Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Jan. 31, 2020 | Jun. 28, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 001-36011 | ||
Entity Registrant Name | Phillips 66 Partners LP | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 38-3899432 | ||
Entity Address, Address Line One | 2331 CityWest Blvd. | ||
Entity Address, City or Town | Houston | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 77042 | ||
City Area Code | 855 | ||
Local Phone Number | 283-9237 | ||
Title of 12(b) Security | Common Units, Representing Limited Partnership Interests | ||
Trading Symbol | PSXP | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2,764 | ||
Entity Common Units, Units Outstanding (in shares) | 228,299,576 | ||
Documents Incorporated by Reference | None | ||
Entity Central Index Key | 0001572910 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Statement of Incom
Consolidated Statement of Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues and Other Income | |||
Revenues | $ 1,126 | $ 1,045 | $ 934 |
Equity in earnings of affiliates | 535 | 439 | 223 |
Other income | 6 | 2 | 12 |
Total revenues and other income | 1,667 | 1,486 | 1,169 |
Costs and Expenses | |||
Operating and maintenance expenses | 405 | 354 | 321 |
Depreciation | 120 | 117 | 116 |
General and administrative expenses | 67 | 64 | 69 |
Taxes other than income taxes | 39 | 35 | 33 |
Interest and debt expense | 108 | 115 | 101 |
Other expenses | 2 | 1 | 1 |
Total costs and expenses | 741 | 686 | 641 |
Income before income taxes | 926 | 800 | 528 |
Income tax expense | 3 | 4 | 4 |
Net income | 923 | 796 | 524 |
Less: Net income attributable to Predecessors | 0 | 0 | 63 |
Net income attributable to the Partnership | 923 | 796 | 461 |
Less: Preferred unitholders’ interest in net income attributable to the Partnership | 37 | 37 | 9 |
Less: General partner’s interest in net income attributable to the Partnership | 140 | 240 | 160 |
Limited partners’ interest in net income attributable to the Partnership | 746 | 519 | 292 |
Affiliated Entity | |||
Revenues and Other Income | |||
Revenues | $ 1,097 | $ 1,012 | $ 894 |
Common Units | |||
Net Income Attributable to the Partnership Per Limited Partner Unit (dollars) | |||
Common units—basic (in usd per share) | $ 4.45 | $ 4.22 | $ 2.60 |
Common units—diluted (in usd per share) | $ 4.29 | $ 4 | $ 2.59 |
Weighted-Average Limited Partner Units Outstanding (thousands) | |||
Common units—basic (in shares) | 167,655,306 | 122,768,582 | 112,044,824 |
Common units—diluted (in shares) | 181,475,000 | 136,588,000 | 115,339,000 |
Service | |||
Revenues and Other Income | |||
Revenues | $ 196 | $ 446 | |
Third Party | |||
Revenues and Other Income | |||
Revenues | $ 29 | $ 33 | $ 40 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net Income | $ 923 | $ 796 | $ 524 |
Defined benefit plans | |||
Plan sponsored by equity affiliates, net of income taxes | 0 | 0 | 0 |
Other comprehensive income | 0 | 0 | 0 |
Comprehensive Income | $ 923 | $ 796 | $ 524 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 286 | $ 1 |
Accounts receivable—related parties | 101 | 90 |
Accounts receivable—third parties | 4 | 5 |
Materials and supplies | 13 | 13 |
Prepaid expenses and other current assets | 10 | 20 |
Total current assets | 414 | 129 |
Equity investments | 2,961 | 2,448 |
Net properties, plants and equipment | 3,349 | 3,052 |
Goodwill | 185 | 185 |
Other assets | 52 | 5 |
Total Assets | 6,961 | 5,819 |
Liabilities | ||
Accounts payable—related parties | 19 | 22 |
Accounts payable—third parties | 84 | 88 |
Accrued interest | 42 | 36 |
Deferred revenues | 16 | 60 |
Short-term debt | 25 | 50 |
Accrued property and other taxes | 10 | 9 |
Other current liabilities | 3 | 5 |
Total current liabilities | 199 | 270 |
Long-term debt | 3,491 | 2,998 |
Obligation from equity interest transfer | 343 | 0 |
Other liabilities | 94 | 42 |
Total Liabilities | 4,127 | 3,310 |
Equity | ||
General partner—Phillips 66 (2019—0 units issued and outstanding; 2018—2,480,051 units issued and outstanding) | 0 | (1,313) |
Accumulated other comprehensive loss | (1) | (1) |
Total Equity | 2,834 | 2,509 |
Total Liabilities and Equity | 6,961 | 5,819 |
Public | Preferred Unitholders Public | ||
Equity | ||
Preferred unitholders (2019 and 2018—13,819,791 units issued and outstanding) | 746 | 746 |
Total Equity | 746 | 746 |
Public | Common Units | ||
Equity | ||
Common unitholders | 2,717 | 2,485 |
Total Equity | 2,717 | 2,485 |
Non-public | Common Units | Phillips 66 | ||
Equity | ||
Common unitholders | (628) | 592 |
Total Equity | $ (628) | $ 592 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - shares | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
General partner—Phillips 66 units issued (in shares) | 0 | 2,480,051 | |
General partner—Phillips 66 units outstanding (in shares) | 0 | 2,480,051 | |
Public | |||
Preferred units, issued (in shares) | 13,819,791 | 13,819,791 | |
Preferred units, outstanding (in shares) | 13,819,791 | 13,819,791 | |
Common Units | Public | |||
Common units issued (in shares) | 58,539,439 | 55,343,918 | |
Common Units | Non-public | Phillips 66 | |||
Common units outstanding (in shares) | 169,760,137 | 68,760,137 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash Flows From Operating Activities | |||
Net income | $ 923 | $ 796 | $ 524 |
Adjustments to reconcile net income to net cash provided by operating activities | |||
Depreciation | 120 | 117 | 116 |
Undistributed equity earnings | (3) | (5) | (1) |
Other | 10 | (36) | 55 |
Working capital adjustments | |||
Accounts receivable | (11) | (8) | (4) |
Materials and supplies | 0 | 0 | (1) |
Prepaid expenses and other current assets | 10 | (11) | (5) |
Accounts payable | 7 | 11 | 14 |
Accrued interest | 5 | 2 | 7 |
Deferred revenues | (45) | 30 | 21 |
Other accruals | 0 | (4) | (2) |
Net Cash Provided by Operating Activities | 1,016 | 892 | 724 |
Cash Flows From Investing Activities | |||
Restricted cash received from combination of business | 0 | 0 | 318 |
Advances/loans—related party | (95) | 0 | 0 |
Collection of advances/loans—related party | 95 | 0 | 0 |
Collection of loan receivable | 0 | 0 | 8 |
Cash capital expenditures and investments | (1,095) | (738) | (431) |
Return of investment from equity affiliates | 67 | 43 | 52 |
Proceeds from sale of equity interest | 81 | 0 | 0 |
Net Cash Used in Investing Activities | (947) | (695) | (782) |
Cash Flows From Financing Activities | |||
Proceeds from equity interest transfer | 342 | 0 | 0 |
Net contributions to Phillips 66 from Predecessors | 0 | 0 | (179) |
Issuance of debt | 1,758 | 675 | 2,008 |
Repayment of debt | (1,286) | (575) | (2,152) |
Issuance of common units | 169 | 128 | 468 |
Issuance of preferred units | 0 | 0 | 737 |
Debt issuance costs | (8) | 0 | (6) |
Other distributions from (to) Phillips 66 | (3) | 4 | 7 |
Net Cash Provided by (Used in) Financing Activities | 216 | (381) | 241 |
Net Change in Cash, Cash Equivalents and Restricted Cash | 285 | (184) | 183 |
Cash, cash equivalents and restricted cash at beginning of period | 286 | 1 | 185 |
Cash, Cash Equivalents and Restricted Cash at End of Period | 1 | 185 | 2 |
General Partner | |||
Cash Flows From Financing Activities | |||
Distributions to General Partner associated with acquisitions | 0 | 0 | (234) |
Quarterly distributions to common unitholders/General Partner | (206) | (216) | (139) |
Preferred Unitholders Public | |||
Cash Flows From Financing Activities | |||
Quarterly distributions to common unitholders/General Partner | (37) | (37) | 0 |
Public | Common Units | |||
Cash Flows From Financing Activities | |||
Quarterly distributions to common unitholders/General Partner | (192) | (158) | (112) |
Phillips 66 | Non-public | Common Units | |||
Cash Flows From Financing Activities | |||
Quarterly distributions to common unitholders/General Partner | (321) | (202) | (157) |
Phillips 66 | Common Control Transaction | Bakken Pipeline and MSLP Acquisition | Phillips 66 | |||
Cash Flows From Investing Activities | |||
Bakken Pipeline/Merey Sweeny acquisition | $ 0 | $ 0 | $ (729) |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity - USD ($) $ in Millions | Total | Accum. Other Comprehensive Loss | Net Investment— Predecessors | General Partner | Preferred Unitholders PublicPublic | Common UnitholdersPublic | Common UnitholdersNon-publicPhillips 66 |
Beginning Balance at Dec. 31, 2016 | $ 1,566 | $ (1) | $ 0 | $ (704) | $ 0 | $ 1,795 | $ 476 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income attributable to Predecessors | 63 | 63 | |||||
Net contributions to Phillips 66—Predecessors | 666 | 666 | |||||
Issuance of common units | 1,204 | 737 | 467 | ||||
Allocation of net investment—Predecessors and deemed net distributions to General Partner | (1,410) | $ (729) | (681) | ||||
Net income attributable to the Partnership | 461 | 160 | 9 | 124 | 168 | ||
Quarterly cash distributions to unitholders and General Partner | (408) | (139) | (112) | (157) | |||
Other contributions (distributions) from (to) Phillips 66 | 19 | 19 | |||||
Ending Balance at Dec. 31, 2017 | $ 2,161 | (1) | $ (1,345) | $ 746 | $ 2,274 | $ 487 | |
Beginning balance (in shares) at Dec. 31, 2016 | 109,369,312 | 2,187,386 | 0 | 43,134,902 | 64,047,024 | ||
Units Outstanding | |||||||
Units issued in a public equity offering (in shares) | 3,372,716 | 3,372,716 | |||||
Units issued in private placement (in shares) | 20,123,995 | 13,819,791 | 6,304,204 | ||||
Units issued associated with acquisitions (in shares) | 5,005,778 | 292,665 | 4,713,113 | ||||
Ending balance (in shares) at Dec. 31, 2017 | 137,871,801 | 2,480,051 | 13,819,791 | 52,811,822 | 68,760,137 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income attributable to Predecessors | $ 0 | ||||||
Issuance of common units | 128 | $ 128 | |||||
Net income attributable to the Partnership | 796 | $ 240 | $ 37 | 228 | $ 291 | ||
Quarterly cash distributions to unitholders and General Partner | (613) | (216) | (37) | (158) | (202) | ||
Other contributions (distributions) from (to) Phillips 66 | 7 | 7 | |||||
Ending Balance at Dec. 31, 2018 | $ 2,509 | (1) | $ (1,313) | $ 746 | $ 2,485 | $ 592 | |
Units Outstanding | |||||||
Units issued in a public equity offering (in shares) | 2,532,096 | 2,532,096 | |||||
Ending balance (in shares) at Dec. 31, 2018 | 140,403,897 | 2,480,051 | 13,819,791 | 55,343,918 | 68,760,137 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income attributable to Predecessors | $ 0 | ||||||
Issuance of common units | 173 | $ 173 | |||||
Net income attributable to the Partnership | 923 | $ 140 | $ 37 | 252 | $ 494 | ||
Quarterly cash distributions to unitholders and General Partner | (756) | (206) | (37) | (192) | (321) | ||
Conversion of GP economic interest | (4) | 1,381 | (1,385) | ||||
Other contributions (distributions) from (to) Phillips 66 | (10) | (2) | (8) | ||||
Ending Balance at Dec. 31, 2019 | $ 2,834 | $ (1) | $ 0 | $ 746 | $ 2,717 | $ (628) | |
Units Outstanding | |||||||
Units issued in a public equity offering (in shares) | 3,195,521 | 3,195,521 | |||||
Units issued in conversion of GP economic interest (in shares) | 98,519,949 | (2,480,051) | 101,000,000 | ||||
Ending balance (in shares) at Dec. 31, 2019 | 242,119,367 | 0 | 13,819,791 | 58,539,439 | 169,760,137 |
Consolidated Statement of Cha_2
Consolidated Statement of Changes in Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Common Units | |||
Cash distribution paid per common unit (in USD per share) | $ 3.400 | $ 2.936 | $ 2.405 |
Business and Basis of Presentat
Business and Basis of Presentation | 12 Months Ended |
Dec. 31, 2019 | |
Description of Business [Abstract] | |
Business and Basis of Presentation | Note 1— Business and Basis of Presentation Unless otherwise stated or the context otherwise indicates, all references to “Phillips 66 Partners,” “the Partnership,” “us,” “our,” “we,” or similar expressions refer to Phillips 66 Partners LP, including its consolidated subsidiaries. References to Phillips 66 may refer to Phillips 66 and/or its subsidiaries, depending on the context. References to our “General Partner” refer to Phillips 66 Partners GP LLC, and references to “Phillips 66 PDI” refer to Phillips 66 Project Development Inc., the Phillips 66 subsidiary that holds a limited partner interest in us and wholly owns our General Partner. Description of the Business We are a Delaware limited partnership formed in 2013 by Phillips 66 Company and Phillips 66 Partners GP LLC (our General Partner), both wholly owned subsidiaries of Phillips 66. On August 1, 2015, Phillips 66 Company transferred all of its limited partner interests in us and its 100% interest in our General Partner to its wholly owned subsidiary, Phillips 66 Project Development Inc. (Phillips 66 PDI). On August 1, 2019, all of the outstanding incentive distribution rights (IDRs) held by our General Partner were eliminated and its general partner interest in us was converted to a noneconomic interest in exchange for common units. We are a growth-oriented master limited partnership formed to own, operate, develop and acquire primarily fee-based midstream assets. Our operations consist of crude oil, refined petroleum products and natural gas liquids (NGL) transportation, terminaling, processing and storage assets. We conduct our operations through both wholly owned and joint venture operations. The majority of our wholly owned assets are associated with, and are integral to the operation of, nine of Phillips 66’s owned or joint venture refineries. Our operations consist of one reportable segment. We primarily generate revenue by providing fee-based transportation, terminaling, processing, storage and fractionation services to Phillips 66 and other customers. Our equity affiliates primarily generate revenue from transporting and terminaling crude oil, refined petroleum products and NGL. Since we do not own any of the crude oil, refined petroleum products and NGL we handle and do not engage in the trading of crude oil, refined petroleum products and NGL, we have limited direct exposure to risks associated with fluctuating commodity prices, although these risks indirectly influence our activities and results of operations over the long term. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP). Certain prior period financial information has been recast to reflect the current year’s presentation. We have acquired assets from Phillips 66 through transactions that were considered transfers of businesses between entities under common control. This required the transactions to be accounted for as if the transfers had occurred at the beginning of the period of transfer, with prior periods retrospectively adjusted to furnish comparative information. We refer to these pre-acquisition operations as those of our “Predecessors.” The combined financial statements of our Predecessors were derived from the accounting records of Phillips 66 and reflect the combined historical results of operations, financial position and cash flows of our Predecessors as if such businesses had been combined for all periods presented. All intercompany transactions and accounts within our Predecessors have been eliminated. The assets and liabilities of our Predecessors in these financial statements have been reflected on a historical cost basis because the transfer of the Predecessors to us occurred within the Phillips 66 consolidated group. The consolidated statement of income also includes expense allocations for certain functions performed by Phillips 66, including operational support services such as engineering and logistics and allocations of general corporate expenses related to executive oversight, accounting, treasury, tax, legal, information technology and procurement. These allocations were based primarily on the number of terminals and pipeline miles, and secondarily on activity-based costs. Our management believes the assumptions underlying the allocation of expenses from Phillips 66 are reasonable. Nevertheless, the financial results of our Predecessors may not include all of the actual expenses that would have been incurred had our Predecessors been a stand-alone publicly traded partnership during the periods presented. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2— Summary of Significant Accounting Policies Consolidation Principles and Investments in Affiliates Our consolidated financial statements include the accounts of majority-owned, controlled subsidiaries. The equity method is used to account for investments in affiliates in which we have the ability to exert significant influence over the affiliates’ operating and financial policies, including any variable interest entities of which we are not the primary beneficiary. Undivided interests in pipelines are consolidated on a proportionate basis. Net Investment—Predecessors “Net Investment—Predecessors” represents Phillips 66’s historical investment in the contributed businesses, our Predecessors’ accumulated net earnings after taxes, and the net effect of transactions with, and allocations from, Phillips 66 prior to the acquisition of the businesses from Phillips 66. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from these estimates. Common Control Transactions Businesses acquired from Phillips 66 and its subsidiaries are accounted for as common control transactions whereby the net assets acquired are combined with ours at their carrying value. Any difference between carrying value and recognized consideration is treated as a capital transaction. To the extent that such transactions require prior-period financial information to be retrospectively adjusted to furnish comparative information, historical net equity amounts prior to the transaction date are reflected in “Net Investment—Predecessors.” Cash consideration up to the carrying value of net assets acquired is presented as an investing activity in our consolidated statement of cash flows. Cash consideration in excess of the carrying value of net assets acquired is presented as a financing activity in our consolidated statement of cash flows. Revenue Recognition Revenues are primarily recognized for pipeline transportation, terminaling, storage, processing and fractionation services generated under long-term agreements. A significant portion of our revenues are derived from Phillips 66. The majority of these agreements with Phillips 66 are considered operating leases under GAAP. Effective for periods after January 1, 2019, we elected to account for lease and service elements of contracts classified as leases on a combined basis under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-02, “Leases (Topic 842)”, except for leases of processing-type assets, which contain non-ratable fees related to turnaround activity. For these types of leases, we continued to separate the lease and service elements based on relative standalone prices and applied the new lease standard to the lease element and the revenue standard to the service element. For new or modified leases, our determination of lease classification involves estimates, primarily related to the fair value of the leased asset based on comparable replacement cost and obsolescence estimates, and the allocation of contract consideration between the lease and non-lease components based on the relative stand-alone selling price. Revenues from fixed minimum volume commitments are recognized over the performance obligation period for stand-ready service contracts. Revenues from the variable element of these stand-ready contracts and other contracts without fixed elements are recognized based on the actual volumes transported, stored, processed and fractionated at contractual rates because the actual volumes specifically relate to our efforts to transfer the distinct services. Generally, our services are billed and payments are received on a monthly basis. Billings to Phillips 66 for shortfall volumes under its quarterly minimum volume commitments are recorded as “Deferred revenues” in our consolidated balance sheet, as Phillips 66 generally has the right to make up the shortfall volumes in the following four quarters. For the lease element of the contracts, the deferred revenue will be recognized at the earlier of when shortfall volumes are made up, when the make-up rights contractually expire or when we determine the system will not have the necessary capacity to enable a customer to make up the shortfall volumes. For the service element of the contracts, the deferred revenue will be recognized when the performance obligation is complete or it is probable that the shortfall volumes will not be made up. Billings for tolling services relating to maintenance turnaround activities are billed in advance of such activities. These billings are initially recorded as “Deferred revenues” in our consolidated balance sheet and are recognized when the maintenance turnaround activity commences. Deferred revenue relating to maintenance turnaround operating expenses is recognized in the period the work is performed. Deferred revenue relating to capital projects performed concurrently with a maintenance turnaround is recognized ratably over the remaining tolling services agreement once the equipment is placed into service. At the time the Clemens Caverns commenced operations, the caverns