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JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66

Phillips 66 · Jul 10, 2012 · 31 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. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 1
    Investor Update July / August 2012
  2. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 2
    Phillips 66 The Advantaged Downstream Energy Company Adjusted Earnings (B) Industry-leading 4 Midstream Refining & Marketing 3.6 Chemicals Chemicals R&M 3 Midstream Total Financial strength 2 Earnings growth 1.8 Returns…
  3. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 3
    Improving Returns and Earnings R&M ROCE Midstream ROCE 12% Adjusted Earnings 30% 0.2 B - 2009 - 0.2 B 20% 18% 1.2 B - 2010 - 0.3 B 5% 1% 2.7 B - 2011 - 0.4 B 2009 2010 2011 2009 2010 2011 Chemicals ROCE Phillips 66 ROCE 28%…
  4. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 4
    Optimizing Portfolio Refining Capacity Chemicals Capacity Midstream Capacity MM Bbls crude oil/day B pounds/yr DCP BCF/D 16% reduction 8% increase 6% increase 2.7 31 7.2 6.8 29 2.2 2009 2011 2009 2011 2009 2011 3-Yr ROCE…
  5. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 5
    High-Performing Businesses R&M Chemicals Midstream 2011 ROCE (%) 2011 ROCE (%) 2011 ROCE (%) MPC 20 CPChem 25 DCP 19 Midstream XOM 19 XOM Chem 22 MWE 14 PSX 12 LYB 20 OKE 14 CVX 12 WLK 20 EPD 11 TSO 12 DOW 11 VLO 8…
  6. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 6
    North American Supply Growth 5 U.S. Lower 48 Onshore Oil Production MMBD 4.39 4 NGL Production (ex. Refining) 3 5,000 MBD 2.26 2.13 2 +52% Woodford Granite Wash 1 3,750 Niobrara Bakken Avalon 0 2009 2011 2013 2015 2017 2019…
  7. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 7
    External Environment Market Assumptions U.S. shale gas and oil Supply U.S. NGLs Growth Canadian oil sands Ethanol and biofuels Non-OECD energy demand Expanding Distillate outpacing gasoline demand Demand U.S. NGL demand…
  8. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 8
    Selected Refining Margins and Differentials Global 3-2-1 (/BBL) Ethylene Cash Margin (/Ton) External 30 Range 1,000 Ethane Derived 600 15 Naphtha Derived 200 0 (200) 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Brent /…
  9. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 9
    Key Initiatives Creating differential shareholder value Continuously improving operating excellence Enhancing financial strength and flexibility Allocating cash flow well Growing Chemicals capacity Expanding Midstream business…
  10. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 10
    Strong Portfolio R&M Midstream Chemicals 15 refineries (11 in US) 50/50 JV with Spectra - DCP 50/50 JV with Chevron - Nelson complexity of 11 Large U.S. gatherer & CPChem 2.2 MMBPD refining processor NAs largest producer of…
  11. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 11
    Refining Assets Throughput Capacity Western / Pacific Central Corridor Gulf Coast Atlantic Basin / Europe United States FD 439 588 Ireland BI 2,231 MBD BW WG HU 471 SF 733 WR United Kingdom LA PC BG Distillate Capacity…
  12. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 12
    Marketing and Specialty Businesses U.S. Marketing Ensures refinery off take Highly integrated with refining assets European Marketing Highest market efficiency Strong ROCE Lubricants Large finished lubes supplier Co-located…
  13. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 13
    Chemicals 50/50 JV with Chevron CPChem CPChem Global portfolio Net Capacity 30 B Lbs/Year 80% of capacity in U.S. Specialties, Aromatics Olefins/ and Advantaged feedstock position Polyolefins Styrenics 70-80% of U.S. capacity is…
  14. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 14
    Midstream 50/50 JV with Spectra DCP Large U.S. NGL producer Wattenburg Large gatherer and processor Powder River Blue Line Wood River Conway Assets overlay shale plays Shocker Chisholm Growing MLP DPM Ponca City Borger…
  15. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 15
    Differentiated Portfolio Capital employed of 24 B at year-end 2011 Refining represents 40% of 2009-2011 adjusted earnings 2011 Capital Employed 2009 2011 Adjusted Earnings 5% 14% 11% 40% 54% 22% 30% 24% Refining…
  16. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 16
