8-K

UNITED STATES

SECURITIES 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

July 31, 2020

Date of Report (date of earliest event reported)

Phillips 66 Partners LP

(Exact name of registrant as specified in its charter)

Delaware	001-36011	38-3899432
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

2331 CityWest Boulevard

Houston, Texas 77042

(Address of Principal Executive Offices and Zip Code)

(855) 283-9237

Registrant's telephone number, including area code

Not Applicable

(Former name or former address, if changed since last report.)

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 following provisions (see General Instruction A.2. below):

☐ 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))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 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 or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On July 31, 2020, Phillips 66 Partners LP issued a press release announcing the partnership’s financial and operating results for the quarter ended June 30, 2020. A copy of the press release is attached as Exhibit 99.1 hereto and incorporated herein by reference. Additional financial and operating information 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 July 31, 2020.
99.2	—	Supplemental financial and operating information.
104	—	Cover Page Interactive Data File (embedded within the Inline XBRL document).

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 undersigned hereunto duly authorized.

	PHILLIPS 66 PARTNERS LP
	By: Phillips 66 Partners GP LLC, its general partner
By:	/s/ Chukwuemeka A. Oyolu
	Chukwuemeka A. Oyolu Vice President and Controller

Date: July 31, 2020

2

EX-99.1

Exhibit 99.1

Phillips 66 Partners Reports

Second-Quarter 2020 Financial Results

•Reported earnings of $255 million and adjusted EBITDA of $269 million

•Announced quarterly distribution of $0.875 per common unit

•Started full operations on the Gray Oak Pipeline

•Reached milestone at South Texas Gateway Terminal with first export cargo loaded in July

•Recently completed Clemens Caverns expansion

HOUSTON, July 31, 2020 – Phillips 66 Partners LP (NYSE: PSXP) announces second-quarter 2020 earnings of $255 million, or $1.05 per diluted common unit. Cash from operations was $215 million, and distributable cash flow was $218 million. Adjusted EBITDA was $269 million in the second quarter, compared with $321 million in the prior quarter.

“During the quarter, we continued to demonstrate our commitment to operating excellence,” said Greg Garland, Phillips 66 Partners’ chairman and CEO. “Our financial results reflect the ongoing economic downturn. We reached key milestones with the Gray Oak Pipeline achieving full service and supplying the first crude oil into the South Texas Gateway Terminal. We remain focused on safe and reliable operations, as well as maintaining our strong balance sheet and continuing our disciplined approach to capital allocation.”

On July 21, 2020, the general partner’s board of directors declared a second-quarter 2020 cash distribution of $0.875 per common unit, a 2% increase over second quarter 2019.

Page 1

Phillips 66 Partners Reports Second-Quarter 2020 Financial Results

Financial Results

Phillips 66 Partners’ earnings were $255 million in the second quarter of 2020, compared with $226 million in the first quarter. The second-quarter results include an $84 million gain related to recognition of the Partnership’s prior-year sale of an interest in the Gray Oak Pipeline. Excluding this gain, the Partnership reported adjusted EBITDA of $269 million in the second quarter, compared with $321 million in the prior quarter. Second-quarter earnings and adjusted EBITDA reflect reduced volumes at the Partnership’s wholly owned and joint venture assets, driven by lower domestic oil production, refinery utilization and product demand.

Liquidity, Capital Expenditures and Investments

As of June 30, 2020, total debt outstanding was $3.7 billion. The Partnership had $7 million in cash and cash equivalents and $532 million available under its revolving credit facility.

The Partnership’s capital expenditures and investments for the quarter were $377 million. Excluding $38 million of capital spending funded by Gray Oak joint venture partners, adjusted capital spending was $339 million. Growth capital included investments in the Gray Oak Pipeline and the South Texas Gateway Terminal, as well as spend on the C2G Pipeline and the Sweeny to Pasadena Pipeline. In addition, following deferral of the Liberty Pipeline, the Partnership continued to fund its share of the project’s previous commitments.