had not reached total planned working capacity contracted under the storage agreement. During the build-out of the remaining capacity, a portion of the monthly storage fees was deferred. The deferred revenue is being recognized over the remaining term of the agreement as additional storage capacity was placed into service. Cash Equivalents Cash equivalents are highly liquid, short-term investments that are readily convertible to known amounts of cash and will mature within 90 days or less from the date of acquisition. We carry these at cost plus accrued interest, which approximates fair value. Imbalances We do not purchase or produce crude oil, refined petroleum or NGL product inventories. We experience imbalances as a result of variances in meter readings and in other measurement methods, and volume fluctuations within our crude oil, refined petroleum products and NGL systems due to pressure and temperature changes. Certain of our transportation contracts provide for the shipper to pay a contractual loss allowance, which is valued using quoted market prices of the applicable commodity being shipped. These contractual loss allowances, which are received from the shipper irrespective of, and independently calculated from, actual volumetric gains or losses, are recorded as revenue. Any actual volumetric gains or losses are valued using quoted market prices of the applicable commodities and are recorded as decreases or increases to operating and maintenance expenses, respectively. Fair Value Measurements We measure assets and liabilities requiring fair value presentation or disclosure using the price that would be received to sell an asset or paid to transfer a liability (i.e., an exit price), and disclose such amounts according to the quality of valuation inputs under the following hierarchy: Level 1: Quoted prices in an active market for identical assets or liabilities. Level 2: Observable inputs other than quoted prices included within Level 1 for the asset or liability, either directly or indirectly through market-corroborated inputs. Level 3: Unobservable inputs that are significant to the fair value of assets or liabilities. We classify the fair value of an asset or liability based on the lowest level of input significant to its measurement. A fair value 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. Asset and liability fair values initially reported as Level 2 will be subsequently reported as Level 3 if corroborating market data becomes unavailable. The carrying amounts of our trade receivables and payables approximate fair value. Nonrecurring Fair Value Measurements We apply the fair value measurements criteria to determine the fair value of nonfinancial assets and liabilities that are measured at fair value on a nonrecurring basis, primarily asset retirement obligations and, when impaired, long-lived assets. Properties, Plants and Equipment (PP&E) PP&E is recorded at cost. Costs of maintenance and repairs, which are not significant improvements, are expensed when incurred. Depreciation of PP&E is determined by the individual-unit-straight-line method or the group-straight-line method (for those individual units that are highly integrated with other units). Capitalized Interest Interest from external borrowings is capitalized on major projects with an expected construction period of six months or longer. Capitalized interest is added to the cost of the underlying asset’s PP&E or the applicable equity investment and is amortized over the useful life of the asset. Major Maintenance Activities Costs for planned integrity management projects are expensed in the period incurred. These types of costs include inspection services, contractor repair services, materials and supplies, equipment rentals and labor costs. Impairment of PP&E PP&E used in operations are assessed for impairment whenever changes in facts and circumstances indicate a possible significant deterioration in the future cash flows expected to be generated by an asset group. If, upon review, the sum of the undiscounted expected future pretax cash flows of an asset group is less than the carrying value of the asset group, including applicable liabilities, then the carrying value is written down to estimated fair value and the write down is reported as an impairment in the period in which the determination is made. Individual assets are grouped for impairment purposes at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets—generally at the pipeline system, terminal, or processing or fractionation system level. Since there usually is a lack of quoted market prices for our long-lived assets, the fair value of potentially impaired assets is typically determined based on the present value of expected future cash flows using discount rates and other assumptions believed to be consistent with those used by principal market participants, based on estimated replacement cost, or based on a multiple of operating cash flow validated with historical market transactions of similar assets where possible. The expected future cash flows used for impairment reviews and related fair value calculations are based on estimated future throughputs, tariffs and fees, operating costs and capital project decisions, considering all available evidence at the date of review. Impairment of Investments in Nonconsolidated Entities Investments in nonconsolidated entities are assessed for impairment whenever changes in the facts and circumstances indicate a loss in value has occurred. When indicators exist, the fair value is estimated and compared to the investment carrying value. If any impairment is judgmentally determined to be other than temporary, the carrying value of the investment is written down to fair value. The fair value of the impaired investment is determined based on quoted market prices, if available, or upon the present value of expected future cash flows using discount rates and other assumptions believed to be consistent with those used by principal market participants and a market analysis of comparable assets, if appropriate. Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in the acquisition of a business. Goodwill is not amortized, but rather is tested for impairment annually and when events or changes in circumstances indicate that the fair value of the reporting unit with goodwill has been reduced below carrying value. The majority of our goodwill is related to acquisitions from Phillips 66. In these common control transactions, the net assets acquired are recorded at Phillips 66’s historical carrying value, including any associated goodwill. We have one reporting unit for goodwill impairment testing. Asset Retirement Obligations and Environmental Costs Fair values of legal obligations to abandon or remove long-lived assets are recorded in the period in which the obligation arises. When the liability is initially recorded, we capitalize this cost by increasing the carrying amount of the related PP&E. Over time, the liability is increased for the change in its present value, and the capitalized cost in PP&E is depreciated over the useful life of the related asset. Our estimate may change after initial recognition of the obligation, in which case we record an adjustment to the liability and PP&E. Environmental expenditures are expensed or capitalized, depending upon their future economic benefit. Expenditures relating to an existing condition caused by past operations, and those having no future economic benefit, are expensed. Liabilities for environmental expenditures are recorded on an undiscounted basis (unless acquired in a business combination) when environmental assessments or cleanups are probable and the costs can be reasonably estimated. Income Taxes We follow the asset and liability method of accounting for income taxes. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences between the financial statement carrying amounts and the tax basis of our assets and liabilities. Our operations are treated as a partnership for federal and state income tax purposes, with each partner being separately taxed on its share of taxable income. Therefore, we have excluded income taxes from these consolidated financial statements, except for the income tax provision resulting from state laws that apply to entities organized as partnerships. Our tax provision is computed as if we were a stand-alone tax paying entity. Any interest and penalties related to income taxes would be reported in interest and debt expense and operating and maintenance expenses, respectively, in our consolidated statement of income. |
Changes in Accounting Principle
Changes in Accounting Principles | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Changes in Accounting Principles | Note 3— Changes in Accounting Principles Effective January 1, 2019, we early adopted ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which amends the impairment model to utilize an expected loss methodology in place of the incurred loss methodology for financial instruments and off-balance sheet credit exposures. The amendment requires entities to consider a broader range of information to estimate expected credit losses, which may result in earlier recognition of losses. The adoption of the ASU did not have a material impact on our consolidated financial statements. Effective January 1, 2019, we adopted ASU 2016-02, “Leases (Topic 842)” using the modified retrospective transition method. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and corresponding lease liability on the consolidated balance sheet for all operating 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 consolidated income statement. We elected the package of practical expedients that allowed us to carry forward the determination of whether an arrangement contains a lease and lease classification, as well as our accounting for initial direct costs for existing contracts. We recorded a noncash cumulative effect adjustment, reflecting an aggregate operating lease ROU asset and corresponding lease liability of $45 million , on our opening consolidated balance sheet as of January 1, 2019. See Note 11—Lease Assets and Liabilities , for the new lease disclosures required by this ASU for lessees. For arrangements where we are the lessor, effective for periods after January 1, 2019, we elected to account for lease and service elements of contracts classified as leases on a combined basis under the provisions of ASU No. 2016-02, except for leases of processing-type assets, which contain non-ratable fees related to turnaround activity. For these types of leases, we continued to separate the lease and service elements based on relative standalone prices and applied the new lease standard to the lease element and the revenue standard to the service element. We recorded a noncash cumulative effect adjustment of $1 million to decrease our opening equity balance as of January 1, 2019. See Note 5—Operating Revenues , for additional impacts of adopting this ASU, including new lease disclosures required for lessors. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Note 4— Acquisitions 2018 Acquisitions Gray Oak Pipeline Project Acquisition See the “Gray Oak Pipeline, LLC” section of Note 6—Equity Investments and Loans , for a discussion of our acquisition of this project and its ownership structure. 2017 Acquisitions Bakken Pipeline/Merey Sweeny Acquisition In September 2017, we entered into a Contribution, Conveyance and Assumption Agreement (CCAA) with subsidiaries of Phillips 66 to acquire a 25% interest in each of Dakota Access, LLC (Dakota Access) and Energy Transfer Crude Oil Company, LLC (ETCO), together referred to as the Bakken Pipeline, and a 100% interest in Merey Sweeny, L.P., predecessor to Merey Sweeny LLC (both referred to herein as Merey Sweeny). Collectively, the assets acquired in the acquisition are referred to as the Bakken Pipeline/Merey Sweeny Acquisition. We paid Phillips 66 total consideration of $1.65 billion , consisting of $372 million in cash, the assumption of $588 million of promissory notes payable to Phillips 66 and a $450 million term loan under which Phillips 66 was the obligor, and the issuance of 4,713,113 common units to Phillips 66 PDI and 292,665 general partner units to our General Partner to maintain its 2% general partner interest. The Bakken Pipeline/Merey Sweeny Acquisition closed in October 2017. Pursuant to the tolling services agreement entered into with Phillips 66 and related to Merey Sweeny operations, we received $53 million from Phillips 66 for the prepayment of services related to Merey Sweeny’s next scheduled maintenance turnaround, which was recorded as deferred revenue in our consolidated balance sheet as of the acquisition date. The Bakken Pipeline/Merey Sweeny Acquisition was considered a common control transaction. Subsequent Acquisition In February 2020, we entered into a Purchase and Sale Agreement with Phillips 66 PDI to acquire its 50% interest in the Liberty Pipeline joint venture for approximately $75 million . The purchase price reflects the reimbursement of project costs incurred by Phillips 66 prior to the effective date of the transaction. We plan to fund the transaction through a combination of cash on hand and our revolving credit facility. The transaction is expected to close on March 2, 2020 . Liberty Pipeline LLC is developing and constructing the Liberty Pipeline system which, upon completion, will transport crude oil from the Rockies and Bakken production areas to Cushing, Oklahoma. The throughput capacity on the 24 inch pipeline is expected to be 400,000 BPD |
Operating Revenues
Operating Revenues | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Operating Revenues | Note 5—Operating Revenues Operating revenues are primarily generated from long-term pipeline transportation, terminaling, storage, processing and fractionation lease and service agreements, mainly with Phillips 66. These agreements typically include escalation clauses to adjust transportation tariffs and terminaling and storage fees to reflect changes in price indices. In addition, most of these agreements contain renewal options, which typically require the mutual consent of both our customers and us. Total operating revenues disaggregated by asset type were as follows: Millions of Dollars 2019 2018 2017* Pipelines $ 473 454 424 Terminals 167 157 152 Storage, processing and other revenues 486 434 358 Total operating revenues $ 1,126 1,045 934 * Sales and other operating revenues for the year ended December 31, 2017, are presented in accordance with accounting standards in effect prior to our adoption of ASU No. 2014-09 on January 1, 2018. The majority of our agreements with Phillips 66 are considered operating leases under GAAP. The lease’s classification as either an operating or financing lease requires judgment in assessing the contract’s lease and service components and in determining the asset’s fair value. For reporting periods prior to our adoption of the new lease accounting standard, ASU No. 2016-02, as of January 1, 2019, the lease and service elements included in these contracts were separated with the lease element recognized in accordance with the existing lease accounting standard and the service element recognized in accordance with the revenue accounting standard. Effective for periods after January 1, 2019, we elected to account for lease and service elements of contracts classified as leases on a combined basis under the provisions of ASU No. 2016-02, except for leases of processing-type assets, which contain non-ratable fees related to turnaround activity. For these types of leases, we continued to separate the lease and service elements based on relative standalone prices and applied the new lease standard to the lease element and the revenue standard to the service element. As a result of our change in accounting policy, our lease and service revenues, lease and service accounts receivable and lease and service deferred revenues reported for the year ended December 31, 2019 , are not prepared on the same basis as the amounts reported for the year ended December 31, 2018 . For the year ended December 31, 2019 , lease revenues were $930 million and service revenues were $196 million . For the year ended December 31, 2018 , lease revenues were $599 million and service revenues were $446 million . Accounts Receivable We bill our customers, mainly Phillips 66, under our lease and service contracts generally on a monthly basis. Total accounts receivable by revenue type was as follows: Millions of Dollars 2019 2018 Lease receivables $ 87 53 Service receivables 18 41 Other receivables — 1 Total accounts receivable $ 105 95 Deferred Revenues Our deferred revenues represent payments received from our customers, mainly Phillips 66, in advance of the period in which lease and service contract performance obligations have been fulfilled. The majority of our deferred revenues relate to a tolling agreement and a storage agreement that are classified as leases. The remainder of our deferred revenues relate to lease and service agreements that contain minimum volume commitments with recovery provisions. Our deferred revenues are recorded in the “Deferred revenues” and “Other liabilities” line items on our consolidated balance sheet. Total deferred revenues under our lease and service agreements were as follows: Millions of Dollars 2019 2018 Deferred lease revenues $ 41 73 Deferred service revenues 1 6 Total deferred revenues $ 42 79 Future Minimum Lease Payments from Customers At December 31, 2019 , future minimum payments to be received under our lease agreements with customers were estimated to be: Millions 2020 $ 697 2021 692 2022 680 2023 636 2024 516 Remaining years 1,353 Total future minimum lease payments from customers $ 4,574 Remaining Performance Obligations We typically have long-term service contracts with our customers, of which the original durations range from 5 to 15 years. The weighted-average remaining duration of these contracts is 11 years. These contracts include both fixed and variable transaction price components. At December 31, 2019 , future service revenues expected to be recognized for the fixed component of the transaction price of our remaining performance obligations from service contracts with our customers that have an original expected duration of greater than one year were: Millions of Dollars 2020 $ 146 2021 137 2022 136 2023 136 2024 116 Remaining years 671 Total future service revenues $ 1,342 For the remaining service performance obligations, we applied the exemption for variable prices allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer distinct services as part of a performance obligation. |
Equity Investments and Loans
