FINDLAY, Ohio, Jan 29, 2014 - (ACN Newswire) - Marathon Petroleum Corporation (NYSE: MPC) today reported 2013 fourth-quarter earnings of $626 million, or $2.07 per diluted share, compared with $755 million, or $2.24 per diluted share, in the fourth quarter of 2012. For the fourth quarter of 2013, earnings adjusted for special items were $633 million, or $2.10 per diluted share, compared with earnings adjusted for special items of $760 million, or $2.26 per diluted share, in the fourth quarter of 2012.
Earnings were $2.11 billion, or $6.64 per diluted share, for the full-year 2013, compared with $3.39 billion, or $9.89 per diluted share, in 2012. For 2013, earnings adjusted for special items were $2.17 billion, or $6.84 per diluted share, compared with $3.35 billion, or $9.79 per diluted share, in 2012.
-- Fourth-quarter adjusted earnings of $633 million ($2.10 per diluted share); full-year adjusted earnings of $2.17 billion ($6.84 per diluted share)
-- Midstream equity investments in Sandpiper and Southern Access Extension pipelines announced
-- Record annual Speedway financial performance; expanded marketing footprint
-- $578 million of capital returned to shareholders in fourth quarter; $3.28 billion returned during 2013
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Three Months Ended Year Ended
December 31 December 31
(In millions, except per diluted share data)
2013 2012 2013 2012
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Earnings(a) $ 626 $ 755 $ 2,112 $ 3,389
Adjustments for special items (net of taxes):
Minnesota assets sale settlement gain
- - - (117)
Pension settlement expenses 7 5 61 80
Earnings adjusted for special items(b)
$ 633 $ 760 $ 2,173 $ 3,352
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Earnings per diluted share $ 2.07 $ 2.24 $ 6.64 $ 9.89
Adjusted earnings per diluted share
$ 2.10 $ 2.26 $ 6.84 $ 9.79
Weighted average shares - diluted 301 336 317 342
Revenues and other income $ 24,932 $ 20,711 $ 100,254 $ 82,492
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(a) References to earnings refer to net income attributable to MPC. See "References to Earnings" note below.
(b) Earnings adjusted for special items is a financial measure not in accordance with generally accepted accounting principles (GAAP) and should not be considered a substitute for earnings as determined in accordance with accounting principles generally accepted in the United States. See below for further discussion of earnings adjusted for special items.
"MPC's fourth quarter was a strong finish to a year in which we earned in excess of $2 billion," said President and Chief Executive Officer Gary R. Heminger. "Our 2013 earnings reflect our ability to consistently meet energy market needs through our logistical flexibility and relentless focus on top-tier operational performance."
Heminger said that in 2013 MPC continued to strengthen its ability to capitalize on North America's shifting energy landscape. "In addition to investing in our transportation and retail segments, we completed our acquisition of the Galveston Bay refinery in February and continued to make margin-enhancing investments in our refining system," Heminger said. "While refining will remain our largest source of earnings and cash flow, we will augment this through expanded investments in midstream and retail in the years ahead."
In 2013, MPC increased its emphasis on these more stable earnings sources, Heminger said. "We executed our first drop-down of assets to MPLX LP, the master limited partnership we created in late 2012, and announced planned equity investments in Enbridge Energy Partners L.P.'s Sandpiper and Southern Access Extension pipeline projects, which will enable MPC to participate in the transportation of increasing volumes of North American crude oil into our Midwestern refining region," he noted. "We also expanded the marketing footprint of Speedway, our retail subsidiary, to nine states from seven, and we will continue leveraging Speedway's strong business model to pursue growth opportunities within the convenience store industry."
Looking to the future, Heminger pointed out that MPC's capital expenditures will be focused on growing the midstream and retail businesses over the 2014-2016 period. He expects these midstream and retail capital expenditures to total approximately $4 billion, a $2.3 billion increase over the previous three-year period.
