Marathon Petroleum Company
2.8.2011 14:43:36 CEST | Hugin | Pressemeddelelse
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Marathon Petroleum Reports Second Quarter Results
Oil & GasOil & GasOil & Gas Producers
Economy, Business And Finance
Energy And ResourceOil And Gas - Downstream Activities
* Spin-off complete
* Strong balance sheet with financing in place
* Refining & Marketing segment income of $1.26 billion up from $590 million
* Detroit Heavy Oil Upgrade Project on budget and on schedule
FINDLAY, Ohio, Aug. 2, 2011 - Marathon Petroleum Corporation (NYSE: MPC), an
independent refining, marketing and transportation company spun off from
Marathon Oil Corporation (NYSE: MRO) on June 30, 2011, today reported second
quarter net income of $802 million, or $2.24 per diluted share, compared with
net income of $405 million, or $1.13 per diluted share, in the second quarter of
2010. For the second quarter of 2011, net income adjusted for special items was
$819 million, or $2.29 per diluted share, compared with net income adjusted for
special items of $422 million, or $1.18 per diluted share, for the second
quarter of 2010.
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Three Months Ended
June 30
(In millions, except per diluted share data) 2011 2010
-------------------------------------------------------------------------------
Net income $ 802 $ 405
Adjustments for special items (net of taxes):
Impairments - 17
Income tax law changes 17 -
Net income adjusted for special items(a) $ 819 $ 422
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Net income - per diluted share $ 2.24 $ 1.13
Adjusted net income - per diluted share $ 2.29 $ 1.18
Revenues and other income $ 20,794 $ 15,825
Weighted average shares - diluted 358 358
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a. Net income adjusted for special items is a non-GAAP financial measure and
should not be considered a substitute for net income as determined in
accordance with accounting principles generally accepted in the United
States. See below for further discussion of net income adjusted for special
items.
"We continued to benefit in the second quarter from wider differentials between
West Texas Intermediate and Light Louisiana Sweet, and between sweet and sour
crudes," said President and Chief Executive Officer Gary R. Heminger. "In
addition, our Garyville major expansion project, which we completed late in
2009, continues to exceed our original expectations and contributed to the
strong financial performance we achieved in the second quarter of 2011. With
over 50 percent of our crude refining capacity in the mid-continent, we believe
MPC is well positioned to continue benefitting from advantaged feedstock
acquisition costs, especially if the growth in domestic and Canadian crude
supply exceeds the logistical systems needed to move the new production to
consuming markets."
"The spin-off of MPC from Marathon Oil Corporation was the right transaction at
the right time," Heminger added. "As an independent company with a strong
financial position and financing in place, our objective is to selectively
pursue new growth opportunities while exercising financial discipline to
maintain our investment grade profile."
Looking ahead, Heminger said the company is optimistic about its future. "Not
only should we continue to benefit from the approximately $3.9 billion
investment we recently made in our Garyville, Louisiana refinery, but our $2.2
billion Detroit Heavy Oil Upgrade Project (DHOUP) continues to progress on-
budget and on-time, with a scheduled completion in the second half of 2012. As
of June 30, 2011, the project was approximately 63 percent complete. When
completed, DHOUP should allow us to process an incremental 80,000 bpd of heavy
Canadian crude and increase our Detroit crude oil refining capacity
approximately 15 percent to 120,000 bpd. Finally, we are also optimistic about
growth prospects for our Speedway® retail operations and Marathon-branded jobber
stations."
Segment Results
Total segment income from operations was $1,394 million in the second quarter of
2011, compared with $721 million in the second quarter of 2010.
----------------------------------------------------------------------------
Three Months Ended
June 30
(In millions) 2011 2010
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Refining & Marketing $ 1,260 $ 590
Speedway 80 83
Pipeline Transportation 54 48
Segment income from operations (a) 1,394 721
Items not allocated to segments
Corporate and other unallocated items (69) (56)
Impairments - (29)
Income from operations $ 1,325 $ 636
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a. See Supplemental Statistics for a reconciliation of segment income to net
income as reported under generally accepted accounting principles.
