Marathon Oil : 4Q and Full Year 2020 Earnings Investor Package (PDF)

Fourth Quarter 2020

Table of Contents:Statements of Income 2

Balance Sheets 3

Statements of Cash Flows 4

Segment Income Summary 5

United States Supplemental Financial Data 6

International Supplemental Financial Data 7

Non-GAAP Reconciliations

February 22, 2021

Guy Baber 713/[e-mail]

John Reid 713/[e-mail]

8 - 11

Investor Relations

5555 San Felipe Street Houston, TX 77056-2723

Additional information regarding Investor Relations,

Financial Highlights, and News Releases can be reviewed on our website at:https://ir.marathonoil.com/

Consolidated Statements of Income

(In millions, except per share data)

REVENUES AND OTHER INCOME:

Revenues from contracts with customers Net gain (loss) on commodity derivatives Income (loss) from equity method investments Net gain (loss) on disposal of assets

Other income

Total revenues and other income

COSTS AND EXPENSES:

Production

Shipping, handling and other operating Exploration

Depreciation, depletion and amortization Impairments

Taxes other than income General and administrative Total costs and expenses Income (loss) from operations

Net interest and other

Other net periodic benefit costs (credits) Loss on early extinguishment of debt Income (loss) before income taxes

Estimated income tax provision (benefit)

Current

Deferred

Total provision (benefit) for income taxes

NET INCOME (LOSS)

Effective income tax rate

1st Qtr 2019	2nd Qtr 2019	3rd Qtr 2019	4th Qtr 2019	Year 2019
$ 1,200 (91) 11 42 35	$ 1,381 16 31 (8) 13	$ 1,249 47 21 22 6	$ 1,233 (44) 24 (6) 8	$ 5,063 (72) 87 50 62
1,197 187 154 59 554 6 72 94	1,433 193 170 26 605 18 79 87	1,345 163 138 22 622 - 81 82	1,215 169 143 42 616 - 79 93	5,190 712 605 149 2,397 24 311 356
1,126	1,178	1,108	1,142	4,554
71 (49) 5 -	255 (64) 2 -	237 (64) 2 -	73 (67) (6) (3)	636 (244) 3 (3)
27 (116) (31)	193 34 (2)	175 11 (1)	(3) 17 -	392 (54) (34)
(147)	32	10	17	(88)
$ 174	$ 161	$ 165	$ (20)	$ 480
(544)%	17 %	6%	(567)%	(22)%

1st Qtr 2020	2nd Qtr 2020	3rd Qtr 2020	4th Qtr 2020	Year 2020
$ 1,024 202 (12) 9 7	$ 490 (70) (152) (2) 6	$ 761 (1) (10) 1 3	$ 822 (15) 13 1 9	$ 3,097 116 (161) 9 25
1,230 160 144 28 644 97 66 76	272 129 105 26 597 - 30 88	754 129 183 27 554 1 49 53	830 137 164 100 521 46 55 57	3,086 555 596 181 2,316 144 200 274
1,215	975	996	1,080	4,266
15 (64) - -	(703) (69) 7 -	(242) (62) (6) -	(250) (61) (2) (28)	(1,180) (256) (1) (28)
(49) (2) (1)	(765) (2) (13)	(310) (6) 13	(341) 18 (21)	(1,465) 8 (22)
(3)	(15)	7	(3)	(14)
$ (46)	$ (750)	$ (317)	$ (338)	$ (1,451)
6%	2%	(2)%	1%	1%

Per common share data: Basic:

Weighted average shares (millions)

NET INCOME (LOSS)

Diluted:

Weighted average shares (millions)

NET INCOME (LOSS)

$ 819 0.21 $ 820 0.21

$ 813 0.20 $ 814 0.20

$ 802 0.21 $ 803 0.21

$ 800 (0.03) 800 $ (0.03)

$ 810 0.59 $ 810 0.59

$ 794 (0.06) 794 $ (0.06)

$ 790 (0.95) 790 $ (0.95)

$ 790 (0.40) 790 $ (0.40)

$ 790 (0.43) 790 $ (0.43)

