Reported second-quarter earnings of $225 million and adjusted EBITDA of $337 million
Announced quarterly distribution of $0.875 per common unit

Phillips 66 Partners LP (NYSE:PSXP) announces second-quarter 2021 earnings of $225 million, or $0.91 per diluted common unit. Cash from operations was $286 million, and distributable cash flow was $267 million. Adjusted EBITDA was $337 million in the second quarter, compared with $289 million in the prior quarter.

"This quarter we operated well and delivered solid financial performance," said Greg Garland, Phillips 66 Partners Chairman and CEO. "Our results reflect higher throughput on our wholly owned and joint venture assets. During the quarter, we advanced construction of the C2G Pipeline and plan to begin operations by the fourth quarter of this year. We continue to operate our assets safely and reliably and maintain our strong financial position through disciplined capital allocation."

On July 20, 2021, the general partner's board of directors declared a second-quarter 2021 cash distribution of $0.875 per common unit, or $3.50 per unit on an annualized basis.

Financial Results

Phillips 66 Partners' second-quarter 2021 earnings were $225 million, compared with a loss of $18 million in the first quarter. First-quarter results included a $198 million impairment resulting from the Partnership's decision to exit the Liberty Pipeline project. The Partnership reported adjusted EBITDA of $337 million in the second quarter, compared with $289 million in the prior quarter. The increase in second-quarter earnings and adjusted EBITDA reflect higher volumes and lower utility costs at the Partnership's wholly owned and joint venture assets following the first-quarter winter storms and higher pipeline and terminal volumes from increased utilization at Phillips 66-operated refineries.

Liquidity, Capital Expenditures and Investments

As of June 30, 2021, total debt outstanding was $3.9 billion. The Partnership had $2 million in cash and cash equivalents and $734 million available under its revolving credit facility.

The Partnership's capital expenditures and investments for the quarter were $61 million. Growth capital included spend on the C2G Pipeline project and funding for the Bakken Pipeline optimization project.

On April 1, 2021, Phillips 66 Partners repaid the remaining $50 million of tax-exempt bonds. Also in April, the Partnership borrowed $450 million under a new term loan agreement. Proceeds were primarily used to repay amounts borrowed under the Partnership's $750 million revolving credit facility.

Strategic Update

Phillips 66 Partners continued construction of the C2G Pipeline, a 16 inch ethane pipeline that will connect its Clemens Caverns storage facility to petrochemical facilities in Gregory, Texas, near Corpus Christi, Texas. The project is backed by long-term commitments. The pipeline is expected to be operational in the fourth quarter of 2021.

The Bakken Pipeline optimization project, supported by minimum volume commitments from long-term contracts, continues to progress with the next phase of incremental capacity commencing service in August.

Investor Webcast

Members of Phillips 66 Partners executive management will host a webcast today at 3 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 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.

^{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 included 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 equity affiliates transport, fractionate, terminal and store; the tariff rates with respect to volumes transported through our regulated assets, which are subject to review and possible adjustment by federal and state regulators; fluctuations in the prices for crude oil, refined petroleum products and NGL; the continuing effects of the COVID-19 pandemic and its negative impact on the demand for refined products; changes in governmental policies relating to crude oil, refined petroleum products or NGL pricing, regulation, taxation, or exports; liabilities associated with the risks and operational hazards inherent in transporting, fractionating, terminaling and storing crude oil, refined petroleum products and NGL; curtailment of operations due to accidents, severe weather (including as a result of climate change) or natural disasters, riots, strikes or lockouts; the inability to obtain or maintain permits, in a timely manner or at all, and the possible revocation or modification of permits; the operation, financing and distribution decisions of our equity affiliates; costs to comply with environmental laws and safety regulations; failure of information technology due to various causes, including unauthorized access or attacks; changes to the costs to deliver and transport 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 capital projects on time and within budget; general domestic and international economic and political developments including armed hostilities, expropriation of assets, and other political, economic or diplomatic developments, including those caused by public health issues; our ability to comply with our debt covenants and to incur additional indebtedness on favorable terms; changes in tax, environmental and other laws and 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 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" and "coverage ratio." 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. The GAAP performance measure most directly comparable to EBITDA and adjusted EBITDA is net income (loss). 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. 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 and coverage ratio 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 in the release to earnings or losses refer to net income or losses attributable to the Partnership. References to EBITDA refer to earnings before interest, income taxes, depreciation and amortization.}

Results of Operations (Unaudited)

Summarized Financial Statement Information
	Millions of Dollars Except as Indicated
	Q2 2021			Q1 2021
Selected Income Statement Data
Total revenues and other income		$	423		376
Net income (loss)		234			(11)
Net income (loss) attributable to the Partnership		225			(18)

Adjusted EBITDA		337			289
Distributable cash flow		267			233

Net Income (Loss) Attributable to the Partnership Per Limited Partner Unit—Diluted (Dollars)
Common units		$	0.91		(0.13)

