Slide 1: Investor Update
Freeport Terminal LPG Facility FREEPORT, TX AUGUST 2019 INVESTOR UPDATE 1 phillips66.com | NYSE: PSX 1
Slide 2: Cautionary Statement
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. Wo
Slide 3: Diversified Downstream Company
DIVERSIFIED DOWNSTREAM COMPANY MIDSTREAM CHEMICALS REFINING MARKETING AND SPECIALTIES Integrated Midstream 50% Interest in CPChem Complex Integrated Stable, High-Return Network Refining System Location Advantaged Businesses Pursue Organic and M&A Chemicals Portfolio Investing in Quick Opportunities
Slide 4: Corporate Strategy
CORPORATE STRATEGY GROWTH RETURNS DISTRIBUTIONS Enhancing our portfolio by Improving returns by maximizing Committed to financial strength, capturing growth opportunities earnings from existing assets disciplined capital allocation, dividend in Midstream and Chemicals and investing capital efficient
Slide 5: Executing the Strategy
EXECUTING THE STRATEGY OPERATING EXCELLENCE Safe and reliable operations Technology driven cost efficiencies Beaumont Terminal NEDERLAND, TX GROWTH Pipelines from key shale basins to the USGC Crude export capability NGL value chain – transportation, fractionation and exports CPChem USGC ethylene and
Slide 6: Operating Excellence
OPERATING EXCELLENCE TOTAL RECORDABLE RATES REFINING TIER 1 PROCESS SAFETY EVENT RATE Incidents per 200,000 Hours Worked Phillips 66 CPChem DCP Midstream 1.15 1.03 0.08 0.08 0.07 Industry Average .86 0.02 0.02 0.02 .83 .79 14 15 16 17 18 1H19 .74 .76 .69 .71 .66 .66 .58 .54 REFINING CRUDE CAPACITY U
Slide 7: Environmental, Social, Governance
ENVIRONMENTAL, SOCIAL, GOVERNANCE INDUSTRY SAFETY METRICS Board engaged in setting company ESG strategy Incidents per 200,000 hours worked 6 Independent lead director 4 Extensive ESG engagement 2 Industry leading safety performance 0 Agricul., Food All Construction Prof. Petroleum Petchem. Phillips
Slide 8: Energy Landscape
ENERGY LANDSCAPE US OIL AND NGL PRODUCTION US OIL, NGL, CLEAN PRODUCT EXPORTS MMBD MMBD 30 15 20 10 10 5 0 0 12 13 14 15 16 17 18 19 20 21 22 23 24 25 12 13 14 15 16 17 18 19 20 21 22 23 Crude NGL Crude NGL Clean Products CRUDE DIFFERENTIALS TO WTI 2019E Average Ethylene Production Cost Curve $/bbl
Slide 9: Midstream
Beaumont Terminal MIDSTREAM phillips66.com | NYSE: PSX 9
Slide 10: Growing Our Integrated Portfolio
GROWING OUR INTEGRATED PORTFOLIO phillips66.com | NYSE: PSX 10
Slide 11: Midstream Portfolio
MIDSTREAM PORTFOLIO TRANSPORTATION NGL AND OTHER DCP MIDSTREAM 21,000 miles of U.S. pipeline systems 200,000+ BPD fractionation capacity 49 natural gas processing facilities 39 product terminals 200,000 BPD LPG export capacity 6.7 BCFD net natural gas processing capacity 20 crude oil terminals 150,0
Slide 12: Midstream
MIDSTREAM Integrated with Refining, Marketing and Chemicals ADJUSTED EBITDA $B 1.9 Capital projects delivering EBITDA growth PSXP integral to Midstream strategy 1.0 1.2 1.1 1.0 Crude and NGL pipelines from key shale basins to the Gulf Coast Export capability from strategic Gulf Coast terminals 15 16
Slide 13: Midstream Growth Projects
MIDSTREAM GROWTH PROJECTS Gray Oak Pipeline Red Oak Pipeline Liberty Pipeline Sweeny fractionators Clemens Caverns C2G Pipeline Beaumont Terminal South Texas Gateway Terminal Bakken Pipeline phillips66.com | NYSE: PSX 13
Slide 14: Midstream Organic Growth
