2017
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UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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FORM 10-K
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(Mark One)
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[X]
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended
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December 31, 2017
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OR
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from
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to
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Commission file number:
001-35349
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Phillips 66
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(Exact name of registrant as specified in its charter)
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Delaware
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45-3779385
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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2331 CityWest Blvd., Houston, Texas 77042
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(Address of principal executive offices) (Zip Code)
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Registrant’s telephone number, including area code:
281-293-6600
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Name of each exchange on which registered
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Common Stock, $0.01 Par Value
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New York Stock Exchange
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TABLE OF CONTENTS
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Item
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Page
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1)
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Midstream—
Provides crude oil and refined products transportation, terminaling and processing services, as well as natural gas, natural gas liquids (NGL) and liquefied petroleum gas (LPG) transportation, storage, processing and marketing services, mainly in the United States.
This segment includes our master limited partnership (MLP), Phillips 66 Partners LP (Phillips 66 Partners), as well as our
50 percent
equity investment in DCP Midstream, LLC (DCP Midstream).
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2)
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Chemicals—
Consists of our
50 percent
equity investment in Chevron Phillips Chemical Company LLC (CPChem), which manufactures and markets petrochemicals and plastics on a worldwide basis.
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3)
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Refining—
Refines crude oil and other feedstocks into petroleum products (such as gasoline, distillates and aviation fuels) at
13
refineries in the United States and Europe.
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4)
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Marketing and Specialties—
Purchases for resale and markets refined petroleum products, mainly in the United States and Europe. In addition, this segment includes the manufacturing and marketing of specialty products (such as base oils and lubricants), as well as power generation operations.
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•
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Transportation
—Transports crude oil and other feedstocks to our refineries and other locations, delivers refined products to market, and provides terminaling and storage services for crude oil and petroleum products.
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•
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NGL and Other
—Transports, stores, fractionates and markets NGL in the United States, exports LPG and provides other fee-based processing services.
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•
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DCP Midstream
—Gathers, processes, transports and markets natural gas and transports, fractionates and markets NGL.
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•
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A 25 percent interest in both Dakota Access, LLC (Dakota Access) and Energy Transfer Crude Oil Company, LLC (ETCO), which collectively own the Bakken Pipeline.
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•
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A 100 percent interest in Merey Sweeny, L.P. (MSLP), a limited partnership that owns a delayed coker and performs crude oil processing at our Sweeny Refinery.
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Name
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Origination/Terminus
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Interest
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Size
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Length
(Miles)
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Gross Capacity
(MBD)
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Crude and Feedstocks
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Bakken Pipeline †
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North Dakota/Nederland, TX
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25
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%
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30”
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1,915
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525
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Bayou Bridge †
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Nederland, TX/Lake Charles, LA
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40
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30”
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49
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480
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Clifton Ridge †
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Clifton Ridge, LA/Westlake, LA
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100
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20”
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10
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260
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Cushing †
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Cushing, OK/Ponca City, OK
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100
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18”
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62
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130
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Eagle Ford Gathering †
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Helena, TX
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100
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6”
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6
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20
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Eagle Ford Gathering †
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Tilden, TX/Whitsett, TX
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100
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6”-10”
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22
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34
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Glacier †
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Cut Bank, MT/Billings, MT
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79
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8”-12”
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865
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126
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Line O †
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Cushing, OK/Borger, TX
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100
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10”
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276
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37
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Line 80 †
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Gaines, TX/Borger, TX
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100
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8”, 12”
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237
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28
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Line 100
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Taft, CA/Lost Hills, CA
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100
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8”, 10”, 12”
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79
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54
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Line 200
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Lost Hills, CA/Rodeo, CA
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100
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12”, 16”
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228
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93
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Line 300
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Nipomo, CA/Arroyo Grande, CA
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100
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8”, 10”, 12”
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69
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48
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Line 400
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Arroyo Grande, CA/Lost Hills, CA
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100
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8”, 10”, 12”
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147
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40
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Louisiana Crude Gathering
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Rayne, LA/Westlake, LA
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100
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4”-8”
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80
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25
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North Texas Crude †
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Wichita Falls, TX
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100
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2”-16”
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224
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28
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Oklahoma Mainline †
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Wichita Falls, TX/Ponca City, OK
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100
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12”
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217
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100
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Sacagawea †
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Keene, ND/Stanley, ND
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50
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16”
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95
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175
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STACK PL †
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Cashion, OK/Cushing, OK
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50
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8”-16”
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149
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250
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Sweeny Crude
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Sweeny, TX/Freeport, TX
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100
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12”, 24”, 30”
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56
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265
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WA Line †
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Odessa, TX/Borger, TX
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100
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12”, 14”
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289
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104
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West Texas Gathering †
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Permian Basin
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100
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4”-14”
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757
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115
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Petroleum Products
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ATA Line †
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Amarillo, TX/Albuquerque, NM
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50
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6”, 10”
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293
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34
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Borger to Amarillo †
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Borger, TX/Amarillo, TX
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100
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8”, 10”
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93
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76
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Borger-Denver
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McKee, TX/Denver, CO
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70
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6”-12”
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405
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38
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Cherokee East †
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Medford, OK/Mount Vernon, MO
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100
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10”, 12”
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287
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55
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Cherokee North †
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Ponca City, OK/Arkansas City, KS
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100
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10”
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29
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57
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Cherokee South †
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Ponca City, OK/Oklahoma City, OK
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100
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8”
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90
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46
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Cross Channel Connector †
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Pasadena, TX/Galena Park, TX
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100
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20”
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5
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180
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Explorer †
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Texas Gulf Coast/Chicago, IL
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22
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24”, 28”
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1,830
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660
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Gold Line †
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Borger, TX/East St. Louis, IL
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100
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8”-16”
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681
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120
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Harbor
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Woodbury, NJ/Linden, NJ
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33
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16”
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80
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171
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Heartland*
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McPherson, KS/Des Moines, IA
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50
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8”, 6”
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49
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30
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LAX Jet Line
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Wilmington, CA/Los Angeles, CA
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50
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8”
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19
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50
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Los Angeles Products
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Torrance, CA/Los Angeles, CA
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100
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6”, 12”
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22
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112
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Paola Products †
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Paola, KS/Kansas City, KS
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100
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8”, 10”
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106
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96
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Pioneer
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Sinclair, WY/Salt Lake City, UT
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50
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8”, 12”
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562
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63
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Richmond
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Rodeo, CA/Richmond, CA
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100
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6”
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14
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26
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SAAL †
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Amarillo, TX/Abernathy, TX
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33
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6”
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102
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33
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SAAL †
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Abernathy, TX/Lubbock, TX
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54
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6”
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19
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30
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Seminoe †
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Billings, MT/Sinclair, WY
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100
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6”-10”
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342
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33
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Standish †
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Marland Junction, OK/Wichita, KS
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100
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18”
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92
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72
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Sweeny to Pasadena †
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Sweeny, TX/Pasadena, TX
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100
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12”, 18”
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120
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294
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Torrance Products
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Wilmington, CA/Torrance, CA
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100
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10”, 12”
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8
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161
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Watson Products Line
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Wilmington, CA/Long Beach, CA
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100
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20”
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9
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238
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Yellowstone
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Billings, MT/Moses Lake, WA
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46
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6”-10”
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710
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66
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Name
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Origination/Terminus
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Interest
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Size
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Length (Miles)
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Gross Capacity
(MBD)
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NGL
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Chisholm
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Kingfisher, OK/Conway, KS
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50
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%
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4”-10”
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202
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42
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Powder River
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Sage Creek, WY/Borger, TX
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100
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|
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6”-8”
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705
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14
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River Parish NGL †
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Southeast Louisiana
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100
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4”-20”
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510
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133
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Sand Hills**†
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Permian Basin/Mont Belvieu, TX
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33
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20”
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1,190
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315
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Skelly-Belvieu
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Skellytown, TX/Mont Belvieu, TX
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50
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8”
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571
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45
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Southern Hills**†
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U.S. Midcontinent/Mont Belvieu, TX
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33
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20”
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941
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140
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Sweeny NGL
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Brazoria, TX/Sweeny, TX
|
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100
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20”
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18
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204
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TX Panhandle Y1/Y2
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Sher-Han, TX/Borger, TX
|
|
100
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3”-10”
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299
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61
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LPG
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Blue Line
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Borger, TX/East St. Louis, IL
|
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100
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8”-12”
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688
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|
29
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Brown Line †
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Ponca City, OK/Wichita, KS
|
|
100
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|
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8”, 10”
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76
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|
26
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Conway to Wichita
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Conway, KS/Wichita, KS
|
|
100
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12”
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55
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38
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Medford †
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Ponca City, OK/Medford, OK
|
|
100
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4”-6”
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42
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10
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Sweeny LPG Lines
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Sweeny, TX/Mont Belvieu & Freeport, TX
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100
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10”-20”
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|
246
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942
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Natural Gas
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Rockies Express***
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West to East
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Meeker, CO/Clarington, OH
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25
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36”-42”
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1,712
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1.8
Bcf/d
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East to West
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Clarington, OH/Moultrie, IL
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|
25
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24”, 42”
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670
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2.6
Bcf/d
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Facility Name
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Location
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Interest
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|
|
Gross Storage Capacity (MBbl)
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|
|
Gross Rack Capacity (MBD)
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Albuquerque †
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New Mexico
|
|
100
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%
|
|
244
|
|
|
18
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|
Amarillo †
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Texas
|
|
100
|
|
|
277
|
|
|
29
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Beaumont
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Texas
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|
100
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|
|
3,700
|
|
|
8
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|
Billings
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Montana
|
|
100
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|
|
88
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|
|
16
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|
Bozeman
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|
Montana
|
|
100
|
|
|
113
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|
|
13
|
|
Casper †
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|
Montana
|
|
100
|
|
|
365
|
|
|
7
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|
Colton
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California
|
|
100
|
|
|
211
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|
|
21
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|
Denver
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|
Colorado
|
|
100
|
|
|
310
|
|
|
43
|
|
Des Moines
|
|
Iowa
|
|
50
|
|
|
206
|
|
|
15
|
|
East St. Louis †
|
|
Illinois
|
|
100
|
|
|
2,085
|
|
|
78
|
|
Glenpool †
|
|
Oklahoma
|
|
100
|
|
|
588
|
|
|
19
|
|
Great Falls
|
|
Montana
|
|
100
|
|
|
198
|
|
|
12
|
|
Hartford †
|
|
Illinois
|
|
100
|
|
|
1,075
|
|
|
25
|
|
Helena
|
|
Montana
|
|
100
|
|
|
178
|
|
|
10
|
|
Jefferson City †
|
|
Missouri
|
|
100
|
|
|
110
|
|
|
16
|
|
Kansas City †
|
|
Kansas
|
|
100
|
|
|
1,294
|
|
|
66
|
|
La Junta
|
|
Colorado
|
|
100
|
|
|
101
|
|
|
10
|
|
Lincoln
|
|
Nebraska
|
|
100
|
|
|
219
|
|
|
21
|
|
Linden †
|
|
New Jersey
|
|
100
|
|
|
429
|
|
|
121
|
|
Los Angeles
|
|
California
|
|
100
|
|
|
116
|
|
|
75
|
|
Lubbock †
|
|
Texas
|
|
100
|
|
|
179
|
|
|
17
|
|
Missoula
|
|
Montana
|
|
50
|
|
|
368
|
|
|
29
|
|
Moses Lake
|
|
Washington
|
|
50
|
|
|
186
|
|
|
13
|
|
Mount Vernon †
|
|
Missouri
|
|
100
|
|
|
363
|
|
|
46
|
|
North Salt Lake
|
|
Utah
|
|
50
|
|
|
738
|
|
|
41
|
|
Oklahoma City †
|
|
Oklahoma
|
|
100
|
|
|
352
|
|
|
48
|
|
Pasadena †
|
|
Texas
|
|
100
|
|
|
3,210
|
|
|
65
|
|
Ponca City †
|
|
Oklahoma
|
|
100
|
|
|
51
|
|
|
23
|
|
Portland
|
|
Oregon
|
|
100
|
|
|
664
|
|
|
33
|
|
Renton
|
|
Washington
|
|
100
|
|
|
228
|
|
|
20
|
|
Richmond
|
|
California
|
|
100
|
|
|
334
|
|
|
28
|
|
Rock Springs
|
|
Wyoming
|
|
100
|
|
|
125
|
|
|
19
|
|
Sacramento
|
|
California
|
|
100
|
|
|
141
|
|
|
13
|
|
Sheridan †
|
|
Wyoming
|
|
100
|
|
|
86
|
|
|
15
|
|
Spokane
|
|
Washington
|
|
100
|
|
|
351
|
|
|
24
|
|
Tacoma
|
|
Washington
|
|
100
|
|
|
307
|
|
|
17
|
|
Tremley Point †
|
|
New Jersey
|
|
100
|
|
|
1,593
|
|
|
39
|
|
Westlake
|
|
Louisiana
|
|
100
|
|
|
128
|
|
|
16
|
|
Wichita Falls
|
|
Texas
|
|
100
|
|
|
303
|
|
|
15
|
|
Wichita North †
|
|
Kansas
|
|
100
|
|
|
679
|
|
|
19
|
|
Facility Name
|
|
Location
|
|
Interest
|
|
|
Gross Storage Capacity (MBbl)
|
|
|
Gross Loading Capacity*
|
|
Crude and Feedstocks
|
|
|
|
|
|
|
|
|
|||
Beaumont
|
|
Texas
|
|
100
|
%
|
|
7,400
|
|
|
N/A
|
|
Billings †
|
|
Montana
|
|
100
|
|
|
270
|
|
|
N/A
|
|
Borger
|
|
Texas
|
|
50
|
|
|
721
|
|
|
N/A
|
|
Clifton Ridge †
|
|
Louisiana
|
|
100
|
|
|
3,410
|
|
|
N/A
|
|
Cushing †
|
|
Oklahoma
|
|
100
|
|
|
700
|
|
|
N/A
|
|
Freeport
|
|
Texas
|
|
100
|
|
|
2,144
|
|
|
N/A
|
|
Jones Creek
|
|
Texas
|
|
100
|
|
|
2,577
|
|
|
N/A
|
|
Junction
|
|
California
|
|
100
|
|
|
523
|
|
|
N/A
|
|
Keene †
|
|
North Dakota
|
|
50
|
|
|
490
|
|
|
N/A
|
|
McKittrick
|
|
California
|
|
100
|
|
|
237
|
|
|
N/A
|
|
Odessa †
|
|
Texas
|
|
100
|
|
|
523
|
|
|
N/A
|
|
Palermo †
|
|
North Dakota
|
|
70
|
|
|
206
|
|
|
N/A
|
|
Pecan Grove †
|
|
Louisiana
|
|
100
|
|
|
142
|
|
|
N/A
|
|
Ponca City †
|
|
Oklahoma
|
|
100
|
|
|
1,200
|
|
|
N/A
|
|
Santa Margarita
|
|
California
|
|
100
|
|
|
335
|
|
|
N/A
|
|
Santa Maria
|
|
California
|
|
100
|
|
|
112
|
|
|
N/A
|
|
Tepetate
|
|
Louisiana
|
|
100
|
|
|
152
|
|
|
N/A
|
|
Torrance
|
|
California
|
|
100
|
|
|
309
|
|
|
N/A
|
|
Wichita Falls †
|
|
Texas
|
|
100
|
|
|
240
|
|
|
N/A
|
|
Petroleum Coke
|
|
|
|
|
|
|
|
|
|||
Lake Charles
|
|
Louisiana
|
|
50
|
|
|
N/A
|
|
|
N/A
|
|
Rail
|
|
|
|
|
|
|
|
|
|||
Bayway †
|
|
New Jersey
|
|
100
|
|
|
N/A
|
|
|
75
|
|
Beaumont
|
|
Texas
|
|
100
|
|
|
N/A
|
|
|
20
|
|
Ferndale †
|
|
Washington
|
|
100
|
|
|
N/A
|
|
|
30
|
|
Missoula
|
|
Montana
|
|
50
|
|
|
N/A
|
|
|
41
|
|
Palermo †
|
|
North Dakota
|
|
70
|
|
|
N/A
|
|
|
100
|
|
Thompson Falls
|
|
Montana
|
|
50
|
|
|
N/A
|
|
|
42
|
|
Marine
|
|
|
|
|
|
|
|
|
|||
Beaumont
|
|
Texas
|
|
100
|
|
|
N/A
|
|
|
37
|
|
Clifton Ridge †
|
|
Louisiana
|
|
100
|
|
|
N/A
|
|
|
48
|
|
Hartford †
|
|
Illinois
|
|
100
|
|
|
N/A
|
|
|
3
|
|
Pecan Grove †
|
|
Louisiana
|
|
100
|
|
|
N/A
|
|
|
6
|
|
Portland
|
|
Oregon
|
|
100
|
|
|
N/A
|
|
|
10
|
|
Richmond
|
|
California
|
|
100
|
|
|
N/A
|
|
|
3
|
|
Tacoma
|
|
Washington
|
|
100
|
|
|
N/A
|
|
|
12
|
|
Tremley Point †
|
|
New Jersey
|
|
100
|
|
|
N/A
|
|
|
7
|
|
NGL Facilities
|
|
|
|
|
|
|
|
|
|||
Freeport
|
|
Texas
|
|
100
|
|
|
1,000
|
|
|
36
|
|
River Parish †
|
|
Louisiana
|
|
100
|
|
|
1,500
|
|
|
N/A
|
|
Clemens †
|
|
Texas
|
|
100
|
|
|
9,000
|
|
|
N/A
|
|
•
|
A U.S. Gulf Coast NGL market hub comprising the Freeport LPG Export Terminal and Phillips 66 Partners’ 100,000 BPD Sweeny Fractionator. These assets are supported by 9 million barrels of gross capacity at Phillips 66 Partners’ Clemens storage facility. We refer to these facilities as the “Sweeny Hub.”
|
•
|
A 22.5 percent interest in Gulf Coast Fractionators, which owns an NGL fractionation plant in Mont Belvieu, Texas. We operate the facility, and our net share of its capacity is 32,625 BPD.
|
•
|
A 12.5 percent undivided interest in a fractionation plant in Mont Belvieu, Texas. Our net share of its capacity is 30,250 BPD.
|
•
|
A 40 percent undivided interest in a fractionation plant in Conway, Kansas. Our net share of its capacity is 43,200 BPD.
|
•
|
Phillips 66 Partners owns the River Parish NGL logistics system in southeast Louisiana, comprising approximately 500 miles of pipelines and a storage cavern connecting multiple fractionation facilities, refineries and a petrochemical facility.
|
•
|
Phillips 66 Partners owns a direct one-third interest in both the DCP Sand Hills Pipeline, LLC (Sand Hills) and DCP Southern Hills Pipeline, LLC, which own pipelines that connect Eagle Ford, Permian and Midcontinent production to the Mont Belvieu, Texas, market.
|
•
|
Phillips 66 Partners, through its ownership of MSLP, owns a 125,000 BPD capacity vacuum distillation unit and a 70,000 BPD capacity delayed coker unit located at our Sweeny Refinery in Old Ocean, Texas.
|
•
|
In the first quarter of 2017, DCP Midstream announced the construction of a 200-million-cubic-feet-per-day (MMcf/d) natural gas processing plant, the Mewbourn 3 plant, and further expansion of its Grand Parkway gathering system. Both are located in the Denver-Julesburg (DJ) Basin and are expected to be in service in the third quarter of 2018.
|
•
|
In the second quarter of 2017, DCP Midstream approved the 200 MMcf/d O'Connor 2 natural gas processing plant in the DJ Basin. The O'Connor 2 plant and associated gathering infrastructure are expected to be in service in 2019.
|
•
|
In the second quarter of 2017, DCP Midstream increased capacity in the DJ Basin by up to 40 MMcf/d by placing additional field compression and plant bypass infrastructure in service.
|
•
|
In the third quarter of 2017, DCP Midstream executed definitive joint-venture agreements on its 25 percent interest in the development of the Gulf Coast Express pipeline project (GCX project). The GCX project is designed to transport up to 1.98 Bcf/d of natural gas. The mostly 42-inch pipeline would traverse approximately 500 miles and be placed in service in 2019, pending regulatory approvals.
|
•
|
DCP Midstream is jointly developing the Cheyenne Connector pipeline with Tallgrass Energy Partners, LP (Tallgrass) and Western Gas Partners, LP (Western Gas). Tallgrass serves as the operator, and both DCP Midstream and Western Gas hold an option to invest in this pipeline at a later date. The Cheyenne Connector pipeline will provide takeaway solutions with capacity of at least 600 MMcf/d for DCP Midstream's DJ Basin assets, connecting natural gas to REX’s Cheyenne Hub, where it can then be delivered to numerous demand markets across the country.
|
•
|
DCP Midstream is currently expanding the Sand Hills Pipeline to 365,000 BPD, which is expected to be completed in the first quarter of 2018. Further expansion to 450,000 BPD is progressing and is expected to be in service during the second half of 2018. This expansion includes a partial looping of the pipeline and the addition of new pump stations.
|
|
Millions of Pounds per Year
|
|
|||
|
U.S.
|
|
|
Worldwide
|
|
O&P
|
|
|
|
||
Ethylene
|
8,110
|
|
|
10,585
|
|
Propylene
|
2,675
|
|
|
3,180
|
|
High-density polyethylene
|
5,305
|
|
|
7,600
|
|
Low-density polyethylene
|
620
|
|
|
620
|
|
Linear low-density polyethylene
|
1,590
|
|
|
1,590
|
|
Polypropylene
|
—
|
|
|
310
|
|
Normal alpha olefins
|
2,335
|
|
|
2,850
|
|
Polyalphaolefins
|
125
|
|
|
255
|
|
Polyethylene pipe
|
590
|
|
|
590
|
|
Total O&P
|
21,350
|
|
|
27,580
|
|
|
|
|
|
||
SA&S
|
|
|
|
||
Benzene
|
1,600
|
|
|
2,530
|
|
Cyclohexane
|
1,060
|
|
|
1,455
|
|
Paraxylene
|
1,000
|
|
|
1,000
|
|
Styrene
|
1,050
|
|
|
1,875
|
|
Polystyrene
|
835
|
|
|
1,070
|
|
Specialty chemicals
|
439
|
|
|
574
|
|
Total SA&S
|
5,984
|
|
|
8,504
|
|
Total O&P and SA&S
|
27,334
|
|
|
36,084
|
|
|
|
|
|
|
|
Thousands of Barrels Daily
|
|
|
|||||||||||
Region/Refinery
|
|
Location
|
|
Interest
|
|
|
Net Crude Throughput
Capacity
|
|
Net Clean Product
Capacity**
|
|
Clean
Product
Yield
Capability
|
|
|||||||
At
December 31
2017
|
|
Effective January 1
2018
|
|
|
Gasolines
|
|
|
Distillates
|
|
|
|||||||||
Atlantic Basin/Europe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Bayway
|
|
Linden, NJ
|
|
100.00
|
%
|
|
241
|
|
258
|
|
|
155
|
|
|
130
|
|
|
92
|
%
|
Humber
|
|
N. Lincolnshire, United Kingdom
|
|
100.00
|
|
|
221
|
|
221
|
|
|
95
|
|
|
115
|
|
|
81
|
|
MiRO*
|
|
Karlsruhe, Germany
|
|
18.75
|
|
|
58
|
|
58
|
|
|
25
|
|
|
25
|
|
|
87
|
|
|
|
|
|
|
|
520
|
|
537
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Gulf Coast
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Alliance
|
|
Belle Chasse, LA
|
|
100.00
|
|
|
247
|
|
247
|
|
|
130
|
|
|
120
|
|
|
87
|
|
Lake Charles
|
|
Westlake, LA
|
|
100.00
|
|
|
249
|
|
249
|
|
|
100
|
|
|
115
|
|
|
70
|
|
Sweeny
|
|
Old Ocean, TX
|
|
100.00
|
|
|
247
|
|
256
|
|
|
135
|
|
|
120
|
|
|
86
|
|
|
|
|
|
|
|
743
|
|
752
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Central Corridor
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Wood River
|
|
Roxana, IL
|
|
50.00
|
|
|
157
|
|
157
|
|
|
85
|
|
|
60
|
|
|
81
|
|
Borger
|
|
Borger, TX
|
|
50.00
|
|
|
73
|
|
73
|
|
|
50
|
|
|
30
|
|
|
91
|
|
Ponca City
|
|
Ponca City, OK
|
|
100.00
|
|
|
203
|
|
203
|
|
|
120
|
|
|
95
|
|
|
93
|
|
Billings
|
|
Billings, MT
|
|
100.00
|
|
|
60
|
|
60
|
|
|
35
|
|
|
30
|
|
|
90
|
|
|
|
|
|
|
|
493
|
|
493
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
West Coast
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ferndale
|
|
Ferndale, WA
|
|
100.00
|
|
|
101
|
|
105
|
|
|
65
|
|
|
35
|
|
|
81
|
|
Los Angeles
|
|
Carson/Wilmington, CA
|
|
100.00
|
|
|
139
|
|
139
|
|
|
85
|
|
|
65
|
|
|
90
|
|
San Francisco
|
|
Arroyo Grande/San Francisco, CA
|
|
100.00
|
|
|
120
|
|
120
|
|
|
60
|
|
|
65
|
|
|
85
|
|
|
|
|
|
|
|
360
|
|
364
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
2,116
|
|
2,146
|
|
|
|
|
|
|
|
|
Characteristics
|
|
Sources
|
|||||||
|
Sweet
|
Medium
Sour
|
Heavy
Sour
|
High
TAN
*
|
|
United
States
|
Canada
|
South
America
|
Europe
|
Middle East
& Africa
|
Bayway
|
l
|
l
|
|
|
|
l
|
l
|
|
|
l
|
Humber
|
l
|
l
|
|
l
|
|
l
|
|
|
l
|
l
|
MiRO
|
l
|
l
|
l
|
|
|
|
|
|
l
|
l
|
Alliance
|
l
|
l
|
|
|
|
l
|
|
|
|
|
Lake Charles
|
l
|
l
|
l
|
l
|
|
l
|
l
|
l
|
|
l
|
Sweeny
|
l
|
l
|
l
|
l
|
|
l
|
l
|
l
|
|
|
Wood River
|
l
|
l
|
l
|
l
|
|
l
|
l
|
|
|
|
Borger
|
|
l
|
l
|
|
|
l
|
l
|
|
|
|
Ponca City
|
l
|
l
|
|
|
|
l
|
l
|
|
|
|
Billings
|
|
l
|
l
|
l
|
|
|
l
|
|
|
|
Ferndale
|
l
|
l
|
|
|
|
l
|
l
|
|
|
|
Los Angeles
|
|
l
|
l
|
l
|
|
l
|
l
|
l
|
|
l
|
San Francisco
|
l
|
l
|
l
|
l
|
|
l
|
|
l
|
|
l
|
•
|
Wood River Refinery
|
•
|
Borger Refinery
|
•
|
Changes in the global economy and the level of foreign and domestic production of crude oil, natural gas and NGL and refined, petrochemical and plastics products.
