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Form 8-K PHILLIPS 66 PARTNERS LP For: Jul 31

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July 31, 2015 9:44 AM EDT


UNITED STATES
SECURITIES 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): July 31, 2015

Phillips 66 Partners LP
(Exact name of registrant as specified in its charter)
 
Delaware
 
001-36011
 
38-3899432
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)
 

3010 Briarpark Drive, 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 following provisions:
 
 
 [    ]
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))



 

 


Item 2.02 Results of Operations and Financial Condition.

On July 31, 2015, Phillips 66 Partners LP issued a press release announcing the partnership’s financial and operating results for the quarter ended June 30, 2015. A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference. Additional financial and operating information about the quarter is furnished 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 July 31, 2015.
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 undersigned thereunto duly authorized.
 

 
PHILLIPS 66 PARTNERS LP
 
 
 
By: Phillips 66 Partners GP LLC, its general partner
 
 
 
/s/ Chukwuemeka A. Oyolu
 
Chukwuemeka A. Oyolu
Vice President and Controller

 
 
July 31, 2015
 



2

EXHIBIT INDEX

Exhibit
 
No.
Description
 
 
99.1
Press release issued by Phillips 66 Partners LP on July 31, 2015.
 
 
99.2
Supplemental financial and operating information.


3

Phillips 66 Partners Reports Second-Quarter Earnings

 
 
 
 
Exhibit 99.1

Phillips 66 Partners Reports
Second-Quarter Earnings


Highlights

•
Distributable cash flow of $47.8 million
•
Adjusted EBITDA of $57.0 million
•
Net income of $42.0 million
•
Increased quarterly distribution by 8 percent to $0.40 per common unit

HOUSTON, July 31, 2015 – Phillips 66 Partners LP (NYSE: PSXP) announces second-quarter 2015 earnings of $42.0 million, or $0.50 per common unit. Distributable cash flow was $47.8 million and adjusted earnings before interest, income taxes, depreciation and amortization (adjusted EBITDA) were $57.0 million.

“We continue to strategically grow Phillips 66 Partners and increase our quarterly cash distribution,” said Greg Garland, Phillips 66 Partners chairman and CEO. “We are on target to achieve our five-year annual distribution growth goal of 30 percent through 2018.”

On July 22, 2015, the general partner’s board of directors declared a second-quarter 2015 cash distribution of $0.40 per common unit. This distribution represents an 8 percent increase compared with the first-quarter 2015 distribution of $0.37 per common unit and a 33 percent increase from the second quarter of 2014.

Financial Results

Total revenues and other income for the second quarter of 2015 were $83.8 million, an increase of $13.7 million from first-quarter 2015. Equity earnings in the second quarter of 2015 benefited from a full quarter of results from DCP Sand Hills Pipeline, LLC, DCP Southern Hills Pipeline, LLC and Explorer Pipeline Company, compared with one month of results in the first quarter of 2015. The increase in equity earnings was partially offset by lower pipeline and terminaling revenues. This decrease was primarily due to lower volumes in the Sweeny to Pasadena Products System and Clifton Ridge Crude System, resulting from maintenance activities at the connecting Phillips 66-owned refineries.

Total costs were $41.9 million in the second quarter of 2015, an increase of $7.4 million from first-quarter 2015. The increase was largely due to a full quarter of interest expense associated with the $1.1 billion senior notes issued in February 2015 and higher operating costs. These items were partially offset by lower general and administrative expenses driven by lower transaction costs from growth activities.


Page 1

Phillips 66 Partners Reports Second-Quarter Earnings

Liquidity, Capital Expenditures and Investments

As of June 30, 2015, total debt outstanding was $1.1 billion and the Partnership had more than $600 million of available liquidity, including $104 million in cash and cash equivalents and an unused $500 million revolving credit facility. The credit facility may be increased by up to an additional $250 million.

During the second quarter of 2015, total capital expenditures and investments were approximately $65 million, of which $63 million was spent on capital expansion projects and investments.

Strategic Update

Phillips 66 Partners continues to progress its organic growth projects. The Partnership expects the Cross-Channel Connector Products System and the second phase of the Eagle Ford Gathering System to be completed in the fall of 2015.

The Palermo Rail Terminal is on schedule to begin railcar-loading from truck deliveries by the end of 2015. Construction of the Sacagawea Pipeline is experiencing permitting delays that will postpone the planned startup into 2016. Both the terminal and pipeline are projects in the Bakken region being developed through a 70 percent-owned terminal joint venture and a 50 percent-owned pipeline joint venture, each with Paradigm Energy Partners. The Sacagawea Pipeline is 88 percent-owned by the pipeline joint venture, with the remaining 12 percent owned by Grey Wolf Midstream, LLC, an affiliate of Missouri River Resources.
 
Investor Webcast

Members of Phillips 66 Partners executive management will host a webcast today at 2 p.m. EDT to discuss the Partnership’s second-quarter performance. To listen to the conference call and view related presentation materials, go to www.phillips66partners.com/events. For detailed supplemental information, go to www.phillips66partners.com/reports.

