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Phillips 66 Partners (PSXP)

Filed: 3 Aug 21, 5:04pm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period endedJune 30, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period fromto
Commission file number:001-36011

Phillips 66 Partners LP
(Exact name of registrant as specified in its charter)
 
Delaware38-3899432
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
2331 CityWest Blvd., Houston, Texas 77042
(Address of principal executive offices) (Zip Code)
(855) 283-9237
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Units, Representing Limited Partner InterestsPSXPNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes     No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes     No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes      No  
The registrant had 228,340,146 common units outstanding as of June 30, 2021.


PHILLIPS 66 PARTNERS LP

TABLE OF CONTENTS
 



PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
 

Consolidated Statement of IncomePhillips 66 Partners LP
Millions of Dollars
Three Months Ended
June 30
Six Months Ended
June 30
2021 2020 2021 2020 
Revenues and Other Income
Operating revenues—related parties$274 236 519 494 
Operating revenues—third parties6 13 14 
Equity in earnings of affiliates142 104 266 240 
Gain from equity interest transfer0 84 0 84 
Other income1 1 
Total revenues and other income423 430 799 834 
Costs and Expenses
Operating and maintenance expenses93 84 188 172 
Depreciation34 31 68 61 
Impairments0 198 
General and administrative expenses18 17 35 34 
Taxes other than income taxes11 10 21 21 
Interest and debt expense32 28 65 57 
Other expenses0 0 
Total costs and expenses188 175 575 352 
Income before income taxes235 255 224 482 
Income tax expense1 1 
Net Income234 255 223 481 
Less: Net income attributable to noncontrolling interest9 16 
Net Income Attributable to the Partnership225 255207 481 
Less: Preferred unitholders’ interest in net income attributable to the Partnership12 24 19 
Limited Partners’ Interest in Net Income Attributable to the Partnership$213 246 183 462 
Net Income Attributable to the Partnership Per Limited Partner Unit (dollars)
Common units—basic$0.91 1.07 0.78 2.02 
Common units—diluted0.91 1.05 0.78 1.99 
Weighted-Average Limited Partner Units Outstanding (thousands)
Common units—basic228,340 228,340 228,340 228,326 
Common units—diluted228,340 242,160 228,340 242,146 
See Notes to Consolidated Financial Statements.
1

Consolidated Statement of Comprehensive IncomePhillips 66 Partners LP

Millions of Dollars
Three Months Ended
June 30
Six Months Ended
June 30
2021 2020 2021 2020 
Net Income$234 255 223 481 
Defined benefit plans
Plan sponsored by equity affiliates, net of income taxes0 (1)
Other comprehensive loss0 (1)
Comprehensive Income234 255222 481 
Less: Comprehensive income attributable to noncontrolling interest9 16 
Comprehensive Income Attributable to the Partnership$225 255 206 481 
See Notes to Consolidated Financial Statements.
2

Consolidated Balance SheetPhillips 66 Partners LP
 
Millions of Dollars
June 30
2021
December 31
2020
Assets
Cash and cash equivalents$2 
Accounts receivable—related parties96 103 
Accounts receivable—third parties5 
Materials and supplies36 16 
Prepaid expenses and other current assets13 11 
Total current assets152 140 
Equity investments2,962 3,244 
Net properties, plants and equipment3,653 3,639 
Goodwill185 185 
Other assets49 50 
Total Assets$7,001 7,258 
Liabilities
Accounts payable—related parties$19 19 
Accounts payable—third parties48 73 
Accrued interest35 35 
Deferred revenues34 27 
Short-term debt465 465 
Accrued property and other taxes20 11 
Other current liabilities8 
Total current liabilities629 633 
Long-term debt3,445 3,444 
Other liabilities88 90 
Total Liabilities4,162 4,167 
Equity
Preferred unitholders (2021—13,451,263 units issued and outstanding; 2020—13,819,791 units issued and outstanding)729 749 
Common unitholders—public (2021 and 2020—58,580,009 units issued and outstanding)2,649 2,706 
Common unitholder—Phillips 66 (2021 and 2020—169,760,137 units issued and outstanding)(820)(656)
Accumulated other comprehensive loss(2)(1)
Total unitholders’ equity2,556 2,798 
Noncontrolling interest283 293 
Total Equity2,839 3,091 
Total Liabilities and Equity$7,001 7,258 
See Notes to Consolidated Financial Statements.
3

Consolidated Statement of Cash FlowsPhillips 66 Partners LP


Millions of Dollars

Six Months Ended
June 30

2021 2020 
Cash Flows From Operating Activities


Net income$223 481 
Adjustments to reconcile net income to net cash provided by operating activities


Depreciation68 61 
Impairments198 
Undistributed equity earnings2 
Gain from equity interest transfer0 (84)
Other0 
Working capital adjustments


Accounts receivable5 
Prepaid expenses and other current assets(2)
Accounts payable(3)(7)
Accrued interest0 (7)
Deferred revenues7 
Other accruals15 13 
Net Cash Provided by Operating Activities513 489 


Cash Flows From Investing Activities


Cash capital expenditures and investments(141)(601)
Liberty acquisition0 (75)
Return of investment from equity affiliates77 86 
Proceeds from sale of equity interest22 
Net Cash Used in Investing Activities(42)(590)


Cash Flows From Financing Activities


Issuance of debt465 215 
Repayment of debt(465)(25)
Issuance of common units0 
Repurchase of preferred units(24)
Quarterly distributions to preferred unitholders(24)(19)
Quarterly distributions to common unitholders—public(103)(102)
Quarterly distributions to common unitholder—Phillips 66(297)(297)
Net proceeds from equity interest transfer0 40 
Distributions to noncontrolling interest(26)
Other distributions from (to) Phillips 66(2)
Net Cash Used in Financing Activities(476)(178)


Net Change in Cash and Cash Equivalents(5)(279)
Cash and cash equivalents at beginning of period7 286 
Cash and Cash Equivalents at End of Period$2 
See Notes to Consolidated Financial Statements.
4

Consolidated Statement of Changes in EquityPhillips 66 Partners LP

Millions of Dollars
Three Months Ended
June 30
Partnership
Preferred
Unitholders
Public
Common
Unitholders
Public
Common
Unitholder
Phillips 66
Accum. Other
Comprehensive
Loss
Noncontrolling
Interest
Total
March 31, 2021$749 2,647 (828)(2)287 2,853 
Net income12 55 158  9 234 
Quarterly cash distributions to unitholders ($0.875 per common unit)(12)(52)(148)  (212)
Repurchase of preferred units(20)(1)(3)  (24)
Distributions to noncontrolling interest    (13)(13)
Other contributions from Phillips 66  1   1 
June 30, 2021$729 2,649 (820)(2)283 2,839 
March 31, 2020$747 2,723 (616)(1)2,853 
Net income63 183 — — 255 
Quarterly cash distributions to unitholders ($0.875 per common unit)(10)(51)(148)— — (209)
Transfer of equity interest— — — — 305 305 
Other contributions from Phillips 66— — — — 
June 30, 2020$746 2,735 (572)(1)305 3,213 

Units
Three Months Ended
June 30
Preferred Units
Public
Common Units
Public
Common Units
Phillips 66
Total Units
March 31, 202113,819,791 58,580,009 169,760,137 242,159,937 
Units issued in public equity offerings    
Repurchase of preferred units(368,528)  (368,528)
June 30, 202113,451,263 58,580,009 169,760,137 241,791,409 
March 31, 202013,819,791 58,580,009 169,760,137 242,159,937 
Units issued in public equity offerings— — — — 
June 30, 202013,819,791 58,580,009 169,760,137 242,159,937 
See Notes to Consolidated Financial Statements.