    Strategic Priorities Enhance return on capital Portfolio optimization Margin improvement Deliver profitable growth Chemicals expansion Midstream growth Specialties and transportation Grow shareholder distributions Regular…
  17. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 17
    Enhance Return on Capital Optimize portfolio Capital Expenditures (B) Shift capital employed to higher PSX CPChem* DCP* returning assets/segments 2.5 Continuous high-grade of portfolio Midstream 2.0 Improve margins 1.5…
  18. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 18
    Optimize Portfolio Shifting Capital Employed 5% Increase investment in 10% higher-returning businesses 11% 25% Midstream 20% Rationalize low-returning 25% Chemicals refining assets 84% Disciplined portfolio 70% R&M 50%…
  19. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 19
    Capture Advantaged Feedstock Opportunities Shale oil to Phillips 66 refineries 100 MBD Current shale oil Crude Advantage (%) processed 460 MBD Total shale oil processing capability 38.3% Brent/LLS/ 46.5% HLS/ANS Billings…
  20. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 20
    Increase Exports Canadian Increased exports in 2011 Oil sands Additional planned export Bakken capability increases Coastal refineries Niobrara Granitewash Phillips 66 Exports (MBD) Actuals Capability Bone Spring U.S.…
  21. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 21
    Margin Improvement Controllable Costs (B) Manage costs Target 200 MM cost reduction Eliminate spin-related 3.7 3.9 3.9 dis-synergies Drive unit operating costs lower Potential procurement savings 2009 2010 2011 Clean Product…
  22. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 22
    Deliver Profitable Growth Chemicals Olefins and polyolefins Derivatives Midstream NGL logistics Gathering and Processing capacity Refining & Marketing Specialties and transportation Limited opportunities for profitable…
  23. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 23
    Chemicals Growth Middle East Saudi Arabia: S-Chem and Saudi Polymers Company ventures Qatar: Q-Chem I and Q-Chem II ventures Pursuing additional opportunities U.S. 2013 NGL fractionation expansion at Sweeny 2014 start-up of…
  24. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 24
    Midstream Growth DCP Opportunities LaSalle 4 B of growth projects in Plant execution Conway Online 2011 2014 2 B of additional opportunities Online 2012 2014 Adding 500 MBD NGL logistics Southern Hills capacity Pipeline…
  25. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 25
    Shareholder Distributions Dividends Share repurchases Initial quarterly dividend of Cash available after funding 0.20/share dividend growth and sustaining capital Expect annual increases Uses of excess cash Affordable Growth…
  26. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 26
    Financial Strength and Flexibility Strong investment grade BBB/Baa1 Good liquidity with extended maturity profile Initial debt outstanding of 8 B Weighted average interest cost of 3.5% pre-tax 20-30% debt to total capitalization…
  27. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 27
    Compelling Investment Opportunity Executionbuilding high-performing businesses Growthinvesting in Chemicals and Midstream Returnsimproving portfolio and margins Distributionsgrowing dividends and repurchases The Advantaged…
  28. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 28
    Investor Update Appendix
  29. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 29
    PSX Non GAAP Reconciliations Millions Millions 2011 2010 2009 2011 2010 2009 1 Adjustments Earnings 4,775 735 476 R&M Less Adjustments Gain (loss) on asset sales 1,629 116 32 Gain (loss) on asset sales 1,545 116 120 Impairments…
  30. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 30
    PSX Non GAAP Reconciliations PSX - ROCE Chemicals - ROCE 2011 2010 2009 2011 2010 2009 Numerator (MM) Numerator (MM) Net income 4,780 740 479 Net income 716 486 228 After-tax interest expense 11 1 1 After-tax interest expense - - -…
  31. JULY AND AUGUST 2012 INVESTOR UPDATE – Phillips 66 – slide 31
    PSX Non GAAP Reconciliations Millions Three 2011 2010 2009 Year Average 1 Marketing, Specialties and Other Earnings 2,200 566 420 1,062 Less Adjustments Gain (loss) on asset sales 1,629 116 32 592 Impairments - (8) (116) (41)…

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