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Investor Update September 2015

- The presentation discusses Phillips 66's strategy of pursuing operating excellence, growth, and returns through 2018. It outlines plans for growing earnings in midstream, chemicals, and refining by $2.5 billion through capital projects and acquisitions. Phillips 66 expects to enhance shareholder value by increasing dividends and share repurchases with strong free cash flow.

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Investor Update September 2015
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 and natural gas prices, and petrochemical and refining 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 STATEMENTCautionary Statement 1
Strategy 2 Operating Excellence Growth Returns Distributions High-Performing Organization Committed to safety, reliability and environmental stewardship while protecting shareholder value Reshaping our portfolio by capturing growth opportunities in Midstream and Chemicals Enhancing returns by maximizing earnings from existing assets and investing capital efficiently Committed to dividend growth, share repurchases and financial strength Building capability, pursuing excellence and doing the right thing
Operating Excellence 3 Industry Average Total Recordable Rates (Incidents per 200,000 Hours Worked) ’12 ’13 ’14 1H ’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 2.7 0.3 0.2 2012 2013 2014 1H 2015 Growth 430 317 300 154 2012 2013 2014 1H 2015 93% 93% 94% 87% 3% 3% 4% 9% 2012 2013 2014 1H 2015 Planned Maintenance & Turnarounds
Global Energy Landscape 4 85 87 89 91 93 95 97 2010 2011 2012 2013 2014 2015E Global Oil Supply Global Oil DemandSource: International Energy Agency Global Oil Supply and Demand (MMBD) Abundant supply Demand exceeding expectations Energy efficiency increasing
U.S. Energy Landscape 5 0 3 6 9 12 15 2010 2012 2014 2016 2018 Crude & Condensate NGL Source: EIA Annual Energy Outlook 2015 U.S. Liquids Production (MMBD) Production remains resilient Pace of infrastructure investment contingent on production growth Stronger fuels demand
U.S. Downstream Advantage 6 0 5 10 15 20 Ethane Cracker Margin, cpp Natural Gas, $/MMBtu Brent - WTI, $/bbl Current Historical U.S. Advantage Refiners and chemical manufacturers remain advantaged Low feedstock costs Low energy costs Scale and complexity MLP structure supports midstream investment See appendix for footnotes.
Value of Integration 7 EV/EBITDA Multiples Creating value across downstream Accelerating growth Leveraging existing portfolio Allocating capital efficiently Expanding multiple See appendix for footnotes. 5.4x 6.7x 7.1x 14.5x Refining Peers PSX Chemicals Peers Midstream Peers
Midcontinent Integrated Growth 8 Midstream $280 MM EBITDA growth Palermo rail terminal/Sacagawea pipeline (PSXP) Dakota Access/ETCO crude pipelines Refining, Marketing & Specialties $430 MM EBITDA growth 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 See appendix for footnotes.
Western Gulf Creating a World-Class Energy Complex 9 Midstream $750 MM EBITDA growth Sweeny Fractionator One Freeport LPG export terminal Cross-channel connector (PSXP) Eagle Ford crude pipeline Sweeny Fractionator Two Refining, Marketing & Specialties $70 MM EBITDA growth Sweeny FCC yield improvement Marketing & Specialties Grow unbranded fuels volumes Focus on high-quality branded assets Increase high-margin exports See appendix for footnotes.
Eastern Gulf Refining Logistics and Midstream Growth 10 Midstream $200 MM EBITDA growth Beaumont terminal expansion: +7 MMBbls Bayou Bridge pipeline Alliance clean products dock Refining, Marketing & Specialties $150 MM EBITDA growth Lake Charles FCC yield improvement 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 See appendix for footnotes.
West Coast Enhancing Returns Midstream $60 MM EBITDA growth Completed Ferndale rail rack 4Q 2014 (PSXP) Los Angeles waterborne crude tank Santa Maria rail rack Refining, Marketing & Specialties $60 MM EBITDA growth San Francisco Hydrocracker debottleneck 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 11 See appendix for footnotes.
Atlantic Basin Enhancing Returns Midstream $50 MM EBITDA growth Completed Bayway rail rack 3Q 2014 (PSXP) Bayway LPG loading facility Refining, Marketing & Specialties $200 MM EBITDA growth Bayway FCC reactor modernization Yield improvements Marketing & Specialties Grow JET and COOP brands in Europe Increase unbranded volumes in the U.K. and U.S. Expand brand licensing in the U.S. 12 See appendix for footnotes.
Midstream 13 DCP EBITDA excluded. See appendix for additional footnotes. 0.3 1.10.7 0.9 0.4 1.2 2.3 PSXP 2Q 2015 Run- Rate EBITDA PSX Operating Assets Projects Under Construction Planned 2018E EBITDA in PSXP EBITDA Remaining at PSX 2015 2016 2017 2018 Sweeny Midstream Hub Phase 1 Sweeny Midstream Hub Expansion Eagle Ford Crude Pipeline Beaumont Terminal Expansion Bayou Bridge Pipeline Bakken Expansion (PSXP) EBITDA ($B) More than $20 B backlog of projects
PSXP Value to PSX 0 5 10 15 2013 2014 1H 2015 2018E Cumulative Dropdown Proceeds Cumulative Distributions Cumulative Cash from PSXP ($B) 0 5 10 15 2013 2014 2015E 2018E PSX Equity Value of PSXP Distributions ($B) Fee-based assets Growth opportunities Organic Drop downs Selective acquisitions Funds Midstream growth See appendix for footnotes. 14
$550 MM 2015 growth capital $500 MM EBITDA growth by 2018 Placing current projects into service in 2015 Keathley Canyon National Helium Plant expansion Zia II Plant and Gathering Lucerne 2 Plant and Gathering Sand Hills Laterals DJ Basin Grand Parkway Increasing fee-based earnings DCP Midstream 15 See appendix for footnotes. New plant G&P plant Proposed Pipeline
Chemicals 16 Self-funded capital program $6.5 – 7 B growth spending 36% U.S. O&P capacity growth 0 100 200 300 400 500 600 700 800 900 0 15 30 45 60 75 M.E. Ethane N.A. Ethane N.A. LPG M.E. LPG/Naphtha W. Europe Naphtha N.A. Naphtha W. Europe LPG Asia NaphthaAsia LPG Cumulative Capacity MM Tons June 2015 YTD Average Ethylene Production Cost Curve ($/ton) Petrochemical demand driven by global GDP growth Cost-advantaged feedstocks High capacity utilization supports strong margins Rest of World China Coal CPChem Asia Import price ~$1,200/ton Source: Wood MacKenzie
CPChem Projects Update 17 $1.5 B EBITDA growth by 2018 Completed 1-hexene project and 10th Sweeny furnace in 2014 NAO expansion 100 kMTA at Cedar Bayou, TX Completed 2Q 2015 USGC Petrochemicals 1,500 kMTA (ethylene) at Cedar Bayou, TX 1,000 kMTA (polyethylene) at Old Ocean, TX Planned start-up mid-2017 New cracker under consideration See appendix for footnotes.
Refining Enhancing Returns 18 11% 12% 15% 2009 - 2014 Avg Constant Margin Improvements 2015E Adjusted Constant Margin Future Improvements 2018E Return on Capital Employed (ROCE) Significant free cash flow generation High-return projects creating sustainable earnings increases EBITDA growth: $850 MM Increasing ROCE 4% by 2018 Expansive footprint provides leverage for Midstream growth 2.5 1.6 0.9 CFO Sustaining Capex FCF 2009 – 2014 Average Annual Free Cash Flow ($B) See appendix for footnotes.
Marketing & Specialties High-returning businesses 19 $250 MM EBITDA growth by 2018 25% ROCE U.S. Marketing Wholesale model Enhancing fuels brands Volume growth International Marketing Retail / wholesale model Adding 100+ sites Specialties Grow Lubricants earnings and international portfolio See appendix for footnotes.