|
•
|
Availability of feedstocks and refined products and the infrastructure to transport them.
|
•
|
Local factors, including market conditions, the level of operations of other facilities in our markets, and the volume of products imported and exported.
|
•
|
Threatened or actual terrorist incidents, acts of war and other global political conditions.
|
•
|
Government regulations.
|
•
|
Weather conditions, hurricanes or other natural disasters.
|
•
|
The discharge of pollutants into the environment.
|
•
|
Emissions into the atmosphere (such as nitrogen oxides, sulfur dioxide and mercury emissions, and greenhouse gas emissions as they are, or may become, regulated).
|
•
|
The quantity of renewable fuels that must be blended into motor fuels.
|
•
|
The handling, use, storage, transportation, disposal and cleanup of hazardous materials and hazardous and nonhazardous wastes.
|
•
|
The dismantlement and abandonment of our facilities and restoration of our properties at the end of their useful lives.
|
Name
|
Position Held
|
Age*
|
|
|
|
|
|
Greg C. Garland
|
Chairman and Chief Executive Officer
|
60
|
|
Robert A. Herman
|
Executive Vice President, Refining
|
58
|
|
Paula A. Johnson
|
Executive Vice President, Legal and Government Affairs, General Counsel and Corporate Secretary
|
54
|
|
Kevin J. Mitchell
|
Executive Vice President, Finance and Chief Financial Officer
|
51
|
|
Chukwuemeka A. Oyolu
|
Vice President and Controller
|
48
|
|
Item 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
Stock Price
|
|
|
||||||
|
High
|
|
Low
|
|
|
Dividends
|
|
||
2017
|
|
|
|
|
|||||
First Quarter
|
$
|
88.26
|
|
76.28
|
|
|
0.63
|
|
|
Second Quarter
|
83.11
|
|
75.14
|
|
|
0.70
|
|
||
Third Quarter
|
92.19
|
|
80.73
|
|
|
0.70
|
|
||
Fourth Quarter
|
102.43
|
|
89.26
|
|
|
0.70
|
|
||
|
|
|
|
|
|||||
2016
|
|
|
|
|
|||||
First Quarter
|
$
|
90.87
|
|
71.74
|
|
|
0.56
|
|
|
Second Quarter
|
89.31
|
|
76.40
|
|
|
0.63
|
|
||
Third Quarter
|
81.31
|
|
73.67
|
|
|
0.63
|
|
||
Fourth Quarter
|
88.87
|
|
77.66
|
|
|
0.63
|
|
Closing Stock Price at December 29, 2017
|
|
|
|
$
|
101.15
|
|
Closing Stock Price at January 31, 2018
|
|
|
|
$
|
102.40
|
|
Number of Stockholders of Record at January 31, 2018
|
|
|
|
38,605
|
|
|
|
|
|
|
|
|
Millions of Dollars
|
|
|||||
Period
|
Total Number of Shares Purchased*
|
|
|
Average Price Paid per Share
|
|
|
Total Number of Shares Purchased
as Part of Publicly Announced Plans
or Programs**
|
|
|
Approximate Dollar Value of Shares
that May Yet Be Purchased Under the Plans or Programs
|
|
||
|
|
|
|
|
|
|
|
||||||
October 1-31, 2017
|
1,717,513
|
|
|
$
|
92.25
|
|
|
1,717,513
|
|
|
$
|
3,277
|
|
November 1-30, 2017
|
1,675,652
|
|
|
93.30
|
|
|
1,675,652
|
|
|
3,120
|
|
||
December 1-31, 2017
|
1,492,675
|
|
|
99.17
|
|
|
1,492,675
|
|
|
2,972
|
|
||
Total
|
4,885,840
|
|
|
$
|
94.72
|
|
|
4,885,840
|
|
|
|
|
Millions of Dollars Except Per Share Amounts
|
||||||||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Sales and other operating revenues
|
$
|
102,354
|
|
|
84,279
|
|
|
98,975
|
|
|
161,212
|
|
|
171,596
|
|
Income from continuing operations
|
5,248
|
|
|
1,644
|
|
|
4,280
|
|
|
4,091
|
|
|
3,682
|
|
|
Income from continuing operations attributable to Phillips 66
|
5,106
|
|
|
1,555
|
|
|
4,227
|
|
|
4,056
|
|
|
3,665
|
|
|
Per common share
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
9.90
|
|
|
2.94
|
|
|
7.78
|
|
|
7.15
|
|
|
5.97
|
|
|
Diluted
|
9.85
|
|
|
2.92
|
|
|
7.73
|
|
|
7.10
|
|
|
5.92
|
|
|
Net income
|
5,248
|
|
|
1,644
|
|
|
4,280
|
|
|
4,797
|
|
|
3,743
|
|
|
Net income attributable to Phillips 66
|
5,106
|
|
|
1,555
|
|
|
4,227
|
|
|
4,762
|
|
|
3,726
|
|
|
Per common share
|
|
|
|
|
|
|
|
|
|
||||||
Basic
|
9.90
|
|
|
2.94
|
|
|
7.78
|
|
|
8.40
|
|
|
6.07
|
|
|
Diluted
|
9.85
|
|
|
2.92
|
|
|
7.73
|
|
|
8.33
|
|
|
6.02
|
|
|
Total assets
|
54,371
|
|
|
51,653
|
|
|
48,580
|
|
|
48,692
|
|
|
49,769
|
|
|
Long-term debt
|
10,069
|
|
|
9,588
|
|
|
8,843
|
|
|
7,793
|
|
|
6,101
|
|
|
Cash dividends declared per common share
|
2.7300
|
|
|
2.4500
|
|
|
2.1800
|
|
|
1.8900
|
|
|
1.3275
|
|
•
|
Operating Excellence.
Our commitment to operating excellence guides everything we do. We are committed to protecting the health and safety of everyone who has a role in our operations and the communities in which we operate. Continuous improvement in safety, environmental stewardship, reliability and cost efficiency is a fundamental requirement for our company and employees. We employ rigorous training and audit programs to drive ongoing improvement in both personal and process safety as we strive for zero incidents. We achieved a record-low combined injury rate in
2017
. Since we cannot control commodity prices, controlling operating expenses and overhead costs, within the context of our commitment to safety and environmental stewardship, is a high priority. Senior management actively monitors these costs. We are committed to protecting the environment and strive to reduce our environmental footprint throughout our operations.
Optimizing utilization rates at our refineries through reliable and safe operations enables us to capture the value available in the market in terms of prices and margins. During
2017
, our worldwide refining crude oil capacity utilization rate was
95 percent
.
|
•
|
Growth.
We have budgeted
$2.3 billion
in capital expenditures and investments in
2018
, including
$0.6 billion
for Phillips 66 Partners. Additionally, our share of expected capital spending by joint ventures DCP Midstream, LLC (DCP Midstream), Chevron Phillips Chemical Company LLC (CPChem) and WRB Refining LP (WRB) in 2018 is
$0.9 billion
. In Midstream, we plan to invest in our Transportation and NGL businesses, focusing on projects integrated with our existing assets and infrastructure. In Chemicals, CPChem’s capital expenditures are expected to decrease due to completion of its U.S. Gulf Coast Petrochemicals Project. The two polyethylene units started up in September 2017, while commissioning of the ethane cracker is expected to begin in the first
|
•
|
Returns.
We plan to improve refining returns by increasing throughput of advantaged feedstocks, disciplined capital allocation and portfolio optimization. A disciplined capital allocation process ensures we focus investments in projects that generate competitive returns throughout the business cycle. In
2017
, we improved clean product yield in Refining, and in M&S, we continued to enhance our network and brand by re-imaging sites in the United States, while growing our number of sites in Europe.
|
•
|
Distributions.
We believe shareholder value is enhanced through, among other things, consistent growth of regular dividends, complemented by share repurchases. We increased our quarterly dividend rate by
11 percent
during
2017
, and have increased it
250 percent
since the company’s inception in 2012. Regular dividends demonstrate the confidence our Board of Directors and management have in our capital structure and operations’ capability to generate free cash flow throughout the business cycle. In
2017
, we repurchased
$1.6 billion
, or approximately
18.7 million
shares, of our common stock. Also, in October 2017, our Board of Directors authorized up to
$3 billion
of additional share repurchases. At the discretion of our Board of Directors, we plan to increase dividends annually and fund our share repurchase program while continuing to invest in the growth of our business.
|
•
|
High-Performing Organization.
We strive to attract, develop and retain individuals with the knowledge and skills to implement our business strategy and who support our values and culture. Throughout the company, we focus on getting results in the right way and believe success is both what we do and how we do it. We encourage collaboration throughout our company, while valuing differences, respecting diversity, and creating a great place to work. We foster an environment of learning and development through structured programs focused on enhancing functional and technical skills where employees are engaged in our business and committed to their own, as well as the company’s, success.
|
|
Millions of Dollars
|
||||||||
|
Year Ended December 31
|
||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
||||
Midstream
|
$
|
464
|
|
|
280
|
|
|
74
|
|
Chemicals
|
525
|
|
|
583
|
|
|
962
|
|
|
Refining
|
1,404
|
|
|
374
|
|
|
2,555
|
|
|
Marketing and Specialties
|
686
|
|
|
891
|
|
|
1,187
|
|
|
Corporate and Other
|
2,169
|
|
|
(484
|
)
|
|
(498
|
)
|
|
Net income
|
5,248
|
|
|
1,644
|
|
|
4,280
|
|
|
Less: net income attributable to noncontrolling interests
|
142
|
|
|
89
|
|
|
53
|
|
|
Net income attributable to Phillips 66
|
$
|
5,106
|
|
|
1,555
|
|
|
4,227
|
|
•
|
Recognition of a
$2,735 million
provisional income tax benefit from the enactment of the Tax Act in December 2017.
|
•
|
Higher realized refining margins.
|
•
|
Recognition of a
$261 million
after-tax gain from the consolidation of Merey Sweeny, L.P. (MSLP).
|
•
|
Improved equity earnings from affiliates in our Midstream segment.
|
•
|
Increased costs due to Hurricane Harvey, primarily impacting CPChem in our Chemicals segment.
|
•
|
Lower realized marketing margins.
|
•
|
Higher interest and debt expense.
|
•
|
Lower realized refining margins.
|
•
|
Lower olefins and polyolefins margins.
|
•
|
Recognition in 2015 of $242 million of the deferred gain related to the sale in 2013 of the Immingham Combined Heat and Power Plant (ICHP).
|
•
|
Improved results from DCP Midstream, primarily as a result of goodwill and other asset impairments recorded in 2015.
|
•
|
Equity in earnings from our Midstream segment increased $270 million due to improved results from DCP Midstream, primarily driven by improved margins, as well as higher equity in earnings from our Transportation affiliates, including our joint ventures that own the Bakken Pipeline, which started commercial operations in June 2017.
|
•
|
Equity in earnings of WRB increased $207 million, primarily due to higher market crack spreads, partially offset by lower feedstock advantage.
|
•
|
Equity in earnings of CPChem decreased $120 million, primarily due to hurricane-related costs and downtime.
|
•
|
Equity in earnings of CPChem decreased 37 percent, primarily due to lower realized olefins and polyolefins margins.
|
•
|
Equity in earnings of WRB decreased $186 million, mainly resulting from lower market crack spreads, partially offset by higher feedstock advantage.
|
•
|
Equity in earnings of DCP Midstream improved $426 million in 2016, primarily driven by goodwill and other asset impairments recorded by DCP Midstream in 2015.
|
|
Year Ended December 31
|
||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
Millions of Dollars
|
||||||||
Net Income (Loss)
|
|
|
|
|
|
||||
Transportation
|
$
|
376
|
|
|
311
|
|
|
335
|
|
NGL and Other
|
43
|
|
|
2
|
|
|
63
|
|
|
DCP Midstream
|
45
|
|
|
(33
|
)
|
|
(324
|
)
|
|
Total Midstream
|
$
|
464
|
|
|
280
|
|
|
74
|
|
|
Thousands of Barrels Daily
|
|||||||
Transportation Volumes
|
|
|
|
|
|
|||
Pipelines*
|
3,501
|
|
|
3,511
|
|
|
3,264
|
|
Terminals
|
2,665
|
|
|
2,422
|
|
|
1,981
|
|
Operating Statistics
|
|
|
|
|
|
|||
NGL fractionated**
|
186
|
|
|
170
|
|
|
112
|
|
NGL extracted***
|
374
|
|
|
393
|
|
|
410
|
|
|
Dollars Per Gallon
|
||||||||
Weighted-Average NGL Price*
|
|
|
|
|
|
||||
DCP Midstream
|
$
|
0.62
|
|
|
0.46
|
|
|
0.45
|
|
|
Year Ended December 31
|
||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
Millions of Dollars
|
||||||||
|
|
|
|
|
|
||||
Net Income
|
$
|
525
|
|
|
583
|
|
|
962
|
|
|
|
|
|
|
|
||||
|
Millions of Pounds
|
||||||||
CPChem Externally Marketed Sales Volumes
*
|
|
|
|
|
|
||||
Olefins and Polyolefins
|
15,870
|
|
|
16,011
|
|
|
16,916
|
|
|
Specialties, Aromatics and Styrenics
|
4,618
|
|
|
4,911
|
|
|
5,301
|
|
|
|
20,488
|
|
|
20,922
|
|
|
22,217
|
|
|
* Represents 100 percent of CPChem’s outside sales of produced petrochemical products, as well as commission sales from equity affiliates.
|
|||||||||
|
|
|
|
|
|
||||
Olefins and Polyolefins Capacity Utilization (percent)*
|
87
|
%
|
|
91
|
|
|
92
|
|
|
Year Ended December 31
|
||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
Millions of Dollars
|
||||||||
Net Income (Loss)
|
|
|
|
|
|
||||
Atlantic Basin/Europe
|
$
|
370
|
|
|
204
|
|
|
569
|
|
Gulf Coast
|
512
|
|
|
52
|
|
|
551
|
|
|
Central Corridor
|
477
|
|
|
234
|
|
|
857
|
|
|
West Coast
|
45
|
|
|
(116
|
)
|
|
578
|
|
|
Worldwide
|
$
|
1,404
|
|
|
374
|
|
|
2,555
|
|
|
|
|
|
|
|
||||
|
Dollars Per Barrel
|
||||||||
Net Income (Loss)
|
|
|
|
|
|
||||
Atlantic Basin/Europe
|
$
|
1.86
|
|
|
0.93
|
|
|
2.68
|
|
Gulf Coast
|
1.79
|
|
|
0.18
|
|
|
2.08
|
|
|
Central Corridor
|
5.18
|
|
|
2.38
|
|
|
8.96
|
|
|
West Coast
|
0.34
|
|
|
(0.92
|
)
|
|
4.42
|
|
|
Worldwide
|
1.97
|
|
|
0.51
|
|
|
3.63
|
|
|
|
|
|
|
|
|
||||
Realized Refining Margins
|
|
|
|
|
|
||||
Atlantic Basin/Europe
|
$
|
8.25
|
|
|
6.26
|
|
|
9.39
|
|
Gulf Coast
|
7.07
|
|
|
5.49
|
|
|
9.29
|
|
|
Central Corridor
|
12.44
|
|
|
8.70
|
|
|
14.88
|
|
|
West Coast
|
10.49
|
|
|
9.15
|
|
|
16.86
|
|
|
Worldwide
|
9.13
|
|
|
6.99
|
|
|
11.84
|
|
|
Millions of Dollars
|
||||||||
|
Year Ended December 31
|
||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
Net Income (Loss)
|
|
|
|
|
|
||||
Net interest expense
|
$
|
(266
|
)
|
|
(210
|
)
|
|
(186
|
)
|
Corporate general and administrative expenses
|
(175
|
)
|
|
(161
|
)
|
|
(157
|
)
|
|
Technology
|
(62
|
)
|
|
(58
|
)
|
|
(60
|
)
|
|
U.S. tax reform
|
2,735
|
|
|
—
|
|
|
—
|
|
|
Other
|
(63
|
)
|
|
(55
|
)
|
|
(95
|
)
|
|
Total Corporate and Other
|
$
|
2,169
|
|
|
(484
|
)
|
|
(498
|
)
|
|
Millions of Dollars, Except as Indicated
|
||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
3,119
|
|
|
2,711
|
|
|
3,074
|
|
Net cash provided by operating activities
|
3,648
|
|
|
2,963
|
|
|
5,713
|
|
|
Short-term debt
|
41
|
|
|
550
|
|
|
44
|
|
|
Total debt
|
10,110
|
|
|
10,138
|
|
|
8,887
|
|
|
Total equity
|
27,428
|
|
|
23,725
|
|
|
23,938
|
|
|
Percent of total debt to capital*
|
27
|
%
|
|
30
|
|
|
27
|
|
|
Percent of floating-rate debt to total debt
|
11
|
%
|
|
3
|
|
|
1
|
|
|
* Capital includes total debt and total equity.
|
•
|
In October 2017, Phillips 66 Partners received net proceeds of $643 million from the issuance of $500 million of 3.750% Senior Notes due 2028 and $150 million of 4.680% Senior Notes due 2045.
|
•
|
In October 2017, Phillips 66 Partners received net proceeds of $737 million from a private placement of 13,819,791 perpetual convertible preferred units, at a price of $54.27 per unit.
|
•
|
In October 2017, Phillips 66 Partners received net proceeds of $295 million from a private placement of 6,304,204 common units, at a price of $47.59 per unit.
|
•
|
In October 2016, Phillips 66 Partners received net proceeds of $1,111 million from the issuance of $500 million of 3.550% Senior Notes due 2026 and $625 million of 4.900% Senior Notes due 2046.
|
•
|
In August 2016, Phillips 66 Partners received net proceeds of $299 million from a public offering of 6,000,000 common units, at a price of $50.22 per unit.
|
•
|
In June 2016, Phillips 66 Partners began issuing common units under a continuous offering program, which allows for the offering of up to $250 million of common units. Through December 31, 2017, net proceeds of $192 million had been received under this program.
|
•
|
In May 2016, Phillips 66 Partners received net proceeds of $656 million from a public offering of 12,650,000 common units, at a price of $52.40 per unit.
|
•
|
In February 2015, Phillips 66 Partners received net proceeds of $1,092 million from the issuance of $300 million of 2.646% Senior Notes due 2020, $500 million of 3.605% Senior Notes due 2025, and $300 million of 4.680% Senior Notes due 2045.
|
•
|
In February 2015, Phillips 66 Partners received net proceeds of $384 million from a public offering of 5,250,000 million common units, at a price of $75.50 per unit.
|
|
Millions of Dollars
|
||||||||||||||
|
Payments Due by Period
|
||||||||||||||
|
Total
|
|
|
Up to
1 Year
|
|
|
Years
2-3
|
|
|
Years
4-5
|
|
|
After
5 Years
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Debt obligations (a)
|
$
|
10,026
|
|
|
25
|
|
|
1,375
|
|
|
2,050
|
|
|
6,576
|
|
Capital lease obligations
|
192
|
|
|
16
|
|
|
27
|
|
|
22
|
|
|
127
|
|
|
Total debt
|
10,218
|
|
|
41
|
|
|
1,402
|
|
|
2,072
|
|
|
6,703
|
|
|
Interest on debt
|
7,371
|
|
|
436
|
|
|
839
|
|
|
765
|
|
|
5,331
|
|
|
Operating lease obligations
|
1,826
|
|
|
533
|
|
|
726
|
|
|
241
|
|
|
326
|
|
|
Purchase obligations (b)
|
77,683
|
|
|
32,236
|
|
|
9,554
|
|
|
6,698
|
|
|
29,195
|
|
|
Other long-term liabilities (c)
|
|
|
|
|
|
|
|
|
|
||||||
Asset retirement obligations
|
268
|
|
|
7
|
|
|
30
|
|
|
18
|
|
|
213
|
|
|
Accrued environmental costs
|
458
|
|
|
78
|
|
|
117
|
|
|
72
|
|
|
191
|
|
|
Unrecognized income tax benefits (d)
|
1
|
|
|
1
|
|
|
(d)
|
|
|
(d)
|
|
|
(d)
|
|
|
Total
|
$
|
97,825
|
|
|
33,332
|
|
|
12,668
|
|
|
9,866
|
|
|
41,959
|
|
(a)
|
For additional information, see
Note 12—Debt
, in the Notes to Consolidated Financial Statements.
|
(b)
|
Represents any agreement to purchase goods or services that is enforceable, legally binding and specifies all significant terms. We expect these purchase obligations will be fulfilled by operating cash flows in the applicable maturity period. The majority of the purchase obligations are market-based contracts, including exchanges and futures, for the purchase of products such as crude oil and unfractionated NGL. The products are mostly used to supply our refineries and fractionators, optimize the supply chain, and resell to customers. Product purchase commitments with third parties totaled
$35,480 million
. In addition,
$24,230 million
are product purchases from CPChem, mostly for natural gas and NGL over the remaining contractual term of
82
years, and product purchases of $1,652 million from DCP entities for NGL over the remaining contractual term of three years.
|
(c)
|
Excludes pensions. From
2018
through
2022
, we expect to contribute an average of
$70 million
per year to our qualified and nonqualified pension and other postretirement benefit plans in the United States and an average of
$34 million
per year to our non-U.S. plans, which are expected to be in excess of required minimums in many cases. The U.S. five-year average consists of $
60 million
for
2018
and then approximately
$75 million
per year for the remaining four years. Our minimum funding in
2018
is expected to be
$60 million
in the United States and
$35 million
outside the United States.
|
(d)
|
Excludes unrecognized income tax benefits of
$33 million
because the ultimate disposition and timing of any payments to be made with regard to such amounts are not reasonably estimable or the amounts relate to potential refunds. Also excludes interest and penalties of
$8 million
. Although unrecognized income tax benefits are not a contractual obligation, they are presented in this table because they represent potential demands on our liquidity.
|
|
Millions of Dollars
|
|||||||||||
|
2018
Budget
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
Capital Expenditures and Investments
|
|
|
|
|
|
|
|
|||||
Midstream
|
$
|
1,218
|
|
|
771
|
|
|
1,453
|
|
|
4,457
|
|
Chemicals
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Refining
|
827
|
|
|
853
|
|
|
1,149
|
|
|
1,069
|
|
|
Marketing and Specialties
|
140
|
|
|
108
|
|
|
98
|
|
|
122
|
|
|
Corporate and Other
|
116
|
|
|
100
|
|
|
144
|
|
|
116
|
|
|
|
$
|
2,301
|
|
|
1,832
|
|
|
2,844
|
|
|
5,764
|
|
|
|
|
|
|
|
|
|
|||||
Selected Equity Affiliates*
|
|
|
|
|
|
|
|
|||||
DCP Midstream
|
$
|
405
|
|
|
268
|
|
|
99
|
|
|
438
|
|
CPChem
|
398
|
|
|
776
|
|
|
987
|
|
|
1,319
|
|
|
WRB
|
143
|
|
|
126
|
|
|
164
|
|
|
175
|
|
|
|
$
|
946
|
|
|
1,170
|
|
|
1,250
|
|
|
1,932
|
|
•
|
Construction activities related to the Sweeny Fractionator and Freeport LPG Export Terminal projects.
|
•
|
Bakken Pipeline project, developed by our 25-percent-owned joint ventures, Dakota Access, LLC and Energy Transfer Crude Oil Company.
|
•
|
Construction activities related to increasing storage capacity at our crude oil and petroleum products terminal located near Beaumont, Texas.
|
•
|
Acquisition by Phillips 66 Partners of certain southeast Louisiana NGL logistics assets comprising approximately 500 miles of pipelines and a storage cavern connecting multiple fractionation facilities, refineries and a petrochemical facility.
|
•
|
Development of the Bayou Bridge Pipeline by Phillips 66 Partners’ 40-percent-owned joint venture.
|
•
|
Construction activities by joint ventures of Phillips 66 Partners in the Bakken production area of North Dakota, including the Palermo Rail Terminal, Sacagawea Crude Pipeline, the New Town injection point, Keene CDP Terminal and Sacagawea Gas Pipeline.
|
•
|
Expansion activities on the Phillips 66 Partners’ 33-percent-owned Sand Hills Pipeline including investment in the transportation of NGL from the Permian Basin to the Texas Gulf Coast.
|
•
|
Expansion activities on the Phillips 66 Partners’ 50-percent-owned STACK Pipeline joint venture.
|
•
|
Spending associated with return, reliability and maintenance projects in our Transportation and NGL and Other businesses.
|
•
|
Installation of a tail gas treating unit at the Humber Refinery to reduce emissions from the sulfur recovery units.
|
•
|
Installation of facilities to improve clean product yields at the Sweeny, Lake Charles and Ponca City refineries.
|
•
|
Installation of facilities to improve processing of advantaged crudes at the Billings and Ponca City refineries, as well as the jointly owned Wood River Refinery.
|
•
|
Installation of facilities to comply with U.S. Environmental Protection Agency (EPA) Tier 3 gasoline regulations at the Alliance, Lake Charles and Sweeny refineries, as well as the jointly owned Wood River Refinery.
|
•
|
Installation of a crude tank to increase accessibility of waterborne crude at the Los Angeles Refinery.
