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Psx q3 2016 earnings slides final

- Phillips 66 reported adjusted earnings of $556 million for Q3 2016 compared to $499 million in Q2 2016. - Refining earnings decreased from $134 million to $142 million due to higher turnaround costs and lower margins. - Midstream earnings increased from $39 million to $75 million due to higher volumes and natural gas prices. - Chemicals earnings remained flat at $190 million despite higher margins as downtime offset gains.

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PHILLIPS 66 THIRD QUARTER CONFERENCE CALL October 28, 2016
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,” “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 NGL, crude oil, petroleum products and natural gas prices, and refining, marketing 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 NGL, crude oil, natural gas 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. 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. 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. CAUTIONARY STATEMENT 2
3 EXECUTING THE STRATEGY
4 OVERVIEW 3Q 2016 Adjusted Earnings $556 MM Adjusted EPS $1.05 Operating cash flow $883 MM Capital expenditures and investments $661 MM Shareholder distributions 1 $508 MM (1) Shareholder distributions include dividends and share repurchases Net-debt-to-capital ratio 21% Annualized adjusted YTD ROCE 7% PSXP equity offering proceeds $299 MM
499 556 36 0 (18) 38 1 2Q 2016 Adjusted Earnings Midstream Chemicals Refining Marketing & Specialties Corporate & Other 3Q 2016 Adjusted Earnings 3Q 2016 Adjusted Earnings $MM 75 (110)134190 267 ADJUSTED EARNINGS 3Q 2016 5
39 75 18 (2) 20 2Q 2016 Adjusted Earnings Transportation NGL DCP Midstream 3Q 2016 Adjusted Earnings MIDSTREAM 3Q 2016 63 3 9 3Q 2016 Adjusted Earnings $MMTransportation volumes impacted by scheduled refinery downtime NGL improved seasonal trading and storage DCP Midstream benefited from higher natural gas prices and self-help initiatives 18% increase in PSXP distributions to Phillips 66 6
190 190 (5) 6 (1) 2Q 2016 Adjusted Earnings Olefins & Polyolefins Specialties, Aromatics & Styrenics Other 3Q 2016 Adjusted Earnings CHEMICALS 3Q 2016 165 31 (6) 3Q 2016 Adjusted Earnings $MMImproved ethylene chain cash margin and benzene margins Increased unplanned downtime 91% O&P capacity utilization 7
152 134 87 (30) (18) (57) 2Q 2016 Adjusted Earnings Atlantic Basin / Europe Gulf Coast Central Corridor West Coast 3Q 2016 Adjusted Earnings $MM REFINING 3Q 2016 8 5 142(13) 0 3Q 2016 Adjusted Earnings 97% crude utilization $117 MM pre-tax turnaround costs 84% clean product yield $7.23/BBL realized margin
12.96 7.23 (2.26) (2.94) 1.27 (1.80) Market 3:2:1 Configuration Secondary Products Feedstock Other Realized Margin WORLDWIDE REFINING $/BBL REFINING MARGINS – MARKET VS. REALIZED 3Q 2016 9 Avg Market Crude: $45.68/BBL 56% Market Capture
229 267 29 9 2Q 2016 Adjusted Earnings Marketing & Other Specialties 3Q 2016 Adjusted Earnings MARKETING AND SPECIALTIES 3Q 2016 228 39 3Q 2016 Adjusted Earnings 10 Strong global Marketing margins Continued strong gasoline demand Improved Base Oil margins and volumes $MM
(111) (110) 2 (1) 2Q 2016 Adjusted Net Loss Net Interest Expense Corporate Overhead & Other 3Q 2016 Adjusted Net Loss $MM CORPORATE AND OTHER 3Q 2016 11
3.1 2.3 1.0 1.8 0.5 (2.0) (0.3) (1.8) December 31, 2015 Cash Balance* CFO (excluding working capital) Working Capital PSXP Equity Proceeds Capital Expenditures & Investments Shareholder Distributions Other September 30, 2016 Cash Balance* $B CASH FLOW YTD 2016 12 * Includes cash and cash equivalents
13 OUTLOOK 4Q 2016 Global Olefins & Polyolefins utilization Mid-80% Refining crude utilization Low-90% Effective income tax rate Mid-30% Corporate & Other costs (after-tax) $130 MM - $140 MM Refining turnaround expenses (pre-tax) $170 MM - $200 MM
PHILLIPS 66 THIRD QUARTER 2016 CONFERENCE CALL Questions and Answers
PHILLIPS 66 THIRD QUARTER 2016 CONFERENCE CALL Appendix
