Stock Analysis on Net
Stock Analysis on Net

Phillips 66 (NYSE:PSX)

This company has been moved to the archive! The financial data has not been updated since February 21, 2020.

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

Phillips 66, income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Federal 354 739 9 (105) 1,128
Foreign 204 326 126 66 (74)
State and local 61 255 61 (24) 227
Current 619 1,320 196 (63) 1,281
Federal 177 257 (1,960) 645 444
Foreign (50) 53 3 (84) 42
State and local 55 (58) 68 49 (3)
Deferred 182 252 (1,889) 610 483
Income tax expense (benefit) 801 1,572 (1,693) 547 1,764

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

Item Description The company
Current Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Phillips 66 current increased from 2017 to 2018 but then slightly decreased from 2018 to 2019 not reaching 2017 level.
Deferred Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Phillips 66 deferred increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.
Income tax expense (benefit) Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Phillips 66 income tax expense (benefit) increased from 2017 to 2018 but then slightly decreased from 2018 to 2019.

Effective Income Tax Rate (EITR)

Phillips 66, effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Federal statutory income tax rate 21.00% 21.00% 35.00% 35.00% 35.00%
State income tax, net of federal benefit 2.20% 2.10% 2.20% 0.60% 2.50%
Foreign rate differential -0.70% -1.20% -5.90% -6.90% -3.90%
Noncontrolling interests -1.50% -0.80% -1.30% -1.20% -0.20%
Change in valuation allowance 0.30% -0.30% -0.10% -3.70% -0.20%
Federal manufacturing deduction 0.00% 0.00% -0.50% 0.00% -1.30%
Goodwill allocated to assets sold 0.00% 0.00% 0.00% 0.00% 0.70%
German tax legislation 0.00% 0.00% 0.00% 0.00% -1.70%
Sale of foreign subsidiaries 0.00% 0.00% 0.00% 0.00% -2.10%
Other -1.10% -0.20% -0.50% 1.20% 0.40%
Effective income tax rate, before Tax Cuts and Jobs Act 20.20% 20.60% 28.90% 25.00% 29.20%
Tax Cuts and Jobs Act -1.00% 0.50% -76.50% 0.00% 0.00%
Effective income tax rate 19.20% 21.10% -47.60% 25.00% 29.20%

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

Item Description The company
Effective income tax rate, before Tax Cuts and Jobs Act Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Phillips 66 effective income tax rate, before Tax Cuts and Jobs Act decreased from 2017 to 2018 and from 2018 to 2019.

Components of Deferred Tax Assets and Liabilities

Phillips 66, components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Benefit plan accruals 460 395 314 669 751
Asset retirement obligations and accrued environmental costs 115 109 121 211 215
Loss and credit carryforwards 54 59 96 261 227
Other financial accruals and deferrals 70 16 44 188 175
Inventory 28 — 10 — —
Other 281 — 3 1 1
Deferred tax assets 1,008 579 588 1,330 1,369
Valuation allowance (22) (8) (28) (38) (160)
Net deferred tax assets 986 571 560 1,292 1,209
Properties, plants and equipment, and intangibles (3,297) (3,074) (2,942) (4,525) (4,361)
Investment in joint ventures (2,137) (2,041) (1,923) (2,442) (2,292)
Investment in subsidiaries (794) (602) (594) (803) (236)
Inventory — (66) — (154) (176)
Other (263) (14) (18) (19) (24)
Deferred tax liabilities (6,491) (5,797) (5,477) (7,943) (7,089)
Net deferred tax assets (liabilities) (5,505) (5,226) (4,917) (6,651) (5,880)

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

Item Description The company
Deferred tax assets Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Phillips 66 deferred tax assets decreased from 2017 to 2018 but then increased from 2018 to 2019 exceeding 2017 level.
Net deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Phillips 66 net deferred tax assets increased from 2017 to 2018 and from 2018 to 2019.
Net deferred tax assets (liabilities) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Phillips 66 net deferred tax assets (liabilities) decreased from 2017 to 2018 and from 2018 to 2019.

Deferred Tax Assets and Liabilities, Classification

Phillips 66, deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Deferred tax assets (included in Other assets) 48 49 91 92 161
Deferred tax liabilities 5,553 5,275 5,008 6,743 6,041

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

Item Description The company
Deferred tax assets (included in Other assets) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Phillips 66 deferred tax assets (included in Other assets) decreased from 2017 to 2018 and from 2018 to 2019.
Deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Phillips 66 deferred tax liabilities increased from 2017 to 2018 and from 2018 to 2019.

Adjustments to Financial Statements: Removal of Deferred Taxes

Phillips 66, adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Adjustment to Total Assets
Total assets (as reported) 58,720 54,302 54,371 51,653 48,580
Less: Noncurrent deferred tax assets, net 48 49 91 92 161
Total assets (adjusted) 58,672 54,253 54,280 51,561 48,419
Adjustment to Total Liabilities
Total liabilities (as reported) 31,551 27,149 26,943 27,928 24,642
Less: Noncurrent deferred tax liabilities, net 5,553 5,275 5,008 6,743 6,041
Total liabilities (adjusted) 25,998 21,874 21,935 21,185 18,601
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported) 24,910 24,653 25,085 22,390 23,100
Less: Net deferred tax assets (liabilities) (5,505) (5,226) (4,917) (6,651) (5,880)
Stockholders’ equity (adjusted) 30,415 29,879 30,002 29,041 28,980
Adjustment to Net Income Attributable To Phillips 66
Net income attributable to Phillips 66 (as reported) 3,076 5,595 5,106 1,555 4,227
Add: Deferred income tax expense (benefit) 182 252 (1,889) 610 483
Net income attributable to Phillips 66 (adjusted) 3,258 5,847 3,217 2,165 4,710

