Based on his contract the Reds are paying him to be a 2.5 WAR player or so over the life of his contract. As per any LTC with a guy in his 30's you hope to get more value out of the first few years of the deal, because the last couple years will probably play out in the player's favor. Phillips was at 3.7 last year and is just about on the same pace this year...outproducing his contract so far.
When it is all said and done, I expect the Reds to come out slightly favorably on the contract, though the last few years might not look great.