Phillips 66 · NYSE:PSX
Phillips 66 — Q4 2019 Earnings Presentation
40 slides from Phillips 66's earnings presentation, Jan 31, 2020
Slide 1: Fourth Quarter 2019 Conference Call
FOURTH QUARTER 2019 CONFERENCE CALL January 31, 2020 Fourth Quarter 2019 Conference Call 1 Phillips 66 Branded Marketing Site ST. LOUIS, MO
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 Sweeny Fractionators 2 and 3 Construction Site OLD OCEAN, TX Fourth Quarter 2019 Conference Call 3
Slide 4: 2019 Overview
2019 Overview Bayway Refinery LINDEN, NJ $MM (UNLESS OTHERWISE NOTED) Adjusted earnings $ 3,657 Adjusted EPS1 8.05 Operating cash flow excluding working capital2 5,638 Adjusted capital spending3 3,450 Shareholder distributions4 3,220 Net debt-to-capital ratio 27% Adjusted ROCE5 11% 1) Dollars per sh
Slide 5: 2019 Cash Flow
2019 Cash Flow $B 5.6 0.5 (0.8) (3.5) 3.0 (3.2) 1.6 December 31, CFO Working Debt Adjusted Shareholder December 31, 2018 (excluding Capital Capital Distributions 2019 Cash Working Spending2 Cash Balance1 Capital) Balance1 Fourth Quarter 2019 Conference Call 5 1) Includes cash and cash equivalents 2)
Slide 6: 4Q 2019 Overview
4Q 2019 Overview $MM (UNLESS OTHERWISE NOTED) Clifton Ridge Marine Terminal SULPHUR, LA Adjusted earnings $ 689 Adjusted EPS1 1.54 Operating cash flow excluding working capital2 1,223 Adjusted capital spending3 1,277 Shareholder distributions4 810 Common shares outstanding at December 31 441 MM 1) D
Slide 7: 4Q 2019 Adjusted Earnings
4Q 2019 Adjusted Earnings 4Q 2019 VS. 3Q 2019 ($MM) (35) (96) 149 7 1,402 (494) (211) (33) 689 3Q 2019 Midstream Chemicals Refining Marketing Corporate Income Noncontrolling 4Q 2019 Adjusted & Specialties & Other Taxes Interests Adjusted Earnings Earnings 405 173 345 287 (211) (236) (74) 4Q 2019 Adj
Slide 8: 4Q 2019 Midstream Adjusted Pre-Tax Income
4Q 2019 Midstream Adjusted Pre-Tax Income 4Q 2019 VS. 3Q 2019 ($MM) 2 12 (49) Record Transportation results 440 405 Initial startup of Gray Oak Pipeline DCP Midstream eliminated 3Q 2019 Transportation NGL & DCP 4Q 2019 incentive distribution rights Adjusted Other Midstream Adjusted Pre-Tax Income Pr
Slide 9: 4Q 2019 Chemicals Adjusted Pre-Tax Income
4Q 2019 Chemicals Adjusted Pre-Tax Income 4Q 2019 VS. 3Q 2019 ($MM) 97% O&P utilization 2 (97) (1) 269 Lower polyethylene margins and sales volumes 173 $143 MM distribution in 4Q 3Q 2019 Olefins & Specialties, Other 4Q 2019 Adjusted Polyolefins Aromatics Adjusted Pre-Tax Income & Styrenics Pre-Tax I
Slide 10: 4Q 2019 Refining Adjusted Pre-Tax Income
4Q 2019 Refining Adjusted Pre-Tax Income 4Q 2019 VS. 3Q 2019 ($MM) 97% crude utilization (218) 84% clean product yield (108) 839 (75) (93) $9.50/BBL realized margin 345 $232 MM turnaround costs 4Q 2019 3Q 2019 Atlantic Gulf Central West Adjusted Basin / Coast Corridor Coast Adjusted Pre-Tax Income E
Slide 11: 4Q 2019 Refining Margins – Market vs. Realized
4Q 2019 Refining Margins – Market vs. Realized WORLDWIDE REFINING ($/BBL, UNLESS OTHERWISE NOTED) (1.08) 1.02 (0.54) (2.35) 12.45 9.50 4Q 2019 Configuration Secondary Feedstock Other 4Q 2019 Market Products Realized 3:2:1 Margin Avg Market Crude: $61.10 76% Market Capture Fourth Quarter 2019 Confere
