==============================================================================

                               UNITED STATES
                     SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549
                               -------------

                                FORM 10-K/A
                              AMENDMENT NO. 1
                     FOR ANNUAL AND TRANSITION REPORTS
                  PURSUANT TO SECTIONS 13 OR 15(D) OF THE
                      SECURITIES EXCHANGE ACT OF 1934

    (Mark One)
    |X|  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2004
                                     OR

    |_|  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

          For the transition period from _________ to ___________


                       Commission file number 1-2918

                                ASHLAND INC.
                          (a Kentucky corporation)
                           I.R.S. No. 61-0122250

                        50 E. RiverCenter Boulevard
                                P.O. Box 391
                       Covington, Kentucky 41012-0391
                      Telephone Number (859) 815-3333

              Securities Registered Pursuant to Section 12(b):

                                                       Name of each exchange
            Title of each class                         on which registered
            -------------------                         -------------------
Common Stock, par value $1.00 per share               New York Stock Exchange
                                                    and Chicago Stock Exchange
Rights to purchase Series A Participating             New York Stock Exchange
     Cumulative Preferred Stock                     and Chicago Stock Exchange

      Securities Registered Pursuant to Section 12(g) of the Act: None

     Indicate  by check  mark  whether  the  registrant  (1) has  filed all
reports  required  to be filed  by  Section  13 or 15(d) of the  Securities
Exchange  Act of 1934 during the  preceding  12 months (or for such shorter
period that the Registrant was required to file such reports),  and (2) has
been subject to such filing  requirements  for the past 90 days. Yes |X| No
|_|

     Indicate by check mark if disclosure of delinquent  filers pursuant to
Item  405 of  Regulation  S-K is not  contained  herein,  and  will  not be
contained,  to the best of Registrant's  knowledge,  in definitive proxy or
information  statements  incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. |X|

     Indicate by check mark whether the Registrant is an accelerated  filer
(as defined in Rule 12b-2 of the Act). Yes |X| No |_|

     At March 31, 2004, based on the New York Stock Exchange closing price,
the aggregate  market value of voting stock held by  non-affiliates  of the
Registrant was  approximately  $3,249,782,427.  In determining this amount,
the  Registrant  has assumed that its directors and executive  officers are
affiliates.  Such assumption  shall not be deemed  conclusive for any other
purpose.

     At November 30, 2004,  there were  71,941,455  shares of  Registrant's
common stock outstanding.

                    Documents Incorporated by Reference

     Portions of  Registrant's  definitive  Proxy Statement for its January
27, 2005 Annual Meeting of Shareholders  are incorporated by reference into
Part III.

<PAGE>
                              EXPLANATORY NOTE

     This amendment to the Annual Report on Form 10-K/A for the fiscal year
ended  September  30, 2004 of Ashland  Inc.  ("Ashland")  is being filed to
include the audited financial  statements of Marathon Ashland Petroleum LLC
("MAP")  for the fiscal  year ended  December  31, 2004 as required by Rule
3-09 of  Regulation  S-X.  Ashland  has a 38% equity  interest  in MAP.  In
accordance  with Rule 12b-15 under the Securities and Exchange Act of 1934,
as amended,  the text of the amended  item is set forth in its  entirety in
the pages attached hereto.

     A consent of  PricewaterhouseCoopers  LLP, independent accountants for
MAP, is being filed as an exhibit hereto.

<PAGE>


                                  PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

     (A) DOCUMENTS FILED AS PART OF THIS REPORT

     (1) and (2) Financial Statements and Financial Schedule

     The  consolidated  financial  statements  and  financial  schedule  of
Ashland  presented  in this  annual  report on Form 10-K are  listed in the
index on page F-1.

     Audited  financial  statements  of  Marathon  Ashland  Petroleum  LLC.
Financial  statement  schedules are omitted because they are not applicable
as the  required  information  is  contained  in the  applicable  financial
statements or notes thereto.

     (3) Exhibits
         2.1*         Master  Agreement  dated as of March 18, 2004,  among
                      Ashland  Inc.,  ATB Holdings  Inc.,  EXM LLC, New EXM
                      Inc., Marathon Oil Corporation, Marathon Oil Company,
                      Marathon  Domestic LLC and Marathon Ashland Petroleum
                      LLC (filed as  Exhibit  2.1 to  Ashland's  Form 8-K/A
                      dated March 18, 2004, and filed November 5, 2004, and
                      incorporated herein by reference).

         2.2*         Tax Matters  Agreement  dated March 18,  2004,  among
                      Ashland  Inc.,  ATB Holdings  Inc.,  EXM LLC, New EXM
                      Inc., Marathon Oil Corporation, Marathon Oil Company,
                      Marathon  Domestic LLC and Marathon Ashland Petroleum
                      LLC (filed as  Exhibit  2.2 to  Ashland's  Form 8-K/A
                      dated March 18, 2004, and filed November 5, 2004, and
                      incorporated herein by reference).

         2.3*         Assignment  and Assumption  Agreement  (VIOC Centers)
                      dated as of March 18, 2004,  between Ashland Inc. and
                      ATB Holdings Inc.  (filed as Exhibit 2.3 to Ashland's
                      Form 8-K/A dated March 18, 2004,  and filed  November
                      5, 2004, and incorporated herein by reference).

         2.4*         Assignment and Assumption Agreement (Maleic Business)
                      dated as of March 18, 2004,  between Ashland Inc. and
                      ATB Holdings Inc.  (filed as Exhibit 2.4 to Ashland's
                      Form 8-K/A dated March 18, 2004,  and filed  November
                      5, 2004, and incorporated herein by reference).

         2.5*         Amendment  No. 2 dated as of March 18,  2004,  to the
                      Amended  and  Restated  Limited   Liability   Company
                      Agreement  dated as of December 31, 1998, of Marathon
                      Ashland  Petroleum  LLC, by and between  Ashland Inc.
                      and  Marathon  Oil  Company  (filed as Exhibit 2.5 to
                      Ashland's  Form 8-K/A dated March 18, 2004, and filed
                      November  5,  2004,   and   incorporated   herein  by
                      reference).

         3.1          Third  Restated  Articles  of  Incorporation  of
                      Ashland (filed as Exhibit 3(i) to Ashland's Form 10-Q
                      for the quarter ended June 30, 2002, and incorporated
                      herein by reference).

         3.2          By-laws of Ashland, effective as of November 15, 2002
                      (filed as Exhibit 3.2 to Ashland's  annual  report on
                      Form 10-K for the  fiscal  year ended  September  30,
                      2002, and incorporated herein by reference).

         4.1          Ashland  agrees to provide the SEC, upon request,
                      copies of instruments  defining the rights of holders
                      of   long-term   debt  of  Ashland  and  all  of  its
                      subsidiaries for which consolidated or unconsolidated
                      financial  statements  are  required to be filed with
                      the SEC.

         4.2          Indenture,  dated as of August 15,  1989,  as amended
                      and restated as of August 15, 1990,  between  Ashland
                      and Citibank,  N.A., as Trustee (filed as Exhibit 4.2
                      to  Ashland's  annual  report  on Form  10-K  for the
                      fiscal   year   ended   September   30,   2001,   and
                      incorporated herein by reference).

         4.3          Indenture,  dated as of  September  7, 2001,  between
                      Ashland  and  U.S.  Bank  National  Association,   as
                      Trustee  (filed as Exhibit  4.3 to  Ashland's  annual
                      report  on  Form  10-K  for  the  fiscal  year  ended
                      September  30,  2001,  and  incorporated   herein  by
                      reference).

         4.4          Rights Agreement,  dated as of May 16, 1996,  between
                      Ashland Inc. and the Rights Agent, together with Form
                      of  Right  Certificate   (filed  as  Exhibit  4.4  to
                      Ashland's  annual  report on Form 10-K for the fiscal
                      year  ended  September  30,  2001,  and  incorporated
                      herein by reference).

         4.5          Amendment No. 1 dated as of March 18, 2004, to Rights
                      Agreement  dated as of May 16, 1996,  between Ashland
                      Inc.   and  Rights  Agent  (filed  as  Exhibit  4  to
                      Ashland's  Form 10-Q for the quarter  ended March 31,
                      2004, and incorporated herein by reference).
<PAGE>

     The following  Exhibits 10.1 through 10.16 are  compensatory  plans or
arrangements  or  management  contracts  required  to be filed as  exhibits
pursuant to Item 601(b)(10)(ii)(A) of Regulation S-K.

         10.1         Amended  Stock  Incentive  Plan for Key  Employees of
                      Ashland Inc. and its  Subsidiaries  (filed as Exhibit
                      10.1 to Ashland's  annual report on Form 10-K for the
                      fiscal   year   ended   September   30,   1999,   and
                      incorporated herein by reference).

         10.2         Ashland  Inc.  Deferred  Compensation  Plan for
                      Non-Employee  Directors  (filed  as  Exhibit  10.2 to
                      Ashland's  Form 10-Q for the  quarter  ended June 30,
                      2003, and incorporated herein by reference).

         10.3         Ashland Inc.  Deferred  Compensation Plan (filed
                      as  Exhibit  10.1  to  Ashland's  Form  10-Q  for the
                      quarter ended June 30, 2003, and incorporated  herein
                      by reference).

         10.4         Eleventh    Amended   and   Restated   Ashland   Inc.
                      Supplemental   Early   Retirement  Plan  for  Certain
                      Employees  (filed as Exhibit 10.3 to  Ashland's  Form
                      10-Q  for  the  quarter  ended  June  30,  2003,  and
                      incorporated herein by reference).

         10.5         Ashland  Inc.  Salary  Continuation  Plan  (filed  as
                      Exhibit 10.5 to Ashland's  annual report on Form 10-K
                      for the fiscal year ended  September  30,  2002,  and
                      incorporated herein by reference).

         10.6         Form of Ashland Inc.  Executive  Employment  Contract
                      between  Ashland  Inc.  and  certain   executives  of
                      Ashland  (filed as Exhibit 10.6 to  Ashland's  annual
                      report  on  Form  10-K  for  the  fiscal  year  ended
                      September  30,  2002,  and  incorporated   herein  by
                      reference).

         10.7         Form of  employment  agreement  between  Ashland
                      Inc. and an executive officer.

         10.8         Form  of   Indemnification   Agreement  between
                      Ashland  Inc.  and members of its Board of  Directors
                      (filed as Exhibit 10.7 to Ashland's  annual report on
                      Form 10-K for the  fiscal  year ended  September  30,
                      2003, and incorporated herein by reference).

         10.9         Ashland Inc. Nonqualified Excess Benefit Pension
                      Plan (filed as Exhibit  10.4 to  Ashland's  Form 10-Q
                      for the quarter ended June 30, 2003, and incorporated
                      herein by reference).

         10.10        Ashland  Inc.  Directors'  Charitable  Award  Program
                      (filed as Exhibit 10.11 to Ashland's annual report on
                      Form 10-K for the  fiscal  year ended  September  30,
                      2002, and incorporated herein by reference).

         10.11        Ashland  Inc.  1993 Stock  Incentive  Plan  (filed as
                      Exhibit 10.11 to Ashland's annual report on Form 10-K
                      for the fiscal year ended  September  30,  2000,  and
                      incorporated herein by reference).

         10.12        Ashland  Inc.  1997 Stock  Incentive  Plan  (filed as
                      Exhibit 10.14 to Ashland's annual report on Form 10-K
                      for the fiscal year ended  September  30,  2002,  and
                      incorporated herein by reference).

         10.13        Amended and  Restated  Ashland  Inc.  Incentive  Plan
                      (filed as Exhibit 10.1 to Ashland's Form 10-Q for the
                      quarter ended June 30, 2004, and incorporated  herein
                      by reference).

         10.14        Form of Notice granting Stock Appreciation Rights Awards.

         10.15        Form of Notice granting Restricted Stock Awards.

         10.16        Form of Notice granting Nonqualified Stock Option Awards.

         10.17        Amended and Restated Limited  Liability Company
                      Agreement  dated as of December 31, 1998, of Marathon
                      Ashland Petroleum LLC by and between Ashland Inc. and
                      Marathon Oil Company.

         10.18**      Amendment  No.  1 dated  as March  17,  2004,  to the
                      Amended  and  Restated  Limited   Liability   Company
                      Agreement  dated as of December 31, 1998, of Marathon
                      Ashland  Petroleum  LLC  (filed  as  Exhibit  10.2 to
                      Ashland's  Form 10-Q for the quarter  ended March 31,
                      2004, and incorporated herein by reference).

         10.19        Put/Call Registration Rights and Standstill Agreement,
                      dated as of January 1, 1998, including Amendment No. 1
                      thereto, dated as of December 31, 1998, among Marathon Oil
                      Company, USX Corporation, Ashland Inc. and Marathon
                      Ashland Petroleum LLC.

         10.20        Amendment  No. 2 dated as of March 17,  2004,  to the
                      Put/Call Registration Rights and Standstill Agreement
                      dated as of  January  1,  1998,  among  Marathon  Oil
                      Company,  USX Corporation,  Ashland Inc. and Marathon
                      Ashland  Petroleum  LLC  (filed  as  Exhibit  10.1 to
                      Ashland's  Form 10-Q for the quarter  ended March 31,
                      2004, and incorporated herein by reference).

         10.21        Three-Year, $250  Million  Revolving  Credit Agreement
                      dated as of April 2, 2004.
<PAGE>

         10.22        364-Day, $100  Million   Revolving   Credit Agreement
                      dated as of April 2, 2004.

         11           Computation of Earnings Per Share  (appearing on page
                      F-9 of this annual report on Form 10-K).

