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UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): February 2, 2018
Phillips 66 Partners LP(Exact name of registrant as specified in its charter)
Delaware 001-36011 38-3899432(State or other jurisdiction
of incorporation) (CommissionFile Number)
(I.R.S. EmployerIdentification No.)
2331 CityWest Blvd., Houston, Texas 77042(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (855) 283-9237
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the followingprovisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) orRule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02 Results of Operations and Financial Condition.
On February 2, 2018 , Phillips 66 Partners LP issued a press release announcing the partnership’s financial and operating results for the quarter endedDecember 31, 2017 . A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference. Additional financial and operatinginformation about the quarter is attached as Exhibit 99.2 hereto and incorporated herein by reference. The information in this report and the exhibits hereto shall not be treated as filed for purposes of the Securities Exchange Act of 1934, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 — Press release issued by Phillips 66 Partners LP on February 2, 2018 .
99.2 — Supplemental financial and operating information.
1
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersignedhereunto duly authorized.
PHILLIPS 66 PARTNERS LP By: Phillips 66 Partners GP LLC, its general partner
By: /s/ChukwuemekaA.Oyolu
Chukwuemeka A. OyoluVice President and Controller
Dated: February 2, 2018
2
EXHIBIT INDEX
Exhibit No. Description
99.1 Press release issued by Phillips 66 Partners LP on February 2, 2018. 99.2 Supplemental financial and operating information.
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Phillips 66 Partners Reports Fourth-Quarter Earnings
Exhibit 99.1
Phillips 66 Partners ReportsFourth -Quarter 2017 Earnings
Highlights
Fourth Quarter• Reportedearningsof$162million;adjustedEBITDAof$254million• Increasedquarterlydistribution5percentto$0.678percommonunit• CompletedacquisitionofMereySweeny,L.P.and25percentinterestintheBakkenPipelinein$2.4billiontransaction
Full-Year 2017• Reportedearningsof$461million;adjustedEBITDAof$754million• Increaseddistributionspercommonunitby22percent• Raised$1.9billionfromequityanddebtofferings
HOUSTON,Feb.2,2018–Phillips66PartnersLP(NYSE:PSXP)announcesfourth-quarter2017earningsof$162million,or$0.83perdilutedcommonunit.Cashfromoperationswas$238million,anddistributablecashflowwas$172million.AdjustedEBITDAwas$254millioninthefourthquarter,comparedwith$171millioninthethirdquarter.
“Duringthequarter,weoperatedwellandcompletedourlargesttransactiontodate,increasingearningsbymorethan60percent,”saidGregGarland,Phillips66Partners’chairmanandCEO.“Wearenearingour$1.1billionyear-end2018run-rateEBITDAtargetandremainontracktodeliver30percentfive-yeardistributionCAGR.Wecontinuetooperatefromastrongfinancialposition,whichenablesustofundour2018growthplanswithoutaccessingtheequitymarketsbeyondselectiveuseofourATMprogram.”
OnJan.17,2018,thegeneralpartner’sboardofdirectorsdeclaredafourth-quarter2017cashdistributionof$0.678percommonunit,a5percentincreaseoverthepreviousquarterdistributionof$0.646percommonunit.ThePartnershiphasincreaseditsdistributionpercommonuniteveryquartersinceitsinitialpublicofferinginJuly2013.
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Phillips 66 Partners Reports Fourth-Quarter Earnings
Financial Results
Phillips66Partners’earningsforthefourthquarterof2017were$162million,comparedwith$99millioninthethirdquarter.TheincreasewasprimarilyduetotheOctober2017acquisitionofMereySweeny,L.P.anda25percentinterestintheBakkenPipeline,aswellasincreasedvolumesonotherassets.
Liquidity, Capital Expenditures and Investments
AsofDec.31,2017,totaldebtoutstandingwas$2.9billion.ThePartnershiphad$185millionincashandcashequivalentsandnooutstandingbalanceunderits$750millionrevolvingcreditfacility.
InOctober2017,Phillips66Partnersissued$650millionofseniornotesandraised$1.05billioninaprivateplacementofpreferredandcommonunits.ThemajorityoftheproceedswereusedtofundthecashportionoftheOctoberacquisitionandtorepaydebt,withtheremainderavailableforgeneralpartnershippurposes.
ThePartnership’stotalcapitalspendingforthequarterwas$127million,whichincluded$21millionofmaintenancecapital.Expansioncapitalspendingtotaled$106million,reflectinginvestmentsintheSandHillsPipeline,BakkenPipelineandSTACKjointventureprojects,aswellasspendingtodevelopanewisomerizationunitatthePhillips66LakeCharlesRefinery.