5

Millions of Dollars
Six Months Ended
June 30
Partnership
Preferred
Unitholders
Public
Common
Unitholders
Public
Common
Unitholder
Phillips 66
Accum. Other
Comprehensive
Loss
Noncontrolling
Interest
Total
December 31, 2020$749 2,706 (656)(1)293 3,091 
Net income24 47 136  16 223 
Other comprehensive loss   (1) (1)
Quarterly cash distributions to unitholders ($1.750 per common unit)(24)(103)(297)  (424)
Repurchase of preferred units(20)(1)(3)  (24)
Distributions to noncontrolling interest    (26)(26)
June 30, 2021$729 2,649 (820)(2)283 2,839 
December 31, 2019$746 2,717 (628)(1)2,834 
Issuance of common units— — — — 
Net income19 118 344 — — 481 
Quarterly cash distributions to unitholders ($1.750 per common unit)(19)(102)(297)— — (418)
Transfer of equity interest— — — — 305 305 
Other contributions from Phillips 66— — — — 
June 30, 2020$746 2,735 (572)(1)305 3,213 

Units
Six Months Ended
June 30
Preferred Units
Public
Common Units
Public
Common Units
Phillips 66
Total Units
December 31, 202013,819,791 58,580,009 169,760,137 242,159,937 
Units issued in public equity offerings    
Repurchase of preferred units(368,528)  (368,528)
June 30, 202113,451,263 58,580,009 169,760,137 241,791,409 
December 31, 201913,819,791 58,539,439 169,760,137 242,119,367 
Units issued in public equity offerings— 40,570 — 40,570 
June 30, 202013,819,791 58,580,009 169,760,137 242,159,937 
See Notes to Consolidated Financial Statements.

6

Notes to Consolidated Financial StatementsPhillips 66 Partners LP
 
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” or “GP” 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 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, 9 of Phillips 66’s owned or joint venture refineries. Our operations consist of 1 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.


Note 2—Interim Financial Information

The unaudited interim financial information presented in the financial statements included in this report is prepared in accordance with generally accepted accounting principles in the United States (GAAP) and includes all known accruals and adjustments necessary, in the opinion of management, for a fair presentation of our financial position, results of operations and cash flows for the periods presented. Unless otherwise specified, all such adjustments are of a normal and recurring nature. Certain notes and other information have been condensed or omitted from the interim financial statements included in this report. Therefore, these interim financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our 2020 Annual Report on Form 10-K. The results of operations for the three and six months ended June 30, 2021, are not necessarily indicative of the results to be expected for the full year.

The Coronavirus Disease 2019 (COVID-19) pandemic continues to impact global economic activity. Our results in the second quarter of 2021 reflect the gradual recovery of demand for refined petroleum products following the administration of COVID-19 vaccines and the easing of pandemic restrictions since the beginning of 2021. However, the adverse impacts of the COVID-19 pandemic may continue in the near term, and the depth and duration of the resulting economic consequences remain uncertain. We continuously monitor our asset and investment portfolio for impairments in this challenging business environment.


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.
7

Total operating revenues disaggregated by asset type were as follows:
Millions of Dollars
Three Months Ended
June 30
Six Months Ended
June 30
2021 2020 2021 2020 
Pipelines$12197225208
Terminals43338276
Storage, processing and other revenues116111225224
Total operating revenues$280241532508


The majority of our agreements with Phillips 66 are considered operating leases under GAAP. The classification of a lease as either an operating or a 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
June 30
Six Months Ended
June 30
2021 2020 2021 2020 
Lease revenues$233 195 440 413 
Service revenues47 46 92 95 
Total operating revenues$280 241 532 508 


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
2021
December 31
2020
Lease receivables$84 87 
Service receivables17 19 
Total accounts receivable$101 106 


8

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
2021
December 31
2020
Deferred lease revenues$51 45 
Deferred service revenues2 
Total deferred revenues$53 49 


Future Minimum Lease Payments from Customers
At June 30, 2021, future minimum payments to be received under our lease agreements with customers, mainly Phillips 66, were estimated to be:
Millions
of Dollars
Remainder of 2021$384 
2022753 
2023707 
2024589 
2025530 
Remaining years1,297 
Total future minimum lease payments from customers$4,260 


Remaining Performance Obligations
We typically have long-term service contracts with our customers, mainly Phillips 66, of which the original durations range from 5 to 15 years. The weighted-average remaining duration of these contracts is 9 years. These contracts include both fixed and variable transaction price components. At June 30, 2021, 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
Remainder of 2021$65 
2022124 
2023124 
202499 
202595 
Remaining years381 
Total future service revenues$888 

9

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.


Note 4—Equity Investments

The following table summarizes the carrying value of our equity investments:

Millions of Dollars
Percentage
Ownership
June 30
2021
December 31
2020
Dakota Access, LLC and Energy Transfer Crude Oil Company, LLC (Bakken Pipeline)25.00 %$577 577 
Bayou Bridge Pipeline, LLC (Bayou Bridge)40.00 280 288 
DCP Sand Hills Pipeline, LLC (Sand Hills)33.34 580 582 
DCP Southern Hills Pipeline, LLC (Southern Hills)33.34 214 217 
Explorer Pipeline Company (Explorer)21.94 84 92 
Gray Oak Pipeline, LLC65.00 833 860 
Liberty Pipeline LLC (Liberty)*0 241 
Paradigm Pipeline LLC (Paradigm)50.00 139 141 
Phillips 66 Partners Terminal LLC (Phillips 66 Partners Terminal)70.00 16 15 
South Texas Gateway Terminal LLC (South Texas Gateway Terminal)25.00 176 167 
STACK Pipeline LLC (STACK)50.00 63 64 
Total equity investments$2,962 3,244 
*In April 2021, we transferred our 50% ownership interest in Liberty to our co-venturer.

Earnings (losses) from our equity investments were as follows:

Millions of Dollars
Three Months Ended
June 30
Six Months Ended
June 30
2021 2020 2021 2020 
Bakken Pipeline$38 30 82 87 
Bayou Bridge10 17 17 
Sand Hills33 37 60 78 
Southern Hills12 10 24 21 
Explorer11 14 11 
Gray Oak Pipeline, LLC26 14 47 19 
Paradigm6 11 
Phillips 66 Partners Terminal1 (1)1 (1)
South Texas Gateway Terminal5 9 
STACK0 1 
Total equity in earnings of affiliates$142 104 266 240 


10

Liberty
Liberty was a joint venture formed to develop and construct the Liberty Pipeline system. In the first quarter of 2021, we decided to exit the Liberty Pipeline project, which had previously been deferred due to the challenging business environment created by the COVID-19 pandemic. As a result, we recorded a $198 million impairment to reduce the book value of our investment in Liberty at March 31, 2021, to our share of the estimated fair value of the joint venture’s pipeline assets and net working capital. The impairment is included in the “Impairments” line item on our consolidated statement of income. This valuation resulted in a Level 3 nonrecurring fair value measurement.

