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November 2017 Investor Presentation – Phillips 66

Phillips 66 · Nov 27, 2017 · 54 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. November 2017 Investor Presentation – Phillips 66 – slide 1
    Investor Update November 2017 NYSE: PSX www.phillips66.com
  2. November 2017 Investor Presentation – 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. November 2017 Investor Presentation – Phillips 66 – slide 3
    Executing Strategy Leading Operating Excellence Growth Sweeny Hub Bakken Pipeline Beaumont Terminal Phillips 66 Partners CPChem USGC Petrochemical Project Returns Refinery yield flexibility projects U.S. marketing reimaging…
  4. November 2017 Investor Presentation – Phillips 66 – slide 4
    Operating Excellence Total Recordable Rates Refining Environmental Metrics (Incidents per 200,000 Hours Worked) (No. of events) Industry Average 3Q YTD 13 14 15 16 17 317 302 278 264 172 Phillips 66 CPChem DCP Midstream 2013…
  5. November 2017 Investor Presentation – 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. November 2017 Investor Presentation – Phillips 66 – slide 6
    U.S. Crude Oil and Gas Plant NGL Production Source: I.H.S. 6
  7. November 2017 Investor Presentation – Phillips 66 – slide 7
    Midstream Macro Environment U.S. Crude Oil Export Volume (MMBD) U.S. Clean Product Exports (MMBD) 2.5 Maximum 3.0 Maximum Demonstrated Exports Demonstrated Exports 2.5 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 0.0 0.0 2012 2013 2014 2015…
  8. November 2017 Investor Presentation – Phillips 66 – slide 8
    Chemicals Macro Environment U.S. Ethane Demand Global PE Capacity and Demand (MMBD) (MMTA) 2.5 Exports 150 Capacity Base Ethane Petchem & Price-sensitive Demand 2.0 Flexible Feedstock 100 1.5 1.0 50 0.5 0.0 0 2012 2013…
  9. November 2017 Investor Presentation – Phillips 66 – slide 9
    Refining Macro Environment Global Clean Product Demand (MMBD) Global clean product demand 70 Diesel expected to grow Jet Gasoline 60 50 Global utilization rates expected in low-80s, with U.S. refining in low-90s 40 30 Strong…
  10. November 2017 Investor Presentation – Phillips 66 – slide 10
    Integrated Midstream Network 10
  11. November 2017 Investor Presentation – Phillips 66 – slide 11
    Midstream 2018E Annual Run-Rate Adjusted EBITDA Platform for long-term growth (B) 1.8 2.0 Focus on growing NGL value chain PSX 0.6 Expand crude and products PSX export capability PSXP PSXP 1.0 1.1 PSXP 2018E year-end run-rate…
  12. November 2017 Investor Presentation – Phillips 66 – slide 12
    Phillips 66 Partners Distribution Growth Funding Midstream growth (cents/unit) Organic growth opportunities Sand Hills pipeline expansions (TX) STACK JV expansion (OK) Bayou Bridge pipeline extension (LA) 64.6 61.5 58.6 55.8…
  13. November 2017 Investor Presentation – 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. November 2017 Investor Presentation – 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. November 2017 Investor Presentation – Phillips 66 – slide 15
    Chemicals Outlook 2017E Average Ethylene Production Cost Curve Middle East ethane and North (/Ton) America NGLs remain positioned at the low end of the cost curve Global ethylene demand growing at 1.5x GDP Expect demand growth to…
  16. November 2017 Investor Presentation – Phillips 66 – slide 16
    CPChem USGC Petrochemicals Project 1,000 kMTA polyethylene at Old Ocean, TX Started operations 3Q 2017 1,500 kMTA ethylene at Cedar Bayou, TX Commissioning expected 1Q 2018 Long-term mid-cycle EBITDA 1.2-1.4 B Focus on project…
  17. November 2017 Investor Presentation – Phillips 66 – slide 17
    Enhancing Returns in Refining and Marketing 17
  18. November 2017 Investor Presentation – Phillips 66 – slide 18
    Refining PSX Global Clean Product Yield Improving returns Billings heavy crude project 84.6% 84.6% 85.1% Ponca City yield flexibility 84.1% 84.4% Wood River FCC modernization 2013 2014 2015 2016 3Q YTD 2017 Bayway FCC…
