Slide 1: Third Quarter 2019 Conference Call
Ponca City Refinery Ponca City, Oklahoma October 25, 2019 THIRD QUARTER 2019 CONFERENCE CALL 1 phillips66.com | NYSE: PSX
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 the Strategy
EXECUTING THE STRATEGY Beaumont Terminal, Nederland, Texas 3 phillips66.com | NYSE: PSX
Slide 4: Overview
3Q 2019 OVERVIEW $MM (Unless Otherwise Noted) 3Q 2019 Adjusted earnings $ 1,402 Adjusted EPS1 3.11 Operating cash flow excluding working capital2 1,813 Capital expenditures and investments 867 Shareholder distributions3 841 Common shares outstanding at September 30 444 MM 1) Dollars per share 2) Exc
Slide 5: Adjusted Earnings
3Q 2019 ADJUSTED EARNINGS $MM 17 145 27 (6) (15) (1) (144) 1,379 1,402 2Q 2019 Midstream Chemicals Refining Marketing Corporate Income Noncontrolling 3Q 2019 Adjusted & Specialties & Other Taxes Interests Adjusted Earnings Earnings 440 269 839 498 (178) (385) (81) 3Q 2019 Adjusted Pre-Tax Income (Lo
Slide 6: 3Q 2019 Midstream Adjusted Pre-Tax Income
3Q 2019 MIDSTREAM ADJUSTED PRE-TAX INCOME $MM Record Transportation and NGL & Other results 26 3 (12) Initiated line fill on Gray Oak Pipeline 423 440 Advanced construction of Sweeny Fracs 2, 3 and 4 2Q 2019 Transportation NGL & DCP 3Q 2019 Adjusted Other Midstream Adjusted Pre-Tax Income Pre-Tax In
Slide 7: 3Q 2019 Chemicals Adjusted Pre-Tax Income
3Q 2019 CHEMICALS ADJUSTED PRE-TAX INCOME $MM 97% O&P utilization 2 1 (9) Higher polyethylene sales volumes 275 269 Continued strong cash distributions 2Q 2019 Olefins & Specialties, Other 3Q 2019 Adjusted Polyolefins Aromatics Adjusted Pre-Tax Income & Styrenics Pre-Tax Income 251 36 (18) 3Q 2019 7
Slide 8: 3Q 2019 Refining Adjusted Pre-Tax Income
3Q 2019 REFINING ADJUSTED PRE-TAX INCOME $MM 97% crude utilization 21 (38) (112) (15) 84% clean product yield 983 $11.18/BBL realized margin 839 $120 MM turnaround costs 2Q 2019 Atlantic Gulf Central West 3Q 2019 Adjusted Basin / Coast Corridor Coast Adjusted Pre-Tax Income Europe Pre-Tax Income 279
Slide 9: Refining Margins – Market vs. Realized
3Q 2019 REFINING MARGINS – MARKET VS. REALIZED WORLDWIDE REFINING $/BBL 0.03 (2.00) (1.07) (0.38) 14.60 11.18 3Q 2019 Configuration Secondary Feedstock Other 3Q 2019 Market Products Realized 3:2:1 Margin Avg Market Crude: $60.37/BBL 77% Market Capture 9 phillips66.com | NYSE: PSX
Slide 10: 3Q 2019 Marketing and Specialties Adjusted Pre-Tax Income
3Q 2019 MARKETING AND SPECIALTIES ADJUSTED PRE-TAX INCOME $MM Strong global margins 146 (1) Reimaged 373 branded sites 498 353 Refined products exports of 220 MBPD 2Q 2019 Marketing Specialties 3Q 2019 Adjusted & Other Adjusted Pre-Tax Income Pre-Tax Income 440 58 3Q 2019 10 phillips66.com | NYSE: P
Slide 11: 3Q 2019 Corporate and Other Adjusted Pre-Tax Loss