$ 792 (1.83) 792 $ (1.83)

Dividends paid per common share

$ 0.05

$ 0.05

$ 0.05

$ 0.05

$ 0.20

$ 0.05

$ -

$ -

$ 0.03

$ 0.08

Consolidated Balance Sheets

(In millions)

ASSETS

Current assets:

Cash and cash equivalents

Receivables less allowance for doubtful accounts Inventories

Derivative assets Other current assets

Current assets held for sale (a)

Total current assets

Equity method investments Property, plant and equipment, net Goodwill

Other noncurrent assets Noncurrent assets held for sale (a)

Total assets

LIABILITIES

Current liabilities: Accounts payable

Payroll and benefits payable Accrued taxes

Other current liabilities

Long-term debt due within one year Current liabilities held for sale (a)

Total current liabilities

Long-term debt

Deferred tax liabilities

Defined benefit postretirement plan obligations Asset retirement obligations

Deferred credits and other liabilities Noncurrent liabilities held for sale (a)

Total liabilities

TOTAL STOCKHOLDERS' EQUITY

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

Mar. 31 2019	June 30 2019	Sept. 30 2019	Dec. 31 2019
$ 1,019 1,086 83 21 139 428	$ 961 1,144 72 33 68 410	$ 1,165 1,148 71 56 80 -	$ 858 1,122 72 9 74 -
2,776 719 16,714 97 440 664	2,688 684 16,730 95 420 665	2,520 667 16,717 95 374 -	2,135 663 17,000 95 352 -
$ 21,410	$ 21,282	$ 20,373	$ 20,245
$ 1,310 76 149 220 - 103	$ 1,401 88 77 216 600 89	$ 1,374 92 86 227 600 -	$ 1,307 112 118 208 - -
1,858 5,501 192 179 192 317 963	2,471 4,902 184 179 189 292 964	2,379 4,903 183 174 198 265 -	1,745 5,501 186 183 243 234 -
9,202 12,208	9,181 12,101	8,102 12,271	8,092 12,153
$ 21,410	$ 21,282	$ 20,373	$ 20,245

Mar. 31 2020	June 30 2020	Sept. 30 2020	Dec. 31 2020
$ 817 703 78 193 118 -	$ 522 620 77 79 107 -	$ 1,119 643 77 61 22 -	$ 742 747 76 23 24 -
1,909 628 16,903 - 275 -	1,405 476 16,424 - 262 -	1,922 467 16,029 - 245 -	1,612 447 15,638 - 259 -
$ 19,715	$ 18,567	$ 18,663	$ 17,956
$ 1,104 68 72 198 - -	$ 696 76 77 216 - -	$ 730 72 45 219 500 -	$ 837 57 72 247 - -
1,442 5,502 185 172 236 220 -	1,065 5,503 171 194 242 217 -	1,566 5,405 184 182 236 198 -	1,213 5,404 163 180 241 194 -
7,757 11,958	7,392 11,175	7,771 10,892	7,395 10,561
$ 19,715	$ 18,567	$ 18,663	$ 17,956

Common stock issued

Common stock held in treasury

Net shares outstanding at balance sheet date

937	937	937	937
117	133	136	141
820	804	801	796

937	937	937	937
146	147	147	148
791	790	790	789

(a) The following summarizes our held for sale activity: Our U.K. business from March 31, 2019 to June 30, 2019 and our Atrush block in Kurdistan during March 31, 2019

Consolidated Statements of Cash Flows (YTD)

Marathon Oil Corporation

(In millions)

OPERATING ACTIVITIES: Net income (loss)

Adjustments to reconcile to net cash provided by operating activities:

Depreciation, depletion and amortization

Impairments

Exploratory dry well costs and unproved property impairments Net gain on disposal of assets

Loss on early extinguishment of debt Deferred income taxes

Net (gain) loss on derivative instruments Net settlements of derivative instruments Pension and other post retirement benefits, net Stock-based compensation

Equity method investments, net Changes in:

Current receivables Inventories

Current accounts payable and accrued liabilities Other current assets and liabilities

