Analysis of Reportable Segments
Marathon Petroleum Corp. operates in 2 segments: Refining & Marketing and Midstream.
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- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Current Ratio since 2011
- Analysis of Debt
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Segment Profit Margin
Marathon Petroleum Corp., profit margin by reportable segment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Refining & Marketing | |||||
| Midstream |
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 analysis of the annual reportable segment profit margin data reveals differing trends between the Refining & Marketing and Midstream segments over the five-year period ending in 2023.
- Refining & Marketing Segment
- The profit margin exhibited considerable volatility during the period. In 2019, the margin was positive at 2.22% but declined sharply to a negative -2.93% in 2020. This negative performance indicates challenges faced in that year, possibly linked to external economic factors affecting profitability. Subsequently, there was a recovery in 2021, with the margin returning to a positive 3.05%. The upward trend accelerated in 2022, reaching a notable high of 11.18%, reflecting a strong improvement in segment profitability. However, in 2023, the margin moderated to 9.44%, which, while lower than the peak of the previous year, remains substantially higher than the earlier years, signaling sustained profitability despite a slight decline.
- Midstream Segment
- The Midstream segment consistently maintained high profit margins throughout the analyzed period, indicating robust and stable profitability. The margin started at 41.03% in 2019 and increased significantly to 59.98% in 2020. Although there was a minor reduction to 56.24% in 2021 and a further slight decline to 54.5% in 2022, the margins remained elevated. The year 2023 saw a rebound to 58.73%, close to the peak margin observed in 2020. Overall, the Midstream segment demonstrated resilience with comparatively high margins, suggesting effective management and favorable market conditions.
In summary, the Refining & Marketing segment showed a recovery trajectory with considerable improvement and some fluctuation after 2020, whereas the Midstream segment consistently delivered strong profit margins with minor variations, indicative of steady operational performance.
Segment Profit Margin: Refining & Marketing
Marathon Petroleum Corp.; Refining & Marketing; segment profit margin calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Segment adjusted EBITDA | |||||
| Segment revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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 2023 Calculation
Segment profit margin = 100 × Segment adjusted EBITDA ÷ Segment revenues
= 100 × ÷ =
The financial data for the Refining & Marketing segment demonstrates notable fluctuations over the five-year period examined. The segment adjusted EBITDA exhibits significant variability, starting at a positive level in 2019, then turning negative in 2020, before recovering robustly in subsequent years. Specifically, EBITDA dropped from 2,367 million USD in 2019 to negative 1,939 million USD in 2020, indicating a challenging fiscal year. Recovery ensued, with EBITDA rising sharply to 3,518 million USD in 2021, followed by a substantial increase to 19,261 million USD in 2022. In 2023, EBITDA declined to 13,551 million USD but remained considerably high compared to earlier years.
Segment revenues reflect some volatility but generally display an upward trajectory after the dip in 2020. Revenues decreased significantly from 106,742 million USD in 2019 to 66,247 million USD in 2020, paralleling the EBITDA decline. Revenues then recovered to 115,494 million USD in 2021, and surged further to 172,205 million USD in 2022, before moderating to 143,575 million USD in 2023. This pattern suggests that market conditions adversely impacted revenue in 2020, followed by a strong rebound.
Segment profit margins show a similar pattern of decline and recovery. Margins were positive at 2.22% in 2019 but fell to negative 2.93% in 2020, corroborating the segment's loss-making performance that year. Margins then improved to 3.05% in 2021, indicating a return to profitability. Noteworthy growth occurred in 2022, with margins increasing to 11.18%, reflecting enhanced operational efficiency or favorable market conditions. In 2023, margins slightly contracted to 9.44%, but remained substantially above pre-pandemic levels.
- Key observations:
- The year 2020 was marked by significant negative impacts on financial performance across all indicators, likely due to external economic or market disruptions.
- Recovery from 2021 onwards was strong, with 2022 representing a peak year in terms of both profitability and revenue for the segment.
