Phillips 66 · NYSE:PSX
Phillips 66 — Investor Day (November 2019)
107 slides from Phillips 66's investor day presentation, Nov 6, 2019
Slide 1: Sweeny Fracs 2, 3 and 4 construction
Sweeny Fracs 2, 3 and 4 construction OLD OCEAN, TX
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: Agenda
Agenda 8:30 – 11:30 am TOPIC SPEAKER Opening Remarks Greg Garland Market Update Jeff Dietert Midstream / PSXP Tim Roberts / Rosy Zuklic Chemicals Mark Lashier Refining Robert Herman Marketing & Specialties Brian Mandell BREAK Financial Update Kevin Mitchell Closing Remarks Greg Garland Q&A All Inves
Slide 4: Opening Remarks
Opening Remarks GREG GARLAND CHAIRMAN & CHIEF EXECUTVE OFFICER Sweeny Fracs 2, 3 and 4 construction OLD OCEAN, TX Investor Day 4
Slide 5: Leadership Team
Leadership Team Greg Garland Jeff Dietert Tim Roberts Rosy Zuklic Mark Lashier Robert Herman Chairman & CEO VP, Investor Relations EVP, Midstream VP & COO, PSXP President & CEO, CPChem EVP, Refining Brian Mandell Kevin Mitchell Paula Johnson Jay Churchill Zhanna Golodryga Sonya Reed EVP, Marketing &
Slide 6: Executing the Strategy
Executing the Strategy GROWTH RETURNS DISTRIBUTIONS Pipelines to Gulf Coast Refinery yield projects Secure, competitive and Crude export capability growing dividend NGL value chain Clean product export capability Commitment to share CPChem ethylene and Brand reimaging repurchases derivative capacity
Slide 7: Delivering on our Commitments
Delivering on our Commitments EXECUTED EXECUTING / DEVELOPING Gray Oak Pipeline Sweeny Hub Red Oak and Liberty pipelines Freeport LPG Export Terminal Sweeny Fractionators 2, 3, 4 GROWTH Beaumont Terminal South Texas Gateway Terminal Bakken Pipeline Bluewater Project U.S. Gulf Coast Petrochemicals Pr
Slide 8: Investments from 2012 to 2019
Investments from 2012 to 2019 See appendix for footnotes Investor Day 8
Slide 9: Investments from 2019 to 2022
Investments from 2019 to 2022 See appendix for footnotes Investor Day 9
Slide 10: Integrated Portfolio in 2022
Integrated Portfolio in 2022 See appendix for footnotes Investor Day 10
Slide 11: Operating Excellence
Operating Excellence Total Recordable Rates Refining Crude Capacity Utilization INCIDENTS PER 200,000 HOURS WORKED % 96% 95% 95% Phillips 66 CPChem DCP Midstream 93% 93% Industry Average 91% 91% 91% 90% 90% 1.03 .86 .83 15 16 17 18 19 .79 YTD Phillips 66 U.S. Industry Average Industry Safety Metrics
Slide 12: Environmental, Social, Governance
Environmental, Social, Governance 100% of Board of Directors meetings include ESG topics $6+ B invested in safety, environmental and reliability from 2012 to 2018 40+ ESG metrics in 2019 sustainability report 50% lower total recordable rate vs. refining industry 25% decline in SOx, NOx and PM emissi
Slide 13: High-Performing Organization
High-Performing Organization 14,500 employees live our values, every day VISION Providing Energy. Improving Lives. 94% retention of all employees, 96% retention of high performers 21% women and 26% U.S. minority CORE VALUES 44% employees participate in employee affiliation groups Safety. Honor. Comm
Slide 14: AdvantEdge66
AdvantEdge66 UNLOCKING VALUE THROUGH BUSINESS TRANSFORMATION Total Enhancements $1.2 B total enhancements by 2022 50% - 70% value captured as mid-cycle EBITDA uplift End to end value chain optimization Asset Performance Technology-enabled risk reduction Advanced analytics, Artificial Intelligence an
Slide 15: Mid-Cycle Adjusted EBITDA
Mid-Cycle Adjusted EBITDA Adjusted EBITDA Growth $B $9 B mid-cycle adjusted EBITDA and $6.5 B mid-cycle CFO in 2019 $2 B incremental mid-cycle adjusted EBITDA over three years Midstream growth investments 11 Refining and Marketing return projects 9 AdvantEdge66 efficiencies and value chain optimizat
Slide 16: Disciplined Capital Allocation
