UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2020~~2021



☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-35054

Marathon Petroleum Corporation

(Exact name of registrant as specified in its charter)



Delaware						27-1284632
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

539 South Main Street,, Findlay,, Ohio45840-3229

(Address of principal executive offices) (Zip code)

(~~419~~) (419) 422-2121

(Registrant’s telephone number, including area code)



Securities registered pursuant to Section 12(b) of the Act
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.01	MPC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.) Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☑ Accelerated Filer ☐ Non-accelerated Filer ☐ Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange ~~Act.~~Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☑

There were ~~650,260,897~~652,649,795 shares of Marathon Petroleum Corporation common stock outstanding as of ~~May 1, 2020~~April 30, 2021.

Table of Contents

MARATHON PETROLEUM CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, ~~2020~~2021

TABLE OF CONTENTS

Unless otherwise stated or the context otherwise indicates, all references in this Form 10-Q to “MPC,” “us,” “our,” “we” or “the Company” mean Marathon Petroleum Corporation and its consolidated subsidiaries.

Table of Contents

GLOSSARY OF TERMS

Throughout this report, the following company or industry specific terms and abbreviations are used:



ANS		~~Alaskan~~Alaska North Slope crude oil, an oil index benchmark price
ASC		Accounting Standards Codification
ASU		Accounting Standards Update
barrel		One stock tank barrel, or 42 United States gallons liquid volume, used in reference to crude oil or other liquid hydrocarbons
~~CARB~~CBOB		~~California Air Resources Board~~
~~CARBOB~~	~~California Reformulated Gasoline Blendstock for Oxygenate Blending~~
~~CBOB~~	Conventional Blending for Oxygenate Blending
EBITDA (a non-GAAP financial measure)		Earnings Before Interest, Tax, Depreciation and Amortization
EPA		United States Environmental Protection Agency
~~FASB~~GAAP		~~Financial Accounting Standards Board~~
~~GAAP~~	Accounting principles generally accepted in the United States
~~LCM~~LA CARB		California Air Resources Board
LA CARBOB		California Reformulated Gasoline Blendstock for Oxygenate Blending
LCM		Lower of cost or market
LIFO		Last in, first out, an inventory costing method
~~LIBOR~~LLS		~~London Interbank Offered Rate~~
~~LLS~~	Louisiana Light Sweet crude oil, an oil index benchmark price
mbpd		Thousand barrels per day
~~MMBtu~~MEH		Magellan East Houston crude oil, an oil index benchmark price
MMBtu		One million British thermal units, an energy measurement
~~MMcf/d~~NGL		~~One million cubic feet of natural gas per day~~
~~NGL~~	Natural gas liquids, such as ethane, propane, butanes and natural gasoline
NYMEX		New York Mercantile Exchange
OTC		Over-the-Counter
~~RIN~~PP&E		Property, plant and equipment
RIN		Renewable Identification Number
SEC		United States Securities and Exchange Commission
ULSD		Ultra-low sulfur diesel
USGC		U.S. Gulf Coast
VIE		Variable interest entity
WTI		West Texas Intermediate crude oil, an oil index benchmark price

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MARATHON PETROLEUM CORPORATION

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

~~(Unaudited)~~


	Three Months Ended March 31,
(In millions, except per share data)		2021		2020
Revenues and other income:
Sales and other operating revenues		$	22,711	$	22,204
Income (loss) from equity method investments(a)		91		(1,233)
Net gain on disposal of assets		3		3
Other income		77		23
Total revenues and other income		22,882		20,997
Costs and expenses:
Cost of revenues (excludes items below)		21,084		20,342
LCM inventory valuation adjustment		0		3,185
Impairment expense		0		7,822
Depreciation and amortization		844		863
Selling, general and administrative expenses		575		742

Other taxes		162		198
Total costs and expenses		22,665		33,152
Income (loss) from continuing operations		217		(12,155)
Net interest and other financial costs		353		332
Loss from continuing operations before income taxes		(136)		(12,487)
Provision (benefit) for income taxes on continuing operations		34		(1,951)
Loss from continuing operations, net of tax		(170)		(10,536)
Income from discontinued operations, net of tax		234		318
Net income (loss)		64		(10,218)
Less net income (loss) attributable to:
Redeemable noncontrolling interest		20		20
Noncontrolling interests		286		(1,004)
Net loss attributable to MPC		$	(242)	$	(9,234)

Per share data (See Note 8)
Basic:
Continuing operations		$	(0.73)	$	(14.74)
Discontinued operations		0.36		0.49
Net loss per share		$	(0.37)	$	(14.25)

Weighted average shares outstanding		651		648
Diluted:
Continuing operations		$	(0.73)	$	(14.74)
Discontinued operations		0.36		0.49
Net loss per share		$	(0.37)	$	(14.25)

Weighted average shares outstanding		651		648

Three Months Ended
March 31,
(In millions, except per share data) 2020 2019
Revenues and other income:
Sales and other operating revenues $ 25,215
$ 28,253
Income (loss) from equity method investments^(a)
(1,210 ) 99
Net gain on disposal of assets 4
214
Other income 71
35
Total revenues and other income 24,080
28,601
Costs and expenses:
Cost of revenues (excludes items below) 22,821
25,960
Inventory market valuation adjustment 3,220
—
Impairment expense 7,822
—
Depreciation and amortization 962
919
Selling, general and administrative expenses 821
867
Other taxes 251
186
Total costs and expenses 35,897
27,932
Income (loss) from operations (11,817 ) 669
Net interest and other financial costs 338
306
Income (loss) before income taxes (12,155 ) 363
Provision (benefit) for income taxes (1,937 ) 104
Net income (loss) (10,218 ) 259
Less net income (loss) attributable to:
Redeemable noncontrolling interest 20
20
Noncontrolling interests (1,004 ) 246
Net loss attributable to MPC $ (9,234 ) $ (7 )
Per Share Data (See Note 7)
Basic:
Net loss attributable to MPC per share $ (14.25 ) $ (0.01 )
Weighted average shares outstanding 648
673
Diluted:
Net loss attributable to MPC per share $ (14.25 ) $ (0.01 )
Weighted average shares outstanding 648
673

(a)


^(a)	~~The 2020 period includes $1,315 million of impairment expense. See Note 4 for further information.~~

The ~~accompanying notes are an integral part of these consolidated financial statements.~~

~~Table of Contents~~three months ended March 31, 2020 includes impairment expense. See Note 5 for further information.

~~MARATHON PETROLEUM CORPORATION~~

~~CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME~~

~~(Unaudited)~~

Three Months Ended
March 31,
(Millions of dollars) 2020 2019
Net income (loss) $ (10,218 ) $ 259
Other comprehensive income (loss):
Defined benefit plans:
Actuarial changes, net of tax of $1 and $6, respectively 4
(3 )
Prior service credit, net of tax of ($3) and ($8), respectively (9 ) (3 )
Other, net of tax of $0 and $0, respectively (1 ) (1 )
Other comprehensive loss (6 ) (7 )
Comprehensive income (loss) (10,224 ) 252
Less comprehensive income (loss) attributable to:
Redeemable noncontrolling interest 20
20
Noncontrolling interests (1,004 ) 246
Comprehensive loss attributable to MPC $ (9,240 ) $ (14 )

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

MARATHON PETROLEUM CORPORATION

~~CONSOLIDATED BALANCE SHEETS~~

~~(Unaudited)~~

(Millions of dollars, except share data) March 31,
2020 December 31,
2019
Assets
Current assets:
Cash and cash equivalents $ 1,690
$ 1,527
Receivables, less allowance for doubtful accounts of $18 and $17, respectively 5,583
7,479
Inventories 7,445
10,243
Other current assets 975
921
Total current assets 15,693
20,170
Equity method investments 5,656
6,898
Property, plant and equipment, net 45,333
45,615
Goodwill 12,710
20,040
Right of use assets 2,562
2,459
Other noncurrent assets 4,363
3,374
Total assets $ 86,317
$ 98,556
Liabilities
Current liabilities:
Accounts payable $ 8,106
$ 11,623
Payroll and benefits payable 1,107
1,126
Accrued taxes 1,098
1,186
Debt due within one year 1,710
711
Operating lease liabilities 630
604
Other current liabilities 918
897
Total current liabilities 13,569
16,147
Long-term debt 29,899
28,127
Deferred income taxes 5,772
6,392
Defined benefit postretirement plan obligations 1,703
1,643
Long-term operating lease liabilities 1,949
1,875
Deferred credits and other liabilities 1,229
1,265
Total liabilities 54,121
55,449
Commitments and contingencies (see Note 22)

Redeemable noncontrolling interest 968
968
Equity
MPC stockholders’ equity:
Preferred stock, no shares issued and outstanding (par value $0.01 per share, 30 million shares authorized) —
—
Common stock:
Issued – 979 million and 978 million shares (par value $0.01 per share, 2 billion shares authorized) 10
10
Held in treasury, at cost – 329 million and 329 million shares (15,145 ) (15,143 )
Additional paid-in capital 33,169
33,157
Retained earnings 6,380
15,990
Accumulated other comprehensive loss (326 ) (320 )
Total MPC stockholders’ equity 24,088
33,694
Noncontrolling interests 7,140
8,445
Total equity 31,228
42,139
Total liabilities, redeemable noncontrolling interest and equity $ 86,317
$ 98,556

~~The accompanying notes are an integral part of these consolidated financial statements.~~

~~Table of Contents~~

~~MARATHON PETROLEUM CORPORATION~~

CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~COMPREHENSIVE INCOME (Unaudited)

~~(Unaudited)~~

Three Months Ended
March 31,
(Millions of dollars) 2020 2019
Operating activities:
Net income (loss) $ (10,218 ) $ 259
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of deferred financing costs and debt discount 14
—
Impairment expense 7,822
—
Depreciation and amortization 962
919
Inventory market valuation adjustment 3,220
—
Pension and other postretirement benefits, net 55
52
Deferred income taxes (625 ) 127
Net gain on disposal of assets (4 ) (214 )
(Income) loss from equity method investments^(a)
1,210
(99 )
Distributions from equity method investments 175
148
Changes in income tax receivable (1,335 ) (19 )
Changes in the fair value of derivative instruments (47 ) 29
Changes in operating assets and liabilities, net of effects of businesses acquired:
Current receivables 1,899
(1,018 )
Inventories (422 ) (4 )
Current accounts payable and accrued liabilities (3,453 ) 1,483
Right of use assets and operating lease liabilities, net (4 ) (1 )
All other, net (17 ) (39 )
Net cash provided by (used in) operating activities (768 ) 1,623
Investing activities:
Additions to property, plant and equipment (1,062 ) (1,241 )
Disposal of assets 56
24
Investments – acquisitions, loans and contributions (169 ) (325 )
– redemptions, repayments and return of capital 77
2
All other, net 10
20
Net cash used in investing activities (1,088 ) (1,520 )
Financing activities:
Long-term debt – borrowings 4,250
2,604
– repayments (1,521 ) (2,031 )
Issuance of common stock 4
2
Common stock repurchased —
(885 )
Dividends paid (377 ) (354 )
Distributions to noncontrolling interests (320 ) (325 )
Contributions from noncontrolling interests —
95
All other, net (15 ) (26 )
Net cash provided by (used in) financing activities 2,021
(920 )
Net increase (decrease) in cash, cash equivalents and restricted cash 165
(817 )
Cash, cash equivalents and restricted cash at beginning of period 1,529
1,725
Cash, cash equivalents and restricted cash at end of period $ 1,694
$ 908


^(a)	~~The 2020 period includes $1,315 million of impairment expense. See Note 4 for further information.~~


	Three Months Ended March 31,
(Millions of dollars)		2021		2020
Net income (loss)		$	64	$	(10,218)
Other comprehensive income (loss):
Defined benefit plans:
Actuarial changes, net of tax of $3 and $1, respectively		9		4
Prior service, net of tax of $(3) and $(3), respectively		(8)		(9)
Other, net of tax of $0 and $0, respectively		0		(1)
Other comprehensive income (loss)		1		(6)
Comprehensive income (loss)		65		(10,224)
Less comprehensive income (loss) attributable to:
Redeemable noncontrolling interest		20		20
Noncontrolling interests		286		(1,004)
Comprehensive loss attributable to MPC		$	(241)	$	(9,240)

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

MARATHON PETROLEUM CORPORATION

CONSOLIDATED BALANCE SHEETS (Unaudited)


(Millions of dollars, except share data)	March 31, 2021		December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	624	$	415
Receivables, less allowance for doubtful accounts of $44 and $18, respectively	7,468		5,760
Inventories	8,407		7,999
Other current assets	2,695		2,724
Assets held for sale	11,167		11,389
Total current assets	30,361		28,287
Equity method investments	5,435		5,422
Property, plant and equipment, net	38,491		39,035
Goodwill	8,256		8,256
Right of use assets	1,514		1,521
Other noncurrent assets	2,594		2,637
Total assets	$	86,651	$	85,158
Liabilities
Current liabilities:
Accounts payable	$	9,953	$	7,803
Payroll and benefits payable	501		732
Accrued taxes	1,034		1,105
Debt due within one year	1,786		2,854
Operating lease liabilities	475		497
Other current liabilities	744		822
Liabilities held for sale	1,592		1,850
Total current liabilities	16,085		15,663
Long-term debt	30,694		28,730
Deferred income taxes	6,215		6,203
Defined benefit postretirement plan obligations	1,958		2,121
Long-term operating lease liabilities	1,007		1,014
Deferred credits and other liabilities	1,213		1,207
Total liabilities	57,172		54,938
Commitments and contingencies (see Note 22)	0		0
Redeemable noncontrolling interest	968		968
Equity
MPC stockholders’ equity:
Preferred stock, 0 shares issued and outstanding (par value $0.01 per share, 30 million shares authorized)	0		0
Common stock:
Issued – 981 million and 980 million shares (par value $0.01 per share, 2 billion shares authorized)	10		10
Held in treasury, at cost – 329 million and 329 million shares	(15,158)		(15,157)
Additional paid-in capital	33,222		33,208
Retained earnings	4,029		4,650
Accumulated other comprehensive loss	(511)		(512)
Total MPC stockholders’ equity	21,592		22,199
Noncontrolling interests	6,919		7,053
Total equity	28,511		29,252
Total liabilities, redeemable noncontrolling interest and equity	$	86,651	$	85,158

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

MARATHON PETROLEUM CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	Three Months Ended March 31,
(Millions of dollars)	2021		2020
Operating activities:
Net income (loss)	$	64	$	(10,218)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Amortization of deferred financing costs and debt discount	22		14
Impairment expense	0		7,822
Depreciation and amortization	844		863
LCM inventory valuation adjustment	0		3,185
Pension and other postretirement benefits, net	(158)		55
Deferred income taxes	24		(691)
Net gain on disposal of assets	(3)		(3)
(Income) loss from equity method investments(a)	(91)		1,233
Distributions from equity method investments	142		147
Income from discontinued operations	(234)		(318)
Changes in income tax receivable	54		(1,335)
Changes in the fair value of derivative instruments	(43)		(47)
Changes in operating assets and liabilities, net of effects of businesses acquired:
Current receivables	(1,723)		1,856
Inventories	(408)		(397)
Current accounts payable and accrued liabilities	1,821		(3,375)
Right of use assets and operating lease liabilities, net	5		(6)
All other, net	(51)		(1)
Cash provided by (used in) operating activities - continuing operations	265		(1,216)
Cash provided by operating activities - discontinued operations	189		448
Net cash provided by (used in) operating activities	454		(768)
Investing activities:
Additions to property, plant and equipment	(304)		(951)

Disposal of assets	76		48
Investments – acquisitions and contributions	(51)		(169)
– redemptions, repayments and return of capital	1		77
All other, net	98		10
Cash used in investing activities - continuing operations	(180)		(985)
Cash used in investing activities - discontinued operations	(87)		(103)
Net cash used in investing activities	(267)		(1,088)
Financing activities:
Commercial paper – issued	6,049		0
– repayments	(5,356)		0
Long-term debt – borrowings	6,785		4,250
– repayments	(6,613)		(1,521)

Issuance of common stock	23		4

Dividends paid	(379)		(377)
Distributions to noncontrolling interests	(320)		(320)

Repurchases of noncontrolling interests	(155)		0
All other, net	(18)		(15)
Net cash provided by financing activities	16		2,021
Net change in cash, cash equivalents and restricted cash	$	203	$	165

(a)The three months ended March 31, 2020 includes impairment expense. See Note 5 for further information.

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

MARATHON PETROLEUM CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	Three Months Ended March 31,
(Millions of dollars)	2021		2020
Cash, cash equivalents and restricted cash balances:
Continuing operations - beginning of period	$	416	$	1,395
Discontinued operations - beginning of period(a)	140		134
Less: Discontinued operations - end of period(a)	134		89
Continuing operations - end of period	$	625	$	1,605

(a)Reported as assets held for sale on our consolidated balance sheets.

The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents

MARATHON PETROLEUM CORPORATION

CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMBALE NONCONTROLLING INTEREST

(Unaudited)


	MPC Stockholders’ Equity
	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Non-controlling Interests		Total Equity		Redeemable Non-controlling Interest
(Shares in millions; amounts in millions of dollars)	Shares	Amount		Shares	Amount
Balance as of December 31, 2020	980	$	10	(329)	$	(15,157)	$	33,208	$	4,650	$	(512)	$	7,053	$	29,252	$	968
Net income (loss)	—	—		—	—		—		(242)		—		286		44		20
Dividends declared on common stock ($0.58 per share)	—	—		—	—		—		(379)		—		—		(379)		—
Distributions to noncontrolling interests	—	—		—	—		—		—		—		(300)		(300)		(20)
Other comprehensive income	—	—		—	—		—		—		1		—		1		—
Stock based compensation	1	—		0	(1)		18		—		—		0		17		—
Equity transactions of MPLX	—	—		—	—		(4)		—		—		(120)		(124)		—

Balance as of March 31, 2021	981	$	10	(329)	$	(15,158)	$	33,222	$	4,029	$	(511)	$	6,919	$	28,511	$	968

MPC Stockholders’ Equity
Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Non-controlling Interests Total Equity Redeemable Non-controlling Interest
(Shares in millions;
amounts in millions of dollars)
Shares Amount Shares Amount
Balance as of December 31, 2019 978
$ 10
(329 ) $ (15,143 ) $ 33,157
$ 15,990
$ (320 ) $ 8,445
$ 42,139
$ 968
Net income (loss) —
—
—
—
—
(9,234 ) —
(1,004 ) (10,238 ) 20
Dividends declared on common stock ($0.58 per share) —
—
—
—
—
(377 ) —
—
(377 ) —
Distributions to noncontrolling interests —
—
—
—
—
—
—
(300 ) (300 ) (20 )
Other comprehensive loss —
—
—
—
—
—
(6 ) —
(6 ) —
Stock based compensation 1
—
—
(2 ) 17
—
—
1
16
—
Equity transactions of MPLX —
—
—
—
(5 ) —
—
(2 ) (7 ) —
Other —
—
—
—
—
1
—
—
1
—
Balance as of March 31, 2020 979
$ 10
(329 ) $ (15,145 ) $ 33,169
$ 6,380
$ (326 ) $ 7,140
$ 31,228
$ 968

MPC Stockholders’ Equity
Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Non-controlling Interests Total Equity Redeemable Non-controlling Interest
(Shares in millions;
amounts in millions of dollars) Shares Amount Shares Amount
Balance as of December 31, 2018 975
$ 10
(295 ) $ (13,175 ) $ 33,729
$ 14,755
$ (144 ) $ 8,874
$ 44,049
$ 1,004
Net income (loss) —
—
—
—
—
(7 ) —
246
239
20
Dividends declared on common stock ($0.53 per share) —
—
—
—
—
(357 ) —
—
(357 ) —
Distributions to noncontrolling interests —
—
—
—
—
—
—
(305 ) (305 ) (20 )
Contributions from noncontrolling interests —
—
—
—
—
—
—
95
95
—
Other comprehensive loss —
—
—
—
—
—
(7 ) —
(7 ) —
Shares repurchased —
—
(14 ) (885 ) —
—
—
—
(885 ) —
Stock based compensation 1
—
—
(3 ) 32
—
—
(1 ) 28
—
Equity transactions of MPLX & ANDX —
—
—
—
3
—
—
(1 ) 2
—
Other —
—
—
—
—
—
—
(1 ) (1 ) —
Balance as of March 31, 2019 976
$ 10
(309 ) $ (14,063 ) $ 33,764
$ 14,391
$ (151 ) $ 8,907
$ 42,858
$ 1,004


	MPC Stockholders’ Equity
	Common Stock			Treasury Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Non-controlling Interests		Total Equity		Redeemable Non-controlling Interest
(Shares in millions; amounts in millions of dollars)	Shares	Amount		Shares	Amount
Balance as of December 31, 2019	978	$	10	(329)	$	(15,143)	$	33,157	$	15,990	$	(320)	$	8,445	$	42,139	$	968
Net income (loss)	—	—		—	—		—		(9,234)		—		(1,004)		(10,238)		20
Dividends declared on common stock ($0.58 per share)	—	—		—	—		—		(377)		—		—		(377)		—
Distributions to noncontrolling interests	—	—		—	—		—		—		—		(300)		(300)		(20)

Other comprehensive loss	—	—		—	—		—		—		(6)		—		(6)		—

Stock based compensation	1	—		0	(2)		17		—		—		1		16		—
Equity transactions of MPLX	—	—		—	—		(5)		—		—		(2)		(7)		—
Other	—	—		—	—		—		1		—		0		1		—
Balance as of March 31, 2020	979	$	10	(329)	$	(15,145)	$	33,169	$	6,380	$	(326)	$	7,140	$	31,228	$	968

The accompanying notes are an integral part of these consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

Description of the Business

We are a leading, integrated, downstream energy company headquartered in Findlay, Ohio. We operate the nation's largest refining ~~system with more than 3 million barrels per day of crude oil capacity across 16 refineries.~~system. We sell refined products to wholesale marketing customers domestically and internationally, to buyers on the spot market ~~to consumers through our Retail business segment~~ and to independent entrepreneurs who operate ~~approximately 6,900~~ branded outlets. ~~Our retail operations own and operate approximately 3,880 retail transportation fuel and convenience stores across the United States and~~We also sell transportation fuel to consumers through ~~approximately 1,070~~ direct dealer locations under long-term supply contracts. MPC’s midstream operations are primarily conducted through MPLX LP (“MPLX”), which owns and operates crude oil and light product transportation and logistics infrastructure as well as gathering, processing and fractionation assets. We own the general partner and a majority limited partner interest in MPLX.

On ~~October 31, 2019,~~August 2, 2020, we ~~announced~~entered into a definitive agreement to sell Speedway, our ~~intention to separate our~~company-owned and operated retail transportation fuel and convenience store business, ~~which is operated primarily under the Speedway brand, into an independent, publicly traded company through a tax-free distribution~~ to ~~MPC shareholders of publicly traded stock~~7-Eleven, Inc. (“7-Eleven”) for $21 billion in the new independent retail transportation fuel and convenience store company. This transaction is targeted to be completed in the fourth quarter of 2020, however timing could change given the COVID-19 related impacts to the business environment and access to capital markets. This transaction iscash, subject to ~~market, regulatory~~certain adjustments based on the levels of cash, debt and working capital at closing and certain other items. The taxable transaction is expected to close in the second quarter of 2021, subject to customary closing conditions ~~including final approval by~~and the ~~MPC Board of Directors,~~ receipt of ~~customary assurances regarding the intended tax-free nature~~regulatory approvals.

As a result of the ~~transaction, and the effectiveness of a registration statement~~agreement to ~~be filed with the SEC. The~~sell Speedway, ~~business is currently a reporting unit within our Retail segment. MPC will retain~~ its ~~direct dealer business, which is also included in the Retail segment as currently reported. Subsequent to the completion of the separation, the historical~~ results ~~of the Speedway business will be presented~~are reported separately as discontinued operations, net of tax, in our consolidated ~~financial statements.~~statements of income for all periods presented and its assets and liabilities are presented in our consolidated balance sheets as assets and liabilities held for sale. In addition, we separately disclosed the operating and investing cash flows of Speedway as discontinued operations within our consolidated statements of cash flow. See Note 3 for discontinued operations disclosures.

Basis of Presentation

All significant intercompany transactions and accounts have been eliminated.

~~Certain prior period financial statement amounts have been reclassified to conform to current period presentation.~~

These interim consolidated financial statements are unaudited; however, in the opinion of our management, these statements reflect all adjustments necessary for a fair statement of the results for the periods reported. All such adjustments are of a normal, recurring nature unless otherwise disclosed. These interim consolidated financial statements, including the notes, have been prepared in accordance with the rules of the SEC applicable to interim period financial statements and do not include all of the information and disclosures required by GAAP for complete financial statements.

These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. The results of operations for the three months ended March 31, ~~2020~~2021 are not necessarily indicative of the results to be expected for the full year.

In accordance with ASC 205, Discontinued Operations, intersegment sales from our Refining & Marketing segment to Speedway are no longer eliminated as intercompany transactions and are now presented within sales and other operating revenue, since we will continue to supply fuel to Speedway subsequent to the sale to 7-Eleven. All periods presented have been retrospectively adjusted to reflect this change. Additionally, beginning August 2, 2020, in accordance with ASC 360, Property, Plant, and Equipment, we ceased recording depreciation and amortization for Speedway’s property, plant and equipment, finite-lived intangible assets and right of use lease assets.

2. ACCOUNTING STANDARDS

Recently Adopted

Effective January 1, 2020, we adopted ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” using the modified retrospective transition method. The amendment requires entities to consider a broader range of information to estimate expected credit losses, which may result in earlier recognition of losses. The ASU requires the company to utilize an expected loss methodology in place of the incurred loss methodology for financial instruments, including trade receivables, and off-balance sheet credit exposures. Adoption of the standard did not have a material impact on our financial statements.

We are exposed to credit losses primarily through our sales of refined petroleum products, crude oil and midstream services. We assess each customer’s ability to pay through our credit review process. The credit review process considers various factors such as external credit ratings, a review of financial statements to determine liquidity, leverage, trends and business specific risks, market information, pay history and our business strategy. Customers that do not qualify for payment terms are required to prepay or provide a letter of credit. We monitor our ongoing credit exposure through timely review of customer payment activity. At March 31, 2020, we reported $5,583 million of accounts and notes receivable, net of allowances of $18 million.

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~~We are also exposed to credit losses from off-balance sheet exposures, such as guarantees of joint venture debt. See Note 22 for more information on these off-balance sheet exposures.~~

~~We also~~ adopted the following ASU during the first three months of ~~2020,~~2021, which ~~also~~ did not have a material impact to our financial statements or financial statement disclosures:


ASU			Effective Date
2019-12		Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes	January 1, 2021

~~ASU~~		~~Effective Date~~
~~2018-13~~	~~Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement~~	~~January 1, 2020~~

~~Not Yet Adopted~~3. DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE

~~ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting~~On August 2, 2020, we entered into a definitive agreement to sell Speedway to 7-Eleven for ~~Income Taxes~~

~~In December 2019, the FASB issued new guidance~~$21 billion, subject to ~~simplify the accounting for income taxes. Amendments include removal of~~ certain ~~exceptions to the general principles of ASC 740 and simplification in several other areas such as accounting for a franchise tax or similar tax that is partially~~adjustments based on ~~income.~~the levels of cash, debt and working capital at closing and certain other items. The ~~change~~taxable transaction is ~~effective for fiscal years beginning after December 15, 2020,~~expected to close in the second quarter of 2021, subject to customary closing conditions and ~~interim periods within those fiscal years. Early adoption is permitted in any interim or annual period, with any adjustments reflected as~~the receipt of regulatory approvals.

As a result of the agreement to sell Speedway, its results are reported separately as discontinued operations, net of tax, in our consolidated statements of income for all periods presented and its assets and liabilities are presented in our consolidated balance sheets as assets and liabilities held for sale. Additionally, beginning August 2, 2020, in accordance with ASC 360,

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Property, Plant, and Equipment, we ceased recording depreciation and amortization for Speedway’s property, plant and equipment, finite-lived intangible assets and right of use lease assets. In addition, we separately disclosed the ~~fiscal year~~operating and investing cash flows of ~~adoption. We do not expect~~Speedway as discontinued operations within our consolidated statements of cash flow.

The following tables present Speedway results as reported in income from discontinued operations, net of tax, within our consolidated statements of income and the ~~application~~carrying value of ~~this ASU to have a material impact~~assets and liabilities as presented within assets and liabilities held for sale on our consolidated ~~financial statements.~~balance sheets.


	Three Months Ended March 31,
(In millions)		2021		2020
Total revenues and other income		$	5,339	$	5,560
Costs and expenses:
Cost of revenues (excludes items below)		4,906		4,956
LCM inventory valuation adjustment		0		35
Depreciation and amortization		2		99
Selling, general and administrative expenses		73		79
Other taxes		51		53
Total costs and expenses		5,032		5,222
Income from operations		307		338
Net interest and other financial costs		4		6
Income before income taxes		303		332
Provision for income taxes		69		14
Income from discontinued operations, net of tax		$	234	$	318

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(In millions)	March 31, 2021		December 31, 2020
Assets
Cash and cash equivalents	$	134	$	140
Receivables	244		217
Inventories	417		438
Other current assets	36		34
Equity method investments	305		311
Property, plant and equipment, net	4,885		4,784
Goodwill	4,390		4,390
Right of use assets	587		719
Other noncurrent assets	169		168
Total assets classified as held for sale	$	11,167	$	11,201
Liabilities
Accounts payable	$	352	$	300
Payroll and benefits payable	129		168
Accrued taxes	160		178
Debt due within one year	9		8
Operating lease liabilities	77		94
Other current liabilities	154		170
Long-term debt	120		122
Defined benefit postretirement plan obligations	27		25
Long-term operating lease liabilities	486		598
Deferred credits and other liabilities	78		86
Total liabilities classified as held for sale	$	1,592	$	1,749

Separation Agreements

In connection with the definitive agreement to sell the Speedway business, we have agreed to enter into various 15-year fuel supply agreements, at closing, through which we will continue to supply fuel to Speedway subsequent to the sale to 7-Eleven. Due to our expected continuing involvement with Speedway through fuel supply agreements, intersegment sales from our Refining & Marketing segment to Speedway are no longer eliminated as intercompany transactions and are now presented within sales and other operating revenue.

