Marathon Petroleum Corp (MPC)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This section should also be read in conjunction with the unaudited consolidated financial statements and accompanying footnotes included under Item 1. Financial Statements and in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025.

DISCLOSURES REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, particularly Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 3. Quantitative and Qualitative Disclosures about Market Risk, includes forward-looking statements that are subject to risks, contingencies or uncertainties. You can identify forward-looking statements by words such as “advance,” “anticipate,” “believe,” “commitment,” “continue,” “could,” “design,” “drive,” “endeavor,” “estimate,” “expect,” “focus,” “forecast,” “goal,” “guidance,” “intend,” “may,” “objective,” “opportunity,” “outlook,” “plan,” “policy,” “position,” “potential,” “predict,” “priority,” “progress,” “project,” “prospective,” “pursue,” “seek,” “should,” “strategy,” “strive,” “support,” “target,” “trends,” “will,” “would” or other similar expressions that convey the uncertainty of future events or outcomes.

Forward-looking statements include, among other things, statements regarding:

•future financial and operating results;

•environmental, social and governance (“ESG”) plans and goals, including those related to greenhouse gas emissions and intensity, freshwater withdraw intensity, inclusion and ESG reporting;

•future levels of capital, environmental or maintenance expenditures, general and administrative and other expenses;

•the success or timing of completion of ongoing or anticipated capital or maintenance projects;

•business strategies, growth opportunities and expected investments, including plans to improve commercial performance, lower costs and optimize our asset portfolio;

•consumer demand for refined products, natural gas, renewable diesel and other renewable fuels and NGLs;

•the timing, amount and form of any future capital return transactions, including dividends and share repurchases by MPC or distributions and unit repurchases by MPLX; and

•the anticipated effects of actions of third parties such as competitors, activist investors, federal, foreign, state or local regulatory authorities, or plaintiffs in litigation.

Our forward-looking statements are not guarantees of future performance, and you should not rely unduly on them, as they involve risks, uncertainties and assumptions that we cannot predict. Forward-looking and other statements regarding our ESG plans and goals are not an indication that these statements are material to investors or required to be disclosed in our filings with the SEC. In addition, historical, current, and forward-looking ESG-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. Material differences between actual results and any future performance suggested in our forward-looking statements could result from a variety of factors, including the following:

•general economic, political or regulatory developments, including tariffs, inflation, interest rates, government shutdowns, changes in governmental policies relating to refined petroleum products, crude oil, natural gas, NGLs or renewable diesel and other renewable fuels, or taxation, including changes in tax regulations or guidance promulgated pursuant to the new legislation implemented in the One Big Beautiful Bill Act;

•the regional, national and worldwide availability and pricing of refined products, crude oil, natural gas, renewable diesel and other renewable fuels, NGLs and other feedstocks, including increased pricing volatility or supply disruptions due to the U.S.- Iran conflict and market reactions thereto;

•disruptions in credit markets or changes to credit ratings;

•the adequacy of capital resources and liquidity, including availability, timing and amounts of free cash flow necessary to execute business plans and to effect any share repurchases or to maintain or increase the dividend;

•the potential effects of judicial or other proceedings on our business, financial condition, results of operations and cash flows;

•the timing and extent of changes in commodity prices and demand for crude oil, refined products, feedstocks or other hydrocarbon-based products or renewable diesel and other renewable fuels;

•volatility in or degradation of general economic, market, industry or business conditions, including as a result of pandemics, other infectious disease outbreaks, natural hazards, extreme weather events, regional conflicts such as hostilities in the Middle East and in Ukraine, tariffs, inflation, or rising interest rates;

•our ability to comply with federal and state environmental, economic, health and safety, energy and other policies and regulations and enforcement actions initiated thereunder;

•adverse market conditions or other risks affecting MPLX;

•refining industry overcapacity or under capacity;

•foreign imports and exports of crude oil, refined products, natural gas and NGLs;

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•the establishment or increase of tariffs on goods, including crude oil and other feedstocks imported into the United States, other trade protection measures or restrictions or retaliatory actions from foreign governments;

•changes in producer customers’ drilling plans or in volumes of throughput of crude oil, natural gas, NGLs, refined products, other hydrocarbon-based products or renewable diesel and other renewable fuels;

•non-payment or non-performance by our customers;

•changes in the cost or availability of third-party vessels, pipelines, railcars and other means of transportation for crude oil, natural gas, NGLs, feedstocks, refined products and renewable diesel and other renewable fuels;

