Policy

Employee Benefit Plans

Shared Pension and Postretirement Plans

Prior to the Separation, certain of our U.S. and U.K. employees participated in defined benefit pension plans and postretirement benefit plans (Shared Plans) sponsored by ConocoPhillips, which included participants of other ConocoPhillips subsidiaries. Prior to the Separation, we accounted for such Shared Plans as multiemployer benefit plans. Accordingly, we did not record an asset or liability to recognize the funded status of the Shared Plans on our consolidated balance sheet until the Separation. At the Separation, the assets and liabilities of these Shared Plans, which were allocable to Phillips 66 employees, were transferred to Phillips 66. Plan assets of $2,056 million, benefit obligations of $3,060 million and $869 million of accumulated other comprehensive loss ($540 million, net of tax) were recorded in 2012 for the plans transferred to us.

Pension and Postretirement Plans

The following table provides a reconciliation of the projected benefit obligations and plan assets for our pension plans and accumulated benefit obligations for our other postretirement benefit plans:



	Millions of Dollars
	Pension Benefits									Other Benefits
	2013					2012				2013		2012
	U.S.			Int'l.		U.S.		Int'l.
Change in Benefit Obligation
Benefit obligation at January 1	$	2,624		757		—		237		191		—
Service cost	125			36		82		22		8		4
Interest cost	91			31		65		25		7		5
Plan participant contributions	—			4		—		2		—		—
Plan amendments	—			—		—		—		—		(18	)
Actuarial loss (gain)	(194		)	1		90		83		(14	)	2
Benefits paid	(173		)	(15	)	(78	)	(12	)	(3	)	(1	)
Liabilities assumed from Separation	—			—		2,465		396		—		199
Foreign currency exchange rate change	—			26		—		4		—		—
Benefit obligation at December 31*	$	2,473		840		2,624		757		189		191
*Accumulated benefit obligation portion of above at December 31:	$	2,151		627		2,265		563

Change in Fair Value of Plan Assets
Fair value of plan assets at January 1	$	1,762		527		—		120		—		—
Actual return on plan assets	283			60		91		35		—		—
Company contributions	136			50		37		36		3		1
Plan participant contributions	—			4		—		2		—		—
Benefits paid	(173		)	(15	)	(78	)	(12	)	(3	)	(1	)
Assets received from Separation	—			—		1,712		344		—		—
Foreign currency exchange rate change	—			19		—		2		—		—
Fair value of plan assets at December 31	$	2,008		645		1,762		527		—		—

Funded Status at December 31	$	(465	)	(195	)	(862	)	(230	)	(189	)	(191	)

Amounts recognized in the consolidated balance sheet for our pension and other postretirement benefit plans at December 31, 2013 and 2012, include:



	Millions of Dollars
	Pension Benefits									Other Benefits
	2013					2012				2013		2012
	U.S.			Int'l.		U.S.		Int'l.
Amounts Recognized in the Consolidated Balance Sheet at December 31
Noncurrent assets	$	—		2		—		—		—		—
Current liabilities	(8		)	—		(8	)	—		(3	)	(3	)
Noncurrent liabilities	(457		)	(197	)	(854	)	(230	)	(186	)	(188	)
Total recognized	$	(465	)	(195	)	(862	)	(230	)	(189	)	(191	)

Included in accumulated other comprehensive income at December 31 were the following before-tax amounts that had not been recognized in net periodic benefit cost:



	Millions of Dollars
	Pension Benefits							Other Benefits
	2013				2012			2013		2012
	U.S.		Int'l.		U.S.	Int'l.

Unrecognized net actuarial loss (gain)	$	399	120		839	161		(18	)	(4	)
Unrecognized prior service cost (credit)	12		(11	)	15	(12	)	(13	)	(15	)



	Millions of Dollars
	Pension Benefits								Other Benefits
	2013				2012				2013		2012
	U.S.		Int'l.		U.S.		Int'l.
Sources of Change in Other Comprehensive Income
Net gain (loss) arising during the period	$	356	25		(78	)	(72	)	14		(2	)
Amortization of (gain) loss included in income	84		16		49		7		—		(1	)
Net change during the period	$	440	41		(29	)	(65	)	14		(3	)

Prior service credit arising during the period	$	—	—		—		—		—		18
Amortization of prior service cost (credit) included in income	3		(1	)	2		(1	)	(2	)	—
Net change during the period	$	3	(1	)	2		(1	)	(2	)	18