|
•
|
Installation of facilities to comply with EPA Tier 3 gasoline regulations at the Bayway and Ferndale refineries.
|
•
|
Installation of facilities to improve processing of advantaged crudes at the Lake Charles Refinery.
|
•
|
Installation of facilities to improve clean product yield at the Bayway Refinery, as well as the jointly owned Wood River Refinery.
|
•
|
U.S. Federal Clean Air Act, which governs air emissions.
|
•
|
U.S. Federal Clean Water Act, which governs discharges into water bodies.
|
•
|
European Union Regulation for Registration, Evaluation, Authorization and Restriction of Chemicals (REACH), which governs the manufacture, placing on the market or use of chemicals.
|
•
|
U.S. Federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), which imposes liability on generators, transporters and arrangers of hazardous substances at sites where hazardous substance releases have occurred or are threatening to occur.
|
•
|
U.S. Federal Resource Conservation and Recovery Act (RCRA), which governs the treatment, storage and disposal of solid waste.
|
•
|
U.S. Federal Emergency Planning and Community Right-to-Know Act (EPCRA), which requires facilities to report toxic chemical inventories to local emergency planning committees and response departments.
|
•
|
U.S. Federal Oil Pollution Act of 1990 (OPA90), under which owners and operators of onshore facilities and pipelines as well as owners and operators of vessels are liable for removal costs and damages that result from a discharge of oil into navigable waters of the United States.
|
•
|
European Union Trading Directive resulting in the European Union Emissions Trading Scheme (EU ETS), which uses a market-based mechanism to incentivize the reduction of greenhouse gas emissions.
|
•
|
EU ETS, which is part of the European Union’s policy to combat climate change and is a key tool for reducing industrial greenhouse gas emissions. EU ETS impacts factories, power stations and other installations across all EU member states.
|
•
|
California’s Global Warming Solutions Act, which requires the California Air Resources Board to develop regulations and market mechanisms that will target reduction of California’s GHG emissions by 25 percent by 2020 (as well as SB32, which requires further reduction of California's GHG emissions to 40 percent below the 1990 emission level by 2030, and the recently-enacted AB398, which extends the California GHG emission cap-and-trade program through 2030). Other GHG emissions programs in the western U.S. states have been enacted or are under consideration or development, including amendments to California's Low Carbon Fuel Standard, Oregon's Low Carbon Fuel Standard, and Washington's carbon reduction programs.
|
•
|
The U.S. Supreme Court decision in
Massachusetts v. EPA
, 549 U.S. 497, 127 S. Ct. 1438 (2007), confirming that the EPA has the authority to regulate carbon dioxide as an “air pollutant” under the Federal Clean Air Act.
|
•
|
The EPA’s announcement on March 29, 2010 (published as “Interpretation of Regulations that Determine Pollutants Covered by Clean Air Act Permitting Programs,” 75 Fed. Reg. 17004 (April 2, 2010)), and the EPA’s and U.S. Department of Transportation’s joint promulgation of a Final Rule on April 1, 2010, that triggers regulation of GHGs under the Clean Air Act. These collectively may lead to more climate-based claims for damages, and may result in longer agency review time for development projects to determine the extent of potential climate change.
|
•
|
EPA's 2015 Final Rule regulating GHG emissions from existing fossil fuel-fired electrical generating units under the Federal Clean Air Act, commonly referred to as the Clean Power Plan.
|
•
|
Carbon taxes in certain jurisdictions.
|
•
|
GHG emission cap and trade programs in certain jurisdictions.
|
•
|
Whether and to what extent legislation or regulation is enacted.
|
•
|
The nature of the legislation or regulation (such as a cap and trade system or a tax on emissions).
|
•
|
The GHG reductions required.
|
•
|
The price and availability of offsets.
|
•
|
The demand for, and amount and allocation of allowances.
|
•
|
Technological and scientific developments leading to new products or services.
|
•
|
Any potential significant physical effects of climate change (such as increased severe weather events, changes in sea levels and changes in temperature).
|
•
|
Whether, and the extent to which, increased compliance costs are ultimately reflected in the prices of our products and services.
|
•
|
In addition to cash settlement prior to contract expiration, exchange-traded futures contracts may be settled by physical delivery of the commodity. This provides another source of supply to balance physical systems or to meet our refinery requirements and marketing demand.
|
•
|
Manage the risk to our cash flows from price exposures on specific crude oil, refined product, natural gas, NGL, and electric power transactions.
|
•
|
Enable us to use the market knowledge gained from these activities to capture market opportunities such as moving physical commodities to more profitable locations, storing commodities to capture seasonal or time premiums, and blending commodities to capture quality upgrades. Derivatives may be utilized to optimize these activities.
|
|
Millions of Dollars, Except as Indicated
|
|||||||||||||
Expected Maturity Date
|
|
Fixed Rate Maturity
|
|
|
Average Interest Rate
|
|
|
Floating Rate Maturity
|
|
|
Average Interest Rate
|
|
||
Year-End 2017
|
|
|
|
|
|
|
|
|
|
|
||||
2018
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
25
|
|
|
1.94
|
%
|
2019
|
|
|
—
|
|
|
—
|
|
|
|
300
|
|
|
2.01
|
|
2020
|
|
|
300
|
|
|
2.65
|
|
|
|
775
|
|
|
2.31
|
|
2021
|
|
|
—
|
|
|
—
|
|
|
|
50
|
|
|
1.94
|
|
2022
|
|
|
2,000
|
|
|
4.30
|
|
|
|
—
|
|
|
—
|
|
Remaining years
|
|
|
6,576
|
|
|
4.78
|
|
|
|
—
|
|
|
—
|
|
Total
|
|
$
|
8,876
|
|
|
|
|
$
|
1,150
|
|
|
|
||
Fair value
|
|
$
|
9,746
|
|
|
|
|
$
|
1,150
|
|
|
|
|
Millions of Dollars, Except as Indicated
|
|||||||||||||
Expected Maturity Date
|
|
Fixed Rate Maturity
|
|
|
Average Interest Rate
|
|
|
Floating Rate Maturity
|
|
|
Average Interest Rate
|
|
||
Year-End 2016
|
|
|
|
|
|
|
|
|
|
|
||||
2017
|
|
$
|
516
|
|
|
3.08
|
%
|
|
$
|
15
|
|
|
1.80
|
%
|
2018
|
|
|
518
|
|
|
2.39
|
|
|
|
12
|
|
|
0.80
|
|
2019
|
|
|
18
|
|
|
7.00
|
|
|
|
—
|
|
|
—
|
|
2020
|
|
|
816
|
|
|
2.76
|
|
|
|
12
|
|
|
0.80
|
|
2021
|
|
|
—
|
|
|
—
|
|
|
|
221
|
|
|
1.86
|
|
Remaining years
|
|
|
7,926
|
|
|
4.72
|
|
|
|
—
|
|
|
—
|
|
Total
|
|
$
|
9,794
|
|
|
|
|
$
|
260
|
|
|
|
||
Fair value
|
|
$
|
10,260
|
|
|
|
|
$
|
260
|
|
|
|
•
|
Fluctuations in NGL, crude oil, petroleum products and natural gas prices and refining, marketing and petrochemical margins.
|
•
|
Failure of new products and services to achieve market acceptance.
|
•
|
Unexpected changes in costs or technical requirements for constructing, modifying or operating our facilities or transporting our products.
|
•
|
Unexpected technological or commercial difficulties in manufacturing, refining or transporting our products, including chemicals products.
|
•
|
Lack of, or disruptions in, adequate and reliable transportation for our NGL, crude oil, natural gas and refined products.
|
•
|
The level and success of drilling and quality of production volumes around DCP Midstream’s assets and its ability to connect supplies to its gathering and processing systems, residue gas and NGL infrastructure.
|
•
|
Inability to timely obtain or maintain permits, including those necessary for capital projects; comply with government regulations; or make capital expenditures required to maintain compliance.
|
•
|
Failure to complete definitive agreements and feasibility studies for, and to timely complete construction of, announced and future capital projects.
|
•
|
Potential disruption or interruption of our operations due to accidents, weather events, civil unrest, political events, terrorism or cyber attacks.
|
•
|
International monetary conditions and exchange controls.
|
•
|
Substantial investment or reduced demand for products as a result of existing or future environmental rules and regulations.
|
•
|
Liability resulting from litigation or for remedial actions, including removal and reclamation obligations under environmental regulations.
|
•
|
General domestic and international economic and political developments including: armed hostilities; expropriation of assets; changes in governmental policies relating to NGL, crude oil, natural gas or refined product pricing, regulation or taxation; and other political, economic or diplomatic developments.
|
•
|
Changes in tax, environmental and other laws and regulations (including alternative energy mandates) applicable to our business.
|
•
|
Limited access to capital or significantly higher cost of capital related to changes to our credit profile or illiquidity or uncertainty in the domestic or international financial markets.
|
•
|
The operation, financing and distribution decisions of our joint ventures.
|
•
|
Domestic and foreign supplies of crude oil and other feedstocks.
|
•
|
Domestic and foreign supplies of petrochemicals and refined products, such as gasoline, diesel, aviation fuel and home heating oil.
|
•
|
Governmental policies relating to exports of crude oil and natural gas.
|
•
|
Overcapacity or undercapacity in the midstream, chemicals and refining industries.
|
•
|
Fluctuations in consumer demand for refined products.
|
•
|
The factors generally described in Item 1A.—Risk Factors in this report.
|
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Greg C. Garland
|
|
/s/ Kevin J. Mitchell
|
|
|
|
Greg C. Garland
|
|
Kevin J. Mitchell
|
Chairman and
|
|
Executive Vice President, Finance and
|
Chief Executive Officer
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of Income
|
Phillips 66
|
|
Millions of Dollars
|
||||||||
Years Ended December 31
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
Revenues and Other Income
|
|
|
|
|
|
||||
Sales and other operating revenues*
|
$
|
102,354
|
|
|
84,279
|
|
|
98,975
|
|
Equity in earnings of affiliates
|
1,732
|
|
|
1,414
|
|
|
1,573
|
|
|
Net gain on dispositions
|
15
|
|
|
10
|
|
|
283
|
|
|
Other income
|
521
|
|
|
74
|
|
|
118
|
|
|
Total Revenues and Other Income
|
104,622
|
|
|
85,777
|
|
|
100,949
|
|
|
|
|
|
|
|
|
||||
Costs and Expenses
|
|
|
|
|
|
||||
Purchased crude oil and products
|
79,409
|
|
|
62,468
|
|
|
73,399
|
|
|
Operating expenses
|
4,699
|
|
|
4,275
|
|
|
4,294
|
|
|
Selling, general and administrative expenses
|
1,695
|
|
|
1,638
|
|
|
1,670
|
|
|
Depreciation and amortization
|
1,318
|
|
|
1,168
|
|
|
1,078
|
|
|
Impairments
|
24
|
|
|
5
|
|
|
7
|
|
|
Taxes other than income taxes*
|
13,462
|
|
|
13,688
|
|
|
14,077
|
|
|
Accretion on discounted liabilities
|
22
|
|
|
21
|
|
|
21
|
|
|
Interest and debt expense
|
438
|
|
|
338
|
|
|
310
|
|
|
Foreign currency transaction (gains) losses
|
—
|
|
|
(15
|
)
|
|
49
|
|
|
Total Costs and Expenses
|
101,067
|
|
|
83,586
|
|
|
94,905
|
|
|
Income before income taxes
|
3,555
|
|
|
2,191
|
|
|
6,044
|
|
|
Income tax expense (benefit)
|
(1,693
|
)
|
|
547
|
|
|
1,764
|
|
|
Net Income
|
5,248
|
|
|
1,644
|
|
|
4,280
|
|
|
Less: net income attributable to noncontrolling interests
|
142
|
|
|
89
|
|
|
53
|
|
|
Net Income Attributable to Phillips 66
|
$
|
5,106
|
|
|
1,555
|
|
|
4,227
|
|
|
|
|
|
|
|
||||
Net Income Attributable to Phillips 66 Per Share of Common Stock
(dollars)
|
|
|
|
|
|
||||
Basic
|
$
|
9.90
|
|
|
2.94
|
|
|
7.78
|
|
Diluted
|
9.85
|
|
|
2.92
|
|
|
7.73
|
|
|
|
|
|
|
|
|
||||
Dividends Paid Per Share of Common Stock
(dollars)
|
$
|
2.73
|
|
|
2.45
|
|
|
2.18
|
|
|
|
|
|
|
|
||||
Weighted-Average Common Shares Outstanding
(thousands)
|
|
|
|
|
|
||||
Basic
|
515,090
|
|
|
527,531
|
|
|
542,355
|
|
|
Diluted
|
518,508
|
|
|
530,066
|
|
|
546,977
|
|
|
* Includes excise taxes on sales of petroleum products:
|
$
|
13,054
|
|
|
13,381
|
|
|
13,780
|
|
See Notes to Consolidated Financial Statements.
|
|
|
|
|
|
|
|
Consolidated Statement of Changes in Equity
|
Phillips 66
|
|
|||||||||||||
|
|
||||||||||||||
|
Millions of Dollars
|
||||||||||||||
|
Attributable to Phillips 66
|
|
|
||||||||||||
|
Common Stock
|
|
|
|
|
||||||||||
|
Par Value
|
|
Capital in Excess of Par
|
|
Treasury Stock
|
|
Retained Earnings
|
|
Accum. Other
Comprehensive Loss |
|
Noncontrolling
Interests |
|
Total
|
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2014
|
$
|
6
|
|
19,040
|
|
(6,234
|
)
|
9,309
|
|
(531
|
)
|
447
|
|
22,037
|
|
Net income
|
—
|
|
—
|
|
—
|
|
4,227
|
|
—
|
|
53
|
|
4,280
|
|
|
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(122
|
)
|
—
|
|
(122
|
)
|
|
Cash dividends paid on common stock
|
—
|
|
—
|
|
—
|
|
(1,172
|
)
|
—
|
|
—
|
|
(1,172
|
)
|
|
Repurchase of common stock
|
—
|
|
—
|
|
(1,512
|
)
|
—
|
|
—
|
|
—
|
|
(1,512
|
)
|
|
Benefit plan activity
|
—
|
|
105
|
|
—
|
|
(16
|
)
|
—
|
|
—
|
|
89
|
|
|
Issuance of Phillips 66 Partners LP common units
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
384
|
|
384
|
|
|
Distributions to noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(46
|
)
|
(46
|
)
|
|
December 31, 2015
|
6
|
|
19,145
|
|
(7,746
|
)
|
12,348
|
|
(653
|
)
|
838
|
|
23,938
|
|
|
Net income
|
—
|
|
—
|
|
—
|
|
1,555
|
|
—
|
|
89
|
|
1,644
|
|
|
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(342
|
)
|
—
|
|
(342
|
)
|
|
Cash dividends paid on common stock
|
—
|
|
—
|
|
—
|
|
(1,282
|
)
|
—
|
|
—
|
|
(1,282
|
)
|
|
Repurchase of common stock
|
—
|
|
—
|
|
(1,042
|
)
|
—
|
|
—
|
|
—
|
|
(1,042
|
)
|
|
Benefit plan activity
|
—
|
|
106
|
|
—
|
|
(13
|
)
|
—
|
|
—
|
|
93
|
|
|
Issuance of Phillips 66 Partners LP common units
|
—
|
|
308
|
|
—
|
|
—
|
|
—
|
|
483
|
|
791
|
|
|
Distributions to noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(75
|
)
|
(75
|
)
|
|
December 31, 2016
|
6
|
|
19,559
|
|
(8,788
|
)
|
12,608
|
|
(995
|
)
|
1,335
|
|
23,725
|
|
|
Net income
|
—
|
|
—
|
|
—
|
|
5,106
|
|
—
|
|
142
|
|
5,248
|
|
|
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
378
|
|
—
|
|
378
|
|
|
Cash dividends paid on common stock
|
—
|
|
—
|
|
—
|
|
(1,395
|
)
|
—
|
|
—
|
|
(1,395
|
)
|
|
Repurchase of common stock
|
—
|
|
—
|
|
(1,590
|
)
|
—
|
|
—
|
|
—
|
|
(1,590
|
)
|
|
Benefit plan activity
|
—
|
|
72
|
|
—
|
|
(13
|
)
|
—
|
|
—
|
|
59
|
|
|
Issuance of Phillips 66 Partners LP common and preferred units
|
—
|
|
137
|
|
—
|
|
—
|
|
—
|
|
986
|
|
1,123
|
|
|
Distributions to noncontrolling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(120
|
)
|
(120
|
)
|
|
December 31, 2017
|
$
|
6
|
|
19,768
|
|
(10,378
|
)
|
16,306
|
|
(617
|
)
|
2,343
|
|
27,428
|
|
Notes to Consolidated Financial Statements
|
Phillips 66
|
▪
|
Consolidation Principles and Investments
—Our consolidated financial statements include the accounts of majority-owned, controlled subsidiaries and variable interest entities where we are the primary beneficiary. The equity method is used to account for investments in affiliates in which we have the ability to exert significant influence over the affiliates’ operating and financial policies. When we do not have the ability to exert significant influence, the investment is classified either as available-for-sale if fair value is readily determinable, or as the cost method if fair value is not readily determinable. Undivided interests in pipelines, natural gas plants and terminals are consolidated on a proportionate basis. Other securities and investments are generally carried at cost.
|
▪
|
Recasted Financial Information
—Certain prior period financial information has been recasted to reflect the current year’s presentation.
|
▪
|
Foreign Currency Translation
—Adjustments resulting from the process of translating foreign functional currency financial statements into U.S. dollars are included in accumulated other comprehensive income (loss) in stockholders’ equity. Foreign currency transaction gains and losses result from remeasuring monetary assets and liabilities denominated in a foreign currency into the functional currency of our subsidiary holding the asset or liability. We include these transaction gains and losses in current earnings. Most of our foreign operations use their local currency as the functional currency.
|
▪
|
Use of Estimates
—The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent assets and liabilities. Actual results could differ from these estimates.
|
▪
|
Revenue Recognition
—Revenues associated with sales of crude oil, natural gas liquids (NGL), petroleum and chemical products, and other items are recognized when title passes to the customer, which is when the risk of ownership passes to the purchaser and physical delivery of goods occurs, either immediately or within a fixed delivery schedule that is reasonable and customary in the industry.
|
▪
|
Cash Equivalents
—Cash equivalents are highly liquid, short-term investments that are readily convertible to known amounts of cash and will mature within 90 days or less from the date of acquisition. We carry these investments at cost plus accrued interest.
|
▪
|
Shipping and Handling Costs
—We record shipping and handling costs in the “Purchased crude oil and products” line on our consolidated statement of income. Freight costs billed to customers are recorded in “Sales and other operating revenues.”
|
▪
|
Inventories
—We have several valuation methods for our various types of inventories and consistently use the following methods for each type of inventory. Crude oil and petroleum products inventories are valued at the lower of cost or market in the aggregate, primarily on the last-in, first-out (LIFO) basis. Any necessary lower-of-cost-or-market write-downs at year end are recorded as permanent adjustments to the LIFO cost basis. LIFO is used to better match current inventory costs with current revenues and to meet tax-conformity requirements. Costs include both direct and indirect expenditures incurred in bringing an item or product to its existing condition and location. Materials and supplies inventories are valued using the weighted-average-cost method.
|
▪
|
Fair Value Measurements
—We categorize assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, through market-corroborated inputs. Level 3 inputs are unobservable inputs for the asset or liability that are used to measure fair value to the extent that relevant observable inputs are not available, and that reflect the assumptions we believe market participants would use when pricing an asset or liability for which there is little, if any, market activity at the measurement date.
|
▪
|
Derivative Instruments
—Derivative instruments are recorded on the balance sheet at fair value. We have elected to net derivative assets and liabilities with the same counterparty on the balance sheet if the right of offset exists and certain other criteria are met. We also net collateral payables or receivables against derivative assets and derivative liabilities, respectively.
|
▪
|
Capitalized Interest
—A portion of interest from external borrowings is capitalized on major projects with an expected construction period of
one
year or longer. Capitalized interest is added to the cost of the related asset, and is amortized over the useful life of the related asset.
|
▪
|
Loans and Long-Term Receivables
—We enter into agreements with other parties to pursue business opportunities, which may require us to provide loans or advances to certain affiliated and non-affiliated companies. Loans are recorded when cash is transferred or seller financing is provided to the affiliated or non-affiliated company pursuant to a loan agreement. The loan balance will increase as interest is earned on the outstanding loan balance and will decrease as interest and principal payments are received. Interest is earned at the loan agreement’s stated interest rate. Loans and long-term receivables are assessed for impairment when events indicate the loan balance may not be fully recovered.
|
▪
|
Intangible Assets Other Than Goodwill
—Intangible assets with finite useful lives are amortized using the straight-line method over their useful lives. Intangible assets with indefinite useful lives are not amortized but are tested at least annually for impairment. Each reporting period, we evaluate the remaining useful lives of intangible assets not being amortized to determine whether events and circumstances continue to support indefinite useful lives. Indefinite-lived intangible assets are considered impaired if their fair value is lower than their net book value. The fair value of intangible assets is determined based on quoted market prices in active markets, if available. If quoted market prices are not available, the fair value of intangible assets is determined based upon the present values of expected future cash flows using discount rates and other assumptions believed to be consistent with those used by principal market participants, or upon estimated replacement cost, if expected future cash flows from the intangible asset are not determinable.
|
▪
|
Goodwill
—Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in a business combination. It is not amortized, but is tested for impairment annually and when events or changes in circumstance indicate that the fair value of a reporting unit with goodwill is below its carrying value. The impairment test requires allocating goodwill and other assets and liabilities to reporting units. The fair value of each reporting unit is determined and compared to the book value of the reporting unit. If the fair value of the reporting unit is less than the book value, an impairment is recognized for the amount by which the book value exceeds the reporting unit’s fair value. A goodwill loss cannot exceed the total amount of goodwill allocated to that reporting unit. For purposes of testing goodwill for impairment, we have
three
reporting units with goodwill balances: Transportation, Refining, and Marketing and Specialties.
|
▪
|
Depreciation and Amortization
—Depreciation and amortization of properties, plants and equipment are determined by either the individual-unit-straight-line method or the group-straight-line method (for those individual units that are highly integrated with other units).
|
▪
|
Impairment of Properties, Plants and Equipment
—Properties, plants and equipment (PP&E) used in operations are assessed for impairment whenever changes in facts and circumstances indicate a possible significant deterioration in the future cash flows expected to be generated by an asset group. If indicators of potential impairment exist, an undiscounted cash flow test is performed. If the sum of the undiscounted pre-tax cash flows is less than the carrying value of the asset group, including applicable liabilities, the carrying value of the PP&E included in the asset group is written down to estimated fair value through additional amortization or depreciation provisions and reported in the “Impairments” line on our consolidated statement of income in the period in which the determination of the impairment is made. Individual assets are grouped for impairment purposes at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets (for example, at a refinery complex level). Because there is usually a lack of quoted market prices for long-lived assets, the fair value of impaired assets is typically determined using one or more of the following methods: the present values of expected future cash flows using discount rates and other assumptions believed to be consistent with those used by principal market participants; a market multiple of earnings for similar assets; or historical market transactions of similar assets, adjusted using principal market participant assumptions when necessary. Long-lived assets held for sale are accounted for at the lower of amortized cost or fair value, less cost to sell, with fair value determined using a binding negotiated price, if available, or present value of expected future cash flows as previously described.
|
▪
|
Impairment of Investments in Nonconsolidated Entities
—Investments in nonconsolidated entities are assessed for impairment whenever changes in the facts and circumstances indicate a loss in value has occurred. When indicators exist, the fair value is estimated and compared to the investment carrying value. If any impairment is judgmentally determined to be other than temporary, the carrying value of the investment is written down to fair value. The fair value of the impaired investment is based on quoted market prices, if available, or upon the present value of expected future cash flows using discount rates and other assumptions believed to be consistent with those used by principal market participants and a market analysis of comparable assets, if appropriate.
|
▪
|
Maintenance and Repairs
—Costs of maintenance and repairs, which are not significant improvements, are expensed when incurred. Major refinery maintenance turnarounds are expensed as incurred.
|
▪
|
Property Dispositions
—When complete units of depreciable property are sold, the asset cost and related accumulated depreciation are eliminated, with any gain or loss reflected in the “Net gain on dispositions” line on our consolidated statement of income. When less than complete units of depreciable property are disposed of or retired, the difference between asset cost and salvage value is charged or credited to accumulated depreciation.
|
▪
|
Asset Retirement Obligations and Environmental Costs
—The fair value of legal obligations to retire and remove long-lived assets are recorded in the period in which the obligation arises. When the liability is initially recorded, we capitalize this cost by increasing the carrying amount of the related PP&E. Over time, the liability is increased for the change in its present value, and the capitalized cost in PP&E is depreciated over the useful life of the related asset. If our estimate of the liability changes after initial recognition, we record an adjustment to the liability and PP&E.
|
▪
|
Guarantees
—The fair value of a guarantee is determined and recorded as a liability at the time the guarantee is given. The initial liability is subsequently reduced as we are released from exposure under the guarantee. We amortize the guarantee liability over the relevant time period, if one exists, based on the facts and circumstances surrounding each type of guarantee. In cases where the guarantee term is indefinite, we reverse the liability when we have information indicating the liability has essentially been relieved or amortize it over an appropriate time period as the fair value of our guarantee exposure declines over time. We amortize the guarantee liability to the related income statement line item based on the nature of the guarantee. When it becomes probable we will have to perform on a guarantee, we accrue a separate liability for the excess amount above the guarantee’s book value, if it is reasonably estimable, based on the facts and circumstances at that time. We reverse the fair value liability only when there is no further exposure under the guarantee.
|
▪
|
Share-Based Compensation
—We recognize share-based compensation expense over the shorter of: (1) the service period (i.e., the stated period of time required to earn the award); or (2) the period beginning at the start of the service period and ending when an employee first becomes eligible for retirement, but not less than
six
months as this is the minimum period of time required for an award not to be subject to forfeiture. Our equity-classified programs generally provide accelerated vesting (i.e., a waiver of the remaining period of service required to earn an award) for awards held by employees at the time they become eligible for retirement (at age
55
with
5
years of service). We have elected to recognize expense on a straight-line basis over the service period for the entire award, irrespective of whether the award was granted with ratable or cliff vesting, and elected to recognize forfeiture reversals of awards when they occur.