Strategic Update

During the quarter, the Gray Oak Pipeline commenced full operations from West Texas and Eagle Ford to Texas Gulf Coast destinations, marking the completion of the project. Phillips 66 Partners has a 42.25% effective ownership interest in the 900,000 barrels per day (BPD) pipeline.

The Gray Oak Pipeline connects to multiple terminals in Corpus Christi, Texas, including the South Texas Gateway Terminal being constructed by Buckeye Partners, L.P. The first dock and 3.4 million barrels of storage capacity have been commissioned, and the terminal began crude oil export operations in July after receiving its first crude oil supply from the Gray Oak Pipeline. Marine operations are expected to ramp up through the end of this year as additional phases of construction are completed. Upon expected project completion in the first quarter of 2021, the marine export terminal will have two deepwater docks with up to 800,000 BPD of throughput capacity, along with storage capacity of 8.6 million barrels. Phillips 66 Partners owns a 25% interest in the terminal.

The Partnership recently completed its expansion of storage capacity at Clemens Caverns, from 9 million barrels to 16.5 million barrels, in connection with the Phillips 66 project to add natural gas liquid (NGL) fractionation capacity at the Sweeny Hub. The caverns expansion is backed by long-term commitments.

Phillips 66 Partners continues construction of the C2G Pipeline, a 16 inch ethane pipeline that will connect Clemens Caverns to petrochemical facilities in Gregory, Texas, near Corpus Christi. The project is backed by long-term commitments and is expected to be completed in mid-2021.

The Sweeny to Pasadena Pipeline expansion project will add 80,000 BPD of pipeline capacity, providing additional naphtha offtake from the Sweeny fractionators. In addition, product storage capacity will increase by 300,000 barrels at the Pasadena Terminal. The project is backed by long-term commitments and is expected to be completed in the third quarter of 2020.

Page 2

Phillips 66 Partners Reports Second-Quarter 2020 Financial Results

Investor Webcast

Members of Phillips 66 Partners executive management will host a webcast today at 2 p.m. EDT to discuss the Partnership’s second-quarter performance. To listen to the conference call and view related presentation materials, go to www.phillips66partners.com/events. For detailed supplemental information, go to www.phillips66partners.com/reports.

About Phillips 66 Partners

Headquartered in Houston, Phillips 66 Partners is a growth-oriented master limited partnership formed by Phillips 66 to own, operate, develop and acquire primarily fee-based crude oil, refined petroleum products and natural gas liquids pipelines, terminals and other midstream assets. For more information, visit www.phillips66partners.com.

- # # # -

CONTACTS
Jeff Dietert (investors) 832-765-2297 jeff.dietert@p66.com	Brent Shaw (investors) 832-765-2297 brent.d.shaw@p66.com	Dennis Nuss (media) 855-841-2368 dennis.h.nuss@p66.com

