Marathon Petroleum Corp. Reports Fourth-Quarter and Full-Year 2022 Results - Yahoo Finance

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FINDLAY, Ohio, Jan. 31, 2023 /PRNewswire/ --

• Fourth-quarter net income attributable to MPC of $3.3 billion, or $7.09 per diluted share; adj. net income of $3.1 billion, or $6.65 per diluted share; adj. EBITDA of $5.8 billion

• Full-year net cash provided by operating activities of $16.4 billion, reflecting improving operational and commercial execution

• Returned $13.2 billion of capital to shareholders in 2022; $11.9 billion through share repurchases and $1.3 billion through dividends

• 2023 MPC standalone capital spending outlook of $1.3 billion; approximately 40% of growth capital for low carbon projects

• Announced incremental $5 billion share repurchase authorization

Marathon Petroleum Corp. (NYSE: MPC) today reported net income attributable to MPC of $3.3 billion, or $7.09 per diluted share, for the fourth quarter of 2022, compared with net income attributable to MPC of $774 million, or $1.27 per diluted share, for the fourth quarter of 2021. Adjusted net income was $3.1 billion, or $6.65 per diluted share, for the fourth quarter of 2022. This compares to adjusted net income of $794 million, or $1.30 per diluted share, for the fourth quarter of 2021. Adjustments are shown in the accompanying release tables.

For the full year 2022, net income attributable to MPC was $14.5 billion, or $28.12 per diluted share, compared with net income attributable to MPC of $9.7 billion or $15.24 per diluted share for the full year of 2021. Adjusted net income was $13.5 billion, or $26.16 per diluted share for the full year of 2022. This compares with adjusted net income attributable to MPC of $1.6 billion or $2.45 per diluted share for the full year of 2021. Adjustments are shown in the accompanying release tables.

"In 2022, we delivered on our strategic commitments," said President and Chief Executive Officer Michael J. Hennigan. "We operated our system at 96% utilization and executed commercially, resulting in $16.4 billion of net cash from operations. We returned nearly $12 billion through share repurchases during the year, bringing total repurchases to almost $17 billion since May 2021. In addition, back in November, we increased our quarterly dividend by 30%. Today, we announced a 2023 MPC standalone capital spending outlook of $1.3 billion, and with the incremental share repurchase authorization we now have $7.6 billion in remaining authorization."

Results from Operations

Adjusted EBITDA from Continuing and Discontinued Operations (unaudited)
		Three Months Ended December 31,						Twelve Months Ended December 31,
(In millions)		2022			2021			2022			2021
Refining & Marketing Segment
Segment income from operations	$	3,910		$	881		$	16,437		$	1,016
Add: Depreciation and amortization		455			464			1,850			1,870
Refining planned turnaround costs		442			204			1,122			582
Storm impacts		—			—			—			50
LIFO inventory charge		(176)			—			(148)			—
Refining & Marketing segment adjusted EBITDA		4,631			1,549			19,261			3,518
Midstream Segment
Segment income from operations		1,088			1,070			4,462			4,061
Add: Depreciation and amortization		327			335			1,310			1,329
Storm impacts		—			—			—			20
Midstream segment adjusted EBITDA		1,415			1,405			5,772			5,410
Subtotal		6,046			2,954			25,033			8,928
Corporate		(259)			(173)			(753)			(696)
Add: Depreciation and amortization		15			14			55			109
Adjusted EBITDA from continuing operations	$	5,802		$	2,795		$	24,335		$	8,341
Speedway
Speedway	$	—		$	—		$	—		$	613
Add: Depreciation and amortization		—			—			—			3
Adjusted EBITDA from discontinued operations	$	—		$	—		$	—		$	616
Adjusted EBITDA from continuing and discontinued operations	$	5,802		$	2,795		$	24,335		$	8,957

Refining & Marketing (R&M)

Segment adjusted EBITDA was $4.6 billion in the fourth quarter of 2022, versus $1.5 billion for the fourth quarter of 2021. Segment adjusted EBITDA excludes refining planned turnaround costs, which totaled $442 million in the fourth quarter of 2022 and $204 million in the fourth quarter of 2021. The increase in segment adjusted EBITDA was driven by higher R&M margins.

R&M margin was $28.82 per barrel for the fourth quarter of 2022, versus $15.88 per barrel for the fourth quarter of 2021. Crude capacity utilization was approximately 94%, resulting in total throughput of 2.9 million barrels per day for the fourth quarter of 2022, which is roughly flat year-over-year.

Refining operating costs per barrel were $5.62 for the fourth quarter of 2022, versus $5.36 for the fourth quarter of 2021. The majority of this increase was primarily driven by higher energy costs, project expense associated with higher turnaround activity, as well as a special compensation expense.

Midstream

Segment adjusted EBITDA was $1.4 billion in the fourth quarter of 2022, versus $1.4 billion for the fourth quarter of 2021 as higher pipeline tariff rates and contributions from joint ventures were offset largely by higher project related expenses, lower natural gas liquids prices, and a special compensation expense.

