Crude Oil ( ) Brent Crude ( ) Natural Gas ( ) S&P 500 ( ) PHLX Oil ( )

HOUSTON–(BUSINESS WIRE)–

Phillips 66 (PSX) announces its 2016 capital budget of $3.6 billion, excluding Phillips 66 Partners’ capital program. The board of directors of Phillips 66 also approved a $2.0 billion increase to the company’s share repurchase program.

“The 2016 capital budget will fund Midstream growth and enhance returns in Refining,” said chairman and CEO Greg Garland. “Cash from operating activities, our MLP and a strong balance sheet allow us to fund business growth while returning capital to shareholders.”

Excluding Phillips 66 Partners’ capital spending, Phillips 66 plans to invest $2.0 billion in its Midstream business lines. In Natural Gas Liquids (NGL), the company continues construction of the 4.4 million-barrel-per-month Freeport LPG Export Terminal on the U.S. Gulf Coast, with completion expected in the second half of 2016. In addition, the budget includes spending associated with expansion of the Sweeny NGL midstream hub.

In Transportation, the company is investing in the new DAPL and ETCOP pipeline projects to move crude oil from the Bakken production area of North Dakota to market centers throughout the United States. Storage capacity is being added at the Beaumont Terminal in Nederland, Texas, and the company is investing in the Bayou Bridge pipeline project to move crude oil from Texas to Louisiana markets.

Phillips 66 plans $1.2 billion of capital expenditures in Refining, with approximately 70 percent to be invested in reliability, safety and environmental projects, including compliance with the new Tier 3 gasoline specifications. Discretionary Refining capital of about $400 million will improve product yields and lower feedstock costs. These investments include a modernization of the FCC at Bayway, and an upgrade of the vacuum tower at Billings.

In Marketing and Specialties, the company plans to invest about $135 million of growth and sustaining capital. This furthers Phillips 66’s plans to expand and enhance its fuel marketing business, including new retail sites in Europe.

Capital spending plans for 2016 for Phillips 66 Partners and for self-funded joint ventures DCP Midstream, Chevron Phillips Chemical Company, and WRB Refining will be announced later this year.

“Shareholder distributions are important to value creation,” said Garland. “During 2016, we plan to increase regular dividends while continuing to buy back PSX shares. Since 2012, we have increased quarterly dividends by 180 percent while reducing share count by close to 15 percent.”

The Phillips 66 Board of Directors has authorized an additional $2 billion for share repurchase, bringing total authorizations to $9 billion. Shares 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. The company may commence, suspend or discontinue purchases of common stock under this authorization at any time or periodically without prior notice. Phillips 66 anticipates funding the repurchases primarily with available cash. Shares of stock repurchased will be held as treasury shares.

$ Millions
Sustaining

Capital

Growth

Capital

Capital

Budget

Phillips 66

Midstream (1)

Chemicals

Refining

Marketing and Specialties

Corporate and Other

213

833

57

180

1,819

384

80

2,032

1,217

137

180

1,283 2,283 3,566
(1) Excludes Phillips 66 Partners.

About Phillips 66

Phillips 66 is a diversified energy manufacturing and logistics company. With a portfolio of Midstream, Chemicals, Refining, and Marketing and Specialties businesses, the company processes, transports, stores and markets fuels and products globally. Phillips 66 Partners, the company’s master limited partnership, is an integral asset in the portfolio. Headquartered in Houston, the company has 14,000 employees committed to safety and operating excellence. Phillips 66 had $50 billion of assets as of June 30, 2015. For more information, visit www.phillips66.com or follow us on Twitter @Phillips66Co.