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May 2018 Investor Update – Phillips 66

Phillips 66 · May 10, 2018 · 63 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. May 2018 Investor Update – Phillips 66 – slide 1
    Investor Update May 2018 NYSE: PSX www.phillips66.com CPChems Cedar Bayou Ethane Cracker
  2. May 2018 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. May 2018 Investor Update – Phillips 66 – slide 3
    Executing Strategy Leading Operating Excellence Growth CPChem USGC Petrochemicals Project Phillips 66 Partners Bakken Pipeline Beaumont Terminal Sweeny Hub Returns Refinery yield and feedstock flexibility projects U.S. marketing…
  4. May 2018 Investor Update – Phillips 66 – slide 4
    Operating Excellence Total Recordable Rates Refining Environmental Metrics (Incidents per 200,000 Hours Worked) (No. of events) Industry Average 13 14 15 16 17 18 317 302 279 264 242 61 Phillips 66 CPChem DCP Midstream 2013 2014…
  5. May 2018 Investor Update – Phillips 66 – slide 5
    Environmental, Social, Governance Board engaged in setting company ESG Industry Safety Metrics (Incidents per 200,000 Hours Worked) strategy 6 Extensive ESG engagement 4 2 Record low reportable environmental events 0 Agricul.,…
  6. May 2018 Investor Update – Phillips 66 – slide 6
    U.S. Crude Oil and Gas Plant NGL Production 8 Bakken 6 8 Rockies 4 6 2 4 - 2 - 8 Midcontinent 6 4 2 8 Permian - 6 4 2 8 Eagle Ford - 6 4 2 - Source: BTU Analytics., April 2018 6
  7. May 2018 Investor Update – Phillips 66 – slide 7
    Midstream Macro Environment U.S. Crude Oil Export Volume (MMBD) U.S. Clean Product Exports (MMBD) 1.5 2.5 2.0 1.0 1.5 1.0 0.5 0.5 0.0 0.0 2012 2013 2014 2015 2016 2017 2018 2012 2013 2014 2015 2016 2017 2018 U.S. LPG Export…
  8. May 2018 Investor Update – 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. May 2018 Investor Update – Phillips 66 – slide 9
    Refining Macro Environment Global Clean Product Demand (MMBD) Global clean product demand 70 Diesel expected to grow, driven largely by Jet Gasoline diesel 60 50 Global utilization rates expected in 40 low-80s, with U.S.…
  10. May 2018 Investor Update – Phillips 66 – slide 10
    Integrated Midstream Network 10
  11. May 2018 Investor Update – Phillips 66 – slide 11
    Midstream Transportation 21,000 miles of US pipeline systems 40 finished product terminals 38 storage locations 19 crude oil terminals 5 LPG terminals and 1 petroleum coke exporting facility NGL and Other 200,000+ BPD…
  12. May 2018 Investor Update – Phillips 66 – slide 12
    Midstream Growth 2018E Annual Year-End Run-Rate Adjusted EBITDA (B) Platform for growth 1.8 2.0 Focus on NGL value chain 0.6 PSX Expand crude and products PSX export capability PSXP PSXP 1.0 1.1 PSXP 2018E year-end run-rate…
  13. May 2018 Investor Update – Phillips 66 – slide 13
    Phillips 66 Partners Funding Midstream growth Distribution Growth (cents/unit) Organic growth opportunities Gray Oak Pipeline (TX) South Texas Gateway Terminal (TX) Sand Hills Pipeline expansions (TX) Bayou Bridge Pipeline…
  14. May 2018 Investor Update – Phillips 66 – slide 14
    Gray Oak Pipeline Crude oil transport from West Texas to Gray Oak Pipeline Corpus Christi and Sweeny/Freeport Wink Expected to be in service end of 2019 Orla Origination points Crane Up to 700 MBD based on shipper interest…
  15. May 2018 Investor Update – Phillips 66 – slide 15
    DCP Midstream DJ Basin Well positioned in low-cost supply basins 0.8 Bcf/d processing Strong growth projects around existing footprint capacity Sand Hills NGL Pipeline expansions to 400 MBD in 1Q 2018, 485 MBD by the end of 2018…
  16. May 2018 Investor Update – Phillips 66 – slide 16
