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August 2019 Investor Update – Phillips 66

Phillips 66 · Aug 7, 2019 · 58 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. August 2019 Investor Update – Phillips 66 – slide 1
    Freeport Terminal LPG Facility FREEPORT, TX AUGUST 2019 INVESTOR UPDATE 1 phillips66.com NYSE: PSX 1
  2. August 2019 Investor Update – Phillips 66 – slide 2
    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…
  3. August 2019 Investor Update – Phillips 66 – slide 3
    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…
  4. August 2019 Investor Update – Phillips 66 – slide 4
    EXECUTING THE STRATEGY OPERATING EXCELLENCE Safe and reliable operations Technology driven cost efficiencies Beaumont Terminal NEDERLAND, TX GROWTH Pipelines from key shale basins to the USGC Crude export capability NGL value…
  5. August 2019 Investor Update – Phillips 66 – slide 5
    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 0.07 Industry Average .86 0.02 0.02 0.02 .83…
  6. August 2019 Investor Update – Phillips 66 – slide 6
    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…
  7. August 2019 Investor Update – Phillips 66 – slide 7
    ENERGY LANDSCAPE US OIL AND NGL PRODUCTION US OIL, NGL, CLEAN PRODUCT EXPORTS MMBD MMBD 30 15 20 10 10 5 0 0 12 13 14 15 16 17 18 19 20 21 22 23 24 25 12 13 14 15 16 17 18 19 20 21 22 23 Crude NGL Crude NGL Clean…
  8. August 2019 Investor Update – Phillips 66 – slide 8
    Beaumont Terminal MIDSTREAM phillips66.com NYSE: PSX 9
  9. August 2019 Investor Update – Phillips 66 – slide 9
    GROWING OUR INTEGRATED PORTFOLIO phillips66.com NYSE: PSX 10
  10. August 2019 Investor Update – Phillips 66 – slide 10
    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…
  11. August 2019 Investor Update – Phillips 66 – slide 11
    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 1.1 1.0 Crude and NGL pipelines from key shale basins to…
  12. August 2019 Investor Update – Phillips 66 – slide 12
    MIDSTREAM GROWTH PROJECTS Gray Oak Pipeline Red Oak Pipeline Liberty Pipeline Sweeny fractionators Clemens Caverns C2G Pipeline Beaumont Terminal South Texas Gateway Terminal Bakken Pipeline phillips66.com NYSE:…
  13. August 2019 Investor Update – Phillips 66 – slide 13
    MIDSTREAM ORGANIC GROWTH 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 1,320 100 Sweeny…
  14. August 2019 Investor Update – Phillips 66 – slide 14
    SWEENY HUB EXPANSION Pasadena Terminal PetChem Market Access to key demand centers including Freeport, Mont Mont Belvieu Belvieu and Corpus Christi Hub C5+ Ethane All Products Sand Hills & Other Y-Grade NGL LPG Secured…
  15. August 2019 Investor Update – Phillips 66 – slide 15
    LIBERTY AND RED OAK PIPELINES Liberty Pipeline Crude oil pipeline from the Rockies and Bakken to Cushing, Oklahoma Initial service expected by early 2021 24-inch pipeline 50% PSX ownership Red Oak Pipeline Crude oil…
  16. August 2019 Investor Update – Phillips 66 – slide 16
    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 600 471 Highest…
  17. August 2019 Investor Update – Phillips 66 – slide 17
    DCP MIDSTREAM 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 Balanced…
  18. August 2019 Investor Update – Phillips 66 – slide 18
    Lake Charles Refinery Cedar Bayou Ethane Cracker CHEMICALS phillips66.com NYSE: PSX 19
  19. August 2019 Investor Update – Phillips 66 – slide 19
    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: 20 1,125 kMTA…
  20. August 2019 Investor Update – Phillips 66 – slide 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…
  21. August 2019 Investor Update – Phillips 66 – slide 21
    CHEMICALS CPChem has a leading position in olefins and polyolefins with a feedstock advantaged portfolio ADJUSTED EBITDA B Operating excellence focus Strong free cash flow generation 1.7 1.6 USGC petrochemical assets operating…
