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Investor update march 2016 website

- Phillips 66 Partners LP owns, operates, develops and acquires primarily fee-based crude oil, refined petroleum products and natural gas liquids pipelines and terminals and other midstream assets. - PSXP has a balanced portfolio of assets with long-term, fee-based contracts providing stable cash flows. Recent acquisitions and organic growth projects will further expand the portfolio. - PSXP is targeting 30% annual distribution growth through 2018 while maintaining investment grade credit ratings and annual distribution coverage of at least 1.1x.

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Investor Update March 2016 NYSE: PSX www.phillips66.com
Cautionary Statement 2 This presentation contains forward-looking statements. 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 the operations of Phillips 66 and Phillips 66 Partners LP (including joint venture operations) are based on management’s expectations, estimates and projections, their 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 can be found in filings by Phillips 66 and Phillips 66 Partners LP with the Securities and Exchange Commission. Phillips 66 and Phillips 66 Partners LP are under no obligation (and expressly disclaim any such obligation) to update or alter their 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 the websites of Phillips 66 and Phillips 66 Partners LP.
27 36 42 33 28 2012 2013 2014 2015 2016 YTD 17 14 13 17 9 2012 2013 2014 2015 2016 YTD Market Dynamics 3 112 109 99 52 31 2012 2013 2014 2015 2016 YTD Brent ($/bbl) 82 90 89 45 34 2012 2013 2014 2015 2016 YTD NGL Weighted Average (cpg) PE Cash Chain Margin (cpp) Global Market Crack ($/bbl) See appendix for footnotes.
Strategy 4 Operating Excellence Growth Returns Distributions High-Performing Organization 9.7 7.4 7.8 8.5 2012 2013 2014 2015 Refining M&S Chemicals DCP Midstream See appendix for footnotes. Adjusted EBITDA ($B)
Operating Excellence 5 0.0 0.5 1.0 Industry Average Total Recordable Rates (Incidents per 200,000 Hours Worked) ’12 ’13 ’14 ’15 Refining Environmental Metrics Refining Capacity Utilization (%) Operating Costs and SG&A ($B) Phillips 66 CPChem DCP See appendix for footnotes. 5.7 5.7 5.8 5.6 0.3 0.4 2012 2013 2014 2015 Growth 430 317 300 279 2012 2013 2014 2015 93% 93% 94% 91% 3% 3% 4% 5% 2012 2013 2014 2015 Planned Maintenance & Turnarounds
Value Chains 6
Midstream Organic Growth 7 EBITDA ($B) Sweeny Midstream Hub Sweeny Fractionator One and Clemens Caverns in operation 4Q 2015 Freeport LPG Export Terminal startup 2H 2016 DAPL/ETCOP Commercial operations expected to begin 4Q 2016 Beaumont Terminal projects 2.5 MMBbls new crude/products tanks planned by 2H 2016 Bakken JVs (PSXP) Sacagawea Pipeline expected startup 2H 2016 Bayou Bridge System (PSXP) Lake Charles segment operational 1Q 2016 St. James segment targeted in-service 2H 2017 0.3 1.1 0.9 0.7 0.4 1.2 2.3 PSXP Current Run-Rate EBITDA PSX Operating Assets Projects Under Construction Planned 2018E Run-Rate EBITDA EBITDA in PSXP EBITDA Remaining at PSX DCP EBITDA excluded. See appendix for additional footnotes.
Phillips 66 Partners LP 8 Strategic relationship with PSX Stable and predictable cash flows Low cost capital source Financial Flexibility
DCP Midstream 9 Natural Gas Total Throughput (Tbtu/d) 7.1 7.1 7.3 7.1 2012 2013 2014 2015 NGL Production (MMBD) 402 426 454 410 2012 2013 2014 2015 Strengthened balance sheet Significant self-help initiatives Cash flow breakeven reduction from 60 to 35 cpg NGL Operating improvements Contract realignment System rationalization Capital discipline 90% investment-grade end-use customers Expected to be self-funding No DCP Midstream debt maturities until 2019
Global Chemicals Demand 10 Global Ethylene Demand and Utilization (MM Metric Tons and %) Source: Wood Mackenzie. Petrochemical demand driven by global economic growth Demand outpaced capacity additions 129 134 137 141 86.1% 86.6% 86.9% 87.7% 2012 2013 2014 2015 Demand Operating Rate
0 150 300 450 600 750 900 1,050 1,200 0 15 30 45 60 75 90 105 120 135 150 Chemicals Production Costs 11 M.E. Ethane N.A. Ethane N.A. LPG M.E. LPG/Naphtha W. Europe Naphtha N.A. Naphtha W. Europe LPG Asia NaphthaAsia LPG/Ethane Cumulative Capacity MM Tons 2015 vs 2014 Average Ethylene Production Cost Curve ($/ton) Petrochemical production costs reduced globally CPChem location-advantaged feedstock position continues Rest of World Asia Coal CPChem Source: Wood Mackenzie. 2014 2015
CPChem Growth 12 USGC Petrochemicals Project 1,500 kMTA (ethylene) at Cedar Bayou, TX 1,000 kMTA (polyethylene) at Old Ocean, TX Planned startup mid-2017 $1 B estimated EBITDA Healthy pipeline of self-funded growth opportunities Expect increased distributions post USGC project completion EBITDA estimate is on a CPChem 100% basis and is based on January 2016 IHS forecast premises.
Refining 13 See appendix for footnotes. 2.0 1.6 2.4 2013 2014 2015 FCF ($B) Strong free cash flow Increased demand for refined products Expansive footprint provides opportunities for Midstream growth 9.9 9.9 11.8 2013 2014 2015 Global Realized Margin ($/bbl)
Refining 14 Adjusted ROCE (%) 12 12 19 2013 2014 2015 0.9 1.2 1.2 1.4 2013 2014 2015 2016E Sustaining Return WRB Total Capex ($B) Investing to improve returns Quick payout, low cost projects Wood River projects Dilbit capacity increase, ULSD expansion, FCC modernization $200 MM capex, $100 MM EBITDA Bayway FCC modernization $150 MM capex, $75 MM EBITDA Billings heavy crude project $300 MM capex, $125 MM EBITDA See appendix for footnotes.
Marketing & Specialties 15 Increased U.S. gasoline sales volumes by 7% Upgraded 300 U.S. branded sites Increased U.K. inland gasoline placement by 11% Added 31 new retail sites in Germany and Austria Third largest U.S. finished lubricants supplier See appendix for footnotes. 0.9 1.0 1.0 2013 2014 2015 FCF ($B) Adjusted ROCE (%) 28 32 35 2013 2014 2015
5.0 4.4 5.8 0.5 1.5 5.1 5.0 7.2 2013 2014 2015 Adjusted CFO PSXP Contributions Financial Strength 16 Available Cash ($B) Dividends Sustaining Capex Strong balance sheet Investment-grade credit rating Disciplined capital allocation 20% net debt/cap $3.1 B cash $5 B revolving credit facility See appendix for footnotes.
Capital Allocation 17 Funding reinvestment Cash from operations PSXP proceeds Returning capital to shareholders Dividend growth Ongoing share repurchases Distributions Reinvestment 2014 – 2016E See appendix for footnotes.
Capital Spending 3.5 5.6 7.7 5.3 2013 2014 2015 2016E Consolidated WRB DCP CPChem 1.8 3.8 5.8 3.9 2013 2014 2015 2016E Refining M&S PSXP Midstream Investment in DCP Corporate Consolidated ($B) Capital Program ($B) 18 See appendix for footnotes.
Distributions 19 1.33 1.89 2.18 2013 2014 2015 Annual Dividend ($/sh) Cumulative Distributions ($B) 3.7 8.4 11.1 2013 2014 2015 Share Repurchases and Exchanges Dividends Double-digit dividend growth 37% dividend CAGR since spin Ongoing share repurchase program 110 MM shares repurchased and exchanged $2.6 B authorization remaining Cumulative distributions include distributions since July 2012. See appendix for additional footnotes.
Compelling Investment 20 Shareholder returns Disciplined capital allocation Unique portfolio EBITDA growth Multiple expansion -20% 20% 60% 100% 140% 180% 220% May-12 Feb-13 Nov-13 Aug-14 May-15 Feb-16 PSX +165% S&P 100 +47% Peers +37%
Institutional Investors Contact Rosy Zuklic General Manager, Investor Relations C.W. Mallon Manager, Investor Relations InvestorRelations@p66.com 832-765-2297
Investor Update March 2016 NYSE: PSXP www.phillips66partners.com
Phillips 66 Partners Ownership Structure Phillips 66 Partners GP LLC (PSXP General Partner) General Partner Units IDRs Operating Subsidiaries PSXP Public Unitholders (NYSE: PSX) (NYSE: PSXP) 100% ownership interest 29% limited partner interest Joint Ventures 2% general partner interest 69% limited partner interest 23
Phillips 66 Partners Strong alignment with Phillips 66 Highly integrated assets Stable and predictable cash flows Significant growth potential Financial flexibility Pecan Grove Marine Dock 24
Distribution Growth 0.2125 0.2248 0.2743 0.3017 0.3168 0.3400 0.3700 0.4000 0.4280 0.4580 3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015 Coverage Ratio 1.13x 1.10x 1.10x 1.44x 1.32x 1.28x 1.14x 1.15x 1.40x 1.44x 3Q 2013 distribution represents the minimum quarterly distribution, actual distribution of $0.1548 equal to MQD prorated. 25 Distribution / LP Unit ($)
37.2 41.9 47.8 64.5 74.0 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015 Financial Performance Adjusted EBITDA ($MM) 43.7 49.0 57.0 73.4 87.1 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015 Distributable Cash Flow ($MM) Adjusted EBITDA and Distributable Cash Flow shown are attributable to PSXP. 26
Phillips 66 Partners 1Q 2016 Drop Down 27 Assets include a 25% controlling interest in: Sweeny Fractionator – 100MBD NGL fractionator Clemens NGL Caverns – 7.5MMBbl NGL storage facility Total transaction value of $236 MM funded with: $24 MM take-back equity of PSXP LP and GP units $212 MM sponsor loan payable to PSX 2016E full-year EBITDA of $25 MM Long-term, take-or-pay contracts with Phillips 66 for the full capacity of the assets $25 MM EBITDA is attributable to PSXP interest.
