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    Phillips 66 Executives Discuss Strategy at Inaugural Analyst Meeting

    Portion of transportation assets to go toward forming a midstream master limited partnership.

    NEW YORK -- Phillips 66 held its inaugural Analyst Meeting this morning in New York, where company executives updated investors and analysts on its plans to enhance returns, deliver profitable growth and increase distributions to shareholders.

    Leaders of the Houston-based company also discussed its intent to “capitalize on the North American oil and gas production revolution” through the formation of a master limited partnership (MLP) and a new $3.7-billion capital investment program.

    Phillips 66 plans to contribute a portion of its transportation assets to form the midstream MLP. The company is currently evaluating assets for inclusion. Certain product and crude pipelines and terminals, rail cars and other rail infrastructure, as well as natural gas liquid assets, may be included.

    A registration statement for an initial public offering (IPO) is expected to be filed with the Securities and Exchange Commission (SEC) during the second quarter of 2013. Phillips 66 anticipates selling a minority interest in the MLP in an IPO in the second half of 2013, subject to market conditions and final approval by its board of directors. The company expects the offering to raise approximately $300 million to $400 million of gross cash proceeds.

    "We expect to use the master limited partnership as an efficient vehicle to fund growth investments in the transportation and midstream sectors," stated Phillips 66 Chairman and CEO Greg Garland. "We believe the proposed MLP will enable us to enhance value for our shareholders and increase the transparency of our business."

    During today’s Analyst Meeting, Tim Taylor, executive vice president, commercial, marketing, transportation and business development, also discussed the growing value of Phillips 66 and the state of the company in various geographic regions.

    "Our branded marketing is the strongest in the central and western part of the U.S.," Taylor said, which "reflects the more isolated nature of the market."

    In contrast, the Gulf Coast and East Coast have very liquid markets that do not have a need for nearly as much branded presence, so the company’s channels in those areas shift to wholesale marketing and commercial opportunities, according to Taylor. In particular, Phillips 66 sees more opportunity to increase exports of products.

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