Purchase of Speedway’s Interest in PFJ Southeast

During the fourth quarter of 2020, Pilot Travel Centers LLC exercised an option to purchase our 29 percent interest in PFJ Southeast LLC (“PFJ”), subject to customary closing conditions and the receipt of regulatory approvals. PFJ has been accounted for as an asset held for sale as of September 30, 2020 and is reported as the equity method investment balance in the above table.

4. MASTER LIMITED PARTNERSHIP

We own the general partner and a majority limited partner interest in MPLX, which owns and operates crude oil and light product transportation and logistics infrastructure as well as gathering, processing and fractionation assets. We control MPLX through our ownership of the general partner interest and, as of March 31, ~~2020~~2021, we owned approximately 63 percent of the outstanding MPLX common units.

~~MPLX’s Acquisition of ANDX~~Javelina Assets Held-for-Sale

On ~~July 30, 2019,~~December 23, 2020, MPLX entered into an agreement with a third party to sell all of its equity interests in MarkWest Javelina Company, L.L.C., MarkWest Javelina Pipeline Company, L.L.C. and MarkWest Gas Services, L.L.C. (collectively, “Javelina”). Javelina’s assets and liabilities have been presented within our consolidated balance sheets as assets and liabilities held for sale as of December 31, 2020. On February 12, 2021, MPLX completed the sale of Javelina.

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Unit Repurchase Program

On November 2, 2020, MPLX announced its ~~acquisition~~board authorized a unit repurchase program for the repurchase of ~~Andeavor Logistics LP (“ANDX”), and ANDX survived as a wholly owned subsidiary~~up to $1 billion of ~~MPLX. At the effective time of the ANDX acquisition, each common unit held by ANDX’s public unitholders was converted into the right to receive 1.135 MPLX common units. ANDX~~MPLX’s outstanding common units held by ~~MPC were converted into~~ the ~~right to receive 1.0328~~public.

During the three months ended March 31, 2021, 6,272,981 MPLX common ~~units. Additionally, as a result of MPLX’s acquisition of ANDX, 600,000 ANDX preferred~~ units were converted into 600,000 preferred units of MPLX (“Series B preferred units”). Series B preferred unitholders are entitled to receive, when and if declared by the board, a fixed distribution of $68.75had been repurchased at an average cost per unit ~~per annum, payable semi-annually~~of $24.78. Total cash paid for units repurchased during the three months ended March 31, 2021 was $155 million. As of March 31, 2021, MPLX had agreements to acquire 291,400 additional common units for $7 million, which settled in ~~arrears on February 15 and August 15, or the first business day thereafter, up to and including February 15, 2023. After February 15, 2023, the holders~~early April 2021. As of ~~Series B preferred units are entitled to receive cumulative, quarterly distributions payable in arrears~~March 31, 2021, $812 million remained outstanding on the ~~15th day~~program for future purchases.

MPLX may utilize various methods to effect the repurchases, which could include open market repurchases, negotiated block transactions, tender offers, accelerated unit repurchases or open market solicitations for units, some of ~~February, May, August~~which may be effected through Rule 10b5-1 plans. The timing and ~~November~~amount of ~~each year,~~repurchases will depend upon several factors, including market and business conditions, and repurchases may be initiated, suspended or ~~the first business day thereafter, based on a floating annual rate equal to the three month LIBOR plus 4.652 percent.~~discontinued at any time. The repurchase authorization has no expiration date.

MPC accounted for this transaction as a common control transaction, as defined by ASC 805, which resulted in an increase to noncontrolling interest and a decrease to additional paid-in capital of approximately $55 million, net of tax.AgreementsDuring the third quarter of 2019, we pushed down to MPLX the portion of the goodwill attributable to ANDX as of October 1, 2018, the date of our acquisition of Andeavor. Due to this push down of goodwill, we also recorded an incremental $642 million deferred tax liability associated with the portion of the non-deductible goodwill attributable to the noncontrolling interest in MPLX with an offsetting reduction of our additional paid-in capital balance. We have consolidated ANDX since we acquired Andeavor on October 1, 2018 in accordance with ASC 810.

~~Agreements~~

We have various long-term, fee-based commercial agreements with MPLX. Under these agreements, MPLX provides transportation, storage, distribution and marketing services to us. With certain exceptions, these agreements generally contain minimum volume commitments. These transactions are eliminated in consolidation but are reflected as intersegment transactions between our Refining & Marketing and Midstream segments. We also have agreements with MPLX that establish fees for operational and management services provided between us and MPLX and for executive management services and certain general and administrative services provided by us to MPLX. These transactions are eliminated in consolidation but are reflected as intersegment transactions between our Corporate and Midstream segments.

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Noncontrolling Interest

As a result of equity transactions of MPLX, ~~and ANDX,~~ we are required to adjust non-controlling interest and additional paid-in capital. Changes in MPC’s additional paid-in capital resulting from changes in its ownership interests in MPLX ~~and ANDX~~ were as follows:


	Three Months Ended March 31,
(In millions)	2021		2020
Increase (decrease) due to issuance/(repurchase) of MPLX common units	$	(35)	$	2
Tax impact	31		(7)
Decrease in MPC's additional paid-in capital, net of tax	$	(4)	$	(5)

Three Months Ended
March 31,
(In millions) 2020 2019
Increase due to the issuance of MPLX & ANDX common units $ 2
$ 4
Tax impact (7 ) (1 )
Increase (decrease) in MPC's additional paid-in capital, net of tax $ (5 ) $ 3

5. IMPAIRMENTS

~~4. IMPAIRMENTS~~

~~The recent~~During the first quarter of 2020, the outbreak of COVID-19 and its development into a pandemic in March 2020 have resulted in significant economic disruption globally. Actions taken by various governmental authorities, individuals and companies around the world to prevent the spread of COVID-19 through social distancing have restricted travel, many business operations, public gatherings and the overall level of individual movement and in-person interaction across the globe. This has significantly reduced global economic activity and resulted in airlines dramatically cutting back on flights and a decrease in motor vehicle use at a time when seasonal driving patterns typically result in an increase of consumer demand for gasoline. In addition, recent global geopolitical events and macroeconomic conditions have exacerbated the decline in crude oil prices and have contributed to an increase in crude oil price volatility. The decrease in the demand for refined petroleum products coupled with the decline in the price of crude oil has resulted in a significant decrease in the price of the refined petroleum products we produce and sell.

~~The~~caused overall deterioration in the economy and the environment in which we ~~operate, the~~operate. The related changes to our expected future cash flows, as well as a sustained decrease in share price, were considered triggering events requiring the performance of various ~~assessments to identify any potential impairments~~tests of the carrying values of our assets. ~~During~~Triggering events requiring the ~~first quarter~~performance of ~~2020, we recognized impairment charges related~~various tests of the carrying value of our Midstream assets were also identified by MPLX as a result of the overall deterioration in the economy and the environment in which MPLX and its customers operate, which led to ~~goodwill,~~a reduction in forecasted volumes processed by the systems operated by MarkWest Utica EMG, L.L.C., MPLX’s equity method ~~investments and long-lived assets (including intangibles).~~investee, as well as a sustained decrease in the MPLX unit price.

The table below provides information related to the impairments recognized during the first quarter of 2020, ~~and~~along with the location of these impairments within the first quarter 2020 consolidated ~~statements~~statement of income.


		Three Months Ended March 31,
(In millions)	Income Statement Line	2020
Goodwill	Impairment expense	$	7,330
Equity method investments	Income (loss) from equity method investments	1,315
Long-lived assets	Impairment expense	492
Total impairments		$	9,137

(In millions) Income Statement Line Impairment
Goodwill Impairment expense $ 7,330
Equity method investments Income (loss) from equity method investments 1,315
Long-lived assets Impairment expense 492
Total impairments $ 9,137

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Goodwill

During the first quarter of 2020, we recorded an impairment of ~~goodwill. See the table below for detail by segment.~~goodwill of $7.33 billion. The $5.516 billion goodwill impairment within the Refining & Marketing segment was primarily driven by the effects of COVID-19 and the decline in commodity prices. The $1.814 billion impairment within the Midstream segment was primarily driven by additional ~~guidance~~information related to the slowing of drilling activity, which ~~has~~had reduced production growth forecasts from MPLX’s producer customers.

The fair ~~value~~values of the reporting units for the first quarter of 2020 goodwill impairment analysis ~~was~~were determined based on applying both a discounted cash flow method, or income approach, as well as a market approach. The discounted cash flow fair value estimate is based on known or knowable information at the measurement date. The significant assumptions that were used to develop the estimates of the fair values under the discounted cash flow method included management’s best estimates of the expected future results and discount rates, which range from 9.0 percent to 13.5 percent. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the interim goodwill impairment test will prove to be an accurate prediction of the future. The fair value measurements for the individual reporting units’ overall fair values represent Level 3 measurements.

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~~The changes in carrying amount of goodwill were as follows:~~

(In millions) Refining & Marketing Retail Midstream Total
Balance at January 1, 2020 $ 5,572
$ 4,951
$ 9,517
$ 20,040
Impairments (5,516 ) —
(1,814 ) (7,330 )
Transfers (56 ) —
56
—
Balance at March 31, 2020 $ —
$ 4,951
$ 7,759
$ 12,710

Equity Method Investments

During the first quarter of 2020, we recorded equity method investment impairment charges totaling $1.315 billion, of which $1.25 billion related to MarkWest Utica EMG, L.L.C. and its investment in Ohio Gathering Company, L.L.C. The impairments were largely due to a reduction in forecasted volumes gathered and processed by the systems operated by the ~~joint ventures.~~equity method investments. The fair value of the investments was determined based upon applying the discounted cash flow method, ~~which is~~ an income approach. The discounted cash flow fair value estimate is based on known or knowable information at the interim measurement date. The significant assumptions that were used to develop the estimate of the fair value under the discounted cash flow method include management’s best estimates of the expected future cash flows, including prices and volumes, the weighted average cost of capital and the long-term growth rate. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the impairment test will prove to be an accurate prediction of the future. The fair value of these equity method investments ~~represents~~represent a Level 3 measurement.

Long-lived Assets

Long-lived assets used in operations are assessed for impairment whenever changes in facts and circumstances indicate that the carrying value of the assets may not be recoverable based on the expected undiscounted future cash flow of an asset group. For purposes of impairment evaluation, long-lived assets must be grouped at the lowest level for which independent cash flows can be identified, which generally is the refinery and associated distribution system level for Refining & Marketing segment assets, company-owned convenience store locations for Retail segment assets and the plant level or pipeline system level for Midstream segment assets. If the sum of the undiscounted estimated pretax cash flows is less than the carrying value of an asset group, fair value is calculated, and the carrying value is written down to the calculated fair value.

During the first quarter of 2020, we identified long-lived asset impairment triggers relating to all 16 of our refinery asset groups within the Refining & Marketing segment as a result of ~~significant impacts~~decreases to the Refining & Marketing segment ~~forecasted~~expected future cash flows. The cash flows associated with these assets were significantly impacted by the effects of COVID-19 and commodity price declines. We ~~assessed~~performed recoverability tests for each refinery asset group ~~for impairment~~ by comparing the undiscounted estimated pretax cash flows to the carrying value of each asset group. ~~Of the 16 refinery asset groups, only~~Only the Gallup refinery’s carrying value exceeded its undiscounted estimated pretax cash flows. All other refinery asset groups undiscounted estimated pretax cash flows exceeded the carrying value by at least 21 percent. The determination of undiscounted estimated pretax cash flows utilized significant assumptions including management’s best estimates of the expected future cash flows, allocation of certain Refining & Marketing segment cash flows to the individual refineries, the estimated useful lives of the asset groups, and the salvage values of the refineries. The determinations of expected future cash flows and the salvage values of refineries require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of our impairment analysis will prove to be an accurate prediction of the future. Should our assumptions significantly change in future periods, it is possible we may determine the carrying values of additional refinery asset groups exceed the undiscounted estimated pretax cash flows of their refinery asset groups, which would result in future impairment charges.

It was determined that the fair value of the Gallup refinery’s property, plant and equipment was less than the carrying value. As a result, we recorded a charge of $142 million in the first quarter of 2020 to impairment expense on the consolidated statements of income. ~~The fair value measurements for the Gallup refinery assets represent Level 3 measurements.~~

During the first quarter of 2020, we identified an impairment trigger relating to asset groups within MPLX’s Western Gathering and Processing (“G&P&P”) reporting unit as a result of significant ~~impacts~~changes to ~~forecasted~~expected future cash flows for these asset groups resulting from the effects of COVID-19. The cash flows associated with these assets were significantly impacted by volume declines reflecting decreased forecasted producer customer production as a result of lower commodity prices. We assessed each asset group within the Western G&P reporting unit for impairment. It was determined that the fair value of the East Texas G&P asset group’s underlying assets were less than the carrying value. As a result, MPLX recorded impairment charges totaling $350 million related to its property, plant and equipment and intangibles, which are included in impairment expense on our consolidated statements of income.

Fair ~~value~~values of property, plant and equipment ~~was~~were determined using a combination of an income and cost

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~~approach.~~ approaches. The income approach utilized significant assumptions including management’s best estimates of the expected future cash flows and the estimated useful life of the asset ~~group.~~groups. The cost approach utilized assumptions for the current replacement costs of similar assets adjusted for estimated depreciation and deterioration of the existing equipment and economic obsolescence. The fair value of the intangibles was determined based on applying the multi-period excess earnings method, which is an income approach. Key assumptions included management’s best estimates of the expected future cash flows from existing customers, customer attrition rates and the discount rate. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the impairment analysis will prove to be an accurate prediction of the future. The fair value measurements for the Gallup refinery and East Texas G&P asset ~~group fair values~~groups represent Level 3 measurements.

5.6. VARIABLE INTEREST ENTITIES

Consolidated VIE

We control MPLX through our ownership of its general partner. MPLX is a VIE because the limited partners do not have substantive kick-out or ~~substantive~~ participating rights over the general partner. We are the primary beneficiary of MPLX because in addition to our significant economic interest, we also have the ability, through our ownership of the general partner, to control the decisions that most significantly impact MPLX. We therefore consolidate MPLX and record a noncontrolling interest for the interest owned by the public. We also record a redeemable noncontrolling interest related to MPLX’s Series A preferred units.

The creditors of MPLX do not have recourse to MPC’s general credit through guarantees or other financial arrangements, except as noted. MPC has effectively guaranteed certain indebtedness of LOOP LLC (“LOOP”) and LOCAP LLC (“LOCAP”), in which MPLX holds an interest. See Note 22 for more information. The assets of MPLX can only be used to settle their own obligations and their creditors have no recourse to our assets, except as noted earlier.

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The following table presents balance sheet information for the assets and liabilities of MPLX, which are included in our balance sheets.


(In millions)	March 31, 2021		December 31, 2020
Assets
Cash and cash equivalents	$	24	$	15
Receivables, less allowance for doubtful accounts	536		478
Inventories	128		118
Other current assets	49		67
Assets held for sale	0		188
Equity method investments	4,040		4,036
Property, plant and equipment, net	21,205		21,418
Goodwill	7,657		7,657
Right of use assets	296		309
Other noncurrent assets	991		1,006
Liabilities
Accounts payable	$	474	$	468
Payroll and benefits payable	5		4
Accrued taxes	67		76
Debt due within one year	2		764
Operating lease liabilities	63		63
Liabilities held for sale	0		101
Other current liabilities	274		297
Long-term debt	20,052		19,375
Deferred income taxes	11		12
Long-term operating lease liabilities	230		244
Deferred credits and other liabilities	451		437

(In millions) March 31,
2020 December 31,
2019
Assets
Cash and cash equivalents $ 57
$ 15
Receivables, less allowance for doubtful accounts 544
615
Inventories 105
110
Other current assets 45
110
Equity method investments 3,992
5,275
Property, plant and equipment, net 22,030
22,174
Goodwill 7,722
9,536
Right of use assets 352
365
Other noncurrent assets 1,105
1,323
Liabilities
Accounts payable $ 521
$ 744
Payroll and benefits payable 1
5
Accrued taxes 72
80
Debt due within one year 4
9
Operating lease liabilities 67
66
Other current liabilities 268
259
Long-term debt 20,467
19,704
Deferred income taxes 11
12
Long-term operating lease liabilities 284
302
Deferred credits and other liabilities 422
409

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6.7. RELATED PARTY TRANSACTIONS

Transactions with related parties were as follows:

Three Months Ended
March 31,
(In millions) 2020 2019
Sales to related parties $ 165
$ 186
Purchases from related parties 195
204


	Three Months Ended March 31,
(In millions)		2021		2020
Sales to related parties		$	43	$	30
Purchases from related parties		203		195

Sales to related parties, which are included in sales and other operating revenues, consist primarily of refined product sales to certain of ~~refined products to PFJ Southeast, an~~our equity ~~affiliate which owns and operates travel plazas primarily in the Southeast region of the United States.~~affiliates.

Purchases from related parties are included in cost of revenues. We obtain utilities, transportation services and purchase ethanol from certain of our equity affiliates.

7.8. LOSS PER SHARE

We compute basic earnings (loss) per share by dividing net income (loss) attributable to MPC less income allocated to participating securities by the weighted average number of shares of common stock outstanding. Since MPC grants certain incentive compensation awards to employees and non-employee directors that are considered to be participating securities, we have calculated our earnings (loss) per share using the two-class method. Diluted income (loss) per share assumes exercise of certain stock-based compensation awards, provided the effect is not anti-dilutive.

Three Months Ended
March 31,
(In millions, except per share data) 2020 2019
Basic loss per share:
Allocation of loss:
Net loss attributable to MPC $ (9,234 ) $ (7 )
Income allocated to participating securities —
—
Loss available to common stockholders – basic $ (9,234 ) $ (7 )
Weighted average common shares outstanding 648
673
Basic loss per share $ (14.25 ) $ (0.01 )
Diluted loss per share:
Allocation of loss:
Net loss attributable to MPC $ (9,234 ) $ (7 )
Income allocated to participating securities —
—
Loss available to common stockholders – diluted $ (9,234 ) $ (7 )
Weighted average common shares outstanding 648
673
Effect of dilutive securities —
—
Weighted average common shares, including dilutive effect 648
673
Diluted loss per share $ (14.25 ) $ (0.01 )

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	Three Months Ended March 31,
(In millions, except per share data)		2021		2020
Loss from continuing operations, net of tax		$	(170)	$	(10,536)
Less: Net income (loss) attributable to noncontrolling interest		306		(984)
Net income allocated to participating securities		0		0
Loss from continuing operations available to common stockholders		$	(476)	$	(9,552)
Income from discontinued operations, net of tax		234		318
Loss available to common stockholders		$	(242)	$	(9,234)

Weighted average common shares outstanding:
Basic		651		648
Effect of dilutive securities		0		0
Diluted		651		648

Income (loss) available to common stockholders per share:
Basic:
Continuing operations		$	(0.73)	$	(14.74)
Discontinued operations		0.36		0.49
Net loss per share		$	(0.37)	$	(14.25)
Diluted:
Continuing operations		$	(0.73)	$	(14.74)
Discontinued operations		0.36		0.49
Net loss per share		$	(0.37)	$	(14.25)

The following table summarizes the shares that were anti-dilutive and, therefore, were excluded from the diluted share calculation.

Three Months Ended
March 31,
(In millions) 2020 2019
Shares issuable under stock-based compensation plans 10
7


	Three Months Ended March 31,
(In millions)		2021	2020
Shares issuable under stock-based compensation plans		10	10

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~~8. EQUITY~~

As of March 31, 2020, we had $2.96 billion of remaining share repurchase authorizations from our board of directors. We may utilize various methods to effect the repurchases, which could include open market repurchases, negotiated block transactions, tender offers, accelerated share repurchases or open market solicitations for shares, some of which may be effected through Rule 10b5-1 plans. The timing and amount of future repurchases, if any, will depend upon several factors, including market and business conditions, and such repurchases may be discontinued at any time.

~~Total share repurchases were as follows for the respective periods:~~

Three Months Ended
March 31,
(In millions, except per share data) 2020 2019
Number of shares repurchased —
14
Cash paid for shares repurchased $ —
$ 885
Average cost per share $ —
$ 62.98

9. SEGMENT INFORMATION

We have 32 reportable segments: Refining & Marketing ~~Retail~~ and Midstream. Each of these segments is organized and managed based upon the nature of the products and services it offers.

•Refining & Marketing – refines crude oil and other feedstocks at our refineries in the Gulf Coast, Mid-Continent and West Coast regions of the United States, purchases refined products and ethanol for resale and distributes refined products through transportation, storage, distribution and marketing services provided largely by our Midstream segment. We sell refined products to wholesale marketing customers domestically and internationally, to buyers on the spot market, to independent entrepreneurs who operate primarily Marathon® branded outlets, through long-term fuel supply contracts with direct dealers who operate locations mainly under the ARCO® brand and to approximately 3,800 Speedway locations.

•

•~~Refining & Marketing – refines crude oil and other feedstocks at our 16 refineries~~ in the Gulf Coast, Mid-Continent and West Coast regions of the United States, purchases refined products and ethanol for resale and distributes refined products through transportation, storage, distribution and marketing services provided largely by our Midstream segment. We sell refined products to wholesale marketing customers domestically and internationally, to buyers on the spot market, to our Retail business segment and to independent entrepreneurs who operate primarily Marathon^® ~~branded outlets.~~


•	~~Retail – sells transportation fuels and convenience products in the retail market across the United States through company-owned and operated convenience stores, primarily under the Speedway~~^® ~~brand, and long-term fuel supply contracts with direct dealers who operate locations mainly under the ARCO~~^® ~~brand.~~

Midstream – transports, stores, distributes and markets crude oil and refined products principally for the Refining & Marketing segment via refining logistics assets, pipelines, terminals, towboats and barges; gathers, processes and transports natural gas; and gathers, transports, fractionates, stores and markets NGLs. The Midstream segment primarily reflects the results of MPLX.

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Segment income represents income (loss) from operations attributable to the reportable segments. Corporate administrative expenses, except for those attributable to MPLX, and costs related to certain non-operating assets are not allocated to the Refining & Marketing ~~and Retail segments.~~segment. In addition, certain items that affect comparability (as determined by the chief operating decision ~~maker)~~maker (“CODM”)) are not allocated to the reportable segments. Assets by segment are not a measure used to assess the performance of the company by the CODM and thus are not reported in our disclosures.


(In millions)	Refining & Marketing		Midstream		Total
Three Months Ended March 31, 2021
Revenues:
Third party(a)	$	21,661	$	1,050	$	22,711
Intersegment	28		1,199		1,227
Segment revenues	$	21,689	$	2,249	$	23,938
Segment income (loss) from operations	$	(598)	$	972	$	374

Supplemental Data
Depreciation and amortization(b)	$	478	$	334	$	812
Capital expenditures and investments(c)	134		138		272


(In millions)	Refining & Marketing		Midstream		Total
Three Months Ended March 31, 2020
Revenues:
Third party(a)	$	21,284	$	920	$	22,204
Intersegment	25		1,241		1,266
Segment revenues	$	21,309	$	2,161	$	23,470
Segment income (loss) from operations	$	(497)	$	905	$	408

Supplemental Data
Depreciation and amortization(b)	$	473	$	345	$	818
Capital expenditures and investments(c)	470		474		944

(a)Includes Refining & Marketing sales to Speedway and related party sales. See Notes 3 and 7 for additional information.

(b)Differences between segment totals and MPC consolidated totals represent amounts related to corporate and other items not allocated to segments.

(c)Includes changes in capital expenditure accruals and investments in affiliates.

(In millions) Refining & Marketing Retail Midstream Total
Three Months Ended March 31, 2020
Revenues:
Third party^(a)
$ 17,528
$ 6,769
$ 918
$ 25,215
Intersegment 3,617
2
1,242
4,861
Segment revenues $ 21,145
$ 6,771
$ 2,160
$ 30,076
Segment income (loss) from operations $ (622 ) $ 519
$ 905
$ 802

Supplemental Data
Depreciation and amortization^(b)
$ 447
$ 125
$ 345
$ 917
Capital expenditures and investments^(c)
459
76
474
1,009

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(In millions) Refining & Marketing Retail Midstream Total
Three Months Ended March 31, 2019
Revenues:
Third party^(a)
$ 19,920
$ 7,376
$ 957
$ 28,253
Intersegment 4,416
2
1,232
5,650
Segment revenues $ 24,336
$ 7,378
$ 2,189
$ 33,903
Segment income (loss) from operations $ (334 ) $ 170
$ 908
$ 744

Supplemental Data
Depreciation and amortization^(b)
$ 427
$ 126
$ 307
$ 860
Capital expenditures and investments^(c)
394
73
823
1,290


^(a)	~~Includes related party sales. See Note 6 for additional information.~~


^(b)	Differences between segment totals and MPC consolidated totals represent amounts related to corporate and other unallocated items and are included in items not allocated to segments in the reconciliation below.


^(c)	~~Includes changes in capital expenditure accruals and investments in affiliates. See reconciliation from segment totals to MPC consolidated total capital expenditures below.~~

The following reconciles segment income from operations to income (loss) from continuing operations before income taxes as reported in the consolidated statements of income:


	Three Months Ended March 31,
(In millions)		2021		2020
Segment income from operations		$	374	$	408
Corporate(a)		(157)		(233)
Items not allocated to segments:
Transaction-related costs(b)		0		(8)

Impairments(c)		0		(9,137)

LCM inventory valuation adjustment		0		(3,185)
Income (loss) from continuing operations		217		(12,155)
Net interest and other financial costs		353		332
Loss from continuing operations before income taxes		$	(136)	$	(12,487)

Three Months Ended
March 31,
(In millions) 2020 2019
Segment income from operations $ 802
$ 744
Items not allocated to segments:
Corporate and other unallocated items^(a)
(227 ) (191 )
Equity method investment restructuring gain^(b)
—
207
Transaction-related costs^(c)
(35 ) (91 )
Impairments^(d)
(9,137 ) —
Inventory market valuation adjustment^(e)
(3,220 ) —
Income (loss) from operations (11,817 ) 669
Net interest and other financial costs 338
306
Income (loss) before income taxes $ (12,155 ) $ 363
(a)Corporate consists primarily of MPC’s corporate administrative expenses and costs related to certain non-operating assets, except for corporate overhead expenses attributable to MPLX, which are included in the Midstream segment.


(b)Includes costs incurred in connection with the Midstream strategic review. Costs incurred in connection with the Speedway separation are included in discontinued operations. See Note 3. (c)Includes impairment of goodwill, equity method investments and long lived assets. See Note 5 for additional information. ^(a)	Corporate and other unallocated items consist primarily of MPC’s corporate administrative expenses and costs related to certain non-operating assets, except for corporate overhead expenses attributable to MPLX, which are included in the Midstream segment. Corporate overhead expenses are not allocated to the Refining & Marketing and Retail segments.


^(b)	~~Includes gain related to Capline Pipeline Company LLC (“Capline LLC”). See Note 13.~~


^(c)	2020 includes costs incurred in connection with the Speedway separation and Midstream strategic review. 2019 includes employee severance, retention and other costs related to the acquisition of Andeavor.


^(d)	~~Includes goodwill impairment, impairment of equity method investments and impairment of long lived assets. See Note 4 for additional information.~~


^(e)	~~See Note 12.~~

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The following reconciles segment capital expenditures and investments to total capital expenditures:

Three Months Ended
March 31,
(In millions) 2020 2019
Segment capital expenditures and investments $ 1,009
$ 1,290
Less investments in equity method investees 169
325
Plus items not allocated to segments:
Corporate 27
10
Capitalized interest 29
31
Total capital expenditures^(a)
$ 896
$ 1,006


	Three Months Ended March 31,
(In millions)		2021		2020
Segment capital expenditures and investments		$	272	$	944
Less investments in equity method investees		51		169
Plus items not allocated to segments:
Corporate		21		27
Capitalized interest		14		29
Total capital expenditures(a)		$	256	$	831


(a)Includes changes in capital expenditure accruals. See Note 19 for a reconciliation of total capital expenditures to additions to property, plant and equipment for the three months ended March 31, 2021 and 2020 as reported in the consolidated statements of cash flows. ^(a)	Includes changes in capital expenditure accruals. See Note 19 for a reconciliation of total capital expenditures to additions to property, plant and equipment for the three months ended March 31, 2020 and 2019 as reported in the consolidated statements of cash flows.

10. NET INTEREST AND OTHER FINANCIAL COSTS

Net interest and other financial costs were as follows:


	Three Months Ended March 31,
(In millions)		2021		2020
Interest income		$	(1)	$	(6)
Interest expense		351		355
Interest capitalized		(17)		(37)
Pension and other postretirement non-service costs(a)		0		(3)
Other financial costs		20		23
Net interest and other financial costs		$	353	$	332

(a)See Note 21.

Three Months Ended
March 31,
(In millions) 2020 2019
Interest income $ (6 ) $ (9 )
Interest expense 357
340
Interest capitalized (36 ) (32 )
Pension and other postretirement non-service credits^(a)
(3 ) (3 )
Other financial costs 26
10
Net interest and other financial costs $ 338
$ 306

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^(a)	~~See Note 21.~~

11. INCOME TAXES

We have historically provided for income taxes during interim reporting periods based on an estimate of the annual effective tax rate applied to the income for the interim period. For 2020, we continue to utilize this approach.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted in response to the COVID-19 pandemic. The CARES Act contains numerous income tax provisions, some of which materially impact MPC's calculation of income taxes including:

~~Reducing the limitations on the deductibility of interest from 30 percent of adjusted taxable income to 50 percent.~~

Ability to carry back tax net operating losses ("NOL") five years for NOLs arising in taxable years 2018 through 2020. This provision allows the taxpayer to recover taxes previously paid at a 35 percent federal income tax rate during years prior to 2018. The limitation on the percentage of taxable income that may be offset by the NOL, formerly 80 percent of income, was eliminated for years beginning before 2021.