Disciplined Capital Allocation Sources and Uses of Cash $B ~1 $7 B mid-cycle CFO in 2020 1.6 - 1.7 7 6 1.5 - 2.5 Sustaining capital for asset integrity, safety 1.5 - 2.5 and environmental projects Mid-Cycle Sust. FCF Dividends Growth Share CFO Capex Capex Repurch. Secure, competitive and growing div
Slide 17: Market Update
Market Update JEFF DIETERT VICE PRESIDENT, INVESTOR RELATIONS Phillips 66 Headquarters HOUSTON, TX Investor Day 17
Slide 18: U.S. Production Growth
U.S. Production Growth U.S. Oil Production EIA Outlooks for U.S. Oil Production Wellhead Breakeven1 vs. Drilling Activity MMBD MMBD 000’S REMAINING HORIZONTAL DRILLING LOCATIONS 18 16 120 16 14 100 14 12 12 80 10 10 8 60 8 6 6 40 4 4 20 2 2 0 0 0 10 12 14 16 18 20 22 24 06 08 10 12 14 16 18 20 22 24
Slide 19: U.S. Gulf Coast Petroleum Exports
U.S. Gulf Coast Petroleum Exports Crude Oil LPG Finished Petroleum Products1 MMBD MMBD MMBD 6.0 Forecast 2.5 Forecast 3.5 Forecast 3.0 5.0 2.0 2.5 4.0 1.5 2.0 3.0 1.5 1.0 2.0 1.0 0.5 1.0 0.5 0.0 0.0 0.0 10 12 14 16 18 20 22 24 10 12 14 16 18 20 22 24 10 12 14 16 18 20 22 24 Source: EIA; BTU Analytic
Slide 20: Natural Gas Liquids Value Chain
Natural Gas Liquids Value Chain U.S. NGL Production1 Global LPG Demand by Region U.S. Gulf Coast LPG Exports MMBD MMBD MMBD 6 Forecast 12 Forecast 2.0 Forecast Forecast Forecast 1.8 5 10 1.6 1.4 4 8 1.2 3 6 1.0 0.8 2 4 0.6 0.4 1 2 0.2 0 0 0.0 10 12 14 16 18 20 22 24 10 12 14 16 18 20 22 24 10 12 14
Slide 21: U.S. Ethane Fundamentals
U.S. Ethane Fundamentals U.S. Ethane Production1 U.S. Ethane Demand Natural Gas and Ethane Pricing MMBD MMBD $ PER MMBTU 4.5 Forecast 4.5 Forecast 16 Forward Curve2 4.0 4.0 14 3.5 3.5 12 Rejection 3.0 3.0 10 2.5 2.5 8 2.0 2.0 6 1.5 1.5 4 1.0 1.0 0.5 0.5 2 0.0 0.0 0 10 12 14 16 18 20 22 24 10 12 14 1
Slide 22: Strong Demand for High Density Polyethylene
Strong Demand for High Density Polyethylene Global HDPE Production Petrochemical Projects 2018-2024 U.S. HDPE Domestic Chain Margin MILLION METRIC TONS MILLION METRIC TONS ETHYLENE CAPACITY CENTS PER POUND 70 Forecast 45 40 60 CAGR 4% 35 50 CAGR 5% 30 40 25 30 20 15 20 10 10 5 0 0 10 12 14 16 18 20
Slide 23: IMO Update
IMO Update Northwest Europe Cracks1 Medium Sour vs. Heavy Sweet Crude $ PER BARREL $ PER BARREL VS. BRENT Forecast 8.4 23.05 3.5 17.85 2.2 1.7 13.24 1.0 0.0 (11.51) (1.4) (2.6) (2.8) (23.88) (3.4) (2.9) (28.85) (5.1) Historical 2020 Forward Consultant 10 12 14 16 18 20 22 24 Average Curve Average UL
Slide 24: Canadian Oil Production vs. Infrastructure
Canadian Oil Production vs. Infrastructure CAPP Production Forecast MMBD Forecast 6 5 Plus Line 3 4 Existing Pipeline Capacity 3 2 1 0 Pipeline 10 12 14 16 18 20 22 24 Capacity Western Canada Oil Production Eastern Canada Oil Production Existing Pipeline Capacity Enbridge Line 3 Trans Mountain Expan
Slide 25: Midstream
Midstream TIM ROBERTS EXECUTIVE VICE PRESIDENT, MIDSTREAM ROSY ZUKLIC VICE PRESIDENT & CHIEF OPERATING OFFICER, PHILLIPS 66 PARTNERS Beaumont Terminal NEDERLAND, TX Investor Day 25
Slide 26: Midstream Assets in 2012
Midstream Assets in 2012 18,000 miles of U.S. pipeline systems 102,000 barrels per day fractionation capacity 10 crude oil terminals 39 product terminals See appendix for footnotes Investor Day 26
Slide 27: Midstream Assets in 2022
Midstream Assets in 2022 Growth since 2012 6,000 miles of U.S. pipeline systems 550,000+ barrels per day fractionation capacity 15 crude oil terminals 1,800,000 barrels per day crude export capacity 4 LPG terminals See appendix for footnotes Investor Day 27 * PSXP asset
Slide 28: Building a Premier Midstream Business
Building a Premier Midstream Business Adjusted EBITDA $B Top-quartile safety performance 2.2 1.9 1.2 Diversified portfolio integrated with Refining and 1.0 1.0 Marketing Integrated crude system with optionality for 15 16 17 18 LTM producers, refiners and exporters PSX & PSXP DCP Adjusted Capital Exp
