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BAML 2015 REFINING CONFERENCE – Phillips 66

Phillips 66 · Mar 5, 2015 · 42 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 1
    Execution Clayton Reasor, EVP Investor Relations, Strategy, Corporate and Government Affairs Bank of America Merrill Lynch 2015 Refining Conference March 5, 2015
  2. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 2
    2014 Accomplishments Growth Returns Distributions 4.0 B growth capital program 1.6 B sustaining capital program Returned 4.7 B to shareholders Advanced 100 MBD NGL fractionator Reliable operations enhance returns Paid 1.1 B in…
  3. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 3
    Operating Excellence Total Recordable Rates Refining Environmental Metrics Incidents per 200,000 Hours Worked Industry Average 08 10 12 14 880 450 430 300 Phillips 66 CPChem DCP 2008 2010 2012 2014 Operating Costs and SG&A…
  4. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 4
    Energy Landscape Historical and Forward Crude Oil Prices /bbl Supply outpacing demand WTI 120 BRENT Weaker global demand growth 90 60 E&P production forecasts uncertain 30 U.S. infrastructure growth slowing 0 2009 2011…
  5. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 5
    A Diversified Downstream Company Marketing and Midstream Chemicals Refining Specialties G&P, pipelines, CPChem, primarily Olefins & Operate in all five U.S. U.S. Marketing, fractionation, storage and Polyolefins in North America…
  6. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 6
    Midstream NGL 2014 EBITDA 2018E EBITDA NGL fractionation capacity growing to 200 MBD Fractionator One start up 3Q 2015 LPG export facility start up 4Q 2016 Sand Hills/Southern Hills expansion Transportation Beaumont crude/products…
  7. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 7
    PSXP 1Q 2015 Acquisition Drop down assets 33.3% interest in Sand Hills NGL pipeline 33.3% interest in Southern Hills NGL pipeline 19.5% interest in Explorer refined products pipeline Public equity issuance of 456 MM 200 MM…
  8. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 8
    Strong PSXP Growth MM Focused on top-tier distribution growth Public LP 1,100 PSX LP 5-year 30% LP distribution per unit CAGR from 4Q 2013 PSX GP Provides significant growth in total distributions 800 230 MM organic growth…
  9. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 9
    PSX Value Uplift 2018E PSXP Value to PSX 15-20 B Growing GP key value lever PSX LP PSX GP 5-7 B Fee-based business model 25-35/share Growing cash flows 545 MM 10-13 B Incentivized to grow value at PSXP Distributions…
  10. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 10
    DCP Midstream Historical Commodity Prices /bbl One of the largest G&P, NGL producers 120 and NGL pipeline operators in North America 100 80 Reduce capital and costs, as well as increase capital efficiency 60 Focus on maintaining…
  11. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 11
    Chemicals Environment N.A. HDPE Chain Cash Margin v. Brent /bbl cpp 150 50 Ethane remains preferred feedstock N.A. Spot HDPE Chain Cash Margin (cpp) Brent (/bbl) Naphtha disadvantage narrows with 120 40 low oil prices 90 30…
  12. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 12
    CPChem 50/50 joint venture with Chevron Corp. Phillips 66 Chemicals ROCE 35% Industry-leading returns 30% Geographically advantaged 10.5 B Lb/yr worldwide ethylene capacity 25% Strong global aromatics position 20% 23% increase in…
  13. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 13
    Refining Improving Returns Increasing shale crude runs at Alliance Refinery Adding access to Canadian and inland crudes on the West Coast Central Corridor 492 MBD Atlantic Basin/Europe Accessing North Dakota crude West Coast 588…
  14. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 14
