Phillips 66 Quarterly Report for Q3 Ended Sep 30, 2018

Summary

Phillips 66 reported a significant increase in net income for the third quarter and the first nine months of 2018 compared to the same periods in 2017. This improvement was driven by higher refining and marketing margins, increased earnings from equity affiliates in the Midstream and Chemicals segments, and favorable income tax impacts due to the Tax Cuts and Jobs Act. The company generated substantial operating cash flow, although cash and cash equivalents decreased due to significant share repurchases and capital expenditures. Despite these uses of cash, Phillips 66 maintains a strong liquidity position with substantial committed capacity available under its credit facilities, indicating financial stability and the ability to meet its obligations and fund future growth.

Key Highlights

• 1Net income attributable to Phillips 66 increased by 81% to $1.49 billion for Q3 2018 and by 76% to $3.36 billion for the first nine months of 2018 compared to the prior year periods.
• 2Total revenues and other income grew by 16% to $30.6 billion in Q3 2018 and by 13% to $84.4 billion for the nine months of 2018, reflecting higher commodity prices.
• 3Operating cash flow more than doubled to $3.43 billion for the first nine months of 2018 from $1.72 billion in the prior year.
• 4The company repurchased approximately $4.1 billion of its common stock in the first nine months of 2018, significantly impacting its cash and cash equivalents balance.
• 5The effective income tax rate decreased significantly in 2018 due to the U.S. Tax Cuts and Jobs Act, contributing to improved net income.
• 6Refining segment net income saw a substantial increase, driven by higher realized refining margins.
• 7Phillips 66 maintains a strong liquidity position with approximately $5.8 billion in total committed capacity available under its credit facilities as of September 30, 2018.

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