Slide 1: Second Quarter 2019 Conference Call
Freeport Terminal LPG Facility Freeport, Texas July 26, 2019 SECOND 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 Deethanizer tower construction at new fractionation site, Old Ocean, Texas 3 phillips66.com | NYSE: PSX
Slide 4: 2Q 2019 Overview
2Q 2019 OVERVIEW $MM (Unless Otherwise Noted) 2Q 2019 Adjusted earnings $ 1,379 Adjusted EPS1 3.02 Operating cash flow 1,930 Capital expenditures and investments 631 Shareholder distributions2 861 Common shares outstanding at June 30 449 MM 1) Dollars per share 2) Shareholder distributions include d
Slide 5: 2Q 2019 Adjusted Earnings
2Q 2019 ADJUSTED EARNINGS $MM 148 5 1,202 (304) (14) 1,379 107 48 187 1Q 2019 Midstream Chemicals Refining Marketing Corporate Income Noncontrolling 2Q 2019 Adjusted & Specialties & Other Taxes Interests Adjusted Earnings Earnings 423 275 983 353 (205) (370) (80) 2Q 2019 Adjusted Pre-Tax Income (Los
Slide 6: Midstream
MIDSTREAM $MM Record Midstream results 53 12 42 Higher volumes on wholly owned and JV pipelines 423 Record Sweeny Hub 316 performance DCP Midstream started up gas plant in DJ Basin 1Q 2019 Transportation NGL & DCP 2Q 2019 Adjusted Other Midstream Adjusted Pre-Tax Income Pre-Tax Income 245 143 35 2Q
Slide 7: Chemicals
CHEMICALS $MM 95% O&P capacity 8 utilization 41 (1) Benefited from lower-cost feedstocks 275 227 Higher SA&S results following 1Q turnarounds 1Q 2019 Olefins & Specialties, Other 2Q 2019 Adjusted Polyolefins Aromatics Adjusted Pre-Tax Income & Styrenics Pre-Tax Income 260 34 (19) 2Q 2019 7 phillips6
Slide 8: Refining
REFINING $MM 97% crude utilization 133 464 84% clean product yield 340 983 $11.37/BBL realized margin 265 (219) $67 MM pre-tax turnaround costs 1Q 2019 Atlantic Gulf Central West 2Q 2019 Adjusted Basin / Coast Corridor Coast Adjusted Pre-Tax Loss Europe Pre-Tax Income 258 222 520 (17) 2Q 2019 8 phil
Slide 9: Refining Margins – Market vs. Realized
REFINING MARGINS – MARKET VS. REALIZED WORLDWIDE REFINING $/BBL 0.01 (2.32) (1.35) (0.21) 15.24 11.37 2Q 2019 Configuration Secondary Feedstock Other 2Q 2019 Market Products Realized 3:2:1 Margin Avg Market Crude: $65.92/BBL 75% Market Capture 9 phillips66.com | NYSE: PSX
Slide 10: Marketing and Specialties
MARKETING AND SPECIALTIES $MM Strong global marketing margins 156 (8) Re-imaged approximately 400 branded sites 353 Refined products exports of 205 187 MBPD 1Q 2019 Marketing Specialties 2Q 2019 Adjusted & Other Adjusted Pre-Tax Income Pre-Tax Income 294 59 2Q 2019 10 phillips66.com | NYSE: PSX
Slide 11: 2Q 2019 Cash Flow
2Q 2019 CASH FLOW $B 0.2 0.1 1.7 (0.6) (0.9) 1.8 1.3 March 31, CFO Working Debt Capital Shareholder June 30, 2019 (excluding Capital Expenditures Distributions 2019 Cash Working & Investments Cash Balance1 Capital) Balance1 1) Includes cash and cash equivalents 11 phillips66.com | NYSE: PSX
Slide 12: 3Q 2019 Outlook
3Q 2019 OUTLOOK Global Olefins and Polyolefins utilization Mid-90% Refining crude utilization Mid-90% Refining turnaround expenses (pre-tax) $150 MM – $180 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
Beaumont Terminal Beaumont, Texas QUESTIONS AND ANSWERS phillips66.com | NYSE: PSX
Slide 14: Appendix
Beaumont Terminal Beaumont, Texas 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% 30% 26% 29% 25% 25% 25% 27% 26% 22% 22% 24% 27% 21% 23% 18% 20% 17% 14% 25.1 24.7 24.3 24.8 27.4 27.2 26.7 27.3 22.4 23.7 10.1 10.1 11.2 11.3 11.4 7.7 7.2 8.1 8.1 8.1 2.7 3.1 3.0 2.7 2.9 3.0 1.7 1.3 1.8 1.3 2016 2017 2018 1Q 2Q 2016 2017 2018
