Summary
Marathon Petroleum Corporation (MPC) reported a net loss attributable to MPC of $9.23 billion for the first six months of 2020, a significant deterioration from a net income of $1.10 billion in the same period of 2019. This decline was primarily driven by substantial impairment charges totaling $9.16 billion, including $7.33 billion in goodwill impairment, $1.32 billion for equity method investments, and $517 million for long-lived assets, largely due to the economic impact of COVID-19 and declining commodity prices. The company also recorded an LCM inventory valuation adjustment of $1.74 billion for the period. Despite the significant net loss, the company's operational performance in the second quarter of 2020 showed some resilience, with net income attributable to MPC of $9 million ($0.01 per diluted share), compared to $1.11 billion ($1.66 per diluted share) in the prior year's second quarter. This was partially supported by a $1.48 billion LCM benefit recognized in the quarter. MPC is also strategically repositioning itself, announcing the pending sale of its Speedway retail business to 7-Eleven for $21 billion, which is expected to significantly strengthen its financial position and allow for debt reduction and shareholder returns. MPC ended the period with $1.09 billion in cash and cash equivalents and substantial liquidity of $8.73 billion from cash on hand and available credit facilities, underscoring its financial flexibility despite the challenging operating environment.
Financial Highlights
48 data points| Revenue | $12.20B |
| Cost of Revenue | $11.50B |
| Gross Profit | $693.00M |
| SG&A Expenses | $665.00M |
| Operating Expenses | $11.72B |
| Operating Income | $575.00M |
| Interest Expense | $371.00M |
| Net Income | $9.00M |
| EPS (Basic) | $0.01 |
| EPS (Diluted) | $0.01 |
| Shares Outstanding (Basic) | 650.00M |
| Shares Outstanding (Diluted) | 650.00M |
Key Highlights
- 1Significant net loss of $9.23 billion for the first six months of 2020, largely due to $9.16 billion in impairment charges (goodwill, equity method investments, long-lived assets) stemming from COVID-19 impacts and lower commodity prices.
- 2Second quarter 2020 net income attributable to MPC was $9 million ($0.01/share), a sharp decline from $1.11 billion ($1.66/share) in Q2 2019, but included a $1.48 billion LCM inventory valuation benefit.
- 3Revenues significantly impacted by COVID-19, with total revenues and other income down $18.47 billion for Q2 and $22.99 billion for the first six months compared to the prior year periods.
- 4Refining & Marketing segment performance suffered, with segment income from operations falling to a loss of $2.24 billion for the first six months of 2020 from income of $572 million in the prior year, driven by lower crack spreads and volumes.
- 5Retail segment income from operations increased to $1.01 billion for the first six months of 2020 from $663 million in the prior year, primarily due to higher fuel margins, despite lower fuel sales volumes.
- 6Announced agreement to sell the Speedway retail business to 7-Eleven for $21 billion, expected to close in Q1 2021, which will reshape the company's portfolio and generate substantial cash proceeds.
- 7Maintained strong liquidity with $1.09 billion in cash and $8.73 billion in total liquidity (cash plus available credit facilities) as of June 30, 2020.