PHILLIPS 66 FOURTH QUARTER 2018 CONFERENCE CALL February 8, 2019 1
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,” “continues,” “intends,” “will,” “would,” “objectives,” “goals,” “projects,” “efforts,” “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, and natural gas prices, and petrochemical and refining 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; the impact of adverse market conditions or other similar risks to those identified herein affecting PSXP , as well as the ability of PSXP to successfully execute its growth plans; 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 New fractionation site and Sweeny Refinery, Old Ocean, Texas 3
OVERVIEW 2018 $MM (unless otherwise noted) Adjusted earnings $ 5,550 11.71 Adjusted EPS 1 Operating cash flow 7,573 Capital expenditures and investments 2,639 6,081 Shareholder distributions 2 Net-debt-to-capital ratio 23% 17% ROCE 3 (1) Dollars per share (2) Shareholder distributions include dividends and share repurchases 4 (3) After-tax
CASH FLOW 2018 $B 1.0 7.9 (0.3) (2.6) (6.1) 3.1 3.0 December 31, CFO Working Debt Capital Shareholder December 31, (excluding Capital Expenditures Distributions 2017 2018 Working & Investments Cash Cash Capital) Balance* Balance* * Includes cash and cash equivalents 5
OVERVIEW 4Q 2018 $MM (unless otherwise noted) Adjusted earnings $ 2,260 4.87 Adjusted EPS 1 Operating cash flow 4,139 Capital expenditures and investments 994 864 Shareholder distributions 2 (1) Dollars per share (2) Shareholder distributions include dividends and share repurchases 6
ADJUSTED EARNINGS 4Q 2018 $MM 22 207 1 745 (157) 97 (111) 2,260 1,456 Midstream Income Tax 3Q 2018 Chemicals Refining Marketing Corporate Noncontrolling 4Q 2018 Adjusted & Specialties & Other Expense Interests Adjusted Earnings Earnings 409 152 2,008 592 (201) (624) (76) 4Q 2018 Adjusted Pre-Tax Income (Loss) 7
MIDSTREAM 4Q 2018 $MM Strong Bakken Pipeline volumes 24 48 25 Increased transportation volumes associated with strong refinery 409 utilization rates 312 DCP Midstream completed Sand Hills Pipeline expansion 3Q 2018 Transportation NGL and Other DCP 4Q 2018 Adjusted Midstream Adjusted Pre-Tax Income Pre-Tax Income 234 122 53 4Q 2018 8
CHEMICALS 4Q 2018 $MM Continued strong cash distributions (67) 95% O&P capacity utilization (35) 263 (9) Seasonally lower sales volumes 152 O&P and SA&S impacted by higher turnaround costs 3Q 2018 Olefins & Specialties, Other 4Q 2018 Polyolefins Aromatics & Adjusted Adjusted Styrenics Pre-Tax Income Pre-Tax Income 158 16 (22) 4Q 2018 9
REFINING 4Q 2018 $MM 99% crude utilization 71 342 247 86% clean product yield 85 2,008 $16.53/BBL realized margin 1,263 $130 MM pre-tax turnaround costs West 3Q 2018 Atlantic Gulf Central 4Q 2018 Basin / Coast Coast Adjusted Corridor Adjusted Europe Pre-Tax Income Pre-Tax Income 301 468 1,188 51 4Q 2018 10
REFINING MARGINS – MARKET VS. REALIZED 4Q 2018 WORLDWIDE REFINING $/BBL 3.57 3.79 0.35 16.53 (0.29) 9.11 Market Configuration Secondary Feedstock Other Realized 3:2:1 Products Margin Avg Market Crude: $65.50/BBL 181% Market Capture 11
