Beaumont Terminal MAY 2019 INVESTOR UPDATE 1 phillips66.com NYSE: PSX
DIVERSIFIED DOWNSTREAM COMPANY MIDSTREAM CHEMICALS REFINING MARKETING AND SPECIALTIES Integrated Midstream 50% Interest in CPChem Complex Integrated Stable, High-Return Network Refining System Location Advantaged Businesses…
CORPORATE STRATEGY GROWTH RETURNS DISTRIBUTIONS Enhancing our portfolio by Improving returns by maximizing Committed to financial strength, capturing growth opportunities earnings from existing assets disciplined capital…
EXECUTING THE STRATEGY OPERATING EXCELLENCE Safe and reliable operations Technology driven cost efficiencies GROWTH Pipelines from key shale basins to Gulf Coast Crude export capability NGL value chain transportation,…
OPERATING EXCELLENCE TOTAL RECORDABLE RATES REFINING TIER 1 PROCESS SAFETY EVENT RATE Incidents per 200,000 Hours Worked Phillips 66 CPChem DCP Midstream 1.15 1.03 0.08 0.08 Industry Average .86 0.02 0.02 0.02 .83 .79 14…
ENVIRONMENTAL, SOCIAL, GOVERNANCE INDUSTRY SAFETY METRICS Board engaged in setting company ESG strategy Incidents per 200,000 hours worked 6 Independent lead director 4 Extensive ESG engagement 2 Industry leading safety…
E N E R G Y L AN D S C AP E US OIL AND NGL PRODUCTION US OIL, NGL, CLEAN PRODUCT EXPORTS MMBD MMBD 30 10 20 5 10 0 0 12 13 14 15 16 17 18 19 20 21 22 23 12 13 14 15 16 17 18 19 20 21 22 23 Crude NGL Crude NGL Clean…
Beaumont Terminal M I D S T R E AM phillips66.com NYSE: PSX
MIDSTREAM PORTFOLIO TRANSPORTATION NGL AND OTHER DCP MIDSTREAM 21,000 miles of U.S. pipeline systems 200,000+ BPD fractionation capacity 49 natural gas processing facilities 39 product terminals 200,000 BPD LPG export capacity 6.7…
MIDSTREAM Integrated with Refining, Marketing and Chemicals ADJUSTED EBITDA B 1.9 Capital projects delivering EBITDA growth PSXP integral to Midstream strategy 1.0 1.2 1.0 Crude and NGL pipelines from key shale basins to the…
M I D S T R E AM G R O W T H P R O J E C T S Gray Oak Pipeline Sweeny fractionators Clemens Caverns Beaumont Terminal South Texas Gateway Terminal Bakken Pipeline Sand Hills Pipeline Bayou Bridge Pipeline Lake Charles…
M I D S T R E AM O R G AN I C G R O W T H EXPECTED GROSS CAPITAL OWNERSHIP PSX PROJECT COMPLETION CAPACITY (MM) (%) Beaumont Terminal expansion phase IV 1Q 2020 2.2 MMB 80 100 Sweeny fractionators 2 and 3 4Q 2020 2 x 150 MBD 1,320…
S W E E N Y H U B E X P AN S I O N 1.5 B capital expansion 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 LPGs…
PROJECTS UNDER DEVELOPMENT Liberty Pipeline (PSX) Rockies and Bakken production areas to Corpus Christi 350,000 BPD Red Oak Pipeline (PSX) Cushing to Corpus Christi, Houston, and Beaumont 400,000 BPD ACE Pipeline (PSXP) St.…
PHILLIPS 66 PARTNERS Premier MLP with strong portfolio of organic growth projects ADJUSTED EBITDA MM Strong alignment with Phillips 66 1,137 Highly integrated assets 754 Stable and predictable cash flows 471 Delivered highest…
D C P M I D S T R E AM Integrated midstream business with competitive DJ Basin 1.0 BCFD footprint and geographic diversity processing capacity One of the largest U.S. gas processors and NGL producers Mid-Continent 1.8 BCFD…