$314 MM Announced 2016 Organic Growth Plan Bayou Bridge Pipeline Transports crude from Nederland, TX to Lake Charles, LA, and St. James, LA Increases crude supply options for LA refineries Expected completion of Lake Charles leg in 1Q 2016 Expected completion of St. James segment in 2H 2017 Sacagawea Pipeline 76-mile Sacagawea Pipeline and central delivery facility for gathering systems Connection into 100 MBD Palermo crude oil rail-loading facility Provides increased logistics options for shippers in the Bakken region Terminal completed in 4Q 2015; pipeline expected startup 2H 2016 Sand Hills Pipeline Adding lateral connections and increasing pumping capacity 28
Highly Integrated and Diversified Asset Portfolio 29
Fee-based, Long-term Contracts Provide Stability Hartford Connector includes PSX JV Wood River Refinery to Hartford and Hartford to Explorer pipelines. The term of the Hartford Connector throughput and deficiency agreement began in January 2008. Asset Initial Term (years) Maximum Term with Options (years) Clifton Ridge to Lake Charles 10 20 Sweeny to Pasadena 10 20 Hartford Connector 23 23 Gold Line 10 15 Sand Hills 15 15 Southern Hills 15 15 Cross Channel Connector 5 - Eagle Ford Gathering 7 - Explorer Various Various Clifton Ridge Terminal 5 20 Clifton Ridge / Pecan Grove Docks 5 20 Pasadena Terminal 5 20 Pasadena and Hartford Truck Racks 5 20 Gold Line Terminals 5 15 Medford Spheres 10 20 Bayway Rail Rack 10 20 Ferndale Rail Rack 10 20 Sweeny Fractionator 10 - Clemens Caverns 10 - Existing Pipelines 25% PSXP PSX accounted for 96% and 95% of PSXP’s transportation and terminaling revenues in 2015 and 2014, respectively Existing Terminals / Storage Remaining weighted average contract life of ~10 years Remaining weighted average contract life of ~5 years 30
Balanced Debt Profile 0.3 0.5 0.3 2020 2025 2045 $1.1 B debt issuance February 2015 5-Year $300 MM notes, 2.646% coupon 10-Year $500 MM notes, 3.605% coupon 30-Year $300 MM notes, 4.680% coupon Average cost of 3.64% BBB (stable) / Baa3 (stable) Debt Maturity Profile ($B) 31
Financial Flexibility Investment-grade credit rating Financial targets: 30% distribution CAGR 2013-2018 3.5x debt / EBITDA 1.1x annual coverage ratio Support Phillips 66 Midstream growth 32
-100% -60% -20% 20% 60% 100% 140% 180% 220% 260% 300% Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Closed 2nd acquisition - $340 MM Total Return Since IPO Closed 1st acquisition - $700 MM PSXP 158% Alerian MLP Index -45% IPO Closed 3rd acquisition - $1.1 B Closed 4th acquisition – $70 MM Chart reflects total unitholder return July 22, 2013 to February 12, 2016. Distributions assumed to be reinvested in units. Source: Bloomberg. 33
Institutional Investors Contact Rosy Zuklic – General Manager, Investor Relations Rosy.Zuklic@p66.com | 832-765-2297 C.W. Mallon – Manager, Investor Relations C.W.Mallon@p66.com | 832-765-2297
Appendix
Segment Strategy 36 Refining: Enhance Returns Midstream: Growth Chemicals: Growth Marketing & Specialties: Selective Growth Execute Sweeny Hub Grow integrated transportation system PSXP as a funding vehicle Pursue organic and M&A opportunities Grow CPChem organically Advance olefins and polyolefins projects Capitalize on domestic feedstock advantage Leverage proprietary technology Optimize crude slate Expand export capability Increase yields Maintain cost discipline Enhance portfolio Expand European retail marketing Grow lubricants Ensure domestic refinery pull-through
Midcontinent Integrated Growth 37 Midstream Palermo rail terminal/Sacagawea pipeline (PSXP) DAPL/ETCOP Refining, Marketing & Specialties Ponca City Yield improvement project Tight oil processing flexibility 100% lease crude purchases Wood River Dilbit capacity increase ULSD expansion FCC modernization Billings Vacuum tower project Marketing & Specialties Grow branded fuels volumes Enhance Phillips 66 brand Marketing JVs and alliances
Western Gulf Creating a World-Class Energy Complex 38 Midstream Sweeny Fractionator One (25% PSXP) Freeport LPG export terminal Eagle Ford crude pipeline Sweeny Fractionator Two Refining, Marketing & Specialties Sweeny Strategic asset integration Marketing & Specialties Grow unbranded fuels volumes Focus on high-quality branded assets Increase high-margin exports
Eastern Gulf Refining Logistics and Midstream Growth 39 Midstream Beaumont terminal expansion: +7 MMBbls Bayou Bridge pipeline Alliance clean products dock Refining, Marketing & Specialties Lake Charles Increase feedstock advantage Alliance Increase light crude runs Marketing & Specialties Grow unbranded fuels volumes Leverage brand value through licensing Increase high-margin exports Grow performance lubricants and export sales
West Coast Enhancing Returns Midstream Los Angeles waterborne crude tank Santa Maria rail rack Refining, Marketing & Specialties San Francisco Yield improvements Los Angeles FCC energy reduction Marketing & Specialties Grow branded and unbranded fuels volumes Enhance 76 brand Increase high-margin exports Grow export lubricant sales 40
Atlantic Basin Enhancing Returns Midstream Bayway LPG loading facility Refining, Marketing & Specialties Bayway FCC reactor modernization Yield improvements Marketing & Specialties Grow JET and COOP brands in Europe Increase unbranded volumes in the U.K. and U.S. Expand brand licensing in the U.S. 41
Historical Performance 42 Adjusted EBITDA and Adjusted Earnings are adjusted for special items Adjusted EBITDA adjusted for non-controlling interest and proportional share of equity affiliates’ income taxes, net interest and D&A Adjusted CFO is cash from continuing operations and excludes working capital changes Adjusted EBITDA ($B) Adjusted Earnings ($B) Adjusted CFO ($B) 0.5 2.2 4.6 5.4 5.1 4.5 5.9 2009 '10 '11 '12 '13 '14 '15 0.5 1.7 3.5 5.3 3.6 3.8 4.2 2009 '10 '11 '12 '13 '14 '15 2.2 4.0 7.0 9.7 7.4 7.8 8.5 2009 '10 '11 '12 '13 '14 '15
Free Cash Flow 2013 – 2015 Average 43 1.0 1.4 0.7 0.3 Adjusted CFO & PSXP Contributions Sustaining Capex Available Cash Flow 1.1 0.9 0.2 CFO Sustaining Capex FCF Midstream ($B) Chemicals ($B) CFO excludes working capital. Sustaining capex excludes capital leases. Midstream adjusted CFO excludes PSXP. PSXP contributions are calculated as consideration paid by PSXP to PSX in dropdown transactions plus quarterly cash distributions paid from PSXP to PSX. Midstream sustaining capex excludes PSXP. DCP Midstream, CPChem and WRB free cash flow calculated based on Phillips 66’s share of after tax cash flow at the enterprise level. 2.9 2.0 0.9 CFO Sustaining Capex FCF 1.0 0.9 0.1 CFO Sustaining Capex FCF Refining ($B) Marketing & Specialties ($B) PSXP Contributions
35% 19% 19% 5% M&S Chemicals Refining Midstream -10% 0% 10% 20% 30% 40% Average Capital Employed ($B) Corporate -8% 2015 Adjusted ROCE 44 P66 Total 14% 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32
Capital Structure 45 20- 30% Excluding PSXP 22.0 21.6 23.1 6.1 8.6 7.8 5.0 5.2 3.0 22% 28% 25% 2013 2014 2015 Equity $B Debt $B Cash & Cash Equivalents $B Debt to Capital 22.4 22.0 23.9 6.1 8.6 8.9 5.4 5.2 3.1 21% 28% 27% 2013 2014 2015 Consolidated PSX
3.0 8.0 5.0 Cash Undrawn Revolving Credit Facility Total Committed Liquidity 1.5 2.0 4.0 5.0 2016 2017 2018 2019 2020-30 2031-50 Bonds Revolving Credit Facility Debt and Liquidity 46 Debt Maturity Profile ($B) Liquidity ($B) As of 12/31/2015. Excludes PSXP. Debt maturity profile excludes capital leases. Undrawn Revolving Credit Facility includes $5.0 B revolving credit facility less $51 MM in letters of credit.
2016 Sensitivities 47 Sensitivities shown above are independent and are only valid within a limited price range.
Phillips 66 Capital Program 48 Sustaining Growth Total Consolidated Capital Expenditures and Investments Midstream(1) 227 2,119 2,346 Chemicals - - - Refining 833 384 1,217 Marketing and Specialties 57 80 137 Corporate(2) 180 - 180 1,297 2,583 3,880 Select Equity Affiliates(3) DCP 98 125 223 CPChem 241 775 1,016 WRB 129 55 184 467 956 1,423 Capital Program(3) Midstream 324 2,244 2,568 Chemicals 241 775 1,016 Refining 962 439 1,401 Marketing and Specialties 57 80 137 Corporate 180 - 180 1,764 3,539 5,303 Millions of Dollars 2016 Budget (3) Includes Phillips 66’s portion of self-funded capital spending by DCP Midstream, CPChem, and WRB. (2) Includes non-cash capitalized lease of $3 million in Corporate (1) Includes 100% of Phillips 66 Partners
1Q 2015 Phillips 66 Partners Acquisition Drop-down assets 33.3% interest in Sand Hills NGL pipeline 33.3% interest in Southern Hills NGL pipeline 19.5% interest in Explorer refined products pipeline $1.1 B acquisition Asset-level 2015E EBITDA of $115 million Implied 9.5x purchase multiple on assets’ 2015E EBITDA Assets supported by long-term, fee-based agreements, primarily under take-or-pay terms Additional organic growth opportunities through identified expansion projects 49
Footnotes 50 Slide 3 2016 YTD data is through February 18, 2016 unless otherwise noted. Global Market Crack refers to worldwide market crack spread based on Phillips 66 global crude capacity. NGL weighted average prices are based on index prices from the Mont Belvieu and Conway market hubs that are weighted by DCP Midstream, LLC’s (DCP’s) NGL component and location mix. PE cash chain margins are ethylene to high-density polyethylene cash chain margins. 2016 YTD is January average pricing. Source: IHS, Inc. Slide 4 Corporate not included in bars on chart, but included in totals. Adjusted EBITDA adjusted for non- controlling interest and proportional share of selected equity affiliates’ income taxes, net interest and D&A.