Phillips66Partners’2018capitalbudgetof$595millionincludes$510milliondirectedtowardgrowthprojectsand$85millionformaintenance.
Strategic Update
ThePartnershipcontinuestoprogressitsportfolioofgrowthprojects.
Finalapprovalhasbeenreceivedforconstructionofanew25,000barrelsperday(BPD)isomerizationunitatthePhillips66LakeCharlesRefinerytoincreaseproductionofhigheroctanegasolineblendcomponents.The$200millionprojectwillincludealong-termagreementwithPhillips66forprocessingservices,includingaminimumvolumecommitment,andisexpectedtobecompletedbytheendof2019.
TheSandHillsPipelinejointventurehasexceeded300,000BPDofthroughputinthefourthquarterandisexpectedtoreach365,000BPDofcapacitythisquarter.Furtherexpansionofthelineto450,000BPDisexpectedtobecompletedinthesecondhalfof2018.SandHillstransportsNGLsfromthePermianBasintotheTexasGulfCoast.Phillips66Partnersownsaone-thirdinterestinthisjointventure.
TheSTACKjointventureexpansionprojecttolooptheexistingpipelineandtoextendfurtherintotheSTACKplaywascompletedinthefourthquarter.Theloopincreasedcapacityby150,000BPD.ThePartnershipownsa50percentinterestinthejointventure.
PermittingiscompleteandconstructionhasbegunontheBayouBridgePipelineextensionfromLakeCharles,Louisiana,toSt.James,Louisiana.ThepipelineiscurrentlyoperatingfromNederland,Texas,toLakeCharles,andcommercialoperationsontheextensionareexpectedtobegininthesecondhalfof2018.ThePartnershipownsa40percentinterestinthejointventure.
TheSacagaweaPipelinejointventureisconstructinga24-milerawnaturalgaspipelinesystemlinkingproductioninMountrailCounty,NorthDakota,togatheringandprocessingcapacityinMcKenzieCounty,NorthDakota.Theprojectisanticipatedtobecompletedinthesecondhalfof2018.Phillips66Partnersownsa49.5percentinterestinthejointventure.
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Phillips 66 Partners Reports Fourth-Quarter Earnings
Investor Webcast
MembersofPhillips66Partnersexecutivemanagementwillhostawebcasttodayat2p.m.ESTtodiscussthePartnership’sfourth-quarterperformance.Tolistentotheconferencecallandviewrelatedpresentationmaterials,gotowww.phillips66partners.com/events . Fordetailedsupplementalinformation,gotowww.phillips66partners.com/reports .
About Phillips 66 Partners
HeadquarteredinHouston,Phillips66Partnersisagrowth-orientedmasterlimitedpartnershipformedbyPhillips66toown,operate,developandacquireprimarilyfee-basedcrudeoil,refinedpetroleumproductandnaturalgasliquidspipelinesandterminalsandothertransportationandmidstreamassets.Formoreinformation,visitwww.phillips66partners.com .
- # # # -
CONTACTS
JeffDietert(investors)832-765-2297jeff.dietert@p66.com
RosyZuklic(investors)832-765-2297rosy.zuklic@p66.com
DennisNuss(media)832-765-1850dennis.h.nuss@p66.com
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Phillips 66 Partners Reports Fourth-Quarter Earnings
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This news release includes forward-looking statements. Words and phrases such as “is anticipated,” “is estimated,” “is expected,” “is planned,” “is scheduled,”“is targeted,” “believes,” “intends,” “objectives,” “projects,” “strategies” and similar expressions are used to identify such forward-looking statements. However,the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements relating to Phillips 66 Partners (including ourjoint venture operations) are based on management’s expectations, estimates and projections about the Partnership, its interests and the energy industry ingeneral on the date this news release was prepared. These statements are not guarantees of future performance and involve certain risks, uncertainties andassumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-lookingstatements. Factors that could cause actual results or events to differ materially from those described in the forward-looking statements include the continuedability of Phillips 66 to satisfy its obligations under our commercial and other agreements; the volume of crude oil, refined petroleum products and NGL we or ourjoint ventures transport, fractionate, terminal and store; the tariff rates with respect to volumes that we transport through our regulated assets, which rates aresubject to review and possible adjustment by federal and state regulators; fluctuations in the prices for crude oil, refined petroleum products and NGL; liabilitiesassociated with the risks and operational hazards inherent in transporting, fractionating, terminaling and storing crude oil, refined petroleum products and NGL;potential liability from litigation or for remedial actions, including removal and reclamation obligations under environmental regulations; and other economic,business, competitive and/or regulatory factors affecting Phillips 66 Partners’ businesses generally as set forth in our filings with the Securities and ExchangeCommission. Phillips 66 Partners is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whetheras a result of new information, future events or otherwise.