Equity Investments and Loans | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Investments and Loans | Note 6—Equity Investments and Loans The following table summarizes our equity investments at December 31: Millions of Dollars Percentage Ownership Carrying Value 2019 2018 Dakota Access, LLC and Energy Transfer Crude Oil Company, LLC 25.00 % $ 592 608 Bayou Bridge Pipeline, LLC (Bayou Bridge) 40.00 294 277 DCP Sand Hills Pipeline, LLC (Sand Hills) 33.34 595 601 DCP Southern Hills Pipeline, LLC (Southern Hills) 33.34 215 206 Explorer Pipeline Company (Explorer) 21.94 105 115 Gray Oak Pipeline, LLC 65.00 759 288 Paradigm Pipeline LLC (Paradigm) 50.00 143 145 Phillips 66 Partners Terminal LLC (Phillips 66 Partners Terminal) 70.00 70 71 South Texas Gateway Terminal LLC (South Texas Gateway Terminal) 25.00 74 20 STACK Pipeline LLC (STACK) 50.00 114 117 Total equity investments $ 2,961 2,448 Earnings (losses) from our equity investments were as follows: Millions of Dollars 2019 2018 2017 Bakken Pipeline $ 226 177 69 Bayou Bridge 31 14 12 Sand Hills 150 119 81 Southern Hills 43 37 27 Explorer 33 43 21 Gray Oak Pipeline, LLC 3 1 — Paradigm 14 10 (1 ) Phillips 66 Partners Terminal 25 28 8 South Texas Gateway Terminal — — — STACK 10 10 6 Total equity in earnings of affiliates $ 535 439 223 Distributions received from our equity affiliates were $599 million , $477 million , and $274 million in 2019 , 2018 and 2017 , respectively. Gray Oak Pipeline, LLC In April 2018, we entered into a Purchase and Sale Agreement with Phillips 66 PDI to acquire its 100% interest in Gray Oak Holdings LLC (Holdings LLC), a limited liability company that, at that time, owned a 100% interest in Gray Oak Pipeline, LLC. Gray Oak Pipeline, LLC is developing and constructing the Gray Oak Pipeline which, upon completion, will transport crude oil from the Permian and Eagle Ford to Texas Gulf Coast destinations that include Corpus Christi, the Sweeny area, including the Phillips 66 Sweeny Refinery, as well as access to the Houston market. The pipeline system is expected to reach full service in the second quarter of 2020. We accounted for the acquisition of Holdings LLC as an acquisition of assets under common control. Also in April 2018, a co-venturer acquired a 25% interest in Gray Oak Pipeline, LLC, along with sufficient voting rights over key governance provisions such that we no longer could assert control over Gray Oak Pipeline, LLC. As a result, we (through our consolidated subsidiary Holdings LLC) began using the equity method of accounting for our investment in Gray Oak Pipeline, LLC at that time. In December 2018, a third party exercised its option to acquire a 35% interest in Holdings LLC. Because Holdings LLC’s sole asset was its 75% ownership interest in Gray Oak Pipeline, LLC, which is considered a financial asset, and because certain restrictions were placed on the third party’s ability to transfer or sell its interest in Holdings LLC during the construction of the Gray Oak Pipeline, the legal sale of the 35% interest did not qualify as a sale under GAAP. Rather, the third party’s cash contributions to Holdings LLC in 2019 to fund its share of previously incurred and future construction costs plus a premium to us are reflected as a long-term obligation in the “Obligation from equity interest transfer” line item on our consolidated balance sheet and as financing cash inflows in the “Proceeds from equity interest transfer” line item on our consolidated statement of cash flows. After construction of the Gray Oak Pipeline is fully completed, these restrictions expire, and the sale will be recognized under GAAP. We will continue to control and consolidate Holdings LLC after sale recognition, and therefore the third party’s 35% interest will be recharacterized from a long-term obligation to a noncontrolling interest on our consolidated balance sheet at that time. Also at that time, the premium paid will be recharacterized from a long-term obligation to a gain in our consolidated statement of income. During 2019, the third party contributed an aggregate of $342 million into Holdings LLC, and Holdings LLC used these contributions to fund its portion of Gray Oak Pipeline, LLC’s cash calls. In February 2019, Holdings LLC transferred a 10% interest in Gray Oak Pipeline, LLC, to a third party that exercised a purchase option, for proceeds of $81 million . This transfer was accounted for as a sale and resulted in a decrease in Holdings LLC’s ownership interest in Gray Oak Pipeline, LLC from 75% to 65% and the recognition of an immaterial gain. The proceeds received from this sale are reflected as an investing cash inflow in the “Proceeds from sale of equity interest” line item on our consolidated statement of cash flows. At December 31, 2019 , our effective ownership interest in the Gray Oak Pipeline was 42.25% . In June 2019 , Gray Oak Pipeline, LLC entered into a third-party term loan facility with an initial borrowing capacity of $1,230 million to cover a portion of the project cost for the Gray Oak Pipeline, inclusive of accrued interest. Subsequently, the facility was increased in July 2019 to $1,317 million and further increased in January 2020 to $1,379 million , inclusive of accrued interest. Borrowings under the facility are due on June 3, 2022 . We and our co-venturers provided a guarantee through an equity contribution agreement requiring proportionate equity contributions to Gray Oak Pipeline, LLC up to the total outstanding loan amount. Under the agreement, our maximum potential amount of future obligations is $583 million , plus any additional accrued interest and associated fees, which would be required if the term loan facility is fully utilized and Gray Oak Pipeline, LLC defaults on certain of its obligations thereunder. At December 31, 2019 , Gray Oak Pipeline, LLC had borrowings of $1,170 million outstanding, and our 42.25% proportionate exposure was $494 million . The net proceeds from the term loan were used by Gray Oak Pipeline, LLC for construction of the Gray Oak Pipeline and repayment of amounts borrowed under a related party loan agreement that we and our co-venturers executed in March 2019 and terminated upon the repayment by Gray Oak Pipeline, LLC in June 2019. Our total related party loan to and repayment received from Gray Oak Pipeline, LLC was $95 million . Gray Oak Pipeline, LLC 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. We have determined we are not the primary beneficiary because we and our co-venturers jointly direct the activities of Gray Oak Pipeline, LLC that most significantly impact economic performance. At December 31, 2019 , our maximum exposure to loss was $1,253 million , which represented our guarantee of the third-party term loan facility of $494 million and the aggregate book value of our equity method investment in Gray Oak Pipeline, LLC of $759 million . South Texas Gateway Terminal In April 2018, we acquired a 25% interest in the South Texas Gateway Terminal under construction by a co-venturer. This marine export terminal will connect to the Gray Oak Pipeline in Corpus Christi, Texas, and it will have two deepwater docks with storage capacity of 8.5 million barrels and up to 800,000 BPD of throughput capacity. The terminal is expected to start up in the third quarter of 2020. South Texas Gateway Terminal is considered a VIE because it does not have sufficient equity at risk to fully fund the construction of all assets required for principal operations. We have determined we are not the primary beneficiary because we and our co-venturers jointly direct the activities of the terminal that most significantly impact economic performance. At December 31, 2019 , our maximum exposure to loss was $74 million , which represented the aggregate book value of our equity investment in South Texas Gateway Terminal. Bakken Pipeline In October 2017, we acquired a 25% interest in the Bakken Pipeline system as part of the Bakken Pipeline/Merey Sweeny Acquisition. Dakota Access owns a pipeline system that transports crude oil from the Bakken/Three Forks production area in North Dakota to Patoka, Illinois, and ETCO owns a connecting crude oil pipeline system from Patoka, Illinois, to Nederland, Texas. These two pipeline systems collectively form the Bakken Pipeline system, which is operated by a co-venturer. The Bakken Pipeline system went into service in June 2017. We have a positive basis difference of $50 million for this investment, which represents capitalized interest incurred during construction of the pipeline and a capital contribution disbursed to the co-venturer. The positive basis difference is being amortized over periods between 18 and 43 years. See Note 4—Acquisitions , for additional information. In March 2019, a wholly owned subsidiary of Dakota Access closed on an offering of $2,500 million aggregate principal amount of unsecured senior notes. The net proceeds from the issuance of these notes were used to repay amounts outstanding under existing credit facilities of Dakota Access and ETCO. Dakota Access and ETCO have guaranteed repayment of the notes. In addition, we and our co-venturers provided a Contingent Equity Contribution Undertaking (CECU) in conjunction with the notes offering. Under the CECU, if Dakota Access receives an unfavorable court ruling related to certain disputed construction permits and Dakota Access determines that an equity contribution trigger event has occurred, the venturers may be severally required to make proportionate equity contributions to Dakota Access and ETCO up to an aggregate maximum of approximately $2,525 million . Our share of the maximum potential equity contributions under the CECU is approximately $631 million . STACK STACK is a joint venture that owns and operates a crude storage terminal and a common carrier pipeline that transports crude oil from the Sooner Trend, Anadarko Basin, Canadian and Kingfisher Counties play in northwestern Oklahoma to Cushing, Oklahoma. We have a positive basis difference of $39 million for this investment, which is due to the co-venturer’s contributed assets being recorded at their historical book value. The positive basis difference is being amortized over 42 years. Bakken Joint Ventures Phillips 66 Partners Terminal and Paradigm are two joint ventures with Paradigm Midstream, LLC that own and operate midstream logistics infrastructure in North Dakota. Phillips 66 Partners Terminal owns the Palermo Terminal and Paradigm owns the Sacagawea pipelines and Keene Terminal. We account for both joint ventures under the equity method of accounting due to governance provisions that require supermajority or unanimous voting on all decisions that significantly impact the governance, management and economic performance of the joint ventures. Sand Hills Sand Hills is a joint venture with DCP Partners that owns an NGL pipeline system that extends from the Permian Basin and Eagle Ford to facilities along the Texas Gulf Coast and the Mont Belvieu market hub. The Sand Hills Pipeline system is operated by DCP Partners. Southern Hills Southern Hills is a joint venture with DCP Partners that owns an NGL pipeline system that extends from the Midcontinent region to the Mont Belvieu, Texas market hub. The Southern Hills Pipeline system is operated by DCP Partners. We have a negative basis difference of $90 million for this investment, which originated when the pipeline, formerly known as Seaway Products, was sold by Phillips 66 to a related party. The negative basis difference represents a deferred gain and is being amortized over 42 years. Explorer Explorer owns and operates a pipeline system that extends from the Texas Gulf Coast to Indiana. The Explorer Pipeline system transports refined petroleum products to more than 70 major cities in 16 U.S. states. We have a positive basis difference of $78 million for this investment, which represents fair value adjustments attributable to ownership increases in the pipeline. The positive basis difference is being amortized over periods between 8 and 16 years. Bayou Bridge Bayou Bridge is a joint venture that owns a pipeline that transports crude oil from Nederland, Texas, to St. James, Louisiana. The Bayou Bridge Pipeline is operated by our co-venturer. A segment of the pipeline from Lake Charles to St. James, Louisiana, was completed on April 1, 2019. Summarized 100% financial information for all equity investments is presented on a combined basis below: Millions of Dollars 2019 2018 2017 Revenues $ 2,753 2,294 1,406 Income before income taxes 1,894 1,536 853 Net income 1,832 1,518 778 Current assets 642 751 577 Noncurrent assets 12,072 9,561 8,571 Current liabilities 662 3,008 354 Noncurrent liabilities 4,322 496 3,001 From acquisition date forward. |
Net Income Per Limited Partner
Net Income Per Limited Partner Unit | 12 Months Ended |
Dec. 31, 2019 | |
Partners' Capital Notes [Abstract] | |
Net Income Per Limited Partner Unit | Note 7—Net Income Per Limited Partner Unit Net income per limited partner unit applicable to common units is computed by dividing the limited partners’ interest in net income by the weighted-average number of common units outstanding for the period. Prior to August 1, 2019 , we had more than one class of participating securities and used the two-class method to calculate net income attributable to the Partnership per unit applicable to the limited partners. The classes of participating securities prior to August 1, 2019 , included common units, general partner units and IDRs. Effective August 1, 2019 , common units are the only participating securities. For the years ended December 31, 2019 , 2018 , and 2017 , our preferred units are potentially dilutive securities and were dilutive to net income per limited partner unit. See Note 15—Equity , for a discussion of the elimination of our General Partner’s IDRs and 2% economic interest effective August 1, 2019 and for additional information related to our preferred units. Net income earned by the Partnership is allocated between the classes of participating securities in accordance with our partnership agreement, after giving effect to priority income allocations to the holders of the preferred units. First, earnings are allocated based on actual cash distributions declared to our unitholders. To the extent net income exceeds or is less than cash distributions declared, this difference is allocated based on the unitholders’ respective ownership percentages, after consideration of any priority allocations of earnings. For the diluted net income per limited partner unit calculation, the preferred units are assumed to be converted at the beginning of the period into common limited partner units on a one-for-one basis, and the distribution formula for available cash in our partnership agreement is recalculated, using the original available cash amount increased only for the preferred distributions which would not have been paid after conversion. When our financial statements are retrospectively adjusted after a dropdown transaction, the earnings of the acquired business, prior to the closing of the transaction, are allocated entirely to our General Partner and presented as net income (loss) attributable to Predecessors. The earnings per unit of our limited partners prior to the close of the transaction do not change as a result of a dropdown transaction. After the closing of a dropdown transaction, the earnings of the acquired business are allocated in accordance with our partnership agreement as previously described. Millions of Dollars 2019 2018 2017 Net income attributable to the Partnership $ 923 796 461 Less: General partner’s distributions declared (including IDRs)* 139 236 158 Limited partners’ distributions declared on preferred units* 37 37 9 Limited partners’ distributions declared on common units* 609 382 291 Distributions less than net income attributable to the Partnership $ 138 141 3 *Distributions declared are attributable to the indicated periods. 2019 Limited Partners’ Common Units General Partner (including IDRs) Limited Partners’ Preferred Units Total Net income attributable to the Partnership (millions): Distributions declared $ 609 139 37 785 Distributions less than net income attributable to the Partnership 137 1 — 138 Net income attributable to the Partnership (basic) 746 140 37 923 Dilutive effect of preferred units (1) 32 Net income attributable to the Partnership (diluted) $ 778 Weighted-average units outstanding—basic 167,655,306 Dilutive effect of preferred units (1) 13,819,791 Weighted-average units outstanding—diluted 181,475,097 Net income attributable to the Partnership per limited partner unit—basic (dollars) $ 4.45 Net income attributable to the Partnership per limited partner unit—diluted (dollars) 4.29 (1) The dilutive effect of the preferred units assumes the reallocation of net income to the limited and general partners, including a reallocation associated with IDRs, pursuant to the available cash formula in the partnership agreement. 2018 Limited Partners’ Common Units General Partner (including IDRs) Limited Partners’ Preferred Units Total Net income attributable to the Partnership (millions): Distributions declared $ 382 236 37 655 Distributions less than net income attributable to the Partnership 137 4 — 141 Net income attributable to the Partnership (basic) 519 240 37 796 Dilutive effect of preferred units (1) 28 Net income attributable to the Partnership (diluted) $ 547 Weighted-average units outstanding—basic 122,768,582 Dilutive effect of preferred units (1) 13,819,791 Weighted-average units outstanding—diluted 136,588,373 Net income attributable to the Partnership per limited partner unit—basic (dollars) $ 4.22 Net income attributable to the Partnership per limited partner unit—diluted (dollars) 4.00 (1) The dilutive effect of the preferred units assumes the reallocation of net income to the limited and general partners, including a reallocation associated with IDRs, pursuant to the available cash formula in the partnership agreement. 2017 Limited Partners’ Common Units General Partner (including IDRs) Limited Partners’ Preferred Units Total Net income attributable to the Partnership (millions): Distributions declared $ 291 158 9 458 Distributions less than net income attributable to the Partnership 1 2 — 3 Net income attributable to the Partnership (basic) 292 160 9 461 Dilutive effect of preferred units (1) 7 Net income attributable to the Partnership (diluted) $ 299 Weighted-average units outstanding—basic 112,044,824 Dilutive effect of preferred units (1) 3,294,032 Weighted-average units outstanding—diluted 115,338,856 Net income attributable to the Partnership per limited partner unit—basic (dollars) $ 2.60 Net income attributable to the Partnership per limited partner unit—diluted (dollars) 2.59 (1) The dilutive effect of the preferred units assumes the reallocation of net income to the limited and general partners, including a reallocation associated with IDRs, pursuant to the available cash formula in the partnership agreement. On January 21, 2020 , the Board of Directors of our General Partner declared a quarterly cash distribution of $0.875 per common unit which, excluding distributions to holders of our preferred units, resulted in a total distribution of $200 million attributable to the fourth quarter of 2019 . This distribution was paid February 13, 2020 , to unitholders of record as of January 31, 2020 . |
Major Customer and Concentratio
Major Customer and Concentration of Credit Risk | 12 Months Ended |
Dec. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Major Customer and Concentration of Credit Risk | Note 8—Major Customer and Concentration of Credit Risk Phillips 66 accounted for 97% , 96% , and 95% of our total operating revenues for the years ended December 31, 2019 , 2018 and 2017 , respectively. Through our wholly owned and joint venture operations, we provide crude oil, refined petroleum products and NGL pipeline transportation, terminaling and storage, and crude oil gathering, NGL fractionation, crude oil processing, and rail-unloading services to Phillips 66 and other related parties. We are potentially exposed to concentration of credit risk primarily through our accounts receivable with Phillips 66. These receivables have payment terms of 30 days or less and are settled against any existing payables we may have to Phillips 66 through Phillips 66’s interaffiliate settlement process. We monitor the creditworthiness of Phillips 66, which has an investment grade credit rating. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 10—Goodwill The carrying amount of goodwill was as follows: Millions of Dollars 2019 2018 Beginning balance January 1 $ 185 185 Activity during the year — — Ending balance December 31 $ 185 185 |
Properties, Plants and Equipmen
Properties, Plants and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Properties, Plants and Equipment | Note 9—Properties, Plants and Equipment Our investment in PP&E, with the associated accumulated depreciation, at December 31 was: Estimated Useful Lives Millions of Dollars 2019 2018 Land $ 19 19 Buildings and improvements 3 to 30 years 94 89 Pipelines and related assets* 10 to 45 years 1,424 1,398 Terminals and related assets* 25 to 45 years 741 710 Rail racks and related assets* 33 years 137 137 Processing and related assets* 25 years 1,041 842 Caverns and related assets* 25 to 45 years 585 584 Construction-in-progress 367 216 Gross PP&E 4,408 3,995 Accumulated depreciation (1,059 ) (943 ) Net PP&E $ 3,349 3,052 *Assets for which we are the lessor. |
Lease Assets and Liabilities
Lease Assets and Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lease Assets and Liabilities | Note 11—Lease Assets and Liabilities We have agreements with Phillips 66 to lease land underlying or associated with certain of our assets. These agreements are classified as operating leases. Due to the economic infeasibility of canceling these leases, we consider them non-cancellable. Certain leases include escalation clauses for adjusting rental payments to reflect changes in price indices. Our lease agreements do not impose any significant restrictions on distribution payments, asset dispositions or borrowing ability. Effective with our implementation of ASU No. 2016-02, we elected to discount lease obligations using our incremental borrowing rate. For all leases, we elected the practical expedient not to separate service and lease costs. Our right-of way agreements in effect prior to January 1, 2019, were not accounted for as leases as they were not initially determined to be leases at their commencement dates. However, modifications to these agreements or new agreements will be assessed and accounted for accordingly under ASU No. 2016-02. For short-term leases, which are leases that, at the commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying asset that is reasonably certain to be exercised, we elected to not recognize the ROU asset and corresponding lease liability on our consolidated balance sheet. Operating lease ROU assets are recorded in the “Other assets” line item and lease liabilities are recorded in the “Other current liabilities” and “Other liabilities” line items on our consolidated balance sheet. At December 31, 2019 , the total operating lease ROU asset was $44 million . Future minimum lease payments and recorded short- and long-term lease liabilities at December 31, 2019 , for operating leases were: Millions 2020 $ 3 2021 3 2022 3 2023 3 2024 3 Remaining years 90 Future minimum lease payments 105 Amount representing interest or discounts (61 ) Total lease liabilities 44 Short-term lease liabilities (1 ) Long-term lease liabilities $ 43 Operating lease costs and operating cash outflows for the year ended December 31, 2019 , were not material. The weighted-average remaining lease term for our operating leases as of December 31, 2019 , was 35 years. The weighted-average discount rate for our operating leases as of December 31, 2019 , was 5.9% . |
