Condensed Consolidating Financial Information

Our $7.5 billion of outstanding Senior Notes issued by Phillips 66 are guaranteed by Phillips 66 Company, a 100-percent-owned subsidiary. Phillips 66 Company has fully and unconditionally guaranteed the payment obligations of Phillips 66 with respect to these debt securities. The following condensed consolidating financial information presents the results of operations, financial position and cash flows for:


•	Phillips 66 and Phillips 66 Company (in each case, reflecting investments in subsidiaries utilizing the equity method of accounting).


•	All other nonguarantor subsidiaries.


•	The consolidating adjustments necessary to present Phillips 66’s results on a consolidated basis.

This condensed consolidating financial information should be read in conjunction with the accompanying consolidated financial statements and notes.



	Millions of Dollars
	Year Ended December 31, 2016
Statement of Income	Phillips 66			Phillips 66 Company		All Other Subsidiaries		Consolidating Adjustments		Total Consolidated
Revenues and Other Income
Sales and other operating revenues	$	—		58,822		25,457		—		84,279
Equity in earnings of affiliates	1,797			1,839		296		(2,518	)	1,414
Net gain (loss) on dispositions	—			(9	)	19		—		10
Other income	—			42		32		—		74
Intercompany revenues	—			864		9,160		(10,024	)	—
Total Revenues and Other Income	1,797			61,558		34,964		(12,542	)	85,777

Costs and Expenses
Purchased crude oil and products	—			48,171		24,102		(9,805	)	62,468
Operating expenses	—			3,465		846		(36	)	4,275
Selling, general and administrative expenses	6			1,236		406		(10	)	1,638
Depreciation and amortization	—			821		347		—		1,168
Impairments	—			1		4		—		5
Taxes other than income taxes	—			5,477		8,211		—		13,688
Accretion on discounted liabilities	—			16		5		—		21
Interest and debt expense	366			21		124		(173	)	338
Foreign currency transaction gains	—			—		(15	)	—		(15	)
Total Costs and Expenses	372			59,208		34,030		(10,024	)	83,586
Income from continuing operations before income taxes	1,425			2,350		934		(2,518	)	2,191
Provision (benefit) for income taxes	(130		)	553		124		—		547
Income from Continuing Operations	1,555			1,797		810		(2,518	)	1,644
Income from discontinued operations	—			—		—		—		—
Net income	1,555			1,797		810		(2,518	)	1,644
Less: net income attributable to noncontrolling interests	—			—		89		—		89
Net Income Attributable to Phillips 66	$	1,555		1,797		721		(2,518	)	1,555

Comprehensive Income	$	1,213		1,455		451		(1,817	)	1,302



	Millions of Dollars
	Year Ended December 31, 2015
Statement of Income	Phillips 66			Phillips 66 Company		All Other Subsidiaries		Consolidating Adjustments		Total Consolidated
Revenues and Other Income
Sales and other operating revenues	$	—		68,478		30,497		—		98,975
Equity in earnings (losses) of affiliates	4,470			2,812		(134	)	(5,575	)	1,573
Net gain (loss) on dispositions	—			(115	)	398		—		283
Other income	—			81		37		—		118
Intercompany revenues	—			1,071		9,845		(10,916	)	—
Total Revenues and Other Income	4,470			72,327		40,643		(16,491	)	100,949

Costs and Expenses
Purchased crude oil and products	—			54,925		29,221		(10,747	)	73,399
Operating expenses	4			3,412		917		(39	)	4,294
Selling, general and administrative expenses	5			1,265		416		(16	)	1,670
Depreciation and amortization	—			818		260		—		1,078
Impairments	—			4		3		—		7
Taxes other than income taxes	—			5,505		8,572		—		14,077
Accretion on discounted liabilities	—			16		5		—		21
Interest and debt expense	365			25		34		(114	)	310
Foreign currency transaction losses	—			1		48		—		49
Total Costs and Expenses	374			65,971		39,476		(10,916	)	94,905
Income from continuing operations before income taxes	4,096			6,356		1,167		(5,575	)	6,044
Provision (benefit) for income taxes	(131		)	1,886		9		—		1,764
Income from Continuing Operations	4,227			4,470		1,158		(5,575	)	4,280
Income from discontinued operations	—			—		—		—		—
Net income	4,227			4,470		1,158		(5,575	)	4,280
Less: net income attributable to noncontrolling interests	—			—		53		—		53
Net Income Attributable to Phillips 66	$	4,227		4,470		1,105		(5,575	)	4,227

