Phillips 66 · NYSE:PSX
Phillips 66 — Q3 2023 Earnings Presentation
39 slides from Phillips 66's earnings presentation, Oct 27, 2023
Slide 1: Phillips 66
Phillips 66 Branded Marketing Site Sweeny ethylene unit HOUSTON, TX 1-Hexene Phillips 66Unit, Cedar Branded Bayou Marketing OLD Facility Site TX OCEAN, BAYTOWN, HOUSTON, TX TX Sweeny Freeport New LakeYork Charles Stock Refinery Exchange Phillips South66 Bayway Ponca Flagship Texas 1 CityRefinery Ref
Slide 2: Cautionary Statement
Cautionary Statement This presentation contains forward-looking statements within the meaning of the federal securities laws. Words such as “anticipated,” “estimated,” “expected,” “planned,” “scheduled,” “targeted,” “believe,” “continue,” “intend,” “will,” “would,” “objective,” “goal,” “project,” “e
Slide 3: Executing the Strategy
Executing the Strategy Sweeny Ethylene Unit SweenyOCEAN, SWEENY/OLD Hub Fractionators TX Renewable Fuels Catalyst OLD Research Reactor OCEAN, TX PHILLIPS RESEARCH CENTER, BARTLESVILLE, OK Humber Refinery N. LINCOLNSHIRE, U.K. Lake Charles Refinery Lake Charles Refinery Freeport Export Terminal Humbe
Slide 4: A Diversified Energy Company
A Diversified Energy Company 4
Slide 5: Updated Commitments to Shareholders
Updated Commitments to Shareholders 5
Slide 6: Delivering Shareholder Distributions & Improving Refining
Delivering Shareholder Distributions & Improving Refining 6
Slide 7: Business Transformation
a Business Transformation Cost Reductions ($MM) Increased Target Refining Adjusted Operating and SG&A Expenses? $650 MM $1,100 Other Segment Operating and SG&A Expenses * $225 MM a Freight and Other Costs' $225 MM in savings Sustaining Capital $300 MM 1Q 2023 2Q@ 2023 3Q 2023 YE 2023E YE 2024E imum
Slide 8: Enhanced Strategic Priorities
Enhanced Strategic Priorities 8
Slide 9: 3Q 2023 Overview
3Q 2023 Overview Ponca City Refinery Phillips 66 Branded Marketing Site PONCA CITY, OK HOUSTON, Ponca Refinery, PONCA CITY, OKTX $MM (UNLESS OTHERWISE NOTED) Adjusted earnings $2,070 Adjusted EPS1 4.63 Sweeny Refinery OLD OCEAN, TX Operating cash flow 2,685 Capital expenditures and investments 855 S
Slide 10: 3Q 2023 Adjusted Earnings
3Q 2023 Adjusted Earnings 3Q 2023 VS. 2Q 2023 ($MM) 2Q 2023 3Q 2023 Midstream Chemicals Refining Marketing Corporate Income Noncontrolling Adjusted Adjusted & Specialties & Other Taxes Interests Earnings Earnings 592 55 (11) (59) (128) (57) (88) 2,070 1,766 569 104 1,740 633 (295) (660) (21) 3Q 2023
Slide 11: 3Q 2023 Cash Flow
3Q 2023 Cash Flow $B 0.3 0.3 2.4 (0.9) (0.5) 0.1 (1.2) 3.5 3.0 June 30, CFO Working Proceeds from Capital Debt Shareholder Other September 30, 2023 (excluding Capital Asset Expenditures Distributions 2023 Cash 1 working Dispositions & Investments Cash 1 Balance capital) Balance 1) Includes cash and
Slide 12: Outlook
Outlook South Texas Gateway Terminal INGLESIDE, TX O'Connor Gas Plant Research Center Laboratory LA SALLE, CO BARTLESVILLE, OK 4Q 2023 Global Olefins & Polyolefins utilization Mid-90% Refining crude utilization Low-90% Refining turnaround expenses $90 MM - $110 MM Corporate & Other costs $280MM - $3
Slide 13: Questions and Answers
Phillips 66 Branded Marketing Site ST. LOUIS, MO Questions and Answers
Slide 14: Appendix
Phillips 66 Branded Marketing Site ST. LOUIS, MO Appendix
Slide 15: 2023 Estimated Sensitivities
2023 Estimated Sensitivities . 15
Slide 16: 3Q 2023 Strategic Priorities Update
3Q 2023 Strategic Priorities Update 16
Slide 17: Capital Structure
Capital Structure 42% 40% 39% 38% 34% 35% 38% 34% 35% 33% 24% 25% 34.1 34.9 31.1 32.0 21.5 21.6 18.5 19.9 19.4 15.9 17.2 14.4 6.1 7.0 2.5 3.1 3.0 3.5 2020 2021 2022 1Q 2023 2Q 2023 3Q 2023 Equity $B Debt $B Cash & Cash Equivalents $B Debt-to-Capital Net Debt-to-Capital 17
