Phillips 66 (PSX)

[Timothy Smith]

Phillips 66 (NYSE:PSX) and Spectra Energy (NYSE:SE) announce plans to prop up their troubled DCP Midstream (NYSE:DPM) natural gas liquids joint venture with $1.5B in cash and a share of two pipelines.

[Enterprising Investor]

Warren Buffett talks Phillips 66 stake (9/08/15)

http://video.cnbc.com/gallery/?video=3000418187&play=1

[Enterprising Investor]

Buffett Refines His Taste for Phillips 66 (9/05/15)

Why Phillips 66 shares could rise 35%.

Warren Buffett has rediscovered the appeal of the country’s top independent oil refiner, Phillips 66. Buffett’s Berkshire Hathaway recently disclosed that it has taken a 10.8% stake in the company, now valued at $4.5 billion. Berkshire held a smaller interest in Phillips until 2013, when it swapped most of that stake, some $1.35 billion of Phillips stock, for a chemical business owned by Phillips that was folded into Berkshire’s Lubrizol division.

Phillips (ticker: PSX) has been a big winner since it was spun out of ConocoPhillips (COP) in 2012, more than doubling in value while its former parent has languished, falling 15% due to the sharp drop in oil and natural-gas prices. Barron’s has been bullish on Phillips 66 from the start (“The Right Spin on Phillips,” May 7, 2012) and earlier this year (“Phillips 66 Shares Could Rise Sharply,” Jan. 19).

Phillips shares, which were flat last week after the Berkshire (BRKA) disclosure, still look appealing. They trade for about 12 times projected 2015 earnings of $6.65 a share, a premium to rivals Marathon Petroleum (MPC) and Valero Energy (VLO), which both fetch about eight times expected 2015 profits. Evan Calio, an energy analyst at Morgan Stanley, has an Overweight rating on the stock and a price target of $105, from a recent $77.20. The Street sees $7 a share in 2016 earnings.

A shareholder-friendly management team led by CEO Greg Garland has sought to expand and highlight the company’s nonrefining businesses, notably chemicals and “midstream,” which involves energy pipelines and other infrastructure. These carry higher valuations than refining, which has been lucrative in recent years but subject to volatile margin swings. Lately, refining margins based on so-called crack spreads have tightened sharply from wide levels. Refining accounted for 60% of Phillips’ earnings in the second quarter. Garland’s aggressive goal is to drop that to about a third by 2018. The greater diversity of Phillips’ profit accounts for its valuation premium versus peers.

Phillips created an MLP, Phillips 66 Partners (PSXP) in 2013, and the company has been selling, or “dropping down” midstream assets into the partnership, taking advantage of the valuation arbitrage between the highly valued midstream segment and the lowly refining sector. Calio sees $18 billion of possible asset dropdowns to the MLP through 2018 although the sharp pullback in the MLP sector this year could reduce that potential. Phillips also has an attractive chemicals joint venture with Chevron, and a group of gas stations and other businesses.

The company has used its ample cash flow to boost its dividend, now 56 cents a share quarterly, up from 20 cents initially after the spinoff, and repurchase stock. Phillips’ shares outstanding are down 14% since the spinoff.

Phillips probably is the kind of business that Berkshire would like to own, but the company’s market value of $42 billion probably makes it too large for Berkshire, considering the premium it would have to pay, Berkshire’s recent $32 billion deal for Precision Castparts (PCP), and Phillips’ multiyear plan to develop its nonrefining businesses. Buffett evidently believes he’s in good hands with Phillips management. That looks like a good bet.

-- Andrew Bary

http://www.barrons.com/articles/buffett-refines-his-taste-for-phillips-66-1441430423?cb=logged0.6283610163212693

[Timothy Smith]

Warren Buffett’s commitment to PSX might look like a case of buying at the top, as factors such as wide spreads between prices for U.S. crude and refined products on global markets have made the past several quarters some of the most profitable ever for U.S. refiners and stocks of refining companies have enjoyed a strong YTD rally.

But Heard On The Street's Spencer Jakab says many non-refining businesses within PSX, such as its midstream unit, are substantial and stand to benefit if beaten-down oil and natural gas prices rebound, and that Buffett actually is making his own bet on energy infrastructure.

Berkshire’s stake is too large to be a simple portfolio move and looks more like a strategic step, Jakab writes, perhaps a shares-for-assets swap for assets complementary to BRK’s existing infrastructure that offer steady, utility-like returns, rather than the refining units that are all the rage.

[Timothy Smith]

Read that this AM. Very nice move. The first of many in this sector in my opinion that are to be expected. Watch for $XOM again soon.

[Enterprising Investor]

Berkshire Reports $4.5 Billion Stake in Refiner Phillips 66 (8/28/15)

Warren Buffett’s Berkshire Hathaway Inc. disclosed a $4.5 billion stake in Phillips 66, the Houston-based oil refiner, as the billionaire investor’s company increases its bet on the energy industry.

Berkshire held almost 58 million shares after purchases this week, or more than 10 percent of the total outstanding, according to a regulatory filing issued Friday by Buffett’s Omaha, Nebraska-based company. Phillips 66 closed at $77.23 on Friday in New York.

Buffett and his deputy investment managers, Todd Combs and Ted Weschler, are known for making large, contrary bets on stocks. The latest wager comes amid a slump in crude prices, driven by concerns that a supply glut will persist.

“Berkshire’s made a clear statement about how they view the oil business,” said Cliff Gallant, an analyst at Nomura Holdings Inc. “They seem to be taking the long view that demand for fuel is going to come back.”

Concern over China’s growth roiled global financial markets earlier this week and created a buying opportunity for Berkshire. Phillips 66 shares fell below $70 on Monday amid a broad sell-off before rebounding sharply later in the week.

Still, Berkshire may have been accumulating the stake for some time, given the scale of the holding, said Gallant. The filing discloses the prices Berkshire paid for only a fraction of its stake.

Earlier this month, Berkshire didn’t disclose an investment in Phillips 66 at the end of the second quarter. At the time, Buffett’s firm also said it had omitted some data that was reported confidentially to regulators. The Securities and Exchange Commission sometimes allows companies to withhold information from the public to limit copycat investing while a firm is building or cutting a position.

Buffett requested confidential treatment in 2011 filings, as he spent more than $10 billion amassing a stake in International Business Machines Corp. He did the same while building a holding in Exxon Mobil Corp. in 2013.

The most-recent figure Berkshire had given for a Phillips 66 investment was a stake of 7.5 million shares at the end of March.

Buffett’s company formerly held more stock in the refiner. It used most of those shares to buy a business from Phillips 66 last year.

The Phillips 66 holding is relatively small for Berkshire’s stock portfolio. Buffett’s company has stakes in Wells Fargo & Co. and Kraft Heinz Co. valued at more than $20 billion apiece. It is the top shareholder in Coca-Cola Co., IBM and American Express Co.

http://www.bloomberg.com/news/articles/2015-08-29/berkshire-discloses-4-5-billion-stake-in-refiner-phillips-66

[Timothy Smith]

Good article thanks for sharing.

[Norton1973]

PSX....Phillips 66...http://seekingalpha.com/article/3391415-phillips-66-could-cross-100-over-the-next-2-years?auth_param=15od1i:1arvdr8:0498a20ac5bc6dfc76e925ec297ebd8e&uprof=45&dr=1

[Timothy Smith]

Phillips 66 (NYSE:PSX) beat profit expectations on strong Q2 results from Refining and Chemicals even as it pursues a focus on higher-value Midstream growth. Revenue of $29.08B significantly beat expectations for $25.32B.

[Timothy Smith]

Phillips 66 Partners (NYSE:PSXP): Q2 EPS of $0.50 beats by $0.06.

Revenue of $83.8M (+47.3% Y/Y) beats by $1.09M.

[Enterprising Investor]

Phillips 66 Announces Quarterly Dividend (7/08/15)

HOUSTON--(BUSINESS WIRE)--The board of directors of Phillips 66 (NYSE: PSX) has declared a quarterly dividend of 56 cents per share on Phillips 66 common stock. The dividend is payable on Sept. 1, 2015, to shareholders of record as of the close of business on Aug. 17, 2015.

About Phillips 66

Phillips 66 is a diversified energy manufacturing and logistics company. With a portfolio of Midstream, Chemicals, Refining, and Marketing and Specialties businesses, the company processes, transports, stores and markets fuels and products globally. Phillips 66 Partners, the company's master limited partnership, is an integral asset in the portfolio. Headquartered in Houston, the company has 14,000 employees committed to safety and operating excellence. Phillips 66 had $49 billion in assets as of March 31, 2015. For more information, visit www.phillips66.com or follow us on Twitter @Phillips66Co.

http://www.businesswire.com/news/home/20150708006052/en/Phillips-66-Announces-Quarterly-Dividend#.VZ58SYnbKUk

[Enterprising Investor]

10 Most Profitable Businesses in Texas (6/11/15)

http://www.fool.com/investing/general/2015/06/11/10-most-profitable-businesses-in-texas.aspx

[Timothy Smith]

Chevron Phillips Chemical, the joint venture of Chevron (NYSE:CVX) and Phillips 66 (NYSE:PSX), says it is considering a second “megaproject” in the U.S. that would take advantage of low natural gas prices for making plastics and other materials.

[Timothy Smith]

Phillips 66 (NYSE:PSX) says it has halted pumping through a pipeline near the California coast ~150 miles north of Los Angeles after an undetermined amount of crude oil was spilled.

[Enterprising Investor]

Berkshire Hathaway increases stake to 7,499,450 shares, up from 6,567,600 at 12/31/14.

Increased by 14.2 percent.

http://www.sec.gov/Archives/edgar/data/1067983/000095012315006438/xslForm13F_X01/form13fInfoTable.xml

[Enterprising Investor]

Phillips 66 Is Unlocking More Shareholder Value (5/09/15)

As management takes steps to refashion the oil refiner, shares could double.

Gusher! Shares of Phillips 66 have rallied 14% this year, to $81, versus a 3% return from the Standard & Poor’s 500 index. A gain of 15% could lie ahead in coming months, with higher returns thereafter.

Evercore ISI believes that Phillips (ticker: PSX) is worth $90 a share, based on modest expansion in its price/earnings ratio to 12.8 times “normalized” 2015 estimated earnings of $7 a share. Deutsche Bank puts the sum of its parts at $95.

Shares yield 2.7%, and the oil refiner just announced a 12% increase in its quarterly dividend.

As oil touched a low in January, Barron’s saw a bargain (“Get Your Kicks With Phillips 66,” Jan. 19). Investors worried that refining, which accounts for 60% of Phillips’ earnings, would be hurt as the price advantage of cheap U.S. crude briefly vanished versus European Brent. But Brent prices again are trading above West Texas Intermediate, the U.S. benchmark, restoring the attraction of Phillips’ refined products.

In the first quarter, Phillips’ refining operating earnings jumped 61% from a year earlier, beating expectations. Earnings from marketing products at the gas stations bearing the company’s iconic logo climbed 41%. But all is not rosy: A collapse in the price of natural-gas liquids slashed profits in the chemicals and refining units.

To focus on quarterly earnings is to miss the bigger picture, however. CEO Greg Garland is refashioning Phillips into an operator of infrastructure for the transport, storage, and processing of energy—all more profitable activities than refining. Many Phillips assets are expected to be put into Phillips 66 Partners (PSXP), a relatively young master limited partnership that will eventually pay a sizable yield. Management also has indicated it might spin off assets in coming years to realize value.

“More than most companies, this management has a plan,” says Craig Shere of Tuohy Brothers Investment Research. “They’ve stated many times that the market underestimates the substantial value of their midstream and CPChem growth projects.” CPChem is its chemical unit.

At the Ira Sohn Investment Conference last week, Daniel Dreyfus of 3G Capital described the charms of Phillips, saying it could earn $10 a share a few years hence, versus a consensus estimate of $6.70 in 2015, as it grows chemicals and midstream. At 12 to 15 times 2017 earnings, the stock could trade for $120-$150.