ESTIMATED SENSITIVITIES 2016 16 Sensitivities shown above are independent and only valid within a limited price range Midstream - DCP (net to Phillips 66) 10¢/Gal Increase in NGL price 25 10¢/MMBtu Increase in Natural Gas price 2 $1/BBL Increase in WTI price 1 Chemicals - CPChem (net to Phillips 66) 1¢/Lb Increase in Chain Margin (Ethylene, Polyethylene, NAO) 35 Worldwide Refining $1/BBL Increase in Gasoline Margin 230 $1/BBL Increase in Distillate Margin 200 $1/BBL Widening LLS / Maya Differential (LLS less Maya) 45 $1/BBL Widening WTI / WCS Differential (WTI less WCS) 40 $1/BBL Widening WTI / WTS Differential (WTI less WTS) 20 $1/BBL Widening LLS / Medium Sour Differential (LLS less Medium Sour) 15 $1/BBL Widening ANS / WCS Differential (ANS less WCS) 10 10¢/MMBtu Increase in Natural Gas price (10) Impacts due to Actual Crude Feedstock Differing from Feedstock Assumed in Market Indicators: Annual Net Income $MM
22.0 23.9 23.6 24.1 24.3 21.6 23.1 22.8 22.9 22.9 8.6 8.9 8.8 8.9 8.9 8.6 7.8 7.7 7.7 7.7 5.2 3.1 1.7 2.2 2.3 5.2 3.0 1.7 2.2 2.3 28% 27% 27% 27% 27% 28% 25% 25% 25% 25% 13% 20% 23% 22% 21% 14% 17% 21% 19% 19% 2014 2015 1Q 2016 2Q 2016 3Q 2016 2014 2015 1Q 2016 2Q 2016 3Q 2016 Equity $B Debt $B Cash & Cash Equivalents $B Debt-to-Capital Net-Debt-to-Capital CAPITAL STRUCTURE 2014 – 2016 17 Consolidated PSX Excluding PSXP
13.11 5.04 (2.48) (1.64) (1.42) (2.53) Market 3:2:1 Configuration Secondary Products Feedstock Other Realized Margin ATLANTIC BASIN/EUROPE $/BBL REFINING MARGINS – MARKET VS. REALIZED 3Q 2016 18 Market 3:2:1 – Dated Brent / Gasoline 83.7 RBOB NYH / Diesel 15ppm NYH Brent: $45.85/BBL 100% Crude Capacity Utilization 38% Market Capture
10.45 5.47 (2.20) (3.50) 2.71 (1.99) Market 3:2:1 Configuration Secondary Products Feedstock Other Realized Margin GULF COAST $/BBL REFINING MARGINS – MARKET VS. REALIZED 3Q 2016 19 Market 3:2:1 – LLS / Gasoline 85 CBOB / Diesel 62 10ppm LLS: $46.53/BBL 94% Crude Capacity Utilization 52% Market Capture
14.57 11.18 (1.96) (3.46) 2.91 (0.88) Market 3:2:1 Configuration Secondary Products Feedstock Other Realized Margin CENTRAL CORRIDOR $/BBL REFINING MARGINS – MARKET VS. REALIZED 3Q 2016 20 Market 3:2:1 – WTI / Gasoline Unl Sub Octane Group 3 / ULSD Group 3 WTI: $44.88/BBL 99% Crude Capacity Utilization 77% Market Capture
15.66 9.07 (2.03) (3.28) 0.49 (1.77) Market 3:2:1 Configuration Secondary Products Feedstock Other Realized Margin WEST COAST $/BBL REFINING MARGINS – MARKET VS. REALIZED 3Q 2016 21 Market 3:2:1 – ANS Spot / Los Angeles CARBOB / Los Angeles No. 2 CARB ANS: $44.78/BBL 96% Crude Capacity Utilization 58% Market Capture
1,647 556 (16) (82) (918) (77) 2 3Q 2015 Adjusted Earnings Midstream Chemicals Refining Marketing & Specialties Corporate & Other 3Q 2016 Adjusted Earnings 3Q 2016 Adjusted Earnings $MM ADJUSTED EARNINGS 3Q 2016 VS. 3Q 2015 22 75 (110)134190 267
91 75 27 (14) (29) 3Q 2015 Adjusted Earnings Transportation NGL DCP Midstream 3Q 2016 Adjusted Earnings $MM MIDSTREAM 3Q 2016 VS. 3Q 2015 23 63 3 9 3Q 2016 Adjusted Earnings
272 190 (96) 14 0 3Q 2015 Adjusted Earnings Olefins & Polyolefins Specialties, Aromatics & Styrenics Other 3Q 2016 Adjusted Earnings $MM CHEMICALS 3Q 2016 VS. 3Q 2015 24 165 (6)31 3Q 2016 Adjusted Earnings
1,052 134 (188) (298) (230) (202) 3Q 2015 Adjusted Earnings Atlantic Basin / Europe Gulf Coast Central Corridor West Coast 3Q 2016 Adjusted Earnings $MM REFINING 3Q 2016 VS. 3Q 2015 25 5 142(13) 0 3Q 2016 Adjusted Earnings
344 267 (63) (14) 3Q 2015 Adjusted Earnings Marketing & Other Specialties 3Q 2016 Adjusted Earnings $MM MARKETING AND SPECIALTIES 3Q 2016 VS. 3Q 2015 26 228 39 3Q 2016 Adjusted Earnings
(112) (110) (7) 9 3Q 2015 Adjusted Net Loss Net Interest Expense Corporate Overhead & Other 3Q 2016 Adjusted Net Loss $MM CORPORATE AND OTHER 3Q 2016 VS. 3Q 2015 27