3Q 2019 CORPORATE AND OTHER ADJUSTED PRE-TAX LOSS $MM 2Q 2019 Corporate 3Q 2019 Adjusted Net Interest Overhead Adjusted Pre-Tax Loss Expense & Other Pre-Tax Loss (178) (205) 20 7 11 phillips66.com | NYSE: PSX
Slide 12: Cash Flow
3Q 2019 CASH FLOW $B 0.5 1.8 (0.1) (0.9) (0.8) 2.3 1.8 June 30, CFO Working Debt Capital Shareholder September 30, 2019 (excluding Capital Expenditures Distributions 2019 Cash Working & Investments Cash Balance1 Capital) Balance1 1) Includes cash and cash equivalents 12 phillips66.com | NYSE: PSX
Slide 13: 4Q 2019 Outlook
4Q 2019 OUTLOOK Global Olefins and Polyolefins utilization Mid-90% Refining crude utilization Mid-90% Refining turnaround expenses (pre-tax) $170 MM – $210 MM Corporate and Other costs (pre-tax) $210 MM – $230 MM Freeport Terminal LPG Facility Freeport, Texas 13 phillips66.com | NYSE: PSX
Slide 14: Questions and Answers
Beaumont Terminal Nederland, Texas QUESTIONS AND ANSWERS phillips66.com | NYSE: PSX
Slide 15: Appendix
Beaumont Terminal Nederland, Texas APPENDIX phillips66.com | NYSE: PSX
Slide 16: 2019 Estimated Sensitivities
2019 ESTIMATED SENSITIVITIES Annual EBITDA $MM Midstream - DCP (net to Phillips 66) 10¢/Gal Increase in NGL price 6 10¢/MMBtu Increase in Natural Gas price 1 $1/BBL Increase in WTI price 1 Chemicals - CPChem (net to Phillips 66) 1¢/Lb Increase in Chain Margin (Ethylene, Polyethylene, NAO) 65 Worldwi
Slide 17: Capital Structure
CAPITAL STRUCTURE CONSOLIDATED PSX EXCLUDING PSXP 31% 26% 30% 30% 30% 29% 25% 25% 25% 25% 27% 27% 26% 26% 22% 22% 24% 21% 21% 23% 18% 20% 17% 14% 25.1 24.7 24.3 24.8 24.9 27.4 27.2 26.7 27.3 27.1 22.4 23.7 11.2 11.3 11.4 11.9 10.1 10.1 7.7 8.1 8.1 8.1 8.1 7.2 2.7 3.1 3.0 2.3 2.7 2.9 3.0 1.7 1.3 1.8
Slide 18: Refining Margins – Atlantic Basin / Europe
3Q 2019 REFINING MARGINS – MARKET VS. REALIZED ATLANTIC BASIN / EUROPE $/BBL Brent: $61.94/BBL 2.47 95% crude utilization 0.10 (1.41) (3.38) 84% market capture 13.70 11.48 3Q 2019 Configuration Secondary Feedstock Other 3Q 2019 Market Products Realized 3:2:1 Margin Market 3:2:1 - Dated Brent / Gasol
Slide 19: Refining Margins – Gulf Coast
3Q 2019 REFINING MARGINS – MARKET VS. REALIZED GULF COAST $/BBL LLS: $60.64/BBL 0.31 95% crude utilization (1.81) (0.58) (0.82) 11.24 74% market capture 8.34 3Q 2019 Configuration Secondary Feedstock Other 3Q 2019 Market Products Realized 3:2:1 Margin Market 3:2:1 - LLS / Gasoline 85 CBOB / Diesel 6
Slide 20: Refining Margins – Central Corridor
3Q 2019 REFINING MARGINS – MARKET VS. REALIZED CENTRAL CORRIDOR $/BBL WTI: $56.44/BBL 1.71 2.23 (1.58) 100% crude utilization (3.68) 17.31 15.99 92% market capture 3Q 2019 Configuration Secondary Feedstock Other 3Q 2019 Market Products Realized 3:2:1 Margin Market 3:2:1 - WTI / Gasoline Unl Sub Octa
Slide 21: Refining Margins – West Coast
