Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): January 29, 2015

Phillips 66

(Exact name of registrant as specified in its charter)



Delaware	001-35349	45-3779385
(State or other jurisdiction of	(Commission	(I.R.S. Employer
incorporation)	File Number)	Identification No.)

3010 Briarpark Drive, Houston, Texas 77042

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (281) 293-6600

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On January 29, 2015, Phillips 66 issued a press release announcing the company's financial and operating results for the quarter ended December 31, 2014. A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference. Additional financial and operating information about the quarter is furnished as Exhibit 99.2 hereto and incorporated herein by reference.

The information in this report and the exhibits hereto shall not be treated as filed for purposes of the Securities Exchange Act of 1934, as amended.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits



99.1	—	Press release issued by Phillips 66 on January 29, 2015.
99.2	—	Supplemental financial and operating information.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



	PHILLIPS 66

By:	/s/ Chukwuemeka A. Oyolu
	Chukwuemeka A. Oyolu Vice President and Controller

January 29, 2015

EXHIBIT INDEX



Exhibit
No.	Description



99.1	Press release issued by Phillips 66 on January 29, 2015.



99.2	Supplemental financial and operating information.



				Exhibit 99.1

Phillips 66 Reports Fourth-Quarter Earnings of $1.1 Billion

or $2.05 Per Share

Adjusted earnings of $913 million or $1.63 per share

Highlights

Fourth Quarter


•	Advanced Midstream growth plans with formation of transportation joint ventures


•	Port Arthur ethylene plant resumed operations


•	Solid operating performance enabled 89 percent market capture in Refining


•	Strong earnings contribution from Marketing and Specialties

Full-Year 2014


•	Record Chemicals earnings


•	Earnings of $4.8 billion; adjusted earnings of $3.8 billion


•	Return on capital employed (ROCE) of 17 percent, and adjusted ROCE of 14 percent


•	Returned $4.7 billion of capital to shareholders

HOUSTON, Jan. 29, 2015 — Phillips 66 (NYSE: PSX), an energy manufacturing and logistics company, announces fourth-quarter earnings of $1.1 billion, compared with earnings of $1.2 billion in the third quarter of 2014. Adjusted earnings, excluding special items of $234 million, were $913 million in the fourth quarter, compared with adjusted earnings of $1.1 billion in the third quarter of 2014.

"Our solid fourth quarter was the result of our diversified asset portfolio and operational excellence, even as commodity prices declined," said Greg Garland, chairman and CEO of Phillips 66. "During the quarter, we generated more than $1 billion in cash flow and returned over $800 million of capital to shareholders, while continuing to fund value-enhancing growth projects."

"We are making prudent capital allocation decisions to drive Phillips 66's continued success, and the recently announced 2015 capital budget underscores our commitment to value creation. Investments in Midstream and Chemicals should result in more consistent earnings and a higher valuation. Our strong balance sheet and financial flexibility allow us to maintain a disciplined approach to reinvestment and distributions throughout the commodity price cycle," said Garland.

Page 1

Phillips 66 Reports Fourth-Quarter Earnings of $1.1 Billion (Adjusted Earnings of $913 Million)

Midstream



	Millions of Dollars
	2014 Earnings				2014 Adjusted Earnings
	Third Quarter		Fourth Quarter		Third Quarter	Fourth Quarter
Transportation	$	58	53		58	53
DCP Midstream	31		(12	)	31	(11	)
NGL	26		55		26	55
Midstream	$	115	96		115	97

Midstream adjusted earnings were $97 million in the fourth quarter, compared with earnings of $115 million in the third quarter of 2014.

Phillips 66’s Transportation business generated earnings of $53 million during the fourth quarter. The $5 million decrease was primarily due to the write-off of a deferred tax asset, partially offset by improved throughput volumes in the fourth quarter. Phillips 66 Partners LP contributed $26 million to Transportation's fourth-quarter earnings, an increase of $4 million mainly due to increased throughput volumes and new fees from the recently acquired Bayway and Ferndale rail racks.

During the fourth quarter, the company’s equity investment in DCP Midstream, LLC had an adjusted loss of $11 million. The $42 million decrease was largely driven by a decline in natural gas liquids and crude prices.

Earnings from the NGL business were $55 million during the quarter. The $29 million increase was related to improved margins on seasonal propane and butane storage activities, partially offset by Midstream project development costs.

Chemicals



	Millions of Dollars
	2014 Earnings					2014 Adjusted Earnings
	Third Quarter			Fourth Quarter		Third Quarter		Fourth Quarter
Olefins and Polyolefins (O&P)	$	254		247		259		248
Specialties, Aromatics and Styrenics (SA&S)	(18		)	25		46		27
Other	(6		)	(5	)	(6	)	(5	)
Chemicals	$	230		267		299		270

The Chemicals segment reflects Phillips 66's equity investment in Chevron Phillips Chemical Company LLC (CPChem). Fourth-quarter Chemicals adjusted earnings were $270 million, compared with $299 million in the third quarter of 2014.

Page 2

Phillips 66 Reports Fourth-Quarter Earnings of $1.1 Billion (Adjusted Earnings of $913 Million)

During the fourth quarter, CPChem's O&P business contributed $248 million to Phillips 66's Chemicals adjusted earnings, a decrease of $11 million from the prior quarter. Domestic O&P chain margins were in line with the third quarter, despite the lower commodity price environment. The decrease in adjusted earnings was mainly due to higher planned maintenance costs, as the operational impacts related to CPChem's Port Arthur ethylene plant outage were offset by business interruption insurance recoveries. CPChem's Port Arthur plant resumed normal operations in November. O&P's global utilization for the quarter and year was 83 percent and 88 percent, respectively.

CPChem's SA&S business contributed $27 million to fourth-quarter adjusted earnings. The $19 million decrease was primarily due to lower realized margins and volumes from CPChem's Middle East joint ventures.

Refining



	Millions of Dollars
	2014 Earnings			2014 Adjusted Earnings
	Third Quarter		Fourth Quarter	Third Quarter	Fourth Quarter
Refining	$	558	517	558	322

Refining recorded fourth-quarter adjusted earnings of $322 million, excluding the impacts of an asset sale and impairments. The $236 million decrease was driven by lower realized margins, partially offset by improved volumes. Margins were lower due to weaker gasoline crack spreads and narrowing crude differentials, partially offset by improved secondary product margins and higher distillate crack spreads.

During the quarter, 95 percent of the company’s U.S. crude slate was advantaged, in line with the third quarter of 2014. Refining processed a record 375,000 barrels per day (BPD) of tight oil, 39,000 BPD more than the previous high. Phillips 66’s refining utilization and clean product yield were 95 percent and 84 percent, respectively, in the fourth quarter of 2014.

Marketing and Specialties



	Millions of Dollars
	2014 Earnings			2014 Adjusted Earnings
	Third Quarter		Fourth Quarter	Third Quarter	Fourth Quarter
Marketing and Other	$	325	299	216	256
Specialties	43		68	43	68
Marketing and Specialties	$	368	367	259	324

Fourth-quarter adjusted earnings for M&S were $324 million, compared with $259 million in the third quarter of 2014.

Marketing and Other adjusted earnings were $256 million in the fourth quarter, an increase of $40 million from the prior quarter. While the increase was mostly related to the reinstatement of biodiesel blending tax credits, the business continued to benefit from strong margins. Fourth-quarter refined product exports were 143,000 BPD, an increase of 14,000 BPD from the third quarter of 2014.

Page 3

Phillips 66 Reports Fourth-Quarter Earnings of $1.1 Billion (Adjusted Earnings of $913 Million)

Phillips 66’s Specialties businesses reported earnings of $68 million during the fourth quarter. The $25 million increase was primarily due to improved lubricant and base oil margins.

Corporate and Other

Corporate and Other costs were $100 million after-tax in the fourth quarter, compared with $91 million in the third quarter of 2014. The increased costs were mostly due to higher interest expense related to debt issued during the quarter.

Financial Position, Liquidity and Return of Capital

During the quarter, Phillips 66 generated $872 million of cash from operations. Excluding working capital changes, operating cash flow was $1.1 billion. The company received $581 million in proceeds from asset dispositions and funded $1.1 billion in capital expenditures and investments.

Phillips 66 issued $2.5 billion of notes to support growth initiatives and repay debt maturing in 2015. The company returned $807 million of capital to shareholders, paying dividends of $275 million and repurchasing seven million shares of common stock totaling $532 million.

Full-Year Financial Results

Phillips 66's full-year 2014 earnings were $4.8 billion or $8.33 per share. This compares with $3.7 billion or $6.02 per share in 2013. Full-year adjusted earnings were $3.8 billion or $6.62 per share in 2014, compared with $3.6 billion or $5.89 per share in 2013.