Slide 12: 4Q 2019 Marketing & Specialties Adjusted Pre-Tax Income
4Q 2019 Marketing & Specialties Adjusted Pre-Tax Income 4Q 2019 VS. 3Q 2019 ($MM) Formed U.S. West Coast retail marketing joint venture 498 (203) (8) Reimaged 532 branded sites 287 Refined products exports of 157 MBPD 3Q 2019 Marketing Specialties 4Q 2019 Adjusted & Other Adjusted Pre-Tax Income Pre
Slide 13: 4Q 2019 Corporate & Other Adjusted Pre-Tax Loss
4Q 2019 Corporate & Other Adjusted Pre-Tax Loss 4Q 2019 VS. 3Q 2019 ($MM) 3Q 2019 Corporate 4Q 2019 Adjusted Net Interest Overhead Adjusted Pre-Tax Loss Expense & Other Pre-Tax Loss (178) (211) (6) (27) Fourth Quarter 2019 Conference Call 13
Slide 14: Outlook
Outlook Lake Charles Isomerization Unit LAKE CHARLES, LA 1Q 2020 Global Olefins & Polyolefins utilization Mid-90% Refining crude utilization ~90% Refining turnaround expenses (pre-tax) $280 MM – $330 MM Corporate & Other costs (pre-tax) $200 MM – $220 MM 2020 Refining turnaround expenses (pre-tax) $
Slide 15: Questions and Answers
Questions and Answers Beaumont Terminal NEDERLAND, TX
Slide 16: Appendix
Appendix Beaumont Terminal NEDERLAND, TX
Slide 17: 2020 Estimated Sensitivities
2020 Estimated Sensitivities Annual EBITDA $MM Midstream - DCP (net to Phillips 66) 10¢/Gal Increase in NGL price 9 10¢/MMBtu Increase in Natural Gas price 3 $1/BBL Increase in WTI price 1 Chemicals - CPChem (net to Phillips 66) 1¢/Lb Increase in Chain Margin (Ethylene, Polyethylene, NAO) 65 Worldwi
Slide 18: Capital Structure
Capital Structure Consolidated PSX Excluding PSXP 30% 30% 31% 30% 29% 27% 25% 25% 25% 25% 25% 27% 26% 26% 27% 22% 23% 22% 22% 20% 21% 21% 17% 14% 27.4 27.2 26.7 27.3 27.1 27.2 25.1 24.7 24.3 24.8 24.9 24.9 11.2 11.3 11.4 11.9 11.8 10.1 7.2 8.1 8.1 8.1 8.1 8.2 3.1 3.0 1.8 2.3 1.6 2.9 3.0 1.7 1.6 1.3
Slide 19: 4Q 2019 Refining Margins – Market vs. Realized
4Q 2019 Refining Margins – Market vs. Realized ATLANTIC BASIN / EUROPE ($/BBL, UNLESS OTHERWISE NOTED) 0.07 Brent: $63.25 (1.62) 1.01 10.51 (2.91) 99% crude utilization 7.06 67% market capture 4Q 2019 Configuration Secondary Feedstock Other 4Q 2019 Market Products Realized 3:2:1 Margin Market 3:2:1
Slide 20: 4Q 2019 Refining Margins – Market vs. Realized
4Q 2019 Refining Margins – Market vs. Realized GULF COAST ($/BBL, UNLESS OTHERWISE NOTED) LLS: $60.79 2.11 (0.91) (1.03) (2.25) 9.53 99% crude utilization 7.45 78% market capture 4Q 2019 Configuration Secondary Feedstock Other 4Q 2019 Market Products Realized 3:2:1 Margin Market 3:2:1 - LLS / Gasoli
Slide 21: 4Q 2019 Refining Margins – Market vs. Realized
4Q 2019 Refining Margins – Market vs. Realized CENTRAL CORRIDOR ($/BBL, UNLESS OTHERWISE NOTED) 0.68 WTI: $56.98 2.93 (0.22) (3.06) 99% crude utilization 14.59 14.92 102% market capture 4Q 2019 Configuration Secondary Feedstock Other 4Q 2019 Market Products Realized 3:2:1 Margin Market 3:2:1 - WTI /
Slide 22: 4Q 2019 Refining Margins – Market vs. Realized
