Marathon Petroleum Financial Model
Oil and Gas Company Financials Example (Free Excel Download)
Marathon Petroleum Corporation (MPC) is a leading independent downstream energy company operating primarily in the United States.
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About this model
This model forecasts Marathon Petroleum Corporation's consolidated cash flows and sum-of-the-parts equity valuation to determine the company's capacity for share repurchases and dividend growth across various commodity price and crack spread scenarios.
Marathon Petroleum Corporation (MPC) is a leading independent downstream energy company operating primarily in the United States. The company refines crude oil into transportation fuels and other products, and operates a massive logistics network through its master limited partnership, MPLX LP.
Business segments include:
- Refining & Marketing (R&M): Represents the vast majority of consolidated revenue (approximately 90%) but is highly cyclical, operating 3.0 million barrels per day of refining capacity.
- Midstream: Operates through MPLX LP, contributing approximately 10% of gross revenue but generating highly stable, fee-based cash flows that account for over half of consolidated EBITDA in mid-cycle environments.
- Renewable Diesel: A smaller, emerging segment focused on lower-carbon fuels.
Key geographies are entirely domestic, with refining assets concentrated in the Gulf Coast, Mid-Continent, and West Coast regions. The business model is extremely asset-heavy, requiring significant maintenance capital and planned turnaround expenditures. MPC's competitive position is strong as the largest refiner in the United States by capacity. A major recent structural event was the 2021 divestiture of the Speedway retail business to 7-Eleven, which transformed MPC into a pure-play refiner and midstream operator, using the proceeds to fund a massive multi-year share repurchase programme.
The downloadable Marathon Petroleum financial model includes SEC-sourced historical financials, forecast assumptions, core operating schedules, and valuation outputs in an Excel workbook built for review and scenario analysis.
A turnkey financial model
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
Historicals & AssumptionsMarathon Petroleum financial modelCompany, Historicals & Assumptions used
Source: SEC EDGAR · values in USD
| Line item | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue | $119.98B | $177.45B | $148.38B | $138.86B | $132.70B |
| Gross profit | $9.97B | $25.78B | $19.81B | $12.62B | $13.25B |
| Operating income | $4.30B | $21.47B | $14.51B | $6.80B | $8.29B |
| Net income | $9.74B | $14.52B | $9.68B | $3.44B | $4.05B |
Forecast assumptions
Defaults used in the downloadable model. Forecast horizon: FY2026–FY2030.
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How to build a detailed financial model for Marathon Petroleum
A complete walkthrough of every driver, margin, working-capital input, and capital-allocation assumption used in the downloadable model.
Revenue Deep Dive
Refining & Marketing
- Segment name: Refining & Marketing
- Revenue driver formula: Total Throughput (Barrels per Day) x 365 x Average Refined Product Realisation Price
- Historical growth rate: Highly volatile, driven entirely by commodity prices rather than structural volume growth (typically -15% to +20% year-over-year swings).
- Key growth levers and headwinds: Global refining capacity additions, domestic fuel demand, electric vehicle penetration, and crude oil differentials (e.g., heavy/sour crude discounts).
- Pricing dynamics: Spot market pricing based on global crude benchmarks (WTI, Brent) and regional crack spreads (e.g., US Gulf Coast 3-2-1 crack spread).
- Revenue recognition notes: Recognised upon delivery of refined products to wholesale customers.
- Seasonality: Q2 and Q3 are typically the strongest quarters due to the summer driving season in the United States, driving higher gasoline demand and margins.
Midstream
- Segment name: Midstream
- Revenue driver formula: Gathered and Transported Volumes x Tariff/Fee Rate
- Historical growth rate: 5% to 7% CAGR over the last four years.
- Key growth levers and headwinds: Permian and Marcellus basin production volumes, new pipeline infrastructure projects, and natural gas liquids (NGL) demand.
- Pricing dynamics: Long-term, fee-based contracts with minimum volume commitments (MVCs), often including inflation escalators.
