Phillips 66 · NYSE:PSX
Phillips 66 — Investor Presentation (January 2024)
45 slides from Phillips 66's investor presentation, January 2024
Slide 1: Investor Update January 2024
Investor Update January 2024
Slide 2: Cautionary Statement
Cautionary Statement This presentation contains forward-looking statements within the meaning of the federal securities laws. Words such as “anticipated,” “estimated,” “expected,” “planned,” “scheduled,” “targeted,” “believe,” “continue,” “intend,” “will,” “would,” “objective,” “goal,” “project,” “e
Slide 3: Differentiated and Attractive Investment Opportunity
Differentiated and Attractive Investment Opportunity GROWING MAINTAINING Cash Generation Capital Discipline +$4 B mid-cycle adjusted EBITDA 13% average adjusted ROCE target increase (+40%) by 2025 since 2012 75% of EBITDA growth outside $0.3 B of sustaining capital refining efficiencies since 2021 L
Slide 4: Leading Downstream Integrated Energy Provider
Leading Downstream Integrated Energy Provider Positioned for Value Creation Through Economic Cycles MIDSTREAM CHEMICALS • NGL wellhead-to-market MIDSTREAM • 95% advantaged value chain CHEMICALS feedstock portfolio Wellhead-to-market & Manufacture • Crude oil & product highly integrated with chemical
Slide 5: Providing Energy. Improving Lives.
Providing Energy. Improving Lives. Our Products Improve Lives and Make Modern Life Possible 5
Slide 6: Integration Captures Value Across the Value Chain
Integration Captures Value Across the Value Chain Downstream Integration Creates Differentiated Optionality with Value Captured by a Global Commercial Supply and Trading Organization 2025 Mid-Cycle Adjusted EBITDA Target by Segment¹ ($B) Crude Oil Natural Gas / NGLs Crude Gathering & Over 60% Infras
Slide 7: Average Return on Capital Employed
Unique Among Energy Peers: Integrated Downstream Integration is a Competitive Advantage Integration provides for Higher Returns and Reduced Volatility Select Large Cap Energy and Chemicals Companies Quarterly 2013 to 3Q 2023 Renewable Peer¹ Midstream Refining Retail Chemicals Upstream Fuels High Ret
Slide 8: Executing Strategic Priorities to Drive Growth With Capital Discipline
Executing Strategic Priorities to Drive Growth With Capital Discipline Adjusted EBITDA by Segment¹ ($B) Execute Business Transformation $14 Improve Refining Performance Renewable Fuels $10 Refining Capture Value from Wellhead to Market $7.7 M&S Drive Disciplined Growth and Returns Chemicals Midstrea
Slide 9: Reducing Costs to Sustain Higher Cash Generation
Reducing Costs to Sustain Higher Cash Generation Cost Reductions ($MM) Target $1,100 Refining Adjusted $1,000 Operating and $900 SG&A Expenses2 $650 MM $700 Other Segment Operating $650 and SG&A Expenses $550 $225 MM2 $400 $260 $425 $1.4 B Freight and Other Costs $225 MM1 $120 in savings 1Q 2023 2Q
Slide 10: Improving Refining Performance to Capture Additional Value
Improving Refining Performance to Capture Additional Value Assets Positioned to Ensure Long-Term Competitiveness Refining Crude Capacity Utilization vs. Industry Average Planned Market Capture Improvement from 2022-2025 10% Over 60 high-return, low-capital projects to improve market capture 8% Pre-C
Slide 11: Growing Midstream Earnings: Wellhead-to-Market Integration