We recorded ~~an overall~~a combined federal, state and foreign income tax ~~benefit~~provision of ~~$1.9 billion~~$34 million for the three months ended March 31, ~~2020, of which $411 million was~~2021, primarily due to certain permanent tax differences related to income attributable to ~~the expected NOL carryback provided for under the CARES Act. The~~noncontrolling interests, state taxes and unrecognized tax benefits. We recorded a combined federal, state and foreign income tax ~~rate was 16 percent~~benefit of $1,951 million for the three months ended March 31, 2020. Our effective tax benefit rate for the three months ended March 31, 2020 was lower than the U.S. statutory rate primarily due to a significant amount of our pre-tax loss consisting of non-tax deductible goodwill impairment ~~charges, partially offset by a favorable rate effect of the CARES Act legislation.~~charges. Additionally, our effective tax rate is generally benefited by our noncontrolling interest in MPLX, but this benefit was lower for the three months ended March 31, 2020 ~~compared to the three months ended March 31, 2019~~ due to impairment charges recorded by MPLX. ~~We recorded an income tax receivable of $1.3 billion in other noncurrent assets to reflect our estimate~~

A reconciliation of the continuing operations tax ~~benefit we will realize at the time of our 2020 tax return filing which is expected during the second half of 2021. A reconciliation of~~provision (benefit) in dollars as determined using the federal statutory income tax rate applied to income (loss) before income taxes to the provision (benefit) ~~provision~~ for income taxes ~~follows:~~is shown in the table below.


	Three Months Ended March 31,
(In millions)		2021		2020
Tax computed at statutory rate		$	(29)	$	(2,622)
State and local income taxes, net of federal income tax effects		15		(244)
Goodwill impairment		0		1,157
Noncontrolling interests		31		101
Legislation(a)		0		(343)
Unrecognized tax benefits		14		0
Other		3		0
Total provision (benefit) for income tax from continuing operations		$	34	$	(1,951)

~~Table of Contents~~(a)

Three Months Ended
March 31,
2020 2019
Statutory rate applied to income before income taxes 21 % 21 %
State and local income taxes, net of federal income tax effects 2
12
Goodwill impairment (10 ) —
Noncontrolling interests (1 ) (4 )
CARES Act legislation 3
—
Other 1
—
Effective tax rate 16 % 29 %

~~During the first~~First quarter ~~of 2019, MPC’s provision for income taxes was increased $36 million for an out of period adjustment to correct~~2020 reflects the ~~tax effects recorded in 2018 related to the Andeavor acquisition. The~~ impact of the ~~adjustment~~CARES Act.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was ~~not material~~enacted by Congress and signed into law by President Trump in response to ~~any previous period.~~

~~We are continuously undergoing examination of~~the COVID-19 pandemic. The CARES Act contained a net operating loss (“NOL”) carryback provision, which allowed MPC to carryback our ~~income~~2020 taxable loss to 2015 and later years. The five-year NOL carryback is available for all businesses producing taxable losses in 2018 through 2020 when tax ~~returns, which have been completed through~~was previously paid in the ~~2005 tax year for state returns and~~carryback years. As provided by the ~~2010 tax year for our U.S. federal return. As~~NOL carryback statute in the CARES Act, as of March 31, ~~2020, we had $27 million of unrecognized tax benefits.~~

Pursuant to our tax sharing agreement with Marathon Oil, the unrecognized tax benefits related to pre-spinoff operations for which Marathon Oil was the taxpayer remain the responsibility of Marathon Oil and2021, we have ~~indemnified Marathon Oil accordingly. See Note 22~~recorded an income tax receivable of $2.1 billion in other current assets. This reflects our estimate of the refund of previously paid tax we expect to receive during the second half of 2021 in connection with the filing of our 2020 federal tax return.

12. INVENTORIES


(In millions)	March 31, 2021		December 31, 2020
Crude oil	$	2,715	$	2,588
Refined products	4,786		4,478
Materials and supplies	906		933
Total	$	8,407	$	7,999

At March 31, 2020, market values for ~~indemnification information.~~

~~12. INVENTORIES~~

(In millions) March 31,
2020 December 31,
2019
Crude oil $ 3,717
$ 3,472
Refined products 5,700
5,548
Materials and supplies 1,000
996
Merchandise 248
227
Inventories before LCM inventory valuation reserve 10,665
10,243
LCM inventory valuation reserve (3,220 ) —
Total $ 7,445
$ 10,243

these inventories were lower than their LIFO cost basis, resulting in an inventory valuation charge of $3.185 billion to value these inventories at the lower of cost or market. The inventory valuation reserve was fully reversed by the end of 2020.

Inventories are carried at the lower of cost or market value. Costs of crude oil and refined products are aggregated on a consolidated basis for purposes of assessing ifwhether the LIFO cost basis of these inventories may have to be written down to market values. At March 31, 2020, market values for these inventories were lower than their LIFO cost basis and, as a result, we recorded an inventory valuation charge of $3.22 billion to value these inventories at the lower of cost or market. Based on movements of refined product prices, future inventory valuation adjustments could have a negative or positive effect to earnings. Such losses are subject to reversal in subsequent periods if prices recover.

The cost of inventories of crude oil and refined products and merchandise is determined primarily under the LIFO method. There were 0 LIFO inventory liquidations recognized for the three months ended March 31, 2020.

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13. ~~EQUITY METHOD INVESTMENTS~~

~~Significant Equity Method Investments~~

~~Summarized financial information, in the aggregate, for our significant equity method investments on a 100 percent basis were as follows:~~

Three Months Ended
March 31,
(In millions) 2020 2019
Revenues and other income $ 1,072
$ 1,628
Income (loss) from operations (20 ) 336
Net income (loss) (44 ) 314

~~Capline LLC~~

During the three months ended March 31, 2019, we executed agreements with Capline Pipeline Company LLC (“Capline LLC”) to contribute our 33 percent undivided interest in the Capline pipeline system in exchange for a 33 percent ownership interest in Capline LLC. In connection with our execution of these agreements, Capline LLC initiated a binding open season for southbound service from Patoka, Illinois to St. James, Louisiana or Liberty, Mississippi with an additional origination point at Cushing, Oklahoma. Service from Cushing, Oklahoma is part of a joint tariff with Diamond pipeline. Crude oil service is expected to begin in the first half of 2021.

In accordance with ASC 810, we derecognized our undivided interest amounting to $143 million of net assets and recognized the Capline LLC ownership interest we received at fair value. We used an income approach to determine the fair value of our ownership interest under a Monte Carlo simulation method. We estimated the fair value of our ownership interest to be $350 million. This is a nonrecurring fair value measurement and is categorized in Level 3 of the fair value hierarchy. The Monte Carlo simulation inputs include ranges of tariff rates, operating volumes, operating cost and capital expenditure assumptions. The estimated cash flows were discounted using a Monte Carlo market participant weighted average cost of capital estimate. None of the inputs to the Monte Carlo simulation are individually significant. The excess of the estimated fair value of our ownership interest over the carrying value of the derecognized net assets resulted in a $207 million non-cash net gain recorded as a net gain on disposal of assets in the accompanying consolidated statements of income.

As the Capline system is currently idled, Capline LLC is unable to fund its operations without financial support from its equity owners and is a VIE. MPC is not deemed to be the primary beneficiary, due to our inability to unilaterally control significant decision-making rights. Our maximum exposure to loss as a result of our involvement with Capline LLC includes our equity investment, any additional capital contribution commitments and any operating expenses incurred by Capline LLC in excess of compensation received for performance of the operating services.

~~14.~~ PROPERTY, PLANT AND EQUIPMENT


	March 31, 2021						December 31, 2020
(In millions)	Gross PP&E		Accumulated Depreciation		Net PP&E		Gross PP&E		Accumulated Depreciation		Net PP&E
Refining & Marketing	$	30,416	$	13,679	$	16,737	$	30,306	$	13,257	$	17,049
Midstream	27,758		6,508		21,250		27,677		6,217		21,460
Corporate	1,365		861		504		1,356		830		526
Total	$	59,539	$	21,048	$	38,491	$	59,339	$	20,304	$	39,035

14. RESTRUCTURING

During the third quarter of 2020, we indefinitely idled our refinery located in Gallup, New Mexico and initiated actions to strategically reposition our Martinez, California refinery to a renewable diesel facility. We also approved an involuntary workforce reduction plan. In connection with these strategic actions, we recorded restructuring expenses of $367 million in 2020.

The indefinite idling of the Gallup refinery and actions to strategically reposition the Martinez refinery to a renewable diesel facility resulted in $195 million of restructuring expenses. Of the $195 million of restructuring expenses, we expect $130 million to settle in cash for costs related to decommissioning refinery processing units and storage tanks and fulfilling environmental remediation obligations. Additionally, we recorded a non-cash reserve against our materials and supplies inventory at these facilities of $51 million.

The involuntary workforce reduction plan, together with employee reductions resulting from our actions affecting the Gallup and Martinez refineries, affected approximately 2,050 employees. We recorded $172 million of restructuring expenses for separation benefits payable under our employee separation plan and certain collective bargaining agreements that we expect to settle in cash. Certain of the affected MPC employees provided services to MPLX. MPLX has various employee services agreements and secondment agreements with MPC pursuant to which MPLX reimburses MPC for employee costs, along with the provision of operational and management services in support of MPLX’s operations. Pursuant to such agreements, MPC was reimbursed by MPLX for $37 million of the $172 million of restructuring expenses recorded for these actions.

Restructuring expenses were accrued as restructuring reserves within accounts payable, payroll and benefits payable, other current liabilities and deferred credits and other liabilities within our consolidated balance sheets. We expect cash payments for the remaining exit and disposal costs reserve to occur through 2024.


(In millions)	Employee separation costs		Exit and disposal costs		Total
Restructuring reserve balance at September 30, 2020(a)	$	158	$	133	$	291
Adjustments	14		5		19
Cash payments	(134)		(35)		(169)
Restructuring reserve balance at December 31, 2020	$	38	$	103	$	141
Cash payments	(32)		(16)		(48)
Restructuring reserve balance at March 31, 2021	$	6	$	87	$	93

(a)The restructuring reserve was zero until the third quarter of 2020.

(In millions) March 31,
2020 December 31,
2019
Refining & Marketing $ 29,511
$ 29,037
Retail 7,161
7,104
Midstream 27,490
27,193
Corporate and Other 1,308
1,289
Total 65,470
64,623
Less accumulated depreciation^(a)
20,137
19,008
Property, plant and equipment, net $ 45,333
$ 45,615


^(a)	~~The March 31, 2020 balance includes property, plant and equipment impairment charges recorded during the first quarter of 2020. See Note 4 for additional information.~~

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15. FAIR VALUE MEASUREMENTS

Fair Values—Recurring

The following tables present assets and liabilities accounted for at fair value on a recurring basis as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020 by fair value hierarchy level. We have elected to offset the fair value amounts recognized for multiple derivative contracts executed with the same counterparty, including any related cash collateral as shown below; however, fair value amounts by hierarchy level are presented on a gross basis in the following tables.


	March 31, 2021
	Fair Value Hierarchy
(In millions)	Level 1		Level 2		Level 3		Netting and Collateral(a)		Net Carrying Value on Balance Sheet(b)		Collateral Pledged Not Offset
Assets:
Commodity contracts	$	247	$	2	$	0	$	(238)	$	11	$	73
Liabilities:
Commodity contracts	$	247	$	2	$	0	$	(249)	$	0	$	0
Embedded derivatives in commodity contracts	0		0		66		0		66		0


	March 31, 2020														December 31, 2020
	Fair Value Hierarchy														Fair Value Hierarchy
(In millions)	Level 1		Level 2		Level 3		Netting and Collateral^(a)			Net Carrying Value on Balance Sheet^(b)		Collateral Pledged Not Offset		(In millions)	Level 1		Level 2		Level 3		Netting and Collateral(a)		Net Carrying Value on Balance Sheet(b)		Collateral Pledged Not Offset
Assets:														Assets:
Commodity contracts	$	754	$	32	$	—	$	(679	)	$	107	$	7	Commodity contracts	$	82	$	6	$	0	$	(80)	$	8	$	31
Liabilities:														Liabilities:
Commodity contracts	$	610	$	19	$	—	$	(628	)	$	1	$	—	Commodity contracts	$	81	$	10	$	0	$	(91)	$	0	$	0
Embedded derivatives in commodity contracts	—		—		45		—			45		—		Embedded derivatives in commodity contracts	0		0		63		0		63		0

(a)Represents the impact of netting assets, liabilities and cash collateral when a legal right of offset exists. As of March 31, 2021, cash collateral of $11 million was netted with the mark-to-market derivative liabilities. As of December 31, 2020, cash collateral of $11 million was netted with mark-to-market derivative liabilities.

December 31, 2019
Fair Value Hierarchy
(In millions) Level 1 Level 2 Level 3
Netting and Collateral^(a)

Net Carrying Value on Balance Sheet^(b)
Collateral Pledged Not Offset
Assets:
Commodity contracts $ 57
$ 6
$ —
$ (55 ) $ 8
$ 73
Liabilities:
Commodity contracts $ 95
$ 11
$ —
$ (106 ) $ —
$ —
Embedded derivatives in commodity contracts —
—
60
—
60
—


^(a)(b)We have no derivative contracts that are subject to master netting arrangements reflected gross on the balance sheet.	Represents the impact of netting assets, liabilities and cash collateral when a legal right of offset exists. As of March 31, 2020, cash collateral of $67 million was netted with mark-to-market assets and $16 million was netted with the mark-to-market derivative liabilities. As of December 31, 2019, cash collateral of $51 million was netted with mark-to-market derivative liabilities.


^(b)	~~We have no derivative contracts that are subject to master netting arrangements reflected gross on the balance sheet.~~

Commodity derivatives in Level 1 are exchange-traded contracts for crude oil and refined products measured at fair value with a market approach using the close-of-day settlement prices for the market. Commodity derivatives are covered under master netting agreements with an unconditional right to offset. Collateral deposits in futures commission merchant accounts covered by master netting agreements related to Level 1 commodity derivatives are classified as Level 1 in the fair value hierarchy.

Level 2 instruments are valued based on quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices, such as liquidity, that are observable for the asset or liability. Commodity derivatives in Level 2 are OTC contracts, which are valued using market quotations from independent price reporting agencies, third-party brokers and commodity exchange price curves that are corroborated with market data.

Level 3 instruments ~~are OTC NGL contracts and~~include embedded derivatives in commodity contracts. The embedded derivative liability relates to a natural gas purchase agreement embedded in a keep‑whole processing agreement. The fair value calculation for these Level 3 instruments at March 31, ~~2020~~2021 used significant unobservable inputs including: (1) NGL prices interpolated and extrapolated due to inactive markets ranging from ~~$0.26~~$0.48 to ~~$0.68~~$1.36 per gallon with a weighted average of ~~$0.39~~$0.62 per gallon ~~per the current term of the embedded derivative~~ and (2) the probability of renewal of 95100 percent for the first ~~five-year term~~ and ~~83.5 percent for the~~ second ~~five-year~~five-year term of the natural gas purchase agreement and the related keep-whole processing agreement. Increases or decreases in the fractionation spread result in an increase or decrease in the fair value of the embedded derivative liability. An increase in the probability of renewal would result in an increase in the fair value of the related embedded derivative liability. Beyond the embedded derivative discussed above, we had no outstanding commodity contracts as of March 31, 2020.

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The following is a reconciliation of the beginning and ending balances recorded for net liabilities classified as Level 3 in the fair value hierarchy.

Three Months Ended
March 31,
(In millions) 2020 2019
Beginning balance $ 60
$ 61
Unrealized and realized (gains) losses included in net income (14 ) 6
Settlements of derivative instruments (1 ) (2 )
Ending balance $ 45
$ 65

The amount of total (gains) losses for the period included in earnings attributable to the change in unrealized losses relating to assets still held at the end of period: $ (13 ) $ 5


	Three Months Ended March 31,
(In millions)		2021		2020
Beginning balance		$	63	$	60
Unrealized and realized (gains) losses included in net income		6		(14)
Settlements of derivative instruments		(3)		(1)
Ending balance		$	66	$	45

The amount of total losses/(gains) for the period included in earnings attributable to the change in unrealized losses/(gains) relating to assets still held at the end of period:		$	5	$	(13)

Fair Values – Reported

We believe the carrying value of our other financial instruments, including cash and cash equivalents, receivables, accounts payable and certain accrued liabilities, approximate fair value. Our fair value assessment incorporates a variety of considerations, including the short-term duration of the instruments and the expected insignificance of bad debt expense, which includes an evaluation of counterparty credit risk. The borrowings under our revolving credit facilities, ~~and term loan facility,~~ which include variable interest rates, approximate fair value. The fair value of our fixed and floating rate long-term debt is based on prices from recent trade activity and is categorized in level 3 of the fair value hierarchy. The carrying and fair values of our debt were approximately ~~$31.0~~$32.0 billion and ~~$27.7~~$34.7 billion at March 31, ~~2020,~~2021, respectively, and approximately ~~$28.3~~$31.1 billion and ~~$30.1~~$34.9 billion at December 31, ~~2019,~~2020, respectively. These carrying and fair values of our debt exclude the unamortized issuance costs which are netted against our total debt.

16. DERIVATIVES

For further information regarding the fair value measurement of derivative instruments, including any effect of master netting agreements or collateral, see Note 15. We do not designate any of our commodity derivative instruments as hedges for accounting purposes.

Derivatives that are not designated as accounting hedges may include commodity derivatives used to hedge price risk on (1) inventories, (2) fixed price sales of refined products, (3) the acquisition of foreign-sourced crude oil, (4) the acquisition of ethanol for blending with refined products, (5) the sale of NGLs, ~~and~~ (6) the purchase of natural ~~gas.~~gas and (7) the purchase of soybean oil.

The following table presents the fair value of derivative instruments as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020 and the line items in the balance sheets in which the fair values are reflected. The fair value amounts below are presented on a gross basis and do not reflect the netting of asset and liability positions permitted under the terms of our master netting arrangements including cash collateral on deposit with, or received from, brokers. We offset the recognized fair value amounts for multiple derivative instruments executed with the same counterparty in our financial statements when a legal right of offset exists. As a result, the asset and liability amounts below will not agree with the amounts presented in our consolidated balance sheets.


(In millions)	March 31, 2021				December 31, 2020
Balance Sheet Location	Asset		Liability		Asset		Liability
Commodity derivatives
Other current assets	$	249	$	249	$	88	$	91
Other current liabilities(a)	0		10		0		7
Deferred credits and other liabilities(a)	0		56		0		56

(a) Includes embedded derivatives.

(In millions) March 31, 2020
Balance Sheet Location Asset Liability
Commodity derivatives
Other current assets $ 786
$ 629
Other current liabilities^(a)
—
2
Deferred credits and other liabilities^(a)
—
43

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(In millions) December 31, 2019
Balance Sheet Location Asset Liability
Commodity derivatives
Other current assets $ 63
$ 106
Other current liabilities^(a)
—
5
Deferred credits and other liabilities^(a)
—
55


^(a)	~~Includes embedded derivatives.~~

The table below summarizes open commodity derivative contracts for crude oil, refined products and blending products as of March 31, ~~2020.~~2021.


	Percentage of contracts that expire next quarter	Position
(Units in thousands of barrels)		Long	Short
Exchange-traded(a)
Crude oil	81.8%	36,471	43,279
Refined products	91.1%	22,131	21,546
Blending products	96.4%	5,080	3,033
Soybean oil	72.5%	310	755

(a) Included in exchange-traded are spread contracts in thousands of barrels: Crude oil - 90 long and 830 short; Refined products - 1,900 long and 2,115 short; Blending products - 345 short

Percentage of contracts that expire next quarter Position
(Units in thousands of barrels) Long Short
Exchange-traded^(a)

Crude oil 94.8% 29,202
46,121
Refined products 84.3% 20,370
16,960
Blending products 100.0% 3,581
3,359


^(a)	~~Included in exchange-traded are spread contracts in thousands of barrels: Crude oil - 3,840 long and 640 short; Refined products - 2,575 long and 1,775 short~~

The following table summarizes the effect of all commodity derivative instruments in our consolidated statements of income:


		Gain (Loss)
(In millions)	Three Months Ended March 31,
Income Statement Location		2021		2020
Sales and other operating revenues		$	(10)	$	84
Cost of revenues		(65)		131
Total		$	(75)	$	215

Gain (Loss)
(In millions) Three Months Ended
March 31,
Income Statement Location 2020 2019
Sales and other operating revenues $ 84
$ (20 )
Cost of revenues 131
(80 )
Total $ 215
$ (100 )

17. DEBT

~~17. DEBT~~

Our outstanding borrowings at March 31, ~~2020~~2021 and December 31, ~~2019~~2020 consisted of the following:


(In millions)	March 31, 2021		December 31, 2020
Marathon Petroleum Corporation:
Commercial paper	$	1,717	$	1,024
Bank revolving credit facility	1,300		0
Senior notes	8,849		9,849
Notes payable	1		1
Finance lease obligations	623		634
MPLX LP:
Bank revolving credit facility	835		175
Senior notes	19,600		20,350
Finance lease obligations	10		11
Total debt	$	32,935	$	32,044
Unamortized debt issuance costs	(149)		(154)
Unamortized (discount) premium, net	(306)		(306)
Amounts due within one year	(1,786)		(2,854)
Total long-term debt due after one year	$	30,694	$	28,730

(In millions) March 31,
2020 December 31,
2019
Marathon Petroleum Corporation:
Bank revolving credit facility $ 2,000
$ —
Senior notes 8,474
8,474
Notes payable 10
10
Finance lease obligations 692
679
MPLX LP:
Bank revolving credit facility 750
—
Term loan facility 1,000
1,000
Senior notes 19,100
19,100
Finance lease obligations 14
19
Total debt $ 32,040
$ 29,282
Unamortized debt issuance costs (129 ) (134 )
Unamortized (discount) premium, net (302 ) (310 )
Amounts due within one year (1,710 ) (711 )
Total long-term debt due after one year $ 29,899
$ 28,127

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Available Capacity under our Credit Facilities as of March 31, ~~2020~~2021


(Dollars in millions)	Total Capacity		Outstanding Borrowings		Outstanding Letters of Credit		Available Capacity		Weighted Average Interest Rate		Expiration
MPC, excluding MPLX
MPC 364-day bank revolving credit facility	$	1,000	$	0	$	0	$	1,000	0		September 2021
MPC bank revolving credit facility(a)	5,000		1,300		1		3,699		1.35	%	October 2023
MPC trade receivables securitization facility(b)	750		0		0		750		0		July 2021

MPLX
MPLX bank revolving credit facility(c)	3,500		835		0		2,665		1.35	%	July 2024

(Dollars in millions)
Total
Capacity

Outstanding
Borrowings

Outstanding
Letters
of Credit

Available
Capacity

Weighted
Average
Interest
Rate
Expiration
MPC 364-day bank revolving credit facility $ 1,000
$ —
$ —
$ 1,000
—
September 2020
MPC bank revolving credit facility^(a)
5,000
2,000
1
2,999
1.89 % October 2023
MPC trade receivables securitization facility^(b)
750
—
—
750
—
July 2021
MPLX bank revolving credit facility^(c)
3,500
750
—
2,750
1.94 % July 2024
(a) Borrowed $2.325 billion and repaid $1.025 billion during the three months ended March 31, 2021.

(b) Borrowed $2.55 billion and repaid $2.55 billion during the three months ended March 31, 2021. Availability under our $750 million trade receivables facility is a function of eligible trade receivables, which will be lower in a sustained lower price environment for refined products.


^(a)	~~Borrowed $2 billion on March 30, 2020.~~


^(b)	~~Borrowed $925 million and repaid $925 million during the three months ended March 31, 2020.~~


^(c)	~~Borrowed $1.325 billion at an average interest rate of 2.14 percent and repaid $575 million during the three months ended March 31, 2020.~~

Termination of MPC 364-Day Bank Revolving Credit Facility

In February 2021, we elected to terminate our $1.0 billion unsecured 364-day revolving credit facility due in April 2021. This facility provided us with additional liquidity and financial flexibility during the then ongoing commodity price and demand downturn. There were no borrowings under this credit facility, and we determined that the incremental borrowing capacity of the facility was no longer necessary. We do not intend to replace this facility. We incurred no early termination fees as a result of the early termination of this credit agreement.

MPC Senior Notes

On March 1, 2021, we repaid the $1 billion outstanding aggregate principal amount of 5.125% senior notes due March 2021.

MPLX Senior Notes

On January 15, 2021, MPLX redeemed all the $750 million outstanding aggregate principal amount of 5.250% senior notes due January 2025, including the portion of such notes issued by ANDX, at a price equal to 102.625% of the principal amount.

18. REVENUE

The following table presents our revenues disaggregated by segment and product line.

(In millions) Refining & Marketing Retail Midstream Total
Three Months Ended March 31, 2020
Refined products $ 16,539
$ 5,289
$ 169
$ 21,997
Merchandise 1
1,456
—
1,457
Crude oil 875
—
—
875
Midstream services and other 113
24
749
886
Sales and other operating revenues $ 17,528
$ 6,769
$ 918
$ 25,215

(In millions) Refining & Marketing Retail Midstream Total
Three Months Ended March 31, 2019
Refined products $ 18,750
$ 5,947
$ 216
$ 24,913
Merchandise 1
1,409
—
1,410
Crude oil 1,071
—
—
1,071
Midstream services and other 98
20
741
859
Sales and other operating revenues $ 19,920
$ 7,376
$ 957
$ 28,253


(In millions)	Refining & Marketing		Midstream		Total
Three Months Ended March 31, 2021
Refined products	$	19,809	$	282	$	20,091
Crude oil	1,446		0		1,446
Midstream services and other	406		768		1,174
Sales and other operating revenues	$	21,661	$	1,050	$	22,711


(In millions)	Refining & Marketing		Midstream		Total
Three Months Ended March 31, 2020
Refined products	$	20,269	$	171	$	20,440
Crude oil	875		0		875
Midstream services and other	140		749		889
Sales and other operating revenues	$	21,284	$	920	$	22,204

We do not disclose information on the future performance obligations for any contract with expected duration of one year or less at inception. As of March 31, ~~2020,~~2021, we do not have future performance obligations that are material to future periods.

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Receivables

On the accompanying consolidated balance sheets, receivables, less allowance for doubtful accounts primarily consists of customer receivables. Significant, non-customer balances included in our receivables at March 31, ~~2020~~2021 include matching buy/sell receivables of ~~$2.33~~$2.99 billion.

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19. SUPPLEMENTAL CASH FLOW INFORMATION

Three Months Ended
March 31,
(In millions) 2020 2019
Net cash provided by operating activities included:
Interest paid (net of amounts capitalized) $ 303
$ 269
Net income taxes paid to taxing authorities (9 ) 42
Non-cash investing and financing activities:
Contribution of assets^(a)
—
143
Fair value of assets acquired^(b)
—
350


	Three Months Ended March 31,
(In millions)	2021		2020
Net cash provided by operating activities included:
Interest paid (net of amounts capitalized)	$	336	$	300
Net income taxes paid to (received from) taxing authorities	1		(9)


^(a)	~~2019 includes the contribution of net assets to Capline LLC. See Note 13.~~


^(b)	~~2019 includes the recognition of the Capline LLC equity method investment. See Note 13.~~


(In millions)	March 31, 2021		December 31, 2020
Cash and cash equivalents(a)	$	624	$	415
Restricted cash(b)	1		1
Cash, cash equivalents and restricted cash	$	625	$	416

(a) Excludes $134 million and $140 million of cash included in assets held for sale representing Speedway store cash.

(In millions) March 31,
2020 December 31,
2019
Cash and cash equivalents $ 1,690
$ 1,527
Restricted cash^(a)
4
2
Cash, cash equivalents and restricted cash $ 1,694
$ 1,529
(b) The restricted cash balance is included within other current assets on the consolidated balance sheets.


^(a)	~~The restricted cash balance is included within other current assets on the consolidated balance sheets.~~

The consolidated statements of cash flows exclude changes to the consolidated balance sheets that did not affect cash. The following is a reconciliation of additions to property, plant and equipment to total capital expenditures:


	Three Months Ended March 31,
(In millions)	2021		2020
Additions to property, plant and equipment per the consolidated statements of cash flows	$	304	$	951
Decrease in capital accruals	(48)		(120)
Total capital expenditures	$	256	$	831

20. ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table shows the changes in accumulated other comprehensive loss by component. Amounts in parentheses indicate debits.


(In millions)	Pension Benefits		Other Benefits		Gain on Cash Flow Hedge		Workers Compensation		Total
Balance as of December 31, 2019	$	(212)	$	(116)	$	1	$	7	$	(320)
Other comprehensive loss before reclassifications, net of tax of $(1)	(2)		(2)		0		0		(4)
Amounts reclassified from accumulated other comprehensive loss:
Amortization – prior service credit(a)	(11)		0		—		—		(11)
– actuarial loss(a)	8		1		—		—		9
– settlement loss(a)	0		0		—		—		0
Other	—		—		—		(1)		(1)
Tax effect	1		0		0		0		1
Other comprehensive loss	(4)		(1)		0		(1)		(6)
Balance as of March 31, 2020	$	(216)	$	(117)	$	1	$	6	$	(326)

(In millions) Pension Benefits Other Benefits Gain on Cash Flow Hedge Workers Compensation Total
Balance as of December 31, 2018 $ (132 ) $ (23 ) $ 2
$ 9
$ (144 )
Other comprehensive loss before reclassifications, net of tax of $0 (1 ) —
—
—
(1 )
Amounts reclassified from accumulated other comprehensive loss:
Amortization – prior service credit^(a)
(11 ) —
—
—
(11 )
– actuarial loss^(a)
4
—
—
—
4
– settlement loss^(a)
—
—
—
—
—
Other —
—
—
(1 ) (1 )
Tax effect 2
—
—
—
2
Other comprehensive loss (6 ) —
—
(1 ) (7 )
Balance as of March 31, 2019 $ (138 ) $ (23 ) $ 2
$ 8
$ (151 )

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(In millions) Pension Benefits Other Benefits Gain on Cash Flow Hedge Workers Compensation Total
Balance as of December 31, 2019 $ (212 ) $ (116 ) $ 1
$ 7
$ (320 )
Other comprehensive loss before reclassifications, net of tax of ($1) (2 ) (2 ) —
—
(4 )
Amounts reclassified from accumulated other comprehensive loss:
Amortization – prior service credit^(a)
(11 ) —
—
—
(11 )
– actuarial loss^(a)
8
1
—
—
9
– settlement loss^(a)
—
—
—
—
—
Other —
—
—
(1 ) (1 )
Tax effect 1
—
—
—
1
Other comprehensive loss (4 ) (1 ) —
(1 ) (6 )
Balance as of March 31, 2020 $ (216 ) $ (117 ) $ 1
$ 6
$ (326 )


^(a)	~~These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. See Note 21.~~


(In millions)	Pension Benefits		Other Benefits		Gain on Cash Flow Hedge		Workers Compensation		Total
Balance as of December 31, 2020	$	(338)	$	(181)	$	1	$	6	$	(512)
Other comprehensive loss before reclassifications, net of tax of $0	(2)		0		0		0		(2)
Amounts reclassified from accumulated other comprehensive loss:
Amortization – prior service credit(a)	(11)		1		—		—		(10)
– actuarial loss(a)	12		2		—		—		14
– settlement loss(a)	0		0		—		—		0
Other	—		—		—		(1)		(1)
Tax effect	(1)		0		0		1		0
Other comprehensive income (loss)	(2)		3		0		0		1
Balance as of March 31, 2021	$	(340)	$	(178)	$	1	$	6	$	(511)

(a)These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. See Note 21.

