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Execution
2015 Annual Meeting of Stockholders
May 6, 2015
Houston, TX
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,” “intends,” “objectives,”
“projects,” “strategies” and similar expressions are used to identify such forward-looking statements. However, the absence of these words does
not mean that a statement is not forward-looking. Forward-looking statements relating to the operations of Phillips 66 or Phillips 66 Partners
(including their joint ventures) are based on management’s expectations, estimates and projections about Phillips 66 or Phillips 66 Partners, their
interests and the energy industry in general on the date this presentation was prepared. These statements are not guarantees of future
performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expressed or forecast in such forward-looking statements. Factors that could cause actual results or events to differ
materially from those described in the forward-looking statements are set forth in filings with the Securities and Exchange Commission made by
Phillips 66 and Phillips 66 Partners. Phillips 66 and Phillips 66 Partners are under no obligation (and expressly disclaim any such obligation) to
update or alter these 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
Providing Energy, Improving Lives
43,000
Number of 2014 employee hours donated to local communities
44
Number of U.S. colleges and universities supported in 2014
3 million
Number of children that have learned to swim under the Phillips 66
sponsored USA Swimming Foundation’s Make a Splash Tour
1,287
Number of charitable organizations supported through the
matching gift program in 2014
25
Percentage of hourly employees hired across our U.S. refining
system in 2014 who are veterans
3
A Diversified Downstream Company
Midstream
G&P, pipelines,
fractionation, storage and
export facilities
Phillips 66 Partners funding
Midstream growth
Chemicals
Refining
Marketing and
Specialties
CPChem - 50/50 JV with
Chevron
Primarily Olefins &
Polyolefins in North America
and Middle East
Operate in all five U.S.
PADDs with 2.2 MMBD of
refining capacity
U.S. Marketing,
International Marketing and
Lubricants
Growing organically
Improving yields, accessing
advantaged crudes
High return and stable
earnings business
DCP - 50/50 JV with
Spectra
Organic opportunities and
M&A
4
Operating Excellence
Total Recordable Rates
Refining Environmental Metrics
Incidents per 200,000 Hours Worked
Industry Average
’08 ’10 ’12 ’14
880
Phillips 66
CPChem
DCP
2008
450
430
300
2010
2012
2014
Operating Costs and SG&A
Refining Capacity Utilization
$B
%
Midstream Growth
0.3
6.5
5.5
5.7
5.8
2008
2010
2012
2014
See appendix for footnotes.
93%
90%
93%
94%
2008
2010
2012
2014
5
2014 Accomplishments
Delivered leading safety, environmental and operational
performance
Progressed Midstream and Chemicals growth projects
Increased refining utilization and advantaged crude runs
Returned $4.7 B to shareholders
Maintained a strong balance sheet
Continued to build on our high-performing organization
6
Energy Landscape
Historical and Forward Crude Oil Prices
$/bbl
Markets seeking balance
120
Brent
WTI
Global economic boost from
lower energy prices should
stimulate demand
90
Reduced E&P investment slows
U.S. infrastructure growth
30
60
0
2009
2011
2013
2015
2017
Source: Bloomberg
7
Corporate Strategy
Operating excellence
Growth
Returns
Distributions
High-performing organization
8
2015 Capital Budget
$4.6 B
$1.2 B Sustaining capital
$3.4 B Growth capital
Sweeny Fractionator One
LPG Export Terminal
Bakken to Patoka/Beaumont pipelines
PSX Sustaining
M&S Growth
PSXP Growth
Refining Returns
Midstream Growth
Beaumont Terminal expansion
9
Executing Midstream Growth
Sweeny Frac One and Freeport LPG Terminal
On schedule and on budget
Fee-based contracts
Beaumont Terminal
Connecting to major crude and clean products pipelines
Potential for 16 MMBbls storage
New-build pipeline to Louisiana
Bakken Joint Ventures
Palermo Rail Terminal/Sacagawea Pipeline
Dakota Access/ETCOP crude pipelines
10
DCP Midstream
Leading U.S. midstream business
Largest NGL producer
Largest natural gas processing company
Third largest NGL pipeline operator
Footprint of strategically integrated assets
Growing gathering and processing business
11
Phillips 66 Partners
4,500 miles of pipeline
Total Unitholder Return
150%
12 MMBbls terminal storage capacity
100%
Marine docks, rail racks and
propylene spheres
50%
$235 MM growth capital program
0%
Strong strategic alignment
7/23/13
PSXP
See appendix for footnotes.
12/31/13
Peer Group
12/31/14
Alerian MLP Index
12
Phillips 66 Partners Growth
$B
Funding Midstream growth
8 - 10
1.1
Fee-based business model
Growing cash flows
Incentivized to grow value
Distributions
0.3
1Q 2015
1.8
2018E
Run-Rate Annual
EBITDA
See appendix for footnotes.
Dropdown
Proceeds
1Q 2015
2018E
Cumulative Cash to PSX
since IPO
13
CPChem Growth
USGC Petrochemicals project on schedule
$2.9 B self-funded 2015 total capital
$1.3 - 1.6 B/yr incremental EBITDA by 2018
See appendix for footnotes.
