Operating in several links in the energy value chain helps this company sustain a healthy dividend.Boosting its dividend at a 12% compound annual growth rate from 2013 through 2023, Phillips 66 (PSX -0.01%) is undeniably dedicated to rewarding shareholders. The energy company has consistently hiked its dividend payout,  which makes it a compelling choice for investors looking to fuel their passive income with a reliable name from the oil patch. The stock's forward dividend yield of 3.5% also makes it a comp ...

Phillips 66 (PSX) reported second-quarter 2024 results, wherein it beat both the bottom-line and top-line estimates. However, since its earnings release before the opening bell on Jul 30, the stock price has fallen 6.2% amid a global market sell-off due to concerns about the overall health of the U.S. economy. Additionally, high oil prices, which are used as inputs for producing final products like gasoline, are adversely impacting the company’s refining business and may also be contributing to the stock pr ...

PHILLIPS 66 SECOND-QUARTER CONFERENCE CALL July 30, 2024 Cautionary Statement This presentation contains forward-looking statements within the meaning of the federal securities laws. Words such as "anticipated," "estimated," "expected," "planned," "scheduled," "targeted," "believe," "continue," "intend," "will," "would," "objective," "goal," "project," "efforts," "strategies" and similar expressions that convey the prospective nature of events or outcomes generally indicate forward-looking statements. Howev ...

Gary Yeowell Thesis I first started covering Phillips 66 (NYSE:PSX) in March of 2023. In that original analysis, and in my comparison with Valero (VLO), I highlighted that PSX's midstream assets are a coat of armor for investors by providing what has proved to be an earnings floor when crack spreads declined. Refinery margins have fallen over 50% since Q1 of 2023. As a result, the consistent performance of the midstream segment now contributes over 45% of the company's earnings. The refining segment is ...