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

Phillips 66, Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Phillips 66, adjusted financial ratios

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net Profit Margin
Reported net profit margin 2.87% 5.02% 4.99% 1.85% 4.27%
Adjusted net profit margin 3.04% 5.25% 3.14% 2.57% 4.76%
Total Asset Turnover
Reported total asset turnover 1.83 2.05 1.88 1.63 2.04
Adjusted total asset turnover 1.83 2.05 1.89 1.63 2.04
Financial Leverage
Reported financial leverage 2.36 2.20 2.17 2.31 2.10
Adjusted financial leverage 1.93 1.82 1.81 1.78 1.67
Return on Equity (ROE)
Reported ROE 12.35% 22.70% 20.35% 6.95% 18.30%
Adjusted ROE 10.71% 19.57% 10.72% 7.45% 16.25%
Return on Assets (ROA)
Reported ROA 5.24% 10.30% 9.39% 3.01% 8.70%
Adjusted ROA 5.55% 10.78% 5.93% 4.20% 9.73%

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

Financial ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Phillips 66 adjusted net profit margin ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Phillips 66 adjusted total asset turnover ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Phillips 66 adjusted financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Phillips 66 adjusted ROE improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Phillips 66 adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Phillips 66, Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Phillips 66 3,076 5,595 5,106 1,555 4,227
Sales and other operating revenues 107,293 111,461 102,354 84,279 98,975
Profitability Ratio
Net profit margin1 2.87% 5.02% 4.99% 1.85% 4.27%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Phillips 66 3,258 5,847 3,217 2,165 4,710
Sales and other operating revenues 107,293 111,461 102,354 84,279 98,975
Profitability Ratio
Adjusted net profit margin2 3.04% 5.25% 3.14% 2.57% 4.76%

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

2019 Calculations

1 Net profit margin = 100 × Net income attributable to Phillips 66 ÷ Sales and other operating revenues
= 100 × 3,076 ÷ 107,293 = 2.87%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to Phillips 66 ÷ Sales and other operating revenues
= 100 × 3,258 ÷ 107,293 = 3.04%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Phillips 66 adjusted net profit margin ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Sales and other operating revenues 107,293 111,461 102,354 84,279 98,975
Total assets 58,720 54,302 54,371 51,653 48,580
Activity Ratio
Total asset turnover1 1.83 2.05 1.88 1.63 2.04
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Sales and other operating revenues 107,293 111,461 102,354 84,279 98,975
Adjusted total assets 58,672 54,253 54,280 51,561 48,419
Activity Ratio
Adjusted total asset turnover2 1.83 2.05 1.89 1.63 2.04

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

2019 Calculations

1 Total asset turnover = Sales and other operating revenues ÷ Total assets
= 107,293 ÷ 58,720 = 1.83

2 Adjusted total asset turnover = Sales and other operating revenues ÷ Adjusted total assets
= 107,293 ÷ 58,672 = 1.83

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Phillips 66 adjusted total asset turnover ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Total assets 58,720 54,302 54,371 51,653 48,580
Stockholders’ equity 24,910 24,653 25,085 22,390 23,100
Solvency Ratio
Financial leverage1 2.36 2.20 2.17 2.31 2.10
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 58,672 54,253 54,280 51,561 48,419
Adjusted stockholders’ equity 30,415 29,879 30,002 29,041 28,980
Solvency Ratio
Adjusted financial leverage2 1.93 1.82 1.81 1.78 1.67

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

2019 Calculations

1 Financial leverage = Total assets ÷ Stockholders’ equity
= 58,720 ÷ 24,910 = 2.36

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 58,672 ÷ 30,415 = 1.93

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Phillips 66 adjusted financial leverage ratio increased from 2017 to 2018 and from 2018 to 2019.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Phillips 66 3,076 5,595 5,106 1,555 4,227
Stockholders’ equity 24,910 24,653 25,085 22,390 23,100
Profitability Ratio
ROE1 12.35% 22.70% 20.35% 6.95% 18.30%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Phillips 66 3,258 5,847 3,217 2,165 4,710
Adjusted stockholders’ equity 30,415 29,879 30,002 29,041 28,980
Profitability Ratio
Adjusted ROE2 10.71% 19.57% 10.72% 7.45% 16.25%

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

2019 Calculations

1 ROE = 100 × Net income attributable to Phillips 66 ÷ Stockholders’ equity
= 100 × 3,076 ÷ 24,910 = 12.35%

2 Adjusted ROE = 100 × Adjusted net income attributable to Phillips 66 ÷ Adjusted stockholders’ equity
= 100 × 3,258 ÷ 30,415 = 10.71%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Phillips 66 adjusted ROE improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Phillips 66 3,076 5,595 5,106 1,555 4,227
Total assets 58,720 54,302 54,371 51,653 48,580
Profitability Ratio
ROA1 5.24% 10.30% 9.39% 3.01% 8.70%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Phillips 66 3,258 5,847 3,217 2,165 4,710
Adjusted total assets 58,672 54,253 54,280 51,561 48,419
Profitability Ratio
Adjusted ROA2 5.55% 10.78% 5.93% 4.20% 9.73%

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

2019 Calculations

1 ROA = 100 × Net income attributable to Phillips 66 ÷ Total assets
= 100 × 3,076 ÷ 58,720 = 5.24%

2 Adjusted ROA = 100 × Adjusted net income attributable to Phillips 66 ÷ Adjusted total assets
= 100 × 3,258 ÷ 58,672 = 5.55%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Phillips 66 adjusted ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.