The company generated $3.5 billion in cash from operations during 2014. Excluding changes in working capital, operating cash flow was $4.5 billion. In addition, the company received $1.2 billion in proceeds from asset dispositions, primarily reflecting the sale of the company's interest in the Malaysian Refining Company and a special distribution from WRB Refining. Phillips 66 funded $3.8 billion in capital expenditures and investments.

Phillips 66 returned $4.7 billion of capital to shareholders in 2014. The company paid $1.1 billion in dividends and repurchased 29.1 million shares of common stock totaling $2.3 billion. The exchange of the company's flow improver business for 17.4 million shares returned $1.35 billion of capital. Since August 2012, the company has repurchased 73.2 million shares for $4.9 billion, as part of $7 billion in share repurchase authorizations. At the end of 2014, Phillips 66 had 546 million shares outstanding.

Phillips 66 ended the year with $8.7 billion of debt and $5.2 billion of cash and cash equivalents. The company’s debt-to-capital ratio was 28 percent and net-debt-to-capital ratio was 14 percent.

Strategic Update

In Midstream, the 100,000 BPD Sweeny Fractionator One is more than 50 percent complete, with startup planned in the second half of 2015. Construction is also progressing on the 4.4 million-barrel-per-month Freeport LPG Export Terminal, with completion expected in the second half of 2016. Both projects remain on budget and on schedule.

Phillips 66 is investing in transportation infrastructure to move crude oil from the Bakken/Three Forks production area of North Dakota to market centers throughout the United States. During 2014, the company received 1,200 additional rail cars and expects to have 3,700 cars dedicated to crude oil service in early 2015. The company also announced two pipeline joint ventures, the Dakota Access Pipeline and Energy Transfer Crude Oil Pipeline.

Page 4

Phillips 66 Reports Fourth-Quarter Earnings of $1.1 Billion (Adjusted Earnings of $913 Million)

In addition, Phillips 66 Partners formed two joint ventures to develop the Palermo Rail Terminal and the Sacagawea Pipeline in North Dakota. The Palermo Rail Terminal is a crude oil rail-loading facility currently under construction. The terminal is anticipated to include a pipeline connection to the Sacagawea Pipeline, allowing increased outbound capacity and market access for oil producers and marketers in the Bakken region.

In Chemicals, CPChem is investing in domestic growth projects to capture the benefits of low-cost petrochemical feedstocks on the U.S. Gulf Coast (USGC). During the quarter, CPChem completed the expansion of ethylene production at its Sweeny facility with the addition of a tenth furnace, which is expected to increase its annual production by 200 million pounds. An expansion project is underway to increase CPChem's normal alpha olefin capacity by 220 million pounds per year at its Cedar Bayou facility, with estimated completion in mid-2015. Lastly, construction continued on its world-scale USGC Petrochemicals Project with startup anticipated in mid-2017.

Later today, Phillips 66 Chairman and Chief Executive Officer Greg Garland, President Tim Taylor, and Executive Vice President and Chief Financial Officer Greg Maxwell will host a webcast at 11 a.m. EST to discuss the company’s fourth-quarter and full-year performance and provide an update on strategic growth projects. To listen to the conference call and view related presentation materials, go to www.phillips66.com/investors and click on "Events & Presentations." For detailed supplemental information, go to www.phillips66.com/supplemental.




Earnings
	Millions of Dollars
	2014							2013
	Third Quarter			Fourth Quarter		Twelve Months		Fourth Quarter		Twelve Months
Midstream	$	115		96		507		121		469
Chemicals	230			267		1,137		261		986
Refining	558			517		1,771		418		1,747
Marketing and Specialties	368			367		1,034		105		894
Corporate and Other	(91		)	(100	)	(393	)	(97	)	(431	)
Discontinued Operations	—			—		706		18		61
Phillips 66	$	1,180		1,147		4,762		826		3,726

Adjusted Earnings
	Millions of Dollars
	2014							2013
	Third Quarter			Fourth Quarter		Twelve Months		Fourth Quarter		Twelve Months
Midstream	$	115		97		508		121		469
Chemicals	299			270		1,209		261		986
Refining	558			322		1,576		418		1,734
Marketing and Specialties	259			324		882		105		885
Corporate and Other	(91		)	(100	)	(393	)	(97	)	(431	)
Phillips 66	$	1,140		913		3,782		808		3,643

Page 5

Phillips 66 Reports Fourth-Quarter Earnings of $1.1 Billion (Adjusted Earnings of $913 Million)

About Phillips 66

Phillips 66 is a diversified energy manufacturing and logistics company. With a portfolio of Midstream, Chemicals, Refining, and Marketing and Specialties businesses, the company processes, transports, stores and markets fuels and products globally. Phillips 66 Partners, the company's master limited partnership, is an integral asset in the portfolio. Headquartered in Houston, the company has 14,000 employees committed to safety and operating excellence. Phillips 66 had $49 billion in assets as of Dec. 31, 2014. For more information, visit www.phillips66.com or follow us on Twitter @Phillips66Co.

- # # # -



CONTACTS
Kevin Mitchell (investors)		Dennis Nuss (media)
832-765-2297		832-765-1850
kevin.mitchell@p66.com		dennis.h.nuss@p66.com

Rosy Zuklic (investors)
832-765-2297
rosy.zuklic@p66.com

CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR" PROVISIONS

OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This news release 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 news release 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.

Use of Non-GAAP Financial Information -- This news release includes the terms adjusted earnings, adjusted earnings per share, operating cash flow excluding working capital, and adjusted ROCE. These are non-GAAP financial measures that are included to help facilitate comparisons of company operating performance across periods.

References in the release to earnings refer to net income attributable to Phillips 66.

Prior period results have been recast to reflect realignment of certain businesses between segments and business lines. Within the Midstream segment, certain NGL pipelines were moved from the Transportation business to the NGL business. Sales commissions for specialty coke, polypropylene and solvents businesses are recorded in the M&S segment. Certain joint ventures, such as a base oil business, were moved from the Refining segment to the M&S segment.

Page 6

Phillips 66 Reports Fourth-Quarter Earnings of $1.1 Billion (Adjusted Earnings of $913 Million)



	Millions of Dollars
	Except as Indicated
	2014							2013
	3Q			4Q		Year		4Q		Year
Reconciliation of Earnings to Adjusted Earnings

Consolidated
Earnings	$	1,180		1,147		4,762		826		3,726
Adjustments:
Asset dispositions	(109		)	(385	)	(494	)	—		(23	)
Impairments	69			131		200		—		—
Pending claims and settlements	—			(10	)	(10	)	—		(16	)
Exit of business line	—			—		—		—		34
Tax law impacts	—			—		—		—		(17	)
Lower-of-cost-or-market inventory adjustments	—			30		30		—		—
Discontinued operations	—			—		(706	)	(18	)	(61	)
Adjusted earnings	$	1,140		913		3,782		808		3,643

Earnings per share of common stock (dollars)	$	2.09		2.05		8.33		1.37		6.02

Adjusted earnings per share of common stock (dollars)	$	2.02		1.63		6.62		1.34		5.89

Midstream
Earnings	$	115		96		507		121		469
Adjustments:
Lower-of-cost-or-market inventory adjustments	—			1		1		—		—
Adjusted earnings	$	115		97		508		121		469

Chemicals
Earnings	$	230		267		1,137		261		986
Adjustments:
Impairments	69			—		69		—		—
Lower-of-cost-or-market inventory adjustments	—			3		3		—		—
Adjusted earnings	$	299		270		1,209		261		986

Refining
Earnings	$	558		517		1,771		418		1,747
Adjustments:
Asset dispositions	—			(369	)	(369	)	—		—
Impairments	—			131		131		—		—
Pending claims and settlements	—			17		17		—		—
Tax law impacts	—			—		—		—		(13	)
Lower-of-cost-or-market inventory adjustments	—			26		26		—		—
Adjusted earnings	$	558		322		1,576		418		1,734

Marketing and Specialties
Earnings	$	368		367		1,034		105		894
Adjustments:
Asset dispositions	(109		)	(16	)	(125	)	—		(23	)
Pending claims and settlements	—			(27	)	(27	)	—		(16	)
Exit of business line	—			—		—		—		34
Tax law impacts	—			—		—		—		(4	)
Adjusted earnings	$	259		324		882		105		885

Page 7

Phillips 66 Reports Fourth-Quarter Earnings of $1.1 Billion (Adjusted Earnings of $913 Million)



	Millions of Dollars
	2014							2013
	3Q			4Q		Year		4Q	Year
Reconciliation of Earnings to Adjusted Earnings

Marketing and Other
Earnings	$	325		299		836		54	688
Adjustments:
Asset dispositions	(109		)	(16	)	(125	)	—	—
Pending claims and settlements	—			(27	)	(27	)	—	(16	)
Tax law impacts	—			—		—		—	(4	)
Adjusted earnings	$	216		256		684		54	668

Specialties
Earnings	$	43		68		198		51	206
Adjustments:
Asset dispositions	—			—		—		—	(23	)
Exit of business line	—			—		—		—	34
Adjusted earnings	$	43		68		198		51	217



	Millions of Dollars
	2014
	4Q			Year
Cash Flows from Operating Activities

Net Cash Provided by Operating Activities, excluding working capital	$	1,080		4,549
Changes in working capital	(208		)	(1,020	)
Net Cash Provided by Operating Activities	$	872		3,529



	Millions of Dollars
	2014
Phillips 66 - ROCE
Numerator
Net Income	$	4,797
After-tax interest expense	173
GAAP ROCE earnings	4,970
Special items	(980		)
Adjusted ROCE earnings	$	3,990

Denominator
GAAP average capital employed*	$	29,634
Discontinued operations	(96		)
Adjusted average capital employed	$	29,538

Adjusted ROCE (percent)	14		%
GAAP ROCE (percent)	17		%
* Total equity plus total debt.

