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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
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| ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2019
OR
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| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 001-35054
Marathon Petroleum Corporation
(Exact name of registrant as specified in its charter)
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| Delaware | | 27-1284632 |
| (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
539 South Main Street**,** Findlay**,** OH 45840-3229
(Address of principal executive offices) (Zip code)
(419) 422-2121
(Registrant’s telephone number, including area code)
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| Securities Registered pursuant to Section 12(b) of the Act | | |
| Title of each class | Trading symbol(s) | Name of each exchange on which registered |
| Common Stock, par value $.01 | MPC | New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑
Indicate 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 during the preceding 12 months and (2) has been subject to such filing requirements for the 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 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for 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, accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 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 registrant has elected not to use the extended transition period for complying with any new or revised 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 Act). Yes ☐ No ☑
The aggregate market value of Common Stock held by non-affiliates as of June 30, 2019 was approximately $36.7 billion. This amount is based on the closing price of the registrant’s Common Stock on the New York Stock Exchange on June 28, 2019. Shares of Common Stock held by executive officers and directors of the registrant are not included in the computation. The registrant, solely for the purpose of this required presentation, has deemed its directors and executive officers to be affiliates.
There were 649,503,967 shares of Marathon Petroleum Corporation Common Stock outstanding as of February 17, 2020.
Documents Incorporated By Reference
Portions of the registrant’s proxy statement relating to its 2020 Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934, are incorporated by reference to the extent set forth in Part III, Items 10-14 of this Report.
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MARATHON PETROLEUM CORPORATION
Unless otherwise stated or the context otherwise indicates, all references in this Annual Report on Form 10-K to “MPC,” “us,” “our,” “we” or “the Company” mean Marathon Petroleum Corporation and its consolidated subsidiaries.
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GLOSSARY OF TERMS
Throughout this report, the following company or industry specific terms and abbreviations are used:
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| ASC | Accounting Standards Codification |
| ANS | Alaskan North Slope crude oil, an oil index benchmark price |
| ASU | Accounting Standards Update |
| ASR | Accelerated share repurchase |
| ATB | Articulated tug barges |
| barrel | One stock tank barrel, or 42 United States gallons liquid volume, used in reference to crude oil or other liquid hydrocarbons. |
| bcf/d | One billion cubic feet per day |
| CARB | California Air Resources Board |
| CARBOB | California Reformulated Gasoline Blendstock for Oxygenate Blending |
| CBOB | Conventional Blending for Oxygenate Blending |
| DEI | Designated Environmental Incidents |
| EBITDA (a non-GAAP financial measure) | Earnings Before Interest, Tax, Depreciation and Amortization |
| EPA | United States Environmental Protection Agency |
| FASB | Financial Accounting Standards Board |
| GAAP | Accounting principles generally accepted in the United States |
| IDR | Incentive Distribution Right |
| LCM | Lower of cost or market |
| LIBOR | London Interbank Offered Rate |
| LIFO | Last in, first out |
| LLS | Louisiana Light Sweet crude oil, an oil index benchmark price |
| mbpd | Thousand barrels per day |
| mbpcd | Thousand barrels per calendar day |
| Mcf | One thousand cubic feet of natural gas |
| mmbpcd | Million barrels per calendar day |
| MMcf/d | One million cubic feet of natural gas per day |
| MMBtu | One million British thermal units per day |
| NYMEX | New York Mercantile Exchange |
| NYSE | New York Stock Exchange |
| NGL | Natural gas liquids, such as ethane, propane, butanes and natural gasoline |
| OSHA | United States Occupational Safety and Health Administration |
| OTC | Over-the-Counter |
| ppb | Parts per billion |
| ppm | Parts per million |
| RFS2 | Revised Renewable Fuel Standard program, as required by the Energy Independence and Security Act of 2007 |
| RIN | Renewable Identification Number |
| SEC | United States Securities and Exchange Commission |
| STAR | South Texas Asset Repositioning |
| TCJA | Tax Cuts and Jobs Act of 2017 |
| ULSD | Ultra-low sulfur diesel |
| USGC | U.S. Gulf Coast |
| UST | Underground storage tank |
| VIE | Variable interest entity |
| VPP | Voluntary Protection Program |
| WTI | West Texas Intermediate crude oil, an oil index benchmark price |
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DISCLOSURES REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K, particularly Item 1. Business, Item 1A. Risk Factors, Item 3. Legal Proceedings, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 7A. Quantitative and Qualitative Disclosures about Market Risk, includes forward-looking statements that are subject 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,” “imply,” “intend,” “may,” “objective,” “opportunity,” “outlook,” “plan,” “policy,” “position,” “potential,” “predict,” “priority,” “project,” “proposition,” “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:
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| • | future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or earnings per share; |
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| • | future levels of capital, environmental or maintenance expenditures, general and administrative and other expenses; |
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| • | the success or timing of completion of ongoing or anticipated capital or maintenance projects; |
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| • | business strategies, growth opportunities and expected investment; |
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| • | consumer demand for refined products, natural gas and NGLs; |
