partially offset by purchases of short-term investments
of $6.02 billion. The cash provided by maturities and sales of short-term investments was primarily used to fund our
return of capital initiatives announced as part of the Speedway sale.
In 2021, proceeds from the sale of Speedway were used to purchase $12.50 billion of short-term investments and cash
of $5.41 billion and $1.54 billion was provided by the maturities and sales, respectively, of short-term investments. The
cash provided by maturities and sales of short-term investments was primarily used to fund our return of capital
initiatives announced as part of the Speedway sale.
Cash used for additions to property, plant and equipment was $1.89 billion in 2023, compared to $2.42 billion in 2022
and $1.46 billion in 2021, primarily due to spending in our Refining & Marketing and Midstream segments in 2023. See
discussion of capital expenditures and investments under the “Capital Spending” section.
Cash used for acquisitions was $246 million in 2023 due to MPLX’s acquisition of the remaining interest in a gathering
and processing joint venture for approximately $270 million, offset by cash acquired of $24 million. Cash used for
acquisitions was $413 million in 2022 primarily due to the purchase of Crowley Coastal Partner’s interest in Crowley
Ocean Partners LLC and its four subsidiaries for approximately $485 million, which included $196 million to pay off the
debt associated with the four tankers.
Cash used in net investments was $205 million in 2023 and $171 million in 2021, compared to cash provided by net
investments of $110 million in 2022. In 2023, investments primarily included the Martinez Renewables joint venture and
the acquisition of a 49.9 percent equity interest in LF Bioenergy for approximately $56 million, partially offset by cash
received from the sale of MPC’s 25 percent interest in South Texas Gateway. Investments in 2022 include a $500
million cash distribution received from the Martinez Renewables joint venture at its formation, partially offset by
increased contributions to equity method investments, which included the $60 million contribution to MPLX’s Bakken
Pipeline joint venture to fund its share of a debt repayment by the joint venture. Investments in 2021 primarily include
Midstream projects and our joint venture with ADM.
Cash provided by disposal of assets totaled $36 million, $90 million and $153 million in 2023, 2022 and 2021,
respectively, primarily due to the sale of Midstream assets.
56
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.
(Millions of dollars)
Additions to property, plant and equipment per consolidated
statements of cash flows
Increase (decrease) in capital accruals
Total capital expenditures
Investments in equity method investees
2023
2022
2021
$
1,890
$
2,420
$
184
2,074
480
(37)
2,383
405
1,464
141
1,605
210
1,815
Total capital expenditures and investments
$
2,554
$
2,788
$
Discontinued Operations
Net cash provided by investing activities from discontinued operations in 2021 primarily includes the $21.38 billion proceeds from
the sale of Speedway, partially offset primarily by cash used for Speedway capital expenditures of $177 million.
Financing Activities
Financing activities were a use of cash of $14.21 billion in 2023, $13.65 billion in 2022 and $14.42 billion in 2021.
•
•
•
•
•
•
•
•
During 2023, MPLX issued $1.6 billion of senior notes and used the proceeds to redeem $1.0 billion of senior notes and
all of its outstanding Series B preferred units for $600 million.
During 2022, MPLX issued $2.5 billion of senior notes, redeemed $1.0 billion of senior notes and had net payments of
$300 million under its revolving credit facility.
During 2021, we reduced debt through the following actions:
•
•
•
•
On December 2, 2021, all of the $1.25 billion outstanding aggregate principal amount of MPC's 4.5 percent
senior notes due May 2023 and the $850 million outstanding aggregate principal amount of MPC’s 4.75
percent senior notes due December 2023, including the portion of such notes for which Andeavor LLC was the
obligor, were redeemed at a price equal to par, plus a make-whole premium calculated in accordance with the
terms of the senior notes and accrued and unpaid interest to, but not including, the redemption date. MPC
funded the redemption amount with cash on hand.
In June 2021, we redeemed all of the $300 million outstanding aggregate principal amount of MPC’s 5.125
percent senior notes due April 2024 at a price equal to 100.854 percent of the principal amount, plus accrued
and unpaid interest to, but not including, the redemption date.
In May 2021, we repaid all outstanding commercial paper borrowings, which, along with cash had been used
to finance the fourth quarter 2020 repayments of two series of MPC’s senior notes in the aggregate total
principal amount of $1.13 billion.
On March 1, 2021, we repaid the $1 billion outstanding aggregate principal amount of MPC’s 5.125 percent
senior notes due March 2021.
In 2021, MPLX redeemed $1.75 billion of senior notes and had net borrowings of $300 million under its revolving credit
facility.
Cash used in common stock repurchases totaled $11.57 billion in 2023, $11.92 billion in 2022 and $4.65 billion in 2021.
See the “Capital Requirements” section for further discussion of our stock repurchases.
Cash used in dividend payments totaled $1.26 billion in 2023, $1.28 billion in 2022 and $1.48 billion in 2021. Dividends
per share were $3.08 in 2023, $2.49 in 2022 and $2.32 in 2021. The decreases in 2023 and 2022 are primarily due to
share repurchases, partially offset by an increase in per share dividends.
Cash used in distributions to noncontrolling interests totaled $1.28 billion in 2023, $1.21 billion in 2022 and $1.45 billion
in 2021 due to distributions to MPLX common and preferred public unitholders. MPLX’s distributions in 2021 included a
supplemental distribution amount of $0.5750 per common unit.
Cash used in repurchases of noncontrolling interests totaled $491 million in 2022 and $630 million in 2021 due to
MPLX’s repurchases of its common units. There were no repurchases of noncontrolling interests in 2023. See the
“Capital Requirements” section for further discussion of MPLX’s unit repurchases.
Derivative Instruments
See Item 7A. Quantitative and Qualitative Disclosures about Market Risk for a discussion of derivative instruments and
associated market risk.
57
Capital Resources
MPC, Excluding MPLX
We control MPLX through our ownership of the general partner; however, the creditors of MPLX do not have recourse to MPC’s
general credit through guarantees or other financial arrangements, except as noted. MPC has effectively guaranteed certain
indebtedness of LOOP and LOCAP, in which MPLX holds an interest. Therefore, in the following table, we present the liquidity of
MPC, excluding MPLX. MPLX liquidity is discussed in the following section.
Our liquidity, excluding MPLX, totaled $14.28 billion at December 31, 2023 consisting of:
(Millions of dollars)
Bank revolving credit facility
Trade receivables facility(a)
Total
Cash and cash equivalents and short-term investments(b)
Total liquidity
December 31, 2023
Total
Capacity
Outstanding
Borrowings
Outstanding
Letters
of Credit
Available
Capacity
$
$
5,000
$
100
5,100
$
—
—
—
$
$
1
—
1
$
$
$
4,999
100
5,099
9,176
14,275
(a)
(b)
The committed borrowing and letter of credit issuance capacity of the trade receivables securitization facility is $100 million. In addition, the
facility allows for the issuance of letters of credit in excess of the committed capacity at the discretion of the issuing banks.
Excludes $1.05 billion of MPLX cash and cash equivalents.
Because of the alternatives available to us, including internally generated cash flow and access to capital markets and 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 (less than twelve months) 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.
We have a commercial paper program that allows us to have a maximum of $2.0 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 facility. At December 31, 2023, we had no borrowings outstanding
under the commercial paper program.
MPC’s bank revolving credit facility and trade receivables facility contain representations and warranties, affirmative and negative
covenants and restrictions, including financial covenants, and events of default that we consider usual and customary for
agreements of a similar type and nature. As of December 31, 2023, we were in compliance with such covenants and restrictions.
See Item 8. Financial Statements and Supplementary Data – Note 20 for further discussion of MPC’s revolving bank credit
facility, trade receivables facility and related covenants and restrictions.
Our intention is to maintain an investment-grade credit profile. As of February 1, 2024, the credit ratings on our senior unsecured
debt are as follows.
Company
MPC
Rating Agency
Rating
Moody’s
Baa2 (stable outlook)
Standard & Poor’s
BBB (stable outlook)
Fitch
BBB (stable outlook)
The ratings reflect the respective views of the rating agencies and should not be interpreted as a recommendation to buy, sell or
hold our securities. 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. A rating from one rating agency should be evaluated
independently of ratings from other rating agencies.
The agreements governing MPC’s debt obligations do not contain 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 and may limit
our flexibility to obtain financing in the future, including to refinance existing indebtedness. In addition, a downgrade of our senior
unsecured debt rating to below investment-grade levels could, under certain circumstances, 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.
58
See Item 8. Financial Statements and Supplementary Data – Note 20 for further discussion of our debt.
MPLX
MPLX’s liquidity totaled $4.55 billion at December 31, 2023 consisting of:
(Millions of dollars)
MPLX bank revolving credit facility
MPC intercompany loan agreement
Total
Cash and cash equivalents
Total liquidity
December 31, 2023
Total
Capacity
Outstanding
Borrowings
Outstanding
Letters
of Credit
Available
Capacity
$
$
2,000
$
1,500
3,500
$
—
—
—
$
$
—
—
—
$
$
$
2,000
1,500
3,500
1,048
4,548
On February 9, 2023, MPLX issued $1.6 billion aggregate principal amount of senior notes in a public offering, consisting of
$1.1 billion aggregate principal amount of 5.00 percent senior notes due March 2033 and $500 million aggregate principal
amount of 5.65 percent senior notes due March 2053. On February 15, 2023, MPLX used $600 million of the net proceeds to
redeem all of the outstanding Series B preferred units. On March 13, 2023, MPLX used the remaining proceeds to redeem all of
MPLX’s and MarkWest’s $1.0 billion aggregate principal amount of 4.50 percent senior notes due July 2023.
MPLX’s bank revolving credit facility contains representations and warranties, covenants and restrictions, including financial
covenants, and events of default that we consider usual and customary for agreements of a similar type and nature. As of
December 31, 2023, we were in compliance with such covenants and restrictions. See Item 8. Financial Statements and
Supplementary Data – Note 20 for further discussion of MPLX’s bank revolving credit facility and related covenants and
restrictions.
Our intention is to maintain an investment-grade credit profile for MPLX. As of February 1, 2024, the credit ratings on MPLX’s
senior unsecured debt are as follows.
Company
MPLX
Rating Agency
Rating
Moody’s
Baa2 (stable outlook)
Standard & Poor’s
BBB (stable outlook)
Fitch
BBB (stable outlook)
The ratings reflect the respective views of the rating agencies and should not be interpreted as a recommendation to buy, sell or
hold MPLX securities. Although it is our intention to maintain a credit profile that supports an investment-grade rating for MPLX,
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. A rating from one rating agency should
be evaluated independently of ratings from other rating agencies.
The agreements governing MPLX’s debt obligations do not contain credit rating triggers that would result in the acceleration of
interest, principal or other payments in the event that MPLX credit ratings are downgraded. However, any downgrades of MPLX
senior unsecured debt to below investment grade ratings could increase the applicable interest rates, yields and other fees
payable under such agreements. In addition, a downgrade of MPLX senior unsecured debt ratings to below investment-grade
levels may limit MPLX’s ability to obtain future financing, including to refinance existing indebtedness.
See Item 8. Financial Statements and Supplementary Data – Note 20 for further discussion of MPLX’s debt.
Capital Requirements
Capital Spending
MPC’s capital investment plan for 2024 totals approximately $1.25 billion for capital projects and investments, excluding
capitalized interest, potential acquisitions, if any, and MPLX’s capital investment plan. MPC’s 2024 capital investment plan
includes all of the planned capital spending for Refining & Marketing and Corporate as well as a portion of the planned capital
investments for Midstream. The remainder of the planned capital spending for Midstream reflects the capital investment plan for
MPLX. We continuously evaluate our capital plan and make changes as conditions warrant. The 2024 capital investment plan for
MPC and MPLX and capital expenditures and investments for each of the last three years are summarized by segment below.
59
(Millions of dollars)
Capital expenditures and investments:(a)
MPC, excluding MPLX
Refining & Marketing
Midstream - Other
Corporate and Other(b)
Total MPC, excluding MPLX
MPC discontinued operations - Speedway
Midstream - MPLX(c)
2024 Plan
2023
2022
2021
$
$
$
$
1,200
$
1,311
$
1,508
$
—
50
2
83
8
108
911
50
105
1,250
$
1,396
$
1,624
$
1,066
—
$
—
$
—
$
1,100
$
1,103
$
1,061
$
177
681
(a)
(b)
(c)
Capital expenditures include changes in capital accruals.
Excludes capitalized interest of $55 million, $103 million and $68 million for 2023, 2022 and 2021, respectively. The 2024 capital investment
plan excludes capitalized interest.
The 2024 capital investment plan for Midstream - MPLX excludes $285 million of capital expenditures, which is expected to be incurred
primarily by MPC and other MPLX customers on MPLX’s behalf. It also excludes approximately $100 million for repayment of MPLX’s share
of the Bakken Pipeline joint venture’s debt due in 2024. This reimbursable capital and the contribution to the joint venture will be included in
the 2024 MPC Midstream capital expenditures.
Refining & Marketing
The Refining & Marketing segment’s forecasted 2024 capital spending and investments is approximately $1.20 billion. This
amount includes approximately $350 million of growth capital for multi-year low carbon initiatives. At our Los Angeles refinery, we
are advancing improvements to enhance the competitiveness of the refinery by improving reliability and lowering costs. The
improvements focus on integrating and modernizing utility systems and increasing energy efficiency, with the added benefit of
addressing upcoming regulation mandating further reductions in emissions. The improvements are expected to be completed by
the end of 2025. There is also $475 million of growth capital which includes a multi-year project to upgrade high sulfur distillate to
ULSD and maximize distillate volume expansion at our Galveston Bay refinery, which is expected to be completed by the end of
2027, and other traditional projects that will enhance the yields of our refineries, improve energy efficiency, and lower our costs
as well as investments in our branded marketing footprint. Maintenance capital is expected to be approximately $375 million
which is essential to maintain the safety, integrity and reliability of our assets.
Major capital projects completed over the last three years have focused on refinery optimization, production of higher value
products, increased capacity to upgrade residual fuel oil and expanded export capacity. We also focused on projects such as the
Martinez facility conversion, the STAR project at our Galveston Bay refinery and projects expected to reduce future operating
costs.
Midstream
MPLX’s capital investment plan of $1.10 billion, net of reimbursements, includes approximately $950 million of organic growth
capital and $150 million of maintenance capital. This excludes approximately $100 million for the repayment of MPLX’s share of
the Bakken Pipeline joint venture’s debt due in 2024. MPLX’s growth capital plans are anchored in the Marcellus, Permian, and
Bakken basins. In addition to new gas processing plants in the Marcellus and Permian, the remainder of MPLX’s capital plan is
focused on other investments targeted at the expansion or debottlenecking of existing assets to meet customer demand.
Major capital projects over the last three years included investments for the development of natural gas and natural gas liquids
infrastructure to support MPLX’s producer customers, primarily in the Marcellus, Utica and Permian regions and development of
various crude oil and refined petroleum products infrastructure projects.
Corporate and Other
The 2024 capital forecast includes approximately $50 million to support corporate and other activities. Major projects over the
last three years included upgrades to information technology systems.
60
Share Repurchases
From January 1, 2012 through December 31, 2023, our board of directors approved $50.05 billion in total share repurchase
authorizations and we have repurchased a total of $43.27 billion of our common stock. As of December 31, 2023, MPC had
$6.78 billion remaining under its share repurchase authorizations, which reflects the repurchase of 489,190 common shares for
$73 million that were transacted in the fourth quarter of 2023 and settled in the first quarter of 2024. The table below summarizes
our total share repurchases. See Item 8. Financial Statements and Supplementary Data – Note 10 for further discussion of the
share repurchase plans.
(In millions of dollars, except per share data)
2023
2022
2021
Number of shares repurchased
Cash paid for shares repurchased
Average cost per share
89
11,572
131.27
$
$
131
11,922
91.20
$
$
$
$
76
4,654
62.65
We may utilize various methods to effect the repurchases, which could include open market repurchases, negotiated block
transactions, tender offers, 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 suspended or discontinued at any time.
MPLX Unit Repurchases
The table below summarizes MPLX’s total unit repurchases.
(In millions of dollars, except per unit data)
Number of common units repurchased
Cash paid for common units repurchased
Average cost per unit
2023
2022
2021
$
$
—
—
—
$
$
15
491
31.96
$
$
23
630
27.52
As of December 31, 2023, MPLX had approximately $846 million remaining under its unit repurchase authorizations. The
repurchase authorizations have no expiration date.
MPLX may utilize various methods to effect the repurchases, which could include open market repurchases, negotiated block
transactions, accelerated unit repurchases, tender offers or open market solicitations for units, 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.
See Item 8. Financial Statements and Supplementary Data – Note 6 for further discussion of the MPLX unit repurchase program.
Material Cash Commitments
Contractual Obligations
We have purchase commitments primarily consisting of obligations to purchase and transport crude oil and feedstocks used in
our refining operations. As of December 31, 2023, we had purchase obligations for crude oil, NGLs and renewable feedstocks of
$17.76 billion, with $14.44 billion payable within 12 months, and crude oil transportation obligations of $7.45 billion, with $835
million payable within 12 months. 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. Our contractual
obligations do not include our contractual obligations to MPLX under various fee-based commercial agreements as these
transactions are eliminated in the consolidated financial statements.
At December 31, 2023, we have non-cancelable obligations to acquire property, plant and equipment of $281 million, with $276
million payable within 12 months.
At December 31, 2023, we have aggregate principal amount of outstanding senior notes of $27.15 billion, with $1.9 billion
payable within 12 months, and interest on the debt of $16.86 billion, with $1.23 billion payable within 12 months. See Item 8.
Financial Statements and Supplementary Data – Note 20 for additional information on our debt. We intend to repay the short-
term maturities with existing cash on hand and/or with the proceeds of new long-term debt, depending on, among other things,
market conditions.
Our other contractual obligations primarily consist of pension and post-retirement obligations, finance and operating leases and
environmental credits liabilities, for which additional information is included in Item 8. Financial Statements and Supplementary
Data – Notes 25, 27 and 23, respectively.
61
Other Cash Commitments
On January 26, 2024, we announced our board of directors approved a $0.825 per share dividend, payable March 11, 2024 to
shareholders of record at the close of business on February 21, 2024.
We may, from time to time, repurchase our senior notes and preferred units in the open market, in tender offers, in privately-
negotiated transactions or otherwise in such volumes, at such prices and upon such other terms as we deem appropriate.
TRANSACTIONS WITH RELATED PARTIES
See Item 8. Financial Statements and Supplementary Data – Note 8 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. We believe that substantially all of our competitors
must comply with similar environmental laws and regulations. However, the specific impact on each competitor may vary
depending on a number of factors, including the age and location of its operating facilities, marketing areas, production
processes and whether it is also engaged in the petrochemical business or the marine transportation of crude oil and refined
products.
Legislation and regulations pertaining to fuel specifications, climate change and GHG 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.
Our environmental expenditures, including non-regulatory expenditures, for each of the last three years were:
(Millions of dollars)
Capital
Compliance:(a)
Operating and maintenance
Remediation(b)
Total
2023
2022
2021
$
236
$
167
$
1,191
49
987
72
$
1,476
$
1,226
$
118
819
54
991
(a)
(b)
Based on the American Petroleum Institute’s definition of environmental expenditures.
These amounts include spending charged against remediation reserves, where permissible, but exclude non-cash provisions recorded for
environmental remediation. Environmental remediation costs increased in 2022 compared to 2021 primarily due to a release of crude oil on
an MPLX pipeline near Edwardsville, Illinois in March of 2022.
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. 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 12 percent, 7 percent and 8 percent of capital expenditures, for 2023,
2022 and 2021, respectively, excluding acquisitions. Our environmental capital expenditures are expected to be approximately
$272 million, or 12 percent, of total planned capital expenditures in 2024. Actual expenditures may vary as the number and
scope of environmental projects are revised as a result of improved technology or changes in regulatory requirements and could
increase if additional projects are identified or additional requirements are imposed.
For more information on environmental regulations that impact us, or could impact us, see Item 1. Business – Regulatory Matters
and Item 1A. Risk Factors.
62
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 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. See Item 8. Financial Statements and Supplementary Data – Note 2 for
additional information on these policies and estimates, as well as a discussion of additional accounting policies and estimates.
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 18 for disclosures
regarding our fair value measurements.