- Revenue recognition notes: Recognised over time as transportation and gathering services are provided.
- Seasonality: Generally stable across the year, with minor weather-related volume disruptions in winter months.
Renewable Diesel
- Segment name: Renewable Diesel
- Revenue driver formula: Gallons Produced x (Renewable Diesel Price + Environmental Credit Value)
- Historical growth rate: Rapid initial growth as facilities (e.g., Martinez) ramped up, now stabilising.
- Key growth levers and headwinds: Regulatory mandates (Renewable Fuel Standard), value of RINs and LCFS credits, and feedstock costs (soybean oil, tallow).
- Pricing dynamics: Highly dependent on government environmental credit markets.
- Revenue recognition notes: Spot sales of fuel and associated credits.
- Seasonality: Minimal operational seasonality, though credit prices fluctuate continuously.
Cost Structure
Variable Costs / COGS
- Cost of refinery inputs is the largest expense, representing the purchase of crude oil and other feedstocks.
- Gross margin (Refining Margin) ranges from $10.00 to $25.00 per barrel depending on the macro environment (averaging around $15.00 to $18.00 recently).
- Key input costs include crude oil, natural gas (used to power refinery operations), and purchased ethanol.
- COGS scales directly and linearly with crude oil prices and throughput volumes.
Operating Expenses
- R&D: Immaterial for this business.
- Refining Operating Costs: Tracked on a per-barrel basis, typically ranging from $5.00 to $6.00 per barrel (e.g., $5.70 per barrel in late 2025). This includes labour, maintenance, and energy costs.
- Turnaround Costs: Planned maintenance expenses that occur every 3 to 5 years per unit. These run between $1.0 billion and $1.5 billion annually across the portfolio and are excluded from adjusted EBITDA.
- SG&A: Corporate overhead, relatively stable at approximately $1.5 billion to $2.0 billion annually.
- Depreciation & Amortisation: Very high due to the asset base, typically running at $3.0 billion to $3.5 billion annually.
- Stock-Based Compensation: Minor relative to revenue, typically under 0.5%.
Margin Profile
- Refining margins are tracked in dollars per barrel ($/bbl) rather than percentages, as revenue percentages are distorted by crude prices.
- Consolidated EBITDA margin fluctuates between 6% and 12%.
- Midstream EBITDA margins are exceptionally high (often exceeding 50% of midstream revenue) due to the fee-based nature of the assets.
- Margin trends are cyclical, expanding during periods of tight global refining capacity and compressing when new global supply comes online or demand falters.
Balance Sheet Structure
- Total assets are approximately $85 billion to $90 billion.
- Key asset categories are Property, Plant & Equipment (refineries, pipelines, terminals) and Inventories.
- Goodwill & intangibles represent a moderate portion of assets, stemming primarily from the 2018 Andeavor acquisition and MPLX acquisitions.
- Working capital profile:
- Days Sales Outstanding (DSO): 15 to 25 days.
- Days Inventory Outstanding (DIO): 30 to 45 days.
- Days Payable Outstanding (DPO): 25 to 35 days.
- Net working capital is highly volatile and tied to the absolute price of crude oil. A $10 per barrel increase in crude prices can require hundreds of millions in additional working capital.
- The company uses LIFO (Last-In, First-Out) accounting for inventory, which can create non-cash LIFO liquidation impacts during inventory drawdowns.
- PP&E consists of complex refinery units (cokers, hydrocrackers) and midstream infrastructure. Useful lives range from 15 to 40 years.
- Right-of-use assets are material but secondary to owned PP&E.
Capital Expenditure & Investment
- Consolidated capex runs between $3.5 billion and $4.5 billion annually.
- MPC standalone capex is heavily weighted toward maintenance and regulatory compliance (approximately $1.5 billion in 2026), with minor growth investments in high-return refinery optimisation.
- MPLX capex is growth-oriented, running at $2.4 billion to $2.9 billion annually to expand natural gas and NGL infrastructure.
- Capitalised software is immaterial.
- M&A pattern: Historically transformational (Andeavor), but currently focused on organic midstream bolt-ons and returning capital rather than large corporate acquisitions.
Debt & Capital Structure
- Total consolidated debt is approximately $27 billion to $29 billion.
- Crucially, this debt must be bifurcated: MPC standalone debt is roughly $6 billion to $8 billion, while MPLX debt is roughly $21 billion. MPLX debt is non-recourse to MPC.
- Gross Debt-to-Capital ratio (excluding MPLX) is managed strictly to maintain investment-grade ratings (typically BBB).
- Key debt instruments include senior unsecured notes and revolving credit facilities.
- Interest rate profile is predominantly fixed-rate long-term bonds.
- Share repurchase programme is highly active. MPC returned over $10 billion to shareholders in 2024 and continues aggressive buybacks, reducing share count by over 6% annually.
- Dividend policy: MPC pays a growing base dividend. Additionally, MPLX pays a substantial distribution (yielding over 8%), of which MPC receives approximately $2.5 billion to $2.8 billion annually based on its ownership stake.
Cash Flow Characteristics
- Operating cash flow is robust, generating $8.3 billion in 2025 and $8.7 billion in 2024.
- Free cash flow conversion is highly dependent on the refining cycle but generally strong due to disciplined standalone capital spending.
- Major non-cash items include D&A, deferred taxes, and LIFO inventory adjustments.
- Working capital is a massive source or use of cash depending on commodity price movements between the start and end of the reporting period.
- Capex intensity is moderate for MPC standalone (under 2% of revenue) but high for MPLX.
- Cash tax rate generally tracks the statutory rate of 21% plus state taxes, though accelerated depreciation on midstream assets provides cash tax deferrals.
Sheet Structure
- Assumptions: Macro drivers (WTI, Brent, Natural Gas), regional crack spreads, throughput volumes, and corporate tax rates.
- R&M Segment: Capacity, utilisation rate, throughput (bpd), refining margin ($/bbl), operating costs ($/bbl), and turnaround expenses.
- Midstream Segment (MPLX): Gathering volumes, tariff rates, operating expenses, MPLX standalone debt, and distribution calculations (showing the cash flowing up to MPC).
- Renewable Diesel Segment: Production volumes, margin per gallon, and segment EBITDA.
- Consolidated Income Statement: Aggregation of segment revenues, cost of sales, depreciation, interest expense (split by MPC and MPLX), and taxes.
- Balance Sheet: Standard assets, liabilities, and equity, highlighting LIFO inventory reserves and non-controlling interests (representing public ownership of MPLX).
- Cash Flow Statement: Net income bridge to OCF, investing cash flows (split by segment capex), and financing cash flows (dividends, massive share repurchases).
- Debt Schedule: Two separate tranches tracking MPC standalone notes and MPLX non-recourse notes, calculating interest expense for each.
- Valuation (SOTP): Sum-of-the-parts valuation using a DCF or EV/EBITDA multiple for the R&M segment, plus the market value (or yield-based value) of MPC's LP units in MPLX, minus MPC standalone net debt.
Key Financial Relationships
- Total R&M Throughput = Refining Capacity (3.0 million bpd) x Utilisation Rate (e.g., 94%)
- R&M Gross Margin = Total R&M Throughput x 365 x Refining Margin ($/bbl)
- R&M Operating Expense = Total R&M Throughput x 365 x Refining Operating Cost ($/bbl)
- R&M Segment Adjusted EBITDA = R&M Gross Margin - R&M Operating Expense - Distribution Costs
- MPLX Distributions to MPC = Total MPLX Units Outstanding x MPC Ownership Percentage (approx. 65%) x Annualised Distribution per Unit
- Consolidated Adjusted EBITDA = R&M Segment Adjusted EBITDA + Midstream Segment Adjusted EBITDA + Renewable Diesel Adjusted EBITDA - Corporate Overhead
- MPC Standalone Free Cash Flow = Consolidated OCF - MPC Standalone Capex - MPLX Capex + MPLX Distributions to Non-Controlling Interests (to isolate cash available to MPC shareholders)
- Share Repurchase Capacity = MPC Standalone Free Cash Flow - MPC Base Dividend + Cash Balance Drawdown
- Ending Share Count = Beginning Share Count - (Share Repurchase Spend / Average Share Price)
- LIFO Inventory Value = FIFO Inventory Value - LIFO Reserve
Cross-Sheet Dependencies
- The Assumptions sheet dictates throughput and margin per barrel, which directly feed the R&M Segment sheet.