3.7 2.7 6.61.0 1.5 2.4 CFO Sustaining Capex FCF PSX Growth Est. PSXP Contributions 2018E Available Cash Flow Phillips 66 Available Cash Flow 20 Annual Available Cash Flow ($B) Diversified cash generation Funding transformational growth Growing distributions Financial flexibility Strong free cash flow yield 2009 – 2014 AverageSee appendix for footnotes.
Capital Allocation 21 Ensuring financial flexibility Investment grade credit rating Strong balance sheet Funding growth Cash from operations PSXP proceeds Returning capital to shareholders Dividend growth Ongoing share repurchases Distributions Reinvestment 2014 – 2016E
Capital Budget 22 $2 - 3 B Growth capital Legacy, scalable Midstream assets Fee-based assets suitable for PSXP dropdown Quick payout Refining projects $1 B Sustaining capital Maintaining safe, reliable assets
Dividend Growth (Quarterly ¢/share) Distributions 624 MM 590 MM 538 MM $7.0 B 20 56 Share Count and Capital Returned 3Q2012 4Q2013 2Q2015 23 3Q2012 4Q2013 2Q2015 See appendix for footnotes.
6.4 9.3 2009 - 2014 avg Midstream Growth Chemicals Growth Refining Returns M&S Growth 2018E Refining Midstream Chemicals M&S Delivering Value 24 Adjusted Constant Margin EBITDA ($B) 45% EBITDA growth Growing Midstream and Chemicals Enhancing returns in Refining Realizing benefits of reinvestment See appendix for footnotes.
Compelling Investment 25 Shareholder returns Unique portfolio EBITDA growth Disciplined capital allocation Multiple expansion -20% 20% 60% 100% 140% 180% May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 PSX +158% S&P 100 +44%
Institutional Investors Contact Kevin Mitchell Vice President, Investor Relations C.W. Mallon Manager, Investor Relations InvestorRelations@p66.com 832-765-2297
Investor Update September 2015 NYSE: PSXP www.phillips66partners.com
Cautionary Statement 28 This presentation contains forward-looking statements as defined under the federal securities laws, including projections, plans and objectives. Although Phillips 66 Partners believes that expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct. In addition, these statements are subject to certain risks, uncertainties and other assumptions that are difficult to predict and may be beyond Phillips 66 Partners’ control. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, actual results may vary materially from what Phillips 66 Partners anticipated, estimated, projected or expected. The key risk factors that may have a direct bearing on the forward-looking statements in the presentation are the accuracy of our assumptions used to estimate the benefits to be realized from Phillips 66 Partners’ acquisition of interests in certain joint ventures that own or control midstream pipeline assets (the “acquisition”), our ability to successfully integrate the assets into our operations, the decisions made by Explorer Pipeline Company, DCP Sand Hills Pipeline, LLC, and DCP Southern Hills Pipeline, LLC regarding distributions these entities make to us as an equity owner, and other factors as described in the filings that Phillips 66 Partners makes with the Securities and Exchange Commission. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than as described. All forward-looking statements in this presentation are made as of the date hereof and Phillips 66 Partners undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This presentation is not, and under no circumstance is to be construed to be, a prospectus, offering memorandum, or advertisement and is not an offer to sell securities. The SEC and state securities regulators have not reviewed or determined if this presentation is truthful or complete. Non-GAAP Financial Measure Disclosure Today’s presentation includes certain non-GAAP financial measures as defined under Regulation G of the Securities Exchange Act of 1934, as amended. A reconciliation of those measures to the most directly comparable GAAP measures is available in the appendix to this presentation.
Phillips 66 Partners Ownership Structure 29 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
Phillips 66 Partners 30 Strong alignment with Phillips 66 Highly integrated assets Stable and predictable cash flows Significant growth potential Financial flexibility Pecan Grove Marine Dock
Phillips 66 Partners Financial Highlights 31 Distributable cash flow Adjusted EBITDA Acquired interest in three pipeline assets in Q1 2015 $47.8 MM $57.0 MM 0.2125 0.2248 0.2743 0.3017 0.3168 0.34 0.37 0.40 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 * (MQD) Coverage Ratio 1.13x 1.10x 1.10x 1.44x 1.32x 1.28x 1.14x 1.15x Distribution / LP Unit ($) * Represents the minimum quarterly distribution for 3Q 2013, actual distribution of $0.1548 equal to MQD prorated See appendix for footnotes. 2Q 2015
Q1 2015 Acquisition 32 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
33 $275 MM In Announced Organic Growth Cross-Channel Connector Pipeline Eagle Ford Crude Gathering System Bakken Joint Ventures • Capital cost: $22 MM • Increases access to export docks for shippers in Houston Ship Channel • Expected completion in 4Q 2015 • Capital cost: $50 MM • Connects Eagle Ford crude oil production to third-party pipelines • Initial operations commenced January 2015; expected completion in 3Q 2015 • Capital cost: $160 MM (PSXP share) • 100 MBD Palermo crude oil rail-loading facility, 76-mile Sacagawea Pipeline and central delivery facility for gathering systems • Provides increased logistics options for shippers in the Bakken region • Expected terminal completion in 4Q 2015; pipeline completion in 2016 Sand Hills Pipeline • Capital cost: ~ $45 MM (PSXP share) • Adding lateral connections and increasing pumping capacity beyond 200 MBD See appendix for footnotes.
34 Highly Integrated Assets Palermo Rail Terminal expected to be operational Q4 2015.
35 Fee-based, Long-term contracts provide stability Asset Initial Term (years) Maximum Term with Options (years) Clifton Ridge to Lake Charles 10 20 Sweeny to Pasadena 10 20 Hartford Connector 23 * 23 Gold Line 10 15 Sand Hills 15 15 Southern Hills 15 15 Explorer Various Various Clifton Ridge terminal 5 20 Clifton Ridge / Pecan grove docks 5 20 Pasadena terminal 5 20 Pasadena and Hartford truck racks 5 20 Gold Line terminals 5 15 Medford Spheres 10 20 Bayway Rail Rack 10 20 Ferndale Rail Rack 10 20 * Includes PSX JV Wood River Refinery to Hartford and Hartford to Explorer pipelines. The term of the Hartford Connector throughput and deficiency agreement began in January 2008 PipelinesTerminals/Storage
Adjusted EBITDA and DCF 36 34.3 33.4 37.2 41.9 47.8 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Distributable Cash Flow ($MM) 37.6 35.9 43.7 49.0 57.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Adjusted EBITDA ($MM)
Balanced Debt Maturity Profile 37 2020 2025 2045 5-year notes 2.646% coupon 10-year notes 3.605% coupon 30-year notes 4.68% coupon $1.1 B debt issuance February 2015 5-Year $300 MM notes 10-Year $500 MM notes 30-Year $300 MM notes Average cost of 3.64% BBB (stable) / Baa3 (stable) $300MM $500MM $300MM
Financial Flexibility 38 Investment grade credit rating Target 3.5x debt / EBITDA 30% distribution CAGR through 2018 Target 1.1x annual coverage ratio Support Phillips 66 Midstream growth
Closed 1st acquisition - $700 MM Closed 2nd acquisition - $340 MM -30% -10% 10% 30% 50% 70% 90% 110% 130% 150% 170% 190% 210% 230% 250% 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 39 Total Return Since IPO PSXP 172% Alerian MLP Index -10% IPO Closed 3rd acquisition - $1.1 B Source: Bloomberg
Institutional Investors Contact Kevin Mitchell - Investor Relations Kevin.Mitchell@p66.com 832-765-2297 C.W. Mallon - Investor Relations C.W.Mallon@p66.com 832-765-2297
Appendix
Segment Strategy 42 Refining: Enhance Returns Midstream: Growth Chemicals: Growth Marketing and Specialties: Selective Growth Execute Sweeny hub Grow integrated Transportation system PSXP as a funding vehicle Expand DCP G&P Pursue organic and M&A opportunities Grow CPChem organically Advance olefins and polyolefins projects Capitalize on domestic feedstock advantage Leverage proprietary technology Optimize crude slate Expand export capability Increase yields Maintain cost discipline Enhance portfolio Expand European retail marketing Grow lubricants Ensure domestic refinery pull-through
Free Cash Flow 2013 – 1H 2015 Average 43 0.9 1.3 0.7 0.3 CFO & Drop Proceeds Sustaining Capex Available Cash Flow 1.2 1.0 0.2 CFO Sustaining Capex FCF Midstream ($B) Chemicals ($B) CFO excludes working capital. Average from 2013 – 1H 2015 DCP Midstream, CPChem and WRB free cash flow calculated at the enterprise level 2.7 1.8 0.9 CFO Sustaining Capex FCF 1.0 0.9 0.1 CFO Sustaining Capex FCF Refining ($B) Marketing & Specialties ($B) PSXP Drop Proceeds
25% 21% 16% 5% M&S Chemicals Refining Midstream -10% 0% 10% 20% 30% 40% Average Capital Employed ($B) Corporate -7% 1H 2015 Adjusted ROCE 44 P66 Total 13% 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32
22.0 21.6 22.4 6.2 8.7 7.9 5.0 5.2 5.0 22% 29% 26% 2013 2014 1H 2015 Equity $B Debt $B Cash & Cash Equivalents $B Debt to Capital Capital Structure 45 20- 30% Excludes PSXP.