MIDSTREAM ORGANIC GROWTH EXPECTED GROSS CAPITAL OWNERSHIP PSX PROJECT COMPLETION CAPACITY ($MM) (%) Beaumont Terminal expansion phase IV 1Q 2020 2.2 MMB 80 100 Sweeny fractionators 2 and 3 4Q 2020 2 x 150 MBD 1,320 100 Sweeny fractionator 4 2Q 2021 150 MBD 500 100 Red Oak Pipeline 1Q 2021 TBD 2,500
Slide 15: Sweeny Hub Expansion
SWEENY HUB EXPANSION Pasadena Terminal PetChem Market Access to key demand centers including Freeport, Mont Mont Belvieu Belvieu and Corpus Christi Hub C5+ Ethane All Products Sand Hills & Other Y-Grade NGL LPG Secured feedstock supply agreements with firm volume commitments Clemens Storage Sweeny A
Slide 16: Liberty and Red Oak Pipelines
LIBERTY AND RED OAK PIPELINES Liberty Pipeline Crude oil pipeline from the Rockies and Bakken to Cushing, Oklahoma Initial service expected by early 2021 24-inch pipeline 50% PSX ownership Red Oak Pipeline Crude oil pipeline from West Texas and Cushing, Oklahoma, to the Texas Gulf Coast Initial serv
Slide 17: Phillips 66 Partners
PHILLIPS 66 PARTNERS Premier MLP with strong portfolio of organic growth projects ADJUSTED EBITDA $MM Strong alignment with Phillips 66 1,137 Highly integrated assets 754 Stable and predictable cash flows 600 471 Highest distribution growth in industry since 2013 IPO 285 Eliminated IDRs in 3Q19 15 1
Slide 18: DCP Midstream
DCP MIDSTREAM Integrated midstream business with competitive DJ Basin 1.0 BCFD footprint and geographic diversity processing capacity One of the largest U.S. gas processors and NGL producers Mid-Continent 1.8 BCFD Balanced portfolio comprised of 50% Logistics & processing Marketing and 50% Gathering
Slide 19: Chemicals
Lake Charles Refinery Cedar Bayou Ethane Cracker CHEMICALS phillips66.com | NYSE: PSX 19
Slide 20: Feedstock Advantaged Chemicals Portfolio
FEEDSTOCK ADVANTAGED CHEMICALS PORTFOLIO U.S. Gulf Coast U.S. Worldwide Net Ethylene Net Ethylene Capacity: Capacity: 5,410 kMTA 6,535 kMTA Middle East Saudi Qatar Net Ethylene Arabia Capacity: 20 1,125 kMTA phillips66.com | NYSE: PSX 20 As of January 1, 2019. Reflects new Cedar Bayou ethane cracker
Slide 21: CPChem Portfolio
CPCHEM PORTFOLIO Olefins and Polyolefins 11,370 kMTA North America capacity 2,510 kMTA Middle East capacity Specialties, Aromatics and Styrenics 2,255 kMTA North America capacity 1,050 kMTA Middle East capacity 16 North American and 5 Middle East facilities #1 global high-density polyethylene produc
Slide 22: Chemicals
CHEMICALS CPChem has a leading position in olefins and polyolefins with a feedstock advantaged portfolio ADJUSTED EBITDA $B Operating excellence focus Strong free cash flow generation 1.7 1.6 USGC petrochemical assets operating above design capacity 1.3 1.3 0.8 Announced plans to pursue USGC II and
Slide 23: Refining and Marketing
Bayway Refinery REFINING AND MARKETING phillips66.com | NYSE: PSX 23
Slide 24: Enhancing Returns in Refining and Marketing
ENHANCING RETURNS IN REFINING AND MARKETING Central Corridor 515 MBD West Coast Atlantic 364 MBD Basin/Europe 537 MBD 24 Gulf Coast 24 phillips66.com | NYSE: PSX As of January 1, 2019 764 MBD
Slide 25: Refining and Marketing Portfolio
REFINING AND MARKETING PORTFOLIO Refining 13 refineries in U.S. and Europe In all 5 U.S. PADDs 2,180 MBD crude capacity 33% heavy, 33% medium, 33% light crude Marketing 9,000+ global sites, including 5,600 wholesale outlets ~3,300 re-imaged sites1 Sweeny Refinery Sweeny, TX 25 phillips66.com | NYSE:
Slide 26: Refining
