Analysis of Reportable Segments
Phillips 66 operates in 4 segments: Midstream; Chemicals; Refining; and Marketing and Specialties (M&S).
Segment Profit Margin
Phillips 66, profit margin by reportable segment
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Midstream | 9.63% | 14.24% | 9.64% | 9.54% | 2.01% |
| Chemicals | 29,300.00% | 20,500.00% | 14,320.00% | 16,780.00% | 19,240.00% |
| Refining | 2.59% | 5.45% | 3.17% | 0.84% | 4.03% |
| Marketing and Specialties (M&S) | 1.95% | 2.12% | 1.39% | 1.96% | 1.59% |
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 analysis of reportable segment profit margins reveals a diverse performance profile across the business units from 2015 to 2019, characterized by high volatility in the Refining sector, steady low margins in Marketing and Specialties, and significant growth and scale in the Midstream and Chemicals sectors.
- Midstream
- A strong upward trajectory is observed from 2015 through 2018, where margins increased from 2.01% to a peak of 14.24%. This growth period was followed by a correction in 2019, with the margin returning to 9.63%.
- Chemicals
- This segment displays anomalous margin figures that far exceed the other business units. The margin decreased from 19,240.00% in 2015 to a low of 14,320.00% in 2017, followed by an aggressive expansion to 29,300.00% by the end of 2019.
- Refining
- The Refining segment exhibits significant cyclical volatility. Margins dropped from 4.03% in 2015 to a low of 0.84% in 2016, recovered to a period high of 5.45% in 2018, and subsequently declined to 2.59% in 2019.
- Marketing and Specialties (M&S)
- Profit margins for the M&S segment remained relatively stagnant and low, oscillating within a narrow range between a minimum of 1.39% in 2017 and a maximum of 2.12% in 2018, indicating a stable but low-margin operational profile.
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Segment Profit Margin: Midstream
Phillips 66; Midstream; segment profit margin calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Income (loss) before income taxes | 684) | 1,181) | 638) | 403) | 74) |
| Sales and other operating revenues | 7,103) | 8,293) | 6,620) | 4,226) | 3,676) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 9.63% | 14.24% | 9.64% | 9.54% | 2.01% |
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).
1 2019 Calculation
Segment profit margin = 100 × Income (loss) before income taxes ÷ Sales and other operating revenues
= 100 × 684 ÷ 7,103 = 9.63%
The Midstream segment exhibited a strong upward trajectory in both revenue and profitability from 2015 through 2018, followed by a contraction in 2019. During the growth phase, the segment demonstrated a capacity to increase income at a rate significantly higher than the growth in operating revenues, leading to a substantial expansion of the profit margin.
- Revenue and Income Growth Trends
- Sales and other operating revenues grew steadily from US$ 3,676 million in 2015 to a peak of US$ 8,293 million in 2018. This growth was mirrored by a sharp increase in income before income taxes, which rose from US$ 74 million in 2015 to US$ 1,181 million in 2018. In 2019, a reversal occurred, with revenues falling to US$ 7,103 million and income decreasing to US$ 684 million.
- Segment Profit Margin Evolution
- The segment profit margin increased dramatically from 2.01% in 2015 to 9.54% in 2016, remaining relatively stable at 9.64% in 2017. A peak in operational efficiency was reached in 2018, with the margin climbing to 14.24%. By 2019, the margin regressed to 9.63%, returning to levels nearly identical to those seen in 2016 and 2017.
- Operational Efficiency and Leverage
- The period between 2015 and 2018 is characterized by significant margin expansion, suggesting strong operational leverage or a transition toward more profitable revenue streams. The contraction in 2019 indicates a reduction in this efficiency, as the profit margin declined by 4.61 percentage points from its peak, coinciding with the reduction in total operating revenues.
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Segment Profit Margin: Chemicals
Phillips 66; Chemicals; segment profit margin calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Income (loss) before income taxes | 879) | 1,025) | 716) | 839) | 962) |
| Sales and other operating revenues | 3) | 5) | 5) | 5) | 5) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 29,300.00% | 20,500.00% | 14,320.00% | 16,780.00% | 19,240.00% |
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).
1 2019 Calculation
Segment profit margin = 100 × Income (loss) before income taxes ÷ Sales and other operating revenues
= 100 × 879 ÷ 3 = 29,300.00%
The Chemicals segment exhibited significant volatility in income before income taxes and an anomalous relationship between reported revenues and profitability from 2015 through 2019.
- Income Before Income Taxes
- A fluctuating trend is observed in the segment's pre-tax income. Earnings declined steadily from 962 million US dollars in 2015 to a period low of 716 million US dollars in 2017. A recovery occurred in 2018, with income peaking at 1,025 million US dollars, before retreating to 879 million US dollars by the end of 2019.
- Revenue and Profit Margin Correlation
- The reported sales and other operating revenues remained stagnant at 5 million US dollars from 2015 to 2018, before decreasing to 3 million US dollars in 2019. Because these revenue figures are disproportionately low relative to the reported income, the resulting segment profit margins are mathematically extreme, ranging from 14,320% in 2017 to 29,300% in 2019.
- Profit Margin Trends
- The segment profit margin followed the trajectory of pre-tax income between 2015 and 2018, decreasing from 19,240% to 14,320% before rising to 20,500%. A sharp increase to 29,300% was recorded in 2019, driven by the simultaneous reduction in reported operating revenues despite maintaining relatively high pre-tax income.
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Segment Profit Margin: Refining
Phillips 66; Refining; segment profit margin calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Income (loss) before income taxes | 1,986) | 4,535) | 2,076) | 435) | 2,555) |
| Sales and other operating revenues | 76,792) | 83,140) | 65,494) | 52,068) | 63,470) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 2.59% | 5.45% | 3.17% | 0.84% | 4.03% |
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).
