Phillips 66 (PSX) Q2 2019 Earnings Call Transcript

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Phillips 66 (NYSE: PSX)
Q2 2019 Earnings Call
Jul 26, 2019, 12:00 p.m. ET

Contents:

  • Prepared Remarks

  • Questions and Answers

  • Call Participants

Prepared Remarks:

Operator

Welcome to the Second Quarter 2019 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 will now turn the call over to Jeff Dietert, Vice President, Investor Relations. Jeff, you may begin.

Jeff Dietert -- Vice President, Investor Relations

Good morning, and welcome to Phillips 66 second 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 is a reminder that we will be making forward-looking statements during the presentation and our Q&A session. 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 a follow-up. If you have additional questions, we ask that you rejoin the queue.

With that, I'll turn the call over to Greg Garland for opening remarks.

Greg C. Garland -- Chairman and Chief Executive Officer

Thanks, Jeff. Good morning, everyone, and thank you for joining us today. Adjusted earnings for the second quarter were $1.4 billion or $3.02 per share. We generated $1.9 billion of operating cash flow. We delivered solid operating performance and strong earnings during the quarter. Refining operated at 97% utilization and captured favorable margins driven by improved gasoline cracks.

In Midstream, growth projects completed over the past two years contributed to record segment earnings. During the quarter, we distributed $861 million to shareholders through dividends and share repurchases. We're dedicated to secure, competitive, and growing dividend. In this quarter, we increased the dividend by 12.5%. This is the ninth increase since our inception, resulted in a 25% compound annual growth rate. Disciplined capital allocation remains fundamental to our strategy and we know that it creates value for our shareholders. Our long-term objective is to reinvest 60% of our operating cash flow back into the business and return 40% to our shareholders through dividends and share repurchases. We'll buy our shares back when we trade below intrinsic value and we're buying shares today.