2015 Sensitivities – Phillips 66 46 Sensitivities shown above are independent and are only valid within a limited price range. Annual Net Income $MM Midstream - DCP (net to Phillips 66) 10¢/Gal Increase in NGL price 30 $1/MMBtu Increase in Natural Gas price 25 $10/BBL Increase in WTI price 15 Chemicals - CPChem (net to Phillips 66) 1¢/Lb Increase in Chain Margin (Ethylene, Polyethylene, NAO) 35 Worldwide Refining $1/BBL Increase in Gasoline Margin 220 $1/BBL Increase in Distillate Margin 200 $1/BBL Widening LLS / Maya Differential (LLS less Maya) 50 $1/BBL Widening WTI / WCS Differential (WTI less WCS) 40 $1/BBL Widening WTI / WTS Differential (WTI less WTS) 15 $1/BBL Widening LLS / 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:
Phillips 66 Capital Program 47 Sustaining Growth Total Capital Expenditures and Investments Consolidated Midstream(1) Transportation 148 1,084 1,232 NGL 19 1,912 1,931 167 2,996 3,163 Chemicals - - - Refining(2) 813 299 1,112 Marketing and Specialties 78 92 170 Corporate(2) 155 - 155 1,213 3,387 4,600 Selected Equity Affiliates DCP 125 275 400 CPChem 187 1,266 1,453 WRB 150 53 203 462 1,594 2,056 Capital Program(3) Midstream Transportation 148 1,084 1,232 DCP 125 275 400 NGL 19 1,912 1,931 292 3,271 3,563 Chemicals 187 1,266 1,453 Refining 963 352 1,315 Marketing and Specialties 78 92 170 Corporate 155 - 155 1,675 4,981 6,656 (1) Includes 100% of Phillips 66 Partners Millions of Dollars 2015 Budget (2) Includes non-cash capitalized leases of $11 million in Refining and $21 million in Corporate and Other (3) Includes Phillips 66's share of capital spending by DCP, CPChem and WRB, which are expected to be self- funded.
Footnotes 48 Slide 4 Injury statistics do not include major projects. Industry Averages are from: Phillips 66 – American Fuel & Petrochemical Manufacturers (AFPM) refining data, CPChem – American Chemistry Council (ACC), DCP – Gas Processors Association (GPA). Growth component of operating costs is estimated based on forecasted growth spending. Slide 7 Current based on last 4 quarters: 3Q 2014 – 2Q 2015 average History based on 2000 – 2013 average Ethane Cracker Margin: Advantage is N.A. ethane margin (Spot) less N.E. Asia naphtha margin (Spot) (source: I.H.S.) Natural Gas: Advantage calculated as average of ICE NBP gas and Japan natural gas LNG import price less Henry Hub (source: Morningstar) Brent – WTI: Brent Dated less WTI at Cushing (source: Morningstar)
Footnotes 49 Slide 8 Average of company EV (daily EV 1/1/2015 – 8/31/2015) and 2016 consensus EBITDA as of 8/31/2015. Refining Peers is average of: DK, HFC, MPC, PBF, TSO, VLO, WNR Chemicals Peers is average of: CE, DOW, EMN, HUN, LYB, WLK Midstream Peers is average of: EPD, ETE, OKE, TRGP Source: Bloomberg Slides 9 – 13 EBITDA growth is 2018 estimated run-rate EBITDA of projects completed second-half 2014 or later. Slide 14 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 second-half 2014 or later. PSXP EBITDA includes EBITDA attributable to Phillips 66 noncontrolling interests.
Footnotes 50 Slide 15 PSXP is a consolidated subsidiary of PSX. Accordingly, quarterly cash distributions paid from PSXP to PSX, and consideration paid by PSXP to PSX in a dropdown transaction, both eliminate in consolidation and do not impact PSX’s consolidated cash balance, except to the extent PSXP funds consideration for a dropdown transaction with public debt and equity offerings. PSXP equity value based on LP distributions multiple of 20x and GP distributions multiple of 30x. Slide 16 Amounts presented are on a DCP Midstream 100% basis, and include DPM (100%). EBITDA growth is 2018 estimated run-rate EBITDA of projects completed since 2014 based on normalized price and volume assumptions. Slide 18 EBITDA growth is 2018 estimated run-rate EBITDA of the following projects: 1-hexene, 10th Sweeny furnace, NAO expansion project and USGC petrochemical project. $1.5 B estimated incremental EBITDA based on 2012 industry margins.
Footnotes 51 Slide 19 EBITDA growth is 2018 estimated run-rate EBITDA of projects completed second-half 2014 or later. CFO excludes working capital. WRB free cash flow calculated at the enterprise level. 2015E ROCE includes project and operational improvements since 2014 on a constant margin basis. Future improvements include estimated run-rate improvement of projects completed by 2018. Slide 20 EBITDA growth is 2018 estimated run-rate EBITDA of projects completed second-half 2014 or later. ROCE is 1H 2015 annualized. Slide 21 CFO excludes working capital. Available Cash Flow growth is 2018 estimated run-rate Free Cash Flow of projects completed primarily second-half 2014 or later. Assumes joint ventures distribute 100% of growth EBITDA. PSXP contributions to PSX include distributions and PSXP funding for organic growth capital and drop- downs. See footnotes to slide 15 for an explanation of the impact of PSXP drop proceeds on Phillips 66’s consolidated cash balance.
Footnotes 52 Slide 24 Capital returned includes the 2014 PSPI share exchange and excludes dividend payments. Slide 25 Corporate not included in bars on chart, but included in totals. Midstream EBITDA excludes EBITDA attributable to Phillips 66 noncontrolling interests. EBITDA growth is 2018 estimated run-rate EBITDA of projects completed primarily second-half 2014 or later. Slide 26 Chart reflects total shareholder return May 1, 2012 to August 31, 2015. Dividends assumed to be reinvested in stock on payment date.
