Marathon(MPC) - 2024 Q1 - Quarterly Report

PART I - FINANCIAL INFORMATION Item 1. Financial Statements The company presents its unaudited consolidated financial statements for the three months ended March 31, 2024 and 2023 Consolidated Statements of Income (Unaudited) Consolidated Statements of Income (Unaudited) - Three Months Ended March 31: | (In millions, except per share data) | 2024 | 2023 | | :---------------------------------- | :--- | :--- | | Sales and other operating revenues | $32,706 | $34,864 | | Total revenues and other income | $33,211 | $35,077 | | Total costs and expenses | $31,427 | $31,016 | | Income from operations | $1,784 | $4,061 | | Net income attributable to MPC | $937 | $2,724 | | Basic EPS attributable to MPC | $2.59 | $6.13 | | Diluted EPS attributable to MPC | $2.58 | $6.09 | Consolidated Statements of Comprehensive Income (Unaudited) Consolidated Statements of Comprehensive Income (Unaudited) - Three Months Ended March 31: | (Millions of dollars) | 2024 | 2023 | | :-------------------- | :--- | :--- | | Net income | $1,312 | $3,084 | | Other comprehensive loss | $(12) | $(11) | | Comprehensive income | $1,300 | $3,073 | | Comprehensive income attributable to MPC | $925 | $2,713 | Consolidated Balance Sheets (Unaudited) Consolidated Balance Sheets (Unaudited) - As of March 31, 2024 and December 31, 2023: | (Millions of dollars) | March 31, 2024 | December 31, 2023 | | :-------------------- | :------------- | :---------------- | | Cash and cash equivalents | $3,175 | $5,443 | | Total current assets | $31,260 | $32,131 | | Total assets | $85,528 | $85,987 | | Total current liabilities | $21,787 | $20,150 | | Total liabilities | $55,757 | $54,588 | | Total MPC stockholders' equity | $22,922 | $24,404 | | Total equity | $29,210 | $30,504 | Consolidated Statements of Cash Flows (Unaudited) Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended March 31: | (Millions of dollars) | 2024 | 2023 | | :-------------------- | :--- | :--- | | Net cash provided by operating activities | $1,532 | $4,057 | | Net cash used in investing activities | $(824) | $(816) | | Net cash used in financing activities | $(2,977) | $(3,907) | | Net change in cash, cash equivalents and restricted cash | $(2,269) | $(666) | | Cash, cash equivalents and restricted cash at end of period | $3,177 | $7,965 | Consolidated Statements of Equity and Redeemable Noncontrolling Interest (Unaudited) Consolidated Statements of Equity and Redeemable Noncontrolling Interest (Unaudited) - As of March 31, 2024 and December 31, 2023: | (Millions of dollars) | Balance as of Dec 31, 2023 | Net Income | Dividends Declared | Shares Repurchased | Balance as of Mar 31, 2024 | | :-------------------- | :------------------------- | :--------- | :----------------- | :----------------- | :------------------------- | | MPC Stockholders' Equity | $30,504 | $937 | $(299) | $(2,172) | $29,210 | Consolidated Statements of Equity and Redeemable Noncontrolling Interest (Unaudited) - As of March 31, 2023 and December 31, 2022: | (Millions of dollars) | Balance as of Dec 31, 2022 | Net Income | Dividends Declared | Shares Repurchased | Balance as of Mar 31, 2023 | | :-------------------- | :------------------------- | :--------- | :----------------- | :----------------- | :------------------------- | | MPC Stockholders' Equity | $34,119 | $2,724 | $(336) | $(3,238) | $32,695 | Notes to Consolidated Financial Statements (Unaudited) Note 1. Description of the Business and Basis of Presentation - Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company operating the nation's largest refining system[23] - The interim consolidated financial statements are unaudited and prepared in accordance with SEC rules for interim periods, not including all GAAP disclosures required for complete financial statements[24][25] Note 2. Accounting Standards and Disclosure Rules - MPC adopted ASU 2023-01, Leases (Topic 842): Common Control Arrangements, in Q1 2024, with no material impact[28] - The SEC's new climate-related disclosure rules are effective for MPC's 2025 Annual Report on Form 10-K, pending judicial review[29] - MPC is evaluating the impact of ASU 2023-09 (Income Tax Disclosures) and ASU 2023-07 (Segment Reporting), effective for fiscal years beginning after