Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

Marathon Petroleum Corp., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income (loss)	11,172)	16,050)	11,001)	(9,977)	3,255)
Amortization of deferred financing costs and debt discount	(78)	50)	79)	69)	33)
Impairment expense	—)	—)	—)	8,426)	1,197)
Depreciation and amortization	3,307)	3,215)	3,364)	3,375)	3,638)
Pension and other postretirement benefits, net	(191)	172)	(499)	220)	(64)
Deferred income taxes	(28)	290)	(169)	(241)	1,023)
Net gain on disposal of assets	(217)	(1,061)	(21)	(70)	(307)
(Income) loss from equity method investments	(742)	(655)	(458)	935)	(394)
Distributions from equity method investments	941)	772)	652)	577)	662)
Income from discontinued operations	—)	(72)	(8,448)	(1,205)	—)
Changes in income tax receivable	135)	(555)	2,089)	(1,807)	—)
Changes in the fair value of derivative instruments	70)	(147)	16)	45)	(8)
Current receivables	1,972)	(2,315)	(5,299)	1,465)	(2,024)
Inventories	(489)	(787)	(33)	1,750)	(366)
Current accounts payable and accrued liabilities	(1,316)	1,909)	6,260)	(2,927)	2,502)
Right of use assets and operating lease liabilities, net	(7)	—)	3)	(19)	14)
Changes in operating assets and liabilities, net of effects of businesses acquired	160)	(1,193)	931)	269)	126)
All other, net	(412)	(547)	(153)	191)	280)
Adjustments to reconcile net income (loss) to net cash provided by operating activities	2,945)	269)	(2,617)	10,784)	6,186)
Net cash provided by operating activities	14,117)	16,319)	8,384)	807)	9,441)
Additions to property, plant and equipment	(1,890)	(2,420)	(1,464)	(2,787)	(5,374)
Acquisitions, net of cash acquired	(246)	(413)	—)	—)	(129)
Disposal of assets	36)	90)	153)	150)	127)
Investments, acquisitions and contributions	(480)	(405)	(210)	(485)	(1,064)
Investments, redemptions, repayments, return of capital and sales proceeds	275)	515)	39)	137)	98)
Purchases of short-term investments	(8,622)	(6,023)	(12,498)	—)	—)
Sales of short-term investments	2,082)	1,296)	1,544)	—)	—)
Maturities of short-term investments	5,048)	7,159)	5,406)	—)	—)
All other, net	702)	824)	513)	63)	81)
Net cash (used in) provided by investing activities	(3,095)	623)	(6,517)	(2,922)	(6,261)
Commercial paper, issued	—)	—)	7,414)	2,055)	—)
Commercial paper, repayments	—)	—)	(8,437)	(1,031)	—)
Long-term debt, borrowings	1,589)	3,379)	12,150)	17,082)	14,274)
Long-term debt, repayments	(1,079)	(2,280)	(17,400)	(15,380)	(13,073)
Debt issuance costs	(15)	(39)	—)	(50)	(22)
Issuance of common stock	62)	243)	106)	11)	10)
Common stock repurchased	(11,572)	(11,922)	(4,654)	—)	(1,950)
Dividends paid	(1,261)	(1,279)	(1,484)	(1,510)	(1,398)
Distributions to noncontrolling interests	(1,281)	(1,214)	(1,449)	(1,244)	(1,245)
Contributions from noncontrolling interests	—)	—)	—)	—)	97)
Repurchases of noncontrolling interests	—)	(491)	(630)	(33)	—)
Redemption of noncontrolling interests, preferred units	(600)	—)	—)	—)	—)
All other, net	(50)	(44)	(35)	(35)	(69)
Net cash used in financing activities	(14,207)	(13,647)	(14,419)	(135)	(3,376)
Cash provided by (used in) operating activities, discontinued operations	—)	42)	(4,024)	1,612)	—)
Cash (used in) provided by investing activities, discontinued operations	—)	—)	21,314)	(335)	—)
Net cash provided by discontinued operations	—)	42)	17,290)	1,277)	—)
Net change in cash, cash equivalents and restricted cash	(3,185)	3,337)	4,738)	(973)	(196)
Cash, cash equivalents and restricted cash balances, beginning of year	8,631)	5,294)	556)	1,529)	1,725)
Cash, cash equivalents and restricted cash balances, end of year	5,446)	8,631)	5,294)	556)	1,529)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The financial data over the five-year period reveals notable fluctuations in key profitability, cash flow, and financing metrics.