About Phillips 66 Partners

Headquartered in Houston, Phillips 66 Partners is a growth-oriented master limited partnership formed by Phillips 66 to own, operate, develop and acquire primarily fee-based crude oil, refined petroleum product and natural gas liquids pipelines and terminals and other transportation and midstream assets. For more information, visit www.phillips66partners.com.

- # # # -


CONTACTS 
 
 
Kevin Mitchell (investors)
832-765-2297

C.W. Mallon (investors)
832-765-2297

 
Dennis Nuss (media)
832-765-1850

 
 



Page 2

Phillips 66 Partners Reports Second-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 our joint venture operations) are based on management’s expectations, estimates and projections about the Partnership, its interests and the energy industry in general on the date this news release was prepared. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Factors that could cause actual results or events to differ materially from those described in the forward-looking statements include the continued ability 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 our joint ventures transport; the tariff rates with respect to volumes that we transport through our regulated assets, which rates are subject to review and possible adjustment by federal and state regulators; fluctuations in the prices for crude oil, refined petroleum products and NGL; liabilities associated with the risks and operational hazards inherent in transporting, 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 Exchange Commission. Phillips 66 Partners is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

Use of Non-GAAP Financial Information—This news release includes the terms “EBITDA,” “adjusted EBITDA,” and “distributable cash flow.” These are non-GAAP financial measures. EBITDA, adjusted EBITDA and distributable cash flow are included to help facilitate comparisons of operating performance of the Partnership with other companies in our industry. EBITDA and distributable cash flow help facilitate an assessment of our assets’ ability to generate sufficient cash flow to make distributions to our partners. We believe that the presentation of EBITDA, adjusted EBITDA and distributable cash flow provides useful information to investors in assessing our financial condition and results of operations. The GAAP performance measure most directly comparable to EBITDA, adjusted EBITDA and distributable cash flow is net income. The GAAP liquidity measure most comparable to EBITDA and distributable cash flow is net cash provided by operating activities. These non-GAAP financial measures should not be considered as alternatives to GAAP net income or net cash provided by operating activities. They have important limitations as analytical tools because they exclude some but not all items that affect net income and net 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 of EBITDA, adjusted EBITDA and distributable cash flow may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

References in the release to earnings refer to net income. References to EBITDA refer to earnings before interest, income taxes, depreciation and amortization.




Page 3

Phillips 66 Partners Reports Second-Quarter Earnings

Results of Operations (Unaudited)

Summarized Financial Statement Information
 
 
 
 
 
 
Millions of Dollars
Except as Indicated
 
Q2 2015
 
 
Q1 2015
 
Selected Income Statement Data
 
 
 
 
 
Total revenues and other income
 
$
83.8

 
 
70.1

Net income
 
42.0

 
 
35.4

 
 
 
 
 
 
Adjusted EBITDA
 
57.0

 
 
49.0

Distributable cash flow
 
47.8

 
 
41.9

 
 
 
 
 
 
Net Income Attributable to the Partnership
Per Limited Partner Unit—Basic and Diluted (Dollars)
 
 
 
 
 
Common units
 
$
0.50

 
 
0.39

Subordinated units—Phillips 66
 
—

 
 
0.35

 
 
 
 
 
 
Selected Balance Sheet Data
 
 
 
 
 
Cash and cash equivalents
 
$
104.3

 
 
137.6

Equity investments
 
835.9

 
 
800.8

Total assets
 
1,469.1

 
 
1,454.0

Total debt
 
1,099.7

 
 
1,099.7

 
 
 
 
 
 
Total Equity
 
 
 
 
 
Equity held by public
 
 
 
 
 
Common units
 
$
802.2

 
 
801.4

Equity held by Phillips 66
 
 
 
 
 
Common units
 
177.1

 
 
58.0

Subordinated units
 
—

 
 
117.2

General partner
 
(653.4
)
 
 
(656.5
)
Accumulated other comprehensive loss
 
(1.5
)
 
 
(1.5
)
Total Equity
 
$
324.4

 
 
318.6


Page 4

Phillips 66 Partners Reports Second-Quarter Earnings

Statement of Income
 
 
 
 
 
 
Millions of Dollars
 
Q2 2015
 
 
Q1 2015
 
Revenues
 
 
 
 
 
Transportation and terminaling services—related parties
 
$
62.3

 
 
62.8

Transportation and terminaling services—third parties
 
0.9

 
 
1.1

Equity in earnings of affiliates
 
20.6

 
 
6.1

Other income
 
—

 
 
0.1

Total revenues and other income
 
83.8

 
 
70.1

 
 
 
 
 
 
Costs and Expenses
 
 
 
 
 
Operating and maintenance expenses
 
17.5

 
 
14.8

Depreciation
 
5.3

 
 
5.1

General and administrative expenses
 
6.4

 
 
7.4

Taxes other than income taxes
 
3.1

 
 
