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1、Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-Q(Mark One)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 30,2023ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES
2、 EXCHANGE ACT OF 1934For the transition period from to Commission file number 001-35054Marathon Petroleum Corporation(Exact name of registrant as specified in its charter)Delaware 27-1284632(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)539 South Mai
3、n Street,Findlay,Ohio 45840-3229(Address of principal executive offices)(Zip code)(419)422-2121(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the ActTitle of each classTrading Symbol(s)Name of each exchange on which registeredCommon Stock,par valu
4、e$.01MPCNew York Stock ExchangeIndicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 duringthe preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2
5、)has been subject to such filing requirements forthe past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S-T(232.405 of this chapter)during the preceding 12 months(or for
6、 such shorter period that the registrant was required to submit such files.)Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reporting company,or anemerging growth company.See the definitions of“large accelerated
7、 filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”inRule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company Emerging growth company If an emerging growth company,indicate by check mark if the registran
8、t has elected not to use the extended transition period for complying with any new orrevised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act)Yes No There
9、 were 399,844,048 shares of Marathon Petroleum Corporation common stock outstanding as of July 26,2023.Table of ContentsTable of Contents PagePART I-FINANCIAL INFORMATIONItem 1.Financial Statements:Consolidated Statements of Income(Unaudited)3Consolidated Statements of Comprehensive Income(Unaudited
10、)4Consolidated Balance Sheets(Unaudited)5Consolidated Statements of Cash Flows(Unaudited)6Consolidated Statements of Equity and Redeemable Noncontrolling Interest(Unaudited)8Notes to the Consolidated Financial Statements(Unaudited)9Item 2.Managements Discussion and Analysis of Financial Condition an
11、d Results of Operations26Item 3.Quantitative and Qualitative Disclosures about Market Risk46Item 4.Controls and Procedures47PART II-OTHER INFORMATIONItem 1.Legal Proceedings48Item 1A.Risk Factors48Item 2.Unregistered Sales of Equity Securities and Use of Proceeds48Item 5.Other Information48Item 6.Ex
12、hibits49Signatures50Unless otherwise stated or the context otherwise indicates,all references in this Form 10-Q to“MPC,”“us,”“our,”“we”or“the Company”mean MarathonPetroleum Corporation and its consolidated subsidiaries.1Table of ContentsGlossary of TermsThroughout this report,the following company o
13、r industry specific terms and abbreviations are used:ANSAlaska North Slope crude oil,an oil index benchmark priceASCAccounting Standards CodificationASUAccounting Standards UpdatebarrelOne stock tank barrel,or 42 U.S.gallons liquid volume,used in reference to crude oil or other liquid hydrocarbonsCA
14、RBCalifornia Air Resources BoardCARBOBCalifornia Reformulated Gasoline Blendstock for Oxygenate BlendingCBOBConventional Blending for Oxygenate BlendingEBITDAEarnings Before Interest,Tax,Depreciation and Amortization(a non-GAAP financial measure)EPAU.S.Environmental Protection AgencyFASBFinancial Ac
15、counting Standards BoardGAAPAccounting principles generally accepted in the United StatesLIFOLast in,first out,an inventory costing methodmbpdThousand barrels per dayMEHMagellan East Houston crude oil,an oil index benchmark priceMMBtuOne million British thermal unitsNGLNatural gas liquids,such as et
16、hane,propane,butanes and natural gasolineNYMEXNew York Mercantile ExchangeRFS2Revised Renewable Fuel Standard program,as required by the Energy Independence and Security Act of 2007RINRenewable Identification NumberSECU.S.Securities and Exchange CommissionULSDUltra-low sulfur dieselUSGCU.S.Gulf Coas
17、tVIEVariable interest entityWTIWest Texas Intermediate crude oil,an oil index benchmark price2Table of ContentsPART I FINANCIAL INFORMATIONItem 1.Financial StatementsMarathon Petroleum CorporationConsolidated Statements of Income(Unaudited)Three Months Ended June 30,Six Months Ended June 30,(In mill
18、ions,except per share data)2023202220232022Revenues and other income:Sales and other operating revenues$36,343$53,795$71,207$91,853 Income from equity method investments199 147 332 289 Net gain on disposal of assets13 39 16 21 Other income269 257 346 459 Total revenues and other income36,824 54,238
19、71,901 92,622 Costs and expenses:Cost of revenues(excludes items below)31,762 44,207 61,056 79,275 Depreciation and amortization834 819 1,634 1,624 Selling,general and administrative expenses704 694 1,395 1,297 Other taxes219 190 450 382 Total costs and expenses33,519 45,910 64,535 82,578 Income fro
20、m operations3,305 8,328 7,366 10,044 Net interest and other financial costs142 312 296 574 Income before income taxes3,163 8,016 7,070 9,470 Provision for income taxes583 1,799 1,406 2,081 Net income2,580 6,217 5,664 7,389 Less net income attributable to:Redeemable noncontrolling interest23 21 46 42
21、 Noncontrolling interests331 323 668 629 Net income attributable to MPC$2,226$5,873$4,950$6,718 Per share data(See Note 7)Basic:Net income attributable to MPC per share$5.34$11.03$11.49$12.24 Weighted average shares outstanding417 532 430 549 Diluted:Net income attributable to MPC per share$5.32$10.
22、95$11.44$12.15 Weighted average shares outstanding419 536 432 553 The accompanying notes are an integral part of these consolidated financial statements.3Table of ContentsMarathon Petroleum CorporationConsolidated Statements of Comprehensive Income(Unaudited)Three Months Ended June 30,Six Months End
23、ed June 30,(Millions of dollars)2023202220232022Net income$2,580$6,217$5,664$7,389 Defined benefit plans:Actuarial changes,net of tax of$(2),$7,$(1)and$11,respectively(6)21(4)33 Prior service,net of tax of$(4),$(4),$(8)and$(8),respectively(12)(12)(25)(25)Other,net of tax of$(1),$,$(1)and$(2),respect
24、ively(3)(3)(6)Other comprehensive income(loss)(21)9(32)2 Comprehensive income2,559 6,226 5,632 7,391 Less comprehensive income attributable to:Redeemable noncontrolling interest23 21 46 42 Noncontrolling interests331 323 668 629 Comprehensive income attributable to MPC$2,205$5,882$4,918$6,720 The ac
25、companying notes are an integral part of these consolidated financial statements.4Table of ContentsMarathon Petroleum CorporationConsolidated Balance Sheets(Unaudited)(Millions of dollars,except share data)June 30,2023December 31,2022AssetsCash and cash equivalents$7,345$8,625 Short-term investments
26、4,109 3,145 Receivables,less allowance for doubtful accounts of$54 and$29,respectively10,274 13,477 Inventories9,536 8,827 Other current assets949 1,168 Total current assets32,213 35,242 Equity method investments6,665 6,466 Property,plant and equipment,net35,059 35,657 Goodwill8,244 8,244 Right of u
27、se assets1,288 1,214 Other noncurrent assets2,973 3,081 Total assets$86,442$89,904 LiabilitiesAccounts payable$13,052$15,312 Payroll and benefits payable712 967 Accrued taxes1,160 1,140 Debt due within one year72 1,066 Operating lease liabilities423 368 Other current liabilities2,047 1,167 Total cur
28、rent liabilities17,466 20,020 Long-term debt27,211 25,634 Deferred income taxes5,913 5,904 Defined benefit postretirement plan obligations1,181 1,114 Long-term operating lease liabilities859 841 Deferred credits and other liabilities1,244 1,304 Total liabilities53,874 54,817 Commitments and continge
29、ncies(see Note 23)Redeemable noncontrolling interest968 968 EquityPreferred stock,no shares issued and outstanding(par value$0.00 per share,30 million shares authorized)Common stock:Issued 992 million and 990 million shares(par value$0.01 per share,2 billion shares authorized)10 10 Held in treasury,
30、at cost 587 million and 536 million shares(38,119)(31,841)Additional paid-in capital33,411 33,402 Retained earnings30,442 26,142 Accumulated other comprehensive income(loss)(30)2 Total MPC stockholders equity25,714 27,715 Noncontrolling interests5,886 6,404 Total equity31,600 34,119 Total liabilitie
31、s,redeemable noncontrolling interest and equity$86,442$89,904 The accompanying notes are an integral part of these consolidated financial statements.5Table of ContentsMarathon Petroleum CorporationConsolidated Statements of Cash Flows(Unaudited)Six Months Ended June 30,(Millions of dollars)20232022O
32、perating activities:Net income$5,664$7,389 Adjustments to reconcile net income to net cash provided by operating activities:Amortization of deferred financing costs and debt discount(27)33 Depreciation and amortization1,634 1,624 Pension and other postretirement benefits,net25 117 Deferred income ta
33、xes22(92)Net gain on disposal of assets(16)(21)Income from equity method investments(332)(289)Distributions from equity method investments429 336 Changes in income tax receivable46 11 Changes in the fair value of derivative instruments88(169)Changes in:Current receivables3,238(6,282)Inventories(708)
34、(2,979)Current accounts payable and accrued liabilities(1,861)10,106 Right of use assets and operating lease liabilities,net(1)2 All other,net(160)(277)Cash provided by operating activities-continuing operations8,041 9,509 Cash used in operating activities-discontinued operations(44)Net cash provide
35、d by operating activities8,041 9,465 Investing activities:Additions to property,plant and equipment(938)(993)Acquisitions,net of cash acquired(74)Disposal of assets24 72 Investments acquisitions and contributions(296)(160)redemptions,repayments and return of capital Purchases of short-term investmen
36、ts(4,723)(2,581)Sales of short-term investments1,583 1,075 Maturities of short-term investments2,231 2,811 All other,net423 470 Net cash provided by(used in)investing activities(1,696)620 Financing activities:Long-term debt borrowings1,589 2,385 repayments(1,043)(1,237)Debt issuance costs(15)(16)Iss
37、uance of common stock27 167 Common stock repurchased(6,248)(6,177)Dividends paid(653)(643)Distributions to noncontrolling interests(635)(599)Repurchases of noncontrolling interests(135)Redemption of noncontrolling interests-preferred units(600)6Table of Contents Six Months Ended June 30,(Millions of
38、 dollars)20232022All other,net(49)(41)Net cash used in financing activities(7,627)(6,296)Net change in cash,cash equivalents and restricted cash(1,282)3,789 Cash,cash equivalents and restricted cash at beginning of period8,631 5,294 Cash,cash equivalents and restricted cash at end of period$7,349$9,
39、083 Restricted cash is included in other current assets on our consolidated balance sheets.The accompanying notes are an integral part of these consolidated financial statements.(a)(a)(a)7Table of ContentsMarathon Petroleum CorporationConsolidated Statements of Equity and Redeemable Noncontrolling I
40、nterest(Unaudited)MPC Stockholders Equity Common StockTreasury StockAdditional Paid-in CapitalRetainedEarningsAccumulated OtherComprehensiveIncome(Loss)Non-controllingInterestsTotal EquityRedeemableNon-controllingInterest(Shares in millions;amounts in millions of dollars)SharesAmountSharesAmountBala
41、nce as of December 31,2022990$10(536)$(31,841)$33,402$26,142$2$6,404$34,119$968 Net income 2,724 337 3,061 23 Dividends declared on common stock($0.75 per share)(336)(336)Distributions to noncontrolling interests (306)(306)(23)Other comprehensive loss (11)(11)Shares repurchased (25)(3,238)(3,238)Sha
42、re-based compensation1 3 3 Equity transactions of MPLX 3(2)(598)(597)Balance as of March 31,2023991$10(561)$(35,079)$33,408$28,528$(9)$5,837$32,695$968 Net income 2,226 331 2,557 23 Dividends declared on common stock($0.75 per share)(312)(312)Distributions to noncontrolling interests (283)(283)(23)O
43、ther comprehensive loss (21)(21)Shares repurchased (26)(3,040)(3,040)Share-based compensation1 3 1 4 Equity transactions of MPLX Balance as of June 30,2023992$10(587)$(38,119)$33,411$30,442$(30)$5,886$31,600$968 MPC Stockholders Equity Common StockTreasury StockAdditional Paid-in CapitalRetainedEarn
44、ingsAccumulated OtherComprehensiveIncome(Loss)Non-controllingInterestsTotal EquityRedeemableNon-controllingInterest(Shares in millions;amounts in millions of dollars)SharesAmountSharesAmountBalance as of December 31,2021984$10(405)$(19,904)$33,262$12,905$(67)$6,410$32,616$965 Net income 845 306 1,15