December 15, 2024 and 2023 respectively[30][31] Note 3. Short-Term Investments Short-Term Investments Components (Millions of dollars): | Investment Type | March 31, 2024 Fair Value | December 31, 2023 Fair Value | | :-------------- | :------------------------ | :------------------------- | | Commercial paper | $2,773 | $3,156 | | Certificates of deposit and time deposits | $1,255 | $1,837 | | U.S. government securities | $636 | $784 | | Corporate notes and bonds | $169 | $85 | | Total available-for-sale debt securities | $4,833 | $5,862 | | Cash (included in Cash and Cash Equivalents) | $2,741 | $4,362 | | Total | $7,574 | $10,224 | - All available-for-sale debt securities held as of March 31, 2024, mature within one year or less or are readily available for use[33] Note 4. Master Limited Partnership - MPC controls MPLX LP and owned approximately 64% of its outstanding common units as of March 31, 2024, a decrease from 65% at December 31, 2023[34] - MPLX redeemed all 600,000 Series B preferred units on February 15, 2023, for $600 million, resulting in a $2 million net reduction to retained earnings[38][39] MPLX Unit Repurchase Program - Three Months Ended March 31: | (In millions, except per unit data) | 2024 | 2023 | | :---------------------------------- | :--- | :--- | | Number of common units repurchased | 2 | — | | Cash paid for common units repurchased | $75 | $— | | Average cost per unit | $40.04 | $— | Note 5. Variable Interest Entities - MPLX is identified as a Variable Interest Entity (VIE) controlled by MPC, leading to its consolidation in MPC's financial statements[42] - Creditors of MPLX generally do not have recourse to MPC's general credit, except for certain indebtedness of LOOP LLC and LOCAP LLC, which MPC has effectively guaranteed[43] MPLX Balance Sheet Information (Millions of dollars): | Item | March 31, 2024 | December 31, 2023 | | :--- | :------------- | :---------------- | | Cash and cash equivalents | $385 | $1,048 | | Equity method investments | $4,343 | $3,743 | | Property, plant and equipment, net | $19,299 | $19,264 | | Goodwill | $7,645 | $7,645 | | Long-term debt | $18,805 | $19,296 | Note 6. Related Party Transactions - Sales to related parties primarily consist of refined product and renewable feedstock sales to equity affiliates, while purchases include utilities, transportation, ethanol, and renewable fuels from equity affiliates[47][48] Related Party Transactions (Millions of dollars) - Three Months Ended March 31: | Transaction Type | 2024 | 2023 | | :--------------- | :--- | :--- | | Sales to related parties | $271 | $189 | | Purchases from related parties | $580 | $311 | Note 7. Earnings Per Share Earnings Per Share (Millions, except per share data) - Three Months Ended March 31: | Metric | 2024 | 2023 | | :----- | :--- | :--- | | Income available to common stockholders | $936 | $2,720 | | Basic weighted average common shares outstanding | 361 | 444 | | Diluted weighted average common shares outstanding | 362 | 447 | | Basic Net income attributable to MPC per share | $2.59 | $6.13 | | Diluted Net income attributable to MPC per share | $2.58 | $6.09 | Note 8. Equity - As of March 31, 2024, MPC had $4.63 billion remaining under its share repurchase authorizations, with an additional $5.0 billion authorization approved on April 30, 2024[53][108] Share Repurchases (Millions, except per share data) - Three Months Ended March 31: | Metric | 2024 | 2023 | | :----- | :--- | :--- | | Number of shares repurchased | 13 | 25 | | Cash paid for shares repurchased | $2,218 | $3,180 | | Average cost per share | $168.05 | $126.56 | Note 9. Segment Information - MPC operates two reportable segments: Refining & Marketing and Midstream, with performance evaluated using segment adjusted EBITDA[56][57] Segment Adjusted EBITDA (Millions of dollars) - Three Months Ended March 31: | Segment | 2024 | 2023 | | :------ | :--- | :--- | | Refining & Marketing | $1,874 | $3,853 | | Midstream | $1,589 | $1,530 | | Total reportable segments | $3,463 | $5,383 | Reconciliation to Income Before Income Taxes: | Item | 2024 | 2023 | | :--- | :--- | :--- | | Total reportable segments | $3,463 | $5,383 | | Corporate | $(204) | $(165) | | Refining planned turnaround costs | $(648) | $(357) | | Depreciation and amortization | $(827) | $(800) | | Net interest and other financial costs | $(179) | $(154) | | Income before income taxes | $1,605 | $3,907 | Segment Revenues from External Customers (Millions of dollars) - Three Months Ended March 31: | Segment | 2024 | 2023 | | :------ | :--- | :--- | | Refining & Marketing | $31,485 | $33,663 | | Midstream | $1,221 | $1,201 | | Consolidated sales and other operating revenues | $32,706 | $34,864 | Consolidated Capital Expenditures (Millions of dollars) - Three Months Ended March 31: | Segment | 2024 | 2023 | | :------ | :--- | :--- | | Refining & Marketing | $291 | $421 | | Midstream | $327 | $241 | | Consolidated capital expenditures | $511 | $483 | Note 10. Net Interest and Other Financial Costs Net Interest and Other Financial Costs (Millions of dollars) - Three Months Ended March 31: | Item | 2024 | 2023 | | :--- | :--- | :--- | | Interest income | $(101) | $(121) | | Interest expense | $341 | $334 | | Pension and other postretirement non-service costs | $(11) | $(23) | | Net interest and other financial costs | $179 | $154 | Note 11. Income Taxes - The income tax provision for Q1 2024 was $293 million, lower than the U.S. statutory rate due to permanent tax benefits from noncontrolling interests, offset by state taxes[61] - The income tax provision for Q1 2023 was $823 million, higher than the U.S. statutory rate primarily due to state taxes, offset by permanent tax benefits from noncontrolling interests[62] Note 12. Inventories - Inventories are carried at the lower of cost or market value, with crude oil and refined product costs aggregated on a consolidated basis for LIFO assessment[63] Inventories (Millions of dollars) - As of March 31, 2024 and December 31, 2023: | Item | March 31, 2024 | December 31, 2023 | | :--- | :------------- | :---------------- | | Crude oil | $3,434 | $3,211 | | Refined products | $5,273 | $4,940 | | Materials and supplies | $1,074 | $1,166 | | Total | $9,781 | $9,317 | Note 13. Equity Method Investments - On March 22, 2024, MPLX acquired additional ownership in existing joint ventures and gathering assets for $625 million, enhancing its position in the Utica basin[64] - The revaluation of MPLX's existing 62% equity method investment in OCC resulted in a $20 million gain, recorded in net gain on disposal of assets[65][66] - On March 8, 2023, MPC acquired a 49.9% interest in LF Bioenergy, an RNG producer, for approximately $56 million, accounted for as an equity method investment[67][68] Note 14. Property, Plant and Equipment (PP&E) Property, Plant and Equipment, Net (Millions of dollars): | Segment | March 31, 2024 Net PP&E | December 31, 2023 Net PP&E | | :------ | :---------------------- | :------------------------- | | Refining & Marketing | $14,342 | $14,504 | | Midstream | $20,061 | $20,031 | | Corporate | $560 | $577 | | Total | $34,963 | $35,112 | Note 15. Fair Value Measurements - Level 3 instruments primarily relate to an embedded derivative liability for a natural gas purchase commitment, with fair value calculations using unobservable inputs[72] - The carrying and fair values of MPC's debt were approximately $27.0 billion and $25.3 billion at March 31, 2024, respectively[76] Fair Value of Derivative Instruments (Millions of dollars) - March 31, 2024: | Item | Level 1 | Level 2 | Level 3 | Net Carrying Value | | :--- | :------ | :------ | :------ | :----------------- | | Assets: Commodity contracts | $197 | $— | $— | $— | | Liabilities: Commodity contracts | $231 | $— | $— | $— | | Liabilities: Embedded derivatives in commodity contracts | $— | $— | $69 | $69 | Fair Value of Derivative Instruments (Millions of dollars) - December 31, 2023: | Item | Level 1 | Level 2 | Level 3 | Net Carrying Value | | :--- | :------ | :------ | :------ | :----------------- | | Assets: Commodity contracts | $244 | $— | $— | $24 | | Liabilities: Commodity contracts | $249 | $— | $— | $— | | Liabilities: Embedded derivatives in commodity contracts | $— | $— | $61 | $61 | Note 16. Derivatives - MPC does not designate any commodity derivative instruments as hedges for accounting purposes but uses them to hedge various price risks[77][78] Effect of Commodity Derivative Instruments on Consolidated Statements of Income (Millions of dollars) - Three Months Ended March 31: | Income Statement Location | 2024 Gain (Loss) | 2023 Gain (Loss) | | :------------------------ | :--------------- | :--------------- | | Sales and other operating revenues | $— | $2 | | Cost of revenues | $(74) | $61 | | Other income | $— | $1 | | Total | $(74) | $64 | Note 17. Debt Outstanding Borrowings (Millions of dollars) - As of March 31, 2024 and December 31, 2023: | Item | March 31, 2024 | December 31, 2023 | | :--- | :------------- | :---------------- | | MPC Senior notes | $6,449 | $6,449 | | MPC Finance lease obligations | $457 | $464 | | MPLX Senior notes | $20,700 | $20,700 | | Total debt | $27,613 | $27,620 | | Total long-term debt due after one year | $24,832 | $25,329 | Available Capacity under Credit Facilities (Millions of dollars) - As of March 31, 2024: | Facility | Total Capacity | Outstanding Borrowings | Outstanding Letters of Credit | Available Capacity | | :------- | :------------- | :--------------------- | :---------------------------- | :----------------- | | MPC bank revolving credit facility | $5,000 | $— | $1 | $4,999 | | MPC trade receivables securitization facility | $100 | $— | $— | $100 | | MPLX bank revolving credit facility | $2,000 | $— | $— | $2,000 | Note 18. Revenue - As of March 31, 2024, MPC does not have future performance obligations that are material to future periods[86] Revenues from External Customers by Segment and Product Line (Millions of dollars) - Three Months Ended March 31: | Segment/Product Line | 2024 | 2023 | | :------------------- | :--- | :--- | | Refining & Marketing | | | | Refined products | $29,247 | $31,923 | | Crude oil | $1,788 | $1,330 | | Services and other | $450 | $410 | | Total R&M external revenues | $31,485 | $33,663 | | Midstream | | | | Refined products | $373 | $420 | | Services and other | $848 | $781 | | Total Midstream external revenues | $1,221 | $1,201 | | Sales and other operating revenues | $32,706 | $34,864 | Note 19. Supplemental Cash Flow Information Supplemental Cash Flow Information (Millions of dollars) - Three Months Ended March 31: | Item | 2024 | 2023 | | :--- | :--- | :--- | | Interest paid (net of amounts capitalized) | $359 | $342 | | Net income taxes paid to (received from) taxing authorities | $(22) | $(18) | Reconciliation of Capital Expenditures: | Item | 2024 | 2023 | | :--- | :--- | :--- | | Additions to property, plant and equipment | $585 | $457 | | Increase (decrease) in capital accruals | $(74) | $26 | | Total capital expenditures | $511 | $483 | Note 20. Other Current Liabilities Components of Other Current Liabilities (Millions of dollars) - As of March 31, 2024 and December 31, 2023: | Item | March 31, 2024 | December 31, 2023 | | :--- | :------------- | :---------------- | | Environmental credits liability | $331 | $778 | | Accrued interest payable | $258 | $316 | | Other current liabilities | $375 | $551 | | Total other current liabilities | $964 | $1,645 | Note 21. Accumulated Other Comprehensive Income (Loss) Changes in Accumulated Other Comprehensive Income (Loss) (Millions of dollars): | Component | Balance as of Dec 31, 2023 | Other Comprehensive Gain (Loss) before Reclassifications | Amounts Reclassified | Balance as of Mar 31, 2024 | | :-------- | :------------------------- | :------------------------------------------------------- | :------------------- | :------------------------- | | Pension Benefits | $(261) | $2 | $(8) | $(265) | | Other Benefits | $129 | $(1) | $(5) | $124 | | Other | $1 | $(3) | $— | $(2) | | Total | $(131) | $(2) | $(12) | $(143) | Note 22. Pension and Other Postretirement Benefits - MPC made no contributions to funded pension plans in Q1 2024[93] Components of Net Periodic Benefit Costs (Millions of dollars) - Three Months Ended March 31: | Item | 2024 | 2023 | | :--- | :--- | :--- | | Pension Benefits | | | | Service cost | $54 | $49 | | Interest cost | $30 | $29 | | Expected return on plan assets | $(37) | $(42) | | Amortization of prior service credit | $(8) | $(11) | | Amortization of actuarial (gain) loss | $1 | $(2) | | Net periodic pension benefit cost | $40 | $23 | | Other Benefits | | | | Service cost | $5 | $5 | | Interest cost | $8 | $8 | | Amortization of prior service credit | $(5) | $(5) | | Net periodic other benefit cost | $8 | $8 | Note 23. Commitments and