Slide 1: Investor Update
Investor Update May 2018 NYSE: PSX www.phillips66.com CPChem’s Cedar Bayou Ethane Cracker
Slide 2: Cautionary Statement
Cautionary Statement This presentation contains certain forward-looking statements. 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 t
Slide 3: Diversified Downstream Company
Diversified Downstream Company Marketing & Midstream Chemicals Refining Specialties Integrated Midstream 50% Interest in CPChem Diversified Refining Portfolio Stable, High-return Network Businesses Location Advantaged Investing in Quick Payout Pursue Organic and M&A Chemicals Portfolio Projects Enha
Slide 4: Executing Strategy
Executing Strategy Leading Operating Excellence Growth CPChem USGC Petrochemicals Project Phillips 66 Partners Bakken Pipeline Beaumont Terminal Sweeny Hub Returns Refinery yield and feedstock flexibility projects U.S. marketing reimaging Distributions 27% dividend CAGR since September 2012 $13.9 B
Slide 5: Operating Excellence
Operating Excellence Total Recordable Rates Refining Environmental Metrics (Incidents per 200,000 Hours Worked) (No. of events) Industry Average ’13 ’14 ’15 ’16 ’17 ’18 317 302 279 264 242 61 Phillips 66 CPChem DCP Midstream 2013 2014 2015 2016 2017 1Q 2018 Operating Costs and SG&A Refining Capacity
Slide 6: Environmental, Social, Governance
Environmental, Social, Governance Board engaged in setting company ESG Industry Safety Metrics (Incidents per 200,000 Hours Worked) strategy 6 Extensive ESG engagement 4 2 Record low reportable environmental events 0 Agricul., Food All Construction Prof. Petroleum Petchem. Phillips 66 Investing in f
Slide 7: U.S. Crude Oil and Gas Plant NGL Production
U.S. Crude Oil and Gas Plant NGL Production 8 Bakken 6 8 Rockies 4 6 2 4 - 2 - 8 Midcontinent 6 4 2 8 Permian - 6 4 2 8 Eagle Ford - 6 4 2 - Source: BTU Analytics., April 2018 6
Slide 8: Midstream Macro Environment
Midstream Macro Environment U.S. Crude Oil Export Volume (MMBD) U.S. Clean Product Exports (MMBD) 1.5 2.5 2.0 1.0 1.5 1.0 0.5 0.5 0.0 0.0 2012 2013 2014 2015 2016 2017 2018 2012 2013 2014 2015 2016 2017 2018 U.S. LPG Export Volume (MMBD) Phillips 66 Export Capacity (MMBD) 1.2 2.0 Thousands Propane B
Slide 9: Chemicals Macro Environment
Chemicals Macro Environment U.S. Ethane Demand Global PE Capacity and Demand (MMBD) (MMTA) 2.5 Exports 150 Capacity Base Ethane Petchem & Price-sensitive Demand 2.0 Flexible Feedstock 100 1.5 1.0 50 0.5 0.0 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2012 2013 2014 2015 2016 2017 2018 2
Slide 10: Refining Macro Environment
Refining Macro Environment Global Clean Product Demand (MMBD) Global clean product demand 70 Diesel expected to grow, driven largely by Jet Gasoline diesel 60 50 Global utilization rates expected in 40 low-80s, with U.S. refining in low-90s 30 20 Strong U.S. utilization due to cost and reliability a
Slide 11: Integrated Midstream Network
Integrated Midstream Network 10
Slide 12: Midstream
Midstream Transportation 21,000 miles of US pipeline systems 40 finished product terminals 38 storage locations 19 crude oil terminals 5 LPG terminals and 1 petroleum coke exporting facility NGL and Other 200,000+ BPD fractionation capacity 36,000 BPH LPG export capacity 2,600+ miles of pipelines 12
Slide 13: Midstream Growth
