Phillips 66 · NYSE:PSX
Phillips 66 — Investor Presentation (November 2023)
52 slides from Phillips 66's investor presentation, Nov 27, 2023
Slide 1: Investor Update November 2023
PHILLIPS PROVIDING ENERGY. IMPROVING LIVES. Investor Update bn NOVEMBER 2023
Slide 2: Cautionary Statement
a Cautionary Statement This presentation contains forward-looking statements within the meaning of the federal securities laws. Words such as “anticipated,’ ‘scheduled,” “targeted,” “believe,” “continue, “would,” “objective,” “goal,” “project,” “efforts,” “strategies” and similar expressions that co
Slide 3: Updated Commitments to Shareholders
Updated Commitments to Shareholders Raising the Bar $4B increasing mid-cycle target adjusted EBITDA by 2025 40% above 2022 mid-cycle $1.4 B increasing business transformation savings target from $1B Increasing Shareholder Distributions $13-15 B new range for shareholder distributions between 2H22 an
Slide 4: Integrated and Diversified Energy Company
Integrated and Diversified Energy Company Enabling Long-Term Value Creation and Positioning for the Future Mission Our Integrated Downstream Participation Providing Energy. Improving Lives. Vision Be the leading integrated downstream energy provider. Values Safety. Honor. Commitment. Our Energy in A
Slide 5: Enhanced Strategic Priorities
Enhanced Strategic Priorities <o> Deliver Shareholder Returns Original Commitments November 2022 Increased Commitments October 2023 $10 B - $12 B shareholder distributions by year-end 2024 $13 B - $15 B shareholder distributions by year-end 2024 (25-30% of market capitalization) [ Improve Refining P
Slide 6: Raising Shareholder Distributions & Refining Performance
— Raising Shareholder Distributions & Refining Performance Cumulative Distributions to Shareholders Since July 2022 ($B) Refining Crude Capacity Utilization vs. Industry Average $15 10% $13 8% Pre-COVID Post Investor Day outpaced others Commitments 10) 6% -—--= >50% oc ~. ee istribout a _ ona call i
Slide 7: Business Transformation
| Business Transformation Cost Reductions ($MM) Increased Target $1,100 $1.4 B in savings 1Q 2023 2Q 2023 3Q 2023 YE 2023E YE 2024E mums Freight and Other Costs! Adjusted Operating and SG&A Expenses ** mmm Turnaround Expense * ——Run-Rate Historical and projected savings presented above are cumulativ
Slide 8: Integrated, Diversified Portfolio
— Integrated, Diversified Portfolio Ferndale dll ere, GLOBAL ASSETS MAP LEGEND Batteries" @ Coke Facility San Francisco @y"™" 6 @icrcren aiming di] CPChem Facility (0&P) @ /— Crude Terminal/Pipeline @ Fractionator & Gas Plant @ Hydrogen Fueling” © Lubricants Facility @ /— NGL/LPG Terminal/Pipeline ‘
Slide 9: Executing the Strategy
a Executing the Strategy Transformational efforts increase cash flow, earnings, and enterprise value More than Refining: Adjusted EBITDA by Segment ($B) = Midstream =Chemicals Marketing & Specialties ™=Refining $0.7 $11 a $4 $10.0 $7.7 Average Adjusted Mid-Cycle Target DCP Business Renewable EBITDA
Slide 10: Value Creation Supports Distributions
Value Creation Supports Distributions m=Sustaining Capital Dividends Adjusted CFO Capital Allocation ($8) = Discretionary Strong balance sheet and investment grade (A3, BBB+) credit ratings Minimum 50% shareholder distributions Sustaining capital for asset integrity, safety and environmental project
Slide 11: San Francisco Refinery RODEO, CA
San Francisco Refinery RODEO, CA
Slide 12: ~ ⁴
626 ~ 590 546 529 519 502 466 456 441 437 438 432 ⁴
Slide 13: 45.0 45% 40.0 40% 35.0 35% 30.0 30% 25.0 25% 20.0 20% 15.0 5%
45.0 45% 40.0 40% 35.0 35% 30.0 30% 25.0 25% 20.0 20% 15.0 15% 10.0 10% 5.0 5% - 0% 13