Footnotes 51 Slide 5 Injury statistics do not include major projects. Industry Averages are from: Phillips 66 – American Fuel & Petrochemical Manufacturers (AFPM) refining data, Chevron Phillips Chemical Company LLC (CPChem) – American Chemistry Council (ACC), DCP – Gas Processors Association (GPA). Growth component of operating costs is estimated based on growth initiatives post-2013. Slide 7 PSX operating assets EBITDA includes Refining Logistics. Refining Logistics represents terminaling, storage and other logistics assets currently embedded in the Refining segment. Amount represents an estimate of the EBITDA potential of these assets if they were transferred to Midstream and market-based fees for their use were charged to the Refining segment. Projects under construction and planned EBITDA growth is 2018 estimated run-rate EBITDA of projects completed 2016 or later. PSXP EBITDA includes EBITDA attributable to non-controlling interests. Planned EBITDA includes projects that have not yet reached final investment decision.
Footnotes 52 Slide 13 FCF is CFO less sustaining capital, excluding working capital. WRB Refining LP (WRB) free cash flow is calculated based on P66’s share of after tax cash flow at the enterprise level. Global realized margin is based on total processed inputs and includes proportional share of refining margins contributed by certain equity affiliates. Realized margin excludes special items. Slide 14 Wood River Projects capex and EBITDA shown at 100% WRB. Refining capex excludes capital leases but includes Phillips 66’s portion of self-funded capital spending by WRB. Project capex and annual EBITDA are estimated. Slide 15 FCF is CFO less sustaining capital, excluding working capital.
Footnotes 53 Slide 16 Net debt/cap and cash figures are consolidated. Revolving credit facility available includes $5.0 B revolving credit facility less $51 MM in letters of credit. Adjusted CFO excludes PSXP and excludes working capital. PSXP contributions are calculated as consideration paid by PSXP to PSX in dropdown transactions plus quarterly cash distributions paid from PSXP to PSX. Sustaining capex excludes capital leases and excludes PSXP. Slide 17 Reinvestment excludes Phillips 66’s portion of self-funded capital spending by DCP, CPChem and WRB. Includes $1.5 B equity contribution to DCP in 2015. Distributions include the 2014 PSPI share exchange. Slide 18 Capital program includes Phillips 66’s portion of self-funded capital spending by DCP, CPChem and WRB.
Footnotes 54 Slide 19 2014 share repurchases and exchanges include the PSPI share exchange. Slide 20 Chart reflects total shareholder return May 1, 2012 to February 18, 2016. Dividends assumed to be reinvested in stock. Source: Bloomberg. Peer average includes Delek US Holdings, Inc., HollyFrontier Corporation, Marathon Petroleum Corporation, PBF Energy Inc., Tesoro Corporation, Valero Energy Corporation, Western Refining, Energy Transfer Equity, L.P., Enterprise Products Partners L.P., ONEOK, Inc., Targa Resources Corp., Celanese Corporation, The Dow Chemical Company, Eastman Chemical Company, Huntsman Corporation, LyondellBasell Industries NV, and Westlake Chemical Corporation.
Non-GAAP Reconciliations 55 Adjusted EBITDA by Segment Reconciliation 2012 2013 2014 2015 Midstream (excluding DCP Midstream) Midstream net income attributable to Phillips 66 (127) 259 372 337 Plus: Net income attributable to noncontrolling interests 7 17 35 61 Provision for income taxes (71) 142 230 212 Depreciation and amortization 83 88 91 127 Midstream (excluding DCP Midstream) EBITDA (108) 506 728 737 Adjustments (pretax): EBITDA attributable to Phillips 66 noncontrolling interests (13) (24) (45) (73) Proportional share of selected equity affiliates income taxes - - - - Proportional share of selected equity affiliates net interest - - - - Proportional share of selected equity affiliates depreciation and amortization - - - - Lower-of-cost-or-market inventory adjustments - - - - Gain on asset dispositions - - - - Gain on share issuance by equity affiliate - - - - Impairments 523 - - - Pending Claims and settlements (37) - - - Hurricane-related costs 2 - - - Pension settlement expense - - - 9 Midstream (excluding DCP Midstream) Adjusted EBITDA* 367 482 683 673 * Proportional share of selected equity affiliates is net of noncontrolling interests. Millions of Dollars Adjusted EBITDA by Segment Reconciliation 2012 2013 2014 2015 Proportional Share of DCP Midstream Proportional Share of DCP Midstream net income attributable to Phillips 66 179 210 135 (324) Plus: Net income attributable to noncontrolling interests Provision for income taxes 100 122 79 (139) Depreciation and amortization - - - - Proportional Share of DCP Midstream EBITDA 279 332 214 (463) Adjustments (pretax): EBITDA attributable to Phillips 66 noncontrolling interests Proportional share of selected equity affiliates income taxes - 4 3 (2) Proportional share of selected equity affiliates net interest 85 110 118 133 Proportional share of selected equity affiliates depreciation and amortization 131 139 150 166 Lower-of-cost-or-market inventory adjustments - - 2 - Gain on asset dispositions - - - (30) Gain on share issuance by equity affiliate - - - - Impairments in equity affiliates - - - 366 Pending Claims and settlements - - - - Hurricane-related costs - - - - Proportional Share of DCP Midstream Adjusted EBITDA* 495 585 487 170 * Proportional share of selected equity affiliates is net of noncontrolling interests. Millions of Dollars
Non-GAAP Reconciliations 56 Adjusted EBITDA by Segment Reconciliation 2012 2013 2014 2015 Chemicals Chemicals net income attributable to Phillips 66 823 986 1,137 962 Plus: Provision for income taxes 366 375 495 353 Chemicals EBITDA 1,189 1,361 1,632 1,315 Adjustments (pretax): Proportional share of selected equity affiliates income taxes 79 93 111 91 Proportional share of selected equity affiliates net interest 13 10 9 7 Proportional share of selected equity affiliates depreciation and amortization 213 246 258 264 Impairments by equity affiliates 43 - 88 24 Premium on early debt retirement 144 - - - Lower-of-cost-or-market inventory adjustments - - 3 - Chemicals Adjusted EBITDA 1,681 1,710 2,101 1,701 Millions of Dollars Adjusted EBITDA by Segment Reconciliation 2012 2013 2014 2015 Refining Refining net income (loss) attributable to Phillips 66 3,091 1,747 1,771 2,555 Plus: Provision for income taxes 1,998 1,035 696 1,104 Net interest expense - - - - Depreciation and amortization 655 685 704 738 Refining EBITDA 5,744 3,467 3,171 4,397 Adjustments (pretax): Proportional share of selected equity affiliates income taxes 5 (4) 3 (3) Proportional share of selected equity affiliates net interest (118) (95) (19) - Proportional share of selected equity affiliates depreciation and amortization 236 237 245 252 Net (gain) loss on asset dispositions (185) - (145) (8) Impairments 606 - 131 - Canceled projects - - - - Pending claims and settlements 31 - 23 30 Severence accruals - - - - Hurrican-related costs 54 - - - Tax law impacts - (22) - - Lower-of-cost-or-market inventory adjustments - - 40 53 Pension settlement expenses - - - 53 Refining Adjusted EBITDA 6,373 3,583 3,449 4,774 Millions of Dollars
Non-GAAP Reconciliations 57 Adjusted EBITDA by Segment Reconciliation 2012 2013 2014 2015 Marketing and Specialties Marketing and Specialties net income attributable to Phillips 66 544 894 1,034 1,187 Plus: Provision for income taxes 319 433 441 465 Net interest expense - - - (2) Depreciation and amortization 147 103 95 97 Marketing and Specialties EBITDA 1,010 1,430 1,570 1,747 Adjustments (pretax): Asset dispositions (4) (40) (125) (242) Impairments - - - - Pending claims and settlements 62 (25) (44) - Exit of a business line - 54 - - Tax law impacts - (6) - - Pension settlement expenses - - - 11 Marketing and Specialties Adjusted EBITDA 1,068 1,413 1,401 1,516 Millions of Dollars Adjusted EBITDA by Segment Reconciliation 2012 2013 2014 2015 Corporate Corporate net income (loss) attributable to Phillips 66 (434) (431) (393) (490) Plus: Net income attributable to noncontrolling interests - - - (8) Provision for income taxes (239) (263) (287) (231) Net interest expense 231 258 246 285 Depreciation and amortization 21 71 105 116 Corporate EBITDA (421) (365) (329) (328) Adjustments (pretax): Impairments 25 - - - Repositioning Costs 85 - - - Pending claims and settlements - - - - Tax impacts - - - - Pension settlement expense - - - 7 Corporate Adjusted EBITDA (311) (365) (329) (321) Millions of Dollars
Non-GAAP Reconciliations 58 2009 2010 2011 2012 2013 2014 2015 Phillips 66 Phillips 66 net income attributable to Phillips 66 476 735 4,775 4,124 3,726 4,762 4,227 Less: Income from discontinued operations 19 30 43 48 61 706 - Plus: Net income attributable to noncontrolling interests 3 5 5 7 17 35 53 Provision for income taxes 357 562 1,822 2,473 1,844 1,654 1,764 Net interest expense (44) (41) (16) 231 258 246 283 Depreciation and amortization 873 874 902 906 947 995 1,078 Phillips 66 EBITDA 1,646 2,105 7,445 7,693 6,731 6,986 7,405 Adjustments (pretax): EBITDA attributable to Phillips 66 noncontrolling interests - (9) (10) (13) (24) (45) (73) Proportional share of selected equity affiliates income taxes 47 63 80 84 93 117 86 Proportional share of selected equity affiliates net interest (26) (6) (27) (20) 25 108 140 Proportional share of selected equity affiliates depreciation and amortization 557 540 584 580 622 653 682 Gain on asset dispositions (37) (234) (1,636) (189) (40) (270) (280) Gain on share issuance by equity affiliate (135) - - - - - - Impairments 129 1,512 506 1,197 - 131 - Impairments by equity affiliates - - - 88 390 Cancelled projects - 106 44 - - - - Severence accruals - 28 24 - - - - Exit of a business line - - - - 54 - - Pending claims and settlements 39 (56) - 56 (25) (21) 30 Premium on early debt retirement - - - 144 - - - Repositioning Costs - - - 85 - - - Hurricane-related costs - - - 56 - - - Tax law impacts - - - - (28) - - Lower-of-cost-or-market inventory adjustments - - - - - 45 53 Pension settlement expense - - - - - - 80 Phillips 66 Adjusted EBITDA 2,220 4,049 7,010 9,673 7,408 7,792 8,513 Millions of Dollars
Non-GAAP Reconciliations 59 Forecasted EBITDA We are unable to present reconciliations of the various forecasted EBITDA included in this presentation, because certain elements of net income, including interest, depreciation and income taxes, are not reasonably available. Together, these items generally result in EBITDA being significantly greater than net income.
