Phillips 66 · NYSE:PSX
Phillips 66 — Q2 2013 Earnings Presentation
37 slides from Phillips 66's earnings presentation, Jul 31, 2013
Slide 1: Phillips 66 Second Quarter Conference Call
PHILLIPS 66 SECOND QUARTER CONFERENCE CALL July 31, 2013
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: Company Overview 2Q 2013
COMPANY OVERVIEW 2Q 2013 Adjusted earnings: $935 MM Adjusted EPS: $1.50 Adjusted operating cash flow*: $1.2 B Debt reduction: $502 MM Dividends paid: $192 MM Common shares repurchased: $546 MM Annualized YTD ROCE: 17% * Excluding working capital changes 4
Slide 5: Company Adjusted Earnings 2Q 2013 vs. 2Q 2012
COMPANY ADJUSTED EARNINGS 2Q 2013 VS. 2Q 2012 $MM (5) (61) 25 (404) (37) 1,417 935 2Q 2012 Midstream Chemicals Refining Marketing Corporate 2Q 2013 Adjusted & Specialties & Other Adjusted Earnings Earnings 90 181 481 309 (126) 2Q 2013 Adjusted Earnings 5
Slide 6: Company Cash Flow 2Q 2013
COMPANY CASH FLOW 2Q 2013 $B 1.2 (0.2) (0.7) (0.5) (0.4) 4.8 4.2 March 31 CFO Working Dividends Debt Capital June 30 Cash (excluding Capital & Share Repayment Expenditures Cash Balance* working Repurchases & Investments Balance* capital) * Includes cash and cash equivalents 6
Slide 7: Capital Structure 2Q 2012 – 2Q 2013
CAPITAL STRUCTURE 2Q 2012 – 2Q 2013 30% 28% 25% 25% 23% 20% - 30% 20.6 20.8 21.4 21.7 19.0 8.0 8.0 7.0 7.0 6.5 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013 Equity $B Debt $B Debt to Capital 7
Slide 8: Midstream Overview 2Q 2013
MIDSTREAM OVERVIEW 2Q 2013 Transportation: Higher throughput fees & improved volumes DCP Midstream: Asset dropdowns NGL Operations & Other: Inventory impacts Annualized YTD ROCE: 11% 8
Slide 9: Midstream Adjusted Earnings 2Q 2013 vs. 2Q 2012
MIDSTREAM ADJUSTED EARNINGS 2Q 2013 VS. 2Q 2012 $MM 26 (12) (19) 95 90 2Q 2012 Transportation DCP NGL Operations 2Q 2013 Adjusted Midstream & Other Adjusted Earnings Earnings 9
Slide 10: Chemicals Overview 2Q 2013
CHEMICALS OVERVIEW 2Q 2013 Olefins & Polyolefins: Unplanned downtime Specialties, Aromatics & Styrenics: Increased equity earnings Annualized YTD ROCE: 25% 10
Slide 11: Chemicals Adjusted Earnings 2Q 2013 vs. 2Q 2012
CHEMICALS ADJUSTED EARNINGS 2Q 2013 VS. 2Q 2012 $MM 27 (88) 242 0 181 2Q 2012 Olefins & Specialties, Corporate 2Q 2013 Adjusted Polyolefins Aromatics & & Other Adjusted Earnings Styrenics Earnings 11
Slide 12: Refining Overview 2Q 2013
REFINING OVERVIEW 2Q 2013 Realized refining margin: $9.88/BBL Refining crude utilization: 94% Clean product yield: 85% Advantaged U.S. crude slate: 68% Annualized YTD ROCE: 19% 12
Slide 13: Refining Adjusted Earnings 2Q 2013 vs. 2Q 2012
REFINING ADJUSTED EARNINGS 2Q 2013 VS. 2Q 2012 $MM (77) (248) 67 32 885 (178) 481 2Q 2012 Atlantic Gulf Central Western / Other 2Q 2013 Adjusted Basin / Coast Corridor Pacific Refining Adjusted Earnings Europe Earnings 13
Slide 14: Refining Margins – Market vs. Realized 2Q 2013