Slide 29: Crude Oil System in 2012
Crude Oil System in 2012 See appendix for footnotes Investor Day 29
Slide 30: Crude Oil System in 2022
Crude Oil System in 2022 Operational Bakken Pipeline Bayou Bridge Pipeline Beaumont Terminal Gray Oak Pipeline Executing Red Oak and Liberty pipelines Beaumont storage and dock expansion South Texas Gateway Terminal Developing ACE Pipeline Bluewater Project See appendix for footnotes Investor Day 30
Slide 31: NGL System in 2012
NGL System in 2012 See appendix for footnotes Investor Day 31
Slide 32: NGL System in 2022
NGL System in 2022 Operational Sweeny Frac 1 LPG Export Terminal Clemens Caverns Sand and Southern Hills pipelines Executing Sweeny Fracs 2, 3 and 4 C2G Pipeline Clemens Caverns expansion Developing Sweeny Fracs 5 and 6 Freeport expansion See appendix for footnotes Investor Day 32 * PSXP asset
Slide 33: AdvantEdge66
AdvantEdge66 BUSINESS TRANSFORMATION Predictive analytics Automation and digital field operations Pipeline Control Center BARTLESVILLE, OK Artificial Intelligence machine learning Data-driven operations Digital platforms Renton Terminal RENTON, WA Investor Day 33
Slide 34: DCP Midstream
DCP Midstream North 1.4 BCFD Mid-Continent 1.6 BCFD Logistics & Marketing and Gathering & Processing Diversified portfolio in premier basins Permian 1.3 BCFD Large scale U.S. NGL producer and gas processor Integrated NGL supply for Phillips 66 Sweeny Hub DCP 2.0 transformation South 2.2 BCFD See app
Slide 35: Phillips 66 Partners
Phillips 66 Partners Total Return Since IPO % 300% Supports Phillips 66 Midstream growth PSXP +215% 250% Alerian MLP Index (26%) Premier MLP with competitive cost of capital 200% Portfolio of highly integrated assets 150% Stable and predictable cash flows 100% 50% Competitive and growing distributio
Slide 36: Phillips 66 Partners
Phillips 66 Partners FINANCIAL STRENGTH AND FLEXIBILITY Adjusted EBITDA $B 1.2 2020 exit run-rate adjusted EBITDA of $1.5 B 1.1 0.8 Maintain strong leverage and coverage ratios, 0.5 with long-term targets of 0.3 Up to 3.5x Debt / EBITDA 15 16 17 18 LTM Greater than 1.2x coverage ratio Distribution /
Slide 37: Phillips 66 Partners
Phillips 66 Partners GROWTH Adjusted Capital Expenditures and Investments $B 0.9 Organic Gray Oak Pipeline 0.8 0.7 C2G Pipeline South Texas Gateway Terminal Clemens Caverns expansion 0.5 Sweeny to Pasadena pipeline expansion 0.4 0.2 Continued sponsor support with backlog of available projects 15 16
Slide 38: Chemicals
Chemicals MARK LASHIER PRESIDENT & CHIEF EXECUTIVE OFFICER, CHEVRON PHILLIPS CHEMICAL COMPANY Polyethylene Units OLD OCEAN, TX Investor Day 38
Slide 39: Feedstock Advantaged Chemicals Portfolio
Feedstock Advantaged Chemicals Portfolio #1 HDPE producer worldwide #2 NAO producer worldwide #2 Propylene merchant producer on U.S. Gulf Coast See appendix for footnotes Investor Day 39
Slide 40: Chemicals Value Chain
Chemicals Value Chain Upgrade Serve growing low-cost global ethane middle class feedstock World-scale Produce manufacturing in-demand facilities and products proprietary technology 70,000+ end-user products Investor Day 40
Slide 41: Chevron Phillips Chemical Company
Chevron Phillips Chemical Company 100% CPChem Adjusted EBITDA $B Industry-leading safety performance with focus on operating excellence 3.4 2.7 3.2 3.0 2.6 Proprietary technology 15 16 17 18 LTM Advantaged feedstock portfolio Polyethylene Global Operating Rates % Global marketing network 98% 100% 94
Slide 42: Phillips 66 Proportional Share of CPChem
Phillips 66 Proportional Share of CPChem Adjusted EBITDA Capital Expenditures and Investments $B $B 1.3 1.0 1.7 0.8 1.6 1.5 1.3 1.3 0.4 0.3 15 16 17 18 LTM 15 16 17 18 19E Sustaining Growth See appendix for footnotes Investor Day 42
Slide 43: Macro Chemicals Outlook