- The slight contraction in 2023 suggests some moderation in growth and profitability, though results remain robust relative to the pre-2020 period.
- The improvements in profit margin from 2021 through 2023 indicate enhanced cost control, pricing power, or other operational improvements during the recovery phase.
Segment Profit Margin: Midstream
Marathon Petroleum Corp.; Midstream; segment profit margin calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Segment adjusted EBITDA | |||||
| Segment revenues | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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 2023 Calculation
Segment profit margin = 100 × Segment adjusted EBITDA ÷ Segment revenues
= 100 × ÷ =
The financial data for the Midstream segment reveals distinct trends over the five-year period from 2019 to 2023. The segment's adjusted EBITDA, segment revenues, and profit margin each demonstrate noteworthy developments and fluctuations.
- Segment Adjusted EBITDA
- The segment adjusted EBITDA shows a consistent upward trajectory over the period. Starting at $3,594 million in 2019, it increased substantially to $5,061 million in 2020. This positive momentum continued in subsequent years, reaching $5,410 million in 2021, $5,772 million in 2022, and further rising to $6,171 million by the end of 2023. This upward progression indicates improving earnings performance and operational efficiency in the Midstream segment.
- Segment Revenues
- Segment revenues demonstrate some variability across the years. Revenue decreased slightly from $8,760 million in 2019 to $8,438 million in 2020, marking a contraction in volume or pricing amid potential market challenges during that period. However, revenues rebounded strongly in 2021 to $9,619 million and continued growing to $10,590 million in 2022, reflecting growth in segment activity or improved market conditions. By 2023, revenues slightly declined to $10,508 million, which may suggest stabilization or marginal pressure on sales.
- Segment Profit Margin
- The segment profit margin experienced significant changes throughout the period. Beginning at 41.03% in 2019, the margin rose sharply to 59.98% in 2020. It then saw a moderate decline to 56.24% in 2021 and further to 54.5% in 2022, suggesting some cost pressures or changes in pricing dynamics. However, the margin rebounded to 58.73% in 2023, nearing the high levels observed in 2020. Overall, the margin improvements indicate enhanced profitability and cost control efforts within the segment.
In summary, the Midstream segment showed robust growth in adjusted EBITDA supported by increasing profitability margins despite some fluctuations in revenue. The trends suggest effective management of expenses and revenue streams, with resilience demonstrated during periods of revenue variability. This pattern points to a well-performing segment with the ability to enhance earnings quality over time.
Segment Capital Expenditures to Depreciation
Marathon Petroleum Corp., capital expenditures to depreciation by reportable segment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Refining & Marketing | |||||
| Midstream |
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).
- Refining & Marketing Segment
-
The capital expenditures to depreciation ratio for this segment exhibited a declining trend from 1.2 in 2019 down to 0.49 in 2021. This represents a significant reduction in capital spending relative to the depreciation expense over the initial three-year period.
After 2021, there was a partial recovery in the ratio, increasing to 0.82 in 2022, followed by a slight decline to 0.69 in 2023. Despite this rebound, the values in 2022 and 2023 remained below the 2019 level, indicating that capital expenditure levels relative to depreciation have not returned to the initial high.
Overall, the trend for the Refining & Marketing segment shows a contraction in relative investment activity after 2019, with some moderate recovery more recently but still at a level below the start of the period.
- Midstream Segment
-
This segment demonstrated a notable decrease from a high capital expenditure to depreciation ratio of 2.6 in 2019 to 1.03 in 2020 and then down further to 0.55 in 2021. The initial sharp decline indicates a substantial reduction in capital spending intensity relative to depreciation.
Subsequently, through 2022 and 2023, the ratio gradually increased to 0.82 and 0.84, respectively. Although the ratio experienced a recovery similar in pattern to the Refining & Marketing segment, the levels in 2023 remained significantly below the 2019 peak.
The data suggest an initial strong capital expenditure phase or asset renewal cycle in 2019, which was followed by contraction, with early signs of reinvestment or capital spending resurgence in the last two years.