REFINING MARGINS – MARKET VS. REALIZED 2Q 2013 WORLDWIDE REFINING $/BBL (2.69) 2.00 17.56 (5.41) (1.58) 9.88 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Avg. Market Crude: $101.80/BBL 94% Crude Capacity Utilization 56% Market Capture 14
Slide 15: Refining Operations 2011 – 2013 YTD
REFINING OPERATIONS 2011 – 2013 YTD U.S. CRUDE SLATE WORLDWIDE CLEAN PRODUCT YIELD Advantaged 52% 62% 68% 83.6% 83.8% 84.3% Total 1.9% 2.1% 2.1% Other 32% 38% Brent Based 48% Distillate 39.7% 40.2% 39.6% 7% 14% Shale* 2% 27% 23% Other Heavy 27% 10% 12% 42.0% 41.5% 42.6% Gasoline Canadian Heavy 7% WT
Slide 16: Marketing and Specialties Overview 2Q 2013
MARKETING AND SPECIALTIES OVERVIEW 2Q 2013 Worldwide marketing margin: 5.2 cpg Flow improver sales volumes increase: 17% Lubricant volumes increase: 7% Annualized YTD ROCE: 29% 16
Slide 17: Marketing and Specialties Adjusted Earnings 2Q 2013 vs. 2Q 2012
MARKETING AND SPECIALTIES ADJUSTED EARNINGS 2Q 2013 VS. 2Q 2012 $MM 22 3 309 284 2Q 2012 Marketing Specialties 2Q 2013 Adjusted & Other Adjusted Earnings Earnings 17
Slide 18: Corporate and Other Adjusted Net Loss 2Q 2013 vs. 1Q 2013
CORPORATE AND OTHER ADJUSTED NET LOSS 2Q 2013 VS. 1Q 2013 $MM 1Q 2013 2Q 2013 Adjusted Net Interest Corporate Adjusted Net Loss Expense Overhead Other Net Loss (95) (126) 1 (2) (30) 18
Slide 19: Outlook
OUTLOOK 19
Slide 20: Questions and Answers
PHILLIPS 66 SECOND QUARTER 2013 CONFERENCE CALL Questions and Answers
Slide 21: Appendix
PHILLIPS 66 SECOND QUARTER 2013 CONFERENCE CALL Appendix
Slide 22: Sensitivities
SENSITIVITIES 2013 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 Olefins Chain Margin (Ethylene, Polyethylene, NAO) 35 Worldwide Refining (assuming 95% refining utilization) $1/BBL Increase
Slide 23: Refining Margins – Atlantic Basin / Europe
REFINING MARGINS – MARKET VS. REALIZED 2Q 2013 ATLANTIC BASIN / EUROPE $/BBL Brent: $102.44/BBL 94% Crude Capacity Utilization 42% Market Capture (2.34) (2.14) 16.25 (2.87) (2.07) 6.83 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – Dated Brent / Gasoline
Slide 24: Refining Margins – Gulf Coast
REFINING MARGINS – MARKET VS. REALIZED 2Q 2013 GULF COAST $/BBL LLS: $104.63/BBL 91% Crude Capacity Utilization 39% Market Capture (1.55) 11.28 1.30 (0.15) (6.43) 4.45 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – LLS / Gasoline 85 CBOB / Diesel 61 8ppm
Slide 25: Refining Margins – Central Corridor
REFINING MARGINS – MARKET VS. REALIZED 2Q 2013 CENTRAL CORRIDOR $/BBL WTI: $94.12/BBL 100% Crude Capacity Utilization 71% Market Capture 6.98 (3.70) (5.05) (6.02) 27.24 19.45 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – WTI / Gasoline Unl 87 Group 3 /
Slide 26: Refining Margins – Western / Pacific
REFINING MARGINS – MARKET VS. REALIZED 2Q 2013 WESTERN / PACIFIC $/BBL ANS: $104.52/BBL 95% Crude Capacity Utilization 46% Market Capture (3.17) 4.13 19.34 (7.67) (3.83) 8.80 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – ANS Spot / Los Angeles CARBOB /
Slide 27: Company Adjusted Earnings 2Q 2013 vs. 1Q 2013