21. PENSION AND OTHER POSTRETIREMENT BENEFITS

The following summarizes the components of net periodic benefit costs:

Three Months Ended March 31,
Pension Benefits Other Benefits
(In millions) 2020 2019 2020 2019
Components of net periodic benefit cost:
Service cost $ 69
$ 58
$ 9
$ 8
Interest cost 25
28
8
9
Expected return on plan assets (34 ) (32 ) —
—
Amortization – prior service credit (11 ) (11 ) —
—
– actuarial loss 8
4
1
—
– settlement loss —
—
—
—
Net periodic benefit cost $ 57
$ 47
$ 18
$ 17


	Three Months Ended March 31,
	Pension Benefits				Other Benefits
(In millions)	2021		2020		2021		2020
Components of net periodic benefit cost:
Service cost	$	76	$	63	$	10	$	9
Interest cost	23		25		7		8
Expected return on plan assets	(33)		(34)		0		0
Amortization – prior service credit	(11)		(11)		1		0
– actuarial loss	11		8		2		1
– settlement loss	0		0		0		0
Net periodic benefit cost	$	66	$	51	$	20	$	18

The components of net periodic benefit cost other than the service cost component are included in net interest and other financial costs on the consolidated statements of income.

During the three months ended March 31, ~~2020,~~2021, we made contributions of $3$226 million to our funded pension plans. Benefit payments related to unfunded pension and other postretirement benefit plans were $6$10 million and ~~$11~~$12 million, respectively, during the three months ended March 31, ~~2020.~~2021.

22. COMMITMENTS AND CONTINGENCIES

We are the subject of, or a party to, a number of pending or threatened legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relating to the environment. Some of these matters are discussed below. For matters for which we have not recorded a liability, we are unable to estimate a range of possible loss because the issues involved have not been fully developed through pleadings, discovery or court proceedings. However, the ultimate resolution of some of these contingencies could, individually or in the aggregate, be material.

Environmental Matters

We are subject to federal, state, local and foreign laws and regulations relating to the environment. These laws generally provide for control of pollutants released into the environment and require responsible parties to undertake remediation of hazardous waste disposal sites and certain other locations including presently or formerly owned or operated retail marketing sites. Penalties may be imposed for noncompliance.

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At March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, accrued liabilities for remediation totaled ~~$418~~$393 million and ~~$433~~$397 million, respectively. It is not presently possible to estimate the ultimate amount of all remediation costs that might be incurred or the penalties, if any, that may be imposed. Receivables for recoverable costs from certain states, under programs to assist companies in clean-up efforts related to underground storage tanks at presently or formerly owned or operated retail marketing sites, were ~~$29~~$6 million and ~~$29~~$7 million at March 31, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively.

Governmental and other entities in ~~California, Hawaii, Maryland, New York and Rhode Island~~various states have filed lawsuits against ~~coal, gas, oil and petroleum~~energy companies, including ~~the Company.~~MPC. The lawsuits allege damages as a result of climate change and the plaintiffs are seeking unspecified damages and abatement under various tort theories. We are currently subject to such proceedings in federal or state courts in California, Delaware, Maryland, Hawaii, Rhode Island and South Carolina. Similar lawsuits may be filed in other jurisdictions. At this early stage, the ultimate outcome of these matters ~~remains~~remain uncertain, and neither the likelihood of an unfavorable outcome nor the ultimate liability, if any, can be determined.

We are involved in a number of environmental enforcement matters arising in the ordinary course of business. While the outcome and impact on us cannot be predicted with certainty, management believes the resolution of these environmental matters will not, individually or collectively, have a material adverse effect on our consolidated results of operations, financial position or cash flows.

Other ~~Lawsuits~~Legal Proceedings

In ~~May 2015,~~early July 2020, Tesoro High Plains Pipeline Company, LLC (“THPP”), a subsidiary of MPLX, received a Notification of Trespass Determination from the ~~Kentucky attorney general~~Bureau of Indian Affairs (“BIA”) relating to a portion of the Tesoro High Plains Pipeline that crosses the Fort Berthold Reservation in North Dakota. The notification covered the rights of way for 23 tracts of land and demanded the immediate cessation of pipeline operations. The notification also assessed trespass damages of approximately $187 million. THPP appealed this determination, which triggered an automatic stay of the requested pipeline shutdown and payment. On October 29, the Assistant Secretary - Indian Affairs issued an order vacating the BIA’s trespass order and requiring the Regional Director for the BIA Great Plains Region to issue a new decision on or before December 15 covering all 34 tracts at issue. On December 15, the Regional Director of the BIA issued a new trespass notice to THPP consistent with the Assistant Secretary - Indian Affairs order vacating the prior trespass order. The new order found that THPP was in trespass and assessed trespass damages of approximately $4 million (including interest), which has been paid. The order also required THPP to immediately cease and desist use of the portion of the pipeline that crosses the property at issue. THPP has complied with the Regional Director’s December 15, 2020 notice. On February 12, 2021, landowners filed ~~a lawsuit against our wholly owned subsidiary, Marathon Petroleum Company LP (“MPC LP”),~~suit in the ~~United States~~U.S. District Court for the ~~Western~~ District of ~~Kentucky asserting claims under federal~~North Dakota (the “District of North Dakota”) against THPP, the Department of the Interior, the Assistant Secretary - Indian Affairs, the Interior Board of Indian Appeals and ~~state antitrust statutes,~~ the ~~Kentucky Consumer Protection Act,~~BIA, requesting, among other things, that decisions by the Assistant Secretary - Indian Affairs and ~~state common law.~~the Interior Board of Indian Appeals be vacated as to the award of damages to plaintiffs. In March 2021, THPP received a copy of an order purporting to vacate all orders related to THPP’s alleged trespass issued by the BIA between July 2, 2020 and January 14, 2021. The ~~complaint, as amended~~order directs the Regional Director of the BIA to reconsider the issue of THPP’s alleged trespass and issue a new order, if necessary, after all interested parties have had an opportunity to be heard. Subsequently, landowners voluntarily dismissed the suit filed in ~~July 2015, alleges that MPC LP used deed restrictions, supply agreements~~the District of North Dakota. On April 23, 2021, THPP filed a lawsuit in the District of North Dakota against the United States of America, the U.S. Department of the Interior and the BIA challenging the March order purporting to vacate all previous orders related to THPP’s alleged trespass.

MPLX continues to work towards a settlement of this matter with customers and exchange agreements with competitors to unreasonably restrain trade in areas within Kentucky and seeks declaratory relief, unspecified damages, civil penalties, restitution and disgorgementholders of ~~profits. At this stage,~~the property rights at issue. Management does not believe the ultimate ~~outcome~~resolution of this ~~litigation remains uncertain, and neither the likelihood~~matter will have a material adverse effect on our consolidated financial position, results of an unfavorable outcome nor the ultimate liability, if any, can be determined, and we are unable to estimate a reasonably possible loss (or range of loss) for this matter. We intend to vigorously defend ourselves in this matter.operations, or cash flows.

We are also a party to a number of other lawsuits and other proceedings arising in the ordinary course of business. While the ultimate outcome and impact to us cannot be predicted with certainty, we believe that the resolution of these other lawsuits and proceedings will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Guarantees

We have provided certain guarantees, direct and indirect, of the indebtedness of other companies. Under the terms of most of these guarantee arrangements, we would be required to perform should the guaranteed party fail to fulfill its obligations under the specified arrangements. In addition to these financial guarantees, we also have various performance guarantees related to specific agreements.

Guarantees related to indebtedness of equity method investees—

LOOP and LOCAP

MPC and MPLX hold interests in an offshore oil port, LOOP, and MPLX holds an interest in a crude oil pipeline system, LOCAP. Both LOOP and LOCAP have secured various project financings with throughput and deficiency agreements. Under

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the agreements, MPC, as a shipper, is required to advance funds if the investees are unable to service their debt. Any such advances are considered prepayments of future transportation charges. The duration of the agreements varies but tends to follow the terms of the underlying debt, which extend through 2037. Our maximum potential undiscounted payments under these agreements for the debt principal totaled $171 million as of March 31, ~~2020.~~2021.

~~In connection with our 25 percent interest in Gray Oak~~Dakota Access Pipeline LLC (“Gray Oak Pipeline”), we have entered into an Equity Contribution Agreement obligating us to make certain equity contributions to Gray Oak Pipeline to support its obligations under a construction loan facility. Gray Oak oil pipeline is a crude oil transportation system from West Texas and the Eagle Ford formation to destinations in the Ingleside, Corpus Christi and Sweeney, Texas markets. Gray Oak Pipeline entered into the construction loan facility with a syndicate of banks to finance a portion of the construction costs of the pipeline project.

The Equity Contribution Agreement requires us to contribute our pro rata share of any amounts necessary to allow Gray Oak Pipeline to cure any payment defaults under the construction loan facility or to repay all amounts outstanding under the facility, including principal, accrued interest, fees and expenses, in certain circumstances, including the failure of Gray Oak Pipeline to repay or refinance the construction loan facility prior to its scheduled maturity date of June 3, 2022. Gray Oak may borrow up to $1.43 billion under the construction loan facility (after giving effect to the exercise of all options to increase its borrowing capacity). As of March 31, 2020, our maximum potential undiscounted payments under the Equity Contribution Agreement for the debt principal totaled $345 million.

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In connection with MPLX’s 9.19 percent indirect interest in a joint venture (“Dakota Access”) that owns and operates the Dakota Access Pipeline and Energy Transfer Crude Oil Pipeline projects, collectively referred to as the Bakken Pipeline system, MPLX ~~has~~ entered into a Contingent Equity Contribution Agreement. MPLX, along with the other joint venture owners in the Bakken Pipeline system, ~~have~~has agreed to make equity contributions to the joint venture upon certain events occurring to allow the entities that own and operate the Bakken Pipeline system to satisfy their senior note payment obligations. The senior notes were issued to repay amounts owed by the pipeline companies to fund the cost of construction of the Bakken Pipeline system.

In March 2020, the U.S. District Court for the District of Columbia (the “D.D.C.”) ordered the U.S. Army Corps of Engineers (“Army Corps”), which granted permits and an easement for the Bakken Pipeline system, to conduct a full environmental impact statement (“EIS”), and further requested briefing on whether an easement ~~permit~~ necessary for the operation of the Bakken Pipeline system should be vacated while the EIS is being prepared.

On July 6, 2020, the D.D.C. ordered vacatur of the easement to cross Lake Oahe during the pendency of an EIS and further ordered a shut down of the pipeline by August 5, 2020. The D.D.C. denied a motion to stay that order. Dakota Access and the Army Corps appealed the D.D.C.’s orders to the U.S. Court of Appeals for the District of Columbia Circuit (the “Court of Appeals”). On July 14, 2020, the Court of Appeals issued an administrative stay while the court considered Dakota Access and the Army Corps’ emergency motion for stay pending appeal. On August 5, 2020, the Court of Appeals stayed the D.D.C.’s injunction that required the pipeline be shutdown and emptied of oil by August 5, 2020. The Court of Appeals denied a stay of the D.D.C.’s March order, which required the EIS, and further denied a stay of the D.D.C.’s July order, which vacated the easement. On January 26, 2021, the Court of Appeals upheld the D.D.C.’s order vacating the easement while the Army Corps prepares the EIS. The Court of Appeals reversed the D.D.C.’s order to the extent it directed that the pipeline be shutdown and emptied of oil. In the D.D.C., briefing has been completed for a renewed request for an injunction. The pipeline remains operational.

If the ~~permit~~pipeline is ~~vacated~~temporarily shut down pending completion of the EIS, ~~and the vacatur is deemed temporary,~~ MPLX would have to contribute its 9.19 percent pro rata share of funds required to pay interest accruing on the notes and any portion of the principal that matures while the pipeline is ~~shutdown and~~shutdown. It is expected that MPLX would contribute its 9.19 percent pro rata share of any costs to remediate any deficiencies to reinstate the permit and/or return the pipeline into operation. If the ~~court vacates~~vacatur of the easement permit ~~and such action~~ results in a permanent shutdown of the pipeline, MPLX would have to contribute its 9.19 percent pro rata share of the cost to redeem the bonds (including the one percent redemption premium required pursuant to the indenture governing the notes) and any accrued and unpaid ~~interest, if any.~~interest. As of March 31, ~~2020,~~2021, our maximum potential undiscounted payments under the Contingent Equity Contribution Agreement ~~was~~were approximately $230 million.

Crowley Ocean Partners LLC and Crowley Blue Water Partners LLC

In connection with our 50 percent indirect interest in Crowley Ocean Partners LLC, we have agreed to conditionally guarantee our portion of the obligations of the joint venture and its subsidiaries under a senior secured term loan agreement. The term loan agreement provides for loans of up to $325 million to finance the acquisition of four product tankers. MPC’s liability under the guarantee for each vessel is conditioned upon the occurrence of certain events, including if we cease to maintain an investment grade credit rating or the charter for the relevant product tanker ceases to be in effect and is not replaced by a charter with an investment grade company on certain defined commercial terms. As of March 31, ~~2020,~~2021, our maximum potential undiscounted payments under this agreement for debt principal totaled ~~$125~~$114 million.

In connection with our 50 percent indirect interest in Crowley Blue Water Partners LLC, we have agreed to provide a conditional guarantee of up to 50 percent of its outstanding debt balance in the event there is no charter agreement in place with an investment grade customer for the entity’s three vessels as well as other financial support in certain circumstances. As of March 31, ~~2020,~~2021, our maximum potential undiscounted payments under this arrangement was ~~$118~~$111 million.

~~Marathon Oil indemnifications~~—The separation and distribution agreement and other agreements with Marathon Oil to effect our spinoff provide for cross-indemnities between Marathon Oil and us. In general, Marathon Oil is required to indemnify us for any liabilities relating to Marathon Oil’s historical oil and gas exploration and production operations, oil sands mining operations and integrated gas operations, and we are required to indemnify Marathon Oil for any liabilities relating to Marathon Oil’s historical refining, marketing and transportation operations. The terms of these indemnifications are indefinite and the amounts are not capped.

Other guarantees—

We have entered into other guarantees with maximum potential undiscounted payments totaling ~~$103~~$99 million as of March 31, ~~2020,~~2021, which primarily consist of a commitment to contribute cash to an equity method investee for certain catastrophic events, in lieu of procuring insurance coverage, a commitment to fund a share of the bonds issued by a government entity for construction of public utilities in the event that other industrial users of the facility default on their utility payments and leases of assets containing general lease indemnities and guaranteed residual values.

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~~General guarantees associated with dispositions~~—Over the years, we have sold various assets in the normal course of our business. Certain of the related agreements contain performance and general guarantees, including guarantees regarding inaccuracies in representations, warranties, covenants and agreements, and environmental and general indemnifications that require us to perform upon the occurrence of a triggering event or condition. These guarantees and indemnifications are part of the normal course of selling assets. We are typically not able to calculate the maximum potential amount of future payments that could be made under such contractual provisions because of the variability inherent in the guarantees and indemnities. Most often, the nature of the guarantees and indemnities is such that there is no appropriate method for quantifying the exposure because the underlying triggering event has little or no past experience upon which a reasonable prediction of the outcome can be based.

Contractual Commitments and Contingencies

At March 31, ~~2020,~~2021, our contractual commitments to acquire property, plant and equipment and advance funds to equity method investees totaled ~~$626~~$396 million.

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Certain natural gas processing and gathering arrangements require us to construct natural gas processing plants, natural gas gathering pipelines and NGL pipelines and contain certain fees and charges if specified construction milestones are not achieved for reasons other than force majeure. In certain cases, certain producer customers may have the right to cancel the processing arrangements with us if there are significant delays that are not due to force majeure.

~~23. SUBSEQUENT EVENTS~~

~~Subsequent to the end of the quarter, we completed a number of financing activities to enhance our liquidity as described below.~~

~~Additional MPC 364-Day Bank Revolving Credit Facility~~

On April 27, 2020, MPC entered into a credit agreement with a syndicate of lenders providing for an additional $1 billion 364-day revolving credit facility. The credit agreement for the additional 364-day revolving credit facility contains representations and warranties, affirmative and negative covenants and events of default that we consider customary for agreements of their nature and type and substantially similar to those contained in our existing $5.0 billion five-year revolving credit facility and $1.0 billion 364-day revolving credit facility.

~~MPC Senior Notes Issuance~~

On April 27, 2020, we closed on the issuance of $2.5 billion in aggregate principal amount of senior notes in a public offering, consisting of $1.25 billion aggregate principal amount of 4.500 percent unsecured senior notes due May 2023 and $1.25 billion aggregate principal amount of 4.700 percent unsecured senior notes due May 2025. Interest is payable semi-annually in arrears. MPC used the net proceeds from this offering to repay amounts outstanding under its five-year revolving credit facility.

~~The following table shows our available credit capacity, excluding MPLX, as of May 5, 2020.~~

(Dollars in millions)
Total
Capacity

Outstanding
Borrowings

Outstanding
Letters
of Credit

Available
Capacity
Expiration
MPC 364-day bank revolving credit facility $ 1,000
$ —
$ —
$ 1,000
September 2020
MPC 364-day bank revolving credit facility 1,000
—
—
1,000
April 2021
MPC bank revolving credit facility^(a)
5,000
750
1
4,249
October 2023
MPC trade receivables securitization facility^(b)
517
—
—
517
July 2021
Available capacity, excluding MPLX, as of May 5, 2020 6,766


^(a)	~~Borrowed $2 billion on March 30, 2020 and $1.5 billion in April. Repaid $2.75 billion in May.~~


^(b)	Availability under our $750 million trade receivables facility is a function of eligible trade receivables, which will be lower in a sustained lower price environment for refined products. As of April 30, 2020 eligible trade receivables supported borrowings of approximately $517 million.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This section should also be read in conjunction with the unaudited consolidated financial statements and accompanying footnotes included under Item 1. Financial Statements and in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

Disclosures Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, particularly Management’s Discussion and Analysis of Financial Condition and Results of Operations and Quantitative and Qualitative Disclosures about Market Risk, includes forward-looking statements that are subject to risks, contingencies or uncertainties. You can identify forward-looking statements by words such as “anticipate,” “believe,” “commitment,” “could,” “design,” “estimate,” “expect,” “forecast,” “goal,” “guidance,” “imply,” “intend,” “may,” “objective,” “opportunity,” “outlook,” “plan,” “policy,” “position,” “potential,” “predict,” “priority,” “project,” “proposition,” “prospective,” “pursue,” “seek,” “should,” “strategy,” “target,” “will,” “would” or other similar expressions that convey the uncertainty of future events or outcomes.

Forward-looking statements include, among other things, statements regarding:

•future ~~levels of revenues, refining~~financial and ~~marketing margins,~~ operating ~~costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or earnings per share;~~results;

•future levels of capital, environmental or maintenance expenditures, general and administrative and other expenses;

•expected savings from the restructuring or reorganization of business components;

•the success or timing of completion of ongoing or anticipated ~~capital~~projects or ~~maintenance projects;~~transactions;

•business strategies, growth opportunities and expected ~~investment;~~investments;

•consumer demand for refined products, natural gas and NGLs;

•the timing and amount of any future common stock ~~repurchases;~~repurchases or dividends; and

•the anticipated effects of actions of third parties such as competitors, activist investors, or federal, foreign, state or local regulatory authorities, or plaintiffs in litigation.

Our forward-looking statements are not guarantees of future performance, and you should not rely unduly on them, as they involve risks, uncertainties and assumptions that we cannot predict. Material differences between actual results and any future performance suggested in our forward-looking statements could result from a variety of factors, including the following:

•general economic, political or regulatory developments, including changes in governmental policies relating to refined petroleum products, crude oil, natural gas or NGLs, or taxation;

•the ~~effects~~magnitude and duration of the ~~recent outbreak of~~ COVID-19 pandemic and its effects, including travel restrictions, business and school closures, increased remote work, stay-at-home orders and other actions taken by individuals, government and the adverse impact thereof on our business, financial condition, results of operations and cash flows, including our growth, operating costs, labor availability, logistical capabilities, customer demand for our products and industry demand generally, margins, inventory value, cash position, taxes,private sector to stem the ~~price of our securities and trading markets with respect thereto, our ability to access capital markets, and the global economy and financial markets generally;~~

~~the effects~~spread of the ~~recent outbreak of COVID-19, and the current economic environment generally, on our working capital, cash flows and liquidity, which can be significantly affected by decreases in commodity prices;~~virus;

•our ability to successfully complete the planned Speedway ~~separation~~sale and realize the expected benefits within the expected timeframe or at all;

~~the risk that the cost savings and any other synergies from the Andeavor transaction may not be fully realized or may take longer to realize than expected;~~

~~risks relating to any unforeseen liabilities of Andeavor;~~

•further impairments;

~~risks related to the acquisition of Andeavor Logistics LP (“ANDX”) by MPLX LP (“MPLX”);~~

our ability to complete any divestitures on commercially reasonable terms and within the expected timeframe, and the effects of any such divestitures on the business, financial condition, results of operations and cash flows;

~~the effect of restructuring or reorganization of business components;~~

•the regional, national and worldwide availability and pricing of refined products, crude oil, natural gas, NGLs and other feedstocks;

~~our ability to manage~~ •disruptions in credit markets or changes to credit ratings;

•the reliability of processing units and other equipment;

•the adequacy of capital resources and liquidity, including ~~the~~ availability, timing and amounts of ~~sufficient~~free cash flow necessary to execute business plans and to effect any share repurchases or ~~dividend increases, including within~~to maintain or increase the ~~expected timeframe;~~dividend;

•the potential effects of judicial or other proceedings on the business, financial condition, results of operations and cash flows;

•continued or further volatility in and degradation of general economic, market, industry or business conditions as a result of the COVID-19 pandemic, other infectious disease outbreaks, natural hazards, extreme weather events or otherwise;

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compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations ~~including the cost of compliance with the Renewable Fuel Standard,~~ and enforcement actions initiated thereunder;

•adverse market conditions or other ~~similar~~ risks affecting MPLX;

•refining industry overcapacity or under capacity;

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•changes in producer customers’ drilling plans or in volumes of throughput of crude oil, natural gas, NGLs, refined products or other hydrocarbon-based products;

•non-payment or non-performance by our ~~producer and other~~ customers;

•changes in the cost or availability of third-party vessels, pipelines, railcars and other means of transportation for crude oil, natural gas, NGLs, feedstocks and refined products;

•the price, availability and acceptance of alternative fuels and alternative-fuel vehicles and laws mandating such fuels or vehicles;

•political and economic conditions in nations that consume refined products, natural gas and NGLs, including the United States and Mexico, and in crude oil producing regions, including the Middle East, Africa, Canada and South America;

•actions taken by our competitors, including pricing adjustments, expansion of retail activities, the expansion and retirement of refining capacity and the expansion and retirement of pipeline capacity, processing, fractionation and treating facilities in response to market conditions;

•completion of pipeline projects within the United States;

•changes in fuel and utility costs for our facilities;

•accidents or other unscheduled shutdowns affecting our refineries, machinery, pipelines, processing, fractionation and treating facilities or equipment, or those of our suppliers or customers;

•acts of war, terrorism or civil unrest that could impair our ability to produce refined products, receive feedstocks or to gather, process, fractionate or transport crude oil, natural gas, NGLs or refined products;

•adverse changes in laws including with respect to tax and regulatory matters;

•political pressure and influence of environmental groups and other stakeholders upon policies and decisions related to the production, gathering, refining, processing, fractionation, transportation and marketing of crude oil or other feedstocks, refined products, natural gas, NGLs or other hydrocarbon-based products;

•labor and material shortages;

•the costs, disruption and diversion of management’s attention associated with campaigns commenced by activist investors; and

•personnel changes.

For additional risk factors affecting our business, see the ~~other~~risk factors described in ~~Item 1A. Risk Factors.~~

our Annual Report on Form 10-K for the year ended December 31, 2020. We undertake no obligation to update any forward-looking statements except to the extent required by applicable law.

~~CORPORATE OVERVIEW~~

We are an independent petroleum refining and marketing, retail and midstream company. We own and operate the nation’s largest refining system through 16 refineries, located in the Gulf Coast, Mid-Continent and West Coast regions of the United States, with an aggregate crude oil refining capacity of approximately 3.1 mmbpcd. Our refineries supply refined products to resellers and consumers across the United States. We distribute refined products to our customers through transportation, storage, distribution and marketing services provided largely by our Midstream segment. We believe we are one of the largest wholesale suppliers of gasoline and distillates to resellers in the United States.

~~We have three strong brands: Marathon~~^®~~, Speedway~~^® ~~and ARCO~~^®. The branded outlets, which primarily operate under the Marathon brand, are established motor fuel brands across the United States available through approximately 6,900 branded outlets operated by independent entrepreneurs in 35 states, the District of Columbia and Mexico. We believe our Retail segment operates the second largest chain of company-owned and operated retail gasoline and convenience stores in the United States, with approximately 3,880 convenience stores, primarily under the Speedway brand, and 1,070 direct dealer locations, primarily under the ARCO brand, across the United States.

We primarily conduct our midstream operations through our ownership interest in MPLX, which owns and operates crude oil and refined product transportation and logistics infrastructure and natural gas and NGL gathering, processing, and fractionation assets. As of March 31, 2020, we owned, leased or had ownership interests in approximately 17,200 miles of crude oil and refined product pipelines to deliver crude oil to ourrefineries and other locations and refined products to wholesale and retail market areas. We distribute our refined products through one of the largest terminal operations in the United States and one of the largest private domestic fleets of inland petroleum product barges. Our integrated midstream energy asset network links

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producers of natural gas and NGLs from some of the largest supply basins in the United States to domestic and international markets. Our midstream gathering and processing operations include: natural gas gathering, processing and transportation; and NGL gathering, transportation, fractionation, storage and marketing.

Our operations consist of three reportable operating segments: Refining & Marketing, Retail, and Midstream. Each of these segments is organized and managed based upon the nature of the products and services they offer.

•

~~Refining & Marketing – refines crude oil and other feedstocks at our 16 refineries~~ in the Gulf Coast, Mid-Continent and West Coast regions of the United States, purchases refined products and ethanol for resale and distributes refined products through transportation, storage, distribution and marketing services provided largely by our Midstream segment. We sell refined products to wholesale marketing customers domestically and internationally, to buyers on the spot market, to our Retail business segment and to independent entrepreneurs who operate primarily Marathon^® ~~branded outlets.~~


•	~~Retail – sells transportation fuels and convenience products in the retail market across the United States through company-owned and operated convenience stores, primarily under the Speedway~~^® ~~brand, and long-term fuel supply contracts with direct dealers who operate locations mainly under the ARCO~~^® ~~brand.~~


•	Midstream – transports, stores, distributes and markets crude oil and refined products principally for the Refining & Marketing segment via refining logistics assets, pipelines, terminals, towboats and barges; gathers, processes and transports natural gas; and gathers, transports, fractionates, stores and markets NGLs. The Midstream segment primarily reflects the results of MPLX.

~~Recent Developments~~EXECUTIVE SUMMARY

Business Update

The ~~recent~~ outbreak of COVID-19 and its development into a pandemic in March 2020 ~~have~~ resulted in significant economic disruption globally. Actions taken by various governmental authorities, individuals and companies around the world to prevent the spread of COVID-19 through social distancing ~~have~~ restricted travel, many business operations, public gatherings and the overall level of individual movement and in-person interaction across the ~~globe.~~

~~This has in turn significantly reduced global economic activity and~~globe resulted in ~~airlines dramatically cutting back on~~dramatic reductions in airline flights and ~~a decrease in~~ motor vehicle use ~~at a time when seasonal driving patterns typically result~~ in ~~an increase of consumer~~2020 as compared to prior to the pandemic.

As we begin 2021, while demand ~~for gasoline. As a result, there has also been a decline~~remains below historical levels, we continue to see gradual recovery in the ~~demand for~~environment in which our business operates, albeit in some markets and regions more or less than others. The increased availability of vaccinations and the ~~refined petroleum products that we manufacture~~corresponding reductions in travel and ~~sell.~~business restrictions appears to be driving increased economic activity, including the opening of many business and schools as well as more in-person interaction broadly.

In ~~addition, recent global geopolitical events and macroeconomic conditions have exacerbated the decline in crude oil prices and have contributed~~response to ~~an increase in crude oil price volatility.~~this business environment, we continue to focus on three near-term priorities for our businesses:

~~The decrease in the demand for refined petroleum products coupled with the decline in the price~~Strengthen Competitive Position of ~~crude oil has resulted in a significant decrease in the price of the refined petroleum products we produce and sell and had a negative impact on working capital during the quarter.~~

The price of refined products we sell and the feedstocks we purchase impact our revenues, income from operations, net income and cash flows. In addition, a decline in the market prices for products held in our inventories below the carrying value of our inventory resulted in an adjustment to the value of our inventories. At March 31, 2020, market values for these inventories were lower than their LIFO cost basis and, as a result, we recorded an inventory valuation charge of $3.22 billion to value these inventories at the lower of cost or market. Based on movements of refined product prices, future inventory valuation adjustments could have a negative or positive effect to earnings. Such losses are subject to reversal in subsequent periods if prices recover.Assets

We are ~~actively responding~~committed to positioning our assets so that we are a leader in operational, financial, and sustainability performance and are evaluating the strength and fit of assets in our portfolio. Our goal is that each individual asset generates free-cash-flow back to the ~~impacts~~business and contributes to shareholder returns. With our investments we are focused on high returning projects that ~~these matters~~we believe will enhance the competitiveness of our portfolio, including our investments in sustainable fuels and technologies that lower our carbon intensity as the global energy mix evolves.

