PHILLIPS 66 THIRD QUARTER CONFERENCE CALL October 29, 2014 - PowerPoint PPT Presentation

PHILLIPS 66 THIRD QUARTER CONFERENCE CALL October 29, 2014

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. Words and phrases such as “is anticipated,” “is estimated,” “is expected,” “is planned,” “is scheduled,” “is targeted,” “believes,” “in ten ds,” “objectives,” “projects,” “strategies” and similar expressions are used to identify such forward -looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Forward- looking statements relating to Phillips 66’s operations (including joint venture opera tions) are based on management’s expectations, estimates and projections about the company, its interests and the energy industry in general on t he date this presentation was prepared. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Factors that could cause actual results or events to differ materially from those described in the forward-looking statements include fluctuations in crude oil, NGL, and natural gas prices, and refining and petrochemical margins; unexpected changes in costs for constructing, modifying or operating our facilities; unexpected difficulties in manufacturing, refining or transporting our products; lack of, or disruptions in, adequate and reliable transportation for our crude oil, natural gas, NGL, and refined products; potential liability from litigation or for remedial actions, including removal and reclamation obligations, under environmental regulations; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets; and other economic, business, competitive and/or regulatory factors affecting Phillips 66’s businesses generally as set forth in our filings with the Securities and Exchange Commission. Phillip s 66 is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. This presentation includes non-GAAP financial measures. You can find the reconciliations to comparable GAAP financial measures at the end of the presentation materials or in the “Investors” section of our website. 2

EXECUTING STRATEGY 3

OVERVIEW 3Q 2014 Adjusted Earnings: $1.1 B Adjusted EPS: $2.02 Operating cash flow excluding working capital: $1.3 B Capital expenditures and investments: $1.5 B Shareholder distributions: $771 MM Debt-to-Capital ratio: 22% Annualized adjusted YTD ROCE: 14% Shareholder distributions include dividends and share repurchases 4

ADJUSTED EARNINGS 3Q 2014 VS. 2Q 2014 $MM 30 97 168 7 (25) 1,140 863 2Q 2014 Midstream Chemicals Refining Marketing Corporate 3Q 2014 Adjusted & Specialties & Other Adjusted Earnings Earnings 115 299 558 259 (91) 3Q 2014 Adjusted Earnings 5

MIDSTREAM OVERVIEW 3Q 2014 Transportation: Closed Beaumont Terminal acquisition DCP Midstream: Higher volumes offset by lower prices NGL: Improved margins and volumes Annualized YTD ROCE: 14% 6

MIDSTREAM 3Q 2014 VS. 2Q 2014 $MM 11 (2) (2) 115 108 2Q 2014 Transportation DCP NGL 3Q 2014 Adjusted Midstream Adjusted Earnings Earnings 7

CHEMICALS OVERVIEW 3Q 2014 Olefins & Polyolefins: Unplanned downtime Specialties, Aromatics & Styrenics: Lower turnaround activity Annualized Adjusted YTD ROCE: 29% 8

CHEMICALS 3Q 2014 VS. 2Q 2014 $MM 1 25 (51) 324 299 2Q 2014 Olefins & Specialties, Other 3Q 2014 Adjusted Polyolefins Aromatics & Adjusted Earnings Styrenics Earnings 9

REFINING OVERVIEW 3Q 2014 Realized refining margin: $10.89/BBL Worldwide market capture: 73% Refining crude utilization: 94% Advantaged U.S. crude slate: 95% Clean product yield: 84% Annualized YTD ROCE: 12% 10

REFINING 3Q 2014 VS. 2Q 2014 $MM 105 135 71 (68) (75) 558 390 2Q 2014 Atlantic Gulf Coast Central Western / Other 3Q 2014 Adjusted Basin / Corridor Pacific Refining Adjusted Earnings Europe Earnings 11

REFINING MARGINS – MARKET VS. REALIZED 3Q 2014 WORLDWIDE REFINING $/BBL (2.17) 0.98 2.30 14.85 (5.07) 10.89 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Avg. Market Crude: $100.54/BBL 94% Crude Capacity Utilization 73% Market Capture 12