28 NON-GAAP RECONCILIATIONS 2016 Sep YTD 3Q 2Q Sep YTD 3Q Phillips 66 Net Income (Loss) Attributable to Phillips 66 1,392$ 511$ 496$ 3,577$ 1,578$ Pre-tax Adjustments: Asset dispositions - - - (280) (30) Pension settlement expense - - - 75 75 Impairments by equity affiliates 95 89 - 218 24 Certain tax impacts - - - (5) - Pending claims and settlements (117) (72) - 30 30 Recognition of deferred logistics commitments 30 - 30 - - Tax impact of adjustments * 15 28 (27) (132) (30) Adjusted Net Income (Loss) Attributable to Phillips 66 1,415$ 556$ 499$ 3,483$ 1,647$ Net Income (Loss) Attributable to Phillips 66 Per Share of Common Stock (dollars) ** 2.61$ 0.96$ 0.93$ 6.52$ 2.90$ Adjusted Net Income (Loss) Attributable to Phillips 66 Per Share of Common Stock (dollars) ** 2.66$ 1.05$ 0.94$ 6.34$ 3.02$ Millions of Dollars Except as Indicated 2015 * We generally tax effect taxable U.S.-based special items using a combined federal and state statutory income tax rate of approximately 38 percent. Taxable special items attributable to foreign locations likewise use a local statutory income tax rate. Nontaxable events reflect zero income tax. These events include, but are not limited to, most goodwill impairments, transactions legislatively exempt from income tax, transactions related to entities for which we have made an assertion that the undistributed earnings are permanently reinvested, or transactions occurring in jurisdictions with a valuation allowance. ** Weighted-average diluted shares outstanding and income allocated to participating securities, if applicable, in the adjusted earnings per share calculation are the same as those used in the GAAP diluted earnings per share calculation.
29 NON-GAAP RECONCILIATIONS Sep YTD 3Q 2Q Sep YTD 3Q Midstream Net Income (Loss) Attributable to Phillips 66 179$ 75$ 39$ 90$ 101$ Pre-tax Adjustments: Pension settlement expense - - - 9 9 Impairments by equity affiliates 6 - - 198 4 Asset dispositions - - - (30) (30) Pending claims and settlements (45) - - - - Tax impact of adjustments 14 - - (61) 7 Adjusted Net Income (Loss) Attributable to Phillips 66 154$ 75$ 39$ 206$ 91$ Chemicals Net Income (Loss) Attributable to Phillips 66 447$ 101$ 190$ 750$ 252$ Pre-tax Adjustments: Impairments by equity affiliates 89 89 - 20 20 Tax impact of adjustments - - - - - Adjusted Net Income (Loss) Attributable to Phillips 66 536$ 190$ 190$ 770$ 272$ Millions of Dollars Except as Indicated 2016 2015
30 NON-GAAP RECONCILIATIONS Sep YTD 3Q 2Q Sep YTD 3Q Refining Net Income (Loss) Attributable to Phillips 66 412$ 177$ 149$ 2,145$ 1,003$ Pre-tax Adjustments: Asset dispositions - - - (8) - Pension settlement expense - - - 49 49 Pending claims and settlements (70) (70) - 30 30 Recognition of deferred logistics commitments 30 - 30 - - Tax impact of adjustments - 27 (27) (65) (30) Adjusted Net Income (Loss) Attributable to Phillips 66 372$ 134$ 152$ 2,151$ 1,052$ Marketing & Specialties Net Income (Loss) Attributable to Phillips 66 701$ 267$ 229$ 956$ 338$ Pre-tax Adjustments: Asset dispositions - - - (242) - Pension settlement expense - - - 10 10 Tax impact of adjustments - - - (4) (4) Adjusted Net Income (Loss) Attributable to Phillips 66 701$ 267$ 229$ 720$ 344$ Corporate and Other Net Income (Loss) Attributable to Phillips 66 (347)$ (109)$ (111)$ (364)$ (116)$ Pre-tax Adjustments: Pending claims and settlements (2) (2) - - - Pension settlement expense - - - 7 7 Certain tax impacts - - - (5) - Tax impact of adjustments 1 1 - (2) (3) Adjusted Net Income (Loss) Attributable to Phillips 66 (348)$ (110)$ (111)$ (364)$ (112)$ Millions of Dollars Except as Indicated 2016 2015
31 NON-GAAP RECONCILIATIONS Sep YTD 3Q 2Q Sep YTD 3Q Midstream - Transportation Net Income (Loss) Attributable to Phillips 66 200$ 63$ 65$ 207$ 77$ Pre-tax Adjustments: Tax impact of adjustments - - - - - Adjusted Net Income (Loss) Attributable to Phillips 66 200$ 63$ 65$ 207$ 77$ Midstream - NGL Net Income (Loss) Attributable to Phillips 66 (25)$ 3$ (17)$ 48$ 26$ Pre-tax Adjustments: Pension settlement expense - - - 9 9 Tax impact of adjustments - - - (3) (3) Adjusted Net Income (Loss) Attributable to Phillips 66 (25)$ 3$ (17)$ 54$ 32$ Midstream - DCP Midstream Net Income (Loss) Attributable to Phillips 66 4$ 9$ (9)$ (165)$ (2)$ Pre-tax Adjustments: Impairments by equity affiliates 6 - - 198 4 Pending claims and settlements (45) - - - - Asset dispositions - - - (30) (30) Tax impact of adjustments 14 - - (58) 10 Adjusted Net Income (Loss) Attributable to Phillips 66 (21)$ 9$ (9)$ (55)$ (18)$ Millions of Dollars Except as Indicated 2016 2015
