Published
# Marathon Petroleum Corporation (MPC) — Business, Risks and Management's Discussion ## Business *From the annual report on Form 10-K for the fiscal year ended December 31, 2025, accession 0001510295-26-000009.* Marathon Petroleum is an integrated downstream and midstream energy company headquartered in Findlay, Ohio. It buys crude oil and other feedstocks, refines them at thirteen U.S. refineries with aggregate crude capacity of 2,986 thousand barrels per calendar day, and sells the resulting gasoline, distillates, NGLs and petrochemicals, propane, asphalt and heavy fuel oil to wholesale marketing customers, on the spot market, for export, and through long-term supply contracts with branded resellers. It does not produce any of its own crude oil. Alongside refining it runs one of the largest U.S. terminal networks and one of the largest private domestic fleets of inland petroleum product barges, and it is one of the largest U.S. producers and marketers of renewable diesel. Revenue is overwhelmingly refined-product revenue. Of $138.68 billion of total segment revenues in 2025, Refining & Marketing accounted for $124.31 billion, Midstream $11.53 billion (of which $5.91 billion was intersegment) and Renewable Diesel $2.83 billion; consolidated sales and other operating revenues after eliminating intersegment sales were $132.70 billion. Profitability, however, is far more balanced than revenue: 2025 segment adjusted EBITDA was $6.14 billion in Refining & Marketing, $6.75 billion in Midstream and negative $110 million in Renewable Diesel, $12.78 billion for the reportable segments in total. The company reports three segments: - **Refining & Marketing** refines crude and other feedstocks in the Gulf Coast, Mid-Continent and West Coast regions, purchases refined products and ethanol for resale, and distributes product using transportation, storage and marketing services supplied largely by the Midstream segment. It sells to wholesale customers domestically and internationally, on the spot market, to independent entrepreneurs who operate mainly Marathon-branded outlets, and under long-term supply contracts with direct dealers operating largely under the ARCO brand. As of December 31, 2025 there were 7,882 brand jobber outlets across 40 states, the District of Columbia and Mexico, plus long-term supply contracts covering 1,162 direct dealer locations concentrated in Southern California. Volumes marketed directly to end users were 2,449 thousand barrels per day in 2025, against 2,429 in 2024 and 2,385 in 2023. - **Midstream** gathers, transports, stores and distributes crude, refined products (renewable diesel included) and other hydrocarbon products, principally for Refining & Marketing; gathers, treats, processes and transports natural gas; and transports, fractionates, stores and markets NGLs. The segment mainly reflects MPLX LP, the large-cap master limited partnership formed in 2012 whose general partner MPC owns along with roughly 64 percent of the outstanding common units as of December 31, 2025. MPC also retains four Jones Act medium-range product tankers, three Jones Act 750 Series ATB vessels and interests in several crude and product pipeline systems. Long-term, fee-based commercial agreements move value between the two segments: Refining & Marketing paid MPLX $4.03 billion of fees in 2025, several of the agreements carrying minimum quarterly throughput, distribution and storage commitments, and some obliging MPC to pay for 100 percent of available capacity on certain marine and refining-logistics assets. - **Renewable Diesel** processes renewable feedstocks into renewable diesel and markets it. The wholly owned Dickinson, North Dakota plant can produce 184 million gallons a year; the 50/50 Martinez Renewables joint venture with Neste can produce 730 million gallons a year including pretreatment and reached full capacity in late 2024. Feedstock is supported by an aggregation facility in Cincinnati, a pre-treatment facility in Beatrice, Nebraska, and the Green Bison Soy Processing joint venture in Spiritwood, North Dakota (ADM 75 percent / MPC 25 percent), which supplies roughly 600 million pounds of refined soybean oil a year. Output generates federal RINs, 45Z tax credits and LCFS credits, which the company uses against its own Renewable Fuel Standard and low-carbon-fuel-standard obligations. The refining footprint by region: Gulf Coast, 1,248 mbpcd — Galveston Bay, Texas (631 mbpcd, the largest in the system after the 2023 South Texas Asset Repositioning project added 40 mbpcd, with a 1,055-megawatt cogeneration facility) and Garyville, Louisiana (617). Mid-Continent, 1,186 mbpcd — Catlettsburg, Kentucky (307), Robinson, Illinois (253), Detroit (146, the only