Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2018shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | Phillips 66 |
Entity Central Index Key | 1,534,701 |
Trading Symbol | PSX |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Document Type | 10-Q |
Document Period End Date | Sep. 30, 2018 |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | Q3 |
Amendment Flag | false |
Entity Common Stock, Shares Outstanding | 461,125,321 |
Entity Emerging Growth Company | false |
Entity Small Business | false |
Consolidated Statement of Incom
Consolidated Statement of Income - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Revenues and Other Income | |||||
Sales and other operating revenues | [1] | $ 29,788 | $ 25,627 | $ 82,363 | $ 72,608 |
Equity in earnings of affiliates | 779 | 530 | 1,946 | 1,357 | |
Net gain on dispositions | 1 | 0 | 18 | 15 | |
Other income | 24 | 49 | 47 | 519 | |
Total Revenues and Other Income | 30,592 | 26,206 | 84,374 | 74,499 | |
Costs and Expenses | |||||
Purchased crude oil and products | 26,385 | 19,463 | 73,270 | 55,495 | |
Operating expenses | 1,206 | 1,134 | 3,595 | 3,541 | |
Selling, general and administrative expenses | 440 | 435 | 1,258 | 1,258 | |
Depreciation and amortization | 346 | 337 | 1,019 | 972 | |
Impairments | 1 | 1 | 7 | 18 | |
Taxes other than income taxes | [1] | 109 | 3,456 | 328 | 9,968 |
Accretion on discounted liabilities | 5 | 5 | 17 | 16 | |
Interest and debt expense | 125 | 112 | 383 | 324 | |
Foreign currency transaction (gains) losses | 0 | 7 | (30) | 6 | |
Total Costs and Expenses | 28,617 | 24,950 | 79,847 | 71,598 | |
Income before income taxes | 1,975 | 1,256 | 4,527 | 2,901 | |
Income tax expense | 407 | 407 | 970 | 908 | |
Net Income | 1,568 | 849 | 3,557 | 1,993 | |
Less: net income attributable to noncontrolling interests | 76 | 26 | 202 | 85 | |
Net Income Attributable to Phillips 66 | $ 1,492 | $ 823 | $ 3,355 | $ 1,908 | |
Net Income Attributable to Phillips 66 Per Share of Common Stock | |||||
Net income per share, Basic (in usd per share) | $ 3.20 | $ 1.60 | $ 7.07 | $ 3.68 | |
Net income per share, Diluted (in usd per share) | 3.18 | 1.60 | 7.03 | 3.66 | |
Dividends Paid Per Share of Common Stock (in usd per share) | $ 0.8 | $ 0.7 | $ 2.3 | $ 2.03 | |
Weighted-Average Common Shares Outstanding | |||||
Basic (in shares) | 466,109 | 512,923 | 473,760 | 517,420 | |
Diluted (in shares) | 469,440 | 515,960 | 477,220 | 520,516 | |
[1] | * Includes excise taxes on sales of petroleum products for periods prior to the adoption of Accounting Standards Update No. 2014-09 on January 1, 2018: $3,376 9,664 |
Consolidated Statement of Inc_2
Consolidated Statement of Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||
Includes excise taxes on sales of petroleum products for periods prior to the adoption of Accounting Standards Update No. 2014-09 on January 1, 2018: | $ 3,376 | $ 9,664 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income | $ 1,568 | $ 849 | $ 3,557 | $ 1,993 |
Defined benefit plans | ||||
Amortization to net income of net actuarial loss, prior service credit and settlements | 68 | 45 | 111 | 145 |
Plans sponsored by equity affiliates | 4 | 2 | 13 | 8 |
Income taxes on defined benefit plans | (18) | (17) | (30) | (56) |
Defined benefit plans, net of tax | 54 | 30 | 94 | 97 |
Foreign currency translation adjustments | (15) | 94 | (125) | 222 |
Income taxes on foreign currency translation adjustments | 1 | 1 | 2 | (8) |
Foreign currency translation adjustments, net of tax | (14) | 95 | (123) | 214 |
Cash flow hedges | 2 | 0 | 10 | 0 |
Income taxes on hedging activities | (1) | 0 | (3) | 0 |
Hedging activities, net of tax | 1 | 0 | 7 | 0 |
Other Comprehensive Income (Loss), Net of Tax | 41 | 125 | (22) | 311 |
Comprehensive Income | 1,609 | 974 | 3,535 | 2,304 |
Less: comprehensive income attributable to noncontrolling interests | 76 | 26 | 202 | 85 |
Comprehensive Income Attributable to Phillips 66 | $ 1,533 | $ 948 | $ 3,333 | $ 2,219 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 924 | $ 3,119 |
Accounts and notes receivable (net of allowances of $22 million in 2018 and $29 million in 2017) | 6,840 | 6,424 |
Accounts and notes receivable—related parties | 1,131 | 1,082 |
Inventories | 5,544 | 3,395 |
Prepaid expenses and other current assets | 875 | 370 |
Total Current Assets | 15,314 | 14,390 |
Investments and long-term receivables | 14,311 | 13,941 |
Net properties, plants and equipment | 21,625 | 21,460 |
Goodwill | 3,270 | 3,270 |
Intangibles | 874 | 876 |
Other assets | 490 | 434 |
Total Assets | 55,884 | 54,371 |
Liabilities | ||
Accounts payable | 8,444 | 7,242 |
Accounts payable—related parties | 911 | 785 |
Short-term debt | 316 | 41 |
Accrued income and other taxes | 1,151 | 1,002 |
Employee benefit obligations | 569 | 582 |
Other accruals | 583 | 455 |
Total Current Liabilities | 11,974 | 10,107 |
Long-term debt | 11,021 | 10,069 |
Asset retirement obligations and accrued environmental costs | 637 | 641 |
Deferred income taxes | 5,311 | 5,008 |
Employee benefit obligations | 793 | 884 |
Other liabilities and deferred credits | 353 | 234 |
Total Liabilities | 30,089 | 26,943 |
Equity | ||
Par value | 6 | 6 |
Capital in excess of par | 19,860 | 19,768 |
Treasury stock (at cost: 2018—184,453,242 shares; 2017—141,565,145 shares) | (14,526) | (10,378) |
Retained earnings | 18,618 | 16,306 |
Accumulated other comprehensive loss | (639) | (617) |
Total Stockholders’ Equity | 23,319 | 25,085 |
Noncontrolling interests | 2,476 | 2,343 |
Total Equity | 25,795 | 27,428 |
Total Liabilities and Equity | $ 55,884 | $ 54,371 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 22 | $ 29 |
Common stock authorized (in shares) | 2,500,000,000 | 2,500,000,000 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock issued (in shares) | 645,578,563 | 643,835,464 |
Treasury stock (in shares) | 184,453,242 | 141,565,145 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | ||
Cash Flows From Operating Activities | |||
Net income | $ 3,557 | $ 1,993 | |
Depreciation and amortization | 1,019 | 972 | |
Adjustments to reconcile net income to net cash provided by operating activities | |||
Impairments | 7 | 18 | |
Accretion on discounted liabilities | 17 | 16 | |
Deferred income taxes | 229 | 784 | |
Undistributed equity earnings | 111 | (543) | |
Net gain on dispositions | (18) | (15) | |
Gain on consolidation of business | 0 | (423) | |
Other | 118 | (234) | |
Working capital adjustments | |||
Decrease (increase) in accounts and notes receivable | (478) | (33) | |
Decrease (increase) in inventories | (2,178) | (1,228) | |
Decrease (increase) in prepaid expenses and other current assets | (509) | (106) | |
Increase (decrease) in accounts payable | 1,280 | 464 | |
Increase (decrease) in taxes and other accruals | 279 | 52 | |
Net Cash Provided by Operating Activities | 3,434 | 1,717 | |
Cash Flows From Investing Activities | |||
Capital expenditures and investments | (1,645) | (1,295) | |
Proceeds from asset dispositions | [1] | 39 | 65 |
Collection of advances/loans—related parties | 0 | 325 | |
Restricted cash received from consolidation of business | 0 | 318 | |
Other | 66 | (89) | |
Net Cash Used in Investing Activities | (1,540) | (676) | |
Cash Flows From Financing Activities | |||
Issuance of debt | 1,594 | 3,083 | |
Repayment of debt | (374) | (3,161) | |
Issuance of common stock | 39 | 23 | |
Repurchase of common stock | (4,148) | (1,127) | |
Dividends paid on common stock | (1,069) | (1,042) | |
Distributions to noncontrolling interests | (146) | (83) | |
Net proceeds from issuance of Phillips 66 Partners LP common units | 114 | 171 | |
Other | (79) | (66) | |
Net Cash Used in Financing Activities | (4,069) | (2,202) | |
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash | (20) | (3) | |
Net Change in Cash, Cash Equivalents and Restricted Cash | (2,195) | (1,164) | |
Cash, cash equivalents and restricted cash at beginning of period | 3,119 | 2,711 | |
Cash, Cash Equivalents and Restricted Cash at End of Period | $ 924 | $ 1,547 | |
[1] | Includes return of investments in equity affiliates. |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity - USD ($) $ in Millions | Total | Par Value | Capital in Excess of Par | Treasury Stock | Retained Earnings | Accum. Other Comprehensive Loss | Noncontrolling Interests |
Beginning Balance at Dec. 31, 2016 | $ 23,725 | $ 6 | $ 19,559 | $ (8,788) | $ 12,608 | $ (995) | $ 1,335 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income (Loss) | 1,993 | 1,908 | 85 | ||||
Other comprehensive income (loss) | 311 | 311 | |||||
Dividends paid on common stock | (1,042) | (1,042) | |||||
Repurchase of common stock | (1,127) | (1,127) | |||||
Benefit plan activity | 38 | 48 | (10) | ||||
Issuance of Phillips 66 Partners LP common units | 144 | 45 | 99 | ||||
Distributions to noncontrolling interests | (83) | (83) | |||||
Ending Balance at Sep. 30, 2017 | $ 23,959 | 6 | 19,652 | (9,915) | 13,464 | (684) | 1,436 |
Beginning balance, common stock issued (in shares) at Dec. 31, 2016 | 641,594,000 | ||||||
Beginning balance, treasury stock (in shares) at Dec. 31, 2016 | 122,827,000 | ||||||
Stockholders' Equity, Shares [Roll Forward] | |||||||
Repurchase of common stock (in shares) | 13,852,000 | ||||||
Shares issued - share-based compensation (in shares) | 1,826,000 | ||||||
Ending balance, common stock issued (in shares) at Sep. 30, 2017 | 643,420,000 | ||||||
Ending balance, treasury stock (in shares) at Sep. 30, 2017 | 136,679,000 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cumulative effect of accounting changes | $ 49 | 36 | 13 | ||||
Beginning Balance at Dec. 31, 2017 | 27,428 | 6 | 19,768 | (10,378) | 16,306 | (617) | 2,343 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income (Loss) | 3,557 | 3,355 | 202 | ||||
Other comprehensive income (loss) | (22) | (22) | 0 | ||||
Dividends paid on common stock | (1,069) | (1,069) | |||||
Repurchase of common stock | (4,148) | (4,148) | |||||
Benefit plan activity | 44 | 54 | (10) | ||||
Issuance of Phillips 66 Partners LP common units | 102 | 38 | 64 | ||||
Distributions to noncontrolling interests | (146) | (146) | |||||
Ending Balance at Sep. 30, 2018 | $ 25,795 | $ 6 | $ 19,860 | $ (14,526) | $ 18,618 | $ (639) | $ 2,476 |
Beginning balance, common stock issued (in shares) at Dec. 31, 2017 | 643,835,464 | ||||||
Beginning balance, treasury stock (in shares) at Dec. 31, 2017 | 141,565,145 | ||||||
Stockholders' Equity, Shares [Roll Forward] | |||||||
Repurchase of common stock (in shares) | 42,888,000 | ||||||
Shares issued - share-based compensation (in shares) | 1,744,000 | ||||||
Ending balance, common stock issued (in shares) at Sep. 30, 2018 | 645,578,563 | ||||||
Ending balance, treasury stock (in shares) at Sep. 30, 2018 | 184,453,242 |
Interim Financial Information
Interim Financial Information | 9 Months Ended |
Sep. 30, 2018 | |
Interim Financial Information [Abstract] | |
Interim Financial Information | Interim Financial Information The interim financial information presented in the financial statements included in this report is unaudited and includes all known accruals and adjustments necessary, in the opinion of management, for a fair presentation of the consolidated financial position of Phillips 66 and its results of operations and cash flows for the periods presented. Unless otherwise specified, all such adjustments are of a normal and recurring nature. Certain notes and other information have been condensed or omitted from the interim financial statements included in this report. Therefore, these interim financial statements should be read in conjunction with the consolidated financial statements and notes included in our 2017 Annual Report on Form 10-K. The results of operations for the three and nine months ended September 30, 2018 , are not necessarily indicative of the results to be expected for the full year. Certain prior period financial information has been recast to reflect the current year’s presentation. |
Changes in Accounting Principle
Changes in Accounting Principles | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Changes in Accounting Principles | Changes in Accounting Principles Effective January 1, 2018, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2017-05, “Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20),” which clarifies the scope and accounting for the sale or transfer of nonfinancial assets and in substance nonfinancial assets to noncustomers, including partial sales. This ASU eliminated the use of carryover basis for most nonmonetary exchanges, including contributions of assets to equity-method joint ventures, and could result in the entity recognizing a gain or loss on the sale or transfer of nonfinancial assets. At the time of adoption, there was no impact on our consolidated financial statements from this ASU. Effective January 1, 2018, we adopted ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,” which clarifies the definition of a business with the objective of adding guidance to assist in evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The amendment provides a screen for determining when a transaction involves an acquisition of a business. If substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset, or a group of similar identifiable assets, then the screen is met and the transaction is not considered an acquisition of a business. If the screen is not met, the amendment requires that to be considered a business, the operation must include at a minimum an input and a substantive process that together significantly contribute to the ability to create an output. The guidance may reduce the number of future transactions accounted for as business acquisitions. At the time of adoption, there was no impact on our consolidated financial statements from this ASU. Effective January 1, 2018, we adopted ASU No. 2016-16, “Income Taxes (Topic 740): Intra-Entity Asset Transfers of Assets Other Than Inventory.” This ASU requires the income tax consequences of an intra-entity transfer of an asset, other than inventory, to be recognized when the transfer occurs. At the time of adoption, this ASU did not have a material impact on our consolidated financial statements. Effective January 1, 2018, we adopted ASU No. 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” The majority of this ASU’s provisions amend only the presentation or disclosures of financial instruments; however, one provision could also affect net income. Equity investments carried under the cost method or the lower of cost or fair value method of accounting, in accordance with previous generally accepted accounting principles in the United States (GAAP), will have to be carried at fair value with changes in fair value recorded in net income. For equity investments that do not have readily determinable fair values, a company may elect to carry such investments at cost less impairments, if any, adjusted up or down for price changes in similar financial instruments issued by the investee, when and if observed. At the time of adoption, this ASU did not have a material impact on our consolidated financial statements. Effective January 1, 2018, we adopted ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” using the modified retrospective transition method applied to all contracts. Under the new guidance, recognition of revenue involves a multiple step approach including (i) identifying the contract, (ii) identifying the separate performance obligations, (iii) determining the transaction price, (iv) allocating the price to the performance obligations and (v) recognizing the revenue as the obligations are satisfied. Additional disclosures are required to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We recorded noncash cumulative effect adjustments to our opening total equity balance as of January 1, 2018, to increase retained earnings by $35 million , net of $11 million of income taxes, and noncontrolling interests by $13 million . These adjustments primarily reflected amounts recorded by our equity-method investees related to contracts that contain tier-pricing and minimum volume commitments with recovery provisions. One of our equity-method investees will adopt this ASU in 2019, and we do not expect its adoption to have a material impact on our consolidated financial statements. In addition, prospectively from January 1, 2018, our presentation of excise taxes on sales of petroleum products changed to a net basis from a gross basis. As a result, the “Sales and other operating revenues” and “Taxes other than income taxes” lines on our consolidated statement of income for the three and nine months ended September 30, 2018 , are not presented on a comparable basis to the three and nine months ended September 30, 2017 . See Note 3—Sales and Other Operating Revenues , for more information on our presentation of excise taxes on sales of petroleum products. |
Sales and Other Operating Reven
Sales and Other Operating Revenues | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Sales and Other Operating Revenues | Sales and Other Operating Revenues Our revenues are primarily associated with sales of refined petroleum products, crude oil and natural gas liquids (NGL). Each gallon, or other unit of measure of product, is separately identifiable and represents a distinct performance obligation to which the transaction price is allocated. The transaction prices of our contracts with customers are either fixed or variable, with variable pricing based upon various market indices. For our contracts that include variable consideration, we utilize the variable consideration allocation exception, whereby the variable consideration is only allocated to the performance obligations that are satisfied during the period. The related revenue is recognized at a point in time when control passes to the customer, which is when title and the risk of ownership passes to the customer and physical delivery of goods occurs, either immediately or within a fixed delivery schedule that is reasonable and customary in the industry. Effective for reporting periods ending after our adoption of ASU No. 2014-09 on January 1, 2018, excise taxes on sales of petroleum products charged to our customers are presented net of excise taxes on sales of petroleum products owed to governmental authorities in the “Taxes other than income taxes” line on our consolidated statement of income. For reporting periods ending prior to January 1, 2018, excise taxes on sales of petroleum products charged to our customers are presented in the “Sales and other operating revenues” line on our consolidated statement of income, and excise taxes on sales of petroleum products owed to governmental authorities are presented in the “Taxes other than income taxes” line on our consolidated statement of income. See Note 2—Changes in Accounting Principles , for more information regarding our adoption of this ASU. Revenues associated with pipeline transportation services are recognized at a point in time when the volumes are delivered based on contractual rates. Revenues associated with terminaling and storage services are recognized over time as the services are performed based on throughput volume or capacity utilization at contractual rates. Our products and services are billed and payments are received typically on a monthly basis, which may vary based upon the product or service offered. Disaggregated Revenues The following tables present our disaggregated sales and other operating revenues: Millions of Dollars Three Months Ended Nine Months Ended 2018 2018 Product Line and Services Refined petroleum products $ 23,184 64,975 Crude oil resales 4,747 12,316 NGL 1,782 4,751 Services and other 75 321 Consolidated sales and other operating revenues $ 29,788 82,363 Geographic Location United States $ 23,068 64,481 United Kingdom 3,085 7,623 Germany 1,135 3,174 Other foreign countries 2,500 7,085 Consolidated sales and other operating revenues $ 29,788 82,363 Contract-Related Assets and Liabilities At September 30, 2018 , and January 1, 2018, receivables from contracts with customers were $6.5 billion and $6.2 billion , respectively. Significant non-customer balances, such as buy/sell receivables and excise tax receivables, were excluded from these amounts. Our contract-related assets also include payments we make to our marketing customers related to incentive programs. An incentive payment is initially recognized as an asset and subsequently amortized as a reduction to revenue over the contract term, which generally ranges from 5 to 15 years. At September 30, 2018 , and January 1, 2018, our asset balances related to such payments were $237 million and $208 million , respectively. Our contract liabilities represent advances from our customers prior to product or service delivery. At September 30, 2018 , and January 1, 2018, contract liabilities were not material. Remaining Performance Obligations Most of our contracts with customers are spot contracts or term contracts with only variable consideration. We do not disclose remaining performance obligations for these contracts as the expected duration is one year or less or because the variable consideration has been allocated entirely to an unsatisfied performance obligation. We also have certain contracts in our Midstream segment that include minimum volume commitments with fixed pricing, most of which expire by 2021. The remaining performance obligations related to these minimum volume commitment contracts were immaterial at September 30, 2018 . |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following: Millions of Dollars September 30 December 31 Crude oil and petroleum products $ 5,245 3,106 Materials and supplies 299 289 $ 5,544 3,395 Inventories valued on the last-in, first-out (LIFO) basis totaled $5,153 million and $2,980 million at September 30, 2018 , and December 31, 2017 , respectively. The estimated excess of current replacement cost over LIFO cost of inventories amounted to approximately $6.6 billion and $4.3 billion at September 30, 2018 , and December 31, 2017 , respectively. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations Merey Sweeny, L.P. (MSLP) is a limited partnership that owns a delayed coker and related facilities at the Sweeny Refinery. In February 2017, we began accounting for MSLP as a consolidated subsidiary because the exercise of a call right triggered by certain defaults by the co-venturer, Petróleos de Venezuela S.A. (PDVSA), with respect to supply of crude oil to the Sweeny Refinery ceased to be subject to legal challenge. The purchase price for PDVSA’s 50 percent ownership interest was determined by a contractual formula. Because the distributions PDVSA received from MSLP exceeded the amounts it contributed to MSLP, the contractual formula required no cash consideration for the acquisition. Based on a third-party appraisal of the fair value of MSLP’s net assets, utilizing discounted cash flows and replacement costs, the acquisition of PDVSA’s 50 percent interest resulted in the recognition of a pre-tax gain of $423 million during the three months ended March 31, 2017. This gain was included in the “Other income” line on our consolidated statement of income. The fair value of our original equity interest in MSLP immediately prior to the deemed acquisition was $145 million . We also recorded $318 million of restricted cash, $250 million of properties, plants and equipment (PP&E) and $238 million of debt, as well as a net $93 million for the elimination of our equity investment in MSLP and net intercompany payables related to this transaction. Our acquisition accounting was finalized in the first quarter of 2017. The results of MSLP were included in our Refining segment until October 2017, when we contributed our 100 percent interest in MSLP to Phillips 66 Partners LP (Phillips 66 Partners), which is a consolidated subsidiary in our Midstream segment. |