Comprehensive Income	$	4,105		4,348		1,032		(5,327	)	4,158



	Millions of Dollars
	Year Ended December 31, 2014
Statement of Income	Phillips 66			Phillips 66 Company		All Other Subsidiaries	Consolidating Adjustments		Total Consolidated
Revenues and Other Income
Sales and other operating revenues	$	—		109,078		52,134	—		161,212
Equity in earnings of affiliates	4,257			3,021		444	(5,256	)	2,466
Net gain (loss) on dispositions	—			(46	)	341	—		295
Other income	—			105		15	—		120
Intercompany revenues	—			2,411		18,772	(21,183	)	—
Total Revenues and Other Income	4,257			114,569		71,706	(26,439	)	164,093

Costs and Expenses
Purchased crude oil and products	—			97,783		58,984	(21,019	)	135,748
Operating expenses	2			3,600		870	(37	)	4,435
Selling, general and administrative expenses	6			1,224		502	(69	)	1,663
Depreciation and amortization	—			761		234	—		995
Impairments	—			3		147	—		150
Taxes other than income taxes	—			5,478		9,563	(1	)	15,040
Accretion on discounted liabilities	—			18		6	—		24
Interest and debt expense	286			18		20	(57	)	267
Foreign currency transaction losses	—			—		26	—		26
Total Costs and Expenses	294			108,885		70,352	(21,183	)	158,348
Income from continuing operations before income taxes	3,963			5,684		1,354	(5,256	)	5,745
Provision (benefit) for income taxes	(103		)	1,427		330	—		1,654
Income from Continuing Operations	4,066			4,257		1,024	(5,256	)	4,091
Income from discontinued operations*	696			—		10	—		706
Net income	4,762			4,257		1,034	(5,256	)	4,797
Less: net income attributable to noncontrolling interests	—			—		35	—		35
Net Income Attributable to Phillips 66	$	4,762		4,257		999	(5,256	)	4,762

Comprehensive Income	$	4,194		3,689		721	(4,375	)	4,229
*Net of provision for income taxes on discontinued operations:	$	—		—		5	—		5



	Millions of Dollars
	At December 31, 2016
Balance Sheet	Phillips 66			Phillips 66 Company		All Other Subsidiaries		Consolidating Adjustments		Total Consolidated
Assets
Cash and cash equivalents	$	—		854		1,857		—		2,711
Accounts and notes receivable	13			4,336		3,276		(1,228	)	6,397
Inventories	—			2,198		952		—		3,150
Prepaid expenses and other current assets	2			317		103		—		422
Total Current Assets	15			7,705		6,188		(1,228	)	12,680
Investments and long-term receivables	31,165			22,733		8,588		(48,952	)	13,534
Net properties, plants and equipment	—			13,044		7,811		—		20,855
Goodwill	—			2,853		417		—		3,270
Intangibles	—			719		169		—		888
Other assets	15			245		168		(2	)	426
Total Assets	$	31,195		47,299		23,341		(50,182	)	51,653

Liabilities and Equity
Accounts payable	$	—		5,626		2,663		(1,228	)	7,061
Short-term debt	500			30		20		—		550
Accrued income and other taxes	—			348		457		—		805
Employee benefit obligations	—			475		52		—		527
Other accruals	59			371		90		—		520
Total Current Liabilities	559			6,850		3,282		(1,228	)	9,463
Long-term debt	6,920			150		2,518		—		9,588
Asset retirement obligations and accrued environmental costs	—			501		154		—		655
Deferred income taxes	—			4,391		2,354		(2	)	6,743
Employee benefit obligations	—			948		268		—		1,216
Other liabilities and deferred credits	1,297			3,337		4,060		(8,431	)	263
Total Liabilities	8,776			16,177		12,636		(9,661	)	27,928
Common stock	10,777			25,403		10,117		(35,520	)	10,777
Retained earnings	12,637			6,714		(269	)	(6,474	)	12,608
Accumulated other comprehensive loss	(995		)	(995	)	(478	)	1,473		(995	)
Noncontrolling interests	—			—		1,335		—		1,335
Total Liabilities and Equity	$	31,195		47,299		23,341		(50,182	)	51,653



	Millions of Dollars
	At December 31, 2015
Balance Sheet	Phillips 66			Phillips 66 Company		All Other Subsidiaries		Consolidating Adjustments		Total Consolidated
Assets
Cash and cash equivalents	$	—		575		2,499		—		3,074
Accounts and notes receivable	14			3,643		2,217		(701	)	5,173
Inventories	—			2,171		1,306		—		3,477
Prepaid expenses and other current assets	2			382		148		—		532
Total Current Assets	16			6,771		6,170		(701	)	12,256
Investments and long-term receivables	33,315			24,068		7,395		(52,635	)	12,143
Net properties, plants and equipment	—			12,651		7,070		—		19,721
Goodwill	—			3,040		235		—		3,275
Intangibles	—			726		180		—		906
Other assets	16			154		113		(4	)	279
Total Assets	$	33,347		47,410		21,163		(53,340	)	48,580

