Marathon Oil (MRO)

Refining, Marketing and Transportation (“Downstream”)

Metrics apply to Mr. Heminger.

(d)         This metric is the ratio of operating profits to the amount of operating capital invested to generate those profits. It is intended to be a measure of how productively assets are used. The values used in calculating this metric are obtained from records of the Downstream segment.

(e)          This metric is calculated using specific costs incurred in the operations of the Downstream segment, including those costs directly attributable to refining, marketing, distribution and transportation operations such as employee expenses, turnaround costs and advertising expense. Costs excluded are those impacted by fluctuations in hydrocarbon prices and volumes such as purchased energy and transportation costs.

(f)            This metric includes a portion of the selling, general and administrative expenses reflected in the audited consolidated statement of income. It includes general and administrative expenses incurred by the Downstream segment, but not directly attributable to specific operations, for example the various expenses of maintaining and staffing a central office from which the segment is managed.

Downstream segment income was $823 million in second quarter 2005 compared to segment income of $577 million in second quarter 2004.

The improvement was primarily due to a higher refining and wholesale marketing margin.  MAP benefited from wider sweet/sour crude differentials in general and was able to run more sour crudes during the period, taking advantage of the substantial discounts on these feedstocks.

MAP delivered strong crude runs during the second quarter 2005 that averaged 1,012,000 bpd, with total throughput averaging a record 1,187,000 bpd.  This strong operating performance positioned the company to help meet demand for transportation fuels in its markets, while capturing the benefits of strong refining margins.  When compared to the second quarter 2004, the second quarter 2005 crack spread for the Midwest was slightly lower while the Gulf Coast crack spread was at a record high.

During the quarter, Speedway SuperAmerica LLC (SSA) continued to achieve strong same store merchandise sales which increased approximately 10 percent compared to the second quarter 2004.

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