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Section 1: 10-K (10-K)

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2017
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number 001-35054
Marathon Petroleum Corporation
(Exact name of registrant as specified in its charter)
Delaware
 
27-1284632
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
539 South Main Street, Findlay, OH 45840-3229
(Address of principal executive offices)
(419) 422-2121
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act
Title of Each Class
 
Name of Each Exchange on Which Registered
Common Stock, par value $.01
 
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  þ    No  ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  þ    No  ¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    þ
Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer þ    Accelerated filer ¨    Non-accelerated filer ¨    Smaller reporting company ¨ Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    Yes  ¨    No  þ
The aggregate market value of Common Stock held by non-affiliates as of June 30, 2017 was approximately $26.4 billion. This amount is based on the closing price of the registrant’s Common Stock on the New York Stock Exchange on June 30, 2017. Shares of Common Stock held by executive officers and directors of the registrant are not included in the computation. The registrant, solely for the purpose of this required presentation, has deemed its directors and executive officers to be affiliates.
There were 476,059,729 shares of Marathon Petroleum Corporation Common Stock outstanding as of February 16, 2018.
Documents Incorporated By Reference
Portions of the registrant’s proxy statement relating to its 2018 Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934, are incorporated by reference to the extent set forth in Part III, Items 10-14 of this Report.


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MARATHON PETROLEUM CORPORATION
Unless otherwise stated or the context otherwise indicates, all references in this Annual Report on Form 10-K to “MPC,” “us,” “our,” “we” or “the Company” mean Marathon Petroleum Corporation and its consolidated subsidiaries.
Table of Contents
 
 
 
Page
 
 
 
 
 
 
 
 
Item 1.
 
 
 
 
 
Item 1A.
 
 
 
 
 
Item 1B.
 
 
 
 
 
Item 2.
 
 
 
 
 
Item 3.
 
 
 
 
 
Item 4.
 
 
 
 
 
 
 
 
 
 
 
 
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
 
 
 
 
 
Item 6.
 
 
 
 
 
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
 
 
 
 
 
Item 7A.
 
 
 
 
 
Item 8.
 
 
 
 
 
Item 9.
 
 
 
 
 
Item 9A.
 
 
 
 
 
Item 9B.
 
 
 
 
 
 
 
 
 
 
 
 
Item 10.
 
 
 
 
 
Item 11.
 
 
 
 
 
Item 12.
 
 
 
 
 
Item 13.
 
 
 
 
 
Item 14.
 
 
 
 
 
 
 
 
 
 
 
 
Item 15.
 
 
 
 
 
Item 16.
Form 10-K Summary
 
 
 
 
 
 


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GLOSSARY OF TERMS
Throughout this report, the following company or industry specific terms and abbreviations are used:
ASC
Accounting Standards Codification
ASR
Accelerated share repurchase
ATB
Articulated tug barges
barrel
One stock tank barrel, or 42 United States gallons liquid volume, used in reference to crude oil or other liquid hydrocarbons.
bcf/d
One billion cubic feet per day
DEI
Designated Environmental Incidents
EBITDA (a non-GAAP financial measure)
Earnings Before Interest, Tax, Depreciation and Amortization
EIA
United States Energy Information Administration
EPA
United States Environmental Protection Agency
FASB
Financial Accounting Standards Board
FCC
Fluid Catalytic Cracking
FERC
Federal Energy Regulatory Commission
GAAP
Accounting principles generally accepted in the United States
IDR
Incentive Distribution Right
LCM
Lower of cost or market
LIBO Rate
London Interbank Offered Rate
LIFO
Last in, first out
LLS
Louisiana Light Sweet crude oil, an oil index benchmark price
mbpd
Thousand barrels per day
mbpcd
Thousand barrels per calender day
Mcf
One thousand cubic feet of natural gas
mmbpcd
Million barrels per calender day
MMcf/d
One million cubic feet of natural gas per day
MMBtu
One million British thermal units per day
NYMEX
New York Mercantile Exchange
NYSE
New York Stock Exchange
NGL
Natural gas liquids, such as ethane, propane, butanes and natural gasoline
PADD
Petroleum Administration for Defense District
OPEC
Organization of Petroleum Exporting Countries
OSHA
United States Occupational Safety and Health Administration
OTC
Over-the-Counter
ppb
Parts per billion
ppm
Parts per million
RFS2
Revised Renewable Fuel Standard program, as required by the Energy Independence and Security Act of 2007
RIN
Renewable Identification Number
ROUX
Residual Oil Upgrader Expansion
SEC
United States Securities and Exchange Commission
STAR
South Texas Asset Repositioning
TCJA
Tax Cuts and Jobs Act
ULSD
Ultra-low sulfur diesel
USGC
U.S. Gulf Coast
UST
Underground storage tank
VIE
Variable interest entity
VPP
Voluntary Protection Program
WTI
West Texas Intermediate crude oil, an oil index benchmark price

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Disclosures Regarding Forward-Looking Statements
This Annual Report on Form 10-K, particularly Item 1. Business, Item 1A. Risk Factors, Item 3. Legal Proceedings, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 7A. Quantitative and Qualitative Disclosures about Market Risk, includes forward-looking statements. You can identify our forward-looking statements by words such as “anticipate,” “believe,” “could,” “design,” “estimate,” “expect,” “forecast,” “goal,” “guidance,” “imply,” “intend,” “may,” “objective,” “opportunity,” “outlook,” “plan,” “position,” “potential,” “predict,” “project,” “prospective,” “pursue,” “seek,” “should,” “strategy,” “target,” “will,” “would” or other similar expressions that convey the uncertainty of future events or outcomes. In accordance with “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, these statements are accompanied by cautionary language identifying important factors, though not necessarily all such factors, that could cause future outcomes to differ materially from those set forth in the forward-looking statements.
Forward-looking statements include, but are not limited to, statements that relate to, or statements that are subject to risks, contingencies or uncertainties that relate to:
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;
anticipated volumes of feedstock, throughput, sales or shipments of refined products;
anticipated levels of regional, national and worldwide prices of crude oil, natural gas, NGLs and refined products;
anticipated levels of crude oil and refined product inventories;
future levels of capital, environmental or maintenance expenditures, general and administrative and other expenses;
the success or timing of completion of ongoing or anticipated capital or maintenance projects;
business strategies, growth opportunities and expected investments
our share repurchase authorizations, including the timing and amounts of any common stock repurchases;
the adequacy of our capital resources and liquidity, including but not limited to, availability of sufficient cash flow to execute our business plan;
the effect of restructuring or reorganization of business components;
the potential effects of judicial or other proceedings on our business, financial condition, results of operations and cash flows; 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.
We have based our forward-looking statements on our current expectations, estimates and projections about our industry and our company. We caution that these statements are not guarantees of future performance, and you should not rely unduly on them, as they involve risks, uncertainties and assumptions that we cannot predict. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. While our management considers these assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. Accordingly, our actual results may differ materially from the future performance that we have expressed or forecast in our forward-looking statements. Differences between actual results and any future performance suggested in our forward-looking statements could result from a variety of factors, including the following:
volatility or degradation in general economic, market, industry or business conditions;
availability and pricing of domestic and foreign supplies of natural gas, NGLs and crude oil and other feedstocks;
the ability of the members of the OPEC to agree on and to influence crude oil price and production controls;
availability and pricing of domestic and foreign supplies of refined products such as gasoline, diesel fuel, jet fuel, home heating oil and petrochemicals;
foreign imports and exports of crude oil, refined products, natural gas and NGLs;
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;
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;
changes to our capital budget, expected construction costs and timing of projects;

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the price, availability and acceptance of alternative fuels and alternative-fuel vehicles and laws mandating such fuels or vehicles;
fluctuations in consumer demand for refined products, natural gas and NGLs, including seasonal fluctuations;
political and economic conditions in nations that consume refined products, natural gas and NGLs, including the United States, 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;
failure to realize the benefits projected for capital projects, or cost overruns associated with such projects;
modifications to MPLX LP earnings and distribution growth objectives;
the ability to successfully implement growth opportunities, including strategic initiatives and actions;
risks and uncertainties associated with intangible assets, including any future goodwill or intangible assets impairment charges;
the ability to realize the strategic benefits of joint venture opportunities;
accidents or other unscheduled shutdowns affecting our refineries, machinery, pipelines, processing, fractionation and treating facilities or equipment, or those of our suppliers or customers;
unusual weather conditions and natural disasters, which can unforeseeably affect the price or availability of crude oil and other feedstocks and refined products;
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;
state and federal environmental, economic, health and safety, energy and other policies and regulations, including the cost of compliance with the renewable fuel standard program;
adverse changes in laws including with respect to tax and regulatory matters;
rulings, judgments or settlements and related expenses in litigation or other legal, tax or regulatory matters, including unexpected environmental remediation costs, in excess of any reserves or insurance coverage;
political pressure and influence of environmental groups 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;
the maintenance of satisfactory relationships with labor unions and joint venture partners;
the ability and willingness of parties with whom we have material relationships to perform their obligations to us;
the market price of our common stock and its impact on our share repurchase authorizations;
changes in the credit ratings assigned to our debt securities and trade credit, changes in the availability of unsecured credit, changes affecting the credit markets generally and our ability to manage such changes;
capital market conditions and our ability to raise adequate capital to execute our business plan;
the costs, disruption and diversion of management’s attention associated with campaigns commenced by activist investors; and
the other factors described in Item 1A. Risk Factors.
We undertake no obligation to update any forward-looking statements except to the extent required by applicable law.

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PART I

Item 1. Business
Overview
Marathon Petroleum Corporation (“MPC”) has 130 years of experience in the energy business with roots tracing back to the formation of the Ohio Oil Company in 1887. We are one of the largest independent petroleum product refining, marketing, retail and transportation businesses in the United States and the largest east of the Mississippi. We are one of the largest natural gas processors in the United States and the largest processor and fractionator in the Marcellus and Utica shale regions.
Our operations consist of three reportable operating segments: Refining & Marketing; Speedway; 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 six refineries in the Gulf Coast and Midwest regions of the United States, purchases refined products and ethanol for resale and distributes refined products through various means, including pipeline and marine transportation, terminals and storage services provided by our Midstream segment. We sell refined products to wholesale marketing customers domestically and internationally, buyers on the spot market, our Speedway® business segment and to independent entrepreneurs who operate Marathon® retail outlets.
Speedway – sells transportation fuels and convenience products in the retail market in the Midwest, East Coast and Southeast regions of the United States.
Midstream – gathers, processes and transports natural gas; gathers, transports, fractionates, stores and markets NGLs; and transports and stores crude oil and refined products principally for the Refining & Marketing segment via pipelines, terminals, towboats and barges. The Midstream segment primarily reflects the results of MPLX, our sponsored master limited partnership.
See Item 8. Financial Statements and Supplementary Data – Note 10 for operating segment and geographic financial information, which is incorporated herein by reference.
Corporate History and Structure
MPC was incorporated in Delaware on November 9, 2009 in connection with an internal restructuring of Marathon Oil Corporation (“Marathon Oil”). On May 25, 2011, the Marathon Oil board of directors approved the spinoff of its Refining, Marketing & Transportation Business (“RM&T Business”) into an independent, publicly traded company, MPC, through the distribution of MPC common stock to the stockholders of Marathon Oil common stock on June 30, 2011 (the “Spinoff”). Following the Spinoff, Marathon Oil retained no ownership interest in MPC, and each company has separate public ownership, boards of directors and management. All subsidiaries and equity method investments not contributed by Marathon Oil to MPC remained with Marathon Oil and, together with Marathon Oil, are referred to as the “Marathon Oil Companies.” On July 1, 2011, our common stock began trading “regular-way” on the NYSE under the ticker symbol “MPC.”
MPLX is a diversified, growth-oriented publicly traded master limited partnership (“MLP”) formed by us in 2012 to own, operate, develop and acquire midstream energy infrastructure assets. MPLX is engaged in the gathering, processing and transportation of natural gas; the gathering, transportation, fractionation, storage and marketing of NGLs; and the gathering, transportation and storage of crude oil and refined petroleum products. On December 4, 2015, we completed the MarkWest Merger, whereby MarkWest became a wholly-owned subsidiary of MPLX.
As of December 31, 2017, we owned a 30.4 percent interest in MPLX, including a two percent general partner interest. MPLX is a VIE because the limited partners of MPLX do not have substantive kick-out or substantive participating rights over the general partner. We are the primary beneficiary of MPLX because in addition to significant economic interest, we also have the power, through our 100 percent 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. The creditors of MPLX do not have recourse to MPC’s general credit through guarantees or other financial arrangements. The assets of MPLX are the property of MPLX and cannot be used to satisfy the obligations of MPC.
Recent Developments
Strategic Actions to Enhance Shareholder Value
On January 3, 2017, we announced plans to significantly accelerate the dropdown of assets with an estimated $1.4 billion of MLP-eligible annual EBITDA to MPLX and to exchange our economic interests in the general partner of MPLX, including IDRs, for newly issued MPLX common units. In 2017, in connection with these plans, we contributed assets to MPLX with projected annual EBITDA of approximately $400 million for $1.93 billion of cash and approximately 31 million MPLX

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common units and general partner units. On February 1, 2018, we completed the dropdown of the remaining identified assets, which included our refining logistics assets and fuels distribution services with projected annual EBITDA of approximately $1 billion, in exchange for $4.1 billion of cash and 114 million MPLX common units and general partner units.
The cash consideration for these dropdowns in 2017 and 2018 was financed by MPLX with $6.0 billion of debt. See “Other Highlights” section for additional information on MPLX debt financing in 2017 and 2018. The equity financing was funded through new MPLX common units and general partner units issued to us. Immediately following the closing of the February 1, 2018 dropdown, our IDRs were cancelled and our economic general partner interest in MPLX was converted into a non-economic general partner interest, all in exchange for 275 million newly issued MPLX common units, which resulted in us owning approximately 64 percent of the issued and outstanding MPLX common units as of February 1, 2018. These actions were designed to provide a clear valuation of our midstream platform and to provide an ongoing return of capital to our shareholders in a manner consistent with maintaining an investment-grade credit profile.
See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information on our strategic actions to enhance shareholder value. See Item 8. Financial Statements and Supplementary Data – Note 4 for more information on the 2017 dropdowns to MPLX and Note 26 for more information on the 2018 dropdown to MPLX.
Acquisitions and Investments
Our acquisition and investment activity in 2017 was primarily focused in our Midstream segment as follows:
On March 1, 2017, MPLX acquired the Ozark pipeline from Enbridge Pipelines (Ozark) LLC for approximately $219 million.
On February 15, 2017, MPLX acquired a partial, indirect equity interest in the Dakota Access Pipeline (“DAPL”) and Energy Transfer Crude Oil Company Pipeline (“ETCOP”) projects, collectively referred to as the Bakken Pipeline system, through a joint venture, MarEn Bakken Company LLC (“MarEn Bakken”), with Enbridge Energy Partners L.P. (“Enbridge Energy Partners”). MPLX holds, through a subsidiary, a 25 percent interest in MarEn Bakken, which equates to an approximate 9.2 percent indirect equity interest in the Bakken Pipeline system. MPLX contributed $500 million of the $2 billion purchase price paid by the joint venture.
Effective January 1, 2017, MPLX and Antero Midstream formed a joint venture, Sherwood Midstream LLC (“Sherwood Midstream”), to support the development of Antero Resources Corporation’s Marcellus Shale acreage in West Virginia. MarkWest has a 50 percent ownership interest in Sherwood Midstream. In connection with this transaction, MarkWest contributed certain gas processing plants that were under construction at the Sherwood Complex with a fair value of approximately $134 million, cash of approximately $20 million and sold Class A Interests in MarkWest Ohio Fractionation to Sherwood Midstream for $126 million in cash. Sherwood Midstream Holdings LLC (“Sherwood Midstream Holdings”), a joint venture with MarkWest and Sherwood Midstream, was also formed to own, operate and maintain certain assets owned by Sherwood Midstream and MarkWest. MarkWest contributed certain real property, equipment and facilities with a fair value of approximately $209 million to Sherwood Midstream Holdings in exchange for a 79 percent initial ownership interest.
See Item 8. Financial Statements and Supplementary Data – Note 5 for additional information on these acquisitions and investments and Note 6 for additional information related to the investments in Sherwood Midstream, Ohio Fractionation and Sherwood Midstream Holdings.
Other Highlights
On February 8, 2018, MPLX issued $5.5 billion in aggregate principal amount of senior notes in a public offering, consisting of $500 million aggregate principal amount of 3.375 percent unsecured senior notes due March 2023, $1.25 billion aggregate principal amount of 4.000 percent unsecured senior notes due March 2028, $1.75 billion aggregate principal amount of 4.500 percent unsecured senior notes due April 2038, $1.5 billion aggregate principal amount of 4.700 percent unsecured senior notes due April 2048, and $500 million aggregate principal amount of 4.900 percent unsecured senior notes due April 2058. On February 8, 2018, $4.1 billion of the net proceeds were used to repay the 364-day term-loan facility, which was drawn on February 1, 2018 to fund the cash portion of the consideration MPLX paid MPC for the dropdown of assets on February 1, 2018. The remaining proceeds will be used to repay outstanding borrowings under MPLX’s revolving credit facility and intercompany loan agreement with us and for general partnership purposes.