Slide 17: Refining Margins – Atlantic Basin / Europe
REFINING MARGINS – MARKET VS. REALIZED ATLANTIC BASIN / EUROPE $/BBL Brent: $68.82/BBL 2.51 0.09 97% crude capacity (1.54) (3.00) utilization 12.79 10.85 85% market capture 2Q 2019 Configuration Secondary Feedstock Other 2Q 2019 Market Products Realized 3:2:1 Margin Market 3:2:1 - Dated Brent / Gaso
Slide 18: Refining Margins – Gulf Coast
REFINING MARGINS – MARKET VS. REALIZED GULF COAST $/BBL LLS: $66.92/BBL 1.08 99% crude capacity (1.64) (0.04) utilization (1.42) 10.22 8.20 80% market capture 2Q 2019 Configuration Secondary Feedstock Other 2Q 2019 Market Products Realized 3:2:1 Margin Market 3:2:1 - LLS / Gasoline 85 CBOB / Diesel
Slide 19: Refining Margins – Central Corridor
REFINING MARGINS – MARKET VS. REALIZED CENTRAL CORRIDOR $/BBL WTI: $59.80/BBL 1.98 101% crude capacity (1.99) 1.61 utilization (3.73) 19.97 17.84 89% market capture 2Q 2019 Configuration Secondary Feedstock Other 2Q 2019 Market Products Realized 3:2:1 Margin Market 3:2:1 - WTI / Gasoline Unl Sub Oct
Slide 20: Refining Margins – West Coast
REFINING MARGINS – MARKET VS. REALIZED WEST COAST $/BBL ANS: $68.18/BBL 87% crude capacity utilization (4.51) (4.02) (0.16) 22.70 (4.07) 44% market capture 9.94 2Q 2019 Configuration Secondary Feedstock Other 2Q 2019 Market Products Realized 3:2:1 Margin Market 3:2:1 - ANS / Los Angeles CARBOB / Los
Slide 21: 2Q 2019 vs. 2Q 2018 Adjusted Earnings
2Q 2019 VS. 2Q 2018 ADJUSTED EARNINGS $MM 185 99 22 23 (49) (15) (208) 1,322 1,379 2Q 2018 Midstream Chemicals Refining Marketing Corporate Income Noncontrolling 2Q 2019 Adjusted & Specialties & Other Taxes Interests Adjusted Earnings Earnings 423 275 983 353 (205) (370) (80) 2Q 2019 Adjusted Pre-Ta
Slide 22: 2Q 2019 vs. 2Q 2018 Midstream Adjusted Pre-Tax Income
2Q 2019 VS. 2Q 2018 MIDSTREAM ADJUSTED PRE-TAX INCOME $MM 90 14 81 423 238 2Q 2018 Transportation NGL & Other DCP 2Q 2019 Adjusted Midstream Adjusted Pre-Tax Income Pre-Tax Income 245 143 35 2Q 2019 22 phillips66.com | NYSE: PSX
Slide 23: 2Q 2019 vs. 2Q 2018 Chemicals Adjusted Pre-Tax Income
2Q 2019 VS. 2Q 2018 CHEMICALS ADJUSTED PRE-TAX INCOME $MM 2 (46) (5) 324 275 2Q 2018 Olefins & Specialties, Other 2Q 2019 Adjusted Polyolefins Aromatics & Adjusted Pre-Tax Income Styrenics Pre-Tax Income 260 34 (19) 2Q 2019 23 phillips66.com | NYSE: PSX
Slide 24: 2Q 2019 vs. 2Q 2018 Refining Adjusted Pre-Tax Income
2Q 2019 VS. 2Q 2018 REFINING ADJUSTED PRE-TAX INCOME $MM 94 (144) (1) (157) 1,191 983 2Q 2018 Atlantic Gulf Central West Coast 2Q 2019 Adjusted Basin / Coast Corridor Adjusted Pre-Tax Income Europe Pre-Tax Income 258 222 520 (17) 2Q 2019 24 phillips66.com | NYSE: PSX
Slide 25: 2Q 2019 vs. 2Q 2018 Marketing and Specialties Adjusted Pre-Tax Income
2Q 2019 VS. 2Q 2018 MARKETING AND SPECIALTIES ADJUSTED PRE-TAX INCOME $MM 106 (7) 353 254 2Q 2018 Marketing Specialties 2Q 2019 Adjusted & Other Adjusted Pre-Tax Income Pre-Tax Income 294 59 2Q 2019 25 phillips66.com | NYSE: PSX
Slide 26: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 Jun YTD 2Q 1Q Jun YTD 2Q Phillips 66 Consolidated Earnings $ 1,628 1,424 204 1,863 1,339 Pre-Tax Adjustments: Pending claims and settlements (21) — (21) — — Certain tax impacts — — — (70) (55) Tax impact of adjustments1 4 — 4