For our tax-qualified pension plans with projected benefit obligations in excess of plan assets, the projected benefit obligation, the accumulated benefit obligation, and the fair value of plan assets were $2,757 million, $2,407 million, and $2,177 million, respectively, at December 31, 2013, and $3,308 million, $2,777 million, and $2,289 million, respectively, at December 31, 2012. For our unfunded nonqualified key employee supplemental pension plans, the projected benefit obligation and the accumulated benefit obligation were $82 million and $58 million, respectively, at December 31, 2013, and $73 million and $51 million, respectively, at December 31, 2012.

The allocated benefit cost from Shared Plans, as well as the components of net periodic benefit cost associated with plans sponsored by us, for 2013, 2012 and 2011 is shown in the table below:



	Millions of Dollars
	Pension Benefits												Other Benefits
	2013					2012				2011			2013		2012		2011
	U.S.			Int'l.		U.S.		Int'l.		U.S.	Int'l.
Components of Net Periodic Benefit Cost
Service cost	$	125		36		82		22		—	5		8		4		—
Interest cost	91			31		65		25		—	13		7		5		—
Expected return on plan assets	(120		)	(29	)	(81	)	(21	)	—	(8	)	—		—		—
Amortization of prior service cost (credit)	3			(1	)	2		(1	)	—	—		(2	)	—		—
Recognized net actuarial loss (gain)	84			16		49		7		—	3		—		(1	)	—
Subtotal net periodic benefit cost	183			53		117		32		—	13		13		8		—
Allocated benefit cost from ConocoPhillips	—			—		71		13		199	39		—		7		19
Total net periodic benefit cost	$	183		53		188		45		199	52		13		15		19

In determining net periodic benefit cost, we amortize prior service costs on a straight-line basis over the average remaining service period of employees expected to receive benefits under the plan. For net actuarial gains and losses, we amortize 10 percent of the unamortized balance each year. The amount subject to amortization is determined on a plan-by-plan basis. Amounts included in accumulated other comprehensive income at December 31, 2013, that are expected to be amortized into net periodic benefit cost during 2014 are provided below:



	Millions of Dollars
	Pension Benefits				Other Benefits
	U.S.		Int'l.

Unrecognized net actuarial loss (gain)	$	40	12		(2	)
Unrecognized prior service cost (credit)	3		(2	)	(1	)

The following weighted-average assumptions were used to determine benefit obligations and net periodic benefit costs for years ended December 31:



	Pension Benefits					Other Benefits
	2013			2012		2013	2012
	U.S.		Int'l.	U.S.	Int'l.
Assumptions Used to Determine Benefit Obligations:
Discount rate	4.55	%	4.30	3.60	4.20	4.40	3.70
Rate of compensation increase	4.00		3.90	3.85	3.60	—	—

Assumptions Used to Determine Net Periodic Benefit Cost:
Discount rate	3.60	%	4.20	4.20	5.10	3.70	4.20
Expected return on plan assets	7.00		5.50	7.00	5.80	—	—
Rate of compensation increase	3.85		3.60	3.75	3.60	—	—

For both U.S. and international pension plans, the overall expected long-term rate of return is developed from the expected future return of each asset class, weighted by the expected allocation of pension assets to that asset class. We rely on a variety of independent market forecasts in developing the expected rate of return for each class of assets.

Our other postretirement benefit plans for health insurance are contributory. Effective December 31, 2012, we terminated the subsidy for retiree medical. On or after January 1, 2013, eligible employees are able to utilize notional amounts credited to an account during their period of service with the company to pay all, or a portion, of their cost to participate in postretirement health insurance through the company. In general, employees hired after December 31, 2012, will not receive credits to an account, but will have unsubsidized access to health insurance through the plan. The cost of health insurance will be adjusted annually by the company's actuary to reflect actual experience and expected health care cost trends. The measurement of the accumulated benefit obligation assumes a health care cost trend rate of 7.25 percent in 2014 that declines to 5.00 percent by 2023. A one percentage-point change in the assumed health care cost trend rate would be immaterial to Phillips 66.