While investing in the company's growth, Heminger noted that MPC also returned $126 million to shareholders in the form of dividends and $452 million in share repurchases during the fourth quarter, and $484 million in dividends and $2.8 billion in share repurchases during full-year 2013. "This continues our commitment to balance investments in the business with return of capital to our shareholders," Heminger commented.
Segment Results
Total income from operations was $1.01 billion in the fourth quarter of 2013 and $3.43 billion for full-year 2013, compared with $1.19 billion and $5.35 billion in the fourth quarter of 2012 and full-year 2012, respectively.
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Three Months Ended Year Ended
December 31 December 31
(In millions) 2013 2012 2013 2012
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Income from Operations by Segment
Refining & Marketing $ 971 $ 1,139 $ 3,206 $ 5,098
Speedway 83 77 375 310
Pipeline Transportation 47 72 210 216
Items not allocated to segments:
Corporate and other unallocated items
(81) (91) (271) (336)
Minn. assets sale settlement gain - - - 183
Pension settlement expenses (12) (8) (95) (124)
Income from operations $ 1,008 $ 1,189 $ 3,425 $ 5,347
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Refining & Marketing
Refining & Marketing segment income from operations was $971 million in the fourth quarter of 2013 and $3.21 billion for full-year 2013, compared with $1.14 billion and $5.1 billion in the fourth quarter of 2012 and full-year 2012, respectively.
The $168 million decrease in Refining & Marketing segment income from operations for the fourth quarter of 2013 compared to the fourth quarter of 2012 was primarily due to narrower crude oil differentials and higher turnaround costs, partially offset by higher crack spreads, more favorable net product price realizations and higher sales volumes.
The $1.89 billion decrease in Refining & Marketing segment income from operations for the full-year 2013 compared to 2012 was primarily due to narrower crude oil differentials and lower net product price realizations, partially offset by higher sales volumes.
The West Texas Intermediate/Light Louisiana Sweet (LLS) crude oil differentials narrowed by $17.72 per barrel when compared to the fourth quarter of 2012 and by $8.19 per barrel when compared to the full-year 2012. In addition, the sweet/sour crude oil differentials narrowed by approximately $4 per barrel for the quarter and full-year 2013. The Chicago and U.S. Gulf Coast LLS 6-3-2-1 blended crack spread increased to $6.82 per barrel and $6.97 per barrel for the fourth quarter and full-year 2013, respectively, from $3.80 per barrel and $6.71 per barrel for the fourth quarter and full-year 2012.
Refined product sales volume was 2.14 million barrels per day (bpd) and 2.08 million bpd for the fourth quarter and full-year 2013, respectively, compared with 1.69 million bpd and 1.6 million bpd for the fourth quarter and full-year 2012. Higher refinery throughputs and sales volumes were attributable in large part to the Galveston Bay refinery, which MPC acquired on Feb. 1, 2013.
[NOTE: Starting in the fourth quarter of 2013, direct operating costs are no longer included in the calculated Refining & Marketing gross margin, and this statistic is now based on total refinery throughput. All prior periods presented have been recalculated to reflect a consistent approach. In addition, select refinery throughput, refined product yield and direct operating cost information is now being reported prospectively both on a consolidated and regional basis.]
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Three Months Ended Year Ended
December 31 December 31
(mbpd = thousands of barrels per day)
2013 2012 2013 2012
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Key Refining & Marketing Statistics
Refinery throughputs (mbpd)
Crude oil refined 1,547 1,242 1,589 1,195
Other charge and blendstocks 247 206 213 168
Total 1,794 1,448 1,802 1,363
Refined product sales volume (mbpd)(a)
2,143 1,686 2,075 1,599
Refining & Marketing gross margin ($/barrel)(b)
$ 15.69 $ 16.34 $ 13.24 $ 17.85
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(a) Includes intersegment sales.
(b) Sales revenue less cost of refinery inputs and purchased products, divided by total refinery throughputs. Starting in the fourth quarter of 2013, direct operating costs are no longer included in the Refining & Marketing gross margin and the gross margin is calculated based on total refinery throughput. All prior periods presented have been recalculated to reflect a consistent approach.