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On February 10, 2017, MPLX completed a public offering of $1.25 billion aggregate principal amount of 4.125% unsecured senior notes due March 2027 and $1.0 billion aggregate principal amount of 5.200% unsecured senior notes due March 2047. MPLX used the net proceeds from this offering to fund the $1.5 billion cash portion of the consideration MPLX paid MPC for the dropdown of assets on March 1, 2017, as well as for general partnership purposes.
Primarily during the first six months of 2017, MPLX issued an aggregate of 14 million MPLX common units under the Second Amended and Restated Distribution Agreement (the “Distribution Agreement”) providing for at-the-market issuances of common units, in amounts, at prices and on terms determined by market conditions and other factors at the time of the offerings (such at-the-market program, referred to as the “ATM Program”), generating net proceeds of approximately $473 million.
See Item 8. Financial Statements and Supplementary Data – Note 4 for additional information on MPLX.
Our Competitive Strengths

Extensive Integrated Platform of Midstream, Retail and Refining Assets
We believe the integration of our midstream, retail and refining assets distinguishes us from our competitors. Our midstream, retail and refining assets have significant scale.We currently own, lease or have ownership interests in approximately 10,800 miles of crude oil and products pipelines. Additionally, we have more than 6,000 miles of natural gas gathering and NGL pipelines. We also own or have ownerships interests in one of the largest private domestic fleets of inland petroleum product barges and one of the largest terminal operations in the United States, as well as trucking and rail assets. We operate this transportation and distribution system in coordination with our refining and marketing network, which can process up to 1.9 mmbpcd of crude oil, enabling us to optimize raw material supplies and refined product distribution, and deliver important economies of scale across our platform. Our Speedway segment, discussed further below, is one of our largest distribution channels and also our most ratable.
We believe our integrated platform of assets gives us extensive flexibility and optionality to meet the growth needs of the market and the ability to respond promptly to dynamic market conditions, including weather-related and marketplace disruptions.
Competitively Positioned Marketing Operations Provide Assured Product Sales
We are one of the largest wholesale suppliers of gasoline and distillates to resellers within our market area. We have two strong retail brands: Speedway® and Marathon®. We believe Speedway LLC, a wholly-owned subsidiary, operates the second largest chain of company-owned and operated retail gasoline and convenience stores in the United States, with approximately 2,740 convenience stores in 21 states throughout the Midwest, East Coast and Southeast regions of the United States. In addition, our highly successful Speedy Rewards® customer loyalty program, which averaged approximately 6 million active members in 2017, provides us with a unique competitive advantage and opportunity to increase our customer base at existing and new Speedway locations. The Marathon brand is an established motor fuel brand primarily in the Midwest and Southeast regions of the United States, comprised of approximately 5,600 retail outlets operated by independent entrepreneurs across 20 states as of December 31, 2017. The Marathon brand and Speedway have been channels for sales volume growth in existing and contiguous markets.
We consider assured sales as those sales we make to Marathon brand customers, our Speedway operations and to our wholesale customers with whom we have required minimum volume sales contracts. Our assured sales currently account for approximately 70% of our gasoline production. We believe having assured sales brings ratability to our distribution systems, provides a solid base to enhance our overall supply reliability and allows us to efficiently and effectively optimize our operations across our refineries and our transportation and distribution system.
High Quality Network of Strategically Located Assets
We believe we are the largest crude oil refiner in the Midwest and the second largest in the United States based on crude oil refining capacity. We own a six-plant refinery network, with approximately 1.9 mmbpcd of crude oil throughput capacity. Our refineries process a wide range of crude oils, feedstocks and condensate, including heavy and sour crude oils, which can generally be purchased at a discount to sweet crude oil, and produce transportation fuels such as gasoline and distillates, specialty chemicals and other refined products. While we have historically processed significant quantities of heavy and sour crude oils, our refineries have the ability to process as much as 65 percent to 70 percent light sweet or sour crude oils.

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The geographic locations of our refineries provide us with strategic advantages. Located in PADD II and PADD III, which consist of states in the Midwest and the Gulf Coast regions of the United States, our refineries have the ability to procure crude oil from a variety of supply sources, including domestic, Canadian and other foreign sources, which provides us with flexibility to optimize crude supply costs. For example, geographic proximity to various United States shale oil regions and Canadian crude oil supply sources allows our refineries access to price-advantaged crude oils and lower transportation costs than certain of our refining competitors. Our refinery locations and midstream distribution system also allow us to access refined product export markets and to serve a broad range of key end-user markets across the United States quickly and cost-effectively.
MPLX’s logistics assets are similarly located in the Midwest and Gulf Coast regions of the United States. These regions collectively comprised approximately 75 percent of total United States crude distillation capacity and can serve markets representing approximately 81 percent of total United States finished products demand for the year ended December 31, 2017, according to the EIA. This significantly complements our Refining & Marketing segment and creates strategic opportunities for MPC. MPLX is also the largest natural gas processor and fractionator in the Marcellus and Utica shale regions which provides it with strategic competitive advantages in capturing and contracting for gathering, processing and fractionation of new supplies of natural gas as production in these regions continues to increase. MPLX also has a growing presence in the southwestern portion of the United States with an existing strong competitive position with ample opportunities for long-term continued organic growth and close proximity to other expansion opportunities. As of December 31, 2017, MPLX’s gathering and processing operations include approximately 5.9 bcf/d of gathering capacity, 8.0 bcf/d of natural gas processing capacity and 610 mbpd of fractionation capacity. Our integrated midstream energy asset network links producers of natural gas, NGLs and crude oil from some of the largest supply basins in the United States to domestic and international markets.
Our Speedway segment, which operates in the Midwest, East Coast and Southeast, complements our refining and midstream assets providing a significant and ratable outlet for our refinery production. Speedway’s expansion from nine to 21 states since 2013 has also enabled us to further leverage our integrated refining and transportation system. Speedway is a top performer in the convenience store industry with the highest EBITDA per store per month of its public peers and leading positions with respect to other comparisons based on light products volume, merchandise sales and total margin on a per store per month basis.

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*    As of December 31, 2017
General Partner and Sponsor of MPLX
Our investment in MPLX provides us an efficient vehicle to invest in organic projects and pursue acquisitions of midstream assets; all with the focus of enhancing our share price through our limited partner interest in MPLX. MLP interests tend to receive higher market multiples. MPLX’s liquidity, size, scale and access to the capital markets should provide us a strong foundation to execute our strategy for growing our midstream business.
Following the completion of our strategic actions to enhance shareholder value discussed earlier, we own approximately 505 million MPLX common units with a value of $19.15 billion based on MPLX’s February 1, 2018 closing unit price of $37.95.
See Item 8. Financial Statements and Supplementary Data – Note 4 for additional information on the dropdowns to MPLX.
Established Track Record of Profitability
We have demonstrated an ability to achieve positive financial results throughout all stages of the business cycle due in large part to our business mix and geographic diversity. Income generated by our Speedway segment is less sensitive to business cycles. Similarly, long-term, fee based income generated by our Midstream segment is more stable over business cycles, while our Refining & Marketing segment enables us to generate significant income and cash flow when market conditions are more favorable. We also believe our strategies position us well to continue to achieve competitive financial results.
Strong Financial Position
As of December 31, 2017, we had $3.01 billion in cash and cash equivalents and $4.25 billion in unused committed borrowing facilities, excluding MPLX’s cash and cash equivalents of $5 million and its credit facilities. We had $6.00 billion of debt at year-end, excluding MPLX debt of $6.95 billion. This combination of strong liquidity and manageable leverage provides financial flexibility to fund our growth projects and to pursue our business strategies.

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Our Business Strategies
Maintain Top-Tier Safety and Environmental Performance
We remain committed to operating our assets in a safe and reliable manner and targeting continual improvement in our safety record across all of our operations. We have a history of safe and reliable operations, which was demonstrated again in 2017 with solid personal and process safety performance compared to similar industry averages. In addition, our corporate headquarters, four of our six refineries and 11 additional facilities have earned designations as an OSHA VPP Star site which recognizes employers and workers who have implemented effective safety and health management systems. 
We also remain committed to environmental stewardship by continuing to improve the efficiency and reliability of our operations. For instance, in 2010, we established a “Focus on Energy” initiative to bolster our commitment to improving the efficiency of our existing installations. As part of this initiative, a team of dedicated energy specialists was formed to: track and communicate nearly 600 individual energy metrics throughout our refining system; ensure energy efficiency is designed into proposed capital and expense projects; and identify and implement energy-efficiency improvements at each of our refineries, including multi-year programs to enhance insulation, steam system performance and heat integration. Through this focus, our refineries have achieved significant energy-efficiency improvements and performance. Since the EPA began recognizing petroleum refineries under its Energy Star® program in 2006, we have earned 76 percent of the Energy Star® recognitions, despite owning and operating just 10 percent of total U.S. refining capacity. We have also implemented similar initiatives in our transportation fleet which has been recognized as an EPA SmartWay® partner. The SmartWay program recognizes the best-performing freight carriers for greenhouse gas and energy efficiency. These measures not only reduce emissions but can also reduce operating costs.
We proactively address our regulatory requirements and encourage our operations to continually improve their environmental performance through our DEI program, which establishes goals and measures performance. In 2017, we began to include our natural gas gathering and processing operations in certain aspects of the program. Even with the additional assets included, we maintained our performance from 2016 with 31 DEI’s, a 53 percent reduction in DEI’s since 2013. Since 2001, MPC’s health, environment, safety and security (“HES&S”) performance has been continually improving under the Responsible Care® Management System, and we are now moving into a more rigorous phase of HES&S management that represents a new level of commitment: RC14001®:2015 certification. RC14001 is a management system that combines Responsible Care with the globally recognized ISO14001:2015 environmental management system, established by the International Organization for Standardization (“ISO”). ISO is an independent, nongovernmental international body that provides world-class specifications for products, services and systems that ensure quality, safety and efficiency. Similar to Responsible Care, RC14001 provides the Company a management system that integrates health, environmental stewardship, safety and security, and is third-party audited to ensure compliance and continual improvement. Two of our six refineries and our Marathon Pipeline organization and Terminal, Transport and Rail organization are already certified to the RC14001 standard. We expect that our remaining refineries will by certified in 2018 and our natural gas gathering and processing operations will begin to seek RC14001 certification in 2019.
Grow Higher Valued, Stable Cash Flow Businesses
We intend to continue allocating significant portions of our capital to investments to grow our midstream and retail businesses. These businesses typically have more predictable and stable income and cash flows compared to our refining operations and we believe investors assign a higher value to such businesses.
MPLX has significantly expanded its midstream activities through mergers and acquisitions, dropdown transactions with MPC and organic growth projects. MPLX will consider organic growth projects that provide attractive returns and cash flows both within its geographic footprint as well as in new regions. MPLX may pursue these opportunities as standalone projects, with MPC or with other parties. MPLX has identified a number of potential projects over the next several years. These primarily include projects to expand gathering, processing and fractionation infrastructure in the Marcellus and Utica regions and infrastructure investments in the Permian Basin to support significant oil and gas production activities forecasted in those regions.
We intend to continue growing Speedway’s profitability by focusing on organic growth opportunities targeted to fill in voids in our existing markets by building new locations and by rebuilding or remodeling existing stores. We will also look to expand our presence by opportunistically acquiring high quality stores in new and existing markets. We have identified numerous opportunities for new convenience stores or store rebuilds in our existing market, with a continued focus in Chicago and Tennessee, as well as opportunities for growth in new markets including Georgia, South Carolina and upstate New York. We also plan to capitalize on diesel demand growth by building out our network of commercial fueling lane locations, which cater to local and regional transport fleets, within our core market.

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Focus on Long-Term Integrated Relationships with Our Producer Customers
MPLX has developed long-term integrated relationships with its natural gas and NGL producer customers. These relationships are characterized by an intense focus on customer service and a deep understanding of producer customers’ requirements coupled with the ability to increase the level of our midstream services in response to their midstream requirements. Through collaborative planning with these producer customers, MPLX continues to construct high-quality midstream infrastructure and provide unique solutions that are critical to the ongoing success of producer customers’ development plans. As a result of these efforts, MPLX’s MarkWest subsidiary has been a top-rated midstream service provider in customer satisfaction since 2006, as determined by an independent research provider.
Pursue Margin Enhancing Investments in Refining to Deliver Top Quartile Refining Performance
Our refining system has the flexibility to process a wide array of crude oils, which positions us well to benefit from economically attractive Canadian heavy crudes, heavy/sour waterborne cargos, as well as the growing crude oil and condensate production from North American shale plays. In addition to having access to multiple domestic markets for our refined products, we are also well positioned to export distillates and gasoline from our Gulf Coast refineries.
We intend to enhance margins in our Refining & Marketing segment by realizing benefits from targeted investments, primarily in our Gulf Coast refining operations. Over the mid- to long-term, we believe significant opportunities exist for refiners that can access international markets with their refined products and that can upgrade residual fuel oil into more valuable refined products, especially distillates. To this end, we are investing approximately $1.5 billion in Galveston Bay through the STAR project to create a world-class refining complex. This investment will enable us to upgrade low value residual fuel oil into higher value refined products and lowers the refinery’s cost of production. The project scope increases heavy crude processing capacity, increases distillate and gas oil recovery and improves the refinery’s overall reliability. Project implementation began in 2016 and will complete in early 2022. In addition to STAR, we are expanding Galveston Bay’s waterborne product loading capacity to optimize our Gulf Coast product supply system. We are also investing approximately $200 million in our Garyville refinery to increase coking capacity and ULSD production, scheduled to complete in 2020. Both the Galveston Bay STAR and Garyville coker expansion projects will allow MPC to capitalize on the expected increase in demand for low sulfur distillate arising from the International Maritime Organization (“IMO”) low sulfur bunker fuel requirements effective in 2020. Additionally, Garyville will complete the final phase of its Diesel Max project in early-2018, increasing MPC’s ULSD production, anticipated to be a key blending component for compliant bunker fuel. Finally, MPC has additional projects under development that would yield benefit through residual fuel oil destruction or increased ULSD production.  
Sustain Focus on Disciplined Capital Allocation and Shareholder Returns
We intend to maintain our focus on a disciplined and balanced approach to capital allocation, including return of capital to shareholders, in a manner consistent with maintaining an investment-grade credit profile. Since becoming a stand-alone company in June 2011, our dividend has increased by a 26.5 percent compound annual growth rate and our board of directors has authorized share repurchases totaling $13.0 billion. Through open market purchases and two ASR programs, we repurchased 246 million shares of our common stock for approximately $9.81 billion, representing approximately 35 percent of our outstanding common shares when we became a stand-alone company in June 2011. We achieved these shareholder returns while also investing in the business and maintaining an investment-grade credit profile. As of December 31, 2017, $3.19 billion of authorization remains available for future share repurchases.
Utilize and Enhance our High Quality Employee Workforce
We utilize our high quality employee workforce by continuously leveraging their commercial skills. In addition, we continue to enhance our workforce through active recruitment of the best candidates from diverse backgrounds and effective training programs on safety, environmental stewardship, diversity and inclusion and other professional and technical skills.
The above discussion contains forward-looking statements with respect to the business and operations of MPC and our competitive strengths and business strategies, including our expected investments and the adequacy of our capital resources and liquidity. Factors that could impact our competitive strengths and business strategies, including the adequacy of our capital resources and liquidity include, but are not limited to, our ability to achieve the strategic and other objectives related to the strategic initiatives discussed herein; our ability to generate sufficient income and cash flow to effect the intended share repurchases, including within the expected timeframe; our ability to manage disruptions in credit markets or changes to our credit rating; the potential impact on our share price if we are unable to effect the intended share repurchases; adverse changes in laws including with respect to tax and regulatory matters; changes to the expected construction costs and timing of projects; continued/further volatility in and/or degradation of market and industry conditions; the availability and pricing of crude oil and other feedstocks; slower growth in domestic and Canadian crude supply; the effects of the lifting of the U.S. crude oil export ban; completion of pipeline capacity to areas outside the U.S. Midwest; consumer demand for refined products; transportation logistics; the reliability of processing units and other equipment; MPC's ability to successfully implement growth opportunities; the impact of adverse market conditions affecting MPC’s and MPLX’s midstream business; modifications to MPLX earnings

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and distribution growth objectives; 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/or enforcement actions initiated thereunder; adverse results in litigation; changes to MPC's capital budget; other risk factors inherent to MPC's industry. These factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements. For additional information on forward-looking statements and risks that can affect our business, see “Disclosures Regarding Forward-Looking Statements” and Item 1A. Risk Factors in this Annual Report on Form 10-K.
Refining & Marketing
Refineries
We currently own and operate six refineries in the Gulf Coast and Midwest regions of the United States with an aggregate crude oil refining capacity of 1,881 mbpcd. During 2017, we merged the management and operations of the Galveston Bay and Texas City refineries into a single world-class refining complex that is now operated as Galveston Bay Refinery. As of December 31, 2017, historical refinery data reported for Galveston Bay will include the former Texas City refinery. During 2017, our refineries processed 1,765 mbpd of crude oil and 179 mbpd of other charge and blendstocks. During 2016, our refineries processed 1,699 mbpd of crude oil and 151 mbpd of other charge and blendstocks.
Our refineries include crude oil atmospheric and vacuum distillation, fluid catalytic cracking, hydrocracking, catalytic reforming, coking, desulfurization and sulfur recovery units. The refineries process a wide variety of condensate, light and heavy crude oils purchased from various domestic and foreign suppliers. We produce numerous refined products, ranging from transportation fuels, such as reformulated gasolines, blend-grade gasolines intended for blending with ethanol and ULSD fuel, to heavy fuel oil and asphalt. Additionally, we manufacture aromatics, propane, propylene and sulfur. See the Refined Product Marketing section for further information about the products we produce.
Our refineries are integrated with each other via pipelines, terminals and barges to maximize operating efficiency. The transportation links that connect our refineries allow the movement of intermediate products between refineries to optimize operations, produce higher margin products and efficiently utilize our processing capacity. For example, naphtha may be moved from Galveston Bay to Robinson where excess reforming capacity is available. Also, shipping intermediate products between facilities during partial refinery shutdowns allows us to utilize processing capacity that is not directly affected by the shutdown work.
Following is a description of each of our refineries and their capacity.
Galveston Bay, Texas City, Texas Refinery (571 mbpcd). Our Galveston Bay refinery is a world-class refining complex resulting from the combination of our former Texas City refinery and Galveston Bay refinery, which we acquired on February 1, 2013. The refinery is located on the Texas Gulf Coast approximately 30 miles southeast of Houston, Texas and can process a wide variety of crude oils into gasoline, distillates, aromatics, heavy fuel oil, refinery-grade propylene, fuel-grade coke, dry gas and sulfur. The refinery has access to the export market and multiple options to sell refined products. Our cogeneration facility, which supplies the Galveston Bay refinery, currently has 1,055 megawatts of electrical production capacity and can produce 4.3 million pounds of steam per hour. Approximately 46 percent of the power generated in 2017 was used at the refinery, with the remaining electricity being sold into the electricity grid.
Garyville, Louisiana Refinery (556 mbpcd). Our Garyville, Louisiana refinery is located along the Mississippi River in southeastern Louisiana between New Orleans, Louisiana and Baton Rouge, Louisiana. The Garyville refinery is configured to process a wide variety of crude oils into gasoline, distillates, fuel-grade coke, asphalt, polymer-grade propylene, propane, dry gas, heavy fuel oil, slurry, refinery-grade propylene and sulfur. The refinery has access to the export market and multiple options to sell refined products. A major expansion project was completed in 2009 that increased Garyville’s crude oil refining capacity, making it one of the largest refineries in the U.S. Our Garyville refinery has earned designation as an OSHA VPP Star site.
Catlettsburg, Kentucky Refinery (277 mbpcd). Our Catlettsburg, Kentucky refinery is located in northeastern Kentucky on the western bank of the Big Sandy River, near the confluence with the Ohio River. The Catlettsburg refinery processes sweet and sour crude oils into gasoline, distillates, asphalt, aromatics, heavy fuel oil and propane. In the second quarter of 2015, we completed construction of a condensate splitter at our Catlettsburg refinery, which increased our capacity to process condensate from the Utica shale region.
Robinson, Illinois Refinery (245 mbpcd). Our Robinson, Illinois refinery is located in southeastern Illinois. The Robinson refinery processes sweet and sour crude oils into gasoline, distillates, anode-grade coke, propane, aromatics, slurry and refinery-grade propylene. The Robinson refinery has earned designation as an OSHA VPP Star site.

