Phillips 66 · NYSE:PSX
Phillips 66 — Q2 2015 Earnings Presentation
41 slides from Phillips 66's earnings presentation, Jul 31, 2015
Slide 1: Second Quarter Conference Call
PHILLIPS 66 SECOND QUARTER CONFERENCE CALL July 31, 2015
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
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Slide 4: Overview 2Q 2015
OVERVIEW 2Q 2015 Adjusted Earnings $1.0 B Adjusted EPS $1.83 Operating cash flow excluding working capital $1.8 B Capital expenditures and investments $1.2 B Shareholder distributions $636 MM Adjusted net debt-to-capital ratio $11% Annualized adjusted YTD ROCE $13% Shareholder distributions include
Slide 5: Adjusted Earnings 2Q 2015 vs. 1Q 2015
ADJUSTED EARNINGS 2Q 2015 VS. 1Q 2015 $MM 109 92 (12) (2) (19) 1,002 834 1Q 2015 Midstream Chemicals Refining Marketing Corporate 2Q 2015 Adjusted & Specialties & Other Adjusted Earnings Earnings 48 295 604 182 (127) 2Q 2015 Adjusted Earnings 5
Slide 6: Midstream Overview 2Q 2015
MIDSTREAM OVERVIEW 2Q 2015 Transportation Increased volumes NGL Sweeny Frac One 90% complete PSXP Distributions up 8% DCP Midstream Low energy prices ROCE 5% ROCE is annualized adjusted YTD 6
Slide 7: Midstream 2Q 2015 vs. 1Q 2015
MIDSTREAM 2Q 2015 VS. 1Q 2015 $MM 0 (6) (13) 67 48 1Q 2015 Transportation NGL DCP 2Q 2015 Adjusted Midstream Adjusted Earnings Earnings 65 8 (25) 2Q 2015 Adjusted Earnings 7
Slide 8: Chemicals Overview 2Q 2015
CHEMICALS OVERVIEW 2Q 2015 Olefins & Polyolefins Improved margins and volumes Specialties, Aromatics & Styrenics Higher margins ROCE 21% ROCE is annualized adjusted YTD 8
Slide 9: Chemicals 2Q 2015 vs. 1Q 2015
CHEMICALS 2Q 2015 VS. 1Q 2015 $MM 12 84 (4) 295 203 1Q 2015 Olefins & Specialties, Other 2Q 2015 Adjusted Polyolefins Aromatics & Adjusted Earnings Styrenics Earnings 267 38 (10) 2Q 2015 Adjusted Earnings 9
Slide 10: Refining Overview 2Q 2015
REFINING OVERVIEW 2Q 2015 Realized refining margin $11.70/BBL Worldwide market capture 62% Refining crude utilization 90% Clean product yield 84% ROCE 16% ROCE is annualized adjusted YTD 10
Slide 11: Refining 2Q 2015 vs. 1Q 2015
REFINING 2Q 2015 VS. 1Q 2015 $MM 61 12 21 15 604 495 1Q 2015 Atlantic Gulf Coast Central Western / 2Q 2015 Adjusted Basin / Corridor Pacific Adjusted Earnings Europe Earnings 90 83 216 215 2Q 2015 Adjusted Earnings 11
Slide 12: Refining Margins – Market vs. Realized 2Q 2015
REFINING MARGINS – MARKET VS. REALIZED 2Q 2015 WORLDWIDE REFINING $/BBL (3.69) 2.24 (3.39) (2.40) 18.94 11.70 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Avg Market Crude: $61.51/BBL 90% Crude Capacity Utilization 62% Market Capture 12
Slide 13: Marketing and Specialties Overview 2Q 2015
MARKETING AND SPECIALTIES OVERVIEW 2Q 2015 Marketing Higher U.S. volumes Specialties Continued strong lubes margins ROCE 25% ROCE is annualized adjusted YTD 13
Slide 14: Marketing and Specialties 2Q 2015 vs. 1Q 2015
MARKETING AND SPECIALTIES 2Q 2015 VS. 1Q 2015 $MM (10) (2) 194 182 1Q 2015 Marketing Specialties 2Q 2015 Adjusted & Other Adjusted Earnings Earnings 134 48 2Q 2015 Adjusted Earnings 14
Slide 15: Corporate and Other 2Q 2015 vs. 1Q 2015
CORPORATE AND OTHER 2Q 2015 VS. 1Q 2015 $MM 1Q 2015 2Q 2015 Adjusted Net Interest Corporate Adjusted Net Loss Expense Overhead Other Net Loss (125) (127) 9 4 (15) 15
Slide 16: Capital Structure 2013 – 2Q 2015
CAPITAL STRUCTURE 2013 – 2Q 2015 Fully consolidated PSX Excluding PSXP 28% 28% 29% 28% 26% 26% 20% - 30% 22% 22% 22.4 22.6 23.2 22.4 22.0 22.0 21.6 21.8 8.7 8.9 9.0 8.7 7.8 7.9 6.2 6.2 5.4 5.2 5.4 5.1 5.0 5.2 5.3 5.0 2013 2014 1Q 2015 2Q 2015 2013 2014 1Q 2015 2Q 2015 Equity $B Debt $B Cash & Cash E