-- Leslie P. Norton

http://online.barrons.com/articles/phillips-66-is-unlocking-more-shareholder-value-1431136551

The spinoff value of PSX was $33.96.

[Enterprising Investor]

Phillips 66 Announces Quarterly Dividend (5/06/15)

HOUSTON--(BUSINESS WIRE)--The board of directors of Phillips 66 (NYSE: PSX) has declared a quarterly dividend of 56 cents per share on Phillips 66 common stock, representing an increase of 12 percent from the prior quarter. The dividend is payable on June 1, 2015, to shareholders of record as of the close of business on May 18, 2015.

“This dividend increase demonstrates our ongoing commitment to shareholder distributions,” said Greg Garland, chairman and CEO of Phillips 66. “Our focus on disciplined capital allocation allows us to continue to return value to our shareholders while also significantly growing our Midstream and Chemicals businesses.”

About Phillips 66

Phillips 66 is a diversified energy manufacturing and logistics company. With a portfolio of Midstream, Chemicals, Refining, and Marketing and Specialties businesses, the company processes, transports, stores and markets fuels and products globally. Phillips 66 Partners, the company's master limited partnership, is an integral asset in the portfolio. Headquartered in Houston, the company has 14,000 employees committed to safety and operating excellence. Phillips 66 had $49 billion in assets as of March 31, 2015. For more information, visit www.phillips66.com or follow us on Twitter @Phillips66Co.

Contacts

Phillips 66
Kevin Mitchell, 832-765-2297 (investors)
[e-mail]
or
Rosy Zuklic, 832-765-2297 (investors)
[e-mail]
or
Dennis Nuss, 832-765-1850 (media)
[e-mail]

http://www.businesswire.com/news/home/20150506006320/en/Phillips-66-Announces-Quarterly-Dividend#.VVQW6YnbKUk

[Enterprising Investor]

Phillips 66 Reports First-Quarter Earnings of $987 Million or $1.79 Per Share (4/30/15)

Adjusted earnings of $834 million or $1.51 per share

Highlights

• Highest realized refining margin in eight quarters at $12.26 per barrel

• Refining utilization impacted by turnaround activity and unplanned downtime

• Improved Chemicals capacity utilization

• Received $1.5 billion from Phillips 66 Partners debt and equity offerings

• Repaid $800 million of maturing senior notes

HOUSTON--(BUSINESS WIRE)--Phillips 66 (NYSE: PSX), an energy manufacturing and logistics company, announces first-quarter earnings of $987 million, compared with earnings of $1.1 billion during the fourth quarter of 2014. Adjusted earnings were $834 million, a decrease of $79 million from the fourth quarter of 2014.

“Refining market conditions helped us realize the best margins we’ve had over the last two years,” said Greg Garland, chairman and CEO of Phillips 66. “Refining utilization rates were impacted by a heavy turnaround schedule, and were further reduced by the extended turnaround at the Alliance Refinery. Our Chemicals business increased capacity utilization and had a solid quarter. The NGL market environment negatively impacted results from our DCP Midstream investment as well as our own NGL midstream business. We continued to aggressively grow Phillips 66 Partners through the drop of our interests in three pipeline systems, and Partners also made good progress on its organic growth and joint venture projects."

"We continue to execute major projects in Midstream and Chemicals, as well as smaller high-return projects, on time and on budget. Our capital discipline and strong balance sheet allow us to maintain shareholder distributions, in the form of share repurchases and regular dividends.”

[tables deleted]

Midstream adjusted earnings were $67 million in the first quarter, compared with adjusted earnings of $97 million in the fourth quarter of 2014.

Phillips 66’s Transportation business generated earnings of $65 million during the first quarter. The $12 million increase was primarily due to the fourth quarter write-off of a deferred tax asset.

During the first quarter, the company’s equity investment in DCP Midstream, LLC (DCP Midstream) had an adjusted loss of $12 million, comparable to the prior quarter. The loss was due to lower NGL, crude and natural gas prices, partially offset by the absence of hedge losses associated with the steep price declines during the fourth quarter.

Earnings from the NGL business were $14 million in the first quarter. The $41 million decrease was largely related to lower trading margins on seasonal propane and butane storage activities, as well as inventory impacts.

Phillips 66 Partners contributed $19 million to the Midstream segment's first-quarter earnings.

The Chemicals segment reflects Phillips 66's equity investment in Chevron Phillips Chemical Company LLC (CPChem). First-quarter Chemicals adjusted earnings were $203 million, compared with adjusted earnings of $270 million in the fourth quarter of 2014.

During the first quarter, CPChem's Olefins and Polyolefins (O&P) business contributed $183 million to Phillips 66's Chemicals adjusted earnings. The $65 million decrease was mainly due to lower O&P cash chain margins, driven by lower polyethylene sales prices, as well as planned turnarounds in the first quarter. Global utilization for O&P was 87 percent during the quarter, up from 83 percent in the fourth quarter, primarily reflecting a full quarter of Port Arthur operations.

CPChem's Specialties, Aromatics and Styrenics (SA&S) business contributed $26 million of adjusted earnings in the first quarter, in line with the prior quarter.
Refining adjusted earnings were $495 million in the first quarter, compared with $322 million in the fourth quarter of 2014. The improvement was primarily due to higher realized refining margins, partially offset by lower volumes.

The increase in margins was largely driven by improved secondary product margins as well as higher gasoline market crack spreads. Secondary product margins improved mainly due to lower crude costs. Crack spreads improved mainly as a result of significantly higher gasoline market cracks in the Western/Pacific. First-quarter gasoline market cracks for that region were $20.21 per barrel, compared with $7.46 per barrel during the fourth quarter of 2014.

Lower volumes were primarily driven by turnaround activity and unplanned downtime in the Gulf Coast at the Alliance Refinery. Phillips 66’s worldwide refining crude utilization and clean product yield were both 84 percent in the first quarter of 2015.

Marketing and Specialties (M&S) first-quarter adjusted earnings were $194 million, compared with $324 million in the fourth quarter of 2014.

Adjusted earnings for Marketing and Other were $144 million, a decrease of $112 million from the prior quarter. The business was impacted by lower global marketing margins compared to the strong margins realized in the previous quarter, which benefited from favorable market conditions. Additionally, decreased earnings were due to lower biodiesel blending tax credits compared to the fourth quarter. First-quarter refined product exports were 86,000 barrels per day (BPD), down 57,000 BPD from the fourth quarter primarily due to turnarounds in the first quarter.

Phillips 66’s Specialties businesses generated earnings of $50 million during the first quarter. The $18 million decrease was primarily related to lower lubricants margins, partially offset by increased volumes.

Corporate and Other

Corporate and Other costs were $125 million after-tax in the first quarter, compared with $100 million in the fourth quarter of 2014. The increased costs were primarily due to lower foreign tax credits and higher interest expense.

Financial Position, Liquidity and Return of Capital

During the quarter, Phillips 66 generated $1.4 billion of cash from operations. Excluding $472 million of working capital changes, operating cash flow was $880 million. Additionally, the company received $1.5 billion from Phillips 66 Partners debt and equity issuances, and repaid $800 million of maturing debt. Capital expenditures and investments totaled $1.1 billion, primarily supporting execution of the Midstream growth strategy.

Phillips 66 returned $671 million to shareholders in the first quarter through dividends and share repurchases. The company paid $272 million in dividends and repurchased 5.6 million shares of common stock for $399 million. Since July 2012, the company has repurchased 79 million shares for $5.3 billion, as part of $7 billion in share repurchase authorizations. In 2014, the company received 17.4 million of its shares in exchange for the stock of its flow improver subsidiary, further reducing shares outstanding. Phillips 66 ended the quarter with 542 million shares outstanding.
As of March 31, 2015, cash and cash equivalents were $5.4 billion and debt was $8.9 billion, including $1.1 billion at Phillips 66 Partners. The company's debt-to-capital ratio was 28 percent. Excluding Phillips 66 Partners, the debt-to-capital ratio was 26 percent. Additionally, Phillips 66 reported a year-to-date annualized return on capital employed (ROCE) of 14 percent, and a year-to-date annualized adjusted ROCE of 12 percent.

Strategic Update

A key element of the Phillips 66 strategy is to deploy capital to our higher-valued businesses. Our diversified portfolio provides opportunities for more stable earnings during periods of volatile commodity prices.

Construction of the Sweeny Fractionator One and the Freeport LPG Export Terminal continued during the quarter. The fractionator is over 70 percent complete, while the LPG Terminal is about one-third complete. Both projects are on schedule and on budget with startup expected in the second half of 2015 and 2016, respectively.

The company is also engaged in two joint ventures to develop the Dakota Access Pipeline (DAPL) and Energy Transfer Crude Oil Pipeline (ETCOP). DAPL is expected to deliver up to 450,000 BPD of crude oil from the Bakken/Three Forks production area in North Dakota to market centers in the Midwest. ETCOP will provide crude oil transportation service from the Midwest to the Gulf Coast, including Phillips 66's Beaumont Terminal. The DAPL and ETCOP projects are expected to begin commercial operations in the fourth quarter of 2016.

During the quarter, the company completed the dropdown of its one-third interest in the DCP Sand Hills Pipeline, LLC and DCP Southern Hills Pipeline, LLC, NGL pipeline systems and a 19.46 percent equity interest in the Explorer refined products pipeline system to Phillips 66 Partners. These assets provide additional fee-based revenues to the Phillips 66 Partners portfolio.

DCP Midstream continues to be an important part of the Phillips 66 NGL value chain. As one of the nation's largest natural gas gatherers and processors, over 10 percent of domestic natural gas flows through DCP Midstream assets. In response to lower NGL prices, DCP Midstream's management implemented steps to reduce corporate costs by 20 percent and its 2015 capital budget from $1.8 billion to $800 million.

In Chemicals, CPChem's 220 million-pound-per-year normal alpha olefins expansion project at its Cedar Bayou facility is on schedule for completion in mid-2015. Additionally, construction of CPChem's world-scale U.S. Gulf Coast Petrochemicals Project is approximately 40 percent complete and startup is expected in mid-2017. This $6 billion project consists of an ethane cracker and related polyethylene facilities that will increase CPChem's U.S. olefins and polyolefins capacity by approximately one-third.

Phillips 66 continues to optimize its refining portfolio. During the first quarter, the sale of the Bantry Bay Terminal in Cork, Ireland, was completed. This follows the disposition of the company's interest in the Melaka Refinery in Malaysia, at the end of last year.

Later today, members of Phillips 66 executive management will host a webcast at 1 p.m. EDT to discuss the company’s first-quarter performance and provide an update on strategic growth projects. To listen to the conference call and view related presentation materials, go to www.phillips66.com/investors and click on "Events & Presentations." For detailed supplemental information, go to www.phillips66.com/supplemental.
About Phillips 66

Phillips 66 is a diversified energy manufacturing and logistics company. With a portfolio of Midstream, Chemicals, Refining, and Marketing and Specialties businesses, the company processes, transports, stores and markets fuels and products globally. Phillips 66 Partners, the company's master limited partnership, is an integral asset in the portfolio. Headquartered in Houston, the company has 14,000 employees committed to safety and operating excellence. Phillips 66 had $49 billion of assets as of March 31, 2015. For more information, visit www.phillips66.com or follow us on Twitter @Phillips66Co.

http://www.businesswire.com/news/home/20150430005288/en/Phillips-66-Reports-First-Quarter-Earnings-987-Million#.VUIg84ktGUk

[Norton1973]

PSX, 50ma crossing 200ma.

