Cover Page
Cover Page | 6 Months Ended |
Jun. 30, 2020shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Jun. 30, 2020 |
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 Partner Interests |
Trading Symbol | PSXP |
Security Exchange Name | NYSE |
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 Common Stock, Shares Outstanding | 228,340,146 |
Entity Central Index Key | 0001572910 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q2 |
Amendment Flag | false |
Consolidated Statement of Incom
Consolidated Statement of Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues and Other Income | ||||
Operating revenues | $ 241 | $ 263 | $ 508 | $ 565 |
Equity in earnings of affiliates | 104 | 137 | 240 | 256 |
Gain from equity interest transfer | 84 | 0 | 84 | 0 |
Other income | 1 | 1 | 2 | 3 |
Total revenues and other income | 430 | 401 | 834 | 824 |
Costs and Expenses | ||||
Operating and maintenance expenses | 84 | 85 | 172 | 224 |
Depreciation | 31 | 29 | 61 | 58 |
General and administrative expenses | 17 | 17 | 34 | 35 |
Taxes other than income taxes | 10 | 9 | 21 | 20 |
Interest and debt expense | 28 | 27 | 57 | 54 |
Other expenses | 5 | 0 | 7 | 0 |
Total costs and expenses | 175 | 167 | 352 | 391 |
Income before income taxes | 255 | 234 | 482 | 433 |
Income tax expense | 0 | 1 | 1 | 2 |
Net income | 255 | 233 | 481 | 431 |
Less: Preferred unitholders’ interest in net income | 9 | 9 | 19 | 19 |
Less: General partner’s interest in net income | 0 | 71 | 0 | 140 |
Limited partners’ interest in net income | $ 246 | $ 153 | $ 462 | $ 272 |
Common Units | ||||
Net Income Per Limited Partner Unit (dollars) | ||||
Common units - basic (in dollars per share) | $ 1.07 | $ 1.23 | $ 2.02 | $ 2.19 |
Common units - diluted (in dollars per share) | $ 1.05 | $ 1.15 | $ 1.99 | $ 2.07 |
Weighted-Average Limited Partner Units Outstanding (thousands) | ||||
Common units—basic (in shares) | 228,340,146 | 124,824,010 | 228,326,203 | 124,542,536 |
Common units—diluted (in shares) | 242,160,000 | 138,644,000 | 242,146,000 | 138,362,000 |
Third Party | ||||
Revenues and Other Income | ||||
Operating revenues | $ 5 | $ 7 | $ 14 | $ 13 |
Related Party | ||||
Revenues and Other Income | ||||
Operating revenues | $ 236 | $ 256 | $ 494 | $ 552 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 255 | $ 233 | $ 481 | $ 431 |
Defined benefit plans | ||||
Plan sponsored by equity affiliates, net of income taxes | 0 | 0 | 0 | 0 |
Other comprehensive income | 0 | 0 | 0 | 0 |
Comprehensive Income | $ 255 | $ 233 | $ 481 | $ 431 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 7 | $ 286 |
Accounts receivable—related parties | 93 | 101 |
Accounts receivable—third parties | 4 | 4 |
Materials and supplies | 14 | 13 |
Prepaid expenses and other current assets | 10 | 10 |
Total current assets | 128 | 414 |
Equity investments | 3,340 | 2,961 |
Net properties, plants and equipment | 3,500 | 3,349 |
Goodwill | 185 | 185 |
Other assets | 50 | 52 |
Total Assets | 7,203 | 6,961 |
Liabilities | ||
Accounts payable—related parties | 18 | 19 |
Accounts payable—third parties | 88 | 84 |
Accrued interest | 34 | 42 |
Deferred revenues | 24 | 16 |
Short-term debt | 265 | 25 |
Accrued property and other taxes | 22 | 10 |
Other current liabilities | 4 | 3 |
Total current liabilities | 455 | 199 |
Long-term debt | 3,442 | 3,491 |
Obligation from equity interest transfer | 0 | 343 |
Other liabilities | 93 | 94 |
Total Liabilities | 3,990 | 4,127 |
Equity | ||
Accumulated other comprehensive loss | (1) | (1) |
Total unitholders’ equity | 2,908 | 2,834 |
Noncontrolling interest | 305 | 0 |
Total Equity | 3,213 | 2,834 |
Total Liabilities and Equity | 7,203 | 6,961 |
Public | Preferred Units | ||
Equity | ||
Preferred unitholders (2020 and 2019—13,819,791 units issued and outstanding) | 746 | 746 |
Total Equity | 746 | 746 |
Public | Common Units | ||
Equity | ||
Common unitholders | 2,735 | 2,717 |
Total Equity | 2,735 | 2,717 |
Non-public | Common Units | Phillips 66 | ||
Equity | ||
Common unitholders | (572) | (628) |
Total Equity | $ (572) | $ (628) |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - shares | Jun. 30, 2020 | Dec. 31, 2019 |
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 | ||
Units issued (in shares) | 58,580,009 | 58,539,439 |
Units outstanding (in shares) | 58,580,009 | 58,539,439 |
Common Units | Non-public | Phillips 66 | ||
Units issued (in shares) | 169,760,137 | 169,760,137 |
Units outstanding (in shares) | 169,760,137 | 169,760,137 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash Flows From Operating Activities | ||
Net income | $ 481 | $ 431 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation | 61 | 58 |
Undistributed equity earnings | 9 | 3 |
Gain from equity interest transfer | (84) | 0 |
Other | 7 | 12 |
Working capital adjustments | ||
Accounts receivable | 8 | 6 |
Prepaid expenses and other current assets | 0 | 12 |
Accounts payable | (7) | (3) |
Accrued interest | (7) | 0 |
Deferred revenues | 8 | (46) |
Other accruals | 13 | 8 |
Net Cash Provided by Operating Activities | 489 | 481 |
Cash Flows From Investing Activities | ||
Cash capital expenditures and investments | (601) | (759) |
Advances/loans—related party | 0 | (95) |
Collection of advances/loans—related party | 0 | 95 |
Liberty acquisition | (75) | 0 |
Return of investment from equity affiliates | 86 | 35 |
Proceeds from sale of equity interest | 0 | 81 |
Net Cash Used in Investing Activities | (590) | (643) |
Cash Flows From Financing Activities | ||
Net proceeds from equity interest transfer | 40 | 341 |
Issuance of debt | 215 | 860 |
Repayment of debt | (25) | (585) |
Issuance of common units | 2 | 42 |
Other distributions from (to) Phillips 66 | 8 | (3) |
Net Cash Provided by (Used in) Financing Activities | (178) | 291 |
Net Change in Cash and Cash Equivalents | (279) | 129 |
Cash and cash equivalents at beginning of period | 286 | 1 |
Cash and Cash Equivalents at End of Period | 7 | 130 |
Preferred Units | ||
Cash Flows From Financing Activities | ||
Quarterly distributions to unitholders | (19) | (19) |
Public | Common Units | ||
Cash Flows From Financing Activities | ||
Quarterly distributions to unitholders | (102) | (93) |
General Partner | ||
Cash Flows From Financing Activities | ||
Quarterly distributions to unitholders | 0 | (136) |
Phillips 66 | Non-public | Common Units | ||
Cash Flows From Financing Activities | ||
Quarterly distributions to unitholders | $ (297) | $ (116) |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity - USD ($) $ in Millions | Total | Noncontrolling Interest | Cumulative Effect, Period of Adoption, Adjustment | Accum. Other Comprehensive Loss | General Partner | Preferred UnitsPublic | Common UnitsPublic | Common UnitsPublicCumulative Effect, Period of Adoption, Adjustment | Common UnitsNon-publicPhillips 66 |
Beginning Balance at Dec. 31, 2018 | $ 2,509 | $ 0 | $ (1) | $ (1) | $ (1,313) | $ 746 | $ 2,485 | $ (1) | $ 592 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common units | 42 | 42 | |||||||
Net income | 431 | 140 | 19 | 122 | 150 | ||||
Quarterly cash distributions to unitholders and General Partner | (364) | (136) | (19) | (93) | (116) | ||||
Other contributions from Phillips 66 | (1) | (1) | |||||||