Non-GAAP Reconciliations 60 2013 2014 2015 Refining FCF Numerator Cash From Operations GAAP $ 3,700 1,374 2,770 Less: Change in Non-Cash Working Cap. 818 (1,599) (441) Cash From Operations (excluding WC) 2,882$ 2,973 3,211 Less: P66 Equity affiliate cash from ops 1,020 838 90 Add: Equity look through cash from ops 848 351 303 Adjusted FCF (excl WC) 2,710$ 2,486 3,424 Total Capex GAAP 820 1,038 1,069 Less: Growth Capex 166 265 189 Sustaining Capex 654$ 773 880 Less: P66 Equity affiliate sustaining capex - - - Add: Equity look through sustaining capex 94 118 151 Adjusted Sustaining Capex $ 748 891 1,031 Refining Free Cash Flow 1,962$ 1,595 2,393 Millions of Dollars
Non-GAAP Reconciliations 61 2013 2014 2015 Refining ROCE Numerator Net Income 1,747 1,771 2,554 After-tax interest expense - - - GAAP ROCE earnings 1,747 1,771 2,554 Special Items (13) (195) (28) Adjusted ROCE earnings 1,734 1,576 2,526 Denominator GAAP average capital employed* 13,940 13,377 13,582 Discontinued Operations - - - Adjusted average capital employed* 13,940 13,377 13,582 *Total equity plus debt. Adjusted ROCE (percent) 12% 12% 19% GAAP ROCE (percent) 13% 13% 19% *Total equity plus debt. Millions of Dollars
Non-GAAP Reconciliations 62 2013 2014 2015 M&S FCF Numerator Cash From Operations GAAP $ 757 1,663 1,736 Less: Change in Non-Cash Working Cap. (217) 651 676 Cash From Operations (excluding WC) 974$ 1,012 1,060 Less: P66 Equity affiliate cash from ops - - - Add: Equity look through cash from ops - - - Adjusted FCF (excl WC) 974$ 1,012 1,060 Total Capex GAAP 226 439 122 Less: Growth Capex 176 379 53 Sustaining Capex 50$ 60 69 Less: P66 Equity affiliate sustaining capex - - - Add: Equity look through sustaining capex - - - Adjusted Sustaining Capex $ 50 60 69 M&S Free Cash Flow 924$ 952 991 Millions of Dollars
Non-GAAP Reconciliations 63 2013 2014 2015 M&S ROCE Numerator Net Income 894 1,034 1,187 After-tax interest expense - - - GAAP ROCE earnings 894 1,034 1,187 Special Items (9) (152) (239) Adjusted ROCE earnings 885 882 948 Denominator GAAP average capital employed* 3,160 2,743 2,735 Discontinued Operations - - - Adjusted average capital employed* 3,160 2,743 2,735 *Total equity plus debt. Adjusted ROCE (percent) 28% 32% 35% GAAP ROCE (percent) 28% 38% 43% *Total equity plus debt. Millions of Dollars
Non-GAAP Reconciliations 64 2013 2014 2015 Phillips 66 Available Cash Cash From Continuing Operations GAAP 5,942$ 3,527 5,713 Less: Change in Non-Cash Working Cap. 880 (1,020) (221) Cash From Operations (excluding WC) 5,062$ 4,547 5,934 Less: PSXP cash from operations 24 100 176 Adjusted CFO 5,038$ 4,447 5,758 Add: PSXP contributions 20 536 1,478 Total Available Cash 5,058$ 4,983 7,236 Total Phillips 66 Sustaining Capex 1,028$ 1,095 1,186 Less: PSXP Sustaining Capex 3 12 8 Sustaining Capex excluding PSXP 1,025$ 1,083 1,178 Remaining capital expenditures 754 2,690 4,586 GAAP capital expenditures 1,779$ 3,773 5,764 Millions of Dollars
Non-GAAP Reconciliations 65 2009 2010 2011 2012 2013 2014 2015 Phillips 66 Cash from Operations Cash From Continuing Operations GAAP 917$ 2,054 4,953 4,259 5,942 3,527 5,713 Less: Change in Non-Cash Working Cap. 393 (195) 314 (1,140) 880 (1,020) (221) Cash From Continuing Operations (excluding WC) 524$ 2,249 4,639 5,399 5,062 4,547 5,934 Millions of Dollars
Non-GAAP Reconciliations 66 2009 2010 2011 2012 2013 2014 2015 Reconciliation of Earnings to Adjusted Earnings Consolidated Earnings 476 735 4,775 4,124 3,726 4,762 4,227 Adjustments: Gain on share issuance by equity affiliate (88) - - - - - - Asset dispositions (32) (116) (1,545) (106) (23) (494) (265) Impairments 116 1,118 318 979 - 131 - Impairments by equity affiliates - - - - - 69 256 Canceled projects - 29 28 - - - - Severance accruals - 28 15 - - - - Pending claims and settlements 25 (35) - 34 (16) (10) (23) Premium on early debt retirement - - - 89 - - - Repositioning costs - - - 55 - - - Exit of business line - - - - 34 - - Repositioning tax impacts - - - 177 - - - Certain tax impacts - - - - (17) - (84) Hurricane-related costs - - - 35 - - - Lower-of-cost-or-market inventoyr adjustments - - - - - 30 33 Pension settlement expenses - - - - - - 49 Discontinued operations (19) (30) (43) (48) (61) (706) - Adjusted earnings 478 1,729 3,548 5,339 3,643 3,782 4,193 Millions of Dollars Except as Indicated
Non-GAAP Reconciliations 67 Midstream Chemicals Refining Marketing & Specialties FCF Numerator Cash From Operations GAAP 859$ 571 2,615 1,385 Less: Change in Non-Cash Working Cap. (46) 0 (407) 370 Cash From Operations (excluding WC) 905$ 571 3,022 1,015 Less: P66 Equity affiliate cash from ops 228 571 649 0 Add: Equity look through cash from ops 378 1,147 501 0 Adjusted FCF (excl WC) 1,055$ 1,147 2,874 1,015 Total Capex GAAP 2,409 0 976 262 Less: Growth Capex 1,750 0 207 203 Sustaining Capex 659$ 0 769 59 Less: P66 Equity affiliate sustaining capex 500 0 0 0 Add: Equity look through sustaining capex 125 209 121 0 Adjusted Sustaining Capex 284$ 209 890 59 PSXP Contributions 678$ - - - Free Cash Flow 1,449$ 938 1,984 956 Average 2013-2015
Non-GAAP Reconciliations 68 Phillips 66 Midstream Chemicals Refining Marketing & Specialties Corporate ROCE Numerator Net Income 4,280$ 74 962 2,554 1,187 (497) After-tax interest expense 201 - - - - 201 GAAP ROCE earnings 4,481 74 962 2,554 1,187 (296) Special Items (34) 235 (10) (28) (240) 9 Adjusted ROCE earnings 4,447$ 309 952 2,526 947 (287) Denominator GAAP average capital employed* 31,749$ 6,793 4,921 13,582 2,735 3,718 Discontinued Operations - - - - - - Adjusted average capital employed* 31,749$ 6,793 4,921 13,582 2,735 3,718 *Total equity plus debt. Adjusted ROCE (percent) 14% 5% 19% 19% 35% -8% GAAP ROCE (percent) 14% 1% 20% 19% 43% -8% *Total equity plus debt. Millions of Dollars 2015
Non-GAAP Reconciliations 69 Adjusted Phillips 66 Phillips 66 Partners Phillips 66 Consolidated 2013 Cash and cash equivalents 4,975 425 5,400 Total Debt 6,126 - 6,126 Total Equity 21,983 409 22,392 Debt-to-capital ratio 22% 21% 2014 Cash and cash equivalents 5,199 8 5,207 Total Debt 8,617 18 8,635 Total Equity 21,622 415 22,037 Debt-to-capital ratio 28% 28% 2015 Cash and cash equivalents 3,026 48 3,074 Total Debt 7,796 1,091 8,887 Total Equity 23,129 809 23,938 Debt-to-capital ratio 25% 27% Millions of Dollars
PSXP Non-GAAP Reconciliations 70 Millions of Dollars Year ending February 29 2016 Reconciliation of PSXP Estimated EBITDA to Estimated Net Income* Estimated net income 82$ Plus: Depreciation 20 Interest expense 4 Income taxes 9 Estimated EBITDA 115$ *Amounts reflect the sum of EBITDA and net income forecasts within each joint venture, multiplied by PSXP's expected ownership interest. 1Q 2015 Phillips 66 Partners Acquisition
PSXP Adjusted EBITDA and Distributable Cash Flow Reconciliation to Net Income $ MM 4Q 2015 3Q 2015 2Q 2015 1Q 2015 4Q 2014 Net Income $ 64.5 $ 52.3 $ 42.0 $ 35.4 $ 36.3 Plus: Depreciation 5.7 5.7 5.3 5.1 4.5 Net interest expense 9.2 9.1 9.5 5.8 2.1 Amortization of deferred rentals 0.1 0.1 0.1 0.1 0.1 Provision for (benefit from) income taxes 0.1 0.1 (0.1) 0.2 0.2 EBITDA 79.6 67.3 56.8 46.6 43.2 Distributions in excess of equity earnings 6.6 4.6 0.2 0.7 - Expenses indemnified or prefunded by Phillips 66 0.5 1.1 - 0.3 0.1 Transaction costs associated with acquisitions 0.4 0.4 - 1.4 1.0 EBITDA attributable to Predecessors - - - - (0.6) Adjusted EBITDA 87.1 73.4 57.0 49.0 43.7 Plus: Adjustments related to minimum volume commitments (1.7) 2.4 2.2 1.1 (2.4) Phillip 66 prefunded maintenance capital expenditures - - - - 0.1 Less: Net interest 9.2 9.1 9.5 6.5 1.4 Income taxes paid (refunded) (0.1) - 0.4 - - Maintenance capital expenditures 2.3 2.2 1.5 1.7 2.8 Distributable Cash Flow 74.0 64.5 47.8 41.9 37.2 71

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Investor update march 2016 website

  • 1.
    Investor Update March 2016 NYSE:PSX www.phillips66.com
  • 2.
    Cautionary Statement 2 This presentationcontains forward-looking statements. 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 the operations of Phillips 66 and Phillips 66 Partners LP (including joint venture operations) are based on management’s expectations, estimates and projections, their 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 can be found in filings by Phillips 66 and Phillips 66 Partners LP with the Securities and Exchange Commission. Phillips 66 and Phillips 66 Partners LP are under no obligation (and expressly disclaim any such obligation) to update or alter their 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 the websites of Phillips 66 and Phillips 66 Partners LP.
