Phillips 66 · NYSE:PSX
Phillips 66 — Q1 2014 Earnings Presentation
37 slides from Phillips 66's earnings presentation, Apr 30, 2014
Slide 1: Phillips 66 First Quarter Conference Call
PHILLIPS 66 FIRST QUARTER CONFERENCE CALL April 30, 2014
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 3
Slide 4: Company Overview 1Q 2014
COMPANY OVERVIEW 1Q 2014 Adjusted Earnings: $866 MM Adjusted EPS: $1.47 Adjusted operating cash flow: $1.0 B Dividends paid: $229 MM Common shares repurchased: 8.4 MM shares Share exchange – PSPI transaction: 17.4 MM shares Annualized Adjusted YTD ROCE: 13% 4
Slide 5: Company Adjusted Earnings 1Q 2014 vs. 4Q 2013
COMPANY ADJUSTED EARNINGS 1Q 2014 VS. 4Q 2013 $MM 55 67 32 16 (112) 808 866 4Q 2013 Midstream Chemicals Refining Marketing Corporate 1Q 2014 Adjusted & Specialties & Other Adjusted Earnings Earnings 188 316 306 137 (81) 1Q 2014 Adjusted Earnings 5
Slide 6: Midstream Overview 1Q 2014
MIDSTREAM OVERVIEW 1Q 2014 Transportation: Higher throughput fees & lower costs DCP Midstream: DPM gains, lower costs & strong prices NGL: Higher margins Annualized YTD ROCE: 22% 6
Slide 7: Midstream Adjusted Earnings 1Q 2014 vs. 4Q 2013
MIDSTREAM ADJUSTED EARNINGS 1Q 2014 VS. 4Q 2013 $MM 9 46 12 188 121 4Q 2013 Transportation DCP NGL 1Q 2014 Adjusted Midstream Adjusted Earnings Earnings 7
Slide 8: Chemicals Overview 1Q 2014
CHEMICALS OVERVIEW 1Q 2014 Olefins & Polyolefins: Strong chain margins Specialties, Aromatics & Styrenics: Higher benzene earnings Annualized YTD ROCE: 30% 8
Slide 9: Chemicals Adjusted Earnings 1Q 2014 vs. 4Q 2013
CHEMICALS ADJUSTED EARNINGS 1Q 2014 VS. 4Q 2013 $MM 29 5 21 316 261 4Q 2013 Olefins & Specialties, Other 1Q 2014 Adjusted Polyolefins Aromatics & Adjusted Earnings Styrenics Earnings 9
Slide 10: Refining Overview 1Q 2014
REFINING OVERVIEW 1Q 2014 Realized refining margin: $9.88/BBL Worldwide market capture: 79% Refining crude utilization: 90% Clean product yield: 84% Advantaged U.S. crude slate: 91% Annualized YTD ROCE: 9% 10
Slide 11: Refining Adjusted Earnings 1Q 2014 vs. 4Q 2013
REFINING ADJUSTED EARNINGS 1Q 2014 VS. 4Q 2013 $MM 155 (108) 87 (157) 418 (89) 306 4Q 2013 Atlantic Gulf Coast Central Western / Other 1Q 2014 Adjusted Basin / Corridor Pacific Refining Adjusted Earnings Europe Earnings 11
Slide 12: Refining Margins – Market vs. Realized 1Q 2014
REFINING MARGINS – MARKET VS. REALIZED 1Q 2014 WORLDWIDE REFINING $/BBL (0.69) 4.18 (0.91) 12.44 (5.14) 9.88 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Avg. Market Crude: $104.46/BBL 90% Crude Capacity Utilization 79% Market Capture 12
Slide 13: Refining U.S. Advantaged Crude Slate
REFINING U.S. ADVANTAGED CRUDE SLATE QUARTERLY ANNUAL Total 68% 66% 94% 91% 52% 62% 74% 91% Total Other Light/Medium 24% 22% 22% Other Light/Medium 6% Tight Oil* 15% 15% Tight Oil* 14% 14% 15% 14% 7% 3% Other Heavy 24% 24% 25% 24% 27% 24% 24% Other Heavy 26% Canadian Heavy Canadian Heavy 12% 12% 13%
Slide 14: Marketing and Specialties Overview 1Q 2014
