01—Abstract
Summary
Summary of the 10-K filed February 22, 2023. Cited figures are marked; the original filing is the authoritative source.
Phillips 66's (PSX) 2022 10-K filing demonstrates a strong financial performance driven by significant improvements in its Refining segment, which benefited from higher market crack spreads and recovering demand.
The company reported net income attributable to Phillips 66 of $11,024 milliona, a substantial increase from $1,317 million in 2021, and generated $10.8 billion in cash from operating activities. Strategic initiatives in 2022 included the completion of the Phillips 66 Partners merger and progress on the DCP Midstream merger, aimed at enhancing operational synergies and financial integration.
The company also announced plans to return significant capital to shareholders through dividends and share repurchases, signaling confidence in its ongoing operational performance and future cash flow generation. Investments in growth capital, particularly in lower-carbon opportunities within the Midstream and Chemicals segments, highlight the company's commitment to energy transition initiatives.
02—Key points
Key Highlights
- Phillips 66 reported a net income of $11,024 million for 2022, a significant improvement from $1,317 million in 2021, driven by strong refining margins.
- The company generated $10.8 billion in cash from operating activities in 2022, enabling debt reduction, capital expenditures, dividend payments, and share repurchases.
- Completed the merger with Phillips 66 Partners LP, integrating its midstream assets.
- Announced a definitive agreement to acquire the remaining publicly held common units of DCP Midstream, LP, expected to close in Q2 2023, significantly increasing Phillips 66's economic interest.
- The Refining segment saw a significant turnaround, moving from a loss in 2021 to a substantial income of $7,816 million in 2022, primarily due to improved market crack spreads.
- The company plans to return $10 billion to $12 billion to shareholders through dividends and share repurchases between July 2022 and December 2024.
- Phillips 66 is investing in lower-carbon opportunities, with approximately 50% of its 2023 growth capital budget allocated to these initiatives.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Phillips 66 kept $0.06.
- Revenue$169.99B100.0%
- Cost of revenue−$149.93B88.2%
- Gross profit$20.06B11.8%
- Operating costs−$9.03B5.3%
- Operating income$11.02B6.5%
- Interest, other & tax$-00.0%
- Net income$11.02B6.5%
Where FY2022 revenue went
$169.99B- Cost of revenue: $149.93B, 88% of revenue
- Net income: $11.02B, 6.5% of revenue
- R&D: $42.0M, 0.0% of revenue
- SG&A: $2.17B, 1.3% of revenue
- Other operating costs: $6.82B, 4.0% of revenue
Kept 6.5% as net incomeNet income $11.02B · 6.5%R&D $42.0M · 0.0%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 22, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $169.99B$111.48B | +52.5% |
| Cost of Revenue | $149.93B$102.10B | +46.8% |
| Gross Profit | $20.06B$9.37B | +114.0% |
| R&D Expenses | $42.00M$47.00M | −10.6% |
| SG&A Expenses | $2.17B$1.74B | +24.3% |
| Operating Income | $11.02B$1.32B | +737.1% |
| Interest Expense | $611.00M$567.00M | +7.8% |
| Net Income | $11.02B$1.32B | +737.1% |
| EPS (Basic) | $23.36$2.97 | +686.5% |
| EPS (Diluted) | $23.27$2.97 | +683.5% |
| Shares Outstanding (Basic) | 471.50M440.03M | +7.2% |
| Shares Outstanding (Diluted) | 473.73M440.36M | +7.6% |
05—Questions
Frequently Asked Questions
What was Phillips 66's financial performance in 2022?
In 2022, Phillips 66 reported a net income attributable to Phillips 66 of $11,024 million, a significant increase from $1,317 million in 2021. This was driven by strong performance across its segments, particularly Refining, and the company generated $10.8 billion in cash from operating activities.
What are the key strategic transactions completed or announced by Phillips 66 during the reporting period?
The company completed the merger with Phillips 66 Partners LP and announced a definitive agreement to acquire the remaining publicly held common units of DCP Midstream, LP. The DCP Midstream acquisition is expected to close in the second quarter of 2023 and will increase Phillips 66's economic interest in DCP LP from 43.3% to 86.8%.
How is Phillips 66 returning capital to shareholders?
Phillips 66 is committed to returning capital to shareholders through dividends and share repurchases. The company increased its quarterly dividend in 2022 and early 2023 and repurchased $1.5 billion of its common stock in 2022. It aims to return $10 billion to $12 billion to shareholders between July 2022 and December 2024.
What is Phillips 66's focus for future capital investments?
The company plans to invest $2 billion in capital expenditures and investments in 2023, with approximately 50% of the growth capital allocated to lower-carbon opportunities. Key areas include enhancements to the Midstream NGL value chain and the conversion of its San Francisco Refinery to a renewable fuels facility.
06—Continue