In April 2021, we transferred our 50% ownership interest in Liberty to our co-venturer for cash and certain pipeline assets with a value that approximated our book value of $46 million at March 31, 2021.

Dakota Access, LLC (Dakota Access) and Energy Transfer Crude Oil Company, LLC (ETCO)
In 2020, the trial court presiding over litigation regarding the Dakota Access Pipeline ordered the U.S. Army Corps of Engineers (USACE) to prepare an Environmental Impact Statement (EIS) relating to an easement under Lake Oahe in North Dakota and later vacated the easement. Although the easement has been vacated, the USACE has indicated that it will not take action to stop pipeline operations while it proceeds with the EIS, which is expected to be completed in 2022. In May 2021, the court denied a request for an injunction to shut down the pipeline while the EIS is being prepared and in June 2021, dismissed the litigation. It is possible that the litigation could be reopened or new litigation challenging the EIS, once completed, could be filed.

Dakota Access and ETCO have guaranteed repayment of $2.5 billion aggregate principal amount of senior unsecured notes issued by a wholly owned subsidiary of Dakota Access. 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 in certain circumstances relating to the litigation described above. At June 30, 2021, our share of the maximum potential equity contributions under the CECU was approximately $631 million.

If the pipeline is required to cease operations, and should Dakota Access and ETCO not have sufficient funds to pay ongoing expenses, we also could be required to support our share of the ongoing expenses, including scheduled interest payments on the notes of approximately $25 million annually, in addition to the potential obligations under the CECU.

Summarized financial information for 100% of Dakota Access is as follows:

Millions of Dollars
Three Months Ended
June 30
Six Months Ended
June 30
2021 2020 2021 2020 
Revenues$198 169 413 427 
Income before income taxes125 94 267 280 
Net income125 94 267 280 


11

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. In 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. We have an effective ownership interest of 42.25% in Gray Oak Pipeline, LLC, after considering our co-venturer’s 35% interest in the consolidated holding company.


Note 5—Net Income Per Limited Partner Unit

We calculate net income attributable to the Partnership per limited partner unit by dividing the limited partners’ interest in net income by the weighted-average number of common units outstanding for the period. After considering the period’s cash distributions declared, the remaining undistributed earnings or excess distributions declared over earnings, if any, are allocated to participating securities in accordance with the contractual terms of our partnership agreement and as prescribed under the two-class method for those periods in which we have participating securities. The earnings amount allocated to the limited partner common unitholders is then adjusted for any premiums paid to repurchase preferred units. Our preferred units became participating securities effective October 1, 2020. See Note 9—Equity for additional information on our preferred units.

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 1-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 declared which would not have been paid after conversion. Any potentially dilutive securities are excluded from the diluted earnings per unit computation if the effect of including such securities would be anti-dilutive.

Millions of Dollars
Three Months Ended
June 30
Six Months Ended
June 30
2021 2020 2021 2020 
Net income attributable to the Partnership$225 255 207 481 
Less:
Limited partners’ distributions declared on preferred units*12 24 19 
Limited partners’ distributions declared on common units*199 200 399 399 
Distributions less than (more than) net income attributable to the Partnership$14 46 (216)63 
*Distributions declared are attributable to the indicated periods.

12

Limited
Partners’
Common
Units
Limited
Partners’
Preferred
Units
Total
Three Months Ended June 30, 2021
Net income attributable to the Partnership (millions):
Distributions declared$199 12 211 
Distributions less than net income attributable to the Partnership14 0 14 
Net income attributable to the Partnership213 12 225 
Premium paid for the repurchase of preferred units(4)
Net income attributable to the Partnership—basic209 
Dilutive effect of preferred units0 
Net income attributable to the Partnership—diluted$209 
Weighted-average units outstanding—basic228,340,146 
Dilutive effect of preferred units0 
Weighted-average units outstanding—diluted228,340,146 
Net income attributable to the Partnership per limited partner unit—basic (dollars)
$0.91 
Net income attributable to the Partnership per limited partner unit—diluted (dollars)
0.91 


Limited
Partners’
Common
Units
Limited
Partners’
Preferred
Units
Total
Three Months Ended June 30, 2020
Net income attributable to the Partnership (millions):
Distributions declared$200 209 
Distributions less than net income attributable to the Partnership46 46 
Net income attributable to the Partnership—basic246 255 
Dilutive effect of preferred units
Net income attributable to the Partnership—diluted$255 
Weighted-average units outstanding—basic228,340,146 
Dilutive effect of preferred units13,819,791 
Weighted-average units outstanding—diluted242,159,937 
Net income attributable to the Partnership per limited partner unit—basic (dollars)
$1.07 
Net income attributable to the Partnership per limited partner unit—diluted (dollars)
1.05 


13

Limited
Partners’
Common
Units
Limited
Partners’
Preferred
Units
Total
Six Months Ended June 30, 2021
Net income attributable to the Partnership (millions):
Distributions declared$399 24 423 
Distributions more than net income attributable to the Partnership(216)0 (216)
Net income attributable to the Partnership183 24 207 
Premium paid for the repurchase of preferred units(4)
Net income attributable to the Partnership—basic179 
Dilutive effect of preferred units0 
Net income attributable to the Partnership—diluted$179 
Weighted-average units outstanding—basic228,340,146 
Dilutive effect of preferred units0 
Weighted-average units outstanding—diluted228,340,146 
Net income attributable to the Partnership per limited partner unit—basic (dollars)
$0.78 
Net income attributable to the Partnership per limited partner unit—diluted (dollars)
0.78 


Limited
Partners’
Common
Units
Limited
Partners’
Preferred
Units
Total
Six Months Ended June 30, 2020
Net income attributable to the Partnership (millions):
Distributions declared$399 19 418 
Distributions less than net income attributable to the Partnership63 63 
Net income attributable to the Partnership—basic462 19 481 
Dilutive effect of preferred units19 
Net income attributable to the Partnership—diluted$481 
Weighted-average units outstanding—basic228,326,203 
Dilutive effect of preferred units13,819,791 
Weighted-average units outstanding—diluted242,145,994 
Net income attributable to the Partnership per limited partner unit—basic (dollars)
$2.02 
Net income attributable to the Partnership per limited partner unit—diluted (dollars)
1.99 


On July 20, 2021, the Board of Directors of our General Partner declared a quarterly cash distribution of $0.875 per common unit, which will result in a total distribution of $199 million attributable to the second quarter of 2021. This distribution is payable on August 13, 2021, to common unitholders of record as of July 30, 2021.

