PHILLIPS 66 PARTNERS LPd18rn0p25nwr6d.cloudfront.net/CIK-0001572910/415b700d... · 2018-02-02 ·...

UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): February 2, 2018

Phillips 66 Partners LP(Exact name of registrant as specified in its charter)

Delaware 001-36011 38-3899432(State or other jurisdiction

of incorporation) (CommissionFile Number)

(I.R.S. EmployerIdentification No.)

2331 CityWest Blvd., Houston, Texas 77042(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (855) 283-9237

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the followingprovisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) orRule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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 orrevised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 2.02 Results of Operations and Financial Condition.

On February 2, 2018 , Phillips 66 Partners LP issued a press release announcing the partnership’s financial and operating results for the quarter endedDecember 31, 2017 . A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference. Additional financial and operatinginformation about the quarter is attached as Exhibit 99.2 hereto and incorporated herein by reference. The information in this report and the exhibits hereto shall not be treated as filed for purposes of the Securities Exchange Act of 1934, as amended.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1 — Press release issued by Phillips 66 Partners LP on February 2, 2018 .

99.2 — Supplemental financial and operating information.

1

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 undersignedhereunto duly authorized.

PHILLIPS 66 PARTNERS LP By: Phillips 66 Partners GP LLC, its general partner

By: /s/ChukwuemekaA.Oyolu

Chukwuemeka A. OyoluVice President and Controller

Dated: February 2, 2018

2

EXHIBIT INDEX

Exhibit No. Description

99.1 Press release issued by Phillips 66 Partners LP on February 2, 2018. 99.2 Supplemental financial and operating information.

3

Phillips 66 Partners Reports Fourth-Quarter Earnings

Exhibit 99.1

Phillips 66 Partners ReportsFourth -Quarter 2017 Earnings

Highlights

Fourth Quarter• Reportedearningsof$162million;adjustedEBITDAof$254million• Increasedquarterlydistribution5percentto$0.678percommonunit• CompletedacquisitionofMereySweeny,L.P.and25percentinterestintheBakkenPipelinein$2.4billiontransaction

Full-Year 2017• Reportedearningsof$461million;adjustedEBITDAof$754million• Increaseddistributionspercommonunitby22percent• Raised$1.9billionfromequityanddebtofferings

HOUSTON,Feb.2,2018–Phillips66PartnersLP(NYSE:PSXP)announcesfourth-quarter2017earningsof$162million,or$0.83perdilutedcommonunit.Cashfromoperationswas$238million,anddistributablecashflowwas$172million.AdjustedEBITDAwas$254millioninthefourthquarter,comparedwith$171millioninthethirdquarter.

“Duringthequarter,weoperatedwellandcompletedourlargesttransactiontodate,increasingearningsbymorethan60percent,”saidGregGarland,Phillips66Partners’chairmanandCEO.“Wearenearingour$1.1billionyear-end2018run-rateEBITDAtargetandremainontracktodeliver30percentfive-yeardistributionCAGR.Wecontinuetooperatefromastrongfinancialposition,whichenablesustofundour2018growthplanswithoutaccessingtheequitymarketsbeyondselectiveuseofourATMprogram.”

OnJan.17,2018,thegeneralpartner’sboardofdirectorsdeclaredafourth-quarter2017cashdistributionof$0.678percommonunit,a5percentincreaseoverthepreviousquarterdistributionof$0.646percommonunit.ThePartnershiphasincreaseditsdistributionpercommonuniteveryquartersinceitsinitialpublicofferinginJuly2013.

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Financial Results

Phillips66Partners’earningsforthefourthquarterof2017were$162million,comparedwith$99millioninthethirdquarter.TheincreasewasprimarilyduetotheOctober2017acquisitionofMereySweeny,L.P.anda25percentinterestintheBakkenPipeline,aswellasincreasedvolumesonotherassets.

Liquidity, Capital Expenditures and Investments

AsofDec.31,2017,totaldebtoutstandingwas$2.9billion.ThePartnershiphad$185millionincashandcashequivalentsandnooutstandingbalanceunderits$750millionrevolvingcreditfacility.

InOctober2017,Phillips66Partnersissued$650millionofseniornotesandraised$1.05billioninaprivateplacementofpreferredandcommonunits.ThemajorityoftheproceedswereusedtofundthecashportionoftheOctoberacquisitionandtorepaydebt,withtheremainderavailableforgeneralpartnershippurposes.

