10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014

or

[    ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-35349

Phillips 66

(Exact name of registrant as specified in its charter)

Delaware	45-3779385
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3010 Briarpark Drive, Houston, Texas 77042

(Address of principal executive offices) (Zip Code)

281-293-6600

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  [X]    No  [    ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes  [X]    No  [    ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer   [X]        Accelerated filer  [    ]        Non-accelerated filer   [    ]        Smaller reporting company  [    ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  [    ]    No  [X]

The registrant had 565,845,802 shares of common stock, $.01 par value, outstanding as of March 31, 2014.

PHILLIPS 66

TABLE OF CONTENTS

	Page
Part I – Financial Information
Item 1. Financial Statements
Consolidated Statement of Income	1
Consolidated Statement of Comprehensive Income	2
Consolidated Balance Sheet	3
Consolidated Statement of Cash Flows	4
Consolidated Statement of Changes in Equity	5
Notes to Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3. Quantitative and Qualitative Disclosures About Market Risk	45
Item 4. Controls and Procedures	45
Part II – Other Information
Item 1. Legal Proceedings	45
Item 1A. Risk Factors	46
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 6. Exhibits	47
Signatures	48

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

Consolidated Statement of Income Phillips 66

	Millions of Dollars
	Three Months Ended March 31
	2014			2013
Revenues and Other Income
Sales and other operating revenues*	$	40,283		41,211
Equity in earnings of affiliates	778			1,039
Net gain on dispositions	7			1
Other income	31			23
Total Revenues and Other Income	41,099			42,274
Costs and Expenses
Purchased crude oil and products	34,381			35,243
Operating expenses	1,090			978
Selling, general and administrative expenses	402			327
Depreciation and amortization	234			242
Impairments	1			24
Taxes other than income taxes*	3,638			3,324
Accretion on discounted liabilities	6			6
Interest and debt expense	68			70
Foreign currency transaction (gains) losses	(19		)	2
Total Costs and Expenses	39,801			40,216
Income from continuing operations before income taxes	1,298			2,058
Provision for income taxes	426			663
Income From Continuing Operations	872			1,395
Income from discontinued operations**	706			15
Net Income	1,578			1,410
Less: net income attributable to noncontrolling interests	6			3
Net Income Attributable to Phillips 66	$	1,572		1,407
Amounts Attributable to Phillips 66 Common Stockholders:
Income from continuing operations	$	866		1,392
Income from discontinued operations	706			15
Net Income Attributable to Phillips 66	$	1,572		1,407
Net Income Attributable to Phillips 66 Per Share of Common Stock (dollars)
Basic
Continuing operations	$	1.48		2.23
Discontinued operations	1.21			0.02
Net Income Attributable to Phillips 66 Per Share of Common Stock	$	2.69		2.25
Diluted
Continuing operations	$	1.47		2.21
Discontinued operations	1.20			0.02
Net Income Attributable to Phillips 66 Per Share of Common Stock	$	2.67		2.23
Dividends Paid Per Share of Common Stock (dollars)	$	0.3900		0.3125
Average Common Shares Outstanding(in thousands)
Basic	584,053			625,030
Diluted	589,575			631,288
* Includes excise taxes on petroleum products sales:	$	3,522		3,258
** Net of provision for income taxes on discontinued operations:	$	5		8
Prior period amounts have been recast to reflect discontinued operations.
See Notes to Consolidated Financial Statements.

1

Consolidated Statement of Comprehensive Income Phillips 66

	Millions of Dollars
	Three Months Ended March 31
	2014			2013
Net Income	$	1,578		1,410
Other comprehensive income (loss)
Defined benefit plans
Actuarial gain/loss:
Amortization to net income of net actuarial loss	12			26
Plans sponsored by equity affiliates	3			(13	)
Income taxes on defined benefit plans	(5		)	(3	)
Defined benefit plans, net of tax	10			10
Foreign currency translation adjustments	31			(322	)
Income taxes on foreign currency translation adjustments	(1		)	4
Foreign currency translation adjustments, net of tax	30			(318	)
Other Comprehensive Income (Loss), Net of Tax	40			(308	)
Comprehensive Income	1,618			1,102
Less: comprehensive income attributable to noncontrolling interests	6			3
Comprehensive Income Attributable to Phillips 66	$	1,612		1,099

See Notes to Consolidated Financial Statements.

2

Consolidated Balance Sheet Phillips 66

	Millions of Dollars
	March 31 2014			December 31 2013
Assets
Cash and cash equivalents	$	5,326		5,400
Accounts and notes receivable (net of allowances of $47 million in 2014 and 2013)	7,298			7,900
Accounts and notes receivable—related parties	1,822			1,732
Inventories	5,908			3,354
Prepaid expenses and other current assets	705			851
Total Current Assets	21,059			19,237
Investments and long-term receivables	10,001			11,220
Net properties, plants and equipment	15,751			15,398
Goodwill	3,141			3,096
Intangibles	737			698
Other assets	158			149
Total Assets	$	50,847		49,798
Liabilities
Accounts payable	$	11,390		9,948
Accounts payable—related parties	1,233			1,142
Short-term debt	40			24
Accrued income and other taxes	1,591			872
Employee benefit obligations	232			476
Other accruals	678			469
Total Current Liabilities	15,164			12,931
Long-term debt	6,177			6,131
Asset retirement obligations and accrued environmental costs	697			700
Deferred income taxes	5,692			6,125
Employee benefit obligations	793			921
Other liabilities and deferred credits	495			598
Total Liabilities	29,018			27,406
Equity
Common stock (2,500,000,000 shares authorized at $.01 par value)      Issued (2014—635,784,906 shares; 2013—634,285,955 shares)
Par value	6			6
Capital in excess of par	18,932			18,887
Treasury stock (at cost: 2014—69,939,104 shares; 2013—44,106,380 shares)	(4,592		)	(2,602	)
Retained earnings	6,962			5,622
Accumulated other comprehensive income	77			37
Total Stockholders’ Equity	21,385			21,950
Noncontrolling interests	444			442
Total Equity	21,829			22,392
Total Liabilities and Equity	$	50,847		49,798

See Notes to Consolidated Financial Statements.

3

Consolidated Statement of Cash Flows Phillips 66

	Millions of Dollars
	Three Months Ended March 31
	2014			2013
Cash Flows From Operating Activities
Net income	$	1,578		1,410
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	234			242
Impairments	1			24
Accretion on discounted liabilities	6			6
Deferred taxes	(444		)	82
Undistributed equity earnings	632			77
Net gain on dispositions	(7		)	(1	)
Income from discontinued operations	(706		)	(15	)
Other	(21		)	(34	)
Working capital adjustments
Decrease (increase) in accounts and notes receivable	619			283
Decrease (increase) in inventories	(2,567		)	(2,443	)
Decrease (increase) in prepaid expenses and other current assets	(132		)	(71	)
Increase (decrease) in accounts payable	1,505			2,465
Increase (decrease) in taxes and other accruals	698			166
Net cash provided by continuing operating activities	1,396			2,191
Net cash provided by discontinued operations	2			22
Net Cash Provided by Operating Activities	1,398			2,213
Cash Flows From Investing Activities
Capital expenditures and investments	(572		)	(382	)
Proceeds from asset dispositions*	507			9
Collection of advances/loans—related parties	—			55
Other	13			—
Net cash used in continuing investing activities	(52		)	(318	)
Net cash used in discontinued operations	(34		)	(5	)
Net Cash Used in Investing Activities	(86		)	(323	)
Cash Flows From Financing Activities
Repayment of debt	(8		)	(3	)
Issuance of common stock	(20		)	(6	)
Repurchase of common stock	(640		)	(382	)
Share exchange—PSPI transaction	(450		)	—
Dividends paid on common stock	(229		)	(194	)
Distributions to noncontrolling interests	(4		)	—
Other	(4		)	—
Net cash used in continuing financing activities	(1,355		)	(585	)
Net cash provided by (used in) discontinued operations	—			—
Net Cash Used in Financing Activities	(1,355		)	(585	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	(31		)	(26	)
Net Change in Cash and Cash Equivalents	(74		)	1,279
Cash and cash equivalents at beginning of period	5,400			3,474
Cash and Cash Equivalents at End of Period	$	5,326		4,753

* Includes return on investments in equity affiliates.

Prior period amounts have been recast to reflect discontinued operations.

See Notes to Consolidated Financial Statements.

4

Consolidated Statement of Changes in Equity Phillips 66

	Millions of Dollars
	Attributable to Phillips 66
	Common Stock
	Par Value		Capital in Excess of Par		Treasury Stock		Retained Earnings		Accum. Other Comprehensive Income (Loss)		Noncontrolling Interests		Total
December 31, 2012	$	6	18,726		(356	)	2,713		(314	)	31		20,806
Net income	—		—		—		1,407		—		3		1,410
Other comprehensive loss	—		—		—		—		(308	)	—		(308	)
Cash dividends paid on common stock	—		—		—		(194	)	—		—		(194	)
Repurchase of common stock	—		—		(382	)	—		—		—		(382	)
Benefit plan activity	—		52		—		(3	)	—		—		49
Distributions to noncontrolling interests and other	—		(3	)	—		—		—		—		(3	)
March 31, 2013	$	6	18,775		(738	)	3,923		(622	)	34		21,378
December 31, 2013	$	6	18,887		(2,602	)	5,622		37		442		22,392
Net income	—		—		—		1,572		—		6		1,578
Other comprehensive income	—		—		—		—		40		—		40
Cash dividends paid on common stock	—		—		—		(229	)	—		—		(229	)
Repurchase of common stock	—		—		(640	)	—		—		—		(640	)
Share exchange—PSPI transaction	—		—		(1,350	)	—		—		—		(1,350	)
Benefit plan activity	—		45		—		(3	)	—		—		42
Distributions to noncontrolling interests and other	—		—		—		—		—		(4	)	(4	)
March 31, 2014	$	6	18,932		(4,592	)	6,962		77		444		21,829

	Shares in Thousands
	Common Stock Issued	Treasury Stock
December 31, 2012	631,150	7,604
Repurchase of common stock	—	6,403
Shares issued—share-based compensation	2,089	—
March 31, 2013	633,239	14,007
December 31, 2013	634,286	44,106
Repurchase of common stock	—	8,410
Share exchange—PSPI transaction	—	17,423
Shares issued—share-based compensation	1,499	—
March 31, 2014	635,785	69,939

See Notes to Consolidated Financial Statements.

5

Notes to Consolidated Financial Statements Phillips 66

Note 1—Interim Financial Information

The interim financial information presented in the financial statements included in this report is unaudited and includes all known accruals and adjustments necessary, in the opinion of management, for a fair presentation of the consolidated financial position of Phillips 66 and its results of operations and cash flows for the periods presented. Unless otherwise specified, all such adjustments are of a normal and recurring nature. Certain notes and other information have been condensed or omitted from the interim financial statements included in this report. Therefore, these interim financial statements should be read in conjunction with the consolidated financial statements and notes included in our 2013 Annual Report on Form 10-K. The results of operations for the three months ended March 31, 2014, are not necessarily indicative of the results to be expected for the full year.

Certain prior period financial information has been recast to reflect the change in the composition of our operating segments. See Note 19—Segment Disclosures and Related Information for additional information.

Note 2—Variable Interest Entities (VIEs)

In 2013, we formed Phillips 66 Partners LP, a master limited partnership, to own, operate, develop and acquire primarily fee-based crude oil, refined petroleum product and natural gas liquids pipelines and terminals, as well as other transportation and midstream assets. We consolidate Phillips 66 Partners as we determined that Phillips 66 Partners is a VIE and we are the primary beneficiary. As general partner, we have the ability to control its financial interests, as well as the ability to direct the activities of Phillip 66 Partners that most significantly impact its economic performance. See Note 21—Phillips 66 Partners LP for additional information.

We hold significant variable interests in VIEs that have not been consolidated because we are not considered the primary beneficiary. Information on these VIEs follows:

Merey Sweeny, L.P. (MSLP) is a limited partnership that owns a delayed coker and related facilities at the Sweeny Refinery. As discussed more fully in Note 5—Investments, Loans and Long-Term Receivables, in August 2009, a call right was exercised to acquire the 50 percent ownership interest in MSLP of the co-venturer, Petróleos de Venezuela S.A. (PDVSA). That exercise was challenged, and the dispute has been arbitrated. In April 2014, the arbitral tribunal upheld the exercise of the call right and the acquisition of the 50 percent ownership interest. PDVSA has a right to appeal the ruling in U.S. district court. Because an appeal may be filed by PDVSA, we continue to use the equity method of accounting for MSLP, and the VIE analysis below is based on the ownership and governance structure in place prior to the exercise of the call right. MSLP is a VIE because, in securing lender consents in connection with our separation from ConocoPhillips in 2012 (the Separation), we provided a 100 percent debt guarantee to the lender of the 8.85% senior notes issued by MSLP. PDVSA did not participate in the debt guarantee. In our VIE assessment, this disproportionate debt guarantee, plus other liquidity support provided jointly by us and PDVSA independently of equity ownership, results in MSLP not being exposed to all potential losses. We have determined we are not the primary beneficiary while our call exercise is in dispute because under the partnership agreement the co-venturers jointly direct the activities of MSLP that most significantly impact economic performance. At March 31, 2014, our maximum exposure to loss represented the outstanding debt principal balance of $214 million and our investment of $116 million.

We have a 50 percent ownership interest with a 50 percent governance interest in Excel Paralubes (Excel). Excel is a VIE because, in securing lender consents in connection with the Separation, ConocoPhillips provided a 50 percent debt guarantee to the lender of the 7.43% senior secured bonds issued by Excel. We provided a full indemnity to ConocoPhillips for this debt guarantee. Our co-venturer did not participate in the debt guarantee. In our assessment of the VIE, this debt guarantee, plus other liquidity support up to $60 million provided jointly by us and our co-venturer independently of equity ownership, results in Excel not being exposed to all potential losses. We have determined we are not the primary beneficiary because we and our co-venturer jointly direct the activities of Excel that most significantly impact economic performance. We continue to use equity method accounting for this investment. At March 31, 2014, our maximum exposure to loss represented 50 percent of the outstanding debt principal balance of $116 million, or

6

$58 million, plus half of the $60 million liquidity support, or $30 million. The book value of our investment in Excel at March 31, 2014, was $128 million.

In 2013, we entered into a multi-year consignment fuels agreement with a marketer who we currently support with debt guarantees. Pursuant to the consignment fuels agreement, we own the fuels inventory, control the fuel marketing at each site and pay a fixed monthly fee to the marketer. We determined the consignment fuels agreement and the debt guarantees together create a variable interest in the marketer, with the marketer not being exposed to all potential losses. We determined we are not the primary beneficiary because we do not have the power to direct the activities that most significantly impact the economic performance of the marketer or its service stations. We have no ownership interest in the marketer. At March 31, 2014, our maximum exposure to loss represented the outstanding debt balance of $190 million and the fixed annual contractual payments under the consignment fuels agreement of approximately $80 million.

Note 3—Inventories

Inventories consisted of the following:

	Millions of Dollars
	March 31 2014		December 31 2013
Crude oil and petroleum products	$	5,642	3,093
Materials and supplies	266		261
	$	5,908	3,354

Inventories valued on the last-in, first-out (LIFO) basis totaled $5,522 million and $2,945 million at March 31, 2014, and December 31, 2013, respectively. The estimated excess of current replacement cost over LIFO cost of inventories amounted to approximately $8,200 million and $7,600 million at March 31, 2014, and December 31, 2013, respectively.

Note 4—Assets Held for Sale or Sold

In December 2013, we entered into an agreement to exchange the stock of Phillips Specialty Products Inc. (PSPI), a flow improver business, which was included in our Marketing and Specialties (M&S) segment, for shares of Phillips 66 common stock owned by the other party. Accordingly, as of December 31, 2013, the net assets of PSPI were classified as held for sale and the results of operations of PSPI were reported as discontinued operations.

At December 31, 2013, PSPI had a net carrying value of $193 million, which primarily included $58 million of net properties, plants and equipment (PP&E) and $117 million of allocated goodwill. The carrying amounts of PSPI’s assets and liabilities at December 31, 2013, were reported in the “Prepaid expenses and other current assets” and “Other accruals” lines of our consolidated balance sheet, respectively.

On February 25, 2014, we completed the PSPI share exchange, resulting in the receipt of approximately 17.4 million shares of Phillips 66 common stock, which are held as treasury shares, and the recognition of a before-tax gain of $696 million. At the time of the disposition, PSPI had a net carrying value of $685 million, which primarily included $481 million of cash and cash equivalents, $60 million of net PP&E and $117 million of allocated goodwill. Cash and cash equivalents of $450 million included in PSPI’s net carrying value is reflected as a financing cash outflow in the “Share exchange—PSPI transaction” line of our consolidated statement of cash flows. Revenues, income before-tax and net income from discontinued operations, excluding the recognized before-tax gain of $696 million, were not material for the three-month periods ended March 31, 2014 and 2013.

7

Note 5—Investments, Loans and Long-Term Receivables

Equity Investments

Summarized 100 percent financial information for WRB Refining LP (WRB) and Chevron Phillips Chemical Company LLC (CPChem) were as follows:

	Millions of Dollars
	Three Months Ended March 31
	2014		2013
Revenues	$	7,998	8,140
Income before income taxes	1,124		1,768
Net income	1,101		1,750

WRB

WRB is a 50-percent-owned business venture with Cenovus Energy Inc. (Cenovus). Cenovus was obligated to contribute $7.5 billion, plus accrued interest, to WRB over a 10-year period that began in 2007. In the first quarter of 2014, Cenovus prepaid its remaining balance under this obligation. As a result, WRB declared a special dividend, which was distributed to the co-venturers in March 2014. Of the $1,232 million that we received, $760 million was considered a return on our investment in WRB (an operating cash inflow), and $472 million was considered a return of our investment in WRB (an investing cash inflow). At March 31, 2014, the book value of our investment in WRB was $2,017 million and our basis difference was $3,511 million.

Other

MSLP owns a delayed coker and related facilities at the Sweeny Refinery. MSLP processes long residue, which is produced from heavy sour crude oil, for a processing fee. Fuel-grade petroleum coke is produced as a by-product and becomes the property of MSLP. Prior to August 28, 2009, MSLP was owned 50/50 by ConocoPhillips and PDVSA. Under the agreements that govern the relationships between the partners, certain defaults by PDVSA with respect to supply of crude oil to the Sweeny Refinery triggered the right to acquire PDVSA’s 50 percent ownership interest in MSLP, which was exercised on August 28, 2009. PDVSA initiated arbitration with the International Chamber of Commerce challenging the exercise of the call right and claiming it was invalid. The arbitral tribunal held hearings on the merits of the dispute in December 2012, and post-hearing briefs were exchanged in March 2013. The arbitral tribunal issued its ruling in April 2014, which upheld the exercise of the call right and the acquisition of the 50 percent ownership interest. PDVSA has a right to appeal the ruling in U.S. district court.  Following the Separation, Phillips 66 generally indemnifies ConocoPhillips for liabilities, if any, arising out of the exercise of the call right or otherwise with respect to the joint venture or the refinery. We continue to use the equity method of accounting for our investment in MSLP.

8

Note 6—Properties, Plants and Equipment

Our investment in PP&E, with the associated accumulated depreciation and amortization (Accum. D&A), was:

	Millions of Dollars
	March 31, 2014				December 31, 2013
	Gross PP&E		Accum. D&A	Net PP&E	Gross PP&E	Accum. D&A	Net PP&E
Midstream	$	3,092	1,122	1,970	2,865	1,104	1,761
Chemicals	—		—	—	—	—	—
Refining	19,372		6,874	12,498	19,191	6,718	12,473
Marketing and Specialties	1,525		753	772	1,395	749	646
Corporate and Other	989		478	511	975	457	518
Discontinued Operations*	—		—	—	—	—	—
	$	24,978	9,227	15,751	24,426	9,028	15,398
* At December 31, 2013, net PP&E of $58 million associated with discontinued operations was classified as current assets.

Note 7—Goodwill

Effective January 1, 2014, we reallocated $52 million of goodwill from the Refining segment to the M&S segment based upon the realignment of certain assets between the reporting units. Goodwill was reassigned to the reporting units using a relative fair value approach. Goodwill impairment testing was completed and no impairment recognition was required. See Note 19—Segment Disclosures and Related Information.

In March 2014, we paid approximately $70 million, net of acquired cash, to acquire our co-venturer's interest in an entity that operates a power and steam generation plant. We provisionally recorded $141 million of net PP&E, $40 million of intangible assets, $39 million of goodwill and $68 million of debt. The goodwill is the result of synergies this acquisition created with one of our refineries. The completion of our acquisition accounting is subject to the finalization of valuations of the assets acquired and liabilities assumed.

See Note 4—Assets Held for Sale or Sold for additional information on goodwill allocated to assets held for sale or sold.

The carrying amount of goodwill was as follows:

	Millions of Dollars
	March 31 2014		December 31 2013
Midstream	$	518	518
Refining	1,912		1,867
Marketing and Specialties	711		711
	$	3,141	3,096

9

Note 8—Impairments

The three-month periods ended March 31, 2014 and 2013, included the following before-tax impairment charges:

	Millions of Dollars
	Three Months Ended March 31
	2014		2013
Refining	$	1	—
Marketing and Specialties	—		15
Corporate and Other	—		9
	$	1	24

During the first quarter of 2013, we recorded a $15 million held-for-use impairment in our M&S segment, primarily related to PP&E associated with our planned exit from the composite graphite business.

Note 9—Earnings Per Share

The numerator of basic earnings per share (EPS) is net income attributable to Phillips 66, reduced by noncancelable dividends paid on unvested share-based employee awards during the vesting period (participating securities). The denominator of basic EPS is the sum of the daily weighted-average number of common shares outstanding during the periods presented and fully vested stock and unit awards that have not yet been issued as common stock. The numerator of diluted EPS is also based on net income attributable to Phillips 66, which is reduced only by dividend equivalents paid on participating securities for which the dividends are more dilutive than the participation of the awards in the earnings of the periods presented. To the extent unvested stock, unit or option awards and vested unexercised stock options are dilutive, they are included with the weighted-average common shares outstanding in the denominator. Treasury stock is excluded from the denominator in both basic and diluted EPS.

	Three Months Ended March 31
	2014				2013
	Basic			Diluted	Basic		Diluted
Amounts attributed to Phillips 66 Common Stockholders (millions):
Income from continuing operations attributable to Phillips 66	$	866		866	1,392		1,392
Income allocated to participating securities	(1		)	—	(1	)	—
Income from continuing operations available to common stockholders	865			866	1,391		1,392
Discontinued operations	706			706	15		15
Net Income available to common stockholders	$	1,571		1,572	1,406		1,407
Weighted-average common shares outstanding (thousands):	580,027			584,053	621,309		625,030
Effect of stock-based compensation	4,026			5,522	3,721		6,258
Weighted-average common shares outstanding—EPS	584,053			589,575	625,030		631,288
Earnings Per Share of Common Stock (dollars):
Income from continuing operations attributable to Phillips 66	$	1.48		1.47	2.23		2.21
Discontinued operations	1.21			1.20	0.02		0.02
Earnings Per Share	$	2.69		2.67	2.25		2.23

10

Note 10—Debt

At both March 31, 2014, and December 31, 2013, we had no direct outstanding borrowings under our $4.5 billion revolving credit agreement or our $696 million trade receivables securitization facility. However, as of both March 31, 2014, and December 31, 2013, $51 million in letters of credit had been issued that were supported by our revolving credit agreement. As of both March 31, 2014, and December 31, 2013, $26 million in letters of credit had been issued that were collateralized by trade receivables held by a subsidiary under our trade receivables securitization facility. At March 31, 2014, no amount had been drawn on the $250 million revolving credit agreement entered into by Phillips 66 Partners in the second quarter of 2013. Accordingly, as of March 31, 2014, an aggregate $5.4 billion of total capacity was available under these facilities.

At March 31, 2014, we classified $800 million of long-term debt due within a year as long-term debt, based on our intent to refinance the obligation on a long-term basis and our ability to do so under our revolving credit facility.

Note 11—Guarantees

At March 31, 2014, we were liable for certain contingent obligations under various contractual arrangements as described below. We recognize a liability, at inception, for the fair value of our obligation as a guarantor for newly issued or modified guarantees. Unless the carrying amount of the liability is noted below, we have not recognized a liability either because the guarantees were issued prior to December 31, 2002, or because the fair value of the obligation is immaterial. In addition, unless otherwise stated, we are not currently performing with any significance under the guarantee and expect future performance to be either immaterial or have only a remote chance of occurrence.

Guarantees of Joint Venture Debt

In April 2012, in connection with the Separation, we issued a guarantee for 100 percent of the 8.85% senior notes issued by MSLP in July 1999. At March 31, 2014, the maximum potential amount of future payments to third parties under the guarantee is estimated to be $214 million, which could become payable if MSLP fails to meet its obligations under the senior notes agreement. The senior notes mature in 2019.

Other Guarantees

We have residual value guarantees associated with leases with maximum future potential payments totaling $228 million. We have other guarantees with maximum future potential payment amounts totaling $314 million, which consist primarily of guarantees to fund the short-term cash liquidity deficits of certain joint ventures, guarantees of third parties related to prior asset dispositions, and guarantees of the lease payment obligations of a joint venture. These guarantees generally extend up to 10 years or life of the venture.

Indemnifications

Over the years, we have entered into various agreements to sell ownership interests in certain corporations, joint ventures and assets that gave rise to qualifying indemnifications. Agreements associated with these sales include indemnifications for taxes, litigation, environmental liabilities, permits and licenses, supply arrangements, and employee claims; and real estate indemnity against tenant defaults. The terms of these indemnifications vary greatly. The majority of these indemnifications are related to environmental issues, the term is generally indefinite, and the maximum amount of future payments is generally unlimited. The carrying amount recorded for indemnifications at March 31, 2014, was $241 million. We amortize the indemnification liability over the relevant time period, if one exists, based on the facts and circumstances surrounding each type of indemnity. In cases where the indemnification term is indefinite, we will reverse the liability when we have information the liability is essentially relieved or amortize the liability over an appropriate time period as the fair value of our indemnification exposure declines. Although it is reasonably possible future payments may exceed amounts recorded, due to the nature of the indemnifications, it is not possible to make a reasonable estimate of the maximum potential amount of future payments. Included in the recorded carrying amount were $107 million of environmental accruals for known contamination that were included in asset retirement obligations and accrued environmental costs at March 31, 2014. For additional information about environmental liabilities, see Note 12—Contingencies and Commitments.

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Indemnification and Release Agreement

In 2012, we entered into the Indemnification and Release Agreement with ConocoPhillips. This agreement governs the treatment between ConocoPhillips and us of matters relating to indemnification, insurance, litigation responsibility and management, and litigation document sharing and cooperation arising in connection with the Separation. Generally, the agreement provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of our business with us and financial responsibility for the obligations and liabilities of ConocoPhillips’ business with ConocoPhillips. The agreement also establishes procedures for handling claims subject to indemnification and related matters.

Note 12—Contingencies and Commitments

A number of lawsuits involving a variety of claims that arose in the ordinary course of business have been filed against us or are subject to indemnifications provided by us. We also may be required to remove or mitigate the effects on the environment of the placement, storage, disposal or release of certain chemical, mineral and petroleum substances at various active and inactive sites. We regularly assess the need for accounting recognition or disclosure of these contingencies. In the case of all known contingencies (other than those related to income taxes), we accrue a liability when the loss is probable and the amount is reasonably estimable. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. We do not reduce these liabilities for potential insurance or third-party recoveries. If applicable, we record receivables for probable insurance or other third-party recoveries. In the case of income-tax-related contingencies, we use a cumulative probability-weighted loss accrual in cases where sustaining a tax position is less than certain.

Based on currently available information, we believe it is remote that future costs related to known contingent liability exposures will exceed current accruals by an amount that would have a material adverse impact on our consolidated financial statements. As we learn new facts concerning contingencies, we reassess our position both with respect to accrued liabilities and other potential exposures. Estimates particularly sensitive to future changes include contingent liabilities recorded for environmental remediation, tax and legal matters. Estimated future environmental remediation costs are subject to change due to such factors as the uncertain magnitude of cleanup costs, the unknown time and extent of such remedial actions that may be required, and the determination of our liability in proportion to that of other responsible parties. Estimated future costs related to tax and legal matters are subject to change as events evolve and as additional information becomes available during the administrative and litigation processes.

Environmental

We are subject to international, federal, state and local environmental laws and regulations. When we prepare our consolidated financial statements, we record accruals for environmental liabilities based on management’s best estimates, using all information available at the time. We measure estimates and base liabilities on currently available facts, existing technology, and presently enacted laws and regulations, taking into account stakeholder and business considerations. When measuring environmental liabilities, we also consider our prior experience in remediation of contaminated sites, other companies’ cleanup experience, and data released by the U.S. Environmental Protection Agency (EPA) or other organizations. We consider unasserted claims in our determination of environmental liabilities, and we accrue them in the period they are both probable and reasonably estimable.

Although liability of those potentially responsible for environmental remediation costs is generally joint and several for federal sites and frequently so for state sites, we are usually only one of many companies alleged to have liability at a particular site. Due to the joint and several liabilities, we could be responsible for all cleanup costs related to any site at which we have been designated as a potentially responsible party. We have been successful to date in sharing cleanup costs with other financially sound companies. Many of the sites at which we are potentially responsible are still under investigation by the EPA or the state agencies concerned. Prior to actual cleanup, those potentially responsible normally assess the site conditions, apportion responsibility and determine the appropriate remediation. In some instances, we may have no liability or may attain a settlement of liability. Where it appears that other potentially responsible parties may be financially unable to bear their proportional share, we consider this inability in estimating our potential liability, and we adjust our accruals accordingly. As a result of various acquisitions in the past, we assumed certain environmental obligations. Some of these environmental obligations are mitigated by indemnifications made by others for our benefit and some of the indemnifications are subject to dollar and time limits.

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We are currently participating in environmental assessments and cleanups at numerous federal Superfund and comparable state sites. After an assessment of environmental exposures for cleanup and other costs, we make accruals on an undiscounted basis (except those pertaining to sites acquired in a purchase business combination, which we record on a discounted basis) for planned investigation and remediation activities for sites where it is probable future costs will be incurred and these costs can be reasonably estimated. At March 31, 2014, our consolidated balance sheet included a total environmental accrual of $488 million, compared with $492 million at December 31, 2013. We expect to incur a substantial amount of these expenditures within the next 30 years. We have not reduced these accruals for possible insurance recoveries. In the future, we may be involved in additional environmental assessments, cleanups and proceedings.

Legal Proceedings

Our legal organization applies its knowledge, experience and professional judgment to the specific characteristics of our cases, employing a litigation management process to manage and monitor the legal proceedings against us. Our process facilitates the early evaluation and quantification of potential exposures in individual cases. This process also enables us to track those cases that have been scheduled for trial and/or mediation. Based on professional judgment and experience in using these litigation management tools and available information about current developments in all our cases, our legal organization regularly assesses the adequacy of current accruals and determines if adjustment of existing accruals, or establishment of new accruals, is required.

Other Contingencies

We have contingent liabilities resulting from throughput agreements with pipeline and processing companies not associated with financing arrangements. Under these agreements, we may be required to provide any such company with additional funds through advances and penalties for fees related to throughput capacity not utilized.

At March 31, 2014, we had performance obligations secured by letters of credit of $1,161 million (of which, $26 million were issued under the trade receivables securitization facility, $51 million were issued under the provisions of our revolving credit facility, and the remainder were issued as direct bank letters of credit) related to various purchase and other commitments incident to the ordinary conduct of business.

Note 13—Derivatives and Financial Instruments

Derivative Instruments

We use financial and commodity-based derivative contracts to manage exposures to fluctuations in foreign currency exchange rates and commodity prices or to capture market opportunities. Since we are not currently using cash-flow hedge accounting, all gains and losses, realized or unrealized, from commodity derivative contracts have been recognized in the consolidated statement of income. Gains and losses from derivative contracts held for trading not directly related to our physical business, whether realized or unrealized, have been reported net in “Other income” on our consolidated statement of income. Cash flows from all our derivative activity for the periods presented appear in the operating section of the consolidated statement of cash flows.

Purchase and sales contracts with fixed minimum notional volumes for commodities that are readily convertible to cash (e.g., crude oil and gasoline) are recorded on the balance sheet as derivatives unless the contracts are eligible for, and we elect, the normal purchases and normal sales exception (i.e., contracts to purchase or sell quantities we expect to use or sell over a reasonable period in the normal course of business). We generally apply this normal purchases and normal sales exception to eligible crude oil, refined product, natural gas and power commodity purchase and sales contracts; however, we may elect not to apply this exception (e.g., when another derivative instrument will be used to mitigate the risk of the purchase or sales contract but hedge accounting will not be applied, in which case both the purchase or sales contract and the derivative contract mitigating the resulting risk will be recorded on the balance sheet at fair value).

Our derivative instruments are held at fair value on our consolidated balance sheet. For further information on the fair value of derivatives, see Note 14—Fair Value Measurements.

Commodity Derivative Contracts—We operate in the worldwide crude oil, refined products, natural gas liquids (NGL), natural gas and electric power markets and are exposed to fluctuations in the prices for these commodities. These fluctuations can affect our revenues, as well as the cost of operating, investing and financing activities. Generally, our

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policy is to remain exposed to the market prices of commodities; however, we use futures, forwards, swaps and options in various markets to balance physical systems, meet customer needs, manage price exposures on specific transactions, and do a limited, immaterial amount of trading not directly related to our physical business. We also use the market knowledge gained from these activities to capture market opportunities such as moving physical commodities to more profitable locations, storing commodities to capture seasonal or time premiums, and blending commodities to capture quality upgrades. Derivatives may be used to optimize these activities, which may move our risk profile away from market average prices.

The following table indicates the balance sheet line items that include the fair values of commodity derivative assets and liabilities presented net (i.e., commodity derivative assets and liabilities with the same counterparty are netted where the right of setoff exists); however, the balances in the following table are presented gross. For information on the impact of counterparty netting and collateral netting, see Note 14—Fair Value Measurements.

	Millions of Dollars
	March 31 2014		December 31 2013
Assets
Accounts and notes receivable	$	—	2
Prepaid expenses and other current assets	486		592
Other assets	1		2
Liabilities
Other accruals	472		633
Other liabilities and deferred credits	1		1

Hedge accounting has not been used for any item in the table.

The gains (losses) from commodity derivatives incurred, and the line items where they appear on our consolidated statement of income, were:

	Millions of Dollars
	Three Months Ended March 31
	2014		2013
Sales and other operating revenues	$	57	(6	)
Equity in earnings of affiliates	—		2
Other income	14		3
Purchased crude oil and products	2		89

Hedge accounting has not been used for any item in the table.

