Marathon Petroleum Corp

Previous wording

•the imposition of windfall profit taxes or maximum margin penalties on companies operating in the energy industry in California or other jurisdictions.

Current wording

•the imposition of windfall profit taxes, maximum margin penalties or minimum inventory requirements on companies operating in the energy industry in California or other jurisdictions.

Previous wording

Our second quarter results reflect a lower margin environment versus the second quarter of 2023 as global refined product supply was at record seasonal levels driven by high utilization and new refining capacity additions. Longer-term, demand growth is expected to outpace the limited refining capacity additions anticipated through the end of the decade. We anticipate these fundamentals, as well as the U.S. refining industry’s current structural advantages over the rest of the world, will support a constructive environment for U.S. refiners.

Current wording

Our third quarter results reflect a lower margin environment versus the third quarter of 2023. Margin volatility in the third quarter reflected steady demand for gasoline and diesel and growing demand for jet fuel while refining utilization remained high supported by a light turnaround season and limited seasonal supply interruptions. Longer term, demand growth is expected to exceed the net supply impact from limited capacity additions through the end of the decade and announced and expected refinery rationalizations. We anticipate these fundamentals, as well as the U.S. refining industry’s current structural advantages over the rest of the world, will support a constructive environment for U.S. refiners.

Previous wording

In June 2023, the California legislature adopted and implemented certain provisions of Senate Bill No.2 (such statute, together with any regulations contemplated or issued thereunder, “SB X1-2”), which authorizes the CEC to establish a “maximum gross gasoline refining margin” with respect to refining activities in California, as well as establish penalties for refiners for exceeding the yet to be issued margin cap. The law further expands on existing reporting requirements for refiners to the CEC. We will evaluate the impact that SB X1-2 and any associated forthcoming CEC regulations may have on our current or anticipated future operations in California and results of operations when SB X1-2 is fully implemented.

Current wording

In June 2023, the California legislature adopted and implemented certain provisions of Senate Bill No.2 (such statute, together with any regulations contemplated or issued thereunder, “SB X1-2”), which authorizes the CEC to establish a “maximum gross gasoline refining margin” with respect to refining activities in California, as well as establish penalties 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 October 2024, California’s governor signed Assembly Bill No.1 (such statute, together with any regulations contemplated or issued thereunder, “AB X2-1”), into law, authorizing the CEC to require that petroleum refiners maintain a minimum inventory of transportation fuels as well as require petroleum refiners to plan for resupply during scheduled maintenance. We will evaluate the impact that SB X1-2 and AB X2-1 and any associated forthcoming CEC regulations may have on our current or anticipated future operations in California and results of operations when SB X1-2 or AB X2-1 are fully implemented.

Previous wording

On July 31, 2024, MPLX purchased an additional 20 percent ownership interest in BANGL, LLC, increasing total ownership interest to 45 percent. BANGL, LLC is a natural gas liquids pipeline system connecting the Delaware and Midland basin to the fractionation market in Sweeny, Texas.

Current wording

On July 31, 2024, MPLX exercised its right of first offer under the BANGL, LLC joint venture agreement to purchase an additional 20 percent ownership interest in BANGL, LLC for $210 million cash, increasing total ownership interest to 45 percent. BANGL is a natural gas liquids pipeline system connecting the Delaware and Midland basins to the fractionation market in Sweeny, Texas.

Previous wording

Transaction”). The combined platform connects Permian supply to incremental LNG export markets and supports the development of additional pipeline projects. As a result of the transaction, MPLX’s voting interest in the joint venture was reduced from 37.5 percent to 30.4 percent. MPLX recognized a gain of $151 million and received a cash distribution of $134 million, recorded as a return of capital, related to the dilution of the ownership interest.

Current wording

On May 29, 2024, MPLX and its joint venture partner contributed their respective membership interest in Whistler Pipeline, LLC to a newly formed joint venture, WPC Parent, LLC and issued a 19 percent voting interest in WPC Parent, LLC to an affiliate of Enbridge Inc. in exchange for the contribution of cash and the Rio Bravo Pipeline project (collectively, the “Whistler Joint Venture Transaction”). The combined platform connects Permian supply to incremental LNG export markets and supports the development of additional pipeline projects. As a result of the transaction, MPLX’s voting interest in the joint venture was reduced from 37.5 percent to 30.4 percent. MPLX recognized a gain of $151 million at closing and received a cash distribution of $134 million, recorded as a return of capital, related to the dilution of the ownership interest.