Macro Chemicals Outlook 2019E Ethylene Production Cost Curve CENTS PER POUND Asia Coal M.E. LPG M.E. Naphtha 40 Asia LPG N.A. Naphtha Asia Naphtha Well-positioned in North America and N.A. LPG W. Europe Naphtha 20 Middle East W. Europe LPG M.E. Ethane N.A. Ethane 0 0 50 100 150 200 Expanding global
Slide 44: Sustainability
Sustainability Enhancing efforts to eliminate plastic pellet spills by joining Operation Clean Sweep Blue Continue to combat plastic waste and improve perception of plastics Founding member of Alliance to End Plastic Waste Investor Day 44
Slide 45: CPChem Growth Projects
CPChem Growth Projects U.S. Gulf Coast II Jointly pursuing development with Qatar Petroleum CPChem 51% equity interest 2,000 kMTA ethylene cracker Two 1,000 kMTA polyethylene units FID no later than 2021 with startup in late 2024 Ras Laffan Petrochemicals Project CPChem 30% equity interest 1,900 kMT
Slide 46: Refining
Refining ROBERT HERMAN EXECUTIVE VICE PRESIDENT, REFINING Billings Refinery BILLINGS, MT Investor Day 46
Slide 47: Diversified Refining Portfolio
Diversified Refining Portfolio Central Corridor West Coast 515 MBD 364 MBD Atlantic Basin / Europe 537 MBD Gulf Coast 764 MBD See appendix for footnotes Investor Day 47
Slide 48: Enhancing Returns
Enhancing Returns Adjusted EBITDA $B Top-quartile HSE performance 5.7 4.8 4.7 2.7 Strong cash generation 1.4 15 16 17 18 LTM Capital and cost discipline Capital Expenditures and Investments $B High-return capital projects 1.1 1.1 1.0 0.9 0.8 Advantaged feedstocks 15 16 17 18 19E Sustaining Return Se
Slide 49: Refining Portfolio Competitiveness
Refining Portfolio Competitiveness Peer Comparison % Distillate Canadian Coking Capacity / High distillate yield Production / Imports / Crude Capacity Throughput Crude Runs Largest purchaser of advantaged Canadian crude Industry-leading coking capacity Low yield of high-sulfur fuel oil 38 38 37 34 3
Slide 50: North America Crude Feedstock Flexibility
North America Crude Feedstock Flexibility Crude Feedstock Slate % TOTAL CRUDE RUNS 22% 22% 22% 22% 23% 21% 17% 23% 23% 24% 27% 24% 24% 27% 20% 19% 17% 18% 18% 16% 17% 35% 36% 37% 34% 35% 37% 40% 13 14 15 16 17 18 19 YTD Other Foreign (non-Canadian) Canadian Other Domestic (non-sweet) Sweet Domestic
Slide 51: Maintain Cost Discipline
Maintain Cost Discipline U.S. Industry Benchmarking Performance SOLOMON ASSOCIATES Top quartile non-energy operating cost 1st Quartile Maintenance and personnel costs trending to top quartile in industry 2nd Quartile Cost efficiencies and improved productivity via AdvantEdge66 Artificial Intelligenc
Slide 52: AdvantEdge66
AdvantEdge66 BUSINESS TRANSFORMATION End to end value chain optimization Deploying digital technology to provide real-time information Leveraging advanced analytics to enable agile decision making Empowering our people to improve value generation Optimizing long-term value capture across the entire
Slide 53: Enhancing Returns
Enhancing Returns THROUGH CAPITAL INVESTMENTS Humber Refinery NORTH LINCOLNSHIRE, UK 2019 Lake Charles isomerization unit Borger diesel recovery Wood River LSFO hydrotreater High-return, quick Bayway LSFO hydrotreater payout projects 2020 Sweeny FCC modernization Humber UCO renewable diesel Returns
Slide 54: Marketing & Specialties
Marketing & Specialties BRIAN MANDELL EXECUTIVE VICE PRESIDENT, MARKETING & COMMERCIAL Phillips 66 Branded Marketing Site CAMDEN COUNTY, MO Investor Day 54
Slide 55: Marketing & Specialties
Marketing & Specialties 2,200,000 barrels per day clean products sales volume 9,150 global outlets 13,000 barrels per day finished lubricants production Aviation brand See appendix for footnotes Investor Day 55
Slide 56: Enhancing Returns
Enhancing Returns Adjusted EBITDA $B High-return, low-capital business 1.5 1.6 1.8 1.4 1.2 Refining product placement 15 16 17 18 LTM Fuel brands reimaging Integration through equity partnerships Capital Expenditures and Investments $B Renewable diesel 0.5 Integrated digital platform 0.1 0.1 0.1 0.1