REFINING Complex, integrated refining system focused on safe and ADJUSTED EBITDA $B reliable operations Infrastructure network enables strong market capture; access to advantaged inland crude feedstocks 5.7 Cost and capital discipline; robust free cash flow 4.8 2.7 Investing in high-return capital p
Slide 27: Refining Portfolio Competitiveness
REFINING PORTFOLIO COMPETITIVENESS DISTILLATE PRODUCTION High distillate yield % TOTAL THROUGHPUT Industry leading coking capacity and 38.2% 37.9% 37.0% 34.0% 32.0% heavy crude processing capability PSX Comparison is to independent refining peer group: HFC, MPC, PBF, VLO. Source: company disclosures
Slide 28: Refining Returns
REFINING RETURNS Bayway Refinery FCC modernization (2Q18) Wood River Refinery FCC modernization (2Q18) Lake Charles Refinery crude flexibility (4Q18) Sweeny FCC upgrade (2Q20) Sweeny Refinery SWEENY, TX phillips66.com | NYSE: PSX 28
Slide 29: Refining Return Projects
REFINING RETURN PROJECTS Borger diesel recovery (3Q19) Adds 25 MBD distillate production Humber diesel yield improvement (3Q19) San Francisco coker feed segregation (4Q19) Reduces HSFO production by 35 MBD Wood River crude unit restart (3Q19) Ferndale DHT maximization (4Q19) Capital ~$120 MM Wood Ri
Slide 30: Renewable Diesel
RENEWABLE DIESEL Leverage existing infrastructure, supply network and capabilities Co-processing used cooking oil at Humber Refinery Partnership with Ryze Renewables Renewable diesel plant at Ferndale Refinery with Renewable Energy Group Renewable diesel production at San Francisco Refinery 650 mill
Slide 31: Marketing and Specialties
MARKETING AND SPECIALTIES High-return, low capital intensity business; optimize ADJUSTED EBITDA $B placement of Refining production $1.4 B Average Enhancing U.S. fuels brands; growing and re-imaging European sites 1.5 1.6 1.4 1.2 Pursuing renewable fuels opportunities 0.6 Lubricants increasing value
Slide 32: Earnings and Capital Structure
EARNINGS AND CAPITAL STRUCTURE ADJUSTED EBITDA EQUITY AND DEBT $B 30% 30% 27% 27% 29% 10.1 25% 26% 25% 25% 8.6 22% 27.4 27.2 27.3 5.9 4.7 3.4 23.9 23.7 15 16 17 18 1H19 10.1 11.2 11.4 10.1 ADJUSTED RETURN ON CAPITAL EMPLOYED 8.9 % AFTER-TAX 15 16 17 18 1H19 PSX Equity $B PSX Debt $B 14 16 PSX Noncon
Slide 33: Disciplined Capital Allocation
DISCIPLINED CAPITAL ALLOCATION Fund sustaining capital to maintain asset integrity SOURCES AND USES OF CASH $B ~1 Committed to a secure, competitive and growing dividend ~1.6 Investing in growth projects with attractive returns 6.5 5.5 1.5 - 2.5 Intrinsic value approach to share repurchases 1.5 - 2.
Slide 34: Distributions
DISTRIBUTIONS ANNUAL DIVIDEND $/share Creates shareholder value 3.10 3.50 2.45 2.73 Secure, competitive and growing dividend 2.18 12.5% increase in 2Q19 to $0.90 per quarter 15 16 17 18 19 25% CAGR with nine increases since May 2012 TOTAL DISTRIBUTIONS $B Committed to share repurchases 6.1 Repurchas
Slide 35: Capital Expenditures
CAPITAL EXPENDITURES 2019B Consolidated - $2.9 B CAPITAL EXPENDITURES AND INVESTMENTS $B Phillips 66 2019B - $2.3 B $1.4 B Growth $0.9 B Sustaining 5.8 Phillips 66 Partners 2019B - $0.6 B Major JV’s (CPChem, DCP and WRB) are self-funded 2019B CONSOLIDATED CAPITAL PROGRAM 2.8 2.9 $B 2.6 1.8 15 16 17
Slide 36: Financial Flexibility
FINANCIAL FLEXIBILITY SOURCES AND USES OF CASH $B ~1 Maintain financial strength, strong investment- ~1.6 grade credit rating 6.5 5.5 1.5 - 2.5 Pay secure, competitive, and growing dividend 1.5 - 2.5 Mid-Cycle Sust. FCF Dividends Growth Share CFO Capex Capex Repurch. 60% reinvestment and 40% shareho