Lease Assets and Liabilities | Note 11—Lease Assets and Liabilities We have agreements with Phillips 66 to lease land underlying or associated with certain of our assets. These agreements are classified as operating leases. Due to the economic infeasibility of canceling these leases, we consider them non-cancellable. Certain leases include escalation clauses for adjusting rental payments to reflect changes in price indices. Our lease agreements do not impose any significant restrictions on distribution payments, asset dispositions or borrowing ability. Effective with our implementation of ASU No. 2016-02, we elected to discount lease obligations using our incremental borrowing rate. For all leases, we elected the practical expedient not to separate service and lease costs. Our right-of way agreements in effect prior to January 1, 2019, were not accounted for as leases as they were not initially determined to be leases at their commencement dates. However, modifications to these agreements or new agreements will be assessed and accounted for accordingly under ASU No. 2016-02. For short-term leases, which are leases that, at the commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying asset that is reasonably certain to be exercised, we elected to not recognize the ROU asset and corresponding lease liability on our consolidated balance sheet. Operating lease ROU assets are recorded in the “Other assets” line item and lease liabilities are recorded in the “Other current liabilities” and “Other liabilities” line items on our consolidated balance sheet. At December 31, 2019 , the total operating lease ROU asset was $44 million . Future minimum lease payments and recorded short- and long-term lease liabilities at December 31, 2019 , for operating leases were: Millions 2020 $ 3 2021 3 2022 3 2023 3 2024 3 Remaining years 90 Future minimum lease payments 105 Amount representing interest or discounts (61 ) Total lease liabilities 44 Short-term lease liabilities (1 ) Long-term lease liabilities $ 43 Operating lease costs and operating cash outflows for the year ended December 31, 2019 , were not material. The weighted-average remaining lease term for our operating leases as of December 31, 2019 , was 35 years. The weighted-average discount rate for our operating leases as of December 31, 2019 , was 5.9% . |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Note 12—Debt Debt at December 31 was: Millions of Dollars 2019 2018 2.646% Senior Notes due February 2020 $ — 300 2.450% Senior Notes due December 2024 300 — 3.605% Senior Notes due February 2025 500 500 3.550% Senior Notes due October 2026 500 500 3.750% Senior Notes due March 2028 500 500 3.150% Senior Notes due December 2029 600 — 4.680% Senior Notes due February 2045 450 450 4.900% Senior Notes due October 2046 625 625 Tax-exempt bonds due April 2020 and April 2021, at 1.850% and 1.885% at 75 75 Revolving credit facility due January 2019 and October 2021 at weighted-average rate of 3.669% at year-end 2018 — 125 Debt at face value 3,550 3,075 Net unamortized discounts and debt issuance costs (34 ) (27 ) Total debt 3,516 3,048 Short-term debt (25 ) (50 ) Long-term debt $ 3,491 2,998 The fair value of our fixed-rate and floating-rate debt is estimated based on observable market prices and is classified in level 2 of the fair value hierarchy. The fair value of our fixed-rate debt amounted to $3,650 million and $2,660 million at December 31, 2019 and 2018 , respectively. The fair value of our floating-rate debt approximated carrying value of $75 million and $200 million at December 31, 2019 and 2018 , respectively. Maturities of borrowings outstanding at December 31, 2019 , inclusive of net unamortized discounts and debt issuance costs, for the five-year period ending 2024 were $25 million in 2020 , $50 million in 2021 and $297 million in 2024 . During the year ended December 31, 2019, our debt at face value increased $475 million due to: • Issuance of $900 million of 2019 Senior Notes. • Repayment of the $300 million outstanding principal balance of our 2.646% Senior Notes due February 2020. • Repayment of the $125 million outstanding under the revolving credit facility. 2019 Senior Notes On September 6, 2019 , we closed on a public offering of $900 million aggregate principal amount of unsecured notes consisting of: • $300 million aggregate principal amount of 2.450% Senior Notes due December 15, 2024 . • $600 million aggregate principal amount of 3.150% Senior Notes due December 15, 2029 . Interest on each series of senior notes is payable semi-annually in arrears on June 15 and December 15 of each year, commencing on June 15, 2020 . Total proceeds received from the offering were $892 million , net of underwriting discounts and commissions. Net proceeds from the Senior Notes offering were used for general partnership purposes, including debt repayments. On September 13, 2019, we used a portion of the proceeds to repay the $400 million outstanding principal balance of the senior unsecured term loan facility that was drawn during the first half of 2019. On October 15, 2019 , we used a portion of the proceeds to repay the aggregate $300 million outstanding principal balance of our 2.646% Senior Notes due February 2020 . Revolving Credit Facility On July 30, 2019 , we amended and restated our revolving credit agreement. The agreement extended the termination date from October 3, 2021 , to July 30, 2024 . No other material amendments were made to the agreement, and the overall capacity remains at $750 million with an option to increase the overall capacity to $1 billion , subject to certain conditions. We also have the option to extend the Credit Agreement for two additional one -year terms after its July 30, 2024, maturity date, subject to, among other things, the consent of the lenders holding the majority of the commitments and of each lender extending its commitment. As of December 31, 2019 , no amount had been directly drawn under our $750 million revolving credit facility; however, $1 million in letters of credit had been issued that were supported by this facility. As of December 31, 2018 , we had an aggregate of $125 million borrowed and outstanding under the credit facility. Outstanding borrowings under the Credit Agreement bear interest, at our option, at either: (a) the Eurodollar rate in effect from time to time plus the applicable margin; or (b) the base rate (as described in the Credit Agreement) plus the applicable margin. The pricing levels for the commitment fee and interest-rate margins are determined based on our credit ratings in effect from time to time. Outstanding borrowings bearing interest at the Eurodollar rate become due and payable on the revolving credit facility’s termination date. Outstanding borrowings bearing interest at the base rate plus the applicable margin become due and payable on the earlier of the revolving credit facility’s termination date or the fourteenth business day after such borrowings were made. We may at any time and from time to time prepay outstanding borrowings under the Credit Agreement, in whole or in part, without premium or penalty. The Credit Agreement requires that the Partnership’s ratio of total debt to EBITDA for the prior four fiscal quarters must be no greater than 5.0 :1.0 as of the last day of each fiscal quarter (and 5.5 :1.0 during the period following certain specified acquisitions). Our revolving credit facility is subject to customary financial covenants and limitations. We are in compliance with all such financial covenants and limitations. Term Loan Facility On March 22, 2019, we entered into a senior unsecured term loan facility with a borrowing capacity of $400 million due March 20, 2020. We borrowed an aggregate amount of $400 million under the facility during the first half of 2019. The proceeds were used for general partnership purposes, including repayment of amounts borrowed under our $750 million revolving credit facility. The outstanding principal balance of the senior unsecured term loan facility was repaid in full in September 2019. 2017 Senior Notes In October 2017, we closed on a notes offering (2017 Notes Offering) of $650 million aggregate principal amount of unsecured senior notes consisting of: • $500 million of 3.750% Senior Notes due March 1, 2028. • An additional $150 million of our 4.680% Senior Notes due February 15, 2045. Interest on the Senior Notes due 2028 is payable semiannually in arrears on March 1 and September 1 of each year, commencing on March 1, 2018. The Senior Notes due 2045 are an additional issuance of our Senior Notes due 2045, and interest is payable semiannually in arrears on February 15 and August 15 of each year. Total proceeds received from the 2017 Notes Offering were $643 million , net of underwriting discounts. We utilized the net proceeds to repay the remaining balances on the promissory notes and term loan assumed in the Bakken Pipeline/Merey Sweeny Acquisition and for general partnership purposes. Tax-Exempt Bonds In connection with the Bakken Pipeline/Merey Sweeny Acquisition, we assumed four $25 million tranches of tax-exempt bonds issued by the Brazos River Harbor Navigation District. We repaid one tranche in 2018, with another maturing in 2020 and two in 2021. The tranches accrue interest monthly based on a daily rate derived by the remarketing agent for the bonds. The interest rates are designed to represent the lowest rate acceptable by the tax-exempt, variable-rate bond market and approximate the tax-exempt bonds trading at par. Senior Bonds In May 2017 and prior to their maturity, we repaid Merey Sweeny senior bonds assumed in the Bakken Pipeline/Merey Sweeny Acquisition with a carrying value of $136 million on the repayment date, which resulted in an immaterial gain. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Note 13—Contingencies From time to time, lawsuits involving a variety of claims that arise in the ordinary course of business are filed against 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 sites. We regularly assess the need for accounting 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 any 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 federal, state and local environmental laws and regulations. We record accruals for contingent environmental liabilities based on management’s best estimates, using all information that is available at the time. We measure estimates and base liabilities on currently available facts, existing technology, and presently enacted laws and regulations, taking into account stakeholder and business considerations. When measuring 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 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. In the future, we may be involved in additional environmental assessments, cleanups and proceedings. Legal Proceedings Under our amended omnibus agreement, Phillips 66 provides certain services for our benefit, including legal support services, and we pay an operational and administrative support fee for these services. Phillips 66’s 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. The process facilitates the early evaluation and quantification of potential exposures in individual cases and enables 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, Phillips 66’s legal organization regularly assesses the adequacy of current accruals and determines if adjustment of existing accruals, or establishment of new accruals, is required. At December 31, 2019 and 2018 , we did not have any material accrued contingent liabilities associated with litigation matters. Indemnification and Excluded Liabilities Under our amended omnibus agreement and pursuant to the terms of various agreements under which we acquired assets from Phillips 66, Phillips 66 will indemnify us, or assume responsibility, for certain environmental liabilities, tax liabilities, litigation and any other liabilities attributable to the ownership or operation of the assets contributed to us and that arose prior to the effective date of each acquisition. These indemnifications and exclusions from liability have, in some cases, time limits and deductibles. When Phillips 66 performs under any of these indemnifications or exclusions from liability, we recognize noncash expenses and associated noncash capital contributions from our General Partner, as these are considered liabilities paid for by a principal unitholder. |
Assets Retirement Obligations a
Assets Retirement Obligations and Accrued Environmental Costs | 12 Months Ended |
Dec. 31, 2019 | |
Assets Retirement Obligations and Accrued Environmental Costs [Abstract] | |
Asset Retirement Obligations and Accrued Environmental Costs | Note 14—Asset Retirement Obligations and Accrued Environmental Costs Asset retirement obligations and accrued environmental costs at December 31 were: Millions of Dollars 2019 2018 Asset retirement obligations $ 11 11 Accrued environmental costs 3 2 Total asset retirement obligations and accrued environmental costs 14 13 Asset retirement obligations and accrued environmental costs due within one year (1 ) (1 ) Long-term asset retirement obligations and accrued environmental costs $ 13 12 Asset Retirement Obligations We have asset retirement obligations we are required to perform under law or contract once an asset is permanently taken out of service. These obligations primarily relate to the abandonment or removal of certain pipelines. Most of these obligations are not expected to be paid until many years in the future. During 2019 and 2018 , our asset retirement obligations changed as follows: Millions of Dollars 2019 2018 Balance at January 1 $ 11 10 Accretion of discount — 1 New obligations — — Changes in estimates of existing obligations — — Balance at December 31 $ 11 11 |
Equity
Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Equity | Note 15—Equity ATM Programs We have authorized an aggregate of $750 million under three $250 million continuous offerings of common units, or at-the-market (ATM) programs. The first two programs concluded in June 2018 and December 2019, respectively, leaving $250 million available under the third program. For the year ended December 31, 2019 , on a settlement-date basis, we issued an aggregate of 3,195,521 common units under our ATM programs, generating net proceeds of $173 million . During the year ended December 31, 2018 , on a settlement-date basis, we issued an aggregate of 2,532,096 common units under our ATM programs, generating net proceeds of $128 million . During the year ended December 31, 2017 , on a settlement-date basis, we issued an aggregate of 3,372,716 common units under our ATM programs, generating net proceeds of $173 million . Since inception in June 2016 and through December 31, 2019 , we issued an aggregate of 9,446,485 common units under our ATM programs, and generated net proceeds of $492 million , after broker commissions of $5 million and other costs of $3 million . The net proceeds from sales under the ATM programs are used for general partnership purposes, which may include debt repayment, acquisitions, capital expenditures and additions to working capital. Restructuring Transaction On August 1, 2019 , we closed on the transactions contemplated by the Partnership Interests Restructuring Agreement, dated July 24, 2019 , entered into with our General Partner. Pursuant to this agreement, all of the outstanding IDRs held by our General Partner were eliminated and its approximately 2% general partner interest in us was converted into a non-economic general partner interest; both in exchange for an aggregate of 101 million common units issued to Phillips 66 PDI. Because these transactions were between entities under common control, the common units issued to Phillips 66 PDI were assigned no value; rather, our General Partner’s negative equity balance of $1.4 billion at August 1, 2019 , was transferred to Phillips 66’s limited partner equity account. Common Unit Offerings In October 2017, we completed a private placement of 6,304,204 common units representing limited partner interests at a price of $47.59 per common unit, for total proceeds of $295 million , net of underwriting discounts and commissions. The net proceeds were used in part to fund the cash portion of the Bakken Pipeline/Merey Sweeny Acquisition. See Note 4— Acquisitions , for additional information. Preferred Unit Offering In October 2017, we completed the private placement of 13,819,791 perpetual convertible preferred units (preferred units) representing limited partner interests at a price of $54.27 per preferred unit. We received proceeds of $737 million from the offering, net of offering and transaction expenses. The net proceeds were used in part to fund the cash portion of the Bakken Pipeline/Merey Sweeny Acquisition. The preferred units rank senior to all common units with respect to distributions and rights upon liquidation. The holders of the preferred units are entitled to receive cumulative quarterly distributions equal to $0.678375 per unit, beginning for the quarter ended December 31, 2017, with a prorated amount from the date of issuance. Following the third anniversary of the issuance of the preferred units, the holders of the preferred units will receive as a quarterly distribution the greater of $0.678375 per unit or the amount of per-unit distributions paid to common unitholders as if such preferred units had converted into common units immediately prior to the record date. The holders of the preferred units may convert their preferred units into common units, on a one-for-one basis, at any time after the second anniversary of the issuance date, in full or in part, subject to minimum conversion amounts and conditions. After the third anniversary of the issuance date, we may convert the preferred units into common units at any time, in whole or in part, subject to certain minimum conversion amounts and conditions, if the arithmetic average of the volume-weighted trading price of our common units is greater than $73.2645 per unit for the 20 day trading period immediately preceding the conversion notice date and the average trading volume of the common units is at least 100,000 for the preceding 20 trading days. The conversion rate for the preferred units shall be the quotient of (a) the sum of (i) $54.27 , plus (ii) any unpaid cash distributions on the applicable preferred unit, divided by (b) $54.27 . The holders of the preferred units are entitled to vote on an as-converted basis with the common unitholders and have certain other class voting rights with respect to any amendment to our partnership agreement that would adversely affect any rights, preferences or privileges of the preferred units. In addition, upon certain events involving a change in control, the holders of preferred units may elect, among other potential elections, to convert their preferred units to common units at the then change of control conversion rate. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 16— Related Party Transactions Commercial Agreements We have entered into long-term, fee-based commercial agreements with Phillips 66 to provide transportation, terminaling, storage, stevedoring, fractionation, processing, and rail terminal services. Under these agreements, Phillips 66 commits to provide us with minimum transportation, throughput or storage volumes, or minimum monthly service fees. If Phillips 66 does not meet its minimum volume commitments under an agreement, Phillips 66 pays us a deficiency payment based on the calculation described in the agreement. Amended and Restated Operational Services Agreement Under our amended and restated operational services agreement, we reimburse Phillips 66 for certain operational services provided in support of our pipelines, terminaling, processing, and storage facilities. These services include routine and emergency maintenance and repair services, routine operational activities, routine administrative services, construction and related services and such other services as we and Phillips 66 may mutually agree upon from time to time. Amended Omnibus Agreement The amended omnibus agreement addresses our payment of an operating and administrative support fee and our obligation to reimburse Phillips 66 for all other direct or allocated costs and expenses incurred by Phillips 66 in providing general and administrative services. Additionally, the omnibus agreement addresses Phillips 66’s indemnification to us and our indemnification to Phillips 66 for certain environmental and other liabilities. Further, it addresses the granting of a license from Phillips 66 to us with respect to the use of certain Phillips 66 trademarks. The operational and administrative support fee is for the provision of certain services, including: logistical services; asset oversight, such as operational management and supervision; corporate engineering services, including asset integrity and regulatory services; business development services; executive services; financial and administrative services (including treasury and accounting); information technology; legal services; corporate health, safety and environmental services; facility services; human resources services; procurement services; investor relations; tax matters; and public company reporting services. We pay Phillips 66 an operational and administrative support fee under the terms of our amended omnibus agreement in the amount of $8 million per month. The monthly support fee was $7 million from October 14, 2016 to October 6, 2017, and $8 million thereafter. We also reimburse Phillips 66 for all other direct or allocated costs incurred on behalf of us, pursuant to the terms of our amended omnibus agreement. The classification of these charges between operating and maintenance expenses and general and administrative expenses is based on the functional nature of the services performed for our operations. Under our amended and restated operational services agreement, we reimburse Phillips 66 for the provision of certain operational services in support of our operating assets. Additionally, we pay Phillips 66 for insurance services provided to us, and recoveries under these policies are recorded as an offset to our expenses. Operating and maintenance expenses also include volumetric gains and losses associated with volumes transported by Phillips 66. Tax Sharing Agreement Under our tax sharing agreement, we reimburse Phillips 66 for our share of state and local income and other taxes incurred by Phillips 66 due to our results of operations being included in a combined or consolidated tax return filed by Phillips 66. Any reimbursement is limited to the tax that we (and our subsidiaries) would have paid had we not been included in a combined group with Phillips 66. Phillips 66 may use its tax attributes to cause its combined or consolidated group to owe no tax; however, we would nevertheless reimburse Phillips 66 for the tax we would have owed, even though Phillips 66 had no cash expense for that period. Related Party Transactions Significant related party transactions included in our total costs and expenses were: Millions of Dollars 2019 2018 2017 Operating and maintenance expenses $ 258 214 189 General and administrative expenses 65 60 64 Total $ 323 274 253 Other related party balances were included in the following line items on our consolidated balance sheet, all of which were related to commercial agreements with Phillips 66: Millions of Dollars 2019 2018 Prepaid expenses and other current assets $ 7 4 Other assets 44 — Deferred revenues 16 60 Other current liabilities 1 — Other liabilities 70 18 Equity Affiliate Arrangements In March 2019, we and our co-venturers in Dakota Access provided a CECU in conjunction with an unsecured senior notes offering. See Note 6—Equity Investments and Loans , for additional information. In June 2019, we issued a guarantee through an equity contribution agreement for 42.25% of the third-party term loan facility for Gray Oak Pipeline, LLC. See Note 6—Equity Investments and Loans , for additional information. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Note 17— Employee Benefit Plans Pension and Retirement Savings Plans Neither we nor our subsidiaries have any employees. Our General Partner has the sole responsibility for providing the employees and other personnel necessary to conduct our operations. All of the employees that conduct our wholly owned businesses are employed by Phillips 66. Those employees participate in the pension, postretirement health insurance and defined contribution benefit plans sponsored by Phillips 66. Most employees of Phillips 66 who provide direct support to our operations do so under the provisions of the amended and restated operational services agreement, which fees include a burden for benefit costs. |
Unit-Based Compensation
Unit-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Unit-Based Compensation | Note 18— Unit-Based Compensation In 2013, the Board of Directors of our General Partner adopted the Phillips 66 Partners LP 2013 Incentive Compensation Plan (the ICP). Awards under the ICP are available for officers, directors and employees of our General Partner or its affiliates, and any consultants or other individuals who perform services for the Partnership. The ICP allows for the grant of unit awards, restricted units, phantom units, unit options, unit appreciation rights, distribution equivalent rights, profits interest units and other unit-based awards. The ICP limits the number of common units that may be delivered pursuant to awards to 2,500,000 , subject to proportionate adjustment in the event of unit splits and similar events. From the closing of our initial public offering through December 31, 2019 , we have only issued phantom units to non-employee directors under the ICP. A phantom unit entitles the recipient to receive cash equal to the fair market value of a common unit on the date the phantom unit is settled after the vesting period (settlement date), and to also receive a distribution equivalent each quarter between the grant date and the settlement date in an amount equal to any cash distributions paid on a common unit during that time. During the year ended December 31, 2019 , we granted a total of 4,950 phantom units to three non-employee directors of the Partnership. For the years ended December 31, 2018 and 2017 , we granted a total of 4,326 and 4,794 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 19— Income Taxes We are not a taxable entity for U.S. federal income tax purposes or for the majority of states that impose an income tax. Taxes on our net income are borne generally by our partners through the allocation of taxable income. Our income tax provision results from state laws that apply to entities organized as partnerships. For us, this is primarily the state of Texas. At December 31, 2019 and 2018 , we had a net deferred tax liability of $9 million and $7 million , respectively. The net deferred tax liability was primarily associated with PP&E and equity investments. Our effective tax rate was less than 1% for the years ended December 31, 2019 , 2018 and 2017 . At December 31, 2019 and 2018 , we had no liability reported for uncertain tax positions. We also did no t have any interest or penalties related to income taxes for the years ended December 31, 2019 , 2018 and 2017 . Texas tax returns for the years 2014 and forward are subject to examination. |
Cash Flow Information
Cash Flow Information | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Cash Flow Information | Note 20— Cash Flow Information The acquisition discussed below had cash and noncash elements. The common and general partner units issued to Phillips 66 in the Bakken Pipeline/Merey Sweeny acquisition assigned no value, because the cash consideration and any debt assumed exceeded the historical net book value of the acquired assets. Accordingly, the units issued for the acquisition had no impact on partner capital balances, other than changing ownership percentages. See Note 4—Acquisitions , for additional information. Bakken Pipeline/Merey Sweeny Acquisition The historical book value of the net assets acquired in the Bakken Pipeline/Merey Sweeny Acquisition in 2017 was $729 million . Total cash consideration and assumed debt immediately repaid to Phillips 66 at acquisition totaled $963 million . Of this total, $729 million was an investing cash outflow, and the remaining $234 million was deemed a cash distribution to our General Partner (a financing cash outflow). The remaining balance of debt assumed in the acquisition of $447 million was a noncash financing activity that increased debt and decreased our General Partner’s capital account. Capital Expenditures and Investments Our capital expenditures and investments consisted of: Millions of Dollars 2019 2018 2017* Cash capital expenditures and investments $ 1,095 738 431 Change in capital expenditure accruals (13 ) 38 3 Total capital expenditures and investments $ 1,082 776 434 * The 2017 total capital expenditures and investments includes $82 million funded by Predecessors. Millions of Dollars 2019 2018 2017 Other Noncash Investing and Financing Activities Dividend of loan receivable to Phillips 66 by Predecessor $ — — 51 Cash Payments Interest and debt expense $ 100 109 96 Restricted Cash At December 31, 2019 , the Partnership did no t have any restricted cash. The restrictions on the cash received in February 2017, as a result of the retrospective adjustment for the Bakken Pipeline/Merey Sweeny Acquisition, were fully removed in the second quarter of 2017 when Merey Sweeny’s outstanding debt that contained lender restrictions on the use of cash was paid in full. |
Other Financial Information
Other Financial Information | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | |
Other Financial Information | Other Financial Information Millions of Dollars 2019 2018 2017 Interest and Debt Expense Incurred Debt $ 133 119 100 Other 3 3 2 136 122 102 Capitalized (28 ) (7 ) (1 ) Expensed $ 108 115 101 Other Income Co-venturer contractual make-whole payments $ — — 7 Interest income 3 1 3 Other 3 1 2 Total other income $ 6 2 12 |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Selected Quarterly Financial Information [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited) Millions of Dollars Per Common Unit Total Revenues and Other Income Income Before Income Taxes Net Income Attributable to the Partnership Limited Partners’ Interest in Net Income Attributable to the Partnership Net Income Attributable to the Partnership Basic Diluted 2019 First $ 423 199 198 119 0.96 0.92 Second 401 234 233 153 1.23 1.15 Third 411 238 237 228 1.18 1.15 Fourth 432 255 255 246 1.08 1.06 2018 First $ 355 174 172 110 0.91 0.87 Second 354 186 186 121 0.99 0.94 Third 384 217 217 144 1.17 1.10 Fourth 393 223 221 144 1.16 1.09 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP). Certain prior period financial information has been recast to reflect the current year’s presentation. We have acquired assets from Phillips 66 through transactions that were considered transfers of businesses between entities under common control. This required the transactions to be accounted for as if the transfers had occurred at the beginning of the period of transfer, with prior periods retrospectively adjusted to furnish comparative information. We refer to these pre-acquisition operations as those of our “Predecessors.” The combined financial statements of our Predecessors were derived from the accounting records of Phillips 66 and reflect the combined historical results of operations, financial position and cash flows of our Predecessors as if such businesses had been combined for all periods presented. All intercompany transactions and accounts within our Predecessors have been eliminated. The assets and liabilities of our Predecessors in these financial statements have been reflected on a historical cost basis because the transfer of the Predecessors to us occurred within the Phillips 66 consolidated group. The consolidated statement of income also includes expense allocations for certain functions performed by Phillips 66, including operational support services such as engineering and logistics and allocations of general corporate expenses related to executive oversight, accounting, treasury, tax, legal, information technology and procurement. These allocations were based primarily on the number of terminals and pipeline miles, and secondarily on activity-based costs. Our management believes the assumptions underlying the allocation of expenses from Phillips 66 are reasonable. Nevertheless, the financial results of our Predecessors may not include all of the actual expenses that would have been incurred had our Predecessors been a stand-alone publicly traded partnership during the periods presented. |
Consolidation Principles and Investments in Affiliates | Consolidation Principles and Investments in Affiliates Our consolidated financial statements include the accounts of majority-owned, controlled subsidiaries. The equity method is used to account for investments in affiliates in which we have the ability to exert significant influence over the affiliates’ operating and financial policies, including any variable interest entities of which we are not the primary beneficiary. Undivided interests in pipelines are consolidated on a proportionate basis. |
Net Investment-Predecessor | Net Investment—Predecessors “Net Investment—Predecessors” represents Phillips 66’s historical investment in the contributed businesses, our Predecessors’ accumulated net earnings after taxes, and the net effect of transactions with, and allocations from, Phillips 66 prior to the acquisition of the businesses from Phillips 66. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from these estimates. |
Common Control Transactions | Common Control Transactions Businesses acquired from Phillips 66 and its subsidiaries are accounted for as common control transactions whereby the net assets acquired are combined with ours at their carrying value. Any difference between carrying value and recognized consideration is treated as a capital transaction. To the extent that such transactions require prior-period financial information to be retrospectively adjusted to furnish comparative information, historical net equity amounts prior to the transaction date are reflected in “Net Investment—Predecessors.” Cash consideration up to the carrying value of net assets acquired is presented as an investing activity in our consolidated statement of cash flows. Cash consideration in excess of the carrying value of net assets acquired is presented as a financing activity in our consolidated statement of cash flows. |
Revenue Recognition | Revenue Recognition Revenues are primarily recognized for pipeline transportation, terminaling, storage, processing and fractionation services generated under long-term agreements. A significant portion of our revenues are derived from Phillips 66. The majority of these agreements with Phillips 66 are considered operating leases under GAAP. Effective for periods after January 1, 2019, we elected to account for lease and service elements of contracts classified as leases on a combined basis under the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-02, “Leases (Topic 842)”, except for leases of processing-type assets, which contain non-ratable fees related to turnaround activity. For these types of leases, we continued to separate the lease and service elements based on relative standalone prices and applied the new lease standard to the lease element and the revenue standard to the service element. For new or modified leases, our determination of lease classification involves estimates, primarily related to the fair value of the leased asset based on comparable replacement cost and obsolescence estimates, and the allocation of contract consideration between the lease and non-lease components based on the relative stand-alone selling price. Revenues from fixed minimum volume commitments are recognized over the performance obligation period for stand-ready service contracts. Revenues from the variable element of these stand-ready contracts and other contracts without fixed elements are recognized based on the actual volumes transported, stored, processed and fractionated at contractual rates because the actual volumes specifically relate to our efforts to transfer the distinct services. Generally, our services are billed and payments are received on a monthly basis. Billings to Phillips 66 for shortfall volumes under its quarterly minimum volume commitments are recorded as “Deferred revenues” in our consolidated balance sheet, as Phillips 66 generally has the right to make up the shortfall volumes in the following four quarters. For the lease element of the contracts, the deferred revenue will be recognized at the earlier of when shortfall volumes are made up, when the make-up rights contractually expire or when we determine the system will not have the necessary capacity to enable a customer to make up the shortfall volumes. For the service element of the contracts, the deferred revenue will be recognized when the performance obligation is complete or it is probable that the shortfall volumes will not be made up. Billings for tolling services relating to maintenance turnaround activities are billed in advance of such activities. These billings are initially recorded as “Deferred revenues” in our consolidated balance sheet and are recognized when the maintenance turnaround activity commences. Deferred revenue relating to maintenance turnaround operating expenses is recognized in the period the work is performed. Deferred revenue relating to capital projects performed concurrently with a maintenance turnaround is recognized ratably over the remaining tolling services agreement once the equipment is placed into service. At the time the Clemens Caverns commenced operations, the caverns had not reached total planned working capacity contracted under the storage agreement. During the build-out of the remaining capacity, a portion of the monthly storage fees was deferred. The deferred revenue is being recognized over the remaining term of the agreement as additional storage capacity was placed into service. |
Cash Equivalents | Cash Equivalents Cash equivalents are highly liquid, short-term investments that are readily convertible to known amounts of cash and will mature within 90 days or less from the date of acquisition. We carry these at cost plus accrued interest, which approximates fair value. |
Imbalances | Imbalances We do not purchase or produce crude oil, refined petroleum or NGL product inventories. We experience imbalances as a result of variances in meter readings and in other measurement methods, and volume fluctuations within our crude oil, refined petroleum products and NGL systems due to pressure and temperature changes. Certain of our transportation contracts provide for the shipper to pay a contractual loss allowance, which is valued using quoted market prices of the applicable commodity being shipped. These contractual loss allowances, which are received from the shipper irrespective of, and independently calculated from, actual volumetric gains or losses, are recorded as revenue. Any actual volumetric gains or losses are valued using quoted market prices of the applicable commodities and are recorded as decreases or increases to operating and maintenance expenses, respectively. |
Fair Value Measurements | Fair Value Measurements We measure assets and liabilities requiring fair value presentation or disclosure using the price that would be received to sell an asset or paid to transfer a liability (i.e., an exit price), and disclose such amounts according to the quality of valuation inputs under the following hierarchy: Level 1: Quoted prices in an active market for identical assets or liabilities. Level 2: Observable inputs other than quoted prices included within Level 1 for the asset or liability, either directly or indirectly through market-corroborated inputs. Level 3: Unobservable inputs that are significant to the fair value of assets or liabilities. We classify the fair value of an asset or liability based on the lowest level of input significant to its measurement. A fair value 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. Asset and liability fair values initially reported as Level 2 will be subsequently reported as Level 3 if corroborating market data becomes unavailable. The carrying amounts of our trade receivables and payables approximate fair value. Nonrecurring Fair Value Measurements We apply the fair value measurements criteria to determine the fair value of nonfinancial assets and liabilities that are measured at fair value on a nonrecurring basis, primarily asset retirement obligations and, when impaired, long-lived assets. |
Properties, Plants and Equipment (PP&E) | Properties, Plants and Equipment (PP&E) PP&E is recorded at cost. Costs of maintenance and repairs, which are not significant improvements, are expensed when incurred. Depreciation of PP&E is determined by the individual-unit-straight-line method or the group-straight-line method (for those individual units that are highly integrated with other units). |
Capitalized Interest | Capitalized Interest Interest from external borrowings is capitalized on major projects with an expected construction period of six months or longer. Capitalized interest is added to the cost of the underlying asset’s PP&E or the applicable equity investment and is amortized over the useful life of the asset. |
Major Maintenance Activities | Major Maintenance Activities Costs for planned integrity management projects are expensed in the period incurred. These types of costs include inspection services, contractor repair services, materials and supplies, equipment rentals and labor costs. |
