Phillips 66 first Quarter Conference...

PHILLIPS 66FOURTH QUARTER 2017 CONFERENCE CALLFebruary 2, 2018

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

Billings Refinery, Billings, MT

4

OVERVIEW4Q 2017

Adjusted earnings $548 MM

Adjusted EPS $1.07

Operating cash flow $1,931 MM

Capital expenditures and investments $537 MM

Shareholder distributions1 $816 MM

(1) Shareholder distributions include share repurchases of $463 MM and dividends of $353 MM

858

548

43

(32)

(190)

(87) (13)(31)

3Q 2017

Adjusted

Earnings

Midstream Chemicals Refining Marketing

& Specialties

Corporate

& Other

Noncontrolling

Interests

4Q 2017

Adjusted

Earnings

4Q 2017 Adjusted Net Income

$MM

142 (140)358121 124

ADJUSTED EARNINGS4Q 2017

5

(57)

99

142

10

20

13

3Q 2017

Adjusted

Net Income

Transportation NGL and Other DCP

Midstream

4Q 2017

Adjusted

Net Income

MIDSTREAM4Q 2017

108 20 14

4Q 2017

$MM

Completed Merey Sweeny and

Bakken Pipeline interest dropdown

to PSXP

Transportation benefited from

higher volumes

Record Sweeny Hub volumes

DCP Midstream benefited from

higher commodity prices and

volumes

6

153

121

(42)

12

(2)

3Q 2017

Adjusted

Net Income

Olefins &

Polyolefins

Specialties,

Aromatics &

Styrenics

Other 4Q 2017

Adjusted

Net Income

CHEMICALS4Q 2017

95 34 (8)

4Q 2017

$MM

79% O&P capacity utilization

Cedar Bayou hurricane recovery

New ethane cracker at Cedar

Bayou achieved mechanical

completion

SA&S improved margins and

volumes

7

548

358

(52) (5) (6)

(127)

3Q 2017

Adjusted

Net Income

Atlantic

Basin /

Europe

Gulf Coast Central

Corridor

West Coast 4Q 2017

Adjusted

Net Income

$MM

REFINING4Q 2017

8

120 19272 (26)

4Q 2017

100% crude utilization

87% clean product yield

$8.98/BBL realized margin

$99 MM pre-tax turnaround costs

13.98

8.98

(1.44)

(1.99)

0.82

(2.39)

Market

3:2:1

Configuration Secondary

Products

Feedstock Other Realized

Margin

WORLDWIDE REFINING $/BBL

REFINING MARGINS – MARKET VS. REALIZED4Q 2017

9

Avg Market Crude: $59.89/BBL 64% Market Capture

211

124

(76)(11)

3Q 2017

Adjusted

Net Income

Marketing

& Other

Specialties 4Q 2017

Adjusted

Net Income

MARKETING AND SPECIALTIES 4Q 2017

87 37

4Q 2017

10

Marketing margins impacted by

rising prices

Seasonally lower demand

Re-imaged over 140 branded

sites

Lower base oil and finished

lubricants margins

$MM

(127)(140)

1

(14)

3Q 2017

Adjusted

Net Loss

Net Interest

Expense

Corporate

Overhead

& Other

4Q 2017

Adjusted

Net Loss

$MM

CORPORATE AND OTHER4Q 2017

11

12

OVERVIEW2017

Adjusted earnings $2.3 B

Adjusted EPS $4.38

Operating cash flow $3.6 B

Capital expenditures and investments $1.8 B

Shareholder distributions1 $3.0 B

(1) Shareholder distributions include share repurchases of $1.6 B and dividends of $1.4 B

Net-debt-to-capital ratio 20%

Adjusted ROCE 8%

PSXP equity proceeds $1.2 B

2.7 3.1

(1.8)

0.4

3.6

1.2

(3.0)