Non-GAAP Reconciliations 53 Forecasted Available Cash Flow Forecasted available cash flow estimates were primarily derived on a forecasted EBITDA basis, with adjustments for estimated interest and tax payments and sustaining capital expenditures. Accordingly, all the elements required for forecasted cash from operations are not available. Generally, the timing of working capital impacts would be the primary difference between forecasted available cash flow and forecasted cash from operations. Forecasted EBITDA estimates were primarily derived on an EBITDA-only basis (revenue and cost projections). Accordingly, all the elements required for forecasted net income, including income taxes, interest expense, and depreciation and amortization, are not available. Together, these items generally result in a significant uplift in EBITDA over net income. Run rate EBITDA reflects annualized forecasted EBITDA estimates of assets immediately upon completion/acquisition. Forecasted EBITDA
Non-GAAP Reconciliations 54 Millions of Dollars Average 2009-2014 Refining Free Cash Flow Numerator Cash From Operations GAAP 2,615$ Less: Change in Non-Cash Working Cap. 152 Cash From Operations (excluding WC) 2,463 Less: P66 Equity affiliate cash from ops 584 Add: Equity look through cash from ops 573 Adjusted FCF (excl WC) 2,452$ Total Capex GAAP 1,038$ Less: Growth Capex 287 Sustaining Capex 751 Less: P66 Equity affiliate sustaining capex - Add: Equity look through sustaining capex 134 Adjusted Sustaining Capex 885$ Free Cash Flow 1,567$
Non-GAAP Reconciliations 55 Refining Marketing & Specialties ROCE Numerator Net Income 1,127 727 After-tax interest expense 0 0 GAAP ROCE earnings 1,127 727 Special Items 344 (34) Adjusted ROCE earnings 1,471 693 Denominator GAAP average capital employed* 13,377 2,743 Discontinued Operations - - Adjusted average capital employed* 13,377 2,743 Average Adjusted ROCE (percent) 11% 25% Average GAAP ROCE (percent) 8% 27% *2014 Total equity plus debt. Average 2009-2014 Millions of Dollars
Non-GAAP Reconciliations 56 Millions of Dollars Average 2009-2014 Phillips 66 Free Cash Flow Numerator Cash From Operations GAAP 3,650$ Less: Change in Non-Cash Working Cap. (128) Cash From Operations (excluding WC) 3,737$ Total Capex GAAP 3,773$ Less: Growth Capex 2,788 Sustaining Capex 985$ Free Cash Flow* 2,752$ * Not adjusted for equity affiliates.
Non-GAAP Reconciliations 57 Midstream Chemicals Refining Marketing & Specialties Corporate Phillips 66 Adjusted EBITDA by Segment Reconciliation Net income attributable to Phillips 66 657$ 729 1,127 727 (292) 3,100 Less: Income from discontinued operations - - - - 151 Plus: Net income attributable to noncontrolling interests 12 - - - 12 Provision for income taxes 241 292 687 409 (176) 1,452 Net interest expense - - (1) (19) 126 106 Depreciation and amortization 86 - 668 128 34 916 EBITDA 996$ 1,021 2,481 1,245 (308) 5,434 Adjustments (pretax): EBITDA attributable to Phillips 66 noncontrolling interests (17) - - - - (17) Proportional share of selected equity affiliates income taxes 3 76 2 - - 81 Proportional share of selected equity affiliates net interest 108 20 (119) - - 9 Proportional share of selected equity affiliates depreciation and amortization166 215 208 - - 589 Gain on asset dispositions (308) - (16) (78) - (401) Gain on share issuance by equity affiliate (23) - - - - (23) Impairments 100 22 456 12 4 594 Cancelled projects - - 25 - - 25 Severence accruals - - 9 - - 9 Exit of a business line - - - 9 - 9 Pending Claims and settlements (6) - 16 (11) - (1) Premium on early debt retirement - 24 - - - 24 Repositioning Costs - - - - 14 14 Hurricane-related costs - - 9 - - 9 Tax law impacts - - (4) (1) - (5) Lower-of-cost-or-market inventory adjustments - 1 7 - - 8 Adjusted EBITDA* 1,021$ 1,377 3,074 1,176 (289) 6,359 * Proportional share of selected equity affiliates is net of noncontrolling interests. Millions of Dollars Average 2009 - 2014
Non-GAAP Reconciliations 58 Midstream Chemicals Refining Marketing & Specialties FCF Yield Numerator Cash From Operations GAAP 750$ 597 2,557 1,177 Less: Change in Non-Cash Working Cap. 12 - (330) 168 Cash From Operations (excluding WC) 738 597 2,887 1,009 Less: P66 Equity affiliate cash from ops 200 597 749 - Add: Equity look through cash from ops 372 1,170 564 - Adjusted FCF (excl WC) 910$ 1,170 2,702 1,009 Total Capex GAAP 869 - 415 176 Less: Growth Capex 728 - (343) 120 Sustaining Capex 142 - 758 56 Less: P66 Equity affiliate sustaining capex - - - - Add: Equity look through sustaining capex 133 200 109 - Adjusted Sustaining Capex 275$ 200 867 56 Free Cash Flow 635$ 970 1,835 952 Millions of Dollars Average 2013-1H 2015
Non-GAAP Reconciliations 59 Phillips 66 Midstream Chemicals Refining Marketing & Specialties Corporate ROCE Numerator Net Income 2,022$ 16 498 1,142 618 (252) After-tax interest expense 107 - - - - 107 GAAP ROCE earnings 2,129 16 498 1,142 618 (145) Special Items (162) 126 0 (43) (242) (4) Adjusted ROCE earnings 1,967$ 142 498 1,099 377 (149) Denominator GAAP average capital employed* 31,454$ 5,691 4,803 13,498 2,956 4,506 Discontinued Operations - - - - - - Adjusted average capital employed* 31,454$ 5,691 4,803 13,498 2,956 4,506 *Total equity plus debt. Annualized Adjusted ROCE (percent) 13% 5% 21% 16% 25% -7% Annualized GAAP ROCE (percent) 14% 1% 21% 17% 42% -6% *Total equity plus debt. Millions of Dollars 1H 2015
Non-GAAP Reconciliations 60 Adjusted Phillips 66 Phillips 66 Partners Phillips 66 Consolidated Total Debt 6,155 - 6,155 Total Equity 21,983 409 22,392 Debt-to-capital ratio 22% 22% Total Debt 8,666 18 8,684 Total Equity 21,622 415 22,037 Debt-to-capital ratio 29% 28% Total Debt 7,865 1,100 8,965 Total Equity 22,421 802 23,223 Debt-to-capital ratio 26% 28% 1H 2015 Millions of Dollars 2013 2014
Non-GAAP Reconciliations 61 Adjusted EBITDA forecasts were derived on an EBITDA-only basis. Accordingly, elements of net income including tax and depreciation information are not available. Together, these items generally result in a significant uplift in EBITDA over net income. 2018E Adjusted EBITDA/ EBITDA project backlog post 2018 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. PSXP Run Rate EBITDA PSXP 2014 and 2018 run rate EBITDA estimates were derived on an EBITDA-only basis. Accordingly, elements of net income including tax and depreciation information are not available. Together, these items generally result in a significant uplift in EBITDA over net income. Run rate EBITDA reflects annualized EBITDA projections of assets immediately upon acquisition.
Adjusted EBITDA and Distributable Cash Flow Reconciliation to Net Income 62 $ MM 2Q 2015 1Q 2015 4Q 2014 3Q 2014 2Q 2014 Net Income $ 42.0 $ 35.4 $ 36.3 $ 30.0 $ 30.9 Plus: Depreciation 5.3 5.1 4.5 4.2 3.9 Net interest expense 9.5 5.8 2.1 1.4 1.3 Amortization of deferred rentals 0.1 0.1 0.1 0.1 0.1 Provision for (benefit from) income taxes (0.1) 0.2 0.2 0.1 0.2 EBITDA 56.8 46.6 43.2 35.8 36.4 Distributions in excess of equity earnings 0.2 0.7 - - - Expenses indemnified or prefunded by Phillips 66 - 0.3 0.1 0.7 - Transaction costs associated with acquisitions - 1.4 1.0 0.2 - EBITDA attributable to predecessors - - (0.6) (0.8) 1.2 Adjusted EBITDA 57.0 49.0 43.7 35.9 37.6 Plus: Adjustments related to minimum volume commitments 2.2 1.1 (2.4) 1.4 (0.7) Phillip 66 prefunded maintenance capital expenditures - - 0.1 - 1.1 Less: Net interest 9.5 6.5 1.4 1.7 0.1 Income taxes paid 0.4 - - - 0.2 Maintenance capital expenditures 1.5 1.7 2.8 2.2 3.4 Distributable Cash Flow 47.8 41.9 37.2 33.4 34.3

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Investor Update September 2015

  • 1.
  • 2.
    This presentation containscertain 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 and natural gas prices, and petrochemical and refining 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 STATEMENTCautionary Statement 1
  • 3.
    Strategy 2 Operating Excellence Growth Returns Distributions High-Performing Organization Committed to safety,reliability and environmental stewardship while protecting shareholder value Reshaping our portfolio by capturing growth opportunities in Midstream and Chemicals Enhancing returns by maximizing earnings from existing assets and investing capital efficiently Committed to dividend growth, share repurchases and financial strength Building capability, pursuing excellence and doing the right thing
  • 4.