Corporate and Items Not Allocated

Corporate expenses totaled $259 million in the fourth quarter of 2022, compared with $173 million in the fourth quarter of 2021. The variance was primarily driven by retroactive operating tax assessments for prior periods and special compensation expenses. The company will continue to pursue recovery of these tax assessments.

Speedway

This business was sold on May 14, 2021. Historic results are reported as discontinued operations.

Financial Position, Liquidity, and Return of Capital

As of December 31, 2022, MPC had $11.8 billion of cash, cash equivalents, and short-term investments and $5 billion available on its bank revolving credit facility. MPC debt at the end of the fourth quarter of 2022 totaled $6.9 billion, excluding MPLX debt. MPC's gross debt-to-capital ratio, excluding MPLX debt, was 20% at the end of the fourth quarter of 2022, which is below the company's stated target of 25%-30%.

In October 2022, MPC completed its $15 billion return of capital commitment, having repurchased approximately 30% of outstanding shares as of the program commencement in May 2021. In the fourth quarter, the company repurchased $1.8 billion of company shares, and since year-end, has repurchased $0.7 billion through January 27, 2023.

Additionally, the Board of Directors has approved an incremental $5 billion share repurchase authorization. As of today, the company has approximately $7.6 billion remaining available under its current share repurchase authorization. The authorization has no expiration date. MPC may utilize various methods to effect the repurchases, which could include open market repurchases, negotiated block transactions, accelerated share repurchases, tender offers or open market solicitations for shares, some of which may be effected through Rule 10b5-1 plans. The timing of repurchases will depend upon several factors, including market and business conditions, and repurchases may be discontinued at any time.

Strategic and Operations Update

MPC's standalone capital spending outlook for 2023 is $1.3 billion. Approximately 70% of overall spending is focused on growth capital and 30% on sustaining capital. Of the $900 million of growth capital, approximately 40% is allocated to low carbon opportunities focused on expanding into new commercial opportunities, improving the efficiency of MPC's assets, and lowering the company's emissions profile and enhancing its long-term sustainability.

Phase I of the Martinez Renewable Fuels facility is progressing start-up activities. The facility is on track to reach full Phase I production capacity of 260 million gallons per year of renewable fuels by the end of the first quarter of 2023. Pretreatment capabilities are expected to come online in the second half of 2023 and the facility is expected to be capable of producing 730 million gallons per year by the end of 2023.

MPLX announced a capital outlook of $950 million, which includes approximately $800 million of growth capital and $150 million of maintenance capital. The capital spending plan focuses on expansions and de-bottlenecking of MPLX's existing Logistics & Storage segment assets, and increasing its Gathering & Processing segment's capacity to meet customer demand. MPLX continues to evaluate opportunities to meet the needs of today and participate in an energy-diverse future.

2023 Capital Plan ($ millions)
MPC (excluding MPLX)
Refining & Marketing Segment:	$	1,250
Growth - Traditional		550
Growth - Low Carbon		350
Maintenance		350
Midstream Segment (excluding MPLX)		—
Corporate and Other(a)		50
Total MPC (excluding MPLX)	$	1,300
MPLX Total	$	950

(a) Does not include capitalized interest

First Quarter 2023 Outlook
Refining & Marketing Segment:
Refining operating costs per barrel(a)	$	5.60
Distribution costs (in millions)	$	1,350
Refining planned turnaround costs (in millions)	$	350
Depreciation and amortization (in millions)	$	460
Refinery throughputs (mbpd):
Crude oil refined		2,540
Other charge and blendstocks		295
Total		2,835
Corporate (in millions)	$	175

(a) Excludes refining planned turnaround and depreciation and amortization expense

Conference Call

At 11:00 a.m. ET today, MPC will hold a conference call and webcast to discuss the reported results and provide an update on company operations. Interested parties may listen by visiting MPC's website at https://ift.tt/Gbk6sMW. A replay of the webcast will be available on the company's website for two weeks. Financial information, including the earnings release and other investor-related materials, will also be available online prior to the conference call and webcast at https://ift.tt/Gbk6sMW.

About Marathon Petroleum Corporation

Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation's largest refining system. MPC's marketing system includes branded locations across the United States, including Marathon brand retail outlets. MPC also owns the general partner and majority limited partner interest in MPLX LP, a midstream company that owns and operates gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure. More information is available at www.marathonpetroleum.com.

Investor Relations Contacts: (419) 421-2071
Kristina Kazarian, Vice President, Finance and Investor Relations
Brian Worthington, Director
Kenan Kinsey, Supervisor

Media Contact: (419) 421-3312
Jamal Kheiry, Communications Manager

References to Earnings and Defined Terms

References to earnings mean net income attributable to MPC from the statements of income. Unless otherwise indicated, references to earnings and earnings per share are MPC's share after excluding amounts attributable to noncontrolling interests.