All other operating, net

Net cash provided by operating activities

INVESTING ACTIVITIES:

Additions to property, plant and equipment Additions to other assets

Acquisitions, net of cash acquired

Disposal of assets, net of cash transferred to the buyer Equity method investments - return of capital

All other investing, net

Net cash used in investing activities FINANCING ACTIVITIES:

Borrowings

Debt repayments

Debt extinguishment costs Purchases of common stock Dividends paid

All other financing, net

Net cash provided by (used in) financing activities Effect of exchange rate on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period (a)

Mar. 31 2019	June 30 2019	Sept. 30 2019	Dec. 31 2019
$ 174 554 6 49 (42) - (31) 91 22 (25) 14 14 (73) 4 (102) 14 (154)	$ 335 1,159 24 69 (34) - (33) 75 27 (41) 32 12 (95) 3 (158) 119 (182)	$ 500 1,781 24 85 (56) - (34) 28 41 (51) 45 26 (99) 4 (164) 108 (189)	$ 480 2,397 24 114 (50) 3 (34) 72 52 (52) 60 18 52 3 (187) (4) (199)
515 (615) 14 - 13 12 12	1,312 (1,262) 42 - 69 49 (27)	2,049 (1,934) 41 - (84) 51 2	2,749 (2,550) 36 (293) (76) 64 1
(564) - - - (30) (41) (1)	(1,129) - - - (266) (82) (2)	(1,924) - - - (296) (122) (4)	(2,818) 600 (600) (2) (362) (162) (9)
(72) 1 (120) 1,462	(350) 1 (166) 1,462	(422) - (297) 1,462	(535) - (604) 1,462
$ 1,342	$ 1,296	$ 1,165	$ 858

(50)

(34)

(52)

(187)

(4) (199)

(2,550)

(293) (76)

(2,818)

(600)

(2)

(362)

(162)

(9)

(535)

(604)

Mar. 31 2020	June 30 2020	Sept. 30 2020	Dec. 31 2020
$ (46) 644 97 22 (9) - (1) (202) 31 (11) 15 28 407 (6) (234) (16) (18)	$ (796) 1,241 97 40 (7) - (14) (132) 57 (31) 28 180 489 (5) (456) 46 (27)	$ (1,113) 1,795 98 63 (8) - (2) (131) 92 (35) 43 189 467 (5) (478) 83 (3)	$ (1,451) 2,316 144 159 (9) 28 (22) (116) 143 (43) 57 210 367 (4) (381) 75 -
701 (620) (1) - 3 7 -	710 (946) 12 3 9 7 -	1,055 (1,090) 15 (1) 9 7 -	1,473 (1,343) 15 (1) 18 7 1
(611) - - - (92) (40) 1	(915) - - - (92) (40) 1	(1,060) 400 - - (92) (40) (2)	(1,303) 400 (500) (27) (92) (64) (3)
(131) - (41) 858	(131) - (336) 858	266 - 261 858	(286) - (116) 858
$ 817	$ 522	$ 1,119	$ 742

$

(a) As of June 30, 2019 and March 31, 2019, cash and cash equivalents at end of period include $335 million and $323 million, respectively, of cash held for sale primarily related to our U.K. business.

(1,451)

(9)

(22) (116)

(43)

(4) (381)

(1,343)

(1)

(1,303)

(500)

(27)

(92)

(64)

(3)

(286)

(116)

Segment Income Summary Marathon Oil Corporation

(Dollars in millions)

Segment income (loss)

United States International

Segment income (loss)

Not allocated to segments - Corporate items:

Net interest and other

Other net periodic benefit costs (credits)

General and administrative

Other income and costs Income tax (provision) benefit

Adjustments for special items not allocated to segments

Net gain (loss) on disposal of assets Proved property impairments

Exploratory dry well costs, unproved property impairments and other

Goodwill impairment Pension settlement Pension curtailment

Unrealized gain (loss) on derivative instruments Reduction in workforce

Impairment of equity method investment Loss on early extinguishment of debt Other

Net income (loss)

