Analysis of Solvency Ratios
Quarterly Data
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Phillips 66, solvency ratios (quarterly data)
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
- Debt to Equity
- The debt to equity ratio demonstrates a general stability with slight fluctuations over the five-year span. Initially starting at 0.41 in March 2015, it shows a minor downward trend reaching a low point of 0.38 by December 2015. Thereafter, a gradual increase is seen, peaking at 0.53 in March 2018. Post-peak, the ratio declines modestly and then stabilizes around 0.47 by the end of 2019. This suggests moderate changes in the company's capital structure, with a tendency to maintain a consistent balance between debt and shareholder equity.
- Debt to Capital
- The debt to capital ratio remains largely stable throughout the period, hovering near 0.28 to 0.29 in the initial years. An increase is noted beginning in late 2017, reaching approximately 0.35 by March 2018, indicating a relative rise in debt compared to total capital. The ratio then gradually decreases to about 0.32 towards the end of 2019. The pattern reflects a temporary increase in leverage followed by a modest reduction, signaling attention to capital structure management.
- Debt to Assets
- This ratio shows minimal variation, remaining around 0.18 to 0.20 over the entire timeframe. The consistency implies a stable proportion of assets financed by debt. There is a slight increase in early 2018 to 0.22, followed by a return to near 0.20, indicating short-term shifts in asset financing but overall conservative debt usage relative to total assets.
- Financial Leverage
- Financial leverage ratios start at approximately 2.26 in early 2015 and exhibit a minor dip until the end of that year. From 2016 onwards, the ratio trends higher, reaching peaks around 2.43 in mid-2018. Subsequently, a decline brings the leverage closer to 2.36 by the end of 2019. This pattern illustrates fluctuating degrees of reliance on borrowed funds to finance assets, with a moderate increase in leverage during 2016-2018 followed by stabilization.
- Interest Coverage
- Interest coverage ratios, available from the end of 2015, show a pronounced downward trend initially, from a high of 20.5 to a low near 7.48 in late 2016. Thereafter, a recovery is observed with values rising to around 15-16 during 2018 and 2019, before slightly declining again towards the end of 2019 to approximately 10.12. These fluctuations suggest variability in earnings relative to interest expenses, with periods of compressed coverage followed by recovery, highlighting sensitivity to interest costs and operating earnings.
Debt Ratios
Coverage Ratios
Debt to Equity
Phillips 66, debt to equity calculation (quarterly data)
| Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Short-term debt | 547) | 842) | 667) | 30) | 67) | 316) | 341) | 42) | 41) | 706) | 493) | 609) | 550) | 1,583) | 1,532) | 32) | 44) | 43) | 42) | 35) | ||||||
| Long-term debt | 11,216) | 11,083) | 10,772) | 11,268) | 11,093) | 11,021) | 11,023) | 11,579) | 10,069) | 9,495) | 9,472) | 9,601) | 9,588) | 7,275) | 7,330) | 8,803) | 8,843) | 8,908) | 8,923) | 8,914) | ||||||
| Total debt | 11,763) | 11,925) | 11,439) | 11,298) | 11,160) | 11,337) | 11,364) | 11,621) | 10,110) | 10,201) | 9,965) | 10,210) | 10,138) | 8,858) | 8,862) | 8,835) | 8,887) | 8,951) | 8,965) | 8,949) | ||||||
| Stockholders’ equity | 24,910) | 24,857) | 24,752) | 24,217) | 24,653) | 23,319) | 22,536) | 21,923) | 25,085) | 22,523) | 22,368) | 22,364) | 22,390) | 22,905) | 22,842) | 22,788) | 23,100) | 23,194) | 22,389) | 21,760) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||||
| Debt to equity1 | 0.47 | 0.48 | 0.46 | 0.47 | 0.45 | 0.49 | 0.50 | 0.53 | 0.40 | 0.45 | 0.45 | 0.46 | 0.45 | 0.39 | 0.39 | 0.39 | 0.38 | 0.39 | 0.40 | 0.41 | ||||||
| Benchmarks | ||||||||||||||||||||||||||
| Debt to Equity, Competitors2 | ||||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Occidental Petroleum Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q4 2019 Calculation
Debt to equity = Total debt ÷ Stockholders’ equity
= 11,763 ÷ 24,910 = 0.47
2 Click competitor name to see calculations.
- Total Debt
- The total debt remained relatively stable during 2015, fluctuating slightly around the 8,900 million USD mark. Entering 2016, total debt continued to hold steady with minimal variation but saw a notable increase in the last quarter, reaching over 10,100 million USD. This elevated level persisted through 2017, with total debt hovering around the 10,000 to 10,200 million USD range. In 2018, total debt increased again, peaking at approximately 11,600 million USD in the first quarter and then stabilizing slightly below this level throughout the subsequent quarters. The data for 2019 shows a generally rising trend, with total debt increasing from about 11,300 to nearly 11,900 million USD before a slight reduction towards the end of the year.