Forward-Looking Statements

This press release contains forward-looking statements regarding MPC. These forward-looking statements may relate to, among other things, MPC's expectations, estimates and projections concerning its business and operations, financial priorities, strategic plans and initiatives, capital return plans, capital expenditure plans, operating cost reduction objectives, and environmental, social and governance ("ESG") plans and goals, including those related to greenhouse gas emissions, diversity and inclusion and ESG reporting. Forward-looking and other statements regarding our ESG plans and goals are not an indication that these statements are material to investors. In addition, historical, current, and forward-looking ESG-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. You can identify forward-looking statements by words such as "anticipate," "believe," "commitment," "could," "design," "estimate," "expect," "forecast," "goal," "guidance," "intend," "may," "objective," "opportunity," "outlook," "plan," "policy," "position," "potential," "predict," "priority," "project," "prospective," "pursue," "seek," "should," "strategy," "target," "will," "would" or other similar expressions that convey the uncertainty of future events or outcomes. MPC cautions that these statements are based on management's current knowledge and expectations and are subject to certain risks and uncertainties, many of which are outside of the control of MPC, that could cause actual results and events to differ materially from the statements made herein. Factors that could cause MPC's actual results to differ materially from those implied in the forward-looking statements include but are not limited to: the continuance or escalation of the military conflict between Russia and Ukraine and related sanctions and market disruptions; general economic, political or regulatory developments, including inflation, rising interest rates and changes in governmental policies relating to refined petroleum products, crude oil, natural gas or NGLs, or taxation; continued or further volatility in and degradation of general economic, market, industry or business conditions; the magnitude, duration and extent of future resurgences of the COVID-19 pandemic and its effects; the regional, national and worldwide demand for refined products and related margins; the regional, national or worldwide availability and pricing of crude oil, natural gas, NGLs and other feedstocks and related pricing differentials; the success or timing of completion of ongoing or anticipated projects or transactions, including the conversion of the Martinez Refinery to a renewable fuels facility; the timing and ability to obtain necessary regulatory approvals and permits and to satisfy other conditions necessary to complete planned projects or to consummate planned transactions within the expected timeframes if at all; the availability of desirable strategic alternatives to optimize portfolio assets and the ability to obtain regulatory and other approvals with respect thereto; our ability to successfully implement our sustainable energy strategy and principles, achieve our ESG plans and goals and realize the expected benefits thereof; accidents or other unscheduled shutdowns affecting our refineries, machinery, pipelines, processing, fractionation and treating facilities or equipment, means of transportation, or those of our suppliers or customers; the impact of adverse market conditions or other similar risks to those identified herein affecting MPLX; and the factors set forth under the heading "Risk Factors" in MPC's and MPLX's Annual Reports on Form 10-K for the year ended Dec. 31, 2021, and in other filings with the SEC. Any forward-looking statement speaks only as of the date of the applicable communication and we undertake no obligation to update any forward-looking statement except to the extent required by applicable law.

Copies of MPC's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other SEC filings are available on the SEC's website, MPC's website at https://www.marathonpetroleum.com/Investors/ or by contacting MPC's Investor Relations office. Copies of MPLX's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other SEC filings are available on the SEC's website, MPLX's website at http://ir.mplx.com or by contacting MPLX's Investor Relations office.

Consolidated Statements of Income (unaudited)
		Three Months Ended December 31,						Twelve Months Ended December 31,
(In millions, except per-share data)		2022			2021			2022			2021
Revenues and other income:
Sales and other operating revenues	$	39,813		$	35,336		$	177,453		$	119,983
Income from equity method investments		186			152			655			458
Net gain (loss) on disposal of assets		(11)			18			1,061			21
Other income		105			102			783			468
Total revenues and other income		40,093			35,608			179,952			120,930
Costs and expenses:
Cost of revenues (excludes items below)		33,575			32,184			151,671			110,008
Depreciation and amortization		797			813			3,215			3,364
Selling, general and administrative expenses		763			656			2,772			2,537
Other taxes		219			177			825			721
Total costs and expenses		35,354			33,830			158,483			116,630
Income from continuing operations		4,739			1,778			21,469			4,300
Net interest and other financial costs		186			430			1,000			1,483
Income from continuing operations before income taxes		4,553			1,348			20,469			2,817
Provision for income taxes on continuing operations		984			243			4,491			264
Income from continuing operations, net of tax		3,569			1,105			15,978			2,553
Income from discontinued operations, net of tax		72			—			72			8,448
Net income		3,641			1,105			16,050			11,001
Less net income attributable to:
Redeemable noncontrolling interest		23			21			88			100
Noncontrolling interests		297			310			1,446			1,163
Net income attributable to MPC	$	3,321		$	774		$	14,516		$	9,738
Per share data
Basic:
Continuing operations	$	6.98		$	1.28		$	28.17		$	2.03
Discontinued operations		0.15			—			0.14			13.31
Net income per share	$	7.13		$	1.28		$	28.31		$	15.34
Weighted average shares outstanding (in millions)		465			605			512			634
Diluted:
Continuing operations	$	6.94		$	1.27		$	27.98		$	2.02
Discontinued operations		0.15			—			0.14			13.22
Net income per share	$	7.09		$	1.27		$	28.12		...

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