    Feedstock Advantaged Chemicals Portfolio Worldwide U.S. Gulf Net Ethylene Coast Capacity: 6,310 kMTA U.S. Net Ethylene Capacity: 5,185 kMTA Middle East Net Ethylene Saudi Qatar Capacity: Arabia 1,125 kMTA As of April…
  17. May 2018 Investor Update – Phillips 66 – slide 17
    Chemicals Olefins and Polyolefins 11,145 kMTA/year North America capacity 2,510 kMTA/year Middle East capacity Specialties, Aromatics and Styrenics 2,710 kMTA/year North America capacity 1,050 kMTA/year Middle East capacity 16…
  18. May 2018 Investor Update – Phillips 66 – slide 18
    Chemicals Outlook 2018E Average Ethylene Production Cost Curve Middle East ethane and North (/Tonnes) America NGLs remain positioned at the low end of the cost curve Asia Coal 1,000 M.E. Naphtha N.A. Naphtha Ethylene demand growth…
  19. May 2018 Investor Update – Phillips 66 – slide 19
    CPChem USGC Petrochemicals Project Additional projects in future years 1,000 kMTA polyethylene at Old Ocean, TX 1,500 kMTA ethylene at Cedar Bayou, TX Cash flow improvement expected in 2018 Long-term mid-cycle EBITDA 1.2-1.4 B…
  20. May 2018 Investor Update – Phillips 66 – slide 20
    Enhancing Returns in Refining and Marketing 20
  21. May 2018 Investor Update – Phillips 66 – slide 21
    Refining and Marketing Refining 13 refineries in U.S. and Europe In 5 U.S. PADDs 2,146 MBD crude capacity 35% heavy, 30% light, 35% medium crude mix Marketing 9,000+ global sites, including 5,700 wholesale outlets 1,400+…
  22. May 2018 Investor Update – Phillips 66 – slide 22
    Enhancing Refining Returns Improving returns projects PSX Global Clean Product Yield Billings heavy crude project (complete) Ponca City yield flexibility (complete) 84.6% 84.1% 84.4% 84.6% 85.5% 82.6% Wood River FCC modernization…
  23. May 2018 Investor Update – Phillips 66 – slide 23
    IMO 2020 Preparedness 2017 Distillate Production as % Total Throughput Existing PSX portfolio well positioned for IMO 2020 38.3% 37.8% 37.1% 36.4% 33.0% High distillate production VLO PSX ANDV HFC MPC Industry leading coking…
  24. May 2018 Investor Update – Phillips 66 – slide 24
    Canadian Imports 2017 Average Canadian Imports (MBD) PSX is the largest U.S. importer of Canadian crude 508 Averaged 508 MBD of 343 imports in 2017 Processed Canadian crude 100 in 9 U.S. refineries 21 16 PSX MPC HFC ANDV VLO…
  25. May 2018 Investor Update – Phillips 66 – slide 25
    Stable, High Return Marketing and Specialties Network Marketing Enhancing U.S. fuels brands Adding 25-30 European sites per year Expanding brand licensing Providing ratable refinery off-take Adjusted EBITDA (B) Specialties 1.4 B…
  26. May 2018 Investor Update – Phillips 66 – slide 26
    Capital Structure Equity and Debt Investment-grade credit ratings 27.4 32% PSX BBB+ / A3 23.9 23.7 24.3 22.4 30% 22.0 27% 27% PSXP BBB / Baa3 28% 28% 22% 26% 25% 22% 21% 11.6 10.1 10.1 6.6 B of total liquidity 8.6 8.9…
  27. May 2018 Investor Update – Phillips 66 – slide 27
    Capital Allocation Maintain financial strength, strong 2015 2017 investment-grade credit rating Fund sustaining capital expenditures Distributions Pay a secure, competitive, and growing Reinvestment dividend 60% reinvestment and…
  28. May 2018 Investor Update – Phillips 66 – slide 28
    Capital Expenditures Consolidated Capital Expenditures (B) 2018E Consolidated 2.30 B 5.8 Phillips 66 2018E 1.55 B 3.8 0.70 B Growth 2.8 0.85 B Sustaining 2.3 1.8 1.8 Phillips 66 Partners 2018E 0.75 B 2013 2014 2015 2016 2017…
  29. May 2018 Investor Update – Phillips 66 – slide 29
    Distributions Important source of shareholder value Annual Dividend (/share) Secure, competitive, and growing 3.10 dividend 2.18 2.45 2.73 1.89 1.33 14% increase to 0.80 per quarter 2013 2014 2015 2016 2017 2018E 27% CAGR with…