refinery operating in Michigan), El Paso (133), St. Paul Park, Minnesota (105), Canton, Ohio (100), Mandan, North Dakota (72) and Salt Lake City (70). West Coast, 552 mbpcd — Los Angeles (365, the largest on the West Coast and a major CARB-fuels producer), Anacortes, Washington (119) and Kenai, Alaska (68). In 2025 the refineries processed 2,787 mbpd of crude and 202 mbpd of other charge and blendstocks, against 2,714 and 208 in 2024. Refinery-based asphalt capacity is 143 mbpcd. Refineries are linked by pipeline, terminal and barge so intermediates can be moved between them to lift yields and keep capacity utilised during partial shutdowns. Demand for gasoline, diesel and asphalt is seasonally stronger in spring and summer, so first- and fourth-quarter Refining & Marketing results are typically weaker than the second and third. The same seasonality applies to renewable diesel through agricultural activity, and Midstream sees weather- and travel-driven swings in gas and NGL demand. The company employed approximately 18,500 people full- and part-time at December 31, 2025, roughly 3,800 of them under collective bargaining agreements. The Marathon and ARCO trademarks are described as material to refining and marketing; patents and licences are not individually critical. History, where it shapes the present: MPC was incorporated in Delaware in 2009 and spun out of Marathon Oil on June 30, 2011. The 2018 Andeavor acquisition — roughly 239.8 million MPC shares valued at $19.8 billion plus $3.5 billion cash — added the Western and Mid-Continent scale that underpins today's geographic spread. The Speedway company-operated retail business was sold to 7-Eleven in May 2021 for $21.38 billion of cash proceeds ($17.22 billion after cash taxes), which is why MPC today reaches consumers through branded jobbers and direct dealers rather than owned stores, and which funded the return-of-capital programme that has run ever since. ## Risk factors *Condensed from the same annual report, accession 0001510295-26-000009.* **Refining margin volatility is the dominant risk.** Operating results, cash flow, asset carrying values and the ability to sustain buybacks and the dividend depend on realised refined-product margins, which management expects to stay volatile. Feedstock costs and product prices move independently under global and regional inventory levels, transportation infrastructure cost and availability, competitors' closures and capacity additions, natural gas and electricity costs, political instability and armed conflict, tariffs on imported crude and feedstocks, and weather. Feedstocks are typically bought weeks before the products made from them are sold, so price moves inside that window hit results directly. Sustained margin compression could force reduced runs, impairments of property, inventory or goodwill, and a re-cut of capital allocation including buybacks, capital spending and dividends. **Structural demand erosion in liquid transportation fuels.** Vehicle-emissions and fuel-efficiency rules, electric-vehicle mandates and consumer preference shifts may reduce demand and raise costs. California's Advanced Clean Cars II and Advanced Clean Trucks rules are currently unenforceable absent federal waivers and California has sued to reinstate them; NHTSA's revised light-duty standards have been challenged in court. Renewable-fuel and low-carbon-fuel programmes may themselves displace refined-product volumes. **Operating hazards and business interruption.** Scheduled and unscheduled turnarounds, explosions, fires, refinery and pipeline releases, product-quality incidents, power outages, severe weather, labour disputes and terrorism can cause injury, property damage, pollution and substantial loss; the company has experienced such incidents. Marine and waterway operations near sensitive waters carry OPA-90 and state-law exposure, and response contractors may be unavailable in an event. **Regulatory compliance cost, concentrated in California.** Environmental laws keep growing in number and complexity. California has extended its Cap-and-Invest programme through 2045, and SCAQMD Rule 1109.1 has required NOx reductions at the Los Angeles refinery phased through 2032 (Phases 1 and 2 done, over 80 percent of required reductions achieved, the remaining 20 percent due by 2032). Under SB X1-2 the California Energy Commission may set a maximum gross gasoline refining margin and penalise profits above it, and may regulate the timing of turnaround and maintenance activity; in August 2025 the CEC resolved not to act on a maximum margin for at least five years and to offer refiners a potential exemption if one is implemented before 2035. AB X2-1, signed October 2024, authorises the CEC to require minimum transportation-fuel inventories and resupply planning during maintenance. The company says it cannot predict the effect of full implementation, or of similar laws elsewhere. **RIN and credit price exposure.