Page 8

Exhibit 99.2

Phillips 66 Earnings Release Supplemental Data



CONSOLIDATED INCOME STATEMENT

	Millions of Dollars
	2013										2014
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD

Revenues and Other Income
Sales and other operating revenues*	41,211		43,190		44,146		43,049		171,596		40,283		45,549		40,417		34,963		161,212
Equity in earnings of affiliates	1,039		618		647		769		3,073		778		764		511		413		2,466
Net gain on dispositions	1		41		8		5		55		7		9		109		170		295
Other income (loss)	23		49		(7	)	20		85		31		17		11		61		120
Total Revenues and Other Income	42,274		43,898		44,794		43,843		174,809		41,099		46,339		41,048		35,607		164,093

Costs and Expenses
Purchased crude oil and products	35,243		37,257		38,717		37,028		148,245		34,381		39,316		33,602		28,449		135,748
Operating expenses	978		1,032		992		1,204		4,206		1,090		1,077		1,104		1,164		4,435
Selling, general and administrative expenses	327		368		349		434		1,478		402		412		401		448		1,663
Depreciation and amortization	242		229		233		243		947		234		239		249		273		995
Impairments	24		1		1		3		29		1		3		12		134		150
Taxes other than income taxes*	3,324		3,501		3,624		3,670		14,119		3,638		3,832		3,874		3,696		15,040
Accretion on discounted liabilities	6		6		6		6		24		6		6		6		6		24
Interest and debt expense	70		69		68		68		275		68		66		60		73		267
Foreign currency transaction (gains) losses	2		(18	)	—		(24	)	(40	)	(19	)	29		13		3		26
Total Costs and Expenses	40,216		42,445		43,990		42,632		169,283		39,801		44,980		39,321		34,246		158,348
Income from continuing operations before income taxes	2,058		1,453		804		1,211		5,526		1,298		1,359		1,727		1,361		5,745
Provision for income taxes	663		507		278		396		1,844		426		487		538		203		1,654
Income from Continuing Operations	1,395		946		526		815		3,682		872		872		1,189		1,158		4,091
Income from discontinued operations**	15		14		14		18		61		706		—		—		—		706
Net income	1,410		960		540		833		3,743		1,578		872		1,189		1,158		4,797
Less: net income attributable to
noncontrolling interests	3		2		5		7		17		6		9		9		11		35
Net Income Attributable to Phillips 66	1,407		958		535		826		3,726		1,572		863		1,180		1,147		4,762
* Includes excise taxes on petroleum products sales:	3,258		3,428		3,568		3,612		13,866		3,522		3,743		3,781		3,652		14,698
** Net of provision for income taxes on discontinued operations:	8		7		8		11		34		5		—		—		—		5

Amounts Attributable to Phillips 66 Common Stockholders:
Income from continuing operations	1,392		944		521		808		3,665		866		863		1,180		1,147		4,056
Income from discontinued operations	15		14		14		18		61		706		—		—		—		706
Net Income Attributable to Phillips 66	1,407		958		535		826		3,726		1,572		863		1,180		1,147		4,762

Net Income Attributable to Phillips 66
Per Share of Common Stock (dollars)
Basic
Continuing operations	2.23		1.53		0.86		1.35		5.97		1.48		1.52		2.11		2.07		7.15
Discontinued operations	0.02		0.02		0.02		0.03		0.10		1.21		—		—		—		1.25
Net Income Attributable to Phillips 66 Per Share of Common Stock	2.25		1.55		0.88		1.38		6.07		2.69		1.52		2.11		2.07		8.40
Diluted
Continuing operations	2.21		1.51		0.85		1.34		5.92		1.47		1.51		2.09		2.05		7.10
Discontinued operations	0.02		0.02		0.02		0.03		0.10		1.20		—		—		—		1.23
Net Income Attributable to Phillips 66 Per Share of Common Stock	2.23		1.53		0.87		1.37		6.02		2.67		1.51		2.09		2.05		8.33

Average Common Shares Outstanding (in thousands)
Basic	625,030		619,143		608,934		598,553		612,918		584,053		565,799		559,492		554,617		565,902
Diluted	631,288		624,907		614,519		604,165		618,989		589,575		571,285		564,958		559,023		571,504

SUMMARY OF INCOME (LOSS) ATTRIBUTABLE TO PHILLIPS 66 BY SEGMENT

	Millions of Dollars
	2013										2014
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD

Midstream	111		90		147		121		469		188		108		115		96		507
Chemicals	282		181		262		261		986		316		324		230		267		1,137
Refining	904		455		(30	)	418		1,747		306		390		558		517		1,771
Marketing and Specialties	190		344		255		105		894		137		162		368		367		1,034
Corporate and Other	(95	)	(126	)	(113	)	(97	)	(431	)	(81	)	(121	)	(91	)	(100	)	(393	)
Discontinued Operations	15		14		14		18		61		706		—		—		—		706
Consolidated	1,407		958		535		826		3,726		1,572		863		1,180		1,147		4,762

SUMMARY OF INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES BY SEGMENT

	Millions of Dollars
	2013										2014
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD

Midstream	177		141		239		193		750		302		180		194		175		851
Chemicals	403		232		367		359		1,361		442		466		328		396		1,632
Refining	1,371		735		(8	)	684		2,782		508		647		859		453		2,467
Marketing and Specialties	282		531		362		152		1,327		205		248		495		527		1,475
Corporate and Other	(175	)	(186	)	(156	)	(177	)	(694	)	(159	)	(182	)	(149	)	(190	)	(680	)
Consolidated	2,058		1,453		804		1,211		5,526		1,298		1,359		1,727		1,361		5,745

EFFECTIVE TAX RATES ON INCOME FROM CONTINUING OPERATIONS

	2013										2014
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD

Midstream	35.6	%	34.8	%	36.4	%	33.7	%	35.2	%	35.8	%	35.0	%	36.1	%	38.9	%	36.3	%
Chemicals	30.0	%	22.0	%	28.6	%	27.3	%	27.6	%	28.5	%	30.5	%	29.9	%	32.6	%	30.3	%
Refining	34.1	%	38.1	%	(275	)%	38.9	%	37.2	%	39.8	%	39.7	%	35.0	%	(14.1	)%	28.2	%
Marketing and Specialties	32.6	%	35.2	%	29.6	%	30.9	%	32.6	%	33.2	%	34.7	%	25.7	%	30.4	%	29.9	%
Corporate and Other	45.7	%	32.3	%	27.6	%	45.2	%	37.9	%	49.1	%	33.5	%	38.9	%	47.4	%	42.2	%
Consolidated	32.2	%	34.9	%	34.6	%	32.7	%	33.4	%	32.8	%	35.8	%	31.2	%	14.9	%	28.8	%

SUMMARY OF ADJUSTED NET INCOME (LOSS) ATTRIBUTABLE TO PHILLIPS 66 BY SEGMENT

	Millions of Dollars
	2013										2014
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD

Midstream	111		90		147		121		469		188		108		115		97		508
Chemicals	282		181		262		261		986		316		324		299		270		1,209
Refining	891		455		(30	)	418		1,734		306		390		558		322		1,576
Marketing and Specialties	204		321		255		105		885		137		162		259		324		882
Corporate and Other	(95	)	(126	)	(113	)	(97	)	(431	)	(81	)	(121	)	(91	)	(100	)	(393	)
Consolidated	1,393		921		521		808		3,643		866		863		1,140		913		3,782

Page 1



SPECIAL ITEMS INCLUDED IN NET INCOME ATTRIBUTABLE TO PHILLIPS 66
(AFTER-TAX)

	Millions of Dollars
	2013							2014
	1st Qtr		2nd Qtr	3rd Qtr	4th Qtr	YTD		1st Qtr	2nd Qtr	3rd Qtr		4th Qtr		YTD
Midstream
Lower-of-cost-or-market inventory adjustments	—		—	—	—	—		—	—	—		(1	)	(1	)
Total Midstream	—		—	—	—	—		—	—	—		(1	)	(1	)