45、1 21 Dividends declared on common stock($0.58 per share)(330)(330)Distributions to noncontrolling interests (290)(290)(21)Other comprehensive loss (7)(7)Shares repurchased (37)(2,807)(2,807)Share-based compensation3 90 (1)89 Equity transactions of MPLX (25)(63)(88)Balance as of March 31,2022987$10(4
46、42)$(22,711)$33,327$13,420$(74)$6,362$30,334$965 Net income 5,873 323 6,196 21 Dividends declared on common stock($0.58 per share)(310)(310)Distributions to noncontrolling interests (267)(267)(21)Other comprehensive income 9 9 Shares repurchased (34)(3,285)(3,285)Share-based compensation2 (4)71 2 69
47、 Equity transactions of MPLX (20)(22)(42)Balance as of June 30,2022989$10(476)$(26,000)$33,378$18,983$(65)$6,398$32,704$965 The accompanying notes are an integral part of these consolidated financial statements.8Table of ContentsNotes to Consolidated Financial Statements(Unaudited)1.Description of t
48、he Business and Basis of PresentationDescription of the BusinessWe are a leading,integrated,downstream energy company headquartered in Findlay,Ohio.We operate the nations largest refining system.We sell refinedproducts to wholesale marketing customers domestically and internationally,to buyers on th
49、e spot market and to independent entrepreneurs who operatebranded outlets.We also sell transportation fuel to consumers through direct dealer locations under long-term supply contracts.MPCs midstream operations areprimarily conducted through MPLX LP(“MPLX”),which owns and operates crude oil and ligh
50、t product transportation and logistics infrastructure as well asgathering,processing and fractionation assets.We own the general partner and a majority limited partner interest in MPLX.See Note 4.Basis of PresentationAll significant intercompany transactions and accounts have been eliminated.These i
51、nterim consolidated financial statements are unaudited;however,in the opinion of our management,these statements reflect all adjustments necessaryfor a fair statement of the results for the periods reported.All such adjustments are of a normal,recurring nature unless otherwise disclosed.These interi
52、mconsolidated financial statements,including the notes,have been prepared in accordance with the rules of the SEC applicable to interim period financialstatements and do not include all of the information and disclosures required by GAAP for complete financial statements.Certain information and disc
53、losuresderived from our audited annual financial statements,prepared in accordance with GAAP,have been condensed or omitted from these interim financialstatements.These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and note
54、s thereto included inour Annual Report on Form 10-K for the year ended December 31,2022.The results of operations for the three and six months ended June 30,2023 are notnecessarily indicative of the results to be expected for the full year.2.Accounting StandardsNot Yet AdoptedASU 2023-01,Leases(Topi
55、c 842):Common Control ArrangementsIn March 2023,the FASB issued an ASU to amend certain provisions of ASC 842 that apply to arrangements between related parties under common control.The ASU amends the accounting for the amortization period of leasehold improvements in common-control leases for all e
56、ntities and requires certain disclosureswhen the lease term is shorter than the useful life of the asset.This ASU is effective for fiscal years beginning after December 15,2023,including interim periodswithin those fiscal years.Early adoption is permitted.We do not expect the application of this ASU
57、 to have a material impact on our consolidated financialstatements or financial disclosures.3.Short-Term InvestmentsInvestments ComponentsThe components of investments were as follows:June 30,2023(Millions of dollars)Fair ValueLevelAmortized CostUnrealized GainsUnrealizedLossesFair ValueCash and Cas
58、hEquivalentsShort-termInvestmentsAvailable-for-sale debt securitiesCommercial paperLevel 2$2,088$(1)$2,087$447$1,640 Certificates of deposit and time depositsLevel 23,340 (1)3,339 2,562 777 U.S.government securitiesLevel 11,965 (4)1,961 309 1,652 Corporate notes and bondsLevel 240 40 40 Total availa
59、ble-for-sale debt securities$7,433$(6)$7,427$3,318$4,109 Cash4,027 4,027 Total$11,454$7,345$4,109 9Table of ContentsDecember 31,2022(Millions of dollars)Fair ValueLevelAmortized CostUnrealized GainsUnrealizedLossesFair ValueCash and CashEquivalentsShort-termInvestmentsAvailable-for-sale debt securit
60、iesCommercial paperLevel 2$3,074$(1)$3,073$1,106$1,967 Certificates of deposit and time depositsLevel 22,093 2,093 1,500 593 U.S.government securitiesLevel 11,071 1,071 498 573 Corporate notes and bondsLevel 266 66 54 12 Total available-for-sale debt securities$6,304$(1)$6,303$3,158$3,145 Cash5,467
61、5,467 Total$11,770$8,625$3,145 Our investment policy includes concentration limits and credit rating requirements which limits our investments to high quality,short term and highly liquidsecurities.Realized gains/losses were not material.All of our available-for-sale debt securities held as of June
62、30,2023 mature within one year or less or are readilyavailable for use.4.Master Limited PartnershipWe own the general partner and a majority limited partner interest in MPLX,which owns and operates crude oil and light product transportation and logisticsinfrastructure as well as gathering,processing
63、 and fractionation assets.We control MPLX through our ownership of the general partner interest and,as ofJune 30,2023,we owned approximately 65 percent of the outstanding MPLX common units.Unit Repurchase ProgramIn November 2020,MPLX announced the board authorization of a unit repurchase program for
64、 the repurchase of up to$1.0 billion of MPLXs outstandingcommon units held by the public,which was utilized in 2022.On August 2,2022,MPLX announced its board of directors approved a$1.0 billion unit repurchaseauthorization.The unit repurchase authorizations have no expiration date.MPLX may utilize v
65、arious methods to effect the repurchases,which could includeopen market repurchases,negotiated block transactions,accelerated unit repurchases,tender offers or open market solicitations for units,some of which maybe effected through Rule 10b5-1 plans.The timing and amount of future repurchases,if an
66、y,will depend upon several factors,including market and businessconditions,and such repurchases may be discontinued at any time.Total unit repurchases were as follows for the respective periods:Three Months Ended June 30,Six Months Ended June 30,(In millions,except per share data)2023202220232022Num
67、ber of common units repurchased 1 4 Cash paid for common units repurchased$35$135 Average cost per unit$33.74$32.48 As of June 30,2023,MPLX had approximately$846 million remaining under its unit repurchase authorization.Redemption of the Series B Preferred UnitsOn February 15,2023,MPLX exercised its
68、 right to redeem all of its 600,000 outstanding preferred units(the“Series B preferred units”).MPLX paid unitholdersthe Series B preferred unit redemption price of$1,000 per unit.The final semi-annual distribution on the Series B preferred units was paid on February 15,2023in the usual manner.The ex
69、cess of the total redemption price of$600 million paid to Series B preferred unitholders over the carrying value of the Series B preferred units on theredemption date resulted in a$2 million net reduction to retained earnings.The Series B preferred units were included in noncontrolling interest on o
70、urconsolidated balance sheet at December 31,2022.10Table of ContentsAgreementsWe have various long-term,fee-based commercial agreements with MPLX.Under these agreements,MPLX provides transportation,storage,distribution andmarketing services to us.With certain exceptions,these agreements generally co
71、ntain minimum volume commitments.These transactions are eliminated inconsolidation but are reflected as intersegment transactions between our Refining&Marketing and Midstream segments.We also have agreements with MPLXthat establish fees for operational and management services provided between us and
72、 MPLX and for executive management services and certain general andadministrative services provided by us to MPLX.These transactions are eliminated in consolidation but are reflected as intersegment transactions betweencorporate and our Midstream segment.Noncontrolling InterestAs a result of equity
73、transactions of MPLX,we are required to adjust non-controlling interest and additional paid-in capital.Changes in MPCs additional paid-incapital resulting from changes in its ownership interests in MPLX were as follows:Three Months Ended June 30,Six Months Ended June 30,(Millions of dollars)20232022
74、20232022Increase(decrease)due to change in ownership$(13)$1$(50)Tax impact(7)2 5 Increase(decrease)in MPCs additional paid-in capital,net of tax$(20)$3$(45)5.Variable Interest EntitiesConsolidated VIEWe control MPLX through our ownership of its general partner.MPLX is a VIE because the limited partn
75、ers do not have substantive kick-out or participatingrights over the general partner.We are the primary beneficiary of MPLX because in addition to our significant economic interest,we also have the ability,throughour ownership of the general partner,to control the decisions that most significantly i
76、mpact MPLX.We therefore consolidate MPLX and record a noncontrollinginterest for the interest owned by the public.We also record a redeemable noncontrolling interest related to MPLXs Series A preferred units.The creditors of MPLX do not have recourse to MPCs general credit through guarantees or othe
77、r financial arrangements,except as noted.MPC has effectivelyguaranteed certain indebtedness of LOOP LLC(“LOOP”)and LOCAP LLC(“LOCAP”),in which MPLX holds an interest.See Note 23 for more information.Theassets of MPLX can only be used to settle its own obligations and its creditors have no recourse t
78、o our assets,except as noted earlier.11Table of ContentsThe following table presents balance sheet information for the assets and liabilities of MPLX,which are included in our consolidated balance sheets.(Millions of dollars)June 30,2023December 31,2022AssetsCash and cash equivalents$755$238 Receiva
79、bles,less allowance for doubtful accounts728 747 Inventories146 148 Other current assets52 56 Equity method investments4,124 4,095 Property,plant and equipment,net18,692 18,848 Goodwill7,645 7,645 Right of use assets281 283 Other noncurrent assets1,611 1,664 LiabilitiesAccounts payable$588$664 Payro
80、ll and benefits payable 4 Accrued taxes82 67 Debt due within one year1 988 Operating lease liabilities49 46 Other current liabilities331 338 Long-term debt20,405 18,808 Deferred income taxes13 13 Long-term operating lease liabilities228 230 Deferred credits and other liabilities385 366 6.Related Par
81、ty TransactionsTransactions with related parties were as follows:Three Months Ended June 30,Six Months Ended June 30,(Millions of dollars)2023202220232022Sales to related parties$263$21$452$40 Purchases from related parties480 297 791 579 Sales to related parties,which are included in sales and othe
82、r operating revenues,consist primarily of refined product sales and renewable feedstock sales tocertain of our equity affiliates.Purchases from related parties are included in cost of revenues.We obtain utilities,transportation services and purchase ethanol and renewable fuels fromcertain of our equ
83、ity affiliates.12Table of Contents7.Earnings Per ShareWe compute basic earnings per share by dividing net income attributable to MPC less income allocated to participating securities by the weighted averagenumber of shares of common stock outstanding.Since MPC grants certain incentive compensation a
84、wards to employees and non-employee directors that areconsidered to be participating securities,we have calculated our earnings per share using the two-class method.Diluted income per share assumes exercise ofcertain share-based compensation awards,provided the effect is not anti-dilutive.Three Mont
85、hs Ended June 30,Six Months Ended June 30,(In millions,except per share data)2023202220232022Net income$2,580$6,217$5,664$7,389 Net income attributable to noncontrolling interest(354)(344)(714)(671)Net income allocated to participating securities(1)(3)(3)(3)Redemption of preferred units (2)Income av
