01—Abstract
Summary
Summary of the 10-K filed February 23, 2023. Cited figures are marked; the original filing is the authoritative source.
Marathon Petroleum Corporation (MPC) reported strong financial performance for the fiscal year ending December 31, 2022, driven by robust demand for refined products and favorable refining margins.
The company, a leading integrated downstream energy company, operates the largest refining system in the United States. MPC's operations are divided into two main segments: Refining & Marketing and Midstream, with the latter primarily conducted through its majority-owned subsidiary, MPLX LP. The company saw a significant increase in revenues and a substantial improvement in net income attributable to MPC compared to the previous year.
This growth was primarily fueled by higher average refined product sales prices and increased sales volumes, reflecting a continued recovery in market demand. MPC also highlighted its strategic initiatives, including investments in sustainable fuels and technologies, and demonstrated a commitment to capital discipline and a low-cost culture. The company continued its share repurchase program, authorizing an additional $5 billiona in the period.
Looking ahead, MPC is focused on strengthening its competitive position, improving commercial performance, and advancing its sustainability goals. The company's diversified asset base and strategic investments position it well to navigate the evolving energy landscape.
02—Key points
Key Highlights
- Strong financial performance in 2022 with increased revenues and net income, driven by higher refined product prices and volumes.
- Operates the largest refining system in the U.S. with 2.9 million barrels per day of refining capacity.
- Two reportable segments: Refining & Marketing and Midstream (primarily MPLX LP).
- Significant investments in renewable fuels, including the Martinez Renewable Fuels joint venture.
- Repurchased a substantial amount of its common stock, demonstrating commitment to shareholder returns.
- Focus on capital discipline, operational excellence, and sustainability initiatives.
- Navigated inflationary pressures and supply chain disruptions while maintaining operations.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Marathon Petroleum kept $0.08.
- Revenue$177.45B100.0%
- Cost of revenue−$151.67B85.5%
- Gross profit$25.78B14.5%
- Operating costs−$4.31B2.4%
- Operating income$21.47B12.1%
- Interest, other & tax−$6.95B3.9%
- Net income$14.52B8.2%
Where FY2022 revenue went
$177.45B- Cost of revenue: $151.67B, 85% of revenue
- Net income: $14.52B, 8.2% of revenue
- SG&A: $2.77B, 1.6% of revenue
- Other operating costs: $1.54B, 0.9% of revenue
- Interest, other & tax: $6.95B, 3.9% of revenue
Kept 8.2% as net incomeNet income $14.52B · 8.2%Other operating costs $1.54B · 0.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 23, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $177.45B$119.98B | +47.9% |
| Cost of Revenue | $151.67B$110.01B | +37.9% |
| Gross Profit | $25.78B$9.97B | +158.5% |
| SG&A Expenses | $2.77B$2.54B | +9.3% |
| Operating Expenses | $158.48B$116.63B | +35.9% |
| Operating Income | $21.47B$4.30B | +399.3% |
| Interest Expense | $1.30B$1.34B | −3.1% |
| Net Income | $14.52B$9.74B | +49.1% |
| EPS (Basic) | $28.31$15.34 | +84.6% |
| EPS (Diluted) | $28.12$15.24 | +84.5% |
| Shares Outstanding (Basic) | 512.00M634.00M | −19.2% |
| Shares Outstanding (Diluted) | 516.00M638.00M | −19.1% |
05—Questions
Frequently Asked Questions
What were Marathon Petroleum's main financial highlights for the fiscal year 2022?
Marathon Petroleum Corporation (MPC) reported a significant increase in net income attributable to MPC, rising to $14.5 billion in 2022 from $9.7 billion in 2021. This growth was primarily driven by higher average refined product sales prices and volumes, contributing to a substantial increase in both Refining & Marketing margins and Midstream throughputs.
How is Marathon Petroleum structured and how did its segments perform?
MPC operates through two primary segments: Refining & Marketing and Midstream, with Midstream operations largely conducted through its master limited partnership, MPLX LP. The Refining & Marketing segment saw segment adjusted EBITDA increase significantly to $19.3 billion in 2022, up from $3.5 billion in 2021, reflecting strong market conditions. The Midstream segment also showed robust performance, with segment adjusted EBITDA increasing to $5.8 billion in 2022 from $5.4 billion in 2021, primarily benefiting from higher product pricing and gathering system throughputs.
What are Marathon Petroleum's key strategic initiatives and future outlook?
MPC is focused on strengthening the competitive position of its assets, improving commercial performance through advantaged feedstock and dynamic market approaches, and maintaining capital discipline with a focus on a low-cost culture. A key strategic initiative includes advancing its renewable fuels production capabilities, exemplified by the Martinez Renewable Fuels joint venture. The company also emphasized its commitment to sustainability, setting targets for greenhouse gas (GHG) emission reductions. MPC remains committed to shareholder returns, evidenced by its ongoing share repurchase program.
How does Marathon Petroleum manage risks related to commodity price volatility and environmental regulations?
Marathon Petroleum utilizes commodity derivative instruments to hedge against price risk in crude oil and refined product markets. The company is subject to numerous environmental laws and regulations and accrues liabilities for anticipated remediation costs. While facing increasing regulatory scrutiny on GHG emissions and climate change, MPC is investing in sustainable technologies and aims to reduce its carbon intensity.
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