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BARCLAYS CONFERENCE – Phillips 66

Phillips 66 · Sep 12, 2013 · 47 slides

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Slides

  1. BARCLAYS CONFERENCE – Phillips 66 – slide 1
    PHILLIPS 66 BARCLAYS CONFERENCE Greg Garland, Chairman and CEO September 12, 2013
  2. BARCLAYS CONFERENCE – Phillips 66 – slide 2
    STRATEGY Operating excellence Growth Returns Distributions High-performing organization 3
  3. BARCLAYS CONFERENCE – Phillips 66 – slide 3
    OPERATING EXCELLENCE Total Recordable Rates U.S. Refining Emissions (Lb/MBbl) (Incidents per 200,000 Hours Worked) (SOx, NOx, and Particulate Matter) 250 2.5 200 2 150 1.5 2013 1H 2009 2012 2011 2010 1 100 0.5 50…
  4. BARCLAYS CONFERENCE – Phillips 66 – slide 4
    SEGMENT STRATEGY Midstream: Growth Chemicals: Growth Build on integrated Transportation system Grow CPChem organically Utilize Phillips 66 Partners LP as a growth vehicle Advance olefins and polyolefins projects Expand DCP Capitalize…
  5. BARCLAYS CONFERENCE – Phillips 66 – slide 5
    GROWING HIGHER VALUED BUSINESSES Adjusted Earnings Long-Term 2009 2013 1H Marketing & Marketing & Midstream Specialties Specialties Midstream Chemicals Refining Refining Chemicals See appendix for footnotes. 6
  6. BARCLAYS CONFERENCE – Phillips 66 – slide 6
    HIGH-PERFORMING BUSINESSES Midstream Chemicals Refining and M&S ROCE ROCE ROCE PSX 25% PSX 21% PSX 11% LYB 24% MPC 18% OKE 8% WLK 20% CVX 11% EPD 7% XOM Chem 18% VLO 9% KMP 6% DOW 10% TSO 6% 2013 1H ROCE shown See…
  7. BARCLAYS CONFERENCE – Phillips 66 – slide 7
    MIDSTREAM MACRO ENVIRONMENT U.S. Growth Mont Belvieu NGL Price 32 (MMBD) (% WTI) 0.85 Consulant Range History 24 6 % CAGR 6 % CAGR 0.75 16 NGL 0.65 Crude Oil 2 % CAGR 0.55 8 Natural Gas 0.45 0 0.35 2000 2005 2010 2015 2020…
  8. BARCLAYS CONFERENCE – Phillips 66 – slide 8
    CHEMICALS MACRO ENVIRONMENT U.S. Ethane Supply/Demand Balance 2013 Ethylene Production Cost Curve (MBD) (/ton) 3,000 1,500 Supply Range Ethane Exports Western Petchem Demand Europe 2,000 1,000 NE Asia SE Asia U.S. 1,000 500…
  9. BARCLAYS CONFERENCE – Phillips 66 – slide 9
    REFINING MACRO ENVIRONMENT WTI - LLS LLS - Brent Maya - LLS (Nominal /bbl) (Nominal /bbl) (Nominal /bbl) 5 5 5 0 0 0 2009 2013 avg: -11.26/bbl -5 -5 2009 2013 avg: -5 1.76/bbl 2009 2013 avg: -10 -10.43/bbl -10 -10 -15 -15…
  10. BARCLAYS CONFERENCE – Phillips 66 – slide 10
    REFINING MACRO ENVIRONMENT North America Crude Import Supply Curve (Vs. Dated Brent /bbl) Light Sweet 4 N.A. sweet crude production displaces sweet imports 2 0 Additional sweet crude Light Sour production displaces light sour…
  11. BARCLAYS CONFERENCE – Phillips 66 – slide 11
    MIDSTREAM GROWTH Build on integrated Transportation system Utilize Phillips 66 Partners LP as a growth vehicle Expand DCP Grow NGL Operations MLP. Pecan Grove Crude Terminal, Carlyss, LA. 12
  12. BARCLAYS CONFERENCE – Phillips 66 – slide 12
