Marathon Petroleum Corp | 2013 | FY | 3

Segment Information
We have three reportable segments: Refining & Marketing; Speedway; and Pipeline Transportation. Each of these segments is organized and managed based upon the nature of the products and services they offer.
•
Refining & Marketing – refines crude oil and other feedstocks at our refineries in the Gulf Coast and Midwest regions of the United States, purchases ethanol and refined products for resale and distributes refined products through various means, including barges, terminals and trucks that we own or operate. We sell refined products to wholesale marketing customers domestically and internationally, buyers on the spot market, our Speedway segment and to independent entrepreneurs who operate Marathon® retail outlets;
•
Speedway – sells transportation fuels and convenience products in retail markets in the Midwest, primarily through Speedway® convenience stores; and
•
Pipeline Transportation – transports crude oil and other feedstocks to our refineries and other locations, delivers refined products to wholesale and retail market areas and includes the aggregated operations of MPLX and MPC’s retained pipeline assets and investments.
On February 1, 2013, we acquired the Galveston Bay Refinery and Related Assets, which are part of the Refining & Marketing and Pipeline Transportation segments. Segment information for periods prior to the acquisition does not include amounts for these operations. See Note 5.
Segment income represents income from operations attributable to the reportable segments. Corporate administrative expenses, including those allocated from the Marathon Oil Companies prior to the Spinoff, and costs related to certain non-operating assets are not allocated to the reportable segments. 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
 
Speedway
 
Pipeline Transportation
 
Total
Year Ended December 31, 2013
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
Customer
$
85,608

 
$
14,471

 
$
79

 
$
100,158

Intersegment(a)
9,294

 
4

 
458

 
9,756

Related parties
8

 
—

 
—

 
8

Segment revenues
94,910

 
14,475

 
537

 
109,922

Elimination of intersegment revenues
(9,294
)
 
(4
)
 
(458
)
 
(9,756
)
Total revenues
$
85,616

 
$
14,471

 
$
79

 
$
100,166

Segment income from operations(b)
$
3,206

 
$
375

 
$
210

 
$
3,791

Income from equity method investments
28

 
—

 
8

 
36

Depreciation and amortization(c)
1,011

 
112

 
74

 
1,197

Capital expenditures and investments(d)(e)(f)
2,094

 
296

 
234

 
2,624

 
(In millions)
Refining & Marketing
 
Speedway
 
Pipeline Transportation
 
Total
Year Ended December 31, 2012
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
Customer
$
67,921

 
$
14,239

 
$
77

 
$
82,237

Intersegment(a)
8,782

 
4

 
381

 
9,167

Related parties
7

 
—

 
1

 
8

Segment revenues
76,710

 
14,243

 
459

 
91,412

Elimination of intersegment revenues
(8,782
)
 
(4
)
 
(381
)
 
(9,167
)
Total revenues
$
67,928

 
$
14,239

 
$
78


$
82,245

Segment income from operations(b)
$
5,098

 
$
310

 
$
216

 
$
5,624

Income (loss) from equity method investments
(6
)
 
—

 
32

 
26

Depreciation and amortization(c)
804

 
114

 
54

 
972

Capital expenditures and investments(d)(e)
705

 
340

 
211

 
1,256

 
(In millions)
Refining & Marketing
 
Speedway
 
Pipeline Transportation
 
Total
Year Ended December 31, 2011
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
Customer
$
65,028

 
$
13,490

 
$
65

 
$
78,583

Intersegment(a)
8,301

 
—

 
335

 
8,636

Related parties
52

 
—

 
3

 
55

Segment revenues
73,381

 
13,490

 
403

 
87,274

Elimination of intersegment revenues
(8,301
)
 
—

 
(335
)
 
