Item 1. BUSINESS

OVERVIEW

Marathon Petroleum Corporation (“MPC”) has 131 years of experience in the energy business with roots tracing back to the formation of the Ohio Oil Company in 1887. We are a leading, integrated, downstream energy company headquartered in Findlay, Ohio. With the acquisition of Andeavor October 1, 2018 (as described further below), we are the largest independent petroleum product refining, marketing, retail and midstream business in the United States. We operate the nation's largest refining system with more than 3 million barrels per day of crude oil capacity across 16 refineries. MPC's marketing system includes branded locations across the United States. We also own and operate retail convenience stores across the United States. MPC’s midstream operations are primarily conducted through MPLX LP (“MPLX”) and Andeavor Logistics LP (“ANDX”), which own and operate crude oil and light product transportation and logistics infrastructure as well as gathering, processing and fractionation assets. We own the general partner and majority limited partner interests in these two midstream companies.

Our operations consist of three reportable operating segments: Refining & Marketing; Retail; and Midstream. Each of these segments is organized and managed based upon the nature of the products and services it offers.

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Refining & Marketing – refines crude oil and other feedstocks at our 16 refineries in the West Coast, Gulf Coast and Mid-Continent regions of the United States, purchases refined products and ethanol for resale and distributes refined products largely through transportation, storage, distribution and marketing services provided largely by our Midstream segment. We sell refined products to wholesale marketing customers domestically and internationally, to buyers on the spot market, to our Retail business segment and to independent entrepreneurs who operate primarily Marathon® branded outlets.

•	Retail – sells transportation fuels and convenience products in the retail market across the United States through company-owned and operated convenience stores, primarily under the Speedway brand, and long-term fuel supply contracts with direct dealers who operate locations mainly under the ARCO brand.

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Midstream – transports, stores, distributes and markets crude oil and refined products principally for the Refining & Marketing segment via refining logistics assets, pipelines, terminals, towboats and barges; gathers, processes and transports natural gas; and gathers, transports, fractionates, stores and markets NGLs. The Midstream segment primarily reflects the results of MPLX and ANDX, our sponsored master limited partnerships.

Andeavor Acquisition

On October 1, 2018, we completed the Andeavor acquisition. Under the terms of the merger agreement, Andeavor stockholders had the option to choose 1.87 shares of MPC common stock or $152.27 in cash per share of Andeavor common stock. The merger agreement included election proration provisions that resulted in approximately 22.9 million shares of Andeavor common stock being converted into cash consideration and the remaining 128.2 million shares of Andeavor common stock being converted into stock consideration. Andeavor stockholders received in the aggregate approximately 239.8 million shares of MPC common stock valued at $19.8 billion and approximately $3.5 billion in cash in connection with the Andeavor acquisition. Through the Andeavor acquisition, we acquired the general partner and 156 million common units of ANDX, which is a publicly traded master limited partnership (“MLP”) that was formed to own, operate, develop and acquire logistics assets.

Andeavor was a highly integrated marketing, logistics and refining company operating primarily in the Western and Mid-Continent United States. Andeavor’s operations included procuring crude oil from its source or from other third parties, transporting the crude oil to one of its 10 refineries, and producing, marketing and distributing refined products. Its marketing system included more than 3,300 stations marketed under multiple well-known fuel brands including ARCO®. Also, as noted above, we acquired the general partner and 156 million common units of ANDX, a leading growth-oriented, full service, and diversified midstream company which owns and operates networks of crude oil, refined products and natural gas pipelines, terminals with crude oil and refined products storage capacity, rail loading and offloading facilities, marine terminals including storage, bulk petroleum distribution facilities, a trucking fleet and natural gas processing and fractionation complexes.

This transaction combined two strong, complementary companies to create a leading nationwide U.S. downstream energy company. The acquisition substantially increases our geographic diversification and scale and strengthens each of our operating segments by diversifying our refining portfolio into attractive markets and increasing access to advantaged feedstocks, enhancing our midstream footprint in the Permian Basin, and creating a nationwide retail and marketing portfolio all of which is expected to substantially improve efficiencies and our ability to serve customers. We expect the combination to generate up

to approximately $1.4 billion in gross run-rate synergies within the first three years, significantly enhancing our long-term cash flow generation profile.

See Item 8. Financial Statements and Supplementary Data – Note 5 for additional information on other acquisitions and investments in affiliates.

Transactions with MPLX

On February 1, 2018, we completed the dropdown of the remaining identified assets related to our strategic actions to enhance shareholder value announced in January 2017. We contributed our refining logistics assets and fuels distribution services to MPLX in exchange for $4.1 billion in cash and approximately 114 million newly issued MPLX common units. Immediately following the dropdown, our IDRs were cancelled and our economic general partner interest was converted into a non-economic general partner interest, all in exchange for 275 million newly issued MPLX common units. MPLX financed the cash portion of the February 1, 2018 dropdown with its $4.1 billion 364-day term loan facility, which was entered into on January 2, 2018. On February 8, 2018, MPLX issued $5.5 billion in aggregate principal amount of senior notes in a public offering. MPLX used $4.1 billion of the net proceeds of the offering to repay the 364-day term-loan facility. The remaining proceeds were used to repay outstanding borrowings under MPLX’s revolving credit facility and intercompany loan agreement with us and for general partnership purposes.

Corporate History and Structure

MPC was incorporated in Delaware on November 9, 2009 in connection with an internal restructuring of Marathon Oil Corporation (“Marathon Oil”). On May 25, 2011, the Marathon Oil board of directors approved the spinoff of its Refining, Marketing & Transportation Business into an independent, publicly traded company, MPC, through the distribution of MPC common stock to the stockholders of Marathon Oil common stock on June 30, 2011. Our common stock trades on the NYSE under the ticker symbol “MPC.”

MPLX is a diversified, large-cap publicly traded MLP formed by us in 2012 that owns and operates midstream energy infrastructure and logistics assets, and provides fuels distribution services. As of December 31, 2018, we owned the general partner and 63.6 percent of the outstanding MPLX common units.

ANDX is a publicly traded MLP that was formed in 2010 to own, operate, develop and acquire logistics assets. As of December 31, 2018, we owned the general partner and 63.6 percent of the outstanding ANDX common units.

OUR BUSINESS STRATEGIES

By following our core values, we aim to achieve our strategic vision outlined below.

Core Values and Operational Excellence

Our core values are the foundation for all we do and include the following:

•	Health and Safety: We have the highest regard for the health and safety of our employees, contractors and neighboring communities.

•	Environmental Stewardship: We are committed to minimizing our environmental impact and continually look for ways to reduce our footprint.

•	Integrity: We uphold the highest standards of business ethics and integrity, enforcing strict principles of corporate governance. We strive for transparency in all of our operations.

•	Corporate Citizenship: We work to make a positive difference in the communities where we have the privilege to operate.

•	Inclusive Culture: We value diversity and strive to provide our employees with a collaborative, supportive, and inclusive work environment where they can maximize their full potential for personal and business success.

Maintain Top-Tier Safety and Environmental Performance

We remain committed to operating our assets in a safe and reliable manner and targeting continual improvement in our safety and environmental record across our operations through the use of a rigorous, independently audited management system, RC14001®:2015. This management system integrates health, environmental stewardship, safety and security to ensure compliance and continual improvement. Six of our 16 refineries, the Marathon Pipeline organization and the Terminal, Transport and Rail organization are already certified to the RC14001 standard. We expect our natural gas gathering and processing operations will begin to seek RC14001 certification in 2020 and we have begun the process of integrating our newly acquired operations into the RC14004 management system.

As noted in the graph below, our Refining operations continue to demonstrate solid personal safety performance as compared to similar industry averages.

Safety Performance(a)

(a)	Safety performance is based on the OSHA Recordable Incident Rate for the Refining industry. The industry average source is the Bureau of Labor Statistics and data is not yet available for 2018.

(b)	Legacy Andeavor refineries included beginning full year 2018.

In addition, our corporate headquarters, four of our 16 refineries and 14 additional facilities have earned designations as an OSHA VPP Star site. This designation recognizes the outstanding efforts of employers and employees who have implemented effective safety and health management systems and achieved exemplary occupational safety and health performance. Three additional sites have completed their OSHA VPP inspections in 2018 and will be eligible for VPP status in 2019.

