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March 2016 Investor Presentation – Phillips 66

Phillips 66 · Mar 21, 2016 · 55 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. March 2016 Investor Presentation – Phillips 66 – slide 1
    Investor Update March 2016 NYSE: PSX www.phillips66.com
  2. March 2016 Investor Presentation – Phillips 66 – slide 2
    Market Dynamics Brent (/bbl) Global Market Crack (/bbl) 112 109 17 17 99 14 13 52 9 31 2012 2013 2014 2015 2016 YTD 2012 2013 2014 2015 2016 YTD NGL Weighted Average (cpg) PE Cash Chain Margin (cpp) 82 90 89 42 36 33 45…
  3. March 2016 Investor Presentation – Phillips 66 – slide 3
    Strategy Adjusted EBITDA Operating Excellence (B) 9.7 Growth 8.5 7.8 7.4 Returns Distributions High-Performing Organization 2012 2013 2014 2015 Refining M&S Chemicals DCP Midstream See appendix for footnotes. 4
  4. March 2016 Investor Presentation – Phillips 66 – slide 4
    Phillips 66 Partners LP Strategic relationship with PSX Stable and predictable cash flows Low cost capital source Financial Flexibility 8
  5. March 2016 Investor Presentation – Phillips 66 – slide 5
    DCP Midstream Natural Gas Total Throughput (Tbtu/d) Strengthened balance sheet Significant self-help initiatives Cash flow breakeven reduction from 60 to 35 cpg NGL 7.1 7.1 7.3 7.1 Operating improvements Contract realignment 2012…
  6. March 2016 Investor Presentation – Phillips 66 – slide 6
    Global Chemicals Demand Global Ethylene Demand and Utilization (MM Metric Tons and %) Petrochemical demand driven by 87.7% global economic growth 86.6% 86.9% 86.1% Demand outpaced capacity additions 137 141 134 129 2012…
  7. March 2016 Investor Presentation – Phillips 66 – slide 7
    Chemicals Production Costs 2015 vs 2014 Average Ethylene Production Cost Curve (/ton) Petrochemical production costs 1,200 2014 reduced globally 2015 1,050 900 CPChem location-advantaged 750 W. Europe CPChem Naphtha feedstock…
  8. March 2016 Investor Presentation – Phillips 66 – slide 8
    CPChem Growth USGC Petrochemicals Project 1,500 kMTA (ethylene) at Cedar Bayou, TX 1,000 kMTA (polyethylene) at Old Ocean, TX Planned startup mid-2017 1 B estimated EBITDA Healthy pipeline of self-funded growth opportunities…
  9. March 2016 Investor Presentation – Phillips 66 – slide 9
    Refining FCF (B) Strong free cash flow 2.4 2.0 1.6 2013 2014 2015 Increased demand for refined products Global Realized Margin (/bbl) Expansive footprint provides opportunities 11.8 for Midstream growth 9.9 9.9 2013…
  10. March 2016 Investor Presentation – Phillips 66 – slide 10
    Refining Adjusted ROCE (%) Investing to improve returns Quick payout, low cost projects 19 Wood River projects 12 12 Dilbit capacity increase, ULSD expansion, FCC modernization 2013 2014 2015 200 MM capex, 100 MM EBITDA Total…
  11. March 2016 Investor Presentation – Phillips 66 – slide 11
    Marketing & Specialties FCF (B) Increased U.S. gasoline sales volumes by 7% Upgraded 300 U.S. branded sites 0.9 1.0 1.0 Increased U.K. inland gasoline placement by 11% 2013 2014 2015 Adjusted ROCE (%) Added 31 new retail sites…
  12. March 2016 Investor Presentation – Phillips 66 – slide 12
    Financial Strength Available Cash Strong balance sheet (B) 7.2 Investment-grade credit rating 1.5 Disciplined capital allocation 5.1 5.0 0.5 20% net debt/cap 5.8 5.0 4.4 3.1 B cash Dividends Sustaining Capex 5 B revolving…
  13. March 2016 Investor Presentation – Phillips 66 – slide 13
    Capital Allocation Funding reinvestment 2014 2016E Cash from operations PSXP proceeds Returning capital to shareholders Dividend growth Distributions Reinvestment Ongoing share repurchases See appendix for footnotes. 17
  14. March 2016 Investor Presentation – Phillips 66 – slide 14
    Capital Spending Consolidated Capital Program (B) (B) 7.7 5.8 5.6 5.3 3.8 3.9 3.5 1.8 2013 2014 2015 2016E 2013 2014 2015 2016E Refining M&S Consolidated WRB DCP CPChem PSXP Midstream Investment in DCP Corporate See…
