Phillips 66 Reports 1Q 2024 Financial Results, Highlights Strategic Priorities Progress
First-Quarter Results
-
First-quarter earnings of
$748 million or$1.73 per share; adjusted earnings of$822 million or$1.90 per share -
$1.6 billion returned to shareholders through dividends and share repurchases - Refining operated at 92% crude utilization
-
Recently announced 10% increase to the quarterly dividend to
$1.15 per common share - Earned industry recognition for 2023 exemplary safety performance in Midstream, Refining and Chemicals
Strategic Priorities Highlights
-
Returned
$9.9 billion to shareholders through dividends and share repurchases sinceJuly 2022 -
On track to achieve
$1.4 billion of business transformation cost and sustaining capital savings by year-end 2024 -
Launched process to divest retail marketing assets in
Germany andAustria -
Commenced operations at
Rodeo Renewable Energy Complex
“In the first quarter, we progressed our strategic priorities and returned
“We recently launched a process to sell our retail marketing business in
“We remain committed to delivering increased value to our shareholders. We have returned
Midstream
|
Millions of Dollars |
|||||
|
|
|
|
|
|
|
|
Pre-Tax Income |
|
Adjusted Pre-Tax Income |
|||
|
|
1Q 2024 |
4Q 2023 |
|
1Q 2024 |
4Q 2023 |
Transportation |
$ |
243 |
334 |
|
302 |
334 |
NGL and Other |
|
306 |
425 |
|
306 |
423 |
NOVONIX |
|
5 |
(3) |
|
5 |
(3) |
Midstream |
$ |
554 |
756 |
|
613 |
754 |
Midstream first-quarter 2024 pre-tax income was
Transportation first-quarter adjusted pre-tax income was
NGL and Other adjusted pre-tax income was
In the first quarter, the fair value of the company’s investment in NOVONIX, Ltd. increased by
Chemicals
|
Millions of Dollars |
|||||
|
|
|
|
|
||
|
Pre-Tax Income |
Adjusted Pre-Tax Income |
||||
|
|
1Q 2024 |
4Q 2023 |
1Q 2024 |
4Q 2023 |
|
Chemicals |
$ |
205 |
106 |
205 |
106 |
The Chemicals segment reflects Phillips 66’s equity investment in
Global olefins and polyolefins utilization was 96% for the quarter.
Refining
|
Millions of Dollars |
|||||
|
|
|
|
|
|
|
|
Pre-Tax Income |
|
Adjusted Pre-Tax Income |
|||
|
|
1Q 2024 |
4Q 2023 |
|
1Q 2024 |
4Q 2023 |
Refining |
$ |
131 |
814 |
|
228 |
797 |
Refining first-quarter 2024 reported pre-tax income was
Adjusted pre-tax income for Refining was
Refining pre-tax turnaround expense for the first quarter was
Marketing and Specialties
|
Millions of Dollars |
|||||
|
|
|
|
|
|
|
|
Pre-Tax Income |
|
Adjusted Pre-Tax Income |
|||
|
|
1Q 2024 |
4Q 2023 |
|
1Q 2024 |
4Q 2023 |
Marketing and Specialties |
$ |
404 |
432 |
|
345 |
432 |
Marketing and Specialties first-quarter 2024 pre-tax income was
Adjusted pre-tax income for Marketing and Specialties was
Corporate and Other
|
Millions of Dollars |
|||||
|
|
|
|
|
||
|
Pre-Tax Loss |
Adjusted Pre-Tax Loss |
||||
|
|
1Q 2024 |
4Q 2023 |
1Q 2024 |
4Q 2023 |
|
Corporate and Other |
$ |
(330) |
(347) |
(330) |
(297) |
Corporate and Other first-quarter 2024 pre-tax costs were
Adjusted pre-tax costs were
Financial Position, Liquidity and Return of Capital
Cash used in operations was
During the first quarter,
As of
Strategic Priorities and Business Update
The company achieved
In Chemicals, CPChem is building world-scale petrochemical facilities with a joint-venture partner on the
In Refining, the company continues to invest in high-return, low-capital projects to improve asset reliability and market capture. Since 2022, completed projects have added over 3% to market capture based on mid-cycle pricing.