We proactively address our regulatory requirements and encourage our operations to continually improve their environmental performance through our DEI program, which establishes goals and measures performance. DEI is a metric adopted by MPC to capture several categories simultaneously. It includes three categories of environmental incidents: releases to the environment (air, land or water), environmental permit exceedances and agency enforcement actions. We rank DEIs in terms of their severity, with Tier 4 being the most severe, and Tier 1 being the least. We report and track these as a leading indicator that helps us to identify potential problems before they occur. We continually strive for improvements in our environmental performance. In 2018, we experienced 23 DEIs, a 62 percent reduction from 2013, and we have already begun to integrate our recently acquired operations into these programs.

In 2018, the EPA recognized Marathon Petroleum Corporation as an ENERGY STAR Partner of the Year, the only oil and gas company to receive such honor. This award recognized the significant energy efficiency gains achieved since we established our “Focus on Energy” program at our refineries nearly a decade ago. Through the implementation of this program, we have earned 75 percent of the total ENERGY STAR certifications awarded to the U.S. refining sector since 2006. Overall, we have realized considerable savings in energy costs and our energy efficiency efforts have enabled us to significantly lower our greenhouse gas intensity.

Capture Value and Leverage Integrated Business Model

With the acquisition of Andeavor on October 1, 2018, we believe the enhanced scale and integration of our midstream, retail and refining assets distinguishes us from our competitors. Our nationwide footprint enables connectivity to key supply sources and demand hubs. We have additional access to advantaged feedstocks and our expanded logistics system lowers crude acquisition costs, increases optionality, and increases our speed to market. Our broader market presence creates new product placement options and our nationwide marketing channels create even further optimization opportunities. With operations coast to coast, we intend to leverage and optimize the significant scale of our midstream, retail and refining assets to recognize up to approximately $1.4 billion of gross run-rate synergies by the end of 2021. Further information about our synergy outlook and estimated gross run-rate synergies are included below:

(a)	Procurement synergies allocated 50/50 to Refining & Marketing and Corporate.

(b)	Initial synergy estimates provided April 30, 2018.

Strategically Invest in Attractive Long-Term Growth Opportunities

We intend to allocate significant portions of our capital to investments focused on enhancing margins system wide with disciplined allocation to projects with superior returns.

Our Refining & Marketing segment projects are focused on refinery optimization, production of higher value products, increased capacity to upgrade residual fuel oil and expanded export capacity. Investing to enhance margins, we will continue our disciplined high-return investments in resid upgrading capacity and the ability to produce more diesel. We also plan to continue investing in domestic light products supply placement flexibility, as well as increasing our export capacity.

In our Retail segment, projects are focused on high value growth opportunities, real estate and store portfolio optimization and technology enhancements. Our plans include conversion of recently acquired locations to the Speedway brand and systems, growth in existing and new markets, dealer sites, commercial fueling/diesel expansion, food service through store remodels and high quality acquisitions.

In our Midstream segment, projects are focused on meeting market needs in the Permian, Marcellus and Utica basins as well as investments in export opportunities and long-haul pipelines. We plan to invest in gathering systems to create significant growth opportunities in the Permian Basin and in long-haul pipelines to generate stable, fee-based midstream income while helping to lower feedstock costs for our refineries. We also plan to expand our value chain by connecting growing natural gas production to demand from our refineries and global export markets and by connecting growing NGL production and developing new fractionation infrastructure in the Gulf Coast. Export facilities create the ability to generate third party revenue and meet global demand for crude, refined products and NGLs.

Focus on Disciplined Capital Allocation and Shareholder Returns

We intend to maintain our focus on a disciplined and balanced approach to capital allocation, including return of capital to shareholders, in a manner consistent with maintaining an investment-grade credit profile. Since becoming a stand-alone company in June 2011, our dividend has increased by a 24.9 percent compound annual growth rate and our board of directors has authorized share repurchases totaling $18.0 billion. Through open market purchases and two ASR programs, we have repurchased 293 million shares of our common stock for approximately $13.10 billion, representing approximately 41 percent of our outstanding common shares when we became a stand-alone company in June 2011. We achieved these shareholder returns while meaningfully investing in the business and maintaining an investment-grade credit profile. As of December 31, 2018, $4.90 billion of authorization remains available for future share repurchases.

Utilize and Enhance our High Quality Employee Workforce

We utilize our high quality employee workforce by continuously leveraging their commercial skills and business acumen. In addition, we continue to enhance our workforce through active recruitment of the best candidates, including those from diverse backgrounds, and effective training programs on safety, environmental stewardship, diversity and inclusion and other professional and technical skills.

OUR OPERATIONS

Our operations consist of three reportable operating segments: Refining & Marketing; Retail; and Midstream.

REFINING & MARKETING

Refineries

We currently own and operate 16 refineries in the Gulf Coast, Mid-Continent and West Coast regions of the United States with an aggregate crude oil refining capacity of 3,021 mbpcd. On October 1, 2018, we acquired 10 refineries as part of the Andeavor acquisition which added approximately 1,117 mbpcd to our total capacity. During 2018, our refineries processed 2,081 mbpd of crude oil and 193 mbpd of other charge and blendstocks. During 2017, our refineries processed 1,765 mbpd of crude oil and 179 mbpd of other charge and blendstocks.

Our refineries include crude oil atmospheric and vacuum distillation, fluid catalytic cracking, hydrocracking, catalytic reforming, coking, desulfurization and sulfur recovery units. The refineries process a wide variety of condensate, light and heavy crude oils purchased from various domestic and foreign suppliers. We produce numerous refined products, ranging from transportation fuels, such as reformulated gasolines, blend-grade gasolines intended for blending with ethanol and ULSD fuel, to heavy fuel oil and asphalt. Additionally, we manufacture aromatics, propane, propylene and sulfur. See the Refined Product Marketing section for further information about the products we produce.

Our refineries are integrated with each other via pipelines, terminals and barges to maximize operating efficiency. The transportation links that connect our refineries allow the movement of intermediate products between refineries to optimize operations, produce higher margin products and efficiently utilize our processing capacity. For example, naphtha may be moved from Galveston Bay to Robinson where excess reforming capacity is available. Also, shipping intermediate products between facilities during partial refinery shutdowns allows us to utilize processing capacity that is not directly affected by the shutdown work.

Following is a description of each of our refineries and their capacity by region.

Gulf Coast Region (1,149 mbpcd)

Galveston Bay, Texas City, Texas Refinery (585 mbpcd). Our Galveston Bay refinery is a world-class refining complex resulting from the combination of our former Texas City refinery and Galveston Bay refinery, which we acquired on February 1, 2013. The refinery is located on the Texas Gulf Coast approximately 30 miles southeast of Houston, Texas and can process a wide variety of crude oils into gasoline, distillates, aromatics, heavy fuel oil, dry gas, fuel-grade coke, refinery-grade propylene, chemical-grade propylene and sulfur. The refinery has access to the export market and multiple options to sell refined products. Our cogeneration facility, which supplies the Galveston Bay refinery, currently has 1,055 megawatts of electrical production capacity and can produce 4.3 million pounds of steam per hour. Approximately 45 percent of the power generated in 2018 was used at the refinery, with the remaining electricity being sold into the electricity grid.

Garyville, Louisiana Refinery (564 mbpcd). Our Garyville, Louisiana refinery is located along the Mississippi River in southeastern Louisiana between New Orleans, Louisiana and Baton Rouge, Louisiana. The Garyville refinery is configured to process a wide variety of crude oils into gasoline, distillates, fuel-grade coke, asphalt, polymer-grade propylene, propane, refinery-grade propylene, dry gas, slurry and sulfur. The refinery has access to the export market and multiple options to sell refined products. A major expansion project was completed in 2009 that increased Garyville’s crude oil refining capacity, making it one of the largest refineries in the U.S. Our Garyville refinery has earned designation as an OSHA VPP Star site.

Mid-Continent Region (1,161 mbpcd)

Catlettsburg, Kentucky Refinery (277 mbpcd). Our Catlettsburg, Kentucky refinery is located in northeastern Kentucky on the western bank of the Big Sandy River, near the confluence with the Ohio River. The Catlettsburg refinery processes sweet and sour crude oils into gasoline, distillates, asphalt, aromatics, heavy fuel oil and propane. In the second quarter of 2015, we completed construction of a condensate splitter at our Catlettsburg refinery, which increased our capacity to process condensate from the Utica shale region.