32 NON-GAAP RECONCILIATIONS Sep YTD 3Q 2Q Sep YTD 3Q Refining - Atlantic Basin / Europe Net Income (Loss) Attributable to Phillips 66 41$ 5$ 32$ 383$ 180$ Pre-tax Adjustments: Pension settlement expense - - - 13 13 Pending claims and settlements - - - 8 8 Recognition of deferred logistics commitments 30 - 30 - - Tax impact of adjustments (27) - (27) (46) (8) Adjusted Net Income (Loss) Attributable to Phillips 66 44$ 5$ 35$ 358$ 193$ Refining - Gulf Coast Net Income (Loss) Attributable to Phillips 66 103$ 30$ 5$ 423$ 269$ Pre-tax Adjustments: Pension settlement expense - - - 16 16 Pending claims and settlements (70) (70) - 10 10 Tax impact of adjustments 27 27 - (10) (10) Adjusted Net Income (Loss) Attributable to Phillips 66 60$ (13)$ 5$ 439$ 285$ Millions of Dollars Except as Indicated 2016 2015
33 NON-GAAP RECONCILIATIONS Sep YTD 3Q 2Q Sep YTD 3Q Refining - Central Corridor Net Income (Loss) Attributable to Phillips 66 217$ 142$ 55$ 771$ 360$ Pre-tax Adjustments: Pension settlement expense - - - 11 11 Pending claims and settlements - - - 7 7 Tax impact of adjustments - - - (6) (6) Adjusted Net Income (Loss) Attributable to Phillips 66 217$ 142$ 55$ 783$ 372$ Refining - West Coast Net Income (Loss) Attributable to Phillips 66 51$ -$ 57$ 568$ 194$ Pre-tax Adjustments: Asset dispositions - - - (8) - Pension settlement expense - - - 9 9 Pending claims and settlements - - - 5 5 Tax impact of adjustments - - - (3) (6) Adjusted Net Income (Loss) Attributable to Phillips 66 51$ -$ 57$ 571$ 202$ Millions of Dollars Except as Indicated 2016 2015
34 NON-GAAP RECONCILIATIONS Sep YTD 3Q 2Q Sep YTD 3Q Marketing & Specialties - Marketing & Other Net Income (Loss) Attributable to Phillips 66 589$ 228$ 199$ 805$ 285$ Pre-tax Adjustments: Asset dispositions - - - (242) - Pension settlement expense - - - 10 10 Tax impact of adjustments - - - (4) (4) Adjusted Net Income (Loss) Attributable to Phillips 66 589$ 228$ 199$ 569$ 291$ Marketing & Specialties - Specialties Net Income (Loss) Attributable to Phillips 66 112$ 39$ 30$ 151$ 53$ Pre-tax Adjustments: Tax impact of adjustments - - - - - Adjusted Net Income (Loss) Attributable to Phillips 66 112$ 39$ 30$ 151$ 53$ Millions of Dollars Except as Indicated 20152016
35 * Total equity plus total debt NON-GAAP RECONCILIATIONS 2016 September YTD Phillips 66 Numerator ($MM) Net Income 1,450$ After-tax interest expense 162$ GAAP ROCE earnings 1,612$ Special Items 23$ Adjusted ROCE earnings 1,635$ Denominator ($MM) GAAP average capital employed * 32,997$ 2016 Annualized Adjusted ROCE 7% 2016 Annualized GAAP ROCE 7%
36 NON-GAAP RECONCILIATIONS Phillips 66 Consolidated Phillips 66 Partners * Adjusted Phillips 66 Total Debt 8,858$ 1,141$ 7,717$ Total Equity 24,311$ 1,373$ 22,938$ Debt-to-Capital Ratio 27% 25% Total Cash 2,337$ 19$ 2,318$ Net-Debt-to-Capital Ratio 21% 19% Millions of Dollars 2016 3Q * PSXP's third-party debt and Phillips 66's noncontrolling interest attributable to PSXP
37 NON-GAAP RECONCILIATIONS Growth Sustaining Total Growth Sustaining Total Capital expenditures and investments Midstream 269$ 46$ 315$ 920$ 125$ 1,045$ Refining 83$ 206$ 289$ 252$ 575$ 827$ Marketing & Specialties 12$ 14$ 26$ 34$ 29$ 63$ Corporate and Other 1$ 30$ 31$ 3$ 93$ 96$ Total 365$ 296$ 661$ 1,209$ 822$ 2,031$ Millions of Dollars 2016 September YTD Millions of Dollars 2016 3Q
38 NON-GAAP RECONCILIATIONS Millions of Dollars 2016 3Q Effective Tax Rates Income before taxes 813$ Special items 17$ Adjusted income before taxes 830$ Provision for taxes 277$ Special items (28)$ Adjusted provision for taxes 249$ GAAP effective tax rate 34% Adjusted effective tax rate 30%

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Psx q3 2016 earnings slides final

  • 1.