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Detroit, Michigan Refinery (139 mbpcd). Our Detroit, Michigan refinery is located in southwest Detroit. It is the only petroleum refinery currently operating in Michigan. The Detroit refinery processes sweet and heavy sour crude oils into gasoline, distillates, asphalt, fuel-grade coke, chemical-grade propylene, propane and slurry. Our Detroit refinery earned designation as an OSHA VPP Star site. In the fourth quarter of 2012, we completed a heavy oil upgrading and expansion project that enabled the refinery to process up to an additional 80 mbpd of heavy sour crude oils, including Canadian crude oils.
Canton, Ohio Refinery (93 mbpcd). Our Canton, Ohio refinery is located approximately 60 miles south of Cleveland, Ohio. The Canton refinery processes sweet and sour crude oils, including production from the nearby Utica Shale, into gasoline, distillates, asphalt, roofing flux, propane, refinery-grade propylene and slurry. In December 2014, we completed construction of a condensate splitter at our Canton refinery, which increased our capacity to process condensate from the Utica shale region. The Canton refinery has earned designation as an OSHA VPP Star site.
As of December 31, 2017, our refineries had 22 rail loading racks and 26 truck loading racks and three of our refineries had a total of seven owned and 12 non-owned docks. Total throughput in 2017 was 99 mbpd for the refinery loading racks and 875 mbpd for the refinery docks.
Planned maintenance activities, or turnarounds, requiring temporary shutdown of certain refinery operating units, are periodically performed at each refinery. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional detail.
Refined Product Yields
The following table sets forth our refinery production by product group for each of the last three years.
Refined Product Yields (mbpd)
 
2017
 
2016
 
2015
Gasoline
 
932

 
900

 
913

Distillates
 
641

 
617

 
603

Propane
 
36

 
35

 
36

Feedstocks and special products
 
277

 
241

 
281

Heavy fuel oil
 
37

 
32

 
31

Asphalt
 
63

 
58

 
55

Total
 
1,986

 
1,883

 
1,919

Crude Oil Supply
We obtain the crude oil we refine through negotiated term contracts and purchases or exchanges on the spot market. Our term contracts generally have market-related pricing provisions. The following table provides information on our sources of crude oil for each of the last three years. The crude oil sourced outside of North America was acquired from various foreign national oil companies, production companies and trading companies.
Sources of Crude Oil Refined (mbpd)
 
2017
 
2016
 
2015
United States
 
999

 
986

 
1,138

Canada
 
381

 
326

 
244

Middle East and other international
 
385

 
387

 
329

Total
 
1,765

 
1,699

 
1,711

Our refineries receive crude oil and other feedstocks and distribute our refined products through a variety of channels, including pipelines, trucks, railcars, ships and barges.
Renewable Fuels
We currently own a biofuel production facility in Cincinnati, Ohio that produces biodiesel, glycerin and other by-products. The capacity of the plant is approximately 70 million gallons per year.
We hold ownership interests in ethanol production facilities in Albion, Michigan; Clymers, Indiana and Greenville, Ohio. These plants have a combined ethanol production capacity of approximately 415 million gallons per year (27 mbpd) and are managed by a co-owner.

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Refined Product Marketing
We believe we are one of the largest wholesale suppliers of gasoline and distillates to resellers and consumers within our 26-state market area. Independent retailers, wholesale customers, our Marathon brand jobbers and Speedway brand convenience stores, airlines, transportation companies and utilities comprise the core of our customer base.
The following table sets forth our refined product sales volumes by product group for each of the last three years.
Refined Product Sales by Product Group (mbpd)
 
2017
 
2016
 
2015
Gasoline
 
1,201

 
1,219

 
1,241

Distillates
 
691

 
676

 
667

Propane
 
37

 
35

 
36

Feedstocks and special products
 
265

 
231

 
258

Heavy fuel oil
 
69

 
35

 
30

Asphalt
 
68

 
63

 
57

Total
 
2,331

 
2,259

 
2,289

In addition, we sell gasoline, distillates and asphalt for export, primarily out of our Garyville and Galveston Bay refineries. The following table sets forth our refined product sales destined for export by product group for the past three years.
Refined Product Sales Destined for Export (mbpd)
 
2017
 
2016
 
2015
Gasoline
 
96

 
91

 
101

Distillates
 
192

 
199

 
214

Asphalt
 
9

 
6

 
4

Total
 
297

 
296

 
319

Gasoline and Distillates. We sell gasoline, gasoline blendstocks and distillates (including No. 1 and No. 2 fuel oils, jet fuel, kerosene and diesel fuel) to wholesale customers, Marathon-branded independent entrepreneurs and our Speedway® convenience stores and on the spot market. In addition, we sell diesel fuel and gasoline for export to international customers. We sold 52 percent of our gasoline sales volumes and 89 percent of our distillates sales volumes on a wholesale or spot market basis in 2017. The demand for gasoline and distillates is seasonal in many of our markets, with demand typically at its highest levels during the summer months.
We have blended ethanol into gasoline for more than 25 years and began expanding our blending program in 2007, in part due to federal regulations that require us to use specified volumes of renewable fuels. Ethanol volumes sold in blended gasoline were 81 mbpd in 2017, 84 mbpd in 2016 and 85 mbpd in 2015. We sell reformulated gasoline, which is also blended with ethanol, in 12 states in our marketing area. We also sell biodiesel-blended diesel fuel in 17 states in our marketing area. The future expansion or contraction of our ethanol and biodiesel blending programs will be driven by market economics and government regulations.
Propane. We produce propane at all of our refineries. Propane is primarily used for home heating and cooking, as a feedstock within the petrochemical industry, for grain drying and as a fuel for trucks and other vehicles. Our propane sales are typically split evenly between the home heating market and petrochemical consumers.
Feedstocks and Special Products. We are a producer and marketer of feedstocks and special products. Product availability varies by refinery and includes platformate, alkylate, FCC unit gas, naptha, dry gas, propylene, raffinate, butane, benzene, xylene, molten sulfur, cumene and toluene. We market these products domestically to customers in the chemical, agricultural and fuel-blending industries. In addition, we produce fuel-grade coke at our Garyville, Detroit and Galveston Bay refineries, which is used for power generation and in miscellaneous industrial applications, and anode-grade coke at our Robinson refinery, which is used to make carbon anodes for the aluminum smelting industry. Our feedstocks and special products sales increased to 265 mbpd in 2017 from 231 mbpd in 2016 and decreased in 2016 from 258 mbpd in 2015. The increase in 2017 was primarily due to more feedstocks and special products sold on the spot market as a result of increased product yields. The decrease in 2016 was primarily due to more feedstocks used in production versus selling them on the spot market.
Heavy Fuel Oil. We produce and market heavy residual fuel oil or related components, including slurry, at all of our refineries. Heavy residual fuel oil is primarily used in the utility and ship bunkering (fuel) industries, though there are other more specialized uses of the product.

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Asphalt. We have refinery-based asphalt production capacity of up to 104 mbpcd, which includes asphalt cements, polymer-modified asphalt, emulsified asphalt, industrial asphalts and roofing flux. We have a broad customer base, including asphalt-paving contractors, government entities (states, counties, cities and townships) and asphalt roofing shingle manufacturers. We sell asphalt in the domestic and export wholesale markets via rail, barge and vessel.
The following table sets forth, as a percentage of total refined product sales volume, the sales of refined products to our different customer types for the past three years.
Refined Product Sales by Customer Type
 
2017
 
2016
 
2015
Private-brand marketers, commercial and industrial customers, including spot market
71
%
 
69
%
 
69
%
Marathon-branded independent entrepreneurs
13
%
 
14
%
 
14
%
Speedway® convenience stores
16
%
 
17
%
 
17
%
As of December 31, 2017, there were 5,617 retail outlets in 20 states and the District of Columbia where independent entrepreneurs maintain Marathon-branded retail outlets.
Terminals
As of December 31, 2017, our Refining & Marketing segment owned and operated 18 asphalt terminals and two light products terminals. In addition, we distribute refined products through 59 light products terminals owned by MPLX and approximately 130 third-party light products and two third-party asphalt terminals in our market area.
Transportation - Truck and Rail
As of December 31, 2017, we owned 180 transport trucks and 193 trailers with an aggregate capacity of 1.8 million gallons for the movement of refined products and crude oil. In addition, we had 1,999 leased and 19 owned railcars of various sizes and capacities for movement and storage of refined products.
The locations and detailed information about our Refining & Marketing assets are included under Item 2. Properties and are incorporated herein by reference.
Speedway
Our Speedway segment sells gasoline, diesel and merchandise through convenience stores that it owns and operates under the Speedway brand. Speedway convenience stores offer a wide variety of merchandise, including prepared foods, beverages and non-food items. Speedway’s Speedy Rewards® loyalty program has been a highly successful loyalty program since its inception in 2004, with a consistently growing base which averaged approximately 6 million active members in 2017. Speedway’s ability to capture and analyze member-specific transactional data enables us to offer Speedy Rewards® members discounts and promotions specific to their buying behavior. We believe Speedy Rewards® is a key reason customers choose Speedway over competitors and it continues to drive significant value for both Speedway and our Speedy Rewards® members.
The demand for gasoline is seasonal, with the highest demand usually occurring during the summer driving season. Margins from the sale of merchandise tend to be less volatile than margins from the retail sale of gasoline and diesel fuel.
As of December 31, 2017, Speedway had 2,744 convenience stores in 21 states. Speedway also owns a 29 percent interest in PFJ Southeast LLC (“PFJ Southeast”), which is a joint venture between Speedway and Pilot Flying J with 124 travel center locations primarily in the Southeast United States as of December 31, 2017.
As of December 31, 2017, Speedway owned 109 transport trucks and 103 trailers for the movement of gasoline and distillate.
The locations and detailed information about our Speedway assets are included under Item 2. Properties and are incorporated herein by reference.
Midstream
The Midstream segment, which primarily includes the operations of MPLX, gathers, processes and transports natural gas; gathers, transports, fractionates, stores and markets NGLs; and transports and stores crude oil and refined products principally for the Refining & Marketing segment via pipelines, terminals, towboats and barges. The Midstream segment also includes certain related operations retained by MPC.
MPLX
As of December 31, 2017, MPLX assets included approximately 5.9 bcf/d of natural gas gathering capacity, 8.0 bcf/d of natural gas processing capacity and 610 mbpd of NGL fractionation capacity.

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MPLX assets as of December 31, 2017, also included 1,613 miles of owned or leased and operated common carrier crude oil pipelines and 2,360 miles of common carrier products pipelines and partial ownership in 2,194 miles of crude oil pipelines and 1,917 miles of products pipelines, all of which are across 17 states. In 2017, third parties generated 16 percent of the crude oil and product shipments on MPLX’s common carrier pipelines, excluding volumes shipped by MPC under joint tariffs with third parties. MPLX owns nine butane and propane storage caverns with total capacity of approximately 3 million barrels.
As of December 31, 2017, MPLX owned and operated 59 light products terminals and distributes refined products through one leased light products terminal and two light products terminals in which it has partial ownership interests but does not operate.
As of December 31, 2017, MPLX’s marine transportation operations included 18 owned towboats, as well as 208 owned and 24 leased barges that transport refined products and crude oil on the Ohio, Mississippi and Illinois rivers and their tributaries and inter-coastal waterways.

MPC-Retained Midstream Assets and Investments
We retained ownership interests in several crude oil and products pipeline systems and pipeline companies. We own 228 miles of private products pipelines that are operated by MPL for the benefit of our Refining & Marketing segment on a cost recovery basis. We also have undivided joint interests in 739 miles of common carrier crude oil pipeline systems and partial ownership interests in pipeline companies including 1,741 miles of products pipelines.
As of December 31, 2017, we also have indirect ownership interests in two ocean vessel joint ventures with Crowley through our investment in Crowley Coastal Partners. These joint ventures operate and charter four Jones Act product tankers, most of which are leased to MPC, and own and operate three 750 Series ATB vessels that are leased to MPC.
The locations and detailed information about our Midstream assets are included under Item 2. Properties and are incorporated herein by reference.
Competition, Market Conditions and Seasonality
The downstream petroleum business is highly competitive, particularly with regard to accessing crude oil and other feedstock supply and the marketing of refined products. We compete with a large number of other companies to acquire crude oil for refinery processing and in the distribution and marketing of a full array of refined products. Based upon the “The Oil & Gas Journal 2018 Worldwide Refinery Survey,” we ranked second among U.S. petroleum companies on the basis of U.S. crude oil refining capacity.
We compete in four distinct markets for the sale of refined products—wholesale, spot, branded and retail distribution. We believe we compete with about 50 companies in the sale of refined products to wholesale marketing customers, including private-brand marketers and large commercial and industrial consumers; about 110 companies in the sale of refined products in the spot market; about 10 refiners or marketers in the supply of refined products to refiner-branded independent entrepreneurs; and approximately 830 retailers in the retail sale of refined products. In addition, we compete with producers and marketers in other industries that supply alternative forms of energy and fuels to satisfy the requirements of our industrial, commercial and retail consumers. We do not produce any of the crude oil we refine.
We also face strong competition for sales of retail gasoline, diesel fuel and merchandise. Our competitors include service stations and convenience stores operated by fully integrated major oil companies, independent entrepreneurs and other well-recognized national or regional convenience stores and travel centers, often selling gasoline, diesel fuel and merchandise at competitive prices. Non-traditional retailers, such as supermarkets, club stores and mass merchants, have affected the convenience store industry with their entrance into sales of retail gasoline and diesel fuel. Energy Analysts International, Inc. estimated such retailers had approximately 15 percent of the U.S. gasoline market in mid-2017.
Our Midstream operations face competition for natural gas gathering, crude oil transportation and in obtaining natural gas supplies for our processing and related services; in obtaining unprocessed NGLs for gathering and fractionation; and in marketing our products and services. Competition for natural gas supplies is based primarily on the location of gas gathering facilities and gas processing plants, operating efficiency and reliability and the ability to obtain a satisfactory price for products recovered. Competitive factors affecting our fractionation services include availability of capacity, proximity to supply and industry marketing centers and cost efficiency and reliability of service. Competition for customers to purchase our natural gas and NGLs is based primarily on price, delivery capabilities, flexibility and maintenance of high-quality customer relationships. In addition, certain of our Midstream operations are highly regulated, which affects the rates that our common carrier pipelines can charge for transportation services and the return we obtain from such pipelines.
Market conditions in the oil and gas industry are cyclical and subject to global economic and political events and new and changing governmental regulations. Our operating results are affected by price changes in crude oil, natural gas and refined

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products, as well as changes in competitive conditions in the markets we serve. Price differentials between sweet and sour crude oils, WTI and LLS crude oils and other market structure differentials also affect our operating results.
Demand for gasoline, diesel fuel and asphalt is higher during the spring and summer months than during the winter months in most of our markets, primarily due to seasonal increases in highway traffic and construction. As a result, the operating results for each of our segments for the first and fourth quarters may be lower than for those in the second and third quarters of each calendar year.
Our Midstream segment can be affected by seasonal fluctuations in the demand for natural gas and NGLs and the related fluctuations in commodity prices caused by various factors such as changes in transportation and travel patterns and variations in weather patterns from year to year. Overall, our exposure to the seasonal fluctuations in the commodity markets is declining due to our growth in fee-based business.
Environmental Matters
Our management is responsible for ensuring that our operating organizations maintain environmental compliance systems that support and foster our compliance with applicable laws and regulations, and for reviewing our overall environmental performance. We also have a Corporate Emergency Response Team that oversees our response to any major environmental or other emergency incident involving us or any of our facilities.
We believe it is likely that the scientific and political attention to issues concerning the extent and causes of climate change will continue, with the potential for further regulations that could affect our operations. Currently, legislative and regulatory measures to address greenhouse gases are in various phases of review, discussion or implementation. The cost to comply with these laws and regulations cannot be estimated at this time, but could be significant. For additional information, see Item 1A. Risk Factors. We estimate and publicly report greenhouse gas emissions from our operations and products. Additionally, we continuously strive to improve operational and energy efficiencies through resource and energy conservation where practicable.
Our operations are subject to numerous other laws and regulations relating to the protection of the environment. Such laws and regulations include, among others, the Clean Air Act (“CAA”) with respect to air emissions, the Clean Water Act (“CWA”) with respect to water discharges, the Resource Conservation and Recovery Act (“RCRA”) with respect to solid and hazardous waste treatment, storage and disposal, the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) with respect to releases and remediation of hazardous substances and the Oil Pollution Act of 1990 (“OPA-90”) with respect to oil pollution and response. In addition, many states where we operate have similar laws. New laws are being enacted and regulations are being adopted on a continuing basis, and the costs of compliance with such new laws and regulations are very difficult to estimate until finalized.
For a discussion of environmental capital expenditures and costs of compliance for air, water, solid waste and remediation, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Environmental Matters and Compliance Costs.
Air
We are subject to many requirements in connection with air emissions from our operations. Internationally and domestically, emphasis has been placed on reducing greenhouse gas emissions. There has been a dramatic shift in climate-related policy under the Trump Administration as compared to the Obama Administration’s policies. On March 28, 2017, President Trump published Executive Order 13783, pledging, among other things, to review, rescind, revoke or withdraw much of the Obama-era climate change policies, regulations and guidance. The most prominent policies and regulations impacted by the Executive Order include the Obama Administration’s 2013 Climate Action Plan, the “Clean Power Plan,” the “Social Cost of Carbon,” the “Social Cost of Methane” and the Council on Environmental Quality’s “Final Guidance for Federal Departments and Agencies on Consideration of Greenhouse Gas Emissions and the Effects of Climate Change in National Environmental Policy Act Reviews.” President Trump also announced the United States would withdraw from the 2015 Paris UN Climate Change Conference Agreement, which aims to hold the increase in the global average temperature to well below two degrees Celsius as compared to pre-industrial levels. Many of the policies and regulations rescinded through Executive Order 13783 had been adopted to meet the United States’ pledge under the Agreement. The U.S. climate change strategy and implementation of that strategy through legislation and regulation may change under future administrations; therefore, the impact to our industry and operations due to greenhouse gas regulation is unknown at this time.
Regardless of whether legislation or regulation is enacted, given the continuing global demand for oil and gas - even under different hypothetical carbon-constrained scenarios - MPC has taken actions that have resulted in lower greenhouse gas emissions and we are positioned to remain a successful company well into the future. We have instituted a program to improve energy efficiency of our refineries and other assets which will continue to pay dividends in reducing our environmental

