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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Marathon Petroleum Corp., economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net operating profit after taxes (NOPAT)¹	10,783)	17,951)	6,187)	(10,978)	6,182)
Cost of capital²	13.57%	13.49%	11.98%	10.63%	10.59%
Invested capital³	63,897)	69,547)	63,579)	70,186)	82,004)

Economic profit⁴	2,112)	8,572)	(1,427)	(18,440)	(2,505)

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).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 10,783 – 13.57% × 63,897 = 2,112

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Marathon Petroleum Corp. economic profit increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Marathon Petroleum Corp., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income (loss) attributable to MPC	9,681)	14,516)	9,738)	(9,826)	2,637)
Deferred income tax expense (benefit)¹	(28)	290)	(169)	(241)	1,023)
Increase (decrease) in allowance for doubtful accounts²	15)	(11)	22)	1)	8)
Increase (decrease) in LIFO reserve³	(950)	880)	2,840)	(787)	871)
Increase (decrease) in restructuring reserve⁴	(46)	(13)	(82)	141)	—)
Increase (decrease) in equity equivalents⁵	(1,009)	1,146)	2,611)	(886)	1,902)
Interest expense, net of interest capitalized	1,265)	1,195)	1,267)	1,333)	1,238)
Interest expense, operating lease liability⁶	50)	43)	42)	56)	100)
Adjusted interest expense, net of interest capitalized	1,315)	1,238)	1,309)	1,389)	1,338)
Tax benefit of interest expense, net of interest capitalized⁷	(276)	(260)	(275)	(292)	(281)
Adjusted interest expense, net of interest capitalized, after taxes⁸	1,039)	978)	1,034)	1,097)	1,057)
Interest income	(530)	(191)	(14)	(9)	(40)
Investment income, before taxes	(530)	(191)	(14)	(9)	(40)
Tax expense (benefit) of investment income⁹	111)	40)	3)	2)	8)
Investment income, after taxes¹⁰	(419)	(151)	(11)	(7)	(32)
(Income) loss from discontinued operations, net of tax¹¹	—)	(72)	(8,448)	(1,205)	—)
Net income (loss) attributable to noncontrolling interest	1,491)	1,534)	1,263)	(151)	618)
Net operating profit after taxes (NOPAT)	10,783)	17,951)	6,187)	(10,978)	6,182)

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).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for doubtful accounts.

³ Addition of increase (decrease) in LIFO reserve. See details »

⁴ Addition of increase (decrease) in restructuring reserve.

⁵ Addition of increase (decrease) in equity equivalents to net income (loss) attributable to MPC.

⁶ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 1,218 × 4.10% = 50

⁷ 2023 Calculation
Tax benefit of interest expense, net of interest capitalized = Adjusted interest expense, net of interest capitalized × Statutory income tax rate
= 1,315 × 21.00% = 276

⁸ Addition of after taxes interest expense to net income (loss) attributable to MPC.

⁹ 2023 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 530 × 21.00% = 111

¹⁰ Elimination of after taxes investment income.

¹¹ Elimination of discontinued operations.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Marathon Petroleum Corp. NOPAT increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Marathon Petroleum Corp., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Income tax provision (benefit)	2,817)	4,491)	264)	(2,430)	1,074)
Less: Deferred income tax expense (benefit)	(28)	290)	(169)	(241)	1,023)
Add: Tax savings from interest expense, net of interest capitalized	276)	260)	275)	292)	281)
Less: Tax imposed on investment income	111)	40)	3)	2)	8)
Cash operating taxes	3,010)	4,421)	705)	(1,899)	324)

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).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Marathon Petroleum Corp. cash operating taxes increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Marathon Petroleum Corp., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Debt due within one year	1,954)	1,066)	571)	2,854)	711)
Long-term debt due after one year	25,329)	25,634)	24,968)	28,730)	28,127)
Operating lease liability¹	1,218)	1,209)	1,365)	1,511)	2,479)
Total reported debt & leases	28,501)	27,909)	26,904)	33,095)	31,317)
Total MPC stockholders’ equity	24,404)	27,715)	26,206)	22,199)	33,694)
Net deferred tax (assets) liabilities²	5,833)	5,903)	5,636)	6,200)	6,372)
Allowance for doubtful accounts³	44)	29)	40)	18)	17)
LIFO reserve⁴	2,770)	3,720)	2,840)	—)	871)
Restructuring reserve⁵	—)	46)	59)	141)	—)
Equity equivalents⁶	8,647)	9,698)	8,575)	6,359)	7,260)
Accumulated other comprehensive (income) loss, net of tax⁷	131)	(2)	67)	512)	320)
Redeemable noncontrolling interest	895)	968)	965)	968)	968)
Noncontrolling interests	6,100)	6,404)	6,410)	7,053)	8,445)
Adjusted total MPC stockholders’ equity	40,177)	44,783)	42,223)	37,091)	50,687)
Short-term investments⁸	(4,781)	(3,145)	(5,548)	—)	—)
Invested capital	63,897)	69,547)	63,579)	70,186)	82,004)

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).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of LIFO reserve. See details »

⁵ Addition of restructuring reserve.

