Phillips 66 · NYSE:PSX
Phillips 66 — J.P. Morgan Energy Conference 2019
27 slides from Phillips 66's conference presentation, Jun 18, 2019
Slide 1: J.P. Morgan Energy Conference
Freeport Terminal LPG Facility FREEPORT, TX June 2019 J.P. MORGAN ENERGY CONFERENCE Greg C. Garland Chairman and Chief Executive Officer 1 phillips66.com | NYSE: PSX
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT This presentation contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Wo
Slide 3: Executing the Strategy
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 chain – transportation, fractionation and exports CPChem USGC ethylene and
Slide 4: Operating Excellence
OPERATING EXCELLENCE TOTAL RECORDABLE RATES REFINING CRUDE CAPACITY UTILIZATION Incidents per 200,000 Hours Worked Phillips 66 CPChem DCP Midstream 96% 1.15 95% 95% 1.03 Industry Average 94% .86 .83 93% .79 .74 .76 .66 .66 .58 .54 91% 91% 91% .43 .41 .45 .46 90% 90% .33 .32 .30 .28 .30 .23 .23 .19 .
Slide 5: Environmental, Social, Governance
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 performance 0 Agricul., Food All Construction Prof. Petroleum Petchem. Phillips
Slide 6: Growing Our Integrated Portfolio
GROWING OUR INTEGRATED PORTFOLIO 6 phillips66.com | NYSE: PSX
Slide 7: Midstream and Chemicals Growth
M I D S T R E AM AN D C H E M I C AL S G R O W T H 7 phillips66.com | NYSE: PSX
Slide 8: PSXP Gray Oak Pipeline / South Texas Gateway Terminal
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 South Texas Gateway Terminal Two deepwater docks with up to 800,000 BPD throughp
Slide 9: Sweeny Hub Expansion
S W E E N Y H U B E X P AN S I O N 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 feedstock supply agreements with firm volume commitments Clemens St
Slide 10: Liberty and Red Oak Pipelines
L I B E R T Y AN D R E D O AK P I P E L I N E S Liberty Pipeline Crude oil pipeline from the Rockies and Bakken to Cushing, Oklahoma Initial service expected early 2021 24-inch pipeline 50% PSX ownership Red Oak Pipeline Crude oil pipeline from West Texas and Cushing, Oklahoma, to the Texas Gulf Coa
Slide 11: Enhancing Returns in Refining and Marketing
ENHANCING RETURNS IN REFINING AND MARKETING Central Corridor 515 MBD West Coast Atlantic 364 MBD Basin/Europe 537 MBD Gulf Coast 11 phillips66.com | NYSE: PSX As of January 1, 2019 764 MBD
Slide 12: Refining Portfolio Competitiveness
REFINING PORTFOLIO COMPETITIVENESS DISTILLATE PRODUCTION High distillate yield % TOTAL THROUGHPUT 38.2% Industry leading coking capacity and 37.9% 37.0% 34.0% 32.0% heavy crude processing capability PSX Comparison is to independent refining peer group: HFC, MPC, PBF, VLO. Source: company disclosures
Slide 13: Refining Return Projects
REFINING RETURN PROJECTS Borger diesel recovery (3Q19) Adds 25 MBD distillate production Humber diesel yield improvement (3Q19) San Francisco coker feed segregation (3Q19) Reduces HSFO production by 35 MBD Wood River crude unit restart (3Q19) Ferndale DHT maximization (4Q19) Capital ~$120 MM Wood Ri
Slide 14: Marketing: Enhancing the Brands
MARKETING: ENHANCING THE BRANDS U.S. Reimaged ~2,900 sites since 2015 Reimaging 1,800 sites in 2019 5,000+ sites implementing mobile pay Europe / U.K. Low-cost high-volume model Built on brand image, reputation, and customer focus High-grading the JET portfolio with new sites 14 phillips66.com | NYS
Slide 15: Renewable Diesel
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 Renewable Energy Group Renewable diesel production at San Francisco Refinery 650 mill
Slide 16: Adjusted EBITDA and Cash Generation
ADJUSTED EBITDA AND CASH GENERATION ADJUSTED EBITDA PSX CASH FROM OPERATIONS $B $B 7.6 10.1 9.8 8.6 6.0 7.9 5.7 7.5 5.9 4.3 4.7 3.5 3.6 3.0 12 13 14 15 16 17 18 12 13 14 15 16 17 18 Midstream Chemicals Refining Marketing and Specialties Corporate 16 phillips66.com | NYSE: PSX Vacuum Tower, Billings
Slide 17: Disciplined Capital Allocation
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 6.5 5.5 1.5 - 2.5 Intrinsic value approach to share repurchases 1.5 - 2.
