Marathon Petroleum Corp. (NYSE: MPC) today reported net income attributable to MPC of $845 million, or $1.49 per diluted share, for the first quarter of 2022, compared with a net loss of $242 million, or $(0.37) per diluted share, for the first quarter of 2021.
Adjusted earnings before interest, taxes, depreciation, and amortization (adjusted EBITDA) was $2.6 billion in the first quarter of 2022, compared with $1.6 billion for the first quarter of 2021. The first quarter of 2021 includes $332 million of adjusted EBITDA from discontinued operations.
“MPC first quarter results reflect our team’s ability to execute on our strategic pillars in these market conditions,” said President and Chief Executive Officer Michael J. Hennigan. “This quarter we advanced our low carbon strategy with the announcement of our intent to form a joint venture with Neste at our Martinez Renewable Fuels Facility and a 15% Scope 3 absolute GHG emission reduction target. We have now completed approximately $8 billion of MPC share repurchases since the inception of our $10 billion return of capital program.”
Refining & Marketing (R&M)
Segment adjusted EBITDA was $1.4 billion in the first quarter of 2022, versus $23 million for the first quarter of 2021. Segment adjusted EBITDA excludes refining planned turnaround costs, which totaled $145 million in the first quarter of 2022 and $112 million in the first quarter of 2021. First-quarter 2021 segment adjusted EBITDA also excludes winter storm effects of $31 million. The increase in R&M EBITDA was driven by higher margins and throughput in all regions.
R&M margin was $15.31 per barrel for the first quarter of 2022, versus $10.16 per barrel for the first quarter of 2021. Crude capacity utilization was 91%, resulting in total throughput of 2.8 million barrels per day for the first quarter of 2022. This compares to crude capacity utilization of 83% for the first quarter of 2021, which resulted in total throughput of 2.6 million barrels per day.
Midstream
Segment adjusted EBITDA was $1.4 billion in the first quarter of 2022, versus $1.3 billion for the first quarter of 2021. First-quarter 2021 segment adjusted EBITDA excludes winter storm effects of $16 million.
Corporate and Items Not Allocated
Corporate expenses totaled $151 million in the first quarter of 2022, compared with $157 million in the first quarter of 2021.
Speedway
This business was sold on May 14, 2021. Historic results are reported as discontinued operations.
Financial Position and Liquidity
As of March 31, 2022, MPC had $10.6 billion of cash, cash equivalents, and short-term investments. There were no borrowings outstanding under the company’s $5 billion five-year bank revolving credit facility.
MPC debt at the end of the first quarter of 2022 totaled $7.0 billion, excluding MPLX debt. MPC’s debt-to-capital ratio, excluding MPLX debt, was 22% at the end of the first quarter of 2022.
On March 14, 2022, MPLX issued $1.5 billion aggregate principal amount of 4.950% senior notes due March 2052. As of March 31, 2022, MPLX had repaid approximately $1.1 billion of the amount outstanding under the intercompany loan with MPC.
Strategic and Operations Update
Since the last earnings call, the company has repurchased approximately $2.5 billion of company shares, and has completed, as of April 30, 2022, approximately 80% of the $10 billion repurchase program. The company has approximately $7 billion remaining under its share repurchase authorizations.
MPC announced it has entered into definitive agreements to form a joint venture with Neste for Marathon’s Martinez renewable fuels project. The partnership will be structured as a 50/50 joint venture with Neste expected to contribute a total of $1 billion, inclusive of half of the total estimated development costs. MPC will continue to manage project execution and operate the facility once construction is complete. The closing of the joint venture is subject to customary closing conditions and regulatory approvals, including obtaining the necessary permits, which depend upon certification of a final Environmental Impact Report.
The Martinez facility is currently targeted to have a production capacity of 260 million gallons per year of renewable diesel in the second half of 2022, with pretreatment capabilities to come online in 2023. The facility is expected to be capable of producing 730 million gallons per year by the end of 2023. The expected and targeted timelines for achieving the production capacities outlined above are dependent upon the timing of obtaining the necessary permits to operate the facility.
On February 14, 2022, MPC established a 2030 target to reduce absolute Scope 3 – Category 11 greenhouse gas (GHG) emissions by 15% below 2019 levels. The new Scope 3 target further enhances MPC’s GHG disclosures and is part of the company’s commitment to continuously improve its environmental performance while meeting society’s energy needs sustainably.
The Midstream segment remains focused on executing the strategic priorities of strict capital discipline, embedding a low cost culture, and optimizing the portfolio. MPLX continues to evaluate opportunities to expand its logistics to meet the needs of today and participate in an energy-diverse future.
About Marathon Petroleum Corporation
Marathon Petroleum Corporation (MPC) is a leading, integrated, downstream energy company headquartered in Findlay, Ohio. The company operates the nation’s largest refining system. MPC’s marketing system includes branded locations across the United States, including Marathon brand retail outlets. MPC also owns the general partner and majority limited partner interest in MPLX LP, a midstream company that owns and operates gathering, processing, and fractionation assets, as well as crude oil and light product transportation and logistics infrastructure. More information is available at www.marathonpetroleum.com.
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