Marathon Petroleum’s cash flow
In the first quarter, Marathon Petroleum (MPC) had $1623 million in cash from operations. The company had cash outflows of $1241 million in the form of an addition to PEE (plant, property, and equipment) and $354 million in the form of dividends.
Cash flow surplus
Marathon Petroleum’s cash outflows were ~$1595 million in the first quarter if we consider the PPE additions and dividend payments. The company’s cash flow from operations of $1623 million covered its necessary capex and dividend payments of $1595 billion in the first quarter.
Marathon Petroleum’s investment in acquisitions, loans, and contributions was $325 million. The company’s in share repurchases were $885 million in the first quarter. Marathon Petroleum met the requirement through cash reserves and debt. Marathon Petroleum’s debt rose by $573 billion in the first quarter. The company’s cash balance fell from $1.7 billion at the beginning of the quarter to $0.9 billion at the end of the quarter.
Peers’ cash flow
Phillips 66 (PSX) had negative cash from operations of $478 million in the first quarter due to the seasonal inventory build up. Phillips 66 couldn’t use its cash from operations toward its capex and dividend outflows. Valero Energy’s (VLO) cash flow from operations of $877 million was lower than the needed outflows of $1101 million on capex and dividends.
Cash flow analysis
Marathon Petroleum’s cash flow from operations covered its vital outflows, which is a favorable business scenario. Valero Energy and Phillips 66 faced a shortfall in the first quarter. The company managed to click a surplus despite weaker refining earnings in the first quarter. The surplus shows the strength in the company’s integrated earnings model.
In upcoming quarters, Marathon Petroleum’s earnings and cash flows could improve due to its growth activities. The improvement could increase the company’s surplus cash from operations.