  22. August 2019 Investor Update – Phillips 66 – slide 22
    Bayway Refinery REFINING AND MARKETING phillips66.com NYSE: PSX 23
  23. August 2019 Investor Update – Phillips 66 – slide 23
    ENHANCING RETURNS IN REFINING AND MARKETING Central Corridor 515 MBD West Coast Atlantic 364 MBD Basin/Europe 537 MBD 24 Gulf Coast 24 phillips66.com NYSE: PSX As of January 1, 2019 764 MBD
  24. August 2019 Investor Update – Phillips 66 – slide 24
    REFINING AND MARKETING PORTFOLIO Refining 13 refineries in U.S. and Europe In all 5 U.S. PADDs 2,180 MBD crude capacity 33% heavy, 33% medium, 33% light crude Marketing 9,000+ global sites, including 5,600 wholesale outlets…
  25. August 2019 Investor Update – Phillips 66 – slide 25
    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…
  26. August 2019 Investor Update – Phillips 66 – slide 26
    REFINING PORTFOLIO COMPETITIVENESS DISTILLATE PRODUCTION High distillate yield % TOTAL THROUGHPUT Industry leading coking capacity and 38.2% 37.9% 37.0% 34.0% 32.0% heavy crude processing capability PSX Comparison is to…
  27. August 2019 Investor Update – Phillips 66 – slide 27
    REFINING RETURNS Bayway Refinery FCC modernization (2Q18) Wood River Refinery FCC modernization (2Q18) Lake Charles Refinery crude flexibility (4Q18) Sweeny FCC upgrade (2Q20) Sweeny Refinery SWEENY, TX…
  28. August 2019 Investor Update – Phillips 66 – slide 28
    REFINING RETURN PROJECTS Borger diesel recovery (3Q19) Adds 25 MBD distillate production Humber diesel yield improvement (3Q19) San Francisco coker feed segregation (4Q19) Reduces HSFO production by 35 MBD Wood River crude…
  29. August 2019 Investor Update – Phillips 66 – slide 29
    RENEWABLE DIESEL Leverage existing infrastructure, supply network and capabilities Co-processing used cooking oil at Humber Refinery Partnership with Ryze Renewables Renewable diesel plant at Ferndale Refinery with…
  30. August 2019 Investor Update – Phillips 66 – slide 30
    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…
  31. August 2019 Investor Update – Phillips 66 – slide 31
    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 27.3 5.9 4.7 3.4 23.9 23.7 15 16 17 18 1H19 10.1 11.2 11.4 10.1 ADJUSTED RETURN ON CAPITAL…
  32. August 2019 Investor Update – Phillips 66 – slide 32
    DISCIPLINED CAPITAL ALLOCATION Fund sustaining capital to maintain asset integrity SOURCES AND USES OF CASH B 1 Committed to a secure, competitive and growing dividend 1.6 Investing in growth projects with attractive returns…
  33. August 2019 Investor Update – Phillips 66 – slide 33
    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…
  34. August 2019 Investor Update – Phillips 66 – slide 34
    CAPITAL EXPENDITURES 2019B Consolidated - 2.9 B CAPITAL EXPENDITURES AND INVESTMENTS B Phillips 66 2019B - 2.3 B 1.4 B Growth 0.9 B Sustaining 5.8 Phillips 66 Partners 2019B - 0.6 B Major JVs (CPChem, DCP and WRB) are…
  35. August 2019 Investor Update – Phillips 66 – slide 35
    FINANCIAL FLEXIBILITY SOURCES AND USES OF CASH B 1 Maintain financial strength, strong investment- 1.6 grade credit rating 6.5 5.5 1.5 - 2.5 Pay secure, competitive, and growing dividend 1.5 - 2.5 Mid-Cycle Sust. FCF…
  36. August 2019 Investor Update – Phillips 66 – slide 36
    TOTAL SHAREHOLDER RETURN 340% PSX +280% 300% Peers +143% 260% S&P 100 +143% 220% 180% 140% 100% 60% 20% -20% May-12 May-13 May-14 May-15 May-16 May-17 May-18 Jul-19 May-19 phillips66.com NYSE: PSX…
  37. August 2019 Investor Update – Phillips 66 – slide 37
    Lake Charles Refinery AUGUST 2019 INVESTOR REFINING AND MARKETING UPDATE phillips66.com NYSE: phillips66partners.com PSX PSXP I NYSE: 38
  38. August 2019 Investor Update – Phillips 66 – slide 38
    PHILLIPS 66 PARTNERS OWNERSHIP STRUCTURE PSXP Public Non-economic general Common partner interest and 75% Unitholders limited partner interest 25% limited partner interest (NYSE: PSXP) Operating Subsidiaries…
