Phillips 66 · NYSE:PSX
Phillips 66 — Credit Suisse 23rd Annual Energy Summit (February 2018)
25 slides from Phillips 66's conference presentation, Feb 13, 2018
Slide 1: Credit Suisse Conference
Credit Suisse Conference Greg C. Garland Chairman and CEO February 13, 2018 NYSE: PSX www.phillips66.com Lake Charles Refinery
Slide 2: Cautionary Statement
Cautionary Statement This presentation contains certain forward-looking statements. Words and phrases such as “is anticipated,” “is estimated,” “is expected,” “is planned,” “is scheduled,” “is targeted,” “believes,” “intends,” “objectives,” “projects,” “strategies” and similar expressions are used t
Slide 3: Executing Strategy
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 reimaging Distributions 30% dividend CAGR since September 2012 $10.4 B
Slide 4: Operating Excellence
Operating Excellence Total Recordable Rates Refining Environmental Metrics (Incidents per 200,000 Hours Worked) (No. of events) Industry Average ’13 ’14 ’15 ’16 ’17 317 302 279 264 240 Phillips 66 CPChem DCP Midstream 2013 2014 2015 2016 2017 Operating Costs and SG&A Refining Capacity Utilization ($
Slide 5: Environmental, Social, Governance
Environmental, Social, Governance Extensive ESG engagement Industry Safety Metrics (Incidents per 200,000 Hours Worked) 6 Board engaged in setting company ESG strategy 4 2 Record low reportable environmental events 0 Agricul., Food All Construction Prof. Petroleum Petchem. Phillips 66 Investing in f
Slide 6: U.S. Crude Oil and Gas Plant NGL Production
U.S. Crude Oil and Gas Plant NGL Production Source: I.H.S., April 2017 5
Slide 7: Midstream
Midstream 2018E Annual Year-End Run-Rate Adjusted EBITDA ($B) Platform for growth 1.8 – 2.0 Focus on NGL value chain Expand crude and products 0.6 PSX export capability PSX PSXP 2018E year-end run-rate PSXP PSXP 1.0 1.1 adjusted EBITDA $1.1 B Assets Online Growth Market Total See appendix for footno
Slide 8: Phillips 66 Partners
Phillips 66 Partners Distribution Growth (cents/unit) Funding Midstream growth Organic growth opportunities Sand Hills Pipeline expansions (TX) Bayou Bridge Pipeline extension (LA) Lake Charles Isomerization Unit (LA) 67.8 64.6 61.5 55.8 58.6 31% distribution CAGR 2013-2017 45.8 48.1 50.5 53.1 40.0
Slide 9: DCP Midstream
DCP Midstream DJ Basin Well positioned in low-cost supply basins 0.9 Bcf/d processing capacity Strong growth projects around existing footprint Sand Hills NGL Pipeline expansions to 365 MBD in 1Q 2018, 450 MBD in 2H 2018 Permian Mid-continent 1.3 Bcf/d 1.8 Bcf/d DJ Basin gathering and processing inf
Slide 10: Chemicals Outlook
Chemicals Outlook 2018E Average Ethylene Production Cost Curve Middle East ethane and North ($/Ton) America NGLs remain positioned at Asia Coal the low end of the cost curve 1,000 M.E. Naphtha Ethylene demand growth outpacing W. Europe Asia LPG N.A. Naphtha LPG W. global GDP 500 N.A. LPG M.E. LPG As
Slide 11: CPChem
CPChem USGC Petrochemicals Project 1,000 kMTA polyethylene at Old Ocean, TX Started operations 3Q 2017 1,500 kMTA ethylene at Cedar Bayou, TX Mechanical completion 4Q 2017 Commissioning 1Q 2018 Long-term mid-cycle EBITDA ~ $1.2-1.4 B Additional projects in future years Cash flow improvement expected
Slide 12: Refining
Refining Improving returns PSX Global Clean Product Yield Billings heavy crude project (2Q 2017) Ponca City yield flexibility (4Q 2017) 85.5% 84.6% 84.1% 84.4% 84.6% Wood River FCC modernization (2Q 2018) 2013 2014 2015 2016 2017 Bayway FCC modernization (2Q 2018) Lake Charles crude flexibility (2H
Slide 13: Marketing and Specialties