  30. May 2018 Investor Update – Phillips 66 – slide 30
    Creating Value Mid-Cycle Incremental Run-Rate Adjusted EBITDA 1.5 B long-term expected (B) EBITDA growth from projects coming online 2017-2018 1.5 Shifted from heavy-investment period to increasing net cash generation Continued…
  31. May 2018 Investor Update – Phillips 66 – slide 31
    Delivering Shareholder Returns Total Shareholder Return Integrated portfolio PSX +312% 340% 300% Disciplined capital allocation Peers +218% 260% S&P 100 +110% 220% Returns focused 180% 140% Value-added growth 100% 60% Strong…
  32. May 2018 Investor Update – Phillips 66 – slide 32
    Investor Update May 2018 NYSE: PSXP www.phillips66partners.com
  33. May 2018 Investor Update – Phillips 66 – slide 33
    Phillips 66 Partners Ownership Structure (NYSE: PSX) 100% ownership interest PSXP Public Common Phillips 66 Partners GP LLC Unitholders 55% limited partner (PSXP General Partner) interest General Partner Units IDRs 43%…
  34. May 2018 Investor Update – Phillips 66 – slide 34
    Phillips 66 Partners Strong alignment with Phillips 66 Highly integrated assets Stable and predictable cash flows Strong growth potential Financial flexibility Sweeny Fractionator, Sweeny, TX Pecan Grove Marine Dock 34
  35. May 2018 Investor Update – Phillips 66 – slide 35
    Phillips 66 Partners Pecan Grove Marine Dock 35
  36. May 2018 Investor Update – Phillips 66 – slide 36
    Financial Growth Adjusted EBITDA (MM) Annual performance highlights since 2014 754 58% growth in Earnings 471 75% growth in Adjusted EBITDA 285 141 65% growth in Distributable Cash Flow 33 2013 2014 2015 2016 2017 Earnings…
  37. May 2018 Investor Update – Phillips 66 – slide 37
    Distribution Growth Distribution / Common LP Unit (cents) 67.8 71.4 61.5 64.6 55.8 58.6 50.5 53.1 45.8 48.1 40.0 42.8 34.0 37.0 27.4 30.2 31.7 21.3 22.5 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2013…
  38. May 2018 Investor Update – Phillips 66 – slide 38
    Phillips 66 Partners Capital Expenditures 2018E Capex of 750 MM PSXP Capital Expenditures (MM) 665 MM Growth Gray Oak Pipeline South Texas Gateway Terminal 750 Bayou Bridge Pipeline 461 Sand Hills Pipeline 352 Lake Charles…
  39. May 2018 Investor Update – Phillips 66 – slide 39
    750 MM 2018 Organic Growth Plan Gray Oak Pipeline Transports crude from West Texas to Corpus Christi and Sweeny Freeport, in service by end of 2019 700 MBD and may be expanded up to 1,000 MBD based on shipper interest in second binding…
  40. May 2018 Investor Update – Phillips 66 – slide 40
    PSXP Debt Profile 2.9 B Total Debt as of March 31, 2018 Senior Notes Maturity Profile (MM) 2.9 B Senior Notes, weighted average cost of 3.97%: 5-Year 300 MM notes, 2.646% coupon 10-Year 500 MM notes, 3.605% coupon 10-Year 500 MM…
  41. May 2018 Investor Update – Phillips 66 – slide 41
    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 41
  42. May 2018 Investor Update – Phillips 66 – slide 42
    Total Return Since IPO PSXP +150% 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 Closed 1.0…
  43. May 2018 Investor Update – Phillips 66 – slide 43
    Appendix Freeport LPG Export Terminal
  44. May 2018 Investor Update – Phillips 66 – slide 44
    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…
  45. May 2018 Investor Update – Phillips 66 – slide 45
    Value Chain 45
  46. May 2018 Investor Update – Phillips 66 – slide 46
    West Coast 46
  47. May 2018 Investor Update – Phillips 66 – slide 47
    Midcontinent 47
  48. May 2018 Investor Update – Phillips 66 – slide 48
    Western Gulf 48
  49. May 2018 Investor Update – Phillips 66 – slide 49
    Eastern Gulf 49
  50. May 2018 Investor Update – Phillips 66 – slide 50
    Atlantic Basin 50
  51. May 2018 Investor Update – Phillips 66 – slide 51
