Good morning, and welcome to the virtual webcast of the 2020 Annual Meeting of Shareholders of Phillips 66. I would like to introduce the company's Chairman and Chief Executive Officer, Greg Garland.
Good morning, ladies and gentlemen. It's my pleasure to welcome you to the 2020 Annual Meeting of Shareholders for Phillips 66. Joining me today through this web cast of the meeting are the members of our executive leadership team as well as each of the members of our Board of Directors. Before we begin the formal meeting, we want to go over a few items regarding today's format. So this is our first online shareholders meeting, and we appreciate everyone's understanding regarding this new format.
We know that many of you are accustomed to an in person meeting, and this just wasn't possible this year due to the health and safety concerns related to COVID-nineteen. The thoughts and best wishes of our Board and our executive leadership team are with everyone who has been impacted by this pandemic. So I'll now call the meeting to order. A meeting agenda, the rules of conduct and procedures are posted on the webcast screen. We will conduct a meeting in accordance with these documents.
As indicated on the agenda, we'll first conduct the business of the meeting by presenting and voting on all the proposals. After that portion of the meeting has been conducted, I'll provide an update on the company, which will be followed by a question and answer period. We found that the best way to ensure we have plenty of time for your comments and questions is to save those for the Q and A session after the business update. While this meeting is virtual only, we welcome questions from our shareholders. If you have any questions, we would ask that you submit them now in writing to the question field located on the bottom left of your screen.
Though we may not be able to answer every question, we'll do our best to provide a response to as many as possible. Paula Johnson, our General Counsel and Corporate Secretary, will report on some of the formal matters related to the holding of this meeting.
Thank you, Mr. Chairman. The Board of Directors appointed James D. Gawn to serve as the Inspector of Election. Mr.
Gawn reports that holders of more than a majority of shares entitled to vote at this meeting are present in person or by proxy. Therefore, a quorum is present to conduct the business of the meeting. Any shareholder may vote at this meeting by following the instructions on the website you are using to access the meeting. If you previously submitted a valid proxy by mail, Internet or phone, your vote will be cast as indicated in your proxy submission. You do not need to vote at this meeting unless you wish to change your prior proxy vote.
If you have not previously voted and would like to vote now or if you would like to change your prior proxy vote, you may do so by clicking on the voting button and using the electronic ballot provided.
Okay. Thank you, Paula. The meeting will now consider the 4 proposals submitted to a vote of our shareholders. Proposal 1 is election of 3 directors to serve for a term expiring at the 2023 Annual Meeting of Shareholders. The nominees for election are Charles Holly, Gwen Tilton and Marna Whittington.
Your Board recommends a vote for these nominees. Proposal 2 is a ratification of the election of Ernst and Young as the company's independent registered public accounting firm for 2020. As indicated in the proxy statement, Scott Miracle, a representative of Ernst and Young is here today through the webcast. Your Board recommends a vote for the ratification and selection of Ernst and Young. Proposal 3 is advisory vote to approve named officer compensation.
The Board recommends a vote for this proposal. Proposal 4 is a shareholder proposal requesting a report on the risks related to U. S. Gulf Coast petrochemical operations and investments. A representative of As You Sow will present Proposal 4.
Operator, if you would, please open the line for the shareholder proponent.
Okay. The lines are now open.
Is a representative from as you saw available to present the proposal? Okay. Because no designated representatives present the meeting today, this proposal will not be placed before the meeting today. Now that all the proposals have been presented, I declare that the polls are now open and will remain open until the voting has been completed. As a reminder, any shareholder who hasn't yet voted or wishes to change their vote may do so by clicking on the voting button on the virtual meeting portal and following instructions.
Shareholders who have sent in proxies or voted via telephone or the Internet and do not want to change their vote, do not need to take any further action. Okay. It looks like all the voting is in. I now hereby declare the polls are closed. So while the votes are being tabulated, we're going to provide you with an update on our business, after which we will answer any questions that you have.
Slide 2 contains our Safe Harbor statement. We're going to make forward looking statements today. Actual results could differ. Factors that could cause the results to differ are located here and with our filings with the SEC. It's my great pleasure to introduce to you today the members of our Board of Directors, Gary Adams, Brian Ferguson, Charles Holly, John Lowe, Terry McGraw, Denise Ramos, Gwen Tilton, Vicki Schinkel and Marta Whittington.
I'd like to thank them for joining us today and for their service to our company. In the current environment, our focus continues to be on the well-being of our employees, their families and communities and ensuring the financial and operational strength of our company. In the 40 years I've been in the business, we're facing a challenge unlike any other that I've seen, and our people are stepping up to the challenge. They're adapting and they're responding. I'm very proud of the people of Phillips 66, how they're living our values and our mission of providing energy and improving lives.
