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08/05/2021

Marathon Petroleum Moves on From Speedway Sale

The company will see after-tax proceeds of $17.2 billion from the transaction.
Melissa Kress
Executive Editor
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Marathon Petroleum Corp. President and CEO Michael Hennigan
Marathon Petroleum Corp. President & CEO Michael Hennigan

FINDLAY, Ohio — Marathon Petroleum Corp. (MPC) marked several strategic highlights during the second quarter of 2021, including closing the sale of Speedway LLC.

On May 14, the company officially handed over the Enon, Ohio-based convenience store chain to Irving, Texas-based 7-Eleven Inc. for $21 billion.

"The close of the Speedway sale marked a significant milestone in our ongoing commitment to strengthen the competitive position of our portfolio," MPC Chief Financial Officer Maryann Mannen said during the company's second-quarter earnings call, held Aug. 4.

According to Mannen, the after-tax proceeds from the sale will be $17.2 billion — higher than MPC's initial $16.5 billion estimate.

Since the close of the transaction, MPC reduced structural debt by $2.5 billion and purchased approximately $1 billion of stock. It is now starting to take the next steps to complete a $9 billion return of capital over the next 12 to 16 months.

MPC is making progress on its renewable initiatives as well. Its Dickinson, N.D., renewable diesel plant reached design capacity during the second quarter, according to MPC President and CEO Michael Hennigan. The plant is the second-largest renewable diesel facility in the United States and has a full design capacity of roughly 180 million gallons per year.

MPC is also moving forward with the engineering and permitting process to convert its Martinez, Calif., oil refinery to a renewable diesel facility.

"Based on our progress and discussion with feedstock suppliers, we're confident in the timeline we have set to begin producing renewable diesel in the second half of 2022 with approximately 260 million gallons per year of capacity," Hennigan said. "Additionally, we expect to reach full capacity of approximately 730 million gallons per year by the end of 2023."

Q2 2021 Results

For the three-month span of Q2, MPC reported net income of $8.5 billion, compared to net income of $9 million for the second quarter of 2020. Adjusted net income was $437 million, compared to an adjusted net loss of $868 million for Q2 2020.

In its refining and marketing segment, income from operations was $224 million, compared to a loss of $1.5 billion for the same period last year. This was an increase of $728 million when compared to the first quarter of 2021. The increase was driven primarily by higher refining margins, according to Mannen.

Midstream segment income from operations, which primarily reflects the results of MPLX LP, was $977 million in the second quarter of 2021, compared to $869 million for the second quarter of 2020. Segment adjusted EBITDA was $1.3 billion vs. $1.2 billion for the year-ago period. Midstream results for the quarter benefited from higher revenue and lower operating expenses, the company noted. 

Corporate expenses totaled $180 million in the second quarter of 2021, compared to $195 million in the second quarter of 2020. 

Findlay-based MPC operates the nation's largest refining system. Its marketing system includes branded locations across the U.S., including Marathon brand retail outlets. MPC also owns the general partner and majority limited partner interest in MPLX LP, a midstream company.

About the Author

Melissa Kress
Melissa Kress is Executive Editor of Convenience Store News. Read More