86、ailable to common stockholders$2,225$5,870$4,945$6,715 Weighted average common shares outstanding:Basic417 532 430 549 Effect of dilutive securities2 4 2 4 Diluted419 536 432 553 Income available to common stockholders per share:Basic:Net income attributable to MPC per share$5.34$11.03$11.49$12.24 D
87、iluted:Net income attributable to MPC per share$5.32$10.95$11.44$12.15 The following table summarizes the shares that were anti-dilutive and,therefore,were excluded from the diluted share calculation.Three Months Ended June 30,Six Months Ended June 30,(In millions)2023202220232022Shares issuable und
88、er share-based compensation plans 8.EquityIn May 2021,MPC announced the authorization of a share repurchase program of up to$7.1 billion.Subsequently,in February 2022,MPC announced a$5.0 billion share repurchase authorization.Both these authorizations were utilized in 2022.In August 2022,MPC announc
89、ed a$5.0 billion share repurchase authorization and announced additional$5.0 billion share repurchase authorizations in bothJanuary 2023 and in May 2023.As of June 30,2023,$7.12 billion remained available for repurchase under these authorizations.These authorizations have noexpiration date.We may ut
90、ilize various methods to effect the repurchases,which could include open market repurchases,negotiated block transactions,tender offers,accelerated share repurchases or open market solicitations for shares,some of which may be effected through Rule 10b5-1 plans.The timing and amount offuture repurch
91、ases,if any,will depend upon several factors,including market and business conditions,and such repurchases may be suspended or discontinuedat any time.13Table of ContentsTotal share repurchases were as follows for the respective periods:Three Months Ended June 30,Six Months Ended June 30,(In million
92、s,except per share data)2023202220232022Number of shares repurchased26 34 51 71 Cash paid for shares repurchased$3,068$3,331$6,248$6,177 Average cost per share$117.62$95.46$122.07$85.31 The average cost per share for the 2023 period includes a 1%excise tax on share repurchases resulting from the Inf
93、lation Reduction Act of 2022.The number of shares repurchased shown above and the amount remaining available under the share repurchase authorizations reflect the repurchase of540,000 common shares for$63 million that were transacted in the second quarter of 2023 and settled in the third quarter of
94、2023.9.Segment InformationWe have two reportable segments:Refining&Marketing and Midstream.Each of these segments is organized and managed based upon the nature of theproducts and services it offers.Refining&Marketing refines crude oil and other feedstocks,including renewable feedstocks,at our refin
95、eries in the Gulf Coast,Mid-Continent andWest Coast regions of the United States,purchases refined products and ethanol for resale and distributes refined products,including renewablediesel,through transportation,storage,distribution and marketing services provided largely by our Midstream segment.W
96、e sell refined products towholesale marketing customers domestically and internationally,to buyers on the spot market,to independent entrepreneurs who operate primarilyMarathon branded outlets and through long-term fuel supply contracts with direct dealers who operate locations mainly under the ARCO
97、 brand.Midstream gathers,transports,stores and distributes crude oil,refined products,including renewable diesel,and other hydrocarbon-based productsprincipally for the Refining&Marketing segment via refining logistics assets,pipelines,terminals,towboats and barges;gathers,processes andtransports na
98、tural gas;and transports,fractionates,stores and markets NGLs.The Midstream segment primarily reflects the results of MPLX.Our chief operating decision maker(“CODM”)evaluates the performance of our segments using segment adjusted EBITDA.Our CODM is the chief executiveofficer.Amounts included in inco
99、me before income taxes and excluded from segment adjusted EBITDA include:(i)depreciation and amortization;(ii)net interestand other financial costs;(iii)turnaround expenses and(iv)other adjustments as deemed necessary.These items are either:(i)believed to be non-recurring innature;(ii)not believed t
100、o be allocable or controlled by the segment;or(iii)not tied to the operational performance of the segment.Assets by segment are not ameasure used to assess the performance of the company by the CODM and thus are not reported in our disclosures.(a)(a)14Table of ContentsThree Months Ended June 30,Six
101、Months Ended June 30,(Millions of dollars)2023202220232022Segment adjusted EBITDA for reportable segmentsRefining&Marketing$3,163$7,760$7,016$9,134 Midstream1,532 1,456 3,062 2,859 Total reportable segments$4,695$9,216$10,078$11,993 Reconciliation of segment adjusted EBITDA for reportable segments t
102、o incomebefore income taxesTotal reportable segments$4,695$9,216$10,078$11,993 Corporate(164)(156)(329)(294)Refining planned turnaround costs(392)(151)(749)(296)Renewable volume obligation requirements 238 238 Litigation 27 Depreciation and amortization(834)(819)(1,634)(1,624)Net interest and other
103、financial costs(142)(312)(296)(574)Income before income taxes$3,163$8,016$7,070$9,470 Three Months Ended June 30,Six Months Ended June 30,(Millions of dollars)2023202220232022Sales and other operating revenuesRefining&MarketingRevenues from external customers$35,167$52,300$68,830$89,092 Intersegment
104、 revenues21 47 48 83 Refining&Marketing segment revenues35,188 52,347 68,878 89,175 MidstreamRevenues from external customers1,176 1,495 2,377 2,761 Intersegment revenues1,347 1,308 2,709 2,555 Midstream segment revenues2,523 2,803 5,086 5,316 Total segment revenues37,711 55,150 73,964 94,491 Less:i
105、ntersegment revenues1,368 1,355 2,757 2,638 Consolidated sales and other operating revenues$36,343$53,795$71,207$91,853 Includes related party sales.See Note 6 for additional information.(a)(a)(a)(a)15Table of ContentsThree Months Ended June 30,Six Months Ended June 30,(Millions of dollars)202320222
106、0232022Income(loss)from equity method investmentsRefining&Marketing$17$6$(19)$18 Midstream182 141 351 271 Corporate Consolidated income from equity method investments$199$147$332$289 Depreciation and amortizationRefining&Marketing$484$475$948$936 Midstream331 330 648 661 Corporate19 14 38 27 Consoli
107、dated depreciation and amortization$834$819$1,634$1,624 Capital expendituresRefining&Marketing$243$315$664$559 Midstream273 222 514 505 Segment capital expenditures and investments516 537 1,178 1,064 Less investments in equity method investees89 48 296 160 Plus:Corporate33 15 40 38 Capitalized inter
108、est13 25 34 48 Consolidated capital expenditures$473$529$956$990 Includes changes in capital expenditure accruals.See Note 19 for a reconciliation of total capital expenditures to additions to property,plant and equipment for the six monthsended June 30,2023 and 2022 as reported in the consolidated
109、statements of cash flows.10.Net Interest and Other Financial CostsNet interest and other financial costs were as follows:Three Months Ended June 30,Six Months Ended June 30,(Millions of dollars)2023202220232022Interest income$(119)$(18)$(240)$(23)Interest expense329 324 663 634 Interest capitalized(
110、13)(25)(36)(48)Pension and other postretirement non-service costs(25)32(48)11 Loss on extinguishment of debt 9 Investments-net premium(discount)amortization(31)(5)(59)(6)Other financial costs1 4 7 6 Net interest and other financial costs$142$312$296$574 See Note 22.11.Income TaxesWe recorded a combi
111、ned federal,state and foreign income tax provision of$583 million and$1.41 billion for the three and six months ended June 30,2023,respectively,which was lower than the U.S.statutory rate primarily due to net income attributable to noncontrolling interests,a benefit related to foreign derivedintangi
112、ble income,offset by state taxes.We recorded a combined federal,state and foreign income tax provision of$1.80 billion and$2.08 billion for the three and six months ended June 30,2022,respectively,which was higher than the U.S.statutory rate primarily due to state taxes offset by net income attribut
113、able to noncontrolling interests.(a)(a)(a)(a)16Table of Contents12.Inventories(Millions of dollars)June 30,2023December 31,2022Crude oil$3,279$3,047 Refined products5,254 4,748 Materials and supplies1,003 1,032 Total$9,536$8,827 Inventories are carried at the lower of cost or market value.Costs of c
114、rude oil and refined products are aggregated on a consolidated basis for purposes ofassessing whether the LIFO cost basis of these inventories may have to be written down to market values.13.Equity Method InvestmentsLF Bioenergy AcquisitionOn March 8,2023,MPC announced the acquisition of a 49.9 perc
115、ent interest in LF Bioenergy,an emerging producer of renewable natural gas(“RNG”)in theU.S.,for approximately$56 million,which included funding for on-going operations and project development.LF Bioenergy has been focused on developing andgrowing a portfolio of dairy farm-based,low carbon intensity
116、RNG projects.LF Bioenergy is a VIE since it is unable to fund its operations without financial support from its equity owners.We are not the primary beneficiary of this VIEbecause we do not have the ability to control the activities that significantly influence the economic outcomes of the entity an
117、d,therefore,do not consolidate theentity.MPC accounts for our ownership interest in LF Bioenergy as an equity method investment.Watson Cogeneration CompanyOn June 1,2022,MPC purchased the remaining 49 percent interest in Watson Cogeneration Company from NRG Energy,Inc.for approximately$59 million.Th
118、is entity is now consolidated and included in our consolidated results.It was previously accounted for as an equity method investment.The excess of the$62 million fair value over the$25 million book value of our 51 percent ownership interest in Watson Cogeneration Company resulted in a$37 million ga
119、in,which is included in the net gain on disposal of assets line of the accompanying consolidated statements of income.14.Property,Plant and Equipment(PP&E)June 30,2023December 31,2022(Millions of dollars)GrossPP&EAccumulatedDepreciationNetPP&EGrossPP&EAccumulatedDepreciationNetPP&ERefining&Marketing
120、$32,712$17,576$15,136$32,292$16,745$15,547 Midstream28,043 8,689 19,354 27,659 8,118 19,541 Corporate1,589 1,020 569 1,550 981 569 Total$62,344$27,285$35,059$61,501$25,844$35,657 17Table of Contents15.Fair Value MeasurementsFair ValuesRecurringThe following tables present assets and liabilities acco
121、unted for at fair value on a recurring basis as of June 30,2023 and December 31,2022 by fair valuehierarchy level.We have elected to offset the fair value amounts recognized for multiple derivative contracts executed with the same counterparty,including anyrelated cash collateral as shown below;howe
122、ver,fair value amounts by hierarchy level are presented on a gross basis in the following tables.June 30,2023Fair Value Hierarchy(Millions of dollars)Level 1Level 2Level 3Netting andCollateralNet Carrying Value onBalance SheetCollateralPledged NotOffsetAssets:Commodity contracts$338$10$(330)$18$53 L
123、iabilities:Commodity contracts$361$(361)$Embedded derivatives in commodity contracts 53 53 December 31,2022Fair Value Hierarchy(Millions of dollars)Level 1Level 2Level 3Netting andCollateralNet Carrying Value onBalance SheetCollateralPledged NotOffsetAssets:Commodity contracts$310$(243)$67$100 Liabi
124、lities:Commodity contracts$301$(301)$Embedded derivatives in commodity contracts 61 61 Represents the impact of netting assets,liabilities and cash collateral when a legal right of offset exists.As of June 30,2023,cash collateral of$31 million was netted withmark-to-market derivative liabilities.As
125、of December 31,2022,cash collateral of$58 million was netted with mark-to-market derivative liabilities.We have no derivative contracts which are subject to master netting arrangements reflected gross on the balance sheet.Level 2 instruments include over-the-counter fixed swaps to mitigate the price
126、 risk from MPLXs sales of propane.The swap valuations are based on observableinputs in the form of forward prices based on Mont Belvieu propane forward spot prices and contain no significant unobservable inputs.Level 3 instruments relate to an embedded derivative liability for a natural gas purchase