14

Beginning with the distribution to preferred unitholders attributable to the fourth quarter of 2020, the preferred unitholders at the record date are entitled to receive cumulative quarterly distributions equal to the greater of $0.678375 per unit, or the per-unit distribution amount paid to the common unitholders. Preferred unitholders will receive $12 million of distributions attributable to the second quarter of 2021. This distribution is payable August 13, 2021, to preferred unitholders of record as of July 30, 2021.


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
2021
December 31
2020
Land$19 19 
Buildings and improvements117 115 
Pipelines and related assets*
1,539 1,518 
Terminals and related assets*
851 847 
Rail racks and related assets*
137 137 
Processing and related assets*
1,064 1,063 
Caverns and related assets*
733 732 
Construction-in-progress445 394 
Gross PP&E4,905 4,825 
Accumulated depreciation(1,252)(1,186)
Net PP&E$3,653 3,639 
*Assets for which we are the lessor.


Note 7—Debt
Millions of Dollars
June 30
2021
December 31
2020
2.450% Senior Notes due December 2024$300 300 
3.605% Senior Notes due February 2025500 500 
3.550% Senior Notes due October 2026500 500 
3.750% Senior Notes due March 2028500 500 
3.150% Senior Notes due December 2029600 600 
4.680% Senior Notes due February 2045450 450 
4.900% Senior Notes due October 2046625 625 
Tax-exempt bonds due April 2021 at weighted-average rate of 0.360%0 50 
Term loan due April 2022 at rate of 0.955%450 
Revolving credit facility borrowings due July 2021 at rate of 1.350% at June 30, 2021 and weighted-average rate of 1.397% at December 31, 202015 415 
Debt at face value3,940 3,940 
Net unamortized discounts and debt issuance costs(30)(31)
Total debt3,910 3,909 
Short-term debt(465)(465)
Long-term debt$3,445 3,444 
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The fair value of our fixed-rate and floating-rate debt is estimated based on observable market prices and is classified as Level 2 of the fair value hierarchy. The fair value of our fixed-rate debt was $3,827 million and $3,752 million at June 30, 2021, and December 31, 2020, respectively. The fair value of our floating-rate debt approximated carrying value of $465 million at June 30, 2021 and December 31, 2020.

At June 30, 2021, and December 31, 2020, borrowings of $15 million and $415 million, respectively, were outstanding under our $750 million revolving credit facility. At both June 30, 2021, and December 31, 2020, $1 million in letters of credit had been issued that were supported by this facility.

Term Loan Agreement
On April 6, 2021, we entered into a $450 million term loan agreement and borrowed the full amount. The term loan agreement has a maturity date of April 5, 2022, and the outstanding borrowings can be repaid at any time and from time to time, in whole or in part, without premium or penalty. Borrowings bear interest at a floating rate based on either a Eurodollar rate or a reference rate, plus a margin of 0.875%. Proceeds were primarily used to repay amounts borrowed under our $750 million revolving credit facility.

Debt Repayment
On April 1, 2021, we repaid the 2 remaining $25 million tranches of tax-exempt bonds due April 2021, totaling $50 million.


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 uncertain.

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. At June 30, 2021, and December 31, 2020, our total environmental accruals were not material.

In the future, we may be involved in additional environmental assessments, cleanups and proceedings.
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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, 2021, and December 31, 2020, 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.


Note 9—Equity

On June 29, 2021, we repurchased 368,528 of the outstanding Series A Perpetual Convertible Preferred Units with an aggregate carrying value of $20 million for $24 million in cash, or $65.124 per unit. Upon the repurchase, these preferred units were canceled and are no longer outstanding. At June 30, 2021, there were 13,451,263 preferred units outstanding.

Beginning with the distribution to preferred unitholders attributable to the fourth quarter of 2020, the preferred unitholders at the record date are entitled to receive cumulative quarterly distributions equal to the greater of $0.678375 per unit, or the per-unit distribution amount paid to the 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 1-for-one basis, at any time, in full or in part, subject to minimum conversion amounts and conditions.


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.

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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 costs and expenses were:

Millions of Dollars
Three Months Ended
June 30
Six Months Ended
June 30
2021 2020 2021 2020 
Operating and maintenance expenses$47 42 105 90 
General and administrative expenses16 21 31 38 

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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
2021
December 31
2020
Prepaid expenses and other current assets$87
Other assets4647
Deferred revenues3427
Other current liabilities11
Other liabilities6264


Equity Affiliate Arrangements
In March 2019, we and our co-venturers in Dakota Access provided a CECU in conjunction with a senior unsecured notes offering. See Note 4—Equity Investments, for additional information.


Note 11—Cash Flow Information

Capital Expenditures and Investments
Our capital expenditures and investments consisted of:
Millions of Dollars
Six Months Ended
June 30
2021 2020 
Cash capital expenditures and investments$141 601 
Change in capital expenditure accruals(22)10 
Total capital expenditures and investments$119 611 


Distributions from Equity Affiliates
Distributions received from our equity affiliates are classified on our consolidated statement of cash flows pursuant to the cumulative earnings approach. Under this approach, a distribution received from an equity affiliate is considered a return on investment and is classified as an operating cash inflow unless cumulative distributions received from the equity affiliate exceed cumulative equity in earnings. If cumulative distributions from an equity affiliate exceed cumulative equity in earnings, the excess is considered a return of investment and is classified as an investing cash inflow on our consolidated statement of cash flows.
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Item 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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.

Management’s Discussion and Analysis is the Partnership’s analysis of its financial performance, financial condition, and of significant trends that may affect future performance. It should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this report. It contains forward-looking statements including, without limitation, statements relating to the Partnership’s plans, strategies, objectives, expectations and intentions. The words “anticipate,” “estimate,” “believe,” “budget,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” “will,” “would,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” and similar expressions normally identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. The Partnership does not undertake to update, revise or correct any of the forward-looking information unless required to do so under the federal securities laws. Readers are cautioned that such forward-looking statements should be read in conjunction with the Partnership’s disclosures under the heading: “CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS.”


EXECUTIVE OVERVIEW AND BUSINESS ENVIRONMENT

Partnership Overview
We are a 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.

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.

Our common units trade on the New York Stock Exchange under the symbol PSXP.

How We Evaluate Our Operations
Our management uses a variety of financial and operating metrics to analyze our performance, including: (1) volumes handled; (2) operating and maintenance expenses; (3) net income before net interest expense, income taxes, depreciation and amortization (EBITDA); (4) adjusted EBITDA; and (5) distributable cash flow.

Volumes Handled
The amount of revenue we generate primarily depends on the volumes of crude oil, refined petroleum products and NGL that we handle in our pipeline, terminal, rail rack, processing, storage and fractionator systems. In addition, our equity affiliates generate revenue from transporting and terminaling crude oil, refined petroleum products and NGL. These volumes are primarily affected by the supply of, and demand for, crude oil, refined petroleum products and NGL in the markets served directly or indirectly by our assets, as well as the operational status of the refineries served by our assets. Phillips 66 has committed to minimum throughput volumes under many of our commercial agreements.