Impairment of PP&E | Impairment of PP&E PP&E used in operations are assessed for impairment whenever changes in facts and circumstances indicate a possible significant deterioration in the future cash flows expected to be generated by an asset group. If, upon review, the sum of the undiscounted expected future pretax cash flows of an asset group is less than the carrying value of the asset group, including applicable liabilities, then the carrying value is written down to estimated fair value and the write down is reported as an impairment in the period in which the determination is made. Individual assets are grouped for impairment purposes at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets—generally at the pipeline system, terminal, or processing or fractionation system level. Since there usually is a lack of quoted market prices for our long-lived assets, the fair value of potentially impaired assets is typically determined based on the present value of expected future cash flows using discount rates and other assumptions believed to be consistent with those used by principal market participants, based on estimated replacement cost, or based on a multiple of operating cash flow validated with historical market transactions of similar assets where possible. The expected future cash flows used for impairment reviews and related fair value calculations are based on estimated future throughputs, tariffs and fees, operating costs and capital project decisions, considering all available evidence at the date of review. |
Impairment of Investments in Nonconsolidated Entities | Impairment of Investments in Nonconsolidated Entities Investments in nonconsolidated entities are assessed for impairment whenever changes in the facts and circumstances indicate a loss in value has occurred. When indicators exist, the fair value is estimated and compared to the investment carrying value. If any impairment is judgmentally determined to be other than temporary, the carrying value of the investment is written down to fair value. The fair value of the impaired investment is determined based on quoted market prices, if available, or upon the present value of expected future cash flows using discount rates and other assumptions believed to be consistent with those used by principal market participants and a market analysis of comparable assets, if appropriate. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in the acquisition of a business. Goodwill is not amortized, but rather is tested for impairment annually and when events or changes in circumstances indicate that the fair value of the reporting unit with goodwill has been reduced below carrying value. The majority of our goodwill is related to acquisitions from Phillips 66. In these common control transactions, the net assets acquired are recorded at Phillips 66’s historical carrying value, including any associated goodwill. We have one reporting unit for goodwill impairment testing. |
Asset Retirement Obligations and Environmental Costs | Asset Retirement Obligations and Environmental Costs Fair values of legal obligations to abandon or remove long-lived assets are recorded in the period in which the obligation arises. When the liability is initially recorded, we capitalize this cost by increasing the carrying amount of the related PP&E. Over time, the liability is increased for the change in its present value, and the capitalized cost in PP&E is depreciated over the useful life of the related asset. Our estimate may change after initial recognition of the obligation, in which case we record an adjustment to the liability and PP&E. Environmental expenditures are expensed or capitalized, depending upon their future economic benefit. Expenditures relating to an existing condition caused by past operations, and those having no future economic benefit, are expensed. Liabilities for environmental expenditures are recorded on an undiscounted basis (unless acquired in a business combination) when environmental assessments or cleanups are probable and the costs can be reasonably estimated. |
Income Taxes | Income Taxes We follow the asset and liability method of accounting for income taxes. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences between the financial statement carrying amounts and the tax basis of our assets and liabilities. Our operations are treated as a partnership for federal and state income tax purposes, with each partner being separately taxed on its share of taxable income. Therefore, we have excluded income taxes from these consolidated financial statements, except for the income tax provision resulting from state laws that apply to entities organized as partnerships. Our tax provision is computed as if we were a stand-alone tax paying entity. Any interest and penalties related to income taxes would be reported in interest and debt expense and operating and maintenance expenses, respectively, in our consolidated statement of income. |
Changes in Accounting Principles | Changes in Accounting Principles Effective January 1, 2019, we early adopted ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which amends the impairment model to utilize an expected loss methodology in place of the incurred loss methodology for financial instruments and off-balance sheet credit exposures. The amendment requires entities to consider a broader range of information to estimate expected credit losses, which may result in earlier recognition of losses. The adoption of the ASU did not have a material impact on our consolidated financial statements. Effective January 1, 2019, we adopted ASU 2016-02, “Leases (Topic 842)” using the modified retrospective transition method. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and corresponding lease liability on the consolidated balance sheet for all operating 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 consolidated income statement. We elected the package of practical expedients that allowed us to carry forward the determination of whether an arrangement contains a lease and lease classification, as well as our accounting for initial direct costs for existing contracts. We recorded a noncash cumulative effect adjustment, reflecting an aggregate operating lease ROU asset and corresponding lease liability of $45 million , on our opening consolidated balance sheet as of January 1, 2019. See Note 11—Lease Assets and Liabilities , for the new lease disclosures required by this ASU for lessees. For arrangements where we are the lessor, effective for periods after January 1, 2019, we elected to account for lease and service elements of contracts classified as leases on a combined basis under the provisions of ASU No. 2016-02, except for leases of processing-type assets, which contain non-ratable fees related to turnaround activity. For these types of leases, we continued to separate the lease and service elements based on relative standalone prices and applied the new lease standard to the lease element and the revenue standard to the service element. We recorded a noncash cumulative effect adjustment of $1 million to decrease our opening equity balance as of January 1, 2019. See Note 5—Operating Revenues , for additional impacts of adopting this ASU, including new lease disclosures required for lessors. |
Net Income Per Limited Partner Unit | Net income per limited partner unit applicable to common units is computed by dividing the limited partners’ interest in net income by the weighted-average number of common units outstanding for the period. Prior to August 1, 2019 , we had more than one class of participating securities and used the two-class method to calculate net income attributable to the Partnership per unit applicable to the limited partners. The classes of participating securities prior to August 1, 2019 , included common units, general partner units and IDRs. Effective August 1, 2019 , common units are the only participating securities. For the years ended December 31, 2019 , 2018 , and 2017 , our preferred units are potentially dilutive securities and were dilutive to net income per limited partner unit. See Note 15—Equity , for a discussion of the elimination of our General Partner’s IDRs and 2% economic interest effective August 1, 2019 and for additional information related to our preferred units. Net income earned by the Partnership is allocated between the classes of participating securities in accordance with our partnership agreement, after giving effect to priority income allocations to the holders of the preferred units. First, earnings are allocated based on actual cash distributions declared to our unitholders. To the extent net income exceeds or is less than cash distributions declared, this difference is allocated based on the unitholders’ respective ownership percentages, after consideration of any priority allocations of earnings. For the diluted net income per limited partner unit calculation, the preferred units are assumed to be converted at the beginning of the period into common limited partner units on a one-for-one basis, and the distribution formula for available cash in our partnership agreement is recalculated, using the original available cash amount increased only for the preferred distributions which would not have been paid after conversion. When our financial statements are retrospectively adjusted after a dropdown transaction, the earnings of the acquired business, prior to the closing of the transaction, are allocated entirely to our General Partner and presented as net income (loss) attributable to Predecessors. The earnings per unit of our limited partners prior to the close of the transaction do not change as a result of a dropdown transaction. After the closing of a dropdown transaction, the earnings of the acquired business are allocated in accordance with our partnership agreement as previously described. |
Operating Revenues (Tables)
Operating Revenues (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Total operating revenues disaggregated by asset type were as follows: Millions of Dollars 2019 2018 2017* Pipelines $ 473 454 424 Terminals 167 157 152 Storage, processing and other revenues 486 434 358 Total operating revenues $ 1,126 1,045 934 * Sales and other operating revenues for the year ended December 31, 2017, are presented in accordance with accounting standards in effect prior to our adoption of ASU No. 2014-09 on January 1, 2018. |
Accounts Receivable | Total accounts receivable by revenue type was as follows: Millions of Dollars 2019 2018 Lease receivables $ 87 53 Service receivables 18 41 Other receivables — 1 Total accounts receivable $ 105 95 |
Deferred Revenues | Total deferred revenues under our lease and service agreements were as follows: Millions of Dollars 2019 2018 Deferred lease revenues $ 41 73 Deferred service revenues 1 6 Total deferred revenues $ 42 79 |
Schedule of Future Minimum Payments Receivable | At December 31, 2019 , future minimum payments to be received under our lease agreements with customers were estimated to be: Millions 2020 $ 697 2021 692 2022 680 2023 636 2024 516 Remaining years 1,353 Total future minimum lease payments from customers $ 4,574 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | At December 31, 2019 , future service revenues expected to be recognized for the fixed component of the transaction price of our remaining performance obligations from service contracts with our customers that have an original expected duration of greater than one year were: Millions of Dollars 2020 $ 146 2021 137 2022 136 2023 136 2024 116 Remaining years 671 Total future service revenues $ 1,342 |
Equity Investments and Loans (T
Equity Investments and Loans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Equity Investments | Summarized 100% financial information for all equity investments is presented on a combined basis below: Millions of Dollars 2019 2018 2017 Revenues $ 2,753 2,294 1,406 Income before income taxes 1,894 1,536 853 Net income 1,832 1,518 778 Current assets 642 751 577 Noncurrent assets 12,072 9,561 8,571 Current liabilities 662 3,008 354 Noncurrent liabilities 4,322 496 3,001 From acquisition date forward. The following table summarizes our equity investments at December 31: Millions of Dollars Percentage Ownership Carrying Value 2019 2018 Dakota Access, LLC and Energy Transfer Crude Oil Company, LLC 25.00 % $ 592 608 Bayou Bridge Pipeline, LLC (Bayou Bridge) 40.00 294 277 DCP Sand Hills Pipeline, LLC (Sand Hills) 33.34 595 601 DCP Southern Hills Pipeline, LLC (Southern Hills) 33.34 215 206 Explorer Pipeline Company (Explorer) 21.94 105 115 Gray Oak Pipeline, LLC 65.00 759 288 Paradigm Pipeline LLC (Paradigm) 50.00 143 145 Phillips 66 Partners Terminal LLC (Phillips 66 Partners Terminal) 70.00 70 71 South Texas Gateway Terminal LLC (South Texas Gateway Terminal) 25.00 74 20 STACK Pipeline LLC (STACK) 50.00 114 117 Total equity investments $ 2,961 2,448 Earnings (losses) from our equity investments were as follows: Millions of Dollars 2019 2018 2017 Bakken Pipeline $ 226 177 69 Bayou Bridge 31 14 12 Sand Hills 150 119 81 Southern Hills 43 37 27 Explorer 33 43 21 Gray Oak Pipeline, LLC 3 1 — Paradigm 14 10 (1 ) Phillips 66 Partners Terminal 25 28 8 South Texas Gateway Terminal — — — STACK 10 10 6 Total equity in earnings of affiliates $ 535 439 223 |
Net Income Per Limited Partne_2
Net Income Per Limited Partner Unit (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Partners' Capital Notes [Abstract] | |
Schedule of Distributions Declared, Partners Interest in Partnership Net Income and Net Income per Unit by Class | Millions of Dollars 2019 2018 2017 Net income attributable to the Partnership $ 923 796 461 Less: General partner’s distributions declared (including IDRs)* 139 236 158 Limited partners’ distributions declared on preferred units* 37 37 9 Limited partners’ distributions declared on common units* 609 382 291 Distributions less than net income attributable to the Partnership $ 138 141 3 *Distributions declared are attributable to the indicated periods. 2019 Limited Partners’ Common Units General Partner (including IDRs) Limited Partners’ Preferred Units Total Net income attributable to the Partnership (millions): Distributions declared $ 609 139 37 785 Distributions less than net income attributable to the Partnership 137 1 — 138 Net income attributable to the Partnership (basic) 746 140 37 923 Dilutive effect of preferred units (1) 32 Net income attributable to the Partnership (diluted) $ 778 Weighted-average units outstanding—basic 167,655,306 Dilutive effect of preferred units (1) 13,819,791 Weighted-average units outstanding—diluted 181,475,097 Net income attributable to the Partnership per limited partner unit—basic (dollars) $ 4.45 Net income attributable to the Partnership per limited partner unit—diluted (dollars) 4.29 (1) The dilutive effect of the preferred units assumes the reallocation of net income to the limited and general partners, including a reallocation associated with IDRs, pursuant to the available cash formula in the partnership agreement. 2018 Limited Partners’ Common Units General Partner (including IDRs) Limited Partners’ Preferred Units Total Net income attributable to the Partnership (millions): Distributions declared $ 382 236 37 655 Distributions less than net income attributable to the Partnership 137 4 — 141 Net income attributable to the Partnership (basic) 519 240 37 796 Dilutive effect of preferred units (1) 28 Net income attributable to the Partnership (diluted) $ 547 Weighted-average units outstanding—basic 122,768,582 Dilutive effect of preferred units (1) 13,819,791 Weighted-average units outstanding—diluted 136,588,373 Net income attributable to the Partnership per limited partner unit—basic (dollars) $ 4.22 Net income attributable to the Partnership per limited partner unit—diluted (dollars) 4.00 (1) The dilutive effect of the preferred units assumes the reallocation of net income to the limited and general partners, including a reallocation associated with IDRs, pursuant to the available cash formula in the partnership agreement. 2017 Limited Partners’ Common Units General Partner (including IDRs) Limited Partners’ Preferred Units Total Net income attributable to the Partnership (millions): Distributions declared $ 291 158 9 458 Distributions less than net income attributable to the Partnership 1 2 — 3 Net income attributable to the Partnership (basic) 292 160 9 461 Dilutive effect of preferred units (1) 7 Net income attributable to the Partnership (diluted) $ 299 Weighted-average units outstanding—basic 112,044,824 Dilutive effect of preferred units (1) 3,294,032 Weighted-average units outstanding—diluted 115,338,856 Net income attributable to the Partnership per limited partner unit—basic (dollars) $ 2.60 Net income attributable to the Partnership per limited partner unit—diluted (dollars) 2.59 (1) The dilutive effect of the preferred units assumes the reallocation of net income to the limited and general partners, including a reallocation associated with IDRs, pursuant to the available cash formula in the partnership agreement. |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The carrying amount of goodwill was as follows: Millions of Dollars 2019 2018 Beginning balance January 1 $ 185 185 Activity during the year — — Ending balance December 31 $ 185 185 |
Properties, Plants and Equipm_2
Properties, Plants and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | Our investment in PP&E, with the associated accumulated depreciation, at December 31 was: Estimated Useful Lives Millions of Dollars 2019 2018 Land $ 19 19 Buildings and improvements 3 to 30 years 94 89 Pipelines and related assets* 10 to 45 years 1,424 1,398 Terminals and related assets* 25 to 45 years 741 710 Rail racks and related assets* 33 years 137 137 Processing and related assets* 25 years 1,041 842 Caverns and related assets* 25 to 45 years 585 584 Construction-in-progress 367 216 Gross PP&E 4,408 3,995 Accumulated depreciation (1,059 ) (943 ) Net PP&E $ 3,349 3,052 *Assets for which we are the lessor. |
Lease Assets and Liabilities (T
Lease Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Operating Lease, Liability | Future minimum lease payments and recorded short- and long-term lease liabilities at December 31, 2019 , for operating leases were: Millions 2020 $ 3 2021 3 2022 3 2023 3 2024 3 Remaining years 90 Future minimum lease payments 105 Amount representing interest or discounts (61 ) Total lease liabilities 44 Short-term lease liabilities (1 ) Long-term lease liabilities $ 43 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt at December 31 was: Millions of Dollars 2019 2018 2.646% Senior Notes due February 2020 $ — 300 2.450% Senior Notes due December 2024 300 — 3.605% Senior Notes due February 2025 500 500 3.550% Senior Notes due October 2026 500 500 3.750% Senior Notes due March 2028 500 500 3.150% Senior Notes due December 2029 600 — 4.680% Senior Notes due February 2045 450 450 4.900% Senior Notes due October 2046 625 625 Tax-exempt bonds due April 2020 and April 2021, at 1.850% and 1.885% at 75 75 Revolving credit facility due January 2019 and October 2021 at weighted-average rate of 3.669% at year-end 2018 — 125 Debt at face value 3,550 3,075 Net unamortized discounts and debt issuance costs (34 ) (27 ) Total debt 3,516 3,048 Short-term debt (25 ) (50 ) Long-term debt $ 3,491 2,998 |
Assets Retirement Obligations_2
Assets Retirement Obligations and Accrued Environmental Costs (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Assets Retirement Obligations and Accrued Environmental Costs [Abstract] | |
Schedule of Asset Retirement Obligations and Accrual for Environmental Costs | Asset retirement obligations and accrued environmental costs at December 31 were: Millions of Dollars 2019 2018 Asset retirement obligations $ 11 11 Accrued environmental costs 3 2 Total asset retirement obligations and accrued environmental costs 14 13 Asset retirement obligations and accrued environmental costs due within one year (1 ) (1 ) Long-term asset retirement obligations and accrued environmental costs $ 13 12 |
Schedule of Change in Asset Retirement Obligation | During 2019 and 2018 , our asset retirement obligations changed as follows: Millions of Dollars 2019 2018 Balance at January 1 $ 11 10 Accretion of discount — 1 New obligations — — Changes in estimates of existing obligations — — Balance at December 31 $ 11 11 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Summary of Related Party Charges | Significant related party transactions included in our total costs and expenses were: Millions of Dollars 2019 2018 2017 Operating and maintenance expenses $ 258 214 189 General and administrative expenses 65 60 64 Total $ 323 274 253 Other related party balances were included in the following line items on our consolidated balance sheet, all of which were related to commercial agreements with Phillips 66: Millions of Dollars 2019 2018 Prepaid expenses and other current assets $ 7 4 Other assets 44 — Deferred revenues 16 60 Other current liabilities 1 — Other liabilities 70 18 |
Cash Flow Information (Tables)
Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Summary of Capital Expenditures, Noncash Investing and Financing Activities and Cash Payments | Our capital expenditures and investments consisted of: Millions of Dollars 2019 2018 2017* Cash capital expenditures and investments $ 1,095 738 431 Change in capital expenditure accruals (13 ) 38 3 Total capital expenditures and investments $ 1,082 776 434 * The 2017 total capital expenditures and investments includes $82 million funded by Predecessors. Millions of Dollars 2019 2018 2017 Other Noncash Investing and Financing Activities Dividend of loan receivable to Phillips 66 by Predecessor $ — — 51 Cash Payments Interest and debt expense $ 100 109 96 |
