Adjusted earnings from Phillips 66’s other midstream operations were $24 million for the fourth quarter, compared with $54 million during the same period last year. The decrease was a result of higher taxes and less favorable inventory impacts.
Fourth-quarter Chemicals earnings were $246 million, an increase of $98 million from the same period last year, primarily attributable to improved margins. Externally marketed sales volumes increased to a total of 5.6 billion pounds in the fourth quarter. The majority of this improvement was in Olefins and Polyolefins (O&P), in which volumes were up 8 percent from the fourth quarter last year.
Global utilization for O&P was 90 percent during the quarter. Utilization rates were negatively impacted by downtime at Saudi Polymers Company. Excluding this impact, worldwide O&P utilization was near capacity during the quarter, enabling capture of strong olefins chain margins.
Specialties, Aromatics and Styrenics benefitted from improved benzene margins driven by higher sales prices, partially offset by rising feedstock costs.
Corporate and Other
Corporate and Other costs were $120 million after-tax for the fourth quarter, including $47 million of net interest expense. Adjusted for special items, Corporate and Other costs were $92 million after-tax for the quarter.
Financial Position, Liquidity and Return of Capital
During the quarter, Phillips 66 generated $1.3 billion in cash from operations. Excluding working capital, operating cash flow was $1.7 billion. The company also funded $894 million in capital expenditures and investments, including $513 million for its investments in the Sand Hills and Southern Hills pipeline projects.
In December, the company prepaid $1.0 billion of its amortizing three-year term loan and ended the year with $7.0 billion of debt and $3.5 billion of cash and cash equivalents. The company’s debt-to-capital ratio was 25 percent, improved from 28 percent at the end of the third quarter. The net-debt-to-capital ratio was 14 percent at the end of the year.