Page 3

Phillips 66 Partners Reports Second-Quarter 2020 Financial Results

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This news release contains certain forward-looking statements as defined under the federal securities laws. Words and phrases such as “is anticipated,” “is estimated,” “is expected,” “is planned,” “is scheduled,” “is targeted,” “believes,” “continues,” “intends,” “will,” “would,” “objectives,” “goals,” “projects,” “efforts,” “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 in this news release are based on management’s expectations, estimates and projections as of the date they are made. These statements are not guarantees of future performance and you should not unduly rely on them as they involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Factors that could cause actual results or events to differ materially from those described in the forward-looking statements include the continued ability 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 our joint ventures transport, fractionate, terminal and store; the tariff rates with respect to volumes that we transport through our regulated assets, which rates are subject to review and possible adjustment by federal and state regulators; fluctuations in the prices for crude oil, refined petroleum products and NGL; liabilities associated 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; the failure to complete construction of announced and future capital projects in a timely manner and any cost overruns associated with such projects; general domestic and international economic and political developments including: armed hostilities; expropriation of assets; changes in governmental policies relating to crude oil, refined petroleum products or NGL pricing, regulation or taxation; and other political, economic or diplomatic developments, including those caused by public health issues and outbreaks; 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 Exchange Commission. Phillips 66 Partners is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as 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,” “coverage ratio” and “adjusted capital spending.” These are non-GAAP financial measures. EBITDA and adjusted EBITDA are included to help facilitate comparisons of operating performance of the Partnership with other companies in our industry. EBITDA and distributable cash flow help facilitate an assessment of our ability to generate sufficient cash flow to make distributions to our partners. We believe that the presentation of EBITDA, adjusted EBITDA and distributable cash flow provides useful information to investors in assessing our financial condition and results of operations. Our coverage ratio is calculated as distributable cash flow divided by total cash distributions and is included to help indicate the Partnership’s ability to pay cash distributions from current earnings. Additionally, adjusted capital spending is a non-GAAP financial measure that demonstrates Phillips 66 Partners' net share of capital spending. The GAAP performance measure most directly comparable to EBITDA and adjusted EBITDA is net income. The GAAP liquidity measure most comparable to EBITDA and distributable cash flow is net cash provided by operating activities. The GAAP financial measure most comparable to our coverage ratio is calculated as net cash provided by operating activities divided by total cash distributions. The GAAP financial measure most comparable to adjusted capital spending is capital expenditures and investments. These non-GAAP financial measures should not be considered as alternatives to their comparable GAAP measures. They have important limitations as analytical tools because they exclude some but not all items that affect their corresponding GAAP measures. They should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP. Additionally, because EBITDA, adjusted EBITDA, distributable cash flow, coverage ratio and adjusted capital spending may be defined differently by other companies in our industry, our definition of those measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

Reconciliations of these non-GAAP measures to their comparable GAAP measures are included in this release.

References to EBITDA refer to earnings before interest, income taxes, depreciation and amortization.

Page 4

Phillips 66 Partners Reports Second-Quarter 2020 Financial Results

Results of Operations (Unaudited)

Summarized Financial Statement Information
	Millions of Dollars Except as Indicated
	Q2 2020			Q1 2020
Selected Income Statement Data
Total revenues and other income		$	430		404
Net income		255			226
Adjusted EBITDA		269			321
Distributable cash flow		218			269
Net Income Per Limited Partner Unit—Diluted (Dollars)
Common units		$	1.05		0.93
Selected Balance Sheet Data
Cash and cash equivalents		$	7		92
Equity investments		3,340			3,136
Total assets		7,203			6,997
Total debt		3,707			3,516
Equity held by public
Preferred units		746			747
Common units		2,735			2,723
Equity held by Phillips 66
Common units		(572)			(616)

Page 5

Phillips 66 Partners Reports Second-Quarter 2020 Financial Results

Statement of Income

	Millions of Dollars
	Q2 2020			Q1 2020
Revenues and Other Income
Operating revenues—related parties		$	236		258
Operating revenues—third parties		5			9
Equity in earnings of affiliates		104			136
Gain from equity interest transfer		84			—
Other income		1			1
Total revenues and other income		430			404
Costs and Expenses
Operating and maintenance expenses		84			88
Depreciation		31			30
General and administrative expenses		17			17
Taxes other than income taxes		10			11
Interest and debt expense		28			29
Other expenses		5			2
Total costs and expenses		175			177
Income before income taxes		255			227
Income tax expense		—			1
Net income		255			226
Less: Preferred unitholders’ interest in net income		9			10
Limited partners’ interest in net income		$	246		216

Page 6

Phillips 66 Partners Reports Second-Quarter 2020 Financial Results

Selected Operating Data

	Q2 2020			Q1 2020
Wholly Owned Operating Data
Pipelines
Pipeline revenues (millions of dollars)		$	97		111
Pipeline volumes(1) (thousands of barrels daily)
Crude oil		806			941
Refined petroleum products and natural gas liquids		825			866
Total		1,631			1,807
Average pipeline revenue per barrel (dollars)		$	0.65		0.67
Terminals
Terminal revenues (millions of dollars)		$	33		43
Terminal throughput (thousands of barrels daily)
Crude oil(2)		380			460
Refined petroleum products		690			748
Total		1,070			1,208
Average terminaling revenue per barrel (dollars)		$	0.33		0.39
Storage, processing and other revenues (millions of dollars)		$	111		113
Total operating revenues (millions of dollars)		$	241		267
Joint Venture Operating Data(3)
Crude oil, refined petroleum products and natural gas liquids (thousands of barrels daily)		942			838
(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.