Investments, Loans and Long-Ter
Investments, Loans and Long-Term Receivables | 9 Months Ended |
Sep. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments, Loans and Long-Term Receivables | Investments, Loans and Long-Term Receivables Equity Investments Chevron Phillips Chemical Company LLC Summarized 100 percent financial information for Chevron Phillips Chemical Company LLC ( CPChem ) was as follows: Millions of Dollars Three Months Ended Nine Months Ended 2018 2017 2018 2017 Revenues and other income $ 3,393 2,287 9,329 7,196 Income before income taxes 552 345 1,819 1,469 Net income 531 331 1,766 1,424 Gray Oak Pipeline, LLC Phillips 66 Partners has a 75 percent ownership interest in Gray Oak Pipeline, LLC (Gray Oak), an entity formed to develop and construct the Gray Oak Pipeline system which, upon completion, will provide crude oil transportation from the Permian Basin and Eagle Ford to destinations in the Corpus Christi and Freeport markets on the Texas Gulf Coast. The pipeline is expected to be placed in service by the end of 2019. Gray Oak is considered a variable interest entity (VIE) because it does not have sufficient equity at risk to fully fund the construction of all assets required for principal operations. Phillips 66 Partners has determined it is not the primary beneficiary because it and its co-venturer jointly direct the activities of Gray Oak that most significantly impact economic performance. At September 30, 2018 , Phillips 66 Partners’ maximum exposure to loss was $72 million , which represented the aggregate book value of its equity investment in Gray Oak. Rockies Express Pipeline LLC In July 2018, Rockies Express Pipeline LLC (REX) repaid $550 million of its debt, reducing its total debt to approximately $2.1 billion . REX funded the repayment through member cash contributions. Our 25 percent share was approximately $138 million and was contributed to REX in July 2018. Related Party Loans and Advances During the three months ended March 31, 2017, we received payment of the $250 million outstanding sponsor loans to the Dakota Access, LLC and Energy Transfer Crude Oil Company, LLC joint ventures. We also received payment of the $75 million outstanding principal balance of the partner loan we made to WRB Refining LP (WRB) in 2016. These cash inflows, totaling $325 million , are included in the “Collection of advances/loans—related parties” line on our consolidated statement of cash flows. |
Properties, Plants and Equipmen
Properties, Plants and Equipment | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Properties, Plants and Equipment | Properties, Plants and Equipment Our gross investment in PP&E and the associated accumulated depreciation and amortization (Accum. D&A) balances were as follows: Millions of Dollars September 30, 2018 December 31, 2017 Gross PP&E Accum. D&A Net PP&E Gross PP&E Accum. D&A Net PP&E Midstream $ 9,393 2,076 7,317 8,849 1,853 6,996 Chemicals — — — — — — Refining 22,584 9,549 13,035 22,144 8,987 13,157 Marketing and Specialties 1,641 929 712 1,658 909 749 Corporate and Other 1,163 602 561 1,091 533 558 $ 34,781 13,156 21,625 33,742 12,282 21,460 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The numerator of basic earnings per share (EPS) is net income attributable to Phillips 66, reduced by noncancelable dividends paid on unvested share-based employee awards during the vesting period (participating securities). The denominator of basic EPS is the sum of the daily weighted-average number of common shares outstanding during the periods presented and fully vested stock and unit awards that have not yet been issued as common stock. The numerator of diluted EPS is also based on net income attributable to Phillips 66, which is reduced only by dividend equivalents paid on participating securities for which the dividends are more dilutive than the participation of the awards in the earnings of the periods presented. To the extent unvested stock, unit or option awards and vested unexercised stock options are dilutive, they are included with the weighted-average common shares outstanding in the denominator. Treasury stock is excluded from the denominator in both basic and diluted EPS. Three Months Ended Nine Months Ended 2018 2017 2018 2017 Basic Diluted Basic Diluted Basic Diluted Basic Diluted Amounts attributed to Phillips 66 Common Stockholders (millions) : Net income attributable to Phillips 66 $ 1,492 1,492 823 823 3,355 3,355 1,908 1,908 Income allocated to participating securities (1 ) — (1 ) — (4 ) — (4 ) (1 ) Net income available to common stockholders $ 1,491 1,492 822 823 3,351 3,355 1,904 1,907 Weighted-average common shares outstanding (thousands) : 463,002 466,109 509,147 512,923 470,471 473,760 513,583 517,420 Effect of share-based compensation 3,107 3,331 3,776 3,037 3,289 3,460 3,837 3,096 Weighted-average common shares outstanding—EPS 466,109 469,440 512,923 515,960 473,760 477,220 517,420 520,516 Earnings Per Share of Common Stock (dollars) $ 3.20 3.18 1.60 1.60 7.07 7.03 3.68 3.66 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt Issuances In March 2018, Phillips 66 closed on a public offering of $1,500 million aggregate principal amount of unsecured notes consisting of: • $500 million of floating-rate Senior Notes due 2021. Interest on these notes is equal to the three-month London Interbank Offered Rate (LIBOR) plus 0.60% per annum and is payable quarterly in arrears on February 26, May 26, August 26 and November 26, beginning on May 29, 2018. • $800 million of 3.900% Senior Notes due 2028. Interest on these notes is payable semiannually on March 15 and September 15 of each year, beginning on September 15, 2018. • An additional $200 million of our 4.875% Senior Notes due 2044. Interest on these notes is payable semiannually on May 15 and November 15 of each year, beginning on May 15, 2018. These notes are guaranteed by Phillips 66 Company, a wholly owned subsidiary. Phillips 66 used the net proceeds from the issuance of these notes and cash on hand to repay commercial paper borrowings during the three months ended March 31, 2018, and for general corporate purposes. The commercial paper borrowings during the three months ended March 31, 2018, were primarily used to repurchase shares of our common stock; see Note 16—Treasury Stock for additional information. Debt Repayments In June 2018, Phillips 66 repaid $250 million of the $450 million outstanding under its three -year term loan facility due 2020. Debt Reclassifications In April 2018, Phillips 66’s $300 million of floating-rate notes due 2019 were reclassified from long-term to short-term debt. |
Guarantees
Guarantees | 9 Months Ended |
Sep. 30, 2018 | |
Guarantees [Abstract] | |
Guarantees | Guarantees At September 30, 2018 , we were liable for certain contingent obligations under various contractual arrangements as described below. We recognize a liability for the fair value of our obligation as a guarantor for newly issued or modified guarantees. Unless the carrying amount of the liability is noted below, we have not recognized a liability either because the guarantees were issued prior to December 31, 2002, or because the fair value of the obligation is immaterial. In addition, unless otherwise stated, we are not currently performing with any significance under the guarantee and expect future performance to be either immaterial or have only a remote chance of occurrence. Guarantees of Joint Venture Debt In December 2016, as part of the restructuring within DCP Midstream, LLC (DCP Midstream), we issued a guarantee, effective January 1, 2017, to support the debt DCP Midstream issued during the three months ended March 31, 2017. Payment would be required if DCP Midstream defaults on this debt obligation, which matures in December 2019. At September 30, 2018 , the maximum potential amount of future payments to third parties under the guarantee is estimated to be $105 million . At September 30, 2018 , we had other guarantees outstanding for our portion of certain joint venture debt obligations, which have remaining terms of up to seven years. Payment would be required if a joint venture defaults on its debt obligations. The maximum potential amount of future payments to third parties under these guarantees was approximately $134 million . Other Guarantees Under the operating lease agreement on our headquarters facility in Houston, Texas, we have a residual value guarantee with a maximum future exposure of $554 million . The operating lease term ends in June 2021 and provides us the option, at the end of the lease term, to request to renew the lease, purchase the facility or assist the lessor in marketing it for resale. We also have residual value guarantees associated with railcar and airplane leases with maximum future exposures totaling $319 million , which have remaining terms of up to five years. For one of our railcar leases, we estimated a total residual value deficiency of $56 million based on a third-party appraisal of the railcars’ expected fair value at the end of the lease term in May 2019. The total residual value deficiency is our estimate of the amount we will owe to the lessor at the end of the lease term and is recognized as expense over the remaining lease term. During the nine months ended September 30, 2018 , we recognized $19 million of expense related to the residual value deficiency. At September 30, 2018 , the remaining unrecognized residual value deficiency was $17 million . Indemnifications Over the years, we have entered into various agreements to sell ownership interests in certain corporations, joint ventures and assets that gave rise to indemnification. Agreements associated with these sales include indemnifications for taxes, litigation, environmental liabilities, permits and licenses and employee claims, as well as real estate indemnity against tenant defaults. The provisions of these indemnifications vary greatly. The majority of these indemnifications are related to environmental issues, which generally have indefinite terms and potentially unlimited exposure. At September 30, 2018 , the carrying amount recorded for indemnifications was $178 million . We amortize the indemnification liability over the relevant time period, if one exists, based on the facts and circumstances surrounding each type of indemnity. In cases where the indemnification term is indefinite, we will reverse the liability when we have information to support that the liability was essentially relieved or amortize the liability over an appropriate time period as the fair value of our indemnification exposure declines. Although it is reasonably possible future payments may exceed amounts recorded, due to the nature of the indemnifications, it is not possible to make a reasonable estimate of the maximum potential amount of future payments. At September 30, 2018 , environmental accruals for known contaminations of $107 million were included in the recorded carrying amount for indemnifications. These accruals were primarily included in the “Asset retirement obligations and accrued environmental costs” line on our consolidated balance sheet. For additional information about environmental liabilities, see Note 11—Contingencies and Commitments . Indemnification and Release Agreement In 2012, in connection with our separation from ConocoPhillips (the Separation), we entered into the Indemnification and Release Agreement. This agreement governs the treatment between ConocoPhillips and us of matters relating to indemnification, insurance, litigation responsibility and management, and litigation document sharing and cooperation arising in connection with the Separation. Generally, the agreement provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of our business with us and financial responsibility for the obligations and liabilities of ConocoPhillips’ business with ConocoPhillips. The agreement also establishes procedures for handling claims subject to indemnification and related matters. |
Contingencies and Commitments
Contingencies and Commitments | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Commitments | Contingencies and Commitments A number of lawsuits involving a variety of claims that arose in the ordinary course of business have been filed against us or are subject to indemnifications provided by us. We also may be required to remove or mitigate the effects on the environment of the placement, storage, disposal or release of certain chemical, mineral and petroleum substances at various active and inactive sites. We regularly assess the need for financial recognition or disclosure of these contingencies. In the case of all known contingencies (other than those related to income taxes), we accrue a liability when the loss is probable and the amount is reasonably estimable. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. We do not reduce these liabilities for potential insurance or third-party recoveries. If applicable, we accrue receivables for probable insurance or other third-party recoveries. In the case of income-tax-related contingencies, we use a cumulative probability-weighted loss accrual in cases where sustaining a tax position is less than certain. Based on currently available information, we believe it is remote that future costs related to known contingent liability exposures will exceed current accruals by an amount that would have a material adverse impact on our consolidated financial statements. As we learn new facts concerning contingencies, we reassess our position both with respect to accrued liabilities and other potential exposures. Estimates particularly sensitive to future changes include contingent liabilities recorded for environmental remediation, tax and legal matters. Estimated future environmental remediation costs are subject to change due to such factors as the uncertain magnitude of cleanup costs, the unknown time and extent of such remedial actions that may be required, and the determination of our liability in proportion to that of other potentially responsible parties. Estimated future costs related to tax and legal matters are subject to change as events evolve and as additional information becomes available during the administrative and litigation processes. Environmental We are subject to international, federal, state and local environmental laws and regulations. When we prepare our consolidated financial statements, we record accruals for environmental liabilities based on management’s best estimates, using all information available at the time. We measure estimates and base contingent liabilities on currently available facts, existing technology and presently enacted laws and regulations, taking into account stakeholder and business considerations. When measuring contingent environmental liabilities, we also consider our prior experience in remediation of contaminated sites, other companies’ cleanup experience, and data released by the U.S. Environmental Protection Agency (EPA) or other organizations. We consider unasserted claims in our determination of environmental liabilities, and we accrue them in the period they are both probable and reasonably estimable. Although liability for environmental remediation costs is generally joint and several for federal sites and frequently so for state sites, we are usually only one of many companies alleged to have liability at a particular site. Due to such joint and several liabilities, we could be responsible for all cleanup costs related to any site at which we have been designated as a potentially responsible party. We have been successful to date in sharing cleanup costs with other financially sound companies. Many of the sites at which we are potentially responsible are still under investigation by the EPA or the state agencies concerned. Prior to actual cleanup, those potentially responsible normally assess the site conditions, apportion responsibility and determine the appropriate remediation. In some instances, we may have no liability or may attain a settlement of liability. Where it appears that other potentially responsible parties may be financially unable to bear their proportional share, we consider this inability in estimating our potential liability, and we adjust our accruals accordingly. As a result of various acquisitions in the past, we assumed certain environmental obligations. Some of these environmental obligations are mitigated by indemnifications made by others for our benefit, although some of the indemnifications are subject to dollar and time limits. We are currently participating in environmental assessments and cleanups at numerous federal Superfund and comparable state sites. After an assessment of environmental exposures for cleanup and other costs, we make accruals on an undiscounted basis (except those pertaining to sites acquired in a business combination, which we record on a discounted basis) for planned investigation and remediation activities for sites where it is probable future costs will be incurred and these costs can be reasonably estimated. At September 30, 2018 , our total environmental accrual was $456 million , compared with $458 million at December 31, 2017 . We expect to incur a substantial amount of these expenditures within the next 30 years. We have not reduced these accruals for possible insurance recoveries. In the future, we may be involved in additional environmental assessments, cleanups and proceedings. Legal Proceedings Our legal organization applies its knowledge, experience and professional judgment to the specific characteristics of our cases, employing a litigation management process to manage and monitor the legal proceedings against us. Our process facilitates the early evaluation and quantification of potential exposures in individual cases and enables the tracking of those cases that have been scheduled for trial and/or mediation. Based on professional judgment and experience in using these litigation management tools and available information about current developments in all our cases, our legal organization regularly assesses the adequacy of current accruals and determines if adjustment of existing accruals, or establishment of new accruals, is required. Other Contingencies We have contingent liabilities resulting from throughput agreements with pipeline and processing companies not associated with financing arrangements. Under these agreements, we may be required to provide any such company with additional funds through advances and penalties for fees related to throughput capacity not utilized. At September 30, 2018 , we had performance obligations secured by letters of credit and bank guarantees of $628 million related to various purchase and other commitments incident to the ordinary conduct of business. |
Derivatives and Financial Instr