127、 commitment embedded in a keepwhole processing agreement.The fairvalue calculation for these Level 3 instruments at June 30,2023 used significant unobservable inputs including:(1)NGL prices interpolated and extrapolated dueto inactive markets ranging from$0.54 to$1.34 per gallon with a weighted aver
128、age of$0.72 per gallon and(2)the probability of renewal of 100 percent for thefive-year term of the natural gas purchase commitment and related keep-whole processing agreement.Increases or decreases in the fractionation spread resultin an increase or decrease in the fair value of the embedded deriva
129、tive liability.The following is a reconciliation of the beginning and ending balances recorded for net liabilities classified as Level 3 in the fair value hierarchy.Three Months Ended June 30,Six Months Ended June 30,(Millions of dollars)2023202220232022Beginning balance$58$99$61$108 Unrealized and
130、realized gain included in net income(3)(4)(3)(8)Settlements of derivative instruments(2)(3)(5)(8)Ending balance$53$92$53$92 The amount of total gain for the period included in earnings attributable to the changein unrealized losses relating to liabilities still held at the end of period:$(3)$(3)$(3)
131、$(8)(a)(b)(a)(b)(a)(b)18Table of ContentsFair Values ReportedWe believe the carrying value of our other financial instruments,including cash and cash equivalents,receivables,accounts payable and certain accruedliabilities,approximate fair value.Our fair value assessment incorporates a variety of con
132、siderations,including the short-term duration of the instruments and theexpected insignificance of bad debt expense,which includes an evaluation of counterparty credit risk.The borrowings under our revolving credit facilities,whichinclude variable interest rates,approximate fair value.The fair value
133、 of our long-term debt is based on prices from recent trade activity and is categorized in level3 of the fair value hierarchy.The carrying and fair values of our debt were approximately$26.9 billion and$24.5 billion at June 30,2023,respectively,andapproximately$26.3 billion and$24.0 billion at Decem
134、ber 31,2022,respectively.These carrying and fair values of our debt exclude the unamortized issuancecosts which are netted against our total debt.16.DerivativesFor further information regarding the fair value measurement of derivative instruments,including any effect of master netting agreements or
135、collateral,see Note15.We do not designate any of our commodity derivative instruments as hedges for accounting purposes.Derivatives that are not designated as accounting hedges may include commodity derivatives used to hedge price risk on(1)inventories,(2)fixed price sales ofrefined products,(3)the
136、acquisition of foreign-sourced crude oil,(4)the acquisition of ethanol for blending with refined products,(5)the sale of NGLs,(6)thepurchase of natural gas,(7)the purchase of soybean oil and(8)the sale of propane.The following table presents the fair value of derivative instruments as of June 30,202
137、3 and December 31,2022 and the line items in the consolidated balancesheets in which the fair values are reflected.The fair value amounts below are presented on a gross basis and do not reflect the netting of asset and liabilitypositions permitted under the terms of our master netting arrangements i
138、ncluding cash collateral on deposit with,or received from,brokers.We offset therecognized fair value amounts for multiple derivative instruments executed with the same counterparty in our financial statements when a legal right of offsetexists.As a result,the asset and liability amounts below will n
139、ot agree with the amounts presented in our consolidated balance sheets.(Millions of dollars)June 30,2023December 31,2022Balance Sheet LocationAssetLiabilityAssetLiabilityCommodity derivativesOther current assets$348$361$310$301 Other current liabilities 7 10 Deferred credits and other liabilities 46
140、 51 Includes embedded derivatives.The table below summarizes open commodity derivative contracts for crude oil,refined products,blending products,soybean oil and propane as of June 30,2023.Percentage of contractsthat expire next quarterPosition(Units in thousands of barrels)LongShortExchange-tradedC
141、rude oil53.1%74,081 79,120 Refined products86.9%15,695 14,661 Blending products49.6%1,958 4,433 Soybean oil76.6%4,610 5,150 Over-the-counterPropane50.5%809 Included in exchange-traded are spread contracts in thousands of barrels:Crude oil-20,150 long and 20,500 short;Refined products-2,449 long and
142、995 short.There are nospread contracts for blending products or soybean oil.(a)(a)(a)(a)(a)19Table of ContentsThe following table summarizes the effect of all commodity derivative instruments in our consolidated statements of income:Gain(Loss)(Millions of dollars)Three Months Ended June 30,Six Month
143、s Ended June 30,Income Statement Location2023202220232022Sales and other operating revenues$8$10$Cost of revenues50 17 111(325)Other income(1)1 1 Total$58$16$122$(324)17.DebtOur outstanding borrowings at June 30,2023 and December 31,2022 consisted of the following:(Millions of dollars)June 30,2023De
144、cember 31,2022Marathon Petroleum Corporation:Senior notes$6,449$6,449 Notes payable1 1 Finance lease obligations493 522 Total6,943 6,972 MPLX LP:Senior notes20,700 20,100 Finance lease obligations7 8 Total20,707 20,108 Total debt27,650 27,080 Unamortized debt issuance costs(150)(142)Unamortized disc
145、ount,net of unamortized premium(217)(238)Amounts due within one year(72)(1,066)Total long-term debt due after one year$27,211$25,634 MPLX Senior NotesOn February 9,2023,MPLX issued$1.6 billion aggregate principal amount of senior notes in a public offering,consisting of$1.1 billion aggregate princip
146、alamount of 5.00 percent senior notes due March 2033 and$500 million aggregate principal amount of 5.65 percent senior notes due March 2053.On February15,2023,MPLX used$600 million of the net proceeds to redeem all of its outstanding Series B preferred units.On March 13,2023,MPLX used the remainingp
147、roceeds to redeem all of MPLXs and MarkWests$1.0 billion aggregate principal amount of 4.50 percent senior notes due July 2023.The redemption resultedin a loss on extinguishment of debt of$9 million due to the immediate expense recognition of unamortized debt discount and issuance costs.20Table of C
148、ontentsAvailable Capacity under our Credit Facilities as of June 30,2023(Millions of dollars)TotalCapacityOutstandingBorrowingsOutstandingLettersof CreditAvailableCapacityWeightedAverageInterestRateExpirationMPC,excluding MPLXMPC bank revolving credit facility$5,000$1$4,999%July 2027MPC trade receiv
149、ables securitization facility100 100 September 2023MPLXMPLX bank revolving credit facility2,000 2,000%July 2027 The committed borrowing and letter of credit issuance capacity of the trade receivables securitization facility is$100 million.In addition,the facility allows for the issuance ofletters of
150、 credit in excess of the committed capacity at the discretion of the issuing banks.As of June 30,2023,letters of credit in the total amount of$386 million were issuedand outstanding under the facility to secure contracts awarded by the Department of Energy to purchase crude oil from the Strategic Pe
151、troleum Reserve.18.RevenueThe following table presents our revenues from external customers disaggregated by segment and product line.Three Months Ended June 30,Six Months Ended June 30,(Millions of dollars)2023202220232022Refining&MarketingRefined products$32,864$48,864$64,787$82,457 Crude oil1,875
152、 2,976 3,205 5,865 Services and other428 460 838 770 Total revenues from external customers35,167 52,300 68,830 89,092 MidstreamRefined products377 698 797 1,195 Services and other799 797 1,580 1,566 Total revenues from external customers1,176 1,495 2,377 2,761 Sales and other operating revenues$36,
153、343$53,795$71,207$91,853 We do not disclose information on the future performance obligations for any contract with expected duration of one year or less at inception.As of June 30,2023,we do not have future performance obligations that are material to future periods.ReceivablesOn the accompanying c
154、onsolidated balance sheets,receivables,less allowance for doubtful accounts primarily consists of customer receivables.Significant,non-customer balances included in our receivables at June 30,2023 include matching buy/sell receivables of$4.55 billion.(a)(a)21Table of Contents19.Supplemental Cash Flo
155、w InformationSix Months Ended June 30,(Millions of dollars)20232022Net cash provided by operating activities included:Interest paid(net of amounts capitalized)$584$519 Net income taxes paid to(received from)taxing authorities1,400 1,123 Non-cash investing and financing activities:Book value of equit
156、y method investment 25 Represents the book value of MPCs equity method investment in Watson Cogeneration Company at June 1,2022.See Note 13 for additional information.The consolidated statements of cash flows exclude changes to the consolidated balance sheets that did not affect cash.The following i
157、s a reconciliation ofadditions to property,plant and equipment to total capital expenditures:Six Months Ended June 30,(Millions of dollars)20232022Additions to property,plant and equipment per the consolidated statements of cash flows$938$993 Increase(decrease)in capital accruals18(3)Total capital e
158、xpenditures$956$990 20.Other Current LiabilitiesThe following summarizes the components of other current liabilities:(Millions of dollars)June 30,2023December 31,2022Environmental credits liability$1,135$429 Accrued interest payable325 315 Other current liabilities587 423 Total other current liabili
159、ties$2,047$1,167 21.Accumulated Other Comprehensive Income(Loss)The following table shows the changes in accumulated other comprehensive income(loss)by component.Amounts in parentheses indicate debits.(Millions of dollars)PensionBenefitsOther BenefitsOtherTotalBalance as of December 31,2021$(117)$49
160、$1$(67)Other comprehensive gain(loss)before reclassifications,net of tax of$(8)(19)3(6)(22)Amounts reclassified from accumulated other comprehensive loss:Amortization of prior service credit(23)(11)(34)Amortization of actuarial loss7 3 10 Settlement loss56 56 Tax effect(10)2 (8)Other comprehensive i
161、ncome(loss)11(3)(6)2 Balance as of June 30,2022$(106)$46$(5)$(65)(a)(a)(a)(a)(a)22Table of Contents(Millions of dollars)PensionBenefitsOther BenefitsOtherTotalBalance as of December 31,2022$(163)$165$2 Other comprehensive gain(loss)before reclassifications,net of tax of$0(4)3(3)(4)Amounts reclassifi
162、ed from accumulated other comprehensive loss:Amortization of prior service credit(22)(11)(33)Amortization of actuarial gain(3)(3)Settlement loss(2)(2)Tax effect7 3 10 Other comprehensive loss(24)(5)(3)(32)Balance as of June 30,2023$(187)$160$(3)$(30)These accumulated other comprehensive loss compone
163、nts are included in the computation of net periodic benefit cost.See Note 22.22.Pension and Other Postretirement BenefitsThe following summarizes the components of net periodic benefit costs:Three Months Ended June 30,Six Months Ended June 30,(Millions of dollars)2023202220232022Pension BenefitsServ
164、ice cost$48$65$97$133 Interest cost29 24 58 47 Expected return on plan assets(42)(37)(84)(78)Amortization of prior service credit(11)(12)(22)(23)Amortization of actuarial(gain)loss(1)3(3)7 Settlement loss(2)54(2)56 Net periodic pension benefit cost$21$97$44$142 Other BenefitsService cost$5$5$10$13 I
165、nterest cost8 5 16 10 Amortization of prior service credit(6)(6)(11)(11)Amortization of actuarial loss 1 3 Net periodic other benefit cost$7$5$15$15 The components of net periodic benefit cost other than the service cost component are included in net interest and other financial costs on the consoli
166、datedstatements of income.During the six months ended June 30,2023,we made no contributions to our funded pension plans.Benefit payments related to unfunded pension and otherpostretirement benefit plans were$7 million and$27 million,respectively,during the six months ended June 30,2023.23.Commitment
167、s and ContingenciesWe are the subject of,or a party to,a number of pending or threatened legal actions,contingencies and commitments involving a variety of matters,includinglaws and regulations relating to the environment.Some of these matters are discussed below.For matters for which we have not re