Slide 37: Total Shareholder Return
TOTAL SHAREHOLDER RETURN 340% PSX +280% 300% Peers +143% 260% S&P 100 +143% 220% 180% 140% 100% 60% 20% -20% May-12 May-13 May-14 May-15 May-16 May-17 May-18 Jul-19 May-19 phillips66.com | NYSE: PSX Vacuum Tower, Billings 37 See appendix for footnotes Refinery, Billings, MT
Slide 38: Investor Update: Refining and Marketing
Lake Charles Refinery AUGUST 2019 INVESTOR REFINING AND MARKETING UPDATE phillips66.com | NYSE: phillips66partners.com PSX PSXP I NYSE: 38
Slide 39: Phillips 66 Partners Ownership Structure
PHILLIPS 66 PARTNERS OWNERSHIP STRUCTURE PSXP Public Non-economic general Common partner interest and 75% Unitholders limited partner interest 25% limited partner interest (NYSE: PSXP) Operating Subsidiaries Joint Ventures 39 phillips66.com | NYSE: phillips66partners.com PSX PSXP I NYSE: 39 As of Au
Slide 40: Phillips 66 Partners
PHILLIPS 66 PARTNERS Premier MLP with strong portfolio of organic growth projects Strong alignment with Phillips 66 Highly integrated assets Maintaining stable and predictable cash flows Competitive and growing distribution Scale and financial strength enable further organic growth 40 phillips66.com
Slide 41: Phillips 66 Partners
PHILLIPS 66 PARTNERS 41 phillips66.com | NYSE: phillips66partners.com PSX PSXP I NYSE: 41
Slide 42: Highlights
HIGHLIGHTS Operated safely and reliably ADJUSTED EBITDA ($MM) Reached $1.3 B run-rate adjusted EBITDA in 2Q19 1,137 754 Focused on organic growth with strong financial position 600 471 Progressing construction Gray Oak Pipeline project 285 Eliminated IDRs on August 1, 2019 15 16 17 18 1H19 EARNINGS
Slide 43: Distribution Growth
DISTRIBUTION GROWTH DISTRIBUTION / COMMON LP UNIT (CENTS) 83.5 84.5 85.5 75.2 79.2 67.8 71.4 61.5 64.6 55.8 58.6 50.5 53.1 45.8 48.1 40.0 42.8 34.0 37.0 27.4 30.2 31.7 22.5 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Coverage Rat
Slide 44: PSXP Organic Growth
PSXP ORGANIC GROWTH EXPECTED GROSS CAPITAL OWNERSHIP PSXP PROJECT COMPLETION CAPACITY ($MM) (%) Lake Charles products pipeline Completed 50 MBD 25 100 Lake Charles isomerization unit Completed 25 MBD 200 99 Gray Oak Pipeline 4Q 2019 900 MBD 2,700 42.25 Sweeny to Pasadena products expansion1 2Q 2020
Slide 45: PSXP Gray Oak Pipeline / South Texas Gateway Terminal
PSXP GRAY OAK PIPELINE / SOUTH TEXAS GATEWAY TERMINAL Gray Oak Pipeline Crude oil pipeline from the Permian and Eagle Ford to the Texas Gulf Coast Expected in service 4Q 2019 900 MBD crude capacity 42.25% PSXP ownership South Texas Gateway Terminal Two deepwater docks with up to 800,000 BPD throughp
Slide 46: PSXP Debt Profile
PSXP DEBT PROFILE DEBT MATURITY PROFILE $B PSXP Revolving Credit Facility PSXP Term Loan 0.4 PSXP Bonds 0.8 0.6 0.5 0.5 0.5 0.5 0.3 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 SENIOR NOTES $MM $3.3 B Total Debt as of June 30, 2019 YEAR DUE PRINCIPAL COUPON $2.9 B Senio
Slide 47: Financial Flexibility / Total Return Since IPO
FINANCIAL FLEXIBILITY TOTAL RETURN SINCE IPO Investment-grade credit rating 300% PSXP +188% BBB (S&P), Baa3 (Moody’s) Alerian MLP Index (18%) 250% Fund 2019 capital program with cash, debt, and selective use of ATM 200% Long term targets 150% Distribution coverage over 1.2x 100% 3.5x debt / EBITDA 5
Slide 48: Safety. Honor. Commitment.