Lake Charles Refinery Cedar Bayou Ethane Cracker C H E M I C AL S phillips66.com NYSE: PSX
FEEDSTOCK ADVANTAGED CHEMICALS PORTFOLIO U.S. Gulf Coast U.S. Worldwide Net Ethylene Net Ethylene Capacity: Capacity: 5,410 kMTA 6,535 kMTA Middle East Saudi Qatar Net Ethylene Arabia Capacity: 1,125 kMTA 20…
CPCHEM PORTFOLIO Olefins and Polyolefins 11,370 kMTA North America capacity 2,510 kMTA Middle East capacity Specialties, Aromatics and Styrenics 2,255 kMTA North America capacity 1,050 kMTA Middle East capacity 16 North…
CHEMICALS CPChem has a leading position in olefins and polyolefins with ADJUSTED EBITDA a feedstock advantaged portfolio B Operating excellence focus Strong free cash flow generation 1.7 1.6 1.3 1.3 USGC petrochemical assets…
Bayway Refinery R E F I N I N G AN D M AR K E T I N G phillips66.com NYSE: PSX
ENHANCING RETURNS IN REFINING AND MARKETING Central Corridor 515 MBD West Coast Atlantic 364 MBD Basin/Europe 537 MBD Gulf Coast 24 phillips66.com NYSE: PSX As of January 1, 2019 764 MBD
REFINING AND MARKETING PORTFOLIO Refining 13 refineries in U.S. and Europe In all 5 U.S. PADDs 2,180 MBD crude capacity 35% heavy, 35% medium, 30% light crude Marketing 9,000+ global sites, including 5,600 wholesale outlets…
REFINING Complex, integrated refining system focused on safe and ADJUSTED EBITDA B reliable operations Infrastructure network enables strong market capture; access to advantaged inland crude feedstocks 5.7 Cost and capital…
REFINING PORTFOLIO COMPETITIVENESS Industry leading coking capacity and heavy crude processing DISTILLATE PRODUCTION capability % TOTAL THROUGHPUT Largest purchaser of advantaged Canadian crude oils High distillate yield 38.2%…
REFINING RETURNS Bayway Refinery FCC modernization Wood River Refinery FCC modernization Lake Charles Refinery crude flexibility Sweeny FCC upgrade Renewable fuels partnerships Sweeny Refinery SWEENY, TX 28…
RENEWABLE FUELS Partnership with Ryze Renewables Renewable diesel plant at Ferndale Refinery with Renewable Energy Group Co-processing used cooking oil at Humber Refinery Evaluating renewable diesel projects in…
MARKETING AND SPECIALTIES High-return, low capital intensity business; optimize ADJUSTED EBITDA B placement of Refining production 1.4 B Average Enhancing U.S. fuels brands; growing and re-imaging European sites 1.5 1.6 1.4…
MARKETING: ENHANCING THE BRANDS U.S. Re-imaged 2,900 sites since program inception in 2015 through 1Q19 Plan to re-image 1,800 sites in total during 2019 Industry leading technology; 5,400 sites implementing mobile pay…
EARNINGS AND CAPITAL STRUCTURE ADJUSTED EBITDA EQUITY AND DEBT B 30% 30% 27% 27% 29% 10.1 25% 26% 25% 25% 8.6 22% 27.4 27.2 26.7 5.9 4.7 23.9 23.7 1.0 15 16 17 18 1Q19 10.1 11.2 11.3 10.1 ADJUSTED RETURN ON CAPITAL…
CAPITAL ALLOCATION Disciplined capital allocation SOURCES AND USES OF CASH B Fund sustaining capital to maintain asset integrity 1 1.5 Committed to a secure, competitive and growing dividend 6.5 5.5 1-2 Investing in growth…
