Phillips 66 · NYSE:PSX
Phillips 66 — Q3 2013 Earnings Presentation
39 slides from Phillips 66's earnings presentation, Oct 30, 2013
Slide 1: Phillips 66 Third Quarter Conference Call
PHILLIPS 66 THIRD QUARTER CONFERENCE CALL October 30, 2013
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT This presentation contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Wo
Slide 3: Executing Strategy
EXECUTING STRATEGY —— ee ———<— —~1) "| eZ dia } Lb rs FS. - IP | al SAA. ; ARE
Slide 4: Company Overview 3Q 2013
COMPANY OVERVIEW 3Q 2013 Earnings: $535 MM EPS: $0.87 Operating cash flow*: $873 MM Debt repayment: $510 MM Dividends paid: $189 MM Common shares repurchased: $674 MM Annualized YTD ROCE: 14% * Excluding working capital changes 4
Slide 5: Company Adjusted Earnings 3Q 2013 vs. 2Q 2013
COMPANY ADJUSTED EARNINGS 3Q 2013 VS. 2Q 2013 $MM 81 58 13 (483) 935 (69) 535 2Q 2013 Midstream Chemicals Refining Marketing Corporate 3Q 2013 Adjusted & Specialties & Other Adjusted Earnings Earnings 148 262 (2) 240 (113) 3Q 2013 Adjusted Earnings 5
Slide 6: Company Cash Flow 3Q 2013
COMPANY CASH FLOW 3Q 2013 $B 0.4 1.1 (0.2) 1.0 (0.4) 0.1 (0.7) 0.9 (0.5) 5.9 4.2 June 30 CFO Working Asset PSXP Dividends Capital Share Debt Other September Cash (excluding Capital Sales IPO Net Expenditures Repurchases Repayment 30 Balance* working Proceeds & Cash capital) Investments Balance** * I
Slide 7: Capital Structure 2Q 2012 – 3Q 2013
CAPITAL STRUCTURE 2Q 2012 – 3Q 2013 30% 28% 25% 25% 23% 20% - 30% 22% 20.6 20.8 21.4 21.7 22.0 19.0 8.0 8.0 7.0 7.0 6.5 6.2 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013 3Q 2013 Equity $B Debt $B Debt to Capital 7
Slide 8: Midstream Overview 3Q 2013
MIDSTREAM OVERVIEW 3Q 2013 Transportation: Higher throughput fees & improved volumes DCP Midstream: DCP Midstream Partners NGL Operations & Other: Lower margins & inventory impacts Annualized YTD ROCE: 15% 8
Slide 9: Midstream Adjusted Earnings 3Q 2013 vs. 2Q 2013
MIDSTREAM ADJUSTED EARNINGS 3Q 2013 VS. 2Q 2013 $MM 57 (3) 4 148 90 2Q 2013 Transportation DCP NGL Operations 3Q 2013 Adjusted Midstream & Other Adjusted Earnings Earnings 9
Slide 10: Chemicals Overview 3Q 2013
CHEMICALS OVERVIEW 3Q 2013 Olefins & Polyolefins: Higher margins & volumes Specialties, Aromatics & Styrenics: Reduced margins & higher volumes Annualized YTD ROCE: 26% 10
Slide 11: Chemicals Adjusted Earnings 3Q 2013 vs. 2Q 2013
CHEMICALS ADJUSTED EARNINGS 3Q 2013 VS. 2Q 2013 $MM 87 0 (6) 262 181 2Q 2013 Olefins & Specialties, Corporate 3Q 2013 Adjusted Polyolefins Aromatics & & Other Adjusted Earnings Styrenics Earnings 11
Slide 12: Refining Overview 3Q 2013
REFINING OVERVIEW 3Q 2013 Realized refining margin: $6.14/BBL Refining crude utilization: 95% Clean product yield: 84% Advantaged U.S. crude slate: 66% Annualized YTD ROCE: 13% 12
Slide 13: Refining Adjusted Earnings 3Q 2013 vs. 2Q 2013
REFINING ADJUSTED EARNINGS 3Q 2013 VS. 2Q 2013 $MM 21 7 481 (276) (126) (109) (2) 2Q 2013 Atlantic Gulf Central Western / Other 3Q 2013 Adjusted Basin / Coast Corridor Pacific Refining Adjusted Earnings Europe Earnings 13
Slide 14: Refining Margins – Market vs. Realized 3Q 2013
REFINING MARGINS – MARKET VS. REALIZED 3Q 2013 WORLDWIDE REFINING $/BBL (1.53) 2.61 13.44 (2.03) (6.35) 6.14 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Avg. Market Crude: $109.26/BBL 95% Crude Capacity Utilization 46% Market Capture 14