1st Qtr 2019	2nd Qtr 2019	3rd Qtr 2019	4th Qtr 2019	Year 2019
$ 132 61	$ 215 96	$ 180 43	$ 148 33	$ 675 233
193 (49) 3 (58) 40 134 42 (6) - - - - (113) - - - (12)	311 (64) 1 (48) 1 (12) (8) (18) - - (2) - 11 - - - (11)	223 (64) 2 (43) (7) - 22 - - - - - 33 - - - (1)	181 (67) (6) (55) 1 1 (6) - - - (10) - (55) - - - (4)	908 (244) - (204) 35 123 50 (24) - - (12) - (124) - - - (28)
$ 174	$ 161	$ 165	$ (20)	$ 480

(244)

(204)

(24)

(12)

(124)

(28)

1st Qtr 2020	2nd Qtr 2020	3rd Qtr 2020	4th Qtr 2020	Year 2020
$ (20) (1)	$ (365) (6)	$ (135) 8	$ (33) 29	$ (553) 30
(21) (64) - (40) (2) 2 9 (2) - (95) (2) - 171 - - - (2)	(371) (69) 7 (53) 5 4 (2) - - - (14) 17 (96) (13) (152) - (13)	(127) (62) (6) (25) 6 (4) 1 (1) (6) - (9) - (36) (2) (18) - (28)	(4) (61) (2) (27) (4) - 1 (46) (78) - (5) - (66) (2) (1) (28) (15)	(523) (256) (1) (145) 5 2 9 (49) (84) (95) (30) 17 (27) (17) (171) (28) (58)
$ (46)	$ (750)	$ (317)	$ (338)	$ (1,451)

$

(553)

(523)

(256)

(1) (145)

(49)

(84) (95) (30)

(27)

(17)

(171)

(28)

(58)

$

(1,451)

United States Supplemental Financial Data

Marathon Oil Corporation

(In millions, except per BOE statistics)

Revenues from contracts with customers (a) Net gain on commodity derivatives

Other income

Less Costs and Expenses: Production

Shipping, handling and other operating (b) Exploration

DD&A

Taxes other than income General and administrative Income (loss) before taxes Income tax provision (benefit)

Segment income (loss)

Effective tax rate

Net sales volumes (mboed)

1st Qtr 2019	2nd Qtr 2019	3rd Qtr 2019	4th Qtr 2019	Year 2019
$ 1,062 22 1 139 140 59 514 74 29	$ 1,200 5 4 147 147 26 561 79 31	$ 1,172 14 3 147 137 22 589 80 34	$ 1,168 11 5 155 137 42 586 78 33	$ 4,602 52 13 588 561 149 2,250 311 127
130 (2)	218 3	180 -	153 5	681 6
$ 132 (2)% 297	$ 215 1% 330	$ 180 - % 339	$ 148 3% 328	$ 675 1% 323

1st Qtr 2020	2nd Qtr 2020	3rd Qtr 2020	4th Qtr 2020	Year 2020
$ 970 31 4 143 140 28 617 66 32	$ 462 26 3 114 91 26 569 30 32	$ 722 35 1 118 154 21 530 48 25	$ 770 51 7 119 149 22 495 49 26	$ 2,924 143 15 494 534 97 2,211 193 115
(21) (1)	(371) (6)	(138) (3)	(32) 1	(562) (9)
$ (20) 5% 338	$ (365) 2% 308	$ (135) 2% 297	$ (33) (3)% 280	$ (553) 2% 306

Costs and Expenses per BOE (c)

Production

Shipping, handling and other operating (d) Exploration

DD&A

Taxes other than income General and administrative

$ 5.21 4.49 2.20 19.27 2.78 1.11

$ 4.89 4.57 0.86 18.72 2.63 1.04

$ 4.75 4.10 0.72 18.90 2.57 1.05

$ 5.13 4.25 1.37 19.42 2.61 1.11

$ 4.98 4.34 1.26 19.07 2.64 1.08

$ 4.63 3.88 0.91 20.03 2.13 1.04

$ 4.09 2.86 1.20 20.28 1.07 1.13

$ 4.32 4.63 0.77 19.39 1.77 0.93

$ 4.62 4.94 0.84 19.25 1.91 1.01

$ 4.42 4.05 0.86 19.76 1.73 1.03

• (a) Includes marketing revenue.