Selected Balance Sheet Data
Cash and cash equivalents		$	2		3
Equity investments		2,962			3,029
Total assets		7,001			7,053
Total debt		3,910			3,944
Equity held by public
Preferred units		729			749
Common units		2,649			2,647
Equity held by Phillips 66
Common units		(820)			(828)

Statement of Income (Loss)

	Millions of Dollars
	Q2 2021			Q1 2021
Revenues and Other Income
Operating revenues—related parties		$	274		245
Operating revenues—third parties		6			7
Equity in earnings of affiliates		142			124
Other income		1			—
Total revenues and other income		423			376

Costs and Expenses
Operating and maintenance expenses		93			95
Depreciation		34			34
Impairments		—			198
General and administrative expenses		18			17
Taxes other than income taxes		11			10
Interest and debt expense		32			33
Total costs and expenses		188			387
Income (loss) before income taxes		235			(11)
Income tax expense		1			—
Net Income (Loss)		234			(11)
Less: Net income attributable to noncontrolling interest		9			7
Net Income (Loss) Attributable to the Partnership		225			(18)
Less: Preferred unitholders' interest in net income (loss) attributable to the Partnership		12			12
Limited Partners' Interest in Net Income (Loss) Attributable to the Partnership		$	213		(30)

Selected Operating Data

	Q2 2021			Q1 2021
Wholly Owned Operating Data
Pipelines
Pipeline revenues (millions of dollars)		$	121		104
Pipeline volumes⁽¹⁾(thousands of barrels daily)
Crude oil		957			796
Refined petroleum products and NGL		1,029			809
Total		1,986			1,605

Average pipeline revenue per barrel (dollars)		$	0.66		0.71

Terminals
Terminal revenues (millions of dollars)		$	43		39
Terminal throughput (thousands of barrels daily)
Crude oil⁽²⁾		397			374
Refined petroleum products		827			657
Total		1,224			1,031

Average terminaling revenue per barrel (dollars)		$	0.38		0.41

Storage, processing and other revenues (millions of dollars)		$	116		109
Total Operating Revenues (millions of dollars)		$	280		252

Joint Venture Operating Data⁽³⁾
Crude oil, refined petroleum products and NGL (thousands of barrels daily)		1,327			1,052
^{(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 2021			Q1 2021
Cash Distributions^†
Common units—public		$	51		52
Common units—Phillips 66		148			148
Total		$	199		200

Cash Distribution Per Common Unit (Dollars)		$	0.875		0.875

Coverage Ratio*		1.34			1.17
^{†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 1.44x and 1.14x at Q2 2021 and Q1 2021, respectively.}

Reconciliation of Adjusted EBITDA and Distributable Cash Flow to Net Income (Loss) Attributable to the Partnership

	Millions of Dollars
	Q2 2021		Q1 2021

Net Income (Loss) Attributable to the Partnership	$	225	(18)
Plus:
Net income attributable to noncontrolling interest	9		7
Net Income (Loss)	234		(11)
Plus:
Depreciation	34		34
Net interest expense	32		33
Income tax expense	1		—
EBITDA	301		56
Plus:
Proportional share of equity affiliates' net interest, taxes, depreciation and amortization, and impairments	51		49
Expenses indemnified or prefunded by Phillips 66	1		—
Impairments	—		198
Less:
Adjusted EBITDA attributable to noncontrolling interest	16		14
Adjusted EBITDA	337		289
Plus:
Deferred revenue impacts*^†	(4)		9
Less:
Equity affiliate distributions less than proportional adjusted EBITDA	3		14
Maintenance capital expenditures^†	17		6
Net interest expense	32		33
Preferred unit distributions	12		12
Income taxes paid	2		—
Distributable Cash Flow	$	267	233
^*^{Difference between cash receipts and revenue recognition.}
^{†Excludes Merey Sweeny capital reimbursements and turnaround impacts.}

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

	Millions of Dollars
	Q2 2021		Q1 2021

Net Cash Provided by Operating Activities	$	286	227
Plus:
Net interest expense	32		33
Income tax expense	1		—
Changes in working capital	(11)		(11)
Undistributed equity earnings	(7)		5
Impairments	—		(198)
Deferred revenues and other liabilities	2		—
Other	(2)		—
EBITDA	301		56
Plus:
Proportional share of equity affiliates' net interest, taxes, depreciation and amortization, and impairments	51		49
Expenses indemnified or prefunded by Phillips 66	1		—
Impairments	—		198
Less:
Adjusted EBITDA attributable to noncontrolling interest	16		14
Adjusted EBITDA	337		289
Plus:
Deferred revenue impacts*^†	(4)		9
Less:
Equity affiliate distributions less than proportional adjusted EBITDA	3		14
Maintenance capital expenditures^†	17		6
Net interest expense	32		33
Preferred unit distributions	12		12
Income taxes paid	2		—
Distributable Cash Flow	$	267	233
^*^{Difference between cash receipts and revenue recognition.}
^{†Excludes Merey Sweeny capital reimbursements and turnaround impacts.}

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