Investing Building Growing Analyst Meeting April 10, 2014 New York, N.Y.

Transcription

1 Investing Building Growing 2014 Analyst Meeting April 10, 2014 New York, N.Y.

2 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. Words and phrases such as is anticipated, is estimated, is expected, is planned, is scheduled, is targeted, believes, intends, objectives, projects, 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 relating to Phillips 66 s operations (including joint venture operations) are based on management s expectations, estimates and projections about the company, its interests and the energy industry in general on the date this presentation was prepared. These statements are not guarantees of future performance and 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 fluctuations in crude oil, NGL, and natural gas prices, and refining and petrochemical margins; unexpected changes in costs for constructing, modifying or operating our facilities; unexpected difficulties in manufacturing, refining or transporting our products; lack of, or disruptions in, adequate and reliable transportation for our crude oil, natural gas, NGL, and refined products; potential liability from litigation or for remedial actions, including removal and reclamation obligations, under environmental regulations; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets; and other economic, business, competitive and/or regulatory factors affecting Phillips 66 s businesses generally as set forth in our filings with the Securities and Exchange Commission. Phillips 66 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.

3 Vision and Strategy GREG GARLAND Chairman and Chief Executive Officer

4 Vision Enterprise Value Operating excellence High-performing organization Refining Midstream Differentiated value creation M&S Chemicals

5 Operating Excellence Safety and Environmental Total Recordable Rates Incidents per 200,000 Hours Worked Industry Average Permit / Regulatory Exceedance Events Phillips 66 CPChem DCP See appendix for footnotes. 3

6 Operating Excellence Reliability and Costs Refining Capacity Utilization % Operating Costs and SG&A $B 88% 90% 92% 93% 93% See appendix for footnotes. 4

7 Delivering on Commitments 2013 Key Initiatives Growth Returns Establish MLP Progress USGC petrochemical complex Increase advantaged crude runs Maintain capital discipline Manage costs Grow distributions $80 $70 $60 $50 $40 $30 Phillips 66 Stock Price Enhance financial flexibility $20 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 See appendix for footnotes. 5

8 Strategic Drivers North American oil and gas production growth U.S. feedstock and energy cost advantage Developing markets driving global demand Differentiated segment valuations 6

9 Macro Environment - Midstream Macro Environment Midstream U.S. NGL Production and Demand 6 MMBD High Production Growing NGL production 4 Low Production Infrastructure needed to move production to market centers 2 Demand MLP structure attractive for midstream investment See appendix for footnotes. 7

10 Macro Environment Chemicals U.S. Ethane Production and Demand MMBD High Production Low Production 1, Ethylene Production Cost Curve $/ton Europe LPG/Naphtha Other LPG/Naphtha Asia LPG/Naphtha N.A. LPG/Naphtha M.E. LPG/Naphtha 1.0 Demand N.A. Ethane M.E. Ethane Cumulative Capacity MM tons See appendix for footnotes. 8

11 Macro Environment Refining Total N.A. Crude Production Canada Texas North Dakota Rest of U.S. Gulf of Mexico Alaska & California 11.1 MMBD Total U.S. Waterborne Crude Imports MMBD Light/Medium Sweet Light/Medium Sour Heavy Sweet Heavy Sour See appendix for footnotes. 9

12 Manage Risks Major project execution Organizational capabilities Commodity and financial markets Regulatory and fiscal environment 10

13 Differentiated Differentiated Portfolio Portfolio Uniquely positioned 2013 Capital Employed by Region 2013 Capital Employed by Segment Disciplined capital allocator Leading TSR North America Asia Europe ME Midstream M&S Chemicals Refining See appendix for footnotes. 11

14 Corporate Strategy Operating excellence Growth Returns Distributions High-performing organization 12

15 Growth Enablers Assets Portfolio of projects Experienced project management High-performing organization Financial capacity 13