3Q 2019 REFINING MARGINS – MARKET VS. REALIZED WEST COAST $/BBL ANS: $63.07/BBL 97% crude utilization (2.99) 1.20 (3.66) 19.11 53% market capture (3.55) 10.11 3Q 2019 Configuration Secondary Feedstock Other 3Q 2019 Market Products Realized 3:2:1 Margin Market 3:2:1 - ANS / Los Angeles CARBOB / Los A
Slide 22: vs. 3Q 2018 Adjusted Earnings
3Q 2019 VS. 3Q 2018 ADJUSTED EARNINGS $MM 128 6 82 113 45 (4) (424) 1,456 1,402 3Q 2018 Midstream Chemicals Refining Marketing Corporate Income Noncontrolling 3Q 2019 Adjusted & Specialties & Other Taxes Interests Adjusted Earnings Earnings 440 269 839 498 (178) (385) (81) 3Q 2019 Adjusted Pre-Tax I
Slide 23: 3Q 2019 vs. 3Q 2018 Midstream Adjusted Pre-Tax Income
3Q 2019 VS. 3Q 2018 MIDSTREAM ADJUSTED PRE-TAX INCOME $MM 95 (6) 39 440 312 3Q 2018 Transportation NGL & Other DCP 3Q 2019 Adjusted Midstream Adjusted Pre-Tax Income Pre-Tax Income 248 169 23 3Q 2019 23 phillips66.com | NYSE: PSX
Slide 24: 3Q 2019 vs. 3Q 2018 Chemicals Adjusted Pre-Tax Income
3Q 2019 VS. 3Q 2018 CHEMICALS ADJUSTED PRE-TAX INCOME $MM 26 (15) (5) 263 269 3Q 2018 Olefins & Specialties, Other 3Q 2019 Adjusted Polyolefins Aromatics & Adjusted Pre-Tax Income Styrenics Pre-Tax Income 251 36 (18) 3Q 2019 24 phillips66.com | NYSE: PSX
Slide 25: 3Q 2019 vs. 3Q 2018 Refining Adjusted Pre-Tax Income
3Q 2019 VS. 3Q 2018 REFINING ADJUSTED PRE-TAX INCOME $MM 63 (37) (438) (12) 1,263 839 3Q 2018 Atlantic Gulf Central West Coast 3Q 2019 Adjusted Basin / Coast Corridor Adjusted Pre-Tax Income Europe Pre-Tax Income 279 184 408 (32) 3Q 2019 25 phillips66.com | NYSE: PSX
Slide 26: 3Q 2019 vs. 3Q 2018 Marketing and Specialties Adjusted Pre-Tax Income
3Q 2019 VS. 3Q 2018 MARKETING AND SPECIALTIES ADJUSTED PRE-TAX INCOME $MM 117 (4) 498 385 3Q 2018 Marketing Specialties 3Q 2019 Adjusted & Other Adjusted Pre-Tax Income Pre-Tax Income 440 58 3Q 2019 26 phillips66.com | NYSE: PSX
Slide 27: 3Q 2019 vs. 3Q 2018 Corporate and Other Adjusted Pre-Tax Loss
3Q 2019 VS. 3Q 2018 CORPORATE AND OTHER ADJUSTED PRE-TAX LOSS $MM 3Q 2018 Corporate 3Q 2019 Adjusted Net Interest Overhead Adjusted Pre-Tax Loss Expense & Other Pre-Tax Loss (178) (223) 29 16 27 phillips66.com | NYSE: PSX
Slide 28: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 Sep YTD 3Q 2Q Sep YTD 3Q Phillips 66 Consolidated Earnings $ 2,340 712 1,424 3,355 1,492 Pre-Tax Adjustments: Pending claims and settlements (21) — — 21 21 Pension settlement expense — — — 49 49 Impairments 853 853 — — — Impa
Slide 29: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 Sep YTD 3Q 2Q Sep YTD 3Q Midstream Pre-Tax Income (Loss) $ 279 (460) 423 802 284 Pre-Tax Adjustments: Pending claims and settlements — — — 21 21 Pension settlement expense — — — 7 7 Impairments by equity affiliates 47 47 — —
Slide 30: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 Sep YTD 3Q 2Q Sep YTD 3Q Refining Pre-Tax Income $ 1,641 856 983 2,534 1,232 Pre-Tax Adjustments: Pending claims and settlements (21) — — — — Asset dispositions (17) (17) — — — Certain tax impacts — — — (2) (1) Pension settle
