2. 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
4. 4
OVERVIEW
4Q 2016
Adjusted earnings $83 MM
Adjusted EPS $0.16
Operating cash flow $667 MM
Capital expenditures and investments $813 MM
Shareholder distributions1
$558 MM
(1) Shareholder distributions include dividends and share repurchases
11. (110) (119)
(5) (4)
3Q 2016
Adjusted
Net Loss
Net Interest
Expense
Corporate
Overhead
& Other
4Q 2016
Adjusted
Net Loss
$MM
CORPORATE AND OTHER
4Q 2016
11
12. 12
OVERVIEW
2016
Adjusted earnings $1.5 B
Adjusted EPS $2.82
Operating cash flow $3.0 B
Capital expenditures and investments $2.8 B
Shareholder distributions1
$2.3 B
(1) Shareholder distributions include dividends and share repurchases
Net-debt-to-capital ratio 24%
Adjusted ROCE 5%
PSXP debt and equity proceeds $2.3 B
14. Global Olefins & Polyolefins utilization High-80%
Refining crude utilization Low-80%
Depreciation and amortization $1.3 B
Effective income tax rate Mid-30%
Corporate & Other costs (after-tax) $125 MM - $140 MM
Refining turnaround expenses (pre-tax) $300 MM - $350 MM
2017
Refining turnaround expenses (pre-tax) $625 MM - $675 MM
Corporate & Other costs (after-tax) $490 MM - $510 MM
1Q 2017
14
OUTLOOK
17. ESTIMATED SENSITIVITIES
2017
17Sensitivities 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
28. (117) (119)
(8)
6
4Q 2015
Adjusted
Net Loss
Net Interest
Expense
Corporate
Overhead
& Other
4Q 2016
Adjusted
Net Loss
$MM
CORPORATE AND OTHER
4Q 2016 VS. 4Q 2015
28
29. 29
NON-GAAP RECONCILIATIONS
* Pre-tax impact only. Tax-only adjusting items included in "other tax impacts”.
** We generally tax effect taxable U.S.-based special items using a combined federal and state statutory income tax rate of approximately 38 percent. Taxable special items attributable to foreign locations
likewise use a local statutory income tax rate. Nontaxable events reflect zero income tax. These events include, but are not limited to, most goodwill impairments, transactions legislatively exempt from
income tax, transactions related to entities for which we have made an assertion that the undistributed earnings are permanently reinvested, or transactions occurring in jurisdictions with a valuation
allowance.
*** Weighted-average diluted shares outstanding and income allocated to participating securities, if applicable, in the adjusted earnings per share calculation are the same as those used in the GAAP diluted
earnings per share calculation.
2016
Year 4Q 3Q Year 4Q
Phillips 66
Net Income (Loss) Attributable to Phillips 66 1,555$ 163$ 511$ 4,227$ 650$
Pre-tax Adjustments:
Asset dispositions - - - (280) -
Pension settlement expense - - - 80 5
Impairments by equity affiliates 95 - 89 390 172
Lower-of-cost-or-market inventory adjustments - - - 53 53
Pending claims and settlements (117) - (72) 30 -
Recognition of deferred logistics commitments 30 - - - -
Equity affiliate ownership restructuring 33 33 - - -
Railcar lease residual value deficiencies and related costs 40 40 - - -
Certain tax impacts * (32) (32) - (9) (4)
Tax impact of adjustments ** 4 (27) 28 (181) (86)
Other tax impacts (110) (94) - (117) (80)
Adjusted Net Income (Loss) Attributable to Phillips 66 1,498$ 83$ 556$ 4,193$ 710$
Net Income (Loss) Attributable to Phillips 66 Per Share of Common Stock (dollars) *** 2.92$ 0.31$ 0.96$ 7.73$ 1.20$
Adjusted Net Income (Loss) Attributable to Phillips 66 Per Share of Common Stock (dollars) *** 2.82$ 0.16$ 1.05$ 7.67$ 1.31$
Millions of Dollars
Except as Indicated
2015
30. 30
NON-GAAP RECONCILIATIONS
Year 4Q 3Q Year 4Q
Midstream
Net Income (Loss) Attributable to Phillips 66 178$ (1)$ 75$ 13$ (77)$
Pre-tax Adjustments:
Asset dispositions - - - (30) -
Pending claims and settlements (45) - - - -
Impairments by equity affiliates 6 - - 366 168
Pension settlement expense - - - 9 -