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footprint as well as making us more cost-competitive. We believe our mature governance and risk-management processes enable the company to effectively monitor and adjust to any transitional or physical climate-related risks.
In 2009, the EPA issued an “endangerment finding” that greenhouse gas emissions contribute to air pollution that endangers public health and welfare. Related to the endangerment finding, in April 2010, the EPA finalized a greenhouse gas emission standard for mobile sources (cars and other light duty vehicles). The endangerment finding, the mobile source standard and the EPA’s determination that greenhouse gases are subject to regulation under the Clean Air Act resulted in permitting of greenhouse gas emissions at stationary sources. Through a series of legal challenges filed against the EPA, the requirement to control greenhouse gas emissions through Best Available Control Technology has been limited to new and modified large stationary sources, such as refineries, that will also emit a criteria pollutant. Implementing Best Available Control Technology may result in increased costs to our operations. A few MPC projects may trigger greenhouse gas permitting requirements but any additional capital spending will likely not be significant.
The EPA has finalized Source Performance Standards for greenhouse gas emissions for new and existing electric utility generating units. These standards could impact electric and natural gas rates for all our operations. Legal challenges have been filed by several states and by industry groups seeking to overturn the final rules. In February 2016, the United States Supreme Court stayed implementation of the standards for existing utility generating units (also known as the Clean Power Plan) until complete disposition of the litigation. The litigation has been placed in abeyance. On October 10, 2017, the EPA issued a Notice of Proposed Rulemaking proposing to repeal the Clean Power Plan. The EPA has also announced its intention to replace the Clean Power Plan with a narrower rule. A proposed replacement rule is expected in 2018.
In the absence of federal legislation or regulation of greenhouse gas emissions, states are becoming more active in regulating greenhouse gas emissions. These measures may include state actions to develop statewide or regional programs to impose emission reductions. These measures may also include low-carbon fuel standards, such as the California program, or a state carbon tax. These measures could result in increased costs to operate and maintain our facilities, capital expenditures to install new emission controls and costs to administer any carbon trading or tax programs implemented.
We could also face increased climate-related litigation with respect to our operations or products. Private party litigation seeking damages and injunctive relief is pending against MPC and other oil and gas companies in California state court. Although uncertain, these actions could increase our costs or operations or reduce the demand for the refined products we produce, transport, store and sell.
Private parties have also sued federal and certain state governmental entities seeking additional greenhouse gas emission reductions beyond those currently being undertaken. In sum, requiring reductions in greenhouse gas emissions could result in increased costs to (i) operate and maintain our facilities, (ii) install new emission controls at our facilities and (iii) administer and manage any greenhouse gas emissions programs, including acquiring emission credits or allotments. These requirements may also significantly affect MPC’s refinery operations and may have an indirect effect on our business, financial condition and results of operations. The extent and magnitude of the impact from greenhouse gas regulation or legislation cannot be reasonably estimated due to the uncertainty regarding the additional measures and how they will be implemented.
In 2015, the EPA finalized a revision to the National Ambient Air Quality Standards (“NAAQS”) for ozone. The EPA lowered the primary ozone NAAQS from 75 ppb to 70 ppb. This revision initiated a multi-year process in which nonattainment designations will be made based on more recent ozone measurements that includes data from 2016. On November 6, 2017, the EPA finalized ozone attainment/unclassifiable designations for certain areas under the new standard. The EPA has not yet designated any counties as nonattainment under the lower primary ozone standard, but such nonattainment designations could result in increased costs associated with, or result in cancellation or delay of, capital projects at our facilities. For areas designated nonattainment, states will be required to adopt State Implementation Plans (“SIPs”) for nonattainment areas. These SIPs may include NOx and/or VOC reductions that could result in increased costs to our facilities. We cannot predict the various SIPs requirements at this time.
On September 29, 2015, the EPA signed the final regulations revising existing refinery air emissions standards. The revised regulations were published in the Federal Register on December 1, 2015. The revised rule requires additional controls, lower emission standards and ambient air monitoring to be implemented over a multi-year period. We do not anticipate that MPC’s costs to comply with the revised regulations will be material to our results of operations or cash flows.
Water
We maintain numerous discharge permits as required under the National Pollutant Discharge Elimination System program of the CWA and have implemented systems to oversee our compliance with these permits. In addition, we are regulated under OPA-90, which among other things, requires the owner or operator of a tank vessel or a facility to maintain an emergency plan to respond to releases of oil or hazardous substances. OPA-90 also requires the responsible company to pay resulting removal

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costs and damages and provides for civil penalties and criminal sanctions for violations of its provisions. We operate tank vessels and facilities from which spills of oil and hazardous substances could occur. We have implemented emergency oil response plans for all of our components and facilities covered by OPA-90 and we have established Spill Prevention, Control and Countermeasures plans for all facilities subject to such requirements.
Additionally, OPA-90 requires that new tank vessels entering or operating in U.S. waters be double-hulled and that existing tank vessels that are not double-hulled be retrofitted or removed from U.S. service. All barges used for river transport of our raw materials and refined products meet the double-hulled requirements of OPA-90. Some coastal states in which we operate have passed state laws similar to OPA-90, but with expanded liability provisions, that include provisions for cargo owner responsibility as well as ship owner and operator responsibility.
In June 2015, the EPA and the United States Army Corps of Engineers finalized significant changes to the definition of the term “waters of the United States” (“WOTUS”) used in numerous programs under the CWA. This final rulemaking is referred to as the Clean Water Rule. The Clean Water Rule, as written, expands permitting, planning and reporting obligations and may extend the timing to secure permits for pipeline and fixed asset construction and maintenance activities. The Clean Water Rule has been challenged in multiple federal courts by many states, trade groups, and other interested parties, and in October 2015, a United States Court of Appeals issued a nationwide stay of the Clean Water Rule. On appeal, however, the Supreme Court determined that the court of appeals did not have original jurisdiction to review challenges to the 2015 Rule. As such, legal challenges to the rule will proceed in federal district courts. Concurrent with the legal challenges, on February 28, 2017, President Trump signed Executive Order 13778, directing the EPA and the Army Corps of Engineers to review the 2015 Rule for consistency with the policy outlined in the Order, and to issue a proposed rule rescinding or revising the 2015 Rule as appropriate and consistent with law. The Order also directed the agencies to consider interpreting the term ‘‘navigable waters’’ in a manner consistent with Justice Scalia’s plurality opinion in Rapanos v. United States, 547 U.S. 715 (2006). On June 27, 2017, the EPA and the U.S. Army Corps of Engineers proposed a rule to rescind the Clean Water Rule and re-codify the regulatory text that existed prior to 2015 defining "waters of the United States." Then, on February 6, 2018, the EPA and the U.S. Army Corps of Engineers published a final rule adding an applicability date of February 6, 2020, to the 2015 Clean Water Rule. Establishing an applicable date in 2020 will allow the agencies the time needed to reconsider the definition of “waters of the United States” consistent with the Executive Order.
In 2015, the EPA issued its intent to review the CWA categorical effluent limitation guidelines (“ELG”) for the petroleum refining sector. During 2017, the EPA prepared and issued a draft information request (“ICR”) requesting significant wastewater and treatment process details from select refineries, four of which were ours. EPA may also perform sampling of effluent at one or more of our refineries. The EPA has indicated they believe there have been significant changes in the characteristics of waste waters generated within refining operations that warrant the review. Specific targets for the review are the impacts of processing heavier crude oils and the transfer of air pollutants to wastewater when air pollution abatement devices are in use. A similar project, initiated in 2007 for steam electric power generation with similar attributes, resulted in a significant change in the treatment requirements for coal-fired power plants. However, on September 18, 2017, EPA postponed certain compliance dates while it conducts a rulemaking to revise the ELGs for power plants. The refining sector ELG review has the potential to result in a similar impact. The typical life-cycle for an ELG review from the intent to review to issuance of a final rule that would require upgrades is seven years. The impact of an ELG review cannot be accurately estimated at this time.
Solid Waste
We continue to seek methods to minimize the generation of hazardous wastes in our operations. RCRA establishes standards for the management of solid and hazardous wastes. Besides affecting waste disposal practices, RCRA also addresses the environmental effects of certain past waste disposal operations, the recycling of wastes and the regulation of USTs containing regulated substances. We have ongoing RCRA treatment and disposal operations at our Galveston Bay and Robinson refineries and primarily utilize offsite third-party treatment and disposal facilities. Ongoing RCRA-related costs, however, are not expected to be material to our results of operations or cash flows.
Remediation
We own or operate, or have owned or operated, certain convenience stores and other locations where, during the normal course of operations, releases of refined products from USTs have occurred. Federal and state laws require that contamination caused by such releases at these sites be assessed and remediated to meet applicable standards. Penalties or other sanctions may be imposed for noncompliance. The enforcement of the UST regulations under RCRA has been delegated to the states, which administer their own UST programs. Our obligation to remediate such contamination varies, depending on the extent of the releases and the stringency of the applicable state laws and regulations. A portion of these remediation costs may be recoverable from the appropriate state UST reimbursement funds once the applicable deductibles have been satisfied. We also have ongoing remediation projects at a number of our current and former refinery, terminal and pipeline locations.

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Claims under CERCLA and similar state acts have been raised with respect to the clean-up of various waste disposal and other sites. CERCLA is intended to facilitate the clean-up of hazardous substances without regard to fault. Potentially responsible parties for each site include present and former owners and operators of, transporters to and generators of the hazardous substances at the site. Liability is strict and can be joint and several. Because of various factors including the difficulty of identifying the responsible parties for any particular site, the complexity of determining the relative liability among them, the uncertainty as to the most desirable remediation techniques and the amount of damages and clean-up costs and the time period during which such costs may be incurred, we are unable to reasonably estimate our ultimate cost of compliance with CERCLA; however, we do not believe such costs will be material to our business, financial condition, results of operations or cash flows.
Mileage Standards, Renewable Fuels and Other Fuels Requirements
The U.S. Congress passed the Energy Independence and Security Act of 2007 (“EISA”), which, among other things, set a target of 35 miles per gallon for the combined fleet of cars and light trucks in the United States by model year 2020, and contains the RFS2. In August 2012, the EPA and the National Highway Traffic Safety Administration (“NHTSA”) jointly adopted regulations that establish average industry fleet fuel economy standards for passenger cars and light trucks of up to 41 miles per gallon by model year 2021 and average fleet fuel economy standards of up to 49.7 miles per gallon by model year 2025. The standards from 2022 to 2025 are the government’s current estimate but will require further rulemaking by the NHTSA. In 2017, the EPA announced its intention to reconsider whether the light-duty vehicle greenhouse gas emission standards previously established for years 2022-2025 are appropriate under section 202(a) of the Clean Air Act and to coordinate its reconsideration with the parallel rulemaking process to be undertaken by the Department of Transportation’s NHTSA regarding Corporate Average Fuel Economy (CAFE) standards for cars and light trucks for the same model years. Higher CAFE standards for cars and light trucks have the potential to reduce demand for our transportation fuels. New or alternative transportation fuels such as compressed natural gas could also pose a competitive threat to our operations.
The RFS2 requires the total volume of renewable transportation fuels sold or introduced annually in the U.S. to reach 24.0 billion gallons in 2017, 26.0 billion gallons in 2018 and increase to 36.0 billion gallons by 2022. Within the total volume of renewable fuel, EISA established an advanced biofuel volume of 9.0 billion gallons in 2017, 11.0 billion gallons in 2018 and increasing to 21.0 billion gallons in 2022. Subsets within the advanced biofuel volume include biomass-based diesel, which was set as at least 1.0 billion gallons in 2014 through 2022 (to be determined by the EPA through rulemaking), and cellulosic biofuel, which was set at 5.5 billion gallons in 2017, 7.0 billion gallons in 2018 and increasing to 16.0 billion gallons in 2022.
On November 30, 2015, the EPA finalized the renewable fuel standards for the years of 2014, 2015 and 2016 as well as the biomass-based diesel standard for 2017. In a legal challenge to the 2014-2016 volumes, the court vacated the total renewable volume for 2016 and remanded to EPA for reconsideration consistent with the court’s opinion. A remanded rule that increases the 2016 total renewable volume could increase our cost of compliance with the Renewable Fuels Standards and be detrimental to the RIN market.
On November 23, 2016, the EPA finalized the renewable fuel standards for the year 2017 and the biomass based diesel standard for 2018. The EPA used its cellulosic waiver authority to reduce the standards for 2017 from the statutory amounts to the following: 19.28 billion gallons total renewable fuel; 4.28 billion gallons advanced biofuel; and 311 million gallons cellulosic ethanol. The EPA increased the biomass based diesel standard for 2018 to 2.1 billion gallons. The 2017 standards have been challenged in court. On November 30, 2017, the EPA announced the final renewable fuel standards for 2018 and the biomass based diesel standard for 2019. The EPA again used its cellulosic waiver authority to reduce the standards for 2018 from the statutory amounts to the following: 19.29 billion gallons total renewable fuel; 4.29 billion gallons advanced biofuel; and 288 million gallons cellulosic ethanol. The EPA maintained the biomass based diesel standard for 2019 at 2.1 billion gallons. In the near term, the RFS2 will be satisfied primarily with ethanol blended into gasoline. Vehicle, regulatory and infrastructure constraints limit the blending of significantly more than 10 percent ethanol into gasoline (“E10”). The volumes for 2016, 2017 and 2018 result in the ethanol content of gasoline exceeding the E10 blendwall, which will require obligated parties to either sell E15 or ethanol flex fuel at levels that exceed historical levels or retire carryover RINs. In October 2010, the EPA issued a partial waiver decision under the CAA to allow for an increase in the amount of ethanol permitted to be blended into gasoline from E10 to E15 for model year 2007 and newer light-duty motor vehicles. In January 2011, the EPA issued a second waiver for the use of E15 in vehicles model year 2001-2006. There are numerous issues, including state and federal regulatory issues, associated with marketing E15 such as infrastructure compatibility issues and vehicle manufacturer warranty concerns related to E15 usage. Neither E15 nor ethanol flex fuel has been readily accepted by the consumer.
With potentially uncertain supplies, the advanced biofuels programs may present specific challenges in that we may have to enter into arrangements with other parties or purchase credits from the EPA to meet our obligations to use advanced biofuels, including biomass-based diesel and cellulosic biofuel.
We made investments in infrastructure capable of expanding biodiesel blending capability to help comply with the biodiesel RFS2 requirement by buying and blending biodiesel into our refined diesel product, and by buying needed biodiesel RINs in

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the EPA-created biodiesel RINs market. On April 1, 2014, we purchased a facility in Cincinnati, Ohio, which currently produces biodiesel, glycerin and other by-products. The capacity of the plant is approximately 60 million gallons per year. As a producer of biodiesel, we now generate RINs, thereby reducing our reliance on the external RIN market.
In November 2017, the EPA finalized its decision to deny petitions requesting that the point of obligation for the RFS2 be moved to the terminal rack. Legal challenge of the EPA’s decision is expected and, should the court decide that EPA’s decision was incorrect and move the point of obligation, we could be subject to increased costs and compliance uncertainties.
The RFS2 has required, and may in the future continue to require, additional capital expenditures or expenses by us to accommodate increased renewable fuels use. We may experience a decrease in demand for refined products due to an increase in combined fleet mileage or due to refined products being replaced by renewable fuels. Demand for our refined products also may increase as a result of low carbon fuel standard programs or electric vehicle mandates.
On March 3, 2014, the EPA signed the final Tier 3 fuel standards. The final Tier 3 fuel standards require, among other things, a lower annual average sulfur level in gasoline to no more than 10 ppm beginning in calendar year 2017. In addition, gasoline refiners and importers may not exceed a maximum per-gallon sulfur standard of 80 ppm while retailers may not exceed a maximum per-gallon sulfur standard of 95 ppm. We anticipate that we will spend an estimated $650 million between 2014 and 2019 for capital expenditures necessary to comply with these standards, which includes estimated capital expenditures of approximately $400 million in 2018-2019.
Trademarks, Patents and Licenses
Our Marathon trademark is material to the conduct of our refining and marketing operations, and our Speedway trademark is material to the conduct of our retail marketing operations. We currently hold a number of U.S. and foreign patents and have various pending patent applications. Although in the aggregate our patents and licenses are important to us, we do not regard any single patent or license or group of related patents or licenses as critical or essential to our business as a whole. In general, we depend on our technological capabilities and the application of know-how rather than patents and licenses in the conduct of our operations.
Employees
We had approximately 43,800 regular full-time and part-time employees as of December 31, 2017, which includes approximately 32,150 employees of Speedway.
Certain hourly employees at our Canton, Catlettsburg and Galveston Bay refineries are represented by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers Union under labor agreements that are due to expire in 2019. The International Brotherhood of Teamsters represents certain hourly employees at our Detroit refinery under a labor agreement that is also scheduled to expire in 2019. In addition, they represent certain hourly employees at Speedway under agreements that cover certain retail locations in New York and New Jersey that expire on March 14, 2019 and June 30, 2019, respectively. In addition, certain hourly employees at our Cincinnati biofuel production facility are represented by the Employees Representation Association under a labor agreement that is due to expire in 2021.

