Phillips 66’s worldwide refining utilization was 91 percent for the fourth quarter, down from 94 percent a year ago. This decrease reflects significant turnaround activity in the Central Corridor and Western/Pacific regions, as well as adverse impacts from Hurricane Sandy, primarily at the Bayway Refinery. Pre-tax turnaround expenses were $84 million, excluding the company’s share of WRB Refining’s turnaround expense totaling $73 million. In addition, fourth-quarter expenses related to Hurricane Sandy were $56 million before-tax.
Compared with the third quarter of 2012, worldwide market crack spreads decreased 33 percent. The impact of this decrease on Refining’s earnings was mitigated by increased market capture in the fourth quarter due to the company’s refinery configuration and improved clean product differentials. Refining’s market capture increased to 95 percent from 79 percent in the third quarter of 2012.
Marketing, Specialties and Other contributed adjusted earnings of $180 million during the fourth quarter, an increase of $38 million from the prior year. Compared to the same period last year, the company benefitted from improved margins, partially offset by lower volumes and higher environmental and legal costs.
While international power production and U.S. marketing volumes were down in the fourth quarter, the company’s lubricants and specialty products businesses grew volumes by 16 percent and 14 percent, respectively.Midstream The Midstream segment recorded earnings of $85 million for the fourth quarter of 2012. Midstream adjusted earnings were $62 million, compared with $113 million in the prior year. Fourth-quarter earnings related to the company’s equity investment in DCP Midstream (DCP) were $38 million, $21 million lower than a year ago. The decrease was due to lower natural gas liquids (NGL) prices. This decline was partially offset by lower depreciation expense and improved production mix as DCP increased its NGL production in liquids-rich basins. Overall, NGL volumes remained flat.
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