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Phillips 66 Announces 2013 Capital Program And Intent To Form MLP

Phillips 66 intends to build its financial strength and flexibility through disciplined capital allocation. Equity growth and debt reduction are expected to further improve the company’s debt-to-capital ratio within its target range of 20 to 30 percent by the end of 2013. The company plans to reduce debt by $2 billion by the end of next year. Phillips 66’s approach to capital allocation is designed to fund earnings growth and sustainability investments, while increasing distributions to shareholders through dividends and share repurchases.

Since becoming an independent company in May 2012, Phillips 66 has announced plans to increase its quarterly dividend by a total of 56 percent, and to repurchase $2 billion of outstanding common stock.

Complementary to its plans for growth, Phillips 66 is building a high-performing organization in order to promote business continuity and continued success. The company has a long heritage of safe, reliable and environmentally sound operations and continues to maintain a constant focus on operating excellence.

“Our dedicated employees enable us to pursue and execute our strategy. Together, we are delivering energy to the world and conducting our business with safety, honor and commitment,” Garland concluded.

Garland and other company executives will further discuss Phillips 66’s strategy at today’s Analyst Meeting, which will begin at 8:30 a.m. Eastern time. To access the live webcast, go to Phillips 66’s Investors site, www.phillips66.com/investors, and click on “Presentations and Conference Calls.” You should begin this procedure at least 15-20 minutes prior to the start of the webcast. A replay of the webcast will be archived on Phillips 66’s Investors site approximately two hours following the live call. A transcript also will be available on the Investors site at a later date.

   
Phillips 66 Planned 2013 Capital Program
Millions of Dollars
Selected
Phillips 66 Equity Capital
Consolidated Affiliates* Program
 
Refining and Marketing** $ 1,387 $ 112 $ 1,499
Midstream 361 1,100 1,461
Chemicals - 549 549
Corporate and Other       161     -     161
Total  

 

  $ 1,909   $ 1,761   $ 3,670
 

* Includes Phillips 66's share of capital spending by DCP Midstream, Chevron Phillips Chemical Company and

WRB Refining, which is expected to be self-funding in 2013.
** Includes non-cash capitalized lease of $152 million.
 

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.

DISCLOSURES UNDER RULE 135

A registration statement relating to the common units of the MLP that would be sold in the offering referred to above is expected to be filed with the Securities and Exchange Commission, but has not been filed or become effective. This announcement does not constitute an offer to sell, or the solicitation of an offer to buy, any securities. This announcement is being issued pursuant to, and in accordance with, Rule 135 under the Securities Act of 1933.

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.



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