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| • | the timing and amount of any future common stock repurchases; and |
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| • | the anticipated effects of actions of third parties such as competitors, activist investors or federal, foreign, state or local regulatory authorities or plaintiffs in litigation. |
Our forward-looking statements are not guarantees of future performance, and you should not rely unduly on them, as they involve risks, uncertainties and assumptions that we cannot predict. Material differences between actual results and any future performance suggested in our forward-looking statements could result from a variety of factors, including the following:
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| • | our ability to successfully complete the planned Speedway separation within the expected timeframe or at all; |
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| • | our ability to achieve the strategic and other objectives related to our Midstream review; |
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| • | the risk that the cost savings and any other synergies from the Andeavor transaction may not be fully realized or may take longer to realize than expected; |
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| • | risks relating to any unforeseen liabilities of Andeavor; |
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| • | risks related to the acquisition of Andeavor Logistics LP (“ANDX”) by MPLX LP (“MPLX”); |
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| • | our ability to complete any divestitures on commercially reasonable terms and within the expected timeframe, and the effects of any such divestitures on the business, financial condition, results of operations and cash flows; |
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| • | the effect of restructuring or reorganization of business components; |
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| • | the regional, national and worldwide availability and pricing of refined products, crude oil, natural gas, NGLs and other feedstocks; |
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| • | our ability to manage disruptions in credit markets or changes to credit ratings; |
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| • | the reliability of processing units and other equipment; |
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| • | the adequacy of capital resources and liquidity, including the availability of sufficient cash flow to execute business plans and to effect any share repurchases or dividend increases, including within the expected timeframe; |
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| • | the potential effects of judicial or other proceedings on the business, financial condition, results of operations and cash flows; |
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| • | continued or further volatility in and degradation of general economic, market, industry or business conditions; |
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| • | compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations, including the cost of compliance with the Renewable Fuel Standard, and enforcement actions initiated thereunder; |
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| • | adverse market conditions or other similar risks affecting MPLX; |
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| • | refining industry overcapacity or under capacity; |
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| • | changes in producer customers’ drilling plans or in volumes of throughput of crude oil, natural gas, NGLs, refined products or other hydrocarbon-based products; |
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| • | changes in the cost or availability of third-party vessels, pipelines, railcars and other means of transportation for crude oil, natural gas, NGLs, feedstocks and refined products; |
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| • | the price, availability and acceptance of alternative fuels and alternative-fuel vehicles and laws mandating such fuels or vehicles; |
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| • | political and economic conditions in nations that consume refined products, natural gas and NGLs, including the United States and Mexico, and in crude oil producing regions, including the Middle East, Africa, Canada and South America; |
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| • | actions taken by our competitors, including pricing adjustments, expansion of retail activities, the expansion and retirement of refining capacity and the expansion and retirement of pipeline capacity, processing, fractionation and treating facilities in response to market conditions; |
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| • | completion of pipeline projects within the United States; |
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| • | changes in fuel and utility costs for our facilities; |
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| • | accidents or other unscheduled shutdowns affecting our refineries, machinery, pipelines, processing, fractionation and treating facilities or equipment, or those of our suppliers or customers; |
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| • | acts of war, terrorism or civil unrest that could impair our ability to produce refined products, receive feedstocks or to gather, process, fractionate or transport crude oil, natural gas, NGLs or refined products; |
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| • | adverse changes in laws including with respect to tax and regulatory matters; |
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| • | political pressure and influence of environmental groups 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 or other hydrocarbon-based products; |
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| • | labor and material shortages; |
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| • | the costs, disruption and diversion of management’s attention associated with campaigns commenced by activist investors; and |
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| • | the other factors described in Item 1A. Risk Factors. |
We undertake no obligation to update any forward-looking statements except to the extent required by applicable law.
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PART I
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