16 Strong Portfolio of Growth Opportunities $12 B growth projects 2014E 2016E Total Capital Program $B Focused on high-valued businesses % of capital program invested in growth Top-quartile MLP growth E 2015E 2016E CPChem DCP Midstream Refining WRB M&S Sustaining See appendix for footnotes. 14

17 Phillips 66 Partners 80% 60% 40% 20% 0% PSXP +61% since IPO Alerian MLP Index +5% Strong sponsorship from Phillips 66 Stable and predictable cash flows Substantial growth potential Low cost capital source Financial flexibility -20% Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 Significant value creation See appendix for footnotes. 15

18 Industry-Leading Returns on Capital 2013 Midstream Chemicals Refining and M&S PSX 15% PSX 26% PSX 15% OKE 8% LYB 24% MPC 15% WLK 21% VLO 10% EPD 7% XOM Chem 18% CVX 7% KMP 6% DOW 9% TSO 5% See appendix for footnotes. 16

19 Total Shareholder Return PSX +142% 140% 100% 60% S&P % 20% -20% May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb-14 See appendix for footnotes. 17

20 Shareholder Distributions Regular dividends Secure Growing Competitive Share repurchase Immediate EPS growth Below intrinsic value Announced $5 B of repurchases Share exchange of $1.4 B Share Exchange Dividends Distributions $B Share Repurchases 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 Total $6.0 B capital returned to shareholders 18

21 Disciplined Capital Allocation Investment Sustain operations Fund capacity growth Generate competitive returns Distributions Double-digit dividend growth rate Repurchase shares Capital Structure Maintain financial flexibility Target debt-to-capital 20 30% 2014E 2016E Distributions Reinvestment 19

22 2014 Key Initiatives Growth Advance infrastructure projects Progress USGC petrochemicals complex Grow Phillips 66 Partners Returns Increase advantaged crude Expand export capability Maintain cost discipline Grow distributions 20

23 Executing Growth Delivering Returns TIM TAYLOR EVP, Commercial, Marketing, Transportation and Business Development

24 Global Portfolio Midstream 18,000+ pipeline miles 10,000+ rail cars 115 MBD NGL fractionated 50/50 DCP JV Chemicals 50/50 CPChem JV 35 manufacturing facilities 33.1 BLbs/y petrochemical and product capacity Refining 15 refineries 410 MBD export capacity 65% light-medium crudes 2,246 MBD crude capacity Marketing & Specialties 10,000+ global outlets 2,158 MBD marketing petroleum products sales 5 lubricant blending plants See appendix for footnotes. 22

25 Value Chains Crude production Crude pipelines, marine and rail Refineries Pipelines and terminals Refined product markets Well Head LPG markets Gas production NGL and natural gas G&P Fractionation and storage Petrochemicals 23

26 Midstream Portfolio NGL Pipelines and fractionation Export terminals Transportation Crude and product pipelines Terminals and storage Rail, marine and trucks 1.5 Capital Program $B DCP Midstream Gathering and processing Pipelines and fractionation E 2015E 2016E Chart reflects 100% Phillips 66 Midstream capital expenditures plus 50% of DCP Midstream capital expenditures. 24

27 NGL Growth Sweeny Fractionator I 2015 Freeport LPG Export Terminal 2016 Future investments Fractionators Condensate splitters Pipelines

28 Transportation Crude oil logistics Rail cars 0.4 EBITDA and CapEx $B Jones Act ships 0.2 Refined product exports E EBITDA CapEx Transportation EBITDA includes noncontrolling interests. 26

29 Transportation Midcon Region Current Capacity (MBD) Crude Pipelines Products Pipelines Terminals

30 Transportation Rockies Region Current Capacity (MBD) Crude Pipelines Products Pipelines Terminals

31 Transportation West Coast Region Current Capacity (MBD) Terminals Current Capacity (MBD) Crude Pipelines Products Pipeline 26 Terminals