• (b) Includes marketing expense.

• (c) Costs and expenses per BOE are based upon volumes sold.

• (d) Excludes marketing expense.

International Supplemental Financial Data

Marathon Oil Corporation

(In millions, except per BOE statistics)

Revenues from contracts with customers Income (loss) from equity method investments Other income

Less Costs and Expenses: Production

Shipping, handling and other operating DD&A

General and administrative Other net periodic benefit costs Income (loss) before taxes Income tax provision (benefit)

Segment income (loss)

Effective tax rate

Net sales volumes (mboed)

1st Qtr 2019	2nd Qtr 2019	3rd Qtr 2019	4th Qtr 2019	Year 2019
$ 138 11 3 50 13 34 7 (2)	$ 181 31 2 46 10 38 8 (1)	$ 77 21 2 16 1 25 5 -	$ 65 24 2 14 2 24 5 -	$ 461 87 9 126 26 121 25 (3)
50 (11)	113 17	53 10	46 13	262 29
$ 61 (22)% 88	$ 96 15 % 107	$ 43 19 % 88	$ 33 28 % 83	$ 233 11 % 91

1st Qtr 2020	2nd Qtr 2020	3rd Qtr 2020	4th Qtr 2020	Year 2020
$ 54 (12) 2 17 3 21 4 -	$ 28 - 2 15 1 22 3 -	$ 39 8 1 11 1 19 3 -	$ 52 14 2 16 3 20 4 -	$ 173 10 7 59 8 82 14 -
(1) -	(11) (5)	14 6	25 (4)	27 (3)
$ (1) -% 81	$ (6) 45 % 84	$ 8 43 % 71	$ 29 (16)% 73	$ 30 (11)% 77

Costs and Expenses per BOE (a)

Production

Shipping, handling and other operating DD&A

General and administrative

$ 6.22 1.68 4.22 0.86

$ 4.72 0.96 3.92 0.84

$ 1.98 0.08 3.15 0.55

$ 1.82 0.34 3.04 0.64

$ 3.76 0.78 3.61 0.73

$ 2.35 0.43 2.86 0.53

$ 1.88 0.09 2.86 0.42

$ 1.76 0.15 2.89 0.41

$ 2.49 0.51 2.95 0.57

$ 2.12 0.29 2.89 0.48

Equatorial Guinea

EG - Income (loss) from equity method investments

EG - Net income (loss) excluding equity method investments

EG Total Net Income (Loss)

EG Net Income before DD&A, Tax, and Exploration (EBITDAX) (b)

$ 11 6	$ 31 44	$ 21 22	$ 24 17	$ 87 89
$ 17	$ 75	$ 43	$ 41	$ 176
$ 69	$ 142	$ 101	$ 96	$ 408

$ (12) 9	$ - (5)	$ 8 7	$ 14 12	$ 10 23
$ (3)	$ (5)	$ 15	$ 26	$ 33
$ 34	$ 22	$ 48	$ 59	$ 163

• (a) Costs and expenses per BOE are based upon volumes sold.

• (b) See "Non-GAAP Reconciliations", for further detail.

Non-GAAP Reconciliations Marathon Oil Corporation

Marathon Oil Corporation ("Marathon") supplements its use of GAAP financial measures with non-GAAP financial measures as described on the following pages:

(In millions)

Net income (loss)

Adjustments for special items (pre-tax):

Net (gain) loss on disposal of assets Proved property impairments

Exploratory dry well costs, unproved property impairments and other

Goodwill impairment Pension settlement Pension curtailment

Unrealized (gain) loss on derivative instruments Reduction in workforce

Impairment of equity method investment Loss on early extinguishment of debt Other

Benefit for income taxes related to special items Adjustments for special items

Adjusted net income (loss) (a)

