Debt | Debt Our outstanding borrowings at December 31, 2016 and 2015 consisted of the following: December 31, (In millions) 2016 2015 Marathon Petroleum Corporation: Commercial paper $ — $ — 364-day bank revolving credit facility due July 2017 — — Trade receivables securitization facility due July 2019 — — Bank revolving credit facility due 2020 — — Term loan agreement due 2019 200 700 Senior notes, 2.700% due December 2018 600 600 Senior notes, 3.400% due December 2020 650 650 Senior notes, 5.125% due March 2021 1,000 1,000 Senior notes, 3.625%, due September 2024 750 750 Senior notes, 6.500%, due March 2041 1,250 1,250 Senior notes, 4.750%, due September 2044 800 800 Senior notes, 5.850% due December 2045 250 250 Senior notes, 5.000%, due September 2054 400 400 MPLX LP: MPLX term loan facility due 2019 250 250 MPLX bank revolving credit facility due 2020 — 877 MPLX senior notes, 5.500%, due February 2023 710 710 MPLX senior notes, 4.500%, due July 2023 989 989 MPLX senior notes, 4.875%, due December 2024 1,149 1,149 MPLX senior notes, 4.000%, due February 2025 500 500 MPLX senior notes, 4.875%, due June 2025 1,189 1,189 MarkWest senior notes, 4.500% - 5.500%, due 2023 - 2025 63 63 Capital lease obligations due 2016-2028 319 348 Total 11,069 12,475 Unamortized debt issuance costs (44 ) (51 ) Unamortized discount (a) (453 ) (499 ) Amounts due within one year (28 ) (29 ) Total long-term debt due after one year $ 10,544 $ 11,896 (a) Includes $420 million and $464 million discount as of December 31, 2016 and December 31, 2015 , respectively, related to the difference at the time of the acquisition between the fair value and the principal amount of the assumed MarkWest debt. The following table shows five years of scheduled debt payments. (In millions) 2017 $ 28 2018 630 2019 477 2020 683 2021 1,031 Commercial Paper On February 26, 2016, we established a commercial paper program that allows us to have a maximum of $2 billion in commercial paper outstanding, with maturities up to 397 days from the date of issuance. We do not intend to have outstanding commercial paper borrowings in excess of available capacity under our bank revolving credit facilities. During 2016 , we borrowed and repaid $1.26 billion under the commercial paper program. At December 31, 2016 , we had no amounts outstanding under the commercial paper program. MPC Bank Revolving Credit Facilities On July 20, 2016, we entered into a credit agreement with a syndicate of lenders to replace our existing MPC bank revolving credit facility due in 2017. The new agreement provides for a four -year $2.5 billion bank revolving credit facility (our “four-year revolving credit facility”) maturing on July 20, 2020 . Additionally, we entered into a 364 -day $1 billion bank revolving credit facility (our “364-day revolving credit facility” and together with our four-year revolving credit facility, our “revolving credit facilities”) maturing on July 19, 2017 . Our four-year revolving credit facility includes letter of credit issuing capacity of up to $2.0 billion and swingline loan capacity of up to $100 million . We may increase our borrowing capacity under our four-year revolving credit facility by up to an additional $500 million , subject to certain conditions including the consent of the lenders whose commitments would be increased. In addition, the maturity date of the four-year revolving credit facility may be extended for up to two additional one -year periods subject to the approval of lenders holding a majority of the commitments then outstanding, provided that the commitments of any non-consenting lenders will terminate on the then-effective maturity date. Borrowings under our revolving credit facilities bear interest, at our election, at either the Adjusted LIBO Rate (as defined in our revolving credit facilities) plus a margin or the Alternate Base Rate (as defined in our revolving credit facilities), plus a margin . We are charged various fees and expenses under our revolving credit facilities, including administrative agent fees, commitment fees on the unused portion of our borrowing capacity and fees related to issued and outstanding letters of credit. The applicable margin to the benchmark interest rates and the margin to the benchmark commitment fees payable under our revolving credit facilities fluctuate from time-to-time based on our credit ratings. Our revolving credit facilities contain certain representations and warranties, affirmative and restrictive covenants and events of default that we consider to be usual and customary for arrangements of this type, including a financial covenant that requires us to maintain a ratio of Consolidated Net Debt to Total Capitalization (each as defined in our revolving credit facility) of no greater than 0.65 to 1.00 as of the last day of each fiscal quarter. Other covenants, among other things, restrict