         12           Computation of Ratio of Earnings to Fixed Charges.

         21           List of Subsidiaries.

         23.1         Consent of Independent Registered Public Accounting Firm.

         23.2***      Consent of PricewaterhouseCoopers LLP.

         24           Power of Attorney,  including  resolutions  of the
                      Board of Directors.

         31.1***      Certification  of  James J.  O'Brien,  Chief
                      Executive Officer of Ashland, pursuant to Section 302
                      of the Sarbanes-Oxley Act of 2002.

         31.2***      Certification  of  J.  Marvin  Quin,  Chief
                      Financial Officer of Ashland, pursuant to Section 302
                      of the Sarbanes-Oxley Act of 2002.

         32***        Certification  of James J. O'Brien,  Chief  Executive
                      Officer  of  Ashland,   and  J.  Marvin  Quin,  Chief
                      Financial Officer of Ashland, pursuant to Section 906
                      of the Sarbanes-Oxley Act of 2002.

         99.1         Consent of Tillinghast-Towers Perrin.

         99.2         Consent of Hamilton, Rabinovitz & Alschuler, Inc.

     *Ashland  agrees to  supplement  this filing and furnish a copy of any
     omitted  schedule  to  the  United  States   Securities  and  Exchange
     Commission upon request.

     **Portions of this document have received confidential treatment.

     ***Filed herewith.

     Upon written or oral  request,  a copy of the above  exhibits  will be
     furnished at cost.



<PAGE>




                                 SIGNATURES

     Pursuant to the  requirements of Section 13 or 15(d) of the Securities
Exchange  Act of 1934,  the  registrant  has duly  caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

                                ASHLAND INC.
                                (Registrant)

                               By:
                               /s/ J. Marvin Quin
                               ---------------------------------
                               J. Marvin Quin
                               Senior Vice President and Chief
                               Financial Officer

                               March 15, 2005


<PAGE>


                               EXHIBIT INDEX

  23.2           Consent of PricewaterhouseCoopers LLP.

  31.1           Certificate  of James J.  O'Brien,  Chief  Executive
                 Officer of Ashland, pursuant to Section 302 of the
                 Sarbanes-Oxley Act of 2002.

  31.2           Certificate  of  J.  Marvin  Quin,  Chief  Financial
                 Officer  of  Ashland,  pursuant  to  Section  302  of  the
                 Sarbanes-Oxley Act of 2002.

  32             Certificate of James J. O'Brien, Chief Executive Officer of
                 Ashland, and J. Marvin Quin, Chief Financial Officer of
                 Ashland, pursuant to Section 906 of the Sarbanes-Oxley Act of
                 2002.

<PAGE>

              MARATHON ASHLAND PETROLEUM LLC AND SUBSIDIARIES



                 AUDITED CONSOLIDATED FINANCIAL STATEMENTS

                             December 31, 2004




                                  CONTENTS

<TABLE>
<CAPTION>

<S>                                                                                                                        <C>
                                                                                                                           PAGE

REPORT OF INDEPENDENT AUDITORS:                                                                                             1


CONSOLIDATED FINANCIAL STATEMENTS:

     CONSOLIDATED STATEMENTS OF INCOME -----------------------------------------------------------------------              2
     CONSOLIDATED BALANCE SHEETS -----------------------------------------------------------------------------              3
     CONSOLIDATED STATEMENTS OF CASH FLOWS -------------------------------------------------------------------              4
     CONSOLIDATED STATEMENTS OF MEMBERS' CAPITAL -------------------------------------------------------------              5


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:

     NOTE A     -  BUSINESS DESCRIPTION AND BASIS OF PRESENTATION --------------------------------------------              6
     NOTE B     -  SUMMARY OF PRINCIPAL ACCOUNTING POLICIES --------------------------------------------------              7
     NOTE C     -  NEW ACCOUNTING STANDARDS ------------------------------------------------------------------             11
     NOTE D     -  RELATED PARTY TRANSACTIONS ----------------------------------------------------------------             12
     NOTE E     -  OTHER ITEMS -------------------------------------------------------------------------------             14
     NOTE F     -  PENSIONS AND OTHER POSTRETIREMENT BENEFITS ------------------------------------------------             15
     NOTE G     -  INCOME TAXES ------------------------------------------------------------------------------             18
     NOTE H     -  INVENTORIES -------------------------------------------------------------------------------             18
     NOTE I     -  INVESTMENTS AND LONG-TERM RECEIVABLES -----------------------------------------------------             18
     NOTE J     -  PROPERTY, PLANT AND EQUIPMENT -------------------------------------------------------------             20
     NOTE K     -  GOODWILL ----------------------------------------------------------------------------------             20
     NOTE L     -  INTANGIBLE ASSETS -------------------------------------------------------------------------             20
     NOTE M     -  SHORT-TERM DEBT ---------------------------------------------------------------------------             21
     NOTE N     -  LONG-TERM DEBT ----------------------------------------------------------------------------             21
     NOTE O     -  ASSET RETIREMENT OBLIGATIONS --------------------------------------------------------------             21
     NOTE P     -  SUPPLEMENTAL CASH FLOW INFORMATION --------------------------------------------------------             21
     NOTE Q     -  LEASES ------------------------------------------------------------------------------------             22
     NOTE R     -  DERIVATIVE INSTRUMENTS --------------------------------------------------------------------             22
     NOTE S     -  FAIR VALUE OF FINANCIAL INSTRUMENTS -------------------------------------------------------             23
     NOTE T     -  CONTINGENCIES AND COMMITMENTS -------------------------------------------------------------             23
     NOTE U     -  ACCOUNTING STANDARDS NOT YET ADOPTED ------------------------------------------------------             25


</TABLE>


<PAGE>







PRICEWATERHOUSECOOPERS LLP
                                                  PricewaterhouseCoopers LLP
                                                  1201 Louisiana, Suite 2900
                                                  Houston, TX  77002-5678






                       REPORT OF INDEPENDENT AUDITORS






To the Board of Managers of
Marathon Ashland Petroleum LLC:

In our  opinion,  the  accompanying  consolidated  balance  sheets  and the
related  consolidated  statements of income, of members' capital,  and cash
flows present fairly, in all material  respects,  the financial position of
Marathon Ashland Petroleum LLC and its subsidiaries ("MAP") at December 31,
2004 and 2003, and the results of their operations and their cash flows for
each  of the  three  years  in the  period  ended  December  31,  2004,  in
conformity  with  accounting  principles  generally  accepted in the United
States of America.  These financial  statements are the  responsibility  of
MAP's  management.  Our  responsibility  is to  express an opinion on these
financial  statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards  generally accepted in the
United States of America.  Those standards require that we plan and perform
the  audit to obtain  reasonable  assurance  about  whether  the  financial
statements are free of material misstatement.  An audit includes examining,
on a test basis,  evidence  supporting  the amounts and  disclosures in the
financial   statements,   assessing  the  accounting  principles  used  and
significant  estimates  made by  management,  and  evaluating  the  overall
financial  statement  presentation.  We believe  that our audits  provide a
reasonable basis for our opinion.



/s/ PricewaterhouseCoopers LLP

March 11, 2005




                                     1
<PAGE>



CONSOLIDATED STATEMENTS OF INCOME (Dollars in Millions)


MARATHON ASHLAND PETROLEUM LLC AND SUBSIDIARIES

<TABLE>
<CAPTION>
                                                                                         Year Ended December 31
                                                                          -----------------------------------------------------
                                                                               2004               2003                2002
                                                                          -------------       -------------       -------------
<S>                                                                       <C>                 <C>                 <C>
REVENUES AND OTHER INCOME:
       Sales and other operating revenues (including consumer
              excise taxes)                                               $     33,437        $     26,572        $     21,198
       Revenues from matching buy/sell transactions                              8,997               6,936               4,191
       Sales to related parties - Note D                                         1,046                 912                 866
       Revenues from related party matching buy/sell transactions -
              Note D                                                               150                  94                 144
       Income from equity method investments                                        81                  82                  48
       Net gains on disposal of assets                                              33                  42                  40
       Other income                                                                 44                  30                  26
                                                                          ------------       -------------       -------------

              Total revenues and other income                                   43,788              34,668              26,513
                                                                          ------------       -------------       -------------

COSTS AND EXPENSES:
       Cost of revenues (excludes items shown below)                            27,016              20,718              15,798
       Purchases related to matching buy/sell transactions                       8,883               6,960               4,207
       Purchases from related parties - Note D                                     694                 711                 746
       Purchases from related party matching buy/sell
              transactions - Note D                                                145                  89                 139
       Consumer excise taxes                                                     4,463               4,285               4,250
       Depreciation and amortization                                               412                 372                 365
       Selling, general and administrative expenses                                623                 581                 489
       Other taxes                                                                 142                 137                 138
       Inventory market valuation credits                                           --                  --                 (77)
                                                                          -------------       -------------       -------------

              Total costs and expenses                                          42,378              33,853              26,055
                                                                          -------------       -------------       -------------

INCOME FROM OPERATIONS                                                           1,410                 815                 458
Net interest and other financing costs - Note E                                      1                   9                   5
                                                                          -------------       -------------       -------------

INCOME BEFORE INCOME TAXES                                                       1,409                 806                 453
Provision for income taxes - Note G                                                  2                   5                   3
                                                                          -------------       -------------       -------------

INCOME BEFORE CUMULATIVE EFFECT OF CHANGES
       IN ACCOUNTING PRINCIPLES                                                  1,407                 801                 450
       Cumulative effect of changes in accounting principles - Note C               --                  (2)                 --
                                                                          -------------       -------------       -------------


NET INCOME                                                                $      1,407        $        799        $        450
                                                                          =============       =============       =============


</TABLE>




               The accompanying notes are an integral part of
                 these consolidated financial statements.

                                     2

<PAGE>


CONSOLIDATED BALANCE SHEETS (Dollars in Millions)


MARATHON ASHLAND PETROLEUM LLC AND SUBSIDIARIES
<TABLE>
<CAPTION>


                                                                                                         December 31
                                                                                              ---------------------------------
<S>                                                                                           <C>                 <C>
                                                                                                  2004                2003
                                                                                              -------------       -------------
ASSETS:
       Current assets:
              Cash and cash equivalents                                                       $      1,576        $         80
              Receivables, less allowance for doubtful accounts of $6
                    and $5, respectively                                                             2,372               1,764
              Receivables from related parties - Note D                                                 77                  53
              Inventories - Note H                                                                   1,933               1,894
              Other current assets                                                                      48                  42
                                                                                              -------------       -------------
                           Total current assets                                                      6,006               3,833

       Investments and long-term receivables - Note I                                                  553                 544
       Property, plant and equipment - net - Note J                                                  4,781               4,442
       Long-term deferred income tax benefits - Note G                                                   1                  --
       Goodwill - Note K                                                                                21                  21
       Intangibles - Note L                                                                             59                  62
       Other noncurrent assets                                                                          18                  18
                                                                                              -------------       -------------

                           Total assets                                                       $     11,439        $      8,920
                                                                                              =============       =============

LIABILITIES:
       Current liabilities:
              Accounts payable                                                                $      3,584        $      2,734
              Payables to related parties - Note D                                                      99                  66
              Payroll and benefits payable                                                             168                 125
              Accrued taxes                                                                             61                  52
              Long-term debt due within one year                                                         2                   2
                                                                                              -------------       -------------
                           Total current liabilities                                                 3,914               2,979

       Long-term debt - Note N                                                                          42                  44
       Long-term debt payable to related party - Notes D & N                                           122                  --
       Deferred income taxes - Note G                                                                    5                   5
       Employee benefits obligations - Note F                                                          563                 551
       Asset retirement obligations - Note O                                                             4                   1
       Deferred credits and other liabilities                                                           61                  55
                                                                                              -------------       -------------

                           Total liabilities                                                         4,711               3,635
                                                                                              -------------       -------------

       Contingencies and commitments - Note T                                                           --                  --

MEMBERS' CAPITAL:
       Members' contributed capital                                                                  4,328               4,310
       Retained earnings                                                                             2,460               1,053
       Accumulated other comprehensive loss                                                            (60)                (78)
                                                                                              -------------       -------------
                           Total members' capital                                                    6,728               5,285
                                                                                              -------------       -------------

                           Total liabilities and members' capital                             $     11,439        $      8,920
                                                                                              =============       =============

</TABLE>




               The accompanying notes are an integral part of
                 these consolidated financial statements.