Derivatives and Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Financial Instruments | Derivatives and Financial Instruments Derivative Instruments We use financial and commodity-based derivative contracts to manage exposures to fluctuations in commodity prices, interest rates and foreign currency exchange rates, or to capture market opportunities. Because we do not apply hedge accounting for commodity derivative contracts, all realized and unrealized gains and losses from commodity derivative contracts are recognized in our consolidated statement of income. Gains and losses from derivative contracts held for trading not directly related to our physical business are reported net in the “Other income” line on our consolidated statement of income. Cash flows from all our derivative activity for the periods presented appear in the operating section on our consolidated statement of cash flows. Purchase and sales contracts with firm minimum notional volumes for commodities that are readily convertible to cash are recorded on our consolidated balance sheet as derivatives unless the contracts are eligible for, and we elect, the normal purchases and normal sales exception, whereby the contracts are recorded on an accrual basis. We generally apply the normal purchases and normal sales exception to eligible crude oil, refined petroleum products, NGL, natural gas and power commodity contracts to purchase or sell quantities we expect to use or sell in the normal course of business. All other derivative instruments are recorded at fair value on our consolidated balance sheet. For further information on the fair value of derivatives, see Note 13—Fair Value Measurements . Commodity Derivative Contracts —We sell into or receive supply from the worldwide crude oil, refined petroleum products, NGL, natural gas and electric power markets, exposing our revenues, purchases, cost of operating activities and cash flows to fluctuations in the prices for these commodities. Generally, our policy is to remain exposed to the market prices of commodities; however, we use futures, forwards, swaps and options in various markets to balance physical systems, meet customer needs, manage price exposures on specific transactions, and do a limited, immaterial amount of trading not directly related to our physical business, all of which may reduce our exposure to fluctuations in market prices. We also use the market knowledge gained from these activities to capture market opportunities such as moving physical commodities to more profitable locations, storing commodities to capture seasonal or time premiums, and blending commodities to capture quality upgrades. The following table indicates the consolidated balance sheet line items that include the fair values of commodity derivative assets and liabilities. The balances in the following table are presented on a gross basis, before the effects of counterparty and collateral netting. However, we have elected to present our commodity derivative assets and liabilities with the same counterparty on a net basis on our consolidated balance sheet when the right of setoff exists. Millions of Dollars September 30, 2018 December 31, 2017 Commodity Derivatives Effect of Collateral Netting Net Carrying Value Presented on the Balance Sheet Commodity Derivatives Effect of Collateral Netting Net Carrying Value Presented on the Balance Sheet Assets Liabilities Assets Liabilities Assets Prepaid expenses and other current assets $ 58 (30 ) (4 ) 24 43 (19 ) — 24 Other assets 11 (3 ) — 8 7 (3 ) — 4 Liabilities Other accruals 1,078 (1,274 ) 155 (41 ) 699 (746 ) 21 (26 ) Other liabilities and deferred credits 25 (26 ) — (1 ) — (1 ) — (1 ) Total $ 1,172 (1,333 ) 151 (10 ) 749 (769 ) 21 1 At September 30, 2018 , and December 31, 2017 , there was no material cash collateral received or paid that was not offset on our consolidated balance sheet. The realized and unrealized gains (losses) incurred from commodity derivatives, and the line items where they appear on our consolidated statement of income, were: Millions of Dollars Three Months Ended Nine Months Ended 2018 2017 2018 2017 Sales and other operating revenues $ (98 ) (256 ) (227 ) (101 ) Other income 3 33 (17 ) 46 Purchased crude oil and products (138 ) (111 ) (311 ) 16 Net loss from commodity derivative activity $ (233 ) (334 ) (555 ) (39 ) The following table summarizes our material net exposures resulting from outstanding commodity derivative contracts. These financial and physical derivative contracts are primarily used to manage price exposure on our underlying operations. The underlying exposures may be from non-derivative positions such as inventory volumes. Financial derivative contracts may also offset physical derivative contracts, such as forward sales contracts. The percentage of our derivative contract volumes expiring within the next 12 months was at least 98 percent at September 30, 2018 , and December 31, 2017 . Open Position Long / (Short) September 30 December 31 Commodity Crude oil, refined petroleum products and NGL (millions of barrels) (45 ) (11 ) Interest Rate Derivative Contracts —In 2016, we entered into interest rate swaps to hedge the variability of lease payments on our new headquarters. These monthly lease payments vary based on monthly changes in the one-month LIBOR and changes, if any, in our credit rating over the five -year term of the lease. The pay-fixed, receive-floating interest rate swaps have an aggregate notional value of $650 million and end in April 2021. We have designated these swaps as cash-flow hedges. The aggregate net fair value of these swaps, which is included in the “Prepaid expenses and other current assets” and “Other assets” lines on our consolidated balance sheet, totaled $24 million and $14 million at September 30, 2018 , and December 31, 2017 , respectively. We report the mark-to-market gains or losses on our interest rate swaps designated as highly effective cash-flow hedges as a component of other comprehensive income (loss), and reclassify such gains and losses into earnings in the same period during which the hedged transaction affects earnings. Net realized gains and losses from settlements of the swaps were immaterial for the three and nine months ended September 30, 2018 and 2017 . We currently estimate that pre-tax gains of $8 million will be reclassified from accumulated other comprehensive loss into general and administrative expenses during the next twelve months as the hedged transactions settle; however, the actual amounts that will be reclassified will vary based on changes in interest rates. Credit Risk Financial instruments potentially exposed to concentrations of credit risk consist primarily of over-the-counter (OTC) derivative contracts and trade receivables. The credit risk from our OTC derivative contracts, such as forwards and swaps, derives from the counterparty to the transaction. Individual counterparty exposure is managed within predetermined credit limits and includes the use of cash-call margins when appropriate, thereby reducing the risk of significant nonperformance. We also use futures, swaps and option contracts that have a negligible credit risk because these trades are cleared with an exchange clearinghouse and subject to mandatory margin requirements until settled. However, we are exposed to the credit risk of those exchange brokers for receivables arising from daily margin cash calls, as well as for cash deposited to meet initial margin requirements. Our trade receivables result primarily from the sale of products from, or related to, our refinery operations and reflect a broad national and international customer base, which limits our exposure to concentrations of credit risk. The majority of these receivables have payment terms of 30 days or less . We continually monitor this exposure and the creditworthiness of the counterparties and recognize bad debt expense based on historical write-off experience or specific counterparty collectability. Generally, we do not require collateral to limit the exposure to loss; however, we will sometimes use letters of credit, prepayments or master netting arrangements to mitigate credit risk with counterparties that both buy from and sell to us, as these agreements permit the amounts owed by us or owed to others to be offset against amounts due to us. Certain of our derivative instruments contain provisions that require us to post collateral if the derivative exposure exceeds a threshold amount. We have contracts with fixed threshold amounts and other contracts with variable threshold amounts that are contingent on our credit rating. The variable threshold amounts typically decline for lower credit ratings, while both the variable and fixed threshold amounts typically revert to zero if our credit ratings fall below investment grade. Cash is the primary collateral in all contracts; however, many contracts also permit us to post letters of credit as collateral. The aggregate fair values of all derivative instruments with such credit-risk-related contingent features that were in a liability position were immaterial at September 30, 2018 , and December 31, 2017 . |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Recurring Fair Value Measurements We carry certain assets and liabilities at fair value, which we measure at the reporting date using an exit price (i.e., the price that would be received to sell an asset or paid to transfer a liability), and disclose the quality of these fair values based on the valuation inputs used in these measurements under the following hierarchy: • Level 1: Fair value measured with unadjusted quoted prices from an active market for identical assets or liabilities. • Level 2: Fair value measured either with: (1) adjusted quoted prices from an active market for similar assets or liabilities; or (2) other valuation inputs that are directly or indirectly observable. • Level 3: Fair value measured with unobservable inputs that are significant to the measurement. We classify the fair value of an asset or liability based on the significance of its observable or unobservable inputs to the measurement. However, the fair value of an asset or liability initially reported as Level 3 will be subsequently reported as Level 2 if the unobservable inputs become inconsequential to its measurement or corroborating market data becomes available. Conversely, an asset or liability initially reported as Level 2 will be subsequently reported as Level 3 if corroborating market data becomes unavailable. For the nine months ended September 30, 2018 , derivative assets with an aggregate value of $244 million and derivative liabilities with an aggregate value of $244 million were transferred to Level 1 from Level 2, as measured from the beginning of the reporting period. The measurements were reclassified within the fair value hierarchy due to the availability of unadjusted quoted prices from an active market. We used the following methods and assumptions to estimate the fair value of financial instruments: • Cash and cash equivalents —The carrying amount reported on our consolidated balance sheet approximates fair value. • Accounts and notes receivable —The carrying amount reported on our consolidated balance sheet approximates fair value. • Derivative instruments —We fair value our exchange-traded contracts based on quoted market prices obtained from the New York Mercantile Exchange, the Intercontinental Exchange or other exchanges, and classify them as Level 1 in the fair value hierarchy. When exchange-cleared contracts lack sufficient liquidity, or are valued using either adjusted exchange-provided prices or non-exchange quotes, we classify those contracts as Level 2. Physical commodity forward purchase and sales contracts are generally valued using forward quotes provided by brokers and price index developers, such as Platts and Oil Price Information Service. We corroborate these quotes with market data and classify the resulting fair values as Level 2. When forward market prices are not available, we estimate fair value using the forward price of a similar commodity, adjusted for the difference in quality or location. In certain less liquid markets or for longer-term contracts, forward prices are not as readily available. In these circumstances, physical commodity purchase and sales contracts are valued using internally developed methodologies that consider historical relationships among various commodities that result in management’s best estimate of fair value. We classify these contracts as Level 3. Physical commodity options are valued using industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and contractual prices for the underlying instruments, as well as other relevant economic measures. The degree to which these inputs are observable in the forward markets determines whether the options are classified as Level 2 or 3. We use a mid-market pricing convention (the mid-point between bid and ask prices). When appropriate, valuations are adjusted to reflect credit considerations, generally based on available market evidence. We determine the fair value of our interest rate swaps based on observed market valuations for interest rate swaps that have notional values, terms and pay and reset frequencies similar to ours. • Rabbi trust assets —These deferred compensation investments are measured at fair value using unadjusted quoted prices available from national securities exchanges and are therefore categorized as Level 1 in the fair value hierarchy. • Debt —The carrying amount of our floating-rate debt approximates fair value. The fair value of our fixed-rate debt is estimated based on observable market prices. The following tables display the fair value hierarchy for our material financial assets and liabilities either accounted for or disclosed at fair value on a recurring basis. These values are determined by treating each contract as the fundamental unit of account; therefore, derivative assets and liabilities with the same counterparty are shown on a gross basis in the hierarchy sections of these tables, before the effects of counterparty and collateral netting. These tables also show that our Level 3 activity was immaterial. We have master netting agreements for all of our exchange-cleared derivative instruments and certain of our physical commodity forward contracts (primarily pipeline crude oil deliveries). The following tables show the impact of these agreements in the column “Effect of Counterparty Netting.” The carrying values and fair values by hierarchy of our material financial instruments and commodity forward contracts, either carried or disclosed at fair value, including any effects of netting derivative assets with liabilities and netting collateral due to right of setoff or master netting agreements, were: Millions of Dollars September 30, 2018 Fair Value Hierarchy Total Fair Value of Gross Assets & Liabilities Effect of Counterparty Netting Effect of Collateral Netting Difference in Carrying Value and Fair Value Net Carrying Value Presented on the Balance Sheet Level 1 Level 2 Level 3 Commodity Derivative Assets Exchange-cleared instruments $ 672 480 — 1,152 (1,136 ) (4 ) — 12 Physical forward contracts — 19 1 20 — — — 20 Interest rate derivatives — 24 — 24 — — — 24 Rabbi trust assets 121 — — 121 N/A N/A — 121 $ 793 523 1 1,317 (1,136 ) (4 ) — 177 Commodity Derivative Liabilities Exchange-cleared instruments $ 790 501 — 1,291 (1,136 ) (155 ) — — Physical forward contracts — 38 4 42 — — — 42 Floating-rate debt — 1,375 — 1,375 N/A N/A — 1,375 Fixed-rate debt, excluding capital leases — 10,132 — 10,132 N/A N/A (359 ) 9,773 $ 790 12,046 4 12,840 (1,136 ) (155 ) (359 ) 11,190 Millions of Dollars December 31, 2017 Fair Value Hierarchy Total Fair Value of Gross Assets & Liabilities Effect of Counterparty Netting Effect of Collateral Netting Difference in Carrying Value and Fair Value Net Carrying Value Presented on the Balance Sheet Level 1 Level 2 Level 3 Commodity Derivative Assets Exchange-cleared instruments $ 333 395 — 728 (721 ) — — 7 Physical forward contracts — 20 1 21 — — — 21 Interest rate derivatives — 14 — 14 — — — 14 Rabbi trust assets 112 — — 112 N/A N/A — 112 $ 445 429 1 875 (721 ) — — 154 Commodity Derivative Liabilities Exchange-cleared instruments $ 369 373 — 742 (721 ) (21 ) — — Physical forward contracts — 23 4 27 — — — 27 Floating-rate debt — 1,150 — 1,150 N/A N/A — 1,150 Fixed-rate debt, excluding capital leases — 9,746 — 9,746 N/A N/A (978 ) 8,768 $ 369 11,292 4 11,665 (721 ) (21 ) (978 ) 9,945 The rabbi trust assets are recorded in the “Investments and long-term receivables” line and the floating-rate and fixed-rate debt are recorded in the “Short-term debt” and “Long-term debt” lines on our consolidated balance sheet. For information regarding the location of our commodity derivative assets and liabilities on our consolidated balance sheet, see the first table in Note 12—Derivatives and Financial Instruments . Nonrecurring Fair Value Measurements See Note 5—Business Combinations , for information on the remeasurement of our investment in MSLP to fair value in 2017. During the nine months ended September 30, 2018 and 2017 , there were no other material nonrecurring fair value remeasurements of assets subsequent to their initial recognition. |
Pension and Postretirement Plan
Pension and Postretirement Plans | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Pension and Postretirement Plans | Pension and Postretirement Plans The components of net periodic benefit cost for the three and nine months ended September 30, 2018 and 2017 , were as follows: Millions of Dollars Pension Benefits Other Benefits 2018 2017 2018 2017 U.S. Int’l. U.S. Int’l. Components of Net Periodic Benefit Cost Three Months Ended September 30 Service cost $ 34 5 33 8 2 1 Interest cost 26 6 27 7 1 2 Expected return on plan assets (42 ) (11 ) (37 ) (11 ) — — Amortization of prior service cost — — 1 — — — Recognized net actuarial loss 14 5 17 6 — — Settlements 49 — 21 — — — Net periodic benefit cost* $ 81 5 62 10 3 3 Nine Months Ended September 30 Service cost $ 102 22 99 25 5 4 Interest cost 78 21 81 20 5 6 Expected return on plan assets (127 ) (35 ) (110 ) (30 ) — — Amortization of prior service cost (credit) — (1 ) 2 (1 ) (1 ) (1 ) Recognized net actuarial loss 44 15 52 18 — — Settlements 54 — 76 — — — Net periodic benefit cost* $ 151 22 200 32 9 9 * Included in the “Operating expenses” and “Selling, general and administrative expenses” lines on our consolidated statement of income. During the nine months ended September 30, 2018 , we contributed $133 million to our U.S. employee benefit plans and $26 million to our international employee benefit plans. We currently expect to make additional contributions of approximately $20 million to our U.S. employee benefit plans and $10 million to our international employee benefit plans during the remainder of 2018 . During 2018 and 2017, lump-sum benefit payments exceeded the sum of service and interest costs for our U.S. pension plans. As a result, we recognized a proportionate share of prior actuarial losses, or pension settlement expense, totaling $54 million and $76 million for the nine months ended September 30, 2018 and 2017, respectively. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Changes in the balances of each component of accumulated other comprehensive loss were as follows: Millions of Dollars Defined Benefit Plans Foreign Currency Translation Hedging Accumulated Other Comprehensive Loss December 31, 2016 $ (713 ) (285 ) 3 (995 ) Other comprehensive income before reclassifications 5 214 — 219 Amounts reclassified from accumulated other comprehensive loss* Amortization of defined benefit plan items** Net actuarial loss, prior service credit and settlements 92 — — 92 Net current period other comprehensive income 97 214 — 311 September 30, 2017 $ (616 ) (71 ) 3 (684 ) December 31, 2017 $ (598 ) (26 ) 7 (617 ) Other comprehensive income (loss) before reclassifications 10 (113 ) 9 (94 ) Amounts reclassified from accumulated other comprehensive loss Amortization of defined benefit plan items** Net actuarial loss, prior service credit and settlements 84 — — 84 Foreign currency translation — (10 ) — (10 ) Hedging — — (2 ) (2 ) Net current period other comprehensive income (loss) 94 (123 ) 7 (22 ) September 30, 2018 $ (504 ) (149 ) 14 (639 ) * There were no significant reclassifications related to hedging or foreign currency translation in the prior year period. ** Included in the computation of net periodic benefit cost. See Note 14—Pension and Postretirement Plans , for additional information. |
Treasury Stock
Treasury Stock | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Treasury Stock | Treasury Stock In February 2018, we entered into a Stock Purchase and Sale Agreement (Purchase Agreement) with Berkshire Hathaway Inc. and National Indemnity Company, a wholly owned subsidiary of Berkshire Hathaway, to repurchase 35 million shares of Phillips 66 common stock for an aggregate purchase price of $3,280 million . Pursuant to the Purchase Agreement, the purchase price per share of $93.725 was based on the volume-weighted-average price of our common stock on the New York Stock Exchange on February 13, 2018. The transaction closed in February 2018. We funded the repurchase with cash of $1,880 million and borrowings of $1,400 million under our commercial paper program. These borrowings were subsequently refinanced through a public offering of senior notes in March 2018. This specific share repurchase transaction was separately authorized by our Board of Directors and therefore does not impact previously announced authorizations to repurchase shares of Phillips 66 common stock under our share repurchase program, which total up to $12.0 billion . See Note 9—Debt , for additional information regarding our borrowing activity during the nine months ended September 30, 2018 . |
Restricted Cash
Restricted Cash | 9 Months Ended |
Sep. 30, 2018 | |
Restricted Cash and Investments [Abstract] | |
Restricted Cash | Restricted Cash At September 30, 2018 , and December 31, 2017 , the company did not have any restricted cash. The restrictions on the cash acquired in February 2017, as a result of the consolidation of MSLP, were fully removed in May 2017 when MSLP’s outstanding debt that contained lender restrictions on the use of cash was paid in full. See Note 5— Business Combinations , for additional information regarding our consolidation of MSLP. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Significant transactions with related parties were: Millions of Dollars Three Months Ended Nine Months Ended 2018 2017 2018 2017 Operating revenues and other income (a) $ 955 638 2,717 1,778 Purchases (b) 3,667 2,557 9,534 6,932 Operating expenses and selling, general and administrative expenses (c) 12 13 44 52 (a) We sold NGL and other petrochemical feedstocks, along with solvents, to CPChem, gas oil and hydrogen feedstocks to Excel Paralubes (Excel), and refined petroleum products to OnCue Holdings, LLC. We also sold certain feedstocks and intermediate products to WRB and acted as agent for WRB in supplying crude oil and other feedstocks for a fee. In addition, we charged several of our affiliates, including CPChem, for the use of common facilities, such as steam generators, waste and water treaters and warehouse facilities. (b) We purchased crude oil and refined petroleum products from WRB and also acted as agent for WRB in distributing solvents. We also purchased natural gas and NGL from DCP Midstream and CPChem, as well as other feedstocks from various affiliates, for use in our refinery and fractionation processes. In addition, we purchased base oils and fuel products from Excel for use in our specialty and refining businesses. We paid NGL fractionation fees to CPChem. We also paid fees to various pipeline affiliates for transporting crude oil, refined petroleum products and NGL. (c) We paid utility and processing fees to various affiliates. |
Segment Disclosures and Related