Slide 17: Cash Flow 2Q 2015
CASH FLOW 2Q 2015 $B 1.8 (0.3) (1.2) (0.6) 5.4 5.1 March 31 CFO Working Capital Shareholder June 30 Cash (excluding Capital Expenditures Distributions Cash Balance* working & Balance* capital) Investments * Includes cash and cash equivalents 17
Slide 18: Outlook 3Q 2015
OUTLOOK 3Q 2015 Global Olefins & Polyolefins utilization Mid-90% Refining crude utilization Mid-90% Refining turnaround expenses (pre-tax) ~$120 MM Corporate & Other costs (after-tax) $110 MM - $120 MM Effective income tax rate Mid-30% 2015 full year capital expenditures $4.6 B 18
Slide 19: Questions and Answers
PHILLIPS 66 SECOND QUARTER 2015 CONFERENCE CALL Questions and Answers
Slide 20: Appendix
PHILLIPS 66 SECOND QUARTER 2015 CONFERENCE CALL Appendix
Slide 21: Estimated Sensitivities
ESTIMATED SENSITIVITIES 2015 Annual Net Income $MM Midstream - DCP (net to Phillips 66) 10¢/Gal Increase in NGL price 30 $1/MMBtu Increase in Natural Gas price 25 $10/BBL Increase in WTI price 15 Chemicals - CPChem (net to Phillips 66) 1¢/Lb Increase in Chain Margin (Ethylene, Polyethylene, NAO) 35
Slide 22: Refining Margins – Atlantic Basin / Europe
REFINING MARGINS – MARKET VS. REALIZED 2Q 2015 ATLANTIC BASIN / EUROPE $/BBL Brent: $61.92/BBL 81% Crude Capacity Utilization 53% Market Capture (4.16) (1.95) (2.20) 19.86 (1.10) 10.45 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – Dated Brent / Gasoline
Slide 23: Refining Margins – Gulf Coast
REFINING MARGINS – MARKET VS. REALIZED 2Q 2015 GULF COAST $/BBL LLS: $62.95/BBL 90% Crude Capacity Utilization 55% Market Capture (3.03) 2.97 13.52 (1.94) (4.14) 7.38 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – LLS / Gasoline 85 CBOB / Diesel 61 8ppm
Slide 24: Refining Margins – Central Corridor
REFINING MARGINS – MARKET VS. REALIZED 2Q 2015 CENTRAL CORRIDOR $/BBL WTI: $57.84/BBL 101% Crude Capacity Utilization 70% Market Capture 3.78 (2.13) (3.36) (4.14) 19.34 13.49 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – WTI / Gasoline Unl Sub Octane Gr
Slide 25: Refining Margins – Western / Pacific
REFINING MARGINS – MARKET VS. REALIZED 2Q 2015 WESTERN / PACIFIC $/BBL ANS: $62.91/BBL 94% Crude Capacity Utilization 71% Market Capture 4.73 (5.55) (2.95) (4.38) 28.02 19.87 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – ANS Spot / Los Angeles CARBOB /
Slide 26: Adjusted Earnings 2Q 2015 vs. 2Q 2014
ADJUSTED EARNINGS 2Q 2015 VS. 2Q 2014 $MM 214 20 (6) (60) (29) 1,002 863 2Q 2014 Midstream Chemicals Refining Marketing Corporate 2Q 2015 Adjusted & Specialties & Other Adjusted Earnings Earnings 48 295 604 182 (127) 2Q 2015 Adjusted Earnings 26
Slide 27: Midstream 2Q 2015 vs. 2Q 2014
MIDSTREAM 2Q 2015 VS. 2Q 2014 $MM 5 (7) 108 (58) 48 2Q 2014 Transportation NGL DCP 2Q 2015 Adjusted Midstream Adjusted Earnings Earnings 65 8 (25) 2Q 2015 Adjusted Earnings 27
Slide 28: Chemicals 2Q 2015 vs. 2Q 2014
CHEMICALS 2Q 2015 VS. 2Q 2014 $MM 17 (3) (43) 324 295 2Q 2014 Olefins & Specialties, Other 2Q 2015 Adjusted Polyolefins Aromatics & Adjusted Earnings Styrenics Earnings 267 38 (10) 2Q 2015 Adjusted Earnings 28
Slide 29: Refining 2Q 2015 vs. 2Q 2014
REFINING 2Q 2015 VS. 2Q 2014 $MM 138 127 (35) (16) 604 390 2Q 2014 Atlantic Gulf Central Western / 2Q 2015 Adjusted Basin / Coast Corridor Pacific Adjusted Earnings Europe Earnings 90 83 216 215 2Q 2015 Adjusted Earnings 29