1 2019 Calculation
Segment profit margin = 100 × Income (loss) before income taxes ÷ Sales and other operating revenues
= 100 × 1,986 ÷ 76,792 = 2.59%
The refining segment exhibited significant volatility in profitability and revenue between 2015 and 2019. Financial performance was characterized by a sharp contraction in 2016, followed by a strong recovery that peaked in 2018, and a subsequent decline in 2019.
- Revenue Trends
- Sales and other operating revenues fluctuated throughout the period, starting at 63,470 million US dollars in 2015 and dropping to a period low of 52,068 million US dollars in 2016. A substantial growth phase followed, with revenues climbing to a peak of 83,140 million US dollars in 2018 before moderating to 76,792 million US dollars by the end of 2019.
- Income Before Income Taxes
- Pre-tax income mirrored the volatility seen in revenues but with more pronounced swings. Income fell from 2,555 million US dollars in 2015 to 435 million US dollars in 2016. This was followed by a significant upward trajectory, reaching a high of 4,535 million US dollars in 2018, before falling again to 1,986 million US dollars in 2019.
- Segment Profit Margin Analysis
- The profit margin experienced extreme variance, indicating high sensitivity to external market factors. The margin declined from 4.03% in 2015 to a critical low of 0.84% in 2016. A recovery trend ensued, with the margin expanding to 3.17% in 2017 and peaking at 5.45% in 2018. However, this gain was not sustained, as the margin contracted to 2.59% in 2019, falling below the levels observed in 2015 and 2017.
Overall, the data indicates that 2018 was the strongest operational year for the refining segment in terms of both absolute revenue and margin efficiency. The sharp dip in 2016 and the contraction in 2019 highlight the cyclical and volatile nature of the segment's earnings capacity.
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Segment Profit Margin: Marketing and Specialties (M&S)
Phillips 66; Marketing and Specialties (M&S); segment profit margin calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Income (loss) before income taxes | 1,433) | 1,557) | 1,020) | 1,261) | 1,187) |
| Sales and other operating revenues | 73,616) | 73,414) | 73,565) | 64,476) | 74,591) |
| Segment Profitability Ratio | |||||
| Segment profit margin1 | 1.95% | 2.12% | 1.39% | 1.96% | 1.59% |
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).
1 2019 Calculation
Segment profit margin = 100 × Income (loss) before income taxes ÷ Sales and other operating revenues
= 100 × 1,433 ÷ 73,616 = 1.95%
The Marketing and Specialties segment exhibited fluctuating profitability and revenue patterns between 2015 and 2019, characterized by relatively thin margins typical of high-volume marketing operations. While revenue experienced a notable contraction in 2016, it stabilized thereafter, whereas pre-tax income and profit margins showed more significant volatility.
- Revenue Trends
- Sales and other operating revenues began at 74,591 million US dollars in 2015 before experiencing a sharp decline to 64,476 million US dollars in 2016. A strong recovery followed in 2017, with revenues returning to 73,565 million US dollars. For the remainder of the period, revenue remained remarkably stable, fluctuating minimally between 73,414 million and 73,616 million US dollars through 2019.
- Income before Income Taxes
- Pre-tax income demonstrated an inconsistent trajectory. After a slight increase in 2016 to 1,261 million US dollars, income dipped to a five-year low of 1,020 million US dollars in 2017. This was followed by a substantial surge to a peak of 1,557 million US dollars in 2018, before moderating to 1,433 million US dollars in 2019.
- Segment Profit Margin Analysis
- The segment profit margin remained low throughout the analyzed period, oscillating between 1.39% and 2.12%. A notable inverse correlation occurred in 2016, where the profit margin increased to 1.96% despite a significant decrease in total revenue. The margin reached its lowest point in 2017 at 1.39%, coinciding with the lowest pre-tax income of the period. The highest efficiency was achieved in 2018, with the margin peaking at 2.12%, indicating improved operational leverage or more favorable market conditions during that fiscal year.
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Segment Return on Assets (Segment ROA)
Phillips 66, ROA by reportable segment
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Midstream | 4.35% | 8.24% | 4.82% | 3.14% | 0.67% |
| Chemicals | 14.07% | 16.44% | 11.50% | 14.46% | 18.37% |
| Refining | 7.90% | 19.52% | 8.72% | 1.91% | 11.62% |
| Marketing and Specialties (M&S) | 16.55% | 23.69% | 14.36% | 20.25% | 21.08% |
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 analysis of segment return on assets (ROA) from 2015 to 2019 reveals a general trend of volatility across all business units, with a collective peak in performance occurring in 2018 followed by a universal decline in 2019.
- Midstream
- This segment exhibited a consistent upward trajectory from 2015 to 2018, with ROA increasing from 0.67% to a peak of 8.24%. However, this growth trend reversed in 2019, as the ROA decreased to 4.35%, representing a significant contraction from the previous year's high.
- Chemicals
- Returns in the Chemicals segment remained relatively stable compared to other units, though they fluctuated within a range of 11.50% to 18.37%. A gradual decline was observed between 2015 and 2017, followed by a recovery to 16.44% in 2018 and a slight moderation to 14.07% by the end of 2019.
- Refining
- The Refining segment demonstrated the highest level of volatility. After a sharp decline from 11.62% in 2015 to a low of 1.91% in 2016, the segment experienced a strong recovery, culminating in a five-year peak of 19.52% in 2018. This was followed by a sharp correction to 7.90% in 2019.
- Marketing and Specialties (M&S)
- M&S consistently maintained the highest ROA of all segments for the majority of the period. Despite a dip to 14.36% in 2017, the segment achieved its highest return of 23.69% in 2018. Performance normalized to 16.55% in 2019, remaining a primary driver of asset efficiency.
Overall, the data indicates that while Marketing and Specialties provided the most consistent high-end returns, the Refining and Midstream segments were more susceptible to significant periodic swings. The synchronization of the 2018 peak across all four segments suggests the influence of broader macroeconomic factors impacting asset productivity during that period.
