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(a)	The nine months ended September 30, 2020 includes $1,315 million of impairment expense. See Note 6 for further information.

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(a)	The nine months ended September 30, 2020 includes $1,315 million of impairment expense. See Note 6 for further information.

(b)	Reported as assets held for sale on our consolidated balance sheets.

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Description of the Business

We are a leading, integrated, downstream energy company headquartered in Findlay, Ohio. We operate the nation's largest refining system. We sell refined products to wholesale marketing customers domestically and internationally, to buyers on the spot market and to independent entrepreneurs who operate approximately 7,000 branded outlets. We also sell transportation fuel to consumers through approximately 1,070 direct dealer locations under long-term supply contracts. MPC’s midstream operations are primarily conducted through MPLX LP (“MPLX”), which owns and operates crude oil and light product transportation and logistics infrastructure as well as gathering, processing, and fractionation assets. We own the general partner and a majority limited partner interest in MPLX.

On August 2, 2020, we entered into a definitive agreement to sell Speedway, our company-owned and operated retail transportation fuel and convenience store business, to 7-Eleven, Inc. for $21 billion in cash, subject to certain adjustments based on the levels of cash, debt (as defined in the agreement) and working capital at closing and certain other items. The taxable transaction is expected to close in the first quarter of 2021, subject to customary closing conditions and regulatory approvals. We will retain our direct dealer business.

As a result of the agreement to sell the Speedway business, its results are reported separately as discontinued operations in our consolidated statements of income for all periods presented and its assets and liabilities have been presented in our consolidated balance sheets as assets and liabilities held for sale. In addition, we separately disclosed the operating and investing cash flows of the Speedway business as discontinued operations within our consolidated statements of cash flow. See Note 4 for discontinued operations disclosures.

Prior to presentation of Speedway as discontinued operations, Speedway and our retained direct dealer business were the two reporting units within our Retail segment. Beginning with the third quarter of 2020, the direct dealer business is managed as part of the Refining & Marketing segment. The results of the Refining & Marketing segment have been retrospectively adjusted to include the results of the direct dealer business in all periods presented. See Note 11 for our segment reporting disclosures.

Basis of Presentation

All significant intercompany transactions and accounts have been eliminated.

As a result of our agreement to sell Speedway, the following changes in our basis of presentation have occurred:

•

In accordance with ASC 205, Discontinued Operations, intersegment sales from our Refining & Marketing segment to the Speedway business are no longer eliminated as intercompany transactions and are now presented within sales and other operating revenue, since we will continue to supply fuel to the Speedway business subsequent to the sale to 7-Eleven. All periods presented have been retrospectively adjusted to reflect this change.

•	Beginning August 2, 2020, in accordance with ASC 360, Property, Plant, and Equipment, we ceased recording depreciation and amortization for the Speedway business’ property, plant and equipment, finite-lived intangible assets and right of use lease assets.

Certain prior period financial statement amounts have been reclassified to conform to current period presentation.

These interim consolidated financial statements are unaudited; however, in the opinion of our management, these statements reflect all adjustments necessary for a fair statement of the results for the periods reported. All such adjustments are of a normal, recurring nature unless otherwise disclosed. These interim consolidated financial statements, including the notes, have been prepared in accordance with the rules of the SEC applicable to interim period financial statements and do not include all of the information and disclosures required by GAAP for complete financial statements.

These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the full year.

Recently Adopted

Effective January 1, 2020, we adopted ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” using the modified retrospective transition method. The amendment requires entities

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to consider a broader range of information to estimate expected credit losses, which may result in earlier recognition of losses. The ASU requires the company to utilize an expected loss methodology in place of the incurred loss methodology for financial instruments, including trade receivables, and off-balance sheet credit exposures. Adoption of the standard did not have a material impact on our financial statements.

We are exposed to credit losses primarily through our sales of refined petroleum products, crude oil and midstream services. We assess each customer’s ability to pay through our credit review process. The credit review process considers various factors such as external credit ratings, a review of financial statements to determine liquidity, leverage, trends and business specific risks, market information, pay history and our business strategy. Customers that do not qualify for payment terms are required to prepay or provide a letter of credit. We monitor our ongoing credit exposure through timely review of customer payment activity. At September 30, 2020, we reported $4,911 million of accounts and notes receivable, net of allowances of $22 million.

We are also exposed to credit losses from off-balance sheet exposures, such as guarantees of joint venture debt. See Note 24 for more information on these off-balance sheet exposures.

We also adopted the following ASUs during the first nine months of 2020, which also did not have a material impact to our financial statements or financial statement disclosures:

ASU			Effective Date
2018-13	Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement		January 1, 2020
2020-04	Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting		April 1, 2020

Not Yet Adopted

ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes

During the third quarter of 2020, we announced strategic actions to lay a foundation for long-term success, including plans to optimize our assets and structurally lower costs in 2021 and beyond, which included indefinitely idling the refineries located in Gallup, New Mexico and Martinez, California and the approval of an involuntary workforce reduction plan. In connection with these strategic actions, we recorded restructuring expenses of $348 million for the three months ended September 30, 2020.

The indefinite idling of the Gallup and Martinez refineries and progression of activities associated with the conversion of the Martinez refinery to a renewable diesel facility resulted in $189 million of restructuring expenses. Of the $189 million of restructuring expenses, we expect $130 million to settle in cash for costs related to decommissioning refinery processing units and storage tanks and fulfilling environmental remediation obligations. Additionally, we recorded a non-cash reserve against our materials and supplies inventory at these facilities of $51 million.

The involuntary workforce reduction plan, together with employee reductions resulting from MPC's indefinite idling of its Martinez and Gallup refineries, affected approximately 2,050 employees. We recorded $159 million of restructuring expenses for separation benefits payable under our employee separation plan and certain collective bargaining agreements that we expect to settle in cash. Certain of the affected MPC employees provide services to MPLX. MPLX has various employee services agreements and secondment agreements with MPC pursuant to which MPLX reimburses MPC for employee costs, along with the provision of operational and management services in support of MPLX’s operations. Pursuant to such agreements, MPC was reimbursed by MPLX for $36 million of the $159 million of restructuring expenses recorded for these actions.

As of September 30, 2020, $291 million of restructuring expenses were accrued as restructuring reserves within payroll and benefits payable, other current liabilities and deferred credits and other liabilities within our consolidated balance sheets. We expect cash payments for the majority of these reserves to occur within the next twelve months.

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On August 2, 2020, we entered into a definitive agreement to sell Speedway to 7-Eleven, Inc. for $21 billion, subject to certain adjustments based on the levels of cash, debt (as defined in the agreement) and working capital at closing and certain other items. The taxable transaction is expected to close in the first quarter of 2021, subject to customary closing conditions and regulatory approvals.

As a result of the agreement to sell the Speedway business, its results are reported separately as discontinued operations, net of tax, in our consolidated statements of income for all periods presented and its assets and liabilities have been presented in our consolidated balance sheets as assets and liabilities held for sale. Additionally, beginning August 2, 2020, in accordance with ASC 360, Property, Plant, and Equipment, we ceased recording depreciation and amortization for the Speedway business’ property, plant and equipment, finite-lived intangible assets and right of use lease assets. In addition, we separately disclosed the operating and investing cash flows of the Speedway business as discontinued operations within our consolidated statements of cash flow.

The following tables present Speedway results as reported in income from discontinued operations, net of tax, within our consolidated statements of income and the carrying value of assets and liabilities as presented within assets and liabilities held for sale on our consolidated balance sheets.

	Three Months Ended  September 30,								Nine Months Ended  September 30,
(In millions)	2020				2019				2020				2019
Total revenues and other income	$	5,235			$	7,074			$	14,868			$	20,228
Costs and expenses:
Cost of revenues (excludes items below)	4,641				6,533				13,047				18,814
LCM inventory valuation adjustment	—				—				25				—
Depreciation and amortization	36				94				237				285
Selling, general and administrative expenses	71				54				231				155
Other taxes	49				49				146				143
Total costs and expenses	4,797				6,730				13,686				19,397
Income from operations	438				344				1,182				831
Net interest and other financial costs	5				5				15				13
Income before income taxes	433				339				1,167				818
Provision for income taxes	62				85				286				197
Income from discontinued operations, net of tax	$	371			$	254			$	881			$	621

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(In millions)	September 30, 2020				December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	98			$	134
Receivables	238				246
Inventories	409				439
Other current assets	34				28
Equity method investments	316				330
Property, plant and equipment, net	4,711				4,745
Goodwill	4,390				4,390
Right of use assets	716				653
Other noncurrent assets	157				170
Total assets classified as held for sale	$	11,069			$	11,135
Liabilities
Current liabilities:
Accounts payable	$	301			$	401
Payroll and benefits payable	129				139
Accrued taxes	177				171
Debt due within one year	7				7
Operating lease liabilities	94				90
Other current liabilities	161				139
Long-term debt	113				107
Defined benefit postretirement plan obligations	23				26
Long-term operating lease liabilities	618				575
Deferred credits and other liabilities	90				93
Total liabilities classified as held for sale	$	1,713			$	1,748

Separation Agreements

We own the general partner and a majority limited partner interest in MPLX, which owns and operates crude oil and light product transportation and logistics infrastructure as well as gathering, processing, and fractionation assets. We control MPLX through our ownership of the general partner interest and as of September 30, 2020 we owned approximately 62 percent of the outstanding MPLX common units.

Redemption of business from MPLX

On July 31, 2020, Western Refining Southwest, Inc. (“WRSW”), a wholly owned subsidiary of MPC, entered into a Redemption Agreement (the “Redemption Agreement”) with MPLX, pursuant to which MPLX transferred to WRSW all of the outstanding membership interests in Western Refining Wholesale, LLC, (“WRW”) in exchange for the redemption of MPLX common units held by WRSW. The transaction effects the transfer to MPC of the Western wholesale distribution business that MPLX acquired as a result of its acquisition of Andeavor Logistics LP (“ANDX”). Beginning in the third quarter of 2020, the results of these operations are presented in MPC’s Refining & Marketing segment.

At the closing, per the terms of Redemption Agreement, MPLX redeemed 18,582,088 MPLX common units (the “Redeemed Units”) held by WRSW. The number of Redeemed Units was calculated by dividing WRW’s aggregate valuation of $340 million by the simple average of the volume weighted average New York Stock Exchange prices of an MPLX common unit for the ten trading days ending at market close on July 27, 2020. The transaction resulted in a minor decrease in MPC’s ownership interest in MPLX.

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MPLX’s Acquisition of ANDX

On July 30, 2019, MPLX completed its acquisition of ANDX, and ANDX survived as a wholly owned subsidiary of MPLX. At the effective time of the ANDX acquisition, each common unit held by ANDX’s public unitholders was converted into the right to receive 1.135 MPLX common units. ANDX common units held by MPC were converted into the right to receive 1.0328 MPLX common units. Additionally, as a result of MPLX’s acquisition of ANDX, 600,000 ANDX preferred units were converted into 600,000 preferred units of MPLX (“Series B preferred units”). Series B preferred unitholders are entitled to receive, when and if declared by the board of directors of MPLX’s general partner, a fixed distribution of $68.75 per unit, per annum, payable semi-annually in arrears on February 15 and August 15, or the first business day thereafter, up to and including February 15, 2023. After February 15, 2023, the holders of Series B preferred units are entitled to receive cumulative, quarterly distributions payable in arrears on the 15th day of February, May, August and November of each year, or the first business day thereafter, based on a floating annual rate equal to the three month LIBOR plus 4.652 percent.