  15. March 2016 Investor Presentation – Phillips 66 – slide 15
    Distributions Annual Dividend (/sh) Double-digit dividend growth 37% dividend CAGR since spin 1.89 2.18 1.33 Ongoing share repurchase program 2013 2014 2015 110 MM shares repurchased and exchanged Cumulative Distributions (B)…
  16. March 2016 Investor Presentation – Phillips 66 – slide 16
    Compelling Investment PSX +165% 220% Shareholder returns 180% 140% Disciplined capital allocation 100% Unique portfolio Peers +37% 60% EBITDA growth S&P 100 +47% 20% -20% Multiple expansion May-12 Feb-13 Nov-13 Aug-14 May-15…
  17. March 2016 Investor Presentation – Phillips 66 – slide 17
    Distribution Growth Distribution / LP Unit () 0.4580 0.4280 0.4000 0.3700 0.3400 0.3017 0.3168 0.2743 0.2125 0.2248 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 Coverage Ratio 1.13x…
  18. March 2016 Investor Presentation – Phillips 66 – slide 18
    Financial Performance Adjusted EBITDA (MM) 87.1 73.4 57.0 49.0 43.7 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015 Distributable Cash Flow (MM) 74.0 64.5 47.8 41.9 37.2 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015 Adjusted…
  19. March 2016 Investor Presentation – Phillips 66 – slide 19
    Phillips 66 Partners 1Q 2016 Drop Down Assets include a 25% controlling interest in: Sweeny Fractionator 100MBD NGL fractionator Clemens NGL Caverns 7.5MMBbl NGL storage facility Total transaction value of 236 MM funded with: 24 MM…
  20. March 2016 Investor Presentation – Phillips 66 – slide 20
    314 MM Announced 2016 Organic Growth Plan Bayou Bridge Pipeline Transports crude from Nederland, TX to Lake Charles, LA, and St. James, LA Increases crude supply options for LA refineries Expected completion of Lake Charles leg in 1Q…
  21. March 2016 Investor Presentation – Phillips 66 – slide 21
    Highly Integrated and Diversified Asset Portfolio 29
  22. March 2016 Investor Presentation – Phillips 66 – slide 22
    Fee-based, Long-term Contracts Provide Stability Maximum Term with Asset Initial Term (years) Options (years) Clifton Ridge to Lake Charles 10 20 Sweeny to Pasadena 10 20 Hartford Connector 23 23 Gold Line 10 15 Remaining…
  23. March 2016 Investor Presentation – Phillips 66 – slide 23
    Balanced Debt Profile Debt Maturity Profile 1.1 B debt issuance February 2015 (B) 5-Year 300 MM notes, 2.646% coupon 10-Year 500 MM notes, 3.605% coupon 30-Year 300 MM notes, 4.680% coupon Average cost of 3.64% 0.5 0.3 0.3 BBB…
  24. March 2016 Investor Presentation – Phillips 66 – slide 24
    Financial Flexibility Investment-grade credit rating Financial targets: 30% distribution CAGR 2013-2018 3.5x debt / EBITDA 1.1x annual coverage ratio Support Phillips 66 Midstream growth 32
  25. March 2016 Investor Presentation – Phillips 66 – slide 25
    Segment Strategy Marketing & Refining: Midstream: Growth Chemicals: Growth Specialties: Enhance Returns Selective Growth Execute Sweeny Hub Grow CPChem organically Optimize crude slate Expand European retail Grow integrated…
  26. March 2016 Investor Presentation – Phillips 66 – slide 26
    Midcontinent Integrated Growth Midstream Palermo rail terminal/Sacagawea pipeline (PSXP) DAPL/ETCOP Refining, Marketing & Specialties Ponca City Yield improvement project Tight oil processing flexibility 100% lease crude…
  27. March 2016 Investor Presentation – Phillips 66 – slide 27
    Western Gulf Creating a World-Class Energy Complex Midstream Sweeny Fractionator One (25% PSXP) Freeport LPG export terminal Eagle Ford crude pipeline Sweeny Fractionator Two Refining, Marketing & Specialties Sweeny Strategic…
  28. March 2016 Investor Presentation – Phillips 66 – slide 28
    Eastern Gulf Refining Logistics and Midstream Growth Midstream Beaumont terminal expansion: +7 MMBbls Bayou Bridge pipeline Alliance clean products dock Refining, Marketing & Specialties Lake Charles Increase feedstock…