ThePartnership’stotalcapitalspendingforthequarterwas$127million,whichincluded$21millionofmaintenancecapital.Expansioncapitalspendingtotaled$106million,reflectinginvestmentsintheSandHillsPipeline,BakkenPipelineandSTACKjointventureprojects,aswellasspendingtodevelopanewisomerizationunitatthePhillips66LakeCharlesRefinery.

Phillips66Partners’2018capitalbudgetof$595millionincludes$510milliondirectedtowardgrowthprojectsand$85millionformaintenance.

Strategic Update

ThePartnershipcontinuestoprogressitsportfolioofgrowthprojects.

Finalapprovalhasbeenreceivedforconstructionofanew25,000barrelsperday(BPD)isomerizationunitatthePhillips66LakeCharlesRefinerytoincreaseproductionofhigheroctanegasolineblendcomponents.The$200millionprojectwillincludealong-termagreementwithPhillips66forprocessingservices,includingaminimumvolumecommitment,andisexpectedtobecompletedbytheendof2019.

TheSandHillsPipelinejointventurehasexceeded300,000BPDofthroughputinthefourthquarterandisexpectedtoreach365,000BPDofcapacitythisquarter.Furtherexpansionofthelineto450,000BPDisexpectedtobecompletedinthesecondhalfof2018.SandHillstransportsNGLsfromthePermianBasintotheTexasGulfCoast.Phillips66Partnersownsaone-thirdinterestinthisjointventure.

TheSTACKjointventureexpansionprojecttolooptheexistingpipelineandtoextendfurtherintotheSTACKplaywascompletedinthefourthquarter.Theloopincreasedcapacityby150,000BPD.ThePartnershipownsa50percentinterestinthejointventure.

PermittingiscompleteandconstructionhasbegunontheBayouBridgePipelineextensionfromLakeCharles,Louisiana,toSt.James,Louisiana.ThepipelineiscurrentlyoperatingfromNederland,Texas,toLakeCharles,andcommercialoperationsontheextensionareexpectedtobegininthesecondhalfof2018.ThePartnershipownsa40percentinterestinthejointventure.

TheSacagaweaPipelinejointventureisconstructinga24-milerawnaturalgaspipelinesystemlinkingproductioninMountrailCounty,NorthDakota,togatheringandprocessingcapacityinMcKenzieCounty,NorthDakota.Theprojectisanticipatedtobecompletedinthesecondhalfof2018.Phillips66Partnersownsa49.5percentinterestinthejointventure.

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Investor Webcast

MembersofPhillips66Partnersexecutivemanagementwillhostawebcasttodayat2p.m.ESTtodiscussthePartnership’sfourth-quarterperformance.Tolistentotheconferencecallandviewrelatedpresentationmaterials,gotowww.phillips66partners.com/events . Fordetailedsupplementalinformation,gotowww.phillips66partners.com/reports .

About Phillips 66 Partners

HeadquarteredinHouston,Phillips66Partnersisagrowth-orientedmasterlimitedpartnershipformedbyPhillips66toown,operate,developandacquireprimarilyfee-basedcrudeoil,refinedpetroleumproductandnaturalgasliquidspipelinesandterminalsandothertransportationandmidstreamassets.Formoreinformation,visitwww.phillips66partners.com .

- # # # -

CONTACTS

JeffDietert(investors)[email protected]

RosyZuklic(investors)[email protected]

DennisNuss(media)[email protected]

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This news release includes forward-looking statements. Words and phrases such as “is anticipated,” “is estimated,” “is expected,” “is planned,” “is scheduled,”“is targeted,” “believes,” “intends,” “objectives,” “projects,” “strategies” and similar expressions are used to identify such forward-looking statements. However,the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements relating to Phillips 66 Partners (including ourjoint venture operations) are based on management’s expectations, estimates and projections about the Partnership, its interests and the energy industry ingeneral on the date this news release was prepared. These statements are not guarantees of future performance and involve certain risks, uncertainties andassumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-lookingstatements. Factors that could cause actual results or events to differ materially from those described in the forward-looking statements include the continuedability of Phillips 66 to satisfy its obligations under our commercial and other agreements; the volume of crude oil, refined petroleum products and NGL we or ourjoint ventures transport, fractionate, terminal and store; the tariff rates with respect to volumes that we transport through our regulated assets, which rates aresubject to review and possible adjustment by federal and state regulators; fluctuations in the prices for crude oil, refined petroleum products and NGL; liabilitiesassociated with the risks and operational hazards inherent in transporting, fractionating, terminaling and storing crude oil, refined petroleum products and NGL;potential liability from litigation or for remedial actions, including removal and reclamation obligations under environmental regulations; and other economic,business, competitive and/or regulatory factors affecting Phillips 66 Partners’ businesses generally as set forth in our filings with the Securities and ExchangeCommission. Phillips 66 Partners is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whetheras a result of new information, future events or otherwise.

