Phillips 66 · NYSE:PSX
Phillips 66 — Investor Presentation (January 2024)
44 slides from Phillips 66's investor presentation, Jan 3, 2024
Slide 1: Investor Update
eves aw | Sime PHILLIPS PROVIDING ENERGY. IMPROVING LIVES. Investor Update | January 2024
Slide 2: Cautionary Statement
a Cautionary Statement This presentation contains forward-looking statements within the meaning of the federal securities laws. Words such as “anticipate ‘expected,” “planned, “targeted,” “believe,” “continue,” “intend,” “will,” “would, “objective,” “goal,” “project,” “efforts,” “strategies” and sim
Slide 3: Differentiated and Attractive Investment Opportunity
Differentiated and Attractive Investment Opportunity GROWING Cash Generation +$4 B mid-cycle adjusted EBITDA target increase (+40%) by 2025 75% of EBITDA growth outside refining + MAINTAINING Capital Discipline 13% average adjusted ROCE since 2012 $0.3 B of sustaining capital efficiencies since 2021
Slide 4: Leading Downstream Integrated Energy Provider
Leading Downstream Integrated Energy Provider Positioned for Value Creation Through Economic Cycles MIDSTREAM * NGL wellhead-to-market value chain * Crude oil & product pipelines and terminals + 80% fee based * 72,000 miles of U.S. pipeline systems MARKETING & SPECIALTIES * 7,200 sites in the U.S. a
Slide 5: Providing Energy. Improving Lives.
Providing Energy. Improving Lives. Our Products Improve Lives and Make Modern Life Possible Transportation Fuels trucks, ships, planes Agriculture fertilizers, insecticide, Elecerls Vashicies irrigation pipe batteries, rubber tires, Housing body parts Roads roofing, carpet, insulation asphalt, paint
Slide 6: Integration Captures Value Across the Value Chain
Integration Captures Value Across the Value Chain Downstream Integration Creates Differentiated Optionality with Value Captured by a Global Commercial Supply and Trading Organization 2025 Mid-Cycle Adjusted EBITDA Target by Segment? ($B) Over 60% of mid-cycle adjusted EBITDA from non refining $14 B
Slide 7: ¹ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
¹ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Slide 8: Renewable Fuels Refining M&S Chemicals Midstream
¹ Renewable Fuels Refining M&S Chemicals Midstream
Slide 9: Reducing Costs to Sustain Higher Cash Generation
a Reducing Costs to Sustain Higher Cash Generation Cost Reductions ($MM) Target $1,100 Refining Adjusted Operating and SG&A Expenses? $650 MM Other Segment Operating and SG&A Expenses $225 MM? Freight and Other Costs $1.4B $260 $225 MM — . . $120 In savings 1Q 2023 2Q 2023 3Q 2023 YE 2023E YE 2024E
Slide 10: Improving Refining Performance to Capture Additional Value
a Improving Refining Performance to Capture Additional Value Assets Positioned to Ensure Long-Term Competitiveness Refining Crude Capacity Utilization vs. Industry Average Planned Market Capture Improvement from 2022-2025 10% Over 60 high-return, low-capital projects to improve market capture 8% Pre
Slide 11: Growing Midstream Earnings: Wellhead-to-Market Integration
Growing Midstream Earnings: Wellhead-to-Market Integration Midstream Mid-Cycle Adjusted EBITDA ($B) Balanced Wellhead-to-Market NGL Portfolio +$1.0B +$0.4B DCP ADJUSTED SYNERGIES EBITDA $3.8 $2.3 2022 Mid-Cycle 2025 Mid-Cycle Adjusted EBITDA Adjusted EBITDA’ Target Target Gathering & Processing Y-gr
Slide 12: Delivering Durable Returns through Capital Discipline