    PHILLIPS 66 THIRD QUARTERCONFERENCE CALL October 28, 2016
  • 2.
    This presentation containscertain 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 NGL, crude oil, petroleum products and natural gas prices, and refining, marketing 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 NGL, crude oil, natural gas 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. 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. 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. CAUTIONARY STATEMENT 2
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  • 4.
    4 OVERVIEW 3Q 2016 Adjusted Earnings$556 MM Adjusted EPS $1.05 Operating cash flow $883 MM Capital expenditures and investments $661 MM Shareholder distributions 1 $508 MM (1) Shareholder distributions include dividends and share repurchases Net-debt-to-capital ratio 21% Annualized adjusted YTD ROCE 7% PSXP equity offering proceeds $299 MM
  • 5.
    499 556 36 0 (18) 38 1 2Q 2016 Adjusted Earnings MidstreamChemicals Refining Marketing & Specialties Corporate & Other 3Q 2016 Adjusted Earnings 3Q 2016 Adjusted Earnings $MM 75 (110)134190 267 ADJUSTED EARNINGS 3Q 2016 5
  • 6.
    39 75 18 (2) 20 2Q 2016 Adjusted Earnings Transportation NGLDCP Midstream 3Q 2016 Adjusted Earnings MIDSTREAM 3Q 2016 63 3 9 3Q 2016 Adjusted Earnings $MMTransportation volumes impacted by scheduled refinery downtime NGL improved seasonal trading and storage DCP Midstream benefited from higher natural gas prices and self-help initiatives 18% increase in PSXP distributions to Phillips 66 6
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    190 190 (5) 6 (1) 2Q 2016 Adjusted Earnings Olefins& Polyolefins Specialties, Aromatics & Styrenics Other 3Q 2016 Adjusted Earnings CHEMICALS 3Q 2016 165 31 (6) 3Q 2016 Adjusted Earnings $MMImproved ethylene chain cash margin and benzene margins Increased unplanned downtime 91% O&P capacity utilization 7
  • 8.
    152 134 87 (30) (18) (57) 2Q 2016 Adjusted Earnings Atlantic Basin / Europe GulfCoast Central Corridor West Coast 3Q 2016 Adjusted Earnings $MM REFINING 3Q 2016 8 5 142(13) 0 3Q 2016 Adjusted Earnings 97% crude utilization $117 MM pre-tax turnaround costs 84% clean product yield $7.23/BBL realized margin
  • 9.
    12.96 7.23 (2.26) (2.94) 1.27 (1.80) Market 3:2:1 Configuration Secondary Products Feedstock OtherRealized Margin WORLDWIDE REFINING $/BBL REFINING MARGINS – MARKET VS. REALIZED 3Q 2016 9 Avg Market Crude: $45.68/BBL 56% Market Capture
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    229 267 29 9 2Q 2016 Adjusted Earnings Marketing &Other Specialties 3Q 2016 Adjusted Earnings MARKETING AND SPECIALTIES 3Q 2016 228 39 3Q 2016 Adjusted Earnings 10 Strong global Marketing margins Continued strong gasoline demand Improved Base Oil margins and volumes $MM
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    (111) (110) 2 (1) 2Q 2016 Adjusted NetLoss Net Interest Expense Corporate Overhead & Other 3Q 2016 Adjusted Net Loss $MM CORPORATE AND OTHER 3Q 2016 11
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    3.1 2.3 1.0 1.8 0.5 (2.0) (0.3) (1.8) December 31, 2015 Cash Balance* CFO (excluding working capital) Working Capital PSXP Equity Proceeds Capital Expenditures &Investments Shareholder Distributions Other September 30, 2016 Cash Balance* $B CASH FLOW YTD 2016 12 * Includes cash and cash equivalents
  • 13.
    13 OUTLOOK 4Q 2016 Global Olefins& Polyolefins utilization Mid-80% Refining crude utilization Low-90% Effective income tax rate Mid-30% Corporate & Other costs (after-tax) $130 MM - $140 MM Refining turnaround expenses (pre-tax) $170 MM - $200 MM
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    PHILLIPS 66 THIRD QUARTER2016 CONFERENCE CALL Questions and Answers
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    PHILLIPS 66 THIRD QUARTER2016 CONFERENCE CALL Appendix
  • 16.