Chemicals
Impairments	—		—	—	—	—		—	—	(69	)	—		(69	)
Lower-of-cost-or-market inventory adjustments	—		—	—	—	—		—	—	—		(3	)	(3	)
Total Chemicals	—		—	—	—	—		—	—	(69	)	(3	)	(72	)

Refining
Asset dispositions	—		—	—	—	—		—	—	—		369		369
Impairments	—		—	—	—	—		—	—	—		(131	)	(131	)
Pending claims and settlements	—		—	—	—	—		—	—	—		(17	)	(17	)
Lower-of-cost-or-market inventory adjustments	—		—	—	—	—		—	—	—		(26	)	(26	)
Tax law impacts	13		—	—	—	13		—	—	—		—		—
Total Refining	13		—	—	—	13		—	—	—		195		195

Marketing and Specialties
Asset dispositions	—		23	—	—	23		—	—	109		16		125
Pending claims and settlements	16		—	—	—	16		—	—	—		27		27
Exit of a business line	(34	)	—	—	—	(34	)	—	—	—		—		—
Tax law impacts	4		—	—	—	4		—	—	—		—		—
Total Marketing and Specialties	(14	)	23	—	—	9		—	—	109		43		152

Corporate and Other	—		—	—	—	—		—	—	—		—		—

Discontinued Operations	15		14	14	18	61		706	—	—		—		706

Total Phillips 66	14		37	14	18	83		706	—	40		234		980

By Business Lines/Regions
Midstream
Transportation	—		—	—	—	—		—	—	—		—		—
DCP Midstream	—		—	—	—	—		—	—	—		(1	)	(1	)
NGL	—		—	—	—	—		—	—	—		—		—
Total Midstream	—		—	—	—	—		—	—	—		(1	)	(1	)

Refining
Atlantic Basin/Europe	7		—	—	—	7		—	—	—		(131	)	(131	)
Gulf Coast	—		—	—	—	—		—	—	—		—		—
Central Corridor	3		—	—	—	3		—	—	—		(15	)	(15	)
Western/Pacific	2		—	—	—	2		—	—	—		358		358
Other Refining	1		—	—	—	1		—	—	—		(17	)	(17	)
Total Refining	13		—	—	—	13		—	—	—		195		195

Marketing and Specialties
Marketing and Other	20		—	—	—	20		—	—	109		43		152
Specialties	(34	)	23	—	—	(11	)	—	—	—		—		—
Total Marketing and Specialties	(14	)	23	—	—	9		—	—	109		43		152


SPECIAL ITEMS INCLUDED IN INCOME FROM CONTINUING OPERATIONS
(PRE-TAX)

	Millions of Dollars
	2013							2014
	1st Qtr		2nd Qtr	3rd Qtr	4th Qtr	YTD		1st Qtr	2nd Qtr	3rd Qtr		4th Qtr		YTD

Midstream
Transportation	—		—	—	—	—		—	—	—		—		—
DCP Midstream	—		—	—	—	—		—	—	—		(2	)	(2	)
NGL	—		—	—	—	—		—	—	—		—		—
Total Midstream	—		—	—	—	—		—	—	—		(2	)	(2	)

Chemicals	—		—	—	—	—		—	—	(88	)	(3	)	(91	)

Refining
Atlantic Basin/Europe	12		—	—	—	12		—	—	—		(131	)	(131	)
Gulf Coast	—		—	—	—	—		—	—	—		—		—
Central Corridor	5		—	—	—	5		—	—	—		(25	)	(25	)
Western/Pacific	3		—	—	—	3		—	—	—		130		130
Other Refining	2		—	—	—	2		—	—	—		(23	)	(23	)
Total Refining	22		—	—	—	22		—	—	—		(49	)	(49	)

Marketing and Specialties
Marketing and Other	31		—	—	—	31		—	—	109		60		169
Specialties	(54	)	40	—	—	(14	)	—	—	—		—		—
Total Marketing and Specialties	(23	)	40	—	—	17		—	—	109		60		169

Corporate and Other	—		—	—	—	—		—	—	—		—		—

Discontinued Operations	23		21	22	29	95		711	—	—		—		711

Total Phillips 66	22		61	22	29	134		711	—	21		6		738

Page 2



CASH FLOW INFORMATION

	Millions of Dollars
	2013										2014
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD

Cash Flows From Operating Activities
Net income	1,410		960		540		833		3,743		1,578		872		1,189		1,158		4,797
Depreciation and amortization	242		229		233		243		947		234		239		249		273		995
Impairments	24		1		1		3		29		1		3		12		134		150
Accretion on discounted liabilities	6		6		6		6		24		6		6		6		6		24
Deferred taxes	82		80		120		312		594		(444	)	(11	)	(72	)	39		(488	)
Undistributed equity earnings	77		(98	)	(55	)	(278	)	(354	)	632		(253	)	(19	)	(163	)	197
Net gain on dispositions	(1	)	(41	)	(8	)	(5	)	(55	)	(7	)	(9	)	(109	)	(170	)	(295	)
Income from discontinued operations	(15	)	(14	)	(14	)	(18	)	(61	)	(706	)	—		—		—		(706	)
Other	(34	)	35		33		161		195		(21	)	90		1		(197	)	(127	)
Net working capital changes	400		(204	)	1,076		(392	)	880		123		(107	)	(828	)	(208	)	(1,020	)
Net cash provided by continuing operating activities	2,191		954		1,932		865		5,942		1,396		830		429		872		3,527
Net cash provided by discontinued operations	22		14		17		32		85		2		—		—		—		2
Net Cash Provided by Operating Activities	2,213		968		1,949		897		6,027		1,398		830		429		872		3,529

Cash Flows From Investing Activities
Capital expenditures and investments	(382	)	(366	)	(408	)	(623	)	(1,779	)	(572	)	(561	)	(1,514	)	(1,126	)	(3,773	)
Proceeds from asset dispositions*	9		60		1,119		26		1,214		507		150		6		581		1,244
Advances/loans—related parties	—		—		(65	)	—		(65	)	—		(3	)	—		—		(3	)
Collection of advances/loans—related parties	55		45		—		65		165		—		—		—		—		—
Other	—		—		—		48		48		13		21		127		77		238
Net cash provided by (used in) continuing investing activities	(318	)	(261	)	646		(484	)	(417	)	(52	)	(393	)	(1,381	)	(468	)	(2,294	)
Net cash provided by (used in) discontinued operations	(5	)	(5	)	(4	)	(13	)	(27	)	(34	)	32		—		—		(2	)
Net Cash Provided by (Used in) Investing Activities	(323	)	(266	)	642		(497	)	(444	)	(86	)	(361	)	(1,381	)	(468	)	(2,296	)

Cash Flows From Financing Activities
Issuance of debt	—		—		—		—		—		—		—		—		2,487		2,487
Repayment of debt	(3	)	(502	)	(510	)	(5	)	(1,020	)	(8	)	(9	)	(13	)	(19	)	(49	)
Issuance of common stock	(6	)	3		(1	)	10		6		(20	)	8		13		—		1
Repurchase of common stock	(382	)	(546	)	(674	)	(644	)	(2,246	)	(640	)	(616	)	(494	)	(532	)	(2,282	)
Share exchange—PSPI transaction	—		—		—		—		—		(450	)	—		—		—		(450	)
Dividends paid on common stock	(194	)	(192	)	(189	)	(232	)	(807	)	(229	)	(281	)	(277	)	(275	)	(1,062	)
Distributions to noncontrolling interests	—		(1	)	—		(9	)	(10	)	(4	)	(9	)	(5	)	(12	)	(30	)
Net proceeds from issuance of Phillips 66 Partners LP common units	—		—		404		—		404		—		—		—		—		—
Other	—		(3	)	(1	)	(2	)	(6	)	(4	)	29		(2	)	—		23
Net cash provided by (used in) continuing financing activities	(585	)	(1,241	)	(971	)	(882	)	(3,679	)	(1,355	)	(878	)	(778	)	1,649		(1,362	)
Net cash provided by (used in) discontinued operations	—		—		—		—		—		—		—		—		—		—
Net Cash Provided by (Used in) Financing Activities	(585	)	(1,241	)	(971	)	(882	)	(3,679	)	(1,355	)	(878	)	(778	)	1,649		(1,362	)

Effect of Exchange Rate Changes on Cash and Cash Equivalents	(26	)	6		102		(60	)	22		(31	)	39		(118	)	46		(64	)

Net Change in Cash
and Cash Equivalents	1,279		(533	)	1,722		(542	)	1,926		(74	)	(370	)	(1,848	)	2,099		(193	)
Cash and cash equivalents
at beginning of period	3,474		4,753		4,220		5,942		3,474		5,400		5,326		4,956		3,108		5,400
Cash and Cash Equivalents
at End of Period	4,753		4,220		5,942		5,400		5,400		5,326		4,956		3,108		5,207		5,207
*Includes return of investments in equity affiliates.