Ending Balance at Jun. 30, 2019 | $ 2,616 | 0 | (1) | $ (1,310) | $ 746 | $ 2,555 | $ 626 | ||
Beginning balance, Units (in shares) at Dec. 31, 2018 | 140,403,897 | 2,480,051 | 13,819,791 | 55,343,918 | 68,760,137 | ||||
Units Outstanding [Roll Forward] | |||||||||
Units issued in public equity offerings (in shares) | 834,368 | 834,368 | |||||||
Ending balance, Units (in shares) at Jun. 30, 2019 | 141,238,265 | 2,480,051 | 13,819,791 | 56,178,286 | 68,760,137 | ||||
Beginning Balance at Mar. 31, 2019 | $ 2,554 | 0 | (1) | $ (1,315) | $ 747 | $ 2,523 | $ 600 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common units | 10 | 10 | |||||||
Net income | 233 | 71 | 9 | 69 | 84 | ||||
Quarterly cash distributions to unitholders and General Partner | (184) | (69) | (10) | (47) | (58) | ||||
Other contributions from Phillips 66 | 3 | 3 | |||||||
Ending Balance at Jun. 30, 2019 | $ 2,616 | 0 | (1) | $ (1,310) | $ 746 | $ 2,555 | $ 626 | ||
Beginning balance, Units (in shares) at Mar. 31, 2019 | 141,025,929 | 2,480,051 | 13,819,791 | 55,965,950 | 68,760,137 | ||||
Units Outstanding [Roll Forward] | |||||||||
Units issued in public equity offerings (in shares) | 212,336 | 212,336 | |||||||
Ending balance, Units (in shares) at Jun. 30, 2019 | 141,238,265 | 2,480,051 | 13,819,791 | 56,178,286 | 68,760,137 | ||||
Beginning Balance at Dec. 31, 2019 | $ 2,834 | 0 | (1) | $ 0 | $ 746 | $ 2,717 | $ (628) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common units | 2 | 2 | |||||||
Net income | 481 | 19 | 118 | 344 | |||||
Quarterly cash distributions to unitholders and General Partner | (418) | (19) | (102) | (297) | |||||
Transfer of equity interest | 305 | 305 | |||||||
Other contributions from Phillips 66 | 9 | 9 | |||||||
Ending Balance at Jun. 30, 2020 | $ 3,213 | 305 | (1) | $ 0 | $ 746 | $ 2,735 | $ (572) | ||
Beginning balance, Units (in shares) at Dec. 31, 2019 | 242,119,367 | 0 | 13,819,791 | 58,539,439 | 169,760,137 | ||||
Units Outstanding [Roll Forward] | |||||||||
Units issued in public equity offerings (in shares) | 40,570 | 40,570 | |||||||
Ending balance, Units (in shares) at Jun. 30, 2020 | 242,159,937 | 0 | 13,819,791 | 58,580,009 | 169,760,137 | ||||
Beginning Balance at Mar. 31, 2020 | $ 2,853 | 0 | (1) | $ 0 | $ 747 | $ 2,723 | $ (616) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income | 255 | 9 | 63 | 183 | |||||
Quarterly cash distributions to unitholders and General Partner | (209) | 0 | (10) | (51) | (148) | ||||
Transfer of equity interest | 305 | 305 | |||||||
Ending Balance at Jun. 30, 2020 | $ 3,213 | $ 305 | $ (1) | $ 0 | $ 746 | $ 2,735 | $ (572) | ||
Beginning balance, Units (in shares) at Mar. 31, 2020 | 242,159,937 | 0 | 13,819,791 | 58,580,009 | 169,760,137 | ||||
Units Outstanding [Roll Forward] | |||||||||
Units issued in public equity offerings (in shares) | 0 | 0 | |||||||
Ending balance, Units (in shares) at Jun. 30, 2020 | 242,159,937 | 0 | 13,819,791 | 58,580,009 | 169,760,137 |
Consolidated Statement of Cha_2
Consolidated Statement of Changes in Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash distributions per common unit (in dollars per share) | $ 0.875 | $ 0.845 | $ 0.875 | $ 1.680 |
Description of the Business
Description of the Business | 6 Months Ended |
Jun. 30, 2020 | |
Description of Business [Abstract] | |
Description of the Business | Note 1—Description of the Business 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. 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 those commodities, 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. |
Interim Financial Information
Interim Financial Information | 6 Months Ended |
Jun. 30, 2020 | |
Interim Financial Information [Abstract] | |
Interim Financial Information | Note 2—Interim Financial Information |
Operating Revenues
Operating Revenues | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Operating Revenues | Note 3—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 Three Months Ended Six Months Ended 2020 2019 2020 2019 Pipelines $ 97 117 208 226 Terminals 33 39 76 79 Storage, processing and other revenues 111 107 224 260 Total operating revenues $ 241 263 508 565 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. We have elected to account for lease and service elements of contracts classified as leases on a combined basis, except for leases of processing-type assets, which contain non-ratable fees related to turnaround activity. For these types of leases, we continue to separate the lease and service elements based on relative standalone prices and apply the lease standard to the lease element and the revenue standard to the service element. Total operating revenues disaggregated by lease and service revenues were as follows: Millions of Dollars Three Months Ended Six Months Ended 2020 2019 2020 2019 Lease revenues $ 195 214 413 471 Service revenues 46 49 95 94 Total operating revenues $ 241 263 508 565 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 June 30 December 31 Lease receivables $ 76 87 Service receivables 21 18 Total accounts receivable $ 97 105 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 June 30 December 31 Deferred lease revenues $ 44 41 Deferred service revenues 3 1 Total deferred revenues $ 47 42 Future Minimum Lease Payments from Customers At June 30, 2020, future minimum payments to be received under our lease agreements with customers were estimated to be: Millions Remainder of 2020 $ 354 2021 702 2022 690 2023 646 2024 525 Remaining years 1,389 Total future minimum lease payments from customers $ 4,306 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 June 30, 2020, 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 Remainder of 2020 $ 80 2021 152 2022 152 2023 152 2024 132 Remaining years 756 Total future service revenues $ 1,424 |
Equity Investments
Equity Investments | 6 Months Ended |
Jun. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Investments | Note 4—Equity Investments The following table summarizes the carrying value of our equity investments: Millions of Dollars Percentage Ownership June 30 December 31 Dakota Access, LLC and Energy Transfer Crude Oil Company, LLC (Bakken Pipeline) 25.00 % $ 588 592 Bayou Bridge Pipeline, LLC (Bayou Bridge) 40.00 293 294 DCP Sand Hills Pipeline, LLC (Sand Hills) 33.34 595 595 DCP Southern Hills Pipeline, LLC (Southern Hills) 33.34 218 215 Explorer Pipeline Company (Explorer) 21.94 100 105 Gray Oak Pipeline, LLC 65.00 896 759 Liberty Pipeline LLC (Liberty) 50.00 202 — Paradigm Pipeline LLC (Paradigm) 50.00 142 143 Phillips 66 Partners Terminal LLC (Phillips 66 Partners Terminal) 70.00 66 70 South Texas Gateway Terminal LLC (South Texas Gateway Terminal) 25.00 129 74 STACK Pipeline LLC (STACK) 50.00 111 114 Total equity investments $ 3,340 2,961 Earnings from our equity investments were as follows: Millions of Dollars Three Months Ended Six Months Ended 2020 2019 2020 2019 Bakken Pipeline $ 30 58 87 109 Bayou Bridge 7 8 17 12 Sand Hills 37 38 78 74 Southern Hills 10 11 21 24 Explorer 4 11 11 14 Gray Oak Pipeline, LLC 14 — 19 — Liberty — — — — Paradigm 2 3 6 6 Phillips 66 Partners Terminal (1) 6 (1) 12 South Texas Gateway Terminal — — — — STACK 1 2 2 5 Total equity in earnings of affiliates $ 104 137 240 256 Dakota Access, LLC (Dakota Access) and