Marathon Petroleum Corporation (MPC) reported 4Q14 earnings of US$798 million, or US$2.86 per diluted share, compared with US$626 million, or US$2.07 per diluted share, in 4Q13. Earnings were US$2.52 billion, or US$8.78 per diluted share, for the full-year 2014, compared with US$2.11 billion, or US$6.64 per diluted share, in 2013.
"MPC had a strong fourth quarter, completing another milestone year in our history," said MPC President and Chief Executive Officer Gary R. Heminger. He noted that MPC's refining and marketing segment achieved income from operations of US$3.61 billion for the year while executing the largest series of planned refinery maintenance projects in the company's history. "Our achievements, such as the acquisition of Hess' retail operations and the acceleration of MPLX's growth, underscore our commitment to grow higher-value, stable cash-flow segments of the business while optimising our refining system for strong returns.
"While crude oil prices fell and crack spreads narrowed during the fourth quarter, MPC experienced strong product price realisations at both the wholesale and retail level," said Heminger. "Our flexible refining system, large retail presence and extensive logistics network allowed us to successfully adapt to changing production and supply patterns. This was a year where our results clearly demonstrate the value of our integrated downstream system."
MPC's Speedway segment reported record earnings of US$273 million for the quarter. Speedway segment results, before considering the significant contribution from the newly acquired Hess retail operations, were also a quarterly record. During 4Q14, the Hess locations contributed income of approximately US$118 million. "Speedway performed remarkably while transitioning these new locations to the Speedway brand," Heminger said, noting that 134 of the 1245 acquired stores have been converted as of 31 January. "Conversions of these new locations and the deployment of Speedway's highly successful merchandise model are progressing well."
MPC completed its third dropdown to MPLX LP during 4Q14, which increased MPLX's interest in MPLX Pipe Line Holdings LP (Pipe Line Holdings) to 99.5%, up from the 56% held at year-end 2013. "The dropdown of additional interests in Pipe Line Holdings is an important first step in our strategy to substantially accelerate the growth of MPLX," said Heminger.
Heminger noted that through share buyback programmes and dividends, MPC returned a total of US$2.7 billion of capital to shareholders in 2014, including US$820 million during 4Q14. "MPC continued to deliver peer-leading capital returns to its shareholders," he said. "MPC has repurchased approximately 25% of the shares that were outstanding when we became a standalone company. We remain focused on the long-term value proposition for our investors."
MPC also announced today its 2015 capital plan of US$2.53 billion, which includes US$1.28 billion for the refining and marketing segment, US$452 million for the Speedway segment, and US$659 million for the pipeline transportation segment. Looking forward to 2015, Heminger said, "MPC's capital plan reflects our commitment to further develop the stable cash-flow generating segments of our business while also optimising refining. This will be done by growing our midstream business, integrating the Hess retail operations into Speedway and continuing to implement margin-enhancing projects in our refining business, including synergistic projects at our Galveston Bay refinery, which was acquired in 2013."
Adapted from press release Rosalie Starling
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