CAPITAL PROGRAM

	Millions of Dollars
	2013										2014
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD

Consolidated Capital Expenditures and Investments
Midstream	115		131		131		220		597		288		298		946		641		2,173
Chemicals	—		—		—		—		—		—		—		—		—		—
Refining	131		151		229		309		820		186		215		278		359		1,038
Marketing and Specialties	97		42		41		46		226		84		26		248		81		439
Corporate and Other	39		42		7		48		136		14		22		42		45		123
Total Consolidated from Continuing Operations	382		366		408		623		1,779		572		561		1,514		1,126		3,773

Discontinued Operations	5		5		4		13		27		—		—		—		—		—

Proportional Share of Select Equity Affiliates
Capital Expenditures and Investments*
DCP Midstream (Midstream)	274		268		218		211		971		178		176		207		215		776
CPChem (Chemicals)	106		142		172		193		613		155		224		244		274		897
WRB Refining (Refining)	29		30		19		31		109		23		38		35		44		140
Select Equity Affiliates	409		440		409		435		1,693		356		438		486		533		1,813


Total Capital Program*
Midstream	389		399		349		431		1,568		466		474		1,153		856		2,949
Chemicals	106		142		172		193		613		155		224		244		274		897
Refining	160		181		248		340		929		209		253		313		403		1,178
Marketing and Specialties	97		42		41		46		226		84		26		248		81		439
Corporate and Other	39		42		7		48		136		14		22		42		45		123
Discontinued Operations	5		5		4		13		27		—		—		—		—		—
Total Capital Program	796		811		821		1,071		3,499		928		999		2,000		1,659		5,586

* Includes Phillips 66’s portion of self-funded capital spending by DCP Midstream, LLC (DCP Midstream), Chevron Phillips Chemical Company LLC (CPChem) and WRB Refining.

Page 3



MIDSTREAM

	2013					2014
	1st Qtr	2nd Qtr	3rd Qtr	4th Qtr	YTD	1st Qtr	2nd Qtr	3rd Qtr	4th Qtr		YTD

Midstream Net Income (Loss) Attributable to Phillips 66 ($ Millions)
Transportation	45	50	54	50	199	62	60	58	53		233
DCP Midstream	56	30	87	37	210	83	33	31	(12	)	135
NGL	10	10	6	34	60	43	15	26	55		139
Midstream Net Income Attributable
to Phillips 66	111	90	147	121	469	188	108	115	96		507

Midstream Income (Loss) before Income Taxes ($ Millions)
Transportation	75	80	87	83	325	101	105	102	108		416
DCP Midstream	87	46	136	63	332	130	52	50	(18	)	214
NGL	15	15	16	47	93	71	23	42	85		221
Midstream Income before Income Taxes	177	141	239	193	750	302	180	194	175		851

Midstream Adjusted EBITDA	244	213	322	288	1,067	384	256	273	257		1,170

Depreciation and Amortization ($ Millions)
Transportation	18	19	19	30	86	19	20	23	27		89
DCP Midstream	—	—	—	—	—	—	—	—	—		—
NGL	1	—	—	1	2	—	1	1	—		2
Total	19	19	19	31	88	19	21	24	27		91

Operating and SG&A Expense ($ Millions)
Transportation	93	102	110	103	408	96	109	122	134		461
DCP Midstream	—	—	—	2	2	—	—	—	—		—
NGL	17	25	15	21	78	17	20	20	37		94
Total	110	127	125	126	488	113	129	142	171		555

Transportation Volumes (MB/D)
Pipelines*	3,032	3,170	3,222	3,150	3,144	3,101	3,243	3,142	3,336		3,206
Terminals**	1,041	1,194	1,419	1,435	1,274	1,477	1,609	1,780	1,860		1,683
* Pipelines represents the sum of volumes transported through each separately tariffed pipeline segment, including our share of equity volumes in Yellowstone and Lake Charles pipelines.
**Terminals include Bayway and Ferndale crude oil rail rack volumes.

PSX Other Volumes
NGL Fractionated (MB/D)*	117	113	123	109	115	112	117	110	99		109
* Excludes DCP Midstream.

100% DCP Midstream Results
Net Income Attributable, excludes parent company income tax related to DCP's earnings ($ Millions)	91	78	191	131	491	165	89	81	(47	)	288

Depreciation and Amortization ($ Millions)	69	76	82	87	314	85	86	87	90		348

Operating and SG&A Expense ($ Millions)	228	236	223	262	949	243	283	264	271		1,061

Net Interest Expense ($ Millions)*	50	52	75	72	249	72	74	71	70		287
* Net of interest income.

Capital Expenditures and Investments ($ Millions)	547	537	435	422	1,941	355	353	414	429		1,551

Selected DCP Volumes and Gross Margin
by Major Contract Type (excludes current quarter)
Percentage of Proceeds (long NGL / long Gas)*
Volume (TBtu/d)	4.8	5.0	5.3	5.2	5.1	5.3	5.6	5.8	**		5.6
Gross Margin ($ Millions)	185	220	230	240	875	265	265	275	**		805

Keep-whole (long NGL / short Gas)*
Volume (TBtu/d)	0.6	0.6	0.6	0.6	0.6	0.5	0.4	0.4	**		0.4
Gross Margin ($ Millions)	45	35	45	45	170	35	20	25	**		80

Fee-based Gas (primarily gathering and transport)*
Volume (TBtu/d)	4.5	4.7	4.7	4.6	4.6	4.6	4.5	4.6	**		4.6
Gross Margin ($ Millions)	65	75	75	90	305	80	85	90	**		255

Fee-based NGL Transport and Fractionation
Volume (MB/D)	202	201	209	220	208	242	281	325	**		848
Gross Margin ($ Millions)	19	19	25	23	86	26	27	39	**		92

Other Gross Margin***
Gross Margin ($ Millions)	153	160	186	172	671	205	139	175	**		519

Total Throughput (TBtu/d)	6.9	7.1	7.4	7.2	7.1	7.2	7.3	7.5	7.4		7.3
NGL Production (MB/D)	396	412	442	452	426	445	452	471	447		454
* Certain volumes earn duplicate revenue streams (i.e. both fee plus processing economics).
** Pending DCP Midstream release.
*** Includes NGL/Propane Marketing, MTM, Condensate Sales, Gas Marketing activity and other items.

Weighted Average NGL Price*
DCP Midstream ($/BBL)	37.45	34.58	37.84	41.48	37.84	44.52	39.06	37.66	28.45		37.43
DCP Midstream ($/gal)	0.89	0.82	0.90	0.99	0.90	1.06	0.93	0.90	0.68		0.89
* Based on index prices from the Mont Belvieu and Conway market hubs that are weighted by NGL component and location mix.

MLP Distributions ($ Millions)*
GP Distribution from PSXP to Phillips 66	—	—	—	—	—	1	1	2	4		8
LP Distribution from PSXP to Phillips 66	—	—	8	12	20	15	17	17	19		68
GP Distribution from DPM to DCP Midstream***	15	16	19	20	70	26	28	29	**		83
LP Distribution from DPM to DCP Midstream***	14	15	14	15	58	18	18	19	**		55

* Cash distributions declared attributable to general partner interest, common unit ownership and incentive distribution rights. These distributions are eliminated in the respective sponsors consolidated financial statements.
** Pending DCP Midstream release.
*** Represents 100 percent of DCP Midstream's distributions from DPM.

Page 4



CHEMICALS

	2013										2014
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD
Chemicals Net Income Attributable
to Phillips 66 ($ Millions)	282		181		262		261		986		316		324		230		267		1,137

Chemicals Adjusted EBITDA	482		320		454		454		1,710		534		557		517		493		2,101

100% CPChem Results
Net Income (Loss), excludes parent company income tax related to CPChem's earnings ($ Millions)
Olefins and Polyolefins	726		411		677		746		2,560		801		903		720		731		3,155
Specialties, Aromatics and Styrenics	56		73		72		—		201		97		52		(45	)	74		178
Corporate and Other	29		(14	)	(11	)	(22	)	(18	)	(8	)	(15	)	(13	)	(9	)	(45	)
Total	811		470		738		724		2,743		890		940		662		796		3,288

Income (Loss) before Income Taxes ($ Millions)*
Olefins and Polyolefins	736		421		688		756		2,601		815		918		735		741		3,209
Specialties, Aromatics and Styrenics	60		83		81		10		234		105		60		(36	)	79		208
Corporate and Other	30		(14	)	(11	)	(22	)	(17	)	(8	)	(14	)	(12	)	(9	)	(43	)
Total	826		490		758		744		2,818		912		964		687		811		3,374
* Excludes CPChem discontinued operations.