    Marketing and Specialties Adjusted EBITDA High-returning businesses 1.5 B U.S. Marketing Avg. 1.2 B Wholesale network 1.0 8,600 branded sites International Marketing Low cost, high volume business 0.5 1,520 sites Specialties…
  15. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 15
    Capital Budget Estimated 2015 4.6 B 3.4 B Growth capital Sweeny Fractionator One LPG Export Terminal Bakken to Patoka/Beaumont pipelines Beaumont Terminal expansion 1.2 B Sustaining capital PSX Sustaining Refining Returns…
  16. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 16
    EBITDA Growth Adjusted EBITDA B Greater than 30% increase in EBITDA 8.4 Cash flows less volatile by 2018E 6.4 2018E portfolio shift to higher-value businesses 20% Midstream 25% Chemicals 40% Refining 2009-2014 Avg. 2018E 15%…
  17. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 17
    Distributions Share Count and Capital Returned Dividend Growth Quarterly /share 6.2 B 624 MM 50 590 MM 546 MM 20 4Q 4Q 4Q 3Q 1Q 2012 2013 2014 2012 2015 2 B remaining authorized share repurchases 150% dividend growth…
  18. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 18
    Compelling Investment Enterprise Value Diversified business lines Growing Midstream and Chemicals Commitment to distributions Strong balance sheet Expected multiple expansion 2014 2018E Midstream PSXP Chemicals M&S Refining 19
  19. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 19
    Appendix Institutional Investors Contact Kevin Mitchell InvestorRelationsp66.com Vice President, Investor Relations 832-765-2297 Rosy Zuklic Manager, Investor Relations
  20. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 20
    Disciplined Capital Allocation 2014E 2016E Investment Sustain operations Fund Midstream and Chemicals growth Generate competitive returns Distributions Distributions Reinvestment Dividend growth Repurchase shares Capital…
  21. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 21
    2013 2014 Cash Sources and Uses Sources Uses Cash Build/ Other Debt Asset Sales 13.5 B Capex/ CFO Distributions Investments Debt Cash From Operations Capex & Investments Distributions 1.5 B 9.6 B 5.6 B 6.8 B…
  22. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 22
    Free Cash Flow Midstream Chemicals B B 0.2 0.3 0.8 0.9 0.7 0.5 CFO (excl. WC) Sustaining Capex Free Cash Flow CFO (excl. WC) Sustaining Capex Free Cash Flow Refining Marketing & Specialties B B 0.9 0.1 2.5 0.7 0.6…
  23. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 23
    2014 Adjusted ROCE 40% M&S 30% Chemicals 32% 20% 27% P66 Total Midstream Refining 14% 10% 13% 12% Corporate 0% -5% -10% 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 Average Capital Employed (B) 24
  24. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 24
    2014 Adjusted CROCE 40% M&S 30% Chemicals 36% Refining P66 Total 20% 27% Midstream 17% 10% 17% 15% Corporate 0% -2% -10% 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 Average Capital Employed (B) CROCE defined as Adjusted…
  25. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 25
    Capital Structure 28% 25% 20- 30% 22% 22% 22% 22% 22.4 21.8 22.0 22.2 22.0 20.8 8.7 7.0 6.2 5.4 6.2 5.3 6.2 6.2 5.0 5.2 3.5 3.1 2012 2013 1Q 2014 2Q 2014 3Q 2014 4Q 2014 Equity B Debt B Cash & Cash Equivalents B Debt…
  26. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 26
    Adjusted EBITDA B 10 8 Avg. 6.4 B 6 4 2 0 2009 2010 2011 2012 2013 2014 2018E -2 Refining Midstream Chemicals M&S Corporate Average is 2009 through 2014. 27
  27. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 27
    Chemicals CPChem Adjusted EBITDA B 4.2 3.4 3.4 2.5 1.9 1.1 2009 2010 2011 2012 2013 2014 Reflects 100% CPChem. 28
  28. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 28
    DCP Midstream Adjusted EBITDA B 1.4 1.2 1.0 0.9 1.0 0.8 2009 2010 2011 2012 2013 2014 Reflects 100% DCP Midstream. 29
  29. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 29
    Phillips 66 Partners Asset Base Sand Hills, Southern Hills and Explorer pipelines targeted closing early March 2015. 30