Slide 18: 3Q 2023 Refining Adjusted Pre-Tax Income
3Q 2023 Refining Adjusted Pre-Tax Income 3Q 2023 VS. 2Q 2023 ($MM) 2Q 2023 Atlantic Gulf Central West 3Q 2023 Adjusted Basin / Coast Corridor Coast Adjusted Pre-Tax Income Europe Pre-Tax Income 95% crude utilization 481 85 295 85% clean product yield (269) 66% market capture 1,740 1,148 444 342 361
Slide 19: 3Q 2023 Refining Margins – Market vs. Realized
3Q 2023 Refining Margins – Market vs. Realized ($/BBL, UNLESS OTHERWISE NOTED) (4.66) 0.31 (5.11) (0.22) 28.64 18.96 3Q 2023 Configuration Secondary Products Feedstock Other 3Q 2023 RIN-Adjusted Realized Market 3:2:1 Margin Avg Market Crude: $85.24 66% RIN-Adjusted Market Capture 19
Slide 20: 3Q 2023 Refining Margins – Market vs. Realized
3Q 2023 Refining Margins – Market vs. Realized ATLANTIC BASIN / EUROPE ($/BBL, UNLESS OTHERWISE NOTED) Brent: $86.76 (3.88) (3.03) 2.53 92% crude utilization 26.01 (4.79) 16.85 65% market capture 3Q 2023 Configuration Secondary Feedstock Other 3Q 2023 RIN-Adjusted Products Realized Market 3:2:1 Marg
Slide 21: 3Q 2023 Refining Margins – Market vs. Realized
3Q 2023 Refining Margins – Market vs. Realized GULF COAST ($/BBL, UNLESS OTHERWISE NOTED) LLS: $84.83 (4.66) 2.27 0.58 98% crude utilization 21.44 13.58 63% market capture 3Q 2023 Configuration Secondary Feedstock Other 3Q 2023 RIN-Adjusted Products Realized Market 3:2:1 Margin RIN-Adjusted Market 3
Slide 22: 3Q 2023 Refining Margins – Market vs. Realized
3Q 2023 Refining Margins – Market vs. Realized CENTRAL CORRIDOR ($/BBL, UNLESS OTHERWISE NOTED) WTI: $82.49 (3.65) 2.67 (5.28) (4.76) 93% crude utilization 29.06 18.05 62% market capture 3Q 2023 Configuration Secondary Feedstock Other 3Q 2023 RIN-Adjusted Products Realized Market 3:2:1 Margin RIN-Ad
Slide 23: 3Q 2023 Refining Margins – Market vs. Realized
3Q 2023 Refining Margins – Market vs. Realized WEST COAST ($/BBL, UNLESS OTHERWISE NOTED) ANS: $87.96 (5.77) 1.28 (6.24) (1.34) 101% crude utilization 44.28 32.23 73% market capture 3Q 2023 Configuration Secondary Feedstock Other 3Q 2023 RIN-Adjusted Products Realized Market 3:2:1 Margin RIN-Adjuste
Slide 24: 3Q 2023 Adjusted Earnings
3Q 2023 Adjusted Earnings 3Q 2023 VS. 3Q 2022 ($MM) (39) (31) 128 277 (1,143) 3,122 (195) (49) 2,070 3Q 2022 Midstream Chemicals Refining Marketing Corporate Income Noncontrolling 3Q 2023 Adjusted & Specialties & Other Taxes Interests Adjusted Earnings Earnings 569 104 1,740 633 (295) (660) (21) 3Q
Slide 25: YTD 2023 Cash Flow
YTD 16 2023 Cash Flow $B 14 0.4 6.9 2.1 12 (2.0) 10 (4.3) 8 6 (4.0) 4 0.1 6.1 (1.8) 2 3.5 0 December 31, CFO Working Debt Proceeds from Shareholder Repurchase of Capital Other September 30, 2022 (excluding Capital Asset Distributions Noncontrolling Expenditures 2023 Cash 1 working Dispositions Inter
Slide 26: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars Except as Indicated 2023 2022* Sep YTD 3Q 2Q Sep YTD 3Q Phillips 66 Consolidated Earnings $ 5,755 2,097 1,697 9,140 5,391 Pre-Tax Adjustments: Hurricane-related costs — — — (7) (24) Net (gain)/loss on asset disposition (123) (101) 14 — — Alliance shutdown
Slide 27: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars Except as Indicated 2023 2022* Sep YTD 3Q 2Q Sep YTD 3Q Midstream Pre-Tax Income $ 2,018 712 604 4,078 3,608 Pre-Tax Adjustments: Net gain on asset disposition (137) (101) — — — Merger transaction costs — — — 13 13 Gain on consolidation — — — (3,013) (3,0
