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Investor Presentation September 2015 – Phillips 66

Phillips 66 · Sep 1, 2015 · 56 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. Investor Presentation September 2015 – Phillips 66 – slide 1
    Investor Update September 2015
  2. Investor Presentation September 2015 – Phillips 66 – slide 2
    Strategy Operating Committed to safety, reliability and environmental stewardship while Excellence protecting shareholder value Reshaping our portfolio by capturing growth opportunities in Midstream Growth and Chemicals Enhancing…
  3. Investor Presentation September 2015 – Phillips 66 – slide 3
    Operating Excellence Total Recordable Rates Refining Environmental Metrics (Incidents per 200,000 Hours Worked) Industry Average 1H 12 13 14 15 430 317 300 154 Phillips 66 CPChem DCP 2012 2013 2014 1H 2015 Operating Costs and…
  4. Investor Presentation September 2015 – Phillips 66 – slide 4
    Global Energy Landscape Global Oil Supply and Demand (MMBD) Abundant supply 97 95 Demand exceeding expectations 93 91 89 Energy efficiency increasing 87 85 2010 2011 2012 2013 2014 2015E Source: International…
  5. Investor Presentation September 2015 – Phillips 66 – slide 5
    U.S. Energy Landscape U.S. Liquids Production (MMBD) Production remains resilient 15 12 Pace of infrastructure investment 9 contingent on production growth 6 Stronger fuels demand 3 0 2010 2012 2014 2016 2018 Crude…
  6. Investor Presentation September 2015 – Phillips 66 – slide 6
    U.S. Downstream Advantage U.S. Advantage 20 Refiners and chemical Current manufacturers remain advantaged Historical 15 Low feedstock costs 10 Low energy costs Scale and complexity 5 MLP structure supports midstream 0 Ethane…
  7. Investor Presentation September 2015 – Phillips 66 – slide 7
    Value of Integration EV/EBITDA Multiples Creating value across downstream Accelerating growth Leveraging existing portfolio Allocating capital efficiently Expanding multiple 5.4x 6.7x 7.1x 14.5x Refining PSX Chemicals…
  8. Investor Presentation September 2015 – Phillips 66 – slide 8
    Midcontinent Integrated Growth Midstream 280 MM EBITDA growth Palermo rail terminal/Sacagawea pipeline (PSXP) Dakota Access/ETCO crude pipelines Refining, Marketing & Specialties 430 MM EBITDA growth Ponca City Yield improvement…
  9. Investor Presentation September 2015 – Phillips 66 – slide 9
    Western Gulf Creating a World-Class Energy Complex Midstream 750 MM EBITDA growth Sweeny Fractionator One Freeport LPG export terminal Cross-channel connector (PSXP) Eagle Ford crude pipeline Sweeny Fractionator Two Refining,…
  10. Investor Presentation September 2015 – Phillips 66 – slide 10
    Eastern Gulf Refining Logistics and Midstream Growth Midstream 200 MM EBITDA growth Beaumont terminal expansion: +7 MMBbls Bayou Bridge pipeline Alliance clean products dock Refining, Marketing & Specialties 150 MM EBITDA growth…
  11. Investor Presentation September 2015 – Phillips 66 – slide 11
    West Coast Enhancing Returns Midstream 60 MM EBITDA growth Completed Ferndale rail rack 4Q 2014 (PSXP) Los Angeles waterborne crude tank Santa Maria rail rack Refining, Marketing & Specialties 60 MM EBITDA growth San Francisco…
  12. Investor Presentation September 2015 – Phillips 66 – slide 12
    Atlantic Basin Enhancing Returns Midstream 50 MM EBITDA growth Completed Bayway rail rack 3Q 2014 (PSXP) Bayway LPG loading facility Refining, Marketing & Specialties 200 MM EBITDA growth Bayway FCC reactor modernization…
  13. Investor Presentation September 2015 – Phillips 66 – slide 13
    Midstream EBITDA 2015 2016 2017 2018 (B) Sweeny Midstream Hub 2.3 Phase 1 0.4 EBITDA Beaumont Terminal Expansion 1.2 Remaining at PSX 0.9 Bakken Expansion (PSXP) EBITDA 0.7 1.1 in Bayou Bridge Pipeline PSXP 0.3 Eagle Ford…