    ESTIMATED SENSITIVITIES 2016 16 Sensitivities shownabove are independent and only valid within a limited price range Midstream - DCP (net to Phillips 66) 10¢/Gal Increase in NGL price 25 10¢/MMBtu Increase in Natural Gas price 2 $1/BBL Increase in WTI price 1 Chemicals - CPChem (net to Phillips 66) 1¢/Lb Increase in Chain Margin (Ethylene, Polyethylene, NAO) 35 Worldwide Refining $1/BBL Increase in Gasoline Margin 230 $1/BBL Increase in Distillate Margin 200 $1/BBL Widening LLS / Maya Differential (LLS less Maya) 45 $1/BBL Widening WTI / WCS Differential (WTI less WCS) 40 $1/BBL Widening WTI / WTS Differential (WTI less WTS) 20 $1/BBL Widening LLS / Medium Sour Differential (LLS less Medium Sour) 15 $1/BBL Widening ANS / WCS Differential (ANS less WCS) 10 10¢/MMBtu Increase in Natural Gas price (10) Impacts due to Actual Crude Feedstock Differing from Feedstock Assumed in Market Indicators: Annual Net Income $MM
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    22.0 23.9 23.6 24.124.3 21.6 23.1 22.8 22.9 22.9 8.6 8.9 8.8 8.9 8.9 8.6 7.8 7.7 7.7 7.7 5.2 3.1 1.7 2.2 2.3 5.2 3.0 1.7 2.2 2.3 28% 27% 27% 27% 27% 28% 25% 25% 25% 25% 13% 20% 23% 22% 21% 14% 17% 21% 19% 19% 2014 2015 1Q 2016 2Q 2016 3Q 2016 2014 2015 1Q 2016 2Q 2016 3Q 2016 Equity $B Debt $B Cash & Cash Equivalents $B Debt-to-Capital Net-Debt-to-Capital CAPITAL STRUCTURE 2014 – 2016 17 Consolidated PSX Excluding PSXP
  • 18.
    13.11 5.04 (2.48) (1.64) (1.42) (2.53) Market 3:2:1 Configuration Secondary Products Feedstock OtherRealized Margin ATLANTIC BASIN/EUROPE $/BBL REFINING MARGINS – MARKET VS. REALIZED 3Q 2016 18 Market 3:2:1 – Dated Brent / Gasoline 83.7 RBOB NYH / Diesel 15ppm NYH Brent: $45.85/BBL 100% Crude Capacity Utilization 38% Market Capture
  • 19.
    10.45 5.47 (2.20) (3.50) 2.71 (1.99) Market 3:2:1 Configuration Secondary Products Feedstock OtherRealized Margin GULF COAST $/BBL REFINING MARGINS – MARKET VS. REALIZED 3Q 2016 19 Market 3:2:1 – LLS / Gasoline 85 CBOB / Diesel 62 10ppm LLS: $46.53/BBL 94% Crude Capacity Utilization 52% Market Capture
  • 20.
    14.57 11.18 (1.96) (3.46) 2.91 (0.88) Market 3:2:1 Configuration Secondary Products Feedstock OtherRealized Margin CENTRAL CORRIDOR $/BBL REFINING MARGINS – MARKET VS. REALIZED 3Q 2016 20 Market 3:2:1 – WTI / Gasoline Unl Sub Octane Group 3 / ULSD Group 3 WTI: $44.88/BBL 99% Crude Capacity Utilization 77% Market Capture
  • 21.
    15.66 9.07 (2.03) (3.28) 0.49 (1.77) Market 3:2:1 Configuration Secondary Products Feedstock OtherRealized Margin WEST COAST $/BBL REFINING MARGINS – MARKET VS. REALIZED 3Q 2016 21 Market 3:2:1 – ANS Spot / Los Angeles CARBOB / Los Angeles No. 2 CARB ANS: $44.78/BBL 96% Crude Capacity Utilization 58% Market Capture
  • 22.
    1,647 556 (16) (82) (918) (77) 2 3Q 2015 Adjusted Earnings Midstream ChemicalsRefining Marketing & Specialties Corporate & Other 3Q 2016 Adjusted Earnings 3Q 2016 Adjusted Earnings $MM ADJUSTED EARNINGS 3Q 2016 VS. 3Q 2015 22 75 (110)134190 267
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    91 75 27 (14) (29) 3Q 2015 Adjusted Earnings Transportation NGLDCP Midstream 3Q 2016 Adjusted Earnings $MM MIDSTREAM 3Q 2016 VS. 3Q 2015 23 63 3 9 3Q 2016 Adjusted Earnings
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    272 190 (96) 14 0 3Q 2015 Adjusted Earnings Olefins& Polyolefins Specialties, Aromatics & Styrenics Other 3Q 2016 Adjusted Earnings $MM CHEMICALS 3Q 2016 VS. 3Q 2015 24 165 (6)31 3Q 2016 Adjusted Earnings
  • 25.
