Phillips 66 (NYSE:PSX) Q4 2018 Earnings Conference Call Transcript
Feb 08, 2019 • 12:00 pm ET
Welcome to the Fourth Quarter 2018 Phillips 66 Earnings Conference Call. My name is Julie and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded.
I would now like to turn the call over to Jeff Dietert, Vice President, Investor Relation. Jeff, you may begin.
Good morning and welcome to Phillips 66 fourth quarter earnings conference call. Participants on today's call will include Greg Garland, Chairman and CEO; and Kevin Mitchell, Executive Vice President and CFO. The presentation material we will be using during the call can be found on the Investor Relations section of the Phillips 66 website, along with supplemental financial and operating information.
Slide two contains our Safe Harbor statement. It's a reminder that we will be looking forward -- make forward-looking statements during the presentation and our Q&A. Actual results may differ materially from today's comments. Factors that could cause actual results to differ are included here as well as in our SEC filings. In order to allow everyone the opportunity to ask a question, we ask that you limit yourself to one question and one follow up. If you have additional questions, we ask that you rejoin the queue.
With that, I'll turn over the call to Greg Garland for opening remarks.
Greg C. Garland
Thanks, Jeff. Good morning, everyone, and thank you for joining us today. Phillips 66 delivered another quarter of strong operating performance and record setting financial results for 2018. Adjusted earnings for the fourth quarter were a record $2.3 billion or $4.87 per share and we generated $4.1 billion of operating cash flow. We rewarded our shareholders with strong distributions during the quarter, returning $864 million through dividends and share repurchases. Refining operated at 99% capacity utilization and we -- towards heavy Canadian crude and other advantaged crudes throughout our Refining system to capture strong margins. In Midstream, we benefited from increased pipeline internal throughput across our integrated network.
For the year, adjusted earnings were $5.6 billion or $11.71 per share. We generated $7.6 billion of operating cash flow. The record financial performance in 2018 demonstrates our Refining portfolio's ability to run well and capture market opportunities. Marketing provided pull through of our Refined products to achieve record adjusted earnings. Also, contributing to our strong results were the Midstream and Chemicals growth projects, which were placed in the service during the past two years.
In 2018, we increased the quarterly dividend 14% and repurchased 10% of the shares outstanding, resulting in $6.1 billion of capital being returned to our shareholders. Since 2012, we returned $22.5 billion to shareholders through dividends, share repurchases and exchanges, reducing our initial shares outstanding by 30%. Disciplined capital allocation is a priority and we are committed to a secure, competitive and growing dividend. As we look to 2019, we expect to deliver another double-digit dividend increase. Through our ongoing share repurchase program, we continue to buy