|
▪
|
Income Taxes
—Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Interest related to unrecognized income tax benefits is reflected in interest expense, and penalties in operating expenses.
|
▪
|
Taxes Collected from Customers and Remitted to Governmental Authorities
—Excise taxes are reported gross within sales and other operating revenues and taxes other than income taxes, while other sales and value-added taxes are recorded net in taxes other than income taxes.
|
▪
|
Treasury Stock
—We record treasury stock purchases at cost, which includes incremental direct transaction costs. Amounts are recorded as reductions in stockholders’ equity in the consolidated balance sheet.
|
|
Millions of Dollars
|
|||||
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|||
Cash and cash equivalents
|
$
|
185
|
|
|
2
|
|
Equity investments*
|
1,932
|
|
|
1,142
|
|
|
Net properties, plants and equipment
|
2,918
|
|
|
2,675
|
|
|
Long-term debt
|
2,920
|
|
|
2,396
|
|
|
Millions of Dollars
|
|||||
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|||
Crude oil and petroleum products
|
$
|
3,106
|
|
|
2,883
|
|
Materials and supplies
|
289
|
|
|
267
|
|
|
|
$
|
3,395
|
|
|
3,150
|
|
|
Millions of Dollars
|
|||||
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|||
Equity investments
|
$
|
13,733
|
|
|
13,102
|
|
Loans and long-term receivables
|
94
|
|
|
334
|
|
|
Other investments
|
114
|
|
|
98
|
|
|
|
$
|
13,941
|
|
|
13,534
|
|
•
|
WRB Refining LP (WRB)—
50 percent
owned business venture with Cenovus Energy Inc. (Cenovus)—owns the Wood River and Borger refineries.
|
•
|
DCP Midstream, LLC (DCP Midstream)—
50 percent
owned joint venture with Spectra Energy Corp, a wholly owned subsidiary of Enbridge Inc.—owns and operates gas plants, gathering systems, storage facilities and fractionation plants, including through its investment in DCP Midstream, LP (DCP Partners).
|
•
|
Chevron Phillips Chemical Company LLC (CPChem)—
50 percent
owned joint venture with Chevron U.S.A. Inc., an indirect wholly owned subsidiary of Chevron Corporation—manufactures and markets petrochemicals and plastics.
|
•
|
Rockies Express Pipeline LLC (REX)—
25 percent
owned joint venture with Tallgrass Energy Partners L.P.—owns and operates a natural gas pipeline system from Colorado to Ohio.
|
•
|
DCP Sand Hills Pipeline, LLC (Sand Hills)—Phillips 66 Partners’
33 percent
owned joint venture with DCP Partners—owns and operates NGL pipeline systems from the Permian and Eagle Ford basins to Mont Belvieu, Texas.
|
•
|
DCP Southern Hills Pipeline, LLC (Southern Hills)—Phillips 66 Partners’
33 percent
owned joint venture with DCP Partners—owns and operates NGL pipeline systems from the Midcontinent region to Mont Belvieu, Texas.
|
•
|
Dakota Access and ETCO—Phillips 66 Partners’
two
25 percent
owned joint ventures with Energy Transfer Partners L.P. (ETP) and MarEn Bakken Company LLC. Dakota Access owns a pipeline system that delivers crude oil from the Bakken/Three Forks production area in North Dakota to Patoka, Illinois, and ETCO owns a connecting crude oil pipeline system from Patoka, Illinois, to Nederland, Texas. Collectively, these two pipeline systems form the Bakken Pipeline, which is operated by ETP.
|
|
Millions of Dollars
|
||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
||||
Revenues
|
$
|
35,523
|
|
|
30,605
|
|
|
33,126
|
|
Income before income taxes
|
3,956
|
|
|
3,206
|
|
|
3,180
|
|
|
Net income
|
3,764
|
|
|
2,960
|
|
|
3,158
|
|
|
Current assets
|
7,325
|
|
|
7,097
|
|
|
6,024
|
|
|
Noncurrent assets
|
49,950
|
|
|
50,163
|
|
|
46,047
|
|
|
Current liabilities
|
5,248
|
|
|
5,173
|
|
|
4,130
|
|
|
Noncurrent liabilities
|
13,743
|
|
|
13,709
|
|
|
11,493
|
|
|
Noncontrolling interests
|
2,549
|
|
|
2,260
|
|
|
2,404
|
|
|
Millions of Dollars
|
|||||||||||||||||
|
2017
|
|
2016
|
|||||||||||||||
|
Gross
PP&E
|
|
|
Accum.
D&A
|
|
|
Net
PP&E
|
|
|
Gross
PP&E
|
|
|
Accum.
D&A
|
|
|
Net
PP&E
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Midstream
|
$
|
8,849
|
|
|
1,853
|
|
|
6,996
|
|
|
8,179
|
|
|
1,579
|
|
|
6,600
|
|
Chemicals
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Refining
|
22,144
|
|
|
8,987
|
|
|
13,157
|
|
|
21,152
|
|
|
8,197
|
|
|
12,955
|
|
|
Marketing and Specialties
|
1,658
|
|
|
909
|
|
|
749
|
|
|
1,451
|
|
|
776
|
|
|
675
|
|
|
Corporate and Other
|
1,091
|
|
|
533
|
|
|
558
|
|
|
1,207
|
|
|
582
|
|
|
625
|
|
|
|
$
|
33,742
|
|
|
12,282
|
|
|
21,460
|
|
|
31,989
|
|
|
11,134
|
|
|
20,855
|
|
|
Millions of Dollars
|
|||||||||||
|
Midstream
|
|
|
Refining
|
|
|
Marketing and Specialties
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at January 1, 2016
|
$
|
623
|
|
|
1,813
|
|
|
839
|
|
|
3,275
|
|
Goodwill assigned to acquisitions
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
Goodwill allocated to dispositions
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|
Balance at December 31, 2016
|
626
|
|
|
1,805
|
|
|
839
|
|
|
3,270
|
|
|
Adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Balance at December 31, 2017
|
$
|
626
|
|
|
1,805
|
|
|
839
|
|
|
3,270
|
|
|
Millions of Dollars
|
|||||
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|||
Trade names and trademarks
|
$
|
503
|
|
|
503
|
|
Refinery air and operating permits
|
252
|
|
|
260
|
|
|
Other
|
1
|
|
|
1
|
|
|
|
$
|
756
|
|
|
764
|
|
|
|
|
|
|
|
|
Millions of Dollars
|
|||||
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|||
Asset retirement obligations
|
$
|
268
|
|
|
244
|
|
Accrued environmental costs
|
458
|
|
|
496
|
|
|
Total asset retirement obligations and accrued environmental costs
|
726
|
|
|
740
|
|
|
Asset retirement obligations and accrued environmental costs due within one year*
|
(85
|
)
|
|
(85
|
)
|
|
Long-term asset retirement obligations and accrued environmental costs
|
$
|
641
|
|
|
655
|
|
|
Millions of Dollars
|
|||||
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|||
Balance at January 1
|
$
|
244
|
|
|
251
|
|
Accretion of discount
|
10
|
|
|
9
|
|
|
Changes in estimates of existing obligations
|
17
|
|
|
10
|
|
|
Spending on existing obligations
|
(14
|
)
|
|
(15
|
)
|
|
Property dispositions
|
—
|
|
|
(5
|
)
|
|
Foreign currency translation
|
11
|
|
|
(6
|
)
|
|
Balance at December 31
|
$
|
268
|
|
|
244
|
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
Basic
|
|
Diluted
|
|
|
Basic
|
|
Diluted
|
|
|
Basic
|
|
Diluted
|
|
|
Amounts Attributed to Phillips 66 Common Stockholders
(millions)
:
|
|
|
|
|
|
|
|
|
|||||||
Net income attributable to Phillips 66
|
$
|
5,106
|
|
5,106
|
|
|
1,555
|
|
1,555
|
|
|
4,227
|
|
4,227
|
|
Income allocated to participating securities
|
(6
|
)
|
—
|
|
|
(6
|
)
|
(5
|
)
|
|
(6
|
)
|
—
|
|
|
Net income available to common stockholders
|
$
|
5,100
|
|
5,106
|
|
|
1,549
|
|
1,550
|
|
|
4,221
|
|
4,227
|
|
|
|
|
|
|
|
|
|
|
|||||||
Weighted-average common shares outstanding
(thousands)
:
|
511,268
|
|
515,090
|
|
|
523,250
|
|
527,531
|
|
|
537,602
|
|
542,355
|
|
|
Effect of share-based compensation
|
3,822
|
|
3,418
|
|
|
4,281
|
|
2,535
|
|
|
4,753
|
|
4,622
|
|
|
Weighted-average common shares outstanding—EPS
|
515,090
|
|
518,508
|
|
|
527,531
|
|
530,066
|
|
|
542,355
|
|
546,977
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Earnings Per Share of Common Stock
(dollars)
|
$
|
9.90
|
|
9.85
|
|
|
2.94
|
|
2.92
|
|
|
7.78
|
|
7.73
|
|
|
Millions of Dollars
|
|||||
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|||
2.950% Senior Notes due 2017
|
$
|
—
|
|
|
1,500
|
|
4.300% Senior Notes due 2022
|
2,000
|
|
|
2,000
|
|
|
4.650% Senior Notes due 2034
|
1,000
|
|
|
1,000
|
|
|
5.875% Senior Notes due 2042
|
1,500
|
|
|
1,500
|
|
|
4.875% Senior Notes due 2044
|
1,500
|
|
|
1,500
|
|
|
Phillips 66 Partners 2.646% Senior Notes due 2020
|
300
|
|
|
300
|
|
|
Phillips 66 Partners 3.605% Senior Notes due 2025
|
500
|
|
|
500
|
|
|
Phillips 66 Partners 3.550% Senior Notes due 2026
|
500
|
|
|
500
|
|
|
Phillips 66 Partners 3.750% Senior Notes due 2028
|
500
|
|
|
—
|
|
|
Phillips 66 Partners 4.680% Senior Notes due 2045
|
450
|
|
|
300
|
|
|
Phillips 66 Partners 4.900% Senior Notes due 2046
|
625
|
|
|
625
|
|
|
Floating-rate notes due 2019 at 2.009% at year-end 2017
|
300
|
|
|
—
|
|
|
Floating-rate notes due 2020 at 2.109% at year-end 2017
|
300
|
|
|
—
|
|
|
Term loan due 2020 at 2.469% at year-end 2017
|
450
|
|
|
—
|
|
|
Note payable to MSLP due 2020 at 7.00%*
|
—
|
|
|
68
|
|
|
Industrial Development Bonds due 2018 through 2021 at 0.80%-2.09% at year-end 2017 and 0.57%-0.81% at year-end 2016*
|
100
|
|
|
50
|
|
|
Phillips 66 Partners revolving credit facility due 2021 at 1.98% at year-end 2016
|
—
|
|
|
210
|
|
|
Other
|
1
|
|
|
1
|
|
|
Debt at face value
|
10,026
|
|
|
10,054
|
|
|
Capitalized leases
|
192
|
|
|
188
|
|
|
Net unamortized discounts and debt issuance costs
|
(108
|
)
|
|
(104
|
)
|
|
Total debt
|
10,110
|
|
|
10,138
|
|
|
Short-term debt
|
(41
|
)
|
|
(550
|
)
|
|
Long-term debt
|
$
|
10,069
|
|
|
9,588
|
|
* In February 2017, MSLP became a consolidated subsidiary, see Note 5—Business Combinations.
|
|
Millions of Dollars
|
|||||||||||||||||
|
December 31, 2017
|
|
December 31, 2016
|
|||||||||||||||
|
Commodity Derivatives
|
Effect of Collateral Netting
|
|
Net Carrying Value Presented on the Balance Sheet
|
|
|
Commodity Derivatives
|
Effect of Collateral Netting
|
|
Net Carrying Value Presented on the Balance Sheet
|
|
|||||||
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|||||||||
Prepaid expenses and other current assets
|
$
|
43
|
|
(19
|
)
|
—
|
|
24
|
|
|
267
|
|
(154
|
)
|
—
|
|
113
|
|
Other assets
|
7
|
|
(3
|
)
|
—
|
|
4
|
|
|
5
|
|
(1
|
)
|
—
|
|
4
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other accruals
|
699
|
|
(746
|
)
|
21
|
|
(26
|
)
|
|
474
|
|
(612
|
)
|
73
|
|
(65
|
)
|
|
Other liabilities and deferred credits
|
—
|
|
(1
|
)
|
—
|
|
(1
|
)
|
|
—
|
|
(1
|
)
|
—
|
|
(1
|
)
|
|
Total
|
$
|
749
|
|
(769
|
)
|
21
|
|
1
|
|
|
746
|
|
(768
|
)
|
73
|
|
51
|
|
|
Millions of Dollars
|
||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
||||
Sales and other operating revenues
|
$
|
(247
|
)
|
|
(451
|
)
|
|
162
|
|
Other income
|
27
|
|
|
29
|
|
|
58
|
|
|
Purchased crude oil and products
|
(18
|
)
|
|
(62
|
)
|
|
121
|
|
|
Net gain (loss) from commodity derivative activity
|
$
|
(238
|
)
|
|
(484
|
)
|
|
341
|
|
|
Open Position
Long / (Short)
|
||||
|
2017
|
|
|
2016
|
|
Commodity
|
|
|
|
||
Crude oil, refined products and NGL
(millions of barrels)
|
(11
|
)
|
|
(18
|
)
|
•
|
Level 1: Fair value measured with unadjusted quoted prices from an active market for identical assets or liabilities.
|
•
|
Level 2: Fair value measured either with: (1) adjusted quoted prices from an active market for similar assets or liabilities; or (2) other valuation inputs that are directly or indirectly observable.
|
•
|
Level 3: Fair value measured with unobservable inputs that are significant to the measurement.
|
•
|
Cash and cash equivalents
—The carrying amount reported on our consolidated balance sheet approximates fair value.
|
•
|
Accounts and notes receivable
—
The carrying amount reported on our consolidated balance sheet approximates fair value.
|
•
|
Derivative instruments
—We fair value our exchange-traded contracts based on quoted market prices obtained from the New York Mercantile Exchange, the Intercontinental Exchange or other exchanges, and classify them as Level 1 in the fair value hierarchy. When exchange-cleared contracts lack sufficient liquidity or are valued using either adjusted exchange-provided prices or non-exchange quotes, we classify those contracts as Level 2.
|
•
|
Rabbi trust assets
—These deferred compensation investments are measured at fair value using unadjusted quoted prices available from national securities exchanges and are therefore categorized as Level 1 in the fair value hierarchy.
|
•
|
Debt
—The carrying amount of our floating-rate debt approximates fair value. The fair value of our fixed-rate debt is estimated based on observable market prices.
|
|
Millions of Dollars
|
|||||||||||||||||||
|
December 31, 2017
|
|||||||||||||||||||
|
Fair Value Hierarchy
|
|
Total Fair Value of Gross Assets & Liabilities
|
|
Effect of Counterparty Netting
|
|
Effect of Collateral Netting
|
|
Difference in Carrying Value and Fair Value
|
|
Net Carrying Value Presented on the Balance Sheet
|
|
||||||||
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
||||||||||||
Commodity Derivative Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Exchange-cleared instruments
|
$
|
333
|
|
|
395
|
|
|
—
|
|
|
728
|
|
(721
|
)
|
—
|
|
—
|
|
7
|
|
Physical forward contracts
|
—
|
|
|
20
|
|
|
1
|
|
|
21
|
|
—
|
|
—
|
|
—
|
|
21
|
|
|
Interest rate derivatives
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
—
|
|
—
|
|
—
|
|
14
|
|
|
Rabbi trust assets
|
112
|
|
|
—
|
|
|
—
|
|
|
112
|
|
N/A
|
|
N/A
|
|
—
|
|
112
|
|
|
|
$
|
445
|
|
|
429
|
|
|
1
|
|
|
875
|
|
(721
|
)
|
—
|
|
—
|
|
154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commodity Derivative Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Exchange-cleared instruments
|
$
|
369
|
|
|
373
|
|
|
—
|
|
|
742
|
|
(721
|
)
|
(21
|
)
|
—
|
|
—
|
|
Physical forward contracts
|
—
|
|
|
23
|
|
|
4
|
|
|
27
|
|
—
|
|
—
|
|
—
|
|
27
|
|
|
Floating-rate debt
|
—
|
|
|
1,150
|
|
|
—
|
|
|
1,150
|
|
N/A
|
|
N/A
|
|
—
|
|
1,150
|
|
|
Fixed-rate debt, excluding capital leases
|
—
|
|
|
9,746
|
|
|
—
|
|
|
9,746
|
|
N/A
|
|
N/A
|
|
(978
|
)
|
8,768
|
|
|
|
$
|
369
|
|
|
11,292
|
|
|
4
|
|
|
11,665
|
|
(721
|
)
|
(21
|
)
|
(978
|
)
|
9,945
|
|
|
Millions of Dollars
|
|||||||||||||||||||
|
December 31, 2016
|
|||||||||||||||||||
|
Fair Value Hierarchy
|
|
Total Fair Value of Gross Assets & Liabilities
|
|
Effect of Counterparty Netting
|
|
Effect of Collateral Netting
|
|
Difference in Carrying Value and Fair Value
|
|
Net Carrying Value Presented on the Balance Sheet
|
|
||||||||
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|||||||||||
Commodity Derivative Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Exchange-cleared instruments
|
$
|
273
|
|
|
371
|
|
|
—
|
|
|
644
|
|
(628
|
)
|
—
|
|
—
|
|
16
|
|
OTC instruments
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
(1
|
)
|
—
|
|
—
|
|
5
|
|
|
Physical forward contracts
|
—
|
|
|
94
|
|
|
2
|
|
|
96
|
|
—
|
|
—
|
|
—
|
|
96
|
|
|
Interest rate derivatives
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
—
|
|
—
|
|
—
|
|
8
|
|
|
Rabbi trust assets
|
97
|
|
|
—
|
|
|
—
|
|
|
97
|
|
N/A
|
|
N/A
|
|
—
|
|
97
|
|
|
|
$
|
370
|
|
|
479
|
|
|
2
|
|
|
851
|
|
(629
|
)
|
—
|
|
—
|
|
222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commodity Derivative Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Exchange-cleared instruments
|
$
|
249
|
|
|
452
|
|
|
—
|
|
|
701
|
|
(628
|
)
|
(73
|
)
|
—
|
|
—
|
|
OTC instruments
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
(1
|
)
|
—
|
|
—
|
|
—
|
|
|
Physical forward contracts
|
—
|
|
|
61
|
|
|
5
|
|
|
66
|
|
—
|
|
—
|
|
—
|
|
66
|
|
|
Floating-rate debt
|
—
|
|
|
260
|
|
|
—
|
|
|
260
|
|
N/A
|
|
N/A
|
|
—
|
|
260
|
|
|
Fixed-rate debt, excluding capital leases
|
—
|
|
|
10,260
|
|
|
—
|
|
|
10,260
|
|
N/A
|
|
N/A
|
|
(570
|
)
|
9,690
|
|
|
|
$
|
249
|
|
|
11,034
|
|
|
5
|
|
|
11,288
|
|
(629
|
)
|
(73
|
)
|
(570
|
)
|
10,016
|
|
|
Millions of Dollars
|
|||||||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
|||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
|
2016
|
|
|||||||||
|
U.S.
|
|
|
Int’l.
|
|
|
U.S.
|
|
|
Int’l.
|
|
|
|
|
|
|||
Change in Benefit Obligation
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Benefit obligation at January 1
|
$
|
2,881
|
|
|
1,055
|
|
|
2,791
|
|
|
912
|
|
|
225
|
|
|
219
|
|
Service cost
|
132
|
|
|
32
|
|
|
127
|
|
|
32
|
|
|
6
|
|
|
7
|
|
|
Interest cost
|
108
|
|
|
27
|
|
|
116
|
|
|
28
|
|
|
8
|
|
|
8
|
|
|
Plan participant contributions
|
—
|
|
|
2
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
2
|
|
|
Actuarial loss (gain)
|
267
|
|
|
(5
|
)
|
|
62
|
|
|
237
|
|
|
6
|
|
|
(6
|
)
|
|
Benefits paid
|
(345
|
)
|
|
(20
|
)
|
|
(215
|
)
|
|
(19
|
)
|
|
(16
|
)
|
|
(13
|
)
|
|
Curtailment gain
|
—
|
|
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
—
|
|
|
Acquisition of a business
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
Foreign currency exchange rate change
|
—
|
|
|
118
|
|
|
—
|
|
|
(107
|
)
|
|
—
|
|
|
—
|
|
|
Benefit obligation at December 31
|
$
|
3,043
|
|
|
1,209
|
|
|
2,881
|
|
|
1,055
|
|
|
232
|
|
|
225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Change in Fair Value of Plan Assets
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Fair value of plan assets at January 1
|
$
|
2,274
|
|
|
796
|
|
|
2,023
|
|
|
742
|
|
|
—
|
|
|
—
|
|
Actual return on plan assets
|
399
|
|
|
71
|
|
|
136
|
|
|
148
|
|
|
—
|
|
|
—
|
|
|
Company contributions
|
423
|
|
|
35
|
|
|
330
|
|
|
40
|
|
|
13
|
|
|
11
|
|
|
Plan participant contributions
|
—
|
|
|
2
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
2
|
|
|
Benefits paid
|
(345
|
)
|
|
(20
|
)
|
|
(215
|
)
|
|
(19
|
)
|
|
(16
|
)
|
|
(13
|
)
|
|
Foreign currency exchange rate change
|
—
|
|
|
88
|
|
|
—
|
|
|
(118
|
)
|
|
—
|
|
|
—
|
|
|
Fair value of plan assets at December 31
|
$
|
2,751
|
|
|
972
|
|
|
2,274
|
|
|
796
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Funded Status at December 31
|
$
|
(292
|
)
|
|
(237
|
)
|
|
(607
|
)
|
|
(259
|
)
|
|
(232
|
)
|
|
(225
|
)
|
|
Millions of Dollars
|
|||||||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
|||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
|
2016
|
|
|||||||||
|
U.S.
|
|
|
Int’l.
|
|
|
U.S.
|
|
|
Int’l.
|
|
|
|
|
|
|||
Amounts Recognized in the Consolidated Balance Sheet at December 31
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Current liabilities
|
$
|
(25
|
)
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
(16
|
)
|
|
(10
|
)
|
Noncurrent liabilities
|
(267
|
)
|
|
(237
|
)
|
|
(597
|
)
|
|
(259
|
)
|
|
(216
|
)
|
|
(215
|
)
|
|
Total recognized
|
$
|
(292
|
)
|
|
(237
|
)
|
|
(607
|
)
|
|
(259
|
)
|
|
(232
|
)
|
|
(225
|
)
|
|
Millions of Dollars
|
|||||||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
|||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
|
2016
|
|
|||||||||
|
U.S.
|
|
|
Int’l.
|
|
|
U.S.
|
|
|
Int’l.
