SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-K/A

                                 AMENDMENT NO. 1

              Annual Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                  FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2002

                          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): 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]

     At October  31,  2002,  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  $1,780,870,376.  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 October 31,  2002,  there were  68,242,197  shares of  Registrant's
common stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

     Portions of Registrant's  Annual Report to Shareholders for the fiscal
year ended  September 30, 2002 are  incorporated by reference into Parts I,
II and IV.

     Portions of  Registrant's  definitive  Proxy Statement for its January
30, 2003 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, 2002 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, 2002 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>


ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (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 or incorporated by reference in this report are listed in
the index on page 20.

     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

3.1      Third Restated  Articles of  Incorporation  of Ashland (filed as
         Exhibit 3 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.

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  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  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  Form 10-K for the fiscal year
         ended September 30, 2001 and incorporated herein by reference).

The  following  Exhibits  10.1  through  10.15  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 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.

10.3     Ashland Inc. Deferred Compensation Plan.

10.4     Tenth  Amended  and  Restated  Ashland  Inc.   Supplemental  Early
         Retirement Plan for Certain Employees, as amended.

10.5     Ashland Inc. Salary Continuation Plan.

10.6     Form of Ashland Inc. Executive Employment Contract between Ashland
         Inc. and certain executives of Ashland.

10.7     Form of Separation  Agreement and General  Release between Ashland
         Inc.  and Paul W.  Chellgren,  former Chief  Executive  Officer of
         Ashland.

10.8     Form of  Indemnification  Agreement  between Ashland Inc. and each
         member  of its  Board  of  Directors  (filed  as  Exhibit  10.8 to
         Ashland's  Form 10-K for the fiscal year ended  September 30, 2001
         and incorporated herein by reference).

10.9     Ashland Inc. Nonqualified Excess Benefit Pension Plan.

10.10    Ashland Inc.  Long-Term  Incentive  Plan (filed as Exhibit 10.9 to
         Ashland's  Form 10-K for the fiscal year ended  September 30, 2000
         and incorporated herein by reference).

10.11    Ashland Inc. Directors' Charitable Award Program.

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

<PAGE>


10.13    Ashland Inc. 1995 Performance Unit Plan (filed as Exhibit 10.12 to
         Ashland's  Form 10-K for the fiscal year ended  September 30, 2000
         and incorporated herein by reference).

10.14    Ashland Inc. 1997 Stock Incentive Plan.

10.15    Amended and Restated Ashland Inc. Incentive Plan.

10.16    Amended  and  Restated  Limited  Liability  Company  Agreement  of
         Marathon  Ashland  Petroleum  LLC dated as of  December  31,  1998
         (filed as Exhibit 10.17 to Ashland's Form 10-K for the fiscal year
         ended September 30, 1999 and incorporated herein by reference).

10.17    Put/Call,  Registration Rights and Standstill Agreement as amended
         to December 31, 1998 among Marathon Oil Company,  USX Corporation,
         Ashland  Inc.  and Marathon  Ashland  Petroleum  (filed as Exhibit
         10.18 to Ashland's  Form 10-K for the fiscal year ended  September
         30, 1999 and incorporated herein by reference).

11       Computation  of  Earnings  Per  Share  (appearing  on  page  48 of
         Ashland's Annual Report to Shareholders, incorporated by reference
         herein, for the fiscal year ended September 30, 2002).

12       Computation of Ratio of Earnings to Fixed Charges.

13       Portions of Ashland's Annual Report to Shareholders,  incorporated
         by reference herein, for the fiscal year ended September 30, 2002.

21       List of subsidiaries.

23.1     Consent of independent auditors.

23.2*    Consent of PricewaterhouseCoopers LLP.

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

99.1*    Certificate  of Chief  Executive  Officer of Ashland  pursuant  to
         Section 906 of the Sarbanes-Oxley  Act of 2002, 18 U.S.C.  Section
         1350.

99.2*    Certificate  of Chief  Financial  Officer of Ashland  pursuant  to
         Section 906 of the Sarbanes-Oxley  Act of 2002, 18 U.S.C.  Section
         1350.

*Filed herewith

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

     (b) REPORTS ON FORM 8-K

     A report on Form 8-K was filed August 2, 2002,  to report that Paul W.
Chellgren,  Chairman and Chief Executive Officer of Ashland,  announced his
plans to retire effective November 15, 2002.

     A report  on Form 8-K was  filed on  August  7,  2002 to  report  that
Ashland had submitted to the SEC the Statements under Oath of the Principal
Executive Officer and the Principal Financial Officer pursuant to the SEC's
June 27, 2002 Order requiring the filing of such statements.

     A report on Form 8-K was filed on August 13, 2002 to report that James
J. O'Brien had been named  President  and Chief  Operating  Officer and was
elected to Ashland's  Board of Directors.  O'Brien would become Chairman of
the Board and Chief  Executive  Officer of Ashland  effective  November 15,
2002 when Paul W. Chellgren,  the then current Chairman and Chief Executive
Officer retired.

     A report on Form 8-K was filed on  September  19,  2002 to report that
James J. O'Brien would become Chief Executive  Officer of Ashland effective
October 1, 2002 and Chairman of the Board effective November 15, 2002.


<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

                                               Date:  March 20, 2003

                                  CERTIFICATION
                                  -------------

Statement Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief
Executive Officer Regarding Facts and Circumstances Relating to Exchange Act
Filings.

     I, James J. O'Brien, Chief Executive Officer of Ashland Inc., certify that:

1.       I have reviewed this annual report on Form 10-K/A of Ashland Inc.;

2.       Based on my  knowledge,  this  annual  report does not contain any
         untrue  statement  of a material  fact or omit to state a material
         fact  necessary  to make  the  statements  made,  in  light of the
         circumstances   under  which  such   statements   were  made,  not
         misleading  with  respect  to the period  covered  by this  annual
         report;

3.       Based  on  my  knowledge,  the  financial  statements,  and  other
         financial  information  included  in this  annual  report,  fairly
         present in all material respects the financial condition,  results
         of operations and cash flows of the registrant as of, and for, the
         periods presented in this annual report;

4.       The registrant's  other certifying  officers and I are responsible
         for   establishing   and  maintaining   disclosure   controls  and
         procedures  (as defined in Exchange  Act Rules  13a-14 and 15d-14)
         for the registrant and have:

a)       designed such  disclosure  controls and  procedures to ensure that
         material  information  relating to the  registrant,  including its
         consolidated  subsidiaries,  is made known to us by others  within
         those  entities,  particularly  during  the  period in which  this
         annual report is being prepared;

b)       evaluated  the   effectiveness  of  the  registrant's   disclosure
         controls and  procedures  as of a date within 90 days prior to the
         filing date of this annual report (the "Evaluation Date"); and

c)       presented  in  this  annual  report  our  conclusions   about  the
         effectiveness  of the disclosure  controls and procedures based on
         our evaluation as of the Evaluation Date;

5.       The registrant's  other certifying  officers and I have disclosed,
         based on our most recent evaluation,  to the registrant's auditors
         and the audit  committee of  registrant's  board of directors  (or
         persons performing the equivalent functions):

a)       all  significant  deficiencies  in  the  design  or  operation  of
         internal  controls which could adversely  affect the  registrant's
         ability to record,  process,  summarize and report  financial data
         and have  identified  for the  registrant's  auditors any material
         weaknesses in internal controls; and

b)       any fraud,  whether or not material,  that involves  management or
         other  employees who have a significant  role in the  registrant's
         internal controls; and

<PAGE>


6.       The registrant's other certifying officers and I have indicated in
         this  annual  report  whether  there were  significant  changes in
         internal  controls or in other  factors  that could  significantly
         affect internal controls subsequent to the date of our most recent
         evaluation,  including  any  corrective  actions  with  regard  to
         significant deficiencies and material weaknesses.

Date: March 20, 2003

                                               /s/ James J. O'Brien
                                               -------------------------------
                                               Chief Executive Officer


                                  CERTIFICATION
                                  -------------

Statement Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief
Financial Officer Regarding Facts and Circumstances Relating to Exchange Act
Filings.