Speedway
Speedway segment income from operations was $83 million in the fourth quarter of 2013 and $375 million for full-year 2013, compared with $77 million in the fourth quarter of 2012 and $310 million for full-year 2012, representing record annual earnings for the business. The increase in segment income for the fourth quarter of 2013 compared to the fourth quarter of 2012 is primarily the result of a higher merchandise gross margin, partially offset by a decrease in the gasoline and distillate gross margin. The increase for full-year 2013 compared to full-year 2012 is primarily due to higher gasoline and distillate gross margins and a higher merchandise gross margin, partially offset by higher operating expenses related to an increase in the number of convenience stores.
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Three Months Ended Year Ended
December 31 December 31
2013 2012 2013 2012
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Key Speedway Statistics
Convenience stores at period-end 1,478 1,464
Gasoline and distillate sales (millions of gallons)
817 786 3,146 3,027
Gasoline and distillate gross margin ($/gallon)(a)
$ 0.1322 $ 0.1424 $ 0.1441 $ 0.1318
Merchandise sales (in millions) $ 775 $ 761 $ 3,135 $ 3,058
Merchandise gross margin (in millions)
$ 205 $ 196 $ 825 $ 795
Same store gasoline sales volume (period over period)
0.2% (0.2)% 0.5% (0.8)%
Same store merchandise sales (period over period)(b)
5.6% 4.0% 4.3% 7.0%
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(a) The price paid by consumers less the cost of refined products, including transportation, consumer excise taxes and bankcard processing fees, divided by gasoline and distillate sales volume.
(b) Excludes cigarettes.
Pipeline Transportation
Pipeline Transportation segment income from operations, including 100 percent of MPLX LP's operations, was $47 million in the fourth quarter of 2013 and $210 million for full-year 2013, compared with $72 million and $216 million for the fourth quarter and full-year 2012, respectively. The decrease in Pipeline Transportation segment income for the fourth quarter of 2013 compared to the fourth quarter of 2012 was primarily due to a decrease in pipeline equity affiliate income and higher depreciation and operating expenses. The decrease in full-year 2013 segment income from operations was primarily due to higher operating expenses and depreciation and lower pipeline equity affiliate income, partially offset by higher transportation revenue.
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Three Months Ended Year Ended
December 31 December 31
2013 2012 2013 2012
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Key Pipeline Transportation Statistics
Pipeline throughput (mbpd)(a)
Crude oil pipelines 1,198 1,309 1,280 1,190
Refined product pipelines 855 1,003 911 980
Total 2,053 2,312 2,191 2,170
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(a) On owned common-carrier pipelines, excluding equity method investments.
Corporate and Special Items
Corporate and other unallocated expenses of $81 million in the fourth quarter of 2013 and $271 million for full-year 2013 were $10 million lower than in the fourth quarter of 2012 and $65 million lower than in the full-year 2012. The decreases were primarily due to lower unallocated employee benefit expenses and lower employee incentive compensation expenses.
During the fourth quarter of 2013 and full-year 2013, MPC recorded pretax pension settlement expenses of $12 million and $95 million, respectively, resulting from the level of employee lump-sum retirement distributions occurring during the year. This compares to pretax pension settlement expenses of $8 million and $124 million for the fourth quarter and full-year 2012, respectively.
Strong Financial Position and Liquidity
On Dec. 31, 2013, the company had $2.3 billion in cash and cash equivalents, an unused $2.5 billion revolving credit agreement and a $1.3 billion unused trade receivables securitization facility that was increased and extended in the fourth quarter. The company's credit facilities and cash position should provide it with sufficient flexibility to meet its day-to-day operational needs and continue its balanced approach to investing in the business and returning capital to shareholders. As of Dec. 31, 2013, the company's strong financial position was reflected by its debt-to-total capital ratio of 23 percent.