The following table summarizes our material net exposures resulting from outstanding commodity derivative contracts. These financial and physical derivative contracts are primarily used to manage price exposure on our underlying operations. The underlying exposures may be from non-derivative positions such as inventory volumes. Financial derivative contracts may also offset physical derivative contracts, such as forward sales contracts. As of March 31, 2014, and December 31, 2013, the percentage of our derivative contract volume expiring within the next 12 months was over 99 percent for both periods.

	Open Position Long/(Short)
	March 31 2014		December 31 2013
Commodity
Crude oil, refined products and NGL (millions of barrels)	(24	)	(9	)

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Credit Risk

Financial instruments potentially exposed to concentrations of credit risk consist primarily of over-the-counter (OTC) derivative contracts and trade receivables.

The credit risk from our OTC derivative contracts, such as forwards and swaps, derives from the counterparty to the transaction. Individual counterparty exposure is managed within predetermined credit limits and includes the use of cash-call margins when appropriate, thereby reducing the risk of significant nonperformance. We also use futures, swaps and option contracts that have a negligible credit risk because these trades are cleared with an exchange clearinghouse and subject to mandatory margin requirements until settled; however, we are exposed to the credit risk of those exchange brokers for receivables arising from daily margin cash calls, as well as for cash deposited to meet initial margin requirements.

Our trade receivables result primarily from the sale of products from, or related to, our refinery operations and reflect a broad national and international customer base, which limits our exposure to concentrations of credit risk. The majority of these receivables have payment terms of 30 days or less. We continually monitor this exposure and the creditworthiness of the counterparties and recognize bad debt expense based on historical write-off experience or specific counterparty collectability. Generally, we do not require collateral to limit the exposure to loss; however, we will sometimes use letters of credit, prepayments, and master netting arrangements to mitigate credit risk with counterparties that both buy from and sell to us, as these agreements permit the amounts owed by us or owed to others to be offset against amounts due us.

Certain of our derivative instruments contain provisions that require us to post collateral if the derivative exposure exceeds a threshold amount. We have contracts with fixed threshold amounts and other contracts with variable threshold amounts that are contingent on our credit rating. The variable threshold amounts typically decline for lower credit ratings, while both the variable and fixed threshold amounts typically revert to zero if our credit ratings fall below investment grade. Cash is the primary collateral in all contracts; however, many contracts also permit us to post letters of credit as collateral.

The aggregate fair values of all derivative instruments with such credit-risk-related contingent features that were in a liability position were not material at March 31, 2014, or December 31, 2013.

Note 14—Fair Value Measurements

Fair Values of Financial Instruments

We used the following methods and assumptions to estimate the fair value of financial instruments:

• Cash and cash equivalents: The carrying amount reported on the consolidated balance sheet approximates fair value.

• Accounts and notes receivable: The carrying amount reported on the consolidated balance sheet approximates fair value.

• Debt: The carrying amount of our floating-rate debt approximates fair value. The fair value of our fixed-rate debt is estimated based on quoted market prices.

• Commodity swaps: Fair value is estimated based on forward market prices and approximates the exit price at period end. When forward market prices are not available, fair value is estimated using the forward prices of a similar commodity with adjustments for differences in quality or location.

• Futures: Fair values are based on quoted market prices obtained from the New York Mercantile Exchange, the InterContinental Exchange Futures or other traded exchanges.

• Forward-exchange contracts: Fair values are estimated by comparing the contract rate to the forward rate in effect at the end of the respective reporting periods and approximating the exit price at those dates.

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We carry certain assets and liabilities at fair value, which we measure at the reporting date using an exit price (i.e., the price that would be received to sell an asset or paid to transfer a liability), and disclose the quality of these fair values based on the valuation inputs used in these measurements under the following hierarchy:

• Level 1: Fair value measured with unadjusted quoted prices from an active market for identical assets or liabilities.

• Level 2: Fair value measured with: 1) adjusted quoted prices from an active market for similar assets; or 2) other valuation inputs that are directly or indirectly observable.

• Level 3: Fair value measured with unobservable inputs that are significant to the measurement.

We classify the fair value of an asset or liability based on the lowest level of input significant to its measurement; however, the fair value of an asset or liability initially reported as Level 3 will be subsequently reported as Level 2 if the unobservable inputs become inconsequential to its measurement or corroborating market data becomes available. Conversely, an asset or liability initially reported as Level 2 will be subsequently reported as Level 3 if corroborating market data becomes unavailable. We made no material transfers in or out of Level 1 during the three-month periods ended March 31, 2014 and 2013.

Recurring Fair Value Measurements

Financial assets and liabilities recorded at fair value on a recurring basis consist primarily of investments to support nonqualified deferred compensation plans and derivative instruments. The deferred compensation investments are measured at fair value using unadjusted prices available from national securities exchanges; therefore, these assets are categorized as Level 1 in the fair value hierarchy. We value our exchange-traded commodity derivatives using closing prices provided by the exchange as of the balance sheet date, and these are also classified as Level 1 in the fair value hierarchy. When exchange-cleared contracts lack sufficient liquidity or are valued using either adjusted exchange-provided prices or non-exchange quotes, we classify those contracts as Level 2. OTC financial swaps and physical commodity forward purchase and sales contracts are generally valued using quotations provided by brokers and price index developers such as Platts and Oil Price Information Service. We corroborate these quotes with market data and classify the resulting fair values as Level 2. In certain less liquid markets or for longer-term contracts, forward prices are not as readily available. In these circumstances, OTC swaps and physical commodity purchase and sales contracts are valued using internally developed methodologies that consider historical relationships among various commodities that result in management’s best estimate of fair value. We classify these contracts as Level 3. Financial OTC and physical commodity options are valued using industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and contractual prices for the underlying instruments, as well as other relevant economic measures. The degree to which these inputs are observable in the forward markets determines whether the options are classified as Level 2 or 3. We use a mid-market pricing convention (the mid-point between bid and ask prices). When appropriate, valuations are adjusted to reflect credit considerations, generally based on available market evidence.

The following tables display the fair value hierarchy for our material financial assets and liabilities either accounted for or disclosed at fair value on a recurring basis. These values are determined by treating each contract as the fundamental unit of account; therefore, derivative assets and liabilities with the same counterparty are shown gross (i.e., without the effect of netting where the legal right of setoff exists) in the hierarchy sections of these tables. These tables also show that our Level 3 activity was not material.

We have master netting arrangements for all of our exchange-cleared derivative instruments, the majority of our OTC derivative instruments, and certain physical commodity forward contracts (primarily pipeline crude oil deliveries). The following tables show these contracts on a net basis in the column “Effect of Counterparty Netting.” We have no contracts that are subject to master netting arrangements that are reflected gross on the consolidated balance sheet.

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The carrying values and fair values by hierarchy of our material financial instruments, either carried or disclosed at fair value, and derivative assets and liabilities, including any effects of master netting agreements or collateral, were:

	Millions of Dollars
	March 31, 2014
	Fair Value Hierarchy				Total Fair Value of Gross Assets & Liabilities	Effect of Counterparty Netting		Effect of Collateral Netting		Difference in Carrying Value and Fair Value		Net Carrying Value Presented on the Balance Sheet	Cash Collateral Received or Paid, Not Offset on Balance Sheet
	Level 1		Level 2	Level 3
Commodity Derivative Assets
Exchange-cleared instruments	$	203	248	—	451	(444	)	—		—		7	—
OTC instruments	—		9	—	9	(4	)	—		—		5	—
Physical forward contracts*	—		23	4	27	—		—		—		27	—
Rabbi trust assets	64		—	—	64	N/A		N/A		—		64	N/A
	$	267	280	4	551	(448	)	—		—		103
Commodity Derivative Liabilities
Exchange-cleared instruments	$	207	241	—	448	(444	)	(4	)	—		—	—
OTC instruments	—		11	—	11	(4	)	—		—		7	—
Physical forward contracts*	—		13	1	14	—		—		—		14	—
Floating-rate debt	53		—	—	53	N/A		N/A		—		53	N/A
Fixed-rate debt, excluding capital leases**	—		6,347	—	6,347	N/A		N/A		(383	)	5,964	N/A
	$	260	6,612	1	6,873	(448	)	(4	)	(383	)	6,038

* Physical forward contracts may have a larger value on the balance sheet than disclosed in the fair value hierarchy when the remaining contract term at the reporting date is greater than 12 months and the short-term portion is an asset while the long-term portion is a liability, or vice versa.

** We carry fixed-rate debt on the balance sheet at amortized cost.

	Millions of Dollars
	December 31, 2013
	Fair Value Hierarchy				Total Fair Value of Gross Assets & Liabilities	Effect of Counterparty Netting		Effect of Collateral Netting		Difference in Carrying Value and Fair Value		Net Carrying Value Presented on the Balance Sheet	Cash Collateral Received or Paid, Not Offset on Balance Sheet
	Level 1		Level 2	Level 3
Commodity Derivative Assets
Exchange-cleared instruments	$	227	332	—	559	(538	)	—		—		21	—
OTC instruments	—		10	—	10	(8	)	—		—		2	—
Physical forward contracts*	—		25	2	27	—		—		—		27	—
Rabbi trust assets	64		—	—	64	N/A		N/A		—		64	N/A
	$	291	367	2	660	(546	)	—		—		114
Commodity Derivative Liabilities
Exchange-cleared instruments	$	253	326	—	579	(538	)	(41	)	—		—	—
OTC instruments	—		11	—	11	(8	)	—		—		3	—
Physical forward contracts*	—		43	1	44	—		—		—		44	—
Floating-rate debt	50		—	—	50	N/A		N/A		—		50	N/A
Fixed-rate debt, excluding capital leases**	—		6,168	—	6,168	N/A		N/A		(262	)	5,906	N/A
	$	303	6,548	1	6,852	(546	)	(41	)	(262	)	6,003

* Physical forward contracts may have a larger value on the balance sheet than disclosed in the fair value hierarchy when the remaining contract term at the reporting date is greater than 12 months and the short-term portion is an asset while the long-term portion is a liability, or vice versa.

** We carry fixed-rate debt on the balance sheet at amortized cost.

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The values presented in the preceding tables appear on our balance sheet as follows: for commodity derivative assets and liabilities, this is provided in the first table in Note 13—Derivatives and Financial Instruments; rabbi trust assets appear in the “Investments and long-term receivables” line; and floating-rate and fixed-rate debt appear in the “Short-term debt” and “Long-term debt” lines.

Nonrecurring Fair Value Remeasurements

During the three-month period ended March 31, 2014, there were no significant nonrecurring fair value remeasurements of assets subsequent to their initial recognition.

The following table shows the values of assets, by major category, measured at fair value on a nonrecurring basis in periods subsequent to their initial recognition during the three-month period ended March 31, 2013:

	Millions of Dollars
			Fair Value Measurements Using
	Fair Value*		Level 1 Inputs	Level 2 Inputs	Level 3 Inputs	Before- Tax Loss
March 31, 2013
Net properties, plants and equipment (held for use)	$	22	22	—	—	27

* Represents the fair value at the time of the impairment.

During the first quarter of2013, net PP&E held for use related to the composite graphite business in our M&S segment, with a carrying amount of $18 million, was written down to its fair value, resulting in a before-tax loss of $18 million. The fair value was based on an internal assessment of expected discounted future cash flows. During this same period, corporate net PP&E held for use with a carrying amount of $31 million was written down to its fair value of $22 million, resulting in a before-tax loss of $9 million. The fair value was primarily determined by a third-party valuation.

Note 15—Employee Benefit Plans

Pension and Postretirement Plans

The components of net periodic benefit cost for the three months ended March 31, 2014 and 2013, were as follows:

	Millions of Dollars
	Pension Benefits									Other Benefits
	2014					2013				2014		2013
	U.S.			Int’l.		U.S.		Int’l.
Components of Net Periodic Benefit Cost
Three Months Ended March 31
Service cost	$	30		10		31		9		2		2
Interest cost	27			9		23		8		2		2
Expected return on plan assets	(36		)	(9	)	(30	)	(7	)	—		—
Amortization of prior service cost (credit)	1			(1	)	—		—		—		—
Recognized net actuarial loss (gain)	10			3		21		5		(1	)	—
Total net periodic benefit cost	$	32		12		45		15		3		4

During the first three months of 2014, we contributed $162 million to our U.S. plans and $14 million to our international plans. We currently expect to make additional contributions of approximately $60 million in 2014, primarily to our international plans.

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Note 16—Accumulated Other Comprehensive Income (Loss)

The following table depicts changes in accumulated other comprehensive income (loss) by component, as well as detail on reclassifications out of accumulated other comprehensive income (loss):

	Millions of Dollars
	Defined Benefit Plans			Foreign Currency Translation		Hedging		Accumulated Other Comprehensive Income (Loss)
December 31, 2012	$	(778	)	466		(2	)	(314	)
Other comprehensive loss before reclassifications	(8		)	(318	)	—		(326	)
Amounts reclassified from accumulated other comprehensive income (loss)*
Amortization of defined benefit plan items**
Actuarial losses	18			—		—		18
Net current period other comprehensive income (loss)	10			(318	)	—		(308	)
March 31, 2013	$	(768	)	148		(2	)	(622	)
December 31, 2013	$	(404	)	443		(2	)	37
Other comprehensive income before reclassifications	2			30		—		32
Amounts reclassified from accumulated other comprehensive income (loss)*
Amortization of defined benefit plan items**
Actuarial losses	8			—		—		8
Net current period other comprehensive income	10			30		—		40
March 31, 2014	$	(394	)	473		(2	)	77

* There were no significant reclassifications related to foreign currency translation or hedging.

** These accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit cost (see Note 15—Employee Benefit Plans, for additional information).

Note 17—Cash Flow Information

	Millions of Dollars
	Three Months Ended
	March 31
	2014		2013
Cash Payments
Interest	$	12	15
Income taxes	26		83

Noncash Investing and Financing Activities

As discussed more fully in Note 4—Assets Held for Sale or Sold, on February 25, 2014, we completed the exchange of our flow improvers business for shares of Phillips 66 common stock owned by the other party to the transaction. The noncash portion of the net assets surrendered by us in the exchange was $204 million, and we received approximately 17.4 million shares of our common stock, with a fair value at the time of the exchange of $1.35 billion.

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Note 18—Related Party Transactions

Significant transactions with related parties were:

	Millions of Dollars
	Three Months Ended March 31
	2014		2013
Operating revenues and other income (a)	$	2,067	1,749
Purchases (b)	3,991		4,287
Operating expenses and selling, general and administrative expenses (c)	35		24
Interest expense (d)	2		2

(a) We sold crude oil to the Malaysian Refining Company Sdn. Bdh. (MRC). NGL and other petrochemical feedstocks, along with solvents, were sold to CPChem, and gas oil and hydrogen feedstocks were sold to Excel. Certain feedstocks and intermediate products were sold to WRB. We also acted as agent for WRB in supplying other crude oil and feedstocks, wherein the transactional amounts did not impact operating revenues. In addition, we charged several of our affiliates, including CPChem and MSLP, for the use of common facilities, such as steam generators, waste and water treaters, and warehouse facilities.

(b) We purchased refined products from WRB. We also acted as agent for WRB in distributing asphalt and solvents, wherein the transactional amounts did not impact purchases. We purchased natural gas and NGL from DCP Midstream, LLC (DCP Midstream) and CPChem for use in our refinery processes and other feedstocks from various affiliates. We purchased refined products from MRC. We also paid fees to various pipeline equity companies for transporting finished refined products. In addition, we paid a price upgrade to MSLP for heavy crude processing. We purchased base oils and fuel products from Excel for use in our refining and specialty businesses.

(c) We paid utility and processing fees to various affiliates.

(d) We incurred interest expense on a note payable to MSLP.

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Note 19—Segment Disclosures and Related Information

Our operating segments are:

1) Midstream—Gathers, processes, transports and markets natural gas; and transports, fractionates and markets NGL in the United States. In addition, this segment transports crude oil and other feedstocks to our refineries and other locations, and delivers refined and specialty products to market. The Midstream segment includes, among other businesses, our 50 percent equity investment in DCP Midstream and our investment in Phillips 66 Partners LP.

2) Chemicals—Manufactures and markets petrochemicals and plastics on a worldwide basis. The Chemicals segment consists of our 50 percent equity investment in CPChem.

3) Refining—Buys, sells and refines crude oil and other feedstocks at 15 refineries, mainly in the United States, Europe and Asia.

4) Marketing and Specialties—Purchases for resale and markets refined products, mainly in the United States and Europe. In addition, this segment includes the manufacturing and marketing of specialty products (such as base oils and lubricants), as well as power generation operations.

Corporate and Other includes general corporate overhead, interest expense, our investments in new technologies and various other corporate activities. Corporate assets include all cash and cash equivalents.

We evaluate performance and allocate resources based on net income attributable to Phillips 66. Intersegment sales are at prices that approximate market.

Effective January 1, 2014, we changed the organizational structure of the internal financial information reviewed by our chief executive officer, and determined this resulted in a change in the composition of our operating segments. The primary effects of this reporting reorganization were:

• We moved two of our equity investments, Excel and Jupiter Sulphur, LLC, as well as the commission revenues related to needle and anode coke, polypropylene and solvents, from the Refining segment to the M&S segment.

• We moved several refining logistics projects from the Refining segment to the Midstream segment.

The new segment alignment is presented for the three-month period ended March 31, 2014, with the prior periods recast for comparability.

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Analysis of Results by Operating Segment

	Millions of Dollars
	Three Months Ended March 31
	2014			2013
Sales and Other Operating Revenues
Midstream
Total sales	$	2,155		1,628
Intersegment eliminations	(292		)	(232	)
Total Midstream	1,863			1,396
Chemicals	2			2
Refining
Total sales	29,215			29,762
Intersegment eliminations	(17,558		)	(17,857	)
Total Refining	11,657			11,905
Marketing and Specialties
Total sales	27,046			28,180
Intersegment eliminations	(292		)	(278	)
Total Marketing and Specialties	26,754			27,902
Corporate and Other	7			6
Consolidated sales and other operating revenues	$	40,283		41,211
Net Income (Loss) Attributable to Phillips 66
Midstream	$	188		111
Chemicals	316			282
Refining	306			904
Marketing and Specialties	137			190
Corporate and Other	(81		)	(95	)
Discontinued operations	706			15
Consolidated net income attributable to Phillips 66	$	1,572		1,407

	Millions of Dollars
	March 31 2014		December 31 2013
Total Assets
Midstream	$	5,379	5,485
Chemicals	4,689		4,377
Refining	27,262		26,046
Marketing and Specialties	7,335		7,331
Corporate and Other	6,182		6,348
Discontinued operations	—		211
Consolidated total assets	$	50,847	49,798

22

Note 20—Income Taxes

Our effective tax rate for the first three months of 2014 was 33 percent, compared with 32 percent for the corresponding period of 2013. The effective tax rate varies from the federal statutory tax rate of 35 percent primarily as a result of state tax expense, offset by the manufacturing deduction and foreign operations.

Note 21—Phillips 66 Partners LP

In 2013, we formed Phillips 66 Partners, a master limited partnership, to own, operate, develop and acquire primarily fee-based crude oil, refined petroleum product and NGL pipelines and terminals, as well as other transportation and midstream assets.

On March 1, 2014, we contributed to Phillips 66 Partners certain transportation, terminaling and storage assets for total consideration of $700 million, which consisted of $400 million in cash, the receipt of 3,530,595 common units and 72,053 general partner units of Phillips 66 Partners and a 5-year, $160 million note receivable. These assets consisted of our Gold Line products system and the Medford spheres, two newly constructed refinery-grade propylene storage spheres. Since we consolidate Phillips 66 Partners for financial reporting purposes, this transaction was eliminated upon consolidation and did not impact our financial position or cash flow.

At March 31, 2014, we owned a 73 percent limited partner interest and a 2 percent general partner interest in Phillips 66 Partners, while the public owned a 25 percent limited partner interest. We consolidate Phillips 66 Partners because we control the partnership through our general partner interest (see Note 2—Variable Interest Entities (VIEs) for additional information). The public’s ownership interest in Phillips 66 Partners was $409 million at March 31, 2014, and is reflected as a noncontrolling interest in our financial statements.

Note 22—New Accounting Standards

In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” This ASU amends the definition of discontinued operations so that only disposals of components of an entity representing major strategic shifts that have a major effect on an entity’s operations and financial results will qualify for discontinued operations reporting. The ASU also requires additional disclosures about discontinued operations and individually material disposals that do not meet the definition of a discontinued operation. ASU 2014-08 is effective January 1, 2015, and earlier application is permitted, but only for disposals not previously reported in the financial statements. We are currently evaluating the provisions of ASU 2014-08 and assessing the impact, if any, it may have on our financial position and results of operations. Our initial assessment is that this ASU will result in fewer dispositions qualifying for discontinued operations reporting.

23

Note 23—Condensed Consolidating Financial Information

Our $5.8 billion of Senior Notes were issued by Phillips 66, and 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.

Effective with fiscal year 2013, we revised the cash flow presentation of inter-column transactions associated with the company’s centralized cash management program and intercompany loans, from operating cash flows to investing cash flows, in a new line item labeled “Intercompany lending activities.” All periods have been revised to conform to this presentation.

24

	Millions of Dollars
	Three Months Ended March 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	$	—		27,239	13,044		—		40,283
Equity in earnings of affiliates	922			846	178		(1,168	)	778
Net gain on dispositions	—			—	7		—		7
Other income	—			22	9		—		31
Intercompany revenues	—			278	4,701		(4,979	)	—
Total Revenues and Other Income	922			28,385	17,939		(6,147	)	41,099
Costs and Expenses
Purchased crude oil and products	—			24,384	14,938		(4,941	)	34,381
Operating expenses	2			903	191		(6	)	1,090
Selling, general and administrative expenses	3			286	138		(25	)	402
Depreciation and amortization	—			180	54		—		234
Impairments	—			1	—		—		1
Taxes other than income taxes	—			1,301	2,337		—		3,638
Accretion on discounted liabilities	—			5	1		—		6
Interest and debt expense	66			4	5		(7	)	68
Foreign currency transaction gains	—			—	(19	)	—		(19	)
Total Costs and Expenses	71			27,064	17,645		(4,979	)	39,801
Income from continuing operations before income taxes	851			1,321	294		(1,168	)	1,298
Provision (benefit) for income taxes	(25		)	399	52		—		426
Income from Continuing Operations	876			922	242		(1,168	)	872
Income from discontinued operations*	696			—	10		—		706
Net income	1,572			922	252		(1,168	)	1,578
Less: net income attributable to noncontrolling interests	—			—	6		—		6
Net Income Attributable to Phillips 66	$	1,572		922	246		(1,168	)	1,572
Comprehensive Income	$	1,612		962	284		(1,240	)	1,618
* Net of provision for income taxes on discontinued operations	$	—		—	5		—		5

25

	Millions of Dollars
	Three Months Ended March 31, 2013
Statement of Income	Phillips 66			Phillips 66 Company		All Other Subsidiaries		Consolidating Adjustments		Total Consolidated
Revenues and Other Income
Sales and other operating revenues	$	—		27,637		13,574		—		41,211
Equity in earnings of affiliates	1,452			1,139		158		(1,710	)	1,039
Net gain on dispositions	—			1		—		—		1
Other income	—			15		8		—		23
Intercompany revenues	—			490		4,833		(5,323	)	—
Total Revenues and Other Income	1,452			29,282		18,573		(7,033	)	42,274
Costs and Expenses
Purchased crude oil and products	—			24,752		15,780		(5,289	)	35,243
Operating expenses	—			799		186		(7	)	978
Selling, general and administrative expenses	2			206		142		(23	)	327
Depreciation and amortization	—			183		59		—		242
Impairments	—			(3	)	27		—		24
Taxes other than income taxes	—			1,209		2,115		—		3,324
Accretion on discounted liabilities	—			5		1		—		6
Interest and debt expense	67			3		4		(4	)	70
Foreign currency transaction losses	—			1		1		—		2
Total Costs and Expenses	69			27,155		18,315		(5,323	)	40,216
Income from continuing operations before income taxes	1,383			2,127		258		(1,710	)	2,058
Provision (benefit) for income taxes	(24		)	675		12		—		663
Income from Continuing Operations	1,407			1,452		246		(1,710	)	1,395
Income from discontinued operations*	—			—		15		—		15
Net income	1,407			1,452		261		(1,710	)	1,410
Less: net income attributable to noncontrolling interests	—			—		3		—		3
Net Income Attributable to Phillips 66	$	1,407		1,452		258		(1,710	)	1,407
Comprehensive Income	$	1,100		1,145		(54	)	(1,089	)	1,102
* Net of provision for income taxes on discontinued operations:	$	—		—		8		—		8

26

	Millions of Dollars
	At March 31, 2014
Balance Sheet	Phillips 66		Phillips 66 Company	All Other Subsidiaries	Consolidating Adjustments		Total Consolidated
Assets
Cash and cash equivalents	$	—	2,096	3,230	—		5,326
Accounts and notes receivable	30		2,699	7,303	(912	)	9,120
Inventories	—		3,414	2,494	—		5,908
Prepaid expenses and other current assets	9		389	307	—		705
Total Current Assets	39		8,598	13,334	(912	)	21,059
Investments and long-term receivables	33,514		26,043	7,997	(57,553	)	10,001
Net properties, plants and equipment	—		11,976	3,775	—		15,751
Goodwill	—		3,099	42	—		3,141
Intangibles	—		693	44	—		737
Other assets	38		112	12	(4	)	158
Total Assets	$	33,591	50,521	25,204	(58,469	)	50,847
Liabilities and Equity
Accounts payable	$	—	7,630	5,905	(912	)	12,623
Short-term debt	—		18	22	—		40
Accrued income and other taxes	—		992	599	—		1,591
Employee benefit obligations	—		207	25	—		232
Other accruals	99		184	395	—		678
Total Current Liabilities	99		9,031	6,946	(912	)	15,164
Long-term debt	5,796		148	233	—		6,177
Asset retirement obligations and accrued environmental costs	—		521	176	—		697
Deferred income taxes	—		4,567	1,129	(4	)	5,692
Employee benefit obligations	—		596	197	—		793
Other liabilities and deferred credits	6,282		2,198	6,458	(14,443	)	495
Total Liabilities	12,177		17,061	15,139	(15,359	)	29,018
Common stock	14,346		25,400	8,020	(33,420	)	14,346
Retained earnings	6,991		7,983	1,249	(9,261	)	6,962
Accumulated other comprehensive income	77		77	352	(429	)	77
Noncontrolling interests	—		—	444	—		444
Total Liabilities and Equity	$	33,591	50,521	25,204	(58,469	)	50,847

27

	Millions of Dollars
	At December 31, 2013
Balance Sheet	Phillips 66		Phillips 66 Company	All Other Subsidiaries	Consolidating Adjustments		Total Consolidated
Assets
Cash and cash equivalents	$	—	2,162	3,238	—		5,400
Accounts and notes receivable	9		2,174	8,130	(681	)	9,632
Inventories	—		1,962	1,392	—		3,354
Prepaid expenses and other current assets	10		368	473	—		851
Total Current Assets	19		6,666	13,233	(681	)	19,237
Investments and long-term receivables	33,178		27,417	7,135	(56,510	)	11,220
Net properties, plants and equipment	—		12,031	3,367	—		15,398
Goodwill	—		3,094	2	—		3,096
Intangibles	—		694	4	—		698
Other assets	40		112	1	(4	)	149
Total Assets	$	33,237	50,014	23,742	(57,195	)	49,798
Liabilities and Equity
Accounts payable	$	1	7,507	4,263	(681	)	11,090
Short-term debt	—		18	6	—		24
Accrued income and other taxes	—		250	622	—		872
Employee benefit obligations	—		422	54	—		476
Other accruals	49		178	242	—		469
Total Current Liabilities	50		8,375	5,187	(681	)	12,931
Long-term debt	5,796		152	183	—		6,131
Asset retirement obligations and accrued environmental costs	—		527	173	—		700
Deferred income taxes	—		5,045	1,084	(4	)	6,125
Employee benefit obligations	—		724	197	—		921
Other liabilities and deferred credits	5,441		2,155	6,691	(13,689	)	598
Total Liabilities	11,287		16,978	13,515	(14,374	)	27,406
Common stock	16,291		25,938	8,302	(34,240	)	16,291
Retained earnings	5,622		7,061	1,163	(8,224	)	5,622
Accumulated other comprehensive income	37		37	320	(357	)	37
Noncontrolling interests	—		—	442	—		442
Total Liabilities and Equity	$	33,237	50,014	23,742	(57,195	)	49,798

28

	Millions of Dollars
	Three Months Ended March 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 continuing operating activities	$	52		11		1,438		(105	)	1,396
Net cash provided by discontinued operations	—			—		2		—		2
Net Cash Provided by Operating Activities	52			11		1,440		(105	)	1,398
Cash Flows From Investing Activities
Capital expenditures and investments*	—			(841	)	(449	)	718		(572	)
Proceeds from asset dispositions	—			871		36		(400	)	507
Intercompany lending activities	1,291			(66	)	(1,225	)	—		—
Other	—			(38	)	51		—		13
Net cash provided by (used in) continuing investing activities	1,291			(74	)	(1,587	)	318		(52	)
Net cash used in discontinued operations	—			—		(34	)	—		(34	)
Net Cash Provided by (Used in) Investing Activities	1,291			(74	)	(1,621	)	318		(86	)
Cash Flows From Financing Activities
Repayment of debt	—			(3	)	(5	)	—		(8	)
Issuance of common stock	(20		)	—		—		—		(20	)
Repurchase of common stock	(640		)	—		—		—		(640	)
Share exchange—PSPI transaction	(450		)	—		—		—		(450	)
Dividends paid on common stock	(229		)	—		(93	)	93		(229	)
Distributions to controlling interests	—			—		(274	)	274		—
Distributions to noncontrolling interests	—			—		(4	)	—		(4	)
Other*	(4		)	—		580		(580	)	(4	)
Net cash provided by (used in) continuing financing activities	(1,343		)	(3	)	204		(213	)	(1,355	)
Net cash provided by (used in) discontinued operations	—			—		—		—		—
Net Cash Provided by (Used in) Financing Activities	(1,343		)	(3	)	204		(213	)	(1,355	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—		(31	)	—		(31	)
Net Change in Cash and Cash Equivalents	—			(66	)	(8	)	—		(74	)
Cash and cash equivalents at beginning of period	—			2,162		3,238		—		5,400
Cash and Cash Equivalents at End of Period	$	—		2,096		3,230		—		5,326

* Includes intercompany capital contributions.

29

	Millions of Dollars
	Three Months Ended March 31, 2013
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	$	70		1,335		786		—		2,191
Net cash provided by discontinued operations	—			—		22		—		22
Net Cash Provided by Operating Activities	70			1,335		808		—		2,213
Cash Flows From Investing Activities
Capital expenditures and investments	—			(186	)	(216	)	20		(382	)
Proceeds from asset dispositions	—			—		9		—		9
Intercompany lending activities	515			(723	)	208		—		—
Collection of advances/loans—related parties	—			—		55		—		55
Net cash provided by (used in) continuing investing activities	515			(909	)	56		20		(318	)
Net cash used in discontinued operations	—			—		(5	)	—		(5	)
Net Cash Provided by (Used in) Investing Activities	515			(909	)	51		20		(323	)
Cash Flows From Financing Activities
Repayment of debt	—			(3	)	—		—		(3	)
Issuance of common stock	(6		)	—		—		—		(6	)
Repurchase of common stock	(382		)	—		—		—		(382	)
Dividends paid on common stock	(194		)	—		—		—		(194	)
Other	(3		)	3		20		(20	)	—
Net cash provided by (used in) continuing financing activities	(585		)	—		20		(20	)	(585	)
Net cash provided by (used in) discontinued operations	—			—		—		—		—
Net Cash Provided by (Used in) Financing Activities	(585		)	—		20		(20	)	(585	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—		(26	)	—		(26	)
Net Change in Cash and Cash Equivalents	—			426		853		—		1,279
Cash and cash equivalents at beginning of period	—			2,410		1,064		—		3,474
Cash and Cash Equivalents at End of Period	$	—		2,836		1,917		—		4,753

30

Item 2.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis is the company’s analysis of its financial performance, financial condition, and significant trends that may affect future performance. It should be read in conjunction with the consolidated financial statements and notes included elsewhere in this report. It contains forward-looking statements including, without limitation, statements relating to the company’s plans, strategies, objectives, expectations and intentions that are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “estimate,” “believe,” “budget,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” “will,” “would,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” and similar expressions identify forward-looking statements. The company does not undertake to update, revise or correct any of the forward-looking information unless required to do so under the federal securities laws. Readers are cautioned that such forward-looking statements should be read in conjunction with the company’s disclosures under the heading: “CAUTIONARY STATEMENT FOR THE PURPOSES OF THE ‘SAFE HARBOR’ PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995,” beginning on page 44.

The terms “earnings” and “loss” as used in Management’s Discussion and Analysis refer to net income (loss) attributable to Phillips 66.

BUSINESS ENVIRONMENT AND EXECUTIVE OVERVIEW

Phillips 66 is an energy manufacturing and logistics company with midstream, chemicals, refining, and marketing and specialties businesses. At March 31, 2014, we had total assets of $51 billion. Our common stock trades on the New York Stock Exchange under the symbol “PSX.”

Executive Overview

We reported earnings of $1,572 million in the first quarter of 2014, generated $1,398 million in cash from operating activities, and received $507 million from asset dispositions. We used available cash to fund capital expenditures and investments of $572 million, pay dividends of $229 million, and repurchase $640 million of our common stock. We also had a cash outflow of $450 million related to the share exchange on the Phillips Specialty Products Inc. (PSPI) transaction. We ended the first quarter of 2014 with $5.3 billion of cash and cash equivalents and approximately $5.4 billion of total capacity available under our liquidity facilities.

In 2013, we formed Phillips 66 Partners LP, a master limited partnership, to own, operate, develop and acquire primarily fee-based crude oil, refined petroleum product and natural gas liquids (NGL) pipelines and terminals, as well as other transportation and midstream assets. On March 1, 2014, we contributed to Phillips 66 Partners certain transportation, terminaling and storage assets for total consideration of $700 million. These assets consisted of our Gold Line products system and the Medford spheres, two newly constructed refinery-grade propylene storage spheres. Since we consolidate Phillips 66 Partners for financial reporting purposes, this transaction was eliminated upon consolidation and did not impact our financial position or cash flow.

Basis of Presentation

Effective January 1, 2014, we changed the organizational structure of the internal financial information reviewed by our chief executive officer, and determined this resulted in a change in the composition of our operating segments. The primary effects of this reporting reorganization were:

• We moved two of our equity investments, Excel Paralubes and Jupiter Sulphur, LLC, as well as the commission revenues related to needle and anode coke, polypropylene and solvents, from the Refining segment to the Marketing and Specialties (M&S) segment.

• We moved several refining logistics projects from the Refining segment to the Midstream segment.

The new segment alignment is presented for the three-month period ended March 31, 2014, with the prior periods recast for comparability.