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Executive and Corporate Officers of the Registrant
The executive and corporate officers of MPC are as follows:
Name
 
Age as of
February 1, 2018
 
Position with MPC
Gary R. Heminger
 
64
 
Chairman and Chief Executive Officer
Molly R. Benson(a)
 
51
 
Vice President, Corporate Secretary and Chief Compliance Officer
Raymond L. Brooks
 
57
 
Senior Vice President, Refining
Suzanne Gagle
 
52
 
Vice President and General Counsel
Timothy T. Griffith
 
48
 
Senior Vice President and Chief Financial Officer
Thomas Kaczynski
 
56
 
Vice President, Finance and Treasurer
Thomas M. Kelley
 
58
 
Senior Vice President, Marketing
Anthony R. Kenney
 
64
 
President, Speedway LLC
D. Rick Linhardt(a)
 
59
 
Vice President, Tax
C. Michael Palmer
 
64
 
Senior Vice President, Supply, Distribution and Planning
Brian K. Partee(a)
 
44
 
Vice President, Business Development
John J. Quaid
 
46
 
Vice President and Controller
David R. Sauber
 
54
 
Senior Vice President, Human Resources, Health and Administrative Services
Donald C. Templin
 
54
 
President
Donald W. Wehrly(a)
 
58
 
Vice President and Chief Information Officer
David L. Whikehart(a)
 
58
 
Vice President, Environment, Safety and Corporate Affairs
(a) 
Corporate officer.
Mr. Heminger is chairman of the board and chief executive officer. He has served as the chairman of the board since April 2016 and as chief executive officer since 2011. Mr. Heminger also served as president from 2011 until 2017, and as president of Marathon Petroleum Company LP (formerly known as Marathon Ashland Petroleum LLC and Marathon Petroleum Company LLC), currently a wholly owned subsidiary of MPC and prior to the Spinoff, a wholly owned subsidiary of Marathon Oil. He assumed responsibility as president of Marathon Petroleum Company LP in September 2001.
Ms. Benson was appointed vice president, corporate secretary and chief compliance officer effective March 1, 2016. Prior to this appointment, Ms. Benson was assistant general counsel, corporate and finance beginning in April 2012, group counsel, corporate and finance beginning in 2011, group counsel, North American production for Marathon Oil Company beginning in 2010 and senior attorney, downstream business beginning in 2006.
Mr. Brooks was appointed senior vice president, Refining effective March 1, 2016. Prior to this appointment, Mr. Brooks was general manager, Galveston Bay refinery beginning in February 2013, general manager, Robinson refinery beginning in 2010 and general manager, St. Paul Park, Minnesota refinery (no longer owned by MPC) beginning in 2006.
Ms. Gagle was appointed vice president and general counsel effective March 1, 2016. Prior to this appointment, Ms. Gagle was assistant general counsel, litigation and Human Resources beginning in April 2011, senior group counsel, downstream operations beginning in 2010 and group counsel, litigation, beginning in 2003.
Mr. Griffith was appointed senior vice president and chief financial officer effective March 3, 2015. Prior to this appointment, Mr. Griffith served as vice president, Finance and Investor Relations, and treasurer beginning in January 2014. He was vice president of Finance and treasurer beginning in August 2011. Previously, Mr. Griffith was vice president Investor Relations and treasurer of Smurfit-Stone Container Corporation, a packaging manufacturer, in St. Louis, Missouri, from 2008 to 2011.
Mr. Kaczynski was appointed vice president, Finance and treasurer effective August 31, 2015. Prior to this appointment, Mr. Kaczynski was vice president and treasurer of Goodyear Tire and Rubber Company, one of the world’s largest tire manufacturers, beginning in 2014. Previously, he served as vice president, Investor Relations, of Goodyear Tire and Rubber Company beginning in 2013, vice president and corporate treasurer of Affinia Group Inc. beginning in 2005, and director of affiliate finance and of capital markets and bank relations of Visteon Corporation beginning in 2000.
Mr. Kelley was appointed senior vice president, Marketing effective June 30, 2011. Prior to this appointment, Mr. Kelley served in the same capacity for Marathon Petroleum Company LP beginning in January 2010. Previously, he served as director

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of Crude Supply and Logistics for Marathon Petroleum Company LP beginning in January 2008, and as a Brand Marketing manager for eight years prior to that.
Mr. Kenney has served as president of Speedway LLC since August 2005. Prior to this appointment, Mr. Kenney served as vice president, Business Development of Marathon Ashland Petroleum LLC beginning in 2001.
Mr. Linhardt was appointed vice president, Tax effective February 1, 2018. Prior to this appointment, Mr. Linhardt served as director of Tax beginning in June 2017 and manager of Tax Compliance beginning in May 2013. Previously, he served as head of tax at RRI Energy, Inc., an energy service provider, beginning in 2009.
Mr. Palmer was appointed senior vice president, Supply, Distribution and Planning effective June 30, 2011. Prior to this appointment, Mr. Palmer served as vice president, Crude, Supply and Logistics for Marathon Petroleum Company LP beginning in June 2010. He served as director of Crude, Supply and Logistics beginning in February 2010, and as senior vice president, Oil Sands Operations and Commercial Activities for Marathon Oil Canada Corporation beginning in 2007.
Mr. Partee was appointed vice president, Business Development effective February 1, 2018. Prior to this appointment, Mr. Partee was director of Business Development beginning in January 2017. Previously, he was manager of crude oil logistics beginning in September 2014, vice president, Business Development and Franchise at Speedway beginning in November 2012 and commercial director for Speedway beginning in December 2009.
Mr. Quaid was appointed vice president and controller effective June 23, 2014. Prior to this appointment, Mr. Quaid was vice president of Iron Ore at United States Steel Corporation (“U. S. Steel”), an integrated steel producer, beginning in January 2014. Previously, Mr. Quaid served in various leadership positions at U. S. Steel since February 2002, including vice president and treasurer beginning in August 2011, controller, North American Flat-Rolled Operations beginning in July 2010 and assistant corporate controller beginning in 2008.
Mr. Sauber was appointed senior vice president, Human Resources, Health and Administrative services effective January 1, 2018. Prior to this appointment, Mr. Sauber served as vice president, Human Resources and Labor Relations beginning February 1, 2017. Previously he was vice president, Human Resources Policy, Benefits and Services of Shell Oil Company, a global energy and petrochemical company, beginning in 2013 and served in various leadership positions at Shell Oil Company since 2000 including regional Human Resources manager for U.S. manufacturing in 2009.
Mr. Templin was appointed president effective July 1, 2017. Prior to this appointment, Mr. Templin served as executive vice president beginning January 1, 2016, executive vice president, Supply, Transportation and Marketing beginning March 3, 2015 and senior vice president and chief financial officer beginning on June 30, 2011. Previously, he was a partner at PricewaterhouseCoopers LLP, an audit, tax and advisory services provider, with various audit and management responsibilities beginning in 1996.
Mr. Wehrly was appointed vice president and chief information officer effective June 30, 2011. Prior to this appointment, Mr. Wehrly was the manager of Information Technology Services for Marathon Petroleum Company LP beginning in 2003.
Mr. Whikehart was appointed vice president, Environment, Safety and Corporate Affairs effective February 29, 2016. Prior to this appointment, Mr. Whikehart served as vice president, Corporate Planning, Government & Public Affairs effective January 1, 2016 and director, Product Supply and Optimization beginning in March 2011. Previously, Mr. Whikehart served as director, Climate Change and Carbon Management beginning in 2010 and director, Business Development beginning in 2008.
Available Information
General information about MPC, including Corporate Governance Principles and Charters for the Audit Committee, Compensation Committee and Corporate Governance and Nominating Committee, can be found at
http://ir.marathonpetroleum.com. In addition, our Code of Business Conduct and Code of Ethics for Senior Financial Officers are also available in this same location.
MPC uses its website, www.marathonpetroleum.com, as a channel for routine distribution of important information, including news releases, analyst presentations, financial information and market data. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as any amendments and exhibits to those reports, are available free of charge through our website as soon as reasonably practicable after the reports are filed or furnished with the SEC. These documents are also available in hard copy, free of charge, by contacting our Investor Relations office. In addition, our website allows investors and other interested persons to sign up to automatically receive email alerts when we post news releases and financial information on our website. Information contained on our website is not incorporated into this Annual Report on Form 10-K or other securities filings.

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Item 1A. Risk Factors
You should carefully consider each of the following risks and all of the other information contained in this Annual Report on Form 10-K in evaluating us and our common stock. Some of these risks relate principally to our business and the industry in which we operate, while others relate to the ownership of our common stock.
Our business, financial condition, results of operations or cash flows could be materially and adversely affected by any of these risks, and, as a result, the trading price of our common stock could decline.
Risks Relating to our Business
A substantial or extended decline in refining and marketing margins would reduce our operating results and cash flows and could materially and adversely impact our future rate of growth, the carrying value of our assets and our ability to execute share repurchases and continue the payment of our base dividend.
Our operating results, cash flows, future rate of growth, the carrying value of our assets and our ability to execute share repurchases and continue the payment of our base dividend are highly dependent on the margins we realize on our refined products. The measure of the difference between market prices for refined products and crude oil, or crack spread, is commonly used by the industry as a proxy for refining and marketing margins. Historically, refining and marketing margins have been volatile, and we believe they will continue to be volatile. Our margins from the sale of gasoline and other refined products are influenced by a number of conditions, including the price of crude oil. We do not produce crude oil and must purchase all of the crude oil we refine. The price of crude oil and the price at which we can sell our refined products may fluctuate independently due to a variety of regional and global market conditions. Any overall change in crack spreads will impact our refining and marketing margins. Many of the factors influencing a change in crack spreads and refining and marketing margins are beyond our control. These factors include:
worldwide and domestic supplies of and demand for crude oil and refined products;
the cost of crude oil and other feedstocks to be manufactured into refined products;
the prices realized for refined products;
utilization rates of refineries;
natural gas and electricity supply costs incurred by refineries;
the ability of the members of OPEC to agree to and maintain production controls;
political instability or armed conflict in oil and natural gas producing regions;
local weather conditions;
seasonality of demand in our marketing area due to increased highway traffic in the spring and summer months;
natural disasters such as hurricanes and tornadoes;
the price and availability of alternative and competing forms of energy;
domestic and foreign governmental regulations and taxes; and
local, regional, national and worldwide economic conditions.
Some of these factors can vary by region and may change quickly, adding to market volatility, while others may have longer-term effects. The longer-term effects of these and other factors on refining and marketing margins are uncertain. We purchase our crude oil and other refinery feedstocks weeks before we refine them and sell the refined products. Price level changes during the period between purchasing feedstocks and selling the refined products from these feedstocks could have a significant effect on our financial results. We also purchase refined products manufactured by others for resale to our customers. Price changes during the periods between purchasing and reselling those refined products also could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Lower refining and marketing margins may reduce the amount of refined products we produce, which may reduce our revenues, income from operations and cash flows. Significant reductions in refining and marketing margins could require us to reduce our capital expenditures, impair the carrying value of our assets (such as property, plant and equipment, inventory or goodwill), decrease or eliminate our share repurchase activity and our base dividend.

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Our operations are subject to business interruptions and casualty losses. Failure to manage risks associated with business interruptions could adversely impact our operations, financial condition, results of operations and cash flows.
Our operations are subject to business interruptions due to scheduled refinery turnarounds, unplanned maintenance or unplanned events such as explosions, fires, refinery or pipeline releases or other incidents, power outages, severe weather, labor disputes, or other natural or man-made disasters, such as acts of terrorism. For example, pipelines provide a nearly-exclusive form of transportation of crude oil to, or refined products from, some of our refineries. In such instances, a prolonged interruption in service of such a pipeline could materially and adversely affect the operations, profitability and cash flows of the impacted refinery.
Explosions, fires, refinery or pipeline releases or other incidents involving our assets or operations could result in serious personal injury or loss of human life, significant damage to property and equipment, environmental pollution, impairment of operations and substantial losses to us. Damages resulting from an incident involving any of our assets or operations may result in our being named as a defendant in one or more lawsuits asserting potentially substantial claims or in our being assessed potentially substantial fines by governmental authorities.
We do not insure against all potential losses, and, therefore, our business, financial condition, results of operations and cash flows could be adversely affected by unexpected liabilities and increased costs.
We maintain insurance coverage in amounts we believe to be prudent against many, but not all, potential liabilities arising from operating hazards. Uninsured liabilities arising from operating hazards, including but not limited to, explosions, fires, refinery or pipeline releases or other incidents involving our assets or operations, could reduce the funds available to us for capital and investment spending and could have a material adverse effect on our business, financial condition, results of operations and cash flows. Historically, we also have maintained insurance coverage for physical damage and resulting business interruption to our major facilities, with significant self-insured retentions. In the future, we may not be able to maintain insurance of the types and amounts we desire at reasonable rates.
We rely on the performance of our information technology systems, the failure of which due to cyber-security threats or other risks could have an adverse effect on our business, financial condition, results of operations and cash flows.
We are heavily dependent on our information technology systems, network infrastructure and maintain cloud applications for the effective operation of our business. We rely on such systems to process, transmit and store electronic information, including financial records and personally identifiable information such as employee, customer, investor and payroll data, and to manage or support a variety of business processes, including our supply chain, pipeline operations, gathering and processing operations, retail sales, credit card payments and authorizations at our Speedway and Marathon branded retail outlets, financial transactions, banking and numerous other processes and transactions. These information systems involve data network and telecommunications, Internet access and website functionality, and various computer hardware equipment and software applications, including those that are critical to the safe operation of our business. Our systems and infrastructure are subject to damage or interruption from a number of potential sources including natural disasters, software viruses or other malware, power failures, cyber-attacks and other events. We also face various other cyber-security threats from criminal hackers, state-sponsored intrusion, industrial espionage and employee malfeasance, including threats to gain unauthorized access to sensitive information or to render data or systems unusable. To protect against such attempts of unauthorized access or attack, we have implemented infrastructure protection technologies and disaster recovery plans and continuously provide employee awareness training around phishing, malware and other cyber-attacks to help ensure we are protected against cyber risks and security breaches. While we have invested significant amounts in the protection of our technology systems and maintain what we believe are adequate security controls over personally identifiable customer, investor and employee data, there can be no guarantee such plans, to the extent they are in place, will be effective. Certain vendors have access to sensitive information, including personally identifiable customer, investor and employee data and a breakdown of their technology systems or infrastructure as a result of a cyber-attack or otherwise could result in unauthorized disclosure of such information. Unauthorized disclosure of sensitive or personally identifiable information, including by cyber-attacks or other security breach, could cause loss of data, give rise to remediation or other expenses, expose us to liability under federal and state laws, reduce our customers’ willingness to do business with us, disrupt the services we provide to customers and subject us to litigation and investigations, which could have an adverse effect on our reputation, business, financial condition, results of operations and cash flows. In addition, our applicable insurance may not compensate us adequately for losses that may occur. State and federal cyber-security legislation could also impose new requirements, which could increase our cost of doing business.
The retail market is diverse and highly competitive, and very aggressive competition could adversely impact our business.
We face strong competition in the market for the sale of retail gasoline, diesel fuel and merchandise. Our competitors include outlets owned or operated by fully integrated major oil companies or their dealers or jobbers, and other well-recognized national or regional retail outlets, often selling gasoline or merchandise at very competitive prices. Several non-traditional

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retailers such as supermarkets, club stores and mass merchants are in the retail business. These non-traditional gasoline retailers have obtained a significant share of the transportation fuels market and we expect their market share to grow. Because of their diversity, integration of operations, experienced management and greater financial resources, these companies may be better able to withstand volatile market conditions or levels of low or no profitability in the retail segment of the market. In addition, these retailers may use promotional pricing or discounts, both at the pump and in the store, to encourage in-store merchandise sales. These activities by our competitors could pressure us to offer similar discounts, adversely affecting our profit margins. Additionally, the loss of market share by our convenience stores to these and other retailers relating to either gasoline or merchandise could have a material adverse effect on our business, financial condition, results of operations and cash flows.
The development, availability and marketing of alternative and competing fuels in the retail market could adversely impact our business. We compete with other industries that provide alternative means to satisfy the energy and fuel needs of our consumers. Increased competition from these alternatives as a result of governmental regulations, technological advances and consumer demand could have an impact on pricing and demand for our products and our profitability.
We are subject to interruptions of supply and increased costs as a result of our reliance on third-party transportation of crude oil and refined products.
We utilize the services of third parties to transport crude oil and refined products to and from our refineries. In addition to our own operational risks discussed above, we could experience interruptions of supply or increases in costs to deliver refined products to market if the ability of the pipelines, railways or vessels to transport crude oil or refined products is disrupted because of weather events, accidents, governmental regulations or third-party actions. A prolonged disruption of the ability of the pipelines, railways or vessels to transport crude oil or refined products to or from one or more of our refineries could have a material adverse effect on our business, financial condition, results of operations and cash flows.
We may incur losses to our business as a result of our forward-contract activities and derivative transactions.
We currently use commodity derivative instruments, and we expect to enter into these types of transactions in the future. A failure of a futures commission merchant or counterparty to perform would affect these transactions. To the extent the instruments we utilize to manage these exposures are not effective, we may incur losses related to the ineffective portion of the derivative transaction or costs related to moving the derivative positions to another futures commission merchant or counterparty once a failure has occurred.
We have significant debt obligations; therefore, our business, financial condition, results of operations and cash flows could be harmed by a deterioration of our credit profile, a decrease in debt capacity or unsecured commercial credit available to us, or by factors adversely affecting credit markets generally.
At December 31, 2017, our total debt obligations for borrowed money and capital lease obligations were $13.4 billion, including $7.4 billion of obligations of MPLX. We may incur substantial additional debt obligations in the future.
Our indebtedness may impose various restrictions and covenants on us that could have material adverse consequences, including:
increasing our vulnerability to changing economic, regulatory and industry conditions;
limiting our ability to compete and our flexibility in planning for, or reacting to, changes in our business and the industry;
limiting our ability to pay dividends to our stockholders;
limiting our ability to borrow additional funds; and
requiring us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for working capital, capital expenditures, acquisitions, share repurchases, dividends and other purposes.
A decrease in our debt or commercial credit capacity, including unsecured credit extended by third-party suppliers, or a deterioration in our credit profile could increase our costs of borrowing money and/or limit our access to the capital markets and commercial credit, which could materially and adversely affect our business, financial condition, results of operations and cash flows.
We have a trade receivables securitization facility that provides liquidity of up to $750 million depending on the amount of eligible domestic trade accounts receivables. In periods of lower prices, we may not have sufficient eligible accounts receivables to support full availability of this facility.