Robinson, Illinois Refinery (245 mbpcd). Our Robinson, Illinois refinery is located in southeastern Illinois. The Robinson refinery processes sweet and sour crude oils into gasoline, distillates, propane, anode-grade coke, fuel-grade coke and aromatics. The Robinson refinery has earned designation as an OSHA VPP Star site.

Detroit, Michigan Refinery (140 mbpcd). Our Detroit, Michigan refinery is located in southwest Detroit. It is the only petroleum refinery currently operating in Michigan. The Detroit refinery processes sweet and heavy sour crude oils into gasoline, distillates, asphalt, fuel-grade coke, chemical-grade propylene, propane and slurry. Our Detroit refinery earned designation as an OSHA VPP Star site. In the fourth quarter of 2012, we completed a heavy oil upgrading and expansion project that enabled the refinery to process up to an additional 80 mbpd of heavy sour crude oils, including Canadian crude oils.

El Paso, Texas Refinery (131 mbpcd). Our El Paso Refinery is located approximately three miles east of downtown El Paso, Texas. The El Paso refinery processes sweet and sour crudes into gasoline, distillates, heavy fuel oil, asphalt and propane. The refinery has access to the Permian Basin shale region.

St. Paul Park, Minnesota Refinery (98 mbpcd). Our St. Paul Park Refinery is located along the Mississippi River southeast of St. Paul Park, Minnesota and was originally built in 1939. The St. Paul Park refinery primarily processes sweet crude from the Bakken region in North Dakota as well as various grades of Canadian sweet and heavy sour crude and manufactures gasoline, distillates, asphalt, heavy fuel oil, propane and refinery-grade propylene.

Canton, Ohio Refinery (93 mbpcd). Our Canton, Ohio refinery is located approximately 60 miles south of Cleveland, Ohio. The Canton refinery processes sweet and sour crude oils, including production from the nearby Utica Shale, into gasoline, distillates, asphalt, roofing flux, propane, refinery-grade propylene and slurry. In December 2014, we completed construction of a condensate splitter at our Canton refinery, which increased our capacity to process condensate from the Utica shale region. The Canton refinery has earned designation as an OSHA VPP Star site.

Mandan, North Dakota Refinery (71 mbpcd). Our Mandan Refinery began operations in 1954. The Mandan refinery processes primarily sweet domestic crude oil from North Dakota and manufactures gasoline, distillates, propane and heavy fuel oil.

Salt Lake City, Utah Refinery (61 mbpcd). Our Salt Lake City Refinery began operations in 1908 and is now the largest in Utah. The Salt Lake City refinery processes crude oil from Utah, Colorado, Wyoming and Canada to manufacture gasoline, distillates, propane and heavy fuel oil.

Gallup, New Mexico Refinery (26 mbpcd). Our Gallup Refinery is located near Gallup, New Mexico and is the only active refinery in the Four Corners area. The Gallup refinery primarily processes high-quality crude known as Four Corners Sweet into gasoline, distillate, heavy fuel oil and propane.

Dickinson, North Dakota Refinery (19 mbpcd). Our Dickinson Refinery is located four miles west of Dickinson, North Dakota and is the first refinery in the U.S. to be built in over 30 years. The Dickinson refinery primarily processes domestic crude oil from North Dakota and manufactures ultra-low sulfur diesel and gasoline blendstocks. We plan to convert this refinery into a 12 mbpcd, 100 percent renewable diesel facility that will process refined soy oil and other organically derived feedstocks by December 2020.

West Coast Region (711 mbpcd)

Los Angeles, California Refinery (363 mbpcd). Our Los Angeles Refinery is located in Los Angeles County, near the Los Angeles Harbor. The Los Angeles Refinery is the largest refinery on the West Coast and is a major producer of clean fuels. The Los Angeles refinery processes heavy crude from California’s San Joaquin Valley and Los Angeles Basin as well as crudes from the Alaska North Slope, South America, West Africa and other international sources and manufactures cleaner-burning CARB gasoline and CARB diesel fuel, as well as conventional gasoline, distillates, petroleum coke, anode-grade coke, chemical-grade propylene, fuel-grade coke, heavy fuel oil and propane.

Martinez, California Refinery (161 mbpcd). Our Martinez Refinery is located in Martinez, California. The Martinez refinery processes crude oils from California and other domestic and foreign sources and manufactures cleaner-burning CARB gasoline and CARB diesel fuel, as well as conventional gasoline and distillates, petroleum coke, propane, heavy fuel oil and refinery-grade propylene.

Anacortes, Washington Refinery (119 mbpcd). Our Anacortes Refinery is located about 70 miles north of Seattle on Puget Sound. The Anacortes refinery processes Canadian crude, domestic crude from North Dakota and Alaska North Slope and international crudes to manufacture gasoline, distillates, heavy fuel oil and propane.

Kenai, Alaska Refinery (68 mbpcd). Our Kenai Refinery is located on the Cook Inlet, 60 miles southwest of Anchorage. The Kenai refinery processes mainly Alaska domestic crude along with limited international crude and manufactures gasoline, distillates, heavy fuel oil, asphalt and propane.

Planned maintenance activities, or turnarounds, requiring temporary shutdown of certain refinery operating units, are periodically performed at each refinery. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional detail.

Refined Product Yields

The following table sets forth our refinery production by product group for each of the last three years including production from the refineries acquired in the Andeavor acquisition from October 1, 2018 forward.

(mbpd)		2018			2017			2016
Gasoline		1,107			932			900
Distillates		773			641			617
Propane		41			36			35
Feedstocks and petrochemicals		288			277			241
Heavy fuel oil		38			37			32
Asphalt		69			63			58
Total		2,316			1,986			1,883

Crude Oil Supply

We obtain the crude oil we refine through negotiated term contracts and purchases or exchanges on the spot market. Our term contracts generally have market-related pricing provisions. The following table provides information on our sources of crude oil for each of the last three years and includes production from the refineries acquired in the Andeavor acquisition from October 1, 2018 forward. The crude oil sourced outside of North America was acquired from various foreign national oil companies, production companies and trading companies.

(mbpd)		2018			2017			2016
United States		1,319			999			986
Canada		297			381			326
Middle East and other international		465			385			387
Total		2,081			1,765			1,699

Our refineries receive crude oil and other feedstocks and distribute our refined products through a variety of channels, including pipelines, trucks, railcars, ships and barges.

Renewable Fuels

We currently own a biofuel production facility in Cincinnati, Ohio that produces biodiesel, glycerin and other by-products. The capacity of the plant is approximately 80 million gallons per year.

We hold ownership interests in ethanol production facilities in Albion, Michigan; Clymers, Indiana and Greenville, Ohio. These plants have a combined ethanol production capacity of approximately 410 million gallons per year (27 mbpd) and are managed by a co-owner.

Refined Product Marketing

Our refined products are primarily sold to independent retailers, wholesale customers, our brand jobbers, our Retail segment, airlines, transportation companies and utilities. Our Brand footprint expanded by approximately 1,100 branded outlets in the Western and Mid-Continental regions of the U.S. and Mexico through the Andeavor acquisition. As of December 31, 2018, there were 6,813 branded outlets in 35 states, the District of Columbia and Mexico where independent entrepreneurs primarily maintain Marathon-branded outlets. We believe we are one of the largest wholesale suppliers of gasoline and distillates to resellers and consumers within our 41-state market area.

The following table sets forth our refined product sales volumes by product group for each of the last three years including sales from the refineries acquired in the Andeavor acquisition from October 1, 2018 forward.

(mbpd)		2018			2017			2016
Gasoline		1,416			1,201			1,219
Distillates		847			691			676
Propane		44			37			35
Feedstocks and petrochemicals		289			265			231
Heavy fuel oil		37			39			35
Asphalt		70			68			63
Total		2,703			2,301			2,259

Refined Product Sales Destined for Export

We sell gasoline, distillates and asphalt for export, primarily out of our Garyville, Galveston Bay, Anacortes, Martinez, Los Angeles and Kenai refineries. The following table sets forth our refined product sales destined for export by product group for the past three years including sales from the refineries acquired in the Andeavor acquisition from October 1, 2018 forward.