32 Transportation Gulf Coast Region Current Capacity (MBD) Crude Pipelines Products Pipelines Terminals 16 30

33 Transportation Rail and Marine Hardisty, AB Stampede, ND Enhancing logistics optionality Clatskanie, OR Casper, WY Berthold, ND Albany, NY 2 Jones Act ships 14 crude barges Bakersfield, CA Chicago, IL Philadelphia, PA Freeport crude loading Increasing crude rail capability 5 rail unloading facilities Rail Rail Crude Rack 1,200 additional rail cars Waterborne See appendix for footnotes. 31

34 Midstream and Refining Logistics NGL fractionators and pipelines EBITDA $B Crude and product pipelines ~1.5 Terminals and storage 0.5 Truck and rail 2013 Midstream excluding DCP Frac I LPG Export Terminal Refining logistics Other Midstream growth 2017E 2013 Midstream EBITDA includes noncontrolling interests. 32

35 Phillips 66 Partners IPO in July 2013 Phillips 66 ownership 73% LP interest 2% GP interest Top-quartile distribution growth $700 MM acquisition in March 2014 $ MM annualized EBITDA 33

36 Phillips 66 Partners Unlocks Value Enterprise Value $B Value uplift for existing portfolio Provides advantaged capital for Midstream growth Increases financial flexibility 0.9 PSX Multiple ~6x (consensus) ~3.7 Public PSX Ownership PSXP LP Multiple ~26x (actual) See appendix for footnotes. 34

37 DCP Midstream Financials EBITDA $B ~$2 B capex total in execution Goliad In Service Front Range In Service O Connor Plant Expansion In Service National Helium Plant Expansion 2Q 2014 Keathley Canyon Connector 4Q 2014 New Plants (North and Permian) E 2015E 2016E ~$4-6 B self-funded capital program from Chart reflects 100% DCP Midstream assuming commodity-neutral growth and includes noncontrolling interests. 35

38 DCP Midstream Executing Growth E Growth CapEx ~$8 B E ~$8 B Assets $16 B+ 58 No. of plants Processing volume (BCFD) NGL production (MBD) Top-tier gatherer and processor ~1,400 NGL pipeline miles 3,000+ Midstream logistics services leader See appendix for footnotes. 36

39 Chemicals Chevron Phillips Chemical Company Capital Program $B Market leader Largest global HDPE producer 2 nd largest global alpha olefins producer th largest N.A. ethylene producer Highest returns amongst peer group E 2015E 2016E Self-funded capital program Chart reflects 100% of CPChem capital expenditures. 37

40 Chemicals CPChem Portfolio 50/50 JV with Chevron 11 joint ventures 2 research facilities Sales into 139 countries Total Net Capacity Income Before Taxes from Continuing Operations SA&S SA&S Int l O&P O&P U.S. 38

41 Chemicals CPChem Growth Plans Hexene Unit 250 kmta Capacity growth 36% U.S. O&P Sweeny Ethylene 90 kmta USGC Petrochemicals 1,500 kmta (ethylene) 1,000 kmta (polyethylene) NAO Expansion ~100 kmta Estimated growth spending $6.5 7 B Estimated EBITDA generated $ B/year Estimated capital expenditures and EBITDA figures are 100% CPChem. Estimated EBITDA based on 2012 industry margins. 39

42 Refining 15 refineries worldwide 2.2 MMBD crude capacity Capital Program $B Malaysia Ireland United Kingdom Germany E 2015E 2016E 40

43 Refining Crude Mix Heavy Light/ Medium Atlantic Basin Central Corridor Worldwide Gulf Coast Western Pacific See appendix for footnotes. 41

44 Improving Refining Returns Increasing advantaged crude Constant Crack Spreads ROCE Improvement Improving yields Expanding export capacity 11% 15% Managing costs 5-Yr Avg Adv Crude Yields & Exports Costs 2018E 42