31

Business Environment

The Midstream segment includes our 50 percent equity investment in DCP Midstream, LLC (DCP Midstream). Earnings of DCP Midstream are closely linked to NGL prices, natural gas prices and crude oil prices. Industry NGL prices increased in the first quarter of 2014, compared with the first quarter and fourth quarter of 2013, due to strong demand. During late 2013, demand for propane increased greatly due to declining storage levels in the Midwest United States, largely from more grain crop drying and extreme winter weather. Natural gas prices increased in the first quarter of 2014, compared with the first quarter and fourth quarter of 2013. The increase in natural gas prices was largely due to increased demand and lower storage levels from extreme winter weather.

The Chemicals segment consists of our 50 percent equity investment in Chevron Phillips Chemical Company LLC (CPChem). The chemicals and plastics industry is mainly a commodity-based industry where the margins for key products are based on market factors. The chemicals industry continues to experience higher ethylene margins in regions of the world where production is based upon NGL versus crude-derived feedstocks. In particular, companies with North American ethane-based crackers benefited from the lower-priced feedstocks and improved ethylene margins, as well as improved margins for polyethylene, an ethylene derivative.

Results for our Refining segment depend largely on refining margins, cost control, refinery throughput, and product yields. The crack spread is a measure of the difference between market prices for refined petroleum products and crude oil, and it is used within our industry as an indicator for refining margins. The U.S. 3:2:1 crack spread (three barrels of crude oil producing two barrels of gasoline and one barrel of diesel) decreased in the first quarter of 2014, compared with the first quarter of 2013, but increased compared with the fourth quarter of 2013. The first-quarter 2014 domestic industry crack spread declined compared with the first quarter of 2013, largely as the result of average market gasoline and distillate prices declining more than the average market crude oil price. The increase in the first-quarter 2014 domestic industry crack spread compared with the fourth quarter of 2013 was primarily due to higher gasoline prices. North American crude production continues to grow at a rapid pace, keeping downward pressure on crude prices. However, increased pipeline capacity connecting the Midcontinent to the Gulf Coast has resulted in narrower inland crude discounts than in the past.

The Northwest Europe benchmark crack spread in the first quarter of 2014 decreased compared with both the first quarter and fourth quarter of 2013.  The decline from the first quarter of 2013 was a result of lower gasoline and distillate cracks while the decline from the fourth quarter of 2013 was a result of lower distillate cracks. European oil product demand growth is still negative due to the ongoing weak economic situation and abnormally warm winter. Gasoline remains oversupplied and distillate remains well supplied by imports from outside Europe.

Results for our M&S segment depend largely on marketing fuel margins, base oil margins, lubricant margins and other specialty product margins. These margins are primarily based on market factors, largely determined by the relationship between demand and supply. Marketing fuel margins are primarily determined by the trend of the spot prices for refined products. Generally, a downward trend of spot prices has a favorable impact on the marketing fuel margins, while an upward trend of spot prices has an unfavorable impact on marketing fuel margins.

32

RESULTS OF OPERATIONS

Unless otherwise indicated, discussion of results for the three-month period ended March 31, 2014, is based on a comparison with the corresponding period of 2013.

Consolidated Results

A summary of net income (loss) attributable to Phillips 66 by business segment follows:

	Millions of Dollars
	Three Months Ended March 31
	2014			2013
Midstream	$	188		111
Chemicals	316			282
Refining	306			904
Marketing and Specialties	137			190
Corporate and Other	(81		)	(95	)
Discontinued Operations	706			15
Net income attributable to Phillips 66	$	1,572		1,407

Earnings for Phillips 66 increased$165 million, or 12 percent, in the first quarter of 2014. The increase was primarily due to the recognition of a noncash $696 million gain related to the PSPI share exchange. This increase was mostly offset by lower realized refining margins resulting partially from decreased market crack spreads and impacts related to narrowing crude differentials. See the “Segment Results” section for additional information on our segment results.

Statement of Income Analysis

Sales and other operating revenuesand purchased crude oil and products for the first quarter of 2014 both decreased2 percent, primarily due to lower petroleum product and crude oil prices, respectively.

Equity in earnings of affiliatesdecreased25 percent for the first quarter of 2014, which primarily resulted from decreased earnings from WRB Refining LP (WRB), partially offset by increased earnings from CPChem and DCP Midstream. Equity in earnings of WRB decreased 70 percent in the first quarter of 2014, mainly due to lower refining margins. See the “Segment Results” section for additional information on CPChem and DCP Midstream earnings.

Operating expenses for the first quarter of 2014increased$112 million, or 11 percent, primarily resulting from spending related to higher utility costs due to increased natural gas prices, as well as turnarounds at our refineries.

Selling, general and administrative expensesincreased$75 million, or 23 percent, in the first quarter of 2014, primarily due to additional fees under marketing consignment fuels agreements, as well as costs associated with the acquisition of an additional interest in an entity that operates a power and steam generation plant.

Foreign currency transaction (gains) losses for the first quarter of 2014 were a $19 million gain, compared with a loss of $2 million for the first quarter of 2013. The favorable change was primarily due to the U.S. dollar remaining constant against both the British pound and the euro during the first quarter of 2014, compared with the U.S. dollar strengthening against both the British pound and the euro during the first quarter of 2013.

See Note 20—Income Taxes, in the Notes to Consolidated Financial Statements, for information regarding our provision for income taxes and effective tax rates.

33

Income from discontinued operationsincreased$691 million in the first quarter of 2014, due to the completion of the PSPI share exchange on February 25, 2014. See Note 4—Assets Held for Sale or Sold, in the Notes to Consolidated Financial Statements, for additional information on this transaction.

Segment Results

Midstream

	Three Months Ended March 31
	2014		2013
	Millions of Dollars
Net Income Attributable to Phillips 66
Transportation	$	62	45
DCP Midstream	83		56
NGL	43		10
Total Midstream	$	188	111

	Dollars Per Unit
Weighted Average NGL Price*
DCP Midstream (per barrel)	$	44.52	37.45
DCP Midstream (per gallon)	1.06		0.89
* Based on index prices from the Mont Belvieu and Conway market hubs that are weighted by NGL component and location mix. 2013 weighted average NGL prices have been recast to reflect the impact of ethane rejection.

	Thousands of Barrels Daily
Transportation Volumes
Pipelines*	3,101	3,032
Terminals	1,477	1,041
Operating Statistics
NGL extracted**	223	198
NGL fractionated***	112	117

* Pipelines represent the sum of volumes transported through each separately tariffed pipeline segment, including our share of equity volumes from Yellowstone Pipe Line Company and Lake Charles Pipe Line Company.

** Includes our share of equity affiliates.

*** Excludes DCP Midstream.

The Midstream segment purchases raw natural gas from producers and gathers natural gas through an extensive network of pipeline gathering systems. The natural gas is then processed to extract NGL from the raw gas stream. The remaining “residue” gas is marketed to electric utilities, industrial users and gas marketing companies. Most of the NGLs are fractionated—separated into individual components such as ethane, propane and butane—and marketed as chemical feedstock, fuel or blendstock. In addition, the Midstream segment includes U.S. transportation and terminaling services associated with the movement of crude oil, refined and specialty products, natural gas and NGL, as well as NGL fractionation, trading and marketing businesses in the United States. The Midstream segment includes our 50 percent equity investment in DCP Midstream and our investment in Phillips 66 Partners LP.

Earnings from the Midstream segment increased$77 million, or 69 percent, in the first quarter of 2014. The improvements were driven by higher earnings from each of our business lines.

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Transportation earnings increased $17 million in the first quarter of 2014. This increase primarily resulted from increased throughput fees, as well as higher earnings associated with railcar activity.

The $27 million increase in earnings of DCP Midstream in the first quarter of 2014 primarily resulted from higher NGL and natural gas prices. See the “Business Environment and Executive Overview” section for information on market factors impacting this quarter's results.

DCP Midstream Partners, LP (DCP Partners), is a publicly-traded master limited partnership and a subsidiary of DCP Midstream. DCP Partners issues, from time to time, limited partner units to the public. These issuances benefited our equity in earnings from DCP Midstream, on an after-tax basis, by approximately $30 million in the three-month period ended March 31, 2014, compared with approximately $27 million in the corresponding period of 2013.

Earnings of our NGL business increased $33 million for the three-month period ended March 31, 2014. The increase was primarily due to improved margins driven by strong propane prices and inventory impacts.

Chemicals

	Three Months Ended March 31
	2014		2013
	Millions of Dollars
Net Income Attributable to Phillips 66	$	316	282

	Millions of Pounds
CPChem Externally Marketed Sales Volumes*
Olefins and Polyolefins	4,302	4,036
Specialties, Aromatics and Styrenics	1,569	1,496
	5,871	5,532
* Includes 100 percent of CPChem's outside sales of produced petrochemical products, as well as commission sales from equity affiliates.

Olefins and Polyolefins Capacity Utilization (percent) 93 % 91 %

The Chemicals segment consists of our 50 percent interest in CPChem, which we account for under the equity method. CPChem uses NGL and other feedstocks to produce petrochemicals. These products are then marketed and sold or used as feedstocks to produce plastics and other chemicals.

Earnings from the Chemicals segment increased$34 million, or 12 percent, in the first quarter of 2014. The increase in earnings was primarily driven by improved polyethylene realized margins, higher equity earnings from CPChem's equity affiliates and lower turnaround activity costs. These increases were partially offset by an increase in utility costs due to higher natural gas prices. See the “Business Environment and Executive Overview” section for information on market factors impacting this quarter's results.

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Refining

	Three Months Ended March 31
	2014			2013
	Millions of Dollars
Net Income (Loss) Attributable to Phillips 66
Atlantic Basin/Europe	$	16		95
Gulf Coast	77			35
Central Corridor	222			588
Western/Pacific	(47		)	63
Other Refining	38			123
Worldwide	$	306		904
	Dollars Per Barrel
Refining Margins*
Atlantic Basin/Europe	$	7.46		8.61
Gulf Coast	8.64			8.08
Central Corridor	15.21			27.29
Western/Pacific	7.02			9.64
Worldwide	9.88			13.78
* Based on total processed inputs and includes proportional share of refining margins contributed by certain equity affiliates.
	Thousands of Barrels Daily
Operating Statistics
Refining operations*
Atlantic Basin/Europe
Crude oil capacity	588			588
Crude oil processed	551			571
Capacity utilization (percent)	94			97
Refinery production	588			618
Gulf Coast
Crude oil capacity	733			733
Crude oil processed	613			584
Capacity utilization (percent)	84			80
Refinery production	717			646
Central Corridor
Crude oil capacity	485			475
Crude oil processed	466			457
Capacity utilization (percent)	96			96
Refinery production	483			475
Western/Pacific
Crude oil capacity	440			440
Crude oil processed	395			401
Capacity utilization (percent)	90			91
Refinery production	429			445
Worldwide
Crude oil capacity	2,246			2,236
Crude oil processed	2,025			2,013
Capacity utilization (percent)	90			90
Refinery production	2,217			2,184
* Includes our share of equity affiliates.

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The Refining segment buys, sells and refines crude oil and other feedstocks into petroleum products (such as gasoline, distillates and aviation fuels) at 15 refineries, mainly in the United States, Europe and Asia.

Earnings for the Refining segment decreased $598 million, or 66 percent, in the first quarter of 2014. The decrease was primarily due to lower realized refining margins resulting partially from decreased market crack spreads and impacts related to narrowing crude differentials. See the “Business Environment and Executive Overview” section for information on industry crack spreads and other market factors impacting this quarter’s results. Also contributing to the lower results were increased maintenance and turnaround costs in the first quarter of 2014, as well as higher utility costs due to increased natural gas prices.

Our worldwide refining crude oil capacity utilization rate was 90 percent in the first quarter of 2014 and 2013.

Marketing and Specialties

	Three Months Ended March 31
	2014		2013
	Millions of Dollars
Net Income Attributable to Phillips 66
Marketing and Other	$	93	177
Specialties	44		13
Total Marketing and Specialties	$	137	190

	Dollars Per Barrel
Realized Marketing Fuel Margin*
U.S.	$	1.19	1.02
International	3.72		3.16

* On third-party petroleum products sales.

	Dollars Per Gallon
U.S. Average Wholesale Prices*
Gasoline	$	2.79	2.93
Distillates	3.10		3.14
* Excludes excise taxes.

	Thousands of Barrels Daily
Marketing Petroleum Products Sales Volumes
Gasoline	1,119	1,105
Distillates	944	956
Other products	16	16
Total	2,079	2,077

The M&S segment purchases for resale and markets refined petroleum products (such as gasoline, distillates and aviation fuels), mainly in the United States and Europe. In addition, this segment includes the manufacturing and marketing of specialty products (such as base oils and lubricants), as well as power generation operations.

The M&S segment earnings were $137 million in the first quarter of 2014, a decrease of $53 million, or 28 percent. Earnings in the first quarter of 2014 were unfavorably impacted by costs associated with the acquisition of an additional interest in an entity that operates a power and steam generation plant. Earnings in the first quarter of 2013 benefited from a full quarter of earnings from our U.K. power generation business, which was sold in July 2013, and the biodiesel tax

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credit program that was discontinued in 2014. See the “Business Environment and Executive Overview” section for information on marketing fuel margins and other market factors impacting this quarter's results.

Corporate and Other

	Millions of Dollars
	Three Months Ended March 31
	2014			2013
Net Income (Loss) Attributable to Phillips 66
Net interest	$	(41	)	(43	)
Corporate general and administrative expenses	(40		)	(34	)
Technology	(13		)	(12	)
Other	13			(6	)
Total Corporate and Other	$	(81	)	(95	)

Net interest consists of interest and financing expense, net of interest income and capitalized interest. Corporate general and administrative expenses increased$6 million in the three-month period ended March 31, 2014. Partially contributing to this increase was greater charitable contributions.

The category “Other” includes certain income tax expenses, environmental costs associated with sites no longer in operation, foreign currency transaction gains and losses and other costs not directly associated with an operating segment. The decrease in costs was primarily due to expenditures in the first quarter of 2013, related to an asset impairment and higher environmental costs, as well as increased foreign tax credit utilization benefit in the first quarter of 2014.

Discontinued Operations

	Millions of Dollars
	Three Months Ended March 31
	2014		2013
Net Income Attributable to Phillips 66
Discontinued operations	$	706	15

In December 2013, we entered into an agreement to exchange the stock of PSPI, a flow improver business, which was included in our M&S segment, for shares of Phillips 66 common stock owned by the other party to the transaction. On February 25, 2014, we completed the PSPI share exchange, resulting in the receipt of approximately 17.4 million shares of Phillips 66 common stock, which are held as treasury shares, and the recognition of a before-tax noncash gain of $696 million. See Note 4—Assets Held for Sale or Sold, in the Notes to Consolidated Financial Statements, for additional information on this transaction.

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CAPITAL RESOURCES AND LIQUIDITY

Financial Indicators

	Millions of Dollars Except as Indicated
	March 31 2014			December 31 2013
Short-term debt	$	40		24
Total debt	6,217			6,155
Total equity	21,829			22,392
Percent of total debt to capital*	22		%	22
Percent of floating-rate debt to total debt	1		%	1
* Capital includes total debt and total equity.

To meet our short- and long-term liquidity requirements, we look to a variety of funding sources, but rely primarily on cash generated from operating activities. During the first three months of 2014, we generated $1,398 million in cash from operations and received $507 million from asset dispositions. This available cash was primarily used for capital expenditures and investments ($572 million), repurchases of our common stock ($640 million), the PSPI share exchange ($450 million) and dividend payments on our common stock ($229 million). During the first three months of 2014, cash and cash equivalents decreased by $74 million to $5,326 million.

In addition to cash flows from operating activities, we rely on our credit facility programs, asset sales and our ability to issue securities using our shelf registration statement to support our short- and long-term liquidity requirements. We believe current cash and cash equivalents and cash generated by operations, together with access to external sources of funds as described below in the “Significant Sources of Capital” section, will be sufficient to meet our funding requirements in the near and long term, including our capital spending, dividend payments, defined benefit plan contributions, repayment of debt and share repurchases.

Significant Sources of Capital

Operating Activities

During the first three months of 2014, cash provided by operating activities was $1,398 million, compared with $2,213 million for the first three months of 2013. The decrease in the 2014 period reflected lower realized refining margins and reduced distributions from CPChem, partially offset by increased distributions from WRB. Additionally, reduced positive working capital impacts were driven by a smaller increase in payables, partially offset by decreased receivables.

Our short- and long-term operating cash flows are highly dependent upon refining and marketing margins, NGL prices, and chemicals margins. Prices and margins in our industry are typically volatile, and are driven by market conditions over which we have little or no control. Absent other mitigating factors, as these prices and margins fluctuate, we would expect a corresponding change in our operating cash flows.

The level and quality of output from our refineries impacts our cash flows. The output at our refineries is impacted by such factors as operating efficiency, maintenance turnarounds, market conditions, feedstock availability and weather conditions. We actively manage the operations of our refineries and, typically, any variability in their operations has not been as significant to cash flows as that caused by margins and prices.

Our operating cash flows are also impacted by dividend decisions made by our equity affiliates, including DCP Midstream, CPChem and WRB. During the first three months of 2014, cash from operations included dividends of $1,410 million from our equity affiliates, compared with $1,116 million during the same period of 2013. We cannot control the amount of future dividends from equity affiliates; therefore, future dividend payments by these companies are not assured.

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WRB

WRB is a 50-percent-owned business venture with Cenovus Energy Inc. (Cenovus). Cenovus was obligated to contribute $7.5 billion, plus accrued interest, to WRB over a 10-year period that began in 2007. In the first quarter of 2014, Cenovus prepaid its remaining balance under this obligation. As a result, WRB declared a special dividend, which was distributed to the co-venturers in March 2014. Of the $1,232 million that we received, $760 million was considered a return on our investment in WRB (an operating cash inflow), and $472 million was considered a return of our investment in WRB (an investing cash inflow). The return of investment portion of the dividend was included in the “Proceeds from assets dispositions” line in our consolidated statement of cash flows.

Contribution to Phillips 66 Partners LP

Effective March 1, 2014, we contributed to Phillips 66 Partners certain transportation, terminaling and storage assets for total consideration of $700 million. These assets consisted of the Gold Line products system and the Medford spheres, two newly constructed refinery-grade propylene storage spheres. Phillips 66 Partners financed the acquisition with cash on hand of $400 million, the issuance to us of 3,530,595 and 72,053 additional common and general partner units, respectively, valued at $140 million, and a five-year, $160 million note payable to a subsidiary of Phillips 66. See Note 21—Phillips 66 Partners LP, in the Notes to Consolidated Financial Statements, for additional information.

Credit Facilities

As of March 31, 2014, no amount had been drawn under our $4.5 billion credit facility; however, $51 million in letters of credit had been issued that were supported by this facility. As of March 31, 2014, no amount had been drawn under Phillips 66 Partners' $250 million revolving credit facility.

Trade Receivables Securitization Facility

As of March 31, 2014, no amount had been drawn under our $696 million trade receivables securitization facility; however, $26 million in letters of credit had been issued that were collateralized by trade receivables held by a subsidiary under this facility.

Shelf Registration

We have a universal shelf registration statement on file with the U.S. Securities and Exchange Commission (SEC) under which we, as a well-known seasoned issuer, have the ability to issue and sell an indeterminate amount of various types of debt and equity securities.

Off-Balance Sheet Arrangements

In April 2012, in connection with our separation from ConocoPhillips (the Separation), we entered into an agreement to guarantee 100 percent of certain outstanding debt obligations of Merey Sweeny, L.P. (MSLP). At March 31, 2014, the aggregate principal amount of MSLP debt guaranteed by us was $214 million.

For additional information about guarantees, see Note 11—Guarantees, in the Notes to Consolidated Financial Statements.

Capital Requirements

For information about our capital expenditures and investments, see the “Capital Spending” section.

Our debt balance at both March 31, 2014, and December 31, 2013, was $6.2 billion. Our debt-to-capital ratio was 22 percent at both March 31, 2014, and December 31, 2013, within our target range of 20-to-30 percent.

On February 7, 2014, our Board of Directors declared a quarterly cash dividend of $0.39 per common share. The dividend was paid on March 3, 2014, to holders of record at the close of business on February 18, 2014.

During 2012 and 2013, our Board of Directors authorized repurchases totaling up to $5 billion of our outstanding common stock. The share repurchases are expected to be funded primarily through available cash. During the first quarter of 2014, we repurchased 8,410,109 shares at a cost of $640 million. Since the inception of our share repurchases in 2012, through March 31, 2014, we have repurchased a total of 52,516,489 shares at a cost of $3,242 million. Shares of stock repurchased are held as treasury shares.

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In December 2013, we announced that we had entered into an agreement to exchange the stock of PSPI for shares of our common stock held by the other party to the transaction. On February 25, 2014, we completed the PSPI share exchange, resulting in the receipt of approximately 17.4 million shares of Phillips 66 common stock, which are held as treasury shares, and the recognition of a before-tax, noncash gain of $696 million.

Capital Spending

	Millions of Dollars
	Three Months Ended March 31
	2014		2013
Capital Expenditures and Investments
Midstream	$	288	115
Chemicals	—		—
Refining	186		131
Marketing and Specialties	84		97
Corporate and Other	14		39
Total consolidated from continuing operations	$	572	382
Discontinued operations	$	—	5
Selected Equity Affiliates*
DCP Midstream	$	178	274
CPChem**	155		106
WRB	23		29
	$	356	409

* Our share of capital spending, which is self-funded by the equity affiliate.

** 2013 has been recast to reflect a change in CPChem's basis of presentation.

Midstream

During the first three months of 2014, DCP Midstream had a self-funded capital program, and thus required no new capital infusions from us or our co-venturer. During this period, on a 100 percent basis, DCP Midstream's capital expenditures and investments were approximately $355 million.

During the first three months of 2014, other capital spending in our Midstream segment not related to DCP Midstream included construction activities related to our Sweeny Fractionator I project, the purchase of an additional 5.7 percent interest in the refined products Explorer Pipeline for $61 million, thereby increasing our ownership to 19.5 percent, and spending associated with return, reliability and maintenance projects in our Transportation business. In addition to our Sweeny Fractionator I project, our major construction activities in progress include the installation of rail racks to accept advantaged crude deliveries at the Bayway and Ferndale refineries.

Chemicals

During the first three months of 2014, CPChem had a self-funded capital program, and thus required no new capital infusions from us or our co-venturer. During this period, on a 100 percent basis, CPChem's capital expenditures and investments were $310 million, primarily for their U.S. Gulf Coast Petrochemicals Project. We are currently forecasting CPChem to remain self-funding through 2014.

Refining

Capital spending for the Refining segment during the first three months of 2014 was primarily for air emission reduction projects to meet new environmental standards, refinery upgrade projects to increase accessibility of advantaged crudes and improve product yields, improvements to the operating integrity of key processing units and safety-related projects.

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Major construction activities in progress include:

• Installation of facilities to reduce nitrous oxide emissions from the fluid catalytic cracker at the Alliance Refinery.

• Installation of a tail gas treating unit at the Humber Refinery to reduce emissions from the sulfur recovery units.

Generally, our equity affiliates in the Refining segment are intended to have self-funding capital programs.

Marketing and Specialties

Capital spending for the M&S segment during the first three months of 2014 was primarily for reliability and maintenance projects, and projects targeted at growing our international Marketing and Specialties businesses. In March 2014, we paid approximately $70 million, net of acquired cash, to acquire the remaining interest that we did not already own in an entity that operates a power and steam generation plant.

Corporate and Other

Capital spending for Corporate and Other during the first three months of 2014 was primarily for projects related to information technology and facilities.

Contingencies

A number of lawsuits involving a variety of claims that arose in the ordinary course of business have been filed against us or are subject to indemnifications provided by us. We also may be required to remove or mitigate the effects on the environment of the placement, storage, disposal or release of certain chemical, mineral and petroleum substances at various active and inactive sites. We regularly assess the need for accounting recognition or disclosure of these contingencies. In the case of all known contingencies (other than those related to income taxes), we accrue a liability when the loss is probable and the amount is reasonably estimable. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. We do not reduce these liabilities for potential insurance or third-party recoveries. If applicable, we accrue receivables for probable insurance or other third-party recoveries. In the case of income-tax-related contingencies, we use a cumulative probability-weighted loss accrual in cases where sustaining a tax position is less than certain.

Based on currently available information, we believe it is remote that future costs related to known contingent liability exposures will exceed current accruals by an amount that would have a material adverse impact on our consolidated financial statements. As we learn new facts concerning contingencies, we reassess our position both with respect to accrued liabilities and other potential exposures. Estimates particularly sensitive to future changes include contingent liabilities recorded for environmental remediation, tax and legal matters. Estimated future environmental remediation costs are subject to change due to such factors as the uncertain magnitude of cleanup costs, the unknown time and extent of such remedial actions that may be required, and the determination of our liability in proportion to that of other responsible parties. Estimated future costs related to tax and legal matters are subject to change as events evolve and as additional information becomes available during the administrative and litigation processes.

Legal and Tax Matters

Our legal and tax matters are handled by our legal and tax organizations. These organizations apply their knowledge, experience and professional judgment to the specific characteristics of our cases and uncertain tax positions. We employ a litigation management process to manage and monitor the legal proceedings against us. Our process facilitates the early evaluation and quantification of potential exposures in individual cases and enables the tracking of those cases that have been scheduled for trial and/or mediation. Based on professional judgment and experience in using these litigation management tools and available information about current developments in all our cases, our legal organization regularly assesses the adequacy of current accruals and determines if adjustment of existing accruals, or establishment of new accruals, is required. In the case of income-tax-related contingencies, we monitor tax legislation and court decisions, the status of tax audits and the statute of limitations within which a taxing authority can assert a liability.

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Environmental

We are subject to the same numerous international, federal, state and local environmental laws and regulations as other companies in our industry. For a discussion of the most significant of these environmental laws and regulations, including those with associated remediation obligations, see the “Environmental” section in Management’s Discussion and Analysis of Financial Condition and Results of Operations on pages 50, 51 and 52 of our 2013 Annual Report on Form 10-K.

From time to time, we receive requests for information or notices of potential liability from the U.S. Environmental Protection Agency (EPA) and state environmental agencies alleging that we are a potentially responsible party under the Federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) or an equivalent state statute. On occasion, we also have been made a party to cost recovery litigation by those agencies or by private parties. These requests, notices and lawsuits assert potential liability for remediation costs at various sites that typically are not owned by us, but allegedly contain wastes attributable to our past operations. As of December 31, 2013, we reported that we had been notified of potential liability under CERCLA and comparable state laws at 35 sites around the United States. During the first three months of 2014, there were no new sites for which we received notification of potential liability nor was there resolution of any previously identified sites, leaving 35 unresolved sites with potential liability at March 31, 2014.

At March 31, 2014, our consolidated balance sheet included a total environmental accrual of $488 million, compared with $492 million at December 31, 2013. We expect to incur a substantial amount of these expenditures within the next 30 years.

Notwithstanding any of the foregoing, and as with other companies engaged in similar businesses, environmental costs and liabilities are inherent concerns in our operations and products, and there can be no assurance that material costs and liabilities will not be incurred. However, we currently do not expect any material adverse effect on our results of operations or financial position as a result of compliance with current environmental laws and regulations.

Climate Change

There has been a broad range of proposed or promulgated state, national and international laws focusing on greenhouse gas (GHG) reduction. These proposed or promulgated laws apply or could apply in states and/or countries where we have interests or may have interests in the future. Laws in this field continue to evolve, and while it is not possible to accurately estimate either a timetable for implementation or our future compliance costs relating to implementation, such laws, if enacted, could have a material impact on our results of operations and financial condition. We previously disclosed that the EPA’s announcement on March 29, 2010 (published as “Interpretation of Regulations that Determine Pollutants Covered by Clean Air Act Permitting Programs,” 75 Fed. Reg. 17004 (April 2, 2010)), and the EPA’s and U.S. Department of Transportation’s joint promulgation of a Final Rule on April 1, 2010, that triggers regulation of GHGs under the Clean Air Act, may lead to more climate-based claims for damages, and may result in longer agency review time for development projects to determine the extent of potential climate change. Challenges to both the announcement and rulemaking were denied by the Court of Appeals for the D.C. Circuit (see Coalition for Responsible Regulation v. EPA, 684 F. 3d 102 (D.C. Cir. 2012)), but those government actions are subject to additional legal actions. We continue to monitor other legislative and regulatory actions and legal proceedings globally for potential impacts on our operations.

For examples of legislation or precursors for possible regulation that do or could affect our operations, see the “Climate Change” section in Management’s Discussion and Analysis of Financial Condition and Results of Operations on pages 53 and 54 of our 2013 Annual Report on Form 10-K.

NEW ACCOUNTING STANDARDS

In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” This ASU amends the definition of discontinued operations so that only disposals of components of an entity representing major strategic shifts that have a major effect on an entity’s operations and financial results will qualify for discontinued operations reporting. The ASU also requires additional disclosures about discontinued operations and individually material disposals that do not meet the definition of a discontinued operation. ASU 2014-08 is effective January 1, 2015, and earlier application is permitted,

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but only for disposals not previously reported in the financial statements. We are currently evaluating the provisions of ASU 2014-08 and assessing the impact, if any, it may have on our financial position and results of operations. Our initial assessment is that this ASU will result in fewer dispositions qualifying for discontinued operations reporting.

CAUTIONARY STATEMENT FOR THE PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This report includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can identify our forward-looking statements by the words “anticipate,” “estimate,” “believe,” “budget,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” “will,” “would,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” and similar expressions.

We based the forward-looking statements on our current expectations, estimates and projections about us and the industries in which we operate in general. We caution you these statements are not guarantees of future performance as they involve assumptions that, while made in good faith, may prove to be incorrect, and involve risks and uncertainties we cannot predict. In addition, we based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecast in the forward-looking statements. Any differences could result from a variety of factors, including the following:

• Fluctuations in NGL, crude oil and natural gas prices and petrochemical and refining margins.

• Failure of new products and services to achieve market acceptance.

• Unexpected changes in costs or technical requirements for constructing, modifying or operating our facilities or transporting our products.

• Unexpected technological or commercial difficulties in manufacturing, refining or transporting our products, including chemicals products.

• Lack of, or disruptions in, adequate and reliable transportation for our NGL, crude oil, natural gas and refined products.

• The level and success of natural gas drilling around DCP Midstream’s assets, the level and quality of gas production volumes around its assets and its ability to connect supplies to its gathering and processing systems in light of competition.

• Inability to timely obtain or maintain permits, including those necessary for capital projects; comply with government regulations; or make capital expenditures required to maintain compliance.

• Failure to complete definitive agreements and feasibility studies for, and to timely complete construction of, announced and future capital projects.

• Potential disruption or interruption of our operations due to accidents, weather events, civil unrest, political events, terrorism or cyber attacks.

• International monetary conditions and exchange controls.

• Substantial investment or reduced demand for products as a result of existing or future environmental rules and regulations.

• Liability resulting from litigation or for remedial actions, including removal and reclamation obligations under environmental regulations.

• General domestic and international economic and political developments including: armed hostilities; expropriation of assets; changes in governmental policies relating to NGL, crude oil, natural gas or refined product pricing, regulation or taxation; and other political, economic or diplomatic developments.

• Changes in tax, environmental and other laws and regulations (including alternative energy mandates) applicable to our business.

• Limited access to capital or significantly higher cost of capital related to changes to our credit profile or illiquidity or uncertainty in the domestic or international financial markets.

• The operation, financing and distribution decisions of our joint ventures.

• Domestic and foreign supplies of crude oil and other feedstocks.

• Domestic and foreign supplies of petrochemicals and refined products, such as gasoline, diesel, jet fuel and home heating oil.

• Governmental policies relating to exports of crude oil and natural gas.

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• Overcapacity or under capacity in the midstream, chemicals and refining industries.

• Fluctuations in consumer demand for refined products.

• The factors generally described in Item 1A.—Risk Factors in our 2013 Annual Report on Form 10-K.

Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information about market risks for the three months endedMarch 31, 2014, does not differ materially from that discussed under Item 7A in our 2013 Annual Report on Form 10-K.

Item 4.   CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports we file or submit under the Securities Exchange Act of 1934, as amended (the Act), is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to management, including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. As of March 31, 2014, with the participation of management, our Chairman and Chief Executive Officer and our Executive Vice President, Finance and Chief Financial Officer carried out an evaluation, pursuant to Rule 13a-15(b) of the Act, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Act). Based upon that evaluation, our Chairman and Chief Executive Officer and our Executive Vice President, Finance and Chief Financial Officer concluded that our disclosure controls and procedures were operating effectively as of March 31, 2014.

There have been no changes in our internal control over financial reporting, as defined in Rule 13a-15(f) of the Act, in the quarterly period ended March 31, 2014, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.   LEGAL PROCEEDINGS

The following is a description of reportable legal proceedings, including those involving governmental authorities under federal, state and local laws regulating the discharge of materials into the environment, for this reporting period. The information below includes material developments with respect to matters previously reported in our 2013 Annual Report on Form 10-K. There were no new matters that arose during the first quarter of 2014. While it is not possible to accurately predict the final outcome of these pending proceedings, if any one or more of such proceedings were decided adversely to Phillips 66, we expect there would be no material effect on our consolidated financial position. Nevertheless, such proceedings are reported pursuant to the SEC regulations.

Our U.S. refineries are implementing two separate consent decrees, regarding alleged violations of the Federal Clean Air Act, with the EPA, six states and one local air pollution agency. Some of the requirements and limitations contained in the decrees provide for stipulated penalties for violations. Stipulated penalties under the decrees are not automatic, but must be requested by one of the agency signatories. As part of periodic reports under the decrees or other reports required by permits or regulations, we occasionally report matters that could be subject to a request for stipulated penalties. If a specific request for stipulated penalties meeting the reporting threshold set forth in SEC rules is made pursuant to these decrees based on a given reported exceedance, we will separately report that matter and the amount of the proposed penalty.

Matters Previously Reported

Phillips 66 has resolved EPA claims regarding: 1) EPA’s allegation that Phillips 66 improperly generated certain sulfur credits at one or more of its terminals; and 2) certain items self-reported by Phillips 66 in various annual fuel attestation reports, with a settlement payment of $500,000 and our agreement to retire a portion of the disputed sulfur credits.

45

In March 2012, the Bay Area Air Quality Management District (BAAQMD) in California issued a demand to settle five Notices of Violations (NOVs) issued between 2008 and 2010. The NOVs alleged non-compliance with BAAQMD rules and/or facility permit conditions at the Rodeo Refinery. We have resolved this matter with a settlement payment of $88,900.

In September 2012, BAAQMD issued a demand to settle 14 NOVs issued in 2009 and 2010 with respect to alleged violations of regulatory and/or permit requirements at the Rodeo Refinery. We have resolved this matter with a settlement payment of $142,000.

In January 2013, the South Coast Air Quality Management District (SCAQMD) indicated that it was proceeding with enforcement regarding four NOVs issued to the company that alleged violations of air pollution regulations and/or facility permit conditions relating to operations at the Los Angeles Refinery. We have resolved this matter, along with six additional NOVs, with a settlement payment of $192,000.

