Phillips 66 Reports Third-Quarter Earnings Of $1.6 Billion Or $2.51 Per Share

Later today, Phillips 66 Executive Vice President and Chief Financial Officer Greg G. Maxwell and Executive Vice President, Commercial, Marketing, Transportation and Business Development, Tim G. Taylor will host a webcast at 11 a.m. EDT to discuss the company’s third-quarter performance and provide an update on strategic initiatives. To listen to the conference call and view related presentation materials, go to www.phillips66.com/investors and click on “Presentations and Conference Calls.” For detailed supplemental information, go to http://www.phillips66.com/EN/investor/financial_reports/earnings_reports/Pages/index.aspx .

Phillips 66 will hold its first Analyst Meeting on Dec. 13, 2012 in New York. Representatives from company management will discuss Phillips 66’s strategic plans for growth and value creation. The presentation will be available via live webcast on Phillips 66’s Investors site.

	Earnings
				Millions of Dollars
				Third Quarter								Nine Months
					2012				2011				2012				2011
	Refining and Marketing (R&M)
	Refining			$	1,580			$	533			$	2,839			$	1,469
	Marketing, Specialties and Other				68				252				393				578
	Total R&M				1,648				785				3,232				2,047
	Midstream				(77	)			118				(79	)			290
	Chemicals				153				193				577				568
	Corporate and Other				(125	)			(47	)			(314	)			(141	)
	Phillips 66			$	1,599			$	1,049			$	3,416			$	2,764
	Adjusted Earnings
				Millions of Dollars
				Third Quarter								Nine Months
					2012				2011				2012				2011
	Refining and Marketing (R&M)
	Refining			$	1,580			$	1,012			$	2,869			$	1,948
	Marketing, Specialties and Other				95				249				519				547
	Total R&M				1,675				1,261				3,388				2,495
	Midstream				56				118				224				290
	Chemicals				275				193				734				568
	Corporate and Other				(112	)			(47	)			(271	)			(141	)
	Phillips 66			$	1,894			$	1,525			$	4,075			$	3,212

About Phillips 66

Headquartered in Houston, Phillips 66 is an advantaged downstream energy company with segment-leading Refining and Marketing (R&M), Midstream and Chemicals businesses. The company has approximately 14,000 employees worldwide. Phillips 66’s R&M operations include 15 refineries with a net crude oil capacity of 2.2 million barrels per day, 10,000 branded marketing outlets, and 15,000 miles of pipeline systems. In Midstream, the company primarily conducts operations through its 50 percent interest in DCP Midstream, LLC, one of the largest natural gas gatherers and processors in the United States, with 7.2 billion cubic feet per day of gross natural gas processing capacity. Phillips 66’s Chemicals business is conducted through its 50 percent interest in Chevron Phillips Chemical Company LLC, one of the world’s top producers of olefins and polyolefins with more than 30 billion pounds of net annual chemicals processing capacity across its product lines. For more information, visit www.phillips66.com or follow us on Twitter @Phillips66Co .

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, refining and marketing margins and margins for our chemicals business; 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 for remedial actions, including removal and reclamation obligations, under environmental regulations; potential liability resulting from litigation; 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, including our Form 10 Registration Statement. 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 press release includes the terms adjusted earnings, adjusted earnings per share, and net-debt-to-capital ratio. These are non-GAAP financial measures. Adjusted earnings and adjusted earnings per share are included to help facilitate comparisons of company operating performance across periods. The net-debt-to-capital ratio reduces debt and capital by the amount of cash and cash equivalents shown on the balance sheet for the reflected period, and is presented to reflect the net results if the company elected to utilize its cash balances to reduce debt in the future.

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

Reconciliation of Earnings to Adjusted Earnings
			Millions of Dollars
			Except as Indicated
			2012								2011
			3Q				Sep YTD				3Q				Sep YTD
Consolidated
Earnings (loss)			$	1,599			$	3,416			$	1,049			$	2,764
Adjustments:
Net (gain) loss on asset sales								(106	)			143				115
Impairments				187				399				318				318
Severance accruals												15				15
Pending claims and settlements								57
Premium on early debt retirement				54				89
Repositioning costs				13				43
Repositioning tax impacts				41				177
Adjusted earnings			$	1,894			$	4,075			$	1,525			$	3,212
Earnings per share of common stock (dollars)			$	2.51			$	5.37			$	1.65			$	4.36
Adjusted earnings per share of common stock (dollars)			$	2.97			$	6.40			$	2.40			$	5.06
R&M
Earnings (loss)			$	1,648			$	3,232			$	785			$	2,047
Adjustments:
Net (gain) loss on asset sales								(106	)			143				115
Impairments				27				69				318				318
Severance accruals												15				15
Pending claims and settlements								57
Repositioning tax impacts								136
Adjusted earnings			$	1,675			$	3,388			$	1,261			$	2,495
Refining
Earnings (loss)			$	1,580			$	2,839			$	533			$	1,469
Adjustments:
Net (gain) loss on asset sales								(104	)			146				146
Impairments								42				318				318
Severance accruals												15				15
Pending claims and settlements								19
Repositioning tax impacts								73
Adjusted earnings			$	1,580			$	2,869			$	1,012			$	1,948
Marketing, Specialties and Other
Earnings (loss)			$	68			$	393			$	252			$	578
Adjustments:
Net (gain) loss on asset sales								(2	)			(3	)			(31	)
Impairments				27				27
Pending claims and settlements								38
Repositioning tax impacts								63
Adjusted earnings			$	95			$	519			$	249			$	547
Midstream
Earnings (loss)			$	(77	)		$	(79	)		$	118			$	290
Adjustments:
Impairments				133				303
Adjusted earnings			$	56			$	224			$	118			$	290
Chemicals
Earnings (loss)			$	153			$	577			$	193			$	568
Adjustments:
Impairments			$	27			$	27
Premium on early debt retirement				54				89
Repositioning tax impacts				41				41
Adjusted earnings			$	275			$	734			$	193			$	568
Corporate and Other
Earnings (loss)			$	(125	)		$	(314	)		$	(47	)		$	(141	)
Adjustments:
Repositioning costs				13				43
Adjusted earnings			$	(112	)		$	(271	)		$	(47	)		$	(141	)

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