Phillips 66 · NYSE:PSX
Phillips 66 — Investor Presentation (November 2021)
67 slides from Phillips 66's investor presentation, Nov 4, 2021
Slide 1: Investor Update November 2021
Slide 2: Cautionary Statement
a 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.
Slide 3: Global manufacturing facilities
global manufacturing research and development facilities centers in the U.S. million BPD of crude branded branded throughput capacity U.S. outlets international outlets
Slide 4: Assets map
Ferndale aff pase ee ee ea (66) Phillips 665 xo; ee ce Xv Partners Billings oe Bayway,, © # g San Francisco \ |. a =g, @ Boraer Fae Mount vermont fettyo. Ponca Above @———————— a) wa seat City Los Angeles aman a uy "ASSETS MAP LEGEND cove Facty @ cectem os) 7 fc Paroes D4 cPchem Facity « Lake Charles
Slide 5: Executing the Strategy
a Executing the Strategy Enabling Long-Term Value Creation Vision Strategy Providing Energy. Improving Lives. Operating Excellence Ensuring safety, environmental stewardship, reliability and cost efficiency while protecting shareholder value Values Safety. Honor. Commitment. Growth Enhancing our por
Slide 6: Operating Excellence
Operating Excellence Total Recordable Rates (Incidents per 200,000 hours worked) Industry Average @ Industry Safety Metrics Phillips 66 18 #19 20 3Q YTD 2 See appendix for footnotes cPChem 17 18 19 20 3Q YTD 2 DCP Midstream 79 .79 7 66 64 it 19 20 3a YTD 2 (Incidents per 200,000 hours worked) Dius..
Slide 7: Long-Term Capital Allocation Framework
Long-Term Capital Allocation Framework $6-7 B mid-cycle CFO Sustaining capital for asset integrity, safety and environmental projects Strong balance sheet and investment grade credit ratings Near-term debt repayment priority Secure, competitive, and growing dividend Growth investments with attractiv
Slide 8: 2021 ESG Summary
2021 ESG Summary Sustainability & ESG is at the heart of our vision to provide energy in ways that improve lives, and recent enhancements to our ESG strategy and disclosures demonstrate our commitment to deliver on this vision Environmental a Environmental impact reduced through air, waste and water
Slide 9: Greenhouse Gas Emissions Reduction Targets
Greenhouse Gas Emissions Reduction Targets Lower-Carbon Solutions Drive Progress Consistent with our Strategy and Disciplined Capital Allocation Approach Emissions Reduction Targets Intend to lower GHG emissions intensity by 2030 from 2019 baseline ie) 30% Manufacturing-related emissions (Scope 1 an
Slide 10: Emerging Energy
Emerging Energy Building a Robust Platform Developing lower-carbon business opportunities Targeting $2 billion of EBITDA contribution by 2030 Commercializing and implementing new technology Leveraging commercial acumen and leadership in research and innovation Continuing capital discipline and empha
Slide 11: Energy Research & Innovation
— Energy Research & Innovation Research Advancing Solutions for a Lower-Carbon Future Fuel Cell Resear iliB 66 Research Center Focus areas include solid oxide fuel cells, organic photovoltaic polymers, next-gen batteries and renewable fuels Developing carbon mitigation, lower-carbon hydrogen and imp
Slide 12: Midstream
PHILLIPS PROVIDING ENERGY. IMPROVING LIVES. Midstream |
Slide 13: Midstream Portfolio
| Midstream Portfolio Transportation NGL and Other DCP Midstream 22,000 miles of U.S. pipeline systems 500,000+ BPD fractionation capacity 45 natural gas processing facilities 39 product terminals 200,000 BPD LPG export capacity 4.2 BCFD net natural gas processing 20 crude oil terminals 150,000 BPD
Slide 14: Premier Midstream Business
| Premier Midstream Business Top-quartile safety performance Adjusted EBITDA m PSX & PSXP ($B) =™DCP Diversified portfolio integrated with Refining 19 2.3 2a ls and Marketing 13 L | no : Integrated crude system with optionality for = LF 7 18 19 20 : producers, refiners and exporters 3Q YTD 21 Advant
Slide 15: DCP Midstream
| DCP Midstream Logistics & Marketing and Gathering & Processing North ort! 1.6 BCFD al Wood River Diversified portfolio in premier basins Ponca City Large-scale U.S. NGL producer and gas processor Mid-Continent Permian mMeCEn 1.1 BCFD Integrated NGL supply feeds Phillips 66 Sweeny Hub | Optimizing
Slide 16: Midstream Organic Growth