1.3

Interest and debt expense
 
9.5

 
 
5.9

Other expenses
 
0.1

 
 
—

Total costs and expenses
 
41.9

 
 
34.5

Income before income taxes
 
41.9

 
 
35.6

Provision for (benefit from) income taxes
 
(0.1
)
 
 
0.2

Net Income
 
$
42.0

 
 
35.4



Selected Operating Data
 
 
 
Thousands of Barrels Daily
 
Q2 2015
 
 
Q1 2015
 
Pipeline, Terminal and Storage Volumes
 
 
 
 
 
Pipelines(1)
 
 
 
 
 
Pipeline throughput volumes
 
 
 
 
 
Wholly-Owned Pipelines
 
 
 
 
 
Crude oil
 
282

 
 
283

Refined products
 
446

 
 
462

Total
 
728

 
 
745

 
 
 
 
 
 
Select Joint Venture Pipelines(2)
 
 
 
 
 
Natural gas liquids
 
285

 
 
97

 
 
 
 
 
 
Terminals
 
 
 
 
 
Terminaling throughput and storage volumes
 
 
 
 
 
Crude oil(3)
 
518

 
 
558

Refined products
 
424

 
 
431

Total
 
942

 
 
989

(1) Represents the sum of volumes transported through each separately tariffed pipeline segment.
(2) Total post-acquisition pipeline system throughput volumes for the Sand Hills and Southern Hills pipelines (100 percent basis) per day for each period presented.
(3) Crude oil terminals include Bayway and Ferndale rail rack volumes.
 
 
 
Dollars per Barrel
 
Q2 2015
 
 
Q1 2015
 
Revenue per Barrel
 
 
 
 
 
Average pipeline revenue*
 
$
0.44

 
 
0.44

Average terminaling and storage revenue
 
0.39

 
 
0.38

* Excludes average pipeline revenue per barrel from equity affiliates.
 
 
 
 
 

Page 5

Phillips 66 Partners Reports Second-Quarter Earnings

Capital Expenditures and Investments
 
 
 
 
 
 
Millions of Dollars
 
Q2 2015
 
 
Q1 2015
 
Capital Expenditures and Investments
 
 
 
 
 
Expansion
 
$
63.0

 
 
31.2

Maintenance
 
1.5

 
 
1.7

Total
 
$
64.5

 
 
32.9




Cash Distributions
 
 
 
 
 
 
Q2 2015
 
 
Q1 2015
 
Cash Distributions* ($ Millions)
 
 
 
 
 
Common units—public
 
$
9.7

 
 
8.9

Common units—Phillips 66
 
23.0

 
 
8.4

Subordinated units—Phillips 66
 
—

 
 
13.0

General partner—Phillips 66
 
8.8

 
 
6.4

Total
 
$
41.5

 
 
36.7

* Cash distributions declared attributable to the indicated periods.
 
 
 
 
 
 
 
 
 
 
 
Cash Distribution Per Unit (Dollars)
 
$
0.40

 
 
0.37

 
 
 
 
 
 
Coverage Ratio
 
1.15

 
 
1.14




Page 6

Phillips 66 Partners Reports Second-Quarter Earnings

Reconciliation of Adjusted EBITDA and Distributable Cash Flow to Net Income
 
 
 
 
 
 
Millions of Dollars
 
Q2 2015
 
 
Q1 2015
 
Reconciliation to Net Income
 
 
 
 
 
Net Income
 
$
42.0

 
 
35.4

Plus:
 
 
 
 
 
Depreciation
 
5.3

 
 
5.1

Net interest expense
 
9.5

 
 
5.8

Amortization of deferred rentals
 
0.1

 
 
0.1

Provision for (benefit from) income taxes
 
(0.1
)
 
 
0.2

EBITDA
 
56.8

 
 
46.6

Distributions in excess of equity earnings
 
0.2

 
 
0.7

Expenses indemnified or prefunded by Phillips 66
 
—

 
 
0.3

Transaction costs associated with acquisitions
 
—

 
 
1.4

Adjusted EBITDA
 
57.0

 
 
49.0

Plus:
 
 
 
 
 
Adjustments related to minimum volume commitments
 
2.2

 
 
1.1

Less:
 
 
 
 
 
Net interest
 
9.5

 
 
6.5

Income taxes paid
 
0.4

 
 
—

Maintenance capital expenditures
 
1.5

 
 
1.7

Distributable Cash Flow
 
$
47.8

 
 
41.9

Second-quarter 2015 distributable cash flow excluded $5.8 million of equity earnings for which the associated distributions from the equity affiliates were included in the distributable cash flow for the first quarter of 2015, but received in the second quarter of 2015. Distributable cash flow for the second quarter of 2015 including this amount would be $53.6 million.