1st Qtr 2019	2nd Qtr 2019	3rd Qtr 2019	4th Qtr 2019	Year 2019
$ 174 (42) 6 - - - - 113 - - - 12 (7)	$ 161 8 18 - - 2 - (11) - - - 11 -	$ 165 (22) - - - - - (33) - - - 1 -	$ (20) 6 - - - 10 - 55 - - - 4 -	$ 480 (50) 24 - - 12 - 124 - - - 28 (7)
82	28	(54)	75	131
$ 256	$ 189	$ 111	$ 55	$ 611

(50)

(7)

1st Qtr 2020	2nd Qtr 2020	3rd Qtr 2020	4th Qtr 2020	Year 2020
$ (46) (9) 2 - 95 2 - (171) - - - 2 -	$ (750) 2 - - - 14 (17) 96 13 152 - 13 -	$ (317) (1) 1 6 - 9 - 36 2 18 - 28 (1)	$ (338) (1) 46 78 - 5 - 66 2 1 28 15 -	$ (1,451) (9) 49 84 95 30 (17) 27 17 171 28 58 (1)
(79)	273	98	240	532
$ (125)	$ (477)	$ (219)	$ (98)	$ (919)

$

(1,451)

(9)

(17)

(1)

$

(919)

(In millions, except per share data)

Per common share data:

Diluted:

Weighted average shares (millions)

Adjusted net income (loss) (a)

Adjusted net income (loss) per share (a)

1st Qtr 2019	2nd Qtr 2019	3rd Qtr 2019	4th Qtr 2019	Year 2019
$ $ 820 256 0.31	$ $ 814 189 0.23	$ $ 803 111 0.14	$ $ 800 55 0.07	$ $ 810 611 0.75

1st Qtr 2020	2nd Qtr 2020	3rd Qtr 2020	4th Qtr 2020	Year 2020
$ $ 794 (125) (0.16)	$ $ 790 (477) (0.60)	$ $ 790 (219) (0.28)	790 $ $ (98) (0.12)	$ $ 792 (919) (1.16)

(1.16)

$ $

(919)

(a) Non-GAAP financial measure.

Our presentation of adjusted net income (loss) and adjusted net income (loss) per share is a non-GAAP measure. Adjusted net income (loss) is defined as net income (loss) adjusted for gains/losses on dispositions, impairments of proved and certain unproved properties, goodwill and equity method investments, certain exploration expenses relating to a strategic decision to exit conventional exploration, unrealized derivative gain/loss on commodity and interest rate derivative instruments, effects of pension settlements and curtailments and other items that could be considered "non-operating" or "non-core" in nature. Management believes this is useful to investors as another tool to meaningfully represent our operating performance and to compare Marathon to certain competitors. Adjusted net income (loss) and adjusted net income (loss) per share should not be considered in isolation or as an alternative to, or more meaningful than, net income (loss) or net income (loss) per share as determined in accordance with U.S. GAAP.

Non-GAAP Reconciliations Marathon Oil Corporation

(In millions)

Cash additions to Property, Plant, and Equipment

Change in working capital associated with PP&E

Exploration costs other than well costs

M&S Inventory and other

Additions to other assets

Total Capital Expenditures (a)

1st Qtr 2020	2nd Qtr 2020	3rd Qtr 2020	4th Qtr 2020	Year 2020
$ 620 (52) 6 4 1	$ 326 (187) 8 3 (13)	$ 144 33 4 (2) (3)	$ 253 14 4 (1) -	$ 1,343 (192) 22 4 (15)
$ 579	$ 137	$ 176	$ 270	$ 1,162

(192)

(15)

(In millions)

Free Cash Flow

Net cash flow provided by operating activities Adjustments:

Changes in working capital Exploration costs other than well costs Capital expenditures

EG LNG return of capital and other Free Cash Flow (a)

1st Qtr 2020	2nd Qtr 2020	3rd Qtr 2020	4th Qtr 2020	Year 2020
$ 701 (151) 6 (579) 1	$ 9 77 8 (137) -	$ 345 7 4 (176) -	$ 418 10 4 (270) -	$ 1,473 (57) 22 (1,162) 1
$ (22)	$ (43)	$ 180	$ 162	$ 277

(1,162)

(57)

(a) Non-GAAP financial measure.

