Debt | DEBT Our outstanding borrowings at December 31, 2020 and 2019 consisted of the following: (In millions) December 31, December 31, Marathon Petroleum Corporation: Commercial paper $ 1,024 $ — Senior notes 9,849 8,474 Notes payable 1 1 Finance lease obligations 634 574 MPLX LP: Bank revolving credit facility 175 — Term loan facility — 1,000 Senior notes 20,350 19,100 Finance lease obligations 11 19 Total debt $ 32,044 $ 29,168 Unamortized debt issuance costs (154) (134) Unamortized (discount) premium, net (306) (310) Amounts due within one year (2,854) (704) Total long-term debt due after one year $ 28,730 $ 28,020 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. MPC Senior Notes December 31, (In millions) 2020 2019 Marathon Petroleum Corporation: Senior notes, 3.400% due December 2020 $ — $ 650 Senior notes, 5.125% due March 2021 1,000 1,000 Senior notes, 5.375% due October 2022 — 337 Senior notes, 4.500% due May 2023 1,250 — Senior notes, 4.750% due December 2023 614 614 Senior notes, 5.125% due April 2024 241 241 Senior notes, 3.625% due September 2024 750 750 Senior notes, 4.700% due May 2025 1,250 — Senior notes, 5.125% due December 2026 719 719 Senior notes, 3.800% due April 2028 496 496 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, 4.500% due April 2048 498 498 Andeavor senior notes, 3.800% - 5.375% due 2022 - 2048 331 469 Senior notes, 5.000%, due September 2054 400 400 Total $ 9,849 $ 8,474 On April 27, 2020, we issued $2.5 billion aggregate principal amount of senior notes in a public offering, consisting of $1.25 billion aggregate principal amount of 4.500% unsecured senior notes due May 2023 and $1.25 billion aggregate principal amount of 4.700% unsecured senior notes due May 2025. MPC used the net proceeds from this offering to repay amounts outstanding under its five-year revolving credit facility. On October 1, 2020, all of the $475 million outstanding aggregate principal amount of 5.375% senior notes due October 2022, including the portion of such notes for which Andeavor was the obligor, were redeemed at a price equal to par. On November 15, 2020, all of the $650 million outstanding aggregate principal amount of 3.400% senior notes due December 2020 were redeemed at a price equal to par. Interest on each series of senior notes is payable semi-annually in arrears. The MPC senior notes are unsecured and unsubordinated obligations of MPC and rank equally with all of MPC’s other existing and future unsecured and unsubordinated indebtedness. The MPC senior notes are non-recourse and structurally subordinated to the indebtedness of our subsidiaries, including the outstanding indebtedness of Andeavor, MPLX and ANDX. The Andeavor senior notes are unsecured, unsubordinated obligations of Andeavor and are non-recourse to MPC and any of MPC’s subsidiaries other than Andeavor. MPLX Term Loan Facility The $1.0 billion of outstanding borrowings under the MPLX term loan facility was repaid during 2020 with net proceeds from the issuance of MPLX senior notes discussed below. MPLX Senior Notes December 31, (In millions) 2020 2019 MPLX LP: Floating rate notes due September 2021 $ — $ 1,000 Floating rate notes due September 2022 1,000 1,000 Senior notes, 6.250% due October 2022 — 266 Senior notes, 3.500% due December 2022 486 486 Senior notes, 3.375% due March 2023 500 500 Senior notes, 4.500% due July 2023 989 989 Senior notes, 6.375% due May 2024 — 381 Senior notes, 4.875% due December 2024 1,149 1,149 Senior notes, 5.250% due January 2025 708 708 Senior notes, 4.000% due February 2025 500 500 Senior notes, 4.875% due June 2025 1,189 1,189 MarkWest senior notes, 4.500% - 4.875% due 2023 - 2025 23 23 Senior notes, 1.750% due March 2026 1,500 — Senior notes, 4.125% due March 2027 1,250 1,250 Senior notes, 4.250% due December 2027 732 732 Senior notes, 4.000% due March 2028 1,250 1,250 Senior notes, 4.800% due February 2029 750 750 Senior notes, 2.650% due August 2030 1,500 — Senior notes, 4.500% due April 2038 1,750 1,750 Senior notes, 5.200% due March 2047 1,000 1,000 Senior notes, 5.200% due December 2047 487 487 ANDX senior notes, 3.500% - 5.250% due 2022 - 2047 87 190 Senior notes, 4.700% due April 2048 1,500 1,500 Senior notes, 5.500% due February 2049 1,500 1,500 Senior notes, 4.900% due April 2058 500 500 Total $ 20,350 $ 19,100 2020 Activity On August 18, 2020, MPLX issued $3.0 billion aggregate principal amount of senior notes in a public offering, consisting of $1.5 billion aggregate principal amount of 1.750% senior notes due March 2026 and $1.5 billion aggregate principal amount of 2.650% senior notes due August 2030. The net proceeds were used to repay $1.0 billion of outstanding borrowings under the MPLX term loan agreement, to repay the $1.0 