MPC accounted for this transaction as a common control transaction, as defined by ASC 805, which resulted in an increase to noncontrolling interest and a decrease to additional paid-in capital of approximately $55 million, net of tax. During the third quarter of 2019, we pushed down to MPLX the portion of the goodwill attributable to ANDX as of October 1, 2018, the date of our acquisition of Andeavor. Due to this push down of goodwill, we also recorded an incremental $642 million deferred tax liability associated with the portion of the non-deductible goodwill attributable to the noncontrolling interest in MPLX with an offsetting reduction of our additional paid-in capital balance. We have consolidated ANDX since we acquired Andeavor on October 1, 2018 in accordance with ASC 810.

Agreements

We have various long-term, fee-based commercial agreements with MPLX. Under these agreements, MPLX provides transportation, storage, distribution and marketing services to us. With certain exceptions, these agreements generally contain minimum volume commitments. These transactions are eliminated in consolidation but are reflected as intersegment transactions between our Refining & Marketing and Midstream segments. We also have agreements with MPLX that establish fees for operational and management services provided between us and MPLX and for executive management services and certain general and administrative services provided by us to MPLX. These transactions are eliminated in consolidation but are reflected as intersegment transactions between our Corporate and Midstream segments.

Noncontrolling Interest

As a result of equity transactions of MPLX and ANDX, we are required to adjust non-controlling interest and additional paid-in capital. Changes in MPC’s additional paid-in capital resulting from changes in its ownership interests in MPLX and ANDX were as follows:

	Nine Months Ended  September 30,
(In millions)	2020				2019
Decrease due to the issuance of MPLX & ANDX common units	$	(23	)		$	(52	)
Tax impact	(17		)		(634		)
Decrease in MPC's additional paid-in capital, net of tax	$	(40	)		$	(686	)

The outbreak of COVID-19 and its development into a pandemic in March 2020 have resulted in significant economic disruption globally. Actions taken by various governmental authorities, individuals and companies around the world to prevent the spread of COVID-19 through social distancing have restricted travel, many business operations, public gatherings and the overall level of individual movement and in-person interaction across the globe. This has in turn significantly reduced global economic activity and resulted in a decrease in motor vehicle use at a time when seasonal driving patterns typically result in an increase of consumer demand for gasoline and a dramatic reduction in airline flights. These macroeconomic conditions and certain global geopolitical events in the first quarter of 2020 contributed to a significant decline in crude oil prices as well as an increase in crude oil price volatility. The decrease in demand for refined petroleum products has resulted in a significant decrease in the price and volume of the refined petroleum products we produce and sell as compared to the three and nine months ended September 30, 2019.

During the first quarter of 2020, the overall deterioration in the economy and the environment in which we operate, the related changes to our expected future cash flows, as well as a sustained decrease in share price were considered triggering events requiring various impairment assessments of the carrying values of our assets, which resulted in the majority of the impairment charges for the nine months ended September 30, 2020, as discussed below.

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The table below provides information related to the impairments recognized during the three and nine months ended September 30, 2020 and the location of these impairments within the consolidated statements of income.

		Three Months Ended  September 30,				Nine Months End September 30,
(In millions)	Income Statement Line	2020				2020
Goodwill	Impairment expense	$	64			$	7,394
Equity method investments	Income (loss) from equity method investments	—				1,315
Long-lived assets	Impairment expense	369				886
Total impairments		$	433			$	9,595

Goodwill

During the first quarter of 2020, we recorded an impairment of goodwill of $7.33 billion. See the table below for detail by segment. The goodwill impairment within the Refining & Marketing segment was primarily driven by the effects of COVID-19 and the decline in commodity prices. The impairment within the Midstream segment was primarily driven by additional information related to the slowing of drilling activity, which has reduced production growth forecasts from MPLX’s producer customers.

During the third quarter of 2020, we recorded an impairment of goodwill of $64 million. The $64 million of goodwill was transferred from our Midstream segment to our Refining & Marketing segment during the third quarter of 2020 in connection with the transfer to MPC of the MPLX wholesale distribution business as described in Note 5. The transfer required goodwill impairment tests for the transferor and transferee reporting units. Our Refining & Marketing reporting unit that recorded the $64 million impairment expense has no remaining goodwill.

The fair values of the reporting units for the goodwill impairment analysis were determined based on applying both a discounted cash flow or income approach as well as a market approach. The discounted cash flow fair value estimate is based on known or knowable information at the measurement date. The significant assumptions that were used to develop the estimates of the fair values under the discounted cash flow method included management’s best estimates of the expected future results and discount rates, which range from 9.0 percent to 13.5 percent. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the interim goodwill impairment test will prove to be an accurate prediction of the future. The fair value measurements for the individual reporting units’ overall fair values represent Level 3 measurements.

The changes in carrying amount of goodwill were as follows:

(In millions)	Refining & Marketing				Midstream				Total
Balance at January 1, 2020	$	6,133			$	9,517			$	15,650
Transfers(a)	8				(8		)		—
Impairments	(5,580		)		(1,814		)		(7,394		)
Balance at September 30, 2020(b)	$	561			$	7,695			$	8,256

(a)	Includes goodwill of $64 million transferred from our Midstream segment to our Refining & Marketing segment in connection with the transfer to MPC of the MPLX wholesale distribution business as described in Note 5.

(b)	As described in Notes 1 and 11, the Refining & Marketing reportable segment includes the direct dealer business, which was a reporting unit in our former Retail segment and now is a reporting unit within our Refining & Marketing segment with $561 million of goodwill.

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Equity Method Investments

During the first quarter of 2020, we recorded equity method investment impairment charges totaling $1.315 billion, of which $1.25 billion related to MarkWest Utica EMG, L.L.C. and its investment in Ohio Gathering Company, L.L.C. The impairments were largely due to a reduction in forecasted volumes gathered and processed by the systems operated by the joint ventures. The fair value of the investments was determined based upon applying the discounted cash flow method, which is an income approach. The discounted cash flow fair value estimate is based on known or knowable information at the interim measurement date. The significant assumptions that were used to develop the estimate of the fair value under the discounted cash flow method include management’s best estimates of the expected future cash flows, including prices and volumes, the weighted average cost of capital and the long-term growth rate. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the impairment test will prove to be an accurate prediction of the future. The fair value of these equity method investments represents a Level 3 measurement.

Long-lived Assets

Long-lived assets used in operations are assessed for impairment whenever changes in facts and circumstances indicate that the carrying value of the assets may not be recoverable based on the expected undiscounted future cash flow of an asset group. For purposes of impairment evaluation, long-lived assets must be grouped at the lowest level for which independent cash flows can be identified, which generally is the refinery and associated distribution system level for Refining & Marketing segment assets and the plant level or pipeline system level for Midstream segment assets. If the sum of the undiscounted estimated pretax cash flows is less than the carrying value of an asset group, fair value is calculated, and the carrying value is written down to the calculated fair value.

During the first quarter of 2020, we identified long-lived asset impairment triggers relating to all 16 of our refinery asset groups within the Refining & Marketing segment as a result of decreases to the Refining & Marketing segment expected future cash flows. The cash flows associated with these assets were significantly impacted by the effects of COVID-19 and commodity price declines. We assessed each refinery asset group for impairment by comparing the undiscounted estimated pretax cash flows to the carrying value of each asset group. Of the 16 refinery asset groups, only the Gallup refinery’s carrying value exceeded its undiscounted estimated pretax cash flows. It was determined that the fair value of the Gallup refinery’s property, plant and equipment was less than the carrying value. As a result, we recorded a charge of $142 million in the first quarter of 2020 to impairment expense on the consolidated statements of income. The fair value measurements for the Gallup refinery assets represent Level 3 measurements.

During the second quarter of 2020, we identified long-lived asset impairment triggers relating to all of our refinery asset groups within the Refining & Marketing segment, except the Gallup refinery which had been impaired in the first quarter, as a result of continued macroeconomic developments impacting the Refining & Marketing segment expected future cash flows. All of these refinery asset groups’ undiscounted estimated pretax cash flows exceeded their carrying value by at least 17 percent. The determination of undiscounted estimated pretax cash flows utilized significant assumptions including management’s best estimates of the expected future cash flows, allocation of certain Refining & Marketing segment cash flows to the individual refineries, the estimated useful lives of the asset groups, and the salvage values of the refineries.

On August 3, 2020, we announced our plans to evaluate possibilities to strategically reposition our Martinez refinery, including the potential conversion of the refinery into a renewable diesel facility. Subsequent to August 3, 2020, we progressed activities associated with the conversion of the Martinez refinery to a renewable diesel facility, including applying for permits, advancing discussions with feedstock suppliers, and beginning detailed engineering activities. As envisioned, the Martinez facility would be expected to start producing renewable diesel in 2022, with a potential to build to full capacity of 48,000 barrels per day in 2023. As a result of the progression of these activities, we identified assets that would be repurposed and utilized in a renewable diesel facility configuration and assets that would be abandoned since they had no function in a renewable diesel facility configuration. This change in our intended use for the Martinez refinery is a long-lived asset impairment trigger for the assets that would be repurposed and remain as part of the Martinez asset group. We assessed the asset group for impairment by comparing the undiscounted estimated pretax cash flows to the carrying value of the asset group and the undiscounted estimated pretax cash flows exceeded the Martinez asset group carrying value. We recorded impairment expense of $342 million for the abandoned assets as we are no longer using these assets and have no expectation to use these assets in the future. Additionally, as a result of our efforts to progress the conversion of Martinez refinery into a renewable diesel facility, MPLX cancelled in-process capital projects related to its Martinez refinery logistics operations resulting in impairments of $27 million in the third quarter.

The determinations of expected future cash flows and the salvage values of refineries, as described earlier, require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of our impairment analysis will prove to be an accurate prediction of the future.

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Should our assumptions significantly change in future periods, it is possible we may determine the carrying values of certain of our refinery asset groups exceed the undiscounted estimated pretax cash flows of their refinery asset groups, which would result in future impairment charges.

During the first quarter of 2020, we identified an impairment trigger relating to asset groups within MPLX’s Western G&P reporting unit as a result of significant changes to expected future cash flows for these asset groups resulting from the effects of COVID-19. The cash flows associated with these assets were significantly impacted by volume declines reflecting decreased forecasted producer customer production as a result of lower commodity prices. We assessed each asset group within the Western G&P reporting unit for impairment. It was determined that the fair value of the East Texas G&P asset group’s underlying assets were less than the carrying value. As a result, MPLX recorded impairment charges totaling $350 million related to its property, plant and equipment and intangibles, which are included in impairment expense on our consolidated statements of income. Fair value of property, plant and equipment was determined using a combination of an income and cost approach. The income approach utilized significant assumptions including management’s best estimates of the expected future cash flows and the estimated useful life of the asset group. The cost approach utilized assumptions for the current replacement costs of similar assets adjusted for estimated depreciation and deterioration of the existing equipment and economic obsolescence. The fair value of the intangibles was determined based on applying the multi-period excess earnings method, which is an income approach. Key assumptions included management’s best estimates of the expected future cash flows from existing customers, customer attrition rates and the discount rate. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the impairment analysis will prove to be an accurate prediction of the future. The fair value measurements for the asset group fair values represent Level 3 measurements.

