Phillips 66 first Quarter Conference...

PHILLIPS 66 THIRD QUARTER 2017 CONFERENCE CALL October 27, 2017

This presentation contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and

Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Words and

phrases such as “is anticipated,” “is estimated,” “is expected,” “is planned,” “is scheduled,” “is targeted,” “believes,” “intends,” “objectives,” “projects,”

“strategies” and similar expressions are used to identify such forward-looking statements. However, the absence of these words does not mean that a

statement is not forward-looking. Forward-looking statements relating to Phillips 66’s operations (including joint venture operations) are based on

management’s expectations, estimates and projections about the company, its interests and the energy industry in general on the date this

presentation was prepared. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that

are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking

statements. Factors that could cause actual results or events to differ materially from those described in the forward-looking statements include

fluctuations in NGL, crude oil, petroleum products and natural gas prices, and refining, marketing and petrochemical margins; unexpected changes in

costs for constructing, modifying or operating our facilities; unexpected difficulties in manufacturing, refining or transporting our products; lack of, or

disruptions in, adequate and reliable transportation for our NGL, crude oil, natural gas and refined products; potential liability from litigation or for

remedial actions, including removal and reclamation obligations, under environmental regulations; limited access to capital or significantly higher cost

of capital related to illiquidity or uncertainty in the domestic or international financial markets; and other economic, business, competitive and/or

regulatory factors affecting Phillips 66’s businesses generally as set forth in our filings with the Securities and Exchange Commission. Phillips 66 is

under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new

information, future events or otherwise.

This presentation includes non-GAAP financial measures. You can find the reconciliations to comparable GAAP financial measures at the end of the

presentation materials or in the “Investors” section of our website.

CAUTIONARY STATEMENT

2

3

EXECUTING THE STRATEGY

CPChem Polyethylene Units, Old Ocean, TX

4

OVERVIEW 3Q 2017

Adjusted earnings $858 MM

Adjusted EPS $1.66

Operating cash flow excluding working capital $596 MM

Capital expenditures and investments $367 MM

Shareholder distributions1 $817 MM

(1) Shareholder distributions include dividends and share repurchases

Net-debt-to-capital ratio 27%

Annualized adjusted YTD ROCE 8%

569

858

3

(43)

315

(7)

21

2Q 2017 Midstream Chemicals Refining Marketing

& Specialties

Corporate

& Other

3Q 2017

3Q 2017

$MM

67 (121) 548 153 211

ADJUSTED EARNINGS 3Q 2017

5

64 67

24

(14)

(12)

5

2Q 2017

Adjusted

Earnings

Transportation NGL DCP

Midstream

Noncontrolling

Interests

3Q 2017

Adjusted

Earnings

MIDSTREAM 3Q 2017

98 0 1

3Q 2017 Adjusted Net Income

6

$MM

First full quarter of Bakken

Pipeline commercial operations

NGL business impacted by

Hurricane Harvey

DCP impacted by hedge positions

in a rising price market

6

(32)

196 153

(42)

1

(2)

2Q 2017

Adjusted

Earnings

Olefins &

Polyolefins

Specialties,

Aromatics &

Styrenics

Other 3Q 2017

Adjusted

Earnings

CHEMICALS 3Q 2017

137 22 (6)

3Q 2017 Adjusted Earnings

7

$MM 83% O&P capacity utilization

Significant Hurricane Harvey

impact at Cedar Bayou

USGC Petrochemicals Project

started polyethylene operations

7

233

548

63 21

169

62

2Q 2017

Adjusted

Earnings

Atlantic

Basin /

Europe

Gulf Coast Central

Corridor

West Coast 3Q 2017

Adjusted

Earnings

$MM

REFINING 3Q 2017

8

172 198 77 101


98% crude utilization

85% clean product yield

$10.49/BBL realized margin

$43 MM pre-tax turnaround costs

18.19

10.49

(3.02)

(2.10)

0.62

(3.20)

Market

3:2:1

Configuration Secondary

Products

Feedstock Other Realized

Margin

WORLDWIDE REFINING $/BBL

REFINING MARGINS – MARKET VS. REALIZED 3Q 2017

9

Avg Market Crude: $51.04/BBL 58% Market Capture

218 211

(22)

15

2Q 2017

Adjusted

Earnings

Marketing

& Other

Specialties 3Q 2017

Adjusted

Earnings

MARKETING AND SPECIALTIES 3Q 2017

163 48


10

Lower Marketing margins

Volume uplift at re-imaged sites

Strong margins and higher

volumes at Excel Paralubes

$MM

(142)(121)

(2)

23

2Q 2017

Adjusted

Net Loss

Net Interest

Expense

Corporate

Overhead

& Other

3Q 2017

Adjusted

Net Loss

$MM

CORPORATE AND OTHER 3Q 2017

11

2.7

1.5

(1.3)

0.6

2.6

(0.9)

(2.2)

December 31,

2016Cash

Balance*

CFO

(excludingWorking

Capital)

Working

Capital

Capital

Expenditures& Investments

Shareholder

Distributions

Other September 30,

2017Cash

Balance*

$B

CASH FLOW YTD 2017

12 * Includes cash and cash equivalents.