December 31,2016Cash

Balance*

Operating CashFlow

PSXP EquityProceeds

CapitalExpenditures

& Investments

ShareholderDistributions

Other December 31,2017Cash

Balance*

$B

CASH FLOW2017

13* Includes cash and cash equivalents

Global Olefins & Polyolefins utilization Mid-90%

Refining crude utilization Mid-80%

Depreciation and amortization $1.4 B

Effective income tax rate Low-to-Mid-20%

Corporate & Other costs (after-tax) $160 MM - $180 MM

Refining turnaround expenses (pre-tax) $230 MM - $260 MM

2018

Refining turnaround expenses (pre-tax) $520 MM - $570 MM

Corporate & Other costs (after-tax) $640 MM - $680 MM

1Q 2018

14

OUTLOOK

PHILLIPS 66FOURTH QUARTER 2017CONFERENCE CALL

Questions and Answers

PHILLIPS 66FOURTH QUARTER 2017CONFERENCE CALL

Appendix

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) 45

Worldwide Refining

$1/BBL Increase in Gasoline Margin 260

$1/BBL Increase in Distillate Margin 230

$1/BBL Widening WTI / WCS Differential (WTI less WCS) 50

$1/BBL Widening LLS / Maya Differential 40

$1/BBL Widening LLS / Medium Sour Differential 30

$1/BBL Widening LLS / WCS Differential 25

$1/BBL Widening WTI / WTS Differential 15

$1/BBL Widening LLS / WTI Differential 10

$1/BBL Widening ANS / WTI Differential 10

$1/BBL Widening Brent / WTI Differential 5

10¢/MMBtu Increase in Natural Gas price (15)

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

Annual Net Income $MM

ESTIMATED SENSITIVITIES2018

17Sensitivities shown above are independent and are only valid within a limited price range

23.9 23.7 23.7 23.8 24.0

27.4

23.1 22.4 22.4 22.4 22.6

25.1

8.9 10.1 10.2 10.0 10.2

10.1 7.8 7.7 7.6 7.6 7.8

7.2

3.1 2.7 1.5

2.2 1.5

3.1 3.0 2.7 1.5 2.2 1.5 2.9

27%

30% 30% 30% 30%

27%25% 26% 25% 25% 26%

22%

20%

24%

27%

25%

27%

20%

17%18%

21%

20%

22%

14%

2015 2016 1Q

2017

2Q

2017

3Q

2017

4Q

2017

2015 2016 1Q

2017

2Q

2017

3Q

2017

4Q

2017

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

CAPITAL STRUCTURE2015 – 2017

18

Consolidated PSX Excluding PSXP

13.43

8.32

(0.95) (0.11)

(2.35)

(1.70)

Market

3:2:1


Products


Margin

ATLANTIC BASIN / EUROPE $/BBL


19

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

Brent: $61.39/BBL 104% Crude Capacity Utilization 62% Market Capture

11.12

6.38

(1.72)

(2.58)

2.31

(2.75)

Market

3:2:1


Products


Margin

GULF COAST $/BBL


20

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

LLS: $61.05/BBL 102% Crude Capacity Utilization 57% Market Capture

18.76

15.16

(1.20)

(2.52)

2.66

(2.54)

Market

3:2:1


Products


Margin

CENTRAL CORRIDOR $/BBL


21

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

WTI: $55.35/BBL 92% Crude Capacity Utilization 81% Market Capture

14.11

7.96

(1.01)

(3.46)

1.14

(2.82)

Market

3:2:1


Products


Margin

WEST COAST $/BBL


22

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

ANS: $61.52/BBL 98% Crude Capacity Utilization 56% Market Capture

83

548

73

(3)

453

(16) (16)(26)

4Q 2016

Adjusted

Earnings

Midstream Chemicals Refining Marketing

& Specialties

Corporate

& Other

Noncontrolling

Interests

4Q 2017

Adjusted

Earnings

$MM

ADJUSTED EARNINGS4Q 2017 VS. 4Q 2016

23

4Q 2017 Adjusted Net Income

142 (140)358121 124 (57)

69

142

40

13

20

4Q 2016

Adjusted

Net Income

Transportation NGL and Other DCP

Midstream

4Q 2017

Adjusted

Net Income

$MM

MIDSTREAM4Q 2017 VS. 4Q 2016

24

108 20 14

4Q 2017

124 121

(10)

10

(3)

4Q 2016

Adjusted

Net Income

Olefins &

Polyolefins

Specialties,

Aromatics &

Styrenics

Other 4Q 2017

Adjusted

Net Income

$MM

CHEMICALS4Q 2017 VS. 4Q 2016

25

95 (8)34

4Q 2017

(95)

358

173

135

22

123

4Q 2016

Adjusted

Net Loss

Atlantic

Basin /

Europe

Gulf

Coast

Central

Corridor

West Coast 4Q 2017

Adjusted

Net Income

$MM

REFINING4Q 2017 VS. 4Q 2016

26

120 19272 (26)

4Q 2017

140 124

(27)

11

4Q 2016

Adjusted

Net Income

Marketing

& Other

Specialties 4Q 2017

Adjusted

Net Income

$MM

MARKETING AND SPECIALTIES4Q 2017 VS. 4Q 2016

27

87 37

4Q 2017

(124)(140)

