Phillips 66 · NYSE:PSX
Phillips 66 — Q2 2014 Earnings Presentation
36 slides from Phillips 66's earnings presentation, Jul 30, 2014
Slide 1: Phillips 66 Second Quarter Conference Call
PHILLIPS 66 SECOND QUARTER CONFERENCE CALL July 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: Overview 2Q 2014
OVERVIEW 2Q 2014 Adjusted Earnings: $863 MM Adjusted EPS: $1.51 Operating cash flow*: $0.9 B Dividends paid: $281 MM Common shares outstanding: 559 MM shares Debt-to-Capital ratio: 22% Annualized Adjusted YTD ROCE: 13% * Excludes working capital 4
Slide 5: Adjusted Earnings 2Q 2014 vs. 1Q 2014
ADJUSTED EARNINGS 2Q 2014 VS. 1Q 2014 $MM 84 25 8 (40) (80) 866 863 1Q 2014 Midstream Chemicals Refining Marketing Corporate 2Q 2014 Adjusted & Specialties & Other Adjusted Earnings Earnings 108 324 390 162 (121) 2Q 2014 Adjusted Earnings 5
Slide 6: Midstream Overview 2Q 2014
MIDSTREAM OVERVIEW 2Q 2014 Transportation: Increased volumes & maintenance costs DCP Midstream: Lower DPM gains & higher maintenance costs NGL: Lower propane prices & demand Annualized YTD ROCE: 17% 6
Slide 7: Midstream 2Q 2014 vs. 1Q 2014
MIDSTREAM 2Q 2014 VS. 1Q 2014 $MM (2) (50) 188 (28) 108 1Q 2014 Transportation DCP NGL 2Q 2014 Adjusted Midstream Adjusted Earnings Earnings 7
Slide 8: Chemicals Overview 2Q 2014
CHEMICALS OVERVIEW 2Q 2014 Olefins & Polyolefins: Strong chain margins Specialties, Aromatics & Styrenics: Planned turnaround impacts Annualized YTD ROCE: 29% 8
Slide 9: Chemicals 2Q 2014 vs. 1Q 2014
CHEMICALS 2Q 2014 VS. 1Q 2014 $MM 27 (17) (2) 316 324 1Q 2014 Olefins & Specialties, Other 2Q 2014 Adjusted Polyolefins Aromatics & Adjusted Earnings Styrenics Earnings 9
Slide 10: Refining Overview 2Q 2014
REFINING OVERVIEW 2Q 2014 Realized refining margin: $9.66/BBL Worldwide market capture: 61% Refining crude utilization: 96% Clean product yield: 83% Advantaged U.S. crude slate: 93% Annualized YTD ROCE: 10% 10
Slide 11: Refining 2Q 2014 vs. 1Q 2014
REFINING 2Q 2014 VS. 1Q 2014 $MM 112 (50) 41 7 (26) 390 306 1Q 2014 Atlantic Gulf Coast Central Western / Other 2Q 2014 Adjusted Basin / Corridor Pacific Refining Adjusted Earnings Europe Earnings 11
Slide 12: Refining Margins – Market vs. Realized 2Q 2014
REFINING MARGINS – MARKET VS. REALIZED 2Q 2014 WORLDWIDE REFINING $/BBL (2.73) 3.18 (0.59) 15.94 (6.14) 9.66 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Avg. Market Crude: $106.80/BBL 96% Crude Capacity Utilization 61% Market Capture 12
Slide 13: Refining U.S. Advantaged Crude Slate
REFINING U.S. ADVANTAGED CRUDE SLATE QUARTERLY ANNUAL Total 66% 94% 91% 93% 52% 62% 74% 92% Total Other Light/Medium 22% Other Light/Medium 24% 22% 23% 6% 16% Tight Oil* 15% 15% 17% 7% 14% Tight Oil* 14% 3% 24% 23% Other Heavy Other Heavy 24% 25% 24% 22% 27% 26% Canadian Heavy 13% 12% 12% 10% 12% 12
Slide 14: Marketing and Specialties Overview 2Q 2014
MARKETING AND SPECIALTIES OVERVIEW 2Q 2014 Marketing & Other: Higher volumes Specialties: Higher volumes & lower margins Annualized YTD ROCE: 25% 14
Slide 15: Marketing and Specialties 2Q 2014 vs. 1Q 2014
MARKETING AND SPECIALTIES 2Q 2014 VS. 1Q 2014 $MM 26 (1) 162 137 1Q 2014 Marketing Specialties 2Q 2014 Adjusted & Other Adjusted Earnings Earnings 15
Slide 16: Corporate and Other 2Q 2014 vs. 1Q 2014
CORPORATE AND OTHER 2Q 2014 VS. 1Q 2014 $MM 1Q 2014 2Q 2014 Adjusted Net Interest Corporate Adjusted Net Loss Expense Overhead Other Net Loss (81) (121) 2 (4) (38) 16
Slide 17: Cash Flow 2Q 2014
CASH FLOW 2Q 2014 $B 0.9 (0.1) (0.6) 0.2 0.2 (0.3) (0.6) 5.3 5.0 March 31 CFO Working Capital Dividends Share Proceeds Other June 30 Cash (excluding Capital Expenditures Repurchases from Asset Cash Balance* working & Investments Dispositions Balance* capital) * Includes cash and cash equivalents 17
Slide 18: Outlook
OUTLOOK 18
Slide 19: Questions and Answers
PHILLIPS 66 SECOND QUARTER 2014 CONFERENCE CALL Questions and Answers
Slide 20: Appendix
PHILLIPS 66 SECOND QUARTER 2014 CONFERENCE CALL Appendix
Slide 21: Estimated Sensitivities
ESTIMATED SENSITIVITIES 2014 Annual 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