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Unrecognized net actuarial loss (gain)
|
$
|
545
|
|
|
190
|
|
|
684
|
|
|
227
|
|
|
1
|
|
|
(5
|
)
|
Unrecognized prior service cost (credit)
|
—
|
|
|
(4
|
)
|
|
3
|
|
|
(5
|
)
|
|
(7
|
)
|
|
(9
|
)
|
|
Millions of Dollars
|
|||||||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
|||||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
|
2016
|
|
|||||||||
|
U.S.
|
|
|
Int’l.
|
|
|
U.S.
|
|
|
Int’l.
|
|
|
|
|
|
|||
Sources of Change in Other Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net gain (loss) arising during the period
|
$
|
(14
|
)
|
|
14
|
|
|
(54
|
)
|
|
(129
|
)
|
|
(6
|
)
|
|
7
|
|
Curtailment gain
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
Amortization of loss and settlements included in income
|
153
|
|
|
23
|
|
|
80
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
Net change in unrecognized net actuarial loss (gain) during the period
|
$
|
139
|
|
|
37
|
|
|
26
|
|
|
(84
|
)
|
|
(6
|
)
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Prior service cost arising during the period
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Amortization of prior service cost (credit) included in income
|
3
|
|
|
(1
|
)
|
|
3
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
Net change in unrecognized prior service cost (credit) during the period
|
$
|
3
|
|
|
(1
|
)
|
|
3
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
Millions of Dollars
|
|||||||||||
|
Pension Benefits
|
|||||||||||
|
2017
|
|
2016
|
|||||||||
|
U.S.
|
|
|
Int’l.
|
|
|
U.S.
|
|
|
Int’l.
|
|
|
|
|
|
|
|
|
|
|
|||||
Projected benefit obligations
|
$
|
172
|
|
|
389
|
|
|
2,881
|
|
|
355
|
|
Accumulated benefit obligations
|
143
|
|
|
368
|
|
|
2,601
|
|
|
334
|
|
|
Fair value of plan assets
|
—
|
|
|
196
|
|
|
2,274
|
|
|
166
|
|
|
Millions of Dollars
|
||||||||||||||||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|||||||||||||
|
U.S.
|
|
|
Int’l.
|
|
|
U.S.
|
|
|
Int’l.
|
|
|
U.S.
|
|
|
Int’l.
|
|
|
|
|
|
|
|
||||
Components of Net Periodic Benefit Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Service cost
|
$
|
132
|
|
|
32
|
|
|
127
|
|
|
32
|
|
|
124
|
|
|
38
|
|
|
6
|
|
|
7
|
|
|
7
|
|
Interest cost
|
108
|
|
|
27
|
|
|
116
|
|
|
28
|
|
|
109
|
|
|
28
|
|
|
8
|
|
|
8
|
|
|
7
|
|
|
Expected return on plan assets
|
(146
|
)
|
|
(40
|
)
|
|
(128
|
)
|
|
(38
|
)
|
|
(138
|
)
|
|
(37
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Amortization of prior service cost (credit)
|
3
|
|
|
(1
|
)
|
|
3
|
|
|
(1
|
)
|
|
3
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
Recognized net actuarial loss (gain)
|
70
|
|
|
23
|
|
|
72
|
|
|
14
|
|
|
75
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
Settlements
|
83
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
80
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total net periodic benefit cost
|
$
|
250
|
|
|
41
|
|
|
198
|
|
|
35
|
|
|
253
|
|
|
43
|
|
|
12
|
|
|
14
|
|
|
11
|
|
|
Millions of Dollars
|
||||||||
|
Pension Benefits
|
|
Other Benefits
|
|
|||||
|
U.S.
|
|
|
Int’l.
|
|
|
|
||
|
|
|
|
|
|
||||
Unrecognized net actuarial loss
|
$
|
59
|
|
|
19
|
|
|
—
|
|
Unrecognized prior service credit
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
Pension Benefits
|
|
Other Benefits
|
|||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||
|
U.S.
|
|
|
Int’l.
|
|
U.S.
|
|
Int’l.
|
|
|
|
|
Assumptions Used to Determine Benefit Obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
3.60
|
%
|
|
2.36
|
|
3.95
|
|
2.42
|
|
3.35
|
|
3.65
|
Rate of compensation increase
|
4.00
|
|
|
3.74
|
|
4.00
|
|
3.78
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assumptions Used to Determine Net Periodic Benefit Cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
Discount rate
|
3.95
|
%
|
|
2.46
|
|
4.35
|
|
3.35
|
|
3.65
|
|
4.00
|
Expected return on plan assets
|
6.75
|
|
|
4.74
|
|
6.75
|
|
5.31
|
|
—
|
|
—
|
Rate of compensation increase
|
4.00
|
|
|
3.78
|
|
4.00
|
|
3.65
|
|
—
|
|
—
|
•
|
Fair values of equity securities and government debt securities are based on quoted market prices.
|
•
|
Fair values of mutual funds are valued based on quoted market prices, which represent the net asset value of shares held.
|
•
|
Cash and cash equivalents are valued at cost, which approximates fair value.
|
•
|
Fair values of insurance contracts are valued at the present value of the future benefit payments owed by the insurance company to the plans’ participants.
|
•
|
Fair values of real estate investments are valued using real estate valuation techniques and other methods that include reference to third-party sources and sales comparables where available.
|
•
|
Fair values of investments in common/collective trusts are valued at net asset value (NAV) as determined by the issuer of each fund. Certain investments that are measured at fair value using the NAV value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
|
|
Millions of Dollars
|
|||||||||||||||||||||||
|
U.S.
|
|
International
|
|||||||||||||||||||||
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Equity securities
|
$
|
589
|
|
|
—
|
|
|
—
|
|
|
589
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Government debt securities
|
632
|
|
|
—
|
|
|
—
|
|
|
632
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Mutual funds
|
129
|
|
|
—
|
|
|
—
|
|
|
129
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Cash and cash equivalents
|
90
|
|
|
—
|
|
|
—
|
|
|
90
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
Insurance contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14
|
|
|
14
|
|
|
Real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
|
Total assets in the fair value hierarchy
|
1,440
|
|
|
—
|
|
|
—
|
|
|
1,440
|
|
|
6
|
|
|
—
|
|
|
22
|
|
|
28
|
|
|
Common/collective trusts measured at NAV
|
|
|
|
|
|
|
1,311
|
|
|
|
|
|
|
|
|
944
|
|
|||||||
Total
|
$
|
1,440
|
|
|
—
|
|
|
—
|
|
|
2,751
|
|
|
6
|
|
|
—
|
|
|
22
|
|
|
972
|
|
|
Millions of Dollars
|
|||||||||||||||||||||||
|
U.S.
|
|
International
|
|||||||||||||||||||||
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Equity securities
|
$
|
533
|
|
|
—
|
|
|
—
|
|
|
533
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Mutual funds
|
47
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Cash and cash equivalents
|
21
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
Insurance contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
13
|
|
|
Real estate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
|
Total assets in the fair value hierarchy
|
601
|
|
|
—
|
|
|
—
|
|
|
601
|
|
|
5
|
|
|
—
|
|
|
19
|
|
|
24
|
|
|
Common/collective trusts measured at NAV
|
|
|
|
|
|
|
1,673
|
|
|
|
|
|
|
|
|
772
|
|
|||||||
Total
|
$
|
601
|
|
|
—
|
|
|
—
|
|
|
2,274
|
|
|
5
|
|
|
—
|
|
|
19
|
|
|
796
|
|
|
Millions of Dollars
|
||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
||||
Share-based compensation expense
|
$
|
142
|
|
|
156
|
|
|
144
|
|
Income tax benefit
|
(74
|
)
|
|
(59
|
)
|
|
(54
|
)
|
|
|
|
|
|
|
|
Millions of Dollars
|
|
||||||
|
Options
|
|
|
Weighted-
Average
Exercise Price
|
|
|
Weighted-Average
Grant-Date
Fair Value
|
|
|
Aggregate
Intrinsic Value |
|
|||
|
|
|
|
|
|
|
|
|||||||
Outstanding at January 1, 2017
|
5,103,130
|
|
|
$
|
49.48
|
|
|
|
|
|
|
|||
Granted
|
864,100
|
|
|
78.48
|
|
|
$
|
16.95
|
|
|
|
|||
Forfeited
|
(32,500
|
)
|
|
78.48
|
|
|
|
|
|
|
||||
Exercised
|
(1,095,875
|
)
|
|
32.38
|
|
|
|
|
$
|
62
|
|
|||
Outstanding at December 31, 2017
|
4,838,855
|
|
|
$
|
58.34
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|||||||
Vested at December 31, 2017
|
4,191,679
|
|
|
$
|
55.25
|
|
|
|
|
$
|
195
|
|
||
|
|
|
|
|
|
|
|
|||||||
Exercisable at December 31, 2017
|
3,258,015
|
|
|
$
|
48.79
|
|
|
|
|
$
|
172
|
|
|
2017
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
Risk-free interest rate
|
2.28
|
%
|
|
1.71
|
|
1.60
|
Dividend yield
|
2.90
|
%
|
|
3.00
|
|
3.00
|
Volatility factor
|
26.91
|
%
|
|
28.68
|
|
34.17
|
Expected life (years)
|
7.22
|
|
|
7.08
|
|
6.66
|
|
|
|
|
|
Millions of Dollars
|
|
||||
|
Stock Units
|
|
|
Weighted-Average
Grant-Date Fair Value
|
|
|
Total Fair Value
|
|
||
|
|
|
|
|
|
|||||
Outstanding at January 1, 2017
|
2,643,139
|
|
|
$
|
71.28
|
|
|
|
||
Granted
|
975,164
|
|
|
78.49
|
|
|
|
|||
Forfeited
|
(58,171
|
)
|
|
77.18
|
|
|
|
|||
Issued
|
(1,063,707
|
)
|
|
63.67
|
|
|
$
|
85
|
|
|
Outstanding at December 31, 2017
|
2,496,425
|
|
|
$
|
77.20
|
|
|
|
||
|
|
|
|
|
|
|||||
Not Vested at December 31, 2017
|
1,615,668
|
|
|
$
|
77.32
|
|
|
|
|
|
|
|
|
Millions of Dollars
|
|
||||
|
Performance
Share Units
|
|
|
Weighted-Average
Grant-Date
Fair Value
|
|
|
Total Fair Value
|
|
||
|
|
|
|
|
|
|||||
Outstanding at January 1, 2017
|
3,239,497
|
|
|
$
|
50.12
|
|
|
|
||
Granted
|
642,212
|
|
|
86.88
|
|
|
|
|||
Issued
|
(681,219
|
)
|
|
42.85
|
|
|
$
|
54
|
|
|
Cash settled
|
(642,212
|
)
|
|
86.88
|
|
|
56
|
|
||
Outstanding at December 31, 2017
|
2,558,278
|
|
|
$
|
52.06
|
|
|
|
||
|
|
|
|
|
|
|||||
Not Vested at December 31, 2017
|
286,031
|
|
|
$
|
66.65
|
|
|
|
|
Millions of Dollars
|
||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
Income Tax Expense (Benefit)
|
|
|
|
|
|
||||
Federal
|
|
|
|
|
|
||||
Current
|
$
|
9
|
|
|
(105
|
)
|
|
1,128
|
|
Deferred
|
(1,960
|
)
|
|
645
|
|
|
444
|
|
|
Foreign
|
|
|
|
|
|
||||
Current
|
126
|
|
|
66
|
|
|
(74
|
)
|
|
Deferred
|
3
|
|
|
(84
|
)
|
|
42
|
|
|
State and local
|
|
|
|
|
|
||||
Current
|
61
|
|
|
(24
|
)
|
|
227
|
|
|
Deferred
|
68
|
|
|
49
|
|
|
(3
|
)
|
|
|
$
|
(1,693
|
)
|
|
547
|
|
|
1,764
|
|
|
Millions of Dollars
|
|||||
|
2017
|
|
|
2016
|
|
|
Deferred Tax Liabilities
|
|
|
|
|||
Properties, plants and equipment, and intangibles
|
$
|
2,942
|
|
|
4,525
|
|
Investment in joint ventures
|
1,923
|
|
|
2,442
|
|
|
Investment in subsidiaries
|
594
|
|
|
803
|
|
|
Inventory
|
—
|
|
|
154
|
|
|
Other
|
18
|
|
|
19
|
|
|
Total deferred tax liabilities
|
5,477
|
|
|
7,943
|
|
|
Deferred Tax Assets
|
|
|
|
|||
Benefit plan accruals
|
314
|
|
|
669
|
|
|
Inventory
|
10
|
|
|
—
|
|
|
Asset retirement obligations and accrued environmental costs
|
121
|
|
|
211
|
|
|
Other financial accruals and deferrals
|
44
|
|
|
188
|
|
|
Loss and credit carryforwards
|
96
|
|
|
261
|
|
|
Other
|
3
|
|
|
1
|
|
|
Total deferred tax assets
|
588
|
|
|
1,330
|
|
|
Less: valuation allowance
|
28
|
|
|
38
|
|
|
Net deferred tax assets
|
560
|
|
|
1,292
|
|
|
Net deferred tax liabilities
|
$
|
4,917
|
|
|
6,651
|
|
|
Millions of Dollars
|
||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
||||
Balance at January 1
|
$
|
70
|
|
|
82
|
|
|
142
|
|
Additions for tax positions of prior years
|
1
|
|
|
5
|
|
|
6
|
|
|
Reductions for tax positions of prior years
|
(5
|
)
|
|
(17
|
)
|
|
(17
|
)
|
|
Settlements
|
(32
|
)
|
|
—
|
|
|
(49
|
)
|
|
Balance at December 31
|
$
|
34
|
|
|
70
|
|
|
82
|
|
|
Millions of Dollars
|
|
Percentage of
Income Before Income Taxes
|
|||||||||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
Income before income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
United States
|
$
|
2,799
|
|
|
1,713
|
|
|
4,983
|
|
|
78.7
|
%
|
|
78.2
|
|
|
82.4
|
|
Foreign
|
756
|
|
|
478
|
|
|
1,061
|
|
|
21.3
|
|
|
21.8
|
|
|
17.6
|
|
|
|
$
|
3,555
|
|
|
2,191
|
|
|
6,044
|
|
|
100.0
|
%
|
|
100.0
|
|
|
100.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Federal statutory income tax
|
$
|
1,244
|
|
|
767
|
|
|
2,115
|
|
|
35.0
|
%
|
|
35.0
|
|
|
35.0
|
|
State income tax, net of federal benefit
|
79
|
|
|
12
|
|
|
150
|
|
|
2.2
|
|
|
0.6
|
|
|
2.5
|
|
|
Tax Cuts and Jobs Act
|
(2,721
|
)
|
|
—
|
|
|
—
|
|
|
(76.5
|
)
|
|
—
|
|
|
—
|
|
|
Foreign rate differential
|
(210
|
)
|
|
(152
|
)
|
|
(239
|
)
|
|
(5.9
|
)
|
|
(6.9
|
)
|
|
(3.9
|
)
|
|
Noncontrolling interests
|
(46
|
)
|
|
(26
|
)
|
|
(13
|
)
|
|
(1.3
|
)
|
|
(1.2
|
)
|
|
(0.2
|
)
|
|
Federal manufacturing deduction
|
(18
|
)
|
|
—
|
|
|
(77
|
)
|
|
(0.5
|
)
|
|
—
|
|
|
(1.3
|
)
|
|
Change in valuation allowance
|
(4
|
)
|
|
(81
|
)
|
|
(17
|
)
|
|
(0.1
|
)
|
|
(3.7
|
)
|
|
(0.2
|
)
|
|
Goodwill allocated to assets sold
|
—
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|
German tax legislation
|
—
|
|
|
—
|
|
|
(103
|
)
|
|
—
|
|
|
—
|
|
|
(1.7
|
)
|
|
Sale of foreign subsidiaries
|
—
|
|
|
—
|
|
|
(125
|
)
|
|
—
|
|
|
—
|
|
|
(2.1
|
)
|
|
Other
|
(17
|
)
|
|
27
|
|
|
32
|
|
|
(0.5
|
)
|
|
1.2
|
|
|
0.4
|
|
|
|
$
|
(1,693
|
)
|
|
547
|
|
|
1,764
|
|
|
(47.6
|
)%
|
|
25.0
|
|
|
29.2
|
|
|
Millions of Dollars
|
|||||||||||
|
Defined
Benefit
Plans
|
|
|
Foreign
Currency
Translation
|
|
|
Hedging
|
|
|
Accumulated
Other
Comprehensive
Loss
|
|
|
|
|
|
|
|
|
|
|
|||||
December 31, 2014
|
$
|
(696
|
)
|
|
167
|
|
|
(2
|
)
|
|
(531
|
)
|
Other comprehensive loss before reclassification
|
(78
|
)
|
|
(156
|
)
|
|
—
|
|
|
(234
|
)
|
|
Amounts reclassified from accumulated other comprehensive loss*
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of defined benefit plan items**
|
|
|
|
|
|
|
|
|
|
|
|
|
Actuarial losses and settlements
|
112
|
|
|
—
|
|
|
—
|
|
|
112
|
|
|
Net current period other comprehensive income (loss)
|
34
|
|
|
(156
|
)
|
|
—
|
|
|
(122
|
)
|
|
December 31, 2015
|
(662
|
)
|
|
11
|
|
|
(2
|
)
|
|
(653
|
)
|
|
Other comprehensive income (loss) before reclassifications
|
(112
|
)
|
|
(296
|
)
|
|
5
|
|
|
(403
|
)
|
|
Amounts reclassified from accumulated other comprehensive loss*
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of defined benefit plan items**
|
|
|
|
|
|
|
|
|
|
|
|
|
Actuarial losses and settlements
|
61
|
|
|
—
|
|
|
—
|
|
|
61
|
|
|
Net current period other comprehensive income (loss)
|
(51
|
)
|
|
(296
|
)
|
|
5
|
|
|
(342
|
)
|
|
December 31, 2016
|
(713
|
)
|
|
(285
|
)
|
|
3
|
|
|
(995
|
)
|
|
Other comprehensive income before reclassifications
|
3
|
|
|
259
|
|
|
4
|
|
|
266
|
|
|
Amounts reclassified from accumulated other comprehensive loss*
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of defined benefit plan items**
|
|
|
|
|
|
|
|
|
|
|
|
|
Actuarial losses and settlements
|
112
|
|
|
—
|
|
|
—
|
|
|
112
|
|
|
Net current period other comprehensive income
|
115
|
|
|
259
|
|
|
4
|
|
|
378
|
|
|
December 31, 2017
|
$
|
(598
|
)
|
|
(26
|
)
|
|
7
|
|
|
(617
|
)
|
|
Millions of Dollars
|
||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
Cash Payments (Receipts)
|
|
|
|
|
|
||||
Interest
|
$
|
421
|
|
|
311
|
|
|
275
|
|
Income taxes*
|
(257
|
)
|
|
(375
|
)
|
|
1,560
|
|
|
Millions of Dollars
|
||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
||||
Operating revenues and other income (a)
|
$
|
2,596
|
|
|
2,174
|
|
|
2,452
|
|
Purchases (b)
|
10,468
|
|
|
8,109
|
|
|
8,142
|
|
|
Operating expenses and selling, general and
administrative expenses (c)
|
79
|
|
|
125
|
|
|
129
|
|
(a)
|
We sold NGL and other petrochemical feedstocks, along with solvents, to CPChem, and we sold gas oil and hydrogen feedstocks to Excel Paralubes (Excel). We sold refined products to our OnCue Holdings, LLC joint venture. We sold certain feedstocks and intermediate products to WRB and also acted as agent for WRB in supplying crude oil and other feedstocks for a fee. In addition, we charged several of our affiliates, including CPChem, for the use of common facilities, such as steam generators, waste and water treaters, and warehouse facilities.
|
(b)
|
We purchased crude oil and refined products from WRB and also acted as agent for WRB in distributing solvents. We purchased natural gas and NGL from DCP Midstream and CPChem, as well as other feedstocks from various affiliates, for use in our refinery and fractionation processes. We paid NGL fractionation fees to CPChem. We also paid fees to various pipeline equity companies for transporting crude oil, refined products and NGL. We purchased base oils and fuel products from Excel for use in our refining and specialty businesses.
|
(c)
|
We paid utility and processing fees to various affiliates.
|
1)
|
Midstream—
Provides crude oil and refined products transportation, terminaling and processing services, as well as natural gas, NGL and liquefied petroleum gas (LPG) transportation, storage, processing and marketing services, mainly in the United States. The Midstream segment includes our master limited partnership, Phillips 66 Partners, as well as our
50 percent
equity investment in DCP Midstream.
|
2)
|
Chemicals—
Consists of our
50 percent
equity investment in CPChem, which manufactures and markets petrochemicals and plastics on a worldwide basis.
|
3)
|
Refining—
Refines crude oil and other feedstocks into petroleum products (such as gasoline, distillates and aviation fuels) at
13
refineries in the United States and Europe.
|
4)
|
Marketing and Specialties—
Purchases for resale and markets refined petroleum products, mainly in the United States and Europe. In addition, this segment includes the manufacturing and marketing of specialty products, as well as power generation operations.
|
|
Millions of Dollars
|
||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
Sales and Other Operating Revenues
|
|
|
|
|
|
||||
Midstream
|
|
|
|
|
|
||||
Total sales
|
$
|
6,620
|
|
|
4,226
|
|
|
3,676
|
|
Intersegment eliminations
|
(1,842
|
)
|
|
(1,299
|
)
|
|
(1,034
|
)
|
|
Total Midstream
|
4,778
|
|
|
2,927
|
|
|
2,642
|
|
|
Chemicals
|
5
|
|
|
5
|
|
|
5
|
|
|
Refining
|
|
|
|
|
|
||||
Total sales
|
65,494
|
|
|
52,068
|
|
|
63,470
|
|
|
Intersegment eliminations
|
(40,284
|
)
|
|
(34,120
|
)
|
|
(40,317
|
)
|
|
Total Refining
|
25,210
|
|
|
17,948
|
|
|
23,153
|
|
|
Marketing and Specialties
|
|
|
|
|
|
||||
Total sales
|
73,565
|
|
|
64,476
|
|
|
74,591
|
|
|
Intersegment eliminations
|
(1,233
|
)
|
|
(1,109
|
)
|
|
(1,446
|
)
|
|
Total Marketing and Specialties
|
72,332
|
|
|
63,367
|
|
|
73,145
|
|
|
Corporate and Other
|
29
|
|
|
32
|
|
|
30
|
|
|
Consolidated sales and other operating revenues
|
$
|
102,354
|
|
|
84,279
|
|
|
98,975
|
|
|
|
|
|
|
|
||||
Depreciation, Amortization and Impairments
|
|
|
|
|
|
||||
Midstream
|
$
|
299
|
|
|
218
|
|
|
128
|
|
Chemicals
|
—
|
|
|
—
|
|
|
—
|
|
|
Refining
|
838
|
|
|
770
|
|
|
741
|
|
|
Marketing and Specialties
|
116
|
|
|
107
|
|
|
100
|
|
|
Corporate and Other
|
89
|
|
|
78
|
|
|
116
|
|
|
Consolidated depreciation, amortization and impairments
|
$
|
1,342
|
|
|
1,173
|
|
|
1,085
|
|
|
Millions of Dollars
|
||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
Equity in Earnings of Affiliates
|
|
|
|
|
|
||||
Midstream
|
$
|
454
|
|
|
184
|
|
|
(268
|
)
|
Chemicals
|
713
|
|
|
834
|
|
|
1,316
|
|
|
Refining
|
322
|
|
|
164
|
|
|
325
|
|
|
Marketing and Specialties
|
243
|
|
|
232
|
|
|
207
|
|
|
Corporate and Other
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
Consolidated equity in earnings of affiliates
|
$
|
1,732
|
|
|
1,414
|
|
|
1,573
|
|
|
|
|
|
|
|
||||
Income Tax Expense (Benefit)
|
|
|
|
|
|
||||
Midstream
|
$
|
174
|
|
|
123
|
|
|
73
|
|
Chemicals
|
191
|
|
|
256
|
|
|
353
|
|
|
Refining
|
672
|
|
|
61
|
|
|
1,104
|
|
|
Marketing and Specialties
|
334
|
|
|
370
|
|
|
466
|
|
|
Corporate and Other
|
(3,064
|
)
|
|
(263
|
)
|
|
(232
|
)
|
|
Consolidated income tax expense (benefit)
|
$
|
(1,693
|
)
|
|
547
|
|
|
1,764
|
|
|
|
|
|
|
|
||||
Net Income (Loss)
|
|
|
|
|
|
||||
Midstream
|
$
|
464
|
|
|
280
|
|
|
74
|
|
Chemicals
|
525
|
|
|
583
|
|
|
962
|
|
|
Refining
|
1,404
|
|
|
374
|
|
|
2,555
|
|
|
Marketing and Specialties
|
686
|
|
|
891
|
|
|
1,187
|
|
|
Corporate and Other
|
2,169
|
|
|
(484
|
)
|
|
(498
|
)
|
|
Consolidated net income
|
$
|
5,248
|
|
|
1,644
|
|
|
4,280
|
|
|
Millions of Dollars
|
||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
Investments In and Advances To Affiliates
|
|
|
|
|
|
||||
Midstream
|
$
|
4,734
|
|
|
4,769
|
|
|
4,198
|
|
Chemicals
|
6,222
|
|
|
5,773
|
|
|
5,177
|
|
|
Refining
|
2,398
|
|
|
2,420
|
|
|
2,262
|
|
|
Marketing and Specialties
|
390
|
|
|
391
|
|
|
342
|
|
|
Corporate and Other
|
—
|
|
|
1
|
|
|
1
|
|
|
Consolidated investments in and advances to affiliates
|
$
|
13,744
|
|
|
13,354
|
|
|
11,980
|
|
|
|
|
|
|
|
||||
Total Assets
|
|
|
|
|
|
||||
Midstream
|
$
|
13,231
|
|
|
12,832
|
|
|
11,043
|
|
Chemicals
|
6,226
|
|
|
5,802
|
|
|
5,237
|
|
|
Refining
|
23,820
|
|
|
22,825
|
|
|
21,993
|
|
|
Marketing and Specialties
|
7,103
|
|
|
6,227
|
|
|
5,631
|
|
|
Corporate and Other
|
3,991
|
|
|
3,967
|
|
|
4,676
|
|
|
Consolidated total assets
|
$
|
54,371
|
|
|
51,653
|
|
|
48,580
|
|
|
|
|
|
|
|
||||
Capital Expenditures and Investments
|
|
|
|
|
|
||||
Midstream
|
$
|
771
|
|
|
1,453
|
|
|
4,457
|
|
Chemicals
|
—
|
|
|
—
|
|
|
—
|
|
|
Refining
|
853
|
|
|
1,149
|
|
|
1,069
|
|
|
Marketing and Specialties
|
108
|
|
|
98
|
|
|
122
|
|
|
Corporate and Other
|
100
|
|
|
144
|
|
|
116
|
|
|
Consolidated capital expenditures and investments
|
$
|
1,832
|
|
|
2,844
|
|
|
5,764
|
|
|
|
|
|
|
|
||||
Interest Income and Expense
|
|
|
|
|
|
||||
Interest income
|
|
|
|
|
|
||||
Midstream
|
$
|
1
|
|
|
2
|
|
|
—
|
|
Marketing and Specialties
|
—
|
|
|
—
|
|
|
2
|
|
|
Corporate and Other
|
30
|
|
|
16
|
|
|
25
|
|
|
Consolidated interest income
|
$
|
31
|
|
|
18
|
|
|
27
|
|
|
|
|
|
|
|
||||
Interest and debt expense
|
|
|
|
|
|
||||
Corporate and Other
|
$
|
438
|
|
|
338
|
|
|
310
|
|
Sales and Other Operating Revenues by Product Line
|
|
|
|
|
|
||||
Refined products
|
$
|
85,405
|
|
|
73,385
|
|
|
86,249
|
|
Crude oil resales
|
11,808
|
|
|
7,594
|
|
|
8,993
|
|
|
NGL
|
4,670
|
|
|
3,107
|
|
|
2,998
|
|
|
Other
|
471
|
|
|
193
|
|
|
735
|
|
|
Consolidated sales and other operating revenues by product line
|
$
|
102,354
|
|
|
84,279
|
|
|
98,975
|
|
|
Millions of Dollars
|
|||||||||||||||||
|
Sales and Other Operating Revenues*
|
|
Long-Lived Assets**
|
|||||||||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
United States
|
$
|
75,684
|
|
|
59,742
|
|
|
69,578
|
|
|
33,264
|
|
|
32,442
|
|
|
29,624
|
|
United Kingdom
|
10,626
|
|
|
9,895
|
|
|
12,120
|
|
|
1,254
|
|
|
1,177
|
|
|
1,459
|
|
|
Germany
|
6,692
|
|
|
6,128
|
|
|
6,584
|
|
|
591
|
|
|
503
|
|
|
502
|
|
|
Other foreign countries
|
9,352
|
|
|
8,514
|
|
|
10,693
|
|
|
95
|
|
|
87
|
|
|
116
|
|
|
Worldwide consolidated
|
$
|
102,354
|
|
|
84,279
|
|
|
98,975
|
|
|
35,204
|
|
|
34,209
|
|
|
31,701
|
|
•
|
Net proceeds of
$737 million
from a private placement of
13,819,791
perpetual convertible preferred units, at a price of
$54.27
per unit. Holders of the preferred units are entitled to receive cumulative quarterly distributions equal to
$0.678375
per unit. Beginning in October 2020, holders are entitled to receive quarterly distributions equal to the greater of
$0.678375
per unit or the per-unit distribution paid to common unitholders.
