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CREDIT SUISSE ENERGY SUMMIT – Phillips 66

Phillips 66 · Feb 7, 2014 · 46 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. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 1
    PHILLIPS 66 2014 CREDIT SUISSE ENERGY SUMMIT Greg Garland, Chairman and CEO February 12, 2014
  2. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 2
    STRATEGY Operating excellence Growth Returns Distributions High-performing organization 3
  3. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 3
    OPERATING EXCELLENCE Total Recordable Rates U.S. Refining Emissions (Lb/MBbl) (Incidents per 200,000 Hours Worked) (SOx, NOx, and Particulate Matter) 250 2.5 200 2 150 1.5 2009 2012 2013 2011 2010 1 100 0.5 50 0…
  4. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 4
    SEGMENT STRATEGY Midstream: Growth Chemicals: Growth Build on integrated Transportation system Grow CPChem Utilize Phillips 66 Partners LP as a growth vehicle Advance olefins and polyolefins projects Expand DCP Capitalize on domestic…
  5. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 5
    HIGH-PERFORMING BUSINESSES Midstream Chemicals Refining and M&S ROCE ROCE ROCE PSX 15% PSX 26% PSX 17% LYB 23% MPC 15% OKE 8% WLK 21% CVX 8% EPD 7% XOM Chem 19% VLO 8% KMP 6% DOW 9% TSO 6% 2013 Sept Annualized ROCE…
  6. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 6
    MIDSTREAM MACRO ENVIRONMENT U.S. NGL Production (MMBD) 6 Growing domestic NGL production is History Forecast reshaping U.S. midstream business 5 4 Wide range of consultant forecasts 3 2 Infrastructure needed to move new…
  7. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 7
    CHEMICALS MACRO ENVIRONMENT U.S. Ethane Production and Demand 2013 Ethylene Production Cost Curve 3,000 (MBD) (/ton) History Forecast High Production 1,500 2,500 Western Europe 1,000 2,000 Low Production NE Asia SE Asia 1,500…
  8. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 8
    REFINING MACRO ENVIRONMENT WTI - LLS LLS - Brent Maya - LLS (Nominal /bbl) (Nominal /bbl) (Nominal /bbl) 5 5 5 0 0 0 2009 2013 avg: -11.25/bbl -5 -5 2009 2013 avg: -5 2009 2013 avg: 1.18/bbl -10.04/bbl -10 -10 -10 -15 -15 -15…
  9. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 9
    REFINING MACRO ENVIRONMENT Total U.S. Waterborne Crude Imports (MMBD) U.S. tight oil and Canadian Heavy Sweet Heavy Sour production are displacing imports Light/Medium Sweet Light/Medium Sour 10 Most grades of U.S. waterborne 7.4 8…
  10. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 10
    MIDSTREAM GROWTH Build on integrated Transportation system Utilize Phillips 66 Partners LP as a growth vehicle Expand DCP Grow NGL Operations MLP. Pecan Grove Crude Terminal, Carlyss, LA. 11
  11. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 11
    TRANSPORTATION Crude rail cars Jones Act ships Unit train crude unloading facility projects Clean products export facility projects Terminal butane blending Re-commission idle pipelines New refinery storage Jones Act tanker…
  12. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 12
    PHILLIPS 66 PARTNERS LP Strategic relationship with PSX Stable and predictable cash flows Significant growth potential Low cost capital source Financial flexibility 13
  13. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 13
    DCP MIDSTREAM Gathering and Processing 2015+ NGL Pipelines Goliad Gas Plant Sand Hills 200 MMCFD 720 miles, 200 -- 350 MBD Granite Wash Gathering System Expansion Southern Hills 140 MMCFD 800 miles, 175 MBD National Helium Gas…
  14. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 14
    NGL OPERATIONS Sand Hills and Southern Hills startup Butane and butylene storage hub Sweeny fractionator and pipelines Freeport export terminal and de-ethanizer Clemens salt dome storage Sand Hills Pipeline. Metering…
  15. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 15
    MIDSTREAM GROWTH 2012 2013 2014 2015 2016 2017+ Capital Program (B) G&P in Execution 2.0 DCP G&P Expansions 1.5 New pipelines 1.0 Sand Hills and Southern Hills pipelines NGL Ops and Transportation Rail Cars 0.5…
  16. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 16