                                     3

<PAGE>



CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Millions)


MARATHON ASHLAND PETROLEUM LLC AND SUBSIDIARIES
<TABLE>
<CAPTION>

                                                                                          Year Ended December 31
                                                                          ----------------------------------------------------
                                                                              2004               2003                 2002
                                                                          ------------       -------------       -------------
<S>                                                                       <C>                 <C>                 <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

OPERATING ACTIVITIES:
Net income                                                                $      1,407        $        799        $        450
Adjustments to reconcile to net cash provided from
       operating activities:
       Depreciation and amortization                                               412                 372                 365
       Inventory market valuation credits                                           --                  --                 (77)
       Pensions and other postretirement benefits                                   25                  42                  69
       Cumulative effect of changes in accounting principles                        --                   2                  --
       Deferred income taxes                                                        (1)                 --                   1
       Net gains on disposal of assets                                             (33)                (42)                (40)
       Equity income from investees                                                (81)                (82)                (48)
       Distributions from investees                                                 80                  80                  39
       Changes in:
              Current receivables                                                 (610)               (565)               (105)
              Inventories                                                          (39)                 21                 (45)
              Accounts payable and other current liabilities                       901                 631                 434
              Receivables from/payables to related parties                           9                 (16)                 39
       All other - net                                                              25                  14                   2
                                                                          -------------       -------------       -------------
              Net cash provided from operating activities                        2,095               1,256               1,084
                                                                          -------------       -------------       -------------

INVESTING ACTIVITIES:
Capital expenditures                                                              (769)               (755)               (611)
Disposal of assets                                                                  52                 181                  89
Loan transactions  - principal loaned                                              (35)                (27)                (14)
                   - principal collected                                            36                  24                  14
Restricted cash  - deposits                                                        (31)                (54)                (79)
                 - withdrawals                                                      30                  93                  48
Investments    -  contributions                                                     (2)                (24)               (100)
               -  loans and advances                                                (4)                 (4)                 --
               -  returns and repayments                                             4                  42                  --
                                                                          -------------       -------------       ------------
              Net cash used in investing activities                               (719)               (524)               (653)
                                                                          -------------       -------------       -------------

FINANCING ACTIVITIES:
Revolving credit facilities  - borrowings - Notes D & M                          2,116               1,940                 701
                             - repayments - Notes D & M                         (2,116)             (1,940)               (701)
Long-term debt    - borrowings - Notes D & N                                       122                  --                  --
                  - repayments - Note N                                             (2)                 (1)                 --
Member contributions                                                                --                  11                  --
Member distributions                                                                --                (689)               (437)
                                                                          -------------       -------------       -------------
              Net cash provided from (used in) financing activities                120                (679)               (437)
                                                                          -------------       -------------       -------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                             1,496                  53                  (6)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                      80                  27                  33
                                                                          -------------       -------------       -------------

CASH AND CASH EQUIVALENTS AT END OF YEAR                                  $      1,576        $         80        $         27
                                                                          =============       =============       =============

See Note P for supplemental cash flow information.

</TABLE>

               The accompanying notes are an integral part of
                 these consolidated financial statements.

                                     4

<PAGE>



CONSOLIDATED STATEMENTS OF MEMBERS' CAPITAL (Dollars in Millions)


MARATHON ASHLAND PETROLEUM LLC AND SUBSIDIARIES

<TABLE>
<CAPTION>

                                                      Members' Capital                          Comprehensive Income
                                                         Year Ended                                  Year Ended
                                                         December 31                                 December 31
                                            ----------------------------------------   ----------------------------------------
<S>                                         <C>            <C>           <C>           <C>           <C>            <C>
                                                2004          2003          2002           2004          2003          2002
                                            -----------    -----------   -----------   -----------   -----------    -----------
MEMBERS' CONTRIBUTED CAPITAL:
     Balance at beginning of year           $    4,310     $    4,285    $    4,259
     Member contributions                           18             25            26
                                            -----------    -----------   -----------
     Balance at end of year                      4,328          4,310         4,285
                                            -----------    -----------   -----------

RETAINED EARNINGS:
     Balance at beginning of year                1,053            942           912
     Net income                                  1,407            799           450    $     1,407   $       799    $      450
     Distributions to members                       --           (688)         (420)
                                            -----------    -----------   -----------
     Balance at end of year                      2,460          1,053           942
                                            -----------    -----------   -----------

ACCUMULATED OTHER COMPREHENSIVE
LOSS:
     Minimum pension liability adjustments:
         Balance at beginning of year              (76)           (38)           (5)
         Changes during the year                    16            (38)          (33)           16           (38)           (33)
                                            -----------    -----------   -----------
         Balance at end of year                    (60)           (76)          (38)
                                            -----------    -----------   -----------

     Deferred gains (losses) on derivative
     instruments:
         Balance at beginning of year               (2)            (3)           --
         Changes in fair value                       2             (1)           (3)            2            (1)            (3)
         Reclassification to income                 --              2            --            --             2             --
                                            -----------    -----------   -----------   -----------   -----------    -----------
         Balance at end of year                     --             (2)           (3)
                                            -----------    -----------   -----------

         TOTAL                                     (60)           (78)          (41)   $     1,425   $      762     $      414
                                            -----------    -----------   -----------   ============  ===========    ===========

TOTAL MEMBERS' CAPITAL                      $    6,728     $    5,285    $    5,186
                                            ===========    ===========   ===========


</TABLE>


               The accompanying notes are an integral part of
                 these consolidated financial statements.

                                     5

<PAGE>



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARATHON ASHLAND PETROLEUM LLC AND SUBSIDIARIES


NOTE A - BUSINESS DESCRIPTION AND BASIS OF PRESENTATION

On December 12, 1997,  Marathon  Oil Company  ("Marathon"),  a wholly owned
subsidiary  of Marathon  Oil  Corporation  ("MOC"),  formerly  known as USX
Corporation, entered into an Asset Transfer and Contribution Agreement with
Ashland Inc.  ("Ashland")  providing for the formation of Marathon  Ashland
Petroleum  LLC ("MAP").  Effective  January 1, 1998,  Marathon  contributed
substantially all of its refining,  marketing and  transportation  ("RM&T")
operations to MAP. Also, on January 1, 1998, Marathon acquired certain RM&T
net assets from Ashland in exchange for a 38% interest in MAP. The purchase
price was determined to be $1.9 billion,  based upon an external valuation.
The  acquisition  of  Ashland's  net  assets  was  accounted  for under the
purchase method of accounting.

In connection with the formation of MAP,  Marathon and Ashland entered into
a Limited  Liability  Company  Agreement ("LLC Agreement") dated January 1,
1998.  The LLC Agreement  provides for an initial term expiring on December
31,  2022 (25 years from its  formation).  The term will  automatically  be
extended  for ten-year  periods,  unless a  termination  notice is given by
either party.

Also in connection  with the  formation of MAP, the parties  entered into a
Put/Call,  Registration  Rights and  Standstill  Agreement  ("the  Put/Call
Agreement").  Pursuant to the terms of Marathon's  agreement to acquire the
38% ownership  interest in MAP currently held by Ashland,  Ashland does not
have the right to  exercise  its put right and  Marathon  does not have the
right to exercise  its call right under the Put/Call  Agreement  unless and
until the  acquisition  agreement is  terminated.  The  Put/Call  Agreement
provides  that at any time after  December 31, 2004,  Ashland will have the
right to sell to Marathon all of Ashland's  ownership  interest in MAP, for
an amount in cash and/or Marathon or MOC debt or equity securities equal to
the product of 85% (90% if equity  securities  are used) of the fair market
value of MAP at that time,  multiplied by Ashland's  percentage interest in
MAP. Payment could be made at closing,  or at Marathon's  option,  in three
equal annual installments,  the first of which would be payable at closing.
At any time  after  December  31,  2004,  Marathon  will  have the right to
purchase all of Ashland's ownership interests in MAP, for an amount in cash
equal to the product of 115% of the fair market  value of MAP at that time,
multiplied by Ashland's percentage interest in MAP.

MAP is engaged in petroleum supply, refining,  marketing and transportation
operations and includes Speedway  SuperAmerica LLC ("SSA"),  a wholly owned
subsidiary,  which  operates  retail  outlets for  petroleum  products  and
merchandise.  In  addition,  MAP,  through  its  wholly  owned  subsidiary,
Marathon  Ashland  Pipe  Line LLC  ("MAPL"),  is  actively  engaged  in the
pipeline transportation of crude oil and petroleum products.

On March 18, 2004, MOC entered into an agreement  which would result in the
acquisition of the 38% ownership interest in MAP currently held by Ashland.
In addition, MOC would acquire a portion of Ashland's Valvoline Instant Oil
Change  business  and its  maleic  anhydride  business.  As a result of the
transaction, MAP will become a wholly owned subsidiary of MOC.

As part of the transaction, Ashland will receive approximately $800 million
in cash and  accounts  receivable  from  MAP to  redeem  a  portion  of its
interest in MAP. MOC will assume  approximately $1.9 billion of debt, which
is  expected  to be repaid  immediately  following  closing.  Additionally,
Ashland  shareholders  will  receive  $315  million  in MOC  common  stock.
Ashland's liabilities under certain existing environmental  indemnification
obligations related to MAP will be capped at $50 million.

The LLC Agreement has been amended to eliminate the  requirement for MAP to
make quarterly cash  distributions to Marathon and Ashland between the date
the  principal  transaction  agreements  were signed and the closing of the
transaction.  As a result,  the  redemption  proceeds to Ashland  (cash and
accounts  receivable) will be increased by an amount equal to approximately
38% of the cash  accumulated  from MAP's  operations  during  that  period,
subject to certain adjustments.  At December 31, 2004,  Marathon's share of
MAP's  distributable  cash was $937 million,  and Ashland's  share was $574
million. In the event of a termination of the acquisition agreement,  MAP's
obligation  to make cash  distributions  to Marathon  and Ashland  would be
restored.

On June 1, 2004, the United States Federal Trade  Commission  granted early
termination   of  the   pre-closing   waiting   period   mandated   by  the
Hart-Scott-Rodino  Act, thereby indicating that it had no present intent to
challenge the  acquisition  and  permitting  the parties to proceed  toward
closing.  Additionally,  MOC and  Ashland  submitted a request for a letter
ruling  to the  United  States  Internal  Revenue  Service  ("IRS")  on the
tax-free  status  of the  proposed  acquisition.  Related  to the  proposed
acquisition, MOC filed a registration statement on Form S-4 with the United
States Securities and Exchange  Commission on October 12, 2004,  subsequent
to Ashland filing a preliminary proxy statement on Schedule 14A on June 21,
2004, and

                                     6

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE A - BUSINESS DESCRIPTION AND BASIS OF PRESENTATION - CONTINUED

Amendment No. 1 to Schedule 14A on August 31, 2004.  The  completion of the
acquisition  is  subject  to a number of  conditions,  including  favorable
private  letter  rulings  from the IRS,  Ashland  shareholder  approval and
Ashland public debt holder consents.


NOTE B - SUMMARY OF PRINCIPAL ACCOUNTING POLICIES

PRINCIPLES APPLIED IN CONSOLIDATION - The consolidated financial statements
include the accounts of MAP and the  majority-owned  subsidiaries  which it
controls. Investments in undivided interest pipelines are consolidated on a
pro rata  basis.  Investments  in entities  over which MAP has  significant
influence,  but not control,  are  accounted for using the equity method of
accounting  and are  carried at MAP's  share of net assets  plus  advances.
Differences in the basis of the investment and the separate net asset value
of the investee,  if any, are accreted  into income in accordance  with the
remaining  useful life of the underlying  assets.  Investments in companies
whose stocks have no readily determinable fair value are carried at cost.

Income from equity method investments  represents MAP's proportionate share
of income from equity method  investments.  Other income includes  dividend
income from other investments.  Dividend income is recognized when dividend
payments are received.

USE OF ESTIMATES - The  preparation  of financial  statements in accordance
with  accounting  principles  generally  accepted  in the United  States of
America  requires  management to make estimates and assumptions that affect
the  reported  amounts  of  assets  and  liabilities,   the  disclosure  of
contingent  assets and liabilities at year-end and the reported  amounts of
revenues and expenses during the year.  Items subject to such estimates and
assumptions  include the carrying  value of property,  plant and equipment,
goodwill,  intangibles,  equity method investments and non-exchange  traded
derivative contracts; valuation allowances for receivables, inventories and
deferred  income  tax  assets;   environmental   remediation   liabilities;
liabilities for potential tax deficiencies and potential  litigation claims
and settlements;  and assets and obligations  related to employee benefits.
Actual results could differ from the estimates and assumptions used.

REVENUE  RECOGNITION - Revenues are recognized when products are shipped or
services  are  provided  to   customers,   the  sales  price  is  fixed  or
determinable and  collectibility  is reasonably  assured.  Costs associated
with revenues are recorded in cost of revenues.

Rebates from vendors are recognized as a reduction to cost of revenues when
the  initiating  transaction  occurs.  Incentives  that  are  derived  from
contractual  provisions are accrued based on past experience and recognized
within cost of revenues.

MATCHING  BUY/SELL   TRANSACTIONS  -  Matching  buy/sell  transactions  are
arrangements in which MAP agrees to buy a specific  quantity and quality of
crude oil or  refined  petroleum  products  to be  delivered  at a specific
location  while  simultaneously  agreeing to sell a specified  quantity and
quality of crude oil or refined petroleum products at a different location,
usually with the same counterparty.  All matching buy/sell transactions are
settled in cash and are recorded in both  revenues and costs of revenues as
separate  sales  and  purchase  transactions,  or on a "gross"  basis.  The
commodity purchased and the commodity sold generally are similar in nature.

In a typical  buy/sell  transaction,  MAP enters  into a contract to sell a
particular  grade of crude oil or refined  product at a specified  location
and date to a particular  counterparty,  and simultaneously agrees to buy a
particular grade of crude oil or refined product at a different location on
the same or another specified date,  typically from the same  counterparty.
The value of the  purchased  volumes  rarely  equals the sales value of the
sold  volumes.  The  value  differences  between  purchases  and  sales are
primarily due to 1) grade/quality differentials,  2) location differentials
or 3) timing differences,  in those instances when the purchase and sale do
not occur in the same month.

MAP enters into crude oil matching buy/sell transactions to secure the most
profitable refinery supply.  Also, MAP enters into refined product matching
buy/sell  transactions to meet projected customer demands and to secure the
required volumes in the most cost-effective manner.