Depreciation and Amortization ($ Millions)	64		66		66		82		278		69		69		74		84		296

Net Interest Expense ($ Millions)*	(1	)	—		(1	)	(1	)	(3	)	—		(1	)	(1	)	—		(2	)
* Net of interest income.

Investing Cash Flows ($ Millions)
Capital Expenditures and Investments	211		284		345		385		1,225		310		447		488		548		1,793
Advances to Equity Companies	45		19		5		98		167		5		21		18		34		78
Advance Repayments from Equity Companies	(43	)	(12	)	—		—		(55	)	—		—		—		—		—

Externally Marketed Sales Volumes (MM Lbs)
Olefins and Polyolefins	4,036		3,862		3,927		4,246		16,071		4,302		4,395		4,067		4,051		16,815
Specialties, Aromatics and Styrenics	1,496		1,485		1,577		1,672		6,230		1,569		1,530		1,571		1,624		6,294
Total	5,532		5,347		5,504		5,918		22,301		5,871		5,925		5,638		5,675		23,109
*Represents 100 percent of CPChem's outside sales of produced petrochemical products, as well as commission sales from equity affiliates.

Olefins and Polyolefins Capacity Utilization (%)	91	%	78	%	87	%	95	%	88	%	93	%	95	%	83	%	83	%	88	%

Market Indicators
U.S. Industry Prices*
Ethylene, Net Transaction Price (cents/lb)	48.00		46.33		45.83		46.50		46.67		48.25		47.17		51.83		44.75		48.00
HDPE Blow Molding (cents/lb)	91.67		93.67		96.67		100.00		95.50		102.67		104.00		105.00		103.67		103.83

U.S. Industry Costs*
Ethylene, Cash Cost Weighted Average Feed (cents/lb)	13.80		15.66		16.47		18.60		16.13		19.84		17.05		14.47		10.48		15.46
HDPE, Total Cash Cost (cents/lb)	69.26		65.55		63.71		64.52		65.76		67.04		66.56		73.51		63.60		67.68
* Released by IHS. Reflect the IHS analysis of historical market indicators.

Page 5



REFINING

	2013										2014
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD

Refining Net Income (Loss) Attributable to Phillips 66
($ Millions)
Atlantic Basin/Europe	95		24		47		(139	)	27		16		(10	)	125		72		203
Gulf Coast	35		(82	)	(79	)	185		59		77		118		43		12		250
Central Corridor	588		395		119		379		1,481		222		229		300		191		942
Western/Pacific	63		33		(94	)	42		44		(47	)	65		(3	)	291		306
Other Refining	123		85		(23	)	(49	)	136		38		(12	)	93		(49	)	70
Refining Net Income (Loss) Attributable
to Phillips 66	904		455		(30	)	418		1,747		306		390		558		517		1,771

Refining Income (Loss) before Income Taxes ($ Millions)
Atlantic Basin/Europe	136		41		59		(191	)	45		34		5		184		159		382
Gulf Coast	43		(109	)	(118	)	282		98		122		183		65		16		386
Central Corridor	923		626		193		589		2,331		359		367		463		280		1,469
Western/Pacific	95		59		(123	)	74		105		(63	)	101		16		80		134
Other Refining	174		118		(19	)	(70	)	203		56		(9	)	131		(82	)	96
Refining Income (Loss) before Income Taxes	1,371		735		(8	)	684		2,782		508		647		859		453		2,467

Refining Adjusted EBITDA	1,560		937		199		887		3,583		722		883		1,098		746		3,449

Realized Refining Margins ($/BBL)*
Atlantic Basin/Europe	8.61		6.83		6.59		5.12		6.87		7.46		6.06		9.99		11.04		8.65
Gulf Coast	8.08		3.89		3.35		9.12		6.04		8.64		8.12		6.80		6.58		7.50
Central Corridor**	27.29		19.45		9.80		18.50		18.62		15.21		14.91		16.87		14.01		15.26
Western/Pacific**	9.64		8.80		4.77		9.51		8.20		7.02		10.53		8.71		6.52		8.22
Worldwide	13.78		9.70		5.94		10.50		9.90		9.88		9.66		10.89		9.30		9.93
* Based on total processed inputs and includes proportional share of refining margins contributed by certain equity affiliates.
** Realized margin excludes special items.

Depreciation and Amortization ($ Millions)*
Atlantic Basin/Europe	42		43		43		42		170		46		47		48		48		189
Gulf Coast	52		54		50		50		206		49		50		52		53		204
Central Corridor	27		22		21		23		93		23		22		24		24		93
Western/Pacific	53		50		51		52		206		51		52		52		53		208
Other Refining	3		(1	)	5		3		10		3		3		2		2		10
Total	177		168		170		170		685		172		174		178		180		704
* Excludes D&A of all equity affiliates.

Operating and SG&A Expense ($ Millions)*
Atlantic Basin/Europe	262		279		238		354		1,133		274		248		242		245		1,009
Gulf Coast	330		297		309		326		1,262		363		329		363		386		1,441
Central Corridor	98		98		114		116		426		113		123		114		120		470
Western/Pacific	185		200		199		222		806		227		223		227		225		902
Other Refining	26		40		35		85		186		27		33		29		76		165
Total	901		914		895		1,103		3,813		1,004		956		975		1,052		3,987
* Excludes Operating and SG&A Expense of all equity affiliates.

Turnaround Expense ($ Millions), included in
Operating and SG&A Expense*
Atlantic Basin/Europe	12		35		15		108		170		23		9		16		14		62
Gulf Coast	64		12		18		28		122		75		35		67		94		271
Central Corridor	6		4		16		11		37		5		4		3		6		18
Western/Pacific	4		11		7		12		34		22		13		15		23		73
Total	86		62		56		159		363		125		61		101		137		424
* Excludes Turnaround Expense of all equity affiliates.

Taxes Other than Income Taxes, excluding Excise Taxes ($ Millions)
Atlantic Basin/Europe	18		15		14		15		62		17		15		15		14		61
Gulf Coast	22		19		14		14		69		23		21		19		17		80
Central Corridor	9		9		8		8		34		10		7		9		7		33
Western/Pacific	27		26		26		26		105		29		26		25		22		102
Other Refining	(3	)	(4	)	(3	)	1		(9	)	3		—		2		4		9
Total	73		65		59		64		261		82		69		70		64		285

Foreign Currency Gains
(Losses) After-Tax ($ Millions)	16		9		(2	)	18		41		14		(18	)	(6	)	4		(6	)

Refining—Equity Affiliate Information ($ Millions)
Equity in earnings of affiliates	503		274		69		261		1,107		150		173		55		(67	)	311
Less: Share of equity affiliate gross margin included in Realized
Refining Margin and other equity affiliate-related costs*	(691	)	(428	)	(221	)	(387	)	(1,727	)	(352	)	(364	)	(248	)	(172	)	(1,136	)
Equity-affiliate-related expenses
not included in Realized Refining Margins	(188	)	(154	)	(152	)	(126	)	(620	)	(202	)	(191	)	(193	)	(239	)	(825	)
Regional Totals
Gulf Coast	(21	)	1		19		34		33		11		13		3		1		28
Central Corridor	(121	)	(112	)	(110	)	(115	)	(458	)	(167	)	(156	)	(159	)	(195	)	(677	)
Other Regions**	(46	)	(43	)	(61	)	(45	)	(195	)	(46	)	(48	)	(37	)	(45	)	(176	)
Total	(188	)	(154	)	(152	)	(126	)	(620	)	(202	)	(191	)	(193	)	(239	)	(825	)

* Other costs associated with equity affiliates which do not flow through equity earnings.
** Combined equity affiliates reported in Atlantic Basin/Europe and Western/Pacific.

Page 6



REFINING (continued)

	2013										2014
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD

Atlantic Basin/Europe*
Crude Oil Charge Input (MB/D)	571		555		574		483		546		551		562		538		563		554
Total Charge Input (MB/D)	614		597		606		489		576		585		612		588		616		600
Crude Oil Capacity Utilization (%)	97	%	94	%	98	%	82	%	93	%	94	%	96	%	92	%	96	%	94	%
Clean Product Yield (%)	85	%	84	%	84	%	79	%	83	%	84	%	83	%	86	%	85	%	85	%
* Includes our proportionate share of a refinery complex in Karlsruhe, Germany.

Gulf Coast
Crude Oil Charge Input (MB/D)	584		664		671		682		651		613		673		710		708		676
Total Charge Input (MB/D)	643		741		767		762		729		705		771		794		779		763
Crude Oil Capacity Utilization (%)	80	%	91	%	92	%	93	%	89	%	84	%	92	%	97	%	97	%	92	%
Clean Product Yield (%)	81	%	83	%	82	%	82	%	82	%	81	%	79	%	79	%	77	%	79	%

Central Corridor*
Crude Oil Charge Input (MB/D)	457		474		480		479		472		466		493		476		466		475
Total Charge Input (MB/D)	473		488		495		494		488		481		511		492		481		491
Crude Oil Capacity Utilization (%)	96	%	100	%	101	%	100	%	99	%	96	%	102	%	98	%	96	%	98	%
Clean Product Yield (%)	87	%	86	%	88	%	88	%	87	%	88	%	88	%	90	%	90	%	89	%
* Includes our proportionate share of the Borger Refinery and Wood River Refinery.

