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Marathon Petroleum Corporation : Marathon Petroleum Corporation Reports First-Quarter 2013 Results



   Marathon Petroleum Corporation : Marathon Petroleum Corporation Reports
                          First-Quarter 2013 Results

  * Achieved strong financial results 

  * Operated Detroit refinery at design capacity  

  * Completed acquisition of the Galveston Bay refinery and related assets on
    Feb. 1 

  * Returned $547 million of capital to shareholders 

  * Agreed to sell additional equity interest to MPLX for $100 million 

FINDLAY, Ohio, April 30, 2013 - Marathon Petroleum Corporation (NYSE: MPC)
today reported first-quarter earnings of $725 million, or $2.17 per diluted
share, compared with $596 million, or $1.70 per diluted share, in the first
quarter of 2012.

                                                    Three Months Ended
                                                         March 31
(In millions, except per diluted share data)       2013             2012
Earnings^(a)                                 $            725 $            596
Earnings per diluted share                   $           2.17 $           1.70
Weighted average shares - diluted                         333              350
Revenues and other income                      $       23,345   $       20,275

(a)    References to earnings refer to net income attributable to MPC. See
"Reference to Earnings" note below.

"Our performance this quarter reflects in large part the strategic expansion
and optimization of our refining system along with favorable market
conditions," said MPC President and Chief Executive Officer Gary R. Heminger.
The first quarter of 2013 marks the first full quarter since completion of
MPC's Detroit Heavy Oil Upgrade Project (DHOUP). In addition, MPC finalized
the acquisition of the Galveston Bay refinery and related assets on Feb. 1.

Heminger highlighted the performance of the Detroit refinery, saying, "Since
bringing the new units online and quickly reaching the design capacity, the
DHOUP expansion has provided our system with greater flexibility to refine
larger volumes of price-advantaged crudes, including Canadian heavy."

"Our Galveston Bay refinery is well positioned on the Texas Gulf Coast to
process growing supplies of North American crude oil," Heminger added. "With
its array of complex processing units, we continue to be enthusiastic about
our prospects to enhance margins and further leverage dynamic market trends
through this strategic acquisition."

Heminger also noted that Speedway had a strong quarter, primarily due to
higher fuel margins and additional revenue from stores acquired last year.

MPC continues to balance investments in the business with returning capital to
shareholders.  During the first quarter, the company returned $547 million to
shareholders through share repurchases and the payment of $116 million of
dividends. At the end of the first quarter, a total of $2.2 billion remained
under an existing share repurchase authorization.

As MPLX LP (MPLX) announced today, it will acquire an additional 5 percent
interest in MPLX Pipe Line Holdings LP from a subsidiary of MPC for $100
million on May 1. This will bring MPLX's interest to 56 percent from the 51
percent interest it held since its initial public offering (IPO) in October
2012. Heminger noted this is the first drop-down following the IPO and said
this transaction, and the increase in MPLX's quarterly distribution announced
earlier today, demonstrate MPC's commitment to support the growth of MPLX.

Segment Results

Total income from operations was $1.16 billion in the first quarter of 2013,
compared with $956 million in the first quarter of 2012.

                                       Three Months Ended
                                            March 31
(In millions)                          2013           2012
Income from Operations by Segment
Refining & Marketing               $       1,105 $          943
Speedway                                      67             50
Pipeline Transportation                       51             42
Items not allocated to segments             (67)           (79)
Income from operations             $       1,156 $          956

Refining & Marketing

Refining & Marketing segment income from operations was $1.11 billion in the
first quarter of 2013, compared with $943 million in the first quarter of
2012. The increase was primarily due to higher refined product production and
sales volumes, attributable in large part to the acquisition of the Galveston
Bay refinery on Feb. 1, 2013. Refining & Marketing's refined product sales
volumes were 1.88 million barrels per day (bpd) in the first quarter of 2013,
compared with 1.53 million bpd in the first quarter of 2012. The favorable
production and sales volumes impact was partially offset by a slight decrease
in the Refining & Marketing gross margin, which was $7.92 per barrel in the
first quarter of 2013, compared with $8.36 per barrel in the first quarter of
2012. MPC's benchmark Light Louisiana Sweet (LLS) crack spread was higher in
the first quarter of 2013 compared to the first quarter of 2012. However, MPC
experienced higher operating and turnaround costs in the first quarter of 2013
compared to the first quarter of 2012. In addition, MPC's average crude oil
acquisition discount narrowed compared to LLS in the first quarter of 2013.