14
Refining
Accessing advantaged
crudes
Improving yields
West Coast
360 MBD
Central
Corridor
492 MBD
Atlantic
Basin/Europe
588 MBD
Expanding export
capability
Managing costs
Gulf Coast
738 MBD
Portfolio management
15
Marketing and Specialties
Providing customers high quality
fuels and lubricants
High-returning businesses
U.S. Marketing
Wholesale network
~8,600 branded sites
International Marketing
Low cost, high volume business
~1,520 sites
Specialties
Finished lubricants
Base oil joint venture
16
2014 Adjusted ROCE
40%
M&S
30%
Chemicals
32%
27%
20%
Midstream
10%
P66 Total
14%
Refining
13%
12%
Corporate
0%
-5%
-10%
0
2
4
6
8
10
12
14
16
18
20
22
24
26
28
30
Average Capital Employed ($B)
17
Distributions
Share Count and Capital Returned
Dividend Growth
Quarterly ¢/share
$6.6 B
50
624 MM
590 MM
542 MM
3Q
2012
4Q
2013
1Q
2015
$1.7 B remaining authorized share repurchases
20
3Q
2012
4Q
2013
1Q
2015
150% dividend growth
18
High-Performing Organization
Sustainable differentiated performance
Getting results the right way
Collaboration and empowering others
Diversity and inclusion in the workforce
Developing leadership skills at all levels
Being agile in a rapidly changing landscape
19
Creating Shareholder Value
Enterprise Value
Increasing EBITDA >30%
Reducing cash flow volatility
Shifting to higher-valued businesses
2014
Midstream
PSXP
Maintaining strong capital structure
2018E
Chemicals
M&S
Refining
20
Promising Future
Unique portfolio
Total Shareholder Return
150%
Executing our strategy
100%
Growing opportunities
50%
Leading shareholder returns
0%
A great place to work
See appendix for footnotes.
5/1/12
12/31/12
Phillips 66
12/31/13
Peer Group
12/31/14
S&P 100
21
22
Footnotes
Slide 5
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).
Slide 12
$235MM organic growth capital 2015 forecast. Total 2015 capital forecast, including maintenance capital,
is approximately $245MM.
Peer group consists of Tesoro Logistics, MPLX, Valero Energy Partners, and DCP Midstream Partners.
Peer group returns weighted by market capitalization.
Slide 13
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. PSX’s consolidated cash balance increases to the
extent PSXP funds consideration for a dropdown transaction with public debt and equity offerings.
23
Footnotes
Slide 14
$1.3 – $1.6 B estimated incremental EBITDA based on 2012 industry margins.
Growth capital reflects 100% CPChem growth capital. Growth EBITDA includes: 1-hexene, 10th Sweeny
furnace, NAO expansion project and USGC petrochemical project.
Slide 21
Peer group consists of Dow, Marathon Petroleum, Tesoro and Valero. Peer group returns weighted by
market capitalization.
24
Estimated Sensitivities - 2015
Sensitivities shown above are independent and are only valid within a limited price range
25
Capital Program
Millions of Dollars
2015 Budget
Sustaining
Growth
Capital Expenditures and Investments
Consolidated
Midstream(1)
Transportation
NGL
Chemicals
Refining(2)
Marketing and Specialties
Corporate(2)
Selected Equity Affiliates
DCP
CPChem
WRB
Capital Program(3)
Midstream
Transportation
DCP
NGL
Chemicals
Refining
Marketing and Specialties
Corporate
Total
148
19
167
813
78
155
1,213
1,084
1,912
2,996
299
92
3,387
1,232
1,931
3,163
1,112
170
155
4,600
125
188
150
463
275
1,265
53
1,593
400
1,453
203
2,056
148
125
19
292
188
963
78
155
1,676
1,084
275
1,912
3,271
1,265
352
92
4,980
1,232
400
1,931
3,563
1,453
1,315
170
155
6,656
(1) Includes 100% of Phillips 66 Partners
(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 selffunded.
26
Non-GAAP Reconciliations
Millions of Dollars
Low
High
100% CPChem Incremental Project Earnings Projections
Estimated incremental net income
$
1,000
1,313
20
27
Plus:
Estimated income taxes
Estimated net interest expense
-
-
Estimated depreciation
280
260
1,300
1,600
Estimated EBITDA
$
PSXP Run Rate EBITDA
PSXP 2015 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.
27
Non-GAAP Reconciliations
Millions of Dollars
2014
Phillips 66
Marketing &
Specialties
Corporate
1,771
1,034
(393)
-
-
-
173
1,137
1,771
1,034
(220)
Midstream
Chemicals
541
1,137
Refining
ROCE
Numerator
Net Income
$
After-tax interest expense
4,797
173
GAAP ROCE earnings
4,970
Special Items
541
1
72
$
3,990
542
1,209
1,576
882
$
29,634
4,207
4,489
13,377
2,743
4,722
-
-
-
-
-
29,537
4,207
4,489
13,377
2,743
4,722
Adjusted ROCE (percent)
14%
13%
27%
12%
32%
-5%
GAAP ROCE (percent)
17%
13%
25%
13%
38%
-5%
Adjusted ROCE earnings
(981)
(195)
(152)
0
(220)
Denominator
GAAP average capital employed*
Discontinued Operations
Adjusted average capital employed*
(96)
$
*Total equity plus debt.
*Total equity plus debt.
28
Non-GAAP Reconciliations
Millions of Dollars
2013
2014
100% CPChem
Net Income
2,743
3,288
Income Taxes
71
86
Net interest expense
(3)
(2)
Plus:
Depreciation and amortization
278
296
3,089
3,668
115
136
24
19
Proportional share of equity affiliates depreciation and amoritzation
214
220
Impairments
-
175
Premium on early debt retirement
-
-
Lower-of-cost-or-market inventory adjustments
-
EBITDA
Adjustments (pre-tax):
Proportional share of equity affiliates income taxes
Proportional share of equity affiliates interest expense
Adusted EBITDA
3,442
6
4,224
29