Previous wording

On March 22, 2024, MPLX used $625 million of cash on hand to purchase additional ownership interest in existing joint ventures and gathering assets, which will enhance MPLX’s position in the Utica basin. Prior to the acquisition, MPLX owned an indirect interest in OGC and a direct interest in OCC and now owns a combined 73 percent interest in OGC and a 100 percent interest in OCC, and a dry gas gathering system in the Utica basin.

Current wording

On March 22, 2024, MPLX used $625 million of cash to purchase additional ownership interest in existing joint ventures and gathering assets, which will enhance MPLX’s position in the Utica basin. Prior to the acquisition, MPLX owned an indirect interest in OGC and a direct interest in OCC and now owns a combined 73 percent interest in OGC and a 100 percent interest in OCC, and a dry gas gathering system in the Utica basin.

Previous wording

On April 30, 2024, we announced that our board of directors approved an additional $5.0 billion share repurchase authorization. The share repurchase authorization has no expiration date. Future repurchases under the authorization will depend on the macro environment, cash available after opportunities for capital investment and growth of the business and market conditions. As of June 30, 2024, MPC had $6.74 billion remaining under its share repurchase authorizations.

Current wording

On November 5, 2024, we announced that our board of directors approved a $5.0 billion share repurchase authorization that is in addition to the $5.0 billion share repurchase authorization announced on April 30, 2024. The share repurchase authorizations have no expiration date. Future repurchases under these authorizations will depend on the macro environment, cash available after opportunities for capital investment and growth of the business and market conditions. As of September 30, 2024, MPC had $4.04 billion remaining under the April 2024 share repurchase authorization.

Previous wording

See Note 8 to the unaudited consolidated financial statements for further discussion of our share repurchase authorizations.

Current wording

See Notes 8 and 24 to the unaudited consolidated financial statements for further discussion of our share repurchase authorizations.

Previous wording

(a)Gain from the Whistler Joint Venture Transaction. See Note 13 to the unaudited consolidated financial statements for additional information.

Current wording

(a)The first nine months of 2024 includes the gain from the Whistler Joint Venture Transaction. See Note 13 to the unaudited consolidated financial statements for additional information. 2023 includes the gain on the sale of MPC’s 25 percent interest in South Texas Gateway.

Previous wording

Net income attributable to MPC was $1.52 billion, or $4.33 per diluted share, in the second quarter of 2024 compared to $2.23 billion, or $5.32 per diluted share, for the second quarter of 2023 and $2.45 billion, or $6.88 per diluted share, in the first six months of 2024 compared to $4.95 billion, or $11.44 per diluted share, in the first six months of 2023. The decreases in net income attributable to MPC were largely due to lower Refining & Marketing margins, partially offset by a decreased provision for income taxes.

Current wording

Net income attributable to MPC was $622 million, or $1.87 per diluted share, in the third quarter of 2024 compared to $3.28 billion, or $8.28 per diluted share, for the third quarter of 2023 and $3.07 billion, or $8.83 per diluted share, in the first nine months of 2024 compared to $8.23 billion, or $19.57 per diluted share, in the first nine months of 2023. The decreases in net income attributable to MPC were largely due to lower Refining & Marketing margins, partially offset by decreases in provisions for income taxes.

Previous wording

Refer to the Results of Operations section for a discussion of consolidated financial results and Segment Results for the second quarter of 2024 as compared to the second quarter of 2023 and the first six months of 2024 compared to the first six months of 2023.

Current wording

Refer to the Results of Operations section for a discussion of consolidated financial results and Segment Results for the third quarter of 2024 as compared to the third quarter of 2023 and the first nine months of 2024 compared to the first nine months of 2023.

Previous wording

We owned approximately 647 million MPLX common units as of June 30, 2024, with a market value of $27.57 billion based on the June 28, 2024 closing price of $42.59 per common unit. On July 30, 2024, MPLX declared a quarterly cash distribution of $0.8500 per common unit payable on August 16, 2024, to unitholders of record on August 9, 2024. MPC’s portion of this distribution is approximately $551 million.

Current wording

We owned approximately 647 million MPLX common units as of September 30, 2024, with a market value of $28.78 billion based on the September 30, 2024 closing price of $44.46 per common unit. On October 29, 2024, MPLX declared a quarterly cash distribution of $0.9565 per common unit payable on November 15, 2024, to unitholders of record on November 8, 2024. This represents a 12.5 percent increase over the prior quarter distribution. MPC’s portion of this distribution is approximately $619 million.