The characteristics of MAP's matching buy/sell  transactions  include gross
invoicing  between MAP and its  counterparties  and cash  settlement of the
transactions.  Nonperformance  by one party to deliver  generally  does not
relieve the other party's obligation to perform.  Both transactions require
physical  delivery of the  product.  The risk and reward of  ownership  are
evidenced   by  title   transfer,   assumption   of   environmental   risk,
transportation  scheduling,  credit risk, counterparty  nonperformance risk
and the fact that MAP has the primary obligation to perform.

                                     7

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE B - SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - CONTINUED

MAP believes matching buy/sell transactions are monetary in nature and thus
outside the scope of Accounting  Principles  Board ("APB")  Opinion No. 29,
Accounting for Nonmonetary Transactions ("APB No. 29").  Additionally,  MAP
has  evaluated  Emerging  Issues  Task  Force  ("EITF")  Issue  No.  99-19,
Reporting  Revenue  Gross as a Principal  versus Net as an Agent ("EITF No.
99-19")  and,  based  on that  evaluation,  management  believes  that  the
recording of these transactions on a gross basis is appropriate.

The EITF is currently considering Issue No. 04-13, Accounting for Purchases
and Sales of  Inventory  with the Same  Counterparty,  ("EITF No.  04-13"),
which relates to transactions in which an entity sells inventory to another
entity in the same line of business from which it also purchases inventory.
The following questions have been raised regarding the accounting for these
types of transactions and are expected to be addressed by the EITF:

(a)  Under what circumstances should two or more transactions with the same
     counterparty  (counterparties)  be  viewed  as  a  single  nonmonetary
     transaction within the scope of APB No. 29?

(b)  If  nonmonetary  transactions  within  the scope of APB No. 29 involve
     inventory,  are there any  circumstances  under which the transactions
     should be recognized at fair value?

The EITF has not yet addressed the first  question.  The EITF discussed the
second  question  at  its  November  2004  meeting  without   reaching  any
consensus.  If the EITF were to determine that these transactions should be
accounted for as monetary transactions on a gross basis, no change in MAP's
accounting policy for matching buy/sell transactions would be necessary. If
the EITF were to determine that these transactions  should be accounted for
as  nonmonetary  transactions  qualifying  for fair value  recognition  and
require a net  presentation of such  transactions,  the amounts of revenues
and cost of revenues  associated with matching buy/sell  transactions would
be netted in MAP's consolidated  statement of income, but there would be no
effect on income from operations, net income or cash flows from operations.
If the EITF were to determine that these  transactions  should be accounted
for as nonmonetary  transactions not qualifying for fair value recognition,
these  amounts of revenues  and cost of  revenues  would be netted in MAP's
consolidated  statement  of income  and there  could be an impact on income
from  operations  and net income related to the timing of the ultimate sale
of  product   purchased  in  the  "buy"  side  of  the  matching   buy/sell
transaction.  However,  management  does not  believe  any impact  would be
material.  There  would be no impact on cash  flows  from  operations  as a
result of this accounting treatment.

CASH AND CASH EQUIVALENTS - Cash and cash equivalents  include cash on hand
and on deposit  and  investments  in highly  liquid debt  instruments  with
maturities  generally of three months or less.  See Note D for  information
regarding investments with related parties.

INVENTORIES - Inventories  are carried at lower of cost or market.  Cost of
inventories is determined  primarily under the last-in,  first-out ("LIFO")
method.

The inventory market valuation  reserve results when the recorded LIFO cost
basis of crude oil and refined products  inventories exceeds net realizable
value. The reserve is decreased when market prices increase and inventories
turn over,  and is increased  when market prices  decrease.  Changes in the
inventory market valuation  reserve result in noncash charges or credits to
costs and expenses.

ACCOUNTS  RECEIVABLE  AND ALLOWANCE FOR DOUBTFUL  ACCOUNTS - Trade accounts
receivable are recorded at the invoiced amount and only proprietary  credit
card  receivables  bear interest.  Accounts  receivable  consists mainly of
trade receivables. Account balances are charged to bad debt expense when it
is  probable  the  receivable  will not be  collected.  The  allowance  for
doubtful  accounts is the best  estimate  of the amount of probable  credit
losses in MAP's  existing  proprietary  credit card  receivables  and other
receivables.  MAP  determines the allowance  based on historical  write-off
experience and proprietary credit card sales. MAP reviews the allowance for
doubtful  accounts  periodically.

                                     8

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE B - SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - CONTINUED

TRADITIONAL DERIVATIVE  INSTRUMENTS - MAP uses commodity-based  derivatives
and  financial-instrument-related  derivatives  to manage its  exposure  to
commodity price risk. As market  conditions  change,  MAP may use selective
derivative  instruments  that assume market risk in exchange for an upfront
premium.  Management has authorized the use of futures, forwards, swaps and
combinations of options,  including written or net written options, related
to the  purchase or sale of crude oil,  natural  gas and refined  products.
Changes in the fair value of all derivatives are recognized  immediately in
income, in revenues, other income or costs of revenues.

For derivative  instruments that are classified as trading,  changes in the
fair value are recognized immediately in other income. Any premium received
is amortized  into income based on the underlying  settlement  terms of the
derivative position.  All related effects of a trading strategy,  including
physical  settlement of the  derivative  position,  are recognized in other
income.

NONTRADITIONAL  DERIVATIVE  INSTRUMENTS - Certain  contracts  involving the
purchase or sale of  commodities  are not  considered  normal  purchases or
normal  sales  under  generally  accepted  accounting  principles  and  are
required to be accounted for as derivative instruments.  MAP refers to such
contracts  as  "nontraditional   derivative  instruments"  because,  unlike
traditional derivative instruments,  nontraditional  derivative instruments
have not been entered into to manage a risk  exposure.  Such  contracts are
recorded in the  balance  sheet at fair value and changes in fair value are
recognized in income as revenues or cost of revenues.

Certain  physical  commodity  contracts are  classified  as  nontraditional
derivative  instruments  because  certain volumes under these contracts are
physically  netted at particular  delivery  locations.  The netting process
causes all contracts at that delivery location to be considered  derivative
instruments.  Other  physical  contracts  that involve flash title are also
accounted for as  nontraditional  derivative  instruments.  MAP has made an
election under generally accepted accounting  principles to treat contracts
involving flash title as derivative instruments.

PROPERTY,  PLANT AND EQUIPMENT - Property,  plant and equipment is recorded
at cost and  depreciated  on the  straight-line  method over the  estimated
useful lives of the assets, which range from three to 42 years.

When property,  plant and equipment  depreciated on an individual basis are
sold or otherwise disposed of, any gains or losses are reflected in income.
Gains on disposal of property,  plant and  equipment  are  recognized  when
earned, which is generally at the time of closing. Included in net gains on
disposal of assets are gains on the sale of SSA stores of $17 million,  $30
million and $37 million for 2004, 2003 and 2002, respectively. If a loss on
disposal  is  expected,  such  losses  are  recognized  when the assets are
reclassified  as held for sale.  Proceeds from disposal of property,  plant
and  equipment  depreciated  on a group basis are  credited to  accumulated
depreciation and amortization with no immediate effect on income.

GOODWILL - Goodwill  represents  the excess of the purchase  price over the
estimated fair value of the net assets acquired. Annually, MAP assesses the
carrying amount of goodwill by testing for impairment.  The impairment test
requires  allocating goodwill and other assets and liabilities to reporting
units.  The fair value of each reporting unit is determined and compared to
the book value of the  reporting  unit.  If the fair value of the reporting
unit is less than the book value,  including  goodwill,  then the  recorded
goodwill  is  impaired  down to its  implied  fair  value  with a charge to
expense.

INTANGIBLE ASSETS - Intangible assets consist of deferred  marketing costs,
intangible  contract  rights and  unrecognized  pension plan prior  service
costs.  The  marketing  costs relate to  refurbishment  of various  branded
jobber  locations.  These  marketing  costs are amortized  over five to ten
years depending on the term of the associated marketing agreement.

MAJOR MAINTENANCE  ACTIVITIES - MAP incurs costs for planned major refinery
maintenance ("turnarounds"). These types of costs include contractor repair
services,  materials  and  supplies,  equipment  rentals and company  labor
costs.  Such costs are  expensed  in the same  annual  period as  incurred;
however,  estimated  annual  turnaround  costs  are  recognized  in  income
throughout the year on a pro rata basis.

ENVIRONMENTAL   REMEDIATION   LIABILITIES   -   Environmental   remediation
expenditures  are  capitalized if the costs mitigate past or prevent future
contamination or if the costs improve environmental safety or efficiency of
the existing assets.  MAP provides for remediation costs and penalties when
the  responsibility  to remediate is probable and the amount of  associated
costs can be  reasonably  estimated.  The  timing of  remediation  accruals
coincides  with  completion of a feasibility  study or the  commitment to a
formal  plan of  action.  Remediation  liabilities  are  accrued  based  on
estimates  of known  environmental  exposure  and are  discounted  when the
estimated amounts are reasonably fixed and  determinable.  If recoveries of
remediation  costs  from  third  parties  are  probable,  a  receivable  is
recorded.

                                     9
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE B - SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - CONTINUED

ASSET  RETIREMENT   OBLIGATIONS  -  The  fair  value  of  asset  retirement
obligations  are  recognized  in the period in which they are incurred if a
reasonable  estimate of fair value can be made. For MAP,  asset  retirement
obligations primarily relate to certain underground storage tanks at leased
locations  and  closure  of  a  waste  remediation  site.  Depreciation  of
capitalized  asset  retirement  cost  and  accretion  of  asset  retirement
obligations  are recorded over time.  The  depreciation  will  generally be
determined on a straight-line  basis,  while the accretion to be recognized
will escalate  over the life of the assets.  Asset  retirement  obligations
have not been  recognized  for  certain  refinery,  crude  oil and  product
pipeline and  marketing  assets  because the fair value cannot be estimated
due to the uncertainty of the settlement date of the obligation.

PENSIONS  AND OTHER  POSTRETIREMENT  BENEFITS  - MAP has a  noncontributory
defined  benefit pension plan with two benefit  payment  formulas  covering
substantially  all employees.  In addition,  several excess  benefits plans
exist covering  employees within defined  regulatory  compensation  limits.
Benefits under its final pay formula are based primarily upon age, years of
participation in the plan and the highest consecutive three years' earnings
during the last ten years  before  retirement.  Benefits  under its pension
equity formula are based primarily upon age, years of  participation in the
plan  and the  final  three  years  of  earnings  at  retirement.  MAP also
participates in a multi-employer  plan that provides coverage for less than
5% of its employees.  The benefits provided include both pension and health
care.

MAP also has  defined  benefit  plans  for  other  postretirement  benefits
covering  most  employees.   Health  care  benefits  are  provided  through
comprehensive  hospital,  surgical and major  medical  benefit  provisions,
subject to various  cost  sharing  features.  Life  insurance  benefits are
provided to certain nonunion and union-represented  retiree  beneficiaries.
Other postretirement benefits have not been prefunded.

MAP  uses  a  December  31  measurement  date  for  its  pension  or  other
postretirement benefit plans.

STOCK-BASED  COMPENSATION  -  Effective  January 1, 2003,  MAP  applied the
fair-value-based  method of  accounting  to future  grants and any modified
grants for MOC stock-based compensation granted to MAP employees. All prior
outstanding  and unvested  awards  continue to be  accounted  for under the
intrinsic value method.  The following table  illustrates the effect on net
income if the fair value  method had been  applied to all  outstanding  and
unvested awards in each period:

<TABLE>
<CAPTION>

                                                                                         Year Ended December 31
                                                                          -----------------------------------------------------
                                                                                               (Millions)
                                                                               2004               2003                2002
                                                                          -------------       -------------       -------------
<S>                                                                       <C>                 <C>                 <C>
Net income
       As reported                                                        $      1,407        $        799        $        450
       Add:     MOC stock-based employee compensation expense
                included in reported net income                                      6                   2                   3
       Deduct:  MOC stock-based employee compensation expense
                determined under fair value method for all awards                   (6)                 (2)                 (6)
                                                                          -------------       -------------       -------------

Pro forma net income                                                      $      1,407        $        799        $        447
                                                                          =============       =============       =============

</TABLE>
The above pro forma  amounts were based on a  Black-Scholes  option-pricing
model, which included the following information and assumptions:


<TABLE>
<CAPTION>
                                                                                         Year Ended December 31
                                                                          -----------------------------------------------------
                                                                               2004               2003                2002
                                                                          -------------       -------------       -------------
<S>                                                                       <C>                 <C>                 <C>

Weighted-average grant date exercise price per share                      $      33.61        $      25.58        $      28.12
Expected annual dividends per share                                       $       1.00        $        .97        $        .92
Expected life in years                                                            5.5                    5                   5
Expected volatility                                                              32.0%               34.0%               35.0%
Risk-free interest rate                                                           3.9%                3.0%                4.5%
Weighted-average grant date fair value of options granted
       during the year, as calculated from above                          $       8.83        $       5.37        $       7.79


</TABLE>
                                    10

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE B - SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - CONTINUED

MAP applies the principles of Statement of Financial  Accounting  Standards
No. 123,  Accounting  for  Stock-Based  Compensation  ("SFAS No. 123"),  as
interpreted by EITF Issue No. 96-18, Accounting for Equity Instruments That
Are Issued to Other than  Employees for Acquiring,  or in Conjunction  with
Selling, Goods or Services, to the stock-based  compensation granted to MAP
employees by Ashland.

The  amounts  of MOC  and  Ashland  stock-based  compensation  recorded  in
selling,  general  and  administrative  expenses  totaled $14  million,  $6
million and $3 million during the years ended  December 31, 2004,  2003 and
2002, respectively.