REFINING U.S. ADVANTAGED CRUDE SLATE QUARTERLY ANNUAL Total 94% 91% 93% 95% 52% 62% 74% 93% Total 24% 26% 24% Other Light/Medium Other Light/Medium 23% 22% 6% 15% Tight Oil* 15% 17% 14% 17% Tight Oil* 19% 7% 3% 25% Other Heavy 24% 22% 24% Other Heavy 27% 22% 22% 26% 12% 12% 12% 12% Canadian Heavy 13% Canadian Heavy 10% 11% 7% WTI Based 19% 18% 18% 18% 18% 17% 17% WTI Based 16% Q4 2013 Q1 2014 Q2 2014 Q3 2014 2011 2012 2013 2014 YTD * Includes Shale Oil, Rocky Mountain Sweet (Casper, Wyoming), Mississippian Lime (Oklahoma) and Granite Wash (Texas Panhandle) 13

MARKETING AND SPECIALTIES OVERVIEW 3Q 2014 Marketing & Other: Higher global marketing margins Specialties: Closed Spectrum acquisition Annualized Adjusted YTD ROCE: 27% 14

MARKETING AND SPECIALTIES 3Q 2014 VS. 2Q 2014 $MM 97 0 259 162 2Q 2014 Marketing Specialties 3Q 2014 Adjusted & Other Adjusted Earnings Earnings 15

CORPORATE AND OTHER 3Q 2014 VS. 2Q 2014 $MM 2Q 2014 3Q 2014 Adjusted Net Interest Corporate Adjusted Net Loss Expense Overhead Other Net Loss (91) (121) 15 12 3 16

CASH FLOW 3Q 2014 $B 1.3 (0.8) (0.7) (0.8) (0.3) (0.5) (0.1) 5.0 3.1 June 30 CFO Working Acquisitions Other Capital Dividends Share Other September 30 Cash (excluding Capital Expenditures Repurchases Cash Balance* working & Investments Balance* capital) * Includes cash and cash equivalents 17

OUTLOOK 18

PHILLIPS 66 THIRD QUARTER 2014 CONFERENCE CALL Questions and Answers

PHILLIPS 66 THIRD QUARTER 2014 CONFERENCE CALL Appendix

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 Increase in Refining Margin 440 Impacts due to Actual Crude Feedstock Differing from Feedstock Assumed in Market Indicators: $1/BBL Widening LLS / Maya Differential (LLS less Maya) 50 $1/BBL Widening WTI / WCS Differential (WTI less WCS) 40 $1/BBL Widening WTI / WTS Differential (WTI less WTS) 15 $1/BBL Widening LLS / WCS Differential (LLS less WCS) 10 $1/BBL Widening ANS / WCS Differential (ANS less WCS) 10 10¢/MMBtu Increase in Natural Gas price (10) Sensitivities shown above are independent and are only valid within a limited price range 21

REFINING MARGINS – MARKET VS. REALIZED 3Q 2014 ATLANTIC BASIN / EUROPE $/BBL Brent: $101.85/BBL 92% Crude Capacity Utilization 63% Market Capture (2.58) 1.34 (2.63) 15.84 (1.98) 9.99 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – Dated Brent / Gasoline 83.7 RBOB NYH / Diesel 15ppm NYH 22

REFINING MARGINS – MARKET VS. REALIZED 3Q 2014 GULF COAST $/BBL LLS: $100.95/BBL 97% Crude Capacity Utilization 61% Market Capture (1.81) 1.93 11.11 1.49 6.80 (5.92) Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – LLS / Gasoline 85 CBOB / Diesel 61 8ppm 23

REFINING MARGINS – MARKET VS. REALIZED 3Q 2014 CENTRAL CORRIDOR $/BBL WTI: $97.48/BBL 98% Crude Capacity Utilization 101% Market Capture 7.11 (0.23) (1.25) (5.41) 16.87 16.65 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – WTI / Gasoline Unl Sub Octane Group 3 / ULSD Group 3 24

REFINING MARGINS – MARKET VS. REALIZED 3Q 2014 WESTERN / PACIFIC $/BBL ANS: $101.51/BBL 89% Crude Capacity Utilization 49% Market Capture (2.69) 4.17 17.79 (3.85) (6.71) 8.71 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – ANS Spot / Los Angeles CARBOB / Los Angeles No. 2 CARB 25

ADJUSTED EARNINGS 3Q 2014 VS. 3Q 2013 $MM 22 588 4 37 1,140 (32) 521 3Q 2013 Midstream Chemicals Refining Marketing Corporate 3Q 2014 Adjusted & Specialties & Other Adjusted Earnings Earnings 115 299 558 259 (91) 3Q 2014 Adjusted Earnings 26

MIDSTREAM 3Q 2014 VS. 3Q 2013 $MM 4 20 (56) 147 115 3Q 2013 Transportation DCP NGL 3Q 2014 Adjusted Midstream Adjusted Earnings Earnings 27