Previous wording

We received limited partner distributions of $1.10 billion from MPLX in the six months ended June 30, 2024 and $1.0 billion in the six months ended June 30, 2023.

Current wording

We received limited partner distributions of $1.65 billion from MPLX in the nine months ended September 30, 2024 and $1.51 billion in the nine months ended September 30, 2023.

Previous wording

During the six months ended June 30, 2024, MPLX repurchased approximately 4 million MPLX common units at an average cost per unit of $40.56 and paid $150 million of cash. As of June 30, 2024, approximately $696 million remained available under the authorization for future unit repurchases.

Current wording

During the nine months ended September 30, 2024, MPLX repurchased approximately 6 million MPLX common units at an average cost per unit of $41.32 and paid $226 million of cash. As of September 30, 2024, approximately $620 million remained available under the authorization for future unit repurchases.

Previous wording

•increased sales and other operating revenues of $1.57 billion primarily due to increased refined product sales volumes of 161 mbpd, partially offset by decreased Refining & Marketing segment average refined product sales prices of $0.02 per gallon;

Current wording

•decreased sales and other operating revenues of $5.81 billion primarily due to decreased Refining & Marketing segment average refined product sales prices of $0.45 per gallon, partially offset by increased refined product sales volumes of 89 mbpd;

Previous wording

•decreased other income of $193 million mainly due to lower income on RIN sales.

Current wording

•decreased other income of $292 million mainly due to lower income on RIN sales and the absence of insurance proceeds received in the third quarter of 2023.

Previous wording

•increased cost of revenues of $2.18 billion primarily due to higher crude oil costs, partially offset by a decrease in finished product purchases; and

Current wording

•decreased cost of revenues of $2.78 billion primarily due to lower crude oil costs and decreases in finished product purchases; and

Previous wording

•increased selling, general and administrative expenses of $119 million primarily due to $30 million of expense related to decommissioning of non-operating assets and increases in equity compensation of $24 million, contract services of $24 million and salaries and employee related costs of $19 million.

Current wording

•decreased selling, general and administrative expenses of $9 million primarily due to a decrease in equity compensation of $72 million, partially offset by increases in office expenses of $20 million, salaries and employee related costs of $16 million, contract services of $14 million and legal expenses of $13 million.

Previous wording

Net interest and other financial costs increased $52 million largely due to decreased interest income, primarily on lower short-term investments, and increases in non-service pension costs, currency exchange losses and interest expense due to higher MPLX borrowings.

Current wording

Net interest and other financial costs increased $103 million largely due to decreased interest income, primarily on lower short-term investments, and increases in interest expense, mainly due to higher MPLX borrowings, currency exchange losses and non-service pension costs.

Previous wording

We recorded a combined federal, state and foreign income tax provision of $373 million for the three months ended June 30, 2024, which was lower than the U.S. statutory rate primarily due to permanent tax benefits related to net income attributable to noncontrolling interests offset by state taxes. We recorded a combined federal, state and foreign income tax provision of $583 million for the three months ended June 30, 2023, which was lower than the U.S. statutory rate primarily due to permanent tax benefits related to net income attributable to noncontrolling interests, a benefit related to foreign derived intangible income, offset by state taxes.

Current wording

We recorded a combined federal, state and foreign income tax provision of $113 million for the three months ended September 30, 2024, which was lower than the U.S. statutory rate primarily due to permanent tax benefits related to net income attributable to noncontrolling interests offset by state taxes. We recorded a combined federal, state and foreign income tax provision of $1.0 billion for the three months ended September 30, 2023, which was higher than the U.S. statutory rate primarily due to state taxes offset by permanent tax benefits related to net income attributable to noncontrolling interests and foreign derived intangible income.

Previous wording

Net income attributable to noncontrolling interests increased $104 million primarily due to an increase in MPLX’s net income in the second quarter of 2024. See further discussion in the Midstream Segment Results section.

Current wording

Net income attributable to noncontrolling interests increased $61 million primarily due to an increase in MPLX’s net income in the third quarter of 2024. See further discussion in the Midstream Segment Results section.

