Phillips 66 (NYSE:PSX)

The analyzed data reveals several noteworthy trends and insights in the company's financial performance over the five-year period ending December 31, 2019.

Cost Structure

Purchased crude oil and products increased significantly as a percentage of sales, rising from -74.16% in 2015 to -89.04% in 2019. This contributed to a rise in the total cost of operating revenues from -78.50% to -93.76% during the same period, indicating increasing input costs which likely pressured margins. Operating expenses remained relatively stable, fluctuating around -4.3% to -5.1% of sales, while selling, general and administrative expenses consistently ranged between -1.5% and -1.94% of sales.

Profitability

Gross profit experienced variability, starting at 7.58% of sales in 2015, dipping to 4.93% in 2016, then partially recovering to 7.76% in 2018 before declining again to 6.24% in 2019. Operating income followed a similar pattern, with a low point of 1.21% in 2016, a rebound to 4.63% in 2018, and a subsequent decline to 2.21% in 2019. Net income attributable to Phillips 66 reflected a similar trend, decreasing from 4.27% in 2015 to 1.85% in 2016, peaking at around 5% in 2017-2018, then falling sharply to 2.87% in 2019. These fluctuations suggest periods of margin pressure and recovery influenced by external market and cost factors.

Taxation and Other Expenses

Excise taxes on sales of petroleum products showed volatility with no data after 2018, and a peak at -15.88% of sales in 2016 before declining to -12.75% in 2017. Income tax expense was inconsistent, with a tax benefit recorded in 2017 (1.65%), contrasting with expenses in other years, indicating possible one-time adjustments or changes in tax strategies. Impairments remained minimal but spiked to -0.8% in 2019, potentially reflecting asset write-downs impacting profitability.

Operating and Other Income Components

Equity in earnings of affiliates showed gradual improvement, rising from 1.59% to 1.98%, illustrating increasing contributions from affiliated companies. Other income components such as net gain on dispositions, interest income, and other income were relatively small and stable. Interest and debt expense increased slightly, indicating marginally higher financing costs. Foreign currency transaction effects were minor and inconsistent. The gain on consolidation of business appeared only in 2017, contributing a positive 0.41% to revenues that year.

Overall Financial Health

The data indicates increasing cost pressures primarily from crude oil purchases and other operating costs, which compressed margins until partial recovery in 2018. The spike in impairments and the reduction of tax benefits in 2019 contributed to decreased net profitability. Despite these challenges, equity in earnings of affiliates and some other income sources provided some offset. The trends suggest that while the company maintained operational stability, external market conditions and cost escalations significantly influenced profitability.