Energy Transfer Crude Oil Company, LLC (ETCO) In March 2019, a wholly owned subsidiary of Dakota Access closed an offering of $2.5 billion aggregate principal amount of unsecured senior notes, consisting of: • $650 million aggregate principal amount of 3.625% Senior Notes due 2022. • $1.0 billion aggregate principal amount of 3.900% Senior Notes due 2024. • $850 million aggregate principal amount of 4.625% Senior Notes due 2029. Dakota Access and ETCO have guaranteed repayment of the notes. In addition, we and our co-venturers in Dakota Access provided a Contingent Equity Contribution Undertaking (CECU) in conjunction with the notes offering. Under the CECU, the co-venturers may be severally required to make proportionate equity contributions to Dakota Access if there is an unfavorable final judgment in the ongoing litigation related to an easement granted by the U.S. Army Corps of Engineers (USACE) to allow the pipeline to be constructed under Lake Oahe in North Dakota. Contributions may be required if Dakota Access determines that the issues included in any such final judgment cannot be remediated and Dakota Access has or is projected to have insufficient funds to satisfy repayment of the notes. If Dakota Access undertakes remediation to cure issues raised in a final judgment, contributions may be required if any series of the notes become due, whether by acceleration or at maturity, during such time, to the extent Dakota Access has or is projected to have insufficient funds to pay such amounts. At June 30, 2020, our share of the maximum potential equity contributions under the CECU was approximately $631 million. In March 2020, the court presiding over this litigation ordered the USACE to prepare an Environmental Impact Statement (EIS), and requested additional information to enable a decision on whether the Dakota Access Pipeline should be shut down while the EIS is being prepared. On July 6, 2020, the court ordered the Dakota Access Pipeline to be shut down and emptied of crude oil by August 5, 2020, and that the pipeline should remain shut down pending the preparation of the EIS by the USACE, which the USACE has indicated is expected to take approximately 13 months. Dakota Access filed an appeal and a request for a stay of the order. On July 14, 2020, an appeals court granted a temporary stay of the lower court’s order directing the pipeline to be shut down and emptied of crude oil. The appeals court has not yet ruled on the motion for a stay during the appeals process. In addition to the potential obligations under the CECU, if the pipeline is required to cease operations pending the preparation of the EIS, and should Dakota Access and ETCO not have sufficient funds to pay ongoing expenses, we also could be asked to support our share of the ongoing expenses, including scheduled interest payments on the notes of approximately $25 million annually. Summarized financial information for 100% of Dakota Access is as follows: Millions of Dollars Three Months Ended Six Months Ended 2020 2019 2020 2019 Revenues $ 169 254 427 490 Income before income taxes 94 181 280 338 Net income 94 181 280 338 Gray Oak Pipeline, LLC Gray Oak Pipeline, LLC was formed to develop and construct the Gray Oak Pipeline, which transports crude oil from the Permian and Eagle Ford to Texas Gulf Coast destinations that include Corpus Christi and the Sweeny area, including the Phillips 66 Sweeny Refinery, as well as access to the Houston market. We have a consolidated holding company that owns 65% of Gray Oak Pipeline, LLC. I n December 2018, a third party exercised its option to acquire a 35% interest in the holding company. Because the holding company’s sole asset was its ownership interest in Gray Oak Pipeline, LLC, which was considered a financial asset, and because certain restrictions were placed on the third party’s ability to transfer or sell its interest in the holding company during the construction of the Gray Oak Pipeline, the legal sale of the 35% interest did not qualify as a sale under GAAP at that time. The Gray Oak Pipeline commenced full operations in the second quarter of 2020 and the restrictions placed on the co-venturer were lifted on June 30, 2020, resulting in the recognition of the sale under GAAP. Accordingly, at June 30, 2020, the co-venturer’s 35% interest in the holding company was recharacterized from a long-term obligation to a noncontrolling interest on our consolidated balance sheet. In addition, the premium of $84 million previously paid by the co-venturer in 2019 was recharacterized from a long-term obligation to a gain in our consolidated statement of income for the three and six months ended June 30, 2020. For the six months ended June 30, 2020, the co-venturer contributed an aggregate of $61 million to the holding company to fund its portion of Gray Oak Pipeline, LLC’s cash calls. Excluding the co-venturer’s 35% interest in the consolidated holding company, we have an effective ownership interest of 42.25% in Gray Oak Pipeline, LLC. Gray Oak Pipeline, LLC has a third-party term loan facility with a borrowing capacity of $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, plus any additional accrued interest and associated fees, if Gray Oak Pipeline, LLC defaults on certain of its obligations thereunder. At June 30, 2020, the term loan facility was fully utilized by Gray Oak Pipeline, LLC and our 42.25% proportionate exposure under the equity contribution agreement was $583 million. During its development phase, Gray Oak Pipeline, LLC was considered a variable interest entity (VIE) because it did not have sufficient equity at risk to fully fund the construction of all assets required for principal operations. We determined we were not the primary beneficiary because we and our co-venturers jointly directed the activities of Gray Oak Pipeline, LLC that most significantly impact economic performance. The Gray Oak Pipeline commenced full operations in the second quarter of 2020 and ceased being a VIE. Liberty 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 $75 million. The purchase price reflected the reimbursement of project costs incurred by Phillips 66 prior to the effective date of the transaction. The transaction was funded through a combination of cash on hand and our revolving credit facility and closed on March 2, 2020. Liberty was formed to develop and construct the Liberty Pipeline system which, upon completion, will transport crude oil from the Rockies and Bakken production areas to Cushing, Oklahoma. On March 24, 2020, we and our co-venturer announced we are deferring the development and construction of the Liberty Pipeline system as a result of the current challenging business environment. Liberty 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-venturer jointly direct the activities of Liberty that most significantly impact economic performance. At June 30, 2020, our maximum exposure to loss was $202 million, which represented the aggregate book value of our equity investment in Liberty. At June 30, 2020, Phillips 66 had an outstanding guarantee of $49 million to vendors for our proportionate share of the payment of certain purchase obligations of Liberty. |
Net Income Per Limited Partner
Net Income Per Limited Partner Unit | 6 Months Ended |