Page 7

Phillips 66 Partners Reports Second-Quarter Earnings

Reconciliation of Distributable Cash Flow to Net Cash Provided by Operating Activities
 
Millions of Dollars
 
Q2 2015
 
 
Q1 2015
 
Reconciliation to Net Cash Provided by Operating Activities
 
 
 
 
 
Net Cash Provided by Operating Activities
 
$
65.4

 
 
31.4

Plus:
 
 
 
 
 
Net interest expense
 
9.5

 
 
5.8

Provision for (benefit from) income taxes
 
(0.1
)
 
 
0.2

Changes in working capital
 
(15.9
)
 
 
4.1

Undistributed equity earnings
 
(2.2
)
 
 
5.8

Accrued environmental costs
 
(0.1
)
 
 
—

Other
 
0.2

 
 
(0.7
)
EBITDA
 
56.8

 
 
46.6

Distributions in excess of equity earnings
 
0.2

 
 
0.7

Expenses indemnified or prefunded by Phillips 66
 
—

 
 
0.3

Transaction costs associated with acquisitions
 
—

 
 
1.4

Adjusted EBITDA
 
57.0

 
 
49.0

Plus:
 
 
 
 
 
Adjustments related to minimum volume commitments
 
2.2

 
 
1.1

Less:
 
 
 
 
 
Net interest
 
9.5

 
 
6.5

Income taxes paid
 
0.4

 
 
—

Maintenance capital expenditures
 
1.5

 
 
1.7

Distributable Cash Flow
 
$
47.8

 
 
41.9

Second-quarter 2015 distributable cash flow excluded $5.8 million of equity earnings for which the associated distributions from the equity affiliates were included in the distributable cash flow for the first quarter of 2015, but received in the second quarter of 2015. Distributable cash flow for the second quarter of 2015 including this amount would be $53.6 million.





Page 8

Exhibit 99.2

Phillips 66 Partners LP Earnings Release Supplemental Data
Factors Affecting Comparability
The following tables present our financial results, operating data, EBITDA, adjusted EBITDA and distributable cash flow for each quarterly period through June 30, 2015. In 2014, we acquired the Gold Line Products System, Medford Spheres, Bayway and Ferndale rail racks, and the Cross-Channel Connector Products System and Eagle Ford Gathering System projects from Phillips 66. The acquisitions of the Gold Line, Medford, Bayway and Ferndale assets were transfers of businesses between entities under common control, which requires retrospective adjustments to furnish comparative consolidated information. Accordingly, the consolidated financial and operating information included in the following tables has been retrospectively adjusted to include the historical financial and operating results of these acquired businesses prior to the effective date of each acquisition. The combined results of the Gold Line, Medford, Bayway and Ferndale businesses are reflected in the “Predecessors” sections in the tables below.
In the first quarter of 2015, the Partnership completed the formation of the Bakken joint ventures and acquired Phillips 66’s equity interests in the Sand Hills, Southern Hills and Explorer pipeline companies. These acquisitions, as well as the projects acquired in 2014 represented transfers of assets. Accordingly, the results of these equity investments and projects are included prospectively from the effective date of each acquisition.


STATEMENT OF INCOME












PHILLIPS 66 PARTNERS LP



Millions of Dollars

2014

2015

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

YTD


1st Qtr

2nd Qtr

3rd Qtr
4th Qtr
YTD

Revenues











Transportation and terminaling services—related parties
35.3

54.5

52.7

61.0

203.5


62.8

62.3



125.1

Transportation and terminaling services—third parties
0.6

2.4

0.7

1.7

5.4


1.1

0.9



2.0

Equity in earnings of affiliates
—

—

—

—

—


6.1

20.6



26.7

Other income
0.1

—

—

—

0.1


0.1

—



0.1

Total revenues and other income
36.0

56.9

53.4

62.7

209.0


70.1

83.8



153.9













Costs and Expenses











Operating and maintenance expenses
8.3

13.0

12.5

13.2

47.0


14.8

17.5



32.3

Depreciation
2.4

3.9

4.0

4.0

14.3


5.1

5.3



10.4

General and administrative expenses
5.6

5.4

4.9

6.0

21.9


7.4

6.4



13.8

Taxes other than income taxes
0.6

1.0

1.1

0.9

3.6


1.3

3.1



4.4

Interest and debt expense
0.5

1.3

1.4

2.1

5.3


5.9

9.5



15.4

Other expenses
—

—

—

0.1

0.1


—

0.1



0.1

Total costs and expenses
17.4

24.6

23.9

26.3

92.2


34.5

41.9



76.4

Income before income taxes
18.6

32.3

29.5

36.4

116.8


35.6

41.9



77.5

Provision for (benefit from) income taxes
0.3

0.2

0.1

0.2

0.8


0.2

(0.1
)


0.1

Net Income
18.3

32.1

29.4

36.2

116.0


35.4

42.0



77.4

Less: General partner’s interest in net income attributable to the Partnership
0.8

1.7

2.0

3.8

8.3


6.4

9.0



15.4

Limited partners’ interest in net income attributable to the Partnership
17.5

30.4

27.4

32.4

107.7


29.0

33.0



62.0













Adjusted EBITDA
23.8

37.6

35.9

43.7

141.0


49.0

57.0



106.0













Distributable Cash Flow
23.3

34.3

33.4

37.2

128.2


41.9

47.8



89.7









Page 1

Exhibit 99.2

 
STATEMENT OF INCOME (continued)