MARKETING AND SPECIALTIES OVERVIEW 1Q 2014 Worldwide marketing margin: 3.7 cpg Specialties: Lower margins Annualized YTD ROCE: 22% 14
Slide 15: Marketing and Specialties Adjusted Earnings 1Q 2014 vs. 4Q 2013
MARKETING AND SPECIALTIES ADJUSTED EARNINGS 1Q 2014 VS. 4Q 2013 $MM 39 (7) 137 105 4Q 2013 Marketing Specialties 1Q 2014 Adjusted & Other Adjusted Earnings Earnings 15
Slide 16: Corporate and Other Adjusted Net Loss 1Q 2014 vs. 4Q 2013
CORPORATE AND OTHER ADJUSTED NET LOSS 1Q 2014 VS. 4Q 2013 $MM 4Q 2013 1Q 2014 Adjusted Net Interest Corporate Adjusted Net Loss Expense Overhead Other Net Loss (81) (97) 13 3 0 16
Slide 17: Company Cash Flow 1Q 2014
COMPANY CASH FLOW 1Q 2014 $B 1.2 1.0 (0.6) (0.2) (0.4) (0.6) (0.5) 5.4 5.3 December 31 Adjusted Adjusted Special Capital Dividends Share PSPI Share March 31 Cash CFO Working WRB Expenditures Repurchases Exchange Cash Balance* Capital Distribution & Investments Balance* & Other * Includes cash and ca
Slide 18: Capital Structure 1Q 2013 – 1Q 2014
CAPITAL STRUCTURE 1Q 2013 – 1Q 2014 25% 23% 20% - 30% 22% 22% 22% 21.4 21.7 22.0 22.4 21.8 7.0 6.5 6.2 6.2 6.2 1Q 2013 2Q 2013 3Q 2013 4Q 2013 1Q 2014 Equity $B Debt $B Debt to Capital 18
Slide 19: Outlook
OUTLOOK 19
Slide 20: Questions and Answers
PHILLIPS 66 FIRST QUARTER 2014 CONFERENCE CALL Questions and Answers
Slide 21: Appendix
PHILLIPS 66 FIRST QUARTER 2014 CONFERENCE CALL Appendix
Slide 22: Annual Sensitivities
ANNUAL SENSITIVITIES 2014 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 Chain Margin (Ethylene, Polyethylene, NAO) 35 Worldwide Refining (assuming 94% refining utilization) $1/BBL Increase
Slide 23: Refining Margins – Atlantic Basin / Europe 1Q 2014
REFINING MARGINS – MARKET VS. REALIZED 1Q 2014 ATLANTIC BASIN / EUROPE $/BBL Brent: $108.22/BBL 94% Crude Capacity Utilization 69% Market Capture 0.52 (2.04) (1.55) (0.30) 10.83 7.46 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – Dated Brent / Gasoline 8
Slide 24: Refining Margins – Gulf Coast 1Q 2014
REFINING MARGINS – MARKET VS. REALIZED 1Q 2014 GULF COAST $/BBL LLS: $104.43/BBL 84% Crude Capacity Utilization 89% Market Capture 1.46 (0.53) 4.52 9.71 8.64 (6.52) Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – LLS / Gasoline 85 CBOB / Diesel 61 8ppm 24
Slide 25: Refining Margins – Central Corridor 1Q 2014
REFINING MARGINS – MARKET VS. REALIZED 1Q 2014 CENTRAL CORRIDOR $/BBL WTI: $98.75/BBL 96% Crude Capacity Utilization 87% Market Capture 9.74 (1.32) (4.73) 17.41 (5.89) 15.21 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – WTI / Gasoline Unl Sub Octane Gro
Slide 26: Refining Margins – Western / Pacific 1Q 2014
REFINING MARGINS – MARKET VS. REALIZED 1Q 2014 WESTERN / PACIFIC $/BBL ANS: $105.74/BBL 90% Crude Capacity Utilization 51% Market Capture (1.34) 5.19 13.68 (4.00) (6.51) 7.02 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 1Q 2014 vs. 1Q 2013