    Operating Excellence 3 Industry Average TotalRecordable Rates (Incidents per 200,000 Hours Worked) ’12 ’13 ’14 1H ’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 2.7 0.3 0.2 2012 2013 2014 1H 2015 Growth 430 317 300 154 2012 2013 2014 1H 2015 93% 93% 94% 87% 3% 3% 4% 9% 2012 2013 2014 1H 2015 Planned Maintenance & Turnarounds
  • 5.
    Global Energy Landscape 4 85 87 89 91 93 95 97 20102011 2012 2013 2014 2015E Global Oil Supply Global Oil DemandSource: International Energy Agency Global Oil Supply and Demand (MMBD) Abundant supply Demand exceeding expectations Energy efficiency increasing
  • 6.
    U.S. Energy Landscape 5 0 3 6 9 12 15 20102012 2014 2016 2018 Crude & Condensate NGL Source: EIA Annual Energy Outlook 2015 U.S. Liquids Production (MMBD) Production remains resilient Pace of infrastructure investment contingent on production growth Stronger fuels demand
  • 7.
    U.S. Downstream Advantage 6 0 5 10 15 20 EthaneCracker Margin, cpp Natural Gas, $/MMBtu Brent - WTI, $/bbl Current Historical U.S. Advantage Refiners and chemical manufacturers remain advantaged Low feedstock costs Low energy costs Scale and complexity MLP structure supports midstream investment See appendix for footnotes.
  • 8.
    Value of Integration 7 EV/EBITDAMultiples Creating value across downstream Accelerating growth Leveraging existing portfolio Allocating capital efficiently Expanding multiple See appendix for footnotes. 5.4x 6.7x 7.1x 14.5x Refining Peers PSX Chemicals Peers Midstream Peers
  • 9.
    Midcontinent Integrated Growth 8 Midstream $280 MMEBITDA growth Palermo rail terminal/Sacagawea pipeline (PSXP) Dakota Access/ETCO crude pipelines Refining, Marketing & Specialties $430 MM EBITDA growth 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 See appendix for footnotes.
  • 10.
    Western Gulf Creating aWorld-Class Energy Complex 9 Midstream $750 MM EBITDA growth Sweeny Fractionator One Freeport LPG export terminal Cross-channel connector (PSXP) Eagle Ford crude pipeline Sweeny Fractionator Two Refining, Marketing & Specialties $70 MM EBITDA growth Sweeny FCC yield improvement Marketing & Specialties Grow unbranded fuels volumes Focus on high-quality branded assets Increase high-margin exports See appendix for footnotes.
  • 11.
    Eastern Gulf Refining Logisticsand Midstream Growth 10 Midstream $200 MM EBITDA growth Beaumont terminal expansion: +7 MMBbls Bayou Bridge pipeline Alliance clean products dock Refining, Marketing & Specialties $150 MM EBITDA growth Lake Charles FCC yield improvement 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 See appendix for footnotes.
  • 12.
    West Coast Enhancing Returns Midstream $60MM EBITDA growth Completed Ferndale rail rack 4Q 2014 (PSXP) Los Angeles waterborne crude tank Santa Maria rail rack Refining, Marketing & Specialties $60 MM EBITDA growth San Francisco Hydrocracker debottleneck 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 11 See appendix for footnotes.
  • 13.
    Atlantic Basin Enhancing Returns Midstream $50MM EBITDA growth Completed Bayway rail rack 3Q 2014 (PSXP) Bayway LPG loading facility Refining, Marketing & Specialties $200 MM EBITDA growth Bayway FCC reactor modernization Yield improvements Marketing & Specialties Grow JET and COOP brands in Europe Increase unbranded volumes in the U.K. and U.S. Expand brand licensing in the U.S. 12 See appendix for footnotes.
  • 14.
    Midstream 13 DCP EBITDA excluded. Seeappendix for additional footnotes. 0.3 1.10.7 0.9 0.4 1.2 2.3 PSXP 2Q 2015 Run- Rate EBITDA PSX Operating Assets Projects Under Construction Planned 2018E EBITDA in PSXP EBITDA Remaining at PSX 2015 2016 2017 2018 Sweeny Midstream Hub Phase 1 Sweeny Midstream Hub Expansion Eagle Ford Crude Pipeline Beaumont Terminal Expansion Bayou Bridge Pipeline Bakken Expansion (PSXP) EBITDA ($B) More than $20 B backlog of projects
  • 15.
    PSXP Value toPSX 0 5 10 15 2013 2014 1H 2015 2018E Cumulative Dropdown Proceeds Cumulative Distributions Cumulative Cash from PSXP ($B) 0 5 10 15 2013 2014 2015E 2018E PSX Equity Value of PSXP Distributions ($B) Fee-based assets Growth opportunities Organic Drop downs Selective acquisitions Funds Midstream growth See appendix for footnotes. 14
  • 16.
    $550 MM 2015growth capital $500 MM EBITDA growth by 2018 Placing current projects into service in 2015 Keathley Canyon National Helium Plant expansion Zia II Plant and Gathering Lucerne 2 Plant and Gathering Sand Hills Laterals DJ Basin Grand Parkway Increasing fee-based earnings DCP Midstream 15 See appendix for footnotes. New plant G&P plant Proposed Pipeline
  • 17.
    Chemicals 16 Self-funded capital program $6.5– 7 B growth spending 36% U.S. O&P capacity growth 0 100 200 300 400 500 600 700 800 900 0 15 30 45 60 75 M.E. Ethane N.A. Ethane N.A. LPG M.E. LPG/Naphtha W. Europe Naphtha N.A. Naphtha W. Europe LPG Asia NaphthaAsia LPG Cumulative Capacity MM Tons June 2015 YTD Average Ethylene Production Cost Curve ($/ton) Petrochemical demand driven by global GDP growth Cost-advantaged feedstocks High capacity utilization supports strong margins Rest of World China Coal CPChem Asia Import price ~$1,200/ton Source: Wood MacKenzie
  • 18.
    CPChem Projects Update 17 $1.5B EBITDA growth by 2018 Completed 1-hexene project and 10th Sweeny furnace in 2014 NAO expansion 100 kMTA at Cedar Bayou, TX Completed 2Q 2015 USGC Petrochemicals 1,500 kMTA (ethylene) at Cedar Bayou, TX 1,000 kMTA (polyethylene) at Old Ocean, TX Planned start-up mid-2017 New cracker under consideration See appendix for footnotes.
  • 19.
    Refining Enhancing Returns 18 11% 12%15% 2009 - 2014 Avg Constant Margin Improvements 2015E Adjusted Constant Margin Future Improvements 2018E Return on Capital Employed (ROCE) Significant free cash flow generation High-return projects creating sustainable earnings increases EBITDA growth: $850 MM Increasing ROCE 4% by 2018 Expansive footprint provides leverage for Midstream growth 2.5 1.6 0.9 CFO Sustaining Capex FCF 2009 – 2014 Average Annual Free Cash Flow ($B) See appendix for footnotes.
  • 20.
    Marketing & Specialties High-returningbusinesses 19 $250 MM EBITDA growth by 2018 25% ROCE U.S. Marketing Wholesale model Enhancing fuels brands Volume growth International Marketing Retail / wholesale model Adding 100+ sites Specialties Grow Lubricants earnings and international portfolio See appendix for footnotes.
  • 21.
    3.7 2.7 6.61.0 1.5 2.4 CFO Sustaining Capex FCF PSXGrowth Est. PSXP Contributions 2018E Available Cash Flow Phillips 66 Available Cash Flow 20 Annual Available Cash Flow ($B) Diversified cash generation Funding transformational growth Growing distributions Financial flexibility Strong free cash flow yield 2009 – 2014 AverageSee appendix for footnotes.
  • 22.
    Capital Allocation 21 Ensuring financialflexibility Investment grade credit rating Strong balance sheet Funding growth Cash from operations PSXP proceeds Returning capital to shareholders Dividend growth Ongoing share repurchases Distributions Reinvestment 2014 – 2016E
  • 23.