Cash Distributions

	Millions of Dollars Except as Indicated
	Q2 2020			Q1 2020
Cash Distributions†
Common units—public		$	51		51
Common units—Phillips 66		149			148
Total		$	200		199
Cash Distribution Per Common Unit (Dollars)		$	0.875		0.875
Coverage Ratio*		1.09			1.35
†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 cash provided by operating activities divided by total cash distributions was 1.08x and 1.38x at Q2 2020 and Q1 2020, respectively.

Page 7

Phillips 66 Partners Reports Second-Quarter 2020 Financial Results

Reconciliation of Adjusted EBITDA and Distributable Cash Flow to Net Income

	Millions of Dollars
	Q2 2020			Q1 2020
Net Income		$	255		226
Plus:
Depreciation		31			30
Net interest expense		29			28
Income tax expense		—			1
EBITDA		315			285
Proportional share of equity affiliates’ net interest, taxes and depreciation and amortization		38			35
Expenses indemnified or prefunded by Phillips 66		—			—
Transaction costs associated with acquisitions		—			1
Gain from equity interest transfer		(84)			—
Adjusted EBITDA		269			321
Plus:
Deferred revenue impacts*†		5			2
Less:
Equity affiliate distributions less than (more than) proportional EBITDA		(10)			1
Maintenance capital expenditures†		28			15
Net interest expense		29			28
Preferred unit distributions		9			10
Distributable cash flow		$	218		269
*Difference between cash receipts and revenue recognition.
†Excludes Merey Sweeny capital reimbursements and turnaround impacts.

Page 8

Phillips 66 Partners Reports Second-Quarter 2020 Financial Results

Reconciliation of Adjusted EBITDA and Distributable Cash Flow to Net Cash Provided by Operating Activities

	Millions of Dollars
	Q2 2020			Q1 2020
Net Cash Provided by Operating Activities		$	215		274
Plus:
Net interest expense		29			28
Income tax expense		—			1
Changes in working capital		(3)			(12)
Undistributed equity earnings		(5)			(4)
Gain from equity interest transfer		84			—
Deferred revenues and other liabilities		2			—
Other		(7)			(2)
EBITDA		315			285
Proportional share of equity affiliates’ net interest, taxes and depreciation and amortization		38			35
Expenses indemnified or prefunded by Phillips 66		—			—
Transaction costs associated with acquisitions		—			1
Gain from equity interest transfer		(84)			—
Adjusted EBITDA		269			321
Plus:
Deferred revenue impacts*†		5			2
Less:
Equity affiliate distributions less than (more than) proportional EBITDA		(10)			1
Maintenance capital expenditures†		28			15
Net interest expense		29			28
Preferred unit distributions		9			10
Distributable cash flow		$	218		269
*Difference between cash receipts and revenue recognition.
†Excludes Merey Sweeny capital reimbursements and turnaround impacts.