Item 1A.   RISK FACTORS

There have been no material changes from the risk factors disclosed in Item 1A of our 2013 Annual Report on Form 10-K.

Item 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

					Millions of Dollars
Period	Total Number of Shares Purchased*	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs**	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
January 1-31, 2014	2,751,969	$	76.31	2,751,969	$	2,188
February 1-28, 2014	2,739,072	74.11		2,739,072	1,985
March 1-31, 2014	2,919,068	77.76		2,919,068	1,758
Total	8,410,109	$	76.10	8,410,109

* Includes repurchase of shares of common stock from company employees in connection with the company's broad-based employee incentive plans, when applicable. In addition to the amounts set forth in the table above, we received 17,422,615 shares of common stock in the PSPI share exchange with a fair value of $1,350 million at the time of exchange.

** During 2013, our Board of Directors authorized additional share repurchases of $1 billion and $2 billion on July 30 and December 6, respectively. The share repurchases are expected to be funded primarily through available cash. The shares under both authorizations will be repurchased from time to time in the open market at the company’s discretion, subject to market conditions and other factors, and in accordance with applicable regulatory requirements and the Tax Sharing Agreement entered into in connection with the Separation. We are not obligated to acquire any particular amount of common stock and may commence, suspend or discontinue purchases at any time or from time to time without prior notice. Shares of stock repurchased are held as treasury shares.

46

Item 6. EXHIBITS

Exhibit Number	Exhibit Description
10.1	First Amendment to Credit Agreement among Phillips 66, Phillips 66 Company, JPMorgan Chase Bank, N.A., and lenders named therein, dated as of June 10, 2013. (The company is refiling this exhibit, originally filed as Exhibit 10.1 to the Form 10-Q for the quarterly period ended June 30, 2013, to include cross references in the definition of a subsidiary inadvertently omitted from the original filing).
12	Computation of Ratio of Earnings to Fixed Charges.
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
32	Certifications pursuant to 18 U.S.C. Section 1350.
101.INS	XBRL Instance Document.
101.SCH	XBRL Schema Document.
101.CAL	XBRL Calculation Linkbase Document.
101.LAB	XBRL Labels Linkbase Document.
101.PRE	XBRL Presentation Linkbase Document.
101.DEF	XBRL Definition Linkbase Document.

47

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 thereunto duly authorized.

	PHILLIPS 66
	/s/ C. Doug Johnson
	C. Doug Johnson Vice President and Controller (Chief Accounting and Duly Authorized Officer)
May 1, 2014

48

EX-10.1

Exhibit 10.1

FIRST AMENDMENT TO CREDIT AGREEMENT

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of June 10, 2013, amends the Credit Agreement (the “Credit Agreement”) dated as of February 22, 2012 among PHILLIPS 66, a Delaware corporation (the “Borrower”), PHILLIPS 66 COMPANY, a Delaware corporation (the “Initial Guarantor”), the lenders party thereto (the “Lenders”) and JPMORGAN CHASE BANK, N.A., as the administrative agent for the Lenders (in such capacity, the “Administrative Agent”).

Preliminary Statement: The parties desire to amend the Credit Agreement to (i) extend the Commitment Termination Date, (ii) reduce the pricing set forth on the Pricing Grid, (iii) increase the aggregate Commitments to $4,500,000,000, (iv) make certain amendments with respect to Phillips 66 Partners LP, and (v) make certain other amendments as provided herein. Therefore, the parties hereto agree as follows:

Defined Terms; References. Unless otherwise defined in this Amendment, each capitalized term used but not otherwise defined herein has the meaning given such term in the Credit Agreement, as amended by this Amendment. Each reference to “hereof”, “hereunder”, “herein” and “hereby” and each other similar reference and each reference to “this Agreement” and each other similar reference contained in the Credit Agreement shall, after the Amendment Effective Date, refer to the Credit Agreement as amended hereby.

I. AMENDMENT

Effective as of the Amendment Effective Date (as defined in Section 2.1 below), the Credit Agreement is amended as follows:

1.1Extension of Maturity. The definition of “Commitment Termination Date” in Section 1.1 of the Credit Agreement is amended by deleting “the fifth anniversary of the Closing Date” and replacing it with “June 8, 2018”.

1.2Reduction of Applicable Margin. The Pricing Grid (the “Existing Pricing Grid”) is deleted and replaced by the Pricing Grid set forth below (the “New Pricing Grid”). The New Pricing Grid shall apply to interest and fees accruing under the Credit Agreement on and after the Amendment Effective Date. The Existing Pricing Grid shall continue to apply to interest and fees accruing under the Credit Agreement before the Amendment Effective Date.

Senior Debt Ratings	Level 1	Level 2	Level 3	Level 4	Level 5
	A or A2 (or above)	A- or A3	BBB+ or Baa1	BBB or Baa2	BBB- or Baa3 (or lower)
Applicable Margin for Eurocurrency Loans	1.000%	1.125%	1.250%	1.375%	1.500%
Applicable Margin for Reference Rate Loans	0.000%	0.125%	0.250%	0.375%	0.500%
Commitment Fee	0.080%	0.100%	0.150%	0.200%	0.250%

1.3Amendments to Defined Terms. Section 1.1 (Defined Terms) of the Credit Agreement is amended as follows:

(a)New Defined Terms. The following defined terms are hereby added to Section 1.1 of the Credit Agreement in the appropriate alphabetical order:

“First Amendment”: the First Amendment to Credit Agreement dated as of June 10, 2013 by and among the Borrower, the Initial Guarantor, the Administrative Agent, and the Lenders.

“First Amendment Effective Date”: the “Amendment Effective Date” as such term is defined in the First Amendment, which date is June 10, 2013.

“PSXP”: Phillips 66 Partners LP, a Delaware limited partnership.

“PSXP GP”: Phillips 66 Partners GP LLC, a Delaware limited liability company.

“PSXP Drop Down Transactions”: any acquisition by PSXP or its subsidiaries of master limited partnership qualifying assets of the Borrower or any Subsidiary, and all transactions consummated or agreements entered into in connection therewith; provided that (a) such acquisition shall be made for fair value (as reasonably determined by the chief financial officer of the Borrower) and (b) such acquisition is otherwise on terms and conditions that are fair and reasonable to the Borrower and the Subsidiaries, taking into account the totality of the relationship between the Borrower and the Subsidiaries, on the one hand, and PSXP and its subsidiaries, on the other.

“PSXP IPO”: the initial underwritten public offering of Equity Interests in PSXP pursuant to the PSXP Registration Statement.

“PSXP IPO Transactions”: the transactions consummated in connection with the PSXP IPO pursuant to and in accordance with the PSXP Registration Statement.

“PSXP Registration Statement”: the registration statement filed in connection with the PSXP IPO, as amended or supplemented prior to the First Amendment Effective Date, or by any amendment or supplement thereto filed after such date so long as such amendment or supplement (a) is not adverse in any material respect to the interests of the Lenders or (b) is otherwise approved by the Designated Arrangers.

(b)Amendments to Certain Defined Terms. The following definitions are amended as follows:

(i)“Commitment”. The definition of “Commitment” is amended as follows: in the proviso thereto, (x) delete “$4,000,000,000” and replace it with “$4,500,000,000”, and (y) delete “$5,000,000,000” and replace it with: “$5,500,000,000”.

(ii)“Fee Letters”. The definition of “Fee Letters” is amended by adding the following to the end thereof before the period: “and the fee letters dated June 5, 2013, executed by the Borrower in connection with the First Amendment.”

(iii)“Material Adverse Effect”. The definition of “Material Adverse Effect” is amended by deleting the period at the end of the such definition and adding the following: “; providedfurther that, in no event shall the consummation of the PSXP IPO Transactions constitute a Material Adverse Effect.”

(iv)“Principal Issuing Bank”. The definition of “Principal Issuing Bank” is amended by changing “DNB Bank ASA, Grand Cayman Branch” to “DNB Bank ASA, New York Branch”.

(v)“Subsidiary”. The last sentence of the definition of “Subsidiary” is amended in its entirety to read as follows: “Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower, provided that upon the consummation of the PSXP IPO, PSXP GP, PSXP and their respective subsidiaries, for so long as PSXP is not wholly owned, directly or indirectly, by the Borrower, in each case shall be deemed not to be Subsidiaries of the Borrower except for purposes of Sections 5.1(a), 5.1(b) and 5.6 (provided that, for the avoidance of doubt, the term “Material Adverse Effect” as used in such Section 5.6 shall be determined by reference to the Borrower and the Subsidiaries but, upon the consummation of the PSXP IPO, excluding PSXP GP, PSXP and their respective subsidiaries for so long as PSXP is not wholly owned, directly or indirectly, by the Borrower).”

1.4Amendment to Section 2.4(c). Section 2.4(c) of the Credit Agreement is amended by changing “$5,000,000,000” to “$5,500,000,000”.

1.5Amendment to Section 2.21(a) (Extension of Commitment Termination Date). Section 2.21(a) of the Credit Agreement is amended by changing the phrase “anniversary of the Closing Date” to “June 10”.

1.6Amendment to Article 3 (Representations and Warranties).Article 3 of the Credit Agreement is amended by adding the following new section to the end:

“Section 3.15    PSXP IPO. As of the date of the consummation of the PSXP IPO, upon consummation of the PSXP IPO, no Material Adverse Effect (without giving effect to the second proviso in the definition thereof) shall occur as a result thereof and the consummation of the PSXP IPO Transactions.”

1.7Amendment to Section 3.11 (Purpose of Loans). Section 3.11 of the Credit Agreement is amended in its entirety to read as follows: “The proceeds of the Loans and the Letters of Credit shall be used for general corporate purposes of the Borrower and its Subsidiaries.”

1.8Amendment to Section 5.1 (Financial Reporting Requirements). Section 5.1(c)(ii) of the Credit Agreement is amended in its entirety to read as follows:

“(ii) setting forth reasonably detailed calculations demonstrating compliance with Section 6.3(a) and Section 6.3(b), and with respect to any financial statements (beginning with the financial statements being delivered with respect to the fiscal quarter ending September 30, 2013) relating to a period that includes any date occurring on or after the consummation of the PSXP IPO, setting forth a reasonably detailed reconciliation of each of the components reflected in such calculations to the corresponding amounts set forth in such financial statements;”

1.9Amendment to Section 5.8 (Use of Proceeds). Section 5.8 of the Credit Agreement is amended in its entirety to read as follows: “The proceeds of the Loans and the Letters of Credit will be used for general corporate purposes. No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.”

1.10Amendment to Section 6.4 (Transactions with Affiliates). Section 6.4 of the Credit Agreement is amended by deleting the word “and” at the end of clause (d), deleting the period at the end of clause (e) and adding clauses (f) and (g) as follows:

“(f)    the PSXP IPO Transactions or the PSXP Drop-Down Transactions; and

(g)    transactions entered into with PSXP and its subsidiaries on terms and conditions, taken as a whole, that are fair and reasonable to the Borrower and the Subsidiaries, taking into account the totality of the relationship between the Borrower and the Subsidiaries, on the one hand, and PSXP and its Subsidiaries, on the other.”

1.11Schedule I (Commitments). Schedule I of the Credit Agreement is amended in its entirety to read as set forth in Annex I attached hereto.

II. REPRESENTATIONS AND WARRANTIES

Each Loan Party hereby represents and warrants that:

(a)prior to and after giving effect to this Amendment, the representations and warranties of such Loan Party (other than those representations and warranties that were made only on the Closing Date of the Credit Agreement) set forth in the Credit Agreement are true and correct in all material respects (provided that the foregoing materiality qualifier shall not be applicable to the representations and warranties that are subject to a materiality qualifier in the text thereof);

(b)this Amendment has been duly authorized, executed and delivered by such Loan Party and constitutes a legal, valid and binding obligation of such Loan Party enforceable in accordance with its terms, except as may be limited by general principles of equity, by concepts of reasonableness or by the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’ rights generally; and

(c)prior to and immediately after giving effect to this Amendment, no Default or Event of Default exists on and as of the date hereof.

III. CONDITIONS TO EFFECTIVENESS

3.1Effectiveness. This Amendment shall be effective on the date that the following conditions precedent shall have been satisfied (the “Amendment Effective Date”):

(a)The Administrative Agent shall have received the following, each dated the Amendment Effective Date:

(i)counterparts of this Amendment, executed by the Administrative Agent, the Swing Line Lender, each Issuing Bank, each Lender with a Commitment under the Credit Agreement as amended hereby, and each Loan Party;

(ii)a certificate of the Secretary or an Assistant Secretary of each Loan Party certifying (i) the authorization of such Loan Party to execute each Loan Document to which such Loan Party is party, (ii) the charter, bylaws or other organizational documents of such Loan Party, and (iii) the names and true signatures of the officers executing any Loan Document on behalf of such Loan Party on the Amendment Effective Date, and otherwise in form and substance reasonably satisfactory to the Administrative Agent;

(iii)favorable written opinions, reasonably satisfactory to the Administrative Agent, of each of Bracewell & Giuliani LLP, counsel to the Loan Parties, and of in-house counsel to the Loan Parties, addressed to the Administrative Agent and the Lenders, covering such matters relating to the Loan Parties and the Loan Documents as the Administrative Agent shall reasonably request; and

(iv)on or before the date that is five days prior to the Amendment Effective Date (or such later date as the Administrative Agent shall reasonably agree) all documentation and other information required by regulatory authorities with respect to the Loan Parties under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act, that has been reasonably requested by the Administrative Agent a reasonable period in advance of the date that is five days prior to the Amendment Effective Date.

(b)Payment by the Borrower to each Departing Lender (as defined in Section 4.1 below) of unpaid accrued interest, fees and all other amounts payable to such Departing Lender under the Credit Agreement.

(c)Fees and expenses that are required to be paid by the Borrower pursuant to the Loan Documents on or before the Amendment Effective Date shall have been paid.

Without limiting the generality of the provisions of Section 8.3(c) of the Credit Agreement, for purposes of determining compliance with the conditions specified in this Section, each Lender that has signed this Amendment shall be deemed to be satisfied with each document or other matter required hereunder to be satisfactory to such Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Amendment Effective Date specifying its objection thereto.

IV. REALLOCATION AND INCREASE OF COMMITMENTS

4.1Reallocation and Increase of Commitments; New Lender(s). The Lenders agree among themselves to reallocate their respective outstanding Loans and Commitments, as set forth on Annex I attached hereto, among other things, (a)permit one or more of the Lenders to increase their respective Commitments under the Credit Agreement (each, an “Increasing Lender”), and (b) allow certain additional Persons who qualify as Purchasing Lenders to become parties to the Credit Agreement, each as a Lender (each, a “New Lender”) by acquiring an interest in the Commitments. In addition, certain Lenders (each, a “Departing Lender”) desire to assign all of their rights and obligations as a Lender under the Credit Agreement to the other Lenders and to no longer be a party to the Credit Agreement.

4.2Assignment by Certain Lenders. Each of the Administrative Agent, the Swing Line Lender, the Issuing Banks, and the Borrower consents to (a) the reallocation of the Commitments as set forth on Annex I attached hereto (“Annex I”), (b) the reallocation of the outstanding Loans in accordance with each Lender’s Commitment Percentage as set forth on Annex I, (c) the increase in each Increasing Lender’s Commitment as set forth on Annex I, (d) each Departing Lender’s assignment of its rights and obligations under the Credit Agreement to the Increasing Lenders and the New Lenders, to the extent needed to achieve the Commitment levels set forth on Annex I, and (e) each New Lender’s acquisition of an interest in the Commitments as set forth on Annex I. On the Amendment Effective Date and after giving effect to such reallocation and increase of the Commitments, the Commitment and Commitment Percentage of each Lender shall be as set forth on Annex I and the Commitment of each Departing Lender shall terminate.

4.3Assignment Terms. The reallocation of the Commitments among the Lenders (including the New Lenders), including the assignment by the Departing Lenders of rights and obligations under the Credit Agreement to the Lenders, shall be deemed to have been consummated pursuant to the terms of the Assignment and Assumption attached as Exhibit D to the Credit Agreement as if such Lenders and the Departing Lenders had executed an Assignment and Assumption with respect to such reallocation. The Administrative Agent hereby waives the processing and recordation fees set forth in Section 9.6(c) of the Credit Agreement with respect to the assignments and reallocations contemplated by this Section 4.3.

V. AFFIRMATION AND RATIFICATION

Each Loan Party hereby (a) agrees and acknowledges that the execution, delivery, and performance of this Amendment shall not in any way release, diminish, impair, reduce, or, except as expressly stated herein, otherwise affect its obligations under the Loan Documents to which it is a party, which Loan Documents shall remain in full force and effect, (b) ratifies and affirms its obligations under the Credit Agreement as amended hereby and the other Loan Documents to which it is a party, and (c) acknowledges, renews and extends its continued liability under the Credit Agreement as amended hereby and the other Loan Documents to which it is a party. The Initial Guarantor expressly ratifies the Subsidiary Guarantee and ratifies and confirms that the Subsidiary Guarantee remains in full force and effect, including with respect to the Obligations as amended hereby.

VI. MISCELLANEOUS

This Amendment and the rights and obligations of the parties under this Amendment shall be governed by and construed and interpreted in accordance with the law of the State of New York. The provisions of Sections 9.10 (Jurisdiction; Venue) and 9.13 (Waiver of Jury Trial) of the Credit Agreement are hereby incorporated by reference. Article and Section headings used herein are for convenience of reference only, are not part of this Amendment and shall not affect the construction of, or be taken into consideration in interpreting, this Amendment. This Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Amendment by facsimile transmission, emailed pdf or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart hereof. Except as otherwise expressly provided by this Amendment, all of the provisions of the Credit Agreement shall remain the same.

[Remainder of Page Intentionally Left Blank. Signature Pages Follow.]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their duly authorized officers, all as of the day and year first above written.

BORROWER:

PHILLIPS 66

By: /s/ Brian R. Wenzel    

Name:    Brian R. Wenzel

Title:    Vice President and Treasurer

INITIAL GUARANTOR:

PHILLIPS 66 COMPANY

By: /s/ Brian R. Wenzel    

Name:    Brian R. Wenzel

Title:    Vice President and Treasurer

[Signature Page to

First Amendment to Credit Agreement

Phillips 66]

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent and a Lender

By:    /s/ Robert Traband    

Name:    Robert Traband

Title:    Managing Director

Signature Page to

First Amendment to Credit Agreement

Phillips 66

THE ROYAL BANK OF SCOTLAND PLC

By:    /s/ Matthew Main    

Name:    Matthew Main

Title:    Authorised Signatory

Signature Page to

First Amendment to Credit Agreement

Phillips 66

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.

By:    /s/ Maria Ferradas    

Name:    Maria Ferradas

Title:    Vice President

Signature Page to

First Amendment to Credit Agreement

Phillips 66

BANK OF AMERICA, N.A.,as an Issuing Bank and a Lender

By:    /s/ Alia Qaddumi    

Name:    Alia Qaddumi

Title:    Vice President

Signature Page to

First Amendment to Credit Agreement

Phillips 66

CITIBANK, N.A.

By:    /s/ Andrew Sidford    

Name:    Andrew Sidford

Title:    Vice President

Signature Page to

First Amendment to Credit Agreement

Phillips 66

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH

By:    /s/ Kevin Buddhdew    

Name:    Kevin Buddhdew

Title:    Authorized Signatory

By:    /s/ Michael Spaight    

Name:    Michael Spaight

Title:    Authorized Signatory

Signature Page to

First Amendment to Credit Agreement

Phillips 66

DNB BANK ASA, GRAND CAYMAN BRANCH

By:    /s/ Nikolai A. Nachamkin    

Name:    Nikolai A. Nachamkim

Title:    Senior Vice President

By:    /s/ Colleen Durkin    

Name:    Colleen Durkin

Title:    Senior Vice President

Signature Page to

First Amendment to Credit Agreement

Phillips 66

DNB BANK ASA, NEW YORK BRANCH, as Issuing Bank

By:    /s/ Nikolai A. Nachamkin    

Name:    Nikolai A. Nachamkim

Title:    Senior Vice President

By:    /s/ Colleen Durkin    

Name:    Colleen Durkin

Title:    Senior Vice President

Signature Page to

First Amendment to Credit Agreement

Phillips 66

ROYAL BANK OF CANADA

By:    /s/ Kristan Spivey    

Name:    Kristan Spivey

Title:    Authorized Signatory

Signature Page to

First Amendment to Credit Agreement

Phillips 66

THE BANK OF NOVA SCOTIA

By:    /s/ J. Frazell    

Name:    J. Frazell

Title:    Director

Signature Page to

First Amendment to Credit Agreement

Phillips 66

BARCLAYS BANK PLC

By:    /s/ Sreedhar Kona    

Name:    Sreedhar Kona

Title:    Vice President

Signature Page to

First Amendment to Credit Agreement

Phillips 66

BNP PARIBAS

By:    /s/ Claudia Zarate    

Name:    Claudia Zarate

Title:    Director

By:    /s/ Melissa Balley    

Name:    Melissa Balley

Title:    Director

Signature Page to

First Amendment to Credit Agreement

Phillips 66

DEUTSCHE BANK AG NEW YORK BRANCH

By:    /s/ Ming K. Chu    

Name:    Ming K. Chu

Title:    Vice President

By:    /s/ Virginia Cosenza    

Name:    Virginia Cosenza

Title:    Vice President

Signature Page to

First Amendment to Credit Agreement

Phillips 66

LLOYDS TSB BANK PLC

By:    /s/ Stephen Giacolone    

Name:    Stephen Giacolone

Title:    Assistant Vice President – G011

By:    /s/ Karen Welch    

Name:    Karen Welch

Title:    Vice President – W011

Signature Page to

First Amendment to Credit Agreement

Phillips 66

MIZUHO CORPORATE BANK, LTD.

By:    /s/ Leon Mo    

Name:    Leon Mo

Title:    Authorized Signatory

Signature Page to

First Amendment to Credit Agreement

Phillips 66

PNC BANK, NATIONAL ASSOCIATION

By:    /s/ M. Colin Warman    

Name:    M. Colin Warman

Title:    Vice President

Signature Page to

First Amendment to Credit Agreement

Phillips 66

SUMITOMO MITSUI BANKING CORPORATION

By:    /s/ James D. Weinstein    

Name:    James D. Weinstein

Title:    Managing Director

Signature Page to

First Amendment to Credit Agreement

Phillips 66

BAYERISCHE LANDESBANK, NEW YORK BRANCH

By:    /s/ Rolf Siebert    

Name:    Rolf Siebert

Title:    Senior Vice President

By:    /s/ Varbin Staykoff    

Name:    Varbin Staykoff

Title:    First Vice President

Signature Page to

First Amendment to Credit Agreement

Phillips 66

COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES

By:    /s/ Barbara Stacks    

Name:    Barbara Stacks

Title:    Vice President

By:    /s/ Kelly Goudge    

Name:    Kelly Goudge

Title:    Assistant Vice President

Signature Page to

First Amendment to Credit Agreement

Phillips 66

EXPORT DEVELOPMENT CANADA

By:    /s/ Nathan Nelson    

Name:    Nathan Nelson

Title:    Financing Manager

By:    /s/ Christiane de Billy    

Name:    Christiane de Billy

Title:    Senior Financing Manager

Signature Page to

First Amendment to Credit Agreement

Phillips 66

MORGAN STANLEY BANK, N.A.

By:    /s/ Kelly Chin    

Name:    Kelly Chin

Title:    Authorized Signatory

Signature Page to

First Amendment to Credit Agreement

Phillips 66

SOCIETE GENERALE

By:    /s/ Diego Medina    

Name:    Diego Medina

Title:    Director

Signature Page to

First Amendment to Credit Agreement

Phillips 66

U.S. BANK NATIONAL ASSOCIATION

By:    /s/ John Prigge    

Name:    John Prigge

Title:    Vice President

Signature Page to

First Amendment to Credit Agreement

Phillips 66

UNICREDIT BANK AG, NEW YORK BRANCH

By:    /s/ Thomas Dusch    

Name:    Thomas Dusch

Title:    Managing Director

By:    /s/ Pranav Surendranath    

Name:    Pranav Surendranath

Title:    Vice President

Signature Page to

First Amendment to Credit Agreement

Phillips 66

THE BANK OF NEW YORK MELLON

By:    /s/ Hussam S. Alsahiani    

Name:    Hussam S. Alsahiani

Title:    Vice President

Signature Page to

First Amendment to Credit Agreement

Phillips 66

COMPASS BANK

By:    /s/ Alex Mayral    

Name:    Alex Mayral

Title:    Executive Director

Signature Page to

First Amendment to Credit Agreement

Phillips 66

ABU DHABI INTERNATIONAL BANK N.V.

By:    /s/ David Young    

Name:    David Young

Title:    Vice President

By:    /s/ William Ghazar    

Name:    William Ghazar

Title:    Senior Vice President

Signature Page to

First Amendment to Credit Agreement

Phillips 66

CREDIT AGRICOLE CORPORATE & INVESTMENT BANK

By:    /s/ Page Dillehunt    

Name:    Page Dillehunt

Title:    Managing Director

By:    /s/ Sharada Manne    

Name:    Sharada Manne

Title:    Managing Director

Signature Page to

First Amendment to Credit Agreement

Phillips 66

INTESA SANPAOLO S.p.A.

By:    /s/ Glen Binder    

Name:    Glen Binder

Title:    Vice President

By:    /s/ Francesco Di Mario    

Name:    Francesco Di Mario

Title:    First Vice President & Head of Credit

Signature Page to

First Amendment to Credit Agreement

Phillips 66

THE NORTHERN TRUST COMPANY

By:    /s/ Keith Burson    

Name:    Keith Burson

Title:    Vice President

Signature Page to

First Amendment to Credit Agreement

Phillips 66

COMERICA BANK

By:    /s/ L.J. Perenyi    

Name:    L.J. Perenyi

Title:    Vice President

Signature Page to

First Amendment to Credit Agreement

Phillips 66

UMBBANK, n.a.

By:    /s/ S. Scott Heady    

Name:    S. Scott Heady

Title:    Senior Vice President

Signature Page to

First Amendment to Credit Agreement

Phillips 66

CHANG HWA COMMERCIAL BANK, LTD.,NEW YORK BRANCH

By:    /s/ Eric Y.S. Tsai    

Name:    Eric Y.S. Tsai

Title:    Vice President & General Manager

Signature Page to

First Amendment to Credit Agreement

Phillips 66

NATIONAL BANK OF KUWAIT SAK GRAND CAYMAN BRANCH

By:    /s/ Wendy Wanninger    

Name:    Wendy Wanninger

Title:    Executive Manager

By:    /s/ Arlette Kittaneh    

Name:    Arlette Kittaneh

Title:    Executive Manager

Signature Page to

First Amendment to Credit Agreement

Phillips 66

TAIWAN COOPERATIVE BANK CO., LTD., acting through its Los Angeles Branch

By:    /s/ Li-Hua Huang    

Name:    Li-Hua Huang

Title:    VP & General Manager

Signature Page to

First Amendment to Credit Agreement

Phillips 66

BANK OF COMMUNICATIONS CO., LTD.,NEW YORK BRANCH

By:    /s/ Shelley He    

Name:    Shelley He

Title:    Deputy General Manager

Signature Page to

First Amendment to Credit Agreement

Phillips 66

ANNEX I

SCHEDULE I

COMMITMENTS

Lender	Commitment
The Royal Bank of Scotland plc		$250,000,000.00
The Bank of Tokyo-Mitsubishi UFJ, Ltd.		$250,000,000.00
Bank of America, N.A		$250,000,000.00
Citibank, N.A.		$250,000,000.00
Credit Suisse AG, Cayman Islands Branch		$250,000,000.00
DNB Bank ASA, Grand Cayman Branch		$250,000,000.00
JPMorgan Chase Bank, N.A.		$250,000,000.00
Royal Bank of Canada		$250,000,000.00
The Bank of Nova Scotia		$170,000,000.00
Barclays Bank PLC		$170,000,000.00
BNP Paribas		$170,000,000.00
Deutsche Bank AG New York Branch		$170,000,000.00
Lloyds TSB Bank plc		$170,000,000.00
Mizuho Corporate Bank, Ltd.		$170,000,000.00
PNC Bank, National Association		$170,000,000.00
Sumitomo Mitsui Banking Corporation		$170,000,000.00
Bayerische Landesbank, New York Branch		$100,000,000.00
Commerzbank AG, New York and Grand Cayman Branches		$100,000,000.00
Export Development Canada		$100,000,000.00
Morgan Stanley Bank, N.A.		$100,000,000.00
Société Générale		$100,000,000.00
U.S. Bank National Association		$100,000,000.00
UniCredit Bank AG, New York Branch		$100,000,000.00
The Bank of New York Mellon		$75,000,000.00
Compass Bank		$57,000,000.00
Abu Dhabi International Bank N.V.		$50,000,000.00
Crédit Agricole Corporate & Investment Bank		$50,000,000.00
Intesa Sanpaolo S.p.A.		$50,000,000.00
The Northern Trust Company		$50,000,000.00
Comerica Bank		$29,000,000.00
UMB Bank, n.a.		$25,000,000.00
Chang Hwa Commercial Bank, LTD., New York Branch		$14,000,000.00
National Bank of Kuwait SAK Grand Cayman Branch		$14,000,000.00
Taiwan Cooperative Bank Co., Ltd. (LA)		$14,000,000.00
Bank of Communications Co., Ltd., New York Branch		$12,000,000.00
		$4,500,000,000.00

EX-12

Exhibit 12

PHILLIPS 66 AND CONSOLIDATED SUBSIDIARIES

TOTAL ENTERPRISE

Computation of Ratio of Earnings to Fixed Charges

	Millions of Dollars
	Three Months Ended March 31		Years Ended December 31
	2014		2013		2012		2011		2010
Earnings Available for Fixed Charges
Income from continuing operations before income taxes and noncontrolling interests that have not incurred fixed charges	$	1,292	5,509		6,624		6,619		1,314
Distributions less than equity in earnings of affiliates	632		(354	)	(872	)	(951	)	(723	)
Fixed charges, excluding capitalized interest*	90		365		376		142		153
	$	2,014	5,520		6,128		5,810		744
Fixed Charges
Interest and expense on indebtedness, excluding capitalized interest	$	68	275		246		17		1
Capitalized interest	1		—		—		—		4
Interest portion of rental expense	21		83		121		116		133
	$	90	358		367		133		138
Ratio of Earnings to Fixed Charges	22.4		15.4		16.7		43.7		5.4

* Includes amortization of capitalized interest totaling approximately $2 million for the three months endedMarch 31, 2014. Amortization of capitalized interest for the years ended December 31, totaled approximately $7 million in 2013, $9 million in 2012, $9 million in 2011 and $19 million in 2010.

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Greg C. Garland, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Phillips 66;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

May 1, 2014

/s/ Greg C. Garland

Greg C. Garland

Chairman, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Greg G. Maxwell, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Phillips 66;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

May 1, 2014

/s/ Greg G. Maxwell

Greg G. Maxwell

Executive Vice President, Finance

and Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Phillips 66 (the Company) on Form 10-Q for the period ended March 31, 2014, as filed with the U.S. Securities and Exchange Commission on the date hereof (the Report), each of the undersigned hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to their knowledge:

(1) The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 1, 2014

/s/ Greg C. Garland

Greg C. Garland

Chairman, President and

Chief Executive Officer

/s/ Greg G. Maxwell

Greg G. Maxwell

Executive Vice President, Finance

and Chief Financial Officer

XML

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Hierarchy for Material Financial Instruments and Derivative Assets and Liabilities, Including the Effect of Counterparty Netting

The carrying values and fair values by hierarchy of our material financial instruments, either carried or disclosed at fair value, and derivative assets and liabilities, including any effects of master netting agreements or collateral, were:

	Millions of Dollars
	March 31, 2014
	Fair Value Hierarchy				Total Fair Value of Gross Assets & Liabilities	Effect of Counterparty Netting		Effect of Collateral Netting		Difference in Carrying Value and Fair Value		Net Carrying Value Presented on the Balance Sheet	Cash Collateral Received or Paid, Not Offset on Balance Sheet
	Level 1		Level 2	Level 3
Commodity Derivative Assets
Exchange-cleared instruments	$	203	248	—	451	(444	)	—		—		7	—
OTC instruments	—		9	—	9	(4	)	—		—		5	—
Physical forward contracts*	—		23	4	27	—		—		—		27	—
Rabbi trust assets	64		—	—	64	N/A		N/A		—		64	N/A
	$	267	280	4	551	(448	)	—		—		103
Commodity Derivative Liabilities
Exchange-cleared instruments	$	207	241	—	448	(444	)	(4	)	—		—	—
OTC instruments	—		11	—	11	(4	)	—		—		7	—
Physical forward contracts*	—		13	1	14	—		—		—		14	—
Floating-rate debt	53		—	—	53	N/A		N/A		—		53	N/A
Fixed-rate debt, excluding capital leases**	—		6,347	—	6,347	N/A		N/A		(383	)	5,964	N/A
	$	260	6,612	1	6,873	(448	)	(4	)	(383	)	6,038

* Physical forward contracts may have a larger value on the balance sheet than disclosed in the fair value hierarchy when the remaining contract term at the reporting date is greater than 12 months and the short-term portion is an asset while the long-term portion is a liability, or vice versa.

** We carry fixed-rate debt on the balance sheet at amortized cost.

	Millions of Dollars
	December 31, 2013
	Fair Value Hierarchy				Total Fair Value of Gross Assets & Liabilities	Effect of Counterparty Netting		Effect of Collateral Netting		Difference in Carrying Value and Fair Value		Net Carrying Value Presented on the Balance Sheet	Cash Collateral Received or Paid, Not Offset on Balance Sheet
	Level 1		Level 2	Level 3
Commodity Derivative Assets
Exchange-cleared instruments	$	227	332	—	559	(538	)	—		—		21	—
OTC instruments	—		10	—	10	(8	)	—		—		2	—
Physical forward contracts*	—		25	2	27	—		—		—		27	—
Rabbi trust assets	64		—	—	64	N/A		N/A		—		64	N/A
	$	291	367	2	660	(546	)	—		—		114
Commodity Derivative Liabilities
Exchange-cleared instruments	$	253	326	—	579	(538	)	(41	)	—		—	—
OTC instruments	—		11	—	11	(8	)	—		—		3	—
Physical forward contracts*	—		43	1	44	—		—		—		44	—
Floating-rate debt	50		—	—	50	N/A		N/A		—		50	N/A
Fixed-rate debt, excluding capital leases**	—		6,168	—	6,168	N/A		N/A		(262	)	5,906	N/A
	$	303	6,548	1	6,852	(546	)	(41	)	(262	)	6,003

* Physical forward contracts may have a larger value on the balance sheet than disclosed in the fair value hierarchy when the remaining contract term at the reporting date is greater than 12 months and the short-term portion is an asset while the long-term portion is a liability, or vice versa.

