Summary
Phillips 66 (PSX) demonstrated a significant financial turnaround in 2021 compared to the challenging prior year, reporting a net income of $1.3 billion and generating $6.0 billion in cash from operating activities. This recovery was driven by improving global demand for refined petroleum products and strong performance in the Chemicals segment, largely due to higher refining and petrochemical margins. The company is also strategically positioning itself for a lower-carbon future, evidenced by its investment in NOVONIX, a lithium-ion battery materials company, and its greenhouse gas emission intensity reduction targets. Key strategic priorities for Phillips 66 include operating excellence, disciplined capital allocation for returns-focused growth in Midstream and Chemicals, enhancing refining returns, and delivering shareholder value through dividends and potential share repurchases. The company is also progressing a significant move to acquire all outstanding limited partner interests in Phillips 66 Partners, expected to close in early 2022, which will simplify its structure.
Financial Highlights
48 data points| Revenue | $111.48B |
| Cost of Revenue | $102.10B |
| Gross Profit | $9.37B |
| R&D Expenses | $47.00M |
| SG&A Expenses | $1.74B |
| Operating Income | $1.32B |
| Interest Expense | $567.00M |
| Net Income | $1.32B |
| EPS (Basic) | $2.97 |
| EPS (Diluted) | $2.97 |
| Shares Outstanding (Basic) | 440.03M |
| Shares Outstanding (Diluted) | 440.36M |
Key Highlights
- 1Phillips 66 returned to profitability in 2021 with a net income of $1.3 billion, a substantial improvement from a net loss in 2020, driven by recovery in refined product demand and higher margins.
- 2Strong performance in the Chemicals segment, primarily through its investment in CPChem, contributed significantly to earnings due to increased margins on strong demand and tight supply.
- 3The company generated $6.0 billion in cash from operating activities in 2021, allowing for capital expenditures of $1.9 billion, dividends of $1.6 billion, and debt reduction of $1.5 billion.
- 4Phillips 66 is advancing its energy transition strategy with a 16% investment in NOVONIX, a lithium-ion battery materials company, and by setting 2030 GHG emission intensity reduction targets.
- 5A major strategic move is underway with the agreement to acquire all outstanding limited partner interests in Phillips 66 Partners in an all-stock transaction, expected to close in March 2022, which will result in Phillips 66 Partners becoming a wholly owned subsidiary.
- 6The Refining segment saw improved results due to higher market crack spreads and increased utilization rates (84% in 2021 vs. 76% in 2020), though the Alliance Refinery was shut down and planned for conversion to a terminal due to Hurricane Ida damage.
- 7The company maintained strong liquidity, ending 2021 with $3.1 billion in cash and cash equivalents and approximately $5.7 billion in available committed capacity under its credit facilities.