01—Abstract
Summary
Summary of the 10-K filed February 24, 2022. Cited figures are marked; the original filing is the authoritative source.
Marathon Petroleum Corporation (MPC) demonstrated a significant financial recovery in 2021, largely driven by the sale of its Speedway retail business for $21.38 billiona.
This strategic divestiture provided substantial capital, which the company is using to strengthen its balance sheet and return value to shareholders through share repurchases. The company's core Refining & Marketing segment saw improved performance due to higher refined product prices and volumes, reflecting a broader economic recovery post-COVID-19. MPC is also actively investing in sustainable fuels, notably through the conversion of its Martinez refinery to a renewable diesel facility and its joint venture with ADM for soybean oil processing.
The Midstream segment, primarily through its subsidiary MPLX LP, continued to provide stable, fee-based earnings. The company maintains a disciplined approach to capital allocation and cost management, positioning itself for long-term operational and financial performance in an evolving energy landscape.
02—Key points
Key Highlights
- Completed the sale of Speedway for $21.38 billion, generating substantial proceeds for balance sheet strengthening and capital returns to shareholders.
- Refining & Marketing segment income improved significantly in 2021 due to higher product prices and volumes, reflecting post-pandemic economic recovery.
- Strategic investments in renewable fuels, including the Martinez refinery conversion to renewable diesel and a joint venture for soybean oil production.
- MPLX LP, the midstream segment, continued to provide stable, fee-based earnings.
- Company maintained capital discipline and a focus on cost reduction across operations.
- Significant debt reduction activities undertaken in 2021, including the redemption of multiple senior notes.
- Announced a new $5 billion share repurchase authorization in February 2022, underscoring commitment to shareholder returns.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Marathon Petroleum kept $0.08.
- Revenue$119.98B100.0%
- Cost of revenue−$110.01B91.7%
- Gross profit$9.97B8.3%
- Operating costs−$5.67B4.7%
- Operating income$4.30B3.6%
- Interest, other & tax$5.44B4.5%
- Net income$9.74B8.1%
Where FY2021 revenue went
$119.98B- Cost of revenue: $110.01B, 92% of revenue
- Operating income: $4.30B, 3.6% of revenue
- SG&A: $2.54B, 2.1% of revenue
- Other operating costs: $3.14B, 2.6% of revenue
Kept 3.6% as operating incomeOperating income $4.30B · 3.6%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 24, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $119.98B$69.78B | +71.9% |
| Cost of Revenue | $110.01B$65.73B | +67.4% |
| Gross Profit | $9.97B$4.05B | +146.5% |
| SG&A Expenses | $2.54B$2.71B | −6.4% |
| Operating Expenses | $116.63B$81.28B | +43.5% |
| Operating Income | $4.30B-$12.25B | +135.1% |
| Interest Expense | $1.34B$1.46B | −8.3% |
| Net Income | $9.74B-$9.83B | +199.1% |
| EPS (Basic) | $15.34$-15.13 | +201.4% |
| EPS (Diluted) | $15.24$-15.13 | +200.7% |
| Shares Outstanding (Basic) | 634.00M649.00M | −2.3% |
| Shares Outstanding (Diluted) | 638.00M649.00M | −1.7% |
05—Questions
Frequently Asked Questions
What was the impact of the Speedway sale on MPC's financial performance?
The sale of Speedway for $21.38 billion in May 2021 was a major event, generating significant cash proceeds. This allowed MPC to strengthen its balance sheet, reduce debt, and return capital to shareholders through share repurchases. The transaction also resulted in a substantial pre-tax gain of $11.68 billion, significantly boosting MPC's net income for the year.
How is MPC positioning itself for the energy transition, particularly with renewable fuels?
MPC is making strategic investments in the renewable fuels sector. Key initiatives include the conversion of its Martinez refinery into a renewable diesel facility, which is expected to produce significant volumes of renewable diesel by the end of 2023. Additionally, MPC has formed a joint venture with ADM to produce soybean oil, a key feedstock for renewable diesel. The company also operates a renewable fuels facility in Dickinson, North Dakota.
What is the role of MPLX LP in MPC's overall business strategy?
MPLX LP is MPC's midstream segment, which provides essential transportation, storage, distribution, and marketing services for crude oil and refined products, primarily for MPC's Refining & Marketing segment. MPLX also operates gathering, processing, and fractionation assets for natural gas and NGLs. Its operations are largely fee-based, providing stable and predictable cash flows that complement MPC's refining operations.
How is MPC managing its debt and returning capital to shareholders?
MPC has actively managed its debt by redeeming significant portions of its senior notes in 2021. Concurrently, the company has demonstrated a strong commitment to shareholder returns through substantial share repurchases, supported by the proceeds from the Speedway sale and newly authorized repurchase programs. This strategy aims to enhance shareholder value while maintaining a healthy financial position.
06—Continue