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Historic or current operations could subject us to significant legal liability or restrict our ability to operate.
We currently are defending litigation and anticipate we will be required to defend new litigation in the future. Our operations, including those of MPLX, and those of our predecessors could expose us to litigation and civil claims by private plaintiffs for alleged damages related to contamination of the environment or personal injuries caused by releases of hazardous substances from our facilities, products liability, consumer credit or privacy laws, product pricing or antitrust laws or any other laws or regulations that apply to our operations. While an adverse outcome in most litigation matters would not be expected to be material to us, in class-action litigation, large classes of plaintiffs may allege damages relating to extended periods of time or other alleged facts and circumstances that could increase the amount of potential damages. Attorneys general and other government officials may pursue litigation in which they seek to recover civil damages from companies on behalf of a state or its citizens for a variety of claims, including violation of consumer protection and product pricing laws or natural resources damages. We are defending litigation of that type and anticipate that we will be required to defend new litigation of that type in the future. If we are not able to successfully defend such litigation, it may result in liability to our company that could materially and adversely affect our business, financial condition, results of operations and cash flows. We do not have insurance covering all of these potential liabilities. In addition to substantial liability, plaintiffs in litigation may also seek injunctive relief which, if imposed, could have a material adverse effect on our future business, financial condition, results of operations and cash flows.
A portion of our workforce is unionized, and we may face labor disruptions that could materially and adversely affect our business, financial condition, results of operations and cash flows.
Approximately 37 percent of our refining employees are covered by collective bargaining agreements. Certain hourly employees at our Canton, Catlettsburg, Galveston Bay and Texas City refineries are represented by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers Union under labor agreements that are due to expire in 2019. The International Brotherhood of Teamsters represents certain hourly employees at our Detroit refinery under a labor agreement that is also scheduled to expire in 2019. In addition, they represent certain hourly employees at Speedway under agreements that cover certain retail locations in New York and New Jersey that expire on March 14, 2019 and June 30, 2019, respectively. These contracts may be renewed at an increased cost to us. In addition, we have experienced, or may experience, work stoppages as a result of labor disagreements. Any prolonged work stoppages disrupting operations could have a material adverse effect on our business, financial condition, results of operations and cash flows.
One of our subsidiaries acts as the general partner of a publicly traded master limited partnership, MPLX, which may involve a greater exposure to certain legal liabilities than existed under our historic business operations.
One of our subsidiaries acts as the general partner of MPLX, a publicly traded master limited partnership. Our control of the general partner of MPLX may increase the possibility of claims of breach of fiduciary duties including claims of conflicts of interest related to MPLX. Any liability resulting from such claims could have a material adverse effect on our future business, financial condition, results of operations and cash flows.
If foreign investment in us or MPLX exceeds certain levels, MPLX could be prohibited from operating inland river vessels, which could materially and adversely affect our business, financial condition, results of operations and cash flows.
The Shipping Act of 1916 and Merchant Marine Act of 1920, which we refer to collectively as the Maritime Laws, generally require that vessels engaged in U.S. coastwise trade be owned by U.S. citizens. Among other requirements to establish citizenship, entities that own such vessels must be owned at least 75 percent by U.S. citizens. If we fail to maintain compliance with the Maritime Laws, MPLX would be prohibited from operating vessels in the U.S. inland waters. Such a prohibition could materially and adversely affect our business, financial condition, results of operations and cash flows.
We are subject to certain continuing contingent liabilities of Marathon Oil relating to taxes and other matters and to potential liabilities pursuant to the tax sharing agreement and separation and distribution agreement we entered into with Marathon Oil that could materially and adversely affect our business, financial condition, results of operations and cash flows.
Although the Spinoff occurred in mid-2011, certain liabilities of Marathon Oil could become our obligations. For example, under the Internal Revenue Code of 1986 (the “Code”) and related rules and regulations, each corporation that was a member of the Marathon Oil consolidated tax reporting group during any taxable period or portion of any taxable period ending on or before the effective time of the Spinoff is jointly and severally liable for the federal income tax liability of the entire Marathon Oil consolidated tax reporting group for that taxable period. In connection with the Spinoff, we entered into a tax sharing agreement with Marathon Oil that allocates the responsibility for prior period taxes of the Marathon Oil consolidated tax reporting group between us and Marathon Oil. However, if Marathon Oil is unable to pay any prior period taxes for which it is

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responsible, we could be required to pay the entire amount of such taxes. Other provisions of federal law establish similar liability for other matters, including laws governing tax-qualified pension plans as well as other contingent liabilities.
Also pursuant to the tax sharing agreement, following the Spinoff we are responsible generally for all taxes attributable to us or any of our subsidiaries, whether accruing before, on or after the Spinoff. We also agreed to be responsible for, and indemnify Marathon Oil with respect to, all taxes arising as a result of the Spinoff (or certain internal restructuring transactions) failing to qualify as transactions under Sections 368(a) and 355 of the Code for U.S. federal income tax purposes to the extent such tax liability arises as a result of any breach of any representation, warranty, covenant or other obligation by us or certain affiliates made in connection with the issuance of the private letter ruling relating to the Spinoff or in the tax sharing agreement. In addition, we agreed to indemnify Marathon Oil for specified tax-related liabilities associated with our 2005 acquisition of the minority interest in our refining joint venture from Ashland Inc. Our indemnification obligations to Marathon Oil and its subsidiaries, officers and directors are not limited or subject to any cap. If we are required to indemnify Marathon Oil and its subsidiaries and their respective officers and directors under the tax sharing agreement, we may be subject to substantial liabilities. At this time, we cannot precisely quantify the amount of these liabilities that have been assumed pursuant to the tax sharing agreement, and there can be no assurances as to their final amounts.
Also, in connection with the Spinoff, we entered into a separation and distribution agreement with Marathon Oil that provides for, among other things, the principal corporate transactions that were required to effect the Spinoff, certain conditions to the Spinoff and provisions governing the relationship between our company and Marathon Oil with respect to and resulting from the Spinoff. Among other things, the separation and distribution agreement provides for indemnification obligations designed to make us financially responsible for substantially all liabilities that may exist relating to our downstream business activities, whether incurred prior to or after the Spinoff, as well as certain obligations of Marathon Oil assumed by us. Our obligations to indemnify Marathon Oil under the circumstances set forth in the separation and distribution agreement could subject us to substantial liabilities. Marathon Oil also agreed to indemnify us for certain liabilities. However, third parties could seek to hold us responsible for any of the liabilities retained by Marathon Oil, and there can be no assurance that the indemnity from Marathon Oil will be sufficient to protect us against the full amount of such liabilities, that Marathon Oil will be able to fully satisfy its indemnification obligations or that Marathon Oil’s insurers will cover us for liabilities associated with occurrences prior to the Spinoff. Moreover, even if we ultimately succeed in recovering from Marathon Oil or its insurers any amounts for which we are held liable, we may be temporarily required to bear these losses ourselves. The tax liabilities and underlying liabilities in the event Marathon Oil is unable to satisfy its indemnification obligations described in this paragraph could have a material adverse effect on our business, financial condition, results of operation and cash flows.
Significant acquisitions in the future will involve the integration of new assets or businesses and present substantial risks that could adversely affect our business, financial conditions, results of operations and cash flows.
Significant future transactions involving the addition of new assets or businesses will present potential risks, which may include, among others:
Inaccurate assumptions about future synergies, revenues, capital expenditures and operating costs;
An inability to successfully integrate assets or businesses we acquire;
A decrease in our liquidity resulting from using a portion of our available cash or borrowing capacity under our revolving credit agreement to finance transactions;
A significant increase in our interest expense or financial leverage if we incur additional debt to finance transactions;
The assumption of unknown environmental and other liabilities, losses or costs for which we are not indemnified or for which our indemnity is inadequate;
The diversion of management’s attention from other business concerns; and
The incurrence of other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring charges.
A significant decrease or delay in oil and natural gas production in MPLX’s areas of operation, whether due to sustained declines in oil, natural gas and NGL prices, natural declines in well production, or otherwise, may adversely affect MPLX’s business, results of operations and financial condition, and could reduce MPLX’s ability to make distributions to us.
A significant portion of MPLX’s operations are dependent upon production from oil and natural gas reserves and wells owned by its producer customers, which will naturally decline over time, which means that MPLX’s cash flows associated with these wells will also decline over time. To maintain or increase throughput levels and the utilization rate of MPLX’s facilities, MPLX must continually obtain new oil, natural gas and NGL supplies, which depends in part on the level of successful drilling activity near its facilities.

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We have no control over the level of drilling activity in the areas of MPLX’s operations, the amount of reserves associated with the wells or the rate at which production from a well will decline. In addition, we have no control over producers or their production decisions, which are affected by, among other things, prevailing and projected energy prices, drilling costs per Mcf or barrel, demand for hydrocarbons, operational challenges, access to downstream markets, the level of reserves, geological considerations, governmental regulations and the availability and cost of capital. Because of these factors, even if new oil or natural gas reserves are discovered in areas served by MPLX assets, producers may choose not to develop those reserves. If MPLX is not able to obtain new supplies of oil, natural gas or NGLs to replace the natural decline in volumes from existing wells, throughput on MPLX pipelines and the utilization rates of MPLX facilities would decline, which could have a material adverse effect on MPLX’s business, results of operations and financial condition and could reduce MPLX’s ability to make distributions to us.
Decreases in energy prices can decrease drilling activity, production rates and investments by third parties in the development of new oil and natural gas reserves. The prices for oil, natural gas and NGLs depend upon factors beyond our control, including global and local demand, production levels, changes in interstate pipeline gas quality specifications, imports and exports, seasonality and weather conditions, economic and political conditions domestically and internationally and governmental regulations. Sustained periods of low prices could result in producers also significantly curtailing or limiting their oil and gas drilling operations which could substantially delay the production and delivery of volumes of oil, natural gas and NGLs to MPLX’s facilities and adversely affect MPLX’s revenues and cash available for distribution to us. This impact may also be exacerbated due to the extent of MPLX’s commodity-based contracts, which are more directly impacted by changes in natural gas and NGL prices than its fee-based contracts due to frac spread exposure and may result in operating losses when natural gas becomes more expensive on a Btu equivalent basis than NGL products. In addition, MPLX’s purchase and resale of natural gas and NGLs in the ordinary course exposes MPLX to significant risk of volatility in natural gas or NGL prices due to the potential difference in the time of the purchases and sales and the potential difference in the price associated with each transaction, and direct exposure may also occur naturally as a result of MPLX’s production processes. Also, the significant volatility in natural gas, NGL and oil prices could adversely impact MPLX’s unit price, thereby increasing its distribution yield and cost of capital. Such impacts could adversely impact MPLX’s ability to execute its long‑term organic growth projects, satisfy obligations to its customers and make distributions to unitholders at intended levels, and may also result in non-cash impairments of long-lived assets or goodwill or other-than-temporary non-cash impairments of our equity method investments.
Our recently completed strategic actions designed to enhance shareholder value may not deliver the anticipated benefits.
In January 2017, we announced strategic actions designed to enhance shareholder value, including the significant acceleration of dropdowns of midstream assets into MPLX and the exchange of our economic interests in the general partner, including incentive distribution rights, for newly issued MPLX common units in conjunction with the completion of such dropdowns. On March 1, 2017, we contributed certain terminal, pipeline and storage assets to MPLX and on September 1, 2017 we contributed our joint-interest ownership in certain pipelines and storage facilities to MPLX. On February 1, 2018, we completed the dropdown of our refining logistics assets and fuels distribution services to MPLX and the exchange of our economic interests in the general partner, including incentive distribution rights, for 275 million newly issued MPLX common units. We may not be able to achieve the anticipated benefits of these actions and the market price of our common stock could decline if securities or industry analysts or our investors disagree with these strategic actions or the way we implement such actions. Accordingly, there is no assurance that these actions will be reflected in the market price of our stock to the extent currently anticipated by management.
Significant stockholders may attempt to effect changes at our company or acquire control over our company, which could impact the pursuit of business strategies and adversely affect our results of operations and financial condition.
Our stockholders may from time to time engage in proxy solicitations, advance stockholder proposals or otherwise attempt to effect changes or acquire control over our company. Campaigns by stockholders to effect changes at publicly traded companies are sometimes led by investors seeking to increase short-term stockholder value through actions such as financial restructuring, increased debt, special dividends, stock repurchases or sales of assets or the entire company. Responding to proxy contests and other actions by activist stockholders can be costly and time-consuming and could divert the attention of our board of directors and senior management from the management of our operations and the pursuit of our business strategies. As a result, stockholder campaigns could adversely affect our results of operations and financial condition.


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Risks Relating to Our Industry
Changes in environmental or other laws or regulations may reduce our refining and marketing margin and may result in substantial capital expenditures and operating costs that could materially and adversely affect our business, financial condition, results of operations and cash flows.
Various laws and regulations are expected to impose increasingly stringent and costly requirements on our operations, which may reduce our refining and marketing margin. Laws and regulations expected to become more stringent relate to the following:
the emission or discharge of materials into the environment,
solid and hazardous waste management,
pollution prevention,
greenhouse gas emissions,
climate change,
characteristics and composition of gasoline and diesel fuels,
public and employee safety and health, and
facility security.
The specific impact of laws and regulations on us and our competitors may vary depending on a number of factors, including the age and location of operating facilities, marketing areas, crude oil and feedstock sources and production processes. We may be required to make expenditures to modify operations, install pollution control equipment, perform site cleanups or curtail operations that could materially and adversely affect our business, financial condition, results of operations and cash flows.
Because the issue of climate change continues to receive scientific and political attention, there is the potential for further legislation or regulation that could result in increased operating costs and reduced consumer demand for the traditional transportation fuels we produce, transport, store and sell. Greenhouse gas emissions regulations could be implemented, such as methods to further reduce methane emissions from our midstream assets, a carbon tax or similar effort that increases the cost of our products, thereby reducing demand. Regardless of whether climate change legislation or regulation is enacted, given the continuing global demand for oil and gas - even under various hypothetical carbon-constrained scenarios - we believe we effectively budget for prospective costs of climate regulations in our business and strategic planning and our approval of capital project allocations. Our mature governance and risk-management processes enable us to effectively monitor and adjust to physical climate-related risks. At this time, however, we cannot predict the extent to which any such legislation or regulation will be enacted and, if enacted, what its impacts upon our operations would be.
We could also face increased climate-related litigation with respect to our operations or products. Private party litigation is pending against MPC and other oil and gas companies in California state court. Although uncertain, these types of actions could increase our costs of operations or reduce the demand for the refined products we produce, transport, store and sell.
In October 2015, the EPA reduced the primary (health) ozone NAAQS to 70 ppb from the prior ozone level of 75 ppb. On November 6, 2017, the EPA finalized ozone attainment/unclassifiable designations under the new standard. The EPA has not yet designated any counties as nonattainment under the lower primary ozone standard, but such nonattainment designations could result in increased costs associated with, or result in cancellation or delay of, capital projects at our facilities. States will also be required to adopt SIPs for nonattainment areas. These SIPs may include NOx and/or VOC reductions that could result in increased costs to our facilities. We cannot predict the various SIP requirements at this time.
The EISA established increases in fuel mileage standards. The Department of Transportation’s National Highway Safety Administration and the EPA work in conjunction to establish CAFE standards and greenhouse gas emission standards for light-duty vehicles that become more stringent over time. In addition, pursuant to a waiver granted by the EPA, California and other states have enacted laws that require vehicle emission reductions. Increases in fuel mileage standards and requirements for zero emission vehicles may reduce demand for refined product.
The EISA also expanded the Renewable Fuel Standard (“RFS”) program administered by the EPA. Governmental regulations encouraging the use of new or alternative fuels could pose a competitive threat to our operations. The EISA required the total volume of renewable transportation fuels sold or introduced annually in the U.S. to reach 36.0 billion gallons by 2022. The RFS presents production and logistics challenges for both the renewable fuels and petroleum refining industries, and may continue to require additional capital expenditures or expenses by us to accommodate increased renewable fuels use. Gasoline consumption has been lower than forecasted by the EPA, which has led to concerns that the renewable fuel volumes may not be met. The 2018 renewable fuel standards were finalized and published on December 12, 2017. The final standards are lower than the statutory requirements but nevertheless result in volumes that breach the ethanol “blendwall.” The advanced biofuels