Slide 28: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars Except as Indicated 2023 2022* Sep YTD 3Q 2Q Sep YTD 3Q Refining Pre-Tax Income $ 4,452 1,710 1,134 6,176 2,907 Pre-Tax Adjustments: Hurricane-related costs — — — (7) (24) Net loss on asset disposition 14 — 14 — — Alliance shutdown-related costs 1 — — — 2
Slide 29: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars Except as Indicated 2023 Sep YTD 3Q 2Q Refining - Atlantic Basin / Europe Pre-Tax Income $ 735 444 149 Pre-Tax Adjustments: None — — — Adjusted Pre-Tax Income $ 735 444 149 Refining - Gulf Coast Pre-Tax Income $ 1,290 342 243 Pre-Tax Adjustments: Net loss
Slide 30: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars (Except as Indicated) 3Q 2023 Atlantic Basin/ Central Europe Gulf Coast Corridor West Coast Worldwide Realized Refining Margins Income before income taxes $ 444 342 361 563 1,710 Plus: Taxes other than income taxes 12 28 23 30 93 Depreciation, amortizatio
Slide 31: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars Except as Indicated 2023 September YTD Numerator Net Income $ 5,954 After-tax interest expense 537 GAAP ROCE earnings 6,491 After-tax special items 65 Adjusted ROCE earnings $ 6,556 Denominator GAAP average capital employed1 $ 51,365 2023 Annualized GAAP
Slide 32: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars Except as Indicated 3Q 2023 Total Debt $ 19,444 Total Equity 31,989 Debt-to-Capital Ratio 38 % Total Cash $ 3,539 Net Debt-to-Capital Ratio 33 % 32
Slide 33: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars Millions of Dollars 3Q 2023 2023 September YTD Growth Sustaining Total Growth Sustaining Total Capital Expenditures and Investments Midstream $ 71 89 160 $ 217 243 460 Refining 296 86 382 697 241 938 Marketing & Specialties 275 12 287 296 27 323 Corporate
Slide 34: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars 2017 2018 2019 Reconciliation of Phillips 66 Net Income to Adjusted EBITDA Phillips 66 net income $ 5,248 5,873 3,377 Plus: Income tax expense (benefit) (1,693) 1,572 801 Net interest expense 407 459 415 Depreciation and amortization 1,318 1,356 1,341 Phi
Slide 35: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars 2017 2018 2019 Reconciliation of Midstream Net Income to Adjusted EBITDA Midstream net income $ 615 1,088 597 Plus: Interest revenue (1) — — Depreciation and amortization 298 310 291 Midstream EBITDA $ 912 1,398 888 Special Item Adjustments (pre-tax): Imp
Slide 36: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars 2017 2018 2019 Reconciliation of Chemicals Net Income to Adjusted EBITDA Chemicals net income $ 716 1,025 879 Plus: None — — — Chemicals EBITDA $ 716 1,025 879 Special Item Adjustments (pre-tax): Impairments by equity affiliates 64 — — Lower-of-cost-or-ma
Slide 37: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars 2017 2018 2019 Reconciliation of Refining Net Income to Adjusted EBITDA Refining net income $ 2,099 4,628 2,132 Plus: Depreciation and amortization 823 849 867 Refining EBITDA $ 2,922 5,477 2,999 Special Item Adjustments (pre-tax): Pending claims and sett
Slide 38: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars 2017 2018 2019 Reconciliation of Marketing & Specialties Net Income to Adjusted EBITDA Marketing & Specialties net income $ 1,020 1,556 1,374 Plus: Depreciation and amortization 112 114 103 Marketing & Specialties EBITDA $ 1,132 1,670 1,477 Special Item A
Slide 39: Non-GAAP Reconciliations
Non-GAAP Reconciliations Millions of Dollars 2017 2018 2019 Reconciliation of Corporate & Other Pre-Tax Loss to Adjusted EBITDA Corporate and Other pre-tax loss $ (895) (853) (804) Plus: Net interest expense 408 459 415 Depreciation and amortization 86 82 80 Corporate & Other EBITDA $ (401) (312) (3