Use of Non-GAAP Financial Information —This news release includes the terms “EBITDA,” “adjusted EBITDA,” “distributable cash flow,” “run-rate EBITDA,”and “coverage ratio.” These are non-GAAP financial measures. EBITDA and adjusted EBITDA are included to help facilitate comparisons of operatingperformance of the Partnership with other companies in our industry. EBITDA and distributable cash flow help facilitate an assessment of our ability to generatesufficient cash flow to make distributions to our partners. We believe that the presentation of EBITDA, adjusted EBITDA and distributable cash flow providesuseful information to investors in assessing our financial condition and results of operations. Our coverage ratio is calculated as distributable cash flow dividedby total cash distributions and is included to help indicate the Partnership’s ability to pay cash distributions from current earnings. The GAAP performancemeasure most directly comparable to EBITDA and adjusted EBITDA is net income. The GAAP liquidity measure most comparable to EBITDA and distributablecash flow is net cash provided by operating activities. The GAAP financial measure most comparable to our coverage ratio is calculated as net cash provided byoperating activities divided by total cash distributions. These non-GAAP financial measures should not be considered as alternatives to GAAP net income or netcash provided by operating activities. They have important limitations as analytical tools because they exclude some but not all items that affect net income andnet cash provided by operating activities. They should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP.Additionally, because EBITDA, adjusted EBITDA and distributable cash flow may be defined differently by other companies in our industry, our definition ofEBITDA, adjusted EBITDA and distributable cash flow may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.
Run-rate EBITDA is a forecast of future EBITDA, and is based on the Partnership’s projections of annual EBITDA inclusive of current assets and future potentialacquisitions by the Partnership. Run-rate EBITDA is included to demonstrate management’s intention of future growth through acquisitions and organic projects.We are unable to present a reconciliation of run-rate EBITDA to net income, which is the nearest GAAP financial measure, because certain elements of netincome, including interest, depreciation and taxes, were not used in the forecasts and are therefore not available. Together, these items generally result in run-rate EBITDA being significantly higher than net income. The disaggregation of capital spending between expansion/growth and maintenance is not a distinctionrecognized under GAAP. We provide such disaggregation because the Partnership will generally fund maintenance capital spending with cash from operatingactivities and fund expansion/growth capital spending with financing activities. We believe this is an important distinction in our liquidity profile.
References in the release to earnings and capital spending refer to net income and capital spending attributable to the Partnership, respectively. References toEBITDA refer to earnings before interest, income taxes, depreciation and amortization.
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Phillips 66 Partners Reports Fourth-Quarter Earnings
Results of Operations (Unaudited)
Summarized Financial Statement Information
Millions of Dollars
Except as Indicated Q4 2017 Q3 2017* Selected Income Statement Data
Totalrevenuesandotherincome $ 331 299
Netincome 164 131
NetincomeattributabletothePartnership 162 99
AdjustedEBITDA 254 171
Distributablecashflow 172 136
Net Income Attributable to the PartnershipPer Limited Partner Unit—Diluted (Dollars)
Commonunits $ 0.83 0.51
Selected Balance Sheet Data
Cashandcashequivalents $ 185 2
Equityinvestments 1,932 1,874
Totalassets 5,334 5,046
Totaldebt 2,945 2,390
Equityheldbypublic
Preferredunitholders 746 —
Commonunits 2,274 1,966
EquityheldbyPhillips66
Commonunits 487 472
Generalpartner (1,345) (662)*Prior-period financial information has been retrospectively adjusted for acquisitions of businesses under common control.
Page5
Phillips 66 Partners Reports Fourth-Quarter Earnings
Statement of Income Millions of Dollars Q4 2017 Q3 2017* Revenues and Other Income
Operatingrevenues—relatedparties $ 246 222
Operatingrevenues—thirdparties 8 11
Equityinearningsofaffiliates 76 66
Otherincome 1 —
Total revenues and other income 331 299
Costs and Expenses
Operatingandmaintenanceexpenses 82 86
Depreciation 28 32
Generalandadministrativeexpenses 17 17
Taxesotherthanincometaxes 9 7
Interestanddebtexpense 29 24
Otherexpenses — 1
Total costs and expenses 165 167
Incomebeforeincometaxes 166 132
Incometaxexpense 2 1
Net income 164 131
Less:NetincomeattributabletoPredecessors 2 32
Net income attributable to the Partnership 162 99
Less:Preferredunitholders'interestinnetincomeattributabletothePartnership 9 —
Less:Generalpartner’sinterestinnetincomeattributabletothePartnership 48 43
Limited partners’ interest in net income attributable to the Partnership $ 105 56*Prior-period financial information has been retrospectively adjusted for acquisitions of businesses under common control.
