Second-Quarter 2012 Conference Call · 2017. 6. 23. · Market 3:2:1 Configuration Secondary...

Second-Quarter 2012 Conference CallAugust 1, 2012

2

Cautionary StatementThis 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,” “intends,” “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 operations) are based on management’s expectations, estimates and projections about the company, its interests and the energy industry in general on the 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, refining and marketing margins and margins for our chemicals business;

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 for remedial actions, including removal and reclamation obligations, under environmental regulations; potential liability resulting from litigation; 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, including our Form 10 Registration Statement. Phillips 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.

3

Second-Quarter Overview

■ Successful separation from ConocoPhillips

■ $1.4 B adjusted earnings

■ $2.23 adjusted EPS

■ $1.4 B cash from operations

■ Annualized ROCE 18%

Photo: Phillips 66 debuts on the New York Stock Exchange

4

1,417

1,013

437

(32)

52

(53)

2Q 2011 Adjusted Earnings

R&M Midstream Chemicals Corporate & Other


Company Adjusted Earnings2Q 2012 vs. 2Q 2011

2Q 2012 Adjusted Earnings(89)242791,185

$MM

5

3.1

6.1 (0.3)

(0.2)

2.0

(6.1)

1.4 0.2

March 31 Cash

Balance*

TermLoan

Net Distrib.

to COP

CFO AssetSales

CapitalProgram

Other June 30 Cash

Balance**

Company Cash Flow2Q 2012

* Represents Restricted Cash** Includes Cash and Cash Equivalents

$B

6

14%18%

7%2%

2009 2010 2011 2012YTD

Annualized*

Capital Structure and Return

2Q 2012 ($B) Phillips 66 ROCE

30% Debt-to-Capital

* Calculated as annualized YTD adjusted ROCE income / average YTD capital employed

19.0

8.0

Equity Balance Sheet Debt

7

5%

12%17%

1%

2009 2010 2011 2012YTD

Annualized*

R&M Overview

Return on Capital Employed

■ $12.56/BBL realized refining margin■ 93% crude capacity utilization■ 84% clean product yield■ 4 cpg U.S. marketing margin■ Improved lubricants margins■ Completed Trainer Refinery sale

Photo: Ponca City Refinery in Ponca City, Okla. * Calculated as annualized YTD adjusted ROCE income / average YTD capital employed

8

1,185

748

17

(39)

133 22 122

67 115

2Q 2011AdjustedEarnings

AtlanticBasin /Europe

GulfCoast

CentralCorridor

Western /Pacific

Other Refining

U.S. Int'l 2Q 2012Adjusted Earnings

R&M Adjusted Earnings2Q 2012 vs. 2Q 2011

Refining Marketing, Specialties & Other

$MM

9

Refining Adjusted Earnings2Q 2012 vs. 2Q 2011$MM

851

498

312

(16)

50 7


Margins Volumes OperatingCosts

Other 2Q 2012AdjustedEarnings

10

12.56

17.85

(3.03)

(5.32)

1.89 1.17

Market 3:2:1 Configuration Secondary Products

Feedstock Other Realized Crack

Refining Crack Spreads – 2Q 2012Market vs. Realized

Worldwide Refining

Avg. Crude: $105.53/BBL 93% Capacity Utilization 70% Market Capture

$/BBL

11

42.0% 41.7%

39.7% 40.4%

83.6% 84.3%

2011 2012 YTD

24% 23%

23% 29%

53% 48%

2011 2012 YTD

Refining Operations

Worldwide Crude Slate Clean Product Yield

Gasoline

Distillate

Other

Heavy / Acid

WTI / WTS / Canadian

Brent / ANS / LLS / HLS

12

Marketing, Specialties & Other Adjusted Earnings 2Q 2012 vs. 2Q 2011$MM

334250

132

(20)(33)

5


Margins Volumes OperatingCosts


13

1.772.61

4.07

0.83

2.14

4.37

1Q 2011

2Q 3Q 4Q 1Q 2012

2Q

R&M Income R&M Cash Contribution

R&M per Barrel Metrics

Based on total petroleum product sales. Income adjusted to exclude certain non-core earnings impacts. Cash Contribution is calculated as adjusted income plus D&A. See Appendix for additional information.