Marketing and Specialties Stable, high-return businesses Marketing Enhancing U.S. fuels brands 3% volume uplift at reimaged sites Adding 25-30 European sites per year Expanding brand licensing Providing ratable refinery off-take Specialties Increasing value through integration, optimization, and pro
Slide 14: Capital Allocation
Capital Allocation Maintain financial strength, strong 2015 – 2017 investment-grade credit rating Fund sustaining capital expenditures Distributions Pay a growing, secure and competitive Reinvestment dividend 60% reinvestment and 40% shareholder distributions See appendix for footnotes. 13
Slide 15: Capital Expenditures
Capital Expenditures Consolidated Capital Expenditures ($B) 2018E Consolidated – $2.3 B 5.8 Phillips 66 2018E – $1.7 B 3.8 $0.8 B Growth 2.8 $0.9 B Sustaining 2.3 1.8 1.8 Phillips 66 Partners 2018E – $0.6 B 2013 2014 2015 2016 2017 2018E PSX PSXP 2015 consolidated capital expenditures of $5.8 billio
Slide 16: Distributions
Distributions Important source of shareholder value Annual Dividend ($/share) Growing, secure, and competitive 2.73 dividend 1.89 2.18 2.45 1.33 30% CAGR with seven increases since May 2012 2013 2014 2015 2016 2017 Cumulative Distributions ($B) Committed to share repurchases 16.4 13.4 11.1 Repurchas
Slide 17: Creating Value
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 investment in higher- valued businesses generating strong returns
Slide 18: Delivering Shareholder Returns
Delivering Shareholder Returns Total Shareholder Return Integrated portfolio PSX +262% 300% Disciplined capital allocation Peers +178% 260% S&P 100 +123% 220% Returns focused 180% 140% Value-added growth 100% 60% Strong balance sheet 20% -20% Compelling investment May-12 May-13 May-14 May-15 May-16
Slide 19: Appendix
Appendix Freeport LPG Export Terminal
Slide 20: Midstream Macro Environment
Midstream Macro Environment U.S. Crude Oil Export Volume (MMBD) U.S. Clean Product Exports (MMBD) 1.0 2.5 2.0 1.5 0.5 1.0 0.5 0.0 0.0 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 U.S. LPG Export Volume (MMBD) Phillips 66 Export Capacity (MMBD) 1.2 1.5 Thousands Propane Butane 1.0 0.6
Slide 21: Footnotes
Footnotes Slide 2 Total share repurchases and exchanges include the PSPI share exchange in 2014. Dividend CAGR calculated from initial dividend of $0.20 per share in 3Q 2012 to last increase of $0.70 per share in 2Q 2017. Slide 3 Industry averages are from: Phillips 66 – American Fuel & Petrochemica
Slide 22: Footnotes
Footnotes Slide 6 Run-rate adjusted EBITDA for PSXP assets online represents the estimated run-rate view as of December 31, 2017. Run-rate adjusted EBITDA for PSX assets online represents the sum of (i) forecasted year-end 2018 EBITDA of other Midstream assets currently online and (ii) an estimate o
Slide 23: Footnotes
Footnotes Slide 15 Annual dividend reflects sum of declared quarterly dividends. 2017 reflects one quarterly dividend of $0.63 and three quarterly dividends of $0.70. Dividend CAGR calculated from initial dividend of $0.20 per share in 3Q 2012 to last increase of $0.70 per share in 2Q 2017. 2014 sha
Slide 24: Footnotes
Footnotes Forecasted and Estimated EBITDA We are unable to present reconciliations of various forecasted and estimated EBITDA included in this presentation, because certain elements of net income, including interest, depreciation and income taxes, are not reasonably available. Together, these items
Slide 25: Non-GAAP Reconciliation (slide 3)
Non-GAAP Reconciliation (slide 3) Millions of Dollars 2013 2014 2015 2016 2017 Production and operating expenses $ 4,206 $ 4,435 $ 4,294 $ 4,275 $ 4,699 Selling, general and administrative expenses 1,478 1,663 1,670 1,638 1,695 5,684 6,098 5,964 5,913 6,394 Plus: Sentinel operating expenses* 81 90 8
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