- Comparative Insights
-
Both segments experienced a downward trend in their capital expenditures to depreciation ratios from 2019 through 2021, reflecting a period of diminished capital investment relative to asset depreciation.
The Midstream segment consistently maintained higher ratios than the Refining & Marketing segment across all years, indicating relatively greater capital intensity or reinvestment activities in the Midstream operations despite the declines.
In the latter years (2022 and 2023), both segments showed signs of recovering their capital expenditure to depreciation ratios, though neither segment returned to the high levels seen in 2019. This may suggest cautious reinvestment or adjustment to capital spending strategies following periods of lower investment.
Segment Capital Expenditures to Depreciation: Refining & Marketing
Marathon Petroleum Corp.; Refining & Marketing; segment capital expenditures to depreciation calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Segment capital expenditures and investments | |||||
| Segment depreciation and amortization | |||||
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | |||||
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 2023 Calculation
Segment capital expenditures to depreciation = Segment capital expenditures and investments ÷ Segment depreciation and amortization
= ÷ =
- Segment Capital Expenditures and Investments
-
The segment's capital expenditures and investments show a variable trend over the observed period. Starting at $1,999 million in 2019, expenditures sharply declined to $1,170 million in 2020 and further decreased to $911 million in 2021. A rebound is evident in 2022 when expenditures rose to $1,508 million, followed by a moderate decrease to $1,311 million in 2023. Overall, capital expenditures did not return to the initial 2019 level by the end of the period.
- Segment Depreciation and Amortization
-
Depreciation and amortization expenses exhibited a steady increase throughout the time frame. Beginning at $1,665 million in 2019, these expenses rose consistently to $1,857 million in 2020 and slightly increased further to $1,870 million in 2021. A minor decrease was recorded in 2022 to $1,850 million, followed by a slight uptick to $1,887 million in 2023. This trend suggests relatively stable but gradually increasing asset consumption or amortization.
- Segment Capital Expenditures to Depreciation Ratio
-
The ratio of capital expenditures to depreciation declined significantly over the period, indicating reduced reinvestment relative to asset depreciation. It started at 1.2 in 2019, indicating capital expenditures exceeded depreciation. This ratio then dropped to 0.63 in 2020 and further to 0.49 in 2021, reaching its lowest point. Although there was some recovery to 0.82 in 2022, it decreased again to 0.69 in 2023. This pattern suggests that the segment has been investing less in capital expenditures relative to its depreciation, potentially implying a more conservative approach to asset replacement or expansion in recent years.
Segment Capital Expenditures to Depreciation: Midstream
Marathon Petroleum Corp.; Midstream; segment capital expenditures to depreciation calculation
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Segment capital expenditures and investments | |||||
| Segment depreciation and amortization | |||||
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | |||||
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 2023 Calculation
Segment capital expenditures to depreciation = Segment capital expenditures and investments ÷ Segment depreciation and amortization
= ÷ =
- Segment capital expenditures and investments
- The capital expenditures and investments demonstrated a significant decline from US$ 3,290 million in 2019 to US$ 1,398 million in 2020, representing a sharp contraction. This reduction continued in 2021, reaching the lowest point at US$ 731 million. However, there was a rebound in 2022 and 2023, with capital expenditures increasing to US$ 1,069 million and US$ 1,105 million respectively, although still below the 2019 level.
- Segment depreciation and amortization
- Depreciation and amortization remained relatively stable over the years, fluctuating marginally around the US$ 1,300 million mark. Starting at US$ 1,267 million in 2019, it slightly increased to US$ 1,353 million in 2020, then marginally decreased over the following years to US$ 1,310 million in 2022, before a small uptick to US$ 1,320 million in 2023.