Consolidated VIE

We control MPLX through our ownership of its general partner. MPLX is a VIE because the limited partners do not have substantive kick-out or participating rights over the general partner. We are the primary beneficiary of MPLX because in addition to our significant economic interest, we also have the ability, through our ownership of the general partner, to control the decisions that most significantly impact MPLX. We therefore consolidate MPLX and record a noncontrolling interest for the interest owned by the public. We also record a redeemable noncontrolling interest related to MPLX’s Series A preferred units.

The creditors of MPLX do not have recourse to MPC’s general credit through guarantees or other financial arrangements, except as noted. MPC has effectively guaranteed certain indebtedness of LOOP LLC (“LOOP”) and LOCAP LLC (“LOCAP”), in which MPLX holds an interest. See Note 24 for more information. The assets of MPLX can only be used to settle their own obligations and their creditors have no recourse to our assets, except as noted earlier.

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The following table presents balance sheet information for the assets and liabilities of MPLX, which are included in our balance sheets.

(In millions)	September 30, 2020				December 31, 2019
Assets
Cash and cash equivalents	$	28			$	15
Receivables, less allowance for doubtful accounts	483				615
Inventories	117				110
Other current assets	60				110
Equity method investments	4,081				5,275
Property, plant and equipment, net	21,815				22,174
Goodwill	7,657				9,536
Right of use assets	323				365
Other noncurrent assets	1,039				1,323
Liabilities
Accounts payable	$	470			$	744
Payroll and benefits payable	3				5
Accrued taxes	93				80
Debt due within one year	307				9
Operating lease liabilities	65				66
Other current liabilities	272				259
Long-term debt	20,042				19,704
Deferred income taxes	12				12
Long-term operating lease liabilities	258				302
Deferred credits and other liabilities	482				409

Transactions with related parties were as follows:

	Three Months Ended  September 30,								Nine Months Ended  September 30,
(In millions)	2020				2019				2020				2019
Sales to related parties	$	35			$	16			$	85			$	47
Purchases from related parties	187				184				540				571

Sales to related parties, which are included in sales and other operating revenues, consist primarily of refined product sales to certain of our equity affiliates.

We compute basic earnings (loss) per share by dividing net income (loss) attributable to MPC less income allocated to participating securities by the weighted average number of shares of common stock outstanding. Since MPC grants certain incentive compensation awards to employees and non-employee directors that are considered to be participating securities, we have calculated our earnings (loss) per share using the two-class method. Diluted income (loss) per share assumes exercise of certain stock-based compensation awards, provided the effect is not anti-dilutive.

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	Three Months Ended  September 30,								Nine Months Ended  September 30,
(In millions, except per share data)	2020				2019				2020				2019
Income (loss) from continuing operations, net of tax	$	(980	)		$	1,113			$	(11,432	)		$	2,372
Less: Net income (loss) attributable to noncontrolling interest	277				272				(440		)		799
Net income allocated to participating securities	—				—				—				1
Income (loss) from continuing operations available to common stockholders	$	(1,257	)		$	841			$	(10,992	)		$	1,572
Income from discontinued operations, net of tax	371				254				881				621
Income (loss) available to common stockholders	$	(886	)		$	1,095			$	(10,111	)		$	2,193
Weighted average common shares outstanding:
Basic	650				656				649				663
Effect of dilutive securities	—				4				—				5
Diluted	650				660				649				668
Income (loss) available to common stockholders per share:
Basic:
Continuing operations	$	(1.93	)		$	1.28			$	(16.93	)		$	2.37
Discontinued operations	0.57				0.39				1.35				0.94
Net income (loss) per share	$	(1.36	)		$	1.67			$	(15.58	)		$	3.31
Diluted:
Continuing operations	$	(1.93	)		$	1.27			$	(16.93	)		$	2.35
Discontinued operations	0.57				0.39				1.35				0.93
Net income (loss) per share	$	(1.36	)		$	1.66			$	(15.58	)		$	3.28

The following table summarizes the shares that were anti-dilutive and, therefore, were excluded from the diluted share calculation.

	Three Months Ended  September 30,						Nine Months Ended  September 30,
(In millions)	2020			2019			2020			2019
Shares issuable under stock-based compensation plans	12			4			11			3

As of September 30, 2020, we had $2.96 billion of remaining share repurchase authorizations from our board of directors. We may utilize various methods to effect the repurchases, which could include open market repurchases, negotiated block transactions, tender offers, accelerated share repurchases or open market solicitations for shares, some of which may be effected through Rule 10b5-1 plans. The timing and amount of future repurchases, if any, will depend upon several factors, including market and business conditions, and such repurchases may be initiated, suspended or discontinued at any time.

Total share repurchases were as follows for the respective periods:

	Three Months Ended  September 30,								Nine Months Ended  September 30,
(In millions, except per share data)	2020				2019				2020				2019
Number of shares repurchased	—				10				—				33
Cash paid for shares repurchased	$	—			$	500			$	—			$	1,885
Average cost per share	$	—			$	53.82			$	—			$	58.75

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On August 2, 2020 we entered into a definitive agreement to sell Speedway to 7-Eleven, Inc. for $21 billion in cash, subject to certain adjustments based on the levels of cash, debt (as defined in the agreement) and working capital at closing and certain other items. In connection with the announced sale, we reassessed our organizational structure and management of segments. As a result of this assessment, we have made the following changes for all periods presented:

•	Speedway’s results are presented separately as discontinued operations. See Note 4 for related disclosures.

•	Refining & Marketing intersegment sales to Speedway that were previously eliminated in consolidation are reported as third party sales as we will continue to supply fuel to the Speedway business following its disposition.

•	The retained direct dealer business results, previously included in the Retail segment, are reported within the Refining & Marketing segment.

•	As a result of the above, we no longer present a separate Retail segment, which had included these two businesses.

•	Corporate costs are no longer allocated to Speedway under discontinued operations accounting.

We have two reportable segments: Refining & Marketing and Midstream. Each of these segments is organized and managed based upon the nature of the products and services it offers.

•

Refining & Marketing – refines crude oil and other feedstocks at our refineries in the Gulf Coast, Mid-Continent and West Coast regions of the United States, purchases refined products and ethanol for resale and distributes refined products through transportation, storage, distribution and marketing services provided largely by our Midstream segment. We sell refined products to wholesale marketing customers domestically and internationally, to buyers on the spot market, to independent entrepreneurs who operate primarily Marathon® branded outlets, through long-term fuel supply contracts with direct dealers who operate locations mainly under the ARCO® brand and to approximately 3,900 Speedway locations.

•	Midstream – transports, stores, distributes and markets crude oil and refined products principally for the Refining & Marketing segment via refining logistics assets, pipelines, terminals, towboats and barges; gathers, processes and transports natural gas; and gathers, transports, fractionates, stores and markets NGLs. The Midstream segment primarily reflects the results of MPLX.

Segment income represents income (loss) from operations attributable to the reportable segments. Corporate administrative expenses, except for those attributable to MPLX, and costs related to certain non-operating assets are not allocated to the Refining & Marketing segment. In addition, certain items that affect comparability (as determined by the chief operating decision maker) are not allocated to the reportable segments.

(In millions)	Refining & Marketing				Midstream				Total
Three Months Ended September 30, 2020
Revenues:
Third party(a)	$	16,493			$	915			$	17,408
Intersegment	23				1,232				1,255
Segment revenues	$	16,516			$	2,147			$	18,663
Segment income (loss) from operations(b)	$	(1,569	)		$	960			$	(609	)
Supplemental Data
Depreciation and amortization(c)	$	456			$	335			$	791
Capital expenditures and investments(d)	254				300				554

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(In millions)	Refining & Marketing				Midstream				Total
Three Months Ended September 30, 2019
Revenues:
Third party(a)	$	26,620			$	932			$	27,552
Intersegment	30				1,232				1,262
Segment revenues	$	26,650			$	2,164			$	28,814
Segment income from operations(b)	$	989			$	919			$	1,908
Supplemental Data
Depreciation and amortization(c)	$	416			$	300			$	716
Capital expenditures and investments(d)	569				783				1,352

(In millions)	Refining & Marketing				Midstream				Total
Nine Months Ended September 30, 2020
Revenues:
Third party(a)	$	49,164			$	2,643			$	51,807
Intersegment	52				3,638				3,690
Segment revenues	$	49,216			$	6,281			$	55,497
Segment income (loss) from operations(b)	$	(3,610	)		$	2,734			$	(876	)
Supplemental Data
Depreciation and amortization(c)	$	1,392			$	1,010			$	2,402
Capital expenditures and investments(d)	995				1,199				2,194

(In millions)	Refining & Marketing				Midstream				Total
Nine Months Ended September 30, 2019
Revenues:
Third party(a)	$	80,315			$	2,825			$	83,140
Intersegment	74				3,677				3,751
Segment revenues	$	80,389			$	6,502			$	86,891
Segment income from operations(b)	$	1,750			$	2,705			$	4,455
Supplemental Data
Depreciation and amortization(c)	$	1,319			$	925			$	2,244
Capital expenditures and investments(d)	1,411				2,420				3,831

(a)	Includes Refining & Marketing sales to Speedway (as discussed above) and related party sales. See Note 8 for additional information.

(b)	Recast to reflect direct dealer income from operations of $103 million and $106 million for the three months ended September 30, 2020 and 2019, respectively, and $303 million and $295 million for the nine months ended September 30, 2020 and 2019, respectively, within the Refining & Marketing segment.

(c)

Recast to reflect direct dealer depreciation of $30 million and $19 million for the three months ended September 30, 2020 and 2019, respectively, and $86 million and $84 million for the nine months ended September 30, 2020 and 2019, respectively, within the Refining & Marketing segment. Differences between segment totals and MPC consolidated totals represent amounts related to corporate and other items not allocated to segments.

(d)

Recast to reflect direct dealer capital expenditures of $6 million and $8 million for the three months ended September 30, 2020 and 2019, respectively, and $25 million and $26 million for the nine months ended September 30, 2020 and 2019, respectively, within the Refining & Marketing segment. Includes changes in capital expenditure accruals and investments in affiliates. See reconciliation from segment totals to MPC consolidated total capital expenditures below.

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The following reconciles segment income from operations to income (loss) from continuing operations before income taxes as reported in the consolidated statements of income:

	Three Months Ended  September 30,								Nine Months Ended  September 30,
(In millions)	2020				2019				2020				2019
Segment income (loss) from operations	$	(609	)		$	1,908			$	(876	)		$	4,455
Corporate(a)	(197		)		(206		)		(625		)		(589		)
Items not allocated to segments:
Equity method investment restructuring gain(b)	—				—				—				207
Transaction-related costs(c)	—				(22		)		(8		)		(147		)
Litigation	—				—				—				(22		)
Impairments(d)	(433		)		—				(9,595		)		—
Restructuring expenses(e)	(348		)		—				(348		)		—
LCM inventory valuation adjustment(f)	530				—				(1,185		)		—
Income (loss) from continuing operations	(1,057		)		1,680				(12,637		)		3,904
Net interest and other financial costs	359				312				1,032				932
Income (loss) from continuing operations before income taxes	$	(1,416	)		$	1,368			$	(13,669	)		$	2,972

(a)

Corporate consists primarily of MPC’s corporate administrative expenses and costs related to certain non-operating assets, except for corporate overhead expenses attributable to MPLX, which are included in the Midstream segment. Corporate includes corporate costs of $7 million and $8 million for the three months ended September 30, 2020 and 2019, respectively, and $20 million and $21 million for nine months ended September 30, 2020 and 2019, respectively, that are no longer allocable to Speedway under discontinued operations accounting.