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Operating and Maintenance Expenses
Our management seeks to maximize the profitability of our operations by effectively managing operating and maintenance expenses. These expenses primarily consist of labor expenses (including contractor services), utility costs, and repair and maintenance expenses. Operating and maintenance expenses generally remain relatively stable across broad ranges of throughput volumes but can fluctuate from period to period depending on the mix of activities, particularly maintenance activities, performed during the period. Our processing assets are periodically subject to major maintenance, or turnaround activities, which can significantly increase operating and maintenance expenses in a given year. Although we seek to manage our maintenance expenditures on our facilities to avoid significant variability in our quarterly cash flows, we balance this approach with our high standards of safety and environmental stewardship, such that critical maintenance is regularly performed.

Our operating and maintenance expenses are also affected by volumetric gains/losses resulting from variances in meter readings and other measurement methods, as well as volume fluctuations due to pressure and temperature changes. Under certain commercial agreements with Phillips 66, the value of any crude oil, refined petroleum product and NGL volumetric gains and losses are determined by reference to the monthly average reference price for the applicable commodity. Any gains/losses under these provisions decrease or increase, respectively, our operating and maintenance expenses in the period in which they are realized. These contractual volumetric gain/loss provisions could increase variability in our operating and maintenance expenses.

EBITDA, Adjusted EBITDA and Distributable Cash Flow
We define EBITDA as net income plus net interest expense, income taxes, depreciation and amortization.

Adjusted EBITDA is EBITDA attributable to the Partnership after deducting the adjusted EBITDA attributable to noncontrolling interest, further adjusted for:

The proportional share of equity affiliates’ net interest expense, income taxes, depreciation and amortization, and impairments.

Transaction costs associated with acquisitions.

Certain other noncash items, including gains and losses on asset sales and asset impairments.

Distributable cash flow is defined as adjusted EBITDA less (i) equity affiliate distributions less than proportional adjusted EBITDA, (ii) maintenance capital expenditures, (iii) net interest expense, (iv) income taxes paid and (v) preferred unit distributions, plus adjustments for deferred revenue impacts.

EBITDA, adjusted EBITDA, and distributable cash flow are not presentations made in accordance with generally accepted accounting principles in the United States (GAAP). EBITDA, adjusted EBITDA and distributable cash flow are non-GAAP supplemental financial measures that management believes external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may find useful to assess:

Our operating performance as compared to other publicly traded partnerships in the midstream energy industry, without regard to historical cost basis or, in the case of EBITDA and adjusted EBITDA, financing methods.

The ability of our business to generate sufficient cash to support our decision to make distributions to our unitholders.

Our ability to incur and service debt and fund capital expenditures.

The viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities.

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The GAAP performance measure most directly comparable to EBITDA and adjusted EBITDA is net income. The GAAP liquidity measure most directly comparable to EBITDA and distributable cash flow is net cash provided by operating activities. These non-GAAP financial measures should not be considered alternatives to GAAP net income or net cash provided by operating activities. They have important limitations as analytical tools because they exclude some items that affect net income and net cash provided by operating activities. Additionally, because EBITDA, adjusted EBITDA, and distributable cash flow may be defined differently by other companies in our industry, our definition of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.


Business Environment
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, and therefore 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.

Our throughput volumes primarily depend on the volume of crude oil processed and refined petroleum products produced at Phillips 66’s owned or operated refineries with which our assets are integrated. These volumes are primarily dependent on Phillips 66’s refining margins and maintenance schedules. Refining margins depend on the price of crude oil or other feedstocks and the price of refined petroleum products. These prices are affected by numerous factors beyond our or Phillips 66’s control, including the domestic and global supply of and demand for crude oil and refined petroleum products. Throughput volumes of our equity affiliates primarily depend on upstream drilling activities, refinery performance and product supply and demand.

The Coronavirus Disease 2019 (COVID-19) pandemic continues to impact global economic activity. Our results in the second quarter of 2021 reflect the gradual recovery of demand for refined petroleum products following the administration of COVID-19 vaccines and the easing of pandemic restrictions since the beginning of 2021. However, the adverse impacts of the COVID-19 pandemic may continue in the near term, and the depth and duration of the resulting economic consequences remain uncertain. We continuously monitor our asset and investment portfolio for impairments in this challenging business environment.

While we believe we and the majority of our joint ventures have substantially mitigated our indirect exposure to commodity price fluctuations through the minimum volume commitments included in our commercial agreements, our ability to execute our strategy will depend, in part, on the availability of attractively priced crude oil in the areas served by our crude oil pipelines and rail racks, demand for refined petroleum products in the markets served by our refined petroleum product pipelines and terminals, and the general demand for midstream services, including NGL transportation and fractionation.


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RESULTS OF OPERATIONS

Unless otherwise indicated, discussion of results for the three and six months ended June 30, 2021, is based on a comparison with the corresponding period of 2020.

Millions of Dollars
Three Months Ended
June 30
Six Months Ended
June 30
2021 2020 2021 2020 
Revenues and Other Income
Operating revenues—related parties$274 236 519 494 
Operating revenues—third parties6 13 14 
Equity in earnings of affiliates142 104 266 240 
Gain from equity interest transfer 84  84 
Other income1 1 
Total revenues and other income423 430 799 834 
Costs and Expenses
Operating and maintenance expenses93 84 188 172 
Depreciation34 31 68 61 
Impairments — 198 — 
General and administrative expenses18 17 35 34 
Taxes other than income taxes11 10 21 21 
Interest and debt expense32 28 65 57 
Other expenses  
Total costs and expenses188 175 575 352 
Income before income taxes235 255 224 482 
Income tax expense1 — 1 
Net Income234 255 223 481 
Less: Net income attributable to noncontrolling interest9 — 16 — 
Net Income Attributable to the Partnership225 255 207 481 
Less: Preferred unitholders’ interest in net income attributable to the Partnership12 24 19 
Limited Partners’ Interest in Net Income Attributable to the Partnership$213 246 183 462 
Net Cash Provided by Operating Activities$286 215 513 489 
Adjusted EBITDA$337 269 626 590 
Distributable Cash Flow$267 218 500 487 
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Three Months Ended
June 30
Six Months Ended
June 30
2021 2020 2021 2020 
Wholly Owned Operating Data
Pipelines
Pipeline revenues (millions of dollars)
$121 97 225 208 
Pipeline volumes(1) (thousands of barrels daily)
Crude oil957 806 877 873 
Refined petroleum products and NGL1,029 825 920 846 
Total1,986 1,631 1,797 1,719 
Average pipeline revenue per barrel (dollars)
$0.66 0.65 0.68 0.66 
Terminals
Terminal revenues (millions of dollars)
$43 33 82 76 
Terminal throughput (thousands of barrels daily)
Crude oil(2)
397 380 386 420 
Refined petroleum products827 690 743 719 
Total1,224 1,070 1,129 1,139 
Average terminaling revenue per barrel (dollars)
$0.38 0.33 0.39 0.36 
Storage, processing and other revenues (millions of
   dollars)
$116 111 225 224 
Total Operating Revenues (millions of dollars)
$280 241 532 508 
Joint Venture Operating Data(3)
Crude oil, refined petroleum products and NGL (thousands
   of barrels daily)
1,327 942 1,190 890 
(1) Represents the sum of volumes transported through each separately tariffed pipeline segment.
(2) Bayway and Ferndale rail rack volumes included in crude oil terminals.
(3) Proportional share of total pipeline and terminal volumes of joint ventures consistent with recognized equity in earnings of affiliates.