168、corded a liability,we areunable to estimate a range of possible loss because the issues involved have not been fully developed through pleadings,discovery or court proceedings.However,the ultimate resolution of some of these contingencies could,individually or in the aggregate,be material.Environmen
169、tal MattersWe are subject to federal,state,local and foreign laws and regulations relating to the environment.These laws generally provide for control of pollutantsreleased into the environment and require responsible parties to undertake remediation of hazardous(a)(a)(a)(a)23Table of Contentswaste
170、disposal sites and certain other locations including presently or formerly owned or operated retail marketing sites.Penalties may be imposed fornoncompliance.At June 30,2023 and December 31,2022,accrued liabilities for remediation totaled$374 million and$387 million,respectively.It is not presently
171、possible toestimate the ultimate amount of all remediation costs that might be incurred or the penalties,if any,that may be imposed.Receivables for recoverable costs fromcertain states,under programs to assist companies in clean-up efforts related to underground storage tanks at presently or formerl
172、y owned or operated retailmarketing sites,were$5 million at both June 30,2023 and December 31,2022.Governmental and other entities in various states have filed climate-related lawsuits against numerous energy companies,including MPC.The lawsuits allegedamages as a result of climate change and the pl
173、aintiffs are seeking unspecified damages and abatement under various tort theories.We are currently subjectto such proceedings in federal or state courts in California,Delaware,Maryland,Hawaii,Rhode Island,South Carolina and Oregon.Similar lawsuits may be filedin other jurisdictions.At this early st
174、age,the ultimate outcome of these matters remains uncertain,and neither the likelihood of an unfavorable outcome nor theultimate liability,if any,can be determined.We are involved in a number of environmental enforcement matters arising in the ordinary course of business.While the outcome and impact
175、 on us cannot bepredicted with certainty,management believes the resolution of these environmental matters will not,individually or collectively,have a material adverse effecton our consolidated results of operations,financial position or cash flows.Other Legal ProceedingsIn July 2020,Tesoro High Pl
176、ains Pipeline Company,LLC(“THPP”),a subsidiary of MPLX,received a Notification of Trespass Determination from the Bureau ofIndian Affairs(“BIA”)relating to a portion of the Tesoro High Plains Pipeline that crosses the Fort Berthold Reservation in North Dakota.The notificationdemanded the immediate c
177、essation of pipeline operations and assessed trespass damages of approximately$187 million.After subsequent appeal proceedingsand in compliance with a new order issued by the BIA,in December 2020,THPP paid approximately$4 million in assessed trespass damages and ceased useof the portion of the pipel
178、ine that crosses the property at issue.In March 2021,the BIA issued an order purporting to vacate the BIAs prior orders related toTHPPs alleged trespass and direct the Regional Director of the BIA to reconsider the issue of THPPs alleged trespass and issue a new order.In April 2021,THPP filed a laws
179、uit in the District of North Dakota against the United States of America,the U.S.Department of the Interior and the BIA(together,the“U.S.Government Parties”)challenging the March 2021 order purporting to vacate all previous orders related to THPPs alleged trespass.On February 8,2022,theU.S.Governmen
180、t Parties filed their answer and counterclaims to THPPs suit claiming THPP is in continued trespass with respect to the pipeline and seekdisgorgement of pipeline profits from June 1,2013 to present,removal of the pipeline and remediation.We intend to vigorously defend ourselves against thesecounterc
181、laims.We are also a party to a number of other lawsuits and other proceedings arising in the ordinary course of business.While the ultimate outcome and impact to uscannot be predicted with certainty,we believe that the resolution of these other lawsuits and proceedings will not,individually or colle
182、ctively,have a materialadverse effect on our consolidated financial position,results of operations or cash flows.GuaranteesWe have provided certain guarantees,direct and indirect,of the indebtedness of other companies.Under the terms of most of these guarantee arrangements,we would be required to pe
183、rform should the guaranteed party fail to fulfill its obligations under the specified arrangements.In addition to these financialguarantees,we also have various performance guarantees related to specific agreements.Guarantees related to indebtedness of equity method investeesLOOP and LOCAPMPC and MP
184、LX hold interests in an offshore oil port,LOOP,and MPLX holds an interest in a crude oil pipeline system,LOCAP.Both LOOP and LOCAP havesecured various project financings with throughput and deficiency agreements.Under the agreements,MPC,as a shipper,is required to advance funds if theinvestees are u
185、nable to service their debt.Any such advances are considered prepayments of future transportation charges.The duration of the agreementsvaries but tend to follow the terms of the underlying debt,which extend through 2037.Our maximum potential undiscounted payments under these agreementsfor the debt
186、principal totaled$171 million as of June 30,2023.Dakota Access PipelineMPLX holds a 9.19 percent indirect interest in a joint venture(“Dakota Access”)that owns and operates the Dakota Access Pipeline and Energy Transfer CrudeOil Pipeline projects,collectively referred to as the Bakken Pipeline syste
187、m or DAPL.In 2020,the U.S.District Court for the District of Columbia(the“D.D.C.”)ordered the U.S.Army Corps of Engineers(“Army Corps”),which granted permits and an easement for the Bakken Pipeline system,to prepare an environmentalimpact statement(“EIS”)relating to an easement under Lake Oahe in No
188、rth Dakota.The D.D.C.later vacated the easement.The Army Corps expects to releasea draft EIS in 2023.24Table of ContentsIn May 2021,the D.D.C.denied a renewed request for an injunction to shut down the pipeline while the EIS is being prepared.In June 2021,the D.D.C.issuedan order dismissing without
189、prejudice the tribes claims against the Dakota Access Pipeline.The litigation could be reopened or new litigation challenging theEIS,once completed,could be filed.The pipeline remains operational.MPLX has entered into a Contingent Equity Contribution Agreement whereby it,along with the other joint v
190、enture owners in the Bakken Pipeline system,hasagreed to make equity contributions to the joint venture upon certain events occurring to allow the entities that own and operate the Bakken Pipeline system tosatisfy their senior note payment obligations.The senior notes were issued to repay amounts ow
191、ed by the pipeline companies to fund the cost of construction ofthe Bakken Pipeline system.If the pipeline were temporarily shut down,MPLX would have to contribute its 9.19 percent pro rata share of funds required to payinterest accruing on the notes and any portion of the principal that matures whi
192、le the pipeline is shutdown.MPLX also expects to contribute its 9.19 percent prorata share of any costs to remediate any deficiencies to reinstate the permit and/or return the pipeline into operation.If the vacatur of the easement permitresults in a permanent shutdown of the pipeline,MPLX would have
193、 to contribute its 9.19 percent pro rata share of the cost to redeem the bonds(including the 1percent redemption premium required pursuant to the indenture governing the notes)and any accrued and unpaid interest.As of June 30,2023,our maximumpotential undiscounted payments under the Contingent Equit
194、y Contribution Agreement were approximately$170 million.Crowley Blue Water Partners LLCIn connection with our 50 percent indirect interest in Crowley Blue Water Partners LLC,we have agreed to provide a conditional guarantee of up to 50 percent ofits outstanding debt balance in the event there is no
195、charter agreement in place with an investment grade customer for the entitys three vessels as well as otherfinancial support in certain circumstances.As of June 30,2023,our maximum potential undiscounted payments under this arrangement were$97 million.Other guaranteesWe have entered into other guara
196、ntees with maximum potential undiscounted payments totaling$124 million as of June 30,2023,which primarily consist of acommitment to contribute cash to an equity method investee for certain catastrophic events in lieu of procuring insurance coverage,a commitment to fund ashare of the bonds issued by
197、 a government entity for construction of public utilities in the event that other industrial users of the facility default on their utilitypayments,a commitment to pay a termination fee on a supply agreement if terminated during the initial term,and leases of assets containing general leaseindemniti
198、es and guaranteed residual values.Contractual Commitments and ContingenciesCertain natural gas processing and gathering arrangements require us to construct natural gas processing plants,natural gas gathering pipelines and NGLpipelines and contain certain fees and charges if specified construction m
199、ilestones are not achieved for reasons other than force majeure.In certain cases,certain producer customers may have the right to cancel the processing arrangements with us if there are significant delays that are not due to force majeure.25Table of ContentsItem 2.Managements Discussion and Analysis
200、 of Financial Condition and Results of OperationsThis section should also be read in conjunction with the unaudited consolidated financial statements and accompanying footnotes included under Item 1.Financial Statements and in conjunction with our Annual Report on Form 10-K for the year ended Decemb
201、er 31,2022.DISCLOSURES REGARDING FORWARD-LOOKING STATEMENTSThis Quarterly Report on Form 10-Q,particularly Managements Discussion and Analysis of Financial Condition and Results of Operations and Quantitative andQualitative Disclosures about Market Risk,includes forward-looking statements that are s
202、ubject to risks,contingencies or uncertainties.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,”“
203、predict,”“priority,”“project,”“prospective,”“pursue,”“seek,”“should,”“strategy,”“target,”“will,”“would”or other similar expressions that convey the uncertainty of future events or outcomes.Forward-looking statements include,among other things,statements regarding:future financial and operating resul
204、ts;environmental,social and governance(“ESG”)plans and goals,including those related to greenhouse gas emissions,diversity and inclusion and ESGreporting;future levels of capital,environmental or maintenance expenditures,general and administrative and other expenses;the success or timing of completi
205、on of ongoing or anticipated capital or maintenance projects;business strategies,growth opportunities and expected investments;consumer demand for refined products,natural gas,renewables and NGLs;the timing,amount and form of any future capital return transactions at MPC or MPLX;andthe anticipated e
206、ffects of actions of third parties such as competitors,activist investors,federal,foreign,state or local regulatory authorities,or plaintiffsin litigation.Our forward-looking statements are not guarantees of future performance,and you should not rely unduly on them,as they involve risks,uncertaintie
207、s andassumptions that we cannot predict.Forward-looking and other statements regarding our ESG plans and goals are not an indication that these statements arematerial to investors or required to be disclosed in our filings with the SEC.In addition,historical,current,and forward-looking ESG-related s
208、tatements may bebased on standards for measuring progress that are still developing,internal controls and processes that continue to evolve,and assumptions that are subject tochange in the future.Material differences between actual results and any future performance suggested in our forward-looking
209、statements could result from avariety of factors,including the following:general economic,political or regulatory developments,including inflation,interest rates,changes in governmental policies relating to refined petroleumproducts,crude oil,natural gas,NGLs or renewables,or taxation;the regional,n