Plan Assets

The investment strategy for managing pension plan assets is to seek a reasonable rate of return relative to an appropriate level of risk and provide adequate liquidity for benefit payments and portfolio management. We follow a policy of broadly diversifying pension plan assets across asset classes, investment managers, and individual holdings. As a result, our plan assets have no significant concentrations of credit risk. Asset classes that are considered appropriate include equities, fixed income, cash, real estate and insurance contracts. Plan fiduciaries may consider and add other asset classes to the investment program from time to time. The target allocations for plan assets are approximately 62 percent equity securities, 37 percent debt securities and 1 percent in all other types of investments. Generally, the investments in the plans are publicly traded, therefore, minimizing the liquidity risk in the portfolio.

The following is a description of the valuation methodologies used for the pension plan assets.


•	Fair values of equity securities and government debt securities categorized in Level 1 are primarily based on quoted market prices.

•

Fair values of corporate debt securities, agency and mortgage-backed securities and government debt securities categorized in Level 2 are estimated using recently executed transactions and market price quotations. If there have been no market transactions in a particular fixed income security, its fair market value is calculated by pricing models that benchmark the security against other securities with actual market prices. When observable price quotations are not available, fair value is based on pricing models that use something other than actual

market prices (e.g., observable inputs such as benchmark yields, reported trades and issuer spreads for similar securities), and these securities are categorized in Level 3 of the fair value hierarchy.


•	Fair values of investments in common/collective trusts are determined by the issuer of each fund based on the fair value of the underlying assets.


•	Fair values of mutual funds are valued based on quoted market prices, which represent the net asset value of shares held. Certain mutual funds are categorized in Level 2 as they are not valued on a daily basis.


•	Cash and cash equivalents are valued at cost, which approximates fair value.


•	Fair values of exchange-traded derivatives classified in Level 1 are based on quoted market prices. For other derivatives classified in Level 2, the fair values are generally calculated from pricing models with market input parameters from third-party sources.


•	Fair values of insurance contracts are valued at the present value of the future benefit payments owed by the insurance company to the plans' participants.


•	Fair values of real estate investments are valued using real estate valuation techniques and other methods that include reference to third-party sources and sales comparables where available.

The fair values of our pension plan assets at December 31, by asset class, were as follows:



	Millions of Dollars
	U.S.						International
	Level 1			Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
2013
Equity Securities
U.S.	$	552		—	—	552	129	—	—	129
International	439			—	—	439	104	—	—	104
Common/collective trusts	—			302	—	302	—	103	—	103
Mutual funds	—			42	—	42	5	—	—	5
Debt Securities
Government	114			70	—	184	117	—	—	117
Corporate	—			305	—	305	—	—	—	—
Agency and mortgage-backed securities	—			90	—	90	—	—	—	—
Common/collective trusts	—			17	—	17	—	148	—	148
Mutual funds	—			—	—	—	1	—	—	1
Cash and cash equivalents	77			—	—	77	14	—	—	14
Derivatives	(1		)	1	—	—	—	—	—	—
Insurance contracts	—			—	—	—	—	—	16	16
Real estate	—			—	—	—	—	—	8	8
Total	$	1,181		827	—	2,008	370	251	24	645



	Millions of Dollars
	U.S.					International
	Level 1		Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
2012
Equity Securities
U.S.	$	529	—	—	529	100	—	—	100
International	340		—	—	340	86	—	—	86
Common/collective trusts	—		237	—	237	—	97	—	97
Mutual funds	—		42	—	42	2	—	—	2
Debt Securities
Government	160		54	—	214	97	—	—	97
Corporate	—		287	1	288	—	—	—	—
Agency and mortgage-backed securities	—		45	—	45	—	—	—	—
Common/collective trusts	—		17	—	17	—	112	—	112
Mutual funds	—		—	—	—	1	—	—	1
Cash and cash equivalents	42		—	—	42	9	—	—	9
Derivatives	—		2	—	2	—	—	—	—
Insurance contracts	—		—	—	—	—	—	15	15
Real estate	—		—	—	—	—	—	7	7
Total*	$	1,071	684	1	1,756	295	209	22	526

* Fair values in the table exclude net receivables related to security transactions of $7 million.

As reflected in the table above, Level 3 activity was not material.