** As a producer of petroleum-based motor fuels MPC must blend renewable fuel or buy RINs, and buy LCFS credits where those programmes apply; prices are unpredictable, obligated volumes vary quarter to quarter, and there is no regulatory method for verifying most RINs sold on the open market, so invalid RINs could have to be replaced at cost and penalty. **Debt and financial risk.** Total debt for borrowed money and finance lease obligations was $33.31 billion at December 31, 2025, including $26.01 billion at MPLX and its subsidiaries. Credit-profile deterioration or a downgrade could raise borrowing costs, limit market access and, below investment grade, affect the ability to buy crude on an unsecured basis. Because crude payment terms run longer than the terms extended to product customers, MPC sits in a net payables position, so falling commodity prices consume working capital on a scale that matters given purchase volumes. The balance sheet carried $9.4 billion of goodwill and $2.7 billion of other intangibles at year end, with prior significant goodwill impairments on the record. **Competitive disadvantage against integrated producers.** Competitors that produce their own crude can better withstand depressed margins or feedstock shortages; MPC produces none. Its branded outlets and direct dealers compete with convenience chains, major-oil-affiliated sites and non-traditional fuel retailers such as supermarkets and club stores. **MPLX-specific risk flows through to MPC.** Midstream cash flow depends on continued drilling and production by producer customers, over which MPC has no control, and on commodity prices where compensation is commodity-based rather than fee-based. MPLX's unit price, distribution yield and cost of capital move with commodity volatility, which can constrain its growth programme and distributions. Publicly traded partnership tax treatment could be changed by legislation or interpretation, possibly retroactively. **Litigation and permit risk.** Governmental and other entities have filed climate-related suits against energy companies including MPC, seeking unspecified damages and abatement, and "greenwashing" and consumer-protection theories are being pressed. Private and government parties have also attacked operating permits and easements — the Dakota Access Pipeline, in which MPLX holds a minority interest, faces litigation seeking permanent shutdown, and part of the Tesoro High Plains Pipeline in North Dakota remains shut down after a right-of-way renewal delay, with trespass litigation ongoing. **Also named:** large capital projects subject to permitting, cost, labour and supply-chain delay between approval and startup; cybersecurity threats to information and operational technology systems, including ransomware, supply-chain and AI-enabled attacks, with prior incidents not material to date; expanding data-privacy regulation; new risks from integrating artificial intelligence into company processes; inflation and rising interest rates; reliance on third-party pipelines, railways and vessels, some of which are effectively the only route to or from certain refineries; severe weather, earth movement and chronic physical climate risk; operations outside the United States and worldwide political and economic developments; joint-venture partner reliance; incomplete insurance coverage; labour disruption, with roughly 700 represented California employees working past a January 31, 2026 expiry under agreements continued subject to 24-hour termination notice while successor agreements are negotiated; general-partner fiduciary-duty claims; Maritime Laws requiring 75 percent U.S.-citizen ownership of coastwise vessels, with the charter capping non-U.S. ownership at 23 percent; real property and tribal-land rights; and Delaware-forum and anti-takeover provisions in the governing documents. ## Management's discussion — fiscal year 2025 *From the same annual report, accession 0001510295-26-000009.* Net income attributable to MPC was $4.05 billion ($13.22 per diluted share) in 2025 against $3.45 billion ($10.08) in 2024 and $9.68 billion in 2023 — up $602 million, or $3.14 per diluted share, year over year. Income before income taxes was $7.02 billion against $5.96 billion. Reportable-segment adjusted EBITDA was $12.78 billion against $12.10 billion in 2024 and $19.81 billion in 2023, the 2023 comparison being the reminder of how far the cycle had already fallen before 2025. **What moved the consolidated result.