2018 Annual Report

Financial Highlights

(Millions of Dollars, Except Per Share Amounts) 2018 2017 2016
Sales and other operating revenues $111,461 $102,354 $84,279
Income before income taxes 7,445 3,555 2,191
Net income 5,873 5,248 1,644
Net income attributable to Phillips 66 5,595 5,106 1,555
Per share of common stock
Basic 11.87 9.90 2.94
Diluted 11.80 9.85 2.92
Cash and cash equivalents 3,019 3,119 2,711
Total assets 54,302 54,371 51,653
Long-term debt 11,093 10,069 9,558
Total equity 27,153 27,428 23,725
Cash from operating activities 7,573 3,648 2,963
Cash dividends declared per common share 3.10 2.73 2.45
Adjusted earnings 5,550 2,269 1,498
Adjusted earnings per share 11.71 4.38 2.82

Total Shareholder Return

(%)

Shareholder Return

  • PSX +214
  • Peers* +118
  • S&P 100 +103
*Celanese Corporation; Delek US Holdings, Inc.; Eastman Chemical Corporation; Enterprise Products Partners, LP; HollyFrontier Corporation; Huntsman Corporation; LyondellBasell Industries N.V.; Marathon Petroleum Corporation; Oneok, Inc.; PBF Energy Inc.; Targa Resources Corporation; Valero Energy Corporation; and Westlake Chemical Corporation

Adjusted Earnings

($ in millions)

Adjusted Earnings

Adjusted Return on Capital Employed (ROCE)

(%)

Adjusted Return on Capital Employed (ROCE)

Our 2018 earnings were $5.6 billion or $11.80 per share.
Adjusted earnings were $5.6 billion or $11.71 per share.

The increase in adjusted earnings in 2018, compared with 2017, was primarily due to higher Refining margins associated with strong market capture from advantaged crude feedstocks. Midstream and Chemicals earnings benefited from growth projects. Our results were also favorably impacted by lower income taxes from U.S. tax reform.

During 2018, we generated $7.6 billion of cash from operations, compared with $3.6 billion in 2017. We funded $2.6 billion of capital expenditures, paid $1.4 billion of dividends and repurchased $4.6 billion of shares. Our ending cash balance was $3.0 billion.

Total debt at year-end was $11.2 billion, resulting in a debt-to-capital ratio of 29 percent. Phillips 66 has a strong balance sheet and investment grade credit rating.

Our disciplined capital allocation enables us to grow our businesses while also delivering strong shareholder distributions. Long term, we expect to re-invest 60 percent of our operating cash flow back into our business and distribute 40 percent to our shareholders. For 2019, we are funding a $2.9 billion adjusted capital budget, which includes $1.9 billion of growth capital and $1.0 billion of sustaining capital.

Approximately $1.4 billion of the growth capital is for Midstream projects, with $0.5 billion for highreturn Refining and Marketing projects. Our major joint ventures have self-funded capital programs, and our proportional share of their capital expenditures is $1.2 billion.

2019 Consolidated Adjusted Capital Budget

2019 Consolidated Adjusted Capital Budget

  • $1.9 billion growth capital
    • Pipeline and terminal investments
    • Fractionation and processing capability
    • Export capacity
    • Yield and feedstock enhancements
  • $1.0 billion sustaining capital
    • Maintaining safe, reliable assets
  • Sustaining
  • Phillips 66 Midstream Growth
  • Phillips 66 Partners Growth
  • Returns

Capital Structure

($B)

Consolidated Capital Expenditures and Investments

($B)

Capital Structure

Consolidated Capital Expenditures and Investments

  • PSX Equity
  • PSX noncontrolling interest attributable to PSXP
  • PSX debt
  • PSXP third-party debt
  • PSX debt-to-capital excluding PSXP
  • Consolidated debt-to-capital
  • PSX
  • PSXP