  19. November 2017 Investor Presentation – Phillips 66 – slide 19
    Marketing and Specialties Stable, high-return businesses Marketing Enhancing U.S. fuels brands 3% volume uplift at rebranded sites Adding 25-30 European sites per year Expanding brand licensing Providing ratable refinery…
  20. November 2017 Investor Presentation – Phillips 66 – slide 20
    Capital Structure Equity and Debt Investment-grade credit ratings 23.9 23.7 24.0 22.4 PSX BBB+ / A3 22.0 30% 30% 27% PSXP BBB / Baa3 28% 26% 22% 26% 25% 21% 10.1 10.2 8.6 8.9 Over 7 B of available liquidity 6.1 3.5x…
  21. November 2017 Investor Presentation – Phillips 66 – slide 21
    Capital Allocation 2018E Sources and Uses of Cash Maintain financial strength, (B) investment-grade credit rating 1.0 1.0 Fund sustaining capital expenditures 1.4 1.0- Pay a growing, secure and 2.0 4.4 4.4 competitive dividend 3.4…
  22. November 2017 Investor Presentation – Phillips 66 – slide 22
    Capital Expenditures 2017E Consolidated 2.0 B Consolidated Capital Expenditures (B) 5.8 Phillips 66 2017E 1.6 B 0.6 B Growth 3.8 1.0 B Sustaining 2.8 2.0 1.8 Phillips 66 Partners 2017E 0.4 B 2018E Consolidated 2-3 B 2013…
  23. November 2017 Investor Presentation – Phillips 66 – slide 23
    Distributions Important source of shareholder value Annual Dividend (/share) Growing, secure and competitive dividends 2.18 2.45 2.73 1.89 1.33 30% CAGR with seven increases since May 2012 2013 2014 2015 2016 2017 Cumulative…
  24. November 2017 Investor Presentation – Phillips 66 – slide 24
    Creating Value Mid-Cycle Incremental Run-Rate Adjusted EBITDA 1.5 B long-term expected (B) EBITDA growth for projects coming online 2017-2018 1.5 Moving from heavy-investment period to increasing net cash generation Continued…
  25. November 2017 Investor Presentation – Phillips 66 – slide 25
    Delivering Shareholder Returns Total Shareholder Return Integrated portfolio PSX +223% 260% Disciplined capital allocation Peers +138% 220% S&P 100 +103% 180% Returns focused 140% Value-added growth 100% 60% Strong balance…
  26. November 2017 Investor Presentation – Phillips 66 – slide 26
    Investor Update November 2017 NYSE: PSXP www.phillips66partners.com
  27. November 2017 Investor Presentation – Phillips 66 – slide 27
    Phillips 66 Partners Ownership Structure (NYSE: PSX) 100% ownership interest PSXP Public Phillips 66 Partners GP LLC Unitholders 55% limited partner (PSXP General Partner) interest General Partner Units IDRs 43% limited…
  28. November 2017 Investor Presentation – Phillips 66 – slide 28
    Phillips 66 Partners Strong alignment with Phillips 66 Highly integrated assets Stable and predictable cash flows Strong growth potential Financial flexibility Pecan Grove Marine Dock 28
  29. November 2017 Investor Presentation – Phillips 66 – slide 29
    Phillips 66 Partners Pecan Grove Marine Dock 29
  30. November 2017 Investor Presentation – Phillips 66 – slide 30
    Distribution Growth Distribution / LP Unit (cents) 61.50 64.60 55.80 58.60 50.50 53.10 45.80 48.10 40.00 42.80 34.00 37.00 30.17 31.68 27.43 21.25 22.48 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2013 2013 2014…
  31. November 2017 Investor Presentation – Phillips 66 – slide 31
    Financial Performance Adjusted EBITDA (MM) 161 170 168 155 111 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 Distributable Cash Flow (MM) 140 136 130 124 102 3Q 2016 4Q 2016 1Q 2017 2Q 2017 3Q 2017 Adjusted EBITDA and…
  32. November 2017 Investor Presentation – 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 4 66 56 MM…
  33. November 2017 Investor Presentation – 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. November 2017 Investor Presentation – Phillips 66 – slide 34
    PSXP Debt Profile 2.9 B Total Debt as of October 31, 2017 Senior Notes Maturity Profile (MM) 2.9 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 10-Year 500…