Delivering Durable Returns through Capital Discipline Steady Investments Drive Strong Returns Adjusted ROCE (% After-Tax) 2024 Capital Budget ($B) 22% 17% - ia 2019 2020 2021 2022 3Q YTD 2023 Adjusted Capital Expenditures and Investments ($B) 35 I Sustaining Growth 2.9 2.5 2.2 1.9 50 million related
Slide 13: Industry Leading Financial Stability
a Industry Leading Financial Stability LOW | STRONG Net Debt-to-Capital Credit Ratings Through Cycles 33% A3 / BBB+ As of 3Q 2023 since 2014 | BALANCED SIGNIFICANT Debt Maturity Profile ($B) Liquidity $9.8 B* As of 3Q 2023 5 acl . | in 2024 2025 2026 2027 28-32 33-37 38-42 43-47 48+ 13
Slide 14: Improved Cash Generation for Increased Shareholder Returns
a Improved Cash Generation for Increased Shareholder Returns Mid-Cycle Adjusted CFO Capital Allocation ($B) m™Sustaining Capital wowvidends " >$10 Expect to return (o) = Discretionary more than half of > % operating cash to shareholders 2022 Mid-Cycle 2025 Mid-Cycle Adjusted CFO Target Adjusted CFO
Slide 15: Integrated Portfolio Provides Excess Cash Flow
a Integrated Portfolio Provides Excess Cash Flow Through the Economic Cycles Adjusted EBITDA by Segment? ($B) Cash from Operating Activities vs Select Cash Uses ($B) Stable, growing earnings from non-refining segments >60% of cash flow available for share repurchases and other discretionary uses aft
Slide 16: Compelling Value Proposition
Compelling Value Proposition Competitive Return Profile Across Industries Cumulative Shareholder Distributions ($B) Total Shareholder Distribution Yield! Since 2012 Spin Bl pividends Share Repurchases & Exchanges 22 29 26 28 (foam el 2 3 4 «6 6 7 1B 19 20 Annual Dividend ($ per share) a 43-45 4a 33
Slide 17: Strong ESG Oversight and Performance Leads to Sustainable Results
Strong ESG Oversight and Performance Leads to Sustainable Results Making progress on our GHG goals Achieved an 8% reduction in Scope 1 & 2 emissions intensity and 3% reduction in Scope 3 emissions intensity from 2019 levels Renewable fuels a core part of our growth strategy Our Rodeo Renewed Project
Slide 18: Differentiated and Attractive Investment Opportunity
Differentiated and Attractive Investment Opportunity GROWING Cash Generation +$4 B mid-cycle adjusted EBITDA target increase (+40%) by 2025 75% of EBITDA growth outside refining + MAINTAINING Capital Discipline 13% average adjusted ROCE since 2012 $0.3 B of sustaining capital efficiencies since 2021
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Slide 20: Uniquely Integrated and Diversified Asset Portfolio
Uniquely Integrated and Diversified Asset Portfolio Ferndale dll rn San Francisco Oy Bere Los Angeles @-chem <p reas cmab ane at h\ Fsebor \\\san Berra \Yclemens cavems \irt ae et GLOBAL ASSETS MAP LEGEND @ Batteries” @ Coke Facility @ cPchem Gl cPchem Facility (0@P) @ /— Crude Terminai/Pipeline @ F
Slide 21: Midstream Provides Connectivity Across the Value Chain
a Midstream Provides Connectivity Across the Value Chain With crude, clean products, and NGL infrastructure, Midstream is linked to our Refining, Marketing and Chemicals Businesses 72 Adjusted EBITDA ($B)' Thousand miles 27 of U.S. pipeline 2.3 systems 2.2 19 21 71 9 2019 2020 2021 2022 3ayTp* | 202
Slide 22: Chemicals Positioned to Perform in any Market
a Chemicals Positioned to Perform in any Market Leading feedstock positions in North America and the Middle East ensure competitiveness 2019-2022 Ethylene Production Cost Curve Olefins and Polyolefins Capacity Utilization (%) (Cents per pound) NA. = North America 99% 97% 95% 97% 40 S.E. Asia 91% N.A