Growing Midstream Earnings: Wellhead-to-Market Integration Midstream Mid-Cycle Adjusted EBITDA ($B) Balanced Wellhead-to-Market NGL Portfolio +$1.0B +$0.4B Gathering & ~48,000 miles 5.5 BCFD capacity DCP ADJUSTED SYNERGIES Processing 36 plants EBITDA $3.8 Y-grade Long Haul ~6,000 miles² Long Haul Pi
Slide 12: Delivering Durable Returns through Capital Discipline
Delivering Durable Returns through Capital Discipline Steady Investments Drive Strong Returns Adjusted ROCE (% After-Tax) 2024 Capital Budget ($B) 22% $0.9 B Sustaining 17% 11% $0.4 Midstream 1% 9% $0.4 Refining 2019 2020 2021 2022 3Q YTD 2023 $0.1 Marketing & Other Adjusted Capital Expenditures and
Slide 13: Industry Leading Financial Stability
Industry Leading Financial Stability LOW STRONG Net Debt-to-Capital Credit Ratings Through Cycles 33% A3 / BBB+ As of 3Q 2023 since 2014 BALANCED SIGNIFICANT Debt Maturity Profile ($B) Liquidity $9.8 B¹ 4.1 3.2 As of 3Q 2023 2.0 2.2 2.3 1.5 1.1 1.3 1.0 2024 2025 2026 2027 28-32 33-37 38-42 43-47 48+
Slide 14: Improved Cash Generation for Increased Shareholder Returns
Improved Cash Generation for Increased Shareholder Returns Mid-Cycle Adjusted CFO Capital Allocation ($B) >50% Sustaining Capital >$10 Expect to return Dividends Discretionary more than half of operating cash to shareholders $7 ~50% increase in discretionary cash 2022 Mid-Cycle 2025 Mid-Cycle Adjust
Slide 15: Integrated Portfolio Provides Excess Cash Flow Through the Economic Cycles
Integrated Portfolio Provides Excess Cash Flow Through the Economic Cycles Adjusted EBITDA by Segment¹ ($B) Cash from Operating Activities vs Select Cash Uses ($B) Stable, growing earnings from non-refining segments >60% of cash flow available for share repurchases and other discretionary uses after
Slide 16: Compelling Value Proposition
Compelling Value Proposition Competitive Return Profile Across Industries Cumulative Shareholder Distributions ($B) Total Shareholder Distribution Yield1 Since 2012 Spin Dividends Share Repurchases & Exchanges 43-45 Phillips 66 9.1% $37 B 33 37 shareholder 26 28 29 distributions 22 16 13 11 16% 8 S&
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 Continuous Board 3% reduction in Scope 3 emissions intensity from 2019 levels refreshment to foster diverse 38% Women Renewable fuels a c
Slide 18: Differentiated and Attractive Investment Opportunity
Differentiated and Attractive Investment Opportunity GROWING MAINTAINING Cash Generation Capital Discipline +$4 B mid-cycle adjusted EBITDA 13% average adjusted ROCE target increase (+40%) by 2025 since 2012 75% of EBITDA growth outside $0.3 B of sustaining capital refining efficiencies since 2021 L
Slide 19: Appendix
Appendix Beaumont Terminal Dock 4 NEDERLAND, TX
Slide 20: Uniquely Integrated and Diversified Asset Portfolio
Uniquely Integrated and Diversified Asset Portfolio 20
Slide 21: Midstream Provides Connectivity Across the Value Chain
Midstream Provides Connectivity Across the Value Chain With crude, clean products, and NGL infrastructure, Midstream is linked to our Refining, Marketing and Chemicals Businesses Adjusted EBITDA ($B) 72 1 3.8 Thousand miles 2.7 of U.S. pipeline 2.2 2.1 2.3 systems 1.9 719 2019 2020 2021 2022 3Q YTD
Slide 22: Chemicals Positioned to Perform in any Market
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) N.A. = North America 99% 97% 97% 95% 40 S.E. Asia 91% N.A.