Our business is an essential business, and we're focused on providing critical energy products and services for our customers. The safety and health of our workforce is a top priority. Phillips 66 has implemented the appropriate steps to protect our workforce that are consistent with the CDC, national, state and local directives. We're focused on conserving cash and maintaining strong liquidity to manage through this unprecedented down cycle. We secured a $2,000,000,000 term loan facility and issued $1,000,000,000 of senior unsecured notes.
We suspended our share repurchase program. Through March 18, we bought $443,000,000 worth of our shares. We're reducing capital by $700,000,000 and lowering costs by $500,000,000 in 2020. In midstream, we deferred the Red Oak Pipeline and Sweeny Frac IV projects. Phillips 66 Partners deferred Liberty Pipeline and postponed its final investment decision on the ACE Pipeline.
In refining, we have deferred and canceled certain discretionary projects. We reduced refinery runs across the system in response to lower product demand. These steps provide additional liquidity and flexibility as we navigate this global crisis. By doing so, we are protecting the company, the security of the dividend and our strong investment grade credit rating. We remain focused on disciplined capital allocation and creating long term value for our shareholders.
Our vision is to provide energy and improve lives. Nearly 15,000 employees of Phillips 66 live out this vision every day. In 2019, Phillips 66 employees volunteered a record 88,000 hours. Since we formed as a company, they've donated nearly a half a 1000000 hours of their time to the local communities. At Phillips 66, we match employee contributions to charitable organizations dollar for dollar.
In 2019, over 2,000 organizations received support through our matching gift program. Phillips 66 has contributed $191,000,000 to organizations promoting education, safety and the environment. We recently contributed $3,000,000 to COVID-nineteen relief efforts in the communities where we live and operate. These funds will provide essential support for first responders, food banks, healthcare and other critical organizations serving vulnerable populations. Our commitment to operating excellence is unwavering.
In 2019, we maintained our industry leading safety performance and ran well across our refining system. We achieved a 94% utilization rate exceeding the industry average. We are honored that 5 of our refineries were recently recognized by AFPM for 2019 safety performance. Our Ferndale, Santa Maria, Borger, Lake Charles and Bayway refineries received distinguished safety awards. This is the highest annual award given in our industry.
AFPM also recognized CPChem's Borger, Conroe, Orange and Port Arthur facilities for exemplary 2019 safety performance. During the Q1 of 2020, we achieved strong safety performance. Our recordable rate was a record low, 0.09.
I want
to thank our employees for their steadfast commitment to operating excellence and congratulations to all of our distinguished Safety Award winners. In midstream, our growth strategy has been focused on 3 areas: crude oil pipelines from key shale oil basins to the U. S. Gulf Coast terminals on the Gulf Coast providing storage and export capability and building out the NGL value chain, including transportation, fractionation and export. During 2019, Midstream achieved strong results with contributions from our growth investments completed over the last 3 years, contributing to another record year of adjusted earnings for the segment.
We made significant progress executing our major growth projects highlighted on this slide. We commenced operations on the 900,000 barrel a day Gray Oak pipeline and advanced the Sweeny Hub expansion. Our Chemical segment consists of our 50 percent joint venture interest in Chevron Phillips Chemical Company. 2 major petrochemical projects in development at CPChem are still in the early phases. We take a long term view of our investment decisions and we remain constructive around the long term demand outlook for petrochemicals.
Our refining business consists of 13 refineries in the U. S. And Europe with a total crude capacity of 2,200,000 barrels per day. Our refining capital projects are focused on enhancing margins by improving yield of higher value products and increasing crude feedstock flexibility. We completed multiple high return projects, including the Lake Charles isomerization unit, as well as multiple low capital projects that increased distillate production by 25,000 barrels per day.
Our Marketing and Specialties business is a high return business for us. It generates stable earnings with low capital intensity and ensures ratable refinery pull through. Disciplined capital allocation is fundamental to our strategy. We believe it creates value for our shareholders. Our long term objective is to reinvest 60% of cash flow back into our business and return 40% to our shareholders.
In 2019, we increased the quarterly dividend 12.5 percent and returned $3,200,000,000 to shareholders. Since 2012, we have returned $26,000,000,000 to shareholders and reduced our initial shares outstanding by 33%. Our employees are committed to Phillips 66 core values of safety, honor and commitment, impacting how we conduct our business, how we make our decisions and how we engage with others. We believe that by working for the greater good, creating an environment of trust, seeking different perspectives and striving to achieve excellence, we fulfill the very best of who we are and who we want to be. Our people are our greatest asset and are key to accomplishing our vision of providing energy and improving lives.