- Segment capital expenditures to depreciation ratio
- The ratio of capital expenditures to depreciation followed a downward trend from 2.6 in 2019 to 1.03 in 2020, indicating a significant reduction in capital spending relative to depreciation. It further declined to 0.55 in 2021, reflecting low investment intensity compared to asset aging. In 2022 and 2023, the ratio recovered somewhat to 0.82 and 0.84 respectively, signaling modest growth in capital investment relative to depreciation but still substantially below the 2019 level.
Segment adjusted EBITDA
Marathon Petroleum Corp., segment adjusted ebitda by reportable segment
US$ in millions
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Refining & Marketing | |||||
| Retail | |||||
| Midstream | |||||
| Total |
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 reflects notable fluctuations and trends in adjusted EBITDA across the reported segments over the provided periods.
- Refining & Marketing Segment
- This segment experienced significant volatility, beginning with a positive EBITDA of $2,367 million at the end of 2019, followed by a sharp decline to a negative EBITDA of -$1,939 million in 2020. This negative performance was reversed in the subsequent years, with EBITDA rising to $3,518 million in 2021 and then surging dramatically to a peak of $19,261 million in 2022. Although there was a decrease in 2023 to $13,551 million, the EBITDA remained substantially higher than the levels recorded in 2019 through 2021, indicating a strong recovery and growth trend with some moderation in the latest year.
- Retail Segment
- Data is only available for the year ending December 31, 2019, showing an EBITDA of $1,582 million. There are no reported values for subsequent years, preventing trend analysis for this segment within the given time frame.
- Midstream Segment
- The midstream segment shows a consistent upward trend in EBITDA throughout the period. EBITDA increased steadily from $3,594 million in 2019 to $6,171 million in 2023, reflecting continuous growth. The increments between periods are moderate and relatively stable, suggesting steady operational performance improvements or expansions in this segment.
- Total EBITDA
- The total adjusted EBITDA mirrors the overarching impact of the individual segments. It decreased sharply from $7,543 million in 2019 to $3,122 million in 2020, largely affected by the negative outcome in Refining & Marketing. Following this, there was a recovery and growth to $8,928 million in 2021 and a significant jump to $25,033 million in 2022, before a decline to $19,722 million in 2023. The overall pattern indicates a period of volatility with a major resurgence in profitability, tempered by a slight contraction in the most recent year.
Segment revenues
Marathon Petroleum Corp., segment revenues by reportable segment
US$ in millions
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Refining & Marketing | |||||
| Retail | |||||
| Midstream | |||||
| Total |
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 segment revenues demonstrate notable fluctuations over the analyzed periods, revealing variations across the different business sectors.
- Refining & Marketing
- This segment shows a sharp decline from US$106.7 billion in 2019 to US$66.2 billion in 2020, likely reflecting adverse conditions during that year. A strong recovery is observed in 2021, with revenues reaching US$115.5 billion, surpassing the 2019 figure. The upward trend continues robustly into 2022 with a peak at US$172.2 billion, before experiencing a decline to US$143.6 billion in 2023. Despite the decrease in the final year, the segment maintains revenues significantly above the 2019 low point.
- Retail
- Revenue data for this segment is only available for 2019, recorded at US$33.1 billion. The absence of subsequent data prevents trend analysis for this segment.
- Midstream
- The midstream segment displays a relatively stable revenue pattern throughout the period. It starts at US$8.8 billion in 2019, dipping slightly to US$8.4 billion in 2020. Subsequently, it shows a steady increase over the next two years—US$9.6 billion in 2021 and US$10.6 billion in 2022—followed by a minor decline to US$10.5 billion in 2023. Overall, the segment exhibits moderate growth with minor fluctuations.
- Total Revenues
- Total segment revenues reflect the overall trends of the individual divisions. After a significant drop from US$148.6 billion in 2019 to US$74.7 billion in 2020, reinforcing the impact of challenging market conditions in that year, the revenues recover substantially to US$125.1 billion in 2021. The highest revenue is recorded in 2022 at US$182.8 billion, after which a decrease to US$154.1 billion occurs in 2023. This pattern aligns closely with the refining & marketing segment, which constitutes the largest proportion of total revenues.
