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    MPC
    Earnings call· Mar 2026(Q1 FY26)

    Marathon Petroleum Q1 FY26 earnings call MPC

    May 5, 2026 Source

    Executive summary

    Marathon Petroleum Q1 FY26 — Strong Operational Performance and Enhanced Shareholder Returns

    Marathon Petroleum delivered strong operational performance in Q1 FY26, capitalizing on a constructive macro environment and strategic investments in refining and midstream. The company's integrated system demonstrated resilience amidst geopolitical events, driving significant cash generation. Management remains committed to disciplined capital allocation, focusing on high-return projects and substantial shareholder returns, including a new share repurchase authorization.

    Highlights

    5

    • Refineries ran at 89% utilization with nearly 100% capture, achieving the strongest first quarter on process safety and lowest unplanned downtime this decade.

    • Adjusted EBITDA increased by nearly $800 million year-over-year, primarily driven by the Refining and Marketing segment.

    • Returned over $1 billion to shareholders in Q1 FY26, including $750 million in share repurchases, with a payout ratio of 62%.

    • Announced an additional $5 billion share repurchase authorization, reinforcing commitment to industry-leading capital returns.

    • Brought 30,000 barrels per day of incremental jet production capacity online at Garyville refinery, with Robinson Jet flexibility investment expected in Q3.

    Concerns

    3

    • Midstream segment adjusted EBITDA decreased $122 million year-over-year, primarily due to derivative losses and the absence of a nonrecurring benefit.

    • Working capital was a $573 million use of cash for the quarter, driven by inventory build and lower throughput, partially offset by higher crude pricing.

    • Refining & Marketing capture was impacted by market-driven headwinds from secondary products and derivatives used to manage price volatility.

    Guidance & targets

    5
    CategoryTargetConfidence
    Refining & Marketing Segment Utilization
    94%
    high materiality
    High
    Refining Turnaround Costs
    $1.35 billion
    medium materiality
    High
    MPLX Distribution Growth
    12.5%
    high materiality
    High
    MPLX Adjusted EBITDA Growth
    mid-single-digit growth
    medium materiality
    High
    Renewable Diesel Utilization (Martinez)
    low 90%
    low materiality
    Medium

    Segment performance

    1
    SegmentRevenueYoYQoQMargin
    Refining & Marketing
    Adjusted EBITDA was approximately $1.4 billion, capitalizing on a strong refining margin environment. Strong domestic and international demand drove increased Gulf Coast margins, resulting in an incremental $596 million of adjusted EBITDA. West Coast delivered an incremental $460 million of adjusted EBITDA due to strong market and minimal turnaround activity. Mid-Con margins were offset by lower volumes and planned maintenance costs.
    Adjusted EBITDA per barrel: $5.37Refinery utilization: 89%Total throughput: 3 million barrels per dayGulf Coast utilization: 89%Mid-Con utilization: 88%West Coast utilization: 92%Capture: 99%
    		———$1.4 billion

    Operational metrics

    11
    Adjusted EPS
    $1.65
    Q1 FY26

    Reported adjusted earnings per share for the quarter.

    Adjusted EBITDA
    $2.8 billionup nearly $800 million YoY
    Q1 FY26

    Consolidated adjusted EBITDA, primarily driven by the Refining and Marketing segment.

    Shareholder payout ratio
    62%
    Q1 FY26

    Reflects the company's commitment to shareholder returns.

    Refining turnaround costs
    $530 million
    Q1 FY26

    Costs incurred for planned maintenance activities, representing a significant portion of the full-year plan.

    Working capital
    $573 million
    Q1 FY26

    Impact of working capital changes on cash flow.

    Consolidated cash
    $2.2 billion
    Q1 FY26 end

    Total cash position at the end of the quarter.

    Unrealized derivative losses
    $500 million
    Q1 FY26

    Impact of derivative positions, primarily due to commodity volatility, expected to unwind in Q2.

    Margin calls to working capital
    $340 million
    Q1 FY26

    Cash used for margin calls related to derivative positions.

    Global refined products capacity offline
    approximately 6 million barrels per dayclose to 6% of global capacity
    Q1 FY26

    Estimate of global capacity offline due to recent geopolitical events.

    Canadian crude volumes
    record volumemore than doubled U.S. Gulf Coast Canadian volumes
    April FY26

    Increased Canadian crude utilization in response to rising U.S. Gulf Coast premiums.

    Advantaged SPR crude purchased
    approximately 10 million barrels
    Q2 FY26

    Crude purchased directly from the Strategic Petroleum Reserve for Q2 processing.

    Industry KPIs

    1
    MetricValueDetails
    FCF shareholder distributions$1 billionUSD

    Orderbook & backlog

    1
    Share repurchase authorization$5 billion2026-05-05

    new authorization

    Reinforces commitment to industry-leading capital returns through cycle.

    Deals & partnerships

    1
    E1 (South Korean customer)customer contractlong-term

    Agreement for long-term delivered demand for LPG volumes from MPLX's new Gulf Coast fractionation facilities, which are adjacent to MPC's Galveston Bay refinery.

    Capital programs

    8
    Garyville Jet Production Capacity Expansioncompleted

    Benefit: 30,000 barrels per day incremental jet production

    This investment strengthens one of the most competitive refining assets and positions MPC to meet growing global jet demand.