Slide 23: Refining Maintains Competitive Positions with Market Access
a Refining Maintains Competitive Positions with Market Access \ Los Angeles M iy Li 2 a 2019 2020 2021 2022 3Q YTD 2025 _ B 2023 Mid-Cycle . wl ao Adjusted EBITDA ($B) Ferndale West Coast 319 MBD Target Capital Expenditures and Investments ($B) 14 y Gulf Coast 529 MBD 11 0.9 Million BPD of Crud ! 1
Slide 24: Marketing & Specialties: Stable Cash Flow, Strong Returns
Marketing & Specialties: Stable Cash Flow, Strong Returns Optimizes refined product placement Domestic Marketing Asset Map Adjusted EBITDA ($B) © Phillips 66 © Conoco’ @ 76 7,200 1,670 Branded U.S. Outlets Branded Intl. Outlets B Markets refined petroleum products and renewable fuels, mainly in the
Slide 25: A Case Study in Value Creation
A Case Study in Value Creation Rodeo Renewed, San Francisco, CA Leading Scale (@ One of the World’s Largest Renewable Fuels Optionality to produce renewable jet 800 million gallons per ) facilities expected to produce 50 MBD and oy year begin operations in late 1Q 2024 Efficient Capital Cost $1.60 p
Slide 26: Executing the Strategy
a Executing the Strategy Transformational efforts increase cash flow, earnings, and value Adjusted EBITDA by Segment ($B) $0.6 $0.2 $14.0 $0.7 as $11 a $7.7 2017-2019 2022 Mid-Cycle DCP Business Renewable Commercial Chemicals 2025 Mid-Cycle Average Adjusted Adjusted EBITDA Transformation Fuels Adjus
Slide 27: Operating Excellence
a Operating Excellence Safety improves availability, utilization and market capture Total Recordable Rates 2022 Industry Safety Metrics (Incidents per 200,000 hours worked) (Incidents per 200,000 hours worked) Phillips 66" cPChem Ll oo: on — Industry Average @ Food Agricul., All Construction Petchem
Slide 28: 2023 Sensitivities
2023 Sensitivities Midstream © 10¢/Gal Increase in NGL price 10¢/MMBtu Increase in Natural Gas price $1/BBL Increase in WTI price Annual EBITDA $MM © 100 Chemicals - CPChem (net to Phillips 66) 1¢/Lb Increase in Chain Margin (Ethylene, Polyethylene, NAO) Worldwide Refining $1/BBL Increase in Gasolin
Slide 29: Publications
a Publications 29
Slide 30: Footnotes
a Footnotes General Information disclosed is as of September 30, 2023, unless noted otherwise. Numbers may not appear to tie due to rounding. Chevron Phillips Chemical may be abbreviated as CPChem. Marketing and Specialties may be abbreviated as M&S. Date Conventions 22 is as of December 31, 2022, o
Slide 31: Footnotes
a Footnotes Reducing Costs to Sustain Higher Cash Generation Cost Savings Targets are expected to be reflected in either operating expenses, selling, general and administrative expenses, depreciation and amortization expenses, purchased crude oil and products costs or equity in earnings of affiliate
Slide 32: Non-GAAP Reconciliation
a Non-GAAP Reconciliation ions of botars 2017 2018 2019 2020 2021 2022 3QLTM 23 Reconciliation of Phillips 66 Net Income (Loss) to Adjusted EBITDA Phillips 66 net income (loss) S$ 5,248 5,873 3,377 (3,714) 1,594 11,391 7,966 Plus: Income tax expense (benefit) (1,693) 1,572 801 (1,250) 146 3,248 2,28
Slide 33: Non-GAAP Reconciliation
| Non-GAAP Reconciliation Millions of Dollars 2017 2018 2019 2020 2021 2022 3QLTM 23 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! $5,134 9,241 6,771 1,105 5,159 14,493 12,961
Slide 34: Non-GAAP Reconciliation
