10-QPeriod: Q1 FY2024

Marathon Petroleum Corp Quarterly Report for Q1 Ended Mar 31, 2024

Filed April 30, 2024For Securities:MPC

Summary

Marathon Petroleum Corporation (MPC) reported a significant year-over-year decrease in net income attributable to MPC for the first quarter of 2024, falling to $937 million ($2.58 per diluted share) from $2.72 billion ($6.09 per diluted share) in the prior year period. This decline was primarily driven by lower Refining & Marketing margins, impacted by narrower crack spreads and increased turnaround activity, which led to higher operating costs and reduced refinery throughput. While total revenues and other income also saw a decrease, income from equity method investments and other income sources provided some offset. The company's Midstream segment demonstrated resilience, with adjusted EBITDA increasing year-over-year, supported by higher rates and processing volumes. MPC continued its capital allocation strategy, repurchasing $2.22 billion of its common stock during the quarter and announcing an additional $5.0 billion share repurchase authorization. The company maintains strong liquidity with over $12 billion available for MPC (excluding MPLX), underscoring its financial stability despite the challenging refining environment.

Financial Highlights

49 data points
Beta

Revenue

$32.71B

9.5% Gross Margin

Net Income

$937.00M

2.9% Net Margin

EPS (Diluted)

$2.58

Total Assets

$85.53B

Cash & Equivalents

$3.18B

Free Cash Flow

$947.00M

Financial Statements
Beta
Revenue$32.71B
Cost of Revenue$29.59B
Gross Profit$3.11B
SG&A Expenses$779.00M
Operating Expenses$31.43B
Operating Income$1.78B
Interest Expense$341.00M
Net Income$937.00M
EPS (Basic)$2.59
EPS (Diluted)$2.58
Shares Outstanding (Basic)361.00M
Shares Outstanding (Diluted)362.00M

Key Highlights

  • 1Net income attributable to MPC significantly decreased to $937 million in Q1 2024 from $2.72 billion in Q1 2023, primarily due to lower refining margins and higher turnaround costs.
  • 2Refining & Marketing segment adjusted EBITDA saw a substantial decline to $1.87 billion from $3.85 billion year-over-year, driven by narrower crack spreads and reduced refinery throughput.
  • 3Midstream segment adjusted EBITDA increased to $1.59 billion from $1.53 billion year-over-year, showcasing resilience in its logistics and gathering operations.
  • 4Total revenues and other income decreased by $1.87 billion to $33.21 billion, mainly due to lower sales from the Refining & Marketing segment.
  • 5The company repurchased $2.22 billion of its common stock in Q1 2024, and announced an additional $5.0 billion share repurchase authorization, indicating a commitment to returning capital to shareholders.
  • 6MPC maintained strong liquidity, with over $12 billion in available liquidity (excluding MPLX) as of March 31, 2024, supporting ongoing operations and capital allocation plans.
  • 7The company reported a significant decrease in provision for income taxes, contributing to a partial offset of the decline in pre-tax income.

Frequently Asked Questions

The primary drivers for the decrease in net income attributable to MPC were lower Refining & Marketing margins, significantly impacted by narrower crack spreads, and increased turnaround costs which led to higher operating expenses and reduced refinery throughput. These factors combined to reduce income from operations.

The Refining & Marketing segment experienced a significant year-over-year decline in adjusted EBITDA due to challenging market conditions like narrower crack spreads and increased turnaround activity. In contrast, the Midstream segment demonstrated strength, with its adjusted EBITDA increasing year-over-year, supported by higher rates and processing volumes.

Marathon Petroleum continues to prioritize returning capital to shareholders. During the first quarter of 2024, the company repurchased $2.22 billion of its common stock. Furthermore, the board of directors approved an additional $5.0 billion share repurchase authorization, demonstrating a commitment to shareholder value.

Marathon Petroleum maintains a strong liquidity position. As of March 31, 2024, MPC had over $12 billion in available liquidity (excluding MPLX), consisting of cash, cash equivalents, short-term investments, and available capacity under its credit facilities. This robust liquidity supports its operational needs, capital expenditures, and capital return programs.