Phillips 66 · NYSE:PSX
Phillips 66 — Q1 2019 Earnings Presentation
37 slides from Phillips 66's earnings presentation, Apr 30, 2019
Slide 1: First Quarter 2019 Conference Call
Ponca City Refinery Ponca City, OK April 30, 2019 FIRST 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 New fractionation site and Sweeny Refinery, Old Ocean, Texas 3 phillips66.com | NYSE: PSX
Slide 4: 1Q 2019 Overview
1Q 2019 OVERVIEW $MM (Unless Otherwise Noted) 1Q 2019 Adjusted earnings $ 187 Adjusted EPS1 0.40 Operating cash flow excluding working capital2 923 Adjusted capital spending3 675 Shareholder distributions4 708 Common shares outstanding at March 31 454 MM 1) Dollars per share 2) Excludes working capi
Slide 5: 1Q 2019 Adjusted Earnings
1Q 2019 ADJUSTED EARNINGS $MM 75 (93) 2,260 558 10 187 (2,227) (387) (9) 4Q 2018 Midstream Chemicals Refining Marketing Corporate Income Noncontrolling 1Q 2019 Adjusted & Specialties & Other Taxes Interests Adjusted Earnings Earnings 316 227 (219) 205 (210) (66) (66) 1Q 2019 Adjusted Pre-Tax Income
Slide 6: Midstream
MIDSTREAM $MM Transportation volumes impacted by lower refinery utilization (31) (32) (30) Record Sweeny Hub operating performance 409 316 Strong Sand Hills Pipeline volumes following recent expansion 4Q 2018 Transportation NGL & DCP 1Q 2019 Adjusted Other Midstream Adjusted Pre-Tax Income Pre-Tax I
Slide 7: Chemicals
CHEMICALS $MM New Cedar Bayou ethane cracker capacity increased to 10 4 61 1.7 million metric tons per year 98% O&P capacity utilization 227 152 Continued strong cash distributions 4Q 2018 Olefins & Specialties, Other 1Q 2019 Adjusted Polyolefins Aromatics Adjusted Pre-Tax Income & Styrenics Pre-Tax
Slide 8: Refining
REFINING $MM 84% crude utilization (308) 85% clean product yield 2,008 (586) $7.23/BBL realized margin $148 MM pre-tax turnaround (1,132) (219) costs (201) 4Q 2018 Atlantic Gulf Central West 1Q 2019 Adjusted Basin / Coast Corridor Coast Adjusted Pre-Tax Income Europe Pre-Tax Loss (7) (118) 56 (150)
Slide 9: Refining Margins – Market vs. Realized
REFINING MARGINS – MARKET VS. REALIZED WORLDWIDE REFINING $/BBL 2.08 (0.26) (0.63) (3.73) 9.77 7.23 1Q 2019 Configuration Secondary Feedstock Other 1Q 2019 Market Products Realized 3:2:1 Margin Avg Market Crude: $61.17/BBL 74% Market Capture 9 phillips66.com | NYSE: PSX
Slide 10: Marketing and Specialties
MARKETING AND SPECIALTIES $MM Lower global marketing margins Re-imaged over 300 branded sites 592 3 Refined products exports of (390) 200 MBPD 205 4Q 2018 Marketing Specialties 1Q 2019 Adjusted & Other Adjusted Pre-Tax Income Pre-Tax Income 138 67 1Q 2019 10 phillips66.com | NYSE: PSX
Slide 11: 1Q 2019 Cash Flow
1Q 2019 CASH FLOW $B 0.9 0.1 (1.4) 3.0 (0.7) 0.1 (0.7) 1.3 December 31, CFO Working Debt Adjusted Shareholder Other March 31, 2018 (excluding Capital Capital Distributions 2019 Cash Working Spending2 Cash Balance1 Capital) Balance1 1) Includes cash and cash equivalents 2) Capital expenditures and in
Slide 12: 2Q 2019 Outlook
2Q 2019 OUTLOOK Global Olefins and Polyolefins Mid-90% Refining crude utilization Mid-90% Refining turnaround expenses (pre-tax) $70 MM – $90 MM Corporate and Other costs (pre-tax) $210 MM – $240 MM Beaumont Terminal Nederland, TX 12 phillips66.com | NYSE: PSX
Slide 13: Questions and Answers
Freeport Clipper QUESTIONS AND ANSWERS phillips66.com | NYSE: PSX
Slide 14: Appendix
Freeport Clipper Lake Charles Refinery APRIL 30, 2019 APPENDIX phillips66.com | NYSE: PSX