Midstream Growth 2018E Annual Year-End Run-Rate Adjusted EBITDA ($B) Platform for growth 1.8 – 2.0 Focus on NGL value chain 0.6 PSX Expand crude and products PSX export capability PSXP PSXP 1.0 1.1 PSXP 2018E year-end run-rate adjusted EBITDA $1.1 B Assets Online Growth Market Total See appendix for
Slide 14: Phillips 66 Partners
Phillips 66 Partners Funding Midstream growth Distribution Growth (cents/unit) Organic growth opportunities Gray Oak Pipeline (TX) South Texas Gateway Terminal (TX) Sand Hills Pipeline expansions (TX) Bayou Bridge Pipeline extension (LA) 71.4 67.8 64.6 58.6 61.5 Lake Charles Pipeline Project (LA) 50
Slide 15: Gray Oak Pipeline
Gray Oak Pipeline Crude oil transport from West Texas to Gray Oak Pipeline Corpus Christi and Sweeny/Freeport Wink Expected to be in service end of 2019 Orla Origination points Crane Up to 700 MBD based on shipper interest Undergoing second binding open Delivery Connectivity Points Eagle Ford season
Slide 16: DCP Midstream
DCP Midstream DJ Basin Well positioned in low-cost supply basins 0.8 Bcf/d processing Strong growth projects around existing footprint capacity Sand Hills NGL Pipeline expansions to 400 MBD in 1Q 2018, 485 MBD by the end of 2018 DJ Basin gathering and processing infrastructure expansions of Permian
Slide 17: Feedstock Advantaged Chemicals Portfolio
Feedstock Advantaged Chemicals Portfolio Worldwide U.S. Gulf Net Ethylene Coast Capacity: 6,310 kMTA U.S. Net Ethylene Capacity: 5,185 kMTA Middle East Net Ethylene Saudi Qatar Capacity: Arabia 1,125 kMTA As of April 30, 2018 16
Slide 18: Chemicals
Chemicals Olefins and Polyolefins 11,145 kMTA/year North America capacity 2,510 kMTA/year Middle East capacity Specialties, Aromatics and Styrenics 2,710 kMTA/year North America capacity 1,050 kMTA/year Middle East capacity 16 North American facilities 5 Middle East facilities CPChem USGC Polyethyle
Slide 19: Chemicals Outlook
Chemicals Outlook 2018E Average Ethylene Production Cost Curve Middle East ethane and North ($/Tonnes) America NGLs remain positioned at the low end of the cost curve Asia Coal 1,000 M.E. Naphtha N.A. Naphtha Ethylene demand growth outpacing W. Europe Asia Naphtha W. global GDP Europe Naphtha 500 LP
Slide 20: CPChem
CPChem USGC Petrochemicals Project Additional projects in future years 1,000 kMTA polyethylene at Old Ocean, TX 1,500 kMTA ethylene at Cedar Bayou, TX Cash flow improvement expected in 2018 Long-term mid-cycle EBITDA ~ $1.2-1.4 B following heavy investment cycle EBITDA estimate is on a CPChem 100% b
Slide 21: Enhancing Returns in Refining and Marketing
Enhancing Returns in Refining and Marketing 20
Slide 22: Refining and Marketing
Refining and Marketing Refining 13 refineries in U.S. and Europe In 5 U.S. PADDs 2,146 MBD crude capacity 35% heavy, 30% light, 35% medium crude mix Marketing 9,000+ global sites, including 5,700 wholesale outlets 1,400+ re-imaged sites since 2015 Sweeny Refinery, Sweeny, TX 21
Slide 23: Enhancing Refining Returns
Enhancing Refining Returns Improving returns projects PSX Global Clean Product Yield Billings heavy crude project (complete) Ponca City yield flexibility (complete) 84.6% 84.1% 84.4% 84.6% 85.5% 82.6% Wood River FCC modernization (complete) 2013 2014 2015 2016 2017 1Q 2018 Bayway FCC modernization (
Slide 24: IMO 2020 Preparedness
IMO 2020 Preparedness 2017 Distillate Production as % Total Throughput Existing PSX portfolio well positioned for IMO 2020 38.3% 37.8% 37.1% 36.4% 33.0% High distillate production VLO PSX ANDV HFC MPC Industry leading coking capacity Global Coking Capacity (MBD) and Coking as % CDU 20% Industry lead
