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September 2017 Investor Update – Phillips 66

Phillips 66 · Sep 12, 2017 · 57 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. September 2017 Investor Update – Phillips 66 – slide 1
    Investor Update September 2017 NYSE: PSX www.phillips66.com
  2. September 2017 Investor Update – Phillips 66 – slide 2
    Diversified Downstream Company Marketing & Midstream Chemicals Refining Specialties Integrated Midstream 50% Interest in CPChem Diversified Refining Portfolio Stable, High-return Network Businesses Location Advantaged Investing in…
  3. September 2017 Investor Update – Phillips 66 – slide 3
    Executing Strategy Leading Operating Excellence Growth Sweeny Hub Bakken Pipeline Beaumont Terminal Phillips 66 Partners CPChem USGC Petrochemical Project Returns Billings advantaged crude U.S. marketing reimaging Distributions…
  4. September 2017 Investor Update – Phillips 66 – slide 4
    Operating Excellence 4
  5. September 2017 Investor Update – Phillips 66 – slide 5
    Environmental, Social, Governance Industry Safety Metrics Robust enterprise-wide ESG issue management (Incidents per 200,000 Hours Worked) 6 B invested in environmental projects and sustaining capital since 2012 6 of 11 refining AFPM…
  6. September 2017 Investor Update – Phillips 66 – slide 6
    U.S. Crude Oil and Gas Plant NGL Production Source: I.H.S. 6
  7. September 2017 Investor Update – Phillips 66 – slide 7
    Midstream Macro Environment 7
  8. September 2017 Investor Update – Phillips 66 – slide 8
    Chemicals Macro Environment 8
  9. September 2017 Investor Update – Phillips 66 – slide 9
    Refining Macro Environment Global Clean Product Demand (MMBD) Global clean product demand expected to grow Global utilization rates expected in low-80s, with U.S. refining in low-90s Strong U.S. utilization due to cost and…
  10. September 2017 Investor Update – Phillips 66 – slide 10
    Integrated Midstream Network 10
  11. September 2017 Investor Update – Phillips 66 – slide 11
    Midstream Platform for long-term growth Focus on growing NGL value chain Expand crude and products export capability PSXP 2018E year-end run-rate EBITDA 1.1 B See appendix for footnotes. 11
  12. September 2017 Investor Update – Phillips 66 – slide 12
    Phillips 66 Partners Funding Midstream growth Organic growth opportunities Sand Hills pipeline expansions (TX) STACK JV expansion (OK) Bayou Bridge pipeline extension (LA) Lake Charles isomerization unit (LA) 30% distribution…
  13. September 2017 Investor Update – Phillips 66 – slide 13
    DCP Midstream Well positioned in low-cost supply basins DJ Basin 0.9 Bcf/d processing Strong growth projects around existing capacity footprint Sand Hills NGL pipeline expansions to 365 MBD in Permian Mid-continent 4Q 2017, 450 MBD…
  14. September 2017 Investor Update – Phillips 66 – slide 14
    Feedstock Advantaged Chemicals Portfolio U.S. Gulf Coast Worldwide Net Ethylene Capacity: 4,770 kMTA U.S. Net Ethylene Capacity: 3,645 kMTA Middle East Net Ethylene Saudi Qatar Arabia Capacity: 1,125 kMTA 14
  15. September 2017 Investor Update – Phillips 66 – slide 15
    Chemicals Outlook Middle East and North America NGLs remain positioned at the low end of the cost curve Global ethylene demand growing at 1.5x GDP Expect demand growth to rapidly absorb new capacity additions Source: I.H.S., April…
  16. September 2017 Investor Update – Phillips 66 – slide 16