Midstream Organic Growth Sweeny Hub 150 MBD fourth fractionator will bring total Sweeny Hub fractionation capacity to 550 MBD by 4Q 2022 Secured y-grade feedstock supply agreements with firm volume commitments Fractionators fully integrated with 200 MBD Freeport LPG Export Terminal Provides ethane s
Slide 17: Chemicals
PHILLIPS PROVIDING ENERGY. IMPROVING LIVES. Chemicals |
Slide 18: Feedstock Advantaged Chemicals Portfolio
Feedstock Advantaged Chemicals Portfolio . } ay J > [wes e b Q-Chem | & Il SPCo & S-Chem / Cedar Bayou Orange el ra Port Arthur ™sweeny/Old Ocean High density polyethylene (HDPE), Normal alpha olefins (NAO). Metrics shown net of JV capacity and sourced from IHS, Nexant, and company filings. See appe
Slide 19: Chemicals Value Chain
| Chemicals Value Chain Ie cost Serve growing low-cost Siebel ethane ; feedstock middle class World-scale manufacturing in-demand facilities and products proprietary technology 70,000+ end-user products 19 PuLIPS
Slide 20: Chevron Phillips Chemical
a Chevron Phillips Chemical Industry-leading safety performance Adjusted EBITDA’ ($B) Proprietary technology Advantaged feedstock portfolio Global marketing network ai i El Debottleneck opportunities 3Q YTD 21 Capital Expenditures and Investments! ®= Sustaining Olefins and Polyolefins Capacity Utili
Slide 21: Macro Chemicals Outlook
Macro Chemicals Outlook Well-positioned in North America and Middle East Expanding global middle class is increasing demand for polyethylene at a 4% CAGR Meeting strong demand for food packaging, medical supplies and other consumer products 2018-2020 Ethylene Production Cost Curve (Cents per pound)
Slide 22: 2020 CPChem Sustainability Report
2020 CPChem Sustainability Report Enhancing efforts to eliminate plastic pellet spills by joining Operation Clean Sweep Blue and investing in Circulate Capital Ocean Fund Continuing to combat plastic waste and Product communicate value of plastics Sustainability & Circularity Founding member of Alli
Slide 23: CPChem Circular Polyethylene
— CPChem Circular Polyethylene Difficult-to-recycle plastic Collection Announced first U.S. commercial-scale production of conte pot circular polyethylene from recycled mixed-waste plastics j ; | Using advanced recycling technology to convert plastic waste to valuable liquids that can become new pet
Slide 24: CPChem Growth Projects
a CPChem Growth Projects U.S. Gulf Coast II CPChem 51% equity interest Final investment decision expected in 2022 2,000 kMTA ethylene cracker Two 1,000 kMTA polyethylene units Ras Laffan Petchem Project CPChem 30% equity interest 1,900 kMTA ethylene cracker Two polyethylene units; 1,680 kMTA combine
Slide 25: Refining
Refining | w wu 2 a cs = e 6 ” = a. = =| = — > = = a. wi = ua cs = 2 > o c a
Slide 26: Enhancing Refining Returns
Enhancing Refining Returns Top-quartile HSE performance Capital and cost discipline Selectively investing for clean product yield and crude flexibility Investing in renewable diesel Diverse geographic footprint Adjusted EBITDA ($B) fe] = 7 18 19 20 3Q YTD 21 Capital Expenditures and Investments m Su
Slide 27: North America Crude Feedstock Flexibility
— North America Crude Feedstock Flexibility WESTERN CANADIAN CRUDE a4 Ferndale Atlantic Basin / Europe EASTERN 537 MBD ERE West Coast a teensy 364 MBD Crude Feedstock Slate "MA Wood Ri 4 aad (% Total Crude Runs) al San Francisco ( ‘al Gulf Coast 784 MBD } Los Angeles a Lake Charles A r a “¢ > alAlli
Slide 28: Renewable Fuels
| Renewable Fuels Enhancing Our Business Model for a Sustainable Future Rodeo capacity to produce 8 MBD; full refinery conversion to produce 50+ MBD by 1Q 2024 Humber co-processing capacity to produce 3 MBD from used cooking oil; 5 MBD by 2024 Nevada 3 MBD supply and offtake agreements 1 billion gal
Slide 29: Rodeo Renewed
| Rodeo Renewed Transformation to Large-Scale Renewable Transportation Fuels Production Facility Constructing pre-treatment units and repurposing existing hydrocracking units to process renewable feedstocks * Capital efficient project that leverages existing units Capable of processing any renewable
Slide 30: Marketing & Specialties
PHILLIPS PROVIDING ENERGY. IMPROVING LIVES. Marketing & Specialties
Slide 31: Enhancing M&S Returns
— Enhancing M&S Returns Consistent high-return, low-capital business Adjusted EBITDA ($B) Product placement for Refining severe rane strength | a | a | 7 18 19 20 Site reimaging 3Q YTD 21 Expand U.S. retail presence Capital Expenditures and Investments ($B) Distribution of renewable fuels 0.4 0.1 0.