Improve Commercial Performance

We are ~~having~~focused on leveraging advantaged raw material selection, new approaches in the commercial space to be more dynamic amidst changing market conditions and achieving technology improvements to advance our ~~business. During March~~commercial performance.

Lower Cost Structure

We are committed to achieving operational excellence by reducing costs, improving efficiency and ~~continuing through April 2020, we started reducing the amount of crude oil processed at our refineries in~~driving operational improvements. In response to the ~~decreased demand~~pandemic, in March of 2020, we committed to immediately reducing our capital spending and operating expenses. In 2021, we are continuing this focus with planned reductions of over $200 million for our products, and we temporarily idled portions of refining capacity to further limit production. In addition to these measures to address our operations, we are addressing our liquidity as outlined below.

~~We expect to defer or delay certain~~ capital expenditures and investments as compared to 2020 (excluding capitalized interest, potential acquisitions and MPLX’s capital investment plan).

In connection with our commitment to lower cost, in the third quarter of approximately $1.35 billion, or approximately 30 percent, which is expected to reduce planned spending levels down to $3.0 billion for 2020. The reductions are planned across all segments of the business, including: $250 million in Refining & Marketing; $770 million in Midstream, which includes MPLX; $250 million in Retail; and $80 million in Corporate. Remaining capital spend primarily relates to growth projects that are already in progress or spending that supports the safe and reliable operation of our facilities.

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~~We have taken~~2020 we announced strategic actions to reduce forecasted annual operating expenses by approximately of $950 million, primarily through reductions of fixed costs and deferral of certain expense projects, which includes $200 million of operating expense reductions at MPLX.

~~Throughput levels have been reduced across the organization~~lay a foundation for long-term success, including ~~the temporary idling of some facilities. The company~~ plans to ~~continue to monitor market conditions~~optimize our assets and ~~optimize crude oil acquisition, refining run rates, and logistics systems to respond on a regional basis.~~

~~Share repurchases have temporarily been suspended. The company will evaluate the timing of future repurchases as market conditions evolve.~~

~~On April 27, 2020, we entered into an additional $1 billion 364-day revolving credit facility, which expires~~structurally lower costs in 2021 ~~to provide incremental liquidity~~ and ~~financial flexibility during~~beyond. These actions included indefinitely idling the ~~commodity price and demand downturn.~~

~~On April 27, 2020, we closed on the issuance of $2.5 billion of senior notes. Proceeds from the senior notes were used to pay down amounts outstanding on the five-year revolving credit facility.~~

~~The company continues to evaluate further~~Gallup refinery, initiating actions to ~~enhance liquidity.~~strategically reposition the Martinez refinery to a renewable diesel facility and the approval of an involuntary workforce reduction plan. Our results in the first quarter of 2021 reflect the favorable effects from these cost reduction actions.

Many uncertainties remain with respect to COVID-19, including its resulting economic effects, and we are unable to predict the ultimate economic impacts from COVID-19 and how quickly national economies can recover once the pandemic ultimately subsides. However, the adverse impact of the economic effects on MPC has been and will likely continue to be significant. We believe we have proactively addressed many of the known impacts of COVID-19 to the extent possible and will strive to continue to do so, but there can be no guarantee the measures will be fully effective.

Other Strategic ~~Actions to Enhance Shareholder Value~~Updates

On ~~October 31, 2019,~~February 24, 2021, MPC’s board of directors approved our plan to strategically reposition the Martinez refinery to a renewable diesel facility. Converting the Martinez facility from refining petroleum to manufacturing renewable fuels signals our strong commitment to producing a substantial level of lower carbon-intensity fuels in California. As envisioned, the Martinez facility would start producing approximately 260 million gallons per year of renewable diesel by the second half of 2022, with a potential to build to full capacity of approximately 730 million gallons per year by the end of 2023.

The Dickinson, North Dakota, renewable fuels facility began ramping operations at the end of 2020 and is on track to reach full production by the end of the second quarter of 2021. At full capacity, the facility is expected to produce 184 million gallons per year of renewable diesel from corn and soybean oil. MPC is selling the renewable diesel into the California market to comply with the California Low Carbon Fuel Standard.

On August 2, 2020, we ~~announced~~entered into a definitive agreement to sell Speedway, our ~~intention to separate our~~company-owned and operated retail transportation fuel and convenience store business, ~~which is operated primarily under the Speedway brand, into an independent, publicly traded company through a tax-free distribution~~ to ~~MPC shareholders of publicly traded stock~~7-Eleven, Inc. for $21 billion in the new independent retail transportation fuel and convenience store company. This transaction is targeted to be completed in the fourth quarter of 2020, however timing could change given the COVID-19 related impacts to the business environment and access to capital markets. This transaction iscash, subject to ~~market, regulatory~~certain adjustments based on the levels of cash, debt and working capital at closing and certain other items. The taxable transaction is expected to close in the second quarter of 2021, subject to customary closing conditions ~~including final approval by MPC’s board of directors,~~and the receipt of ~~customary assurances regarding~~regulatory approvals. 7-Eleven and MPC continue to engage productively with the ~~intended tax-free nature~~Federal Trade Commission in its review of the transaction.This transaction is expected to result in after-tax cash proceeds of approximately $16.5 billion. The company expects to use the proceeds from the sale to strengthen the balance sheet and return capital to shareholders.

In connection with the ~~effectiveness~~agreement to sell Speedway, we have agreed to enter into certain ancillary agreements, including 15-year fuel supply agreements associated with 7-Eleven or its subsidiaries, depending on the fuel demand of ~~a registration statement~~Speedway and other factors to be ~~filed with the SEC. The Speedway business is currently a reporting unit within our Retail segment. MPC will retain its direct dealer business, which is also included~~set forth in the ~~Retail segment~~fuel supply agreement. Further, we expect incremental opportunities over time to supply 7-Eleven’s remaining business as ~~currently reported.~~7-Eleven’s existing arrangements mature and as new locations are added in connection with its announced U.S. and Canada growth strategy.

On March 18, 2020, we announced that MPC’s board of directors unanimously decided to maintain MPC’s current midstream structure, with the company remaining the general partner of MPLX. This decision concluded a comprehensive evaluation, led by a special committee of the board, that included extensive input from multiple external advisors and significant feedback from investors.

~~EXECUTIVE SUMMARY~~

Results

Select results for continuing operations are reflected in the following table.


	Three Months Ended March 31,
(In millions)	2021		2020
Income (loss) from continuing operations by segment
Refining & Marketing	$	(598)	$	(497)
Midstream	972		905
Corporate	(157)		(233)
Items not allocated to segments:
Transaction-related costs(a)	—		(8)

Impairments(b)	—		(9,137)

LCM inventory valuation adjustment	—		(3,185)
Income (loss) from continuing operations	217		(12,155)
Net interest and other financial costs	353		332
Income (loss) from continuing operations before income taxes	(136)		(12,487)
Provision (benefit) for income taxes on continuing operations	34		(1,951)
Income (loss) from continuing operations, net of tax	(170)		(10,536)

Three Months Ended
March 31,
(In millions, except per share data) 2020 2019
Income (loss) from operations by segment
Refining & Marketing $ (622 ) $ (334 )
Retail 519
170
Midstream 905
908
Items not allocated to segments (12,619 ) (75 )
Income from operations $ (11,817 ) $ 669
Net loss attributable to MPC $ (9,234 ) $ (7 )
Net income attributable to MPC per diluted share $ (14.25 ) $ (0.01 )
(a) 2020 includes costs incurred in connection with the Midstream strategic review.

(b) Includes impairment of goodwill, equity method investments and long lived assets.

Select results for discontinued operations are reflected in the following table.


	Three Months Ended March 31,
(In millions)	2021		2020
Income from discontinued operations
Speedway	$	330	$	400
Transaction-related costs(a)	(23)		(27)
LCM inventory valuation adjustment	—		(35)
Income from discontinued operations	307		338
Net interest and other financial costs	4		6
Income from discontinued operations before income taxes	303		332
Provision for income taxes on discontinued operations	69		14
Income from discontinued operations, net of tax	$	234	$	318

(a) Costs related to the Speedway separation.

The following table includes net income (loss) per diluted share data.


	Three Months Ended March 31,
	2021		2020
Net income (loss) per diluted share
Continuing operations	$	(0.73)	$	(14.74)
Discontinued operations	0.36		0.49
Net income (loss) attributable to MPC	$	(0.37)	$	(14.25)

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Actions taken by various governmental authorities, individuals and companies to prevent the spread of COVID-19 through social distancing have restricted travel, many business operations, public gatherings and the overall level of individual movement and in-person interaction in the areas where we operate which has impacted demand for our products. Net loss attributable to MPC was ~~$(9.23) billion,~~$(242) million, or ~~$(14.25)~~$(0.37) per diluted share, in the first quarter of ~~2020~~2021 compared to ~~$(7) million,~~$(9.23) billion, or ~~$(0.01)~~$(14.25) per diluted share, for the first quarter of ~~2019. The change was primarily~~2020, largely due to the absence of impairment ~~charges of $7.82 billion to goodwill~~expenses and ~~long-lived assets,~~ an LCM charge of $3.22 billion and impairments of equity method investments of $1.32 billion during the current period primarily driven by the effects of COVID-19 and the decline in commodity prices. Increased income from operations in our Retail segment due to higher fuel and merchandise margins was partially offset by a higher loss from operations in our Refining & Marketing segment due to decreases in refined product sales volumes and prices during the current quarter.

~~Inventories are stated at the lower of cost or market. Costs of crude oil, refinery feedstocks and refined products are stated under the LIFO~~ inventory costing method and aggregated on a consolidated basis for purposes of assessing if the cost basis of these inventories may have to be written down to market values. Based on movements of refined product prices, future inventory valuation adjustments could have a negative or positive effect to earnings. Such losses are subject to reversal in subsequent periods if prices recover. The impairments of goodwill, equity method investments and long-lived assets are based on fair value determinations, which require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the impairments recognizedcharge in the first three months of 2021. These effects were partially offset by decreased income from discontinued operations, which relates to the Speedway business, in the first quarter of 2021 compared to the first quarter of 2020 ~~will prove~~mainly due to ~~be an accurate prediction of~~lower volumes and fuel margins, partially offset by higher merchandise sales and margins and lower operating expenses.

See Note 3 to the ~~future.~~unaudited consolidated financial statements for additional information on discontinued operations.

Refer to the Results of Operations section for a discussion of consolidated financial results and segment results for the first quarter of ~~2020~~2021 as compared to the first quarter of ~~2019.~~2020.

MPLX

We owned approximately ~~666~~647 million MPLX common units at March 31, ~~2020~~2021 with a market value of ~~$7.74~~$16.59 billion based on the March 31, ~~2020~~2021 closing price of ~~$11.62~~$25.63 per common unit. On April ~~28, 2020,~~27, 2021, MPLX declared a quarterly cash distribution of $0.6875 per common unit payable on May ~~15, 2020.~~14, 2021. As a result, MPLX will make distributions totaling ~~$728~~$707 million to its common unitholders. MPC’s portion of these distributions is approximately ~~$458~~$445 million.

We received limited partner distributions of ~~$446~~$445 million from MPLX in the three months ended March 31, ~~2020~~2021 and ~~$473~~$446 million ~~from MPLX and ANDX combined~~ in the three months ended March 31, ~~2019. The decrease in distributions from~~2020.

During the ~~prior year is due to the fact that ANDX~~three months ended March 31, 2021, 6,272,981 MPLX common units had ~~a higher~~been repurchased at an average cost per unit ~~distribution prior~~of $24.78. Total cash paid for units repurchased during the three months ended March 31, 2021 was $155 million. As of March 31, 2021, MPLX had agreements to acquire 291,400 additional common units for $7 million, which settled in early April 2021. As of March 31, 2021, $812 million remained outstanding on the ~~Merger when compared to the MPLX distribution per unit post-merger.~~program for future purchases.

See Note 34 to the unaudited consolidated financial statements for additional information on MPLX.

~~Share Repurchases~~Liquidity

~~During the three months ended~~Our liquidity, excluding MPLX, totaled $4.47 billion at March 31, ~~2020, we did~~2021 consisting of:


	March 31, 2021
(In millions)	Total Capacity		Outstanding Borrowings		Available Capacity
Bank revolving credit facility(a)	$	5,000	$	1,301	$	3,699
364-day bank revolving credit facility	1,000		—		1,000
Trade receivables facility(b)	750		—		750
Commercial paper borrowings(c)	—		—		(1,717)
Total	$	6,750	$	1,301	$	3,732
Cash and cash equivalents(d)					734
Total liquidity					$	4,466

(a)Outstanding borrowings include $1 million in letters of credit outstanding under this facility.

(b)Availability under our $750 million trade receivables facility is a function of eligible trade receivables, which will be lower in a sustained lower price environment for refined products.

(c)We do not ~~repurchase any~~intend to have outstanding commercial paper borrowings in excess of ~~our common stock, which helped preserve our liquidity during the COVID-19 pandemic. Since January 1, 2012, our board~~available capacity under bank revolving credit facilities.

(d)Includes cash and cash equivalents classified as assets held for sale of ~~directors has approved $18.0 billion in total share repurchase authorizations~~$134 million and we have repurchased a total of $15.05 billion of our common stock, leaving $2.96 billion available for repurchases as of March 31, 2020. We will evaluate the timing to resume any future repurchases as market conditions evolve. See Note 8 to the unaudited consolidated financial statements.

~~Liquidity~~

~~As of March 31, 2020, we had~~excludes cash and cash equivalents of MPLX of $24 million.

Additionally, we have recorded an income tax receivable within other current assets in our balance sheet of approximately ~~$1.63~~$2.1 billion ~~excluding MPLX cash and cash equivalents~~which is expected to be received during the second half of ~~$57 million~~, $3.0 billion available under a five-year bank revolving credit facility, $1.0 billion available under a 364-day bank revolving credit facility, and $750 million available under our trade receivables securitization facility resulting in cash and available liquidity of $6.38 billion. MPC drew $2.0 billion on the five-year bank revolving credit facility in the first quarter of 2020. This borrowing was undertaken to provide financial flexibility given the recent commodity price downturn and the significant working capital impact associated with the decline in crude prices. The company has made short-term borrowings to manage the impact of commodity prices on working capital in the past and expects to do so from time to time in the future.2021.

MPLX’s liquidity totaled ~~$4.31~~$4.19 billion at March 31, ~~2020.~~2021. As of March 31, ~~2020,~~2021, MPLX had cash and cash equivalents of ~~$57~~$24 million, ~~$2.75~~$2.67 billion available under its $3.5 billion revolving credit agreement and $1.5 billion available through its intercompany loan agreement with MPC.

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OVERVIEW OF SEGMENTS

Refining & Marketing

Refining & Marketing segment income from operations depends largely on our Refining & Marketing margin, refining operating costs, refining planned turnarounds, distribution costs, ~~refining planned turnaround~~depreciation expenses and refinery throughputs.

Our Refining & Marketing margin is the difference between the prices of refined products sold and the costs of crude oil and other charge and blendstocks refined, including the costs to transport these inputs to our refineries and the costs of products purchased for resale. The crack spread is a measure of the difference between market prices for refined products and crude oil, commonly used by the industry as a proxy for the refining margin. Crack spreads can fluctuate significantly, particularly when prices of refined products do not move in the same direction as the cost of crude oil. As a performance benchmark and a comparison with other industry participants, we calculate Gulf Coast, Mid-Continent and West Coast crack spreads that we believe most closely track our operations and slate of products. The following are used for these crack-spread calculations:

•The Gulf Coast crack spread uses three barrels of ~~LLS~~MEH crude producing two barrels of USGC CBOB gasoline and one barrel of USGC ~~ULSD;~~ULSD. In the first quarter of 2021, we transitioned to MEH crude from LLS crude;

•The Mid-Continent crack spread uses three barrels of WTI crude producing two barrels of Chicago CBOB gasoline and one barrel of Chicago ULSD; and

•The West Coast crack spread uses three barrels of ANS crude producing two barrels of LA CARBOB and one barrel of LA CARB Diesel.

Our refineries can process significant amounts of sweet and sour crude oil, which typically can be purchased at a discount to crude oil referenced in our Gulf Coast, Mid-Continent and West Coast crack spreads. The amount of these discounts, which we refer to as the sweet differential and sour differential, can vary significantly, causing our Refining & Marketing margin to differ from blended crack spreads. In general, larger sweet and sour differentials will enhance our Refining & Marketing margin.

Future crude oil differentials will be dependent on a variety of market and economic factors, as well as U.S. energy policy.

The following table provides sensitivities showing an estimated change in annual net income due to potential changes in market conditions.

(In millions, after-tax)
Blended crack spread sensitivity^(a)(per $1.00/barrel change)
$ 910
Sour differential sensitivity^(b) (per $1.00/barrel change)
420
Sweet differential sensitivity^(c) (per $1.00/barrel change)
420
Natural gas price sensitivity^(d) (per $1.00/MMBtu)
325


(In millions, after-tax)
Blended crack spread sensitivity(a) (per $1.00/barrel change)	$	838
^(a)Sour differential sensitivity(b)(per $1.00/barrel change)	Crack spread based on 38 percent LLS, 38 percent WTI and 24 percent ANS with Gulf Coast, Mid-Continent and West Coast product pricing, respectively, and assumes all other differentials and pricing relationships remain unchanged.

396
^(b)Sweet differential sensitivity(c)(per $1.00/barrel change)						Sour crude oil basket consists of the following crudes: ANS, Argus Sour Crude Index, Maya and Western Canadian Select. We expect approximately 50 percent of the crude processed at our refineries in 2020 will be sour crude.

381
^(c)Natural gas price sensitivity(d)(per $1.00/MMBtu)						Sweet crude oil basket consists of the following crudes: Bakken, Brent, LLS, WTI-Cushing and WTI-Midland. We expect approximately 50 percent of the crude processed at our refineries in 2020 will be sweet crude.

275
^(d)

(a)Crack spread based on 40 percent MEH, 40 percent WTI and 20 percent ANS with Gulf Coast, Mid-Continent and West Coast product pricing, respectively, and assumes all other differentials and pricing relationships remain unchanged.

(b)Sour crude oil basket consists of the following crudes: ANS, Argus Sour Crude Index, Maya and Western Canadian Select. We expect approximately 51 percent of the crude processed at our refineries in 2021 will be sour crude.

(c)Sweet crude oil basket consists of the following crudes: Bakken, Brent, MEH, WTI-Cushing and WTI-Midland. We expect approximately 49 percent of the crude processed at our refineries in 2021 will be sweet crude.

(d)This is consumption-based exposure for our Refining & Marketing segment and does not include the sales exposure for our Midstream segment.

~~This is consumption-based exposure for our Refining & Marketing segment and does not include the sales exposure for our Midstream segment.~~

In addition to the market changes indicated by the crack spreads, the sour differential and the sweet differential, our Refining & Marketing margin is impacted by factors such as:

•the selling prices realized for refined products;

•the types of crude oil and other charge and blendstocks processed;

•our refinery yields;

•the cost of products purchased for resale; ~~and~~

•the impact of commodity derivative instruments used to hedge price ~~risk.~~risk;

•the potential impact of LCM adjustments to inventories in periods of declining prices; and

•the potential impact of LIFO liquidation charges due to draw-downs from historic inventory levels.

Refining & Marketing segment income from operations is also affected by changes in refinery operating costs and refining planned turnaround costs in addition to committed distribution costs. Changes in operating costs are primarily driven by the cost of energy used by our refineries, including purchased natural gas, and the level of maintenance costs. Refining planned

turnarounds, requiring temporary shutdown of certain refinery operating units, are periodically performed at each refinery.

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Distribution costs primarily include long-term agreements with MPLX, which as discussed below include minimum commitments to MPLX, and will negatively impact income from operations in periods when throughput or sales are lower or refineries are idled.

We have various long-term, fee-based commercial agreements with MPLX. Under these agreements, MPLX, which is reported in our Midstream segment, provides transportation, storage, distribution and marketing services to our Refining & Marketing segment. Certain of these agreements include commitments for minimum quarterly throughput and distribution volumes of crude oil and refined products and minimum storage volumes of crude oil, refined products and other products. Certain other agreements include commitments to pay for 100 percent of available capacity for certain marine transportation and refining logistics assets.

~~Retail~~

Retail segment profitability is impacted by fuel and merchandise margin. Fuel margin for gasoline and distillate is the price paid by consumers or direct dealers less the cost of refined products, including transportation, consumer excise taxes and bankcard processing fees (where applicable). Gasoline and distillate prices are volatile and are impacted by changes in supply and demand in the regions where we operate. Numerous factors impact gasoline and distillate demand throughout the year, including local competition, seasonal demand fluctuations, the available wholesale supply, the level of economic activity in our marketing areas and weather conditions.

The margin on merchandise sold at our convenience stores historically has been less volatile and has contributed substantially to our Retail segment margin. Our Retail convenience stores offer a wide variety of merchandise, including prepared foods, beverages and non-food items.

Midstream

Our Midstream segment transports, stores, distributes and markets crude oil and refined products, principally for our Refining & Marketing segment. The profitability of our pipeline transportation operations primarily depends on tariff rates and the volumes shipped through the pipelines. The profitability of our marine operations primarily depends on the quantity and availability of our vessels and barges. The profitability of our light product terminal operations primarily depends on the throughput volumes at these terminals. The profitability of our fuels distribution services primarily depends on the sales volumes of certain refined products. The profitability of our refining logistics operations depends on the quantity and availability of our refining logistics assets. A majority of the crude oil and refined product shipments on our pipelines and marine vessels and the refined product throughput at our terminals serve our Refining & Marketing segment and our refining logistics assets and fuels distribution services are used solely by our Refining & Marketing segment. As discussed above in the Refining & Marketing section, MPLX, which is reported in our Midstream segment, has various long-term, fee-based commercial agreements related to services provided to our Refining & Marketing segment. Under these agreements, MPLX has received various commitments of minimum throughput, storage and distribution volumes as well as commitments to pay for all available capacity of certain assets. The volume of crude oil that we transport is directly affected by the supply of, and refiner demand for, crude oil in the markets served directly by our crude oil pipelines, terminals and marine operations. Key factors in this supply and demand balance are the production levels of crude oil by producers in various regions or fields, the availability and cost of alternative modes of transportation, the volumes of crude oil processed at refineries and refinery and transportation system maintenance levels. The volume of refined products that we transport, store, distribute and market is directly affected by the production levels of, and user demand for, refined products in the markets served by our refined product pipelines and marine operations. In most of our markets, demand for gasoline and distillate peaks during the summer driving season, which extends from May through September of each year, and declines during the fall and winter months. As with crude oil, other transportation alternatives and system maintenance levels influence refined product movements.

Our Midstream segment also gathers and processes natural gas and NGLs. NGL and natural gas prices are volatile and are impacted by changes in fundamental supply and demand, as well as market uncertainty, availability of NGL transportation and fractionation capacity and a variety of additional factors that are beyond our control. Our Midstream segment profitability is affected by prevailing commodity prices primarily as a result of processing or conditioning at our own or third‑party processing plants, purchasing and selling or gathering and transporting volumes of natural gas at index‑related prices and the cost of third‑party transportation and fractionation services. To the extent that commodity prices influence the level of natural gas drilling by our producer customers, such prices also affect profitability.

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RESULTS OF OPERATIONS

The following discussion includes comments and analysis relating to our results of operations. This discussion should be read in conjunction with Item 1. Financial Statements and is intended to provide investors with a reasonable basis for assessing our historical operations, but should not serve as the only criteria for predicting our future performance.

Consolidated Results of Operations


	Three Months Ended March 31,
(In millions)	2021		2020		Variance
Revenues and other income:
Sales and other operating revenues(a)	$	22,711	$	22,204	$	507
Income (loss) from equity method investments	91		(1,233)		1,324
Net gain on disposal of assets	3		3		—
Other income	77		23		54
Total revenues and other income	22,882		20,997		1,885
Costs and expenses:
Cost of revenues (excludes items below)	21,084		20,342		742
LCM inventory valuation adjustment	—		3,185		(3,185)
Impairment expense	—		7,822		(7,822)
Depreciation and amortization	844		863		(19)
Selling, general and administrative expenses	575		742		(167)

Other taxes	162		198		(36)
Total costs and expenses	22,665		33,152		(10,487)
Income (loss) from continuing operations	217		(12,155)		12,372
Net interest and other financial costs	353		332		21
Loss from continuing operations before income taxes	(136)		(12,487)		12,351
Provision (benefit) for income taxes on continuing operations	34		(1,951)		1,985
Loss from continuing operations, net of tax	(170)		(10,536)		10,366
Income from discontinued operations, net of tax	234		318		(84)
Net income (loss)	64		(10,218)		10,282
Less net income (loss) attributable to:
Redeemable noncontrolling interest	20		20		—
Noncontrolling interests	286		(1,004)		1,290
Net loss attributable to MPC	$	(242)	$	(9,234)	$	8,992

Three Months Ended
March 31,
(In millions) 2020 2019 Variance
Revenues and other income:
Sales and other operating revenues $ 25,215
$ 28,253
$ (3,038 )
Income (loss) from equity method investments^(a)
(1,210 ) 99
(1,309 )
Net gain on disposal of assets 4
214
(210 )
Other income 71
35
36
Total revenues and other income 24,080
28,601
(4,521 )
Costs and expenses:
Cost of revenues (excludes items below) 22,821
25,960
(3,139 )
Inventory market valuation adjustment 3,220
—
3,220
Impairment expense 7,822
—
7,822
Depreciation and amortization 962
919
43
Selling, general and administrative expenses 821
867
(46 )
Other taxes 251
186
65
Total costs and expenses 35,897
27,932
7,965
Income (loss) from operations (11,817 ) 669
(12,486 )
Net interest and other financial costs 338
306
32
Income (loss) before income taxes (12,155 ) 363
(12,518 )
Provision (benefit) for income taxes (1,937 ) 104
(2,041 )
Net income (loss) (10,218 ) 259
(10,477 )
Less net income (loss) attributable to:
Redeemable noncontrolling interest 20
20
—
Noncontrolling interests (1,004 ) 246
(1,250 )
Net loss attributable to MPC $ (9,234 ) $ (7 ) $ (9,227 )


^(a)(a)In accordance with discontinued operations accounting, Speedway sales to retail customers and net results are reflected in Income from discontinued operations, net of tax and Refining & Marketing intercompany sales to Speedway are now presented as third party sales.	~~The 2020 period includes $1.32 billion of impairment expense. See Note 4 to the unaudited consolidated financial statements for further information.~~

First Quarter ~~2020~~2021 Compared to First Quarter ~~2019~~2020

Net loss attributable to MPC ~~increased $9.23~~decreased $8.99 billion in the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019 primarily~~2020 largely due to the absence of impairment expenses ~~for goodwill~~ and ~~long-lived assets~~an LCM inventory charge in the first three months of ~~$7.82 billion, an inventory market valuation adjustment of $3.22 billion and impairments of equity method investments of $1.32 billion during the period.~~2021.

Revenues and other income ~~decreased $4.52~~increased $1.89 billion primarily due to:

~~decreased~~•increased sales and other operating revenues of ~~$3.04 billion~~$507 million primarily due to ~~decreased~~increased Refining & Marketing segment ~~refined product sales volumes, which decreased 81 mbpd, and decreased~~ average refined product sales prices of ~~$0.22~~$0.24 per gallon, ~~largely due to reduced travel and business operations associated with the COVID-19 pandemic;~~partially offset by decreased refined product sales volumes of 521 mbpd;

~~decreased~~•increased income from equity method investments ~~of $1.31 billion largely~~mainly due to ~~impairments of equity method investments~~impairment expense of $1.32 billion recorded in the first quarter of 2020 primarily driven by the effects of COVID-19 and the decline in commodity ~~prices;~~price in the prior year; and

•increased other income of $54 million primarily due to higher income on RIN sales.

Costs and expenses decreased ~~net gain~~$10.49 billion primarily due to:

•increased cost of ~~$210~~revenues of $742 million mainly due to higher crude oil costs;

•the absence of ~~a $207 million gain recognized in 2019 in connection with MPC’s exchange of its undivided interest~~an LCM inventory valuation charge in the ~~Capline pipeline system for an equity ownership in Capline LLC.~~

~~Costs and expenses increased $7.97 billion primarily due to:~~

~~decreased cost~~first quarter of ~~revenues of $3.14 billion mainly due~~2021 compared to ~~lower refined product sales volumes, which decreased 81 mbpd primarily due to reduced travel and business operations associated with the COVID-19 pandemic;~~

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~~an inventory market valuation adjustment~~a charge of ~~$3.22~~$3.19 billion in the first quarter of 2020 primarily driven by the effects of COVID-19 and the decline in commodity ~~prices;~~price in the prior year;

•decreased impairment expense of $7.82 billion due to impairments recorded for goodwill and long-lived assets in the first quarter of ~~$7.33 billion and $492 million, respectively,~~2020 primarily driven by the effects of COVID-19 and the decline in commodity ~~prices; and~~

~~increased other taxes of $65 million primarily due to increased property and environmental taxes of approximately $34 million and $21 million, respectively. Property taxes increased~~prices in the ~~current period mainly due to the absence~~prior year; and

•decreased selling, general and administrative expenses of ~~property tax refunds received in the first quarter of 2019 and environmental taxes increased~~$167 million largely due to ~~the reinstatement of the Oil Spill Tax in~~cost reductions realized from our 2020 ~~after not being active in 2019.~~workforce reduction and other cost control efforts.