Our presentation of total capital expenditures is a non-GAAP measure. Total capital expenditures is defined as cash additions to property, plant and equipment adjusted for the change in working capital associated with property, plant and equipment, exploration costs other than well costs, M&S inventory and other, and additions to other assets. Management believes this is useful to investors as an indicator of Marathon's commitment to capital expenditure discipline by eliminating differences caused by the timing of certain working capital and other items. Total capital expenditures should not be considered in isolation or as an alternative to, or more meaningful than, cash additions to property, plant and equipment as determined in accordance with U.S. GAAP.

Our presentation of free cash flow is a non-GAAP measure. Free cash flow before dividend ("free cash flow" is defined as net cash provided by operating activities adjusted for working capital, exploration costs (other than well costs), capital expenditures, and EG LNG return of capital and other. Management believes this is useful to investors as a measure of Marathon's ability to fund its capital expenditure programs, service debt, and other distributions to stockholders. Free cash flow should not be considered in isolation or as an alternative to, or more meaningful than, net cash provided by operating activities as determined in accordance with U.S. GAAP.

Non-GAAP Reconciliations Marathon Oil Corporation

(In millions) Cash Flows (QTD)	Mar. 31 2019	June 30 2019	Sept. 30 2019	Dec. 31 2019	Mar. 31 2020	June 30 2020	Sept. 30 2020	Dec. 31 2020
Changes in Working Capital Current receivables Inventories Current accounts payable and accrued expenses Other current assets and liabilities Total changes in operating working capital Change in M&S Inventory Total changes in operating working capital less M&S inventory Changes in investing working capital Total changes in working capital Net cash provided by operating activities Total changes in operating working capital Net cash provided by operating activities before changes in operating working capital (a) Exploration costs other than well costs Net cash provided by operating activities before changes in operating working capital and exploration costs (a)	$ (73) 4 (102) 14	$ (22) (1) (56) 105	$ (4) 1 (6) (11)	$ 151 (1) (23) (112)	$ 407 (6) (234) (16)	$ 82 1 (222) 62	$ (22) - (22) 37	$ (100) 1 97 (8)
$ (157) 4	$ 26 6	$ (20) 1	$ 15 1	$ 151 (4)	$ (77) (3)	$ (7) 2	$ (10) 1
(161) (1)	20 54	(21) 3	14 (15)	155 (52)	(74) (187)	(9) 33	(11) 14
$ (162)	$ 74	$ (18)	$ (1)	$ 103	$ (261)	$ 24	$ 3
$ 515 (157)	$ 797 26	$ 737 (20)	$ 700 15	$ 701 151	$ 9 (77)	$ 345 (7)	$ 418 (10)
$ 672 (10)	$ 771 (6)	$ 757 (6)	$ 685 (13)	$ 550 (6)	$ 86 (8)	$ 352 (4)	$ 428 (4)
$ 682	$ 777	$ 763	$ 698	$ 556	$ 94	$ 356	$ 432

$ (100)

(8)

$ (10)

(11)

(10)

(4)

(a) Non-GAAP financial measure.

Our presentation of net cash provided by operations before changes in operating working capital and net cash provided by operations before changes in operating working capital and exploration costs are non-GAAP measures. Management believes this is useful to investors as an indicator of Marathon's ability to generate cash quarterly or year-to-date by eliminating differences caused by the timing of certain working capital items. Net cash provided by operations before changes in working capital and net cash provided by operations before changes in working capital and exploration costs should not be considered in isolation or as an alternative to, or more meaningful than, net cash provided by operating activities as determined in accordance with U.S. GAAP.