our ability to incur debt, create liens on our assets or enter into transactions with affiliates. As of December 31, 2016 , we were in compliance with the covenants contained in the revolving credit facilities. There were no borrowings or letters of credit outstanding at December 31, 2016 . Trade Receivables Securitization Facility On July 20, 2016, we amended our trade receivables securitization facility (“trade receivables facility”) to, among other things, reduce the capacity from $1 billion to $750 million and to extend the maturity date to July 19, 2019 . The reduction in capacity reflects the lower refined product price environment. The trade receivables facility consists of one of our wholly-owned subsidiaries, Marathon Petroleum Company LP (“MPC LP”), selling or contributing on an on-going basis all of its trade receivables (including trade receivables acquired from Marathon Petroleum Trading Canada LLC, a wholly-owned subsidiary of MPC LP), together with all related security and interests in the proceeds thereof, without recourse, to another wholly-owned, bankruptcy-remote special purpose subsidiary, MPC Trade Receivables Company LLC (“TRC”), in exchange for a combination of cash, equity and/or a subordinated note issued by TRC to MPC LP. TRC, in turn, has the ability to finance its purchase of the receivables from MPC LP by selling undivided ownership interests in qualifying trade receivables, together with all related security and interests in the proceeds thereof, without recourse, to the purchasing group in exchange for cash proceeds. The trade receivables facility also provides for the issuance of letters of credit up to $750 million , provided that the aggregate credit exposure of the purchasing group, including outstanding letters of credit, may not exceed the lesser of $750 million or the balance of our eligible trade receivables at any one time. To the extent that TRC retains an ownership interest in the receivables it has purchased or received from MPC LP, such interest will be included in our consolidated financial statements solely as a result of the consolidation of the financial statements of TRC with those of MPC. The receivables sold or contributed to TRC are available first and foremost to satisfy claims of the creditors of TRC and are not available to satisfy the claims of creditors of MPC. TRC has granted a security interest in all of its assets to the purchasing group to secure its obligations under the Receivables Purchase Agreement. Proceeds from the sale of undivided percentage ownership interests in qualifying receivables under the trade receivables facility will be reflected as debt on our consolidated balance sheet. We will remain responsible for servicing the receivables sold to the purchasing group. TRC pays floating-rate interest charges and usage fees on amounts outstanding under the trade receivables facility, if any, and certain other fees related to the administration of the facility and letters of credit that are issued and outstanding under the trade receivables facility. The Receivables Purchase Agreement and Second Amended and Restated Receivables Sale Agreement include representations and covenants that we consider usual and customary for arrangements of this type. Trade receivables are subject to customary criteria, limits and reserves before being deemed to qualify for sale by TRC pursuant to the trade receivables facility. In addition, further purchases of qualified trade receivables under the trade receivables facility are subject to termination, and TRC may be subject to default fees, upon the occurrence of certain amortization events that are included in the Receivables Purchase Agreement, all of which we consider to be usual and customary for arrangements of this type. At December 31, 2016 , we were in compliance with the covenants contained in the Receivables Purchase Agreement and Second Amended and Restated Receivables Sale Agreement. During 2016 , we borrowed $430 million under the trade receivables securitization facility at an average interest rate of 1.4 percent and repaid all of these borrowings. There were no borrowings or letters of credit outstanding under the trade receivables facility at December 31, 2016 . As of December 31, 2016 , eligible trade receivables supported borrowings and letter of credit issuances of $684 million . MPC Term Loan Agreement On August 26, 2014 , we entered into a $700 million five -year senior unsecured term loan credit agreement (“term loan agreement”) with a syndicate of lenders to fund a portion of the purchase price for the acquisition of Hess’ Retail Operations and Related Assets. The term loan was drawn in full on September 24, 2014. The term loan agreement matures on September 24, 2019 and may be prepaid at any time without premium or penalty. We pay certain customary fees under the term loan