[Enterprising Investor]

Phillips 66: I Am Rationally Exuberant (2/27/15)

http://seekingalpha.com/article/2958956-phillips-66-i-am-rationally-exuberant

[Enterprising Investor]

Phillips 66 Reports Fourth-Quarter Earnings of $1.1 Billion or $2.05 Per Share (1/29/15)

Adjusted earnings of $913 million or $1.63 per share

Highlights

Fourth Quarter

• Advanced Midstream growth plans with formation of transportation joint ventures

• Port Arthur ethylene plant resumed operations

• Solid operating performance enabled 89 percent market capture in Refining

• Strong earnings contribution from Marketing and Specialties

Full-Year 2014

• Record Chemicals earnings

• Earnings of $4.8 billion; adjusted earnings of $3.8 billion

• Return on capital employed (ROCE) of 17 percent, and adjusted ROCE of 14 percent

• Returned $4.7 billion of capital to shareholders

HOUSTON--(BUSINESS WIRE)--Phillips 66 (NYSE: PSX), an energy manufacturing and logistics company, announces fourth-quarter earnings of $1.1 billion, compared with earnings of $1.2 billion in the third quarter of 2014. Adjusted earnings, excluding special items of $234 million, were $913 million in the fourth quarter, compared with adjusted earnings of $1.1 billion in the third quarter of 2014.

Our solid fourth quarter was the result of our diversified asset portfolio and operational excellence, even as commodity prices declined," said Greg Garland, chairman and CEO of Phillips 66. "During the quarter, we generated more than $1 billion in cash flow and returned over $800 million of capital to shareholders, while continuing to fund value-enhancing growth projects."

"We are making prudent capital allocation decisions to drive Phillips 66's continued success, and the recently announced 2015 capital budget underscores our commitment to value creation. Investments in Midstream and Chemicals should result in more consistent earnings and a higher valuation. Our strong balance sheet and financial flexibility allow us to maintain a disciplined approach to reinvestment and distributions throughout the commodity price cycle," said Garland.

Midstream

[tables deleted]

Midstream adjusted earnings were $97 million in the fourth quarter, compared with earnings of $115 million in the third quarter of 2014.

Phillips 66’s Transportation business generated earnings of $53 million during the fourth quarter. The $5 million decrease was primarily due to the write-off of a deferred tax asset, partially offset by improved throughput volumes in the fourth quarter. Phillips 66 Partners LP contributed $26 million to Transportation's fourth-quarter earnings, an increase of $4 million mainly due to increased throughput volumes and new fees from the recently acquired Bayway and Ferndale rail racks.

During the fourth quarter, the company’s equity investment in DCP Midstream, LLC had an adjusted loss of $11 million. The $42 million decrease was largely driven by a decline in natural gas liquids and crude prices.

Earnings from the NGL business were $55 million during the quarter. The $29 million increase was related to improved margins on seasonal propane and butane storage activities, partially offset by Midstream project development costs.

Chemicals

[tables deleted]

The Chemicals segment reflects Phillips 66's equity investment in Chevron Phillips Chemical Company LLC (CPChem). Fourth-quarter Chemicals adjusted earnings were $270 million, compared with $299 million in the third quarter of 2014.

During the fourth quarter, CPChem's O&P business contributed $248 million to Phillips 66's Chemicals adjusted earnings, a decrease of $11 million from the prior quarter. Domestic O&P chain margins were in line with the third quarter, despite the lower commodity price environment. The decrease in adjusted earnings was mainly due to higher planned maintenance costs, as the operational impacts related to CPChem's Port Arthur ethylene plant outage were offset by business interruption insurance recoveries. CPChem's Port Arthur plant resumed normal operations in November. O&P's global utilization for the quarter and year was 83 percent and 88 percent, respectively.

CPChem's SA&S business contributed $27 million to fourth-quarter adjusted earnings. The $19 million decrease was primarily due to lower realized margins and volumes from CPChem's Middle East joint ventures.

Refining

[tables deleted]

Refining recorded fourth-quarter adjusted earnings of $322 million, excluding the impacts of an asset sale and impairments. The $236 million decrease was driven by lower realized margins, partially offset by improved volumes. Margins were lower due to weaker gasoline crack spreads and narrowing crude differentials, partially offset by improved secondary product margins and higher distillate crack spreads.

During the quarter, 95 percent of the company’s U.S. crude slate was advantaged, in line with the third quarter of 2014. Refining processed a record 375,000 barrels per day (BPD) of tight oil, 39,000 BPD more than the previous high. Phillips 66’s refining utilization and clean product yield were 95 percent and 84 percent, respectively, in the fourth quarter of 2014.

Marketing and Specialties

[tables deleted]

Fourth-quarter adjusted earnings for M&S were $324 million, compared with $259 million in the third quarter of 2014.

Marketing and Other adjusted earnings were $256 million in the fourth quarter, an increase of $40 million from the prior quarter. While the increase was mostly related to the reinstatement of biodiesel blending tax credits, the business continued to benefit from strong margins. Fourth-quarter refined product exports were 143,000 BPD, an increase of 14,000 BPD from the third quarter of 2014.

Phillips 66’s Specialties businesses reported earnings of $68 million during the fourth quarter. The $25 million increase was primarily due to improved lubricant and base oil margins.

Corporate and Other

Corporate and Other costs were $100 million after-tax in the fourth quarter, compared with $91 million in the third quarter of 2014. The increased costs were mostly due to higher interest expense related to debt issued during the quarter.

Financial Position, Liquidity and Return of Capital

During the quarter, Phillips 66 generated $872 million of cash from operations. Excluding working capital changes, operating cash flow was $1.1 billion. The company received $581 million in proceeds from asset dispositions and funded $1.1 billion in capital expenditures and investments.

Phillips 66 issued $2.5 billion of notes to support growth initiatives and repay debt maturing in 2015. The company returned $807 million of capital to shareholders, paying dividends of $275 million and repurchasing seven million shares of common stock totaling $532 million.

Full-Year Financial Results

Phillips 66's full-year 2014 earnings were $4.8 billion or $8.33 per share. This compares with $3.7 billion or $6.02 per share in 2013. Full-year adjusted earnings were $3.8 billion or $6.62 per share in 2014, compared with $3.6 billion or $5.89 per share in 2013.

The company generated $3.5 billion in cash from operations during 2014. Excluding changes in working capital, operating cash flow was $4.5 billion. In addition, the company received $1.2 billion in proceeds from asset dispositions, primarily reflecting the sale of the company's interest in the Malaysian Refining Company and a special distribution from WRB Refining. Phillips 66 funded $3.8 billion in capital expenditures and investments.

Phillips 66 returned $4.7 billion of capital to shareholders in 2014. The company paid $1.1 billion in dividends and repurchased 29.1 million shares of common stock totaling $2.3 billion. The exchange of the company's flow improver business for 17.4 million shares returned $1.35 billion of capital. Since August 2012, the company has repurchased 73.2 million shares for $4.9 billion, as part of $7 billion in share repurchase authorizations. At the end of 2014, Phillips 66 had 546 million shares outstanding.

Phillips 66 ended the year with $8.7 billion of debt and $5.2 billion of cash and cash equivalents. The company’s debt-to-capital ratio was 28 percent and net-debt-to-capital ratio was 14 percent.

Strategic Update

In Midstream, the 100,000 BPD Sweeny Fractionator One is more than 50 percent complete, with startup planned in the second half of 2015. Construction is also progressing on the 4.4 million-barrel-per-month Freeport LPG Export Terminal, with completion expected in the second half of 2016. Both projects remain on budget and on schedule.

Phillips 66 is investing in transportation infrastructure to move crude oil from the Bakken/Three Forks production area of North Dakota to market centers throughout the United States. During 2014, the company received 1,200 additional rail cars and expects to have 3,700 cars dedicated to crude oil service in early 2015. The company also announced two pipeline joint ventures, the Dakota Access Pipeline and Energy Transfer Crude Oil Pipeline.

In addition, Phillips 66 Partners formed two joint ventures to develop the Palermo Rail Terminal and the Sacagawea Pipeline in North Dakota. The Palermo Rail Terminal is a crude oil rail-loading facility currently under construction. The terminal is anticipated to include a pipeline connection to the Sacagawea Pipeline, allowing increased outbound capacity and market access for oil producers and marketers in the Bakken region.

In Chemicals, CPChem is investing in domestic growth projects to capture the benefits of low-cost petrochemical feedstocks on the U.S. Gulf Coast (USGC). During the quarter, CPChem completed the expansion of ethylene production at its Sweeny facility with the addition of a tenth furnace, which is expected to increase its annual production by 200 million pounds. An expansion project is underway to increase CPChem's normal alpha olefin capacity by 220 million pounds per year at its Cedar Bayou facility, with estimated completion in mid-2015. Lastly, construction continued on its world-scale USGC Petrochemicals Project with startup anticipated in mid-2017.

Later today, Phillips 66 Chairman and Chief Executive Officer Greg Garland, President Tim Taylor, and Executive Vice President and Chief Financial Officer Greg Maxwell will host a webcast at 11 a.m. EST to discuss the company’s fourth-quarter and full-year performance and provide an update on strategic growth projects. To listen to the conference call and view related presentation materials, go to www.phillips66.com/investors and click on "Events & Presentations." For detailed supplemental information, go to www.phillips66.com/supplemental.

[tables deleted]

About Phillips 66

Phillips 66 is a diversified energy manufacturing and logistics company. With a portfolio of Midstream, Chemicals, Refining, and Marketing and Specialties businesses, the company processes, transports, stores and markets fuels and products globally. Phillips 66 Partners, the company's master limited partnership, is an integral asset in the portfolio. Headquartered in Houston, the company has 14,000 employees committed to safety and operating excellence. Phillips 66 had $49 billion in assets as of Dec. 31, 2014. For more information, visit www.phillips66.com or follow us on Twitter @Phillips66Co.

http://www.businesswire.com/news/home/20150129005240/en/Phillips-66-Reports-Fourth-Quarter-Earnings-1.1-Billion#.VMo42IktGUk

[Enterprising Investor]

Phillips files for permit to build condensate splitter in Sweeny, TX (12/08/14)

Dec 8 (Reuters) - Phillips 66 is seeking a permit to build a condensate splitter at the company's 247,000 barrels-per-day (bpd) refinery in Sweeny, Texas as as the company mulls the export of condensate, a super-light form of crude oil without violating a decades-old U.S. crude export ban.

The permit application filed earlier this month with the Texas Commission on Environmental Quality identifies the project as a "simplified condensate splitter unit" and is a step in the company's ongoing study of the project.

The splitter, as well as an Eagle Ford crude and condensate pipeline and a second 110,000 bpd fractionator at the refinery site "are currently in the engineering design and permitting phase," spokesman Dennis Nuss said on Monday.

Phillips 66 executives have said the company is evaluating the export of condensate, a super-light form of crude oil.

Phillips 66 is building a liquefied petroleum gas export facility in Freeport, Texas, which is near the Sweeny refinery complex where a 100,000 bpd fractionation plant also is under construction.

The 200,000 bpd pipeline, as proposed, would stretch from the condensate-heavy Eagle Ford shale in South Texas to the company's Freeport terminal, and could be expanded to 400,000 bpd. The company says it will make final decisions on those projects next year.

"A decision on condensate processing will also be made in 2015," Nuss said.

The new pipeline would be in addition to a 100,000 bpd lateral line that connects Kinder Morgan Inc's 300,000 bpd Eagle Ford-to-Houston crude and condensate pipeline to the Sweeny refinery.

A splitter breaks up condensate into various components, such as naphtha, a building block for gasoline, and diesel and jet fuel.

At least three companies have received U.S. government approvals to export condensate that has undergone less sophisticated processing than that provided by a splitter.

Rather, running condensate through a stabilizer that removes natural gas liquids and contaminants was deemed enough to qualify the output as a refined product that could be exported without violating the decades-old crude export ban.

Even so, several other splitter projects are under construction or planned along the Texas Gulf Coast. Kinder Morgan aims to start up the first of two 50,000 bpd splitters in January, and Magellan Midstream Partners and Targa Resources Partners LP also have projects in the works. (Reporting by Kristen Hays; Editing by Terry Wade and Marguerita Choy)

http://www.reuters.com/article/2014/12/08/phillips66-condensate-splitter-idUSL1N0TS24420141208

[Enterprising Investor]

Phillips 66 Announces 2015 Capital Program (12/05/14)

HOUSTON--(BUSINESS WIRE)--Phillips 66 (NYSE: PSX) announces its 2015 capital budget of $4.6 billion. These investments are intended to support midstream business growth, including that of the company’s master limited partnership, Phillips 66 Partners LP, as well as ensure ongoing operating excellence. Including the company’s portion of capital spending by joint ventures DCP Midstream (DCP), Chevron Phillips Chemical Company (CPChem) and WRB Refining, all of which are expected to be self-funded, the company’s total 2015 capital program is expected to be $6.8 billion.