Significant uses of fair value measurements include:
•
•
•
assessment of impairment of long-lived assets, intangible assets, goodwill and equity method investments;
recorded values for assets acquired and liabilities assumed in connection with acquisitions; and
recorded values of derivative instruments.
Impairment Assessments of Long-Lived Assets, Intangible Assets, Goodwill and Equity Method Investments
Fair value calculated for the purpose of testing our long-lived assets, intangible assets, goodwill and equity method investments
for impairment is estimated using the expected present value of future cash flows method and comparative market prices when
appropriate. Significant judgment is involved in performing these fair value estimates since the results are based on forecasted
financial information prepared using significant assumptions including:
•
•
Future operating performance. Our estimates of future operating performance 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, pipeline throughput and natural gas and natural gas liquid processing
volumes are based on internal forecasts prepared by our Refining & Marketing and Midstream segments operations
personnel. Assumptions about our customers’ drilling activity are inherently subjective and contingent upon a number of
variable factors (including future or expected crude oil and natural gas pricing considerations), many of which are
63
difficult to forecast. Management considers these volume forecasts and other factors when developing our forecasted
cash flows.
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.
•
•
Assumptions about the macroeconomic environment are inherently subjective and difficult to forecast. We base our fair value
estimates on projected financial information which we believe to be reasonable. However, actual results may differ from these
projections.
The need to test for impairment can be based on several indicators, including a significant reduction in prices of or demand for
products produced, a weakened outlook for profitability, a significant reduction in pipeline throughput volumes, a significant
reduction in natural gas or natural gas liquids processed, a significant reduction in refining margins, other changes to contracts or
changes in the regulatory environment. The following sections detail our critical accounting estimates related to impairment
assessments for long-lived assets, goodwill and equity method investments.
Long-lived Asset Impairment Assessments
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, 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
to the calculated fair value.
Goodwill Impairment Assessments
Unlike long-lived assets, goodwill is subject to annual, or more frequent if necessary, impairment testing at the reporting unit
level. A goodwill impairment loss is measured as the amount by which a reporting unit's carrying value exceeds its fair value,
without exceeding the recorded amount of goodwill.
At December 31, 2023, MPC had four reporting units with goodwill totaling approximately $8.24 billion. The majority of this
balance is comprised of the Midstream reporting units, including $1.1 billion for the MPLX Crude Gathering reporting unit and
$6.6 billion for the MPLX Transportation & Storage reporting unit. For the annual impairment assessment as of November 30,
2023, management performed only a qualitative assessment for three reporting units as we determined it was more likely than
not that the fair value of the reporting units exceeded the carrying value. Significant assumptions used to estimate the reporting
units’ fair value under a qualitative approach included estimates of future cash flows and market information for comparable
assets. A quantitative assessment was performed for the MPLX Crude Gathering reporting unit, which resulted in the fair value of
the reporting unit exceeding its carrying value by greater than 10 percent. The fair value of the reporting unit was determined
based on applying both a discounted cash flow method (i.e., income approach) as well as a market approach. An increase of one
percentage point to the discount rate used to estimate the fair value of the reporting unit would not have resulted in a goodwill
impairment charge as of November 30, 2023. Significant assumptions that were used to estimate the Crude Gathering reporting
unit’s fair values under the discounted cash flow method included management’s best estimates of the discount rate, as well as
estimates of future cash flows, which are impacted primarily by producer customers’ development plans, which impact the
reporting unit’s future volumes and capital requirements. If estimates for future cash flows were to decline, the overall reporting
units’ fair values would decrease, resulting in potential goodwill impairment charges. Fair value determinations require
considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no
assurance that the estimates and assumptions made for purposes of the impairment tests will prove to be an accurate prediction
of the future.
Equity Method Investment Impairment Assessment
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, 2023, we had $6.26 billion of investments in equity method investments recorded on our consolidated balance
sheet.
See Item 8. Financial Statements and Supplementary Data – Note 15 for additional information on our equity method
investments. See Item 8. Financial Statements and Supplementary Data – Note 17 for additional information on our goodwill and
intangibles, including a table summarizing our recorded goodwill by segment.
64
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
18. Additional information about derivatives and their valuation may be found in Item 7A. Quantitative and Qualitative Disclosures
about Market Risk.
Variable Interest Entities
We evaluate all legal entities in which we hold an ownership or other pecuniary interest to determine if the entity is a VIE. Our
interests in a VIE are referred to as variable interests. Variable interests can be contractual, ownership or other pecuniary
interests in an entity that change with changes in the fair value of the VIE’s assets. When we conclude that we hold an interest in
a VIE we must determine if we are the entity’s primary beneficiary. A primary beneficiary is deemed to have a controlling financial
interest in a VIE. This controlling financial interest is evidenced by both (a) the power to direct the activities of the VIE that most
significantly impact the VIE’s economic performance and (b) the obligation to absorb losses that could potentially be significant to
the VIE or the right to receive benefits that could potentially be significant to the VIE. We consolidate any VIE when we determine
that we are the primary beneficiary. We must disclose the nature of any interests in a VIE that is not consolidated.
Significant judgment is exercised in determining that a legal entity is a VIE and in evaluating our interest in a VIE. We use
primarily a qualitative analysis to determine if an entity is a VIE. We evaluate the entity’s need for continuing financial support;
the equity holder’s lack of a controlling financial interest; and/or if an equity holder’s voting interests are disproportionate to its
obligation to absorb expected losses or receive residual returns. We evaluate our interests in a VIE to determine whether we are
the primary beneficiary. We use a primarily qualitative analysis to determine if we are deemed to have a controlling financial
interest in the VIE, either on a standalone basis or as part of a related party group. We continually monitor our interests in legal
entities for changes in the design or activities of an entity and changes in our interests, including our status as the primary
beneficiary to determine if the changes require us to revise our previous conclusions.
Changes in the design or nature of the activities of a VIE, or our involvement with a VIE, may require us to reconsider our
conclusions on the entity’s status as a VIE and/or our status as the primary beneficiary. Such reconsideration requires significant
judgment and understanding of the organization. This could result in the deconsolidation or consolidation of the affected
subsidiary, which would have a significant impact on our financial statements.
Variable Interest Entities are discussed in Item 8. Financial Statements and Supplementary Data – Note 7.
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 each of our pension plans and retiree health and welfare based on the projected benefit payment patterns of each
individual plan. 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 corporate 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 from 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 $300 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 4.90 percent
for our pension plans and 4.80 percent for our other postretirement benefit plans by 0.25 percent would increase pension
obligations and other postretirement benefit plan obligations by $74 million and $16 million, respectively, and would increase
defined benefit pension expense and other postretirement benefit plan expense by $10 million and less than $1 million,
respectively.
The long-term asset rate of return assumption considers the asset mix of the plans (currently targeted at approximately 50
percent equity securities and 50 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
65
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 7.00 percent long-term rate of return to determine our 2023 defined benefit pension expense. After
evaluating activity in the capital markets, along with the current and projected plan investments, we decreased the asset rate of
return for our primary plan to 6.80 percent effective for 2024. Decreasing the 7.00 percent asset rate of return assumption by
0.25 percentage points would increase our defined benefit pension expense by $5 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 2021 mortality tables from the U.S. Society of Actuaries.
Item 8. Financial Statements and Supplementary Data – Note 25 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.
ACCOUNTING STANDARDS NOT YET ADOPTED
Refer to Item 8. Financial Statements and Supplementary Data – Note 3 to our audited consolidated financial statements for
recently issued financial accounting pronouncements.
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, 2023, 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 18 and 19 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, swaps and options, as
part of an overall program to hedge commodity price risk. We also do a limited amount of trading not directly related to our
physical transactions.
We use derivative instruments related to the acquisition of foreign-sourced crude oil and ethanol blended with refined petroleum
products to hedge price risk associated with market volatility between the time we purchase the product and when we use it in
the refinery production process or it is blended. In addition, we may use commodity derivative instruments on fixed price
contracts for the sale of refined products to hedge risk by converting the refined product sales to market-based prices. The
majority of these derivatives are exchange-traded contracts, but we also enter 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.
66
Midstream
NGL and natural gas prices are volatile and are impacted by changes in fundamental supply and demand, as well as market
uncertainty, availability of NGL transportation and fractionation capacity and a variety of additional factors that are beyond
MPLX’s control. MPLX may at times use a variety of commodity derivative instruments, including futures and options, as part of
an overall program to economically hedge commodity price risk. A portion of MPLX’s profitability is directly affected by prevailing
commodity prices primarily as a result of purchasing and selling NGLs and natural gas at index-related prices. To the extent that
commodity prices influence the level of drilling by MPLX producer customers, such prices also indirectly affect profitability. MPLX
may enter into derivative contracts, which are primarily swaps traded on the OTC market as well as fixed price forward contracts.
MPLX’s risk management policy does not allow it to enter into speculative positions with its derivative contracts. Execution of
MPLX’s hedge strategy and the continuous monitoring of commodity markets and its open derivative positions are carried out by
its hedge committee, comprised of members of senior management.
To mitigate MPLX’s cash flow exposure to fluctuations in the price of NGLs, it may use NGL derivative swap contracts. A small
portion of its NGL price exposure may be managed by using crude oil contracts. To mitigate MPLX’s cash flow exposure to
fluctuations in the price of natural gas, it may use natural gas derivative swap contracts, taking into account the partial offset of
its long and short natural gas positions resulting from normal operating activities.
MPLX would be exposed to additional commodity risk in certain situations such as if producers under-deliver or over-deliver
products or if processing facilities are operated in different recovery modes. In the event that MPLX has derivative positions in
excess of the product delivered or expected to be delivered, the excess derivative positions may be terminated.
MPLX management conducts a standard credit review on counterparties to derivative contracts, and it has provided the
counterparties with a guaranty as credit support for its obligations if requested. 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, 2023 and 2022, respectively.
(Millions of dollars)
Realized gain (loss) on settled derivative positions
Unrealized gain (loss) on open net derivative positions
Net loss
2023
2022
$
$
8
$
(14)
(6)
$
(93)
35
(58)
See Item 8. Financial Statements and Supplementary Data – Note 19 for additional information on our open derivative positions
at December 31, 2023.
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, 2023 is provided in
the following table.
(Millions of dollars)
As of December 31, 2023
Crude
Refined products
Blending products
Soybean oil
Change in IFO from a
Hypothetical Price
Increase of
Change in IFO from a
Hypothetical Price
Decrease of
10%
25%
10%
25%
$
(19)
$
(47)
$
19
$
(1)
(3)
(12)
(1)
(7)
(29)
1
3
12
47
1
7
29
We remain at risk for possible changes in the market value of commodity derivative instruments; however, such risk should be
mitigated by price changes in the underlying physical commodity. Effects of these offsets are not reflected in the above sensitivity
analysis.
We evaluate our portfolio of commodity derivative instruments on an ongoing basis and add or revise strategies in anticipation of
changes in market conditions and in risk profiles. Changes to the portfolio after December 31, 2023 would cause future IFO
effects to differ from those presented above.
67
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 20 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 finance leases, as of December 31, 2023 is provided in the following table. The fair value of
cash and cash equivalents, receivables, accounts payable and accrued interest approximate carrying value and, in addition to
short-term investments which are recorded at fair value, 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.
(Millions of dollars)
Long-term debt
Fixed-rate
Variable-rate
Fair
Value(a)
Change in
Fair Value(b)
Change in Net Income
for the Year ended
December 31, 2023(c)
$
25,690
—
$
2,037
—
n/a
—
(a)
(b)
(c)
Fair value was based on market prices, where available, or current borrowing rates for financings with similar terms and maturities.
Assumes a 100-basis point decrease in the weighted average yield-to-maturity at December 31, 2023.
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, 2023.
See Item 8. Financial Statements and Supplementary Data – Note 18 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 and some of our sales of finished products denominated in Mexican pesos. We did not use derivatives to hedge our
market risk exposure to these foreign exchange rate fluctuations in 2023.
Counterparty Risk
MPLX is subject to risk of loss resulting from nonpayment by its customers to whom it provides services, leases assets, or sells
natural gas or NGLs. MPLX believes that certain contracts where it sells NGLs and acts as its producer customers’ agent would
allow it to pass those losses through to its customers, thus reducing its risk, when it is selling NGLs and acting as its producer
customers’ agent. Its credit exposure related to these customers is represented by the value of its trade receivables or lease
receivables. Where exposed to credit risk, MPLX analyzes the customer’s financial condition prior to entering into a transaction
or agreement, establishes credit terms and monitors the appropriateness of these terms on an ongoing basis. In the event of a
customer default, MPLX may sustain a loss and its cash receipts could be negatively impacted.
We are subject to risk of loss resulting from nonpayment or nonperformance by counterparties to our derivative contracts. Our
credit exposure related to commodity derivative instruments is represented by the fair value of contracts with a net positive fair
value at the reporting date. 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.
68
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 (PCAOB ID 238)
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
Page
70
70
71
73
74
75
76
78
79
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.
69
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/ Michael J. Hennigan
Michael J. Hennigan
Chief Executive Officer
/s/ John J. Quaid
John J. Quaid
Executive Vice President and
Chief Financial Officer
/s/ Erin M. Brzezinski
Erin M. Brzezinski
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 Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). 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,
2023.
The effectiveness of MPC’s internal control over financial reporting as of December 31, 2023 has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included
herein.
/s/ Michael J. Hennigan
Michael J. Hennigan
Chief Executive Officer
/s/ John J. Quaid
John J. Quaid
Executive Vice President and
Chief Financial Officer
70
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, 2023 and 2022, 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,
2023, 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, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 2023 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, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control
over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the
accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on
the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)
(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control
over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We
believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in 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 limitations, 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.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or
disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or
71
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Goodwill Impairment Test - Crude Gathering Reporting Unit
As described in Note 17 to the consolidated financial statements and as disclosed by management, the Company’s consolidated
goodwill balance was $8.2 billion as of December 31, 2023, which includes, within the Midstream segment, the goodwill
associated with MPLX’s Crude Gathering reporting unit of $1.1 billion. Management annually evaluates goodwill for impairment
as of November 30, as well as whenever events or changes in circumstances indicate it is more likely than not that the fair value
of a reporting unit with goodwill is less than its carrying amount. The fair value of the MPLX Crude Gathering reporting unit was
determined based on applying both a discounted cash flow method (i.e. income approach) as well as a market approach.
Significant assumptions that were used to estimate the reporting unit’s fair value under the discounted cash flow method included
management’s best estimates of the discount rate, as well as estimates of future cash flows, which are impacted primarily by
producer customers’ development plans, which impact the reporting unit’s future volumes and capital requirements.
The principal considerations for our determination that performing procedures relating to the goodwill impairment test of the
Crude Gathering reporting unit of the Midstream segment is a critical audit matter are (i) the significant judgment by management
when determining the fair value of the reporting unit; and (ii) the high degree of auditor judgment, subjectivity, and effort in
performing procedures and evaluating audit evidence relating to management’s significant assumption related to future volumes.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
management’s goodwill impairment test, including controls over the determination of the fair value of the Crude Gathering
reporting unit. These procedures also included, among others (i) testing management’s process for determining the fair value of
the reporting unit; (ii) evaluating the appropriateness of the income and market approaches used; (iii) testing the completeness
and accuracy of underlying data used by management in the approaches; and (iv) evaluating the reasonableness of the
significant assumption related to future volumes. Evaluating the assumption related to future volumes involved (i) considering
whether the assumption used was reasonable considering past performance of the reporting unit, producer customers’ historical
and future production volumes, and industry outlook reports; and (ii) considering whether the assumption was consistent with
evidence obtained in other areas of the audit.
/s/ PricewaterhouseCoopers LLP
Toledo, Ohio
February 28, 2024
We have served as the Company’s auditor since 2010.
72
Marathon Petroleum Corporation
Consolidated Statements of Income
(In millions, except per share data)
Revenues and other income:
Sales and other operating revenues
Income 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)
Depreciation and amortization
Selling, general and administrative expenses
Other taxes
Total costs and expenses
Income from continuing operations
Net interest and other financial costs
Income from continuing operations before income taxes
Provision for income taxes on continuing operations
Income from continuing operations, net of tax
Income from discontinued operations, net of tax
Net income
Less net income attributable to:
Redeemable noncontrolling interest
Noncontrolling interests
Net income attributable to MPC
Per share data (See Note 9)
Basic:
Continuing operations
Discontinued operations
Net income per share
Weighted average shares outstanding
Diluted:
Continuing operations
Discontinued operations
Net income per share
Weighted average shares outstanding
2023
2022
2021
$
148,379
$
177,453
$
119,983
742
217
969
655
1,061
783
458
21
468
150,307
179,952
120,930
128,566
151,671
110,008
3,307
3,039
881
3,215
2,772
825
3,364
2,537
721
135,793
158,483
116,630
14,514
525
13,989
2,817
11,172
—
11,172
94
1,397
21,469
1,000
20,469
4,491
15,978
72
16,050
88
1,446
$
9,681
$
14,516
$
$
$
$
$
23.73
$
28.17
$
—
0.14
23.73
$
28.31
$
407
512
23.63
$
27.98
$
—
0.14
23.63
$
28.12
$
409
516
4,300
1,483
2,817
264
2,553
8,448
11,001
100
1,163
9,738
2.03
13.31
15.34
634
2.02
13.22
15.24
638
The accompanying notes are an integral part of these consolidated financial statements.
73
Marathon Petroleum Corporation
Consolidated Statements of Comprehensive Income
(Millions of dollars)
Net income
Defined benefit plans:
2023
2022
2021
$
11,172
$
16,050
$
11,001
Actuarial changes, net of tax of $(24), $36 and $91, respectively
Prior service, net of tax of $(18), $(15) and $58, respectively
Other, net of tax of $—, $— and $(2), respectively
Other comprehensive income (loss)
Comprehensive income
Less comprehensive income attributable to:
Redeemable noncontrolling interest
Noncontrolling interests
(85)
(49)
1
(133)
11,039
94
1,397
122
(52)
(1)
69
276
175
(6)
445
16,119
11,446
88
1,446
100
1,163
Comprehensive income attributable to MPC
$
9,548
$
14,585
$
10,183
The accompanying notes are an integral part of these consolidated financial statements.
74
Marathon Petroleum Corporation
Consolidated Balance Sheets
(Millions of dollars, except share data)
Assets
Cash and cash equivalents
Short-term investments
Receivables, less allowance for doubtful accounts of $44 and $29, respectively
Inventories
Other current assets
Total current assets
Equity method investments
Property, plant and equipment, net
Goodwill
Right of use assets
Other noncurrent assets
Total assets
Liabilities
Accounts payable
Payroll and benefits payable
Accrued taxes
Debt due within one year
Operating lease liabilities
Other current liabilities
Total current liabilities
Long-term debt
Deferred income taxes
Defined benefit postretirement plan obligations
Long-term operating lease liabilities
Deferred credits and other liabilities
Total liabilities
Commitments and contingencies (see Note 28)
Redeemable noncontrolling interest
Equity
Preferred stock, no shares issued and outstanding (par value $0.01 per share, 30 million
shares authorized)
Common stock:
Issued – 993 million and 990 million shares (par value $0.01 per share, 2 billion shares
authorized)
Held in treasury, at cost – 625 million and 536 million shares
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income (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.