Other Financial Information (Ta
Other Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | |
Other Financial Information | Note 21— Other Financial Information Millions of Dollars 2019 2018 2017 Interest and Debt Expense Incurred Debt $ 133 119 100 Other 3 3 2 136 122 102 Capitalized (28 ) (7 ) (1 ) Expensed $ 108 115 101 Other Income Co-venturer contractual make-whole payments $ — — 7 Interest income 3 1 3 Other 3 1 2 Total other income $ 6 2 12 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Selected Quarterly Financial Information [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Millions of Dollars Per Common Unit Total Revenues and Other Income Income Before Income Taxes Net Income Attributable to the Partnership Limited Partners’ Interest in Net Income Attributable to the Partnership Net Income Attributable to the Partnership Basic Diluted 2019 First $ 423 199 198 119 0.96 0.92 Second 401 234 233 153 1.23 1.15 Third 411 238 237 228 1.18 1.15 Fourth 432 255 255 246 1.08 1.06 2018 First $ 355 174 172 110 0.91 0.87 Second 354 186 186 121 0.99 0.94 Third 384 217 217 144 1.17 1.10 Fourth 393 223 221 144 1.16 1.09 |
Business and Basis of Present_2
Business and Basis of Presentation (Details) - Phillips 66 - refinery | Dec. 31, 2019 | Aug. 01, 2015 |
Variable Interest Entity [Line Items] | ||
Entities under common control, ownership percentage transferred, wholly owned | 100.00% | |
Number of refineries most of our assets are connected to | 9 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2019reporting_unit | |
Accounting Policies [Abstract] | |
Number of reporting units | 1 |
Changes in Accounting Princip_2
Changes in Accounting Principles (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Jan. 01, 2019 | Jan. 01, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Aggregate operating lease ROU asset | $ 44 | $ 45 | |
Cumulative effective of accounting principle | 1 | $ (30) | |
Operating lease, liability | $ 44 | 45 | |
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effective of accounting principle | $ 1 |
Acquisitions (Narrative) (Detai
Acquisitions (Narrative) (Details) $ in Millions | Aug. 01, 2019 | Feb. 21, 2020USD ($)bbl / din | Apr. 30, 2018bbl / d | Oct. 31, 2017USD ($)shares | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||||
General partner interest, percent | 2.00% | ||||
Throughput capacity (up to) | bbl / d | 800,000 | ||||
Bakken Pipeline | |||||
Business Acquisition [Line Items] | |||||
Ownership interest, percentage | 25.00% | 25.00% | |||
Common Control Transaction | Phillips 66 | |||||
Business Acquisition [Line Items] | |||||
General partner interest, percent | 2.00% | ||||
Common Control Transaction | Merey Sweeny | Phillips 66 | Phillips 66 | |||||
Business Acquisition [Line Items] | |||||
Entities under common control, percentage of voting interests received | 100.00% | ||||
Common Control Transaction | Bakken Pipeline and MSLP Acquisition | Phillips 66 | Common Units | |||||
Business Acquisition [Line Items] | |||||
Equity interest issued (in units) | shares | 4,713,113 | ||||
Common Control Transaction | Bakken Pipeline and MSLP Acquisition | Phillips 66 | General Partner Units | |||||
Business Acquisition [Line Items] | |||||
Equity interest issued (in units) | shares | 292,665 | ||||
Common Control Transaction | Bakken Pipeline and MSLP Acquisition | Phillips 66 | Phillips 66 | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred | $ 1,650 | ||||
Cash consideration | 372 | ||||
Deferred revenues and other liabilities | 53 | ||||
Notes Payable | Common Control Transaction | Bakken Pipeline and MSLP Acquisition | Phillips 66 | Phillips 66 | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred, liabilities incurred | 588 | ||||
Loans Payable | Common Control Transaction | Bakken Pipeline and MSLP Acquisition | Phillips 66 | Phillips 66 | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred, liabilities incurred | $ 450 | ||||
Subsequent Event | Common Control Transaction | Liberty Pipeline, LLC | Phillips 66 | Phillips 66 PDI | |||||
Business Acquisition [Line Items] | |||||
Entities under common control, percentage of voting interests received | 50.00% | ||||
Consideration transferred | $ 75 | ||||
Pipe Size | in | 24 | ||||
Throughput capacity (up to) | bbl / d | 400,000 |
Operating Revenues (Disaggregat
Operating Revenues (Disaggregated Revenues) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue from External Customer [Line Items] | |||
Revenues | $ 1,126 | $ 1,045 | $ 934 |
Pipelines | |||
Revenue from External Customer [Line Items] | |||
Revenues | 473 | 454 | 424 |
Terminals | |||
Revenue from External Customer [Line Items] | |||
Revenues | 167 | 157 | 152 |
Storage, processing and other revenues | |||
Revenue from External Customer [Line Items] | |||
Revenues | $ 486 | $ 434 | $ 358 |
Operating Revenues (Operating R
Operating Revenues (Operating Revenues) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Lease revenue | $ 930 | ||
Total operating revenues | 1,126 | $ 1,045 | $ 934 |
Lease revenue | 599 | ||
Service revenues | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Total operating revenues | $ 196 | $ 446 |
Operating Revenues (Accounts Re
Operating Revenues (Accounts Receivable) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Revenue from External Customer [Line Items] | ||
Total accounts receivable | $ 105 | $ 95 |
Lease receivables | ||
Revenue from External Customer [Line Items] | ||
Total accounts receivable | 87 | 53 |
Service receivables | ||
Revenue from External Customer [Line Items] | ||
Total accounts receivable | 18 | 41 |
Other receivables | ||
Revenue from External Customer [Line Items] | ||
Total accounts receivable | $ 0 | $ 1 |
Operating Revenues (Deferred Re
Operating Revenues (Deferred Revenue) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Revenue from External Customer [Line Items] | ||
Total deferred revenues | $ 42 | $ 79 |
Deferred lease revenues | ||
Revenue from External Customer [Line Items] | ||
Total deferred revenues | 41 | 73 |
Service revenues | ||
Revenue from External Customer [Line Items] | ||
Total deferred revenues | $ 1 | $ 6 |
Operating Revenues (Schedule of
Operating Revenues (Schedule of Future Minimum Operating Lease Income) (Details) $ in Millions | Dec. 31, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
2020 | $ 697 |
2021 | 692 |
2022 | 680 |
2023 | 636 |
2024 | 516 |
Remaining years | 1,353 |
Total future minimum lease payments from customers | $ 4,574 |
Operating Revenues (Narrative)
Operating Revenues (Narrative) (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Customer contracts, average remaining duration | 11 years |
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 |
Operating Revenues Remaining Pe
Operating Revenues Remaining Performance Obligations (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Sep. 30, 2019 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | ||
Revenue from External Customer [Line Items] | ||
Remaining performance obligation | $ 146 | |
Timing of satisfaction of performance obligation | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | ||
Revenue from External Customer [Line Items] | ||
Remaining performance obligation | 137 | |
Timing of satisfaction of performance obligation | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | ||
Revenue from External Customer [Line Items] | ||
Remaining performance obligation | 136 | |
Timing of satisfaction of performance obligation | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | ||
Revenue from External Customer [Line Items] | ||
Remaining performance obligation | 136 | |
Timing of satisfaction of performance obligation | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | ||
Revenue from External Customer [Line Items] | ||
Remaining performance obligation | 116 | |
Timing of satisfaction of performance obligation | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | ||
Revenue from External Customer [Line Items] | ||
Remaining performance obligation | 671 | |
Timing of satisfaction of performance obligation | 1 year | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | ||
Revenue from External Customer [Line Items] | ||
Remaining performance obligation | $ 1,342 | |
Timing of satisfaction of performance obligation |
Equity Investments and Loans (S
Equity Investments and Loans (Schedule of Equity Investments) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Feb. 28, 2019 | Jan. 31, 2019 | Dec. 31, 2018 | Apr. 30, 2018 | Oct. 31, 2017 |
Schedule of Equity Method Investments [Line Items] | ||||||
Carrying Value | $ 2,961 | $ 2,448 | ||||
Bakken Pipeline | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Percentage Ownership | 25.00% | 25.00% | ||||
Carrying Value | $ 592 | 608 | ||||
Bayou Bridge Pipeline, LLC (Bayou Bridge) | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Percentage Ownership | 40.00% | |||||
Carrying Value | $ 294 | 277 | ||||
DCP Sand Hills Pipeline, LLC (Sand Hills) | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Percentage Ownership | 33.34% | |||||
Carrying Value | $ 595 | 601 | ||||
DCP Southern Hills Pipeline, LLC (Southern Hills) | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Percentage Ownership | 33.34% | |||||
Carrying Value | $ 215 | 206 | ||||
Explorer Pipeline Company (Explorer) | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Percentage Ownership | 21.94% | |||||
Carrying Value | $ 105 | $ 115 | ||||
Gray Oak Pipeline, LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Percentage Ownership | 65.00% | 75.00% | 65.00% | 75.00% | ||
Carrying Value | $ 759 | $ 288 | ||||
Paradigm Pipeline LLC (Paradigm) | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Percentage Ownership | 50.00% | |||||
Carrying Value | $ 143 | 145 | ||||
Phillips 66 Partners Terminal LLC (Phillips 66 Partners Terminal) | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Percentage Ownership | 70.00% | |||||
Carrying Value | $ 70 | 71 | ||||
South Texas Gateway Terminal LLC (South Texas Gateway Terminal) | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Percentage Ownership | 25.00% | 25.00% | ||||
Carrying Value | $ 74 | 20 | ||||
STACK Pipeline LLC (STACK) | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Percentage Ownership | 50.00% | |||||
Carrying Value | $ 114 | $ 117 |
Equity Investments and Loans _2
Equity Investments and Loans (Schedule Of Earnings From Equity Investments) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||||
Equity in earnings of affiliates | $ 535 | $ 439 | $ 223 | |
Bakken Pipeline | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity in earnings of affiliates | $ 226 | 177 | 69 | |
Bayou Bridge | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity in earnings of affiliates | 31 | 14 | 12 | |
Sand Hills | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity in earnings of affiliates | 150 | 119 | 81 | |
Southern Hills | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity in earnings of affiliates | 43 | 37 | 27 | |
Explorer | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity in earnings of affiliates | 33 | 43 | 21 | |
Gray Oak Pipeline, LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity in earnings of affiliates | 3 | 1 | 0 | |
Paradigm | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity in earnings of affiliates | 14 | 10 | (1) | |
Phillips 66 Partners Terminal | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity in earnings of affiliates | 25 | 28 | 8 | |
South Texas Gateway Terminal | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity in earnings of affiliates | 0 | 0 | 0 | |
STACK | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Equity in earnings of affiliates | $ 10 | $ 10 | $ 6 |
Equity Investments and Loans (N
Equity Investments and Loans (Narrative) (Details) MMBbls in Millions | 1 Months Ended | 12 Months Ended | |||||||||||
Feb. 28, 2019USD ($) | Apr. 30, 2018bbl / ddockMMBbls | Oct. 31, 2017USD ($)pipeline_system | Dec. 31, 2019USD ($)statecity | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jan. 31, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 06, 2019USD ($) | Jul. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Jan. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Distributions received from affiliates | $ 599,000,000 | $ 477,000,000 | $ 274,000,000 | ||||||||||
Proceeds from sale of equity interest | 81,000,000 | 0 | $ 0 | ||||||||||
Proceeds from related party debt | 95,000,000 | ||||||||||||
Equity investments | $ 2,961,000,000 | $ 2,448,000,000 | |||||||||||
Throughput capacity (up to) | bbl / d | 800,000 | ||||||||||||
Gray Oak Pipeline, LLC | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Co-venture ownership interest | 25.00% | ||||||||||||
Ownership interest, percentage | 75.00% | 65.00% | 75.00% | 65.00% | |||||||||
Effective ownership interest, percentage | 42.25% | 42.25% | |||||||||||
Guarantor obligations | $ 583,000,000 | ||||||||||||
Equity investments | $ 759,000,000 | $ 288,000,000 | |||||||||||
South Texas Gateway Terminal LLC (South Texas Gateway Terminal) | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Ownership interest, percentage | 25.00% | 25.00% | |||||||||||
VIE, maximum loss exposure | $ 74,000,000 | ||||||||||||
Equity investments | $ 74,000,000 | 20,000,000 | |||||||||||
Number of deepwater docks | dock | 2 | ||||||||||||
Bakken Pipeline | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Ownership interest, percentage | 25.00% | 25.00% | |||||||||||
Equity investments | $ 592,000,000 | 608,000,000 | |||||||||||
Number of pipeline systems | pipeline_system | 2 | ||||||||||||
Basis difference | $ 50,000,000 | ||||||||||||
Dakota Access and ETCO | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Maximum exposure, undiscounted, co-venturers | $ 2,525,000,000 | ||||||||||||
Maximum exposure, undiscounted | 631,000,000 | ||||||||||||
STACK Pipeline LLC (STACK) | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Ownership interest, percentage | 50.00% | ||||||||||||
Equity investments | $ 114,000,000 | 117,000,000 | |||||||||||
Basis difference | $ 39,000,000 | ||||||||||||
Amortization period of basis difference, in years | 42 years | ||||||||||||
DCP Southern Hills Pipeline, LLC (Southern Hills) | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Ownership interest, percentage | 33.34% | ||||||||||||
Equity investments | $ 215,000,000 | 206,000,000 | |||||||||||
Basis difference | $ (90,000,000) | ||||||||||||
Amortization period of basis difference, in years | 42 years | ||||||||||||
Explorer | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Ownership interest, percentage | 21.94% | ||||||||||||
Equity investments | $ 105,000,000 | $ 115,000,000 | |||||||||||
Basis difference | $ 78,000,000 | ||||||||||||
Minimum | Bakken Pipeline | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Amortization period of basis difference, in years | 18 years | ||||||||||||
Minimum | Explorer | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Amortization period of basis difference, in years | 8 years | ||||||||||||
Maximum | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Storage capacity | MMBbls | 8.5 | ||||||||||||
Maximum | Bakken Pipeline | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Amortization period of basis difference, in years | 43 years | ||||||||||||
Maximum | Explorer | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Amortization period of basis difference, in years | 16 years | ||||||||||||
Variable Interest Entity, Primary Beneficiary | Gray Oak Pipeline, LLC | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Ownership interest, percentage | 42.25% | ||||||||||||
Guarantor obligations, current carrying value | $ 494,000,000 | ||||||||||||
VIE, maximum loss exposure | $ 1,253,000,000 | ||||||||||||
Equity investments | $ 759,000,000 | ||||||||||||
Third Party | Gray Oak Pipeline, LLC | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Percentage of ownership | 10.00% | ||||||||||||
Proceeds from sale of equity interest | $ 81,000,000 | ||||||||||||
Third Party | Gray Oak Holdings LLC | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Percentage of ownership | 35.00% | ||||||||||||
Gray Oak Pipeline, LLC | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Maximum equity contribution, co-venture | $ 1,317,000,000 | $ 1,230,000,000 | |||||||||||
Gray Oak Pipeline, LLC | Variable Interest Entity, Primary Beneficiary | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Guarantor obligations, current carrying value | $ 1,170,000,000 | ||||||||||||
Gray Oak Pipeline, LLC | Subsequent Event | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Maximum equity contribution, co-venture | $ 1,379,000,000 | ||||||||||||
Explorer | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Number of cities in which entity operates | city | 70 | ||||||||||||
Number of states in which entity operates | state | 16 | ||||||||||||
Senior Notes | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Senior notes | $ 650,000,000 | $ 900,000,000 | $ 900,000,000 | ||||||||||
Senior Notes | Dakota Access, LLC | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Senior notes | $ 2,500,000,000 | ||||||||||||
Gray Oak Holdings LLC | Common Control Transaction | Phillips 66 | Phillips 66 PDI | Gray Oak Pipeline, LLC | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Entities under common control, percentage of voting interests received | 100.00% | ||||||||||||
Gray Oak Holdings LLC | Third Party | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Third party contribution | $ 342,000,000 |
Equity Investments and Loans _3
Equity Investments and Loans (Summarized Financial Information) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |||
Revenues | $ 2,753 | $ 2,294 | $ 1,406 |
Income before income taxes | 1,894 | 1,536 | 853 |
Net income | 1,832 | 1,518 | 778 |
Current assets | 642 | 751 | 577 |
Noncurrent assets | 12,072 | 9,561 | 8,571 |
Current liabilities | 662 | 3,008 | 354 |
Noncurrent liabilities | $ 4,322 | $ 496 | $ 3,001 |
Net Income Per Limited Partne_3
Net Income Per Limited Partner Unit (Schedule of Net Income By Class of Participating Securities Distributions ) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Limited Partners' Capital Account [Line Items] | |||||||||||
Net income | $ 255 | $ 237 | $ 233 | $ 198 | $ 221 | $ 217 | $ 186 | $ 172 | $ 923 | $ 796 | $ 461 |
Distributions declared | 785 | 655 | 458 | ||||||||
Distributions less than net income attributable to the Partnership | 138 | 141 | 3 | ||||||||
General Partner | |||||||||||
Limited Partners' Capital Account [Line Items] | |||||||||||
Net income | 140 | 240 | 160 | ||||||||
Distributions declared | 139 | 236 | 158 | ||||||||
Distributions less than net income attributable to the Partnership | 1 | 4 | 2 | ||||||||
Preferred Unitholders Public | Limited Partner | |||||||||||
Limited Partners' Capital Account [Line Items] | |||||||||||
Net income | 37 | 37 | 9 | ||||||||
Distributions declared | 37 | 37 | 9 | ||||||||
Distributions less than net income attributable to the Partnership | 0 | 0 | 0 | ||||||||
Common Units | Limited Partner | |||||||||||
Limited Partners' Capital Account [Line Items] | |||||||||||
Net income | 746 | 519 | 292 | ||||||||
Distributions declared | 609 | 382 | 291 | ||||||||
Distributions less than net income attributable to the Partnership | $ 137 | $ 137 | $ 1 |
Net Income Per Limited Partne_4
Net Income Per Limited Partner Unit (Schedule of Net Income By Class of Participating Securities) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Partners' Capital [Abstract] | |||||||||||
Distributions declared | $ 785 | $ 655 | $ 458 | ||||||||
Distributions less than net income attributable to the Partnership | 138 | 141 | 3 | ||||||||
Net income attributable to the Partnership | $ 255 | $ 237 | $ 233 | $ 198 | $ 221 | $ 217 | $ 186 | $ 172 | $ 923 | 796 | 461 |
Net income attributable to the Partnership per limited partner unit—basic (in usd per share) | $ 1.08 | $ 1.18 | $ 1.23 | $ 0.96 | $ 1.16 | $ 1.17 | $ 0.99 | $ 0.91 | |||
Net income attributable to the Partnership per limited partner unit—diluted (in usd per share) | $ 1.06 | $ 1.15 | $ 1.15 | $ 0.92 | $ 1.09 | $ 1.10 | $ 0.94 | $ 0.87 | |||
Common Units | |||||||||||
Partners' Capital [Abstract] | |||||||||||
Net income attributable to the Partnership (diluted) | $ 547 | $ 299 | |||||||||
Weighted-average units outstanding—basic (in shares) | 167,655,306 | 122,768,582 | 112,044,824 | ||||||||
Dilutive effect of preferred units (in shares) | 13,819,791 | 13,819,791 | 3,294,032 | ||||||||
Weighted-average units outstanding—diluted (in shares) | 181,475,097 | 136,588,373 | 115,338,856 | ||||||||
Net income attributable to the Partnership per limited partner unit—basic (in usd per share) | $ 4.45 | $ 4.22 | $ 2.60 | ||||||||
Net income attributable to the Partnership per limited partner unit—diluted (in usd per share) | $ 4.29 | $ 4 | $ 2.59 | ||||||||
Limited Partner | |||||||||||
Partners' Capital [Abstract] | |||||||||||
Dilutive effect of preferred units | $ 28 | $ 7 | |||||||||
Limited Partner | Common Units | |||||||||||
Partners' Capital [Abstract] | |||||||||||
Distributions declared | $ 609 | 382 | 291 | ||||||||