Use of Non-GAAP Financial Information —This news release includes the terms “EBITDA,” “adjusted EBITDA,” “distributable cash flow,” “run-rate EBITDA,”and “coverage ratio.” These are non-GAAP financial measures. EBITDA and adjusted EBITDA are included to help facilitate comparisons of operatingperformance of the Partnership with other companies in our industry. EBITDA and distributable cash flow help facilitate an assessment of our ability to generatesufficient cash flow to make distributions to our partners. We believe that the presentation of EBITDA, adjusted EBITDA and distributable cash flow providesuseful information to investors in assessing our financial condition and results of operations. Our coverage ratio is calculated as distributable cash flow dividedby total cash distributions and is included to help indicate the Partnership’s ability to pay cash distributions from current earnings. The GAAP performancemeasure most directly comparable to EBITDA and adjusted EBITDA is net income. The GAAP liquidity measure most comparable to EBITDA and distributablecash flow is net cash provided by operating activities. The GAAP financial measure most comparable to our coverage ratio is calculated as net cash provided byoperating activities divided by total cash distributions. These non-GAAP financial measures should not be considered as alternatives to GAAP net income or netcash provided by operating activities. They have important limitations as analytical tools because they exclude some but not all items that affect net income andnet cash provided by operating activities. They should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP.Additionally, because EBITDA, adjusted EBITDA and distributable cash flow may be defined differently by other companies in our industry, our definition ofEBITDA, adjusted EBITDA and distributable cash flow may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

Run-rate EBITDA is a forecast of future EBITDA, and is based on the Partnership’s projections of annual EBITDA inclusive of current assets and future potentialacquisitions by the Partnership. Run-rate EBITDA is included to demonstrate management’s intention of future growth through acquisitions and organic projects.We are unable to present a reconciliation of run-rate EBITDA to net income, which is the nearest GAAP financial measure, because certain elements of netincome, including interest, depreciation and taxes, were not used in the forecasts and are therefore not available. Together, these items generally result in run-rate EBITDA being significantly higher than net income. The disaggregation of capital spending between expansion/growth and maintenance is not a distinctionrecognized under GAAP. We provide such disaggregation because the Partnership will generally fund maintenance capital spending with cash from operatingactivities and fund expansion/growth capital spending with financing activities. We believe this is an important distinction in our liquidity profile.

References in the release to earnings and capital spending refer to net income and capital spending attributable to the Partnership, respectively. References toEBITDA refer to earnings before interest, income taxes, depreciation and amortization.

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Results of Operations (Unaudited)

Summarized Financial Statement Information

Millions of Dollars

Except as Indicated Q4 2017 Q3 2017* Selected Income Statement Data

Totalrevenuesandotherincome $ 331 299

Netincome 164 131

NetincomeattributabletothePartnership 162 99

AdjustedEBITDA 254 171

Distributablecashflow 172 136

Net Income Attributable to the PartnershipPer Limited Partner Unit—Diluted (Dollars)

Commonunits $ 0.83 0.51

Selected Balance Sheet Data

Cashandcashequivalents $ 185 2

Equityinvestments 1,932 1,874

Totalassets 5,334 5,046

Totaldebt 2,945 2,390

Equityheldbypublic

Preferredunitholders 746 —

Commonunits 2,274 1,966

EquityheldbyPhillips66

Commonunits 487 472

Generalpartner (1,345) (662)*Prior-period financial information has been retrospectively adjusted for acquisitions of businesses under common control.

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Statement of Income Millions of Dollars Q4 2017 Q3 2017* Revenues and Other Income

Operatingrevenues—relatedparties $ 246 222

Operatingrevenues—thirdparties 8 11

Equityinearningsofaffiliates 76 66

Otherincome 1 —

Total revenues and other income 331 299

Costs and Expenses

Operatingandmaintenanceexpenses 82 86

Depreciation 28 32

Generalandadministrativeexpenses 17 17

Taxesotherthanincometaxes 9 7

Interestanddebtexpense 29 24

Otherexpenses — 1

Total costs and expenses 165 167

Incomebeforeincometaxes 166 132

Incometaxexpense 2 1

Net income 164 131

Less:NetincomeattributabletoPredecessors 2 32

Net income attributable to the Partnership 162 99

Less:Preferredunitholders'interestinnetincomeattributabletothePartnership 9 —

Less:Generalpartner’sinterestinnetincomeattributabletothePartnership 48 43

Limited partners’ interest in net income attributable to the Partnership $ 105 56*Prior-period financial information has been retrospectively adjusted for acquisitions of businesses under common control.

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Selected Operating Data Thousands of Barrels Daily Q4 2017 Q3 2017 Pipeline, Terminal and Storage Volumes

Pipelines (1)

Pipelinethroughputvolumes

Wholly Owned Pipelines

Crudeoil 989 1,015

Refinedproductsandnaturalgasliquids 981 920

Total 1,970 1,935

Select Joint Venture Pipelines (2)

Naturalgasliquids 452 387

Terminals

Terminalthroughputandstoragevolumes(3)

Crudeoil(4) 606 586

Refinedproductsandnaturalgasliquids 905 828

Total 1,511 1,414(1) Represents the sum of volumes transported through each separately tariffed pipeline segment.(2) Total pipeline system throughput volumes for the Sand Hills and Southern Hills pipelines (100 percent basis) per day for each period presented.(3) Terminal throughput and storage volumes include leased capacity converted to a MBD-equivalent based on capacity divided by days in the period.(4) Crude oil terminals include Bayway and Ferndale rail rack volumes. Dollars per Barrel Q4 2017 Q3 2017 Revenue

Averagepipelinerevenue* $ 0.63 0.63

Averageterminalandstoragerevenue 0.41 0.41*Excludes equity affiliates.

Capital Expenditures and Investments Millions of Dollars Q4 2017 Q3 2017 Capital Expenditures and Investments

Expansion $ 106 87

Maintenance 21 10

Total Partnership 127 97

Predecessors* 1 21

Total Consolidated $ 128 118*Prior-period financial information has been retrospectively adjusted for acquisitions of businesses under common control.

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Cash Distributions Millions of Dollars Q4 2017 Q3 2017 Cash Distributions †

Commonunits—public $ 36 34

Commonunits—Phillips66 46 44

Generalpartner—Phillips66 47 43

Total $ 129 121

Cash Distribution Per Common Unit (Dollars) $ 0.678 0.646

Coverage Ratio* 1.33x 1.12x† Cash distributions declared attributable to the indicated periods.

*Calculated as distributable cash flow divided by total cash distributions. Used to indicate the Partnership’s ability to pay cash distributions from current earnings. Net cashprovided by operating activities divided by total cash distributions was 1.84x and 1.61x at Q4 2017 and Q3 2017 respectively.

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Reconciliation of Adjusted EBITDA and Distributable Cash Flow to Net Income Millions of Dollars Q4 2017 Q3 2017* 2017 2016

Reconciliation to Net Income Attributable to the Partnership

Net income attributable to the Partnership $ 162 99 461 301

Plus: NetincomeattributabletoPredecessors 2 32 63 107

Net income 164 131 524 408

Plus:

Depreciation 28 32 116 96

Netinterestexpense 29 24 99 52

Incometaxexpense 2 1 4 2

EBITDA 223 188 743 558

Proportionalshareofequityaffiliates’netinterest,taxesanddepreciation 29 13 66 45

ExpensesindemnifiedorprefundedbyPhillips66 1 4 8 6

Transactioncostsassociatedwithacquisitions 1 2 4 4

EBITDAattributabletoPredecessors — (36) (67) (142)

Adjusted EBITDA 254 171 754 471

Plus:

Deferredrevenueimpacts** † (3) 1 6 11

Less:

EquityaffiliatedistributionslessthanproportionalEBITDA 22 3 29 28

Maintenancecapitalexpenditures† 19 10 50 22


Preferredunitdistributions 9 — 9 —

Distributable cash flow $ 172 136 572 380Adjusted EBITDA for all prior periods has been retrospectively adjusted to present our proportional share of equity affiliates’ EBITDA, rather than cashdistributions received.

*Prior-period financial information has been retrospectively adjusted for acquisitions of businesses under common control.

**Difference between cash receipts and revenue recognition. † Excludes MSLP capital reimbursements and turnaround impacts.

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Reconciliation of Distributable Cash Flow to Net Cash Provided by Operating Activities Millions of Dollars Q4 2017 Q3 2017* 2017 2016

Reconciliation to Net Cash Provided by Operating Activities

Net cash provided by operating activities $ 238 195 724 492

Plus:


Incometaxexpense 2 1 4 2

Changesinworkingcapital — (19) (30) 28

Adjustmenttoequityearningsforcashdistributionsreceived 1 (9) 1 (1)

Other (47) (4) (55) (15)

EBITDA 223 188 743 558

Proportionalshareofequityaffiliates’netinterest,taxesanddepreciation 29 13 66 45

ExpensesindemnifiedorprefundedbyPhillips66 1 4 8 6

Transactioncostsassociatedwithacquisitions 1 2 4 4

EBITDAattributabletoPredecessors — (36) (67) (142)

Adjusted EBITDA 254 171 754 471

Plus:

Deferredrevenueimpacts** † (3) 1 6 11

Less:

EquityaffiliatedistributionslessthanproportionalEBITDA 22 3 29 28

Maintenancecapitalexpenditures† 19 10 50 22


Preferredunitdistributions 9 — 9 —

Distributable cash flow $ 172 136 572 380Adjusted EBITDA for all prior periods has been retrospectively adjusted to present our proportional share of equity affiliates’ EBITDA, rather than cash distributions received.

*Prior-period financial information has been retrospectively adjusted for acquisitions of businesses under common control.

**Difference between cash receipts and revenue recognition.

† Excludes MSLP capital reimbursements and turnaround impacts.

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Exhibit 99.2

Phillips 66 Partners LP Earnings Release Supplemental Data

Factors Affecting Comparability

Thefollowingtablespresentourfinancialresultsandoperatingdataforeachquarterlyperiodofthecurrentandpriorfiscalyears.Duringtheperiodscoveredbythisreport,weacquiredbusinessesfromPhillips66thatwereconsideredtransfersofbusinessesbetweenentitiesundercommoncontrol,whichrequiresthemtobeaccountedforasifthetransfershadoccurredatthebeginningoftheperiodoftransfer,withfinancialstatementsforpriorperiodsretrospectivelyadjustedtofurnishcomparativeinformation.Accordingly,theconsolidatedfinancialandoperatinginformationincludedinthefollowingtableshasbeenretrospectivelyadjustedtoincludethehistoricalfinancialandoperatingresultsoftheseacquiredbusinessespriortotheeffectivedateofacquisition.Werefertotheresultsofthesepre-acquisitionperiodsasthoseofour“Predecessors”inthetablesbelow.Tableslabeled“Phillips66PartnersLP”excludePredecessors,whiletableslabeled“Consolidated”includePredecessors.Thestatementsofincomeprovidedonpages1through3aredesignedtoenableuserstoevaluatethefinancialeffectofthesebusinesscombinationsinaccordancewithAccountingStandardCodification805-10-50-1.

STATEMENT OF INCOME

PHILLIPS 66 PARTNERS LP

MillionsofDollars2017 2016

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTDRevenues and Other Income

Operatingrevenues—relatedparties 184 186 193 244 807 76 107 108 183 474

Operatingrevenues—thirdparties 10 11 11 8 40 2 2 2 8 14

Equityinearningsofaffiliates 33 37 41 74 185 25 30 33 26 114

Otherincome 7 — — 1 8 — — 1 — 1

Total revenues and other income 234 234 245 327 1,040 103 139 144 217 603

Costs and Expenses

Operatingandmaintenanceexpenses 62 57 69 81 269 18 27 26 49 120

Depreciation 26 26 30 28 110 8 15 15 24 62

Generalandadministrativeexpenses 16 16 16 17 65 8 8 9 15 40

Taxesotherthanincometaxes 9 7 7 8 31 4 5 1 9 19

Interestanddebtexpense 24 24 23 29 100 10 11 10 21 52

Otherexpenses — — 1 — 1 — — — — —

Total costs and expenses 137 130 146 163 576 48 66 61 118 293

Incomebeforeincometaxes 97 104 99 164 464 55 73 83 99 310

Incometaxexpense — 1 — 2 3 — 1 — 1 2

Net income 97 103 99 162 461 55 72 83 98 308Less:Netincomeattributabletononcontrollinginterests — — — — — 3 4 — — 7