(b)	Includes gain related to Capline Pipeline Company LLC (“Capline LLC”). See Note 15.

(c)	2020 includes costs incurred in connection with the Midstream strategic review. Costs incurred in 2020 in connection with the Speedway separation are included in discontinued operations. See Note 4. 2019 includes employee severance, retention and other costs related to the acquisition of Andeavor.

(d)	Includes goodwill impairment, impairment of equity method investments and impairment of long lived assets. See Note 6 for additional information.

(e)	See Note 3.

(f)	See Note 14.

The following reconciles segment capital expenditures and investments to total capital expenditures:

	Three Months Ended  September 30,								Nine Months Ended  September 30,
(In millions)	2020				2019				2020				2019
Segment capital expenditures and investments	$	554			$	1,352			$	2,194			$	3,831
Less investments in equity method investees	53				197				436				792
Plus items not allocated to segments:
Corporate	16				30				61				44
Capitalized interest	29				32				85				97
Total capital expenditures(a)	$	546			$	1,217			$	1,904			$	3,180

(a)	Includes changes in capital expenditure accruals. See Note 21 for a reconciliation of total capital expenditures to additions to property, plant and equipment for the nine months ended September 30, 2020 and 2019 as reported in the consolidated statements of cash flows.

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Net interest and other financial costs were as follows:

	Three Months Ended  September 30,								Nine Months Ended  September 30,
(In millions)	2020				2019				2020				2019
Interest income	$	(1	)		$	(12	)		$	(9	)		$	(30	)
Interest expense	376				349				1,102				1,037
Interest capitalized	(32		)		(44		)		(103		)		(111		)
Pension and other postretirement non-service costs(a)	6				6				2				6
Other financial costs	10				13				40				30
Net interest and other financial costs	$	359			$	312			$	1,032			$	932

(a)	See Note 23.

We have historically provided for income taxes during interim reporting periods based on an estimate of the annual effective tax rate applied to book income for the year to date interim period. For 2020, we continue to utilize this approach.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted by Congress and signed into law by the President in response to the COVID-19 pandemic. The CARES Act contains numerous income tax provisions, some of which have the potential to materially impact MPC's calculation of income taxes including:

•	Revising the limitations on the deductibility of interest from 30 percent of adjusted taxable income to 50 percent.

•

Ability to carry back tax net operating losses ("NOL") five years for NOLs arising in taxable years 2018 through 2020. This provision allows the taxpayer to recover taxes previously paid at a 35 percent federal income tax rate during years prior to 2018. The limitation on the percentage of taxable income that may be offset by the NOL, formerly 80 percent of income, was eliminated for years beginning before 2021.

The income tax benefit from continuing and discontinued operations, as recorded on the balance sheet, was $2.0 billion for the nine months ended September 30, 2020. Approximately $354 million of the recorded benefit was attributable to the income tax rate differential in the NOL carryback years. Absent the CARES Act, we would have recorded a deferred tax asset for the expected NOL carryforward under the currently effective federal income tax rate.

Based on the estimated NOL carryback, as provided by the CARES Act, we recorded an income tax receivable of $1.2 billion in other current assets to reflect our estimate of the tax refund we expect to realize from our 2020 federal tax return. The refund is expected to be received during the second half of 2021. 

The combined federal, state and foreign income tax rate was 31 percent (tax benefit rate) and 19 percent for the three months ended September 30, 2020 and 2019, respectively, and 16 percent and 20 percent for the nine months ended September 30, 2020 and 2019, respectively. The effective tax benefit rate for the three months ended September 30, 2020 was higher than the U.S. statutory rate due to certain permanent tax benefits related to net income attributable to noncontrolling interests, state taxes, and a change in estimate related to the expected NOL carryback provided by the CARES Act offset by non-tax deductible goodwill impairment. The effective tax rate for the three months ended September 30, 2019 was less than the U.S. statutory rate primarily due to certain permanent tax differences related to net income attributable to noncontrolling interests offset by equity compensation and state and local tax expense. The effective tax rate for the nine months ended September 30, 2020 was lower than the statutory rate due to a significant amount of our pre-tax loss consisting of non-tax deductible goodwill impairment charges, partially offset by the tax rate differential resulting from the expected NOL carryback provided under the CARES Act. The effective tax rate for the nine months ended September 30, 2019 was less than the U.S. statutory rate primarily due to $36 million of state deferred tax expense recorded as an out of period adjustment, offset by permanent tax differences related to net income attributable to noncontrolling interests.

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A reconciliation of the continuing operations tax provision (benefit) in dollars as determined using the federal statutory income tax rate applied to income (loss) before income taxes to the (benefit) provision for income taxes is shown in the table below.

	Three Months Ended  September 30,								Nine Months Ended  September 30,
(In millions)	2020				2019				2020				2019
Tax computed at statutory rate	$	(297	)		$	287			$	(2,870	)		$	624
State and local income taxes, net of federal income tax effects	(59		)		63				(275		)		136
Goodwill impairment	13				—				1,170				—
Noncontrolling interests	(63		)		(109		)		81				(195		)
CARES Act legislation	(29		)		—				(354		)		—
Other	(1		)		14				11				35
Total provision (benefit) for income tax from continuing operations	$	(436	)		$	255			$	(2,237	)		$	600

During the first quarter of 2019, MPC’s provision for income taxes was increased $36 million for an out of period adjustment to correct the tax effects recorded in 2018 related to the Andeavor acquisition. The impact of the adjustment was not material to any previous period.

We are continuously undergoing examination of our income tax returns, which have been completed through the 2005 tax year for state returns and the 2010 tax year for our U.S. federal return. As of September 30, 2020, we had $20 million of unrecognized tax benefits.

Pursuant to our tax sharing agreement with Marathon Oil, the unrecognized tax benefits related to pre-spinoff operations for which Marathon Oil was the taxpayer remain the responsibility of Marathon Oil and we have indemnified Marathon Oil accordingly. See Note 24 for indemnification information.

(In millions)	September 30, 2020				December 31, 2019
Crude oil	$	2,481			$	3,472
Refined products	5,198				5,359
Materials and supplies	909				973
Inventories before LCM inventory valuation reserve	8,588				9,804
LCM inventory valuation reserve	(1,185		)		—
Total	$	7,403			$	9,804

Inventories are carried at the lower of cost or market value. Costs of crude oil and refined products are aggregated on a consolidated basis for purposes of assessing whether the LIFO cost basis of these inventories may have to be written down to market values. At September 30, 2020, market values for these inventories were lower than their LIFO cost basis, resulting in a reserve. The change from the LCM inventory valuation reserve at June 30, 2020 resulted in a benefit of $530 million for the three months ended September 30, 2020.

During the three months ended March 31, 2019, we executed agreements with Capline LLC to contribute our 33 percent undivided interest in the Capline pipeline system in exchange for a 33 percent ownership interest in Capline LLC. In connection with our execution of these agreements, Capline LLC initiated a binding open season for southbound service from Patoka, Illinois to St. James, Louisiana or Liberty, Mississippi with an additional origination point at Cushing, Oklahoma. Service from Cushing, Oklahoma is part of a joint tariff with Diamond pipeline.

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In accordance with ASC 810, we derecognized our undivided interest amounting to $143 million of net assets and recognized the Capline LLC ownership interest we received at fair value. We used an income approach to determine the fair value of our ownership interest under a Monte Carlo simulation method. We estimated the fair value of our ownership interest to be $350 million. This is a nonrecurring fair value measurement and is categorized in Level 3 of the fair value hierarchy. The Monte Carlo simulation inputs include ranges of tariff rates, operating volumes, operating cost and capital expenditure assumptions. The estimated cash flows were discounted using a Monte Carlo market participant weighted average cost of capital estimate. None of the inputs to the Monte Carlo simulation are individually significant. The excess of the estimated fair value of our ownership interest over the carrying value of the derecognized net assets resulted in a $207 million non-cash net gain recorded as a net gain on disposal of assets in the accompanying consolidated statements of income.

As the Capline system is currently idled, Capline LLC is unable to fund its operations without financial support from its equity owners and is a VIE. MPC is not deemed to be the primary beneficiary, due to our inability to unilaterally control significant decision-making rights. Our maximum exposure to loss as a result of our involvement with Capline LLC includes our equity investment, any additional capital contribution commitments and any operating expenses incurred by Capline LLC in excess of compensation received for performance of the operating services.

(In millions)	September 30, 2020				December 31, 2019
Refining & Marketing(a)	$	30,155			$	29,101
Midstream	27,823				27,193
Corporate	1,346				1,292
Total	59,324				57,586
Less accumulated depreciation(b)	19,567				16,716
Property, plant and equipment, net	$	39,757			$	40,870

(a)	Recast to include the direct dealer business. See Note 11 for additional information.

(b)	The September 30, 2020 balance includes property, plant and equipment impairment charges recorded during 2020. See Note 6 for additional information.

Fair Values—Recurring

The following tables present assets and liabilities accounted for at fair value on a recurring basis as of September 30, 2020 and December 31, 2019 by fair value hierarchy level. We have elected to offset the fair value amounts recognized for multiple derivative contracts executed with the same counterparty, including any related cash collateral as shown below; however, fair value amounts by hierarchy level are presented on a gross basis in the following tables.

	September 30, 2020
	Fair Value Hierarchy
(In millions)	Level 1				Level 2				Level 3				Netting and Collateral(a)				Net Carrying Value on Balance Sheet(b)				Collateral Pledged Not Offset
Assets:
Commodity contracts	$	62			$	3			$	—			$	(59	)		$	6			$	39
Liabilities:
Commodity contracts	$	56			$	3			$	—			$	(59	)		$	—			$	—
Embedded derivatives in commodity contracts	—				—				61				—				61				—

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	December 31, 2019
	Fair Value Hierarchy
(In millions)	Level 1				Level 2				Level 3				Netting and Collateral(a)				Net Carrying Value on Balance Sheet(b)				Collateral Pledged Not Offset
Assets:
Commodity contracts	$	57			$	6			$	—			$	(55	)		$	8			$	73
Liabilities:
Commodity contracts	$	95			$	11			$	—			$	(106	)		$	—			$	—
Embedded derivatives in commodity contracts	—				—				60				—				60				—

(a)	Represents the impact of netting assets, liabilities and cash collateral when a legal right of offset exists. As of September 30, 2020, cash collateral of less than $1 million was netted with the mark-to-market derivative liabilities. As of December 31, 2019, cash collateral of $51 million was netted with mark-to-market derivative liabilities.

(b)	We have no derivative contracts that are subject to master netting arrangements reflected gross on the balance sheet.

Commodity derivatives in Level 1 are exchange-traded contracts for crude oil and refined products measured at fair value with a market approach using the close-of-day settlement prices for the market. Commodity derivatives are covered under master netting agreements with an unconditional right to offset. Collateral deposits in futures commission merchant accounts covered by master netting agreements related to Level 1 commodity derivatives are classified as Level 1 in the fair value hierarchy.

Level 2 instruments are valued based on quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices, such as liquidity, that are observable for the asset or liability. Commodity derivatives in Level 2 are OTC contracts, which are valued using market quotations from independent price reporting agencies, third-party brokers and commodity exchange price curves that are corroborated with market data.

