Summary
Phillips 66 reported a net loss of $141 million for the second quarter of 2020, a significant decrease from the $1.424 billion net income reported in the same period of 2019. This decline was primarily driven by the adverse economic impacts of the COVID-19 pandemic, which led to reduced demand for refined products, lower refining margins, and decreased refinery throughput. Significant impairments, including a $1.845 billion goodwill impairment in the Refining segment and a $1.161 billion impairment on the investment in DCP Midstream, heavily impacted the six-month results, leading to a net loss of $2.637 billion. Despite the challenging environment, the company focused on enhancing liquidity by securing a $2 billion term loan facility, issuing $2 billion in senior unsecured notes, and reducing capital spending plans. Phillips 66 ended the quarter with $1.9 billion in cash and cash equivalents and maintained access to substantial committed credit facilities. Management expressed uncertainty regarding the duration and depth of the economic impact of COVID-19 but believes its current liquidity position is sufficient to meet near- and long-term funding requirements.
Financial Highlights
46 data points| Revenue | $10.91B |
| Cost of Revenue | $9.61B |
| Gross Profit | $1.30B |
| SG&A Expenses | $409.00M |
| Operating Income | -$2.64B |
| Net Income | -$141.00M |
| EPS (Basic) | $-0.33 |
| EPS (Diluted) | $-0.33 |
| Shares Outstanding (Basic) | 438.76M |
| Shares Outstanding (Diluted) | 438.76M |
Key Highlights
- 1Reported a net loss of $141 million for Q2 2020, a significant decline from $1.424 billion net income in Q2 2019, largely due to the COVID-19 pandemic's impact on demand and margins.
- 2Recognized substantial impairments totaling $3.006 billion in the first six months of 2020, including a $1.845 billion goodwill impairment in Refining and a $1.161 billion impairment of the DCP Midstream investment.
- 3Secured $2 billion in new debt financing (a term loan and senior unsecured notes) and reduced 2020 capital spending by $700 million to preserve liquidity.
- 4Total assets decreased from $58.72 billion at December 31, 2019, to $54.52 billion at June 30, 2020, reflecting the challenging economic conditions.
- 5Midstream segment showed resilience with $324 million in pre-tax income for Q2 2020, though six-month results were impacted by the DCP Midstream impairment.
- 6Refining segment experienced a significant pre-tax loss of $878 million in Q2 2020 due to sharply lower realized refining margins and reduced throughput.
- 7Company suspended share repurchase programs in March 2020 to conserve cash and ended the quarter with $1.9 billion in cash and cash equivalents.