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Segment ROA: Midstream
Phillips 66; Midstream; segment ROA calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Income (loss) before income taxes | 684) | 1,181) | 638) | 403) | 74) |
| Total assets | 15,716) | 14,329) | 13,231) | 12,832) | 11,043) |
| Segment Profitability Ratio | |||||
| Segment ROA1 | 4.35% | 8.24% | 4.82% | 3.14% | 0.67% |
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).
1 2019 Calculation
Segment ROA = 100 × Income (loss) before income taxes ÷ Total assets
= 100 × 684 ÷ 15,716 = 4.35%
The Midstream segment demonstrated a strong growth trajectory in both earnings and asset utilization from 2015 through 2018, followed by a notable contraction in profitability during 2019.
- Pre-tax Income Trends
- Earnings before income taxes exhibited a sharp upward trajectory, increasing from 74 million USD in 2015 to a peak of 1,181 million USD in 2018. This period of expansion was interrupted in 2019, when income decreased to 684 million USD, representing a significant reduction from the previous year's peak.
- Asset Base Expansion
- Total assets grew consistently throughout the analyzed period, rising from 11,043 million USD in 2015 to 15,716 million USD in 2019. This steady increase indicates a sustained commitment to capital investment and infrastructure expansion within the segment.
- Segment Return on Assets (ROA)
- The ROA mirrored the trend of pre-tax income, climbing from a marginal 0.67% in 2015 to a peak of 8.24% in 2018. This suggests a period of rapidly increasing operational efficiency and profitability relative to the asset base. However, in 2019, the ROA fell to 4.35%, as the decline in income occurred alongside a continuing increase in total assets, thereby compressing the return ratio.
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Segment ROA: Chemicals
Phillips 66; Chemicals; segment ROA calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Income (loss) before income taxes | 879) | 1,025) | 716) | 839) | 962) |
| Total assets | 6,249) | 6,235) | 6,226) | 5,802) | 5,237) |
| Segment Profitability Ratio | |||||
| Segment ROA1 | 14.07% | 16.44% | 11.50% | 14.46% | 18.37% |
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).
1 2019 Calculation
Segment ROA = 100 × Income (loss) before income taxes ÷ Total assets
= 100 × 879 ÷ 6,249 = 14.07%
The Chemicals segment exhibited volatility in profitability and asset utilization between 2015 and 2019, characterized by an initial decline in efficiency followed by a partial recovery and subsequent correction.
- Asset Base Trends
- Total assets experienced a steady upward trajectory from 2015 to 2017, increasing from US$ 5,237 million to US$ 6,226 million. Following this growth phase, the asset base entered a period of stability, remaining nearly constant through 2018 and 2019, ending the period at US$ 6,249 million.
- Income Performance
- Pre-tax income showed significant fluctuations, declining from US$ 962 million in 2015 to a period low of US$ 716 million in 2017. A sharp recovery was recorded in 2018, with income reaching a peak of US$ 1,025 million, before decreasing to US$ 879 million in 2019.
- Segment ROA Analysis
- The Return on Assets (ROA) followed a pattern closely linked to income volatility and asset growth. A downward trend was observed from 2015 to 2017, where ROA fell from 18.37% to 11.50%, driven by the combination of falling income and an expanding asset base. The ratio rebounded to 16.44% in 2018 as income increased while assets remained flat. By 2019, the ROA declined again to 14.07%, reflecting the reduction in pre-tax income relative to the stable asset base.
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Segment ROA: Refining
Phillips 66; Refining; segment ROA calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Income (loss) before income taxes | 1,986) | 4,535) | 2,076) | 435) | 2,555) |
| Total assets | 25,150) | 23,230) | 23,820) | 22,825) | 21,993) |
| Segment Profitability Ratio | |||||
| Segment ROA1 | 7.90% | 19.52% | 8.72% | 1.91% | 11.62% |
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).
1 2019 Calculation
Segment ROA = 100 × Income (loss) before income taxes ÷ Total assets
= 100 × 1,986 ÷ 25,150 = 7.90%
The refining segment exhibited significant volatility in profitability and asset efficiency between 2015 and 2019. While the asset base maintained a consistent upward trajectory, pre-tax income and the resulting Return on Assets (ROA) experienced sharp fluctuations, indicating a high sensitivity to external market conditions or operational variables.
- Income Before Income Taxes
- Earnings demonstrated a cyclical pattern over the five-year period. After a strong start in 2015 at 2,555 million USD, income plummeted to a period low of 435 million USD in 2016. A recovery followed, culminating in a peak of 4,535 million USD in 2018, before retreating to 1,986 million USD in 2019.
- Total Asset Base
- The segment's asset base showed steady growth, increasing from 21,993 million USD in 2015 to 25,150 million USD by 2019. This gradual expansion suggests consistent capital investment in the refining infrastructure, despite the volatility observed in annual earnings.
- Segment Return on Assets (ROA)
- The Segment ROA mirrored the volatility of pre-tax income due to the relative stability of the asset base. The ratio dropped sharply from 11.62% in 2015 to 1.91% in 2016, representing the lowest efficiency point in the period. Performance improved significantly to reach a peak of 19.52% in 2018, before declining to 7.90% in 2019.
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Segment ROA: Marketing and Specialties (M&S)
Phillips 66; Marketing and Specialties (M&S); segment ROA calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Income (loss) before income taxes | 1,433) | 1,557) | 1,020) | 1,261) | 1,187) |
| Total assets | 8,659) | 6,572) | 7,103) | 6,227) | 5,631) |
| Segment Profitability Ratio | |||||
| Segment ROA1 | 16.55% | 23.69% | 14.36% | 20.25% | 21.08% |
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).
1 2019 Calculation
Segment ROA = 100 × Income (loss) before income taxes ÷ Total assets
= 100 × 1,433 ÷ 8,659 = 16.55%
The Marketing and Specialties (M&S) segment exhibited significant volatility in asset utilization and profitability between 2015 and 2019. While income before taxes generally trended upward over the five-year period, the Return on Assets (ROA) fluctuated, reflecting a non-linear relationship between the expansion of the asset base and earnings generation.