    1,052 134 (188) (298) (230) (202) 3Q 2015 Adjusted Earnings Atlantic Basin / Europe Gulf Coast Central Corridor WestCoast 3Q 2016 Adjusted Earnings $MM REFINING 3Q 2016 VS. 3Q 2015 25 5 142(13) 0 3Q 2016 Adjusted Earnings
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    344 267 (63) (14) 3Q 2015 Adjusted Earnings Marketing & Other Specialties3Q 2016 Adjusted Earnings $MM MARKETING AND SPECIALTIES 3Q 2016 VS. 3Q 2015 26 228 39 3Q 2016 Adjusted Earnings
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    (112) (110) (7) 9 3Q 2015 Adjusted NetLoss Net Interest Expense Corporate Overhead & Other 3Q 2016 Adjusted Net Loss $MM CORPORATE AND OTHER 3Q 2016 VS. 3Q 2015 27
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    28 NON-GAAP RECONCILIATIONS 2016 Sep YTD3Q 2Q Sep YTD 3Q Phillips 66 Net Income (Loss) Attributable to Phillips 66 1,392$ 511$ 496$ 3,577$ 1,578$ Pre-tax Adjustments: Asset dispositions - - - (280) (30) Pension settlement expense - - - 75 75 Impairments by equity affiliates 95 89 - 218 24 Certain tax impacts - - - (5) - Pending claims and settlements (117) (72) - 30 30 Recognition of deferred logistics commitments 30 - 30 - - Tax impact of adjustments * 15 28 (27) (132) (30) Adjusted Net Income (Loss) Attributable to Phillips 66 1,415$ 556$ 499$ 3,483$ 1,647$ Net Income (Loss) Attributable to Phillips 66 Per Share of Common Stock (dollars) ** 2.61$ 0.96$ 0.93$ 6.52$ 2.90$ Adjusted Net Income (Loss) Attributable to Phillips 66 Per Share of Common Stock (dollars) ** 2.66$ 1.05$ 0.94$ 6.34$ 3.02$ Millions of Dollars Except as Indicated 2015 * We generally tax effect taxable U.S.-based special items using a combined federal and state statutory income tax rate of approximately 38 percent. Taxable special items attributable to foreign locations likewise use a local statutory income tax rate. Nontaxable events reflect zero income tax. These events include, but are not limited to, most goodwill impairments, transactions legislatively exempt from income tax, transactions related to entities for which we have made an assertion that the undistributed earnings are permanently reinvested, or transactions occurring in jurisdictions with a valuation allowance. ** Weighted-average diluted shares outstanding and income allocated to participating securities, if applicable, in the adjusted earnings per share calculation are the same as those used in the GAAP diluted earnings per share calculation.
  • 29.
    29 NON-GAAP RECONCILIATIONS Sep YTD3Q 2Q Sep YTD 3Q Midstream Net Income (Loss) Attributable to Phillips 66 179$ 75$ 39$ 90$ 101$ Pre-tax Adjustments: Pension settlement expense - - - 9 9 Impairments by equity affiliates 6 - - 198 4 Asset dispositions - - - (30) (30) Pending claims and settlements (45) - - - - Tax impact of adjustments 14 - - (61) 7 Adjusted Net Income (Loss) Attributable to Phillips 66 154$ 75$ 39$ 206$ 91$ Chemicals Net Income (Loss) Attributable to Phillips 66 447$ 101$ 190$ 750$ 252$ Pre-tax Adjustments: Impairments by equity affiliates 89 89 - 20 20 Tax impact of adjustments - - - - - Adjusted Net Income (Loss) Attributable to Phillips 66 536$ 190$ 190$ 770$ 272$ Millions of Dollars Except as Indicated 2016 2015
  • 30.
    30 NON-GAAP RECONCILIATIONS Sep YTD3Q 2Q Sep YTD 3Q Refining Net Income (Loss) Attributable to Phillips 66 412$ 177$ 149$ 2,145$ 1,003$ Pre-tax Adjustments: Asset dispositions - - - (8) - Pension settlement expense - - - 49 49 Pending claims and settlements (70) (70) - 30 30 Recognition of deferred logistics commitments 30 - 30 - - Tax impact of adjustments - 27 (27) (65) (30) Adjusted Net Income (Loss) Attributable to Phillips 66 372$ 134$ 152$ 2,151$ 1,052$ Marketing & Specialties Net Income (Loss) Attributable to Phillips 66 701$ 267$ 229$ 956$ 338$ Pre-tax Adjustments: Asset dispositions - - - (242) - Pension settlement expense - - - 10 10 Tax impact of adjustments - - - (4) (4) Adjusted Net Income (Loss) Attributable to Phillips 66 701$ 267$ 229$ 720$ 344$ Corporate and Other Net Income (Loss) Attributable to Phillips 66 (347)$ (109)$ (111)$ (364)$ (116)$ Pre-tax Adjustments: Pending claims and settlements (2) (2) - - - Pension settlement expense - - - 7 7 Certain tax impacts - - - (5) - Tax impact of adjustments 1 1 - (2) (3) Adjusted Net Income (Loss) Attributable to Phillips 66 (348)$ (110)$ (111)$ (364)$ (112)$ Millions of Dollars Except as Indicated 2016 2015
  • 31.