Contingencies - Accrued liabilities for environmental remediation totaled $375 million at March 31, 2024, down from $387 million at December 31, 2023[96] - MPC is subject to climate-related lawsuits in several states, alleging misrepresentations about petroleum product impacts, with the ultimate outcome currently uncertain[97] - MPC has provided guarantees for indebtedness of equity method investees, including LOOP and LOCAP ($222 million) and Dakota Access Pipeline ($170 million)[102][104] Note 24. Subsequent Events - On April 30, 2024, MPC's board approved an additional $5.0 billion share repurchase authorization with no expiration date[108] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The company analyzes its financial condition and results of operations for Q1 2024 compared to Q1 2023 DISCLOSURES REGARDING FORWARD-LOOKING STATEMENTS - The report contains forward-looking statements regarding future financial results, ESG plans, capital expenditures, business strategies, and other anticipated events[111] - Forward-looking statements are subject to risks and uncertainties, including economic conditions, commodity prices, regulatory changes, and operational incidents[111][112] EXECUTIVE SUMMARY - Global oil demand is at a record high, supporting a constructive refining environment in Q1 2024[115] - California's SB X1-2 authorizes the CEC to establish a maximum gross gasoline refining margin, with rulemaking activity ongoing[116] - MPLX acquired additional ownership in Utica basin assets for $625 million and entered an agreement to combine the Whistler and Rio Bravo Pipeline projects[117][119] - MPC's board approved an additional $5.0 billion share repurchase authorization on April 30, 2024, adding to the $4.63 billion remaining as of March 31, 2024[120] - Net income attributable to MPC decreased by $1.79 billion in Q1 2024, primarily due to lower Refining & Marketing margins and higher turnaround costs[126] Select Results (Millions of dollars) - Three Months Ended March 31: | Metric | 2024 | 2023 | | :----- | :--- | :--- | | Refining & Marketing segment adjusted EBITDA | $1,874 | $3,853 | | Midstream segment adjusted EBITDA | $1,589 | $1,530 | | Total reportable segments adjusted EBITDA | $3,463 | $5,383 | | Income before income taxes | $1,605 | $3,907 | | Net income attributable to MPC per diluted share | $2.58 | $6.09 | OVERVIEW OF SEGMENTS - Refining & Marketing segment adjusted EBITDA is driven by refinery throughput, margins, operating costs, and distribution costs[131][132][135] - Midstream segment profitability depends on tariff rates, volumes shipped, terminal throughput, and NGL/natural gas prices[137][138] Estimated Change in Annual Refining & Marketing Segment Adjusted EBITDA due to Market Conditions (Millions of dollars): | Sensitivity | Per $1.00/barrel change | Amount | | :---------- | :---------------------- | :----- | | Blended crack spread | | $1,080 | | Sour differential | | $500 | | Sweet differential | | $500 | | Natural gas price (per $1.00/MMBtu) | | $330 | RESULTS OF OPERATIONS - Net income attributable to MPC decreased by $1.79 billion in Q1 2024, primarily due to lower Refining & Marketing margins and higher turnaround costs[141] - Revenues and other income decreased by $1.87 billion, mainly due to lower refined product sales prices and volumes[141] - Costs and expenses increased by $411 million, primarily due to higher cost of revenues from increased turnaround activity and higher SG&A expenses[142][145] - Refining & Marketing segment adjusted EBITDA decreased by $1.98 billion, driven by lower per barrel margins and a 173 mbpd decrease in net refinery throughput[153] - Refining & Marketing margin decreased from $26.15/barrel to $18.99/barrel, primarily due to narrower crack spreads, resulting in an estimated $2 billion negative impact[154] - RINs expense decreased from $467 million in Q1 2023 to $301 million in Q1 2024[158] - Midstream segment adjusted EBITDA increased by $59 million in Q1 2024, driven by higher rates and processing volumes[163] - Corporate expenses increased by $44 million in Q1 2024, primarily due to a $33 million increase in equity compensation[165] Consolidated Results of Operations (Millions of dollars) - Three Months Ended March 31: | Item | 2024 | 2023 | Variance | | :--- | :--- | :--- | :------- | | Sales and other operating revenues | $32,706 | $34,864 | $(2,158) | | Total revenues and other income | $33,211 | $35,077 | $(1,866) | | Total costs and expenses | $31,427 | $31,016 | $411 | | Income from operations | $1,784 | $4,061 | $(2,277) | | Net income attributable to MPC | $937 | $2,724 | $(1,787) | Refining & Marketing Operating Statistics - Three Months Ended March 31: | Metric | 2024 | 2023 | | :----- | :--- | :--- | | Net refinery throughput (mbpd) | 2,664 | 2,837 | | Refining & Marketing margin per barrel | $18.99 | $26.15 | | Refining operating costs per barrel | $6.14 | $5.68 | | Distribution costs per barrel | $5.95 | $5.26 | | Refining & Marketing segment adjusted EBITDA per barrel | $7.73 | $15.09 | | Refining planned turnaround costs per barrel | $2.67 | $1.40 | | Per barrel fees paid to MPLX | $3.99 | $3.66 | Midstream Operating Statistics - Three Months Ended March 31: | Metric | 2024 | 2023 | | :----- | :--- | :--- | | Crude oil pipeline throughput (mbpd) | 3,000 | 3,100 | | Refined product pipeline throughput (mbpd) | 1,000 | 1,000 | | Natural gas processed (MMcf/d) | 8,000 | 7,800 | | NGL fractionated (mbpd) | 600 | 600 | | Natural Gas NYMEX HH (per MMBtu) | $2.09 | $2.77 | | C2 + NGL Pricing (per gallon) | $0.74 | $0.77 | LIQUIDITY AND CAPITAL RESOURCES - Net cash provided by operating activities decreased by $2.53 billion in Q1 2024, primarily due to lower operating results and an unfavorable change in working capital[171] - Net cash used in investing activities was $824 million in Q1 2024, including $622 million for Midstream acquisitions[175][179] - Financing activities used $2.98 billion in Q1 2024, including $2.22 billion for common stock repurchases[178][180] - MPC maintains an investment-grade credit profile (Moody's Baa2, S&P BBB, Fitch BBB, all stable outlook)[185][186] - MPLX also maintains an investment-grade credit profile (Moody's Baa2, S&P BBB, Fitch BBB, all stable outlook)[191][192] - MPC's 2024 capital investment plan totals approximately $1.25 billion (excluding MPLX's plan)[196] - MPC declared a dividend of $0.825 per share on April 24, 2024[208] Net Cash Provided by (Used in) Activities (Millions of dollars) - Three Months Ended March 31: | Activity | 2024 | 2023 | | :------- | :--- | :--- | | Operating activities | $1,532 | $4,057 | | Investing activities | $(824) | $(816) | | Financing activities | $(2,977) | $(3,907) | | Total decrease in cash | $(2,269) | $(666) | MPC Liquidity (Excluding MPLX) (Millions of dollars) - As of March 31, 2024: | Item | Total Capacity | Available Capacity | | :--- | :------------- | :----------------- | | Bank revolving credit facility | $5,000 | $4,999 | | Trade receivables facility | $100 | $100 | | Cash and cash equivalents and short-term investments | N/A | $7,189 | | Total liquidity | N/A | $12,288 | MPLX Liquidity (Millions of dollars) - As of March 31, 2024: | Item | Total Capacity | Available Capacity | | :--- | :------------- | :----------------- | | Bank revolving credit facility | $2,000 | $2,000 | | MPC intercompany loan agreement | $1,500 | $1,500 | | Cash and cash equivalents | N/A | $385 | | Total liquidity | N/A | $3,885 | Capital Expenditures and Investments (Millions of dollars) - Three Months Ended March 31: | Item | 2024 | 2023 | | :--- | :--- | :--- | | MPC, excluding MPLX | $299 | $430 | | Midstream - MPLX | $325 | $239 | | Total Capital expenditures and investments | $624 | $669 | ENVIRONMENTAL MATTERS AND COMPLIANCE COSTS - MPC incurs substantial expenditures due to environmental laws and regulations, which could adversely affect operating results[210] - No significant changes to environmental matters and compliance costs occurred during Q1 2024[211] CRITICAL ACCOUNTING ESTIMATES - There have been no significant changes to MPC's critical accounting estimates as of March 31, 2024[212] ACCOUNTING STANDARDS NOT YET ADOPTED - Certain new financial accounting pronouncements will be effective for MPC's financial statements in the future[213] Item 3. Quantitative and Qualitative Disclosures about Market Risk The company details its exposure to commodity price and interest rate risks and its strategies to manage them - As of March 31, 2024, MPC's long-term debt consisted entirely of fixed-rate