(13) (3)

4Q 2016

Adjusted

Net Loss

Net Interest

Expense

Corporate

Overhead

& Other

4Q 2017

Adjusted

Net Loss

$MM

CORPORATE AND OTHER4Q 2017 VS. 4Q 2016

28

29

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

Year 4Q 3Q Year 4Q

Phillips 66

Net Income Attributable to Phillips 66 5,106$ 3,198$ 823$ 1,555$ 163$

Pre-tax Adjustments:

Pending claims and settlements (60) - (36) (117) -

Pension settlement expense 83 7 21 - -

Impairments by equity affiliates 64 31 - 95 -

Recognition of deferred logistics commitments - - - 30 -

Gain on consolidation of business (423) - - - -

Hurricane-related costs 210 140 70 - -

Equity affiliate ownership restructuring - - - 33 33

Railcar lease residual value deficiencies and related costs - - - 40 40

Certain tax impacts * (23) (23) - (32) (32)

Tax impact of adjustments * 47 (70) (20) 4 (27)

U.S. tax reform (2,735) (2,735) - - -

Other tax impacts - - - (110) (94)

Adjusted Net Income Attributable to Phillips 66 2,269$ 548$ 858$ 1,498$ 83$

Net Income Attributable to Phillips 66 Per Share of Common Stock (dollars) ** 9.85$ 6.25$ 1.60$ 2.92$ 0.31$ 2.82

Adjusted Net Income Attributable to Phillips 66 Per Share of Common Stock (dollars) ** 4.38$ 1.07$ 1.66$ 2.82$ 0.16$

Millions of Dollars

Except as Indicated

2016

30


Year 4Q 3Q Year 4Q

Midstream

Net Income 464$ 139$ 117$ 280$ 35$


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

Pension settlement expense 12 1 3

Impairments by equity affiliates 6

Hurricane-related costs 10 6 4

Equity affiliate ownership restructuring 33 33

Tax impact of adjustments 5 (4) 12 2 (12)

Other tax impacts 13 13

Adjusted Net Income 454$ 142$ 99$ 289$ 69$

Chemicals

Net Income 525$ 27$ 121$ 583$ 136$


Impairments by equity affiliates 64 31 89


Tax impact of adjustments (93) (59) (21)

Other tax impacts (12) (12)


2017 2016

Millions of Dollars

Except as Indicated

31


Year 4Q 3Q Year 4Q

Refining

Net Income (Loss) 1,404$ 371$ 550$ 374$ (38)$




Gain on consolidation of business (423)


Recognition of deferred logistics commitments 30

Railcar lease residual value deficiencies and related costs 40 40

Certain tax impacts (23) (23) (32) (32)

Tax impact of adjustments 153 (7) 3 1 (15)


Adjusted Net Income (Loss) 1,137$ 358$ 548$ 277$ (95)$

Marketing & Specialties

Net Income 686$ 123$ 208$ 891$ 190$



Hurricane-related costs 1 1

Tax impact of adjustments (4) (1)



Corporate and Other

Net Income (Loss) 2,169$ 2,595$ (147)$ (484)$ (129)$


Pending claims and settlements 28 31 (2)

Pension settlement expense 7 2

Tax impact of adjustments (14) (13) 1

U.S. tax reform (2,735) (2,735)


Adjusted Net (Loss) (545)$ (140)$ (127)$ (480)$ (124)$

2017 2016

Millions of Dollars

Except as Indicated

32


Year 4Q 3Q Year 4Q

Midstream - Transportation

Net Income 376$ 105$ 119$ 311$ 70$


Pending claims and settlements (37) (37)


Tax impact of adjustments 11 (2) 13



Midstream - NGL and Other

Net Income (Loss) 43$ 20$ (3)$ 2$ 2$




Tax impact of adjustments (6) (2) (1)


Adjusted Net Income 51$ 20$ -$ 7$ 7$

Midstream - DCP Midstream

Net Income (Loss) 45$ 14$ 1$ (33)$ (37)$


Pending claims and settlements (45)

Impairments by equity affiliates 6

Equity affiliate ownership restructuring 33 33

Tax impact of adjustments 2 (12)


Adjusted Net Income (Loss) 45$ 14$ 1$ (27)$ (6)$

Millions of Dollars

Except as Indicated

2017 2016

33


Year 4Q 3Q Year 4Q

Refining - Atlantic Basin / Europe

Net Income 370$ 142$ 171$ 204$ 163$




Recognition of deferred logistics commitments 30


Certain tax impacts (23) (23) (32) (32)