Page 9

EX-99.2

Exhibit 99.2

Phillips 66 Partners LP Earnings Release Supplemental Data

STATEMENT OF INCOME
CONSOLIDATED
	Millions of Dollars, Except as Indicated
	2020					2019
	1st Qtr	2nd Qtr	3rd Qtr	4th Qtr	YTD	1st Qtr	2nd Qtr	3rd Qtr	4th Qtr	YTD
Revenues and Other Income
Operating revenues—related parties	258	236			494	296	256	262	283	1,097
Operating revenues—third parties	9	5			14	6	7	8	8	29
Equity in earnings of affiliates	136	104			240	119	137	139	140	535
Gain from equity interest transfer	—	84			84	—	—	—	—	—
Other income	1	1			2	2	1	2	1	6
Total revenues and other income	404	430			834	423	401	411	432	1,667
Costs and Expenses
Operating and maintenance expenses	88	84			172	139	85	91	90	405
Depreciation	30	31			61	29	29	30	32	120
General and administrative expenses	17	17			34	18	17	16	16	67
Taxes other than income taxes	11	10			21	11	9	10	9	39
Interest and debt expense	29	28			57	27	27	26	28	108
Other expenses	2	5			7	—	—	—	2	2
Total costs and expenses	177	175			352	224	167	173	177	741
Income before income taxes	227	255			482	199	234	238	255	926
Income tax expense	1	—			1	1	1	1	—	3
Net income	226	255			481	198	233	237	255	923
Less: Preferred unitholders’ interest in net income	10	9			19	10	9	9	9	37
Less: General partner’s interest in net income	—	—			—	69	71	—	—	140
Limited partners’ interest in net income	216	246			462	119	153	228	246	746
Adjusted EBITDA*	321	269			590	281	319	323	345	1,268
Distributable Cash Flow*	269	218			487	226	254	255	254	989
Net Income Per Limited Partner Unit (dollars)
Common units—basic	0.95	1.07			2.02	0.96	1.23	1.18	1.08	4.45
Common units—diluted	0.93	1.05			1.99	0.92	1.15	1.15	1.06	4.29
Weighted-Average Limited Partner Units Outstanding (thousands)
Common units—basic	228,312	228,340			228,326	124,258	124,824	192,274	227,857	167,655
Common units—diluted	242,132	242,160			242,146	138,078	138,644	206,093	241,676	181,475
* See note on the use of non-GAAP measures.

Page 1

Exhibit 99.2

Phillips 66 Partners LP Earnings Release Supplemental Data

SELECTED OPERATING DATA
CONSOLIDATED
	2020					2019
	1st Qtr	2nd Qtr	3rd Qtr	4th Qtr	YTD	1st Qtr	2nd Qtr	3rd Qtr	4th Qtr	YTD
Wholly Owned Operating Data
Pipelines
Pipeline revenues (millions of dollars)	111	97			208	109	117	121	126	473
Pipeline volumes(1) (thousands of barrels daily)
Crude oil	941	806			873	959	1,000	998	1,005	991
Refined petroleum products and NGL	866	825			846	768	995	990	1,033	947
Total	1,807	1,631			1,719	1,727	1,995	1,988	2,038	1,938
Average pipeline revenue per barrel (dollars)	0.67	0.65			0.66	0.70	0.64	0.66	0.67	0.67
Terminals
Terminal revenues (millions of dollars)	43	33			76	40	39	41	47	167
Terminal throughput (thousands of barrels daily)
Crude oil(2)	460	380			420	471	456	493	459	470
Refined petroleum products	748	690			719	736	809	819	852	804
Total	1,208	1,070			1,139	1,207	1,265	1,312	1,311	1,274
Average terminaling revenue per barrel (dollars)	0.39	0.33			0.36	0.36	0.33	0.33	0.38	0.35
Storage, processing and other revenues (millions of dollars)	113	111			224	153	107	108	118	486
Total operating revenues (millions of dollars)	267	241			508	302	263	270	291	1,126
Joint Venture Operating Data(3)
Crude oil, refined petroleum products and NGL (thousands of barrels daily)	838	942			890	687	772	786	793	760
(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.

Page 2

Exhibit 99.2

Phillips 66 Partners LP Earnings Release Supplemental Data

CAPITAL EXPENDITURES AND INVESTMENTS
	Millions of Dollars
	2020					2019
	1st Qtr	2nd Qtr	3rd Qtr	4th Qtr	YTD	1st Qtr	2nd Qtr	3rd Qtr	4th Qtr	YTD
Capital Expenditures and Investments
Expansion	196	311			507	195	102	136	146	579
Maintenance	15	28			43	15	12	25	28	80
Adjusted capital spending*	211	339			550	210	114	161	174	659
Capital expenditures and investments funded by certain joint venture partners	23	38			61	422	—	—	1	423
Capital expenditures and investments	234	377			611	632	114	161	175	1,082
* See note on the use of non-GAAP measures.