Slide 15: Refining Operations 2011 – 2013 YTD
REFINING OPERATIONS 2011 – 2013 YTD U.S. CRUDE SLATE WORLDWIDE CLEAN PRODUCT YIELD Advantaged 52% 62% 67% 83.6% 83.8% 84.2% Total 1.9% 2.1% 2.0% Other 38% 33% Brent Based 48% 39.4% Distillate 39.7% 40.2% 7% 14% Shale* 2% 27% 24% Other Heavy 27% 10% 12% 42.0% 41.5% 42.8% Gasoline Canadian Heavy 7% WT
Slide 16: Marketing and Specialties Overview 3Q 2013
MARKETING AND SPECIALTIES OVERVIEW 3Q 2013 Worldwide marketing margin: 4.4 cpg Specialties: Lower margins & higher volumes Annualized YTD ROCE: 36% 16
Slide 17: Marketing and Specialties Adjusted Earnings 3Q 2013 vs. 2Q 2013
MARKETING AND SPECIALTIES ADJUSTED EARNINGS 3Q 2013 VS. 2Q 2013 $MM (60) (9) 309 240 2Q 2013 Marketing Specialties 3Q 2013 Adjusted & Other Adjusted Earnings Earnings 17
Slide 18: Corporate and Other Adjusted Net Loss 3Q 2013 vs. 2Q 2013
CORPORATE AND OTHER ADJUSTED NET LOSS 3Q 2013 VS. 2Q 2013 $MM 2Q 2013 3Q 2013 Adjusted Net Interest Corporate Adjusted Net Loss Expense Overhead Other Net Loss (113) (126) 8 1 4 18
Slide 19: Outlook
OUTLOOK 19
Slide 20: Questions and Answers
PHILLIPS 66 THIRD QUARTER 2013 CONFERENCE CALL Questions and Answers
Slide 21: Appendix
PHILLIPS 66 THIRD QUARTER 2013 CONFERENCE CALL Appendix
Slide 22: Sensitivities
SENSITIVITIES 2013 Net Income $MM Midstream 1¢/Gal Increase in NGL price 4 10¢/MMBtu Increase in Natural Gas price 2 $1/BBL Increase in WTI price 2 Chemicals 1¢/Lb Increase in Olefins Chain Margin (Ethylene, Polyethylene, NAO) 35 Worldwide Refining (assuming 95% refining utilization) $1/BBL Increase
Slide 23: Refining Margins – Atlantic Basin / Europe
REFINING MARGINS – MARKET VS. REALIZED 3Q 2013 ATLANTIC BASIN / EUROPE $/BBL Brent: $110.36/BBL 98% Crude Capacity Utilization 45% Market Capture (2.06) (2.63) 14.50 (2.86) (0.36) 6.59 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – Dated Brent / Gasoline
Slide 24: Refining Margins – Gulf Coast
REFINING MARGINS – MARKET VS. REALIZED 3Q 2013 GULF COAST $/BBL LLS: $109.89/BBL 92% Crude Capacity Utilization 42% Market Capture (0.73) 3.53 9.46 (1.16) 3.95 (7.15) Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – LLS / Gasoline 85 CBOB / Diesel 61 8ppm
Slide 25: Refining Margins – Central Corridor
REFINING MARGINS – MARKET VS. REALIZED 3Q 2013 CENTRAL CORRIDOR $/BBL WTI: $105.80/BBL 101% Crude Capacity Utilization 56% Market Capture (1.72) 6.18 17.35 (4.36) (7.65) 9.80 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – WTI / Gasoline Unl 87 Group 3 /
Slide 26: Refining Margins – Western / Pacific
REFINING MARGINS – MARKET VS. REALIZED 3Q 2013 WESTERN / PACIFIC $/BBL ANS: $110.52/BBL 91% Crude Capacity Utilization 33% Market Capture (1.58) 4.50 14.40 (3.71) (8.84) 4.77 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – ANS Spot / Los Angeles CARBOB /
Slide 27: Company Adjusted Earnings 3Q 2013 vs. 3Q 2012
COMPANY ADJUSTED EARNINGS 3Q 2013 VS. 3Q 2012 $MM 60 (13) 1,894 142 (1) (1,547) 535 3Q 2012 Midstream Chemicals Refining Marketing Corporate 3Q 2013 Adjusted & Specialties & Other Adjusted Earnings Earnings 148 262 (2) 240 (113) 3Q 2013 Adjusted Earnings 27
Slide 28: Midstream Adjusted Earnings 3Q 2013 vs. 3Q 2012
