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November 2018 Investor Update – Phillips 66

Phillips 66 · Nov 9, 2018 · 63 slides

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Slides

  1. November 2018 Investor Update – Phillips 66 – slide 1
    Investor Update November 2018 NYSE: PSX www.phillips66.com Bayway Refinery, Linden, NJ
  2. November 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. November 2018 Investor Update – Phillips 66 – slide 3
    Executing Strategy Leading Operating Excellence Growth CPChem USGC petrochemicals assets Gray Oak Pipeline Sweeny Hub Beaumont Terminal Returns Refinery yield and feedstock flexibility projects U.S. Marketing re-imaging…
  4. November 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 18 317 302 279 264 242 176 Phillips 66 CPChem DCP Midstream 2013…
  5. November 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. November 2018 Investor Update – Phillips 66 – slide 6
    U.S. Crude Oil and Gas Plant NGL Production Bakken 8 6 Rockies 4 8 2 6 0 4 2012 2014 2016 2018 2020 2022 2 Midcontinent 0 8 2012 2014 2016 2018 2020 2022 6 4 Permian 2 8 0 6 2012 2014 2016 2018 2020 2022 4 2 Eagle…
  7. November 2018 Investor Update – Phillips 66 – slide 7
    Midstream Macro Environment U.S. Crude Oil Export Volume (MMBD) U.S. Clean Product Exports (MMBD) 2.0 2.5 2.0 1.5 1.5 1.0 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. November 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. November 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. November 2018 Investor Update – Phillips 66 – slide 10
    Integrated Midstream Network 10
  11. November 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. November 2018 Investor Update – Phillips 66 – slide 12
    Midstream Growth Platform for growth Sweeny Hub Gray Oak Pipeline South Texas Gateway Terminal Beaumont Terminal Sand Hills Pipeline expansion Bayou Bridge Pipeline Lake Charles Pipeline Project Lake Charles…
  13. November 2018 Investor Update – Phillips 66 – slide 13
    Sweeny Hub Expansion 1.5 B expansion of Sweeny Hub 2 x 150 MBD NGL fractionators 6 MM bbls expansion of PSXPs NGL storage capacity Y-grade NGL feedstock supply agreements with firm volume commitments secured Purified products will…
  14. November 2018 Investor Update – Phillips 66 – slide 14
    Phillips 66 Partners Distribution Growth (cents/common unit) Achieved 2018E annualized run-rate 1.1 B adjusted EBITDA in 2Q18 Organic growth opportunities 79.2 75.2 71.4 30% distribution CAGR 2013-2018 58.6 61.5 64.6 67.8…
  15. November 2018 Investor Update – Phillips 66 – slide 15
    DCP Midstream DJ Basin 0.8 BCFD Well positioned in low-cost supply basins processing capacity Strong growth projects around existing footprint Sand Hills NGL Pipeline expansions to 440 MBD in 3Q 2018, 485 MBD by the end of 2018…
  16. November 2018 Investor Update – Phillips 66 – slide 16
    Feedstock Advantaged Chemicals Portfolio Worldwide U.S. Gulf Net Ethylene Coast Capacity: 6,410 kMTA U.S. Net Ethylene Capacity: 5,285 kMTA Middle East Net Ethylene Saudi Qatar Capacity: Arabia 1,125 kMTA As of…
  17. November 2018 Investor Update – Phillips 66 – slide 17
    CPChem CPChem USGC Ethane Cracker, Cedar Bayou, TX Olefins and Polyolefins Specialties, Aromatics and Styrenics 11,245 kMTA/year North America capacity 2,710 kMTA/year North America capacity 2,510 kMTA/year Middle East capacity…
  18. November 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 M.E. Naphtha the low end of the cost curve 1,000 Asia Coal N.A. Naphtha W. Europe M.E. Asia…
  19. November 2018 Investor Update – Phillips 66 – slide 19
    Enhancing Returns in Refining and Marketing 19
  20. November 2018 Investor Update – Phillips 66 – slide 20
    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 2,100+…
  21. November 2018 Investor Update – Phillips 66 – slide 21
    Enhancing Refining Returns Improving returns projects Phillips 66 Global Clean Product Yield Wood River FCC modernization (complete) 85.5% Bayway FCC modernization (complete) 84.6% 84.1% 84.4% 84.6% 83.7% Lake Charles crude…
  22. November 2018 Investor Update – Phillips 66 – slide 22