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The following tables present reconciliations of EBITDA and adjusted EBITDA to net income, and EBITDA and distributable cash flow to net cash provided by operating activities, the most directly comparable GAAP financial measures, for each of the periods indicated.
 
Millions of Dollars
Three Months Ended
June 30
Six Months Ended
June 30
2021 2020 2021 2020 
Reconciliation to Net Income Attributable to the
   Partnership
Net Income Attributable to the Partnership$225 255 207 481 
Plus:
Net income attributable to noncontrolling interest9 — 16 — 
Net Income234 255 223 481 
Plus:
Depreciation34 31 68 61 
Net interest expense32 29 65 57 
Income tax expense1 — 1 
EBITDA301 315 357 600 
Plus:
Proportional share of equity affiliates’ net interest, taxes, depreciation and amortization, and impairments51 38 100 73 
Expenses indemnified or prefunded by Phillips 661 — 1 — 
Transaction costs associated with acquisitions —  
Impairments — 198 — 
Less:
Gain from equity interest transfer 84  84 
Adjusted EBITDA attributable to noncontrolling interest16 — 30 — 
Adjusted EBITDA337 269 626 590 
Plus:
Deferred revenue impacts*†
(4)5 
Less:
Equity affiliate distributions less than (more than) proportional adjusted EBITDA3 (10)17 (9)
Maintenance capital expenditures
17 28 23 43 
Net interest expense32 29 65 57 
Preferred unit distributions12 24 19 
Income taxes paid2 — 2 — 
Distributable Cash Flow$267 218 500 487 
*Difference between cash receipts and revenue recognition.
Excludes Merey Sweeny capital reimbursements and turnaround impacts.
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Millions of Dollars
Three Months Ended
June 30
Six Months Ended
June 30
2021 2020 2021 2020 
Reconciliation to Net Cash Provided by Operating
   Activities
Net Cash Provided by Operating Activities$286 215513 489
Plus:
Net interest expense32 29 65 57 
Income tax expense1 — 1 
Changes in working capital(11)(3)(22)(15)
Undistributed equity earnings(7)(5)(2)(9)
Impairments — (198)— 
Gain from equity interest transfer 84  84 
Deferred revenues and other liabilities2 2 
Other(2)(7)(2)(9)
EBITDA301 315 357 600 
Plus:
Proportional share of equity affiliates’ net interest, taxes, depreciation and amortization, and impairments51 38 100 73 
Expenses indemnified or prefunded by Phillips 661 — 1 — 
Transaction costs associated with acquisitions —  
Impairments — 198  
Less:
Gain from equity interest transfer 84  84 
Adjusted EBITDA attributable to noncontrolling interest16 — 30 — 
Adjusted EBITDA337 269 626 590 
Plus:
Deferred revenue impacts*†
(4)5 
Less:
Equity affiliate distributions less than (more than) proportional adjusted EBITDA3 (10)17 (9)
Maintenance capital expenditures
17 28 23 43 
Net interest expense32 29 65 57 
Preferred unit distributions12 24 19 
Income taxes paid2 — 2 — 
Distributable Cash Flow$267 218 500 487 
*Difference between cash receipts and revenue recognition.
Excludes Merey Sweeny capital reimbursements and turnaround impacts.


Statement of Income Analysis

Operating revenues increased $39 million, or 16%, and increased $24 million, or 5%, in the second quarter and six-month period of 2021, respectively. The increases in both periods were primarily attributable to increased volumes resulting from market demand. Additionally, the increase in the six-month period was partially offset by the effects of winter storms impacting the Central and Gulf Coast regions in the first quarter of 2021.

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Equity in earnings of affiliates increased $38 million, or 37%, and increased $26 million, or 11%, in the second quarter and six-month period of 2021, respectively. The increases in both periods were primarily due to higher volumes, including volumes from Gray Oak Pipeline, LLC, which commenced full operations during the second quarter of 2020, and South Texas Gateway Terminal LLC (South Texas Gateway), which commenced full operations in the first quarter of 2021. The increases in both periods were partially offset by a decrease in earnings from DCP Sand Hills Pipeline, LLC. See Note 4—Equity Investments, in the Notes to Consolidated Financial Statements, for additional information.

Gain on equity interest transfer reflects the second-quarter 2020 gain recognition related to a co-venturer’s acquisition of a 35% interest in the consolidated holding company that owns an interest in Gray Oak Pipeline, LLC. See Note 4—Equity Investments, in the Notes to Consolidated Financial Statements, for additional information.

Operating and maintenance expenses increased $9 million, or 11%, and increased $16 million, or 9%, in the second quarter and six-month period of 2021, respectively. The increases in both periods were primarily due to higher utility costs.

Interest and debt expense increased $4 million, or 14%, and increased $8 million, or 14%, in the second quarter and six-month period of 2021, respectively. The increases in both periods were due to lower capitalized interest and increased debt.

Impairments reflects the first-quarter 2021 impairment of our investment in Liberty Pipeline LLC (Liberty). See Note 4—Equity Investments, in the Notes to Consolidated Financial Statements, for additional information.

CAPITAL RESOURCES AND LIQUIDITY
Significant Sources of Capital
Our sources of liquidity include cash generated from operations, distributions from our equity affiliates, borrowings from related parties and under our revolving credit facility, issuances of additional debt and equity securities, and funding from joint venture partners. We believe that cash generated from these sources will be sufficient to meet our short-term working capital requirements, long-term capital expenditure requirements and our quarterly cash distributions.

Operating Activities
We generated $513 million in cash from operations during the first six months of 2021, an increase of $24 million compared with the corresponding period of 2020. The increase was primarily driven by higher operating revenues and higher operating distributions from equity affiliates.

Equity Affiliate Distributions
Our operating and investing cash flows are impacted by distribution decisions made by our equity affiliates. During the first six months of 2021, we received aggregate distributions from our equity affiliates of $345 million, compared with $335 million during the same period of 2020. We cannot control the amount or timing of future distributions from equity affiliates; therefore, future distributions are not assured.

Revolving Credit Facility
At June 30, 2021, and December 31, 2020, borrowings of $15 million and $415 million, respectively, were outstanding under our $750 million revolving credit facility. At both June 30, 2021, and December 31, 2020, $1 million in letters of credit had been issued that were supported by this facility.

Term Loan Agreement
On April 6, 2021, we entered into a $450 million term loan agreement and borrowed the full amount. The term loan agreement has a maturity date of April 5, 2022, and the outstanding borrowings can be repaid at any time and from time to time, in whole or in part, without premium or penalty. Borrowings bear interest at a floating rate based on either a Eurodollar rate or a reference rate, plus a margin of 0.875%. Proceeds were primarily used to repay amounts borrowed under our $750 million revolving credit facility.



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Transfer of Equity Interest
In April 2021, we transferred our 50% ownership interest in Liberty to our co-venturer for cash and certain pipeline assets with a value that approximated our book value of $46 million at March 31, 2021. See Note 4—Equity Investments, in the Notes to Consolidated Financial Statements, for additional information.