(In millions)

Equatorial Guinea EBITDAX

EG - Income (loss) from equity method investments

EG - Net income (loss) excluding equity method investments

EG Total Net Income (Loss)

Adjustments to EG total net income (loss):

DD&A

Tax

EG Net Income before DD&A, Tax, and Exploration (EBITDAX) (a)

1st Qtr 2019	2nd Qtr 2019	3rd Qtr 2019	4th Qtr 2019	Year 2019
$ 11 6	$ 31 44	$ 21 22	$ 24 17	$ 87 89
17 44 8	75 44 23	43 41 17	41 40 15	176 169 63
$ 69	$ 142	$ 101	$ 96	$ 408

1st Qtr 2020	2nd Qtr 2020	3rd Qtr 2020	4th Qtr 2020	Year 2020
$ (12) 9	$ - (5)	$ 8 7	$ 14 12	$ 10 23
(3) 37 -	(5) 30 (3)	15 29 4	26 28 5	33 124 6
$ 34	$ 22	$ 48	$ 59	$ 163

(a) Non-GAAP financial measure.

Our presentation of E.G. EBITDAX is a non-GAAP measure. E.G. EBITDAX is defined as E.G. net income (loss) excluding net interest expense, taxes, depreciation, depletion and amortization ("DD&A"), and exploration. Management believes this is useful to investors as a measure of E.G.'s ability to contribute to Marathon's funding for its capital expenditure programs as well as for dividend payments, servicing debt, and other distributions to stockholders. E.G. EBITDAX should not be considered in isolation or as an alternative to, or more meaningful than, E.G. net income (loss), which is a component of our International segment income (loss) as determined in accordance with U.S. GAAP.

Non-GAAP Reconciliations Marathon Oil Corporation

(In millions)

Net income (loss)

Adjustments to net income (loss):

DD&A

Tax Exploration

Net interest and other

EBITDAX

EBITDAX special items adjustments:

Net (gain) loss on disposal of assets Proved property impairments Goodwill impairment Pension settlement Pension curtailment

Unrealized (gain) loss on derivative instruments Reduction in workforce

Impairment of equity method investment Loss on early extinguishment of debt Other

Adjustments for special items

Adjusted EBITDAX (a)

1st Qtr 2019	2nd Qtr 2019	3rd Qtr 2019	4th Qtr 2019	Year 2019	1st Qtr 2020	2nd Qtr 2020	3rd Qtr 2020	4th Qtr 2020	Year 2020
$ 174 554 (147) 59 49	$ 161 605 32 26 64	$ 165 622 10 22 64	$ (20) 616 17 42 67	$ 480 2,397 (88) 149 244	$ (46) 644 (3) 28 64	$ (750) 597 (15) 26 69	$ (317) 554 7 27 62	$ (338) 521 (3) 100 61	$ (1,451) 2,316 (14) 181 256
689 (42) 6 - - - 113 - - - 12 89	888 8 18 - 2 - (11) - - - 11 28	883 (22) - - - - (33) - - - 1 (54)	722 6 - - 10 - 55 - - - 4 75	3,182 (50) 24 - 12 - 124 - - - 28 138	687 (9) 2 95 2 - (171) - - - 2 (79)	(73) 2 - - 14 (17) 96 13 152 - 13 273	333 (1) 1 - 9 - 36 2 18 - 28 93	341 (1) 46 - 5 - 66 2 1 28 16 163	1,288 (9) 49 95 30 (17) 27 17 171 28 59 450
$ 778	$ 916	$ 829	$ 797	$ 3,320	$ 608	$ 200	$ 426	$ 504	$ 1,738

$

(1,451)

(14)

(9)

(17)

(a) Non-GAAP financial measure.

Our presentation of Adjusted EBITDAX is a non-GAAP measure. Adjusted EBITDAX is defined as net income (loss) excluding net interest expense, taxes, DD&A, and exploration, further adjusted for gains/losses on dispositions, impairments of proved and certain unproved properties, goodwill and equity method investments, unrealized derivative gain/loss on commodity and interest rate derivative instruments, effects of pension settlements and curtailments and other items that could be considered "non-operating" or "non-core" in nature. Management believes this provides useful information to investors in evaluating our operating and financial performance because it eliminates the impact of certain items affecting comparability from period to period. Adjusted EBITDAX should not be considered in isolation or as an alternative to, or more meaningful than, net income (loss) as determined in accordance with U.S. GAAP.