Segment depreciation and amortization
Marathon Petroleum Corp., segment depreciation and amortization by reportable segment
US$ in millions
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Refining & Marketing | |||||
| Retail | |||||
| Midstream | |||||
| Corporate | |||||
| Total |
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).
- Refining & Marketing Segment
- The depreciation and amortization expenses in the Refining & Marketing segment showed a generally increasing trend from 2019 through 2023. Starting at $1,665 million in 2019, the expenses rose to $1,857 million in 2020 and remained relatively stable through 2021 and 2022, with slight fluctuations around $1,850 million. In 2023, there was a modest increase to $1,887 million. This pattern suggests steady capital investment or asset base maintenance in this segment across the analyzed period.
- Retail Segment
- Depreciation and amortization data for the Retail segment is available only for 2019, with an amount of $528 million. No values are reported for subsequent years, indicating either the absence of reportable assets, restructuring, or a change in segment reporting methodologies impacting the availability of this data.
- Midstream Segment
- The Midstream segment demonstrated relatively stable depreciation and amortization figures over the five-year period. The values ranged from $1,267 million in 2019 to a peak of $1,353 million in 2020, after which there was a gradual decline to $1,329 million in 2021, then further to $1,310 million in 2022, and a slight increase to $1,320 million in 2023. This suggests moderate fluctuation in the asset base or capital expenditure cycles within this segment, with overall consistency in the expense levels.
- Corporate Segment
- The Corporate segment shows a varying pattern with data available from 2020 to 2023. Depreciation and amortization started at $165 million in 2020 and remained unchanged in 2021. A notable decrease to $55 million occurred in 2022, followed by an increase to $100 million in 2023. This volatility could indicate changes in administrative asset management, reallocation of corporate resources, or restructuring activities impacting the corporate asset base.
- Total Depreciation and Amortization
- Total expenses decreased steadily from $3,460 million in 2019 to $3,215 million in 2022, followed by a slight recovery to $3,307 million in 2023. This downward trend over most of the period may reflect a reduction in total depreciable assets, efficiency improvements, or changes in asset utilization across segments. The modest rebound in 2023 suggests stabilization or renewed capital investments.
Segment capital expenditures and investments
Marathon Petroleum Corp., segment capital expenditures and investments by reportable segment
US$ in millions
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Refining & Marketing | |||||
| Retail | |||||
| Midstream | |||||
| Total |
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).
- Refining & Marketing Capital Expenditures and Investments
- Over the five-year period, the capital expenditures and investments in this segment exhibited a fluctuating trend. Starting at 1,999 million US dollars in 2019, the amount decreased significantly to 1,170 million in 2020 and further declined to 911 million in 2021. A rebound was observed in 2022, with expenditures rising to 1,508 million, followed by a slight decrease to 1,311 million in 2023, indicating some recovery after the initial decline.
- Retail Capital Expenditures and Investments
- Data for this segment is only available for 2019, where the capital expenditure and investment amounted to 607 million US dollars. No values were reported for subsequent years, which implies either cessation of investment in this segment or unavailability of data.
- Midstream Capital Expenditures and Investments
- The midstream segment showed a considerable decline from 3,290 million US dollars in 2019 to 1,398 million in 2020. This downward trend continued into 2021, reaching a low of 731 million. However, the segment experienced a recovery phase in the following years, with expenditures increasing to 1,069 million in 2022 and slightly rising again to 1,105 million in 2023. Despite the recovery, investments remained below the 2019 level.
- Total Capital Expenditures and Investments
- The total capital expenditures and investments across all segments decreased markedly from 5,896 million US dollars in 2019 to 2,568 million in 2020, reflecting broader reductions likely influenced by external or strategic factors. The downward trend continued in 2021, reaching 1,642 million. Subsequently, the total capital injections recovered in 2022 to 2,577 million and slightly declined in 2023 to 2,416 million. This overall trend suggests a significant reduction from 2019 levels with partial recovery in the last two years.