** Total revenues and other income fell $5.19 billion, driven by a $6.17 billion decline in sales and other operating revenues as average refined-product sales prices fell $0.18 per gallon, or 8 percent, partly offset by 133 mbpd (4 percent) more product volume. Offsetting items on the revenue line: equity-method income up $574 million, largely a $484 million gain on the BANGL acquisition and a $254 million gain on the ethanol joint venture sale, against the absence of 2024's $151 million Whistler gain; net gain on asset disposals up $145 million, mainly the $159 million Rockies gain; and other income up $256 million, largely $253 million of legal settlements and higher RINs sales income, partly offset by lower insurance proceeds. Total costs and expenses fell $6.69 billion, principally $6.79 billion of lower cost of revenues on cheaper crude, with depreciation down $86 million as major refining assets became fully depreciated at the end of 2024, SG&A up $128 million (salaries and employee costs $88 million, contract services $39 million, insurance $24 million) and other taxes up $67 million on the absence of a 2024 property-tax appeal settlement of $49 million. Net interest and other financial costs rose $437 million on lower interest income after the 2024 liquidation of short-term investments, higher interest expense from increased MPLX borrowings, and non-service pension costs; capitalised interest was $100 million against $57 million. The combined income tax provision was $1.14 billion against $890 million, below the statutory rate mainly because of permanent benefits related to income attributable to noncontrolling interests. Noncontrolling interests took $236 million more, on higher MPLX net income. **Refining & Marketing.** Segment revenues fell $7.45 billion on the $0.18 per gallon price decline, partly offset by the volume gain; segment adjusted EBITDA rose $435 million to $6.14 billion on better per-barrel margins and higher volumes. Crude capacity utilisation was 94 percent and net throughput rose 67 mbpd. Refining & Marketing margin was $16.87 per barrel against $16.01. Management attributes roughly $300 million of the margin improvement to market indicators — higher crack spreads, partly offset by narrower sour and sweet crude differentials — and puts the net positive effect of company-specific factors (crude mix and cost, market structure, RIN prices in the crack spread, yields, feedstock variances, direct dealer fuel margin, and LIFO adjustments of $82 million in 2025 and $106 million in 2024) at approximately $1.0 billion of segment adjusted EBITDA. Purchased RIN expense rose to $1.33 billion from $1.07 billion on higher obligated volumes and RIN prices, partly offset by more RINs generated and acquired from Martinez Renewables; a small refinery exemption was granted for one refinery covering 50 percent of the 2024 compliance-year obligation, with an additional credit for the closed 2023 compliance year recognised outside the segments. Refining operating costs excluding depreciation were $6.10 billion, up $385 million on energy, maintenance and repair, and the absence of the 2024 property-tax settlement. Distribution costs excluding depreciation were $6.19 billion against $5.86 billion, including MPLX fees of $4.03 billion against $3.95 billion, up $0.19 per barrel on logistics fees including third-party marine, pipeline and terminalling. Planned turnaround costs rose $117 million, or $0.08 per barrel. **Midstream.** Segment adjusted EBITDA rose $206 million to $6.75 billion. Recent acquisitions contributed, chiefly $59 million from BANGL and $15 million from Whiptail, against $17 million lost to the Rockies divestiture; sales and operating revenues rose $540 million on higher rates and throughputs plus a $37 million non-recurring benefit on a customer agreement, partly offset by higher operating expense. **Renewable Diesel.** Segment revenues rose $726 million on 187 thousand gallons per day more volume, and segment adjusted EBITDA improved $40 million to negative $110 million as lower product margins were more than offset by better utilisation, higher regulatory benefit and more equity-method income. Renewable Diesel margin was $151 million against $186 million. **Portfolio moves during 2025.