Net income attributable to the Partnership 97 103 99 162 461 52 68 83 98 301Less:Preferredunitholders’interestinnetincomeattributabletothePartnership — — — 9 9 — — — — —

Less:Generalpartner’sinterestinnetincomeattributabletothePartnership 32 37 43 48 160 16 21 26 29 92

Limited partners’ interest in net incomeattributable to the Partnership 65 66 56 105 292 36 47 57 69 209

Adjusted EBITDA 163 166 171 254 754 80 105 123 163 471

Distributable Cash Flow 124 140 136 172 572 64 84 102 130 380

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Exhibit 99.2

STATEMENT OF INCOME (continued)

PREDECESSORS

MillionsofDollars2017 2016

1st Qtr* 2nd Qtr* 3rd Qtr* 4th Qtr † YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr † YTDRevenues and Other Income


Operatingrevenues—thirdparties — — — — — 6 5 5 1 17

Equityinearningsofaffiliates — 11 25 2 38 — — — — —

Otherincome 2 2 — — 4 — — — — —

Total revenues and other income 28 43 54 4 129 101 80 78 11 270

Costs and Expenses


Depreciation 2 2 2 — 6 15 8 10 1 34

Generalandadministrativeexpenses 1 2 1 — 4 9 8 8 — 25

Taxesotherthanincometaxes — 1 — 1 2 6 5 3 — 14

Interestanddebtexpense — — 1 — 1 — — — — —

Otherexpenses — — — — — — — — 1 1



Incometaxexpense — — 1 — 1 — — — — —

Net income 13 16 32 2 63 39 28 29 4 100

Netincomeattributabletononcontrollinginterests — — — — — 3 4 — — 7

Net income attributable to Predecessors 13 16 32 2 63 42 32 29 4 107

EBITDA attributable to Predecessors** 14 17 36 2 69 58 45 39 5 147* Prior-period financial information has been retrospectively adjusted for acquisitions of businesses under common control.** Includes rounding impacts.† In accordance with contractual terms of the Bakken Pipeline/MSLP and Eagle acquisitions, Q4 EBITDA attributable to Predecessors did not affect Q4 2017 or Q4 2016

Distributable Cash Flow as the effective closing dates of both transactions were October 1, 2017 and 2016, respectively.

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Exhibit 99.2

STATEMENT OF INCOME (continued)

CONSOLIDATED

MillionsofDollars,ExceptasIndicated2017 2016

1st Qtr* 2nd Qtr* 3rd Qtr* 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTDRevenues and Other Income


Operatingrevenues—thirdparties 10 11 11 8 40 8 7 7 9 31

Equityinearningsofaffiliates 33 48 66 76 223 25 30 33 26 114

Otherincome 9 2 — 1 12 — — 1 — 1

Total revenues and other income 262 277 299 331 1,169 204 219 222 228 873

Costs and Expenses


Depreciation 28 28 32 28 116 23 23 25 25 96

Generalandadministrativeexpenses 17 18 17 17 69 17 16 17 15 65

Taxesotherthanincometaxes 9 8 7 9 33 10 10 4 9 33

Interestanddebtexpense 24 24 24 29 101 10 11 10 21 52

Otherexpenses — — 1 — 1 — — — 1 1



Incometaxexpense — 1 1 2 4 — 1 — 1 2

Net income 110 119 131 164 524 94 100 112 102 408

Less:NetincomeattributabletoPredecessors 13 16 32 2 63 42 32 29 4 107

Net income attributable to the Partnership 97 103 99 162 461 52 68 83 98 301Less:Preferredunitholders’interestinnetincomeattributabletothePartnership — — — 9 9 — — — — —

Less:Generalpartner’sinterestinnetincomeattributabletothePartnership 32 37 43 48 160 16 21 26 29 92

Limited partners’ interest in net incomeattributable to the Partnership 65 66 56 105 292 36 47 57 69 209

Net Income Attributable to the Partnership PerLimited Partner Unit—Basic and Diluted (dollars)

Commonunits—basic 0.60 0.61 0.51 0.86 2.60 0.44 0.51 0.57 0.65 2.20

Commonunits—diluted 0.60 0.61 0.51 0.83 2.59 0.44 0.51 0.57 0.65 2.20

Weighted-Average Limited Partner Units

Outstanding—Basic and Diluted ( thousands)

Commonunits—basic 107,400 109,189 110,506 120,953 112,045 82,629 90,959 100,555 106,633 95,240

Commonunits—diluted 107,400 109,189 110,506 134,021 115,339 82,629 90,959 100,555 106,633 95,240* Prior-period financial information has been retrospectively adjusted for acquisitions of businesses under common control.