Financial Performance - Total revenues and other income for Q2 2024 were $38.911 billion, compared to $35.740 billion in Q2 2023, reflecting a growth of 8.9%[10] - Net income for Q2 2024 was $1.020 billion, a decrease from $1.734 billion in Q2 2023, representing a decline of 41.2%[13] - Comprehensive income attributable to Phillips 66 for Q2 2024 was $1.018 billion, down from $1.798 billion in Q2 2023, a decrease of 43.4%[13] - Net income attributable to Phillips 66 common stockholders for the three months ended June 30, 2024, is $1.015 billion, with net income available to common stockholders at $1.012 billion[54] - Earnings per share (EPS) for the three months ended June 30, 2024, is $2.39 (basic) and $2.38 (diluted)[56] - Net income attributable to Phillips 66 was $1 billion in Q2 2024, compared to $1.7 billion in Q2 2023, primarily due to a decline in realized refining margins[144] - Sales and other operating revenues increased by 9% in Q2 2024, driven by higher crude oil prices and refined petroleum product sales volumes[147] - Net gain on dispositions increased by $249 million in Q2 2024 and $215 million in the six-month period of 2024, primarily due to a $238 million before-tax gain from the sale of a 25% ownership interest in REX[148] - Other income decreased by 41% in Q2 2024 due to lower interest income from reduced cash balances[148] - Taxes other than income taxes decreased by 72% in Q2 2024 and 44% in the six-month period of 2024, primarily due to renewable diesel blending tax credits[149] - Income tax expense decreased by 43% in Q2 2024 and 54% in the six-month period of 2024, driven by lower income before taxes[149] - Net income attributable to noncontrolling interests decreased by 86% in Q2 2024 and 88% in the six-month period of 2024, primarily due to Midstream segment impairment charges and the DCP LP Merger[150] - The company reported earnings of $1 billion and cash provided by operating activities of $2.1 billion in the second quarter of 2024[132] Cash Flow and Capital Expenditures - Cash and cash equivalents decreased to $2.444 billion as of June 30, 2024, from $3.323 billion at the end of 2023, a reduction of 26.5%[15] - Capital expenditures and investments in Q2 2024 amounted to $995 million, compared to $929 million in Q2 2023, an increase of 7.1%[16] - Repurchase of common stock in Q2 2024 totaled $2.004 billion, slightly lower than $2.109 billion in Q2 2023, a decrease of 5.0%[16] - Dividends paid on common stock in Q2 2024 were $933 million, compared to $960 million in Q2 2023, a decline of 2.8%[16] - Cash and cash equivalents decreased to $2.4 billion in the first six months of 2024, with $1.9 billion generated from operating activities and $685 million from asset dispositions[185] Balance Sheet and Debt - Total assets as of June 30, 2024, were $75.945 billion, up from $75.501 billion at the end of 2023, an increase of 0.6%[15] - Long-term debt as of June 30, 2024, was $17.180 billion, down from $17.877 billion at the end of 2023, a reduction of 3.9%[15] - Total debt increased to $19.96 billion as of June 30, 2024, with a debt-to-capital ratio of 40%[185] - Phillips 66 issued $1.5 billion in senior unsecured notes on February 28, 2024, including $600 million at 5.250% due 2031, $400 million at 5.300% due 2033, and $500 million at 5.650% due 2054[60] - Phillips 66 repaid $700 million of its $1.25 billion delayed draw term loan on March 4, 2024[62] - Phillips 66 entered into a $400 million uncommitted credit facility on June 25, 2024, with $400 million outstanding as of June 30, 2024[65] - Phillips 66 has a $5 billion revolving credit agreement with a scheduled maturity date of February 28, 2029, and no borrowings were outstanding as of June 30, 2024[66] - Phillips 66 has a $5 billion uncommitted commercial paper program, with $899 million issued as of June 30, 2024[67] - Phillips 66 issued $1.5 billion in senior unsecured notes in February 2024, including $600 million at 5.250%, $400 million at 5.300%, and $500 million at 5.650%[189] - The company entered into a $400 million uncommitted credit facility on June 25, 2024, with $400 million outstanding as of June 30, 2024[191] Acquisitions and Divestitures - Completed acquisition of DCP Midstream, LP, increasing the company's economic interest in DCP LP from 43.3% to 86.8% and in DCP Sand Hills and DCP Southern Hills from 62.2% to 91.2%[26] - Acquired a marketing business on the U.S. West Coast for $272 million to support renewable diesel placement, recording $146 million in amortizable intangible assets and $67 million in goodwill[28] - Entered into an agreement to acquire Pinnacle Midland Parent LLC for $566 million to expand natural gas operations in the Permian Basin[29] - Sold 25% ownership interest in Rockies Express Pipeline LLC for approximately $685 million, recognizing a before-tax gain of $238 million[51] - Entered into an agreement to sell ownership interests in certain gathering and processing assets in Louisiana and Alabama for approximately $170 million[52] - Phillips 66 sold its 25% ownership interest in REX for approximately $685 million on June 14, 2024[195] - The company agreed to sell certain gathering and processing assets in Louisiana and Alabama for approximately $170 million, expected to close in Q3 2024[196] Segment Performance - Consolidated sales and other operating revenues for the six months ended June 30, 2024, were $73.94 billion, with refined petroleum products and renewable fuels contributing $53.81 billion[30] - Geographic revenue breakdown for the six months ended June 30, 2024: United States $58.84 billion, United Kingdom $7.10 billion, Germany $2.67 billion, and other countries $5.33 billion[31] - Total sales for the Refining segment increased from $22,016 million in Q2 2023 to $23,099 million in Q2 2024, with intersegment eliminations reducing net sales to $9,200 million[120] - Renewable Fuels segment sales grew from $1,235 million in Q2 2023 to $1,501 million in Q2 2024, with intersegment eliminations resulting in net sales of $350 million[120] - Midstream segment results increased by $147 million in Q2 2024 but decreased by $15 million in the