75
December 31,
2023
2022
$
$
$
5,443
4,781
11,619
9,317
971
32,131
6,260
35,112
8,244
1,233
3,007
85,987
13,761
1,115
1,221
1,954
454
1,645
20,150
25,329
5,834
1,102
764
1,409
54,588
8,625
3,145
13,477
8,827
1,168
35,242
6,466
35,657
8,244
1,214
3,081
89,904
15,312
967
1,140
1,066
368
1,167
20,020
25,634
5,904
1,114
841
1,304
54,817
895
968
—
—
10
(43,502)
33,465
34,562
(131)
24,404
6,100
30,504
85,987
$
10
(31,841)
33,402
26,142
2
27,715
6,404
34,119
89,904
$
$
$
$
Marathon Petroleum Corporation
Consolidated Statements of Cash Flows
(Millions of dollars)
Operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating
activities:
Amortization of deferred financing costs and debt discount
Depreciation and amortization
Pension and other postretirement benefits, net
Deferred income taxes
Net gain on disposal of assets
Income from equity method investments
Distributions from equity method investments
Income from discontinued operations
Changes in income tax receivable
Changes in the fair value of derivative instruments
Changes in:
Current receivables
Inventories
Current accounts payable and accrued liabilities
Right of use assets and operating lease liabilities, net
All other, net
Cash provided by operating activities - continuing operations
Cash provided by (used in) operating activities - discontinued
operations
Net cash provided by operating activities
Investing activities:
Additions to property, plant and equipment
Acquisitions, net of cash acquired
Disposal of assets
Investments – acquisitions and contributions
– redemptions, repayments, return of capital and sales
proceeds
Purchases of short-term investments
Sales of short-term investments
Maturities of short-term investments
All other, net
Cash provided by (used in) investing activities - continuing operations
Cash provided by investing activities - discontinued operations
Net cash provided by (used in) investing activities
Financing activities:
Commercial paper – issued
– repayments
Long-term debt – borrowings
– repayments
Debt issuance costs
Issuance of common stock
76
2023
2022
2021
$
11,172
$
16,050
$
11,001
(78)
3,307
(191)
(28)
(217)
(742)
941
—
135
70
1,972
(489)
(1,316)
(7)
(412)
14,117
—
14,117
50
3,215
172
290
(1,061)
(655)
772
(72)
(555)
(147)
(2,315)
(787)
1,909
—
(547)
16,319
42
16,361
79
3,364
(499)
(169)
(21)
(458)
652
(8,448)
2,089
16
(5,299)
(33)
6,260
3
(153)
8,384
(4,024)
4,360
(1,890)
(2,420)
(1,464)
(246)
36
(480)
275
(8,622)
2,082
5,048
702
(3,095)
—
(3,095)
—
—
1,589
(1,079)
(15)
62
(413)
90
(405)
515
(6,023)
1,296
7,159
824
623
—
623
—
—
3,379
(2,280)
(39)
243
—
153
(210)
39
(12,498)
1,544
5,406
513
(6,517)
21,314
14,797
7,414
(8,437)
12,150
(17,400)
—
106
(Millions of dollars)
Common stock repurchased
Dividends paid
Distributions to noncontrolling interests
Repurchases of noncontrolling interests
Redemption of noncontrolling interests - preferred units
All other, net
2023
2022
2021
(11,572)
(1,261)
(1,281)
—
(600)
(50)
(11,922)
(1,279)
(1,214)
(491)
—
(44)
(4,654)
(1,484)
(1,449)
(630)
—
(35)
Net cash used in financing activities
(14,207)
(13,647)
(14,419)
Net change in cash, cash equivalents and restricted cash
$
(3,185)
$
3,337
$
4,738
Cash, cash equivalents and restricted cash balances:(a)
Continuing operations - beginning of year
Discontinued operations - beginning of year
Less: Discontinued operations - end of year
Continuing operations - end of year
8,631
—
—
5,294
—
—
416
140
—
$
5,446
$
8,631
$
5,294
(a)
Restricted cash is included in other current assets on our consolidated balance sheets.
The accompanying notes are an integral part of these consolidated financial statements.
77
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
(Shares in millions;
amounts in millions of dollars)
Balance as of December 31,
2020
980
$ 10
(329) $ (15,157) $ 33,208
$ 4,650
$
(512) $ 7,053
$ 29,252
$
Net income
—
—
—
Dividends declared on common
stock ($2.32 per share)
Distributions to noncontrolling
interests
—
—
—
—
—
—
Other comprehensive income
—
—
—
—
—
—
—
Shares repurchased
—
—
(76)
(4,740)
Share-based compensation
4
—
—
Equity transactions of MPLX
—
—
—
(7)
—
—
9,738
—
1,163
10,901
—
(1,483)
—
—
(1,483)
—
—
—
147
(93)
—
—
—
—
—
—
(1,349)
(1,349)
(100)
445
—
—
—
—
—
4
445
(4,740)
144
(461)
(554)
—
—
—
(3)
Balance as of December 31,
2021
984
$ 10
(405) $ (19,904) $ 33,262
$ 12,905
$
(67) $ 6,410
$ 32,616
$
965
Net income
—
—
—
Dividends declared on common
stock ($2.49 per share)
Distributions to noncontrolling
interests
—
—
—
—
—
—
Other comprehensive income
—
—
—
—
—
—
—
Shares repurchased
—
—
(131)
(11,933)
Share-based compensation
6
—
—
Equity transactions of MPLX
—
—
—
(4)
—
260
(120)
—
14,516
—
1,446
15,962
—
(1,279)
—
(1,279)
—
—
—
—
—
—
—
—
—
—
69
—
—
—
(1,129)
(1,129)
(85)
—
—
4
69
(11,933)
260
(327)
(447)
—
—
—
—
968
100
—
88
—
Balance as of December 31,
2022
990
$ 10
(536) $ (31,841) $ 33,402
$ 26,142
$
2
$ 6,404
$ 34,119
$
968
Net income
—
—
—
Dividends declared on common
stock ($3.075 per share)
Distributions to noncontrolling
interests
—
—
—
—
—
—
Other comprehensive loss
—
—
—
—
—
—
—
Shares repurchased
—
—
(89)
(11,661)
Share-based compensation
3
—
—
Equity transactions of MPLX
—
—
—
—
—
—
9,681
—
1,397
11,078
—
(1,261)
—
—
(1,261)
94
—
—
—
—
67
(4)
—
—
—
2
(2)
—
(1,187)
(1,187)
(94)
(133)
—
—
—
—
—
6
(133)
(11,661)
75
—
—
—
(520)
(526)
(73)
Balance as of December 31,
2023
993
$ 10
(625) $ (43,502) $ 33,465
$ 34,562
$
(131) $ 6,100
$ 30,504
$
895
The accompanying notes are an integral part of these consolidated financial statements.
78
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 one of the nation's
largest refining systems. We sell refined products to wholesale marketing customers domestically and internationally, to buyers
on the spot market and to independent entrepreneurs who operate branded outlets. We also sell transportation fuel to
consumers through direct dealer locations under long-term supply contracts. MPC’s midstream operations are primarily
conducted through MPLX LP (“MPLX”), which owns and operates crude oil and light product transportation and logistics
infrastructure as well as gathering, processing and fractionation assets. We own the general partner and a majority limited
partner interest in MPLX.
On May 14, 2021, we completed the sale of Speedway, our company-owned and operated retail transportation fuel and
convenience store business, to 7-Eleven, Inc. (“7-Eleven”). Speedway’s results are reported separately as discontinued
operations, net of tax, in our consolidated statements of income for all periods presented. In addition, we separately disclosed
the operating and investing cash flows of Speedway as discontinued operations within our consolidated statements of cash flow.
See Note 5 for discontinued operations disclosures.
Refer to Notes 6 and 11 for additional information about our operations.
Basis of Presentation
All significant intercompany transactions and accounts have been eliminated.
2. Summary of Principal Accounting Policies
Principles Applied in Consolidation
These consolidated financial statements include the accounts of our majority-owned, controlled subsidiaries and MPLX. As of
December 31, 2023, we owned the general partner and approximately 65 percent of the outstanding MPLX common units. Due
to our ownership of the general partner interest, we have determined that we control MPLX and therefore we consolidate MPLX
and record a noncontrolling interest for the interest owned by the public. Changes in ownership interest in consolidated
subsidiaries that do not result in a change in control are recorded as equity transactions.
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 any 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. Actual results could differ from those estimates.
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. 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.
Our revenue recognition patterns 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
79
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.
• 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 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 21 for disclosure of our revenue disaggregated by segment and product line and to Note 11 for 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.
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.
Short-Term Investments
Investments with a maturity date greater than three months that we intend to convert to cash or cash equivalents within a year or
less are classified as short-term investments in our consolidated balance sheets. Additionally, in accordance with ASC 320,
Investments - Debt Securities, we have classified all short-term investments as available-for-sale securities and changes in fair
market value are reported in other comprehensive income.
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 150 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.
Leases
Contracts with a term greater than one year that convey the right to direct the use of and obtain substantially all of the economic
benefit of an asset are accounted for as right of use assets.
Right of use asset and lease liability balances are recorded at the commencement date at present value of the fixed lease
payments using a secured incremental borrowing rate with a maturity similar to the lease term because our leases do not provide
implicit rates. We have elected to include both lease and non-lease components in the present value of the lease payments for
all lessee asset classes with the exception of our marine and third-party contractor service equipment leases. The lease
component of the payment for the marine and equipment asset classes is determined using a relative standalone selling price.
See Note 27 for additional disclosures about our lease contracts.
As a lessor under ASU No. 2016-02, Leases (“ASC 842”), MPLX may be required to re-classify existing operating leases to
sales-type leases upon modification and related reassessment of the leases. See Note 27 for further information regarding our
ongoing evaluation of the impacts of lease reassessments as modifications occur. The net investment in sales-type leases is
recorded within receivables, net and other noncurrent assets on the consolidated balance sheets. These amounts are comprised
of the present value of the sum of the future minimum lease payments representing the value of the lease receivable and the
unguaranteed residual value of the lease assets. Management assesses the net investment in sales-type leases for
recoverability quarterly.
80
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 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.
Fair Value
We account for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent
to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in
one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These
levels are:
•
•
•
Level 1 – inputs are based upon unadjusted quoted prices for identical instruments in active markets. Our Level 1
derivative assets and liabilities include 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.
Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or
similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs
are observable in the market or can be corroborated by observable market data for substantially the full term of the
assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a
present value using market-based observable inputs including interest rate curves, credit spreads, and forward and spot
prices for currencies. Our Level 2 investments include commercial paper, certificates of deposit, time deposits and
corporate notes and bonds. Our Level 2 derivative assets and liabilities primarily include certain OTC contracts.
Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market
participants would use in pricing the asset or liability. The fair values are therefore determined using model-based
techniques, including option pricing models and discounted cash flow models. Our Level 3 assets and liabilities include
goodwill, long-lived assets and intangible assets, when they are recorded at fair value due to an impairment charge and
an embedded derivative liability relates to a natural gas purchase agreement embedded in a keep-whole processing
agreement. Unobservable inputs used in the models are significant to the fair values of the assets and liabilities.
Derivative Instruments
We use derivatives to economically hedge a portion of our exposure to commodity price risk and, historically, to interest rate risk.
Our use of selective derivative instruments that assume market risk is limited. 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, (6) the purchase of natural gas, (7) the purchase of soybean oil
and (8) the sale of propane. Changes in the fair value of derivatives not designated as accounting hedges are recognized
immediately in net income.
Concentrations of credit risk
All of our financial instruments, including derivatives, involve elements of credit and market risk. The most significant portion of
our credit risk relates to nonperformance by counterparties. The counterparties to our financial instruments consist primarily of
major financial institutions and companies within the energy industry. To manage counterparty risk associated with financial
instruments, we select and monitor counterparties based on an assessment of their financial strength and on credit ratings, if
available. Additionally, we limit the level of exposure with any single counterparty.
Property, Plant and Equipment
Property, plant and equipment are recorded at cost and depreciated on a straight-line basis over the estimated useful lives of the
assets, generally 10 to 40 years for refining and midstream assets, 25 years for office buildings and 4 to 7 years for other
miscellaneous fixed assets. 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.
81
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 at the reporting unit level 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. If
we determine, based on a qualitative assessment, that it is not more likely than not that a reporting unit’s fair value is less than its
carrying amount, no further impairment testing is required. If we do not perform a qualitative assessment or if that assessment
indicates that further impairment testing is required, the fair value of each reporting unit is determined using an income and/or
market approach which is compared to the carrying value of the reporting unit. If the carrying amount of the reporting unit
exceeds its fair value, an impairment loss would be recognized in an amount equal to that excess, limited to the total amount of
goodwill allocated to that reporting unit. The fair value under the income approach is calculated using the expected present value
of future cash flows method. Significant assumptions used in the cash flow forecasts include future volumes, discount rates, and
future capital requirements.
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 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, 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.
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, 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.
82
Income Taxes
Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between
the financial statement carrying amounts of assets and liabilities and their tax bases. Deferred tax assets are recorded when it is
more likely than not that they will be realized. The realization of deferred tax assets is assessed periodically based on several
factors, primarily our expectation to generate sufficient future taxable income.
Share-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.
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 awards granted to our employees is determined using a Monte Carlo
valuation model, which is updated quarterly, with appropriate mark-to-market adjustments made.
Our share-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. Awards expected to
vest are estimated using the historical data of our own employees. If actual forfeiture results are different than expected,
adjustments to recognized compensation expense may be required in future periods. Unearned share-based compensation is
charged to equity when restricted stock awards are granted. Compensation expense is recognized over the requisite service
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 deficiency 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 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 EPA and the cap-and-trade
emission reduction program and low carbon fuel standard implemented by state programs, 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 assets or other noncurrent assets on the consolidated
balance sheets, 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 liabilities or deferred credits and other liabilities
on the consolidated balance sheets, when we are deficient allowances or credits based on the product of the deficient amount as
of the balance sheet date, if any, based on either the fixed contract price or 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 consolidated
statements of income. Any gains or losses on the sale or expiration of allowances or credits are classified as other income on the
consolidated statements of income. Proceeds from the sale of allowances or credits are reported in investing activities - all other,
net on the consolidated statements of cash flow.
83
3. Accounting Standards
Recently Adopted
During 2023, we adopted ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract
Liabilities from Contracts with Customers. The adoption of this accounting standard update did not have a material impact on our
financial statements.
Not Yet Adopted
ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures
In December 2023, the FASB issued an ASU to update income tax disclosure requirements to provide consistent categories and
greater disaggregation of information in the rate reconciliation and to disaggregate income taxes paid by jurisdiction. This ASU is
effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied on
a prospective basis, but retrospective application is permitted. We are currently evaluating the impact this ASU will have on our
disclosures.
ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures
In November 2023, the FASB issued an ASU to update reportable segment disclosure requirements primarily by requiring
enhanced disclosures about significant segment expenses. This ASU is effective for fiscal years beginning after December 15,
2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The
amendments should be applied retrospectively to all prior periods presented in the financial statements. We are currently
evaluating the impact this ASU will have on our disclosures.
ASU 2023-01, Leases (Topic 842): Common Control Arrangements
In March 2023, the FASB issued an ASU to amend certain provisions of ASC 842 that apply to arrangements between related
parties under common control. The ASU amends the accounting for the amortization period of leasehold improvements in
common-control leases for all entities and requires certain disclosures when the lease term is shorter than the useful life of the
asset. This ASU is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal
years. Early adoption is permitted. We do not expect the application of this ASU to have a material impact on our consolidated
financial statements or disclosures.
4. Short-Term Investments
Investments Components
The components of investments were as follows:
(Millions of dollars)
Available-for-sale debt securities
Commercial paper
Certificates of deposit and time deposits
U.S. government securities
Corporate notes and bonds
Total available-for-sale debt securities
Cash
Total
Fair Value
Level
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
Cash and
Cash
Equivalents
Short-term
Investments
December 31, 2023
1,837
784
85
281 $ 2,875
— $ 3,156 $
1,037
800
—
784
—
(1)
—
85
—
(1) $ 5,862 $ 1,081 $ 4,781
—
$ 10,224 $ 5,443 $ 4,781
4,362
4,362
Level 2
Level 2
Level 1
Level 2
$ 3,154 $
1,836
785
85
$ 5,860 $
2 $
1
—
—
3 $
84
(Millions of dollars)
Available-for-sale debt securities
Fair Value
Level
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
Cash and
Cash
Equivalents
Short-term
Investments
December 31, 2022
Commercial paper
Level 2
$ 3,074 $
— $
(1) $ 3,073 $ 1,106 $ 1,967
Certificates of deposit and time deposits
Level 2
U.S. government securities
Corporate notes and bonds
Level 1
Level 2
2,093
1,071
66
—
—
—
—
—
—
2,093
1,071
66
1,500
498
54
593
573
12
Total available-for-sale debt securities
$ 6,304 $
— $
(1) $ 6,303 $ 3,158 $ 3,145
Cash
Total
5,467
5,467
—
$ 11,770 $ 8,625 $ 3,145
Our investment policy includes concentration limits and credit rating requirements which limits our investments to high quality,
short term and highly liquid securities.
Realized gains/losses were not material. All of our available-for-sale debt securities held as of December 31, 2023 mature within
one year or less or are readily available for use.
5. Discontinued Operations
On May 14, 2021, we completed the sale of Speedway, our company-owned and operated retail transportation fuel and
convenience store business, to 7-Eleven for cash proceeds of approximately $21.38 billion. After-tax proceeds were
approximately $17.22 billion. This transaction resulted in a pretax gain of $11.68 billion ($8.02 billion after income taxes) after
deducting the book value of the net assets and certain other adjustments.
The transaction provided for adjustments for working capital and other miscellaneous items, which were finalized with 7-Eleven
in the fourth quarter of 2022, resulting in an additional pretax gain of $60 million.
Fuel Supply Agreements
During the second quarter of 2021, we entered into various 15-year fuel supply agreements through which we continue to supply
fuel to Speedway.
6. Master Limited Partnership
We own the general partner and a majority limited partner interest in MPLX, which owns and operates crude oil and light product
transportation and logistics infrastructure as well as gathering, processing and fractionation assets. We control MPLX through
our ownership of the general partner interest and, as of December 31, 2023, we owned approximately 65 percent of the
outstanding MPLX common units.
Unit Repurchase Program
In November 2020, MPLX announced the board authorization of a unit repurchase program for the repurchase of up to
$1.0 billion of MPLX’s outstanding common units held by the public, which was exhausted in 2022. On August 2, 2022, MPLX
announced its board of directors approved a $1.0 billion unit repurchase authorization. This unit repurchase authorization has no
expiration date. MPLX may utilize various methods to effect the repurchases, which could include open market repurchases,
negotiated block transactions, accelerated unit repurchases, tender offers or open market solicitations for units, 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.
Total unit repurchases were as follows for the respective periods:
(In millions, except per unit data)
Number of common units repurchased
Cash paid for common units repurchased
Average cost per unit
2023
2022
2021
$
$
—
—
—
$
$
15
491
31.96
$
$
23
630
27.52
As of December 31, 2023, MPLX had approximately $846 million remaining under its unit repurchase authorization.
85
Redemption of the Series B Preferred Units
On February 15, 2023, MPLX exercised its right to redeem all of its 600,000 outstanding preferred units (the “Series B preferred
units”). MPLX paid unitholders the Series B preferred unit redemption price of $1,000 per unit. The final semi-annual distribution
on the Series B preferred units was paid on February 15, 2023 in the usual manner.
The excess of the total redemption price of $600 million paid to Series B preferred unitholders over the carrying value of the
Series B preferred units on the redemption date resulted in a $2 million net reduction to retained earnings. The Series B
preferred units were included in noncontrolling interest on our consolidated balance sheet at December 31, 2022.
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. With certain exceptions, these agreements generally contain
minimum volume commitments. These transactions are eliminated in consolidation but are reflected as intersegment
transactions between our Refining & Marketing and Midstream segments. 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 corporate and our Midstream segment.
Noncontrolling Interest
As a result of equity transactions of MPLX, we are required to adjust non-controlling interest and additional paid-in capital.
Changes in MPC’s additional paid-in capital resulting from changes in its ownership interest in MPLX were as follows:
(Millions of dollars)
Decrease due to change in ownership
Tax impact
Decrease in MPC's additional paid-in capital, net of tax
2023
2022
2021
$
$
(4)
$
(164)
$
—
44
(4)
$
(120)
$
(166)
73
(93)
7. Variable Interest Entities
Consolidated VIE
We control MPLX through our ownership of its general partner. MPLX is a VIE because the limited partners do not have
substantive kick-out or participating rights over the general partner. We are the primary beneficiary of MPLX because in addition
to our significant economic interest, we also have the ability, through our ownership of the general partner, to control the
decisions that most significantly impact MPLX. We therefore consolidate MPLX and record a noncontrolling interest for the
interest owned by the public. We also record a redeemable noncontrolling interest related to MPLX’s Series A preferred units.
The creditors of MPLX do not have recourse to MPC’s general credit through guarantees or other financial arrangements, except
as noted. MPC has effectively guaranteed certain indebtedness of LOOP LLC (“LOOP”) and LOCAP LLC (“LOCAP”), in which
MPLX holds an interest. See Note 28 for more information. The assets of MPLX can only be used to settle its own obligations
and its creditors have no recourse to our assets, except as noted earlier.
The following table presents balance sheet information for the assets and liabilities of MPLX, which are included in our
consolidated balance sheets.