Distributions less than net income attributable to the Partnership | 137 | 137 | 1 | ||||||||
Net income attributable to the Partnership | 746 | 519 | 292 | ||||||||
Dilutive effect of preferred units | 32 | ||||||||||
Net income attributable to the Partnership (diluted) | 778 | ||||||||||
Limited Partner | Preferred Unitholders Public | |||||||||||
Partners' Capital [Abstract] | |||||||||||
Distributions declared | 37 | 37 | 9 | ||||||||
Distributions less than net income attributable to the Partnership | 0 | 0 | 0 | ||||||||
Net income attributable to the Partnership | 37 | 37 | 9 | ||||||||
General Partner | |||||||||||
Partners' Capital [Abstract] | |||||||||||
Distributions declared | 139 | 236 | 158 | ||||||||
Distributions less than net income attributable to the Partnership | 1 | 4 | 2 | ||||||||
Net income attributable to the Partnership | $ 140 | $ 240 | $ 160 |
Net Income Per Limited Partne_5
Net Income Per Limited Partner Unit (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 13, 2020 | Aug. 01, 2019 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Net Income per Limited Partner Unit [Line Items] | ||||||
General partner interest, percent | 2.00% | |||||
Cash Distribution | ||||||
Net Income per Limited Partner Unit [Line Items] | ||||||
Quarterly cash distribution paid, per limited partner unit (in usd per share) | $ 0.875 | |||||
Common Units | ||||||
Net Income per Limited Partner Unit [Line Items] | ||||||
Quarterly cash distribution declared, per limited partner unit (in usd per share) | $ 3.400 | $ 2.936 | $ 2.405 | |||
Common Units | Cash Distribution | ||||||
Net Income per Limited Partner Unit [Line Items] | ||||||
Quarterly cash distribution declared, per limited partner unit (in usd per share) | $ 0.875 | |||||
Distribution made to limited partner, cash distributions declared | $ 200 | |||||
Common Units | Cash Distribution | Subsequent Event | ||||||
Net Income per Limited Partner Unit [Line Items] | ||||||
Distribution made to limited partner, cash distributions paid | $ 200 |
Major Customer and Concentrat_2
Major Customer and Concentration of Credit Risk (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Phillips 66 | Customer Concentration Risk | Sales Revenue, Services, Net | |||
Concentration Risk [Line Items] | |||
Percentage of total transportation and terminaling services revenues | 97.00% | 96.00% | 95.00% |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | ||
Beginning balance January 1 | $ 185 | $ 185 |
Activity during the year | 0 | 0 |
Ending balance December 31 | $ 185 | $ 185 |
Properties, Plants and Equipm_3
Properties, Plants and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Gross PP&E | $ 4,408 | $ 3,995 |
Accumulated depreciation | (1,059) | (943) |
Net PP&E | 3,349 | 3,052 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Gross PP&E | 19 | 19 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Gross PP&E | $ 94 | 89 |
Buildings and improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 3 years | |
Buildings and improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 30 years | |
Pipelines and related assets | ||
Property, Plant and Equipment [Line Items] | ||
Gross PP&E | $ 1,424 | 1,398 |
Pipelines and related assets | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 10 years | |
Pipelines and related assets | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 45 years | |
Terminals and related assets | ||
Property, Plant and Equipment [Line Items] | ||
Gross PP&E | $ 741 | 710 |
Terminals and related assets | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 25 years | |
Terminals and related assets | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 45 years | |
Rail racks and related assets | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 33 years | |
Gross PP&E | $ 137 | 137 |
Processing and related assets | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 25 years | |
Gross PP&E | $ 1,041 | 842 |
Caverns and related assets | ||
Property, Plant and Equipment [Line Items] | ||
Gross PP&E | $ 585 | 584 |
Caverns and related assets | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 25 years | |
Caverns and related assets | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 45 years | |
Construction-in-progress | ||
Property, Plant and Equipment [Line Items] | ||
Gross PP&E | $ 367 | $ 216 |
Lease Assets and Liabilities (N
Lease Assets and Liabilities (Narrative) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
ROU asset | $ 44 | $ 45 |
Weighted average remaining lease term | 35 years | |
Weighted average discount rate | 5.90% |
Lease Assets and Liabilities (F
Lease Assets and Liabilities (Future Minimum Lease Payments) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
2020 | $ 3 | |
2021 | 3 | |
2022 | 3 | |
2023 | 3 | |
2024 | 3 | |
Remaining years | 90 | |
Future minimum lease payments | 105 | |
Total lease liabilities | (61) | |
Total lease liabilities | 44 | $ 45 |
Short-term lease liabilities | (1) | |
Long-term lease liabilities | $ 43 |
Debt (Summary of Long-Term Debt
Debt (Summary of Long-Term Debt) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Oct. 15, 2019 | Sep. 13, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||
Debt at face value | $ 3,550 | $ 3,075 | ||
Net unamortized discounts and debt issuance costs | (34) | (27) | ||
Total debt | 3,516 | 3,048 | ||
Short-term debt | (25) | (50) | ||
Long-term debt | 3,491 | 2,998 | ||
Tax-exempt bonds due April 2020 and April 2021, at 1.850% and 1.885% at December 31, 2019, and 2018, respectively | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 75 | $ 75 | ||
Interest rate, stated percentage | 1.85% | 1.885% | ||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Short-term debt | $ (400) | |||
Senior Notes | 2.646% Senior Notes due February 2020 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 0 | $ 300 | ||
Interest rate, stated percentage | 2.646% | 2.646% | ||
Senior Notes | 2.450% Senior Notes due December 2024 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 300 | 0 | ||
Interest rate, stated percentage | 2.45% | |||
Senior Notes | 3.605% Senior Notes due February 2025 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 500 | 500 | ||
Interest rate, stated percentage | 3.605% | |||
Senior Notes | 3.550% Senior Notes due October 2026 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 500 | 500 | ||
Interest rate, stated percentage | 3.55% | |||
Senior Notes | 3.750% Senior Notes due March 2028 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 500 | 500 | ||
Interest rate, stated percentage | 3.75% | |||
Senior Notes | 3.150% Senior Notes due December 2029 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 600 | 0 | ||
Interest rate, stated percentage | 3.15% | |||
Senior Notes | 4.680% Senior Notes due February 2045 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 450 | 450 | ||
Interest rate, stated percentage | 4.68% | |||
Senior Notes | 4.900% Senior Notes due October 2046 | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | $ 625 | 625 | ||
Interest rate, stated percentage | 4.90% | |||
Revolving credit facility due January 2019 and October 2021 at weighted-average rate of 3.669% at year-end 2018 | ||||
Debt Instrument [Line Items] | ||||
Credit facility | $ 0 | $ 125 | ||
Weighted average interest rate | 3.669% |
Debt (Narrative) (Details)
Debt (Narrative) (Details) | Sep. 06, 2019USD ($) | Oct. 31, 2017USD ($) | May 31, 2017USD ($) | Dec. 31, 2019USD ($)agreement | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Oct. 15, 2019 | Sep. 13, 2019USD ($) | Jul. 30, 2019USD ($) |
Debt Instrument [Line Items] | |||||||||
Repayments of principal, 2020 | $ 25,000,000 | ||||||||
Repayments of principal, 2021 | 50,000,000 | ||||||||
Repayments of principal, 2022 | 297,000,000 | ||||||||
Debt at face value | 475,000,000 | ||||||||
Short-term debt | 25,000,000 | $ 50,000,000 | |||||||
Credit Agreement | |||||||||
Letters of credit outstanding | 1,000,000 | ||||||||
Repayments of debt | $ 1,286,000,000 | 575,000,000 | $ 2,152,000,000 | ||||||
Revolving credit facility due January 2019 and October 2021 at weighted-average rate of 3.669% at year-end 2018 | |||||||||
Credit Agreement | |||||||||
Number or renewals available to extend the term of the credit agreement | agreement | 2 | ||||||||
Note payable term, in years | 1 year | ||||||||
Revolving credit facility | $ 0 | 125,000,000 | |||||||
Credit facility | $ 0 | $ 125,000,000 | |||||||
Debt to EBITDA, ratio | 5 | ||||||||
Debt to EBITDA, acquisitions, ratio | 5.5 | ||||||||
Credit Agreement | Revolving credit facility due January 2019 and October 2021 at weighted-average rate of 3.669% at year-end 2018 | |||||||||
Credit Agreement | |||||||||
Revolving credit agreement borrowing capacity | $ 750,000,000 | ||||||||
Maximum borrowing capacity under option | 1,000,000,000 | ||||||||
3.750% Senior Notes Due March 1, 2028 | |||||||||
Debt Instrument [Line Items] | |||||||||
Senior notes | $ 500,000,000 | ||||||||
Interest rate, stated percentage | 3.75% | ||||||||
4.680% Senior Notes Due February 15, 2045 | |||||||||
Debt Instrument [Line Items] | |||||||||
Senior notes | $ 150,000,000 | ||||||||
Interest rate, stated percentage | 4.68% | ||||||||
Tax-exempt bonds due April 2020 and April 2021, at 1.850% and 1.885% at December 31, 2019, and 2018, respectively | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate, stated percentage | 1.85% | 1.885% | |||||||
Credit Agreement | |||||||||
Long-term debt, gross | $ 75,000,000 | $ 75,000,000 | |||||||
Line of Credit | Revolving credit facility due January 2019 and October 2021 at weighted-average rate of 3.669% at year-end 2018 | |||||||||
Credit Agreement | |||||||||
Repayments of debt | 125,000,000 | ||||||||
Line of Credit | Term Loan Facility Due March 20, 2020 | |||||||||
Credit Agreement | |||||||||
Revolving credit agreement borrowing capacity | $ 400,000,000 | ||||||||
Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Senior notes | $ 900,000,000 | $ 650,000,000 | $ 900,000,000 | ||||||
Short-term debt | $ 400,000,000 | ||||||||
Proceeds from debt, net of issuance costs | 892,000,000 | $ 643,000,000 | |||||||
Senior Notes | 2.646% Senior Notes due February 2020 | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate, stated percentage | 2.646% | 2.646% | |||||||
Credit Agreement | |||||||||
Long-term debt, gross | $ 0 | 300,000,000 | |||||||
Repayments of debt | 300,000,000 | ||||||||
Senior Notes | 2.450% Senior Notes Due December 15, 2024 | |||||||||
Debt Instrument [Line Items] | |||||||||
Senior notes | $ 300,000,000 | ||||||||
Interest rate, stated percentage | 2.45% | ||||||||
Senior Notes | 3.150% Senior Notes Due December 15, 2029 | |||||||||
Debt Instrument [Line Items] | |||||||||
Senior notes | $ 600,000,000 | ||||||||
Interest rate, stated percentage | 3.15% | ||||||||
Notes Payable | |||||||||
Credit Agreement | |||||||||
Repayments of debt | $ 136,000,000 | ||||||||
Fair Value, Inputs, Level 2 | Municipal Bonds And Line Of Credits | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt, fair value | 75,000,000 | 200,000,000 | |||||||
Fair Value, Inputs, Level 2 | Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt, fair value | 3,650,000,000 | 2,660,000,000 | |||||||
Bakken Pipeline and MSLP Acquisition | Tax-exempt bonds due April 2020 and April 2021, at 1.850% and 1.885% at December 31, 2019, and 2018, respectively | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayments of principal, 2020 | 25,000,000 | ||||||||
Repayments of principal, 2021 | 50,000,000 | ||||||||
Credit Agreement | |||||||||
Long-term debt, gross | $ 25,000,000 | ||||||||
Repayments of long-term debt | $ 25,000,000 |
Assets Retirement Obligations_3
Assets Retirement Obligations and Accrued Environmental Costs (Summary of Asset Retirement Obligations and Accrued Environmental Costs) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Asset Retirement Obligations and Accrued Environmental Costs [Abstract] | |||
Asset retirement obligations | $ 11 | $ 11 | $ 10 |
Accrued environmental costs | 3 | 2 | |
Total asset retirement obligations and accrued environmental costs | 14 | 13 | |
Asset retirement obligations and accrued environmental costs due within one year | (1) | (1) | |
Long-term asset retirement obligations and accrued environmental costs | $ 13 | $ 12 |
Assets Retirement Obligations_4
Assets Retirement Obligations and Accrued Environmental Costs (Schedule of Change in Asset Retirement Obligation) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||
Balance at January 1 | $ 11 | $ 10 |
Accretion of discount | 0 | 1 |
New obligations | 0 | 0 |
Changes in estimates of existing obligations | 0 | 0 |
Balance at December 31 | $ 11 | $ 11 |
Equity (Details)
Equity (Details) $ / shares in Units, $ in Millions | Aug. 01, 2019USD ($)shares | Oct. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2017$ / shares | Dec. 31, 2019USD ($)offeringshares | Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($)shares | Dec. 31, 2019USD ($)offeringshares |
Limited Partners' Capital Account [Line Items] | |||||||
Number of common units issued in public offering (in shares) | shares | 3,195,521 | 2,532,096 | 3,372,716 | ||||
General partner interest, percent | 2.00% | ||||||
Units issued in preferred offering (in shares) | shares | 20,123,995 | ||||||
Issuance of preferred units | $ 0 | $ 0 | $ 737 | ||||
Common Units | |||||||
Limited Partners' Capital Account [Line Items] | |||||||
Shares, issued (in shares) | shares | 101,000,000 | ||||||
General partners equity balance | $ 1,400 | ||||||
Units issued in preferred offering (in shares) | shares | 6,304,204 | ||||||
Price per common limited partner unit (in usd per share) | $ / shares | $ 47.59 | ||||||
Partners' capital account, private sale of units net of offering costs | $ 295 | ||||||
Preferred Unitholders Public | |||||||
Limited Partners' Capital Account [Line Items] | |||||||
Units issued in preferred offering (in shares) | shares | 13,819,791 | ||||||
Price per common limited partner unit (in usd per share) | $ / shares | $ 54.27 | ||||||
Issuance of preferred units | $ 737 | ||||||
Cumulative distribution, quarterly for three years (in usd per share) | $ / shares | $ 0.678375 | ||||||
Average of the volume-weighted trading price, threshold (in usd per share) | $ / shares | $ 73.2645 | ||||||
Preferred units, convertible, threshold consecutive trading days | 20 days | ||||||
Convertible threshold average trading volume common units (in shares) | shares | 100,000 | ||||||
At The Market Offering Program | |||||||
Limited Partners' Capital Account [Line Items] | |||||||
Total authorized amount | $ 750 | ||||||
At The Market Offering Program | Common Units | |||||||
Limited Partners' Capital Account [Line Items] | |||||||
Number of continuous offerings | offering | 3 | 3 | |||||
Equity offering program, authorized amount, per program | $ 250 | $ 250 | |||||
Number of common units issued in public offering (in shares) | shares | 3,195,521 | 2,532,096 | 3,372,716 | 9,446,485 | |||
Issuance of common units | $ 173 | $ 128 | $ 173 | $ 492 | |||
Brokers commissions | 5 | ||||||
Other costs | $ 3 |
Related Party Transactions (Sum
Related Party Transactions (Summary of Related Party Charges) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |||
Operating and maintenance expenses | $ 258 | $ 214 | $ 189 |
General and administrative expenses | 65 | 60 | 64 |
Total | $ 323 | $ 274 | $ 253 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | 27 Months Ended | ||
Dec. 31, 2019 | Oct. 06, 2017 | Dec. 31, 2019 | Jun. 30, 2019 | |
Gray Oak Pipeline, LLC (Gray Oak) | ||||
Related Party Transaction [Line Items] | ||||
Effective ownership interest (as a percent) | 42.25% | 42.25% | 42.25% | |
Phillips 66 | Amended Omnibus Agreement | Phillips 66 | ||||
Related Party Transaction [Line Items] | ||||
Administrative fees expense by month | $ 8 | $ 7 | $ 8 |
Related Party Transactions (Oth
Related Party Transactions (Other Related Party Balances) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Related Party Transaction [Line Items] | ||
Prepaid expenses and other current assets | $ 10 | $ 20 |
Other assets | 52 | 5 |
Deferred revenues | 16 | 60 |
Other current liabilities | 3 | 5 |
Other liabilities | 94 | 42 |
Phillips 66 | ||
Related Party Transaction [Line Items] | ||
Prepaid expenses and other current assets | 7 | 4 |
Other assets | 44 | 0 |
Deferred revenues | 16 | 60 |
Other current liabilities | 1 | 0 |
Other liabilities | $ 70 | $ 18 |
Unit-Based Compensation (Detail
Unit-Based Compensation (Details) | 12 Months Ended | |||
Dec. 31, 2019directorshares | Dec. 31, 2018shares | Dec. 31, 2017shares | Dec. 31, 2013shares | |
Phantom Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of non-employee directors | director | 3 | |||
Phillips 66 Partners LP 2013 Incentive Compensation Plan | Phantom Units | Non Employee Directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of phantom units granted (in shares) | 4,950 | 4,326 | 4,794 | |
Phillips 66 Partners LP 2013 Incentive Compensation Plan | Common Units | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of common units that may be delivered under the ICP Plan (in shares) | 2,500,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Deferred tax liability | $ 9,000,000 | $ 7,000,000 | |
Effective tax rate, percentage (less than) | 1.00% | 1.00% | 1.00% |
Unrecognized tax benefits | $ 0 | $ 0 | |
Income tax penalties and interest expense | $ 0 | $ 0 | $ 0 |
Cash Flow Information (Narrativ
Cash Flow Information (Narrative) (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | ||||
Restricted cash and cash equivalents | $ 0 | |||
Limited Partner | Phillips 66 | Bakken Pipeline/MSLP, Eagle and Sand Hills/Southern Hills/Explorer Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Value assigned to common and general partner units issued | $ 0 | |||
General Partner | ||||
Business Acquisition [Line Items] | ||||
Distributions to General Partner associated with acquisitions | 0 | $ 0 | $ 234,000,000 | |
General Partner | Phillips 66 | Bakken Pipeline/MSLP, Eagle and Sand Hills/Southern Hills/Explorer Acquisitions | ||||
Business Acquisition [Line Items] | ||||
Value assigned to common and general partner units issued | $ 0 | |||
Common Control Transaction | Phillips 66 | Phillips 66 | Bakken Pipeline and MSLP Acquisition | ||||
Business Acquisition [Line Items] | ||||
Assets acquired | 729,000,000 | |||
Cash consideration | 963,000,000 | |||
Business acquisitions | 729,000,000 | |||
Debt financing balance | 447,000,000 | |||
Common Control Transaction | Phillips 66 | General Partner | Phillips 66 | Bakken Pipeline and MSLP Acquisition | ||||
Business Acquisition [Line Items] | ||||
Distributions to General Partner associated with acquisitions | $ 234,000,000 |
Cash Flow Information (Summary
Cash Flow Information (Summary of Cash Flow Information) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Capital Expenditures and Investments | |||
Cash capital expenditures and investments | $ 1,095 | $ 738 | $ 431 |
Change in capital expenditure accruals | (13) | 38 | 3 |
Total capital expenditures and investments | 1,082 | 776 | 434 |
Capital expenditures attributable to Predecessors | 82 | ||
Other Noncash Investing and Financing Activities | |||
Dividend of loan receivable to Phillips 66 by Predecessor | 0 | 0 | 51 |
Cash Payments | |||
Interest and debt expense | $ 100 | $ 109 | $ 96 |
Other Financial Information (De
Other Financial Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Interest and Debt Expense | |||
Incurred, Debt | $ 133 | $ 119 | $ 100 |
Incurred, Other | 3 | 3 | 2 |
Incurred, Total | 136 | 122 | 102 |
Interest Costs Capitalized Adjustment | (28) | (7) | (1) |
Expensed | 108 | 115 | 101 |
Other Income | |||
Co-venturer contractual make-whole payments | 0 | 0 | 7 |
Interest income | 3 | 1 | 3 |
Other | 3 | 1 | 2 |
Total other income | $ 6 | $ 2 | $ 12 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Selected Quarterly Financial Information [Abstract] | |||||||||||
Total Revenues and Other Income | $ 432 | $ 411 | $ 401 | $ 423 | $ 393 | $ 384 | $ 354 | $ 355 | $ 1,667 | $ 1,486 | $ 1,169 |
Income Before Income Taxes | 255 | 238 | 234 | 199 | 223 | 217 | 186 | 174 | 926 | 800 | 528 |
Net Income Attributable to the Partnership | 255 | 237 | 233 | 198 | 221 | 217 | 186 | 172 | 923 | 796 | 461 |
Limited Partners’ Interest in Net Income Attributable to the Partnership | $ 246 | $ 228 | $ 153 | $ 119 | $ 144 | $ 144 | $ 121 | $ 110 | $ 746 | $ 519 | $ 292 |
Net Income Attributable to the Partnership Per Common Unit—Basic (in usd per share) | $ 1.08 | $ 1.18 | $ 1.23 | $ 0.96 | $ 1.16 | $ 1.17 | $ 0.99 | $ 0.91 | |||
Net Income Attributable to the Partnership Per Common Unit—diluted (in usd per share) | $ 1.06 | $ 1.15 | $ 1.15 | $ 0.92 | $ 1.09 | $ 1.10 | $ 0.94 | $ 0.87 |
Uncategorized Items - mlp-20191
Label | Element | Value |
General Partner [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 1,000,000 |
Common Units [Member] | Non-public Designator [Member] | Majority Shareholder [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 16,000,000 |
Common Units [Member] | Public Designator [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (1,000,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 13,000,000 |