Phillips 66 · NYSE:PSX
Phillips 66 — Investor Presentation (November 2020)
77 slides from Phillips 66's investor presentation, Nov 6, 2020
Slide 1: Investor Update November 2020
PROVIDING ENERGY. IMPROVING LIVES. Investor Update November 2020
Slide 2: Forward-looking statements
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. Words and phrases such
Slide 3: Phillips 66 at a glance
3 As of December 31, 2019, with the exception of crude throughput capacity, which is as of January 1, 2020.
Slide 4: Phillips 66 overview
4 As of October 31, 2020. See appendix for additional footnotes.
Slide 5: Freeport Marine Terminal
Freeport Marine Terminal FREEPORT, TX 5
Slide 6: Operating Excellence
a Operating Excellence Total Recordable Rates Refining Crude Capacity Utilization INCIDENTS PER 200,000 HOURS WORKED % 96% 95% 95% 93% 94% an: . 90% 91% 90% Phillips 66 CPChem DCP Midstream ° 79% 79% _m ; l | l | l | l [J [J 1.03 e ‘1 16 7 18 19 3a20 33 ° Phillips 66 = U.S. Industry Average 79 ‘@ e
Slide 7: Long-Term Capital Allocation Framework
— Long-Term Capital Allocation Framework $6-7 B mid-cycle CFO Sources and Uses of Cash Sustaining capital for asset integrity, safety and environmental projects } 1.6 | 10-25 25 Secure, competitive and growing dividend Strong balance sheet and investment grade mere Dividends rows credit rating Growt
Slide 8: Responses to Challenging Business Environment
a Responses to Challenging Business Environment Contributed $3 MM in April to COVID-19 relief efforts Reducing 2020 consolidated capital spending by >$700 MM Reducing costs by >$500 MM Leveraging AdvantEdge66 initiatives Suspended share repurchases Secured additional liquidity while maintaining inve
Slide 9: AdvantEdge66
a AdvantEdge66 UNLOCKING VALUE THROUGH BUSINESS TRANSFORMATION $1.2 B total enhancements by 2022 Total Enhancements 50% - 70% value captured as mid-cycle EBITDA uplift End-to-end value chain optimization perfennntnce Technology-enabled risk reduction Advanced analytics, Artificial Intelligence and W
Slide 10: Sulfur oxides (SOx), nitrous oxides (NOx) and particulate matter (PM).
10 Sulfur oxides (SOx), nitrous oxides (NOx) and particulate matter (PM).
Slide 11: Energy Transition
a Energy Transition POSITIONING PHILLIPS 66 TO BE COMPETITIVE LONG-TERM What we are doing Producing renewable diesel at Humber Refinery Supplying components for lithium-ion batteries Marketing low carbon fuels on U.S. West Coast Improving fuel economy through next generation lubricants Operating hyd
Slide 12: Training hours are as of December 31, 2019. All other metrics are as of
12 Training hours are as of December 31, 2019. All other metrics are as of September 30, 2020
Slide 13: Midstream
PHILLIPS PROVIDING ENERGY. IMPROVING LIVES. Midstream | 4 Beaumont it Terminal NEDERLANDS ?X
Slide 14: Midstream overview
14 Fractionation capacity is as of October 31, 2020. All other data as of December 31, 2019;. DCP Midstream net natural gas processing capacity as of June 30, 2020 is 6.0 BCFD. Statistics include assets owned by Phillips 66 Partners (PSXP). Crude oil terminals includes rail racks.
Slide 15: Midstream capital spending
15 2015 adjusted capital spending excludes $1.5 B investment in DCP Midstream.
Slide 16: As of October 31, 2020. See additional appendix for footnotes.
16 As of October 31, 2020. See additional appendix for footnotes.
Slide 17: Phillips 66 Partners
— Phillips 66 Partners Primarily fee-based midstream assets backed by © Ss ‘Y long-term minimum volume commitments Nl Assets highly integrated with Phillips 66 system Backlog of MLP qualified projects at Phillips 66 e Charles Isomerization Unit WESTLAKE, LA. 17
Slide 18: DCP Midstream
18 DCP Midstream net natural gas processing capacity as of June 30, 2020. See appendix for additional footnotes.
Slide 19: NGL fractionation
19 1) Fracs 1,2, and 3 have 400 MBD total capacity as of October 31, 2020. Frac 2 was operational in 3Q 2020, Frac 3 was operational in October 2020.
Slide 20: Chemicals
PHILLIPS 66) PROVIDING ENERGY. IMPROVING LIVES. ® io tae f! eae sili Chemicals Ll f » da Tis Prrryiene y its ae ‘OLD OCEANy
Slide 21: CPChem overview
21 High density polyethylene (HDPE), Normal alpha olefins (NAO). Metrics shown net of JV capacity and sourced from IHS, Nexant, and company filings. See appendix for additional footnotes.
Slide 22: 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 22 PuLIPS
Slide 23: 1) 50% proportional share to Phillips 66.
23 1) 50% proportional share to Phillips 66.
Slide 24: Polyethylene demand
24 Source: IHS; Polyethylene demand based on 2021 Edition: Fall 2020 Update. Low density polyethylene (LDPE), Linear-low density polyethylene (LLDPE)
Slide 25: Sustainability
a Sustainability Enhancing efforts to eliminate plastic pellet spills CPCHEM PLASTIC PELLET STATISTICS 2019 by joining Operation Clean Sweep Blue and ss . . . . . LE: THAN investing in Circulate Capital Ocean Fund .O2\:es RELEASED Continue to combat plastic waste and 7.515 j i BILLION LBS communicat
Slide 26: Circular Polyethylene
a Circular Polyethylene Difficult-to-recycle plastic Plastic packaging & ‘consumer goods Collection In October, CPChem announced its first U.S. commercial-scale production of | inp polyethylene from recycled mixed-waste a [oye) plastics Lar, Circular polyethylene matches the = advanced performance a
Slide 27: CPChem Potential Growth Projects
CPChem Potential Growth Projects U.S. Gulf Coast II CPChem 51% equity interest ethylene cracker polyethylene units Ras Laffan Petrochemicals Project CPChem 30% equity interest ethylene cracker Two polyethylene units; combined capacity U.S. Gulf Coast 1! SigningiCerem es WASHINGTONs DiC, 7| B
Slide 28: Refining
Refining | a wu 2 a oso = e 6 n” = a. = = = — > = = a wi = wu cs = 2 => o c a
Slide 29: Enhancing Returns
— Enhancing Returns Top-quartile HSE performance Adjusted | EBITDA Strong cash generation across the cycle Ea Ee Capital and cost discipline High-return capital projects Capital Expenditures and Investments wsustaining : Return | Advantaged feedstocks 29
Slide 30: Refining capacities
30 Capacities as of January 1, 2020. See appendix for additional footnotes.
Slide 31: 1) Based on Solomon Associates Report
31 1) Based on Solomon Associates Report
Slide 32: AdvantEdge66
a 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 entir
Slide 33: Renewable fuels projects
33 Information subject to permitting approvals 1) 800 million gallons per year 2) 120 million gallons per year 3) 680 million gallons per year
Slide 34: Information subject to permitting approvals
34 Information subject to permitting approvals
Slide 35: Marketing & Specialties
PROVIDING ENERGY. IMPROVING LIVES. Marketing & Specialties
Slide 36: Marketing & Specialties capital and earnings
36 2019 capital expenditures includes $260 MM related to the investment in the West Coast Marketing joint venture.