210、ational and worldwide availability and pricing of refined products,crude oil,natural gas,renewables,NGLs and other feedstocks;disruptions in credit markets or changes to credit ratings;the adequacy of capital resources and liquidity,including availability,timing and amounts of free cash flow necessa
211、ry to execute business plans and toeffect any share repurchases or to maintain or increase the dividend;the potential effects of judicial or other proceedings on the business,financial condition,results of operations and cash flows;the timing and extent of changes in commodity prices and demand for
212、crude oil,refined products,feedstocks or other hydrocarbon-based products,orrenewables;volatility in or degradation of general economic,market,industry or business conditions as a result of the COVID-19 pandemic,other infectious diseaseoutbreaks,natural hazards,extreme weather events,the military co
213、nflict between Russia and Ukraine,other conflicts,inflation,rising interest rates orotherwise;compliance with federal and state environmental,economic,health and safety,energy and other policies and regulations and enforcement actionsinitiated thereunder;adverse market conditions or other risks affe
214、cting MPLX;refining industry overcapacity or under capacity;foreign imports and exports of crude oil,refined products,natural gas and NGLs;changes in producer customers drilling plans or in volumes of throughput of crude oil,natural gas,NGLs,refined products,other hydrocarbon-basedproducts or renewa
215、bles;non-payment or non-performance by our customers;changes in the cost or availability of third-party vessels,pipelines,railcars and other means of transportation for crude oil,natural gas,NGLs,feedstocks,refined products and renewables;the price,availability and acceptance of alternative fuels an
216、d alternative-fuel vehicles and laws mandating such fuels or vehicles;26Table of Contentspolitical and economic conditions in nations that consume refined products,natural gas,renewables and NGLs,including the United States and Mexico,and in crude oil producing regions,including the Middle East,Russ
217、ia,Africa,Canada and South America;actions taken by our competitors,including pricing adjustments,the expansion and retirement of refining capacity and the expansion and retirement ofpipeline capacity,processing,fractionation and treating facilities in response to market conditions;completion of pip
218、eline projects within the United States;changes in fuel and utility costs for our facilities;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 custom
219、ers;acts of war,terrorism or civil unrest that could impair our ability to produce refined products,receive feedstocks or to gather,process,fractionate ortransport crude oil,natural gas,NGLs,refined products or renewables;political pressure and influence of environmental groups and other stakeholder
220、s upon policies and decisions related to the production,gathering,refining,processing,fractionation,transportation and marketing of crude oil or other feedstocks,refined products,natural gas,NGLs,otherhydrocarbon-based products or renewables;labor and material shortages;our ability to successfully a
221、chieve our ESG goals and targets within the expected timeframe,if at all;the costs,disruption and diversion of managements attention associated with campaigns commenced by activist investors;personnel changes;andthe imposition of windfall profit taxes or maximum refining margin penalties on companie
222、s operating in the energy industry in California or otherjurisdictions.For additional risk factors affecting our business,see the risk factors described in our Annual Report on Form 10-K for the year ended December 31,2022.Weundertake no obligation to update any forward-looking statements except to
223、the extent required by applicable law.EXECUTIVE SUMMARYBusiness UpdateOur results through the first six months of 2023 as compared to the first six months of 2022,were unfavorably impacted by market prices,however,the demandenvironment in which our business operates remains strong.Supply has remaine
224、d constrained for a variety of reasons,including,but not limited to,effects fromrefinery closures and disruptions in the crude oil and petroleum-based products markets resulting from the Russia-Ukraine conflict.We are unable to predict thepotential effects that the continuance or escalation of the m
225、ilitary conflict between Russia and Ukraine,and related sanctions or market disruptions,may have onour financial position and results.It remains uncertain how long these conditions may last or how severe they may become.In March 2023,the California legislature adopted Senate Bill No.2(such statute,t
226、ogether with any regulations contemplated or issued thereunder,SBx1-2),which authorizes the California Energy Commission(“CEC”)to establish a“maximum gross gasoline refining margin”with respect to certain of our refiningactivities in California,as well as establish fees for refiners for exceeding th
227、is margin.The law further expands on existing reporting requirements for refiners tothe CEC.It is uncertain whether,or when,the CEC will establish a maximum gross gasoline refining margin and impose associated fees.We will evaluate theimpact that SBx1-2 and any associated forthcoming CEC regulations
228、 may have on our current or anticipated future operations in California and results ofoperations when the regulations have been promulgated.Strategic UpdatesSouth Texas Gateway Terminal LLCOn June 15,2023,MPC agreed to sell its 25 percent interest in South Texas Gateway Terminal LLC(“South Texas Gat
229、eway”)to an affiliate of Gibson EnergyInc.(“Gibson Energy”).Pursuant to the purchase agreement,Gibson Energy agreed to pay$1.1 billion in cash,subject to closing adjustments,to acquire 100percent of the membership interests of South Texas Gateway from MPC and its other members.South Texas Gateway ow
230、ns an oil export facility in the U.S.GulfCoast.The terminal is operated by a third party.The carrying value of MPCs 25 percent interest at June 30,2023 was$167 million.The deal is expected toclose in the third quarter.LF Bioenergy AcquisitionOn March 8,2023,MPC announced the acquisition of a 49.9 pe
231、rcent equity interest in LF Bioenergy,an emerging producer of renewable natural gas(“RNG”)inthe U.S.,for approximately$56 million,which included funding for on-going operations and project development.LF Bioenergy has been focused on developingand growing a portfolio of dairy farm-based,low carbon i
232、ntensity RNG projects.Current projects are under various stages of development,with the first facilitynearing completion and27Table of Contentsexpected to be in service in the first half of 2023.LF Bioenergys management and origination teams continue to expand the portfolio with additional sanctione
233、dprojects while progressing their existing pipeline of opportunities toward final investment decisions.As specific project milestones are achieved,MPC is expectedto fund its share of capital expenditures to build out the portfolio.Martinez Renewable Fuels Project Joint VentureThe Martinez Renewable
234、Fuels facility reached full Phase I production capacity of 260 million gallons per year of renewable fuels during 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
235、year by the end of 2023.South Texas Asset Repositioning(“STAR”)ProjectWe completed the STAR project at our Galveston Bay refinery,which is expected to add 40 mbpd of incremental crude capacity and 17 mbpd of residprocessing capacity.Share Repurchase AuthorizationOn May 2,2023,we announced that our b
236、oard of directors approved an additional$5.0 billion share repurchase authorization in addition to the$5.0 billion sharerepurchase authorization announced on January 31,2023.Future repurchases under these authorizations will depend on the macro environment,cash availableafter opportunities for capit
237、al investment and growth of the business and market conditions.The authorizations have no expiration date.As of June 30,2023,MPC had$7.12 billion remaining under its share repurchase authorizations.See Note 8 to the unaudited consolidated financial statements for further discussion of our share repu
238、rchase authorizations.ResultsOur CODM evaluates the performance of our segments using segment adjusted EBITDA.Amounts included in income before income taxes and excluded fromsegment adjusted EBITDA include:(i)depreciation and amortization;(ii)net interest and other financial costs;(iii)turnaround ex
239、penses and(iv)otheradjustments as deemed necessary.These items are either:(i)believed to be non-recurring in nature;(ii)not believed to be allocable or controlled by thesegment;or(iii)are not tied to the operational performance of the segment.Select results are reflected in the following table.Three
240、 Months Ended June 30,Six Months Ended June 30,(Millions of dollars)2023202220232022Segment adjusted EBITDA for reportable segmentsRefining&Marketing$3,163$7,760$7,016$9,134 Midstream1,532 1,456 3,062 2,859 Total reportable segments$4,695$9,216$10,078$11,993 Reconciliation of segment adjusted EBITDA
241、 for reportable segments to incomebefore income taxesTotal reportable segments$4,695$9,216$10,078$11,993 Corporate(164)(156)(329)(294)Refining planned turnaround costs(392)(151)(749)(296)Renewable volume obligation requirements 238 238 Litigation 27 Depreciation and amortization(834)(819)(1,634)(1,6
242、24)Net interest and other financial costs(142)(312)(296)(574)Income before income taxes$3,163$8,016$7,070$9,470 Net income attributable to MPC per diluted share$5.32$10.95$11.44$12.15 28Table of ContentsNet income attributable to MPC was$2.23 billion,or$5.32 per diluted share,in the second quarter o
243、f 2023 compared to$5.87 billion,or$10.95 per dilutedshare,for the second quarter of 2022 and$4.95 billion,or$11.44 per diluted share,in the first six months of 2023 compared to$6.72 billion,or$12.15 perdiluted share,in the first six months of 2022.The decreases in net income attributable to MPC were
244、 largely due to lower Refining&Marketing margins.Refer to the Results of Operations section for a discussion of consolidated financial results and segment results for the second quarter of 2023 as compared tothe second quarter of 2022 and the first six months of 2023 compared to the first six months
245、 of 2022.MPLXWe owned approximately 647 million MPLX common units as of June 30,2023,with a market value of$21.97 billion based on the June 30,2023 closing price of$33.94 per common unit.On July 25,2023,MPLX declared a quarterly cash distribution of$0.7750 per common unit payable on August 14,2023,t
246、o unitholdersof record on August 4,2023.As a result,MPCs portion of this distribution is approximately$502 million.We received limited partner distributions of$1.0 billion from MPLX in the six months ended June 30,2023 and$913 million in the six months ended June 30,2022.During the six months ended
247、June 30,2023,no MPLX units were repurchased.As of June 30,2023,approximately$846 million remained available under theauthorization for future unit repurchases.On February 9,2023,MPLX issued$1.1 billion aggregate principal amount of 5.00 percent senior notes due 2033 and$500 million aggregate princip
248、al amountof 5.65 percent senior notes due 2053 in an underwritten public offering.On February 15,2023,MPLX redeemed all of its 600,000 outstanding Series B preferred units at the redemption price of$1,000 per unit.The semi-annualdistribution due to Series B unitholders on February 15,2023,was also p
249、aid on that date,in the usual manner.On March 13,2023,MPLX redeemed all ofMPLXs and MarkWests$1.0 billion aggregate principal amount of 4.50 percent senior notes due July 2023 at par,plus accrued and unpaid interest.See Note 4 to the unaudited consolidated financial statements for additional informa
250、tion on MPLX.OVERVIEW OF SEGMENTSRefining&MarketingRefining&Marketing segment adjusted EBITDA depends largely on our refinery throughput,Refining&Marketing margin,refining operating costs anddistribution costs.Refining&Marketing margin is the difference between the prices of refined products sold an
251、d the costs of crude oil and other charge and blendstocks refined,including the costs to transport these inputs to our refineries and the costs of products purchased for resale.The crack spread is a measure of the differencebetween market prices for refined products and crude oil,commonly used by th