Conference Call
At 10 a.m. EST today, MPC will hold a webcast and conference call to discuss the earnings release and provide an update on company operations. Interested parties may listen to the conference call on MPC's website at http://www.marathonpetroleum.com by clicking on the "2013 Fourth-Quarter Financial Results" link. Replays of the conference call will be available on the company's website through Wednesday, Feb. 12. Financial information and other investor-related material will also be available online prior to the webcast and conference call at http://ir.marathonpetroleum.com in the Quarterly Investor Packet.
About Marathon Petroleum Corporation
MPC is the nation's fourth-largest refiner, with a crude oil refining capacity of approximately 1.7 million barrels per calendar day in its seven-refinery system. Marathon brand gasoline is sold through approximately 5,200 independently owned retail outlets across 18 states. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's fourth-largest convenience store chain, with approximately 1,480 convenience stores in nine states. MPC also owns, leases or has ownership interests in approximately 8,300 miles of pipeline. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. MPC's fully integrated system provides operational flexibility to move crude oil, feedstocks and petroleum-related products efficiently through the company's distribution network in the Midwest, Southeast and Gulf Coast regions. For additional information about the company, please visit our website at http://www.marathonpetroleum.com.
Investor Relations Contacts:
Beth Hunter +1-419-421-2559
Geri Ewing +1-419-421-2071
Media Contacts:
Angelia Graves +1-419-421-2703
Jamal Kheiry +1-419-421-3312
References to Earnings
References to earnings mean net income attributable to MPC from the statements of income. Unless otherwise indicated, references to earnings, earnings adjusted for special items and earnings per share are MPC's share after excluding amounts attributable to noncontrolling interests.
Non-GAAP Financial Information
In addition to earnings determined in accordance with GAAP, MPC has provided supplemental "earnings adjusted for special items," a non-GAAP financial measure that facilitates comparisons to earnings forecasts prepared by stock analysts and other third parties. Such forecasts generally exclude the effects of items that are considered non-recurring, are difficult to predict or to measure in advance or that are not directly related to MPC's ongoing operations. A reconciliation between GAAP earnings and "earnings adjusted for special items" is provided in a table on page 1 of this release. "Earnings adjusted for special items" should not be considered a substitute for earnings as reported in accordance with GAAP. We believe certain investors use "earnings adjusted for special items" to evaluate MPC's financial performance between periods. Management may also use "earnings adjusted for special items" to compare MPC's performance to certain competitors.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws. These forward-looking statements relate to, among other things, MPC's expectations, estimates and projections concerning MPC business and operations. You can identify forward-looking statements by words such as "anticipate," "believe," "estimate," "expect," "forecast," "project," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond MPC's control and are difficult to predict. Factors that could cause actual results to differ materially from those in the forward-looking statements include: volatility in and/or degradation of market and industry conditions; the availability and pricing of crude oil and other feedstocks; slower growth in domestic and Canadian crude supply; completion of pipeline capacity to areas outside the U.S. Midwest; consumer demand for refined products; transportation logistics; the reliability of processing units and other equipment; our ability to successfully implement growth opportunities; impacts from our repurchases of shares of MPC common stock under our share repurchase authorizations, including the timing and amounts of any common stock repurchases; state and federal environmental, economic, health and safety, energy and other policies and regulations, including the cost of compliance with the Renewable Fuel Standard; other risk factors inherent to our industry; and the factors set forth under the heading "Risk Factors" in MPC's Annual Report on Form 10-K for the year ended Dec. 31, 2012, filed with the Securities and Exchange Commission (SEC). In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here or in MPC's Form 10-K could also have material adverse effects on forward-looking statements. Copies of MPC's Form 10-K are available on the SEC website, MPC's website at http://ir.marathonpetroleum.com or by contacting MPC's Investor Relations office.
MPC 4Q & Full-Year 2013 Results: http://hugin.info/147922/R/1757642/594169.pdf
This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Marathon Petroleum Corporation via Globenewswire
Topic: Earnings
Source: Marathon Petroleum Corporation
https://www.acnnewswire.com
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