Phillips 66 (PSX) Approves Increase in Capital Spending Program to $3.9B in 2014

The board of directors of Phillips 66 (NYSE: PSX) has approved an increase in 2014 capital spending to support the company’s growth strategy and authorized returning additional capital to shareholders.

The board authorized $3.9 billion of capital expenditures this year, an increase of $1.2 billion to the previously approved budget. The increased capital program is designed to accelerate the development of the Sweeny Fractionator One and Freeport Liquid Petroleum Gas Export Terminal, as well as fund the recently announced acquisitions of the Beaumont Terminal in Texas and Spectrum Corporation, a specialty lubricants company. The board also approved an additional $2 billion share repurchase program.

“We are executing our growth plans through disciplined organic capital spending and by selective acquisitions in our Transportation and Lubricants businesses,” said Greg Garland, chairman and CEO of Phillips 66. "Our financial flexibility enables us to increase investment in higher valued business lines while growing dividends and stock repurchases in order to create differentiated value for our shareholders."

Since the third quarter of 2012, the board has authorized a total of $7 billion in share repurchases. The company’s cumulative share repurchases totaled $3.2 billion through the first quarter of 2014.

The shares will be repurchased from time to time in the open market at the company’s discretion, subject to market conditions and other factors, and in accordance with applicable regulatory requirements. The company may commence, suspend or discontinue purchases of common stock under this authorization at any time or periodically without prior notice. Phillips 66 anticipates funding the repurchases primarily with cash generated by its operations. Shares of stock repurchased will be held as treasury shares.

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