- Income Performance
- Earnings before income taxes showed a fluctuating growth trajectory, rising from US$ 1,187 million in 2015 to US$ 1,433 million in 2019. A notable peak occurred in 2018, where income reached US$ 1,557 million, representing a recovery from a period low of US$ 1,020 million recorded in 2017.
- Asset Base Evolution
- Total assets grew substantially from US$ 5,631 million in 2015 to US$ 8,659 million in 2019. This expansion was characterized by a steady increase through 2017, a moderate contraction to US$ 6,572 million in 2018, and a sharp acceleration in asset accumulation during 2019.
- Return on Assets (ROA) Analysis
- The segment ROA demonstrated a cyclical pattern, with a peak of 23.69% in 2018 and a minimum of 14.36% in 2017. The 2018 peak resulted from the convergence of the highest recorded income and a reduced asset base. Conversely, the ROA declined to 16.55% in 2019, as a rapid increase in total assets outpaced income growth, leading to a reduction in overall asset efficiency.
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Segment Asset Turnover
Phillips 66, asset turnover by reportable segment
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Midstream | 0.45 | 0.58 | 0.50 | 0.33 | 0.33 |
| Chemicals | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Refining | 3.05 | 3.58 | 2.75 | 2.28 | 2.89 |
| Marketing and Specialties (M&S) | 8.50 | 11.17 | 10.36 | 10.35 | 13.25 |
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).
The asset turnover ratios across the reportable segments demonstrate significant variance in capital intensity and operational efficiency. The Marketing and Specialties segment consistently maintains the highest asset turnover, indicating an asset-light business model, while the Midstream and Chemicals segments exhibit the lowest turnover, characteristic of more capital-intensive operations.
- Marketing and Specialties (M&S)
- This segment exhibits the highest asset utilization efficiency throughout the period. A notable decline occurred between 2015 and 2016, where the ratio dropped from 13.25 to 10.35. After a period of relative stability and a modest recovery to 11.17 in 2018, a significant downward trend is observed in 2019, reaching a five-year low of 8.50.
- Refining
- The Refining segment shows cyclical volatility in asset efficiency. After a decrease from 2.89 in 2015 to 2.28 in 2016, the ratio trended upward, peaking at 3.58 in 2018. This growth was followed by a contraction to 3.05 in 2019, though the ending ratio remains higher than the 2016 trough.
- Midstream
- Asset turnover in the Midstream segment remained stagnant at 0.33 through 2016 before experiencing a period of growth. The ratio climbed to 0.50 in 2017 and peaked at 0.58 in 2018. A subsequent decline to 0.45 occurred in 2019, though the overall trajectory remains positive relative to the 2015 baseline.
- Chemicals
- The Chemicals segment reported a constant asset turnover ratio of 0.00 from 2015 through 2019, indicating a lack of revenue generation relative to the assets allocated to this segment during the observed timeframe.
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Segment Asset Turnover: Midstream
Phillips 66; Midstream; segment asset turnover calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Sales and other operating revenues | 7,103) | 8,293) | 6,620) | 4,226) | 3,676) |
| Total assets | 15,716) | 14,329) | 13,231) | 12,832) | 11,043) |
| Segment Activity Ratio | |||||
| Segment asset turnover1 | 0.45 | 0.58 | 0.50 | 0.33 | 0.33 |
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).
1 2019 Calculation
Segment asset turnover = Sales and other operating revenues ÷ Total assets
= 7,103 ÷ 15,716 = 0.45
The Midstream segment exhibited significant volatility in revenue generation and asset efficiency between 2015 and 2019, characterized by a period of rapid expansion followed by a contraction in turnover efficiency.
- Revenue Performance
- Sales and other operating revenues demonstrated a strong upward trajectory from 2015 to 2018, increasing from 3,676 million US$ to a peak of 8,293 million US$. This represents a substantial growth phase in the segment's top-line performance. However, this trend reversed in 2019, with revenues declining to 7,103 million US$.
- Asset Base Expansion
- Total assets showed a consistent and linear increase throughout the five-year period. The asset base grew from 11,043 million US$ in 2015 to 15,716 million US$ by 2019. This steady climb indicates ongoing capital investment in the Midstream segment regardless of the fluctuations in annual revenue.
- Segment Asset Turnover Efficiency
- The asset turnover ratio remained stagnant at 0.33 between 2015 and 2016, reflecting a period where asset growth and revenue growth were proportional. A marked improvement in efficiency occurred between 2017 and 2018, where the ratio climbed to 0.50 and then to 0.58, signaling that revenue growth significantly outpaced the expansion of the asset base. In 2019, the ratio fell to 0.45, a result of the simultaneous decline in operating revenues and the continued increase in total assets.
The data indicates that while the segment successfully scaled its revenue-generating capacity up to 2018, the 2019 fiscal year saw a divergence where capital investments continued to grow while revenue contracted, leading to a decrease in overall asset utilization efficiency.
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Segment Asset Turnover: Chemicals
Phillips 66; Chemicals; segment asset turnover calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Sales and other operating revenues | 3) | 5) | 5) | 5) | 5) |
| Total assets | 6,249) | 6,235) | 6,226) | 5,802) | 5,237) |
| Segment Activity Ratio | |||||
| Segment asset turnover1 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
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).
1 2019 Calculation
Segment asset turnover = Sales and other operating revenues ÷ Total assets
= 3 ÷ 6,249 = 0.00
The Chemicals segment demonstrates a profound disconnect between its asset base and its revenue-generating capacity over the five-year period from 2015 to 2019. The operational output of the segment is negligible relative to the capital invested in its assets, resulting in a consistently stagnant asset turnover ratio.