MIDSTREAM ADJUSTED EARNINGS 3Q 2013 VS. 3Q 2012 $MM 48 (10) 22 148 88 3Q 2012 Transportation DCP NGL Operations 3Q 2013 Adjusted Midstream & Other Adjusted Earnings Earnings 28
Slide 29: Chemicals Adjusted Earnings 3Q 2013 vs. 3Q 2012
CHEMICALS ADJUSTED EARNINGS 3Q 2013 VS. 3Q 2012 $MM (5) 0 (8) 275 262 3Q 2012 Olefins & Specialties, Corporate 3Q 2013 Adjusted Polyolefins Aromatics & & Other Adjusted Earnings Styrenics Earnings 29
Slide 30: Refining Adjusted Earnings 3Q 2013 vs. 3Q 2012
REFINING ADJUSTED EARNINGS 3Q 2013 VS. 3Q 2012 $MM (271) (324) 1,545 (653) (229) (70) (2) 3Q 2012 Atlantic Gulf Central Western / Other 3Q 2013 Adjusted Basin / Coast Corridor Pacific Refining Adjusted Earnings Europe Earnings 30
Slide 31: Marketing and Specialties Adjusted Earnings 3Q 2013 vs. 3Q 2012
MARKETING AND SPECIALTIES ADJUSTED EARNINGS 3Q 2013 VS. 3Q 2012 $MM 149 (7) 240 98 3Q 2012 Marketing Specialties 3Q 2013 Adjusted & Other Adjusted Earnings Earnings 31
Slide 32: Corporate and Other Adjusted Net Loss 3Q 2013 vs. 3Q 2012
CORPORATE AND OTHER ADJUSTED NET LOSS 3Q 2013 VS. 3Q 2012 $MM 3Q 2012 3Q 2013 Adjusted Net Interest Corporate Adjusted Net Loss Expense Overhead Other Net Loss (112) (113) 6 (2) (5) 32
Slide 33: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2013 2012 Sep YTD 3Q 2Q Sep YTD 3Q Phillips 66 Net Income (Loss) Attributable to Phillips 66 $ 2,900 $ 535 $ 958 $ 3,416 $ 1,599 Adjustments: Net (gain) loss on asset sales (23) - (23) (106) - Impairments - - - 399 187 Exit of business
Slide 34: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2013 2012 Sep YTD 3Q 2Q Sep YTD 3Q Midstream Net Income (Loss) Attributable to Phillips 66 $ 348 $ 148 $ 90 $ (39) $ (72) Adjustments: Impairments - - - 330 160 Adjusted Net Income (Loss) Attributable to Phillips 66 $ 348 $ 148 $ 90 $
Slide 35: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2013 2012 Sep YTD 3Q 2Q Sep YTD 3Q Refining Net Income (Loss) Attributable to Phillips 66 $ 1,401 $ (2) $ 481 $ 2,854 $ 1,545 Adjustments: Net (gain) loss on asset sales - - - (104) - Impairments - - - 42 - Tax law impacts (13) - - - -
Slide 36: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Marketing 2013 YTD Phillips 66 Midstream Chemicals Refining & Specialties Numerator ($MM) Net Income 2,910 358 725 1,401 760 After-tax interest expense 135 - - - - GAAP ROCE earnings 3,045 358 725 1,401 760 Special Items (22) - - (13) (9) Adjusted ROCE earnings 3,023 358 725
Slide 37: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars 2013 3Q Cash Flows from Operating Activities Net Cash Provided by Operating Activities, excluding working capital $ 873 Working capital adjustments Decrease (increase) in accounts and notes receivable 124 Decrease (increase) in inventories 313 Decrease (i
Slide 38: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars First Year Sweeny Fractionator & Export Facility Estimated net income $ 190 Estimated income taxes 118 Estimated net interest expense 5 Estimated depreciation and amortization 117 Estimated EBITDA $ 430 38
Slide 39: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Incremental CPChem Project Earnings Projection EBITDA Reconciliation to Net Income Millions of Dollars Estimated incremental net income (CPChem view) Low High Estimated incremental net income $ 1,000 $ 1,313 Estimated depreciation 280 260 Estimated interest - - Estimated tax