billion aggregate principal amount of floating rate senior notes due September 2021, to redeem all of the $300 million aggregate principal amount of MPLX’s 6.250% senior notes due October 2022 and to redeem the $450 million aggregate principal amount of 6.375% senior notes due May 2024, including the portion of such notes issued by ANDX. The remaining net proceeds were used for general business purposes. On December 29, 2020, MPLX announced the redemption of 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. The notes were redeemed on January 15, 2021 at a price equal to 102.625% of the principal amount. These notes are included in long-term debt due within one year in our consolidated balance sheet as of December 31, 2020. 2019 Activity On September 9, 2019, MPLX issued $2.0 billion aggregate principal amount of floating rate senior notes in a public offering, consisting of $1.0 billion aggregate principal amount of notes due September 2021 and $1.0 billion aggregate principal amount of notes due September 2022. Net proceeds from the issuance of the floating rate senior notes were used to repay MPLX’s existing indebtedness and/or for general business purposes. The interest rate applicable to the floating rate senior notes due September 2021 is LIBOR plus 0.9% per annum while the interest rate applicable to the floating rate senior notes due September 2022 is LIBOR plus 1.1% per annum. Interest is payable in March, June, September and December, commencing on December 9, 2019. Both series of floating rate notes are callable, in whole or in part, at par plus accrued and unpaid interest at any time on or after September 10, 2020. In connection with MPLX’s acquisition of ANDX on July 30, 2019, MPLX assumed ANDX’s outstanding senior notes, which had an aggregate principal amount of $3.75 billion, with interest rates ranging from 3.500% to 6.375% and maturity dates ranging from 2019 to 2047. On September 23, 2019, approximately $3.06 billion aggregate principal amount of ANDX’s outstanding senior notes were exchanged for new unsecured senior notes issued by MPLX having the same maturity and interest rates as the ANDX senior notes in an exchange offer and consent solicitation undertaken by MPLX, leaving approximately $690 million aggregate principal of outstanding senior notes issued by ANDX. Of this, $500 million was related to the 5.500% unsecured senior notes due 2019. The principal amount of $500 million and accrued interest of $14 million was paid on October 15, 2019, which included interest through the payoff date. Interest on each series of MPLX fixed rate senior notes is payable semi-annually in arrears. The MPLX senior notes are unsecured, unsubordinated obligations of MPLX and are non-recourse to MPC and its subsidiaries other than MPLX and MPLX GP LLC, as the general partner of MPLX except as otherwise noted. Schedule of Maturities Principal maturities of long-term debt, excluding finance lease obligations, as of December 31, 2020 for the next five years are as follows: (In millions) 2021 $ 1,750 2022 1,500 2023 3,600 2024 2,376 2025 2,950 Available Capacity under our Facilities as of December 31, 2020 (Dollars in millions) Total Outstanding Outstanding Available Weighted Expiration MPC, excluding MPLX MPC 364-day bank revolving credit facility $ 1,000 $ — $ — $ 1,000 — September 2021 MPC 364-day bank revolving credit facility 1,000 — — 1,000 — April 2021 MPC bank revolving credit facility (a) 5,000 — 1 4,999 — October 2023 MPC trade receivables securitization facility (b) 750 — — 750 — July 2021 MPLX MPLX bank revolving credit facility (c) 3,500 175 — 3,325 1.36 July 2024 (a) Borrowed $4.225 billion and repaid $4.225 billion during the year ended December 31, 2020. (b) Borrowed $3.550 billion and repaid $3.550 billion during the year ended December 31, 2020. 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) Borrowed $3.815 billion and repaid $3.640 billion during the year ended December 31, 2020. MPC Revolving Credit Agreements On August 28, 2018, in connection with the Andeavor acquisition, MPC entered into a credit agreement with a syndicate of lenders providing for a $5.0 billion five-year revolving credit facility that expires in 2023. The five-year credit agreement became effective on October 1, 2018. On September 23, 2020, MPC entered into a 364-day credit agreement with a syndicate of lenders. This revolving credit agreement provides for a $1.0 billion unsecured revolving credit facility that matures in September 2021, and replaces a similar 364-day revolving credit agreement that expired on September 28, 2020. On April 27, 2020, MPC entered into an additional 364-day revolving credit agreement that provides for a $1.0 billion unsecured revolving credit facility that matures in April 2021. In February 2021, we elected to terminate this credit agreement. 