    TRANSPORTATION Crude rail cars Jones Act ships Unit train crude unloading facility projects Clean products export facility projects Terminal butane blending Re-commission idle pipelines New refinery storage Jones Act tanker…
  13. BARCLAYS CONFERENCE – Phillips 66 – slide 13
    PHILLIPS 66 PARTNERS LP Strategic relationship with PSX Stable and predictable cash flows Significant growth potential Low cost capital source Financial flexibility 14
  14. BARCLAYS CONFERENCE – Phillips 66 – slide 14
    DCP MIDSTREAM Gathering and Processing 2015+ NGL Pipelines Goliad Gas Plant Sand Hills 200 MMCFD 720 miles, 200 -- 350 MBD Granite Wash Gathering System Expansion Southern Hills 140 MMCFD 800 miles, 175 MBD National Helium Gas…
  15. BARCLAYS CONFERENCE – Phillips 66 – slide 15
    NGL OPERATIONS Sand Hills and Southern Hills startup Butane and butylene storage hub Sweeny fractionator and pipelines Freeport export terminal and de-ethanizer Clemens salt dome storage Sand Hills Pipeline. Metering…
  16. BARCLAYS CONFERENCE – Phillips 66 – slide 16
    MIDSTREAM GROWTH 2012 2013 2014 2015 2016 2017+ Capital Program (B) G&P in Execution 2.0 DCP G&P Expansions 1.5 New pipelines 1.0 Sand Hills and Southern Hills pipelines NGL Ops and Transportation Rail Cars 0.5…
  17. BARCLAYS CONFERENCE – Phillips 66 – slide 17
    CHEMICALS GROWTH Grow CPChem organically Advance olefins and polyolefins projects Capitalize on domestic feedstock advantage 18
  18. BARCLAYS CONFERENCE – Phillips 66 – slide 18
    CHEMICALS FEEDSTOCK ADVANTAGE Worldwide Ethylene Capacity Portfolio concentrated in 25 (Billion Lbs) advantaged feedstock regions Other 20 U.S. 100% light feedstock based M.E. region N.A. light feedstock 15 Leading Middle East…
  19. BARCLAYS CONFERENCE – Phillips 66 – slide 19
    CHEMICALS ADVANCING OLEFINS AND POLYOLEFINS PROJECTS 1-Hexene Unit Capacity increase 30% from 2012 2017 Sweeny Ethylene Furnace Estimated project spending 6.5 -- 7.0 B NAO Expansion Additional EBITDA US Gulf Coast 1.3 -- 1.6 B…
  20. BARCLAYS CONFERENCE – Phillips 66 – slide 20
    CHEMICALS EXECUTING GROWTH 2012 2013 2014 2015 2016 2017+ Capital Program Sweeny Frac (B) Expansion 0.6 22 MBD 1-Hexene Unit 250 kMTA 0.4 Sweeny Ethylene Furnace 90 kMTA 0.2 USGC Petrochemicals 1,500 kMTA (ethylene),…
  21. BARCLAYS CONFERENCE – Phillips 66 – slide 21
    REFINING ENHANCE RETURNS Process more advantaged crudes Expand export capability Increase yields Decrease costs Optimize portfolio San Francisco Refinery, Rodeo Facility. San Francisco, California. 22
  22. BARCLAYS CONFERENCE – Phillips 66 – slide 22
    REFINING DIVERSIFIED PORTFOLIO Western / Pacific 440 MBD Central Region 475 MBD Gulf Coast 733 MBD Atlantic Basin / Europe 588 MBD FD Ireland BI HU WG BW United SF Kingdom WR LA PC Germany BG MI Malaysia LC AL SW…
  23. BARCLAYS CONFERENCE – Phillips 66 – slide 23
    REFINING ADVANTAGED CRUDE U.S. Refining (MBD) Brent LLS/ANS Heavy Canadian WTI/WTS Current 3+ Years See appendix for footnotes. 24
  24. BARCLAYS CONFERENCE – Phillips 66 – slide 24