** MPLX sold its Rockies gathering and processing assets to a subsidiary of Harvest Midstream on November 12, 2025 for $980 million cash, a $159 million gain. It acquired 100 percent of Northwind Midstream on August 29, 2025 for $2.4 billion cash — sour gas gathering and treating in Lea County, New Mexico — funded from its $4.5 billion August 2025 senior notes issuance. On July 1, 2025 it bought the remaining 55 percent of BANGL, LLC for $703 million cash plus an earnout of up to $275 million tied to 2026–2029 EBITDA growth, recognising a $484 million gain and taking BANGL to 100 percent ownership. On March 11, 2025 it acquired San Juan basin gathering businesses from Whiptail Midstream for $235 million cash. Separately, on July 31, 2025 MPC sold its 49.9 percent interest in The Andersons Marathon Holdings for $427 million cash, derecognising a $173 million carrying value and booking a $254 million gain. Items not allocated to segments totalled $1.17 billion in 2025, including $897 million of disposal gains and the $253 million of legal settlements, against transaction costs on the Midstream deals. **Cash flow and capital.** Cash and equivalents were $3.67 billion at year end against $3.21 billion. Operating cash flow fell $412 million, an unfavourable $955 million working-capital swing outweighing better operating results; working capital was a net $485 million use of cash on lower energy prices. Investing activities used $5.87 billion, against $1.53 billion provided in 2024 when short-term investments were liquidated: property additions took $3.49 billion (from $2.53 billion), acquisitions $3.32 billion (Northwind $2.4 billion, BANGL $703 million, Whiptail $235 million), net investments $343 million, with $1.01 billion received on disposals. Financing used $1.92 billion, against $12.43 billion in 2024 — MPLX issued $6.5 billion of senior notes and repaid $1.70 billion, MPC issued $2.0 billion and repaid $1.250 billion; buybacks took $3.49 billion (from $9.19 billion in 2024 and $11.57 billion in 2023), dividends $1.14 billion at $3.73 per share (against $3.39 and $3.08), distributions to noncontrolling interests $1.51 billion and MPLX unit repurchases $400 million. **Liquidity, returns and the 2026 plan.** MPC liquidity excluding MPLX was $6.63 billion at December 31, 2025; MPLX liquidity was $5.64 billion. A commercial paper programme allows up to $2.0 billion outstanding, with nothing drawn at year end. MPC received $2.56 billion of limited partner distributions from MPLX in 2025 (2024: $2.27 billion) and held roughly 647 million units worth $34.55 billion at the December 31, 2025 close of $53.37. From January 2012 through December 31, 2025 the board had authorised $60.05 billion of repurchases and $55.67 billion had been executed, leaving $4.38 billion. The 2026 capital investment outlook is approximately $1.5 billion for MPC excluding MPLX — Refining & Marketing about $1.41 billion of it, including roughly $710 million of refining value-enhancing projects, $250 million of marketing investment and about $450 million of refining maintenance capital, with named high-return work at Galveston Bay, Robinson, El Paso and Garyville — plus approximately $2.7 billion at MPLX net of reimbursements, of which about $2.4 billion is growth capital aimed at the Permian-to-Gulf Coast chain, long-haul pipelines and new gas processing in the Marcellus and Permian. No major Renewable Diesel spending is forecast for 2026. At year end MPC held purchase obligations for crude, NGLs and renewable feedstocks of $12.04 billion ($10.15 billion due within twelve months) and crude transportation obligations of $8.87 billion; outstanding senior notes totalled $32.45 billion in principal with $2.25 billion due within twelve months. Goodwill of approximately $9.35 billion sat in five reporting units, all tested qualitatively as of November 30, 2025; equity-method investments were $6.80 billion. Management's stated framing for the year: 2025 Refining & Marketing results reflected higher realised margins on stable demand and U.S. gasoline and distillate inventories at or below five-year averages, and the company expects global demand growth to outpace net refining capacity additions and rationalisations through the end of the decade, supporting a constructive environment for U.S. refiners. Midstream growth is credited to the expansion of the Permian-to-Gulf Coast gas and NGL value chains through Northwind and BANGL, long-haul pipeline progress and Gulf Coast fractionation and export expansion. ## Current quarter — three and six months ended June 30, 2026 *From the quarterly report on Form 10-Q, accession 0001510295-26-000061, and the second-quarter 2026 results release furnished on Form 8-K, accession 0001510295-26-000060.* The quarter was a step change in refining margin, not in volume. Net income attributable to MPC was $5.14 billion, or $17.73 per diluted share, against $1.22 billion and $3.96 a year earlier; for the six months it was $5.65 billion, or $19.30 per diluted share, against $1.14 billion and $3.68. Adjusted EBITDA was $8.46 billion for the quarter against $3.29 billion, and $11.22 billion for the half against $5.26 billion. Reportable-segment adjusted EBITDA was $8.69 billion for the quarter ($3.51 billion a year earlier) and $11.70 billion for the half ($5.68 billion). Management attributes the Refining & Marketing improvement to higher realised margins on stable demand and higher product prices driven by global crude supply disruptions from intensifying regional conflicts, particularly in the Middle East; the risk-factor language in the filing now names the U.S.