252、e industry as a proxy for the refining margin.Crack spreads can fluctuatesignificantly,particularly when prices of refined products do not move in the same direction as the cost of crude oil.As a performance benchmark and acomparison with other industry participants,we calculate Gulf Coast,Mid-Conti
253、nent and West Coast crack spreads that we believe most closely track ouroperations and slate of products.The following are used for these crack spread calculations:The Gulf Coast crack spread uses three barrels of MEH crude producing two barrels of USGC CBOB gasoline and one barrel of USGC ULSD;The
254、Mid-Continent crack spread uses three barrels of WTI crude producing two barrels of Chicago CBOB gasoline and one barrel of Chicago ULSD;andThe West Coast crack spread uses three barrels of ANS crude producing two barrels of LA CARBOB and one barrel of LA CARB Diesel.Our refineries can process signi
255、ficant amounts of sweet and sour crude oil,which typically can be purchased at a discount to crude oil referenced in our GulfCoast,Mid-Continent and West Coast crack spreads.The amount of these discounts,which we refer to as the sweet differential and sour differential,can varysignificantly,causing
256、our Refining&Marketing margin to differ from blended crack spreads.In general,larger sweet and sour differentials will enhance ourRefining&Marketing margin.Future crude oil differentials will be dependent on a variety of market and economic factors,as well as U.S.energy policy.29Table of ContentsThe
257、 following table provides sensitivities showing an estimated change in annual Refining&Marketing segment adjusted EBITDA due to potential changes inmarket conditions.(Millions of dollars)Blended crack spread sensitivity(per$1.00/barrel change)$1,080 Sour differential sensitivity (per$1.00/barrel cha
258、nge)500 Sweet differential sensitivity (per$1.00/barrel change)500 Natural gas price sensitivity (per$1.00/MMBtu)310 Crack spread based on 40 percent MEH,40 percent WTI and 20 percent ANS with Gulf Coast,Mid-Continent and West Coast product pricing,respectively,andassumes all other differentials and
259、 pricing relationships remain unchanged.Sour crude oil basket consists of the following crudes:ANS,Argus Sour Crude Index,Maya and Western Canadian Select.We assume approximately 50 percent ofthe crude processed at our refineries in 2023 will be sour crude.Sweet crude oil basket consists of the foll
260、owing crudes:Bakken,Brent,MEH,WTI-Cushing and WTI-Midland.We assume approximately 50 percent of the crudeprocessed at our refineries in 2023 will be sweet crude.This is consumption-based exposure for our Refining&Marketing segment and does not include the sales exposure for our Midstream segment.In
261、addition to the market changes indicated by the crack spreads,the sour differential and the sweet differential,our Refining&Marketing margin is impacted byfactors such as:the selling prices realized for refined products;the types of crude oil and other charge and blendstocks processed;our refinery y
262、ields;the cost of products purchased for resale;the impact of commodity derivative instruments used to hedge price risk;the potential impact of lower of cost or market adjustments to inventories in periods of declining prices;the potential impact of LIFO charges due to changes in historic inventory
263、levels;andthe cost of purchasing RINs in the open market to comply with RFS2 requirements.Refining&Marketing segment adjusted EBITDA is also affected by changes in refinery operating costs in addition to committed distribution costs.Changes inoperating costs are primarily driven by the cost of energ
264、y used by our refineries,including purchased natural gas,and the level of maintenance costs.Distribution costs primarily include long-term agreements with MPLX,which as discussed below include minimum commitments to MPLX,and will negativelyimpact segment adjusted EBITDA in periods when throughput or
265、 sales are lower or refineries are idled.We have various long-term,fee-based commercial agreements with MPLX.Under these agreements,MPLX,which is reported in our Midstream segment,provides transportation,storage,distribution and marketing services to our Refining&Marketing segment.Certain of these a
266、greements include commitments forminimum quarterly throughput and distribution volumes of crude oil and refined products and minimum storage volumes of crude oil,refined products and otherproducts.Certain other agreements include commitments to pay for 100 percent of available capacity for certain m
267、arine transportation and refining logisticsassets.MidstreamOur Midstream segment gathers,transports,stores and distributes crude oil,refined products,including renewable diesel,and other hydrocarbon-basedproducts,principally for our Refining&Marketing segment.Additionally,the segment markets refined
268、 products.The profitability of our pipeline transportationoperations primarily depends on tariff rates and the volumes shipped through the pipelines.The profitability of our marine operations primarily depends on thequantity and availability of our vessels and barges.The profitability of our light p
269、roduct terminal operations primarily depends on the throughput volumes at theseterminals.The profitability of our fuels distribution services primarily depends on the sales volumes of certain refined products.The profitability of our refininglogistics operations depends on the quantity and availabil
270、ity of our refining logistics assets.A majority of the crude oil and refined product shipments on ourpipelines and marine vessels and the refined product throughput at our terminals serve our Refining&Marketing segment and our refining logistics assets andfuels distribution services are used solely
271、by our Refining&Marketing segment.As discussed above in the Refining&Marketing section,MPLX,which isreported in our Midstream segment,has various long-term,fee-based commercial agreements related to services provided to our Refining&Marketing segment.Under these agreements,MPLX has received various
272、commitments of minimum throughput,storage and distribution volumes as well as commitments to pay forall available capacity of certain assets.The volume of crude oil that we transport is directly affected by the supply of,and refiner demand for,crude oil in themarkets served directly by our crude oil
273、 pipelines,terminals and marine operations.Key factors in this supply and demand balance are the production levels ofcrude oil by producers in various regions or fields,the availability and cost of alternative modes of transportation,the volumes of crude oil processed at refineriesand refinery and t
274、ransportation system maintenance levels.The volume of refined products that we transport,store,distribute and market is directly affected bythe production levels of,and user demand for,refined products in the markets served by our refined product pipelines and marine operations.In most of ourmarkets
275、,demand for gasoline and(a)(b)(c)(d)(a)(b)(c)(d)30Table of Contentsdistillate peaks during the summer driving season,which extends from May through September of each year,and declines during the fall and winter months.Aswith crude oil,other transportation alternatives and system maintenance levels i
276、nfluence refined product movements.Our Midstream segment also gathers,processes and transports natural gas and transports,fractionates,stores and markets NGLs.NGL and natural gas pricesare volatile and are impacted by changes in fundamental supply and demand,as well as market uncertainty,availabilit
277、y of NGL transportation and fractionationcapacity and a variety of additional factors that are beyond our control.Our Midstream segment profitability is affected by prevailing commodity prices primarilyas a result of processing or conditioning at our own or thirdparty processing plants,purchasing an
278、d selling or gathering and transporting volumes of natural gasat indexrelated prices and the cost of thirdparty transportation and fractionation services.To the extent that commodity prices influence the level of natural gasdrilling by our producer customers,such prices also affect profitability.RES
279、ULTS OF OPERATIONSThe following discussion includes comments and analysis relating to our results of operations.This discussion should be read in conjunction with Item 1.Financial Statements and is intended to provide investors with a reasonable basis for assessing our historical operations,but shou
280、ld not serve as the onlycriteria for predicting our future performance.Consolidated Results of OperationsThree Months Ended June 30,Six Months Ended June 30,(Millions of dollars)20232022Variance20232022VarianceRevenues and other income:Sales and other operating revenues$36,343$53,795$(17,452)$71,207
281、$91,853$(20,646)Income from equity method investments199 147 52 332 289 43 Net gain on disposal of assets13 39(26)16 21(5)Other income269 257 12 346 459(113)Total revenues and other income36,824 54,238(17,414)71,901 92,622(20,721)Costs and expenses:Cost of revenues(excludes items below)31,762 44,207
282、(12,445)61,056 79,275(18,219)Depreciation and amortization834 819 15 1,634 1,624 10 Selling,general and administrative expenses704 694 10 1,395 1,297 98 Other taxes219 190 29 450 382 68 Total costs and expenses33,519 45,910(12,391)64,535 82,578(18,043)Income from operations3,305 8,328(5,023)7,366 10
283、,044(2,678)Net interest and other financial costs142 312(170)296 574(278)Income before income taxes3,163 8,016(4,853)7,070 9,470(2,400)Provision for income taxes583 1,799(1,216)1,406 2,081(675)Net income2,580 6,217(3,637)5,664 7,389(1,725)Less net income attributable to:Redeemable noncontrolling int
284、erest23 21 2 46 42 4 Noncontrolling interests331 323 8 668 629 39 Net income attributable to MPC$2,226$5,873$(3,647)$4,950$6,718$(1,768)Second Quarter 2023 Compared to Second Quarter 2022Net income attributable to MPC decreased$3.65 billion in the second quarter of 2023 compared to the second quarte
285、r of 2022 primarily due to lower Refining&Marketing margins in the second quarter of 2023.Revenues and other income decreased$17.41 billion primarily due to:decreased sales and other operating revenues of$17.45 billion primarily due to decreased Refining&Marketing segment average refined productsale
286、s prices of$1.13 per gallon and decreased refined product sales volumes of 34 mbpd;andincreased income from equity method investments of$52 million primarily due to increased income from Midstream equity affiliates.31Table of ContentsCosts and expenses decreased$12.39 billion primarily due to decrea
287、sed cost of revenues of$12.45 billion mainly due to lower crude oil costs,partially offset byinsignificant items in selling,general and administrative expenses and other taxes.Net interest and other financial costs decreased$170 million largely due to increased interest income and decreased pension
288、non-service costs,partially offsetby increased interest expense due to higher MPLX borrowings.We recorded a combined federal,state and foreign income tax provision of$583 million for the three months ended June 30,2023,which was lower than theU.S.statutory rate primarily due to net income attributab
289、le to noncontrolling interests,a benefit related to foreign derived intangible income,offset by state taxes.We recorded a combined federal,state and foreign income tax provision of$1.80 billion for the three months ended June 30,2022,which was higher than theU.S.statutory rate primarily due to state
290、 taxes offset by net income attributable to noncontrolling interests.Six Months Ended June 30,2023 Compared to Six Months Ended June 30,2022Net income attributable to MPC decreased$1.77 billion in the first six months of 2023 compared to the first six months of 2022 primarily due to lower Refining&M
291、arketing margins in the first six months of 2023.Revenues and other income decreased$20.72 billion primarily due to:decreased sales and other operating revenues of$20.65 billion primarily due to decreased Refining&Marketing segment average refined productsales prices of$0.68 per gallon,partially off
292、set by increased refined product sales volumes of 12 mbpd;increased income from equity method investments of$43 million largely due to increased income from Midstream equity affiliates,partially offset bydecreased income from Refining&Marketing equity affiliates;anddecreased other income of$113 mill