Global Olefins & Polyolefins utilization High-70%

Refining crude utilization Mid-90%

Corporate & Other costs (after-tax) $125 MM - $140 MM

Refining turnaround expenses (pre-tax) $100 MM - $130 MM

13

OUTLOOK 4Q 2017

PHILLIPS 66 THIRD QUARTER 2017 CONFERENCE CALL

Questions and Answers

PHILLIPS 66 THIRD QUARTER 2017 CONFERENCE CALL

Appendix

ESTIMATED SENSITIVITIES 2017

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

Midstream - DCP (net to Phillips 66)

10¢/Gal Increase in NGL price 5

10¢/MMBtu Increase in Natural Gas price 1

$1/BBL Increase in WTI price 1

Chemicals - CPChem (net to Phillips 66)

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

Worldwide Refining

$1/BBL Increase in Gasoline Margin 215

$1/BBL Increase in Distillate Margin 190

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

$1/BBL Widening LLS / Maya Differential (LLS less Maya) 35

$1/BBL Widening LLS / Medium Sour Differential (LLS less Medium Sour) 20

$1/BBL Widening WTI / WTS Differential (WTI less WTS) 10

$1/BBL Widening LLS / WTI Differential (LLS less WTI) 10

$1/BBL Widening ANS / Medium Sour Differential (ANS less Medium Sour) 10

$1/BBL Widening ANS / WCS Differential (ANS less WCS) 5

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

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

Annual Net Income $MM

22. 0 23. 9 23. 7 23. 7 23. 8 24. 0

21. 6

23. 1 22. 4 22. 4 22. 4 22. 6

8. 6 8. 9

10. 1 10. 2 10. 0 10. 2 8. 6 7. 8 7. 7 7. 9 7. 7 7. 9

5.2 3.1 2.7 1.5 2.2 1.5

5.2 3.0 2.7

1.5 2.2 1.5

28%27%

30% 30% 30% 30%28%

25% 26% 26% 26% 26%

13%

20%

24%

27%

25%

27%

14%

17%18%

22%

20%

22%

2014 2015 2016 1Q

2017

2Q

2017

3Q

2017

2014 2015 2016 1Q

2017

2Q

2017

3Q

2017

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

CAPITAL STRUCTURE 2014 – 2017

17

Consolidated PSX Excluding PSXP

18.50

10.02

(3.07)(0.86)

(1.94)

(2.61)

Market

3:2:1


Products


Margin

ATLANTIC BASIN / EUROPE $/BBL


18

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

Brent: $52.08/BBL 103% Crude Capacity Utilization 54% Market Capture

15.42

7.26

(3.26)

(2.45)

1.73

(4.18)

Market

3:2:1


Products


Margin

GULF COAST $/BBL


19

Market 3:2:1 – LLS / Gasoline 85 CBOB / Diesel 62 10ppm

LLS: $51.65/BBL 93% Crude Capacity Utilization 47% Market Capture

20.20

14.04

(2.34)

(2.56)

1.72

(2.98)

Market

3:2:1


Products


Margin

CENTRAL CORRIDOR $/BBL


20

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

WTI: $48.16/BBL 97% Crude Capacity Utilization 69% Market Capture

20.70

12.95

(3.03)

(2.76)

1.01

(2.97)

Market

3:2:1


Products


Margin

WEST COAST $/BBL


21

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

ANS: $52.20/BBL 102% Crude Capacity Utilization 63% Market Capture

556

858

(8)(37)

414

(56) (11)

3Q 2016 Midstream Chemicals Refining Marketing

& Specialties

Corporate

& Other

3Q 2017

3Q 2017

$MM

ADJUSTED EARNINGS 3Q 2017 VS. 3Q 2016

22

67 (121) 548 153 211

75 67

19

(15)

(8)(4)

3Q 2016

Adjusted

Earnings

Transportation NGL DCP

Midstream

Noncontrolling

Interests

3Q 2017

Adjusted

Earnings

$MM

MIDSTREAM 3Q 2017 VS. 3Q 2016

23

98 0 1

3Q 2017 Adjusted Net Income

(32)

190

153

(28)(9)

0

3Q 2016

Adjusted

Earnings

Olefins &

Polyolefins

Specialties,

Aromatics &

Styrenics

Other 3Q 2017

Adjusted

Earnings

$MM

CHEMICALS 3Q 2017 VS. 3Q 2016

24

137 (6) 22


134

548 167

90

56

101

3Q 2016

Adjusted

Earnings

Atlantic

Basin /

Europe

Gulf

Coast

Central

Corridor

West Coast 3Q 2017

Adjusted

Earnings

$MM

REFINING 3Q 2017 VS. 3Q 2016

25

172 198 77 101


267

211

(65)