Slide 14: • – – • 2024 2025 2026 2027 28-32 33-37 38-42 43-47 48+
• – – • 2024 2025 2026 2027 28-32 33-37 38-42 43-47 48+ 14
Slide 15: Disciplined Approach to Capital Spending
a Disciplined Approach to Capital Spending Capital Expenditures and Investments @ Sustaining ($B) = Growth 2023 forecasted spend includes $200 MM sustaining 2.9 22 2.5 capital efficiencies 19 ” Estimated full year capital soend to be $2.5 B reflecting: 19 20 21 22 23E — ~-$200 MM Rodeo Renewed incre
Slide 16: Midstream
Midstream
Slide 17: Integrated Midstream Business
— Integrated Midstream Business Adjusted EBITDA’ = Transportation ($B) =m NGL & Other 2.7 2.2 19 24 2.3 DCP assets increase NGL operational size and scale, expect over $400 MM in synergies Platform for continued growth ° 7 7 ” 3ONTD 28 Full NGL value chain capture sourced from world class a basins C
Slide 18: Midstream NGL Assets
a Midstream NGL Assets Volume and margin portfolio supported by long-term agreements with diverse, high-quality producers in key regions cee ae . Binge @ uve es J i none Balviow , | Freeport 5 J} Gaerans covers Sweeny 12,5, 4 Delaware, Midland & Other DJ & Other Basins Eagle Ford, East Texas, SCOOP/
Slide 19: NGL Value Chain
a NGL Value Chain @—- @-@-® Gas Gathering Pipelines & Processing ~48,000 miles ~6,000 miles' 5.5 BCFD capacity ~900 MBD long-haul to market capacity? 36 plants Long-term fee-based Liquid-rich basins - DJ, contracts Permian, Eagle Ford Mix of fee based and percentage of proceeds contracts 1) Includes
Slide 20: Midstream Guidance
| Midstream Guidance Financial Guidance Commodity sensitive Mid-Cycle Estimated Adjusted EBITDA’ 2023 Annual Run Rate ~$3,300 MM syne ~80% Estimated Synergies? Included in Adjusted ~$200 MM (o} SENIIDYA Fee based 2023 Sustaining Capital Budget $329 MM 2023 Growth Capital Budget $310 MM Fee based Mid
Slide 21: Chemicals
Slide 22: Chevron Phillips Chemical
— Chevron Phillips Chemical Adjusted EBITDA! ($B) Advantaged feedstock portfolio Industry-leading safety performance Proprietary technology oe = oe Global marketing network 19 20 n 2 30 ape YTD 23 Debottleneck opportunities Capital Expenditures and Investments! = Sustaining Olefins and Polyolefins C
Slide 23: CPChem Well-Positioned at the Low-End of the Cost Curve
CPChem Well-Positioned at the Low-End of the Cost Curve 2019-2022 Ethylene Production Cost Curve CPChem portfolio well-positioned for access to advantaged feedstock with heavy footprint in North America and Middle East Expanding global middle class is increasing demand forecast for polyethylene at a
Slide 24: Demand Growth Drives World-Scale Projects
a Demand Growth Drives World-Scale Projects = HDPE Polyethylene Global Demand LDPE (Billion pounds) = LLDPE Golden Triangle Polymer Project x08 + US Gulf Coast start up expected in 2026 (CPChem 51% equity interest) * 4.6 B pounds per year ethane cracker; two high-density polyethylene 259 269 units w
Slide 25: Refining
Slide 26: Improving Refining Performance
Improving Refining Performance Adjusted EBITDA ($B) Maintain operating excellence a js | Increase asset availability 19 20 21 22 3Q Enhance market capture YTD 23 Reduce operating costs by ~$1/bbl Capital Expenditures and Investments = Sustaining ($B) m@ Return Manage the portfolio Low-capital, high-
Slide 27: Enhance Market Capture
a Enhance Market Capture Western Canadian mA Crude Ferndale al ~— Eastern Canadian Crude > ipaywey Atlantic 4 4 Basin / Europ: 537 MBD West Coast 319 MBD . San Francisco gl > il Wood River * Central Corridor 45% & 4 ¥ Wpontsciy 531 MBD Los Angele ll ihe. : market capture » Gulf Coast 4 529 MBD Lake
