psx q2 2016 press release slides final

PHILLIPS 66 SECOND QUARTER CONFERENCE CALL July 29, 2016

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 NGL, crude oil, petroleum products and natural gas prices, and refining, marketing 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 NGL, crude oil, natural gas 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.

This 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 “Investors” section of our website.

CAUTIONARY STATEMENT

2

3

EXECUTING THE STRATEGY

4

OVERVIEW 2Q 2016

Adjusted Earnings $499 MM

Adjusted EPS $0.94

Operating cash flow $1.2 B

Capital expenditures and investments $620 MM

Shareholder distributions 1 $571 MM

(1) Shareholder distributions include dividends and share repurchases

Net-debt-to-capital ratio 22%

Annualized adjusted YTD ROCE 6%

PSXP equity offering proceeds $656 MM

360

499

(1)

34

66 24

16

1Q 2016

Adjusted

Earnings

Midstream Chemicals Refining Marketing

& Specialties

Corporate

& Other

2Q 2016

Adjusted

Earnings

2Q 2016 Adjusted Earnings

$MM

39 (111) 152 190 229

ADJUSTED EARNINGS 2Q 2016

5

40 39

12

(7)

(6)

1Q 2016

Adjusted

Earnings

Transportation NGL DCP

Midstream

2Q 2016

Adjusted

Earnings

MIDSTREAM 2Q 2016

65 (17) (9)


6

$MM Transportation planned maintenance

NGL impacted by timing of seasonal

storage and project expenses

DCP Midstream benefited from higher

volumes, rising commodity prices and

self-help initiatives

16% increase in PSXP distributions to

Phillips 66

6

156 190

25 9 0

1Q 2016

Adjusted

Earnings

Olefins &

Polyolefins

Specialties,

Aromatics &

Styrenics

Other 2Q 2016

Adjusted

Earnings

CHEMICALS 2Q 2016

170 25 (5)


7

$MM

Higher ethylene chain cash margin

91% O&P capacity utilization

Strong global demand

7

86

152

31

(63)

35

63

1Q 2016

Adjusted

Earnings

Atlantic

Basin /

Europe

Gulf Coast Central

Corridor

West Coast 2Q 2016

Adjusted

Earnings

$MM

REFINING 2Q 2016

8

35 55 5 57


100% crude utilization

84% clean product yield

$7.13/BBL realized margin

13.84

7.13

(2.79)

(3.41)

2.22

(2.73)

Market

3:2:1

Configuration Secondary

Products

Feedstock Other Realized

Margin

WORLDWIDE REFINING $/BBL

REFINING MARGINS – MARKET VS. REALIZED 2Q 2016

9

Avg Market Crude: $46.17/BBL 52% Market Capture

205 229

37

(13)

1Q 2016

Adjusted

Earnings

Marketing

& Other

Specialties 2Q 2016

Adjusted

Earnings

MARKETING AND SPECIALTIES 2Q 2016

199 30


10

Strong global Marketing margins

Higher Marketing volumes

Lower Base Oil margins

$MM

(127)(111)

2

14

1Q 2016

Adjusted

Net Loss

Net Interest

Expense

Corporate

Overhead

& Other

2Q 2016

Adjusted

Net Loss

$MM

CORPORATE AND OTHER 2Q 2016

11

3.1

2.2

0.7

(1.3)

1.3 0.1

(1.4)

(0.3)

December 31,

2015Cash

Balance*

CFO

(excludingworking

capital)

Working

Capital

PSXP Equity

Proceeds

Capital

Expenditures& Investments

Shareholder

Distributions

Other June 30,

2016Cash

Balance*

$B

CASH FLOW YTD 2016

12

* Includes cash and cash equivalents

13

Global Olefins & Polyolefins utilization Mid-90%

Refining crude utilization Mid-90%

Effective income tax rate Mid-30%

Corporate & Other costs (after-tax) $115 MM - $125 MM

OUTLOOK 3Q 2016

Refining turnaround expenses (pre-tax) $100 MM - $120 MM

PHILLIPS 66 SECOND QUARTER 2016 CONFERENCE CALL

Questions and Answers

PHILLIPS 66 SECOND QUARTER 2016 CONFERENCE CALL

Appendix

ESTIMATED SENSITIVITIES 2016

16 Sensitivities shown above are independent and are only valid within a limited price range

Midstream - DCP (net to Phillips 66)