ATM Program
At June 30, 2021, we have $248 million of available capacity under our $250 million continuous offering of common units, or at-the-market (ATM) program. We suspended issuances under the ATM program in the first quarter of 2020 due to low common unit prices. We did not issue any common units under the ATM program during the three and six months ended June 30, 2021.


Off-Balance Sheet Arrangements

Dakota Access, LLC (Dakota Access) and Energy Transfer Crude Oil Company, LLC (ETCO)
In 2020, the trial court presiding over litigation regarding the Dakota Access Pipeline ordered the U.S. Army Corps of Engineers (USACE) to prepare an Environmental Impact Statement (EIS) relating to an easement under Lake Oahe in North Dakota and later vacated the easement. Although the easement has been vacated, the USACE has indicated that it will not take action to stop pipeline operations while it proceeds with the EIS, which is expected to be completed in 2022. In May 2021, the court denied a request for an injunction to shut down the pipeline while the EIS is being prepared and in June 2021, dismissed the litigation. It is possible that the litigation could be reopened or new litigation challenging the EIS, once completed, could be filed.

Dakota Access and ETCO have guaranteed repayment of $2.5 billion aggregate principal amount of senior unsecured notes issued by a wholly owned subsidiary of Dakota Access. 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 in certain circumstances relating to the litigation described above. At June 30, 2021, our share of the maximum potential equity contributions under the CECU was approximately $631 million.

If the pipeline is required to cease operations, and should Dakota Access and ETCO not have sufficient funds to pay ongoing expenses, we also could be required to support our share of the ongoing expenses, including scheduled interest payments on the notes of approximately $25 million annually, in addition to the potential obligations under the CECU. If we are required to perform under the CECU, we would expect to fund such performance with cash, capacity available under our revolving credit facility, third-party debt financing, and/or sponsor loans from Phillips 66.


Capital Requirements

Capital Expenditures and Investments
Our operations are capital intensive and require investments to expand, upgrade, maintain or enhance existing operations and to meet environmental and operational requirements of our wholly owned and joint venture entities. Our capital requirements consist of maintenance and expansion capital expenditures, as well as contributions to our joint ventures. Maintenance capital expenditures are those made to replace partially or fully depreciated assets, to maintain the existing operating capacity of our assets and to extend their useful lives, or to maintain existing system volumes and related cash flows. In contrast, expansion capital expenditures are those made to expand and upgrade our systems and facilities and to construct or acquire new systems or facilities to grow our business, including contributions to joint ventures that are using the contributed funds for such purposes.

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Our capital expenditures and investments represent the total spending for our capital requirements. Our adjusted capital spending is a non-GAAP financial measure that demonstrates our net share of capital spending, and reflects an adjustment for the portion of consolidated capital spending funded by certain joint venture partners. Additionally, the disaggregation of adjusted capital spending between expansion and maintenance is not a distinction recognized under GAAP. We disaggregate adjusted capital spending because our partnership agreement requires that we treat expansion and maintenance capital differently for operating and capital surplus determinations. Further, we generally fund expansion capital spending with both operating and financing cash flows and fund maintenance capital spending with operating cash flows.

Our capital expenditures and investments were:

Millions of Dollars
Six Months Ended
June 30
2021 2020 
Capital Expenditures and Investments
Capital expenditures and investments$119 611 
Capital expenditures and investments funded by certain joint venture partners (61)
Adjusted Capital Spending$119 550 
Expansion$96 507 
Maintenance23 43 


Our capital expenditures and investments for the first six months of 2021 were primarily associated with the following activities:

Construction activities related to the C2G Pipeline, a new 16-inch ethane pipeline that connects our Clemens Caverns storage facility to petrochemical facilities in Gregory, Texas, near Corpus Christi, Texas.

Contributions to Dakota Access for a pipeline optimization project.

Contributions to complete the South Texas Gateway Terminal development activities.

Spending associated with other return, reliability and maintenance projects.


Cash Distributions
On July 20, 2021, the Board of Directors of our General Partner declared a quarterly cash distribution of $0.875 per common unit, which will result in a total distribution of $199 million attributable to the second quarter of 2021. This distribution is payable on August 13, 2021, to common unitholders of record as of July 30, 2021.

Beginning with the distribution to preferred unitholders attributable to the fourth quarter of 2020, the preferred unitholders at the record date are entitled to receive cumulative quarterly distributions equal to the greater of $0.678375 per unit, or the per-unit distribution amount paid to the common unitholders. Preferred unitholders will receive $12 million of distributions attributable to the second quarter of 2021. This distribution is payable August 13, 2021, to preferred unitholders of record as of July 30, 2021.

Repurchase of Preferred Units
On June 29, 2021, we repurchased 368,528 of the outstanding Series A Perpetual Convertible Preferred Units with an aggregate carrying value of $20 million for $24 million in cash, or $65.124 per unit. Upon the repurchase, these preferred units were canceled and are no longer outstanding. At June 30, 2021, there were 13,451,263 preferred units outstanding.

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Debt Repayment
On April 1, 2021, we repaid the two remaining $25 million tranches of tax-exempt bonds due April 2021, totaling $50 million.


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 uncertain.

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.

Regulatory Matters
Our interstate common carrier crude oil and refined petroleum products pipeline operations are subject to rate regulation by the Federal Energy Regulatory Commission under the Interstate Commerce Act and Energy Policy Act of 1992, and certain of our pipeline systems providing intrastate service are subject to rate regulation by applicable state authorities under their respective laws and regulations. Our pipeline, rail rack and terminal operations are also subject to safety regulations adopted by the Department of Transportation, as well as to state regulations.

Legal and Tax Matters
Under our amended omnibus agreement, Phillips 66 provides certain services for our benefit, including legal and tax support services, and we pay an operational and administrative support fee for these services. Phillips 66’s legal and tax organizations apply their knowledge, experience and professional judgment to the specific characteristics of our cases and uncertain tax positions. Phillips 66’s legal organization employs 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 recommends if adjustment of existing accruals, or establishment of new accruals, is required. As of June 30, 2021, and December 31, 2020, we did not have any material accrued contingent liabilities associated with litigation matters.

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Environmental
We are subject to extensive federal, state and local environmental laws and regulations. These requirements, which frequently change, regulate the discharge of materials into the environment or otherwise relate to protection of the environment. Compliance with these laws and regulations may require us to remediate environmental damage from any discharge of petroleum or chemical substances from our facilities or require us to install additional pollution control equipment at or on our facilities. Our failure to comply with these or any other environmental or safety-related regulations could result in the assessment of administrative, civil, or criminal penalties, the imposition of investigatory and remedial liabilities, and the issuance of governmental orders that may subject us to additional operational constraints. Future expenditures may be required to comply with the Federal Clean Air Act and other federal, state and local requirements in respect of our various sites, including our pipelines and storage assets. The impact of legislative and regulatory developments, if enacted or adopted, could result in increased compliance costs and additional operating restrictions on our business, each of which could have an adverse impact on our financial position, results of operations and liquidity.