                                                    Three Months Ended
                                                         March 31
(mbpd = thousand barrels per day)                    2013         2012
Key Refining & Marketing Statistics
Refinery throughputs (mbpd)
Crude oil refined                                       1,433        1,146
Other charge and blendstocks                              238          174
Total                                                   1,671        1,320
Refined product sales volume (mbpd)^(a)                 1,880        1,532
Refining & Marketing gross margin ($/barrel)^(b) $       7.92 $       8.36

(a)    Includes intersegment sales
(b)    Sales revenue less cost of refinery inputs, purchased products and
manufacturing expenses, including depreciation and amortization, divided by
Refining & Marketing segment refined product sales volume.

Speedway

Speedway segment income from operations was $67 million in the first quarter
of 2013, compared with $50 million in the first quarter of 2012. The $17
million increase was primarily the result of a higher gasoline and distillates
gross margin and a higher merchandise gross margin, partially offset by higher
expenses associated with the increase in the number of stores operated.
Speedway gasoline and distillates gross margin per gallon averaged 13.01 cents
in the first quarter of 2013, compared with 10.96 cents in the first quarter
of 2012.

                                                   Three Months Ended
                                                        March 31
                                                 2013              2012
Key Speedway Statistics
Convenience stores at period end                       1,463             1,370
Gasoline and distillates sales (million                  745               706
gallons)
Gasoline and distillates gross margin        $        0.1301   $        0.1096
($/gallon)^(a)
Merchandise sales (in millions)            $             711 $             695
Merchandise gross margin (in millions)     $             184 $             179
Same store gasoline sales volume (period
over period)                                            0.7%            (1.1%)
Same store merchandise sales excluding
cigarettes (period over period)                         0.8%             10.4%

(a)    The price paid by consumers less the cost of refined products,
including transportation, consumer excise taxes and bankcard processing fees,
divided by gasoline and distillates sales volume.

Pipeline Transportation

Pipeline Transportation segment income from operations, including 100 percent
of MPLX's operations, was $51 million in the first quarter of 2013, compared
with $42 million in the first quarter of 2012. The increase in segment income
was primarily due to an increase in transportation revenue and pipeline
affiliate income, partially offset by an increase in mechanical integrity and
depreciation expenses.

                                        Three Months Ended
                                             March 31
                                          2013       2012
Key Pipeline Transportation Statistics
Pipeline throughput (mbpd)^(a)
Crude oil pipelines                         1,272      1,121
Refined product pipelines                     917        917
Total                                       2,189      2,038

(a)    On owned common-carrier pipelines, excluding equity method investments.

Corporate Items

Corporate and other unallocated expenses of $67 million in the first quarter
of 2013 were $12 million lower than in the first quarter of 2012. The decrease
was primarily due to a decrease in pension expenses resulting from a pension
plan amendment adopted in the second quarter of 2012.

Strong Financial Position and Liquidity

On March 31, 2013, the company had $4.7 billion in cash and cash equivalents,
an unused $2.5 billion revolving credit agreement and a $1 billion unused
trade receivables securitization facility. The company's credit facilities and
cash position should provide it with sufficient flexibility to meet its
day-to-day operational needs and continue its balanced approach to investing
in the business and returning capital to shareholders. As of March 31, 2013,
the company's strong financial position was further reflected by its
debt-to-total-capital ratio of 22 percent.  

Conference Call

At 10 a.m. EDT today, MPC will hold a webcast and conference call to discuss
the earnings release and provide an update on company operations. Interested
parties may listen to the conference call on MPC's website at
http://www.marathonpetroleum.com by clicking on the "2013 First-Quarter
Financial Results" link. Replays of the conference call will be available on
the company's website through Wednesday, May 15. Financial information,
including the earnings release and other investor-related material, will also
be available online prior to the webcast and conference call at
http://ir.marathonpetroleum.com in the Quarterly Investor Packet and Earnings
Capsule.

                                     ###

About Marathon Petroleum Corporation

MPC is the nation's fourth-largest refiner, with a crude oil refining capacity
of approximately 1.7 million barrels per calendar day in its seven-refinery
system. Marathon brand gasoline is sold through approximately 5,000
independently owned retail outlets across 17 states. In addition, Speedway
LLC, an MPC subsidiary, owns and operates the nation's fourth-largest
convenience store chain, with approximately 1,460 convenience stores in seven
states. MPC also owns, leases or has ownership interests in approximately
8,300 miles of pipeline. Through subsidiaries, MPC owns the general partner of
MPLX LP, a midstream master limited partnership. MPC's fully integrated system
provides operational flexibility to move crude oil, feedstocks and
petroleum-related products efficiently through the company's distribution
network in the Midwest, Southeast and Gulf Coast regions. For additional
information about the company, please visit our website at
http://www.marathonpetroleum.com.