    REFINING ENHANCE RETURNS Domestic Exports (MBD) 500 Increase product placement optionality West 320 Capture global demand growth 285 West West Gulf 180 Maintain high utilization rates Gulf Gulf 100 Distillate Distillate East…
  25. BARCLAYS CONFERENCE – Phillips 66 – slide 25
    REFINING ENHANCE RETURNS ROCE Capital Program (%) (B) 2.0 30% 20% 1.0 10% 0% 0.0 2010 2011 2012 2013 1H 2010 2011 2012 2013E Refining WRB See appendix for footnotes. 26
  26. BARCLAYS CONFERENCE – Phillips 66 – slide 26
    MARKETING AND SPECIALTIES SELECTIVE GROWTH Expand European Retail Marketing Grow Lubricants Ensure refinery pull-through Berlin, Germany 27
  27. BARCLAYS CONFERENCE – Phillips 66 – slide 27
    FINANCIAL SUMMARY Adjusted EBITDA and ROCE (B) 22% Disciplined capital allocation Midstream Chemicals 9.1 17% Marketing & Specialties 14% Refining Enhanced financial flexibility Corporate 6.5 ROCE 7% Growing shareholder…
  28. BARCLAYS CONFERENCE – Phillips 66 – slide 28
    CAPITAL STRUCTURE 30% 28% 25% 25% 23% 20% - 30% 20.6 20.8 21.4 21.7 19.0 8.0 8.0 7.0 7.0 6.5 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013 Equity B Debt B Debt to Capital 29
  29. BARCLAYS CONFERENCE – Phillips 66 – slide 29
    2013 TOTAL CAPITAL PROGRAM B 4 PSX 3 CPChem DCP 2 CPChem DCP 1 WRB 0 PSX Maintenance JV Maintenance Growth Total See appendix for footnotes. 30
  30. BARCLAYS CONFERENCE – Phillips 66 – slide 30
    SHAREHOLDER DISTRIBUTIONS Distributions Regular dividends (B) 2.0 Secure Growing Dividends Competitive Share 1.0 Repurchases Share repurchase Immediate EPS growth Below intrinsic value 0.0 Accretive to ROCE 3Q 12 4Q 12…
  31. BARCLAYS CONFERENCE – Phillips 66 – slide 31
    A PROMISING FUTURE Operating excellence Growth Returns Distributions High-performing organization 32
  32. BARCLAYS CONFERENCE – Phillips 66 – slide 32
    Humber Refinery. North Lincolnshire, United Kingdom. INSTITUTIONAL INVESTORS CONTACT Rosy Zuklic Manager, Investor Relations Rosy.Zuklicp66.com 832-765-2297
  33. BARCLAYS CONFERENCE – Phillips 66 – slide 33
    2013 SENSITIVITIES 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 Olefins Chain Margin (Ethylene, Polyethylene, NAO) 35…
  34. BARCLAYS CONFERENCE – Phillips 66 – slide 34
    NON-GAAP RECONCILIATIONS ADJUSTED EARNINGS SLIDE 6 Millions of Dollars 2013 2012 2011 2010 2009 1H Year Year Year Year Midstream Earnings (loss) 200 53 2,149 386 386 Adjustments: Net (gain) loss on asset sales - - (1,618) - (19)…
  35. BARCLAYS CONFERENCE – Phillips 66 – slide 35
    NON-GAAP RECONCILIATIONS ADJUSTED EARNINGS SLIDE 6 Millions of Dollars 2013 2012 2011 2010 2009 1H Year Year Year Year Refining Earnings (loss) 1,403 3,217 1,529 (545) (536) Adjustments: Net (gain) loss on asset sales - (104) 96 -…
  36. BARCLAYS CONFERENCE – Phillips 66 – slide 36
    NON-GAAP RECONCILIATIONS ROCE 2013 1H SLIDE 7 Refining and 2013 1H Midstream Chemicals M&S Numerator (MM) Net Income 205 463 1,923 After-tax interest expense - - - GAAP ROCE earnings 205 463 1,923 Special Items (27) - (22)…
  37. BARCLAYS CONFERENCE – Phillips 66 – slide 37