Tax impact of adjustments (3) (1) (13) (2)



Refining - Gulf Coast

Net Income (Loss) 512$ 64$ 67$ 52$ (51)$




Gain on consolidation of business (423)



Tax impact of adjustments 150 (6) (4) 21 (6)


Adjusted Net Income (Loss) 272$ 72$ 77$ 9$ (51)$

2017 2016

Millions of Dollars

Except as Indicated

34


Year 4Q 3Q Year 4Q

Refining - Central Corridor

Net Income 477$ 191$ 197$ 234$ 17$





Tax impact of adjustments (2) (1) (4) (4)



Refining - West Coast

Net Income (Loss) 45$ (26)$ 115$ (116)$ (167)$



Pension settlement expense 8 2


Tax impact of adjustments 8 8 (3) (3)


Adjusted Net Income (Loss) 33$ (26)$ 101$ (110)$ (161)$

Millions of Dollars

Except as Indicated

2017 2016

35


Year 4Q 3Q Year 4Q

Marketing & Specialties - Marketing & Other

Net Income 551$ 86$ 160$ 747$ 158$



Hurricane-related costs 1 1

Tax impact of adjustments (4) (1)



Marketing & Specialties - Specialties

Net Income 135$ 37$ 48$ 144$ 32$


Tax impact of adjustments



Millions of Dollars

Except as Indicated

20162017

36


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

** Net income (loss) 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.

Atlantic

Basin/EuropeGulf Coast Central Corridor West Coast Worldwide

Realized Refining Margins

Net income (loss) 142$ 64$ 191$ (26)$ 371$

Plus:

Income tax expense (benefit) 37 29 108 (29) 145

Taxes other than income taxes 13 23 10 23 69

Depreciation, amortization and impairments 49 70 33 61 213

Selling, general and administrative expenses 16 15 10 13 54

Operating expenses 207 282 151 235 875

Equity in (earnings) losses of affiliates 2 2 (166) (162)

Other segment (income) expense, net (2) (1) 1 (2)

Proportional share of refining gross margins contributed by equity affiliates 14 325 339

Special Items:

Certain tax impacts (23) (23)

Realized refining margins 455$ 485$ 661$ 278$ 1,879$

Total processed inputs (thousands of barrels) 54,897 76,213 21,643 34,736 187,489

Adjusted total processed inputs (thousands of barrels)* 54,897 76,213 43,451 34,736 209,297

Net income (loss) (dollars per barrel)** 2.59$ 0.84$ 8.83$ (0.75)$ 1.98$

Realized refining margins (dollars per barrel)*** 8.32$ 6.38$ 15.16$ 7.96$ 8.98$

Millions of Dollars

2017

4Q

37

* Capital employed is total equity plus total debt


2017 Phillips 66

Numerator ($MM)

Net Income 5,248$

After-tax interest expense 285$

GAAP ROCE earnings 5,533$

After-tax special items (2,837)$

Adjusted ROCE earnings 2,696$

Denominator ($MM)

GAAP average capital employed * 35,700$

2017 GAAP ROCE 15%

2017 Adjusted ROCE 8%

38


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

Phillips 66

Consolidated

Phillips 66

Partners *

Adjusted

Phillips 66

Total Debt 10,110$ 2,945$ 7,165$

Total Equity 27,428$ 2,314$ 25,114$

Debt-to-Capital Ratio 27% 22%

Total Cash & Cash Equivalents 3,119$ 185$ 2,934$

Net-Debt-to-Capital Ratio 20% 14%

2017

December 31

Millions of Dollars

39


Growth Sustaining Total Growth Sustaining Total

Capital Expenditures and Investments

Midstream 152$ 60$ 212$ 597$ 174$ 771$

Refining 58$ 172$ 230$ 323$ 530$ 853$

Marketing & Specialties 24$ 19$ 43$ 62$ 46$ 108$

Corporate and Other 52$ 52$ 100$ 100$

Total 234$ 303$ 537$ 982$ 850$ 1,832$

Millions of Dollars Millions of Dollars

2017 2017

4Q Year

40


PSX Effective Tax Rate

4Q Year

Effective Tax Rates

Income before taxes 654$ 3,555$

Special items 155$ (149)$

Adjusted income before taxes 809$ 3,406$

Provision for taxes (2,601)$ (1,693)$

Special items 2,805$ 2,688$

Adjusted provision for taxes 204$ 995$

GAAP effective tax rate (398)% (48)%

Adjusted effective tax rate 25% 29%

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.

Millions of Dollars

2017

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