  14. Investor Presentation September 2015 – Phillips 66 – slide 14
    PSXP Value to PSX Cumulative Cash from PSXP PSX Equity Value of PSXP (B) Distributions (B) Fee-based assets 15 15 Cumulative Dropdown Proceeds Growth opportunities Cumulative Organic 10 Distributions 10 Drop downs Selective…
  15. Investor Presentation September 2015 – Phillips 66 – slide 15
    DCP Midstream 550 MM 2015 growth capital 500 MM EBITDA growth by 2018 Placing current projects into service in 2015 Keathley Canyon National Helium Plant expansion Zia II Plant and Gathering Lucerne 2 Plant and Gathering Sand…
  16. Investor Presentation September 2015 – Phillips 66 – slide 16
    Chemicals June 2015 YTD Average Ethylene Production Cost Curve (/ton) Petrochemical demand driven 900 Asia Import by global GDP growth price 1,200/ton Self-funded capital program W. Europe Naphtha 800 700 600 China Coal…
  17. Investor Presentation September 2015 – Phillips 66 – slide 17
    CPChem Projects Update 1.5 B EBITDA growth by 2018 Completed 1-hexene project and 10th Sweeny furnace in 2014 NAO expansion 100 kMTA at Cedar Bayou, TX Completed 2Q 2015 USGC Petrochemicals 1,500 kMTA (ethylene) at Cedar…
  18. Investor Presentation September 2015 – Phillips 66 – slide 18
    Refining Enhancing Returns 2009 2014 Average Annual Free Cash Flow (B) Significant free cash flow generation 0.9 2.5 High-return projects creating 1.6 sustainable earnings increases CFO Sustaining Capex FCF EBITDA growth: 850…
  19. Investor Presentation September 2015 – Phillips 66 – slide 19
    Marketing & Specialties High-returning businesses 250 MM EBITDA growth by 2018 25% ROCE U.S. Marketing Wholesale model Enhancing fuels brands Volume growth International Marketing Retail / wholesale model Adding 100+ sites…
  20. Investor Presentation September 2015 – Phillips 66 – slide 20
    Phillips 66 Available Cash Flow Annual Available Cash Flow (B) Diversified cash generation 2.4 Funding transformational growth Growing distributions 1.0 1.5 6.6 Financial flexibility 3.7 2.7 Strong free cash flow yield…
  21. Investor Presentation September 2015 – Phillips 66 – slide 21
    Capital Allocation 2014 2016E Ensuring financial flexibility Investment grade credit rating Strong balance sheet Funding growth Cash from operations Distributions Reinvestment PSXP proceeds Returning capital to shareholders…
  22. Investor Presentation September 2015 – Phillips 66 – slide 22
    Capital Budget 2 - 3 B Growth capital Legacy, scalable Midstream assets Fee-based assets suitable for PSXP dropdown Quick payout Refining projects 1 B Sustaining capital Maintaining safe, reliable assets 22
  23. Investor Presentation September 2015 – Phillips 66 – slide 23
    Distributions Dividend Growth Share Count and Capital Returned (Quarterly /share) 7.0 B 624 MM 56 590 MM 538 MM 20 3Q2012 4Q2013 2Q2015 3Q2012 4Q2013 2Q2015 See appendix for footnotes. 23
  24. Investor Presentation September 2015 – Phillips 66 – slide 24
    Delivering Value Adjusted Constant Margin EBITDA (B) 45% EBITDA growth 9.3 Growing Midstream and Chemicals 6.4 Enhancing returns in Refining Realizing benefits of reinvestment 2009 - 2014 Midstream Chemicals Refining M&S…
  25. Investor Presentation September 2015 – Phillips 66 – slide 25
    Compelling Investment 180% PSX +158% Shareholder returns 140% Unique portfolio 100% S&P 100 +44% EBITDA growth 60% 20% Disciplined capital allocation -20% Multiple expansion May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15…
  26. Investor Presentation September 2015 – Phillips 66 – slide 26
    Institutional Investors Contact Kevin Mitchell InvestorRelationsp66.com Vice President, Investor Relations 832-765-2297 C.W. Mallon Manager, Investor Relations
  27. Investor Presentation September 2015 – Phillips 66 – slide 27
    Investor Update September 2015 NYSE: PSXP www.phillips66partners.com