    Capital Budget 22 $2 -3 B Growth capital Legacy, scalable Midstream assets Fee-based assets suitable for PSXP dropdown Quick payout Refining projects $1 B Sustaining capital Maintaining safe, reliable assets
  • 24.
    Dividend Growth (Quarterly ¢/share) Distributions 624MM 590 MM 538 MM $7.0 B 20 56 Share Count and Capital Returned 3Q2012 4Q2013 2Q2015 23 3Q2012 4Q2013 2Q2015 See appendix for footnotes.
  • 25.
    6.4 9.3 2009 - 2014 avg Midstream Growth Chemicals Growth Refining Returns M&S Growth 2018E RefiningMidstream Chemicals M&S Delivering Value 24 Adjusted Constant Margin EBITDA ($B) 45% EBITDA growth Growing Midstream and Chemicals Enhancing returns in Refining Realizing benefits of reinvestment See appendix for footnotes.
  • 26.
    Compelling Investment 25 Shareholder returns Uniqueportfolio EBITDA growth Disciplined capital allocation Multiple expansion -20% 20% 60% 100% 140% 180% May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 PSX +158% S&P 100 +44%
  • 27.
    Institutional Investors Contact KevinMitchell Vice President, Investor Relations C.W. Mallon Manager, Investor Relations InvestorRelations@p66.com 832-765-2297
  • 28.
    Investor Update September 2015 NYSE:PSXP www.phillips66partners.com
  • 29.
    Cautionary Statement 28 This presentationcontains forward-looking statements as defined under the federal securities laws, including projections, plans and objectives. Although Phillips 66 Partners believes that expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to be correct. In addition, these statements are subject to certain risks, uncertainties and other assumptions that are difficult to predict and may be beyond Phillips 66 Partners’ control. If one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect, actual results may vary materially from what Phillips 66 Partners anticipated, estimated, projected or expected. The key risk factors that may have a direct bearing on the forward-looking statements in the presentation are the accuracy of our assumptions used to estimate the benefits to be realized from Phillips 66 Partners’ acquisition of interests in certain joint ventures that own or control midstream pipeline assets (the “acquisition”), our ability to successfully integrate the assets into our operations, the decisions made by Explorer Pipeline Company, DCP Sand Hills Pipeline, LLC, and DCP Southern Hills Pipeline, LLC regarding distributions these entities make to us as an equity owner, and other factors as described in the filings that Phillips 66 Partners makes with the Securities and Exchange Commission. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than as described. All forward-looking statements in this presentation are made as of the date hereof and Phillips 66 Partners undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This presentation is not, and under no circumstance is to be construed to be, a prospectus, offering memorandum, or advertisement and is not an offer to sell securities. The SEC and state securities regulators have not reviewed or determined if this presentation is truthful or complete. Non-GAAP Financial Measure Disclosure Today’s presentation includes certain non-GAAP financial measures as defined under Regulation G of the Securities Exchange Act of 1934, as amended. A reconciliation of those measures to the most directly comparable GAAP measures is available in the appendix to this presentation.
  • 30.
    Phillips 66 PartnersOwnership Structure 29 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
  • 31.
    Phillips 66 Partners 30 Strongalignment with Phillips 66 Highly integrated assets Stable and predictable cash flows Significant growth potential Financial flexibility Pecan Grove Marine Dock
  • 32.
    Phillips 66 PartnersFinancial Highlights 31 Distributable cash flow Adjusted EBITDA Acquired interest in three pipeline assets in Q1 2015 $47.8 MM $57.0 MM 0.2125 0.2248 0.2743 0.3017 0.3168 0.34 0.37 0.40 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 * (MQD) Coverage Ratio 1.13x 1.10x 1.10x 1.44x 1.32x 1.28x 1.14x 1.15x Distribution / LP Unit ($) * Represents the minimum quarterly distribution for 3Q 2013, actual distribution of $0.1548 equal to MQD prorated See appendix for footnotes. 2Q 2015
  • 33.
    Q1 2015 Acquisition 32 Dropdown 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
  • 34.
    33 $275 MM InAnnounced Organic Growth Cross-Channel Connector Pipeline Eagle Ford Crude Gathering System Bakken Joint Ventures • Capital cost: $22 MM • Increases access to export docks for shippers in Houston Ship Channel • Expected completion in 4Q 2015 • Capital cost: $50 MM • Connects Eagle Ford crude oil production to third-party pipelines • Initial operations commenced January 2015; expected completion in 3Q 2015 • Capital cost: $160 MM (PSXP share) • 100 MBD Palermo crude oil rail-loading facility, 76-mile Sacagawea Pipeline and central delivery facility for gathering systems • Provides increased logistics options for shippers in the Bakken region • Expected terminal completion in 4Q 2015; pipeline completion in 2016 Sand Hills Pipeline • Capital cost: ~ $45 MM (PSXP share) • Adding lateral connections and increasing pumping capacity beyond 200 MBD See appendix for footnotes.
  • 35.
    34 Highly Integrated Assets PalermoRail Terminal expected to be operational Q4 2015.
  • 36.
    35 Fee-based, Long-term contractsprovide stability Asset Initial Term (years) Maximum Term with Options (years) Clifton Ridge to Lake Charles 10 20 Sweeny to Pasadena 10 20 Hartford Connector 23 * 23 Gold Line 10 15 Sand Hills 15 15 Southern Hills 15 15 Explorer Various Various Clifton Ridge terminal 5 20 Clifton Ridge / Pecan grove docks 5 20 Pasadena terminal 5 20 Pasadena and Hartford truck racks 5 20 Gold Line terminals 5 15 Medford Spheres 10 20 Bayway Rail Rack 10 20 Ferndale Rail Rack 10 20 * Includes PSX JV Wood River Refinery to Hartford and Hartford to Explorer pipelines. The term of the Hartford Connector throughput and deficiency agreement began in January 2008 PipelinesTerminals/Storage
  • 37.
    Adjusted EBITDA andDCF 36 34.3 33.4 37.2 41.9 47.8 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Distributable Cash Flow ($MM) 37.6 35.9 43.7 49.0 57.0 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Adjusted EBITDA ($MM)
  • 38.
    Balanced Debt MaturityProfile 37 2020 2025 2045 5-year notes 2.646% coupon 10-year notes 3.605% coupon 30-year notes 4.68% coupon $1.1 B debt issuance February 2015 5-Year $300 MM notes 10-Year $500 MM notes 30-Year $300 MM notes Average cost of 3.64% BBB (stable) / Baa3 (stable) $300MM $500MM $300MM
  • 39.
    Financial Flexibility 38 Investment gradecredit rating Target 3.5x debt / EBITDA 30% distribution CAGR through 2018 Target 1.1x annual coverage ratio Support Phillips 66 Midstream growth
  • 40.
    Closed 1st acquisition - $700MM Closed 2nd acquisition - $340 MM -30% -10% 10% 30% 50% 70% 90% 110% 130% 150% 170% 190% 210% 230% 250% 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 39 Total Return Since IPO PSXP 172% Alerian MLP Index -10% IPO Closed 3rd acquisition - $1.1 B Source: Bloomberg
  • 41.
    Institutional Investors Contact KevinMitchell - Investor Relations Kevin.Mitchell@p66.com 832-765-2297 C.W. Mallon - Investor Relations C.W.Mallon@p66.com 832-765-2297
  • 42.
  • 43.
    Segment Strategy 42 Refining: Enhance Returns Midstream:Growth Chemicals: Growth Marketing and Specialties: Selective Growth Execute Sweeny hub Grow integrated Transportation system PSXP as a funding vehicle Expand DCP G&P Pursue organic and M&A opportunities Grow CPChem organically Advance olefins and polyolefins projects Capitalize on domestic feedstock advantage Leverage proprietary technology Optimize crude slate Expand export capability Increase yields Maintain cost discipline Enhance portfolio Expand European retail marketing Grow lubricants Ensure domestic refinery pull-through
  • 44.