     I, J. Marvin Quin, Chief Financial Officer of Ashland Inc., certify that:

1.       I have reviewed this annual report on Form 10-K/A of Ashland Inc.;

2.       Based on my  knowledge,  this  annual  report does not contain any
         untrue  statement  of a material  fact or omit to state a material
         fact  necessary  to make  the  statements  made,  in  light of the
         circumstances   under  which  such   statements   were  made,  not
         misleading  with  respect  to the period  covered  by this  annual
         report;

3.       Based  on  my  knowledge,  the  financial  statements,  and  other
         financial  information  included  in this  annual  report,  fairly
         present in all material respects the financial condition,  results
         of operations and cash flows of the registrant as of, and for, the
         periods presented in this annual report;

4.       The registrant's  other certifying  officers and I are responsible
         for   establishing   and  maintaining   disclosure   controls  and
         procedures  (as defined in Exchange  Act Rules  13a-14 and 15d-14)
         for the registrant and have:

a)       designed such  disclosure  controls and  procedures to ensure that
         material  information  relating to the  registrant,  including its
         consolidated  subsidiaries,  is made known to us by others  within
         those  entities,  particularly  during  the  period in which  this
         annual report is being prepared;

b)       evaluated  the   effectiveness  of  the  registrant's   disclosure
         controls and  procedures  as of a date within 90 days prior to the
         filing date of this annual report (the "Evaluation Date"); and

c)       presented  in  this  annual  report  our  conclusions   about  the
         effectiveness  of the disclosure  controls and procedures based on
         our evaluation as of the Evaluation Date;

5.       The registrant's  other certifying  officers and I have disclosed,
         based on our most recent evaluation,  to the registrant's auditors
         and the audit  committee of  registrant's  board of directors  (or
         persons performing the equivalent functions):

a)       all  significant  deficiencies  in  the  design  or  operation  of
         internal  controls which could adversely  affect the  registrant's
         ability to record,  process,  summarize and report  financial data
         and have  identified  for the  registrant's  auditors any material
         weaknesses in internal controls; and

b)       any fraud,  whether or not material,  that involves  management or
         other  employees who have a significant  role in the  registrant's
         internal controls; and

6.       The registrant's other certifying officers and I have indicated in
         this  annual  report  whether  there were  significant  changes in
         internal  controls or in other  factors  that could  significantly
         affect internal controls subsequent to the date of our most recent
         evaluation,  including  any  corrective  actions  with  regard  to
         significant deficiencies and material weaknesses.

Date:  March 20, 2003
                                               /s/ J. Marvin Quin
                                               -------------------------------
                                               Chief Financial Officer

<PAGE>


                               EXHIBIT INDEX


Exhibit
No.                           Description
-------  ---------------------------------------------------------------------


23.2     Consent of PricewaterhouseCoopers LLP.

99.1     Certificate  of Chief  Executive  Officer of Ashland  pursuant  to
         Section 906 of the Sarbanes-Oxley  Act of 2002, 18 U.S.C.  Section
         1350.

99.2     Certificate  of Chief  Financial  Officer of Ashland  pursuant  to
         Section 906 of the Sarbanes-Oxley  Act of 2002, 18 U.S.C.  Section
         1350.


<PAGE>



                 MARATHON ASHLAND PETROLEUM LLC AND SUBSIDIARIES



                    AUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 2002




                                    CONTENTS

                                                                            Page

REPORT OF INDEPENDENT ACCOUNTANTS:                                             1

CONSOLIDATED FINANCIAL STATEMENTS:

     CONSOLIDATED STATEMENT OF INCOME -----------------------------------------2
     CONSOLIDATED BALANCE SHEET -----------------------------------------------3
     CONSOLIDATED STATEMENT OF CASH FLOWS -------------------------------------4
     CONSOLIDATED STATEMENT 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 -------------------6
     NOTE C     -  NEW ACCOUNTING STANDARDS -----------------------------------8
     NOTE D     -  RELATED PARTY TRANSACTIONS --------------------------------10
     NOTE E     -  OTHER ITEMS -----------------------------------------------12
     NOTE F     -  PENSIONS AND OTHER POSTRETIREMENT BENEFITS ----------------13
     NOTE G     -  INCOME TAXES ----------------------------------------------14
     NOTE H     -  INVENTORIES -----------------------------------------------15
     NOTE I     -  INVESTMENTS AND LONG-TERM RECEIVABLES ---------------------15
     NOTE J     -  PROPERTY, PLANT AND EQUIPMENT -----------------------------16
     NOTE K     -  SHORT-TERM DEBT -------------------------------------------16
     NOTE L     -  LONG-TERM DEBT --------------------------------------------17
     NOTE M     -  SUPPLEMENTAL CASH FLOW INFORMATION ------------------------17
     NOTE N     -  LEASES ----------------------------------------------------17
     NOTE O     -  DERIVATIVE INSTRUMENTS ------------------------------------18
     NOTE P     -  FAIR VALUE OF FINANCIAL INSTRUMENTS -----------------------18
     NOTE Q     -  CONTINGENCIES AND COMMITMENTS -----------------------------18
     NOTE R     -  SUBSEQUENT EVENTS -----------------------------------------20







<PAGE>







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




                        REPORT OF INDEPENDENT ACCOUNTANTS



February 18, 2003


To the Board of Managers of
Marathon Ashland Petroleum LLC:

In  our  opinion,  the  accompanying   consolidated   financial  statements
appearing on pages 2 through 20 present fairly,  in all material  respects,
the  financial   position  of  Marathon  Ashland   Petroleum  LLC  and  its
subsidiaries  (MAP) at December 31, 2002 and 2001, and the results of their
operations  and their cash flows for each of the three  years in the period
ended December 31, 2002, 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,  which  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.

As discussed in Note C to the financial statements,  MAP changed its method
of accounting for derivatives in 2001.

/s/  PricewaterhouseCoopers LLP



                                     1

<PAGE>

<TABLE>
<CAPTION>

CONSOLIDATED STATEMENT OF INCOME (Dollars in Millions)


MARATHON ASHLAND PETROLEUM LLC AND SUBSIDIARIES

                                                                                         Year Ended December 31
                                                                          ----------------------------------------------------
                                                                               2002                2001                2000
                                                                          -------------       -------------       ------------
<S>                                                                       <C>                 <C>                 <C>
REVENUES AND OTHER INCOME:
       Sales and other operating revenues (including consumer
              excise taxes)                                               $     25,389        $     26,587        $     28,343
       Sales to related parties - Note D                                         1,010                 658                 432
       Income from equity method investments                                        48                  41                  22
       Net gains on disposal of assets                                              40                  30                  28
       Other income                                                                 26                  32                  30
                                                                          -------------       -------------       ------------

              Total revenues and other income                                   26,513              27,348              28,855
                                                                          -------------       -------------       ------------

COSTS AND EXPENSES:
       Cost of revenues (excludes items shown below)                            20,008              19,372              21,745
       Purchases from related parties - Note D                                     882                 710                 660
       Consumer excise taxes                                                     4,250               4,404               4,344
       Depreciation and amortization                                               365                 348                 316
       Selling, general and administrative expenses                                489                 435                 355
       Other taxes                                                                 138                 141                 130
       Inventory market valuation charges (credits) - Note H                       (77)                 77                  --
                                                                          -------------       -------------       ------------

              Total costs and expenses                                          26,055              25,487              27,550
                                                                          -------------       -------------       ------------

INCOME FROM OPERATIONS:                                                            458               1,861               1,305
Net interest and other financial income (costs) - Note E                            (5)                  4                  12
                                                                          -------------       -------------       ------------

INCOME BEFORE INCOME TAXES:                                                        453               1,865               1,317
Provision for income taxes - Note G                                                  3                   9                   7
                                                                          -------------       -------------       ------------

INCOME BEFORE CUMULATIVE EFFECT OF CHANGE
       IN ACCOUNTING PRINCIPLE:                                                    450               1,856               1,310
       Cumulative effect of change in derivatives accounting - Note C               --                 (20)                 --
                                                                          -------------       -------------       ------------

NET INCOME                                                                $        450        $      1,836        $      1,310
                                                                          =============       =============       ============

</TABLE>




            THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
                    CONSOLIDATED FINANCIAL STATEMENTS.