Refining & Marketing
Refining & Marketing segment income from operations was $1,260 million in the
second quarter of 2011, compared with $590 million in the second quarter of
2010. The increase was primarily the result of a higher refining and marketing
gross margin, which increased to 25.66 cents per gallon in the second quarter of
2011 from 13.06 cents per gallon in the second quarter of 2010.
Factors contributing to the increase in the gross margin for the second quarter
of 2011 included a wider differential between West Texas Intermediate and other
light sweet crudes, such as Light Louisiana Sweet (LLS), and between sweet and
sour crudes. In addition, the Chicago and U.S. Gulf Coast (USGC) LLS 6-3-2-1
crack spreads increased in the second quarter of 2011 compared with the second
quarter of 2010.
The second quarter 2011 Refining & Marketing gross margin included derivative
gains of $234 million compared with gains of $73 million in the second quarter
of 2010, primarily resulting from the mitigation of our foreign crude oil
acquisition price risk and seasonal inventory price risk exposure.
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Three Months Ended
June 30
2011 2010
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Key Refining & Marketing Statistics
Crude oil refined (mbpd) 1,196 1,229
Other charge & blend stocks (mbpd) 176 164
Total refinery inputs (mbpd) 1,372 1,393
Refined product sales volume (mbpd) 1,561 1,598
Refining & Marketing gross margin ($/gal)(a) $0.2566 $0.1306
Refining & Marketing gross margin ($/bbl)(a) $10.78 $5.49
----------------------------------------------------------------------------
a. Sales revenue less cost of refinery inputs, purchased products and
manufacturing expenses, including depreciation, divided by Refining &
Marketing segment refined product sales volume.
Speedway
Speedway's 2011 second quarter segment income from operations was $80 million,
compared with $83 million in the second quarter of 2010. The second quarter
2010 segment income from operations included the results of the 166 convenience
stores and 67 franchise convenience stores that were part of the December 2010
sale of our Minnesota refinery and related assets.
Speedway's gasoline and distillate gross margin per gallon improved
considerably, averaging 15.02 cents in the second quarter of 2011, up from
11.68 cents in the second quarter of 2010. The contribution from the higher
gasoline and distillate gross margin was partially offset by lower sales volumes
attributable to the Minnesota asset disposition, as well as lower demand due to
higher gasoline and distillate retail prices and the state of the economy in
Speedway's Midwest markets. Same-store gasoline sales in the second quarter of
2011 decreased 5 percent, essentially offsetting the increase of 5 percent
achieved in the second quarter of 2010.
Same-store merchandise sales were flat in the second quarter of 2011, compared
with an increase of 4 percent for the second quarter of 2010. Merchandise gross
margin was $178 million in the second quarter 2011, compared with $207 million
in the second quarter of 2010, which primarily reflects the effects of the
Minnesota asset disposition.
During the second quarter of 2011, Speedway completed the purchase of 23
convenience stores in Chicago, Illinois and northwestern Indiana, which
strengthens Speedway's presence in this important geographic market. All of the
locations have been rebranded and are now integrated into Speedway's operations.
--------------------------------------------------------------------------------
Three Months Ended
June 30
2011 2010
--------------------------------------------------------------------------------
Key Speedway Statistics
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Gasoline and distillate sales (mmgal) 725 848
Gasoline and distillate gross margin ($/gal) (a) $0.1502 $0.1168
Merchandise sales ($mm) $743 $832
Merchandise gross margin ($mm) $178 $207
Convenience stores at period end 1,378 1,596
Same-store gasoline sales volume (period over period) (5%) 5%
Same-store merchandise sales $ (period over period) 0% 4%
--------------------------------------------------------------------------------
(a) The price paid by consumers less the cost of refined products, including
transportation and consumer excise taxes, and the cost of bankcard processing
fees, divided by gasoline and distillate sales volume.