Benefit for income taxes was $1.94 billion at March 31, 2020 compared to provision for income taxes of $104 million at March 31, 2019, primarily due to decreased income before income taxes of $12.52 billion. TheWe recorded a combined federal, state and foreign income tax ~~rate was~~provision of $34 million for the three months ended March 31, 2021 primarily due to certain permanent tax differences related to income attributable to noncontrolling interests, state taxes and unrecognized tax benefits. We recorded a combined federal, state and foreign income tax benefit of ~~16 percent~~$1.95 billion for the three months ended March 31, 2020. ~~The~~Our effective tax benefit rate for the three months ended March 31, 2020 was ~~less~~lower than the U.S. statutory rate ~~of 21 percent~~ primarily due to a significant amount of our pre-tax loss consisting of non-tax deductible goodwill impairment ~~charges, partially offset by a favorable rate effect of the CARES Act legislation.~~charges. Additionally, our effective tax rate is generally benefited by our noncontrolling interest in MPLX, but this benefit was lower for the three months ended March 31, 2020 ~~compared~~due to impairment charges recorded by MPLX.

Noncontrolling interests increased $1.29 billion primarily due to an increase in MPLX’s net income largely due to impairment expense recognized during the three months ended March 31, ~~2019 due to impairment charges recorded by MPLX.~~ 2020.

Results of Discontinued Operations

The ~~combined federal, state~~results of the Speedway business are presented as discontinued operations in our consolidated financial statements.

The following includes key financial and ~~foreign income tax rate was 29 percent~~operating data for Speedway for the ~~three months ended March 31, 2019.~~ first quarter of 2021 compared to the first quarter of 2020.


	Three Months Ended March 31,
Key Financial and Operating Data	2021			2020
Speedway fuel sales (millions of gallons)	1,436			1,636
Speedway fuel margin (dollars per gallon)(a)(b)	$	0.2567		$	0.3540
Merchandise sales (in millions)	$	1,512		$	1,461
Merchandise margin (in millions)(b)(c)	$	442		$	414
Merchandise margin percent	29.3		%	28.3		%
Same store gasoline sales volume (period over period)(d)	(12.3)		%	(8.3)		%
Same store merchandise sales (period over period)(d)(e)	7.0		%	0.7		%
Convenience stores at period-end	3,833			3,881

(a)The ~~effective~~price paid by consumers less the cost of refined products, excluding transportation, consumer excise taxes and bankcard processing fees (where applicable), divided by gasoline and distillate sales volume. Excludes inventory valuation adjustments.

(b)See “Non-GAAP Measures” section for reconciliation and further information regarding this non-GAAP measure.

(c)The price paid by consumers less the cost of merchandise.

(d)Same store comparison includes only locations owned at least 13 months.

(e)Excludes cigarettes.

First Quarter 2021 Compared to First Quarter 2020

Income from discontinued operations, net of tax, ~~rate for the three months ended March 31, 2019 was greater than the U.S. statutory rate of 21 percent~~decreased $84 million. Quarterly results reflected lower fuel margins and fuel volumes partially offset by higher merchandise sales and margins and lower operating expenses. Changes in fuel sales volumes were primarily due to ~~$36~~the outbreak of COVID-19 and its development into a pandemic in March 2020, which resulted in restricted travel, social distancing and reduced business operations. Discontinued operations for the first quarter of 2021 include $23 million of ~~state deferred tax expense recorded as an out of period adjustment partially offset by permanent tax differences~~costs related to ~~net income attributable~~the Speedway separation and for the first quarter of 2020 includes a $35 million LCM inventory charge and $27 million of costs related to ~~noncontrolling interests.~~the Speedway separation.

~~Non-controlling interests~~Beginning August 2, 2020, in accordance with ASC 360, Property, Plant, and Equipment, we ceased recording depreciation and amortization for the Speedway business’ property, plant and equipment, finite-lived intangible assets and right of use lease

assets. As a result, Speedway depreciation and amortization was $2 million and $99 million, for first quarter of 2021 and 2020, respectively.

The Speedway fuel margin decreased ~~$1.25 billion due~~ to ~~MPLX’s net loss primarily resulting~~25.67 cents per gallon in the first quarter of 2021, from ~~impairment expense recognized during~~35.40 cents per gallon in the ~~quarter.~~first quarter of 2020.

See Note 3 to the unaudited consolidated financial statements for additional information on discontinued operations.

Segment Results

Refining & Marketing

The following includes key financial and operating data for the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019.~~2020.

~~Table of Contents~~


^(a)			~~Includes intersegment sales and sales destined for export.~~

Three Months Ended
March 31,
2020 2019
Refining & Marketing Operating Statistics
Net refinery throughput (mbpd)
2,994
3,084
Refining & Marketing margin per barrel^(a)(b)
$ 11.30
$ 11.17
Less:
Refining operating costs per barrel^(c)
6.00
5.58
Distribution costs per barrel^(d)
4.73
4.65
Refining planned turnaround costs per barrel 1.21
0.68
Depreciation and amortization per barrel 1.64
1.54
Plus:
Other per barrel^(e)
—
0.07
Refining & Marketing segment loss per barrel $ (2.28 ) $ (1.21 )


^(a)			~~Sales revenue less cost of refinery inputs and purchased products, divided by net refinery throughput.~~

(a)Includes intersegment sales to Midstream and sales destined for export.


^(b)			~~See “Non-GAAP Measures” section for reconciliation and further information regarding this non-GAAP measure.~~


^(c)	~~Includes refining operating costs and major maintenance costs. Excludes planned turnaround and depreciation and amortization expense.~~


^(d)	Includes fees paid to MPLX. On a per barrel throughput basis, these fees were $3.15 and $2.83 for the three months ended March 31, 2020 and 2019, respectively. Excludes depreciation and amortization expense.


^(e)	~~Includes income from equity method investments, net gain on disposal of assets and other income.~~

~~Table~~


	Three Months Ended March 31,
	2021		2020
Refining & Marketing Operating Statistics
Net refinery throughput (mbpd)	2,565		2,994


Refining & Marketing margin per barrel(a)(b)	10.16		11.86
Less:
Refining operating costs per barrel, excluding winter storm effect(c)	5.16		6.00
Winter storm effect on refining operating cost(d)	0.13		—
Distribution costs per barrel	5.18		4.74
Refining planned turnaround costs per barrel	0.48		1.21
Depreciation and amortization per barrel	2.07		1.74
Plus:

Other per barrel(e)	0.27		0.01
Refining & Marketing segment income (loss) per barrel	$	(2.59)	$	(1.82)
Fees paid to MPLX included in distribution costs above	$	3.66	$	3.15

(a)Sales revenue less cost of ~~Contents~~refinery inputs and purchased products, divided by net refinery throughput.

(b)See “Non-GAAP Measures” section for reconciliation and further information regarding this non-GAAP measure.

(c)Includes refining operating costs and major maintenance costs. Excludes planned turnaround and depreciation and amortization expense.

(d)Winter storms in the first quarter of 2021 resulted in higher costs, including maintenance and repairs.

(e)Includes income (loss) from equity method investments, net gain (loss) on disposal of assets and other income.

The following table presents certain benchmark prices in our marketing areas and market indicators that we believe are helpful in understanding the results of our Refining & Marketing segment. The benchmark crack spreads below do not reflect the market cost of RINs necessary to meet EPA renewable volume obligations for attributable products under the Renewable Fuel Standard.


	Three Months Ended March 31,
Benchmark Spot Prices (dollars per gallon)	2021		2020
Chicago CBOB unleaded regular gasoline	$	1.65	$	1.21
Chicago ULSD	1.74		1.43
USGC CBOB unleaded regular gasoline	1.70		1.25
USGC ULSD	1.70		1.47
LA CARBOB	1.85		1.54
LA CARB diesel	1.78		1.63

Market Indicators (dollars per barrel)
WTI	$	58.14	$	45.78
MEH	59.51		—

LLS	—		47.65
ANS	61.07		51.03
Crack Spreads:
Mid-Continent WTI 3-2-1	$	7.83	$	7.39
USGC MEH 3-2-1	6.66		—
USGC LLS 3-2-1	—		6.48
West Coast ANS 3-2-1	10.63		12.68
Blended 3-2-1(a)	7.92		8.31
Crude Oil Differentials:
Sweet	$	(1.02)	$	(0.70)
Sour	(3.12)		(4.90)

Three Months Ended
March 31,
Benchmark Spot Prices (dollars per gallon)
2020 2019
Chicago CBOB unleaded regular gasoline $ 1.21
$ 1.51
Chicago ULSD 1.43
1.84
USGC CBOB unleaded regular gasoline 1.25
1.52
USGC ULSD 1.47
1.88
LA CARBOB 1.54
1.82
LA CARB diesel 1.63
1.92

Market Indicators (dollars per barrel)

LLS $ 47.65
$ 62.34
WTI 45.78
54.90
ANS 51.03
64.48
Crack Spreads:
Mid-Continent WTI 3-2-1 $ 7.39
$ 11.70
USGC LLS 3-2-1 6.48
5.23
West Coast ANS 3-2-1 12.68
11.91
Blended 3-2-1^(a)
8.31
9.29
Crude Oil Differentials:
Sweet $ (0.70 ) $ (3.30 )
Sour (4.90 ) (3.13 )
(a) Blended 3-2-1 Mid-Continent/USGC/West Coast crack spread is 40/40/20 percent in 2021. Blended 3-2-1 Mid-Continent/USGC/West Coast crack spread is 38/38/24 percent in 2020. These blends are based on our refining capacity by region in each period. Beginning in the first quarter of 2021, the prompt price for USGC was transitioned from LLS to MEH.


^(a)	~~Blended 3-2-1 Mid-Continent/USGC/West Coast crack spread is 38/38/24 percent in 2020 and 2019. These blends are based on our refining capacity by region in each period.~~

First Quarter ~~2020~~2021 Compared to First Quarter ~~2019~~2020

Refining & Marketing segment revenues ~~decreased $3.19 billion~~increased $380 million primarily due to increased average refined product sales prices of $0.24 per gallon, partially offset by lower refined product sales volumes, which decreased 81 mbpd, and decreased average refined product sales prices of $0.22 per gallon. These decreases were primarily the result of reduced travel and business operations associated with the COVID-19 pandemic.521 mbpd.

~~Refinery crude oil capacity utilization was 91 percent and net~~Net refinery throughputs decreased 90429 mbpd during the first quarter of ~~2020.~~2021, primarily due to reducing throughputs and indefinitely idling certain facilities during the COVID-19 pandemic.

Refining & Marketing segment ~~loss~~income from operations ~~increased $288~~decreased $101 million primarily due to lower blended crack spreads, partially offset by reduced refining operating, distribution, and ~~higher~~refining planned turnaround ~~expenses.~~costs.

Refining & Marketing margin was ~~$11.30~~$10.16 per barrel for the first quarter of ~~2020~~2021 compared to ~~$11.17~~$11.86 per barrel for the first quarter of ~~2019.~~2020. Refining & Marketing margin is affected by our performance against the market indicators shown earlier, which use spot market values and an estimated mix of crude purchases and product sales. Based on the market indicators and our crude oil throughput, we estimate a net negative impact of approximately ~~$490~~$700 million on Refining & Marketing margin for the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019,~~2020, primarily due to lower ~~WTI~~volumes and crack spreads and narrower ~~sweet crude oil differentials, partially offset by wider~~ sour crude oil differentials. Our reported Refining & Marketing margin differs from market indicators due to the mix of crudes purchased and their costs, the effect of market structure on our crude oil acquisition prices, the effect of RIN prices on the crack spread, and other items like refinery yields, ~~and~~ other feedstock ~~variances.~~variances and fuel margin from sales to direct dealers. These factors had an estimated net ~~positive~~negative effect of approximately ~~$470~~$200 million on Refining & Marketing segment income in the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019.~~2020.

~~Refining~~

For the three months ended March 31, 2021, refining operating costs, excluding depreciation and amortization ~~increased $0.42~~and the winter storm effect, decreased $448 million, or $0.84 per barrel, ~~primarily due~~compared to ~~higher engineered projects, maintenance~~the three months ended March 31, 2020 as we took actions to reduce costs in response to the economic effects of COVID-19, including operating at lower throughput at our refineries and ~~taxes, partially offset by lower energy costs. While,~~idling portions of our refining capacity.

Distribution costs, excluding depreciation and amortization, decreased $94 million and include fees paid to MPLX of $846 million and $858 million for the first quarter of 2021 and 2020, respectively. On a per barrel basis, distribution costs, excluding depreciation and amortization, ~~were flat as compared to first quarter of 2019, the lower throughput resulted in an $0.08~~

~~Table of Contents~~

~~increase in these costs on a~~increased $0.44 per barrel ~~basis. Distribution~~as decreased costs ~~excluding depreciation and amortization, include fees paid to MPLX of $858 million and $786 million for the first quarter of 2020 and 2019, respectively.~~ were offset by lower throughput.

Refining planned turnaround costs ~~increased $0.53~~decreased $217 million, or $0.73 per barrel, due to the timing of turnaround activity.

Depreciation and amortization increased $0.33 per barrel primarily due to lower throughput and increased ~~by $0.10 per barrel.~~costs.

Supplemental Refining & Marketing Statistics


	Three Months Ended March 31,
	2021	2020
Refining & Marketing Operating Statistics
Crude oil capacity utilization percent(a)	83	91
Refinery throughputs (mbpd):
Crude oil refined	2,381	2,784
Other charge and blendstocks	184	210
Net refinery throughput	2,565	2,994
Sour crude oil throughput percent	48	49
Sweet crude oil throughput percent	52	51
Refined product yields (mbpd):
Gasoline	1,324	1,488
Distillates	881	1,020
Propane	45	58
Feedstocks and petrochemicals	222	352
Heavy fuel oil	36	37
Asphalt	97	80
Total	2,605	3,035
Refined product export sales volumes (mbpd)(b)	243	383

(a)Based on calendar-day capacity, which is an annual average that includes down time for planned maintenance and other normal operating activities.

(b)Represents fully loaded export cargoes for each time period. These sales volumes are included in the total sales volume amounts.

Three Months Ended
March 31,
2020 2019
Refining & Marketing Operating Statistics
Refined product export sales volumes (mbpd)^(a)
383
430
Crude oil capacity utilization percent^(b)
91
95
Refinery throughputs (mbpd):^(c)

Crude oil refined 2,784
2,869
Other charge and blendstocks 210
215
Net refinery throughput 2,994
3,084
Sour crude oil throughput percent 49
52
Sweet crude oil throughput percent 51
48
Refined product yields (mbpd):^(c)

Gasoline 1,488
1,533
Distillates 1,020
1,091
Propane 58
53
Feedstocks and petrochemicals 352
330
Heavy fuel oil 37
45
Asphalt 80
80
Total 3,035
3,132


^(a)	~~Represents fully loaded export cargoes for each time period. These sales volumes are included in the total sales volume amounts.~~


^(b)	~~Based on calendar-day capacity, which is an annual average that includes down time for planned maintenance and other normal operating activities.~~


^(c)	~~Excludes inter-refinery volumes which totaled 78 mbpd and 76 mbpd for the three months ended March 31, 2020 and 2019, respectively.~~

~~Retail~~

~~The following includes key financial and operating data for the first quarter of 2020 compared to the first quarter of 2019.~~

~~Table of Contents~~


^(a)	The price paid by consumers or direct dealers less the cost of refined products, including transportation, consumer excise taxes and bankcard processing fees (where applicable), divided by gasoline and distillate sales volume. Excludes LCM inventory valuation adjustments.


^(b)	~~See “Non-GAAP Measures” section for reconciliation and further information regarding this non-GAAP measure.~~

Three Months Ended
March 31,
Key Financial and Operating Data 2020 2019
Average fuel sales prices (dollars per gallon)
$ 2.41
$ 2.58
Merchandise sales (in millions)
$ 1,461
$ 1,413
Merchandise margin (in millions)^(a)(b)
$ 414
$ 407
Same store gasoline sales volume (period over period)^(c)
(8.3 )% (3.2 )%
Same store merchandise sales (period over period)^(c)(d)
0.7 % 5.4 %
Convenience stores at period-end 3,881
3,918
Direct dealer locations at period-end 1,070
1,062


^(a)	~~The price paid by the consumers less the cost of merchandise.~~


^(b)	~~See “Non-GAAP Measures” section for reconciliation and further information regarding this non-GAAP measure.~~


^(c)	~~Same store comparison includes only locations owned at least 13 months.~~


^(d)	~~Excludes cigarettes.~~

~~First Quarter 2020 Compared to First Quarter 2019~~

Retail segment revenues decreased $607 million primarily due to decreased fuel sales partially offset by increased merchandise sales. Total fuel sales volumes decreased 280 million gallons and average fuel sales prices decreased $0.17 per gallon. Merchandise sales increased $48 million. These changes were primarily due to the effects of the COVID-19 pandemic which resulted in reduced fuel sales from restricted travel, social distancing and reduced business operations and increased merchandise sales primarily of cigarettes, beer and wine, and other merchandise. In addition, fuel sales volumes decreased as a result of an agreement between Speedway and Pilot Travel Centers LLC (“PTC”), effective October 1, 2019, in which PTC supplies, prices and sells diesel fuel at certain Speedway and PTC locations with both companies sharing in the diesel fuel margins.

Retail segment income from operations increased $349 million largely driven by higher fuel margins partially offset by an increase in operating expenses. Retail fuel margin increased to 32.91 cents per gallon in the first quarter of 2020, from 17.15 cents per gallon in the first quarter of 2019.

~~Table of Contents~~

Midstream

The following includes key financial and operating data for the first quarter of ~~2020~~2021 compared to the first quarter of ~~2019.~~2020.

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^(a)			~~On owned common-carrier pipelines, excluding equity method investments.~~


^(b)			~~Includes amounts related to unconsolidated equity method investments on a 100 percent basis.~~

~~Table of Contents~~(a)On owned common-carrier pipelines, excluding equity method investments.

(b)Includes amounts related to unconsolidated equity method investments on a 100 percent basis.

Three Months Ended
March 31,
Benchmark Prices 2020 2019
Natural Gas NYMEX HH ($ per MMBtu)
$ 1.87
$ 2.87
C2 + NGL Pricing ($ per gallon)^(a)
$ 0.40
$ 0.62


^(a)			C2 + NGL pricing based on Mont Belvieu prices assuming an NGL barrel of approximately 35 percent ethane, 35 percent propane, 6 percent iso-butane, 12 percent normal butane and 12 percent natural gasoline.


	Three Months Ended March 31,
Benchmark Prices	2021		2020
Natural Gas NYMEX HH ($ per MMBtu)	$	2.72	$	1.87
C2 + NGL Pricing ($ per gallon)(a)	$	0.73	$	0.40

(a)C2 + NGL pricing based on Mont Belvieu prices assuming an NGL barrel of approximately 35 percent ethane, 35 percent propane, 6 percent iso-butane, 12 percent normal butane and 12 percent natural gasoline.

First Quarter ~~2020~~2021 Compared to First Quarter ~~2019~~2020

Midstream segment revenue ~~decreased $29 million primarily due to lower natural gas~~ and ~~NGL prices during the quarter.~~

~~Midstream~~ segment income from operations ~~was consistent with~~increased $88 million and $67 million, respectively. Results for the ~~first~~ quarter benefited from lower operating expenses and higher natural gas prices, partially offset by lower gathered and processed volumes.

Corporate


Key Financial Information (in millions)	Three Months Ended March 31,
	2021		2020
Corporate(a)	$	(157)	$	(233)

(a)Corporate costs consist primarily of ~~2019 as strong performance across MPLX’s base business was driven by stable, fee-based earnings primarily~~MPC’s corporate administrative expenses and costs related to certain non-operating assets, except for corporate overhead expenses attributable to MPLX, which are included in the Midstream segment.

First Quarter 2021 Compared to First Quarter 2020

Corporate costs decreased $76 million largely due to cost reductions realized from ~~pipeline volume commitments as well as contributions from organic growth projects.~~

our 2020 workforce reduction and other cost control efforts.

Items not Allocated to Segments


Key Financial Information (in millions)	Three Months Ended March 31,
	2021	2020
Items not allocated to segments:
Transaction-related costs(a)	—	(8)

Impairments	—	(9,137)

LCM inventory valuation adjustment	—	(3,185)

Key Financial Information (in millions)
Three Months Ended
March 31,
2020 2019
Items not allocated to segments:
Corporate and other unallocated items^(a)
$ (227 ) $ (191 )
Capline restructuring gain —
207
Transaction-related costs (35 ) (91 )
Impairments (9,137 ) —
Inventory market valuation adjustment (3,220 ) —


^(a)(a)2020 includes costs incurred in connection with the Midstream strategic review. Costs incurred in 2020 in connection with the Speedway separation are included in discontinued operations. See Note 3 to the unaudited consolidated financial statements for additional information on discontinued operations.	Corporate and other unallocated items consist primarily of MPC’s corporate administrative expenses and costs related to certain non-operating assets, except for corporate overhead expenses attributable to MPLX, which are included in the Midstream segment. Corporate overhead expenses are not allocated to the Refining & Marketing and Retail segments.

First Quarter ~~2020~~2021 Compared to First Quarter ~~2019~~

~~Corporate and other unallocated items increased $36 million primarily due to an information systems integration project and incremental legal expenses.~~2020

During the first quarter of 2020, we recorded impairment charges of approximately $9.14 billion, which includes $7.82 billion related to goodwill and long-lived assets and impairments of equity method investments of $1.32 billion, and an inventory market valuation adjustment charge of ~~$3.22~~$3.19 billion primarily driven by the effects of COVID-19 and the decline in commodity prices.

Other unallocated items include transaction-related costs of $35 million for the first quarter of 2020 associated with the Speedway separation, Midstream strategic review and other related activities and $91 million for the first quarter of 2019 largely related to the recognition of an obligation for vacation benefits provided to former Andeavor employees as part of the Andeavor acquisition. In the first quarter of 2019, other unallocated items include a $207 million gain resulting from the agreements executed with Capline LLC to contribute our 33 percent undivided interest in the Capline pipeline system in exchange for a 33 percent ownership interest in Capline LLC.

Non-GAAP Financial Measures

Management uses certain financial measures to evaluate our operating performance that are calculated and presented on the basis of methodologies other than in accordance with GAAP. We believe these non-GAAP financial measures are useful to investors and analysts to assess our ongoing financial performance because, when reconciled to their most comparable GAAP financial measures, they provide improved comparability between periods through the exclusion of certain items that we believe are not indicative of our core operating performance and that may obscure our underlying business results and trends. These measures should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP, and our calculations thereof may not be comparable to similarly titled measures reported by other companies. The non-GAAP financial measures we use are as follows:

~~Table of Contents~~

Refining & Marketing Margin

Refining margin is defined as sales revenue less the cost of refinery inputs and purchased ~~products.~~products and excludes other items as reflected in the table below.

Reconciliation of Refining & Marketing income from operations to Refining & Marketing gross margin and Refining & Marketing margin


	Three Months Ended March 31,
(in millions)	2021		2020
Refining & Marketing income from operations(a)	$	(598)	$	(497)
Plus (Less):
Selling, general and administrative expenses	456		556
LCM inventory valuation adjustment	—		(3,185)
(Income) loss from equity method investments	(5)		3
Net gain on disposal of assets	(3)		—
Other income	(54)		(4)
Refining & Marketing gross margin	(204)		(3,127)
Plus (Less):
Operating expenses (excluding depreciation and amortization)	2,275		2,833
LCM inventory valuation adjustment	—		3,185
Depreciation and amortization	478		473
Gross margin excluded from Refining & Marketing margin(b)	(179)		(109)
Other taxes included in Refining & Marketing margin	(24)		(24)
Refining & Marketing margin(a)	2,346		3,231

(a)LCM inventory valuation adjustments are excluded from Refining & Marketing income from operations and Refining & Marketing margin.

(b)The gross margin, excluding depreciation and amortization, of other related operations included in the Refining & Marketing segment and processing of credit card transactions on behalf of certain of our marketing customers.

Three Months Ended
March 31,
Reconciliation of Refining & Marketing income from operations to Refining & Marketing margin (in millions)
2020 2019
Refining & Marketing income from operations $ (622 ) $ (334 )
Plus (Less):
Refining operating costs^(a)
1,636
1,552
Refining depreciation and amortization 401
387
Refining planned turnaround costs 329
186
Distribution costs^(b)
1,290
1,290
Distribution depreciation and amortization 46
40
(Income) loss from equity method investments 3
(1 )
Net gain on disposal of assets —
(6 )
Other income (4 ) (14 )
Refining & Marketing margin $ 3,079
$ 3,100


^(a)	~~Includes refining major maintenance and operating costs. Excludes planned turnaround and depreciation and amortization expense.~~


^(b)	~~Includes fees paid to MPLX of $858 million and $786 million for the first quarter of 2020 and 2019, respectively. Excludes depreciation and amortization expense.~~

~~Retail~~Speedway Fuel Margin

~~Retail~~Speedway fuel margin is defined as the price paid by consumers ~~or direct dealers~~ less the cost of refined products, including transportation, consumer excise taxes and bankcard processing fees (where applicable).

~~Retail~~Speedway Merchandise Margin

~~Retail~~Speedway merchandise margin is defined as the price paid by consumers less the cost of merchandise.

Reconciliation of income from discontinued operations to Speedway gross margin and Speedway margin


									Three Months Ended March 31,
		Three Months Ended March 31,
Reconciliation of Retail income from operations to Retail total margin (in millions)		2020			2019
Retail income from operations		$	519		$	170
(in millions)								(in millions)	2021		2020
Income from discontinued operations(a)								Income from discontinued operations(a)	$	307	$	338
Plus (Less):	Plus (Less):							Plus (Less):
Operating, selling, general and administrative expenses	Operating, selling, general and administrative expenses	598			583			Operating, selling, general and administrative expenses	570		606
Depreciation and amortization		125			126
Income from equity method investments	Income from equity method investments	(22		)	(17		)	Income from equity method investments	(19)		(22)
Net gain on disposal of assets	Net gain on disposal of assets	(1		)	(2		)	Net gain on disposal of assets	—		(1)
Other income	Other income	(49		)	(2		)	Other income	(38)		(49)
Retail total margin		$	1,170		$	858
Speedway gross margin								Speedway gross margin	820		872
Plus:								Plus:
LCM inventory valuation adjustment								LCM inventory valuation adjustment	—		35
Depreciation and amortization								Depreciation and amortization	2		99
Speedway margin(a)								Speedway margin(a)	$	822	$	1,006

Retail total margin:
Speedway margin:								Speedway margin:
Fuel margin	Fuel margin	$	731		$	429		Fuel margin	$	369	$	579
Merchandise margin	Merchandise margin	414			407			Merchandise margin	442		414
Other margin	Other margin	25			22			Other margin	11		13
Retail total margin		$	1,170		$	858
Speedway margin								Speedway margin	$	822	$	1,006

(a)LCM inventory valuation adjustments are excluded from Speedway margin.

~~Table of Contents~~

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

Our consolidated cash and cash equivalents balance for continuing operations was approximately ~~$1.69 billion~~$624 million at March 31, ~~2020~~2021 compared to ~~$1.53 billion~~$415 million at December 31, ~~2019.~~2020. Cash and cash equivalents for discontinued operations was $134 million at March 31, 2021 compared to $140 million at December 31, 2020. Net cash provided by (used in) operating activities, investing activities and financing activities are presented in the following table.


		Three Months Ended March 31,							Three Months Ended March 31,
(In millions)		2020			2019			(In millions)	2021		2020
Net cash provided by (used in):	Net cash provided by (used in):							Net cash provided by (used in):
Operating activities	Operating activities	$	(768	)	$	1,623		Operating activities	$	454	$	(768)
Investing activities	Investing activities	(1,088		)	(1,520		)	Investing activities	(267)		(1,088)
Financing activities	Financing activities	2,021			(920		)	Financing activities	16		2,021
Total increase (decrease) in cash	Total increase (decrease) in cash	$	165		$	(817	)	Total increase (decrease) in cash	$	203	$	165

Net cash provided by operating activities ~~decreased $2.39~~increased $1.22 billion in the first three months of ~~2020~~2021 compared to the first three months of ~~2019,~~2020, primarily due to ~~an unfavorable~~a favorable change in working capital of ~~$2.52~~$1.62 billion ~~mainly due to~~when comparing the change in working capital in both periods. These changes were partially offset by a decrease in ~~accounts payable.~~cash provided by discontinued operations of $259 million which reflect the results of the Speedway business. Changes in working capital exclude changes in short-term debt.

Changes in working capital, excluding changes in short-term debt, were a net ~~$2.03~~$348 million use of cash in the first three months of 2021 compared to a net $1.97 billion use of cash in the first three months of ~~2020 compared to a net $489 million source of cash in~~2020.

For the first three months of ~~2019.~~2021, changes in working capital were a net $348 million use of cash primarily due to the effects of increasing energy commodity prices at the end of the period on working capital. Accounts payable increased primarily due to increases in crude prices and volumes. Current receivables increased primarily due to higher crude and refined product prices. Inventories increased primarily due to increases in refined products and crude inventories.

For the first three months of 2020, changes in working capital, excluding the LCM reserve and changes in short-term debt, were a net ~~$2.03~~$1.97 billion use of cash primarily due to the effects of decreasing energy commodity prices at the end of the period on working capital. Accounts payable decreased primarily due to a decrease in crude prices. Current receivables decreased primarily due to lower crude and refined product prices partially offset by an increase in crude volumes. Excluding the LCM reserve,inventories increased due to increases in crude and refined product inventories.

For the first three months of 2019, changes in working capital, excluding changes in short-term debt, were a net $489 million source of cash primarily due to the effects of increases in energy commodity prices at the end of the period on working capital. Accounts payable increased primarily due to an increase in crude prices. Current receivables increased primarily due to higher refined product and crude prices and higher crude sales volumes. Inventories decreased due to decreases in refined product and merchandise inventories, partially offset by increases in crude and materials and supplies inventories.

Net cash used in investing activities decreased ~~$432~~$821 million in the first three months of ~~2020~~2021 compared to the first three months of ~~2019,~~2020, primarily due to ~~the following:~~

a decrease in additions to property, plant and equipment of ~~$179~~$647 million primarily due to decreased capital expenditures in the first three months of ~~2020~~2021 in our Midstream and Refining & Marketing ~~segments; and~~segments.

a decrease in net investments of $231 million largely due to investments in the first quarter of 2019 connection with the construction of the Gray Oak Pipeline, which began initial start-up in the fourth quarter of 2019.

The consolidated statements of cash flows exclude changes to the consolidated balance sheets that did not affect cash. A reconciliation of additions to property, plant and equipment per the consolidated statements of cash flows to reported total capital expenditures and investments follows.