                                     2


<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET (Dollars in Millions)


MARATHON ASHLAND PETROLEUM LLC AND SUBSIDIARIES

                                                                                                         December 31
                                                                                              ---------------------------------
                                                                                                   2002                2001
                                                                                              -------------       -------------
<S>                                                                                           <C>                 <C>
ASSETS:
       Current assets:
              Cash and cash equivalents                                                       $         27        $         33
              Receivables, less allowance for doubtful accounts of $5
                    and $3                                                                           1,196               1,087
              Related party receivables - Note D                                                        52                  59
              Inventories - Note H                                                                   1,915               1,793
              Other current assets                                                                      40                  41
                                                                                              -------------       -------------
                           Total current assets                                                      3,230               3,013

       Investments and long-term receivables - Note I                                                  543                 502
       Property, plant and equipment - net - Note J                                                  4,204               3,977
       Goodwill                                                                                         21                  21
       Intangibles                                                                                      57                  23
       Other noncurrent assets                                                                          26                  22
                                                                                              -------------       -------------

                           Total assets                                                       $      8,081        $      7,558
                                                                                              =============       =============

LIABILITIES:
       Current liabilities:
              Accounts payable                                                                $      2,116        $      1,736
              Accounts payable to related parties - Note D                                              81                  66
              Payroll and benefits payable                                                             125                 166
              Accrued taxes                                                                             41                  42
              Long-term debt due within one year                                                         1                  --
                                                                                              -------------       -------------
                           Total current liabilities                                                 2,364               2,010

       Long-term debt - Note L                                                                           6                   7
       Deferred income taxes - Note G                                                                    5                   4
       Employee benefits obligations - Note F                                                          465                 336
       Deferred credits and other liabilities                                                           55                  35
                                                                                              -------------       -------------

                           Total liabilities                                                         2,895               2,392
                                                                                              -------------       -------------

MEMBERS' CAPITAL (details on page 5)
       Members' contributed capital                                                                  4,285               4,259
       Retained earnings                                                                               942                 912
       Accumulated other comprehensive loss                                                            (41)                 (5)
                                                                                              -------------       -------------
                           Total members' capital                                                    5,186               5,166
                                                                                              -------------       -------------

                           Total liabilities and members' capital                             $      8,081        $      7,558
                                                                                              =============       =============


</TABLE>




            THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
                    CONSOLIDATED FINANCIAL STATEMENTS.

                                     3


<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CASH FLOWS (Dollars in Millions)


MARATHON ASHLAND PETROLEUM LLC AND SUBSIDIARIES

                                                                                         Year Ended December 31
                                                                          -----------------------------------------------------
                                                                               2002                2001                2000
                                                                          -------------       -------------       -------------
<S>                                                                       <C>                 <C>                 <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

OPERATING ACTIVITIES:
Net income                                                                $        450        $      1,836        $      1,310
Adjustments to reconcile to net cash provided from
       operating activities:
       Depreciation and amortization                                               365                 348                 316
       Inventory market valuation charges (credits)                                (77)                 77                  --
       Pensions and other postretirement benefits                                   69                  44                  30
       Cumulative effect of change in accounting principle                          --                  20                  --
       Deferred income taxes                                                         1                  --                  --
       Net gains on disposal of assets                                             (40)                (30)                (28)
       Equity income from investees                                                (48)                (41)                (22)
       Distributions from investees                                                 39                  31                  25
       Changes in:
              Current receivables                                                 (105)                300                (278)
              Inventories                                                          (45)                (59)                 (5)
              Accounts payable and other current liabilities                       434                (511)                371
              Receivables from/payables to related parties                          39                 (26)                 38
       All other - net                                                               2                  35                 (41)
                                                                          -------------       -------------       -------------
              Net cash provided from operating activities                        1,084               2,024               1,716
                                                                          -------------       -------------       -------------

INVESTING ACTIVITIES:
Capital expenditures                                                              (611)               (576)               (637)
Disposal of assets                                                                  89                  51                  70
Loan transactions  - principal loaned                                              (14)                (31)                (46)
                   - principal collected                                            14                  35                  42
Restricted cash  - deposits                                                        (79)                (62)                (54)
                 - withdrawals                                                      48                  54                  53
Investments    -  contributions                                                   (100)                (16)                 (1)
               -  loans and advances                                                --                  (5)                 (5)
               -  returns and repayments                                            --                  10                  --
                                                                          -------------       -------------       -------------
              Net cash used in investing activities                               (653)               (540)               (578)
                                                                          -------------       -------------       -------------

FINANCING ACTIVITIES:
Revolving credit facilities  -  borrowings - Note D                                701                 294                 931
                             - repayments - Note D                                (701)               (294)               (931)
Debt repayments                                                                     --                  (1)                (14)
Member distributions                                                              (437)             (1,508)             (1,104)
                                                                          -------------       -------------       -------------
              Net cash used in financing activities                               (437)             (1,509)             (1,118)
                                                                          -------------       -------------       -------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                (6)                (25)                 20

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                      33                  58                  38
                                                                          -------------       -------------       -------------

CASH AND CASH EQUIVALENTS AT END OF YEAR                                  $         27        $         33        $         58
                                                                          =============       =============       =============


See Note M for supplemental cash flow information.

</TABLE>
              THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
                       CONSOLIDATED FINANCIAL STATEMENTS.

                                       4


<PAGE>

<TABLE>
<CAPTION>

CONSOLIDATED STATEMENT OF MEMBERS' CAPITAL (Dollars in Millions)


MARATHON ASHLAND PETROLEUM LLC AND SUBSIDIARIES


                                                      Members' Capital                          Comprehensive Income
                                                         Year Ended                                  Year Ended
                                                         December 31                                 December 31
                                            ----------------------------------------   ----------------------------------------
                                                2002            2001          2000          2002          2001          2000
                                            ------------   ----------    -----------   -----------   -----------    -----------
<S>                                         <C>            <C>           <C>            <C>          <C>            <C>
MEMBERS' CONTRIBUTED CAPITAL:
     Balance at beginning of year           $     4,259    $    4,244    $    4,218
     Member contributions                            26            15            26
                                            ------------   -----------   -----------
     Balance at end of year                       4,285         4,259         4,244
                                            ------------   -----------   -----------

RETAINED EARNINGS:
     Balance at beginning of year                   912           601           395
     Net income                                     450         1,836         1,310    $      450    $    1,836     $    1,310
     Distributions to members                      (420)       (1,525)       (1,104)
                                            ------------    ----------   -----------
     Balance at end of year                         942           912           601
                                            ------------    ----------   -----------

ACCUMULATED OTHER COMPREHENSIVE
LOSS:
     Minimum pension liability adjustments:
         Balance at beginning of year                (5)           (4)           --
         Changes during the year                    (33)           (1)           (4)          (33)           (1)            (4)
                                            ------------    ----------   -----------
         Balance at end of year                     (38)           (5)           (4)
                                            ------------    ----------   -----------

     Deferred gains (losses) on derivative
     instruments:
         Balance at beginning of year                --            --            --
         Cumulative effect adjustment                --             6            --            --             6             --
         Reclassification of the cumulative
              effect adjustment into
              income                                 --            (6)           --            --            (6)            --
         Changes in fair value                       (3)           --            --            (3)           --             --
                                            ------------    ----------   -----------   -----------   -----------    -----------
         Balance at end of year                      (3)           --            --
                                            ------------    ----------   -----------

         TOTAL                                      (41)           (5)           (4)   $      414    $    1,835     $    1,306
                                            ------------    ----------   -----------   ===========   ===========    ===========

TOTAL MEMBERS' CAPITAL                      $     5,186     $   5,166    $    4,841
                                            ============    ==========   ===========

</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 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 percent  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). 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 percent (90 percent 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 percent 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 & 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,  is  actively  engaged  in the  pipeline
transportation of crude oil and petroleum products.

