Summary of PHILLIPS 66 - Yahoo! Finance

Entry into a Material Definitive Agreement, Completion of Acquisition or Disposition

Item 1.01 Entry into a Material Definitive Agreement.

Post-Spin-Off Agreements

On April 26, 2012, in connection with ConocoPhillips' previously announced spin-off of Phillips 66 through a pro rata distribution to ConocoPhillips shareholders of all of the outstanding shares of Phillips 66 common stock (the "Distribution"), Phillips 66 entered into several agreements with ConocoPhillips that govern the relationship of the parties following the Distribution, including the following:

Х Separation and Distribution Agreement

Х Indemnification and Release Agreement

Х Intellectual Property Assignment and License Agreement

Х Tax Sharing Agreement

Х Employee Matters Agreement

Х Transition Services Agreement

A summary of certain material features of the agreements can be found in the section entitled "Certain Relationships and Related Transactions - Agreements with ConocoPhillips" in the Information Statement (the "Information Statement") included in Phillips 66's Registration Statement on Form 10, filed with the Securities and Exchange Commission on November 14, 2011, as amended, and declared effective on April 12, 2012 (the "Registration Statement"), and is incorporated herein by reference. The summary is qualified in its entirety by reference to the Separation and Distribution Agreement, Indemnification and Release Agreement, Intellectual Property Assignment and License Agreement, Tax Sharing Agreement, Employee Matters Agreement and Transition Services Agreement, included with this report as Exhibits 2.1, 10.1, 10.2, 10.3, 10.4 and 10.5, respectively, each of which is incorporated herein by reference. A copy of the press release issued by Phillips 66 on May 1, 2012 announcing that ConocoPhillips had completed its spin-off of Phillips 66 is included with this report as Exhibit 99.1 and is incorporated herein by reference.

Receivables Facility

On April 27, 2012, Phillips 66 and certain of its subsidiaries entered into a $1.2 billion accounts receivable securitization facility (the "A/R Facility") to provide additional liquidity and funding for the ongoing business needs of Phillips 66 and its subsidiaries.

The documentation for the A/R Facility includes (i) a Receivables Purchase Agreement (the "Receivables Purchase Agreement") among Phillips 66 Company, a Delaware corporation and wholly owned subsidiary of Phillips 66 (the "Originator"), Phillips 66 Receivables Funding LLC, a Delaware limited liability company and a bankruptcy-remote special purpose entity that is a wholly owned subsidiary of the Originator ("SPE"), Royal Bank of Canada, as administrative agent, structuring agent and a facility agent, certain other facility agents, and committed purchasers and conduit purchasers that are parties thereto from time to time (the "Purchasers") and (ii) a Purchase and Contribution Agreement (the "Receivables Sale Agreement") by and between the Originator and the SPE (collectively, the "Agreements").

Pursuant to the Receivables Sale Agreement, the Originator has sold and contributed, and will continue to sell or contribute, its trade receivables, together with all related security and interests in the proceeds thereof, to the SPE in exchange for a combination of cash, equity or a subordinated note issued by the SPE to the Originator. Pursuant to the Receivables Purchase Agreement, the SPE may, from time to time, in turn sell undivided interests in such trade receivables, together with all related security and interests in the proceeds thereof, to the Purchasers in exchange for cash proceeds. Collections on the trade receivables for which an undivided interest is sold to the Purchasers will be set aside and held in trust to satisfy the obligations of the SPE under the A/R Facility.

The Originator and the SPE provide customary representations and covenants under the Agreements. Receivables in the A/R Facility are subject to customary criteria, limits and reserves. The Receivables Purchase Agreement provides for certain Termination Events, as defined therein, upon the occurrence of which the Purchasers may terminate further purchases of undivided interests in the trade receivables and impose default fees. The SPE pays Yield (as defined in the Receivables Purchase Agreement) with respect to amounts advanced under the A/R Facility. The calculation of Yield will vary based on the funding alternatives chosen. In addition, the A/R Facility also provides for the issuance of letters of credit.

. . .

Item 2.01 Completion of Acquisition or Disposition of Assets.

The information included under "Post-Spin-Off Agreements" in Item 1.01 of this report on Form 8-K is incorporated herein by reference. On April 27, 2012, in connection with certain internal restructuring steps implemented in contemplation of the Distribution, ConocoPhillips contributed to Phillips 66 all of the outstanding common stock of Phillips 66 Company, which, directly and through its subsidiaries, holds ownership interests in those entities and assets through which the businesses of Phillips 66 are conducted. In exchange for the shares of Phillips 66 Company common stock, Phillips 66 issued shares of its common stock to ConocoPhillips, assumed certain liabilities from ConocoPhillips and made a special cash distribution of approximately $5.95 billion to ConocoPhillips on April 30, 2012 (which may be adjusted based on actual levels of Phillips 66 cash, inventory and working capital as of April 30, 2012).