10¢/Gal Increase in NGL price 25

10¢/MMBtu Increase in Natural Gas price 2

$1/BBL Increase in WTI price 1

Chemicals - CPChem (net to Phillips 66)

1¢/Lb Increase in Chain Margin (Ethylene, Polyethylene, NAO) 35

Worldwide Refining

$1/BBL Increase in Gasoline Margin 230

$1/BBL Increase in Distillate Margin 200

$1/BBL Widening LLS / Maya Differential (LLS less Maya) 45

$1/BBL Widening WTI / WCS Differential (WTI less WCS) 40

$1/BBL Widening WTI / WTS Differential (WTI less WTS) 20

$1/BBL Widening LLS / Medium Sour Differential (LLS less Medium Sour) 15

$1/BBL Widening ANS / WCS Differential (ANS less WCS) 10

10¢/MMBtu Increase in Natural Gas price (10)

Impacts due to Actual Crude Feedstock Differing from Feedstock Assumed in Market Indicators:

Annual Net Income $MM

22.4 22.0

23.9 23.6

24.1

22.0

21.6

23.1 22.8 22.9

6.1 8.6 8.9 8.8 8.9

6.1

8.6 7.8 7.7 7.7

5.4 5.2

3.1 1.7 2.2

5.0 5.2

3.0 1.7 2.2

21%

28%27% 27% 27%

22%

28%

25% 25% 25%

3%

13%

20%

23%

22%

5%

14%

17%

21%

19%

2013 2014 2015 1Q

2016

2Q

2016

2013 2014 2015 1Q

2016

2Q

2016

Equity $B Debt $B Cash & Cash Equivalents $B Debt-to-Capital Net-Debt-to-Capital

20%-30%

CAPITAL STRUCTURE 2013 – 2016

17

Consolidated PSX Excluding PSXP

16.13

6.15

(3.78)

(1.77)

(1.75)

(2.68)

Market

3:2:1


Products


Margin

ATLANTIC BASIN / EUROPE $/BBL


18

Market 3:2:1 – Dated Brent / Gasoline 83.7 RBOB NYH / Diesel 15ppm NYH

Brent: $45.57/BBL 101% Crude Capacity Utilization 38% Market Capture

10.39

5.18

(2.56)

(3.94)

4.11

(2.82)

Market

3:2:1


Products


Margin

GULF COAST $/BBL


19

Market 3:2:1 – LLS / Gasoline 85 CBOB / Diesel 61 8ppm

LLS: $47.34/BBL 99% Crude Capacity Utilization 50% Market Capture

13.04

8.65

(1.64)

(3.91)

4.09

(2.93)

Market

3:2:1


Products


Margin

CENTRAL CORRIDOR $/BBL


20

Market 3:2:1 – WTI / Gasoline Unl Sub Octane Group 3 / ULSD Group 3

WTI: $45.48/BBL 101% Crude Capacity Utilization 66% Market Capture

18.34

10.94

(2.82)

(4.53)

2.31

(2.36)

Market

3:2:1


Products


Margin

WEST COAST $/BBL


21

Market 3:2:1 – ANS Spot / Los Angeles CARBOB / Los Angeles No. 2 CARB

ANS: $45.72/BBL 97% Crude Capacity Utilization 60% Market Capture

1,002

499

(9)

(105)

(452)

47 16

2Q 2015

Adjusted

Earnings

Midstream Chemicals Refining Marketing

& Specialties

Corporate

& Other

2Q 2016

Adjusted

Earnings


$MM

ADJUSTED EARNINGS 2Q 2016 VS. 2Q 2015

22

39 (111) 152 190 229

48

39 (25)

