Marathon Petroleum Corp. (NYSE:MPC)

The data reveals several noteworthy trends in property, plant, and equipment (PP&E) across different segments over the five-year period from 2019 to 2023.

Refining & Marketing

There is a steady increase in asset value from US$29,037 million in 2019 to US$32,496 million in 2023, indicating ongoing investment or asset growth in this segment. The growth appears consistent year-over-year, reflecting possible expansion or sustained capital expenditure in refining and marketing operations.

Retail

Retail assets are only reported for 2019, amounting to US$7,104 million, with no subsequent data. The absence of values in later years suggests possible divestiture, reclassification, or discontinuation of this segment's reporting within the PP&E structure.

Midstream

The midstream segment shows a generally stable trend with slight fluctuations. Assets increased from US$27,193 million in 2019 to US$29,620 million in 2023. There was a small peak in 2021 at US$28,098 million, a decline in 2022 to US$27,659 million, followed by a recovery in 2023. This may indicate variable investment or asset revaluation related to midstream operations.

Corporate

Corporate PP&E consistently rose from US$1,289 million in 2019 to US$1,632 million in 2023, reflecting gradual growth. While corporate assets are comparatively smaller, the steady increase suggests incremental capital deployment or asset additions supporting corporate functions.

Gross PP&E

The total gross PP&E shows a decline from US$64,623 million in 2019 to US$59,339 million in 2020, after which it progressively increases to US$63,748 million by 2023. The initial drop may be due to asset sales, impairments, or lower capitalization in 2020, possibly influenced by broader economic factors. The subsequent recovery and growth indicate renewed investment and asset acquisition.

Accumulated Depreciation

Accumulated depreciation consistently increases each year, from -US$19,008 million in 2019 to -US$28,636 million in 2023. This reflects ongoing depreciation charges reducing the book value of assets, which is typical as assets age and are utilized over time.

Net PP&E

Net PP&E, calculated as gross PP&E less accumulated depreciation, exhibits a declining trend from US$45,615 million in 2019 to US$35,112 million in 2023. Despite gross asset growth after 2020, the higher rate of accumulated depreciation results in a lower net asset value over the period. This suggests that asset aging and depreciation outpace new asset additions, potentially indicating a maturation of the asset base or limited replacement of older assets.

Overall, the data indicates that while gross investment in assets, particularly in refining & marketing and midstream segments, has grown or stabilized recently, accumulated depreciation has significantly reduced net asset values. The retail segment’s absence after 2019 may point to strategic shifts. The continual rise in corporate assets, although modest, supports ongoing administrative infrastructure. Careful attention to the aging asset base and capital expenditure strategies is advisable given the declining net PP&E.

The analysis of the average age ratio for property, plant, and equipment over the five-year period reveals a consistent upward trend. Starting at 29.41% at the end of 2019, the average age ratio has increased each subsequent year, reaching 44.92% by the end of 2023.

2019 to 2020

The ratio rose from 29.41% to 34.22%, representing an increase of approximately 4.81 percentage points. This indicates an aging asset base during this period.

2020 to 2021

The ratio further increased to 38.25%, a growth of around 4.03 percentage points, continuing the trend of aging assets.

2021 to 2022

The average age ratio reached 42.02%, climbing 3.77 percentage points, which reflects a sustained increase albeit at a slightly slower rate compared to previous years.

2022 to 2023

The highest increase was observed during this period, with the ratio rising to 44.92%, an increase of 2.90 percentage points, suggesting the assets continue to age without significant replacement or upgrade.

Overall, the steady rise in the average age ratio implies that the company’s property, plant, and equipment portfolio is aging. This trend may suggest limited investment in new assets or delayed asset replacement. An aging asset base can impact operational efficiency, maintenance costs, and future capital expenditure requirements. Continued monitoring of this ratio is advisable to assess potential risks related to asset obsolescence or increased depreciation expenses.

The analysis of the property, plant, and equipment (PP&E) data reveals several key trends over the five-year period ending in 2023.

Accumulated Depreciation

There is a consistent upward trend in accumulated depreciation, increasing each year from $19,008 million in 2019 to $28,636 million in 2023. This reflects ongoing usage and aging of the company’s fixed assets, indicating steady wear and tear or consumption of the assets’ economic benefits over time.

Gross Property, Plant & Equipment

The gross PP&E value shows some variability but no clear rapid growth or decline. It decreased from $64,623 million in 2019 to $59,339 million in 2020, then gradually increased to $63,748 million by 2023. This pattern suggests some asset disposals or impairments occurred around 2020, followed by moderate reinvestment or capital expenditures in subsequent years to replenish or expand the asset base.

Average Age Ratio

The average age ratio steadily increased from 29.41% in 2019 to 44.92% in 2023. This ratio measures the proportion of accumulated depreciation relative to gross PP&E, reflecting the aging of the asset base. The consistent rise indicates the existing assets are approaching the latter stages of their useful lives, with the asset base becoming older overall.

In summary, the company’s fixed asset base shows signs of aging, as evidenced by increasing accumulated depreciation and rising average age ratios. Although the gross PP&E experienced a dip early in the period, it has shown a modest recovery, suggesting a degree of asset renewal. However, the increasing average age ratio implies that ongoing capital investment may be required to maintain asset efficiency and operational capacity over time.