Slide 22: Refining Margins – Atlantic Basin / Europe
REFINING MARGINS – MARKET VS. REALIZED 2Q 2014 ATLANTIC BASIN / EUROPE $/BBL Brent: $109.63/BBL 96% Crude Capacity Utilization 41% Market Capture (3.06) (3.18) 14.92 (2.39) (0.23) 6.06 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – Dated Brent / Gasoline
Slide 23: Refining Margins – Gulf Coast
REFINING MARGINS – MARKET VS. REALIZED 2Q 2014 GULF COAST $/BBL LLS: $105.55/BBL 92% Crude Capacity Utilization 61% Market Capture (2.56) 1.09 2.85 13.35 (6.61) 8.12 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – LLS / Gasoline 85 CBOB / Diesel 61 8ppm 2
Slide 24: Refining Margins – Central Corridor
REFINING MARGINS – MARKET VS. REALIZED 2Q 2014 CENTRAL CORRIDOR $/BBL WTI: $103.05/BBL 102% Crude Capacity Utilization 84% Market Capture 7.88 (1.79) (2.39) 17.75 (6.54) 14.91 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – WTI / Gasoline Unl Sub Octane G
Slide 25: Refining Margins – Western / Pacific
REFINING MARGINS – MARKET VS. REALIZED 2Q 2014 WESTERN / PACIFIC $/BBL ANS: $109.23/BBL 96% Crude Capacity Utilization 54% Market Capture (3.37) 5.89 19.64 (2.67) (8.96) 10.53 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – ANS Spot / Los Angeles CARBOB /
Slide 26: Adjusted Earnings 2Q 2014 vs. 2Q 2013
ADJUSTED EARNINGS 2Q 2014 VS. 2Q 2013 $MM 143 18 (65) 5 (159) 921 863 2Q 2013 Midstream Chemicals Refining Marketing Corporate 2Q 2014 Adjusted & Specialties & Other Adjusted Earnings Earnings 108 324 390 162 (121) 2Q 2014 Adjusted Earnings 26
Slide 27: Midstream 2Q 2014 vs. 2Q 2013
MIDSTREAM 2Q 2014 VS. 2Q 2013 $MM 5 10 3 108 90 2Q 2013 Transportation DCP NGL 2Q 2014 Adjusted Midstream Adjusted Earnings Earnings 27
Slide 28: Chemicals 2Q 2014 vs. 2Q 2013
CHEMICALS 2Q 2014 VS. 2Q 2013 $MM 155 (11) (1) 324 181 2Q 2013 Olefins & Specialties, Other 2Q 2014 Adjusted Polyolefins Aromatics & Adjusted Earnings Styrenics Earnings 28
Slide 29: Refining 2Q 2014 vs. 2Q 2013
REFINING 2Q 2014 VS. 2Q 2013 $MM 200 32 (166) (34) (97) 455 390 2Q 2013 Atlantic Gulf Central Western / Other 2Q 2014 Adjusted Basin / Coast Corridor Pacific Refining Adjusted Earnings Europe Earnings 29
Slide 30: Marketing and Specialties 2Q 2014 vs. 2Q 2013
MARKETING AND SPECIALTIES 2Q 2014 VS. 2Q 2013 $MM 321 (139) (20) 162 2Q 2013 Marketing Specialties 2Q 2014 Adjusted & Other Adjusted Earnings Earnings 30
Slide 31: Corporate and Other 2Q 2014 vs. 2Q 2013
CORPORATE AND OTHER 2Q 2014 VS. 2Q 2013 $MM 2Q 2013 2Q 2014 Adjusted Net Interest Corporate Adjusted Net Loss Expense Overhead Other Net Loss (126) (121) 3 10 (8) 31
Slide 32: Capital Structure 1Q 2013 – 2Q 2014
CAPITAL STRUCTURE 1Q 2013 – 2Q 2014 25% 23% 20% - 30% 22% 22% 22% 22% 21.4 21.7 22.0 22.4 21.8 22.0 7.0 6.5 6.2 6.2 6.2 6.2 1Q 2013 2Q 2013 3Q 2013 4Q 2013 1Q 2014 2Q 2014 Equity $B Debt $B Debt to Capital 32
Slide 33: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2014 2013 Jun YTD 2Q 1Q Jun YTD 2Q Phillips 66 Net Income (Loss) Attributable to Phillips 66 $ 2,435 $ 863 $ 1,572 $ 2,365 $ 958 Adjustments: Net (gain) loss on asset sales - - - (23) (23) Impairments - - - - - Exit of business line -
Slide 34: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2014 2013 Jun YTD 2Q 1Q Jun YTD 2Q Midstream Net Income (Loss) Attributable to Phillips 66 $ 296 $ 108 $ 188 $ 201 $ 90 Adjustments: Impairments - - - - - Pending claims and settlements - - - - - Adjusted Net Income (Loss) Attributable
Slide 35: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2014 2013 Jun YTD 2Q 1Q Jun YTD 2Q Refining Net Income (Loss) Attributable to Phillips 66 $ 696 $ 390 $ 306 $ 1,359 $ 455 Adjustments: Net (gain) loss on asset sales - - - - - Impairments - - - - - Tax law impacts - - - (13) - Pending
Slide 36: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Marketing 2014 YTD Phillips 66 Midstream Chemicals Refining & Specialties Numerator ($MM) Net Income 2,450 310 640 696 299 After-tax interest expense 87 - - - - GAAP ROCE earnings 2,537 310 640 696 299 Special Items (706) - - - - Adjusted ROCE earnings 1,831 310 640 696 299