0

16

2Q 2015

Adjusted

Earnings

Transportation NGL DCP

Midstream

2Q 2016

Adjusted

Earnings

$MM

MIDSTREAM 2Q 2016 VS. 2Q 2015

23

65 (17) (9)


295

190

(97)(13)

5

2Q 2015

Adjusted

Earnings

Olefins &

Polyolefins

Specialties,

Aromatics &

Styrenics

Other 2Q 2016

Adjusted

Earnings

$MM

CHEMICALS 2Q 2016 VS. 2Q 2015

24

170 (5) 25


604

152

(55)

(78)

(161)

(158)

2Q 2015

Adjusted

Earnings

Atlantic

Basin /

Europe

Gulf

Coast

Central

Corridor

West Coast 2Q 2016

Adjusted

Earnings

$MM

REFINING 2Q 2016 VS. 2Q 2015

25

35 55 5 57


182

229

65

(18)

2Q 2015

Adjusted

Earnings

Marketing

& Other

Specialties 2Q 2016

Adjusted

Earnings

$MM

MARKETING AND SPECIALTIES 2Q 2016 VS. 2Q 2015

26

199 30


(127)(111)

(3)

19

2Q 2015

Adjusted

Net Loss

Net Interest

Expense

Corporate

Overhead

& Other

2Q 2016

Adjusted

Net Loss

$MM

CORPORATE AND OTHER 2Q 2016 VS. 2Q 2015

27

28

NON-GAAP RECONCILIATIONS

2016

Jun YTD 2Q 1Q Jun YTD 2Q

Phillips 66

Net Income (Loss) Attributable to Phillips 66 881$ 496$ 385$ 1,999$ 1,012$

Pre-tax Adjustments:

Asset dispositions - - - (250) (132)

Impairments by equity affiliates 6 - 6 194 194

Certain tax impacts - - - (5) (5)

Pending claims and settlements (45) - (45) - -

Recognition of deferred logistics commitments 30 30 - - -

Tax impact of adjustments * (13) (27) 14 (102) (67)

Adjusted Net Income (Loss) Attributable to Phillips 66 859$ 499$ 360$ 1,836$ 1,002$

Net Income (Loss) Attributable to Phillips 66 Per Share of Common Stock (dollars) 1.65$ 0.93$ 0.72$ 3.63$ 1.84$

Adjusted Net Income (Loss) Attributable to Phillips 66 Per Share of Common Stock (dollars) 1.61$ 0.94$ 0.67$ 3.33$ 1.83$

Millions of Dollars

Except as Indicated

2015

* We generally tax effect taxable U.S.-based special items using a combined federal and state statutory income tax rate of approximately 38% percent. Taxable special items attributable to

foreign locations likewise use a local statutory income tax rate. Nontaxable events reflect zero income tax. These events include, but are not limited to, most goodwill impairments, transactions

legislatively exempt from income tax, transactions related to entities for which we have made an assertion that the undistributed earnings are permanently reinvested, or transactions occurring

in jurisdictions with a valuation allowance.

29



Midstream

Net Income (Loss) Attributable to Phillips 66 104$ 39$ 65$ (11)$ (78)$




Tax impact of adjustments 14 - 14 (68) (68)

Adjusted Net Income (Loss) Attributable to Phillips 66 79$ 39$ 40$ 115$ 48$

Chemicals

Net Income (Loss) Attributable to Phillips 66 346$ 190$ 156$ 498$ 295$


Tax impact of adjustments - - - - -


Except as Indicated

2016 2015

Millions of Dollars

30



Refining

Net Income (Loss) Attributable to Phillips 66 235$ 149$ 86$ 1,142$ 604$


Asset dispositions - - - (8) -


Tax impact of adjustments (27) (27) - (35) -

Adjusted Net Income (Loss) Attributable to Phillips 66 238$ 152$ 86$ 1,099$ 604$

Marketing & Specialties






Corporate and Other

Net Income (Loss) Attributable to Phillips 66 (238)$ (111)$ (127)$ (248)$ (123)$


Certain tax impacts - - - (5) (5)