Slide 30: Marketing and Specialties 2Q 2015 vs. 2Q 2014
MARKETING AND SPECIALTIES 2Q 2015 VS. 2Q 2014 $MM 15 5 182 162 2Q 2014 Marketing Specialties 2Q 2015 Adjusted & Other Adjusted Earnings Earnings 134 48 2Q 2015 Adjusted Earnings 30
Slide 31: Corporate and Other 2Q 2015 vs. 2Q 2014
CORPORATE AND OTHER 2Q 2015 VS. 2Q 2014 $MM 2Q 2014 2Q 2015 Adjusted Net Interest Corporate Adjusted Net Loss Expense Overhead Other Net Loss (121) (127) 8 (10) (4) 31
Slide 32: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2015 2014 Jun YTD 2Q 1Q Jun YTD 2Q Phillips 66 Net Income (Loss) Attributable to Phillips 66 $ 1,999 $ 1,012 $ 987 $ 2,435 $ 863 Adjustments: Asset dispositions (247) (132) (115) - - Impairments by equity affiliates 126 126 - - - Pendi
Slide 33: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2015 2014 Jun YTD 2Q 1Q Jun YTD 2Q Midstream Net Income (Loss) Attributable to Phillips 66 $ (11) $ (78) $ 67 $ 296 $ 108 Adjustments: Impairments by equity affiliates 126 126 - - - Adjusted Net Income (Loss) Attributable to Phillips 6
Slide 34: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2015 2014 Jun YTD 2Q 1Q Jun YTD 2Q Refining Net Income (Loss) Attributable to Phillips 66 $ 1,142 $ 604 $ 538 $ 696 $ 390 Adjustments: Asset dispositions (5) - (5) - - Pending claims and settlements (38) - (38) - - Adjusted Net Income
Slide 35: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2015 2014 Jun YTD 2Q 1Q Jun YTD 2Q Midstream - Transportation Net Income (Loss) Attributable to Phillips 66 $ 130 $ 65 $ 65 $ 122 $ 60 Adjustments: Adjusted Net Income (Loss) Attributable to Phillips 66 $ 130 $ 65 $ 65 $ 122 $ 60 Midst
Slide 36: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2015 2014 Jun YTD 2Q 1Q Jun YTD 2Q Refining - Atlantic Basin / Europe Net Income (Loss) Attributable to Phillips 66 $ 203 $ 90 $ 113 $ 1 $ (37) Adjustments: Impairments - - - - - Pending claims and settlements (38) - (38) - - Adjusted
Slide 37: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2015 2014 Jun YTD 2Q 1Q Jun YTD 2Q Refining - Central Corridor Net Income (Loss) Attributable to Phillips 66 $ 411 $ 216 $ 195 $ 457 $ 232 Adjustments: Adjusted Net Income (Loss) Attributable to Phillips 66 $ 411 $ 216 $ 195 $ 457 $ 23
Slide 38: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2015 2014 Jun YTD 2Q 1Q Jun YTD 2Q Marketing & Specialties - Marketing & Other Net Income (Loss) Attributable to Phillips 66 $ 520 $ 266 $ 254 $ 212 $ 119 Adjustments: Asset dispositions (242) (132) (110) - - Adjusted Net Income (Loss)
Slide 39: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Marketing 2015 YTD Phillips 66 Midstream Chemicals Refining & Specialties Numerator ($MM) Net Income 2,022 16 498 1,142 618 After-tax interest expense 107 - - - - GAAP ROCE earnings 2,129 16 498 1,142 618 Special Items (163) 126 - (43) (242) Adjusted ROCE earnings 1,966 142
Slide 40: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars 2015 2Q Phillips 66 Phillips 66 Adjusted Consolidated Partners Phillips 66 Total Debt $ 8,965 $ 1,100 $ 7,865 Total Equity $ 23,223 $ 802 $ 22,421 Debt-to-Capital Ratio 28% 26% Total Cash $ 5,089 $ 104 $ 4,985 Net-Debt-to-Capital Ratio 14% 11% 40
Slide 41: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars 2015 2Q Effective Tax Rates Income before taxes $ 1,465 Special items $ 57 Adjusted income before taxes $ 1,522 Provision for taxes $ 440 Special items $ 67 Adjusted provision for taxes $ 507 GAAP effective tax rate 30% Adjusted effective tax rate 33% 41