|
•
|
Net proceeds of
$295 million
from a private placement of
6,304,204
common units, at a price of
$47.59
per unit.
|
•
|
A portion of the
$643 million
of net proceeds from a public offering of
$650 million
of Senior Notes. See
Note 12—
Debt
for additional information on the Senior Notes.
|
•
|
Phillips 66 and Phillips 66 Company (in each case, reflecting investments in subsidiaries utilizing the equity method of accounting).
|
•
|
All other nonguarantor subsidiaries.
|
•
|
The consolidating adjustments necessary to present Phillips 66’s results on a consolidated basis.
|
|
Millions of Dollars
|
||||||||||
|
Year Ended December 31, 2017
|
||||||||||
Statement of Income
|
Phillips 66
|
|
Phillips 66 Company
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
|
|
Revenues and Other Income
|
|
|
|
|
|
||||||
Sales and other operating revenues
|
$
|
—
|
|
74,640
|
|
27,714
|
|
—
|
|
102,354
|
|
Equity in earnings of affiliates
|
5,336
|
|
3,256
|
|
559
|
|
(7,419
|
)
|
1,732
|
|
|
Net gain on dispositions
|
—
|
|
1
|
|
14
|
|
—
|
|
15
|
|
|
Other income
|
3
|
|
471
|
|
47
|
|
—
|
|
521
|
|
|
Intercompany revenues
|
—
|
|
1,610
|
|
13,457
|
|
(15,067
|
)
|
—
|
|
|
Total Revenues and Other Income
|
5,339
|
|
79,978
|
|
41,791
|
|
(22,486
|
)
|
104,622
|
|
|
|
|
|
|
|
|
||||||
Costs and Expenses
|
|
|
|
|
|
||||||
Purchased crude oil and products
|
—
|
|
63,812
|
|
30,379
|
|
(14,782
|
)
|
79,409
|
|
|
Operating expenses
|
—
|
|
3,672
|
|
1,085
|
|
(58
|
)
|
4,699
|
|
|
Selling, general and administrative expenses
|
7
|
|
1,300
|
|
399
|
|
(11
|
)
|
1,695
|
|
|
Depreciation and amortization
|
—
|
|
892
|
|
426
|
|
—
|
|
1,318
|
|
|
Impairments
|
—
|
|
20
|
|
4
|
|
—
|
|
24
|
|
|
Taxes other than income taxes
|
—
|
|
5,784
|
|
7,678
|
|
—
|
|
13,462
|
|
|
Accretion on discounted liabilities
|
—
|
|
17
|
|
5
|
|
—
|
|
22
|
|
|
Interest and debt expense
|
348
|
|
70
|
|
236
|
|
(216
|
)
|
438
|
|
|
Total Costs and Expenses
|
355
|
|
75,567
|
|
40,212
|
|
(15,067
|
)
|
101,067
|
|
|
Income before income taxes
|
4,984
|
|
4,411
|
|
1,579
|
|
(7,419
|
)
|
3,555
|
|
|
Income tax benefit
|
(122
|
)
|
(925
|
)
|
(646
|
)
|
—
|
|
(1,693
|
)
|
|
Net Income
|
5,106
|
|
5,336
|
|
2,225
|
|
(7,419
|
)
|
5,248
|
|
|
Less: net income attributable to noncontrolling interests
|
—
|
|
—
|
|
142
|
|
—
|
|
142
|
|
|
Net Income Attributable to Phillips 66
|
$
|
5,106
|
|
5,336
|
|
2,083
|
|
(7,419
|
)
|
5,106
|
|
|
|
|
|
|
|
||||||
Comprehensive Income
|
$
|
5,484
|
|
5,714
|
|
2,498
|
|
(8,070
|
)
|
5,626
|
|
|
Millions of Dollars
|
||||||||||
|
Year Ended December 31, 2016
|
||||||||||
Statement of Income
|
Phillips 66
|
|
Phillips 66 Company
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
|
|
Revenues and Other Income
|
|
|
|
|
|
||||||
Sales and other operating revenues
|
$
|
—
|
|
58,822
|
|
25,457
|
|
—
|
|
84,279
|
|
Equity in earnings of affiliates
|
1,797
|
|
1,839
|
|
296
|
|
(2,518
|
)
|
1,414
|
|
|
Net gain (loss) on dispositions
|
—
|
|
(9
|
)
|
19
|
|
—
|
|
10
|
|
|
Other income
|
—
|
|
42
|
|
32
|
|
—
|
|
74
|
|
|
Intercompany revenues
|
—
|
|
864
|
|
9,160
|
|
(10,024
|
)
|
—
|
|
|
Total Revenues and Other Income
|
1,797
|
|
61,558
|
|
34,964
|
|
(12,542
|
)
|
85,777
|
|
|
|
|
|
|
|
|
||||||
Costs and Expenses
|
|
|
|
|
|
||||||
Purchased crude oil and products
|
—
|
|
48,171
|
|
24,102
|
|
(9,805
|
)
|
62,468
|
|
|
Operating expenses
|
—
|
|
3,465
|
|
846
|
|
(36
|
)
|
4,275
|
|
|
Selling, general and administrative expenses
|
6
|
|
1,236
|
|
406
|
|
(10
|
)
|
1,638
|
|
|
Depreciation and amortization
|
—
|
|
821
|
|
347
|
|
—
|
|
1,168
|
|
|
Impairments
|
—
|
|
1
|
|
4
|
|
—
|
|
5
|
|
|
Taxes other than income taxes
|
—
|
|
5,477
|
|
8,211
|
|
—
|
|
13,688
|
|
|
Accretion on discounted liabilities
|
—
|
|
16
|
|
5
|
|
—
|
|
21
|
|
|
Interest and debt expense
|
366
|
|
21
|
|
124
|
|
(173
|
)
|
338
|
|
|
Foreign currency transaction gains
|
—
|
|
—
|
|
(15
|
)
|
—
|
|
(15
|
)
|
|
Total Costs and Expenses
|
372
|
|
59,208
|
|
34,030
|
|
(10,024
|
)
|
83,586
|
|
|
Income before income taxes
|
1,425
|
|
2,350
|
|
934
|
|
(2,518
|
)
|
2,191
|
|
|
Income tax expense (benefit)
|
(130
|
)
|
553
|
|
124
|
|
—
|
|
547
|
|
|
Net Income
|
1,555
|
|
1,797
|
|
810
|
|
(2,518
|
)
|
1,644
|
|
|
Less: net income attributable to noncontrolling interests
|
—
|
|
—
|
|
89
|
|
—
|
|
89
|
|
|
Net Income Attributable to Phillips 66
|
$
|
1,555
|
|
1,797
|
|
721
|
|
(2,518
|
)
|
1,555
|
|
|
|
|
|
|
|
||||||
Comprehensive Income
|
$
|
1,213
|
|
1,455
|
|
451
|
|
(1,817
|
)
|
1,302
|
|
|
Millions of Dollars
|
||||||||||
|
Year Ended December 31, 2015
|
||||||||||
Statement of Income
|
Phillips 66
|
|
Phillips 66 Company
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
|
|
Revenues and Other Income
|
|
|
|
|
|
||||||
Sales and other operating revenues
|
$
|
—
|
|
68,478
|
|
30,497
|
|
—
|
|
98,975
|
|
Equity in earnings (losses) of affiliates
|
4,470
|
|
2,812
|
|
(134
|
)
|
(5,575
|
)
|
1,573
|
|
|
Net gain (loss) on dispositions
|
—
|
|
(115
|
)
|
398
|
|
—
|
|
283
|
|
|
Other income
|
—
|
|
81
|
|
37
|
|
—
|
|
118
|
|
|
Intercompany revenues
|
—
|
|
1,071
|
|
9,845
|
|
(10,916
|
)
|
—
|
|
|
Total Revenues and Other Income
|
4,470
|
|
72,327
|
|
40,643
|
|
(16,491
|
)
|
100,949
|
|
|
|
|
|
|
|
|
||||||
Costs and Expenses
|
|
|
|
|
|
||||||
Purchased crude oil and products
|
—
|
|
54,925
|
|
29,221
|
|
(10,747
|
)
|
73,399
|
|
|
Operating expenses
|
4
|
|
3,412
|
|
917
|
|
(39
|
)
|
4,294
|
|
|
Selling, general and administrative expenses
|
5
|
|
1,265
|
|
416
|
|
(16
|
)
|
1,670
|
|
|
Depreciation and amortization
|
—
|
|
818
|
|
260
|
|
—
|
|
1,078
|
|
|
Impairments
|
—
|
|
4
|
|
3
|
|
—
|
|
7
|
|
|
Taxes other than income taxes
|
—
|
|
5,505
|
|
8,572
|
|
—
|
|
14,077
|
|
|
Accretion on discounted liabilities
|
—
|
|
16
|
|
5
|
|
—
|
|
21
|
|
|
Interest and debt expense
|
365
|
|
25
|
|
34
|
|
(114
|
)
|
310
|
|
|
Foreign currency transaction losses
|
—
|
|
1
|
|
48
|
|
—
|
|
49
|
|
|
Total Costs and Expenses
|
374
|
|
65,971
|
|
39,476
|
|
(10,916
|
)
|
94,905
|
|
|
Income before income taxes
|
4,096
|
|
6,356
|
|
1,167
|
|
(5,575
|
)
|
6,044
|
|
|
Income tax expense (benefit)
|
(131
|
)
|
1,886
|
|
9
|
|
—
|
|
1,764
|
|
|
Net Income
|
4,227
|
|
4,470
|
|
1,158
|
|
(5,575
|
)
|
4,280
|
|
|
Less: net income attributable to noncontrolling interests
|
—
|
|
—
|
|
53
|
|
—
|
|
53
|
|
|
Net Income Attributable to Phillips 66
|
$
|
4,227
|
|
4,470
|
|
1,105
|
|
(5,575
|
)
|
4,227
|
|
|
|
|
|
|
|
||||||
Comprehensive Income
|
$
|
4,105
|
|
4,348
|
|
1,032
|
|
(5,327
|
)
|
4,158
|
|
|
Millions of Dollars
|
||||||||||
|
At December 31, 2017
|
||||||||||
Balance Sheet
|
Phillips 66
|
|
Phillips 66 Company
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
|
|
Assets
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
—
|
|
1,411
|
|
1,708
|
|
—
|
|
3,119
|
|
Accounts and notes receivable
|
10
|
|
5,317
|
|
4,476
|
|
(2,297
|
)
|
7,506
|
|
|
Inventories
|
—
|
|
2,386
|
|
1,009
|
|
—
|
|
3,395
|
|
|
Prepaid expenses and other current assets
|
2
|
|
276
|
|
92
|
|
—
|
|
370
|
|
|
Total Current Assets
|
12
|
|
9,390
|
|
7,285
|
|
(2,297
|
)
|
14,390
|
|
|
Investments and long-term receivables
|
32,125
|
|
23,483
|
|
9,959
|
|
(51,626
|
)
|
13,941
|
|
|
Net properties, plants and equipment
|
—
|
|
13,117
|
|
8,343
|
|
—
|
|
21,460
|
|
|
Goodwill
|
—
|
|
2,853
|
|
417
|
|
—
|
|
3,270
|
|
|
Intangibles
|
—
|
|
722
|
|
154
|
|
—
|
|
876
|
|
|
Other assets
|
12
|
|
266
|
|
158
|
|
(2
|
)
|
434
|
|
|
Total Assets
|
$
|
32,149
|
|
49,831
|
|
26,316
|
|
(53,925
|
)
|
54,371
|
|
|
|
|
|
|
|
||||||
Liabilities and Equity
|
|
|
|
|
|
||||||
Accounts payable
|
$
|
—
|
|
7,272
|
|
3,052
|
|
(2,297
|
)
|
8,027
|
|
Short-term debt
|
—
|
|
9
|
|
32
|
|
—
|
|
41
|
|
|
Accrued income and other taxes
|
—
|
|
451
|
|
551
|
|
—
|
|
1,002
|
|
|
Employee benefit obligations
|
—
|
|
513
|
|
69
|
|
—
|
|
582
|
|
|
Other accruals
|
55
|
|
298
|
|
102
|
|
—
|
|
455
|
|
|
Total Current Liabilities
|
55
|
|
8,543
|
|
3,806
|
|
(2,297
|
)
|
10,107
|
|
|
Long-term debt
|
6,972
|
|
50
|
|
3,047
|
|
—
|
|
10,069
|
|
|
Asset retirement obligations and accrued environmental costs
|
—
|
|
467
|
|
174
|
|
—
|
|
641
|
|
|
Deferred income taxes
|
—
|
|
3,349
|
|
1,661
|
|
(2
|
)
|
5,008
|
|
|
Employee benefit obligations
|
—
|
|
639
|
|
245
|
|
—
|
|
884
|
|
|
Other liabilities and deferred credits
|
8
|
|
4,700
|
|
3,814
|
|
(8,288
|
)
|
234
|
|
|
Total Liabilities
|
7,035
|
|
17,748
|
|
12,747
|
|
(10,587
|
)
|
26,943
|
|
|
Common stock
|
9,396
|
|
24,952
|
|
10,125
|
|
(35,077
|
)
|
9,396
|
|
|
Retained earnings
|
16,335
|
|
7,748
|
|
1,306
|
|
(9,083
|
)
|
16,306
|
|
|
Accumulated other comprehensive loss
|
(617
|
)
|
(617
|
)
|
(205
|
)
|
822
|
|
(617
|
)
|
|
Noncontrolling interests
|
—
|
|
—
|
|
2,343
|
|
—
|
|
2,343
|
|
|
Total Liabilities and Equity
|
$
|
32,149
|
|
49,831
|
|
26,316
|
|
(53,925
|
)
|
54,371
|
|
|
Millions of Dollars
|
||||||||||
|
At December 31, 2016
|
||||||||||
Balance Sheet
|
Phillips 66
|
|
Phillips 66 Company
|
|
All Other Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
|
|
Assets
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
—
|
|
854
|
|
1,857
|
|
—
|
|
2,711
|
|
Accounts and notes receivable
|
13
|
|
4,336
|
|
3,276
|
|
(1,228
|
)
|
6,397
|
|
|
Inventories
|
—
|
|
2,198
|
|
952
|
|
—
|
|
3,150
|
|
|
Prepaid expenses and other current assets
|
2
|
|
317
|
|
103
|
|
—
|
|
422
|
|
|
Total Current Assets
|
15
|
|
7,705
|
|
6,188
|
|
(1,228
|
)
|
12,680
|
|
|
Investments and long-term receivables
|
31,165
|
|
22,733
|
|
8,588
|
|
(48,952
|
)
|
13,534
|
|
|
Net properties, plants and equipment
|
—
|
|
13,044
|
|
7,811
|
|
—
|
|
20,855
|
|
|
Goodwill
|
—
|
|
2,853
|
|
417
|
|
—
|
|
3,270
|
|
|
Intangibles
|
—
|
|
719
|
|
169
|
|
—
|
|
888
|
|
|
Other assets
|
15
|
|
245
|
|
168
|
|
(2
|
)
|
426
|
|
|
Total Assets
|
$
|
31,195
|
|
47,299
|
|
23,341
|
|
(50,182
|
)
|
51,653
|
|
|
|
|
|
|
|
||||||
Liabilities and Equity
|
|
|
|
|
|
||||||
Accounts payable
|
$
|
—
|
|
5,626
|
|
2,663
|
|
(1,228
|
)
|
7,061
|
|
Short-term debt
|
500
|
|
30
|
|
20
|
|
—
|
|
550
|
|
|
Accrued income and other taxes
|
—
|
|
348
|
|
457
|
|
—
|
|
805
|
|
|
Employee benefit obligations
|
—
|
|
475
|
|
52
|
|
—
|
|
527
|
|
|
Other accruals
|
59
|
|
371
|
|
90
|
|
—
|
|
520
|
|
|
Total Current Liabilities
|
559
|
|
6,850
|
|
3,282
|
|
(1,228
|
)
|
9,463
|
|
|
Long-term debt
|
6,920
|
|
150
|
|
2,518
|
|
—
|
|
9,588
|
|
|
Asset retirement obligations and accrued environmental costs
|
—
|
|
501
|
|
154
|
|
—
|
|
655
|
|
|
Deferred income taxes
|
—
|
|
4,391
|
|
2,354
|
|
(2
|
)
|
6,743
|
|
|
Employee benefit obligations
|
—
|
|
948
|
|
268
|
|
—
|
|
1,216
|
|
|
Other liabilities and deferred credits
|
1,297
|
|
3,337
|
|
4,060
|
|
(8,431
|
)
|
263
|
|
|
Total Liabilities
|
8,776
|
|
16,177
|
|
12,636
|
|
(9,661
|
)
|
27,928
|
|
|
Common stock
|
10,777
|
|
25,403
|
|
10,117
|
|
(35,520
|
)
|
10,777
|
|
|
Retained earnings
|
12,637
|
|
6,714
|
|
(269
|
)
|
(6,474
|
)
|
12,608
|
|
|
Accumulated other comprehensive loss
|
(995
|
)
|
(995
|
)
|
(478
|
)
|
1,473
|
|
(995
|
)
|
|
Noncontrolling interests
|
—
|
|
—
|
|
1,335
|
|
—
|
|
1,335
|
|
|
Total Liabilities and Equity
|
$
|
31,195
|
|
47,299
|
|
23,341
|
|
(50,182
|
)
|
51,653
|
|
Selected Quarterly Financial Data
(Unaudited)
|
|
Millions of Dollars
|
|
Per Share of Common Stock
|
|||||||||||
|
Sales and Other Operating Revenues*
|
|
Income Before Income Taxes
|
|
Net Income
|
|
Net Income Attributable to Phillips 66
|
|
|
Net Income Attributable to Phillips 66
|
||||
|
|
Basic
|
|
Diluted
|
|
|||||||||
2017
|
|
|
|
|
|
|
|
|||||||
First
|
$
|
22,894
|
|
797
|
|
563
|
|
535
|
|
|
1.02
|
|
1.02
|
|
Second
|
24,087
|
|
848
|
|
581
|
|
550
|
|
|
1.06
|
|
1.06
|
|
|
Third
|
25,627
|
|
1,256
|
|
849
|
|
823
|
|
|
1.60
|
|
1.60
|
|
|
Fourth**
|
29,746
|
|
654
|
|
3,255
|
|
3,198
|
|
|
6.29
|
|
6.25
|
|
|
|
|
|
|
|
|
|
|
|||||||
2016
|
|
|
|
|
|
|
|
|||||||
First
|
$
|
17,409
|
|
596
|
|
398
|
|
385
|
|
|
0.72
|
|
0.72
|
|
Second
|
21,849
|
|
720
|
|
516
|
|
496
|
|
|
0.94
|
|
0.93
|
|
|
Third
|
21,624
|
|
813
|
|
536
|
|
511
|
|
|
0.97
|
|
0.96
|
|
|
Fourth
|
23,397
|
|
62
|
|
194
|
|
163
|
|
|
0.31
|
|
0.31
|
|
(a)
|
1.
|
Financial Statements and Supplementary Data
The financial statements and supplementary information listed in the Index to Financial Statements, which appears on page 70, are filed as part of this Annual Report on Form 10-K.
|
|
|
|
|
2.
|
Financial Statement Schedules
All financial statement schedules are omitted because they are not required, not significant, not applicable, or the information is shown in the financial statements or notes thereto.
|
|
|
|
|
3.
|
Exhibits
The exhibits listed in the Index to Exhibits, which appears on pages 138 to 141, are filed as part of this Annual Report on Form 10-K.
|
|
|
|
(c)
|
|
Pursuant to Rule 3-09 of Regulation S-X, the financial statements of Chevron Phillips Chemical Company LLC as of December 31, 2017 and 2016, and for each of the three years ended December 31, 2017, are included as an exhibit to this Annual Report on Form 10-K.
|
|
|
|
Incorporated by Reference
|
||||
Exhibit
Number
|
|
Exhibit Description
|
Form
|
Exhibit
Number
|
|
Filing
Date
|
SEC
File No.
|
|
|
|
|
|
|
|
|
|
8-K
|
2.1
|
|
05/01/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
8-K
|
3.1
|
|
05/01/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
8-K
|
3.1
|
|
02/09/2017
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10
|
4.3
|
|
04/05/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
|
As permitted by Item 601(b)(4)(iii)(A) of Regulation S-K, the company has not filed with this Annual Report on Form 10-K certain instruments defining the rights of holders of long-term debt of the company and its subsidiaries because the total amount of securities authorized thereunder does not exceed 10 percent of the total assets of the company and its subsidiaries on a consolidated basis. The company agrees to furnish a copy of such agreements to the Commission upon request.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
|
4.1
|
|
03/01/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10-Q
|
10.1
|
|
05/01/2014
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10-K
|
10.3
|
|
02/20/2015
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10-K
|
10.4
|
|
02/17/2017
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10-Q
|
10.14
|
|
08/03/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
10.6
*
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
10
|
10.12
|
|
03/01/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit
Number |
|
Exhibit Description
|
Form
|
Exhibit
Number |
|
Filing
Date |
SEC
File No. |
|
|
|
|
|
|
|
|
|
10
|
10.13
|
|
03/01/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10
|
10.14
|
|
03/01/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10
|
10.15
|
|
03/01/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10
|
10.16
|
|
03/01/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10-Q
|
10.1
|
|
10/30/2014
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
8-K
|
10.1
|
|
05/01/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
8-K
|
10.2
|
|
05/01/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
8-K
|
10.3
|
|
05/01/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
8-K
|
10.4
|
|
05/01/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10-Q
|
10.1
|
|
05/02/2013
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
8-K
|
10.5
|
|
05/01/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
DEF14A
|
App. A
|
|
03/27/2013
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10-Q
|
10.15
|
|
08/03/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit
Number |
|
Exhibit Description
|
Form
|
Exhibit
Number |
|
Filing
Date |
SEC
File No. |
|
|
|
|
|
|
|
|
|
10-K
|
10.18
|
|
02/22/2013
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10-Q
|
10.1
|
|
07/29/2016
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10-Q
|
10.17
|
|
08/03/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10-Q
|
10.18
|
|
08/03/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10-Q
|
10.19
|
|
08/03/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10-K
|
10.24
|
|
02/22/2013
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10-Q
|
10.20
|
|
08/03/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10-K
|
10.26
|
|
02/22/2013
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10-K
|
10.27
|
|
02/22/2013
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
8-K
|
10.1
|
|
11/08/2013
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10-Q
|
10.23
|
|
08/03/2012
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10-K
|
10.29
|
|
02/22/2013
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10-K
|
10.30
|
|
02/22/2013
|
001-35349
|
||
|
|
|
|
|
|
|
|
|
10-K
|
10.31
|
|
02/22/2013
|
001-35349
|
||
|
|
|
|
|
|
|
|
12
*
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
21
*
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
23.1
*
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
23.2
*
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
31.1
*
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
31.2
*
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
32
*
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
||||
Exhibit
Number |
|
Exhibit Description
|
Form
|
Exhibit
Number |
|
Filing
Date |
SEC
File No. |
|
|
|
|
|
|
|
|
99.1
*
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH*
|
|
XBRL Schema Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.CAL*
|
|
XBRL Calculation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB*
|
|
XBRL Labels Linkbase Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE*
|
|
XBRL Presentation Linkbase Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF*
|
|
XBRL Definition Linkbase Document.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PHILLIPS 66
|
|
|
|
|
|
|
|
|
|
Date:
|
February 23, 2018
|
/s/ Greg C. Garland
|
|
|
Greg C. Garland
Chairman of the Board of Directors
and Chief Executive Officer
|
Signature
|
|
Title
|
|
|
|
|
|
|
|
|
|
/s/ Greg C. Garland
|
|
Chairman of the Board of Directors
|
Greg C. Garland
|
|
and Chief Executive Officer
|
|
|
(Principal executive officer)
|
|
|
|
|
|
|
/s/ Kevin J. Mitchell
|
|
Executive Vice President, Finance
|
Kevin J. Mitchell
|
|
and Chief Financial Officer
|
|
|
(Principal financial officer)
|
|
|
|
|
|
|
/s/ Chukwuemeka A. Oyolu
|
|
Vice President and Controller
|
Chukwuemeka A. Oyolu
|
|
(Principal accounting officer)
|
|
|
|
|
|
|
|
|
|
/s/ Gary K. Adams
|
|
Director
|
Gary K. Adams
|
|
|
|
|
|
|
|
|
/s/ J. Brian Ferguson
|
|
Director
|
J. Brian Ferguson
|
|
|
|
|
|
|
|
|
/s/ William R. Loomis Jr.
|
|
Director
|
William R. Loomis Jr.
|
|
|
|
|
|
|
|
|
/s/ John E. Lowe
|
|
Director
|
John E. Lowe
|
|
|
|
|
|
|
|
|
/s/ Harold W. McGraw III
|
|
Director
|
Harold W. McGraw III
|
|
|
|
|
|
|
|
|
/s/ Denise L. Ramos
|
|
Director
|
Denise L. Ramos
|
|
|
|
|
|
|
|
|
/s/ Glenn F. Tilton
|
|
Director
|
Glenn F. Tilton
|
|
|
|
|
|
|
|
|
/s/ Victoria J. Tschinkel
|
|
Director
|
Victoria J. Tschinkel
|
|
|
|
|
|
|
|
|
/s/ Marna C. Whittington
|
|
Director
|
Marna C. Whittington
|
|
|
NAME OF MEMBER
|
|
CLASS OF MEMBERSHIP INTEREST
|
|
PERCENTAGE INTEREST
|
||
|
|
|
|
|
||
Chevron U.S.A. Inc.
