FINDLAY, Ohio -- Income from operations for Marathon Petroleum Corp.'s Speedway convenience store segment was $73 million in fourth-quarter 2011 and $271 million for full-year 2011, compared to $65 million in fourth-quarter 2010 and $293 million for full-year 2010, MPC said in announcing its latest financials.
Meanwhile, the company announced that it is evaluating strategic alternatives to enhance shareholder value with respect to certain of its midstream refining and transportation assets, including, but not limited to, the possible formation and initial public offering of a master limited partnership (MLP).
If MPC determines to further pursue an IPO of an MLP, the company would not expect to file a registration statement before the end of second-quarter 2012, it said.
Further, MPC announced that its board has authorized a share repurchase plan of up to $2 billion of the company's shares of common stock over a two-year period.
Overall, the company reported a fourth-quarter net loss of $75 million, compared with net income of $230 million in fourth-quarter 2010. It reported full-year 2011 net income of $2.39 billion compared with net income of $623 million in 2010.
The $8 million increase in Speedway's fourth-quarter income from operations as compared to fourth quarter 2010 was primarily the result of a higher gasoline and distillate gross margin and a higher merchandise gross margin, the company said. This was partially offset by the absence of income from operations attributable to the sale of 166 convenience stores that were part of the December 1, 2010, Minnesota asset disposition and by higher operating expenses.
Speedway gasoline and distillate gross margin per gallon averaged 14 cents in fourth-quarter 2011 compared to 12.48 cents in fourth-quarter 2010.
The $22 million decrease in Speedway 2011 segment income from operations as compared to 2010 was primarily attributable to the sale of the Minnesota assets and increased operating expenses, partially offset by a higher gasoline and distillate gross margin and a higher merchandise gross margin.
Speedway gasoline and distillate gross margin per gallon averaged 13.08 cents in 2011 compared to 12.07 cents in 2010.
Same-store gasoline sales volume at Speedway decreased 0.4% in the fourth quarter and 1.7% for the full-year 2011, compared to increases of 0.9% in the fourth quarter and 3% for full-year 2010. Higher average gasoline retail prices in 2011 contributed to lower overall gasoline demand and to the decline in same-store sales volumes.
Speedway same-store merchandise sales increased 0.7% in the fourth quarter and 1.1% for the full-year 2011, compared to increases of 3.8% in the fourth quarter and 4.4% for the full-year 2010.
MPC's overall refining and marketing (R&M) segment income from operations was a loss of $182 million in the fourth quarter and income of $3.59 billion for the full-year 2011, compared with income of $303 million and $800 million in fourth-quarter and full-year 2010, respectively.
The $485 million decrease in R&M segment income from operations in fourth-quarter 2011 as compared to fourth-quarter 2010 was primarily the result of a sharply lower refining and marketing gross margin, which decreased to 39 cents per barrel in fourth-quarter 2011 from $3.64 per barrel in fourth-quarter 2010. The main factors contributing to the decrease in the gross margin were unfavorable crude oil acquisition costs and lower crack spreads.
The $2.79 billion increase in R&M segment income from operations in 2011 as compared to 2010 was primarily the result of a higher refining and marketing gross margin, which increased to $7.75 per barrel in 2011 from $2.81 per barrel in 2010. The main factors contributing to the increased gross margin were favorable crude oil acquisition costs and higher crack spreads during the first nine months of 2011.
"MPC performed very well financially and operationally in 2011, and also successfully completed the spin-off from Marathon Oil Corp. on June 30. Net income of $2.4 billion exceeded any of the previous four years," said MPC president and CEO Gary R. Heminger. "Our capabilities are built around a strategy of using our six-refinery network and logistics system to optimize the mix of our refinery inputs and capture the highest value for the refined products we produce in our plants.
"Our separate announcements ... of a share repurchase authorization and plans to evaluate strategic alternatives relative to our midstream assets further demonstrate our commitment to pursuing opportunities to create near and long-term value for our shareholders," said Heminger.
MPC is the nation's fifth-largest refiner with a crude capacity in excess of 1.1 million barrels per day in its six-refinery system. Marathon brand gasoline is sold through approximately 5,100 independently owned locations across 18 states. In addition, Speedway, an MPC subsidiary, owns and operates the nation's fourth largest convenience store chain, with approximately 1,375 locations in seven states. MPC also owns, operates, leases or has ownership interest in approximately 9,600 miles of pipeline. MPC's fully integrated system provides operational flexibility to move crude oil, feedstocks and petroleum-related products efficiently through the company's distribution network in the Midwest, Southeast and Gulf Coast regions.
Marathon Oil Corp., Houston, reported fourth-quarter 2011 net income of $549 million. Net income in fourth-quarter 2010 was $706 million, but included income from the refining, marketing and transportation business, which was spun off June 30, 2011, and is now reported as discontinued operations. As a result, income from continuing operations is best suited for comparison. For fourth-quarter 2011, adjusted income from continuing operations was $552 million, compared to adjusted income from continuing operations of $494 million, for fourth-quarter 2010.
Marathon reported full-year 2011 net income of $2.946 billion. Net income in 2010 was $2.568 billion. For the full-year 2011, adjusted income from continuing operations was $2.293 billion, or $3.21 per diluted share, compared to adjusted income from continuing operations of $1.891 billion for full-year 2010.
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