COMPANY ADJUSTED EARNINGS 1Q 2014 VS. 1Q 2013 $MM 77 34 14 (585) (67) 1,393 866 1Q 2013 Midstream Chemicals Refining Marketing Corporate 1Q 2014 Adjusted & Specialties & Other Adjusted Earnings Earnings 188 316 306 137 (81) 1Q 2014 Adjusted Earnings 27
Slide 28: Midstream Adjusted Earnings 1Q 2014 vs. 1Q 2013
MIDSTREAM ADJUSTED EARNINGS 1Q 2014 VS. 1Q 2013 $MM 33 27 17 188 111 1Q 2013 Transportation DCP NGL 1Q 2014 Adjusted Midstream Adjusted Earnings Earnings 28
Slide 29: Chemicals Adjusted Earnings 1Q 2014 vs. 1Q 2013
CHEMICALS ADJUSTED EARNINGS 1Q 2014 VS. 1Q 2013 $MM 17 30 (13) 316 282 1Q 2013 Olefins & Specialties, Other 1Q 2014 Adjusted Polyolefins Aromatics & Adjusted Earnings Styrenics Earnings 29
Slide 30: Refining Adjusted Earnings 1Q 2014 vs. 1Q 2013
REFINING ADJUSTED EARNINGS 1Q 2014 VS. 1Q 2013 $MM 42 (72) 891 (363) (108) (84) 306 1Q 2013 Atlantic Gulf Central Western / Other 1Q 2014 Adjusted Basin / Coast Corridor Pacific Refining Adjusted Earnings Europe Earnings 30
Slide 31: Marketing and Specialties Adjusted Earnings 1Q 2014 vs. 1Q 2013
MARKETING AND SPECIALTIES ADJUSTED EARNINGS 1Q 2014 VS. 1Q 2013 $MM (64) (3) 204 137 1Q 2013 Marketing Specialties 1Q 2014 Adjusted & Other Adjusted Earnings Earnings 31
Slide 32: Corporate and Other Adjusted Net Loss 1Q 2014 vs. 1Q 2013
CORPORATE AND OTHER ADJUSTED NET LOSS 1Q 2014 VS. 1Q 2013 $MM 1Q 2013 1Q 2014 Adjusted Net Interest Corporate Adjusted Net Loss Expense Overhead Other Net Loss (81) (95) 18 2 (6) 32
Slide 33: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2014 2013 Mar YTD 1Q 4Q Mar YTD 1Q Phillips 66 Net Income (Loss) Attributable to Phillips 66 $ 1,572 $ 1,572 $ 826 $ 1,407 $ 1,407 Adjustments: Net (gain) loss on asset sales - - - - - Impairments - - - - - Exit of business line - - -
Slide 34: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2014 2013 Mar YTD 1Q 4Q Mar YTD 1Q Midstream Net Income (Loss) Attributable to Phillips 66 $ 188 $ 188 $ 121 $ 111 $ 111 Adjustments: Impairments - - - - - Pending claims and settlements - - - - - Adjusted Net Income (Loss) Attributabl
Slide 35: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2014 2013 2013 Mar YTD 1Q 4Q Mar YTD 1Q Refining Net Income (Loss) Attributable to Phillips 66 $ 306 $ 306 $ 418 $ 904 $ 904 Adjustments: Net (gain) loss on asset sales - - - - - Impairments - - - - - Tax law impacts - - - (13) (13) Pe
Slide 36: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Marketing 2014 YTD Phillips 66 Midstream Chemicals Refining & Specialties Numerator ($MM) Net Income 1,578 194 316 306 137 After-tax interest expense 44 - - - - GAAP ROCE earnings 1,622 194 316 306 137 Special Items (706) - - - - Adjusted ROCE earnings 916 194 316 306 137 De
Slide 37: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars 2014 1Q Net Cash Provided by Operating Activities $ 1,398 Working capital adjustments Working capital (123) Deferred tax impact from certain transactions on current taxes payable 468 Adjusted Working Capital 345 WRB special distribution (760) Adjusted Cas