Slide 27: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 Jun YTD 2Q 1Q Jun YTD 2Q Midstream Pre-Tax Income $ 739 423 316 518 238 Pre-Tax Adjustments: None — — — — — Adjusted Pre-Tax Income $ 739 423 316 518 238 Chemicals Pre-Tax Income $ 502 275 227 610 324 Pre-Tax Adjustments: Non
Slide 28: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 Jun YTD 2Q 1Q Jun YTD 2Q Refining Pre-Tax Income (Loss) $ 785 983 (198) 1,302 1,190 Pre-Tax Adjustments: Pending claims and settlements (21) — (21) — — Certain tax impacts — — — (1) 1 Adjusted Pre-Tax Income (Loss) $ 764 983
Slide 29: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 Jun YTD 2Q 1Q Jun YTD 2Q Midstream - Transportation Pre-Tax Income $ 448 245 203 327 164 Pre-Tax Adjustments: None — — — — — Adjusted Pre-Tax Income $ 448 245 203 327 164 Midstream - NGL and Other Pre-Tax Income $ 233 143 90
Slide 30: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 Jun YTD 2Q 1Q Jun YTD 2Q Refining - Atlantic Basin / Europe Pre-Tax Income (Loss) $ 251 258 (7) 56 164 Pre-Tax Adjustments: None — — — — — Adjusted Pre-Tax Income (Loss) $ 251 258 (7) 56 164 Refining - Gulf Coast Pre-Tax Inco
Slide 31: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 Jun YTD 2Q 1Q Jun YTD 2Q Refining - Central Corridor Pre-Tax Income $ 597 520 77 793 521 Pre-Tax Adjustments: Pending claims and settlements (21) — (21) — — Adjusted Pre-Tax Income $ 576 520 56 793 521 Refining - West Coast P
Slide 32: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Except as Indicated 2019 2018 Jun YTD 2Q 1Q Jun YTD 2Q Marketing and Specialties - Marketing and Other Pre-Tax Income $ 432 294 138 420 244 Pre-Tax Adjustments: Certain tax impacts — — — (69) (56) Adjusted Pre-Tax Income $ 432 294 138 351 188 Marketing an
Slide 33: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars (Except as Indicated) 2Q 2019 Atlantic Basin/ Central Europe Gulf Coast Corridor West Coast Worldwide Realized Refining Margins Income (loss) before income taxes $ 258 222 520 (17) 983 Plus: Taxes other than income taxes 11 16 10 21 58 Depreciation, amort
Slide 34: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS 2019 June YTD Numerator ($MM) Net Income $ 1,774 After-tax interest expense 185 GAAP ROCE earnings $ 1,959 After-tax special items (62) Adjusted ROCE earnings $ 1,897 Denominator ($MM) GAAP average capital employed1 $ 38,529 2019 Annualized GAAP ROCE 10% 2019 Annualized Adju
Slide 35: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars June 30, 2019 Phillips 66 Phillips 66 Adjusted Consolidated Partners1 Phillips 66 Total Debt $ 11,439 3,324 8,115 Total Equity 27,306 2,521 24,785 Debt-to-Capital Ratio 30% 25% Total Cash & Cash Equivalents $ 1,819 130 1,689 Net Debt-to-Capital Ratio 26%
Slide 36: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Millions of Dollars 2Q 2019 2019 June YTD Growth Sustaining Total Growth Sustaining Total Capital Expenditures and Investments Midstream $ 311 48 359 $ 691 87 778 Refining 87 110 197 157 234 391 Marketing and Specialties 8 15 23 20 22 42 Corporate and Oth
Slide 37: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars 2Q 2019 Effective Tax Rates Income before income taxes $ 1,829 Special items — Adjusted income before income taxes $ 1,829 Income tax expense $ 325 Special items 45 Adjusted income tax expense $ 370 GAAP effective tax rate 17.8% Adjusted effective tax rat