Western/Pacific*
Crude Oil Charge Input (MB/D)	401		417		403		419		410		395		424		390		403		403
Total Charge Input (MB/D)	441		448		430		450		442		427		450		423		435		434
Crude Oil Capacity Utilization (%)	91	%	95	%	91	%	95	%	93	%	90	%	96	%	89	%	92	%	92	%
Clean Product Yield (%)	83	%	86	%	84	%	85	%	85	%	84	%	85	%	83	%	87	%	85	%
* Includes our proportionate share of a refinery in Melaka, Malaysia.

Worldwide—Including Proportionate Share of Equity Affiliates
Crude Oil Charge Input (MB/D)	2,013		2,110		2,128		2,063		2,079		2,025		2,152		2,114		2,140		2,108
Total Charge Input (MB/D)	2,171		2,274		2,298		2,195		2,235		2,198		2,344		2,297		2,311		2,288
Crude Oil Capacity Utilization (%)	90	%	94	%	95	%	92	%	93	%	90	%	96	%	94	%	95	%	94	%
Clean Product Yield (%)	84	%	85	%	84	%	84	%	84	%	84	%	83	%	84	%	84	%	84	%

Refined Products Production (MB/D)
Atlantic Basin/Europe*
Gasoline	240		239		241		175		224		231		244		247		247		242
Distillates	264		249		252		204		242		245		248		240		262		249
Other	114		110		116		107		112		112		123		106		113		114
Total	618		598		609		486		578		588		615		593		622		605
* Includes our proportionate share of a refinery complex in Karlsruhe, Germany.

Gulf Coast
Gasoline	252		292		304		293		285		276		300		296		275		287
Distillates	247		292		295		297		283		270		286		299		293		287
Other	147		164		175		184		168		171		197		203		218		197
Total	646		748		774		774		736		717		783		798		786		771

Central Corridor*
Gasoline	242		242		257		254		249		247		262		256		251		254
Distillates	168		175		174		179		174		173		187		181		181		181
Other	65		71		66		63		66		63		64		57		53		59
Total	475		488		497		496		489		483		513		494		485		494
* Includes our proportionate share of the Borger Refinery and Wood River Refinery.

Western/Pacific*
Gasoline	188		198		188		191		191		181		198		182		194		188
Distillates	177		189		173		193		183		179		186		167		186		179
Other	80		65		71		69		71		69		70		76		56		68
Total	445		452		432		453		445		429		454		425		436		435
* Includes our proportionate share of a refinery in Melaka, Malaysia.

Worldwide—Including Proportionate Share of Equity Affiliates
Gasoline	922		971		990		913		949		935		1,004		981		967		971
Distillates	856		905		894		873		882		867		907		887		922		896
Other	406		410		428		423		417		415		454		442		440		438
Total	2,184		2,286		2,312		2,209		2,248		2,217		2,365		2,310		2,329		2,305

Market Indicators
Crude and Crude Differentials ($/BBL)
WTI	94.29		94.12		105.80		97.38		97.90		98.75		103.05		97.48		73.41		93.17
Brent	112.55		102.44		110.36		109.27		108.66		108.22		109.63		101.85		76.27		98.99
LLS	113.92		104.63		109.89		100.94		107.34		104.43		105.55		100.95		76.38		96.83
ANS	111.02		104.52		110.52		104.67		107.68		105.74		109.23		101.51		74.76		97.81
WTI less Maya	(8.54	)	(3.55	)	6.47		8.12		0.63		9.41		7.27		6.64		6.21		7.38
WTI less WCS	27.02		16.71		23.07		31.23		24.51		20.83		19.15		18.22		15.63		18.46

Natural Gas ($/MCF)
Henry Hub	3.48		4.01		3.55		3.84		3.72		5.08		4.58		3.94		3.75		4.34

Product Margins ($/BBL)
Atlantic Basin/Europe
East Coast Gasoline less Brent	9.70		14.83		13.05		2.95		10.13		5.12		15.23		15.44		8.69		11.12
East Coast Distillate less Brent	18.78		19.09		17.43		16.35		17.91		22.28		14.30		16.63		22.06		18.82
Gulf Coast
Gulf Coast Gasoline less LLS	3.41		9.14		5.86		2.89		5.33		5.25		11.53		8.54		(0.03	)	6.32
Gulf Coast Distillate less LLS	15.67		15.52		16.66		21.48		17.33		18.63		17.00		16.26		16.17		17.02
Central Corridor
Central Gasoline less WTI	24.04		26.18		14.55		3.23		17.00		13.15		16.09		14.05		6.12		12.35
Central Distillate less WTI	35.72		29.35		22.95		25.52		28.39		25.94		21.07		21.85		27.60		24.12
Western/Pacific
West Coast Gasoline less ANS	18.34		20.59		12.39		8.71		15.01		11.75		20.88		16.59		7.46		14.17
West Coast Distillate less ANS	20.67		16.84		18.42		19.60		18.89		17.55		17.16		20.19		21.69		19.15

Worldwide Market Crack Spread ($/BBL)*	15.50		17.56		13.44		9.62		14.03		12.44		15.94		14.85		10.45		13.42
* Weighted average based on Phillips 66 crude capacity.

Page 7



MARKETING AND SPECIALTIES

	2013					2014
	1st Qtr	2nd Qtr	3rd Qtr	4th Qtr	YTD	1st Qtr	2nd Qtr		3rd Qtr		4th Qtr		YTD

Marketing and Specialties Net Income Attributable to Phillips 66 ($ Millions)
Marketing and Other	177	258	199	54	688	93	119		325		299		836
Specialties	13	86	56	51	206	44	43		43		68		198
Marketing and Specialties
Net Income Attributable to Phillips 66	190	344	255	105	894	137	162		368		367		1,034

Marketing and Specialties Income before Income Taxes ($ Millions)
Marketing and Other	259	391	273	71	994	135	179		425		423		1,162
Specialties	23	140	89	81	333	70	69		70		104		313
Marketing and Specialties
Income before Income Taxes	282	531	362	152	1,327	205	248		495		527		1,475

Marketing and Specialties Adjusted EBITDA	338	516	384	175	1,413	226	271		410		494		1,401

Realized Marketing Fuel Margin ($/BBL)*
U.S.	1.02	1.77	1.25	0.74	1.21	1.19	1.17		1.78		1.87		1.51
International	3.16	4.93	5.55	3.76	4.36	3.72	4.52		6.10		6.48		5.22
* On third-party petroleum products sales.

Realized Margins not included in Marketing Fuel Margin
($ Millions)*
Marketing and Other	210	184	141	121	656	139	160		169		135		603
Specialties	83	135	112	113	443	106	102		108		146		462
Total	293	319	253	234	1,099	245	262		277		281		1,065
* Excludes Gain on Dispositions and Excise Tax Income.

Depreciation and Amortization ($ Millions)
Marketing and Other	30	23	21	21	95	20	21		21		21		83
Specialties	3	2	1	2	8	1	2		3		6		12
Total	33	25	22	23	103	21	23		24		27		95

Operating and SG&A Expense ($ Millions)
Marketing and Other	189	231	220	271	911	274	284		295		281		1,134
Specialties	35	32	29	31	127	32	30		35		34		131
Total	224	263	249	302	1,038	306	314		330		315		1,265

Marketing Petroleum Products Sales (MB/D)
U.S. Marketing
Gasoline	1,016	1,138	1,111	1,059	1,081	1,030	1,142		1,093		1,142		1,102
Distillates	763	817	761	759	775	748	784		750		864		787
Other	—	—	—	—	—	—	—		—		—		—
Total	1,779	1,955	1,872	1,818	1,856	1,778	1,926		1,843		2,006		1,889

International Marketing
Gasoline	89	95	95	92	93	89	95		95		95		93
Distillates	193	190	190	192	192	196	186		190		196		192
Other	16	18	18	17	17	16	19		17		17		17
Total	298	303	303	301	302	301	300		302		308		302

Worldwide Marketing
Gasoline	1,105	1,233	1,206	1,151	1,174	1,119	1,237		1,188		1,237		1,195
Distillates	956	1,007	951	951	967	944	970		940		1,060		979
Other	16	18	18	17	17	16	19		17		17		17
Total	2,077	2,258	2,175	2,119	2,158	2,079	2,226		2,145		2,314		2,191

Foreign Currency Gains
(Losses) After-Tax ($ Millions)	3	1	1	—	5	—	(3	)	(3	)	(2	)	(8	)