Previous wording

•decreased sales and other operating revenues of $587 million primarily due to decreased Refining & Marketing segment average refined product sales prices of $0.09 per gallon, partially offset by increased refined product sales volumes of 43 mbpd;

Current wording

•decreased sales and other operating revenues of $6.40 billion primarily due to decreased Refining & Marketing segment average refined product sales prices of $0.22 per gallon, partially offset by increased refined product sales volumes of 58 mbpd;

Previous wording

•increased income from equity method investments of $245 million primarily due to the gain on sale of assets resulting from the Whistler Joint Venture Transaction and increased income from our Martinez Renewables joint venture; and

Current wording

•increased income from equity method investments of $249 million primarily due to the gain on sale of assets resulting from the Whistler Joint Venture Transaction and increased income from our Martinez Renewables joint venture;

Previous wording

•increased other income of $11 million mainly due to insurance proceeds offset by lower income on RINs sales.

Current wording

•decreased other income of $281 million mainly due to lower income on RINs sales, partially offset by higher insurance proceeds.

Previous wording

•increased cost of revenues of $2.48 billion primarily due to higher crude oil costs and higher contract services and material and supply expenses related to increased turnaround activity, partially offset by a decrease in finished product purchases; and

Current wording

•decreased cost of revenues of $302 million primarily due to decreased crude oil costs and finished product purchases, partially offset by higher contract services and material and supply expenses related to increased turnaround activity; and

Previous wording

•increased selling, general and administrative expenses of $207 million largely due to increases in equity compensation of $77 million, contract services costs of $45 million, salaries and employee related costs of $38 million and $30 million of expense related to decommissioning of non-operating assets.

Current wording

•increased selling, general and administrative expenses of $198 million largely due to increases in contract services costs of $59 million, salaries and employee related costs of $48 million and $30 million of expense related to decommissioning of non-operating assets.

Previous wording

Net interest and other financial costs increased $77 million largely due to decreased interest income, primarily on lower short-term investments, and increases in non-service pension costs, interest expense, due to higher MPLX borrowings, and currency exchange losses.

Current wording

Net interest and other financial costs increased $180 million largely due to decreased interest income, primarily on lower short-term investments, and increases in non-service pension costs, interest expense, mainly due to higher MPLX borrowings, and currency exchange losses.

Previous wording

We recorded a combined federal, state and foreign income tax provision of $666 million for the six months ended 2024, which was lower than the U.S. statutory rate primarily due to permanent tax benefits related to net income attributable to noncontrolling interests offset by state taxes. We recorded a combined federal, state and foreign income tax provision of $1.41 billion for the six months ended 2023, which was lower than the U.S. statutory rate primarily due to permanent tax benefits related to net income attributable to noncontrolling interests, a benefit related to foreign derived intangible income, offset by state taxes.

Current wording

We recorded a combined federal, state and foreign income tax provision of $779 million for the nine months ended 2024, which was lower than the U.S. statutory rate primarily due to permanent tax benefits related to net income attributable to noncontrolling interests offset by state taxes. We recorded a combined federal, state and foreign income tax provision of $2.41 billion for the nine months ended 2023, which was lower than the U.S. statutory rate primarily due to permanent tax benefits related to net income attributable to noncontrolling interests, a benefit related to foreign derived intangible income, offset by state taxes.

Previous wording

Net income attributable to noncontrolling interests increased $132 million primarily due to an increase in MPLX’s net income in the first six months of 2024. See further discussion in the Midstream Segment Results section.

Current wording

Net income attributable to noncontrolling interests increased $193 million primarily due to an increase in MPLX’s net income in the first nine months of 2024. See further discussion in the Midstream Segment Results section.

Previous wording

The following shows the percentage of segment adjusted EBITDA by segment for the six months ended June 30, 2024 and 2023.

Current wording

The following shows the percentage of segment adjusted EBITDA by segment for the nine months ended September 30, 2024 and 2023.

Previous wording

The following includes key financial and operating data for the second quarter of 2024 compared to the second quarter of 2023 and the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Current wording

The following includes key financial and operating data for the third quarter of 2024 compared to the third quarter of 2023 and the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.

Previous wording

Refining & Marketing segment revenues increased $1.50 billion primarily due to increased refined product sales volumes of 161 mbpd, partially offset by decreased average refined product sales prices of $0.02 per gallon.

Current wording

Refining & Marketing segment revenues decreased $5.84 billion primarily due to decreased average refined product sales prices of $0.45 per gallon, partially offset by increased refined product sales volumes of 89 mbpd.

Previous wording

Net refinery throughput increased 140 mbpd during the second quarter of 2024 largely due to decreased turnaround activity during the quarter.

Current wording

Net refinery throughput increased 32 mbpd during the third quarter of 2024.