(Millions of dollars)
Assets
Cash and cash equivalents
Receivables, less allowance for doubtful accounts
Inventories
Other current assets
Equity method investments
Property, plant and equipment, net
Goodwill
Right of use assets
Other noncurrent assets
86
December 31,
2023
December 31,
2022
$
1,048
$
836
159
33
3,743
19,264
7,645
264
1,644
238
747
148
56
4,095
18,848
7,645
283
1,664
(Millions of dollars)
Liabilities
Accounts payable
Payroll and benefits payable
Accrued taxes
Debt due within one year
Operating lease liabilities
Other current liabilities
Long-term debt
Deferred income taxes
Long-term operating lease liabilities
Deferred credits and other liabilities
Non-Consolidated VIEs
Green Bison Soy Processing, LLC
December 31,
2023
December 31,
2022
$
723
$
—
79
1,135
45
336
19,296
16
211
476
664
4
67
988
46
338
18,808
13
230
366
We formed a joint venture with Archer-Daniels-Midland Company (“ADM”) for the production of soybean oil to supply rapidly
growing demand for renewable diesel fuel. The joint venture, which is named Green Bison Soy Processing, LLC, owns and
operates a soybean processing complex in Spiritwood, North Dakota, with ADM owning 75 percent of the joint venture and MPC
owning 25 percent. Green Bison Soy Processing, LLC is a VIE since it is unable to fund its operations without financial support
from its equity owners. 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.
LF Bioenergy Acquisition
On March 8, 2023, MPC announced the acquisition of a 49.9 percent interest in LF Bioenergy. LF Bioenergy is a VIE since it is
unable to fund its operations without financial support from its equity owners. 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.
Martinez Renewables LLC
On September 21, 2022, MPC closed on the formation of the Martinez Renewables LLC joint venture. We determined that, as of
the closing date, Martinez Renewables LLC is a VIE because the entity does not have sufficient equity to complete the
modification of the plant to produce renewable fuels without additional financial support from its owners. 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.
Crowley Coastal Partners
We have determined that Crowley Coastal Partners LLC (“Crowley Coastal Partners”) is a VIE based on the terms of the existing
financing arrangement for Crowley Blue Water Partners LLC (“Crowley Blue Water Partners”) and the associated debt guarantee
by MPC and Crowley Maritime Corporation. Our maximum exposure to loss includes our equity method investment in Crowley
Coastal Partners and the debt guarantees provided to each of the lenders to Crowley Blue Water 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.
MPLX VIEs
For those entities that have been deemed to be VIEs, neither MPLX nor any of its subsidiaries have been deemed to be the
primary beneficiary due to voting rights on significant matters. While we have the ability to exercise influence through
participation in the management committees which make all significant decisions, we have equal influence over each committee
as a joint interest partner and all significant decisions require the consent of the other investors without regard to economic
interest and as such we have determined that these entities should not be consolidated and apply the equity method of
accounting with respect to our investments in each entity.
Sherwood Midstream LLC (“Sherwood Midstream”) has been deemed the primary beneficiary of Sherwood Midstream Holdings
LLC (“Sherwood Midstream Holdings”) due to its controlling financial interest through its authority to manage the joint venture. As
a result, Sherwood Midstream consolidates Sherwood Midstream Holdings.
MPLX’s maximum exposure to loss as a result of its involvement with equity method investments includes its equity investment,
any additional capital contribution commitments and any operating expenses incurred by the subsidiary operator in excess of its
compensation received for the performance of the operating services.
87
We account for our ownership interest in each of these investments as an equity method investment. See Note 15 for ownership
percentages and investment balances and Note 28 for our exposure to guarantees related to our non-consolidated VIEs.
8. Related Party Transactions
Transactions with related parties were as follows:
(Millions of dollars)
Sales to related parties
Purchases from related parties
2023
2022
2021
$
915
$
144
$
1,818
1,175
93
962
Sales to related parties, which are included in sales and other operating revenues, consist primarily of refined product sales and
renewable feedstock sales to certain of our equity affiliates.
Purchases from related parties are included in cost of revenues. We obtain utilities, transportation services and purchase ethanol
and renewable fuels from certain of our equity affiliates.
9. Earnings Per 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 share-based
compensation awards, provided the effect is not anti-dilutive.
(In millions, except per share data)
2023
2022
2021
Income from continuing operations, net of tax
$
11,172
$
15,978
$
Net income attributable to noncontrolling interest
Net income allocated to participating securities
Redemption of preferred units
Income from continuing operations available to common stockholders
Income from discontinued operations, net of tax
(1,491)
(7)
(2)
9,672
—
(1,534)
(8)
—
14,436
72
Income available to common stockholders
$
9,672
$
14,508
$
Weighted average common shares outstanding:
Basic
Effect of dilutive securities
Diluted
Income available to common stockholders per share:
Basic:
Continuing operations
Discontinued operations
Net income per share
Diluted:
Continuing operations
Discontinued operations
Net income per share
407
2
409
512
4
516
$
$
$
$
23.73
$
28.17
$
—
0.14
23.73
$
28.31
$
23.63
$
27.98
$
—
0.14
23.63
$
28.12
$
2,553
(1,263)
(2)
—
1,288
8,448
9,736
634
4
638
2.03
13.31
15.34
2.02
13.22
15.24
The following table summarizes the shares that were anti-dilutive, and therefore, were excluded from the diluted share
calculation.
(In millions)
2023
2022
2021
Shares issuable under share-based compensation plans
—
—
3
88
10. Equity
On October 25, 2023, MPC announced that our board of directors approved a $5.0 billion share repurchase authorization in
addition to the $5.0 billion share authorizations announced on January 31, 2023 and May 2, 2023. Share repurchase
authorizations since 2012 totaled $50.05 billion. As of December 31, 2023, $6.78 billion remained available for repurchase under
these share repurchase authorizations. These share repurchase authorizations have no expiration date.
We may utilize various methods to effect the repurchases, which could include open market repurchases, negotiated block
transactions, tender offers, 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 suspended or discontinued at any time.
Total share repurchases were as follows for the respective periods:
(In millions, except per share data)
Number of shares repurchased
Cash paid for shares repurchased
Average cost per share(a)
2023
2022
2021
89
11,572
131.27
$
$
131
11,922
91.20
$
$
$
$
76
4,654
62.65
(a)
The average cost per share for the 2023 period includes excise tax on share repurchases resulting from the Inflation Reduction Act of 2022,
but does not reduce the share repurchase authorization.
The number of shares repurchased shown above and the amount remaining available under the share repurchase authorizations
reflect the repurchase of 489,190 common shares for $73 million that were transacted in the fourth quarter of 2023 and settled in
the first quarter of 2024.
11. Segment Information
We have two reportable segments: Refining & Marketing 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, including renewable feedstocks, at our refineries in the Gulf
Coast, Mid-Continent and West Coast regions of the United States, purchases refined products and ethanol for resale and
distributes refined products, including renewable diesel, 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 independent entrepreneurs who operate primarily
Marathon® branded outlets and through long-term fuel supply contracts with direct dealers who operate locations mainly
under the ARCO® brand.
• Midstream – gathers, transports, stores and distributes crude oil, refined products, including renewable diesel, and other
hydrocarbon-based products principally for the Refining & Marketing segment via refining logistics assets, pipelines,
terminals, towboats and barges; gathers, processes and transports natural gas; and transports, fractionates, stores and
markets NGLs. The Midstream segment primarily reflects the results of MPLX.
Our chief operating decision maker (“CODM”) evaluates the performance of our segments using segment adjusted EBITDA. Our
CODM is the chief executive officer. Amounts included in income from continuing operations before income taxes and excluded
from adjusted EBITDA include: (i) depreciation and amortization; (ii) net interest and other financial costs; (iii) turnaround
expenses and (iv) other adjustments as deemed necessary. These items are either: (i) believed to be non-recurring in nature; (ii)
not believed to be allocable or controlled by the segment; or (iii) not tied to the operational performance of the segment. Assets
by segment are not a measure used to assess the performance of the company by the CODM and thus are not reported in our
disclosures.
(Millions of dollars)
2023
2022
2021
Segment adjusted EBITDA for reportable segments
Refining & Marketing
Midstream
Total reportable segments
13,551
$
19,261
$
6,171
5,772
$
19,722
$
25,033
$
3,518
5,410
8,928
89
(Millions of dollars)
Reconciliation of segment adjusted EBITDA for reportable
segments to income from continuing operations before income
taxes
2023
2022
2021
$
19,722
$
25,033
$
8,928
Total reportable segments
Corporate
Refining planned turnaround costs
Garyville incident response costs
Storm impacts
LIFO inventory (charge) credit
Gain on sale of assets(a)
Renewable volume obligation requirements(b)
Litigation
Impairments(c)
Idling facility expenses
Depreciation and amortization
Net interest and other financial costs
(737)
(1,201)
(16)
—
(145)
198
—
—
—
—
(3,307)
(525)
(698)
(1,122)
—
—
148
1,058
238
27
—
—
(3,215)
(1,000)
(587)
(582)
—
(70)
—
—
—
—
(13)
(12)
(3,364)
(1,483)
2,817
Income from continuing operations before income taxes
$
13,989
$
20,469
$
(a)
(b)
(c)
2023 includes the gain associated with the remeasurement of MPLX’s existing equity investment in MarkWest Torñado GP, L.L.C., arising
from the acquisition of the remaining 40 percent interest and the gain on the sale of our interest in South Texas Gateway Terminal LLC.
2022 includes the $549 million gain related to the contribution of assets by MPC on the formation of the Martinez Renewables LLC joint
venture and the $509 million gain on lease reclassification. See Notes 15 and 27 for additional information.
Represents retroactive changes in renewable volume obligation requirements published by EPA in June 2022 for the 2020 and 2021 annual
obligations.
2021 reflects impairments of equity method investments.
(Millions of dollars)
Sales and other operating revenues
Refining & Marketing
Revenues from external customers(a)
Intersegment revenues
Refining & Marketing segment revenues
Midstream
Revenues from external customers(a)
Intersegment revenues
Midstream segment revenues
Total segment revenues
Less: intersegment revenues
2023
2022
2021
$
143,468
$
172,087
$
115,350
107
143,575
4,911
5,597
10,508
154,083
5,704
118
172,205
5,366
5,224
10,590
182,795
5,342
144
115,494
4,633
4,986
9,619
125,113
5,130
Consolidated sales and other operating revenues
$
148,379
$
177,453
$
119,983
(a)
Includes Refining & Marketing intercompany sales to Speedway prior to May 14, 2021 and related party sales. See Notes 5 and 8 for
additional information.
(Millions of dollars)
Income from equity method investments
Refining & Marketing
Midstream
Corporate(a)
Consolidated income from equity method investments
2023
2022
2021
$
$
7
$
31
$
735
—
624
—
742
$
655
$
59
412
(13)
458
90
(Millions of dollars)
Depreciation and amortization
Refining & Marketing
Midstream
Corporate(b)
Consolidated depreciation and amortization
Capital expenditures
Refining & Marketing
Midstream
Segment capital expenditures and investments
Less investments in equity method investees
Plus:
Corporate
Capitalized interest
Consolidated capital expenditures(c)
2023
2022
2021
$
$
$
1,887
$
1,850
$
1,320
100
1,310
55
3,307
$
3,215
$
1,311
$
1,508
$
1,105
2,416
480
83
55
1,069
2,577
405
108
103
1,870
1,329
165
3,364
911
731
1,642
210
105
68
$
2,074
$
2,383
$
1,605
(a)
(b)
(c)
Impairment of equity method investment.
2021 includes an impairment of $56 million.
Includes changes in capital expenditure accruals. See Note 22 for a reconciliation of total capital expenditures to additions to property, plant
and equipment as reported in the consolidated statements of cash flows.
No single customer accounted for more than 10 percent of annual revenues for the year ended December 31, 2023. Sales to
Speedway/7-Eleven from the Refining & Marketing segment represented 10 percent and 11 percent of our total annual revenues
for the years ended December 31, 2022 and 2021, respectively. See Note 21 for the disaggregation of our revenue by segment
and product line.
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.
12. Net Interest and Other Financial Costs
Net interest and other financial costs were as follows:
(Millions of dollars)
Interest income
Interest expense
Interest capitalized
Pension and other postretirement non-service costs(a)
Loss on extinguishment of debt
Investments - net premium (discount) amortization
Other financial costs
2023
2022
2021
$
(530)
$
(191)
$
1,325
(60)
(89)
9
(142)
12
1,299
(104)
3
2
(30)
21
(14)
1,340
(73)
64
133
(1)
34
Net interest and other financial costs
$
525
$
1,000
$
1,483
(a)
See Note 25.
91
13. Income Taxes
The provision for income taxes from continuing operations consisted of:
(Millions of dollars)
Current:
Federal
State and local
Foreign
Total current
Deferred:
Federal
State and local
Foreign
Total deferred
Income tax provision
2023
2022
2021
$
2,359
$
3,565
$
475
11
2,845
18
(46)
—
(28)
629
7
4,201
191
98
1
290
$
2,817
$
4,491
$
380
48
5
433
(164)
(6)
1
(169)
264
Our effective tax rate for the year ended December 31, 2023 was lower than the U.S. statutory rate primarily due to permanent
tax benefits related to net income attributable to noncontrolling interests, partially offset by state taxes.
Our effective tax rate for the year ended December 31, 2022 was higher than the U.S. statutory rate primarily due to state taxes,
partially offset by permanent tax benefits related to net income attributable to noncontrolling interests.
Our effective tax rate for the year ended December 31, 2021 was lower than the U.S. statutory rate primarily due to permanent
tax benefits related to net income attributable to noncontrolling interests and an increase in benefit related to the net operating
loss (“NOL”) carryback provided under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), partially offset by
state taxes.
A reconciliation of the federal statutory income tax rate to the effective tax rate applied to income from continuing operations
before income taxes follows:
Federal statutory rate
State and local income taxes, net of federal income tax effects
Noncontrolling interests
Legislation
Other
Effective tax rate applied to income from continuing operations before
income taxes
2023
2022
2021
21 %
2
(2)
—
(1)
20 %
21 %
3
(2)
—
—
22 %
21 %
2
(9)
(3)
(2)
9 %
92
Deferred tax assets and liabilities resulted from the following:
(Millions of dollars)
Deferred tax assets:
Employee benefits
Environmental remediation
Finance lease obligations
Operating lease liabilities
Net operating loss carryforwards
Tax credit carryforwards
Goodwill and other intangibles
Other
Total deferred tax assets
Deferred tax liabilities:
Property, plant and equipment
Inventories
Investments in subsidiaries and affiliates
Right of use assets
Other
Total deferred tax liabilities
Net deferred tax liabilities
Net deferred tax liabilities were classified in the consolidated balance sheets as follows:
(Millions of dollars)
Assets:
Other noncurrent assets
Liabilities:
Deferred income taxes
Net deferred tax liabilities
December 31,
2023
2022
$
549
$
89
365
229
44
10
71
68
1,425
2,684
627
3,706
230
11
7,258
$
5,833
$
481
84
371
224
44
20
56
44
1,324
2,656
686
3,660
223
2
7,227
5,903
December 31,
2023
2022
$
$
1
$
1
5,834
5,833
$
5,904
5,903
At December 31, 2023 and 2022, federal operating loss carryforwards were $3 million and $4 million, respectively, which
includes a mix of indefinite carryforward ability and expiration periods ranging from 2032 through 2034. As of December 31, 2023
and 2022, state and local operating loss and tax credit carryforwards were $31 million and $40 million, respectively, which
includes a mix of indefinite carryforward ability and expiration periods ranging from 2025 through 2040. At both December 31,
2023 and December 31, 2022, foreign operating loss carryforwards were $20 million, which includes expiration periods ranging
from 2027 through 2043.
As of December 31, 2023 and 2022, $28 million and $49 million of valuation allowances have been recorded related to income
taxes, primarily related to realizability of foreign tax operating losses and related deferred tax assets.
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. MPLX and its subsidiaries are undergoing examination of its U.S. federal income tax returns by the IRS
for the tax year 2019 and tax year 2021. We do not believe the eventual outcome of such audits will have a material impact on
our financial statements as of December 31, 2023.
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, 2023, we have various state and local income tax returns subject to
examination for years 2006 through 2022, depending on jurisdiction.
93
The following table summarizes the activity in unrecognized tax benefits:
(Millions of dollars)
January 1 balance
Additions for tax positions of current year
Additions for tax positions of prior years
Reductions for tax positions of prior years
Settlements
Statute of limitations
December 31 balance
2023
2022
2021
$
$
57
—
8
(6)
(20)
(1)
$
37
—
38
(2)
(15)
(1)
$
38
$
57
$
23
6
19
(4)
(6)
(1)
37
If the unrecognized tax benefits as of December 31, 2023 were recognized, $32 million would affect our effective income tax rate.
There were $4 million of uncertain tax positions as of December 31, 2023 for which it is reasonably possible that the amount of
unrecognized tax benefits would significantly decrease during the next twelve months.
Interest and penalties related to income taxes are recorded as part of the provision for income taxes. Such interest and penalties
were net expenses (benefits) of less than $(1) million, $1 million and $(2) million in 2023, 2022 and 2021, respectively. At both
December 31, 2023 and December 31, 2022, $4 million of interest and penalties receivables (payables) were accrued related to
income taxes, respectively.
14. Inventories
(Millions of dollars)
Crude oil
Refined products
Materials and supplies
Total
December 31,
2023
2022
$
$
3,211
$
4,940
1,166
9,317
$
3,047
4,748
1,032
8,827
The LIFO method accounted for 87 percent and 88 percent of total inventory value at December 31, 2023 and 2022,
respectively. Current acquisition costs were estimated to exceed the LIFO inventory value at December 31, 2023 and 2022 by
$2.77 billion and $3.72 billion, respectively.
The cost of inventories of crude oil and refined products is determined primarily under the LIFO method.
15. Equity Method Investments
MarkWest Torñado GP, L.L.C.
On December 15, 2023, MPLX used $303 million of cash on hand to purchase the remaining 40 percent interest in MarkWest
Torñado GP, L.L.C. (“Torñado”) for approximately $270 million, including cash paid for working capital, and to extend the term of
a gathering and processing agreement for approximately $33 million. As a result of this transaction, this entity is now
consolidated and included in our consolidated financial results. It was previously accounted for as an equity method investment.
Torñado provides natural gas gathering and processing related services in the Permian basin. The results for this business are
reported within our Midstream segment.
At December 15, 2023, the carrying value of MPLX’s 60 percent equity investment in Torñado was $311 million. Upon acquisition
of the remaining 40 percent member interest, the existing equity investment was remeasured to fair value resulting in the
recognition of a $92 million gain, which was presented in the net gain on disposal of assets line on the accompanying
consolidated statements of income. The fair value of the previously-held equity method investment was primarily based on the
price negotiated for the 40 percent interest in Torñado.
The acquisition was accounted for as a business combination. While the purchase price for the 40 percent interest was
$270 million, all of the Torñado assets and liabilities were remeasured to fair value resulting in a consolidated fair value of net
assets and liabilities of $673 million, consisting primarily of property, plant and equipment and identifiable intangible assets. The
fair value of property, plant and equipment was based primarily on the cost approach. The fair value of the identifiable intangible
assets, consisting of various customer contracts, was primarily based on the multi-period excess earnings method, which is an
income approach.
94
South Texas Gateway Terminal LLC
On August 1, 2023, MPC sold its 25 percent interest in South Texas Gateway Terminal LLC (“South Texas Gateway”) to an
affiliate of Gibson Energy Inc. (“Gibson Energy”). Gibson Energy paid $1.1 billion in cash to acquire 100 percent of the
membership interests of South Texas Gateway from MPC and its other members. South Texas Gateway owns an oil export
facility in the U.S. Gulf Coast. MPC’s proceeds were $270 million, resulting in a gain of $106 million, which is included in the net
gain on disposal of assets line of the accompanying consolidated statements of income.
LF Bioenergy Acquisition
On March 8, 2023, MPC announced the acquisition of a 49.9 percent interest in LF Bioenergy, an emerging producer of
renewable natural gas (“RNG”) in the U.S., for approximately $56 million, which included funding for on-going operations and
project development. LF Bioenergy has been focused on developing and growing a portfolio of dairy farm-based, low carbon
intensity RNG projects. MPC accounts for our ownership interest in LF Bioenergy as an equity method investment.