⁶ Addition of equity equivalents to total MPC stockholders’ equity.

⁷ Removal of accumulated other comprehensive income.

⁸ Subtraction of short-term investments.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Marathon Petroleum Corp. invested capital increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Marathon Petroleum Corp., cost of capital calculations

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	60,405)	60,405)	÷	87,593)	=	0.69	0.69	×	18.07%	=	12.46%
Debt³	25,970)	25,970)	÷	87,593)	=	0.30	0.30	×	4.54% × (1 – 21.00%)	=	1.06%
Operating lease liability⁴	1,218)	1,218)	÷	87,593)	=	0.01	0.01	×	4.10% × (1 – 21.00%)	=	0.05%
Total:	87,593)					1.00					13.57%

Based on: 10-K (reporting date: 2023-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	55,925)	55,925)	÷	81,664)	=	0.68	0.68	×	18.07%	=	12.37%
Debt³	24,530)	24,530)	÷	81,664)	=	0.30	0.30	×	4.51% × (1 – 21.00%)	=	1.07%
Operating lease liability⁴	1,209)	1,209)	÷	81,664)	=	0.01	0.01	×	3.55% × (1 – 21.00%)	=	0.04%
Total:	81,664)					1.00					13.49%

Based on: 10-K (reporting date: 2022-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	42,086)	42,086)	÷	72,149)	=	0.58	0.58	×	18.07%	=	10.54%
Debt³	28,698)	28,698)	÷	72,149)	=	0.40	0.40	×	4.42% × (1 – 21.00%)	=	1.39%
Operating lease liability⁴	1,365)	1,365)	÷	72,149)	=	0.02	0.02	×	3.11% × (1 – 21.00%)	=	0.05%
Total:	72,149)					1.00					11.98%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	35,573)	35,573)	÷	72,629)	=	0.49	0.49	×	18.07%	=	8.85%
Debt³	35,545)	35,545)	÷	72,629)	=	0.49	0.49	×	4.45% × (1 – 21.00%)	=	1.72%
Operating lease liability⁴	1,511)	1,511)	÷	72,629)	=	0.02	0.02	×	3.68% × (1 – 21.00%)	=	0.06%
Total:	72,629)					1.00					10.63%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	30,799)	30,799)	÷	64,076)	=	0.48	0.48	×	18.07%	=	8.69%
Debt³	30,798)	30,798)	÷	64,076)	=	0.48	0.48	×	4.70% × (1 – 21.00%)	=	1.78%
Operating lease liability⁴	2,479)	2,479)	÷	64,076)	=	0.04	0.04	×	4.02% × (1 – 21.00%)	=	0.12%
Total:	64,076)					1.00					10.59%

Based on: 10-K (reporting date: 2019-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Marathon Petroleum Corp., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	2,112)	8,572)	(1,427)	(18,440)	(2,505)
Invested capital²	63,897)	69,547)	63,579)	70,186)	82,004)
Performance Ratio
Economic spread ratio³	3.31%	12.32%	-2.24%	-26.27%	-3.05%
Benchmarks
Economic Spread Ratio, Competitors⁴
Chevron Corp.	-4.59%	5.91%	-3.17%	-17.34%	-12.61%
ConocoPhillips	1.00%	13.62%	-0.34%	-19.00%	-0.36%
Exxon Mobil Corp.	0.05%	8.78%	0.35%	-22.90%	-5.73%
Occidental Petroleum Corp.	-4.73%	7.69%	-4.47%	-33.52%	-10.60%
Valero Energy Corp.	0.19%	11.82%	-0.98%	-16.81%	-3.12%

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).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 2,112 ÷ 63,897 = 3.31%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Marathon Petroleum Corp. economic spread ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Marathon Petroleum Corp., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	2,112)	8,572)	(1,427)	(18,440)	(2,505)
Sales and other operating revenues	148,379)	177,453)	119,983)	69,779)	123,949)
Performance Ratio
Economic profit margin²	1.42%	4.83%	-1.19%	-26.43%	-2.02%
Benchmarks
Economic Profit Margin, Competitors³
Chevron Corp.	-4.95%	5.32%	-3.95%	-36.22%	-17.65%
ConocoPhillips	1.45%	13.10%	-0.57%	-51.47%	-0.63%
Exxon Mobil Corp.	0.04%	6.54%	0.35%	-35.13%	-6.80%
Occidental Petroleum Corp.	-9.52%	11.82%	-10.01%	-119.09%	-43.77%
Valero Energy Corp.	0.07%	3.33%	-0.38%	-10.61%	-1.17%

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).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Sales and other operating revenues
= 100 × 2,112 ÷ 148,379 = 1.42%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Marathon Petroleum Corp. economic profit margin improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Marathon Petroleum Corp. (NYSE:MPC)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin