Fourth
Quarter 2020
Earnings Call
and Webcast
January 29, 2021
Sweeny Fractionator
OLD OCEAN, TX
Cautionary Statement
This presentation contains certain forward-looking statements as defined under the federal securities laws. Words and phrases such as "is anticipated," "is estimated," "is expected," "is planned," "is scheduled," "is targeted," "believes," "continues," "intends," "will," "would," "objectives," "goals," "projects," "efforts," "strategies" and similar expressions are used to identify such forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking.Forward-looking statements included in this presentation are based on management's expectations, estimates and projections as of the date they are made. These statements are not guarantees of future performance and you should not unduly rely on them as they involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Factors that could cause actual results or events to differ materially from those described in the forward- looking statements include: the continued ability of Phillips 66 to satisfy its obligations under our commercial and other agreements; the volume of crude oil, refined petroleum products and NGL we or our equity affiliates transport, fractionate, terminal and store; the tariff rates with respect to volumes transported through our regulated assets, which are subject to review and possible adjustment by federal and state regulators; fluctuations in the prices for crude oil, refined petroleum products and NGL; the continuing effects of the COVID-19 pandemic and its negative impact on the demand for refined products; changes in governmental policies relating to crude oil, refined petroleum products or NGL pricing, regulation, taxation, or exports; liabilities associated with the risks and operational hazards inherent in transporting, fractionating, terminaling and storing crude oil, refined petroleum products and NGL; curtailment of operations due to accidents, severe weather (including as a result of climate change) or natural disasters, riots, strikes or lockouts; the inability to obtain or maintain permits, in a timely manner or at all, and the possible revocation or modification of permits; our ability to successfully execute growth strategies; the operation, financing and distribution decisions of our equity affiliates; costs to comply with environmental laws and safety regulations; failure of information technology due to various causes, including unauthorized access or attacks; changes to the costs to deliver and transport crude oil, refined petroleum products and NGL; potential liability from litigation or for remedial actions, including removal and reclamation obligations under environmental regulations; the failure to complete construction of capital projects on time and within budget; general domestic and international economic and political developments including armed hostilities, expropriation of assets, and other political, economic or diplomatic developments, including those caused by public health issues; our ability to comply with our debt covenants and to incur additional indebtedness on favorable terms; changes in tax, environmental and other laws and regulations; and other economic, business, competitive and/or regulatory factors affecting Phillips 66 Partners' businesses generally as set forth in our filings with the Securities and Exchange Commission. Phillips 66 Partners is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
Use of Non-GAAP Financial Measures. Today's presentation includes non-GAAP financial measures. You can find the reconciliations to comparable GAAP financial measures at the end of the presentation materials or in the "Financial Information" section of our website.
2
Executing the Strategy
South Texas Gateway Terminal
INGLESIDE, TX
3
2020 Highlights
Operated safely and reliably
Demonstrated strength of fee-based portfolio while weathering economic downturn
Maintained strong leverage and coverage ratios
Advanced organic growth projects:
Adjusted EBITDA
$MM
1,137 1,268
754
471
2016 | 2017 | 2018 | 2019 |
1,221
2020
- Full operations of Gray Oak Pipeline
- Completion of second dock and 7.7 MMbbls of storage capacity at South Texas Gateway Terminal
- Addition of 7.5 MMbbls storage capacity at Clemens Caverns
- Continued construction of C2G Pipeline
380
Distributable Cash Flow
854 989
572
970
2016 | 2017 | 2018 | 2019 |
2020
4
4Q 2020 Financial Highlights
Adjusted EBITDA | Distributable Cash Flow |
$MM | $MM |
14
3 | |||||
313 | 318 | (6) | |||
243 | 240 |
3Q | Wholly Owned | Joint | 4Q | 3Q | Wholly Owned | Joint | 4Q |
2020 | Assets | Ventures | 2020 | 2020 | Assets | Venture | 2020 |
Distributions |
5
4Q 2020 Overview
$MM (UNLESS OTHERWISE NOTED)
Pasadena Terminal C5+ Tank
PASADENA, TX
Cash and cash equivalents | $ | 7 |
Total debt | 3,909 | |
Revolving credit facility availability | 334 | |
Debt-to-EBITDA ratio1 | 2.9 | |
Coverage ratio | 1.20 |
6
1) Leverage ratio estimated on credit facility covenant basis.
Projects Update
Gray Oak Pipeline Zena Lateral Mentone Terminal
MENTONE, TX
7
Appendix
Non-GAAP Reconciliations
Millions of Dollars | |||||
2016 | 2017 | 2018 | 2019 | 2020 | |
Net income attributable to the Partnership | 301 | 461 | 796 | 923 | 791 |
Plus: | |||||
Net income attributable to Predecessors | 107 | 63 | - | - | - |
Net income attributable to noncontrolling interest | - | - | - | - | 17 |
Net income | 408 | 524 | 796 | 923 | 808 |
Plus: | |||||
Depreciation | 96 | 116 | 117 | 120 | 135 |
Net interest expense | 52 | 99 | 114 | 105 | 120 |
Income tax expense | 2 | 4 | 4 | 3 | 3 |
EBITDA | 558 | 743 | 1,031 | 1,151 | 1,066 |
Plus: | |||||
Proportional share of equity affiliates' net interest, taxes, depreciation and amortization, and impairments | 45 | 66 | 101 | 116 | 172 |
Expenses indemnified or prefunded by Phillips 66 | 6 | 8 | 1 | 1 | 2 |
Transaction costs associated with acquisitions | 4 | 4 | 4 | - | 1 |
Impairments | - | - | - | - | 96 |
Less: | |||||
Gain from equity interest transfer | - | - | - | - | 84 |
Adjusted EBITDA attributable to Predecessors | 142 | 67 | - | - | - |
Adjusted EBITDA attributable to noncontrolling interest | - | - | - | - | 32 |
Adjusted EBITDA | 471 | 754 | 1,137 | 1,268 | 1,221 |
Plus: | |||||
Deferred revenue impacts*† | 11 | 6 | (6) | (6) | 8 |
Less: | |||||
Equity affiliate distributions less than proportional adjusted EBITDA | 28 | 29 | 64 | 56 | - |
Maintenance capital expenditures† | 22 | 50 | 62 | 74 | 97 |
Net interest expense | 52 | 100 | 114 | 105 | 120 |
Preferred unit distributions | - | 9 | 37 | 37 | 41 |
Income taxes paid | - | - | - | 1 | 1 |
Distributable cash flow | 380 | 572 | 854 | 989 | 970 |
* Difference between cash receipts and revenue recognition
9
† Excludes Merey Sweeny capital reimbursements and turnaround impacts
Non-GAAP Reconciliations
Millions of Dollars | |||||
2016 | 2017 | 2018 | 2019 | 2020 | |
Net cash provided by operating activities | 492 | 724 | 892 | 1,016 | 955 |
Plus: | |||||
Net interest expense | 52 | 99 | 114 | 105 | 120 |
Income tax expense | 2 | 4 | 4 | 3 | 3 |
Changes in working capital | 28 | (30) | (20) | 34 | 15 |
Undistributed equity earnings | (1) | 1 | 5 | 3 | (7) |
Impairments | - | - | - | - | (96) |
Gain from equity interest transfer | - | - | - | - | 84 |
Deferred revenues and other liabilities | (9) | (43) | 42 | (5) | 4 |
Other | (6) | (12) | (6) | (5) | (12) |
EBITDA | 558 | 743 | 1,031 | 1,151 | 1,066 |
Plus: | |||||
Proportional share of equity affiliates' net interest, taxes, depreciation and amortization, and impairments | 45 | 66 | 101 | 116 | 172 |
Expenses indemnified or prefunded by Phillips 66 | 6 | 8 | 1 | 1 | 2 |
Transaction costs associated with acquisitions | 4 | 4 | 4 | - | 1 |
Impairments | - | - | - | - | 96 |
Less: | |||||
Gain from equity interest transfer | - | - | - | - | 84 |
Adjusted EBITDA attributable to Predecessors | 142 | 67 | - | - | - |
Adjusted EBITDA attributable to noncontrolling interest | - | - | - | - | 32 |
Adjusted EBITDA | 471 | 754 | 1,137 | 1,268 | 1,221 |
Plus: | |||||
Deferred revenue impacts*† | 11 | 6 | (6) | (6) | 8 |
Less: | |||||
Equity affiliate distributions less than proportional adjusted EBITDA | 28 | 29 | 64 | 56 | - |
Maintenance capital expenditures† | 22 | 50 | 62 | 74 | 97 |
Net interest expense | 52 | 100 | 114 | 105 | 120 |
Preferred unit distributions | - | 9 | 37 | 37 | 41 |
Income taxes paid | - | - | - | 1 | 1 |
Distributable cash flow | 380 | 572 | 854 | 989 | 970 |
* Difference between cash receipts and revenue recognition
10
† Excludes Merey Sweeny capital reimbursements and turnaround impacts
Non-GAAP Reconciliations
Millions of Dollars | ||
Q4 2020 | Q3 2020 | |
Net income attributable to the Partnership | 104 | 206 |
Plus: | ||
Net income attributable to noncontrolling interest | 7 | 10 |
Net income | 111 | 216 |
Plus: | ||
Depreciation | 39 | 35 |
Net interest expense | 32 | 31 |
Income tax expense | 1 | 1 |
EBITDA | 183 | 283 |
Plus: | ||
Proportional share of equity affiliates' net interest, taxes, depreciation and amortization, and impairments | 54 | 45 |
Expenses indemnified or prefunded by Phillips 66 | 1 | 1 |
Impairments | 96 | - |
Less: | ||
Adjusted EBITDA attributable to noncontrolling interest | 16 | 16 |
Adjusted EBITDA | 318 | 313 |
Plus: | ||
Deferred revenue impacts*† | 4 | (3) |
Less: | ||
Equity affiliate distributions less than proportional adjusted EBITDA | 5 | 4 |
Maintenance capital expenditures† | 33 | 21 |
Net interest expense | 32 | 31 |
Preferred unit distributions | 12 | 10 |
Income taxes paid | - | 1 |
Distributable cash flow | 240 | 243 |
* Difference between cash receipts and revenue recognition
11
† Excludes Merey Sweeny capital reimbursements and turnaround impacts
Non-GAAP Reconciliations
Millions of Dollars | ||
Q4 2020 | Q3 2020 | |
Net cash provided by operating activities | 170 | 296 |
Plus: | ||
Net interest expense | 32 | 31 |
Income tax expense | 1 | 1 |
Changes in working capital | 75 | (45) |
Undistributed equity earnings | 2 | - |
Impairments | (96) | - |
Deferred revenues and other liabilities | 1 | 1 |
Other | (2) | (1) |
EBITDA | 183 | 283 |
Plus: | ||
Proportional share of equity affiliates' net interest, taxes, depreciation and amortization, and impairments | 54 | 45 |
Expenses indemnified or prefunded by Phillips 66 | 1 | 1 |
Impairments | 96 | - |
Less: | ||
Adjusted EBITDA attributable to noncontrolling interest | 16 | 16 |
Adjusted EBITDA | 318 | 313 |
Plus: | ||
Deferred revenue impacts*† | 4 | (3) |
Less: | ||
Equity affiliate distributions less than proportional adjusted EBITDA | 5 | 4 |
Maintenance capital expenditures† | 33 | 21 |
Net interest expense | 32 | 31 |
Preferred unit distributions | 12 | 10 |
Income taxes paid | - | 1 |
Distributable cash flow | 240 | 243 |
* Difference between cash receipts and revenue recognition
12
† Excludes Merey Sweeny capital reimbursements and turnaround impacts
Non-GAAP Reconciliations
Millions of Dollars | |
2021 | |
Capital Program | |
Expansion/Growth | 165 |
Maintenance | 135 |
Adjusted capital program | 300 |
Growth capital expected to be cash funded by joint venture partners | 5 |
Capital program | 305 |
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Disclaimer
Phillips 66 Partners LP published this content on 26 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 January 2021 18:55:04 UTC.