4Q 2019 Refining Margins – Market vs. Realized WEST COAST ($/BBL, UNLESS OTHERWISE NOTED) ANS: $64.41 1.90 (4.10) (3.17) 87% crude utilization 18.40 (2.81) 10.22 56% market capture 4Q 2019 Configuration Secondary Feedstock Other 4Q 2019 Market Products Realized 3:2:1 Margin Market 3:2:1 - ANS / Los
Slide 23: 4Q 2019 Adjusted Earnings
4Q 2019 Adjusted Earnings 4Q 2019 VS. 4Q 2018 ($MM) 21 (4) 2,260 388 2 (1,663) 689 (305) (10) 4Q 2018 Midstream Chemicals Refining Marketing Corporate Income Noncontrolling 4Q 2019 Adjusted & Specialties & Other Taxes Interests Adjusted Earnings Earnings 405 173 345 287 (211) (236) (74) 4Q 2019 Adju
Slide 24: 4Q 2019 Midstream Adjusted Pre-Tax Income
4Q 2019 Midstream Adjusted Pre-Tax Income 4Q 2019 VS. 4Q 2018 ($MM) 16 (2) (18) 409 405 4Q 2018 Transportation NGL & Other DCP 4Q 2019 Adjusted Midstream Adjusted Pre-Tax Income Pre-Tax Income 250 120 35 4Q 2019 Fourth Quarter 2019 Conference Call 24
Slide 25: 4Q 2019 Chemicals Adjusted Pre-Tax Income
4Q 2019 Chemicals Adjusted Pre-Tax Income 4Q 2019 VS. 4Q 2018 ($MM) 19 6 (4) 173 152 4Q 2018 Olefins & Specialties, Other 4Q 2019 Adjusted Polyolefins Aromatics & Adjusted Pre-Tax Income Styrenics Pre-Tax Income 154 35 (16) 4Q 2019 Fourth Quarter 2019 Conference Call 25
Slide 26: 4Q 2019 Refining Adjusted Pre-Tax Income
4Q 2019 Refining Adjusted Pre-Tax Income 4Q 2019 VS. 4Q 2018 ($MM) (240) (392) 2,008 (855) (176) 345 4Q 2018 Atlantic Gulf Central West Coast 4Q 2019 Adjusted Basin / Coast Corridor Adjusted Pre-Tax Income Europe Pre-Tax Income 61 76 333 (125) 4Q 2019 Fourth Quarter 2019 Conference Call 26
Slide 27: 4Q 2019 Marketing & Specialties Adjusted Pre-Tax Income
4Q 2019 Marketing & Specialties Adjusted Pre-Tax Income 4Q 2019 VS. 4Q 2018 ($MM) 592 (291) (14) 287 4Q 2018 Marketing Specialties 4Q 2019 Adjusted & Other Adjusted Pre-Tax Income Pre-Tax Income 237 50 4Q 2019 Fourth Quarter 2019 Conference Call 27
Slide 28: 4Q 2019 Corporate & Other Adjusted Pre-Tax Loss
4Q 2019 Corporate & Other Adjusted Pre-Tax Loss 4Q 2019 VS. 4Q 2018 ($MM) 4Q 2018 Corporate 4Q 2019 Adjusted Net Interest Overhead Adjusted Pre-Tax Loss Expense & Other Pre-Tax Loss (201) (211) 1 (11) Fourth Quarter 2019 Conference Call 28
Slide 29: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars Except as Indicated 2019 2018 Year 4Q 3Q Year 4Q Phillips 66 Consolidated Earnings $ 3,076 736 712 5,595 2,240 Pre-Tax Adjustments: Pending claims and settlements (21) — — 21 — Pension settlement expense — — — 67 18 Impairments 853 — 853 — — Impairments b
Slide 30: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars Except as Indicated 2019 2018 Year 4Q 3Q Year 4Q Midstream Pre-Tax Income (Loss) $ 684 405 (460) 1,181 379 Pre-Tax Adjustments: Pending claims and settlements — — — 21 — Pension settlement expense — — — 9 2 Impairments by equity affiliates 47 — 47 28 28 I
Slide 31: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars Except as Indicated 2019 2018 Year 4Q 3Q Year 4Q Refining Pre-Tax Income $ 1,986 345 856 4,535 2,001 Pre-Tax Adjustments: Pending claims and settlements (21) — — — — Asset dispositions (17) — (17) — — Certain tax impacts — — — (6) (4) Pension settlement e