|
|
|
|
|
||
6001 Bollinger Canyon Road
|
|
|
|
|
||
San Ramon, CA 94583-2324
|
|
C
|
|
50%
|
||
|
|
|
|
|
||
Phillips 66 Company
|
|
|
|
|
||
2331 CityWest Blvd.
|
|
|
|
|
||
Houston, TX 77042
|
|
P
|
|
47.94%
|
||
|
|
|
|
|
||
WesTTex 66 Pipeline Company
|
|
|
|
|
||
2331 CityWest Blvd.
|
|
|
|
|
||
Houston, TX 77042
|
|
P
|
|
2.06%
|
||
|
|
|
|
|
||
|
|
|
|
|
||
|
|
|
|
|
||
TOTAL ALL MEMBERS
|
|
|
|
100%
|
NAME OF MEMBERS
|
|
REIMBURSABLE CAPITAL EXPENDITURE
|
Chevron U.S.A. Inc.
|
|
$310 Million
|
Phillips 66 Company
|
|
$248.2 Million
|
WesTTex 66 Pipeline Company
|
|
$5 Million
|
|
Millions of Dollars
|
||||||||||||||
|
Year Ended December 31
|
||||||||||||||
|
2017
|
|
|
2016
|
|
|
2015
|
|
|
2014
|
|
|
2013
|
|
|
Earnings Available for Fixed Charges
|
|
|
|
|
|
|
|
|
|
||||||
Income from continuing operations before income taxes and noncontrolling interests that have not incurred fixed charges
|
$
|
3,555
|
|
|
2,181
|
|
|
6,035
|
|
|
5,711
|
|
|
5,509
|
|
Distributions less than equity in earnings of affiliates
|
(516
|
)
|
|
(815
|
)
|
|
185
|
|
|
197
|
|
|
(354
|
)
|
|
Preference security dividend requirement of consolidated subsidiary
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Fixed charges, excluding capitalized interest*
|
601
|
|
|
488
|
|
|
456
|
|
|
397
|
|
|
365
|
|
|
|
$
|
3,631
|
|
|
1,854
|
|
|
6,676
|
|
|
6,305
|
|
|
5,520
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Fixed Charges
|
|
|
|
|
|
|
|
|
|
||||||
Interest and expense on indebtedness, excluding capitalized interest
|
$
|
438
|
|
|
338
|
|
|
310
|
|
|
267
|
|
|
275
|
|
Capitalized interest
|
15
|
|
|
81
|
|
|
106
|
|
|
20
|
|
|
—
|
|
|
Interest portion of rental expense
|
141
|
|
|
140
|
|
|
140
|
|
|
125
|
|
|
83
|
|
|
Preference security dividend requirement of consolidated subsidiary
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
$
|
603
|
|
|
559
|
|
|
556
|
|
|
412
|
|
|
358
|
|
Ratio of Earnings to Fixed Charges
|
6.0
|
|
|
3.3
|
|
|
12.0
|
|
|
15.3
|
|
|
15.4
|
|
Company Name
|
Incorporation
Location
|
66 Pipeline LLC
|
Delaware
|
Albuquerque Retail and Convenience LLC
|
Delaware
|
Asamera Oil (US) Inc.
|
Montana
|
BVLC, Inc.
|
California
|
C.S. Land, Inc.
|
California
|
Calcasieu Properties, L.L.C.
|
Delaware
|
Clearwater Ltd.
|
Bermuda
|
Danube Limited
|
Bermuda
|
Denver Retail and Convenience LLC (US)
|
Delaware
|
Douglas Oil Company of California
|
California
|
Douglas Stations, Inc.
|
Delaware
|
Four Star Beverage Company, Inc.
|
Texas
|
Four Star Holding Company, Inc.
|
Texas
|
Interkraft Handel GmbH
|
Germany
|
JET Energy Trading GmbH
|
Germany
|
JET Petrol Limited
|
England
|
JET Petroleum Limited
|
Northern Ireland
|
JET Tankstellen Austria GmbH
|
Austria
|
JET Tankstellen Deutschland GmbH (CPGG)
|
Germany
|
JET Tankstellen-Betriebs GmbH
|
Germany
|
Kansas City Retail and Convenience LLC
|
Delaware
|
Kayo Oil Company
|
Delaware
|
Linden Urban Renewal Limited Partnership
|
New Jersey
|
Merey Sweeny, L.P.
|
Delaware
|
OK CNG 5, LLC
|
Oklahoma
|
P66REX LLC
|
Delaware
|
Phillips 66 Alliance Dock LLC
|
Delaware
|
Phillips 66 Americas Holdings LLC
|
Delaware
|
Phillips 66 Americas LLC
|
Panama
|
Phillips 66 Asia Ltd
|
Bermuda
|
Phillips 66 Asia Pacific Investments Ltd.
|
Bermuda
|
Phillips 66 Aviation LLC
|
Delaware
|
Phillips 66 Brazoria Terminal LLC
|
Delaware
|
Phillips 66 Canada Ltd.
|
Alberta
|
Phillips 66 Carrier LLC
|
Delaware
|
Phillips 66 Central Europe Inc.
|
Delaware
|
Phillips 66 Communications Inc.
|
Delaware
|
Phillips 66 Company
|
Delaware
|
Phillips 66 Continental Holding GmbH
|
Germany
|
Phillips 66 Crude Condensate Pipeline A LLC
|
Delaware
|
Phillips 66 Crude Condensate Pipeline B LLC
|
Delaware
|
Phillips 66 Crude Condensate Pipeline LLC
|
Delaware
|
Phillips 66 CS Limited
|
England
|
Phillips 66 DAPL Holdings LLC
|
Delaware
|
Phillips 66 Development Holdings Ltd.
|
Cayman
|
Phillips 66 Developments LLC
|
Delaware
|
Phillips 66 Energy Technologies LLC
|
Delaware
|
Phillips 66 ETCO Holdings LLC
|
Delaware
|
Phillips 66 European Power Limited
|
England
|
Phillips 66 Export Terminal Alpha LLC
|
Delaware
|
Phillips 66 Export Terminal Bravo LLC
|
Delaware
|
Phillips 66 Export Terminal Charlie LLC
|
Delaware
|
Phillips 66 Export Terminal Delta LLC
|
Delaware
|
Phillips 66 Export Terminal LLC
|
Delaware
|
Phillips 66 Finance LLC
|
Delaware
|
Phillips 66 Funding Ltd.
|
Cayman
|
Phillips 66 GmbH
|
Switzerland
|
Phillips 66 Gulf Coast Pipeline LLC
|
Delaware
|
Phillips 66 Gulf Coast Properties Alpha LLC
|
Delaware
|
Phillips 66 Gulf Coast Properties Bravo LLC
|
Delaware
|
Phillips 66 Gulf Coast Properties LLC
|
Delaware
|
Phillips 66 Holdings Ltd.
|
Cayman
|
Phillips 66 International Inc.
|
Delaware
|
Phillips 66 International Investments Ltd.
|
Cayman
|
Phillips 66 International Trading Pte. Ltd.
|
Singapore
|
Phillips 66 Ireland Pension Trust Limited
|
Ireland
|
Phillips 66 LAR Waterborne Crude LLC
|
Delaware
|
Phillips 66 Limited
|
England
|
Phillips 66 Marine International Ltd.
|
Cayman
|
Phillips 66 Partners Finance Corporation
|
Delaware
|
Phillips 66 Partners GP LLC
|
Delaware
|
Phillips 66 Partners Holdings LLC
|
Delaware
|
Phillips 66 Partners LP
|
Delaware
|
Phillips 66 Payment Systems LLC
|
Delaware
|
Phillips 66 Pension Plan Trustee Limited
|
England
|
Phillips 66 Pipeline LLC
|
Delaware
|
Phillips 66 Polypropylene Canada Inc.
|
Delaware
|
Phillips 66 Power Holdings Ltd.
|
Cayman
|
Phillips 66 Project Development Inc.
|
Delaware
|
Phillips 66 Resources Ltd.
|
Cayman
|
Phillips 66 Sand Hills LLC
|
Delaware
|
Phillips 66 Services (Malaysia) Sdn. Bhd.
|
Malaysia
|
Phillips 66 Southern Hills LLC
|
Delaware
|
Phillips 66 Spectrum Corporation
|
Delaware
|
Phillips 66 Stillwater Retail Corporation
|
Delaware
|
Phillips 66 Sweeny Cogen GP, LLC
|
Delaware
|
Phillips 66 Sweeny Cogen LP, LLC
|
Delaware
|
Phillips 66 Sweeny Crude Export LLC
|
Delaware
|
Phillips 66 Sweeny Frac LLC
|
Delaware
|
Phillips 66 Sweeny-Freeport 2 Pipeline Holdings LLC
|
Delaware
|
Phillips 66 Sweeny-Freeport 2 Pipeline LLC
|
Delaware
|
Phillips 66 Sweeny-Freeport A LLC
|
Delaware
|
Phillips 66 Sweeny-Freeport B LLC
|
Delaware
|
Phillips 66 Sweeny-Freeport LLC
|
Delaware
|
Phillips 66 Trading Limited
|
England
|
Phillips 66 Treasury Limited
|
England
|
Phillips 66 TS Limited
|
England
|
Phillips 66 UK Development Limited
|
England
|
Phillips 66 UK Funding Limited
|
England
|
Phillips 66 UK Holdings Limited
|
England
|
Phillips 66 WRB Partner LLC
|
Delaware
|
Phillips Chemical Holdings LLC
|
Delaware
|
Phillips Gas Company
|
Delaware
|
Phillips Gas Company Shareholder, Inc.
|
Delaware
|
Phillips Gas Pipeline Company
|
Delaware
|
Phillips Texas Pipeline Company, Ltd.
|
Texas
|
Phillips Utility Gas Corporation
|
Delaware
|
Pioneer Investments Corp.
|
Delaware
|
Pioneer Pipe Line Company
|
Delaware
|
R.A.Z. Properties, Inc.
|
California
|
Radius Insurance Company
|
Cayman
|
Salt Lake City Retail and Convenience LLC
|
Delaware
|
Salt Lake Terminal Company
|
Delaware
|
Seagas Pipeline Company
|
Delaware
|
Sentinel Transportation, LLC
|
Delaware
|
SHC Insurance Company
|
Texas
|
Spirit Insurance Company
|
Vermont
|
Sweeny Cogeneration Limited Partnership
|
Delaware
|
Sweeny Coker, L.L.C.
|
Delaware
|
WesTTex 66 Pipeline Company
|
Delaware
|
(1)
|
Registration Statement (Form S-8 No. 333-181080), as amended, pertaining to the Phillips 66 Savings Plan,
|
(2)
|
Registration Statement (Form S-8 No. 333-188564) pertaining to the 2013 Omnibus Stock and Performance Incentive Plan of Phillips 66, the Phillips 66 U.K. Share Incentive Plan, and the Phillips 66 Ireland Share Participation Plan,
|
(3)
|
Registration Statement (Form S-3 No. 333-181079) of Phillips 66, and
|
(4)
|
Registration Statement (Form S-3 No. 333-207923) of Phillips 66 and Phillips 66 Company;
|
|
|
|
|
|
|
/s/ Ernst & Young LLP
|
|
(1)
|
Registration Statement (Form S-8 No. 333-181080), as amended, pertaining to the Phillips 66 Savings Plan,
|
(2)
|
Registration Statement (Form S-8 No. 333-188564) pertaining to the 2013 Omnibus Stock and Performance Incentive Plan of Phillips 66, the Phillips 66 U.K. Share Incentive Plan, and the Phillips 66 Ireland Share Participation Plan,
|
(3)
|
Registration Statement (Form S-3 No. 333-181079) of Phillips 66, and
|
(4)
|
Registration Statement (Form S-3 No. 333-207923) of Phillips 66 and Phillips 66 Company;
|
|
|
|
|
|
|
/s/ Ernst & Young LLP
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of Phillips 66;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Greg C. Garland
|
|
Greg C. Garland
|
|
Chairman and Chief Executive Officer
|
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of Phillips 66;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Kevin J. Mitchell
|
|
Kevin J. Mitchell
|
|
Executive Vice President, Finance and
Chief Financial Officer
|
|
|
(1)
|
The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Greg C. Garland
|
|
Greg C. Garland
|
|
Chairman and
Chief Executive Officer
|
|
|
|
/s/ Kevin J. Mitchell
|
|
Kevin J. Mitchell
|
|
Executive Vice President, Finance and
Chief Financial Officer
|
Chevron Phillips Chemical Company LLC
|
|
Years ended December 31
|
||||||
Millions of Dollars
|
2017
|
|
2016
|
|
2015
|
|
|
Revenues and Other Income
|
|
|
|
||||
Sales and other operating revenues
|
$
|
9,063
|
|
8,455
|
|
9,248
|
|
Equity in income of affiliates
|
510
|
|
307
|
|
539
|
|
|
Other income
|
49
|
|
7
|
|
72
|
|
|
Total Revenues and Other Income
|
9,622
|
|
8,769
|
|
9,859
|
|
|
Costs and Expenses
|
|
|
|
||||
Cost of goods sold
|
7,321
|
|
6,292
|
|
6,383
|
|
|
Selling, general and administrative
|
746
|
|
670
|
|
698
|
|
|
Research and development
|
59
|
|
55
|
|
55
|
|
|
Total Costs and Expenses
|
8,126
|
|
7,017
|
|
7,136
|
|
|
Income Before Interest and Taxes
|
1,496
|
|
1,752
|
|
2,723
|
|
|
Interest income
|
8
|
|
1
|
|
2
|
|
|
Interest expense
|
—
|
|
—
|
|
—
|
|
|
Income Before Taxes
|
1,504
|
|
1,753
|
|
2,725
|
|
|
Income tax expense
|
58
|
|
66
|
|
74
|
|
|
Net Income
|
1,446
|
|
1,687
|
|
2,651
|
|
|
|
|
|
|
||||
Other Comprehensive Income (Loss)
|
|
|
|
||||
Foreign currency translation gain (loss)
|
53
|
|
(15
|
)
|
(45
|
)
|
|
Pension and other postretirement benefits
|
22
|
|
(26
|
)
|
22
|
|
|
Pension and other postretirement benefits – equity affiliate
|
1
|
|
1
|
|
—
|
|
|
Total Other Comprehensive Income (Loss)
|
76
|
|
(40
|
)
|
(23
|
)
|
|
Comprehensive Income
|
$
|
1,522
|
|
1,647
|
|
2,628
|
|
Chevron Phillips Chemical Company LLC
|
|
At December 31
|
||||
Millions of Dollars
|
2017
|
|
2016
|
|
|
ASSETS
|
|
|
|||
Cash and cash equivalents
|
$
|
676
|
|
587
|
|
Accounts receivable – trade (net of allowance of $11 million in 2017 and $10 million in 2016)
|
940
|
|
952
|
|
|
Accounts receivable – affiliates
|
183
|
|
132
|
|
|
Inventories
|
1,104
|
|
989
|
|
|
Prepaid expenses and other current assets
|
41
|
|
35
|
|
|
Total Current Assets
|
2,944
|
|
2,695
|
|
|
Property, plant and equipment
|
16,454
|
|
15,031
|
|
|
Less accumulated depreciation
|
5,831
|
|
5,485
|
|
|
Net property, plant and equipment
|
10,623
|
|
9,546
|
|
|
Investments in and advances to affiliates
|
3,117
|
|
3,142
|
|
|
Other assets and deferred charges
|
83
|
|
82
|
|
|
Total Assets
|
$
|
16,767
|
|
15,465
|
|
LIABILITIES AND MEMBERS’ EQUITY
|
|
|
|||
Accounts payable – trade
|
$
|
934
|
|
894
|
|
Accounts payable – affiliates
|
188
|
|
165
|
|
|
Accrued income and other taxes
|
96
|
|
78
|
|
|
Accrued salaries, wages and benefits
|
174
|
|
161
|
|
|
Short-term debt – affiliates
|
2
|
|
13
|
|
|
Accrued distributions to members
|
4
|
|
57
|
|
|
Other current liabilities and deferred credits
|
41
|
|
50
|
|
|
Total Current Liabilities
|
1,439
|
|
1,418
|
|
|
Long-term debt
|
2,390
|
|
2,087
|
|
|
Employee benefit obligations
|
408
|
|
367
|
|
|
Other liabilities and deferred credits
|
134
|
|
115
|
|
|
Total Liabilities
|
4,371
|
|
3,987
|
|
|
Members’ capital
|
12,721
|
|
11,879
|
|
|
Accumulated other comprehensive loss
|
(325
|
)
|
(401
|
)
|
|
Total Members’ Equity
|
12,396
|
|
11,478
|
|
|
Total Liabilities and Members’ Equity
|
$
|
16,767
|
|
15,465
|
|
Chevron Phillips Chemical Company LLC
|
|
|
Accumulated
|
|
|
|||
|
|
Other
|
|
Total
|
|
||
|
Members’
|
|
Comprehensive
|
|
Members’
|
|
|
Millions of Dollars
|
Capital
|
|
(Loss) Income
|
|
Equity
|
|
|
December 31, 2014
|
$
|
10,598
|
|
(338
|
)
|
10,260
|
|
Net income
|
2,651
|
|
—
|
|
2,651
|
|
|
Other comprehensive loss
|
—
|
|
(23
|
)
|
(23
|
)
|
|
Distributions to members
|
(2,623
|
)
|
—
|
|
(2,623
|
)
|
|
December 31, 2015
|
10,626
|
|
(361
|
)
|
10,265
|
|
|
Net income
|
1,687
|
|
—
|
|
1,687
|
|
|
Other comprehensive loss
|
—
|
|
(40
|
)
|
(40
|
)
|
|
Distributions to members
|
(434
|
)
|
—
|
|
(434
|
)
|
|
December 31, 2016
|
11,879
|
|
(401
|
)
|
11,478
|
|
|
Net income
|
1,446
|
|
—
|
|
1,446
|
|
|
Other comprehensive income
|
—
|
|
76
|
|
76
|
|
|
Distributions to members
|
(604
|
)
|
—
|
|
(604
|
)
|
|
December 31, 2017
|
$
|
12,721
|
|
(325
|
)
|
12,396
|
|
Chevron Phillips Chemical Company LLC
|
|
Years ended December 31
|
||||||
Millions of Dollars
|
2017
|
|
2016
|
|
2015
|
|
|
Operating Activities
|
|
|
|
||||
Net income
|
$
|
1,446
|
|
1,687
|
|
2,651
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
||||
Depreciation, amortization and retirements
|
351
|
|
316
|
|
306
|
|
|
Distributions less than income from equity affiliates
|
(81
|
)
|
(13
|
)
|
(170
|
)
|
|
(Gain) loss on sale of assets
|
(41
|
)
|
1
|
|
(3
|
)
|
|
Asset impairments
|
133
|
|
177
|
|
55
|
|
|
Net (increase) decrease in operating working capital
|
(27
|
)
|
(81
|
)
|
148
|
|
|
Benefit plan contributions
|
(6
|
)
|
(160
|
)
|
(8
|
)
|
|
Employee benefit obligations
|
70
|
|
71
|
|
72
|
|
|
Other
|
20
|
|
4
|
|
41
|
|
|
Net Cash Provided by Operating Activities
|
1,865
|
|
2,002
|
|
3,092
|
|
|
Investing Activities
|
|
|
|
||||
Capital expenditures
|
(1,551
|
)
|
(1,973
|
)
|
(2,626
|
)
|
|
Repayments from affiliates
|
59
|
|
63
|
|
18
|
|
|
Advances to affiliates
|
(11
|
)
|
(53
|
)
|
(75
|
)
|
|
Proceeds from sale of assets
|
95
|
|
5
|
|
4
|
|
|
Other
|
—
|
|
(1
|
)
|
(11
|
)
|
|
Net Cash Used in Investing Activities
|
(1,408
|
)
|
(1,959
|
)
|
(2,690
|
)
|
|
Financing Activities
|
|
|
|
||||
Net proceeds from issuance of debt
|
300
|
|
694
|
|
1,393
|
|
|
Distributions to members
|
(657
|
)
|
(496
|
)
|
(2,555
|
)
|
|
Other
|
(11
|
)
|
(4
|
)
|
4
|
|
|
Net Cash (Used in) Provided by Financing Activities
|
(368
|
)
|
194
|
|
(1,158
|
)
|
|
Net Increase (Decrease) in Cash and Cash Equivalents
|
89
|
|
237
|
|
(756
|
)
|
|
Cash and Cash Equivalents at Beginning of Period
|
587
|
|
350
|
|
1,106
|
|
|
Cash and Cash Equivalents at End of Period
|
$
|
676
|
|
587
|
|
350
|
|
|
|
|
|
||||
Supplemental Disclosures of Cash Flow Information
|
|
|
|
||||
(Increase) decrease in accounts receivable, net – trade and affiliates
|
$
|
(64
|
)
|
(149
|
)
|
348
|
|
(Increase) decrease in inventories
|
(124
|
)
|
(45
|
)
|
15
|
|
|
(Increase) decrease in prepaid expenses and other current assets
|
(8
|
)
|
(2
|
)
|
35
|
|
|
Increase (decrease) in accounts payable – trade and affiliates
|
135
|
|
131
|
|
(222
|
)
|
|
Increase (decrease) in accrued income and other taxes
|
17
|
|
(18
|
)
|
4
|
|
|
Increase (decrease) in other current liabilities and deferred credits
|
17
|
|
2
|
|
(32
|
)
|
|
Net (Increase) decrease in operating working capital
|
$
|
(27
|
)
|
(81
|
)
|
148
|
|
Cash paid for interest
|
$
|
—
|
|
—
|
|
—
|
|
Cash paid for income taxes
|
52
|
|
64
|
|
71
|
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Index
|
|
Page
|
|
|
|
1.
|
General Information
|
7
|
2.
|
Summary of Significant Accounting Policies
|
8
|
3.
|
New Accounting Standards
|
11
|
4.
|
Hurricane Harvey
|
11
|
5.
|
Sale of K-Resin® Business
|
12
|
6.
|
Port Arthur Fire
|
12
|
7.
|
Accumulated Other Comprehensive Loss
|
13
|
8.
|
Transactions with Affiliates
|
14
|
9.
|
Inventories
|
15
|
10.
|
Investments in and Advances to Affiliates
|
15
|
11.
|
Property, Plant and Equipment
|
19
|
12.
|
Asset Retirement Obligations and Accrued Environmental Liabilities
|
20
|
13.
|
Debt
|
21
|
14.
|
Guarantees, Commitments and Indemnifications
|
22
|
15.
|
Contingent Liabilities
|
24
|
16.
|
Credit Risk
|
25
|
17.
|
Operating Leases
|
26
|
18.
|
Fair Value Measurements
|
26
|
19.
|
Employee Benefit Plans
|
28
|
20.
|
Income Taxes and Distributions
|
33
|
21.
|
Financial Information of Chevron Phillips Chemical Company LP
|
36
|
22.
|
Other Financial Information
|
39
|
23.
|
Subsequent Events
|
39
|
|
|
1
Unless otherwise indicated, the “Company” and “CPChem” are used in this report to refer to the business of Chevron Phillips Chemical Company LLC and its consolidated subsidiaries.
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
|
|
Foreign
|
|
|
|||
|
|
Currency
|
|
|
|||
|
Defined
|
|
Translation
|
|
|
||
Millions of Dollars
|
Benefit Plans
|
|
Adjustments
|
|
Total
|
|
|
At December 31, 2016
|
$
|
(387
|
)
|
(14
|
)
|
(401
|
)
|
Other comprehensive income before reclassifications
|
—
|
|
53
|
|
53
|
|
|
Amounts reclassified from accumulated other comprehensive loss
|
23
|
|
—
|
|
23
|
|
|
Net current-period other comprehensive income
|
23
|
|
53
|
|
76
|
|
|
At December 31, 2017
|
$
|
(364
|
)
|
39
|
|
(325
|
)
|
|
|
Foreign
|
|
|
|||
|
|
Currency
|
|
|
|||
|
Defined
|
|
Translation
|
|
|
|
|
Millions of Dollars
|
Benefit Plans
|
|
Adjustments
|
|
Total
|
|
|
At December 31, 2015
|
$
|
(362
|
)
|
1
|
|
(361
|
)
|
Other comprehensive loss before reclassifications
|
(52
|
)
|
(15
|
)
|
(67
|
)
|
|
Amounts reclassified from accumulated other comprehensive loss
|
27
|
|
—
|
|
27
|
|
|
Net current-period other comprehensive (loss)
|
(25
|
)
|
(15
|
)
|
(40
|
)
|
|
At December 31, 2016
|
$
|
(387
|
)
|
(14
|
)
|
(401
|
)
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Millions of Dollars
|
2017
|
|
2016
|
|
2015
|
|
|
Sales and other operating revenues (a)
|
$
|
1,225
|
|
976
|
|
1,127
|
|
Purchases (b,c,d)
|
2,371
|
|
2,023
|
|
2,177
|
|
|
Selling, general and administrative (c,d)
|
24
|
|
(2
|
)
|
(31
|
)
|
a.
|
CPChem sold ethylene residue gas, natural gas liquids and PAO to Phillips 66; specialty chemicals, alpha olefin products, and aromatics and styrenics by-products to Chevron; and feedstocks to equity affiliates, all at prices that approximated market. CPChem received royalties on licensed technology and marketing fees on product sales from certain equity affiliates.
|
b.
|
CPChem purchased various feedstocks and finished products from Chevron, Phillips 66, and certain equity affiliates at prices that approximated market. In addition, Chevron and Phillips 66 provided CPChem with certain common facility and manufacturing services at certain facilities. Purchases were included in Cost of goods sold in the Consolidated Statement of Comprehensive Income.
|
c.
|
Chevron and Phillips 66 provided various services to CPChem under service agreements, including engineering consultation, research and development, laboratory services, procurement services and pipeline operating services.
|
d.
|
Purchase amounts were reduced for billings to certain equity affiliates and Phillips 66 primarily for non-core services provided at cost, totaling $17 million in 2017, $15 million in 2016, and $17 million in 2015, that were credited to expense. Purchase amounts were also reduced for marketing fees paid to CPChem by certain equity affiliates under sales and marketing agreements with those entities, totaling $23 million in 2017, $20 million in 2016, and $16 million in 2015. Selling, general and administrative amounts also included credits for non-core services provided at cost to certain equity affiliates totaling $46 million in 2017, $68 million in 2016, and $95 million in 2015.