Level 3 instruments are OTC NGL contracts and embedded derivatives in commodity contracts. The embedded derivative liability relates to a natural gas purchase agreement embedded in a keep‑whole processing agreement. The fair value calculation for these Level 3 instruments at September 30, 2020 used significant unobservable inputs including: (1) NGL prices interpolated and extrapolated due to inactive markets ranging from $0.46 to $0.97 per gallon with a weighted average of $0.58 per gallon and (2) the probability of renewal of 100 percent for the first five-year term and 100 percent for the second five-year term of the natural gas purchase agreement and the related keep-whole processing agreement. Increases or decreases in the fractionation spread result in an increase or decrease in the fair value of the embedded derivative liability. An increase in the probability of renewal would result in an increase in the fair value of the related embedded derivative liability.

The following is a reconciliation of the beginning and ending balances recorded for net liabilities classified as Level 3 in the fair value hierarchy.

	Three Months Ended  September 30,								Nine Months Ended  September 30,
(In millions)	2020				2019				2020				2019
Beginning balance	$	51			$	65			$	60			$	61
Unrealized and realized losses/(gains) included in net income	12				(9		)		5				(2		)
Settlements of derivative instruments	(2		)		(2		)		(4		)		(5		)
Ending balance	$	61			$	54			$	61			$	54
The amount of total losses/(gains) for the period included in earnings attributable to the change in unrealized losses/(gains) relating to assets still held at the end of period:	$	11			$	(9	)		$	2			$	(5	)

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Fair Values – Reported

We believe the carrying value of our other financial instruments, including cash and cash equivalents, receivables, accounts payable and certain accrued liabilities, approximate fair value. Our fair value assessment incorporates a variety of considerations, including the short-term duration of the instruments and the expected insignificance of bad debt expense, which includes an evaluation of counterparty credit risk. The borrowings under our revolving credit facilities and term loan facility, which include variable interest rates, approximate fair value. The fair value of our fixed and floating rate long-term debt is based on prices from recent trade activity and is categorized in level 3 of the fair value hierarchy. The carrying and fair values of our debt were approximately $31.4 billion and $33.3 billion at September 30, 2020, respectively, and approximately $28.3 billion and $30.1 billion at December 31, 2019, respectively. These carrying and fair values of our debt exclude the unamortized issuance costs which are netted against our total debt.

For further information regarding the fair value measurement of derivative instruments, including any effect of master netting agreements or collateral, see Note 17. We do not designate any of our commodity derivative instruments as hedges for accounting purposes.

Derivatives that are not designated as accounting hedges may include commodity derivatives used to hedge price risk on (1) inventories, (2) fixed price sales of refined products, (3) the acquisition of foreign-sourced crude oil, (4) the acquisition of ethanol for blending with refined products, (5) the sale of NGLs and (6) the purchase of natural gas.

The following table presents the fair value of derivative instruments as of September 30, 2020 and December 31, 2019 and the line items in the balance sheets in which the fair values are reflected. The fair value amounts below are presented on a gross basis and do not reflect the netting of asset and liability positions permitted under the terms of our master netting arrangements including cash collateral on deposit with, or received from, brokers. We offset the recognized fair value amounts for multiple derivative instruments executed with the same counterparty in our financial statements when a legal right of offset exists. As a result, the asset and liability amounts below will not agree with the amounts presented in our consolidated balance sheets.

(In millions)	September 30, 2020
Balance Sheet Location	Asset				Liability
Commodity derivatives
Other current assets	$	65			$	59
Other current liabilities(a)	—				4
Deferred credits and other liabilities(a)	—				57

(In millions)	December 31, 2019
Balance Sheet Location	Asset				Liability
Commodity derivatives
Other current assets	$	63			$	106
Other current liabilities(a)	—				5
Deferred credits and other liabilities(a)	—				55

(a)	Includes embedded derivatives.

The table below summarizes open commodity derivative contracts for crude oil, refined products and blending products as of September 30, 2020.

	Percentage of contracts that expire next quarter		Position
(Units in thousands of barrels)			Long			Short
Exchange-traded(a)
Crude oil	98.6%		8,756			6,691
Refined products	95.4%		27,158			20,138
Blending products	94.3%		1,775			6,107

(a)	Included in exchange-traded are spread contracts in thousands of barrels: Crude oil - 2,460 long and 1,260 short; Refined products - 200 long and 200 short; Blending products - 75 short

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The following table summarizes the effect of all commodity derivative instruments in our consolidated statements of income: 

	Gain (Loss)
(In millions)	Three Months Ended  September 30,								Nine Months Ended  September 30,
Income Statement Location	2020				2019				2020				2019
Sales and other operating revenues	$	—			$	(1	)		$	77			$	(18	)
Cost of revenues	(23		)		50				3				(15		)
Total	$	(23	)		$	49			$	80			$	(33	)

Our outstanding borrowings at September 30, 2020 and December 31, 2019 consisted of the following:

(In millions)	September 30, 2020				December 31, 2019
Marathon Petroleum Corporation:
Senior notes	$	10,974			$	8,474
Notes payable	1				1
Finance lease obligations	613				574
MPLX LP:
Bank revolving credit facility	95				—
Term loan facility	—				1,000
Senior notes	20,650				19,100
Finance lease obligations	12				19
Total debt	$	32,345			$	29,168
Unamortized debt issuance costs	(159		)		(134		)
Unamortized (discount) premium, net	(309		)		(310		)
Amounts due within one year	(2,500		)		(704		)
Total long-term debt due after one year	$	29,377			$	28,020

Available Capacity under our Credit Facilities as of September 30, 2020

(Dollars in millions)		Total Capacity				Outstanding Borrowings				Outstanding Letters of Credit				Available Capacity				Weighted Average Interest Rate			Expiration
MPC, excluding MPLX
MPC 364-day bank revolving credit facility		$	1,000			$	—			$	—			$	1,000			—			September 2021
MPC 364-day bank revolving credit facility		1,000				—				—				1,000				—			April 2021
MPC bank revolving credit facility(a)		5,000				—				1				4,999				—			October 2023
MPC trade receivables securitization facility(b)		750				—				—				750				—			July 2021
MPLX
MPLX bank revolving credit facility(c)		3,500				95				—				3,405				1.40	%		July 2024

(a)	Borrowed $3.5 billion and repaid $3.5 billion during the nine months ended September 30, 2020.

(b)	Borrowed $1.225 billion and repaid $1.225 billion during the nine months ended September 30, 2020. Availability under our $750 million trade receivables facility is a function of eligible trade receivables, which will be lower in a sustained lower price environment for refined products.

(c)	Borrowed $2.995 billion and repaid $2.9 billion during the nine months ended September 30, 2020.

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MPC 364-Day Bank Revolving Credit Facilities

On September 23, 2020, MPC entered into a 364-day revolving credit agreement with a syndicate of lenders. This revolving credit agreement provides for a $1.0 billion unsecured revolving credit facility that matures in September 2021, and replaces a similar 364-day revolving credit agreement that expired on September 28, 2020.

MPC is also party to an April 27, 2020 364-day revolving credit agreement that provides for a $1.0 billion unsecured revolving credit facility that matures in April 2021.

These two credit agreements contain representations and warranties, affirmative and negative covenants and events of default that MPC considers customary for agreements of similar nature and type and that are substantially similar to each other and those contained in the credit agreement for MPC’s $5.0 billion bank revolving credit facility.

MPC Senior Notes

On April 27, 2020, we closed on the issuance of $2.5 billion in aggregate principal amount of senior notes in a public offering, consisting of $1.25 billion aggregate principal amount of 4.500 percent unsecured senior notes due May 2023 and $1.25 billion aggregate principal amount of 4.700 percent unsecured senior notes due May 2025. Interest is payable semi-annually in arrears. MPC used the net proceeds from this offering to repay certain amounts outstanding under its five-year revolving credit facility.

On September 25, 2020, we announced that all of the $650 million outstanding aggregate principal amount of 3.400 percent senior notes due December 2020 will be redeemed on November 15, 2020, at a price equal to par, plus accrued and unpaid interest to, but not including, such date.

On October 1, 2020, all of the $475 million outstanding aggregate principal amount of 5.375 percent senior notes due October 2022 were redeemed at a price equal to par.

MPLX Senior Notes

On August 18, 2020, MPLX issued $3.0 billion aggregate principal amount of senior notes in a public offering, consisting of $1.5 billion aggregate principal amount of 1.750 percent senior notes due March 2026 and $1.5 billion aggregate principal amount of 2.650 percent senior notes due August 2030. Interest is payable semi-annually in arrears.

During the third quarter of 2020, a portion of the net proceeds from the senior notes offering was used to repay $1.0 billion of outstanding borrowings under the MPLX term loan agreement, to repay the $1.0 billion floating rate senior notes due September 2021 and to redeem all of the $450 million aggregate principal amount of 6.375 percent senior notes due May 2024.

On October 15, 2020, a portion of the remaining net proceeds from the senior notes offering was used to redeem all of the $300 million aggregate principal amount of MPLX’s 6.250 percent senior notes due October 2022.

As discussed in Notes 1 and 11, the presentation of Refining & Marketing segment revenues reflects changes associated with the expected sale of our Speedway business and our new reportable segments. The following table presents our revenues disaggregated by segment and product line.

(In millions)	Refining & Marketing				Midstream				Total
Three Months Ended September 30, 2020
Refined products	$	15,356			$	166			$	15,522
Crude oil	990				—				990
Midstream services and other	147				749				896
Sales and other operating revenues	$	16,493			$	915			$	17,408

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(In millions)	Refining & Marketing				Midstream				Total
Three Months Ended September 30, 2019
Refined products	$	25,661			$	174			$	25,835
Crude oil	792				—				792
Midstream services and other	167				758				925
Sales and other operating revenues	$	26,620			$	932			$	27,552

(In millions)	Refining & Marketing				Midstream				Total
Nine Months Ended September 30, 2020
Refined products	$	45,893			$	460			$	46,353
Crude oil	2,868				—				2,868
Midstream services and other	403				2,183				2,586
Sales and other operating revenues	$	49,164			$	2,643			$	51,807

(In millions)	Refining & Marketing				Midstream				Total
Nine Months Ended September 30, 2019
Refined products	$	76,703			$	585			$	77,288
Crude oil	3,173				—				3,173
Midstream services and other	439				2,240				2,679
Sales and other operating revenues	$	80,315			$	2,825			$	83,140

We do not disclose information on the future performance obligations for any contract with expected duration of one year or less at inception. As of September 30, 2020, we do not have future performance obligations that are material to future periods.

Receivables

	Nine Months Ended  September 30,
(In millions)	2020				2019
Net cash provided by operating activities included:
Interest paid (net of amounts capitalized)	$	901			$	867
Net income taxes paid to (received from) taxing authorities	(130		)		376
Non-cash investing and financing activities:
Contribution of assets(a)	—				143
Fair value of assets acquired(b)	—				350

(a)	2019 includes the contribution of net assets to Capline LLC. See Note 15.

(b)	2019 includes the recognition of the Capline LLC equity method investment. See Note 15.

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(In millions)	September 30, 2020				December 31, 2019
Cash and cash equivalents(a)	$	618			$	1,393
Restricted cash(b)	2				2
Cash, cash equivalents and restricted cash	$	620			$	1,395

(a)	Excludes $98 million and $134 million of cash included in assets held for sale representing Speedway store cash.

(b)	The restricted cash balance is included within other current assets on the consolidated balance sheets.