45 Capturing Advantaged Crude U.S. Refining Crudes % Brent Other Light/Medium Heavy Canadian WTI/WTS Current 2016E See appendix for footnotes. 43

46 Improving Yields Distillate yield of 41% Additional improvements LPG recovery Technology enhancements Product optimization Clean product yield of 85% 44

47 Growing Exports Export Capacity MBD West West Gulf Gulf East East E 45

48 Marketing and Specialties U.S. Marketing Ensure refinery placement International Marketing Retail growth in Europe Specialties 0.2 CapEx $B Selective Lubricants growth E 2015E 2016E 46

49 Commercial Minimize feedstock costs Optimize product channel of trade Capture market opportunities Ensure compliance 47

50 2014 Initiatives Midstream Creating logistics optionality Expanding pipelines Increasing rail capability Advancing Sweeny Hub Refining Investing in advantaged crude Growing export capacity Chemicals Advancing USGC projects 48

51 Financial Update GREG MAXWELL Executive Vice President, Finance and Chief Financial Officer

52 Financial Strategy Dividends and capital funding Double-digit dividend growth rate Share repurchase program PSXP as additional funding source Investment-grade credit ratings 50

53 Shareholder Return Growth PSX Begins Trading Completed PSXP IPO $2 B Share Repurchase Authorized $76.65 $32.76 $1 B Share Repurchase Authorized 25% Dividend Increase $1 B Share Repurchase Authorized 25% Dividend Increase $1 B Share Repurchase Authorized 25% Dividend Increase $700 MM PSXP Acquisition PSPI $1.4 B Exchange 6% PSXP Distribution Increase 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 PSX Stock Price See appendix for footnotes. 51

54 Capital Structure % - 30% Q E Equity ($B) Debt ($B) PSXP ($B) Debt-to-Capital (%) 52

55 Funding Growth Capital Allocation $B Consensus Cash from Operations $B E E Cash Distributions Sustaining CapEx Growth & Investment CapEx Consolidated CapEx Total 53

56 Capital Program Total Capital Program $B Growth Capital $12 B E 2015E 2016E 2014E 2016E CPChem DCP Midstream Refining WRB M&S Sustaining See appendix for footnotes. 54

57 Shareholder Distributions Phillips 66 Common Stock MM shares Dividend Growth /share 7.75 (42) (17) April 2012 Share PSPI Repurchases Exchange Net of Issuances Common Shares March 2014E $B Estimate Q Q Q Q Q % growth vs. 50% peer average See appendix for footnotes. 55

58 Sources and Uses of Cash Outlook $B (2.7) 0.8 (3.4) Beginning Cash Jan 1, 2014 Cash from Operations Capital Expenditures Distributions Other Ending Cash Dec 31, 2014 Cash from Operations is based on analysts consensus. 56

59 Debt and Liquidity Debt Maturity Profile $B Liquidity $B (0.1) Undrawn Revolving Credit Facility Undrawn Receivables Securitization Facility Bonds Cash Revolver Facility Receivable Securitization Facility Total Committed Liquidity Letters of Credit Issued Available Committed Liquidity See appendix for footnotes. 57

60 Phillips 66 Partners Financial Strategy Investment-grade credit rating Target 3.0x debt / EBITDA Top-quartile distributions Annual coverage ratio 1.1x Support Phillips 66 Midstream growth 58

61 Financial Performance Average Capital Employed $B Average Capital Employed by Segment 2014E Corporate Midstream E Consensus Adjusted Refining Chemicals M&S 13.7% $3.6 B $5.89/share ROCE Earnings EPS 13.7% $4.2 B $7.20/share 59

62 Strategic Focus Ensure investment-grade credit ratings Fund capital program Increase distributions Deliver leading total shareholder return 60

63 Compelling Investment Shareholder returns Unique portfolio EBITDA growth Disciplined capital allocation Multiple expansion PSX +142% S&P % May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13 Nov-13 Feb % 100% 60% 20% -20% See appendix for footnotes. 61