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Millions of Dollars
|
2017
|
|
2016
|
|
|
LIFO product inventories
|
$
|
787
|
|
698
|
|
Non-LIFO product inventories
|
148
|
|
165
|
|
|
Materials, supplies and other
|
169
|
|
126
|
|
|
Total inventories
|
$
|
1,104
|
|
989
|
|
Affiliate
|
Ownership
Interest
|
|
Americas Styrenics LLC
|
50
|
%
|
Chevron Phillips Singapore Chemicals (Private) Limited
|
50
|
|
Gulf Polymers Distribution Company FZCo
|
35
|
|
Jubail Chevron Phillips Company
|
50
|
|
Qatar Chemical Company Ltd. (Q-Chem)
|
49
|
|
Qatar Chemical Company II Ltd. (Q-Chem II)
|
49
|
|
Saudi Chevron Phillips Company
|
50
|
|
Saudi Polymers Company
|
35
|
|
Shanghai Golden Phillips Petrochemical Company Limited
|
40
|
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Millions of Dollars
|
2017
|
|
2016
|
|
|
Americas Styrenics LLC
|
$
|
38
|
|
43
|
|
Jubail Chevron Phillips Company
|
12
|
|
13
|
|
|
Petrochemical Conversion Company
|
—
|
|
(340
|
)
|
|
Qatar Chemical Company II Ltd. (Q-Chem II)
|
20
|
|
21
|
|
|
Shanghai Golden Phillips Petrochemical Company Limited
|
(18
|
)
|
(18
|
)
|
|
Saudi Polymers Company
|
95
|
|
100
|
|
|
All others in the aggregate
|
2
|
|
3
|
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Millions of Dollars
|
Middle East
|
|
All Others
in the Aggregate
|
||||||||||||
Years ended December 31
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
||
Revenues
|
$
|
7,638
|
|
6,550
|
|
7,248
|
|
|
2,420
|
|
2,176
|
|
2,419
|
|
|
Income before income taxes
|
1,336
|
|
1,034
|
|
1,322
|
|
|
242
|
|
296
|
|
318
|
|
||
Net income
|
1,141
|
|
833
|
|
1,094
|
|
|
229
|
|
293
|
|
306
|
|
||
|
|
|
|
|
|
|
|
||||||||
Millions of Dollars
|
|
Middle East
|
|
All Others
in the Aggregate
|
|
||||||||||
At December 31
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
||||
Current assets
|
|
$
|
3,444
|
|
3,165
|
|
|
562
|
|
556
|
|
|
|||
Noncurrent assets
|
|
7,500
|
|
8,731
|
|
|
320
|
|
367
|
|
|
||||
Current liabilities
|
|
1,559
|
|
1,593
|
|
|
239
|
|
207
|
|
|
||||
Noncurrent liabilities
|
|
3,629
|
|
4,646
|
|
|
19
|
|
30
|
|
|
Millions of Dollars
|
2017
|
|
2016
|
|
2015
|
|
|
Capital expenditures
|
$
|
1,551
|
|
1,973
|
|
2,626
|
|
Decrease in accrued expenditures
|
(74
|
)
|
(20
|
)
|
(21
|
)
|
|
Total capital additions
|
$
|
1,477
|
|
1,953
|
|
2,605
|
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Millions of Dollars
|
2017
|
|
2016
|
|
|
Asset retirement obligations
|
$
|
16
|
|
17
|
|
Accrued environmental liabilities
|
20
|
|
20
|
|
|
Total asset retirement obligations and accrued environmental liabilities
|
36
|
|
37
|
|
|
Less portion classified as short-term
|
3
|
|
3
|
|
|
Long-term asset retirement obligations and accrued environmental liabilities
|
$
|
33
|
|
34
|
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Millions of Dollars
|
2017
|
|
2016
|
|
|
1.7% senior unsecured notes due 2018
|
$
|
750
|
|
750
|
|
Term loan due 2019
|
300
|
|
—
|
|
|
2.45% senior unsecured notes due 2020
|
400
|
|
400
|
|
|
Floating rate senior unsecured notes due 2020
|
250
|
|
250
|
|
|
3.4% senior unsecured notes due 2026
|
700
|
|
700
|
|
|
Other
|
2
|
|
13
|
|
|
Total debt
|
2,402
|
|
2,113
|
|
|
Less unamortized discounts and debt issuance costs
|
10
|
|
13
|
|
|
Less short-term debt
|
2
|
|
13
|
|
|
Total long-term debt
|
$
|
2,390
|
|
2,087
|
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Millions of Dollars
|
At December 31
|
|
|
2018
|
$
|
60
|
|
2019
|
44
|
|
|
2020
|
73
|
|
|
2021
|
31
|
|
|
2022
|
133
|
|
|
2023 and after
|
42
|
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
|
Fair Value of Liabilities
|
||||||
Millions of Dollars
|
Level 1
|
|
Level 2
|
|
Total
|
|
|
2017
|
$
|
63
|
|
25
|
|
88
|
|
2016
|
50
|
|
29
|
|
79
|
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
|
Pension Benefits
|
|
Other Benefits
|
|||||||
Millions of Dollars
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
Change in Benefit Obligation
|
|
|
|
|
|
|||||
Benefit obligation at January 1
|
$
|
1,212
|
|
1,133
|
|
|
154
|
|
153
|
|
Service cost
|
63
|
|
59
|
|
|
5
|
|
4
|
|
|
Interest cost
|
47
|
|
47
|
|
|
5
|
|
5
|
|
|
Actuarial loss (gain)
|
124
|
|
67
|
|
|
(4
|
)
|
—
|
|
|
Plan amendments
|
—
|
|
(6
|
)
|
|
—
|
|
—
|
|
|
Foreign currency exchange rate change
|
5
|
|
(1
|
)
|
|
—
|
|
—
|
|
|
Benefits paid
|
(110
|
)
|
(75
|
)
|
|
(9
|
)
|
(8
|
)
|
|
Settlements
|
(6
|
)
|
(12
|
)
|
|
—
|
|
—
|
|
|
Benefit obligation at December 31
|
1,335
|
|
1,212
|
|
|
151
|
|
154
|
|
|
Change in Plan Assets
|
|
|
|
|
|
|||||
Fair value of plan assets at January 1
|
960
|
|
820
|
|
|
123
|
|
120
|
|
|
Actual return on plan assets
|
169
|
|
68
|
|
|
24
|
|
9
|
|
|
Employer contributions
|
6
|
|
160
|
|
|
—
|
|
—
|
|
|
Foreign currency exchange rate change
|
4
|
|
(1
|
)
|
|
—
|
|
—
|
|
|
Benefits paid
|
(110
|
)
|
(75
|
)
|
|
(9
|
)
|
(8
|
)
|
|
Settlements
|
(6
|
)
|
(12
|
)
|
|
—
|
|
—
|
|
|
Plan participant contributions
|
—
|
|
—
|
|
|
2
|
|
2
|
|
|
Fair value of plan assets at December 31
|
1,023
|
|
960
|
|
|
140
|
|
123
|
|
|
Funded Status at December 31
|
$
|
(312
|
)
|
(252
|
)
|
|
(11
|
)
|
(31
|
)
|
|
Pension Benefits
|
|
Other Benefits
|
|||||||
Millions of Dollars
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
Other current liabilities and deferred credits
|
$
|
7
|
|
5
|
|
|
—
|
|
—
|
|
Employee benefit obligations
|
305
|
|
247
|
|
|
11
|
|
31
|
|
|
Total recognized
|
$
|
312
|
|
252
|
|
|
11
|
|
31
|
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
|
Pension Benefits
|
|
Other Benefits
|
|||||||
Millions of Dollars
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
Net actuarial loss
|
$
|
381
|
|
380
|
|
|
(21
|
)
|
1
|
|
Prior service cost
|
4
|
|
4
|
|
|
(1
|
)
|
—
|
|
|
Total recognized
|
$
|
385
|
|
384
|
|
|
(22
|
)
|
1
|
|
Millions of Dollars
|
Pension Benefits
|
|
Other Benefits
|
|
|
Unrecognized net actuarial loss
|
$
|
26
|
|
—
|
|
Unrecognized prior service cost
|
1
|
|
—
|
|
Millions of Dollars
|
2017
|
|
2016
|
|
|
Projected benefit obligation
|
$
|
1,303
|
|
1,180
|
|
Accumulated benefit obligation
|
1,151
|
|
1,044
|
|
|
Fair value of plan assets
|
995
|
|
936
|
|
|
2017
|
|
2016
|
|||||
|
Pension
Benefits
|
|
Other
Benefits
|
|
|
Pension
Benefits
|
Other
Benefits
|
|
Discount rate
|
3.66
|
%
|
3.29
|
|
|
4.18
|
3.56
|
|
Rate of increase in compensation levels
|
4.24
|
|
—
|
|
|
4.15
|
—
|
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
|
Pension Benefits
|
|
Other Benefits
|
|||||||||||
Millions of Dollars
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
Net periodic benefit cost
|
|
|
|
|
|
|
|
|||||||
Service cost
|
$
|
63
|
|
59
|
|
61
|
|
|
4
|
|
4
|
|
4
|
|
Interest cost
|
47
|
|
47
|
|
45
|
|
|
4
|
|
5
|
|
5
|
|
|
Expected return on plan assets
|
(66
|
)
|
(64
|
)
|
(64
|
)
|
|
(7
|
)
|
(8
|
)
|
(8
|
)
|
|
Amortization of prior service cost
|
—
|
|
7
|
|
7
|
|
|
—
|
|
—
|
|
—
|
|
|
Amortization of actuarial loss
|
19
|
|
15
|
|
24
|
|
|
—
|
|
—
|
|
—
|
|
|
Curtailments
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
Special/contractual termination benefits
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
Settlements
|
3
|
|
5
|
|
4
|
|
|
—
|
|
—
|
|
—
|
|
|
Total net periodic benefit cost
|
66
|
|
69
|
|
77
|
|
|
1
|
|
1
|
|
1
|
|
|
Changes recognized in other comprehensive loss (income)
|
|
|
|
|
|
|
|
|||||||
Net actuarial loss (gain) during period
|
21
|
|
64
|
|
10
|
|
|
(21
|
)
|
(4
|
)
|
3
|
|
|
Amortization of actuarial loss
|
(19
|
)
|
(15
|
)
|
(24
|
)
|
|
—
|
|
—
|
|
—
|
|
|
Prior service cost during period
|
1
|
|
(7
|
)
|
—
|
|
|
(1
|
)
|
—
|
|
—
|
|
|
Settlements
|
(3
|
)
|
(5
|
)
|
(4
|
)
|
|
—
|
|
—
|
|
—
|
|
|
Amortization of prior service cost
|
—
|
|
(7
|
)
|
(7
|
)
|
|
—
|
|
—
|
|
—
|
|
|
Total changes recognized in other comprehensive loss (income)
|
—
|
|
30
|
|
(25
|
)
|
|
(22
|
)
|
(4
|
)
|
3
|
|
|
Recognized in net periodic benefit cost and other comprehensive loss (income)
|
$
|
66
|
|
99
|
|
52
|
|
|
(21
|
)
|
(3
|
)
|
4
|
|
|
One-Percentage Point
|
||||
Millions of Dollars
|
Increase
|
|
Decrease
|
|
|
Effect on total service and interest cost components
|
$
|
—
|
|
—
|
|
Effect on the postretirement benefit obligation
|
1
|
|
(1
|
)
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
|
2017
|
|
2016
|
|
2015
|
||||
|
Pension
Benefits
|
|
Other
Benefits
|
|
Pension
Benefits
|
Other
Benefits
|
|
Pension
Benefits
|
Other
Benefits
|
Discount rate
|
4.18
|
%
|
3.56
|
|
4.46
|
3.69
|
|
4.06
|
3.43
|
Expected return on plan assets
|
7.00
|
|
7.00
|
|
7.25
|
7.25
|
|
7.50
|
7.50
|
Rate of increase in compensation levels
|
4.24
|
|
—
|
|
4.15
|
—
|
|
4.15
|
—
|
•
|
Mutual funds are valued using quoted market prices that represent the net asset values of shares held by the plans at year-end.
|
•
|
Common collective trusts (CCTs) are valued at fair value using the net asset value as determined by the issuer based on the current values of the underlying assets of such trust.
|
•
|
Guaranteed investment contracts (GIC) are valued using a discounted cash flow method. The projected cash flow stream related to the holdings at December 31, 2017 through a date corresponding to the projected average estimated duration of the participants’ investments in the contracts is discounted using the equivalent Treasury bond yield adjusted for the credit quality of the GIC issuer.
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
|
2017
|
|
2016
|
|||||||||||||||
Millions of Dollars
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|
Asset Class
|
|
|
|
|
|
|
|
|
|
|||||||||
Mutual funds/CCTs/SAs
2
:
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. equities (a)
|
$
|
215
|
|
6
|
|
—
|
|
221
|
|
|
205
|
|
6
|
|
—
|
|
211
|
|
Global equities (b)
|
56
|
|
43
|
|
—
|
|
99
|
|
|
52
|
|
35
|
|
—
|
|
87
|
|
|
Non U.S. equities (c)
|
—
|
|
322
|
|
—
|
|
322
|
|
|
—
|
|
285
|
|
—
|
|
285
|
|
|
Real Estate (d)
|
—
|
|
91
|
|
—
|
|
91
|
|
|
—
|
|
87
|
|
—
|
|
87
|
|
|
Fixed income (e)
|
6
|
|
271
|
|
—
|
|
277
|
|
|
5
|
|
271
|
|
—
|
|
276
|
|
|
Blended fund investments (f)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Money market (g)
|
5
|
|
—
|
|
—
|
|
5
|
|
|
7
|
|
—
|
|
—
|
|
7
|
|
|
GIC (h)
|
—
|
|
—
|
|
8
|
|
8
|
|
|
—
|
|
—
|
|
7
|
|
7
|
|
|
Total
|
$
|
282
|
|
733
|
|
8
|
|
1,023
|
|
|
269
|
|
684
|
|
7
|
|
960
|
|
|
2017
|
|
2016
|
|||||||||||||||
Millions of Dollars
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|
Asset Class
|
|
|
|
|
|
|
|
|
|
|||||||||
Mutual funds/CCTs/SAs
2
:
|
|
|
|
|
|
|
|
|
|
|||||||||
U.S. equities (a)
|
$
|
41
|
|
—
|
|
—
|
|
41
|
|
|
36
|
|
—
|
|
—
|
|
36
|
|
Global equities (b)
|
5
|
|
5
|
|
—
|
|
10
|
|
|
4
|
|
4
|
|
—
|
|
8
|
|
|
Non U.S. equities (c)
|
—
|
|
39
|
|
—
|
|
39
|
|
|
—
|
|
32
|
|
—
|
|
32
|
|
|
Real Estate (d)
|
—
|
|
11
|
|
—
|
|
11
|
|
|
—
|
|
10
|
|
—
|
|
10
|
|
|
Fixed income (e)
|
7
|
|
32
|
|
—
|
|
39
|
|
|
7
|
|
29
|
|
—
|
|
36
|
|
|
Money market (g)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
1
|
|
—
|
|
—
|
|
1
|
|
|
Total
|
$
|
53
|
|
87
|
|
—
|
|
140
|
|
|
48
|
|
75
|
|
—
|
|
123
|
|
(a)
|
This asset class invests the majority of assets in securities of companies in the U.S. stock market (those similar to companies in the Dow Jones Wilshire 5000 Index).
|
(b)
|
This asset class invests the majority of assets in securities of both companies in the U.S. stock market and companies based outside the U.S. boundaries (those similar to companies in the MSCI All Country World Index).
|
(c)
|
This asset class invests the majority of assets in securities of companies based outside the U.S. (those similar to companies in the MSCI All Country World ex-U.S. Index).
|
|
|
2
Mutual funds are classified as Level 1 inputs and CCTs and Separate Accounts (SAs) are classified as Level 2 inputs as defined in the fair value hierarchy in ASC 820 (refer to Note 18 for additional information).
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
(d)
|
This asset class invests the majority of assets in real estate assets based inside United States boundaries (those similar to real estate assets in the NCREIF Open End Diversified Core Equity (ODCE) Fund Index).
|
(e)
|
This asset class invests in debt investments of all types, with average portfolio durations approximating those of the benchmarks listed below, and allocates across investment-grade, high-yield, and emerging-market debt securities (those similar to investments in the Barclays Capital Long-Term Government/Credit Index, the Barclays Capital U.S. Long Credit Index, and the Barclays Capital Aggregate Bond Index).
|
(f)
|
This asset class invests assets approximately 25 percent in global equities and 75 percent in global fixed income.
|
(g)
|
This asset class primarily invests in U.S. government securities with maturities of one year or less.
|
(h)
|
A GIC is an agreement between the issuer and the plan, in which the issuer agrees to pay a predetermined interest rate and principal for a set amount deposited with the issuer.
|
Millions of Dollars
|
Pension
Benefits
|
|
Other
Benefits
|
|
|
2018
|
$
|
97
|
|
10
|
|
2019
|
102
|
|
11
|
|
|
2020
|
102
|
|
12
|
|
|
2021
|
106
|
|
13
|
|
|
2022
|
111
|
|
13
|
|
|
2023–2027
|
554
|
|
71
|
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Millions of Dollars
|
2017
|
|
2016
|
|
2015
|
|
|
State – current
|
$
|
3
|
|
6
|
|
11
|
|
State – deferred
|
3
|
|
—
|
|
(1
|
)
|
|
Foreign – current
|
45
|
|
53
|
|
56
|
|
|
Foreign – deferred
|
7
|
|
7
|
|
8
|
|
|
Total income tax expense
|
$
|
58
|
|
66
|
|
74
|
|
Millions of Dollars
|
2017
|
|
2016
|
|
|
Deferred income tax liabilities
|
|
|
|||
Foreign withholding taxes
|
$
|
16
|
|
20
|
|
Property, plant and equipment
|
37
|
|
23
|
|
|
Other
|
1
|
|
1
|
|
|
Total deferred income tax liabilities
|
$
|
54
|
|
44
|
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
|
Millions of Dollars
|
|
Percentage of
Pre-tax Income
|
|||||||||||
|
2017
|
|
2016
|
|
2015
|
|
|
2017
|
|
2016
|
|
2015
|
|
|
Domestic
|
$
|
769
|
|
1,345
|
|
2,109
|
|
|
51
|
%
|
77
|
|
77
|
|
Foreign
|
735
|
|
408
|
|
616
|
|
|
49
|
|
23
|
|
23
|
|
|
Total income before taxes
|
$
|
1,504
|
|
1,753
|
|
2,725
|
|
|
100
|
%
|
100
|
|
100
|
|
|
|
|
|
|
|
|
|
|||||||
Federal statutory income taxes
|
$
|
526
|
|
614
|
|
954
|
|
|
35
|
%
|
35
|
|
35
|
|
Income attributable to partnership not subject to tax
|
(526
|
)
|
(614
|
)
|
(954
|
)
|
|
(35
|
)
|
(35
|
)
|
(35
|
)
|
|
Foreign income taxes
|
52
|
|
60
|
|
64
|
|
|
3
|
|
3
|
|
2
|
|
|
State income taxes
|
6
|
|
6
|
|
10
|
|
|
1
|
|
1
|
|
1
|
|
|
Total income tax expense
|
$
|
58
|
|
66
|
|
74
|
|
|
4
|
%
|
4
|
|
3
|
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
|
Years ended December 31
|
||||||
Millions of Dollars
|
2017
|
|
2016
|
|
2015
|
|
|
Revenues and Other Income
|
|
|
|
||||
Sales and other operating revenues
|
$
|
7,829
|
|
7,000
|
|
7,818
|
|
Equity in income of affiliates
|
92
|
|
109
|
|
113
|
|
|
Other (loss) income
|
(2
|
)
|
(3
|
)
|
59
|
|
|
Total Revenues and Other Income
|
7,919
|
|
7,106
|
|
7,990
|
|
|
Costs and Expenses
|
|
|
|
||||
Cost of goods sold
|
6,316
|
|
5,104
|
|
5,264
|
|
|
Selling, general and administrative
|
700
|
|
639
|
|
640
|
|
|
Research and development
|
58
|
|
54
|
|
54
|
|
|
Total Costs and Expenses
|
7,074
|
|
5,797
|
|
5,958
|
|
|
Income Before Interest and Taxes
|
845
|
|
1,309
|
|
2,032
|
|
|
Interest income
|
7
|
|
1
|
|
1
|
|
|
Interest expense
|
1
|
|
1
|
|
—
|
|
|
Income Before Taxes
|
851
|
|
1,309
|
|
2,033
|
|
|
Income tax expense
|
10
|
|
8
|
|
13
|
|
|
Net Income
|
$
|
841
|
|
1,301
|
|
2,020
|
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
|
At December 31
|
||||
Millions of Dollars
|
2017
|
|
2016
|
|
|
ASSETS
|
|
|
|||
Cash and cash equivalents
|
$
|
519
|
|
422
|
|
Accounts receivable, net
|
932
|
|
827
|
|
|
Inventories
|
975
|
|
838
|
|
|
Prepaid expenses and other current assets
|
33
|
|
26
|
|
|
Total Current Assets
|
2,459
|
|
2,113
|
|
|
Property, plant and equipment, net
|
10,211
|
|
9,215
|
|
|
Investments in and advances to affiliates
|
237
|
|
264
|
|
|
Other assets and deferred charges
|
80
|
|
78
|
|
|
Total Assets
|
$
|
12,987
|
|
11,670
|
|
LIABILITIES AND MEMBERS’ EQUITY
|
|
|
|||
Accounts payable
|
$
|
1,139
|
|
1,408
|
|
Other current liabilities and deferred credits
|
262
|
|
241
|
|
|
Total Current Liabilities
|
1,401
|
|
1,649
|
|
|
Employee benefit obligations
|
380
|
|
338
|
|
|
Other liabilities and deferred credits
|
60
|
|
48
|
|
|
Total Liabilities
|
1,841
|
|
2,035
|
|
|
Members’ capital
|
11,497
|
|
10,003
|
|
|
Accumulated other comprehensive loss
|
(351
|
)
|
(368
|
)
|
|
Total Members’ Equity
|
11,146
|
|
9,635
|
|
|
Total Liabilities and Members’ Equity
|
$
|
12,987
|
|
11,670
|
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
|
Years ended December 31
|
||||||
Millions of Dollars
|
2017
|
|
2016
|
|
2015
|
|
|
Operating Activities
|
|
|
|
||||
Net income
|
$
|
841
|
|
1,301
|
|
2,020
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
||||
Depreciation, amortization and retirements
|
334
|
|
299
|
|
291
|
|
|
Asset impairments
|
62
|
|
—
|
|
—
|
|
|
Distributions greater than income from equity affiliates
|
28
|
|
21
|
|
12
|
|
|
Net (increase) decrease in operating working capital
|
(361
|
)
|
885
|
|
(196
|
)
|
|
Benefit plan contributions
|
(6
|
)
|
(160
|
)
|
(7
|
)
|
|
Employee benefit obligations
|
64
|
|
77
|
|
58
|
|
|
Other
|
9
|
|
11
|
|
12
|
|
|
Net Cash Provided by Operating Activities
|
971
|
|
2,434
|
|
2,190
|
|
|
Investing Activities
|
|
|
|
||||
Capital expenditures
|
(1,476
|
)
|
(1,925
|
)
|
(2,588
|
)
|
|
Proceeds from the sale of assets
|
24
|
|
1
|
|
4
|
|
|
Other
|
—
|
|
(1
|
)
|
(11
|
)
|
|
Net Cash Used in Investing Activities
|
(1,452
|
)
|
(1,925
|
)
|
(2,595
|
)
|
|
Financing Activities
|
|
|
|
||||
Net contributions from (distributions to) members
|
578
|
|
(200
|
)
|
(294
|
)
|
|
Net Cash Provided by (Used in) Financing Activities
|
578
|
|
(200
|
)
|
(294
|
)
|
|
Net Increase (Decrease) in Cash and Cash Equivalents
|
97
|
|
309
|
|
(699
|
)
|
|
Cash and Cash Equivalents at Beginning of Period
|
422
|
|
113
|
|
812
|
|
|
Cash and Cash Equivalents at End of Period
|
$
|
519
|
|
422
|
|
113
|
|
|
|
|
|
||||
Supplemental Disclosures of Cash Flow Information
|
|
|
|
||||
(Increase) decrease in accounts receivable, net
|
$
|
(103
|
)
|
225
|
|
2
|
|
(Increase) decrease in inventories
|
(152
|
)
|
(30
|
)
|
9
|
|
|
(Increase) decrease in prepaid expenses and other current assets
|
(9
|
)
|
(2
|
)
|
40
|
|
|
(Decrease) increase in accounts payable
|
(117
|
)
|
702
|
|
(241
|
)
|
|
Increase (decrease) in accrued income and other taxes
|
7
|
|
(12
|
)
|
7
|
|
|
Increase (decrease) in other current liabilities and deferred credits
|
13
|
|
2
|
|
(13
|
)
|
|
Net (increase) decrease in operating working capital
|
$
|
(361
|
)
|
885
|
|
(196
|
)
|
Chevron Phillips Chemical Company LLC
|
||
Notes to Consolidated Financial Statements – December 31, 2017
|
Millions of Dollars
|
2017
|
|
2016
|
|
2015
|
|
|
Interest cost incurred
|
$
|
62
|
|
35
|
|
20
|
|
Less capitalized interest
|
(62
|
)
|
(35
|
)
|
(20
|
)
|
|
Net interest expense
|
$
|
—
|
|
—
|
|
—
|
|
Foreign currency transaction (loss) gain
|
$
|
(5
|
)
|
2
|
|
(1
|
)
|