    Free Cash Flow 2013– 1H 2015 Average 43 0.9 1.3 0.7 0.3 CFO & Drop Proceeds Sustaining Capex Available Cash Flow 1.2 1.0 0.2 CFO Sustaining Capex FCF Midstream ($B) Chemicals ($B) CFO excludes working capital. Average from 2013 – 1H 2015 DCP Midstream, CPChem and WRB free cash flow calculated at the enterprise level 2.7 1.8 0.9 CFO Sustaining Capex FCF 1.0 0.9 0.1 CFO Sustaining Capex FCF Refining ($B) Marketing & Specialties ($B) PSXP Drop Proceeds
  • 45.
    25% 21% 16% 5% M&S Chemicals Refining Midstream -10% 0% 10% 20% 30% 40% Average Capital Employed($B) Corporate -7% 1H 2015 Adjusted ROCE 44 P66 Total 13% 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32
  • 46.
    22.0 21.6 22.4 6.2 8.77.9 5.0 5.2 5.0 22% 29% 26% 2013 2014 1H 2015 Equity $B Debt $B Cash & Cash Equivalents $B Debt to Capital Capital Structure 45 20- 30% Excludes PSXP.
  • 47.
    2015 Sensitivities –Phillips 66 46 Sensitivities shown above are independent and are only valid within a limited price range. Annual Net Income $MM Midstream - DCP (net to Phillips 66) 10¢/Gal Increase in NGL price 30 $1/MMBtu Increase in Natural Gas price 25 $10/BBL Increase in WTI price 15 Chemicals - CPChem (net to Phillips 66) 1¢/Lb Increase in Chain Margin (Ethylene, Polyethylene, NAO) 35 Worldwide Refining $1/BBL Increase in Gasoline Margin 220 $1/BBL Increase in Distillate Margin 200 $1/BBL Widening LLS / Maya Differential (LLS less Maya) 50 $1/BBL Widening WTI / WCS Differential (WTI less WCS) 40 $1/BBL Widening WTI / WTS Differential (WTI less WTS) 15 $1/BBL Widening LLS / 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:
  • 48.
    Phillips 66 CapitalProgram 47 Sustaining Growth Total Capital Expenditures and Investments Consolidated Midstream(1) Transportation 148 1,084 1,232 NGL 19 1,912 1,931 167 2,996 3,163 Chemicals - - - Refining(2) 813 299 1,112 Marketing and Specialties 78 92 170 Corporate(2) 155 - 155 1,213 3,387 4,600 Selected Equity Affiliates DCP 125 275 400 CPChem 187 1,266 1,453 WRB 150 53 203 462 1,594 2,056 Capital Program(3) Midstream Transportation 148 1,084 1,232 DCP 125 275 400 NGL 19 1,912 1,931 292 3,271 3,563 Chemicals 187 1,266 1,453 Refining 963 352 1,315 Marketing and Specialties 78 92 170 Corporate 155 - 155 1,675 4,981 6,656 (1) Includes 100% of Phillips 66 Partners Millions of Dollars 2015 Budget (2) Includes non-cash capitalized leases of $11 million in Refining and $21 million in Corporate and Other (3) Includes Phillips 66's share of capital spending by DCP, CPChem and WRB, which are expected to be self- funded.
  • 49.
    Footnotes 48 Slide 4 Injury statisticsdo not include major projects. Industry Averages are from: Phillips 66 – American Fuel & Petrochemical Manufacturers (AFPM) refining data, CPChem – American Chemistry Council (ACC), DCP – Gas Processors Association (GPA). Growth component of operating costs is estimated based on forecasted growth spending. Slide 7 Current based on last 4 quarters: 3Q 2014 – 2Q 2015 average History based on 2000 – 2013 average Ethane Cracker Margin: Advantage is N.A. ethane margin (Spot) less N.E. Asia naphtha margin (Spot) (source: I.H.S.) Natural Gas: Advantage calculated as average of ICE NBP gas and Japan natural gas LNG import price less Henry Hub (source: Morningstar) Brent – WTI: Brent Dated less WTI at Cushing (source: Morningstar)
  • 50.
    Footnotes 49 Slide 8 Average ofcompany EV (daily EV 1/1/2015 – 8/31/2015) and 2016 consensus EBITDA as of 8/31/2015. Refining Peers is average of: DK, HFC, MPC, PBF, TSO, VLO, WNR Chemicals Peers is average of: CE, DOW, EMN, HUN, LYB, WLK Midstream Peers is average of: EPD, ETE, OKE, TRGP Source: Bloomberg Slides 9 – 13 EBITDA growth is 2018 estimated run-rate EBITDA of projects completed second-half 2014 or later. Slide 14 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 second-half 2014 or later. PSXP EBITDA includes EBITDA attributable to Phillips 66 noncontrolling interests.
  • 51.
    Footnotes 50 Slide 15 PSXP isa consolidated subsidiary of PSX. Accordingly, quarterly cash distributions paid from PSXP to PSX, and consideration paid by PSXP to PSX in a dropdown transaction, both eliminate in consolidation and do not impact PSX’s consolidated cash balance, except to the extent PSXP funds consideration for a dropdown transaction with public debt and equity offerings. PSXP equity value based on LP distributions multiple of 20x and GP distributions multiple of 30x. Slide 16 Amounts presented are on a DCP Midstream 100% basis, and include DPM (100%). EBITDA growth is 2018 estimated run-rate EBITDA of projects completed since 2014 based on normalized price and volume assumptions. Slide 18 EBITDA growth is 2018 estimated run-rate EBITDA of the following projects: 1-hexene, 10th Sweeny furnace, NAO expansion project and USGC petrochemical project. $1.5 B estimated incremental EBITDA based on 2012 industry margins.
  • 52.
    Footnotes 51 Slide 19 EBITDA growthis 2018 estimated run-rate EBITDA of projects completed second-half 2014 or later. CFO excludes working capital. WRB free cash flow calculated at the enterprise level. 2015E ROCE includes project and operational improvements since 2014 on a constant margin basis. Future improvements include estimated run-rate improvement of projects completed by 2018. Slide 20 EBITDA growth is 2018 estimated run-rate EBITDA of projects completed second-half 2014 or later. ROCE is 1H 2015 annualized. Slide 21 CFO excludes working capital. Available Cash Flow growth is 2018 estimated run-rate Free Cash Flow of projects completed primarily second-half 2014 or later. Assumes joint ventures distribute 100% of growth EBITDA. PSXP contributions to PSX include distributions and PSXP funding for organic growth capital and drop- downs. See footnotes to slide 15 for an explanation of the impact of PSXP drop proceeds on Phillips 66’s consolidated cash balance.
  • 53.
    Footnotes 52 Slide 24 Capital returnedincludes the 2014 PSPI share exchange and excludes dividend payments. Slide 25 Corporate not included in bars on chart, but included in totals. Midstream EBITDA excludes EBITDA attributable to Phillips 66 noncontrolling interests. EBITDA growth is 2018 estimated run-rate EBITDA of projects completed primarily second-half 2014 or later. Slide 26 Chart reflects total shareholder return May 1, 2012 to August 31, 2015. Dividends assumed to be reinvested in stock on payment date.
  • 54.
    Non-GAAP Reconciliations 53 Forecasted AvailableCash Flow Forecasted available cash flow estimates were primarily derived on a forecasted EBITDA basis, with adjustments for estimated interest and tax payments and sustaining capital expenditures. Accordingly, all the elements required for forecasted cash from operations are not available. Generally, the timing of working capital impacts would be the primary difference between forecasted available cash flow and forecasted cash from operations. Forecasted EBITDA estimates were primarily derived on an EBITDA-only basis (revenue and cost projections). Accordingly, all the elements required for forecasted net income, including income taxes, interest expense, and depreciation and amortization, are not available. Together, these items generally result in a significant uplift in EBITDA over net income. Run rate EBITDA reflects annualized forecasted EBITDA estimates of assets immediately upon completion/acquisition. Forecasted EBITDA
  • 55.