Slide 32: Secure Product Placement
| Secure Product Placement United States ~5,900 sites reimaged since program inception All eligible sites are mobile enabled Direct consumer engagement Extend participation in retail value chain Europe Proven low-cost, high-volume model Reimaging and high-grading the JET brand Adding new sites in Ge
Slide 33: Financial Strategy
PHILLIPS PROVIDING ENERGY. IMPROVING LIVES. Financial Strategy Phillips 66 Headquarters HOUSTON, TX
Slide 34: Financial Strategy
| Financial Strategy Disciplined capital allocation Strong investment grade credit ratings Financial flexibility Secure, competitive and growing dividend Reduce debt as cash flow recovers Share repurchases at appropriate time 34 PuLIPS
Slide 35: Financial Strength
a Financial Strength Flexibility to execute strategy through the cycle 42% 42% 30% 27% 29% 39% 38% Investment grade credit ratings . ; , 20% 25% 25% PSX: A3 (Moody’s), BBB+ (S&P) ora _ oa * PSXP: Baa3 (Moody’s), BBB (S&P) 215 20.6 . 15.9 Progress towards pre-pandemic debt levels ne 49 10.1 11.2 : $8
Slide 36: Consolidated Debt and Liquidity
— Consolidated Debt and Liquidity Debt Maturity Profile as of September 30, 2021 =PSX Revolving Credit Facility =PSXP Revolving Credit Facility ($B) PSXP Term Loan mPSXP Senior Notes mPSX Senior Notes 2021 2023 2025 2027 2029 2031 2033 2035 Phillips 66, excluding PSXP $11.0 B Total Debt as of Septem
Slide 37: Adjusted EBITDA and Returns
| Adjusted EBITDA and Returns Adjusted EBITDA Adjusted Earnings ($B) ($ per share) po Ei - — 75 — es oa v7 18 19 20 SQYTD 21 v7 18 19 20 3Q YTD 21 Adjusted ROCE Peer ROCE 2018-2020 Average (% After-Tax) (% After-Tax) Peer Avg Peer Avg ~ as % v7 18 19 20 3Q YTD 21 Midstream Peers Refining Peers See a
Slide 38: Sustaining Refining & Marketing
Sustaining Midstream Refining & PSXP Marketing
Slide 39: Distributions
| Distributions Secure, competitive and growing dividend * 18% CAGR with ten increases!2 Committed to shareholder distributions * Repurchased / exchanged 34% of shares initially outstanding2 Returned approximately $29 B to shareholders through dividends, share repurchases and exchanges? 1) Dividend
Slide 40: Total Shareholder Return
| Total Shareholder Return 2 Total Shareholder Return Since IPO Operating Excellence (%) 340% PSX +244% 300% 7 le Growth 260% 220% 180% (@) returns 140% 100% Distributions 60% 20% -20% (oy) High-Performing Organization May-12 May-13 May-14 May-15 May-16 May-17 May-18 May-19 May-20 Oct-21 & o|B Share
Slide 41: Phillips 66 Partners
Phillips 66) Partners Phillips 66 Partners hillips 66) Partners
Slide 42: Phillips 66 to Acquire Phillips 66 Partners
Phillips 66 to Acquire Phillips 66 Partners PSX has entered into a definitive agreement to acquire all of the remaining publicly held units of PSXP All-stock transaction at a fixed exchange ratio of 0.50 PSX shares for each PSXP common unit PSXP preferred units will convert into common units prior t
Slide 43: Phillips 66 Partners Financial Strength and Flexibility
— Phillips 66 Partners Financial Strength and Flexibility Maintain strong leverage and coverage ratios Adlusted EBITDA * Target up to 3.5x Debt / EBITDA $B) * Target greater than 1.2x coverage ratio 1.3 1.2 11 1.0 Investment grade credit ratings 0.8 * BBB (S&P) * Baa3 (Moody’s) 7 18 $750 MM revolvin
Slide 44: Slide 44
Slide 45: 2021 Sensitivities
| 2021 Sensitivities Annual EBITDA $MM Midstream - DCP (net to Phillips 66) 10¢/Gal Increase in NGL price 14 Chemicals - CPChem (net to Phillips 66) 1¢/Lb Increase in Chain Margin (Ethylene, Polyethylene, NAO) 65 Worldwide Refining $1/BBL Increase in Gasoline Margin 350 $1/BBL Increase in Distillate