Slide 23: Refining Maintains Competitive Positions with Market Access
Refining Maintains Competitive Positions with Market Access Adjusted EBITDA ($B) West Coast 319 MBD 8.9 5.2 5.1 Atlantic Basin 3.0 Rodeo Central Corridor 537 MBD 0.1 531 MBD (2.2) Los Angeles 2019 2020 2021 2022 3Q YTD 2025 2025 2023 Mid-Cycle Mid-cycle Target Capital Expenditures and Investments ($
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 ($B) 2.6 2.3 2.0 1.9 1.5 1.6 2019 2020 2021 2022 3Q YTD 2025 2025 2023 Mid-Cycle Target Capital Expenditures and Investments ($B) 0.4 0.4 Phillips 66® Conoco® 76
Slide 25: A Case Study in Value Creation
A Case Study in Value Creation Rodeo RodeoRenewed, 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 year begin operations in late 1Q 2024 Efficient Capital Cost Ca
Slide 26: Executing the Strategy
Executing the Strategy Transformational efforts increase cash flow, earnings, and value Adjusted EBITDA by Segment ($B) $0.6 $0.2 $14.0 $0.7 $1.1 $1.4 $10.0 $7.7 2017-2019 2022 Mid-Cycle DCP Business Renewable Commercial Chemicals 2025 Mid-Cycle Average Adjusted Adjusted EBITDA Transformation Fuels
Slide 27: Operating Excellence
Operating Excellence Safety improves availability, utilization and market capture Total Recordable Rates 2022 Industry Safety Metrics (Incidents per 200,000 hours worked) Industry Average (Incidents per 200,000 hours worked) Phillips 66¹ CPChem 0.14 Food Agricul., All Construction Petchem. Prof. Pet
Slide 28: 2023 Sensitivities
2023 Sensitivities Annual EBITDA $MM (1) Midstream (2) 10¢/Gal Increase in NGL price 100 10¢/MMBtu Increase in Natural Gas price 6 $1/BBL Increase in WTI price 5 Chemicals - CPChem (net to Phillips 66) 1¢/Lb Increase in Chain Margin (Ethylene, Polyethylene, NAO) 65 Worldwide Refining $1/BBL Increase
Slide 29: Publications
Publications 2022 Human Capital Management 2023 Proxy Statement 2023 Sustainability Report 2022 Year In Review 29
Slide 30: Footnotes
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, or
Slide 31: Footnotes
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 affiliates
Slide 32: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2017 2018 2019 2020 2021 2022 3QLTM 23 Reconciliation of Consolidated Net Income (Loss) to Adjusted EBITDA Net income (loss) $ 5,248 5,873 3,377 (3,714) 1,594 11,391 7,966 Income tax expense (benefit) (1,693) 1,572 801 (1,250) 146 3,248 2,289 Net interest
Slide 33: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2017 2018 2019 2020 2021 2022 3QLTM 23 Reconciliation of Consolidated Net Income (Loss) to Adjusted EBITDA (cont'd) Change in Fair Value of NOVONIX Investment1 — — — — (370) 442 47 EBITDA, Adjusted for Special Items and Change in Fair Value of NOVONIX Inve
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) $ 615 1,088 597 (116) 1,500 4,734 2,674 Plus: Interest revenue (1) — — — — — — Depreciation and amortization 298 310
Slide 35: 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 (Cont'd) EBITDA, Adjusted for Special Items and Change in Fair Value of NOVONIX Investment1,4 $ 897 1,456 1,788 1,588 1,777 2,762 3,505 Other Adjust
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 pre-tax income $ 530 770 947 508 678 1,176 1,213 Plus: Interest revenue (1) — — — — — — Depreciation and amortization 158 166 15
Slide 37: Non-GAAP Reconciliation
Non-GAAP Reconciliation 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 M
Slide 38: Non-GAAP Reconciliation
Non-GAAP Reconciliation 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 Adjustm
Slide 39: Non-GAAP Reconciliation
Non-GAAP Reconciliation 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 Refini
Slide 40: Non-GAAP Reconciliation
Non-GAAP Reconciliation 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)2: Proportional share o
Slide 41: Non-GAAP Reconciliation
Non-GAAP Reconciliation 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
Slide 42: Non-GAAP Reconciliation
Non-GAAP Reconciliation 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
Slide 43: Non-GAAP Reconciliation
Non-GAAP Reconciliation 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
Slide 44: Non-GAAP Reconciliation
Non-GAAP Reconciliation 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 Sustain
Slide 45: Non-GAAP Reconciliation
Non-GAAP Reconciliation Millions of Dollars 2017 2018 2019 2020 2021 2022 3QLTM 23 Phillips 66 Consolidated Capital Expenditures and Investments Growth $ 982 1,704 2,319 1,917 929 1,276 1,620 Sustaining 850 935 1,131 942 931 918 877 Adjusted Capital Expenditures and Investments 1,832 2,639 3,450 2,8