“The 2015 capital program reflects our commitment to grow our higher-value businesses while enhancing returns in Refining,” said chairman and CEO Greg Garland. “We are executing a portfolio of major Midstream and Chemicals projects while evaluating a significant backlog of investment opportunities.

“We remain committed to returning capital to shareholders through dividend growth and our share repurchase program. During the year we increased our dividend 28 percent, and through Sept. 30, 2014, we returned $3.9 billion of capital to shareholders through dividends, share repurchases and the PSPI exchange. We expect double-digit increases in dividends for the next two years, and $2.6 billion remained available at the end of the third quarter under our share repurchase authorization.

“Our capital structure and financial flexibility allow us to fund shareholder distributions while investing in the growth of our businesses, even in this lower commodity price environment. Sources of capital include our strong balance sheet, debt and equity issuances by our MLP, and operating cash flows from a high-returning portfolio of businesses,” said Garland.

In Midstream, excluding DCP, Phillips 66 plans to invest $3.2 billion in its Natural Gas Liquids (NGL) and Transportation business lines. Midstream capital includes approximately $200 million expected to be spent by Phillips 66 Partners to support organic growth projects. In NGL, the company continues construction of the 100,000 barrel-per-day Sweeny Fractionator One and the 4.4 million-barrel-per-month Freeport LPG Export Terminal on the U.S. Gulf Coast. In Transportation, the company is investing in pipeline and rail infrastructure projects to move crude oil from the Bakken/Three Forks production area of North Dakota to market centers throughout the U.S. In addition, expansion of the Beaumont Terminal and related infrastructure opportunities are being pursued.

Additional Midstream investments are planned within DCP, a 50-50 joint venture with Spectra Energy that also includes DCP Midstream Partners. DCP will leverage its infrastructure to launch new gathering, processing, and NGL growth projects, mainly in the Niobrara, Denver-Julesburg, Eagle Ford and Permian basins. DCP also expects to increase natural gas processing capacity in these basins and complete other gathering system expansions during 2015. Phillips 66’s share of DCP’s 2015 planned capital expenditures is $550 million.

In Chemicals, CPChem, a 50-50 joint venture with Chevron, is investing in projects aimed at capturing cost-advantaged petrochemical feedstocks on the U.S. Gulf Coast. Phillips 66’s share of CPChem’s 2015 capital expenditures is expected to be $1.4 billion. Funding supports advancement of CPChem’s 3.3 billion-pound-per-year ethane cracker and two 1.1 billion-pound-per-year polyethylene facilities. The expected start-up for these facilities is mid-2017. In addition, the 220 million-pound-per-year expansion of CPChem’s normal alpha olefins production capacity at Cedar Bayou continues, with estimated completion in mid-2015.

Phillips 66 plans $1.1 billion of capital expenditures in Refining, approximately 75 percent of which will be sustaining capital. These investments are related to reliability and maintenance, safety and environmental projects, including compliance with the new EPA Tier 3 gasoline specifications. Discretionary Refining capital investments will be directed toward small, high-return, quick pay-out projects, primarily to enhance use of advantaged crudes and improve product yields.

In Marketing and Specialties, the company plans to invest $170 million for growth and sustaining capital. The growth investment reflects Phillips 66’s continued plans to expand and enhance its fuel marketing business.

In Corporate and Other, Phillips 66 plans to fund $155 million in projects primarily related to information technology and facilities.

“Our plans for significant growth in enterprise value are supported by our 2015 capital budget and our commitment to a 60/40 ratio of reinvestment to distributions. Disciplined capital allocation and operating excellence remain our top priorities,” concluded Garland.

[tables removed]

About Phillips 66

Built on more than 130 years of experience, Phillips 66 is a growing energy manufacturing and logistics company with high-performing Midstream, Chemicals, Refining, and Marketing and Specialties businesses. This integrated portfolio enables Phillips 66 to capture opportunities in the changing energy landscape. Headquartered in Houston, the company has 14,000 employees who are committed to operating excellence and safety. Phillips 66 had $50 billion of assets as of Sept. 30, 2014. For more information, visit www.phillips66.com or follow us on Twitter @Phillips66Co.

http://www.businesswire.com/news/home/20141205005605/en/Phillips-66-Announces-2015-Capital-Program#.VIdPJYl0yUk

[JefferyScott]

no kidding, nice recovery today!

[kugel]

wow active board..

[Enterprising Investor]

Phillips 66 Reports Third-Quarter Earnings of $1.2 Billion or $2.09 Per Share (10/29/14)

Adjusted earnings of $1.1 billion or $2.02 per share

Highlights

• Strong earnings driven by improved refining and marketing margins

• Record advantaged crude runs

• Chemicals impacted by unplanned downtime

• Announced Dakota Access Pipeline and Energy Transfer Crude Oil Pipeline joint ventures

• Returned $771 million of capital to shareholders through dividends and share repurchases

HOUSTON--(BUSINESS WIRE)--Phillips 66 (NYSE: PSX), an energy manufacturing and logistics company, announces third-quarter earnings of $1.2 billion, compared with earnings of $863 million during the second quarter of 2014. Adjusted earnings were $1.1 billion, an increase of $277 million from the second quarter of 2014.

"Our operations ran well during the third quarter, capturing strong margins in our refining and marketing businesses," said Greg Garland, chairman and CEO of Phillips 66. "Chemicals earnings were also strong despite the impact of unplanned downtime."

"We recently announced the Dakota Access Pipeline and Energy Transfer Crude Oil Pipeline projects, which provide integration opportunities with our Beaumont Terminal. We are executing our Midstream growth strategy with increasing momentum," said Garland.

Midstream

Midstream earnings were $115 million in the third quarter, compared with earnings of $108 million in the second quarter of 2014.

Phillips 66’s Transportation business generated earnings of $58 million during the third quarter, in line with earnings of $60 million in the second quarter of 2014. Third-quarter earnings related to the company’s equity investment in DCP Midstream, LLC were $31 million, comparable with $33 million in the second quarter of 2014.

Earnings from the NGL business were $26 million in the third quarter, compared with $15 million in the second quarter of 2014. The increase was primarily related to improved margins and higher equity earnings from the ramp up of throughput volumes on the Sand Hills and Southern Hills pipelines.

Chemicals

The Chemicals segment reflects Phillips 66's equity investment in Chevron Phillips Chemical Company LLC (CPChem). Third-quarter Chemicals earnings were $230 million and adjusted earnings were $299 million. This compares with earnings of $324 million in the second quarter of 2014.

During the third quarter, CPChem's Olefins and Polyolefins (O&P) business contributed $254 million to Phillips 66's Chemicals earnings. O&P's adjusted earnings contribution was $259 million, compared with $310 million in the second quarter of 2014. The decrease was mainly due to an ethylene outage at CPChem's Port Arthur plant from a localized fire in July. Global utilization for O&P was 83 percent during the quarter.

CPChem's Specialties, Aromatics and Styrenics (SA&S) business contributed a loss of $18 million to third-quarter earnings, including asset impairments of $64 million. SA&S's adjusted earnings contribution was $46 million during the third quarter, an increase of $25 million from the second quarter of 2014, primarily driven by lower turnaround activity.

Refining

Refining recorded earnings of $558 million in the third quarter, compared with earnings of $390 million in the second quarter of 2014. The increase was primarily attributable to improved realized refining margins, which included capturing crude location differentials. Margins improved, despite lower worldwide market crack spreads, primarily due to higher clean product realizations. Additionally, secondary product margins benefited from lower crude oil prices.

During the quarter, a record 95 percent of the company's U.S. crude slate was advantaged, compared with 93 percent in the second quarter. Worldwide, Phillips 66’s refining utilization and clean product yield were 94 percent and 84 percent, respectively, in the third quarter of 2014.

Marketing and Specialties

Marketing and Specialties (M&S) third-quarter earnings were $368 million and adjusted earnings were $259 million. This compares with earnings of $162 million during the second quarter of 2014.

Earnings from Marketing and Other were $325 million in the third quarter, which included the expected partial recognition of the deferred gain from the sale of a power plant in July 2013. Adjusted earnings were $216 million, an increase of $97 million compared with earnings in the second quarter of 2014. The business benefited from higher global marketing margins, primarily due to the steady decline of product costs associated with falling crude oil prices during the quarter. Third-quarter refined product exports were 129,000 barrels per day (BPD), a reduction from 181,000 BPD in the second quarter of 2014, reflecting more favorable placement in the domestic market.

Phillips 66’s Specialties businesses generated earnings of $43 million during the third quarter, in line with second-quarter 2014 earnings.

Corporate and Other

Corporate and Other costs were $91 million after-tax in the third quarter, compared with $121 million in the second quarter of 2014. The decreased costs were mostly due to effective tax rate changes, as well as timing of contributions and environmental expenses.

The company's effective tax rate was 31 percent and its adjusted effective tax rate was 33 percent for the third quarter, compared with 36 percent in the second quarter of 2014.

Financial Position, Liquidity and Return of Capital

During the quarter, Phillips 66 generated $429 million of cash from operations. Excluding $828 million of working capital changes, operating cash flow was $1.3 billion. Working capital changes mainly reflect the impact of temporary inventory builds during the quarter. The company funded $1.5 billion in capital expenditures and investments, primarily reflecting growth in its Midstream segment.

Consistent with the company's commitment to return capital to shareholders, Phillips 66 returned $771 million in the third quarter through dividends and share repurchases. The company paid $277 million in dividends and repurchased six million shares of common stock for $494 million. Since August 2012, the company has repurchased 66 million shares for $4.4 billion, as part of $7 billion in share repurchase authorizations. In addition, the company received 17.4 million shares in exchange for its flow improver business earlier this year. Phillips 66 ended the quarter with 554 million shares outstanding.

As of Sept. 30, 2014, cash and cash equivalents were $3.1 billion and debt was $6.2 billion. The company's debt-to-capital ratio was 22 percent. Additionally, Phillips 66 reported a year-to-date annualized return on capital employed (ROCE) of 18 percent, and a year-to-date annualized adjusted ROCE of 14 percent.

Strategic Update

Phillips 66 is continuing to grow its more highly valued businesses, while enhancing refining returns. The company's Midstream segment is pursuing multiple growth opportunities to further integrate its portfolio and benefit from increasing production in North America.

Phillips 66 recently announced its participation in two joint ventures to develop the Dakota Access Pipeline (DAPL) and Energy Transfer Crude Oil Pipeline (ETCOP). Phillips 66 owns 25 percent interests in both projects and its estimated share of construction cost is approximately $1.2 billion. DAPL is expected to deliver 450,000 BPD of crude oil from the Bakken/Three Forks production area in North Dakota to market centers in the Midwest. ETCOP will provide crude oil transportation service from the Midwest to the Gulf Coast, including Phillips 66's Beaumont Terminal. The DAPL and ETCOP projects are expected to begin commercial operations in the fourth quarter of 2016.

In support of its advantaged crude oil strategy, the company ordered an additional 500 rail cars during the quarter and began operations at its 75,000 BPD rail rack at the Bayway Refinery. The 30,000 BPD rail rack at the Ferndale Refinery is expected to begin operations in the fourth quarter of 2014. In addition, Phillips 66 is constructing a rail-loading facility on land recently acquired in North Dakota. The facility is expected to have up to 200,000 BPD of capacity and further expand Phillips 66 and third-party access to Bakken crude oil.

As recently announced, Phillips 66 Partners LP will acquire the new rail-unloading facilities at Bayway and Ferndale, as well as the Cross-Channel Connector Pipeline, from Phillips 66. The $340 million transaction is anticipated to close in early December 2014.