Previous wording

Refining & Marketing segment adjusted EBITDA decreased $1.19 billion primarily due to decreases in per barrel margins in addition to increased distribution costs, excluding depreciation and amortization. Refining & Marketing segment adjusted EBITDA was $7.07 per barrel for the second quarter of 2024, versus $11.88 per barrel for the second quarter of 2023.

Current wording

Refining & Marketing segment adjusted EBITDA decreased $3.32 billion primarily due to decreases in per barrel margins. Refining & Marketing segment adjusted EBITDA was $3.82 per barrel for the third quarter of 2024, versus $16.06 per barrel for the third quarter of 2023.

Previous wording

Refining & Marketing margin was $17.37 per barrel for the second quarter of 2024 compared to $22.10 per barrel for the second quarter of 2023. Refining & Marketing margin is affected by our performance against 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 $1 billion on Refining & Marketing margin for the second quarter of 2024 compared to the second quarter of 2023, primarily due to narrower crack spreads. Our reported Refining & Marketing margin differs from market indicators due to the mix of crudes purchased and their costs, the effect of market structure on our crude oil acquisition prices, the effect of RIN prices on the crack spread, and other items like refinery yields, other feedstock variances and fuel margin from sales to direct dealers. These factors had an estimated net negative effect of approximately $100 million on Refining & Marketing segment adjusted EBITDA in the second quarter of 2024 compared to the second quarter of 2023.

Current wording

Refining & Marketing margin was $14.35 per barrel for the third quarter of 2024 compared to $26.16 per barrel for the third quarter of 2023. Refining & Marketing margin is affected by our performance against 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 $4 billion on Refining & Marketing margin for the third quarter of 2024 compared to the third quarter of 2023, 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 effect of market structure on our crude oil acquisition prices, the effect of RIN prices on the crack spread, and other items like refinery yields, other feedstock variances and fuel margin from sales to direct dealers. These factors had an estimated net positive effect of approximately $300 million on Refining & Marketing segment adjusted EBITDA in the third quarter of 2024 compared to the third quarter of 2023.

Previous wording

For the three months ended June 30, 2024, refining operating costs, excluding depreciation and amortization, increased $14 million. Per barrel costs decreased $0.18 due to higher throughput.

Current wording

For the three months ended September 30, 2024, refining operating costs, excluding depreciation and amortization, increased $56 million, or $0.16 per barrel, primarily due to higher maintenance costs and expenses for projects conducted during turnaround activity.

Previous wording

Refining planned turnaround costs increased $82 million, or $0.16 per barrel, due to the scope and timing of turnaround activity.

Current wording

Refining planned turnaround costs increased $0.49 per barrel, or $137 million, due to the scope and timing of turnaround activity.

Previous wording

We purchase RINs to satisfy a portion of our RFS2 compliance. Our expenses associated with purchased RINs were $293 million and $694 million in the second quarter of 2024 and 2023, respectively. The RINs expense is included in Refining & Marketing margin. The decrease in the second quarter of 2024 was primarily due to decreased average RINs prices in addition to increased RINs generated and acquired from our Dickinson renewable fuels facility and Martinez Renewables joint venture.

Current wording

We purchase RINs to satisfy a portion of our RFS2 compliance. Our expenses associated with purchased RINs were $253 million and $561 million in the third quarter of 2024 and 2023, respectively. The RINs expense is included in Refining & Marketing margin. The decrease in the third quarter of 2024 was primarily due to decreased RIN sales and average RINs prices in addition to increased RINs generated and acquired from our Martinez Renewables joint venture, partially offset by an increased RIN obligation.

Previous wording

Refining & Marketing segment revenues decreased $668 million primarily due to decreased average refined product sales prices of $0.09 per gallon, partially offset by increased refined product sales volumes of 43 mbpd.

Current wording

Refining & Marketing segment revenues decreased $6.51 billion primarily due to decreased average refined product sales prices of $0.22 per gallon, partially offset by increased refined product sales volumes of 58 mbpd.

Previous wording

Refining & Marketing segment adjusted EBITDA decreased $3.17 billion primarily driven by decreases in per barrel margins and increased distribution costs and refining operating costs, both excluding depreciation and amortization. Refining & Marketing segment adjusted EBITDA was $7.37 per barrel for the first six months of 2024, versus $13.45 per barrel for the first six months of 2023.

Current wording

Refining & Marketing segment adjusted EBITDA decreased $6.49 billion primarily driven by decreases in per barrel margins. Refining & Marketing segment adjusted EBITDA was $6.15 per barrel for the first nine months of 2024, versus $14.35 per barrel for the first nine months of 2023.