Three Months Ended
March 31,
(In millions) 2020 2019
Additions to property, plant and equipment per the consolidated statements of cash flows $ 1,062
$ 1,241
Decrease in capital accruals (166 ) (235 )
Total capital expenditures 896
1,006
Investments in equity method investees (excludes acquisitions) 169
325
Total capital expenditures and investments $ 1,065
$ 1,331

~~Table of Contents~~


	Three Months Ended March 31,
(In millions)	2021		2020
Additions to property, plant and equipment per the consolidated statements of cash flows	$	304	$	951


Decrease in capital accruals	(48)		(120)
Total capital expenditures	256		831
Investments in equity method investees (excludes acquisitions)	51		169
Total capital expenditures and investments	$	307	$	1,000

Financing activities were a net $16 million source of cash in the first three months of 2021 compared to a net $2.02 billion source of cash in the first three months of ~~2020 compared to~~2020.

•MPC had net borrowings of $693 million under its commercial paper program in the first three months of 2021.

•Long-term debt borrowings and repayments were a net ~~$920~~$172 million ~~use~~source of cash in the first three months of ~~2019.~~

~~Long-term debt borrowings and repayments were~~2021 compared to a net $2.73 billion source of cash in the first three months of ~~2020 compared to a net $573 million source of cash in~~2020. During the first three months of ~~2019.~~2021, MPC repaid $1.0 billion of senior notes, had net borrowings of $1.3 billion under its revolving credit facility and borrowed and repaid $2.55 billion under its trade receivables facility. MPLX redeemed $750 million of senior notes and had net borrowings of $835 million under its revolving credit facility. During the first three months of 2020, MPC had borrowings of $2.0 billion under its revolving credit facility, borrowed and repaid $925 million under its trade receivables facility and MPLX had net borrowings of $750 million under its revolving credit facility. ~~During the first three months~~

•Repurchases of ~~2019, MPLX had net borrowings of $425~~noncontrolling interests were $155 million ~~under its revolving credit facility and ANDX had net borrowings of $159 million under its revolving credit facility. MPLX completed its acquisition of ANDX on July 30, 2019.~~

~~Cash used in common stock repurchases decreased $885 million in the first three months of 2020 compared~~related to the ~~first three months~~repurchase of ~~2019. There were no share repurchases in the first three months of 2020 compared to $885 million in the first three months of 2019.~~MPLX common units. See Note 84 to the unaudited consolidated financial statements for further discussion of ~~share repurchases.~~MPLX.

Cash used in dividend payments increased $23 million in the first three months of 2020 compared to the first three months of 2019, primarily due to a $0.05 per share increase in our base dividend, partially offset by a reduction of shares resulting from share repurchases in 2019. Our dividend payments were $0.58 per common share in the first three months of 2020 compared to $0.53 per common share in the first three months of 2019.


•	~~Contributions from noncontrolling interests decreased~~ ~~$95 million~~ ~~in the first three months of 2020 compared to the first three months of 2019 primarily due to cash received in 2019 for an increased noncontrolling interest in an MPLX subsidiary.~~

Derivative Instruments

See Item 3. Quantitative and Qualitative Disclosures about Market Risk for a discussion of derivative instruments and associated market risk.

Capital Resources

MPC, Excluding MPLX

We control MPLX through our ownership of the general partner, however, the creditors of MPLX do not have recourse to MPC’s general credit through guarantees or other financial arrangements. The assets of MPLX can only be used to settle its own obligations and its creditors have no recourse to our assets. Therefore, in the following table, we present the liquidity of MPC, excluding MPLX. MPLX liquidity is discussed in the following section.

Our liquidity, excluding MPLX, totaled ~~$6.38~~$4.47 billion at March 31, ~~2020~~2021 consisting of:


	March 31, 2021
(In millions)	Total Capacity		Outstanding Borrowings		Available Capacity
Bank revolving credit facility(a)	$	5,000	$	1,301	$	3,699
364-day bank revolving credit facility	1,000		—		1,000
Trade receivables facility(b)	750		—		750
Commercial paper borrowings(c)	—		$	—	(1,717)
Total	$	6,750	$	1,301	$	3,732
Cash and cash equivalents(d)					734
Total liquidity					$	4,466

March 31, 2020
(In millions) Total Capacity Outstanding Borrowings
Available
Capacity
Bank revolving credit facility^(a)(b)
$ 5,000
$ 2,001
$ 2,999
364-day bank revolving credit facility 1,000
—
$ 1,000
Trade receivables facility^(c)
750
—
750
Total $ 6,750
$ 2,001
$ 4,749
Cash and cash equivalents^(d)
1,633
Total liquidity $ 6,382
(a)Outstanding borrowings include $1 million in letters of credit outstanding under this facility.

^(a)

(b)Availability under our $750 million trade receivables facility is a function of eligible trade receivables, which will be lower in a sustained lower price environment for refined products.

(c)We do not intend to have outstanding commercial paper borrowings in excess of available capacity under bank revolving credit facilities.

(d)Includes cash and cash equivalents classified as assets held for sale of $134 million (see Note 3 to the unaudited consolidated financial statements) and excludes cash and cash equivalents of MPLX of $24 million.

~~Excludes MPLX’s $3.50 billion bank revolving credit facility, which had approximately $2.75 billion available as of March 31, 2020.~~


^(b)	~~Outstanding borrowings include $1 million in letters of credit outstanding under this facility.~~


^(c)	Availability under our $750 million trade receivables facility is a function of eligible trade receivables, which will be lower in a sustained lower price environment for refined products. As of April 30, 2020 eligible trade receivables supported borrowings of approximately $517 million.


^(d)	~~Excludes MPLX cash and cash equivalents of $57 million.~~

Because of the alternatives available to us, including internally generated cash flow and access to capital markets and a commercial paper program, we believe that our short-term and long-term liquidity is adequate to fund not only our current operations, but also our near-term and long-term funding requirements, including capital spending programs, ~~the repurchase of shares of our common stock,~~ dividend payments, defined benefit plan contributions, repayment of debt maturities and other amounts that may ultimately be paid in connection with contingencies. We did not repurchase shares during the three months ended March 31, 2021. The timing and amount of future repurchases will depend upon several factors, including market and business conditions, and such repurchases may be initiated, suspended or discontinued at any time.

~~Table~~Additionally, we have recorded an income tax receivable within other current assets in our balance sheet of ~~Contents~~

approximately $2.1 billion which is expected to be received during the second half of 2021.

We have a commercial paper program that allows us to have a maximum of $2.0 billion in commercial paper outstanding. We do not intend to have outstanding commercial paper borrowings in excess of available capacity under our bank revolving credit facility. ~~As of~~At March 31, ~~2020,~~2021, we had no$1.72 billion outstanding under the commercial paper ~~borrowings outstanding.~~

~~On April 27, 2020, MPC entered into a credit agreement with a syndicate~~program, which matures on various dates in the second quarter of ~~lenders providing for an additional $1 billion 364-day revolving credit facility. The credit agreement for the additional 364-day revolving credit facility contains~~ representations and warranties, affirmative and negative covenants and events of default that we consider customary for agreements of their nature and type and substantially similar to those contained in our existing $5.0 billion five-year revolving credit facility and $1.0 billion 364-day revolving credit facility.2021.

On April 27, 2020, MPC closed on the issuance of $2.5 billion in aggregate principal amount of senior notes in a public offering, consisting of $1.25 billion aggregate principal amount of 4.500 percent unsecured senior notes due 2023 and $1.25 billion aggregate principal amount of 4.700 percent unsecured senior notes due 2025. MPC used the net proceeds from this offering to repay amounts outstanding under its five-year revolving credit facility.

~~The following table shows our available credit capacity, excluding MPLX, as of May 5, 2020.~~


^(a)	~~Borrowed $2 billion on March 30, 2020 and $1.5 billion in April. Repaid $2.75 billion in May.~~


^(b)	Availability under our $750 million trade receivables facility is a function of eligible trade receivables, which will be lower in a sustained lower price environment for refined products. As of April 30, 2020 eligible trade receivables supported borrowings of approximately $517 million.

The MPC credit agreements and our trade receivables facility contain representations and warranties, affirmative and negative covenants and events of default that we consider usual and customary for agreements of these types. The financial covenant included in the MPC credit agreements requires us to maintain, as of the last day of each fiscal quarter, a ratio of Consolidated Net Debt to Total Capitalization (as defined in the MPC credit agreements) of no greater than 0.65 to 1.00. As of March 31, ~~2020,~~2021, we were in compliance with the covenants contained in the MPC bank revolving credit facility and our trade receivables facility, including the financial covenant with a ratio of Consolidated Net Debt to Total Capitalization of ~~0.31~~0.40 to 1.00.

Our intention is to maintain an investment-grade credit profile. As of ~~May 5, 2020,~~April 20, 2021, the credit ratings on our senior unsecured debt are as follows.



Company	Rating Agency	Rating
MPC	Moody’s	Baa2 (negative outlook)
	Standard & Poor’s	BBB (negative outlook)
	Fitch	BBB ~~(negative~~(stable outlook)

The ratings reflect the respective views of the rating agencies. Although it is our intention to maintain a credit profile that supports an investment-grade rating, there is no assurance that these ratings will continue for any given period of time. The ratings may be revised or withdrawn entirely by the rating agencies if, in their respective judgments, circumstances so warrant.

None of the MPC credit agreements or our trade receivables facility contains credit rating triggers that would result in the acceleration of interest, principal or other payments in the event that our credit ratings are downgraded. However, any downgrades of our senior unsecured debt could increase the applicable interest rates, yields and other fees payable under such agreements and may limit our flexibility to obtain financing in the future, including to refinance existing indebtedness. In addition, a downgrade of our senior unsecured debt rating to below investment-grade levels could, under certain circumstances, decrease the amount of trade receivables that are eligible to be sold under our trade receivables facility, impact our ability to purchase crude oil on an unsecured basis and could result in us having to post letters of credit under existing transportation services or other agreements.

See Note 17 to the unaudited consolidated financial statements for further discussion of our debt.

~~Table of Contents~~

MPLX

MPLX’s liquidity totaled ~~$4.31~~$4.19 billion at March 31, ~~2020~~2021 consisting of:


		March 31, 2020							March 31, 2021
(In millions)		Total Capacity		Outstanding Borrowings		Available Capacity		(In millions)	Total Capacity		Outstanding Borrowings		Available Capacity
MPLX LP - bank revolving credit facility	MPLX LP - bank revolving credit facility	$	3,500	$	750	$	2,750	MPLX LP - bank revolving credit facility	$	3,500	$	835	$	2,665
MPC Intercompany Loan Agreement	MPC Intercompany Loan Agreement	1,500		—		1,500		MPC Intercompany Loan Agreement	1,500		—		1,500
Total	Total	$	5,000	$	750	$	4,250	Total	$	5,000	$	835	$	4,165
Cash and cash equivalents	Cash and cash equivalents					57		Cash and cash equivalents					24
Total liquidity	Total liquidity					$	4,307	Total liquidity					$	4,189

The MPLX credit agreement ~~and term loan agreement contain~~contains certain representations and warranties, affirmative and restrictive covenants and events of default that we consider to be usual and customary for an agreement of this type. The financial covenant requires MPLX to maintain a ratio of Consolidated Total Debt as of the end of each fiscal quarter to Consolidated EBITDA (both as defined in the MPLX credit agreement) for the prior four fiscal quarters of no greater than 5.0 to 1.0 (or 5.5 to 1.0 during the six-month period following certain acquisitions). Consolidated EBITDA is subject to adjustments for certain acquisitions completed and capital projects undertaken during the relevant period. Other covenants restrict MPLX and/or certain of its subsidiaries from incurring debt, creating liens on assets and entering into transactions with affiliates. As of March 31, ~~2020,~~2021, MPLX was in compliance with the covenants, including the financial covenant with a ratio of Consolidated Total Debt to Consolidated EBITDA of ~~3.80~~3.8 to 1.0.

Our intention is to maintain an investment-grade credit profile for MPLX. As of ~~May 5, 2020,~~April 20, 2021, the credit ratings on MPLX’s senior unsecured debt are as follows.



Company	Rating Agency	Rating
MPLX	Moody’s	Baa2 (negative outlook)
	Standard & Poor’s	BBB (negative outlook)
	Fitch	BBB ~~(negative~~(stable outlook)

The ratings reflect the respective views of the rating agencies. Although it is our intention to maintain a credit profile that supports an investment-grade rating for MPLX, there is no assurance that these ratings will continue for any given period of time. The ratings may be revised or withdrawn entirely by the rating agencies if, in their respective judgments, circumstances so warrant.

The agreements governing MPLX’s debt obligations do not contain credit rating triggers that would result in the acceleration of interest, principal or other payments in the event that MPLX credit ratings are downgraded. However, any downgrades of MPLX senior unsecured debt to below investment grade ratings could increase the applicable interest rates, yields and other fees payable under such agreements. In addition, a downgrade of MPLX senior unsecured debt ratings to below investment-grade levels may limit MPLX’s ability to obtain future financing, including to refinance existing indebtedness.

See Item 8. Financial Statements and Supplementary Data – Note 17 for further discussion of MPLX’s debt.

Capital Requirements

Capital Investment Plan

MPC's capital investment plan for ~~2020 originally totaled~~2021 totals approximately ~~$2.6~~$1.4 billion for capital projects and investments, excluding ~~MPLX,~~ capitalized interest, potential acquisitions and ~~acquisitions.~~MPLX’s capital investment plan. MPC’s capital investment plan includes all of the planned capital spending for Refining & Marketing ~~Retail~~ and Corporate, as well as a portion of the planned capital investments in ~~Midstream. MPLX’s~~Midstream and Speedway’s capital spending for the first quarter of 2021, which is now reported separately as discontinued operations. The remainder of the planned capital spending for Midstream reflects the capital investment plan for ~~2020 originally totaled approximately $1.75 billion.~~

~~In response~~MPLX, which totals $1.0 billion excluding project reimbursements paid by MPC to ~~the COVID-19 environment, the company announced a consolidated~~MPLX and return of capital spending reduction of $1.35 billion to $3.0 billion for 2020 as detailed in the table below. Remaining capital spend primarily relates to growth projects that are already in progress or spending that supports the safe and reliable operation of our facilities.from MPLX’s joint venture partners. We continuously evaluate our capital investment plan and make changes as conditions warrant.

~~Table of Contents~~

Capital Investment Plan
(In millions) Revised 2020 Outlook Original 2020 Guidance Reduction
MPC, excluding MPLX
Refining & Marketing $ 1,300
$ 1,550
$ (250 )
Retail 300
550
(250 )
Midstream - Other 230
300
(70 )
Corporate and Other 120
200
(80 )
Total MPC, excluding MPLX $ 1,950
$ 2,600
$ (650 )

Midstream - MPLX $ 1,050
$ 1,750
$ (700 )

Capital expenditures and investments for MPC and MPLX are summarized below.


	Three Months Ended March 31,
(In millions)	2021		2020
Capital expenditures and investments:(a)
MPC continuing operations, excluding MPLX
Refining & Marketing	$	134	$	470
Midstream - Other	16		76
Corporate and Other(b)	21		27
Total MPC continuing operations, excluding MPLX	$	171	$	573

MPC discontinued operations - Speedway	$	103	$	65

Midstream - MPLX	$	122	$	398

(a) Capital expenditures exclude changes in capital accruals.

Three Months Ended
March 31,
(In millions) 2020 2019
MPC, excluding MPLX
Refining & Marketing $ 459
$ 394
Retail 76
73
Midstream - Other 76
194
Corporate and Other^(a)
56
41
Total MPC, excluding MPLX $ 667
$ 702

Midstream - MPLX $ 398
$ 629


(b) Excludes capitalized interest of $14 million and $29 million for the three months ended March 31, 2021 and 2020, respectively.^(a)	~~Includes capitalized interest of $29 million and $31 million for the three months ended March 31, 2020 and 2019, respectively.~~

Capital expenditures and investments in affiliates during the three months ended March 31, ~~2020~~2021 were primarily for Midstream and Refining & Marketing segment ~~projects and investments in affiliates.~~projects.

Other Capital Requirements

During the three months ended March 31, ~~2020,~~2021, we contributed $3$226 million to our funded pension plans. We may choose to make additional contributions to our pension plans.

On April ~~29, 2020,~~28, 2021, our board of directors approved a dividend of $0.58 per share on common stock. The dividend is payable June 10, ~~2020,~~2021, to shareholders of record as of the close of business on May ~~20, 2020.~~19, 2021.

As of March 31, 2021, $93 million of restructuring expenses were accrued as restructuring reserves in our consolidated balance sheet. We expect cash payments for the remaining exit and disposal costs reserve to occur through 2024.

We may, from time to time, repurchase our senior notes in the open market, in tender offers, in privately-negotiated transactions or otherwise in such volumes, at such prices and upon such other terms as we deem appropriate.

Share Repurchases

~~During~~We did not repurchase shares during the three months ended March 31, 2021 and March 31, 2020, ~~we did not repurchase any of our common stock,~~ which has helped preserve our liquidity during the COVID-19 pandemic. The timing and amount of future repurchases, if any, will depend upon several factors, including market and business conditions, and such repurchases may be initiated, suspended or discontinued at any time. Since January 1, 2012, our board of directors has approved $18.0 billion in total share repurchase authorizations and we have repurchased a total of $15.05 billion of our common stock, leaving $2.96 billion available for repurchases at March 31, ~~2020. We will evaluate the timing to resume any future repurchases as market conditions evolve. The table below summarizes our total share repurchases for~~2021.

During the three months ended March 31, ~~2020 and 2019. See Note 8~~2021, 6,272,981 MPLX common units had been repurchased at an average cost per unit of $24.78. Total cash paid for units repurchased during the three months ended March 31, 2021 was $155 million. As of March 31, 2021, MPLX had agreements to acquire 291,400 additional common units for $7 million, which settled in early April 2021. As of March 31, 2021, $812 million remained outstanding on the ~~unaudited consolidated financial statements~~program for ~~further discussion of the share repurchase plans.~~

~~Table of Contents~~

Three Months Ended
March 31,
(In millions, except per share data) 2020 2019
Number of shares repurchased —
14
Cash paid for shares repurchased $ —
$ 885
Average cost per share $ —
$ 62.98
future purchases.

We may utilize various methods to effect the repurchases, which could include open market repurchases, negotiated block transactions, tender offers, accelerated share repurchases or open market solicitations for shares, some of which may be effected through Rule 10b5-1 plans. ~~The timing and amount of future repurchases, if any, will depend upon several factors, including market and business conditions, and such repurchases may be discontinued at any time.~~

Contractual Cash Obligations

As of March 31, ~~2020,~~2021, our contractual cash obligations included long-term debt, capital and operating lease obligations, purchase obligations and other long-term liabilities. During the first three months of ~~2020,~~2021, our long-term debt commitments increased approximately ~~$2.55 billion~~$620 million primarily due to borrowings under the MPC ~~and MPLX bank~~ revolving credit ~~facilities.~~facility and commercial paper program and the MPLX revolving credit facility, partially offset by the repayment of $1.0 billion of MPC senior notes and the redemption of $750 million of MPLX senior notes.

~~During the quarter our contractual cash obligations for crude oil decreased primarily as a result of the decrease in crude prices during the period.~~ There were no other material changes to our contractual cash obligations outside the ordinary course of business since December 31, ~~2019.~~2020.

Off-Balance Sheet Arrangements

Off-balance sheet arrangements comprise those arrangements that may potentially impact our liquidity, capital resources and results of operations, even though such arrangements are not recorded as liabilities under U.S. GAAP. Our off-balance sheet arrangements are limited to indemnities and guarantees that are described below. Although these arrangements serve a variety of our business purposes, we are not dependent on them to maintain our liquidity and capital resources, and we are not aware of any circumstances that are reasonably likely to cause the off-balance sheet arrangements to have a material adverse effect on our liquidity and capital resources.

We have provided various guarantees related to equity method investees. ~~In conjunction with our spinoff from Marathon Oil, we entered into various indemnities and guarantees to Marathon Oil.~~ These arrangements are described in Note 22 to the unaudited consolidated financial statements.

ENVIRONMENTAL MATTERS AND COMPLIANCE COSTS

We have incurred and may continue to incur substantial capital, operating and maintenance, and remediation expenditures as a result of environmental laws and regulations. If these expenditures, as with all costs, are not ultimately reflected in the prices of our products and services, our operating results will be adversely affected. We believe that substantially all of our competitors must comply with similar environmental laws and regulations. However, the specific impact on each competitor may vary depending on a number of factors, including the age and location of its operating facilities, marketing areas, production processes and whether it is also engaged in the petrochemical business or the marine transportation of crude oil and refined products.

There have been no significant changes to our environmental matters and compliance costs during the three months ended March 31, ~~2020.~~2021.

CRITICAL ACCOUNTING ESTIMATES

As of March 31, ~~2020,~~2021, there have been no significant changes to our critical accounting estimates since our Annual Report on Form 10-K for the year ended December 31, ~~2019 except as noted below.~~2020.

~~Impairment Assessments of Long-Lived Assets, Intangible Assets, Goodwill and Equity Method Investments~~

Fair value calculated for the purpose of testing our long-lived assets, intangible assets, goodwill and equity method investments for impairment is estimated using the expected present value of future cash flows method and comparative market prices when appropriate. Significant judgment is involved in performing these fair value estimates since the results are based on forecasted financial information prepared using significant assumptions including:


•	~~Future operating performance~~. Our estimates of future operating performance are based on our analysis of various supply and demand factors, which include, among other things, industry-wide capacity, our planned utilization rate, end-user demand, capital expenditures and economic conditions. Such estimates are consistent with those used in our planning and capital investment reviews.

~~Table of Contents~~

•

~~Future volumes~~. Our estimates of future refinery, retail, pipeline throughput and natural gas and natural gas liquid processing volumes are based on internal forecasts prepared by our Refining & Marketing, Retail and Midstream segments operations personnel. Assumptions about the effects of COVID-19 on our future volumes are inherently subjective and contingent upon the duration of the pandemic, which is difficult to forecast.


•	~~Discount rate commensurate with the risks involved.~~ We apply a discount rate to our cash flows based on a variety of factors, including market and economic conditions, operational risk, regulatory risk and political risk. This discount rate is also compared to recent observable market transactions, if possible. A higher discount rate decreases the net present value of cash flows.


•	~~Future capital requirements.~~ ~~These are based on authorized spending and internal forecasts.~~

Assumptions about the effects of COVID-19 and the macroeconomic environment are inherently subjective and contingent upon the duration of the pandemic and its impact on the macroeconomic environment, which is difficult to forecast. We base our fair value estimates on projected financial information which we believe to be reasonable. However, actual results may differ from these projections.

The need to test for impairment can be based on several indicators, including a significant reduction in prices of or demand for products produced, a weakened outlook for profitability, a significant reduction in pipeline throughput volumes, a significant reduction in natural gas or natural gas liquids processed, a significant reduction in refining or retail fuel margins, other changes to contracts or changes in the regulatory environment.

Long-lived assets used in operations are assessed for impairment whenever changes in facts and circumstances indicate that the carrying value of the assets may not be recoverable based on the expected undiscounted future cash flow of an asset group. For purposes of impairment evaluation, long-lived assets must be grouped at the lowest level for which independent cash flows can be identified, which generally is the refinery and associated distribution system level for Refining & Marketing segment assets, company-owned convenience store locations for Retail segment assets, and the plant level or pipeline system level for Midstream segment assets. If the sum of the undiscounted estimated pretax cash flows is less than the carrying value of an asset group, fair value is calculated, and the carrying value is written down to the calculated fair value.

During the first quarter of 2020, we identified long-lived asset impairment triggers relating to all 16 of our refinery asset groups as a result of significant impacts to the Refining & Marketing segment forecasted cash flows. The cash flows associated with these assets were significantly impacted by the effects of COVID-19 and commodity price declines. We assessed each refinery asset group for impairment by comparing the undiscounted estimated pretax cash flows to the carrying value of each asset group. Of the 16 refinery asset groups, only the Gallup refinery’s carrying value exceeded its undiscounted estimated pretax cash flows. All other refinery asset groups undiscounted estimated pretax cash flows exceeded the carrying value by at least 21 percent. The determination of undiscounted estimated pretax cash flows utilized significant assumptions including management’s best estimates of the expected future cash flows, allocation of certain Refining & Marketing segment cash flows to the individual refineries, the estimated useful lives of the asset groups, and the salvage values of the refineries. The determinations of expected future cash flows and the salvage values of refineries require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of our impairment analysis will prove to be an accurate prediction of the future. Should our assumptions significantly change in future periods, it is possible we may determine the carrying values of these additional refinery asset groups exceed the undiscounted estimated pretax cash flows of these refinery asset groups, which would result in future impairment charges.

It was determined that the fair value of the Gallup refinery’s property, plant and equipment (“PP&E”) was less than the carrying value. As a result, we recorded a charge of $142 million to impairment expense on the consolidated statements of income. The fair value measurements for the Gallup refinery assets represent Level 3 measurements.

During the first quarter of 2020, MPLX identified an impairment trigger relating to asset groups within its Western Gathering & Processing (“G&P”) reporting unit as a result of significant impacts to forecasted cash flows for these asset groups resulting from the effects of COVID-19. The cash flows associated with these assets were significantly impacted by volume declines reflecting decreased forecasted producer customer production as a result of lower commodity prices. MPLX assessed each asset group within the Western G&P reporting unit for impairment. It was determined that the fair value of the East Texas G&P asset group’s underlying assets were less than the carrying value. As a result, MPLX recorded impairment charges totaling $350 million related to its property, plant and equipment and intangibles, which are included in impairment expense on our consolidated statements of income. Fair value of MPLX’s PP&E was determined using a combination of an income and cost approach. The income approach utilized significant assumptions including management’s best estimates of the expected future cash flows and the estimated useful life of the asset group. The cost approach utilized assumptions for the current replacement costs of similar assets adjusted for estimated depreciation and deterioration of the existing equipment. The fair value of the intangibles was determined based on applying the multi-period excess earnings method, which is an income approach. Key

~~Table of Contents~~

assumptions included management’s best estimates of the expected future cash flows from existing customers, customer attrition rates and the discount rate. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the impairment analysis will prove to be an accurate prediction of the future. The fair value measurements for the asset group fair values represent Level 3 measurements.

Unlike long-lived assets, goodwill is subject to annual, or more frequent if necessary, impairment testing at the reporting unit level. A goodwill impairment loss is measured as the amount by which a reporting unit's carrying value exceeds its fair value, without exceeding the recorded amount of goodwill.

The “Business Update” under Recent Developments in the Corporate Overview section describes the effects that the recent outbreak of COVID-19 and its development into a pandemic and the recent decline in commodity prices have had on our business. Due to these developments, we performed impairment assessments as discussed further below.

Prior to performing our goodwill impairment assessment as of March 31, 2020, we had goodwill totaling approximately $20 billion associated with eight of our 10 reporting units. As part of this assessment, we recorded goodwill impairment expenses of $7.33 billion in the first quarter of 2020 related to our Refining & Marketing and MPLX’s Eastern G&P reporting units. The Refining & Marketing and Eastern G&P reporting units recorded goodwill impairment charges of $5.52 billion and $1.81 billion, respectively, which fully impaired both reporting units’ historical goodwill balances. These goodwill impairment expenses are primarily driven by the effects of COVID-19, the decline in commodity prices and the slowing of drilling activity which has reduced production growth forecasts from MPLX’s producer customers. For the remaining six reporting units with goodwill, we determined that no significant adjustments to the carrying value of goodwill were necessary. The impairment assessment performed as of March 31, 2020 resulted in the fair value of the reporting units exceeding their carrying value by percentages ranging from approximately 8.5 percent to 270.0 percent. MPLX’s Crude Gathering reporting unit had goodwill totaling $1.1 billion at March 31, 2020 and MPLX’s fair value estimate for this reporting unit exceeded the reporting unit carrying value by 8.5 percent. The operations which make up this reporting unit were acquired through the merger with ANDX. We accounted for the October 1, 2018 acquisition of Andeavor (including acquiring control of ANDX), using the acquisition method of accounting, which required Andeavor assets and liabilities to be recorded at the acquisition date fair value. As such, given the short amount of time from when fair value was established to the date of the impairment test, the amount by which the fair value exceeded the carrying value within this reporting unit is not unexpected. An increase of one percentage point to the discount rate used to estimate the fair value of this reporting unit would not have resulted in goodwill impairment as of March 31, 2020. No other reporting units had fair values exceeding carrying values of less than 20 percent.

Significant assumptions used to estimate the reporting units’ fair value included estimates of future cash flows and market information for comparable assets. If estimates for future cash flows, which are impacted by future margins on products produced or sold, future volumes, and capital requirements, were to decline, the overall reporting units’ fair values would decrease, resulting in potential goodwill impairment charges. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the impairment tests will prove to be an accurate prediction of the future.

Equity method investments are assessed for impairment whenever factors indicate an other than temporary loss in value. Factors providing evidence of such a loss include the fair value of an investment that is less than its carrying value, absence of an ability to recover the carrying value or the investee’s inability to generate income sufficient to justify our carrying value. During the first quarter of 2020, we recorded $1.32 billion of equity method investment impairment charges to income from equity method investments in the consolidated statements of income. The impairment charges primarily related to MPLX recording an other than temporary impairment totaling $1.26 billion, of which $1.25 billion related to MarkWest Utica EMG, L.L.C and its investment in Ohio Gathering Company, L.L.C. The fair value of the investments was determined based upon applying the discounted cash flow method, which is an income approach. The discounted cash flow fair value estimate is based on known or knowable information at the interim measurement date. The significant assumptions that were used to develop the estimate of the fair value under the discounted cash flow method include management’s best estimates of the expected future cash flows, including prices and volumes, the weighted average cost of capital and the long-term growth rate. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As such, the fair value of these equity method investments represents a Level 3 measurement. As a result, there can be no assurance that the estimates and assumptions made for purposes of the impairment test will prove to be an accurate prediction of the future. The impairment was recorded through “Income from equity method investments.” The impairments were largely due to a reduction in forecasted volumes gathered and processed by the systems operated by the joint ventures. At March 31, 2020 we had $5.66 billion of equity method investments recorded on the Consolidated Balance Sheets.