six-month period of 2024[154] - Refining segment results decreased by $873 million in Q2 2024 and $2,251 million in the six-month period of 2024, primarily due to lower realized margins[168] - Marketing and Specialties segment results decreased by $118 million in Q2 2024 and $115 million in the six-month period of 2024, driven by lower U.S. marketing fuel margins[174] - Renewable Fuels segment produced 31 thousand barrels daily in Q2 2024, up from 10 thousand barrels daily in the same period of 2023[177] - Renewable Fuels segment decreased by $123 million in Q2 2024 and $252 million in the six-month period of 2024, driven by higher feedstock costs and lower emissions credits, partially offset by increased renewable fuel sales and tax credits[178] Environmental and Regulatory - Total environmental accruals were $448 million at June 30, 2024, compared to $446 million at December 31, 2023[81] - The Rodeo Renewable Energy Complex (RREC) processes approximately 50,000 barrels per day of renewable feedstocks and is expected to produce sustainable aviation fuel in Q3 2024[133] - The composite 3:2:1 market crack spread decreased to an average of $18.96 per barrel in Q2 2024, from $28.65 per barrel in Q2 2023[139] Derivatives and Commodities - Commodity derivative assets and liabilities were $3,283 million and $3,387 million, respectively, at June 30, 2024[90] - Net gain (loss) from commodity derivative activity was $97 million for the three months ended June 30, 2024[92] - Open position for crude oil, refined petroleum products, NGL, and renewable feedstocks was (51) million barrels at June 30, 2024[93] - Open position for natural gas was (6) billion cubic feet at June 30, 2024[93] - More than 90% of derivative contract volumes are set to expire within the next 12 months[91] - Commodity derivative assets increased from $3,395 million in December 2023 to $3,474 million in June 2024, with exchange-cleared instruments rising from $3,129 million to $3,210 million[102][102] Pension and Benefits - Net periodic benefit cost for pension benefits in the U.S. increased from $25 million in Q2 2023 to $32 million in Q2 2024, driven by higher service and interest costs[106] - The company contributed $18 million to U.S. pension and postretirement benefit plans in the first half of 2024, with an additional $17 million expected for the remainder of the year[106] - Accumulated other comprehensive loss increased from $282 million in December 2023 to $309 million in June 2024, primarily due to foreign currency translation losses[110] Other Financial Metrics - Contract-related assets increased to $563 million at June 30, 2024, from $537 million at December 31, 2023, while contract liabilities decreased to $162 million from $187 million[32] - Remaining performance obligations for minimum volume commitment contracts amounted to $394 million, expected to be recognized through 2031[33] - Inventories valued on the LIFO basis totaled $5.93 billion at June 30, 2024, with an estimated excess of current replacement cost over LIFO cost of approximately $5.9 billion[39] - Gross investment in PP&E for Midstream segment is $26.277 billion with accumulated depreciation and amortization of $5.085 billion, resulting in a net value of $21.192 billion[53] - Total impairments for the three months ended June 30, 2024, are $225 million, primarily related to Midstream segment assets in Texas[57] - Impairments increased by $221 million in Q2 2024 and $378 million in the six-month period of 2024, driven by Midstream segment charges related to Texas assets and Refining segment charges in California[148] - Net interest expense increased by $18 million in Q2 2024 and $80 million in the six-month period of 2024, primarily due to lower interest income and higher average debt principal balances[181] - Corporate overhead and other costs decreased by $14 million in Q2 2024 and $31 million in the six-month period of 2024, mainly due to reduced consulting fees[181] - The fair value of the investment in NOVONIX declined by $7 million in Q2 2024 and $2 million in the six-month period of 2024[182] - Fixed-rate debt, excluding finance leases and software obligations, increased from $16,718 million in December 2023 to $17,497 million in June 2024, with a fair value adjustment from $17,126 million to $18,415 million[102][102] - Performance obligations secured by letters of credit and bank guarantees amounted to $1.1 billion at June 30, 2024[83] - Trade receivables primarily have payment terms of 30 days or less[95] - Derivative instruments are classified as Level 1, 2, or 3 based on the observability of valuation inputs[99] - Investment in NOVONIX Limited is categorized as Level 1 in the fair value hierarchy[101] - Phillips 66 has residual value guarantees totaling $514 million for its headquarters facility lease and $172 million for railcar, airplane, and truck leases[71] - The establishment of a Renewable Fuels operating segment in April 2024 reclassified renewable fuels activities previously reported in Refining, M&S, and Midstream segments[116] - The effective income tax rate for the three and six months ended June 30, 2024, was 22%, compared to 23% and 22% for the corresponding periods in 2023[122] - DCP Midstream Class A Segment's net properties, plants, and equipment were $8,967 million as of June 30, 2024, compared to $9,319 million as of December 31, 2023[123] - The DCP LP Merger increased the company's economic interest in DCP LP from 43.3% to 86.8%, with a cash consideration of $3,796 million paid to common unitholders[124] - DCP LP made cash distributions of $12 million and $24 million during the three and six months ended June 30, 2024, respectively, compared to $51 million and $102 million in the same periods in 2023[126] - Phillips 66 Partners' 25% share of the maximum potential equity contributions under the CECU is approximately $215 million[204] - Potential annual interest payments on the notes could amount to approximately $10 million if operations cease[204] - The CECU may require co-venturers to make proportionate equity contributions if there is an unfavorable final judgment in ongoing litigation[204]