PREDECESSORS



Millions of Dollars

2014

2015

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

YTD


1st Qtr

2nd Qtr

3rd Qtr
4th Qtr
YTD

Revenues











Transportation and terminaling services—related parties
15.2

—

2.1

2.1

19.4


—

—



—

Transportation and terminaling services—third parties
0.7

—

—

—

0.7


—

—



—

Total revenues
15.9

—

2.1

2.1

20.1


—

—



—













Costs and Expenses











Operating and maintenance expenses
3.4

0.4

0.7

1.0

5.5


—

—



—

Depreciation
1.2

—

0.2

0.5

1.9


—

—



—

General and administrative expenses
1.8

0.8

0.6

0.5

3.7


—

—



—

Taxes other than income taxes
0.6

—

—

—

0.6


—

—



—

Total costs and expenses
7.0

1.2

1.5

2.0

11.7


—

—



—

Income before income taxes
8.9

(1.2
)
0.6

0.1

8.4


—

—



—

Provision for income taxes
—

—

—

—

—


—

—



—

Net Income (Loss)
8.9

(1.2
)
0.6

0.1

8.4


—

—



—













EBITDA attributable to Predecessors
10.1

(1.2
)
0.8

0.6

10.3


—

—



—
































Page 2

Exhibit 99.2

 
STATEMENT OF INCOME (continued)












CONSOLIDATED



Millions of Dollars, Except as Indicated

2014

2015

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

YTD


1st Qtr

2nd Qtr

3rd Qtr
4th Qtr
YTD

Revenues











Transportation and terminaling services—related parties
50.5

54.5

54.8

63.1

222.9


62.8

62.3



125.1

Transportation and terminaling services—third parties
1.3

2.4

0.7

1.7

6.1


1.1

0.9



2.0

Equity in earnings of affiliates
—

—

—

—

—


6.1

20.6



26.7

Other income
0.1

—

—

—

0.1


0.1

—



0.1

Total revenues and other income
51.9

56.9

55.5

64.8

229.1


70.1

83.8



153.9













Costs and Expenses











Operating and maintenance expenses
11.7

13.4

13.2

14.2

52.5


14.8

17.5



32.3

Depreciation
3.6

3.9

4.2

4.5

16.2


5.1

5.3



10.4

General and administrative expenses
7.4

6.2

5.5

6.5

25.6


7.4

6.4



13.8

Taxes other than income taxes
1.2

1.0

1.1

0.9

4.2


1.3

3.1



4.4

Interest and debt expense
0.5

1.3

1.4

2.1

5.3


5.9

9.5



15.4

Other expenses
—

—

—

0.1

0.1


—

0.1



0.1

Total costs and expenses
24.4

25.8

25.4

28.3

103.9


34.5

41.9



76.4

Income before income taxes
27.5

31.1

30.1

36.5

125.2


35.6

41.9



77.5

Provision for (benefit from) income taxes
0.3

0.2

0.1

0.2

0.8


0.2

(0.1
)


0.1

Net Income
27.2

30.9

30.0

36.3

124.4


35.4

42.0



77.4

Less: Net income (loss) attributable to Predecessors
8.9

(1.2
)
0.6

0.1

8.4


—

—



—

Net income attributable to the Partnership
18.3

32.1

29.4

36.2

116.0


35.4

42.0



77.4

Less: General partner’s interest in net income attributable to the Partnership
0.8

1.7

2.0

3.8

8.3


6.4

9.0



15.4

Limited partners’ interest in net income attributable to the Partnership
17.5

30.4

27.4

32.4

107.7


29.0

33.0



62.0













Net Income Attributable to the Partnership Per Limited Partner Unit—Basic and Diluted (Dollars)











Common units
0.25

0.41

0.37

0.44

1.48


0.39

0.50



0.91

Subordinated units—Phillips 66
0.24

0.41

0.37

0.43

1.45


0.35

—



0.49













Average Limited Partner Units Outstanding (Thousands)











Common units—public
18,889

18,889

18,889

18,889

18,889


21,047

24,139



22,601

Common units—Phillips 66
17,544

19,859

19,859

20,221

19,380


21,468

41,489



31,534

Subordinated units—Phillips 66
35,217

35,217

35,217

35,217

35,217


35,217

16,254



25,683













Adjusted EBITDA
23.8

37.6

35.9

43.7

141.0


49.0

57.0



106.0













Distributable Cash Flow
23.3

34.3

33.4

37.2

128.2


41.9

47.8



89.7



Page 3

Exhibit 99.2

 
SELECTED OPERATING DATA
 
 
 
 
 
 
 
 
 
 
 
 
PHILLIPS 66 PARTNERS LP
 
 
 
 
 