** We carry fixed-rate debt on the balance sheet at amortized cost.

Value of Assets by Major Category, Measured at Fair Value on Nonrecurring Basis

The following table shows the values of assets, by major category, measured at fair value on a nonrecurring basis in periods subsequent to their initial recognition during the three-month period ended March 31, 2013:

	Millions of Dollars
			Fair Value Measurements Using
	Fair Value*		Level 1 Inputs	Level 2 Inputs	Level 3 Inputs	Before- Tax Loss
March 31, 2013
Net properties, plants and equipment (held for use)	$	22	22	—	—	27

* Represents the fair value at the time of the impairment

XML

Goodwill (Narrative) (Details) (USD $)	0 Months Ended	3 Months Ended		1 Months Ended
	Jan. 02, 2013	Mar. 31, 2014 Refining [Member]	Mar. 31, 2014 Marketing and Specialties [Member]	Mar. 31, 2014 Power and Steam Generation Plant, Co-Venturerer [Member]
Business Acquisition [Line Items]
Goodwill reallocated from the Refining segment to the M&S segment		$ 52,000,000	$ (52,000,000)
Goodwill impairment recognition required after testing completed	0
Amount paid, net of acquired cash, to acquire our co-venturer's interest				70,000,000
Net PP&E provisionally recorded				141,000,000
Intangible assets provisionally recorded				40,000,000
Goodwill provisionally recorded				39,000,000
Debt provisionally recorded				$ 68,000,000

XML

Inventories (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Inventory Disclosure [Abstract]
Inventories valued on the last-in, first out (LIFO) basis	$ 5,522	$ 2,945
Estimated of excess of current replacement cost over LIFO cost of inventories	$ 8,200	$ 7,600

XML

Accumulated Other Comprehensive Income (Loss) (Summary of the Components of Accumulated Other Comprehensive Income (Loss) and Detail on Reclassifications) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended			12 Months Ended
	Mar. 31, 2014		Mar. 31, 2013	Dec. 31, 2013
Changes in accumulated other comprehensive income (loss) by component
Accumulated other comprehensive income (loss), beginning balance	$ 37		$ (314)	$ (314)
Other comprehensive income (loss) before reclassifications	32			(326)
Actuarial losses	8	[1]		18	[1]
Other Comprehensive Income (Loss), Net of Tax	40		(308)	(308)
Accumulated other comprehensive income (loss), ending balance	77		(622)	37
Defined Benefit Plans [Member]
Changes in accumulated other comprehensive income (loss) by component
Accumulated other comprehensive income (loss), beginning balance	(404)		(778)	(778)
Other comprehensive income (loss) before reclassifications	2			(8)
Actuarial losses	8	[2]		18	[2]
Other Comprehensive Income (Loss), Net of Tax	10			10
Accumulated other comprehensive income (loss), ending balance	(394)		(768)	(404)
Foreign Curency Translation [Member]
Changes in accumulated other comprehensive income (loss) by component
Accumulated other comprehensive income (loss), beginning balance	443		466	466
Other comprehensive income (loss) before reclassifications	30			(318)
Other Comprehensive Income (Loss), Net of Tax	30			(318)
Accumulated other comprehensive income (loss), ending balance	473		148	443
Hedging [Member]
Changes in accumulated other comprehensive income (loss) by component
Accumulated other comprehensive income (loss), beginning balance	(2)		(2)	(2)
Other comprehensive income (loss) before reclassifications	0			0
Other Comprehensive Income (Loss), Net of Tax	0			0
Accumulated other comprehensive income (loss), ending balance	$ (2)		$ (2)	$ (2)

[1] There were no significant reclassifications related to foreign currency translation or hedging.

[2] These accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit cost (see Note 15—Employee Benefit Plans, for additional information).

XML

Impairments (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Impairment Charges
Before-tax impairment charges	$ 1	$ 24
Refining [Member]
Impairment Charges
Before-tax impairment charges	1	0
Marketing and Specialties [Member]
Impairment Charges
Before-tax impairment charges	0	15
Corporate and Other [Member]
Impairment Charges
Before-tax impairment charges	$ 0	$ 9

XML

Condensed Consolidating Financial Information (Balance Sheet) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013	Dec. 31, 2012
Assets [Abstract]
Cash and cash equivalents	$ 5,326	$ 5,400	$ 4,753	$ 3,474
Accounts and notes receivable	9,120	9,632
Inventories	5,908	3,354
Prepaid expenses and other current assets	705	851
Total Current Assets	21,059	19,237
Investments and long-term receivables	10,001	11,220
Net properties, plants and equipment	15,751	15,398
Goodwill	3,141	3,096
Intangibles	737	698
Other assets	158	149
Total Assets	50,847	49,798
Liabilities and Equity [Abstract]
Accounts payable	12,623	11,090
Short-term debt	40	24
Accrued income and other taxes	1,591	872
Employee benefit obligations	232	476
Other accruals	678	469
Total Current Liabilities	15,164	12,931
Long-term debt	6,177	6,131
Asset retirement obligations and accrued environmental costs	697	700
Deferred income taxes	5,692	6,125
Employee benefit obligations	793	921
Other liabilities and deferred credits	495	598
Total Liabilities	29,018	27,406
Common stock	14,346	16,291
Retained earnings	6,962	5,622
Accumulated other comprehensive income (loss)	77	37	(622)	(314)
Noncontrolling interests	444	442
Total Liabilities and Equity	50,847	49,798
Phillips 66 [Member]
Assets [Abstract]
Cash and cash equivalents
Accounts and notes receivable	30	9
Inventories
Prepaid expenses and other current assets	9	10
Total Current Assets	39	19
Investments and long-term receivables	33,514	33,178
Net properties, plants and equipment
Goodwill
Intangibles
Other assets	38	40
Total Assets	33,591	33,237
Liabilities and Equity [Abstract]
Accounts payable		1
Short-term debt
Accrued income and other taxes
Employee benefit obligations
Other accruals	99	49
Total Current Liabilities	99	50
Long-term debt	5,796	5,796
Asset retirement obligations and accrued environmental costs
Deferred income taxes
Employee benefit obligations
Other liabilities and deferred credits	6,282	5,441
Total Liabilities	12,177	11,287
Common stock	14,346	16,291
Retained earnings	6,991	5,622
Accumulated other comprehensive income (loss)	77	37
Noncontrolling interests
Total Liabilities and Equity	33,591	33,237
Phillips 66 Company [Member]
Assets [Abstract]
Cash and cash equivalents	2,096	2,162	2,836	2,410
Accounts and notes receivable	2,699	2,174
Inventories	3,414	1,962
Prepaid expenses and other current assets	389	368
Total Current Assets	8,598	6,666
Investments and long-term receivables	26,043	27,417
Net properties, plants and equipment	11,976	12,031
Goodwill	3,099	3,094
Intangibles	693	694
Other assets	112	112
Total Assets	50,521	50,014
Liabilities and Equity [Abstract]
Accounts payable	7,630	7,507
Short-term debt	18	18
Accrued income and other taxes	992	250
Employee benefit obligations	207	422
Other accruals	184	178
Total Current Liabilities	9,031	8,375
Long-term debt	148	152
Asset retirement obligations and accrued environmental costs	521	527
Deferred income taxes	4,567	5,045
Employee benefit obligations	596	724
Other liabilities and deferred credits	2,198	2,155
Total Liabilities	17,061	16,978
Common stock	25,400	25,938
Retained earnings	7,983	7,061
Accumulated other comprehensive income (loss)	77	37
Noncontrolling interests
Total Liabilities and Equity	50,521	50,014
All Other Subsidiaries [Member]
Assets [Abstract]
Cash and cash equivalents	3,230	3,238	1,917	1,064
Accounts and notes receivable	7,303	8,130
Inventories	2,494	1,392
Prepaid expenses and other current assets	307	473
Total Current Assets	13,334	13,233
Investments and long-term receivables	7,997	7,135
Net properties, plants and equipment	3,775	3,367
Goodwill	42	2
Intangibles	44	4
Other assets	12	1
Total Assets	25,204	23,742
Liabilities and Equity [Abstract]
Accounts payable	5,905	4,263
Short-term debt	22	6
Accrued income and other taxes	599	622
Employee benefit obligations	25	54
Other accruals	395	242
Total Current Liabilities	6,946	5,187
Long-term debt	233	183
Asset retirement obligations and accrued environmental costs	176	173
Deferred income taxes	1,129	1,084
Employee benefit obligations	197	197
Other liabilities and deferred credits	6,458	6,691
Total Liabilities	15,139	13,515
Common stock	8,020	8,302
Retained earnings	1,249	1,163
Accumulated other comprehensive income (loss)	352	320
Noncontrolling interests	444	442
Total Liabilities and Equity	25,204	23,742
Consolidating Adjustments [Member]
Assets [Abstract]
Cash and cash equivalents
Accounts and notes receivable	(912)	(681)
Inventories
Prepaid expenses and other current assets
Total Current Assets	(912)	(681)
Investments and long-term receivables	(57,553)	(56,510)
Net properties, plants and equipment
Goodwill
Intangibles
Other assets	(4)	(4)
Total Assets	(58,469)	(57,195)
Liabilities and Equity [Abstract]
Accounts payable	(912)	(681)
Short-term debt
Accrued income and other taxes
Employee benefit obligations
Other accruals
Total Current Liabilities	(912)	(681)
Long-term debt
Asset retirement obligations and accrued environmental costs
Deferred income taxes	(4)	(4)
Employee benefit obligations
Other liabilities and deferred credits	(14,443)	(13,689)
Total Liabilities	(15,359)	(14,374)
Common stock	(33,420)	(34,240)
Retained earnings	(9,261)	(8,224)
Accumulated other comprehensive income (loss)	(429)	(357)
Noncontrolling interests
Total Liabilities and Equity	$ (58,469)	$ (57,195)

XML

Variable Interest Entities (VIEs) (Narrative) (Details) (USD $) In Millions, unless otherwise specified					3 Months Ended		3 Months Ended
	Mar. 31, 2014	Mar. 31, 2014 Merey Sweeny [Member]	Aug. 31, 2009 Merey Sweeny [Member]	Aug. 28, 2009 Merey Sweeny [Member]	Mar. 31, 2014 Merey Sweeny [Member] Guarantees of Joint Venture Debt [Member]	Apr. 30, 2012 Merey Sweeny [Member] Guarantees of Joint Venture Debt [Member]	Mar. 31, 2014 Excel Paralubes [Member]	Mar. 31, 2014 Excel Paralubes [Member] Guarantees of Joint Venture Debt [Member]	Apr. 30, 2012 Excel Paralubes [Member] Guarantees of Joint Venture Debt [Member]	Aug. 27, 2009 Conocophillips [Member]	Apr. 30, 2012 Conocophillips [Member] Excel Paralubes [Member] Guarantees of Joint Venture Debt [Member]
Variable interest entities VIEs (Textual) [Abstract]
Additional ownership interest acquired in MSLP that is in dispute			50.00%	50.00%
Debt guarantee to lender of 8.85% senior notes issued by MSLP, percentage					100.00%
Stated interest rate of debt issued by VIE, percentage					8.85%	8.85%			7.43%
Maximum exposure under debt guarantee					$ 214			$ 58
Book value of investment in VIE		116					128
Percentage of ownership interest in Excel							50.00%			50.00%
Percentage of governance interest in Excel							50.00%
Liquidity support guarantee of VIE shared with CoVenturer							60
Percentage of guarantee						100.00%	50.00%				50.00%
Outstanding principal debt balance of Excel							116
Liquidity support guarantee of Excel							30
Maximum exposure to loss	190
Fxed annual contractual payments under the consignment fuels agreement	$ 80

XML

Investments, Loans and Long-Term Receivables (Tables)

3 Months Ended

Mar. 31, 2014

Equity Method Investments and Joint Ventures [Abstract]

Summary of Financial Information

Summarized 100 percent financial information for WRB Refining LP (WRB) and Chevron Phillips Chemical Company LLC (CPChem) were as follows:

	Millions of Dollars
	Three Months Ended March 31
	2014		2013
Revenues	$	7,998	8,140
Income before income taxes	1,124		1,768
Net income	1,101		1,750

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Condensed Consolidating Financial Information (Condensed Statement of Cash Flows) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Condensed Financial Statements, Captions [Line Items]
Net Cash Provided by (Used In) Operating Activities	$ 1,396	$ 2,191
Net cash provided by discontinued operations	2	22
Net Cash Provided by (Used in) Operating Activities	1,398	2,213
Capital expenditures and investments	(572)	(382)
Proceeds from asset dispositions	507	9
Collection of advances/loans—related parties	0	0
ProceedsFromPaymentsForLongTermAndShortTermLoansForRelatedParties		55
Payments for (Proceeds from) Other Investing Activities	13	0
Net cash used in continuing investing activities	(52)	(318)
Net cash used in discontinued operations	(34)	(5)
Net Cash Provided by (Used in) Investing Activities	(86)	(323)
Repayment of debt	(8)	(3)
Issuance of common stock	(20)	(6)
Repurchase of common stock	(640)	(382)
Share exchange—PSPI transaction	(450)
Dividends paid on common stock	(229)	(194)
Distributions to noncontrolling interests	(4)	0
Other	(4)	0
Net Cash Provided by (Used in) Financing Activities	(1,355)	(585)
Net cash provided by (used in) discontinued operations	0	0
Net Cash Provided by (Used in) Financing Activities	(1,355)	(585)
Effect of Exchange Rate on Cash and Cash Equivalents	(31)	(26)
Net Change in Cash and Cash Equivalents	(74)	1,279
Cash and cash equivalents at beginning of period	5,400	3,474
Cash and Cash Equivalents at End of Period	5,326	4,753
Phillips 66 [Member]
Condensed Financial Statements, Captions [Line Items]
Net Cash Provided by (Used In) Operating Activities	52	70
Net cash provided by discontinued operations	0	0
Net Cash Provided by (Used in) Operating Activities	52	70
Capital expenditures and investments
Proceeds from asset dispositions
Collection of advances/loans—related parties	1,291	515
ProceedsFromPaymentsForLongTermAndShortTermLoansForRelatedParties		0
Payments for (Proceeds from) Other Investing Activities	0
Net cash used in continuing investing activities	1,291	515
Net cash used in discontinued operations		0
Net Cash Provided by (Used in) Investing Activities	1,291	515
Repayment of debt	0
Issuance of common stock	(20)	(6)
Repurchase of common stock	(640)	(382)
Share exchange—PSPI transaction	(450)
Dividends paid on common stock	(229)	(194)
Other	(4)	(3)
Net Cash Provided by (Used in) Financing Activities	(1,343)	(585)
Net cash provided by (used in) discontinued operations	0	0
Net Cash Provided by (Used in) Financing Activities	(1,343)	(585)
Effect of Exchange Rate on Cash and Cash Equivalents
Net Change in Cash and Cash Equivalents
Cash and cash equivalents at beginning of period
Cash and Cash Equivalents at End of Period
Phillips 66 Company [Member]
Condensed Financial Statements, Captions [Line Items]
Net Cash Provided by (Used In) Operating Activities	11	1,335
Net cash provided by discontinued operations	0	0
Net Cash Provided by (Used in) Operating Activities	11	1,335
Capital expenditures and investments	(841)	(186)
Proceeds from asset dispositions	871	0
Collection of advances/loans—related parties	(66)	(723)
ProceedsFromPaymentsForLongTermAndShortTermLoansForRelatedParties		0
Payments for (Proceeds from) Other Investing Activities	(38)
Net cash used in continuing investing activities	(74)	(909)
Net cash used in discontinued operations		0
Net Cash Provided by (Used in) Investing Activities	(74)	(909)
Repayment of debt	(3)	(3)
Issuance of common stock
Repurchase of common stock
Dividends paid on common stock
Other	0	3
Net Cash Provided by (Used in) Financing Activities	(3)	0
Net cash provided by (used in) discontinued operations	0	0
Net Cash Provided by (Used in) Financing Activities	(3)	0
Effect of Exchange Rate on Cash and Cash Equivalents
Net Change in Cash and Cash Equivalents	(66)	426
Cash and cash equivalents at beginning of period	2,162	2,410
Cash and Cash Equivalents at End of Period	2,096	2,836
All Other Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Net Cash Provided by (Used In) Operating Activities	1,438	786
Net cash provided by discontinued operations	2	22
Net Cash Provided by (Used in) Operating Activities	1,440	808
Capital expenditures and investments	(449)	(216)
Proceeds from asset dispositions	36	9
Collection of advances/loans—related parties	(1,225)	208
ProceedsFromPaymentsForLongTermAndShortTermLoansForRelatedParties		55
Payments for (Proceeds from) Other Investing Activities	51
Net cash used in continuing investing activities	(1,587)	56
Net cash used in discontinued operations	(34)	(5)
Net Cash Provided by (Used in) Investing Activities	(1,621)	51
Repayment of debt	(5)	0
Issuance of common stock
Repurchase of common stock
Dividends paid on common stock	(93)
Distributions to noncontrolling interests	(4)
Other	580	20
Net Cash Provided by (Used in) Financing Activities	204	20
Net cash provided by (used in) discontinued operations	0	0
Net Cash Provided by (Used in) Financing Activities	204	20
Effect of Exchange Rate on Cash and Cash Equivalents	(31)	(26)
Net Change in Cash and Cash Equivalents	(8)	853
Cash and cash equivalents at beginning of period	3,238	1,064
Cash and Cash Equivalents at End of Period	3,230	1,917
Consolidating Adjustments [Member]
Condensed Financial Statements, Captions [Line Items]
Net Cash Provided by (Used In) Operating Activities	(105)	0
Net cash provided by discontinued operations	0	0
Net Cash Provided by (Used in) Operating Activities	(105)	0
Capital expenditures and investments	718	20
Proceeds from asset dispositions	(400)
Collection of advances/loans—related parties	0	0
ProceedsFromPaymentsForLongTermAndShortTermLoansForRelatedParties		0
Payments for (Proceeds from) Other Investing Activities	0
Net cash used in continuing investing activities	318	20
Net cash used in discontinued operations		0
Net Cash Provided by (Used in) Investing Activities	318	20
Repayment of debt
Issuance of common stock
Repurchase of common stock
Dividends paid on common stock	93
Partners' Capital Account, Distributions	(274)
Distributions to noncontrolling interests
Other	(580)	(20)
Net Cash Provided by (Used in) Financing Activities	(213)	(20)
Net cash provided by (used in) discontinued operations	0	0
Net Cash Provided by (Used in) Financing Activities	(213)	(20)
Effect of Exchange Rate on Cash and Cash Equivalents
Net Change in Cash and Cash Equivalents
Cash and cash equivalents at beginning of period
Cash and Cash Equivalents at End of Period
Consolidating Adjustments [Member] | All Other Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Partners' Capital Account, Distributions	$ (274)

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Related Party Transactions (Summary of Significant Related Party Transactions) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Significant transactions with related parties
Operating revenues and other income	$ 2,067	[1]	$ 1,749	[1]
Purchases	3,991	[2]	4,287	[2]
Operating expenses and selling, general and administrative expenses	35	[3]	24	[3]
Interest expense	$ 2	[4]	$ 2	[4]

[1] We sold crude oil to the Malaysian Refining Company Sdn. Bdh. (MRC). NGL and other petrochemical feedstocks, along with solvents, were sold to CPChem, and gas oil and hydrogen feedstocks were sold to Excel. Certain feedstocks and intermediate products were sold to WRB. We also acted as agent for WRB in supplying other crude oil and feedstocks, wherein the transactional amounts did not impact operating revenues. In addition, we charged several of our affiliates, including CPChem and MSLP, for the use of common facilities, such as steam generators, waste and water treaters, and warehouse facilities.

[2] We purchased refined products from WRB. We also acted as agent for WRB in distributing asphalt and solvents, wherein the transactional amounts did not impact purchases. We purchased natural gas and NGL from DCP Midstream, LLC (DCP Midstream) and CPChem for use in our refinery processes and other feedstocks from various affiliates. We purchased refined products from MRC. We also paid fees to various pipeline equity companies for transporting finished refined products. In addition, we paid a price upgrade to MSLP for heavy crude processing. We purchased base oils and fuel products from Excel for use in our refining and specialty businesses.

[3] We paid utility and processing fees to various affiliates.

[4] We incurred interest expense on a note payable to MSLP.

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Earnings per Share (Summary of Earnings Per Share Calculation) (Details) (USD $) In Millions, except Share data in Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Basic EPS Calculation
Income from continuing operations attributable to Phillips 66	$ 866	$ 1,392
Income allocated to participating securities	(1)	(1)
Income from continuing operations available to common stockholders	865	1,391
Discontinued operations	706	15
Income available to common stockholders - basic	1,571	1,406
Weighted-average common shares stockholders	580,027	621,309
Effect of stock-based compensation	4,026	3,721
Weighted-average commons shares outstanding - EPS	584,053	625,030
Income from continuing operations attributable to Phillips 66	$ 1.48	$ 2.23
Discontinued operations	$ 1.21	$ 0.02
Earnings Per Share	$ 2.69	$ 2.25
Diluted EPS Calculation
Income from continuing operations available to common stockholders	866	1,392
Income available to common stockholders	$ 1,572	$ 1,407
Dilutive effect of stock-based compensation	5,522	6,258
Weighted-average commons shares outstanding - EPS	589,575	631,288
Income from continuing operations attributable to Phillips 66	$ 1.47	$ 2.21
Discontinued operations	$ 1.20	$ 0.02
Earnings Per Share	$ 2.67	$ 2.23

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Income Taxes (Narrative) (Details)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Income Taxes (Textual) [Abstract]
Effective tax rate, percent	33.00%	32.00%

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Phillips 66 Partners LP (Narrative) (Details) (USD $) In Millions, except Share data, unless otherwise specified				1 Months Ended			1 Months Ended	2 Months Ended	1 Months Ended
	Mar. 31, 2014	Mar. 01, 2014 sphere	Dec. 31, 2013	Jul. 27, 2013 Phillips 66 Partners LP [Member]	Jul. 27, 2013 Phillips 66 Partners LP [Member]	Mar. 31, 2014 Noncontrolling Interest [Member] Phillips 66 Partners LP [Member]	Mar. 31, 2014 Phillips 66 Partners LP [Member]	Mar. 01, 2014 Phillips 66 Partners LP [Member]	Mar. 31, 2014 Common Units [Member] Phillips 66 Partners LP [Member]	Mar. 31, 2014 General Partner Units [Member]
Subsidiary or Equity Method Investee [Line Items]
Total consideration for contributed assets								$ 700
Cash received								400
Units received									3,530,595	72,053
Notes receivable received							160
Number of storage spheres		2
Limited partnership interest in Phillips 66 Partners, percentage				73.00%
General partnership interest in Phillips 66 Partners, percentage				2.00%
Limited partner interest in Phillips 66 Partners owned by public, percentage					25.00%
Public's ownership interest in Phillips 66 Partners reflected as a noncontrolling interest	$ 444		$ 442			$ 409

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Condensed Consolidating Financial Information (Income Statement) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Revenues and Other Income
Sales and other operating revenues	$ 40,283	[1]	$ 41,211	[1]
Equity in earnings of affiliates	778		1,039
Net gain on dispositions	7		1
Other income	31		23
Total Revenues and Other Income	41,099		42,274
Cost And Expenses
Purchased crude oil and products	34,381		35,243
Operating expenses	1,090		978
Selling, general and administrative expenses	402		327
Depreciation and amortization	234		242
Impairments	1		24
Taxes other than income taxes	3,638	[1]	3,324	[1]
Accretion on discounted liabilities	6		6
Interest and debt expense	68		70
Foreign currency transaction (gains) losses	(19)		2
Total Costs and Expenses	39,801		40,216
Income from continuing operations before income taxes	1,298		2,058
Provision for income taxes	426		663
Income From Continuing Operations	872		1,395
Income from discontinued operations	706	[2]	15	[2]
Net income	1,578		1,410
Less: net income attributable to noncontrolling interests	6		3
Net Income Attributable to Phillips 66	1,572		1,407
Comprehensive Income	1,618		1,102
Phillips 66 [Member]
Revenues and Other Income
Equity in earnings of affiliates	922		1,452
Net gain on dispositions
Other income
Total Revenues and Other Income	922		1,452
Cost And Expenses
Purchased crude oil and products
Operating expenses	2
Selling, general and administrative expenses	3		2
Depreciation and amortization
Impairments
Taxes other than income taxes
Accretion on discounted liabilities
Interest and debt expense	66		67
Foreign currency transaction (gains) losses
Total Costs and Expenses	71		69
Income from continuing operations before income taxes	851		1,383
Provision for income taxes	(25)		(24)
Income From Continuing Operations	876		1,407
Income from discontinued operations	696		0
Net income	1,572		1,407
Less: net income attributable to noncontrolling interests
Net Income Attributable to Phillips 66	1,572		1,407
Comprehensive Income	1,612		1,100
Phillips 66 Company [Member]
Revenues and Other Income
Equity in earnings of affiliates	846		1,139
Net gain on dispositions			1
Other income	22		15
Total Revenues and Other Income	28,385		29,282
Cost And Expenses
Purchased crude oil and products	24,384		24,752
Operating expenses	903		799
Selling, general and administrative expenses	286		206
Depreciation and amortization	180		183
Impairments	1		(3)
Taxes other than income taxes	1,301		1,209
Accretion on discounted liabilities	5		5
Interest and debt expense	4		3
Foreign currency transaction (gains) losses			(1)
Total Costs and Expenses	27,064		27,155
Income from continuing operations before income taxes	1,321		2,127
Provision for income taxes	399		675
Income From Continuing Operations	922		1,452
Income from discontinued operations			0
Net income	922		1,452
Less: net income attributable to noncontrolling interests
Net Income Attributable to Phillips 66	922		1,452
Comprehensive Income	962		1,145
All Other Subsidiaries [Member]
Revenues and Other Income
Equity in earnings of affiliates	178		158
Net gain on dispositions	7
Other income	9		8
Total Revenues and Other Income	17,939		18,573
Cost And Expenses
Purchased crude oil and products	14,938		15,780
Operating expenses	191		186
Selling, general and administrative expenses	138		142
Depreciation and amortization	54		59
Impairments			27
Taxes other than income taxes	2,337		2,115
Accretion on discounted liabilities	1		1
Interest and debt expense	5		4
Foreign currency transaction (gains) losses	19		(1)
Total Costs and Expenses	17,645		18,315
Income from continuing operations before income taxes	294		258
Provision for income taxes	52		12
Income From Continuing Operations	242		246
Income from discontinued operations	10		15
Net income	252		261
Less: net income attributable to noncontrolling interests	6		3
Net Income Attributable to Phillips 66	246		258
Comprehensive Income	284		(54)
Reportable Legal Entities [Member] | Phillips 66 [Member]
Revenues and Other Income
Sales and other operating revenues
Reportable Legal Entities [Member] | Phillips 66 Company [Member]
Revenues and Other Income
Sales and other operating revenues	27,239		27,637
Reportable Legal Entities [Member] | All Other Subsidiaries [Member]
Revenues and Other Income
Sales and other operating revenues	13,044		13,574
Consolidating Adjustments [Member]
Revenues and Other Income
Sales and other operating revenues	(4,979)		(5,323)
Equity in earnings of affiliates	(1,168)		(1,710)
Net gain on dispositions
Other income
Total Revenues and Other Income	(6,147)		(7,033)
Cost And Expenses
Purchased crude oil and products	(4,941)		(5,289)
Operating expenses	(6)		(7)
Selling, general and administrative expenses	(25)		(23)
Depreciation and amortization
Impairments
Taxes other than income taxes
Accretion on discounted liabilities
Interest and debt expense	(7)		(4)
Foreign currency transaction (gains) losses
Total Costs and Expenses	(4,979)		(5,323)
Income from continuing operations before income taxes	(1,168)		(1,710)
Provision for income taxes
Income From Continuing Operations	(1,168)		(1,710)
Income from discontinued operations			0
Net income	(1,168)		(1,710)
Less: net income attributable to noncontrolling interests
Net Income Attributable to Phillips 66	(1,168)		(1,710)
Comprehensive Income	(1,240)		(1,089)
Consolidating Adjustments [Member] | Phillips 66 [Member]
Revenues and Other Income
Sales and other operating revenues
Consolidating Adjustments [Member] | Phillips 66 Company [Member]
Revenues and Other Income
Sales and other operating revenues	(278)		(490)
Consolidating Adjustments [Member] | All Other Subsidiaries [Member]
Revenues and Other Income
Sales and other operating revenues	$ (4,701)		$ (4,833)

[1] Includes excise taxes on petroleum products sales: $3,522 million, $3,258 million

[2] Net of provision for income taxes on discontinued operations: $5 million, $8 million

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Cash Flow Information (Summary of Cash Flow Information) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Supplemental Cash Flow Information [Abstract]
Interest	$ 12	$ 15
Income taxes	$ 26	$ 83

XML

Cash Flow Information

3 Months Ended

Mar. 31, 2014

Supplemental Cash Flow Information [Abstract]

Cash Flow Information

Cash Flow Information

	Millions of Dollars
	Three Months Ended
	March 31
	2014		2013
Cash Payments
Interest	$	12	15
Income taxes	26		83

Noncash Investing and Financing Activities

As discussed more fully in Note 4—Assets Held for Sale or Sold, on February 25, 2014, we completed the exchange of our flow improvers business for shares of Phillips 66 common stock owned by the other party to the transaction. The noncash portion of the net assets surrendered by us in the exchange was $204 million, and we received approximately 17.4 million shares of our common stock, with a fair value at the time of the exchange of $1.35 billion.

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Investments, Loans and Long-Term Receivables (Summary of Financial Information for Equity Method Investments) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Summary of financial information
Revenues	$ 7,998	$ 8,140
Income before income taxes	1,124	1,768
Net income	$ 1,101	$ 1,750

XML

Cash Flow Information (Tables)

3 Months Ended

Mar. 31, 2014

Supplemental Cash Flow Information [Abstract]

Cash Flow Information

	Millions of Dollars
	Three Months Ended
	March 31
	2014		2013
Cash Payments
Interest	$	12	15
Income taxes	26		83

Noncash Investing and Financing Activities

As discussed more fully in Note 4—Assets Held for Sale or Sold, on February 25, 2014, we completed the exchange of our flow improvers business for shares of Phillips 66 common stock owned by the other party to the transaction. The noncash portion of the net assets surrendered by us in the exchange was $204 million, and we received approximately 17.4 million shares of our common stock, with a fair value at the time of the exchange of $1.35 billion.

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Segment Disclosures and Related Information (Narrative) (Details)	3 Months Ended
	Mar. 31, 2014
Segment Disclosures And Related Information (Textual) [Abstract]
Number of refineries in Refining segment	15
DCP Midstream [Member]
Segment Disclosures And Related Information (Textual) [Abstract]
Percentage of ownership interest	50.00%
CP Chem [Member]
Segment Disclosures And Related Information (Textual) [Abstract]
Percentage of ownership interest	50.00%
Excel and Jupiter Sulphur, LLC [Member]
Segment Disclosures And Related Information (Textual) [Abstract]
Number of equity investments moved from Refining segment to M&S segment	2

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Earnings per Share (Tables)

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Reconciliation of Basic and Diluted Earnings Per Share

	Three Months Ended March 31
	2014				2013
	Basic			Diluted	Basic		Diluted
Amounts attributed to Phillips 66 Common Stockholders (millions):
Income from continuing operations attributable to Phillips 66	$	866		866	1,392		1,392
Income allocated to participating securities	(1		)	—	(1	)	—
Income from continuing operations available to common stockholders	865			866	1,391		1,392
Discontinued operations	706			706	15		15
Net Income available to common stockholders	$	1,571		1,572	1,406		1,407
Weighted-average common shares outstanding (thousands):	580,027			584,053	621,309		625,030
Effect of stock-based compensation	4,026			5,522	3,721		6,258
Weighted-average common shares outstanding—EPS	584,053			589,575	625,030		631,288
Earnings Per Share of Common Stock (dollars):
Income from continuing operations attributable to Phillips 66	$	1.48		1.47	2.23		2.21
Discontinued operations	1.21			1.20	0.02		0.02
Earnings Per Share	$	2.69		2.67	2.25		2.23

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Properties, Plants and Equipment (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Properties, plants and equipment with the associated accumulated depreciation and amortization
Gross PP&E	$ 24,978	$ 24,426
Accum D&A	9,227	9,028
Net PP&E	15,751	15,398
Midstream [Member]
Properties, plants and equipment with the associated accumulated depreciation and amortization
Gross PP&E	3,092	2,865
Accum D&A	1,122	1,104
Net PP&E	1,970	1,761
Chemicals [Member]
Properties, plants and equipment with the associated accumulated depreciation and amortization
Gross PP&E
Accum D&A
Net PP&E
Refining [Member]
Properties, plants and equipment with the associated accumulated depreciation and amortization
Gross PP&E	19,372	19,191
Accum D&A	6,874	6,718
Net PP&E	12,498	12,473
Marketing and Specialties [Member]
Properties, plants and equipment with the associated accumulated depreciation and amortization
Gross PP&E	1,525	1,395
Accum D&A	753	749
Net PP&E	772	646
Corporate and Other [Member]
Properties, plants and equipment with the associated accumulated depreciation and amortization
Gross PP&E	989	975
Accum D&A	478	457
Net PP&E	511	518
Discontinued Operations [Member]
Properties, plants and equipment with the associated accumulated depreciation and amortization
Gross PP&E		0	[1]
Accum D&A		0	[1]
Net PP&E		0	[1]
Current Assets [Member]
Properties, plants and equipment with the associated accumulated depreciation and amortization
Net PP&E associated with discontinued operations classified as current assets		$ 58

[1] At December 31, 2013, net PP&E of $58 million associated with discontinued operations was classified as current assets.

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Fair Value Measurements (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended			3 Months Ended		3 Months Ended			3 Months Ended
	Mar. 31, 2013	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2014 M&S Segment [Member]	Dec. 31, 2013 M&S Segment [Member]	Mar. 31, 2013 M&S Segment [Member] Composite Graphite Business [Member]	Mar. 31, 2014 Corporate and Other [Member]	Dec. 31, 2013 Corporate and Other [Member]	Mar. 31, 2013 Corporate Property [Member] Corporate and Other [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying amount of net PP&E held for use		$ 15,751	$ 15,398	$ 772	$ 646	$ 18	$ 511	$ 518	$ 31
Before-tax loss on net properties, plants and equipment (held for use)	27			15		18			9
Fair value of net PP&E held for use									$ 22

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Derivatives and Financial Instruments (Summary of Commodity Derivative Assets and Liabilities) (Details) (Commodity Derivatives [Member], USD $) In Millions, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Other Current Assets [Member]
Fair value of commodity derivative assets and liabilities, without netting
Commodity derivative assets, fair value gross	$ 0	[1]
Accounts and notes receivable [Member]
Fair value of commodity derivative assets and liabilities, without netting
Commodity derivative assets, fair value gross			2	[1]
Prepaid Expenses and Other Current Assets [Member]
Fair value of commodity derivative assets and liabilities, without netting
Commodity derivative assets, fair value gross	486	[1]	592	[1]
Other Assets [Member]
Fair value of commodity derivative assets and liabilities, without netting
Commodity derivative assets, fair value gross	1	[1]	2	[1]
Other Accruals [Member]
Fair value of commodity derivative assets and liabilities, without netting
Commodity derivative liabilities, fair value gross	472	[1]	633	[1]
Other Liabilities and Deferred Credits [Member]
Fair value of commodity derivative assets and liabilities, without netting
Commodity derivative liabilities, fair value gross	$ 1	[1]	$ 1	[1]

[1] Hedge accounting has not been used for any item in the table.