In 2002, 2001 and 2000, MAP recorded capital contributions from Marathon of
$3 million,  $2 million and $2 million,  respectively,  and from Ashland of
$20 million, $10 million and $24 million,  respectively,  for environmental
improvements.  The LLC Agreement  stipulates that ownership interest in MAP
will not be adjusted as a result of such  contributions.  In 2002 and 2001,
MAP  recorded   capital   contributions  of  $3  million  and  $1  million,
respectively,  from Marathon,  and in 2001, $2 million from Ashland related
to  stock-based  compensation  expense  which is  allocated  100 percent to
Marathon and Ashland, respectively.


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 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  amortized  into  income  in  accordance  with the  underlying
remaining  useful life of the associated  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 generally accepted  accounting  principles 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 and equity method
investments;   valuation   allowances  for  receivables  and   inventories;
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.

                                     6

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE B - SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - CONTINUED

REVENUE  RECOGNITION - Revenues are recognized  generally when products are
shipped or services are provided to customers  and 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  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  settled  in  cash  are  recorded  in both
revenues and cost of revenues as separate sales and purchase  transactions.
During the years ended December 31, 2002, 2001 and 2000,  matching buy/sell
transactions  were  $4,335  million,  $3,817  million  and $3,882  million,
respectively.

CASH AND CASH EQUIVALENTS - Cash and cash equivalents  include cash on hand
and on deposit and  investments  with related parties in highly liquid debt
instruments  with  maturities  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  reflects  the  extent  that the
recorded  LIFO cost  basis of crude oil and  refined  products  inventories
exceeds net realizable value. The reserve is decreased to reflect increases
in market prices and inventory  turnover and increased to reflect decreases
in market prices.  Changes in the inventory market valuation reserve result
in noncash charges or credits to costs and expenses.

DERIVATIVE INSTRUMENTS - MAP uses commodity-based derivative instruments to
manage its exposure to commodity price risk.  Management has authorized the
use of futures,  forwards, swaps and combinations of options related to the
purchase or sale of crude oil, refined products and natural gas. Changes in
the fair value of all  derivatives  are  recognized  immediately in income,
within revenues or cost of revenues,  unless the derivative  qualifies as a
hedge of future cash flows or certain foreign  currency  exposures.  During
2002 and 2001, MAP did not elect to designate any derivatives as qualifying
for hedge accounting treatment.

PROPERTY,   PLANT  AND  EQUIPMENT  -  Property,  plant  and  equipment  are
depreciated  principally by the  straight-line  method over their estimated
useful lives, which range from 3 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 $37 million,  $23
million and $25 million for 2002, 2001 and 2000, 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.

MAJOR  MAINTENANCE  ACTIVITIES - MAP incurs planned major maintenance costs
primarily for refinery 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  LIABILITIES - Environmental  expenditures are capitalized if
the costs mitigate or prevent future  contamination or if the costs improve
existing  assets'  environmental  safety or  efficiency.  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.   At  December  31,  2002  and  2001,   the  portion  of  the
environmental liability that was discounted was not material. If recoveries
of  remediation  costs from third  parties are  probable,  a receivable  is
recorded.

PENSIONS  AND OTHER  POSTRETIREMENT  BENEFITS  - MAP has a  noncontributory
defined benefit pension plan with two benefit payment  formulas and several
related excess benefit plans covering substantially all employees. Benefits
under its final pay formula are based  primarily upon age, years of service
and the highest consecutive three years' earnings during the last ten years
before

                                     7

<PAGE>



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE B - SUMMARY OF PRINCIPAL ACCOUNTING POLICIES - CONTINUED

retirement.  Benefits under its pension equity formula are based  primarily
upon  age,  years of  service  and the final  three  years of  earnings  at
retirement.  MAP also  participates in a  multiemployer  plan that provides
coverage for less than 5 percent of its  employees,  covering  both pension
and health care benefits.

MAP also has a retiree  health  plan  covering  most  employees  upon their
retirement.  Health benefits are provided through  comprehensive  hospital,
surgical and major medical benefit provisions or through health maintenance
organizations,  subject to various cost sharing features. In addition, life
insurance  benefits are provided to certain nonunion and union  represented
employees  primarily  based on annual  base salary at  retirement.  Retiree
health  and  life  insurance   benefits  (other  benefits)  have  not  been
prefunded.

STOCK-BASED  COMPENSATION  -  MAP  applies  the  principles  of  Accounting
Principles   Board  Opinion  No.  25,   "Accounting  for  Stock  Issued  to
Employees,"  to the  stock-based  compensation  granted to MAP employees by
Marathon,  and  MAP  applies  the  principles  of  Statement  of  Financial
Accounting Standards No. 123, "Accounting For Stock-Based Compensation," as
interpreted  by Emerging  Issues Task Force Issue  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
stock-based  compensation  recorded in selling,  general and administrative
expenses  were $3  million  in 2002  and  2001.  Marathon  will  adopt  the
Statement  of  Financial  Accounting  Standards  No. 148,  "Accounting  for
Stock-Based Compensation - Transition and Disclosure," effective January 1,
2003; and the impact on MAP is expected to be immaterial.

INSURANCE - MAP is insured for  catastrophic  casualty and certain property
and business interruption  exposures, as well as those risks required to be
insured by law or contract.  Costs  resulting  from  noninsured  losses are
charged against income upon occurrence.

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 5 percent of annual gross revenues.

RECLASSIFICATIONS - Certain reclassifications of prior years' data have been
made to conform to 2002 classifications.


NOTE C - NEW ACCOUNTING STANDARDS

ADOPTED IN THE REPORTING  PERIODS - Effective  January 1, 2001, MAP adopted
Statement  of  Financial  Accounting  Standards  No. 133,  "Accounting  for
Derivative  Instruments and Hedging  Activities" (SFAS No. 133), as amended
by SFAS  Nos.  137 and 138.  This  statement  requires  recognition  of all
derivatives as either assets or  liabilities at fair value.  The transition
adjustment  related to  adopting  SFAS No.  133 on  January  1,  2001,  was
recognized as a cumulative  effect of change in accounting  principle.  The
unfavorable  cumulative effect on net income was $20 million. The favorable
cumulative effect included within Other  Comprehensive  Income (OCI) was $6
million.  A portion of the  cumulative  effect  adjustment  relating to the
adoption  of SFAS No.  133 was  recognized  in OCI  which  relates  only to
deferred gains or losses for hedge  transactions as of December 31, 2000. A
reconciliation of the changes in OCI relating to derivative  instruments is
included in the Statement of Members' Capital.

Effective  January  1,  2002,  MAP  adopted  the  following  Statements  of
Financial Accounting Standards:

o        No. 141, "Business Combinations" (SFAS No. 141),

o        No. 142,  "Goodwill and Other  Intangible  Assets" (SFAS No. 142),
         and

o        No. 144,  "Accounting  for  Impairment  or Disposal of  Long-Lived
         Assets (SFAS No. 144)

SFAS No. 141 requires that all business  combinations  initiated after June
30, 2001, be accounted for under the purchase method.

                                     8


<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE C - NEW ACCOUNTING STANDARDS - CONTINUED

SFAS No. 142 addresses  the  accounting  for goodwill and other  intangible
assets  after  an  acquisition.  Effective  January  1,  2002,  MAP  ceased
amortization of existing  goodwill,  which results in a favorable impact on
annual income of approximately  $2 million.  MAP has completed the required
transitional  impairment  test  for  existing  goodwill  as of the  date of
adoption. No impairment of goodwill was indicated.

SFAS No. 144 establishes a single accounting model for long-lived assets to
be disposed of by sale and provides additional  implementation guidance for
assets to be held and used and assets to be disposed of other than by sale.
For long-lived  assets to be disposed of by sale, SFAS No. 144 broadens the
definition  of those  disposals  that  should  be  reported  separately  as
discontinued operations. The adoption of SFAS No. 144 had no initial effect
on MAP's financial statements.

In late 2002 and early 2003, the FASB issued the following:

o        Statement of Financial  Accounting  Standards No. 148  "Accounting
         for Stock-Based  Compensation - Transition and  Disclosure"  (SFAS
         No. 148),

o        FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure
         Requirements  for  Guarantees,  Including  Indirect  Guarantees of
         Indebtedness of Others" (FIN 45), and

o        FASB  Interpretation  No. 46,  "Consolidation of Variable Interest
         Entities" (FIN 46).