$/BBL

2.563.39

4.82

1.67

3.01

5.19

1Q 2011

2Q 3Q 4Q 1Q 2012

2Q

14

18%30% 30%

20%

2009 2010 2011 2012YTD

Annualized*

Midstream Overview


■ DCP Midstream• NGL prices down 38%

• Lower depreciation

■ REX impairment■ Inventory gains

DCP Midstream plant in Carthage, Texas * Calculated as annualized adjusted YTD ROCE income / average YTD capital employed

15

Midstream Adjusted Earnings 2Q 2012 vs. 2Q 2011$MM

DCP

Other Midstream

3721

9042

16

(48)

2Q 2011Adjusted Earnings

DCP Other Midstream


16

42

90

(60)

8

(6)

10


Prices Volume /Mix

OperatingCosts


Midstream Adjusted Earnings 2Q 2012 vs. 2Q 2011$MM

DCP

Other Midstream

37

21 (6)

22


OperatingCosts


17

Chemicals Overview


■ Improved margins in Olefins and Polyolefins

■ 90% capacity utilization

■ Lower utility costs

Photo: S-Chem facility in Al Jubail, Saudi Arabia, a Chevron Phillips Chemical Company (CPChem) joint venture. * Calculated as annualized adjusted YTD ROCE income / average YTD capital employed

21%28% 30%

11%

2009 2010 2011 2012YTD

Annualized*

18

242190

(15)

5 62


Olefins &Polyolefins

Specialties,Aromatics &

Styrenics

Other 2Q 2012 AdjustedEarnings

Chemicals Adjusted Earnings 2Q 2012 vs. 2Q 2011$MM

19

Chemicals Adjusted Earnings2Q 2012 vs. 2Q 2011

Olefins & Polyolefins

Specialties, Aromatics & Styrenics

$MM

245183

21 7 34


Margins Volumes Other 2Q 2012 AdjustedEarnings

2722

7

(3)

1


Margins Volumes Other 2Q 2012 AdjustedEarnings

20

2012 Outlook

■ Refining & Marketing

■ Midstream

■ Chemicals

■ Corporate and Other

20Photo: Phillips 66 terminal in Pasadena, Texas

21

Executing the Strategy

■ Enhance return on capital • Portfolio optimization• Access to advantaged feedstock• Margin improvement

■ Deliver profitable growth• Chemicals expansion• Midstream growth• Specialties and transportation

■ Grow shareholder distributions • Regular dividends• Share repurchases

Photo: Wood River Refinery in Roxana, Ill.

Questions & Answers

Second-Quarter 2012 Conference Call

Appendix

24

2012 Sensitivities

(13)1% increase in interest rateCorporate and Other

301¢/Pound increase in ethylene chain margin (ethylene, polyethylene, NAO)Chemicals

2$1/BBL increase in WTI price210¢/MMBtu increase in natural gas price41¢/Gal increase in NGL price

Midstream

(90)$1/BBL narrowing WTI / Brent differential (absolute impact, based on Central Corridor crude throughput)

(85)$1/MMBtu increase in natural gas price30$1/BBL widening LLS / Brent differential (LLS less Brent)30$1/BBL widening ANS / WTS differential (ANS less WTS)30$1/BBL widening WTI / WTS differential (WTI less WTS)35$1/BBL widening WTI / WCS differential (WTI less WCS)50$1/BBL widening LLS / Maya differential (LLS less Maya)

Impacts due to actual crude feedstock differing from feedstock assumed in market indicators:

(25)$1/BBL increase in crude price impact on secondary products450$1/BBL increase in refining margin

Net Income$MM

Worldwide R&M (assuming 95% refining utilization rate)

Sensitivities shown above are independent with the exception of WTI/Brent sensitivity, and are only valid within a limited price range.

25

7.76

17.14(1.40)

(3.72)

(1.19)(3.07)




Atlantic Basin / Europe

Brent: $108.19/BBL 95% Capacity Utilization 45% Market Capture

$/BBL

Market 3:2:1 – Dated Brent / Gasoline 83.7 RBOB NYH / Diesel 15ppm NYH

26

9.3612.67

(1.96)

(7.26)

0.67

5.24



LLS: $108.47/BBL 91% Capacity Utilization 74% Market Capture

Market 3:2:1 – LLS / Gasoline 85 CBOB / Diesel 61 8ppm


Gulf Coast$/BBL

27

28.28 26.34

(0.70)

8.19

(5.91)

(3.52)




Central Corridor$/BBL

WTI: $93.44/BBL 95% Capacity Utilization 93% Market Capture

Market 3:2:1 – WTI / Gasoline Unl 87 Group 3 / ULSD Group 3

28

16.30

7.91

(2.39)

5.64

(7.99)

(3.65)




Western / Pacific$/BBL

ANS: $110.01/BBL 89% Capacity Utilization 49% Market Capture

Market 3:2:1 – ANS Spot / Los Angeles CARBOB / Los Angeles No2 CARB

29

Corporate and Other Adjusted Costs2Q 2012$MM

(89)

(12)(11)

(21)

(45)

Net Interest Expense

Corporate Staff

Technology Other 2Q 2012Adjusted

After-tax Costs

30

Non-GAAP Reconciliations

References to earnings refer to net income attributable to Phillips 66.