  29. March 2016 Investor Presentation – Phillips 66 – slide 29
    West Coast Enhancing Returns Midstream Los Angeles waterborne crude tank Santa Maria rail rack Refining, Marketing & Specialties San Francisco Yield improvements Los Angeles FCC energy reduction Marketing & Specialties Grow…
  30. March 2016 Investor Presentation – Phillips 66 – slide 30
    Atlantic Basin Enhancing Returns Midstream Bayway LPG loading facility Refining, Marketing & Specialties Bayway FCC reactor modernization Yield improvements Marketing & Specialties Grow JET and COOP brands in Europe…
  31. March 2016 Investor Presentation – Phillips 66 – slide 31
    Historical Performance Adjusted EBITDA Adjusted CFO Adjusted Earnings (B) (B) (B) 9.7 8.5 7.8 7.4 7.0 5.9 5.4 5.3 5.1 4.6 4.5 4.0 4.2 3.5 3.6 3.8 2.2 2.2 1.7 0.5 0.5 2009 '10 '11 '12 '13 '14 '15 2009 '10 '11 '12 '13…
  32. March 2016 Investor Presentation – Phillips 66 – slide 32
    Free Cash Flow 2013 2015 Average Midstream (B) Chemicals (B) PSXP 0.3 Contributions 0.7 0.2 1.4 1.1 0.9 1.0 Adjusted CFO & PSXP Sustaining Capex Available Cash Flow CFO Sustaining Capex FCF Contributions Refining (B)…
  33. March 2016 Investor Presentation – Phillips 66 – slide 33
    2015 Adjusted ROCE 40% M&S 30% 35% Refining Chemicals P66 Total 20% 19% 14% 10% 19% Midstream 5% Corporate 0% -8% -10% 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 Average Capital Employed (B) 44
  34. March 2016 Investor Presentation – Phillips 66 – slide 34
    Capital Structure Consolidated PSX Excluding PSXP 27% 28% 25% 28% 20- 30% 21% 22% 23.9 23.1 22.4 22.0 22.0 21.6 8.6 8.9 8.6 7.8 6.1 5.4 5.2 6.1 5.0 5.2 3.1 3.0 2013 2014 2015 2013 2014 2015 Equity B Debt B Cash &…
  35. March 2016 Investor Presentation – Phillips 66 – slide 35
    Debt and Liquidity Debt Maturity Profile Liquidity (B) (B) 5.0 5.0 8.0 4.0 2.0 3.0 1.5 2016 2017 2018 2019 2020-30 2031-50 Cash Undrawn Revolving Total Credit Facility Committed Bonds Revolving Credit Facility…
  36. March 2016 Investor Presentation – Phillips 66 – slide 36
    2016 Sensitivities Sensitivities shown above are independent and are only valid within a limited price range. 47
  37. March 2016 Investor Presentation – Phillips 66 – slide 37
    Phillips 66 Capital Program Millions of Dollars 2016 Budget Sustaining Growth Total Consolidated Capital Expenditures and Investments Midstream(1) 227 2,119 2,346 Chemicals - - - Refining 833 384 1,217 Marketing and Specialties…
  38. March 2016 Investor Presentation – Phillips 66 – slide 38
    1Q 2015 Phillips 66 Partners 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…
  39. March 2016 Investor Presentation – Phillips 66 – slide 39
    Non-GAAP Reconciliations Millions of Dollars Millions of Dollars Adjusted EBITDA by Segment Reconciliation 2012 2013 2014 2015 Adjusted EBITDA by Segment Reconciliation 2012 2013 2014 2015 Midstream (excluding DCP Midstream)…
  40. March 2016 Investor Presentation – Phillips 66 – slide 40
    Non-GAAP Reconciliations Millions of Dollars Millions of Dollars Adjusted EBITDA by Segment Reconciliation 2012 2013 2014 2015 Adjusted EBITDA by Segment Reconciliation 2012 2013 2014 2015 Chemicals Refining Chemicals net income…
  41. March 2016 Investor Presentation – Phillips 66 – slide 41
    Non-GAAP Reconciliations Millions of Dollars Millions of Dollars Adjusted EBITDA by Segment Reconciliation 2012 2013 2014 2015 Adjusted EBITDA by Segment Reconciliation 2012 2013 2014 2015 Marketing and Specialties Corporate…
  42. March 2016 Investor Presentation – Phillips 66 – slide 42
    Non-GAAP Reconciliations Millions of Dollars 2009 2010 2011 2012 2013 2014 2015 Phillips 66 Phillips 66 net income attributable to Phillips 66 476 735 4,775 4,124 3,726 4,762 4,227 Less: Income from discontinued operations 19 30 43…