2014
 
2015
 
1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

YTD

 
1st Qtr

2nd Qtr

3rd Qtr
4th Qtr
YTD

Pipeline, Terminal and Storage Volumes (MB/D)
 
 
 
 
 
 
 
 
 
 
 
Pipelines(1)
 
 
 
 
 
 
 
 
 
 
 
Pipeline throughput volumes
 
 
 
 
 
 
 
 
 
 
 
Wholly-Owned Pipelines
 
 
 
 
 
 
 
 
 
 
 
Crude oil
259

295

302

288

286

 
283

282

 
 
282

Refined products
314

438

384

439

394

 
462

446

 
 
454

Total
573

733

686

727

680

 
745

728



736

 
 
 
 
 
 
 
 

 
 
 
Select Joint Venture Pipelines(2)











Natural gas liquids
—

—

—

—

—


97

285



192

 
 
 
 
 
 
 
 

 
 
 
Terminals
 
 
 
 
 
 
 

 
 
 
Terminaling throughput and storage volumes
 
 
 
 
 
 
 

 
 
 
Crude oil(3)
410

453

464

482

453

 
558

518

 
 
538

Refined products
327

457

413

419

404

 
431

424

 
 
427

Total
737

910

877

901

857

 
989

942


 
965

(1)Represents the sum of volumes transported through each separately tariffed pipeline segment.
 
 
 

 
 
 
(2)Total post-acquisition pipeline system throughput volumes for the Sand Hills and Southern Hills pipelines (100 percent basis) per day for each period presented.
 
 
 

 
 
 
(3)Crude oil terminals include Bayway and Ferndale rail rack volumes.
 
 
 

 
 
 
 
 
 
 
 
 
 
 

 
 
 
Revenue Per Barrel ($/BBL)
 
 
 
 
 
 
 

 
 
 
Average pipeline revenue*
0.39

0.50

0.48

0.52

0.47

 
0.44

0.44

 
 
0.44

Average terminaling and storage revenue
0.24

0.28

0.29

0.34

0.29

 
0.38

0.39

 
 
0.39

*Excludes average pipeline revenue per barrel from equity affiliates.
 
 
 
 
 
 























Page 4

Exhibit 99.2

 
SELECTED OPERATING DATA (continued)
 
 
 
 
 
 
 
 
 
 
 
 
CONSOLIDATED
 
 
 
 
 
2014
 
2015
 
1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

YTD

 
1st Qtr

2nd Qtr

3rd Qtr
4th Qtr
YTD

Pipeline, Terminal and Storage Volumes (MB/D)
 
 
 
 
 
 
 
 
 
 
 
Pipelines(1)
 
 
 
 
 
 
 
 
 
 

Pipeline throughput volumes
 
 
 
 
 
 
 
 
 
 
 
Wholly-Owned Pipelines
 
 
 
 
 
 
 
 
 
 
 
Crude oil
259

295

302

288

286

 
283

282



282

Refined products
418

438

384

439

420

 
462

446



454

Total
677

733

686

727

706

 
745

728



736

 
 
 
 
 
 
 
 



 
Select Joint Venture Pipelines(2)











Natural gas liquids
—

—

—

—

—


97

285



192

 
 
 
 
 
 
 
 



 
Terminals
 
 
 
 
 
 
 



 
Terminaling throughput and storage volumes
 
 
 
 
 
 
 



 
Crude oil(3)
410

453

514

532

477

 
558

518



538

Refined products
429

457

413

419

430

 
431

424



427

Total
839

910

927

951

907

 
989

942



965

(1)Represents the sum of volumes transported through each separately tariffed pipeline segment.
 
 
 



 
(2)Total post-acquisition pipeline system throughput volumes for the Sand Hills and Southern Hills pipelines (100 percent basis) per day for each period presented.
 
 
 



 
(3)Crude oil terminals include Bayway and Ferndale rail rack volumes.
 
 
 



 
 
 
 
 
 
 
 
 



 
Revenue Per Barrel ($/BBL)
 
 
 
 
 
 
 



 
Average pipeline revenue*
0.51

0.50

0.48

0.52

0.50

 
0.44

0.44



0.44

Average terminaling and storage revenue
0.27

0.28

0.29

0.34

0.30

 
0.38

0.39



0.39

*Excludes average pipeline revenue per barrel from equity affiliates.
 
 
 
 
 
 
 

Page 5

Exhibit 99.2

 
CAPITAL EXPENDITURES AND INVESTMENTS
 
 
 
Millions of Dollars
 
2014
 
2015
 
1st Qtr

2nd Qtr

3rd Qtr

4th Qtr*

YTD

 
1st Qtr

2nd Qtr

3rd Qtr
4th Qtr
YTD

Partnership Capital Expenditures and Investments
 
 
 
 
 
 
 
 
 
 
 
Expansion
1.1

0.5

0.6

52.0

54.2

 
31.2

63.0



94.2

Maintenance
3.5

3.4

2.2

2.8

11.9

 
1.7

1.5



3.2

Total Partnership
4.6

3.9

2.8

54.8

66.1

 
32.9

64.5



97.4

 
 
 
 
 
 
 
 
 
 
 
 
Predecessors
34.9

35.6

14.6

5.7

90.8

 
—

—

 
 
—

Total Consolidated
39.5

39.5

17.4

60.5

156.9

 
32.9

64.5


 
97.4

* Fourth-quarter 2014 expansion capital expenditures include the acquisition costs for the Palermo Rail Terminal, Eagle Ford Gathering System and Cross-Channel Connector projects.