Our funding policy for U.S. plans is to contribute at least the minimum required by the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986, as amended. Contributions to international plans are subject to local laws and tax regulations. Actual contribution amounts are dependent upon plan asset returns, changes in pension obligations, regulatory environments, and other economic factors. In 2014, we expect to contribute approximately $175 million to our U.S. pension plans and other postretirement benefit plans and $60 million to our international pension plans.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid by us in the years indicated:



	Millions of Dollars
	Pension Benefits			Other Benefits
	U.S.		Int'l.

2014	$	203	18	9
2015	210		20	12
2016	222		25	15
2017	233		27	17
2018	259		26	19
2019-2023	1,333		156	106

Defined Contribution Plans

Most U.S. employees are eligible to participate in the Phillips 66 Savings Plan (Savings Plan). Employees can contribute up to 75 percent of their eligible pay, subject to certain statutory limits, in the thrift feature of the Savings Plan to a choice of investment funds. Phillips 66 provides a company match of participant thrift contributions up to 5 percent of eligible pay. In addition, participants who contribute at least 1 percent to the Savings Plan are eligible for “Success Share,” a semi-annual discretionary company contribution to the Savings Plan that can range from 0 to 6 percent of eligible pay, with a target of 2 percent. For the period January 2013 through June 2013, Success Share had an actual payout of 3 percent and for the period July 2013 through December 2013, it had an actual payout of 5 percent.

The Savings Plan was amended effective January 1, 2013. Prior to that date, the company matched up to 1.25 percent of eligible pay, the Success Share did not exist, and instead the plan included a stock savings feature (discussed below). The total expense related to participants in the Savings Plan and predecessor plans for Phillips 66 employees, excluding the stock savings feature, was $111 million in 2013, $15 million in 2012 and $13 million in 2011.

Prior to the Separation, the stock savings feature of the Savings Plan was a leveraged employee stock ownership plan. After the Separation, it was a non-leveraged employee stock ownership plan. Employees could elect to participate in the stock savings feature by contributing 1 percent of eligible pay. Subsequently, they received a proportionate allocation of shares of common stock. The total expense related to participants of Phillips 66 in this stock savings feature and predecessor plans for Phillips 66 employees was $157 million in 2012, and $38 million in 2011, all of which was compensation expense. The stock savings feature of the Savings Plan was terminated on December 31, 2012.

Share-Based Compensation Plans

Prior to the Separation, our employees participated in the “2011 Omnibus Stock and Performance Incentive Plan of ConocoPhillips” (the COP Omnibus Plan), under which they were eligible to receive ConocoPhillips stock options, restricted stock units (RSUs) and restricted performance share units (PSUs). Effective on the separation date of April 30, 2012, our employees and non-employee directors began participating in the “Omnibus Stock and Performance Incentive Plan of Phillips 66” (the 2012 Plan). The 2012 Plan was superseded by the 2013 Omnibus Stock and Performance Incentive Plan of Phillips 66 (the P66 Omnibus Plan) that was approved by shareholders in May 2013. Subsequent to this approval, all new share-based awards are granted under the P66 Omnibus Plan.

The P66 Omnibus Plan authorizes the Human Resources and Compensation Committee of our Board of Directors (the Committee) to grant stock options, stock appreciation rights, stock awards (including restricted stock and RSU awards), cash awards, and performance awards to our employees, non-employee directors, and other plan participants. The number of shares issued under the P66 Omnibus Plan to settle share-based awards may not exceed 45 million shares.

In connection with the Separation, share-based compensation awards granted under the COP Omnibus Plan and held by grantees as of April 30, 2012, were adjusted or substituted to preserve the intrinsic value of the awards as of April 30, 2012, as follows:


•	Exercisable awards of stock options and stock appreciation rights were converted in accordance with the Employee Matters Agreement providing the grantee with replacement options to purchase both ConocoPhillips and Phillips 66 common stock.


•	Unexercisable awards of stock options held by Phillips 66 employees were replaced with substitute options to purchase only Phillips 66 common stock.


•	Restricted stock and PSUs awarded for completed performance periods under the ConocoPhillips Performance Share Program (PSP) were converted in accordance with the Employee Matters Agreement providing the grantee with both ConocoPhillips and Phillips 66 restricted stock and PSUs.


•	Restricted stock and RSUs held by Phillips 66 employees under all programs other than the PSP were replaced entirely with Phillips 66 restricted stock and RSUs.

Awards granted in connection with the adjustment and substitution of awards originally issued under the COP Omnibus Plan are a part of and became subject to the 2012 Plan.