The consolidated statements of cash flows exclude changes to the consolidated balance sheets that did not affect cash. The following is a reconciliation of additions to property, plant and equipment to total capital expenditures:

	Nine Months Ended  September 30,
(In millions)	2020				2019
Additions to property, plant and equipment per the consolidated statements of cash flows	$	2,330			$	3,461
Asset retirement expenditures	—				1
Decrease in capital accruals	(426		)		(282		)
Total capital expenditures	$	1,904			$	3,180

The following table shows the changes in accumulated other comprehensive loss by component. Amounts in parentheses indicate debits.

(In millions)	Pension Benefits				Other Benefits				Gain on Cash Flow Hedge				Workers Compensation				Total
Balance as of December 31, 2018	$	(132	)		$	(23	)		$	2			$	9			$	(144	)
Other comprehensive income (loss) before reclassifications, net of tax of ($20)	(58		)		1				—				—				(57		)
Amounts reclassified from accumulated other comprehensive loss:
Amortization – prior service credit(a)	(34		)		—				—				—				(34		)
– actuarial loss(a)	16				(1		)		—				—				15
– settlement loss(a)	9				—				—				—				9
Other	—				—				—				(4		)		(4		)
Tax effect	2				—				—				1				3
Other comprehensive loss	(65		)		—				—				(3		)		(68		)
Balance as of September 30, 2019	$	(197	)		$	(23	)		$	2			$	6			$	(212	)

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(In millions)	Pension Benefits				Other Benefits				Gain on Cash Flow Hedge				Workers Compensation				Total
Balance as of December 31, 2019	$	(212	)		$	(116	)		$	1			$	7			$	(320	)
Other comprehensive loss before reclassifications, net of tax of ($4)	(12		)		(2		)		—				—				(14		)
Amounts reclassified from accumulated other comprehensive loss:
Amortization – prior service credit(a)	(34		)		—				—				—				(34		)
– actuarial loss(a)	27				2				—				—				29
– settlement loss(a)	10				—				—				—				10
Other	—				—				—				(5		)		(5		)
Tax effect	(1		)		—				—				1				—
Other comprehensive loss	(10		)		—				—				(4		)		(14		)
Balance as of September 30, 2020	$	(222	)		$	(116	)		$	1			$	3			$	(334	)

(a)	These accumulated other comprehensive loss components are included in the computation of net periodic benefit cost. See Note 23.

The following summarizes the components of net periodic benefit costs:

	Three Months Ended September 30,
	Pension Benefits						Other Benefits
(In millions)	2020			2019			2020			2019
Components of net periodic benefit cost:
Service cost	70			51			9			9
Interest cost	25			27			8			8
Expected return on plan assets	(33	)		(30	)		—			—
Amortization – prior service credit	(12	)		(11	)		—			—
– actuarial loss	9			5			1			—
– settlement loss	8			7			—			—
Net periodic benefit cost	67			49			18			17

	Nine Months Ended September 30,
	Pension Benefits								Other Benefits
(In millions)	2020				2019				2020				2019
Components of net periodic benefit cost:
Service cost	$	210			$	161			$	27			$	24
Interest cost	73				81				24				27
Expected return on plan assets	(98		)		(93		)		—				—
Amortization – prior service credit	(34		)		(34		)		—				—
– actuarial loss	26				16				2				—
– settlement loss	9				9				—				—
Net periodic benefit cost	$	186			$	140			$	53			$	51

The components of net periodic benefit cost other than the service cost component are included in net interest and other financial costs on the consolidated statements of income.

During the nine months ended September 30, 2020, we made contributions of $3 million to our funded pension plans. Benefit payments related to unfunded pension and other postretirement benefit plans were $51 million and $29 million, respectively, during the nine months ended September 30, 2020.

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We are the subject of, or a party to, a number of pending or threatened legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relating to the environment. Some of these matters are discussed below. For matters for which we have not recorded a liability, we are unable to estimate a range of possible loss because the issues involved have not been fully developed through pleadings, discovery or court proceedings. However, the ultimate resolution of some of these contingencies could, individually or in the aggregate, be material.

Environmental Matters

We are subject to federal, state, local and foreign laws and regulations relating to the environment. These laws generally provide for control of pollutants released into the environment and require responsible parties to undertake remediation of hazardous waste disposal sites and certain other locations including presently or formerly owned or operated retail marketing sites. Penalties may be imposed for noncompliance.

At September 30, 2020 and December 31, 2019, accrued liabilities for remediation totaled $388 million and $396 million, respectively. It is not presently possible to estimate the ultimate amount of all remediation costs that might be incurred or the penalties, if any, that may be imposed. Receivables for recoverable costs from certain states, under programs to assist companies in clean-up efforts related to underground storage tanks at presently or formerly owned or operated retail marketing sites, were $7 million and $9 million at September 30, 2020 and December 31, 2019, respectively.

Governmental and other entities in California, Delaware, Hawaii, Maryland, New York, South Carolina and Rhode Island have filed lawsuits against coal, gas, oil and petroleum companies, including MPC. The lawsuits allege damages as a result of climate change and the plaintiffs are seeking unspecified damages and abatement under various tort theories. Similar lawsuits may be filed in other jurisdictions. At this early stage, the ultimate outcome of these matters remains uncertain, and neither the likelihood of an unfavorable outcome nor the ultimate liability, if any, can be determined.

We are involved in a number of environmental enforcement matters arising in the ordinary course of business. While the outcome and impact to us cannot be predicted with certainty, management believes the resolution of these environmental matters will not, individually or collectively, have a material adverse effect on our consolidated results of operations, financial position or cash flows.

Other Legal Proceedings

In early July 2020, MPLX received a Notification of Trespass Determination from the Bureau of Indian Affairs (“BIA”) relating to a portion of the Tesoro High Plains Pipeline that crosses the Fort Berthold Reservation in North Dakota. The notification covered the rights of way for 23 tracts of land and demanded the immediate cessation of pipeline operations. The notification also assessed trespass damages of approximately $187 million. MPLX appealed this determination, which triggered an automatic stay of the requested pipeline shutdown and payment. On October 29, the Assistant Secretary - Indian Affairs issued an order vacating the BIA’s trespass order and requiring the Regional Director for the BIA Great Plains Region to issue a new decision on or before December 15 covering all 34 tracts at issue.

MPLX continues to work towards a settlement of this matter with holders of the property rights at issue. Management does not believe the ultimate resolution of this matter will have a material adverse effect on our consolidated financial position, results of operations, or cash flows.

We are also a party to a number of other lawsuits and other proceedings arising in the ordinary course of business. While the ultimate outcome and impact to us cannot be predicted with certainty, we believe that the resolution of these other lawsuits and proceedings will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Guarantees

We have provided certain guarantees, direct and indirect, of the indebtedness of other companies. Under the terms of most of these guarantee arrangements, we would be required to perform should the guaranteed party fail to fulfill its obligations under the specified arrangements. In addition to these financial guarantees, we also have various performance guarantees related to specific agreements.

Guarantees related to indebtedness of equity method investees

LOOP and LOCAP

MPC and MPLX hold interests in an offshore oil port, LOOP, and MPLX holds an interest in a crude oil pipeline system, LOCAP. Both LOOP and LOCAP have secured various project financings with throughput and deficiency agreements. Under the agreements, MPC, as a shipper, is required to advance funds if the investees are unable to service their debt. Any such advances are considered prepayments of future transportation charges. The duration of the agreements varies but tends to

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follow the terms of the underlying debt, which extend through 2037. Our maximum potential undiscounted payments under these agreements for the debt principal totaled $171 million as of September 30, 2020.

Gray Oak Pipeline, LLC

In connection with our 25 percent interest in Gray Oak Pipeline, LLC (“Gray Oak Pipeline”), we entered into an Equity Contribution Agreement that obligated us to make certain equity contributions to Gray Oak Pipeline to support its obligations under a construction loan facility. Gray Oak is a crude oil transportation system from West Texas and the Eagle Ford formation to destinations in the Ingleside, Corpus Christi and Sweeney, Texas markets. Gray Oak Pipeline entered into the construction loan facility with a syndicate of banks to finance a portion of the construction costs of the pipeline project.

The Equity Contribution Agreement required us to contribute our pro rata share of any amounts necessary to allow Gray Oak Pipeline to cure any payment defaults under the construction loan facility or to repay all amounts outstanding under the facility, including principal, accrued interest, fees and expenses, in certain circumstances, including the failure of Gray Oak Pipeline to repay or refinance the construction loan facility prior to its scheduled maturity date of June 3, 2022. The construction loan facility was repaid in full with the proceeds of a senior, unsecured notes offering undertaken by Gray Oak Pipeline, and our obligations under the Equity Contribution Agreement automatically terminated during the third quarter of 2020.

Dakota Access Pipeline

In connection with MPLX’s 9.19 percent indirect interest in a joint venture (“Dakota Access”) that owns and operates the Dakota Access Pipeline and Energy Transfer Crude Oil Pipeline projects, collectively referred to as the Bakken Pipeline system, MPLX has entered into a Contingent Equity Contribution Agreement. MPLX, along with the other joint venture owners in the Bakken Pipeline system, has agreed to make equity contributions to the joint venture upon certain events occurring to allow the entities that own and operate the Bakken Pipeline system to satisfy their senior note payment obligations. The senior notes were issued to repay amounts owed by the pipeline companies to fund the cost of construction of the Bakken Pipeline system.

In March 2020, the U.S. District Court for the District of Columbia (the “D.D.C.”) ordered the U.S. Army Corps of Engineers (“Army Corps”), which granted permits and an easement for the Bakken Pipeline system, to conduct a full environmental impact statement (“EIS”), and further requested briefing on whether an easement necessary for the operation of the Bakken Pipeline system should be vacated while the EIS is being prepared.

On July 6, 2020, the D.D.C. ordered vacatur of the easement to cross Lake Oahe during the pendency of an EIS and further ordered a shut down of the pipeline by August 5, 2020. The D.D.C. denied a motion to stay that order. Dakota Access and the Army Corps appealed the D.D.C.’s order to the U.S. Court of Appeals for the District of Columbia Circuit (the “Court of Appeals”). On July 14, 2020, the Court of Appeals issued an administrative stay while the court considered Dakota Access and the Army Corps’ emergency motion for stay pending appeal. On August 5, 2020, the Court of Appeals stayed the D.D.C.’s injunction that required the pipeline be shutdown and emptied of oil by August 5, 2020. The Court of Appeals denied a stay of the D.D.C.’s March order, which required the EIS, and further denied a stay of the D.D.C.’s July order, which vacated the easement. In the D.D.C., briefing is ongoing for a renewed request for an injunction, which is expected to be completed by the end of 2020. Oral argument on the merits of the case at the Court of Appeals occurred on November 4, 2020. The pipeline remains operational.

If the pipeline is temporarily shut down pending completion of the EIS, MPLX would have to contribute its 9.19 percent pro rata share of funds required to pay interest accruing on the notes and any portion of the principal that matures while the pipeline is shutdown. It is expected that MPLX would contribute its 9.19 percent pro rata share of any costs to remediate any deficiencies to reinstate the permit and/or return the pipeline into operation. If the vacatur of the easement permit results in a permanent shutdown of the pipeline, MPLX would have to contribute its 9.19 percent pro rata share of the cost to redeem the bonds (including the one percent redemption premium required pursuant to the indenture governing the notes) and any accrued and unpaid interest. As of September 30, 2020, our maximum potential undiscounted payments under the Contingent Equity Contribution Agreement were approximately $230 million.

