Marathon Petroleum Corp. Reports Third-Quarter 2024 Results
FINDLAY, Ohio, Nov 5, 2024 /PRNewswire/ --
Third-quarter net income attributable to MPC of $622 million, or $1.87 per diluted share
$2.5 billion of adjusted EBITDA and $1.7 billion of net cash provided by operating activities
Executing Midstream growth anchored in the Permian and Marcellus; $1.6 billion segment adjusted EBITDA in the third quarter, up nearly 6% year-over-year
Annually MPC expects to receive distributions of $2.5 billion following MPLX's 12.5% quarterly distribution increase, building on the strong value proposition to MPC through our integrated relationship
$3.0 billion of capital returned to shareholders; announced additional $5 billion share repurchase authorization and a 10% quarterly dividend increase
Marathon Petroleum Corp. (NYSE:MPC) today reported net income attributable to MPC of $622 million, or $1.87 per diluted share, for the third quarter of 2024, compared with net income attributable to MPC of $3.3 billion, or $8.28 per diluted share, for the third quarter of 2023.
The third quarter of 2024 adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) was $2.5 billion, compared with $5.7 billion for the third quarter of 2023. Adjustments are shown in the accompanying release tables.
"We remain committed to peer-leading operational excellence, commercial performance, and profitability per barrel in each of the regions in which we operate," said President and Chief Executive Officer Maryann Mannen. "MPLX continues to grow, and the durability of its cash flow profile supported a 12.5% increase to its quarterly distribution, strengthening the value proposition to MPC. We returned $3.0 billion through share repurchases and dividends during the quarter, demonstrating our commitment of peer-leading capital return."
Results from Operations
Adjusted EBITDA (unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In millions)
2024
2023
2024
2023
Refining & Marketing Segment
Segment income from operations
$
298
$
3,757
$
2,383
$
9,076
Add: Depreciation and amortization
465
463
1,395
1,411
Refining planned turnaround costs
290
153
1,121
902
Refining & Marketing segment adjusted EBITDA
1,053
4,373
4,899
11,389
Midstream Segment
Segment income from operations
1,275
1,136
3,796
3,550
Add: Depreciation and amortization
353
340
1,041
988
Garyville incident response costs
—
63
—
63
Midstream segment adjusted EBITDA
1,628
1,539
4,837
4,601
Subtotal
2,681
5,912
9,736
15,990
Corporate
(224)
(246)
(675)
(613)
Add: Depreciation and amortization
28
42
75
80
Adjusted EBITDA
$
2,485
$
5,708
$
9,136
$
15,457
Refining & Marketing (R&M)
Segment adjusted EBITDA was $1.1 billion in the third quarter of 2024, versus $4.4 billion for the third quarter of 2023. R&M segment adjusted EBITDA was $3.82 per barrel for the third quarter of 2024, versus $16.06 per barrel for the third quarter of 2023. Segment adjusted EBITDA excludes refining planned turnaround costs, which totaled $290 million in the third quarter of 2024 and $153 million in the third quarter of 2023. The decrease in segment adjusted EBITDA was driven primarily by lower market crack spreads.
R&M margin was $14.35 per barrel for the third quarter of 2024, versus $26.16 per barrel for the third quarter of 2023. Crude capacity utilization was approximately 94%, resulting in total throughput of 3.0 million barrels per day (bpd) for the third quarter of 2024.
Refining operating costs were $5.30 per barrel for the third quarter of 2024, versus $5.14 per barrel for the third quarter of 2023.
Midstream
Segment adjusted EBITDA was $1.6 billion in the third quarter of 2024, versus $1.5 billion for the third quarter of 2023. The results were primarily driven by higher rates and volumes, including growth from equity affiliates, and contributions from recently acquired assets in the Utica and Permian basins.
Corporate and Items Not Allocated
Corporate expenses totaled $224 million in the third quarter of 2024, compared with $246 million in the third quarter of 2023.
Financial Position, Liquidity, and Return of Capital
As of September 30, 2024, MPC had $5.1 billion of cash, cash equivalents, and short-term investments, including $2.4 billion of cash at MPLX, and $5 billion available on its bank revolving credit facility. The company repaid the $750 million of senior notes that matured in September 2024 and anticipates refinancing the notes.
In the third quarter, the company returned approximately $3.0 billion of capital to shareholders through $2.7 billion of share repurchases and $273 million of dividends. Through October 31, the company repurchased an additional $0.5 billion of company shares.
On October 30, MPC announced that its Board of Directors approved an increase to the quarterly dividend to $0.91 per share. The dividend is payable December 10, 2024, to shareholders of record on November 20, 2024.
Additionally, the Board of Directors approved an incremental $5 billion share repurchase authorization. With the addition of this new authorization, the company has $8.5 billion available under its share repurchase authorizations. The company 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 suspended or discontinued at any time.
Strategic and Operations Update
MPC's 2024 capital spending plan includes high-return investments at its Los Angeles and Galveston Bay refineries. In addition to these multi-year investments, the company is executing shorter-term projects that offer high returns targeted at enhancing refinery yields, improving energy efficiency, and lowering costs.
MPLX is advancing growth projects anchored in the Permian and Marcellus basins. MPLX's integrated footprints in these basins have positioned the partnership with a steady source of growth opportunities.