Tax impact of adjustments - - - 1 1

Adjusted Net Income (Loss) Attributable to Phillips 66 (238)$ (111)$ (127)$ (252)$ (127)$

2016 2015

Millions of Dollars

Except as Indicated

31



Midstream - Transportation





Midstream - NGL

Net Income (Loss) Attributable to Phillips 66 (28)$ (17)$ (11)$ 22$ 8$



Adjusted Net Income (Loss) Attributable to Phillips 66 (28)$ (17)$ (11)$ 22$ 8$

Midstream - DCP Midstream

Net Income (Loss) Attributable to Phillips 66 (5)$ (9)$ 4$ (163)$ (151)$




Tax impact of adjustments 14 - 14 (68) (68)

Adjusted Net Income (Loss) Attributable to Phillips 66 (30)$ (9)$ (21)$ (37)$ (25)$

Millions of Dollars

Except as Indicated

2016 2015

32



Refining - Atlantic Basin / Europe




Tax impact of adjustments (27) (27) - (38) -


Refining - Gulf Coast





Refining - Central Corridor





Refining - West Coast

Net Income (Loss) Attributable to Phillips 66 51$ 57$ (6)$ 374$ 215$


Asset dispositions - - - (8) -

Tax impact of adjustments - - - 3 -

Adjusted Net Income (Loss) Attributable to Phillips 66 51$ 57$ (6)$ 369$ 215$

2016 2015

Millions of Dollars

Except as Indicated

33



Marketing & Specialties - Marketing & Other






Marketing & Specialties - Specialties





Millions of Dollars

Except as Indicated

20152016

34

* Total equity plus total debt


2016 June YTD Phillips 66 Midstream Chemicals RefiningMarketing

& Specialties

Numerator ($MM)

Net Income 914 141 346 235 434

After-tax interest expense 110 - - - -

GAAP ROCE earnings 1,024 141 346 235 434

Special Items (22) (25) - 3 -

Adjusted ROCE earnings 1,002 116 346 238 434

Denominator ($MM)

GAAP average capital employed* 32,877 8,838 5,123 13,927 2,771

2016 Annualized Adjusted ROCE 6% 3% 14% 3% 31%

2016 Annualized GAAP ROCE 6% 3% 14% 3% 31%

35


Phillips 66

Consolidated

Phillips 66

Partners *

Adjusted

Phillips 66

Total Debt 8,862$ 1,131$ 7,731$

Total Equity 24,066$ 1,195$ 22,871$

Debt-to-Capital Ratio 27% 25%

Total Cash 2,232$ 36$ 2,196$

Net-Debt-to-Capital Ratio 22% 19%

Millions of Dollars

2016

2Q

* PSXP's third-party debt and Phillips 66's noncontrolling interest attributable to PSXP

36


Growth Sustaining Total Growth Sustaining Total

Capital expenditures and investments

Midstream 240$ 44$ 284$ 657$ 73$ 730$

Refining 88$ 189$ 277$ 169$ 369$ 538$

Marketing & Specialties 12$ 10$ 22$ 24$ 13$ 37$

Corporate and Other 1$ 36$ 37$ 1$ 64$ 65$

Total 341$ 279$ 620$ 851$ 519$ 1,370$

2Q

Millions of Dollars

2016

June YTD

Millions of Dollars

2016

37


Millions of Dollars

2016

2Q

Effective Tax Rates

Income before taxes 720$

Special items 30$

Adjusted income before taxes 750$

Provision for taxes 204$

Special items 27$

Adjusted provision for taxes 231$

GAAP effective tax rate 28%

Adjusted effective tax rate 31%

psx q2 2016 press release slides final

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