Marathon Petroleum Corp. (NYSE:MPC)

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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	13,551)	19,261)	3,518)	(1,939)	2,367)
Segment revenues	143,575)	172,205)	115,494)	66,247)	106,742)
Segment Profitability Ratio
Segment profit margin¹	9.44%	11.18%	3.05%	-2.93%	2.22%

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 × 13,551 ÷ 143,575 = 9.44%

The Refining & Marketing segment experienced significant volatility between 2019 and 2023, characterized by a sharp contraction in 2020 followed by a period of substantial growth and margin expansion peaking in 2022.

Revenue Performance: Segment revenues exhibited a cyclical pattern, falling from 106,742 million USD in 2019 to a low of 66,247 million USD in 2020. A strong recovery followed, with revenues climbing to 115,494 million USD in 2021 and reaching a five-year peak of 172,205 million USD in 2022. A moderate correction occurred in 2023, with revenues settling at 143,575 million USD.
Adjusted EBITDA Trends: Earnings showed higher volatility than revenues. After a positive 2,367 million USD in 2019, the segment reported a deficit of 1,939 million USD in 2020. Profitability returned in 2021 with 3,518 million USD and expanded exponentially to 19,261 million USD in 2022. While earnings decreased to 13,551 million USD in 2023, they remained significantly elevated compared to pre-2022 levels.
Profit Margin Analysis: The segment profit margin mirrored the EBITDA trends, transitioning from a modest 2.22% in 2019 to a negative 2.93% in 2020. A recovery to 3.05% in 2021 served as a precursor to a sharp increase in profitability, with the margin peaking at 11.18% in 2022. The margin remained robust in 2023 at 9.44%, indicating that while revenues and EBITDA declined, the segment maintained a significantly higher efficiency of profit generation than was observed between 2019 and 2021.

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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	6,171)	5,772)	5,410)	5,061)	3,594)
Segment revenues	10,508)	10,590)	9,619)	8,438)	8,760)
Segment Profitability Ratio
Segment profit margin¹	58.73%	54.50%	56.24%	59.98%	41.03%

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 × 6,171 ÷ 10,508 = 58.73%

The Midstream segment exhibited a strong positive trajectory in profitability and operational efficiency from 2019 through 2023. While revenues experienced moderate fluctuations, the consistent growth in adjusted EBITDA indicates a successful expansion of the segment's earning capacity and overall operational scale.

Segment Adjusted EBITDA Growth: A consistent upward trend is observed in adjusted EBITDA, which rose from US$ 3,594 million in 2019 to US$ 6,171 million in 2023. This represents an uninterrupted year-over-year increase, signaling a robust capacity to generate cash flow from midstream operations regardless of short-term revenue volatility.
Revenue Performance: Revenues demonstrated an overall upward trajectory, moving from US$ 8,760 million in 2019 to US$ 10,508 million in 2023. A marginal contraction was noted in 2020, followed by a growth period that peaked in 2022 at US$ 10,590 million before stabilizing in the final year of the analysis.
Profit Margin Analysis: The segment profit margin underwent a significant expansion between 2019 and 2020, increasing from 41.03% to 59.98%. Although a period of slight contraction followed, with margins dipping to 54.50% by 2022, a recovery was observed in 2023 as the margin rose to 58.73%. The overall increase from 2019 levels suggests enhanced operational leverage and improved cost management over the five-year period.

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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	0.69	0.82	0.49	0.63	1.20
Midstream	0.84	0.82	0.55	1.03	2.60

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).

An analysis of the capital expenditures to depreciation ratios reveals a systemic reduction in reinvestment levels across both reportable segments between 2019 and 2023. Both segments transitioned from a position of expansion—characterized by capital expenditures exceeding annual depreciation—to a period of maintenance-oriented spending where ratios remained predominantly below 1.0.

Refining & Marketing: A significant contraction in the investment ratio is observed, falling from 1.20 in 2019 to a period low of 0.49 in 2021. Although a recovery occurred in 2022, reaching a ratio of 0.82, a subsequent decline to 0.69 in 2023 indicates that capital expenditures have remained below the level of depreciation for four consecutive years.
Midstream: The Midstream segment exhibited the most pronounced shift in spending behavior, with the ratio plummeting from a high of 2.60 in 2019 to 0.55 by 2021. Following this sharp decline, the ratio stabilized, showing marginal growth to 0.82 in 2022 and 0.84 in 2023, suggesting a transition toward a consistent maintenance-based capital allocation strategy.

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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	1,311)	1,508)	911)	1,170)	1,999)
Segment depreciation and amortization	1,887)	1,850)	1,870)	1,857)	1,665)
Segment Financial Ratio
Segment capital expenditures to depreciation¹	0.69	0.82	0.49	0.63	1.20

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
= 1,311 ÷ 1,887 = 0.69

The Refining & Marketing segment exhibits a volatile trend in capital expenditures relative to depreciation over the five-year period ending December 31, 2023. While the period began with investment levels exceeding depreciation, a subsequent shift toward lower relative spending suggests a transition from asset expansion to a more conservative maintenance-oriented investment strategy.