64 Appendix 2014 Analyst Meeting April 10, 2014 New York, N.Y.

65 Phillips 66 Midstream and Refining Logistics Crude and Product Pipelines 4,100 miles of crude pipelines with ~1,200 MBD capacity 6,600 miles of product pipelines with ~1,000 MBD capacity 25% interest in REX natural gas pipeline with 1.8 BCFD capacity Terminals and Storage Truck and Rail NGL and NGL Pipelines 33 finished product terminals with ~10 MMBbls storage capacity 12 crude terminals with 5 MMBbls storage capacity 5 LPG terminals 1 coke export facility ~60 MMBbls refinery tankage 8,800 owned and leased rail cars 2,100 crude; 2,100 general service; 2,400 high pressure; 2,200 hoppers Additional 1,200 newly constructed rail cars for crude service 17 rail racks in service of Refining, Transportation, and Lubricants Sentinel trucking venture with 300+ trucks 3 fractionators with 102 MBD capacity 33% interest in Sand Hills and Southern Hills pipelines with 375 MBD capacity NGL fractionation capacity of 102 MBD does not include Phillips 66 s 50% share of Borger s NGL fractionation capacity. 63

66 DCP Midstream Regional Growth 2013 NGL Production MBD Processing Capacity BCFD CapEx 2014E-2016E $B Permian ~ South ~ North ~ Midcon ~ Logistics N/A N/A Plant Throughput Volume BCFD NGL Production MBD E 2016E E 2016E 64

67 Footnotes Slide 3 Injury statistics do not include major projects. Industry Averages are from: Phillips 66 American Fuel & Petrochemical Manufacturers (AFPM) refining data, CPChem American Chemistry Council (XCC), DCP Gas Processors Association (GPA). Slide 4 Refining capacity utilization data excludes Wilhelmshaven and Trainer; costs include discontinued operations. Slide 5 Phillips 66 closing stock price May 1, 2012 to March 28, Slide 7 Source: Historical EIA, Forecast Industry Consultants (production), Phillips 66 internal analysis (demand). Slide 8 Source: U.S. Ethane Historical EIA; U.S. Ethane Forecast Industry Consultants (production), Phillips 66 internal analysis (demand); Ethylene Production Cost Curve Wood Mackenzie 2012 estimated data using Brent Crude $112/bbl and Henry Hub $3/mmbtu. Slide 9 Both charts include crude and condensate. Source: Historical EIA/CAPP; Forecast Phillips 66 internal analysis. Slide 11 Both charts exclude Corporate and include Phillips 66 s share of DCP, CPChem and WRB capital employed. See non-gaap reconciliations. 65

68 Footnotes Slide 14 70% of capital program invested in growth based on 2014E 2016E. Capital program in total and the sustaining category include Phillips 66 proportionate share of DCP, CPChem and WRB, each of which is expected to be self-funding. All periods include capital leases. Slide 15 Chart reflects total unit holder return July 23, 2013 to March 28, Phillips 66 Partners dividends assumed to be reinvested in units on payment date. Source: Bloomberg. Slide 16 Data reflects 2013 Return on Capital Employed (ROCE). To facilitate peer comparison, Phillips 66 s Refining and Marketing & Specialties segments were combined for the Refining and M&S ROCE calculation. Refining and M&S ROCE for MPC, VLO, TSO are total company. Refining and M&S ROCE for CVX estimated based on excluding Chemicals. XOM Chem refers to Exxon Mobil s Chemicals segment. Slide 17 Chart reflects total shareholder return May 1, 2012 to March 28, Phillips 66 dividends assumed to be reinvested in stock on payment date. Slide 22 Midstream list excludes DCP metrics; Chemicals includes CPChem equity interest joint ventures; Refining includes equity interest joint ventures. Rail car count includes 1,200 rail cars managed for CPChem. 66