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program, a subset of the RFS requirements, creates uncertainties and presents challenges of supply, and may require that we and other refiners and other obligated parties purchase credits from the EPA to meet our obligations.
Tax incentives and other subsidies have also made renewable fuels more competitive with refined products than they otherwise would have been, which may further reduce refined product margins. The tax incentives and subsidies are causing uncertainties because they have expired and been reinstituted retroactively. The biodiesel credit, for example, expired at the end of 2016 and there is uncertainty if it will be reinstituted.
On March 3, 2014, the EPA signed the final Tier 3 fuel standards. The final Tier 3 fuel standards require, among other things, a lower annual average sulfur level in gasoline to no more than 10 parts ppm beginning in calendar year 2017. In addition, gasoline refiners and importers may not exceed a maximum per-gallon sulfur standard of 80 ppm, while retailers may not exceed a maximum per-gallon sulfur standard of 95 ppm. We anticipate that we will spend an estimated $650 million between 2014 and 2019 for capital expenditures necessary to comply with these standards, which includes estimated capital expenditures of approximately $400 million in 2018-2019.
Federal, state and local legislation and regulatory initiatives relating to hydraulic fracturing could delay or impede producer’s gas production or result in reduced volumes available for our midstream assets to gather, process and fractionate. While we do not conduct hydraulic fracturing operations, we do provide gathering, processing and fractionation services with respect to natural gas and natural gas liquids produced by our customers as a result of such operations. If federal, state or local laws or regulations that significantly restrict hydraulic fracturing are adopted, such legal requirements could make it more difficult to complete natural gas wells in shale formations and increase producers’ costs of compliance.
Severe weather events may adversely affect our facilities and ongoing operations.
We have mature systems in place to manage potential acute physical risks, such as floods and hurricane-force winds, and potential chronic physical risks, such as higher ocean levels. If any such events were to occur, they could have an adverse effect on our assets and operations. Specifically, where appropriate, we are hardening and modernizing assets against flood and wind damage and ensuring we have resiliency measures in place, such as storm-specific readiness plans. We have incurred and will continue to incur additional costs to protect our assets and operations from such physical risks and employ the evolving technologies and processes available to mitigate such risks. To the extent such severe weather events increase in frequency and severity, we may be required to modify operations and incur costs that could materially and adversely affect our business, financial condition, results of operations and cash flows.
Plans we may have to expand existing assets or construct new assets are subject to risks associated with societal and political pressures and other forms of opposition to the future development, transportation and use of carbon-based fuels. Such risks could adversely impact our business and ability to realize certain growth strategies.
Our anticipated growth and planned expenditures are based upon the assumption that societal sentiment will continue to enable and existing regulations will remain intact to allow for the future development, transportation and use of carbon-based fuels. A portion of our growth strategy is dependent on our ability to expand existing assets and to construct additional assets. However, policy decisions relating to the production, refining, transportation and marketing of carbon-based fuels are subject to political pressures and the influence and protests of environmental and other special interest groups. One of the ways we may grow our business is through the construction of new pipelines or the expansion of existing ones. The construction of a new pipeline or the expansion of an existing pipeline, by adding horsepower or pump stations or by adding a second pipeline along an existing pipeline, involves numerous regulatory, environmental, political, and legal uncertainties, most of which are beyond our control. The approval process for storage and transportation projects has become increasingly challenging, due in part to state and local concerns related to pipelines and negative public perception regarding the oil and gas industry. These projects may not be completed on schedule (or at all) or at the budgeted cost. In addition, our revenues may not increase immediately upon the expenditure of funds on a particular project. For instance, if we build a new pipeline, the construction will occur over an extended period of time and we will not receive any material increases in revenues until after completion of the project. Delays or cost increases related to capital spending programs involving engineering, procurement and construction of facilities (including improvements and repairs to our existing facilities) could adversely affect our ability to achieve forecasted internal rates of return and operating results, thereby limiting our ability to grow and generate cash flows.
Large capital projects can take many years to complete, and market conditions could deteriorate significantly between the project approval date and the project startup date, negatively impacting project returns. If we are unable to complete capital projects at their expected costs and in a timely manner, or if the market conditions assumed in our project economics deteriorate, our business, financial condition, results of operations and cash flows could be materially and adversely affected.
Delays or cost increases related to capital spending programs involving engineering, procurement and construction of facilities could materially adversely affect our ability to achieve forecasted internal rates of return and operating results. Delays in making

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required changes or upgrades to our facilities could subject us to fines or penalties as well as affect our ability to supply certain products we produce. Such delays or cost increases may arise as a result of unpredictable factors, many of which are beyond our control, including:
denial of or delay in receiving requisite regulatory approvals and/or permits;
unplanned increases in the cost of construction materials or labor;
disruptions in transportation of components or construction materials;
adverse weather conditions, natural disasters or other events (such as equipment malfunctions, explosions, fires or spills) affecting our facilities, or those of vendors or suppliers;
shortages of sufficiently skilled labor, or labor disagreements resulting in unplanned work stoppages;
market-related increases in a project’s debt or equity financing costs; and
nonperformance by, or disputes with, vendors, suppliers, contractors or subcontractors.
Any one or more of these factors could have a significant impact on our ongoing capital projects. If we were unable to make up the delays associated with such factors or to recover the related costs, or if market conditions change, it could materially and adversely affect our business, financial condition, results of operations and cash flows.
The availability of crude oil and increases in crude oil prices may reduce profitability and refining and marketing margins.
The profitability of our operations depends largely on the difference between the cost of crude oil and other feedstocks we refine and the selling prices we obtain for refined products. A portion of our crude oil is purchased from various foreign national oil companies, production companies and trading companies, including suppliers from Canada, the Middle East and various other international locations. The market for crude oil and other feedstocks is largely a world market. We are, therefore, subject to the attendant political, geographic and economic risks of such a market. If one or more major supply sources were temporarily or permanently eliminated, we believe adequate alternative supplies of crude oil would be available, but it is possible we would be unable to find alternative sources of supply. If we are unable to obtain adequate crude oil volumes or are able to obtain such volumes only at unfavorable prices, our operations, sales of refined products and refining and marketing margins could be adversely affected, materially and adversely impacting our business, financial condition, results of operations and cash flows.
Worldwide political and economic developments could materially and adversely impact our business, financial condition, results of operations and cash flows.
In addition to impacting crude oil and other feedstock supplies, political and economic factors in global markets could have a material adverse effect on us in other ways. Hostilities in the Middle East or the occurrence or threat of future terrorist attacks could adversely affect the economies of the U.S. and other developed countries. A lower level of economic activity could result in a decline in energy consumption, which could cause our revenues and margins to decline and limit our future growth prospects. These risks could lead to increased volatility in prices for refined products, NGLs and natural gas. Additionally, these risks could increase instability in the financial and insurance markets and make it more difficult and/or costly for us to access capital and to obtain the insurance coverage that we consider adequate. Additionally, tax policy, legislative or regulatory action and commercial restrictions could reduce our operating profitability. For example, the U.S. government could prevent or restrict exports of refined products, NGLs, natural gas or the conduct of business with certain foreign countries.
Compliance with and changes in tax laws could materially and adversely impact our financial condition, results of operations and cash flows.
We are subject to extensive tax liabilities, including federal and state income taxes and transactional taxes such as excise, sales and use, payroll, franchise, withholding and property taxes. New tax laws and regulations and changes in existing tax laws and regulations could result in increased expenditures by us for tax liabilities in the future and could materially and adversely impact our financial condition, results of operations and cash flows.
Additionally, many tax liabilities are subject to periodic audits by taxing authorities, and such audits could subject us to interest and penalties.
Terrorist attacks aimed at our facilities or that impact our customers or the markets we serve could adversely affect our business.
The U.S. government has issued warnings that energy assets in general, including the nation’s refining, pipeline and terminal infrastructure, may be future targets of terrorist organizations. The threat of terrorist attacks has subjected our operations to increased risks. Any future terrorist attacks on our facilities, those of our customers and, in some cases, those of other pipelines,

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could have a material adverse effect on our business. Similarly, any future terrorist attacks that severely disrupt the markets we serve could materially and adversely affect our results of operations, financial position and cash flows.
Risks Relating to Ownership of Our Common Stock
Provisions in our corporate governance documents could operate to delay or prevent a change in control of our company, dilute the voting power or reduce the value of our capital stock or affect its liquidity.
The existence of some provisions within our restated certificate of incorporation and amended and restated bylaws could discourage, delay or prevent a change in control of us that a stockholder may consider favorable. These include provisions:
providing that our board of directors fixes the number of members of the board;
providing for the division of our board of directors into three classes with staggered terms;
providing that only our board of directors may fill board vacancies;
limiting who may call special meetings of stockholders;
prohibiting stockholder action by written consent, thereby requiring stockholder action to be taken at a meeting of the stockholders;
establishing advance notice requirements for nominations of candidates for election to our board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings;
establishing supermajority vote requirements for certain amendments to our restated certificate of incorporation and stockholder proposals for amendments to our amended and restated bylaws;
providing that our directors may only be removed for cause;
authorizing a large number of shares of common stock that are not yet issued, which would allow our board of directors to issue shares to persons friendly to current management, thereby protecting the continuity of our management, or which could be used to dilute the stock ownership of persons seeking to obtain control of us; and
authorizing the issuance of “blank check” preferred stock, which could be issued by our board of directors to increase the number of outstanding shares and thwart a takeover attempt.
We believe these provisions protect our stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with our board of directors and by providing our board of directors time to assess any acquisition proposal, and are not intended to make us immune from takeovers. However, these provisions apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition.
Our restated certificate of incorporation also authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over our common stock respecting dividends and distributions, as our board of directors generally may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock. For example, we could grant holders of preferred stock the right to elect some number of our board of directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences we could assign to holders of preferred stock could affect the residual value of our common stock.
Finally, to facilitate compliance with the Maritime Laws, our restated certificate of incorporation limits the aggregate percentage ownership by non-U.S. citizens of our common stock or any other class of our capital stock to 23 percent of the outstanding shares. We may prohibit transfers that would cause ownership of our common stock or any other class of our capital stock by non-U.S. citizens to exceed 23 percent. Our restated certificate of incorporation also authorizes us to effect any and all measures necessary or desirable to monitor and limit foreign ownership of our common stock or any other class of our capital stock. These limitations could have an adverse impact on the liquidity of the market for our common stock if holders are unable to transfer shares to non-U.S. citizens due to the limitations on ownership by non-U.S. citizens. Any such limitation on the liquidity of the market for our common stock could adversely impact the market price of our common stock.

Item 1B. Unresolved Staff Comments
None.


32

Table of Contents

Item 2. Properties
See the detail below for the assets we own by segment. In addition, as of December 31, 2017, we were the lessee under a number of cancellable and noncancellable leases for certain properties, including land and building space, office equipment, storage facilities and transportation equipment. See Item 8. Financial Statements and Supplementary Data – Note 24 for additional information regarding our leases.
We believe that our properties and facilities are adequate for our operations and that our facilities are adequately maintained.
Refining and Marketing
The table below sets forth the location and crude oil refining capacity for each of our refineries, which include approximately 670 tanks with total tank storage capacity of approximately 60 million barrels, as of December 31, 2017.
Refinery
 
Crude Oil Refining Capacity (mbpcd)(a)
Galveston Bay, Texas City, Texas
571

Garyville, Louisiana
556

Catlettsburg, Kentucky
277

Robinson, Illinois
245

Detroit, Michigan
139

Canton, Ohio
93

Total
 
1,881

(a) 
Refining throughput can exceed crude oil capacity due to the processing of other charge and blendstocks in addition to crude oil and the timing of planned turnaround and major maintenance activity.
The following table sets forth the approximate number of retail outlets by state where independent entrepreneurs maintain Marathon-branded retail outlets, as of December 31, 2017.
State
 
Number of
Marathon® Retail Outlets
Alabama
268

District of Columbia
2

Florida
629

Georgia
284

Illinois
285

Indiana
647

Kentucky
573

Louisiana
15

Maryland
20

Michigan
814

Minnesota
39

Mississippi
94

New York
6

North Carolina
224

Ohio
862

Pennsylvania
69

South Carolina
110

Tennessee
401

Virginia
119

West Virginia
114

Wisconsin
42

Total
5,617


33

Table of Contents


The following table sets forth details about our Refining & Marketing owned and operated terminals as of December 31, 2017.
Owned and Operated Terminals
 
Number of
Terminals
 
Tank Storage
Capacity
(thousand barrels)
 
Number
of Tanks
 
Number of
Loading
Lanes
Light Products Terminals:
 
 
 
 
 
 
 
Ohio
1

 
495

 
13

 
4

Wisconsin
1

 
351

 
8

 
4

Subtotal light products terminals
2

 
846

 
21

 
8

Asphalt Terminals:
 
 
 
 
 
 
 
Florida
1

 
132

 
3

 
3

Illinois
2

 
82

 
31

 
6

Indiana
2

 
424

 
19

 
6

Kentucky
4

 
549

 
52

 
14

Louisiana
1

 
54

 
8

 
2

Michigan
1

 
12

 
2

 
8

Ohio
4

 
1,491

 
48

 
13

Pennsylvania
1

 
494

 
12

 
8

Tennessee
2

 
483

 
38

 
8

Subtotal asphalt terminals
18

 
3,721

 
213

 
68

Total owned and operated terminals
20

 
4,567

 
234

 
76

The following table sets forth details about our railcars as of December 31, 2017.
 
 
Number of Railcars
 
 
Class of Equipment
 
Owned
 
Leased
 
Total
 
Capacity per Railcar
General service tank cars

 
793

 
793

 
20,000-30,000 gallons
High pressure tank cars

 
921

 
921

 
33,500 gallons
Open-top hoppers
19

 
285

 
304

 
4,000 cubic feet
 
19

 
1,999

 
2,018

 
 

34

Table of Contents

Speedway
The following table sets forth the number of Speedway® convenience stores by state as of December 31, 2017.
State
 
Number of
Convenience Stores(a)
Connecticut
1

Delaware
4

Florida
241

Georgia
4

Illinois
123

Indiana
311

Kentucky
147

Massachusetts
109

Michigan
305

New Hampshire
12

New Jersey
71

New York
235

North Carolina
277

Ohio
489

Pennsylvania
116

Rhode Island
19

South Carolina
52

Tennessee
42

Virginia
62

West Virginia
60

Wisconsin
64

Total
2,744

(a) 
Includes stores with commercial fueling lanes.

35

Table of Contents

Midstream - MPLX
The following tables set forth certain information relating to our crude and products pipeline systems and storage assets as of December 31, 2017.
Pipeline System or Storage Asset
 
Origin
 
Destination
 
Diameter
(inches)
 
Length
(miles)
 
Capacity(a)
 
Associated MPC refinery
Crude oil pipeline systems (mbpd):
 
 
 
 
 
 
 
 
 
 
 
Patoka, IL to Lima, OH crude system
Patoka, IL
 
Lima, OH
 
20”-22”
 
302

 
267

 
Detroit, Canton
Lima, OH to Canton, OH crude system
Lima, OH
 
Canton, OH
 
12"-16"
 
153

 
84

 
Canton
Catlettsburg, KY and Robinson, IL crude system
Patoka, IL
 
Catlettsburg, KY &
Robinson, IL
 
20”-24”
 
484

 
515

 
Catlettsburg, Robinson
Detroit, MI crude system(b)
Samaria &
Romulus, MI
 
Detroit, MI
 
16”
 
61

 
197

 
Detroit
Ozark crude system
Cushing, OK
 
Wood River, IL
 
22"
 
433

 
230

 
All Midwest refineries
Wood River, IL to Patoka, IL crude system(b)
Wood River &
Roxana, IL
 
Patoka, IL
 
12”-22”
 
115

 
314

 
All Midwest refineries
St. James, LA to Garyville, LA crude system
St James, LA
 
Garyville, LA
 
30"
 
20

 
620

 
Garyville, LA
Inactive pipelines
 
 
 
 
 
 
45

 
N/A

 
 
Total
 
 
 
 
 
 
1,613

 
2,227

 
 
Products pipeline systems (mbpd):
 
 
 
 
 
 
 
 
 
 
 
Cornerstone products system
Cornerstone
 
Canton, OH
 
8"-16"
 
58

 
238

 
Canton
Garyville, LA products system
Garyville, LA
 
Zachary, LA
 
20”-36”
 
72

 
389

 
Garyville
Texas City, TX products system
Texas City, TX
 
Pasadena, TX
 
16”-36”
 
43

 
215

 
Galveston Bay
ORPL products system
Various
 
Various
 
4”-14”
 
876

 
368

 
Catlettsburg, Canton
Robinson, IL products system(b)
Various
 
Various
 
10”-16”
 
1,131

 
513

 
Robinson
Woodhaven, MI to Detroit, MI
Woodhaven, MI
 
Detroit, MI
 
4"
 
26

 
12

 
N/A
Louisville, KY Airport products system
Louisville, KY
 
Louisville, KY
 
6”-8”
 
14

 
29

 
Robinson
Inactive pipelines(b)
 
 
 
 
 
 
140

 
N/A

 
 
Total
 
 
 
 
 
 
2,360

 
1,764

 
 
Wood River, IL barge dock (mbpd)
 
 
 
 
 
 
 
 
78

 
Garyville
Storage assets (thousand barrels):
 
 
 
 
 
 
 
 
 
 
 
Tank Farms(c)
 
 
 
 
 
 
 
 
18,642

 
N/A
Caverns
 
 
 
 
 
 
 
 
2,755

 
N/A
Total
 
 
 
 
 
 
 
 
21,397

 
 
(a) 
All capacities reflect 100 percent of the pipeline systems’ and barge dock’s average capacity in thousands of barrels per day and 100 percent of the available storage capacity of our caverns and tank farms in thousands of barrels.
(b) 
Includes pipelines leased from third parties.
(c) 
MPLX owns and operates 15 tank farms and operates two leased tank farms.