Millions of Dollars, except as Indicated 2Q Jun YTD 2Q Jun YTDConsolidatedEarnings (loss) 1,181$ 1,817$ 1,039$ 1,715$ Adjustments: Net gain on asset sales (106) (106) (26) (28) Impairments 170 212 Pending claims and settlements 38 57 Premium on early debt retirement 35 35 Repositioning costs 30 30 Repositioning tax adjustment 69 136 Adjusted earnings 1,417$ 2,181$ 1,013$ 1,687$

Earnings per share of common stock (dollars) 1.86$ 2.86$ 1.64$ 2.70$

Adjusted earnings per share of common stock (dollars) 2.23$ 3.43$ 1.60$ 2.66$

2012 2011

31


References to earnings refer to net income attributable to Phillips 66.

Millions of Dollars 2Q Jun YTD 2Q Jun YTDR&MEarnings (loss) 1,184$ 1,584$ 774$ 1,262$ Adjustments: Net gain on asset sales (106) (106) (26) (28) Impairments 42 Pending claims and settlements 38 57 Repositioning tax adjustment 69 136 Adjusted earnings 1,185$ 1,713$ 748$ 1,234$

RefiningEarnings (loss) 882$ 1,259$ 498$ 936$ Adjustments: Net gain on asset sales (104) (104) Impairments 42 Pending claims and settlements 19 Repositioning tax adjustment 73 73 Adjusted earnings 851$ 1,289$ 498$ 936$

Marketing, Specialties and OtherEarnings (loss) 302$ 325$ 276$ 326$ Adjustments: Net gain on asset sales (2) (2) (26) (28) Pending claims and settlements 38 38 Repositioning tax adjustment (4) 63 Adjusted earnings 334$ 424$ 250$ 298$

MidstreamEarnings (loss) (91)$ (2)$ 111$ 172$ Adjustments: Impairments 170 170 Adjusted earnings 79$ 168$ 111$ 172$

ChemicalsEarnings (loss) 207$ 424$ 190$ 375$ Adjustments: Premium on early debt retirement 35 35 Adjusted earnings 242$ 459$ 190$ 375$

CorporateEarnings (loss) (119)$ (189)$ (36)$ (94)$ Adjustments: Repositioning costs 30 30 Adjusted earnings (89)$ (159)$ (36)$ (94)$

2012 2011

321 Attributable to Phillips 66.2 Includes items such as deferred tax, accretion on discounted liabilities, and undistributed equity earnings.


1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012

GAAP R&M Net Income1 - $MM 488 774 785 1,801 400 1,184 GAAP R&M Net Income1 - $/BBL 1.77 2.70 2.68 6.30 1.62 4.37

Non-core earnings impacts (2) (26) 407 (1,563) 128 1 R&M Income - $/BBL 1.77 2.61 4.07 0.83 2.14 4.37 R&M D&A - $/BBL 0.79 0.78 0.75 0.84 0.87 0.82 R&M Cash Contribution - $/BBL 2.56 3.39 4.82 1.67 3.01 5.19

GAAP R&M CFOA - $MM (1,540) 2,900 208 2,663 (424) 1,906 GAAP R&M CFOA - $/BBL (5.60) 10.10 0.71 9.31 (1.72) 7.03

Excluded GAAP items - $MMNon-cash working capital (2,007) 1,780 (1,090) 1,712 (941) 358 Non-working capital adjustments2

(240) 120 291 (1,091) (100) 143 R&M Cash Contribution - $/BBL 2.56 3.39 4.82 1.67 3.01 5.19

331 Total equity plus total debt.


2009 2010 2011 2012 YTD

PSX - ROCENumerator ($MM)Net income 479 740 4,780 1,820 After-tax interest expense 1 1 11 62

GAAP ROCE earnings 480 741 4,791 1,882 Special Items 21 1,024 (1,184) 364

Adjusted earnings 501 1,765 3,607 2,246

Denominator ($MM) GAAP average capital employed 1 26,417 26,906 25,064 25,325

Annualized Adjusted ROCE 2% 7% 14% 18%Annualized GAAP ROCE 2% 3% 19% 15%



2009 2010 2011 2012 YTD

R&M - ROCENumerator ($MM)Net income 74 151 3,853 1,587 After-tax interest expense - - - -

GAAP ROCE earnings 74 151 3,853 1,587 Special Items 109 1,024 (1,184) 129

Adjusted earnings 183 1,175 2,669 1,716





2009 2010 2011 2012 YTDMidstream - ROCE

Numerator ($MM)Net income 317 262 403 (2) After-tax interest expense - - - -

GAAP ROCE earnings 317 262 403 (2) Special Items (88) - - 170

Adjusted earnings 229 262 403 168





2009 2010 2011 2012 YTDChemicals - ROCE

Numerator ($MM)Net income 228 486 716 424 After-tax interest expense - - - -

GAAP ROCE earnings 228 486 716 424 Special Items - - - 35

Adjusted earnings 228 486 716 459



Second-Quarter 2012 Conference Call · 2017. 6. 23. · Market 3:2:1 Configuration Secondary...

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