Each of these  pronouncements  required the  immediate  adoption of certain
disclosure  requirements,  which  have been  reflected  in these  financial
statements.  The accounting  requirements of these  pronouncements  will be
adopted in future periods.

TO BE ADOPTED IN FUTURE  PERIODS - In 2001,  the FASB issued  Statement  of
Financial  Accounting  Standards No. 143,  "Accounting for Asset Retirement
Obligations"  (SFAS No. 143). This statement  requires the fair value of an
asset  retirement  obligation  be  recognized  in the period in which it is
incurred if a  reasonable  estimate of fair value can be made.  The present
value of the estimated asset retirement costs is capitalized as part of the
carrying amount of the long-lived asset.

While certain  assets such as refineries,  crude oil and product  pipelines
and marketing assets have retirement  obligations  covered by SFAS No. 143,
those  obligations are not expected to be recognized,  since the fair value
cannot be estimated due to the  uncertainty of the  settlement  date of the
obligation.

Effective  January 1, 2003,  MAP will adopt SFAS No. 143, as required.  The
cumulative  effect on net income of adopting SFAS No. 143 is expected to be
an unfavorable  pretax effect of approximately  $2 million.  At the time of
adoption,  total  liabilities will increase  approximately $2 million.  The
amounts  recognized upon adoption are based upon estimates and assumptions,
including  future  retirement  costs,   future  inflation  rates,  and  the
credit-adjusted  risk-free  interest rate. The impact on income in the near
term is not expected to be material.

Effective for any guarantees  issued or modified  January 1, 2003 or after,
FIN 45 requires the fair value  measurement  and recognition of a liability
for the issuance of certain guarantees.  Enhanced  disclosure  requirements
will continue to apply to both new and existing  guarantees  subject to FIN
45. For details relating to financial guarantees, see Note Q.

FIN 46 identifies  certain  off-balance  sheet  arrangements  that meet the
definition of a variable interest entity (VIE). The primary  beneficiary of
a VIE is the party  that is  exposed to the  majority  of the risks  and/or
returns of the VIE. In future accounting  periods,  the primary beneficiary
will be  required  to  consolidate  the VIE. In  addition,  more  extensive
disclosure requirements apply to the primary beneficiary,  as well as other
significant  investors.  MAP does not participate in any arrangements  that
are subject to the consolidation and disclosure requirements of FIN 46.

                                     9

<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.

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

<TABLE>
<CAPTION>
Revenues from related parties were:
                                                                                               Year Ended December 31
                                                                                               ----------------------
                                                                                                     (Millions)
                                                                                          2002           2001            2000
                                                                                      -----------    -----------     -----------
<S>                                                                                   <C>            <C>             <C>
Ashland and its affiliates                                                            $      218     $      237      $      285
MOC and its affiliates                                                                       147            211             147
Equity investee:
       Pilot Travel Centers LLC (PTC)                                                        645            210              --
                                                                                      -----------    -----------     -----------
              Total                                                                   $    1,010     $      658      $      432
                                                                                      ===========    ===========     ===========
</TABLE>

Related party sales to Ashland and its affiliates and PTC consist primarily
of  refined  petroleum  products.  Related  party  sales  to  MOC  and  its
affiliates consist primarily of liquid hydrocarbons.


<TABLE>
<CAPTION>
Purchases from related parties were:
                                                                                            Year Ended December 31
                                                                                            ----------------------
                                                                                                     (Millions)
                                                                                          2002           2001            2000
                                                                                      -----------    -----------     -----------
<S>                                                                                   <C>             <C>            <C>
Ashland and its affiliates                                                            $        33     $       29     $        26
MOC and its affiliates                                                                        782            627             573
Equity investees:
       PTC                                                                                     15             --              --
       Other                                                                                   52             54              61
                                                                                      -----------    -----------     -----------
              Total                                                                   $       882     $      710     $       660
                                                                                      ===========    ===========     ===========

</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,  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 purchases from other equity  investees
consist primarily of crude oil and refined product transportation.



                                    10
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE D - RELATED PARTY TRANSASCTIONS - CONTINUED

<TABLE>
<CAPTION>
Receivables from related parties were:
                                                                                                        Year Ended December 31
                                                                                                     ---------------------------
                                                                                                               (Millions)
                                                                                                         2002            2001
                                                                                                     -----------     -----------
<S>                                                                                                  <C>             <C>
Ashland and its affiliates                                                                           $       18      $       19
MOC and its affiliates                                                                                       16              23
Equity investees:
       PTC                                                                                                   16              17
       Other                                                                                                  2              --
                                                                                                     -----------     -----------
              Total                                                                                  $       52      $       59
                                                                                                     ===========     ===========

Payables to related parties were:
                                                                                                        Year Ended December 31
                                                                                                     ---------------------------
                                                                                                                (Millions)
                                                                                                         2002           2001
                                                                                                     -----------     -----------

Ashland and its affiliates                                                                           $        3      $       20
MOC and its affiliates                                                                                       71              42
Equity investees                                                                                              7               4
                                                                                                     -----------     -----------
              Total                                                                                  $       81      $       66
                                                                                                     ===========     ===========
</TABLE>

As of December 31, 2002 and 2001,  accounts  payable to Ashland  included a
member  distribution  payable  of less  than $1  million  and $17  million,
respectively.

In connection with the formation of MAP, certain Marathon debt was assigned
to MAP. Marathon agreed to reimburse MAP for this debt and related interest
expense.   During  2000,  Marathon  reimbursed  MAP  $6  million  for  debt
repayments.   During   2002  and  2001,   there  were  no  debt   repayment
reimbursements from Marathon.

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.  At December  31,  2002 and 2001,  there were no
borrowings  against this  facility.  During 2002 and 2001, MAP borrowed and
repaid $701 million and $294 million,  respectively,  under this  revolving
credit facility.  The weighted average  borrowings  outstanding  under this
revolving  credit  facility  during the years 2002 and 2001 were $5 million
and $3 million, respectively.  During the years ended December 31, 2002 and
2001,  interest  paid to  Marathon  on these  borrowings  was less  than $1
million.  Interest paid to Marathon for borrowings under this agreement was
$1 million for 2000.  Interest  paid to Ashland for  borrowings  under this
agreement  was  less  than $1  million  for  2002,  2001 and  2000.  MAP is
investigating  alternatives  for the  replacement of this facility upon its
expiration on March 15, 2003.

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.  These  agreements,  as  previously  extended,
expired on March 15, 2002 and have been  subsequently  amended and extended
with an  expiration  date of March 15, 2003. At December 31, 2002 and 2001,
there was no cash invested under these  agreements.  During the years ended
December  31,  2002,  2001 and 2000,  interest  income  earned  from  these
investments  was  less  than  $1  million,   $2  million  and  $6  million,
respectively,  from  Ashland  and $2  million,  $1 million  and $7 million,
respectively, from MOC.

                                    11

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE E - OTHER ITEMS
<TABLE>
<CAPTION>

                                                                                               Year Ended December 31
                                                                                      ------------------------------------------
                                                                                                     (Millions)
                                                                                          2002           2001           2000
                                                                                      -----------    -----------     -----------
<S>
NET INTEREST AND OTHER FINANCING INCOME (COSTS):
                                                                                     <C>            <C>             <C>
       INTEREST AND OTHER FINANCIAL INCOME:
       Interest income - third parties                                                $        3     $       11      $        9
       Interest income - related parties                                                       2              3              13
                                                                                      -----------    -----------     -----------
              Total                                                                            5             14              22
                                                                                      -----------    -----------     -----------

       INTEREST AND OTHER FINANCING COSTS:
       Interest incurred                                                                       2              3               3
       Other                                                                                   8              7               7
                                                                                      -----------    -----------     -----------
              Total                                                                           10             10              10
                                                                                      -----------    -----------     -----------

       NET INTEREST AND OTHER FINANCING INCOME (COSTS)                                $       (5)    $        4      $       12
                                                                                      ===========    ===========     ===========