During the first quarter,
The American Fuel and Petrochemical Manufacturers (AFPM) recognized four
Investor Webcast
Members of
Earnings |
|
|
|
|
|
|
Millions of Dollars |
||||
|
2024 |
|
2023 |
||
|
1Q |
|
4Q |
1Q |
|
Midstream |
$ |
554 |
|
756 |
702 |
Chemicals |
|
205 |
|
106 |
198 |
Refining |
|
131 |
|
814 |
1,608 |
Marketing and Specialties |
|
404 |
|
432 |
426 |
Corporate and Other |
|
(330) |
|
(347) |
(283) |
Pre-Tax Income |
|
964 |
|
1,761 |
2,651 |
Less: Income tax expense |
|
203 |
|
476 |
574 |
Less: Noncontrolling interests |
|
13 |
|
25 |
116 |
|
$ |
748 |
|
1,260 |
1,961 |
|
|
|
|
|
|
Adjusted Earnings |
|
|
|
|
|
|
Millions of Dollars |
||||
|
2024 |
|
2023 |
||
|
1Q |
|
4Q |
1Q |
|
Midstream |
$ |
613 |
|
754 |
678 |
Chemicals |
|
205 |
|
106 |
198 |
Refining |
|
228 |
|
797 |
1,608 |
Marketing and Specialties |
|
345 |
|
432 |
426 |
Corporate and Other |
|
(330) |
|
(297) |
(248) |
Pre-Tax Income |
|
1,061 |
|
1,792 |
2,662 |
Less: Income tax expense |
|
226 |
|
405 |
576 |
Less: Noncontrolling interests |
|
13 |
|
25 |
121 |
|
$ |
822 |
|
1,362 |
1,965 |
|
|
|
|
|
|
|
About
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE “SAFE HARBOR” PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This news release contains forward-looking statements within the meaning of the federal securities laws. Words such as “adjusted EBITDA,” “anticipated,” “estimated,” “expected,” “planned,” “scheduled,” “targeted,” “believe,” “continue,” “intend,” “will,” “would,” “objective,” “goal,” “project,” “efforts,” “strategies” and similar expressions that convey the prospective nature of events or outcomes generally indicate forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements included in this news release are based on management’s expectations, estimates and projections as of the date they are made. These statements are not guarantees of future performance and you should not unduly rely on them as they involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Factors that could cause actual results or events to differ materially from those described in the forward-looking statements include: fluctuations in NGL, crude oil, refined petroleum product and natural gas prices, and refining, marketing and petrochemical margins; changes in governmental policies or laws that relate to NGL, crude oil, natural gas, refined petroleum products, or renewable fuels that regulate profits, pricing, or taxation, or other regulations that limit or restrict refining, marketing and midstream operations or restrict exports; the effects of any widespread public health crisis and its negative impact on commercial activity and demand for refined petroleum products; our ability to timely obtain or maintain permits necessary for capital projects; changes to worldwide government policies relating to renewable fuels and greenhouse gas emissions that adversely affect programs including the renewable fuel standards program, low carbon fuel standards and tax credits for biofuels; our ability to achieve the expected benefits of the integration of DCP Midstream, LP, including the realization of synergies; the success of the company’s business transformation initiatives and the realization of savings and cost reductions from actions taken in connection therewith; unexpected changes in costs for constructing, modifying or operating our facilities; our ability to successfully complete, or any material delay in the completion of, asset dispositions or acquisitions that we may pursue; unexpected difficulties in manufacturing, refining or transporting our products; the level and success of drilling and production volumes around our midstream assets; risks and uncertainties with respect to the actions of actual or potential competitive suppliers and transporters of refined petroleum products, renewable fuels or specialty products; lack of, or disruptions in, adequate and reliable transportation for our NGL, crude oil, natural gas, and refined products; potential liability from litigation or for remedial actions, including removal and reclamation obligations under environmental regulations; failure to complete construction of capital projects on time and within budget; our ability to comply with governmental regulations or make capital expenditures to maintain compliance with laws; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets, which may also impact our ability to repurchase shares and declare and pay dividends; potential disruption of our operations due to accidents, weather events, including as a result of climate change, acts of terrorism or cyberattacks; general domestic and international economic and political developments, including armed hostilities (such as the
Use of Non-GAAP Financial Information —This news release includes the terms “adjusted earnings,” “adjusted pre-tax income (loss),” “adjusted pre-tax costs,” “adjusted earnings per share,” “operating cash flow, excluding working capital,” and “net debt-to-capital ratio.” These are non-GAAP financial measures that are included to help facilitate comparisons of operating performance across periods and to help facilitate comparisons with other companies in our industry. Where applicable, these measures exclude items that do not reflect the core operating results of our businesses in the current period or other adjustments to reflect how management analyzes results. Reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure are included within this release.