- Revenue Performance
- Annual sales and other operating revenues remained static at 5 million US dollars from 2015 through 2018, before declining to 3 million US dollars in 2019. This trajectory indicates a lack of operational growth and a slight contraction in the final year of the observed period.
- Asset Base Evolution
- Total assets exhibited a consistent upward trend, rising from 5,237 million US dollars in 2015 to 6,249 million US dollars by 2019. The most pronounced expansion occurred between 2015 and 2017, with the growth rate plateauing in 2018 and 2019.
- Asset Turnover Efficiency
- The segment asset turnover ratio remained constant at 0.00 throughout the entire period. This lack of movement is attributed to the extreme disparity between the multi-billion dollar asset base and the minimal revenue generated, signaling that the assets within this segment are not currently utilized to produce meaningful sales volume.
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Segment Asset Turnover: Refining
Phillips 66; Refining; segment asset turnover calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Sales and other operating revenues | 76,792) | 83,140) | 65,494) | 52,068) | 63,470) |
| Total assets | 25,150) | 23,230) | 23,820) | 22,825) | 21,993) |
| Segment Activity Ratio | |||||
| Segment asset turnover1 | 3.05 | 3.58 | 2.75 | 2.28 | 2.89 |
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).
1 2019 Calculation
Segment asset turnover = Sales and other operating revenues ÷ Total assets
= 76,792 ÷ 25,150 = 3.05
The Refining segment's asset utilization exhibits a volatile trend between 2015 and 2019, primarily driven by fluctuations in sales and other operating revenues while the asset base remained relatively stable.
- Revenue Trends
- Sales and other operating revenues demonstrated significant volatility, starting at 63,470 million US$ in 2015 and reaching a low of 52,068 million US$ in 2016. A strong recovery followed, peaking at 83,140 million US$ in 2018 before declining to 76,792 million US$ in 2019.
- Asset Base Evolution
- Total assets grew steadily from 21,993 million US$ in 2015 to 25,150 million US$ in 2019. With the exception of a slight decrease in 2018, the segment expanded its asset footprint consistently over the five-year period.
- Asset Turnover Analysis
- The segment asset turnover ratio fluctuated in alignment with revenue shifts. A decline to 2.28 in 2016 reflects the impact of reduced revenues on asset efficiency. Efficiency improved significantly to a peak of 3.58 in 2018, representing the highest rate of revenue generation per unit of asset. In 2019, the ratio moderated to 3.05, resulting from the confluence of lower annual revenues and a higher total asset base.
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Segment Asset Turnover: Marketing and Specialties (M&S)
Phillips 66; Marketing and Specialties (M&S); segment asset turnover calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Sales and other operating revenues | 73,616) | 73,414) | 73,565) | 64,476) | 74,591) |
| Total assets | 8,659) | 6,572) | 7,103) | 6,227) | 5,631) |
| Segment Activity Ratio | |||||
| Segment asset turnover1 | 8.50 | 11.17 | 10.36 | 10.35 | 13.25 |
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).
1 2019 Calculation
Segment asset turnover = Sales and other operating revenues ÷ Total assets
= 73,616 ÷ 8,659 = 8.50
The Marketing and Specialties segment exhibited a general decline in asset utilization efficiency between 2015 and 2019. While revenues remained relatively stable over the long term, a consistent increase in the asset base led to a compression of the segment asset turnover ratio.
- Revenue Trends
- Sales and other operating revenues experienced an initial decline of approximately 13.5% between 2015 and 2016, dropping from 74,591 million to 64,476 million. However, a recovery occurred in 2017, with revenues returning to 73,565 million and remaining nearly stagnant through 2019, ending at 73,616 million. This indicates a period of revenue plateau following the 2016 volatility.
- Asset Base Expansion
- Total assets for the segment showed a general upward trajectory, increasing from 5,631 million in 2015 to 8,659 million in 2019. Although there was a slight contraction in 2018 to 6,572 million, the period concluded with a significant asset surge in 2019, representing a 53.8% increase in the total asset base over the five-year duration.
- Asset Turnover Performance
- The segment asset turnover ratio decreased from 13.25 in 2015 to 8.50 in 2019. The most significant drops occurred in 2016 and 2019. The decline in 2016 was driven by the simultaneous drop in revenue and increase in assets. The sharp decrease in 2019 was primarily the result of substantial asset growth occurring without a corresponding increase in operating revenues, suggesting a reduction in the efficiency with which the segment generates sales from its invested capital.
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Segment Capital Expenditures to Depreciation
Phillips 66, capital expenditures to depreciation by reportable segment
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Midstream | 1.97 | 4.75 | 2.58 | 6.67 | 34.82 |
| Chemicals | — | — | — | — | — |
| Refining | 1.17 | 0.98 | 1.02 | 1.49 | 1.44 |
| Marketing and Specialties (M&S) | 3.63 | 1.10 | 0.93 | 0.92 | 1.22 |
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 analysis of capital expenditures relative to depreciation across reportable segments reveals divergent investment strategies, shifting from aggressive expansion in some areas to steady-state maintenance in others.
- Midstream
- A significant downward trend is observed, with the ratio falling from a peak of 34.82 in 2015 to 1.97 by 2019. This sharp decline suggests a transition from a period of intensive capital deployment and infrastructure growth to a phase focused on sustaining existing assets.
- Refining
- Investment levels remained relatively stable throughout the period, with the ratio fluctuating within a narrow range between 0.98 and 1.49. The proximity of these values to 1.0 indicates that capital expenditures were generally aligned with depreciation, reflecting a strategy of asset replacement and maintenance.
- Marketing and Specialties (M&S)
- The ratio remained consistent between 0.92 and 1.22 from 2015 through 2018, mirroring the maintenance pattern seen in Refining. However, a notable increase occurred in 2019, where the ratio rose to 3.63, signaling a substantial acceleration in capital investment relative to asset depreciation.
- Chemicals
- No data is available for this segment during the analyzed period.