Segment Disclosures and Related Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Disclosures and Related Information | Segment Disclosures and Related Information Our operating segments are: 1) Midstream— Provides crude oil and refined petroleum products transportation, terminaling and processing services, as well as natural gas, NGL and liquefied petroleum gas (LPG) transportation, storage, processing and marketing services, mainly in the United States. The Midstream segment includes our master limited partnership, Phillips 66 Partners, as well as our 50 percent equity investment in DCP Midstream. 2) Chemicals— Consists of our 50 percent equity investment in CPChem, which manufactures and markets petrochemicals and plastics on a worldwide basis. 3) Refining— Refines crude oil and other feedstocks into petroleum products (such as gasoline, distillates and aviation fuels) at 13 refineries in the United States and Europe. 4) Marketing and Specialties— Purchases for resale and markets refined petroleum products, mainly in the United States and Europe. In addition, this segment includes the manufacturing and marketing of specialty products, as well as power generation operations. Corporate and Other includes general corporate overhead, interest expense, our investments in new technologies and various other corporate activities. Corporate assets include all cash and cash equivalents. During the fourth quarter of 2017, the segment performance measure used by our chief executive officer to assess performance and allocate resources was changed from “net income attributable to Phillips 66” to “net income.” This change reflects the recognition that management does not differentiate between those earnings attributable to Phillips 66 and those attributable to noncontrolling interests when making operating and resource allocation decisions impacting segment performance. Prior period segment information has been recast to conform to the current presentation. Intersegment sales are at prices that we believe approximate market. Analysis of Results by Operating Segment Millions of Dollars Three Months Ended Nine Months Ended 2018 2017 2018 2017 Sales and Other Operating Revenues Midstream Total sales $ 2,287 1,433 6,234 4,467 Intersegment eliminations (524 ) (433 ) (1,555 ) (1,260 ) Total Midstream 1,763 1,000 4,679 3,207 Chemicals 1 2 4 4 Refining Total sales 21,949 16,499 61,707 46,014 Intersegment eliminations (12,807 ) (10,461 ) (37,027 ) (28,641 ) Total Refining 9,142 6,038 24,680 17,373 Marketing and Specialties Total sales 19,332 18,887 54,471 52,903 Intersegment eliminations (457 ) (306 ) (1,492 ) (900 ) Total Marketing and Specialties 18,875 18,581 52,979 52,003 Corporate and Other 7 6 21 21 Consolidated sales and other operating revenues $ 29,788 25,627 82,363 72,608 Net Income (Loss) Midstream $ 240 117 675 325 Chemicals 210 121 704 498 Refining 936 550 1,937 1,033 Marketing and Specialties 318 208 739 563 Corporate and Other (136 ) (147 ) (498 ) (426 ) Consolidated net income $ 1,568 849 3,557 1,993 Millions of Dollars September 30 December 31 Total Assets Midstream $ 14,123 13,231 Chemicals 6,378 6,226 Refining 25,959 23,820 Marketing and Specialties 7,581 7,103 Corporate and Other 1,843 3,991 Consolidated total assets $ 55,884 54,371 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective income tax rate for the three and nine months ended September 30, 2018 , was 21 percent , compared with 32 percent and 31 percent for the corresponding periods of 2017 . The decrease was primarily attributable to the enactment of the U.S. Tax Cuts and Jobs Act (the Tax Act) in December 2017, which reduced the U.S. federal corporate income tax rate from 35 percent to 21 percent beginning January 1, 2018. The effective income tax rates in the 2018 periods did not vary from the U.S. federal statutory income tax rate of 21 percent as the effect of state income tax expense was primarily offset by adjustments to the provisional income tax benefit related to the Tax Act, and the tax benefits associated with our foreign operations and income attributable to noncontrolling interests. During the three and nine months ended September 30, 2018 , we recorded income tax benefits of $49 million and $20 million , respectively, to adjust the provisional income tax benefit recorded in December 2017 upon enactment of the Tax Act. The adjustments to date were primarily due to the revision of our estimated deferred income tax balances in conjunction with the filing of our 2017 income tax return and the issuance of additional guidance by the U.S. Internal Revenue Service related to the calculation of the one-time deemed repatriation tax. We have not yet completed our accounting for the income tax effects of the Tax Act; however, we have made reasonable estimates of the effects on our existing deferred income tax balances and the one-time deemed repatriation tax. The final financial statement impact of the Tax Act may differ from our previously recorded estimates, possibly materially, due to, among other things, changes in interpretations of the Tax Act, any legislative action to address questions that arise because of the Tax Act, and changes in accounting standards for income taxes or related interpretations in response to the Tax Act, or any updates or changes to estimates the company has utilized to calculate the provisional impacts. The U.S. Securities and Exchange Commission has issued rules that allow for a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related income tax impacts. |
Phillips 66 Partners LP
Phillips 66 Partners LP | 9 Months Ended |
Sep. 30, 2018 | |
Limited Liability Company or Limited Partnership, Business Organization and Operations [Abstract] | |
Phillips 66 Partners LP | Phillips 66 Partners LP In 2013, we formed Phillips 66 Partners, a publicly traded master limited partnership, to own, operate, develop and acquire primarily fee-based crude oil, refined petroleum products and NGL pipelines, terminals and other midstream assets. Headquartered in Houston, Texas, Phillips 66 Partners’ operations currently consist of crude oil, refined petroleum products and NGL transportation, processing, terminaling and storage assets. We consolidate Phillips 66 Partners because we determined it is a VIE of which we are the primary beneficiary. As general partner of Phillips 66 Partners, we have the ability to control its financial interests, as well as the ability to direct the activities that most significantly impact its economic performance. As a result of this consolidation, the public common and perpetual convertible preferred unitholders’ ownership interests in Phillips 66 Partners are reflected as noncontrolling interests in our financial statements. At September 30, 2018 , we owned a 54 percent limited partner interest and a 2 percent general partner interest in Phillips 66 Partners, while the public owned a 44 percent limited partner interest and 13.8 million perpetual convertible preferred units. The most significant assets of Phillips 66 Partners that are available to settle only its obligations, along with its most significant liabilities for which its creditors do not have recourse to Phillips 66’s general credit, were: Millions of Dollars September 30 December 31 Cash and cash equivalents $ 100 185 Equity investments* 2,215 1,932 Net properties, plants and equipment 2,999 2,918 Long-term debt 2,922 2,920 * Included in “Investments and long-term receivables” line on the Phillips 66 consolidated balance sheet. Financing Activities Phillips 66 Partners’ initial $250 million continuous offering of common units, or at-the-market (ATM) program, was completed in June 2018. At that time, Phillips 66 Partners commenced issuing common units under its second $250 million ATM program. For the nine months ended September 30, 2018 and 2017 , on a settlement-date basis, Phillips 66 Partners generated net proceeds of $114 million and $171 million , respectively, from common units issued under the ATM programs. Since inception through September 30, 2018 , the ATM programs generated net proceeds of $306 million . |
New Accounting Standards
New Accounting Standards | 9 Months Ended |
Sep. 30, 2018 | |
New Accounting Standards [Abstract] | |
New Accounting Standards | New Accounting Standards In February 2018, the FASB issued ASU No. 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This ASU allows for the deferred income tax effects stranded in accumulated other comprehensive income (AOCI) resulting from the Tax Act enacted in December 2017 to be reclassed from AOCI to retained earnings. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the impact of this ASU on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The new standard amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which may result in earlier recognition of losses. Public business entities should apply the guidance in ASU No. 2016-13 for annual periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption will be permitted for annual periods beginning after December 15, 2018. We are currently evaluating the provisions of ASU No. 2016-13 and assessing the impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will continue to be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Similarly, lessors will be required to classify leases as sales-type, finance or operating, with classification affecting the pattern of income recognition. Classification for both lessees and lessors will be based on an assessment of whether risks and rewards, as well as substantive control have been transferred through a lease contract. Public business entities should apply the guidance in ASU No. 2016-02 for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted. We plan to adopt ASU No. 2016-02 by recognizing a cumulative-effect adjustment to the opening balance of retained earnings as of our adoption date of January 1, 2019. We are currently evaluating the provisions of ASU No. 2016-02 and assessing its impact on our consolidated financial statements. As part of our assessment to-date, we have formed an implementation team, selected a software package, and completed software design and configuration within a test environment. Furthermore, we continue to load our lease population into the software and test the software configuration, lease data and system reports. We expect the adoption of ASU No. 2016-02 will materially gross up our consolidated balance sheet with the recognition of the ROU assets and operating lease liabilities. The impact to our consolidated statements of income and cash flows is not expected to be material. The new standard will also require additional disclosures for financing and operating leases. |
Condensed Consolidating Financi
Condensed Consolidating Financial Information | 9 Months Ended |
Sep. 30, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Consolidating Financial Information | Condensed Consolidating Financial Information Phillips 66 has senior notes outstanding, the payment obligations of which are fully and unconditionally guaranteed by Phillips 66 Company, a 100-percent-owned subsidiary. The following condensed consolidating financial information presents the results of operations, financial position and cash flows for: • Phillips 66 and Phillips 66 Company (in each case, reflecting investments in subsidiaries utilizing the equity method of accounting). • All other nonguarantor subsidiaries. • The consolidating adjustments necessary to present Phillips 66’s results on a consolidated basis. This condensed consolidating financial information should be read in conjunction with the accompanying consolidated financial statements and notes. Millions of Dollars Three Months Ended September 30, 2018 Statement of Income Phillips 66 Phillips 66 Company All Other Subsidiaries Consolidating Adjustments Total Consolidated Revenues and Other Income Sales and other operating revenues $ — 22,866 6,922 — 29,788 Equity in earnings of affiliates 1,573 1,160 186 (2,140 ) 779 Net gain on dispositions — — 1 — 1 Other income — 23 1 — 24 Intercompany revenues — 1,091 4,371 (5,462 ) — Total Revenues and Other Income 1,573 25,140 11,481 (7,602 ) 30,592 Costs and Expenses Purchased crude oil and products — 21,656 10,095 (5,366 ) 26,385 Operating expenses — 946 280 (20 ) 1,206 Selling, general and administrative expenses 2 338 103 (3 ) 440 Depreciation and amortization — 232 114 — 346 Impairments — 1 — — 1 Taxes other than income taxes — 84 25 — 109 Accretion on discounted liabilities — 4 1 — 5 Interest and debt expense 100 36 62 (73 ) 125 Total Costs and Expenses 102 23,297 10,680 (5,462 ) 28,617 Income before income taxes 1,471 1,843 801 (2,140 ) 1,975 Income tax expense (benefit) (21 ) 270 158 — 407 Net Income 1,492 1,573 643 (2,140 ) 1,568 Less: net income attributable to noncontrolling interests — — 76 — 76 Net Income Attributable to Phillips 66 $ 1,492 1,573 567 (2,140 ) 1,492 Comprehensive Income $ 1,533 1,614 635 (2,173 ) 1,609 Millions of Dollars Three Months Ended September 30, 2017 Statement of Income Phillips 66 Phillips 66 Company All Other Subsidiaries Consolidating Adjustments Total Consolidated Revenues and Other Income Sales and other operating revenues $ — 18,941 6,686 — 25,627 Equity in earnings of affiliates 880 608 172 (1,130 ) 530 Net gain (loss) on dispositions — 1 (1 ) — — Other income — 34 15 — 49 Intercompany revenues — 522 3,805 (4,327 ) — Total Revenues and Other Income 880 20,106 10,677 (5,457 ) 26,206 Costs and Expenses Purchased crude oil and products — 15,981 7,744 (4,262 ) 19,463 Operating expenses — 857 285 (8 ) 1,134 Selling, general and administrative expenses 2 338 98 (3 ) 435 Depreciation and amortization — 225 112 — 337 Impairments — — 1 — 1 Taxes other than income taxes — 1,464 1,992 — 3,456 Accretion on discounted liabilities — 3 2 — 5 Interest and debt expense 86 20 60 (54 ) 112 Foreign currency transaction losses — — 7 — 7 Total Costs and Expenses 88 18,888 10,301 (4,327 ) 24,950 Income before income taxes 792 1,218 376 (1,130 ) 1,256 Income tax expense (benefit) (31 ) 338 100 — 407 Net Income 823 880 276 (1,130 ) 849 Less: net income attributable to noncontrolling interests — — 26 — 26 Net Income Attributable to Phillips 66 $ 823 880 250 (1,130 ) 823 Comprehensive Income $ 948 1,005 362 (1,341 ) 974 Millions of Dollars Nine Months Ended September 30, 2018 Statement of Income Phillips 66 Phillips 66 Company All Other Subsidiaries Consolidating Adjustments Total Consolidated Revenues and Other Income Sales and other operating revenues $ — 63,703 18,660 — 82,363 Equity in earnings of affiliates 3,600 2,638 566 (4,858 ) 1,946 Net gain on dispositions — 7 11 — 18 Other income — 25 22 — 47 Intercompany revenues — 2,456 11,386 (13,842 ) — Total Revenues and Other Income 3,600 68,829 30,645 (18,700 ) 84,374 Costs and Expenses Purchased crude oil and products — 59,724 27,113 (13,567 ) 73,270 Operating expenses — 2,771 875 (51 ) 3,595 Selling, general and administrative expenses 6 966 294 (8 ) 1,258 Depreciation and amortization — 691 328 — 1,019 Impairments — 2 5 — 7 Taxes other than income taxes — 248 80 — 328 Accretion on discounted liabilities — 13 4 — 17 Interest and debt expense 304 108 187 (216 ) 383 Foreign currency transaction gains — — (30 ) — (30 ) Total Costs and Expenses 310 64,523 28,856 (13,842 ) 79,847 Income before income taxes 3,290 4,306 1,789 (4,858 ) 4,527 Income tax expense (benefit) (65 ) 706 329 — 970 Net Income 3,355 3,600 1,460 (4,858 ) 3,557 Less: net income attributable to noncontrolling interests — — 202 — 202 Net Income Attributable to Phillips 66 $ 3,355 3,600 1,258 (4,858 ) 3,355 Comprehensive Income $ 3,333 3,578 1,357 (4,733 ) 3,535 Millions of Dollars Nine Months Ended September 30, 2017 Statement of Income Phillips 66 Phillips 66 Company All Other Subsidiaries Consolidating Adjustments Total Consolidated Revenues and Other Income Sales and other operating revenues $ — 52,844 19,764 — 72,608 Equity in earnings of affiliates 2,083 1,677 408 (2,811 ) 1,357 Net gain on dispositions — 1 14 — 15 Other income — 469 50 — 519 Intercompany revenues — 1,172 9,654 (10,826 ) — Total Revenues and Other Income 2,083 56,163 29,890 (13,637 ) 74,499 Costs and Expenses Purchased crude oil and products — 44,622 21,489 (10,616 ) 55,495 Operating expenses — 2,779 806 (44 ) 3,541 Selling, general and administrative expenses 6 962 298 (8 ) 1,258 Depreciation and amortization — 657 315 — 972 Impairments — 17 1 — 18 Taxes other than income taxes — 4,287 5,681 — 9,968 Accretion on discounted liabilities — 12 4 — 16 Interest and debt expense 263 46 173 (158 ) 324 Foreign currency transaction losses — — 6 — 6 Total Costs and Expenses 269 53,382 28,773 (10,826 ) 71,598 Income before income taxes 1,814 2,781 1,117 (2,811 ) 2,901 Income tax expense (benefit) (94 ) 698 304 — 908 Net Income 1,908 2,083 813 (2,811 ) 1,993 Less: net income attributable to noncontrolling interests — — 85 — 85 Net Income Attributable to Phillips 66 $ 1,908 2,083 728 (2,811 ) 1,908 Comprehensive Income $ 2,219 2,394 1,024 (3,333 ) 2,304 Millions of Dollars September 30, 2018 Balance Sheet Phillips 66 Phillips 66 Company All Other Subsidiaries Consolidating Adjustments Total Consolidated Assets Cash and cash equivalents $ — 476 448 — 924 Accounts and notes receivable 7 6,049 5,225 (3,310 ) 7,971 Inventories — 3,537 2,007 — 5,544 Prepaid expenses and other current assets — 557 318 — 875 Total Current Assets 7 10,619 7,998 (3,310 ) 15,314 Investments and long-term receivables 32,053 23,114 9,365 (50,221 ) 14,311 Net properties, plants and equipment — 13,072 8,553 — 21,625 Goodwill — 2,853 417 — 3,270 Intangibles — 728 146 — 874 Other assets 9 323 160 (2 ) 490 Total Assets $ 32,069 50,709 26,639 (53,533 ) 55,884 Liabilities and Equity Accounts payable $ — 8,380 4,285 (3,310 ) 9,355 Short-term debt 300 11 5 — 316 Accrued income and other taxes — 443 708 — 1,151 Employee benefit obligations — 513 56 — 569 Other accruals 136 263 184 — 583 Total Current Liabilities 436 9,610 5,238 (3,310 ) 11,974 Long-term debt 7,926 55 3,040 — 11,021 Asset retirement obligations and accrued environmental costs — 465 172 — 637 Deferred income taxes — 3,678 1,635 (2 ) 5,311 Employee benefit obligations — 573 220 — 793 Other liabilities and deferred credits 359 4,407 4,048 (8,461 ) 353 Total Liabilities 8,721 18,788 14,353 (11,773 ) 30,089 Common stock 5,340 24,953 8,906 (33,859 ) 5,340 Retained earnings 18,647 7,607 1,212 (8,848 ) 18,618 Accumulated other comprehensive loss (639 ) (639 ) (308 ) 947 (639 ) Noncontrolling interests — — 2,476 — 2,476 Total Liabilities and Equity $ 32,069 50,709 26,639 (53,533 ) 55,884 Millions of Dollars December 31, 2017 Balance Sheet Phillips 66 Phillips 66 Company All Other Subsidiaries Consolidating Adjustments Total Consolidated Assets Cash and cash equivalents $ — 1,411 1,708 — 3,119 Accounts and notes receivable 10 5,317 4,476 (2,297 ) 7,506 Inventories — 2,386 1,009 — 3,395 Prepaid expenses and other current assets 2 276 92 — 370 Total Current Assets 12 9,390 7,285 (2,297 ) 14,390 Investments and long-term receivables 32,125 23,483 9,959 (51,626 ) 13,941 Net properties, plants and equipment — 13,117 8,343 — 21,460 Goodwill — 2,853 417 — 3,270 Intangibles — 722 154 — 876 Other assets 12 266 158 (2 ) 434 Total Assets $ 32,149 49,831 26,316 (53,925 ) 54,371 Liabilities and Equity Accounts payable $ — 7,272 3,052 (2,297 ) 8,027 Short-term debt — 9 32 — 41 Accrued income and other taxes — 451 551 — 1,002 Employee benefit obligations — 513 69 — 582 Other accruals 55 298 102 — 455 Total Current Liabilities 55 8,543 3,806 (2,297 ) 10,107 Long-term debt 6,972 50 3,047 — 10,069 Asset retirement obligations and accrued environmental costs — 467 174 — 641 Deferred income taxes — 3,349 1,661 (2 ) 5,008 Employee benefit obligations — 639 245 — 884 Other liabilities and deferred credits 8 4,700 3,814 (8,288 ) 234 Total Liabilities 7,035 17,748 12,747 (10,587 ) 26,943 Common stock 9,396 24,952 10,125 (35,077 ) 9,396 Retained earnings 16,335 7,748 1,306 (9,083 ) 16,306 Accumulated other comprehensive loss (617 ) (617 ) (205 ) 822 (617 ) Noncontrolling interests — — 2,343 — 2,343 Total Liabilities and Equity $ 32,149 49,831 26,316 (53,925 ) 54,371 Millions of Dollars Nine Months Ended September 30, 2018 Statement of Cash Flows Phillips 66 Phillips 66 Company All Other Subsidiaries Consolidating Adjustments Total Consolidated Cash Flows From Operating Activities Net Cash Provided by Operating Activities $ 3,094 3,070 1,425 (4,155 ) 3,434 Cash Flows From Investing Activities Capital expenditures and investments* — (633 ) (1,012 ) — (1,645 ) Proceeds from asset dispositions** — 328 36 (325 ) 39 Intercompany lending activities 904 (510 ) (394 ) — — Other — (7 ) 73 — 66 Net Cash Provided by (Used in) Investing Activities 904 (822 ) (1,297 ) (325 ) (1,540 ) Cash Flows From Financing Activities Issuance of debt 1,509 — 85 — 1,594 Repayment of debt (250 ) (9 ) (115 ) — (374 ) Issuance of common stock 39 — — — 39 Repurchase of common stock (4,148 ) — — — (4,148 ) Dividends paid on common stock (1,069 ) (3,174 ) (981 ) 4,155 (1,069 ) Distributions to noncontrolling interests — — (146 ) — (146 ) Net proceeds from issuance of Phillips 66 Partners LP common units — — 114 — 114 Other* (79 ) — (325 ) 325 (79 ) Net Cash Used in Financing Activities (3,998 ) (3,183 ) (1,368 ) 4,480 (4,069 ) Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash — — (20 ) — (20 ) Net Change in Cash, Cash Equivalents and Restricted Cash — (935 ) (1,260 ) — (2,195 ) Cash, cash equivalents and restricted cash at beginning of period — 1,411 1,708 — 3,119 Cash, Cash Equivalents and Restricted Cash at End of Period $ — 476 448 — 924 * Includes intercompany capital contributions. ** Includes return of investments in equity affiliates. Millions of Dollars Nine Months Ended September 30, 2017 Statement of Cash Flows Phillips 66 Phillips 66 Company All Other Subsidiaries Consolidating Adjustments Total Consolidated Cash Flows From Operating Activities Net Cash Provided by Operating Activities $ 1,919 601 1,566 (2,369 ) 1,717 Cash Flows From Investing Activities Capital expenditures and investments* — (842 ) (593 ) 140 (1,295 ) Proceeds from asset dispositions** — 2 63 — 65 Intercompany lending activities 93 1,655 (1,748 ) — — Collection of advances/loans—related parties — 75 250 — 325 Restricted cash received from consolidation of business — — 318 — 318 Other — (82 ) (7 ) — (89 ) Net Cash Provided by (Used in) Investing Activities 93 808 (1,717 ) 140 (676 ) Cash Flows From Financing Activities Issuance of debt 1,700 — 1,383 — 3,083 Repayment of debt (1,500 ) (16 ) (1,645 ) — (3,161 ) Issuance of common stock 23 — — — 23 Repurchase of common stock (1,127 ) — — — (1,127 ) Dividends paid on common stock (1,042 ) (1,939 ) (430 ) 2,369 (1,042 ) Distributions to noncontrolling interests — — (83 ) — (83 ) Net proceeds from issuance of Phillips 66 Partners LP common units — — 171 — 171 Other* (66 ) — 140 (140 ) (66 ) Net Cash Used in Financing Activities (2,012 ) (1,955 ) (464 ) 2,229 (2,202 ) Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash — — (3 ) — (3 ) Net Change in Cash, Cash Equivalents and Restricted Cash — (546 ) (618 ) — (1,164 ) Cash, cash equivalents and restricted cash at beginning of period — 854 1,857 — 2,711 Cash, Cash Equivalents and Restricted Cash at End of Period $ — 308 1,239 — 1,547 * Includes intercompany capital contributions. ** Includes return of investments in equity affiliates. |
Changes in Accounting Princip_2