(mbpd)		2018			2017			2016
Gasoline		117			96			91
Distillates		193			192			199
Asphalt and other		24			9			6
Total		334			297			296

Gasoline and Distillates. We sell gasoline, gasoline blendstocks and distillates (including No. 1 and No. 2 fuel oils, jet fuel, kerosene and diesel fuel) to wholesale customers, Marathon-branded independent entrepreneurs, our Retail segment, and on the spot market. In addition, we sell diesel fuel and gasoline for export to international customers. The demand for gasoline and distillates is seasonal in many of our markets, with demand typically at its highest levels during the summer months.

Propane. We produce propane at all of our refineries except Dickinson. Propane is primarily used for home heating and cooking, as a feedstock within the petrochemical industry, for grain drying and as a fuel for trucks and other vehicles. Our propane sales are split approximately 60 percent and 40 percent between the home heating market and petrochemical consumers, respectively.

Feedstocks and Petrochemicals. We are a producer and marketer of feedstocks and petrochemicals. Product availability varies by refinery and includes naptha, raffinate, benzene, butane, alkylate, dry gas, xylene, propylene, cumene, platformate and toluene. We market these products domestically to customers in the chemical, agricultural and fuel-blending industries. In addition, we produce fuel-grade coke at our Garyville, Detroit, Galveston Bay and Los Angeles refineries, which is used for power generation and in miscellaneous industrial applications, and anode-grade coke at our Los Angeles and Robinson refineries, which is used to make carbon anodes for the aluminum smelting industry.

Heavy Fuel Oil. We produce and market heavy residual fuel oil or related components, including slurry, at all of our refineries except Dickinson. Heavy residual fuel oil is primarily used in the utility and ship bunkering (fuel) industries, though there are other more specialized uses of the product.

Asphalt. We have refinery-based asphalt production capacity of up to 136 mbpcd, which includes asphalt cements, polymer-modified asphalt, emulsified asphalt, industrial asphalts and roofing flux. We have a broad customer base, including asphalt-paving contractors, government entities (states, counties, cities and townships) and asphalt roofing shingle manufacturers. We sell asphalt in the domestic and export wholesale markets via rail, barge and vessel.

Terminals and Transportation

We transport, store and distribute crude oil, feedstocks and refined products through pipelines, terminals and marine fleets owned by MPLX, ANDX and third parties in our market areas.

We own a fleet of transport trucks and trailers for the movement of refined products and crude oil. In addition, we maintain a fleet of leased and owned railcars for the movement and storage of refined products.

The locations and detailed information about our Refining & Marketing assets are included under Item 2. Properties and are incorporated herein by reference.

Competition, Market Conditions and Seasonality

The downstream petroleum business is highly competitive, particularly with regard to accessing crude oil and other feedstock supply and the marketing of refined products. We compete with a number of other companies to acquire crude oil for refinery processing and in the distribution and marketing of a full array of refined products. Based upon the “The Oil & Gas Journal 2018 Worldwide Refinery Survey,” we ranked first among U.S. petroleum companies on the basis of U.S. crude oil refining capacity.

We compete in four distinct markets for the sale of refined products—wholesale, spot, branded and retail distribution. Our marketing operations compete with numerous other independent marketers, integrated oil companies and high-volume retailers. We compete with companies in the sale of refined products to wholesale marketing customers, including private-brand marketers and large commercial and industrial consumers; companies in the sale of refined products in the spot market; and refiners or marketers in the supply of refined products to refiner-branded independent entrepreneurs. In addition, we compete with producers and marketers in other industries that supply alternative forms of energy and fuels to satisfy the requirements of our industrial, commercial and retail consumers.

Market conditions in the oil and gas industry are cyclical and subject to global economic and political events and new and changing governmental regulations. Our operating results are affected by price changes in crude oil, natural gas and refined products, as well as changes in competitive conditions in the markets we serve. Price differentials between sweet and sour crude oils, ANS, WTI and LLS crude oils and other market structure differentials also affect our operating results.

Demand for gasoline, diesel fuel and asphalt is higher during the spring and summer months than during the winter months in most of our markets, primarily due to seasonal increases in highway traffic and construction. As a result, the operating results for our Refining & Marketing segment for the first and fourth quarters may be lower than for those in the second and third quarters of each calendar year.

RETAIL

Our Retail segment sells gasoline, diesel and merchandise through convenience stores that it owns and operates, primarily under the Speedway brand, as well as through direct dealer locations. Our company-owned and operated convenience stores offer a wide variety of merchandise, including prepared foods, beverages and non-food items. Speedway’s Speedy Rewards® loyalty program has been a highly successful loyalty program since its inception in 2004, with a consistently growing base which averaged approximately 6.2 million active members in 2018. Speedway’s ability to capture and analyze member-specific transactional data enables us to offer Speedy Rewards® members discounts and promotions specific to their buying behavior. We believe Speedy Rewards® is a key reason customers choose Speedway over competitors and it continues to drive significant value for both Speedway and our Speedy Rewards® members.

As of December 31, 2018, our Retail segment had 3,923 company-owned and operated convenience stores across the United States. We acquired approximately 1,100 company-owned and operated retail convenience stores and fuel only locations as part of the Andeavor acquisition in the Western and Mid-Continental regions of the United States. In addition, we acquired long-term supply contracts for 1,065 direct dealer locations primarily in Southern California, largely under the ARCO® brand, which are also included in our Retail segment.

Speedway also owns a 29 percent interest in PFJ Southeast LLC (“PFJ Southeast”), which is a joint venture between Speedway and Pilot Flying J with 127 travel center locations primarily in the Southeast United States as of December 31, 2018. We also own SuperMom’s®, a high-quality bakery and commissary.

The locations and detailed information about our Retail assets are included under Item 2. Properties and are incorporated herein by reference.

Competition, Market Conditions and Seasonality

We face strong competition for sales of retail gasoline, diesel fuel and merchandise. Our competitors include service stations and convenience stores operated by fully integrated major oil companies, independent entrepreneurs and other well-recognized national or regional convenience stores and travel centers, often selling gasoline, diesel fuel and merchandise at competitive prices. Non-traditional retailers, such as supermarkets, club stores and mass merchants, have affected the convenience store industry with their entrance into sales of retail gasoline and diesel fuel. Energy Analysts International, Inc. estimated such retailers had approximately 16 percent of the U.S. gasoline market in mid-2018.

Demand for gasoline and diesel fuel is higher during the spring and summer months than during the winter months in most of our markets, primarily due to seasonal increases in highway traffic. As a result, the operating results for our Retail segment for the first and fourth quarters may be lower than for those in the second and third quarters of each calendar year. Margins from the sale of merchandise tend to be less volatile than margins from the retail sale of gasoline and diesel fuel.

MIDSTREAM

The Midstream segment primarily includes the operations of MPLX and ANDX, our sponsored master limited partnerships, which transport, store, distribute and market crude oil and refined products principally for the Refining & Marketing segment via refining logistics assets, pipelines, terminals, towboats and barges; gather, process and transport natural gas; and gather, transport, fractionate, store and market NGLs. The Midstream segment also includes certain related operations retained by MPC.

MPLX

MPLX owns and operates a network of crude oil, natural gas and product pipelines and has joint ownership interests in other crude oil and products pipelines. MPLX also owns and operates light products terminals, storage assets and maintains a fleet of owned and leased towboats and barges. MPLX’s assets also include natural gas gathering complexes, natural gas processing complexes and NGL fractionation complexes. On February 1, 2018, we contributed our refining logistics assets to MPLX, which include rail and truck loading racks and docks.

ANDX

ANDX owns and operates a network of crude oil, natural gas, product and water pipelines and has joint ownership interests in other crude oil and natural gas pipelines. ANDX owns and operates light products, asphalt and crude terminals, storage assets and barge docks. ANDX’s assets also include natural gas gathering complexes, natural gas processing complexes and NGL fractionation complexes.

MPC-Retained Midstream Assets and Investments

We retained ownership interests in several crude oil and products pipeline systems and pipeline companies and have indirect ownership interests in two ocean vessel joint ventures with Crowley through our investment in Crowley Coastal Partners.

The locations and detailed information about our Midstream assets are included under Item 2. Properties and are incorporated herein by reference.