CASH DISTRIBUTIONS
 
 
 
 
 
2014
 
2015
 
1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

YTD

 
1st Qtr

2nd Qtr

3rd Qtr
4th Qtr
YTD

 
 
 
 
 
 
 
 
 
 
 
 
Cash Distribution Per Unit (Dollars)
0.2743

0.3017

0.3168

0.3400

1.2328

 
0.3700

0.4000



0.7700

 
 
 
 
 
 
 
 



 
Cash Distributions† ($ Millions)
 
 
 
 
 
 
 



 
Common units—public
5.2

5.7

6.0

6.4

23.3

 
8.9

9.7



18.6

Common units—Phillips 66
5.4

6.0

6.3

7.1

24.8

 
8.4

23.0



31.4

Subordinated units—Phillips 66
9.7

10.6

11.1

12.0

43.4

 
13.0

—



13.0

General partner—Phillips 66
0.8

1.6

1.9

3.6

7.9

 
6.4

8.8



15.2

Total
21.1

23.9

25.3

29.1

99.4

 
36.7

41.5



78.2

 
 
 
 
 
 
 
 



 
Coverage Ratio
1.10

1.44

1.32

1.28

1.29

 
1.14

1.15



1.15

† Cash distributions declared attributable to the indicated periods.



Page 6

Exhibit 99.2

 
NON-GAAP FINANCIAL MEASURES RECONCILIATION
 
 
PHILLIPS 66 PARTNERS LP
 
 
 
Millions of Dollars
 
2014
 
2015
 
1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

YTD

 
1st Qtr

2nd Qtr

3rd Qtr
4th Qtr
YTD

Reconciliation to Net Income
 
 
 
 
 
 
 
 
 
 
 
Net Income
18.3

32.1

29.4

36.2

116.0

 
35.4

42.0

 
 
77.4

Plus:
 
 
 
 
 
 
 

 
 
 
Depreciation
2.4

3.9

4.0

4.0

14.3

 
5.1

5.3

 
 
10.4

Net interest expense
0.4

1.3

1.4

2.1

5.2

 
5.8

9.5

 
 
15.3

Amortization of deferred rentals
0.1

0.1

0.1

0.1

0.4

 
0.1

0.1

 
 
0.2

Provision for (benefit from) income taxes
0.3

0.2

0.1

0.2

0.8

 
0.2

(0.1
)
 
 
0.1

Adjustments:
 
 
 
 
 
 
 
 
 
 
 
Distributions in excess of equity earnings
—

—

—

—

—

 
0.7

0.2



0.9

Expenses indemnified or prefunded by Phillips 66
0.8

—

0.7

0.1

1.6

 
0.3

—

 
 
0.3

Transaction costs associated with acquisitions
1.5

—

0.2

1.0

2.7

 
1.4

—

 
 
1.4

Adjusted EBITDA
23.8

37.6

35.9

43.7

141.0

 
49.0

57.0



106.0





PREDECESSORS
 
 
 
Millions of Dollars
 
2014
 
2015
 
1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

YTD

 
1st Qtr

2nd Qtr

3rd Qtr
4th Qtr
YTD

Reconciliation to Net Income (Loss)
 
 
 
 
 
 
 
 
 
 
 
Net Income (Loss)
8.9

(1.2
)
0.6

0.1

8.4

 
—

—

 
 
—

Plus:
 
 
 
 
 
 
 

 
 
 
Depreciation
1.2

—

0.2

0.5

1.9

 
—

—

 
 
—

Net interest expense
—

—

—

—

—

 
—

—

 
 
—

Amortization of deferred rentals
—

—

—

—

—

 
—

—

 
 
—

Provision for income taxes
—

—

—

—

—

 
—

—

 
 
—

EBITDA attributable to Predecessors
10.1

(1.2
)
0.8

0.6

10.3

 
—

—



—



















Page 7

Exhibit 99.2

 
NON-GAAP FINANCIAL MEASURES RECONCILIATION (continued)
 
 
CONSOLIDATED
 
 
 
Millions of Dollars
 
2014
 
2015
 
1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

YTD

 
1st Qtr

2nd Qtr

3rd Qtr
4th Qtr
YTD

Reconciliation to Net Income
 
 
 
 
 
 
 
 
 
 
 
Net Income
27.2

30.9

30.0

36.3

124.4

 
35.4

42.0

 
 
77.4

Plus:
 
 
 
 
 
 
 

 
 