Pipeline Transportation
Pipeline transportation segment income from operations was $54 million in the
second quarter of 2011, compared with $48 million in the 2010 second quarter.
The increase in the pipeline transportation segment income from operations
primarily reflects increased crude oil and refined product trunk line volumes
transported in several of the systems.
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Three Months Ended
June 30
2011 2010
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Key Pipeline Transportation Statistics
Pipeline barrels handled (mbpd) (a)
Crude oil trunk lines 1,221 1,177
Refined product trunk lines 1,014 973
Total pipeline barrels handled 2,235 2,150
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(a) Volumes transported in our wholly-owned and undivided interest common
carrier pipelines.
Corporate and Special Items
Corporate and other unallocated expenses increased $13 million in the second
quarter of 2011 compared with the second quarter of 2010, primarily due to a
combination of higher employee benefits, incentive compensation and
administrative expenses.
During the second quarter of 2011, state income tax legislative changes were
enacted, primarily in Michigan, resulting in an adverse tax impact of $17
million, which has been treated as a special item. In the second quarter 2010,
MPC recorded an impairment related to the sale of a maleic anhydride plant,
which had a negative after-tax impact of $17 million and was treated as a
special item.
Strong Balance Sheet with Financing in Place to Fund Current Operations and
Future Growth Opportunities
At June 30, 2011, the company had an unused $2 billion revolving credit facility
and $1.622 billion of cash. On July 1, 2011, the company completed a new trade
receivables securitization facility in an aggregate principal amount not to
exceed $1 billion. These facilities should provide the company with significant
flexibility to meet its day-to-day operational needs and to pursue value-
enhancing growth opportunities. As of June 30, 2011, the company had a strong
financial position with a cash-adjusted debt to capital ratio of 16 percent.
Conference Call
At 1 p.m. EDT 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 "2011 Second Quarter
Financial Results" link. Replays of the conference call will be available on the
company's website through Tuesday, Aug. 16. Financial information, including the
earnings release and other investor-related material, will also be available
online at http://ir.marathonpetroleum.com by clicking on "Quarterly Investor
Packet."
About Marathon Petroleum Corporation
MPC is the nation's fifth-largest refiner with a crude capacity in excess of
1.1 million barrels per day in its six-refinery system. Marathon brand gasoline
is sold through approximately 5,100 independently owned locations across 18
states. In addition, Speedway LLC, an MPC subsidiary, owns and operates the
nation's fourth largest convenience store chain, with approximately 1,375
locations in seven states. MPC also owns, operates, leases or has ownership
interest in approximately 9,600 miles of pipeline. 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:
Pamela Beall (419) 429-5640
Beth Hunter (419) 421-2559
Media Contacts:
Angelia Graves (419) 421- 2703
Robert Calmus (419) 421- 3127
###
In addition to net income determined in accordance with generally accepted
accounting principles ("GAAP"), MPC has provided supplementally "net income
adjusted for special items," a non-GAAP financial measure which 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 net income and "net income adjusted for special items" is provided
in a table on page 1 of this release. "Net income adjusted for special items"
should not be considered a substitute for net income as reported in accordance
with GAAP. We believe certain investors use "net income adjusted for special
items" to evaluate MPC's financial performance between periods. Management also
uses "net income adjusted for special items" to compare MPC's performance to
certain competitors.
This release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements relate to, among other things, MPC's current 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," or "would" 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 the
company's control and are difficult to predict. Factors that could cause actual
results to differ materially from those in the forward-looking statements
include: 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; changes in
governmental regulations; transportation logistics; the availability of
materials and labor, delays in obtaining necessary third-party approvals, and
other risks customary to construction projects; the reliability of processing
units and other equipment; our ability to successfully implement growth
opportunities; other risk factors inherent to our industry; and the factors set
forth under the heading "Risk Factors" in MPC's Registration Statement on Form
10 filed with the Securities and Exchange Commission (the "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 could also have material
adverse effects on forward-looking statements. Copies of MPC's Form 10 are
available on the SEC website, at http://www.marathonpetroleum.com or by
contacting MPC's Investor Relations Office.