Jun. 30, 2020 | |
Partners' Capital Notes [Abstract] | |
Net Income Per Limited Partner Unit | Note 5—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 per unit applicable to the limited partners. The classes of participating securities prior to August 1, 2019, included common units, general partner units and incentive distribution rights (IDRs). Effective August 1, 2019, common units are the only participating securities. For the three and six months ended June 30, 2020 and 2019, our preferred units are potentially dilutive securities and were dilutive to net income per limited partner unit. 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. Millions of Dollars Three Months Ended Six Months Ended 2020 2019 2020 2019 Net income $ 255 233 481 431 Less: General partners’ distributions declared (including IDRs)* — 70 — 139 Limited partners’ distributions declared on preferred units* 9 9 19 19 Limited partners’ distributions declared on common units* 200 107 399 212 Distributions less than net income $ 46 47 63 61 *Distributions declared are attributable to the indicated periods. Limited Partners’ Limited Partners’ Total Three Months Ended June 30, 2020 Net income (millions) : Distributions declared $ 200 9 209 Distributions less than net income 46 — 46 Net income (basic) 246 9 255 Dilutive effect of preferred units 9 Net income (diluted) $ 255 Weighted-average units outstanding—basic 228,340,146 Dilutive effect of preferred units 13,819,791 Weighted-average units outstanding—diluted 242,159,937 Net income per limited partner unit—basic (dollars) $ 1.07 Net income per limited partner unit—diluted (dollars) 1.05 Limited Partners’ General Partner Limited Partners’ Total Three Months Ended June 30, 2019 Net income (millions) : Distributions declared $ 107 70 9 186 Distributions less than net income 46 1 — 47 Net income (basic) 153 71 9 233 Dilutive effect of preferred units* 6 Net income (diluted) $ 159 Weighted-average units outstanding—basic 124,824,010 Dilutive effect of preferred units* 13,819,791 Weighted-average units outstanding—diluted 138,643,801 Net income per limited partner unit—basic (dollars) $ 1.23 Net income per limited partner unit—diluted (dollars) 1.15 *The dilutive effect of 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. Limited Partners’ Limited Partners’ Total Six Months Ended June 30, 2020 Net income (millions) : Distributions declared $ 399 19 418 Distributions less than net income 63 — 63 Net income (basic) 462 19 481 Dilutive effect of preferred units 19 Net income (diluted) $ 481 Weighted-average units outstanding—basic 228,326,203 Dilutive effect of preferred units 13,819,791 Weighted-average units outstanding—diluted 242,145,994 Net income per limited partner unit—basic (dollars) $ 2.02 Net income per limited partner unit—diluted (dollars) 1.99 Limited Partners’ General Partner Limited Partners’ Total Six Months Ended June 30, 2019 Net income (millions) : Distributions declared $ 212 139 19 370 Distributions less than net income 60 1 — 61 Net income (basic) 272 140 19 431 Dilutive effect of preferred units* 14 Net income (diluted) $ 286 Weighted-average units outstanding—basic 124,542,536 Dilutive effect of preferred units* 13,819,791 Weighted-average units outstanding—diluted 138,362,327 Net income per limited partner unit—basic (dollars) $ 2.19 Net income per limited partner unit—diluted (dollars) 2.07 *The dilutive effect of 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. |
Properties, Plants and Equipmen
Properties, Plants and Equipment | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Properties, Plants and Equipment | Note 6—Properties, Plants and Equipment Our investment in properties, plants and equipment (PP&E), with the associated accumulated depreciation, was: Millions of Dollars June 30 December 31 Land $ 19 19 Buildings and improvements 94 94 Pipelines and related assets * 1,452 1,424 Terminals and related assets * 779 741 Rail racks and related assets * 137 137 Processing and related assets * 1,059 1,041 Caverns and related assets * 636 585 Construction-in-progress 444 367 Gross PP&E 4,620 4,408 Accumulated depreciation (1,120) (1,059) Net PP&E $ 3,500 3,349 *Assets for which we are the lessor. |
Debt
Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Note 7—Debt Millions of Dollars June 30 December 31 2.450% Senior Notes due December 2024 $ 300 300 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 600 600 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 0.550% and 1.850% at June 30, 2020, and December 31, 2019, respectively 50 75 Revolving credit facility due July 2020 at 1.423% 215 — Debt at face value 3,740 3,550 Net unamortized discounts and debt issuance costs (33) (34) Total debt 3,707 3,516 Short-term debt (265) (25) Long-term debt $ 3,442 3,491 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 was $3,685 million and $3,650 million at June 30, 2020, and December 31, 2019, respectively. The fair value of our floating-rate debt approximated carrying value of $265 million and $75 million at June 30, 2020, and December 31, 2019, respectively. At June 30, 2020, borrowings of $215 million were outstanding and $3 million in letters of credit had been drawn under our $750 million revolving credit facility. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Note 8—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. As of June 30, 2020, and December 31, 2019, 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. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Equity | Note 9—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. We did not issue any common units under our ATM programs during the three months ended June 30, 2020. For the six months ended June 30, 2020, on a settlement date basis, we issued an aggregate of 40,570 common units under our ATM programs, generating net proceeds of $2 million. For the three and six months ended June 30, 2019, we issued an aggregate of 212,336 and 834,368 common units under our ATM programs, respectively, generating net proceeds of $10 million and $42 million, respectively. Since inception in June 2016 through June 30, 2020, we issued an aggregate of 9,487,055 common units under our ATM programs, and generated net proceeds of $494 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. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 10—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. 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 Three Months Ended Six Months Ended 2020 2019 2020 2019 Operating and maintenance expenses $ 42 50 90 155 General and administrative expenses 21 16 38 33 Total $ 63 66 128 188 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 June 30 December 31 Prepaid expenses and other current assets $ 6 7 Other assets 48 44 Deferred revenues 24 16 Other current liabilities 1 1 Other liabilities 67 70 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 4—Equity Investments, 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 4—Equity Investments, for additional information. |
Cash Flow Information
Cash Flow Information | 6 Months Ended |