COMPANY ADJUSTED EARNINGS 2Q 2013 VS. 1Q 2013 $MM 7 (101) 107 (31) (428) 1,381 935 1Q 2013 Midstream Chemicals Refining Marketing Corporate 2Q 2013 Adjusted & Specialties & Other Adjusted Earnings Earnings 90 181 481 309 (126) 2Q 2013 Adjusted Earnings 27
Slide 28: Midstream Adjusted Earnings 2Q 2013 vs. 1Q 2013
MIDSTREAM ADJUSTED EARNINGS 2Q 2013 VS. 1Q 2013 $MM 4 1 2 83 90 1Q 2013 Transportation DCP NGL Operations 2Q 2013 Adjusted Midstream & Other Adjusted Earnings Earnings 28
Slide 29: Chemicals Adjusted Earnings 2Q 2013 vs. 1Q 2013
CHEMICALS ADJUSTED EARNINGS 2Q 2013 VS. 1Q 2013 $MM 6 (103) (4) 282 181 1Q 2013 Olefins & Specialties, Corporate 2Q 2013 Adjusted Polyolefins Aromatics & & Other Adjusted Earnings Styrenics Earnings 29
Slide 30: Refining Adjusted Earnings 2Q 2013 vs. 1Q 2013
REFINING ADJUSTED EARNINGS 2Q 2013 VS. 1Q 2013 $MM (62) (109) 909 (190) (27) (40) 481 1Q 2013 Atlantic Gulf Central Western / Other 2Q 2013 Adjusted Basin / Coast Corridor Pacific Refining Adjusted Earnings Europe Earnings 30
Slide 31: Marketing and Specialties Adjusted Earnings 2Q 2013 vs. 1Q 2013
MARKETING AND SPECIALTIES ADJUSTED EARNINGS 2Q 2013 VS. 1Q 2013 $MM 102 5 309 202 1Q 2013 Marketing Specialties 2Q 2013 Adjusted & Other Adjusted Earnings Earnings 31
Slide 32: Corporate and Other Adjusted Net Loss 2Q 2013
CORPORATE AND OTHER ADJUSTED NET LOSS 2Q 2013 $MM (42) (126) (36) (12) (36) Net Interest Corporate Technology Other Corporate Expense Overhead 32
Slide 33: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Millions of Dollars Except as Indicated Except as Indicated 2013 2012 2012 2011 2010 2Q 1Q 2Q Year Year Year Phillips 66 Earnings (loss) $ 958 $ 1,407 $ 1,181 $ 4,124 $ 4,775 $ 735 Adjustments: Net (gain) loss on asset sales (23) - (106) (106) (1,545) (11
Slide 34: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Millions of Dollars Except as Indicated Except as Indicated 2013 2012 2012 2011 2010 2Q 1Q 2Q Year Year Year Midstream Earnings (loss) $ 90 $ 110 $ (75) $ 53 $ 2,149 $ 386 Adjustments: Net (gain) loss on asset sales - - - - (1,618) - Impairments - - 170 3
Slide 35: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars Millions of Dollars Except as Indicated Except as Indicated 2013 2012 2012 2011 2010 2Q 1Q 2Q Year Year Year Refining Earnings (loss) $ 481 $ 922 $ 916 $ 3,217 $ 1,529 $ (545) Adjustments: Net (gain) loss on asset sales - - (104) (104) 96 - Impairments -
Slide 36: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Marketing 2013 YTD Phillips 66 Midstream Chemicals Refining & Specialties Numerator ($MM) Net Income 2,370 205 463 1,403 520 After-tax interest expense 90 - - - - GAAP ROCE earnings 2,460 205 463 1,403 520 Special Items (49) (27) - (13) (9) Adjusted ROCE earnings 2,411 178 4
Slide 37: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Millions of Dollars 2013 2Q Cash Flows from Operating Activities Net Cash Provided by Operating Activities, excluding working capital $ 1,174 Working capital adjustments Decrease (increase) in accounts and notes receivable 126 Decrease (increase) in inventories 777 Decrease