Competition, Market Conditions and Seasonality

Our Midstream operations face competition for natural gas gathering, crude oil transportation and in obtaining natural gas supplies for our processing and related services; in obtaining unprocessed NGLs for gathering and fractionation; and in marketing our products and services. Competition for natural gas supplies is based primarily on the location of gas gathering facilities and gas processing plants, operating efficiency and reliability and the ability to obtain a satisfactory price for products recovered. Competitive factors affecting our fractionation services include availability of capacity, proximity to supply and industry marketing centers and cost efficiency and reliability of service. Competition for customers to purchase our natural gas and NGLs is based primarily on price, delivery capabilities, flexibility and maintenance of high-quality customer relationships. In addition, certain of our Midstream operations are highly regulated, which affects the rates that our common carrier pipelines can charge for transportation services and the return we obtain from such pipelines.

Our Midstream segment can be affected by seasonal fluctuations in the demand for natural gas and NGLs and the related fluctuations in commodity prices caused by various factors such as changes in transportation and travel patterns and variations in weather patterns from year to year.

ENVIRONMENTAL MATTERS

Our management is responsible for ensuring that our operating organizations maintain environmental compliance systems that support and foster our compliance with applicable laws and regulations, and for reviewing our overall environmental performance. We also have a Corporate Emergency Response Team that oversees our response to any major environmental or other emergency incident involving us or any of our facilities.

We believe it is likely that the scientific and political attention to issues concerning the extent and causes of climate change will continue, with the potential for further regulations that could affect our operations. Currently, legislative and regulatory measures to address greenhouse gases are in various phases of review, discussion or implementation. The cost to comply with these laws and regulations cannot be estimated at this time, but could be significant. For additional information, see Item 1A. Risk Factors. We estimate and publicly report greenhouse gas emissions from our operations and products. Additionally, we continuously strive to improve operational and energy efficiencies through resource and energy conservation where practicable.

Our operations are subject to numerous other laws and regulations relating to the protection of the environment. Such laws and regulations include, among others, the Clean Air Act (“CAA”) with respect to air emissions, the Clean Water Act (“CWA”) with respect to water discharges, the Resource Conservation and Recovery Act (“RCRA”) with respect to solid and hazardous waste treatment, storage and disposal, the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) with respect to releases and remediation of hazardous substances and the Oil Pollution Act of 1990 (“OPA-90”) with respect to oil pollution and response. In addition, many states where we operate have similar laws. New laws are being enacted and regulations are being adopted on a continuing basis, and the costs of compliance with such new laws and regulations are very difficult to estimate until finalized.

For a discussion of environmental capital expenditures and costs of compliance, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Environmental Matters and Compliance Costs.

Air

Greenhouse Gas Emissions

We are subject to many requirements in connection with air emissions from our operations. Internationally and domestically, emphasis has been placed on reducing greenhouse gas emissions. In 2018, the Trump Administration continued its shift in climate-related policy away from the Obama Administration’s policies. One of the major policy shifts is related to the administration’s efforts to repeal and replace the “Clean Power Plan.” On August 21, 2018, the U.S. Environmental Protection Agency (“EPA”) proposed the Affordable Clean Energy (“ACE”) rule, which would establish emission guidelines for states to develop plans to address greenhouse gas emissions from existing coal-fired power plants. The ACE rule would replace the 2015 Clean Power Plan, which had been stayed by the U.S. Supreme Court. President Trump also announced the United States’ intention to withdraw from the 2015 Paris UN Climate Change Conference Agreement, which aims to hold the increase in the global average temperature to well below two degrees Celsius as compared to pre-industrial levels. Many of the policies and regulations rescinded through Executive Order 13783 had been adopted to meet the United States’ pledge under the Agreement. The U.S. climate change strategy and implementation of that strategy through legislation and regulation may change under future administrations; therefore, the impact to our industry and operations due to greenhouse gas regulation is unknown at this time.

In 2009, the EPA issued an “endangerment finding” that greenhouse gas emissions contribute to air pollution that endangers public health and welfare. Related to the endangerment finding, in April 2010, the EPA finalized a greenhouse gas emission standard for mobile sources (cars and other light duty vehicles). The endangerment finding, the mobile source standard and the EPA’s determination that greenhouse gases are subject to regulation under the Clean Air Act resulted in permitting of greenhouse gas emissions at stationary sources. Through a series of legal challenges filed against the EPA, the requirement to control greenhouse gas emissions through Best Available Control Technology has been limited to new and modified large stationary sources, such as refineries, that will also emit a criteria pollutant. Implementing Best Available Control Technology may result in increased costs to our operations.

In the absence of federal legislation or regulation of greenhouse gas emissions, states are becoming more active in regulating greenhouse gas emissions. These measures may include state actions to develop statewide or regional programs to impose emission reductions. These measures may also include low-carbon fuel standards, such as the California program, or a state carbon tax. These measures could result in increased costs to operate and maintain our facilities, capital expenditures to install new emission controls and costs to administer any carbon trading or tax programs implemented. For example, in California, the state legislature adopted SB 32 in 2016. SB 32 set a cap on emissions of 40% below 1990 levels by 2030 but did not establish a particular mechanism to achieve that target. The legislature also adopted a companion bill, AB 197, that most significantly directs the CARB to prioritize direct emission reductions on large stationary sources. In 2017, the state legislature adopted AB 398 which provides direction and parameters on utilizing cap and trade after 2020 to meet the 40% reduction target from 1990 levels by 2030 specified in SB 32. Compliance with the cap and trade program is demonstrated through a market-based credit system. The compliance costs associated with these California regulations are ultimately passed on to the consumer in the form of higher fuel costs. We cannot currently predict the impact of these regulations on our liquidity, financial position, or results of operations, but we do not believe such impact will be material.

We could also face increased climate-related litigation with respect to our operations or products. Private party litigation seeking damages and injunctive relief is pending against MPC and other oil and gas companies in multiple jurisdictions. Although uncertain, these actions could increase our costs of operations or reduce the demand for the refined products we produce, transport, store and sell.

Private parties have also sued federal and certain state governmental entities seeking additional greenhouse gas emission reductions beyond those currently being undertaken. In sum, requiring reductions in greenhouse gas emissions could result in increased costs to (i) operate and maintain our facilities, (ii) install new emission controls at our facilities and (iii) administer and manage any greenhouse gas emissions programs, including acquiring emission credits or allotments. These requirements

may also significantly affect MPC’s refinery operations and may have an indirect effect on our business, financial condition and results of operations. The extent and magnitude of the impact from greenhouse gas regulation or legislation cannot be reasonably estimated due to the uncertainty regarding the additional measures and how they will be implemented.

Regardless of whether legislation or regulation is enacted, given the continuing global demand for oil and gas - even under different hypothetical carbon-constrained scenarios - MPC has taken actions that have resulted in lower greenhouse gas emission intensity and we are positioned to remain a successful company well into the future. We have instituted a program to improve energy efficiency of our refineries and other assets which will continue to pay dividends in reducing our environmental footprint as well as making us more cost-competitive. We believe our mature governance and risk-management processes enable the company to effectively monitor and adjust to any transitional, reputational or physical climate-related risks.

Clean Air Act

In 2015, the EPA finalized a revision to the National Ambient Air Quality Standards (“NAAQS”) for ozone. The EPA lowered the primary ozone NAAQS from 75 ppb to 70 ppb. This revision initiated a multi-year process in which nonattainment designations will be made based on more recent ozone measurements that includes data from 2016. On November 6, 2017, the EPA finalized ozone attainment/unclassifiable designations for certain areas under the new standard. In actions dated April 30, 2018, and July 25, 2018, the EPA finalized nonattainment designations for certain areas under the lower primary ozone standard. In some areas, these nonattainment designations could result in increased costs associated with, or result in cancellation or delay of, capital projects at our facilities. For areas designated nonattainment, states will be required to adopt State Implementation Plans (“SIPs”) for nonattainment areas. These SIPs may include NOx and/or volatile organic compound (“VOC”) reductions that could result in increased costs to our facilities. We cannot predict the effects of the various SIPs requirements at this time.