Changes in Accounting Principles (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Changes in Accounting Principles | Changes in Accounting Principles Effective January 1, 2018, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2017-05, “Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20),” which clarifies the scope and accounting for the sale or transfer of nonfinancial assets and in substance nonfinancial assets to noncustomers, including partial sales. This ASU eliminated the use of carryover basis for most nonmonetary exchanges, including contributions of assets to equity-method joint ventures, and could result in the entity recognizing a gain or loss on the sale or transfer of nonfinancial assets. At the time of adoption, there was no impact on our consolidated financial statements from this ASU. Effective January 1, 2018, we adopted ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,” which clarifies the definition of a business with the objective of adding guidance to assist in evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The amendment provides a screen for determining when a transaction involves an acquisition of a business. If substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset, or a group of similar identifiable assets, then the screen is met and the transaction is not considered an acquisition of a business. If the screen is not met, the amendment requires that to be considered a business, the operation must include at a minimum an input and a substantive process that together significantly contribute to the ability to create an output. The guidance may reduce the number of future transactions accounted for as business acquisitions. At the time of adoption, there was no impact on our consolidated financial statements from this ASU. Effective January 1, 2018, we adopted ASU No. 2016-16, “Income Taxes (Topic 740): Intra-Entity Asset Transfers of Assets Other Than Inventory.” This ASU requires the income tax consequences of an intra-entity transfer of an asset, other than inventory, to be recognized when the transfer occurs. At the time of adoption, this ASU did not have a material impact on our consolidated financial statements. Effective January 1, 2018, we adopted ASU No. 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” The majority of this ASU’s provisions amend only the presentation or disclosures of financial instruments; however, one provision could also affect net income. Equity investments carried under the cost method or the lower of cost or fair value method of accounting, in accordance with previous generally accepted accounting principles in the United States (GAAP), will have to be carried at fair value with changes in fair value recorded in net income. For equity investments that do not have readily determinable fair values, a company may elect to carry such investments at cost less impairments, if any, adjusted up or down for price changes in similar financial instruments issued by the investee, when and if observed. At the time of adoption, this ASU did not have a material impact on our consolidated financial statements. Effective January 1, 2018, we adopted ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” using the modified retrospective transition method applied to all contracts. Under the new guidance, recognition of revenue involves a multiple step approach including (i) identifying the contract, (ii) identifying the separate performance obligations, (iii) determining the transaction price, (iv) allocating the price to the performance obligations and (v) recognizing the revenue as the obligations are satisfied. Additional disclosures are required to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We recorded noncash cumulative effect adjustments to our opening total equity balance as of January 1, 2018, to increase retained earnings by $35 million , net of $11 million of income taxes, and noncontrolling interests by $13 million . These adjustments primarily reflected amounts recorded by our equity-method investees related to contracts that contain tier-pricing and minimum volume commitments with recovery provisions. One of our equity-method investees will adopt this ASU in 2019, and we do not expect its adoption to have a material impact on our consolidated financial statements. In addition, prospectively from January 1, 2018, our presentation of excise taxes on sales of petroleum products changed to a net basis from a gross basis. As a result, the “Sales and other operating revenues” and “Taxes other than income taxes” lines on our consolidated statement of income for the three and nine months ended September 30, 2018 , are not presented on a comparable basis to the three and nine months ended September 30, 2017 . See Note 3—Sales and Other Operating Revenues , for more information on our presentation of excise taxes on sales of petroleum products. In February 2018, the FASB issued ASU No. 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This ASU allows for the deferred income tax effects stranded in accumulated other comprehensive income (AOCI) resulting from the Tax Act enacted in December 2017 to be reclassed from AOCI to retained earnings. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the impact of this ASU on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The new standard amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which may result in earlier recognition of losses. Public business entities should apply the guidance in ASU No. 2016-13 for annual periods beginning after December 15, 2019, including interim periods within those annual periods. Early adoption will be permitted for annual periods beginning after December 15, 2018. We are currently evaluating the provisions of ASU No. 2016-13 and assessing the impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will continue to be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Similarly, lessors will be required to classify leases as sales-type, finance or operating, with classification affecting the pattern of income recognition. Classification for both lessees and lessors will be based on an assessment of whether risks and rewards, as well as substantive control have been transferred through a lease contract. Public business entities should apply the guidance in ASU No. 2016-02 for annual periods beginning after December 15, 2018, including interim periods within those annual periods. Early adoption is permitted. We plan to adopt ASU No. 2016-02 by recognizing a cumulative-effect adjustment to the opening balance of retained earnings as of our adoption date of January 1, 2019. We are currently evaluating the provisions of ASU No. 2016-02 and assessing its impact on our consolidated financial statements. As part of our assessment to-date, we have formed an implementation team, selected a software package, and completed software design and configuration within a test environment. Furthermore, we continue to load our lease population into the software and test the software configuration, lease data and system reports. We expect the adoption of ASU No. 2016-02 will materially gross up our consolidated balance sheet with the recognition of the ROU assets and operating lease liabilities. The impact to our consolidated statements of income and cash flows is not expected to be material. The new standard will also require additional disclosures for financing and operating leases. |
Earnings Per Share | The numerator of basic earnings per share (EPS) is net income attributable to Phillips 66, reduced by noncancelable dividends paid on unvested share-based employee awards during the vesting period (participating securities). The denominator of basic EPS is the sum of the daily weighted-average number of common shares outstanding during the periods presented and fully vested stock and unit awards that have not yet been issued as common stock. The numerator of diluted EPS is also based on net income attributable to Phillips 66, which is reduced only by dividend equivalents paid on participating securities for which the dividends are more dilutive than the participation of the awards in the earnings of the periods presented. To the extent unvested stock, unit or option awards and vested unexercised stock options are dilutive, they are included with the weighted-average common shares outstanding in the denominator. Treasury stock is excluded from the denominator in both basic and diluted EPS. |
Commitments and Contingencies | In the case of all known contingencies (other than those related to income taxes), we accrue a liability when the loss is probable and the amount is reasonably estimable. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. We do not reduce these liabilities for potential insurance or third-party recoveries. If applicable, we accrue receivables for probable insurance or other third-party recoveries. In the case of income-tax-related contingencies, we use a cumulative probability-weighted loss accrual in cases where sustaining a tax position is less than certain. |
Fair Value of Financial Instruments | Recurring Fair Value Measurements We carry certain assets and liabilities at fair value, which we measure at the reporting date using an exit price (i.e., the price that would be received to sell an asset or paid to transfer a liability), and disclose the quality of these fair values based on the valuation inputs used in these measurements under the following hierarchy: • Level 1: Fair value measured with unadjusted quoted prices from an active market for identical assets or liabilities. • Level 2: Fair value measured either with: (1) adjusted quoted prices from an active market for similar assets or liabilities; or (2) other valuation inputs that are directly or indirectly observable. • Level 3: Fair value measured with unobservable inputs that are significant to the measurement. We classify the fair value of an asset or liability based on the significance of its observable or unobservable inputs to the measurement. However, the fair value of an asset or liability initially reported as Level 3 will be subsequently reported as Level 2 if the unobservable inputs become inconsequential to its measurement or corroborating market data becomes available. Conversely, an asset or liability initially reported as Level 2 will be subsequently reported as Level 3 if corroborating market data becomes unavailable. For the nine months ended September 30, 2018 , derivative assets with an aggregate value of $244 million and derivative liabilities with an aggregate value of $244 million were transferred to Level 1 from Level 2, as measured from the beginning of the reporting period. The measurements were reclassified within the fair value hierarchy due to the availability of unadjusted quoted prices from an active market. We used the following methods and assumptions to estimate the fair value of financial instruments: • Cash and cash equivalents —The carrying amount reported on our consolidated balance sheet approximates fair value. • Accounts and notes receivable —The carrying amount reported on our consolidated balance sheet approximates fair value. • Derivative instruments —We fair value our exchange-traded contracts based on quoted market prices obtained from the New York Mercantile Exchange, the Intercontinental Exchange or other exchanges, and classify them as Level 1 in the fair value hierarchy. When exchange-cleared contracts lack sufficient liquidity, or are valued using either adjusted exchange-provided prices or non-exchange quotes, we classify those contracts as Level 2. Physical commodity forward purchase and sales contracts are generally valued using forward quotes provided by brokers and price index developers, such as Platts and Oil Price Information Service. We corroborate these quotes with market data and classify the resulting fair values as Level 2. When forward market prices are not available, we estimate fair value using the forward price of a similar commodity, adjusted for the difference in quality or location. In certain less liquid markets or for longer-term contracts, forward prices are not as readily available. In these circumstances, physical commodity purchase and sales contracts are valued using internally developed methodologies that consider historical relationships among various commodities that result in management’s best estimate of fair value. We classify these contracts as Level 3. Physical commodity options are valued using industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and contractual prices for the underlying instruments, as well as other relevant economic measures. The degree to which these inputs are observable in the forward markets determines whether the options are classified as Level 2 or 3. We use a mid-market pricing convention (the mid-point between bid and ask prices). When appropriate, valuations are adjusted to reflect credit considerations, generally based on available market evidence. We determine the fair value of our interest rate swaps based on observed market valuations for interest rate swaps that have notional values, terms and pay and reset frequencies similar to ours. • Rabbi trust assets —These deferred compensation investments are measured at fair value using unadjusted quoted prices available from national securities exchanges and are therefore categorized as Level 1 in the fair value hierarchy. • Debt —The carrying amount of our floating-rate debt approximates fair value. The fair value of our fixed-rate debt is estimated based on observable market prices. |
Sales and Other Operating Rev_2
Sales and Other Operating Revenues (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following tables present our disaggregated sales and other operating revenues: Millions of Dollars Three Months Ended Nine Months Ended 2018 2018 Product Line and Services Refined petroleum products $ 23,184 64,975 Crude oil resales 4,747 12,316 NGL 1,782 4,751 Services and other 75 321 Consolidated sales and other operating revenues $ 29,788 82,363 Geographic Location United States $ 23,068 64,481 United Kingdom 3,085 7,623 Germany 1,135 3,174 Other foreign countries 2,500 7,085 Consolidated sales and other operating revenues $ 29,788 82,363 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories consisted of the following: Millions of Dollars September 30 December 31 Crude oil and petroleum products $ 5,245 3,106 Materials and supplies 299 289 $ 5,544 3,395 |
Investments, Loans and Long-T_2
Investments, Loans and Long-Term Receivables (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Summary of Financial Information | Summarized 100 percent financial information for Chevron Phillips Chemical Company LLC ( CPChem ) was as follows: Millions of Dollars Three Months Ended Nine Months Ended 2018 2017 2018 2017 Revenues and other income $ 3,393 2,287 9,329 7,196 Income before income taxes 552 345 1,819 1,469 Net income 531 331 1,766 1,424 |
Properties, Plants and Equipm_2
Properties, Plants and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Properties, Plants and Equipment with Associated Accumulated Depreciation and Amortization | Our gross investment in PP&E and the associated accumulated depreciation and amortization (Accum. D&A) balances were as follows: Millions of Dollars September 30, 2018 December 31, 2017 Gross PP&E Accum. D&A Net PP&E Gross PP&E Accum. D&A Net PP&E Midstream $ 9,393 2,076 7,317 8,849 1,853 6,996 Chemicals — — — — — — Refining 22,584 9,549 13,035 22,144 8,987 13,157 Marketing and Specialties 1,641 929 712 1,658 909 749 Corporate and Other 1,163 602 561 1,091 533 558 $ 34,781 13,156 21,625 33,742 12,282 21,460 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic and Diluted Earnings Per Share | Three Months Ended Nine Months Ended 2018 2017 2018 2017 Basic Diluted Basic Diluted Basic Diluted Basic Diluted Amounts attributed to Phillips 66 Common Stockholders (millions) : Net income attributable to Phillips 66 $ 1,492 1,492 823 823 3,355 3,355 1,908 1,908 Income allocated to participating securities (1 ) — (1 ) — (4 ) — (4 ) (1 ) Net income available to common stockholders $ 1,491 1,492 822 823 3,351 3,355 1,904 1,907 Weighted-average common shares outstanding (thousands) : 463,002 466,109 509,147 512,923 470,471 473,760 513,583 517,420 Effect of share-based compensation 3,107 3,331 3,776 3,037 3,289 3,460 3,837 3,096 Weighted-average common shares outstanding—EPS 466,109 469,440 512,923 515,960 473,760 477,220 517,420 520,516 Earnings Per Share of Common Stock (dollars) $ 3.20 3.18 1.60 1.60 7.07 7.03 3.68 3.66 |
Derivatives and Financial Ins_2
Derivatives and Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value, by Balance Sheet Grouping | The following table indicates the consolidated balance sheet line items that include the fair values of commodity derivative assets and liabilities. The balances in the following table are presented on a gross basis, before the effects of counterparty and collateral netting. However, we have elected to present our commodity derivative assets and liabilities with the same counterparty on a net basis on our consolidated balance sheet when the right of setoff exists. Millions of Dollars September 30, 2018 December 31, 2017 Commodity Derivatives Effect of Collateral Netting Net Carrying Value Presented on the Balance Sheet Commodity Derivatives Effect of Collateral Netting Net Carrying Value Presented on the Balance Sheet Assets Liabilities Assets Liabilities Assets Prepaid expenses and other current assets $ 58 (30 ) (4 ) 24 43 (19 ) — 24 Other assets 11 (3 ) — 8 7 (3 ) — 4 Liabilities Other accruals 1,078 (1,274 ) 155 (41 ) 699 (746 ) 21 (26 ) Other liabilities and deferred credits 25 (26 ) — (1 ) — (1 ) — (1 ) Total $ 1,172 (1,333 ) 151 (10 ) 749 (769 ) 21 1 |
Summary of Fair Value of Commodity Derivative Assets and Liabilities and Gains (Losses) from Derivative Contracts | The realized and unrealized gains (losses) incurred from commodity derivatives, and the line items where they appear on our consolidated statement of income, were: Millions of Dollars Three Months Ended Nine Months Ended 2018 2017 2018 2017 Sales and other operating revenues $ (98 ) (256 ) (227 ) (101 ) Other income 3 33 (17 ) 46 Purchased crude oil and products (138 ) (111 ) (311 ) 16 Net loss from commodity derivative activity $ (233 ) (334 ) (555 ) (39 ) |
Summary of Material Net Exposures and Notional Amount of Derivative Contracts | Open Position Long / (Short) September 30 December 31 Commodity Crude oil, refined petroleum products and NGL (millions of barrels) (45 ) (11 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Hierarchy for Material Financial Instruments and Derivative Assets and Liabilities, Including the Effect of Counterparty Netting | The carrying values and fair values by hierarchy of our material financial instruments and commodity forward contracts, either carried or disclosed at fair value, including any effects of netting derivative assets with liabilities and netting collateral due to right of setoff or master netting agreements, were: Millions of Dollars September 30, 2018 Fair Value Hierarchy Total Fair Value of Gross Assets & Liabilities Effect of Counterparty Netting Effect of Collateral Netting Difference in Carrying Value and Fair Value Net Carrying Value Presented on the Balance Sheet Level 1 Level 2 Level 3 Commodity Derivative Assets Exchange-cleared instruments $ 672 480 — 1,152 (1,136 ) (4 ) — 12 Physical forward contracts — 19 1 20 — — — 20 Interest rate derivatives — 24 — 24 — — — 24 Rabbi trust assets 121 — — 121 N/A N/A — 121 $ 793 523 1 1,317 (1,136 ) (4 ) — 177 Commodity Derivative Liabilities Exchange-cleared instruments $ 790 501 — 1,291 (1,136 ) (155 ) — — Physical forward contracts — 38 4 42 — — — 42 Floating-rate debt — 1,375 — 1,375 N/A N/A — 1,375 Fixed-rate debt, excluding capital leases — 10,132 — 10,132 N/A N/A (359 ) 9,773 $ 790 12,046 4 12,840 (1,136 ) (155 ) (359 ) 11,190 Millions of Dollars December 31, 2017 Fair Value Hierarchy Total Fair Value of Gross Assets & Liabilities Effect of Counterparty Netting Effect of Collateral Netting Difference in Carrying Value and Fair Value Net Carrying Value Presented on the Balance Sheet Level 1 Level 2 Level 3 Commodity Derivative Assets Exchange-cleared instruments $ 333 395 — 728 (721 ) — — 7 Physical forward contracts — 20 1 21 — — — 21 Interest rate derivatives — 14 — 14 — — — 14 Rabbi trust assets 112 — — 112 N/A N/A — 112 $ 445 429 1 875 (721 ) — — 154 Commodity Derivative Liabilities Exchange-cleared instruments $ 369 373 — 742 (721 ) (21 ) — — Physical forward contracts — 23 4 27 — — — 27 Floating-rate debt — 1,150 — 1,150 N/A N/A — 1,150 Fixed-rate debt, excluding capital leases — 9,746 — 9,746 N/A N/A (978 ) 8,768 $ 369 11,292 4 11,665 (721 ) (21 ) (978 ) 9,945 |
Pension and Postretirement Pl_2
Pension and Postretirement Plans (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | The components of net periodic benefit cost for the three and nine months ended September 30, 2018 and 2017 , were as follows: Millions of Dollars Pension Benefits Other Benefits 2018 2017 2018 2017 U.S. Int’l. U.S. Int’l. Components of Net Periodic Benefit Cost Three Months Ended September 30 Service cost $ 34 5 33 8 2 1 Interest cost 26 6 27 7 1 2 Expected return on plan assets (42 ) (11 ) (37 ) (11 ) — — Amortization of prior service cost — — 1 — — — Recognized net actuarial loss 14 5 17 6 — — Settlements 49 — 21 — — — Net periodic benefit cost* $ 81 5 62 10 3 3 Nine Months Ended September 30 Service cost $ 102 22 99 25 5 4 Interest cost 78 21 81 20 5 6 Expected return on plan assets (127 ) (35 ) (110 ) (30 ) — — Amortization of prior service cost (credit) — (1 ) 2 (1 ) (1 ) (1 ) Recognized net actuarial loss 44 15 52 18 — — Settlements 54 — 76 — — — Net periodic benefit cost* $ 151 22 200 32 9 9 * Included in the “Operating expenses” and “Selling, general and administrative expenses” lines on our consolidated statement of income. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Summary of Changes in and Reclassifications Out of Accumulated Other Comprehensive Income (Loss) by Component | Changes in the balances of each component of accumulated other comprehensive loss were as follows: Millions of Dollars Defined Benefit Plans Foreign Currency Translation Hedging Accumulated Other Comprehensive Loss December 31, 2016 $ (713 ) (285 ) 3 (995 ) Other comprehensive income before reclassifications 5 214 — 219 Amounts reclassified from accumulated other comprehensive loss* Amortization of defined benefit plan items** Net actuarial loss, prior service credit and settlements 92 — — 92 Net current period other comprehensive income 97 214 — 311 September 30, 2017 $ (616 ) (71 ) 3 (684 ) December 31, 2017 $ (598 ) (26 ) 7 (617 ) Other comprehensive income (loss) before reclassifications 10 (113 ) 9 (94 ) Amounts reclassified from accumulated other comprehensive loss Amortization of defined benefit plan items** Net actuarial loss, prior service credit and settlements 84 — — 84 Foreign currency translation — (10 ) — (10 ) Hedging — — (2 ) (2 ) Net current period other comprehensive income (loss) 94 (123 ) 7 (22 ) September 30, 2018 $ (504 ) (149 ) 14 (639 ) * There were no significant reclassifications related to hedging or foreign currency translation in the prior year period. ** Included in the computation of net periodic benefit cost. See Note 14—Pension and Postretirement Plans , for additional information. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Significant Transactions with Related Parties | Significant transactions with related parties were: Millions of Dollars Three Months Ended Nine Months Ended 2018 2017 2018 2017 Operating revenues and other income (a) $ 955 638 2,717 1,778 Purchases (b) 3,667 2,557 9,534 6,932 Operating expenses and selling, general and administrative expenses (c) 12 13 44 52 (a) We sold NGL and other petrochemical feedstocks, along with solvents, to CPChem, gas oil and hydrogen feedstocks to Excel Paralubes (Excel), and refined petroleum products to OnCue Holdings, LLC. We also sold certain feedstocks and intermediate products to WRB and acted as agent for WRB in supplying crude oil and other feedstocks for a fee. In addition, we charged several of our affiliates, including CPChem, for the use of common facilities, such as steam generators, waste and water treaters and warehouse facilities. (b) We purchased crude oil and refined petroleum products from WRB and also acted as agent for WRB in distributing solvents. We also purchased natural gas and NGL from DCP Midstream and CPChem, as well as other feedstocks from various affiliates, for use in our refinery and fractionation processes. In addition, we purchased base oils and fuel products from Excel for use in our specialty and refining businesses. We paid NGL fractionation fees to CPChem. We also paid fees to various pipeline affiliates for transporting crude oil, refined petroleum products and NGL. (c) We paid utility and processing fees to various affiliates. |