–Iran conflict specifically as a source of pricing volatility and supply disruption. **Consolidated.** Revenues and other income rose $18.24 billion in the quarter to $52.34 billion, essentially all of it an $18.2 billion rise in sales and other operating revenues on a $1.12 per gallon increase in Refining & Marketing average refined-product sales prices and 7 mbpd more product volume, with equity-method income up $44 million (Martinez Renewables $21 million, Midstream investments $14 million). Costs and expenses rose $13.11 billion, almost entirely $13.04 billion of higher cost of revenues on crude and finished-product purchases. The quarterly tax provision was $1.44 billion against $268 million, below the statutory rate on permanent benefits related to noncontrolling interests and cross-border effects, partly offset by state taxes. Over six months, revenues and other income rose $20.95 billion, with sales up $20.88 billion on a $0.66 per gallon price increase and 55 mbpd more volume, and other income up $94 million on roughly $75 million of clean fuel production tax credits — $32 million of which related to 2025 activity, recognised after February 2026 proposed guidance clarified the 45Z qualification criteria. Six-month costs rose $15.11 billion, including $14.94 billion of cost of revenues and $111 million more SG&A (employee costs $56 million, fair-value remeasurement of performance-based stock compensation $45 million). Six-month net interest and other financial costs rose $87 million on higher MPLX borrowings, partly offset by higher interest income and capitalised interest. Noncontrolling interests took $74 million less over six months on lower MPLX net income. **Refining & Marketing.** Segment adjusted EBITDA was $6.66 billion for the quarter against $1.89 billion, or $24.84 per barrel against $6.79, and $8.03 billion for the half against $2.38 billion, or $15.31 per barrel against $4.45. Segment revenues rose $17.47 billion in the quarter and $20.31 billion over six months. Refining & Marketing margin was $36.33 per barrel against $17.58 in the quarter and $27.24 against $15.57 over six months, primarily on higher crack spreads in all regions. Management estimates market indicators alone worth roughly $4 billion of quarterly margin improvement and about $5.5 billion over six months, with company-specific factors adding approximately $800 million of segment adjusted EBITDA in the quarter and about $400 million over the half. Crude capacity utilisation was 94 percent on total throughput of 2.9 million barrels per day, but net refinery throughput fell 116 mbpd in the quarter and 57 mbpd over six months on heavier planned turnaround activity concentrated in the Mid-Continent. Purchased RIN expense inside the margin was $683 million against $314 million in the quarter and $1.28 billion against $668 million over six months, on higher RIN costs and blending requirements. Refining operating costs excluding depreciation rose $45 million, or $0.38 per barrel, in the quarter to $5.72 per barrel (from $5.34), principally on maintenance and engineered projects during turnarounds and lower utilisation, partly offset by cheaper energy; over six months they rose $172 million, or $0.44 per barrel. Distribution costs excluding depreciation rose $38 million ($0.36 per barrel) in the quarter on rate increases net of lower third-party marine cost, and $141 million ($0.38 per barrel) over six months. Planned turnaround costs rose $25 million ($0.13 per barrel) in the quarter to $275 million, and $101 million ($0.21 per barrel) over six months. **Midstream.** Segment adjusted EBITDA was $1.78 billion for the quarter against $1.64 billion, up $137 million on $295 million more sales and operating revenue from higher rates and throughputs, including growth from equity affiliates and acquisitions, partly offset by the divestiture of non-core gathering and processing assets. Over six months it rose only $15 million to $3.38 billion: $209 million of revenue growth was largely absorbed by the divestiture, the absence of a $37 million non-recurring customer-agreement benefit booked in the first quarter of 2025, and $53 million more in derivative losses. **Renewable Diesel.