CASH DISTRIBUTIONS
	2020					2019
	1st Qtr	2nd Qtr	3rd Qtr	4th Qtr	YTD	1st Qtr	2nd Qtr	3rd Qtr	4th Qtr	YTD
Cash Distribution Per Common Unit (Dollars)	0.875	0.875			1.750	0.845	0.855	0.865	0.875	3.440
Cash Distributions* ($ Millions)
Common units—public	51	51			102	47	49	50	51	197
Common units—Phillips 66	148	149			297	58	58	147	149	412
General partner—Phillips 66	—	—			—	69	70	—	—	139
Total	199	200			399	174	177	197	200	748
Coverage Ratio†**	1.35	1.09			1.22	1.30	1.44	1.29	1.27	1.32
* Cash distributions declared attributable to the indicated periods.
** See note on the use of non-GAAP measures.
† Calculated as distributable cash flow divided by total cash distributions. Used to indicate the Partnership’s ability to pay cash distributions from     current earnings.

Page 3

Exhibit 99.2

Phillips 66 Partners LP Earnings Release Supplemental Data

NON-GAAP FINANCIAL MEASURES RECONCILIATION
CONSOLIDATED
	Millions of Dollars
	2020					2019
	1st Qtr	2nd Qtr	3rd Qtr	4th Qtr	YTD	1st Qtr	2nd Qtr	3rd Qtr	4th Qtr	YTD
Reconciliation to Net Income
Net income	226	255			481	198	233	237	255	923
Plus:
Depreciation	30	31			61	29	29	30	32	120
Net interest expense	28	29			57	27	26	25	27	105
Income tax expense	1	—			1	1	1	1	—	3
EBITDA**	285	315			600	255	289	293	314	1,151
Proportional share of equity affiliates’ net interest, taxes and depreciation and amortization	35	38			73	26	29	30	31	116
Expenses indemnified or prefunded by     Phillips 66	—	—			—	—	1	—	—	1
Transaction costs associated with acquisitions	1	—			1	—	—	—	—	—
Gain from equity interest transfer	—	(84)			(84)	—	—	—	—	—
Adjusted EBITDA**	321	269			590	281	319	323	345	1,268
Plus:
Deferred revenue impacts*†	2	5			7	—	(4)	—	(2)	(6)
Less:
Equity affiliate distributions less than (more than) proportional EBITDA	1	(10)			(9)	9	13	9	25	56
Maintenance capital expenditures†	15	28			43	9	12	25	28	74
Net interest expense	28	29			57	27	26	25	27	105
Preferred unit distributions	10	9			19	10	9	9	9	37
Income taxes paid	—	—			—	—	1	—	—	1
Distributable cash flow **	269	218			487	226	254	255	254	989
* Difference between cash receipts and revenue recognition.
** See note on the use of non-GAAP measures.
† Excludes Merey Sweeny capital reimbursements and turnaround impacts.