    CHEMICALS GROWTH Grow CPChem Advance olefins and polyolefins projects Capitalize on domestic feedstock advantage 17
  17. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 17
    CHEMICALS FEEDSTOCK ADVANTAGE Worldwide Ethylene Capacity Portfolio concentrated in 25 (Billion Lbs) advantaged feedstock regions Other 20 U.S. 100% light feedstock based M.E. region N.A. light feedstock 15 Leading Middle East…
  18. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 18
    CHEMICALS ADVANCING OLEFINS AND POLYOLEFINS PROJECTS 1-Hexene Unit Capacity increase 25% from 2013 to 2017 Sweeny Ethylene Furnace Estimated project spending 6.5 -- 7.0 B NAO Expansion Additional EBITDA US Gulf Coast 1.3 --…
  19. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 19
    CHEMICALS EXECUTING GROWTH 2012 2013 2014 2015 2016 2017+ Capital Program (B) 1.2 1-Hexene Unit 250 kMTA Sweeny Ethylene 0.8 Furnace 90 kMTA 0.4 USGC Petrochemicals 1,500 kMTA (ethylene), 1,000 kMTA (polyethylene)…
  20. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 20
    REFINING ENHANCE RETURNS Process more advantaged crudes Expand export capability Increase yields Decrease costs Optimize portfolio San Francisco Refinery, Rodeo Facility. San Francisco, California. 21
  21. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 21
    REFINING DIVERSIFIED PORTFOLIO Western / Pacific 440 MBD Central Region 475 MBD Gulf Coast 733 MBD Atlantic Basin / Europe 588 MBD FD Ireland BI HU WG BW United SF Kingdom WR LA PC Germany BG MI Malaysia LC AL SW…
  22. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 22
    REFINING ADVANTAGED CRUDE U.S. Refining (MBD) Brent Other Light/Medium Heavy Canadian WTI/WTS Current 3+ Years See appendix for footnotes. 23
  23. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 23
    REFINING ENHANCE RETURNS Domestic Exports (MBD) 500 Increase product placement optionality 410 West West Capture global demand growth 285 West Gulf 180 Maintain high utilization rates Gulf Gulf 100 Distillate Distillate East…
  24. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 24
    REFINING ENHANCE RETURNS Adjusted ROCE Capital Program (%) (B) 2.0 30% 20% 1.0 10% 0% 0.0 2010 2011 2012 2013 2010 2011 2012 2013 2014E Refining WRB See appendix for footnotes. 25
  25. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 25
    MARKETING AND SPECIALTIES SELECTIVE GROWTH Expand European Retail Marketing Grow Lubricants Ensure refinery pull-through Berlin, Germany 26
  26. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 26
    FINANCIAL SUMMARY Adjusted EBITDA and ROCE (B) 22% Disciplined capital allocation Midstream Chemicals 9.0 Marketing & Specialties 14% 14% Refining Enhanced financial flexibility Corporate 6.7 6.4 ROCE 6% Growing shareholder…
  27. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 27
    CAPITAL STRUCTURE 30% 28% 25% 25% 23% 20% - 30% 22% 22% 21.4 21.7 22.0 22.4 20.6 20.8 19.0 8.0 8.0 7.0 7.0 6.5 6.2 6.2 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013 3Q 2013 4Q 2013 Equity B Debt B Debt to Capital 28
  28. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 28
    TOTAL CAPITAL PROGRAM B 5 Midstream DCP Refining CPChem 4 Marketing & Specialties WRB Corporate 3 2 1 0 2012 2013 2014E 2012 2013 2014E 2012 2013 2014E Phillips 66 Consolidated Selected Joint Ventures Total See appendix…
  29. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 29
    SHAREHOLDER DISTRIBUTIONS Distributions Regular dividends (B) 4.0 Secure Growing Dividends 3.0 Competitive Share 2.0 Repurchases Share repurchase Immediate EPS growth 1.0 Below intrinsic value 0.0 Announced 5 B in buybacks…
  30. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 30
    A PROMISING FUTURE Operating excellence Growth Returns Distributions High-performing organization 31
  31. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 31
    Save the date: 2014 Phillips 66 Analyst meeting April 10, 2014 New York, NY DCP Duke Energy Gas Plant, Colorado INSTITUTIONAL INVESTORS CONTACT Rosy Zuklic Manager, Investor Relations Rosy.Zuklicp66.com 832-765-2297
  32. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 32
    2014 SENSITIVITIES Net Income MM Midstream 1/Gal Increase in NGL price 4 10/MMBtu Increase in Natural Gas price 2 1/BBL Increase in WTI price 2 Chemicals 1/Lb Increase in Olefins Chain Margin (Ethylene, Polyethylene, NAO) 35…