Crowley Ocean Partners
Crowley Coastal Partners was formed in May 2016 to own both Crowley Ocean Partners LLC (“Crowley Ocean Partners”) and
Crowley Blue Waters Partners. MPC accounts for our 50 percent ownership in Crowley Coastal Partners as an equity method
investment.
On December 1, 2022, MPC purchased all of Crowley Coastal Partner’s interest in Crowley Ocean Partners and its four
subsidiaries for approximately $485 million, which included $196 million to pay off the debt associated with the four tankers. As a
result of the transaction, Crowley Ocean Partners is now included in our consolidated results. MPC will continue to account for its
50 percent interest in Crowley Coastal Partners as an equity method investment.
The excess of the $144 million fair value over the $125 million book value of our 50 percent indirect interest in Crowley Ocean
Partners resulted in a $19 million gain, which is included in the income from equity method investments line of the accompanying
consolidated statements of income.
Martinez Renewables LLC
On September 21, 2022, MPC closed on the formation of the Martinez Renewables LLC joint venture. MPC contributed property,
plant and equipment, inventory, and working capital with an estimated fair value of $1.471 billion and Neste contributed
$728 million in cash. MPC recorded a gain of $549 million resulting from the difference between the carrying value and fair value
of the contributed property, plant and equipment and inventory. Subsequent to the closing, the joint venture paid a special
distribution to MPC of $500 million, which is reflected as a return of capital in MPC’s consolidated statements of cash flows. After
the special distribution, MPC’s investment value in the entity was approximately $971 million. We apply the equity method of
accounting with respect to our investment in the entity.
Watson Cogeneration Company
On June 1, 2022, MPC purchased the remaining 49 percent interest in Watson Cogeneration Company from NRG Energy, Inc.
for approximately $59 million. This entity is now consolidated and included in our consolidated results. It was previously
accounted for as an equity method investment.
The excess of the $62 million fair value over the $25 million book value of our 51 percent ownership interest in Watson
Cogeneration Company resulted in a $37 million gain, which is included in the net gain on disposal of assets line of the
accompanying consolidated statements of income.
95
(In millions of dollars, except ownership percentages)
VIE
2023
2023
2022
Ownership as of
December 31,
Carrying value at
December 31,
Refining & Marketing
The Andersons Marathon Holdings LLC
Martinez Renewables LLC
Other(a)
Refining & Marketing Total
Midstream
MPLX
Andeavor Logistics Rio Pipeline LLC
Centrahoma Processing 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 Torñado GP, L.L.C.(b)
MarkWest Utica EMG, L.L.C.
Minnesota Pipe Line Company, LLC
Rendezvous Gas Services, L.L.C.
Sherwood Midstream Holdings LLC
Sherwood Midstream LLC
Whistler Pipeline LLC
Other(a)
MPLX Total
MPC-Retained
Capline Pipeline Company LLC
Crowley Coastal Partners, LLC
Gray Oak Pipeline, LLC
LOOP LLC
South Texas Gateway Terminal LLC(c)
Other(a)
MPC-Retained Total
Midstream Total
Total
X
X
X
X
X
X
X
X
X
X
X
50%
50%
67%
40%
35%
41%
25%
67%
100%
58%
17%
78%
51%
50%
38%
33%
50%
25%
10%
—%
$
$
$
$
$
$
$
$
227
$
1,266
168
1,661
$
204
1,070
54
1,328
$
171
114
228
314
449
336
—
676
174
129
113
500
214
325
177
131
236
287
475
335
306
669
178
137
125
512
211
316
3,743
$
4,095
402
$
53
284
78
—
39
404
55
302
71
170
41
856
$
1,043
4,599
$
5,138
6,260
$
6,466
(a)
Some investments included within “Other” have been deemed to be VIEs.
(b) MPLX purchased the remaining interest in MarkWest Torñado GP, L.L.C. during 2023. This entity is now consolidated and included in our
consolidated results.
(c) MPC sold its interest in South Texas Gateway Terminal LLC in 2023.
96
Summarized financial information for all equity method investments in affiliated companies, combined, was as follows:
(Millions of dollars)
Income statement data:
Revenues and other income
Income from operations
Net income
Balance sheet data – December 31:
Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
2023
2022
2021
4,343
1,389
1,230
$
6,544
$
5,069
$
2,428
2,089
$
2,610
$
21,098
1,569
6,719
1,907
1,740
1,811
20,324
1,478
4,750
As of December 31, 2023, the carrying value of our equity method investments was $301 million higher than the underlying net
assets of investees. This basis difference is being amortized into net income over the remaining estimated useful lives of the
underlying net assets, except for $208 million of excess related to goodwill and other non-depreciable assets.
Dividends and partnership distributions received from equity method investees (excluding distributions that represented a return
of capital previously contributed) were $941 million, $772 million and $652 million in 2023, 2022 and 2021, respectively.
16. Property, Plant and Equipment (PP&E)
(Millions of dollars)
Refining & Marketing
Midstream
Corporate
Total(a)
(a)
Includes finance leases. See Note 27.
December 31, 2023
December 31, 2022
Gross
PP&E
Accumulated
Depreciation
Net
PP&E
Gross
PP&E
Accumulated
Depreciation
Net
PP&E
$
32,496 $
17,992 $
14,504
$
32,292 $
16,745 $
15,547
29,620
1,632
9,589
1,055
20,031
577
27,659
1,550
8,118
981
19,541
569
$
63,748 $
28,636 $
35,112
$
61,501 $
25,844 $
35,657
Property, plant and equipment includes construction in progress of $1.40 billion and $2.29 billion at December 31, 2023 and
2022, respectively, which primarily relates to capital projects at our refineries and midstream facilities.
17. Goodwill and Intangibles
Goodwill
MPC annually evaluates goodwill for impairment as of November 30, as well as whenever events or changes in circumstances
indicate it is more likely than not that the fair value of a reporting unit with goodwill is less than its carrying amount. There were
no impairments of goodwill required based on our annual test of goodwill in 2023 and 2022.
At December 31, 2023, MPC had four reporting units with goodwill totaling approximately $8.24 billion. For the annual
impairment assessment as of November 30, 2023, management performed only a qualitative assessment for three reporting
units as we determined it was more likely than not that the fair value of the reporting units exceeded the carrying value. A
quantitative assessment was performed for the remaining reporting unit, which resulted in the fair value of the reporting unit
exceeding its carrying value by greater than 10 percent.
97
The changes in the carrying amount of goodwill for 2023 were as follows:
(Millions of dollars)
Balance as of December 31, 2021
Impairment losses
Disposal of assets
Balance as of December 31, 2022
Impairment losses
Balance as of December 31, 2023
Gross goodwill as of December 31, 2023
Accumulated impairment losses
Balance as of December 31, 2023
Refining &
Marketing
Midstream
Total
$
561
$
7,695
$
8,256
—
—
561
—
—
(12)
7,683
—
$
$
$
561
$
7,683
$
6,141
$
10,824
$
(5,580)
(3,141)
561
$
7,683
$
—
(12)
8,244
—
8,244
16,965
(8,721)
8,244
Intangible Assets
Our definite lived intangible assets as of December 31, 2023 and 2022 are as shown below.
(Millions of dollars)
Customer contracts and
relationships
Brand rights and tradenames
Royalty agreements
Other
Total
December 31, 2023
December 31, 2022
Gross
Accumulated
Amortization
Net
Gross
Accumulated
Amortization
Net
$
3,838 $
2,132 $
1,706
$
3,624 $
1,825 $
1,799
101
173
41
79
142
35
22
31
6
100
138
36
64
103
30
36
35
6
$
4,153 $
2,388 $
1,765
$
3,898 $
2,022 $
1,876
At both December 31, 2023 and December 31, 2022, we had indefinite lived intangible assets of $71 million, which are emission
allowance credits.
Amortization expense was $316 million for both 2023 and 2022. Estimated future amortization expense for the next five years
related to the intangible assets at December 31, 2023 is as follows:
(Millions of dollars)
2024
2025
2026
2027
2028
18. Fair Value Measurements
Fair Values – Recurring
$
265
250
230
201
179
The following tables present assets and liabilities accounted for at fair value on a recurring basis as of December 31, 2023 and
2022 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.
98
Embedded derivatives in commodity contracts
—
—
61
—
$ 249
$ —
$ —
$
(249)
$
$
—
61
—
—
December 31, 2023
Fair Value Hierarchy
Level 1
Level 2
Level 3
Netting and
Collateral(a)
Net Carrying
Value on Balance
Sheet(b)
Collateral
Pledged Not
Offset
$ 244
$ —
$ —
$
(220)
$
24
$
73
December 31, 2022
Fair Value Hierarchy
Level 1
Level 2
Level 3
Netting and
Collateral(a)
Net Carrying
Value on Balance
Sheet(b)
Collateral
Pledged Not
Offset
$ 310
$ —
$ —
$
(243)
$
67
$
100
(Millions of dollars)
Assets:
Commodity contracts
Liabilities:
Commodity contracts
(Millions of dollars)
Assets:
Commodity contracts
Liabilities:
Commodity contracts
Embedded derivatives in commodity contracts
—
—
61
—
$ 301
$ —
$ —
$
(301)
$
$
—
61
—
—
(a)
Represents the impact of netting assets, liabilities and cash collateral when a legal right of offset exists. As of December 31, 2023, cash
collateral of $29 million was netted with mark-to-market derivative liabilities. As of December 31, 2022, cash collateral of $58 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.
Level 3 instruments relate to an embedded derivative liability for a natural gas purchase commitment embedded in a keep-whole
processing agreement. The fair value calculation for these Level 3 instruments at December 31, 2023 used significant
unobservable inputs including: (1) NGL prices interpolated and extrapolated due to inactive markets ranging from $0.61 to $1.44
per gallon with a weighted average of $0.76 per gallon and (2) the probability of renewal of 100 percent for the five-year term of
the natural gas purchase agreement and the related keep-whole processing agreement. Increases or decreases in the
fractionation spread result in an increase or decrease in the fair value of the embedded derivative liability.
The following is a reconciliation of the beginning and ending balances recorded for net liabilities classified as Level 3 in the fair
value hierarchy.
(Millions of dollars)
Beginning balance
Unrealized and realized (gain) loss included in net income
Settlements of derivative instruments
Ending balance
The amount of total (gain)/loss for the period included in earnings attributable to the
change in unrealized (gain)/loss relating to liabilities still held at the end of period:
See Note 19 for the income statement impacts of our derivative instruments.
Fair Values – Non-recurring
2023
2022
$
61
11
(11)
61
$
108
(35)
(12)
61
9
$
(33)
$
$
$
Non-recurring fair value measurements and disclosures in 2023 relate primarily to the acquisition of the remaining interest in
MarkWest Torñado GP, L.L.C. as discussed in Note 15.
Non-recurring fair value measurements and disclosures in 2022 relate primarily to sales-type leases discussed in Note 27 and
the Martinez Renewables LLC equity method investment discussed in Note 15. The net investment in sales-type leases was
recorded at the estimated fair value of the underlying leased assets at contract modification date. The leased assets were valued
using a cost method valuation approach which utilizes Level 3 inputs. The fair value of the Martinez Renewables LLC equity
method investment was primarily based on the cash consideration received from Neste for their 50 percent ownership.
99
Fair Values – Reported
We believe the carrying value of our other financial instruments, 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 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
$25.5 billion at December 31, 2023, respectively, and approximately $26.3 billion and $24.0 billion at December 31, 2022,
respectively. These carrying and fair values of our debt exclude the unamortized issuance costs which are netted against our
total debt.
19. Derivatives
For further information regarding the fair value measurement of derivative instruments, including any effect of master netting
agreements or collateral, see Note 18. See Note 2 for a discussion of the types of derivatives we use and the reasons for them.
We do not designate any of our commodity derivative instruments as hedges for accounting purposes.
The following table presents the fair value of derivative instruments as of December 31, 2023 and 2022 and the line items in the
consolidated 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.
(Millions of dollars)
Balance Sheet Location
Commodity derivatives
Other current assets
Other current liabilities(a)
Deferred credits and other liabilities(a)
(a)
Includes embedded derivatives.
December 31, 2023
December 31, 2022
Asset
Liability
Asset
Liability
$
244
$
249
$
310
$
—
—
11
50
—
—
301
10
51
The table below summarizes open commodity derivative contracts for crude oil, refined products, blending products and soybean
oil as of December 31, 2023.
(Units in thousands of barrels)
Exchange-traded(a)
Crude oil
Refined products
Blending products
Soybean oil
Percentage of contracts
that expire next quarter
Position
Long
Short
71.2%
90.7%
89.3%
82.7%
42,455
17,657
6,030
4,339
44,998
18,996
5,938
5,088
(a)
Included in exchange-traded are spread contracts in thousands of barrels: Crude oil - 10,866 long and 10,986 short; Refined products - 615
long and 386 short. There are no spread contracts for blending products or soybean oil.
The following table summarizes the effect of all commodity derivative instruments in our consolidated statements of income:
(Millions of dollars)
Income Statement Location
Sales and other operating revenues
Cost of revenues
Other income
Total
2023
Gain (Loss)
2022
2021
$
$
7
$
—
$
(15)
2
(58)
—
(6)
$
(58)
$
(47)
(333)
—
(380)
100
20. Debt
Our outstanding borrowings at December 31, 2023 and 2022 consisted of the following:
(Millions of dollars)
Marathon Petroleum Corporation:
Senior notes
Notes payable
Finance lease obligations
Total
MPLX LP:
Senior notes
Finance lease obligations
Total
Total debt
Unamortized debt issuance costs
Unamortized discount, net of unamortized premium
Amounts due within one year
Total long-term debt due after one year
Commercial Paper
December 31,
2023
December 31,
2022
$
6,449
$
6,449
1
464
6,914
20,700
6
20,706
27,620
(141)
(196)
(1,954)
$
25,329
$
1
522
6,972
20,100
8
20,108
27,080
(142)
(238)
(1,066)
25,634
We have in place a commercial paper program that allows us to have a maximum of $2.0 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 the MPC Credit Agreement.
MPC Senior Notes
(Millions of dollars)
Senior notes, 3.625% due September 2024
Senior notes, 4.700% due May 2025
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% - 5.125% due 2026 – 2048
Senior notes, 5.000%, due September 2054
Total
December 31,
2023
2022
750
1,250
719
496
1,250
800
250
498
36
400
750
1,250
719
496
1,250
800
250
498
36
400
$
6,449
$
6,449
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 to our subsidiaries and structurally subordinated to the indebtedness of
our subsidiaries, including the outstanding indebtedness of Andeavor and MPLX. 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.
101
MPLX Senior Notes
(Millions of dollars)
Senior notes, 4.500% due July 2023
Senior notes, 4.875% due December 2024
Senior notes, 4.000% due February 2025
Senior notes, 4.875% due June 2025
MarkWest senior notes, 4.500% - 4.875% due 2023 – 2025
Senior notes, 1.750% due March 2026
Senior notes, 4.125% due March 2027
Senior notes, 4.250% due December 2027
Senior notes, 4.000% due March 2028
Senior notes, 4.800% due February 2029
Senior notes, 2.650% due August 2030
Senior notes, 4.950% due September 2032
Senior notes, 5.000% due March 2033
Senior notes, 4.500% due April 2038
Senior notes, 5.200% due March 2047
Senior notes, 5.200% due December 2047
ANDX senior notes, 4.250% - 5.200% due 2027 – 2047
Senior notes, 4.700% due April 2048
Senior notes, 5.500% due February 2049
Senior notes, 4.950% due March 2052
Senior notes, 5.650% due March 2053
Senior notes, 4.900% due April 2058
Total
2023 Activity
December 31,
2023
2022
$
—
$
1,149
500
1,189
12
1,500
1,250
732
1,250
750
1,500
1,000
1,100
1,750
1,000
487
31
1,500
1,500
1,500
500
500
989
1,149
500
1,189
23
1,500
1,250
732
1,250
750
1,500
1,000
—
1,750
1,000
487
31
1,500
1,500
1,500
—
500
$
20,700
$
20,100
On February 9, 2023, MPLX issued $1.6 billion aggregate principal amount of senior notes in a public offering, consisting of
$1.1 billion aggregate principal amount of 5.00 percent senior notes due March 2033 and $500 million aggregate principal
amount of 5.65 percent senior notes due March 2053. On February 15, 2023, MPLX used $600 million of the net proceeds to
redeem all of the outstanding Series B preferred units. On March 13, 2023, MPLX used the remaining proceeds to redeem all of
MPLX’s and MarkWest’s $1.0 billion aggregate principal amount of 4.50 percent senior notes due July 2023.The redemption
resulted in a loss on extinguishment of debt of $9 million due to the immediate expense recognition of unamortized debt discount
and issuance costs.
2022 Activity
On March 14, 2022, MPLX issued $1.5 billion aggregate principal amount of 4.950 percent senior notes due March 2052 in an
underwritten public offering. The net proceeds were used to repay amounts outstanding under the MPC intercompany loan
agreement and under the previous MPLX credit agreement.
On August 11, 2022, MPLX issued $1.0 billion aggregate principal amount of 4.950 percent senior notes due September 2032 in
an underwritten public offering. The net proceeds were used to redeem all of the $500 million aggregate principal amount of
3.500 percent senior notes due December 2022, $14 million of which was issued by Andeavor Logistics LP, and to redeem all of
the $500 million aggregate principal amount of 3.375 percent senior notes due March 2023.
Interest on each series of MPLX fixed rate 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. The MPLX senior notes are non-recourse to MPLX’s subsidiaries and structurally
subordinated to the indebtedness of MPLX’s subsidiaries.
102
Schedule of Maturities
Principal maturities of long-term debt, excluding finance lease obligations, as of December 31, 2023 for the next five years are as
follows:
(Millions of dollars)
2024
2025
2026
2027
2028
Available Capacity under our Facilities as of December 31, 2023
$
1,901
2,950
2,249
2,000
1,750
(Millions of dollars)
MPC, excluding MPLX
MPC bank revolving credit facility
MPC trade receivables securitization facility(a)
100
MPLX
MPLX bank revolving credit facility
2,000
Total
Capacity
Outstanding
Borrowings
Outstanding
Letters
of Credit
Available
Capacity
Weighted
Average
Interest
Rate
Expiration
$ 5,000 $
— $
1 $ 4,999
—
July 2027
—
—
—
100
— September 2024
—
2,000
—
July 2027
(a)
The committed borrowing and letter of credit issuance capacity of the trade receivables securitization facility is $100 million. In addition, the
facility allows for the issuance of letters of credit in excess of the committed capacity at the discretion of the issuing banks.
MPC Bank Revolving Credit Facility
On July 7, 2022, MPC entered into a new five-year revolving credit agreement (the “MPC Credit Agreement”) to replace its
previous $5.0 billion credit facility that was scheduled to expire in October 2023. The MPC Credit Agreement, among other
things, provides for a $5.0 billion unsecured revolving credit facility that matures in July 2027 and letter of credit issuing capacity
under the facility of up to $2.2 billion. Letters of credit issuing capacity is included in, not in addition to, the $5.0 billion borrowing
capacity. The financial covenants of the MPC Credit Agreement are substantially the same as those contained in the previous
credit agreement.
MPC has an option under the MPC Credit Agreement to increase the aggregate commitments by up to an additional $1.0 billion,
subject to, among other conditions, the consent of the lenders whose commitments would be increased. In addition, the maturity
date may be extended, for up to two additional one year periods, subject to, among other conditions, the approval of lenders
holding the majority of the commitments then outstanding, provided that the commitments of any non-consenting lenders will
terminate on the then-effective maturity date. The MPC 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 $3.0 billion upon receipt of additional letter of
credit issuing commitments).
Borrowings under the MPC Credit Agreement bear interest, at our election, at either the Adjusted Term SOFR or the Alternate
Base Rate, both as defined in the MPC Credit Agreement, plus an applicable margin. We are 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 MPC Credit Agreement fluctuate based on changes, if any, to our credit
ratings.
The MPC Credit Agreement contains 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 Agreement, 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, 2023, we were in compliance with the covenants contained in the MPC Credit Agreement.