Liabilities and Equity
Accounts payable	$	—		4,015		2,341		(701	)	5,655
Short-term debt	—			25		19		—		44
Accrued income and other taxes	—			320		558		—		878
Employee benefit obligations	—			528		48		—		576
Other accruals	59			240		79		—		378
Total Current Liabilities	59			5,128		3,045		(701	)	7,531
Long-term debt	7,413			158		1,272		—		8,843
Asset retirement obligations and accrued environmental costs	—			496		169		—		665
Deferred income taxes	—			4,500		1,545		(4	)	6,041
Employee benefit obligations	—			1,094		191		—		1,285
Other liabilities and deferred credits	2,746			2,765		3,734		(8,968	)	277
Total Liabilities	10,218			14,141		9,956		(9,673	)	24,642
Common stock	11,405			25,404		10,688		(36,092	)	11,405
Retained earnings	12,377			8,518		(200	)	(8,347	)	12,348
Accumulated other comprehensive loss	(653		)	(653	)	(119	)	772		(653	)
Noncontrolling interests	—			—		838		—		838
Total Liabilities and Equity	$	33,347		47,410		21,163		(53,340	)	48,580



	Millions of Dollars
	Year Ended December 31, 2016
Statement of Cash Flows	Phillips 66			Phillips 66 Company		All Other Subsidiaries		Consolidating Adjustments		Total Consolidated
Cash Flows From Operating Activities
Net cash provided by continuing operating activities	$	3,491		2,307		503		(3,338	)	2,963
Net cash provided by discontinued operations	—			—		—		—		—
Net Cash Provided by Operating Activities	3,491			2,307		503		(3,338	)	2,963

Cash Flows From Investing Activities
Capital expenditures and investments*	—			(1,425	)	(1,457	)	38		(2,844	)
Proceeds from asset dispositions**	—			1,007		156		(1,007	)	156
Intercompany lending activities	(1,139		)	2,046		(907	)	—		—
Advances/loans—related parties	—			(75	)	(357	)	—		(432	)
Collection of advances/loans—related parties	—			—		108		—		108
Other	—			18		(164	)	—		(146	)
Net cash provided by (used in) continuing investing activities	(1,139		)	1,571		(2,621	)	(969	)	(3,158	)
Net cash provided by (used in) discontinued operations	—			—		—		—		—
Net Cash Provided by (Used in) Investing Activities	(1,139		)	1,571		(2,621	)	(969	)	(3,158	)

Cash Flows From Financing Activities
Issuance of debt	—			—		2,090		—		2,090
Repayment of debt	—			(26	)	(807	)	—		(833	)
Issuance of common stock	(12		)	—		—		—		(12	)
Repurchase of common stock	(1,042		)	—		—		—		(1,042	)
Dividends paid on common stock	(1,282		)	(3,604	)	(783	)	4,387		(1,282	)
Distributions to controlling interests	—			—		1,049		(1,049	)	—
Distributions to noncontrolling interests	—			—		(75	)	—		(75	)
Net proceeds from issuance of Phillips 66 Partners LP common units	—			—		972		—		972
Other*	(16		)	31		(980	)	969		4
Net cash provided by (used in) continuing financing activities	(2,352		)	(3,599	)	1,466		4,307		(178	)
Net cash provided by (used in) discontinued operations	—			—		—		—		—
Net Cash Provided by (Used in) Financing Activities	(2,352		)	(3,599	)	1,466		4,307		(178	)

Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—		10		—		10

Net Change in Cash and Cash Equivalents	—			279		(642	)	—		(363	)
Cash and cash equivalents at beginning of period				575		2,499		—		3,074
Cash and Cash Equivalents at End of Period	$	—		854		1,857		—		2,711
* Includes intercompany capital contributions.
** Includes return of investments in equity affiliates and working capital true-ups on dispositions.



