Phillips 66 · NYSE:PSX
Phillips 66 — Q4 2013 Earnings Presentation
39 slides from Phillips 66's earnings presentation, Jan 29, 2014
Slide 1: Phillips 66 Fourth Quarter Conference Call
PHILLIPS 66 FOURTH QUARTER CONFERENCE CALL January 29, 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 4Q 2013
COMPANY OVERVIEW 4Q 2013 Adjusted Earnings: $808 MM Adjusted EPS: $1.34 Operating cash flow*: $1,257 MM Dividends paid: $232 MM Common shares repurchased: $644 MM 2013 ROCE: 14% * Excluding working capital changes & net cash provided by discontinued operating activities 4
Slide 5: Company Adjusted Earnings 4Q 2013 vs. 3Q 2013
COMPANY ADJUSTED EARNINGS 4Q 2013 VS. 3Q 2013 $MM 452 16 (153) (27) (1) 808 521 3Q 2013 Midstream Chemicals Refining Marketing Corporate 4Q 2013 Adjusted & Specialties & Other Adjusted Earnings Earnings 121 261 450 73 (97) 4Q 2013 Adjusted Earnings 5
Slide 6: Midstream Overview 4Q 2013
MIDSTREAM OVERVIEW 4Q 2013 Transportation: Stable throughput volumes & fees DCP Midstream: Lower equity gains & volumes NGL Operations & Other: Higher margins & inventory impacts 2013 ROCE: 15% 6
Slide 7: Midstream Adjusted Earnings 4Q 2013 vs. 3Q 2013
MIDSTREAM ADJUSTED EARNINGS 4Q 2013 VS. 3Q 2013 $MM (4) 27 (50) 148 121 3Q 2013 Transportation DCP NGL Operations 4Q 2013 Adjusted Midstream & Other Adjusted Earnings Earnings 7
Slide 8: Chemicals Overview 4Q 2013
CHEMICALS OVERVIEW 4Q 2013 Olefins & Polyolefins: 95% utilization Specialties, Aromatics & Styrenics: Benzene turnaround 2013 ROCE: 26% 8
Slide 9: Chemicals Adjusted Earnings 4Q 2013 vs. 3Q 2013
CHEMICALS ADJUSTED EARNINGS 4Q 2013 VS. 3Q 2013 $MM 23 (24) 0 262 261 3Q 2013 Olefins & Specialties, Corporate 4Q 2013 Adjusted Polyolefins Aromatics & & Other Adjusted Earnings Styrenics Earnings 9
Slide 10: Refining Overview 4Q 2013
REFINING OVERVIEW 4Q 2013 Realized refining margin: $10.75/BBL Worldwide market capture: 112% Refining crude utilization: 92% Clean product yield: 84% Advantaged U.S. crude slate: 94% 2013 ROCE: 13% Worldwide market capture: 112% 10
Slide 11: Refining Adjusted Earnings 4Q 2013 vs. 3Q 2013
REFINING ADJUSTED EARNINGS 4Q 2013 VS. 3Q 2013 $MM 136 259 (185) (25) 267 450 (2) 3Q 2013 Gulf Coast Central Western / Atlantic Other 4Q 2013 Adjusted Corridor Pacific Basin / Refining Adjusted Earnings Europe Earnings 11
Slide 12: Refining Margins – Market vs. Realized 4Q 2013
REFINING MARGINS – MARKET VS. REALIZED 4Q 2013 WORLDWIDE REFINING $/BBL 1.77 0.30 4.60 10.75 9.62 (5.54) Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Avg. Market Crude: $103.10/BBL 92% Crude Capacity Utilization 112% Market Capture 12
Slide 13: Refining U.S. Advantaged Crude Slate
REFINING U.S. ADVANTAGED CRUDE SLATE 2011 – 2013 2013 by QUARTER 2011 to 2013 Total 68% 68% 66% 94% 52% 62% 74% Total Other Light/Medium 24% 6% Other Light/Medium 14% Tight Oil* Tight Oil* 14% 15% 7% 14% 14% 2% Other Heavy 23% 27% 24% Other Heavy 24% 25% 24% 27% Canadian Heavy 12% 12% 10% 12% Canadi
Slide 14: Marketing and Specialties Overview 4Q 2013
MARKETING AND SPECIALTIES OVERVIEW 4Q 2013 Worldwide marketing margin: 2.8 cpg Specialties: Lower volumes 2013 ROCE: 27% 14
Slide 15: Marketing and Specialties Adjusted Earnings 4Q 2013 vs. 3Q 2013