Slide 25: Canadian Imports
Canadian Imports 2017 Average Canadian Imports (MBD) PSX is the largest U.S. importer of Canadian crude 508 Averaged 508 MBD of 343 imports in 2017 Processed Canadian crude 100 in 9 U.S. refineries 21 16 PSX MPC HFC ANDV VLO Source: E.I.A, May 2018. 24
Slide 26: Stable, High Return Marketing and Specialties Network
Stable, High Return Marketing and Specialties Network Marketing Enhancing U.S. fuels brands Adding 25-30 European sites per year Expanding brand licensing Providing ratable refinery off-take Adjusted EBITDA ($B) Specialties $1.4 B Average Increasing value through integration, optimization, and produ
Slide 27: Capital Structure
Capital Structure Equity and Debt Investment-grade credit ratings 27.4 32% PSX – BBB+ / A3 23.9 23.7 24.3 22.4 30% 22.0 27% 27% PSXP – BBB / Baa3 28% 28% 22% 26% 25% 22% 21% 11.6 10.1 10.1 $6.6 B of total liquidity 8.6 8.9 6.1 ~3.5x Debt/EBITDA target at PSXP 2013 2014 2015 2016 2017 1Q 2018 PSX Equ
Slide 28: Capital Allocation
Capital Allocation Maintain financial strength, strong 2015 – 2017 investment-grade credit rating Fund sustaining capital expenditures Distributions Pay a secure, competitive, and growing Reinvestment dividend 60% reinvestment and 40% shareholder distributions See appendix for footnotes. 27
Slide 29: Capital Expenditures
Capital Expenditures Consolidated Capital Expenditures ($B) 2018E Consolidated – $2.30 B 5.8 Phillips 66 2018E – $1.55 B 3.8 $0.70 B Growth 2.8 $0.85 B Sustaining 2.3 1.8 1.8 Phillips 66 Partners 2018E – $0.75 B 2013 2014 2015 2016 2017 2018E PSX PSXP 2015 consolidated capital expenditures of $5.8 b
Slide 30: Distributions
Distributions Important source of shareholder value Annual Dividend ($/share) Secure, competitive, and growing 3.10 dividend 2.18 2.45 2.73 1.89 1.33 14% increase to $0.80 per quarter 2013 2014 2015 2016 2017 2018E 27% CAGR with eight increases since May 2012 Cumulative Distributions ($B) 20.2 16.4
Slide 31: Creating Value
Creating Value Mid-Cycle Incremental Run-Rate Adjusted EBITDA ~ $1.5 B long-term expected ($B) EBITDA growth from projects coming online 2017-2018 ~ $1.5 Shifted from heavy-investment period to increasing net cash generation Continued investment in higher- valued businesses generating strong returns
Slide 32: Delivering Shareholder Returns
Delivering Shareholder Returns Total Shareholder Return Integrated portfolio PSX +312% 340% 300% Disciplined capital allocation Peers +218% 260% S&P 100 +110% 220% Returns focused 180% 140% Value-added growth 100% 60% Strong balance sheet 20% -20% Compelling investment May-12 May-13 May-14 May-15 Ma
Slide 33: Investor Update (Phillips 66 Partners)
Investor Update May 2018 NYSE: PSXP www.phillips66partners.com
Slide 34: Phillips 66 Partners Ownership Structure
Phillips 66 Partners Ownership Structure (NYSE: PSX) 100% ownership interest PSXP Public Common Phillips 66 Partners GP LLC Unitholders 55% limited partner (PSXP General Partner) interest General Partner Units IDRs 43% limited partner interest 2% general partner interest (NYSE: PSXP) Operating Subsi
Slide 35: Phillips 66 Partners
Phillips 66 Partners Strong alignment with Phillips 66 Highly integrated assets Stable and predictable cash flows Strong growth potential Financial flexibility Sweeny Fractionator, Sweeny, TX Pecan Grove Marine Dock 34