</TABLE>
                                    12


<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued


NOTE F - PENSIONS AND OTHER POSTRETIREMENT BENEFITS
<TABLE>
<CAPTION>
                                                                      Pension Benefits                        Other Benefits
                                                                  ----------------------                   ---------------------
                                                                                             (Millions)
                                                                     2002        2001                         2002        2001
                                                                  ---------   ---------                    ---------   ---------
<S>                                                               <C>         <C>                          <C>         <C>
CHANGE IN BENEFIT OBLIGATIONS:
Benefit obligations at January 1                                  $    727    $    568                     $    216    $    189
Service cost                                                            49          40                           11           9
Interest cost                                                           47          42                           15          14
Actuarial losses                                                        49         130                           56           7
Settlements, curtailments and termination benefits                      --          (6)                          --          --
Benefits paid                                                          (41)        (47)                          (3)         (3)
                                                                  ---------   ---------                    ---------   ---------
Benefit obligations at December 31                                $    831    $    727                     $    295    $    216
                                                                  =========   =========                    =========   =========

CHANGE IN PLAN ASSETS:
Fair value of plan assets at January 1                            $    440    $    502
Actual return on plan assets                                           (43)        (17)
Benefits paid from plan assets                                         (41)        (45)
                                                                  ---------   ---------
Fair value of plan assets at December 31                          $    356    $    440
                                                                  =========   =========

FUNDED STATUS OF PLANS AT DECEMBER 31                             $   (475)(a)$   (287)(a)                 $   (295)   $   (216)
Unrecognized net gain from transition                                   (5)         (7)                          --          --
Unrecognized prior service costs (credits)                              22          24                          (40)        (47)
Unrecognized actuarial losses                                          323         187                           82          27
                                                                  ---------   ---------                    ---------   ---------
Accrued benefit cost                                              $   (135)   $    (83)                    $   (253)   $   (236)
                                                                  =========   =========                    =========   =========

AMOUNTS RECOGNIZED IN THE STATEMENT OF FINANCIAL POSITION:
Accrued benefit liability                                         $   (197)   $    (88)                    $   (253)   $   (236)
Intangible asset                                                        24          --                           --          --
Accumulated other comprehensive loss                                    38           5                           --          --
                                                                  ---------   ---------                    ---------   ---------
Accrued benefit cost                                              $   (135)   $    (83)                    $   (253)   $   (236)
                                                                  =========   =========                    =========   =========

(a)      Following is  information on plans that have  accumulated  benefit
         obligations in excess of plan assets:
                                                                     2002        2001
                                                                   -------     -------
              Aggregate accumulated benefit obligations            $  (553)    $    (9)
              Aggregate projected benefit obligations                 (831)        (26)
              Aggregate plan assets                                    356          --
</TABLE>

<TABLE>
<CAPTION>

                                                                 Pension Benefits                       Other Benefits
                                                      ----------------------------------       ---------------------------------
                                                                                       (Millions)
                                                         2002        2001        2000            2002        2001        2000
                                                      ---------   ---------   ---------        ---------   ---------   ---------
<S>                                                   <C>         <C>         <C>              <C>         <C>         <C>
COMPONENTS OF NET PERIODIC BENEFIT COST:
Service cost                                          $     49    $     40    $     36         $    11     $     9     $     8
Interest cost                                               47          42          38              15          14          12
Expected return on plan assets                             (46)        (50)        (51)             --          --          --
Amortization   - net transition gain                        (2)         (2)         (2)             --          --          --
               - prior service costs (credits)               2           2           2              (7)         (6)         (8)
               - actuarial (gains) losses                    3           1          (4)              2          --          --
Multiemployer and other plans                                1           2           1               2          --          --
Settlement and termination (gain) loss                      --           3           3              --          --          --
                                                      ---------   ---------   ---------        ---------   ---------   ---------
Net periodic benefit cost                             $     54    $     38    $     23         $    23     $    17     $    12
                                                      =========   =========   =========        =========   =========   =========
</TABLE>
                                    13

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE F - PENSIONS AND OTHER POSTRETIREMENT BENEFITS - CONTINUED

<TABLE>
<CAPTION>
                                                                PENSION BENEFITS                           OTHER
WEIGHTED AVERAGE ACTUARIAL ASSUMPTIONS                ---------------------------------          ---------------------------
AT DECEMBER 31:                                              2002         2001                       2002             2001
                                                             ----         ----                       -----            -----
<S>                                                          <C>          <C>                        <C>              <C>
Discount rate                                                6.5%         7.0%                       6.5%             7.0%
Expected annual return on plan assets                        9.0%         9.5%                       N/A              N/A
Increase in compensation rate                                4.5%         5.0%                       4.5%             5.0%

</TABLE>
For measurement  purposes,  a 10 percent annual rate of increase in the per
capita cost of covered  health care benefits was assumed for 2002. The rate
was assumed to decrease  gradually to 5 percent for 2012 and remain at that
level thereafter.

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                                                     $          5                           $         (4)
Effect on postretirement benefit obligation                                      51                                    (41)
</TABLE>

MAP is required to fund a cash contribution of approximately $35 million to
its pension plan in the third quarter 2003.

MAP also  contributes to several  defined  contribution  plans for salaried
employees.  Contributions to these plans, which for the most part are based
on a  percentage  of the  employees'  salaries,  totaled $26  million,  $25
million and $21 million in 2002, 2001 and 2000, 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.

Provisions for income taxes:
<TABLE>
<CAPTION>
                                                                     Year Ended December 31
                               -------------------------------------------------------------------------------------------------
                                                                           (Millions)
                                             2002                             2001                             2000
                               -------------------------------     -----------------------------    ----------------------------
                               Current     Deferred      Total     Current    Deferred     Total    Current     Deferred   Total
                               -------     --------      -----     -------    --------     -----    -------     --------   -----
<S>                            <C>         <C>           <C>       <C>        <C>          <C>      <C>         <C>        <C>

Federal                        $    --     $     --      $  --     $    --    $     --     $  --    $    --     $     --   $  --
State and local                      1            1          2           8          --         8          5           --       5
Foreign                              1           --          1           1          --         1          2           --       2
                               -------     --------      -----     -------    --------     -----    -------     --------   -----
Total                          $     2     $      1      $   3     $     9    $     --     $   9    $     7     $     --   $   7
                               =======     ========      =====     =======    ========     =====    =======     ========   =====

</TABLE>
Deferred tax liabilities at December 31, 2002 and 2001 of $5 million and $4
million, respectively,  principally arise from differences between the book
and tax basis of  inventories  and property,  plant and  equipment.  Pretax
income in 2002 included $2 million attributable to foreign sources.  Pretax
income in 2001 and 2000 attributable to foreign sources was not material.


                                    14

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE H - INVENTORIES
<TABLE>
<CAPTION>
Inventories consist of the following:                                                                         December 31
                                                                                                     ---------------------------
                                                                                                              (Millions)
                                                                                                         2002           2001
                                                                                                     -----------    ------------
<S>                                                                                                  <C>            <C>
Liquid hydrocarbons                                                                                  $      652             654
Refined products and merchandise                                                                          1,191           1,149
Supplies and sundry items                                                                                    72              67
                                                                                                     -----------    ------------
              Total (at cost)                                                                             1,915           1,870
Less inventory market valuation reserve                                                                      --              77
                                                                                                     -----------    ------------
              Net inventory carrying value                                                           $    1,915     $     1,793
                                                                                                     ===========    ============
</TABLE>
The LIFO method  accounted for 95 percent and 94 percent of total inventory
at December 31, 2002 and 2001, respectively. Current acquisition costs were
estimated to exceed the above  inventory  values at December  31, 2002,  by
approximately  $594  million.  Cost of revenues was reduced and income from
operations was increased by less than $1 million in 2002 and $17 million in
2001 as a result of liquidations of LIFO inventories.