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 has an option under its $5.0 billion five-year credit agreement to increase the aggregate commitments by up to an additional $1.0 billion, subject to, among other conditions, the consent of the lenders whose commitments would be increased. In addition, MPC may request up to two one-year extensions of the maturity date of the five-year credit agreement subject to, among other conditions, the consent of lenders holding a majority of the commitments, provided that the commitments of any non-consenting lenders will terminate on the then-effective maturity date. The five-year credit agreement includes sub-facilities for swing-line loans of up to $250 million and letters of credit of up to $2.2 billion (which may be increased to up to $3.0 billion upon receipt of additional letter of credit issuing commitments). Borrowings under the MPC credit agreements bear interest, at our election, at either the Adjusted LIBO Rate or the Alternate Base Rate (both as defined in the MPC credit agreements), plus an applicable margin. We are charged various fees and expenses under the MPC credit agreements, including administrative agent fees, commitment fees on the unused portion of the commitments and fees related to issued and outstanding letters of credit. The applicable margins to the benchmark interest rates and the commitment fees payable under the MPC credit agreements fluctuate based on changes, if any, to our credit ratings. The MPC credit agreements 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 the MPC credit agreements) of no greater than 0.65 to 1.00 as of the last day of each fiscal quarter. The covenants also restrict, among other things, our ability and/or the ability of certain of our subsidiaries to incur debt, create liens on assets or enter into transactions with affiliates. As of December 31, 2020, we were in compliance with the covenants contained in the MPC credit agreements. Trade Receivables Securitization Facility The trade receivables facility consists of our wholly-owned subsidiaries selling or contributing on an on-going basis all of their trade receivables, 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 borrowings under a subordinated note issued by TRC. TRC, in turn, has the ability to sell 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 qualifying trade receivables at any one time. To the extent that TRC retains an ownership interest in the receivables it has purchased or received under the facility, 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 are reflected as debt on our consolidated balance sheet. We 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, unused fees on the portion of unused commitments 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 receivables sale agreement contain 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. As of December 31, 2020, we were in compliance with the covenants contained in the receivables purchase agreement and receivables sale agreement. MPLX Credit Agreement Upon the completion of the merger of MPLX and ANDX on July 30, 2019, the MPLX bank revolving credit facility was amended and restated to increase the borrowing capacity to $3.5 billion and to extend the maturity date to July 30, 2024. The ANDX revolving and dropdown credit facilities were terminated and all outstanding balances were repaid and funded with borrowings under the amended and restated MPLX $3.5 billion bank revolving credit facility. The MPLX credit agreement includes letter of credit issuing capacity of up to approximately $300 million and swingline loan capacity of up to $150 million. The revolving borrowing capacity may be increased by up to an additional $1.0 billion, subject to certain conditions, including the consent of the lenders whose commitments would increase. Borrowings under the MPLX credit agreement bear interest, at MPLX’s election, at the Adjusted LIBO Rate or the Alternate Base Rate (both as defined in the MPLX credit agreement) plus an applicable 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 commitments 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 based on changes, if any, to MPLX’s credit ratings. The MPLX credit agreement 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, 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. The covenants also restrict, among other things, MPLX’s ability and/or the ability of certain of its subsidiaries to incur debt, create liens on assets and enter into transactions with affiliates. As of December 31, 2020, MPLX was in compliance with the covenants contained in the MPLX credit agreement. |