Slide 37: Secure Product Placements
| Secure Product Placements United States ~5,000 sites reimaged since program inception All eligible sites are mobile enabled 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 JE
Slide 38: Financial Strategy
Phillips 66 Hea HOUSTON, TX PHILLIPS PROVIDING ENERGY. IMPROVING LIVES. Financial Strategy
Slide 39: Financial Strategy
| Financial Strategy Disciplined capital allocation Strong investment grade credit rating Financial flexibility Secure, competitive and growing dividend Reduce debt as cash flow recovers Share repurchases at appropriate time a aevuienare HOUSTON, TX 39
Slide 40: PSX Debt-to-Capital
PSX Debt-to-Capital, excluding PSXP 40
Slide 41: Debt and liquidity
41 Total debt includes capital leases, commercial paper and is net of unamortized discounts and debt issuance costs.
Slide 42: See appendix for footnotes
42 See appendix for footnotes
Slide 43: Capital spending
Sustaining Midstream Refining & PSXP Marketing 1 43 1) 20E consolidated capital spending inclusive of $0.1 B of cash funded by joint venture partners is expected to be $3.0 B.
Slide 44: Dividend growth
44 Dividend CAGR calculated from initial dividend of $0.20 per share in 3Q 2012 to $0.90 per share in 3Q 2020.
Slide 45: Share price performance
45 Share price as of September 30, 2020. See appendix for additional footnotes.
Slide 46: Phillips 66 Partners
Phillips 66) Partners Phillips 66 Partners Nillips 66) Partners
Slide 47: PSXP ownership
47 As of September 30, 2020. Public also owns 13.8 MM convertible preferred units.
Slide 48: Refineries owned by Phillips 66. See appendix for additional footnotes.
48 Refineries owned by Phillips 66. See appendix for additional footnotes.
Slide 49: PSXP adjusted EBITDA
49 Adjusted EBITDA as shown is attributable to PSXP. Debt-to-EBITDA ratio is calculated on a credit facility covenant basis, which requires certain adjustments to total debt and EBITDA. Coverage ratio estimated on credit facility covenant basis. 20A coverage ratio represents YTD 3Q20, and Debt-to-EB
Slide 50: Phillips 66 Partners
— Phillips 66 Partners Completing Organic Projects South Texas Gateway Terminal Adjusted Capital Spending C2G Pipeline 0.9 Backlog of MLP qualified projects -— 07 at Phillips 66 os | : 16 7 18 19 20E mSustaining Growth Phillip: 66} | 50
Slide 51: Phillips 66 Partners
Phillips 66 Partners oe INGLESIDE, TX PIPELINE AND TERMINAL PROJECTS Gray Oak Pipeline - 42.25% PSxP effective ownership Crude oil pipeline from Permian and Eagle Ford to Texas Gulf Coast Achieved full operations in 2Q 2020 West Texas crude capacity South Texas Gateway Terminal - 25% PSXP ownership
Slide 52: Phillips 66 Partners
Phillips 66 Partners 100% PSXP OWNERSHIP PROJECTS C2G Pipeline New 16 inch ethane pipeline to Gregory, Texas, near Corpus Christi, Texas Expected startup in mid-2021 Supplies Corpus Christi area petrochemical facilities Clemens Caverns Expansion In 2Q 2020, increased Clemens Storage from in connecti
Slide 53: PSXP debt
53 Weighted average cost excludes revolving credit facility. Total debt is net of $32 MM unamortized discounts and debt issuance costs. At September 30, 2020, borrowings of $290 MM were outstanding and $3 MM in letters of credit had been drawn under our $750 MM revolving credit facility
Slide 54: PSXP total unitholder return
54 Chart reflects total unitholder return from July 22, 2013, to September 30, 2020. Distributions assumed to be reinvested in units. PSXP compared against Alerian MLP Index (AMZ). Source: Bloomberg.
Slide 55: Beaumont Terminal
Beaumont Terminal NEDERLAND, TX.