    Adjusted Free Cash Flow 20122017 Average Midstream (B) Chemicals (B) PSXP Contributions 1.0 (0.3) (0.2) 1.7 1.0 0.8 0.9 Adjusted CFO & PSXP Sustaining Capex Available Cash Flow Adjusted CFO Sustaining Capex Adjusted FCF…
  52. May 2018 Investor Update – Phillips 66 – slide 52
    20122017 Average Adjusted ROCE 30% M&S Chemicals 27% 15% 20% Refining PSX Total 12% 13% Midstream 7% Corporate 0% (8%) -15% 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 Average Capital Employed (B) 52
  53. May 2018 Investor Update – Phillips 66 – slide 53
    Consolidated Debt and Liquidity Debt Maturity Profile Liquidity (B) (B) 5.8 5.8 6.6 5.3 4.3 0.5 0.0 0.6 0.6 0.8 0.3 2018 2019 2020 2021 2022-30 2031-50 Cash Undrawn Revolving Total Bonds Revolving Credit Facilities Term…
  54. May 2018 Investor Update – Phillips 66 – slide 54
    Phillips 66 only Debt and Liquidity Debt Maturity Profile Liquidity (B) (B) 5.0 5.0 5.7 4.2 2.8 0.5 0.3 0.3 0.5 0.7 2019 2020 2021 2022-30 2031-50 Cash Undrawn Revolving Total Bonds Revolving Credit Facility Term Loans…
  55. May 2018 Investor Update – Phillips 66 – slide 55
    2018 Sensitivities Annual Net Income MM Midstream - DCP (net to Phillips 66) 10 cents/Gal Increase in NGL price 5 10 cents/MMBtu Increase in Natural Gas price 1 1/BBL Increase in WTI price 1 Chemicals - CPChem (net to Phillips…
  56. May 2018 Investor Update – Phillips 66 – slide 56
    Phillips 66 Outlook 2Q 2018 Global Olefins & Polyolefins utilization Mid-90% Refining crude utilization Mid-90% Refining turnaround expenses (pre-tax) 90 MM - 120 MM Corporate & other costs (after-tax) 170 MM - 190 MM 2018 Refining…
  57. May 2018 Investor Update – Phillips 66 – slide 57
    2018 Capital Budget Millions of Dollars Sustaining Growth Capital Capital Capital Program Midstream Phillips 66 133 335 468 Phillips 66 Partners 85 665 750 218 1,000 1,218 Chemicals - - - Refining 541 286 827 Marketing and…
  58. May 2018 Investor Update – Phillips 66 – slide 58
    Non-GAAP Reconciliation (slide 4) Millions of Dollars 2013 2014 2015 2016 2017 1Q 2018 Production and operating expenses 4,206 4,435 4,294 4,275 4,699 1,246 Selling, general and administrative expenses 1,478 1,663 1,670 1,638 1,695…
  59. May 2018 Investor Update – Phillips 66 – slide 59
    Non-GAAP Reconciliation (slide 25) Millions of Dollars 2013 2014 2015 2016 2017 Reconciliation of Marketing and Specialties Net Income to Adjusted EBITDA Marketing and Specialties net income 894 1,034 1,187 891 686 Plus: Income tax…
  60. May 2018 Investor Update – Phillips 66 – slide 60
    PSXP Adjusted EBITDA and Distributable Cash Flow Reconciliation to Net Income (Slide 36) Millions of Dollars 2013 2014 2015 2016 2017 Reconciliation to Net Income Attributable to the Partnership Net income attributable to the…
  61. May 2018 Investor Update – Phillips 66 – slide 61
    PSXP Adjusted EBITDA and Distributable Cash Flow Reconciliation to Operating Cash Flow (Slide 36) Millions of Dollars 2013 2014 2015 2016 2017 Reconciliation to Net Cash Provided by Operating Activities Net cash provided by operating…
  62. May 2018 Investor Update – Phillips 66 – slide 62
    Non-GAAP Reconciliations (Slide 51) Millions of Dollars Average 2012 - 2017 Marketing & FCF Reconcilition Midstream Chemicals Refining Specialties Cash From Operations GAAP 886 355 2,604 908 Less: Change in Non-Cash Working Cap. (3)…
  63. May 2018 Investor Update – Phillips 66 – slide 63
    Non-GAAP Reconciliations (Slide 52) Millions of Dollars Average 2012-2017 Phillips 66** Midstream Chemicals Refining M&S Corporate Phillips 66 ROCE Numerator Net Income 3,974 317 836 1,824 873 (12) After-tax interest expense 203 - - -…

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