agreement, including an annual administrative fee to the administrative agent. On September 30, 2016, we prepaid $500 million under the MPC term loan agreement with available cash on hand. As of December 31, 2016 , $200 million in borrowings was outstanding under the term loan agreement. Borrowings under the term loan agreement bear interest, at our election, at either the Adjusted LIBO Rate (as defined in the term loan agreement) plus a margin or the Alternate Base Rate (as defined in the term loan agreement) plus a margin . The applicable margin to the benchmark interest rates fluctuate from time-to-time based on our credit ratings. The borrowings under this facility during 2016 were at an average interest rate of 1.6 percent . The term loan agreement contains representation and warranties, affirmative and negative covenants and events of default that are substantially similar to those contained in our revolving credit facilities, which we consider to be usual and customary for an agreement of this type. Among other things, our term loan agreement 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 term loan agreement) of no greater than 0.65 to 1.00. As of December 31, 2016 , we were in compliance with the covenants contained in the term loan agreement. MPC Senior Notes On December 14, 2015, we completed a public offering of $1.5 billion in aggregate principal amount of unsecured senior notes (the “new MPC senior notes”), consisting of $600 million aggregate principal amount of 2.700% senior notes due 2018, $650 million aggregate principal amount of 3.400% senior notes due 2020 and $250 million aggregate principal amount of 5.850% senior notes due 2045. The net proceeds from the offering of the new MPC senior notes were $1.49 billion , after deducting underwriting discounts and offering expenses. We used a majority of the net proceeds from this offering to extinguish the $750 million aggregate principal amount of our 3.500% senior notes due 2016. During December 2015, we deposited $763 million with our senior notes trustee in full satisfaction of our obligations for the 3.500% senior notes due 2016. Under the terms of the senior notes indenture governing the 3.500% senior notes due 2016, our obligations related to these notes, including the payment of principal and interest to the maturity date, was discharged in full upon making such deposit. As a result, we recorded a loss on extinguishment of debt of $5 million . We used the remaining net proceeds from the new MPC senior notes for general corporate purposes. Interest on each series of the new MPC senior notes is payable semi-annually in arrears on June 15 and December 15, commencing on June 15, 2016. The new MPC senior notes are unsecured and unsubordinated obligations of MPC and rank equally with its other existing and future unsecured and unsubordinated indebtedness. The new MPC senior notes are structurally subordinate to the secured and unsecured debt of MPC’s subsidiaries, including all debt of MPLX and its subsidiaries. MPLX Credit Agreement MPLX is party to a credit agreement, dated as of November 20, 2014, and amended as of October 27, 2015 (“MPLX credit agreement”), providing for a $2 billion bank revolving credit facility with a maturity date of December 4, 2020 and an outstanding $250 million term loan facility with a maturity date of November 20, 2019 . The MPLX credit agreement includes letter of credit issuing capacity of up to $250 million and swingline loan capacity of up to $100 million . The revolving borrowing capacity under the MPLX credit agreement may be increased by up to an additional $500 million , subject to certain conditions, including the consent of the lenders whose commitments would increase. In addition, the maturity date of the bank revolving credit facility may be extended from time-to-time during its term to a date that is one year after the then-effective maturity date, subject to the approval of lenders holding the majority of the loans and commitments then outstanding, provided that the commitments of any non-consenting lenders will be terminated on the then-effective maturity date. The maturity date for the term loan facility may be extended for up to two additional one -year periods subject to the consent of the lenders holding a majority of the outstanding term loan borrowings, provided that the portion of the term loan borrowings held by any non-consenting lenders will continue to be due and payable on the then-effective maturity date. Borrowings under the MPLX credit agreement bear interest, at our election, at the Adjusted LIBO Rate or the Alternate Base Rate (as defined in the MPLX credit agreement) plus a specified margin. MPLX is charged various fees and expenses in connection with the agreement, including administrative agent fees, commitment fees on the unused portion of the borrowing capacity and