01—Abstract
Summary
Summary of the 10-K filed February 22, 2013. Cited figures are marked; the original filing is the authoritative source.
Phillips 66 (PSX) emerged as an independent, publicly traded company on April 30, 2012, following its separation from ConocoPhillips.
For the fiscal year ending December 31, 2012, Phillips 66 reported net income attributable to the company of $4.124 billiona. The company's operations are diversified across three main segments: Refining and Marketing (R&M), Midstream, and Chemicals. The R&M segment, which accounted for 77% of total assets at year-end 2012, performed strongly with improved refining margins, particularly in the Midcontinent region.
The Midstream segment, focused on natural gas and NGLs, experienced a decrease in earnings due to lower NGL prices. The Chemicals segment, largely represented by its investment in CPChem, saw robust margins driven by favorable NGL feedstock costs in North America.
Phillips 66 also demonstrated a commitment to shareholder returns, increasing its quarterly dividend and initiating a significant share repurchase program. The company managed its capital effectively, with a 2013 capital program focused on growth in Midstream and Chemicals, and improvements in R&M, while maintaining a healthy debt-to-capital ratio.
02—Key points
Key Highlights
- Phillips 66 completed its separation from ConocoPhillips on April 30, 2012, becoming an independent publicly traded company.
- Reported net income attributable to Phillips 66 of $4.124 billion for the fiscal year ended December 31, 2012.
- The Refining and Marketing (R&M) segment represented 77% of total assets and benefited from strong refining margins, especially in the Midcontinent.
- The Midstream segment, focused on natural gas and NGLs, experienced a decline in earnings due to lower NGL prices.
- The Chemicals segment, primarily through its investment in CPChem, saw improved margins driven by favorable North American NGL feedstock costs.
- Phillips 66 initiated a $2 billion share repurchase program and increased its quarterly dividend.
- The company maintained a 93% refining capacity utilization rate for 2012, up from 92% in 2011.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2012filed February 22, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $179.29B$195.93B | −8.5% |
| R&D Expenses | $70.00M$69.00M | +1.4% |
| SG&A Expenses | $1.70B$1.39B | +22.2% |
| Operating Income | $4.08B$4.73B | −13.9% |
| Net Income | $4.12B$4.78B | −13.6% |
| EPS (Basic) | $6.55$7.61 | −13.9% |
| EPS (Diluted) | $6.48$7.52 | −13.8% |
| Shares Outstanding (Basic) | 628.84M627.63M | +0.2% |
| Shares Outstanding (Diluted) | 636.76M634.64M | +0.3% |
05—Questions
Frequently Asked Questions
When did Phillips 66 become an independent company?
Phillips 66 became an independent, publicly traded company on April 30, 2012, following its separation from ConocoPhillips.
What were the main segments of Phillips 66's business in 2012?
Phillips 66's business was organized into three operating segments: Refining and Marketing (R&M), Midstream, and Chemicals.
How did Phillips 66 manage its capital and shareholder returns in 2012?
Phillips 66 generated $4.3 billion in operating cash flow, which was used for capital expenditures, debt repayment, dividends, and share repurchases. The company initiated a $1 billion share repurchase program, later increased to $2 billion, and increased its quarterly dividend by 25% in the fourth quarter of 2012.
What was the financial performance of the R&M segment in 2012?
The R&M segment, representing 77% of the company's total assets, reported earnings of $3.729 billion in 2012. This segment benefited from improved refining margins, particularly in the Midcontinent region, and maintained a high refinery utilization rate of 93%.
06—Continue