Slide 31: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 Sep YTD 3Q 2Q Sep YTD 3Q Midstream - Transportation Pre-Tax Income $ 696 248 245 536 209 Pre-Tax Adjustments: None — — — — — Adjusted Pre-Tax Income $ 696 248 245 536 209 Midstream - NGL and Other Pre-Tax Income $ 402 169 143
Slide 32: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 Sep YTD 3Q 2Q Sep YTD 3Q Refining - Atlantic Basin / Europe Pre-Tax Income $ 547 296 258 265 209 Pre-Tax Adjustments: Certain tax impacts — — — (1) (1) Asset dispositions (17) (17) — — — Pension settlement expense — — — 8 8 A
Slide 33: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 Sep YTD 3Q 2Q Sep YTD 3Q Refining - Central Corridor Pre-Tax Income $ 1,005 408 520 1,632 839 Pre-Tax Adjustments: Pending claims and settlements (21) — — — — Pension settlement expense — — — 7 7 Adjusted Pre-Tax Income $ 984
Slide 34: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 Sep YTD 3Q 2Q Sep YTD 3Q Marketing and Specialties - Marketing and Other Pre-Tax Income $ 872 440 294 781 361 Pre-Tax Adjustments: Certain tax impacts — — — (113) (44) Pension settlement expense — — — 6 6 Adjusted Pre-Tax Inc
Slide 35: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars (Except as Indicated) 3Q 2019 Atlantic Basin/ Central Europe Gulf Coast Corridor West Coast Worldwide Realized Refining Margins Income (loss) before income taxes $ 296 184 408 (32) 856 Plus: Taxes other than income taxes 12 23 10 23 68 Depreciation, amort
Slide 36: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS 2019 September YTD Numerator ($MM) Net Income $ 2,567 After-tax interest expense 271 GAAP ROCE earnings 2,838 After-tax special items 628 Adjusted ROCE earnings 3,466 Denominator ($MM) GAAP average capital employed1 38,665 2019 Annualized GAAP ROCE 10% 2019 Annualized Adjust
Slide 37: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars September 30, 2019 Phillips 66 Phillips 66 Adjusted Consolidated Partners1 Phillips 66 Total Debt $ 11,925 3,815 8,110 Total Equity 27,092 2,201 24,891 Debt-to-Capital Ratio 31% 25% Total Cash & Cash Equivalents $ 2,268 655 1,613 Net Debt-to-Capital Ratio
Slide 38: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Millions of Dollars 3Q 2019 2019 September YTD Growth Sustaining Total Growth Sustaining Total Capital Expenditures and Investments Midstream $ 444 80 524 $ 1,135 167 1,302 Refining 113 141 254 270 375 645 Marketing and Specialties 11 23 34 31 45 76 Corpo
Slide 39: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars 3Q 2019 Effective Tax Rates Income before income taxes $ 943 Special items 925 Adjusted income before income taxes $ 1,868 Income tax expense $ 150 Special items 235 Adjusted income tax expense $ 385 GAAP effective tax rate 15.9 % Adjusted effective tax r