Trade Receivables Securitization Facility
On September 30, 2021, we entered into a Loan and Security Agreement and related documentation with a group of lenders
providing for a new trade receivables securitization facility having $100 million of committed borrowing and letter of credit
issuance capacity and uncommitted borrowing and letter of credit issuance capacity that can be extended at the discretion of the
lenders, provided that at no time may outstanding borrowings and letters of credit issued under the facility exceed the balance of
103
eligible trade receivables (as calculated in accordance with the Loan and Security Agreement) that are pledged as collateral
under the facility. In September 2023, the trade receivables securitization facility was amended to, among other things, extend its
term until September 30, 2024.
The trade receivables facility consists of certain of our wholly owned subsidiaries (“Originators”) selling or contributing on an on-
going basis all of the trade receivables generated by them (the “Pool Receivables”), 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 I LLC (“TRC”), in exchange for a combination of cash, equity and/or borrowings under a
subordinated note issued by TRC to one or more of the Originators. TRC may request borrowings and extensions of credit under
the Loan and Security Agreement for up to the lesser of the maximum capacity under the facility or the eligible trade receivables
balance of the Pool Receivables. TRC and each of the Originators have granted a security interest in all of their rights, title and
interests in and to the Pool Receivables, together with all related security and interests in the proceeds thereof, to the lenders to
secure the performance of TRC’s and the Originators’ payment and other obligations under the facility. In addition, MPC has
issued a performance guaranty in favor of the lenders guaranteeing the performance by TRC and the Originators of their
obligations under the facility.
To the extent that TRC retains an ownership interest in the Pool Receivables, 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 lenders to secure its obligations
under the Loan and Security Agreement.
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 Loan and Security Agreement and other documents comprising the facility 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 be eligible receivables that count towards the borrowing base under the trade receivables
facility. In addition, the lender’s commitments to extend loans and credits under the facility are subject to termination, and TRC
may be subject to default fees, upon the occurrence of certain events of default that are included in the Loan and Security
Agreement and other facility documentation, all of which we consider to be usual and customary for arrangements of this type.
As of December 31, 2023, we were in compliance with the covenants contained in the Loan and Security Agreement and other
facility documentation.
MPLX Bank Revolving Credit Facility
On July 7, 2022, MPLX entered into a new five-year revolving credit agreement (the “MPLX Credit Agreement”) to replace its
previous $3.5 billion credit facility that was scheduled to expire in July 2024. The MPLX Credit Agreement, among other things,
provides for a $2.0 billion unsecured revolving credit facility that matures in July 2027 and letter of credit issuing capacity under
the facility of up to $150 million. Letters of credit issuing capacity is included in, not in addition to, the $2.0 billion borrowing
capacity.
The borrowing capacity under the MPLX Credit Agreement may be increased by up to an additional $1.0 billion, subject to certain
conditions, including the consent of the lenders whose commitments would increase. In addition, the maturity date may be
extended, for up to two additional one year periods, subject to, among other conditions, the approval of lenders holding the
majority of the commitments then outstanding, provided that the commitments of any non-consenting lenders will terminate on
the then-effective maturity date.
Borrowings under the MPLX Credit Agreement bear interest, at MPLX’s election, at either the Adjusted Term SOFR 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, 2023, MPLX was in compliance with the covenants contained in the MPLX Credit Agreement.
104
21. Revenue
The following table presents our revenues from external customers disaggregated by segment and product line:
(Millions of dollars)
Refining & Marketing
Refined products
Crude oil
Services and other
Total revenues from external customers
Midstream
Refined products
Services and other(a)
Total revenues from external customers
2023
2022
2021
$
134,303
$
161,362
$
107,345
7,423
1,742
8,962
1,763
7,132
873
143,468
172,087
115,350
1,675
3,236
4,911
2,219
3,147
5,366
1,590
3,043
4,633
Sales and other operating revenues
$
148,379
$
177,453
$
119,983
(a)
Includes sales-type lease revenue. See Note 27.
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, 2023, 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, 2023 include matching
buy/sell receivables of $4.7 billion.
22. Supplemental Cash Flow Information
(Millions of dollars)
2023
2022
2021
Net cash provided by operating activities included:
Interest paid (net of amounts capitalized)
$
1,200
$
1,060
$
Income taxes paid to taxing authorities
Cash paid for amounts included in the measurement of lease
liabilities
Payments on operating leases
Interest payments under finance lease obligations
Net cash provided by financing activities included:
Principal payments under finance lease obligations
Non-cash investing and financing activities:
Right of use assets obtained in exchange for new operating lease
obligations
Right of use assets obtained in exchange for new finance lease
obligations
Contribution of assets(a)
Book value of equity method investment(b)
2,751
4,869
493
25
79
465
21
—
311
498
24
79
367
60
818
150
1,231
2,436
569
21
71
349
37
—
—
(a) Represents the book value of property, plant and equipment, inventory and working capital contributed by MPC to Martinez Renewables
LLC. See Note 15 for additional information.
(b)
2023 represents the book value of MPLX’s equity method investment in Torñado. prior to MPLX buying out the remaining interest in this
entity. 2022 represents the book value of MPC’s equity method investment in Watson Cogeneration Company and Crowley Ocean Partners
of $25 million and $125 million, respectively, prior to MPC buying out the remaining interest in these entities. See Note 15 for additional
information.
105
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:
(Millions of dollars)
Additions to property, plant and equipment per the consolidated
statements of cash flows
Increase (decrease) in capital accruals
Total capital expenditures
2023
2022
2021
$
$
1,890
$
2,420
$
184
(37)
2,074
$
2,383
$
1,464
141
1,605
23. Other Current Liabilities
The following summarizes the components of other current liabilities:
(Millions of dollars)
Environmental credits liability
Accrued interest payable
Other current liabilities
Total other current liabilities
December 31,
2023
2022
$
$
778 $
316
551
429
315
423
1,645 $
1,167
24. Accumulated Other Comprehensive Income (Loss)
The following table shows the changes in accumulated other comprehensive income (loss) by component. Amounts in
parentheses indicate debits.
(Millions of dollars)
Balance as of December 31, 2021
Other comprehensive income (loss) before reclassifications, net
of tax of $11
Amounts reclassified from accumulated other comprehensive
loss:
Amortization of prior service credit(a)
Amortization of actuarial loss(a)
Settlement loss(a)
Tax effect
Other comprehensive income (loss)
Balance as of December 31, 2022
(Millions of dollars)
Balance as of December 31, 2022
Other comprehensive income (loss) before reclassifications, net
of tax of $(22)
Amounts reclassified from accumulated other comprehensive
loss:
Amortization of prior service credit(a)
Amortization of actuarial gain(a)
Settlement gain(a)
Other
Tax effect
Other comprehensive income (loss)
Balance as of December 31, 2023
Pension
Benefits
Other
Benefits
Other
Total
$
(117)
$
49
$
1
$
(67)
(70)
129
(45)
4
79
(14)
(46)
$
(163)
$
(22)
6
—
3
116
165
$
(1)
—
—
—
—
(1)
—
$
58
(67)
10
79
(11)
69
2
Pension
Benefits
Other
Benefits
Other
Total
$
(163)
$
165
$
—
$
2
(60)
(45)
(5)
(1)
—
13
(98)
$
(261)
$
(21)
(22)
—
—
—
7
(36)
129
$
2
—
—
—
(1)
—
1
1
$
(79)
(67)
(5)
(1)
(1)
20
(133)
(131)
(a)
These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. See Note 25.
106
25. Pension and Other Postretirement Benefits
We have two noncontributory defined benefit pension plans. One plan is frozen and covered certain employees of our former
Speedway LLC subsidiary. The other plan is active and covers substantially all of our employees. Benefits under these plans are
based on a now frozen final average pay type of benefit based on age, years of service and final average pensionable earnings,
and a cash balance type of benefit. The years of service component for the final average pay type of benefit was frozen as of
December 31, 2009, and certain of the pensionable earnings components were frozen as of December 31, 2012. Benefits for the
cash balance type of benefit began on January 1, 2010 for our continuing active plan, and began on January 1, 2016 for our
frozen plan, and are based on a cash balance formula with an annual percentage of eligible pay credited based upon age and
years of service or at a flat rate of eligible pay, depending on covered employee group. Substantially all of our employees also
accrue benefits under a defined contribution plan.
(Millions of dollars)
2023
2022
2021
Cash balance weighted average interest crediting rates
3.57 %
3.00 %
3.00 %
We also have other postretirement benefits covering most employees. Retiree health care benefits are provided through
comprehensive hospital, surgical, major medical benefit, prescription drug and related health benefit provisions subject to various
cost sharing features. Retiree life insurance benefits are provided to a closed group of retirees. Other postretirement benefits are
not funded in advance.
In connection with the Andeavor acquisition, we assumed a number of additional qualified and nonqualified 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. Further, as of December 31, 2019, the qualified
plans were merged with our existing qualified plans in which the actuarial assumptions were materially the same between the
plans. 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 $2,441 million and $2,272 million as of
December 31, 2023 and 2022.
The following summarizes the projected benefit obligations and funded status for our defined benefit pension and other
postretirement plans:
(Millions of dollars)
2023
2022
2023
2022
Benefit obligations at January 1
$
2,359
$
3,295
$
650
$
Pension Benefits
Other Benefits
Service cost
Interest cost
Actuarial loss/(gain)
Benefits paid(a)
Benefit obligations at December 31
Fair value of plan assets at January 1
Actual return on plan assets
Employer contributions
Benefits paid from plan assets
Fair value of plan assets at December 31
195
116
184
(291)
2,563
1,838
266
269
(291)
2,082
228
102
(653)
(613)
2,359
3,043
(622)
30
(613)
1,838
18
31
31
(51)
679
—
—
51
(51)
—
828
26
21
(168)
(57)
650
—
—
57
(57)
—
Funded status at December 31
$
(481)
$
(521)
$
(679)
$
(650)
(a) Of the $613 million in benefits paid in 2022, $285 million is related to the pension annuity lift-out.
107
Amounts recognized in the consolidated balance sheet for our pension and other postretirement benefit plans at December 31
include:
(Millions of dollars)
Current liabilities
Noncurrent liabilities
Accrued benefit cost
Pension Benefits
Other Benefits
2023
2022
2023
2022
(8)
(473)
(7)
(514)
(50)
(629)
$
(481)
$
(521)
$
(679)
$
(50)
(600)
(650)
Included in accumulated other comprehensive loss at December 31 were the following before-tax amounts that had not been
recognized in net periodic benefit cost:
(Millions of dollars)
Net actuarial loss
Prior service credit
Pension Benefits
Other Benefits
2023
2022
2023
2022
$
467
$
386
$
50
$
(69)
(114)
(202)
19
(224)
Amounts exclude those related to LOOP and Explorer, equity method investees with defined benefit pension and postretirement
plans for which net losses (gains) of $10 million and $(5) million were recorded in accumulated other comprehensive income
(loss) in 2023, reflecting our ownership share.
Components of Net Periodic Benefit Cost and Other Comprehensive (Income) Loss
The following summarizes the net periodic benefit costs and the amounts recognized as other comprehensive loss (pretax) for
our defined benefit pension and other postretirement plans.
(Millions of dollars)
2023
2022
2021
2023
2022
2021
Pension Benefits
Other Benefits
Service cost
Interest cost
Expected return on plan assets
Amortization of prior service cost (credit)
Amortization of actuarial (gain) loss
Settlement (gain) loss
Net periodic benefit cost(a)
Actuarial (gain) loss
Prior service credit
Amortization of actuarial (gain) loss
Amortization of prior service (cost) credit
Total recognized in other comprehensive
(income) loss
Total recognized in net periodic benefit
cost and other comprehensive (income)
loss
$
$
$
$
201
116
(163)
(45)
(5)
(1)
230
102
(142)
(45)
4
79
$
287
$
93
(139)
(45)
37
75
103
$
228
$
308
$
75
—
6
45
$
109
$
(227)
$
—
(83)
45
—
(112)
45
$
$
$
18
31
—
(22)
—
—
27
31
—
—
22
26
21
—
(22)
6
—
31
$
$
34
30
—
2
10
1
77
(167)
$
—
(6)
22
(16)
(276)
(11)
(2)
$
126
$
71
$
(294)
$
53
$
(151)
$
(305)
$
229
$
299
$
14
$
80
$
(120)
$
(228)
(a)
Net periodic benefit cost reflects a calculated market-related value of plan assets which recognizes changes in fair value over three years.
For certain of our pension plans, lump sum payments to employees retiring in 2023, 2022 and 2021 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 2023, 2022 and 2021.
108
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 2023, 2022 and 2021.
Benefit obligation:
Discount rate
Rate of compensation increase
Net periodic benefit cost:
Discount rate
Expected long-term return on plan
assets
Rate of compensation increase
Pension Benefits
Other Benefits
2023
2022
2021
2023
2022
2021
4.85 %
4.18 %
5.04 %
4.18 %
2.82 %
5.70 %
4.88 %
4.18 %
5.08 %
4.18 %
2.93 %
5.70 %
5.10 %
3.33 %
2.70 %
5.08 %
2.93 %
2.55 %
7.00 %
4.18 %
5.75 %
4.18 %
5.75 %
5.70 %
— %
4.18 %
— %
4.18 %
— %
5.70 %
Expected Long-term Return on Plan Assets
The overall expected long-term return on plan assets assumption is determined based on an asset rate-of-return modeling tool
developed by a third-party investment group. The tool utilizes underlying assumptions based on actual returns by asset category
and inflation and takes into account our asset allocation to derive an expected long-term rate of return on those assets. Capital
market assumptions reflect the long-term capital market outlook. The assumptions for equity and fixed income investments are
developed using a building-block approach, reflecting observable inflation information and interest rate information available in
the fixed income markets. Long-term assumptions for other asset categories are based on historical results, current market
characteristics and the professional judgment of our internal and external investment teams.
Assumed Health Care Cost Trend
The following summarizes the assumed health care cost trend rates.
Health care cost trend rate assumed for the following year:
Medical: Pre-65
Prescription drugs
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate):
Medical: Pre-65
Prescription drugs
Year that the rate reaches the ultimate trend rate:
Medical: Pre-65
Prescription drugs
December 31,
2023
2022
2021
7.70 %
10.80 %
6.60 %
8.90 %
5.80 %
6.40 %
4.50 %
4.50 %
4.50 %
4.50 %
4.50 %
4.50 %
2032
2032
2031
2031
2030
2030
Increases in the post-65 medical plan premium for the Marathon Petroleum Health Plan and the Marathon Petroleum Retiree
Health Plan have been permanently eliminated.
Plan Investment Policies and Strategies
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
109
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, 2023, the primary plan’s targeted
asset allocation was 50 percent equity, private equity, real estate, and timber securities and 50 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, 2023 and 2022.
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.
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 the
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 the investment manager’s assessment of
assets held. These holdings are considered Level 3. Other investments classified as Level 1 include publicly traded depository
receipts, while Level 2 include derivative transactions.
110
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, 2023 and 2022.
(Millions of dollars)
Cash and cash
equivalents
Equity:
Common stocks
Mutual funds
Pooled funds
Fixed income:
Corporate
Government
Pooled funds
Private equity
Real estate
Other
Total investments, at fair
value
December 31, 2023
December 31, 2022
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
$
— $
63 $
— $
63
$
— $
3 $
— $
3
50
115
—
—
—
—
—
—
—
—
—
791
588
330
118
—
—
2
—
—
—
—
—
—
10
12
3
50
115
791
588
330
118
10
12
5
40
104
—
—
211
—
—
—
—
—
—
742
582
41
79
—
—
5
—
—
—
—
—
—
13
14
4
40
104
742
582
252
79
13
14
9
$
165 $ 1,892 $
25 $ 2,082
$
355 $ 1,452 $
31 $ 1,838
Cash Flows
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 2023, we made contributions totaling $258 million to our funded
pension plans. For 2024, we do not project any required funding, but we may make voluntary contributions to our funded pension
plans at our discretion. Cash contributions to be paid from our general assets for the unfunded pension and postretirement plans
are estimated to be approximately $8 million and $50 million, respectively, in 2024.
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.
(Millions of dollars)
Pension Benefits
Other Benefits
2024
2025
2026
2027
2028
2029 through 2033
Contributions to defined contribution plan
$
$
147
168
177
183
194
1,100
50
51
51
52
52
266
We also contribute to a defined contribution plan for eligible employees. Contributions to this plan totaled $176 million, $167
million and $165 million in 2023, 2022 and 2021, respectively.
111
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 2023, 2022 and 2021 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 2023 and 2022 is for the plan
years ending on December 31, 2022 and December 31, 2021, 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 2023, 2022 and 2021 contributions. Our portion
of the contributions does not make up more than five percent of total contributions to the plan.
Pension Fund
EIN
2023
2022
Pension
Protection
Act Zone
Status
FIP/
RP Status
Pending/
Implemented
MPC Contributions
(Millions of dollars)
2023
2022
2021
Surcharge
Imposed
Central States, Southeast
and Southwest Areas
Pension Plan(a)(b)
366044243
Red
Red
Implemented
$
5
$
5
$
5
No
Expiration
Date of
Collective –
Bargaining
Agreement
January 31,
2024
(a)
(b)
This agreement has a minimum contribution requirement of $338 per week per employee for 2024. A total of 278 employees participated in
the plan as of December 31, 2023.
The parties to the expired agreement continue operating under the relevant terms of the expired agreement while negotiating a successor
agreement.
Multiemployer Health and Welfare Plan
We contribute to one multiemployer health and welfare plan that covers both active employees and retirees. Through the health
and welfare plan, employees receive medical, dental, vision, prescription and disability coverage. Our contributions to this plan
totaled $7 million, $7 million and $7 million for 2023, 2022 and 2021, respectively.
26. Share-Based Compensation
Description of the Incentive Plans
Our employees and non-employee directors are eligible to receive share, share-based and other types of awards under the
Marathon Petroleum Corporation 2021 Incentive Compensation Plan (“MPC 2021 Plan”). The MPC 2021 Plan authorizes the
Compensation and Organization Development Committee of our board of directors (“Committee”) to grant nonqualified or
incentive stock options, stock appreciation rights, share and share-based awards (including restricted stock and restricted stock
unit awards), cash awards and performance awards to our employees and non-employee directors. The maximum number of
shares of our common stock available for awards under the MPC 2021 Plan is 20.5 million shares. The MPC 2021 Plan became
effective upon shareholder approval on April 28, 2021. Prior to that date, our employees and non-employee directors were
eligible to receive share, share-based and other types of awards under the Amended and Restated Marathon Petroleum
Corporation 2012 Incentive Compensation Plan (“MPC 2012 Plan”), effective April 26, 2012, and prior to that date, the Marathon
Petroleum Corporation 2011 Second Amended and Restated Incentive Compensation Plan (“MPC 2011 Plan”). Shares issued as
a result of awards granted under these plans are funded through the issuance of new MPC common shares.
Share-Based Awards under the Plans
Stock Options
Prior to 2021, we granted stock options to certain officer and non-officer employees under the MPC 2011 Plan and the MPC
2012 Plan. Stock options represent the right to purchase shares of our common stock at an exercise price equal to the closing
price of our common stock on the date of grant. Stock options generally vest over a service period of three years and expire ten
years after the grant date. We expensed stock options based on the grant date fair value of the awards over the requisite service
period, adjusted for estimated forfeitures. We used the Black Scholes option-pricing model to estimate the fair value of stock
options granted, which requires the input of subjective assumptions.
112
Restricted Stock and Restricted Stock Units
We grant restricted stock units to certain employees and to our non-employee directors. Prior to 2021, we granted restricted
stock to certain employees and to our 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 awards and restricted stock unit awards granted
to officers prior to 2022 are subject to an additional one-year holding period after the three-year vesting period. Restricted stock
recipients have the right to vote such stock; however, dividends are accrued and when vested are payable at the dates specified
in the awards. The non-vested shares are not transferable and are held by our transfer agent. 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 any shares of stock and accrue dividend equivalents which when vested are payable at the dates specified
in the awards. We expense restricted stock and restricted stock units based on the grant date fair value of the awards over the
requisite service period, adjusted for estimated forfeitures. The fair values of restricted stock and restricted stock units are equal
to the market price of our common stock on the grant date.