Segment Capital Expenditures and Investments: Investment levels peaked in 2019 at US$ 1,999 million, followed by a significant contraction that reached a low of US$ 911 million in 2021. A recovery in spending was observed in 2022, with expenditures rising to US$ 1,508 million, before moderating to US$ 1,311 million in 2023.
Segment Depreciation and Amortization: Depreciation and amortization expenses remained relatively stable and showed a gradual upward trajectory, increasing from US$ 1,665 million in 2019 to US$ 1,887 million in 2023. This stability indicates a consistent base of depreciable assets despite the fluctuations in new capital allocations.
Capital Expenditures to Depreciation Ratio: The ratio demonstrates a clear pivot in investment intensity. In 2019, a ratio of 1.20 indicated that the segment was investing in new assets at a rate higher than the consumption of existing ones. This trend reversed sharply in 2020 (0.63) and 2021 (0.49), signaling a period of reduced capital intensity. Although the ratio improved to 0.82 in 2022, it retreated to 0.69 in 2023, remaining consistently below the 1.0 threshold for four consecutive years, which implies that capital reinvestment has not fully offset annual depreciation since 2019.

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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	1,105)	1,069)	731)	1,398)	3,290)
Segment depreciation and amortization	1,320)	1,310)	1,329)	1,353)	1,267)
Segment Financial Ratio
Segment capital expenditures to depreciation¹	0.84	0.82	0.55	1.03	2.60

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
= 1,105 ÷ 1,320 = 0.84

An analysis of the midstream segment's capital allocation reveals a significant shift in investment strategy between 2019 and 2023. While depreciation expenses remained consistent, capital expenditures experienced a sharp decline followed by a period of moderate recovery.

Segment Capital Expenditures and Investments: A substantial reduction in spending occurred between 2019 and 2021, with investments falling from 3,290 million US$ to 731 million US$. This represents a sharp contraction in capital deployment. Following the 2021 trough, a gradual recovery is observed, with expenditures increasing to 1,069 million US$ in 2022 and reaching 1,105 million US$ by December 31, 2023.
Segment Depreciation and Amortization: Depreciation and amortization expenses remained remarkably stable throughout the five-year period, fluctuating narrowly between 1,267 million US$ and 1,353 million US$. This stability indicates a consistent base of depreciable assets and a predictable amortization schedule, contrasting with the volatility observed in new capital investments.
Capital Expenditures to Depreciation Ratio: The ratio exhibits a volatile trend that reflects changing investment priorities. In 2019, a ratio of 2.60 indicated an aggressive expansion of the asset base, where investments significantly exceeded depreciation. This trend reversed sharply, with the ratio falling to 1.03 in 2020 and further declining to 0.55 in 2021, signaling a period where capital reinvestment was insufficient to replace the book value of expiring assets. Between 2022 and 2023, the ratio trended upward to 0.84, suggesting a gradual return toward asset maintenance, although investment levels have not yet returned to the expansionary levels seen in 2019 or the replacement threshold of 1.0.

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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	13,551)	19,261)	3,518)	(1,939)	2,367)
Retail	—)	—)	—)	—)	1,582)
Midstream	6,171)	5,772)	5,410)	5,061)	3,594)
Total	19,722)	25,033)	8,928)	3,122)	7,543)

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).

Total adjusted EBITDA exhibited substantial volatility over the five-year period from 2019 to 2023, characterized by a sharp contraction in 2020 followed by an unprecedented expansion in 2022 and a moderate normalization in 2023.

Refining & Marketing Segment: This segment represents the primary source of volatility within the portfolio. A significant downturn occurred in 2020, where adjusted EBITDA fell to negative US$ 1,939 million. This was followed by a rapid recovery and a massive surge to US$ 19,261 million in 2022, before declining to US$ 13,551 million in 2023. The segment's performance heavily dictates the overall fluctuations in total adjusted EBITDA.
Midstream Segment: The midstream operations demonstrated a consistent and linear growth trajectory, contrasting sharply with the volatility seen in refining. Adjusted EBITDA increased every year without exception, rising from US$ 3,594 million in 2019 to US$ 6,171 million by the end of 2023. This segment provides a stabilizing effect on the total earnings profile.
Aggregate Performance Trends: Total adjusted EBITDA decreased from US$ 7,543 million in 2019 to US$ 3,122 million in 2020, before climbing to a peak of US$ 25,033 million in 2022. The subsequent decline to US$ 19,722 million in 2023 suggests a correction from the 2022 highs. The overall trend indicates that while the midstream segment provides steady growth, the total financial outcome remains highly sensitive to the cyclical performance of the refining and marketing operations.

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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	143,575)	172,205)	115,494)	66,247)	106,742)
Retail	—)	—)	—)	—)	33,067)
Midstream	10,508)	10,590)	9,619)	8,438)	8,760)
Total	154,083)	182,795)	125,113)	74,685)	148,569)

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).