    CPChem USGC Petrochemicals Project 1,000 kMTA polyethylene at Old Ocean, TX Mechanically complete 2Q 2017 1,500 kMTA ethylene at Cedar Bayou, TX Planned mechanical completion 4Q 2017 Long-term mid-cycle EBITDA 1.2-1.4 B Focus on…
  17. September 2017 Investor Update – Phillips 66 – slide 17
    Enhancing Returns in Refining and Marketing 17
  18. September 2017 Investor Update – Phillips 66 – slide 18
    Refining Improving returns Billings heavy crude project Ponca City yield flexibility Wood River FCC modernization Bayway FCC modernization 40 other low-cost, high-return projects Increasing clean product yield Top tier…
  19. September 2017 Investor Update – Phillips 66 – slide 19
    Marketing and Specialties Stable, high-return businesses Marketing Enhancing U.S. fuels brands Adding 25-30 European sites per year Expanding brand licensing Providing ratable refinery off-take Specialties Increasing value…
  20. September 2017 Investor Update – Phillips 66 – slide 20
    Capital Structure Investment-grade credit ratings PSX BBB+ / A3 PSXP BBB / Baa3 Over 7 B of available liquidity 3.5x Debt/EBITDA target at PSXP 20
  21. September 2017 Investor Update – Phillips 66 – slide 21
    Capital Allocation Maintain financial strength, investment-grade credit rating Fund sustaining capital expenditures Pay a growing, secure and competitive dividend Target long-term 60% reinvestment and 40% shareholder…
  22. September 2017 Investor Update – Phillips 66 – slide 22
    Capital Expenditures 2017E Consolidated 2.2 B Phillips 66 2017E 1.8 B 0.8 B Growth 1.0 B Sustaining Phillips 66 Partners 2017E 0.4 B 2018E Consolidated 2-3 B 2015 consolidated capital expenditures of 5.8 billion include 1.5…
  23. September 2017 Investor Update – Phillips 66 – slide 23
    Distributions Important source of shareholder value Growing, secure and competitive dividends 30% CAGR with seven increases since May 2012 Committed to share repurchases Repurchased/exchanged 131 MM shares, over 20% of shares…
  24. September 2017 Investor Update – Phillips 66 – slide 24
    Creating Value 1.5 B long-term expected EBITDA growth for projects coming online 2017-2018 Moving from heavy-investment period to increasing net cash generation Continued investment in higher- valued businesses See appendix for…
  25. September 2017 Investor Update – Phillips 66 – slide 25
    Delivering Shareholder Returns Integrated portfolio Disciplined capital allocation Returns focused Value-added growth Strong balance sheet Compelling investment See appendix for footnotes. 25
  26. September 2017 Investor Update – Phillips 66 – slide 26
    Investor Update September 2017 NYSE: PSXP www.phillips66partners.com
  27. September 2017 Investor Update – Phillips 66 – slide 27
    Phillips 66 Partners Ownership Structure (NYSE: PSX) 100% ownership interest PSXP Public Phillips 66 Partners GP LLC Unitholders 57% limited partner (PSXP General Partner) interest General Partner Units IDRs 41% limited…
  28. September 2017 Investor Update – Phillips 66 – slide 28
    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 28
  29. September 2017 Investor Update – Phillips 66 – slide 29
    Phillips 66 Partners Pecan Grove Marine Dock 29
  30. September 2017 Investor Update – Phillips 66 – slide 30
    Distribution Growth Distribution / LP Unit (cents) 58.60 61.50 53.10 55.80 48.10 50.50 42.80 45.80 37.00 40.00 31.68 34.00 27.43 30.17 21.25 22.48 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2013 2013 2014 2014 2014…
  31. September 2017 Investor Update – Phillips 66 – slide 31