    IMO 2020 Preparedness 2017 Distillate Production as % Total Throughput Existing PSX portfolio well positioned for IMO 2020 38.3% 37.8% 36.4% 34.4% High distillate production VLO PSX HFC MPC PF Industry leading coking capacity…
  23. November 2018 Investor Update – Phillips 66 – slide 23
    Canadian Imports 2017 Average Canadian Imports (MBD) PSX is the largest U.S. importer of Canadian crude 508 391 Averaged 508 MBD of imports in 2017 Processed Canadian crude 100 in 9 U.S. refineries 16 PSX MPC PF HFC VLO Source:…
  24. November 2018 Investor Update – Phillips 66 – slide 24
    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…
  25. November 2018 Investor Update – Phillips 66 – slide 25
    Capital Structure Equity and Debt Investment-grade credit ratings 27.4 25.8 23.9 23.7 31% PSX BBB+ / A3 22.4 22.0 27% 30% 27% PSXP BBB / Baa3 22% 28% 26% 26% 25% 22% 21% 11.3 Total liquidity, as of Sep. 30, 2018 10.1 10.1…
  26. November 2018 Investor Update – Phillips 66 – slide 26
    Financial Flexibility 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…
  27. November 2018 Investor Update – Phillips 66 – slide 27
    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…
  28. November 2018 Investor Update – Phillips 66 – slide 28
    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 in 2Q 2018 to 0.80 per quarter 2013 2014 2015 2016 2017 2018E 27%…
  29. November 2018 Investor Update – Phillips 66 – slide 29
    Creating Value Mid-Cycle Incremental Run-Rate Adjusted EBITDA 1.5 B long-term expected (B) adjusted EBITDA growth from projects coming online 2017-2018 1.5 Shifted from heavy-investment period to increasing net cash generation…
  30. November 2018 Investor Update – Phillips 66 – slide 30
    Delivering Shareholder Returns Total Shareholder Return Integrated portfolio PSX +271% 380% 340% Disciplined capital allocation Peers +154% 300% S&P 100 +119% 260% Returns focused 220% 180% Value-added growth 140% 100% Strong…
  31. November 2018 Investor Update – Phillips 66 – slide 31
    Investor Update November 2018 NYSE: PSXP www.phillips66partners.com
  32. November 2018 Investor Update – Phillips 66 – slide 32
    Phillips 66 Partners Ownership Structure (NYSE: PSX) 100% ownership interest PSXP Public Common Phillips 66 Partners GP LLC Unitholders 54% limited partner (PSXP General Partner) interest General Partner Units IDRs 44%…
  33. November 2018 Investor Update – Phillips 66 – slide 33
    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 33
  34. November 2018 Investor Update – Phillips 66 – slide 34
    Phillips 66 Partners Pecan Grove Marine Dock 34
  35. November 2018 Investor Update – Phillips 66 – slide 35
    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…
  36. November 2018 Investor Update – Phillips 66 – slide 36
    Distribution Growth Distribution / Common LP Unit (cents) 75.2 79.2 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 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16…
  37. November 2018 Investor Update – Phillips 66 – slide 37
    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…
  38. November 2018 Investor Update – Phillips 66 – slide 38
    Gray Oak Pipeline Crude oil pipeline from West Texas to Corpus Christi and Sweeny/Freeport markets 900 MBD pipeline capacity 42.25% PSXP ownership* Operated by Phillips 66 Expected in service by end of 2019 *PSXP equity of…
  39. November 2018 Investor Update – Phillips 66 – slide 39
    PSXP Organic Growth Completion Gross Capital PSXP Equity Project Date (MM) (%) Sacagawea Gas Pipeline 3Q 2018 60 49.5 Sand Hills Pipeline expansion 4Q 2018 450 33.3 Bayou Bridge Pipeline (segments I and II) 4Q 2018 750 40 Lake Charles…
  40. November 2018 Investor Update – Phillips 66 – slide 40
    PSXP Debt Profile Senior Notes Maturity Profile (B) PSXP Revolving Credit Facility 0.8 0.6 0.5 0.5 0.5 0.5 0.3 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 Senior Notes (MM) 2.9 B Total Debt…
  41. November 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. November 2018 Investor Update – Phillips 66 – slide 42
    Total Return Since IPO PSXP +177% 300% Closed 70 MM Closed 1.3 B Alerian MLP Index -15% acquisition acquisition Closed 2.4 B 250% acquisition Closed 775 MM acquisition 200% Closed 700 MM acquisition 150% Closed 340 100% MM…