Jun. 30, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Cash Flow Information | Note 11—Cash Flow Information Capital Expenditures and Investments Our capital expenditures and investments consisted of: Millions of Dollars Six Months Ended 2020 2019 Cash capital expenditures and investments $ 601 759 Change in capital expenditure accruals 10 (13) Total capital expenditures and investments $ 611 746 |
Net Income Per Limited Partne_2
Net Income Per Limited Partner Unit (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Partners' Capital Notes [Abstract] | |
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 per unit applicable to the limited partners. The classes of participating securities prior to August 1, 2019, included common units, general partner units and incentive distribution rights (IDRs). Effective August 1, 2019, common units are the only participating securities. For the three and six months ended June 30, 2020 and 2019, our preferred units are potentially dilutive securities and were dilutive to net income per limited partner unit. |
Operating Revenues (Tables)
Operating Revenues (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Total operating revenues disaggregated by asset type were as follows: Millions of Dollars Three Months Ended Six Months Ended 2020 2019 2020 2019 Pipelines $ 97 117 208 226 Terminals 33 39 76 79 Storage, processing and other revenues 111 107 224 260 Total operating revenues $ 241 263 508 565 Total operating revenues disaggregated by lease and service revenues were as follows: Millions of Dollars Three Months Ended Six Months Ended 2020 2019 2020 2019 Lease revenues $ 195 214 413 471 Service revenues 46 49 95 94 Total operating revenues $ 241 263 508 565 |
Accounts Receivable | Total accounts receivable by revenue type was as follows: Millions of Dollars June 30 December 31 Lease receivables $ 76 87 Service receivables 21 18 Total accounts receivable $ 97 105 |
Deferred Revenues | Total deferred revenues under our lease and service agreements were as follows: Millions of Dollars June 30 December 31 Deferred lease revenues $ 44 41 Deferred service revenues 3 1 Total deferred revenues $ 47 42 |
Schedule of Future Minimum Payments Receivable | At June 30, 2020, future minimum payments to be received under our lease agreements with customers were estimated to be: Millions Remainder of 2020 $ 354 2021 702 2022 690 2023 646 2024 525 Remaining years 1,389 Total future minimum lease payments from customers $ 4,306 |
Expected Timing of Satisfaction | At June 30, 2020, 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 Remainder of 2020 $ 80 2021 152 2022 152 2023 152 2024 132 Remaining years 756 Total future service revenues $ 1,424 |
Equity Investments (Tables)
Equity Investments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Equity Investments | The following table summarizes the carrying value of our equity investments: Millions of Dollars Percentage Ownership June 30 December 31 Dakota Access, LLC and Energy Transfer Crude Oil Company, LLC (Bakken Pipeline) 25.00 % $ 588 592 Bayou Bridge Pipeline, LLC (Bayou Bridge) 40.00 293 294 DCP Sand Hills Pipeline, LLC (Sand Hills) 33.34 595 595 DCP Southern Hills Pipeline, LLC (Southern Hills) 33.34 218 215 Explorer Pipeline Company (Explorer) 21.94 100 105 Gray Oak Pipeline, LLC 65.00 896 759 Liberty Pipeline LLC (Liberty) 50.00 202 — Paradigm Pipeline LLC (Paradigm) 50.00 142 143 Phillips 66 Partners Terminal LLC (Phillips 66 Partners Terminal) 70.00 66 70 South Texas Gateway Terminal LLC (South Texas Gateway Terminal) 25.00 129 74 STACK Pipeline LLC (STACK) 50.00 111 114 Total equity investments $ 3,340 2,961 Earnings from our equity investments were as follows: Millions of Dollars Three Months Ended Six Months Ended 2020 2019 2020 2019 Bakken Pipeline $ 30 58 87 109 Bayou Bridge 7 8 17 12 Sand Hills 37 38 78 74 Southern Hills 10 11 21 24 Explorer 4 11 11 14 Gray Oak Pipeline, LLC 14 — 19 — Liberty — — — — Paradigm 2 3 6 6 Phillips 66 Partners Terminal (1) 6 (1) 12 South Texas Gateway Terminal — — — — STACK 1 2 2 5 Total equity in earnings of affiliates $ 104 137 240 256 Summarized financial information for 100% of Dakota Access is as follows: Millions of Dollars Three Months Ended Six Months Ended 2020 2019 2020 2019 Revenues $ 169 254 427 490 Income before income taxes 94 181 280 338 Net income 94 181 280 338 |
Net Income Per Limited Partne_3
Net Income Per Limited Partner Unit (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Partners' Capital Notes [Abstract] | |
Schedule of Distributions Declared, Partners Interest in Partnership Net Income and Net Income per Unit by Class | 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. Millions of Dollars Three Months Ended Six Months Ended 2020 2019 2020 2019 Net income $ 255 233 481 431 Less: General partners’ distributions declared (including IDRs)* — 70 — 139 Limited partners’ distributions declared on preferred units* 9 9 19 19 Limited partners’ distributions declared on common units* 200 107 399 212 Distributions less than net income $ 46 47 63 61 *Distributions declared are attributable to the indicated periods. Limited Partners’ Limited Partners’ Total Three Months Ended June 30, 2020 Net income (millions) : Distributions declared $ 200 9 209 Distributions less than net income 46 — 46 Net income (basic) 246 9 255 Dilutive effect of preferred units 9 Net income (diluted) $ 255 Weighted-average units outstanding—basic 228,340,146 Dilutive effect of preferred units 13,819,791 Weighted-average units outstanding—diluted 242,159,937 Net income per limited partner unit—basic (dollars) $ 1.07 Net income per limited partner unit—diluted (dollars) 1.05 Limited Partners’ General Partner Limited Partners’ Total Three Months Ended June 30, 2019 Net income (millions) : Distributions declared $ 107 70 9 186 Distributions less than net income 46 1 — 47 Net income (basic) 153 71 9 233 Dilutive effect of preferred units* 6 Net income (diluted) $ 159 Weighted-average units outstanding—basic 124,824,010 Dilutive effect of preferred units* 13,819,791 Weighted-average units outstanding—diluted 138,643,801 Net income per limited partner unit—basic (dollars) $ 1.23 Net income per limited partner unit—diluted (dollars) 1.15 *The dilutive effect of 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. Limited Partners’ Limited Partners’ Total Six Months Ended June 30, 2020 Net income (millions) : Distributions declared $ 399 19 418 Distributions less than net income 63 — 63 Net income (basic) 462 19 481 Dilutive effect of preferred units 19 Net income (diluted) $ 481 Weighted-average units outstanding—basic 228,326,203 Dilutive effect of preferred units 13,819,791 Weighted-average units outstanding—diluted 242,145,994 Net income per limited partner unit—basic (dollars) $ 2.02 Net income per limited partner unit—diluted (dollars) 1.99 Limited Partners’ General Partner Limited Partners’ Total Six Months Ended June 30, 2019 Net income (millions) : Distributions declared $ 212 139 19 370 Distributions less than net income 60 1 — 61 Net income (basic) 272 140 19 431 Dilutive effect of preferred units* 14 Net income (diluted) $ 286 Weighted-average units outstanding—basic 124,542,536 Dilutive effect of preferred units* 13,819,791 Weighted-average units outstanding—diluted 138,362,327 Net income per limited partner unit—basic (dollars) $ 2.19 Net income per limited partner unit—diluted (dollars) 2.07 *The dilutive effect of 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. |