Slide 46: Value Chain
| Value Chain Liquids and Natural Gas NGL and Natural Gas aneli Fractionation Gathering and Pipelines and Storage Processing Wellhead Crude Pipelines, Product Pipelines, Marine, Shipping J} )) Refineries » Terminals and . and Rail Marine Crude Oil Used Oils, Animal Renewable Fats and Greases Raw Mat
Slide 47: 4Q 2021 Outlook
| 4Q 2021 Outlook Global Olefins & Polyolefins utilization Mid-90% Refining crude utilization Low-80% Refining turnaround expenses (pre-tax) $110 MM - $140 MM Corporate & Other costs (pre-tax) $240 MM - $250 MM
Slide 48: Our Energy In Action
— Our Energy In Action
Slide 49: General
General Information disclosed is as of September 30, 2021, 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 20 is as of December 31, 2020, or the twelve
Slide 50: Footnotes: industry averages and sources
Slide 6 Industry averages are from: Phillips 66 – American Fuel & Petrochemical Manufacturers (AFPM) refining data, Chevron Phillips Chemical LLC (CPChem) – American Fuel & Petrochemical Manufacturers (AFPM) chemicals data, DCP Midstream, LLC (DCP Midstream) – Gas Processors Association (GPA). Phill
Slide 51: Footnotes: emissions definitions
Slide 10 1. Manufacturing-related emissions include Scope 1 and 2. Scope 1 includes all direct emissions by the company such as fuel combustion and fugitive emissions, calculated per the EPA’s Mandatory Greenhouse Gas Reporting Program (GHGRP). Scope 2 includes indirect emissions from imported elect
Slide 52: Adjusted ROCE footnotes
Slide 37 Adjusted ROCE is defined as (Adjusted Net Income + after-tax interest expense + minority interest) / (Average total debt + average equity). Peer ROCE calculations are based on the simple average of 2018 - 2020 ROCE. Source: Company filings adjusted to facilitate comparisons of operating per
Slide 53: Reconciliation of Consolidated Earnings
Millions of Dollars Except as Indicated 3Q YTD 2017 2018 2019 2020 2021 Reconciliation of Consolidated Earnings (Loss) to Adjusted Earnings (Loss) Consolidated Earnings (Loss) 5,106 5,595 3,076 (3,975) 44 Pre-tax adjustments: Pending claims and settlements (60) 21 (21) (37) — Pension settlement expe
Slide 54: Reconciliation of Phillips 66 Net Income
Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 2019 2020 3Q YTD 2021 Reconciliation of Phillips 66 Net Income (Loss) to Adjusted EBITDA Phillips 66 net income (loss) $ 4,131 3,743 4,797 4,280 1,644 5,248 5,873 3,377 (3,714) 223 Less: Income from discontinued operations 48 61 706 — — — — — —
Slide 55: Reconciliation of Midstream Pre-Tax Income
Millions of Dollars 3Q YTD 2017 2018 2019 2020 2021 Reconciliation of Midstream Pre-Tax Income (Loss) to Adjusted EBITDA Midstream pre-tax income (loss) 638 1,181 684 (9) 1,017 Plus: Interest revenue (1) — — — — Depreciation and amortization 299 320 304 331 281 Midstream EBITDA 936 1,501 988 322 1,2
Slide 56: Reconciliation of Chemicals Pre-Tax Income
Millions of Dollars 3Q YTD 2017 2018 2019 2020 2021 Reconciliation of Chemicals Pre-Tax Income to Adjusted EBITDA Chemicals pre-tax income 716 1,025 879 635 1,408 Plus: None — — — — — Chemicals EBITDA 716 1,025 879 635 1,408 Special Item Adjustments (pre-tax): Impairments by equity affiliates 64 — —
Slide 57: Reconciliation of Refining Pre-Tax Income
Millions of Dollars 3Q YTD 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Reconciliation of Refining Pre-Tax Income (Loss) to Adjusted EBITDA Refining pre-tax income (loss) $ 5,089 2,782 2,467 3,659 436 2,076 4,535 1,986 (6,155) (2,895) Plus: Depreciation and amortization 655 685 704 738 769 821
Slide 58: Reconciliation of Marketing & Specialties Pre-Tax Income
Millions of Dollars 3Q YTD 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 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 1,433 1,446 1,311 Plus: Interest revenue — — — (2) — — — — — — D
Slide 59: Reconciliation of Corporate & Other Pre-Tax Loss
Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 2019 2020 Reconciliation of Corporate & Other Pre-Tax Loss to Adjusted EBITDA Corporate and Other pre-tax loss $ (673) (694) (680) (729) (747) (895) (853) (804) (881) Plus: Net interest expense 231 258 246 285 321 408 459 415 485 Depreciation an
Slide 60: Reconciliation of DCP Midstream Pre-Tax Income
Millions of Dollars 3Q 2021 2017 2018 2019 2020 YTD Reconciliation of DCP Midstream Pre-Tax Income (Loss) to Adjusted EBITDA DCP Midstream pre-tax income (loss) 76 106 (784) (958) 74 Plus: None — — — — — DCP Midstream EBITDA 76 106 (784) (958) 74 Special Item Adjustments (pre-tax): Impairments — — 8
Slide 61: Phillips 66 Partners Reconciliation of Adjusted EBITDA and Distributable Cash Flow
Millions of Dollars 2017 2018 2019 2020 3Q YTD 2021 Phillips 66 Partners Reconciliation of Adjusted EBITDA and Distributable Cash Flow to Net Income Net income attributable to the Partnership 461 796 923 791 449 Plus: Net income attributable to Predecessors 63 — — — — Net income attributable to nonc
Slide 62: Phillips 66 Partners Reconciliation to Net Cash from Operating Activities
Millions of Dollars 2017 2018 2019 2020 3Q YTD 2021 Phillips 66 Partners Reconciliation of Adjusted EBITDA and Distributable Cash Flow to Net Cash Provided by Operating Activities Net cash provided by operating activities* 724 892 1,016 955 851 Plus: Net interest expense 99 114 105 120 96 Income tax
Slide 63: Phillips 66 Capital Expenditures and Investments
Millions of Dollars 2017 2018 2019 2020 Phillips 66 Capital Expenditures and Investments Midstream Growth 597 1,360 1,605 $ 1,470 Sustaining 174 188 264 216 Total 771 1,548 1,869 1,686 Refining Growth 323 267 409 329 Sustaining 530 559 592 487 Total 853 826 1,001 816 Marketing & Specialties Growth 6
Slide 64: Proportional Share of Select Equity Affiliates
Millions of Dollars 2017 2018 2019 2020 Proportional Share of Select Equity Affiliates Capital Expenditures and Investments* DCP Midstream (Midstream) 268 484 472 119 CPChem (Chemicals) Growth 571 131 155 104 Sustaining 205 208 227 180 Total 776 339 382 284 WRB (Refining) 126 156 175 175 Select Equi
Slide 65: Debt-to-Capital
Millions of Dollars Except as Indicated Debt-to-Capital Debt-to-Capital Ratio Total Debt Total Equity Ratio September 30, 2021 Phillips 66 Consolidated $ 14,910 20,597 42 % PSXP* 3,896 2,428 Phillips 66 Excluding PSXP $ 11,014 18,169 38 % December 31, 2020 Phillips 66 Consolidated $ 15,893 21,523 42
Slide 66: Phillips 66 ROCE
Millions of Dollars (Except as Indicated) 3Q YTD 2017 2018 2019 2020 2021 Phillips 66 ROCE Numerator Net income (loss) 5,248 5,873 3,377 (3,714) 223 After-tax interest expense 285 398 362 394 348 GAAP ROCE earnings (loss) 5,533 6,271 3,739 (3,320) 571 Special items (2,837) (51) 581 3,598 1,232 Adjus
Slide 67: 2021 Guidance
Millions of Dollars 2021 Guidance1 Sustaining Growth Total Capital Spending Midstream Phillips 662 $ 160 150 310 Phillips 66 Partners3 135 170 305 295 320 615 Chemicals — — — Refining 521 255 776 Marketing & Specialties 65 51 116 Corporate & Other 166 — 166 Phillips 66 Consolidated 1,047 626 1,673 L