    Non-GAAP Reconciliations 54 Millions ofDollars Average 2009-2014 Refining Free Cash Flow Numerator Cash From Operations GAAP 2,615$ Less: Change in Non-Cash Working Cap. 152 Cash From Operations (excluding WC) 2,463 Less: P66 Equity affiliate cash from ops 584 Add: Equity look through cash from ops 573 Adjusted FCF (excl WC) 2,452$ Total Capex GAAP 1,038$ Less: Growth Capex 287 Sustaining Capex 751 Less: P66 Equity affiliate sustaining capex - Add: Equity look through sustaining capex 134 Adjusted Sustaining Capex 885$ Free Cash Flow 1,567$
  • 56.
    Non-GAAP Reconciliations 55 Refining Marketing & Specialties ROCE Numerator NetIncome 1,127 727 After-tax interest expense 0 0 GAAP ROCE earnings 1,127 727 Special Items 344 (34) Adjusted ROCE earnings 1,471 693 Denominator GAAP average capital employed* 13,377 2,743 Discontinued Operations - - Adjusted average capital employed* 13,377 2,743 Average Adjusted ROCE (percent) 11% 25% Average GAAP ROCE (percent) 8% 27% *2014 Total equity plus debt. Average 2009-2014 Millions of Dollars
  • 57.
    Non-GAAP Reconciliations 56 Millions ofDollars Average 2009-2014 Phillips 66 Free Cash Flow Numerator Cash From Operations GAAP 3,650$ Less: Change in Non-Cash Working Cap. (128) Cash From Operations (excluding WC) 3,737$ Total Capex GAAP 3,773$ Less: Growth Capex 2,788 Sustaining Capex 985$ Free Cash Flow* 2,752$ * Not adjusted for equity affiliates.
  • 58.
    Non-GAAP Reconciliations 57 Midstream ChemicalsRefining Marketing & Specialties Corporate Phillips 66 Adjusted EBITDA by Segment Reconciliation Net income attributable to Phillips 66 657$ 729 1,127 727 (292) 3,100 Less: Income from discontinued operations - - - - 151 Plus: Net income attributable to noncontrolling interests 12 - - - 12 Provision for income taxes 241 292 687 409 (176) 1,452 Net interest expense - - (1) (19) 126 106 Depreciation and amortization 86 - 668 128 34 916 EBITDA 996$ 1,021 2,481 1,245 (308) 5,434 Adjustments (pretax): EBITDA attributable to Phillips 66 noncontrolling interests (17) - - - - (17) Proportional share of selected equity affiliates income taxes 3 76 2 - - 81 Proportional share of selected equity affiliates net interest 108 20 (119) - - 9 Proportional share of selected equity affiliates depreciation and amortization166 215 208 - - 589 Gain on asset dispositions (308) - (16) (78) - (401) Gain on share issuance by equity affiliate (23) - - - - (23) Impairments 100 22 456 12 4 594 Cancelled projects - - 25 - - 25 Severence accruals - - 9 - - 9 Exit of a business line - - - 9 - 9 Pending Claims and settlements (6) - 16 (11) - (1) Premium on early debt retirement - 24 - - - 24 Repositioning Costs - - - - 14 14 Hurricane-related costs - - 9 - - 9 Tax law impacts - - (4) (1) - (5) Lower-of-cost-or-market inventory adjustments - 1 7 - - 8 Adjusted EBITDA* 1,021$ 1,377 3,074 1,176 (289) 6,359 * Proportional share of selected equity affiliates is net of noncontrolling interests. Millions of Dollars Average 2009 - 2014
  • 59.
    Non-GAAP Reconciliations 58 Midstream ChemicalsRefining Marketing & Specialties FCF Yield Numerator Cash From Operations GAAP 750$ 597 2,557 1,177 Less: Change in Non-Cash Working Cap. 12 - (330) 168 Cash From Operations (excluding WC) 738 597 2,887 1,009 Less: P66 Equity affiliate cash from ops 200 597 749 - Add: Equity look through cash from ops 372 1,170 564 - Adjusted FCF (excl WC) 910$ 1,170 2,702 1,009 Total Capex GAAP 869 - 415 176 Less: Growth Capex 728 - (343) 120 Sustaining Capex 142 - 758 56 Less: P66 Equity affiliate sustaining capex - - - - Add: Equity look through sustaining capex 133 200 109 - Adjusted Sustaining Capex 275$ 200 867 56 Free Cash Flow 635$ 970 1,835 952 Millions of Dollars Average 2013-1H 2015
  • 60.
    Non-GAAP Reconciliations 59 Phillips 66Midstream Chemicals Refining Marketing & Specialties Corporate ROCE Numerator Net Income 2,022$ 16 498 1,142 618 (252) After-tax interest expense 107 - - - - 107 GAAP ROCE earnings 2,129 16 498 1,142 618 (145) Special Items (162) 126 0 (43) (242) (4) Adjusted ROCE earnings 1,967$ 142 498 1,099 377 (149) Denominator GAAP average capital employed* 31,454$ 5,691 4,803 13,498 2,956 4,506 Discontinued Operations - - - - - - Adjusted average capital employed* 31,454$ 5,691 4,803 13,498 2,956 4,506 *Total equity plus debt. Annualized Adjusted ROCE (percent) 13% 5% 21% 16% 25% -7% Annualized GAAP ROCE (percent) 14% 1% 21% 17% 42% -6% *Total equity plus debt. Millions of Dollars 1H 2015
  • 61.
    Non-GAAP Reconciliations 60 Adjusted Phillips 66 Phillips66 Partners Phillips 66 Consolidated Total Debt 6,155 - 6,155 Total Equity 21,983 409 22,392 Debt-to-capital ratio 22% 22% Total Debt 8,666 18 8,684 Total Equity 21,622 415 22,037 Debt-to-capital ratio 29% 28% Total Debt 7,865 1,100 8,965 Total Equity 22,421 802 23,223 Debt-to-capital ratio 26% 28% 1H 2015 Millions of Dollars 2013 2014
  • 62.
    Non-GAAP Reconciliations 61 Adjusted EBITDAforecasts were derived on an EBITDA-only basis. Accordingly, elements of net income including tax and depreciation information are not available. Together, these items generally result in a significant uplift in EBITDA over net income. 2018E Adjusted EBITDA/ EBITDA project backlog post 2018 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. PSXP Run Rate EBITDA PSXP 2014 and 2018 run rate EBITDA estimates were derived on an EBITDA-only basis. Accordingly, elements of net income including tax and depreciation information are not available. Together, these items generally result in a significant uplift in EBITDA over net income. Run rate EBITDA reflects annualized EBITDA projections of assets immediately upon acquisition.
  • 63.
    Adjusted EBITDA andDistributable Cash Flow Reconciliation to Net Income 62 $ MM 2Q 2015 1Q 2015 4Q 2014 3Q 2014 2Q 2014 Net Income $ 42.0 $ 35.4 $ 36.3 $ 30.0 $ 30.9 Plus: Depreciation 5.3 5.1 4.5 4.2 3.9 Net interest expense 9.5 5.8 2.1 1.4 1.3 Amortization of deferred rentals 0.1 0.1 0.1 0.1 0.1 Provision for (benefit from) income taxes (0.1) 0.2 0.2 0.1 0.2 EBITDA 56.8 46.6 43.2 35.8 36.4 Distributions in excess of equity earnings 0.2 0.7 - - - Expenses indemnified or prefunded by Phillips 66 - 0.3 0.1 0.7 - Transaction costs associated with acquisitions - 1.4 1.0 0.2 - EBITDA attributable to predecessors - - (0.6) (0.8) 1.2 Adjusted EBITDA 57.0 49.0 43.7 35.9 37.6 Plus: Adjustments related to minimum volume commitments 2.2 1.1 (2.4) 1.4 (0.7) Phillip 66 prefunded maintenance capital expenditures - - 0.1 - 1.1 Less: Net interest 9.5 6.5 1.4 1.7 0.1 Income taxes paid 0.4 - - - 0.2 Maintenance capital expenditures 1.5 1.7 2.8 2.2 3.4 Distributable Cash Flow 47.8 41.9 37.2 33.4 34.3