INCOME TAXES - MAP is a limited liability  company,  and therefore,  except
for several small subsidiary  corporations,  is not subject to U.S. federal
income  taxes.  Accordingly,  the  taxable  income or loss  resulting  from
operations of MAP is  ultimately  included in the U.S.  federal  income tax
returns of MOC and  Ashland.  MAP is,  however,  subject to income taxes in
certain state, local and foreign jurisdictions.

CONCENTRATION  OF CREDIT  RISK - MAP is exposed to credit risk in the event
of  nonpayment  by  counterparties,  a  significant  portion  of which  are
concentrated  in  energy-related   industries.   The   creditworthiness  of
customers  and  other  counterparties  is  subject  to  continuing  review,
including  the use of master  netting  agreements,  where  appropriate.  No
single customer accounts for more than 10% of annual gross revenues.

RECLASSIFICATIONS  - Certain  reclassifications  of prior  years' data have
been made to conform to 2004 classifications.


NOTE C - NEW ACCOUNTING STANDARDS

Effective July 1, 2004, MAP adopted  Financial  Accounting  Standards Board
("FASB")  Staff  Position  FAS 106-2  ("FSP  FAS  106-2"),  Accounting  and
Disclosure   Requirements  Related  to  the  Medicare   Prescription  Drug,
Improvement  and  Modernization  Act of 2003  ("the  Act").  FSP FAS  106-2
includes  guidance on recognizing the effects of the new legislation  under
the  various   conditions   surrounding   the   assessment   of  "actuarial
equivalence." MAP has determined,  based on available  regulatory guidance,
that the postretirement  plan's  prescription drug benefits are actuarially
equivalent   to  the  Medicare   "Part  D"  benefit   under  the  Act.  The
subsidy-related   reduction   at  July   1,   2004,   in  the   accumulated
postretirement  benefit obligation for the MAP  postretirement  plan is $49
million.  The favorable pretax effect of the subsidy-related  reduction for
2004 on the  measurement  of the net periodic  postretirement  benefit cost
related to service cost,  interest cost and actuarial gain  amortization is
$4 million.

Effective  January 1, 2003, MAP adopted  Statement of Financial  Accounting
Standards No. 143,  Accounting for Asset Retirement  Obligations ("SFAS No.
143").  The  transition  adjustment  related  to  adopting  SFAS No. 143 on
January 1,  2003,  was  recognized  as a  cumulative  effect of a change in
accounting principle.  The cumulative effect on net income of adopting SFAS
No. 143 was a net unfavorable  pretax effect of $2 million.  At the time of
adoption,  total  assets  increased  by less  than  $1  million  and  total
liabilities  increased $2 million.  The amounts  recognized on adoption are
based on numerous  estimates and assumptions,  including future  retirement
costs,  future inflation rates and the  credit-adjusted  risk-free interest
rate.

Effective   January  1,  2003,  MAP  adopted  the  fair  value  recognition
provisions of SFAS No. 123 for the stock-based  compensation granted to MAP
employees  by MOC.  Statement of Financial  Accounting  Standards  No. 148,
Accounting for Stock-Based  Compensation - Transition and Disclosure ("SFAS
No. 148"), an amendment of SFAS No. 123, provides  alternative  methods for
the  transition of the  accounting for  stock-based  compensation  from the
intrinsic  value method to the fair value method.  MAP has applied the fair
value  method to grants  made,  modified or settled on or after  January 1,
2003. The impact on MAP's 2003 net income was not materially different than
under previous accounting standards.

Effective January 1, 2003, MAP adopted EITF Issue No. 02-16,  Accounting by
a Customer  (Including a Reseller) for Cash  Consideration  Received from a
Vendor  ("EITF No.  02-16"),  which  requires  rebates  from  vendors to be
recorded  as  reductions  to cost of  revenues.  Restatement  of prior year
results is permitted but not required. Rebates from vendors of $169 million
for 2002 are recorded in sales and other operating  revenues.  There was no
effect on net income related to the adoption of EITF No. 02-16.

                                    11
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE D - RELATED PARTY TRANSACTIONS

Related parties include:
o        Ashland and its affiliates.
o        MOC and its affiliates.
o        Equity method investees - See Note I for major investees.

Management  believes that  transactions with related parties were conducted
under terms comparable to those with unrelated parties.

<TABLE>
<CAPTION>
                                                                                               Year Ended December 31
                                                                                      ------------------------------------------
                                                                                                      (Millions)

                                                                                          2004           2003            2002
                                                                                      -----------    ------------    ------------
<S>                                                                                   <C>            <C>             <C>
REVENUES FROM RELATED PARTIES WERE:
       Ashland and its affiliates                                                     $      274     $      258      $      218
       MOC and its affiliates                                                                153             97             147
       Equity investees:
              Pilot Travel Centers LLC ("PTC")                                               715            635             645
              Centennial Pipeline LLC ("Centennial")                                          49             16              --
              Other                                                                            5             --              --
                                                                                      -----------    -----------     -----------
                    Total                                                             $    1,196     $    1,006      $    1,010
                                                                                      ===========    ===========     ===========

</TABLE>
Related  party  sales to Ashland  and its  affiliates,  PTC and  Centennial
consist primarily of refined petroleum products. Related party sales to MOC
and its  affiliates  consist  primarily  of  crude  oil  matching  buy/sell
transactions.

<TABLE>
<CAPTION>
                                                                                               Year Ended December 31
                                                                                      ------------------------------------------
                                                                                                      (Millions)
                                                                                           2004          2003            2002
                                                                                      ------------  -------------    -----------
<S>                                                                                   <C>            <C>             <C>
PURCHASES FROM RELATED PARTIES WERE:
       Ashland and its affiliates                                                     $       22     $       24      $       33
       MOC and its affiliates                                                                685            659             770
       Equity investees:
              PTC                                                                              8             --              15
              Centennial                                                                      56             49              16
              LOOP LLC ("LOOP")                                                               44             46              32
              Other                                                                           24             22              19
                                                                                      -----------    -----------     -----------
                    Total                                                             $      839     $      800      $      885
                                                                                      ===========    ===========     ===========
</TABLE>

Related party purchases from Ashland and its affiliates  consist  primarily
of refined petroleum products and the net amount of administrative services
provided  between the companies.  Related party  purchases from MOC and its
affiliates  consist  primarily of crude oil  (including  matching  buy/sell
transactions),  natural gas and refinery  feedstocks  and the net amount of
administrative  services  provided  between the  companies.  Related  party
purchases from PTC consist primarily of refined petroleum  products and the
net amount of  administrative  services  provided  between  the  companies.
Related party purchases from Centennial  consist  primarily of transmix and
refined product transportation. Related party purchases from LOOP and other
equity investees consist primarily of crude oil transportation.

                                    12

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE D - RELATED PARTY TRANSACTIONS - CONTINUED

<TABLE>
<CAPTION>

                                                                                                             December 31
                                                                                                     ---------------------------
                                                                                                              (Millions)
                                                                                                         2004           2003
                                                                                                     -----------     -----------
<S>                                                                                                  <C>             <C>
RECEIVABLES FROM RELATED PARTIES WERE:
       Ashland and its affiliates                                                                    $       18      $       22
       MOC and its affiliates                                                                                24               7
       Equity investees:
              PTC                                                                                            19              16
              Centennial                                                                                     16               8
                                                                                                     -----------     ----------
                    Total                                                                            $       77      $       53
                                                                                                     ===========     ===========
</TABLE>

<TABLE>
<CAPTION>

                                                                                                              December 31
                                                                                                     ---------------------------
                                                                                                              (Millions)
                                                                                                         2004           2003
                                                                                                     -----------     -----------
<S>                                                                                                 <C>              <C>
PAYABLES TO RELATED PARTIES WERE:
       Ashland and its affiliates                                                                    $       --      $        1
       MOC and its affiliates                                                                                81              51
       Equity investees:
              Centennial                                                                                     12              10
              LOOP                                                                                            3               3
              Other                                                                                           3               1
                                                                                                     -----------     -----------
                    Total                                                                            $       99      $       66
                                                                                                     ===========     ===========

</TABLE>

A revolving  credit agreement was entered into as of January 1, 1998, among
Ashland and Marathon  (collectively  "the Lenders") and MAP. This agreement
provides  that the  Lenders  may loan to MAP up to $500  million at defined
short-term market rates.  Pursuant to the terms of Marathon's  agreement to
acquire the 38% ownership  interest in MAP currently  held by Ashland,  MAP
effectively  was  restricted  from  borrowing  under  this  facility  after
September 30, 2004.  This facility  expires on March 15, 2005, and MAP will
not seek a renewal. At December 31, 2004 and 2003, there were no borrowings
against this facility. During 2004 and 2003, MAP borrowed and repaid $1,717
million  and  $478  million,  respectively,  under  this  revolving  credit
facility. The weighted-average  borrowings outstanding under this revolving
credit  facility  during  the years 2004 and 2003 were $27  million  and $3
million,  respectively.  During the years ended December 31, 2004, 2003 and
2002,  interest  paid to  Marathon  on these  borrowings  was less  than $1
million.  Interest paid to Ashland for borrowings  under this agreement was
less than $1 million for the years 2004, 2003 and 2002.

MAP had a $350 million  uncommitted  note  facility  with Marathon that was
entered into on March 31, 2003, expired on July 31, 2003, and was cancelled
on October 6, 2003.  During 2003, MAP had borrowings and repayments of $847
million under this facility.  During 2003, interest paid to Marathon on the
borrowings   under   this   agreement   was  less  the  $1   million.   The
weighted-average  borrowings  outstanding  under this note facility  during
2003 were $15 million.

Effective  August 1, 2003,  MAP replaced the above  mentioned note facility
with a $350  million  committed  revolving  credit  facility  with MOC that
terminated  on January  31,  2005.  During  2004,  MAP had  borrowings  and
repayments  of $399 million under this  facility.  There were no borrowings
against this facility during 2003. During 2004, interest paid to MOC on the
borrowings   under  this   agreement   was  less  than  $1   million.   The
weighted-average  borrowings  outstanding  under this note facility  during
2004 were $3 million.

On March 17, 2004,  MAP entered into a $325 million  project loan agreement
with Marathon, whereby MAP may borrow funds to finance the Detroit refinery
expansion  project  at a rate  of 6% per  annum.  During  the  construction
period,  interest is added to the outstanding loan balance. Upon completion
of  this  expansion  project,  the  Detroit  refinery  cash  flows  will be
dedicated  to  service  this debt as the sole  source of funds to repay the
borrowings.  At  December  31,  2004,  MAP had a  balance  of $122  million
outstanding  under this  agreement.  The amount of  interest  that has been
incurred and added to the loan balance is $2 million.

On November 16, 1998,  MAP entered  into  agreements  with MOC and Ashland,
which  allow MAP to invest its  surplus  cash  balances on a daily basis at
competitive  interest  rates with MOC and Ashland in proportion up to their
ownership interests in MAP.

                                    13

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE D - RELATED PARTY TRANSACTIONS - CONTINUED

These agreements,  as previously  extended,  expired on March 15, 2004, and
were subsequently amended and extended with an expiration date of March 15,
2005; they were then  subsequently  cancelled on April 2, 2004. MAP did not
invest any cash under these agreements in 2004. At December 31, 2003, there
was no cash invested under these  agreements.  Interest  income earned from
Ashland  on these  investments  was less than $1  million  during the years
ended December 31, 2003 and 2002.  Interest income earned from MOC on these
investments  was less than $1 million and $2 million during the years ended
December 31, 2003 and 2002, respectively.

In 2004, 2003 and 2002, MAP recorded capital contributions from Marathon of
less than $1 million,  $1 million and $3  million,  respectively,  and from
Ashland  of $4  million,  $7 million  and $20  million,  respectively,  for
environmental  improvements.  In 2003,  MAP also  recorded  an $11  million
capital  contribution  from Marathon  related to the  acquisition of leased
property.  The LLC Agreement stipulates that ownership interest in MAP will
not be adjusted as a result of such contributions. Pursuant to the terms of
Marathon's  agreement to acquire the 38% ownership in MAP currently held by
Ashland,  Marathon and Ashland have agreed that after  September  30, 2004,
there  will be no capital  contributions  made to MAP except in the case of
extraordinary events.

In 2004, 2003 and 2002, MAP recorded  capital  contributions of $6 million,
$2 million and $3 million,  respectively,  from  Marathon,  and in 2004 and
2003,  $8  million  and $4 million  from  Ashland  related  to  stock-based
compensation  expense  which is  allocated  100% to Marathon  and  Ashland,
respectively.