S A F E T Y. H O N O R . C O M M I T M E N T. Freeport Terminal LPG Facility FREEPORT, TX phillips66.com | NYSE: PSX 48
Slide 49: 2019 Sensitivities
2019 SENSITIVITIES Annual EBITDA ($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 Re
Slide 50: Value Chain
VALUE CHAIN 50 phillips66.com | NYSE: PSX 50
Slide 51: West Coast
WEST COAST 51 phillips66.com | NYSE: PSX 51
Slide 52: Gulf Coast
GULF COAST 52 phillips66.com | NYSE: PSX 52
Slide 53: Midcontinent
MIDCONTINENT 53 phillips66.com | NYSE: PSX 53
Slide 54: Atlantic Basin
ATLANTIC BASIN 54 phillips66.com | NYSE: PSX 54
Slide 55: Consolidated Debt and Liquidity
CONSOLIDATED DEBT AND LIQUIDITY DEBT MATURITY PROFILE $B PSX Senior Notes PSXP Senior Notes PSX Term Loan PSXP Term Loan PSXP Revolving Credit Facility PSX Revolving Credit Facility 1.2 5.0 2.0 0.5 1.5 1.7 0.8 0.5 0.5 0.8 1.0 0.5 0.5 0.6 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 20
Slide 56: Phillips Outlook
PHILLIPS 66 OUTLOOK 3Q 2019 Global Olefins & Polyolefins utilization Mid-90% Refining crude utilization Mid-90% Refining turnaround expenses (pre-tax) $150 MM - $180 MM Corporate & other costs (pre-tax) $210 MM - $240 MM 2019 Refining turnaround expenses (pre-tax) $550 MM - $600 MM Corporate & Other
Slide 57: 2019 Capital Budget
2019 CAPITAL BUDGET Millions of Dollars Sustaining Growth Capital Capital Capital Program Adjusted Capital Program Midstream* $ 185 847 1,032 Chemicals - - - Refining 512 411 923 Marketing and Specialties 64 97 161 Corporate and Other 177 - 177 Phillips 66* 938 1,355 2,293 Phillips 66 Partners** 78
Slide 58: Coking Capacity
COKING CAPACITY 2,695 TOTAL U.S. COKING CAPACITY MBD 346 335 304 281 177 176 163 150 146 131 90 65 54 51 41 39 36 36 29 23 18 6 5,483 TOTAL GLOBAL COKING CAPACITY MBD 465 420 335 304 281 263 252 237 198 191 177 155 150 146 135 125 115 98 92 90 84 79 72 65 61 56 56 55 54 51 50 48 44 43 41 41 40 39 39
Slide 59: Footnotes
FOOTNOTES General Information disclosed is as of December 31 unless otherwise noted. “Mid-Cycle CFO” is defined as 2014-2017 average operating cash flow plus run-rate operating cash flow from growth projects coming online in 2017 and 2018 and estimated benefit from 2017 tax rate change. 18 18 is as
Slide 60: Footnotes
FOOTNOTES Slide 6 Industry averages are from: Phillips 66 – American Fuel & Petrochemical Manufacturers (AFPM) refining data, Chevron Phillips Chemical Company LLC (CPChem) – American Chemistry Council (ACC), DCP Midstream, LLC (DCP Midstream) – Gas Processors Association (GPA). 2019 TRR for Phillip
Slide 61: Footnotes
FOOTNOTES Slide 34 Annual dividend reflects sum of declared quarterly dividends. 2019 reflects one quarterly dividend of $0.80 and three quarterly dividends of $0.90. Dividend CAGR calculated from initial dividend of $0.20 per share in 3Q 2012 to last increase of $0.90 per share in 2Q 2019. 2014 sha
Slide 62: Non-GAAP Reconciliation (Slide 12)
NON-GAAP RECONCILIATION (SLIDE 12) Millions of Dollars 2015 2016 2017 2018 1H 2019 Reconciliation of Midstream Pre-Tax Income to Adjusted EBITDA Midstream pre-tax income $ 147 402 638 1,181 739 Plus: Interest revenue — — (1) — — Depreciation and amortization 127 215 299 320 148 Midstream EBITDA 274
Slide 63: Non-GAAP Reconciliation (Slide 12)