Construction continued on the Sweeny Fractionator One and Freeport LPG Export Terminal, with startup expected in the second half of 2015 and second half of 2016, respectively. The company also plans to develop a second NGL fractionator and a crude and condensate pipeline in Texas to meet growing demand for domestic crude oil and global market demand for U.S.-supplied products. In addition, the company is considering condensate processing options to meet customer demand.

The proposed 110,000 BPD Sweeny Fractionator Two will be located near the company’s Sweeny Refinery and Sweeny Fractionator One. The planned crude and condensate pipeline will connect Eagle Ford production to the Sweeny Refinery and Phillips 66’s terminal in Freeport, Texas. The pipeline, including gathering systems, will have an initial capacity of 200,000 BPD with the capability to expand to over 400,000 BPD.

The pipeline and Sweeny Fractionator Two projects are currently in the engineering design and permitting phase. Final investment decision for both projects is anticipated in mid-2015, with startup planned for late 2016 for the pipeline and 2017 for Sweeny Fractionator Two.

CPChem is investing in domestic growth projects to realize the benefits of low-cost petrochemical feedstocks in the U.S. Gulf Coast (USGC). Construction continued on its world-scale USGC Petrochemicals Project consisting of an ethane cracker and related polyethylene facilities, with startup anticipated in 2017. In addition, the ethylene production expansion project to add a tenth furnace at CPChem's Sweeny facility is expected to start up in the fourth quarter of 2014.

Later today, Phillips 66 Chairman and Chief Executive Officer Greg Garland; President Tim Taylor; and Executive Vice President and Chief Financial Officer Greg Maxwell will host a webcast at 11 a.m. EDT to discuss the company’s third-quarter performance and provide an update on strategic growth projects. To listen to the conference call and view related presentation materials, go to www.phillips66.com/investors and click on "Events & Presentations." For detailed supplemental information, go to www.phillips66.com/supplemental.

[tables deleted]

About Phillips 66

Built on more than 130 years of experience, Phillips 66 is a growing energy manufacturing and logistics company with high-performing Midstream, Chemicals, Refining, and Marketing and Specialties businesses. This integrated portfolio enables Phillips 66 to capture opportunities in the changing energy landscape. Headquartered in Houston, the company has 14,000 employees who are committed to operating excellence and safety. Phillips 66 had $50 billion of assets as of Sept. 30, 2014. For more information, visit www.phillips66.com or follow us on Twitter @Phillips66Co.

http://www.businesswire.com/news/home/20141029005230/en/Phillips-66-Reports-Third-Quarter-Earnings-1.2-Billion#.VFLzlol0yUk

[Enterprising Investor]

Phillips 66 Becomes Joint Venture Partner with Energy Transfer to Build Bakken Crude Oil Pipelines (10/28/14)

DALLAS & HOUSTON--(BUSINESS WIRE)--Energy Transfer Equity, L.P. (NYSE:ETE), Energy Transfer Partners, L.P. (NYSE:ETP) (ETE and ETP collectively, “Energy Transfer”) and Phillips 66 (NYSE:PSX) announced that they have formed two joint ventures to develop the previously announced Dakota Access Pipeline (DAPL) and Energy Transfer Crude Oil Pipeline (ETCOP) projects. Energy Transfer holds a 75 percent interest in each joint venture and will operate both pipeline systems. Phillips 66 owns the remaining 25 percent interests and will fund its proportionate share of the construction costs. The DAPL and ETCOP projects are expected to begin commercial operations in the fourth quarter of 2016.

We look forward to working with Phillips 66 to build this much-needed pipeline infrastructure to link rapidly growing supplies of domestically produced light crude oil in the Bakken/Three Forks play to refineries throughout the country,” said Kelcy Warren, chairman of ETE and chairman and CEO of ETP.

“Energy Transfer is a valued partner with a proven track record of developing major interstate pipelines,” said Greg Garland, chairman and CEO of Phillips 66. “These joint-venture projects will allow Phillips 66 to increase its access to advantaged North American crude oil and add to the momentum we are building in our Midstream business.”

Based on contractual commitments to date, DAPL is expected to deliver in excess of 450,000 barrels per day of crude oil from the Bakken/Three Forks production area in North Dakota to market centers in the Midwest. DAPL will provide shippers with access to Midwestern refineries, unit-train rail loading facilities to facilitate deliveries to East Coast refineries, and the Gulf Coast market through an interconnection in Patoka, Illinois, with ETCOP. ETCOP will provide crude oil transportation service from the Midwest to the Sunoco Logistics Partners and Phillips 66 storage terminals located in Nederland, Texas.

In September, Energy Transfer announced the launch of a binding Expansion Open Season to assess additional interest in transportation service on DAPL and ETCOP above those levels previously announced. Subject to the terms and conditions of the Expansion Open Season, potential shippers will also have the opportunity to secure expansion transportation service from the Bakken/Three Forks production area to the Midwest and Gulf Coast, as well as to the Cushing hub in Oklahoma. More information about the binding Expansion Open Season is available on the ETP web site by accessing www.energytransfer.com/ops_copp.aspx, or via e-mail at [e-mail].

About Energy Transfer Partners

Energy Transfer Partners, L.P. (NYSE: ETP) is a master limited partnership owning and operating one of the largest and most diversified portfolios of energy assets in the United States. ETP currently owns and operates approximately 35,000 miles of natural gas and natural gas liquids pipelines. ETP also owns 100% of Panhandle Eastern Pipe Line Company, LP (the successor of Southern Union Company) and a 70% interest in Lone Star NGL LLC, a joint venture that owns and operates natural gas liquids storage, fractionation and transportation assets. ETP also owns the general partner, 100% of the incentive distribution rights, and approximately 67.1 million common units in Sunoco Logistics Partners L.P. (NYSE: SXL), which operates a geographically diverse portfolio of crude oil and refined products pipelines, terminalling and crude oil acquisition and marketing assets. ETP owns 100% of Sunoco, Inc. and 100% of Susser Holdings Corporation. Additionally ETP owns the general partner, 100% of the incentive distribution rights and approximately 44% of the limited partnership interests in Sunoco LP (formerly Susser Petroleum Partners LP) (NYSE: SUN), a wholesale fuel distributor. ETP’s general partner is owned by ETE. For more information, visit the Energy Transfer Partners, L.P. web site at www.energytransfer.com.

About Energy Transfer Equity

Energy Transfer Equity, L.P. (NYSE:ETE) is a master limited partnership which owns the general partner and 100% of the incentive distribution rights (IDRs) of Energy Transfer Partners, L.P. (NYSE: ETP), approximately 30.8 million ETP common units, and approximately 50.2 million ETP Class H Units, which track 50% of the underlying economics of the general partner interest and IDRs of Sunoco Logistics Partners L.P. (NYSE: SXL). ETE also owns the general partner and 100% of the IDRs of Regency Energy Partners LP (NYSE: RGP) and approximately 57.2 million RGP common units. On a consolidated basis, ETE’s family of companies owns and operates approximately 71,000 miles of natural gas, natural gas liquids, refined products, and crude oil pipelines. For more information, visit the Energy Transfer Equity, L.P. web site at www.energytransfer.com.

About Phillips 66

Built on more than 130 years of experience, Phillips 66 is a growing energy manufacturing and logistics company with high-performing Midstream, Chemicals, Refining, and Marketing and Specialties businesses. This integrated portfolio enables Phillips 66 to capture opportunities in a changing energy landscape. Headquartered in Houston, the company has 13,500 employees who are committed to operating excellence and safety. Phillips 66 had $51 billion of assets as of June 30, 2014. For more information, visit www.phillips66.com or follow us on Twitter @Phillips66Co.

http://www.businesswire.com/news/home/20141028005255/en/Phillips-66-Joint-Venture-Partner-Energy-Transfer#.VFLzD4l0yUk

[Enterprising Investor]

Phillips 66 Reports Second-Quarter Earnings of $863 Million or $1.51 Per Share (7/30/14)

Highlights

• Chemicals achieved record earnings

• Refining earnings improved despite lower market capture

• Midstream impacted by weaker propane demand

• Second quarter dividend increased 28 percent

HOUSTON--(BUSINESS WIRE)-- Phillips 66 (NYSE: PSX), an energy manufacturing and logistics company, announced second-quarter earnings of $863 million, compared with first quarter of 2014 earnings of $1,572 million and adjusted earnings of $866 million.

"We ran well during the quarter," said Greg Garland, chairman and CEO of Phillips 66. "Chemicals earnings were driven by strong olefin and polyolefin chain margins. Refining benefited from higher utilization; however, our market capture rate declined."

"We continued our disciplined approach to capital allocation. We increased our dividend in the second quarter and the board recently approved an additional $2 billion share repurchase program. In July, we increased our 2014 capital budget to fund acquisitions in our Midstream and Specialties businesses, and to support organic growth projects," said Garland.

Midstream

Midstream earnings were $108 million in the second quarter, compared with earnings of $188 million in the first quarter of 2014.

Phillips 66’s Transportation business generated earnings of $60 million during the second quarter, compared with earnings of $62 million in the first quarter of 2014. The decrease was primarily due to increased maintenance activity, partially offset by improved volume throughput.

Second-quarter earnings related to the company’s equity investment in DCP Midstream, LLC were $33 million, compared with $83 million in the first quarter of 2014. The decrease reflects lower gains recorded by Phillips 66 on unit issuances of DCP Midstream Partners, LP (DCP Partners). Additionally, earnings were impacted by increased maintenance activity and lower NGL prices, partially offset by improved volumes.

Earnings from the NGL business were $15 million in the second quarter, compared with $43 million in the first quarter of 2014. The decrease was primarily related to the effects of warmer weather on propane prices and demand.

Chemicals

The Chemicals segment reflects Phillips 66's equity investment in Chevron Phillips Chemical Company LLC (CPChem). Second-quarter Chemicals earnings were $324 million, an increase of $8 million from the first quarter of 2014.

During the second quarter, CPChem's Olefins and Polyolefins (O&P) business contributed $310 million to Phillips 66's Chemicals earnings, compared with $283 million in the first quarter of 2014. The increase was primarily due to improved realized O&P chain margins, partially offset by higher maintenance costs. Global utilization for O&P was 95 percent during the quarter.

CPChem's Specialties, Aromatics and Styrenics (SA&S) business contributed $21 million of earnings during the second quarter, $17 million lower than the first quarter of 2014. The decrease was mainly driven by lower equity earnings and increased operating costs. Equity earnings were impacted by planned turnaround activity during the second quarter.

Refining

Refining recorded second quarter earnings of $390 million, compared with earnings of $306 million during the first quarter of 2014. The increase was primarily attributable to higher volumes, partially offset by weaker realized refining margins. Volumes improved during the second quarter following the completion of planned turnaround and maintenance activities.

Although worldwide market crack spreads increased, realized refining margins decreased. The decrease reflects the company's refinery configuration producing more distillate than the 3:2:1 marker implies, coupled with weaker distillate cracks. Additionally, realized margins were also impacted by reduced seasonal gasoline blending activity, lower secondary product realizations and tightening crude differentials.

During the quarter, 93 percent of the company's U.S. crude slate was advantaged, compared with 91 percent in the first quarter. This increase was largely due to higher crude capacity utilization as a result of less turnaround activity, as well as running more advantaged crudes in place of Brent-based crudes.

Worldwide, Phillips 66’s refining utilization was 96 percent and clean product yield was 83 percent in the second quarter of 2014.

Marketing and Specialties

Second-quarter earnings for Marketing and Specialties (M&S) were $162 million, compared with earnings of $137 million during the first quarter of 2014.

Earnings from Marketing and Other were $119 million in the second quarter, compared with earnings of $93 million in the first quarter of 2014. The $26 million improvement primarily reflects higher volumes due to seasonal demand and increased exports. Refined product exports totaled 181,000 barrels per day in the second quarter, compared with 139,000 barrels per day in the first quarter of 2014.

