Phillips 66 (NYSE: PSX), a diversified energy manufacturing and
logistics company, is providing preliminary ranges for certain
financial information reflecting the market and operating
conditions experienced in the first quarter, including the effects
of recent winter storms and the ongoing COVID-19 pandemic.
The severe winter storms had significant impacts on the
company’s operations in the Central and Gulf Coast regions. These
winter storms resulted in lower utilization of assets, as well as
higher utility, maintenance and repair costs primarily in the
Midstream, Chemicals and Refining segments. The higher utility
costs were driven by significant increases in prices for natural
gas and electricity in certain markets due to the increased demand
and supply outages caused by the winter storms. These negative
impacts were partially offset by the sale of electricity to help
meet demand in the Texas market. The company’s Refining and
Marketing and Specialties segments also continue to be impacted by
lower global demand for refined petroleum products due to the
COVID-19 pandemic.
In addition, the company will recognize an impairment in the
first quarter reflecting Phillips 66 Partners’ decision to exit the
Liberty Pipeline project.
Update to First-Quarter 2021 Outlook
During the company's fourth-quarter 2020 earnings conference
call, the company provided guidance on certain first-quarter 2021
operating and financial items. The table below provides updated
guidance.
Outlook Items
(millions of dollars, except as
indicated)
Quarter Ended
March 31, 2021
Prior
Outlook
Current
Outlook
Global Olefins and Polyolefins
utilization
Mid - 90%
Mid - 70%
Refining crude utilization
Market Conditions
Mid - 70%
Refining turnaround expense (pre-tax)
$200 - $230
$200 - $230
Corporate & Other costs (pre-tax)
$240 - $250
$240 - $250
Effective income tax rate
Low - 20%
15 - 20%
Preliminary First-Quarter 2021 Financial Information
The following table represents the company’s current estimates
of first-quarter 2021 financial results.
Financial Data
(millions of dollars, unaudited)
Quarter Ended
March 31, 2021
Estimated Range
Low
High
Net loss attributable to Phillips 66*
$
(865)
(680)
Adjusted net loss attributable to Phillips
66†
$
(700)
(550)
*Includes an estimated pre-tax impairment
of $180 million to $210 million related to Phillips 66 Partners’
Liberty Pipeline project.
†Adjusted net loss attributable to
Phillips 66 is not defined under U.S. generally accepted accounting
principles (“GAAP”). Please see below for a reconciliation of this
non-GAAP measure to its most comparable GAAP measure, as well as
the reasons for the use of this non-GAAP financial measure.
The company has not completed its financial closing procedures
for the first quarter of 2021, and actual results could vary from
these preliminary estimates. Please see the information set forth
below under “Cautionary Statement for the Purposes of the ‘Safe
Harbor’ Provisions of the Private Securities Litigation Reform Act
of 1995” for additional information about the Update to
First-Quarter 2021 Outlook and Preliminary First-Quarter 2021
Financial Information.
About Phillips 66
Phillips 66 is a diversified energy manufacturing and logistics
company. With a portfolio of Midstream, Chemicals, Refining, and
Marketing and Specialties businesses, the company processes,
transports, stores and markets fuels and products globally.
Phillips 66 Partners, the company’s master limited partnership, is
integral to the portfolio. Headquartered in Houston, the company
has 14,300 employees committed to safety and operating excellence.
Phillips 66 had $55 billion of assets as of Dec. 31, 2020. For more
information, visit www.phillips66.com
or follow us on Twitter @Phillips66Co.
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE
“SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
This press release contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which are intended to be covered by the safe harbors
created thereby. The update to first-quarter 2021 outlook and
preliminary first-quarter 2021 financial information included in
this press release are forward-looking statements. These
forward-looking statements are based on management’s expectations,
estimates and beliefs as of the date of this press release, but are
not guarantees of future performance or of actual first-quarter
2021 results. You should not unduly rely on the forward-looking
statements as they involve certain risks, uncertainties and
assumptions. Therefore, actual outcomes and results may differ
materially from what is expressed or forecast in such
forward-looking statements. Factors that could cause actual
first-quarter 2021 results to differ materially from those
described in the forward-looking statements include the fact that
the company has not yet completed its quarterly financial statement
close process. Additional developments and adjustments may arise
between the date of this release and the time the financial
information for the first-quarter 2021 period is finalized, which
may cause the actual, final information to vary from the forecasted
estimates contained in this release.
Use of Non-GAAP Financial Information–This press release
includes the term “Adjusted net loss attributable to Phillips 66,”
which is a supplemental measure of our performance that is not
required by, or presented in accordance with, GAAP. We believe it
is useful to the external users of our financial statements,
including industry analysts, investors, lenders, and rating
agencies. We have defined this non-GAAP measure below and believe
it is useful to assess our ongoing financial performance because,
when reconciled to its most comparable U.S. GAAP measure, it
provides improved comparability between periods through the
exclusion of certain items that we believe are not indicative of
our core operating performance and that may obscure our underlying
business results and trends. This non-GAAP measure should not be
considered as an alternative to its most comparable U.S. GAAP
measure nor should it be considered in isolation or as a substitute
for an analysis of our results of operations as reported under U.S.
GAAP. In addition, this non-GAAP measure may not be comparable to
similarly titled measures used by other companies because we may
define it differently, which diminishes its utility.
We define “Adjusted net loss attributable to Phillips 66” as net
loss attributable to Phillips 66 adjusted for the special items
noted below, net of related income tax effects.
Reconciliation of Net Loss Attributable
to Phillips 66 to
Adjusted Net Loss Attributable to
Phillips 66
(millions of dollars, unaudited)
Quarter Ended March 31,
2021
Estimated Range
Low
High
Net loss attributable to Phillips 66
$
(865
)
(680
)
Special item adjustments (after-tax)*:
Impairments
120
100
Weather-related maintenance and repair
costs
45
30
Adjusted net loss attributable to
Phillips 66
$
(700
)
(550
)
*We generally tax effect taxable
U.S.-based special items using a combined federal and state annual
statutory income tax rate of approximately 25%. Taxable special
items attributable to foreign locations likewise use a local
statutory income tax rate. Nontaxable events reflect zero income
tax. Special items are also adjusted for amounts attributable to
noncontrolling interests.
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version on businesswire.com: https://www.businesswire.com/news/home/20210405005442/en/
Jeff Dietert (investors) 832-765-2297 jeff.dietert@p66.com
Shannon Holy (investors) 832-765-2297 shannon.m.holy@p66.com
Thaddeus Herrick (media) 855-841-2368
thaddeus.f.herrick@p66.com
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