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Phillips 66 Reports Third-Quarter Earnings Of $1.6 Billion Or $2.51 Per Share

Later today, Phillips 66 Executive Vice President and Chief Financial Officer Greg G. Maxwell and Executive Vice President, Commercial, Marketing, Transportation and Business Development, Tim G. Taylor will host a webcast at 11 a.m. EDT to discuss the company’s third-quarter performance and provide an update on strategic initiatives. To listen to the conference call and view related presentation materials, go to www.phillips66.com/investors and click on “Presentations and Conference Calls.” For detailed supplemental information, go to http://www.phillips66.com/EN/investor/financial_reports/earnings_reports/Pages/index.aspx .

Phillips 66 will hold its first Analyst Meeting on Dec. 13, 2012 in New York. Representatives from company management will discuss Phillips 66’s strategic plans for growth and value creation. The presentation will be available via live webcast on Phillips 66’s Investors site.

 
 

Earnings

         
Millions of Dollars
Third Quarter Nine Months
 

2012

      2011     2012       2011  
Refining and Marketing (R&M)
Refining

$

1,580

$

533

$

2,839

$

1,469
Marketing, Specialties and Other       68       252     393       578  
Total R&M 1,648 785 3,232 2,047
Midstream (77 ) 118 (79 ) 290
Chemicals 153 193 577 568
Corporate and Other       (125 )     (47 )   (314 )     (141 )
Phillips 66     $ 1,599     $ 1,049   $ 3,416     $ 2,764  
 

Adjusted Earnings

Millions of Dollars
Third Quarter Nine Months
  2012       2011     2012       2011  
Refining and Marketing (R&M)
Refining

$

1,580

$

1,012

$

2,869

$

1,948
Marketing, Specialties and Other       95       249     519       547  
Total R&M 1,675 1,261 3,388 2,495
Midstream 56 118 224 290
Chemicals 275 193 734 568
Corporate and Other       (112 )     (47 )   (271 )     (141 )
Phillips 66     $ 1,894     $ 1,525   $ 4,075     $ 3,212  
 

About Phillips 66

Headquartered in Houston, Phillips 66 is an advantaged downstream energy company with segment-leading Refining and Marketing (R&M), Midstream and Chemicals businesses. The company has approximately 14,000 employees worldwide. Phillips 66’s R&M operations include 15 refineries with a net crude oil capacity of 2.2 million barrels per day, 10,000 branded marketing outlets, and 15,000 miles of pipeline systems. In Midstream, the company primarily conducts operations through its 50 percent interest in DCP Midstream, LLC, one of the largest natural gas gatherers and processors in the United States, with 7.2 billion cubic feet per day of gross natural gas processing capacity. Phillips 66’s Chemicals business is conducted through its 50 percent interest in Chevron Phillips Chemical Company LLC, one of the world’s top producers of olefins and polyolefins with more than 30 billion pounds of net annual chemicals processing capacity across its product lines. For more information, visit www.phillips66.com or follow us on Twitter @Phillips66Co .

CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This news release 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 news release 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.

Use of Non-GAAP Financial Information -- This press release includes the terms adjusted earnings, adjusted earnings per share, and net-debt-to-capital ratio. These are non-GAAP financial measures. Adjusted earnings and adjusted earnings per share are included to help facilitate comparisons of company operating performance across periods. The net-debt-to-capital ratio reduces debt and capital by the amount of cash and cash equivalents shown on the balance sheet for the reflected period, and is presented to reflect the net results if the company elected to utilize its cash balances to reduce debt in the future.

References in the release to earnings refer to net income attributable to Phillips 66.

         
Reconciliation of Earnings to Adjusted Earnings
 
Millions of Dollars
Except as Indicated
2012   2011  
3Q Sep YTD 3Q Sep YTD
Consolidated
Earnings (loss) $ 1,599 $ 3,416 $ 1,049 $ 2,764
Adjustments:
Net (gain) loss on asset sales (106 ) 143 115
Impairments 187 399 318 318
Severance accruals 15 15
Pending claims and settlements 57
Premium on early debt retirement 54 89
Repositioning costs 13 43
Repositioning tax impacts       41       177        
Adjusted earnings     $ 1,894     $ 4,075   $ 1,525     $ 3,212  
 
Earnings per share of common stock (dollars) $ 2.51 $ 5.37 $ 1.65 $ 4.36
 
Adjusted earnings per share of common stock (dollars)     $ 2.97     $ 6.40   $ 2.40     $ 5.06  
 
R&M
Earnings (loss) $ 1,648 $ 3,232 $ 785 $ 2,047
Adjustments:
Net (gain) loss on asset sales (106 ) 143 115
Impairments 27 69 318 318
Severance accruals 15 15
Pending claims and settlements 57
Repositioning tax impacts           136        
Adjusted earnings     $ 1,675     $ 3,388   $ 1,261     $ 2,495  
 
Refining
Earnings (loss) $ 1,580 $ 2,839 $ 533 $ 1,469
Adjustments:
Net (gain) loss on asset sales (104 ) 146 146
Impairments 42 318 318
Severance accruals 15 15
Pending claims and settlements 19
Repositioning tax impacts           73        
Adjusted earnings     $ 1,580     $ 2,869   $ 1,012     $ 1,948  
 
Marketing, Specialties and Other
Earnings (loss) $ 68 $ 393 $ 252 $ 578
Adjustments:
Net (gain) loss on asset sales (2 ) (3 ) (31 )
Impairments 27 27
Pending claims and settlements 38
Repositioning tax impacts           63        
Adjusted earnings     $ 95     $ 519   $ 249     $ 547  
 
Midstream
Earnings (loss) $ (77 ) $ (79 ) $ 118 $ 290
Adjustments:
Impairments       133       303        
Adjusted earnings     $ 56     $ 224   $ 118     $ 290  
 
Chemicals
Earnings (loss) $ 153 $ 577 $ 193 $ 568
Adjustments:
Impairments $ 27 $ 27
Premium on early debt retirement 54 89
Repositioning tax impacts       41       41        
Adjusted earnings     $ 275     $ 734   $ 193     $ 568  
 
Corporate and Other
Earnings (loss) $ (125 ) $ (314 ) $ (47 ) $ (141 )
Adjustments:
Repositioning costs       13       43        
Adjusted earnings     $ (112 )   $ (271 ) $ (47 )   $ (141 )
 




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