9

3Q 2016

Adjusted

Earnings

Marketing

& Other

Specialties 3Q 2017

Adjusted

Earnings

$MM

MARKETING AND SPECIALTIES 3Q 2017 VS. 3Q 2016

26

163 48


(110) (121)

(19)

8

3Q 2016

Adjusted

Net Loss

Net Interest

Expense

Corporate

Overhead

& Other

3Q 2017

Adjusted

Net Loss

$MM

CORPORATE AND OTHER 3Q 2017 VS. 3Q 2016

27

28

NON-GAAP RECONCILIATIONS

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

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

income tax, transactions related to entities for which we have made an assertion that the undistributed earnings are permanently reinvested, or transactions occurring in jurisdictions with a valuation

allowance.

** Weighted-average diluted shares outstanding and income allocated to participating securities, if applicable, in the adjusted earnings per share calculation are the same as those used in the GAAP diluted

earnings per share calculation.

2017

Sep YTD 3Q 2Q Sep YTD 3Q

Phillips 66

Net Income (Loss) Attributable to Phillips 66 1,908$ 823$ 550$ 1,392$ 511$

Pre-tax Adjustments:

Pending claims and settlements (60) (36) (24) (117) (72)

Pension settlement expense 76 21 55

Impairments by equity affiliates 33 95 89

Recognition of deferred logistics commitments 30 -

Gain on consolidation of business (423)

Hurricane-related costs 70 70 - - -

Tax impact of adjustments * 117 (20) (12) 31 28

Other tax impacts - - - (16) -

Adjusted Net Income (Loss) Attributable to Phillips 66 1,721$ 858$ 569$ 1,415$ 556$

Net Income (Loss) Attributable to Phillips 66 Per Share of Common Stock (dollars) ** 3.66$ 1.60$ 1.06$ 2.61$ 0.96$

Adjusted Net Income (Loss) Attributable to Phillips 66 Per Share of Common Stock (dollars) ** 3.30$ 1.66$ 1.09$ 2.66$ 1.05$

Millions of Dollars

Except as Indicated

2016

29



Midstream

Net Income (Loss) Attributable to Phillips 66 221$ 85$ 59$ 179$ 75$


Pending claims and settlements (37) (37) (45)


Impairments by equity affiliates 6

Hurricane-related costs 4 4

Tax impact of adjustments 9 12 (3) 14

Adjusted Net Income (Loss) Attributable to Phillips 66 208$ 67$ 64$ 154$ 75$

Chemicals



Impairments by equity affiliates 33 89 89


Tax impact of adjustments (34) (21)


2017 2016

Millions of Dollars

Except as Indicated

30



Refining

Net Income (Loss) Attributable to Phillips 66 1,033$ 550$ 224$ 412$ 177$




Recognition of deferred logistics commitments 30



Tax impact of adjustments 160 3 (5) 16 27

Other tax impacts (16)


Marketing & Specialties





Tax impact of adjustments (4) (1) (3)


Corporate and Other

Net Income (Loss) Attributable to Phillips 66 (407)$ (141)$ (143)$ (347)$ (109)$


Pending claims and settlements 28 31 (3) (2) (2)


Tax impact of adjustments (14) (13) (1) 1 1

Adjusted Net Income (Loss) Attributable to Phillips 66 (386)$ (121)$ (142)$ (348)$ (110)$

Millions of Dollars

Except as Indicated

2017 2016

31



Midstream - Transportation

Net Income (Loss) 271$ 119$ 74$ 241$ 79$


Pending claims and settlements (37) (37)


Tax impact of adjustments 13 13

Adjusted Net Income (Loss) 250$ 98$ 74$ 241$ 79$

Midstream - NGL

Net Income (Loss) 23$ (3)$ 9$ -$ 15$





Adjusted Net Income (Loss) 31$ -$ 14$ -$ 15$

Midstream - DCP Midstream



Pending claims and settlements (45)

Impairments by equity affiliates 6

Tax impact of adjustments 14

Adjusted Net Income (Loss) Attributable to Phillips 66 31$ 1$ 13$ (21)$ 9$

Millions of Dollars

Except as Indicated

2017 2016

32



Refining - Atlantic Basin / Europe





Recognition of deferred logistics commitments 30

Tax impact of adjustments (3) (1) (2) (11)

Other tax impacts (16)


Refining - Gulf Coast







Tax impact of adjustments 156 (4) (2) 27 27

Adjusted Net Income (Loss) Attributable to Phillips 66 200$ 77$ 56$ 60$ (13)$

Millions of Dollars

Except as Indicated

2017 2016

33



Refining - Central Corridor





Tax impact of adjustments (1) (1)