This news release also includes the term “mid-cycle adjusted EBITDA,” which is a forward-looking non-GAAP financial measure. EBITDA is defined as estimated net income plus estimated net interest expense, income taxes, and depreciation and amortization. Adjusted EBITDA is defined as estimated EBITDA plus the proportional share of selected equity affiliates’ estimated net interest expense, income taxes, and depreciation and amortization less the portion of estimated adjusted EBITDA attributable to noncontrolling interests. Net income is the most directly comparable GAAP financial measure for the consolidated company and income before income taxes is the most directly comparable GAAP financial measure for operating segments. Mid-cycle adjusted EBITDA is defined as the average adjusted EBITDA generated over a complete economic cycle. Mid-cycle adjusted EBITDA estimates or targets depend on future levels of revenues and expenses, including amounts that will be attributable to noncontrolling interests, which are not reasonably estimable at this time. Accordingly, we cannot provide a reconciliation of projected mid-cycle adjusted EBITDA to consolidated net income or segment income before income taxes without unreasonable effort.
References in the release to earnings refer to net income attributable to
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Millions of Dollars |
||||
|
Except as Indicated |
||||
|
2024 |
|
2023 |
||
|
1Q |
|
4Q |
1Q |
|
Reconciliation of Consolidated Earnings to Adjusted Earnings |
|
|
|
|
|
Consolidated Earnings |
$ |
748 |
|
1,260 |
1,961 |
Pre-tax adjustments: |
|
|
|
|
|
Impairments |
|
163 |
|
— |
— |
Certain tax impacts |
|
— |
|
(19) |
— |
Net gain on asset disposition |
|
— |
|
— |
(36) |
Legal settlement |
|
(66) |
|
— |
— |
Business transformation restructuring costs1 |
|
— |
|
50 |
35 |
DCP integration restructuring costs2 |
|
— |
|
— |
12 |
Tax impact of adjustments3 |
|
(23) |
|
(12) |
(2) |
Other tax impacts |
|
— |
|
83 |
— |
Noncontrolling interests |
|
— |
|
— |
(5) |
Adjusted earnings |
$ |
822 |
|
1,362 |
1,965 |
Earnings per share of common stock (dollars) |
$ |
1.73 |
|
2.86 |
4.20 |
Adjusted earnings per share of common stock (dollars)4 |
$ |
1.90 |
|
3.09 |
4.21 |
|
|
|
|
|
|
Reconciliation of Segment Pre-Tax Income (Loss) to Adjusted Pre-Tax Income (Loss) |
|
|
|
|
|
Midstream Pre-Tax Income |
$ |
554 |
|
756 |
702 |
Pre-tax adjustments: |
|
|
|
|
|
Impairments |
|
59 |
|
— |
— |
Certain tax impacts |
|
— |
|
(2) |
— |
Net gain on asset disposition |
|
— |
|
— |
(36) |
DCP integration restructuring costs2 |
|
— |
|
— |
12 |
Adjusted pre-tax income |
$ |
613 |
|
754 |
678 |
Chemicals Pre-Tax Income |
$ |
205 |
|
106 |
198 |
Pre-tax adjustments: |
|
|
|
|
|
None |
|
— |
|
— |
— |
Adjusted pre-tax income |
$ |
205 |
|
106 |
198 |
Refining Pre-Tax Income |
$ |
131 |
|
814 |
1,608 |
Pre-tax adjustments: |
|
|
|
|
|
Impairments |
|
104 |
|
— |
— |
Certain tax impacts |
|
— |
|
(17) |
— |
Legal accrual |
|
— |
|
— |
— |
Legal settlement |
|
(7) |
|
— |
— |
Adjusted pre-tax income |
$ |
228 |
|
797 |
1,608 |
Marketing and Specialties Pre-Tax Income |
$ |
404 |
|
432 |
426 |
Pre-tax adjustments: |
|
|
|
|
|
Legal settlement |
|
(59) |
|
— |
— |
Adjusted pre-tax income |
$ |
345 |
|
432 |
426 |
Corporate and Other Pre-Tax Loss |
$ |
(330) |
|
(347) |
(283) |
Pre-tax adjustments: |
|
|
|
|
|