  • 3.
    27 36 42 33 28 2012 20132014 2015 2016 YTD 17 14 13 17 9 2012 2013 2014 2015 2016 YTD Market Dynamics 3 112 109 99 52 31 2012 2013 2014 2015 2016 YTD Brent ($/bbl) 82 90 89 45 34 2012 2013 2014 2015 2016 YTD NGL Weighted Average (cpg) PE Cash Chain Margin (cpp) Global Market Crack ($/bbl) See appendix for footnotes.
  • 4.
    Strategy 4 Operating Excellence Growth Returns Distributions High-Performing Organization 9.7 7.4 7.8 8.5 20122013 2014 2015 Refining M&S Chemicals DCP Midstream See appendix for footnotes. Adjusted EBITDA ($B)
  • 5.
    Operating Excellence 5 0.0 0.5 1.0 Industry Average TotalRecordable Rates (Incidents per 200,000 Hours Worked) ’12 ’13 ’14 ’15 Refining Environmental Metrics Refining Capacity Utilization (%) Operating Costs and SG&A ($B) Phillips 66 CPChem DCP See appendix for footnotes. 5.7 5.7 5.8 5.6 0.3 0.4 2012 2013 2014 2015 Growth 430 317 300 279 2012 2013 2014 2015 93% 93% 94% 91% 3% 3% 4% 5% 2012 2013 2014 2015 Planned Maintenance & Turnarounds
  • 6.
  • 7.
    Midstream Organic Growth 7 EBITDA ($B) SweenyMidstream Hub Sweeny Fractionator One and Clemens Caverns in operation 4Q 2015 Freeport LPG Export Terminal startup 2H 2016 DAPL/ETCOP Commercial operations expected to begin 4Q 2016 Beaumont Terminal projects 2.5 MMBbls new crude/products tanks planned by 2H 2016 Bakken JVs (PSXP) Sacagawea Pipeline expected startup 2H 2016 Bayou Bridge System (PSXP) Lake Charles segment operational 1Q 2016 St. James segment targeted in-service 2H 2017 0.3 1.1 0.9 0.7 0.4 1.2 2.3 PSXP Current Run-Rate EBITDA PSX Operating Assets Projects Under Construction Planned 2018E Run-Rate EBITDA EBITDA in PSXP EBITDA Remaining at PSX DCP EBITDA excluded. See appendix for additional footnotes.
  • 8.
    Phillips 66 PartnersLP 8 Strategic relationship with PSX Stable and predictable cash flows Low cost capital source Financial Flexibility
  • 9.
    DCP Midstream 9 Natural GasTotal Throughput (Tbtu/d) 7.1 7.1 7.3 7.1 2012 2013 2014 2015 NGL Production (MMBD) 402 426 454 410 2012 2013 2014 2015 Strengthened balance sheet Significant self-help initiatives Cash flow breakeven reduction from 60 to 35 cpg NGL Operating improvements Contract realignment System rationalization Capital discipline 90% investment-grade end-use customers Expected to be self-funding No DCP Midstream debt maturities until 2019
  • 10.
    Global Chemicals Demand 10 GlobalEthylene Demand and Utilization (MM Metric Tons and %) Source: Wood Mackenzie. Petrochemical demand driven by global economic growth Demand outpaced capacity additions 129 134 137 141 86.1% 86.6% 86.9% 87.7% 2012 2013 2014 2015 Demand Operating Rate
  • 11.
    0 150 300 450 600 750 900 1,050 1,200 0 15 3045 60 75 90 105 120 135 150 Chemicals Production Costs 11 M.E. Ethane N.A. Ethane N.A. LPG M.E. LPG/Naphtha W. Europe Naphtha N.A. Naphtha W. Europe LPG Asia NaphthaAsia LPG/Ethane Cumulative Capacity MM Tons 2015 vs 2014 Average Ethylene Production Cost Curve ($/ton) Petrochemical production costs reduced globally CPChem location-advantaged feedstock position continues Rest of World Asia Coal CPChem Source: Wood Mackenzie. 2014 2015
  • 12.
    CPChem Growth 12 USGC PetrochemicalsProject 1,500 kMTA (ethylene) at Cedar Bayou, TX 1,000 kMTA (polyethylene) at Old Ocean, TX Planned startup mid-2017 $1 B estimated EBITDA Healthy pipeline of self-funded growth opportunities Expect increased distributions post USGC project completion EBITDA estimate is on a CPChem 100% basis and is based on January 2016 IHS forecast premises.
  • 13.
    Refining 13 See appendix forfootnotes. 2.0 1.6 2.4 2013 2014 2015 FCF ($B) Strong free cash flow Increased demand for refined products Expansive footprint provides opportunities for Midstream growth 9.9 9.9 11.8 2013 2014 2015 Global Realized Margin ($/bbl)
  • 14.
    Refining 14 Adjusted ROCE (%) 1212 19 2013 2014 2015 0.9 1.2 1.2 1.4 2013 2014 2015 2016E Sustaining Return WRB Total Capex ($B) Investing to improve returns Quick payout, low cost projects Wood River projects Dilbit capacity increase, ULSD expansion, FCC modernization $200 MM capex, $100 MM EBITDA Bayway FCC modernization $150 MM capex, $75 MM EBITDA Billings heavy crude project $300 MM capex, $125 MM EBITDA See appendix for footnotes.
  • 15.
    Marketing & Specialties 15 IncreasedU.S. gasoline sales volumes by 7% Upgraded 300 U.S. branded sites Increased U.K. inland gasoline placement by 11% Added 31 new retail sites in Germany and Austria Third largest U.S. finished lubricants supplier See appendix for footnotes. 0.9 1.0 1.0 2013 2014 2015 FCF ($B) Adjusted ROCE (%) 28 32 35 2013 2014 2015
  • 16.
    5.0 4.4 5.8 0.5 1.5 5.1 5.0 7.2 2013 20142015 Adjusted CFO PSXP Contributions Financial Strength 16 Available Cash ($B) Dividends Sustaining Capex Strong balance sheet Investment-grade credit rating Disciplined capital allocation 20% net debt/cap $3.1 B cash $5 B revolving credit facility See appendix for footnotes.
  • 17.
    Capital Allocation 17 Funding reinvestment Cashfrom operations PSXP proceeds Returning capital to shareholders Dividend growth Ongoing share repurchases Distributions Reinvestment 2014 – 2016E See appendix for footnotes.
  • 18.
    Capital Spending 3.5 5.6 7.7 5.3 2013 20142015 2016E Consolidated WRB DCP CPChem 1.8 3.8 5.8 3.9 2013 2014 2015 2016E Refining M&S PSXP Midstream Investment in DCP Corporate Consolidated ($B) Capital Program ($B) 18 See appendix for footnotes.
  • 19.
    Distributions 19 1.33 1.89 2.18 2013 20142015 Annual Dividend ($/sh) Cumulative Distributions ($B) 3.7 8.4 11.1 2013 2014 2015 Share Repurchases and Exchanges Dividends Double-digit dividend growth 37% dividend CAGR since spin Ongoing share repurchase program 110 MM shares repurchased and exchanged $2.6 B authorization remaining Cumulative distributions include distributions since July 2012. See appendix for additional footnotes.
  • 20.
    Compelling Investment 20 Shareholder returns Disciplinedcapital allocation Unique portfolio EBITDA growth Multiple expansion -20% 20% 60% 100% 140% 180% 220% May-12 Feb-13 Nov-13 Aug-14 May-15 Feb-16 PSX +165% S&P 100 +47% Peers +37%
  • 21.
    Institutional Investors Contact RosyZuklic General Manager, Investor Relations C.W. Mallon Manager, Investor Relations InvestorRelations@p66.com 832-765-2297
  • 22.
    Investor Update March 2016 NYSE:PSXP www.phillips66partners.com
  • 23.
    Phillips 66 PartnersOwnership Structure Phillips 66 Partners GP LLC (PSXP General Partner) General Partner Units IDRs Operating Subsidiaries PSXP Public Unitholders (NYSE: PSX) (NYSE: PSXP) 100% ownership interest 29% limited partner interest Joint Ventures 2% general partner interest 69% limited partner interest 23
  • 24.
    Phillips 66 Partners Strongalignment with Phillips 66 Highly integrated assets Stable and predictable cash flows Significant growth potential Financial flexibility Pecan Grove Marine Dock 24
  • 25.
    Distribution Growth 0.2125 0.2248 0.2743 0.30170.3168 0.3400 0.3700 0.4000 0.4280 0.4580 3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015 Coverage Ratio 1.13x 1.10x 1.10x 1.44x 1.32x 1.28x 1.14x 1.15x 1.40x 1.44x 3Q 2013 distribution represents the minimum quarterly distribution, actual distribution of $0.1548 equal to MQD prorated. 25 Distribution / LP Unit ($)
  • 26.
    37.2 41.9 47.8 64.5 74.0 4Q 2014 1Q2015 2Q 2015 3Q 2015 4Q 2015 Financial Performance Adjusted EBITDA ($MM) 43.7 49.0 57.0 73.4 87.1 4Q 2014 1Q 2015 2Q 2015 3Q 2015 4Q 2015 Distributable Cash Flow ($MM) Adjusted EBITDA and Distributable Cash Flow shown are attributable to PSXP. 26
  • 27.
    Phillips 66 Partners1Q 2016 Drop Down 27 Assets include a 25% controlling interest in: Sweeny Fractionator – 100MBD NGL fractionator Clemens NGL Caverns – 7.5MMBbl NGL storage facility Total transaction value of $236 MM funded with: $24 MM take-back equity of PSXP LP and GP units $212 MM sponsor loan payable to PSX 2016E full-year EBITDA of $25 MM Long-term, take-or-pay contracts with Phillips 66 for the full capacity of the assets $25 MM EBITDA is attributable to PSXP interest.
  • 28.
    $314 MM Announced2016 Organic Growth Plan Bayou Bridge Pipeline Transports crude from Nederland, TX to Lake Charles, LA, and St. James, LA Increases crude supply options for LA refineries Expected completion of Lake Charles leg in 1Q 2016 Expected completion of St. James segment in 2H 2017 Sacagawea Pipeline 76-mile Sacagawea Pipeline and central delivery facility for gathering systems Connection into 100 MBD Palermo crude oil rail-loading facility Provides increased logistics options for shippers in the Bakken region Terminal completed in 4Q 2015; pipeline expected startup 2H 2016 Sand Hills Pipeline Adding lateral connections and increasing pumping capacity 28
  • 29.