- Stockholders’ Equity
- Stockholders’ equity exhibited a gradual upward trend during 2015, increasing from roughly 21,760 million USD to over 23,000 million USD by year-end. The equity values remained relatively steady through 2016, fluctuating slightly but maintaining a position near 22,000 million USD. A sharp rise was observed in the last quarter of 2017, with equity increasing from approximately 22,500 million to over 25,000 million USD. However, in 2018, stockholders’ equity showed some volatility, initially declining to around 21,900 million USD in the first quarter followed by a recovery and growth reaching approximately 24,600 million USD by the end of the year. During 2019, equity maintained stability with a slight upward tendency, ending the year close to 24,900 million USD.
- Debt to Equity Ratio
- The debt to equity ratio was below 0.4 throughout most of 2015, indicating a relatively conservative use of debt compared to equity. In 2016, the ratio increased noticeably, particularly in the final quarter where it reached 0.45, reflecting the rise in total debt relative to equity. The ratio hovered around 0.45 in 2017 but saw a significant jump to 0.53 in the first quarter of 2018, coinciding with the surge in total debt and decrease in equity seen in the same period. Subsequently, this ratio declined and stabilized closer to 0.45 through the rest of 2018. For 2019, the ratio fluctuated between 0.46 and 0.48, demonstrating a moderately increased leverage level compared to earlier years but with less volatility than in 2018.
- Overall Analysis
- The financial data over the observed periods reveal a general increase in total debt, especially post-2015, alongside a fluctuating but overall growing shareholders’ equity. The debt to equity ratio shows periods of heightened leverage, most notably in early 2018, reflecting shifts in capital structure. Despite these fluctuations, equity has shown resilience with gradual growth by the end of 2019, suggesting an overall balanced but cautiously leveraged financial position through the analyzed periods.
Debt to Capital
Phillips 66, debt to capital calculation (quarterly data)
| Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Short-term debt | 547) | 842) | 667) | 30) | 67) | 316) | 341) | 42) | 41) | 706) | 493) | 609) | 550) | 1,583) | 1,532) | 32) | 44) | 43) | 42) | 35) | ||||||
| Long-term debt | 11,216) | 11,083) | 10,772) | 11,268) | 11,093) | 11,021) | 11,023) | 11,579) | 10,069) | 9,495) | 9,472) | 9,601) | 9,588) | 7,275) | 7,330) | 8,803) | 8,843) | 8,908) | 8,923) | 8,914) | ||||||
| Total debt | 11,763) | 11,925) | 11,439) | 11,298) | 11,160) | 11,337) | 11,364) | 11,621) | 10,110) | 10,201) | 9,965) | 10,210) | 10,138) | 8,858) | 8,862) | 8,835) | 8,887) | 8,951) | 8,965) | 8,949) | ||||||
| Stockholders’ equity | 24,910) | 24,857) | 24,752) | 24,217) | 24,653) | 23,319) | 22,536) | 21,923) | 25,085) | 22,523) | 22,368) | 22,364) | 22,390) | 22,905) | 22,842) | 22,788) | 23,100) | 23,194) | 22,389) | 21,760) | ||||||
| Total capital | 36,673) | 36,782) | 36,191) | 35,515) | 35,813) | 34,656) | 33,900) | 33,544) | 35,195) | 32,724) | 32,333) | 32,574) | 32,528) | 31,763) | 31,704) | 31,623) | 31,987) | 32,145) | 31,354) | 30,709) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||||
| Debt to capital1 | 0.32 | 0.32 | 0.32 | 0.32 | 0.31 | 0.33 | 0.34 | 0.35 | 0.29 | 0.31 | 0.31 | 0.31 | 0.31 | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 | 0.29 | 0.29 | ||||||
| Benchmarks | ||||||||||||||||||||||||||
| Debt to Capital, Competitors2 | ||||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Occidental Petroleum Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q4 2019 Calculation
Debt to capital = Total debt ÷ Total capital
= 11,763 ÷ 36,673 = 0.32
2 Click competitor name to see calculations.
- Total Debt
- The total debt moderately fluctuated over the observed periods, starting at approximately 8.95 billion USD in the first quarter of 2015 and remaining relatively stable around this level until the end of 2016. A notable increase occurred in early 2018, with debt levels reaching above 11.6 billion USD by March 2018. Following this peak, total debt slightly declined but continued to fluctuate within a range of approximately 11.1 to 11.9 billion USD through to the end of 2019.