instruments, making its fair value sensitive to interest rate fluctuations[221] Net Gains and Losses on Commodity Derivative Positions (Millions of dollars) - Three Months Ended March 31: | Item | 2024 | 2023 | | :--- | :--- | :--- | | Realized gain (loss) on settled derivative positions | $(37) | $125 | | Unrealized loss on open net derivative positions | $(37) | $(61) | | Net gain (loss) | $(74) | $64 | Sensitivity Analysis of IFO to Hypothetical Commodity Price Changes (Millions of dollars) - As of March 31, 2024: | Commodity | Change in IFO from a Hypothetical Price Increase of 10% | Change in IFO from a Hypothetical Price Increase of 25% | Change in IFO from a Hypothetical Price Decrease of 10% | Change in IFO from a Hypothetical Price Decrease of 25% | | :-------- | :------------------------------------------------------ | :------------------------------------------------------ | :------------------------------------------------------ | :------------------------------------------------------ | | Crude | $(64) | $(161) | $64 | $161 | | Refined products | $4 | $10 | $(4) | $(10) | | Blending products | $1 | $2 | $(1) | $(2) | | Soybean oil | $(8) | $(20) | $8 | $20 | Item 4. Controls and Procedures The company confirms the effectiveness of its disclosure controls and reports no material changes in internal control - MPC's management concluded that the design and operation of disclosure controls and procedures were effective as of March 31, 2024[223] - There were no changes in internal control over financial reporting during Q1 2024 that materially affected, or are reasonably likely to materially affect, internal controls[224] PART II - OTHER INFORMATION Item 1. Legal Proceedings The company discloses its involvement in legal actions and environmental enforcement matters - MPC is involved in legal proceedings but believes these will not have a material adverse effect on its financial position or cash flows[226] - The EPA issued Notices of Violation in late 2023/early 2024 regarding alleged violations at two refineries; any civil penalty is not expected to be material[229] Item 1A. Risk Factors The company states there have been no material changes to previously disclosed risk factors - No material changes to risk factors have occurred since the Annual Report on Form 10-K for the year ended December 31, 2023[230] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company summarizes its common stock repurchases during the first quarter of 2024 - As of March 31, 2024, $4.63 billion remained available under existing share repurchase authorizations, with an additional $5.0 billion approved on April 30, 2024[232] Summary of Equity Securities Purchases - Quarter Ended March 31, 2024: | Period | Total Number of Shares Purchased | Average Price Paid per Share ($) | Maximum Dollar Value of Shares that May Yet Be Purchased (Millions) | | :----- | :----------------------------- | :--------------------------- | :------------------------------------------------------- | | 01/01/2024-01/31/2024 | 5,734,014 | $154.25 | $5,899 | | 02/01/2024-02/29/2024 | 2,510,801 | $169.69 | $5,473 | | 03/01/2024-03/31/2024 | 4,682,743 | $178.42 | $4,638 | | Total | 12,927,558 | $166.00 | N/A | Item 5. Other Information The company confirms no director or officer adopted or terminated Rule 10b5-1 trading arrangements - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter ended March 31, 2024[233] Item 6. Exhibits This section lists all exhibits filed as part of the Form 10-Q Selected Exhibits Filed: | Exhibit Number | Exhibit Description | | :------------- | :------------------ | | 3.1 | Restated Certificate of Incorporation of Marathon Petroleum Corporation, dated April 24, 2024 | | 10.1 | Form of 2024 MPLX Phantom Unit Award Agreement | | 31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14 and 15d-14 | | 31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14 and 15d-14 | | 32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 | | 32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 | Signatures This section contains the required signatures certifying the filing of the Form 10-Q report - The report was signed on April 30, 2024, by Erin M. Brzezinski, Vice President and Controller, on behalf of Marathon Petroleum Corporation[239]