Refining - West Coast

Net Income (Loss) Attributable to Phillips 66 71$ 115$ 37$ 51$ -$




Tax impact of adjustments 8 8

Adjusted Net Income (Loss) Attributable to Phillips 66 59$ 101$ 39$ 51$ -$

Millions of Dollars

Except as Indicated

2017 2016

34



Marketing & Specialties - Marketing & Other







Marketing & Specialties - Specialties



Tax impact of adjustments


Millions of Dollars

Except as Indicated

20162017

35


Atlantic

Basin/EuropeGulf Coast Central Corridor West Coast Worldwide

Realized Refining Margins

Net income (loss) attributable to Phillips 66 refining segment 171$ 67$ 197$ 115$ 550$

Plus (Minus):

Provision for income taxes 76 42 120 75 313

Taxes other than income taxes 14 24 9 - 47

Depreciation, amortization and impairments 47 68 32 58 205

Selling, general and administrative expenses 16 14 8 12 50

Operating expenses 185 298 123 212 818

Equity in (earnings) losses of affiliates 3 (1) (146) - (144)

Other segment (income) expense, net (2) - 8 2 8

Proportional share of refining gross margins contributed by equity affiliates 15 - 290 - 305

Realized refining margins 525$ 512$ 641$ 474$ 2,152$

Total processed inputs (thousands of barrels) 52,306 70,544 23,525 36,635 183,010

Adjusted total processed inputs (thousands of barrels)* 52,306 70,544 45,733 36,635 205,218

Net income attributable to Phillips 66 per barrel (dollars per barrel)** 3.27$ 0.95$ 8.37$ 3.14$ 3.01$

Realized refining margins (dollars per barrel)*** 10.02$ 7.26$ 14.04$ 12.95$ 10.49$

Millions of Dollars

2017

3Q

* Adjusted total processed inputs include our proportional share of processed inputs of equity affiliates.

** Net income attributable to Phillips 66 divided by total processed inputs.

*** Realized refining margins per barrel, as presented, are calculated using the underlying realized refining margin amounts, in dollars, divided by adjusted total processed inputs, in barrels.

As such, recalculated per barrel amounts using the rounded margins and barrels presented may differ from the presented per barrel amounts due to rounding.

36

* Capital employed is total equity plus total debt


2017 September YTD Phillips 66

Numerator ($MM)

Net Income 1,993$

After-tax interest expense 211$

GAAP ROCE earnings 2,204$

After-tax special items (187)$

Adjusted ROCE earnings 2,017$

Denominator ($MM)

GAAP average capital employed * 34,012$

2017 Annualized GAAP ROCE 9%

2017 Annualized Adjusted ROCE 8%

37


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

Phillips 66

Consolidated

Phillips 66

Partners *

Adjusted

Phillips 66

Total Debt 10,201$ 2,290$ 7,911$

Total Equity 23,959$ 1,406$ 22,553$

Debt-to-Capital Ratio 30% 26%

Total Cash & Cash Equivalents 1,547$ 2$ 1,545$

Net-Debt-to-Capital Ratio 27% 22%

2017

September 30

Millions of Dollars

38


Growth Sustaining Total Growth Sustaining Total

Capital Expenditures and Investments

Midstream 136$ 42$ 178$ 445$ 114$ 559$

Refining 57$ 91$ 148$ 265$ 358$ 623$

Marketing & Specialties 16$ 11$ 27$ 37$ 28$ 65$

Corporate and Other -$ 14$ 14$ 1$ 47$ 48$

Total 209$ 158$ 367$ 748$ 547$ 1,295$

Millions of Dollars Millions of Dollars

2017 2017

3Q September YTD

39


PSX Effective Tax Rate Millions of Dollars

2017

3Q

Effective Tax Rates

Income before taxes 1,256$

Special items 55$

Adjusted income before taxes 1,311$

Provision for taxes 407$

Special items 20$

Adjusted provision for taxes 427$

GAAP effective tax rate 32.4%

Adjusted effective tax rate 32.6%

PSXP Run-rate EBITDA:

PSXP’s run-rate EBITDA is a forecast of future EBITDA, and is based on the Partnership’s projections of annual EBITDA inclusive of both currently

owned assets and future potential acquisitions by the Partnership. Run-rate EBITDA is included to demonstrate the historical growth of the

Partnership, as well as management’s intention of future growth through acquisitions and organic projects. We are unable to present a reconciliation

of run-rate EBITDA to net income, which is the nearest GAAP financial measure, because certain elements of net income, including interest,

depreciation and taxes, were not used in the forecasts and are therefore not available. Together, these items generally result in run-rate EBITDA

being significantly greater than net income.

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