PHILLIPS 66 FOURTH QUARTER 2017 CONFERENCE CALL February 2, 2018
CAUTIONARY STATEMENT 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,” “in ten ds,” “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 opera tions) are based on management’s expectations, estimates and projections about the company, its interests and the energy industry in general on t he 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. 2
EXECUTING THE STRATEGY Billings Refinery, Billings, MT 3
OVERVIEW 4Q 2017 Adjusted earnings $548 MM Adjusted EPS $1.07 Operating cash flow $1,931 MM Capital expenditures and investments $537 MM Shareholder distributions 1 $816 MM (1) Shareholder distributions include share repurchases of $463 MM and dividends of $353 MM 4
ADJUSTED EARNINGS 4Q 2017 $MM 43 (32) (190) (87) (13) (31) 858 548 3Q 2017 Midstream Chemicals Refining Marketing Corporate Noncontrolling 4Q 2017 Adjusted & Specialties & Other Interests Adjusted Earnings Earnings 142 121 358 124 (140) (57) 4Q 2017 Adjusted Net Income 5
MIDSTREAM 4Q 2017 $MM Completed Merey Sweeny and 13 Bakken Pipeline interest dropdown 20 to PSXP 10 Transportation benefited from higher volumes 142 99 Record Sweeny Hub volumes DCP Midstream benefited from 3Q 2017 Transportation NGL and Other DCP 4Q 2017 higher commodity prices and Adjusted Midstream Adjusted volumes Net Income Net Income 108 20 14 4Q 2017 6
CHEMICALS 4Q 2017 79% O&P capacity utilization $MM Cedar Bayou hurricane recovery 12 (2) (42) 153 New ethane cracker at Cedar 121 Bayou achieved mechanical completion 3Q 2017 Olefins & Specialties, Other 4Q 2017 Adjusted Polyolefins Aromatics & Adjusted SA&S improved margins and Net Income Styrenics Net Income volumes 95 34 (8) 4Q 2017 7
REFINING 4Q 2017 $MM 100% crude utilization (52) (5) (6) 87% clean product yield (127) 548 358 $8.98/BBL realized margin $99 MM pre-tax turnaround costs 3Q 2017 Atlantic Gulf Coast Central West Coast 4Q 2017 Adjusted Basin / Corridor Adjusted Net Income Europe Net Income 120 72 192 (26) 4Q 2017 8
REFINING MARGINS – MARKET VS. REALIZED 4Q 2017 WORLDWIDE REFINING $/BBL (1.44) 0.82 (1.99) (2.39) 13.98 8.98 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Avg Market Crude: $59.89/BBL 64% Market Capture 9
MARKETING AND SPECIALTIES 4Q 2017 Marketing margins impacted by $MM rising prices Seasonally lower demand (76) (11) 211 124 Re-imaged over 140 branded sites 3Q 2017 Marketing Specialties 4Q 2017 Adjusted & Other Adjusted Net Income Net Income Lower base oil and finished lubricants margins 87 37 4Q 2017 10
CORPORATE AND OTHER 4Q 2017 $MM 3Q 2017 Corporate 4Q 2017 Adjusted Net Interest Overhead Adjusted Net Loss Expense & Other Net Loss (127) (140) 1 (14) 11
OVERVIEW 2017 Adjusted earnings $2.3 B Adjusted EPS $4.38 Operating cash flow $3.6 B PSXP equity proceeds $1.2 B Capital expenditures and investments $1.8 B Shareholder distributions 1 $3.0 B Net-debt-to-capital ratio 20% Adjusted ROCE 8% (1) Shareholder distributions include share repurchases of $1.6 B and dividends of $1.4 B 12
CASH FLOW 2017 $B 1.2 3.6 (1.8) 0.4 (3.0) 3.1 2.7 December 31, Operating Cash PSXP Equity Capital Shareholder Other December 31, 2016 Flow Proceeds Expenditures Distributions 2017 Cash & Investments Cash Balance* Balance* * Includes cash and cash equivalents 13
OUTLOOK 1Q 2018 Global Olefins & Polyolefins utilization Mid-90% Refining crude utilization Mid-80% Refining turnaround expenses (pre-tax) $230 MM - $260 MM Corporate & Other costs (after-tax) $160 MM - $180 MM 2018 Refining turnaround expenses (pre-tax) $520 MM - $570 MM Corporate & Other costs (after-tax) $640 MM - $680 MM Depreciation and amortization $1.4 B Effective income tax rate Low-to-Mid-20% 14
PHILLIPS 66 FOURTH QUARTER 2017 CONFERENCE CALL Questions and Answers
PHILLIPS 66 FOURTH QUARTER 2017 CONFERENCE CALL Appendix
ESTIMATED SENSITIVITIES 2018 Annual Net Income $MM 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 Impacts due to Actual Crude Feedstock Differing from Feedstock Assumed in Market Indicators: $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) 17 Sensitivities shown above are independent and are only valid within a limited price range
CAPITAL STRUCTURE 2015 – 2017 Consolidated PSX Excluding PSXP 30% 30% 30% 30% 27% 27% 27% 27% 26% 26% 25% 25% 25% 25% 24% 22% 22% 21% 20% 20% 20% 18% 17% 27.4 14% 25.1 23.9 23.7 23.8 24.0 23.7 23.1 22.4 22.6 22.4 22.4 10.2 10.1 10.2 10.0 10.1 8.9 7.8 7.7 7.8 7.6 7.6 7.2 3.1 3.1 2.9 3.0 2.7 2.2 2.7 2.2 1.5 1.5 1.5 1.5 2015 2016 1Q 2Q 3Q 4Q 2015 2016 1Q 2Q 3Q 4Q 2017 2017 2017 2017 2017 2017 2017 2017 Equity $B Debt $B Cash & Cash Equivalents $B Debt-to-Capital Net-Debt-to-Capital 18
REFINING MARGINS – MARKET VS. REALIZED 4Q 2017 ATLANTIC BASIN / EUROPE $/BBL Brent: $61.39/BBL 104% Crude Capacity Utilization 62% Market Capture (0.95) (0.11) (2.35) (1.70) 13.43 8.32 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – Dated Brent / Gasoline 83.7 RBOB NYH / Diesel 15ppm NYH 19
REFINING MARGINS – MARKET VS. REALIZED 4Q 2017 GULF COAST $/BBL LLS: $61.05/BBL 102% Crude Capacity Utilization 57% Market Capture 2.31 (1.72) (2.58) (2.75) 11.12 6.38 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – LLS / Gasoline 85 CBOB / Diesel 62 10ppm 20
REFINING MARGINS – MARKET VS. REALIZED 4Q 2017 CENTRAL CORRIDOR $/BBL WTI: $55.35/BBL 92% Crude Capacity Utilization 81% Market Capture 2.66 (1.20) (2.52) (2.54) 18.76 15.16 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – WTI / Gasoline Unl Sub Octane Group 3 / ULSD Group 3 21
REFINING MARGINS – MARKET VS. REALIZED 4Q 2017 WEST COAST $/BBL ANS: $61.52/BBL 98% Crude Capacity Utilization 56% Market Capture (1.01) 1.14 (3.46) 14.11 (2.82) 7.96 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Market 3:2:1 – ANS / Los Angeles CARBOB / Los Angeles No. 2 CARB 22
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