Performance Units and Performance Share Units
We grant performance share unit awards to certain officer and non-officer employees. At grant, a performance share unit has a
target value equal to the MPC common stock average 30-day closing price prior to the grant date. The actual payout value of a
performance share unit is based on company performance (which can range from 0 percent to 200 percent) for the three-year
performance period beginning January 1 of the year of grant, multiplied by, for the awards granted in 2021 and 2022, MPC’s
closing share price on the date the Committee certifies performance; and for the awards granted in 2023, MPC’s average closing
share price for the final thirty calendar days at the end of the performance period. Company performance for purposes of payout
will be determined by the relative ranking of the total shareholder return (“TSR”) of MPC common stock over the three-year
performance period compared to the TSR of a select group of peer companies, the Standard & Poor’s 500 Index, the Alerian
MLP Index, as well as the median of MPC’s compensation reference group applicable for the year the award is granted. These
awards settle 100 percent in cash and are accounted for as liability awards. We expense liability-classified performance share
unit awards at fair value over the requisite service period, with mark-to-market adjustments made each quarter until payout
occurs. The fair value is determined using a Monte Carlo valuation model.
Significant assumptions used in our Monte Carlo valuation models include: 1) risk free interest rate, for which we utilize the
treasury rate for the time period closest to the remaining performance period of the award being valued; 2) look-back period (in
years), for which we utilize the remaining performance period of the award being valued; and 3) expected volatility, for which we
utilize the historical volatility of our own stock and the stock of our peer group for the look-back period previously discussed.
In general, performance share units granted to officers have a vesting service period beginning on the grant date and ending on
the last day of the three-year performance period, and performance share units granted to employees outside of our senior
management vest in one-third increments at the end of each calendar year of the performance period. However, certain
employees are eligible to vest in some awards earlier, subject to reaching certain age and employment milestones, with payout
still occurring at the end of the original performance period.
No performance share unit awards were granted prior to 2021. Prior to 2021, we granted performance unit awards to certain
officer employees under the MPC 2012 Plan. Performance units were dollar-denominated. The target value of all performance
units was $1.00, with actual payout up to $2.00 per unit (up to 200 percent of target). Performance unit awards had a 36-month
requisite service period. The payout value of these awards was determined by the relative ranking of the 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 were settled 25 percent in MPC common stock and 75 percent in cash.
The number of shares actually distributed was determined as 25 percent of the final payout divided 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 were accounted for as liability awards and recorded at
fair value with a mark-to-market adjustment made each quarter, as determined using a Monte Carlo valuation model. The
performance units that settle in shares were accounted for as share awards, did not receive dividend equivalents and were
expensed at grant date fair value, over the requisite service period. The grant date fair value was determined using a Monte
Carlo valuation model. All outstanding performance unit awards were paid out during 2023; no performance unit awards remain
outstanding at December 31, 2023.
Total Share-Based Compensation Expense
The following table reflects activity related to our share-based compensation arrangements:
(Millions of dollars)
2023
2022
2021
Share-based compensation expense
$
211
$
153
$
Tax benefit recognized on share-based compensation expense
Cash received by MPC upon exercise of stock option awards
Tax benefit received for tax deductions for stock awards exercised
51
62
49
37
243
53
88
22
106
13
113
Stock Option Awards
The following is a summary of our common stock option activity in 2023:
Outstanding at December 31, 2022
Exercised
Forfeited or expired
Outstanding at December 31, 2023(a)
Number of
Shares
Weighted
Average
Exercise Price
2,489,234
$
(1,445,223)
—
1,044,011
46.78
42.95
—
52.07
Weighted
Average
Remaining
Contractual
Terms (in years)
Aggregate
Intrinsic
Value
(Millions of
dollars)
2.2
$
101
(a) All options outstanding at December 31, 2023 are fully vested and exercisable.
The intrinsic value of options exercised by MPC employees during 2023, 2022 and 2021 was $136 million, $247 million and $88
million, respectively.
As of December 31, 2023, there was no unrecognized compensation cost related to stock option awards.
Restricted Stock and Restricted Stock Unit Awards
The following is a summary of restricted stock and restricted stock unit award activity of our common stock in 2023:
Restricted Stock
Restricted Stock Units
Number of
Shares
Weighted
Average
Grant Date
Fair Value
Unvested at December 31, 2022
691
$
Granted
Vested
Forfeited
Unvested at December 31, 2023
—
(691)
—
—
54.60
—
54.60
—
—
Number of
Units
1,786,150
$
601,161
(1,115,810)
(78,797)
1,192,704
Weighted
Average
Grant Date
Fair Value
50.36
133.94
41.78
85.85
98.16
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
(Millions of
dollars)
Weighted
Average Grant
Date Fair Value
of Awards
Granted During
the Period
Intrinsic Value
of Awards
Vested During
the Period
(Millions of
dollars)
Weighted
Average Grant
Date Fair Value
of Awards
Granted During
the Period
$
$
—
17
20
—
—
—
$
144
$
133.94
99
90
75.81
55.27
2023
2022
2021
As of December 31, 2023, there was no unrecognized compensation cost related to restricted stock awards. Unrecognized
compensation cost related to restricted stock unit awards was $75 million, which is expected to be recognized over a weighted
average period of 2.0 years.
114
Performance Awards
The following is a summary of performance share unit awards activity in 2023:
Unvested at December 31, 2022
Granted
Vested
Forfeited
Unvested at December 31, 2023
Number of
Performance
Share Units
862,313
295,296
(549,905)
(27,038)
580,666
We paid $14 million, $26 million and $10 million during the years ended 2023, 2022 and 2021, respectively, to settle performance
unit awards. No cash was paid during the same years to settle performance share unit awards.
As of December 31, 2023, unrecognized compensation cost related to performance awards was $55 million, which is expected to
be recognized over a weighted average period of 1.3 years. As of December 31, 2023, the total liability associated with
performance awards was $279 million.
MPLX Awards
Compensation expense for awards of MPLX units are not material to our consolidated financial statements for 2023.
27. Leases
Lessee
We lease a wide variety of facilities and equipment including land and building space, office and field equipment, storage facilities
and transportation equipment. Our remaining lease terms range from less than one year to 95 years. Most long-term leases
include renewal options ranging from less than one year to 49 years and, in certain leases, also include purchase options. The
lease term included in the measurement of right of use assets and lease liabilities includes options to extend or terminate our
leases that we are reasonably certain to exercise.
Under ASC 842, the components of lease cost are shown below. Lease costs for operating leases are recognized on a straight
line basis and are reflected in the income statement based on the leased asset’s use. Lease costs for finance leases are
reflected in depreciation and amortization and in net interest and other financial costs.
(Millions of dollars)
Finance lease cost:
Amortization of right of use assets
Interest on lease liabilities
Operating lease cost
Variable lease cost
Short-term lease cost
Total lease cost
2023
2022
2021
$
$
73
25
489
54
881
$
81
29
490
59
772
78
31
565
62
446
$
1,522
$
1,431
$
1,182
115
Supplemental consolidated balance sheet data related to leases were as follows:
(Millions of dollars)
Operating leases
Assets
Right of use assets
Liabilities
Operating lease liabilities
Long-term operating lease liabilities
Total operating lease liabilities
Weighted average remaining lease term (in years)
Weighted average discount rate
Finance leases
Assets
Property, plant and equipment, gross
Less accumulated depreciation
Property, plant and equipment, net
Liabilities
Debt due within one year
Long-term debt
Total finance lease liabilities
Weighted average remaining lease term (in years)
Weighted average discount rate
December 31,
2023
2022
$
$
$
$
$
$
$
$
$
$
$
$
$
$
1,233
454
764
1,218
4
4.1 %
765
413
352
69
401
470
9
5.1 %
1,214
368
841
1,209
5
3.5 %
818
412
406
79
451
530
9
5.1 %
As of December 31, 2023, maturities of lease liabilities for operating lease obligations and finance lease obligations having initial
or remaining non-cancellable lease terms in excess of one year are as follows:
(Millions of dollars)
Operating
Finance
2024
2025
2026
2027
2028
2029 and thereafter
Gross lease payments
Less: imputed interest
Total lease liabilities
Lessor
$
$
494
356
181
100
66
128
1,325
107
$
1,218
$
91
82
79
63
47
228
590
120
470
MPLX is considered to be the lessor under several operating lease agreements in accordance with GAAP related to certain fee-
based natural gas transportation and processing agreements in the Marcellus and Southern Appalachia region. The primary term
of these agreements expire between 2026 and 2036, however, these contracts either have renewal options or will continue
thereafter on a year-to-year basis until terminated by either party.
MPLX did not elect to use the practical expedient to combine lease and non-lease components for lessor arrangements. The
tables below represent the portion of the contract allocated to the lease component based on relative standalone selling price.
MPLX elected the practical expedient to carry forward historical classification conclusions until a modification of an existing
agreement occurs. Once a modification occurs, the amended agreement is required to be assessed under ASC 842 to determine
whether a reclassification of the lease is required.
116
—
—
—
117
95
75
53
46
250
636
During the third quarter of 2022, the approved expansion of a gathering and compression system triggered the first assessment
of a third party agreement under ASC 842. As a result of the assessment during the period, the lease was reclassified from an
operating lease to a sales-type lease. Accordingly, the underlying property, plant and equipment of $745 million and associated
deferred revenue of $277 million were derecognized. The present value of the future lease payments of $914 million and the
unguaranteed residual value of $63 million were recorded as the net investment in the lease within receivables and other
noncurrent assets. This resulted in a gain of approximately $509 million, which was recorded as a net gain on disposal of assets
in the consolidated statements of income. This transaction was a non-cash transaction.
Lease revenues are included in sales and other operating revenues on the consolidated statements of income. Lease revenues
were as follows:
(Millions of dollars)
Operating leases:
Rental income
Sales-type leases:
Interest income (Sales-type rental revenue-fixed minimum)
Interest income (Revenue from variable lease payments)
Sales-type lease revenue
$
$
2023
2022
2021
243
$
327
$
376
114
22
136
$
46
16
62
$
The following is a schedule of minimum future rentals on the non-cancelable operating leases as of December 31, 2023:
(Millions of dollars)
2024
2025
2026
2027
2028
2029 and thereafter
Total minimum future rentals
$
$
Annual minimum undiscounted lease payment receipts under our sales-type leases were as follows as of December 31, 2023:
(Millions of dollars)
2024
2025
2026
2027
2028
2029 and thereafter
Total minimum future rentals
Less: imputed interest
Lease receivables(a)
Current lease receivables(b)
Long-term lease receivables(c)
Unguaranteed residual assets
Total sales-type lease assets
$
$
$
$
175
161
150
141
132
959
1,718
778
940
102
838
78
1,018
(a)
(b)
(c)
This amount does not include the unguaranteed residual assets.
Presented in receivables, net on the consolidated balance sheets.
Presented in other noncurrent assets on the consolidated balance sheets.
Capital expenditures related to assets subject to sales-type lease arrangements were $50 million for the year ended
December 31, 2023. These amounts are reflected as additions to property, plant and equipment in the consolidated statements
of cash flows.
117
The following schedule summarizes our investment in assets held under operating lease by major classes as of December 31,
2023 and 2022:
(Millions of dollars)
Gathering and transportation
Processing and fractionation
Pipelines
Terminals
Land, building and other
Property, plant and equipment
Less accumulated depreciation
December 31,
2023
2022
$
86
$
1,000
12
129
10
1,237
396
841
$
94
973
—
128
10
1,205
330
875
Total property, plant and equipment, net
$
28. 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 a liability, we are unable to estimate a range of possible loss because the issues
involved have not been fully developed through pleadings, discovery or court proceedings. 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 both December 31, 2023 and December 31, 2022, accrued liabilities for remediation totaled $387 million. It is not presently
possible to estimate the ultimate amount of all remediation costs that might be incurred or the penalties, if any, that may be
imposed. Receivables for recoverable costs from certain states, under programs to assist companies in clean-up efforts related
to underground storage tanks at presently or formerly owned or operated retail marketing sites, were $5 million at both
December 31, 2023 and December 31, 2022.
Governmental and other entities in various states have filed climate-related lawsuits against a number of energy companies,
including MPC. Although each suit is separate and unique, the lawsuits generally allege defendants made knowing
misrepresentations about knowingly concealing, or failing to warn of the impacts of their petroleum products, which led to
increased demand and worsened climate change. Plaintiffs are seeking unspecified damages and abatement under various tort
theories, as well as breaches of consumer protection and unfair trade statutes. We are currently subject to such proceedings in
federal or state courts in California, Delaware, Maryland, Hawaii, Rhode Island, South Carolina and Oregon. 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.
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.
Asset Retirement Obligations
Our short-term asset retirement obligations were $24 million and $27 million at December 31, 2023 and 2022, respectively, and
are included in other current liabilities in our consolidated balance sheets. Our long-term asset retirement obligations were $218
million and $186 million at December 31, 2023 and 2022, respectively, which are included in deferred credits and other liabilities
in our consolidated balance sheets.
Other Legal Proceedings
In July 2020, Tesoro High Plains Pipeline Company, LLC (“THPP”), a subsidiary of MPLX, received a Notification of Trespass
Determination from the Bureau of Indian Affairs (“BIA”) relating to a portion of the Tesoro High Plains Pipeline that crosses the
Fort Berthold Reservation in North Dakota. The notification demanded the immediate cessation of pipeline operations and
assessed trespass damages of approximately $187 million. After subsequent appeal proceedings and in compliance with a new
order issued by the BIA, in December 2020, THPP paid approximately $4 million in assessed trespass damages and ceased use
118
of the portion of the pipeline that crosses the property at issue. In March 2021, the BIA issued an order purporting to vacate the
BIA's prior orders related to THPP’s alleged trespass and direct the Regional Director of the BIA to reconsider the issue of
THPP’s alleged trespass and issue a new order. In April 2021, THPP filed a lawsuit in the District of North Dakota against the
United States of America, the U.S. Department of the Interior and the BIA (collectively, the “U.S. Government Parties”)
challenging the March 2021 order purporting to vacate all previous orders related to THPP’s alleged trespass. On February 8,
2022, the U.S. Government Parties filed their answer and counterclaims to THPP’s suit claiming THPP is in continued trespass
with respect to the pipeline and seek disgorgement of pipeline profits from June 1, 2013 to present, removal of the pipeline and
remediation. On November 8, 2023, the Court granted THPP’s motion to sever and stay the U.S. Government Parties’
counterclaims. The case will proceed on the merits of THPP’s challenge to the March 2021 order purporting to vacate all
previous orders related to THPP’s alleged trespass.
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, individually or collectively, 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
LOOP and LOCAP
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 varies but tend to follow
the terms of the underlying debt, which extend through 2040. Our maximum potential undiscounted payments under these
agreements for the debt principal totaled $222 million as of December 31, 2023.
Dakota Access Pipeline
MPLX holds a 9.19 percent indirect interest in Dakota Access, which owns and operates the Bakken Pipeline system. In 2020,
the U.S. District Court for the District of Columbia (the “D.D.C.”) ordered the U.S. Army Corps of Engineers (“Army Corps”), which
granted permits and an easement for the Bakken Pipeline system, to prepare an environmental impact statement (“EIS”) relating
to an easement under Lake Oahe in North Dakota. The D.D.C. later vacated the easement. The Army Corps issued a draft EIS in
September 2023 detailing various options for the easement going forward, including denying the easement, approving the
easement with additional measures, rerouting the easement, or approving the easement with no changes. The Army Corps has
not selected a preferred alternative, but will make a decision in its final review, after considering input from the public and other
agencies. The pipeline remains operational while the Army Corps finalizes its decision which is expected to be issued by the end
of 2024.
MPLX has entered into a Contingent Equity Contribution Agreement whereby it, along with the other joint venture owners in the
Bakken Pipeline system, has agreed to make equity contributions to the joint venture upon certain events occurring to allow the
entities that own and operate the Bakken Pipeline system to satisfy their senior note payment obligations. The senior notes were
issued to repay amounts owed by the pipeline companies to fund the cost of construction of the Bakken Pipeline system. If the
vacation of the easement results in a temporary shutdown of the pipeline, MPLX would have to contribute its 9.19 percent pro
rata share of funds required to pay interest accruing on the notes and any portion of the principal that matures while the pipeline
is shutdown. MPLX also expects to contribute its 9.19 percent pro rata share of any costs to remediate any deficiencies to
reinstate the easement and/or return the pipeline into operation. If the vacation of the easement results in a permanent shutdown
of the pipeline, MPLX would have to contribute its 9.19 percent pro rata share of the cost to redeem the bonds (including the 1
percent redemption premium required pursuant to the indenture governing the notes) and any accrued and unpaid interest. As
of December 31, 2023, our maximum potential undiscounted payments under the Contingent Equity Contribution Agreement
were approximately $170 million.
Crowley Blue Water Partners
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. As of
December 31, 2023, our maximum potential undiscounted payments under this arrangement were $94 million.
119
Marathon Oil indemnifications
The separation and distribution agreement and other agreements with Marathon Oil to effect our 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 $113 million as of December 31,
2023, which primarily consist of a commitment to contribute cash to an equity method investee for certain catastrophic events, in
lieu of procuring insurance coverage, a commitment to fund a share of the bonds issued by a government entity for construction
of public utilities in the event that other industrial users of the facility default on their utility payments, a commitment to pay a
termination fee on a supply agreement if terminated during the initial term, 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, 2023, our contractual commitments to acquire property, plant and equipment totaled $281 million. Our
contractual commitments to acquire property, plant and equipment totaled $289 million at December 31, 2022.
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.
120
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 Rule
13a-15(e) under the Securities Exchange Act of 1934, as amended) was carried out under the supervision and with the
participation of our management, including our chief executive officer and chief financial officer. Based upon that evaluation, the
chief executive officer and chief financial officer concluded that the design and operation of these disclosure controls and
procedures were effective as of December 31, 2023, the end of the period covered by this Annual Report on Form 10-K.
Changes in Internal Control over Financial Reporting
During the quarter ended December 31, 2023, there were no changes in our internal control over financial reporting that have
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
During the quarter ended December 31, 2023, no director or officer (as defined in Rule 16a-1(f) promulgated under the
Exchange Act) of MPC adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading
arrangement” (as each term is defined in Item 408 of Regulation S-K).
Item 9C. Disclosures Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable
121
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 “Corporate Governance—Proposal 1. Election of Directors” in our Proxy
Statement for the 2024 Annual Meeting of Shareholders, to be filed with the SEC within 120 days of December 31, 2023 (the
“Proxy Statement”).
Our Code of Business Conduct, which applies to all of our directors, officers and employees, defines our expectations for ethical
decision-making, accountability and responsibility. Our Code of Ethics for Senior Financial Officers, which is specifically
applicable to our Chief Executive Officer, Chief Financial Officer, Controller and Treasurer, and other leaders performing similar
functions, affirms the principle that the honesty, integrity and sound judgment of our senior executives with responsibility for
preparation and certification of our financial statements is essential to the proper functioning and success of our company. These
codes are available on our website at www.marathonpetroleum.com/Investors/Corporate-Governance/. We would post on our
website any amendments to, or waivers from, either of these codes requiring disclosure under applicable rules within four
business days following any such amendment or waiver. Information contained on our website is not incorporated into this
Annual Report on Form 10-K or other securities filings.
The other information required by this Item is incorporated by reference to “Corporate Governance—Board Leadership and
Function—Board Committees” in our Proxy Statement.
Item 11. Executive Compensation
Information required by this Item is incorporated by reference to “Executive Compensation,” “Executive Compensation—
Executive Compensation Tables” (excluding the information under the subheading “Pay Versus Performance”) and “Corporate
Governance—Director Compensation” in our Proxy Statement.
122
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 “Other Information—Stock Ownership Information” in our Proxy Statement.
Securities Authorized for Issuance Under Equity Compensation Plans
The following table provides information as of December 31, 2023 with respect to shares of our common stock that may be
issued under the MPC 2021 Plan, the MPC 2012 Plan and the MPC 2011 Plan:
Plan category
Equity compensation plans approved by stockholders
Equity compensation plan not approved by stockholders
Total
(a)
Includes the following:
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)
2,484,770 $
—
2,484,770
52.07
—
N/A
19,664,577
—
19,664,577
1)
1,044,011 stock options granted pursuant to the MPC 2012 Plan and not forfeited, cancelled or expired as of December 31, 2023; and
2) 1,440,759 restricted stock units granted pursuant to the MPC 2021 Plan, the MPC 2012 Plan and the MPC 2011 Plan for shares
unissued and not forfeited, cancelled or expired as of December 31, 2023.
(b)
(c)
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.