Phillips 66’s Specialties businesses generated earnings of $43 million during the second quarter, compared with earnings of $44 million during the first quarter of 2014.

Corporate and Other

Corporate and Other costs were $121 million after-tax in the second quarter, compared with $81 million in the first quarter of 2014. The increased costs were mostly due to effective tax rate changes and environmental expenses.

The company's effective tax rate during the second quarter was 36 percent, compared with 33 percent in the first quarter of 2014.

Financial Position, Liquidity and Return of Capital

During the quarter, Phillips 66 generated $830 million of cash from operations. Excluding changes in working capital, operating cash flow was $937 million. Proceeds from asset dispositions were $150 million, primarily reflecting distributions that are considered a return of investment from equity affiliates.

The company funded $561 million in capital expenditures and investments, and returned $897 million of capital to shareholders. Phillips 66 paid $281 million in dividends and repurchased 7.5 million shares of common stock for $616 million.

As of June 30, 2014, cash and cash equivalents were $5.0 billion and debt was $6.2 billion. The company's debt-to-capital ratio was 22 percent. Additionally, Phillips 66 reported an annualized year-to-date return on capital employed (ROCE) of 18 percent, and an annualized year-to-date adjusted ROCE of 13 percent.

Strategic Initiatives

Phillips 66 continues to grow its higher-valued businesses, while enhancing refining returns and increasing shareholder distributions. The company paid a second quarter dividend of 50 cents per share of Phillips 66 common stock, representing an increase of 28 percent from the first quarter of 2014. In July, the board approved $2.0 billion of additional share repurchases for total authorizations of $7.0 billion since 2012. Through the second quarter of 2014, the company has repurchased 60.0 million shares. In addition, the company received 17.4 million shares in exchange for its flow improver business earlier this year. Phillips 66 ended the quarter with 559 million shares outstanding.

In July, the board authorized an increase of $1.2 billion in the 2014 capital program to $3.9 billion. The increased capital program will support the recently announced acquisitions of a U.S. Gulf Coast crude oil and refined products terminal and a specialty lubricants company, as well as the construction of the Sweeny Fractionator One and Freeport Liquefied Petroleum Gas Export Terminal.

Phillips 66 agreed in June to purchase a 7.1 million-barrel-storage-capacity terminal near Beaumont, Texas. The Beaumont Terminal is strategically located on the U.S. Gulf Coast, with deep-water access and multiple interconnections to crude oil and refined product pipelines serving 3.6 million barrels per day of refining capacity. The transaction is expected to close in the third quarter of 2014.

Consistent with the company's strategy to selectively grow its Marketing and Specialties segment, Phillips 66 acquired Spectrum Corporation in July. Spectrum is a blender, packager and marketer of specialty lubricants, distributed globally.

DCP Midstream continues to execute its growth plans to support infrastructure demands in rapidly expanding basins. In the Permian Basin, the Zia II plant is anticipated to start up in the first half of 2015. DCP Partners is constructing the Lucerne 2 plant in the Denver-Julesburg Basin and expects to begin operations in mid-2015.

CPChem is investing in domestic growth projects to realize the benefits of low-cost petrochemical feedstocks in the U.S. Gulf Coast. In June, CPChem successfully started up the world's largest on-purpose 1-hexene plant at its Cedar Bayou facility in Baytown, Texas. The 1-hexene unit is capable of producing 550 million pounds per year for use in the manufacturing of polyethylene. Also during the quarter, CPChem achieved final investment decision to expand normal alpha olefins production capacity at Cedar Bayou by 220 million pounds per year.

Phillips 66 remains focused on enhancing refining returns by expanding access to advantaged crude feedstocks and controlling costs. During the second quarter, Refining processed a record 305,000 barrels per day of tight oil, 48,000 barrels more than the previous record.

Later today, Phillips 66 Chairman and Chief Executive Officer Greg Garland; President Tim Taylor; and Executive Vice President and Chief Financial Officer Greg Maxwell will host a webcast at 11 a.m. EDT to discuss the company’s second-quarter performance and provide an update on strategic initiatives. To listen to the conference call and view related presentation materials, go to investor.phillips66.com and click on "Events & Presentations." For detailed supplemental information, go to investor.phillips66.com/investors/financial-information.

http://investor.phillips66.com/investors/news/news-release-details/2014/Phillips-66-Reports-Second-Quarter-Earnings-of-863-Million-or-151-Per-Share/default.aspx

[Timothy Smith]

$PSX The U.S. oil and gas industry has enjoyed spectacular growth in the last decade and, in doing so, has largely outstripped the growth of the peripheral infrastructure required to facilitate its long-term sustainability.

With production unable to continue growing exponentially, there has been a refocusing of attention away from extraction towards the transportation, storage and conversion of oil, gas and its derivatives.

Phillips 66 (NYSE:PSX) has recognized this and moved to invest heavily in the kind of infrastructure projects which will see them benefit hugely from the next stage in the U.S. oil and gas boom.

[Enterprising Investor]

Phillips 66 Board Approves Increased 2014 Capital Program and Additional Share Repurchases (7/09/14)

Decisions consistent with commitment to disciplined capital allocation

HOUSTON, July 9, 2014 – The board of directors of Phillips 66 (NYSE: PSX), an energy manufacturing and logistics company, has approved an increase in 2014 capital spending to support the company’s growth strategy and authorized returning additional capital to shareholders.

The board authorized $3.9 billion of capital expenditures this year, an increase of $1.2 billion to the previously approved budget. The increased capital program is designed to accelerate the development of the Sweeny Fractionator One and Freeport Liquid Petroleum Gas Export Terminal, as well as fund the recently announced acquisitions of the Beaumont Terminal in Texas and Spectrum Corporation, a specialty lubricants company. The board also approved an additional $2 billion share repurchase program.

“We are executing our growth plans through disciplined organic capital spending and by selective acquisitions in our Transportation and Lubricants businesses,” said Greg Garland, chairman and CEO of Phillips 66. "Our financial flexibility enables us to increase investment in higher valued business lines while growing dividends and stock repurchases in order to create differentiated value for our shareholders."

Since the third quarter of 2012, the board has authorized a total of $7 billion in share repurchases. The company’s cumulative share repurchases totaled $3.2 billion through the first quarter of 2014.

The shares will be repurchased from time to time in the open market at the company’s discretion, subject to market conditions and other factors, and in accordance with applicable regulatory requirements. The company may commence, suspend or discontinue purchases of common stock under this authorization at any time or periodically without prior notice. Phillips 66 anticipates funding the repurchases primarily with cash generated by its operations. Shares of stock repurchased will be held as treasury shares.

About Phillips 66
Built on more than 130 years of experience, Phillips 66 is a growing energy manufacturing and logistics company with high-performing Midstream, Chemicals, Refining, and Marketing and Specialties businesses. This integrated portfolio enables Phillips 66 to capture opportunities in a changing energy landscape. Headquartered in Houston, the company has 13,500 employees who are committed to operating excellence and safety. Phillips 66 had $51 billion of assets as of March 31, 2014. For more information, visit www.phillips66.com or follow us on Twitter @Phillips66Co.

http://www.phillips66.com/EN/newsroom/news_releases/2014NewsReleases/Pages/07-09-2014b.aspx

[Enterprising Investor]

Phillips 66 Announces Quarterly Dividend (7/09/14)

HOUSTON, July 9, 2014 – The board of directors of Phillips 66 (NYSE: PSX) has declared a quarterly dividend of 50 cents per share on Phillips 66 common stock. The dividend is payable on Sept. 2, 2014, to shareholders of record at the close of business on Aug. 15, 2014.

About Phillips 66
Built on more than 130 years of experience, Phillips 66 is a growing energy manufacturing and logistics company with high-performing Midstream, Chemicals, Refining, and Marketing and Specialties businesses. This integrated portfolio enables Phillips 66 to capture opportunities in a changing energy landscape. Headquartered in Houston, the company has 13,500 employees who are committed to operating excellence and safety. Phillips 66 had $51 billion of assets as of March 31, 2014. For more information, visit www.phillips66.com or follow us on Twitter @Phillips66Co.

http://www.phillips66.com/EN/newsroom/news_releases/2014NewsReleases/Pages/07-09-2014.aspx

[Cheetah SPEED]

How is psxp about to pass psx in price? Crazy...

[Cheetah SPEED]

Nice. Im in both too. !

[Camcorp1]

PSXP is the Master Limited Partnership (MLP) of PSX. Basically, its a subsidiary of PSX. Forming a MLP is a strategic way of growing a business by selling de-risked assets to your subsidiary & getting extremely great tax breaks.

Perform DD on MLPs and that will provide a clear difference (advantages & disadvantages) of owning each.

Personally - I own both but feel that the MLP will perform better due to the type of assets that are being 'Dropped down' from PSX.

PSXP can't do poorly as long as PSX does well.

Think of PSXP as the 'little brother' that's well protected & taken care of by the 'big brother' but the little brother pay$ (literally) the big brother back handsomely.

With the New North American Oil Boom - Both should do well in the Midstream arena for years to come. The more oil that is found & produced, the more money these two will earn.

These are well run companies with Management that is very 'Wall Street' conscious.

[Cheetah SPEED]

Brutal day here

[Cheetah SPEED]

Im still confused on the difference. It looks like psxp is trying to catch up with psx. I have a small position in psxp , but heavily invested here

[///M3]

I prefer PSX

[Cheetah SPEED]

What do you like more. This or psxp?

[///M3]

Now lets get PSX moon shot

[Cheetah SPEED]

Oil $ to the moon

[///M3]

Yea not great so far

[Cheetah SPEED]

Seems like weve been sinking

[///M3]

Can't argue with that been adding PSX for almost a year now

[Cheetah SPEED]

Im loading all the psx And psxp that i can

[Enterprising Investor]

Phillips 66 Acquires Major Gulf Coast Crude Oil and Refined Products Terminal (6/05/14)

Acquisition provides significant expansion opportunities to serve growing Gulf Coast logistics and storage market

Phillips 66 (NYSE: PSX), an energy manufacturing and logistics company, has agreed to purchase a 7.1 million-barrel storage capacity terminal located near Beaumont, Texas. The Beaumont Terminal will be the largest terminal in the Phillips 66 portfolio.

“This acquisition supports our midstream growth strategy,” said Tim Taylor, president, Phillips 66. “Given our expectations for increasing volumes of North American crude oil movements into the Gulf Coast region and growth in refined product exports, the Beaumont Terminal is well positioned to serve this growing market while providing significant expansion potential.”

The Beaumont Terminal is strategically located on the U.S. Gulf Coast. It provides deep-water access and multiple interconnections with major crude oil and refined product pipelines serving 3.6 million barrels per day of refining capacity. The terminal also has:

4.7 million barrels of crude oil storage capacity and 2.4 million barrels of refined product storage capacity;
Two marine docks capable of handling Aframax tankers and one barge dock; and
Rail and truck loading and unloading facilities.
The Beaumont Terminal is currently owned by UNOCAL, a member of the Chevron Group. The transaction is expected to close in the third quarter of 2014 following the receipt of regulatory approvals. Terms are not being disclosed.

About Phillips 66

Built on more than 130 years of experience, Phillips 66 is a growing energy manufacturing and logistics company with high-performing Midstream, Chemicals, Refining, and Marketing and Specialties businesses. This integrated portfolio enables Phillips 66 to capture opportunities in a changing energy landscape. Headquartered in Houston, the company has 13,500 employees who are committed to operating excellence and safety. Phillips 66 had $51 billion of assets as of March 31, 2014. For more information, visit www.phillips66.com or follow us on Twitter @Phillips66Co.



Phillips 66
Dean Acosta (media), 832-765-1027
[e-mail]
or
Rosy Zuklic (investors), 832-765-2297
[e-mail]

[Cheetah SPEED]

Easy does it. Charts looks perfect

[Enterprising Investor]

PSX closed at $32 on its first day of trading (5/01/12)

A $2.00 annualized dividend now equates to a 6.25 percent yield for a Day One investor.