    Highly Integrated andDiversified Asset Portfolio 29
  • 30.
    Fee-based, Long-term ContractsProvide Stability Hartford Connector includes PSX JV Wood River Refinery to Hartford and Hartford to Explorer pipelines. The term of the Hartford Connector throughput and deficiency agreement began in January 2008. Asset Initial Term (years) Maximum Term with Options (years) Clifton Ridge to Lake Charles 10 20 Sweeny to Pasadena 10 20 Hartford Connector 23 23 Gold Line 10 15 Sand Hills 15 15 Southern Hills 15 15 Cross Channel Connector 5 - Eagle Ford Gathering 7 - Explorer Various Various Clifton Ridge Terminal 5 20 Clifton Ridge / Pecan Grove Docks 5 20 Pasadena Terminal 5 20 Pasadena and Hartford Truck Racks 5 20 Gold Line Terminals 5 15 Medford Spheres 10 20 Bayway Rail Rack 10 20 Ferndale Rail Rack 10 20 Sweeny Fractionator 10 - Clemens Caverns 10 - Existing Pipelines 25% PSXP PSX accounted for 96% and 95% of PSXP’s transportation and terminaling revenues in 2015 and 2014, respectively Existing Terminals / Storage Remaining weighted average contract life of ~10 years Remaining weighted average contract life of ~5 years 30
  • 31.
    Balanced Debt Profile 0.3 0.5 0.3 20202025 2045 $1.1 B debt issuance February 2015 5-Year $300 MM notes, 2.646% coupon 10-Year $500 MM notes, 3.605% coupon 30-Year $300 MM notes, 4.680% coupon Average cost of 3.64% BBB (stable) / Baa3 (stable) Debt Maturity Profile ($B) 31
  • 32.
    Financial Flexibility Investment-grade creditrating Financial targets: 30% distribution CAGR 2013-2018 3.5x debt / EBITDA 1.1x annual coverage ratio Support Phillips 66 Midstream growth 32
  • 33.
    -100% -60% -20% 20% 60% 100% 140% 180% 220% 260% 300% Jul-13 Sep-13 Nov-13Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Closed 2nd acquisition - $340 MM Total Return Since IPO Closed 1st acquisition - $700 MM PSXP 158% Alerian MLP Index -45% IPO Closed 3rd acquisition - $1.1 B Closed 4th acquisition – $70 MM Chart reflects total unitholder return July 22, 2013 to February 12, 2016. Distributions assumed to be reinvested in units. Source: Bloomberg. 33
  • 34.
    Institutional Investors Contact RosyZuklic – General Manager, Investor Relations Rosy.Zuklic@p66.com | 832-765-2297 C.W. Mallon – Manager, Investor Relations C.W.Mallon@p66.com | 832-765-2297
  • 35.
  • 36.
    Segment Strategy 36 Refining: Enhance Returns Midstream:Growth Chemicals: Growth Marketing & Specialties: Selective Growth Execute Sweeny Hub Grow integrated transportation system PSXP as a funding vehicle Pursue organic and M&A opportunities Grow CPChem organically Advance olefins and polyolefins projects Capitalize on domestic feedstock advantage Leverage proprietary technology Optimize crude slate Expand export capability Increase yields Maintain cost discipline Enhance portfolio Expand European retail marketing Grow lubricants Ensure domestic refinery pull-through
  • 37.
    Midcontinent Integrated Growth 37 Midstream Palermo railterminal/Sacagawea pipeline (PSXP) DAPL/ETCOP Refining, Marketing & Specialties Ponca City Yield improvement project Tight oil processing flexibility 100% lease crude purchases Wood River Dilbit capacity increase ULSD expansion FCC modernization Billings Vacuum tower project Marketing & Specialties Grow branded fuels volumes Enhance Phillips 66 brand Marketing JVs and alliances
  • 38.
    Western Gulf Creating aWorld-Class Energy Complex 38 Midstream Sweeny Fractionator One (25% PSXP) Freeport LPG export terminal Eagle Ford crude pipeline Sweeny Fractionator Two Refining, Marketing & Specialties Sweeny Strategic asset integration Marketing & Specialties Grow unbranded fuels volumes Focus on high-quality branded assets Increase high-margin exports
  • 39.
    Eastern Gulf Refining Logisticsand Midstream Growth 39 Midstream Beaumont terminal expansion: +7 MMBbls Bayou Bridge pipeline Alliance clean products dock Refining, Marketing & Specialties Lake Charles Increase feedstock advantage Alliance Increase light crude runs Marketing & Specialties Grow unbranded fuels volumes Leverage brand value through licensing Increase high-margin exports Grow performance lubricants and export sales
  • 40.
    West Coast Enhancing Returns Midstream LosAngeles waterborne crude tank Santa Maria rail rack Refining, Marketing & Specialties San Francisco Yield improvements Los Angeles FCC energy reduction Marketing & Specialties Grow branded and unbranded fuels volumes Enhance 76 brand Increase high-margin exports Grow export lubricant sales 40
  • 41.
    Atlantic Basin Enhancing Returns Midstream BaywayLPG loading facility Refining, Marketing & Specialties Bayway FCC reactor modernization Yield improvements Marketing & Specialties Grow JET and COOP brands in Europe Increase unbranded volumes in the U.K. and U.S. Expand brand licensing in the U.S. 41
  • 42.
    Historical Performance 42 Adjusted EBITDAand Adjusted Earnings are adjusted for special items Adjusted EBITDA adjusted for non-controlling interest and proportional share of equity affiliates’ income taxes, net interest and D&A Adjusted CFO is cash from continuing operations and excludes working capital changes Adjusted EBITDA ($B) Adjusted Earnings ($B) Adjusted CFO ($B) 0.5 2.2 4.6 5.4 5.1 4.5 5.9 2009 '10 '11 '12 '13 '14 '15 0.5 1.7 3.5 5.3 3.6 3.8 4.2 2009 '10 '11 '12 '13 '14 '15 2.2 4.0 7.0 9.7 7.4 7.8 8.5 2009 '10 '11 '12 '13 '14 '15
  • 43.
    Free Cash Flow 2013– 2015 Average 43 1.0 1.4 0.7 0.3 Adjusted CFO & PSXP Contributions Sustaining Capex Available Cash Flow 1.1 0.9 0.2 CFO Sustaining Capex FCF Midstream ($B) Chemicals ($B) CFO excludes working capital. Sustaining capex excludes capital leases. Midstream adjusted CFO excludes PSXP. PSXP contributions are calculated as consideration paid by PSXP to PSX in dropdown transactions plus quarterly cash distributions paid from PSXP to PSX. Midstream sustaining capex excludes PSXP. DCP Midstream, CPChem and WRB free cash flow calculated based on Phillips 66’s share of after tax cash flow at the enterprise level. 2.9 2.0 0.9 CFO Sustaining Capex FCF 1.0 0.9 0.1 CFO Sustaining Capex FCF Refining ($B) Marketing & Specialties ($B) PSXP Contributions
  • 44.
    35% 19% 19% 5% M&S Chemicals Refining Midstream -10% 0% 10% 20% 30% 40% Average Capital Employed($B) Corporate -8% 2015 Adjusted ROCE 44 P66 Total 14% 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32
  • 45.
    Capital Structure 45 20- 30% ExcludingPSXP 22.0 21.6 23.1 6.1 8.6 7.8 5.0 5.2 3.0 22% 28% 25% 2013 2014 2015 Equity $B Debt $B Cash & Cash Equivalents $B Debt to Capital 22.4 22.0 23.9 6.1 8.6 8.9 5.4 5.2 3.1 21% 28% 27% 2013 2014 2015 Consolidated PSX
  • 46.
    3.0 8.0 5.0 Cash Undrawn Revolving CreditFacility Total Committed Liquidity 1.5 2.0 4.0 5.0 2016 2017 2018 2019 2020-30 2031-50 Bonds Revolving Credit Facility Debt and Liquidity 46 Debt Maturity Profile ($B) Liquidity ($B) As of 12/31/2015. Excludes PSXP. Debt maturity profile excludes capital leases. Undrawn Revolving Credit Facility includes $5.0 B revolving credit facility less $51 MM in letters of credit.
  • 47.
    2016 Sensitivities 47 Sensitivities shownabove are independent and are only valid within a limited price range.
  • 48.
    Phillips 66 CapitalProgram 48 Sustaining Growth Total Consolidated Capital Expenditures and Investments Midstream(1) 227 2,119 2,346 Chemicals - - - Refining 833 384 1,217 Marketing and Specialties 57 80 137 Corporate(2) 180 - 180 1,297 2,583 3,880 Select Equity Affiliates(3) DCP 98 125 223 CPChem 241 775 1,016 WRB 129 55 184 467 956 1,423 Capital Program(3) Midstream 324 2,244 2,568 Chemicals 241 775 1,016 Refining 962 439 1,401 Marketing and Specialties 57 80 137 Corporate 180 - 180 1,764 3,539 5,303 Millions of Dollars 2016 Budget (3) Includes Phillips 66’s portion of self-funded capital spending by DCP Midstream, CPChem, and WRB. (2) Includes non-cash capitalized lease of $3 million in Corporate (1) Includes 100% of Phillips 66 Partners
  • 49.
    1Q 2015 Phillips66 Partners Acquisition Drop-down assets 33.3% interest in Sand Hills NGL pipeline 33.3% interest in Southern Hills NGL pipeline 19.5% interest in Explorer refined products pipeline $1.1 B acquisition Asset-level 2015E EBITDA of $115 million Implied 9.5x purchase multiple on assets’ 2015E EBITDA Assets supported by long-term, fee-based agreements, primarily under take-or-pay terms Additional organic growth opportunities through identified expansion projects 49
  • 50.
    Footnotes 50 Slide 3 2016 YTDdata is through February 18, 2016 unless otherwise noted. Global Market Crack refers to worldwide market crack spread based on Phillips 66 global crude capacity. NGL weighted average prices are based on index prices from the Mont Belvieu and Conway market hubs that are weighted by DCP Midstream, LLC’s (DCP’s) NGL component and location mix. PE cash chain margins are ethylene to high-density polyethylene cash chain margins. 2016 YTD is January average pricing. Source: IHS, Inc. Slide 4 Corporate not included in bars on chart, but included in totals. Adjusted EBITDA adjusted for non- controlling interest and proportional share of selected equity affiliates’ income taxes, net interest and D&A.
  • 51.