•the price, availability and acceptance of alternative fuels and alternative-fuel vehicles and laws mandating such fuels or vehicles;

•political and economic conditions in nations that consume refined products, natural gas, renewable diesel and other renewable fuels and NGLs, including the United States and Mexico, and in crude oil producing regions, including the Middle East, Russia, Africa, Canada and South America;

•actions taken by our competitors, including pricing adjustments, the expansion and retirement of refining capacity and the expansion and retirement of pipeline capacity, processing, fractionation and treating facilities in response to market conditions;

•completion of pipeline projects within the United States;

•changes in fuel and utility costs for our facilities;

•industrial incidents or other unscheduled shutdowns affecting our refineries, machinery, pipelines, processing, fractionation and treating facilities or equipment, means of transportation, or those of our suppliers or customers;

•acts of war, terrorism or civil unrest that could impair our ability to produce refined products, receive feedstocks or to gather, process, fractionate or transport crude oil, natural gas, NGLs, refined products or renewable diesel and other renewable fuels;

•political pressure and influence of environmental groups and other stakeholders that are adverse to the production, gathering, refining, processing, fractionation, transportation and marketing of crude oil or other feedstocks, refined products, natural gas, NGLs, other hydrocarbon-based products or renewable diesel and other renewable fuels;

•labor and material shortages;

•the ability to realize expected returns or other benefits on anticipated or ongoing projects or planned or recently completed acquisitions or other transactions, including the recently completed acquisitions of Northwind Delaware Holdings LLC and BANGL, LLC;

•the timing and ability to obtain necessary regulatory approvals and permits and to satisfy other conditions necessary to complete planned projects or to consummate planned transactions within the expected timeframe, if at all;

•the inability or failure of our joint venture partners to fund their share of operations and capital investments;

•the financing and distribution decisions of joint ventures we do not control;

•the availability of desirable strategic alternatives to optimize portfolio assets and the ability to obtain regulatory and other approvals with respect thereto;

•our ability to successfully implement our sustainable energy strategy and principles and achieve our ESG plans and goals within the expected timeframe, if at all;

•the costs, disruption and diversion of management’s attention associated with campaigns commenced by activist investors;

•personnel changes;

•the imposition of windfall profit taxes, maximum margin penalties, minimum inventory requirements or refinery maintenance and turnaround supply plans on companies operating in the energy industry in California or other jurisdictions; and

•compliance costs and uncertainty associated with cap and invest programs or similar arrangements or programs in California or other jurisdictions.

For additional risk factors affecting our business, see the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2025. We undertake no obligation to update any forward-looking statements except to the extent required by applicable law.

EXECUTIVE SUMMARY

Business and Economic Environment Update

Our Refining & Marketing segment results for the second quarter of 2026 versus the second quarter of 2025 reflect higher realized refining margins supported by stable demand and higher product prices driven by global crude oil supply disruptions as a result of increasing regional conflicts, particularly in the Middle East. Longer term, global demand growth is expected to outpace the net impact of refining capacity additions and rationalizations through the end of the decade. We anticipate these fundamentals, as well as the U.S. refining industry’s current structural advantages over the rest of the world, will support a constructive environment for U.S. refiners.

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Our Midstream segment results for the second quarter of 2026 versus the second quarter of 2025 reflect previously announced acquisition and divestiture activity as we continue to optimize our assets and execute on progressing our strategic initiatives. We believe our Midstream business is well positioned to meet growing global demand for U.S. energy through the advancement of MPLX’s wellhead-to-water strategy and support the development plans of its producer customers.

Strategic Updates

Strategic Petroleum Reserve

In the first and second quarters of 2026, the U.S. Department of Energy (“DOE”) accepted MPC’s bids to exchange crude oil barrels with the Strategic Petroleum Reserve (“SPR”). Under the arrangements, the SPR agreed to deliver approximately 22 million barrels to MPC throughout 2026 and MPC agreed to return approximately 27 million barrels beginning in April of 2027 through July of 2029.

See Note 15 to the unaudited consolidated financial statements for further discussion.

Additional $5.0 Billion Share Repurchase Authorization

On May 5, 2026, we announced that our board of directors approved an additional $5.0 billion share repurchase authorization. The share repurchase authorization has no expiration date. Future repurchases under the authorization will depend on the macro environment, cash available after opportunities for capital investment and growth of the business, and market conditions. As of June 30, 2026, we had $6.13 billion remaining under the share repurchase authorizations.

See Note 8 to the unaudited consolidated financial statements for further discussion of our share repurchase authorizations.