	Millions of Dollars
	Year Ended December 31, 2015
Statement of Cash Flows	Phillips 66			Phillips 66 Company		All Other Subsidiaries		Consolidating Adjustments		Total Consolidated
Cash Flows From Operating Activities
Net cash provided by continuing operating activities	$	1,060		4,879		2,564		(2,790	)	5,713
Net cash provided by discontinued operations	—			—		—		—		—
Net Cash Provided by Operating Activities	1,060			4,879		2,564		(2,790	)	5,713

Cash Flows From Investing Activities
Capital expenditures and investments*	—			(2,815	)	(5,283	)	2,334		(5,764	)
Proceeds from asset dispositions**	—			774		178		(882	)	70
Intercompany lending activities	2,461			(3,153	)	692		—		—
Advances/loans—related parties	—			(50	)	—		—		(50	)
Collection of advances/loans—related parties	—			50		—		—		50
Other	—			6		(50	)	—		(44	)
Net cash provided by (used in) continuing investing activities	2,461			(5,188	)	(4,463	)	1,452		(5,738	)
Net cash provided by (used in) discontinued operations	—			—		—		—		—
Net Cash Provided by (Used in) Investing Activities	2,461			(5,188	)	(4,463	)	1,452		(5,738	)

Cash Flows From Financing Activities
Issuance of debt	—			—		1,169		—		1,169
Repayment of debt	(800		)	(23	)	(103	)	—		(926	)
Issuance of common stock	(19		)	—		—		—		(19	)
Repurchase of common stock	(1,512		)	—		—		—		(1,512	)
Dividends paid on common stock	(1,172		)	(1,172	)	(1,576	)	2,748		(1,172	)
Distributions to controlling interests	—			—		(186	)	186		—
Distributions to noncontrolling interests	—			—		(46	)	—		(46	)
Net proceeds from issuance of Phillips 66 Partners LP common units	—			—		384		—		384
Other*	(18		)	34		1,585		(1,596	)	5
Net cash provided by (used in) continuing financing activities	(3,521		)	(1,161	)	1,227		1,338		(2,117	)
Net cash provided by (used in) discontinued operations	—			—		—		—		—
Net Cash Provided by (Used in) Financing Activities	(3,521		)	(1,161	)	1,227		1,338		(2,117	)

Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—		9		—		9

Net Change in Cash and Cash Equivalents	—			(1,470	)	(663	)	—		(2,133	)
Cash and cash equivalents at beginning of period	—			2,045		3,162		—		5,207
Cash and Cash Equivalents at End of Period	$	—		575		2,499		—		3,074
* Includes intercompany capital contributions.
** Includes return of investments in equity affiliates and working capital true-ups on dispositions.



	Millions of Dollars
	Year Ended December 31, 2014
Statement of Cash Flows	Phillips 66			Phillips 66 Company		All Other Subsidiaries		Consolidating Adjustments		Total Consolidated
Cash Flows From Operating Activities
Net cash provided by (used in) continuing operating activities	$	(47	)	2,551		1,527		(504	)	3,527
Net cash provided by discontinued operations	—			—		2		—		2
Net Cash Provided by (Used in) Operating Activities	(47		)	2,551		1,529		(504	)	3,529

Cash Flows From Investing Activities
Capital expenditures and investments*	—			(2,230	)	(2,532	)	989		(3,773	)
Proceeds from asset dispositions	—			960		687		(403	)	1,244
Intercompany lending activities**	1,397			(1,402	)	5		—		—
Advances/loans—related parties	—			—		(3	)	—		(3	)
Other	—			(13	)	251		—		238
Net cash provided by (used in) continuing investing activities	1,397			(2,685	)	(1,592	)	586		(2,294	)
Net cash used in discontinued operations	—			—		(2	)	—		(2	)
Net Cash Provided by (Used in) Investing Activities	1,397			(2,685	)	(1,594	)	586		(2,296	)

Cash Flows From Financing Activities
Issuance of debt	2,459			—		28		—		2,487
Repayment of debt	—			(20	)	(29	)	—		(49	)
Issuance of common stock	1			—		—		—		1
Repurchase of common stock	(2,282		)	—		—		—		(2,282	)
Share exchange—PSPI transaction	(450		)	—		—		—		(450	)
Dividends paid on common stock	(1,062		)	—		(443	)	443		(1,062	)
Distributions to controlling interests	—			—		(323	)	323		—
Distributions to noncontrolling interests	—			—		(30	)	—		(30	)
Other*	(16		)	37		850		(848	)	23
Net cash provided by (used in) continuing financing activities	(1,350		)	17		53		(82	)	(1,362	)
Net cash provided by (used in) discontinued operations	—			—		—		—		—
Net Cash Provided by (Used in) Financing Activities	(1,350		)	17		53		(82	)	(1,362	)

Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—		(64	)	—		(64	)

Net Change in Cash and Cash Equivalents	—			(117	)	(76	)	—		(193	)
Cash and cash equivalents at beginning of period	—			2,162		3,238		—		5,400
Cash and Cash Equivalents at End of Period	$	—		2,045		3,162		—		5,207
* Includes intercompany capital contributions.
** Non-cash investing activity: In the fourth quarter of 2014, Phillips 66 Company declared and distributed $6.1 billion of its Phillips 66 intercompany receivables to Phillips 66.