Slide 15: 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 16: Capital Structure
CAPITAL STRUCTURE CONSOLIDATED PSX EXCLUDING PSXP 30% 30% 26% 29% 25% 25% 27% 22% 24% 27% 23% 22% 18% 20% 17% 14% 25.1 24.7 24.3 27.4 27.2 26.7 22.4 23.7 10.1 10.1 11.2 11.3 7.7 7.2 8.1 8.1 1.3 1.3 2.7 3.1 3.0 2.7 2.9 3.0 2016 2017 2018 1Q 2016 2017 2018 1Q 2019 2019 Equity $B Debt $B Cash & Cash Eq
Slide 17: Refining Margins – Atlantic Basin / Europe
REFINING MARGINS – MARKET VS. REALIZED ATLANTIC BASIN / EUROPE $/BBL Brent: $63.20/BBL 1.79 0.79 80% crude capacity utilization (1.62) (0.41) 7.21 7.76 108% market capture 1Q 2019 Configuration Secondary Feedstock Other 1Q 2019 Market Products Realized 3:2:1 Margin Market 3:2:1 - Dated Brent / Gasol
Slide 18: Refining Margins – Gulf Coast
REFINING MARGINS – MARKET VS. REALIZED GULF COAST $/BBL LLS: $62.40/BBL 1.94 0.01 0.18 85% crude capacity utilization (3.21) 6.52 83% market capture 5.44 1Q 2019 Configuration Secondary Feedstock Other 1Q 2019 Market Products Realized 3:2:1 Margin Market 3:2:1 - LLS / Gasoline 85 CBOB / Diesel 62 10
Slide 19: Refining Margins – Central Corridor
REFINING MARGINS – MARKET VS. REALIZED CENTRAL CORRIDOR $/BBL WTI: $54.87/BBL 5.19 86% crude capacity (0.32) utilization (2.68) (6.75) 14.79 69% market capture 10.23 1Q 2019 Configuration Secondary Feedstock Other 1Q 2019 Market Products Realized 3:2:1 Margin Market 3:2:1 - WTI / Gasoline Unl Sub Oc
Slide 20: Refining Margins – West Coast
REFINING MARGINS – MARKET VS. REALIZED WEST COAST $/BBL ANS: $64.50/BBL 3.25 (1.12) 84% crude capacity utilization (3.28) 13.29 (5.89) 47% market capture 6.25 1Q 2019 Configuration Secondary Feedstock Other 1Q 2019 Market Products Realized 3:2:1 Margin Market 3:2:1 - ANS / Los Angeles CARBOB / Los A
Slide 21: 1Q 2019 vs. 1Q 2018 Adjusted Earnings
1Q 2019 VS. 1Q 2018 ADJUSTED EARNINGS $MM 36 (59) 512 54 2 (12) (329) (17) 187 1Q 2018 Midstream Chemicals Refining Marketing Corporate Income Noncontrolling 1Q 2019 Adjusted & Specialties & Other Taxes Interests Adjusted Earnings Earnings 316 227 (219) 205 (210) (66) (66) 1Q 2019 Adjusted Pre-Tax I
Slide 22: 1Q 2019 vs. 1Q 2018 Midstream Pre-Tax Income
1Q 2019 VS. 1Q 2018 MIDSTREAM PRE-TAX INCOME $MM 40 4 (8) 316 280 1Q 2018 Transportation NGL & Other DCP 1Q 2019 Adjusted Midstream Adjusted Pre-Tax Income Pre-Tax Income 203 90 23 1Q 2019 22 phillips66.com | NYSE: PSX
Slide 23: 1Q 2019 vs. 1Q 2018 Chemicals Pre-Tax Income
1Q 2019 VS. 1Q 2018 CHEMICALS PRE-TAX INCOME $MM (47) (1) (11) 286 227 1Q 2018 Olefins & Specialties, Other 1Q 2019 Adjusted Polyolefins Aromatics & Adjusted Pre-Tax Income Styrenics Pre-Tax Income 219 26 (18) 1Q 2019 23 phillips66.com | NYSE: PSX
Slide 24: 1Q 2019 vs. 1Q 2018 Refining Pre-Tax Income (Loss)
1Q 2019 VS. 1Q 2018 REFINING PRE-TAX INCOME (LOSS) $MM 101 110 (118) (219) (216) (96) 1Q 2018 Atlantic Gulf Central West Coast 1Q 2019 Adjusted Basin / Coast Corridor Adjusted Pre-Tax Income Europe Pre-Tax Loss (7) (118) 56 (150) 1Q 2019 24 phillips66.com | NYSE: PSX
Slide 25: 1Q 2019 vs. 1Q 2018 Marketing and Specialties Pre-Tax Income
1Q 2019 VS. 1Q 2018 MARKETING AND SPECIALTIES PRE-TAX INCOME $MM 8 (25) 222 205 1Q 2018 Marketing Specialties 1Q 2019 Adjusted & Other Adjusted Pre-Tax Income Pre-Tax Income 138 67 1Q 2019 25 phillips66.com | NYSE: PSX
Slide 26: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 1Q 4Q 1Q Phillips 66 Consolidated Earnings $ 204 2,240 524 Pre-Tax Adjustments: Pending claims and settlements (21) — — Pension settlement expense — 18 — Impairments by equity affiliates — 28 — Certain tax impacts — (4) (15)