- Total Capital
- Total capital displayed a gradual upward trend over the period assessed. Beginning at around 30.7 billion USD in the first quarter of 2015, capital increased steadily with minor variations, peaking at approximately 36.8 billion USD in the fourth quarter of 2019. This expanding capital base contrasts with the more fluctuating debt levels and suggests overall growth in the company's capitalization.
- Debt to Capital Ratio
- The debt to capital ratio demonstrated relative stability with slight variations throughout the period. Initially, the ratio remained steady at about 0.28 to 0.29 from 2015 through late 2016, indicating that debt comprised roughly 28-29% of total capital. From late 2016 to early 2018, the ratio increased noticeably, reaching a peak of 0.35 in the first quarter of 2018, which aligns with the peak seen in total debt during that period. After this peak, the ratio gradually declined and stabilized around 0.31 to 0.32 through the end of 2019, reflecting a slight improvement in the balance between debt and total capital compared to the peak values but a higher leverage relative to the levels seen in the earlier years.
Debt to Assets
Phillips 66, debt to assets calculation (quarterly data)
| Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Short-term debt | 547) | 842) | 667) | 30) | 67) | 316) | 341) | 42) | 41) | 706) | 493) | 609) | 550) | 1,583) | 1,532) | 32) | 44) | 43) | 42) | 35) | ||||||
| Long-term debt | 11,216) | 11,083) | 10,772) | 11,268) | 11,093) | 11,021) | 11,023) | 11,579) | 10,069) | 9,495) | 9,472) | 9,601) | 9,588) | 7,275) | 7,330) | 8,803) | 8,843) | 8,908) | 8,923) | 8,914) | ||||||
| Total debt | 11,763) | 11,925) | 11,439) | 11,298) | 11,160) | 11,337) | 11,364) | 11,621) | 10,110) | 10,201) | 9,965) | 10,210) | 10,138) | 8,858) | 8,862) | 8,835) | 8,887) | 8,951) | 8,965) | 8,949) | ||||||
| Total assets | 58,720) | 58,741) | 57,781) | 57,855) | 54,302) | 55,884) | 54,826) | 52,132) | 54,371) | 52,712) | 51,828) | 51,405) | 51,653) | 50,254) | 50,361) | 48,246) | 48,580) | 49,415) | 49,874) | 49,077) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||||
| Debt to assets1 | 0.20 | 0.20 | 0.20 | 0.20 | 0.21 | 0.20 | 0.21 | 0.22 | 0.19 | 0.19 | 0.19 | 0.20 | 0.20 | 0.18 | 0.18 | 0.18 | 0.18 | 0.18 | 0.18 | 0.18 | ||||||
| Benchmarks | ||||||||||||||||||||||||||
| Debt to Assets, Competitors2 | ||||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Occidental Petroleum Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q4 2019 Calculation
Debt to assets = Total debt ÷ Total assets
= 11,763 ÷ 58,720 = 0.20
2 Click competitor name to see calculations.
The financial data reveals several notable trends in the leverage and asset base over the analyzed periods.
- Total Debt
- Total debt levels demonstrated a relatively stable pattern from March 2015 through September 2016, fluctuating slightly around the 8,800 to 8,900 million USD range. Beginning in the final quarter of 2016, total debt increased more noticeably, reaching over 10,100 million USD by December 2016. This higher level of debt persisted with gradual increases and slight fluctuations, culminating in a peak of approximately 11,900 million USD in the third quarter of 2019, before a minor decrease toward year-end 2019.
- Total Assets
- Total assets showed a mild decline during the first four quarters, moving from about 49,000 million USD down to roughly 48,000 million USD by March 2016. A recovery followed, with assets increasing and fluctuating between roughly 50,000 and 54,000 million USD throughout late 2016 to late 2017. Another upward trend became evident during 2018 and 2019, with total assets climbing steadily to a range near 58,000 million USD by the end of 2019. This indicates asset growth and potential expansion or revaluation during these latter periods.