As with all costs, if these expenditures are not ultimately recovered in the tariffs and other fees we receive for our services, our operating results will be adversely affected. We believe that substantially all similarly situated parties and holders of comparable assets must comply with similar environmental laws and regulations. However, the specific impact on each may vary depending on a number of factors, including, but not limited to, the age and location of its operating facilities.

We accrue for environmental remediation activities when the responsibility to remediate is probable and the amount of associated costs can be reasonably estimated. As environmental remediation matters proceed toward ultimate resolution or as additional remediation obligations arise, charges in excess of those previously accrued may be required. New or expanded environmental requirements, which could increase our environmental costs, may arise in the future. We believe we are in substantial compliance with all legal obligations regarding the environment and have established the environmental accruals that are currently required; however, it is not possible to predict all of the ultimate costs of compliance, including remediation costs that may be incurred and penalties that may be imposed, because not all of the costs are fixed or presently determinable (even under existing legislation) and the costs may be affected by future legislation or regulations.

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 non-cash expenses and associated non-cash capital contributions from our General Partner, as these are considered liabilities paid for by a principal unitholder.


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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report includes forward-looking statements. You can normally identify our forward-looking statements by the words “anticipate,” “estimate,” “believe,” “budget,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” “will,” “would,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” and similar expressions, although the absence of these words does not mean that statement is not forward-looking.

We based the forward-looking statements on our current expectations, estimates and projections about us, our operations, the operations of our joint ventures and the entities in which we own equity interests, as well as the industries in which we and they operate in general. We caution you these statements are not guarantees of future performance as they involve assumptions that, while made in good faith, may prove to be incorrect, and involve risks and uncertainties we cannot predict. In addition, we based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecast in the forward-looking statements. Any differences could result from a variety of factors, including the following:

The continuing effects of the COVID-19 pandemic and its negative impact on the demand for crude oil and refined petroleum products, as well as the extent and duration of recovery of economies and the demand for crude oil and refined petroleum products after the pandemic subsides.
Reductions in the volume of crude oil, refined petroleum products and NGL we or our equity affiliates transport, fractionate, process, terminal and store.
The continued ability of Phillips 66 to satisfy its obligations under our commercial and other agreements.
Fluctuations in the prices and demand for crude oil, refined petroleum products and NGL, including as a result of actions taken by OPEC and other countries impacting supply and demand and, correspondingly, commodity prices.
Changes in governmental policies relating to crude oil, refined petroleum products or NGL pricing, regulation, taxation, or exports.
Potential liabilities associated with the risks and operational hazards inherent in transporting, fractionating, processing, terminaling and storing crude oil, refined petroleum products and NGL.
Curtailment of operations due to severe weather (including as a result of climate change) disruption or natural disasters; riots, strikes, lockouts or other industrial disturbances.
Accidents or other unscheduled shutdowns affecting our pipelines, processing, fractionating, terminaling, and storage facilities or equipment, or those of our equity affiliates, suppliers or customers.
Our, and our equity affiliates’, inability to obtain or maintain permits, in a timely manner, or at all, and the possibility of the revocation or modification of such permits.
The operation, financing and distribution decisions of our joint ventures, which we may not control.
The inability to comply with government regulations or make capital expenditures required to maintain compliance.
The failure to complete construction of announced and future capital projects in a timely manner, cost overruns associated with such projects, and the ability to obtain or maintain permits necessary for such projects.
Costs or liabilities associated with federal, state, and local laws and regulations relating to environmental protection and safety, including spills, releases and pipeline integrity.
Failure of information technology systems due to various causes, including unauthorized access or attack.
Changes to the tariff rates with respect to volumes transported through regulated assets, which rates are subject to review and possible adjustment by federal and state regulators.
Changes in revenues we realize under the loss allowance provisions of our regulated tariffs resulting from changes in underlying commodity prices.
Costs associated with compliance with evolving environmental laws and regulations on climate change.
Costs associated with compliance with safety regulations, including pipeline integrity management program testing and related repairs.
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Changes in the cost or availability of third-party vessels, pipelines, railcars and other means of delivering and transporting crude oil, refined petroleum products and NGL.
General domestic and international economic and political developments including armed hostilities, expropriation of assets, social unrest, insurrections, and other political, economic or diplomatic developments, including those caused by public health issues and outbreaks of diseases and pandemics.
Direct or indirect effects on our business resulting from actual or threatened terrorist incidents or acts of war.
Our ability to comply with the terms of our credit facility, indebtedness and other financing arrangements, which, if accelerated, we may not be able to repay.
Our ability to incur additional indebtedness or our ability to obtain financing on terms that we deem acceptable, including the refinancing of our current obligations; higher interest rates and costs of financing would increase our expenses.
Changes in tax, environmental and other laws and regulations.
The factors generally described in Item 1A. Risk Factors in our 2020 Annual Report on Form 10-K.
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Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our commodity price risk and interest rate risk at June 30, 2021, did not differ materially from that disclosed under Item 7A of our 2020 Annual Report on Form 10-K.


Item 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports we file or submit under the Securities Exchange Act of 1934, as amended (the Act), is recorded, processed, summarized and reported within the time periods specified in U.S. Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our General Partner’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. As of June 30, 2021, our General Partner’s Chairman and Chief Executive Officer and its Vice President and Chief Financial Officer, with the participation of the General Partner’s management, carried out an evaluation, pursuant to Rule 13a-15(b) of the Act, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Act). Based upon that evaluation, our General Partner’s Chairman and Chief Executive Officer and its Vice President and Chief Financial Officer concluded that our disclosure controls and procedures were operating effectively as of June 30, 2021.

There have been no changes in our internal control over financial reporting, as defined in Rule 13a-15(f) of the Act, in the quarterly period ended June 30, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS

Although we may, from time to time, be involved in litigation and claims arising out of our operations in the normal course of business, we are not a party to any reportable litigation or governmental or other proceeding, including those involving governmental authorities under federal, state and local laws regulating the discharge of materials into the environment, that we reasonably believe will be in excess of $300,000 or have a material adverse impact on our consolidated financial position.

Under our amended omnibus agreement, and pursuant to the terms of various agreements under which we acquired assets from Phillips 66, Phillips 66 indemnifies us, or assumes responsibility, for certain liabilities relating to litigation and environmental matters attributable to the ownership or operation of our assets prior to their contribution to us from Phillips 66.

See Note 8—Contingencies, in the Notes to Consolidated Financial Statements, for additional information.


Item 1A.  RISK FACTORS

There were no material changes from the risk factors disclosed in Item 1A of our 2020 Annual Report on Form 10-K.

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Item 6. EXHIBITS
Incorporated by Reference
Exhibit
Number
Exhibit DescriptionFormExhibit NumberFiling DateSEC File No.
8-K10.14/12/2021001-36011
101.INS*Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*Inline XBRL Taxonomy Extension Schema Document.
101.CAL*Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
* Filed herewith.
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 

PHILLIPS 66 PARTNERS LP
By: Phillips 66 Partners GP LLC, its general partner
/s/ Chukwuemeka A. Oyolu
Chukwuemeka A. Oyolu
Vice President and Controller
(Chief Accounting and Duly Authorized Officer)
Date: August 3, 2021
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