Properties, Plants and Equipm_2
Properties, Plants and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | Our investment in properties, plants and equipment (PP&E), with the associated accumulated depreciation, was: Millions of Dollars June 30 December 31 Land $ 19 19 Buildings and improvements 94 94 Pipelines and related assets * 1,452 1,424 Terminals and related assets * 779 741 Rail racks and related assets * 137 137 Processing and related assets * 1,059 1,041 Caverns and related assets * 636 585 Construction-in-progress 444 367 Gross PP&E 4,620 4,408 Accumulated depreciation (1,120) (1,059) Net PP&E $ 3,500 3,349 *Assets for which we are the lessor. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Millions of Dollars June 30 December 31 2.450% Senior Notes due December 2024 $ 300 300 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 600 600 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 0.550% and 1.850% at June 30, 2020, and December 31, 2019, respectively 50 75 Revolving credit facility due July 2020 at 1.423% 215 — Debt at face value 3,740 3,550 Net unamortized discounts and debt issuance costs (33) (34) Total debt 3,707 3,516 Short-term debt (265) (25) Long-term debt $ 3,442 3,491 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Summary of Related Party Transactions | Significant related party transactions included in our total costs and expenses were: Millions of Dollars Three Months Ended Six Months Ended 2020 2019 2020 2019 Operating and maintenance expenses $ 42 50 90 155 General and administrative expenses 21 16 38 33 Total $ 63 66 128 188 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 June 30 December 31 Prepaid expenses and other current assets $ 6 7 Other assets 48 44 Deferred revenues 24 16 Other current liabilities 1 1 Other liabilities 67 70 |
Cash Flow Information (Tables)
Cash Flow Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Summary of Capital Expenditures and Noncash Investing and Financing Activities | Our capital expenditures and investments consisted of: Millions of Dollars Six Months Ended 2020 2019 Cash capital expenditures and investments $ 601 759 Change in capital expenditure accruals 10 (13) Total capital expenditures and investments $ 611 746 |
Description of the Business (De
Description of the Business (Details) | 6 Months Ended |
Jun. 30, 2020segmentrefinery | |
Property, Plant and Equipment [Line Items] | |
Number of reportable segments | segment | 1 |
Phillips 66 | |
Property, Plant and Equipment [Line Items] | |
Number of refineries | refinery | 9 |
Operating Revenues (Revenues Di
Operating Revenues (Revenues Disaggregated) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Operating revenues | $ 241 | $ 263 | $ 508 | $ 565 |
Pipelines | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Operating revenues | 97 | 117 | 208 | 226 |
Terminals | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Operating revenues | 33 | 39 | 76 | 79 |
Storage, processing and other revenues | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Operating revenues | $ 111 | $ 107 | $ 224 | $ 260 |
Operating Revenues (Operating R
Operating Revenues (Operating Revenues) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Operating revenues | $ 241 | $ 263 | $ 508 | $ 565 |
Lease revenues | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Operating revenues | 195 | 214 | 413 | 471 |
Service revenues | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Operating revenues | $ 46 | $ 49 | $ 95 | $ 94 |
Operating Revenues (Accounts Re
Operating Revenues (Accounts Receivable) (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Revenue from External Customer [Line Items] | ||
Total accounts receivable | $ 97 | $ 105 |
Lease receivables | ||
Revenue from External Customer [Line Items] | ||
Total accounts receivable | 76 | 87 |
Service receivables | ||
Revenue from External Customer [Line Items] | ||
Total accounts receivable | $ 21 | $ 18 |
Operating Revenues (Deferred Re
Operating Revenues (Deferred Revenue) (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Revenue from External Customer [Line Items] | ||
Total deferred revenues | $ 47 | $ 42 |
Lease revenues | ||
Revenue from External Customer [Line Items] | ||
Total deferred revenues | 44 | 41 |
Service revenues | ||
Revenue from External Customer [Line Items] | ||
Total deferred revenues | $ 3 | $ 1 |
Operating Revenues (Schedule of
Operating Revenues (Schedule of Future Minimum Operating Lease Income) (Details) $ in Millions | Jun. 30, 2020USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remainder of 2020 | $ 354 |
2021 | 702 |
2022 | 690 |
2023 | 646 |
2024 | 525 |
Remaining years | 1,389 |
Total future minimum lease payments from customers | $ 4,306 |
Operating Revenues (Narrative)
Operating Revenues (Narrative) (Details) | 6 Months Ended |
Jun. 30, 2020 | |
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 (Performance
Operating Revenues (Performance Obligations) (Details) $ in Millions | Jun. 30, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 1,424 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 80 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 152 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 152 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 152 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 132 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, amount | $ 756 |
Revenue, remaining performance obligation, expected timing of satisfaction, period |
Equity Investments (Schedule of
Equity Investments (Schedule of Carrying Value Equity Investments) (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 | Feb. 28, 2019 |
Schedule of Equity Method Investments [Line Items] | |||
Carrying Value | $ 3,340 | $ 2,961 | |
Dakota Access, LLC and Energy Transfer Crude Oil Company, LLC (Bakken Pipeline) | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage Ownership | 25.00% | ||
Carrying Value | $ 588 | 592 | |
Bayou Bridge Pipeline, LLC (Bayou Bridge) | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage Ownership | 40.00% | ||
Carrying Value | $ 293 | 294 | |
DCP Sand Hills Pipeline, LLC (Sand Hills) | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage Ownership | 33.34% | ||
Carrying Value | $ 595 | 595 | |
DCP Southern Hills Pipeline, LLC (Southern Hills) | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage Ownership | 33.34% | ||
Carrying Value | $ 218 | 215 | |
Explorer Pipeline Company (Explorer) | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage Ownership | 21.94% | ||
Carrying Value | $ 100 | 105 | |
Gray Oak Pipeline, LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage Ownership | 65.00% | 65.00% | |
Carrying Value | $ 896 | 759 | |
Liberty Pipeline LLC (Liberty) | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage Ownership | 50.00% | ||
Carrying Value | $ 202 | 0 | |
Paradigm Pipeline LLC (Paradigm) | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage Ownership | 50.00% | ||
Carrying Value | $ 142 | 143 | |
Phillips 66 Partners Terminal LLC (Phillips 66 Partners Terminal) | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage Ownership | 70.00% | ||