Slide 28: Rodeo Renewed
Rodeo Renewed One of the World’s Largest Renewable Fuels facilities (50 MBD) expected to begin operations in late 1Q 2024 i) Constructing pre-treatment units and repurposing existing hydro-processing units to process renewable feedstocks Capital cost of $1.25 B or ~$1.60 per gallon Returns well abov
Slide 29: Marketing & Specialties
Marketing & Specialties
Slide 30: Optimizing M&S Returns
a Optimizing M&S Returns Adjusted EBITDA ($B) Consistent high-return, low-capital business Product placement for Refining Expanded U.S. retail presence through JV’s Distribution of renewable fuels Leverage global brand strength Integrated digital platform 19 20 2 22 3Q YTD 23 Capital Expenditures an
Slide 31: Appendix
Appendix
Slide 32: Operating Excellence
a Operating Excellence Safety improves availability, utilization and market capture Total Recordable Rates (Incidents per 200,000 hours worked) Industry Average @ Industry Safety Metrics (Incidents per 200,000 hours worked) Phillips 66" cPChem .41 32 38 41 33 5 gee 8 BR ° So ° 5 ° ° 18 19 20 2 22 3Q
Slide 33: 2023 Sensitivities
a 2023 Sensitivities Annual EBITDA $MM © 10¢/Gal Increase in NGL price 100 10¢/MMBtu Increase in Natural Gas price 6 $1/BBL Increase in WTI price 5 Chemicals - CPChem (net to Phillips 66) 1¢/Lb Increase in Chain Margin (Ethylene, Polyethylene, NAO) 65 Worldwide Refining $1/BBL Increase in Gasoline M
Slide 34: Integrated Network of Businesses and Assets
Integrated Network of Businesses and Assets Midstream na thousand miles of 71 thousand BPD of 72 fractionation capacity U.S. pipeline systems Provides crude oil and refined product transportation, terminaling and processing services, as well as natural gas and NGL transportation, storage, fractionat
Slide 35: Sustainable Business Practices
| Sustainable Business Practices Environmental Progress on targets to lower GHG emissions intensity from 2019 baseline 50% scope 1 and 2 by 2030 15% scope 3 by 2030 50% scope 1 and 2 by 2050 Social Industry leaders in safety and well- being of employees 680,000 hours volunteered since 2012 $280 MM i
Slide 36: Our Energy In Action
— Our Energy In Action 36
Slide 37: Footnotes
| Footnotes General Information disclosed is as of September 30, 2023, unless noted otherwise. Numbers may not appear to tie due to rounding. Chevron Phillips Chemical may be abbreviated as CPChem. Marketing and Specialties may be abbreviated as M&S. Date Conventions 22 is as of December 31, 2022, o
Slide 38: Footnotes
| Footnotes Raising Shareholder Distributions Shareholder distributions represents dividends paid to Phillips 66 shareholders plus treasury shares repurchased or exchanged. Sustainably Transform Our Cost Structure Cost Savings Targets are expected to be reflected in either operating expenses, sellin
Slide 39: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2017 2018 2019 2020 2021 2022 YTD 2023 Reconciliation of Phillips 66 Net Income (Loss) to Adjusted EBITDA Phillips 66 net income (loss) $ 5,248 5,873 3,377 (3,714) 1,594 11,391 5,954 Plus: Income tax expense (benefit) (1,693) 1,572 801 (1,250) 146 3,248 1,
Slide 40: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2017 2018 2019 2020 2021 2022 YTD 2023 Reconciliation of Phillips 66 Net Income (Loss) to Adjusted EBITDA (cont'd) Phillips 66 EBITDA, Adjusted for Special Items and Change in Fair Value of NOVONIX Investment 1,4 $ 5,134 9,241 6,771 1,105 5,159 14,493 9,69
Slide 41: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2017 2018 2019 2020 2021 2022 YTD 2023 Reconciliation of Midstream Pre-Tax Income (Loss) to Adjusted EBITDA Midstream pre-tax income (loss) $ 615 1,088 597 (116) 1,500 4,734 2,018 Plus: Interest revenue (1) — — — — — — Depreciation and amortization 298 310