- The Midstream Segment sheet calculates total MPLX distributions, which feed the Cash Flow Statement (distributions to non-controlling interests) and the Valuation sheet.
- Segment EBITDA from all three operating sheets feeds the Consolidated Income Statement.
- The Debt Schedule calculates interest expense, which feeds the Consolidated Income Statement, creating a circularity if debt paydown is driven by excess cash flow. To resolve this, use a circularity breaker toggle or base debt paydown on prior-period cash.
- The Cash Flow Statement determines share repurchases, which feeds back into the Consolidated Income Statement to calculate Earnings Per Share (EPS).
Sign Convention
- Revenues, throughput volumes, and margin per barrel figures are entered and displayed as positive numbers.
- Operating expenses, SG&A, and depreciation are entered as positive numbers and subtracted in margin and income formulas.
- On the Cash Flow Statement, cash inflows (e.g., net income, D&A add-back) are positive, while cash outflows (e.g., capex, dividends, share repurchases) are negative.
- Debt paydown is a negative figure on the Cash Flow Statement but reduces the positive debt balance on the Balance Sheet.
Things Most Likely to Go Wrong
- Failing to separate MPLX debt from MPC standalone debt will severely distort the company's perceived leverage and enterprise value. MPLX debt is non-recourse to the parent.
- Applying percentage-based gross margins to the R&M segment will break the model when crude prices fluctuate. R&M must be modelled on a dollar-per-barrel ($/bbl) basis.
- Turnaround costs are excluded from Adjusted EBITDA but represent real cash outflows. The model must deduct these in the cash flow bridge to avoid overstating free cash flow.
- Working capital swings can be massive. Modelling working capital as a flat percentage of revenue will create unrealistic cash flow generation during periods of rising oil prices.
- Double-counting midstream cash flows is a common error. The consolidated cash flow includes all MPLX cash, but the cash available to MPC shareholders must exclude distributions paid to public MPLX unitholders.
- LIFO inventory accounting means that if inventory volumes drop significantly, older, cheaper inventory is liquidated, artificially inflating net income without a corresponding cash benefit.
- Intercompany eliminations between Midstream and R&M must be handled correctly, as R&M pays MPLX for logistics services.
- Share count reduction is so aggressive (6% to 8% annually) that failing to model dynamic share repurchases will severely understate future EPS.
Validation Checks
- R&M Utilisation Rate must not exceed 100% on an annualised basis; flag if the model projects >96% as this ignores required maintenance downtime.
- Refining Operating Costs should remain between $5.00 and $6.50 per barrel; flag if outside this band.
- Consolidated Balance Sheet must balance: Total Assets = Total Liabilities + Equity in every period.
- MPC Standalone Debt-to-Capital ratio should remain below 30% to align with management's investment-grade targets.
- MPLX distributions to MPC must equal the declared per-unit distribution multiplied by MPC's unit ownership.
- Consolidated Operating Cash Flow should roughly equal Adjusted EBITDA minus Cash Interest, Cash Taxes, and Working Capital changes.
- Share repurchases should not exceed available standalone free cash flow plus available cash on hand.