In California, the Board for the South Coast Air Quality Management District (“SCAQMD”) passed amendments to the Regional Clean Air Incentives Market (“RECLAIM”) that became effective in 2016, requiring a staged reduction of nitrogen oxide emissions through 2022. In 2017, the State of California passed AB 617, which requires each air district that is a nonattainment area for one or more air pollutants to adopt an expedited schedule for implementation of best available retrofit control technology (“BARCT”) on specific facilities. BARCT applies to all facilities subject to RECLAIM. In response to AB 617, the SCAQMD is currently working to “sunset” the existing RECLAIM program and replace it with applicable BARCT regulations.

Water

We maintain numerous discharge permits as required under the National Pollutant Discharge Elimination System program of the CWA and have implemented systems to oversee our compliance with these permits. In addition, we are regulated under OPA-90, which among other things, requires the owner or operator of a tank vessel or a facility to maintain an emergency plan to respond to releases of oil or hazardous substances. OPA-90 also requires the responsible company to pay resulting removal costs and damages and provides for civil penalties and criminal sanctions for violations of its provisions. We operate tank vessels and facilities from which spills of oil and hazardous substances could occur. We have implemented emergency oil response plans for all of our components and facilities covered by OPA-90 and we have established Spill Prevention, Control and Countermeasures plans for all facilities subject to such requirements.

Additionally, OPA-90 requires that new tank vessels entering or operating in U.S. waters be double-hulled and that existing tank vessels that are not double-hulled be retrofitted or removed from U.S. service. All barges used for river transport of our raw materials and refined products meet the double-hulled requirements of OPA-90. Some coastal states in which we operate have passed state laws similar to OPA-90, but with expanded liability provisions, that include provisions for cargo owner responsibility as well as ship owner and operator responsibility.

In June 2015, the EPA and the United States Army Corps of Engineers finalized significant changes to the definition of the term “waters of the United States” used in numerous programs under the CWA. This final rulemaking is referred to as the Clean Water Rule. The Clean Water Rule, as written, expands permitting, planning and reporting obligations and may extend the timing to secure permits for pipeline and fixed asset construction and maintenance activities. The Clean Water Rule has been challenged in multiple federal courts by many states, trade groups, and other interested parties, and in October 2015, a United States Court of Appeals issued a nationwide stay of the Clean Water Rule. On appeal, however, the Supreme Court determined that the court of appeals did not have original jurisdiction to review challenges to the 2015 Rule. As such, legal challenges to the rule will proceed in federal district courts. Three federal district courts have stayed the Clean Water Rule in twenty-eight states. Concurrent with the legal challenges, on February 28, 2017, President Trump signed Executive Order 13778, directing the EPA and the Army Corps of Engineers to review the 2015 Rule for consistency with the policy outlined in the Order, and to issue a proposed rule rescinding or revising the 2015 Rule as appropriate and consistent with law. On December 11, 2018, the

EPA and the Army Corps of Engineers announced its proposed new definition of “waters of the United States.” The proposal, once finalized, would replace the 2015 Clean Water Rule.

In 2015, the EPA issued its intent to review the CWA categorical effluent limitation guidelines (“ELG”) for the petroleum refining sector. During 2017, the EPA prepared and issued an information request (“ICR”) requesting significant wastewater and treatment process details from select refineries, seven of which were ours. Responses to the ICR were submitted to the EPA in early 2018. As of late 2018, the EPA is in the process of reviewing the ICR response data submitted and determining the next steps for the ELG review. EPA may also perform sampling of effluent at one or more of our refineries. The EPA has indicated they believe there have been significant changes in the characteristics of waste waters generated within refining operations that warrant the review. Specific targets for the review are the impacts of processing heavier crude oils and the transfer of air pollutants to wastewater when air pollution abatement devices are in use. A similar project, initiated in 2007 for steam electric power generation with similar attributes, resulted in a significant change in the treatment requirements for coal-fired power plants. However, on September 18, 2017, the EPA postponed certain compliance dates while it conducts a rulemaking to revise the ELGs for power plants. The refining sector ELG review has the potential to result in a similar impact. The typical life-cycle for an ELG review from the intent to review to issuance of a final rule that would require upgrades is seven years. The impact of an ELG review cannot be accurately estimated at this time.

Solid Waste

We continue to seek methods to minimize the generation of hazardous wastes in our operations. RCRA establishes standards for the management of solid and hazardous wastes. Besides affecting waste disposal practices, RCRA also addresses the environmental effects of certain past waste disposal operations, the recycling of wastes and the regulation of USTs containing regulated substances.

Pursuant to an order received in 2004 from the San Francisco Bay Regional Water Quality Control Board, we are performing remediation of certain waste management units and completing investigations of the design conditions of certain active wastewater and storm water impoundments at our Martinez refinery. The investigative and remedial costs associated with the 2004 Order could have a material impact on our results of operations. The costs that are estimable and probable at this time have been accrued.

Remediation

We own or operate, or have owned or operated, certain convenience stores and other locations where, during the normal course of operations, releases of refined products from USTs have occurred. Federal and state laws require that contamination caused by such releases at these sites be assessed and remediated to meet applicable standards. Penalties or other sanctions may be imposed for noncompliance. The enforcement of the UST regulations under RCRA has been delegated to the states, which administer their own UST programs. Our obligation to remediate such contamination varies, depending on the extent of the releases and the stringency of the applicable state laws and regulations. A portion of these remediation costs may be recoverable from the appropriate state UST reimbursement funds once the applicable deductibles have been satisfied. We also have ongoing remediation projects at a number of our current and former refinery, terminal and pipeline locations.

Claims under CERCLA and similar state acts have been raised with respect to the clean-up of various waste disposal and other sites. CERCLA is intended to facilitate the clean-up of hazardous substances without regard to fault. Potentially responsible parties for each site include present and former owners and operators of, transporters to and generators of the hazardous substances at the site. Liability is strict and can be joint and several. Because of various factors including the difficulty of identifying the responsible parties for any particular site, the complexity of determining the relative liability among them, the uncertainty as to the most desirable remediation techniques and the amount of damages and clean-up costs and the time period during which such costs may be incurred, we are unable to reasonably estimate our ultimate cost of compliance with CERCLA; however, we do not believe such costs will be material to our business, financial condition, results of operations or cash flows.

Mileage Standards, Renewable Fuels and Other Fuels Requirements

The U.S. Congress passed the Energy Independence and Security Act of 2007 (“EISA”), which, among other things, set a target of 35 miles per gallon for the combined fleet of cars and light trucks in the United States by model year 2020, and contains the RFS2. In August 2012, the EPA and the National Highway Traffic Safety Administration (“NHTSA”) jointly adopted regulations that establish average industry fleet fuel economy standards for passenger cars and light trucks of up to 41 miles per gallon by model year 2021 and average fleet fuel economy standards of up to 49.7 miles per gallon by model year 2025. In 2018, the EPA and the NHTSA jointly proposed the Safer Affordable Fuel-Efficient Vehicles Rules for Model Years 2021-2026, which would propose new Corporate Average Fuel Economy (“CAFE”) standards for model years 2022 through 2026, amend the 2021 model year CAFE standards, amend the EPA’s carbon dioxide emission standards for model years 2021 through 2025, and establish new carbon dioxide emission standards for model year 2026. The EPA’s preferred alternative is to retain the model year 2020 standards for both programs through model year 2026. The standards established by the final regulation may

differ. Additionally, California may establish per its Clean Air Act waiver authority different standards that could apply in multiple states. Higher CAFE standards for cars and light trucks have the potential to reduce demand for our transportation fuels. New or alternative transportation fuels such as compressed natural gas could also pose a competitive threat to our operations.

The RFS2 requires the total volume of renewable transportation fuels sold or introduced annually in the U.S. to reach 26.0 billion gallons in 2018, 28.0 billion gallons in 2019, and increase to 36.0 billion gallons by 2022. Within the total volume of renewable fuel, EISA established an advanced biofuel volume of 11.0 billion gallons in 2018, 13.0 billion gallons in 2019, and increasing to 21.0 billion gallons in 2022. Subsets within the advanced biofuel volume include biomass-based diesel, which was set as at least 1.0 billion gallons in 2014 through 2022 (to be determined by the EPA through rulemaking), and cellulosic biofuel, which was set at 7.0 billion gallons in 2018, 8.5 billion gallons in 2019, and increasing to 16.0 billion gallons in 2022.