Phillips 66 (NYSE:PSX) Q2 2024 Earnings Conference Call July 30, 2024 12:00 PM ET Company Participants Jeff Dietert - VP, IR Mark Lashier - Chairman and CEO Kevin Mitchell - CFO Rich Harbison - Refining Brian Mandell - Marketing and Commercial Don Baldridge - Midstream and Chemicals Conference Call Participants Roger Read - Wells Fargo Neil Mehta - Goldman Sachs John Royall - JPMorgan Ryan Todd - Piper Sandler Matthew Blair - Tudor, Pickering, Holt Jason Gabelman - TD Cowen Doug Leggate - Wolfe Research Pau ...

Key TakeawaysPhillips 66 beat profit and sales estimates in the second quarter as midstream income jumped 23.7% year-over-year.The energy company pointed to higher natural gas liquids volume and margin, along with cost cuts, for the midstream gains.Phillips' crude utilization rate was the highest in five years. Shares of Phillips 66 (PSX) jumped in intraday trading Tuesday after the energy company posted better-than-anticipated results on higher midstream profit. The company reported second-quarter earnings ...

Phillips 66 (PSX) reported second-quarter 2024 adjusted earnings of $2.31 per share, which beat the Zacks Consensus Estimate of $2.12. However, the bottom line was lower than the year-ago quarter’s level of $3.87.Total quarterly revenues of $38.9 billion beat the Zacks Consensus Estimate of $32 billion. The top line also improved from the year-ago quarter’s $35.7 billion.The better-than-expected quarterly results can be primarily attributed to record natural gas liquids (NGL) volumes in the Midstream segmen ...

Exhibit 99.2 Phillips 66 Earnings Release Supplemental Data CONSOLIDATED INCOME STATEMENT Millions of Dollars, Except as Indicated 2024 2023 1st 2nd 3rd 4th 1st 2nd 3rd 4th | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |--------------------|--------|--------|-------|-------|--------|--------|--------|--------|--------|---------| | | Qtr | Qtr | Qtr | Qtr | YTD | Qtr | Qtr | Qtr | Qtr | YTD | | Revenues and | | | | | | | | | | | | Other Income | | | | | | | | | | | | Sales and other | | ...

Phillips 66 (PSX) is set to report second-quarter 2024 earnings on Jul 30, before the opening bell.In the last reported quarter, the company’s earnings of $1.90 per share missed the Zacks Consensus Estimate of $2.05 due to lower refining margins worldwide and increased expenses. PSX’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed the same twice, delivering an average surprise of 7.3%. This is depicted in the graph below.Estimate TrendThe Zacks Consensus Estimate ...