Sustainability is important to Phillips 66. We recognize that ESG done well is critical to our success. It creates value for our shareholders and it is essential to achieve our vision of providing energy and improving lives. ESG starts at the very top with our Board of Directors. They oversee our strategy and they understand the risk associated with our business.
We have a robust health safety environmental program as demonstrated by our industry leading performance. We continue to work towards a 0 incident 0 injury workplace. Phillips 66 is one of the few energy companies with a dedicated technology program. We invest in research and technology to better understand our impacts to the air, the land and the water and how we can use our natural resources more sustainably. We've reduced emissions 27% since we formed as a company.
We continually strive to enhance our ESG reporting and provide additional transparency. We disclosed our key safety and environmental performance metrics in our sustainability report and on our website. Our 2020 sustainability report will be available in June. We're investing in next generation technologies for lower carbon economy. We believe that many forms of energy will be needed to support the increasing global demand.
This slide shows some of the things we're doing today as well as some of the projects we have in development. We're performing research on energy of the future, including renewable fuels, organic photovoltaics, current next generation batteries and solid oxide fuel cells. We're developing a portfolio of renewable diesel projects that meet low carbon fuel standards. We're pursuing hydrogen fueling and solar power. In 2019, we installed our 1st hydrogen fueling station in Switzerland.
We're positioning Phillips 66 to be competitive for the long term. In closing, I want to emphasize that while the current environment presents challenges, the people of Phillips 66 can be relied on to deliver exceptional performance. We're committed to disciplined capital allocation and long term value creation for our shareholders. We have a strong diversified portfolio that positions us to achieve superior returns for our shareholders. We are optimistic about our future.
So that completes our report. Paula, would you please report the preliminary results of the voting?
Before I do that, Mr. Chairman, we were informed that there was a malfunction in unmuting the line of the shareholder proponent. So at this time, operator, if you could unmute the line of as you so, if they're available to present their proposal.
Okay. Let me just unmute the line.
Hi. Good morning, Mr. Chairman, members of the Board, fellow shareholders. My name is Daniel Stewart, and I want to thank you for the opportunity to present Proposal 4 submitted by As You Sow. The proposal requests a report on the public health risks of expanding petrochemical operations in areas increasingly likely to experience climate change induced storms, flooding and sea level rise.
Due to the COVID-nineteen pandemic, 2020 has seen unprecedented disruption. With lives at stake, government action has been insufficient to avert massive loss of life and economic devastation. This shock demonstrates just how critical early action and planning is to mitigate known and likely global catastrophes. Even as the energy sector grapples with the impacts of COVID-nineteen, it must not put aside preparation and action to stem the risks of the climate crisis. Petrochemical operations use hazardous chemicals that are dangerous when released to the environment.
Already storms Hurricane Harvey have shown how vulnerable plants operated by Phillips 66 and CPC Chem, a joint venture of Chevron and Phillips 66 are to extreme weather. During Hurricane Harvey, flooding at Phillips 66's facilities resulted in upsets and equipment malfunctions that led to alarming chemical leaks. Nearby community members reported health impacts such as respiratory illness, nausea and headaches among others. Some health issues may be long term and worse than captured by initial reports. We know that hurricanes like Harvey are becoming more frequent and severe as the impacts of the climate crisis worsen.
And yes, Phillips 66 has plans to significantly expand petrochemical investments in high risk regions like the Gulf Coast. As investors, we seek disclosures with sufficient detail on how the company's decision making considers future severe and evolving climate risks and how that impacts where and how to invest in the build out of sensitive infrastructure. Existing risk management systems are proving demonstrably inadequate to handle new climate threats and peer companies are already facing legal challenges on this issue. The requested proposal will help the company better assess the risks of infrastructure damage, financial penalties, litigation, human health consequences and reputational damage. Disclosing such information is also important to investors to assess whether and how well management's actions mitigate risk from expanding petrochemical investments in areas increasingly prone to climate change induced storms, flooding and sea level rise?
Thank you.
Okay. Thanks for presenting that proposal. Pablo?
Mr. Chairman, preliminary results based the voting of shares represented by valid proxies on file and tabulated at the meeting this morning show that all of the director nominees have been elected to serve until the 2023 Annual Meeting. The appointment of Ernst and Young for 2020 has been ratified. Shareholders have approved the compensation of our named executive officers and the shareholder proposal has passed. Mr.
Chairman, this concludes the report of preliminary voting. Details of the final voting results will be reported in a Form 8 ks to be filed within 4 business days.
Okay, Paula. Thank you. The business of the shareholders meeting is now concluded. We'll now answer questions that shareholders have submitted through the meeting platform. At this time, it doesn't appear we have any questions.
So with that, this concludes the 2020 Annual Meeting. Thank you for your continued support and your interest in Phillips