MARKETING AND SPECIALTIES 4Q 2018 $MM Captured strong margins in a 205 2 favorable market Re-imaged 466 branded sites 592 385 Refined products exports of 249 MBPD 3Q 2018 Specialties Marketing 4Q 2018 Adjusted & Other Adjusted Pre-Tax Income Pre-Tax Income 528 64 4Q 2018 12
CORPORATE AND OTHER 4Q 2018 $MM 3Q 2018 Net Interest Corporate 4Q 2018 Adjusted Expense Overhead Adjusted Pre-Tax Loss & Other Pre-Tax Loss (201) (223) 13 9 13
OUTLOOK 1Q 2019 Global Olefins & Polyolefins utilization Mid-90% Refining crude utilization Mid -80% Refining turnaround expenses (pre-tax) $140 MM - $170 MM Corporate & Other costs (pre-tax) $210 MM - $240 MM 2019 Refining turnaround expenses (pre-tax) $550 MM - $600 MM Corporate & Other costs (pre-tax) $850 MM - $900 MM Depreciation and amortization $1.4 B Effective income tax rate Low-20% 14
PHILLIPS 66 FOURTH QUARTER 2018 CONFERENCE CALL Questions and Answers 15
PHILLIPS 66 FOURTH QUARTER 2018 CONFERENCE CALL Appendix 16
ESTIMATED SENSITIVITIES 2019 Annual EBITDA $MM Midstream - DCP (net to Phillips 66) 10¢/Gal Increase in NGL price 6 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) 65 Worldwide Refining $1/BBL Increase in Gasoline Margin 350 $1/BBL Increase in Distillate Margin 300 Impacts due to Actual Crude Feedstock Differing from Feedstock Assumed in Market Indicators: $1/BBL Widening WTI / WCS Differential (WTI less WCS) 100 $1/BBL Widening LLS / WTI Differential (LLS less WTI) 70 $1/BBL Widening LLS / Maya Differential (LLS less Maya) 60 $1/BBL Widening WTI / WTS Differential (WTI less WTS) 30 $1/BBL Widening ANS / WTI Differential (ANS less WTI) 25 10¢/MMBtu Increase in Natural Gas price (15) Sensitivities shown above are independent and are only valid within a limited price range 17
CAPITAL STRUCTURE 2016 – 2018 Consolidated PSX Excluding PSXP 32% 31% 31% 30% 31% 29% 29% 28% 27% 28% 27% 26% 26% 27% 25% 25% 24% 23% 23% 22% 20% 18% 17% 14% 27.4 27.2 25.8 25.1 25.0 24.7 24.3 23.7 23.4 22.6 22.4 22.0 11.6 11.4 11.3 11.2 10.1 10.1 8.7 8.4 8.4 8.1 7.7 7.2 1.7 0.8 0.9 0.8 0.7 3.0 3.0 3.1 2.7 2.7 2.9 1.9 2016 2017 1Q 2Q 3Q 4Q 2016 2017 1Q 2Q 3Q 4Q 2018 2018 2018 2018 2018 2018 2018 2018 Equity $B Debt $B Cash & Cash Equivalents $B Debt-to-Capital Net-Debt-to-Capital 18
REFINING MARGINS – MARKET VS. REALIZED 4Q 2018 ATLANTIC BASIN / EUROPE $/BBL Brent: $67.76/BBL Crude Capacity Utilization 159% Market Capture 98% 3.39 1.94 1.48 (2.53) 11.54 7.26 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 2018 GULF COAST $/BBL LLS: $66.55/BBL Crude Capacity Utilization 230% Market Capture 100% 3.36 3.29 0.59 11.84 (0.54) 5.14 Realized Market Configuration Secondary Feedstock Other Margin 3:2:1 Products Market 3:2:1 – LLS / Gasoline 85 CBOB / Diesel 62 10ppm 20
REFINING MARGINS – MARKET VS. REALIZED 4Q 2018 CENTRAL CORRIDOR $/BBL WTI: $59.09/BBL Crude Capacity Utilization 210% Market Capture 106% 6.93 11.26 0.21 30.60 (2.37) 14.57 Feedstock Market Configuration Other Realized Secondary 3:2:1 Margin Products Market 3:2:1 – WTI / Gasoline Unl Sub Octane Group 3 / ULSD Group 3 21
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