69 Footnotes Slide 31 Five crude rail unloading facilities includes Santa Maria, for which construction has not yet begun. Slide 34 Phillips 66 ownership consists of ~75% of the total LP and GP units; Phillips 66 multiple of 6x is based on consensus; Phillips 66 Partners multiple is based on actuals as of 3/28/2014. Slide 36 NGL pipeline miles reflect partial ownership. Slide 41 Heavy: API<28 and Sulfur >0.50wt%; Light/Medium: API>28 with Sulfur >0.50wt%. Slide 43 Current refers to 2014 YTD through February 28, Slide 51 Phillips 66 closing stock price May 1, 2012 to March 28, Slide 54 Capital program in total and the sustaining category include Phillips 66 proportionate share of DCP, CPChem and WRB, each of which is expected to be self-funding. Slide 55 Peer average includes DOW, MPC, TSO and VLO. 67

70 Footnotes Slide 57 Charts are as of Dec. 31, Debt maturity profile excludes capital leases. Slide 61 Chart reflects total shareholder return May 1, 2012 to March 28, Phillips 66 dividends assumed to be reinvested in stock on payment date. 68

71 2014 Sensitivities Net Income $MM Midstream 1 /Gal Increase in NGL price 4 10 /MMBtu Increase in Natural Gas price 2 $1/BBL Increase in WTI price 2 Chemicals 1 /Lb Increase in Olefins Chain Margin (Ethylene, Polyethylene, NAO) 35 Worldwide Refining (assuming 94% refining utilization) $1/BBL Increase in Refining Margin 440 Impacts due to Actual Crude Feedstock Differing from Feedstock Assumed in Market Indicators: $1/BBL Widening LLS / Maya Differential (LLS less Maya) 50 $1/BBL Widening WTI / WCS Differential (WTI less WCS) 40 $1/BBL Widening WTI / WTS Differential (WTI less WTS) 15 $1/BBL Widening LLS / WCS Differential (LLS less WCS) 10 $1/BBL Widening ANS / WCS Differential (ANS less WCS) 10 $0.10/MMBtu Increase in Natural Gas price (10) Sensitivities shown above are independent and are only valid within a limited price range. 69

72 2014 Guidance After-Tax Corporate Segment Net Income Losses Pre-Tax Turnaround Costs Pre-Tax Depreciation and Amortization Expense Effective Tax Rate $0.4 B $0.4 B $1.0 B Mid-30's 70

73 Capital Program Millions of Dollars Years Ended December E 2015E 2016E Capital Expenditures and Investments* Consolidated Midstream Transportation $ NGL 302 1,029 2,027 2,537 $ 528 1,417 2,412 2,937 Chemicals Refining 1,066 1,002 1,032 1,067 Marketing and Specialties Corporate $ 1,970 2,681 3,781 4,353 Selected Equity Affiliates DCP $ CPChem 613 1,046 1, WRB $ 1,693 1,941 1,966 1,608 Capital Program** Midstream Transportation $ DCP NGL 302 1,029 2,027 2,537 $ 1,499 2,167 2,912 3,391 Chemicals 613 1,046 1, Refining 1,175 1,147 1,197 1,242 Marketing and Specialties Corporate $ 3,663 4,622 5,747 5,961 *Includes non-cash capital leases of $191 million in **Includes Phillips 66's share of capital spending by DCP, CPChem and WRB, which are expected to be self-funded. 71