NON-GAAP RECONCILIATION (SLIDE 12) Millions of Dollars 2015 2016 2017 2018 1H 2019 Reconciliation of DCP Midstream Pre-Tax Income (Loss) to Adjusted EBITDA Midstream pre-tax income (loss) $ (463) (34) 76 106 58 Plus: None — — — — — DCP Midstream EBITDA (463) (34) 76 106 58 Special Item Adjustments (
Slide 64: Non-GAAP Reconciliation (Slides 12, 17, 22, 26, 31, 33, 35 and 36)
NON-GAAP RECONCILIATION (SLIDES 12, 17, 22, 26, 31, 33, 35 and 36) Millions of Dollars Capital Expenditures and Investments Midstream Refining Marketing Corporate Consolidated Chemicals* PSXP** December 31, 2018 Growth $ 1,360 267 71 6 1,704 131 710 Sustaining 188 559 54 134 935 208 66 Total 1,548 8
Slide 65: Non-GAAP Reconciliation (Slides 17 and 42)
NON-GAAP RECONCILIATION (SLIDES 17 and 42) Millions of Dollars 2015 2016 2017 2018 1H 2019 Reconciliation to Net Income Attributable to the Partnership Net income attributable to the Partnership $ 194 301 461 796 431 Plus: Net income attributable to Predecessors 112 107 63 — — Net Income 306 408 524
Slide 66: Non-GAAP Reconciliation (Slides 17 and 42)
NON-GAAP RECONCILIATION (SLIDES 17 and 42) Millions of Dollars 2015 2016 2017 2018 1H 2019 Reconciliation to Net Cash Provided by Operating Activities Net Cash Provided by Operating Activities $ 392 492 724 892 481 Plus: Net interest expense 34 52 99 114 53 Income tax expense — 2 4 4 2 Changes in wo
Slide 67: Non-GAAP Reconciliation (Slide 22)
NON-GAAP RECONCILIATION (SLIDE 22) Millions of Dollars 2015 2016 2017 2018 1H 2019 Reconciliation of Chemicals Pre-Tax Income to Adjusted EBITDA Chemicals pre-tax income $ 1,315 839 716 1,025 502 Plus: None — — — — — Chemicals EBITDA 1,315 839 716 1,025 502 Special Item Adjustments (pre-tax): Impair
Slide 68: Non-GAAP Reconciliation (Slide 26)
NON-GAAP RECONCILIATION (SLIDE 26) Millions of Dollars 2015 2016 2017 2018 1H 2019 Reconciliation of Refining Pre-Tax Income to Adjusted EBITDA Refining pre-tax income $ 3,659 436 2,076 4,535 785 Plus: Depreciation and amortization 738 769 821 840 426 Refining EBITDA 4,397 1,205 2,897 5,375 1,211 Sp
Slide 69: Non-GAAP Reconciliation (Slide 31)
NON-GAAP RECONCILIATION (SLIDE 31) Millions of Dollars 2015 2016 2017 2018 1H 2019 Reconciliation of Marketing and Specialties Pre-Tax Income to Adjusted EBITDA Marketing and Specialties pre-tax income $ 1,652 1,261 1,020 1,557 558 Plus: Interest revenue (2) — — — — Depreciation and amortization 97
Slide 70: Non-GAAP Reconciliation (Slide 32)
NON-GAAP RECONCILIATION (SLIDE 32) Millions of Dollars 2015 2016 2017 2018 1H 2019 Phillips 66 ROCE Numerator Net income $ 4,280 1,644 5,248 5,873 1,774 After-tax interest expense 201 220 285 398 185 GAAP ROCE earnings 4,481 1,864 5,533 6,271 1,959 Special items (34) (57) (2,837) (51) (62) Adjusted
Slide 71: Non-GAAP Reconciliation (Slide 32)
NON-GAAP RECONCILIATION (SLIDE 32) Millions of Dollars Except as Indicated Debt-to-Capital Debt-to-Capital Ratio Total Debt Total Equity Ratio June 30, 2019 Phillips 66 Consolidated $ 11,439 27,306 30% PSXP* 3,324 2,521 Phillips 66 Excluding PSXP $ 8,115 24,785 25% December 31, 2018 Phillips 66 Cons
Slide 72: Non-GAAP Reconciliation (Slide 32)
NON-GAAP RECONCILIATION (SLIDE 32) Millions of Dollars 2015 2016 2017 2018 1H 2019 Reconciliation of Phillips 66 Net Income to Adjusted EBITDA Phillips 66 net income $ 4,280 1,644 5,248 5,873 1,774 Plus: Income tax expense (benefit) 1,764 547 (1,693) 1,572 395 Net interest expense 283 321 407 459 21