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Inventories (Summary of Inventory) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Summary of inventories
Crude oil and petroleum products	$ 5,642	$ 3,093
Materials and supplies	266	261
Inventories	$ 5,908	$ 3,354

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Interim Financial Information

3 Months Ended

Mar. 31, 2014

Additional Basis Of Presentation Disclosure [Abstract]

Interim Financial Information

Interim Financial Information

The interim financial information presented in the financial statements included in this report is unaudited and includes all known accruals and adjustments necessary, in the opinion of management, for a fair presentation of the consolidated financial position of Phillips 66 and its results of operations and cash flows for the periods presented. Unless otherwise specified, all such adjustments are of a normal and recurring nature. Certain notes and other information have been condensed or omitted from the interim financial statements included in this report. Therefore, these interim financial statements should be read in conjunction with the consolidated financial statements and notes included in our 2013 Annual Report on Form 10-K. The results of operations for the three months ended March 31, 2014, are not necessarily indicative of the results to be expected for the full year.

Certain prior period financial information has been recast to reflect the change in the composition of our operating segments. See Note 19—Segment Disclosures and Related Information for additional information.

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Derivatives and Financial Instruments (Summary of Gains/(Losses) From Commodity Derivatives) (Details) (Commodity Derivatives [Member], USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Sales and Other Operating Revenues [Member]
Summary of gains (losses) from commodity derivatives
Gains (losses) from commodity derivatives	$ 57	[1]	$ (6)
Equity in Earnings of Affiliates [Member]
Summary of gains (losses) from commodity derivatives
Gains (losses) from commodity derivatives	0	[1]	2
Other Income [Member]
Summary of gains (losses) from commodity derivatives
Gains (losses) from commodity derivatives	14	[1]	3
Purchased Crude Oil and Products [Member]
Summary of gains (losses) from commodity derivatives
Gains (losses) from commodity derivatives	$ 2	[1]	$ 89

[1] Hedge accounting has not been used for any item in the table.

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Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2014

Related Party Transactions [Abstract]

Significant Transactions with Related Parties

Significant transactions with related parties were:

	Millions of Dollars
	Three Months Ended March 31
	2014		2013
Operating revenues and other income (a)	$	2,067	1,749
Purchases (b)	3,991		4,287
Operating expenses and selling, general and administrative expenses (c)	35		24
Interest expense (d)	2		2

(a) We sold crude oil to the Malaysian Refining Company Sdn. Bdh. (MRC). NGL and other petrochemical feedstocks, along with solvents, were sold to CPChem, and gas oil and hydrogen feedstocks were sold to Excel. Certain feedstocks and intermediate products were sold to WRB. We also acted as agent for WRB in supplying other crude oil and feedstocks, wherein the transactional amounts did not impact operating revenues. In addition, we charged several of our affiliates, including CPChem and MSLP, for the use of common facilities, such as steam generators, waste and water treaters, and warehouse facilities.

(b) We purchased refined products from WRB. We also acted as agent for WRB in distributing asphalt and solvents, wherein the transactional amounts did not impact purchases. We purchased natural gas and NGL from DCP Midstream, LLC (DCP Midstream) and CPChem for use in our refinery processes and other feedstocks from various affiliates. We purchased refined products from MRC. We also paid fees to various pipeline equity companies for transporting finished refined products. In addition, we paid a price upgrade to MSLP for heavy crude processing. We purchased base oils and fuel products from Excel for use in our refining and specialty businesses.

(c) We paid utility and processing fees to various affiliates.

(d) We incurred interest expense on a note payable to MSLP.

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New Accounting Standards

3 Months Ended

Mar. 31, 2014

New Accounting Standards [Abstract]

New Accounting Standards

New Accounting Standards

In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-08, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” This ASU amends the definition of discontinued operations so that only disposals of components of an entity representing major strategic shifts that have a major effect on an entity’s operations and financial results will qualify for discontinued operations reporting. The ASU also requires additional disclosures about discontinued operations and individually material disposals that do not meet the definition of a discontinued operation. ASU 2014-08 is effective January 1, 2015, and earlier application is permitted, but only for disposals not previously reported in the financial statements. We are currently evaluating the provisions of ASU 2014-08 and assessing the impact, if any, it may have on our financial position and results of operations. Our initial assessment is that this ASU will result in fewer dispositions qualifying for discontinued operations reporting.

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Income Taxes

3 Months Ended

Mar. 31, 2014

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our effective tax rate for the first three months of 2014 was 33 percent, compared with 32 percent for the corresponding period of 2013. The effective tax rate varies from the federal statutory tax rate of 35 percent primarily as a result of state tax expense, offset by the manufacturing deduction and foreign operations.

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Impairments (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2014 Marketing and Specialties [Member]
Impaired Long-Lived Assets Held and Used [Line Items]
Held-for-use impairment	$ 27	$ 15

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Segment Disclosures and Related Information (Tables)

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Analysis of Results by Operating Segment

Analysis of Results by Operating Segment

	Millions of Dollars
	Three Months Ended March 31
	2014			2013
Sales and Other Operating Revenues
Midstream
Total sales	$	2,155		1,628
Intersegment eliminations	(292		)	(232	)
Total Midstream	1,863			1,396
Chemicals	2			2
Refining
Total sales	29,215			29,762
Intersegment eliminations	(17,558		)	(17,857	)
Total Refining	11,657			11,905
Marketing and Specialties
Total sales	27,046			28,180
Intersegment eliminations	(292		)	(278	)
Total Marketing and Specialties	26,754			27,902
Corporate and Other	7			6
Consolidated sales and other operating revenues	$	40,283		41,211
Net Income (Loss) Attributable to Phillips 66
Midstream	$	188		111
Chemicals	316			282
Refining	306			904
Marketing and Specialties	137			190
Corporate and Other	(81		)	(95	)
Discontinued operations	706			15
Consolidated net income attributable to Phillips 66	$	1,572		1,407

	Millions of Dollars
	March 31 2014		December 31 2013
Total Assets
Midstream	$	5,379	5,485
Chemicals	4,689		4,377
Refining	27,262		26,046
Marketing and Specialties	7,335		7,331
Corporate and Other	6,182		6,348
Discontinued operations	—		211
Consolidated total assets	$	50,847	49,798

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Condensed Consolidating Financial Information

3 Months Ended

Mar. 31, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Financial Information

Our $5.8 billion of Senior Notes were issued by Phillips 66, and 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.

Effective with fiscal year 2013, we revised the cash flow presentation of inter-column transactions associated with the company’s centralized cash management program and intercompany loans, from operating cash flows to investing cash flows, in a new line item labeled “Intercompany lending activities.” All periods have been revised to conform to this presentation.

	Millions of Dollars
	Three Months Ended March 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	$	—		27,239	13,044		—		40,283
Equity in earnings of affiliates	922			846	178		(1,168	)	778
Net gain on dispositions	—			—	7		—		7
Other income	—			22	9		—		31
Intercompany revenues	—			278	4,701		(4,979	)	—
Total Revenues and Other Income	922			28,385	17,939		(6,147	)	41,099
Costs and Expenses
Purchased crude oil and products	—			24,384	14,938		(4,941	)	34,381
Operating expenses	2			903	191		(6	)	1,090
Selling, general and administrative expenses	3			286	138		(25	)	402
Depreciation and amortization	—			180	54		—		234
Impairments	—			1	—		—		1
Taxes other than income taxes	—			1,301	2,337		—		3,638
Accretion on discounted liabilities	—			5	1		—		6
Interest and debt expense	66			4	5		(7	)	68
Foreign currency transaction gains	—			—	(19	)	—		(19	)
Total Costs and Expenses	71			27,064	17,645		(4,979	)	39,801
Income from continuing operations before income taxes	851			1,321	294		(1,168	)	1,298
Provision (benefit) for income taxes	(25		)	399	52		—		426
Income from Continuing Operations	876			922	242		(1,168	)	872
Income from discontinued operations*	696			—	10		—		706
Net income	1,572			922	252		(1,168	)	1,578
Less: net income attributable to noncontrolling interests	—			—	6		—		6
Net Income Attributable to Phillips 66	$	1,572		922	246		(1,168	)	1,572
Comprehensive Income	$	1,612		962	284		(1,240	)	1,618
* Net of provision for income taxes on discontinued operations	$	—		—	5		—		5

	Millions of Dollars
	Three Months Ended March 31, 2013
Statement of Income	Phillips 66			Phillips 66 Company		All Other Subsidiaries		Consolidating Adjustments		Total Consolidated
Revenues and Other Income
Sales and other operating revenues	$	—		27,637		13,574		—		41,211
Equity in earnings of affiliates	1,452			1,139		158		(1,710	)	1,039
Net gain on dispositions	—			1		—		—		1
Other income	—			15		8		—		23
Intercompany revenues	—			490		4,833		(5,323	)	—
Total Revenues and Other Income	1,452			29,282		18,573		(7,033	)	42,274
Costs and Expenses
Purchased crude oil and products	—			24,752		15,780		(5,289	)	35,243
Operating expenses	—			799		186		(7	)	978
Selling, general and administrative expenses	2			206		142		(23	)	327
Depreciation and amortization	—			183		59		—		242
Impairments	—			(3	)	27		—		24
Taxes other than income taxes	—			1,209		2,115		—		3,324
Accretion on discounted liabilities	—			5		1		—		6
Interest and debt expense	67			3		4		(4	)	70
Foreign currency transaction losses	—			1		1		—		2
Total Costs and Expenses	69			27,155		18,315		(5,323	)	40,216
Income from continuing operations before income taxes	1,383			2,127		258		(1,710	)	2,058
Provision (benefit) for income taxes	(24		)	675		12		—		663
Income from Continuing Operations	1,407			1,452		246		(1,710	)	1,395
Income from discontinued operations*	—			—		15		—		15
Net income	1,407			1,452		261		(1,710	)	1,410
Less: net income attributable to noncontrolling interests	—			—		3		—		3
Net Income Attributable to Phillips 66	$	1,407		1,452		258		(1,710	)	1,407
Comprehensive Income	$	1,100		1,145		(54	)	(1,089	)	1,102
* Net of provision for income taxes on discontinued operations:	$	—		—		8		—		8

	Millions of Dollars
	At March 31, 2014
Balance Sheet	Phillips 66		Phillips 66 Company	All Other Subsidiaries	Consolidating Adjustments		Total Consolidated
Assets
Cash and cash equivalents	$	—	2,096	3,230	—		5,326
Accounts and notes receivable	30		2,699	7,303	(912	)	9,120
Inventories	—		3,414	2,494	—		5,908
Prepaid expenses and other current assets	9		389	307	—		705
Total Current Assets	39		8,598	13,334	(912	)	21,059
Investments and long-term receivables	33,514		26,043	7,997	(57,553	)	10,001
Net properties, plants and equipment	—		11,976	3,775	—		15,751
Goodwill	—		3,099	42	—		3,141
Intangibles	—		693	44	—		737
Other assets	38		112	12	(4	)	158
Total Assets	$	33,591	50,521	25,204	(58,469	)	50,847
Liabilities and Equity
Accounts payable	$	—	7,630	5,905	(912	)	12,623
Short-term debt	—		18	22	—		40
Accrued income and other taxes	—		992	599	—		1,591
Employee benefit obligations	—		207	25	—		232
Other accruals	99		184	395	—		678
Total Current Liabilities	99		9,031	6,946	(912	)	15,164
Long-term debt	5,796		148	233	—		6,177
Asset retirement obligations and accrued environmental costs	—		521	176	—		697
Deferred income taxes	—		4,567	1,129	(4	)	5,692
Employee benefit obligations	—		596	197	—		793
Other liabilities and deferred credits	6,282		2,198	6,458	(14,443	)	495
Total Liabilities	12,177		17,061	15,139	(15,359	)	29,018
Common stock	14,346		25,400	8,020	(33,420	)	14,346
Retained earnings	6,991		7,983	1,249	(9,261	)	6,962
Accumulated other comprehensive income	77		77	352	(429	)	77
Noncontrolling interests	—		—	444	—		444
Total Liabilities and Equity	$	33,591	50,521	25,204	(58,469	)	50,847

	Millions of Dollars
	At December 31, 2013
Balance Sheet	Phillips 66		Phillips 66 Company	All Other Subsidiaries	Consolidating Adjustments		Total Consolidated
Assets
Cash and cash equivalents	$	—	2,162	3,238	—		5,400
Accounts and notes receivable	9		2,174	8,130	(681	)	9,632
Inventories	—		1,962	1,392	—		3,354
Prepaid expenses and other current assets	10		368	473	—		851
Total Current Assets	19		6,666	13,233	(681	)	19,237
Investments and long-term receivables	33,178		27,417	7,135	(56,510	)	11,220
Net properties, plants and equipment	—		12,031	3,367	—		15,398
Goodwill	—		3,094	2	—		3,096
Intangibles	—		694	4	—		698
Other assets	40		112	1	(4	)	149
Total Assets	$	33,237	50,014	23,742	(57,195	)	49,798
Liabilities and Equity
Accounts payable	$	1	7,507	4,263	(681	)	11,090
Short-term debt	—		18	6	—		24
Accrued income and other taxes	—		250	622	—		872
Employee benefit obligations	—		422	54	—		476
Other accruals	49		178	242	—		469
Total Current Liabilities	50		8,375	5,187	(681	)	12,931
Long-term debt	5,796		152	183	—		6,131
Asset retirement obligations and accrued environmental costs	—		527	173	—		700
Deferred income taxes	—		5,045	1,084	(4	)	6,125
Employee benefit obligations	—		724	197	—		921
Other liabilities and deferred credits	5,441		2,155	6,691	(13,689	)	598
Total Liabilities	11,287		16,978	13,515	(14,374	)	27,406
Common stock	16,291		25,938	8,302	(34,240	)	16,291
Retained earnings	5,622		7,061	1,163	(8,224	)	5,622
Accumulated other comprehensive income	37		37	320	(357	)	37
Noncontrolling interests	—		—	442	—		442
Total Liabilities and Equity	$	33,237	50,014	23,742	(57,195	)	49,798

	Millions of Dollars
	Three Months Ended March 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 continuing operating activities	$	52		11		1,438		(105	)	1,396
Net cash provided by discontinued operations	—			—		2		—		2
Net Cash Provided by Operating Activities	52			11		1,440		(105	)	1,398
Cash Flows From Investing Activities
Capital expenditures and investments*	—			(841	)	(449	)	718		(572	)
Proceeds from asset dispositions	—			871		36		(400	)	507
Intercompany lending activities	1,291			(66	)	(1,225	)	—		—
Other	—			(38	)	51		—		13
Net cash provided by (used in) continuing investing activities	1,291			(74	)	(1,587	)	318		(52	)
Net cash used in discontinued operations	—			—		(34	)	—		(34	)
Net Cash Provided by (Used in) Investing Activities	1,291			(74	)	(1,621	)	318		(86	)
Cash Flows From Financing Activities
Repayment of debt	—			(3	)	(5	)	—		(8	)
Issuance of common stock	(20		)	—		—		—		(20	)
Repurchase of common stock	(640		)	—		—		—		(640	)
Share exchange—PSPI transaction	(450		)	—		—		—		(450	)
Dividends paid on common stock	(229		)	—		(93	)	93		(229	)
Distributions to controlling interests	—			—		(274	)	274		—
Distributions to noncontrolling interests	—			—		(4	)	—		(4	)
Other*	(4		)	—		580		(580	)	(4	)
Net cash provided by (used in) continuing financing activities	(1,343		)	(3	)	204		(213	)	(1,355	)
Net cash provided by (used in) discontinued operations	—			—		—		—		—
Net Cash Provided by (Used in) Financing Activities	(1,343		)	(3	)	204		(213	)	(1,355	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—		(31	)	—		(31	)
Net Change in Cash and Cash Equivalents	—			(66	)	(8	)	—		(74	)
Cash and cash equivalents at beginning of period	—			2,162		3,238		—		5,400
Cash and Cash Equivalents at End of Period	$	—		2,096		3,230		—		5,326

* Includes intercompany capital contributions.

	Millions of Dollars
	Three Months Ended March 31, 2013
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	$	70		1,335		786		—		2,191
Net cash provided by discontinued operations	—			—		22		—		22
Net Cash Provided by Operating Activities	70			1,335		808		—		2,213
Cash Flows From Investing Activities
Capital expenditures and investments	—			(186	)	(216	)	20		(382	)
Proceeds from asset dispositions	—			—		9		—		9
Intercompany lending activities	515			(723	)	208		—		—
Collection of advances/loans—related parties	—			—		55		—		55
Net cash provided by (used in) continuing investing activities	515			(909	)	56		20		(318	)
Net cash used in discontinued operations	—			—		(5	)	—		(5	)
Net Cash Provided by (Used in) Investing Activities	515			(909	)	51		20		(323	)
Cash Flows From Financing Activities
Repayment of debt	—			(3	)	—		—		(3	)
Issuance of common stock	(6		)	—		—		—		(6	)
Repurchase of common stock	(382		)	—		—		—		(382	)
Dividends paid on common stock	(194		)	—		—		—		(194	)
Other	(3		)	3		20		(20	)	—
Net cash provided by (used in) continuing financing activities	(585		)	—		20		(20	)	(585	)
Net cash provided by (used in) discontinued operations	—			—		—		—		—
Net Cash Provided by (Used in) Financing Activities	(585		)	—		20		(20	)	(585	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—		(26	)	—		(26	)
Net Change in Cash and Cash Equivalents	—			426		853		—		1,279
Cash and cash equivalents at beginning of period	—			2,410		1,064		—		3,474
Cash and Cash Equivalents at End of Period	$	—		2,836		1,917		—		4,753

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Interim Financial Information Interim Financial Information (Policies)

3 Months Ended

Mar. 31, 2014

Interim Financial Information [Abstract]

Earnings Per Share

The numerator of basic earnings per share (EPS) is net income attributable to Phillips 66, reduced by noncancelable dividends paid on unvested share-based employee awards during the vesting period (participating securities). The denominator of basic EPS is the sum of the daily weighted-average number of common shares outstanding during the periods presented and fully vested stock and unit awards that have not yet been issued as common stock. The numerator of diluted EPS is also based on net income attributable to Phillips 66, which is reduced only by dividend equivalents paid on participating securities for which the dividends are more dilutive than the participation of the awards in the earnings of the periods presented. To the extent unvested stock, unit or option awards and vested unexercised stock options are dilutive, they are included with the weighted-average common shares outstanding in the denominator. Treasury stock is excluded from the denominator in both basic and diluted EPS.

Commitments and Contingencies

In the case of all known contingencies (other than those related to income taxes), we accrue a liability when the loss is probable and the amount is reasonably estimable. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. We do not reduce these liabilities for potential insurance or third-party recoveries. If applicable, we record receivables for probable insurance or other third-party recoveries. In the case of income-tax-related contingencies, we use a cumulative probability-weighted loss accrual in cases where sustaining a tax position is less than certain.

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Consolidated Statement of Changes in Equity (USD $) In Millions, except Share data, unless otherwise specified	Total	Par Value [Member]	Capital in Excess of Par [Member]	Treasury Stock [Member]	TreasuryStockRepurchasePlan [Member]	TreasuryStockReceivedOnDisposition [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Noncontrolling Interests [Member]
Beginning Balance at Dec. 31, 2012	$ 20,806	$ 6	$ 18,726	$ (356)			$ 2,713	$ (314)	$ 31
Beginning Balance, Treasury shares at Dec. 31, 2012	7,603,896
Beginning Balance, Common shares at Dec. 31, 2012	631,149,613
Net income	1,410						1,407		3
Other comprehensive income (Loss)	(308)							(308)
Cash dividends paid on common stock	(194)						(194)
Repurchase of common stock	(382)			(382)
Benefit plan activity			52
Benefit plan activity							(3)
Benefit plan activity	49
Distributions to noncontrolling interests and other			(3)
Distributions to noncontrolling interests and other
Distributions to noncontrolling interests and other	3
Shares
Shares issued - stock-based compensation	2,089,000
Repurchase of common stock, shares	6,403,000
Ending Balance at Mar. 31, 2013	21,378	6	18,775	(738)			3,923	(622)	34
Ending Balance, Treasury shares at Mar. 31, 2013	14,007,000
Ending Balance, Common shares at Mar. 31, 2013	633,239,000
Beginning Balance at Dec. 31, 2013	22,392	6	18,887	(2,602)			5,622	37	442
Beginning Balance, Treasury shares at Dec. 31, 2013	44,106,380
Beginning Balance, Common shares at Dec. 31, 2013	634,285,955
Net income	1,578						1,572		6
Other comprehensive income (Loss)	40							40
Cash dividends paid on common stock	(229)						(229)
Repurchase of common stock					(640)	(1,350)
Benefit plan activity			45
Benefit plan activity							(3)
Benefit plan activity	42
Distributions to noncontrolling interests and other
Distributions to noncontrolling interests and other									(4)
Distributions to noncontrolling interests and other	(4)
Shares
Shares issued - stock-based compensation	1,499,000
Repurchase of common stock, shares					8,410,000	17,423,000
Ending Balance at Mar. 31, 2014	$ 21,829	$ 6	$ 18,932	$ (4,592)			$ 6,962	$ 77	$ 444
Ending Balance, Treasury shares at Mar. 31, 2014	69,939,104
Ending Balance, Common shares at Mar. 31, 2014	635,784,906

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Inventories (Tables)

3 Months Ended

Mar. 31, 2014

Inventory Disclosure [Abstract]

Summary of Inventories

Inventories consisted of the following:

	Millions of Dollars
	March 31 2014		December 31 2013
Crude oil and petroleum products	$	5,642	3,093
Materials and supplies	266		261
	$	5,908	3,354

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Employee Benefit Plans (Tables)

3 Months Ended

Mar. 31, 2014

Compensation and Retirement Disclosure [Abstract]

Components of Net Periodic Benefit Cost

The components of net periodic benefit cost for the three months ended March 31, 2014 and 2013, were as follows:

	Millions of Dollars
	Pension Benefits									Other Benefits
	2014					2013				2014		2013
	U.S.			Int’l.		U.S.		Int’l.
Components of Net Periodic Benefit Cost
Three Months Ended March 31
Service cost	$	30		10		31		9		2		2
Interest cost	27			9		23		8		2		2
Expected return on plan assets	(36		)	(9	)	(30	)	(7	)	—		—
Amortization of prior service cost (credit)	1			(1	)	—		—		—		—
Recognized net actuarial loss (gain)	10			3		21		5		(1	)	—
Total net periodic benefit cost	$	32		12		45		15		3		4

XML

Goodwill (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Goodwill [Line Items]
Goodwill	$ 3,141	$ 3,096

XML

Cash Flow Information (Narrative) (Details) (Phillips Specialty Products Inc [Member], Marketing and Specialties [Member], USD $) Share data in Millions, unless otherwise specified	2 Months Ended
	Feb. 25, 2014
Phillips Specialty Products Inc [Member] | Marketing and Specialties [Member]
Noncash or Part Noncash Divestitures [Line Items]
Noncash portion of net assets surrendered in exchange	$ 204,000,000
Number of shares of Phillips 66 common stock received in exchange	17.4
Fair value of shares at time of the exchange	$ 1,350,000,000

XML

Consolidated Statement of Income (USD $) In Millions, except Share data in Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Sales and other operating revenues
Sales and other operating revenues	$ 40,283	[1]	$ 41,211	[1]
Equity in earnings of affiliates	778		1,039
Net gain on dispositions	7		1
Other income	31		23
Total Revenues and Other Income	41,099		42,274
Costs and Expenses
Purchased crude oil and products	34,381		35,243
Operating expenses	1,090		978
Selling, general and administrative expenses	402		327
Depreciation and amortization	234		242
Impairments	1		24
Taxes other than income taxes	3,638	[1]	3,324	[1]
Accretion on discounted liabilities	6		6
Interest and debt expense	68		70
Foreign currency transaction (gains) losses	(19)		2
Total Costs and Expenses	39,801		40,216
Income from continuing operations before income taxes	1,298		2,058
Provision for income taxes	426		663
Income From Continuing Operations	872		1,395
Income from discontinued operations	706	[2]	15	[2]
Net Income	1,578		1,410
Less: net income attributable to noncontrolling interests	6		3
Net Income Attributable to Phillips 66	1,572		1,407
Amounts Attributable to Phillips 66 Common Stockholders:
Income from continuing operations	866		1,392
Income from discontinued operations	$ 706		$ 15
Basic
Continuing operations	$ 1.48		$ 2.23
Discontinued operations	$ 1.21		$ 0.02
Net Income Attributable to Phillips 66 Per Share of Common Stock	$ 2.69		$ 2.25
Diluted
Continuing operations	$ 1.47		$ 2.21
Discontinued operations	$ 1.20		$ 0.02
Net Income Attributable to Phillips 66 Per Share of Common Stock	$ 2.67		$ 2.23
Dividends Paid Per Share of Common Stock (dollars)	$ 0.3900		$ 0.3125
Average Common Shares Outstanding (in thousands)
Basic	584,053		625,030
Diluted	589,575		631,288

[1] Includes excise taxes on petroleum products sales: $3,522 million, $3,258 million

[2] Net of provision for income taxes on discontinued operations: $5 million, $8 million

XML

Condensed Consolidating Financial Information (Tables)

3 Months Ended

Mar. 31, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Income Statement

	Millions of Dollars
	Three Months Ended March 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	$	—		27,239	13,044		—		40,283
Equity in earnings of affiliates	922			846	178		(1,168	)	778
Net gain on dispositions	—			—	7		—		7
Other income	—			22	9		—		31
Intercompany revenues	—			278	4,701		(4,979	)	—
Total Revenues and Other Income	922			28,385	17,939		(6,147	)	41,099
Costs and Expenses
Purchased crude oil and products	—			24,384	14,938		(4,941	)	34,381
Operating expenses	2			903	191		(6	)	1,090
Selling, general and administrative expenses	3			286	138		(25	)	402
Depreciation and amortization	—			180	54		—		234
Impairments	—			1	—		—		1
Taxes other than income taxes	—			1,301	2,337		—		3,638
Accretion on discounted liabilities	—			5	1		—		6
Interest and debt expense	66			4	5		(7	)	68
Foreign currency transaction gains	—			—	(19	)	—		(19	)
Total Costs and Expenses	71			27,064	17,645		(4,979	)	39,801
Income from continuing operations before income taxes	851			1,321	294		(1,168	)	1,298
Provision (benefit) for income taxes	(25		)	399	52		—		426
Income from Continuing Operations	876			922	242		(1,168	)	872
Income from discontinued operations*	696			—	10		—		706
Net income	1,572			922	252		(1,168	)	1,578
Less: net income attributable to noncontrolling interests	—			—	6		—		6
Net Income Attributable to Phillips 66	$	1,572		922	246		(1,168	)	1,572
Comprehensive Income	$	1,612		962	284		(1,240	)	1,618
* Net of provision for income taxes on discontinued operations	$	—		—	5		—		5

	Millions of Dollars
	Three Months Ended March 31, 2013
Statement of Income	Phillips 66			Phillips 66 Company		All Other Subsidiaries		Consolidating Adjustments		Total Consolidated
Revenues and Other Income
Sales and other operating revenues	$	—		27,637		13,574		—		41,211
Equity in earnings of affiliates	1,452			1,139		158		(1,710	)	1,039
Net gain on dispositions	—			1		—		—		1
Other income	—			15		8		—		23
Intercompany revenues	—			490		4,833		(5,323	)	—
Total Revenues and Other Income	1,452			29,282		18,573		(7,033	)	42,274
Costs and Expenses
Purchased crude oil and products	—			24,752		15,780		(5,289	)	35,243
Operating expenses	—			799		186		(7	)	978
Selling, general and administrative expenses	2			206		142		(23	)	327
Depreciation and amortization	—			183		59		—		242
Impairments	—			(3	)	27		—		24
Taxes other than income taxes	—			1,209		2,115		—		3,324
Accretion on discounted liabilities	—			5		1		—		6
Interest and debt expense	67			3		4		(4	)	70
Foreign currency transaction losses	—			1		1		—		2
Total Costs and Expenses	69			27,155		18,315		(5,323	)	40,216
Income from continuing operations before income taxes	1,383			2,127		258		(1,710	)	2,058
Provision (benefit) for income taxes	(24		)	675		12		—		663
Income from Continuing Operations	1,407			1,452		246		(1,710	)	1,395
Income from discontinued operations*	—			—		15		—		15
Net income	1,407			1,452		261		(1,710	)	1,410
Less: net income attributable to noncontrolling interests	—			—		3		—		3
Net Income Attributable to Phillips 66	$	1,407		1,452		258		(1,710	)	1,407
Comprehensive Income	$	1,100		1,145		(54	)	(1,089	)	1,102
* Net of provision for income taxes on discontinued operations:	$	—		—		8		—		8

Condensed Balance Sheet

	Millions of Dollars
	At March 31, 2014
Balance Sheet	Phillips 66		Phillips 66 Company	All Other Subsidiaries	Consolidating Adjustments		Total Consolidated
Assets
Cash and cash equivalents	$	—	2,096	3,230	—		5,326
Accounts and notes receivable	30		2,699	7,303	(912	)	9,120
Inventories	—		3,414	2,494	—		5,908
Prepaid expenses and other current assets	9		389	307	—		705
Total Current Assets	39		8,598	13,334	(912	)	21,059
Investments and long-term receivables	33,514		26,043	7,997	(57,553	)	10,001
Net properties, plants and equipment	—		11,976	3,775	—		15,751
Goodwill	—		3,099	42	—		3,141
Intangibles	—		693	44	—		737
Other assets	38		112	12	(4	)	158
Total Assets	$	33,591	50,521	25,204	(58,469	)	50,847
Liabilities and Equity
Accounts payable	$	—	7,630	5,905	(912	)	12,623
Short-term debt	—		18	22	—		40
Accrued income and other taxes	—		992	599	—		1,591
Employee benefit obligations	—		207	25	—		232
Other accruals	99		184	395	—		678
Total Current Liabilities	99		9,031	6,946	(912	)	15,164
Long-term debt	5,796		148	233	—		6,177
Asset retirement obligations and accrued environmental costs	—		521	176	—		697
Deferred income taxes	—		4,567	1,129	(4	)	5,692
Employee benefit obligations	—		596	197	—		793
Other liabilities and deferred credits	6,282		2,198	6,458	(14,443	)	495
Total Liabilities	12,177		17,061	15,139	(15,359	)	29,018
Common stock	14,346		25,400	8,020	(33,420	)	14,346
Retained earnings	6,991		7,983	1,249	(9,261	)	6,962
Accumulated other comprehensive income	77		77	352	(429	)	77
Noncontrolling interests	—		—	444	—		444
Total Liabilities and Equity	$	33,591	50,521	25,204	(58,469	)	50,847

	Millions of Dollars
	At December 31, 2013
Balance Sheet	Phillips 66		Phillips 66 Company	All Other Subsidiaries	Consolidating Adjustments		Total Consolidated
Assets
Cash and cash equivalents	$	—	2,162	3,238	—		5,400
Accounts and notes receivable	9		2,174	8,130	(681	)	9,632
Inventories	—		1,962	1,392	—		3,354
Prepaid expenses and other current assets	10		368	473	—		851
Total Current Assets	19		6,666	13,233	(681	)	19,237
Investments and long-term receivables	33,178		27,417	7,135	(56,510	)	11,220
Net properties, plants and equipment	—		12,031	3,367	—		15,398
Goodwill	—		3,094	2	—		3,096
Intangibles	—		694	4	—		698
Other assets	40		112	1	(4	)	149
Total Assets	$	33,237	50,014	23,742	(57,195	)	49,798
Liabilities and Equity
Accounts payable	$	1	7,507	4,263	(681	)	11,090
Short-term debt	—		18	6	—		24
Accrued income and other taxes	—		250	622	—		872
Employee benefit obligations	—		422	54	—		476
Other accruals	49		178	242	—		469
Total Current Liabilities	50		8,375	5,187	(681	)	12,931
Long-term debt	5,796		152	183	—		6,131
Asset retirement obligations and accrued environmental costs	—		527	173	—		700
Deferred income taxes	—		5,045	1,084	(4	)	6,125
Employee benefit obligations	—		724	197	—		921
Other liabilities and deferred credits	5,441		2,155	6,691	(13,689	)	598
Total Liabilities	11,287		16,978	13,515	(14,374	)	27,406
Common stock	16,291		25,938	8,302	(34,240	)	16,291
Retained earnings	5,622		7,061	1,163	(8,224	)	5,622
Accumulated other comprehensive income	37		37	320	(357	)	37
Noncontrolling interests	—		—	442	—		442
Total Liabilities and Equity	$	33,237	50,014	23,742	(57,195	)	49,798

Condensed Statement of Cash Flows

	Millions of Dollars
	Three Months Ended March 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 continuing operating activities	$	52		11		1,438		(105	)	1,396
Net cash provided by discontinued operations	—			—		2		—		2
Net Cash Provided by Operating Activities	52			11		1,440		(105	)	1,398
Cash Flows From Investing Activities
Capital expenditures and investments*	—			(841	)	(449	)	718		(572	)
Proceeds from asset dispositions	—			871		36		(400	)	507
Intercompany lending activities	1,291			(66	)	(1,225	)	—		—
Other	—			(38	)	51		—		13
Net cash provided by (used in) continuing investing activities	1,291			(74	)	(1,587	)	318		(52	)
Net cash used in discontinued operations	—			—		(34	)	—		(34	)
Net Cash Provided by (Used in) Investing Activities	1,291			(74	)	(1,621	)	318		(86	)
Cash Flows From Financing Activities
Repayment of debt	—			(3	)	(5	)	—		(8	)
Issuance of common stock	(20		)	—		—		—		(20	)
Repurchase of common stock	(640		)	—		—		—		(640	)
Share exchange—PSPI transaction	(450		)	—		—		—		(450	)
Dividends paid on common stock	(229		)	—		(93	)	93		(229	)
Distributions to controlling interests	—			—		(274	)	274		—
Distributions to noncontrolling interests	—			—		(4	)	—		(4	)
Other*	(4		)	—		580		(580	)	(4	)
Net cash provided by (used in) continuing financing activities	(1,343		)	(3	)	204		(213	)	(1,355	)
Net cash provided by (used in) discontinued operations	—			—		—		—		—
Net Cash Provided by (Used in) Financing Activities	(1,343		)	(3	)	204		(213	)	(1,355	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—		(31	)	—		(31	)
Net Change in Cash and Cash Equivalents	—			(66	)	(8	)	—		(74	)
Cash and cash equivalents at beginning of period	—			2,162		3,238		—		5,400
Cash and Cash Equivalents at End of Period	$	—		2,096		3,230		—		5,326

* Includes intercompany capital contributions.