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Exhibit 99.2

SELECTED OPERATING DATA PHILLIPS 66 PARTNERS LP 2017 2016 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTDPipeline, Terminal and Storage Volumes

(MB/D)

Pipelines (1)



Crudeoil 940 938 1,015 989 971 281 287 257 899 432

Refinedproductsandnaturalgasliquids 935 977 920 981 953 520 606 619 929 669

Total 1,875 1,915 1,935 1,970 1,924 801 893 876 1,828 1,101


Naturalgasliquids 354 372 387 452 392 306 346 346 333 333

Terminals


Crudeoil(4) 485 494 586 606 543 502 559 541 561 541


Total 1,383 1,334 1,414 1,511 1,411 929 1,009 983 1,408 1,083(1) Represents the sum of volumes transported through each separately tariffed pipeline segment. (2) Total pipeline system throughput volumes for the Sand Hills and Southern Hills pipelines (100percent basis) per day for each period presented.

(3) Terminal throughput and storage volumes include leased capacity converted to a MBD-equivalent based on capacity divided by days in the period.

(4) Crude oil terminals include Bayway and Ferndale rail rack volumes.

Revenue Per Barrel ($/BBL)

Averagepipelinerevenue* 0.63 0.61 0.63 0.63 0.62 0.46 0.48 0.46 0.59 0.50

Averageterminalandstoragerevenue 0.41 0.42 0.41 0.41 0.42 0.40 0.38 0.39 0.40 0.39* Excludes equity affiliates.

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Exhibit 99.2

SELECTED OPERATING DATA (continued) CONSOLIDATED 2017 2016 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTDPipeline, Terminal and Storage Volumes

(MB/D)

Pipelines (1)



Crudeoil 940 938 1,015 989 971 1,025 1,024 981 1,007 1,009


Total 1,875 1,915 1,935 1,970 1,924 1,826 1,876 1,836 1,968 1,876


Naturalgasliquids 354 372 387 452 392 306 346 346 333 333

Terminals


Crudeoil(4) 485 494 586 606 543 502 559 541 563 541


Total 1,383 1,334 1,414 1,511 1,411 1,286 1,379 1,363 1,470 1,374(1) Represents the sum of volumes transported through each separately tariffed pipeline segment. (2) Total pipeline system throughput volumes for the Sand Hills and Southern Hills pipelines (100percent basis) per day for each period presented.

(3) Terminal throughput and storage volumes include leased capacity converted to a MBD-equivalent based on capacity divided by days in the period.

(4) Crude oil terminals include Bayway and Ferndale rail rack volumes.

Revenue Per Barrel ($/BBL)

Averagepipelinerevenue* 0.63 0.61 0.63 0.63 0.62 0.61 0.61 0.59 0.60 0.60

Averageterminalandstoragerevenue 0.41 0.42 0.41 0.41 0.42 0.42 0.40 0.41 0.40 0.41* Excludes equity affiliates.

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Exhibit 99.2

CAPITAL EXPENDITURES AND INVESTMENTS MillionsofDollars

2017 2016 1st Qtr* 2nd Qtr* 3rd Qtr* 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTDPartnership Capital Expenditures and

Investments

Expansion 42 65 87 106 300 32 58 109 240 439

Maintenance 11 10 10 21 52 1 4 3 14 22

Total Partnership 53 75 97 127 352 33 62 112 254 461

Predecessors 5 55 21 1 82 31 36 24 5 96

Total Consolidated 58 130 118 128 434 64 98 136 259 557* Prior-period financial information has been retrospectively adjusted for acquisitions of businesses under common control.

CASH DISTRIBUTIONS 2017 2016 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD

Cash Distribution Per Common Unit (Dollars) 0.586 0.615 0.646 0.678 2.525 0.481 0.505 0.531 0.558 2.075

Cash Distributions † ($ Millions)

Commonunits—public 26 28 34 36 124 12 19 22 24 77Commonunits—Phillips66 37 40 44 46 167 28 30 34 36 128Generalpartner—Phillips66 32 36 43 47 158 16 21 26 28 91

Total 95 104 121 129 449 56 70 82 88 296

Coverage Ratio* 1.31 1.35 1.12 1.33 1.27 1.14 1.20 1.24 1.48 1.28† Cash distributions declared attributable to the indicated periods.* Calculated as distributable cash flow divided by total cash distributions. Used to indicate the Partnership's ability to pay cash distributions from current earnings.