NOTE I - INVESTMENTS AND LONG-TERM RECEIVABLES
<TABLE>
<CAPTION>
                                                                                                               December 31
                                                                                                     ---------------------------
                                                                                                               (Millions)
                                                                                                         2002           2001
                                                                                                     -----------     -----------
<S>                                                                                                  <C>             <C>
Equity method investments                                                                            $      477      $      468
Receivables due after one year                                                                               24              23
Deposits of restricted cash                                                                                  42              11
                                                                                                     -----------     -----------

              Total                                                                                  $      543      $      502
                                                                                                     ===========     ===========
</TABLE>

Summarized financial information of investees accounted for by the equity method
of accounting follows:
<TABLE>
<CAPTION>
                                                                                               Year Ended December 31
                                                                                      ------------------------------------------
                                                                                                     (Millions)
                                                                                          2002           2001           2000
                                                                                      -----------    -----------     -----------
<S>                                                                                   <C>            <C>             <C>
Income data - year:
       Revenues and other income                                                      $    4,174     $    1,462      $      239
       Operating income                                                                      153            134              95
       Net income                                                                             98             90              57

                                                                                                              December 31
                                                                                                     ---------------------------
                                                                                                              (Millions)
                                                                                                         2002           2001
                                                                                                     -----------     -----------
Balance sheet data - December 31:
       Current assets                                                                                $      261      $      389
       Noncurrent assets                                                                                  2,195           2,156
       Current liabilities                                                                                  374             417
       Noncurrent liabilities                                                                               828             859
</TABLE>
MAP's carrying value of its equity method investments is $113 million lower
than the underlying net assets of investees. This basis difference is being
amortized into income over the lives of the underlying net assets.


                                    15


<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE I - INVESTMENTS AND LONG-TERM RECEIVABLES - CONTINUED

Dividends and partnership distributions received from equity investees were
$39  million,  $31  million  and  $25  million  in  2002,  2001  and  2000,
respectively.

Principal  unconsolidated equity investees of MAP at December 31, 2002, are
as follows:
<TABLE>
<CAPTION>
                          Company                    Ownership                         Activity
                          -------                    ---------                         --------
              <S>                                       <C>                     <C>
              Pilot Travel Centers LLC                  50.0%                   Travel centers
              Minnesota Pipe Line Company               33.3%                   Crude oil pipeline system
              LOOP LLC                                  46.7%                   Offshore oil port
              Southcap Pipe Line Company                21.6%                   Crude oil pipeline system
              LOCAP LLC                                 49.9%                   Crude oil pipeline system
              Centennial Pipeline LLC                   33.3%                   Refined products pipeline system
</TABLE>
Pilot Travel Centers LLC (PTC), a MAP joint venture with Pilot  Corporation
(Pilot), began operations on September 1, 2001. PTC is the largest operator
of travel  centers in the United  States  with  about 225  locations  in 34
states.  The travel  centers  offer diesel fuel,  gasoline and a variety of
other services,  including on-premises brand name restaurants. PTC provides
MAP with the  opportunity to participate in the travel center business on a
nationwide basis.  Pilot and MAP each own a 50 percent interest in PTC. PTC
is accounted for under the equity method of accounting.

In March 2000, MAP,  Panhandle  Eastern Pipe Line Company,  a subsidiary of
CMS  Energy  Corporation,   and  TE  Products  Pipeline  Company,   Limited
Partnership,  formed a  limited  liability  company  with  equal  one-third
ownership  called  Centennial  Pipeline  LLC  (Centennial)  to  develop  an
interstate refined petroleum products pipeline extending from the U.S. Gulf
of Mexico to the Midwest.  Centennial  began deliveries of refined products
in April  2002.  Centennial  is  accounted  for under the equity  method of
accounting. See Note R.


NOTE J - PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
                                                                                                              December 31
                                                                                                     ---------------------------
                                                                                                              (Millions)
                                                                                                         2002           2001
                                                                                                     -----------     -----------
<S>                                                                                                  <C>             <C>
Refining                                                                                             $    3,183      $    2,821
Marketing                                                                                                 2,008           2,005
Transportation                                                                                            1,490           1,382
Other                                                                                                        37              31
                                                                                                     -----------     -----------
              Total                                                                                       6,718           6,239
Less accumulated depreciation and amortization                                                            2,514           2,262
                                                                                                     -----------     -----------
              Net                                                                                    $    4,204      $    3,977
                                                                                                     ===========     ===========

</TABLE>
Property, plant and equipment at December 31, 2002 and 2001, includes gross
assets  acquired  under  capital  leases  of $8  million  and  $8  million,
respectively,   with  related  amounts  in  accumulated   depreciation  and
amortization of $1 million and $1 million, respectively.


NOTE K - SHORT-TERM DEBT

MAP has a $350 million short-term revolving credit facility that terminates
in July 2003.  Interest is based on defined short-term market rates. During
the term of the agreement,  MAP is required to pay a variable  facility fee
on total commitments,  which at December 31, 2002 was 0.125 percent.  There
were no  borrowings  against  this  facility at  December  31,  2002.  This
facility  also  provides for the issuance of letters of credit in aggregate
amounts  not to exceed $75  million.  A letter of credit of $40 million was
outstanding  at December 31, 2002,  which reduced the  available  credit to
$310 million.  In the event that MAP defaults (as defined in the agreement)
on  indebtedness  in excess of $100 million,  Marathon has  guaranteed  the
payment of outstanding obligations.  MAP is investigating  alternatives for
the replacement of this facility upon its expiration. Additionally, MAP has
a $500 million  revolving  credit  agreement with Ashland and Marathon,  as
discussed in Note D. At December 31, 2002, there were no borrowings against
this facility.

                                    16

<PAGE>



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE L - LONG-TERM DEBT
<TABLE>
<CAPTION>

                                                                                                              December 31
                                                                                                     ---------------------------
                                                                                                              (Millions)
                                                                                                         2002           2001
                                                                                                     -----------     -----------
<S>                                                                                                  <C>             <C>
Capital lease obligations                                                                            $        6      $        6
5% Promissory Note due 2009                                                                                   1               1
                                                                                                     -----------     ----------
              Total (a)                                                                                       7               7
Amounts due within one year                                                                                  (1)             --
                                                                                                     -----------     -----------
              Long-term debt due after one year                                                      $        6      $        7
                                                                                                     ===========     ===========
</TABLE>
(a)      Required payments of long-term debt for the years 2004, 2005, 2006
         and 2007 are $1 million,  $1  million,  $1 million and $1 million,
         respectively.



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

                                                                                                 Year Ended December 31
                                                                                      ------------------------------------------
                                                                                                       (Millions)
                                                                                          2002           2001           2000
                                                                                      -----------    -----------     -----------
<S>
CASH PROVIDED FROM OPERATING ACTIVITIES INCLUDES:
                                                                                      <C>            <C>             <C>
       Interest and other financial costs paid                                        $       (1)    $       (2)     $       (3)
       Income taxes paid                                                                      (7)            (5)             (5)
NON-CASH INVESTING AND FINANCING ACTIVITIES:
       Notes received in asset disposal transactions                                           5             --              --
       Net assets contributed to joint ventures                                               --            246              --
       Member capital contributions                                                           26             15              26

</TABLE>
NOTE N - LEASES

Future minimum commitments for capital and operating leases having remaining
noncancelable lease terms in excess of one year are as follows:
<TABLE>
<CAPTION>
                                                                       Capital         Operating
                                                                       Leases            Leases
                                                                     -----------      -----------
                                                                                (Millions)
<S>                                                                  <C>              <C>
2003                                                                 $        1       $       65
2004                                                                          1               55
2005                                                                          1               29
2006                                                                          1               23
2007                                                                          1                7
Later years                                                                   3               37
Sublease rentals                                                             --               (1)
                                                                     -----------      -----------
       Total minimum lease payments                                           8       $      215
                                                                                      ===========

Less imputed interest costs                                                  (2)
                                                                     -----------
       Present value of net minimum lease payments
       included in long-term debt                                    $        6
                                                                     ===========
</TABLE>
<TABLE>
<CAPTION>
Operating lease rental expense:
                                                                                                 Year Ended December 31
                                                                                      ------------------------------------------
                                                                                                       (Millions)
                                                                                          2002           2001           2000
                                                                                      -----------    -----------     -----------
<S>                                                                                   <C>            <C>             <C>
Minimum rental                                                                        $       97     $       73      $       73
Contingent rental                                                                             13             13              10
Sublease rentals                                                                              (2)            (2)             (6)
                                                                                      -----------    -----------     -----------
              Net rental expense                                                      $      108     $       84      $       77
                                                                                      ===========    ===========     ===========
</TABLE>
                                    17

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE N - LEASES - CONTINUED

MAP leases a wide  variety of  facilities  and  equipment  under  operating
leases,  including land and building space,  office  equipment,  production
facilities and  transportation  equipment.  Most  long-term  leases include
renewal options and, in certain leases, purchase options.