Segment Disclosures and Relat_2
Segment Disclosures and Related Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Analysis of Results by Operating Segment | Millions of Dollars Three Months Ended Nine Months Ended 2018 2017 2018 2017 Sales and Other Operating Revenues Midstream Total sales $ 2,287 1,433 6,234 4,467 Intersegment eliminations (524 ) (433 ) (1,555 ) (1,260 ) Total Midstream 1,763 1,000 4,679 3,207 Chemicals 1 2 4 4 Refining Total sales 21,949 16,499 61,707 46,014 Intersegment eliminations (12,807 ) (10,461 ) (37,027 ) (28,641 ) Total Refining 9,142 6,038 24,680 17,373 Marketing and Specialties Total sales 19,332 18,887 54,471 52,903 Intersegment eliminations (457 ) (306 ) (1,492 ) (900 ) Total Marketing and Specialties 18,875 18,581 52,979 52,003 Corporate and Other 7 6 21 21 Consolidated sales and other operating revenues $ 29,788 25,627 82,363 72,608 Net Income (Loss) Midstream $ 240 117 675 325 Chemicals 210 121 704 498 Refining 936 550 1,937 1,033 Marketing and Specialties 318 208 739 563 Corporate and Other (136 ) (147 ) (498 ) (426 ) Consolidated net income $ 1,568 849 3,557 1,993 |
Reconciliation of Assets from Segment to Consolidated | Millions of Dollars September 30 December 31 Total Assets Midstream $ 14,123 13,231 Chemicals 6,378 6,226 Refining 25,959 23,820 Marketing and Specialties 7,581 7,103 Corporate and Other 1,843 3,991 Consolidated total assets $ 55,884 54,371 |
Phillips 66 Partners LP (Tables
Phillips 66 Partners LP (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Limited Liability Company or Limited Partnership, Business Organization and Operations [Abstract] | |
Schedule of Variable Interest Entities | The most significant assets of Phillips 66 Partners that are available to settle only its obligations, along with its most significant liabilities for which its creditors do not have recourse to Phillips 66’s general credit, were: Millions of Dollars September 30 December 31 Cash and cash equivalents $ 100 185 Equity investments* 2,215 1,932 Net properties, plants and equipment 2,999 2,918 Long-term debt 2,922 2,920 * Included in “Investments and long-term receivables” line on the Phillips 66 consolidated balance sheet. |
Condensed Consolidating Finan_2
Condensed Consolidating Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Consolidating Statement of Income | Millions of Dollars Three Months Ended September 30, 2018 Statement of Income Phillips 66 Phillips 66 Company All Other Subsidiaries Consolidating Adjustments Total Consolidated Revenues and Other Income Sales and other operating revenues $ — 22,866 6,922 — 29,788 Equity in earnings of affiliates 1,573 1,160 186 (2,140 ) 779 Net gain on dispositions — — 1 — 1 Other income — 23 1 — 24 Intercompany revenues — 1,091 4,371 (5,462 ) — Total Revenues and Other Income 1,573 25,140 11,481 (7,602 ) 30,592 Costs and Expenses Purchased crude oil and products — 21,656 10,095 (5,366 ) 26,385 Operating expenses — 946 280 (20 ) 1,206 Selling, general and administrative expenses 2 338 103 (3 ) 440 Depreciation and amortization — 232 114 — 346 Impairments — 1 — — 1 Taxes other than income taxes — 84 25 — 109 Accretion on discounted liabilities — 4 1 — 5 Interest and debt expense 100 36 62 (73 ) 125 Total Costs and Expenses 102 23,297 10,680 (5,462 ) 28,617 Income before income taxes 1,471 1,843 801 (2,140 ) 1,975 Income tax expense (benefit) (21 ) 270 158 — 407 Net Income 1,492 1,573 643 (2,140 ) 1,568 Less: net income attributable to noncontrolling interests — — 76 — 76 Net Income Attributable to Phillips 66 $ 1,492 1,573 567 (2,140 ) 1,492 Comprehensive Income $ 1,533 1,614 635 (2,173 ) 1,609 Millions of Dollars Three Months Ended September 30, 2017 Statement of Income Phillips 66 Phillips 66 Company All Other Subsidiaries Consolidating Adjustments Total Consolidated Revenues and Other Income Sales and other operating revenues $ — 18,941 6,686 — 25,627 Equity in earnings of affiliates 880 608 172 (1,130 ) 530 Net gain (loss) on dispositions — 1 (1 ) — — Other income — 34 15 — 49 Intercompany revenues — 522 3,805 (4,327 ) — Total Revenues and Other Income 880 20,106 10,677 (5,457 ) 26,206 Costs and Expenses Purchased crude oil and products — 15,981 7,744 (4,262 ) 19,463 Operating expenses — 857 285 (8 ) 1,134 Selling, general and administrative expenses 2 338 98 (3 ) 435 Depreciation and amortization — 225 112 — 337 Impairments — — 1 — 1 Taxes other than income taxes — 1,464 1,992 — 3,456 Accretion on discounted liabilities — 3 2 — 5 Interest and debt expense 86 20 60 (54 ) 112 Foreign currency transaction losses — — 7 — 7 Total Costs and Expenses 88 18,888 10,301 (4,327 ) 24,950 Income before income taxes 792 1,218 376 (1,130 ) 1,256 Income tax expense (benefit) (31 ) 338 100 — 407 Net Income 823 880 276 (1,130 ) 849 Less: net income attributable to noncontrolling interests — — 26 — 26 Net Income Attributable to Phillips 66 $ 823 880 250 (1,130 ) 823 Comprehensive Income $ 948 1,005 362 (1,341 ) 974 Millions of Dollars Nine Months Ended September 30, 2018 Statement of Income Phillips 66 Phillips 66 Company All Other Subsidiaries Consolidating Adjustments Total Consolidated Revenues and Other Income Sales and other operating revenues $ — 63,703 18,660 — 82,363 Equity in earnings of affiliates 3,600 2,638 566 (4,858 ) 1,946 Net gain on dispositions — 7 11 — 18 Other income — 25 22 — 47 Intercompany revenues — 2,456 11,386 (13,842 ) — Total Revenues and Other Income 3,600 68,829 30,645 (18,700 ) 84,374 Costs and Expenses Purchased crude oil and products — 59,724 27,113 (13,567 ) 73,270 Operating expenses — 2,771 875 (51 ) 3,595 Selling, general and administrative expenses 6 966 294 (8 ) 1,258 Depreciation and amortization — 691 328 — 1,019 Impairments — 2 5 — 7 Taxes other than income taxes — 248 80 — 328 Accretion on discounted liabilities — 13 4 — 17 Interest and debt expense 304 108 187 (216 ) 383 Foreign currency transaction gains — — (30 ) — (30 ) Total Costs and Expenses 310 64,523 28,856 (13,842 ) 79,847 Income before income taxes 3,290 4,306 1,789 (4,858 ) 4,527 Income tax expense (benefit) (65 ) 706 329 — 970 Net Income 3,355 3,600 1,460 (4,858 ) 3,557 Less: net income attributable to noncontrolling interests — — 202 — 202 Net Income Attributable to Phillips 66 $ 3,355 3,600 1,258 (4,858 ) 3,355 Comprehensive Income $ 3,333 3,578 1,357 (4,733 ) 3,535 Millions of Dollars Nine Months Ended September 30, 2017 Statement of Income Phillips 66 Phillips 66 Company All Other Subsidiaries Consolidating Adjustments Total Consolidated Revenues and Other Income Sales and other operating revenues $ — 52,844 19,764 — 72,608 Equity in earnings of affiliates 2,083 1,677 408 (2,811 ) 1,357 Net gain on dispositions — 1 14 — 15 Other income — 469 50 — 519 Intercompany revenues — 1,172 9,654 (10,826 ) — Total Revenues and Other Income 2,083 56,163 29,890 (13,637 ) 74,499 Costs and Expenses Purchased crude oil and products — 44,622 21,489 (10,616 ) 55,495 Operating expenses — 2,779 806 (44 ) 3,541 Selling, general and administrative expenses 6 962 298 (8 ) 1,258 Depreciation and amortization — 657 315 — 972 Impairments — 17 1 — 18 Taxes other than income taxes — 4,287 5,681 — 9,968 Accretion on discounted liabilities — 12 4 — 16 Interest and debt expense 263 46 173 (158 ) 324 Foreign currency transaction losses — — 6 — 6 Total Costs and Expenses 269 53,382 28,773 (10,826 ) 71,598 Income before income taxes 1,814 2,781 1,117 (2,811 ) 2,901 Income tax expense (benefit) (94 ) 698 304 — 908 Net Income 1,908 2,083 813 (2,811 ) 1,993 Less: net income attributable to noncontrolling interests — — 85 — 85 Net Income Attributable to Phillips 66 $ 1,908 2,083 728 (2,811 ) 1,908 Comprehensive Income $ 2,219 2,394 1,024 (3,333 ) 2,304 |
Condensed Consolidating Balance Sheet | Millions of Dollars September 30, 2018 Balance Sheet Phillips 66 Phillips 66 Company All Other Subsidiaries Consolidating Adjustments Total Consolidated Assets Cash and cash equivalents $ — 476 448 — 924 Accounts and notes receivable 7 6,049 5,225 (3,310 ) 7,971 Inventories — 3,537 2,007 — 5,544 Prepaid expenses and other current assets — 557 318 — 875 Total Current Assets 7 10,619 7,998 (3,310 ) 15,314 Investments and long-term receivables 32,053 23,114 9,365 (50,221 ) 14,311 Net properties, plants and equipment — 13,072 8,553 — 21,625 Goodwill — 2,853 417 — 3,270 Intangibles — 728 146 — 874 Other assets 9 323 160 (2 ) 490 Total Assets $ 32,069 50,709 26,639 (53,533 ) 55,884 Liabilities and Equity Accounts payable $ — 8,380 4,285 (3,310 ) 9,355 Short-term debt 300 11 5 — 316 Accrued income and other taxes — 443 708 — 1,151 Employee benefit obligations — 513 56 — 569 Other accruals 136 263 184 — 583 Total Current Liabilities 436 9,610 5,238 (3,310 ) 11,974 Long-term debt 7,926 55 3,040 — 11,021 Asset retirement obligations and accrued environmental costs — 465 172 — 637 Deferred income taxes — 3,678 1,635 (2 ) 5,311 Employee benefit obligations — 573 220 — 793 Other liabilities and deferred credits 359 4,407 4,048 (8,461 ) 353 Total Liabilities 8,721 18,788 14,353 (11,773 ) 30,089 Common stock 5,340 24,953 8,906 (33,859 ) 5,340 Retained earnings 18,647 7,607 1,212 (8,848 ) 18,618 Accumulated other comprehensive loss (639 ) (639 ) (308 ) 947 (639 ) Noncontrolling interests — — 2,476 — 2,476 Total Liabilities and Equity $ 32,069 50,709 26,639 (53,533 ) 55,884 Millions of Dollars December 31, 2017 Balance Sheet Phillips 66 Phillips 66 Company All Other Subsidiaries Consolidating Adjustments Total Consolidated Assets Cash and cash equivalents $ — 1,411 1,708 — 3,119 Accounts and notes receivable 10 5,317 4,476 (2,297 ) 7,506 Inventories — 2,386 1,009 — 3,395 Prepaid expenses and other current assets 2 276 92 — 370 Total Current Assets 12 9,390 7,285 (2,297 ) 14,390 Investments and long-term receivables 32,125 23,483 9,959 (51,626 ) 13,941 Net properties, plants and equipment — 13,117 8,343 — 21,460 Goodwill — 2,853 417 — 3,270 Intangibles — 722 154 — 876 Other assets 12 266 158 (2 ) 434 Total Assets $ 32,149 49,831 26,316 (53,925 ) 54,371 Liabilities and Equity Accounts payable $ — 7,272 3,052 (2,297 ) 8,027 Short-term debt — 9 32 — 41 Accrued income and other taxes — 451 551 — 1,002 Employee benefit obligations — 513 69 — 582 Other accruals 55 298 102 — 455 Total Current Liabilities 55 8,543 3,806 (2,297 ) 10,107 Long-term debt 6,972 50 3,047 — 10,069 Asset retirement obligations and accrued environmental costs — 467 174 — 641 Deferred income taxes — 3,349 1,661 (2 ) 5,008 Employee benefit obligations — 639 245 — 884 Other liabilities and deferred credits 8 4,700 3,814 (8,288 ) 234 Total Liabilities 7,035 17,748 12,747 (10,587 ) 26,943 Common stock 9,396 24,952 10,125 (35,077 ) 9,396 Retained earnings 16,335 7,748 1,306 (9,083 ) 16,306 Accumulated other comprehensive loss (617 ) (617 ) (205 ) 822 (617 ) Noncontrolling interests — — 2,343 — 2,343 Total Liabilities and Equity $ 32,149 49,831 26,316 (53,925 ) 54,371 |
Condensed Consolidating Statement of Cash Flows | Millions of Dollars Nine Months Ended September 30, 2018 Statement of Cash Flows Phillips 66 Phillips 66 Company All Other Subsidiaries Consolidating Adjustments Total Consolidated Cash Flows From Operating Activities Net Cash Provided by Operating Activities $ 3,094 3,070 1,425 (4,155 ) 3,434 Cash Flows From Investing Activities Capital expenditures and investments* — (633 ) (1,012 ) — (1,645 ) Proceeds from asset dispositions** — 328 36 (325 ) 39 Intercompany lending activities 904 (510 ) (394 ) — — Other — (7 ) 73 — 66 Net Cash Provided by (Used in) Investing Activities 904 (822 ) (1,297 ) (325 ) (1,540 ) Cash Flows From Financing Activities Issuance of debt 1,509 — 85 — 1,594 Repayment of debt (250 ) (9 ) (115 ) — (374 ) Issuance of common stock 39 — — — 39 Repurchase of common stock (4,148 ) — — — (4,148 ) Dividends paid on common stock (1,069 ) (3,174 ) (981 ) 4,155 (1,069 ) Distributions to noncontrolling interests — — (146 ) — (146 ) Net proceeds from issuance of Phillips 66 Partners LP common units — — 114 — 114 Other* (79 ) — (325 ) 325 (79 ) Net Cash Used in Financing Activities (3,998 ) (3,183 ) (1,368 ) 4,480 (4,069 ) Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash — — (20 ) — (20 ) Net Change in Cash, Cash Equivalents and Restricted Cash — (935 ) (1,260 ) — (2,195 ) Cash, cash equivalents and restricted cash at beginning of period — 1,411 1,708 — 3,119 Cash, Cash Equivalents and Restricted Cash at End of Period $ — 476 448 — 924 * Includes intercompany capital contributions. ** Includes return of investments in equity affiliates. Millions of Dollars Nine Months Ended September 30, 2017 Statement of Cash Flows Phillips 66 Phillips 66 Company All Other Subsidiaries Consolidating Adjustments Total Consolidated Cash Flows From Operating Activities Net Cash Provided by Operating Activities $ 1,919 601 1,566 (2,369 ) 1,717 Cash Flows From Investing Activities Capital expenditures and investments* — (842 ) (593 ) 140 (1,295 ) Proceeds from asset dispositions** — 2 63 — 65 Intercompany lending activities 93 1,655 (1,748 ) — — Collection of advances/loans—related parties — 75 250 — 325 Restricted cash received from consolidation of business — — 318 — 318 Other — (82 ) (7 ) — (89 ) Net Cash Provided by (Used in) Investing Activities 93 808 (1,717 ) 140 (676 ) Cash Flows From Financing Activities Issuance of debt 1,700 — 1,383 — 3,083 Repayment of debt (1,500 ) (16 ) (1,645 ) — (3,161 ) Issuance of common stock 23 — — — 23 Repurchase of common stock (1,127 ) — — — (1,127 ) Dividends paid on common stock (1,042 ) (1,939 ) (430 ) 2,369 (1,042 ) Distributions to noncontrolling interests — — (83 ) — (83 ) Net proceeds from issuance of Phillips 66 Partners LP common units — — 171 — 171 Other* (66 ) — 140 (140 ) (66 ) Net Cash Used in Financing Activities (2,012 ) (1,955 ) (464 ) 2,229 (2,202 ) Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash — — (3 ) — (3 ) Net Change in Cash, Cash Equivalents and Restricted Cash — (546 ) (618 ) — (1,164 ) Cash, cash equivalents and restricted cash at beginning of period — 854 1,857 — 2,711 Cash, Cash Equivalents and Restricted Cash at End of Period $ — 308 1,239 — 1,547 * Includes intercompany capital contributions. ** Includes return of investments in equity affiliates. |
Changes in Accounting Princip_3
Changes in Accounting Principles (Details) $ in Millions | Dec. 31, 2017USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect of accounting changes | $ 49 |
Retained Earnings | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect of accounting changes | 36 |
Noncontrolling Interests | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect of accounting changes | 13 |
Accounting Standards Update 2014-09 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Income tax expense | 11 |
Accounting Standards Update 2014-09 | Retained Earnings | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect of accounting changes | 35 |
Accounting Standards Update 2014-09 | Noncontrolling Interests | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect of accounting changes | $ 13 |
Sales and Other Operating Rev_3
Sales and Other Operating Revenues (Disaggregated) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Disaggregation of Revenue [Line Items] | |||||
Sales and other operating revenues | [1] | $ 29,788 | $ 25,627 | $ 82,363 | $ 72,608 |
United States | |||||
Disaggregation of Revenue [Line Items] | |||||
Sales and other operating revenues | 23,068 | 64,481 | |||
United Kingdom | |||||
Disaggregation of Revenue [Line Items] | |||||
Sales and other operating revenues | 3,085 | 7,623 | |||
Germany | |||||
Disaggregation of Revenue [Line Items] | |||||
Sales and other operating revenues | 1,135 | 3,174 | |||
Other foreign countries | |||||
Disaggregation of Revenue [Line Items] | |||||
Sales and other operating revenues | 2,500 | 7,085 | |||
Refined petroleum products | |||||
Disaggregation of Revenue [Line Items] | |||||
Sales and other operating revenues | 23,184 | 64,975 | |||
Crude oil resales | |||||
Disaggregation of Revenue [Line Items] | |||||
Sales and other operating revenues | 4,747 | 12,316 | |||
NGL | |||||
Disaggregation of Revenue [Line Items] | |||||
Sales and other operating revenues | 1,782 | 4,751 | |||
Services and other | |||||
Disaggregation of Revenue [Line Items] | |||||
Sales and other operating revenues | $ 75 | $ 321 | |||
[1] | * Includes excise taxes on sales of petroleum products for periods prior to the adoption of Accounting Standards Update No. 2014-09 on January 1, 2018: $3,376 9,664 |
Sales and Other Operating Rev_4
Sales and Other Operating Revenues (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Accounts receivable | $ 6,500 | $ 6,200 |
Receivables from contracts with customers | $ 237 | $ 208 |
Minimum | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Customer contracts, term | 5 years | |
Maximum | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Customer contracts, term | 15 years |
Inventories (Inventory, Net) (D
Inventories (Inventory, Net) (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Summary of inventories | ||
Crude oil and petroleum products | $ 5,245 | $ 3,106 |
Materials and supplies | 299 | 289 |
Inventories | $ 5,544 | $ 3,395 |
Inventories (Narrative) (Detail
Inventories (Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
LIFO inventory amount | $ 5,153 | $ 2,980 |
Excess over stated LIFO value | $ 6,600 | $ 4,300 |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2017 | Oct. 31, 2017 | Feb. 28, 2017 | |
Business Acquisition [Line Items] | |||
Gain on consolidation of business | $ 423 | ||
Merey Sweeny | |||
Business Acquisition [Line Items] | |||
Additional ownership interest acquired | 50.00% | ||
Business combination, step acquisition, equity interest in acquiree, fair value | 145 | ||
Business combination, restricted cash | 318 | ||
Business combination, property, plant, and equipment | 250 | ||
Business combination, debt assumed | 238 | ||
Business combination, settlement adjustment | $ 93 | ||
Percentage of ownership In subsidiary | 100.00% |
Investments, Loans and Long-T_3
Investments, Loans and Long-Term Receivables (Summary of Equity Method Investments) (Details) - Chevron Phillips Chemical Company LLC - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Summary of financial information | ||||
Revenues and other income | $ 3,393 | $ 2,287 | $ 9,329 | $ 7,196 |
Income before income taxes | 552 | 345 | 1,819 | 1,469 |
Net income | $ 531 | $ 331 | $ 1,766 | $ 1,424 |
Investments, Loans and Long-T_4
Investments, Loans and Long-Term Receivables (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Jul. 31, 2018 | Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||||
Capital expenditures and investments, debt payment | $ 1,645,000,000 | $ 1,295,000,000 | ||
Collection of advances/loans—related parties | $ 325,000,000 | $ 0 | $ 325,000,000 | |
Rockies Express Pipeline LLC Rex | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Percentage of ownership In subsidiary | 25.00% | |||
Capital expenditures and investments, debt payment | $ 138,000,000 | |||
Dakota Access LLC and Energy Transfer Crude Oil Company, LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Collection of advances/loans—related parties | 250,000,000 | |||
WRB Refining LP | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Collection of advances/loans—related parties | $ 75,000,000 | |||
Phillips 66 Partners LP | Gray Oak Pipeline LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Percentage of ownership In subsidiary | 75.00% | |||
Equity investments | $ 72,000,000 | |||
Rockies Express Pipeline LLC Rex | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Repayments of debt | 550,000,000 | |||
Long-term debt | $ 2,100,000,000 |
Properties, Plants and Equipm_3
Properties, Plants and Equipment (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Properties, plants and equipment with the associated accumulated depreciation and amortization | ||
Gross PP&E | $ 34,781 | $ 33,742 |
Accum. D&A | 13,156 | 12,282 |
Net PP&E | 21,625 | 21,460 |
Midstream | ||
Properties, plants and equipment with the associated accumulated depreciation and amortization | ||
Gross PP&E | 9,393 | 8,849 |
Accum. D&A | 2,076 | 1,853 |
Net PP&E | 7,317 | 6,996 |
Chemicals | ||
Properties, plants and equipment with the associated accumulated depreciation and amortization | ||
Gross PP&E | 0 | 0 |
Accum. D&A | 0 | 0 |
Net PP&E | 0 | 0 |
Refining | ||
Properties, plants and equipment with the associated accumulated depreciation and amortization | ||
Gross PP&E | 22,584 | 22,144 |
Accum. D&A | 9,549 | 8,987 |
Net PP&E | 13,035 | 13,157 |
Marketing and Specialties | ||
Properties, plants and equipment with the associated accumulated depreciation and amortization | ||
Gross PP&E | 1,641 | 1,658 |
Accum. D&A | 929 | 909 |
Net PP&E | 712 | 749 |
Corporate and Other | ||
Properties, plants and equipment with the associated accumulated depreciation and amortization | ||
Gross PP&E | 1,163 | 1,091 |
Accum. D&A | 602 | 533 |
Net PP&E | $ 561 | $ 558 |
Earnings Per Share (Summary of
Earnings Per Share (Summary of Earnings Per Share Calculation) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Basic | ||||
Net income attributable to Phillips 66 | $ 1,492 | $ 823 | $ 3,355 | $ 1,908 |
Income allocated to participating securities | (1) | (1) | (4) | (4) |
Net income available to common stockholders | $ 1,491 | $ 822 | $ 3,351 | $ 1,904 |
Weighted-average common shares outstanding (in shares) | 463,002 | 509,147 | 470,471 | 513,583 |
Effect of share-based compensation (in shares) | 3,107 | 3,776 | 3,289 | 3,837 |
Weighted-average commons shares outstanding - EPS (in shares) | 466,109 | 512,923 | 473,760 | 517,420 |
Earnings Per Share of Common Stock (in usd per share) | $ 3.20 | $ 1.60 | $ 7.07 | $ 3.68 |
Diluted | ||||
Net income attributable to Phillips 66 | $ 1,492 | $ 823 | $ 3,355 | $ 1,908 |
Income allocated to participating securities | 0 | 0 | 0 | (1) |
Net income available to common stockholders | $ 1,492 | $ 823 | $ 3,355 | $ 1,907 |
Weighted-average common shares outstanding (in shares) | 466,109 | 512,923 | 473,760 | 517,420 |
Effect of share-based compensation (in shares) | 3,331 | 3,037 | 3,460 | 3,096 |
Weighted-average commons shares outstanding - EPS (in shares) | 469,440 | 515,960 | 477,220 | 520,516 |