    Footnotes 51 Slide 5 Injury statisticsdo not include major projects. Industry Averages are from: Phillips 66 – American Fuel & Petrochemical Manufacturers (AFPM) refining data, Chevron Phillips Chemical Company LLC (CPChem) – American Chemistry Council (ACC), DCP – Gas Processors Association (GPA). Growth component of operating costs is estimated based on growth initiatives post-2013. Slide 7 PSX operating assets EBITDA includes Refining Logistics. Refining Logistics represents terminaling, storage and other logistics assets currently embedded in the Refining segment. Amount represents an estimate of the EBITDA potential of these assets if they were transferred to Midstream and market-based fees for their use were charged to the Refining segment. Projects under construction and planned EBITDA growth is 2018 estimated run-rate EBITDA of projects completed 2016 or later. PSXP EBITDA includes EBITDA attributable to non-controlling interests. Planned EBITDA includes projects that have not yet reached final investment decision.
  • 52.
    Footnotes 52 Slide 13 FCF isCFO less sustaining capital, excluding working capital. WRB Refining LP (WRB) free cash flow is calculated based on P66’s share of after tax cash flow at the enterprise level. Global realized margin is based on total processed inputs and includes proportional share of refining margins contributed by certain equity affiliates. Realized margin excludes special items. Slide 14 Wood River Projects capex and EBITDA shown at 100% WRB. Refining capex excludes capital leases but includes Phillips 66’s portion of self-funded capital spending by WRB. Project capex and annual EBITDA are estimated. Slide 15 FCF is CFO less sustaining capital, excluding working capital.
  • 53.
    Footnotes 53 Slide 16 Net debt/capand cash figures are consolidated. Revolving credit facility available includes $5.0 B revolving credit facility less $51 MM in letters of credit. Adjusted CFO excludes PSXP and excludes working capital. PSXP contributions are calculated as consideration paid by PSXP to PSX in dropdown transactions plus quarterly cash distributions paid from PSXP to PSX. Sustaining capex excludes capital leases and excludes PSXP. Slide 17 Reinvestment excludes Phillips 66’s portion of self-funded capital spending by DCP, CPChem and WRB. Includes $1.5 B equity contribution to DCP in 2015. Distributions include the 2014 PSPI share exchange. Slide 18 Capital program includes Phillips 66’s portion of self-funded capital spending by DCP, CPChem and WRB.
  • 54.
    Footnotes 54 Slide 19 2014 sharerepurchases and exchanges include the PSPI share exchange. Slide 20 Chart reflects total shareholder return May 1, 2012 to February 18, 2016. Dividends assumed to be reinvested in stock. Source: Bloomberg. Peer average includes Delek US Holdings, Inc., HollyFrontier Corporation, Marathon Petroleum Corporation, PBF Energy Inc., Tesoro Corporation, Valero Energy Corporation, Western Refining, Energy Transfer Equity, L.P., Enterprise Products Partners L.P., ONEOK, Inc., Targa Resources Corp., Celanese Corporation, The Dow Chemical Company, Eastman Chemical Company, Huntsman Corporation, LyondellBasell Industries NV, and Westlake Chemical Corporation.
  • 55.
    Non-GAAP Reconciliations 55 Adjusted EBITDAby Segment Reconciliation 2012 2013 2014 2015 Midstream (excluding DCP Midstream) Midstream net income attributable to Phillips 66 (127) 259 372 337 Plus: Net income attributable to noncontrolling interests 7 17 35 61 Provision for income taxes (71) 142 230 212 Depreciation and amortization 83 88 91 127 Midstream (excluding DCP Midstream) EBITDA (108) 506 728 737 Adjustments (pretax): EBITDA attributable to Phillips 66 noncontrolling interests (13) (24) (45) (73) Proportional share of selected equity affiliates income taxes - - - - Proportional share of selected equity affiliates net interest - - - - Proportional share of selected equity affiliates depreciation and amortization - - - - Lower-of-cost-or-market inventory adjustments - - - - Gain on asset dispositions - - - - Gain on share issuance by equity affiliate - - - - Impairments 523 - - - Pending Claims and settlements (37) - - - Hurricane-related costs 2 - - - Pension settlement expense - - - 9 Midstream (excluding DCP Midstream) Adjusted EBITDA* 367 482 683 673 * Proportional share of selected equity affiliates is net of noncontrolling interests. Millions of Dollars Adjusted EBITDA by Segment Reconciliation 2012 2013 2014 2015 Proportional Share of DCP Midstream Proportional Share of DCP Midstream net income attributable to Phillips 66 179 210 135 (324) Plus: Net income attributable to noncontrolling interests Provision for income taxes 100 122 79 (139) Depreciation and amortization - - - - Proportional Share of DCP Midstream EBITDA 279 332 214 (463) Adjustments (pretax): EBITDA attributable to Phillips 66 noncontrolling interests Proportional share of selected equity affiliates income taxes - 4 3 (2) Proportional share of selected equity affiliates net interest 85 110 118 133 Proportional share of selected equity affiliates depreciation and amortization 131 139 150 166 Lower-of-cost-or-market inventory adjustments - - 2 - Gain on asset dispositions - - - (30) Gain on share issuance by equity affiliate - - - - Impairments in equity affiliates - - - 366 Pending Claims and settlements - - - - Hurricane-related costs - - - - Proportional Share of DCP Midstream Adjusted EBITDA* 495 585 487 170 * Proportional share of selected equity affiliates is net of noncontrolling interests. Millions of Dollars
  • 56.
    Non-GAAP Reconciliations 56 Adjusted EBITDAby Segment Reconciliation 2012 2013 2014 2015 Chemicals Chemicals net income attributable to Phillips 66 823 986 1,137 962 Plus: Provision for income taxes 366 375 495 353 Chemicals EBITDA 1,189 1,361 1,632 1,315 Adjustments (pretax): Proportional share of selected equity affiliates income taxes 79 93 111 91 Proportional share of selected equity affiliates net interest 13 10 9 7 Proportional share of selected equity affiliates depreciation and amortization 213 246 258 264 Impairments by equity affiliates 43 - 88 24 Premium on early debt retirement 144 - - - Lower-of-cost-or-market inventory adjustments - - 3 - Chemicals Adjusted EBITDA 1,681 1,710 2,101 1,701 Millions of Dollars Adjusted EBITDA by Segment Reconciliation 2012 2013 2014 2015 Refining Refining net income (loss) attributable to Phillips 66 3,091 1,747 1,771 2,555 Plus: Provision for income taxes 1,998 1,035 696 1,104 Net interest expense - - - - Depreciation and amortization 655 685 704 738 Refining EBITDA 5,744 3,467 3,171 4,397 Adjustments (pretax): Proportional share of selected equity affiliates income taxes 5 (4) 3 (3) Proportional share of selected equity affiliates net interest (118) (95) (19) - Proportional share of selected equity affiliates depreciation and amortization 236 237 245 252 Net (gain) loss on asset dispositions (185) - (145) (8) Impairments 606 - 131 - Canceled projects - - - - Pending claims and settlements 31 - 23 30 Severence accruals - - - - Hurrican-related costs 54 - - - Tax law impacts - (22) - - Lower-of-cost-or-market inventory adjustments - - 40 53 Pension settlement expenses - - - 53 Refining Adjusted EBITDA 6,373 3,583 3,449 4,774 Millions of Dollars
  • 57.
    Non-GAAP Reconciliations 57 Adjusted EBITDAby Segment Reconciliation 2012 2013 2014 2015 Marketing and Specialties Marketing and Specialties net income attributable to Phillips 66 544 894 1,034 1,187 Plus: Provision for income taxes 319 433 441 465 Net interest expense - - - (2) Depreciation and amortization 147 103 95 97 Marketing and Specialties EBITDA 1,010 1,430 1,570 1,747 Adjustments (pretax): Asset dispositions (4) (40) (125) (242) Impairments - - - - Pending claims and settlements 62 (25) (44) - Exit of a business line - 54 - - Tax law impacts - (6) - - Pension settlement expenses - - - 11 Marketing and Specialties Adjusted EBITDA 1,068 1,413 1,401 1,516 Millions of Dollars Adjusted EBITDA by Segment Reconciliation 2012 2013 2014 2015 Corporate Corporate net income (loss) attributable to Phillips 66 (434) (431) (393) (490) Plus: Net income attributable to noncontrolling interests - - - (8) Provision for income taxes (239) (263) (287) (231) Net interest expense 231 258 246 285 Depreciation and amortization 21 71 105 116 Corporate EBITDA (421) (365) (329) (328) Adjustments (pretax): Impairments 25 - - - Repositioning Costs 85 - - - Pending claims and settlements - - - - Tax impacts - - - - Pension settlement expense - - - 7 Corporate Adjusted EBITDA (311) (365) (329) (321) Millions of Dollars
  • 58.
    Non-GAAP Reconciliations 58 2009 20102011 2012 2013 2014 2015 Phillips 66 Phillips 66 net income attributable to Phillips 66 476 735 4,775 4,124 3,726 4,762 4,227 Less: Income from discontinued operations 19 30 43 48 61 706 - Plus: Net income attributable to noncontrolling interests 3 5 5 7 17 35 53 Provision for income taxes 357 562 1,822 2,473 1,844 1,654 1,764 Net interest expense (44) (41) (16) 231 258 246 283 Depreciation and amortization 873 874 902 906 947 995 1,078 Phillips 66 EBITDA 1,646 2,105 7,445 7,693 6,731 6,986 7,405 Adjustments (pretax): EBITDA attributable to Phillips 66 noncontrolling interests - (9) (10) (13) (24) (45) (73) Proportional share of selected equity affiliates income taxes 47 63 80 84 93 117 86 Proportional share of selected equity affiliates net interest (26) (6) (27) (20) 25 108 140 Proportional share of selected equity affiliates depreciation and amortization 557 540 584 580 622 653 682 Gain on asset dispositions (37) (234) (1,636) (189) (40) (270) (280) Gain on share issuance by equity affiliate (135) - - - - - - Impairments 129 1,512 506 1,197 - 131 - Impairments by equity affiliates - - - 88 390 Cancelled projects - 106 44 - - - - Severence accruals - 28 24 - - - - Exit of a business line - - - - 54 - - Pending claims and settlements 39 (56) - 56 (25) (21) 30 Premium on early debt retirement - - - 144 - - - Repositioning Costs - - - 85 - - - Hurricane-related costs - - - 56 - - - Tax law impacts - - - - (28) - - Lower-of-cost-or-market inventory adjustments - - - - - 45 53 Pension settlement expense - - - - - - 80 Phillips 66 Adjusted EBITDA 2,220 4,049 7,010 9,673 7,408 7,792 8,513 Millions of Dollars
  • 59.