NOTE O - DERIVATIVE INSTRUMENTS

The  following  table sets forth  quantitative  information  by category of
derivative  instrument  at December  31, 2002 and 2001.  These  amounts are
reflected on a gross basis. 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, 2002 or 2001.
<TABLE>
<CAPTION>
                                                                                     Year Ended December 31
                                                                  ----------------------------------------------------
                                                                                          (Millions)
                                                                              2002                          2001
                                                                  ----------------------------    --------------------------
                                                                  Assets(a)    (Liabilities)(a)     Assets(a)   (Liabilities)(a)
                                                                  ------       -------------        ------     -------------
<S>                                                               <C>          <C>                <C>           <C>
NON-HEDGE DESIGNATION:
       Exchange-traded commodity futures                          $    9       $        (46)      $      7      $        (16)
       Exchange-traded commodity options                               9                (11)            15               (10)
       OTC commodity swaps                                             3                 (5)             5                (6)
       OTC commodity options                                           1                 --             --                (1)

NONTRADITIONAL INSTRUMENTS (b)                                        53                (39)            13               (13)

</TABLE>
(a)      The fair value and carrying  value of derivative  instruments  are
         the same.  The fair value  amounts for OTC  positions are based on
         various   indices   or   dealer   quotes.   The  fair   values  of
         exchange-traded  positions  are based on market price  changes for
         each commodity. MAP's consolidated balance sheet is reflected on a
         net  asset/(liability)  basis,  as permitted by the master netting
         agreements, by brokerage firm.

(b)      Nontraditional  derivative  instruments are created due to netting
         of  physical   receipts  and   delivery   volumes  with  the  same
         counterparty.



MAP  recorded  a net  derivative  loss  of $124  million  in  2002,  with a
derivative  loss  of  $76  million  recorded  in  cost  of  revenues  and a
derivative loss of $48 million recorded in revenue. In 2001, MAP recorded a
net derivative gain of $209 million, with a derivative gain of $226 million
recorded in cost of revenues and a derivative loss of $17 million  recorded
in revenues.  In 2000, MAP recorded a derivative loss of $205 million, with
$111  million  recorded  in cost of revenues  and $94  million  recorded in
revenues.



NOTE P - FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying  value of most financial  instruments  are 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 Q.


NOTE Q - 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 the
MAP 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.

                                    18

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE Q - CONTINGENCIES AND COMMITMENTS - CONTINUED

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, 2002 and 2001,  MAP's accrued  liabilities  for remediation
totaled $14  million and $13  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 clean  up  efforts  related  to  underground  storage  tanks  at  retail
marketing outlets,  were $9 million and $7 million at December 31, 2002 and
2001, respectively.

MAP has made substantial capital  expenditures to bring existing facilities
into  compliance  with various laws relating to the  environment.  In 2002,
2001 and 2000, such capital expenditures for environmental controls totaled
$119 million,  $79 million and $47 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  projects 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 is approximately $360 million over the eight
year period,  with about $230 million remaining over the next six years. In
addition,  MAP  has  nearly  completed  certain  agreed  upon  supplemental
environmental  projects as part of 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.

GUARANTEES - MAP has issued the following guarantees:
<TABLE>
<CAPTION>
                                                                                                           Undiscounted Payments
                                                                           Term                           As of December 31, 2002
                                                                          ------                          -----------------------
<S>                                                                                                                (millions)
Indebtness of equity investees:                                <C>                                              <C>
      LOCAP commercial paper (a)                               Perpetual-Loan Balance Varies                    $      14
      LOOP Series 1986 Notes (a)                                           2006                                        29
      LOOP Series E Notes (a)                                            2003-2010                                     16
      LOOP Series 1991A Notes (a)                                          2008                                        29
      LOOP Series 1991B Notes (a)                                        2003-2008                                      4
      LOOP Series 1992A Notes (a)                                          2008                                        34
      LOOP Series 1992B Notes (a)                                        2003-2004                                     17
      LOOP Series 1997 Notes (a)                                           2017                                        13
      LOOP revolving credit agreement (a)                      Perpetual-Loan Balance Varies                           12
      Centennial Pipeline Notes (b)                                      2008-2024                                     70
      Centennial Pipeline revolving credit agreement (b)         2004-Loan Balance Varies                               5
      Southcap Pipe Line revolving credit agreement (a)        Perpetual-Loan Balance Varies                            1
                                                                                                                ----------
                                                                                                                      244
Other:
      Centennial Pipeline catastrophic event (c)                        Indefinite                                     33
      Mobile transportation equipment leases (d)                         2003-2008                                      2
      PTC workers' compensation (e)                                     Indefinite                                     --
                                                                                                                ----------

           Total maximum potential undiscounted payments                                                        $     279
                                                                                                                ==========
</TABLE>

(a)      MAP holds  interests in several  pipelines and a storage  facility
         that have secured various  project  financings with throughput and
         deficiency (T&D)  agreements.  A T&D agreement creates a potential
         obligation to advance funds to the pipeline or storage facility 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.

(b)      MAP  holds  an  interest  in  Centennial  and has  guaranteed  the
         repayment  of the  outstanding  balance  under  the  Master  Shelf
         Agreement  and Revolver.  The  guarantee  arose in order to obtain
         adequate  financing.  Prior to  expiration of the  guarantee,  MAP
         could be  relinquished  from  responsibility  under the  guarantee
         should Centennial meet certain financial tests.

(c)      The agreement  between  Centennial  and its members  requires that
         each member contribute cash in the event of third-party  liability
         arising from a  catastrophic  event.  Each member is to contribute
         cash in  proportion  to its  ownership  interest,  up to a maximum
         amount of $33 million.
                                    19

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED


NOTE Q - CONTINGENCIES AND COMMITMENTS - CONTINUED

(d)      MAP has  entered  into  various  operating  leases of  trucks  and
         trailers  to be used  primarily  for the  transporting  of refined
         products.  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 falls  short of the  specified  maximum  percent of original
         value.

(e)      MAP has  guarantees to the states of Tennessee and Kentucky  which
         allow for PTC to operate as a self-insurer under the provisions of
         the applicable workers'  compensation laws. These guarantees arose
         during the  formation of PTC and  guarantee  the payment by PTC of
         valid claims for compensation made under the workers' compensation
         laws. Due to the remote and contingent nature of these guarantees,
         the maximum potential undiscounted payments are not determinable.

COMMITMENTS - At December 31, 2002 and 2001, MAP's contract commitments for
capital expenditures for property,  plant and equipment totaled $86 and $87
million, respectively.

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.

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 can 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 percent (95 percent 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  percent  (110  percent if paid in
securities)  of the fair  market  value of PTC at the  time  multiplied  by
Pilot's percentage interest in PTC.


NOTE R - SUBSEQUENT EVENTS

On  February  7,  2003,  MAP,  through  SSA,  announced  the  signing  of a
definitive  agreement to sell all 193 of its convenience  stores located in
Florida,  South Carolina,  North Carolina and Georgia for $140 million plus
store  inventory.  The  transaction  is  anticipated to close in the second
quarter  of  2003,  subject  to  any  necessary  regulatory  approvals  and
customary closing conditions.

On February 10, 2003,  MAP increased its ownership in Centennial  from 33.3
percent to 50 percent.  MAP paid $20 million  for the  increased  ownership
interest.  As of February 10, 2003,  Centennial is owned 50 percent each by
MAP and TE Products Pipeline Company, Limited Partnership.

In February  2003,  MAP's 50 percent  owned PTC  purchased 60 retail travel
centers  including  fuel  inventory,   merchandise  and  supplies.  The  60
locations  are in 15 states,  primarily in the Midwest,  Southeast  and the
Southwest regions of the country.

                                    20

<PAGE>