Results

Our chief operating decision maker (“C

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

All statements in this section, other than statements of historical fact, are forward-looking statements that are inherently uncertain. See “Disclosures Regarding Forward-Looking Statements” and Item 1A. Risk Factors for a discussion of the factors that could cause actual results to differ materially from those projected in these statements. The following information concerning our business, results of operations and financial condition should also be read in conjunction with the information included under Item 1. Business, Item 1A. Risk Factors and Item 8. Financial Statements and Supplementary Data.

EXECUTIVE SUMMARY

Business Update

Our Refining & Marketing segment results for 2025 versus 2024 reflect higher realized refining margins supported by stable demand and by gasoline and distillate inventory levels in the U.S. that were at or below five-year averages. Longer term, global demand growth is expected to outpace the net impact of refining capacity additions and rationalizations through the end of the decade. We anticipate these fundamentals, as well as the U.S. refining industry’s current structural advantages over the rest of the world, will support a constructive environment for U.S. refiners.

Our Midstream segment contributed strong results and continued growth in 2025, benefitting from the expansion of its Permian to Gulf Coast natural gas and NGL value chains with the Northwind Midstream Acquisition and the BANGL Acquisition, progression of long-haul pipeline growth projects and expansion of Gulf Coast fractionation and export facilities. We believe our Midstream business is well positioned and has significant opportunities to support the development plans of its producer customers.

In response to the current business environment, we continue to focus on the following priorities for our business:

Commitment to Safety, Reliability and Sustainability

We remain steadfast in our commitment to safely and reliably operate our assets and protect the health and safety of our employees. We are focused on sustainable structural changes to improve our cost competitiveness while maintaining safe and reliable operations. Our approach to sustainability spans the environmental, social and governance dimensions of our business. That means strengthening resiliency by lowering the carbon intensity and conserving natural resources; innovating for the future by investing in renewables and emerging technologies; and embedding sustainability in decision-making and in how we engage our people and many stakeholders. We have existing targets for reducing Scope 1 & 2 GHG emissions intensity, for lowering methane emissions intensity and for lowering our freshwater withdrawal intensity.

Operational Excellence

We are committed to achieving operational excellence by reducing costs, improving efficiency, driving operational improvements and being disciplined in capital allocation. This means lowering our costs in all aspects of our business and challenging ourselves to be disciplined in every dollar we spend across our organization. We look to optimize our portfolio of investment opportunities to ensure efficient deployment of capital focusing on projects with the highest returns.

Commercial Performance

We are focused on leveraging the complexity of our facilities by selecting advantaged raw materials, new approaches in the commercial space to be more dynamic amidst changing market conditions and achieving technological improvements to advance our commercial performance.

Integrated Value Chain Optimization

We are committed to leveraging our value chain so that we are a leader in operational, financial, and sustainability performance. Our goal is to improve value chain optimization with a more integrated and advanced approach to decision making so that each individual asset generates free cash flow back to the business and contributes to shareholder returns. With our investments, we are focused on high returning projects that we believe will enhance the competitiveness of our portfolio, including our investments in sustainable fuels and technologies that lower our carbon intensity as the global energy mix evolves.

Strategic Updates

Midstream Transactions

Divestiture of Rockies Operations

On November 12, 2025, MPLX completed the sale of its Rockies gathering and processing assets (the “Rockies”) to a subsidiary of Harvest Midstream (“Harvest”) for $980 million in cash. The transaction resulted in a gain of $159 million.

See Item 8. Financial Statements and Supplementary Data – Note 5 for additional information on the sale of the Rockies.

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Northwind Midstream Acquisition

On August 29, 2025, MPLX completed the acquisition of 100 percent of Northwind Midstream for $2.4 billion in cash. Northwind Midstream provides sour gas gathering and treating services in Lea County, New Mexico, which enhances MPLX’s Permian natural gas and NGL value chain. The Northwind Midstream Acquisition was accounted for as a business combination. The Northwind Midstream Acquisition and incremental capital expenditures associated with in-process expansion projects, were financed with a portion of the net proceeds from MPLX's $4.5 billion senior notes issuance in August 2025.

See Item 8. Financial Statements and Supplementary Data – Note 5 for additional information on the Northwind Midstream Acquisition.