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Segment Capital Expenditures to Depreciation: Midstream
Phillips 66; Midstream; segment capital expenditures to depreciation calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures and investments | 2,292) | 1,548) | 771) | 1,453) | 4,457) |
| Depreciation, amortization and impairments | 1,162) | 326) | 299) | 218) | 128) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 1.97 | 4.75 | 2.58 | 6.67 | 34.82 |
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).
1 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures and investments ÷ Depreciation, amortization and impairments
= 2,292 ÷ 1,162 = 1.97
Between 2015 and 2019, the Midstream segment exhibited a volatile investment cycle characterized by an initial period of aggressive capital expansion followed by a transition toward stabilization and a significant increase in asset depreciation.
- Capital Expenditure Trends
- Investment levels peaked in 2015 at US$ 4,457 million, representing a period of intense capital deployment. This was followed by a sharp contraction, reaching a low of US$ 771 million in 2017. A moderate recovery trend emerged thereafter, with expenditures rising to US$ 1,548 million in 2018 and US$ 2,292 million in 2019.
- Depreciation, Amortization, and Impairments
- A consistent upward trend in depreciation and impairments is observed from 2015 through 2018, moving from US$ 128 million to US$ 326 million. A substantial surge occurred in 2019, where the value increased to US$ 1,162 million, suggesting that previous large-scale investments had fully entered service or that significant impairment charges were recognized.
- Capital Expenditures to Depreciation Ratio
- The ratio demonstrated a severe downward trajectory over the five-year period. Starting at an exceptionally high 34.82 in 2015, the ratio fell to 2.58 by 2017. Despite a temporary increase to 4.75 in 2018, the ratio reached its lowest point of 1.97 in 2019. This pattern indicates a strategic shift from aggressive growth and asset acquisition to a phase focused on maintenance and the depreciation of a now-expanded asset base.
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Segment Capital Expenditures to Depreciation: Chemicals
Phillips 66; Chemicals; segment capital expenditures to depreciation calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures and investments | —) | —) | —) | —) | —) |
| Depreciation, amortization and impairments | —) | —) | —) | —) | —) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | — | — | — | — | — |
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).
1 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures and investments ÷ Depreciation, amortization and impairments
= 0 ÷ 0 = —
An analysis of the Chemicals segment's investment trends and asset maintenance cannot be conducted as no numerical values were reported for the period spanning December 31, 2015, to December 31, 2019.
- Investment and Depreciation Metrics
- Information regarding capital expenditures and investments, as well as depreciation, amortization, and impairments, is missing for all fiscal years in the analyzed timeframe.
- Capital Expenditures to Depreciation Ratio
- Due to the lack of primary financial inputs, the ratio of segment capital expenditures to depreciation cannot be determined, preventing an assessment of whether the segment was expanding, maintaining, or contracting its asset base.
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Segment Capital Expenditures to Depreciation: Refining
Phillips 66; Refining; segment capital expenditures to depreciation calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures and investments | 1,001) | 826) | 853) | 1,149) | 1,069) |
| Depreciation, amortization and impairments | 857) | 841) | 838) | 770) | 741) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 1.17 | 0.98 | 1.02 | 1.49 | 1.44 |
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).
1 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures and investments ÷ Depreciation, amortization and impairments
= 1,001 ÷ 857 = 1.17
The financial trajectory of the Refining segment from 2015 to 2019 is characterized by fluctuating investment levels against a backdrop of steadily increasing depreciation expenses. The relationship between capital expenditures and depreciation suggests a transition from aggressive investment to a period of asset maintenance, followed by a recovery in capital spending.
- Capital Expenditure Trends
- Investment levels peaked in 2016 at 1,149 million USD before experiencing a notable decline in 2017 and 2018, reaching a five-year low of 826 million USD. A recovery occurred in 2019, with expenditures rising to 1,001 million USD.
- Depreciation and Amortization Patterns
- Depreciation, amortization, and impairments exhibited a consistent upward trend throughout the period, rising from 741 million USD in 2015 to 857 million USD in 2019. This steady increase indicates a growing base of depreciable assets or a shift in the aging of existing infrastructure.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio fluctuated from a high of 1.49 in 2016 to a low of 0.98 in 2018. The period between 2015 and 2016 reflected a strategy of expanding the asset base, as expenditures significantly exceeded depreciation. The subsequent decline to 0.98 in 2018 indicates that capital spending fell below the rate of asset depletion, signaling a temporary contraction in reinvestment. By 2019, the ratio improved to 1.17, suggesting a return to investment levels that exceed the annual depreciation charge.
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Segment Capital Expenditures to Depreciation: Marketing and Specialties (M&S)
Phillips 66; Marketing and Specialties (M&S); segment capital expenditures to depreciation calculation
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Capital expenditures and investments | 374) | 125) | 108) | 98) | 122) |
| Depreciation, amortization and impairments | 103) | 114) | 116) | 107) | 100) |
| Segment Financial Ratio | |||||
| Segment capital expenditures to depreciation1 | 3.63 | 1.10 | 0.93 | 0.92 | 1.22 |
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).
1 2019 Calculation
Segment capital expenditures to depreciation = Capital expenditures and investments ÷ Depreciation, amortization and impairments
= 374 ÷ 103 = 3.63
The Marketing and Specialties segment exhibited a period of relative stability in capital allocation from 2015 through 2018, followed by a substantial acceleration in investment activity during 2019.
- Capital Expenditure Patterns
- Annual capital expenditures and investments remained relatively flat between 2016 and 2018, ranging from US$ 98 million to US$ 125 million. A significant shift occurred in 2019, where expenditures rose sharply to US$ 374 million, marking a substantial departure from the previous four-year trend.
- Depreciation and Impairment Trends
- Depreciation, amortization, and impairments demonstrated consistent levels throughout the analyzed period, staying within a tight range of US$ 100 million to US$ 116 million. This stability suggests a steady rate of asset consumption and a consistent baseline of depreciable assets within the segment.
