01—Abstract
Summary
Summary of the 10-K filed February 21, 2014. Cited figures are marked; the original filing is the authoritative source.
Phillips 66 (PSX) completed its first full year as an independent, publicly traded company in 2013, having been spun off from ConocoPhillips in April 2012.
The company reported earnings of $3.7 billiona and generated $6.0 billion in cash from operations. Strategic priorities for 2014 include maintaining operational excellence, delivering profitable growth through increased capital expenditures, growing shareholder distributions via dividends and share repurchases, and building a high-performing organization. The company's performance was influenced by market conditions across its segments: Midstream benefited from increased transportation volumes and equity gains, while Refining saw lower earnings due to reduced refining margins.
The Chemicals segment, primarily through its joint venture CPChem, experienced growth driven by price-advantaged NGL feedstocks and improved polyethylene margins. Marketing and Specialties (M&S) showed improved earnings, partly due to higher RINs values and international marketing margins.
02—Key points
Key Highlights
- Phillips 66 reported earnings of $3.7 billion in 2013 and generated $6.0 billion in cash from operating activities, demonstrating strong financial performance in its first full year as an independent entity.
- The company significantly increased its dividend rate by 56% in 2013, reflecting confidence in its capital structure and cash flow generation.
- Capital expenditures and investments are projected to increase by approximately 40% in 2014 to $2.7 billion (consolidated) and $4.6 billion (including joint ventures), focusing on growth in Midstream and Chemicals.
- Phillips 66 Partners LP, a master limited partnership formed in 2013, completed its initial public offering, raising $404 million in net proceeds.
- The Midstream segment's Transportation business saw improved earnings due to higher throughput fees and the absence of significant impairments, while DCP Midstream benefited from higher natural gas and crude oil prices.
- The Chemicals segment, through its 50% investment in CPChem, experienced a 20% earnings increase in 2013, driven by lower debt-related costs and improved polyethylene margins.
- Refining earnings decreased by 42% in 2013, primarily due to lower realized refining margins and feedstock advantage, although impairments from the prior year were reduced.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 21, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $171.60B$179.29B | −4.3% |
| R&D Expenses | $69.00M$70.00M | −1.4% |
| SG&A Expenses | $1.48B$1.70B | −13.2% |
| Operating Income | $3.67B$4.08B | −10.1% |
| Net Income | $3.73B$4.12B | −9.7% |
| EPS (Basic) | $6.07$6.55 | −7.3% |
| EPS (Diluted) | $6.02$6.48 | −7.1% |
| Shares Outstanding (Basic) | 612.92M628.84M | −2.5% |
| Shares Outstanding (Diluted) | 618.99M636.76M | −2.8% |
05—Questions
Frequently Asked Questions
What was Phillips 66's overall financial performance in 2013?
In 2013, Phillips 66 reported earnings of $3.7 billion and generated $6.0 billion in cash from operating activities. The company also increased its dividend by 56% and repurchased $2.6 billion of its common stock.
How did the company's different segments perform in 2013?
The Midstream segment saw improved earnings, driven by Transportation and DCP Midstream. The Chemicals segment (CPChem) grew earnings by 20% due to advantageous NGL feedstock and better margins. The Refining segment's earnings decreased by 42% due to lower margins, while Marketing and Specialties improved its earnings, partly due to RINs values.
What are Phillips 66's key strategic priorities and capital plans?
Phillips 66's strategic priorities include maintaining operating excellence, delivering profitable growth with increased 2014 capital expenditures focused on Midstream and Chemicals, growing shareholder distributions, and building a high-performing organization. The company also formed Phillips 66 Partners LP, a midstream master limited partnership, through an IPO in 2013.
06—Continue