Slide 56: Sensitivities
56 Sensitivities above are independent and are only valid within a limited price range
Slide 57: Midstream growth projects
Gross Capital attributable to incremental EBITDA based on previously disclosed build multiples. 57 1) Capacity expanded from 600 MBD to 800 MBD 2) Sweeny Fractionators 2 and 3 completed as of October 31, 2020 3) 300 MB storage and 80 MBD pipeline capacity expansion 4) Completed expansion from 9 MMB
Slide 58: Value Chain
| Value Chain Global Markets Crude Oil — Crude Pipelines, Product Pipelines, )) Marine, Shipping Refineries Terminals and and Rail Marine Petrochemicals Wellhead NGL and Natural Gas ioeli Fractionation LPG Export » Gathering and Pipelines and Storage and Marketing Liquids and Processing Natural Gas
Slide 59: 4Q 2020 Phillips Outlook
a 4Q 2020 Phillips 66 Outlook Los Angeles Refinery WILMINGTON, CA Global Olefins & Polyolefins utilization Mid-90% Refining crude utilization Market Conditions Refining turnaround expenses (pre-tax) $80 MM - $100 MM Corporate & Other costs (pre-tax) $220 MM - $230 MM 59
Slide 60: General information
General Information disclosed is as of September 30, 2020, unless noted otherwise. Numbers may not appear to tie due to rounding. Chevron Phillips Chemical Company may be abbreviated as CPChem. Date Conventions 19 is as of December 31, 2019; or the twelve-month period ended December 31, 2019, as app
Slide 61: Maps
Maps Maps, images and drawings are for informational purposes only and may not be to scale. 61
Slide 62: Footnotes
Slide 6 Industry averages are from: Phillips 66 – American Fuel & Petrochemical Manufacturers (AFPM) refining data, Chevron Phillips Chemical Company LLC (CPChem) – American Fuel & Petrochemical Manufacturers (AFPM) chemicals data, DCP Midstream, LLC (DCP Midstream) – Gas Processors Association (GPA
Slide 63: Footnotes
Slide 9 The “Total Enhancements” amount represents estimated EBITDA uplift versus a baseline year of 2017. The “Mid-Cycle EBITDA Uplift” amount represents estimated actual mid-cycle EBITDA uplift after consideration for inflation and market movements in a mid-cycle environment through 2019. Slides 4
Slide 64: Reconciliation of Consolidated Earnings to Adjusted Earnings
Millions of Dollars Except as Indicated 2015 2016 2017 2018 2019 Reconciliation of Consolidated Earnings to Adjusted Earnings Consolidated Earnings $ 4,227 1,555 5,106 5,595 3,076 Pre-tax adjustments: Pending claims and settlements 30 (117) (60) 21 (21) Pension settlement expense 80 — 83 67 — Equity
Slide 65: Reconciliation of Phillips 66 Net Income to Adjusted EBITDA
Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 2019 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 3,377 Less: Income from discontinued operations 48 61 706 — — — — — Plus: Income tax expense (benefit) 2,473 1,84
Slide 66: Reconciliation of Midstream Pre-Tax Income to Adjusted EBITDA
Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 2019 Reconciliation of Midstream Pre-Tax Income to Adjusted EBITDA Midstream pre-tax income $ 88 750 851 147 402 638 1,181 684 Plus: Interest revenue — — — — — (1) — — Depreciation and amortization 83 88 91 127 215 299 320 304 Midstream EBITDA 1
Slide 67: Reconciliation of Chemicals Pre-Tax Income to Adjusted EBITDA
Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 2019 Reconciliation of Chemicals Pre-Tax Income to Adjusted EBITDA Chemicals pre-tax income $ 1,189 1,361 1,632 1,315 839 716 1,025 879 Plus: None — — — — — — — — Chemicals EBITDA 1,189 1,361 1,632 1,315 839 716 1,025 879 Special Item Adjustment