- Capital Expenditures to Depreciation Ratio
- Between 2015 and 2018, the ratio fluctuated near 1.0, moving from 1.22 in 2015 to a low of 0.92 in 2016, and returning to 1.10 by 2018. This indicates that investment levels were primarily focused on maintaining the existing asset base. However, the ratio increased dramatically to 3.63 in 2019, reflecting a strategic shift toward aggressive expansion or significant modernization, as capital investments far outpaced the depreciation of current assets.
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Sales and other operating revenues
Phillips 66, sales and other operating revenues by reportable segment
US$ in millions
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Midstream | 7,103) | 8,293) | 6,620) | 4,226) | 3,676) |
| Chemicals | 3) | 5) | 5) | 5) | 5) |
| Refining | 76,792) | 83,140) | 65,494) | 52,068) | 63,470) |
| Marketing and Specialties (M&S) | 73,616) | 73,414) | 73,565) | 64,476) | 74,591) |
| Intersegment eliminations | (50,249) | (53,418) | (43,359) | (36,528) | (42,797) |
| Corporate and other | 28) | 27) | 29) | 32) | 30) |
| Consolidated | 107,293) | 111,461) | 102,354) | 84,279) | 98,975) |
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).
Consolidated sales and other operating revenues exhibited a volatile but generally upward trajectory between 2015 and 2018, before experiencing a slight contraction in 2019. Total revenues grew from 98,975 million US dollars in 2015 to a peak of 111,461 million US dollars in 2018, representing a total increase of approximately 12.6% over that period, despite a significant dip in 2016.
- Refining Segment Performance
- The refining segment demonstrated significant volatility in revenue generation. After a decline to 52,068 million US dollars in 2016, revenues surged to a peak of 83,140 million US dollars in 2018. This segment's fluctuations are a primary driver of the overall consolidated revenue variance, with a subsequent decrease to 76,792 million US dollars in 2019.
- Marketing and Specialties (M&S) Stability
- The M&S segment remained the largest contributor to gross revenues for most of the analyzed period. While it experienced a contraction in 2016 to 64,476 million US dollars, it recovered quickly and remained remarkably stable from 2017 through 2019, hovering around 73,500 million US dollars.
- Midstream Growth Trajectory
- A consistent expansion pattern is observed in the Midstream segment. Revenues increased steadily from 3,676 million US dollars in 2015 to 8,293 million US dollars in 2018. Although there was a decline to 7,103 million US dollars in 2019, the segment ended the period significantly larger than its 2015 baseline.
- Intersegment Eliminations and Other Items
- Intersegment eliminations grew in magnitude as the operational scale of the refining and M&S segments increased, peaking at -53,418 million US dollars in 2018. This indicates a high degree of internal integration and product flow between business units. Chemicals and Corporate and other revenues remained immaterial to the overall financial position, with Chemicals declining from 5 million to 3 million US dollars by 2019.
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Depreciation, amortization and impairments
Phillips 66, depreciation, amortization and impairments by reportable segment
US$ in millions
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Midstream | 1,162) | 326) | 299) | 218) | 128) |
| Chemicals | —) | —) | —) | —) | —) |
| Refining | 857) | 841) | 838) | 770) | 741) |
| Marketing and Specialties (M&S) | 103) | 114) | 116) | 107) | 100) |
| Corporate and other | 80) | 83) | 89) | 78) | 116) |
| Consolidated | 2,202) | 1,364) | 1,342) | 1,173) | 1,085) |
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).
Consolidated depreciation, amortization, and impairment expenses exhibited a significant upward trajectory between 2015 and 2019, increasing from 1,085 million US dollars to 2,202 million US dollars. The growth was relatively moderate until 2019, where a substantial increase occurred, contributing to a total increase of approximately 102% over the five-year period.
- Midstream Segment
- The Midstream segment demonstrated the most dramatic growth pattern. Expenses rose from 128 million US dollars in 2015 to 326 million US dollars in 2018 before surging to 1,162 million US dollars in 2019. This sharp acceleration in the final year indicates a major change in the asset base, likely due to significant capital expenditures or substantial impairment charges.
- Refining Segment
- Refining represented the largest consistent component of the total expenses. A steady, linear increase is observed, moving from 741 million US dollars in 2015 to 857 million US dollars in 2019. This suggests a stable investment cycle and consistent asset depreciation within the refining operations.
- Marketing and Specialties (M&S) and Corporate Segments
- The Marketing and Specialties segment remained relatively stable, with values fluctuating minimally between 100 million and 116 million US dollars. The Corporate and other segment showed a general downward trend, decreasing from 116 million US dollars in 2015 to 80 million US dollars in 2019.
- Chemicals Segment
- No financial values were reported for the Chemicals segment for any of the years within the analyzed period.
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Income (loss) before income taxes
Phillips 66, income (loss) before income taxes by reportable segment
US$ in millions
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Midstream | 684) | 1,181) | 638) | 403) | 74) |
| Chemicals | 879) | 1,025) | 716) | 839) | 962) |
| Refining | 1,986) | 4,535) | 2,076) | 435) | 2,555) |
| Marketing and Specialties (M&S) | 1,433) | 1,557) | 1,020) | 1,261) | 1,187) |
| Corporate and other | (804) | (853) | (895) | (747) | (498) |
| Consolidated | 4,178) | 7,445) | 3,555) | 2,191) | 4,280) |
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).
Consolidated income before income taxes exhibited significant volatility between 2015 and 2019, characterized by a substantial peak in 2018 followed by a contraction in 2019. The overall financial performance is heavily influenced by the cyclical nature of the refining segment, which acts as the primary driver of consolidated fluctuations.
- Refining Segment Performance
- This segment demonstrates the highest level of volatility among all reportable segments. Income experienced a sharp decline from 2,555 million US$ in 2015 to 435 million US$ in 2016, before recovering strongly to a peak of 4,535 million US$ in 2018. A subsequent decline to 1,986 million US$ in 2019 suggests a high sensitivity to market conditions.