BANGL, LLC Acquisition

On July 1, 2025, MPLX purchased the remaining 55 percent interest in BANGL, LLC (“BANGL”) for $703 million cash, plus an earnout provision of up to $275 million based on targeted EBITDA growth from 2026 to 2029. As a result of the BANGL Acquisition, MPLX now owns 100 percent of BANGL and its results are reflected in our Midstream segment within our consolidated financial results. The BANGL Acquisition was accounted for as a business combination, resulting in the recognition of a $484 million gain.

See Item 8. Financial Statements and Supplementary Data – Note 5 for additional information on the BANGL Acquisition.

Whiptail Midstream Acquisition

On March 11, 2025, MPLX acquired gathering businesses from Whiptail Midstream, LLC for $235 million in cash (the “Whiptail Midstream Acquisition”). These San Juan basin assets consist primarily of crude and natural gas gathering systems in the Four Corners region. The acquisition was accounted for as a business combination.

See Item 8. Financial Statements and Supplementary Data – Note 5 for additional information on the Whiptail Midstream Acquisition.

Sale of Interest in Ethanol Joint Venture

On July 31, 2025, MPC sold its 49.9 percent interest in The Andersons Marathon Holdings LLC (“TAMH”) to The Andersons Ethanol LLC (the “Ethanol Joint Venture Sale”) in exchange for cash proceeds of $427 million. MPC’s investment in TAMH was accounted for as an equity method investment and previously reported in the Refining & Marketing segment. Upon closing, MPC derecognized the carrying value of the equity method investment of $173 million and recorded a gain of $254 million.

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Results

Our chief operating decision maker (“CODM”) evaluates the performance of our segments using segment adjusted EBITDA. Amounts included in income before income taxes and excluded from segment adjusted EBITDA include: (i) depreciation and amortization; (ii) net interest and other financial costs; (iii) turnaround expenses; and (iv) other adjustments as deemed necessary. These items are either: (i) believed to be non-recurring in nature; (ii) not believed to be allocable or controlled by the segment; or (iii) are not tied to the operational performance of the segment.

Select results for continuing operations for 2025 and 2024 are reflected in the following table.

(a)    Represents MPC’s pro-rata share of expenses from joint ventures included within the Renewable Diesel segment.

(b)    2025 includes gains from the BANGL Acquisition, the Ethanol Joint Venture Sale and the Rockies divestiture. 2024 includes the gain resulting from MPLX and its joint venture partner contributing their respective membership interests in Whistler Pipeline, LLC to a newly formed joint venture, WPC Parent, LLC, and issuing a 19 percent voting interest in WPC Parent, LLC to an affiliate of Enbridge Inc. in exchange for the contribution of cash and the Rio Bravo Pipeline project (collectively the “Whistler Joint Venture Transaction”). See Item 8. Financial Statements and Supplementary Data - Note 5 for additional information on these transactions.

(c)    Transaction-related costs include costs associated with the Northwind Midstream Acquisition, the BANGL Acquisition and the Rockies divestiture discussed in Item 8. Financial Statements and Supplementary Data - Note 5.

Net income attributable to MPC increased $602 million, or $3.14 per diluted share, in 2025 compared to 2024. Refer to the Results of Operations section for a discussion of financial results by segment for the three years ended December 31, 2025.

MPLX

We received limited partner distributions of $2.56 billion and $2.27 billion from MPLX during 2025 and 2024, respectively. We owned approximately 647 million MPLX common units at December 31, 2025 with a market value of $34.55 billion based on the December 31, 2025 closing unit price of $53.37. On January 29, 2026, MPLX declared a quarterly cash distribution of $1.0765 per common unit, which was paid February 17, 2026. As a result, MPLX made distributions totaling $1.09 billion to its common unitholders for the fourth quarter of 2025. MPC’s portion of these distributions was approximately $697 million.

During the year ended December 31, 2025, MPLX repurchased approximately 8 million MPLX common units at an average cost per unit of $51.58 and paid approximately $400 million of cash. As of December 31, 2025, $1.12 billion remained available under the authorizations for future repurchases.

See Item 8. Financial Statements and Supplementary Data – Note 4 for additional information on MPLX.

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OVERVIEW OF SEGMENTS

Refining & Marketing

Refining & Marketing segment adjusted EBITDA depends largely on our refinery throughputs, Refining & Marketing margin, refining operating costs and distribution costs. Our total refining capacity was 2,986 mbpcd, 2,963 mbpcd and 2,950 mbpcd as of December 31, 2025, 2024 and 2023, respectively.

Refining & Marketing margin is the difference between the prices of refined products sold and the costs of crude oil and other charge and blendstocks refined, including the costs to transport these inputs to our refineries and the costs of products purchased for re

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