Earnings Per Share of Common Stock (in usd per share) | $ 3.18 | $ 1.60 | $ 7.03 | $ 3.66 |
Debt (Details)
Debt (Details) - USD ($) | Mar. 31, 2018 | Jun. 30, 2018 | Sep. 30, 2018 | Apr. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||||
Short-term debt | $ 316,000,000 | $ 41,000,000 | |||
Term Loan Due 2020 | |||||
Debt Instrument [Line Items] | |||||
Debt issued and guaranteed | $ 450,000,000 | ||||
Repayments of debt | $ 250,000,000 | ||||
Debt instrument, term | 3 years | ||||
Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt issued and guaranteed | $ 1,500,000,000 | ||||
Senior Notes | Senior Notes Due 2021 | |||||
Debt Instrument [Line Items] | |||||
Debt issued and guaranteed | 500,000,000 | ||||
Senior Notes | Senior Notes Due 2028 | |||||
Debt Instrument [Line Items] | |||||
Debt issued and guaranteed | $ 800,000,000 | ||||
Stated interest rate of debt issued, percentage | 3.90% | ||||
Senior Notes | Senior Notes Due 2044 | |||||
Debt Instrument [Line Items] | |||||
Debt issued and guaranteed | $ 200,000,000 | ||||
Stated interest rate of debt issued, percentage | 4.875% | ||||
Senior Notes | Floating-rate notes due 2019 | |||||
Debt Instrument [Line Items] | |||||
Short-term debt | $ 300,000,000 | ||||
London Interbank Offered Rate (LIBOR) | Senior Notes | Senior Notes Due 2021 | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 0.60% |
Guarantees (Details)
Guarantees (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Guarantor Obligations [Line Items] | ||
Environmental accruals included in recorded carrying amount | $ 456 | $ 458 |
Indemnifications | ||
Guarantor Obligations [Line Items] | ||
Carrying amount of indemnifications | 178 | |
Asset Retirement Obligations And Accrued Environmental Cost | Indemnifications | ||
Guarantor Obligations [Line Items] | ||
Environmental accruals included in recorded carrying amount | 107 | |
Facilities | Residual Value Guarantees | ||
Guarantor Obligations [Line Items] | ||
Maximum potential amount of future payments under the guarantees | 554 | |
Railcar and Airplane | Residual Value Guarantees | ||
Guarantor Obligations [Line Items] | ||
Maximum potential amount of future payments under the guarantees | $ 319 | |
Lessee leasing arrangements, operating leases, term of contract | 5 years | |
Railcars | Residual Value Guarantees | ||
Guarantor Obligations [Line Items] | ||
Residual value deficiency | $ 56 | |
Operating leases, expense | 19 | |
Operating leases, future expense | 17 | |
DCP Midstream | Other Guarantees | ||
Guarantor Obligations [Line Items] | ||
Maximum potential amount of future payments under the guarantees | 105 | |
Other Joint Ventures | Other Guarantees | ||
Guarantor Obligations [Line Items] | ||
Maximum potential amount of future payments under the guarantees | $ 134 | |
Maximum | Facilities | ||
Guarantor Obligations [Line Items] | ||
Lessee leasing arrangements, operating leases, term of contract | 5 years | |
Maximum | Other Joint Ventures | ||
Guarantor Obligations [Line Items] | ||
Joint venture debt obligations, period | 7 years |
Contingencies and Commitments (
Contingencies and Commitments (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Total environmental accrual | $ 456 | $ 458 |
Performance Guarantee | ||
Debt Instrument [Line Items] | ||
Letters of credit and bank guarantees | $ 628 | |
Reserve for Environmental Costs | ||
Debt Instrument [Line Items] | ||
Expected years to incur a substantial amount of expenditures | 30 years |
Derivatives and Financial Ins_3
Derivatives and Financial Instruments (Summary of Commodity Balance Sheet) (Details) - Not Designated as Hedging Instrument - Commodity - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Liabilities | ||
Effect of Collateral Netting | $ 151 | $ 21 |
Total | ||
Assets | 1,172 | 749 |
Liabilities | (1,333) | (769) |
Effect of Collateral Netting | 151 | 21 |
Net Carrying Value Presented on the Balance Sheet | (10) | 1 |
Prepaid expenses and other current assets | ||
Assets | ||
Assets | 58 | 43 |
Liabilities | (30) | (19) |
Effect of Collateral Netting | (4) | 0 |
Net Carrying Value Presented on the Balance Sheet | 24 | 24 |
Other assets | ||
Assets | ||
Assets | 11 | 7 |
Liabilities | (3) | (3) |
Effect of Collateral Netting | 0 | 0 |
Net Carrying Value Presented on the Balance Sheet | 8 | 4 |
Other accruals | ||
Liabilities | ||
Assets | 1,078 | 699 |
Liabilities | (1,274) | (746) |
Effect of Collateral Netting | 155 | 21 |
Net Carrying Value Presented on the Balance Sheet | (41) | (26) |
Total | ||
Effect of Collateral Netting | 155 | 21 |
Other liabilities and deferred credits | ||
Liabilities | ||
Assets | 25 | 0 |
Liabilities | (26) | (1) |
Effect of Collateral Netting | 0 | 0 |
Net Carrying Value Presented on the Balance Sheet | (1) | (1) |
Total | ||
Effect of Collateral Netting | $ 0 | $ 0 |
Derivatives and Financial Ins_4
Derivatives and Financial Instruments (Summary of Gains/(Losses) From Commodity Derivatives) (Details) - Commodity Derivatives - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Summary of gains (losses) from commodity derivatives | ||||
Net loss from commodity derivative activity | $ (233) | $ (334) | $ (555) | $ (39) |
Sales and other operating revenues | ||||
Summary of gains (losses) from commodity derivatives | ||||
Net loss from commodity derivative activity | (98) | (256) | (227) | (101) |
Other income | ||||
Summary of gains (losses) from commodity derivatives | ||||
Net loss from commodity derivative activity | 3 | 33 | (17) | 46 |
Purchased crude oil and products | ||||
Summary of gains (losses) from commodity derivatives | ||||
Net loss from commodity derivative activity | $ (138) | $ (111) | $ (311) | $ 16 |
Derivatives and Financial Ins_5
Derivatives and Financial Instruments (Narrative) (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Financial instruments and derivative contracts (Textual) [Abstract] | ||
Percentage of derivative contract volume expiring within twelve months (at least) | 98.00% | 98.00% |
Cash Flow Hedging | Interest-rate derivatives | ||
Financial instruments and derivative contracts (Textual) [Abstract] | ||
Derivative, notional amount | $ 650,000,000 | |
Designated as Hedging Instrument | Cash Flow Hedging | Interest-rate derivatives | ||
Financial instruments and derivative contracts (Textual) [Abstract] | ||
Derivative, fair value, net | 24,000,000 | $ 14,000,000 |
General and Administrative Expenses | Designated as Hedging Instrument | Cash Flow Hedging | Interest-rate derivatives | ||
Financial instruments and derivative contracts (Textual) [Abstract] | ||
Gain reclassified from AOCI into income | $ 8,000,000 | |
Maximum | Facilities | ||
Financial instruments and derivative contracts (Textual) [Abstract] | ||
Lessee leasing arrangements, operating leases, term of contract | 5 years |
Derivatives and Financial Ins_6
Derivatives and Financial Instruments (Summary of Outstanding Commodity Derivative Contracts) (Details) - MMBbls | Sep. 30, 2018 | Dec. 31, 2017 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Crude oil, refined petroleum products and NGL (millions of barrels) | (45) | (11) |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) $ in Millions | Sep. 30, 2018USD ($) |
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract] (Deprecated 2018-01-31) | |
Asset value transferred into Level 1, as measured from the beginning of the reporting period | $ 244 |
Liability value transferred into Level 1, as measured from the beginning of the reporting period | $ 244 |
Fair Value Measurements (Summar
Fair Value Measurements (Summary of Fair Value of Derivative Assets and Liabilities and Effect of Counterparty Netting) (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Liabilities | ||
Difference in Carrying Value and Fair Value | $ (359) | $ (978) |
Fixed-rate debt, excluding capital leases | ||
Liabilities | ||
Difference in Carrying Value and Fair Value | (359) | (978) |
Reported Value Measurement | ||
Assets | ||
Net carrying value presented on balance sheet, commodity derivative assets and investments | 177 | 154 |
Liabilities | ||
Net carrying value presented on balance sheet, commodity derivative liabilities and debt | 11,190 | 9,945 |
Reported Value Measurement | Floating-rate debt | ||
Liabilities | ||
Net carrying value presented on balance sheet, floating-rate debt | 1,375 | 1,150 |
Reported Value Measurement | Fixed-rate debt, excluding capital leases | ||
Liabilities | ||
Net carrying value presented on balance sheet, fixed-rate debt, excluding capital leases | 9,773 | 8,768 |
Reported Value Measurement | Rabbi trust assets | ||
Assets | ||
Rabbi trust assets | 121 | 112 |
Interest-rate derivatives | Reported Value Measurement | ||
Assets | ||
Net carrying value presented on balance sheet, commodity derivative assets | 24 | 14 |
Exchange-cleared instruments | Reported Value Measurement | ||
Assets | ||
Net carrying value presented on balance sheet, commodity derivative assets | 12 | 7 |
Liabilities | ||
Net carrying value presented on balance sheet, commodity derivative liabilities | 0 | 0 |
Physical forward contracts | Reported Value Measurement | ||
Assets | ||
Net carrying value presented on balance sheet, commodity derivative assets | 20 | 21 |
Liabilities | ||
Net carrying value presented on balance sheet, commodity derivative liabilities | 42 | 27 |
Fair Value, Measurements, Recurring | ||
Assets | ||
Effect of Counterparty Netting | (1,136) | (721) |
Effect of Collateral Netting | (4) | 0 |
Assets, fair value disclosure | 1,317 | 875 |
Liabilities | ||
Effect of Counterparty Netting | (1,136) | (721) |
Effect of Collateral Netting | (155) | (21) |
Total liabilities, fair value disclosure gross | 12,840 | 11,665 |
Fair Value, Measurements, Recurring | Floating-rate debt | ||
Liabilities | ||
Debt, fair value gross | 1,375 | 1,150 |
Fair Value, Measurements, Recurring | Fixed-rate debt, excluding capital leases | ||
Liabilities | ||
Debt, fair value gross | 10,132 | 9,746 |
Fair Value, Measurements, Recurring | Rabbi trust assets | ||
Assets | ||
Rabbi trust assets | 121 | 112 |
Fair Value, Measurements, Recurring | Interest-rate derivatives | ||
Assets | ||
Effect of Counterparty Netting | 0 | 0 |
Interest rate derivatives | 24 | 14 |
Fair Value, Measurements, Recurring | Exchange-cleared instruments | ||
Assets | ||
Commodity derivative assets, fair value gross | 1,152 | 728 |
Effect of Counterparty Netting | (1,136) | (721) |
Effect of Collateral Netting | (4) | 0 |
Liabilities | ||
Commodity derivative liabilities, fair value gross | 1,291 | 742 |
Effect of Counterparty Netting | (1,136) | (721) |
Effect of Collateral Netting | (155) | (21) |
Fair Value, Measurements, Recurring | Physical forward contracts | ||
Assets | ||
Commodity derivative assets, fair value gross | 20 | 21 |
Effect of Counterparty Netting | 0 | 0 |
Liabilities | ||
Commodity derivative liabilities, fair value gross | 42 | 27 |
Effect of Counterparty Netting | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | ||
Assets | ||
Assets, fair value disclosure | 793 | 445 |
Liabilities | ||
Total liabilities, fair value disclosure gross | 790 | 369 |
Fair Value, Measurements, Recurring | Level 1 | Floating-rate debt | ||
Liabilities | ||
Debt, fair value gross | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Fixed-rate debt, excluding capital leases | ||
Liabilities | ||
Debt, fair value gross | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Rabbi trust assets | ||
Assets | ||
Rabbi trust assets | 121 | 112 |
Fair Value, Measurements, Recurring | Level 1 | Interest-rate derivatives | ||
Assets | ||
Interest rate derivatives | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Exchange-cleared instruments | ||
Assets | ||
Commodity derivative assets, fair value gross | 672 | 333 |
Liabilities | ||
Commodity derivative liabilities, fair value gross | 790 | 369 |
Fair Value, Measurements, Recurring | Level 1 | Physical forward contracts | ||
Assets | ||
Commodity derivative assets, fair value gross | 0 | 0 |
Liabilities | ||
Commodity derivative liabilities, fair value gross | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Assets | ||
Assets, fair value disclosure | 523 | 429 |
Liabilities | ||
Total liabilities, fair value disclosure gross | 12,046 | 11,292 |
Fair Value, Measurements, Recurring | Level 2 | Floating-rate debt | ||
Liabilities | ||
Debt, fair value gross | 1,375 | 1,150 |
Fair Value, Measurements, Recurring | Level 2 | Fixed-rate debt, excluding capital leases | ||
Liabilities | ||
Debt, fair value gross | 10,132 | 9,746 |
Fair Value, Measurements, Recurring | Level 2 | Rabbi trust assets | ||
Assets | ||
Rabbi trust assets | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | Interest-rate derivatives | ||
Assets | ||
Interest rate derivatives | 24 | 14 |
Fair Value, Measurements, Recurring | Level 2 | Exchange-cleared instruments | ||
Assets | ||
Commodity derivative assets, fair value gross | 480 | 395 |
Liabilities | ||
Commodity derivative liabilities, fair value gross | 501 | 373 |
Fair Value, Measurements, Recurring | Level 2 | Physical forward contracts | ||
Assets | ||
Commodity derivative assets, fair value gross | 19 | 20 |
Liabilities | ||
Commodity derivative liabilities, fair value gross | 38 | 23 |
Fair Value, Measurements, Recurring | Level 3 | ||
Assets | ||
Assets, fair value disclosure | 1 | 1 |
Liabilities | ||
Total liabilities, fair value disclosure gross | 4 | 4 |
Fair Value, Measurements, Recurring | Level 3 | Floating-rate debt | ||
Liabilities | ||
Debt, fair value gross | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Fixed-rate debt, excluding capital leases | ||
Liabilities | ||
Debt, fair value gross | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Rabbi trust assets | ||
Assets | ||
Rabbi trust assets | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Interest-rate derivatives | ||
Assets | ||
Interest rate derivatives | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Exchange-cleared instruments | ||
Assets | ||
Commodity derivative assets, fair value gross | 0 | 0 |
Liabilities | ||
Commodity derivative liabilities, fair value gross | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Physical forward contracts | ||
Assets | ||
Commodity derivative assets, fair value gross | 1 | 1 |
Liabilities | ||
Commodity derivative liabilities, fair value gross | $ 4 | $ 4 |
Pension and Postretirement Pl_3
Pension and Postretirement Plans (Summary of Components of Net Periodic Benefit Cost) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Other Benefits | ||||
Components of Net Periodic Benefit Cost | ||||
Service cost | $ 2 | $ 1 | $ 5 | $ 4 |
Interest cost | 1 | 2 | 5 | 6 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service cost (credit) | 0 | 0 | (1) | (1) |
Recognized net actuarial loss | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Net periodic benefit cost | 3 | 3 | 9 | 9 |
U.S. | Pension Benefits | ||||
Components of Net Periodic Benefit Cost | ||||
Service cost | 34 | 33 | 102 | 99 |
Interest cost | 26 | 27 | 78 | 81 |
Expected return on plan assets | (42) | (37) | (127) | (110) |
Amortization of prior service cost (credit) | 0 | 1 | 0 | 2 |
Recognized net actuarial loss | 14 | 17 | 44 | 52 |
Settlements | 49 | 21 | 54 | 76 |
Net periodic benefit cost | 81 | 62 | 151 | 200 |
Int’l. | Pension Benefits | ||||
Components of Net Periodic Benefit Cost | ||||
Service cost | 5 | 8 | 22 | 25 |
Interest cost | 6 | 7 | 21 | 20 |
Expected return on plan assets | (11) | (11) | (35) | (30) |
Amortization of prior service cost (credit) | 0 | 0 | (1) | (1) |
Recognized net actuarial loss | 5 | 6 | 15 | 18 |
Settlements | 0 | 0 | 0 | 0 |
Net periodic benefit cost | $ 5 | $ 10 | $ 22 | $ 32 |
Pension and Postretirement Pl_4
Pension and Postretirement Plans (Narrative) (Details) - Pension Benefits - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
United States | ||
Employee Benefit Plans (Textual) [Abstract] | ||
Company contributions to plans | $ 133 | |
Additional contributions expected to be made during remainder of fiscal year | 20 | |
Loss due to actuarial losses and pensions settlement | 54 | $ 76 |
Int’l. | ||
Employee Benefit Plans (Textual) [Abstract] | ||
Company contributions to plans | 26 | |
Additional contributions expected to be made during remainder of fiscal year | $ 10 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Amounts reclassified from accumulated other comprehensive income (loss) | ||||
Beginning Balance | $ 27,428 | $ 23,725 | ||
Other comprehensive income before reclassifications | (94) | 219 | ||
Other Comprehensive Income (Loss), Net of Tax | $ 41 | $ 125 | (22) | 311 |
Ending Balance | 25,795 | 23,959 | 25,795 | 23,959 |
Defined Benefit Plans | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | ||||
Beginning Balance | (598) | (713) | ||
Other comprehensive income before reclassifications | 10 | 5 | ||
Amounts reclassified from accumulated other comprehensive loss | 84 | 92 | ||
Other Comprehensive Income (Loss), Net of Tax | 94 | 97 | ||
Ending Balance | (504) | (616) | (504) | (616) |
Foreign Currency Translation | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | ||||
Beginning Balance | (26) | (285) | ||
Other comprehensive income before reclassifications | (113) | 214 | ||
Amounts reclassified from accumulated other comprehensive loss | (10) | |||
Other Comprehensive Income (Loss), Net of Tax | (123) | 214 | ||
Ending Balance | (149) | (71) | (149) | (71) |
Hedging | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | ||||
Beginning Balance | 7 | 3 | ||
Other comprehensive income before reclassifications | 9 | 0 | ||
Amounts reclassified from accumulated other comprehensive loss | (2) | |||
Other Comprehensive Income (Loss), Net of Tax | 7 | 0 | ||
Ending Balance | 14 | 3 | 14 | 3 |
Accumulated Other Comprehensive Loss | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | ||||
Beginning Balance | (617) | (995) | ||
Other Comprehensive Income (Loss), Net of Tax | (22) | 311 | ||
Ending Balance | $ (639) | $ (684) | $ (639) | $ (684) |
Treasury Stock (Details)
Treasury Stock (Details) - USD ($) $ / shares in Units, shares in Millions | Feb. 28, 2018 | Feb. 13, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Class of Stock [Line Items] | ||||
Repurchase of common stock | $ 4,148,000,000 | $ 1,127,000,000 | ||
Purchase Agreement | ||||
Class of Stock [Line Items] | ||||
Number of shares authorized to be repurchased (in shares) | 35 | |||
Repurchase of common stock | $ 3,280,000,000 | |||
Accelerated share repurchases, initial price paid per share (in dollars per share) | $ 93.725 | |||
Share Repurchase Program And Additional Share Repurchases | ||||
Class of Stock [Line Items] | ||||
Authorized amount | $ 12,000,000,000 | |||
Cash and cash equivalents | Purchase Agreement | ||||
Class of Stock [Line Items] | ||||
Accelerated share repurchases, payment | 1,880,000,000 | |||
Cash and cash equivalents | Commercial Paper | Purchase Agreement | ||||
Class of Stock [Line Items] | ||||
Accelerated share repurchases, payment | $ 1,400,000,000 |
Restricted Cash (Details)
Restricted Cash (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Restricted Cash and Investments [Abstract] | ||
Restricted Cash | $ 0 | $ 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Significant transactions with related parties | ||||
Operating revenues and other income | $ 955 | $ 638 | $ 2,717 | $ 1,778 |
Purchases | 3,667 | 2,557 | 9,534 | 6,932 |
Operating expenses and selling, general and administrative expenses | $ 12 | $ 13 | $ 44 | $ 52 |
Segment Disclosures and Relat_3
Segment Disclosures and Related Information (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2018refinery | |
Midstream | DCP Midstream | |
Segment Disclosures And Related Information (Textual) [Abstract] | |
Percentage of ownership interest | 50.00% |
Chemicals | CP Chem | |
Segment Disclosures And Related Information (Textual) [Abstract] | |
Percentage of ownership interest | 50.00% |
Refining | Mainly United States And Europe | |
Segment Disclosures And Related Information (Textual) [Abstract] | |
Number of refineries | 13 |
Segment Disclosures and Relat_4
Segment Disclosures and Related Information (Summary of Sales and Other Operating Revenues, Net Income (Loss) Attributable to Phillips 66 and Total Assets by Operating Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | ||
Analysis of results by operating segment | ||||||
Sales and other operating revenues | [1] | $ 29,788 | $ 25,627 | $ 82,363 | $ 72,608 | |
Net Income (Loss) | 1,568 | 849 | 3,557 | 1,993 | ||
Analysis of results of assets by operating segment | ||||||
Total Assets | 55,884 | 55,884 | $ 54,371 | |||
Midstream | ||||||
Analysis of results by operating segment | ||||||
Sales and other operating revenues | 1,763 | 1,000 | 4,679 | 3,207 | ||
Net Income (Loss) | 240 | 117 | 675 | 325 | ||
Analysis of results of assets by operating segment | ||||||
Total Assets | 14,123 | 14,123 | 13,231 | |||
Chemicals | ||||||
Analysis of results by operating segment | ||||||
Net Income (Loss) | 210 | 121 | 704 | 498 | ||
Analysis of results of assets by operating segment | ||||||
Total Assets | 6,378 | 6,378 | 6,226 | |||
Refining | ||||||
Analysis of results by operating segment | ||||||
Sales and other operating revenues | 9,142 | 6,038 | 24,680 | 17,373 | ||
Net Income (Loss) | 936 | 550 | 1,937 | 1,033 | ||
Analysis of results of assets by operating segment | ||||||
Total Assets | 25,959 | 25,959 | 23,820 | |||
Marketing and Specialties | ||||||
Analysis of results by operating segment | ||||||
Sales and other operating revenues | 18,875 | 18,581 | 52,979 | 52,003 | ||
Net Income (Loss) | 318 | 208 | 739 | 563 | ||
Analysis of results of assets by operating segment | ||||||
Total Assets | 7,581 | 7,581 | 7,103 | |||
Operating Segments | Midstream | ||||||
Analysis of results by operating segment | ||||||
Sales and other operating revenues | 2,287 | 1,433 | 6,234 | 4,467 | ||
Operating Segments | Chemicals | ||||||
Analysis of results by operating segment | ||||||
Sales and other operating revenues | 1 | 2 | 4 | 4 | ||
Operating Segments | Refining | ||||||
Analysis of results by operating segment | ||||||
Sales and other operating revenues | 21,949 | 16,499 | 61,707 | 46,014 | ||
Operating Segments | Marketing and Specialties | ||||||
Analysis of results by operating segment | ||||||
Sales and other operating revenues | 19,332 | 18,887 | 54,471 | 52,903 | ||
Intersegment eliminations | Midstream | ||||||
Analysis of results by operating segment | ||||||
Sales and other operating revenues | (524) | (433) | (1,555) | (1,260) | ||
Intersegment eliminations | Refining | ||||||
Analysis of results by operating segment | ||||||
Sales and other operating revenues | (12,807) | (10,461) | (37,027) | (28,641) | ||
Intersegment eliminations | Marketing and Specialties | ||||||
Analysis of results by operating segment | ||||||