    Financial Performance Adjusted EBITDA (MM) 161 170 155 111 97 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 2017 Distributable Cash Flow (MM) 140 130 124 102 84 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 2017 Adjusted EBITDA and…
  32. September 2017 Investor Update – Phillips 66 – slide 32
    Phillips 66 Partners Capital Expenditures 2017E Capex of 437 MM PSXP Capital Expenditures (MM) 381 MM Growth Bayou Bridge Pipeline Sand Hills Pipeline STACK Pipeline JV 461 437 River Parish NGL System 205 56 MM Sustaining 4…
  33. September 2017 Investor Update – Phillips 66 – slide 33
    381 MM 2017 Organic Growth Plan Bayou Bridge Pipeline Transports crude from Nederland, TX to Lake Charles, LA, and eventually to St. James, LA Increases crude supply options for Louisiana refineries Nederland to Lake Charles leg began…
  34. September 2017 Investor Update – Phillips 66 – slide 34
    PSXP Debt Profile 2.3 B Total Debt as of June 30, 2017 Senior Notes Maturity Profile (B) 2.2 B Senior Notes: 5-Year 300 MM notes, 2.646% coupon 10-Year 500 MM notes, 3.605% coupon 10-Year 500 MM notes, 3.550% coupon 30-Year 300 MM…
  35. September 2017 Investor Update – Phillips 66 – slide 35
    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 35
  36. September 2017 Investor Update – Phillips 66 – slide 36
    Total Return Since IPO PSXP +128% 300% Closed 70 MM Closed 1.3 B Alerian MLP Index -21% acquisition acquisition 250% Closed 775 MM 200% Closed 700 MM acquisition acquisition 150% 100% Closed 340 MM Closed 1.0 B acquisition…
  37. September 2017 Investor Update – Phillips 66 – slide 37
    Appendix
  38. September 2017 Investor Update – Phillips 66 – slide 38
    Corporate 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…
  39. September 2017 Investor Update – Phillips 66 – slide 39
    Value Chain 39
  40. September 2017 Investor Update – Phillips 66 – slide 40
    Midcontinent Integrated Growth Midstream Palermo rail terminal/Sacagawea pipeline (PSXP) Bakken Pipeline Refining, Marketing & Specialties Ponca City Yield improvement projects Tight oil processing flexibility 100% lease crude…
  41. September 2017 Investor Update – Phillips 66 – slide 41
    Western Gulf Creating a World-Class Energy Complex Midstream Sweeny Fractionator One (PSXP) Freeport LPG Export Terminal Refining, Marketing & Specialties Sweeny Strategic asset integration FCC optimization Marketing &…
  42. September 2017 Investor Update – Phillips 66 – slide 42
    Eastern Gulf Refining Logistics and Midstream Growth Midstream Beaumont Terminal expansion Bayou Bridge Pipeline (PSXP) River Parish NGL System (PSXP) Refining, Marketing & Specialties Lake Charles Increase feedstock advantage…
  43. September 2017 Investor Update – Phillips 66 – slide 43
    West Coast Enhancing Returns Midstream Los Angeles waterborne crude tank Refining, Marketing & Specialties San Francisco Yield improvements Los Angeles FCC energy reduction Marketing & Specialties Grow branded and unbranded…
  44. September 2017 Investor Update – Phillips 66 – slide 44
    Atlantic Basin Enhancing Returns Refining, Marketing & Specialties Bayway FCC modernization Yield improvements Marketing & Specialties Grow JET and COOP brands in Europe Increase unbranded volumes in the U.K. and U.S. Expand…
  45. September 2017 Investor Update – Phillips 66 – slide 45
    Adjusted Free Cash Flow 20121H 2017 Average Midstream (B) Chemicals (B) PSXP (0.3) (0.2) Contributions 0.8 1.4 1.0 0.8 0.9 Adjusted CFO & PSXP Sustaining Capex Available Cash Flow Adjusted CFO Sustaining Capex Adjusted FCF…
  46. September 2017 Investor Update – Phillips 66 – slide 46