Page 4

Exhibit 99.2

Phillips 66 Partners LP Earnings Release Supplemental Data

NON-GAAP FINANCIAL MEASURES RECONCILIATION (continued)
CONSOLIDATED
	Millions of Dollars
	2020					2019
	1st Qtr	2nd Qtr	3rd Qtr	4th Qtr	YTD	1st Qtr	2nd Qtr	3rd Qtr	4th Qtr	YTD
Reconciliation to Net Cash Provided by Operating Activities
Net cash provided by operating activities	274	215			489	205	276	276	259	1,016
Plus:
Net interest expense	28	29			57	27	26	25	27	105
Income tax expense	1	—			1	1	1	1	—	3
Changes in working capital	(12)	(3)			(15)	34	(11)	(9)	20	34
Undistributed equity earnings	(4)	(5)			(9)	(2)	(1)	(4)	10	3
Gain from equity interest transfer	—	84			84	—	—	—	—	—
Deferred revenues and other liabilities	—	2			2	(9)	1	2	1	(5)
Other	(2)	(7)			(9)	(1)	(3)	2	(3)	(5)
EBITDA**	285	315			600	255	289	293	314	1,151
Proportional share of equity affiliates’ net interest, taxes and depreciation and amortization	35	38			73	26	29	30	31	116
Expenses indemnified or prefunded by     Phillips 66	—	—			—	—	1	—	—	1
Transaction costs associated with acquisitions	1	—			1	—	—	—	—	—
Gain from equity interest transfer	—	(84)			(84)	—	—	—	—	—
Adjusted EBITDA**	321	269			590	281	319	323	345	1,268
Plus:
Deferred revenue impacts*†	2	5			7	—	(4)	—	(2)	(6)
Less:
Equity affiliate distributions less than (more than) proportional EBITDA	1	(10)			(9)	9	13	9	25	56
Maintenance capital expenditures†	15	28			43	9	12	25	28	74
Net interest expense	28	29			57	27	26	25	27	105
Preferred unit distributions	10	9			19	10	9	9	9	37
Income taxes paid	—	—			—	—	1	—	—	1
Distributable cash flow**	269	218			487	226	254	255	254	989
* Difference between cash receipts and revenue recognition.
** See note on the use of non-GAAP measures.
† Excludes Merey Sweeny capital reimbursements and turnaround impacts.

Use of Non-GAAP Financial Information—This earnings release supplemental data includes the terms “EBITDA,” “adjusted EBITDA,” “distributable cash flow,” “coverage ratio,” and “adjusted capital spending.” These are non-GAAP financial measures. EBITDA and adjusted EBITDA are included to help facilitate comparisons of operating performance of the Partnership with other companies in our industry. EBITDA and distributable cash flow help facilitate an assessment of our ability to generate sufficient cash flow to make distributions to our partners. We believe that the presentation of EBITDA, adjusted EBITDA and distributable cash flow provides useful information to investors in assessing our financial condition and results of operations. Our coverage ratio is calculated as distributable cash flow divided by total cash distributions and is included to help indicate the Partnership’s ability to pay cash distributions from current earnings. Additionally, adjusted capital spending is a non-GAAP financial measure that demonstrates Phillips 66 Partners' net share of capital spending. The GAAP performance measure most directly comparable to EBITDA and adjusted EBITDA is net income. The GAAP liquidity measure most comparable to EBITDA and distributable cash flow is net cash provided by operating activities. The GAAP financial measure most comparable to our coverage ratio is calculated as net cash provided by operating activities divided by total cash distributions. The GAAP financial measure most comparable to adjusted capital spending is capital expenditures and investments. These non-GAAP financial measures should not be considered as alternatives to their comparable GAAP measures. They have important limitations as analytical tools because they exclude some but not all items that affect their corresponding GAAP measures. They should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP. Additionally, because EBITDA, adjusted EBITDA, distributable cash flow, coverage ratio and adjusted capital spending may be defined differently by other companies in our industry, our definition of those measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

Reconciliations of these non-GAAP measures to their comparable GAAP measures are included in this earnings release supplemental data. Additionally, the disaggregation of adjusted capital spending between expansion and maintenance is not a distinction recognized under GAAP. We provide such disaggregation because our partnership agreement requires that we treat expansion and maintenance capital differently for certain 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. We believe this is an important distinction in our liquidity profile.

Page 5

XML

Document and Entity Information Document and Entity Information	Jul. 31, 2020
Document and Entity Information [Abstract]
Document Type	8-K
Document Period End Date	Jul. 31, 2020
Entity Registrant Name	Phillips 66 Partners LP
Entity Incorporation, State or Country Code	DE
Entity File Number	001-36011
Entity Tax Identification Number	38-3899432
Entity Address, Address Line One	2331 CityWest Boulevard
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77042
City Area Code	855
Local Phone Number	283-9237
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Units, Representing Limited Partner Interests
Trading Symbol	PSXP
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0001572910
Amendment Flag	false