- Midstream Growth Trends
- A consistent upward trajectory was observed from 2015 through 2018, with income rising from 74 million US$ to 1,181 million US$. This represents a period of aggressive expansion or operational improvement, although this trend reversed in 2019 with a decrease to 684 million US$.
- Marketing and Specialties (M&S) and Chemicals Stability
- The M&S segment provided a relatively stable contribution to total income, maintaining a range between 1,020 million US$ and 1,557 million US$ over the five-year period. The Chemicals segment similarly displayed moderate fluctuations, with income oscillating between 716 million US$ and 1,025 million US$, reflecting a more predictable earnings pattern than the refining business.
- Corporate and Other Expenses
- Corporate and other items remained consistently negative throughout the analyzed period, acting as a constant drag on consolidated income. The losses expanded from 498 million US$ in 2015 to a peak loss of 895 million US$ in 2017, before stabilizing around 804 million US$ by 2019.
The consolidated financial results indicate a heavy reliance on the refining segment for profit maximization, while the Midstream and M&S segments provide diversifying growth and stability, respectively. The peak consolidated income of 7,445 million US$ in 2018 was the result of synchronized strong performance across the Refining, Midstream, and M&S segments.
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Total assets
Phillips 66, total assets by reportable segment
US$ in millions
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Midstream | 15,716) | 14,329) | 13,231) | 12,832) | 11,043) |
| Chemicals | 6,249) | 6,235) | 6,226) | 5,802) | 5,237) |
| Refining | 25,150) | 23,230) | 23,820) | 22,825) | 21,993) |
| Marketing and Specialties (M&S) | 8,659) | 6,572) | 7,103) | 6,227) | 5,631) |
| Corporate and other | 2,946) | 3,936) | 3,991) | 3,967) | 4,676) |
| Consolidated | 58,720) | 54,302) | 54,371) | 51,653) | 48,580) |
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).
Consolidated total assets exhibited a steady upward trajectory over the five-year period, increasing from 48,580 million USD at the end of 2015 to 58,720 million USD by the end of 2019. This overall growth reflects a strategic expansion of the asset base, primarily driven by the Midstream and Marketing and Specialties segments.
- Midstream Assets
- A consistent and uninterrupted growth pattern is observed in this segment. Assets rose from 11,043 million USD in 2015 to 15,716 million USD in 2019, representing the most stable growth rate among all reportable segments.
- Refining Assets
- This segment represents the largest portion of the total asset base. While assets grew from 21,993 million USD in 2015 to 25,150 million USD in 2019, a slight contraction occurred in 2018, where assets dipped to 23,230 million USD before recovering strongly in the final year.
- Marketing and Specialties (M&S) Assets
- Significant expansion occurred in this segment, increasing from 5,631 million USD in 2015 to 8,659 million USD in 2019. Similar to the refining segment, a temporary decline was noted in 2018, falling to 6,572 million USD from a 2017 peak of 7,103 million USD, followed by a substantial increase in 2019.
- Chemicals Assets
- Growth in this segment was concentrated in the early part of the period, rising from 5,237 million USD in 2015 to 6,226 million USD in 2017. Following 2017, asset values remained virtually stagnant, ending 2019 at 6,249 million USD.
- Corporate and Other Assets
- A sustained downward trend is evident in this category. Assets decreased from 4,676 million USD in 2015 to 2,946 million USD in 2019, suggesting a reduction in non-segment specific holdings or a streamlining of corporate overhead assets.
The shift in asset allocation indicates a strategic pivot toward Midstream and Marketing and Specialties, while the Refining segment maintains its role as the primary asset driver. The concurrent decline in corporate and other assets further emphasizes a focus on operational segment growth over general corporate holdings.
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Capital expenditures and investments
Phillips 66, capital expenditures and investments by reportable segment
US$ in millions
| Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | Dec 31, 2016 | Dec 31, 2015 | |
|---|---|---|---|---|---|
| Midstream | 2,292) | 1,548) | 771) | 1,453) | 4,457) |
| Chemicals | —) | —) | —) | —) | —) |
| Refining | 1,001) | 826) | 853) | 1,149) | 1,069) |
| Marketing and Specialties (M&S) | 374) | 125) | 108) | 98) | 122) |
| Corporate and other | 206) | 140) | 100) | 144) | 116) |
| Consolidated | 3,873) | 2,639) | 1,832) | 2,844) | 5,764) |
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).
Consolidated capital expenditures exhibited a significant U-shaped trend over the five-year period. Total investment peaked in 2015 at 5,764 million US$, followed by a sharp contraction to a low of 1,832 million US$ in 2017. A recovery phase followed, with expenditures rising steadily to 3,873 million US$ by the end of 2019.
- Midstream Segment
- This segment served as the primary driver of overall capital expenditure volatility. After a high of 4,457 million US$ in 2015, spending decreased substantially over the next two years, reaching a minimum of 771 million US$ in 2017. A reversal of this trend occurred in 2018 and 2019, with investments increasing to 2,292 million US$.
- Refining Segment
- Investment in refining remained relatively stable compared to other segments. Expenditures fluctuated within a narrow range, starting at 1,069 million US$ in 2015, dipping to 826 million US$ in 2018, and returning to 1,001 million US$ in 2019.
- Marketing and Specialties (M&S)
- Capital allocations to M&S were consistently low and stable between 2015 and 2018, ranging from 98 million US$ to 125 million US$. However, a significant increase was recorded in 2019, with expenditures rising to 374 million US$, representing a nearly threefold increase over the previous year.
- Corporate and Other
- Spending in this category remained modest and generally stable, with a gradual upward trend observed toward the end of the period, peaking at 206 million US$ in 2019.
- Chemicals Segment
- No financial data was recorded for capital expenditures within the Chemicals segment during the analyzed period.
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