  35. November 2017 Investor Presentation – 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. November 2017 Investor Presentation – Phillips 66 – slide 36
    Total Return Since IPO PSXP +151% 300% Closed 70 MM Closed 1.3 B Alerian MLP Index -23% acquisition acquisition Closed 2.4 B 250% acquisition Closed 775 MM 200% Closed 700 MM acquisition acquisition 150% 100% Closed 340 MM Closed…
  37. November 2017 Investor Presentation – Phillips 66 – slide 37
    Appendix
  38. November 2017 Investor Presentation – 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. November 2017 Investor Presentation – Phillips 66 – slide 39
    Value Chain 39
  40. November 2017 Investor Presentation – Phillips 66 – slide 40
    Midcontinent Integrated Growth Midstream Palermo rail terminal/Sacagawea pipeline (PSXP) Bakken Pipeline (PSXP) Refining, Marketing & Specialties Ponca City Yield improvement projects Tight oil processing flexibility 100% lease…
  41. November 2017 Investor Presentation – 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. November 2017 Investor Presentation – 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. November 2017 Investor Presentation – 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. November 2017 Investor Presentation – 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. November 2017 Investor Presentation – 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. November 2017 Investor Presentation – Phillips 66 – slide 46
    20093Q 2017 Average Adjusted ROCE 30% M&S Chemicals 22% 15% 20% PSX Total Refining Midstream 11% 9% 8% Corporate 0% (11%) -15% 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 Average Capital Employed (B) 46
  47. November 2017 Investor Presentation – Phillips 66 – slide 47
    Phillips 66 Debt and Liquidity Debt Maturity Profile Liquidity (B) (B) 4.8 6.3 5.0 4.0 1.4 1.5 0.5 0.3 0.3 2019 2020 2021 2022-30 2031-50 Cash Undrawn Revolving Total Bonds Revolving Credit Facility Term Loans Credit…
  48. November 2017 Investor Presentation – 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. November 2017 Investor Presentation – Phillips 66 – slide 49
    Phillips 66 Outlook 4Q 2017 Global Olefins & Polyolefins utilization High-70% Refining crude utilization Mid-90% Refining turnaround expenses (pre-tax) 100 MM - 130 MM Corporate & other costs (after-tax) 125 MM - 140 MM 2017…
  50. November 2017 Investor Presentation – Phillips 66 – slide 50
    Non-GAAP Reconciliation (slide 4) Millions of Dollars 2013 2014 2015 2016 3Q 2017 YTD Production and operating expenses 4,206 4,435 4,294 4,275 3,541 Selling, general and administrative expenses 1,478 1,663 1,670 1,638 1,258 5,684…
  51. November 2017 Investor Presentation – Phillips 66 – slide 51
    PSXP Adjusted EBITDA and Distributable Cash Flow Reconciliation to Operating Cash Flow (Slide 31) Millions of Dollars 3Q 2016* 4Q 2016 1Q 2017 2Q 2017 3Q 2017 PSXP Reconciliation to Net Cash Provided by Operating Activities Net cash…
  52. November 2017 Investor Presentation – Phillips 66 – slide 52
    PSXP Adjusted EBITDA and Distributable Cash Flow Reconciliation to Net Income (Slide 31) Millions of Dollars 3Q 2016* 4Q 2016 1Q 2017 2Q 2017 3Q 2017 PSXP Reconciliation to Net Income Net income 112 102 97 103 99 Plus: Depreciation…
  53. November 2017 Investor Presentation – Phillips 66 – slide 53
    Non-GAAP Reconciliations (Slide 45) Millions of Dollars Average 2012 - 1H 2017 Marketing & FCF Reconcilition Midstream Chemicals Refining Specialties Cash From Operations GAAP 858 402 2,464 1,083 Less: Change in Non-Cash Working…
  54. November 2017 Investor Presentation – Phillips 66 – slide 54
    Non-GAAP Reconciliations (Slide 46) Millions of Dollars Average 2009-3Q 2017 Phillips 66** Midstream Chemicals Refining M&S Corporate Phillips 66 ROCE Numerator Net Income 3,039 536 734 1,225 800 (361) After-tax interest expense…

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