10-QPeriod: Q3 FY2012

Marathon Petroleum Corp Quarterly Report for Q3 Ended Sep 30, 2012

Filed November 9, 2012For Securities:MPC

Summary

Marathon Petroleum Corporation (MPC) reported strong financial performance for the nine months ending September 30, 2012, with net income of $2.634 billion, an increase from $2.464 billion in the same period of 2011. This growth was driven by increased income from operations in the Refining & Marketing segment and a significant gain from the settlement of the Minnesota Assets sale. The company's revenue also saw a substantial increase, reflecting higher refined product selling prices and sales volumes. Operationally, MPC continued to execute its strategic initiatives, including targeted acquisitions within its Speedway convenience store segment and investments in refining and pipeline infrastructure. The company also announced a major acquisition of BP's Texas City refinery, which is expected to further strengthen its market position. MPC also advanced its capital allocation strategy through a significant share repurchase program and the successful initial public offering of its midstream subsidiary, MPLX.

Financial Highlights

48 data points
Beta

Revenue

$21.05B

Net Income

$1.22B

5.8% Net Margin

EPS (Diluted)

$1.79

Total Assets

$26.58B

Cash & Equivalents

$3.39B

Free Cash Flow

$1.50B

Financial Statements
Beta
Revenue$21.05B
SG&A Expenses$293.00M
Operating Expenses$19.35B
Operating Income$1.90B
Interest Expense$49.00M
Net Income$1.22B
EPS (Basic)$1.80
EPS (Diluted)$1.79
Shares Outstanding (Basic)676.00M
Shares Outstanding (Diluted)680.00M

Key Highlights

  • 1Net income for the nine months ended September 30, 2012, increased to $2.634 billion, up from $2.464 billion in the prior year period.
  • 2Total revenues and other income grew to $61.781 billion for the nine months ended September 30, 2012, compared to $59.318 billion in the prior year.
  • 3The Refining & Marketing segment income from operations increased, driven by a higher gross margin per barrel.
  • 4Speedway segment revenue increased, supported by higher gasoline, distillates, and merchandise sales, along with strategic acquisitions of convenience stores.
  • 5MPC repurchased approximately $1.35 billion of its common stock through two Accelerated Share Repurchase (ASR) programs.
  • 6The company announced the pending acquisition of BP's Texas City refinery and related assets for $598 million plus inventory value, expected to close in early 2013.
  • 7MPC completed the initial public offering (IPO) of its midstream subsidiary, MPLX, raising approximately $405 million for MPLX and distributing $203 million in net proceeds to MPC.

Frequently Asked Questions

For the third quarter of 2012, Marathon Petroleum Corporation reported net income of $1.224 billion, or $3.59 per diluted share, compared to $1.133 billion, or $3.16 per diluted share, in the same period of 2011. For the first nine months of 2012, net income was $2.634 billion, or $7.65 per diluted share, up from $2.464 billion, or $6.88 per diluted share, in the first nine months of 2011. The increases were primarily driven by gains from asset sales and improved segment performance, partially offset by higher expenses such as pension settlement costs.

The increase in total revenues and other income to $61.781 billion for the first nine months of 2012 was primarily due to higher refined product selling prices, increased crude oil and refinery feedstock sales volumes, and higher consumer excise taxes. The company also saw an increase in refined product sales volumes compared to the same period in the prior year.

The Refining & Marketing segment's income from operations increased year-over-year for the first nine months, largely due to a higher gross margin per barrel driven by improved crack spreads. The Speedway segment saw revenue growth from increased gasoline, distillates, and merchandise sales, supported by strategic acquisitions. The Pipeline Transportation segment's income saw a decrease, primarily due to reduced shipment volumes and dividend income from pipeline affiliates.

MPC executed several key strategic initiatives, including acquiring convenience stores for its Speedway segment, announcing the significant acquisition of BP's Texas City refinery and related assets, and completing the initial public offering (IPO) of its midstream subsidiary, MPLX. The company also continued its share repurchase program, buying back approximately $1.35 billion in common stock through two Accelerated Share Repurchase (ASR) programs.