--------------------------------------------------------------------------------
Consolidated Statements of Income (Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
(In millions, except per 2011 2010 2011 2010
share data)
--------------------------------------------------------------------------------
Revenues and other
income:
Sales and other
operating revenues $20,732 $15,762 $38,551 $29,100
(including consumer
excise taxes)
Sales to related 28 33 51 57
parties
Income from equity 17 18 26 38
method investments
Net gain on disposal of 4 2 5 3
assets
Other income 13 10 32 18
--------------- ------------ ------------- ------------
Total revenues and 20,794 15,825 38,665 29,216
other income
--------------- ------------ ------------- ------------
Costs and expenses:
Cost of revenues 16,654 12,792 31,211 24,420
(excludes items below)
Purchases from related 981 529 1,766 1,005
parties
Consumer excise taxes 1,269 1,308 2,478 2,520
Depreciation and 218 269 434 489
amortization
Selling, general and 288 228 505 434
administrative expenses
Other taxes 59 63 127 131
--------------- ------------ ------------- ------------
Total costs and 19,469 15,189 36,521 28,999
expenses
--------------- ------------ ------------- ------------
Income from operations 1,325 636 2,144 217
Related party net
interest and other 18 3 35 9
financial income
Net interest and other (10) 1 (24) (3)
financing income (costs)
--------------- ------------ ------------- ------------
Income before income 1,333 640 2,155 223
taxes
Provision for income 531 235 824 107
taxes
--------------- ------------ ------------- ------------
Net income $ 802 $ 405 $ 1,331 $ 116
--------------------------------------------------------------------------------
Per Share Data
Basic:
Net income $2.25 $1.14 $3.74 $0.32
Diluted:
Net income $2.24 $1.13 $3.72 $0.32
--------------------------------------------------------------------------------
Number of Shares:
Basic 356 356 356 356
Diluted 358 358 358 358
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Supplemental Statistics (Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
(Dollars in millions) 2011 2010 2011 2010
--------------------------------------------------------------------------------
Segment Income from
Operations
Refining & Marketing $ 1,260 $ 590 $ 2,062 $ 145
Speedway 80 83 113 123
Pipeline Transportation 54 48 105 92
------------- -------------- ------------- ------------
Segment income from 1,394 721 2,280 360
operations
Items not allocated to
segments
Corporate and other (69) (56) (136) (114)
unallocated items
Impairments - (29) - (29)
Net interest and 8 4 11 6
other financial income
------------- -------------- ------------- ------------
Income before income 1,333 640 2,155 223
taxes
Income tax provision 531 235 824 107
------------- -------------- ------------- ------------
Net income $ 802 $ 405 $ 1,331 $ 116
------------- -------------- ------------- ------------
Capital Expenditures and
Investments(a)
Refining & Marketing $ 220 $ 221 $ 376 $ 485
Speedway (b) 97 10 102 18
Pipeline Transportation 24 3 38 9
Other (c) 44 23 73 49
------------- -------------- ------------- ------------
Total $ 385 $ 257 $ 589 $ 561
--------------------------------------------------------------------------------
a. Capital expenditures include changes in accruals.
b. Includes $74 million acquisition of 23 convenience stores in May 2011.
c. Includes capitalized interest.