    Non-GAAP Reconciliations 59 Forecasted EBITDA Weare unable to present reconciliations of the various forecasted EBITDA included in this presentation, because certain elements of net income, including interest, depreciation and income taxes, are not reasonably available. Together, these items generally result in EBITDA being significantly greater than net income.
  • 60.
    Non-GAAP Reconciliations 60 2013 20142015 Refining FCF Numerator Cash From Operations GAAP $ 3,700 1,374 2,770 Less: Change in Non-Cash Working Cap. 818 (1,599) (441) Cash From Operations (excluding WC) 2,882$ 2,973 3,211 Less: P66 Equity affiliate cash from ops 1,020 838 90 Add: Equity look through cash from ops 848 351 303 Adjusted FCF (excl WC) 2,710$ 2,486 3,424 Total Capex GAAP 820 1,038 1,069 Less: Growth Capex 166 265 189 Sustaining Capex 654$ 773 880 Less: P66 Equity affiliate sustaining capex - - - Add: Equity look through sustaining capex 94 118 151 Adjusted Sustaining Capex $ 748 891 1,031 Refining Free Cash Flow 1,962$ 1,595 2,393 Millions of Dollars
  • 61.
    Non-GAAP Reconciliations 61 2013 20142015 Refining ROCE Numerator Net Income 1,747 1,771 2,554 After-tax interest expense - - - GAAP ROCE earnings 1,747 1,771 2,554 Special Items (13) (195) (28) Adjusted ROCE earnings 1,734 1,576 2,526 Denominator GAAP average capital employed* 13,940 13,377 13,582 Discontinued Operations - - - Adjusted average capital employed* 13,940 13,377 13,582 *Total equity plus debt. Adjusted ROCE (percent) 12% 12% 19% GAAP ROCE (percent) 13% 13% 19% *Total equity plus debt. Millions of Dollars
  • 62.
    Non-GAAP Reconciliations 62 2013 20142015 M&S FCF Numerator Cash From Operations GAAP $ 757 1,663 1,736 Less: Change in Non-Cash Working Cap. (217) 651 676 Cash From Operations (excluding WC) 974$ 1,012 1,060 Less: P66 Equity affiliate cash from ops - - - Add: Equity look through cash from ops - - - Adjusted FCF (excl WC) 974$ 1,012 1,060 Total Capex GAAP 226 439 122 Less: Growth Capex 176 379 53 Sustaining Capex 50$ 60 69 Less: P66 Equity affiliate sustaining capex - - - Add: Equity look through sustaining capex - - - Adjusted Sustaining Capex $ 50 60 69 M&S Free Cash Flow 924$ 952 991 Millions of Dollars
  • 63.
    Non-GAAP Reconciliations 63 2013 20142015 M&S ROCE Numerator Net Income 894 1,034 1,187 After-tax interest expense - - - GAAP ROCE earnings 894 1,034 1,187 Special Items (9) (152) (239) Adjusted ROCE earnings 885 882 948 Denominator GAAP average capital employed* 3,160 2,743 2,735 Discontinued Operations - - - Adjusted average capital employed* 3,160 2,743 2,735 *Total equity plus debt. Adjusted ROCE (percent) 28% 32% 35% GAAP ROCE (percent) 28% 38% 43% *Total equity plus debt. Millions of Dollars
  • 64.
    Non-GAAP Reconciliations 64 2013 20142015 Phillips 66 Available Cash Cash From Continuing Operations GAAP 5,942$ 3,527 5,713 Less: Change in Non-Cash Working Cap. 880 (1,020) (221) Cash From Operations (excluding WC) 5,062$ 4,547 5,934 Less: PSXP cash from operations 24 100 176 Adjusted CFO 5,038$ 4,447 5,758 Add: PSXP contributions 20 536 1,478 Total Available Cash 5,058$ 4,983 7,236 Total Phillips 66 Sustaining Capex 1,028$ 1,095 1,186 Less: PSXP Sustaining Capex 3 12 8 Sustaining Capex excluding PSXP 1,025$ 1,083 1,178 Remaining capital expenditures 754 2,690 4,586 GAAP capital expenditures 1,779$ 3,773 5,764 Millions of Dollars
  • 65.
    Non-GAAP Reconciliations 65 2009 20102011 2012 2013 2014 2015 Phillips 66 Cash from Operations Cash From Continuing Operations GAAP 917$ 2,054 4,953 4,259 5,942 3,527 5,713 Less: Change in Non-Cash Working Cap. 393 (195) 314 (1,140) 880 (1,020) (221) Cash From Continuing Operations (excluding WC) 524$ 2,249 4,639 5,399 5,062 4,547 5,934 Millions of Dollars
  • 66.
    Non-GAAP Reconciliations 66 2009 20102011 2012 2013 2014 2015 Reconciliation of Earnings to Adjusted Earnings Consolidated Earnings 476 735 4,775 4,124 3,726 4,762 4,227 Adjustments: Gain on share issuance by equity affiliate (88) - - - - - - Asset dispositions (32) (116) (1,545) (106) (23) (494) (265) Impairments 116 1,118 318 979 - 131 - Impairments by equity affiliates - - - - - 69 256 Canceled projects - 29 28 - - - - Severance accruals - 28 15 - - - - Pending claims and settlements 25 (35) - 34 (16) (10) (23) Premium on early debt retirement - - - 89 - - - Repositioning costs - - - 55 - - - Exit of business line - - - - 34 - - Repositioning tax impacts - - - 177 - - - Certain tax impacts - - - - (17) - (84) Hurricane-related costs - - - 35 - - - Lower-of-cost-or-market inventoyr adjustments - - - - - 30 33 Pension settlement expenses - - - - - - 49 Discontinued operations (19) (30) (43) (48) (61) (706) - Adjusted earnings 478 1,729 3,548 5,339 3,643 3,782 4,193 Millions of Dollars Except as Indicated
  • 67.
    Non-GAAP Reconciliations 67 Midstream ChemicalsRefining Marketing & Specialties FCF Numerator Cash From Operations GAAP 859$ 571 2,615 1,385 Less: Change in Non-Cash Working Cap. (46) 0 (407) 370 Cash From Operations (excluding WC) 905$ 571 3,022 1,015 Less: P66 Equity affiliate cash from ops 228 571 649 0 Add: Equity look through cash from ops 378 1,147 501 0 Adjusted FCF (excl WC) 1,055$ 1,147 2,874 1,015 Total Capex GAAP 2,409 0 976 262 Less: Growth Capex 1,750 0 207 203 Sustaining Capex 659$ 0 769 59 Less: P66 Equity affiliate sustaining capex 500 0 0 0 Add: Equity look through sustaining capex 125 209 121 0 Adjusted Sustaining Capex 284$ 209 890 59 PSXP Contributions 678$ - - - Free Cash Flow 1,449$ 938 1,984 956 Average 2013-2015
  • 68.
    Non-GAAP Reconciliations 68 Phillips 66Midstream Chemicals Refining Marketing & Specialties Corporate ROCE Numerator Net Income 4,280$ 74 962 2,554 1,187 (497) After-tax interest expense 201 - - - - 201 GAAP ROCE earnings 4,481 74 962 2,554 1,187 (296) Special Items (34) 235 (10) (28) (240) 9 Adjusted ROCE earnings 4,447$ 309 952 2,526 947 (287) Denominator GAAP average capital employed* 31,749$ 6,793 4,921 13,582 2,735 3,718 Discontinued Operations - - - - - - Adjusted average capital employed* 31,749$ 6,793 4,921 13,582 2,735 3,718 *Total equity plus debt. Adjusted ROCE (percent) 14% 5% 19% 19% 35% -8% GAAP ROCE (percent) 14% 1% 20% 19% 43% -8% *Total equity plus debt. Millions of Dollars 2015
  • 69.
    Non-GAAP Reconciliations 69 Adjusted Phillips 66 Phillips66 Partners Phillips 66 Consolidated 2013 Cash and cash equivalents 4,975 425 5,400 Total Debt 6,126 - 6,126 Total Equity 21,983 409 22,392 Debt-to-capital ratio 22% 21% 2014 Cash and cash equivalents 5,199 8 5,207 Total Debt 8,617 18 8,635 Total Equity 21,622 415 22,037 Debt-to-capital ratio 28% 28% 2015 Cash and cash equivalents 3,026 48 3,074 Total Debt 7,796 1,091 8,887 Total Equity 23,129 809 23,938 Debt-to-capital ratio 25% 27% Millions of Dollars
  • 70.
    PSXP Non-GAAP Reconciliations 70 Millions ofDollars Year ending February 29 2016 Reconciliation of PSXP Estimated EBITDA to Estimated Net Income* Estimated net income 82$ Plus: Depreciation 20 Interest expense 4 Income taxes 9 Estimated EBITDA 115$ *Amounts reflect the sum of EBITDA and net income forecasts within each joint venture, multiplied by PSXP's expected ownership interest. 1Q 2015 Phillips 66 Partners Acquisition
  • 71.
    PSXP Adjusted EBITDAand Distributable Cash Flow Reconciliation to Net Income $ MM 4Q 2015 3Q 2015 2Q 2015 1Q 2015 4Q 2014 Net Income $ 64.5 $ 52.3 $ 42.0 $ 35.4 $ 36.3 Plus: Depreciation 5.7 5.7 5.3 5.1 4.5 Net interest expense 9.2 9.1 9.5 5.8 2.1 Amortization of deferred rentals 0.1 0.1 0.1 0.1 0.1 Provision for (benefit from) income taxes 0.1 0.1 (0.1) 0.2 0.2 EBITDA 79.6 67.3 56.8 46.6 43.2 Distributions in excess of equity earnings 6.6 4.6 0.2 0.7 - Expenses indemnified or prefunded by Phillips 66 0.5 1.1 - 0.3 0.1 Transaction costs associated with acquisitions 0.4 0.4 - 1.4 1.0 EBITDA attributable to Predecessors - - - - (0.6) Adjusted EBITDA 87.1 73.4 57.0 49.0 43.7 Plus: Adjustments related to minimum volume commitments (1.7) 2.4 2.2 1.1 (2.4) Phillip 66 prefunded maintenance capital expenditures - - - - 0.1 Less: Net interest 9.2 9.1 9.5 6.5 1.4 Income taxes paid (refunded) (0.1) - 0.4 - - Maintenance capital expenditures 2.3 2.2 1.5 1.7 2.8 Distributable Cash Flow 74.0 64.5 47.8 41.9 37.2 71