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Speedway to Acquire Hess Retail
  • Accelerates MPC's strategy to grow higher-valued, stable cash flow retail business
  • Positions Speedway as one of the largest company-owned and -operated convenience store chains in the U.S.
  • Creates substantial commercial and operational synergies and marketing enhancements
  • Leverages integrated refining and transportation logistics operations
  • Provides outlet for incremental 200,000 barrels per day of refined products

FINDLAY, Ohio, May 22, 2014 - Marathon Petroleum Corporation (NYSE: MPC) today announced its subsidiary, Speedway LLC, has signed a definitive agreement with Hess Corporation to acquire Hess Retail Holdings LLC. This transaction incorporates all of Hess' retail locations, transport operations and shipper history on various pipelines, including approximately 40,000 barrels per day (bpd) on Colonial Pipeline. The total consideration is $2.874 billion comprised of a cash purchase price of $2.37 billion, an estimated $230 million of working capital and $274 million of capital leases. The acquisition is expected to be funded with a combination of debt and available cash and is anticipated to close late in the third quarter of 2014, subject to customary closing conditions and regulatory approvals.

"This acquisition will be transformative for MPC and Speedway as it will significantly expand our retail presence from nine to 23 states through these premier Hess locations throughout the East Coast and Southeast," said MPC President and Chief Executive Officer Gary R. Heminger. "Our strategy is focused on growing higher-valued, stable cash flow businesses, and this transaction fully supports that objective. With this significant geographic expansion, we will be able to further leverage our integrated refining and transportation logistics operations, providing an outlet for an incremental 200,000 bpd of assured sales from our refining system."

Looking forward, Heminger said, "This acquisition represents an important step in our long-term strategy by accelerating Speedway's planned growth into contiguous markets and supporting the goal of generating $1 billion of earnings before interest, taxes, depreciation and amortization. It also underscores our commitment to balancing value-enhancing investments with continuing capital returns to shareholders."

Hess is the largest operator of convenience stores along the East Coast and the fifth largest in the U.S. by number of company-operated sites with 1,256 stores located in 16 states. Speedway is the nation's fourth-largest convenience store chain by number of company-owned and -operated sites with approximately 1,480 stores located in nine states. The addition of Hess' stores to the Speedway network of sites will broaden Speedway's geographic footprint and position Speedway as the premier convenience store operator in the eastern U.S. The combined business will have 2013 pro forma revenues of more than $27 billion, 6.2 billion gallons of annual fuel sales, and $4.8 billion of annual merchandise sales at more than 2,700 retail locations.

Tony Kenney, president of Speedway, commented, "This will be a significant acquisition for Speedway, as we will become the largest company-owned and -operated convenience store chain in the nation based upon revenue and the second largest by store count. We are eager to bring the value of the Speedway brand as well as our industry-recognized loyalty program, Speedy Rewards, to millions of new customers. We will apply our merchandise sales focus to deliver both sales and margin growth and leverage Hess' leadership in fuel sales in these markets. We also see the potential for tremendous opportunities and significant synergies through combined best practices and economies of scale throughout our entire retail network, which we believe will further drive earnings growth over the next several years."

Conference Call

At 10:00 a.m. EDT today, MPC will hold a webcast and conference call to discuss this transaction. Interested parties may listen to the conference call on MPC's website at http://www.marathonpetroleum.com by clicking on the "Conference Call May 22" link in the upper right corner of the page. Replays of the conference call will be available on the company's website through June 5, 2014.

Barclays Capital Inc. acted as financial advisor to Marathon Petroleum Corporation in connection with the transaction.

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About Marathon Petroleum Corporation

MPC is the nation's fourth-largest refiner, with a crude oil refining capacity of approximately 1.7 million barrels per calendar day in its seven-refinery system. Marathon brand gasoline is sold through approximately 5,200 independently owned retail outlets across 18 states. In addition, Speedway LLC, an MPC subsidiary, owns and operates the nation's fourth-largest convenience store chain, with approximately 1,480 convenience stores in nine states. MPC also owns, leases or has ownership interests in approximately 8,300 miles of pipeline. Through subsidiaries, MPC owns the general partner of MPLX LP, a midstream master limited partnership. MPC's fully integrated system provides operational flexibility to move crude oil, feedstocks and petroleum-related products efficiently through the company's distribution network in the Midwest, Southeast and Gulf Coast regions. For additional information about the company, please visit our website at http://www.marathonpetroleum.com.

About Speedway

Speedway LLC (Speedway), headquartered in Enon, Ohio, is the nation's fourth largest company-owned and -operated convenience store chain with approximately 1,480 stores located in nine states. Speedway is a wholly owned subsidiary of Marathon Petroleum Corporation (NYSE: MPC). For further information about Speedway, visit the company's website at www.speedway.com.

Investor Relations Contacts:
Beth Hunter (419) 421-2559
Geri Ewing (419) 421-2071

Media Contacts:
Angelia Graves (419) 421-2703

This press release contains forward-looking statements within the meaning of federal securities laws regarding MPC. These forward-looking statements relate to, among other things, expectations, estimates and projections concerning the business and operations of MPC. You can identify forward-looking statements by words such as "anticipate," "believe," "estimate," "expect," "forecast," "project," "could," "may," "should," "would," "will" or other similar expressions that convey the uncertainty of future events or outcomes. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond the company's control and are difficult to predict. Factors that could cause MPC's actual results to differ materially from those in the forward-looking statements include: the time and costs required to consummate the proposed acquisition of Hess Retail Holdings LLC; the satisfaction or waiver of conditions in the purchase agreement governing the proposed acquisition; the ability to obtain regulatory or other third-party approvals and consents and otherwise consummate the proposed acquisition; our ability to achieve the strategic and other objectives relating to the proposed acquisition, including any expected synergies; our ability to successfully integrate Hess retail operations and achieve the expected results of the acquisition; 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; completion of pipeline projects within the U.S.; consumer demand for refined products; transportation logistics; the reliability of processing units and other equipment; the ability to successfully implement growth opportunities; impacts from repurchases of shares of MPC common stock under share repurchase authorizations, including the timing and amounts of any common stock repurchases; state and federal environmental, economic, health and safety, energy and other policies and regulations, including the cost of compliance with the Renewable Fuel Standard; other risk factors inherent to MPC's industry; and the factors set forth under the heading "Risk Factors" in MPC's Annual Report on Form 10-K for the year ended December 31, 2013, filed with the Securities and Exchange Commission. In addition, the forward-looking statements included herein could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed here or in MPC's Form 10-K could also have material adverse effects on results.


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