MARKETING AND SPECIALTIES ADJUSTED EARNINGS 4Q 2013 VS. 3Q 2013 $MM 226 (145) (8) 73 3Q 2013 Marketing Specialties 4Q 2013 Adjusted & Other Adjusted Earnings Earnings 15
Slide 16: Corporate and Other Adjusted Net Loss 4Q 2013 vs. 3Q 2013
CORPORATE AND OTHER ADJUSTED NET LOSS 4Q 2013 VS. 3Q 2013 $MM 3Q 2013 4Q 2013 Adjusted Net Interest Corporate Adjusted Net Loss Expense Overhead Other Net Loss (97) (113) 26 1 (11) 16
Slide 17: Company Cash Flow 4Q 2013
COMPANY CASH FLOW 4Q 2013 $B 1.3 (0.4) (0.6) (0.2) (0.6) 5.9 5.4 September 30 CFO Working Capital Dividends Share December 31 Cash (excluding Capital Expenditures Repurchases Cash Balance* working & Investments Balance* capital) * Includes cash and cash equivalents. $0.4 B of the balance relates to
Slide 18: Capital Structure 2Q 2012 – 4Q 2013
CAPITAL STRUCTURE 2Q 2012 – 4Q 2013 30% 28% 25% 25% 23% 20% - 30% 22% 22% 21.4 21.7 22.0 22.4 20.6 20.8 19.0 8.0 8.0 7.0 7.0 6.5 6.2 6.2 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013 3Q 2013 4Q 2013 Equity $B Debt $B Debt to Capital 18
Slide 19: Sources and Uses of Cash 2013
SOURCES AND USES OF CASH 2013 $B 6.0 (1.8) (0.8) 0.4 1.2 0.1 (2.2) (1.0) 5.4 3.5 3.8 Ending Cash From Capital Dividends Share Debt Other Ending Cash Asset PSXP Ending Cash Operations Program Repurchases (excl. Asset Sales IPO Net Cash 2012 Sales & PSXP) Proceeds 2013 19
Slide 20: Company Adjusted Earnings 2013
COMPANY ADJUSTED EARNINGS 2013 $MM 781 1,838 (431) 3,643 986 469 Midstream Chemicals Refining Marketing Corporate 2013 Adjusted & Specialties & Other Earnings 20
Slide 21: Outlook
OUTLOOK 21
Slide 22: Questions and Answers
PHILLIPS 66 FOURTH QUARTER 2013 CONFERENCE CALL Questions and Answers
Slide 23: Appendix
PHILLIPS 66 FOURTH QUARTER 2013 CONFERENCE CALL Appendix
Slide 24: Sensitivities 2014
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 Olefins Chain Margin (Ethylene, Polyethylene, NAO) 35 Worldwide Refining (assuming 94% refining utilization) $1/BBL Increase
Slide 25: Refining Margins – Atlantic Basin / Europe 4Q 2013
REFINING MARGINS – MARKET VS. REALIZED 4Q 2013 ATLANTIC BASIN / EUROPE $/BBL Brent: $109.27/BBL 82% Crude Capacity Utilization 69% Market Capture 0.48 1.57 (2.39) 7.42 (1.96) 5.12 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – Dated Brent / Gasoline 83.7
Slide 26: Refining Margins – Gulf Coast 4Q 2013
REFINING MARGINS – MARKET VS. REALIZED 4Q 2013 GULF COAST $/BBL LLS: $100.94/BBL 93% Crude Capacity Utilization 108% Market Capture 0.40 3.84 2.88 9.09 9.84 (6.37) Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – LLS / Gasoline 85 CBOB / Diesel 61 8ppm 26
Slide 27: Refining Margins – Central Corridor 4Q 2013
REFINING MARGINS – MARKET VS. REALIZED 4Q 2013 CENTRAL CORRIDOR $/BBL WTI: $97.38/BBL 100% Crude Capacity Utilization 174% Market Capture 3.45 10.39 0.27 18.50 10.66 (6.27) Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – WTI / Gasoline Unl 87 Group 3 / UL
Slide 28: Refining Margins – Western / Pacific 4Q 2013
REFINING MARGINS – MARKET VS. REALIZED 4Q 2013 WESTERN / PACIFIC $/BBL ANS: $104.67/BBL 95% Crude Capacity Utilization 77% Market Capture 6.63 (0.24) (2.39) 12.34 (6.83) 9.51 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – ANS Spot / Los Angeles CARBOB /