** Segment adjusted EBITDA was $258 million for the quarter against negative $19 million, a $277 million swing as Renewable Diesel margin went to $321 million from $49 million on improved regulatory credit values; revenues rose $620 million on higher prices and 91 thousand gallons per day more volume. Over six months adjusted EBITDA rose $357 million to $296 million, with margin of $454 million against $75 million, revenue up $573 million and volume down 44 thousand gallons per day because of planned turnaround work at Martinez Renewables in the first quarter. **Corporate and unallocated.** Corporate expense was $256 million for the quarter against $243 million, and rose $77 million over six months on $25 million of performance-based stock compensation remeasurement driven by recent share performance, $23 million of environmental remediation expense tied to historical operations at the Martinez refinery and $18 million of employee costs. The only item not allocated to segments in the half was the recognition of 2025 clean fuel production tax credits following the February 2026 proposed guidance on 45Z. **Strategic Petroleum Reserve exchanges.** In the first and second quarters of 2026 the Department of Energy accepted MPC bids to exchange crude with the SPR: the SPR is to deliver approximately 22 million barrels to MPC across 2026, and MPC is to return approximately 27 million barrels from April 2027 through July 2029. Under the contracts in force, MPC took 12.1 million barrels during the second quarter, carrying an obligation to return 14.7 million barrels between April 2027 and September 2028; the return obligation is carried as a Level 2 liability priced off forward crude indices with location and grade differentials from negative $2.84 to $4.19 per barrel. Letters of credit totalling $1.626 billion were outstanding at June 30, 2026 under the trade receivables facility to secure DOE crude purchase contracts. **Cash, liquidity and capital return.** Consolidated cash and equivalents were approximately $7.77 billion at June 30, 2026 against $3.67 billion at December 31, 2025, including $1.0 billion held at MPLX. Operating cash flow rose $8.87 billion over six months on better results and a $4.23 billion favourable working-capital comparison, working capital itself being a $3.19 billion source of cash in the half against a $1.04 billion use a year earlier. Investing activities used $2.44 billion against $1.90 billion, with property additions up $741 million. Financing used $4.91 billion against $2.22 billion: MPLX issued $1.5 billion of senior notes in February 2026 ($1.0 billion of 5.300 percent notes due 2036 at 99.678 and $500 million of 6.100 percent notes due 2056 at 98.453) and repaid $1.5 billion of 1.750 percent notes at maturity in March 2026; $3.86 billion was borrowed and repaid under the commercial paper programme, leaving nothing outstanding. Buybacks took $3.28 billion in the half against $1.84 billion. MPC liquidity excluding MPLX was $11.7 billion and MPLX liquidity $5.0 billion at June 30, 2026, both companies investment grade at Baa2/BBB/BBB with stable outlooks. On April 7, 2026 MPC replaced its revolving credit facility with a new five-year $5.0 billion facility maturing April 2031 (swing-line sub-facility $300 million, letters of credit $2.0 billion), and MPLX replaced its own with a five-year facility maturing April 2031 whose capacity rose from $2.0 billion to $2.5 billion. On April 30, 2026 MPC entered into an amended and restated trade receivables securitization facility providing committed borrowing and letter-of-credit issuance capacity of $100 million plus uncommitted capacity of up to $1.9 billion, with the term of the facility extended to April 30, 2029; the facility permits letters of credit to be issued in excess of the committed capacity at the discretion of the issuing banks, which is the basis on which the letters of credit securing the Department of Energy crude purchase contracts stand well above the committed amount. On May 5, 2026 the board approved an additional $5.0 billion repurchase authorisation, leaving $6.13 billion available at June 30, 2026 against cumulative authorisations of $65.05 billion and $58.92 billion repurchased since January 2012. Over $2.8 billion of capital was returned in the quarter. MPC held roughly 647 million MPLX units worth $36.47 billion at the June 30, 2026 close of $56.33, and received $1.39 billion of limited partner distributions in the half against $1.24 billion. MPLX repurchased about 2 million units for $100 million in the half, with $1.02 billion of authorisation left. **Project execution and outlook.