Slide 32: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars Except as Indicated 2019 2018 Year 4Q 3Q Year 4Q Midstream - Transportation Pre-Tax Income $ 946 250 248 770 234 Pre-Tax Adjustments: None — — — — — Adjusted Pre-Tax Income $ 946 250 248 770 234 Midstream - NGL & Other Pre-Tax Income $ 522 120 169 305 120
Slide 33: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars Except as Indicated 2019 2018 Year 4Q 3Q Year 4Q Refining - Atlantic Basin / Europe Pre-Tax Income $ 608 61 296 567 302 Pre-Tax Adjustments: Certain tax impacts — — — (5) (4) Asset dispositions (17) — (17) — — Pension settlement expense — — — 11 3 Adjuste
Slide 34: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars Except as Indicated 2019 2018 Year 4Q 3Q Year 4Q Refining - Central Corridor Pre-Tax Income $ 1,338 333 408 2,817 1,185 Pre-Tax Adjustments: Pending claims and settlements (21) — — — — Pension settlement expense — — — 10 3 Adjusted Pre-Tax Income $ 1,317
Slide 35: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars Except as Indicated 2019 2018 Year 4Q 3Q Year 4Q Marketing & Specialties - Marketing & Other Pre-Tax Income $ 1,199 327 440 1,306 525 Pre-Tax Adjustments: Certain tax impacts (90) (90) — (113) — Pension settlement expense — — — 9 3 Adjusted Pre-Tax Income
Slide 36: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars (Except as Indicated) 4Q 2019 Atlantic Basin/ Central Europe Gulf Coast Corridor West Coast Worldwide Realized Refining Margins Income (loss) before income taxes $ 61 76 333 (125) 345 Plus: Taxes other than income taxes 14 11 7 17 49 Depreciation, amortiz
Slide 37: Non-GAAP Reconciliations
Non-GAAP Reconciliations 2019 Numerator ($MM) Net Income $ 3,377 After-tax interest expense 362 GAAP ROCE earnings 3,739 After-tax special items 581 Adjusted ROCE earnings 4,320 Denominator ($MM) GAAP average capital employed1 38,622 2019 GAAP ROCE 10% 2019 Adjusted ROCE 11% Fourth Quarter 2019 Conf
Slide 38: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars December 31, 2019 Phillips 66 Phillips 66 Phillips 66 Excluding Consolidated Partners1 Phillips 66 Partners Total Debt $ 11,763 3,516 8,247 Total Equity 27,169 2,229 24,940 Debt-to-Capital Ratio 30% 25% Total Cash & Cash Equivalents $ 1,614 286 1,328 Net
Slide 39: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars Millions of Dollars 4Q 2019 2019 Growth Sustaining Total Growth Sustaining Total Capital Expenditures and Investments Midstream $ 470 97 567 $ 1,605 264 1,869 Refining 139 217 356 409 592 1,001 Marketing & Specialties 268 30 298 299 75 374 Corporate & Oth
Slide 40: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars 2019 4Q Year Effective Tax Rates Income before income taxes $ 1,066 4,178 Special items (67) 837 Adjusted income before income taxes $ 999 5,015 Income tax expense $ 256 801 Special items (20) 256 Adjusted income tax expense $ 236 1,057 GAAP effective tax