    20091H 2017 Average Adjusted ROCE 30% M&S Chemicals 22% 15% 20% PSX Total Refining Midstream 10% 9% 8% Corporate 0% (10%) -15% 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 Average Capital Employed (B) 46
  47. September 2017 Investor Update – Phillips 66 – slide 47
    Phillips 66 Debt and Liquidity Debt Maturity Profile Liquidity (B) (B) 4.9 7.1 5.0 4.0 2.0 2.2 0.5 0.5 0.3 0.3 2018 2019 2020 2021 2020-30 2031-50 Cash Undrawn Revolving Total Bonds Revolving Credit Facility Term Loans…
  48. September 2017 Investor Update – Phillips 66 – slide 48
    2017 Sensitivities Annual Net Income MM Midstream - DCP (net to Phillips 66) 10/Gal Increase in NGL price 5 10/MMBtu Increase in Natural Gas price 1 1/BBL Increase in WTI price 1 Chemicals - CPChem (net to Phillips 66) 1/Lb…
  49. September 2017 Investor Update – Phillips 66 – slide 49
    Phillips 66 Outlook 3Q 2017 Global Olefins & Polyolefins utilization Mid-90% Refining crude utilization Mid-90% Refining turnaround expenses (pre-tax) 50 MM - 80 MM Corporate & other costs (after-tax) 125 MM - 140 MM 2017 Refining…
  50. September 2017 Investor Update – Phillips 66 – slide 50
    2016 Third-Party Acquisitions Explorer Pipeline Acquisition of an additional 2.5% equity interest to bring ownership to 22% Approximately 660 MBD petroleum products pipeline delivering to more than 70 major cities in 16 states STACK…
  51. September 2017 Investor Update – Phillips 66 – slide 51
    2016 Acquisitions from Phillips 66 1Q 2016 236 MM, 25% controlling interest in Sweeny Fractionator & Clemens NGL Caverns funded with: 24 MM take-back equity of PSXP LP and GP units 212 MM sponsor loan payable to PSX Sponsor loan…
  52. September 2017 Investor Update – Phillips 66 – slide 52
    Footnotes 1H 2017 1H 2017 is as of June 30, 2017, or the six-month period ended June 30, 2017, as applicable; except as otherwise noted. Forecasted and Estimated EBITDA We are unable to present reconciliations of various forecasted and…
  53. September 2017 Investor Update – Phillips 66 – slide 53
    Non-GAAP Reconciliation (slide 4) Millions of Dollars 2013 2014 2015 2016 1H 2017 Production and operating expenses 4,206 4,435 4,294 4,275 2,408 Selling, general and administrative expenses 1,478 1,663 1,670 1,638 823 5,684 6,098…
  54. September 2017 Investor Update – Phillips 66 – slide 54
    PSXP Adjusted EBITDA and Distributable Cash Flow Reconciliation to Operating Cash Flow (Slide 31) Millions of Dollars Q2 2016* Q3 2016* Q4 2016 Q1 2017 Q2 2017 PSXP Reconciliation to Net Cash Provided by Operating Activities Net cash…
  55. September 2017 Investor Update – Phillips 66 – slide 55
    PSXP Adjusted EBITDA and Distributable Cash Flow Reconciliation to Net Income (Slide 31) Millions of Dollars Q2 2016* Q3 2016* Q4 2016 Q1 2017 Q2 2017 PSXP Reconciliation to Net Income Net income 100 112 102 97 103 Plus:…
  56. September 2017 Investor Update – Phillips 66 – slide 56
    Non-GAAP Reconciliations (Slide 45) Millions of Dollars Average 2012 - 2017 1H Marketing & FCF Reconcilition Midstream Chemicals Refining Specialties Numerator Cash From Operations GAAP 858 402 2,464 1,083 Less: Change in Non-Cash…
  57. September 2017 Investor Update – Phillips 66 – slide 57
    Non-GAAP Reconciliations (Slide 46) Millions of Dollars Average 2009-1H 2017 Phillips 66** Midstream Chemicals Refining M&S Corporate Phillips 66 ROCE Numerator Net Income 3,028 538 741 1,197 799 (354) After-tax interest expense…

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