  28. Investor Presentation September 2015 – Phillips 66 – slide 28
    Phillips 66 Partners Ownership Structure (NYSE: PSX) 100% ownership interest PSXP Public Phillips 66 Partners GP LLC Unitholders 69% limited partner (PSXP General Partner) interest General Partner Units IDRs 29% limited…
  29. Investor Presentation September 2015 – Phillips 66 – slide 29
    Phillips 66 Partners Strong alignment with Phillips 66 Highly integrated assets Stable and predictable cash flows Significant growth potential Financial flexibility Pecan Grove Marine Dock 30
  30. Investor Presentation September 2015 – Phillips 66 – slide 30
    Phillips 66 Partners Financial Highlights 0.45 Distribution / LP Unit () 2Q 2015 0.40 Distributable cash flow 47.8 MM 0.35 0.30 Adjusted EBITDA 57.0 MM 0.25 0.40 0.37 0.34 0.20 0.3017 0.3168 Acquired interest in three…
  31. Investor Presentation September 2015 – Phillips 66 – slide 31
    Q1 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 1.1 B acquisition Asset-level 2015E EBITDA of 115…
  32. Investor Presentation September 2015 – Phillips 66 – slide 32
    275 MM In Announced Organic Growth Cross-Channel Capital cost: 22 MM Connector Pipeline Increases access to export docks for shippers in Houston Ship Channel Expected completion in 4Q 2015 Capital cost: 50 MM Eagle Ford Crude…
  33. Investor Presentation September 2015 – Phillips 66 – slide 33
    Highly Integrated Assets Palermo Rail Terminal expected to be operational Q4 2015. 34
  34. Investor Presentation September 2015 – Phillips 66 – slide 34
    Fee-based, Long-term contracts provide stability Asset Initial Term (years) Maximum Term with Options (years) Clifton Ridge to Lake Charles 10 20 Sweeny to Pasadena 10 20 Pipelines Hartford Connector 23 * 23 Gold Line 10 15…
  35. Investor Presentation September 2015 – Phillips 66 – slide 35
    Adjusted EBITDA and DCF Adjusted EBITDA (MM) Distributable Cash Flow (MM) 57.0 49.0 47.8 43.7 41.9 37.6 37.2 35.9 34.3 33.4 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 36
  36. Investor Presentation September 2015 – Phillips 66 – slide 36
    Balanced Debt Maturity Profile 10-year notes 1.1 B debt issuance February 2015 3.605% coupon 5-Year 300 MM notes 500 MM 10-Year 500 MM notes 30-Year 300 MM notes 5-year notes 30-year notes 2.646% coupon 4.68% coupon 300…
  37. Investor Presentation September 2015 – Phillips 66 – slide 37
    Financial Flexibility Investment grade credit rating Target 3.5x debt / EBITDA 30% distribution CAGR through 2018 Target 1.1x annual coverage ratio Support Phillips 66 Midstream growth 38
  38. Investor Presentation September 2015 – Phillips 66 – slide 38
    Total Return Since IPO 250% Closed 2nd PSXP 172% acquisition - 230% Alerian MLP Index -10% 340 MM 210% 190% Closed 1st 170% acquisition - 150% 700 MM 130% 110% Closed 3rd IPO acquisition - 90% 1.1 B 70% 50% 30% 10% -10%…
  39. Investor Presentation September 2015 – Phillips 66 – slide 39
    Institutional Investors Contact Kevin Mitchell - Investor Relations Kevin.Mitchellp66.com 832-765-2297 C.W. Mallon - Investor Relations C.W.Mallonp66.com 832-765-2297
  40. Investor Presentation September 2015 – Phillips 66 – slide 40
    Appendix
  41. Investor Presentation September 2015 – Phillips 66 – slide 41
    Segment Strategy Marketing and Refining: Midstream: Growth Chemicals: Growth Specialties: Enhance Returns Selective Growth Execute Sweeny hub Grow CPChem organically Optimize crude slate Expand European retail Grow integrated…
  42. Investor Presentation September 2015 – Phillips 66 – slide 42
    Free Cash Flow 2013 1H 2015 Average Midstream (B) Chemicals (B) PSXP Drop 0.3 0.2 Proceeds 0.7 1.2 1.0 1.3 0.9 CFO & Drop Proceeds Sustaining Capex Available Cash Flow CFO Sustaining Capex FCF Refining (B) Marketing &…
