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Phillips 66 (NYSE:PSX)

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

Common-Size Income Statement

Phillips 66, common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Sales and other operating revenues 100.00 100.00 100.00 100.00 100.00
Purchased crude oil and products -89.04 -87.86 -77.58 -74.12 -74.16
Operating expenses -4.73 -4.38 -4.59 -5.07 -4.34
Cost of operating revenues -93.76% -92.24% -82.17% -79.19% -78.50%
Excise taxes on sales of petroleum products 0.00 0.00 -12.75 -15.88 -13.92
Gross profit 6.24% 7.76% 5.07% 4.93% 7.58%
Selling, general and administrative expenses -1.57 -1.50 -1.66 -1.94 -1.69
Depreciation and amortization -1.25 -1.22 -1.29 -1.39 -1.09
Impairments -0.80 -0.01 -0.02 -0.01 -0.01
Taxes other than income taxes -0.38 -0.38 -0.40 -0.36 -0.30
Accretion on discounted liabilities -0.02 -0.02 -0.02 -0.02 -0.02
Operating income 2.21% 4.63% 1.69% 1.21% 4.47%
Equity in earnings of affiliates 1.98 2.40 1.69 1.68 1.59
Net gain on dispositions 0.02 0.02 0.01 0.01 0.29
Interest income 0.04 0.04 0.03 0.02 0.03
Gain on consolidation of business 0.00 0.00 0.41 0.00 0.00
Other, net 0.07 0.01 0.07 0.07 0.09
Other income 0.11% 0.05% 0.51% 0.09% 0.12%
Interest and debt expense -0.43 -0.45 -0.43 -0.40 -0.31
Foreign currency transaction gains (losses) 0.00 0.03 0.00 0.02 -0.05
Income before income taxes 3.89% 6.68% 3.47% 2.60% 6.11%
Income tax (expense) benefit -0.75 -1.41 1.65 -0.65 -1.78
Net income 3.15% 5.27% 5.13% 1.95% 4.32%
Net income attributable to noncontrolling interests -0.28 -0.25 -0.14 -0.11 -0.05
Net income attributable to Phillips 66 2.87% 5.02% 4.99% 1.85% 4.27%

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).

An analysis of the common-size income statement reveals a period of significant volatility in cost structures and profitability margins between 2015 and 2019. The most prominent trend is the progressive increase in the cost of raw materials relative to total revenue, which has exerted pressure on gross margins.

Cost of Revenue Trends
A consistent upward trend is observed in the cost of purchased crude oil and products, which increased from 74.16% of sales in 2015 to 89.04% in 2019. Consequently, the total cost of operating revenues expanded from 78.50% to 93.76% over the same period, indicating a substantial increase in the direct costs associated with revenue generation.
Operational Expense Management
Selling, general, and administrative expenses remained relatively stable and showed a slight downward trajectory, moving from 1.69% in 2015 to 1.57% in 2019. Depreciation and amortization also remained consistent, fluctuating minimally between 1.09% and 1.39%. These figures suggest a disciplined approach to managing fixed and indirect operating costs despite the volatility in direct material costs.
Operating Income and Profitability
Gross profit margins exhibited significant volatility, reaching a low of 4.93% in 2016 before peaking at 7.76% in 2018. Operating income followed a similar pattern, dipping to 1.21% in 2016 and recovering to 4.63% in 2018, before declining again to 2.21% in 2019. This volatility underscores the company's sensitivity to the fluctuating costs of crude oil.
Net Income Performance
Net income attributable to the company showed substantial variance, ranging from a low of 1.85% in 2016 to a high of 5.02% in 2018. The fluctuations in the bottom line were influenced not only by operating margins but also by shifts in income tax impacts, which varied from a tax expense of 1.78% in 2015 to a tax benefit of 1.65% in 2017. By 2019, net income attributable to the company settled at 2.87% of sales.
Other Income and Non-Operating Items
Equity in earnings of affiliates provided a consistent positive contribution to the bottom line, generally ranging between 1.59% and 2.40%. Interest and debt expenses remained stable as a percentage of sales, fluctuating between 0.31% and 0.45%, indicating a steady debt service burden relative to revenue.

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