Slide 57: Secure Product Placement
Secure Product Placement United States ~3,700 sites reimaged since program inception ~5,600 sites implemented mobile pay Direct consumer engagement Expanding partnerships with private labels Europe Proven low-cost, high-volume model Reimaging and high-grading the JET brand Adding 20 - 30 new JET sit
Slide 58: West Coast Marketing Joint Venture
West Coast Marketing Joint Venture 50 / 50 joint venture with large wholesale / retail operator Proven retail operational expertise Participate in retail fuel margins and store sales $250 - $325 MM capital investment $50 - $60 MM incremental adjusted EBITDA per year Total Site Count 680 Total Volum
Slide 59: Clean Product Export Capability
Clean Product Export Capability U.S. Refinery Clean Product Export Capacity MBD 150 700 50 Expand clean products export capability 80 100 550 160 80 Leverage optionality to maximize value 110 Expand sales into new global markets 460 360 Optimal global storage tank portfolio Current Additions 2024 Ca
Slide 60: IMO 2020
IMO 2020 Strategically positioned for IMO 2020 transition Utilize global market presence to maximize returns Optimize refinery feedstock selection Capitalize on distillate production for bunker fuel blending Phillips 66 IMO opportunities Investor Day 60
Slide 61: Renewable Diesel
Renewable Diesel Portfolio approach for renewable diesel production Humber UCO renewable diesel project San Francisco renewable diesel production Ferndale renewable diesel processing Offtake agreement with Ryze Renewables Leverage Marketing position to capture full value chain margin Investor Day 61
Slide 62: AdvantEdge66
AdvantEdge66 BUSINESS TRANSFORMATION Go-to-Market Value Enablers Efficiency Enhanced Mobile Pay platform Develop Artificial Intelligence Enhance optimization tools machine learning Improved digital customer experience Automate the back-office Optimized payment systems Investor Day 62
Slide 63: Financial Update
Financial Update KEVIN MITCHELL EXECUTIVE VICE PRESIDENT, FINANCE & CHIEF FINANCIAL OFFICER Phillips 66 Headquarters HOUSTON, TX Investor Day 63
Slide 64: Financial Strategy
Financial Strategy Phillips 66 Headquarters HOUSTON, TX Disciplined capital allocation Committed to a secure, competitive and growing dividend Intrinsic value approach to share repurchases Maintain financial flexibility, strong investment grade credit rating Investor Day 64
Slide 65: Financial Strength
Financial Strength Equity and Debt $B UNLESS NOTED Flexibility to execute strategy through the cycle Investment grade credit ratings 30% 27% 29% 31% 27% PSX: A3 (Moody’s), BBB+ (S&P) PSXP: Baa3 (Moody’s), BBB (S&P) 25% 26% 25% 22% 25% Well-laddered debt maturities 27.4 27.2 27.1 23.9 23.7 $8.0 B tot
Slide 66: EBITDA and Returns
EBITDA and Returns Adjusted Return on Capital Employed % AFTER-TAX Peer-leading ROCE Strong EBITDA generation Peer Avg 14% 16% 16% 8% EBITDA enhancement from capital investments 5% and business transformation initiatives 15 16 17 18 LTM Adjusted EBITDA 2022 Mid-Cycle Adjusted EBITDA $B $B 11 10.1 9.
Slide 67: Cash Generation
Cash Generation Cash From Operations Free Cash Flow Yield $B % 18 7.6 8.0 7.3 16 7.0 5.7 6.0 14 5.0 12 12.99 Realized Crack 3.6 11.76 $ per4.0 barrel 9.4% 10 11.84 3.0 3.0 9.13 6.3% 8 2.0 6 6.99 3.4% 1.0 4 - 15 16 17 18 LTM PSX S&P 100 Avg Peer Avg Free cash flow yield is defined as (Net cash provid
Slide 68: Disciplined Capital Allocation
Disciplined Capital Allocation 2020 Sources and Uses of Cash Fund sustaining capital to maintain asset integrity $B Committed to a secure, competitive and growing dividend ~1 1.6 - 1.7 Investing in growth projects with attractive returns 7 6 2.0 - 2.5 Intrinsic value approach to share repurchases 1.