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Phillips 66 Partners Reports Fourth-Quarter Earnings
Selected Operating Data Thousands of Barrels Daily Q4 2017 Q3 2017 Pipeline, Terminal and Storage Volumes
Pipelines (1)
Pipelinethroughputvolumes
Wholly Owned Pipelines
Crudeoil 989 1,015
Refinedproductsandnaturalgasliquids 981 920
Total 1,970 1,935
Select Joint Venture Pipelines (2)
Naturalgasliquids 452 387
Terminals
Terminalthroughputandstoragevolumes(3)
Crudeoil(4) 606 586
Refinedproductsandnaturalgasliquids 905 828
Total 1,511 1,414(1) Represents the sum of volumes transported through each separately tariffed pipeline segment.(2) Total pipeline system throughput volumes for the Sand Hills and Southern Hills pipelines (100 percent basis) per day for each period presented.(3) Terminal throughput and storage volumes include leased capacity converted to a MBD-equivalent based on capacity divided by days in the period.(4) Crude oil terminals include Bayway and Ferndale rail rack volumes. Dollars per Barrel Q4 2017 Q3 2017 Revenue
Averagepipelinerevenue* $ 0.63 0.63
Averageterminalandstoragerevenue 0.41 0.41*Excludes equity affiliates.
Capital Expenditures and Investments Millions of Dollars Q4 2017 Q3 2017 Capital Expenditures and Investments
Expansion $ 106 87
Maintenance 21 10
Total Partnership 127 97
Predecessors* 1 21
Total Consolidated $ 128 118*Prior-period financial information has been retrospectively adjusted for acquisitions of businesses under common control.
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Phillips 66 Partners Reports Fourth-Quarter Earnings
Cash Distributions Millions of Dollars Q4 2017 Q3 2017 Cash Distributions †
Commonunits—public $ 36 34
Commonunits—Phillips66 46 44
Generalpartner—Phillips66 47 43
Total $ 129 121
Cash Distribution Per Common Unit (Dollars) $ 0.678 0.646
Coverage Ratio* 1.33x 1.12x† Cash distributions declared attributable to the indicated periods.
*Calculated as distributable cash flow divided by total cash distributions. Used to indicate the Partnership’s ability to pay cash distributions from current earnings. Net cashprovided by operating activities divided by total cash distributions was 1.84x and 1.61x at Q4 2017 and Q3 2017 respectively.
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Phillips 66 Partners Reports Fourth-Quarter Earnings
Reconciliation of Adjusted EBITDA and Distributable Cash Flow to Net Income Millions of Dollars Q4 2017 Q3 2017* 2017 2016
Reconciliation to Net Income Attributable to the Partnership
Net income attributable to the Partnership $ 162 99 461 301
Plus: NetincomeattributabletoPredecessors 2 32 63 107
Net income 164 131 524 408
Plus:
Depreciation 28 32 116 96
Netinterestexpense 29 24 99 52
Incometaxexpense 2 1 4 2
EBITDA 223 188 743 558
Proportionalshareofequityaffiliates’netinterest,taxesanddepreciation 29 13 66 45
ExpensesindemnifiedorprefundedbyPhillips66 1 4 8 6
Transactioncostsassociatedwithacquisitions 1 2 4 4
EBITDAattributabletoPredecessors — (36) (67) (142)
Adjusted EBITDA 254 171 754 471
Plus:
Deferredrevenueimpacts** † (3) 1 6 11
Less:
EquityaffiliatedistributionslessthanproportionalEBITDA 22 3 29 28
Maintenancecapitalexpenditures† 19 10 50 22
Netinterestexpense 29 23 100 52
Preferredunitdistributions 9 — 9 —
Distributable cash flow $ 172 136 572 380Adjusted EBITDA for all prior periods has been retrospectively adjusted to present our proportional share of equity affiliates’ EBITDA, rather than cashdistributions received.
*Prior-period financial information has been retrospectively adjusted for acquisitions of businesses under common control.
**Difference between cash receipts and revenue recognition. † Excludes MSLP capital reimbursements and turnaround impacts.