[Enterprising Investor]

Phillips 66 Announces 28 Percent Increase in Quarterly Dividend (5/07/14)

HOUSTON--(BUSINESS WIRE)--The board of directors of Phillips 66 (NYSE: PSX) has declared a quarterly dividend of 50 cents per share on Phillips 66 common stock, representing an increase of approximately 28 percent from the prior quarter. The dividend is payable on June 2, 2014, to shareholders of record at the close of business on May 19, 2014.

“This latest increase in regular dividends demonstrates our commitment to disciplined capital allocation," said Greg Garland, chairman and CEO of Phillips 66. “We have confidence in our capability to increase distributions to shareholders while significantly growing our Midstream and Chemicals businesses."

About Phillips 66

Built on more than 130 years of experience, Phillips 66 is a growing energy manufacturing and logistics company with high-performing Midstream, Chemicals, Refining, and Marketing and Specialties businesses. This integrated portfolio enables Phillips 66 to capture opportunities in a changing energy landscape. Headquartered in Houston, the company has 13,500 employees who are committed to operating excellence and safety. Phillips 66 had $51 billion of assets as of March 31, 2014. For more information, visit www.phillips66.com or follow us on Twitter @Phillips66Co.

Contacts

Phillips 66
Rich Johnson, 832-765-1016 (media)
[e-mail]
or
Rosy Zuklic, 832-765-2297 (investors)
[e-mail]

http://www.businesswire.com/news/home/20140507006445/en/Phillips-66-Announces-28-Percent-Increase-Quarterly#.U2qO1a1OWUk

[Enterprising Investor]

Phillips 66 Reports First-Quarter Earnings of $1.6 Billion or $2.67 Per Share (4/30/14)

Adjusted earnings of $866 million or $1.47 per share

Highlights

• Delivered significant improvement in Midstream results

• Achieved record earnings in Chemicals

• Refining impacted by planned downtime

• Returned $2.2 billion of capital to shareholders including the exchange of Phillips Specialty Products Inc. for Phillips 66 shares

HOUSTON--(BUSINESS WIRE)--Phillips 66 (NYSE: PSX), an energy manufacturing and logistics company, announces first-quarter earnings of $1.6 billion and adjusted earnings of $866 million excluding $706 million primarily related to the realized gain on the Phillips Specialty Products Inc. (PSPI) exchange. This compares with fourth-quarter 2013 earnings of $826 million and adjusted earnings of $808 million.

“We delivered a strong quarter, with solid performance and improved margins in our Midstream and Chemicals businesses”

"We delivered a strong quarter, with solid performance and improved margins in our Midstream and Chemicals businesses," said Greg Garland, chairman and CEO of Phillips 66. "Our Refining results were impacted by planned downtime at several of our Gulf Coast and Central Corridor refineries and tightening crude spreads."

"During the first quarter, we made significant progress executing our Midstream growth plans. Phillips 66 Partners completed its first acquisition, final investment decisions were reached on our Sweeny NGL Fractionator I and Freeport LPG Export Terminal projects, and we signed a key LPG sales agreement. In addition to funding our growth plans, we continued to return capital to our shareholders through the payment of regular dividends, ongoing share repurchases and the PSPI share exchange," said Garland.

Midstream

Midstream recorded $188 million of earnings during the first quarter of 2014, $67 million higher than the prior quarter.

Phillips 66’s Transportation business earnings were $62 million during the quarter, compared with earnings of $50 million in the fourth quarter of 2013. The increase was primarily attributable to improved margins from higher throughput fees and railcar rates, as well as lower operating costs.

First-quarter earnings related to the company’s equity investment in DCP Midstream, LLC were $83 million, compared with $37 million in the prior quarter. The $46 million increase was partially due to gains recorded by Phillips 66 resulting from the issuance of units by DCP Midstream Partners, LP (DCP Partners). In addition, earnings benefited from lower operating costs, as well as higher natural gas and NGL prices.

Earnings from the NGL business were $43 million for the quarter, compared with $34 million during the fourth quarter of 2013. The increase was primarily related to improved margins driven by stronger propane prices.

Chemicals

The Chemicals segment reflects Phillips 66's equity investment in Chevron Phillips Chemical Company LLC (CPChem). First-quarter 2014 Chemicals earnings were $316 million, an increase of $55 million from the prior quarter.

During the first quarter of 2014, CPChem's Olefins and Polyolefins (O&P) business contributed $283 million to Phillips 66's Chemicals earnings, compared with $262 million in the prior quarter. This increase was primarily due to higher realized O&P chain margins and improved earnings from CPChem's equity affiliates, partially offset by lower ethylene volumes. Global utilization for O&P was 93 percent during the quarter.

CPChem's Specialties, Aromatics and Styrenics (SA&S) business contributed $38 million of earnings during the first quarter of 2014, $29 million higher than the prior period. The improvement was mainly driven by lower costs and improved benzene margins following the completion of a planned turnaround during the fourth quarter.

Refining

Refining earnings were $306 million during the first quarter of 2014, compared with earnings of $418 million during the previous quarter. The decrease was primarily attributed to lower volumes due to planned turnaround and maintenance activities, as well as weaker realized refining margins. Despite higher worldwide market crack spreads, realized margins decreased mostly due to tightening crude spreads, lower clean product realizations and negative inventory impacts.

During the quarter, 91 percent of Phillips 66’s U.S. crude slate was advantaged, compared with 94 percent in the fourth quarter of last year. This decrease was largely due to planned refinery turnaround activity in the Gulf Coast region.

Worldwide, Phillips 66’s refining utilization was 90 percent and clean product yield was 84 percent in the first quarter of 2014.

Marketing and Specialties

First-quarter earnings for Marketing and Specialties (M&S) were $137 million, compared with earnings of $105 million during the prior quarter.

Earnings from Marketing and Other were $93 million during the quarter, compared with earnings of $54 million in the previous quarter. The $39 million increase was primarily due to improved U.S. margins, partially offset by higher costs and lower volumes. Refined product exports totaled 139,000 barrels per day in the first quarter, down from 197,000 barrels per day last quarter. The lower exports resulted mostly from refinery turnaround activity in the Gulf Coast region during the first quarter.

Phillips 66’s Specialties businesses generated earnings of $44 million during the first quarter of 2014, compared with earnings of $51 million during the prior quarter. The decrease primarily reflects lower base oil margins, partially offset by improved lubricants margins.

Corporate and Other

Corporate and Other costs were $81 million after-tax for the quarter, $16 million lower than costs in the fourth quarter of 2013.

Discontinued Operations

PSPI, which is reported as Discontinued Operations, was exchanged Feb. 25, 2014, for 17.4 million shares of Phillips 66 common stock. Earnings during the first quarter of 2014 were $706 million, primarily reflecting the gain realized on the exchange. In the fourth quarter of 2013, Discontinued Operations earnings were $18 million.

Financial Position, Liquidity and Return of Capital

During the quarter, Phillips 66 generated $1.4 billion of cash from operations. The company received a $1.2 billion special distribution from WRB Refining in the first quarter of 2014, of which $760 million benefited cash from operations, and $472 million was considered a return of investment and included in "proceeds from asset dispositions." Excluding working capital and the impacts of the WRB special distribution, adjusted cash from operations was $1.0 billion.

The company funded $572 million in capital expenditures and investments, and returned $2.2 billion of capital to shareholders in the first quarter. The PSPI exchange returned $1.35 billion of capital, of which $450 million consisted of cash. In addition, Phillips 66 paid $229 million in dividends and repurchased 8.4 million shares of common stock for $640 million. The share repurchases and PSPI share exchange resulted in 566 million shares outstanding at the end of the first quarter.

As of March 31, 2014, cash and cash equivalents were $5.3 billion and debt was $6.2 billion. The company's debt-to-capital ratio was 22 percent. Additionally, Phillips 66 reported a year-to-date annualized return on capital employed (ROCE) of 23 percent, and a year-to-date annualized adjusted ROCE of 13 percent.

Strategic Initiatives

Phillips 66 is growing its Midstream and Chemicals segments, while enhancing returns in Refining. As announced in February, the company reached a final investment decision to construct its Sweeny Fractionator I and Freeport LPG Export Terminal, and in March signed a related sales contract for delivery of LPG to China. These two projects represent a projected investment of more than $3 billion.

Phillips 66 Partners LP (NYSE: PSXP) completed its first post-initial public offering acquisition from Phillips 66 in March. This $700 million acquisition included a refined products pipeline system and two refinery-grade propylene storage spheres.

The company's Transportation business took delivery of 2,000 new crude oil railcars in 2013 and ordered an additional 1,200 crude oil railcars during the first quarter of 2014. These new crude railcars, which meet or exceed current government safety standards, are part of Phillips 66's program to increase the safe shipment of advantaged crudes into its refineries. Delivery of the additional railcars is scheduled to be completed by the end of 2014. Construction continued on rail offloading facilities at the Bayway and Ferndale refineries, both of which are expected to be operational in the second half of 2014. Recently, the company also reached agreements with several third-party logistics companies to deliver additional advantaged crude to its refineries.

During the quarter, Phillips 66 increased its ownership in the refined products Explorer Pipeline to 19.5 percent with the purchase of an additional 5.7 percent interest. Additionally, the Cross-Channel Connector project is expected to be operational as early as the fourth quarter of 2014.

During the first quarter, DCP Partners completed a $1.15 billion acquisition from DCP Midstream, its largest to date. The transaction included DCP Midstream's one-third interests in the Sand Hills and Southern Hills pipelines and its remaining 20 percent interest in the Eagle Ford system, as well as the 35 million-cubic-feet-per-day (MMCFD) Lucerne 1 Plant in the Denver-Julesburg Basin. In addition, DCP Partners will complete construction of the 200 MMCFD Lucerne 2 Plant, which is expected to be operational in mid-2015. As recently announced, DCP Midstream plans to build a 200 MMCFD sour natural gas processing plant, the Zia II Plant, with associated gathering system expansions in the Permian Basin.

CPChem is investing in domestic growth projects to realize the benefits of low-cost petrochemical feedstocks in the U.S. Gulf Coast (USGC). During the quarter, CPChem broke ground on its USGC Petrochemicals Project consisting of a 3.3 billion-pounds-per-year ethane cracker and two polyethylene facilities, each with an annual capacity of 1.1 billion pounds. The ethane cracker will be built at CPChem's Cedar Bayou Plant in Baytown, Texas, and the two polyethylene units will be built near its Sweeny Facility. The project is expected to start up in 2017. CPChem's 1-hexene project, also at Cedar Bayou, is anticipated to start up during the second quarter of 2014. Globally, CPChem is expanding its sulfur-based products capacity at its Belgium facility by more than 40 percent. Construction is expected to be completed in the second quarter of 2014.

Phillips 66 remains focused on enhancing returns in Refining by expanding access to advantaged feedstocks, controlling costs and optimizing its portfolio. Following a turnaround and crude unit modifications at the Alliance Refinery, the facility now has the capability to process a wider variety of light crude oils. The company continues to progress the potential sale of the Bantry Bay Terminal in Ireland and its interest in the Melaka Refinery in Malaysia; however, the sales process has been discontinued for the Whitegate Refinery in Ireland.

In order to maintain strong refinery utilization rates and meet growing demand for refined products in regions outside the United States, the company is expanding its refined products export capability. Phillips 66 expects to increase its export capability to 550,000 barrels per day by 2016.

In Marketing and Specialties, the company increased its ownership interest in the Sweeny Cogeneration power plant to 100 percent by acquiring the remaining 50 percent interest. Phillips 66's Sweeny Refinery and CPChem's Sweeny Facility both use steam and power generated by the plant.

Later today, Phillips 66 Chairman and Chief Executive Officer Greg Garland; Executive Vice President and Chief Financial Officer Greg Maxwell; and Executive Vice President Tim Taylor will host a webcast at 11 a.m. EDT to discuss the company’s first-quarter performance and provide an update on strategic initiatives. To listen to the conference call and view related presentation materials, go to www.phillips66.com/investors and click on "Presentations & Conference Calls." For detailed supplemental information, go to www.phillips66.com/earningsreports.