  30. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 30
    2015 Sensitivities Net Income Midstream MM 10/Gal Increase in NGL price 35 1/MMBtu Increase in Natural Gas price 30 10/BBL Increase in WTI price 15 Chemicals 1/Lb Increase in Chain Margin (Ethylene, Polyethylene, NAO) 35…
  31. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 31
    Capital Program Millions of Dollars 2015 Budget Sustaining Growth Total Capital Expenditures and Investments Consolidated Midstream(1) Transportation 148 1,084 1,232 NGL 19 1,912 1,931 167 2,996 3,163 Chemicals - - - Refining(2)…
  32. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 32
    Non-GAAP Reconciliations Millions of Dollars Year ending February 29 2016 Reconciliation of PSXP Estimated EBITDA to Estimated Net Income* Estimated net income 82 Plus: Depreciation 20 Interest expense 4 Income taxes 9 Estimated…
  33. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 33
    Non-GAAP Reconciliations Millions of Dollars 2009 2010 2011 2012 2013 2014 Chemicals Segment ROCE Numerator Net Income 228 486 716 823 987 1,137 After-tax interest expense - - - - - - GAAP ROCE earnings 228 486 716 823 987 1,137…
  34. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 34
    Non-GAAP Reconciliations Millions of Dollars Millions of Dollars 2009-2014 2009-2014 Marketing & Specialties Adjusted EBITDA Reconciliation 2009 2010 2011 2012 2013 2014 Average Marketing & Specialties Adjusted EBITDA Reconciliation…
  35. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 35
    Non-GAAP Reconciliations Millions of Dollars 2009-2014 Adjusted EBITDA by Segment Reconciliation 2009 2010 2011 2012 2013 2014 Average Midstream Midstream net income attributable to Phillips 66 384 384 2,147 52 469 507 657 Plus: Net…
  36. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 36
    Non-GAAP Reconciliations Millions of Dollars 2009-2014 Adjusted EBITDA by Segment Reconciliation 2009 2010 2011 2012 2013 2014 Average Refining Refining net income (loss) attributable to Phillips 66 (556) (661) 1,369 3,091 1,747 1,771…
  37. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 37
    Non-GAAP Reconciliations Millions of Dollars 2009-2014 Adjusted EBITDA by Segment Reconciliation 2009 2010 2011 2012 2013 2014 Average Marketing and Specialties Marketing and Specialties net income attributable to Phillips 66 541 655…
  38. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 38
    Non-GAAP Reconciliations Millions of Dollars 2009-2014 Adjusted EBITDA by Segment Reconciliation 2009 2010 2011 2012 2013 2014 Average Phillips 66 Phillips 66 net income attributable to Phillips 66 476 735 4,775 4,124 3,726 4,762 3,100…
  39. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 39
    Non-GAAP Reconciliations Millions of Dollars 2014 Millions of Dollars Net Debt-to-Capital Ratio Low High Short-term debt 842 100% CPChem Incremental Project Earnings Projections Long-term debt 7,842 Estimated incremental net income…
  40. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 40
    Non-GAAP Reconciliations Millions of Dollars Marketing & Phillips 66 Midstream Chemicals Refining Specialties Corporate ROCE 2014 Numerator Net Income 4,797 541 1,137 1,771 1,034 (393) After-tax interest expense 173 - - - - 173…
  41. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 41
    Non-GAAP Reconciliations Millions of Dollars Average 2009-2014 Marketing & Midstream Chemicals Refining Specialties FCF Yield Numerator Cash From Operations GAAP 559 230 2,615 563 Less: Change in Non-Cash Working Cap. (13) (0) 152…
  42. BAML 2015 REFINING CONFERENCE – Phillips 66 – slide 42
    Non-GAAP Reconciliations Millions of Dollars 2009 2010 2011 2012 2013 2014 100% CPChem Net Income 615 1,388 1,970 2,403 2,743 3,288 Plus: Income taxes 26 42 57 67 71 86 Net interest expense 58 63 18 8 (3) (2) Depreciation and…

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