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Phillips 66 Partners Reports Fourth-Quarter Earnings
Reconciliation of Distributable Cash Flow to Net Cash Provided by Operating Activities Millions of Dollars Q4 2017 Q3 2017* 2017 2016
Reconciliation to Net Cash Provided by Operating Activities
Net cash provided by operating activities $ 238 195 724 492
Plus:
Netinterestexpense 29 24 99 52
Incometaxexpense 2 1 4 2
Changesinworkingcapital — (19) (30) 28
Adjustmenttoequityearningsforcashdistributionsreceived 1 (9) 1 (1)
Other (47) (4) (55) (15)
EBITDA 223 188 743 558
Proportionalshareofequityaffiliates’netinterest,taxesanddepreciation 29 13 66 45
ExpensesindemnifiedorprefundedbyPhillips66 1 4 8 6
Transactioncostsassociatedwithacquisitions 1 2 4 4
EBITDAattributabletoPredecessors — (36) (67) (142)
Adjusted EBITDA 254 171 754 471
Plus:
Deferredrevenueimpacts** † (3) 1 6 11
Less:
EquityaffiliatedistributionslessthanproportionalEBITDA 22 3 29 28
Maintenancecapitalexpenditures† 19 10 50 22
Netinterestexpense 29 23 100 52
Preferredunitdistributions 9 — 9 —
Distributable cash flow $ 172 136 572 380Adjusted EBITDA for all prior periods has been retrospectively adjusted to present our proportional share of equity affiliates’ EBITDA, rather than cash distributions received.
*Prior-period financial information has been retrospectively adjusted for acquisitions of businesses under common control.
**Difference between cash receipts and revenue recognition.
† Excludes MSLP capital reimbursements and turnaround impacts.
Page10
Exhibit 99.2
Phillips 66 Partners LP Earnings Release Supplemental Data
Factors Affecting Comparability
Thefollowingtablespresentourfinancialresultsandoperatingdataforeachquarterlyperiodofthecurrentandpriorfiscalyears.Duringtheperiodscoveredbythisreport,weacquiredbusinessesfromPhillips66thatwereconsideredtransfersofbusinessesbetweenentitiesundercommoncontrol,whichrequiresthemtobeaccountedforasifthetransfershadoccurredatthebeginningoftheperiodoftransfer,withfinancialstatementsforpriorperiodsretrospectivelyadjustedtofurnishcomparativeinformation.Accordingly,theconsolidatedfinancialandoperatinginformationincludedinthefollowingtableshasbeenretrospectivelyadjustedtoincludethehistoricalfinancialandoperatingresultsoftheseacquiredbusinessespriortotheeffectivedateofacquisition.Werefertotheresultsofthesepre-acquisitionperiodsasthoseofour“Predecessors”inthetablesbelow.Tableslabeled“Phillips66PartnersLP”excludePredecessors,whiletableslabeled“Consolidated”includePredecessors.Thestatementsofincomeprovidedonpages1through3aredesignedtoenableuserstoevaluatethefinancialeffectofthesebusinesscombinationsinaccordancewithAccountingStandardCodification805-10-50-1.
STATEMENT OF INCOME
PHILLIPS 66 PARTNERS LP
MillionsofDollars2017 2016
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTDRevenues and Other Income
Operatingrevenues—relatedparties 184 186 193 244 807 76 107 108 183 474
Operatingrevenues—thirdparties 10 11 11 8 40 2 2 2 8 14
Equityinearningsofaffiliates 33 37 41 74 185 25 30 33 26 114
Otherincome 7 — — 1 8 — — 1 — 1
Total revenues and other income 234 234 245 327 1,040 103 139 144 217 603
Costs and Expenses
Operatingandmaintenanceexpenses 62 57 69 81 269 18 27 26 49 120
Depreciation 26 26 30 28 110 8 15 15 24 62
Generalandadministrativeexpenses 16 16 16 17 65 8 8 9 15 40
Taxesotherthanincometaxes 9 7 7 8 31 4 5 1 9 19
Interestanddebtexpense 24 24 23 29 100 10 11 10 21 52
Otherexpenses — — 1 — 1 — — — — —
Total costs and expenses 137 130 146 163 576 48 66 61 118 293
Incomebeforeincometaxes 97 104 99 164 464 55 73 83 99 310
Incometaxexpense — 1 — 2 3 — 1 — 1 2
Net income 97 103 99 162 461 55 72 83 98 308Less:Netincomeattributabletononcontrollinginterests — — — — — 3 4 — — 7
Net income attributable to the Partnership 97 103 99 162 461 52 68 83 98 301Less:Preferredunitholders’interestinnetincomeattributabletothePartnership — — — 9 9 — — — — —
Less:Generalpartner’sinterestinnetincomeattributabletothePartnership 32 37 43 48 160 16 21 26 29 92