[tables deleted]

About Phillips 66

Built on more than 130 years of experience, Phillips 66 is a growing energy manufacturing and logistics company with high-performing Midstream, Chemicals, Refining, and Marketing and Specialties businesses. This integrated portfolio enables Phillips 66 to capture opportunities in the changing energy landscape. Headquartered in Houston, the company has 13,500 employees who are committed to operating excellence and safety. Phillips 66 had $51 billion of assets as of March 31, 2014. For more information, visit www.phillips66.com or follow us on Twitter @Phillips66Co.

http://www.businesswire.com/news/home/20140430005645/en/Phillips-66-Reports-First-Quarter-Earnings-1.6-Billion#.U2qNAa1OWUk

[Enterprising Investor]

Phillips 66 Reports Fourth-Quarter Earnings of $826 Million or $1.37 Per Share (1/29/14)

Adjusted earnings of $808 million or $1.34 per share

Highlights

• Improved refining market capture

• 94 percent advantaged crude slate in the United States

• Increased refined product exports to 197,000 barrels per day

• Announced exchange of Phillips Specialty Products Inc. (PSPI) for Phillips 66 shares

• $876 million of capital returned to shareholders through dividends and share repurchases

HOUSTON--(BUSINESS WIRE)--Phillips 66 (NYSE: PSX), an energy manufacturing and logistics company, announces fourth-quarter earnings of $826 million, compared with earnings of $708 million in the fourth quarter of 2012. Adjusted earnings were $808 million, compared with $1.3 billion in the same period last year.

"Throughout 2013, we maintained our focus on operating excellence, safety and environmental stewardship. We ran well during the fourth quarter, allowing us to capitalize on favorable crude differentials while exporting a record volume of refined products. Also during the quarter, our board of directors approved an additional $2.0 billion of share repurchases and increased the dividend by 25 percent," said Greg Garland, chairman and CEO of Phillips 66.

"In addition, we strengthened our balance sheet by repaying debt and announced our 2014 capital program, with approximately 70 percent directed to midstream and chemicals opportunities. As we look ahead, our integrated asset portfolio combined with the capabilities of our people uniquely position Phillips 66 for growth in the changing energy landscape," said Garland.

Midstream

Midstream earnings were $121 million in the fourth quarter of 2013, compared with earnings of $92 million and adjusted earnings of $71 million in the same period last year.

Phillips 66’s Transportation business generated earnings of $50 million during the fourth quarter of 2013. In the same period of 2012, Transportation recorded earnings of $35 million and adjusted earnings of $14 million. The $36 million increase from the prior year's adjusted earnings was primarily attributable to higher throughput fees and volumes.

Fourth-quarter earnings related to the company’s equity investment in DCP Midstream were $37 million, compared with $38 million in the same period last year. This slight decrease was due to weather-related impacts and increased costs, which were mostly offset by higher prices.

Earnings from NGL Operations and Other were $34 million during the quarter, $15 million higher than in the fourth quarter of 2012. The increase was primarily related to improved margins and inventory impacts.

Chemicals

The Chemicals segment reflects Phillips 66's investment in Chevron Phillips Chemical Company (CPChem). Fourth-quarter Chemicals earnings were $261 million, an increase of $15 million from the same period last year.

Improved earnings from CPChem's Olefins and Polyolefins (O&P) were primarily due to increased polyethylene margins, equity earnings and ethylene volumes, partially offset by higher costs. Global utilization for O&P was 95 percent during the quarter.

CPChem's Specialties, Aromatics and Styrenics were adversely impacted by benzene margins and costs related to a planned turnaround in the fourth quarter of 2013.

Equity earnings from joint ventures within CPChem contributed $90 million to Phillips 66’s pre-tax Chemicals earnings during the fourth quarter, $30 million more than in the same period last year. The increase was largely a result of improved operations at Saudi Polymers Company.

Refining

Refining recorded fourth-quarter earnings of $450 million, compared with earnings of $363 million and adjusted earnings of $960 million in the same period last year. The decrease from the prior year's adjusted earnings was primarily due to lower margins in all regions except the Gulf Coast. Margins were negatively impacted by weaker worldwide market crack spreads; however, this was partially offset by improved market capture compared with the same period last year.

During the quarter, 94 percent of the company’s U.S. crude slate was advantaged, compared with 67 percent in the same period last year. The increase was largely due to additional domestic crudes consistently trading at a discount to Brent. Refining also processed 257,000 barrels per day of tight oil, an increase of 111,000 barrels per day compared with the fourth quarter of 2012, as well as higher volumes of heavy Canadian crudes.

Compared with the third quarter of 2013, Refining's market capture increased to 112 percent from 46 percent. The company benefited from improved clean product differentials, primarily due to exports from the Gulf Coast region and seasonal gasoline blending. In addition, widening crude spreads increased earnings, particularly in the Central Corridor region.

Worldwide, Phillips 66’s refining utilization was 92 percent and clean product yield was 84 percent in the fourth quarter.

Marketing and Specialties (M&S)

Fourth-quarter earnings for M&S were $73 million, compared with earnings of $113 million in the same period last year. This decrease was primarily due to the sale of the U.K. power generation business completed in July of 2013 and lower marketing margins, partially offset by reduced costs and higher volumes. Weaker marketing margins were mostly attributable to rising product prices in the United States.

M&S sales volumes improved in the fourth quarter of 2013 compared with the same period last year. Worldwide marketing volumes increased by 19,000 barrels per day. Refined product exports totaled 197,000 barrels per day in the fourth quarter, up from 149,000 barrels per day in the same period last year.

Reported earnings for Phillips 66’s Specialties businesses were $23 million, excluding discontinued operations. Compared with the same period last year, this was a decrease of $7 million primarily reflecting lower margins.

As previously announced, the company plans to exchange PSPI for shares of Phillips 66 common stock. Following regulatory review, the transaction is expected to close in the first half of 2014. Certain prior period amounts have been recast to reflect PSPI as Discontinued Operations.

Corporate and Other

Corporate and Other costs were $97 million after-tax for the quarter, compared with $120 million of costs and $92 million of adjusted costs in the fourth quarter of 2012.

Discontinued Operations

Discontinued Operations represents PSPI. Earnings in the fourth quarter of 2013 were $18 million, compared with $14 million in the same period last year.

Financial Position, Liquidity and Return of Capital

During the quarter, Phillips 66 generated $865 million of cash from continuing operations. Excluding changes in working capital, operating cash flow from continuing operations was $1.3 billion. The company also funded $623 million in capital expenditures and investments.

In the fourth quarter, Phillips 66 returned $876 million of capital to shareholders. The company paid $232 million in dividends and repurchased 9.9 million shares of common stock totaling $644 million.

Full-Year Financial Results

Phillips 66's full-year 2013 earnings were $3.7 billion or $6.02 per share. This compares with $4.1 billion or $6.48 per share in 2012. Full-year adjusted earnings were $3.6 billion or $5.89 per share in 2013, compared with $5.3 billion or $8.38 per share in 2012.

The company generated $5.9 billion in cash from continuing operations during 2013. Excluding changes in working capital, operating cash flow from continuing operations was $5.1 billion. Phillips 66 funded $1.8 billion in capital expenditures and investments and repaid the outstanding $1.0 billion of its amortizing three-year term loan.

During 2013, the company paid $807 million in dividends, and repurchased 36.5 million shares of common stock totaling $2.2 billion.

Phillips 66 ended the year with $6.2 billion of debt and $5.4 billion of cash and cash equivalents, including $425 million held by Phillips 66 Partners. The company’s debt-to-capital ratio was 22 percent and return on capital employed was 14 percent.

Strategic Initiatives

Phillips 66 is growing its Midstream and Chemicals segments, while enhancing returns in Refining. As previously announced, the company is implementing this strategy through its planned $4.6 billion 2014 capital program, including its share of joint venture capital spending of $1.9 billion.

In Midstream, as previously announced, the company is advancing development of a 100,000 barrel-per-day natural gas liquids (NGL) fractionator to be located in Old Ocean, Texas. Phillips 66 also expects to build a liquefied petroleum gas (LPG) terminal in Freeport, Texas, to help meet growing global demand. Final investment decisions for these projects will be submitted for board approval during the first quarter of 2014. The company will also seek growth opportunities through Phillips 66 Partners (NYSE: PSXP).

By the end of the fourth quarter, the company’s Transportation business had taken delivery of all 2,000 railcars it ordered in 2012. The new railcars are being used to transport advantaged crude to Phillips 66 refineries. The company successfully completed an open-season for the Cross-Channel Connector project, which will include reactivating an idled pipeline to connect refineries and storage terminals on the south side of the Houston Ship Channel with pipeline systems on the north side.

During the fourth quarter of 2013, DCP Midstream Partners' joint venture, Texas Express Pipeline, began operations. The approximately 580-mile pipeline will transport NGL from Skellytown, Texas, to Mont Belvieu, Texas. The 435-mile Front Range Pipeline joint venture is expected to start up in the first quarter of 2014 and will extend from the Denver-Julesburg Basin to transport NGL to Skellytown. Additionally, the 200 million-cubic-feet-per-day Goliad Plant in the Eagle Ford and the expansion of the O'Connor Plant to 160 million cubic feet per day in the Denver-Julesburg Basin are anticipated to start up in 2014.

CPChem is investing in domestic growth projects to realize the benefits of low-cost petrochemical feedstocks on the U.S. Gulf Coast (USGC). During the quarter, CPChem received board approval for the USGC Petrochemicals Project consisting of a 3.3 billion-pound-per-year ethane cracker and related polyethylene facilities. CPChem also completed a study to expand normal alpha olefins capacity at its Cedar Bayou plant in Baytown, Texas, and will proceed with engineering plans. Also in 2013, CPChem's Sweeny Facility expanded its fractionator capacity by 22,000 barrels per day, or 19 percent. Additionally, the 1-hexene facility at Cedar Bayou is anticipated to start up during the first half of 2014.

Phillips 66 continues to enhance returns in Refining by both expanding access to advantaged feedstocks and optimizing the mix within its advantaged crude slate. Recently, the company began shipping Eagle Ford crude to the Sweeny Refinery on a third-party pipeline. Construction continued on crude-by-rail offloading facilities at the Bayway and Ferndale refineries, both of which are expected to be operational in the second half of 2014. The company also reached agreements with several third-party logistics companies to deliver additional advantaged crude to its refineries.

In order to maintain strong refinery utilization rates, the company is expanding its refined product export capability. By the end of the fourth quarter, the company had completed projects at several U.S. coastal refineries to increase total export capacity in excess of 400,000 barrels per day from 285,000 barrels per day in 2012. Over the next several years, Phillips 66 expects to increase its export capability to more than 500,000 barrels per day.

As previously announced, Phillips 66 formed a strategic joint development agreement with Sapphire Energy, Inc. to advance commercialization of algae crude oil. The companies will work together to collect and analyze data from co-processing of algae and conventional crude oil into fuels.

In the fourth quarter, Phillips 66’s board of directors approved $2.0 billion of additional share repurchases for total authorizations of $5.0 billion. Since the share repurchase program was initiated in the third quarter of 2012 through the end of December 2013, the company has repurchased 44.1 million shares of common stock for $2.6 billion, representing 7 percent of shares outstanding at the time Phillips 66 became a stand-alone company. This resulted in 590 million shares outstanding at the end of 2013. In addition to the ongoing share repurchase program, a further reduction of outstanding shares will result from the planned PSPI exchange.

Later today, Phillips 66 Chairman and Chief Executive Officer Greg Garland, Executive Vice President and Chief Financial Officer Greg Maxwell, and Executive Vice President Tim Taylor will host a webcast at 12 p.m. EST to discuss the company’s fourth-quarter performance and provide an update on strategic initiatives. To listen to the conference call and view related presentation materials, go to www.phillips66.com/investors and click on “Presentations and Conference Calls.” For detailed supplemental information, go to www.phillips66.com/earningsreports.

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