293、ion primarily due to lower income on RIN sales.Costs and expenses decreased$18.04 billion primarily due to:decreased cost of revenues of$18.22 billion primarily due to lower crude oil costs;increased selling,general and administrative expenses of$98 million primarily due to increased salaries and em
294、ployee related expenses,contractservices and technology and communication expenses,partially offset by decreased employee benefit costs,credit card processing fees and insuranceexpenses;andincreased other taxes of$68 million primarily due to the reinstated Petroleum Superfund Tax which was effective
295、 January 1,2023.Net interest and other financial costs decreased$278 million largely due to increased interest income and decreased pension non-service costs,partially offsetby increased interest expense due to higher MPLX borrowings.We recorded a combined federal,state and foreign income tax expens
296、e of$1.41 billion for the six months ended June 30,2023,which was lower than the U.S.statutory rate primarily due to net income attributable to noncontrolling interests,a benefit related to foreign derived intangible income,offset by state taxes.Werecorded a combined federal,state and foreign income
297、 tax expense of$2.08 billion for the six months ended June 30,2022,which was higher than the U.S.statutory rate primarily due to state taxes offset by net income attributable to noncontrolling interests.Net income attributable to noncontrolling interests increased$39 million primarily due to an incr
298、ease in MPLXs net income in the first six months of 2023.Segment ResultsWe classify our business in the following reportable segments:Refining&Marketing and Midstream.Segment adjusted EBITDA represents adjusted EBITDAattributable to the reportable segments.Amounts included in income before income ta
299、xes and excluded from segment adjusted EBITDA include:(i)depreciationand amortization;(ii)net interest and other financial costs;(iii)turnaround expenses and(iv)other adjustments as deemed necessary.These items are either:(i)believed to be non-recurring in nature;(ii)not believed to be allocable or
300、controlled by the segment;or(iii)are not tied to the operational performance of thesegment.32Table of ContentsThe following shows the percentage of segment adjusted EBITDA by segment for the six months ended June 30,2023 and 2022.Refining&MarketingThe following includes key financial and operating d
301、ata for the second quarter of 2023 compared to the second quarter of 2022 and the six months endedJune 30,2023 compared to the six months ended June 30,2022.33Table of ContentsIncludes intersegment sales to Midstream and sales destined for export.Three Months Ended June 30,Six Months Ended June 30,2
302、023202220232022Refining&Marketing Operating StatisticsNet refinery throughput(mbpd)2,925 3,069 2,881 2,952 Refining&Marketing margin per barrel$22.10$37.54$24.08$26.93 Less:Refining operating costs per barrel5.15 5.19 5.41 5.20 Distribution costs per barrel5.15 4.76 5.21 4.77 Other income per barrel
303、(0.08)(0.20)0.01(0.14)Refining&Marketing segment adjusted EBITDA per barrel$11.88$27.79$13.45$17.10 Less:Refining planned turnaround costs per barrel1.47 0.54 1.43 0.56 Depreciation and amortization per barrel1.82 1.70 1.82 1.75 Refining&Marketing segment income per barrel$8.59$25.55$10.20$14.79 Fee
304、s paid to MPLX per barrel included in distribution costs above$3.55$3.30$3.61$3.38 Sales revenue less cost of refinery inputs and purchased products,divided by net refinery throughput.See“Non-GAAP Measures”section for reconciliation and further information regarding this non-GAAP measure.Includes re
305、fining operating costs and major maintenance costs.Excludes planned turnaround and depreciation and amortization expense.Includes income(loss)from equity method investments,net gain(loss)on disposal of assets and other income.(a)(a)(b)(c)(d)(a)(b)(c)(d)34Table of ContentsThe following information pr
306、esents certain benchmark prices in our marketing areas and market indicators that we believe are helpful in understanding theresults of our Refining&Marketing segment.The benchmark crack spreads below do not reflect the market cost of RINs necessary to meet EPA renewablevolume obligations for attrib
307、utable products under the Renewable Fuel Standard.Three Months Ended June 30,Six Months Ended June 30,2023202220232022Benchmark Spot Prices(dollars per gallon)Chicago CBOB unleaded regular gasoline$2.44$3.55$2.41$3.07 Chicago ULSD2.44 3.97 2.59 3.41 USGC CBOB unleaded regular gasoline2.35 3.41 2.37
308、3.05 USGC ULSD2.39 3.99 2.63 3.49 LA CARBOB2.76 3.91 2.74 3.47 LA CARB diesel2.39 4.07 2.65 3.56 Market Indicators(dollars per barrel)WTI$73.56$108.52$74.77$101.77 MEH74.69 109.96 76.22 103.36 ANS78.43 112.54 78.73 104.43 Crack Spreads:Mid-Continent WTI 3-2-1$21.48$38.96$21.94$26.05 USGC MEH 3-2-116
309、.59 33.67 18.89 24.31 West Coast ANS 3-2-124.49 46.30 27.06 36.38 Blended 3-2-120.13 38.31 21.75 27.42 Crude Oil Differentials:Sweet$(0.34)$0.35$(0.03)$0.23 Sour(5.77)(5.03)(7.50)(4.95)Blended 3-2-1 Mid-Continent/USGC/West Coast crack spread is 40/40/20 percent in 2023 and 2022.Second Quarter 2023 C
310、ompared to Second Quarter 2022Refining&Marketing segment revenues decreased$17.16 billion primarily due to decreased average refined product sales prices of$1.13 per gallon anddecreased refined product sales volumes of 34 mbpd.Net refinery throughput decreased 144 mbpd during the second quarter of 2
311、023.Refining&Marketing segment adjusted EBITDA decreased$4.60 billion primarily due to decreases in per barrel margins and throughput and increaseddistribution costs,excluding depreciation and amortization,partially offset by decreased refining operating costs,excluding depreciation and amortization
312、.Refining&Marketing segment adjusted EBITDA was$11.88 per barrel for the second quarter of 2023,versus$27.79 per barrel for the second quarter of 2022.Refining&Marketing margin was$22.10 per barrel for the second quarter of 2023 compared to$37.54 per barrel for the second quarter of 2022.Refining&Ma
313、rketing margin is affected by our performance against the market indicators shown earlier,which use spot market values and an estimated mix of crudepurchases and product sales.Based on the market indicators and our crude oil throughput,we estimate a net negative impact of approximately$5 billion onR
314、efining&Marketing margin for the second quarter of 2023 compared to the second quarter of 2022,primarily due to narrower crack spreads.Our reportedRefining&Marketing margin differs from market indicators due to the mix of crudes purchased and their costs,the effect of market structure on our crude o
315、ilacquisition prices,the effect of RIN prices on the crack spread,and other items like refinery yields,other feedstock variances and fuel margin from sales to directdealers.These factors had an estimated net positive effect of approximately$300 million on Refining&Marketing segment income in the sec
316、ond quarter of 2023compared to the second quarter of 2022.For the three months ended June 30,2023,refining operating costs,excluding depreciation and amortization,decreased$77 million,or$0.04 per barrel,largelydue to lower energy costs,partially offset by project expense associated with higher turna
317、round activity and routine maintenance expense.(a)(a)35Table of ContentsDistribution costs,excluding depreciation and amortization,increased$42 million,or$0.39 per barrel,and include fees paid to MPLX of$946 million and$922million for the second quarter of 2023 and 2022,respectively.The increase was
318、 primarily due to higher pipeline tariff rates and logistics fee escalations.Refining planned turnaround costs increased$241 million,or$0.93 per barrel,due to the scope and timing of turnaround activity.Depreciation and amortization increased$9 million,or$0.12 per barrel.We purchase RINs to satisfy
319、a portion of our RFS2 compliance.Our expenses associated with purchased RINs were$694 million and$730 million,net ofbenefits related to retroactive changes in renewable volume obligation requirements,in the second quarter of 2023 and 2022,respectively.The RINs expense isincluded in Refining&Marketin
320、g margin.The decrease in the second quarter of 2023 was primarily due to increased RINs acquired with purchased product fromthird parties and the Martinez Renewable Fuels joint venture.Six Months Ended June 30,2023 Compared to Six Months Ended June 30,2022Refining&Marketing segment revenues decrease
321、d$20.30 billion primarily due to decreased average refined product sales prices of$0.68 per gallon,partiallyoffset by increased refined product sales volumes of 12 mbpd.Net refinery throughput decreased 71 mbpd in the first six months of 2023.Refining&Marketing segment adjusted EBITDA decreased$2.12
322、 billion primarily driven by decreases in per barrel margins and throughput and increaseddistribution costs and refining operating costs,both excluding depreciation and amortization.Refining&Marketing segment adjusted EBITDA was$13.45 perbarrel for the first six months of 2023,versus$17.10 per barre
323、l for the first six months of 2022.Refining&Marketing margin was$24.08 per barrel for the first six months of 2023 compared to$26.93 per barrel for the first six months of 2022.Refining&Marketing margin is affected by the market indicators shown earlier,which use spot market values and an estimated
324、mix of crude purchases and product sales.Based on the market indicators and our crude oil throughput,we estimate a net negative impact of approximately$2 billion on Refining&Marketing margin forthe first six months of 2023 compared to the first six months of 2022,primarily due to narrower crack spre
325、ads.Our reported Refining&Marketing margin differsfrom market indicators due to the mix of crudes purchased and their costs,market structure on our crude oil acquisition prices,RIN prices on the crack spread,and other items like refinery yields,other feedstock variances and fuel margin from sales to
326、 direct dealers.These factors had an estimated net positive effect ofapproximately$600 million on Refining&Marketing segment income in the first six months of 2023 compared to the first six months of 2022.For the six months ended June 30,2023,refining operating costs,excluding depreciation and amort
327、ization,increased$43 million,or$0.21 per barrel,largelydue to project expense associated with higher turnaround activity,partially offset by lower energy costs.Distribution costs,excluding depreciation and amortization,increased$165 million for the first six months of 2023,or$0.44 per barrel,and inc
328、lude fees paid toMPLX of$1.88 billion and$1.80 billion for the first six months of 2023 and 2022,respectively.The increase was primarily due to higher pipeline tariff rates andlogistics fee escalations.Refining planned turnaround costs increased$453 million,or$0.87 per barrel,due to the scope and ti
329、ming of turnaround activity.Depreciation and amortization increased$12 million,or$0.07 per barrel.We purchase RINs to satisfy a portion of our RFS2 compliance.Our expenses associated with purchased RINs were$1.16 billion and$1.30 billion,net ofbenefits related to retroactive changes in renewable vol
330、ume obligation requirements,in the first six months of 2023 and 2022,respectively.The RINs expense isincluded in Refining&Marketing margin.The decrease in the first six months of 2023,was primarily due to increased RINs acquired with purchased productfrom third parties and the Martinez Renewable Fue
331、ls joint venture.36Table of ContentsSupplemental Refining&Marketing StatisticsThree Months Ended June 30,Six Months Ended June 30,2023202220232022Refining&Marketing Operating StatisticsCrude oil capacity utilization percent93 100 91 96 Refinery throughput(mbpd):Crude oil refined2,698 2,896 2,632 2,7
332、61 Other charge and blendstocks227 173 249 191 Net refinery throughput2,925 3,069 2,881 2,952 Sour crude oil throughput percent46 48 44 47 Sweet crude oil throughput percent54 52 56 53 Refined product yields(mbpd):Gasoline1,497 1,536 1,503 1,510 Distillates1,033 1,123 1,029 1,051 Propane67 74 67 71
333、NGLs and petrochemicals227 224 192 193 Heavy fuel oil61 54 46 70 Asphalt83 91 83 89 Total2,968 3,102 2,920 2,984 Refined product export sales volumes(mbpd)295 326 297 298 Based on calendar-day capacity,which is an annual average that includes down time for planned maintenance and other normal operating activities.Product yields include renewable production.Represents fully loaded export cargoes fo