- Debt to Assets Ratio
- The debt-to-assets ratio was consistently around 0.18 in the early periods, reflecting a balanced leverage posture relative to assets. However, beginning in late 2016, there was an observable increase in leverage, with the ratio reaching about 0.20 or slightly above and maintaining this elevated level through 2019. The highest ratio levels occurred in 2018, peaking near 0.22 before slightly moderating yet remaining elevated compared to prior years. This trend suggests a strategic shift towards higher leverage or a slower growth in assets relative to debt during this timeframe.
Overall, the analysis indicates a period of relatively stable debt and assets initially, followed by increased borrowing and asset growth, resulting in a modest increase in leverage ratios. The company maintained a consistent leverage level slightly above 0.20 in the last two years, reflecting a deliberate balance between debt and assets in its capital structure.
Financial Leverage
Phillips 66, financial leverage calculation (quarterly data)
| Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Total assets | 58,720) | 58,741) | 57,781) | 57,855) | 54,302) | 55,884) | 54,826) | 52,132) | 54,371) | 52,712) | 51,828) | 51,405) | 51,653) | 50,254) | 50,361) | 48,246) | 48,580) | 49,415) | 49,874) | 49,077) | ||||||
| Stockholders’ equity | 24,910) | 24,857) | 24,752) | 24,217) | 24,653) | 23,319) | 22,536) | 21,923) | 25,085) | 22,523) | 22,368) | 22,364) | 22,390) | 22,905) | 22,842) | 22,788) | 23,100) | 23,194) | 22,389) | 21,760) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||||
| Financial leverage1 | 2.36 | 2.36 | 2.33 | 2.39 | 2.20 | 2.40 | 2.43 | 2.38 | 2.17 | 2.34 | 2.32 | 2.30 | 2.31 | 2.19 | 2.20 | 2.12 | 2.10 | 2.13 | 2.23 | 2.26 | ||||||
| Benchmarks | ||||||||||||||||||||||||||
| Financial Leverage, Competitors2 | ||||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Occidental Petroleum Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q4 2019 Calculation
Financial leverage = Total assets ÷ Stockholders’ equity
= 58,720 ÷ 24,910 = 2.36
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several noteworthy trends in the company's asset base, equity position, and financial leverage over the examined periods.
- Total assets
- The total assets demonstrated a general upward trajectory from the beginning to the end of the period, starting at approximately 49,077 million US dollars and increasing to about 58,720 million US dollars. Despite some fluctuations, the asset base showed incremental growth, with occasional periods of slight decline or stagnation, notably around the end of 2015 and early 2016. The trend from 2017 onward reflects more consistent growth, peaking near the end of 2019.
- Stockholders’ equity
- Stockholders’ equity exhibited modest variability, initially increasing from 21,760 million US dollars to a peak of approximately 25,085 million at the end of 2017. However, there was a noticeable decline following this peak, reaching a low of around 21,923 million in early 2018 before experiencing a gradual recovery. In the last few quarters, equity showed a moderate upward trend, stabilizing around the 24,910 million mark by the end of 2019.
- Financial leverage
- Financial leverage, measured as a ratio, displayed fluctuations within a relatively narrow range between 2.1 and 2.43. Early in the period, leverage decreased from 2.26 to a low of approximately 2.10, indicating a reduction in relative debt levels. However, the ratio increased again in subsequent quarters, reaching as high as 2.43 around mid-2018 before declining to approximately 2.2 at the end of 2018. Towards the end of the analyzed period, leverage settled around 2.36, suggesting a moderate and stable use of debt relative to equity.
Overall, the data reflect steady growth in total assets accompanied by some volatility in equity levels. The financial leverage ratio suggests a careful balance between debt and equity financing, with no extreme shifts indicating significant financial stress or aggressive leveraging during the observed timeline.