Slide 69: Adjusted Capital Expenditures
Adjusted Capital Expenditures 2019E Adjusted Capital Spending Adjusted Capital Expenditures and Investments $B 4.3 3.3 - 3.6 3.0 - 3.5 2.8 2.6 Midstream Sustaining PSX 1.8 Refining and Marketing Midstream Midstream PSXP Marketing PSXP Refining 15 16 17 18 19E 20E Sustaining Growth See appendix for f
Slide 70: Distributions
Distributions Annual Dividend $ PER SHARE Secure, competitive and growing dividend 12.5% increase in 2Q19 to $0.90 per share 3.10 3.50 25% CAGR with nine increases since May 2012 2.45 2.73 2.18 Committed to intrinsic value approach to 15 16 17 18 19 share repurchases Cumulative Distributions Authori
Slide 71: Phillips 66 Partners
Phillips 66 Partners STRATEGIC FIT Total Return Since IPO % 250% PSXP: 200% Competitive cost of capital +215% 150% 100% Strong partnership fundamentals 50% 0% AMZ: Robust growth profile (26%) -50% High distribution coverage Jul-13 Jul-14 Jul-15 Jul-16 Jul-17 Jul-18 Oct-19 Jul-19 Solid financial posi
Slide 72: Financial Flexibility
Financial Flexibility Strong and growing cash flow generation from diverse and integrated portfolio Peer-leading balance sheet with additional capacity Highest credit rating among peers Low debt to capital ratio Significant liquidity PSXP is best performing sponsored MLP and supports Midstream growt
Slide 73: Closing
Closing GREG GARLAND CHAIRMAN & CHIEF EXECUTVE OFFICER Sweeny Fracs 2, 3 and 4 construction OLD OCEAN, TX Investor Day 73
Slide 74: Key Messages
Key Messages Mid-Cycle Adjusted EBITDA $B Operating safely with technology-enabled cost efficiencies Growing Midstream and Chemicals Enhancing returns in Refining and Marketing & Specialties 11 Secure, competitive and growing dividend with commitment to share repurchases 9 Building capability, pursu
Slide 75: Compelling Investment
Compelling Investment Total Shareholder Return % 340% PSX +328% OPERATING EXCELLENCE 300% Peers +163% 260% S&P 100 +148% GROWTH 220% RETURNS 180% 140% DISTRIBUTIONS 100% HIGH-PERFORMING ORGANIZATION 60% 20% Reinvestment -20% May-12 May-13 May-14 May-15 May-16 May-17 May-18 Oct-19 May-19 See appendix
Slide 76: Clifton Ridge Marine Terminal
Clifton Ridge Marine Terminal SULPHUR, LA
Slide 77: 2019 Sensitivities
2019 Sensitivities Annual EBITDA ($MM) Midstream - DCP (net to Phillips 66) 10 ¢/Gal Increase in NGL price 6 10 ¢/MMBtu Increase in Natural Gas price 1 $1/BBL Increase in WTI price 1 Chemicals - CPChem (net to Phillips 66) 1 ¢/Lb Increase in Chain Margin (Ethylene, Polyethylene, NAO) 65 Worldwide Re
Slide 78: Value Chain
Value Chain Global Markets Crude Oil Crude Pipelines, ) Marine, Shipping Refineries Terminals and and Rail Marine Product Pipelines, Petrochemicals Wellhead NGL and Natural Gas “oi Fractionation LPG Export »») Gathering and Pipelines and Storage and Marketing Liquids and Processing Natural Gas Ophit
Slide 79: Midstream Organic Growth
Midstream Organic Growth EXPECTED GROSS CAPITAL OWNERSHIP PSX PROJECT START-UP CAPACITY ($MM) (%) Beaumont Terminal expansion phase IV 1Q 2020 2.2 MMB 80 100 Beaumont Terminal Dock IV1 3Q 2020 200 MBD 70 100 Sweeny Fractionators 2 and 3 4Q 2020 2 x 150 MBD 1,300 1002 Sweeny Fractionator 4 2Q 2021 1
Slide 80: PSXP Gray Oak, South Texas Gateway
PSXP Gray Oak, South Texas Gateway Gray Oak Pipeline Crude oil pipeline from Permian and Eagle Ford to Texas Gulf Coast Expected initial service 4Q 2019 900 MBD West Texas crude capacity 42.25% PSXP ownership South Texas Gateway Terminal Two deep water docks with up to 800 MBD throughput capacity Ex
Slide 81: Liberty, Red Oak Crude Oil Pipeline Systems
Liberty, Red Oak Crude Oil Pipeline Systems Liberty Pipeline From the Rockies and Bakken to Cushing, Oklahoma Initial service expected 1H 2021 24-inch pipeline 50% PSX ownership Red Oak Pipeline From West Texas and Cushing, Oklahoma, to the Texas Gulf Coast Initial service expected 1H 2021 Primarily
Slide 82: Sweeny Hub
Sweeny Hub Sweeny Hub Expansion Adding 450 MBD fractionation capacity by 2Q 2021 Increasing Clemens Storage to 16 MMB by 4Q 2020 Secured y-grade feedstock supply agreements with firm volume commitments Reduces cost of supply for 200 MBD Freeport LPG Export Terminal Provides ethane supply for growing