Key Assumptions (Default Values)
| Assumption | Default Value | Unit | Rationale |
|---|---|---|---|
| R&M Refining Capacity | 3.0 | mmbpd | Actual reported capacity across the 13-refinery system. |
| R&M Utilisation Rate | 94.0 | % | Based on 2025 actual performance and management guidance. |
| R&M Refining Margin | 18.65 | $/bbl | Based on Q4 2025 actuals; adjust based on forward crack spreads. |
| R&M Operating Cost | 5.70 | $/bbl | Based on Q4 2025 actuals, reflecting recent inflation and energy costs. |
| Turnaround Expense | 1,200 | $ Millions | Typical annual run-rate for planned maintenance across the system. |
| Midstream Adjusted EBITDA | 6,900 | $ Millions | Based on 2025 actuals and stated 5-7% growth trajectory. |
| MPLX Annual Distribution | 3.80 | $/unit | Based on recent distribution hikes (approx. $0.95 per quarter). |
| MPC Standalone Capex | 1,500 | $ Millions | Management guidance for 2026 standalone capital spending. |
| MPLX Capex | 2,700 | $ Millions | Management guidance for 2026 midstream growth and maintenance. |
| Effective Tax Rate | 22.5 | % | Blended rate of US federal statutory (21%) plus state taxes. |
| Share Repurchase Spend | 4,500 | $ Millions | Aligns with 2025 actuals and management's capital return commitment. |
| MPC Base Dividend | 3.30 | $/share | Annualised base dividend per MPC share. |
Data Sources & Benchmarks
- SEC EDGAR: Marathon Petroleum Corporation (MPC) 10-K and 10-Q filings.
- Investor Relations: MPC quarterly earnings presentations and MPLX standalone filings.
- Key peers for benchmarking: Valero Energy (VLO), Phillips 66 (PSX), and HF Sinclair (DINO).
- Industry data sources: US Energy Information Administration (EIA) for weekly refinery utilisation, crack spreads, and crude inventory levels.
- Consensus estimates: Bloomberg or FactSet for forward crack spread curves and EPS estimates.
Sources
Do more with the Marathon Petroleum model
Frequently asked
What does Marathon Petroleum Corporation (MPC) do?+
Marathon Petroleum Corporation (MPC) is a leading independent downstream energy company operating primarily in the United States. It refines crude oil into transportation fuels and other products, and operates a massive logistics network through its master limited partnership, MPLX LP. The company's segments include Refining & Marketing, Midstream, and a smaller Renewable Diesel segment.
How does Marathon Petroleum generate its revenue?+
Marathon Petroleum primarily generates revenue from its Refining & Marketing segment, which accounts for approximately 90% of consolidated revenue by refining crude oil. The Midstream segment, operated through MPLX LP, contributes about 10% of gross revenue through stable, fee-based cash flows. Revenue in the Refining & Marketing segment is highly cyclical and influenced by commodity prices and crack spreads.
What are Marathon Petroleum's typical capital expenditure levels?+
Marathon Petroleum's consolidated capital expenditures typically run between $3.5 billion and $4.5 billion annually. MPC standalone capex is heavily weighted toward maintenance and regulatory compliance, while MPLX capex is growth-oriented to expand natural gas and NGL infrastructure. The business model is extremely asset-heavy, requiring significant ongoing investment.
What is a key revenue growth assumption in Marathon Petroleum's financial model?+
A key assumption in Marathon Petroleum's financial model is a Revenue Growth rate of approximately 7.49%. This forecast helps project future consolidated cash flows and supports the sum-of-the-parts equity valuation. The model considers various commodity price and crack spread scenarios to assess the company's financial capacity.
What is the purpose of the downloadable Marathon Petroleum financial model?+
The downloadable financial model forecasts Marathon Petroleum Corporation's consolidated cash flows and provides a sum-of-the-parts equity valuation. Its primary purpose is to determine the company's capacity for share repurchases and dividend growth. The model allows for analysis across various commodity price and crack spread scenarios.
What are the main components of Marathon Petroleum's balance sheet?+
Marathon Petroleum's balance sheet shows total assets between $85 billion and $90 billion, primarily consisting of Property, Plant & Equipment (refineries, pipelines, terminals) and Inventories. Goodwill and intangibles also represent a moderate portion, largely from past acquisitions. Net working capital is highly volatile and sensitive to crude oil prices.
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