Slide 27: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 1Q 4Q 1Q Midstream Pre-Tax Income $ 316 379 280 Pre-Tax Adjustments: Pension settlement expense — 2 — Impairments by equity affiliates — 28 — Adjusted Pre-Tax Income $ 316 409 280 Chemicals Pre-Tax Income $ 227 152 286 Pre-Ta
Slide 28: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 1Q 4Q 1Q Refining Pre-Tax Income (Loss) $ (198) 2,001 112 Pre-Tax Adjustments: Pending claims and settlements (21) — — Certain tax impacts — (4) (2) Pension settlement expense — 11 — Adjusted Pre-Tax Income (Loss) $ (219) 2,0
Slide 29: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 1Q 4Q 1Q Midstream - Transportation Pre-Tax Income $ 203 234 163 Pre-Tax Adjustments: None — — — Adjusted Pre-Tax Income $ 203 234 163 Midstream - NGL and Other Pre-Tax Income $ 90 120 86 Pre-Tax Adjustments: Pension settleme
Slide 30: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 1Q 4Q 1Q Refining - Atlantic Basin / Europe Pre-Tax Income (Loss) $ (7) 302 (108) Pre-Tax Adjustments: Certain tax impacts — (4) — Pension settlement expense — 3 — Adjusted Pre-Tax Income (Loss) $ (7) 301 (108) Refining - Gul
Slide 31: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 1Q 4Q 1Q Refining - Central Corridor Pre-Tax Income $ 77 1,185 272 Pre-Tax Adjustments: Pending claims and settlements (21) — — Pension settlement expense — 3 — Adjusted Pre-Tax Income $ 56 1,188 272 Refining - West Coast Pre
Slide 32: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 1Q 4Q 1Q Marketing & Specialties - Marketing and Other Pre-Tax Income $ 138 525 176 Pre-Tax Adjustments: Certain tax impacts — — (13) Pension settlement expense — 3 — Adjusted Pre-Tax Income $ 138 528 163 Marketing & Specialt
Slide 33: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars (Except as Indicated) 1Q 2019 Atlantic Basin/ Central Europe Gulf Coast Corridor West Coast Worldwide Realized Refining Margins Income (loss) before income taxes $ (7) (118) 77 (150) (198) Plus: Taxes other than income taxes 15 23 13 24 75 Depreciation, a
Slide 34: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS 2019 March YTD Numerator ($MM) Net Income $ 270 After-tax interest expense 94 GAAP ROCE earnings $ 364 After-tax special items (17) Adjusted ROCE earnings $ 347 Denominator ($MM) GAAP average capital employed1 $ 38,178 2019 Annualized GAAP ROCE 4% 2019 Annualized Adjusted RO
Slide 35: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars March 31, 2019 Phillips 66 Phillips 66 Adjusted Consolidated Partners1 Phillips 66 Total Debt $ 11,298 3,188 8,110 Total Equity 26,745 2,494 24,251 Debt-to-Capital Ratio 30% 25% Total Cash & Cash Equivalents $ 1,253 2 1,251 Net Debt-to-Capital Ratio 27% 2
Slide 36: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars 1Q 2019 Growth Sustaining Total Capital Expenditures and Investments Midstream $ 380 39 419 Refining 70 124 194 Marketing and Specialties 12 7 19 Corporate and Other 1 42 43 Adjusted Capital Spending 463 212 675 Capital Spending Funded By Gray Oak Joint V
Slide 37: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars 1Q 2019 Effective Tax Rates Income before income taxes $ 340 Special items (21) Adjusted income before income taxes $ 319 Income tax expense $ 70 Special items (4) Adjusted income tax expense $ 66 GAAP effective tax rate 20.6% Adjusted effective tax rate