10-QPeriod: Q3 FY2023

Marathon Petroleum Corp Quarterly Report for Q3 Ended Sep 30, 2023

Filed October 31, 2023For Securities:MPC

Summary

Marathon Petroleum Corporation (MPC) reported its third quarter and first nine months of 2023 results, showing a decline in net income attributable to MPC compared to the prior year. This decrease was primarily driven by lower Refining & Marketing margins and a reduction in gains from asset disposals. Total revenues and other income also saw a significant decrease, mainly due to lower sales and operating revenues, reflecting decreased average refined product sales prices. Despite the lower reported income, the company's cash flow from operations remained strong. MPC continued its significant share repurchase program, returning substantial capital to shareholders. The company also provided an update on its strategic initiatives, including progress at the Martinez Renewables facility and the acquisition of an interest in LF Bioenergy. Management indicated that demand remains strong, and the company is focused on operational efficiency and strategic growth opportunities, while navigating market volatility and regulatory developments.

Financial Highlights

49 data points
Beta

Revenue

$40.92B

14.6% Gross Margin

Net Income

$3.28B

8.0% Net Margin

EPS (Diluted)

$8.28

Total Assets

$89.97B

Cash & Equivalents

$8.46B

Free Cash Flow

$4.53B

Financial Statements
Beta
Revenue$40.92B
Cost of Revenue$34.93B
Gross Profit$5.99B
SG&A Expenses$824.00M
Operating Expenses$36.83B
Operating Income$4.75B
Interest Expense$331.00M
Net Income$3.28B
EPS (Basic)$8.31
EPS (Diluted)$8.28
Shares Outstanding (Basic)394.00M
Shares Outstanding (Diluted)396.00M

Key Highlights

  • 1Net income attributable to MPC for Q3 2023 was $3.28 billion ($8.28 per diluted share), down from $4.48 billion ($9.06 per diluted share) in Q3 2022.
  • 2For the first nine months of 2023, net income attributable to MPC was $8.23 billion ($19.57 per diluted share), down from $11.20 billion ($21.04 per diluted share) in the same period of 2022.
  • 3Total revenues and other income decreased by $5.65 billion in Q3 2023 compared to Q3 2022, primarily due to lower sales and operating revenues and a significant decrease in net gain on disposal of assets.
  • 4Cash provided by operating activities for the first nine months of 2023 was $12.99 billion, an increase from $11.98 billion in the same period of 2022.
  • 5The company repurchased approximately $2.82 billion of its common stock in Q3 2023 and $9.07 billion in the first nine months of 2023.
  • 6As of September 30, 2023, MPC had $4.31 billion remaining under its share repurchase authorizations.
  • 7MPC announced an additional $5.0 billion share repurchase authorization on October 25, 2023.

Frequently Asked Questions

The decrease in net income attributable to MPC for the third quarter of 2023, compared to the third quarter of 2022, was primarily driven by lower Refining & Marketing margins and a significant decrease in the net gain on disposal of assets. Lower average refined product sales prices also contributed to the decline in revenues.

Marathon Petroleum has continued its active share repurchase program. In addition to existing authorizations, the company announced a further $5.0 billion share repurchase authorization on May 2, 2023, and another $5.0 billion on October 25, 2023. As of September 30, 2023, approximately $4.31 billion remained available under its repurchase authorizations. The company repurchased approximately $2.82 billion of its stock in Q3 2023 and $9.07 billion in the first nine months of 2023.

The Refining & Marketing segment saw decreased adjusted EBITDA per barrel in Q3 2023 compared to Q3 2022, primarily due to narrower crack spreads and lower per barrel margins. The company notes that its margin is influenced by various factors including crude oil differentials and RIN prices. While overall segment performance decreased year-over-year, the company highlighted strong demand in the markets it operates.

The company is involved in various environmental matters, including remediation liabilities. It also faces climate-related lawsuits in several jurisdictions, the ultimate outcome of which remains uncertain. Separately, MPLX, an indirect subsidiary, is involved in litigation concerning the Dakota Access Pipeline, where potential equity contributions are capped at approximately $170 million. While the company believes these matters will not have a material adverse effect, they represent ongoing contingencies.