The aforementioned adjustment and substitution of awards resulted in the recognition of $9 million of incremental compensation expense in the second quarter of 2012.

Our share-based compensation programs generally provide accelerated vesting (i.e., a waiver of the remaining period of service required to earn an award) for awards held by employees at the time they become eligible for retirement. For share-based awards granted prior to our adoption of Statement of Financial Accounting Standards No. 123(R), codified into Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 718, “Compensation-Stock Compensation,” we recognize expense over the period of time during which the employee earns the award, accelerating the recognition of expense only when an employee actually retires. For share-based awards granted after our adoption of ASC 718 on January 1, 2006, we recognize share-based compensation expense over the shorter of: the service period (i.e., the stated period of time required to earn the award); or the period beginning at the start of the service period and ending when an employee first becomes eligible for retirement, but not less than six months, as this is the minimum period of time required for an award to not be subject to forfeiture.

Some of our share-based awards vest ratably (i.e., portions of the award vest at different times) while some of our awards cliff vest (i.e., all of the award vests at the same time). The company made a policy election under ASC 718 to recognize expense on a straight-line basis over the service period for the entire award, whether the award was granted with ratable or cliff vesting.

Total share-based compensation expense recognized in income and the associated tax benefit for the years ended December 31, were as follows:



	Millions of Dollars
	2013			2012		2011

Compensation cost	$	132		94		46
Tax benefit	(50		)	(35	)	(18	)

Stock Options

Stock options granted under the provisions of the P66 Omnibus Plan and earlier plans permit purchase of our common stock at exercise prices equivalent to the average market price of the stock on the date the options were granted. The options have terms of 10 years and generally vest ratably, with one-third of the options awarded vesting and becoming exercisable on each anniversary date following the date of grant. Options awarded to employees already eligible for retirement vest within six months of the grant date, but those options do not become exercisable until the end of the normal vesting period.

The following summarizes our stock option activity from January 1, 2013 to December 31, 2013:



							Millions of Dollars
	Options		Weighted- Average Exercise Price		Weighted-Average Grant-Date Fair Value		Aggregate Intrinsic Value

Outstanding at January 1, 2013	8,350,641		$	26.25
Granted	546,900		62.17		$	16.77
Forfeited	(4,900	)	62.17
Exercised	(2,002,575	)	21.74				$	81
Expired or canceled	—		—
Outstanding at December 31, 2013	6,890,066		$	30.38

Vested at December 31, 2013	6,358,111		$	29.47			$	297

Exercisable at December 31, 2013	5,007,009		$	26.61			$	248

All option awards presented in this table are for Phillips 66 stock only, including those awards held by ConocoPhillips employees.

The weighted-average remaining contractual terms of vested options and exercisable options at December 31, 2013, were 5.67 years and 4.98 years, respectively. During 2013, we received $44 million in cash and realized a tax benefit of $10 million from the exercise of options. At December 31, 2013, the remaining unrecognized compensation expense from unvested options held by employees of Phillips 66 was $4 million, which will be recognized over a weighted-average period of 16 months, the longest period being 25 months. The calculations of realized tax benefit, unamortized expense and weighted-average periods include awards based on both Phillips 66 and ConocoPhillips stock held by Phillips 66 employees.

The following table provides the significant assumptions used to calculate the grant date fair market values of options granted over the years shown below, as calculated using the Black-Scholes-Merton option-pricing model:



	2013		2012	2011
Assumptions used
Risk-free interest rate	1.18	%	1.62	3.10
Dividend yield	2.50	%	4.00	4.00
Volatility factor	35.47	%	33.30	33.40
Expected life (years)	6.23		7.42	6.87

Prior to the Separation, we calculated volatility using the most recent ConocoPhillips end-of-week closing stock prices spanning a period equal to the expected life of the options granted. We calculate the volatility of options granted after the Separation using a formula that adjusts the pre-Separation historical volatility of ConocoPhillips by the ratio of Phillips 66 implied market volatility on the grant date divided by the pre-Separation implied market volatility of ConocoPhillips.

We periodically calculate the average period of time lapsed between grant dates and exercise dates of past grants to estimate the expected life of new option grants.