<TABLE>
<CAPTION>

NOTE E - OTHER ITEMS
                                                                                                 Year Ended December 31
                                                                                       ------------------------------------------
                                                                                                       (Millions)
                                                                                           2004           2003            2002
                                                                                      -------------- -------------   -------------

<S>                                                                                   <C>            <C>             <C>
NET INTEREST AND OTHER FINANCING COSTS:

       INTEREST AND OTHER FINANCIAL INCOME:
              Interest income - third parties                                         $       10     $        2      $        3
              Interest income - related parties                                               --             --               2
              Foreign currency adjustments                                                     2             --              --
                                                                                      -----------    -----------     -----------
                    Total                                                                     12              2               5
                                                                                      -----------    -----------     -----------




                                                                                                Year Ended December 31
                                                                                      ------------------------------------------
                                                                                                      (Millions)

                                                                                            2004           2003            2002
                                                                                      -----------    -----------     -----------
       INTEREST AND OTHER FINANCING COSTS:
              Interest incurred - third parties                                       $        3     $        2      $        1
              Interest incurred - related parties                                              3             --              --
              Less interest capitalized                                                        2             --              --
                                                                                      -----------    -----------     -----------
                    Net interest                                                               4              2               1
              Interest on tax issues                                                           1              2               1
              Bank fees and other                                                              8              7               8
                                                                                      -----------    -----------     -----------
                    Total                                                                     13             11              10
                                                                                      -----------    -----------     -----------

              Net interest and other financing costs                                  $        1     $        9      $        5
                                                                                      ===========    ===========     ===========

</TABLE>

                                    14


<PAGE>



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE F - PENSIONS AND OTHER POSTRETIREMENT BENEFITS

<TABLE>
<CAPTION>

                                                                     Pension Benefits                         Other Benefits
                                                                  ---------------------                    ---------------------
                                                                                           (Millions)
<S>                                                               <C>         <C>                          <C>         <C>
                                                                     2004        2003                        2004        2003
                                                                  ---------   ---------                    ---------   ---------
CHANGE IN BENEFIT OBLIGATIONS:
Benefit obligations at January 1                                  $  1,051    $    831                     $    346    $    295
Service cost                                                            70          64                           14          15
Interest cost                                                           64          59                           20          19
Actuarial (gains) losses                                               114         144                          (34)(a)      21
Settlement payments                                                     (4)         --                           --          --
Benefits paid                                                          (92)        (47)                          (5)         (4)
                                                                  ---------   ---------                    ---------   ---------
Benefit obligations at December 31                                $  1,203    $  1,051                     $    341    $    346
                                                                  =========   =========                    =========   =========

CHANGE IN PLAN ASSETS:
Fair value of plan assets at January 1                            $    473    $    356
Actual return on plan assets                                            44          75
Employer contributions                                                 114          89
Settlement payments                                                     (4)         --
Benefits paid from plan assets                                         (92)        (47)
                                                                  ---------   ---------
Fair value of plan assets at December 31                          $    535    $    473
                                                                  =========   =========


FUNDED STATUS OF PLANS AT DECEMBER 31(b)                          $   (668)   $   (578)                    $   (341)   $   (346)
Unrecognized net transition asset                                       (2)         (3)                          --          --
Unrecognized prior service costs (credits)                              18          21                          (26)        (33)
Unrecognized net losses                                                502         411                           61          98
                                                                  ---------   ---------                    ---------   ---------
Accrued benefit cost                                              $   (150)   $   (149)                    $   (306)   $   (281)
                                                                  =========   =========                    =========   =========


AMOUNTS RECOGNIZED IN THE STATEMENT OF FINANCIAL POSITION:
Accrued benefit liability                                         $   (230)   $   (248)                    $   (306)   $   (281)
Intangible asset                                                        20          23                           --          --
Accumulated other comprehensive loss                                    60          76                           --          --
                                                                  ---------   ---------                    ---------   ---------
Accrued benefit cost                                              $   (150)   $   (149)                    $   (306)   $   (281)
                                                                  =========   =========                    =========   =========

</TABLE>

The  accumulated  benefit  obligation for all defined benefit pension plans
was  $763  million  and  $721  million  at  December  31,  2004  and  2003,
respectively.

 (a) Includes the impact  related to the Act,  which reduced the obligation
     by $49 million.

 (b) All MAP plans have accumulated  benefit  obligations in excess of plan
     assets:

<TABLE>
<CAPTION>


                                                                         December 31
                                                                  ------------------------
                                                                         (Millions)
<S>                                                               <C>           <C>
                                                                      2004          2003
                                                                  ----------    -----------

              Projected benefit obligations                       $  (1,203)    $   (1,051)
              Accumulated benefit obligations                          (763)          (721)
              Fair value of plan assets                                 535            473

</TABLE>

                                    15
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED



NOTE F - PENSIONS AND OTHER POSTRETIREMENT BENEFITS - CONTINUED



The  following  summarizes  net  periodic  benefit  cost  for  those  plans
sponsored by MAP:

<TABLE>
<CAPTION>

                                                                Pension Benefits                        Other Benefits
                                                      ---------------------------------        ---------------------------------
                                                                                      (Millions)
                                                         2004        2003        2002            2004        2003        2002
                                                      ---------   ---------   ---------        ---------   ---------   ---------
<S>                                                   <C>         <C>         <C>              <C>         <C>        <C>

COMPONENTS OF NET PERIODIC BENEFIT COST:
     Service cost                                     $     70    $     64    $     49         $     15    $     15    $     11
     Interest cost                                          64          59          47               20          20          15
     Expected return on plan assets                        (45)        (40)        (46)              --          --          --
Amortization  - net transition gain                         (2)         (2)         (2)              --          --          --
              - prior service costs (credits)                2           3           2               (7)         (7)         (7)
              - actuarial loss                              23          20           3                3           4           2
     Multi-employer and other plans                          2           2           1                3           2           2
     Settlement, curtailment and termination loss            2          --          --               --          --          --
                                                      ---------   ---------   ---------        ---------   ---------   ---------
     Net periodic benefit cost                        $    116    $    106    $     54         $     34    $     34    $     23
                                                      =========   =========   =========        =========   =========   =========


                                                                Pension Benefits                        Other Benefits
                                                      ---------------------------------        ---------------------------------
                                                                                      (Millions)
                                                         2004        2003        2002            2004        2003        2002
                                                      ---------   ---------   ---------        ---------   ---------   ---------
Increase (decrease) in minimum liability in
     other comprehensive loss                         $    (16)   $     38    $     33         $     --    $     --    $     --


PLAN ASSUMPTIONS

                                                                Pension Benefits                        Other Benefits
                                                      ---------------------------------        ---------------------------------
                                                         2004        2003        2002            2004        2003        2002
                                                      ---------   ---------   ---------        ---------   ---------   ---------
WEIGHTED-AVERAGE ASSUMPTIONS USED TO
DETERMINE BENEFIT OBLIGATION AT
DECEMBER 31:
     Discount rate                                        5.75%       6.25%       6.50%            5.75%       6.25%       6.50%
     Rate of compensation increase                        4.50%       4.50%       4.50%            4.50%       4.50%       4.50%


WEIGHTED-AVERAGE ACTUARIAL ASSUMPTIONS
USED TO DETERMINE NET PERIODIC BENEFIT
COST FOR YEARS ENDED DECEMBER 31:
     Discount rate                                        6.25%       6.50%       7.00%            6.25%       6.50%       7.00%
     Expected long-term return on
         plan assets                                      9.00%       9.00%       9.50%              --          --          --
     Rate of compensation increase                        4.50%       4.50%       5.00%            4.50%       4.50%       5.00%

</TABLE>

EXPECTED  LONG-TERM RETURN ON PLAN ASSETS - Historical  markets are studied
and long-term  historical  relationships  between equities and fixed income
are preserved  consistent with the widely accepted capital market principle
that assets with higher volatility  generate a greater return over the long
run.  Certain  components  of  the  asset  mix  are  modeled  with  various
assumptions  regarding inflation,  debt returns and stock yields. Peer data
and  historical  returns  are  reviewed  to  check  for  reasonability  and
appropriateness.

ASSUMED HEALTH CARE COST TREND RATES AT DECEMBER 31:
<TABLE>
<CAPTION>

                                                                                                         2004           2003
                                                                                                     -----------     -----------
<S>                                                                                                  <C>             <C>
Health care cost trend rate assumed for next year                                                        9.00%          9.50%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)                        5.00%          5.00%
Year that the rate reaches the ultimate trend rate                                                        2012           2012

</TABLE>

                                    16
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE F - PENSIONS AND OTHER POSTRETIREMENT BENEFITS - CONTINUED


Assumed  health  care cost  trend  rates have a  significant  effect on the
amounts reported for the health care plan. A one-percentage-point change in
assumed health care cost trend rates would have the following effects:
<TABLE>
<CAPTION>

                                                                                             1 Percentage         1 Percentage
                                                                                            Point Increase        Point Decrease
                                                                                           ----------------      ----------------
                                                                                                        (Millions)
<S>                                                                                         <C>                 <C>
Effect on total of service and interest cost components                                     $            7      $            (6)
Effect on other postretirement benefit obligations                                                      59                  (50)

</TABLE>

PLAN ASSETS

The pension plan  weighted-average  asset allocations by asset category are
as follows:
<TABLE>
<CAPTION>

                                                                                                         December 31
                                                                                             -----------------------------------
                                                                                                  2004                2003
                                                                                             ---------------    ----------------
<S>                                                                                          <C>                <C>
Asset category:
       Equity securities                                                                                 78%                 77%
       Debt securities                                                                                   21%                 22%
       Real estate                                                                                        1%                  1%
                                                                                             ---------------    ----------------
              Total                                                                                     100%                100%
                                                                                             ===============    ================
</TABLE>


PLAN  INVESTMENT  POLICIES AND STRATEGIES - The investment  policy reflects
the funded status of the plan and the future ability of MAP to make further
contributions.  Historical  performance  results  and  future  expectations
suggest that common  stocks will provide  higher total  investment  returns
than  fixed-income  securities over a long-term  investment  horizon.  As a
result,  equity investments will likely continue to exceed 50% of the value
of the fund.  Accordingly,  bond and other  fixed-income  investments  will
comprise the remainder of the fund.  Short-term  investments  shall reflect
the liquidity requirements for making pension payments. The plan's targeted
asset  allocation  is comprised  of 75%  equities and 25% debt  securities.
Management of the plan's assets is delegated to the United States Steel and
Carnegie  Pension Fund.  The fund manager has  discretion to move away from
the target  allocations  based upon the  manager's  judgment  as to current
confidence or concern for the capital markets.  Investments are diversified
by industry and type,  limited by grade and maturity.  The policy prohibits
investments in any securities in the steel industry and allows  derivatives
subject to strict guidelines.  Investment  performance and risk is measured
and monitored on an ongoing basis through quarterly investment meetings and
periodic asset and liability studies.

CASH FLOWS

Contributions
MAP  expects  to make  contributions  to its  funded  pension  plan in 2005
approximating $127 million.  Cash contributions to be paid from the general
assets of the company  for both the  unfunded  pension  and  postretirement
benefit plans are expected to be  approximately  $1 million and $8 million,
respectively, in 2005.

Estimated future benefit payments
The  following  gross  benefit  payments,  which  reflect  expected  future
service, as appropriate, are expected to be paid:

<TABLE>
<CAPTION>

                                                                       Pension Benefits                       Other Benefits(a)
                                                                       ----------------                       ----------------
                                                                                             (Millions)
                   <S>                                                 <C>                                     <C>
                    2005                                               $         50                            $         8
                    2006                                                         55                                      9
                    2007                                                         68                                     11
                    2008                                                         75                                     12
                    2009                                                         90                                     14
                    Years 2010 - 2014                                           638                                    106

                   (a) Expected  Medicare  reimbursements for 2006 through 2014 total $7
                       million.

</TABLE>
                                    17

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE F - PENSIONS AND OTHER POSTRETIREMENT BENEFITS - CONTINUED

MAP also  contributes to several  defined  contribution  plans for eligible
employees.  Contributions to these plans, which for the most part are based
on a percentage of the employees' salary,  totaled $26 million, $26 million
and $26 million in 2004, 2003 and 2002, respectively.

NOTE G - INCOME TAXES

The taxable  income or loss resulting  from  operations of MAP,  except for
several  small  subsidiary  corporations,  is  ultimately  included  in the
federal income tax returns of MOC and Ashland. MAP is, however,  subject to
taxation in certain state, local and foreign jurisdictions.

<TABLE>
<CAPTION>

                                                                     Year Ended December 31
                               -------------------------------------------------------------------------------------------------
                                                                           (Millions)
                                             2004                             2003                            2002
                               -------------------------------  -------------------------------  -------------------------------
                                 CURRENT   DEFERRED   TOTAL        CURRENT     DEFERRED    TOTAL  CURRENT   DEFERRED   TOTAL
                               ---------   ---------  ------     -----------  ----------- ------- --------  --------- --------
<S>                            <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>       <C>

PROVISIONS FOR INCOME TAXES:
       Federal                 $     --   $     --   $     --   $     --   $     --   $     --   $     --   $     --   $     --
       State and local                3         (1)         2          3         --          3          1          1          2
       Foreign                       --         --         --          2         --          2          1         --          1
                               ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------  ---------
              Total            $      3   $     (1)  $      2   $      5   $     --   $      5   $      2   $      1   $      3
                               =========  =========  =========  =========  =========  =========  =========  =========  =========

</TABLE>

Deferred tax liabilities at December 31, 2004 and 2003 of $5 million and $5
million, respectively,  principally arise from differences between the book
and tax basis of inventories  and property,  plant and equipment in certain
state and local jurisdictions.

Separately,  a long-term  net deferred tax asset of $1 million was recorded
in 2004 to recognize  the deferred  tax benefit of a state  investment  tax
credit  carryforward of $7 million less a valuation allowance of $5 million
and  deferred  tax  liabilities  in that state of $1  million.  There was a
deferred tax  liability  of $1 million in this  jurisdiction  in 2003.  The
investment tax credits expire from 2005 through 2014.

Pretax income included $7 million,  $5 million and $2 million  attributable
to foreign sources in 2004, 2003 and 2002, respectively.