  33. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 33
    NON-GAAP RECONCILIATIONS ADJUSTED EARNINGS SLIDE 6 Millions of Dollars 2013 2012 2011 2010 2009 Year Year Year Year Year Midstream Earnings (loss) 469 53 2,149 386 386 Adjustments: Net (gain) loss on asset sales - - (1,618) -…
  34. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 34
    NON-GAAP RECONCILIATIONS ADJUSTED EARNINGS SLIDE 6 Millions of Dollars 2013 2012 2011 2010 2009 Year Year Year Year Year Refining Earnings (loss) 1,851 3,217 1,529 (545) (536) Adjustments: Net (gain) loss on asset sales - (104) 96…
  35. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 35
    NON-GAAP RECONCILIATIONS 2013 ROCE SLIDE 7 Refining and Midstream Chemicals September 30, 2013 YTD M&S Numerator (MM) Net Income 358 725 2,118 After-tax interest expense - - - GAAP ROCE earnings 358 725 2,118 Special Items - -…
  36. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 36
    NON-GAAP RECONCILIATIONS CPCHEM EBITDA SLIDE 20 Incremental Project Earnings Projections EBITDA Reconcilation to Net Income - MM Estimated incremental net income (CPChem View) Low High Estimated incremental net income 1,000…
  37. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 37
    NON-GAAP RECONCILIATIONS REFINING ROCE SLIDE 26 Millions of Dollars Except as Indicated 2013 2012 2011 2010 Year Year Year Year Refining - ROCE Numerator Net Income 1,851 3,217 1,529 (545) After-tax interest expense - - - - GAAP…
  38. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 38
    NON-GAAP RECONCILIATIONS ROCE SLIDE 28 Millions of Dollars Except as Indicated 2013 2012 2011 2010 2009 Year Year Year Year Year Phillips 66 - ROCE Numerator Net Income 3,743 4,131 4,780 740 479 After-tax interest expense 178 160…
  39. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 39
    NON-GAAP RECONCILIATIONS ADJUSTED EBITDA SLIDE 28 Millions of Dollars 2013 2012 2011 2010 2009 Year Year Year Year Year Phillips 66 Net Income 3,743 4,131 4,780 740 479 Less: Income from discontinued operations 61 48 43 30 19…
  40. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 40
    NON-GAAP RECONCILIATIONS ADJUSTED EBITDA SLIDE 28 Millions of Dollars 2013 2012 2011 2010 2009 Year Year Year Year Year Midstream Net Income 486 60 2,154 391 389 Income taxes 265 29 454 186 205 Net interest expense - - - - -…
  41. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 41
    NON-GAAP RECONCILIATIONS ADJUSTED EBITDA SLIDE 28 Millions of Dollars 2013 2012 2011 2010 2009 Year Year Year Year Year Chemicals Net Income 986 823 716 486 228 Income taxes 375 366 252 194 67 EBITDA 1,361 1,189 968 680 295…
  42. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 42
    NON-GAAP RECONCILIATIONS ADJUSTED EBITDA SLIDE 28 Millions of Dollars 2013 2012 2011 2010 2009 Year Year Year Year Year Refining Net Income 1,851 3,217 1,529 (545) (536) Income taxes 1,091 2,067 902 (56) (286) Net interest…
  43. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 43
    NON-GAAP RECONCILIATIONS ADJUSTED EBITDA SLIDE 28 Millions of Dollars 2013 2012 2011 2010 2009 Year Year Year Year Year Marketing & Specialities Net Income 790 417 530 537 519 Income taxes 376 250 311 331 446 Net interest expense…
  44. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 44
    NON-GAAP RECONCILIATIONS ADJUSTED EBITDA SLIDE 28 Millions of Dollars 2013 2012 2011 2010 2009 Year Year Year Year Year Corporate Net Income (431) (434) (192) (159) (140) Income taxes (263) (239) (97) (93) (75) Net interest…
  45. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 45
    NON-GAAP RECONCILIATIONS SWEENY FRAC AND EXPORT EBITDA Millions of Dollars First Year Sweeny Fractionator & Export Facility Estimated net income 190 Estimated income taxes 117 Estimated net interest expense 5 Estimated…
  46. CREDIT SUISSE ENERGY SUMMIT – Phillips 66 – slide 46
    NON-GAAP RECONCILIATIONS CPCHEM EBITDA Millions of Dollars 2012 Year CPChem Net Income 2,403 Income taxes 67 Net interest expense 9 Depreciation and amortization 356 CPChem EBITDA 2,835 Adjustments* 252 Adjusted CPChem…

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