DISTRIBUTIONS ANNUAL DIVIDEND /share Creates shareholder value 3.10 3.50 2.45 2.73 Secure, competitive and growing dividend 2.18 12.5% increase in 2Q19 to 0.90 per quarter 15 16 17 18 19 25% CAGR with nine increases…
C AP I T AL E X P E N D I T U R E S 2019E Consolidated - 2.9 B CAPITAL EXPENDITURES AND INVESTMENTS B Phillips 66 2019E - 2.3 B 1.4 B Growth 0.9 B Sustaining 5.8 Phillips 66 Partners 2019E - 0.6 B Major JVs (CPChem, DCP and…
F I N AN C I AL F L E X I B I L I T Y SOURCES AND USES OF CASH B Maintain financial strength, strong investment- 1 grade credit rating 1.5 6.5 5.5 1-2 Pay secure, competitive, and growing dividend 1-2 1 Mid-Cycle Sust. FCF…
Lake Charles Refinery MAY 2019 INVESTOR R E F I N I N G AN D M AR K E T I N G UPDATE phillips66.com NYSE: phillips66partners.com PSX PSXP I NYSE:
P H I L L I P S 6 6 P AR T N E R S O W N E R S H I P S T R U C T U R E 100% ownership interest Phillips 66 Partners GP LLC PSXP Public (PSXP General Partner) 54% limited Common General Partner Units partner interest…
PHILLIPS 66 PARTNERS Premier MLP with strong portfolio of organic growth projects Strong alignment with Phillips 66 Highly integrated assets Maintaining stable and predictable cash flows Competitive and growing…
FINANCIAL HIGHLIGHTS Operated safely and reliably ADJUSTED EBITDA (MM) Reached 1.2 B run-rate adjusted EBITDA in 2018 1,137 754 Achieved 30% LP distribution CAGR goal in 2018 471 Focused on organic growth 285 281…
DISTRIBUTION GROWTH DISTRIBUTION / COMMON LP UNIT (CENTS) 83.5 84.5 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 22.5 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15…
P S X P O R G AN I C G R O W T H EXPECTED GROSS CAPITAL OWNERSHIP PSXP PROJECT COMPLETION CAPACITY (MM) (%) Lake Charles products pipeline 2Q 2019 50 MBD 25 100 Lake Charles isomerization unit 3Q 2019 25 MBD 200 99 Gray Oak…
GRAY OAK PIPELINE Crude oil pipeline from West Texas to Corpus Christi and Sweeny Expected in service by end of 2019 900 MBD capacity 42.25% PSXP ownership Operated by Phillips 66 45 phillips66.com NYSE:…
FINANCIAL FLEXIBILITY TOTAL RETURN SINCE IPO Investment-grade credit rating 300% PSXP +169% BBB (S&P), Baa3 (Moodys) Alerian MLP Index (19%) 250% Fund 2019 capital program with cash, debt, and selective use of ATM 200%…
Lake Charles FreeportRefinery Clipper S AF E T Y . H O N O R . C O M M I T M E N T . phillips66.com NYSE: PSX
2019 SENSITIVITIES Annual EBITDA (MM) Midstream - DCP (net to Phillips 66) 10 /Gal Increase in NGL price 6 10 /MMBtu Increase in Natural Gas price 1 1/BBL Increase in WTI price 1 Chemicals - CPChem (net to Phillips 66) 1 /Lb…
VALUE CHAIN 50 phillips66.com NYSE: PSX
WEST COAST 51 phillips66.com NYSE: PSX
GULF COAST 52 phillips66.com NYSE: PSX
MIDCONTINENT 53 phillips66.com NYSE: PSX
ATLANTIC BASIN 54 phillips66.com NYSE: PSX
C O N S O L I D AT E D D E B T AN D L I Q U I D I T Y SENIOR NOTES MATURITY PROFILE B PSX Senior Notes PSXP Senior Notes PSX Term Loan PSXP Term Loan PSXP Revolving Credit Facility PSX Revolving Credit Facility 5.0 1.1 0.5…
PHILLIPS 66 OUTLOOK 2Q 2019 Global Olefins & Polyolefins utilization Mid-90% Refining crude utilization Mid-90% Refining turnaround expenses (pre-tax) 70 MM - 90 MM Corporate & other costs (pre-tax) 210 MM - 240 MM 2019…