Crowley Ocean Partners LLC and Crowley Blue Water Partners LLC

In connection with our 50 percent indirect interest in Crowley Ocean Partners LLC, we have agreed to conditionally guarantee our portion of the obligations of the joint venture and its subsidiaries under a senior secured term loan agreement. The term loan agreement provides for loans of up to $325 million to finance the acquisition of four product tankers. MPC’s liability under the guarantee for each vessel is conditioned upon the occurrence of certain events, including if we cease to maintain an investment grade credit rating or the charter for the relevant product tanker ceases to be in effect and is not replaced by a charter with an investment grade company on certain defined commercial terms. As of September 30, 2020, our maximum potential undiscounted payments under this agreement for debt principal totaled $119 million.

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In connection with our 50 percent indirect interest in Crowley Blue Water Partners LLC, we have agreed to provide a conditional guarantee of up to 50 percent of its outstanding debt balance in the event there is no charter agreement in place with an investment grade customer for the entity’s three vessels as well as other financial support in certain circumstances. As of September 30, 2020, our maximum potential undiscounted payments under this arrangement was $115 million.

Marathon Oil indemnifications

The separation and distribution agreement and other agreements with Marathon Oil to effect our spinoff provide for cross-indemnities between Marathon Oil and us. In general, Marathon Oil is required to indemnify us for any liabilities relating to Marathon Oil’s historical oil and gas exploration and production operations, oil sands mining operations and integrated gas operations, and we are required to indemnify Marathon Oil for any liabilities relating to Marathon Oil’s historical refining, marketing and transportation operations. The terms of these indemnifications are indefinite and the amounts are not capped.

Other guarantees

We have entered into other guarantees with maximum potential undiscounted payments totaling $94 million as of September 30, 2020, which primarily consist of a commitment to contribute cash to an equity method investee for certain catastrophic events, in lieu of procuring insurance coverage, a commitment to fund a share of the bonds issued by a government entity for construction of public utilities in the event that other industrial users of the facility default on their utility payments and leases of assets containing general lease indemnities and guaranteed residual values.

General guarantees associated with dispositions

Over the years, we have sold various assets in the normal course of our business. Certain of the related agreements contain performance and general guarantees, including guarantees regarding inaccuracies in representations, warranties, covenants and agreements, and environmental and general indemnifications that require us to perform upon the occurrence of a triggering event or condition. These guarantees and indemnifications are part of the normal course of selling assets. We are typically not able to calculate the maximum potential amount of future payments that could be made under such contractual provisions because of the variability inherent in the guarantees and indemnities. Most often, the nature of the guarantees and indemnities is such that there is no appropriate method for quantifying the exposure because the underlying triggering event has little or no past experience upon which a reasonable prediction of the outcome can be based.

Contractual Commitments and Contingencies

At September 30, 2020, our contractual commitments to acquire property, plant and equipment and advance funds to equity method investees totaled $447 million.

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•	future levels of revenues, refining and marketing margins, operating costs, retail gasoline and distillate margins, merchandise margins, income from operations, net income or earnings per share;

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

•	expected savings from the restructuring or reorganization of business components;

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

•	business strategies, growth opportunities and expected investment;

•	consumer demand for refined products, natural gas and NGLs;

•	the timing and amount of any future common stock repurchases; and

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

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the effects of the COVID-19 pandemic, including any related government policies and actions, on our business, financial condition, results of operations and cash flows, including our growth, operating costs, labor availability, logistical capabilities, customer demand for our products and industry demand generally, margins, inventory value, cash position, taxes, the price of our securities and trading markets with respect thereto, our ability to access capital markets, and the global economy and financial markets generally;

•	the effects of the COVID-19 pandemic, and the current economic environment generally, on our working capital, cash flows and liquidity, which can be significantly affected by decreases in commodity prices;

•	our ability to successfully complete the planned Speedway sale and realize the expected benefits within the expected timeframe or at all;

•	the risk that we may not proceed with converting the Martinez refinery to a renewable diesel facility or that our expectations of future cash flows for a Martinez renewable diesel facility will not be fully realized;

•	the risk that the cost savings and any other synergies from the Andeavor transaction may not be fully realized or may take longer to realize than expected;

•	further impairments;

•	the regional, national and worldwide availability and pricing of refined products, crude oil, natural gas, NGLs and other feedstocks;

•	our ability to manage disruptions in credit markets or changes to credit ratings;

•	the reliability of processing units and other equipment;

•	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 the business, financial condition, results of operations and cash flows;

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•	continued or further volatility in and degradation of general economic, market, industry or business conditions as a result of the COVID-19 pandemic (including any related government policies and actions), other infectious disease outbreaks, natural hazards, extreme weather events or otherwise;

•	compliance with federal and state environmental, economic, health and safety, energy and other policies and regulations, including the cost of compliance with the Renewable Fuel Standard, and enforcement actions initiated thereunder;

•	adverse market conditions or other similar risks affecting MPLX;

•	refining industry overcapacity or under capacity;

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

•	non-payment or non-performance by our producer and other 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 and refined products;

•	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 and NGLs, including the United States and Mexico, and in crude oil producing regions, including the Middle East, Africa, Canada and South America;

•	actions taken by our competitors, including pricing adjustments, expansion of retail activities, 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;

•	accidents or other unscheduled shutdowns affecting our refineries, machinery, pipelines, processing, fractionation and treating facilities or equipment, 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 or refined products;

•	adverse changes in laws including with respect to tax and regulatory matters;

•	political pressure and influence of environmental groups and other stakeholders upon policies and decisions related to the production, gathering, refining, processing, fractionation, transportation and marketing of crude oil or other feedstocks, refined products, natural gas, NGLs or other hydrocarbon-based products;

•	labor and material shortages; and

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

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Refining & Marketing – refines crude oil and other feedstocks at our refineries in the Gulf Coast, Mid-Continent and West Coast regions of the United States, purchases refined products and ethanol for resale and distributes refined products through transportation, storage, distribution and marketing services provided largely by our Midstream segment. We sell refined products to wholesale marketing customers domestically and internationally, to buyers on the spot market, to independent entrepreneurs who operate primarily Marathon® branded outlets, through long-term fuel supply contracts with direct dealers who operate locations mainly under the ARCO® brand and to approximately 3,900 Speedway locations.

•	Midstream – transports, stores, distributes and markets crude oil and refined products principally for the Refining & Marketing segment via refining logistics assets, pipelines, terminals, towboats and barges; gathers, processes and transports natural gas; and gathers, transports, fractionates, stores and markets NGLs. The Midstream segment primarily reflects the results of MPLX.

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In accordance with ASC 205, Discontinued Operations, intersegment sales from our Refining & Marketing segment to the Speedway business are no longer eliminated as intercompany transactions and are now presented within sales and other operating revenue, since we will continue to supply fuel to the Speedway business subsequent to the sale to 7-Eleven. All periods presented have been retrospectively adjusted to reflect this change.

•	Beginning August 2, 2020, in accordance with ASC 360, Property, Plant, and Equipment, we ceased recording depreciation and amortization for the Speedway business’ property, plant and equipment, finite-lived intangible assets and right of use lease assets.

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•	Share repurchases have temporarily been suspended. The timing and amount of future repurchases, if any, will depend upon several factors, including market and business conditions.

•	On April 27, 2020, we entered into an additional $1.0 billion 364-day revolving credit facility, which expires in 2021, to provide incremental liquidity and financial flexibility during the commodity price and demand downturn.

•	On April 27, 2020, we closed on the issuance of $2.5 billion of senior notes. Proceeds from the senior notes were used to pay down certain amounts outstanding on the five-year revolving credit facility.

•	During June 2020, we repaid the remaining amounts outstanding on the five-year revolving credit facility.

•	On September 23, 2020, we entered into a 364-day revolving credit agreement, which provides for a $1.0 billion unsecured revolving credit facility that matures in September 2021, and which replaces a similar 364-day revolving credit agreement that expired on September 28, 2020. At September 30, 2020, we had $7.7 billion available on our variable credit facilities.

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(a)	Recast to reflect direct dealer income from operations of $103 million, $106 million, $303 million and $295 million for the third quarter 2020 and 2019 and the first nine months of 2020 and 2019, respectively. Includes a LIFO liquidation charge of $256 million in the third quarter of 2020.

(b)	Recast to reflect corporate costs of $7 million, $8 million, $20 million and $21 million for the third quarter 2020 and 2019 and the first nine months of 2020 and 2019, respectively, that are no longer allocated to Speedway under discontinued operations accounting.

(c)	Represents gain related to the formation of Capline LLC for the nine months ended September 30, 2019.

(d)	2020 includes costs incurred in connection with the Midstream strategic review. 2019 includes employee severance, retention and other costs related to the acquisition of Andeavor.

(e)	Includes $7.4 billion goodwill impairment, $1.3 billion impairment of equity method investments and $886 million impairment of long lived assets for the nine months ended September 30, 2020.

(f)	Restructuring expenses include $189 million of exit and disposal costs related to indefinite idling of the Martinez and Gallup refineries and $159 million of employee separation costs.

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(a)	Costs related to the Speedway separation.

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(a)	Excludes MPLX’s $3.50 billion bank revolving credit facility, which had approximately $3.41 billion available as of September 30, 2020.

(b)	Outstanding borrowings include $1 million in letters of credit outstanding under this facility.

(c)	Availability under our $750 million trade receivables facility is a function of eligible trade receivables, which will be lower in a sustained lower price environment for refined products.

(d)	Includes cash and cash equivalents classified as assets held for sale of $98 million and excludes cash and cash equivalents of MPLX of $28 million.

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•	The Gulf Coast crack spread uses three barrels of LLS crude producing two barrels of USGC CBOB gasoline and one barrel of USGC ULSD;

•	The Mid-Continent crack spread uses three barrels of WTI crude producing two barrels of Chicago CBOB gasoline and one barrel of Chicago ULSD; and

•	The West Coast crack spread uses three barrels of ANS crude producing two barrels of LA CARBOB and one barrel of LA CARB Diesel.

(a)	Crack spread based on 38 percent LLS, 38 percent WTI and 24 percent ANS with Gulf Coast, Mid-Continent and West Coast product pricing, respectively, and assumes all other differentials and pricing relationships remain unchanged.

(b)	Sour crude oil basket consists of the following crudes: ANS, Argus Sour Crude Index, Maya and Western Canadian Select. We expect approximately 50 percent of the crude processed at our refineries in 2020 will be sour crude.

(c)	Sweet crude oil basket consists of the following crudes: Bakken, Brent, LLS, WTI-Cushing and WTI-Midland. We expect approximately 50 percent of the crude processed at our refineries in 2020 will be sweet crude.

(d)	This is consumption-based exposure for our Refining & Marketing segment and does not include the sales exposure for our Midstream segment.

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•	the selling prices realized for refined products;

•	the types of crude oil and other charge and blendstocks processed;

•	our refinery yields;

•	the cost of products purchased for resale; and

•	the impact of commodity derivative instruments used to hedge price risk.

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(a)	In accordance with discontinued operations accounting, Speedway sales to retail customers and net results are reflected in Income from discontinued operations, net of tax and Refining & Marketing intercompany sales to Speedway are now presented as third party sales.

(b)	The first nine months of 2020 includes $1.32 billion of impairment expense. See Note 6 to the unaudited consolidated financial statements for further information.