On November 30, 2015, the EPA finalized the renewable fuel standards for the years of 2014, 2015 and 2016 as well as the biomass-based diesel standard for 2017. In a legal challenge to the 2014-2016 volumes, the court vacated the total renewable volume for 2016 and remanded to the EPA for reconsideration consistent with the court’s opinion. A remanded rule that increases the 2016 total renewable volume could increase our cost of compliance with the Renewable Fuel Standards and be detrimental to the RIN market. The 2017 and 2018 RFS volumes have also been challenged in court.

On November 30, 2018, the EPA finalized RFS volume requirements for the year 2019, and the biomass-based diesel volume requirement for year 2020. The EPA used its cellulosic waiver authority to reduce the volumes for 2019 from the statutory amounts to the following: 19.92 billion gallons total renewable fuel; 4.92 billion gallons advanced biofuel; and 418 million gallons cellulosic biofuel. The EPA set the biomass-based diesel volume requirement for 2020 at 2.43 billion gallons, which is significantly greater than the statutory floor of 1.0 billion gallons.

The RFS2 is satisfied primarily with ethanol blended into gasoline. Vehicle, regulatory and infrastructure constraints limit the blending of significantly more than 10 percent ethanol into gasoline (“E10”). Since 2016, the volume requirements have resulted in the ethanol content of gasoline exceeding the E10 blendwall, which will require obligated parties to either sell E15 or ethanol flex fuel at levels that exceed historical levels or retire carryover RINs.

We have made investments in infrastructure capable of expanding biodiesel blending capability to help comply with the annually-increasing biodiesel RFS2 requirement by buying and blending biodiesel into our refined diesel product, and by buying needed biodiesel RINs in the EPA-created biodiesel RINs market. On April 1, 2014, we purchased a facility in Cincinnati, Ohio, which currently produces biodiesel, glycerin and other by-products. As a producer of biodiesel, we generate RINs, thereby reducing our reliance on the external RIN market.

In November 2017, the EPA finalized its decision to deny petitions requesting that the point of obligation for the RFS2 be moved to the terminal rack. The EPA’s final decision was challenged in court and should the court decide that EPA’s decision was incorrect and move the point of obligation, we could be subject to increased costs and compliance uncertainties.

In addition to federal renewable fuel standards, certain states have, or are considering, promulgation of state renewable or low carbon fuel standards. For example, California began implementing its Low Carbon Fuel Standard (“LCFS”) in January 2011. In September 2015, the CARB approved the re-adoption of the LCFS, which became effective on January 1, 2016, to address procedural deficiencies in the way the original regulation was adopted. The LCFS was amended again in 2018 with the current version targeting a 20 percent reduction in fuel carbon intensity from a 2010 baseline by 2030.

In sum, the RFS2 has required, and may in the future continue to require, additional capital expenditures or expenses by us to accommodate increased renewable fuels use. We may experience a decrease in demand for refined products due to an increase in combined fleet mileage or due to refined products being replaced by renewable fuels. Demand for our refined products also may decrease as a result of low carbon fuel standard programs or electric vehicle mandates.

On March 3, 2014, the EPA signed the final Tier 3 fuel standards. The final Tier 3 fuel standards require, among other things, a lower annual average sulfur level in gasoline to no more than 10 ppm beginning in calendar year 2017. In addition, gasoline refiners and importers may not exceed a maximum per-gallon sulfur standard of 80 ppm while retailers may not exceed a maximum per-gallon sulfur standard of 95 ppm. From 2014 through 2018, we made approximately $490 million in capital expenditures to comply with these standards, and expect to make approximately $260 million in capital expenditures for these standards in 2019.

Tribal Lands

Various federal agencies, including the EPA and the Department of the Interior, along with certain Native American tribes, promulgate and enforce regulations pertaining to oil and gas operations on Native American tribal lands where we operate. These regulations include such matters as lease provisions, drilling and production requirements, and standards to protect

environmental quality and cultural resources. For example, the EPA has established a preconstruction permitting program for new and modified minor sources throughout Indian country, and new and modified major sources in nonattainment areas in Indian country. In addition, each Native American tribe is a sovereign nation having the right to enforce certain laws and regulations and to grant approvals independent from federal, state and local statutes and regulations. These laws and regulations may increase our costs of doing business on Native American tribal lands and impact the viability of, or prevent or delay our ability to conduct, our operations on such lands.

TRADEMARKS, PATENTS AND LICENSES

Our Marathon trademark is material to the conduct of our refining and marketing operations, and our Speedway and ARCO trademarks are material to the conduct of our retail operations. Additionally, the retail and marketing businesses we acquired in the Andeavor acquisition primarily use the Shell® and Mobil® brands for fuel sales and ampm® and Giant® brands for convenience store merchandise. We currently hold a number of U.S. and foreign patents and have various pending patent applications. Although in the aggregate our patents and licenses are important to us, we do not regard any single patent or license or group of related patents or licenses as critical or essential to our business as a whole. In general, we depend on our technological capabilities and the application of know-how rather than patents and licenses in the conduct of our operations.

EMPLOYEES

We had approximately 60,350 regular full-time and part-time employees as of December 31, 2018, which includes approximately 40,230 employees of our Retail segment.

Approximately 4,780 of our employees are covered by collective bargaining agreements. Of these employees, approximately 1,465 employees at our Galveston Bay, Mandan and Martinez refineries are covered by collective bargaining agreements which were set to expire on January 31, 2019. The parties continue their negotiations toward a new agreement, and are working under rolling extensions. Approximately 425 employees at our Martinez Chemical Plant, our Los Angeles refinery and our Galveston Bay refinery are covered by collective bargaining agreements expiring over the next several months. Approximately 410 hourly employees at Speedway are represented under collective bargaining agreements. The majority of these employees work at certain retail locations in New York and New Jersey under agreements which expire on March 14, 2019 and June 30, 2019, respectively. The remaining Speedway represented employees are drivers in Minnesota under an agreement which expires in 2021. Approximately 300 employees at our St. Paul Park and Gallup refineries are covered by collective bargaining agreements scheduled to expire in 2020. Approximately 1,620 employees at our Anacortes, Canton, Catlettsburg, Los Angeles, and Salt Lake City refineries are covered by collective bargaining agreements that are due to expire in 2022. The remaining 560 hourly represented employees are covered by collective bargaining agreements with expiration dates ranging from 2021 to 2024.

Executive and Corporate Officers of the Registrant

The executive and corporate officers of MPC are as follows:

Name		Age as of February 1, 2019		Position with MPC
Gary R. Heminger		65		Chairman and Chief Executive Officer
Gregory J. Goff		62		Executive Vice Chairman
Molly R. Benson(a)		52		Vice President, Chief Securities, Governance & Compliance Officer and Corporate Secretary
Raymond L. Brooks		58		Executive Vice President, Refining
C. Tracy Case(a)		58		Senior Vice President, Western Refining Operations
Suzanne Gagle		53		General Counsel
Timothy T. Griffith		49		Senior Vice President and Chief Financial Officer
David R. Heppner(a)		52		Vice President, Commercial and Business Development
Richard A. Hernandez(a)		59		Senior Vice President, Eastern Refining Operations
Rick D. Hessling(a)		52		Senior Vice President, Crude Oil Supply and Logistics
Thomas Kaczynski		57		Vice President, Finance and Treasurer
Kristina A. Kazarian(a)		36		Vice President, Investor Relations
Anthony R. Kenney		65		President, Speedway LLC
Fiona C. Laird(a)		57		Chief Human Resources Officer
D. Rick Linhardt(a)		60		Vice President, Tax
Brian K. Partee(a)		45		Senior Vice President, Marketing
Glenn M. Plumby(a)		59		Senior Vice President and Chief Operating Officer, Speedway LLC
John J. Quaid		47		Vice President and Controller
David R. Sauber(a)		55		Senior Vice President, Labor Relations, Operations, Health and Administrative Services
Donald C. Templin		55		President, Refining, Marketing and Supply
Karma M. Thomson(a)		51		Vice President, Corporate Affairs
Donald W. Wehrly(a)		59		Vice President and Chief Information Officer
David L. Whikehart(a)		59		Senior Vice President, Light Products, Supply and Logistics
James R. Wilkins(a)		52		Vice President, Environment, Safety and Security

(a)	Corporate officer.