Slide 68: Reconciliation of Refining Pre-Tax Income to Adjusted EBITDA
Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 2019 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 1,986 Plus: Depreciation and amortization 655 685 704 738 769 821 840 854 Refining EBITDA 5,744 3,467 3,171 4,397
Slide 69: Reconciliation of Marketing & Specialties Pre-Tax Income to Adjusted EBITDA
Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 2019 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 Plus: Interest revenue — — — (2) — — — — Depreciation and amortization 147
Slide 70: Reconciliation of Corporate & Other Pre-Tax Loss to Adjusted EBITDA
Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 2019 Reconciliation of Corporate & Other Pre-Tax Loss to Adjusted EBITDA Corporate and Other pre-tax loss $ (673) (694) (680) (729) (747) (895) (853) (804) Plus: Net interest expense 231 258 246 285 321 408 459 415 Depreciation and amortization
Slide 71: Reconciliation of DCP Midstream Pre-Tax Income to Adjusted EBITDA
Millions of Dollars 2015 2016 2017 2018 2019 Reconciliation of DCP Midstream Pre-Tax Income (Loss) to Adjusted EBITDA DCP Midstream pre-tax income (loss) $ (463) (34) 76 106 (784) Plus: None — — — — — DCP Midstream EBITDA (463) (34) 76 106 (784) Special Item Adjustments (pre-tax): Pending claims and
Slide 72: Phillips 66 Partners Reconciliation to Net Income
Millions of Dollars 2015 2016 2017 2018 2019 Phillips 66 Partners Reconciliation of Adjusted EBITDA and Distributable Cash Flow to Net Income Net income attributable to Phillips 66 Partners $ 194 301 461 796 923 Plus: Net income attributable to Predecessors 112 107 63 — — Net income 306 408 524 796
Slide 73: Phillips 66 Partners Reconciliation to Operating Cash Flow
Millions of Dollars 2015 2016 2017 2018 2019 Phillips 66 Partners Reconciliation of Adjusted EBITDA and Distributable Cash Flow to Net Cash Provided by Operating Activities Net cash provided by operating activities* $ 392 492 724 892 1,016 Plus: Net interest expense 34 52 99 114 105 Income tax expen
Slide 74: Phillips 66 Capital Expenditures and Investments
Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 2019 Phillips 66 Capital Expenditures and Investments Midstream Growth $ 548 429 2,021 2,801 1,267 597 1,360 1,605 Sustaining 159 168 152 1,656 186 174 188 264 Total 707 597 2,173 4,457 1,453 771 1,548 1,869 Refining Growth 85 164 255 201 344 32
Slide 75: Proportional Share of Select Equity Affiliates
Millions of Dollars 2012 2013 2014 2015 2016 2017 2018 2019 Proportional Share of Select Equity Affiliates Capital Expenditures and Investments* DCP Midstream (Midstream) $ 1,324 971 776 438 99 268 484 472 CPChem (Chemicals) Growth 239 403 726 1,136 743 571 131 155 Sustaining 132 210 160 183 244 205
Slide 76: Debt-to-Capital Ratio
Millions of Dollars Except as Indicated Debt-to-Capital Debt-to-Capital Ratio Total Debt Total Equity Ratio September 30, 2020 Phillips 66 Consolidated $ 14,526 22,305 39 % PSXP* 3,783 2,549 Phillips 66 Excluding PSXP $ 10,743 19,756 35 % December 31, 2019 Phillips 66 Consolidated $ 11,763 27,169 30
Slide 77: Reconciliation of Adjusted ROCE and GAAP ROCE
Millions of Dollars (Except as Indicated) 2015 2016 2017 2018 2019 Phillips 66 ROCE Numerator Net income $ 4,280 1,644 5,248 5,873 3,377 After-tax interest expense 201 220 285 398 362 GAAP ROCE earnings 4,481 1,864 5,533 6,271 3,739 Special items (34) (57) (2,837) (51) 581 Adjusted ROCE earnings $ 4