2. 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 โis anticipated,โ โis estimated,โ โis expected,โ โis planned,โ โis scheduled,โ โis targeted,โ โbelieves,โ โintends,โ โobjectives,โ โprojects,โ
โstrategiesโ 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 66โs operations (including joint venture operations) are based on
managementโs 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 66โs 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 โInvestorsโ section of our website.
CAUTIONARY STATEMENT
2
4. 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
13. 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
16. ESTIMATED SENSITIVITIES
2016
16
Sensitivities shown above are independent and are only valid within a limited price range
Midstream - DCP (net to Phillips 66)
10ยข/Gal Increase in NGL price 25
10ยข/MMBtu Increase in Natural Gas price 2
$1/BBL Increase in WTI price 1
Chemicals - CPChem (net to Phillips 66)
1ยข/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
10ยข/MMBtu Increase in Natural Gas price (10)
Impacts due to Actual Crude Feedstock Differing from Feedstock Assumed in Market Indicators:
Annual Net Income $MM
28. 28
NON-GAAP RECONCILIATIONS
2016
Jun YTD 2Q 1Q Jun YTD 2Q
Phillips 66
Net Income (Loss) Attributable to Phillips 66 881$ 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. 29
NON-GAAP RECONCILIATIONS
Jun YTD 2Q 1Q Jun YTD 2Q
Midstream
Net Income (Loss) Attributable to Phillips 66 104$ 39$ 65$ (11)$ (78)$
Pre-tax Adjustments:
Impairments by equity affiliates 6 - 6 194 194
Pending claims and settlements (45) - (45) - -
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$
Pre-tax Adjustments:
Tax impact of adjustments - - - - -
Adjusted Net Income (Loss) Attributable to Phillips 66 346$ 190$ 156$ 498$ 295$
Except as Indicated
2016 2015
Millions of Dollars
30. 30
NON-GAAP RECONCILIATIONS
Jun YTD 2Q 1Q Jun YTD 2Q
Refining
Net Income (Loss) Attributable to Phillips 66 235$ 149$ 86$ 1,142$ 604$
Pre-tax Adjustments:
Asset dispositions - - - (8) -
Recognition of deferred logistics commitments 30 30 - - -
Tax impact of adjustments (27) (27) - (35) -
Adjusted Net Income (Loss) Attributable to Phillips 66 238$ 152$ 86$ 1,099$ 604$
Marketing & Specialties
Net Income (Loss) Attributable to Phillips 66 434$ 229$ 205$ 618$ 314$
Pre-tax Adjustments:
Asset dispositions - - - (242) (132)
Tax impact of adjustments - - - - -
Adjusted Net Income (Loss) Attributable to Phillips 66 434$ 229$ 205$ 376$ 182$
Corporate and Other
Net Income (Loss) Attributable to Phillips 66 (238)$ (111)$ (127)$ (248)$ (123)$
Pre-tax Adjustments:
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. 31
NON-GAAP RECONCILIATIONS
Jun YTD 2Q 1Q Jun YTD 2Q
Midstream - Transportation
Net Income (Loss) Attributable to Phillips 66 137$ 65$ 72$ 130$ 65$
Pre-tax Adjustments:
Tax impact of adjustments - - - - -
Adjusted Net Income (Loss) Attributable to Phillips 66 137$ 65$ 72$ 130$ 65$
Midstream - NGL
Net Income (Loss) Attributable to Phillips 66 (28)$ (17)$ (11)$ 22$ 8$
Pre-tax Adjustments:
Tax impact of adjustments - - - - -
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)$
Pre-tax Adjustments:
Impairments by equity affiliates 6 - 6 194 194
Pending claims and settlements (45) - (45) - -
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. 32
NON-GAAP RECONCILIATIONS
Jun YTD 2Q 1Q Jun YTD 2Q
Refining - Atlantic Basin / Europe
Net Income (Loss) Attributable to Phillips 66 36$ 32$ 4$ 203$ 90$
Pre-tax Adjustments:
Recognition of deferred logistics commitments 30 30 - - -
Tax impact of adjustments (27) (27) - (38) -
Adjusted Net Income (Loss) Attributable to Phillips 66 39$ 35$ 4$ 165$ 90$
Refining - Gulf Coast
Net Income (Loss) Attributable to Phillips 66 73$ 5$ 68$ 154$ 83$
Pre-tax Adjustments:
Tax impact of adjustments - - - - -
Adjusted Net Income (Loss) Attributable to Phillips 66 73$ 5$ 68$ 154$ 83$
Refining - Central Corridor
Net Income (Loss) Attributable to Phillips 66 75$ 55$ 20$ 411$ 216$
Pre-tax Adjustments:
Tax impact of adjustments - - - - -
Adjusted Net Income (Loss) Attributable to Phillips 66 75$ 55$ 20$ 411$ 216$
Refining - West Coast
Net Income (Loss) Attributable to Phillips 66 51$ 57$ (6)$ 374$ 215$
Pre-tax Adjustments:
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. 33
NON-GAAP RECONCILIATIONS
Jun YTD 2Q 1Q Jun YTD 2Q
Marketing & Specialties - Marketing & Other
Net Income (Loss) Attributable to Phillips 66 361$ 199$ 162$ 520$ 266$
Pre-tax Adjustments:
Asset dispositions - - - (242) (132)
Tax impact of adjustments - - - - -
Adjusted Net Income (Loss) Attributable to Phillips 66 361$ 199$ 162$ 278$ 134$
Marketing & Specialties - Specialties
Net Income (Loss) Attributable to Phillips 66 73$ 30$ 43$ 98$ 48$
Pre-tax Adjustments:
Tax impact of adjustments - - - - -
Adjusted Net Income (Loss) Attributable to Phillips 66 73$ 30$ 43$ 98$ 48$
Millions of Dollars
Except as Indicated
20152016
34. 34
* Total equity plus total debt
NON-GAAP RECONCILIATIONS
2016 June YTD Phillips 66 Midstream Chemicals Refining
Marketing
& 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. 35
NON-GAAP RECONCILIATIONS
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. 36
NON-GAAP RECONCILIATIONS
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. 37
NON-GAAP RECONCILIATIONS
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%