  43. November 2018 Investor Update – Phillips 66 – slide 43
    Appendix Freeport LPG Export Terminal
  44. November 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. November 2018 Investor Update – Phillips 66 – slide 45
    Value Chain 45
  46. November 2018 Investor Update – Phillips 66 – slide 46
    West Coast 46
  47. November 2018 Investor Update – Phillips 66 – slide 47
    Midcontinent 47
  48. November 2018 Investor Update – Phillips 66 – slide 48
    Western Gulf 48
  49. November 2018 Investor Update – Phillips 66 – slide 49
    Eastern Gulf 49
  50. November 2018 Investor Update – Phillips 66 – slide 50
    Atlantic Basin 50
  51. November 2018 Investor Update – Phillips 66 – slide 51
    20123Q 2018 Average Adjusted ROCE 30% M&S Chemicals 25% 15% 19% Refining PSX Total 12% 13% Midstream 7% Corporate 0% (9%) -15% 0 2 4 6 8 10 12 14 16 18 20 22 24 26 2832 30 32 34 Average Capital Employed (B) 51
  52. November 2018 Investor Update – Phillips 66 – slide 52
    Consolidated Debt and Liquidity Senior Notes Maturity Profile (B) PSX Senior Notes PSXP Senior Notes PSX Term Loan 5.0 0.8 0.8 2.0 0.5 1.5 1.7 0.8 1.0 0.3 0.5 0.5 0.5 0.5 0.6 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036…
  53. November 2018 Investor Update – Phillips 66 – slide 53
    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…
  54. November 2018 Investor Update – Phillips 66 – slide 54
    Phillips 66 Outlook 4Q 2018 Global Olefins & Polyolefins utilization Mid-90% Refining crude utilization Mid-90% Refining turnaround expenses (pre-tax) 110 MM - 130 MM Corporate & other costs (after-tax) 170 MM - 190 MM 2018…
  55. November 2018 Investor Update – Phillips 66 – slide 55
    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…
  56. November 2018 Investor Update – Phillips 66 – slide 56
    2,701 Total U.S. Coking Capacity (MBD) 400 350 350 328 304 300 281 250 200 177 176 175 150 146 150 131 100 90 65 54 51 50 41 39 36 36 29 21 18 6 0 Source: 2018 Oil and Gas Journal. Phillips 66 includes 50% WRB. Marathon…
  57. November 2018 Investor Update – Phillips 66 – slide 57
    5,034 Total Global Coking Capacity (MBD) 600 485 500 423 400 328 304 300 281 263 263 198 191 200 177 155 150 146 125 115 109 92 90 84 79 100 72 65 61 56 54 51 50 43 41 40 39 39 37 36 36 36 33 30 29 29 26 26 26 25 0…
  58. November 2018 Investor Update – Phillips 66 – slide 58
    Footnotes 3Q 2018 YTD 3Q 2018 is as of September 30, 2018, or the nine-month period ended September 30, 2018, as applicable; except as otherwise noted. Forecasted and Estimated EBITDA and Maps We are unable to present reconciliations of…
  59. November 2018 Investor Update – Phillips 66 – slide 59
    Non-GAAP Reconciliation (slide 4) Millions of Dollars 2013 2014 2015 2016 2017 3Q 2018 YTD Production and operating expenses 4,206 4,435 4,294 4,275 4,699 3,595 Selling, general and administrative expenses 1,478 1,663 1,670 1,638…
  60. November 2018 Investor Update – Phillips 66 – slide 60
    Non-GAAP Reconciliation (slide 24) Millions of Dollars 3Q 2018 2013 2014 2015 2016 2017 YTD Reconciliation of Marketing and Specialties Net Income to Adjusted EBITDA Marketing and Specialties net income 894 1,034 1,187 891 686 739…
  61. November 2018 Investor Update – Phillips 66 – slide 61
    PSXP Non-GAAP Reconciliation (Slides 14 and 35) Millions of Dollars 2013 2014 2015 2016 2017 2Q 2018 Reconciliation to Net Income Attributable to the Partnership Net income attributable to the Partnership 29 116 194 301 461 186…
  62. November 2018 Investor Update – Phillips 66 – slide 62
    PSXP Non-GAAP Reconciliation (Slides 14 and 35) Millions of Dollars 2013 2014 2015 2016 2017 2Q 2018 Reconciliation to Net Cash Provided by Operating Activities Net cash provided by operating activities 199 296 392 492 724 226 Plus:…
  63. November 2018 Investor Update – Phillips 66 – slide 63
    Non-GAAP Reconciliations (Slide 51) Millions of Dollars Average 2012 - 3Q 2018 Phillips 66** Midstream Chemicals Refining M&S Corporate Phillips 66 ROCE Numerator Net Income 4,059 382 847 1,908 885 (84) After-tax interest expense…

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