mlp-20210331

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 ended			March 31, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from						to


Commission file number:			001-36011

Phillips 66 Partners LP

(Exact name of registrant as specified in its charter)


Delaware						38-3899432
(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 class

Trading Symbol(s)

Name of each exchange on which registered

Common Units, Representing Limited Partner Interests

PSXP

New 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 filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller 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 March 31, 2021.

Table of Contents

PHILLIPS 66 PARTNERS LP

TABLE OF CONTENTS


			Page
Part I – Financial Information			1

Item 1. Financial Statements			1
Consolidated Statement of Income (Loss)			1
Consolidated Statement of Comprehensive Income (Loss)			2
Consolidated Balance Sheet			3
Consolidated Statement of Cash Flows			4
Consolidated Statement of Changes in Equity			5
Notes to Consolidated Financial Statements			6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			19

Item 3. Quantitative and Qualitative Disclosures About Market Risk			33

Item 4. Controls and Procedures			33

Part II – Other Information			34

Item 1. Legal Proceedings			34

Item 1A. Risk Factors			34

Item 6. Exhibits			35

Signatures			36

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS


Consolidated Statement of Income (Loss)			Phillips 66 Partners LP


	Millions of Dollars
	Three Months Ended March 31
	2021		2020
Revenues and Other Income
Operating revenues—related parties	$	245	258
Operating revenues—third parties	7		9
Equity in earnings of affiliates	124		136
Other income	—		1
Total revenues and other income	376		404

Costs and Expenses
Operating and maintenance expenses	95		88
Depreciation	34		30
Impairments	198		—
General and administrative expenses	17		17
Taxes other than income taxes	10		11
Interest and debt expense	33		29
Other expenses	—		2
Total costs and expenses	387		177
Income (loss) before income taxes	(11)		227
Income tax expense	—		1
Net Income (Loss)	(11)		226
Less: Net income attributable to noncontrolling interest	7		—
Net Income (Loss) Attributable to the Partnership	(18)		226
Less: Preferred unitholders’ interest in net income (loss) attributable to the Partnership	12		10
Limited Partners’ Interest in Net Income (Loss) Attributable to the Partnership	$	(30)	216

Net Income (Loss) Attributable to the Partnership Per Limited Partner Unit (dollars)
Common units—basic	$	(0.13)	0.95
Common units—diluted	(0.13)		0.93

Weighted-Average Limited Partner Units Outstanding (thousands)
Common units—basic	228,340		228,312
Common units—diluted	228,340		242,132
See Notes to Consolidated Financial Statements.

Table of Contents


Consolidated Statement of Comprehensive Income (Loss)			Phillips 66 Partners LP


	Millions of Dollars
	Three Months Ended March 31
	2021		2020

Net Income (Loss)	$	(11)	226
Defined benefit plans
Plan sponsored by equity affiliates, net of income taxes	(1)		—
Other comprehensive loss	(1)		—
Comprehensive Income (Loss)	(12)		226
Less: Comprehensive income attributable to noncontrolling interest	7		—
Comprehensive Income (Loss) Attributable to the Partnership	$	(19)	226
See Notes to Consolidated Financial Statements.

Table of Contents


Consolidated Balance Sheet			Phillips 66 Partners LP


	Millions of Dollars
	March 31 2021		December 31 2020
Assets
Cash and cash equivalents	$	3	7
Accounts receivable—related parties	104		103
Accounts receivable—third parties	3		3
Materials and supplies	16		16
Prepaid expenses and other current assets	17		11
Total current assets	143		140
Equity investments	3,029		3,244
Net properties, plants and equipment	3,646		3,639
Goodwill	185		185
Other assets	50		50
Total Assets	$	7,053	7,258

Liabilities
Accounts payable—related parties	$	20	19
Accounts payable—third parties	54		73
Accrued interest	39		35
Deferred revenues	38		27
Short-term debt	500		465
Accrued property and other taxes	12		11
Other current liabilities	3		3
Total current liabilities	666		633
Long-term debt	3,444		3,444
Other liabilities	90		90
Total Liabilities	4,200		4,167

Equity
Preferred unitholders (2021 and 2020—13,819,791 units issued and outstanding)	749		749
Common unitholders—public (2021 and 2020—58,580,009 units issued and outstanding)	2,647		2,706
Common unitholder—Phillips 66 (2021 and 2020—169,760,137 units issued and outstanding)	(828)		(656)
Accumulated other comprehensive loss	(2)		(1)
Total unitholders’ equity	2,566		2,798
Noncontrolling interest	287		293
Total Equity	2,853		3,091
Total Liabilities and Equity	$	7,053	7,258
See Notes to Consolidated Financial Statements.

Table of Contents


Consolidated Statement of Cash Flows			Phillips 66 Partners LP


	Millions of Dollars
	Three Months Ended March 31
	2021		2020
Cash Flows From Operating Activities
Net income (loss)	$	(11)	226
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation	34		30
Impairments	198		—
Undistributed equity earnings	(5)		4
Other	—		2
Working capital adjustments
Accounts receivable	(1)		10

Prepaid expenses and other current assets	(6)		(4)
Accounts payable	2		(3)
Accrued interest	4		4
Deferred revenues	11		3
Other accruals	1		2
Net Cash Provided by Operating Activities	227		274

Cash Flows From Investing Activities
Cash capital expenditures and investments	(78)		(236)
Liberty acquisition	—		(75)
Return of investment from equity affiliates	39		38
Net Cash Used in Investing Activities	(39)		(273)

Cash Flows From Financing Activities
Issuance of debt	450		—
Repayment of debt	(415)		—
Issuance of common units	—		2

Quarterly distributions to preferred unitholders	(12)		(9)
Quarterly distributions to common unitholders—public	(51)		(51)
Quarterly distributions to common unitholder—Phillips 66	(149)		(149)
Net proceeds from equity interest transfer	—		12

Distributions to noncontrolling interest	(13)		—
Other distributions to Phillips 66	(2)		—
Net Cash Used in Financing Activities	(192)		(195)

Net Change in Cash and Cash Equivalents	(4)		(194)
Cash and cash equivalents at beginning of period

SEC Form 10-Q filed by Phillips 66 Partners LP