  39. August 2019 Investor Update – Phillips 66 – slide 39
    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…
  40. August 2019 Investor Update – Phillips 66 – slide 40
    PHILLIPS 66 PARTNERS 41 phillips66.com NYSE: phillips66partners.com PSX PSXP I NYSE: 41
  41. August 2019 Investor Update – Phillips 66 – slide 41
    HIGHLIGHTS Operated safely and reliably ADJUSTED EBITDA (MM) Reached 1.3 B run-rate adjusted EBITDA in 2Q19 1,137 754 Focused on organic growth with strong financial position 600 471 Progressing construction Gray Oak Pipeline…
  42. August 2019 Investor Update – Phillips 66 – slide 42
    DISTRIBUTION GROWTH DISTRIBUTION / COMMON LP UNIT (CENTS) 83.5 84.5 85.5 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…
  43. August 2019 Investor Update – Phillips 66 – slide 43
    PSXP ORGANIC GROWTH EXPECTED GROSS CAPITAL OWNERSHIP PSXP PROJECT COMPLETION CAPACITY (MM) (%) Lake Charles products pipeline Completed 50 MBD 25 100 Lake Charles isomerization unit Completed 25 MBD 200 99 Gray Oak Pipeline 4Q…
  44. August 2019 Investor Update – Phillips 66 – slide 44
    PSXP GRAY OAK PIPELINE / SOUTH TEXAS GATEWAY TERMINAL Gray Oak Pipeline Crude oil pipeline from the Permian and Eagle Ford to the Texas Gulf Coast Expected in service 4Q 2019 900 MBD crude capacity 42.25% PSXP ownership…
  45. August 2019 Investor Update – Phillips 66 – slide 45
    PSXP DEBT PROFILE DEBT MATURITY PROFILE B PSXP Revolving Credit Facility PSXP Term Loan 0.4 PSXP Bonds 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…
  46. August 2019 Investor Update – Phillips 66 – slide 46
    FINANCIAL FLEXIBILITY TOTAL RETURN SINCE IPO Investment-grade credit rating 300% PSXP +188% BBB (S&P), Baa3 (Moodys) Alerian MLP Index (18%) 250% Fund 2019 capital program with cash, debt, and selective use of ATM 200%…
  47. August 2019 Investor Update – Phillips 66 – slide 47
    S A F E T Y. H O N O R . C O M M I T M E N T. Freeport Terminal LPG Facility FREEPORT, TX phillips66.com NYSE: PSX 48
  48. August 2019 Investor Update – Phillips 66 – slide 48
    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…
  49. August 2019 Investor Update – Phillips 66 – slide 49
    VALUE CHAIN 50 phillips66.com NYSE: PSX 50
  50. August 2019 Investor Update – Phillips 66 – slide 50
    WEST COAST 51 phillips66.com NYSE: PSX 51
  51. August 2019 Investor Update – Phillips 66 – slide 51
    GULF COAST 52 phillips66.com NYSE: PSX 52
  52. August 2019 Investor Update – Phillips 66 – slide 52
    MIDCONTINENT 53 phillips66.com NYSE: PSX 53
  53. August 2019 Investor Update – Phillips 66 – slide 53
    ATLANTIC BASIN 54 phillips66.com NYSE: PSX 54
  54. August 2019 Investor Update – Phillips 66 – slide 54
    CONSOLIDATED DEBT AND LIQUIDITY DEBT MATURITY PROFILE B PSX Senior Notes PSXP Senior Notes PSX Term Loan PSXP Term Loan PSXP Revolving Credit Facility PSX Revolving Credit Facility 1.2 5.0 2.0 0.5 1.5 1.7 0.8 0.5 0.5 0.8…
  55. August 2019 Investor Update – Phillips 66 – slide 55
    PHILLIPS 66 OUTLOOK 3Q 2019 Global Olefins & Polyolefins utilization Mid-90% Refining crude utilization Mid-90% Refining turnaround expenses (pre-tax) 150 MM - 180 MM Corporate & other costs (pre-tax) 210 MM - 240 MM 2019…
  56. August 2019 Investor Update – Phillips 66 – slide 56
    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…
  57. August 2019 Investor Update – Phillips 66 – slide 57
    COKING CAPACITY 2,695 TOTAL U.S. COKING CAPACITY MBD 346 335 304 281 177 176 163 150 146 131 90 65 54 51 41 39 36 36 29 23 18 6 5,483 TOTAL GLOBAL COKING CAPACITY MBD 465 420 335 304 281 263 252 237 198 191 177 155…
  58. August 2019 Investor Update – Phillips 66 – slide 58
    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…

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