Slide 29: Company Adjusted Earnings 4Q 2013 vs. 4Q 2012
COMPANY ADJUSTED EARNINGS 4Q 2013 VS. 4Q 2012 $MM 50 15 (510) (40) (5) 1,298 808 4Q 2012 Midstream Chemicals Refining Marketing Corporate 4Q 2013 Adjusted & Specialties & Other Adjusted Earnings Earnings 121 261 450 73 (97) 4Q 2013 Adjusted Earnings 29
Slide 30: Midstream Adjusted Earnings 4Q 2013 vs. 4Q 2012
MIDSTREAM ADJUSTED EARNINGS 4Q 2013 VS. 4Q 2012 $MM 15 36 (1) 121 71 4Q 2012 Transportation DCP NGL Operations 4Q 2013 Adjusted Midstream & Other Adjusted Earnings Earnings 30
Slide 31: Chemicals Adjusted Earnings 4Q 2013 vs. 4Q 2012
CHEMICALS ADJUSTED EARNINGS 4Q 2013 VS. 4Q 2012 $MM 26 15 (26) 246 261 4Q 2012 Olefins & Specialties, Corporate 4Q 2013 Adjusted Polyolefins Aromatics & & Other Adjusted Earnings Styrenics Earnings 31
Slide 32: Refining Adjusted Earnings 4Q 2013 vs. 4Q 2012
REFINING ADJUSTED EARNINGS 4Q 2013 VS. 4Q 2012 $MM 34 (285) (132) (35) 960 (92) 450 4Q 2012 Atlantic Gulf Central Western / Other 4Q 2013 Adjusted Basin / Coast Corridor Pacific Refining Adjusted Earnings Europe Earnings 32
Slide 33: Marketing and Specialties Adjusted Earnings 4Q 2013 vs. 4Q 2012
MARKETING AND SPECIALTIES ADJUSTED EARNINGS 4Q 2013 VS. 4Q 2012 $MM (33) (7) 113 73 4Q 2012 Marketing Specialties 4Q 2013 Adjusted & Other Adjusted Earnings Earnings 33
Slide 34: Corporate and Other Adjusted Net Loss 4Q 2013 vs. 4Q 2012
CORPORATE AND OTHER ADJUSTED NET LOSS 4Q 2013 VS. 4Q 2012 $MM 4Q 2012 4Q 2013 Adjusted Net Interest Corporate Adjusted Net Loss Expense Overhead Other Net Loss (92) (97) 7 (6) (6) 34
Slide 35: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2013 2012 Year 4Q 3Q Year 4Q Phillips 66 Net Income (Loss) Attributable to Phillips 66 $ 3,726 $ 826 $ 535 $ 4,124 $ 708 Adjustments: Net (gain) loss on asset sales (23) - - (106) - Impairments - - - 979 580 Exit of business line 34 -
Slide 36: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2013 2012 Year 4Q 3Q Year 4Q Midstream Net Income (Loss) Attributable to Phillips 66 $ 469 $ 121 $ 148 $ 53 $ 92 Adjustments: Impairments - - - 330 - Pending claims and settlements - - - (23) (23) Hurricane-related costs - - - 2 2 Adju
Slide 37: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2013 2012 Year 4Q 3Q Year 4Q Refining Net Income (Loss) Attributable to Phillips 66 $ 1,851 $ 450 $ (2) $ 3,217 $ 363 Adjustments: Net (gain) loss on asset sales - - - (104) - Impairments - - - 606 564 Tax law impacts (13) - - - - Pend
Slide 38: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Marketing 2013 Phillips 66 Midstream Chemicals Refining & Specialties Numerator ($MM) Net Income 3,743 486 986 1,851 790 After-tax interest expense 178 - - - - GAAP ROCE earnings 3,921 486 986 1,851 790 Special Items (83) - - (13) (9) Adjusted ROCE earnings 3,838 486 986 1,8
Slide 39: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars 2013 4Q Cash Flows from Operating Activities Net Cash provided by continuing operating activities, excluding working capital $ 1,257 Working capital adjustments Decrease (increase) in accounts and notes receivable (54) Decrease (increase) in inventories 1