RELATED: Marathon review of Enon-based Speedway could include spin-off
But company executives credited the Enon-based Speedway chain for its performance throughout the year, despite Marathon’s weaker earnings. The convenience store chain, based in Enon, set several earnings records and controlled its expenses, company leaders said Wednesday.
The company is one of Clark County’s largest employers with about 1,350 workers locally and about 33,820 nationally.
Marathon is also pushing ahead with a study of whether it makes sense to spin off the Speedway brand.
“Speedway’s performance highlights the strong value our team is creating for investors,” Marathon President and CEO Gary Heminger said.
Marathon officials said they have selected an independent financial adviser to lead a review of the Speedway chain and will create a special committee to decide the issue. However, Heminger and others declined to discuss further details, including naming the financial adviser, until an update is provided this summer.
READ MORE: Enon company’s CEO named retail leader of the year
“Our statement we made on Jan. 3 is just that,” Heminger said in a call with investors Wednesday morning. “It’s going to be a full comprehensive review and we’ll determine by mid-year what the outcome is.”
The committee will be made up of five board members. Marathon’s management will compile data used in the review but otherwise will allow the committee to draw its own conclusions.
“We want to keep this as a very independent, confidential study between the committee,” Heminger said.
The Speedway segment beat all-time highs in several areas, including merchandise sales, light product gallons sold and operations, company officials said Wednesday. The improved results over the year were primarily the result of higher merchandise margins and asset sales, partially offset by lower fuel margins.
Marathon also said it plans to spend about $380 million on the Speedway segment in 2017 as part of its capital investment plan. The investment will primarily be used to build new Speedway stores and remodel and rebuild existing locations in the company’s core markets.
In 2014, Speedway completed a $2.8 billion acquisition of Hess Retail Holdings, an East Coast convenience store chain.
DETAILS: Enon-based Speedway finalizes deal with Hess
Heminger also said they expect progress on the Dakota Access Pipeline, a controversial $3.7 billion project that would extend more than 1,170 miles across North Dakota, then through South Dakota, Iowa and Illinois. Last year Marathon agreed to participate in a joint venture to invest in the Dakota Access Pipeline and the Energy Transfer Crude Oil Pipeline projects, known collectively as the Bakken Pipeline system.
Native Americans and environmental groups have sought to delay construction and have protested the project because of concerns that the pipeline might affect a sensitive watershed and land the Standing Rock Sioux consider sacred ground.
Protesters gathered in Springfield in November at Speedway's corporate headquarters to protest the company's involvement in the project.
“We’re optimistic, especially with recent communications coming out of the (Trump) administration … that pipeline gets completed and gets completed quickly,” said Donald Templin, Marathon’s executive vice president. “From an MPLX perspective, we are prepared to make our investment in that pipeline when the conditions to close are met.”
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By the numbers:
$1.17 billion — Marathon earnings in 2016
$2.85 billion — Marathon earnings in 2015
$734 million — Speedway earnings in 2016
$673 million — Speedway earnings in 2015
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