--------------------------------------------------------------------------------
Supplemental Statistics (Unaudited) (continued)
Three Months Six Months
Ended Ended
June 30 June 30
(Dollars in millions, except as noted) 2011 2010 2011 2010
--------------------------------------------------------------------------------
MPC Consolidated Refined Product Sales 1,578 1,610 1,570 1,483
Volumes (mbpd) (a)
Refining & Marketing Operating Statistics
Crude oil refined 1,196 1,229 1,155 1,117
Other charge and blend stocks 176 164 192 130
--------- --------- --------- --------
Total 1,372 1,393 1,347 1,247
Refined product yields (mbpd)
Gasoline 744 753 738 665
Distillates 429 428 419 368
Propane 26 26 25 23
Feedstocks and special products 117 96 116 106
Heavy fuel oil 21 30 21 22
Asphalt 59 81 54 79
--------- --------- --------- --------
Total 1,396 1,414 1,373 1,263
Refined products sales volumes (mbpd)(b) 1,561 1,598 1,551 1,471
Refining and marketing gross margin (per $0.2566 $0.1306 $0.2090 $0.0428
gallon)(c)
Speedway Operating Statistics
Convenience stores at period end 1,378 1,596 - -
Gasoline and distillate sales (millions
of gallons) 725 848 1,418 1,631
Gasoline and distillate gross margin $0.1502 $0.1168 $0.1288 $0.1098
(per gallon) (d)
Merchandise sales $ 743 $ 832 $ 1,406 $ 1,563
Merchandise gross margin $ 178 $ 207 $ 336 $ 385
Pipeline Transportation Operating
Statistics
Pipeline barrels handled (mbpd) (e)
Crude oil trunk lines 1,221 1,177 1,197 1,170
Refined product trunk lines 1,014 973 994 836
--------- --------- --------- --------
Total pipeline barrels handled 2,235 2,150 2,191 2,006
--------------------------------------------------------------------------------
(a) Total average daily volumes of refined product sales to wholesale,
branded and retail (Speedway segment) customers.
(b) Includes intersegment sales.
(c) Sales revenue less cost of refinery inputs, purchased products and
manufacturing expenses, including depreciation, divided by Refining & Marketing
segment refined product sales volume.
(d) The price paid by consumers less the cost of refined products, including
transportation and consumer excise taxes, and the cost of bankcard processing
fees, divided by gasoline and distillate sales volume.
(e) On owned common carrier pipelines, excluding equity method investments.
--------------------------------------------------------------------------------
Earnings Before Interest, Taxes, Depreciation & Amortization (EBITDA) by Segment
Three Months Ended Six Months Ended
June 30 June 30
(Dollars in millions) 2011 2010 2011 2010
--------------------------------------------------------------------------------
EBITDA (a)
Refining & Marketing $ 1,436 $ 792 $ 2,417 $ 526
Speedway 108 111 167 180
Pipeline Transportation 65 58 127 114
------------- ----------- ------------- ----------
Total segment EBITDA 1,609 961 2,711 820
Less: Total segment 215 240 431 460
depreciation & amortization
------------- ----------- ------------- ----------
Total segment income 1,394
from operations 721 2,280 360
Items not allocated to
segments
Corporate and other (69) (56) (136) (114)
unallocated items
Impairments - (29) - (29)
Net interest and other 8 4 11 6
financial income
------------- ----------- ------------- ----------
Income before income taxes 1,333 640 2,155 223
Income tax provision 531 235 824 107
------------- ----------- ------------- ----------
Net income $ 802 $ 405 $ 1,331 $ 116
------------- ----------- ------------- ----------
--------------------------------------------------------------------------------
(a) EBITDA represents earnings before interest and financing costs, interest
income, income taxes and depreciation and amortization expense. We present
EBITDA because we believe some investors and analysts use EBITDA to help analyze
our cash flows, including our ability to satisfy principal and interest
obligations with respect to our indebtedness and to use cash for other purposes,
including capital expenditures. EBITDA is also used by some investors and
analysts to analyze and compare companies on the basis of operating performance
and by management for internal analysis and as a component of financial
covenants in our credit agreements. EBITDA should not be considered as an
alternative to net income, income before income taxes, cash flows from operating
activities or any other measure of financial performance presented in accordance
with accounting principles generally accepted in the United States. EBITDA may
not be comparable to similarly titled measures used by other entities.
MPC 2011 2Q Earnings release :
http://hugin.info/147922/R/1535580/468297.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Marathon Petroleum Company via Thomson Reuters ONE
[HUG#1535580]
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