Slide 36: Phillips 66 Partners
Phillips 66 Partners Pecan Grove Marine Dock 35
Slide 37: Financial Growth
Financial Growth Adjusted EBITDA ($MM) Annual performance highlights since 2014 754 58% growth in Earnings 471 75% growth in Adjusted EBITDA 285 141 65% growth in Distributable Cash Flow 33 2013 2014 2015 2016 2017 Earnings ($MM) Distributable Cash Flow ($MM) 572 461 380 301 194 228 116 128 29 30 20
Slide 38: Distribution Growth
Distribution Growth Distribution / Common LP Unit (cents) 67.8 71.4 61.5 64.6 55.8 58.6 50.5 53.1 45.8 48.1 40.0 42.8 34.0 37.0 27.4 30.2 31.7 21.3 22.5 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017
Slide 39: Phillips 66 Partners Capital Expenditures
Phillips 66 Partners Capital Expenditures 2018E Capex of $750 MM PSXP Capital Expenditures ($MM) $665 MM Growth Gray Oak Pipeline South Texas Gateway Terminal 750 Bayou Bridge Pipeline 461 Sand Hills Pipeline 352 Lake Charles Isomerization Unit 205 4 66 Sacagewea Gas Pipeline 2013 2014 2015 2016 201
Slide 40: $750 MM 2018 Organic Growth Plan
$750 MM 2018 Organic Growth Plan Gray Oak Pipeline Transports crude from West Texas to Corpus Christi and Sweeny Freeport, in service by end of 2019 700 MBD and may be expanded up to 1,000 MBD based on shipper interest in second binding open season South Texas Gateway Terminal 3.4 MM barrel storage
Slide 41: PSXP Debt Profile
PSXP Debt Profile $2.9 B Total Debt as of March 31, 2018 Senior Notes Maturity Profile ($MM) $2.9 B Senior Notes, weighted average cost of 3.97%: 5-Year $300 MM notes, 2.646% coupon 10-Year $500 MM notes, 3.605% coupon 10-Year $500 MM notes, 3.550% coupon 625 10-Year $500 MM notes, 3.750% coupon 500
Slide 42: Financial Flexibility
Financial Flexibility Investment-grade credit rating Financial targets: 30% distribution CAGR 2013-2018 3.5x debt / EBITDA 1.1x annual coverage ratio Support Phillips 66 Midstream growth 41
Slide 43: Total Return Since IPO
Total Return Since IPO PSXP +150% 300% Closed $70 MM Closed $1.3 B Alerian MLP Index -23% acquisition acquisition Closed $2.4 B 250% acquisition Closed $775 MM 200% Closed $700 MM acquisition acquisition 150% 100% Closed $340 Closed $1.0 B MM acquisition acquisition Closed $236 MM IPO acquisition 50
Slide 44: Appendix
Appendix Freeport LPG Export Terminal
Slide 45: Corporate Strategy
Corporate Strategy Operating Committed to safety, reliability and environmental stewardship while Excellence protecting shareholder value Reshaping our portfolio by capturing growth opportunities in Midstream Growth and Chemicals Enhancing returns by maximizing earnings from existing assets and Retu
Slide 46: Value Chain
Value Chain O Phillips 66 OpPhillips 66 Partners Ocpchem Oc? midstream GLOBAL MARKETS CRUDE OIL ))- Crude Pipelines, Marine, Shipping and Rail Terminals and Marine Petrochemicals WELLHEAD NGL and y- Natural Gas -))- Piel Fractionation LPG Export Gathering and ipelines and Storage and Marketing LIQUI
Slide 47: West Coast
West Coast PHILLIPS: @ = Terminal (PSX) @ Terminal (PSXP) — Pipeline (PSX) =~ Pipeline (PSXP) A Rail Rack (PSXP) AX Rail Rack (Proposed) Phillips 66 Operated Refinery gil, FERNDALE “y Cu C —__, YELLOWSTONE & %, % BILLINGS PIONEER SAN FRANCISCO _ REFINERY \ LINE 100 LINE 300 y 4 LOS ANGELES REFINERY
Slide 48: Midcontinent
Midcontinent PHILLIPS: @ Terminal (PSX) © Terminal (PSXP) @ Fractionator (PSX) — Pipeline (PSX) —— Pipeline (PSXP) A Rail Rack (PSX) AX Rail Rack (PSXP) (Under Construction) Phillips 66 Operated Refinery Yewlowstone PIONEER 47
Slide 49: Western Gulf
Western Gulf PHILLIPS | | [madd eoe Terminal (PSX) Terminal (PSXP) CPChem Petrochemical Project (Under Construction) Fuel-Grade Coke Processing Unit (PSXP) Underground Storage Facility (PSXP) Fractionator (PSXP) Fractionator (Partially Owned) Pipeline (PSX) Pipeline (PSXP) Pipeline (CPChem Owned; PS
Slide 50: Eastern Gulf
PHILLIPS: Eastern Gulf Terminal (PSX) Terminal (PSXP) Excel Paralubes Base Oil (PSX) Coke Handling Terminal (PSX) Third-Party Terminal Underground Storage Facility Pipeline (PSX) Pipeline (PSXP) ||<de5ceceoe Under Construction Pipeline E CPChem Ethylene/ LOUISIANA CRUDE = Polyethylene Facility , CHA
Slide 51: Atlantic Basin
Atlantic Basin @ Terminal (PSXP) — Pipeline (PSX) A Rail Rack (PSXP) A} Phillips 66 ail Operated Refinery ah } Phillips 66 rit 4 Refinery Interest
Slide 52: Adjusted Free Cash Flow
Adjusted Free Cash Flow 2012–2017 Average Midstream ($B) Chemicals ($B) PSXP Contributions 1.0 (0.3) (0.2) 1.7 1.0 0.8 0.9 Adjusted CFO & PSXP Sustaining Capex Available Cash Flow Adjusted CFO Sustaining Capex Adjusted FCF Contributions Refining ($B) Marketing & Specialties ($B) (0.8) (0.1) 2.7 0.9
Slide 53: 2012–2017 Average Adjusted ROCE
2012–2017 Average Adjusted ROCE 30% M&S Chemicals 27% 15% 20% Refining PSX Total 12% 13% Midstream 7% Corporate 0% (8%) -15% 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 Average Capital Employed ($B) 52
Slide 54: Consolidated Debt and Liquidity
Consolidated Debt and Liquidity Debt Maturity Profile Liquidity ($B) ($B) 5.8 5.8 6.6 5.3 4.3 0.5 0.0 0.6 0.6 0.8 0.3 2018 2019 2020 2021 2022-30 2031-50 Cash Undrawn Revolving Total Bonds Revolving Credit Facilities Term Loans Credit Facilities Committed Liquidity Debt maturity profile and liquidit
Slide 55: Phillips 66 only Debt and Liquidity
Phillips 66 only Debt and Liquidity Debt Maturity Profile Liquidity ($B) ($B) 5.0 5.0 5.7 4.2 2.8 0.5 0.3 0.3 0.5 0.7 2019 2020 2021 2022-30 2031-50 Cash Undrawn Revolving Total Bonds Revolving Credit Facility Term Loans Credit Facility Committed Liquidity Debt maturity profile and liquidity as of M
Slide 56: 2018 Sensitivities
2018 Sensitivities Annual Net Income $MM Midstream - DCP (net to Phillips 66) 10 cents/Gal Increase in NGL price 5 10 cents/MMBtu Increase in Natural Gas price 1 $1/BBL Increase in WTI price 1 Chemicals - CPChem (net to Phillips 66) 1 cent/Lb Increase in Chain Margin (Ethylene, Polyethylene, NAO) 45
Slide 57: Phillips 66 Outlook
Phillips 66 Outlook 2Q 2018 Global Olefins & Polyolefins utilization Mid-90% Refining crude utilization Mid-90% Refining turnaround expenses (pre-tax) $90 MM - $120 MM Corporate & other costs (after-tax) $170 MM - $190 MM 2018 Refining turnaround expenses (pre-tax) $520 MM - $570 MM Corporate & Othe
Slide 58: 2018 Capital Budget
2018 Capital Budget Millions of Dollars Sustaining Growth Capital Capital Capital Program Midstream Phillips 66 $ 133 $ 335 $ 468 Phillips 66 Partners 85 665 750 218 1,000 1,218 Chemicals - - - Refining 541 286 827 Marketing and Specialties 65 75 140 Corporate and Other 116 - 116 Phillips 66 Consoli
Slide 59: Footnotes