<TABLE>
<CAPTION>

NOTE H - INVENTORIES
                                                                                                              December 31
                                                                                                     ---------------------------
                                                                                                              (Millions)
                                                                                                         2004           2003
                                                                                                     -----------     -----------
<S>                                                                                                  <C>            <C>
INVENTORIES CONSIST OF THE FOLLOWING:
       Liquid hydrocarbons                                                                           $      644     $       645
       Refined products and merchandise                                                                   1,199           1,156
       Supplies and sundry items                                                                             90              93
                                                                                                     -----------    ------------
              Total (at cost)                                                                        $    1,933     $     1,894
                                                                                                     ===========    ============
</TABLE>

The LIFO method used for financial  accounting purposes  represented 93% of
total  inventory value at December 31, 2004 and 2003.  Current  acquisition
costs were  estimated to exceed the LIFO  inventory  values at December 31,
2004  and  2003,  by   approximately   $1,270  million  and  $644  million,
respectively.  Cost of revenues was reduced and income from  operations was
increased  by $4 million  in 2004,  $10  million in 2003,  and less than $1
million in 2002 as a result of liquidations of LIFO inventories.




NOTE I - INVESTMENTS AND LONG-TERM RECEIVABLES

<TABLE>
<CAPTION>
                                                                                                               December 31
                                                                                                     ---------------------------
                                                                                                               (Millions)
                                                                                                         2004           2003
                                                                                                     -----------     -----------
<S>                                                                                                  <C>             <C>
Equity method investments:
       PTC                                                                                           $      372      $      373
       Other                                                                                                162             152
Receivables due after one year                                                                               15              16
Deposits of restricted cash                                                                                   4               3
                                                                                                     -----------     -----------
              Total                                                                                  $      553      $      544
                                                                                                     ===========     ===========
</TABLE>

                                    18

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE I - INVESTMENTS AND LONG-TERM RECEIVABLES - CONTINUED

Summarized  financial  information of investees accounted for by the equity
method of accounting follows:

<TABLE>
<CAPTION>


                                                                                               Year Ended December 31
                                                                                      -----------------------------------------
                                                                                                      (Millions)
                                                                                          2004           2003           2002
                                                                                      ----------     ------------   ------------
<S>                                                                                   <C>           <C>             <C>
Income data - year:
       Revenues and other income                                                      $    7,166     $    5,543      $    4,174
       Operating income                                                                      231            237             153
       Net income                                                                            165            163              98

</TABLE>
<TABLE>
<CAPTION>

                                                                                                              December 31
                                                                                                     ---------------------------
                                                                                                              (Millions)
                                                                                                         2004            2003
                                                                                                     -----------     -----------
<S>                                                                                                  <C>             <C>
Balance sheet data - December 31:
       Current assets                                                                                $      333      $      284
       Noncurrent assets                                                                                  2,296           2,296
       Current liabilities                                                                                  418             392
       Noncurrent liabilities                                                                               936             908

</TABLE>

MAP's carrying value of its equity method  investments is $85 million lower
than the underlying net assets of investees. This basis difference is being
accreted into income over the remaining  useful lives of the underlying net
assets.

Dividends and  partnership  distributions  received  from equity  investees
(excluding  distributions  that represented a return of capital  previously
contributed)  were $80 million,  $80 million and $39 million in 2004,  2003
and 2002, respectively.

Principal unconsolidated equity investees of MAP at December 31, 2004, were
as follows:

<TABLE>
<CAPTION>

                        Company                       Ownership                         Activity
                        -------                       ---------                         --------
<S>           <C>                                     <C>                       <C>
              Centennial Pipeline LLC                   50.0%                   Refined products pipeline system
              Pilot Travel Centers LLC                  50.0%                   Travel centers
              LOCAP LLC                                 49.9%                   Crude oil pipeline system
              LOOP LLC                                  46.7%                   Offshore oil port
              Minnesota Pipe Line Company               33.3%                   Crude oil pipeline system
              Southcap Pipe Line Company                21.6%                   Crude oil pipeline system

</TABLE>

PTC, a MAP joint venture with Pilot Corporation ("Pilot"),  is a nationwide
operator of travel centers in the United  States.  The travel centers offer
diesel  fuel,   gasoline  and  a  variety  of  other  services,   including
on-premises brand name  restaurants.  Pilot and MAP each own a 50% interest
in PTC. PTC is accounted for under the equity method of accounting.

On February 10, 2003, MAP increased its ownership in Centennial  from 33.3%
to 50%.  MAP  paid  $20  million  for  the  increased  ownership  interest.
Centennial is an interstate  refined petroleum  products pipeline extending
from the U.S.  Gulf of Mexico to the Midwest.  Centennial  is accounted for
under the equity method of accounting.

MAP owns a 46.7%  interest  in LOOP,  which is the owner and  operator of a
deepwater  oil port  located 18 miles off the coast of  Louisiana.  LOOP is
accounted for under the equity method of accounting.


                                    19

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED



NOTE J - PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
                                                                                                              December 31
                                                                                                     ---------------------------
                                                                                                              (Millions)
                                                                                                         2004            2003
                                                                                                     -----------     -----------
<S>                                                                                                  <C>             <C>
Refining                                                                                             $    4,230      $    3,679
Marketing                                                                                                 1,881           1,850
Transportation                                                                                            1,660           1,597
Other                                                                                                        64              41
                                                                                                     -----------     -----------
              Total                                                                                       7,835           7,167
Less accumulated depreciation and amortization                                                            3,054           2,725
                                                                                                     -----------     -----------
              Net                                                                                    $    4,781      $    4,442
                                                                                                     ===========     ===========
</TABLE>

Property, plant and equipment at December 31, 2004 and 2003, includes gross
assets acquired under capital leases of $49 million with related amounts in
accumulated  depreciation  and  amortization  of $6 million and $2 million,
respectively.


NOTE K - GOODWILL

The  carrying  amount of  goodwill  was $21  million  for the  years  ended
December 31, 2004 and 2003.  MAP tests for impairment in the fourth quarter
of  each  year.  No  impairment  in the  carrying  value  has  been  deemed
necessary.



NOTE L - INTANGIBLE ASSETS
<TABLE>
<CAPTION>

                                                                      Gross Carrying          Accumulated         Net Carrying
                                                                          Amount             Amortization            Amount
                                                                     -----------------    ------------------    ----------------
                                                                                              (Millions)
<S>                                                                  <C>                  <C>                   <C>
INTANGIBLE ASSETS AS OF DECEMBER 31, 2004, ARE AS FOLLOWS:
       Amortized intangible assets:
              Branding agreements                                    $             53     $              19     $            34
              Other                                                                --                    --                  --
                                                                     -----------------    ------------------    ----------------
                    Total                                            $             53     $              19     $            34
                                                                     =================    ==================    ================


       Unamortized intangible assets:
              Unrecognized prior service costs                       $             20     $              --     $            20
              Other                                                                 5                    --                   5
                                                                     -----------------    ------------------    ----------------
                    Total                                            $             25     $              --     $            25
                                                                     =================    ==================    ================


INTANGIBLE ASSETS AS OF DECEMBER 31, 2003, ARE AS FOLLOWS:
       Amortized intangible assets:
              Branding agreements                                    $             53     $              19     $            34
              Other                                                                 2                     1                   1
                                                                     -----------------    ------------------    ----------------
                    Total                                            $             55     $              20     $            35
                                                                     =================    ==================    ================


       Unamortized intangible assets:
              Unrecognized prior service costs                       $             23     $              --     $            23
              Other                                                                 4                    --                   4
                                                                     -----------------    ------------------    ----------------
                    Total                                            $             27     $              --     $            27
                                                                     =================    ==================    ================

</TABLE>

Amortization  expense  related to  intangibles  during 2004,  2003 and 2002
totaled $7  million,  $6 million and $6  million,  respectively.  Estimated
amortization  expense for the years 2005-2009 is $6 million, $5 million, $4
million, $4 million and $3 million, respectively.

                                    20

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE M - SHORT-TERM DEBT

MAP had a $350 million  committed  revolving  credit facility with MOC that
terminated on January 31, 2005.  During 2004,  MAP borrowed and repaid $399
million under this revolving credit facility.  Additionally, MAP has a $500
million   revolving   credit  agreement  with  Ashland  and  Marathon  that
terminates in March 2005, as discussed in Note D. During 2004, MAP borrowed
and repaid $1,717 million under this revolving credit facility. At December
31, 2004, there were no borrowings against either of these facilities.




NOTE N - LONG-TERM DEBT
<TABLE>
<CAPTION>
                                                                                                             December 31
                                                                                                     ---------------------------
                                                                                                              (Millions)
                                                                                                         2004           2003
                                                                                                     -----------     -----------
<S>                                                                                                  <C>             <C>
Capital lease obligations due 2005-2018                                                              $       44      $       46
Detroit refinery project loan - Note D                                                                      122              --
Revolving credit facility due 2009 (a)                                                                       --              --
                                                                                                     -----------     -----------
              Total (b)                                                                                     166              46
Amounts due within one year                                                                                  (2)             (2)
                                                                                                     -----------     -----------
              Long-term debt due after one year                                                      $      164      $       44
                                                                                                     ===========     ===========
</TABLE>

(a)  MAP has a $500  million  five-year  revolving  credit  facility  which
     terminates in May 2009.  Interest on this facility is based on defined
     short-term  market  rates.  During the term of the  agreement,  MAP is
     obligated to pay a variable facility fee on total  commitments,  which
     at December 31, 2004 was 0.125%.  At December 31, 2004,  there were no
     borrowings against this facility.

(b)  Required  payments of long-term debt for the years  2006-2009,  are $2
     million,  $3  million,  $3 million and $3  million,  respectively.  In
     addition, repayments of the Detroit refinery project loan, expected to
     begin in 2006, will be funded solely from Detroit refinery cash flows.


NOTE O - ASSET RETIREMENT OBLIGATIONS

Changes in asset retirement obligations during the year were:
<TABLE>
<CAPTION>


                                                                                                         (Millions)
                                                                                              -------------------------------
                                                                                                   2004                2003
                                                                                              -------------       ------------
<S>                                                                                           <C>                 <C>
Asset retirement obligations as of January 1                                                  $          1        $          2
       Liabilities incurred                                                                              3                  --
       Liabilities settled (a)                                                                          --                  (1)
                                                                                              -------------       -------------
Asset retirement obligations as of December 31                                                $          4        $          1
                                                                                              =============       =============
(a) Related to assets sold in 2003.

</TABLE>

NOTE P - SUPPLEMENTAL CASH FLOW INFORMATION
<TABLE>
<CAPTION>

                                                                                                 Year Ended December 31
                                                                                      --------------------------------------------
                                                                                                       (Millions)
                                                                                         2004            2003           2002
                                                                                      ----------     ----------     -----------
<S>                                                                                   <C>            <C>             <C>
NET CASH PROVIDED FROM OPERATING ACTIVITIES INCLUDED:
       Interest and other financing costs paid (net of amount capitalized)            $        4     $        2      $        1
       Income taxes paid to taxing authorities                                                 3              3               7
NONCASH INVESTING AND FINANCING ACTIVITIES:
       Notes received in asset disposal transactions                                          --             --               5
       Net assets contributed to joint ventures                                                3             42              --
       Member capital contributions                                                           18             14              26
       Capital lease obligation - asset acquired                                              --             41              --
       Liabilities assumed in connection with capital expenditures                             1              1              --

</TABLE>
                                    21

<PAGE>


NOTES TO CONSOOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE Q - LEASES

MAP leases a wide  variety of  facilities  and  equipment  under  operating
leases,  including  land and  building  space,  office  equipment,  storage
facilities and  transportation  equipment.  Most  long-term  leases include
renewal options and, in certain leases,  purchase  options.  Future minimum
commitments   for  capital  lease   obligations  and  for  operating  lease
obligations  having  remaining  noncancelable  lease terms in excess of one
year are as follows:

<TABLE>
<CAPTION>

                                                                       Capital          Operating
                                                                       Leases            Leases
                                                                     Obligations      Obligations
                                                                    ------------      -----------
                                                                              (Millions)
<S>                                                                  <C>              <C>
2005                                                                 $        5       $       65
2006                                                                          5               48
2007                                                                          5               24
2008                                                                          5               17
2009                                                                          6               12
Later years                                                                  40               31
Sublease rentals                                                             --               (1)
                                                                     -----------      -----------

       Total minimum lease payments                                  $       66       $      196
                                                                                      ===========

Less imputed interest costs                                                  22
                                                                     -----------
       Present value of net minimum lease payments
       included in long-term debt                                    $       44
                                                                     ===========

</TABLE>

<TABLE>
<CAPTION>
                                                                                                 Year Ended December 31
                                                                                     --------------------------------------------
                                                                                                      (Millions)
                                                                                         2004           2003            2002
<S>                                                                                   <C>            <C>             <C>
OPERATING LEASE RENTAL EXPENSE WAS:
       Minimum rental                                                                 $       85     $       85      $       97
       Contingent rental                                                                      15             12              13
       Sublease rentals                                                                       --             --              (2)
                                                                                      -----------    -----------     -----------
              Net rental expense                                                      $      100     $       97      $      108
                                                                                      ===========    ===========     ===========

</TABLE>

NOTE R - DERIVATIVE INSTRUMENTS

The  following  table sets forth  quantitative  information  by category of
derivative  instruments  at December 31, 2004 and 2003.  These  amounts are
reported on a gross basis by individual derivative instrument.  The amounts
exclude the variable  margin  deposit  balances  held in various  brokerage
accounts.  MAP did not  have any  foreign  currency  contracts  in place at
December 31, 2004 or 2003.