Page 8



CORPORATE AND OTHER

	2013										2014
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD
Corporate and Other Net Income (Loss)
Attributable to Phillips 66 ($ Millions)	(95	)	(126	)	(113	)	(97	)	(431	)	(81	)	(121	)	(91	)	(100	)	(393	)

Detail of Net Income (Loss)
Attributable to Phillips 66 ($ Millions)
Net interest expense	(43	)	(42	)	(41	)	(40	)	(166	)	(41	)	(39	)	(36	)	(44	)	(160	)
Corporate overhead	(34	)	(36	)	(32	)	(43	)	(145	)	(40	)	(44	)	(32	)	(40	)	(156	)
Technology	(12	)	(12	)	(12	)	(14	)	(50	)	(13	)	(14	)	(14	)	(17	)	(58	)
Other	(6	)	(36	)	(28	)	—		(70	)	13		(24	)	(9	)	1		(19	)
Total	(95	)	(126	)	(113	)	(97	)	(431	)	(81	)	(121	)	(91	)	(100	)	(393	)

Before-Tax Net Interest Expense ($ Millions)
Interest expense	(70	)	(69	)	(68	)	(68	)	(275	)	(69	)	(69	)	(66	)	(83	)	(287	)
Capitalized interest	—		—		—		—		—		1		3		6		10		20
Interest revenue	5		4		5		6		20		5		6		5		5		21
Premium on early debt retirement	—		(1	)	(2	)	—		(3	)	—		—		—		—		—
Total	(65	)	(66	)	(65	)	(62	)	(258	)	(63	)	(60	)	(55	)	(68	)	(246	)

Foreign Currency Gains
(Losses) After-Tax ($ Millions)	(1	)	—		(1	)	—		(2	)	—		—		—		—		—

Phillips 66 Total Company
Debt
Total Debt ($ Millions)	6,971		6,469		6,156		6,155		6,155		6,217		6,212		6,213		8,684		8,684
Debt-to-Capital Ratio (%)	25	%	23	%	22	%	22	%	22	%	22	%	22	%	22	%	28	%	28	%

Total Equity ($ Millions)	21,378		21,690		21,994		22,392		22,392		21,829		21,955		22,194		22,037		22,037

Page 9



NON-GAAP FINANCIAL MEASURES RECONCILIATION

	Millions of Dollars
	2013										2014
	1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		YTD
Reconciliation of Midstream Net Income to Adjusted EBITDA
Midstream net income	114		92		152		128		486		194		117		124		107		542
Plus:
Provision for income taxes	63		49		87		65		264		108		63		70		68		309
Depreciation and amortization	19		19		19		31		88		19		21		24		27		91
Midstream EBITDA	196		160		258		224		838		321		201		218		202		942

Adjustments (pretax):
EBITDA attributable to Phillips 66 noncontrolling interests	(5	)	(4	)	(7	)	(8	)	(24	)	(8	)	(12	)	(13	)	(12	)	(45	)
Proportional share of selected equity affiliates income taxes	—		2		1		1		4		2		—		2		(1	)	3
Proportional share of selected equity affiliates net interest	22		22		33		33		110		30		31		29		28		118
Proportional share of selected equity affiliates depreciation and amortization	31		33		37		38		139		39		36		37		38		150
Lower-of-cost-or-market inventory adjustments	—		—		—		—		—		—		—		—		2		2
Midstream Adjusted EBITDA*	244		213		322		288		1,067		384		256		273		257		1,170
*Proportional share of selected equity affiliates is net of noncontrolling interests.

Reconciliation of Chemicals Net Income to Adjusted EBITDA
Chemicals net income	282		181		262		261		986		316		324		230		267		1,137
Plus:
Provision for income taxes	121		51		105		98		375		126		142		98		129		495
Chemicals EBITDA	403		232		367		359		1,361		442		466		328		396		1,632

Adjustments (pretax):
Proportional share of selected equity affiliates income taxes	19		25		25		24		93		27		28		35		21		111
Proportional share of selected equity affiliates net interest	2		3		2		3		10		3		1		2		3		9
Proportional share of selected equity affiliates depreciation and amortization	58		60		60		68		246		62		62		64		70		258
Impairments	—		—		—		—		—		—		—		88		—		88
Lower-of-cost-or-market inventory adjustments	—		—		—		—		—		—		—		—		3		3
Chemicals Adjusted EBITDA	482		320		454		454		1,710		534		557		517		493		2,101

Reconciliation of Refining Net Income to Adjusted EBITDA
Refining net income (loss)	904		455		(30	)	418		1,747		306		390		558		517		1,771
Plus:
Provision for income taxes	467		280		22		266		1,035		202		257		301		(64	)	696
Depreciation and amortization	177		168		170		170		685		172		174		178		180		704
Refining EBITDA	1,548		903		162		854		3,467		680		821		1,037		633		3,171

Adjustments (pretax):
Proportional share of selected equity affiliates income taxes	2		1		—		(7	)	(4	)	—		1		—		2		3
Proportional share of selected equity affiliates net interest	(26	)	(24	)	(23	)	(22	)	(95	)	(19	)	—		—		—		(19	)
Proportional share of selected equity affiliates depreciation and amortization	58		57		60		62		237		61		61		61		62		245
Asset dispositions	—		—		—		—		—		—		—		—		(145	)	(145	)
Impairments	—		—		—		—		—		—		—		—		131		131
Pending claims and settlements	—		—		—		—		—		—		—		—		23		23
Tax law impacts	(22	)	—		—		—		(22	)	—		—		—		—		—
Lower-of-cost-or-market inventory adjustments	—		—		—		—		—		—		—		—		40		40
Refining Adjusted EBITDA	1,560		937		199		887		3,583		722		883		1,098		746		3,449

Reconciliation of Marketing and Specialties Net Income to Adjusted EBITDA
Marketing and Specialties net income	190		344		255		105		894		137		162		368		367		1,034
Plus:
Provision for income taxes	92		187		107		47		433		68		86		127		160		441
Depreciation and amortization	33		25		22		23		103		21		23		24		27		95
Marketing and Specialties EBITDA	315		556		384		175		1,430		226		271		519		554		1,570

Adjustments (pretax):
Asset dispositions	—		(40	)	—		—		(40	)	—		—		(109	)	(16	)	(125	)
Pending claims and settlements	(25	)	—		—		—		(25	)	—		—		—		(44	)	(44	)
Exit of a business line	54		—		—		—		54		—		—		—		—		—
Tax law impacts	(6	)	—		—		—		(6	)	—		—		—		—		—
Marketing and Specialties Adjusted EBITDA	338		516		384		175		1,413		226		271		410		494		1,401

Reconciliation of Phillips 66 Net Income to Adjusted EBITDA
Net income	1,410		960		540		833		3,743		1,578		872		1,189		1,158		4,797
Less:
Income from discontinued operations	15		14		14		18		61		706		—		—		—		706
Plus:
Provision for income taxes	663		507		278		396		1,844		426		487		538		203		1,654
Net interest expense	65		66		65		62		258		63		60		55		68		246
Depreciation and amortization	242		229		233		243		947		234		239		249		273		995
Phillips 66 EBITDA	2,365		1,748		1,102		1,516		6,731		1,595		1,658		2,031		1,702		6,986

Adjustments (pretax):
EBITDA attributable to Phillips 66 noncontrolling interests	(5	)	(4	)	(7	)	(8	)	(24	)	(8	)	(12	)	(13	)	(12	)	(45	)
Proportional share of selected equity affiliates income taxes	21		28		26		18		93		29		29		37		22		117
Proportional share of selected equity affiliates net interest	(2	)	1		12		14		25		14		32		31		31		108
Proportional share of selected equity affiliates depreciation and amortization	147		150		157		168		622		162		159		162		170		653
Asset dispositions	—		(40	)	—		—		(40	)	—		—		(109	)	(161	)	(270	)
Impairments	—		—		—		—		—		—		—		88		131		219
Exit of a business line	54		—		—		—		54		—		—		—		—		—
Tax law impacts	(28	)	—		—		—		(28	)	—		—		—		—		—
Pending claims and settlements	(25	)	—		—		—		(25	)	—		—		—		(21	)	(21	)
Lower-of-cost-or-market inventory adjustments	—		—		—		—		—		—		—		—		45		45
Phillips 66 Adjusted EBITDA	2,527		1,883		1,290		1,708		7,408		1,792		1,866		2,227		1,907		7,792

Use of Non-GAAP Financial Information—This earnings release supplemental data includes the terms EBITDA and adjusted EBITDA. These are non-GAAP financial measures. EBITDA and adjusted EBITDA are included to help facilitate comparisons of operating performance across periods, to help facilitate comparisons with other companies in our industry and to help facilitate determination of enterprise value. The GAAP measure most directly comparable to EBITDA and adjusted EBITDA is net income.