• Adjusted Earnings Per Share (EPS): $0.77 for Q4 2024; $9.51 for the full year.
• Adjusted EBITDA: $2.1 billion for Q4 2024; $11.3 billion for the full year.
• Refining and Marketing Segment Adjusted EBITDA Per Barrel: $2.03 for Q4 2024; $5.33 for the full year.
• Net Cash from Operations: $8.7 billion for the full year.
• Capital Return to Shareholders: $10.2 billion for the full year, with a 23% capital return yield.
• Quarterly Distribution Increase (MPLX): 12.5%, leading to an annualized cash distribution of $2.5 billion to MPC.
• Cash Flow from Operations (Excluding Working Capital Changes): $1.7 billion for Q4 2024; nearly $8.2 billion for the full year.
• Share Repurchases: Nearly $1.3 billion in Q4 2024.
• Refining Utilization: 92% for the full year; 94% in Q4 2024.
• Refining Operating Costs: $5.26 per barrel in Q4 2024.
• Crude Throughput Volumes (Guidance): Projected over 2.5 million barrels per day for Q1 2025.
• Turnaround Expense (Guidance): Approximately $450 million for Q1 2025; around $1.4 billion for the full year.
• Operating Costs (Guidance): Projected to be $5.70 per barrel for Q1 2025.

• Warning! GuruFocus has detected 4 Warning Signs with VRNS.

Release Date: February 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Marathon Petroleum Corp (NYSE:MPC) achieved its lowest company-wide OSHA recordable injury rate and strongest environmental performance in the last five years.
• The company delivered a Refining and Marketing segment adjusted EBITDA per barrel of $5.33, with refining utilization at 92% and commercial capture at 99%.
• MPLX increased its quarterly distribution by 12.5%, driving an annualized cash distribution to MPC of $2.5 billion.
• MPC's full-year net cash from operations was $8.7 billion, enabling a peer-leading capital return of $10.2 billion and a 23% capital return yield for shareholders.
• The company is well-positioned to leverage its fully integrated refining system and geographic diversification across the Gulf Coast, Mid-Con, and West Coast regions to perform in a dynamic market environment.

Negative Points

• Fourth-quarter refining margins exhibited typical seasonal weakness, impacting overall financial performance.
• The company faces potential cost increases if tariffs on heavy crude imports are imposed, which could affect its refining operations.
• There is uncertainty in the regulatory environment, particularly concerning the implementation of the 45Z tax credit and the expiration of the BTC, which could impact renewable diesel margins.
• MPC's turnaround expenses are projected to be high at $1.4 billion for the year, similar to the previous year, indicating ongoing maintenance costs.
• The company must navigate a challenging regulatory environment on the West Coast, which could impact its operations and profitability in that region.

Q & A Highlights

Q: Can you explain the factors behind the 119% capture rate in the Refining segment for the quarter? Was it seasonal or due to commercial strategies? A: Maryann Mannen, CEO, explained that the fourth quarter is typically strong for Marathon Petroleum, with historical averages around 115-116%. The company aims for a 100% capture rate, achieving 99% this year. Rick Hessling, Chief Commercial Officer, added that the export strategy and strong asphalt execution contributed significantly to the capture rate.

Q: Regarding MPLX's wellhead-to-water strategy, what are the assumptions behind the mid-teens returns, and will increased MPLX capital spending affect MPC's capital return outlook? A: Maryann Mannen, CEO, stated that the mid-teens returns are based on thorough evaluations of capital needs, market timing, and implementation costs. MPLX's solid balance sheet and distribution growth support MPC's capital return strategy, ensuring that increased MPLX spending does not impact MPC's ability to return capital through share buybacks.

Q: How is Marathon Petroleum preparing for potential tariffs on heavy crude imports, and what impact could this have on refining operations? A: Maryann Mannen, CEO, noted that while tariffs could increase costs, Marathon Petroleum's integrated system and commercial excellence would help mitigate margin impacts. Rick Hessling, Chief Commercial Officer, highlighted the company's logistics capabilities, allowing for flexibility in crude sourcing, such as shifting to Bakken or Rockies crudes, minimizing potential utilization impacts.

Q: With MPLX's distribution growth, could it eventually fund not only MPC's CapEx and dividends but also share buybacks? A: Maryann Mannen, CEO, confirmed that MPLX's durable cash flows and strategic investments support mid-single-digit growth, enabling distribution increases. This growing distribution provides MPC with flexibility for capital allocation, potentially increasing share repurchases in the future.

Q: What are the current demand trends in the US versus overseas markets, particularly for gasoline and diesel? A: Rick Hessling, Chief Commercial Officer, reported significant demand growth in Latin America and Europe, with diesel demand steady and a notable increase in gasoline export demand. This reflects robust overseas market conditions compared to the US.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.