    NON-GAAP RECONCILIATIONS CPCHEM EBITDA SLIDE 20 Incremental Project Earnings Projections EBITDA Reconciliation to Net Income - MM Estimated incremental net income (CPChem View) Low High Estimated incremental net income 1,000 1,313…
  38. BARCLAYS CONFERENCE – Phillips 66 – slide 38
    NON-GAAP RECONCILIATIONS REFINING ROCE SLIDE 26 Millions of Dollars Except as Indicated 2013 2012 2011 2010 1H Year Year Year Refining - ROCE Numerator Net Income 1,403 3,217 1,529 (545) After-tax interest expense - - - - GAAP…
  39. BARCLAYS CONFERENCE – Phillips 66 – slide 39
    NON-GAAP RECONCILIATIONS ROCE SLIDE 28 Millions of Dollars Except as Indicated 2013 2012 2011 2010 2009 1H Year Year Year Year Phillips 66 - ROCE Numerator Net Income 2,370 4,131 4,780 740 479 After-tax interest expense 90 160 11…
  40. BARCLAYS CONFERENCE – Phillips 66 – slide 40
    NON-GAAP RECONCILIATIONS ADJUSTED EBITDA SLIDE 28 Millions of Dollars 2013 2012 2011 2010 2009 1H Year Year Year Year Phillips 66 Net Income 2,370 4,131 4,780 740 479 Income taxes 1,185 2,500 1,844 579 368 Net interest expense…
  41. BARCLAYS CONFERENCE – Phillips 66 – slide 41
    NON-GAAP RECONCILIATIONS ADJUSTED EBITDA SLIDE 28 Millions of Dollars 2013 2012 2011 2010 2009 1H Year Year Year Year Midstream Net Income 205 60 2,154 391 389 Income taxes 112 29 454 186 205 Net interest expense - - - - -…
  42. BARCLAYS CONFERENCE – Phillips 66 – slide 42
    NON-GAAP RECONCILIATIONS ADJUSTED EBITDA SLIDE 28 Millions of Dollars 2013 2012 2011 2010 2009 1H Year Year Year Year Chemicals Net Income 463 823 716 486 228 Income taxes 172 366 252 194 67 Net interest expense - - - - -…
  43. BARCLAYS CONFERENCE – Phillips 66 – slide 43
    NON-GAAP RECONCILIATIONS ADJUSTED EBITDA SLIDE 28 Millions of Dollars 2013 2012 2011 2010 2009 1H Year Year Year Year Refining Net Income 1,403 3,217 1,529 (545) (536) Income taxes 771 2,067 902 (56) (286) Net interest expense -…
  44. BARCLAYS CONFERENCE – Phillips 66 – slide 44
    NON-GAAP RECONCILIATIONS ADJUSTED EBITDA SLIDE 28 Millions of Dollars 2013 2012 2011 2010 2009 1H Year Year Year Year Marketing & Specialities Net Income 520 465 573 567 538 Income taxes 270 277 333 348 457 Net interest expense -…
  45. BARCLAYS CONFERENCE – Phillips 66 – slide 45
    NON-GAAP RECONCILIATIONS ADJUSTED EBITDA SLIDE 28 Millions of Dollars 2013 2012 2011 2010 2009 1H Year Year Year Year Corporate Net Income (221) (434) (192) (159) (140) Income taxes (140) (239) (97) (93) (75) Net interest expense…
  46. BARCLAYS CONFERENCE – Phillips 66 – slide 46
    NON-GAAP RECONCILIATIONS SWEENY FRAC AND EXPORT EBITDA (TRANSCRIPT) Millions of Dollars First Year Sweeny Fractionator & Export Facility Estimated net income 190 Estimated income taxes 118 Estimated net interest expense 5…
  47. BARCLAYS CONFERENCE – Phillips 66 – slide 47
    NON-GAAP RECONCILIATIONS CPCHEM EBITDA (TRANSCRIPT) Millions of Dollars 2012 Year CPChem Net Income 2,403 Income taxes 67 Net interest expense 9 Depreciation and amortization 356 CPChem EBITDA 2,835 Adjustments* 252…

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