Slide 18: Total Shareholder Return
TOTAL SHAREHOLDER RETURN 340% PSX +219% 300% Peers +119% 260% S&P 100 +134% 220% 180% 140% 100% 60% 20% -20% May-12 May-13 May-14 May-15 May-16 May-17 May-18 Jun-19 May-19 18 phillips66.com | NYSE: PSX Vacuum Tower, Billings Refinery, Billings, MT See appendix for footnotes
Slide 19: Safety. Honor. Commitment.
S AF 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
Slide 20: Footnotes
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 2018 and estimated benefit from 2017 tax rate change. 18 18 is as
Slide 21: Footnotes
FOOTNOTES Slide 4 Industry averages are from: Phillips 66 – American Fuel & Petrochemical Manufacturers (AFPM) refining data, Chevron Phillips Chemical Company LLC (CPChem) – American Chemistry Council (ACC), DCP Midstream, LLC (DCP Midstream) – Gas Processors Association (GPA). Industry refining cr
Slide 22: Non-GAAP Reconciliation
N O N - G A A P R E C O N C I L I AT I O N ( S L I D E 1 6 ) Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 Reconciliation of Phillips 66 Net Income to Adjusted EBITDA Phillips 66 net income $ 4,131 3,743 4,797 4,280 1,644 5,248 5,873 Less: Income from discontinued operations 48 61 706 — — —
Slide 23: Non-GAAP Reconciliation
N O N - G A A P R E C O N C I L I AT I O N ( S L I D E 1 6 ) Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 Reconciliation of Midstream Pre-Tax Income to Adjusted EBITDA Midstream pre-tax income $ 89 751 851 147 402 638 1,181 Plus: Interest revenue — — — — — (1) — Depreciation and amortizati
Slide 24: Non-GAAP Reconciliation
N O N - G A A P R E C O N C I L I AT I O N ( S L I D E 1 6 ) Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 Reconciliation of Chemicals Pre-Tax Income to Adjusted EBITDA Chemicals pre-tax income $ 1,189 1,361 1,632 1,315 839 716 1,025 Plus: None — — — — — — — Chemicals EBITDA 1,189 1,361 1,6
Slide 25: Non-GAAP Reconciliation
N O N - G A A P R E C O N C I L I AT I O N ( S L I D E 1 6 ) Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 Reconciliation of Refining Pre-Tax Income to Adjusted EBITDA Refining pre-tax income $ 5,090 2,782 2,467 3,659 436 2,076 4,535 Plus: Depreciation and amortization 655 685 704 738 769 8
Slide 26: Non-GAAP Reconciliation
N O N - G A A P R E C O N C I L I AT I O N ( S L I D E 1 6 ) Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 Reconciliation of Marketing and Specialties Pre-Tax Income to Adjusted EBITDA Marketing and Specialties pre-tax income $ 863 1,327 1,475 1,652 1,261 1,020 1,557 Plus: Interest revenue
Slide 27: Non-GAAP Reconciliation
N O N - G A A P R E C O N C I L I AT I O N ( S L I D E 1 6 ) Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 Reconciliation of Corporate and Other Pre-Tax Loss to Adjusted EBITDA Corporate and Other pre-tax loss $ (675) (695) (680) (729) (747) (895) (853) Plus: Net interest expense 231 258 24