Interest Coverage
Phillips 66, interest coverage calculation (quarterly data)
| Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | Dec 31, 2017 | Sep 30, 2017 | Jun 30, 2017 | Mar 31, 2017 | Dec 31, 2016 | Sep 30, 2016 | Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||
| Net income attributable to Phillips 66 | 736) | 712) | 1,424) | 204) | 2,240) | 1,492) | 1,339) | 524) | 3,198) | 823) | 550) | 535) | 163) | 511) | 496) | 385) | 650) | 1,578) | 1,012) | 987) | ||||||
| Add: Net income attributable to noncontrolling interest | 74) | 81) | 80) | 66) | 76) | 76) | 65) | 61) | 57) | 26) | 31) | 28) | 31) | 25) | 20) | 13) | 16) | 14) | 13) | 10) | ||||||
| Add: Income tax expense | 256) | 150) | 325) | 70) | 602) | 407) | 431) | 132) | (2,601) | 407) | 267) | 234) | (132) | 277) | 204) | 198) | 166) | 767) | 440) | 391) | ||||||
| Add: Interest and debt expense | 115) | 109) | 115) | 119) | 121) | 125) | 135) | 123) | 114) | 112) | 107) | 105) | 88) | 81) | 83) | 86) | 74) | 71) | 79) | 86) | ||||||
| Earnings before interest and tax (EBIT) | 1,181) | 1,052) | 1,944) | 459) | 3,039) | 2,100) | 1,970) | 840) | 768) | 1,368) | 955) | 902) | 150) | 894) | 803) | 682) | 906) | 2,430) | 1,544) | 1,474) | ||||||
| Solvency Ratio | ||||||||||||||||||||||||||
| Interest coverage1 | 10.12 | 14.00 | 15.71 | 15.14 | 15.77 | 11.42 | 10.22 | 8.62 | 9.12 | 8.19 | 7.61 | 7.70 | 7.48 | 10.14 | 15.35 | 17.94 | 20.50 | — | — | — | ||||||
| Benchmarks | ||||||||||||||||||||||||||
| Interest Coverage, Competitors2 | ||||||||||||||||||||||||||
| Chevron Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| ConocoPhillips | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Exxon Mobil Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
| Occidental Petroleum Corp. | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||
Based on: 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31), 10-K (reporting date: 2017-12-31), 10-Q (reporting date: 2017-09-30), 10-Q (reporting date: 2017-06-30), 10-Q (reporting date: 2017-03-31), 10-K (reporting date: 2016-12-31), 10-Q (reporting date: 2016-09-30), 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31).
1 Q4 2019 Calculation
Interest coverage
= (EBITQ4 2019
+ EBITQ3 2019
+ EBITQ2 2019
+ EBITQ1 2019)
÷ (Interest expenseQ4 2019
+ Interest expenseQ3 2019
+ Interest expenseQ2 2019
+ Interest expenseQ1 2019)
= (1,181 + 1,052 + 1,944 + 459)
÷ (115 + 109 + 115 + 119)
= 10.12
2 Click competitor name to see calculations.
- Earnings before interest and tax (EBIT)
- The EBIT figures exhibit notable volatility over the observed periods. Initially, there is a peak in the third quarter of 2015 at 2,430 million US$, followed by a sharp decline to 150 million US$ by the end of 2016. Subsequently, a recovery trend is evident, with EBIT rising significantly to 3,039 million US$ in the last quarter of 2018, marking the highest value in the series. After this peak, EBIT again declines but remains above 1,000 million US$ in 2019, showing some instability but generally higher levels than the trough in 2016.
- Interest and debt expense
- Interest and debt expenses show a gradual increasing trend over the entire period. Starting from 86 million US$ in the first quarter of 2015, these costs increase steadily, reaching a level around 123 to 135 million US$ during 2018 and stabilizing around 115 million US$ by the end of 2019. This gradual rise suggests a possible increase in debt or interest rates impacting financing costs.
- Interest coverage ratio
- The interest coverage ratio, which measures the ability to meet interest expenses with EBIT, is only reported from the end of 2015 onward. It shows a generally decreasing trend from 20.5 to a low of 7.48 in the last quarter of 2016, reflecting the reduced EBIT and the relative stability or slight increase in interest expenses during this period. However, after 2016, the ratio improves significantly, peaking at 15.77 in the third quarter of 2018, paralleling the recovery and growth in EBIT. By the end of 2019, the ratio settles around 10.12, indicating sustained improved capacity to cover interest obligations compared to the trough period.
- Overall analysis
- The data reveals a cycle characterized by an EBIT peak in 2015 followed by a substantial decline through 2016. Interest expense incrementally rises throughout, influencing coverage ratios that fluctuate in response to EBIT volatility. The strong EBIT rebound from 2017 through 2018 enhances interest coverage significantly, suggesting improved operational performance and financial health. The subsequent moderation in EBIT and coverage in 2019 requires attention but remains at healthier levels than during the downturn phase.