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Exhibit 99.2

NON-GAAP FINANCIAL MEASURES RECONCILIATION CONSOLIDATED MillionsofDollars

2017 2016 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTDReconciliation to Net Income Attributable to

the Partnership

Net income attributable to the Partnership 97 103 99 162 461 52 68 83 98 301

Plus: NetincomeattributabletoPredecessors 13 16 32 2 63 42 32 29 4 107

Net income 110 119 131 164 524 94 100 112 102 408

Plus:

Depreciation 28 28 32 28 116 23 23 25 25 96

Netinterestexpense 23 23 24 29 99 10 11 10 21 52


EBITDA 161 171 188 223 743 127 135 147 149 558Proportionalshareofequityaffiliates’netinterest,taxesanddepreciation 12 12 13 29 66 10 10 13 12 45

ExpensesindemnifiedorprefundedbyPhillips66 3 — 4 1 8 — 4 — 2 6

Transactioncostsassociatedwithacquisitions 1 — 2 1 4 1 1 2 — 4

EBITDAattributabletoPredecessors (14) (17) (36) — (67) (58) (45) (39) — (142)

Adjusted EBITDA 163 166 171 254 754 80 105 123 163 471

Plus:

Deferredrevenueimpacts*† 4 4 1 (3) 6 1 2 4 4 11

Less: EquityaffiliatedistributionslessthanproportionalEBITDA 8 (4) 3 22 29 6 8 12 2 28

Maintenancecapitalexpenditures† 11 10 10 19 50 1 4 3 14 22


Preferredunitdistributions — — — 9 9 — — — — —

Distributable cash flow 124 140 136 172 572 64 84 102 130 380Q1 2017 through Q3 2017 financial information has been retrospectively adjusted for acquisitions of businesses under common control. Adjusted EBITDA for all prior periodshas been retrospectively adjusted to present our proportional share of equity affiliates’ EBITDA, rather than cash distributions received.

* Difference between cash receipts and revenue recognition.† Excludes MSLP capital reimbursements and turnaround impacts.

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Exhibit 99.2

NON-GAAP FINANCIAL MEASURES RECONCILIATION (continued) CONSOLIDATED MillionsofDollars

2017 2016 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTD 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr YTDReconciliation to Net Cash Provided by

Operating Activities

Net cash provided by operating activities 155 136 195 238 724 111 132 128 121 492

Plus:



Changesinworkingcapital (19) 8 (19) — (30) 13 (5) 8 12 28Adjustmenttoequityearningsforcashdistributionsreceived 4 5 (9) 1 1 (1) 2 3 (5) (1)

Other (2) (2) (4) (47) (55) (6) (6) (2) (1) (15)

EBITDA 161 171 188 223 743 127 135 147 149 558Proportionalshareofequityaffiliates’netinterest,taxesanddepreciation 12 12 13 29 66 10 10 13 12 45

ExpensesindemnifiedorprefundedbyPhillips66 3 — 4 1 8 — 4 — 2 6

Transactioncostsassociatedwithacquisitions 1 — 2 1 4 1 1 2 — 4

EBITDAattributabletoPredecessors (14) (17) (36) — (67) (58) (45) (39) — (142)

Adjusted EBITDA 163 166 171 254 754 80 105 123 163 471

Plus:

Deferredrevenueimpacts*† 4 4 1 (3) 6 1 2 4 4 11

Less: EquityaffiliatedistributionslessthanproportionalEBITDA 8 (4) 3 22 29 6 8 12 2 28

Maintenancecapitalexpenditures† 11 10 10 19 50 1 4 3 14 22


Preferredunitdistributions — — — 9 9 — — — — —

Distributable cash flow 124 140 136 172 572 64 84 102 130 380Q1 2017 through Q3 2017 financial information has been retrospectively adjusted for acquisitions of businesses under common control. Adjusted EBITDA for all prior periodshas been retrospectively adjusted to present our proportional share of equity affiliates’ EBITDA, rather than cash distributions received.

* Difference between cash receipts and revenue recognition.† Excludes MSLP capital reimbursements and turnaround impacts.

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