Footnotes Slide 3 Total share repurchases and exchanges include the PSPI share exchange in 2014. Dividend CAGR calculated from initial dividend of $0.20 per share in 3Q 2012 to last increase of $0.80 per share in 2Q 2018. Slide 4 Industry averages are from: Phillips 66 – American Fuel & Petrochemica
Slide 60: Footnotes
Footnotes Slide 12 Run-rate adjusted EBITDA for PSXP assets online represents the estimated run-rate view as of December 31, 2017. Run-rate adjusted EBITDA for PSX assets online represents the sum of (i) forecasted year-end 2018 EBITDA of other Midstream assets currently online and (ii) an estimate
Slide 61: Footnotes
Footnotes Slide 29 Annual dividend reflects sum of declared quarterly dividends. 2018 reflects one quarterly dividend of $0.70 and three quarterly dividends of $0.80. Dividend CAGR calculated from initial dividend of $0.20 per share in 3Q 2012 to last increase of $0.80 per share in 2Q 2018. 2014 sha
Slide 62: Footnotes
Footnotes Slide 38 Capital expenditures attributable to the Partnership. Excludes predecessor capital spending Slide 42 $2.4 B transaction closed as of October 6, 2017, includes $625 MM non-recourse Bakken JV debt and $100 MM of Merey Sweeny, LP (MSLP) debt. 1Q 2018 1Q 2018 is as of March 31, 2018,
Slide 63: Non-GAAP Reconciliation (slide 4)
Non-GAAP Reconciliation (slide 4) Millions of Dollars 2013 2014 2015 2016 2017 1Q 2018 Production and operating expenses $ 4,206 $ 4,435 $ 4,294 $ 4,275 $ 4,699 $ 1,246 Selling, general and administrative expenses 1,478 1,663 1,670 1,638 1,695 386 5,684 6,098 5,964 5,913 6,394 1,632 Plus: Sentinel o
Slide 64: Non-GAAP Reconciliation (slide 25)
Non-GAAP Reconciliation (slide 25) Millions of Dollars 2013 2014 2015 2016 2017 Reconciliation of Marketing and Specialties Net Income to Adjusted EBITDA Marketing and Specialties net income 894 1,034 1,187 891 686 Plus: Income tax expense 433 441 465 370 334 Interest revenue - - (2) - - Depreciatio
Slide 65: PSXP Adjusted EBITDA and Distributable Cash Flow Reconciliation to Net Income
PSXP Adjusted EBITDA and Distributable Cash Flow Reconciliation to Net Income (Slide 36) Millions of Dollars 2013 2014 2015 2016 2017 Reconciliation to Net Income Attributable to the Partnership Net income attributable to the Partnership 29 116 194 301 461 Plus: Net income attributable to Predecesso
Slide 66: PSXP Adjusted EBITDA and Distributable Cash Flow Reconciliation to Operating Cash Flow
PSXP Adjusted EBITDA and Distributable Cash Flow Reconciliation to Operating Cash Flow (Slide 36) Millions of Dollars 2013 2014 2015 2016 2017 Reconciliation to Net Cash Provided by Operating Activities Net cash provided by operating activities 199 296 392 492 724 Plus: Net interest expense — 5 34 5
Slide 67: Non-GAAP Reconciliations (Slide 51)
Non-GAAP Reconciliations (Slide 51) Millions of Dollars Average 2012 - 2017 Marketing & FCF Reconcilition Midstream Chemicals Refining Specialties Cash From Operations GAAP 886 355 2,604 908 Less: Change in Non-Cash Working Cap. (3) - 119 (52) Cash From Operations (excluding WC) 883 355 2,723 855 Le
Slide 68: Non-GAAP Reconciliations (Slide 52)
Non-GAAP Reconciliations (Slide 52) Millions of Dollars Average 2012-2017 Phillips 66** Midstream Chemicals Refining M&S Corporate Phillips 66 ROCE Numerator Net Income $ 3,974 317 836 1,824 873 (12) After-tax interest expense 203 - - - - 203 GAAP ROCE earnings 4,177 317 836 1,824 873 191 Special It