Profitability and Income Statement Items: Net income displayed significant volatility, with a sharp loss in 2020 (-$9,977 million), followed by a strong recovery to $11,001 million in 2021 and further increases in 2022 ($16,050 million) before declining to $11,172 million in 2023. Impairment expenses peaked in 2020 ($8,426 million) and were absent afterwards, suggesting a one-time charge affecting that year's results. Depreciation and amortization remained relatively stable, gradually decreasing from $3,638 million in 2019 to $3,307 million in 2023. Amortization of deferred financing costs fluctuated, with a notable negative value in 2023 (-$78 million), indicating possible unusual financing adjustments.
Operating Activities and Working Capital: Net cash provided by operating activities showed strong recovery after a drop in 2020, rising from $807 million in 2020 to a peak of $16,319 million in 2022, then slightly declining to $14,117 million in 2023. Adjustments to reconcile net income to cash from operating activities exhibited mixed trends, with a large positive value peaking at $10,784 million in 2020 but negative in 2021 (-$2,617 million) before trending upward again. Changes in receivables and payables fluctuated considerably, reflecting varying working capital management: current receivables swung from a negative $2,024 million in 2019 to positive $1,972 million by 2023, while accounts payable and accrued liabilities showed volatility with a peak increase in 2021 ($6,260 million) followed by declines.
Investing Activities: Investments in property, plant, and equipment consistently declined from $5,374 million in 2019 to $1,890 million in 2023, indicating a decrease in capital expenditure over time. Net cash used in investing activities was negative across most years except for a minor positive cash flow of $623 million in 2022, mainly influenced by significant maturities and sales of short-term investments. Purchases of short-term investments were particularly high in 2021 and 2023, while maturities and sales provided liquidity in subsequent years. Acquisitions occurred sporadically, with notable outflows in 2022 and 2023.
Financing Activities: Financing cash flows consistently resulted in significant outflows, with net cash used in financing activities ranging between -$135 million to -$14,419 million over the years, reaching approximately -$14,207 million in 2023. Long-term debt borrowings peaked in 2020 ($17,082 million) but substantially decreased thereafter, while repayments of long-term debt exceeded borrowings in most years, contributing to net debt reduction. Common stock issuances increased from 2019 through 2022 but declined in 2023. Large common stock repurchases were recorded from 2021 to 2023, with the highest repurchase of $11,922 million in 2022, indicating aggressive share buyback programs. Dividends paid remained relatively stable, slightly decreasing towards the end of the period.
Cash and Cash Equivalents: Cash balances experienced a notable decrease in 2020, dropping from $1,529 million to $556 million before sharply increasing to $8,631 million by the end of 2022. However, 2023 saw a reduction in cash position to $5,446 million, corresponding with the negative net change in cash during that year (-$3,185 million). These movements align with the fluctuations in operating, investing, and financing cash flows previously mentioned.
Other Observations: Income from discontinued operations introduced considerable variability, with significant losses in 2020 and 2021 but minimal impact afterward. Changes in deferred income taxes and pension/postretirement benefits did not present a clear trend, oscillating between positive and negative values throughout the period. The net gain on disposal of assets declined notably in 2022 (-$1,061 million), indicating impairments or losses from asset sales.

In summary, the company experienced substantial earnings volatility primarily driven by impairment expenses and income from discontinued operations. Despite this, operating cash flow strengthened considerably following 2020. Capital expenditures declined steadily, while financing actions focused on debt reduction and aggressive share repurchases, impacting cash reserves notably in recent years.

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Marathon Petroleum Corp. (NYSE:MPC)

Cash Flow Statement