Carrying Value | $ 66 | 70 | |
South Texas Gateway Terminal LLC (South Texas Gateway Terminal) | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage Ownership | 25.00% | ||
Carrying Value | $ 129 | 74 | |
STACK Pipeline LLC (STACK) | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage Ownership | 50.00% | ||
Carrying Value | $ 111 | $ 114 |
Equity Investments (Schedule _2
Equity Investments (Schedule of Equity Investment Earnings (Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||||
Total equity in earnings of affiliates | $ 104 | $ 137 | $ 240 | $ 256 |
Dakota Access, LLC and Energy Transfer Crude Oil Company, LLC (Bakken Pipeline) | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Total equity in earnings of affiliates | 30 | 58 | 87 | 109 |
Bayou Bridge Pipeline, LLC (Bayou Bridge) | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Total equity in earnings of affiliates | 7 | 8 | 17 | 12 |
DCP Sand Hills Pipeline, LLC (Sand Hills) | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Total equity in earnings of affiliates | 37 | 38 | 78 | 74 |
DCP Southern Hills Pipeline, LLC (Southern Hills) | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Total equity in earnings of affiliates | 10 | 11 | 21 | 24 |
Explorer Pipeline Company (Explorer) | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Total equity in earnings of affiliates | 4 | 11 | 11 | 14 |
Gray Oak Pipeline, LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Total equity in earnings of affiliates | 14 | 0 | 19 | 0 |
Liberty Pipeline LLC (Liberty) | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Total equity in earnings of affiliates | 0 | 0 | 0 | 0 |
Paradigm Pipeline LLC (Paradigm) | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Total equity in earnings of affiliates | 2 | 3 | 6 | 6 |
Phillips 66 Partners Terminal LLC (Phillips 66 Partners Terminal) | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Total equity in earnings of affiliates | (1) | 6 | (1) | 12 |
South Texas Gateway Terminal LLC (South Texas Gateway Terminal) | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Total equity in earnings of affiliates | 0 | 0 | 0 | 0 |
STACK Pipeline LLC (STACK) | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Total equity in earnings of affiliates | $ 1 | $ 2 | $ 2 | $ 5 |
Equity Investments (Narrative)
Equity Investments (Narrative) (Details) - USD ($) | Jul. 06, 2020 | Feb. 29, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jan. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Feb. 28, 2019 | Dec. 31, 2018 |
Schedule of Equity Method Investments [Line Items] | |||||||||||
Gain from equity interest transfer | $ 84,000,000 | $ 0 | $ 84,000,000 | $ 0 | |||||||
Equity investments | $ 3,340,000,000 | $ 3,340,000,000 | $ 2,961,000,000 | ||||||||
Gray Oak Pipeline, LLC | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Maximum equity contribution, co-venture | $ 1,379,000,000 | ||||||||||
Dakota Access, LLC | Subsequent Event | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Estimated period of time to prepare Environmental Impact Statement | 13 months | ||||||||||
Dakota Access, LLC | Senior Notes | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Debt instrument, face amount | $ 2,500,000,000 | ||||||||||
Dakota Access, LLC | Senior Notes | Subsequent Event | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Scheduled annual interest payments | $ 25,000,000 | ||||||||||
Dakota Access, LLC | Senior Notes | Senior Notes Due 2022 | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Debt instrument, face amount | $ 650,000,000 | ||||||||||
Interest rate, stated percentage | 3.625% | ||||||||||
Dakota Access, LLC | Senior Notes | Senior Notes Due 2024 | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Debt instrument, face amount | $ 1,000,000,000 | ||||||||||
Interest rate, stated percentage | 3.90% | ||||||||||
Dakota Access, LLC | Senior Notes | Senior Notes Due 2029 | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Debt instrument, face amount | $ 850,000,000 | ||||||||||
Interest rate, stated percentage | 4.625% | ||||||||||
Common Control Transaction | Phillips 66 | Phillips 66 PDI | Liberty Pipeline LLC (Liberty) | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Controlling interest acquired, percentage | 50.00% | ||||||||||
Business combination, consideration transferred | $ 75,000,000 | ||||||||||
Liberty Pipeline LLC (Liberty) | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Ownership interest acquired, percentage | 50.00% | 50.00% | |||||||||
Equity investments | $ 202,000,000 | $ 202,000,000 | 0 | ||||||||
Guarantor obligations, current carrying value | $ 49,000,000 | $ 49,000,000 | |||||||||
Gray Oak Pipeline, LLC | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Ownership interest acquired, percentage | 65.00% | 65.00% | 65.00% | ||||||||
Effective ownership interest | 42.25% | 42.25% | |||||||||
Gain from equity interest transfer | $ 84,000,000 | ||||||||||
Maximum exposure | 583,000,000 | $ 583,000,000 | |||||||||
Equity investments | 896,000,000 | 896,000,000 | $ 759,000,000 | ||||||||
Gray Oak Pipeline, LLC | Third Party | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Amount contributed to fund cash calls | 61,000,000 | ||||||||||
Gray Oak Holdings LLC | Third Party | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Percentage of ownership | 35.00% | ||||||||||
Dakota Access and ETCO | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Maximum exposure, undiscounted | $ 631,000,000 | $ 631,000,000 |
Equity Investments (Schedule _3
Equity Investments (Schedule of Dakota Access) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||||
Revenues | $ 241 | $ 263 | $ 508 | $ 565 |
Income before income taxes | 255 | 234 | 482 | 433 |
Net income | 255 | 233 | 481 | 431 |
Dakota Access, LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Revenues | 169 | 254 | 427 | 490 |
Income before income taxes | 94 | 181 | 280 | 338 |
Net income | $ 94 | $ 181 | $ 280 | $ 338 |
Net Income Per Limited Partne_4
Net Income Per Limited Partner Unit (Schedule of Earnings Per unit of our Limited Partners) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Limited Partners' Capital Account [Line Items] | ||||
Net income | $ 255 | $ 233 | $ 481 | $ 431 |
Less: | ||||
Distributions declared | 209 | 186 | 418 | 370 |
Distributions less than net income | 46 | 47 | 63 | 61 |
General Partner | ||||
Limited Partners' Capital Account [Line Items] | ||||
Net income | 71 | 140 | ||
Less: | ||||
Distributions declared | 0 | 70 | 0 | 139 |
Preferred Units | Limited Partner | ||||
Limited Partners' Capital Account [Line Items] | ||||
Net income | 9 | 19 | 19 | |
Less: | ||||
Distributions declared | 9 | 9 | 19 | 19 |
Common Units | Limited Partner | ||||
Limited Partners' Capital Account [Line Items] | ||||
Net income | 246 | 153 | 462 | 272 |
Less: | ||||
Distributions declared | $ 200 | $ 107 | $ 399 | $ 212 |
Net Income Per Limited Partne_5
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 | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Limited Partners' Capital Account [Line Items] | ||||
Distributions declared | $ 209 | $ 186 | $ 418 | $ 370 |
Distributions less than net income | 46 | 47 | 63 | 61 |
