Phillips 66 to Launch MLP IPO in Second Half of 2013

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Phillips 66 to Launch MLP IPO in Second Half of 2013


HOUSTON -- Strong refining and chemicals margins led Phillips 66's fourth-quarter 2012 earnings to more than triple compared to the same period in 2011.

Adjusted net earnings for the company that lends its brand names to 1,000-plus convenience stores came in at $1.3 billion in Phillips 66's latest quarter -- which ended Dec. 31 -- compared to $379 million in its 2011 fourth quarter.

For all of 2012, Phillips 66 earned adjusted earnings of $5.4 billion vs. $3.6 billion during 2011.

"The company's solid financial performance in 2012 was underpinned by safe, reliable and efficient operations," said Greg Garland, Phillips 66's chairman and chief executive officer. "Our $1 billion debt reduction strengthens our financial flexibility and resulted in a 25 percent debt-to-capital ratio at the end of the year."

In fact, Phillips 66 is so pleased with its financial performance that it announced today it received board approval to increase its annual dividend by 25 percent and expand its share repurchase program by $1 billion.

In addition, Phillips 66 reiterated its intent to form a master limited partnership (MLP) of its midstream and chemicals segments. According to the company, a registration statement is expected to be filed with the Securities and Exchange Commission during the second quarter of this year and once approved, Phillips 66 anticipates an initial public offering of its MLP in the second half of 2013.

To qualify for MLP status, a partnership must generate at least 90 percent of its income from what the Internal Revenue Service deems "qualifying" sources. Those qualifying sources include activities related to the production, processing or transportation of oil, natural gas and coal.

Phillips 66 was spun off from ConocoPhillips Inc. on May 1, 2012.