Limited partners’ interest in net incomeattributable to the Partnership 65 66 56 105 292 36 47 57 69 209
Adjusted EBITDA 163 166 171 254 754 80 105 123 163 471
Distributable Cash Flow 124 140 136 172 572 64 84 102 130 380
Page1
Exhibit 99.2
STATEMENT OF INCOME (continued)
PREDECESSORS
MillionsofDollars2017 2016
1st Qtr* 2nd Qtr* 3rd Qtr* 4th Qtr † YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr † YTDRevenues and Other Income
Operatingrevenues—relatedparties 26 30 29 2 87 95 75 73 10 253
Operatingrevenues—thirdparties — — — — — 6 5 5 1 17
Equityinearningsofaffiliates — 11 25 2 38 — — — — —
Otherincome 2 2 — — 4 — — — — —
Total revenues and other income 28 43 54 4 129 101 80 78 11 270
Costs and Expenses
Operatingandmaintenanceexpenses 12 22 17 1 52 32 31 28 5 96
Depreciation 2 2 2 — 6 15 8 10 1 34
Generalandadministrativeexpenses 1 2 1 — 4 9 8 8 — 25
Taxesotherthanincometaxes — 1 — 1 2 6 5 3 — 14
Interestanddebtexpense — — 1 — 1 — — — — —
Otherexpenses — — — — — — — — 1 1
Total costs and expenses 15 27 21 2 65 62 52 49 7 170
Incomebeforeincometaxes 13 16 33 2 64 39 28 29 4 100
Incometaxexpense — — 1 — 1 — — — — —
Net income 13 16 32 2 63 39 28 29 4 100
Netincomeattributabletononcontrollinginterests — — — — — 3 4 — — 7
Net income attributable to Predecessors 13 16 32 2 63 42 32 29 4 107
EBITDA attributable to Predecessors** 14 17 36 2 69 58 45 39 5 147* Prior-period financial information has been retrospectively adjusted for acquisitions of businesses under common control.** Includes rounding impacts.† In accordance with contractual terms of the Bakken Pipeline/MSLP and Eagle acquisitions, Q4 EBITDA attributable to Predecessors did not affect Q4 2017 or Q4 2016
Distributable Cash Flow as the effective closing dates of both transactions were October 1, 2017 and 2016, respectively.
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Exhibit 99.2
STATEMENT OF INCOME (continued)
CONSOLIDATED
MillionsofDollars,ExceptasIndicated2017 2016
1st Qtr* 2nd Qtr* 3rd Qtr* 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTDRevenues and Other Income
Operatingrevenues—relatedparties 210 216 222 246 894 171 182 181 193 727
Operatingrevenues—thirdparties 10 11 11 8 40 8 7 7 9 31
Equityinearningsofaffiliates 33 48 66 76 223 25 30 33 26 114
Otherincome 9 2 — 1 12 — — 1 — 1
Total revenues and other income 262 277 299 331 1,169 204 219 222 228 873
Costs and Expenses
Operatingandmaintenanceexpenses 74 79 86 82 321 50 58 54 54 216
Depreciation 28 28 32 28 116 23 23 25 25 96
Generalandadministrativeexpenses 17 18 17 17 69 17 16 17 15 65
Taxesotherthanincometaxes 9 8 7 9 33 10 10 4 9 33
Interestanddebtexpense 24 24 24 29 101 10 11 10 21 52
Otherexpenses — — 1 — 1 — — — 1 1
Total costs and expenses 152 157 167 165 641 110 118 110 125 463
Incomebeforeincometaxes 110 120 132 166 528 94 101 112 103 410
Incometaxexpense — 1 1 2 4 — 1 — 1 2
Net income 110 119 131 164 524 94 100 112 102 408
Less:NetincomeattributabletoPredecessors 13 16 32 2 63 42 32 29 4 107
Net income attributable to the Partnership 97 103 99 162 461 52 68 83 98 301Less:Preferredunitholders’interestinnetincomeattributabletothePartnership — — — 9 9 — — — — —
Less:Generalpartner’sinterestinnetincomeattributabletothePartnership 32 37 43 48 160 16 21 26 29 92
Limited partners’ interest in net incomeattributable to the Partnership 65 66 56 105 292 36 47 57 69 209
Net Income Attributable to the Partnership PerLimited Partner Unit—Basic and Diluted (dollars)
Commonunits—basic 0.60 0.61 0.51 0.86 2.60 0.44 0.51 0.57 0.65 2.20
Commonunits—diluted 0.60 0.61 0.51 0.83 2.59 0.44 0.51 0.57 0.65 2.20
Weighted-Average Limited Partner Units
Outstanding—Basic and Diluted ( thousands)
Commonunits—basic 107,400 109,189 110,506 120,953 112,045 82,629 90,959 100,555 106,633 95,240
Commonunits—diluted 107,400 109,189 110,506 134,021 115,339 82,629 90,959 100,555 106,633 95,240* Prior-period financial information has been retrospectively adjusted for acquisitions of businesses under common control.