(8,636
)
Total revenues
$
65,080

 
$
13,490

 
$
68

 
$
78,638

Segment income from operations
$
3,591

 
$
271

 
$
199

 
$
4,061

Income from equity method investments
11

 
—

 
39

 
50

Depreciation and amortization(c)
718

 
110

 
45

 
873

Capital expenditures and investments(d)(e)
900

 
164

 
121

 
1,185

(a) 
Management believes intersegment transactions were conducted under terms comparable to those with unaffiliated parties.
(b) 
Included in the Pipeline Transportation segment for 2013 and 2012 are $20 million and $4 million of corporate overhead costs attributable to MPLX, which were included in items not allocated to segments prior to MPLX’s October 31, 2012 initial public offering. These expenses are not currently allocated to other segments.
(c) 
Differences between segment totals and MPC totals represent amounts related to unallocated items and are included in “Items not allocated to segments” in the reconciliation below.
(d) 
Capital expenditures include changes in capital accruals.
(e) 
Includes Speedway’s acquisition of convenience stores. See Note 5.
(f) 
The Refining & Marketing and Pipeline Transportation segments include $1.29 billion and $70 million, respectively, for the acquisition of the Galveston Bay Refinery and Related Assets. See Note 5.

The following reconciles segment income from operations to income before income taxes as reported in the consolidated statements of income:
(In millions)
2013
 
2012
 
2011
Segment income from operations
$
3,791

 
$
5,624

 
$
4,061

Items not allocated to segments:
 
 
 
 
 
Corporate and other unallocated items(a)(b)
(271
)
 
(336
)
 
(316
)
Minnesota Assets sale settlement gain(c)
—

 
183

 
—

Pension settlement expenses(d)
(95
)
 
(124
)
 
—

Net interest and other financial income (costs)(e)
(179
)
 
(109
)
 
(26
)
Income before income taxes
$
3,246

 
$
5,238

 
$
3,719

(a) 
Corporate and other unallocated items consists primarily of MPC’s corporate administrative expenses, including allocations from the Marathon Oil Companies for periods prior to the Spinoff, and costs related to certain non-operating assets.
(b) 
Corporate overhead costs attributable to MPLX were included in the Pipeline Transportation segment subsequent to MPLX’s October 31, 2012 initial public offering.
(c) 
See Note 6.
(d) 
See Note 22.
(e) 
Includes related party net interest and other financial income.
The following reconciles segment capital expenditures and investments to total capital expenditures:
(In millions)
2013
 
2012
 
2011
Segment capital expenditures and investments
$
2,624

 
$
1,256

 
$
1,185

Less: Investments in equity method investees
124

 
28

 
11

Plus: Items not allocated to segments:
 
 
 
 
 
Capital expenditures not allocated to segments
137

 
103

 
24

Capitalized interest
28

 
101

 
114

Total capital expenditures(a)(b)
$
2,665

 
$
1,432

 
$
1,312

(a) 
Capital expenditures include changes in capital accruals.
(b) 
See Note 20 for a reconciliation of total capital expenditures to additions to property, plant and equipment as reported in the consolidated statements of cash flows.
The following reconciles total revenues to sales and other operating revenues (including consumer excise taxes) as reported in the consolidated statements of income:
(In millions)
2013
 
2012
 
2011
Total revenues (as reported above)
$
100,166

 
$
82,245

 
$
78,638

Plus: Corporate and other unallocated items
(6
)
 
(2
)
 
—

Less: Sales to related parties
8

 
8

 
55

Sales and other operating revenues (including consumer excise taxes)
$
100,152

 
$
82,235

 
$
78,583


Revenues by product line were:
(In millions)
2013
 
2012
 
2011
Refined products
$
93,520

 
$
76,234

 
$
73,334

Merchandise
3,308

 
3,229

 
3,090

Crude oil and refinery feedstocks
2,988

 
2,514

 
1,972

Transportation and other
344

 
266

 
242

Total revenues
100,160

 
82,243

 
78,638

Less: Sales to related parties
8

 
8

 
55

Sales and other operating revenues (including consumer excise taxes)
$
100,152

 
$
82,235

 
$
78,583


Revenue from BP p.l.c. included in the Refining & Marketing segment represented 10 percent of our total annual revenues for the year ended December 31, 2013. No single customer accounted for more than 10 percent of annual revenues for the years ended December 31, 2012 and 2011.
We do not have significant operations in foreign countries. Therefore, revenues in foreign countries and long-lived assets located in foreign countries, including property, plant and equipment and investments, are not material to our operations.
Total assets by reportable segment were:
 
December 31,
(In millions)
2013
 
2012
Refining & Marketing
$
19,573

 
$
17,052

Speedway
2,064

 
1,947

Pipeline Transportation
1,947

 
1,950

Corporate and Other
4,801

 
6,274

Total consolidated assets
$
28,385

 
$
27,223

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