Reflects the shares available for issuance pursuant to the MPC 2021 Plan. All granting authority under the MPC 2012 Plan was revoked
following the approval of the MPC 2021 Plan by shareholders on April 28, 2021. All granting authority under the MPC 2011 Plan was
revoked following the approval of the MPC 2012 Plan by shareholders on April 25, 2012. Shares that (i) relate to grants made pursuant to
the MPC 2012 Plan that are forfeited, cancelled or expire unexercised or (ii) are withheld or tendered to satisfy taxes related to vestings of
restricted stock units under the MPC 2012 Plan, in each case, become immediately available for issuance under the MPC 2021 Plan.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Information required by this Item is incorporated by reference to “Other Information—Related Party Transactions” and “Corporate
Governance—Board Composition and Director Selection—Director Independence” in our Proxy Statement.
Item 14. Principal Accountant Fees and Services
Information required by this Item is incorporated by reference to “Audit Matters—Auditor Fees and Services” in our Proxy
Statement.
123
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
2
2.1 †
2.2
2.3 †
3
3.1
3.2
4
Exhibit Description
Form
Exhibit
Filing
Date
SEC
File No.
Filed
Herewith
Furnished
Herewith
Incorporated by Reference
Plan of Acquisition, Reorganization,
Arrangement, Liquidation or Succession
Purchase and Sale Agreement, dated as of
August 2, 2020, by and between MPC, the
MPC subsidiaries party thereto and 7-Eleven,
Inc.
Amendment to Purchase and Sale
Agreement, dated as of October 16, 2020, by
and among MPC, the MPC subsidiaries party
thereto and 7-Eleven, Inc.
Amendment No. 2 to Purchase and Sale
Agreement, dated as of May 14, 2021, by and
among the Company, Sellers and Purchaser
Articles of Incorporation and Bylaws
Restated Certificate of Incorporation of
Marathon Petroleum Corporation, dated April
26, 2023
Amended and Restated Bylaws of Marathon
Petroleum Corporation, dated October 27,
2021
Instruments Defining the Rights of
Security Holders, Including Indentures,
and Description of Registrant’s Securities
8-K
2.1
8/3/2020
001-35054
10-K
2.7
2/26/2021
001-35054
8-K
2.3
5/14/2021
001-35054
8-K
3.2
4/27/2023
001-35054
10-Q
3.2
11/2/2021
001-35054
Pursuant to Item 601(b)(4) of Regulation S-K, certain instruments with respect to long-term debt issues have been omitted where the amount of
securities authorized under such instruments does not exceed 10 percent of the total consolidated assets of the Registrant. The Registrant
hereby agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon its request.
4.1
001-35054
3/29/2011
4.1
10
4.2
4.3
10
10.1
10.2 *
10.3 *
10.4 *
Indenture, dated as of February 1, 2011,
between Marathon Petroleum Corporation
and The Bank of New York Mellon Trust
Company, N.A., as Trustee
Indenture, dated February 12, 2015, between
MPLX LP and The Bank of New York Mellon
Trust Company, N.A., as Trustee
Description of Securities
Material Contracts
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
Marathon Petroleum Corporation Second
Amended and Restated 2011 Incentive
Compensation Plan
Marathon Petroleum Corporation Policy for
Recoupment of Annual Cash Bonus Amounts
Form of Marathon Petroleum Corporation
2011 Incentive Compensation Plan
Supplemental Restricted Stock Unit Award
Agreement – Non-Employee Director
8-K
4.1
2/12/2015
001-35714
10-K
4.3
2/23/2023
001-35054
8-K
10.2
11/6/2012
001-35054
S-3
4.3
12/7/2011
333-175286
10-K
10-K
10.10
2/29/2012
001-35054
10.22
2/29/2012
001-35054
124
Exhibit
Number
10.5 *
10.6 *
10.7 *
10.8 *
10.9 *
10.10 *
10.11 *
10.12 *
10.13 *
10.14 *
10.15 *
10.16 *
10.17 *
10.18 *
10.19 *
10.20 *
10.21 *
10.22 *
10.23 *
10.24 *
10.25 *
Exhibit Description
Marathon Petroleum Corporation Amended
and Restated Executive Change in Control
Severance Benefits Plan
MPLX LP 2012 Incentive Compensation Plan
MPC Non-Employee Director Phantom Unit
Award Policy
First Amendment to the Marathon Petroleum
Corporation Amended and Restated 2011
Incentive Compensation Plan
MPLX LP Executive Change in Control
Severance Benefits Plan
MPLX LP 2018 Incentive Compensation Plan
Marathon Petroleum Corporation Deferred
Compensation Plan for Non-Employee
Directors, as amended and restated January
1, 2019
MPLX LP 2018 Incentive Compensation Plan
MPC Non-Employee Director Phantom Unit
Award Policy
Amended and Restated Marathon Petroleum
Corporation 2012 Incentive Compensation
Plan
First Amendment to the Amended and
Restated Marathon Petroleum Corporation
2012 Incentive Compensation Plan
Nonqualified Stock Option Award Agreement -
Officer
Form of 2020 Officer Stock Option Award
Agreement
Aircraft Time Sharing Agreement, dated as of
December 29, 2020, by and between
Marathon Petroleum Company LP and
Michael J. Hennigan
Form of 2021 MPC Officer RSU Award
Agreement
Form of 2021 MPC Performance Share Unit
Award Agreement 2021 - 2023 Performance
Cycle
Form of 2021 MPLX LP Phantom Unit Award
Agreement - MPC Officer
Marathon Petroleum Executive Deferred
Compensation Plan, effective January 1, 2021
Marathon Petroleum Executive Deferred
Compensation Plan Adoption Agreement,
effective January 1, 2021
Form of 2021 MPC Restricted Stock Unit
Award – Broad-Based Employees
Form of 2021 MPC Performance Share Unit
Award Agreement – 2021-2023 Performance
Cycle – Broad-Based Employees
Marathon Petroleum Corporation 2021
Incentive Compensation Plan
Form of 2022 MPC Officer Performance Unit
Award Agreement – 2022-2024 Performance
Cycle
Incorporated by Reference
Form
10-K
Exhibit
10.21
Filing
Date
2/28/2018
SEC
File No.
001-35054
Filed
Herewith
Furnished
Herewith
10-K
10.32
2/28/2013
001-35054
10-Q
10.1
8/3/2015
001-35054
10-Q
10.4
10/30/2017
001-35054
8-K
10-K
10.1
10.75
3/5/2018
001-35714
2/28/2019
001-35054
10-K
10.86
2/28/2019
001-35054
10-K
10.87
2/28/2019
001-35054
10-K
10.84
2/28/2020
001-35054
10-Q
10-Q
10.2
10.3
5/9/2019
001-35054
5/7/2020
001-35054
10-K
10.67
2/26/2021
001-35054
10-K
10-K
10-K
10-K
10-K
10-K
10-K
10.69
2/26/2021
001-35054
10.70
2/26/2021
001-35054
10.71
2/26/2021
001-35054
10.73
2/26/2021
001-35054
10.74
2/26/2021
001-35054
10.75
2/26/2021
001-35054
10.76
2/26/2021
001-35054
8-K
10.1
5/4/2021
001-35054
10-K
10.64
2/24/2022
001-35054
10.26 *
Form of 2022 MPC Officer RSU Award
Agreement – 3-year Pro Rata Vesting
10-Q
10.5
5/3/2022
001-35054
125
Exhibit
Number
10.27
10.28
10.29 *
10.30 *
10.31 *
10.32 *
10.33 *
10.34 *
10.35 *
10.36 *
10.37 *
10.38 *
10.39 *
10.40 *
10.41 *
10.42 *
10.43 *
10.44 *
10.45 *
21.1
Exhibit Description
Revolving Credit Agreement, dated as of July
7, 2022, by and among Marathon Petroleum
Corporation, as borrower, JPMorgan Chase
Bank, N.A., as administrative agent, each of
JPMorgan Chase Bank, N.A., Wells Fargo
Securities, LLC, Barclays Bank PLC, BofA
Securities, Inc., Citibank, N.A., Mizuho Bank,
Ltd., MUFG Bank, Ltd., RBC Capital Markets,
and TD Securities (USA) LLC, 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., Royal Bank of
Canada and The Toronto-Dominion Bank,
New York Branch, as documentation agents,
and the other lenders and issuing banks that
are parties thereto
Revolving Credit Agreement, dated as of July
7, 2022, by and 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, BofA
Securities, Inc., Citibank, N.A., Mizuho Bank,
Ltd., MUFG Bank, Ltd., RBC Capital Markets
and TD Securities (USA) LLC, 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,
Citibank, N.A., Mizuho Bank, Ltd., MUFG
Bank, Ltd., Royal Bank of Canada and The
Toronto-Dominion Bank, New York Branch, as
documentation agents, and the other lenders
and issuing banks that are parties thereto
2023 Marathon Petroleum Annual Cash
Bonus Program
Form of 2023 MPC Officer Performance
Share Unit Award Agreement – 2023-2025
Performance Period
Form of 2023 MPC Officer RSU Award
Agreement - 2021 Plan
Marathon Petroleum Thrift Plan, as amended
and restated effective January 1, 2023
Form of 2023 MPLX Phantom Unit Award
Agreement
First Amendment to the Marathon Petroleum
Thrift Plan
Second Amendment to the Marathon
Petroleum Thrift Plan
Third Amendment to the Marathon Petroleum
Thrift Plan
Fourth Amendment to the Marathon
Petroleum Thrift Plan
MPLX 2012 Incentive Compensation Plan
Form of 2022 MPLX Phantom Unit Award
Agreement
First Amendment to the MPLX 2018 Incentive
Compensation Plan
Form of MPC Officer Performance Unit Award
Agreement – 2024-2026 Performance Cycle
Form of 2024 MPC Officer RSU Award
Agreement
2024 Marathon Petroleum Annual Cash
Bonus Program
Marathon Petroleum Deferred Compensation
Plan (as amended and restated effective
December 31, 2023)
Marathon Petroleum Excess Benefit Plan (as
amended and restated effective December
31, 2023)
List of Subsidiaries
Incorporated by Reference
Form
8-K
Exhibit
10.1
Filing
Date
7/12/2022
SEC
File No.
001-35054
Filed
Herewith
Furnished
Herewith
8-K
10.2
7/12/2022
001-35054
10-K
10-K
10-K
10-K
10-K
10-Q
10-Q
10.47
2/23/2023
001-35054
10.48
2/23/2023
001-35054
10.49
2/23/2023
001-35054
10.50
2/23/2023
001-35054
10.52
2/23/2023
001-35054
10.3
10.1
5/2/2023
001-35054
8/1/2023
001-35054
10-K
10-Q
10.26
10.1
3/25/2013
001-35714
5/3/2022
001-35714
10-K
10.75
2/28/2020
001-35714
126
X
X
X
X
X
X
X
X
Incorporated by Reference
Exhibit
Number
23.1
24.1
31.1
31.2
32.1
32.2
97.1
101.INS
101.SCH
101.PRE
101.CAL
101.DEF
101.LAB
104
Exhibit Description
Form
Exhibit
Consent of Independent Registered Public
Accounting Firm
Power of Attorney of Directors and Officers of
Marathon Petroleum Corporation
Certification of Chief Executive Officer
pursuant to Rule 13(a)-14 and 15(d)-14 under
the Securities Exchange Act of 1934.
Certification of Chief Financial Officer
pursuant to Rule 13(a)-14 and 15(d)-14 under
the Securities Exchange Act of 1934.
Certification of Chief Executive Officer
pursuant to 18 U.S.C. Section 1350.
Certification of Chief Financial Officer
pursuant to 18 U.S.C. Section 1350.
Marathon Petroleum Corporation Officer
Compensation Clawback Policy
Inline XBRL Instance Document - the instance
document does not appear in the Interactive
Data File because its XBRL tags are
embedded with the Inline XBRL document.
Inline XBRL Taxonomy Extension Schema
Document.
Inline XBRL Taxonomy Extension
Presentation Linkbase Document.
Inline XBRL Taxonomy Extension Calculation
Linkbase Document.
Inline XBRL Taxonomy Extension Definition
Linkbase Document.
Inline XBRL Taxonomy Extension Label
Linkbase Document.
Cover Page Interactive Data File (formatted
as Inline XBRL and contained in Exhibit 101).
Filing
Date
SEC
File No.
Filed
Herewith
X
Furnished
Herewith
X
X
X
X
X
X
X
X
X
X
X
X
†
*
The exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be provided to the Securities and
Exchange Commission upon request.
Indicates management contract or compensatory plan, contract or arrangement in which one or more directors or executive officers of the
Registrant may be participants.
127
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.
SIGNATURES
Date: February 28, 2024
MARATHON PETROLEUM CORPORATION
By: /s/ Erin M. Brzezinski
Erin M. Brzezinski
Vice President and Controller
128
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons
on February 28, 2024 on behalf of the registrant and in the capacities indicated.
Signature
Title
/s/ Michael J. Hennigan
Michael J. Hennigan
/s/ John J. Quaid
John J. Quaid
/s/ Erin M. Brzezinski
Erin M. Brzezinski
*
Abdulaziz F. Alkhayyal
*
Evan Bayh
*
Charles E. Bunch
*
Jonathan Z. Cohen
*
Edward G. Galante
*
Kim K.W. Rucker
*
Frank M. Semple
*
J. Michael Stice
*
John P. Surma
*
Susan Tomasky
Director and Chief Executive Officer
(principal executive officer)
Executive Vice President and Chief Financial Officer
(principal financial officer)
Vice President and Controller
(principal accounting officer)
Director
Director
Director
Director
Director
Director
Director
Director
Chairman of the Board
Director
129
* 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/ Michael J. Hennigan
February 28, 2024
Michael J. Hennigan
Attorney-in-Fact
130
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
Finance and Investor Relations
(419) 421-2071
Notice of Annual Meeting
The 2024 Annual Meeting of
Shareholders will be held in a
virtual-only format via live
webcast on April 24, 2024.
Independent Accountants
PricewaterhouseCoopers LLP
406 Washington St., Suite 200
Toledo, OH 43604
Stock Exchange Listing
New York Stock Exchange
Common Stock Symbol: MPC
Principal Stock Transfer Agent
Computershare
P.O. Box 43078
Providence, RI 02940-3078
By overnight delivery:
150 Royall St., Suite 101
Canton, MA 02021
Internet Inquiries:
Investor Center website at
www-us.computershare.com/investor
Email: web.queries@computershare.com
Telephone Inquiries:
Toll Free: 866-820-7494
(U.S., Canada and Puerto Rico)
Toll: 781-575-2176
(other, non-U.S. jurisdictions)
Annual Report on Form 10-K
Additional copies of the
Marathon Petroleum Corporation
2023 Annual Report may be
obtained by contacting:
Investor Relations
539 South Main St.
Findlay, OH 45840
(419) 421-2071
CO RPOR ATE INFORMATION
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.
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% 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 graph below matches the
cumulative 5-Year total return of holders of Marathon Petroleum
Corporation’s common stock with the cumulative total returns of the S&P
500 index and the S&P 500 Oil & Gas Refining & Marketing sub-industry
index. The graph assumes that the value of the investment in our common
stock, in each index, and in the peer group (including reinvestment of
dividends) was $100 on 12/31/2018 and tracks it through 12/31/2023.
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*
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Marathon Petroleum Corporation, the S&P 500 Index
Among Marathon Petroleum Corporation, the S&P 500 Index
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN*
and the S&P 500 Oil & Gas Refining & Marketing Index
and the S&P 500 Oil & Gas Refining & Marketing Index
Among Marathon Petroleum Corporation, the S&P 500 Index
and the S&P 500 Oil & Gas Refining & Marketing Index
$350
$350
$300
$300
$250
$250
$200
$200
$150
$150
$100
$100
$50
$50
$0
$0
12/18
12/18
12/19
12/19
12/20
12/20
12/21
12/21
12/22
12/22
12/23
12/23
Marathon Petroleum Corporation
Marathon Petroleum Corporation
S&P 500
S&P 500
S&P 500 Oil & Gas Refining & Marketing
S&P 500 Oil & Gas Refining & Marketing
*$100 invested on 12/31/18 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.
*$100 invested on 12/31/18 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.
*$100 invested on 12/31/18 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.
Copyright© 2024 Standard & Poor's, a division of S&P Global. All rights reserved.
Copyright© 2024 Standard & Poor's, a division of S&P Global. All rights reserved.
MP C 2023 ANNUAL R EPO RT
Graph produced by Research Data Group, Inc.
Graph produced by Research Data Group, Inc.
1/6/2024
1/6/2024
Disclosures Regarding Forward-Looking Statements
This summary annual report wrap contains forward-looking statements regarding MPC. These forward-looking statements may relate to, among other things,
MPC’s expectations, estimates and projections concerning its business and operations, financial priorities, strategic plans and initiatives, capital return plans,
capital expenditure plans, operating cost reduction objectives, and environmental, social and governance (“ESG”) plans and goals, including those related to
greenhouse gas emissions and intensity reduction targets, freshwater withdrawal intensity reduction targets, diversity, equity and inclusion targets and ESG
reporting. Forward-looking and other statements regarding our ESG plans and goals are not an indication that these statements are material to investors
or are required to be disclosed in our filings with the Securities Exchange Commission (“SEC”). In addition, historical, current, and forward-looking ESG-
related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and
assumptions that are subject to change in the future. You can identify forward-looking statements by words such as “anticipate,” “believe,” “commitment,”
“could,” “design,” “estimate,” “expect,” “forecast,” “goal,” “guidance,” “intend,” “may,” “objective,” “opportunity,” “outlook,” “plan,” “policy,” “position,”
“potential,” “predict,” “priority,” “project,” “prospective,” “pursue,” “seek,” “should,” “strategy,” “target,” “will,” “would” or other similar expressions that
convey the uncertainty of future events or outcomes. MPC cautions that these statements are based on management’s current knowledge and expectations
and are subject to certain risks and uncertainties, many of which are outside of the control of MPC, that could cause actual results and events to differ
materially from the statements made herein. Factors that could cause MPC’s actual results to differ materially from those implied in the forward-looking
statements include but are not limited to: political or regulatory developments, including changes in governmental policies relating to refined petroleum
products, crude oil, natural gas, NGLs, or renewables, or taxation; volatility in and degradation of general economic, market, industry or business conditions
due to inflation, rising interest rates, the military conflict between Russia and Ukraine, hostilities in the Middle East, future resurgences of the COVID-19
pandemic or otherwise; the regional, national and worldwide demand for refined products and renewables and related margins; the regional, national or
worldwide availability and pricing of crude oil, natural gas, NGLs and other feedstocks and related pricing differentials; the adequacy of capital resources
and liquidity and timing and amounts of free cash flow necessary to execute our business plans, effect future share repurchases and to maintain or grow our
dividend; the success or timing of completion of ongoing or anticipated projects; the timing and ability to obtain necessary regulatory approvals and permits
and to satisfy other conditions necessary to complete planned projects or to consummate planned transactions within the expected timeframes if at all; the
availability of desirable strategic alternatives to optimize portfolio assets and the ability to obtain regulatory and other approvals with respect thereto; our
ability to successfully implement our sustainable energy strategy and principles and achieve our ESG plans and goals within the expected timeframes if at
all; changes in government incentives for emission-reduction products and technologies; the outcome of research and development efforts to create future
technologies necessary to achieve our ESG plans and goals; our ability to scale projects and technologies on a commercially competitive basis; changes
in regional and global economic growth rates and consumer preferences, including consumer support for emission-reduction products and technology;
accidents or other unscheduled shutdowns affecting our refineries, machinery, pipelines, processing, fractionation and treating facilities or equipment, means
of transportation, or those of our suppliers or customers; our ability to maintain adequate insurance coverage and recover insurance proceeds to offset losses
resulting from accidents or other incidents and unscheduled shutdowns; the imposition of windfall profit taxes or maximum refining margin penalties on
companies operating within the energy industry in California or other jurisdictions; the impact of adverse market conditions or other similar risks to those
identified herein affecting MPLX; and the factors set forth under the headings “Risk Factors” and “Disclosures Regarding Forward-Looking Statements” in
MPC’s Annual Report on Form 10-K for the year ended Dec. 31, 2023, which forms part of this report, and in other filings with the SEC. Any forward-looking
statement speaks only as of the date of the applicable communication and we undertake no obligation to update any forward-looking statement except to
the extent required by applicable law.
TERMINAL AND MARINE FACILITY IN MOUNT AIRY, LOUISIANA