Business transformation restructuring costs1 |
|
— |
|
50 |
35 |
Loss on early redemption of DCP debt |
|
— |
|
— |
— |
Adjusted pre-tax loss |
$ |
(330) |
|
(297) |
(248) |
|
|
|
|
|
|
1 Restructuring costs, related to Phillips 66’s multi-year business transformation efforts, are primarily due to consulting fees and severance costs. |
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2 Restructuring costs, related to the integration of DCP Midstream, primarily reflect severance costs and consulting fees. A portion of these costs are attributable to noncontrolling interests. |
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3 We generally tax effect taxable |
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4 Q1 2024 and Q4 2023 are based on adjusted weighted-average diluted shares of 432,158 thousand and 440,582 thousand, respectively. Other periods are based on the same weighted-average diluted shares outstanding as that used in the GAAP diluted earnings per share calculation. Income allocated to participating securities, if applicable, in the adjusted earnings per share calculation is the same as that used in the GAAP diluted earnings per share calculation. |
|
|
||
|
|
||
|
Millions of Dollars |
||
|
Except as Indicated |
||
|
|
||
Debt-to-Capital Ratio |
|
||
Total Debt |
$ |
20,154 |
|
Total Equity |
|
30,793 |
|
Debt-to-Capital Ratio |
|
40 |
% |
Total Cash |
|
1,570 |
|
Net Debt-to-Capital Ratio |
|
38 |
% |
|
|||
|
|
||
|
Millions of Dollars |
||
|
|
||
Reconciliation of |
|
||
|
$ |
(236) |
|
Less: Net Working Capital Changes |
|
(1,447) |
|
Operating Cash Flow, |
$ |
1,211 |
|
|
|
||
|
|
||
|
|
|
Millions of Dollars |
||
|
Except as Indicated |
||
|
|
2024 |
2023 |
|
1Q |
4Q |
|
Reconciliation of Refining Income Before Income Taxes to R ealized Refining Margins |
|
|
|
Income before income taxes |
$ |
131 |
814 |
Plus: |
|
|
|
Taxes other than income taxes |
|
86 |
87 |
Depreciation, amortization and impairments |
|
321 |
227 |
Selling, general and administrative expenses |
|
47 |
48 |
Operating expenses |
|
1,021 |
1,086 |
Equity in (earnings) loss of affiliates |
|
(108) |
85 |
Other segment expense, net |
|
1 |
5 |
Proportional share of refining gross margins contributed by equity affiliates |
|
331 |
167 |
Special items: |
|
|
|
Certain tax impacts |
|
— |
(15) |
Legal settlement |
|
(7) |
— |
Realized refining margins |
$ |
1,823 |
2,504 |
Total processed inputs (thousands of barrels) |
|
144,730 |
156,720 |
Adjusted total processed inputs (thousands of barrels)* |
|
166,984 |
173,786 |
Income before income taxes (dollars per barrel)** |
$ |
0.91 |
5.19 |
Realized refining margins (dollars per barrel)*** |
$ |
10.91 |
14.41 |
*Adjusted total processed inputs include our proportional share of processed inputs of an equity affiliate. |
|||
**Income before income taxes divided by total processed inputs. |
|||
***Realized refining margins per barrel, as presented, are calculated using the underlying realized refining margin amounts, in dollars, divided by adjusted total processed inputs, in barrels. As such, recalculated per barrel amounts using the rounded margins and barrels presented may differ from the presented per barrel amounts. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240426235628/en/
832-765-2297
jeff.dietert@p66.com
832-765-2297
owen.simpson@p66.com
855-841-2368
thaddeus.f.herrick@p66.com
Source: