Phillips 66 · NYSE:PSX
Phillips 66 — Investor Presentation (September 2022)
55 slides from Phillips 66's investor presentation, September 2022
Slide 1: Investor Update
PHILLIPS @ PROVIDING ENERGY. IMPROVING LIVES. Investor Update | | SEPTEMBER 2022 Freeport Marine Terminal FREEPORT, 1X
Slide 2: Cautionary Statement
a Cautionary Statement This presentation contains certain forward-looking statements. Words and phrases such as “anticipated,” “estimated,” “expected,” “planned,” “scheduled,” “targeted,” “believes,” “continues,” “intends,” “will,” “would,” “objectives,” “goals,” “projects,” “efforts,” “strategies”
Slide 3: Our Business
| Our Business Phillips 66 is a Diversified Energy Manufacturing and Logistics Company (fa) Midstream miles of U.S. ? ? , O O O pipeline systems Provides crude oil and refined product transportation, terminaling and processing services, as well as natural gas and NGL transportation, storage, process
Slide 4: Integrated, Diversified Portfolio
— Integrated, Diversified Portfolio Ferndale GLOBAL ASSETS MAP LEGEND @® Batteries: @ Coke Facility @ cpchem di, cPChem Facility (O&P) @ — Crude Terminal/Pipeline DCP Gathering B® Fractionator San Francisco ( © Fractionator in Progress © Hydrogen Fueling’ © Lubricants Facility —— Natural Gas Pipelin
Slide 5: Executing the Strategy
a Executing the Strategy Enabling Long-Term Value Creation and Positioning for the Future Vision Strategy Providing Energy. Improving Lives. Operating Excellence Committed to safety, environmental stewardship, sustainability, reliability and cost efficiency, while protecting shareholder value Values
Slide 6: Operating Excellence
a Operating Excellence Total Recordable Rates Industry Average @ Industry Safety Metrics (Incidents per 200,000 hours worked) y g (Incidents per 200,000 hours worked) Ee = = 12 = Food Agricul., All Construction Petchem. Prof. Petroleum Phillips 66 Manufact. Crop Manufact. Manufact. &Bus. Refining 79
Slide 7: Long-Term Capital Allocation Framework
Long-Term Capital Allocation Framework $6-7 B mid-cycle CFO Sustaining capital for asset integrity, safety and environmental projects Strong balance sheet and investment grade credit ratings Secure, competitive and growing dividend Intrinsic value approach to share repurchases Continued debt repayme
Slide 8: ESG Summary
ESG Summary Sustainability & ESG are at the heart of our vision to provide energy in ways that improve lives, and recent enhancements to our ESG strategy and disclosures demonstrate our commitment to deliver on this vision Environmental Social Governance sais Environmental impact reduced through air
Slide 9: GHG Emissions Reduction Targets
| GHG Emissions Reduction Targets Lower-carbon Solutions Drive Progress Consistent with our Strategy and Disciplined Capital Allocation Approach Emissions Reduction Targets Intend to lower GHG emissions intensity from 2019 baseline Based on current and future companywide Annual bonus aligns pay with
Slide 10: Emerging Energy
— Emerging Energy Building a Robust Platform Developing lower-carbon business opportunities Commercializing and implementing new technology Leveraging commercial acumen and leadership in research and innovation Continuing capital discipline and emphasis on returns fai) Hydrogen Positioning early to
Slide 11: Midstream
PHILLIPS PROVIDING ENERGY. IMPROVING LIVES. Midstream |
Slide 12: Midstream Portfolio
| Midstream Portfolio Transportation NGL and Other DCP Midstream 22,000+ miles of U.S. pipeline systems 500,000+ BPD fractionation capacity 35 natural gas processing facilities 39 product terminals 260,000 BPD LPG export capacity 5.4 BCFD net natural gas processing 20 crude oil terminals 150,000 BPD
Slide 13: Premier Midstream Business
| Premier Midstream Business Top-quartile safety performance Adjusted EBITDA’ Transportation & NGL ($B) mDCP Diversified portfolio of assets integrated with 19 23 2a 22 Refining and Marketing La nl Tl nl 13 Crude system allows optionality for producers, = refiners and exporters * * 7 a mee Advantage
Slide 14: DCP Strategic Update
a DCP Strategic Update Realignment of Joint Venture Ownership with Enbridge de Restructured and merged strategic joint ventures to Nii, Economic Interests in DCP realign economic and governance interests Before i ' Transaction ! Transaction | 28.26% | 43.31% |! Transaction entered into and closed on
Slide 15: Wellhead to Market Integrated NGL Value Chain
a Wellhead to Market Integrated NGL Value Chain DCP Gathering & Processing and Logistics & Marketing system integrated with Phillips 66 NGL value chain Assets located in key growth basins Provides upstream customers with full wellhead to market service Sweeny/, old OceanS( me ‘Orange he aN Port Arth
Slide 16: Midstream Project Execution
a Midstream Project Execution Sweeny Hub 150 MBD fourth fractionator will bring total Sweeny Hub fractionation capacity to 550 MBD by 3Q 2022 Secured y-grade feedstock supply agreements with firm volume commitments Fractionators fully integrated with 260 MBD Freeport LPG Export Terminal Provides eth
Slide 17: Chemicals
PHILLIPS PROVIDING ENERGY. IMPROVING LIVES. Chemicals |
Slide 18: Chemicals Outlook
| Chemicals Outlook 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 3.5% CAGR Meeting strong demand for food packaging, medical supplies and oth
Slide 19: Chevron Phillips Chemical
a Chevron Phillips Chemical Industry-leading safety performance Adjusted EBITDA! ($B) Proprietary technology Advantaged feedstock portfolio Global marketing network Debottleneck opportunities on 0 18 19 20 2 1H22 Capital Expenditures and Investments! ®= Sustaining Olefins and Polyolefins Capacity Ut
Slide 20: CPChem Sustainability Report
CPChem Sustainability Report Enhancing efforts to eliminate plastic pellet spills by joining Operation Clean Sweep Blue and investing in Circulate Capital Ocean Fund Continuing to combat plastic waste and Product communicate value of plastics Sustainability & Circularity Founding member of Alliance
Slide 21: CPChem Circular Polyethylene
— CPChem Circular Polyethylene Difficult-to-recycle plastic Collection CPChem successfully processed pyrolysis oil in a certified commercial-scale trial and is working to further expand production volumes, targeting annual production of 1 billion pounds of circular polyethylene by 2030 Compieted fir
Slide 22: CPChem Growth Projects
a CPChem Growth Projects U.S. Gulf Coast II World-scale ethylene and polyethylene facilities on US Gulf Coast CPChem 51% equity interest Final investment decision expected in 2022 Ras Laffan Petchem Project World-scale ethylene and polyethylene facility in Qatar CPChem 30% equity interest Other Grow
Slide 23: Refining
Refining | a wu 2 a oso = e 6 n” = a. = = = — > = = a wi = wu cs = 2 => o c a
Slide 24: Enhancing Refining Returns
Enhancing Refining Returns Top-quartile HSE performance Capital and cost discipline Selectively investing for clean product yield and crude flexibility Investing in renewable diesel and sustainable aviation fuel Diverse geographic footprint Adjusted EBITDA ($B) (0.2) Bes 18 19 20 2 1H22 Capital Expe
Slide 25: North America Crude Feedstock Flexibility
— North America Crude Feedstock Flexibility Western Canadian Eastern Canadian West Coast . 364 MBD Atlantic Basin / Europe al 0s 537 MBD 0, ““ Wood River al San Francisco ( Central Corridor 531 MBD Los Angeles >. )j Lake Charles os > Gulf Coast 529 MBD 25 Capacities as of January 1, 2022.
Slide 26: 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 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 gallon
Slide 27: Rodeo Renewed
| Rodeo Renewed Transformation to Large-Scale Renewable Transportation Fuels Production Facility Constructing pre-treatment units and repurposing existing hydro-processing units to process renewable feedstocks * Capital efficient project that leverages existing units Capable of processing most renew
Slide 28: Marketing & Specialties
PHILLIPS PROVIDING ENERGY. IMPROVING LIVES. Marketing & Specialties
Slide 29: Enhancing M&S Returns
— Enhancing M&S Returns Consistent high-return, low-capital business Adjusted EBITDA ($B) Product placement for Refining Expand U.S. retail presence through JV’s a | a a | 18 19 20 21 Distribution of renewable fuels we Leverage brand strength Capital Expenditures and Investments ($B) Site reimaging
Slide 30: Secure Product Placement
| Secure Product Placement United States Market fuels under Phillips 66, Conoco and 76 brands All eligible sites are mobile enabled Direct consumer engagement Extend participation in retail value chain Europe Market fuels under JET and Coop brand names Proven low-cost, high-volume model WASSEASTOF ‘
Slide 31: Financial Strategy
PHILLIPS PROVIDING ENERGY. IMPROVING LIVES. Financial Strategy
Slide 32: 45% 40% 35% 30% 25% 20% 15% 10% 5% 0 0%
45 45% 40 40% 35 35% 30 30% 25 25% 20 20% 15 15% 10 10% 5 5% 0 0%
Slide 33: Consolidated Debt and Liquidity
| Consolidated Debt and Liquidity Debt Maturity Profile as of June 30, 2022 = PSX Bonds ($B) =PSX Revolving Credit Facility 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047 2049 2051 $13.0 B Total Debt as of June 30, 2022 $7.8 B Total liquidity ($5.0 B available RCF + $2.8 B Cash) BB
Slide 34: Adjusted EBITDA and Returns
| Adjusted EBITDA and Returns Adjusted EBITDA Adjusted Earnings ($B) ($ per share) 11.71 Zh 8.28 Ei | is | | | | > jo | (0.89) jo | 8 3 20 al 122 18 19 20 21 1H22 Adjusted ROCE Peer ROCE 2018-2021 Average (% After-Tax) (% After-Tax) Peer 23% Peer Avg 18 19 20 21 1H22 34 See appendix for footnotes
Slide 35: Sustaining
Sustaining Midstream Refining & PSXP Marketing
Slide 36: Distributions
| Distributions Secure, competitive and growing dividend * 18% CAGR with eleven increases!? Committed to shareholder distributions * Repurchased / exchanged 23% of shares initially outstanding? Returned over $30 B to shareholders through dividends, share repurchases and exchanges Announced 5% divide
Slide 37: Slide 37
Slide 38: 2022 Sensitivities
| 2022 Sensitivities Annual EBITDA $MM Midstream - DCP (net to Phillips 66) 10¢/Gal Increase in NGL price 17 Chemicals - CPChem (net to Phillips 66) 1¢/Lb Increase in Chain Margin (Ethylene, Polyethylene, NAO) 65 Worldwide Refining $1/BBL Increase in Gasoline Margin 320 $1/BBL Increase in Distillate
Slide 39: Value Chain
Value Chain Opnittivs 66 QOcrchem Obdce midstream Liquids and Natural Gas NGL and Natural Gas Fractionation Gathering and Pipelines and Storage Processing Wellhead Crude Pipelines, Product Pipelines, Marine, Shipping Refineries Terminals and . and Rail Marine Crude Oil | , a Used Oils, Animal Renewa
Slide 40: Our Energy In Action
a Our Energy In Action 40
Slide 41: General Information
General Information disclosed is as of June 30, 2022, 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 21 is as of December 31, 2021, or the twelve-mont
Slide 42: Footnotes
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 43: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars Except as Indicated 2018 2019 2020 2021 1H 2022 Reconciliation of Consolidated Earnings (Loss) to Adjusted Earnings (Loss) Consolidated Earnings (Loss) 5,595 3,076 (3,975) 1,317 3,749 Pre-tax adjustments: Pending claims and settlements 21 (21) (37) — — Pen
Slide 44: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 1H 2022 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) 1,594 3,839 Less: Income from discontinued op
Slide 45: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 1H 2022 Reconciliation of Phillips 66 Net Income (Loss) to Adjusted EBITDA continued Other Adjustments (pre-tax)3: Proportional share of selected equity affiliates income taxes 105 115 144 118 115 105 128 1
Slide 46: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2018 2019 2020 2021 1H 2022 Reconciliation of Midstream Pre-Tax Income (Loss) to Adjusted EBITDA Midstream pre-tax income (loss) 1,181 684 (9) 1,610 534 Plus: Interest revenue — — — — — Depreciation and amortization 320 304 331 443 192 Midstream EBITDA 1,5
Slide 47: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2017 2018 2019 2020 2021 1H 22 Reconciliation of DCP Midstream Pre-Tax Income (Loss) to Adjusted EBITDA DCP Midstream pre-tax income (loss) 76 106 (784) (958) 185 161 Plus: None — — — — — — DCP Midstream EBITDA 76 106 (784) (958) 185 161 Special Item Adjus
Slide 48: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2018 2019 2020 2021 1H 22 Reconciliation of Chemicals Pre-Tax Income to Adjusted EBITDA Chemicals pre-tax income 1,025 879 635 1,844 669 Plus: None — — — — — Chemicals EBITDA 1,025 879 635 1,844 669 Special Item Adjustments (pre-tax): Impairments by equity
Slide 49: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 1H 22 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) (2,549) 3,159 Plus: Depreciation and amortizati
Slide 50: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 1H 2022 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 1,809 1,081 Plus: Interest re
Slide 51: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 1H 22 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) (974) (509) Plus: Net interest expense 231 25
Slide 52: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2018 2019 2020 2021 1H 22 Proportional Share of Select Equity Affiliates Capital Expenditures and Investments* DCP Midstream (Midstream) 484 472 119 55 31 CPChem (Chemicals) Growth 131 155 104 191 182 Sustaining 208 227 180 176 92 Total 339 382 284 367 274
Slide 53: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2018 2019 2020 2021 1H 2022 2022 Budget Phillips 66 Capital Expenditures and Investments Midstream Growth 1,360 1,605 1,470 501 182 424 Sustaining 188 264 216 237 88 277 Total 1,548 1,869 1,686 738 270 701 Refining Growth 267 409 329 279 192 408 Sustaining
Slide 54: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars (Except as Indicated) 2019 2020 2021 June 30, 2022 Total Debt 11,763 15,893 14,448 12,969 Total Equity 27,169 21,523 21,637 24,573 Debt-to-Capital Ratio 30 % 42 % 40 % 35 % Total Cash 1,614 2,514 3,147 2,809 Net Debt-to-Capital Ratio 27 % 38 % 34 % 29 %
Slide 55: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars (Except as Indicated) 2018 2019 2020 2021 1H 22 Phillips 66 ROCE Numerator Net income (loss) 5,873 3,377 (3,714) 1,594 3,839 After-tax interest expense 398 362 394 459 211 GAAP ROCE earnings (loss) 6,271 3,739 (3,320) 2,053 4,050 After-tax special items (5