Total revenues exhibited significant volatility between 2019 and 2023, characterized by a sharp contraction in 2020 followed by a substantial recovery and a peak in 2022. The overall revenue trajectory aligns closely with the performance of the Refining and Marketing segment, which serves as the primary driver of total financial turnover.

Refining and Marketing Revenue Trends: This segment experienced a precipitous decline in 2020, falling to 66,247 million US dollars from 106,742 million US dollars in 2019. A strong recovery followed, with revenues climbing to 115,494 million US dollars in 2021 and peaking at 172,205 million US dollars in 2022. By 2023, revenue moderated to 143,575 million US dollars, though it remained substantially higher than 2019 and 2021 levels.
Midstream Revenue Stability: The Midstream segment demonstrated consistent and stable performance relative to other business lines. Revenues remained within a narrow range, starting at 8,760 million US dollars in 2019 and ending at 10,508 million US dollars in 2023. The gradual upward trajectory suggests a steady revenue stream that is significantly less susceptible to the market volatility affecting refining activities.
Retail Segment Reporting: A shift in reporting is evident regarding the Retail segment, which recorded 33,067 million US dollars in 2019 but shows no recorded values for the subsequent four years. This indicates a structural reorganization or a change in the aggregation of retail revenues within other reportable segments after the 2019 fiscal year.
Aggregate Revenue Dynamics: Total revenue decreased by approximately 49.7% from 2019 to 2020, reaching a low of 74,685 million US dollars. The subsequent growth peaked in 2022 at 182,795 million US dollars, representing a significant expansion before correcting to 154,083 million US dollars in 2023.

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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	1,887)	1,850)	1,870)	1,857)	1,665)
Retail	—)	—)	—)	—)	528)
Midstream	1,320)	1,310)	1,329)	1,353)	1,267)
Corporate	100)	55)	165)	165)	—)
Total	3,307)	3,215)	3,364)	3,375)	3,460)

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).

Total depreciation and amortization expenditures exhibited relative stability between 2019 and 2023, despite a slight overall contraction from the period's peak. Total costs declined from US$ 3,460 million in 2019 to a low of US$ 3,215 million in 2022, followed by a recovery to US$ 3,307 million by the end of 2023.

Refining & Marketing Segment: This segment constitutes the primary driver of depreciation and amortization costs. A notable increase occurred between 2019 and 2020, with expenditures rising from US$ 1,665 million to US$ 1,857 million. Over the ensuing three years, costs remained elevated and relatively flat, peaking at US$ 1,887 million in 2023, which suggests a consistent level of capital asset intensity.
Midstream Segment: The Midstream segment demonstrated a stable trend in amortization. After an initial increase from US$ 1,267 million in 2019 to US$ 1,353 million in 2020, costs experienced a slight downward adjustment, fluctuating narrowly between US$ 1,310 million and US$ 1,329 million from 2021 through 2023.
Retail and Corporate Segments: A significant structural change is observed in the Retail segment, which reported US$ 528 million in 2019 but showed no recorded depreciation and amortization in subsequent years. Conversely, Corporate expenditures emerged in 2020 at US$ 165 million, decreased significantly to US$ 55 million in 2022, and rebounded to US$ 100 million in 2023.

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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	1,311)	1,508)	911)	1,170)	1,999)
Retail	—)	—)	—)	—)	607)
Midstream	1,105)	1,069)	731)	1,398)	3,290)
Total	2,416)	2,577)	1,642)	2,568)	5,896)

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).

Total capital expenditures across reportable segments experienced significant volatility between 2019 and 2023. A substantial contraction occurred from 2019 to 2021, where total investments fell from 5,896 million US$ to 1,642 million US$, representing a decline of approximately 72%. A partial recovery followed in 2022, with spending increasing to 2,577 million US$, before stabilizing at 2,416 million US$ in 2023.

Refining and Marketing Expenditures: Investments in this segment followed a downward trajectory from 2019 through 2021, decreasing from 1,999 million US$ to 911 million US$. A rebound occurred in 2022, with spending rising to 1,508 million US$, followed by a moderate reduction to 1,311 million US$ in 2023.
Midstream Capital Allocation: The Midstream segment demonstrated the most pronounced volatility of all segments. Expenditures dropped sharply from a peak of 3,290 million US$ in 2019 to a low of 731 million US$ in 2021. Since 2021, this segment has shown a consistent recovery trend, increasing to 1,069 million US$ in 2022 and reaching 1,105 million US$ in 2023.
Retail Segment Reporting: Capital expenditure for the Retail segment was recorded at 607 million US$ in 2019, with no subsequent values reported for the remainder of the analyzed period.
Aggregate Investment Trends: The overall investment pattern indicates a sharp reduction in capital deployment during the 2020-2021 period, followed by a stabilization phase in 2022 and 2023. The total capital expenditure for 2023 remains significantly lower than the 2019 peak, suggesting a shift in the scale of capital investment across the primary operating segments.

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