2019 CAPITAL BUDGET Millions of Dollars Sustaining Growth Capital Capital Capital Program Adjusted Capital Program Midstream* 185 847 1,032 Chemicals - - - Refining 512 411 923 Marketing and Specialties 64 97 161 Corporate and…
FOOTNOTES General Information disclosed is as of December 31 unless otherwise noted. Mid-Cycle CFO is defined as 2014-2017 average operating cash flow plus run-rate operating cash flow from growth projects coming online in 2017 and…
FOOTNOTES Slide 6 Industry averages are from: Phillips 66 American Fuel & Petrochemical Manufacturers (AFPM) refining data, Chevron Phillips Chemical Company LLC (CPChem) American Chemistry Council (ACC), DCP Midstream, LLC (DCP…
FOOTNOTES Slide 33 PSXP 2019 Adjusted Capital Budget excludes 303 MM of growth capital expected to be cash funded by noncontrolling interests and reflects JV-level financing to fund a portion of the Gray Oak Pipeline construction.…
N O N - G A A P R E C O N C I L I AT I O N ( S L I D E 1 2 ) Millions of Dollars 2015 2016 2017 2018 1Q 2019 Reconciliation of Midstream Pre-Tax Income to Adjusted EBITDA Midstream pre-tax income 147 402 638 1,181 316 Plus:…
N O N - G A A P R E C O N C I L I AT I O N ( S L I D E S 1 7 a n d 4 2 ) Millions of Dollars 2015 2016 2017 2018 1Q 2019 Reconciliation to Net Income Attributable to the Partnership Net income attributable to the Partnership 194 301…
N O N - G A A P R E C O N C I L I AT I O N ( S L I D E S 1 7 a n d 4 2 ) Millions of Dollars 2015 2016 2017 2018 1Q 2019 Reconciliation to Net Cash Provided by Operating Activities Net Cash Provided by Operating Activities 392 492…
N O N - G A A P R E C O N C I L I AT I O N ( S L I D E 2 2 ) Millions of Dollars 2015 2016 2017 2018 1Q 2019 Reconciliation of Chemicals Pre-Tax Income to Adjusted EBITDA Chemicals pre-tax income 1,315 839 716 1,025 227 Plus:…
N O N - G A A P R E C O N C I L I AT I O N ( S L I D E 2 6 ) Millions of Dollars 2015 2016 2017 2018 1Q 2019 Reconciliation of Refining Pre-Tax Income (Loss) to Adjusted EBITDA Refining pre-tax income (loss) 3,659 436 2,076 4,535…
N O N - G A A P R E C O N C I L I AT I O N ( S L I D E 3 0 ) Millions of Dollars 2015 2016 2017 2018 1Q 2019 Reconciliation of Marketing and Specialties Pre-Tax Income to Adjusted EBITDA Marketing and Specialties pre-tax income 1,652…
N O N - G A A P R E C O N C I L I AT I O N ( S L I D E 3 2 ) Millions of Dollars 2015 2016 2017 2018 1Q 2019 Reconciliation of Phillips 66 Net Income to Adjusted EBITDA Phillips 66 net income 4,280 1,644 5,248 5,873 270 Plus:…
N O N - G A A P R E C O N C I L I AT I O N ( S L I D E 3 2 ) Millions of Dollars 2015 2016 2017 2018 1Q 2019 Phillips 66 ROCE Numerator Net income 4,280 1,644 5,248 5,873 270 After-tax interest expense 201 220 285 398 94 GAAP ROCE…
N O N - G A A P R E C O N C I L I AT I O N ( S L I D E 3 2 ) Millions of Dollars Except as Indicated Debt-to-Capital Debt-to-Capital Ratio Total Debt Total Equity Ratio March 31, 2019 Phillips 66 Consolidated 11,298 26,745 30%…
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