~~Table of Contents~~

An estimate of the sensitivity to net income resulting from impairment calculations is not practicable, given the numerous assumptions (e.g., pricing, volumes and discount rates) that can materially affect our estimates. That is, unfavorable adjustments to some of the above listed assumptions may be offset by favorable adjustments in other assumptions.

ACCOUNTING STANDARDS NOT YET ADOPTED

~~As discussed in Note 2 to the unaudited consolidated financial statements, certain new financial~~We have not identified any recent accounting pronouncements ~~will be effective for~~that are expected to have a material impact on our financial ~~statements in the future.~~condition, results of operations or cash flows upon adoption.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For a detailed discussion of our risk management strategies and our derivative instruments, see Item 7A. Quantitative and Qualitative Disclosures about Market Risk in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~.2020.

See Notes 15 and 16 to the unaudited consolidated financial statements for more information about the fair value measurement of our derivatives, as well as the amounts recorded in our consolidated balance sheets and statements of income. We do not designate any of our commodity derivative instruments as hedges for accounting purposes.

The following table includes the composition of net gains and losses on our commodity derivative positions as of March 31, 2021 and 2020, ~~and 2019,~~ respectively.

Three Months Ended
March 31,
(In millions) 2020 2019
Realized gain on settled derivative positions $ 2
$ 39
Unrealized gain (loss) on open net derivative positions 213
(139 )
Net gain (loss) $ 215
$ (100 )


	Three Months Ended March 31,
(In millions)	2021		2020
Realized gain (loss) on settled derivative positions	$	(76)	$	2
Unrealized gain on open net derivative positions	1		213
Net gain (loss)	$	(75)	$	215

See Note 16 to the unaudited consolidated financial statements for additional information on our open derivative positions at March 31, ~~2020.~~2021.

Sensitivity analysis of the effects on income from operations (“IFO”) of hypothetical 10 percent and 25 percent increases and decreases in commodity prices for open commodity derivative instruments as of March 31, ~~2020~~2021 is provided in the following table.

Change in IFO from a
Hypothetical Price
Increase of Change in IFO from a
Hypothetical Price
Decrease of
(In millions) 10% 25% 10% 25%
As of March 31, 2020
Crude $ (56 ) $ (140 ) $ 58
$ 144
Refined products 12
29
(12 ) (29 )
Blending products (2 ) (5 ) 2
5
Embedded derivatives (5 ) (11 ) 5
11


	Change in IFO from a Hypothetical Price Increase of				Change in IFO from a Hypothetical Price Decrease of
(In millions)	10%		25%		10%		25%
As of March 31, 2021
Crude	$	(38)	$	(96)	$	38	$	96
Refined products	1		4		(1)		(4)
Blending products	10		25		(10)		(25)
Soybean oil	(13)		(32)		13		32
Embedded derivatives	(7)		(17)		7		17

We remain at risk for possible changes in the market value of commodity derivative instruments; however, such risk should be mitigated by price changes in the underlying physical commodity. Effects of these offsets are not reflected in the above sensitivity analysis.

We evaluate our portfolio of commodity derivative instruments on an ongoing basis and add or revise strategies in anticipation of changes in market conditions and in risk profiles. Changes to the portfolio after March 31, ~~2020~~2021 would cause future IFO effects to differ from those presented above.

Sensitivity analysis of the effect of a hypothetical 100-basis-point change in interest rates on long-term debt, including the portion classified as current and excluding finance leases, as of March 31, ~~2020~~2021 is provided in the following table. Fair value of cash and cash equivalents, receivables, accounts payable and accrued interest approximate carrying value and are relatively insensitive to changes in interest rates due to the short-term maturity of the instruments. Accordingly, these instruments are excluded from the table.

~~Table of Contents~~


(In millions)	Fair Value as of March 31, 2021(a)		Change in Fair Value(b)		Change in Net Income for the Three Months Ended March 31, 2021(c)
Long-term debt
Fixed-rate	$	30,195	$	2,648	n/a
Variable-rate	4,852		n/a		8

(a)Fair value was based on market prices, where available, or current borrowing rates for financings with similar terms and maturities.

(In millions)
Fair Value as of March 31, 2020^(a)

Change in
Fair Value^(b)

Change in Net Income for the Three Months Ended
March 31, 2020^(c)
Long-term debt
Fixed-rate $ 22,289

$ 1,772
n/a
Variable-rate 3,751
n/a
8


(b)^(a)	~~Fair value was based on market prices, where available, or current borrowing rates for financings with similar terms and maturities.~~


^(b)	Assumes a 100-basis-point decrease in the weighted average yield-to-maturity at ~~March 31, 2020.~~


^(c)	~~Assumes a 100-basis-point change in interest rates. The change to net income was based on the weighted average balance of debt outstanding for the three months ended March 31, 2020.~~

At March 31, ~~2020~~2021.

(c),Assumes a 100-basis-point change in interest rates. The change to net income was based on the weighted average balance of debt outstanding for the three months ended March 31, 2021.

At March 31, 2021, our portfolio of long-term debt was comprised of fixed-rate instruments and variable-rate borrowings. The fair value of our fixed-rate debt is relatively sensitive to interest rate fluctuations. Our sensitivity to interest rate declines and corresponding increases in the fair value of our debt portfolio unfavorably affects our results of operations and cash flows only when we elect to repurchase or otherwise retire fixed-rate debt at prices above carrying value. Interest rate fluctuations generally do not impact the fair value of borrowings under our variable-rate debt, but may affect our results of operations and cash flows.

See Note 15 to the unaudited consolidated financial statements for additional information on the fair value of our debt.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in ~~Rules~~Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) was carried out under the supervision and with the participation of our management, including our chief executive officer and chief financial officer. Based upon that evaluation, the chief executive officer and chief financial officer concluded that the design and operation of these disclosure controls and procedures were effective as of March 31, ~~2020,~~2021, the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

During the quarter ended March 31, ~~2020,~~2021, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~Table of Contents~~

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are the subject of, or a party to, a number of pending or threatened legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relating to the environment. While it is possible that an adverse result in one or more of the lawsuits or proceedings in which we are a defendant could be material to us, based upon current information and our experience as a defendant in other matters, we believe that these lawsuits and proceedings, individually or in the aggregate, will not have a material adverse effect on our consolidated results of operations, financial position or cash flows. Except as described below, there have been no material changes to the legal proceedings previously disclosed in our Annual Report on Form 10-K.

Litigation

Tesoro High Plains Pipeline

In ~~connection with MPLX’s 9.19 percent indirect interest~~early July 2020, Tesoro High Plains Pipeline Company, LLC (“THPP”), a subsidiary of MPLX, received a Notification of Trespass Determination from the Bureau of Indian Affairs (“BIA”) relating to a portion of the Tesoro High Plains Pipeline that crosses the Fort Berthold Reservation in North Dakota. The notification covered the rights of way for 23 tracts of land and demanded the immediate cessation of pipeline operations. The notification also assessed trespass damages of approximately $187 million. THPP appealed this determination, which triggered an automatic stay of the requested pipeline shutdown and payment. On October 29, the Assistant Secretary - Indian Affairs issued an order vacating the BIA’s trespass order and requiring the Regional Director for the BIA Great Plains Region to issue a ~~joint venture that owns and operates~~new decision on or before December 15 covering all 34 tracts at issue. On December 15, the ~~Dakota Access Pipeline and Energy Transfer Crude Oil Pipeline projects, collectively referred~~Regional Director of the BIA issued a new trespass notice to ~~as the Bakken Pipeline system, MPLX has entered into a Contingent Equity Contribution Agreement whereby MPLX LP, along~~THPP consistent with the ~~other joint venture owners~~Assistant Secretary - Indian Affairs order vacating the prior trespass order. The new order found that THPP was in trespass and assessed trespass damages of approximately $4 million (including interest). The order also required THPP to immediately cease and desist use of the ~~Bakken Pipeline system, have agreed to make equity contributions to~~portion of the ~~joint venture upon certain events occurring to allow~~pipeline that crosses the ~~entities that own~~property at issue. The new order was appealed, and ~~operate the Bakken Pipeline system to satisfy their senior note payment obligations. The senior notes were issued to repay amounts owed~~was upheld by the ~~pipeline companies to fund~~Assistant Secretary - Indian Affairs. THPP has complied with the ~~cost of construction of Bakken Pipeline system.~~

~~In March~~Regional Director’s December 15, 2020 notice. On February 12, 2021, landowners filed suit in the U.S. District Court for the District of ~~Columbia ordered~~North Dakota (the “District of North Dakota”) against THPP, the Department of the Interior, the Assistant Secretary - Indian Affairs, the Interior Board of Indian Appeals and the BIA, requesting, among other things, that decisions by the Assistant Secretary - Indian Affairs and the Interior Board of Indian Appeals be vacated as to the award of damages to plaintiffs. In March 2021, THPP received a copy of an order purporting to vacate all orders related to THPP’s alleged trespass issued by the BIA between July 2, 2020 and January 14, 2021. The order directs the Regional Director of the BIA to reconsider the issue of THPP’s alleged trespass and issue a new order, if necessary, after all interested parties have had an opportunity to be heard. Subsequently, landowners voluntarily dismissed the suit filed in the District of North Dakota. On April 23, 2021, THPP filed a lawsuit in the District of North Dakota against the United States of America, the U.S. Army Corps of Engineers, which granted permits for the Bakken Pipeline system, to conduct a full environmental impact statement (“EIS”), and further requested briefing on whether an easement permit necessary for the operationDepartment of the ~~Bakken Pipeline system should be vacated while~~Interior and the ~~EIS is being prepared. If~~BIA challenging the ~~permit is vacated pending completion~~March order purporting to vacate all previous orders related to THPP’s alleged trespass.

MPLX continues to work towards a settlement of this matter with holders of the ~~EIS~~property rights at issue.

Climate Change

On April 26, 2021, Anne Arundel County, Maryland, filed suit in the Circuit Court for Anne Arundel County, Maryland, against 26 energy industry defendants, including MPC and ~~the vacatur is deemed temporary, MPLX would have~~Speedway. The claims made in this lawsuit are substantially similar to contribute its 9.19 percent pro rata share of funds required to pay interest accruing on the notes while the pipeline is shutdown and its 9.19 percent pro rata share of any costs to remediate any deficiencies to reinstate the permit and/or return the pipeline into operation. If the court vacates the permit and such action resultsthose made in a permanent shutdown of the pipeline, MPLX would have to contribute its 9.19 percent pro rata share of the cost to redeem the bonds (including the one percent redemption premium required pursuant to the indenture governing the notes) and any accrued and unpaid interest, if any.MPC’s previously disclosed climate change litigation.

Environmental Proceedings

~~As described~~Item 103 of Regulation S-K promulgated by the SEC requires disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions, unless we reasonably believe that the matter will result in no monetary sanctions, or in monetary sanctions, exclusive of interest and costs, of less than $300,000. The following matters are disclosed in accordance with that requirement. We do not currently believe that the eventual outcome of any such matters, individually or in the aggregate, could have a material adverse effect on our business, financial condition, results of operations or cash flows.

There have been no material changes to the environmental proceedings previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 10-K”), governmental and other entities in California, New York, Maryland and Rhode Island have filed lawsuits against coal, gas, oil and petroleum companies, including the Company. The lawsuits allege damages as a result of climate change and the plaintiffs are seeking unspecified damages and abatement under various tort theories. In March 2020, the City and County of Honolulu, Hawaii filed suit against 20 oil and gas defendants, including MPC, making similar allegations. Similar lawsuits may be filed in other jurisdictions. At this early stage, the ultimate outcome of these matters remain uncertain, and neither the likelihood of an unfavorable outcome nor the ultimate liability, if any, can be determined.

~~Logistics and Storage~~

On April 10, 2020, we received a Notice of Probable Violation and Proposed Civil Penalty from the Pipeline and Hazardous Materials Safety Administration’s Office of Pipeline Safety (OPS) for alleged violations arising from the release at the Hospah Station pump station in New Mexico on September 7, 2018. The NOPV alleged a failure to follow written procedures for responding to, investigating, and correcting the cause of an increase in pressure of flow rate outside its normal operating limits, and a failure to follow appropriate procedures regarding related personnel performance. This matter was resolved for a cash penalty of approximately $236,000.

~~Detroit Refinery~~

As previously disclosed in our 2019 10-K, in June 2019, we received an offer from the Michigan Department of Environment, Great Lakes, and Energy to settle violations alleged in five NOVs issued to the refinery between September 2017 and February 2019. In December 2019, the settlement discussions were expanded to include two additional NOVs issued to the refinery during October and December 2019. The NOVs allege violations of emissions limitations and other requirements of the refinery’s air permit and Michigan air pollution control laws. We have agreed to settle this matter for a cash penalty under $100,000 and a supplemental environmental project with an expected approximate value of $282,000.

~~Galveston Bay Refinery~~

As previously disclosed on our 2019 10-K, in August 2019, we received an offer from the Texas Commission on Environmental Quality to settle violations alleged in enforcement notices issued to the refinery in March 2019. The notices allege violations of emissions limitations and other requirements of the refinery’s air permit. We have agreed to settle this matter for a cash penalty and a supplemental environmental project with a total combined value of under $100,000.

10-K.

~~Table of Contents~~

ITEM 1A. RISK FACTORS

~~Except as described below, there~~There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

~~Our working capital, cash flows and liquidity can be significantly affected by decreases in commodity prices.~~

Payment terms for our crude oil purchases are generally longer than the terms we extend to our customers for refined product sales. As a result, the payables for our crude oil purchases are proportionally larger than the receivables for our refined product sales. Due to this net payables position, a decrease in commodity prices generally results in a use of working capital, and given the significant volume of crude oil that we purchase the impact can materially affect our working capital, cash flows and liquidity.

The recent outbreak of COVID-19 and certain developments in the global oil markets have had, and may continue to have, material adverse consequences for general economic, financial and business conditions, and could materially and adversely affect our business, financial condition, results of operations and cash flows and those of our customers, suppliers and other counterparties.

The recent outbreak of COVID-19 and the responses of governmental authorities and companies and the self-imposed restrictions by many individuals across the world to stem the spread of the virus have significantly reduced global economic activity, as there has been a dramatic decrease in the number of businesses open for operation and substantially fewer people across the world traveling to work or leaving their home to purchase goods and services. This has also resulted, for example, in a dramatic reduction in airline flights and has reduced the number of cars on the road. As a result, there has been a decline in the demand for the refined petroleum products that we manufacture and sell.

Concerns over the negative effects of COVID-19 on economic and business prospects across the world have contributed to increased market and oil price volatility and have diminished expectations for the global economy. These factors, coupled with the emergence of decreasing business and consumer confidence and increasing unemployment resulting from the COVID-19 outbreak and the recent abrupt oil price decline, may precipitate a prolonged economic slowdown and recession. Our refinery utilization and operating margins and other aspects of our business have been adversely impacted by these developments. Any such prolonged period of economic slowdown or recession, or a protracted period of depressed prices for our products or crude oil or reduced margins for the refined petroleum products we manufacture and sell could have significant adverse consequences for our financial condition and the financial condition of our customers, suppliers and other counterparties, and could diminish our liquidity and negatively affect our ability to obtain adequate crude oil volumes and to market certain of our products at favorable prices, or at all.

Due to declines in the market prices of products held in our inventories, we recorded a material inventory valuation charge to cost of revenues to value certain of our inventories at the lower of cost or market. Depending on future movements of refined product prices, future inventory valuation adjustments could have a negative or positive effect on our financial performance. In addition, a sustained period of low crude oil prices may also result in significant financial constraints on certain producers from which we acquire our crude oil, which could result in long term crude oil supply constraints for our business. Such conditions could also result in an increased risk that our customers and other counterparties may be unable to fully fulfill their obligations in a timely manner, or at all. Any of the foregoing events or conditions, or other unforeseen consequences of COVID-19, could significantly adversely affect our business and financial condition and the business and financial condition of our customers and other counterparties.

The ultimate extent of the impact of COVID-19 on our business, financial condition, results of operations and cash flows will depend largely on future developments, including the duration and spread of the outbreak, particularly within the geographic areas where we operate, the related impact on overall economic activity and the timing of the lifting of restrictions and return of customer confidence, all of which are uncertain and cannot be predicted with certainty at this time.

~~The Court of Chancery of the State of Delaware will be, to the extent permitted by law, the sole and exclusive forum for substantially all disputes between us and our shareholders.~~

~~Our Restated Certificate of Incorporation provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for:~~

~~any derivative action or proceeding brought on behalf of MPC;~~

~~any action asserting a claim of breach of a fiduciary duty owed by any director or officer of MPC to MPC or its stockholders~~

~~Table of Contents~~

any action asserting a claim against MPC arising pursuant to any provision of the General Corporation Law of the State of Delaware, MPC’s Restated Certificate of Incorporation, any Preferred Stock Designation or the Bylaws of MPC; or

~~any other action asserting a claim against MPC or any Director or officer of MPC that is governed by or subject to the internal affairs doctrine for choice of law purposes.~~

The forum selection provision may restrict a stockholder’s ability to bring a claim against us or directors or officers of MPC in a forum that it finds favorable, which may discourage stockholders from bringing such claims at all. Alternatively, if a court were to find the forum selection provision contained in our Restated Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in another forum, which could materially adversely affect our business, financial condition and results of operations. However, the forum selection provision does not apply to any claims, actions or proceedings arising under the Securities Act or the Exchange Act.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table sets forth a summary of our purchases during the quarter ended March 31, ~~2020,~~2021, of equity securities that are registered by MPC pursuant to Section 12 of the Securities Exchange Act of 1934, as amended.


Period	Total Number of Shares Purchased(a)	Average Price Paid per Share(b)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(c)
01/01/2021-01/31/2021	61	$	41.26	—	$	2,954,604,016
02/01/2021-02/28/2021	440	43.19		—	$	2,954,604,016
03/01/2021-03/31/2021	—	—		—	$	2,954,604,016
Total	501	42.96		—

(a)The amounts in this column include 61, 440 and 0 shares of our common stock delivered by employees to MPC, upon vesting of restricted stock, to satisfy tax withholding requirements in January, February and March, respectively.

(b)Amounts in this column reflect the weighted average price paid for shares tendered to us in satisfaction of employee tax withholding obligations upon the vesting of restricted stock granted under our stock plans.

(c)On April 30, 2018, we announced that our board of directors had approved a $5 billion share repurchase authorization in addition to the remaining authorization pursuant to the May 31, 2017 announcement. These share purchase authorizations have no expiration date. The share repurchase authorization announced on April 30, 2018, together with prior authorizations, results in a total of $18 billion of share repurchase authorizations since January 1, 2012.

Period
Total Number
of Shares
Purchased^(a)

Average
Price
Paid per
Share^(b)
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs
Maximum Dollar
Value of Shares that
May Yet Be Purchased
Under the Plans or
Programs^(c)
01/01/2020-01/31/2020 —
$ —
—
$ 2,954,604,016
02/01/2020-02/29/2020 1,572
53.37
—
2,954,604,016
03/01/2020-03/31/2020 22,722
46.95
—
2,954,604,016
Total 24,294
47.37
—


^(a)	The amounts in this column include 0, 1,572 and 22,722 shares of our common stock delivered by employees to MPC, upon vesting of restricted stock, to satisfy tax withholding requirements in January, February and March, respectively.


^(b)	Amounts in this column reflect the weighted average price paid for shares tendered to us in satisfaction of employee tax withholding obligations upon the vesting of restricted stock granted under our stock plans.


^(c)	On April 30, 2018, we announced that our board of directors had approved a $5.0 billion share repurchase authorization. This share repurchase authorization has no expiration date. The share repurchase authorization announced on April 30, 2018, together with prior authorizations, results in a total of $18.0 billion of share repurchase authorizations since January 1, 2012.

~~ITEM 5. OTHER INFORMATION~~

~~None~~

~~Table of Contents~~

ITEM 6. EXHIBITS

Incorporated by Reference

Filed
Herewith

Furnished
Herewith

Exhibit

Number

Exhibit Description

Form

Exhibit

Filing
Date

SEC File
No.

2.1†

Agreement and Plan of Merger, dated as of April 29, 2018, by and among MPC, Andeavor, Mahi Inc. and Mahi LLC

8-K

2.1

4/30/2018

001-35054

2.2

Amendment to Agreement and Plan of Merger, dated as of July 3, 2018, by and among Andeavor, MPC, Mahi Inc. and Mahi LLC

S-4/A

2.2

7/5/2018

333-225244

2.3

Second Amendment to Agreement and Plan of Merger, dated as of September 18, 2018, by and among Andeavor, MPC, Mahi Inc. and Mahi LLC

8-K

2.1

9/18/2018

001-35054

2.4†

Agreement and Plan of Merger, dated as of May 7, 2019, by and among Andeavor Logistics LP, Tesoro Logistics GP, LLC, MPLX LP, MPLX GP LLC and MPLX MAX LLC.

8-K

2.1

5/8/2019

001-35054

2.5†

Purchase and Sale Agreement, dated as of August 2, 2020, by and between MPC, the MPC subsidiaries party thereto and 7-Eleven, Inc.

8-K

2.1

8/3/2020

001-35054

2.6

Amendment to Purchase and Sale Agreement, dated as of October 16, 2020, by and among MPC, the MPC subsidiaries party thereto and 7-Eleven, Inc.

10-K

2.7

2/26/2021

001-35054

10.1

Marathon Petroleum Executive Deferred Compensation Plan, effective January 1, 2021

10-K

10.73

2/26/2021

001-35054

10.2

Marathon Petroleum Executive Deferred Compensation Plan Adoption Agreement, effective January 1, 2021

10-K

10.74

2/26/2021

001-35054

3.1

Restated Certificate of Incorporation of MPC, dated October 1, 2018

8-K

3.2

10/1/2018

001-35054

3.2

Amended and Restated Bylaws of MPC dated February 27, 2019

10-K

3.2

2/28/2019

001-35054

31.1

Certification of Chief Executive Officer pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934

31.2

Certification of Chief Financial Officer pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350

32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350

101.INS

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded with the Inline XBRL document.

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document.

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

† The exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be provided to the Securities and Exchange Commission upon request.

Incorporated by Reference
Filed
Herewith

Furnished
Herewith
Exhibit
Number
Exhibit Description Form Exhibit
Filing
Date

SEC File
No.

2.1*
Agreement and Plan of Merger, dated as of April 29, 2018, by and among MPC, Andeavor, Mahi Inc. and Mahi LLC
8-K 2.1 4/30/2018 001-35054
2.2
Amendment to Agreement and Plan of Merger, dated as of July 3, 2018, by and among Andeavor, MPC, Mahi Inc. and Mahi LLC
S-4/A 2.2 7/5/2018 333-225244
2.3
Second Amendment to Agreement and Plan of Merger, dated as of September 18, 2018, by and among Andeavor, MPC, Mahi Inc. and Mahi LLC
8-K 2.1 9/18/2018 001-35054
2.4 *
Agreement and Plan of Merger, dated as of May 7, 2019, by and among Andeavor Logistics LP, Tesoro Logistics GP, LLC, MPLX LP, MPLX GP LLC and MPLX MAX LLC.
8-K 2.1 5/8/2019 001-35054
3.1
Restated Certificate of Incorporation of MPC, dated October 1, 2018
8-K 3.2 10/1/2018 001-35054
3.2
Amended and Restated Bylaws of MPC dated February 27, 2019
10-K 3.2 2/28/2019 001-35054
4.1
Ninth Supplemental Indenture, dated as of April 27, 2020, by and between the Company and The Bank of New York Mellon Trust Company, N.A., as Trustee (including Form of Notes)
8-K 4.1 4/27/2020 001-35054
10.1
364-Day Revolving Credit Agreement, dated as of April 27, 2020, by and among Marathon Petroleum Corporation, as borrower, JPMorgan Chase Bank, N.A., as administrative agent, each of JPMorgan Chase Bank, N.A., Citibank, N.A.(“Citi”), Mizuho Bank, Ltd. (“Mizuho”), Barclays Bank PLC, MUFG Union Bank, N.A., Royal Bank of Canada and TD Securities (USA) LLC, as joint lead arrangers and bookrunners, Citi and Mizuho, as syndication agents, and the other agents and lenders that are parties thereto
8-K 10.1 4/27/2020 001-35054
10.2
Form of 2020 Officer RSU Award Agreement
X
10.3
Form of 2020 Officer Stock Option Award Agreement
X
10.4
Form of 2020 Officer Performance Unit Award Agreement 2020 - 2022 Performance Cycle
X
10.5
Form of 2020 MPLX LP Phantom Unit Award Agreement - MPC Officer
X
10.6
Form of MPLX LP Performance Unit Award Agreement 2020-2022 Performance Cycle - MPC Officer
X
31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934
X
31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934
X
32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350
X
32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350
X
101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded with the Inline XBRL document.
101.SCH Inline XBRL Taxonomy Extension Schema Document. X
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. X
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. X
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. X
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. X
104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


*	Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Marathon Petroleum Corporation hereby undertakes to furnish supplementally a copy of any omitted schedule upon request by the SEC.

~~Table of Contents~~

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


May 6, 2021			MARATHON PETROLEUM CORPORATION

~~May 7, 2020~~			~~MARATHON PETROLEUM CORPORATION~~
By:
	~~By:~~	/s/ John J. Quaid
				John J. Quaid Senior Vice President and Controller



		Page
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
CONSOLIDATED STATEMENTS OF INCOME		3
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME		4
CONSOLIDATED BALANCE SHEETS		5
CONSOLIDATED STATEMENTS OF CASH FLOWS		6
CONSOLIDATED STATEMENTS OF EQUITY AND REDEEMABLE NONCONTROLLING INTEREST		78
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS		89
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		2829
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		5251
ITEM 4. CONTROLS AND PROCEDURES		5352

PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS		5453
ITEM 1A. RISK FACTORS		5554
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		5654
ITEM ~~5. OTHER INFORMATION~~6. EXHIBITS		5655
~~ITEM 6. EXHIBITS~~SIGNATURES		5756
~~SIGNATURES~~	58



(Millions of dollars, except share data)	March 31, 2020			December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	1,690		$	1,527
Receivables, less allowance for doubtful accounts of $18 and $17, respectively	5,583			7,479
Inventories	7,445			10,243
Other current assets	975			921
Total current assets	15,693			20,170
Equity method investments	5,656			6,898
Property, plant and equipment, net	45,333			45,615
Goodwill	12,710			20,040
Right of use assets	2,562			2,459
Other noncurrent assets	4,363			3,374
Total assets	$	86,317		$	98,556
Liabilities
Current liabilities:
Accounts payable	$	8,106		$	11,623
Payroll and benefits payable	1,107			1,126
Accrued taxes	1,098			1,186
Debt due within one year	1,710			711
Operating lease liabilities	630			604
Other current liabilities	918			897
Total current liabilities	13,569			16,147
Long-term debt	29,899			28,127
Deferred income taxes	5,772			6,392
Defined benefit postretirement plan obligations	1,703			1,643
Long-term operating lease liabilities	1,949			1,875
Deferred credits and other liabilities	1,229			1,265
Total liabilities	54,121			55,449
Commitments and contingencies (see Note 22)
Redeemable noncontrolling interest	968			968
Equity
MPC stockholders’ equity:
Preferred stock, no shares issued and outstanding (par value $0.01 per share, 30 million shares authorized)	—			—
Common stock:
Issued – 979 million and 978 million shares (par value $0.01 per share, 2 billion shares authorized)	10			10
Held in treasury, at cost – 329 million and 329 million shares	(15,145		)	(15,143		)
Additional paid-in capital	33,169			33,157
Retained earnings	6,380			15,990
Accumulated other comprehensive loss	(326		)	(320		)
Total MPC stockholders’ equity	24,088			33,694
Noncontrolling interests	7,140			8,445
Total equity	31,228			42,139
Total liabilities, redeemable noncontrolling interest and equity	$	86,317		$	98,556



(In millions)	Income Statement Line	Impairment
Goodwill	Impairment expense	$	7,330
Equity method investments	Income (loss) from equity method investments	1,315
Long-lived assets	Impairment expense	492
Total impairments		$	9,137



(In millions)	Refining & Marketing			Retail		Midstream			Total
Balance at January 1, 2020	$	5,572		$	4,951	$	9,517		$	20,040
Impairments	(5,516		)	—		(1,814		)	(7,330		)
Transfers	(56		)	—		56			—
Balance at March 31, 2020	$	—		$	4,951	$	7,759		$	12,710



	December 31, 2019
	Fair Value Hierarchy
(In millions)	Level 1		Level 2		Level 3		Netting and Collateral^(a)			Net Carrying Value on Balance Sheet^(b)		Collateral Pledged Not Offset
Assets:
Commodity contracts	$	57	$	6	$	—	$	(55	)	$	8	$	73
Liabilities:
Commodity contracts	$	95	$	11	$	—	$	(106	)	$	—	$	—
Embedded derivatives in commodity contracts	—		—		60		—			60		—



(In millions, after-tax)
Blended crack spread sensitivity^(a)(per $1.00/barrel change)	$	910
Sour differential sensitivity^(b) (per $1.00/barrel change)	420
Sweet differential sensitivity^(c) (per $1.00/barrel change)	420
Natural gas price sensitivity^(d) (per $1.00/MMBtu)	325



	Capital Investment Plan
(In millions)	Revised 2020 Outlook		Original 2020 Guidance		Reduction
MPC, excluding MPLX
Refining & Marketing	$	1,300	$	1,550	$	(250	)
Retail	300		550		(250		)
Midstream - Other	230		300		(70		)
Corporate and Other	120		200		(80		)
Total MPC, excluding MPLX	$	1,950	$	2,600	$	(650	)

Midstream - MPLX	$	1,050	$	1,750	$	(700	)



(In millions)	Fair Value as of March 31, 2020^(a)		Change in Fair Value^(b)		Change in Net Income for the Three Months Ended March 31, 2020^(c)
Long-term debt
Fixed-rate	$	22,289	$	1,772	n/a
Variable-rate	3,751		n/a		8



Period	Total Number of Shares Purchased^(a)	Average Price Paid per Share^(b)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs^(c)
01/01/2020-01/31/2020	—	$	—	—	$	2,954,604,016
02/01/2020-02/29/2020	1,572	53.37		—	2,954,604,016
03/01/2020-03/31/2020	22,722	46.95		—	2,954,604,016
Total	24,294	47.37		—