Net income (basic) | $ 255 | $ 233 | $ 481 | $ 431 |
Common Units | ||||
Limited Partners' Capital Account [Line Items] | ||||
Weighted-average units outstanding—basic (in shares) | 228,340,146 | 124,824,010 | 228,326,203 | 124,542,536 |
Dilutive effect of preferred units (in shares) | 13,819,791 | 13,819,791 | 13,819,791 | 13,819,791 |
Weighted-average units outstanding—diluted (in shares) | 242,159,937 | 138,643,801 | 242,145,994 | 138,362,327 |
Net income per limited partner unit—basic (in dollars per share) | $ 1.07 | $ 1.23 | $ 2.02 | $ 2.19 |
Net income per limited partner unit—diluted (in dollars per share) | $ 1.05 | $ 1.15 | $ 1.99 | $ 2.07 |
Limited Partner | Common Units | ||||
Limited Partners' Capital Account [Line Items] | ||||
Distributions declared | $ 200 | $ 107 | $ 399 | $ 212 |
Distributions less than net income | 46 | 46 | 63 | 60 |
Net income (basic) | 246 | 153 | 462 | 272 |
Dilutive effect of preferred units | 9 | 6 | 19 | 14 |
Net income (diluted) | 255 | 159 | 481 | 286 |
Limited Partner | Preferred Units | ||||
Limited Partners' Capital Account [Line Items] | ||||
Distributions declared | 9 | 9 | 19 | 19 |
Distributions less than net income | 0 | 0 | 0 | 0 |
Net income (basic) | 9 | 19 | 19 | |
General Partner | ||||
Limited Partners' Capital Account [Line Items] | ||||
Distributions declared | $ 0 | 70 | $ 0 | 139 |
Distributions less than net income | 1 | 1 | ||
Net income (basic) | $ 71 | $ 140 |
Net Income Per Limited Partne_6
Net Income Per Limited Partner Unit (Narrative) (Details) - Common Units - Cash Distribution - Subsequent Event $ / shares in Units, $ in Millions | Jul. 21, 2020USD ($)$ / shares |
Subsequent Event [Line Items] | |
Quarterly cash distribution declared per limited partner unit (in dollars per share) | $ / shares | $ 0.875 |
Distribution made to limited partner, cash distributions declared | $ | $ 200 |
Properties, Plants and Equipm_3
Properties, Plants and Equipment (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Gross PP&E | $ 4,620 | $ 4,408 |
Accumulated depreciation | (1,120) | (1,059) |
Net PP&E | 3,500 | 3,349 |
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 | 94 |
Pipelines and related assets | ||
Property, Plant and Equipment [Line Items] | ||
Gross PP&E | 1,452 | 1,424 |
Terminals and related assets | ||
Property, Plant and Equipment [Line Items] | ||
Gross PP&E | 779 | 741 |
Rail racks and related assets | ||
Property, Plant and Equipment [Line Items] | ||
Gross PP&E | 137 | 137 |
Processing and related assets | ||
Property, Plant and Equipment [Line Items] | ||
Gross PP&E | 1,059 | 1,041 |
Caverns and related assets | ||
Property, Plant and Equipment [Line Items] | ||
Gross PP&E | 636 | 585 |
Construction-in-progress | ||
Property, Plant and Equipment [Line Items] | ||
Gross PP&E | $ 444 | $ 367 |
Debt (Summary of Long-Term Debt
Debt (Summary of Long-Term Debt) (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Debt at face value | $ 3,740 | $ 3,550 |
Net unamortized discounts and debt issuance costs | (33) | (34) |
Total debt | 3,707 | 3,516 |
Short-term debt | (265) | (25) |
Long-term debt | 3,442 | 3,491 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 215 | 0 |
Interest rate, stated percentage | 1.423% | |
Tax-exempt bonds due April 2020 and April 2021 at 0.550% and 1.850% at June 30, 2020, and December 31, 2019, respectively | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 50 | $ 75 |
Interest rate, stated percentage | 0.55% | 1.85% |
Senior Notes | 2.450% Senior Notes due December 2024 | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 300 | $ 300 |
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 | 600 |
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% |
Debt (Narrative) (Details)
Debt (Narrative) (Details) | Apr. 01, 2020USD ($)tranche | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | ||||
Line of credit facility, outstanding | $ 215,000,000 | |||
Letters of credit outstanding, amount | 3,000,000 | |||
Repayments of debt | 25,000,000 | $ 585,000,000 | ||
Tax-Exempt Bonds | ||||
Debt Instrument [Line Items] | ||||
Repayments of debt | $ 25,000,000 | |||
Number of tranches remaining | tranche | 2 | |||
Credit Agreement | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 750,000,000 | |||
Fair Value, Inputs, Level 2 | Tax-Exempt Bonds | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, fair value disclosure | 265,000,000 | $ 75,000,000 | ||
Fair Value, Inputs, Level 2 | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, fair value disclosure | $ 3,685,000,000 | $ 3,650,000,000 |
Equity (Details)
Equity (Details) | 3 Months Ended | 6 Months Ended | 49 Months Ended | ||
Jun. 30, 2020offeringshares | Jun. 30, 2019USD ($)shares | Jun. 30, 2020USD ($)offeringshares | Jun. 30, 2019USD ($)shares | Jun. 30, 2020USD ($)offeringshares | |
Limited Partners' Capital Account [Line Items] | |||||
Number of common units issued in public offering (in shares) | shares | 0 | 212,336 | 40,570 | 834,368 | |
At The Market Offering Program | |||||
Limited Partners' Capital Account [Line Items] | |||||
Aggregate authorized amount | $ 750,000,000 | ||||
Common Units | At The Market Offering Program | |||||
Limited Partners' Capital Account [Line Items] | |||||
Number of continuous offerings | offering | 3 | 3 | 3 | ||
Authorized amount per program | $ 250,000,000 | ||||
Number of common units issued in public offering (in shares) | shares | 0 | 212,336 | 40,570 | 834,368 | 9,487,055 |
Issuance of common units | $ 10,000,000 | $ 2,000,000 | $ 42,000,000 | $ 494,000,000 | |
Brokers commissions | 5,000,000 | ||||
Other costs | $ 3,000,000 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Gray Oak Pipeline, LLC | |
Related Party Transaction [Line Items] | |
Effective ownership interest (as a percent) | 42.25% |
Phillips 66 | Phillips 66 | Amended Omnibus Agreement | |
Related Party Transaction [Line Items] | |
Monthly operational and administrative support fee | $ 8 |
Related Party Transactions (Sum
Related Party Transactions (Summary of Related Party Transactions) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Related Party Transactions [Abstract] | ||||
Operating and maintenance expenses | $ 42 | $ 50 | $ 90 | $ 155 |
General and administrative expenses | 21 | 16 | 38 | 33 |
Total | $ 63 | $ 66 | $ 128 | $ 188 |
Related Party Transactions (Oth
Related Party Transactions (Other Related Party Balances) (Details) - USD ($) $ in Millions | Jun. 30, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | ||
Prepaid expenses and other current assets | $ 10 | $ 10 |
Other assets | 50 | 52 |
Deferred revenues | 24 | 16 |
Other current liabilities | 4 | 3 |
Other liabilities | 93 | 94 |
Phillips 66 | ||
Related Party Transaction [Line Items] | ||
Prepaid expenses and other current assets | 6 | 7 |
Other assets | 48 | 44 |
Deferred revenues | 24 | 16 |
Other current liabilities | 1 | 1 |
Other liabilities | $ 67 | $ 70 |
Cash Flow Information (Details)
Cash Flow Information (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Supplemental Cash Flow Information [Abstract] | ||
Cash capital expenditures and investments | $ 601 | $ 759 |
Change in capital expenditure accruals | 10 | (13) |
Total capital expenditures and investments | $ 611 | $ 746 |