In the Permian, MPLX gas processing capacity is expected to reach 1.4 billion cubic feet per day (bcf/d) in the second half of 2025. In the Northeast, with the addition of the new facility announced today, MPLX's gas processing capacity is expected to reach 8.1 bcf/d and total fractionation capacity to 800 thousand bpd in the second half of 2026. In the Utica basin, utilization of existing capacity is increasing, with gas processing volumes continuing to grow.
In the third quarter, MPLX closed the acquisition of its additional interest in the BANGL pipeline, bringing its ownership to 45%. This natural gas liquids pipeline is being expanded to increase capacity to 250 thousand bpd, with expected completion in the first quarter of 2025. MPLX and its partners are progressing the Blackcomb and Rio Bravo natural gas pipelines, connecting the Permian to domestic and export markets along the Gulf Coast. Both pipelines are anticipated in service in the second half of 2026.
Fourth-Quarter 2024 Outlook
Refining & Marketing Segment:
Refining operating costs per barrel(a)
$
5.50
Distribution costs (in millions)
$
1,525
Refining planned turnaround costs (in millions)
$
285
Depreciation and amortization (in millions)
$
475
Refinery throughputs (mbpd):
Crude oil refined
2,650
Other charge and blendstocks
230
Total
2,880
Corporate (includes $20 million of D&A)
$
200
(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 www.marathonpetroleum.com. 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 www.marathonpetroleum.com.
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) 421-2071Kristina Kazarian, Vice President Finance and Investor RelationsBrian Worthington, Director, Investor RelationsAlyx Teschel, Manager, Investor Relations
Media Contact: (419) 421-3577Jamal 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 and intensity reduction targets, freshwater withdrawal intensity reduction targets, diversity, equity 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 or are required to be disclosed in our filings with the Securities Exchange Commission (SEC). 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," "endeavor", "estimate," "expect," "forecast," "goal," "guidance," "intend," "may," "objective," "opportunity," "outlook," "plan," "policy," "position," "potential," "predict," "priority," "progress", "project," "prospective," "pursue," "seek," "should," "strategy," "strive", "target," "trends", "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: political or regulatory developments, including changes in governmental policies relating to refined petroleum products, crude oil, natural gas, natural gas liquids ("NGLs"), or renewables, or taxation; volatility in and degradation of general economic, market, industry or business conditions, including as a result of pandemics, other infectious disease outbreaks, natural hazards, extreme weather events, regional conflicts such as hostilities in the Middle East and in Ukraine, inflation or rising interest rates; the regional, national and worldwide demand for refined products and renewables 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 adequacy of capital resources and liquidity and timing and amounts of free cash flow necessary to execute our business plans, effect future share repurchases and to maintain or grow our dividend; the success or timing of completion of ongoing or anticipated projects; 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; the inability or failure of our joint venture partners to fund their share of operations and development activities; the financing and distribution decisions of joint ventures we do not control; our ability to successfully implement our sustainable energy strategy and principles and to achieve our ESG plans and goals within the expected timeframes if at all; changes in government incentives for emission-reduction products and technologies; the outcome of research and development efforts to create future technologies necessary to achieve our ESG plans and goals; our ability to scale projects and technologies on a commercially competitive basis; changes in regional and global economic growth rates and consumer preferences, including consumer support for emission-reduction products and technology; industrial incidents 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 imposition of windfall profit taxes, maximum refining margin penalties or minimum inventory requirements on companies operating within the energy industry in California or other jurisdictions; 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" and "Disclosures Regarding Forward-Looking Statements" in MPC's and MPLX's Annual Reports on Form 10-K for the year ended Dec. 31, 2023, 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
September 30,
Nine Months Ended
September 30,
(In millions, except per-share data)
2024
2023
2024
2023
Revenues and other income:
Sales and other operating revenues
$
35,107
$
40,917
$
105,727
$
112,124
Income from equity method investments
219
215
796
547
Net gain (loss) on disposal of assets
(2)
110
17
126
Other income
49
341
406
687
Total revenues and other income
35,373
41,583
106,946
113,484
Costs and expenses:
Cost of revenues (excludes items below)
32,144
34,928
95,682
95,984
Depreciation and amortization
846
845
2,511
2,479
Selling, general and administrative expenses
815
824
2,417
2,219
Other taxes
219
233
681
683
Total costs and expenses
34,024
36,830
101,291
101,365
Income from operations
1,349
4,753
5,655
12,119
Net interest and other financial costs
221
118
594
414
Income before income taxes
1,128
4,635
5,061
11,705
Provision for income taxes
113
1,004
779
2,410
Net income
1,015
3,631
4,282
9,295
Less net income attributable to:
Redeemable noncontrolling interest
6
25
21
71
Noncontrolling interests
387
326
1,187
994
Net income attributable to MPC
$
622
$
3,280
$
3,074
$
8,230
Per share data
Basic:
Net income attributable to MPC per share
$
1.88
$
8.31
$
8.85
$
19.66
Weighted average shares outstanding (in millions)
331
394
347
418
Diluted:
Net income attributable to MPC per share
$
1.87
$
8.28
$
8.83
$
19.57
Weighted average shares outstanding (in millions)
332
396
348
420
Income Summary (unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In millions)
2024
2023
2024
2023
Refining & Marketing
$
298
$
3,757
$
2,383
$
9,076
Midstream
1,275
1,136
3,796
3,550
Corporate
(224)
(246)
(675)
(613)
Income from operations before items not allocated tosegments
1,349
4,647
5,504
12,013
Items not allocated to segments:
Gain on sale of assets