Page3
Exhibit 99.2
SELECTED OPERATING DATA PHILLIPS 66 PARTNERS LP 2017 2016 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTDPipeline, Terminal and Storage Volumes
(MB/D)
Pipelines (1)
Pipelinethroughputvolumes
Wholly Owned Pipelines
Crudeoil 940 938 1,015 989 971 281 287 257 899 432
Refinedproductsandnaturalgasliquids 935 977 920 981 953 520 606 619 929 669
Total 1,875 1,915 1,935 1,970 1,924 801 893 876 1,828 1,101
Select Joint Venture Pipelines (2)
Naturalgasliquids 354 372 387 452 392 306 346 346 333 333
Terminals
Terminalthroughputandstoragevolumes(3)
Crudeoil(4) 485 494 586 606 543 502 559 541 561 541
Refinedproductsandnaturalgasliquids 898 840 828 905 868 427 450 442 847 542
Total 1,383 1,334 1,414 1,511 1,411 929 1,009 983 1,408 1,083(1) Represents the sum of volumes transported through each separately tariffed pipeline segment. (2) Total pipeline system throughput volumes for the Sand Hills and Southern Hills pipelines (100percent basis) per day for each period presented.
(3) Terminal throughput and storage volumes include leased capacity converted to a MBD-equivalent based on capacity divided by days in the period.
(4) Crude oil terminals include Bayway and Ferndale rail rack volumes.
Revenue Per Barrel ($/BBL)
Averagepipelinerevenue* 0.63 0.61 0.63 0.63 0.62 0.46 0.48 0.46 0.59 0.50
Averageterminalandstoragerevenue 0.41 0.42 0.41 0.41 0.42 0.40 0.38 0.39 0.40 0.39* Excludes equity affiliates.
Page4
Exhibit 99.2
SELECTED OPERATING DATA (continued) CONSOLIDATED 2017 2016 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTDPipeline, Terminal and Storage Volumes
(MB/D)
Pipelines (1)
Pipelinethroughputvolumes
Wholly Owned Pipelines
Crudeoil 940 938 1,015 989 971 1,025 1,024 981 1,007 1,009
Refinedproductsandnaturalgasliquids 935 977 920 981 953 801 852 855 961 867
Total 1,875 1,915 1,935 1,970 1,924 1,826 1,876 1,836 1,968 1,876
Select Joint Venture Pipelines (2)
Naturalgasliquids 354 372 387 452 392 306 346 346 333 333
Terminals
Terminalthroughputandstoragevolumes(3)
Crudeoil(4) 485 494 586 606 543 502 559 541 563 541
Refinedproductsandnaturalgasliquids 898 840 828 905 868 784 820 822 907 833
Total 1,383 1,334 1,414 1,511 1,411 1,286 1,379 1,363 1,470 1,374(1) Represents the sum of volumes transported through each separately tariffed pipeline segment. (2) Total pipeline system throughput volumes for the Sand Hills and Southern Hills pipelines (100percent basis) per day for each period presented.
(3) Terminal throughput and storage volumes include leased capacity converted to a MBD-equivalent based on capacity divided by days in the period.
(4) Crude oil terminals include Bayway and Ferndale rail rack volumes.
Revenue Per Barrel ($/BBL)
Averagepipelinerevenue* 0.63 0.61 0.63 0.63 0.62 0.61 0.61 0.59 0.60 0.60
Averageterminalandstoragerevenue 0.41 0.42 0.41 0.41 0.42 0.42 0.40 0.41 0.40 0.41* Excludes equity affiliates.
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Exhibit 99.2
CAPITAL EXPENDITURES AND INVESTMENTS MillionsofDollars
2017 2016 1st Qtr* 2nd Qtr* 3rd Qtr* 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTDPartnership Capital Expenditures and
Investments
Expansion 42 65 87 106 300 32 58 109 240 439
Maintenance 11 10 10 21 52 1 4 3 14 22
Total Partnership 53 75 97 127 352 33 62 112 254 461
Predecessors 5 55 21 1 82 31 36 24 5 96
Total Consolidated 58 130 118 128 434 64 98 136 259 557* Prior-period financial information has been retrospectively adjusted for acquisitions of businesses under common control.
CASH DISTRIBUTIONS 2017 2016 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD
Cash Distribution Per Common Unit (Dollars) 0.586 0.615 0.646 0.678 2.525 0.481 0.505 0.531 0.558 2.075
Cash Distributions † ($ Millions)
Commonunits—public 26 28 34 36 124 12 19 22 24 77Commonunits—Phillips66 37 40 44 46 167 28 30 34 36 128Generalpartner—Phillips66 32 36 43 47 158 16 21 26 28 91
Total 95 104 121 129 449 56 70 82 88 296
Coverage Ratio* 1.31 1.35 1.12 1.33 1.27 1.14 1.20 1.24 1.48 1.28† Cash distributions declared attributable to the indicated periods.* Calculated as distributable cash flow divided by total cash distributions. Used to indicate the Partnership's ability to pay cash distributions from current earnings.