	Millions of Dollars
	Three Months Ended March 31, 2013
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	$	70		1,335		786		—		2,191
Net cash provided by discontinued operations	—			—		22		—		22
Net Cash Provided by Operating Activities	70			1,335		808		—		2,213
Cash Flows From Investing Activities
Capital expenditures and investments	—			(186	)	(216	)	20		(382	)
Proceeds from asset dispositions	—			—		9		—		9
Intercompany lending activities	515			(723	)	208		—		—
Collection of advances/loans—related parties	—			—		55		—		55
Net cash provided by (used in) continuing investing activities	515			(909	)	56		20		(318	)
Net cash used in discontinued operations	—			—		(5	)	—		(5	)
Net Cash Provided by (Used in) Investing Activities	515			(909	)	51		20		(323	)
Cash Flows From Financing Activities
Repayment of debt	—			(3	)	—		—		(3	)
Issuance of common stock	(6		)	—		—		—		(6	)
Repurchase of common stock	(382		)	—		—		—		(382	)
Dividends paid on common stock	(194		)	—		—		—		(194	)
Other	(3		)	3		20		(20	)	—
Net cash provided by (used in) continuing financing activities	(585		)	—		20		(20	)	(585	)
Net cash provided by (used in) discontinued operations	—			—		—		—		—
Net Cash Provided by (Used in) Financing Activities	(585		)	—		20		(20	)	(585	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—		(26	)	—		(26	)
Net Change in Cash and Cash Equivalents	—			426		853		—		1,279
Cash and cash equivalents at beginning of period	—			2,410		1,064		—		3,474
Cash and Cash Equivalents at End of Period	$	—		2,836		1,917		—		4,753

XML

Consolidated Balance Sheet (Parenthetical) (USD $) In Millions, except Share data, unless otherwise specified	Dec. 31, 2013
Accounts and notes receivable - allowance	$ 47
Common stock, shares authorized	2,500,000,000
Common stock, par value	$ 0.01
Common stock, shares Issued	634,285,955
Treasury stock, shares	44,106,380

XML

Guarantees (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2014 Residual Value Guarantees [Member]	Mar. 31, 2014 Other Guarantees [Member]	Mar. 31, 2014 Indemnifications [Member]	Mar. 31, 2014 Merey Sweeny [Member] Guarantees of Joint Venture Debt [Member]	Apr. 30, 2012 Merey Sweeny [Member] Guarantees of Joint Venture Debt [Member]
Guarantees (Textual) [Abstract]
Percentage of guarantee							100.00%
Stated interest rate of senior notes issued by MSLP, percentage						8.85%	8.85%
Maximum potential amount of future payments under the guarantees			$ 228	$ 314		$ 214
Remaining terms in years of guarantees outstanding				10 years
Carrying amount of indemnifications					241
Environmental accruals included in recorded carrying amount	$ 488	$ 492			$ 107

XML

Goodwill (Tables)

3 Months Ended

Mar. 31, 2014

Goodwill [Abstract]

Carrying amount of goodwill

The carrying amount of goodwill was as follows:

	Millions of Dollars
	March 31 2014		December 31 2013
Midstream	$	518	518
Refining	1,912		1,867
Marketing and Specialties	711		711
	$	3,141	3,096

XML

Fair Value Measurements (Summary of Fair Value of Derivative Assets and Liabilities and Effect of Counterparty Netting) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Effect of counterparty netting, commodity derivative assets	$ (448)		$ (546)
Effect of collateral netting, commodity derivative assets			0
Rabbi trust assets	64		64
Total assets, fair value disclosure gross	551		660
Effect of counterparty netting, commodity derivative liabilities	(448)		(546)
Effect of collateral netting, commodity derivative liabilities	(4)		(41)
Difference in carrying value and fair value	(383)		(262)
Total liabilities, fair value disclosure gross	6,873		6,852
Net carrying value presented on balance sheet, commodity derivative liabilities and debt	6,038		6,003
Carrying (Reported) Amount, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Rabbi trust assets	64		64
Net carrying value presented on balance sheet, commodity derivative assets and investments	103		114
Floating Rate Debt [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt excluding capital leases, fair value gross	53		50
Net carrying value presented on balance sheet, debt	53		50
Fixed Rate Debt Excluding Capital Leases [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt excluding capital leases, fair value gross	6,347	[1]	6,168	[1]
Net carrying value presented on balance sheet, debt	5,964	[1]	5,906	[1]
Difference in carrying value and fair value	(383)	[1]	(262)	[1]
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Rabbi trust assets	64		64
Total assets, fair value disclosure gross	267		291
Total liabilities, fair value disclosure gross	260		303
Level 1 [Member] | Floating Rate Debt [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt excluding capital leases, fair value gross	53		50
Level 1 [Member] | Fixed Rate Debt Excluding Capital Leases [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt excluding capital leases, fair value gross	0	[1]	0	[1]
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Rabbi trust assets	0		0
Total assets, fair value disclosure gross	280		367
Total liabilities, fair value disclosure gross	6,612		6,548
Level 2 [Member] | Floating Rate Debt [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt excluding capital leases, fair value gross	0		0
Level 2 [Member] | Fixed Rate Debt Excluding Capital Leases [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt excluding capital leases, fair value gross	6,347	[1]	6,168	[1]
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Rabbi trust assets	0		0
Total assets, fair value disclosure gross	4		2
Total liabilities, fair value disclosure gross	1		1
Level 3 [Member] | Floating Rate Debt [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt excluding capital leases, fair value gross	0		0
Level 3 [Member] | Fixed Rate Debt Excluding Capital Leases [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt excluding capital leases, fair value gross	0	[1]	0	[1]
Exchange-cleared Instruments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity derivative assets, fair value gross	451		559
Effect of counterparty netting, commodity derivative assets	444		538
Effect of collateral netting, commodity derivative assets	0		0
Net carrying value presented on balance sheet, commodity derivative assets	7		21
Commodity derivative liabilities, fair value gross	448		579
Effect of counterparty netting, commodity derivative liabilities	444		538
Effect of collateral netting, commodity derivative liabilities	4		41
Net carrying value presented on balance sheet, commodity derivative liabilities			0
Derivative, Collateral, Right to Reclaim Cash
Exchange-cleared Instruments [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity derivative assets, fair value gross	203		227
Commodity derivative liabilities, fair value gross	207		253
Exchange-cleared Instruments [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity derivative assets, fair value gross	248		332
Commodity derivative liabilities, fair value gross	241		326
Exchange-cleared Instruments [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity derivative assets, fair value gross	0		0
Commodity derivative liabilities, fair value gross	0		0
OTC Instruments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity derivative assets, fair value gross	9		10
Effect of counterparty netting, commodity derivative assets	4		8
Net carrying value presented on balance sheet, commodity derivative assets	5		2
Commodity derivative liabilities, fair value gross	11		11
Effect of counterparty netting, commodity derivative liabilities	4		8
Net carrying value presented on balance sheet, commodity derivative liabilities	7		3
OTC Instruments [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity derivative assets, fair value gross	0		0
Commodity derivative liabilities, fair value gross	0		0
OTC Instruments [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity derivative assets, fair value gross	9		10
Commodity derivative liabilities, fair value gross	11		11
OTC Instruments [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity derivative assets, fair value gross	0		0
Commodity derivative liabilities, fair value gross	0		0
Physical Forward Contracts [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity derivative assets, fair value gross	27	[2]	27	[2]
Effect of counterparty netting, commodity derivative assets	0	[2]	0	[2]
Net carrying value presented on balance sheet, commodity derivative assets	27	[2]	27	[2]
Commodity derivative liabilities, fair value gross	14	[2]	44	[2]
Effect of counterparty netting, commodity derivative liabilities	0	[2]	0	[2]
Net carrying value presented on balance sheet, commodity derivative liabilities	14	[2]	44	[2]
Physical Forward Contracts [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity derivative assets, fair value gross	0	[2]	0	[2]
Commodity derivative liabilities, fair value gross	0	[2]	0	[2]
Physical Forward Contracts [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity derivative assets, fair value gross	23	[2]	25	[2]
Commodity derivative liabilities, fair value gross	13	[2]	43	[2]
Physical Forward Contracts [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Commodity derivative assets, fair value gross	4	[2]	2	[2]
Commodity derivative liabilities, fair value gross	$ 1	[2]	$ 1

[1] We carry fixed-rate debt on the balance sheet at amortized cost.

[2] Physical forward contracts may have a larger value on the balance sheet than disclosed in the fair value hierarchy when the remaining contract term at the reporting date is greater than 12 months and the short-term portion is an asset while the long-term portion is a liability, or vice versa.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair Values of Financial Instruments

We used the following methods and assumptions to estimate the fair value of financial instruments:

• Cash and cash equivalents: The carrying amount reported on the consolidated balance sheet approximates fair value.

• Accounts and notes receivable: The carrying amount reported on the consolidated balance sheet approximates fair value.

• Debt: The carrying amount of our floating-rate debt approximates fair value. The fair value of our fixed-rate debt is estimated based on quoted market prices.

• Commodity swaps: Fair value is estimated based on forward market prices and approximates the exit price at period end. When forward market prices are not available, fair value is estimated using the forward prices of a similar commodity with adjustments for differences in quality or location.

• Futures: Fair values are based on quoted market prices obtained from the New York Mercantile Exchange, the InterContinental Exchange Futures or other traded exchanges.

• Forward-exchange contracts: Fair values are estimated by comparing the contract rate to the forward rate in effect at the end of the respective reporting periods and approximating the exit price at those dates.

We carry certain assets and liabilities at fair value, which we measure at the reporting date using an exit price (i.e., the price that would be received to sell an asset or paid to transfer a liability), and disclose the quality of these fair values based on the valuation inputs used in these measurements under the following hierarchy:

• Level 1: Fair value measured with unadjusted quoted prices from an active market for identical assets or liabilities.

• Level 2: Fair value measured with: 1) adjusted quoted prices from an active market for similar assets; or 2) other valuation inputs that are directly or indirectly observable.

• Level 3: Fair value measured with unobservable inputs that are significant to the measurement.

We classify the fair value of an asset or liability based on the lowest level of input significant to its measurement; however, the fair value of an asset or liability initially reported as Level 3 will be subsequently reported as Level 2 if the unobservable inputs become inconsequential to its measurement or corroborating market data becomes available. Conversely, an asset or liability initially reported as Level 2 will be subsequently reported as Level 3 if corroborating market data becomes unavailable. We made no material transfers in or out of Level 1 during the three-month periods ended March 31, 2014 and 2013.

Recurring Fair Value Measurements

Financial assets and liabilities recorded at fair value on a recurring basis consist primarily of investments to support nonqualified deferred compensation plans and derivative instruments. The deferred compensation investments are measured at fair value using unadjusted prices available from national securities exchanges; therefore, these assets are categorized as Level 1 in the fair value hierarchy. We value our exchange-traded commodity derivatives using closing prices provided by the exchange as of the balance sheet date, and these are also classified as Level 1 in the fair value hierarchy. When exchange-cleared contracts lack sufficient liquidity or are valued using either adjusted exchange-provided prices or non-exchange quotes, we classify those contracts as Level 2. OTC financial swaps and physical commodity forward purchase and sales contracts are generally valued using quotations provided by brokers and price index developers such as Platts and Oil Price Information Service. We corroborate these quotes with market data and classify the resulting fair values as Level 2. In certain less liquid markets or for longer-term contracts, forward prices are not as readily available. In these circumstances, OTC swaps and physical commodity purchase and sales contracts are valued using internally developed methodologies that consider historical relationships among various commodities that result in management’s best estimate of fair value. We classify these contracts as Level 3. Financial OTC and physical commodity options are valued using industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and contractual prices for the underlying instruments, as well as other relevant economic measures. The degree to which these inputs are observable in the forward markets determines whether the options are classified as Level 2 or 3. We use a mid-market pricing convention (the mid-point between bid and ask prices). When appropriate, valuations are adjusted to reflect credit considerations, generally based on available market evidence.

The following tables display the fair value hierarchy for our material financial assets and liabilities either accounted for or disclosed at fair value on a recurring basis. These values are determined by treating each contract as the fundamental unit of account; therefore, derivative assets and liabilities with the same counterparty are shown gross (i.e., without the effect of netting where the legal right of setoff exists) in the hierarchy sections of these tables. These tables also show that our Level 3 activity was not material.

We have master netting arrangements for all of our exchange-cleared derivative instruments, the majority of our OTC derivative instruments, and certain physical commodity forward contracts (primarily pipeline crude oil deliveries). The following tables show these contracts on a net basis in the column “Effect of Counterparty Netting.” We have no contracts that are subject to master netting arrangements that are reflected gross on the consolidated balance sheet.

The carrying values and fair values by hierarchy of our material financial instruments, either carried or disclosed at fair value, and derivative assets and liabilities, including any effects of master netting agreements or collateral, were:

	Millions of Dollars
	March 31, 2014
	Fair Value Hierarchy				Total Fair Value of Gross Assets & Liabilities	Effect of Counterparty Netting		Effect of Collateral Netting		Difference in Carrying Value and Fair Value		Net Carrying Value Presented on the Balance Sheet	Cash Collateral Received or Paid, Not Offset on Balance Sheet
	Level 1		Level 2	Level 3
Commodity Derivative Assets
Exchange-cleared instruments	$	203	248	—	451	(444	)	—		—		7	—
OTC instruments	—		9	—	9	(4	)	—		—		5	—
Physical forward contracts*	—		23	4	27	—		—		—		27	—
Rabbi trust assets	64		—	—	64	N/A		N/A		—		64	N/A
	$	267	280	4	551	(448	)	—		—		103
Commodity Derivative Liabilities
Exchange-cleared instruments	$	207	241	—	448	(444	)	(4	)	—		—	—
OTC instruments	—		11	—	11	(4	)	—		—		7	—
Physical forward contracts*	—		13	1	14	—		—		—		14	—
Floating-rate debt	53		—	—	53	N/A		N/A		—		53	N/A
Fixed-rate debt, excluding capital leases**	—		6,347	—	6,347	N/A		N/A		(383	)	5,964	N/A
	$	260	6,612	1	6,873	(448	)	(4	)	(383	)	6,038

* Physical forward contracts may have a larger value on the balance sheet than disclosed in the fair value hierarchy when the remaining contract term at the reporting date is greater than 12 months and the short-term portion is an asset while the long-term portion is a liability, or vice versa.

** We carry fixed-rate debt on the balance sheet at amortized cost.

	Millions of Dollars
	December 31, 2013
	Fair Value Hierarchy				Total Fair Value of Gross Assets & Liabilities	Effect of Counterparty Netting		Effect of Collateral Netting		Difference in Carrying Value and Fair Value		Net Carrying Value Presented on the Balance Sheet	Cash Collateral Received or Paid, Not Offset on Balance Sheet
	Level 1		Level 2	Level 3
Commodity Derivative Assets
Exchange-cleared instruments	$	227	332	—	559	(538	)	—		—		21	—
OTC instruments	—		10	—	10	(8	)	—		—		2	—
Physical forward contracts*	—		25	2	27	—		—		—		27	—
Rabbi trust assets	64		—	—	64	N/A		N/A		—		64	N/A
	$	291	367	2	660	(546	)	—		—		114
Commodity Derivative Liabilities
Exchange-cleared instruments	$	253	326	—	579	(538	)	(41	)	—		—	—
OTC instruments	—		11	—	11	(8	)	—		—		3	—
Physical forward contracts*	—		43	1	44	—		—		—		44	—
Floating-rate debt	50		—	—	50	N/A		N/A		—		50	N/A
Fixed-rate debt, excluding capital leases**	—		6,168	—	6,168	N/A		N/A		(262	)	5,906	N/A
	$	303	6,548	1	6,852	(546	)	(41	)	(262	)	6,003

* Physical forward contracts may have a larger value on the balance sheet than disclosed in the fair value hierarchy when the remaining contract term at the reporting date is greater than 12 months and the short-term portion is an asset while the long-term portion is a liability, or vice versa.

** We carry fixed-rate debt on the balance sheet at amortized cost.

The values presented in the preceding tables appear on our balance sheet as follows: for commodity derivative assets and liabilities, this is provided in the first table in Note 13—Derivatives and Financial Instruments; rabbi trust assets appear in the “Investments and long-term receivables” line; and floating-rate and fixed-rate debt appear in the “Short-term debt” and “Long-term debt” lines.

Nonrecurring Fair Value Remeasurements

During the three-month period ended March 31, 2014, there were no significant nonrecurring fair value remeasurements of assets subsequent to their initial recognition.

The following table shows the values of assets, by major category, measured at fair value on a nonrecurring basis in periods subsequent to their initial recognition during the three-month period ended March 31, 2013:

	Millions of Dollars
			Fair Value Measurements Using
	Fair Value*		Level 1 Inputs	Level 2 Inputs	Level 3 Inputs	Before- Tax Loss
March 31, 2013
Net properties, plants and equipment (held for use)	$	22	22	—	—	27

* Represents the fair value at the time of the impairment.

During the first quarter of2013, net PP&E held for use related to the composite graphite business in our M&S segment, with a carrying amount of $18 million, was written down to its fair value, resulting in a before-tax loss of $18 million. The fair value was based on an internal assessment of expected discounted future cash flows. During this same period, corporate net PP&E held for use with a carrying amount of $31 million was written down to its fair value of $22 million, resulting in a before-tax loss of $9 million. The fair value was primarily determined by a third-party valuation.

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Impairments (Tables)

3 Months Ended

Mar. 31, 2014

Impairment Of Long Lived Assets Abstract [Abstract]

Impairment Charges

The three-month periods ended March 31, 2014 and 2013, included the following before-tax impairment charges:

	Millions of Dollars
	Three Months Ended March 31
	2014		2013
Refining	$	1	—
Marketing and Specialties	—		15
Corporate and Other	—		9
	$	1	24

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Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2014

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

The following table depicts changes in accumulated other comprehensive income (loss) by component, as well as detail on reclassifications out of accumulated other comprehensive income (loss):

	Millions of Dollars
	Defined Benefit Plans			Foreign Currency Translation		Hedging		Accumulated Other Comprehensive Income (Loss)
December 31, 2012	$	(778	)	466		(2	)	(314	)
Other comprehensive loss before reclassifications	(8		)	(318	)	—		(326	)
Amounts reclassified from accumulated other comprehensive income (loss)*
Amortization of defined benefit plan items**
Actuarial losses	18			—		—		18
Net current period other comprehensive income (loss)	10			(318	)	—		(308	)
March 31, 2013	$	(768	)	148		(2	)	(622	)
December 31, 2013	$	(404	)	443		(2	)	37
Other comprehensive income before reclassifications	2			30		—		32
Amounts reclassified from accumulated other comprehensive income (loss)*
Amortization of defined benefit plan items**
Actuarial losses	8			—		—		8
Net current period other comprehensive income	10			30		—		40
March 31, 2014	$	(394	)	473		(2	)	77

* There were no significant reclassifications related to foreign currency translation or hedging.

** These accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit cost (see Note 15—Employee Benefit Plans, for additional information).

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Employee Benefit Plans (Summary of Components of Net Periodic Benefit Cost) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
United States Pension Plans of U S Entity, Defined Benefit [Member]
Components of Net Periodic Benefit Cost
Service cost	$ 30	$ 31
Interest cost	27	23
Expected return on plan assets	(36)	(30)
Amortization of prior service cost (credit)	1
Recognized net actuarial loss (gain)	10	21
Total net periodic benefit cost	32	45
Foreign Pension Plans, Defined Benefit [Member]
Components of Net Periodic Benefit Cost
Service cost	10	9
Interest cost	9	8
Expected return on plan assets	(9)	(7)
Amortization of prior service cost (credit)	(1)
Recognized net actuarial loss (gain)	3	5
Total net periodic benefit cost	12	15
Other Postretirement Benefit Plans, Defined Benefit [Member]
Components of Net Periodic Benefit Cost
Service cost	2	2
Interest cost	2	2
Amortization of prior service cost (credit)
Recognized net actuarial loss (gain)	(1)
Total net periodic benefit cost	$ 3	$ 4

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Consolidated Statement of Cash Flows (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Net Cash Provided by (Used in) Operating Activities, Continuing Operations [Abstract]
Net income	$ 1,578		$ 1,410
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	234		242
Impairments	1		24
Accretion on discounted liabilities	6		6
Deferred taxes	(444)		82
Undistributed equity earnings	632		77
Net gain on dispositions	(7)		(1)
Income from discontinued operations	(706)	[1]	(15)	[1]
Other	(21)		(34)
Working capital adjustments
Decrease (increase) in accounts and notes receivable	619		283
Decrease (increase) in inventories	(2,567)		(2,443)
Decrease (increase) in prepaid expenses and other current assets	(132)		(71)
Increase (decrease) in accounts payable	1,505		2,465
Increase (decrease) in taxes and other accruals	698		166
Net cash provided by continuing operating activities	1,396		2,191
Net cash provided by discontinued operations	2		22
Net Cash Provided by Operating Activities	1,398		2,213
Net Cash Provided by (Used in) Investing Activities, Continuing Operations [Abstract]
Capital expenditures and investments	(572)		(382)
Proceeds from asset dispositions	507		9
Collection of advances/loans—related parties			55
Payments for (Proceeds from) Other Investing Activities	13		0
Net cash used in continuing investing activities	(52)		(318)
Net cash used in discontinued operations	(34)		(5)
Net Cash Used in Investing Activities	(86)		(323)
Net Cash Provided by (Used in) Financing Activities, Continuing Operations [Abstract]
Repayment of debt	(8)		(3)
Issuance of common stock	(20)		(6)
Repurchase of common stock	(640)		(382)
Share exchange—PSPI transaction	(450)
Dividends paid on common stock	(229)		(194)
Distributions to noncontrolling interests	(4)		0
Other	(4)		0
Net cash used in continuing financing activities	(1,355)		(585)
Net cash provided by (used in) discontinued operations	0		0
Net Cash Used in Financing Activities	(1,355)		(585)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	(31)		(26)
Net Change in Cash and Cash Equivalents	(74)		1,279
Cash and cash equivalents at beginning of period	5,400		3,474
Cash and Cash Equivalents at End of Period	$ 5,326		$ 4,753

[1] Net of provision for income taxes on discontinued operations: $5 million, $8 million

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Consolidated Statement of Income (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Income Statement [Abstract]
Includes excise taxes on petroleum products sales	$ 3,522	$ 3,258
Net of provision for income taxes on discontinued operations	$ 5	$ 8

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Earnings Per Share

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

The numerator of basic earnings per share (EPS) is net income attributable to Phillips 66, reduced by noncancelable dividends paid on unvested share-based employee awards during the vesting period (participating securities). The denominator of basic EPS is the sum of the daily weighted-average number of common shares outstanding during the periods presented and fully vested stock and unit awards that have not yet been issued as common stock. The numerator of diluted EPS is also based on net income attributable to Phillips 66, which is reduced only by dividend equivalents paid on participating securities for which the dividends are more dilutive than the participation of the awards in the earnings of the periods presented. To the extent unvested stock, unit or option awards and vested unexercised stock options are dilutive, they are included with the weighted-average common shares outstanding in the denominator. Treasury stock is excluded from the denominator in both basic and diluted EPS.

	Three Months Ended March 31
	2014				2013
	Basic			Diluted	Basic		Diluted
Amounts attributed to Phillips 66 Common Stockholders (millions):
Income from continuing operations attributable to Phillips 66	$	866		866	1,392		1,392
Income allocated to participating securities	(1		)	—	(1	)	—
Income from continuing operations available to common stockholders	865			866	1,391		1,392
Discontinued operations	706			706	15		15
Net Income available to common stockholders	$	1,571		1,572	1,406		1,407
Weighted-average common shares outstanding (thousands):	580,027			584,053	621,309		625,030
Effect of stock-based compensation	4,026			5,522	3,721		6,258
Weighted-average common shares outstanding—EPS	584,053			589,575	625,030		631,288
Earnings Per Share of Common Stock (dollars):
Income from continuing operations attributable to Phillips 66	$	1.48		1.47	2.23		2.21
Discontinued operations	1.21			1.20	0.02		0.02
Earnings Per Share	$	2.69		2.67	2.25		2.23

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Document and Entity Information	3 Months Ended
	Mar. 31, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	Phillips 66
Entity Central Index Key	0001534701
Trading Symbol	PSX
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding	565,845,802

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Debt

3 Months Ended

Mar. 31, 2014

Debt Disclosure [Abstract]

Debt

Debt

At both March 31, 2014, and December 31, 2013, we had no direct outstanding borrowings under our $4.5 billion revolving credit agreement or our $696 million trade receivables securitization facility. However, as of both March 31, 2014, and December 31, 2013, $51 million in letters of credit had been issued that were supported by our revolving credit agreement. As of both March 31, 2014, and December 31, 2013, $26 million in letters of credit had been issued that were collateralized by trade receivables held by a subsidiary under our trade receivables securitization facility. At March 31, 2014, no amount had been drawn on the $250 million revolving credit agreement entered into by Phillips 66 Partners in the second quarter of 2013. Accordingly, as of March 31, 2014, an aggregate $5.4 billion of total capacity was available under these facilities.

At March 31, 2014, we classified $800 million of long-term debt due within a year as long-term debt, based on our intent to refinance the obligation on a long-term basis and our ability to do so under our revolving credit facility.

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Condensed Consolidating Financial Information (Narrative) (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Condensed Financial Statements, Captions [Line Items]
Senior notes issued by Phillips 66	$ 5,800,000,000
Percentage of ownership in subsidiary	100.00%
Net of provision for income taxes on discontinued operations	5,000,000	8,000,000
All Other Subsidiaries [Member]
Condensed Financial Statements, Captions [Line Items]
Net of provision for income taxes on discontinued operations	$ 5,000,000	$ 8,000,000

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Consolidated Statement of Comprehensive Income (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Statement of Comprehensive Income [Abstract]
Net Income	$ 1,578	$ 1,410
Actuarial gain/loss:
Amortization to net income of net actuarial loss	12	26
Plans sponsored by equity affiliates	3	(13)
Income taxes on defined benefit plans	(5)	(3)
Defined benefit plans, net of tax	10	10
Foreign currency translation adjustments	31	(322)
Income taxes on foreign currency translation adjustments	(1)	4
Foreign currency translation adjustments, net of tax	30	(318)
Other Comprehensive Income (Loss), Net of Tax	40	(308)
Comprehensive Income	1,618	1,102
Less: comprehensive income attributable to noncontrolling interests	6	3
Comprehensive Income Attributable to Phillips 66	$ 1,612	$ 1,099

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Assets Held for Sale or Sold

3 Months Ended

Mar. 31, 2014

Disposal Group, Including Discontinued Operation, Additional Disclosures [Abstract]

Assets Held for Sale or Sold

Assets Held for Sale or Sold

In December 2013, we entered into an agreement to exchange the stock of Phillips Specialty Products Inc. (PSPI), a flow improver business, which was included in our Marketing and Specialties (M&S) segment, for shares of Phillips 66 common stock owned by the other party. Accordingly, as of December 31, 2013, the net assets of PSPI were classified as held for sale and the results of operations of PSPI were reported as discontinued operations.

At December 31, 2013, PSPI had a net carrying value of $193 million, which primarily included $58 million of net properties, plants and equipment (PP&E) and $117 million of allocated goodwill. The carrying amounts of PSPI’s assets and liabilities at December 31, 2013, were reported in the “Prepaid expenses and other current assets” and “Other accruals” lines of our consolidated balance sheet, respectively.

On February 25, 2014, we completed the PSPI share exchange, resulting in the receipt of approximately 17.4 million shares of Phillips 66 common stock, which are held as treasury shares, and the recognition of a before-tax gain of $696 million. At the time of the disposition, PSPI had a net carrying value of $685 million, which primarily included $481 million of cash and cash equivalents, $60 million of net PP&E and $117 million of allocated goodwill. Cash and cash equivalents of $450 million included in PSPI’s net carrying value is reflected as a financing cash outflow in the “Share exchange—PSPI transaction” line of our consolidated statement of cash flows. Revenues, income before-tax and net income from discontinued operations, excluding the recognized before-tax gain of $696 million, were not material for the three-month periods ended March 31, 2014 and 2013.

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Inventories

3 Months Ended

Mar. 31, 2014

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consisted of the following:

	Millions of Dollars
	March 31 2014		December 31 2013
Crude oil and petroleum products	$	5,642	3,093
Materials and supplies	266		261
	$	5,908	3,354

Inventories valued on the last-in, first-out (LIFO) basis totaled $5,522 million and $2,945 million at March 31, 2014, and December 31, 2013, respectively. The estimated excess of current replacement cost over LIFO cost of inventories amounted to approximately $8,200 million and $7,600 million at March 31, 2014, and December 31, 2013, respectively.

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Employee Benefit Plans

3 Months Ended

Mar. 31, 2014

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

Employee Benefit Plans

Pension and Postretirement Plans

The components of net periodic benefit cost for the three months ended March 31, 2014 and 2013, were as follows:

	Millions of Dollars
	Pension Benefits									Other Benefits
	2014					2013				2014		2013
	U.S.			Int’l.		U.S.		Int’l.
Components of Net Periodic Benefit Cost
Three Months Ended March 31
Service cost	$	30		10		31		9		2		2
Interest cost	27			9		23		8		2		2
Expected return on plan assets	(36		)	(9	)	(30	)	(7	)	—		—
Amortization of prior service cost (credit)	1			(1	)	—		—		—		—
Recognized net actuarial loss (gain)	10			3		21		5		(1	)	—
Total net periodic benefit cost	$	32		12		45		15		3		4

During the first three months of 2014, we contributed $162 million to our U.S. plans and $14 million to our international plans. We currently expect to make additional contributions of approximately $60 million in 2014, primarily to our international plans.

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Guarantees

3 Months Ended

Mar. 31, 2014

Guarantees [Abstract]

Guarantees

Guarantees

At March 31, 2014, we were liable for certain contingent obligations under various contractual arrangements as described below. We recognize a liability, at inception, for the fair value of our obligation as a guarantor for newly issued or modified guarantees. Unless the carrying amount of the liability is noted below, we have not recognized a liability either because the guarantees were issued prior to December 31, 2002, or because the fair value of the obligation is immaterial. In addition, unless otherwise stated, we are not currently performing with any significance under the guarantee and expect future performance to be either immaterial or have only a remote chance of occurrence.

Guarantees of Joint Venture Debt

In April 2012, in connection with the Separation, we issued a guarantee for 100 percent of the 8.85% senior notes issued by MSLP in July 1999. At March 31, 2014, the maximum potential amount of future payments to third parties under the guarantee is estimated to be $214 million, which could become payable if MSLP fails to meet its obligations under the senior notes agreement. The senior notes mature in 2019.

Other Guarantees

We have residual value guarantees associated with leases with maximum future potential payments totaling $228 million. We have other guarantees with maximum future potential payment amounts totaling $314 million, which consist primarily of guarantees to fund the short-term cash liquidity deficits of certain joint ventures, guarantees of third parties related to prior asset dispositions, and guarantees of the lease payment obligations of a joint venture. These guarantees generally extend up to 10 years or life of the venture.

Indemnifications

Over the years, we have entered into various agreements to sell ownership interests in certain corporations, joint ventures and assets that gave rise to qualifying indemnifications. Agreements associated with these sales include indemnifications for taxes, litigation, environmental liabilities, permits and licenses, supply arrangements, and employee claims; and real estate indemnity against tenant defaults. The terms of these indemnifications vary greatly. The majority of these indemnifications are related to environmental issues, the term is generally indefinite, and the maximum amount of future payments is generally unlimited. The carrying amount recorded for indemnifications at March 31, 2014, was $241 million. We amortize the indemnification liability over the relevant time period, if one exists, based on the facts and circumstances surrounding each type of indemnity. In cases where the indemnification term is indefinite, we will reverse the liability when we have information the liability is essentially relieved or amortize the liability over an appropriate time period as the fair value of our indemnification exposure declines. Although it is reasonably possible future payments may exceed amounts recorded, due to the nature of the indemnifications, it is not possible to make a reasonable estimate of the maximum potential amount of future payments. Included in the recorded carrying amount were $107 million of environmental accruals for known contamination that were included in asset retirement obligations and accrued environmental costs at March 31, 2014. For additional information about environmental liabilities, see Note 12—Contingencies and Commitments.

Indemnification and Release Agreement

In 2012, we entered into the Indemnification and Release Agreement with ConocoPhillips. This agreement governs the treatment between ConocoPhillips and us of matters relating to indemnification, insurance, litigation responsibility and management, and litigation document sharing and cooperation arising in connection with the Separation. Generally, the agreement provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of our business with us and financial responsibility for the obligations and liabilities of ConocoPhillips’ business with ConocoPhillips. The agreement also establishes procedures for handling claims subject to indemnification and related matters.

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Goodwill

3 Months Ended

Mar. 31, 2014

Goodwill [Abstract]

Goodwill Disclosure [Text Block]

Goodwill

Effective January 1, 2014, we reallocated $52 million of goodwill from the Refining segment to the M&S segment based upon the realignment of certain assets between the reporting units. Goodwill was reassigned to the reporting units using a relative fair value approach. Goodwill impairment testing was completed and no impairment recognition was required. See Note 19—Segment Disclosures and Related Information.

In March 2014, we paid approximately $70 million, net of acquired cash, to acquire our co-venturer's interest in an entity that operates a power and steam generation plant. We provisionally recorded $141 million of net PP&E, $40 million of intangible assets, $39 million of goodwill and $68 million of debt. The goodwill is the result of synergies this acquisition created with one of our refineries. The completion of our acquisition accounting is subject to the finalization of valuations of the assets acquired and liabilities assumed.

See Note 4—Assets Held for Sale or Sold for additional information on goodwill allocated to assets held for sale or sold.

The carrying amount of goodwill was as follows:

	Millions of Dollars
	March 31 2014		December 31 2013
Midstream	$	518	518
Refining	1,912		1,867
Marketing and Specialties	711		711
	$	3,141	3,096

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Contingencies and Commitments (Narrative) (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Contingencies and Commitments (Textual) [Abstract]
Total environmental accrual	$ 488	$ 492
Expected years to incur a substantial amount of expenditures	30 years
Letters of credit issued	1,161
Trade Receivables Securitization Facility [Member]
Contingencies and Commitments (Textual) [Abstract]
Letters of credit issued	26	26
Revolving Credit Facility [Member]
Contingencies and Commitments (Textual) [Abstract]
Letters of credit issued	$ 51	$ 51

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Investments, Loans and Long-Term Receivables

3 Months Ended

Mar. 31, 2014

Equity Method Investments and Joint Ventures [Abstract]

Investments, Loans and Long-Term Receivables

Investments, Loans and Long-Term Receivables

Equity Investments

Summarized 100 percent financial information for WRB Refining LP (WRB) and Chevron Phillips Chemical Company LLC (CPChem) were as follows:

	Millions of Dollars
	Three Months Ended March 31
	2014		2013
Revenues	$	7,998	8,140
Income before income taxes	1,124		1,768
Net income	1,101		1,750

WRB

WRB is a 50-percent-owned business venture with Cenovus Energy Inc. (Cenovus). Cenovus was obligated to contribute $7.5 billion, plus accrued interest, to WRB over a 10-year period that began in 2007. In the first quarter of 2014, Cenovus prepaid its remaining balance under this obligation. As a result, WRB declared a special dividend, which was distributed to the co-venturers in March 2014. Of the $1,232 million that we received, $760 million was considered a return on our investment in WRB (an operating cash inflow), and $472 million was considered a return of our investment in WRB (an investing cash inflow). At March 31, 2014, the book value of our investment in WRB was $2,017 million and our basis difference was $3,511 million.

