Phillips 66, has reported second-quarter 2022 earnings of $3.2 billion, compared with earnings of $582 million in the first quarter of 2022. Excluding special items of $118 million, the company had adjusted earnings of $3.3 billion in the second quarter, compared with first quarter adjusted earnings of $595 million.
Mark Lashier, president and CEO of Phillips 66, said: “Our earnings reflect the strong market environment during the second quarter driven by a tight global product supply and demand balance. We are focused on reliably providing critical energy products, including transportation fuels, to meet peak summer demand. We also advanced strategic capital projects to help meet the growing demand for renewable fuels and NGLs.
“During the second quarter, we paid down $1.5 billion of debt, increased our dividend and resumed share repurchases. Additionally, we are transforming our business to achieve sustained annual cost savings of at least $700 million to ensure we remain competitive in any market environment. We will continue to prioritize operating excellence and disciplined capital allocation.”
Midstream second-quarter 2022 pre-tax income was $292 million, compared with $242 million in the first quarter of 2022.
Transportation second-quarter adjusted pre-tax income was $250 million, compared with adjusted pre-tax income of $278 million in the first quarter. The decrease was mainly due to lower equity earnings driven by reduced Bakken Pipeline crude volumes associated with winter storm impacts.
NGL and Other adjusted pre-tax income was $152 million in the second quarter, compared with adjusted pre-tax income of $91 million in the first quarter. The increase was attributable to improved margins and volumes at the Sweeny Hub and higher equity earnings from the Sand Hills Pipeline.
The company’s equity investment in DCP Midstream generated second quarter adjusted pre-tax income of $130 million, a $99 million increase from the prior quarter. The increase was mainly driven by improved gathering and processing results and hedging impacts.
In the second quarter, the fair value of the company’s investment in Novonix, Ltd., decreased by $240 million compared with a $158 million decrease in the first quarter.
Refining second-quarter 2022 pre-tax income was $3.0 billion, compared with pre-tax income of $123 million in the first quarter of 2022. Refining results in the first quarter included $17 million of hurricane-related maintenance and repair costs. Refining results in the second quarter included $70 million of costs related to the finalization of RIN obligations for prior year compliance periods and $26 million of costs related to the conversion of the Alliance Refinery to a terminal.
Adjusted pre-tax income for Refining was $3.1 billion in the second quarter, compared with adjusted pre-tax income of $140 million in the first quarter. The improvement was primarily due to higher realized margins driven by market crack spreads. The composite global market crack increased to $46.72 per barrel, up from $21.93 per barrel in the first quarter. Realized margins were $28.31 per barrel in the second quarter, up from $10.55 per barrel in the first quarter.
Pre-tax turnaround costs for the second quarter were $223 million, compared with first-quarter costs of $102 million. Crude utilization rate was 90 percent and clean product yield was 83 percent in the second quarter.
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