Marathon Petroleum Corp. Reports Fourth-Quarter and Full-Year 2022 Results
Fourth-quarter net income attributable to MPC of $3.3 billion
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 URL. 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 URL.
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 URL.
Investor Relations Contacts: (419) 421-2071Kristina Kazarian, Vice President, Finance and Investor RelationsBrian Worthington, DirectorKenan Kinsey, Supervisor
Media Contact: (419) 421-3312Jamal 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