Mr. Heminger is Chairman of the Board and Chief Executive Officer. He has served as the Chairman of the Board since April 2016 and as Chief Executive Officer since June 2011. Mr. Heminger also served as President from July 2011 until June 2017.

Mr. Goff was appointed Executive Vice Chairman effective October 2018. Prior to this appointment, Mr. Goff was President and Chief Executive Officer of Andeavor beginning in May 2010 and Chairman of its Board of Directors beginning in December 2014.

Ms. Benson was appointed Vice President, Chief Compliance Officer and Corporate Secretary in March 2016 and Chief Securities and Governance Officer in May 2018. Prior to her appointment in 2016, Ms. Benson was Assistant General Counsel, Corporate and Finance beginning in April 2012.

Mr. Brooks was appointed Executive Vice President, Refining effective October 2018. Prior to this appointment, Mr. Brooks was Senior Vice President, Refining beginning in March 2016. Previously, Mr. Brooks served as General Manager of the Galveston Bay refinery beginning in February 2013, and General Manager of the Robinson refinery beginning in 2010.

Mr. Case was appointed Senior Vice President, Western Refining Operations effective October 2018. Prior to this appointment, Mr. Case was General Manager of the Garyville refinery beginning in December 2014. Previously, Mr. Case served as General Manager of the Detroit refinery beginning in June 2010.

Ms. Gagle was appointed General Counsel in March 2016. Prior to this appointment, Ms. Gagle was Assistant General Counsel, Litigation and Human Resources beginning in April 2011.

Mr. Griffith was appointed Senior Vice President and Chief Financial Officer in March 2015. Prior to this appointment, Mr. Griffith served as Vice President, Finance and Investor Relations, and Treasurer beginning in January 2014. Previously, Mr. Griffith was Vice President of Finance and Treasurer beginning in August 2011.

Mr. Heppner was appointed Vice President, Commercial and Business Development effective October 2018. Prior to this appointment, Mr. Heppner was Senior Vice President of Engineering Services and Corporate Support of Speedway LLC beginning in September 2014. Previously, Mr. Heppner served as Director, Wholesale Marketing beginning in January 2010.

Mr. Hernandez was appointed Senior Vice President, Eastern Refining Operations effective October 2018. Prior to this appointment, Mr. Hernandez was General Manager of the Galveston Bay refinery beginning in February 2016. Previously,

Mr. Hernandez served as the General Manager of the Catlettsburg refinery beginning in June 2013.

Mr. Hessling was appointed Senior Vice President, Crude Oil Supply and Logistics effective October 2018. Prior to this appointment, Mr. Hessling was Manager, Crude Oil & Natural Gas Supply and Trading beginning in September 2014. Previously, Mr. Hessling served as Crude Oil Logistics & Analysis Manager beginning in July 2011.

Mr. Kaczynski was appointed Vice President, Finance and Treasurer in August 2015. Prior to this appointment, Mr. Kaczynski was Vice President and Treasurer of Goodyear Tire and Rubber Company, one of the world’s largest tire manufacturers, beginning in 2014. Previously, Mr. Kaczynski served as Vice President, Investor Relations, of Goodyear Tire and Rubber Company beginning in 2013.

Ms. Kazarian was appointed Vice President, Investor Relations in April 2018. Prior to this appointment, Ms. Kazarian was Managing Director and head of the MLP, Midstream and Refining Equity Research teams at Credit Suisse, a global investment bank and financial services company, beginning in September 2017. Previously, Ms. Kazarian worked at Deutsche Bank, a global investment bank and financial services company, as Managing Director of MLP, Midstream and Natural Gas Equity Research beginning in September 2014, and as an analyst specializing on various energy industry subsectors with Fidelity Management & Research Company, a privately held investment manager, beginning in 2005.

Mr. Kenney has served as President of Speedway LLC since August 2005.

Ms. Laird was appointed Chief Human Resources Officer effective October 2018. Prior to this appointment, Ms. Laird was Chief Human Resources Officer at Andeavor beginning in February 2018. Previously, Ms. Laird was the Chief Human Resources and Communications Officer for Newell Brands, a global consumer goods company, beginning in May 2016 and Executive Vice President, Human Resources for Unilever, a global consumer goods company, beginning in July 2011.

Mr. Linhardt was appointed Vice President, Tax in February 2018. Prior to this appointment, Mr. Linhardt served as Director of Tax beginning in June 2017. Previously, Mr. Linhardt served as Manager of Tax Compliance beginning in May 2013.

Mr. Partee was appointed Senior Vice President, Marketing effective October 2018. Prior to this appointment, Mr. Partee served as Vice President, Business Development beginning in February 2018. Previously, Mr. Partee was Director of Business Development beginning in January 2017, Manager of Crude Oil Logistics beginning in September 2014 and Vice President, Business Development and Franchise at Speedway beginning in November 2012.

Mr. Plumby was named Senior Vice President and Chief Operating Officer, Speedway LLC in January 2018 and was appointed an officer of MPC in February 2019. Previously, Mr. Plumby was Senior Vice President of Operations of Speedway LLC beginning in September 2013 and Vice President of Operations of Speedway LLC beginning in December 2010.

Mr. Quaid was appointed Vice President and Controller in June 2014. Prior to this appointment, Mr. Quaid was Vice President of Iron Ore at United States Steel Corporation (“U.S. Steel”), an integrated steel producer, beginning in January 2014. Previously, Mr. Quaid served as Vice President and Treasurer at U.S. Steel beginning in August 2011.

Mr. Sauber was appointed Senior Vice President, Labor Relations, Operations, Health and Administrative Services effective October 2018. Prior to this appointment, Mr. Sauber was Senior Vice President, Human Resources, Health and Administrative Services beginning in January 2018, and Vice President, Human Resources and Labor Relations beginning February 2017. Previously, Mr. Sauber was Vice President, Human Resources Policy, Benefits and Services of Shell Oil Company, a global energy and petrochemical company, beginning in 2013.

Mr. Templin was appointed President, Refining, Marketing and Supply effective October 2018. Prior to this appointment,

Mr. Templin served as President beginning in July 2017; Executive Vice President beginning in January 2016; Executive Vice President, Supply, Transportation and Marketing beginning in March 2015; and Senior Vice President and Chief Financial Officer beginning in June 2011.

Ms. Thomson was appointed Vice President, Corporate Affairs effective October 2018. Prior to this appointment, Ms. Thomson served as Vice President of Andeavor Logistics beginning in June 2017. Previously, at Andeavor, Ms. Thomson served as Vice President, Salt Lake City refinery beginning in October 2012.

Mr. Wehrly was appointed Vice President and Chief Information Officer effective June 2011.

Mr. Whikehart was appointed Senior Vice President, Light Products, Supply and Logistics effective October 2018. Prior to this appointment, Mr. Whikehart served as Vice President, Environment, Safety and Corporate Affairs effective February 2016. Previously, Mr. Whikehart served as Vice President, Corporate Planning, Government & Public Affairs beginning in January 2016, and Director, Product Supply and Optimization beginning in March 2011.

Mr. Wilkins was appointed Vice President, Environment, Safety and Security effective October 2018. Prior to this appointment, Mr. Wilkins was Director, Environment, Safety, Security and Product Quality beginning February 2016. Previously,

Mr. Wilkins served as Director, Refining Environmental, Safety, Security and Process Safety Management beginning in June 2013.

Available Information

General information about MPC, including Corporate Governance Principles and Charters for the Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee, can be found at

www.marathonpetroleum.com by selecting “Investors” under “Corporate Governance” and “Board of Directors”. In addition, our Code of Business Conduct and Code of Ethics for Senior Financial Officers are also available in this same location. We will post on our website any amendments to, or waivers from, either of our codes requiring disclosure under applicable rules within four business days of the amendment or waiver.

MPC uses its website, www.marathonpetroleum.com, as a channel for routine distribution of important information, including news releases, analyst presentations, financial information and market data. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as any amendments and exhibits to those reports, are available free of charge through our website as soon as reasonably practicable after the reports are filed or furnished with the SEC. These documents are also available in hard copy, free of charge, by contacting our Investor Relations office. In addition, our website allows investors and other interested persons to sign up to automatically receive email alerts when we post news releases and financial information on our website. Information contained on our website is not incorporated into this Annual Report on Form 10-K or other securities filings.