Investor Relations Contacts:
Pamela Beall (419) 429-5640
Beth Hunter (419) 421-2559

Media Contacts:
Angelia Graves (419) 421-2703
Jamal Kheiry (419) 421-3312

References to Earnings
References to earnings mean net income attributable to Marathon Petroleum
Corporation (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 within the meaning of
federal securities laws. These forward-looking statements relate to, among
other things, MPC's expectations, estimates and projections concerning MPC
business and operations. You can identify forward-looking statements by words
such as "anticipate," "believe," "estimate," "expect," "forecast," "project,"
"could," "may," "should," "would," "will" or other similar expressions that
convey the uncertainty of future events or outcomes. Such forward-looking
statements are not guarantees of future performance and are subject to risks,
uncertainties and other factors, some of which are beyond MPC's control and
are difficult to predict. Factors that could cause actual results to differ
materially from those in the forward-looking statements include: volatility in
and/or degradation of market and industry conditions; the availability and
pricing of crude oil and other feedstocks; slower growth in domestic and
Canadian crude supply; completion of pipeline capacity to areas outside the
U.S. Midwest; consumer demand for refined products; transportation logistics;
the reliability of processing units and other equipment; our ability to
successfully implement growth opportunities; impacts from our repurchases of
shares of MPC common stock under our share repurchase authorization, including
the timing and amounts of any common stock repurchases; our ability to
successfully complete or realize the strategic benefits of the sale of an
additional 5 percent interest in MPLX Pipe Line Holdings LP to MPLX LP; state
and federal environmental, economic, health and safety, energy and other
policies and regulations; other risk factors inherent to our industry; and the
factors set forth under the heading "Risk Factors" in MPC's Annual Report on
Form 10-K for the year ended December 31, 2012 filed with the Securities and
Exchange Commission (SEC). In addition, the forward-looking statements
included herein could be affected by general domestic and international
economic and political conditions. Unpredictable or unknown factors not
discussed here or in MPC's Form 10-K could also have material adverse effects
on forward-looking statements. Copies of MPC's Form 10-K are available on the
SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting
MPC's Investor Relations Office.

Consolidated Statements of Income
(Unaudited)                                       Three Months Ended
                                                       March 31
(In millions, except per-share data)           2013                2012
Revenues and other income:
Sales and other operating revenues
(including consumer excise taxes)           $        23,328    $        20,264
Sales to related parties                                  2                  1
Income from equity method investments                     -                  2
Net gain on disposal of assets                            1                  2
                                                                              
Other income                                             14                  6
Total revenues and other income                      23,345             20,275
Costs and expenses:
Cost of revenues (excludes items below)              20,034             17,321
Purchases from related parties                           72                 63
Consumer excise taxes                                 1,458              1,380
Depreciation and amortization                           287                230
Selling, general and administrative
expenses                                                249                251
Other taxes                                              89                 74
Total costs and expenses                             22,189             19,319
Income from operations                                1,156                956
Net interest and other financial income
(costs)                                                (48)               (22)
Income before income taxes                            1,108                934
Provision for income taxes                              378                338
Net income                                              730                596
Less: Net income attributable to                                              
noncontrolling interests                                  5                  -
Net income attributable to MPC            $             725  $             596
Per-share data
Basic:
Net income attributable to MPC per
share                                     $            2.19  $            1.71
Weighted average shares^(a)                             331                348
Diluted:
Net income attributable to MPC per
share                                     $            2.17  $            1.70
Weighted average shares^(a)                             333                350
Dividends paid                            $            0.35  $            0.25

(a)    The number of weighted average shares for the period ended March 31,
2013, reflects the impact of our share repurchases.

Supplemental Statistics (Unaudited)
                                                       Three Months Ended
                                                            March 31
(Dollars in millions)                                 2013           2012
Income from Operations by Segment
Refining & Marketing                                $     1,105    $       943
Speedway                                                     67             50
Pipeline Transportation                                      51             42
Items not allocated to segments                            (67)           (79)
Income from operations                                    1,156            956
Net interest and other financial income (costs)            (48)           (22)
Income before income taxes                                1,108            934
Provision for income taxes                                  378            338
Net income                                                  730            596
Less: Net income attributable to noncontrolling
interests                                                     5              -
Net income attributable to MPC                      $       725    $       596
Capital Expenditures and Investments^(a)
Refining & Marketing                                 $    1,420    $       153
Speedway                                                     36             11
Pipeline Transportation                                      90             38
Corporate and Other^(b)                                      28             38
Total                                                $    1,574    $       240

(a)    Includes $1.38 billion for the acquisition of the Galveston Bay
refinery and related assets, comprised of total consideration, excluding
inventory, of $1.17 billion plus assumed liabilities of $206 million. The
total consideration amount of $1.17 billion includes the base purchase price
and a fair-value estimate of $600 million for the contingent earnout.
(b)    Includes capitalized interest.

