Name: Phillips 66 (NYSE:PSX) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Phillips 66, consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015
Net income	3,377)	5,873)	5,248)	1,644)	4,280)
Depreciation and amortization	1,341)	1,356)	1,318)	1,168)	1,078)
Impairments	861)	8)	24)	5)	7)
Accretion on discounted liabilities	23)	23)	22)	21)	21)
Deferred income taxes	183)	252)	(1,886)	612)	529)
Undistributed equity earnings	(143)	221)	(516)	(815)	185)
Net gain on dispositions	(20)	(19)	(15)	(10)	(283)
Gain on consolidation of business	—)	—)	(423)	—)	—)
Other	16)	132)	(186)	(163)	117)
Accounts and notes receivable	(2,308)	1,320)	(1,182)	(1,258)	2,129)
Inventories	(204)	(202)	(176)	216)	(144)
Prepaid expenses and other current assets	(14)	(113)	104)	(147)	324)
Accounts payable	1,941)	(1,546)	1,153)	1,579)	(2,300)
Taxes and other accruals	(245)	268)	163)	111)	(230)
Working capital adjustments	(830)	(273)	62)	501)	(221)
Adjustments to reconcile net income to net cash provided by operating activities	1,431)	1,700)	(1,600)	1,319)	1,433)
Net cash provided by operating activities	4,808)	7,573)	3,648)	2,963)	5,713)
Capital expenditures and investments	(3,873)	(2,639)	(1,832)	(2,844)	(5,764)
Proceeds from asset dispositions, includes return of investments in equity affiliates	157)	57)	86)	156)	70)
Advances/loans, related parties	(98)	(1)	(10)	(432)	(50)
Collection of advances/loans, related parties	95)	—)	326)	108)	50)
Restricted cash received from consolidation of business	—)	—)	318)	—)	—)
Other	31)	112)	(34)	(146)	(44)
Net cash used in investing activities	(3,688)	(2,471)	(1,146)	(3,158)	(5,738)
Issuance of debt	1,783)	2,184)	3,508)	2,090)	1,169)
Repayment of debt	(1,307)	(1,144)	(3,678)	(833)	(926)
Issuance of common stock	32)	39)	35)	34)	31)
Repurchase of common stock	(1,650)	(4,645)	(1,590)	(1,042)	(1,512)
Dividends paid on common stock	(1,570)	(1,436)	(1,395)	(1,282)	(1,172)
Distributions to noncontrolling interests	(241)	(207)	(120)	(75)	(46)
Net proceeds from issuance of Phillips 66 Partners LP common and preferred units	173)	128)	1,205)	972)	384)
Other	269)	(86)	(76)	(42)	(45)
Net cash used in financing activities	(2,511)	(5,167)	(2,111)	(178)	(2,117)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(14)	(35)	17)	10)	9)
Net change in cash, cash equivalents and restricted cash	(1,405)	(100)	408)	(363)	(2,133)
Cash, cash equivalents and restricted cash at beginning of year	3,019)	3,119)	2,711)	3,074)	5,207)
Cash, cash equivalents and restricted cash at end of year	1,614)	3,019)	3,119)	2,711)	3,074)

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).

The financial performance from 2015 through 2019 is characterized by significant volatility in net income and a consistent commitment to capital expenditures and shareholder returns, leading to a gradual reduction in the overall cash position.

Operating Cash Flow Dynamics: Net income exhibited substantial fluctuations, reaching a peak of 5,873 million US$ in 2018 before declining to 3,377 million US$ in 2019. Despite this volatility, net cash provided by operating activities remained positive throughout the period, peaking at 7,573 million US$ in 2018. A notable trend is the steady increase in depreciation and amortization, which grew from 1,078 million US$ in 2015 to 1,341 million US$ in 2019, providing a consistent non-cash add-back to operating cash flow. A significant impairment charge of 861 million US$ was recorded in 2019, a sharp increase compared to the minimal impairment charges seen in previous years.
Investing Activities and Capital Deployment: Investing activities were consistently cash-negative, driven primarily by capital expenditures. Spending peaked in 2015 at 5,764 million US$ and reached its lowest point in 2017 at 1,832 million US$, before trending upward again to 3,873 million US$ by 2019. This pattern indicates a cyclical approach to asset investment. Proceeds from asset dispositions remained relatively low and stable, typically ranging between 57 million US$ and 157 million US$, failing to offset the heavy capital investment requirements.
Financing Strategy and Shareholder Returns: Financing activities show a consistent outflow of cash, reflecting a strategy of returning capital to shareholders and managing debt. Dividends paid on common stock grew steadily every year, increasing from 1,172 million US$ in 2015 to 1,570 million US$ in 2019. Stock repurchases were more volatile, with a massive spike to 4,645 million US$ in 2018, coinciding with the year of highest operating cash flow. Debt management fluctuated, with a notable peak in both issuance and repayment during 2017, suggesting a refinancing event or a significant restructuring of the debt profile.
Liquidity and Cash Position: The overall liquidity position experienced a downward trend over the five-year period. Cash, cash equivalents, and restricted cash decreased from a beginning balance of 5,207 million US$ in 2015 to an ending balance of 1,614 million US$ in 2019. This decline is attributable to the combination of aggressive shareholder returns and sustained capital expenditures that frequently exceeded the cash generated from operations in several reporting periods.

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