<TABLE>
<CAPTION>

                                                                                     Year Ended December 31
                                                                  -----------------------------------------------------------
                                                                                          (Millions)
                                                                              2004                            2003
                                                                  ---------------------------    ----------------------------
                                                                   Assets(a)  (Liabilities)(a)   Assets (a)   (Liabilities)(a)
                                                                  ----------  ----------------   ----------   ----------------
<S>                                                               <C>             <C>            <C>             <C>
COMMODITY INSTRUMENTS, NON-HEDGE DESIGNATION:
       Exchange-traded commodity futures                          $      216      $     (206)    $       77      $      (83)
       Exchange-traded commodity options                                  79             (65)             5             (11)
       Over-the-counter ("OTC") commodity swaps                           48             (30)             7             (12)
       OTC commodity options                                               5              (4)             4              (3)

NONTRADITIONAL INSTRUMENTS (b)                                            86             (91)            70             (61)


</TABLE>
                                    22

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE R - DERIVATIVE INSTRUMENTS - CONTINUED

(a)  The fair value and carrying  value of derivative  instruments  are the
     same.  The fair value amounts for OTC positions are  determined  using
     option-pricing   models  or  dealer   quotes.   The  fair   values  of
     exchange-traded  positions  are based on market  quotes  derived  from
     major exchanges.  MAP's  consolidated  balance sheet is reflected on a
     net  asset/(liability)  basis by brokerage  firm,  as permitted by the
     master netting agreements.
(b)  Certain physical commodity  contracts are classified as nontraditional
     derivative  instruments  because  certain  volumes  covered  by  these
     contracts  are  physically  netted at particular  delivery  locations.
     Additionally,  other  physical  contracts that involve flash title are
     accounted for as nontraditional derivative instruments.

 MAP  recorded  a net  derivative  loss of $264  million  in  2004,  with a
 derivative loss of $360 million recorded in cost of revenues, a derivative
 gain of $88 million  recorded in revenue and a gain of $8 million recorded
 in other  income.  In 2003,  MAP  recorded a net  derivative  loss of $162
 million,  with a  derivative  loss of  $133  million  recorded  in cost of
 revenues,  a  derivative  loss of $25  million  recorded  in revenue and a
 derivative  loss of $4 million  recorded  in other  income.  In 2002,  MAP
 recorded a net derivative loss of $124 million,  with a derivative loss of
 $76 million recorded in cost of revenues, a derivative loss of $48 million
 recorded  in  revenues  and a  derivative  loss  of less  than $1  million
 recorded in other income.


NOTE S - FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying  value of most  financial  instruments  is based on historical
costs.  The  carrying  values  of cash and cash  equivalents,  receivables,
payables,  long-term  receivables and long-term debt approximate their fair
value.

MAP's unrecognized  financial  instruments consist of financial  guarantees
and  commitments  to extend  credit.  For  details  relating  to  financial
guarantees, see Note T.


NOTE T - CONTINGENCIES AND COMMITMENTS

MAP is the subject of, or party to, a number of pending or threatened legal
actions,  contingencies  and  commitments  involving  a variety of matters,
including  laws and  regulations  relating to the  environment.  Certain of
these  matters  are  discussed  below.  The  ultimate  resolution  of these
contingencies could, individually or in the aggregate, be material to MAP's
consolidated  financial statements.  However,  management believes that MAP
will remain a viable and competitive  enterprise even though it is possible
that these contingencies could be resolved unfavorably.

ENVIRONMENTAL MATTERS - MAP is subject to federal, state, local and foreign
laws and  regulations  relating to the  environment.  These laws  generally
provide for control of pollutants released into the environment and require
responsible  parties to undertake  remediation of hazardous  waste disposal
sites.  Penalties  may be imposed for  noncompliance.  Marathon and Ashland
have retained the  liabilities,  subject to certain  thresholds,  for costs
associated  with  remediating  properties  conveyed  to MAP for  conditions
existing  prior to  January  1,  1998.  The  costs  associated  with  these
thresholds are not expected to be material to the MAP financial statements.
At December 31, 2004 and 2003,  MAP's accrued  liabilities  for remediation
totaled $26  million and $23  million,  respectively.  It is not  presently
possible to estimate  the  ultimate  amount of all  remediation  costs that
might be incurred or the  penalties  that may be imposed.  Receivables  for
recoverable  costs from certain states,  under programs to assist companies
in cleanup efforts related to underground storage tanks at retail marketing
outlets,  were $11 million  and $13 million at December  31, 2004 and 2003,
respectively.

MAP has made substantial capital  expenditures to bring existing facilities
into  compliance  with various laws relating to the  environment.  In 2004,
2003 and 2002, such capital expenditures for environmental controls totaled
$397 million, $323 million and $119 million,  respectively. MAP anticipates
making  additional  such  expenditures  in the future;  however,  the exact
amounts  and  timing of such  expenditures  are  uncertain  because  of the
continuing evolution of specific regulatory requirements.

On May  11,  2001,  MAP  entered  into  a  consent  decree  with  the  U.S.
Environmental  Protection  Agency  which  commits  it to  complete  certain
agreed-upon  environmental  programs  over an eight-year  period  primarily
aimed at reducing air emissions at its seven refineries. The court approved
this consent decree on August 28, 2001. The total one-time expenditures for
these  environmental  projects  are  approximately  $370  million  over the
eight-year  period,  with about $240 million  incurred through December 31,
2004. In addition,  MAP has nearly completed certain agreed on supplemental
environmental projects as part of

                                    23

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE T - CONTINGENCIES AND COMMITMENTS - CONTINUED

this  settlement  of an  enforcement  action  for  alleged  Clean  Air  Act
violations, at a cost of $9 million. MAP believes that this settlement will
provide MAP with  increased  permitting  and  operating  flexibility  while
achieving significant emission reductions.

MAP is a defendant,  along with many other refining  companies,  in over 40
cases  in  11  states   alleging  methyl   tertiary-butyl   ether  ("MTBE")
contamination in groundwater.  The plaintiffs generally are water providers
or governmental  authorities  and they allege that refiners,  manufacturers
and  sellers of gasoline  containing  MTBE are liable for  manufacturing  a
defective  product and that owners and operators of retail  gasoline  sites
have allowed MTBE to be discharged into the  groundwater.  Several of these
lawsuits  allege  contamination  that is outside of MAP's marketing area. A
few of the cases seek  approval  as class  actions.  Many of the cases seek
punitive  damages  or  treble  damages  under a  variety  of  statutes  and
theories. MAP stopped producing MTBE at its refineries in October 2002. The
potential impact of these recent cases and future  potential  similar cases
is uncertain. MAP will defend these cases vigorously.

<TABLE>
<CAPTION>

GUARANTEES - MAP has issued the following guarantees:
                                                                                                        UNDISCOUNTED PAYMENTS
                                                                           Term                        AS OF DECEMBER 31, 2004
                                                                        -----------                    -----------------------
                                                                                                               (MILLIONS)
<S>                                                            <C>                                            <C>
Indebtedness of equity investees:
      LOCAP (a)                                                Perpetual-Loan Balance Varies                  $      23
      LOOP (a)                                                          2005 - 2024                                 160
      Centennial (b)                                                    2007 - 2024                                  75

Other:
      Centennial catastrophic event (c)                                 Indefinite                                   50
      Mobile transportation equipment leases (d)                        2005 - 2009                                   5
      Asset sale (e)                                                    Indefinite                                    5
</TABLE>

(a)  MAP holds  interests  in an offshore oil port,  LOOP,  and a crude oil
     pipeline system, LOCAP LLC ("LOCAP"). Both LOOP and LOCAP have secured
     various  project  financings  with  throughput and deficiency  ("T&D")
     agreements.  A T&D agreement creates a potential obligation to advance
     funds in the event of a cash shortfall. When these rights are assigned
     to a  lender  to  secure  financing,  the T&D is  considered  to be an
     indirect  guarantee  of  indebtedness.  Under the  agreements,  MAP is
     required to advance funds if the investees are unable to service debt.
     Any such advances are considered  prepayments of future transportation
     charges. The terms of the agreements vary but tend to follow the terms
     of the underlying  debt.  Assuming  nonpayment by the  investees,  the
     maximum  potential  amount of future  payments under the guarantees is
     estimated to be $183 million and $192 million at December 31, 2004 and
     2003,  respectively.  Included in these  amounts are a LOOP  revolving
     credit  facility of $25 million at December  31, 2004 and 2003,  and a
     LOCAP  revolving  credit  facility of $23 million at December 31, 2004
     and 2003. The undrawn  portion of the revolving  credit  facilities is
     $34 million as of December 31, 2004 and 2003.
(b)  MAP holds an interest in a refined products pipeline,  Centennial, and
     has guaranteed the repayment of Centennial's outstanding balance under
     a  Master  Shelf  Agreement,  which  expires  in  2024,  and a  Credit
     Agreement,  which expires in 2007.  The  guarantees  arose in order to
     obtain  adequate  financing.  Prior to  expiration of the Master Shelf
     Agreement,  MAP could be relinquished  from  responsibility  under the
     guarantee   should   Centennial  meet  certain   financial  tests.  If
     Centennial defaults on its outstanding  balance, the estimated maximum
     potential  amount of future  payments is $75  million at December  31,
     2004 and 2003.
(c)  The agreement between Centennial and its members allows each member to
     contribute cash in lieu of Centennial  procuring separate insurance in
     the event of third-party  liability arising from a catastrophic event.
     There is an  indefinite  term for the  agreement and each member is to
     contribute  cash in  proportion  to its  ownership  interest,  up to a
     maximum  amount of $50  million  at  December  31,  2004 and 2003.  In
     February 2003, MAP's ownership  interest in Centennial  increased from
     33% to  50%.  As a  result  of  this  modification  to the  Centennial
     catastrophic  event  guarantee,  MAP recorded a $4 million  obligation
     during 2003.
(d)  These leases contain terminal rental adjustment  clauses which provide
     that MAP will  indemnify  the lessor to the extent  that the  proceeds
     from the sale of the asset at the end of the lease  fall  short of the
     specified maximum percent of original value.
(e)  MAP  entered  into  certain  performance  and general  guarantees  and
     environmental and general indemnifications in connection with the 2004
     sale of a  refined  products  terminal.  The  terms  vary from 2006 to
     indefinite and the maximum  potential  amount of future payments under
     the guarantees and indemnifications is estimated to be $5 million.

                                    24

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE T - CONTINGENCIES AND COMMITMENTS - CONTINUED

CONTRACT  COMMITMENTS  - At  December  31,  2004 and 2003,  MAP's  contract
commitments to acquire  property,  plant and equipment totaled $268 million
and $273 million,  respectively.  Included in these contract commitments is
$65 million related to the  approximately  $300 million in refinery upgrade
and expansion  projects for MAP's 74,000 barrels per day Detroit,  Michigan
refinery.  Marathon  will  loan MAP the  funds  necessary  for the  Detroit
refinery upgrade and expansion projects. The LLC Agreement has been amended
to allow the Detroit  refinery  cash flows to be  dedicated to service this
debt.  The Put/Call  Agreement  was amended to provide  that,  in the event
Marathon  exercises its call right, the Detroit refinery will not be valued
at an amount less than the working capital related to the Detroit refinery,
excluding  working  capital  additions  related to the  expansion and clean
fuels projects.

In May 2001, MAP entered into a Transportation Agreement with Centennial in
which MAP guarantees to ship certain  volumes on the  Centennial  system or
make deficiency  payments for any volume shortfall.  Any deficiency payment
made by MAP  will be  treated  as a  prepayment  of  future  transportation
charges. In 2004 and 2003, MAP made deficiency payments to Centennial of $4
million and $4 million, respectively.

PUT/CALL AGREEMENT - As part of the formation of PTC, MAP and Pilot entered
into a  Put/Call  and  Registration  Rights  Agreement  ("Agreement").  The
Agreement  provides that any time after September 1, 2008,  Pilot will have
the right to sell its  interest  in PTC to MAP for an amount of cash and/or
MOC, MAP or Ashland equity  securities  equal to the product of 90% (95% if
paid in securities) of the fair market value of PTC at the time  multiplied
by Pilot's percentage interest in PTC. At any time after September 1, 2011,
under  certain  conditions,  MAP will  have the right to  purchase  Pilot's
interest  in PTC for an amount of cash and/or  MOC,  MAP or Ashland  equity
securities equal to the product of 105% (110% if paid in securities) of the
fair  market  value of PTC at the time  multiplied  by  Pilot's  percentage
interest in PTC.


NOTE U - ACCOUNTING STANDARDS NOT YET ADOPTED

During  December  2004, the FASB issued  Statement of Financial  Accounting
Standards No. 123 (revised 2004),  Share-Based Payment ("SFAS No. 123R") as
a  revision  of  Statement  of  Financial  Accounting  Standards  No.  123,
Accounting for Stock Based  Compensation.  This statement requires entities
to measure the cost of employee  services received in exchange for an award
of  equity  instruments  based on the fair  value of the award on the grant
date. That cost will be recognized over the period during which an employee
is  required  to provide  service in  exchange  for the award,  usually the
vesting  period.  In addition,  liability  awards will be  remeasured  each
reporting  period.  In 2003,  MAP adopted the fair value  method for grants
made,  modified or settled on or after January 1, 2003 for MOC  stock-based
compensation  granted to MAP employees.  Accordingly,  management  does not
expect the  adoption of SFAS No. 123R to have a material  effect on results
of  operations,  financial  position  or  cash  flows.  This  statement  is
effective for MAP on July 1, 2005.  MAP has not yet  determined  whether to
adopt this standard earlier than the effective date.

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