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Exhibit 99.2
NON-GAAP FINANCIAL MEASURES RECONCILIATION CONSOLIDATED MillionsofDollars
2017 2016 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTDReconciliation to Net Income Attributable to
the Partnership
Net income attributable to the Partnership 97 103 99 162 461 52 68 83 98 301
Plus: NetincomeattributabletoPredecessors 13 16 32 2 63 42 32 29 4 107
Net income 110 119 131 164 524 94 100 112 102 408
Plus:
Depreciation 28 28 32 28 116 23 23 25 25 96
Netinterestexpense 23 23 24 29 99 10 11 10 21 52
Incometaxexpense — 1 1 2 4 — 1 — 1 2
EBITDA 161 171 188 223 743 127 135 147 149 558Proportionalshareofequityaffiliates’netinterest,taxesanddepreciation 12 12 13 29 66 10 10 13 12 45
ExpensesindemnifiedorprefundedbyPhillips66 3 — 4 1 8 — 4 — 2 6
Transactioncostsassociatedwithacquisitions 1 — 2 1 4 1 1 2 — 4
EBITDAattributabletoPredecessors (14) (17) (36) — (67) (58) (45) (39) — (142)
Adjusted EBITDA 163 166 171 254 754 80 105 123 163 471
Plus:
Deferredrevenueimpacts*† 4 4 1 (3) 6 1 2 4 4 11
Less: EquityaffiliatedistributionslessthanproportionalEBITDA 8 (4) 3 22 29 6 8 12 2 28
Maintenancecapitalexpenditures† 11 10 10 19 50 1 4 3 14 22
Netinterestexpense 24 24 23 29 100 10 11 10 21 52
Preferredunitdistributions — — — 9 9 — — — — —
Distributable cash flow 124 140 136 172 572 64 84 102 130 380Q1 2017 through Q3 2017 financial information has been retrospectively adjusted for acquisitions of businesses under common control. Adjusted EBITDA for all prior periodshas been retrospectively adjusted to present our proportional share of equity affiliates’ EBITDA, rather than cash distributions received.
* Difference between cash receipts and revenue recognition.† Excludes MSLP capital reimbursements and turnaround impacts.
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Exhibit 99.2
NON-GAAP FINANCIAL MEASURES RECONCILIATION (continued) CONSOLIDATED MillionsofDollars
2017 2016 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTDReconciliation to Net Cash Provided by
Operating Activities
Net cash provided by operating activities 155 136 195 238 724 111 132 128 121 492
Plus:
Netinterestexpense 23 23 24 29 99 10 11 10 21 52
Incometaxexpense — 1 1 2 4 — 1 — 1 2
Changesinworkingcapital (19) 8 (19) — (30) 13 (5) 8 12 28Adjustmenttoequityearningsforcashdistributionsreceived 4 5 (9) 1 1 (1) 2 3 (5) (1)
Other (2) (2) (4) (47) (55) (6) (6) (2) (1) (15)
EBITDA 161 171 188 223 743 127 135 147 149 558Proportionalshareofequityaffiliates’netinterest,taxesanddepreciation 12 12 13 29 66 10 10 13 12 45
ExpensesindemnifiedorprefundedbyPhillips66 3 — 4 1 8 — 4 — 2 6
Transactioncostsassociatedwithacquisitions 1 — 2 1 4 1 1 2 — 4
EBITDAattributabletoPredecessors (14) (17) (36) — (67) (58) (45) (39) — (142)
Adjusted EBITDA 163 166 171 254 754 80 105 123 163 471
Plus:
Deferredrevenueimpacts*† 4 4 1 (3) 6 1 2 4 4 11
Less: EquityaffiliatedistributionslessthanproportionalEBITDA 8 (4) 3 22 29 6 8 12 2 28
Maintenancecapitalexpenditures† 11 10 10 19 50 1 4 3 14 22
Netinterestexpense 24 24 23 29 100 10 11 10 21 52
Preferredunitdistributions — — — 9 9 — — — — —
Distributable cash flow 124 140 136 172 572 64 84 102 130 380Q1 2017 through Q3 2017 financial information has been retrospectively adjusted for acquisitions of businesses under common control. Adjusted EBITDA for all prior periodshas been retrospectively adjusted to present our proportional share of equity affiliates’ EBITDA, rather than cash distributions received.
* Difference between cash receipts and revenue recognition.† Excludes MSLP capital reimbursements and turnaround impacts.
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