 
Depreciation
3.6

3.9

4.2

4.5

16.2

 
5.1

5.3



10.4

Net interest expense
0.4

1.3

1.4

2.1

5.2

 
5.8

9.5

 
 
15.3

Amortization of deferred rentals
0.1

0.1

0.1

0.1

0.4

 
0.1

0.1



0.2

Provision for (benefit from) income taxes
0.3

0.2

0.1

0.2

0.8

 
0.2

(0.1
)


0.1

EBITDA
31.6

36.4

35.8

43.2

147.0

 
46.6

56.8



103.4

Distributions in excess of equity earnings
—

—

—

—

—

 
0.7

0.2



0.9

Expenses indemnified or prefunded by Phillips 66
0.8

—

0.7

0.1

1.6

 
0.3

—

 
 
0.3

Transaction costs associated with acquisitions
1.5

—

0.2

1.0

2.7

 
1.4

—

 
 
1.4

EBITDA attributable to Predecessors
(10.1
)
1.2

(0.8
)
(0.6
)
(10.3
)
 
—

—

 
 
—

Adjusted EBITDA
23.8

37.6

35.9

43.7

141.0

 
49.0

57.0



106.0

Plus:
 
 
 
 
 
 
 

 
 
 
Adjustments related to minimum volume commitments
2.3

(0.7
)
1.4

(2.4
)
0.6

 
1.1

2.2



3.3

Phillips 66 prefunded maintenance capital expenditures
0.7

1.1

—

0.1

1.9

 
—

—



—

Less:
 
 
 
 
 
 
 
 
 
 
 
Net interest
—

0.1

1.7

1.4

3.2

 
6.5

9.5



16.0

Income taxes paid
—

0.2

—

—

0.2

 
—

0.4



0.4

Maintenance capital expenditures
3.5

3.4

2.2

2.8

11.9

 
1.7

1.5



3.2

Distributable Cash Flow
23.3

34.3

33.4

37.2

128.2

 
41.9

47.8



89.7

Second-quarter 2015 distributable cash flow excluded $5.8 million of equity earnings for which the associated distributions from the equity affiliates were included in the distributable cash flow for the first quarter of 2015, but received in the second quarter of 2015. Distributable cash flow for the second quarter of 2015 including this amount would be $53.6 million.

























Page 8

Exhibit 99.2

 


NON-GAAP FINANCIAL MEASURES RECONCILIATION (continued)


CONSOLIDATED



Millions of Dollars

2014

2015

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

YTD


1st Qtr

2nd Qtr

3rd Qtr
4th Qtr
YTD

Reconciliation to Net Cash Provided by Operating Activities











Net cash provided by operating activities
24.6

34.6

35.5

47.7

142.4


31.4

65.4



96.8

Plus:











Net interest expense
0.4

1.3

1.4

2.1

5.2


5.8

9.5



15.3

Provision for (benefit from) income taxes
0.3

0.2

0.1

0.2

0.8


0.2

(0.1
)


0.1

Changes in working capital
6.4

0.3

(0.5
)
(6.5
)
(0.3
)

4.1

(15.9
)


(11.8
)
Undistributed equity earnings
—

—

—

—

—


5.8

(2.2
)


3.6

Accrued environmental costs
—

—

—

—

—


—

(0.1
)


(0.1
)
Other
(0.1
)
—

(0.7
)
(0.3
)
(1.1
)

(0.7
)
0.2



(0.5
)
EBITDA
31.6

36.4

35.8

43.2

147.0


46.6

56.8



103.4

Distributions in excess of equity earnings
—

—

—

—

—


0.7

0.2



0.9

Expenses indemnified or prefunded by Phillips 66
0.8

—

0.7

0.1

1.6

 
0.3

—

 
 
0.3

Transaction costs associated with acquisitions
1.5

—

0.2

1.0

2.7

 
1.4

—

 
 
1.4

EBITDA attributable to Predecessors
(10.1
)
1.2

(0.8
)
(0.6
)
(10.3
)

—

—



—

Adjusted EBITDA
23.8

37.6

35.9

43.7

141.0


49.0

57.0



106.0

Plus:


















Adjustments related to minimum volume commitments
2.3

(0.7
)
1.4

(2.4
)
0.6


1.1

2.2



3.3

Phillips 66 prefunded maintenance capital expenditures
0.7

1.1

—

0.1

1.9


—

—



—

Less:


















Net interest
—

0.1

1.7

1.4

3.2


6.5

9.5



16.0

Income taxes paid
—

0.2

—

—

0.2


—

0.4



0.4

Maintenance capital expenditures
3.5

3.4

2.2

2.8

11.9


1.7

1.5



3.2

Distributable Cash Flow
23.3

34.3

33.4

37.2

128.2


41.9

47.8



89.7

Second-quarter 2015 distributable cash flow excluded $5.8 million of equity earnings for which the associated distributions from the equity affiliates were included in the distributable cash flow for the first quarter of 2015, but received in the second quarter of 2015. Distributable cash flow for the second quarter of 2015 including this amount would be $53.6 million.







Page 9

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