36

Table of Contents

As of December 31, 2017, MPLX had partial ownership interests in the following pipeline companies.
Pipeline Company
 
Origin
 
Destination
 
Diameter
(inches)
 
Length
(miles)
 
Ownership
Interest
 
Operated
by MPL
Crude oil pipeline companies:
 
 
 
 
 
 
 
 
 
 
 
Bakken Pipeline system
Bakken/Three Forks area, North Dakota
 
Nederland, TX
 
30"
 
1,921

 
9.2
%
 
No
Illinois Extension Pipeline Company LLC
Flanagan, IL
 
Patoka, IL
 
24"
 
168

 
35
%
 
No
LOCAP LLC
Clovelly, LA
 
St. James, LA
 
48”
 
57

 
59
%
 
No
LOOP LLC (LOOP)(a)
Offshore Gulf of 
Mexico
 
Clovelly, LA
 
48”
 
48

 
41
%
 
No
Total
 
 
 
 
 
 
2,194

 
 
 
 
Products pipeline companies:
 
 
 
 
 
 
 
 
 
 
 
Explorer Pipeline Company
Port Arthur, TX
 
Hammond, IN
 
12”-28”
 
1,830

 
25
%
 
No
Louisville, KY to Lexington, KY(c)
Louisville, KY
 
Lexington, KY
 
8"
 
87

 
65
%
 
Yes
 
 
 
 
 
 
 
 
1,917

 
 
 
 
(a)    Excludes MPC’s 10% ownership interest in LOOP.
The following table sets forth details about MPLX owned and operated terminals as of December 31, 2017. Additionally, MPLX operates one leased terminal and has partial ownership interest in two terminals.
Owned and Operated Terminals
 
Number of
Terminals
 
Tank Storage
Capacity
(thousand barrels)
 
Number
of Tanks
 
Number of
Loading
Lanes
Light Products Terminals:
 
 
 
 
 
 
 
Alabama
2

 
443

 
16

 
4

Florida
4

 
3,422

 
65

 
22

Georgia
4

 
998

 
31

 
9

Illinois
4

 
1,275

 
34

 
14

Indiana
6

 
3,229

 
60

 
17

Kentucky
6

 
2,587

 
56

 
25

Louisiana
1

 
97

 
7

 
2

Michigan
8

 
2,440

 
73

 
26

North Carolina
4

 
1,509

 
34

 
13

Ohio
12

 
3,227

 
101

 
28

Pennsylvania
1

 
390

 
12

 
2

South Carolina
1

 
370

 
8

 
3

Tennessee
4

 
1,148

 
30

 
12

West Virginia
2

 
1,587

 
25

 
2

Total light products terminals
59

 
22,722

 
552

 
179


37

Table of Contents

The following table sets forth details about barges and towboats as of December 31, 2017.
Class of Equipment
 
Number
in Class
 
Capacity
(
thousand barrels)
Inland tank barges:(a)
 
 
 
Less than 25,000 barrels
62

 
942

25,000 barrels and over
170

 
4,985

Total
232

 
5,927

 
 
 
 
Inland towboats:
 
 
 
Less than 2,000 horsepower
2

 
 
2,000 horsepower and over
16

 
 
Total
18

 
 
(a)    All of our barges are double-hulled.
The following tables set forth certain information relating to our gas processing facilities, fractionation facilities, de-ethanization facilities and natural gas gathering systems as of December 31, 2017, and include capacities and throughputs related to operated equity method investments on a 100 percent basis.
Gas Processing Complexes
 
Location
 
Design
Throughput
Capacity (
MMcf/d)(a)
 
Natural Gas
Throughput (
MMcf/d)(b)
 
Utilization
of Design
Capacity
(b)
Bluestone Complex
Butler County, PA
 
410

 
310

 
76
%
Houston Complex(c)
Washington County, PA
 
520

 
495

 
95
%
Majorsville Complex
Marshall County, WV
 
1,070

 
905

 
85
%
Mobley Complex
Wetzel County, WV
 
920

 
695

 
76
%
Sherwood Complex(d)
Doddridge County, WV
 
1,800

 
1,480

 
102
%
Cadiz Complex(e)
Harrison County, OH
 
525

 
509

 
97
%
Seneca Complex(e)
Noble County, OH
 
800

 
475

 
59
%
Kenova Complex(f)
Wayne County, WV
 
160

 
108

 
68
%
Boldman Complex(f)
Pike County, KY
 
70

 
32

 
46
%
Cobb Complex
Kanawha County, WV
 
65

 
24

 
37
%
Kermit Complex(f)(g)
Mingo County, WV
 
32

 
N/A

 
N/A

Langley Complex
Langley, KY
 
325

 
101

 
31
%
Carthage Complex
Panola County, TX
 
600

 
399

 
67
%
Western Oklahoma Complex
Custer and Beckham Counties, OK
 
425

 
373

 
88
%
Hidalgo System
Culberson County, TX
 
200

 
199

 
100
%
Javelina Complex
Corpus Christi, TX
 
142

 
112

 
79
%
Total
 
 
8,032

 
6,217

 
81
%
(a) 
Centrahoma processing capacity of 280 MMcf/d and actual throughput of 243 MMcf/d, that exceeded MPLX’s 40 percent share of the capacity of 112 MMcf/d, are not included in this table as MPLX owns a non-operating interest.
(b) 
Natural gas throughput is a weighted average for days in operation. The utilization of design capacity has been calculated using the weighted average design throughput capacity.
(c) 
Approximately 35 MMcf/d of processing capacity at the Houston Complex was decommissioned during the first quarter of 2017 and will be replaced with 200 MMcf/d of processing capacity in 2018.
(d) 
The Sherwood Complex is partially owned by Sherwood Midstream LLC (“Sherwood Midstream”), which MPLX accounts for as an equity method investment.
(e) 
The Cadiz and Seneca Complexes are owned by MarkWest Utica EMG, L.L.C. (“MarkWest Utica EMG”), which MPLX accounts for as an equity method investment.
(f) 
A portion of the gas processed at the Boldman plant, and all of the gas processed at the Kermit plant, is further processed at the Kenova plant to recover additional NGLs.
(g) 
The Kermit processing plant is operated by a third party solely to prevent liquids from condensing in the gathering and transmission pipelines upstream of our Kenova plant. MPLX does not receive Kermit gas volume information but does receive all of the liquids produced at the Kermit Complex. As such, the natural gas throughput has been excluded from the total.



38

Table of Contents

Fractionation & Condensate Stabilization Complexes
 
Location
 
Design
Throughput
Capacity (
mbpd)
 
NGL Throughput (mbpd)(a)
 
Utilization
of Design
Capacity
(a)
Bluestone Complex(b)(c)
Butler County, PA
 
47

 
19

 
40
%
Houston Complex(b)
Washington County, PA
 
60

 
61

 
102
%
Hopedale Complex(b)(d)
Harrison County, OH
 
180

 
134

 
77
%
Ohio Condensate Complex(e)
Harrison County, OH
 
23

 
13

 
57
%
Siloam Complex(f)
South Shore, KY
 
24

 
14

 
58
%
Javelina Complex
Corpus Christi, TX
 
11

 
8

 
73
%
Total
 
 
345

 
249

 
73
%
(a) 
NGL throughput is a weighted average for days in operation. The utilization of design capacity has been calculated using the weighted average design throughput capacity.
(b) 
The MPLX Houston, Hopedale and Bluestone Complexes have above-ground NGL storage with a usable capacity of 32 million gallons, large‑scale truck and rail loading. In addition, the Houston Complex has large‑scale truck unloading. MPLX also has access to up to an additional 50 million gallons of propane storage capacity that can be utilized in the Marcellus Shale, Utica Shale and Appalachia region under an agreement with a third party that expires in 2018. Lastly, MPLX has up to eight million gallons of propane storage with third parties that can be utilized in the Marcellus Shale and Utica Shale.
(c) 
Includes 33 mpbd of de-propanization only capacity.
(d) 
The MPLX Hopedale Complex is jointly owned by Ohio Fractionation Company, L.L.C. (“Ohio Fractionation”) and MarkWest Utica EMG. Ohio Fractionation is a joint venture between MarkWest Liberty Midstream & Resources, L.L.C. (“MarkWest Liberty Midstream”) and Sherwood Midstream (a joint venture between Markwest Liberty Midstream and Antero Midstream LLC). MarkWest Liberty Midstream and Sherwood Midstream are entities that operate in the Marcellus region, and Markwest Utica EMG is an entity that operates in the Utica regions. MPLX accounts for MarkWest Utica EMG and Sherwood Midstream as equity method investments.
(e) 
The Ohio Condensate Complex as up to 7 million gallons of condensate storage. The Ohio Condensate Complex is partially-owned by MarkWest Utica EMG Condensate, L.L.C. MPLX accounts for Ohio Condensate as an equity method investment.
(f) 
The MPLX Siloam Complex has both above-ground, pressurized NGL storage facilities, with usable capacity of two million gallons, and underground storage facilities, with usable capacity of 10 million gallons. Product can be received by truck, pipeline or rail and can be transported from the facility by truck, rail or barge. This facility has large‑scale truck and rail loading and unloading capabilities, and a river barge facility capable of loading barges up to 860,000 gallons.
De-ethanization Complexes
Location
 
Design
Throughput
Capacity (
mbpd)
 
NGL Throughput (mbpd)(a)
 
Utilization
of Design
Capacity
(a)
Bluestone Complex
Butler County, PA
 
34

 
15

 
63
%
Houston Complex
Washington County, PA
 
40

 
40

 
100
%
Majorsville Complex
Marshall County, WV
 
80

 
45

 
99
%
Mobley Complex
 
Wetzel County, WV
 
10

 
11

 
110
%
Sherwood Complex
Doddridge County, WV
 
40

 
30

 
75
%
Cadiz Complex(b)
Harrison County, OH
 
40

 
5

 
13
%
Javelina Complex
Corpus Christi, TX
 
18

 
12

 
67
%
Total
 
 
262

 
158

 
72
%
(a) 
NGL throughput is a weighted average for days in operation. The utilization of design capacity has been calculated using the weighted average design throughput capacity.
(b) 
The Cadiz Complex is owned by MarkWest Utica EMG, which MPLX accounts for as an equity method investment.




39

Table of Contents

Natural Gas Gathering Systems
 
Location
 
Design
Throughput
Capacity (MMcf/d)
 
Natural Gas
Throughput (MMcf/d)(a)
 
Utilization
of Design
Capacity(a)
Bluestone System
Butler County, PA
 
227

 
165

 
73
%
Houston System
Washington County, PA
 
1,178

 
839

 
74
%
Ohio Gathering System(b)
Harrison, Monroe, Belmont, Guernsey and Noble Counties, OH
 
1,123

 
766

 
70
%
Jefferson Gas System(c)
Jefferson County, OH
 
1,250

 
426

 
47
%
East Texas System
Harrison and Panola Counties, TX
 
680

 
444

 
65
%
Western Oklahoma System
Wheeler County, TX and Roger Mills, Ellis, Custer, Beckham and Washita Counties, OK
 
585

 
404

 
69
%
Southeast Oklahoma System
Hughes, Pittsburg and Coal Counties, OK
 
755

 
525

 
70
%
Eagle Ford System
Dimmit County, TX
 
45

 
30

 
67
%
Other Systems(d)
Various
 
60

 
9

 
15
%
Total
 
 
5,903

 
3,608

 
66
%
(a) 
Natural gas throughput is a weighted average for days in operation. The utilization of design capacity has been calculated using the weighted average design throughput capacity.
(b) 
The Ohio Gathering System is owned by Ohio Gathering Company, L.L.C., which MPLX accounts for as an equity method investment.
(c) 
The Jefferson Gas System is owned by Jefferson Dry Gas, which is a joint venture between MarkWest Liberty Midstream and EMG MWE Dry Gas Holdings, LLC. MPLX accounts for Jefferson Dry Gas as an equity method investment.
(d) 
Excludes lateral pipelines where revenue is not based on throughput.


40

Table of Contents

The following tables set forth certain information relating to our NGL pipelines and crude oil pipeline as of December 31, 2017.
NGL Pipelines
 
Location
 
Design
Throughput
Capacity (mbpd)
 
NGL
Throughput (mbpd)
 
Utilization
of Design
Capacity
Sherwood to Mobley propane and heavier liquids pipeline
Doddridge County, WV to Wetzel County, WV
 
75

 
60

 
80
%
Mobley to Majorsville propane and heavier liquids pipeline
Wetzel County, WV to Marshall County, WV
 
105

 
85

 
81
%
Majorsville to Houston propane and heavier liquids pipeline
Marshall County, WV to Washington County, PA
 
45

 
32

 
71
%
Majorsville to Hopedale propane and heavier liquids pipeline
Marshall County, WV to Harrison County, OH
 
140

 
69

 
49
%
Third party processing plant to Bluestone ethane and heavier liquids pipeline
Butler County, PA
 
32

 
8

 
25
%
Bluestone to Mariner West ethane pipeline(a)
Butler County, PA to Beaver County, PA
 
35

 
15

 
43
%
Houston to Ohio River ethane pipeline(b)
Washington County, PA to Beaver County, PA
 
57

 
9

 
16
%
Majorsville to Houston ethane pipeline(a)
Marshall County, WV to Washington County, PA
 
137

 
49

 
36
%
Sherwood to Mobley ethane pipeline
Doddridge County, WV to Wetzel County, WV
 
47

 
30

 
64
%
Mobley to Majorsville ethane pipeline
Wetzel County, WV to Marshall County, WV
 
57

 
41

 
72
%
Seneca to Cadiz propane and heavier liquids pipeline(c)
Noble County, OH to Harrison County, OH

 
75

 
16

 
21
%
Cadiz to Hopedale propane and heavier liquids pipeline(c)
Harrison County, OH
 
90

 
31

 
34
%
Seneca to Cadiz propane/ethane and heavier liquids pipeline(c)(d)
Noble County, OH to Harrison County, OH
 
69/82

 
1

 
1
%
Cadiz to Atex ethane pipeline(c)
Harrison County, OH
 
125

 
5

 
4
%
Cadiz to Utopia ethane pipeline(c)
Harrison County, OH
 
125

 
1

 
1
%
Langley to Siloam propane and heavier liquids pipeline(e)
Langley, KY to South Shore, KY
 
17

 
12

 
71
%
East Texas liquids pipeline
Panola County, TX
 
39

 
22

 
56
%
(a) 
This pipeline is FERC-regulated.
(b) 
This is the section of the Mariner West pipeline, which is FERC-regulated, leased to and operated by Sunoco Logistics Partners LP.
(c) 
This pipeline is owned by MarkWest Utica EMG, which MPLX accounts for as an equity method investment.
(d) 
This is the same pipeline from Seneca to Cadiz and can only be used for either ethane and heavier liquids or propane and heavier liquids at one time. Both throughput capacities are listed above, respectively, with ethane included in the total.
(e) 
NGLs transported through the Langley to Ranger and Ranger to Kenova pipelines are combined with NGLs recovered at the Kenova facility. The design capacity and volume reported for the Langley to Siloam pipeline represent the combined NGL stream.

Crude Oil Pipeline
 
Location
 
Design
Throughput
Capacity (
mbpd)
 
NGL
Throughput (
mbpd)
 
Utilization
of Design
Capacity
Michigan crude pipeline
Manistee County, MI to Crawford County, MI
 
60

 
10

 
17
%



41

Table of Contents

Midstream - MPC-Retained Assets and Investments
The following tables set forth certain information related to our crude and products pipeline systems not owned by MPLX.
As of December 31, 2017, we owned undivided joint interests in the following common carrier crude oil pipeline systems.
Pipeline System
 
Origin
 
Destination
 
Diameter
(inches)
 
Length
(miles)
 
Ownership
Interest
 
Operated
by MPL
Capline
St. James, LA
 
Patoka, IL
 
40"
 
644

 
33
%
 
Yes
Maumee
Lima, OH
 
Samaria, MI
 
22"
 
95

 
26
%
 
No
Total
 
 
 
 
 
 
739

 
 
 
 
As of December 31, 2017, we had partial ownership interests in the following pipeline companies.
Pipeline Company
 
Origin
 
Destination
 
Diameter
(inches)
 
Length
(miles)
 
Ownership
Interest
 
Operated
by MPL
Crude oil pipeline companies:
 
 
 
 
 
 
 
 
 
 
 
LOOP(a)
Offshore Gulf of 
Mexico
 
Clovelly, LA
 
48”
 
48

 
10
%
 
No
Products pipeline companies:
 
 
 
 
 
 
 
 
 
 
 
Ascension Pipeline Company LLC
Riverside, LA
 
Garyville, LA
 
12"
 
32

 
50
%
 
No
Centennial Pipeline LLC(b)
Beaumont, TX
 
Bourbon, IL
 
24”-26”
 
796

 
50
%
 
Yes
Muskegon Pipeline LLC
Griffith, IN
 
Muskegon, MI
 
10”
 
170

 
60
%
 
Yes
Wolverine Pipe Line Company
Chicago, IL
 
Bay City &
Ferrysburg, MI
 
6”-18”
 
743

 
6
%
 
No
Total
 
 
 
 
 
 
1,741

 
 
 
 
(a) 
Represents interest retained by MPC and excludes MPLX’s 41% ownership interest in LOOP. Pipeline mileage is excluded from total as it is included with MPLX assets.
(b) 
All system pipeline miles are inactive.
The following table provides information on private crude oil pipelines and private products pipelines that we own as of December 31, 2017.
Private Pipeline Systems
 
Diameter
(
inches)
 
Length
(
miles)
 
Capacity
(
mbpd)
Crude oil pipeline systems:
 
 
 
 
 
Inactive pipelines
 
 
9

 
N/A

Products pipeline systems:
 
 
 
 
 
Illinois pipeline systems
4”-8”
 
118

 
39

Texas pipeline systems
8”
 
103

 
45

Inactive pipelines
 
 
7

 
N/A

Total
 
 
228

 
84

The following table sets forth details about the assets held by two ocean vessel joint ventures in which we hold a 50% interest as of December 31, 2017.
Class of Equipment
 
Number
in Class
 
Capacity
(
thousand barrels)
Jones Act product tankers(a)
4

 
1,320

 
 
 
 
 
750 Series ATB vessels(b)
3

 
990

(a) 
Represents ownership through our indirect noncontrolling interest in Crowley Ocean Partners.
(b) 
Represents ownership through our indirect noncontrolling interest in Crowley Blue Water Partners.

42

Table of Contents

Item 3. Legal Proceedings
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.
Litigation
We are a party to a number of lawsuits and other proceedings and cannot p