Slide 83: PSXP Ownership Structure
PSXP Ownership Structure PSXP Public Non-economic general Common partner interest and 75% Unitholders limited partner interest 25% limited partner interest (NYSE: PSXP) Operating Subsidiaries Joint Ventures As of August 1, 2019. Public also owns 13.8 MM convertible preferred units. Investor Day 83
Slide 84: Footnotes
Footnotes General Information disclosed is as of December 31 unless noted otherwise. Numbers may not appear to tie due to rounding. AdvantEdge66 may be abbreviated as AE66. Chevron Phillips Chemical Company may be abbreviated as CPChem. Date Conventions 19 YTD is as of September 30, 2019, or the nin
Slide 85: Footnotes
Footnotes Maps Maps, images and drawings are for informational purposes only and may not be to scale. Slides 8, 9, 10, 26, 27, 29, 30, 31, 32, 34, 39, 47, 50, 55 Investor Day 85
Slide 86: Footnotes
Footnotes Slide 7, 70 Total Distributions include 2014 PSPI share exchange and are through September 30, 2019. Dividend CAGR calculated from initial dividend of $0.20 per share in 3Q 2012 to last increase of $0.90 per share in 2Q 2019. Slide 11 Industry averages are from: Phillips 66 – American Fuel
Slide 87: Footnotes
Footnotes Slides 15, 66, 74 2019 mid-cycle adjusted EBITDA calculated using the following methodology: average adjusted EBITDA from 2012 to 2018 for Refining, Marketing and Specialties, and Corporate; 2018 exit run-rate excluding market impacts plus completed 2019 growth projects for Midstream; aver
Slide 88: Footnotes
Footnotes Slide 26 As of December 31, 2012. Slide 27 Statistics include assets owned by PSXP. 15 crude oil terminals includes rail racks. Forward-looking fractionation capacity and crude exports are based on 100% ownership. Slide 28 2015 capital expenditures exclude $1.5 B investment in DCP Midstrea
Slide 89: Footnotes
Footnotes Slide 39 High density polyethylene (HDPE), Normal alpha olefins (NAO). Metrics shown net of JV capacity and sourced from IHS, Nexant, and company filings. Slide 42 Represents Phillips 66’s proportional share of CPChem’s adjusted EBITDA, as well as self-funded capital expenditures and inves
Slide 90: Footnotes
Footnotes Slide 58 EBITDA estimate based on Phillips 66 proportional share of West Coast Marketing joint venture. Slide 65 Total debt includes capital leases and is net of issuance premiums and discounts. Slides 66, 67, 68 Peer average includes Delek US Holdings, Inc., HollyFrontier Corporation, Mar
Slide 91: Footnotes
Footnotes Slide 72 $20.8 B initial market cap as of May 1, 2012 compared to $24.9 B cumulative distributions including exchanges through September 30, 2019. Slide 75 Chart reflects total shareholder return May 1, 2012 to October 25, 2019. Dividends assumed to be reinvested in stock. Source: Bloomber
Slide 92: Non-GAAP Reconciliation
Non-GAAP Reconciliation SLIDES 15, 66, 74 Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 3Q19 LTM 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 4,883 Less: Income from discontinued operations 48 61 706 — — — — —
Slide 93: Non-GAAP Reconciliation
Non-GAAP Reconciliation SLIDES 15, 28, 66, 74 Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 3Q19 LTM Reconciliation of Midstream Pre-Tax Income to Adjusted EBITDA Midstream pre-tax income $ 88 750 851 147 402 638 1,181 658 Plus: Interest revenue — — — — — (1) — — Depreciation and amortizati
Slide 94: Non-GAAP Reconciliation
Non-GAAP Reconciliation SLIDES 15, 42, 66, 74 Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 3Q19 LTM Reconciliation of Chemicals Pre-Tax Income to Adjusted EBITDA Chemicals pre-tax income $ 1,189 1,361 1,632 1,315 839 716 1,025 881 Plus: None — — — — — — — — Chemicals EBITDA 1,189 1,361 1,6
Slide 95: Non-GAAP Reconciliation
Non-GAAP Reconciliation SLIDES 15, 48, 66, 74 Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 3Q19 YTD 3Q19 LTM Reconciliation of Refining Pre-Tax Income to Adjusted EBITDA Refining pre-tax income $ 5,089 2,782 2,467 3,659 436 2,076 4,535 1,641 3,642 Plus: Depreciation and amortization 655 68
