PHILLIPS 66 2014 BANK OF AMERICA MERRILL LYNCH REFINING CONFERENCE Clayton Reasor, SVP Investor Relations, Strategy and Corporate Affairs
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 expression s 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 crude oil, NGL, and natural gas prices, and refining 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 crude oil, natural gas, NGL, 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. 2
STRATEGY Operating excellence Growth Returns Distributions High-performing organization 3
OPERATING EXCELLENCE Total Recordable Rates U.S. Refining Emissions (Lb/MBbl) (Incidents per 200,000 Hours Worked) (SOx, NOx, and Particulate Matter) 250 2.5 200 2 150 1.5 2012 2009 2011 2013 2010 100 1 50 0.5 0 0 2002 2004 2006 2008 2010 2012 Phillips 66 CPChem DCP Industry Average See appendix for footnotes. 4
SEGMENT STRATEGY Midstream tream: Growth Chemi emical cals: Growth Build on integrated Transportation system Grow CPChem Utilize Phillips 66 Partners LP as a growth vehicle Advance olefins and polyolefins projects Expand DCP Capitalize on domestic feedstock advantage Grow NGL Operations Refini ning ng: Enhance returns Mark rketi ting ng & S Special alti ties es: Selective growth Process more advantaged crudes Expand European Retail Marketing Expand export capability Grow Lubricants Increase yields Ensure refinery pull-through Decrease costs Optimize portfolio Gulf Coast Fractionator, Mont Belvieu, Texas. 5
HIGH-PERFORMING BUSINESSES Midst dstre ream Chemi emicals als Refinin fining g and nd M&S M&S ROCE ROCE ROCE PSX 26% 17% PSX 15% PSX LYB 23% 15% MPC OKE 8% 21% WLK CVX 8% EPD 7% 19% XOM Chem VLO 8% 6% KMP 6% 9% TSO DOW 2013 Sept Annualized ROCE See appendix for footnotes. 6
MIDSTREAM MACRO ENVIRONMENT U.S. NGL Production (MMBD) Growing domestic NGL production is 6 reshaping U.S. midstream business History Forecast 5 4 Wide range of consultant forecasts 3 2 Infrastructure needed to move new production to market centers 1 2003 2008 2013 2018 2023 EIA Consultant A Consultant B Consultant C Consultant D Consultant E Consultant F 7
CHEMICALS MACRO ENVIRONMENT U.S. Ethane Production and Demand Ethylene Production Cost Curve (MBD) ($/ton) 3,000 1,200 High Production Europe LPG/Naphtha 2,500 Other LPG/Naphtha Asia LPG/Naphtha 900 N.A. LPG/Naphtha M.E. LPG/Naphtha 2,000 Low Production 600 1,500 Demand 300 N.A. Ethane 1,000 M.E. Ethane 0 500 10 40 70 100 130 2000 2005 2010 2015 2020 2025 2030 Cumulative Capacity MM Tons See appendix for footnotes. Cumulative Capacity MM tons 8
REFINING MACRO ENVIRONMENT Maya a - LLS LLS WTI TI - LLS LLS LLS - Brent LLS nt (Nomi mina nal l $/bbl) (Nomi mina nal l $/bbl) (Nomi mina nal l $/bbl) 5 5 5 0 0 0 2009 – 2013 avg: $-11.25/bbl -5 -5 -5 2009 – 2013 avg: 2009 – 2013 avg: $1.18/bbl $-10.04/bbl -10 -10 -10 -15 -15 -15 -20 -20 -20 -25 -25 -25 1Q09 1Q10 1Q11 1Q12 1Q13 1Q09 1Q10 1Q11 1Q12 1Q13 1Q09 1Q10 1Q11 1Q12 1Q13 9
REFINING MACRO ENVIRONMENT Total U.S. Waterborne Crude Imports (MMBD) U.S. tight oil and Canadian Heavy Sweet Heavy Sour production are displacing imports Light/Medium Sweet Light/Medium Sour 10 Most grades of U.S. waterborne 7.4 8 imports have diminished 5.4 6 Expect trend to continue 4 2 0 2010 2013 See appendix for footnotes. 10
MIDSTREAM GROWTH Build on integrated Transportation system Utilize Phillips 66 Partners LP as a growth vehicle Expand DCP Grow NGL Operations 11 MLP. Pecan Grove Crude Terminal, Carlyss, LA.
