SEGMENT INFORMATION

We have three reportable segments: Refining & Marketing; Retail; and Midstream. Each of these segments is organized and managed based upon the nature of the products and services it offers.

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Refining & Marketing – refines crude oil and other feedstocks at our 16 refineries in the West Coast, Gulf Coast and Mid-Continent regions of the United States, purchases refined products and ethanol for resale and distributes refined products largely through transportation, storage, distribution and marketing services provided largely by our Midstream segment. We sell refined products to wholesale marketing customers domestically and internationally, to buyers on the spot market, to our Retail business segment and to independent entrepreneurs who operate primarily Marathon^® branded outlets.


•	Retail – sells transportation fuels and convenience products in the retail market across the United States through company-owned and operated convenience stores, primarily under the Speedway brand, and long-term fuel supply contracts with direct dealers who operate locations mainly under the ARCO brand.

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Midstream – transports, stores, distributes and markets crude oil and refined products principally for the Refining & Marketing segment via refining logistics assets, pipelines, terminals, towboats and barges; gathers, processes and transports natural gas; and gathers, transports, fractionates, stores and markets NGLs. The Midstream segment primarily reflects the results of MPLX and ANDX, our sponsored master limited partnerships.

On October 1, 2018, we acquired Andeavor and its results are included in each of our segments from the date of the acquisition. Also, on February 1, 2018, we contributed certain refining logistics assets and fuels distribution services to MPLX. The results of these new businesses are reported in the Midstream segment prospectively from February 1, 2018, resulting in a net reduction of $874 million to Refining & Marketing segment results and a net increase to Midstream segment results of the same amount. No effect was given to prior periods as these entities were not considered businesses prior to February 1, 2018.

Segment income represents income from operations attributable to the reportable segments. Corporate administrative expenses, except for those attributable to MPLX and ANDX, and costs related to certain non-operating assets are not allocated to the reportable segments. In addition, certain items that affect comparability (as determined by the chief operating decision maker) are not allocated to the reportable segments. In the third quarter of 2018, we began reporting segment capital expenditures and investments excluding acquisitions in the current and comparative periods.



(In millions)	Refining & Marketing		Retail		Midstream		Total
Year Ended December 31, 2018
Revenues:
Third party	$	68,939	$	23,538	$	3,273	$	95,750
Intersegment	12,914		6		3,387		16,307
Related party	746		8		—		754
Segment revenues	$	82,599	$	23,552	$	6,660	$	112,811
Segment income from operations	$	2,481	$	1,028	$	2,752	$	6,261
Income from equity method investments^(b)	15		74		274		363
Depreciation and amortization^(b)	1,174		353		885		2,412
Capital expenditures and investments^(c)	1,057		460		2,630		4,147



(In millions)	Refining & Marketing		Retail		Midstream		Total
Year Ended December 31, 2017
Revenues:
Third party	$	52,761	$	19,021	$	2,322	$	74,104
Intersegment^(a)	11,309		4		1,443		12,756
Related party	621		8		—		629
Segment revenues	$	64,691	$	19,033	$	3,765	$	87,489
Segment income from operations	$	2,321	$	729	$	1,339	$	4,389
Income from equity method investments^(b)	17		69		197		283
Depreciation and amortization^(b)	1,082		275		699		2,056
Capital expenditures and investments^(c)	832		381		1,755		2,968



(In millions)	Refining & Marketing		Retail		Midstream		Total
Year Ended December 31, 2016
Revenues:
Third party	$	43,167	$	18,282	$	1,828	$	63,277
Intersegment^(a)	10,589		3		1,262		11,854
Related party	61		1		—		62
Segment revenues	$	53,817	$	18,286	$	3,090	$	75,193
Segment income from operations^(d)	$	1,357	$	733	$	1,048	$	3,138
Income from equity method investments^(b)	24		5		142		171
Depreciation and amortization^(b)	1,063		273		605		1,941
Capital expenditures and investments^(c)	1,054		303		1,558		2,915


^(a)	Management believes intersegment transactions were conducted under terms comparable to those with unaffiliated parties.


^(b)	Differences between segment totals and MPC totals represent amounts related to unallocated items and are included in “Items not allocated to segments” in the reconciliation below.


^(c)	Capital expenditures include changes in capital accruals and investments in affiliates.


^(e)	In 2016, the Refining & Marketing and Retail segments include an inventory LCM benefit of $345 million and $25 million, respectively.

The following reconciles segment income from operations to income before income taxes as reported in the consolidated statements of income:



(In millions)	2018			2017			2016
Segment income from operations	$	6,261		$	4,389		$	3,138
Items not allocated to segments:
Corporate and other unallocated items^(a)	(502		)	(365		)	(266		)
Transaction-related costs	(197		)	—			—
Litigation	—			(29		)	—
Impairments^(b)	9			23			(486		)
Income from operations	5,571			4,018			2,386
Net interest and other financial costs	1,003			674			564
Income before income taxes	$	4,568		$	3,344		$	1,822


^(a)	Corporate and other unallocated items consists primarily of MPC’s corporate administrative expenses and costs related to certain non-operating assets, except for corporate overhead expenses attributable to MPLX and ANDX, which are included in the Midstream segment. Corporate overhead expenses are not allocated to the Refining & Marketing and Retail segments.


^(b)	2018 and 2017 includes MPC’s share of gains from the the sale of assets remaining from the canceled Sandpiper pipeline project. 2016 includes impairments of goodwill and equity method investments. See Note 17.

The following reconciles segment capital expenditures and investments to total capital expenditures:



(In millions)	2018		2017		2016
Segment capital expenditures and investments	$	4,147	$	2,968	$	2,915
Less investments in equity method investees	409		305		288
Plus items not allocated to segments:
Corporate	77		83		81
Capitalized interest	80		55		63
Total capital expenditures^(a)	$	3,895	$	2,801	$	2,771


^(a)	Capital expenditures include changes in capital accruals. See Note 20 for a reconciliation of total capital expenditures to additions to property, plant and equipment as reported in the consolidated statements of cash flows.

Revenues by product line were:



(In millions)	2018		2017		2016
Refined products	$	83,888	$	63,846	$	54,450
Merchandise	5,332		5,174		5,297
Crude oil and refinery feedstocks	4,143		3,403		2,038
Midstream services, transportation and other	2,387		1,681		1,492
Sales and other operating revenues^(a)	$	95,750	$	74,104	$	63,277


^(a)	The 2018 period reflects an election to present certain taxes on a net basis concurrent with our adoption of ASC 606.

No single customer accounted for more than 10 percent of annual revenues for the years ended December 31, 2018, 2017 and 2016.

We do not have significant operations in foreign countries. Therefore, revenues in foreign countries and long-lived assets located in foreign countries, including property, plant and equipment and investments, are not material to our operations.