74 Capital Program Years Ended December E 2015E 2016E Years Ended December E 2015E 2016E Growth Capital Consolidated Midstream Millions of Dollars Sustaining Capital* Consolidated Midstream Millions of Dollars Transportation $ Transportation $ NGL 301 1,024 2,021 2,533 NGL $ 377 1,262 2,256 2,783 $ Chemicals Chemicals Refining Refining Marketing and Specialties Marketing and Specialties Corporate Corporate $ 744 1,607 2,627 3,159 $ 1,226 1,074 1,154 1,194 Selected Equity Affiliates Selected Equity Affiliates DCP $ DCP $ CPChem , CPChem WRB WRB $ 1,221 1,480 1,516 1,177 $ Growth Capital Program** Midstream Sustaining Capital Program** Midstream Transportation $ Transportation $ DCP DCP NGL 301 1,024 2,021 2,533 NGL $ 1,226 1,862 2,605 3,082 $ Chemicals , Chemicals Refining Refining Marketing and Specialties Marketing and Specialties Corporate Corporate $ 1,965 3,087 4,143 4,336 $ 1,698 1,535 1,604 1,625 *Includes non-cash capital leases of $191 million in **Includes Phillips 66's share of capital spending by DCP, CPChem and WRB, which are expected to be self-funded. 72

75 Non-GAAP Reconciliations Use of Non-GAAP Financial Information This presentation includes the terms adjusted earnings, adjusted earnings per share, EBITDA and return on capital employed. These are non-gaap financial measures. Adjusted earnings, adjusted earnings per share, EBITDA and return on capital employed are included to help facilitate comparisons of company operating performance across periods. References in the presentation to earnings refer to net income attributable to Phillips

76 Non-GAAP Reconciliations 2013 Average Capital Employed in Millions of Dollars Reconciliation of Capital Employed* Midstream GAAP Average Capital Employed 3,158 Plus: Percent of Average Capital Employed $ 13% Proportional share of select equity affiliates debt 2,414 Midstream Adjusted Average Capital Employed $ 5,572 18% Chemicals GAAP Average Capital Employed $ 3,823 16% Plus: Proportional share of equity affiliates debt 1,062 Chemicals Adjusted Average Capital Employed $ 4,885 16% Refining GAAP Average Capital Employed $ 14,252 59% Plus: Basis difference of select equity affiliates 2,973 Proportional share of select equity affiliates debt 13 Refining Adjusted Average Capital Employed $ 17,238 56% Marketing and Specialties GAAP Average Capital Employed $ 2,882 12% Marketing and Specialties Adjusted Average Capital Employed $ 2,882 10% *Total equity plus debt. 74

77 Non-GAAP Reconciliations Average Capital Employed in Millions of Dollars Average Percent of Capital Average Employed Capital in Millions Employed of Dollars Percent of Average Capital Employed Reconciliation of Capital Employed* North America Middle East GAAP Average Capital Employed GAAP Average Capital Employed Midstream 3,158 Chemicals 1,287 Chemicals 2,318 Refining - Refining 11,886 Middle East GAAP Average Capital Employed 1,287 5% Marketing and Specialties 2,156 Plus: Corporate 3,857 Proportional share of select equity affiliates debt 1,032 Discontinued operations 191 Middle East Adjusted Average Capital Employed 2,319 8% North America GAAP Average Capital Employed 23,566 84% Plus: Asia Basis difference of select equity affiliates 2,973 GAAP Average Capital Employed Proportional share of select equity affiliates debt 2,433 Chemicals 52 Less: Refining 618 Corporate 3,857 Asia GAAP Average Capital Employed 670 2% Discontinued operations 191 Plus: North America Adjusted Average Capital Employed 24,924 81% Proportional share of select equity affiliates debt 24 Asia Adjusted Average Capital Employed 694 2% Europe *Total equity plus debt. GAAP Average Capital Employed Chemicals 166 Refining 1,748 Marketing and Specialties 726 Europe GAAP Average Capital Employed 2,640 9% Europe Adjusted Average Capital Employed 2,640 9% 75

78 Non-GAAP Reconciliations Millions of Dollars Year Ended December 31, 2013 Refining Midstream Chemicals and M&S Numerator Net income $ ,641 After-tax interest expense GAAP ROCE earnings ,641 Special items - - (22) Adjusted ROCE earnings $ ,619 Denominator GAAP average capital employed* $ 3,158 3,823 17,134 Adjusted ROCE (percent) 15% GAAP ROCE (percent) 15% *Total equity plus debt. 76