TRANSPORTATION Crude rail cars Jones Act ships Unit train crude unloading facility projects Clean products export facility projects Terminal butane blending Re-commission idle pipelines New refinery storage 12 Jones Act tanker delivering Eagle Ford crude.
PHILLIPS 66 PARTNERS LP Strategic relationship with PSX Significant growth potential Low cost capital source Financial flexibility $700 MM initial acquisition 13
DCP MIDSTREAM 2015+ Gathering and Processing NGL Pipelines Goliad Gas Plant Sand Hills 200 MMCFD 720 miles, 200 -- 350 MBD Granite Wash Gathering System Expansion Southern Hills 140 MMCFD 800 miles, 175 MBD National Helium Gas Plant 600 MMCFD Front Range Rawhide Gas Plant 435 miles, 150 -- 230 MBD 75 MMCFD O’Connor Gas Plant Texas Express 100 -- 160 MMCFD DCP Legacy New/Growth 580 miles, 280 -- 400 MBD G&P Plant Under construction/development Expansion/Restart Figures shown are 100% DCP. 14
NGL OPERATIONS Sand Hills and Southern Hills startup Butane and butylene storage hub Sweeny fractionator and pipelines Freeport export terminal and de-ethanizer Clemens salt dome storage Sand Hills Pipeline. Metering station. Mont Belvieu, Texas. 15
MIDSTREAM GROWTH Capital Program 2014 2016 2012 2013 2015 2017+ ($B) G&P in Execution 2.0 DCP G&P Expansions 1.5 New pipelines 1.0 Sand Hills and Southern Hills pipelines NGL Ops and Transportation 0.5 Rail Cars 0.0 Rail Offloading Facilities 2010 2011 2012 2013 2014E Butane and Butylene Storage Hub Transportation NGL Operations Sweeny fractionator, storage, DCP Midstream and pipelines Freeport export terminal and de-ethanizer See appendix for footnotes. 16
CHEMICALS GROWTH Grow CPChem Advance olefins and polyolefins projects Capitalize on domestic feedstock advantage 17
CHEMICALS FEEDSTOCK ADVANTAGE Worldwide Ethylene Capacity Portfolio concentrated in (Billion Lbs) 25 advantaged feedstock regions Other 20 U.S. 100% light feedstock based M.E. region N.A. light feedstock 15 Leading Middle East position 10 First mover on U.S. expansions 5 - See appendix for footnotes. CPC CPC '17 DOW XOM LYB WLK Other category is predominantly heavy feedstock capacity. N.A. light feedstock is predominantly ethane, propane, and butane. 18
CHEMICALS ADVANCING OLEFINS AND POLYOLEFINS PROJECTS 1-Hexene Unit Capacity increase 25% from 2013 to 2017 Sweeny Ethylene Furnace Estimated project spending $6.5 -- 7.0 B NAO Expansion Additional EBITDA US Gulf Coast $1.3 -- 1.6 B per year 2017+ Petrochemicals Project Estimated capex and EBITDA figures are 100% CPChem. Estimated EBITDA based on 2012 IHS industry margins. 19 CPChem. Mesaieed, Qatar
CHEMICALS EXECUTING GROWTH 2012 2016 2013 2014 2015 2017+ Capital Program ($B) 1.2 1-Hexene Unit 250 kMTA 0.8 Sweeny Ethylene Furnace 90 kMTA 0.4 USGC Petrochemicals 1,500 kMTA (ethylene), 1,000 kMTA (polyethylene) 0.0 NAO Expansion 2010 2011 2012 2013 2014E ~130 kMTA See appendix for footnotes. 20
REFINING ENHANCE RETURNS Process more advantaged crudes Expand export capability Increase yields Decrease costs Optimize portfolio San Francisco Refinery, Rodeo Facility. San Francisco, California. 21
REFINING DIVERSIFIED PORTFOLIO Western / Pacific 440 MBD Central Region 475 MBD Gulf Coast 733 MBD Atlantic Basin / Europe 588 MBD FD Ireland BI HU WG United BW Kingdom SF WR PC LA Germany BG MI Malaysia AL LC SW ME Refinery system runs ~50% Sweet - 50% Sour crudes; ~65% Light/Medium - 35% Heavy crudes See appendix for footnotes. 22
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