FINDLAY — Marathon Petroleum Corp. had an otherwise excellent performance in 2017, but on Thursday the oil refining and marketing firm reported record annual earnings thanks to a $1.5 billion fourth-quarter windfall the company received from President Trump’s tax cut package.
For the year, Findlay-based Marathon had profits of $3.43 billion, or $6.70 per share, up 192 percent from 2016 when its profits were $1.17 billion, or $2.21 a share. In the fourth quarter, its net income was $2.02 billion, or $4.09 a share, up from $227 million, or 43 cents a share, for the fourth quarter of 2016.
Marathon said the Tax Cuts and Jobs Act passed in December cut its corporate tax rate to 21 percent, giving it a full-year benefit of $1.5 billion, or $3.04 per share “as a result of remeasuring certain net deferred tax liabilities using the lower corporate tax rate.” President Trump signed the $1.5 trillion tax overhaul into law Dec. 22.
Previously, Marathon’s best earnings were $3.38 billion in 2012. It only became an independent firm in July, 2011, when it was spun off by Marathon Oil Co., of Houston.
While the tax cut gave the company record profits, it already was having a pretty good year.
“We delivered a strong operational and financial performance across the business,” Gary Heminger, chairman and CEO, said. “We provided outstanding value for our investors in 2017. The [oil processing, storage and transportation] and Speedway segments each achieved a record full-year performance, which, combined with a substantial increase in earnings from the Refining and Marketing segments, fully demonstrates the robust earnings power of [our] integrated model.”
Processing, storage, and transportation, collectively known as a Midstream segment, had a record income of $1.34 billion in 2017, compared to $1.05 billion the year before, and mainly reflected a strong performance by Marathon’s pipeline subsidiary, MPLX L.P.
The Speedway store segment’s income was $732 million, down from $734 million in 2016. But Marathon said the 2016 Speedway results were boosted by $25 million after the company revised valuations for its inventory of refined products.
Income at the Refining and Marketing segment was $2.32 billion, up $964 million from 2016. Marathon said numerous refining and production records were set at its refineries in 2017, including monthly records for the processing of crude oil, and the production of gasoline and other refined products.
As a result, Marathon now is the second-largest refiner in the U.S. on a refined products basis, and its Galveston Bay refinery in Texas and Garyville refinery in Louisiana now are the second and third-largest refineries in the country, respectively.
MPLX reported its earnings Thursday, and the subsidiary, which is a limited partnership, had profits of $794 million, or $2.30 a share, up from $233 million, or $2.05 a share in 2016. In the fourth quarter, MPLX had $238 million, or 61 cents a share, up from $133 million, or 52 cents a share, for the same quarter of 2016.
On the New York Stock Exchange Thursday, Marathon shares fell 58 cents to close at $68.69. MPLX, also traded on the NYSE, rose 75 cents and closed at $37.95.
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