79 Non-GAAP Reconciliations Millions of Dollars First Year Sweeny Fractionator and Freeport Export Facility Estimated net income $ 210 Plus: Estimated income taxes 135 Estimated net interest expense 5 Estimated depreciation and amortization 140 Estimated EBITDA $

80 Non-GAAP Reconciliations Millions of Dollars Years Ended December E Transportation Net Income Attributable to Phillips 66 $ Plus: Net income attributable to noncontrolling interests Income taxes Depreciation and amortization EBITDA* $ *Includes noncontrolling interests. 78

81 Non-GAAP Reconciliations Millions of Dollars Year Ended December Transportation and NGL Net Income Attributable to Phillips 66 $ 259 Plus: Net income attributable to noncontrolling interests 17 Income taxes 143 Depreciation and amortization 88 EBITDA* $ 507 *Includes noncontrolling interests. Midstream and Refining Logistics forecasts were derived on an EBITDA-only basis. Accordingly, elements of net income including tax and depreciation information are not available. Together, these items generally result in a significant uplift in EBITDA over net income. 79

82 Non-GAAP Reconciliations Millions of Dollars Years Ended December E Phillips 66 Partners LP Net Income $ Plus: Depreciation 15.0 Net interest expense 5.4 Amortization of deferred rentals 0.4 Provision for income taxes 0.4 EBITDA $

83 Non-GAAP Reconciliations Millions of Dollars Years Ended December E 2015E 2016E 100% DCP Midstream Net Income Attributable to Members' Interest $ Plus: Net income attributable to noncontrolling interests Income taxes Net interest expense Depreciation and amortization EBITDA* $ 1,157 1,330 1,535 1,595 *Includes noncontrolling interests. 81

84 Non-GAAP Reconciliations Millions of Dollars Low High 100% CPChem Incremental Project Earnings Projections Estimated incremental net income $ 1,000 1,313 Plus: Estimated income taxes Estimated net interest expense - - Estimated depreciation Estimated EBITDA $ 1,300 1,600 82

85 Non-GAAP Reconciliations Years Ended December 31 Millions of Dollars Except as Indicated 5-Year Average Refining - ROCE Numerator Average net income $ 1,103 After-tax interest expense - GAAP ROCE earnings 1,103 Special Items 452 Adjusted ROCE earnings $ 1,555 Denominator GAAP average capital employed* $ 14,252 Adjusted ROCE (percent) 11% GAAP ROCE (percent) 8% *2013 average total equity plus debt. 83

86 Non-GAAP Reconciliations Millions of Dollars Year Ended December Net Income Attributable to Phillips 66 $ 3,726 Adjustments: Net gain on asset sales (23) Exit of business line 34 Tax law impacts (17) Pending claims and settlements (16) Discontinued operations (61) Adjusted Net Income Attributable to Phillips 66 $ 3,643 Net Income Attributable to Phillips 66 Per Share of Common Stock (dollars) $ 6.02 Adjusted Net Income Attributable to Phillips 66 Per Share of Common Stock (dollars) $

87 Non-GAAP Reconciliations Millions of Dollars Except as Indicated Year Ended December Phillips 66 - ROCE Numerator Net Income $ 3,743 After-tax interest expense 178 GAAP ROCE earnings 3,921 Special Items (83) Adjusted ROCE earnings $ 3,838 Millions of Dollars Years Ended December 31 5-Year Average Marketing and Specialties Net Income Attributable to Phillips 66 $ 558 Income taxes 343 Net interest expense (23) Depreciation and amortization 135 Average EBITDA $ 1,013 Denominator GAAP average capital employed* $ 28,163 Discontinued Operations (191) Adjusted average capital employed* $ 27,972 Adjusted ROCE (percent) 13.7% GAAP ROCE (percent) 13.9% *Total equity plus debt. 85