    El Paso Yield Improvement Investmentunderway

    Benefit: enhance refinery's ability to produce specialty gasolines

    Expected to enhance the refinery's ability to produce specialty gasolines for the El Paso, Phoenix, and Mexico markets.

    Robinson Jet Flexibility Investmentunderway

    Benefit: approximately 10,000 barrels per day incremental jet fuel production

    Will enable incremental jet fuel production and help address growing regional demand, with flexibility to revert to other distillates.

    MPLX Gulf Coast Fractionation Facilitiesunderway

    Construction progressing on time and on budget, adjacent to MPC's Galveston Bay refinery. MPC will purchase all product from these fractionators.

    MPLX JV Export Facilityunderway

    Construction progressing on time and on budget, supporting LPG exports.

    MPLX Secretariat I Processing Plantin service

    Benefit: 1.4 billion cubic feet per day regional system processing capacity

    Located in the Permian, has entered service and is expected to ramp steadily over the next 9 to 12 months.

    MPLX Titan Sour Gas Treating Expansionunderway

    Benefit: more than 400 million cubic feet per day of treating capacity

    Remains firmly on schedule.

    MPLX Harmon Creek IIIunderway

    Benefit: 8.1 billion cubic feet per day regional system processing capacity

    Located in the Northeast, remains on track for startup.

    Risks & headwinds

    3
    Geopolitical events tightening global markets and driving cracks higherQ1 FY26 and ongoing

    approximately 6 million barrels per day (close to 6% of global refined products capacity) offline

    Mitigation: MPC is largely insulated from global crude supply disruptions due to U.S. and Canadian crude sourcing; highly integrated value chains allow optimization through volatility.

    Market-driven headwinds on secondary products and derivativesQ1 FY26

    impacted R&M capture (would have exceeded 100% otherwise)

    Mitigation: Commercial strategy and integrated logistics allow dynamic adjustments; derivative timing impacts expected to unwind in Q2.

    Backwardation in commodity marketsQ2 FY26 and ongoing

    extremely steep

    Mitigation: Closely monitoring inventories to avoid holding more than needed; prompt month expected to roll up as conflict persists.

    Q&A highlights

    7

    Can you elaborate on the 94% utilization guide for Q2, regional plans, and factors contributing to improved reliability?

    Maryann explained that the 94% utilization reflects strong Q1 turnaround execution, with 40% of full-year maintenance completed. This proactive approach, combined with commercial planning and operational excellence, positions them well for strong demand. She highlighted the lowest unplanned downtime this decade and strategic focus on Gulf Coast export opportunities and West Coast positioning.

    “we pulled forward some of our turnarounds so that we've actually completed roughly 40% in the first quarter. And we did that because, obviously, we had a good view on what we saw the macro to be.”

    asked by Neil Mehta · answered by Maryann Mannen

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Response to Geopolitical Events

    Geopolitical events in the first quarter led to a tightening of global markets and higher global cracks, with an estimated 6 million barrels per day (close to 6% of global refined products capacity) offline. MPC is largely insulated from crude supply disruptions due to its primary sourcing from the U.S. and Canada. This market environment underscores the strength of MPC's refining system and its ability to optimize through volatility, positioning it to respond to strong demand.

    02

    Refining & Marketing Operational Excellence

    MPC's refineries achieved 89% utilization with nearly 100% capture in Q1 FY26, marking the strongest first quarter for process safety and the lowest unplanned downtime this decade. Approximately 40% of the full-year planned maintenance activity was completed in Q1, allowing the company to be well-positioned for strong demand. The Los Angeles refinery benefited from completed utility system investments, improving reliability and efficiency.

    03

    Targeted Refining Investments

    The company invested nearly $330 million in its Refining and Marketing business in Q1, with near-term projects focused on increasing jet optionality. This includes bringing 30,000 barrels per day of incremental jet production capacity online at the Garyville refinery in March. The El Paso yield improvement investment is expected to enhance specialty gasoline production in Q2, and the Robinson Jet flexibility investment (10,000 bpd incremental jet fuel) is slated for Q3.

    04

    MPLX Growth and Value Chain Expansion

    MPLX is investing over $2.4 billion in 2026, with 90% focused on natural gas and NGL opportunities. Key projects include the Secretariat I processing plant in the Permian (now in service, ramping to 1.4 Bcf/d processing capacity), the Titan sour gas treating expansion (on schedule to exit 2026 with over 400 MMcf/d capacity), and Harmon Creek III in the Northeast (on track for Q3 startup, bringing regional processing to 8.1 Bcf/d). These investments aim to strengthen cash flow durability for MPC.

    05

    LPG Trading Footprint Expansion

    MPC has significantly expanded its international LPG trading footprint, executing delivered business across Europe, Latin America, and Asia. Building on this, an agreement with South Korean customer E1 has secured long-term delivered demand for up to 40% of volumes MPC will purchase from MPLX's new Gulf Coast fractionation facilities. These fractionators and the JV export facility are progressing on time and on budget, expected to enter service in 2028 and 2029, respectively.

    06

    Resilient Product Demand and Commercial Strategy

    Domestic demand for gasoline, diesel, and jet fuel remained strong, with exports providing incremental upside. The commercial team actively optimized crude sourcing, utilizing inland connectivity for advantaged barrels and increasing Canadian volumes. They also maximized diesel and jet production, leveraging new capabilities like the Garyville jet project and exploring new export markets such as ULSD to Australia and naphtha to Asia.

    AI-generated summary of the company’s earnings call. Not investment advice.