Stock Unit Program

Generally, after the Separation RSUs are granted annually under the provisions of the P66 Omnibus Plan and cliff vest at the end of three years. Most RSU awards granted prior to the Separation vested ratably over five years, with one-third of the units vesting in 36 months, one-third vesting in 48 months, and the final third vesting 60 months from the date of grant. In addition to the regularly scheduled annual awards, RSUs are also granted ad hoc to attract or retain key personnel, and the terms and conditions under which these RSUs vest vary by award. Upon vesting, RSUs are settled by issuing one share of Phillips 66 common stock per RSU. RSUs awarded to employees already eligible for retirement vest within six months of the grant date, but those units are not issued as shares until the end of the normal vesting period. Until issued as stock, most recipients of RSUs receive a quarterly cash payment of a dividend equivalent, and for this reason the grant date fair value of these units is deemed equal to the average Phillips 66 stock price on the date of grant. The grant date fair market value of RSUs that do not receive a dividend equivalent while unvested is deemed equal to the average Phillips 66 common stock price on the grant date, less the net present value of the dividend equivalents that will not be received.

The following summarizes our stock unit activity from January 1, 2013 to December 31, 2013:



					Millions of Dollars
	Stock Units		Weighted-Average Grant-Date Fair Value		Total Fair Value

Outstanding at January 1, 2013	5,226,610		$	28.62
Granted	850,824		62.14
Forfeited	(64,762	)	43.23
Issued	(1,572,411	)	26.80		$	100
Outstanding at December 31, 2013	4,440,261		$	35.48

Not Vested at December 31, 2013	2,843,964		$	35.64

All RSU awards presented in this table are for Phillips 66 stock only, including those awards held by ConocoPhillips employees.

At December 31, 2013, the remaining unrecognized compensation cost from the unvested RSU awards held by employees of Phillips 66 was $50 million, which will be recognized over a weighted-average period of 25 months, the longest period being 40 months. The calculations of unamortized expense and weighted-average periods include awards based on both Phillips 66 and ConocoPhillips stock held by Phillips 66 employees.

Performance Share Program

Under the P66 Omnibus Plan, we also annually grant to senior management restricted PSUs that vest: (i) with respect to awards for performance periods beginning before 2009, when the employee becomes eligible for retirement by reaching age 55 with five years of service; or (ii) with respect to awards for performance periods beginning in 2009, five years after the grant date of the award (although recipients can elect to defer the lapsing of restrictions until retirement after reaching age 55 with five years of service); or (iii) with respect to awards for performance periods beginning in 2013 or later, on the grant date.

For PSU awards with performance periods beginning before 2013, we recognize compensation expense beginning on the date of grant and ending on the date the PSUs are scheduled to vest; however, since these awards are authorized three years prior to the grant date, we recognize compensation expense for employees that will become eligible for retirement by or shortly after the grant date over the period beginning on the date of authorization and ending on the date of grant. Since PSU awards with performance periods beginning in 2013 or later vest on the grant date, we recognize compensation expense beginning on the date of authorization and ending on the grant date for all employees participating in the PSU grant.

We settle PSUs with performance periods that begin before 2013 by issuing one share of Phillips 66 common stock for each PSU. Recipients of these PSUs receive a quarterly cash payment of a dividend equivalent beginning on the grant date and ending on the settlement date.

We settle PSUs with performance periods beginning in 2013 or later by paying cash equal to the fair value of the PSU on the grant date, which is also the date the PSU vests. Since these PSUs vest and settle on the grant date, dividend equivalents are never paid on these awards.

The following summarizes our performance share unit activity from January 1, 2013 to December 31, 2013:



					Millions of Dollars
	Performance Share Units		Weighted-Average Grant-Date Fair Value		Total Fair Value

Outstanding at January 1, 2013	2,592,274		$	34.36
Granted	266,052		62.17
Forfeited	—
Issued	(145,358	)	33.84		$	9
Outstanding at December 31, 2013	2,712,968		$	37.12

Not Vested at December 31, 2013	649,672		$	37.73

All PSU awards presented in this table are for Phillips 66 stock only, including those awards held by ConocoPhillips employees.

At December 31, 2013, the remaining unrecognized compensation cost from unvested PSU awards held by employees of Phillips 66 was $12 million, which will be recognized over a weighted-average period of 33 months, the longest period being 13 years. The calculations of unamortized expense and weighted-average periods include awards based on both Phillips 66 and ConocoPhillips stock held by Phillips 66 employees.

Phillips 66 | 2013 | FY |

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