  43. March 2016 Investor Presentation – Phillips 66 – slide 43
    Non-GAAP Reconciliations Forecasted EBITDA We are unable to present reconciliations of the various forecasted EBITDA included in this presentation, because certain elements of net income, including interest, depreciation and income…
  44. March 2016 Investor Presentation – Phillips 66 – slide 44
    Non-GAAP Reconciliations Millions of Dollars 2013 2014 2015 Refining FCF Numerator Cash From Operations GAAP 3,700 1,374 2,770 Less: Change in Non-Cash Working Cap. 818 (1,599) (441) Cash From Operations (excluding WC) 2,882 2,973…
  45. March 2016 Investor Presentation – Phillips 66 – slide 45
    Non-GAAP Reconciliations Millions of Dollars 2013 2014 2015 Refining ROCE Numerator Net Income 1,747 1,771 2,554 After-tax interest expense - - - GAAP ROCE earnings 1,747 1,771 2,554 Special Items (13) (195) (28) Adjusted ROCE…
  46. March 2016 Investor Presentation – Phillips 66 – slide 46
    Non-GAAP Reconciliations Millions of Dollars 2013 2014 2015 M&S FCF Numerator Cash From Operations GAAP 757 1,663 1,736 Less: Change in Non-Cash Working Cap. (217) 651 676 Cash From Operations (excluding WC) 974 1,012 1,060 Less:…
  47. March 2016 Investor Presentation – Phillips 66 – slide 47
    Non-GAAP Reconciliations Millions of Dollars 2013 2014 2015 M&S ROCE Numerator Net Income 894 1,034 1,187 After-tax interest expense - - - GAAP ROCE earnings 894 1,034 1,187 Special Items (9) (152) (239) Adjusted ROCE earnings…
  48. March 2016 Investor Presentation – Phillips 66 – slide 48
    Non-GAAP Reconciliations Millions of Dollars 2013 2014 2015 Phillips 66 Available Cash Cash From Continuing Operations GAAP 5,942 3,527 5,713 Less: Change in Non-Cash Working Cap. 880 (1,020) (221) Cash From Operations (excluding…
  49. March 2016 Investor Presentation – Phillips 66 – slide 49
    Non-GAAP Reconciliations Millions of Dollars 2009 2010 2011 2012 2013 2014 2015 Phillips 66 Cash from Operations Cash From Continuing Operations GAAP 917 2,054 4,953 4,259 5,942 3,527 5,713 Less: Change in Non-Cash Working Cap. 393…
  50. March 2016 Investor Presentation – Phillips 66 – slide 50
    Non-GAAP Reconciliations Millions of Dollars Except as Indicated 2009 2010 2011 2012 2013 2014 2015 Reconciliation of Earnings to Adjusted Earnings Consolidated Earnings 476 735 4,775 4,124 3,726 4,762 4,227 Adjustments: Gain on…
  51. March 2016 Investor Presentation – Phillips 66 – slide 51
    Non-GAAP Reconciliations Average 2013-2015 Marketing & Midstream Chemicals Refining Specialties FCF Numerator Cash From Operations GAAP 859 571 2,615 1,385 Less: Change in Non-Cash Working Cap. (46) 0 (407) 370 Cash From…
  52. March 2016 Investor Presentation – Phillips 66 – slide 52
    Non-GAAP Reconciliations Millions of Dollars 2015 Marketing & Phillips 66 Midstream Chemicals Refining Specialties Corporate ROCE Numerator Net Income 4,280 74 962 2,554 1,187 (497) After-tax interest expense 201 - - - - 201…
  53. March 2016 Investor Presentation – Phillips 66 – slide 53
    Non-GAAP Reconciliations Millions of Dollars Adjusted Phillips 66 Phillips 66 Phillips 66 Partners Consolidated 2013 Cash and cash equivalents 4,975 425 5,400 Total Debt 6,126 - 6,126 Total Equity 21,983 409 22,392 Debt-to-capital…
  54. March 2016 Investor Presentation – Phillips 66 – slide 54
    PSXP Non-GAAP Reconciliations Millions 1Q 2015 Phillips 66 Partners Acquisition of Dollars Year ending February 29 2016 Reconciliation of PSXP Estimated EBITDA to Estimated Net Income* Estimated net income 82 Plus: Depreciation…
  55. March 2016 Investor Presentation – Phillips 66 – slide 55
    PSXP Adjusted EBITDA and Distributable Cash Flow Reconciliation to Net Income MM 4Q 2015 3Q 2015 2Q 2015 1Q 2015 4Q 2014 Net Income 64.5 52.3 42.0 35.4 36.3 Plus: Depreciation 5.7 5.7 5.3 5.1 4.5 Net interest expense 9.2 9.1 9.5 5.8…

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