  43. Investor Presentation September 2015 – Phillips 66 – slide 43
    1H 2015 Adjusted ROCE 40% 30% M&S Chemicals 25% Refining P66 Total 20% 21% 13% 10% 16% Midstream 5% Corporate 0% -7% -10% 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 Average Capital Employed (B) 44
  44. Investor Presentation September 2015 – Phillips 66 – slide 44
    Capital Structure 29% 26% 20- 30% 22% 22.0 21.6 22.4 8.7 7.9 6.2 5.0 5.2 5.0 2013 2014 1H 2015 Equity B Debt B Cash & Cash Equivalents B Debt to Capital Excludes PSXP. 45
  45. Investor Presentation September 2015 – Phillips 66 – slide 45
    2015 Sensitivities Phillips 66 Annual Net Income MM Midstream - DCP (net to Phillips 66) 10/Gal Increase in NGL price 30 1/MMBtu Increase in Natural Gas price 25 10/BBL Increase in WTI price 15 Chemicals - CPChem (net to Phillips…
  46. Investor Presentation September 2015 – Phillips 66 – slide 46
    Phillips 66 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 - -…
  47. Investor Presentation September 2015 – Phillips 66 – slide 47
    Non-GAAP Reconciliations Forecasted EBITDA Forecasted EBITDA estimates were primarily derived on an EBITDA-only basis (revenue and cost projections). Accordingly, all the elements required for forecasted net income, including income…
  48. Investor Presentation September 2015 – Phillips 66 – slide 48
    Non-GAAP Reconciliations Millions of Dollars Average 2009-2014 Refining Free Cash Flow Numerator Cash From Operations GAAP 2,615 Less: Change in Non-Cash Working Cap. 152 Cash From Operations (excluding WC) 2,463 Less: P66 Equity…
  49. Investor Presentation September 2015 – Phillips 66 – slide 49
    Non-GAAP Reconciliations Millions of Dollars Average 2009-2014 Marketing & Refining Specialties ROCE Numerator Net Income 1,127 727 After-tax interest expense 0 0 GAAP ROCE earnings 1,127 727 Special Items 344 (34) Adjusted…
  50. Investor Presentation September 2015 – Phillips 66 – slide 50
    Non-GAAP Reconciliations Millions of Dollars Average 2009-2014 Phillips 66 Free Cash Flow Numerator Cash From Operations GAAP 3,650 Less: Change in Non-Cash Working Cap. (128) Cash From Operations (excluding WC) 3,737 Total…
  51. Investor Presentation September 2015 – Phillips 66 – slide 51
    Non-GAAP Reconciliations Millions of Dollars Average 2009 - 2014 Marketing & Midstream Chemicals Refining Specialties Corporate Phillips 66 Adjusted EBITDA by Segment Reconciliation Net income attributable to Phillips 66 657 729…
  52. Investor Presentation September 2015 – Phillips 66 – slide 52
    Non-GAAP Reconciliations Millions of Dollars Average 2013-1H 2015 Marketing & Midstream Chemicals Refining Specialties FCF Yield Numerator Cash From Operations GAAP 750 597 2,557 1,177 Less: Change in Non-Cash Working Cap. 12 -…
  53. Investor Presentation September 2015 – Phillips 66 – slide 53
    Non-GAAP Reconciliations Millions of Dollars 1H 2015 Marketing & Phillips 66 Midstream Chemicals Refining Specialties Corporate ROCE Numerator Net Income 2,022 16 498 1,142 618 (252) After-tax interest expense 107 - - - - 107…
  54. Investor Presentation September 2015 – Phillips 66 – slide 54
    Non-GAAP Reconciliations Millions of Dollars Adjusted Phillips 66 Phillips 66 Phillips 66 Partners Consolidated 2013 Total Debt 6,155 - 6,155 Total Equity 21,983 409 22,392 Debt-to-capital ratio 22% 22% 2014 Total Debt 8,666…
  55. Investor Presentation September 2015 – Phillips 66 – slide 55
    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…
  56. Investor Presentation September 2015 – Phillips 66 – slide 56
    Adjusted EBITDA and Distributable Cash Flow Reconciliation to Net Income MM 2Q 2015 1Q 2015 4Q 2014 3Q 2014 2Q 2014 Net Income 42.0 35.4 36.3 30.0 30.9 Plus: Depreciation 5.3 5.1 4.5 4.2 3.9 Net interest expense 9.5 5.8 2.1 1.4 1.3…

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