| Non-GAAP Reconciliation Millions of Dollars 2017 2018 2019 2020 2021 2022 3QLTM 23 Reconciliation of Midstream Pre-Tax Income (Loss) to Adjusted EBITDA Midstream pre-tax income (loss) S$ 615 1,088 597 (116) 1,500 4734 2.674 Plus: Interest revenue (1) - - - = = = Depreciation and amortization 298 3
Slide 35: Non-GAAP Reconciliation
a Non-GAAP Reconciliation Millions of Dollars 2017 2018 2019 2020 2021 2022 3QLTM 23 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’ 897 1,456 1,788 1,588 1,777 2,762 3,505 Other Adjustm
Slide 36: Non-GAAP Reconciliation
| Non-GAAP Reconciliation Millions of Dollars 2017 2018 2019 2020 2021 2022 3QLTM 23 Reconciliation of Midstream - Transportation Pre-Tax Income to Adjusted EBITDA Midstream - Transportation pre-tax income $ 530 770 947 508 678 1,176 1,213 Plus: Interest revenue (1) - — — — -— _— Depreciation and am
Slide 37: Midstream – NGL and Other EBITDA, Adjusted for Special Items
Millions of Dollars 2017 2018 2019 2020 2021 2022 3QLTM 23 Reconciliation of Midstream - NGL & Other Pre-Tax Income (Loss) to Adjusted EBITDA Midstream pre-tax income (loss) $ 85 318 (350) (624) 452 4,000 1,508 Plus: Depreciation and amortization 139 144 140 154 191 394 747 Midstream - NGL & Other E
Slide 38: Reconciliation of Chemicals Pre-Tax Income to Adjusted EBITDA
Millions of Dollars 2017 2018 2019 2020 2021 2022 3QLTM 23 Reconciliation of Chemicals Pre-Tax Income to Adjusted EBITDA Chemicals pre-tax income $ 716 1,025 879 635 1,844 856 546 Plus: None — — — — — — — Chemicals EBITDA $ 716 1,025 879 635 1,844 856 546 Special Item Adjustments (pre-tax): Impairme
Slide 39: Reconciliation of Refining Pre-Tax Income (Loss) to Adjusted EBITDA
Millions of Dollars 2017 2018 2019 2020 2021 2022 3QLTM 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 6,092 Plus: Depreciation and amortization 823 849 867 896 984 866 841 Refining EBITDA1 $ 2,922 5,477
Slide 40: Reconciliation of Refining Pre-Tax Income (Loss) to Adjusted EBITDA (Cont'd)
Millions of Dollars 2017 2018 2019 2020 2021 2022 3QLTM 23 Reconciliation of Refining Pre-Tax Income (Loss) to Adjusted EBITDA (Cont'd) Refining EBITDA, Adjusted for Special Items1 $ 2,502 5,514 2,961 (2,303) (55) 8,751 6,963 Other Adjustments (pre-tax): Proportional share of selected equity affilia
Slide 41: Reconciliation of Marketing & Specialties Pre-Tax Income to Adjusted EBITDA
Millions of Dollars 2017 2018 2019 2020 2021 2022 3QLTM 23 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 2,242 Plus: Depreciation and amortization 112 114 103 103 113 110 113 Marketing & Spec
Slide 42: Reconciliation of Corporate & Other Pre-Tax Loss to Adjusted EBITDA
Millions of Dollars 2017 2018 2019 2020 2021 2022 3QLTM 23 Reconciliation of Corporate & Other Pre-Tax Loss to Adjusted EBITDA Corporate and Other pre-tax loss $ (895) (853) (804) (881) (974) (1,169) (1,299) Plus: Net interest expense 408 459 415 485 583 537 611 Depreciation and amortization 86 82 8
Slide 43: Phillips 66 ROCE
Millions of Dollars (Except as Indicated) YTD Sept 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Phillips 66 ROCE Numerator Net income (loss) $ 4,131 3,743 4,797 4,280 1,644 5,248 5,873 3,377 (3,714) 1,594 11,391 5,954 After-tax interest expense 160 178 173 201 220 285 398 362 394 459
Slide 44: Capital Expenditures and Investments
Millions of Dollars 2019 2020 2021 2022 2023E 2024 Budget Phillips 66 Capital Expenditures and Investments Midstream1,2 Growth $ 1,549 1,471 501 744 292 593 Sustaining 251 204 232 299 350 392 Total 1,800 1,675 733 1,043 642 985 Refining2 Growth 464 328 280 477 977 654 Sustaining 606 499 504 451 384