Equity affiliate ownership restructuring 33 33 - - -
Tax impact of adjustments 2 (12) - (125) (64)
Other tax impacts 13 13 - 15 15
Adjusted Net Income (Loss) Attributable to Phillips 66 187$ 33$ 75$ 248$ 42$
Chemicals
Net Income (Loss) Attributable to Phillips 66 583$ 136$ 101$ 962$ 212$
Pre-tax Adjustments:
Impairments by equity affiliates 89 - 89 24 4
Tax impact of adjustments - - - - -
Other tax impacts (12) (12) - (34) (34)
Adjusted Net Income (Loss) Attributable to Phillips 66 660$ 124$ 190$ 952$ 182$
Except as Indicated
2016 2015
Millions of Dollars
31. 31
NON-GAAP RECONCILIATIONS
Year 4Q 3Q Year 4Q
Refining
Net Income (Loss) Attributable to Phillips 66 374$ (38)$ 177$ 2,555$ 410$
Pre-tax Adjustments:
Asset dispositions - - - (8) -
Pending claims and settlements (70) - (70) 30 -
Lower-of-cost-or-market inventory adjustments - - - 53 53
Pension settlement expense - - - 53 4
Recognition of deferred logistics commitments 30 - - - -
Railcar lease residual value deficiencies and related costs 40 40 - - -
Certain tax impacts (32) (32) - - -
Tax impact of adjustments 1 (15) 27 (49) (22)
Other tax impacts (66) (50) - (107) (69)
Adjusted Net Income (Loss) Attributable to Phillips 66 277$ (95)$ 134$ 2,527$ 376$
Marketing & Specialties
Net Income (Loss) Attributable to Phillips 66 891$ 190$ 267$ 1,187$ 231$
Pre-tax Adjustments:
Asset dispositions - - - (242) -
Pension settlement expense - - - 11 1
Tax impact of adjustments - - - (4) -
Other tax impacts (50) (50) - (5) (5)
Adjusted Net Income (Loss) Attributable to Phillips 66 841$ 140$ 267$ 947$ 227$
Corporate and Other
Net Income (Loss) Attributable to Phillips 66 (471)$ (124)$ (109)$ (490)$ (126)$
Pre-tax Adjustments:
Pending claims and settlements (2) - (2) - -
Pension settlement expense - - - 7 -
Certain tax impacts - - - (9) (4)
Tax impact of adjustments 1 - 1 (3) -
Other tax impacts 5 5 - 14 13
Adjusted Net Income (Loss) Attributable to Phillips 66 (467)$ (119)$ (110)$ (481)$ (117)$
2016 2015
Millions of Dollars
Except as Indicated
32. 32
NON-GAAP RECONCILIATIONS
Year 4Q 3Q Year 4Q
Midstream - Transportation
Net Income (Loss) Attributable to Phillips 66 246$ 46$ 63$ 288$ 81$
Pre-tax Adjustments:
Tax impact of adjustments - - - - -
Other tax impacts (2) (2) - (3) (3)
Adjusted Net Income (Loss) Attributable to Phillips 66 244$ 44$ 63$ 285$ 78$
Midstream - NGL
Net Income (Loss) Attributable to Phillips 66 (35)$ (10)$ 3$ 49$ 1$
Pre-tax Adjustments:
Pension settlement expense - - - 9 -
Tax impact of adjustments - - - (3) -
Other tax impacts 5 5 - (3) (3)
Adjusted Net Income (Loss) Attributable to Phillips 66 (30)$ (5)$ 3$ 52$ (2)$
Midstream - DCP Midstream
Net Income (Loss) Attributable to Phillips 66 (33)$ (37)$ 9$ (324)$ (159)$
Pre-tax Adjustments:
Asset dispositions - - - (30) -
Pending claims and settlements (45) - - - -
Impairments by equity affiliates 6 - - 366 168
Equity affiliate ownership restructuring 33 33 - - -
Tax impact of adjustments 2 (12) - (122) (64)
Other tax impacts 10 10 - 21 21
Adjusted Net Income (Loss) Attributable to Phillips 66 (27)$ (6)$ 9$ (89)$ (34)$
Millions of Dollars
Except as Indicated
2016 2015
33. 33
NON-GAAP RECONCILIATIONS
Year 4Q 3Q Year 4Q
Refining - Atlantic Basin / Europe
Net Income (Loss) Attributable to Phillips 66 204$ 163$ 5$ 569$ 186$
Pre-tax Adjustments:
Pending claims and settlements - - - 8 -
Pension settlement expense - - - 15 2
Recognition of deferred logistics commitments 30 - - - -
Railcar lease residual value deficiencies and related costs 5 5 - - -
Certain tax impacts (32) (32) - - -
Tax impact of adjustments (13) (2) - (9) (1)
Other tax impacts (52) (36) - (128) (90)
Adjusted Net Income (Loss) Attributable to Phillips 66 142$ 98$ 5$ 455$ 97$
Refining - Gulf Coast
Net Income (Loss) Attributable to Phillips 66 52$ (51)$ 30$ 551$ 128$
Pre-tax Adjustments:
Pending claims and settlements (70) - (70) 10 -
Pension settlement expense - - - 18 2
Railcar lease residual value deficiencies and related costs 16 16 - - -
Tax impact of adjustments 21 (6) 27 (11) (1)
Other tax impacts (10) (10) - 18 18
Adjusted Net Income (Loss) Attributable to Phillips 66 9$ (51)$ (13)$ 586$ 147$
2016 2015
Millions of Dollars
Except as Indicated
34. 34
NON-GAAP RECONCILIATIONS
Year 4Q 3Q Year 4Q
Refining - Central Corridor
Net Income (Loss) Attributable to Phillips 66 234$ 17$ 142$ 857$ 86$
Pre-tax Adjustments:
Pending claims and settlements - - - 7 -
Lower-of-cost-or-market inventory adjustments - - - 53 53
Pension settlement expense - - - 11 -
Railcar lease residual value deficiencies and related costs 11 11 - - -
Tax impact of adjustments (4) (4) - (26) (20)
Other tax impacts (5) (5) - 2 2
Adjusted Net Income (Loss) Attributable to Phillips 66 236$ 19$ 142$ 904$ 121$
Refining - West Coast
Net Income (Loss) Attributable to Phillips 66 (116)$ (167)$ -$ 578$ 10$
Pre-tax Adjustments:
Asset dispositions - - - (8) -
Pending claims and settlements - - - 5 -
Pension settlement expense - - - 9 -
Railcar lease residual value deficiencies and related costs 8 8 - - -
Tax impact of adjustments (3) (3) - (3) -
Other tax impacts 1 1 - 1 1
Adjusted Net Income (Loss) Attributable to Phillips 66 (110)$ (161)$ -$ 582$ 11$
Millions of Dollars
Except as Indicated
2016 2015
35. 35
NON-GAAP RECONCILIATIONS
Year 4Q 3Q Year 4Q
Marketing & Specialties - Marketing & Other
Net Income (Loss) Attributable to Phillips 66 747$ 158$ 228$ 1,004$ 199$
Pre-tax Adjustments:
Asset dispositions - - - (242) -
Pension settlement expense - - - 11 1
Tax impact of adjustments - - - (4) -
Other tax impacts (44) (44) - (2) (2)
Adjusted Net Income (Loss) Attributable to Phillips 66 703$ 114$ 228$ 767$ 198$
Marketing & Specialties - Specialties
Net Income (Loss) Attributable to Phillips 66 144$ 32$ 39$ 183$ 32$
Pre-tax Adjustments:
Tax impact of adjustments - - - - -
Other tax impacts (6) (6) - (3) (3)
Adjusted Net Income (Loss) Attributable to Phillips 66 138$ 26$ 39$ 180$ 29$
Millions of Dollars
Except as Indicated
20152016
36. 36
* Total equity plus total debt
NON-GAAP RECONCILIATIONS
2016 December YTD Phillips 66
Numerator ($MM)
Net Income 1,644$
After-tax interest expense 220$
GAAP ROCE earnings 1,864$
Special Items (57)$
Adjusted ROCE earnings 1,807$
Denominator ($MM)
GAAP average capital employed * 33,344$
2016 GAAP ROCE 6%
2016 Adjusted ROCE 5%
37. 37
NON-GAAP RECONCILIATIONS
* 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 10,138$ 2,411$ 7,727$
Total Equity 23,725$ 1,306$ 22,419$
Debt-to-Capital Ratio 30% 26%
Total Cash & Cash Equivalents 2,711$ 2$ 2,709$
Net-Debt-to-Capital Ratio 24% 18%
Millions of Dollars
2016
4Q
38. 38
NON-GAAP RECONCILIATIONS
Growth Sustaining Total Growth Sustaining Total
Capital expenditures and investments
Midstream 347$ 61$ 408$ 1,267$ 186$ 1,453$
Refining 92$ 230$ 322$ 344$ 805$ 1,149$
Marketing & Specialties 13$ 22$ 35$ 47$ 51$ 98$
Corporate and Other -$ 48$ 48$ 3$ 141$ 144$
Total 452$ 361$ 813$ 1,661$ 1,183$ 2,844$
4Q December YTD
Millions of Dollars Millions of Dollars
2016 2016
39. 39
NON-GAAP RECONCILIATIONS
Midstream Chemicals Refining
Marketing
& Specialties
Corporate
4Q 4Q 4Q 4Q 4Q 4Q Year
Effective Tax Rates
Income before taxes 56$ 171$ (172)$ 201$ (194)$ 62$ 2,191$
Special items 33$ -$ 8$ -$ -$ 41$ 49$
Adjusted income before taxes 89$ 171$ (164)$ 201$ (194)$ 103$ 2,240$
Provision for taxes 21$ 35$ (134)$ 11$ (65)$ (132)$ 547$
Special items (1)$ 12$ 65$ 50$ (5)$ 121$ 106$
Adjusted provision for taxes 20$ 47$ (69)$ 61$ (70)$ (11)$ 653$
GAAP effective tax rate 37.5% 20.5% 77.9% 5.5% 33.5% -212.9% 25.0%
Adjusted effective tax rate 22.5% 27.5% 42.1% 30.3% 36.1% -10.7% 29.2%
Millions of Dollars
2016
Phillips 66