fees with respect to issued and outstanding letters of credit. The applicable margins to the benchmark interest rates and the commitment fees payable under the MPLX credit agreement fluctuate from time-to-time based on MPLX’s credit ratings. The MPLX credit agreement includes 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, including a financial covenant that 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 for up to two fiscal quarters following certain acquisitions). Consolidated EBITDA is subject to adjustments for certain acquisitions completed and capital projects undertaken during the relevant period. Other covenants, among other things, restrict MPLX and certain of its subsidiaries from incurring debt, creating liens on its assets and entering into transactions with affiliates. As of December 31, 2016 , MPLX was in compliance with the covenants contained in the MPLX credit agreement. In connection with the closing of the MarkWest Merger, MarkWest’s existing credit facility was terminated and the approximately $943 million outstanding under MarkWest’s bank revolving credit facility was repaid with $850 million of borrowings under MPLX’s bank revolving credit facility and $93 million in cash. During 2016 , MPLX borrowed $434 million under the bank revolving credit facility, at an average interest rate of 1.9 percent , per annum, and repaid $1.31 billion of these borrowings. At December 31, 2016 , MPLX had no outstanding borrowings and $3 million of letters of credit outstanding under the bank revolving credit facility, resulting in total unused loan availability of $2 billion . At December 31, 2016 , MPLX had $250 million in borrowings outstanding under the term loan facility that bore interest at an average rate of 2.0 percent during 2016 . MPLX and MarkWest Senior Notes In connection with the MarkWest Merger, MPLX assumed MarkWest’s outstanding debt, which included $4.1 billion aggregate principal amount of senior notes outstanding. On December 22, 2015, approximately $4.04 billion aggregate principal amount of MarkWest’s outstanding senior notes were exchanged for an aggregate principal amount of approximately $4.04 billion of new unsecured senior notes issued by MPLX and cash of $1 for each $1,000 of principal amount exchanged in an exchange offer and consent solicitation undertaken by MPLX and MarkWest. The new MPLX senior notes consist of approximately $710 million aggregate principal amount of 5.500% senior notes due February 15, 2023, approximately $989 million aggregate principal amount of 4.500% senior notes due July 15, 2023, approximately $1.15 billion aggregate principal amount of 4.875% senior notes due December 1, 2024 and approximately $1.19 billion aggregate principal amount of 4.875% senior notes due June 1, 2025. Interest on each series of new MPLX senior notes is payable semi-annually in arrears on February 15 th and August 15 th of each year with respect to the 5.500% 2023 senior notes, on January 15 th and July 15 th of each year with respect to the 4.500% 2023 senior notes and on June 1 st and December 1 st of each year with respect to the 4.875% 2024 senior notes and the 4.875% 2025 senior notes. After giving effect to the exchange offer and consent solicitation referred to above, as of December 31, 2016, MarkWest had outstanding approximately $40 million aggregate principal amount of 5.500% senior notes due February 15, 2023, approximately $11 million aggregate principal amount of 4.500% senior notes due July 15, 2023, approximately $1 million aggregate principal amount of 4.875% senior notes due December 1, 2024 and approximately $11 million aggregate principal amount of 4.875% senior notes due June 1, 2025. Interest on each series of the MarkWest senior notes is payable semi-annually in arrears on February 15 th and August 15 th of each year with respect to the 5.500% 2023 senior notes, on January 15 th and July 15 th of each year with respect to the 4.500% 2023 senior notes and on June 1 st and December 1 st of each year with respect to the 4.875% 2024 senior notes and the 4.875% 2025 senior notes. The new MPLX notes are unsecured senior obligations of MPLX and rank equally in right of payment with all of its other senior unsecured debt and are structurally subordinate to the secured and unsecured debt of MPLX’s subsidiaries, including any debt of MarkWest that remains outstanding. On February 12, 2015, MPLX completed a public offering of $500 million aggregate principal amount of four percent unsecured senior notes due February 15, 2025 . The net proceeds, which were approximately $495 million after deducting underwriting discounts, were used to repay the amounts outstanding under the MPLX bank revolving credit facility, as well as for general partnership purposes. Interest is payable semi-annually in arrears on February 15 th and August 15 th of each year. |