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decreased cost of revenues of $7.67 billion mainly due to lower refined product sales volumes, which decreased 505 mbpd primarily due to reduced travel and business operations associated with the COVID-19 pandemic and an LCM benefit of $530 million. This was partially offset by a charge of $256 million to reflect an expected LIFO liquidation for our crude oil inventories. The costs of inventories in the historical LIFO layer which is expected to be liquidated are higher than current costs, which resulted in the LIFO liquidation charge;

•	long-lived asset impairment expenses of $433 million primarily related to the repositioning of the Martinez refinery;

•	decreased selling, general and administrative expenses of $88 million mainly due to decreases in salaries and employee-related expenses, contract services expenses, credit card processing fees for brand customers, and transaction-related costs, partially offset by increases in employee benefit costs and other expenses;

•	restructuring expenses of $348 million related to the idling of the Martinez and Gallup refineries and costs related to our announced workforce reduction. See Note 3 to the unaudited consolidated financial statements for additional information; and

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increased other taxes of $37 million primarily due to increased property and environmental taxes of approximately $21 million and $17 million, respectively. Property taxes increased in the current period mainly due to the absence of tax exemptions and property tax refunds received in the third quarter of 2019 and environmental taxes increased largely due to the reinstatement of the Oil Spill Tax in 2020, which was not in effect for all of 2019.

•	decreased sales and other operating revenues of $31.33 billion primarily due to decreased Refining & Marketing segment refined product sales volumes, which decreased 508 mbpd, and decreased average refined product sales prices of $0.56 per gallon primarily due to reduced travel and business operations associated with the COVID-19 pandemic;

•	decreased income from equity method investments of $1.31 billion largely due to impairments of equity method investments of $1.32 billion primarily driven by the effects of COVID-19 and the decline in commodity prices; and

•	decreased net gain on disposal of assets of $214 million mainly due to the absence of a $207 million gain recognized in 2019 in connection with MPC’s exchange of its undivided interest in the Capline pipeline system for an equity ownership in Capline LLC.

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decreased cost of revenues of $26.11 billion primarily due to reduced travel and business operations associated with the COVID-19 pandemic, partially offset by increased cost of revenues of $256 million to reflect an expected LIFO liquidation for our crude oil inventories. The costs of inventories in the historical LIFO layer which is expected to be liquidated are higher than current costs, which resulted in the LIFO liquidation charge;

•	an LCM charge of $1.19 billion primarily driven by the effects of COVID-19 and the decline in commodity prices;

•	impairment expense of $8.28 billion recorded for goodwill and long-lived assets of $7.39 billion and $886 million, respectively, primarily driven by the effects of COVID-19 and the decline in commodity prices. It also includes impairment of long-lived assets primarily related to the repositioning of the Martinez refinery;

•	decreased selling, general and administrative expenses of $333 million mainly due to decreases in salaries and employee-related expenses, transaction-related expenses, credit card processing fees for brand customers and litigation expense, partially offset by increases in employee benefit costs and other expenses;

•	restructuring expense of $348 million related to the idling of the Martinez and Gallup refineries and costs related to our announced workforce reduction. See Note 3 to the unaudited consolidated financial statements for additional information; and

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increased other taxes of $139 million primarily due to increased property and environmental taxes of approximately $77 million and $56 million, respectively. Property taxes increased in the current period mainly due to the absence of property tax refunds and tax exemptions received in the first nine months of 2019 and environmental taxes increased largely due to the reinstatement of the Oil Spill Tax in 2020, which was not in effect for all of 2019.

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(a)	The price paid by consumers less the cost of refined products, excluding transportation, consumer excise taxes and bankcard processing fees (where applicable), divided by gasoline and distillate sales volume. Excludes inventory valuation adjustments.

(b)	See “Non-GAAP Measures” section for reconciliation and further information regarding this non-GAAP measure.

(c)	The price paid by the consumers less the cost of merchandise.

(d)	Same store comparison includes only locations owned at least 13 months.

(e)	Excludes cigarettes.

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(a)	Includes intersegment sales and sales destined for export.

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(a)	Recast to reflect direct dealer results in the Refining & Marketing segment.

(b)	Sales revenue less cost of refinery inputs and purchased products, divided by net refinery throughput.

(c)	See “Non-GAAP Measures” section for reconciliation and further information regarding this non-GAAP measure.

(d)	Includes refining operating costs and major maintenance costs. Excludes planned turnaround and depreciation and amortization expense.

(e)	Includes fees paid to MPLX. On a per barrel throughput basis, these fees were $3.81 and $2.74 for the three months ended September 30, 2020 and 2019, respectively, and $3.63 and $2.79 for the nine months ended September 30, 2020 and 2019, respectively. Excludes depreciation and amortization expense.

(f)	Reflects the cumulative effect through June 30, 2019 related to a measurement period adjustment arising from the finalization of purchase accounting.

(g)	Includes income (loss) from equity method investments, net gain (loss) on disposal of assets and other income.

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(a)	Blended 3-2-1 Mid-Continent/USGC/West Coast crack spread is 38/38/24 percent in 2020 and 2019. These blends are based on our refining capacity by region in each period.

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(a)	Represents fully loaded export cargoes for each time period. These sales volumes are included in the total sales volume amounts.

(b)	Based on calendar-day capacity, which is an annual average that includes down time for planned maintenance and other normal operating activities.

(c)	Excludes inter-refinery volumes which totaled 55 mbpd and 116 mbpd for the three months ended September 30, 2020 and 2019, respectively, and 68 mbpd and 98 mbpd for the nine months ended September 30, 2020 and 2019, respectively.

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(a)	On owned common-carrier pipelines, excluding equity method investments.

(b)	Includes amounts related to unconsolidated equity method investments on a 100 percent basis.

(a)	C2 + NGL pricing based on Mont Belvieu prices assuming an NGL barrel of approximately 35 percent ethane, 35 percent propane, 6 percent iso-butane, 12 percent normal butane and 12 percent natural gasoline.

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(a)	Corporate costs consist primarily of MPC’s corporate administrative expenses and costs related to certain non-operating assets, except for corporate overhead expenses attributable to MPLX, which are included in the Midstream segment.

(b)

2020 includes costs incurred in connection with the Midstream strategic review. Costs incurred in 2020 in connection with the Speedway separation are included in discontinued operations. See Note 4 to the unaudited consolidated financial statements for additional information on discontinued operations. 2019 costs include employee severance, retention and other costs related to the acquisition of Andeavor.

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(a)	LCM inventory valuation adjustments are excluded from Refining & Marketing income from operations and Refining & Marketing margin.

(b)	The gross margin, excluding depreciation and amortization, of operations that support Refining & Marketing such as biodiesel and ethanol ventures, power facilities and processing of credit card transactions.

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(a)	LCM inventory valuation adjustments are excluded from income from discontinued operations and Speedway margin.

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•	a decrease in additions to property, plant and equipment of $1.13 billion primarily due to decreased capital expenditures in the first nine months of 2020 in our Midstream and Refining & Marketing segments;

•	a decrease in net investments of $403 million largely due to investments in the first nine months of 2019 in connection with the construction of the Gray Oak Pipeline, which began initial start-up in the fourth quarter of 2019; and

•	a decrease in cash used in investing activities related to discontinued operations of $76 million primarily due to decreased capital expenditures in the first nine months of 2020 for Speedway.

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Long-term debt borrowings and repayments were a net $3.02 billion source of cash in the first nine months of 2020 compared to a net $1.20 billion source of cash in the first nine months of 2019. During the first nine months of 2020, MPC issued $2.5 billion of senior notes, borrowed and repaid $3.5 billion under its revolving credit facility and borrowed and repaid $1.23 billion under its trade receivables facility. MPLX issued $3.0 billion of senior notes, which were used to repay $1.0 billion of outstanding borrowings under its term loan, $1.0 billion of floating rate senior notes and to redeem $450 million of senior notes, and had net borrowings of $95 million under its revolving credit facility. During the first nine months of 2019, MPLX issued $2.0 billion of floating rate senior notes, the proceeds of which were used to repay various outstanding MPLX borrowings, and had net borrowings of $500 million under its term loan.

•	Cash used in common stock repurchases decreased $1.89 billion in the first nine months of 2020 compared to the first nine months of 2019. There were no share repurchases in the first nine months of 2020 compared to $1.89 billion in the first nine months of 2019. See Note 10 to the unaudited consolidated financial statements for further discussion of share repurchases.

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Cash used in dividend payments increased $79 million in the first nine months of 2020 compared to the first nine months of 2019, primarily due to a $0.15 per share increase in our base dividend, partially offset by a reduction of shares resulting from share repurchases in 2019. Our dividend payments were $1.74 per common share in the first nine months of 2020 compared to $1.59 per common share in the first nine months of 2019.

•	Contributions from noncontrolling interests decreased $95 million in the first nine months of 2020 compared to the first nine months of 2019 primarily due to cash received in 2019 for an increased noncontrolling interest in an MPLX subsidiary.

(a)	Excludes MPLX’s $3.50 billion bank revolving credit facility, which had approximately $3.41 billion available as of September 30, 2020.

(b)	Outstanding borrowings include $1 million in letters of credit outstanding under this facility.

(c)	Availability under our $750 million trade receivables facility is a function of eligible trade receivables, which will be lower in a sustained lower price environment for refined products.

(d)	Includes cash and cash equivalents classified as assets held for sale of $98 million (see Note 4 to the unaudited consolidated financial statements) and excludes cash and cash equivalents of MPLX of $28 million.

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(a)	Includes capitalized interest of $85 million and $97 million for the nine months ended September 30, 2020 and 2019, respectively.

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•	Future operating performance. Our estimates of future operating performance are based on our analysis of various supply and demand factors, which include, among other things, industry-wide capacity, our planned utilization rate, end-user demand, capital expenditures and economic conditions. Such estimates are consistent with those used in our planning and capital investment reviews.

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Future volumes. Our estimates of future refinery, pipeline throughput and natural gas and natural gas liquid processing volumes are based on internal forecasts prepared by our Refining & Marketing and Midstream segments operations personnel. Assumptions about the effects of COVID-19 on our future volumes are inherently subjective and contingent upon the duration of the pandemic, which is difficult to forecast.

•	Discount rate commensurate with the risks involved. We apply a discount rate to our cash flows based on a variety of factors, including market and economic conditions, operational risk, regulatory risk and political risk. This discount rate is also compared to recent observable market transactions, if possible. A higher discount rate decreases the net present value of cash flows.

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•	Future capital requirements. These are based on authorized spending and internal forecasts.

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(a)	Fair value was based on market prices, where available, or current borrowing rates for financings with similar terms and maturities.

(b)	Assumes a 100-basis-point decrease in the weighted average yield-to-maturity at September 30, 2020.

(c)	Assumes a 100-basis-point change in interest rates. The change to net income was based on the weighted average balance of debt outstanding for the nine months ended September 30, 2020.

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(a)	The amounts in this column include 6,363, 220 and 143 shares of our common stock delivered by employees to MPC, upon vesting of restricted stock, to satisfy tax withholding requirements in July, August and September, respectively.

(b)	Amounts in this column reflect the weighted average price paid for shares tendered to us in satisfaction of employee tax withholding obligations upon the vesting of restricted stock granted under our stock plans.

(c)	On April 30, 2018, we announced that our board of directors had approved a $5.0 billion share repurchase authorization. This share repurchase authorization has no expiration date. The share repurchase authorization announced on April 30, 2018, together with prior authorizations, results in a total of $18.0 billion of share repurchase authorizations since January 1, 2012.

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*	Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Marathon Petroleum Corporation hereby undertakes to furnish supplementally a copy of any omitted schedule upon request by the SEC.

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