Slide 96: Non-GAAP Reconciliation
Non-GAAP Reconciliation SLIDES 15, 56, 66, 74 Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 3Q19 LTM Reconciliation of Marketing & 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 1,645 Plus: Interest revenue —
Slide 97: Non-GAAP Reconciliation
Non-GAAP Reconciliation SLIDES 15, 66, 74 Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 Reconciliation of Corporate & Other Pre-Tax Loss to Adjusted EBITDA Corporate and Other pre-tax loss $ (673) (694) (680) (729) (747) (895) (853) Plus: Net interest expense 231 258 246 285 321 408 459 Dep
Slide 98: Non-GAAP Reconciliation
Non-GAAP Reconciliation SLIDES 16, 28, 48, 56, 68, 69 Millions of Dollars Capital Expenditures and Investments 2012 2013 2014 2015 2016 2017 2018 3Q19 LTM Midstream Growth $ 548 429 2,021 2,801 1,267 597 1,360 1,645 Sustaining 159 168 152 1,656 186 174 188 227 Total 707 597 2,173 4,457 1,453 771 1,5
Slide 99: Non-GAAP Reconciliation
Non-GAAP Reconciliation SLIDES 16, 42 Millions of Dollars Proportional Share of Select Equity Affiliates Capital Expenditures and Investments* 2012 2013 2014 2015 2016 2017 2018 DCP Midstream (Midstream) $ 1,324 971 776 438 99 268 484 CPChem (Chemicals) Growth 239 403 726 1,136 743 571 131 Sustainin
Slide 100: Non-GAAP Reconciliation
Non-GAAP Reconciliation SLIDE 28 Millions of Dollars 2015 2016 2017 2018 3Q19 LTM Reconciliation of DCP Midstream Pre-Tax Income (Loss) to Adjusted EBITDA DCP Midstream pre-tax income (loss) $ (463) (34) 76 106 (794) Plus: None — — — — — DCP Midstream EBITDA (463) (34) 76 106 (794) Special Item Adju
Slide 101: Non-GAAP Reconciliation
Non-GAAP Reconciliation SLIDE 36 Phillips 66 Partners Reconciliation of Adjusted EBITDA and Distributable Cash Flow to Net Income Millions of Dollars 2015 2016 2017 2018 3Q19 LTM Reconciliation to Net Income Attributable to Phillips 66 Partners Net income attributable to Phillips 66 Partners $ 194 3
Slide 102: Non-GAAP Reconciliation
Non-GAAP Reconciliation SLIDE 36 Phillips 66 Partners Reconciliation of Adjusted EBITDA and Distributable Cash Flow to Net Cash Provided by Operating Activities Millions of Dollars 2015 2016 2017 2018 3Q19 LTM Reconciliation to Net Cash Provided by Operating Activities Net Cash Provided by Operating
Slide 103: Non-GAAP Reconciliation
Non-GAAP Reconciliation SLIDE 41 Millions of Dollars 2015 2016 2017 2018 3Q19 LTM Reconciliation of CPChem Net Income to Adjusted EBITDA CPChem net income $ 2,651 1,687 1,446 2,069 1,767 Plus: Income tax expense (benefit) 74 66 58 68 72 Net interest expense (income) (2) (1) (8) 51 73 Depreciation an
Slide 104: Non-GAAP Reconciliation
Non-GAAP Reconciliation SLIDE 65 Millions of Dollars Except as Indicated Debt-to-Capital Debt-to-Capital Ratio Total Debt Total Equity Ratio September 30, 2019 Phillips 66 Consolidated $ 11,925 27,092 31% PSXP* 3,815 2,201 Phillips 66 Excluding PSXP $ 8,110 24,891 25% December 31, 2018 Phillips 66 C
Slide 105: Non-GAAP Reconciliation
Non-GAAP Reconciliation SLIDE 66 Millions of Dollars 2015 2016 2017 2018 2Q19 LTM Phillips 66 ROCE Numerator Net income $ 4,280 1,644 5,248 5,873 5,658 After-tax interest expense 201 220 285 398 379 GAAP ROCE earnings 4,481 1,864 5,533 6,271 6,037 Special items (34) (57) (2,837) (51) (78) Adjusted R
Slide 106: Non-GAAP Reconciliation
Non-GAAP Reconciliation SLIDE 67 Millions of Dollars (Except as Indicated) 2015 2016 2017 2018 3Q19 LTM Realized Refining Margins Income before income taxes $ 3,659 435 2,076 4,535 3,642 Plus: Taxes other than income taxes 259 253 263 287 267 Depreciation, amortization and impairments 741 770 838 84
Slide 107: Non-GAAP Reconciliation
Non-GAAP Reconciliation FOR REFERENCE Millions of Dollars 2015 2016 2017 2018 3Q19 YTD Marketing & Specialties Pre-Tax ROCE Numerator Pre-tax income $ 1,652 1,261 1,020 1,557 1,056 Pre-tax interest expense — — — — — GAAP ROCE pre-tax income 1,652 1,261 1,020 1,557 1,056 Pre-tax special items (231) —