Other

MSLP owns a delayed coker and related facilities at the Sweeny Refinery. MSLP processes long residue, which is produced from heavy sour crude oil, for a processing fee. Fuel-grade petroleum coke is produced as a by-product and becomes the property of MSLP. Prior to August 28, 2009, MSLP was owned 50/50 by ConocoPhillips and PDVSA. Under the agreements that govern the relationships between the partners, certain defaults by PDVSA with respect to supply of crude oil to the Sweeny Refinery triggered the right to acquire PDVSA’s 50 percent ownership interest in MSLP, which was exercised on August 28, 2009. PDVSA initiated arbitration with the International Chamber of Commerce challenging the exercise of the call right and claiming it was invalid. The arbitral tribunal held hearings on the merits of the dispute in December 2012, and post-hearing briefs were exchanged in March 2013. The arbitral tribunal issued its ruling in April 2014, which upheld the exercise of the call right and the acquisition of the 50 percent ownership interest. PDVSA has a right to appeal the ruling in U.S. district court.  Following the Separation, Phillips 66 generally indemnifies ConocoPhillips for liabilities, if any, arising out of the exercise of the call right or otherwise with respect to the joint venture or the refinery. We continue to use the equity method of accounting for our investment in MSLP.

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Properties, Plants and Equipment

3 Months Ended

Mar. 31, 2014

Property, Plant and Equipment [Abstract]

Properties, Plants and Equipment

Properties, Plants and Equipment

Our investment in PP&E, with the associated accumulated depreciation and amortization (Accum. D&A), was:

	Millions of Dollars
	March 31, 2014				December 31, 2013
	Gross PP&E		Accum. D&A	Net PP&E	Gross PP&E	Accum. D&A	Net PP&E
Midstream	$	3,092	1,122	1,970	2,865	1,104	1,761
Chemicals	—		—	—	—	—	—
Refining	19,372		6,874	12,498	19,191	6,718	12,473
Marketing and Specialties	1,525		753	772	1,395	749	646
Corporate and Other	989		478	511	975	457	518
Discontinued Operations*	—		—	—	—	—	—
	$	24,978	9,227	15,751	24,426	9,028	15,398
* At December 31, 2013, net PP&E of $58 million associated with discontinued operations was classified as current assets.

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Impairments

3 Months Ended

Mar. 31, 2014

Impairment Of Long Lived Assets Abstract [Abstract]

Impairments

Impairments

The three-month periods ended March 31, 2014 and 2013, included the following before-tax impairment charges:

	Millions of Dollars
	Three Months Ended March 31
	2014		2013
Refining	$	1	—
Marketing and Specialties	—		15
Corporate and Other	—		9
	$	1	24

During the first quarter of 2013, we recorded a $15 million held-for-use impairment in our M&S segment, primarily related to PP&E associated with our planned exit from the composite graphite business.

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Derivatives and Financial Instruments (Narrative) (Details)	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Financial instruments and derivative contracts (Textual) [Abstract]
Estimated percentage of derivative contract volume expiring within twelve months	99.00%	99.00%
Payment terms of receivables	30 days or less

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Fair Value Measurements (Summary of Nonrecurring Fair Value Measurements) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Before-tax loss on net properties, plants and equipment (held for use)	$ 27
Fair Value, Measurements, Nonrecurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net properties, plants and equipment (held for use)	22	[1]
Fair Value, Measurements, Nonrecurring [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net properties, plants and equipment (held for use)	$ 22

[1] Represents the fair value at the time of the impairment.

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Derivatives and Financial Instruments (Summary of Outstanding Commodity Derivative Contracts) (Details)	Mar. 31, 2014 MMBbls	Dec. 31, 2013 MMBbls
Commodity
Crude oil, refined products and NGL (millions of barrels)	(24)	(9)

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Properties, Plants and Equipment (Tables)

3 Months Ended

Mar. 31, 2014

Property, Plant and Equipment [Abstract]

Properties, Plants and Equipment with Associated Accumulated Depreciation and Amortization

Our investment in PP&E, with the associated accumulated depreciation and amortization (Accum. D&A), was:

	Millions of Dollars
	March 31, 2014				December 31, 2013
	Gross PP&E		Accum. D&A	Net PP&E	Gross PP&E	Accum. D&A	Net PP&E
Midstream	$	3,092	1,122	1,970	2,865	1,104	1,761
Chemicals	—		—	—	—	—	—
Refining	19,372		6,874	12,498	19,191	6,718	12,473
Marketing and Specialties	1,525		753	772	1,395	749	646
Corporate and Other	989		478	511	975	457	518
Discontinued Operations*	—		—	—	—	—	—
	$	24,978	9,227	15,751	24,426	9,028	15,398
* At December 31, 2013, net PP&E of $58 million associated with discontinued operations was classified as current assets.

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Investments, Loans and Long-Term Receivables (Narrative) (Details) (USD $)	1 Months Ended	2 Months Ended				3 Months Ended
	Mar. 31, 2014 WRB Refining LP [Member]	Mar. 01, 2014 WRB Refining LP [Member]	Aug. 31, 2009 Merey Sweeny [Member]	Aug. 28, 2009 Merey Sweeny [Member]	Aug. 27, 2009 Petroleos De Venezuela S.A. (PDVSA) [Member]	Mar. 31, 2014 Cenovus Energy Inc [Member] WRB Refining LP [Member]	Aug. 27, 2009 Conocophillips [Member]
Schedule of Equity Method Investments [Line Items]
Contribution to WRB Cenovus was obligated to make						$ 7,500,000,000
Total distribution received	1,232,000,000
Dividend considered an operating cash inflow	760,000,000
Dividend considered an investing cash inflow		472,000,000
Book value of our investment in WRB	2,017,000,000
Basis difference in book value of our investment in WRB	$ 3,511,000,000
Percentage of ownership interest							50.00%
Percentage of equity interest of others					50.00%
Additional ownership interest acquired			50.00%	50.00%

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Derivatives and Financial Instruments

3 Months Ended

Mar. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Financial Instruments

Derivatives and Financial Instruments

Derivative Instruments

We use financial and commodity-based derivative contracts to manage exposures to fluctuations in foreign currency exchange rates and commodity prices or to capture market opportunities. Since we are not currently using cash-flow hedge accounting, all gains and losses, realized or unrealized, from commodity derivative contracts have been recognized in the consolidated statement of income. Gains and losses from derivative contracts held for trading not directly related to our physical business, whether realized or unrealized, have been reported net in “Other income” on our consolidated statement of income. Cash flows from all our derivative activity for the periods presented appear in the operating section of the consolidated statement of cash flows.

Purchase and sales contracts with fixed minimum notional volumes for commodities that are readily convertible to cash (e.g., crude oil and gasoline) are recorded on the balance sheet as derivatives unless the contracts are eligible for, and we elect, the normal purchases and normal sales exception (i.e., contracts to purchase or sell quantities we expect to use or sell over a reasonable period in the normal course of business). We generally apply this normal purchases and normal sales exception to eligible crude oil, refined product, natural gas and power commodity purchase and sales contracts; however, we may elect not to apply this exception (e.g., when another derivative instrument will be used to mitigate the risk of the purchase or sales contract but hedge accounting will not be applied, in which case both the purchase or sales contract and the derivative contract mitigating the resulting risk will be recorded on the balance sheet at fair value).

Our derivative instruments are held at fair value on our consolidated balance sheet. For further information on the fair value of derivatives, see Note 14—Fair Value Measurements.

Commodity Derivative Contracts—We operate in the worldwide crude oil, refined products, natural gas liquids (NGL), natural gas and electric power markets and are exposed to fluctuations in the prices for these commodities. These fluctuations can affect our revenues, as well as the cost of operating, investing and financing activities. Generally, our policy is to remain exposed to the market prices of commodities; however, we use futures, forwards, swaps and options in various markets to balance physical systems, meet customer needs, manage price exposures on specific transactions, and do a limited, immaterial amount of trading not directly related to our physical business. We also use the market knowledge gained from these activities to capture market opportunities such as moving physical commodities to more profitable locations, storing commodities to capture seasonal or time premiums, and blending commodities to capture quality upgrades. Derivatives may be used to optimize these activities, which may move our risk profile away from market average prices.

The following table indicates the balance sheet line items that include the fair values of commodity derivative assets and liabilities presented net (i.e., commodity derivative assets and liabilities with the same counterparty are netted where the right of setoff exists); however, the balances in the following table are presented gross. For information on the impact of counterparty netting and collateral netting, see Note 14—Fair Value Measurements.

	Millions of Dollars
	March 31 2014		December 31 2013
Assets
Accounts and notes receivable	$	—	2
Prepaid expenses and other current assets	486		592
Other assets	1		2
Liabilities
Other accruals	472		633
Other liabilities and deferred credits	1		1

Hedge accounting has not been used for any item in the table.

The gains (losses) from commodity derivatives incurred, and the line items where they appear on our consolidated statement of income, were:

	Millions of Dollars
	Three Months Ended March 31
	2014		2013
Sales and other operating revenues	$	57	(6	)
Equity in earnings of affiliates	—		2
Other income	14		3
Purchased crude oil and products	2		89

Hedge accounting has not been used for any item in the table.

The following table summarizes our material net exposures resulting from outstanding commodity derivative contracts. These financial and physical derivative contracts are primarily used to manage price exposure on our underlying operations. The underlying exposures may be from non-derivative positions such as inventory volumes. Financial derivative contracts may also offset physical derivative contracts, such as forward sales contracts. As of March 31, 2014, and December 31, 2013, the percentage of our derivative contract volume expiring within the next 12 months was over 99 percent for both periods.

	Open Position Long/(Short)
	March 31 2014		December 31 2013
Commodity
Crude oil, refined products and NGL (millions of barrels)	(24	)	(9	)

Credit Risk

Financial instruments potentially exposed to concentrations of credit risk consist primarily of over-the-counter (OTC) derivative contracts and trade receivables.

The credit risk from our OTC derivative contracts, such as forwards and swaps, derives from the counterparty to the transaction. Individual counterparty exposure is managed within predetermined credit limits and includes the use of cash-call margins when appropriate, thereby reducing the risk of significant nonperformance. We also use futures, swaps and option contracts that have a negligible credit risk because these trades are cleared with an exchange clearinghouse and subject to mandatory margin requirements until settled; however, we are exposed to the credit risk of those exchange brokers for receivables arising from daily margin cash calls, as well as for cash deposited to meet initial margin requirements.

Our trade receivables result primarily from the sale of products from, or related to, our refinery operations and reflect a broad national and international customer base, which limits our exposure to concentrations of credit risk. The majority of these receivables have payment terms of 30 days or less. We continually monitor this exposure and the creditworthiness of the counterparties and recognize bad debt expense based on historical write-off experience or specific counterparty collectability. Generally, we do not require collateral to limit the exposure to loss; however, we will sometimes use letters of credit, prepayments, and master netting arrangements to mitigate credit risk with counterparties that both buy from and sell to us, as these agreements permit the amounts owed by us or owed to others to be offset against amounts due us.

Certain of our derivative instruments contain provisions that require us to post collateral if the derivative exposure exceeds a threshold amount. We have contracts with fixed threshold amounts and other contracts with variable threshold amounts that are contingent on our credit rating. The variable threshold amounts typically decline for lower credit ratings, while both the variable and fixed threshold amounts typically revert to zero if our credit ratings fall below investment grade. Cash is the primary collateral in all contracts; however, many contracts also permit us to post letters of credit as collateral.

The aggregate fair values of all derivative instruments with such credit-risk-related contingent features that were in a liability position were not material at March 31, 2014, or December 31, 2013.

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Related Party Transactions

3 Months Ended

Mar. 31, 2014

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Significant transactions with related parties were:

	Millions of Dollars
	Three Months Ended March 31
	2014		2013
Operating revenues and other income (a)	$	2,067	1,749
Purchases (b)	3,991		4,287
Operating expenses and selling, general and administrative expenses (c)	35		24
Interest expense (d)	2		2

(a) We sold crude oil to the Malaysian Refining Company Sdn. Bdh. (MRC). NGL and other petrochemical feedstocks, along with solvents, were sold to CPChem, and gas oil and hydrogen feedstocks were sold to Excel. Certain feedstocks and intermediate products were sold to WRB. We also acted as agent for WRB in supplying other crude oil and feedstocks, wherein the transactional amounts did not impact operating revenues. In addition, we charged several of our affiliates, including CPChem and MSLP, for the use of common facilities, such as steam generators, waste and water treaters, and warehouse facilities.

(b) We purchased refined products from WRB. We also acted as agent for WRB in distributing asphalt and solvents, wherein the transactional amounts did not impact purchases. We purchased natural gas and NGL from DCP Midstream, LLC (DCP Midstream) and CPChem for use in our refinery processes and other feedstocks from various affiliates. We purchased refined products from MRC. We also paid fees to various pipeline equity companies for transporting finished refined products. In addition, we paid a price upgrade to MSLP for heavy crude processing. We purchased base oils and fuel products from Excel for use in our refining and specialty businesses.

(c) We paid utility and processing fees to various affiliates.

(d) We incurred interest expense on a note payable to MSLP.

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Assets Held for Sale or Sold (Narrative) (Details) (USD $) In Millions, except Share data in Thousands, unless otherwise specified	3 Months Ended		2 Months Ended	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Feb. 25, 2014 Phillips Specialty Products Inc [Member] Marketing and Specialties [Member]	Mar. 31, 2014 Phillips Specialty Products Inc [Member] Marketing and Specialties [Member]	Dec. 31, 2013 Phillips Specialty Products Inc [Member] Marketing and Specialties [Member]
Assets Held for Sale or Sold (Narrative) [Abstract]
Carrying value			$ 685		$ 193
Net property, plant and equipment included in net carrying value of PSPI			60		58
Allocated goodwill included in net carrying value			117		117
Share exchange—PSPI transaction	(450)			450
Shares of Phillips 66 common stock received in exchange		6,403	17,400
Before tax gain			696
Cash and cash equivalents included in carrying value			$ 481

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Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2014

Equity [Abstract]

Summary of Changes in and Reclassifications Out of Accumulated Other Comprehensive Income (Loss) by Component

The following table depicts changes in accumulated other comprehensive income (loss) by component, as well as detail on reclassifications out of accumulated other comprehensive income (loss):

	Millions of Dollars
	Defined Benefit Plans			Foreign Currency Translation		Hedging		Accumulated Other Comprehensive Income (Loss)
December 31, 2012	$	(778	)	466		(2	)	(314	)
Other comprehensive loss before reclassifications	(8		)	(318	)	—		(326	)
Amounts reclassified from accumulated other comprehensive income (loss)*
Amortization of defined benefit plan items**
Actuarial losses	18			—		—		18
Net current period other comprehensive income (loss)	10			(318	)	—		(308	)
March 31, 2013	$	(768	)	148		(2	)	(622	)
December 31, 2013	$	(404	)	443		(2	)	37
Other comprehensive income before reclassifications	2			30		—		32
Amounts reclassified from accumulated other comprehensive income (loss)*
Amortization of defined benefit plan items**
Actuarial losses	8			—		—		8
Net current period other comprehensive income	10			30		—		40
March 31, 2014	$	(394	)	473		(2	)	77

* There were no significant reclassifications related to foreign currency translation or hedging.

** These accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit cost (see Note 15—Employee Benefit Plans, for additional information).

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Consolidated Balance Sheet (USD $) In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Assets
Cash and cash equivalents	$ 5,326	$ 5,400
Accounts and notes receivable (net of allowances of $47 million in 2014 and 2013)	7,298	7,900
Accounts and notes receivable - related parties	1,822	1,732
Inventories	5,908	3,354
Prepaid expenses and other current assets	705	851
Total Current Assets	21,059	19,237
Investments and long-term receivables	10,001	11,220
Net properties, plants and equipment	15,751	15,398
Goodwill	3,141	3,096
Intangibles	737	698
Other assets	158	149
Total Assets	50,847	49,798
Liabilities
Accounts payable	11,390	9,948
Accounts payable - related parties	1,233	1,142
Short-term debt	40	24
Accrued income and other taxes	1,591	872
Employee benefit obligations	232	476
Other accruals	678	469
Total Current Liabilities	15,164	12,931
Long-term debt	6,177	6,131
Asset retirement obligations and accrued environmental costs	697	700
Deferred income taxes	5,692	6,125
Employee benefit obligations	793	921
Other liabilities and deferred credits	495	598
Total Liabilities	29,018	27,406
Equity
Common stock (2,500,000,000 shares authorized at $.01 par value) Issued (2014—635,784,906 shares; 2013—634,285,955 shares)	6	6
Capital in excess of par	18,932	18,887
Treasury stock (at cost: 2014—69,939,104 shares; 2013—44,106,380 shares)	(4,592)	(2,602)
Retained earnings	6,962	5,622
Accumulated other comprehensive loss	77	37
Total Stockholders' Equity	21,385	21,950
Noncontrolling interests	444	442
Total Equity	21,829	22,392
Total Liabilities and Equity	$ 50,847	$ 49,798

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Variable Interest Entities (VIEs)

3 Months Ended

Mar. 31, 2014

Variable Interest Entities [Abstract]

Variable Interest Entities (VIEs)

Variable Interest Entities (VIEs)

In 2013, we formed Phillips 66 Partners LP, a master limited partnership, to own, operate, develop and acquire primarily fee-based crude oil, refined petroleum product and natural gas liquids pipelines and terminals, as well as other transportation and midstream assets. We consolidate Phillips 66 Partners as we determined that Phillips 66 Partners is a VIE and we are the primary beneficiary. As general partner, we have the ability to control its financial interests, as well as the ability to direct the activities of Phillip 66 Partners that most significantly impact its economic performance. See Note 21—Phillips 66 Partners LP for additional information.

We hold significant variable interests in VIEs that have not been consolidated because we are not considered the primary beneficiary. Information on these VIEs follows:

Merey Sweeny, L.P. (MSLP) is a limited partnership that owns a delayed coker and related facilities at the Sweeny Refinery. As discussed more fully in Note 5—Investments, Loans and Long-Term Receivables, in August 2009, a call right was exercised to acquire the 50 percent ownership interest in MSLP of the co-venturer, Petróleos de Venezuela S.A. (PDVSA). That exercise was challenged, and the dispute has been arbitrated. In April 2014, the arbitral tribunal upheld the exercise of the call right and the acquisition of the 50 percent ownership interest. PDVSA has a right to appeal the ruling in U.S. district court. Because an appeal may be filed by PDVSA, we continue to use the equity method of accounting for MSLP, and the VIE analysis below is based on the ownership and governance structure in place prior to the exercise of the call right. MSLP is a VIE because, in securing lender consents in connection with our separation from ConocoPhillips in 2012 (the Separation), we provided a 100 percent debt guarantee to the lender of the 8.85% senior notes issued by MSLP. PDVSA did not participate in the debt guarantee. In our VIE assessment, this disproportionate debt guarantee, plus other liquidity support provided jointly by us and PDVSA independently of equity ownership, results in MSLP not being exposed to all potential losses. We have determined we are not the primary beneficiary while our call exercise is in dispute because under the partnership agreement the co-venturers jointly direct the activities of MSLP that most significantly impact economic performance. At March 31, 2014, our maximum exposure to loss represented the outstanding debt principal balance of $214 million and our investment of $116 million.

We have a 50 percent ownership interest with a 50 percent governance interest in Excel Paralubes (Excel). Excel is a VIE because, in securing lender consents in connection with the Separation, ConocoPhillips provided a 50 percent debt guarantee to the lender of the 7.43% senior secured bonds issued by Excel. We provided a full indemnity to ConocoPhillips for this debt guarantee. Our co-venturer did not participate in the debt guarantee. In our assessment of the VIE, this debt guarantee, plus other liquidity support up to $60 million provided jointly by us and our co-venturer independently of equity ownership, results in Excel not being exposed to all potential losses. We have determined we are not the primary beneficiary because we and our co-venturer jointly direct the activities of Excel that most significantly impact economic performance. We continue to use equity method accounting for this investment. At March 31, 2014, our maximum exposure to loss represented 50 percent of the outstanding debt principal balance of $116 million, or

$58 million, plus half of the $60 million liquidity support, or $30 million. The book value of our investment in Excel at March 31, 2014, was $128 million.

In 2013, we entered into a multi-year consignment fuels agreement with a marketer who we currently support with debt guarantees. Pursuant to the consignment fuels agreement, we own the fuels inventory, control the fuel marketing at each site and pay a fixed monthly fee to the marketer. We determined the consignment fuels agreement and the debt guarantees together create a variable interest in the marketer, with the marketer not being exposed to all potential losses. We determined we are not the primary beneficiary because we do not have the power to direct the activities that most significantly impact the economic performance of the marketer or its service stations. We have no ownership interest in the marketer. At March 31, 2014, our maximum exposure to loss represented the outstanding debt balance of $190 million and the fixed annual contractual payments under the consignment fuels agreement of approximately $80 million.

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Debt (Narrative) (Details) (USD $)	3 Months Ended			3 Months Ended	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2014 Revolving Credit Facility [Member]	Dec. 31, 2013 Revolving Credit Facility [Member]	Mar. 31, 2014 Trade Receivables Securitization Facility [Member]	Dec. 31, 2012 Trade Receivables Securitization Facility [Member]	Dec. 31, 2013 Trade Receivables Securitization Facility [Member]	Mar. 31, 2014 Phillips 66 Partners LP [Member] Revolving Credit Facility [Member]	Jun. 30, 2013 Phillips 66 Partners LP [Member] Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Amount of direct outstanding borrowings under revolving credit agreement		$ 0	$ 0				$ 0
Amount of direct outstanding borrowings under trade receivables securitization				0	0
Borrowing capacity under revolving credit agreement		4,500,000,000						250,000,000
Borrowing capacity under trade receivables securitization facility				696,000,000
Letters of credit issued	1,161,000,000	51,000,000	51,000,000	26,000,000		26,000,000
Aggregate total capacity available under these facilities	5,400,000,000
Debt classified as long-term debt	$ 800,000,000

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Employee Benefit Plans (Narrative) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
United States Pension Plans of U S Entity, Defined Benefit [Member]
Employee Benefit Plans (Textual) [Abstract]
Company contributions to plans	$ 162
Foreign Pension Plans, Defined Benefit [Member]
Employee Benefit Plans (Textual) [Abstract]
Company contributions to plans	14
Additional contributions expected to be made in 2014	$ 60

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Segment Disclosures and Related Information

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Segment Disclosures and Related Information

Segment Disclosures and Related Information

Our operating segments are:

1) Midstream—Gathers, processes, transports and markets natural gas; and transports, fractionates and markets NGL in the United States. In addition, this segment transports crude oil and other feedstocks to our refineries and other locations, and delivers refined and specialty products to market. The Midstream segment includes, among other businesses, our 50 percent equity investment in DCP Midstream and our investment in Phillips 66 Partners LP.

2) Chemicals—Manufactures and markets petrochemicals and plastics on a worldwide basis. The Chemicals segment consists of our 50 percent equity investment in CPChem.

3) Refining—Buys, sells and refines crude oil and other feedstocks at 15 refineries, mainly in the United States, Europe and Asia.

4) Marketing and Specialties—Purchases for resale and markets refined products, mainly in the United States and Europe. In addition, this segment includes the manufacturing and marketing of specialty products (such as base oils and lubricants), as well as power generation operations.

Corporate and Other includes general corporate overhead, interest expense, our investments in new technologies and various other corporate activities. Corporate assets include all cash and cash equivalents.

We evaluate performance and allocate resources based on net income attributable to Phillips 66. Intersegment sales are at prices that approximate market.

Effective January 1, 2014, we changed the organizational structure of the internal financial information reviewed by our chief executive officer, and determined this resulted in a change in the composition of our operating segments. The primary effects of this reporting reorganization were:

• We moved two of our equity investments, Excel and Jupiter Sulphur, LLC, as well as the commission revenues related to needle and anode coke, polypropylene and solvents, from the Refining segment to the M&S segment.

• We moved several refining logistics projects from the Refining segment to the Midstream segment.

The new segment alignment is presented for the three-month period ended March 31, 2014, with the prior periods recast for comparability.

Analysis of Results by Operating Segment

	Millions of Dollars
	Three Months Ended March 31
	2014			2013
Sales and Other Operating Revenues
Midstream
Total sales	$	2,155		1,628
Intersegment eliminations	(292		)	(232	)
Total Midstream	1,863			1,396
Chemicals	2			2
Refining
Total sales	29,215			29,762
Intersegment eliminations	(17,558		)	(17,857	)
Total Refining	11,657			11,905
Marketing and Specialties
Total sales	27,046			28,180
Intersegment eliminations	(292		)	(278	)
Total Marketing and Specialties	26,754			27,902
Corporate and Other	7			6
Consolidated sales and other operating revenues	$	40,283		41,211
Net Income (Loss) Attributable to Phillips 66
Midstream	$	188		111
Chemicals	316			282
Refining	306			904
Marketing and Specialties	137			190
Corporate and Other	(81		)	(95	)
Discontinued operations	706			15
Consolidated net income attributable to Phillips 66	$	1,572		1,407

	Millions of Dollars
	March 31 2014		December 31 2013
Total Assets
Midstream	$	5,379	5,485
Chemicals	4,689		4,377
Refining	27,262		26,046
Marketing and Specialties	7,335		7,331
Corporate and Other	6,182		6,348
Discontinued operations	—		211
Consolidated total assets	$	50,847	49,798

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Segment Disclosures and Related Information (Summary of Sales and Other Operating Revenues, Net Income (Loss) Attributable to Phillips 66 and Total Assets by Operating Segment) (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013		Dec. 31, 2013
Analysis of results by operating segment
Sales and other operating revenues	$ 40,283	[1]	$ 41,211	[1]
Net Income (Loss) Attributable to Phillips 66	1,572		1,407
Analysis of results of assets by operating segment
Total Assets	50,847				49,798
Midstream [Member]
Analysis of results by operating segment
Sales and other operating revenues	1,863		1,396
Net Income (Loss) Attributable to Phillips 66	188		111
Analysis of results of assets by operating segment
Total Assets	5,379				5,485
Chemicals [Member]
Analysis of results by operating segment
Sales and other operating revenues	2		2
Net Income (Loss) Attributable to Phillips 66	316		282
Analysis of results of assets by operating segment
Total Assets	4,689				4,377
Refining [Member]
Analysis of results by operating segment
Sales and other operating revenues	11,657		11,905
Net Income (Loss) Attributable to Phillips 66	306		904
Analysis of results of assets by operating segment
Total Assets	27,262				26,046
Marketing and Specialties [Member]
Analysis of results by operating segment
Sales and other operating revenues	26,754		27,902
Net Income (Loss) Attributable to Phillips 66	137		190
Analysis of results of assets by operating segment
Total Assets	7,335				7,331
Corporate and Other [Member]
Analysis of results by operating segment
Sales and other operating revenues	7		6
Net Income (Loss) Attributable to Phillips 66	(81)		(95)
Analysis of results of assets by operating segment
Total Assets	6,182				6,348
Operating Segments [Member] | Midstream [Member]
Analysis of results by operating segment
Sales and other operating revenues	2,155		1,628
Operating Segments [Member] | Refining [Member]
Analysis of results by operating segment
Sales and other operating revenues	29,215		29,762
Operating Segments [Member] | Marketing and Specialties [Member]
Analysis of results by operating segment
Sales and other operating revenues	27,046		28,180
Intersegment Eliminations [Member] | Midstream [Member]
Analysis of results by operating segment
Sales and other operating revenues	(292)		(232)
Intersegment Eliminations [Member] | Refining [Member]
Analysis of results by operating segment
Sales and other operating revenues	(17,558)		(17,857)
Intersegment Eliminations [Member] | Marketing and Specialties [Member]
Analysis of results by operating segment
Sales and other operating revenues	(292)		(278)
Discontinued Operations [Member]
Analysis of results by operating segment
Net Income (Loss) Attributable to Phillips 66	706		15
Analysis of results of assets by operating segment
Discontinued operations	$ 0				$ 211

[1] Includes excise taxes on petroleum products sales: $3,522 million, $3,258 million

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Derivatives and Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Fair Value of Commodity Derivative Assets and Liabilities and Gains (Losses) from Derivative Contracts

The following table indicates the balance sheet line items that include the fair values of commodity derivative assets and liabilities presented net (i.e., commodity derivative assets and liabilities with the same counterparty are netted where the right of setoff exists); however, the balances in the following table are presented gross. For information on the impact of counterparty netting and collateral netting, see Note 14—Fair Value Measurements.

	Millions of Dollars
	March 31 2014		December 31 2013
Assets
Accounts and notes receivable	$	—	2
Prepaid expenses and other current assets	486		592
Other assets	1		2
Liabilities
Other accruals	472		633
Other liabilities and deferred credits	1		1

Hedge accounting has not been used for any item in the table.

The gains (losses) from commodity derivatives incurred, and the line items where they appear on our consolidated statement of income, were:

	Millions of Dollars
	Three Months Ended March 31
	2014		2013
Sales and other operating revenues	$	57	(6	)
Equity in earnings of affiliates	—		2
Other income	14		3
Purchased crude oil and products	2		89

Hedge accounting has not been used for any item in the table.

Summary of Material Net Exposures and Notional Amount of Derivative Contracts

	Open Position Long/(Short)
	March 31 2014		December 31 2013
Commodity
Crude oil, refined products and NGL (millions of barrels)	(24	)	(9	)

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Contingencies and Commitments

3 Months Ended

Mar. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Contingencies and Commitments

Contingencies and Commitments

A number of lawsuits involving a variety of claims that arose in the ordinary course of business have been filed against us or are subject to indemnifications provided by us. We also may be required to remove or mitigate the effects on the environment of the placement, storage, disposal or release of certain chemical, mineral and petroleum substances at various active and inactive sites. We regularly assess the need for accounting recognition or disclosure of these contingencies. In the case of all known contingencies (other than those related to income taxes), we accrue a liability when the loss is probable and the amount is reasonably estimable. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. We do not reduce these liabilities for potential insurance or third-party recoveries. If applicable, we record receivables for probable insurance or other third-party recoveries. In the case of income-tax-related contingencies, we use a cumulative probability-weighted loss accrual in cases where sustaining a tax position is less than certain.

Based on currently available information, we believe it is remote that future costs related to known contingent liability exposures will exceed current accruals by an amount that would have a material adverse impact on our consolidated financial statements. As we learn new facts concerning contingencies, we reassess our position both with respect to accrued liabilities and other potential exposures. Estimates particularly sensitive to future changes include contingent liabilities recorded for environmental remediation, tax and legal matters. Estimated future environmental remediation costs are subject to change due to such factors as the uncertain magnitude of cleanup costs, the unknown time and extent of such remedial actions that may be required, and the determination of our liability in proportion to that of other responsible parties. Estimated future costs related to tax and legal matters are subject to change as events evolve and as additional information becomes available during the administrative and litigation processes.

Environmental

We are subject to international, federal, state and local environmental laws and regulations. When we prepare our consolidated financial statements, we record accruals for environmental liabilities based on management’s best estimates, using all information available at the time. We measure estimates and base liabilities on currently available facts, existing technology, and presently enacted laws and regulations, taking into account stakeholder and business considerations. When measuring environmental liabilities, we also consider our prior experience in remediation of contaminated sites, other companies’ cleanup experience, and data released by the U.S. Environmental Protection Agency (EPA) or other organizations. We consider unasserted claims in our determination of environmental liabilities, and we accrue them in the period they are both probable and reasonably estimable.

Although liability of those potentially responsible for environmental remediation costs is generally joint and several for federal sites and frequently so for state sites, we are usually only one of many companies alleged to have liability at a particular site. Due to the joint and several liabilities, we could be responsible for all cleanup costs related to any site at which we have been designated as a potentially responsible party. We have been successful to date in sharing cleanup costs with other financially sound companies. Many of the sites at which we are potentially responsible are still under investigation by the EPA or the state agencies concerned. Prior to actual cleanup, those potentially responsible normally assess the site conditions, apportion responsibility and determine the appropriate remediation. In some instances, we may have no liability or may attain a settlement of liability. Where it appears that other potentially responsible parties may be financially unable to bear their proportional share, we consider this inability in estimating our potential liability, and we adjust our accruals accordingly. As a result of various acquisitions in the past, we assumed certain environmental obligations. Some of these environmental obligations are mitigated by indemnifications made by others for our benefit and some of the indemnifications are subject to dollar and time limits.

We are currently participating in environmental assessments and cleanups at numerous federal Superfund and comparable state sites. After an assessment of environmental exposures for cleanup and other costs, we make accruals on an undiscounted basis (except those pertaining to sites acquired in a purchase business combination, which we record on a discounted basis) for planned investigation and remediation activities for sites where it is probable future costs will be incurred and these costs can be reasonably estimated. At March 31, 2014, our consolidated balance sheet included a total environmental accrual of $488 million, compared with $492 million at December 31, 2013. We expect to incur a substantial amount of these expenditures within the next 30 years. We have not reduced these accruals for possible insurance recoveries. In the future, we may be involved in additional environmental assessments, cleanups and proceedings.

Legal Proceedings

Our legal organization applies its knowledge, experience and professional judgment to the specific characteristics of our cases, employing a litigation management process to manage and monitor the legal proceedings against us. Our process facilitates the early evaluation and quantification of potential exposures in individual cases. This process also enables us to track those cases that have been scheduled for trial and/or mediation. Based on professional judgment and experience in using these litigation management tools and available information about current developments in all our cases, our legal organization regularly assesses the adequacy of current accruals and determines if adjustment of existing accruals, or establishment of new accruals, is required.

Other Contingencies

We have contingent liabilities resulting from throughput agreements with pipeline and processing companies not associated with financing arrangements. Under these agreements, we may be required to provide any such company with additional funds through advances and penalties for fees related to throughput capacity not utilized.

At March 31, 2014, we had performance obligations secured by letters of credit of $1,161 million (of which, $26 million were issued under the trade receivables securitization facility, $51 million were issued under the provisions of our revolving credit facility, and the remainder were issued as direct bank letters of credit) related to various purchase and other commitments incident to the ordinary conduct of business.