** The El Paso yield improvement (an FCC and alkylation upgrade supporting specialty gasolines for the El Paso, Phoenix and Mexico markets) and the Robinson product flexibility project (about 10 mbpd of incremental jet fuel) were placed in service during the second quarter, following Garyville jet flexibility in the first. Still to come by year-end 2027: a 90 mbpd Galveston Bay distillate hydrotreater, Garyville feedstock optimisation adding 30 mbpd of crude throughput, and Garyville product export flexibility adding 10 mbpd of premium export gasoline. MPLX plans to direct over 90 percent of organic growth capital at natural gas and NGL infrastructure in the Permian and Marcellus at expected mid-teens returns, and the company says that growth strategy is expected to support 12.5 percent annual distribution growth in 2026 and 2027. Named projects include Secretariat I (200 MMcf/d Delaware Basin processing, in service April 2026), Harmon Creek III (300 MMcf/d plus a 40 mbpd de-ethanizer in the Marcellus), the Bay Runner and Bay Runner Twin pipelines (up to 5.3 Bcf/d, 30 percent owned), the Titan Complex expansion (150 to over 400 MMcf/d of sour gas treating), the BANGL pipeline expansion (250 to 300 mbpd), Blackcomb (2.5 Bcf/d, 34 percent), Traverse (2.5 Bcf/d, 34 percent, second half 2027), two 150 mbpd Gulf Coast fractionators near the Galveston Bay refinery (2028 and 2029), a 400 mbpd Gulf Coast LPG export terminal joint venture at the Port of Texas City (50 percent, 2028), a Marcellus gathering expansion, Eiger Express (3.7 Bcf/d, 22 percent, mid-2028) and Secretariat II (300 MMcf/d, second half 2028). Third-quarter 2026 guidance for Refining & Marketing: refining operating costs of $5.60 per barrel excluding turnaround and depreciation, distribution costs of $1,650 million, planned turnaround costs of $290 million, depreciation and amortisation of $390 million, and throughput of 3,005 mbpd (2,820 mbpd of crude plus 185 mbpd of other charge and blendstocks); corporate expense of $260 million including $30 million of depreciation. **Contingencies.** Accrued remediation liabilities were $368 million at June 30, 2026 against $355 million at year end. MPC remains a defendant in one climate-related proceeding, in Delaware (*Delaware ex rel. Jennings v. BP America Inc., et al.*, instituted September 10, 2020), with similar suits possible elsewhere and no estimate of likelihood or liability available. In the Tesoro High Plains Pipeline matter, a subsidiary paid roughly $4 million of assessed trespass damages and ceased using the crossing at issue, and its challenge to the Bureau of Indian Affairs' March 2021 order will proceed on the merits. On Dakota Access — a 9.19 percent indirect MPLX interest — the Army Corps issued its final environmental impact statement in late 2025 recommending continued operation and a Record of Decision in May 2026, with new litigation possible; MPLX's maximum potential contribution under the contingent equity agreement was approximately $78 million. Guarantees of LOOP and LOCAP debt principal totalled $210 million and other guarantees $185 million. Following a compliance review, the EPA assessed stipulated penalties in the second quarter of 2026 against the Galveston Bay refinery for alleged consent-decree violations from 2020 through 2024; the company expects resolution may cost $1 million or more but does not expect a material impact. ## Subsequent events *After June 30, 2026, as disclosed in the quarterly report, accession 0001510295-26-000061, and the results release furnished on Form 8-K, accession 0001510295-26-000060.* The quarterly report contains no separate subsequent-events note; the post-period items disclosed in it and in the accompanying results release are the following. - **July 28, 2026** — MPLX declared a quarterly cash distribution of $1.0765 per common unit, payable August 14, 2026 to unitholders of record on August 7, 2026. MPC's share is approximately $697 million. - **July 29, 2026** — MPC's board declared a dividend of $1.00 per common share, payable September 10, 2026 to shareholders of record at the close of business on August 19, 2026. - **July 29, 2026** — Following the death in June of director Abdulaziz F. Alkhayyal, a board member since 2016, the board reclassified director Jeffrey C. Campbell from Class II to Class I to rebalance MPC's three director classes; his board service is treated as continuous. - **August 4, 2026** — Alongside second-quarter results, MPLX raised its 2026 growth capital spending outlook by $500 million, to $2.9 billion, primarily to accelerate execution of the Gulf Coast fractionation project. - **Project milestones** — the Blackcomb Pipeline began commissioning in July 2026, and the Harmon Creek III gas processing plant and de-ethanizer in the Marcellus were scheduled to begin operations in August 2026. No acquisition, divestiture, financing or litigation settlement is disclosed as occurring after June 30, 2026 in either filing.