Supplemental Statistics (Unaudited) (continued)
                                                        Three Months Ended
                                                             March 31
                                                        2013         2012
MPC Consolidated Refined Product Sales Volumes
(thousands of barrels per day (mbpd))^(a)(b)               1,895         1,558
Refining & Marketing (R&M) Operating Statistics^(b)
Refinery throughputs (mbpd):
Crude oil refined                                          1,433         1,146
Other charge and blendstocks                                 238           174
Total                                                      1,671         1,320
Crude oil capacity utilization (percent)^(c)                  93            96
Refined product yields (mbpd):
Gasoline                                                     889           717
Distillates                                                  523           397
Propane                                                       32            25
Feedstocks and special products                              184           130
Heavy fuel oil                                                30            15
Asphalt                                                       46            54
Total                                                      1,704         1,338
R&M refined product sales volumes (mbpd)^(d)               1,880         1,532
R&M gross margin ($/barrel)^(e)                      $      7.92 $        8.36
Direct operating costs in R&M gross margin
($/barrel)^(f):
Planned turnaround and major maintenance             $      1.15   $      1.05
Depreciation and amortization                               1.42          1.38
Other manufacturing^(g)                                     3.81          3.16
Total                                                $      6.38   $      5.59
Speedway Operating Statistics
Convenience stores at period end                           1,463         1,370
Gasoline and distillates sales (million gallons)             745           706
Gasoline and distillates gross margin
($/gallon)^(h)                                         $  0.1301     $  0.1096
Merchandise sales (in millions)                      $       711   $       695
Merchandise gross margin (in millions)               $       184   $       179
Same store gasoline sales volume (period over
period)                                                     0.7%        (1.1%)
Same store merchandise sales excluding cigarettes
(period over period)                                        0.8%         10.4%
Pipeline Transportation Operating Statistics
Pipeline throughput (mbpd)^(i):
Crude oil pipelines                                        1,272         1,121
Refined product pipelines                                    917           917
Total                                                      2,189         2,038

(a)    Total average daily volumes of refined product sales to wholesale,
branded and retail (Speedway segment) customers.
(b)    Includes the impact of the Galveston Bay refinery and related assets
beginning on the Feb.1, 2013 acquisition date.
(c)    Based on calendar day capacity, which is an annual average that
includes down time for planned maintenance and other normal operating
activities.
(d)    Includes intersegment sales.
(e)    Sales revenue less cost of refinery inputs, purchased products and
manufacturing expenses, including depreciation and amortization, divided by
R&M segment refined product sales volume.
(f)    Per barrel of total refinery throughputs.
(g)    Includes utilities, labor, routine maintenance and other operating
costs.
(h)    The price paid by consumers less the cost of refined products,
including transportation, consumer excise taxes and bankcard processing fees,
divided by gasoline and distillates sales volume.
(i)    On owned common-carrier pipelines, excluding equity method investments.

Segment Earnings Before Interest, Taxes, Depreciation & Amortization (Segment
EBITDA) (Unaudited)
                                                     Three Months Ended
                                                          March 31
(Dollars in millions)                              2013             2012
Segment EBITDA^(a)
Refining & Marketing                               $    1,341       $    1,128
Speedway                                                   94               77
Pipeline Transportation                                    69               54
Total Segment EBITDA^(a)                                1,504            1,259
Total segment depreciation & amortization                 281              224
Items not allocated to segments                          (67)             (79)
Income from operations                                  1,156              956
Net interest and other financial income
(costs)                                                  (48)             (22)
Income before income taxes                              1,108              934
Income tax provision                                      378              338
Net income                                                730              596
Less: Net income attributable to
noncontrolling interests                                    5                -
Net income attributable to MPC                    $       725      $       596

(a)  Segment EBITDA represents segment earnings before interest and financing
costs, interest income, income taxes and depreciation and amortization
expense. Segment EBITDA is used by some investors and analysts to analyze and
compare companies on the basis of operating performance. Segment EBITDA should
not be considered as an alternative to net income attributable to MPC, income
before income taxes, cash flows from operating activities or any other measure
of financial performance presented in accordance with accounting principles
generally accepted in the United States. Segment EBITDA may not be comparable
to similarly titled measures used by other entities.

Select Financial Data (Unaudited)
                                               March 31     Dec. 31
(Dollars in millions)                            2013        2012
 ^ 
Cash and cash equivalents                     $     4,737 $     4,860
Total debt^(a)                                      3,416       3,361
Equity                                             12,412      12,105
Debt-to-total-capital ratio (percent)                  22          22
Cash provided from operations (quarter ended) $     2,079 $     2,043

(a)    Includes long-term debt due within one year.
 
 
 
 
MPC 2013 1Q Results

------------------------------------------------------------------------------

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The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other
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(ii) they are solely responsible for the content, accuracy and originality of
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information contained therein.

Source: Marathon Petroleum Corporation via Thomson Reuters ONE
HUG#1697627
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