    31 NON-GAAP RECONCILIATIONS Sep YTD3Q 2Q Sep YTD 3Q Midstream - Transportation Net Income (Loss) Attributable to Phillips 66 200$ 63$ 65$ 207$ 77$ Pre-tax Adjustments: Tax impact of adjustments - - - - - Adjusted Net Income (Loss) Attributable to Phillips 66 200$ 63$ 65$ 207$ 77$ Midstream - NGL Net Income (Loss) Attributable to Phillips 66 (25)$ 3$ (17)$ 48$ 26$ Pre-tax Adjustments: Pension settlement expense - - - 9 9 Tax impact of adjustments - - - (3) (3) Adjusted Net Income (Loss) Attributable to Phillips 66 (25)$ 3$ (17)$ 54$ 32$ Midstream - DCP Midstream Net Income (Loss) Attributable to Phillips 66 4$ 9$ (9)$ (165)$ (2)$ Pre-tax Adjustments: Impairments by equity affiliates 6 - - 198 4 Pending claims and settlements (45) - - - - Asset dispositions - - - (30) (30) Tax impact of adjustments 14 - - (58) 10 Adjusted Net Income (Loss) Attributable to Phillips 66 (21)$ 9$ (9)$ (55)$ (18)$ Millions of Dollars Except as Indicated 2016 2015
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    32 NON-GAAP RECONCILIATIONS Sep YTD3Q 2Q Sep YTD 3Q Refining - Atlantic Basin / Europe Net Income (Loss) Attributable to Phillips 66 41$ 5$ 32$ 383$ 180$ Pre-tax Adjustments: Pension settlement expense - - - 13 13 Pending claims and settlements - - - 8 8 Recognition of deferred logistics commitments 30 - 30 - - Tax impact of adjustments (27) - (27) (46) (8) Adjusted Net Income (Loss) Attributable to Phillips 66 44$ 5$ 35$ 358$ 193$ Refining - Gulf Coast Net Income (Loss) Attributable to Phillips 66 103$ 30$ 5$ 423$ 269$ Pre-tax Adjustments: Pension settlement expense - - - 16 16 Pending claims and settlements (70) (70) - 10 10 Tax impact of adjustments 27 27 - (10) (10) Adjusted Net Income (Loss) Attributable to Phillips 66 60$ (13)$ 5$ 439$ 285$ Millions of Dollars Except as Indicated 2016 2015
  • 33.
    33 NON-GAAP RECONCILIATIONS Sep YTD3Q 2Q Sep YTD 3Q Refining - Central Corridor Net Income (Loss) Attributable to Phillips 66 217$ 142$ 55$ 771$ 360$ Pre-tax Adjustments: Pension settlement expense - - - 11 11 Pending claims and settlements - - - 7 7 Tax impact of adjustments - - - (6) (6) Adjusted Net Income (Loss) Attributable to Phillips 66 217$ 142$ 55$ 783$ 372$ Refining - West Coast Net Income (Loss) Attributable to Phillips 66 51$ -$ 57$ 568$ 194$ Pre-tax Adjustments: Asset dispositions - - - (8) - Pension settlement expense - - - 9 9 Pending claims and settlements - - - 5 5 Tax impact of adjustments - - - (3) (6) Adjusted Net Income (Loss) Attributable to Phillips 66 51$ -$ 57$ 571$ 202$ Millions of Dollars Except as Indicated 2016 2015
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    34 NON-GAAP RECONCILIATIONS Sep YTD3Q 2Q Sep YTD 3Q Marketing & Specialties - Marketing & Other Net Income (Loss) Attributable to Phillips 66 589$ 228$ 199$ 805$ 285$ Pre-tax Adjustments: Asset dispositions - - - (242) - Pension settlement expense - - - 10 10 Tax impact of adjustments - - - (4) (4) Adjusted Net Income (Loss) Attributable to Phillips 66 589$ 228$ 199$ 569$ 291$ Marketing & Specialties - Specialties Net Income (Loss) Attributable to Phillips 66 112$ 39$ 30$ 151$ 53$ Pre-tax Adjustments: Tax impact of adjustments - - - - - Adjusted Net Income (Loss) Attributable to Phillips 66 112$ 39$ 30$ 151$ 53$ Millions of Dollars Except as Indicated 20152016
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    35 * Total equityplus total debt NON-GAAP RECONCILIATIONS 2016 September YTD Phillips 66 Numerator ($MM) Net Income 1,450$ After-tax interest expense 162$ GAAP ROCE earnings 1,612$ Special Items 23$ Adjusted ROCE earnings 1,635$ Denominator ($MM) GAAP average capital employed * 32,997$ 2016 Annualized Adjusted ROCE 7% 2016 Annualized GAAP ROCE 7%
  • 36.
    36 NON-GAAP RECONCILIATIONS Phillips 66 Consolidated Phillips66 Partners * Adjusted Phillips 66 Total Debt 8,858$ 1,141$ 7,717$ Total Equity 24,311$ 1,373$ 22,938$ Debt-to-Capital Ratio 27% 25% Total Cash 2,337$ 19$ 2,318$ Net-Debt-to-Capital Ratio 21% 19% Millions of Dollars 2016 3Q * PSXP's third-party debt and Phillips 66's noncontrolling interest attributable to PSXP
  • 37.
    37 NON-GAAP RECONCILIATIONS Growth SustainingTotal Growth Sustaining Total Capital expenditures and investments Midstream 269$ 46$ 315$ 920$ 125$ 1,045$ Refining 83$ 206$ 289$ 252$ 575$ 827$ Marketing & Specialties 12$ 14$ 26$ 34$ 29$ 63$ Corporate and Other 1$ 30$ 31$ 3$ 93$ 96$ Total 365$ 296$ 661$ 1,209$ 822$ 2,031$ Millions of Dollars 2016 September YTD Millions of Dollars 2016 3Q
  • 38.
    38 NON-GAAP RECONCILIATIONS Millions ofDollars 2016 3Q Effective Tax Rates Income before taxes 813$ Special items 17$ Adjusted income before taxes 830$ Provision for taxes 277$ Special items (28)$ Adjusted provision for taxes 249$ GAAP effective tax rate 34% Adjusted effective tax rate 30%