Interesting stuff from the Marathon annual reports

I find the year end reports from Marathon fascinating. One of the most interesting things you can find there is the year end financial information for Speedway. At the moment, it goes back to 2011, although you can get numbers from 2009. Here is a chart of something I found very interesting:

	Average	Spike Line	Margin	% Margin	Mthn. AR	% M Mthn	2009 $	# SW Loc
2010	2.428	2.216	0.212	8.73	0.1207	4.97	0.1210	1358
2011	3.544	3.367	0.177	4.99	0.1308	3.69	0.1248	1371
2012	3.889	3.545	0.344	8.85	0.1318	3.39	0.1232	1464
2013	3.560	3.497	0.063	1.77	0.1441	4.05	0.1327	1478
2014	3.369	3.268	0.101	3.00	0.1775	5.27	0.1609	2746
2015	2.371	2.267	0.104	4.38	0.1823	7.69	0.1650	2766

Average = Indiana average for the year

Spike Line = Spike Line Average

Margin = Difference between Average and Spike Line

% Margin = Margin / Average

Mrthn. AR = Marathon’s reported margin for Speedway

% M Mthn = Mrthn. AR / Average

2009 $ = Mrthn. AR adjusted for 2009 dollars

# SW Loc = Number of Speedway locations

First thing that jumped out to me is that my predictions for the Spike Line have been all over the place. I’ve been frustrated about it, and it’s one of the many reasons I gave up on it.

Second thing is that the percent of margin is low. Even my highest year is still less than ten percent. To break even in any business, you need to make around 10% margin. As we all should know, however, they don’t make any money on the gas end, it’s usually all made inside on overpriced items.

But there is something interesting buried in there, and it’s pretty deep. Look at the margins adjusted for 2009 dollars. Notice the uptick in profit margin from 2013 to 2014. It almost jumps 3 cents. And it happens at about the same time they jump from about 1500 stores to almost 2800 stores.

Some would say that the jump probably corresponds with the even greater monopoly they have grabbed. If I hadn’t seen the following map, I would agree. But this map tells another tale:

They didn’t add more stores to Indiana, Ohio and Michigan, they expanded to the east and south. What I think is that they expanded into areas that had higher margins than ours, and thus it increased margins overall.

Something else to think about is how good Speedway stores are at selling gas than their Marathon partners. Speedway had almost 2770 stores when this report came out, Marathon almost 5600. But Speedway still outsold those Marathon stores 6 to 5.

Take a look over those annual reports and let us know what you think. And if you have an idea for a story, or something you’d like me to investigate further, leave a note in the comments, or email me at the address at the bottom left of this page.