Slide 42: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2017 2018 2019 2020 2021 2022 YTD 2023 Reconciliation of Midstream Pre-Tax Income (Loss) to Adjusted EBITDA (Cont'd.) EBITDA, Adjusted for Special Items and Change in Fair Value of NOVONIX Investment 1,4 $ 897 1,456 1,788 1,588 1,777 2,762 2,595 Other Adju
Slide 43: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2019 2020 2021 2022 YTD 2023 Reconciliation of Midstream - Transportation Pre-Tax Income to Adjusted EBITDA Midstream pre-tax income $ 947 508 678 1,176 976 Plus: Depreciation and amortization 152 159 234 174 121 Midstream EBITDA1 $ 1,099 667 912 1,350 1,0
Slide 44: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2019 2020 2021 2022 YTD 2023 Reconciliation of Midstream - NGL & Other Pre-Tax Income (Loss) to Adjusted EBITDA Midstream pre-tax income (loss) $ (350) (624) 452 4,000 1,078 Plus: Depreciation and amortization 140 154 191 394 568 Midstream EBITDA1 $ (210)
Slide 45: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2017 2018 2019 2020 2021 2022 YTD 2023 Reconciliation of Chemicals Pre-Tax Income to Adjusted EBITDA Chemicals pre-tax income $ 716 1,025 879 635 1,844 856 494 Plus: None — — — — — — — Chemicals EBITDA $ 716 1,025 879 635 1,844 856 494 Special Item Adjustm
Slide 46: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2017 2018 2019 2020 2021 2022 YTD 23 Reconciliation of Refining Pre-Tax Income (Loss) to Adjusted EBITDA Refining pre-tax income (loss) $ 2,099 4,628 2,132 (6,022) (2,353) 7,816 4,452 Plus: Depreciation and amortization 823 849 867 896 984 866 615 Refining
Slide 47: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2017 2018 2019 2020 2021 2022 YTD 23 Reconciliation of Refining Pre-Tax Income (Loss) to Adjusted EBITDA (Cont'd) Other Adjustments (pre-tax)2: Proportional share of selected equity affiliates income taxes 1 1 — (2) — 2 1 Proportional share of selected equ
Slide 48: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2017 2018 2019 2020 2021 2022 YTD 2023 Reconciliation of Marketing & Specialties Pre-Tax Income to Adjusted EBITDA Marketing and Specialties pre-tax income $ 1,020 1,556 1,374 1,421 1,723 2,402 1,703 Plus: Depreciation and amortization 112 114 103 103 113
Slide 49: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2017 2018 2019 2020 2021 2022 YTD 2023 Reconciliation of Corporate & Other Pre-Tax Loss to Adjusted EBITDA Corporate and Other pre-tax loss $ (895) (853) (804) (881) (974) (1,169) (959) Plus: Net interest expense 408 459 415 485 583 537 469 Depreciation an
Slide 50: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars (Except as Indicated) 2019 2020 2021 2022 3Q 2023 Total Debt $ 11,763 15,893 14,448 17,190 19,444 Total Equity 27,169 21,523 21,637 34,106 31,989 Debt-to-Capital Ratio 30 % 42 % 40 % 34 % 38 % Total Cash 1,614 2,514 3,147 6,133 3,539 Net Debt-to-Capital Ra
Slide 51: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars (Except as Indicated) 2019 2020 2021 2022 YTD 2023 Phillips 66 ROCE Numerator Net income (loss) $ 3,377 (3,714) 1,594 11,391 5,954 After-tax interest expense 362 394 459 489 537 GAAP ROCE earnings (loss) 3,739 (3,320) 2,053 11,880 6,491 After-tax special i
Slide 52: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars (Except as Indicated) 2019 2020 2021 2022 2023 Budget Phillips 66 Capital Expenditures and Investments Midstream1,2 Growth $ 1,549 1,471 501 744 310 Sustaining 251 204 232 299 329 Total 1,800 1,675 733 1,043 639 Refining2 Growth 464 328 280 477 729 Sustain