Sales and other operating revenues | (457) | (306) | (1,492) | (900) | ||
Corporate and Other | ||||||
Analysis of results by operating segment | ||||||
Sales and other operating revenues | 7 | 6 | 21 | 21 | ||
Net Income (Loss) | (136) | $ (147) | (498) | $ (426) | ||
Analysis of results of assets by operating segment | ||||||
Total Assets | $ 1,843 | $ 1,843 | $ 3,991 | |||
[1] | * Includes excise taxes on sales of petroleum products for periods prior to the adoption of Accounting Standards Update No. 2014-09 on January 1, 2018: $3,376 9,664 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate, percent | 21.00% | 32.00% | 21.00% | 31.00% |
Income tax benefit, adjustments | $ 49 | $ 20 |
Phillips 66 Partners LP (Narrat
Phillips 66 Partners LP (Narrative) (Details) - Phillips 66 Partners LP - USD ($) shares in Millions, $ in Millions | Sep. 30, 2018 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 |
Subsidiary or Equity Method Investee [Line Items] | |||||
Limited partner interest in Phillips 66 Partners owned by public, percentage | 44.00% | ||||
Variable Interest Entity, Primary Beneficiary | |||||
Subsidiary or Equity Method Investee [Line Items] | |||||
Limited partnership interest in Phillips 66 Partners, percentage | 54.00% | ||||
General partnership interest in Phillips 66 Partners, percentage | 2.00% | ||||
Preferred Units | |||||
Subsidiary or Equity Method Investee [Line Items] | |||||
Ownership interest (in shares) | 13.8 | 13.8 | 13.8 | ||
Common Units | |||||
Subsidiary or Equity Method Investee [Line Items] | |||||
Partners' capital account, units, amount authorized | $ 250 | $ 250 | |||
At The Market Offering Program | Common Units | |||||
Subsidiary or Equity Method Investee [Line Items] | |||||
Partners' capital account, public sale of units net of offering costs | $ 114 | $ 171 | $ 306 |
Phillips 66 Partners LP (Schedu
Phillips 66 Partners LP (Schedule of assets and liabilities) (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Variable Interest Entity [Line Items] | ||
Cash and cash equivalents | $ 924 | $ 3,119 |
Net properties, plants and equipment | 21,625 | 21,460 |
Long-term debt | 11,021 | 10,069 |
Phillips 66 Partners LP | Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Cash and cash equivalents | 100 | 185 |
Equity investments | 2,215 | 1,932 |
Net properties, plants and equipment | 2,999 | 2,918 |
Long-term debt | $ 2,922 | $ 2,920 |
Condensed Consolidating Finan_3
Condensed Consolidating Financial Information (Statement of Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Revenues and Other Income | |||||
Sales and other operating revenues | [1] | $ 29,788 | $ 25,627 | $ 82,363 | $ 72,608 |
Equity in earnings of affiliates | 779 | 530 | 1,946 | 1,357 | |
Net gain (loss) on dispositions | 1 | 0 | 18 | 15 | |
Other income | 24 | 49 | 47 | 519 | |
Total Revenues and Other Income | 30,592 | 26,206 | 84,374 | 74,499 | |
Costs and Expenses | |||||
Purchased crude oil and products | 26,385 | 19,463 | 73,270 | 55,495 | |
Operating expenses | 1,206 | 1,134 | 3,595 | 3,541 | |
Selling, general and administrative expenses | 440 | 435 | 1,258 | 1,258 | |
Depreciation and amortization | 346 | 337 | 1,019 | 972 | |
Impairments | 1 | 1 | 7 | 18 | |
Taxes other than income taxes | [1] | 109 | 3,456 | 328 | 9,968 |
Accretion on discounted liabilities | 5 | 5 | 17 | 16 | |
Interest and debt expense | 125 | 112 | 383 | 324 | |
Foreign currency transaction (gains) losses | 0 | 7 | (30) | 6 | |
Total Costs and Expenses | 28,617 | 24,950 | 79,847 | 71,598 | |
Income before income taxes | 1,975 | 1,256 | 4,527 | 2,901 | |
Income tax expense (benefit) | 407 | 407 | 970 | 908 | |
Net Income | 1,568 | 849 | 3,557 | 1,993 | |
Less: net income attributable to noncontrolling interests | 76 | 26 | 202 | 85 | |
Net Income Attributable to Phillips 66 | 1,492 | 823 | 3,355 | 1,908 | |
Comprehensive Income | 1,609 | 974 | 3,535 | 2,304 | |
Reportable Legal Entities | Phillips 66 | |||||
Revenues and Other Income | |||||
Sales and other operating revenues | 0 | 0 | 0 | 0 | |
Equity in earnings of affiliates | 1,573 | 880 | 3,600 | 2,083 | |
Net gain (loss) on dispositions | 0 | 0 | 0 | 0 | |
Other income | 0 | 0 | 0 | 0 | |
Total Revenues and Other Income | 1,573 | 880 | 3,600 | 2,083 | |
Costs and Expenses | |||||
Purchased crude oil and products | 0 | 0 | 0 | 0 | |
Operating expenses | 0 | 0 | 0 | 0 | |
Selling, general and administrative expenses | 2 | 2 | 6 | 6 | |
Depreciation and amortization | 0 | 0 | 0 | 0 | |
Impairments | 0 | 0 | 0 | 0 | |
Taxes other than income taxes | 0 | 0 | 0 | 0 | |
Accretion on discounted liabilities | 0 | 0 | 0 | 0 | |
Interest and debt expense | 100 | 86 | 304 | 263 | |
Foreign currency transaction (gains) losses | 0 | 0 | 0 | ||
Total Costs and Expenses | 102 | 88 | 310 | 269 | |
Income before income taxes | 1,471 | 792 | 3,290 | 1,814 | |
Income tax expense (benefit) | (21) | (31) | (65) | (94) | |
Net Income | 1,492 | 823 | 3,355 | 1,908 | |
Less: net income attributable to noncontrolling interests | 0 | 0 | 0 | 0 | |
Net Income Attributable to Phillips 66 | 1,492 | 823 | 3,355 | 1,908 | |
Comprehensive Income | 1,533 | 948 | 3,333 | 2,219 | |
Reportable Legal Entities | Phillips 66 Company | |||||
Revenues and Other Income | |||||
Sales and other operating revenues | 22,866 | 18,941 | 63,703 | 52,844 | |
Equity in earnings of affiliates | 1,160 | 608 | 2,638 | 1,677 | |
Net gain (loss) on dispositions | 0 | 1 | 7 | 1 | |
Other income | 23 | 34 | 25 | 469 | |
Total Revenues and Other Income | 25,140 | 20,106 | 68,829 | 56,163 | |
Costs and Expenses | |||||
Purchased crude oil and products | 21,656 | 15,981 | 59,724 | 44,622 | |
Operating expenses | 946 | 857 | 2,771 | 2,779 | |
Selling, general and administrative expenses | 338 | 338 | 966 | 962 | |
Depreciation and amortization | 232 | 225 | 691 | 657 | |
Impairments | 1 | 0 | 2 | 17 | |
Taxes other than income taxes | 84 | 1,464 | 248 | 4,287 | |
Accretion on discounted liabilities | 4 | 3 | 13 | 12 | |
Interest and debt expense | 36 | 20 | 108 | 46 | |
Foreign currency transaction (gains) losses | 0 | 0 | 0 | ||
Total Costs and Expenses | 23,297 | 18,888 | 64,523 | 53,382 | |
Income before income taxes | 1,843 | 1,218 | 4,306 | 2,781 | |
Income tax expense (benefit) | 270 | 338 | 706 | 698 | |
Net Income | 1,573 | 880 | 3,600 | 2,083 | |
Less: net income attributable to noncontrolling interests | 0 | 0 | 0 | 0 | |
Net Income Attributable to Phillips 66 | 1,573 | 880 | 3,600 | 2,083 | |
Comprehensive Income | 1,614 | 1,005 | 3,578 | 2,394 | |
Reportable Legal Entities | All Other Subsidiaries | |||||
Revenues and Other Income | |||||
Sales and other operating revenues | 6,922 | 6,686 | 18,660 | 19,764 | |
Equity in earnings of affiliates | 186 | 172 | 566 | 408 | |
Net gain (loss) on dispositions | 1 | (1) | 11 | 14 | |
Other income | 1 | 15 | 22 | 50 | |
Total Revenues and Other Income | 11,481 | 10,677 | 30,645 | 29,890 | |
Costs and Expenses | |||||
Purchased crude oil and products | 10,095 | 7,744 | 27,113 | 21,489 | |
Operating expenses | 280 | 285 | 875 | 806 | |
Selling, general and administrative expenses | 103 | 98 | 294 | 298 | |
Depreciation and amortization | 114 | 112 | 328 | 315 | |
Impairments | 0 | 1 | 5 | 1 | |
Taxes other than income taxes | 25 | 1,992 | 80 | 5,681 | |
Accretion on discounted liabilities | 1 | 2 | 4 | 4 | |
Interest and debt expense | 62 | 60 | 187 | 173 | |
Foreign currency transaction (gains) losses | 7 | (30) | 6 | ||
Total Costs and Expenses | 10,680 | 10,301 | 28,856 | 28,773 | |
Income before income taxes | 801 | 376 | 1,789 | 1,117 | |
Income tax expense (benefit) | 158 | 100 | 329 | 304 | |
Net Income | 643 | 276 | 1,460 | 813 | |
Less: net income attributable to noncontrolling interests | 76 | 26 | 202 | 85 | |
Net Income Attributable to Phillips 66 | 567 | 250 | 1,258 | 728 | |
Comprehensive Income | 635 | 362 | 1,357 | 1,024 | |
Consolidating Adjustments | |||||
Revenues and Other Income | |||||
Sales and other operating revenues | (5,462) | (4,327) | (13,842) | (10,826) | |
Equity in earnings of affiliates | (2,140) | (1,130) | (4,858) | (2,811) | |
Net gain (loss) on dispositions | 0 | 0 | 0 | 0 | |
Other income | 0 | 0 | 0 | 0 | |
Total Revenues and Other Income | (7,602) | (5,457) | (18,700) | (13,637) | |
Costs and Expenses | |||||
Purchased crude oil and products | (5,366) | (4,262) | (13,567) | (10,616) | |
Operating expenses | (20) | (8) | (51) | (44) | |
Selling, general and administrative expenses | (3) | (3) | (8) | (8) | |
Depreciation and amortization | 0 | 0 | 0 | 0 | |
Impairments | 0 | 0 | 0 | 0 | |
Taxes other than income taxes | 0 | 0 | 0 | 0 | |
Accretion on discounted liabilities | 0 | 0 | 0 | 0 | |
Interest and debt expense | (73) | (54) | (216) | (158) | |
Foreign currency transaction (gains) losses | 0 | 0 | 0 | ||
Total Costs and Expenses | (5,462) | (4,327) | (13,842) | (10,826) | |
Income before income taxes | (2,140) | (1,130) | (4,858) | (2,811) | |
Income tax expense (benefit) | 0 | 0 | 0 | 0 | |
Net Income | (2,140) | (1,130) | (4,858) | (2,811) | |
Less: net income attributable to noncontrolling interests | 0 | 0 | 0 | 0 | |
Net Income Attributable to Phillips 66 | (2,140) | (1,130) | (4,858) | (2,811) | |
Comprehensive Income | (2,173) | (1,341) | (4,733) | (3,333) | |
Consolidating Adjustments | Phillips 66 | |||||
Revenues and Other Income | |||||
Sales and other operating revenues | 0 | 0 | 0 | 0 | |
Consolidating Adjustments | Phillips 66 Company | |||||
Revenues and Other Income | |||||
Sales and other operating revenues | 1,091 | 522 | 2,456 | 1,172 | |
Consolidating Adjustments | All Other Subsidiaries | |||||
Revenues and Other Income | |||||
Sales and other operating revenues | $ 4,371 | $ 3,805 | $ 11,386 | $ 9,654 | |
[1] | * Includes excise taxes on sales of petroleum products for periods prior to the adoption of Accounting Standards Update No. 2014-09 on January 1, 2018: $3,376 9,664 |
Condensed Consolidating Finan_4
Condensed Consolidating Financial Information (Balance Sheet) (Details) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 924 | $ 3,119 |
Accounts and notes receivable | 7,971 | 7,506 |
Inventories | 5,544 | 3,395 |
Prepaid expenses and other current assets | 875 | 370 |
Total Current Assets | 15,314 | 14,390 |
Investments and long-term receivables | 14,311 | 13,941 |
Net properties, plants and equipment | 21,625 | 21,460 |
Goodwill | 3,270 | 3,270 |
Intangibles | 874 | 876 |
Other assets | 490 | 434 |
Total Assets | 55,884 | 54,371 |
Liabilities and Equity | ||
Accounts payable | 9,355 | 8,027 |
Short-term debt | 316 | 41 |
Accrued income and other taxes | 1,151 | 1,002 |
Employee benefit obligations | 569 | 582 |
Other accruals | 583 | 455 |
Total Current Liabilities | 11,974 | 10,107 |
Long-term debt | 11,021 | 10,069 |
Asset retirement obligations and accrued environmental costs | 637 | 641 |
Deferred income taxes | 5,311 | 5,008 |
Employee benefit obligations | 793 | 884 |
Other liabilities and deferred credits | 353 | 234 |
Total Liabilities | 30,089 | 26,943 |
Common stock | 5,340 | 9,396 |
Retained earnings | 18,618 | 16,306 |
Accumulated other comprehensive loss | (639) | (617) |
Noncontrolling interests | 2,476 | 2,343 |
Total Liabilities and Equity | 55,884 | 54,371 |
Consolidating Adjustments | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Accounts and notes receivable | (3,310) | (2,297) |
Inventories | 0 | 0 |
Prepaid expenses and other current assets | 0 | 0 |
Total Current Assets | (3,310) | (2,297) |
Investments and long-term receivables | (50,221) | (51,626) |
Net properties, plants and equipment | 0 | 0 |
Goodwill | 0 | 0 |
Intangibles | 0 | 0 |
Other assets | (2) | (2) |
Total Assets | (53,533) | (53,925) |
Liabilities and Equity | ||
Accounts payable | (3,310) | (2,297) |
Short-term debt | 0 | 0 |
Accrued income and other taxes | 0 | 0 |
Employee benefit obligations | 0 | 0 |
Other accruals | 0 | 0 |
Total Current Liabilities | (3,310) | (2,297) |
Long-term debt | 0 | 0 |
Asset retirement obligations and accrued environmental costs | 0 | 0 |
Deferred income taxes | (2) | (2) |
Employee benefit obligations | 0 | 0 |
Other liabilities and deferred credits | (8,461) | (8,288) |
Total Liabilities | (11,773) | (10,587) |
Common stock | (33,859) | (35,077) |
Retained earnings | (8,848) | (9,083) |
Accumulated other comprehensive loss | 947 | 822 |
Noncontrolling interests | 0 | 0 |
Total Liabilities and Equity | (53,533) | (53,925) |
Phillips 66 | Reportable Legal Entities | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Accounts and notes receivable | 7 | 10 |
Inventories | 0 | 0 |
Prepaid expenses and other current assets | 0 | 2 |
Total Current Assets | 7 | 12 |
Investments and long-term receivables | 32,053 | 32,125 |
Net properties, plants and equipment | 0 | 0 |
Goodwill | 0 | 0 |
Intangibles | 0 | 0 |
Other assets | 9 | 12 |
Total Assets | 32,069 | 32,149 |
Liabilities and Equity | ||
Accounts payable | 0 | 0 |
Short-term debt | 300 | 0 |
Accrued income and other taxes | 0 | 0 |
Employee benefit obligations | 0 | 0 |
Other accruals | 136 | 55 |
Total Current Liabilities | 436 | 55 |
Long-term debt | 7,926 | 6,972 |
Asset retirement obligations and accrued environmental costs | 0 | 0 |
Deferred income taxes | 0 | 0 |
Employee benefit obligations | 0 | 0 |
Other liabilities and deferred credits | 359 | 8 |
Total Liabilities | 8,721 | 7,035 |
Common stock | 5,340 | 9,396 |
Retained earnings | 18,647 | 16,335 |
Accumulated other comprehensive loss | (639) | (617) |
Noncontrolling interests | 0 | 0 |
Total Liabilities and Equity | 32,069 | 32,149 |
Phillips 66 Company | Reportable Legal Entities | ||
Assets | ||
Cash and cash equivalents | 476 | 1,411 |
Accounts and notes receivable | 6,049 | 5,317 |
Inventories | 3,537 | 2,386 |
Prepaid expenses and other current assets | 557 | 276 |
Total Current Assets | 10,619 | 9,390 |
Investments and long-term receivables | 23,114 | 23,483 |
Net properties, plants and equipment | 13,072 | 13,117 |
Goodwill | 2,853 | 2,853 |
Intangibles | 728 | 722 |
Other assets | 323 | 266 |
Total Assets | 50,709 | 49,831 |
Liabilities and Equity | ||
Accounts payable | 8,380 | 7,272 |
Short-term debt | 11 | 9 |
Accrued income and other taxes | 443 | 451 |
Employee benefit obligations | 513 | 513 |
Other accruals | 263 | 298 |
Total Current Liabilities | 9,610 | 8,543 |
Long-term debt | 55 | 50 |
Asset retirement obligations and accrued environmental costs | 465 | 467 |
Deferred income taxes | 3,678 | 3,349 |
Employee benefit obligations | 573 | 639 |
Other liabilities and deferred credits | 4,407 | 4,700 |
Total Liabilities | 18,788 | 17,748 |
Common stock | 24,953 | 24,952 |
Retained earnings | 7,607 | 7,748 |
Accumulated other comprehensive loss | (639) | (617) |
Noncontrolling interests | 0 | 0 |
Total Liabilities and Equity | 50,709 | 49,831 |
All Other Subsidiaries | Reportable Legal Entities | ||
Assets | ||
Cash and cash equivalents | 448 | 1,708 |
Accounts and notes receivable | 5,225 | 4,476 |
Inventories | 2,007 | 1,009 |
Prepaid expenses and other current assets | 318 | 92 |
Total Current Assets | 7,998 | 7,285 |
Investments and long-term receivables | 9,365 | 9,959 |
Net properties, plants and equipment | 8,553 | 8,343 |
Goodwill | 417 | 417 |
Intangibles | 146 | 154 |
Other assets | 160 | 158 |
Total Assets | 26,639 | 26,316 |
Liabilities and Equity | ||
Accounts payable | 4,285 | 3,052 |
Short-term debt | 5 | 32 |
Accrued income and other taxes | 708 | 551 |
Employee benefit obligations | 56 | 69 |
Other accruals | 184 | 102 |
Total Current Liabilities | 5,238 | 3,806 |
Long-term debt | 3,040 | 3,047 |
Asset retirement obligations and accrued environmental costs | 172 | 174 |
Deferred income taxes | 1,635 | 1,661 |
Employee benefit obligations | 220 | 245 |
Other liabilities and deferred credits | 4,048 | 3,814 |
Total Liabilities | 14,353 | 12,747 |
Common stock | 8,906 | 10,125 |
Retained earnings | 1,212 | 1,306 |
Accumulated other comprehensive loss | (308) | (205) |
Noncontrolling interests | 2,476 | 2,343 |
Total Liabilities and Equity | $ 26,639 | $ 26,316 |
Condensed Consolidating Finan_5
Condensed Consolidating Financial Information (Cash Flows) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Cash Flows From Operating Activities | ||||
Net Cash Provided by Operating Activities | $ 3,434 | $ 1,717 | ||
Cash Flows From Investing Activities | ||||
Capital expenditures and investments | (1,645) | (1,295) | ||
Proceeds from asset dispositions | [1] | 39 | 65 | |
Intercompany lending activities | 0 | 0 | ||
Collection of advances/loans—related parties | $ 325 | 0 | 325 | |
Restricted cash received from consolidation of business | 0 | 318 | ||
Other | 66 | (89) | ||
Net Cash Used in Investing Activities | (1,540) | (676) | ||
Cash Flows From Financing Activities | ||||
Issuance of debt | 1,594 | 3,083 | ||
Repayment of debt | (374) | (3,161) | ||
Issuance of common stock | 39 | 23 | ||
Repurchase of common stock | (4,148) | (1,127) | ||
Dividends paid on common stock | (1,069) | (1,042) | ||
Distributions to noncontrolling interests | (146) | (83) | ||
Net proceeds from issuance of Phillips 66 Partners LP common units | 114 | 171 | ||
Other | (79) | (66) | ||
Net Cash Used in Financing Activities | (4,069) | (2,202) | ||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash | (20) | (3) | ||
Net Change in Cash, Cash Equivalents and Restricted Cash | (2,195) | (1,164) | ||
Cash, cash equivalents and restricted cash at beginning of period | 2,711 | 3,119 | 2,711 | |
Cash, Cash Equivalents and Restricted Cash at End of Period | 924 | 1,547 | ||
Consolidating Adjustments | ||||
Cash Flows From Operating Activities | ||||
Net Cash Provided by Operating Activities | (4,155) | (2,369) | ||
Cash Flows From Investing Activities | ||||
Capital expenditures and investments | 0 | 140 | ||
Proceeds from asset dispositions | (325) | 0 | ||
Intercompany lending activities | 0 | 0 | ||
Collection of advances/loans—related parties | 0 | |||
Restricted cash received from consolidation of business | 0 | |||
Other | 0 | 0 | ||
Net Cash Used in Investing Activities | (325) | 140 | ||
Cash Flows From Financing Activities | ||||
Issuance of debt | 0 | 0 | ||
Repayment of debt | 0 | 0 | ||
Issuance of common stock | 0 | 0 | ||
Repurchase of common stock | 0 | 0 | ||
Dividends paid on common stock | 4,155 | 2,369 | ||
Distributions to noncontrolling interests | 0 | 0 | ||
Net proceeds from issuance of Phillips 66 Partners LP common units | 0 | 0 | ||
Other | 325 | (140) | ||
Net Cash Used in Financing Activities | 4,480 | 2,229 | ||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash | 0 | 0 | ||
Net Change in Cash, Cash Equivalents and Restricted Cash | 0 | 0 | ||
Cash, cash equivalents and restricted cash at beginning of period | 0 | 0 | 0 | |
Cash, Cash Equivalents and Restricted Cash at End of Period | 0 | 0 | ||
Phillips 66 | Reportable Legal Entities | ||||
Cash Flows From Operating Activities | ||||
Net Cash Provided by Operating Activities | 3,094 | 1,919 | ||
Cash Flows From Investing Activities | ||||
Capital expenditures and investments | 0 | 0 | ||
Proceeds from asset dispositions | 0 | 0 | ||
Intercompany lending activities | 904 | 93 | ||
Collection of advances/loans—related parties | 0 | |||
Restricted cash received from consolidation of business | 0 | |||
Other | 0 | 0 | ||
Net Cash Used in Investing Activities | 904 | 93 | ||
Cash Flows From Financing Activities | ||||
Issuance of debt | 1,509 | 1,700 | ||
Repayment of debt | (250) | (1,500) | ||
Issuance of common stock | 39 | 23 | ||
Repurchase of common stock | (4,148) | (1,127) | ||
Dividends paid on common stock | (1,069) | (1,042) | ||
Distributions to noncontrolling interests | 0 | 0 | ||
Net proceeds from issuance of Phillips 66 Partners LP common units | 0 | 0 | ||
Other | (79) | (66) | ||
Net Cash Used in Financing Activities | (3,998) | (2,012) | ||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash | 0 | 0 | ||
Net Change in Cash, Cash Equivalents and Restricted Cash | 0 | 0 | ||
Cash, cash equivalents and restricted cash at beginning of period | 0 | 0 | 0 | |
Cash, Cash Equivalents and Restricted Cash at End of Period | 0 | 0 | ||
Phillips 66 Company | Reportable Legal Entities | ||||
Cash Flows From Operating Activities | ||||
Net Cash Provided by Operating Activities | 3,070 | 601 | ||
Cash Flows From Investing Activities | ||||
Capital expenditures and investments | (633) | (842) | ||
Proceeds from asset dispositions | 328 | 2 | ||
Intercompany lending activities | (510) | 1,655 | ||
Collection of advances/loans—related parties | 75 | |||
Restricted cash received from consolidation of business | 0 | |||
Other | (7) | (82) | ||
Net Cash Used in Investing Activities | (822) | 808 | ||
Cash Flows From Financing Activities | ||||
Issuance of debt | 0 | 0 | ||
Repayment of debt | (9) | (16) | ||
Issuance of common stock | 0 | 0 | ||
Repurchase of common stock | 0 | 0 | ||
Dividends paid on common stock | (3,174) | (1,939) | ||
Distributions to noncontrolling interests | 0 | 0 | ||
Net proceeds from issuance of Phillips 66 Partners LP common units | 0 | 0 | ||
Other | 0 | 0 | ||
Net Cash Used in Financing Activities | (3,183) | (1,955) | ||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash | 0 | 0 | ||
Net Change in Cash, Cash Equivalents and Restricted Cash | (935) | (546) | ||
Cash, cash equivalents and restricted cash at beginning of period | 854 | 1,411 | 854 | |
Cash, Cash Equivalents and Restricted Cash at End of Period | 476 | 308 | ||
All Other Subsidiaries | Reportable Legal Entities | ||||
Cash Flows From Operating Activities | ||||
Net Cash Provided by Operating Activities | 1,425 | 1,566 | ||
Cash Flows From Investing Activities | ||||
Capital expenditures and investments | (1,012) | (593) | ||
Proceeds from asset dispositions | 36 | 63 | ||
Intercompany lending activities | (394) | (1,748) | ||
Collection of advances/loans—related parties | 250 | |||
Restricted cash received from consolidation of business | 318 | |||
Other | 73 | (7) | ||
Net Cash Used in Investing Activities | (1,297) | (1,717) | ||
Cash Flows From Financing Activities | ||||
Issuance of debt | 85 | 1,383 | ||
Repayment of debt | (115) | (1,645) | ||
Issuance of common stock | 0 | 0 | ||
Repurchase of common stock | 0 | 0 | ||
Dividends paid on common stock | (981) | (430) | ||
Distributions to noncontrolling interests | (146) | (83) | ||
Net proceeds from issuance of Phillips 66 Partners LP common units | 114 | 171 | ||
Other | (325) | 140 | ||
Net Cash Used in Financing Activities | (1,368) | (464) | ||
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash | (20) | (3) | ||
Net Change in Cash, Cash Equivalents and Restricted Cash | (1,260) | (618) | ||
Cash, cash equivalents and restricted cash at beginning of period | $ 1,857 | 1,708 | 1,857 | |
Cash, Cash Equivalents and Restricted Cash at End of Period | $ 448 | $ 1,239 | ||
[1] | Includes return of investments in equity affiliates. |