PHILLIPS 66, 10-Q filed on 5/1/2015
Quarterly Report
Document and Entity Information (USD $)
3 Months Ended
Mar. 31, 2015
Dec. 31, 2014
Document and Entity Information [Abstract]
 
 
Entity Registrant Name
Phillips 66 
 
Entity Central Index Key
0001534701 
 
Trading Symbol
PSX 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Mar. 31, 2015 
 
Document Fiscal Year Focus
2015 
 
Document Fiscal Period Focus
Q1 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
541,632,079 
 
Common Stock, Par or Stated Value Per Share
$ 0.01 
$ 0.01 
Consolidated Statement of Income (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Sales and other operating revenues
 
 
Sales and other operating revenues
$ 22,778 1
$ 40,283 1
Equity in earnings of affiliates
456 
778 
Net gain on dispositions
122 
7 
Other income
70 
31 
Total Revenues and Other Income
23,426 
41,099 
Costs and Expenses
 
 
Purchased crude oil and products
16,695 
34,381 
Operating expenses
1,094 
1,090 
Selling, general and administrative expenses
394 
402 
Depreciation and amortization
253 
234 
Impairments
 
1 
Taxes other than income taxes
3,462 1
3,638 1
Accretion on discounted liabilities
5 
6 
Interest and debt expense
86 
68 
Foreign currency transaction losses (gains)
49 
(19)
Total Costs and Expenses
22,038 
39,801 
Income from continuing operations before income taxes
1,388 
1,298 
Provision for income taxes
391 
426 
Income From Continuing Operations
997 
872 
Income from discontinued operations
 
706 2 3
Net Income
997 
1,578 
Less: net income attributable to noncontrolling interests
10 
6 
Net Income Attributable to Phillips 66
987 
1,572 
Amounts Attributable to Phillips 66 Common Stockholders:
 
 
Income from continuing operations
987 
866 
Income from discontinued operations
   
$ 706 
Basic
 
 
Continuing operations
$ 1.80 
$ 1.48 
Discontinued operations
 
$ 1.21 
Net Income Attributable to Phillips 66 Per Share of Common Stock
$ 1.80 
$ 2.69 
Diluted
 
 
Continuing operations
$ 1.79 
$ 1.47 
Discontinued operations
 
$ 1.20 
Net Income Attributable to Phillips 66 Per Share of Common Stock
$ 1.79 
$ 2.67 
Dividends Paid Per Share of Common Stock (dollars)
$ 0.50 
$ 0.39 
Average Common Shares Outstanding (in thousands)
 
 
Basic
548,200 2
584,053 2
Diluted
552,337 2
589,575 2
Consolidated Statement of Income (Parenthetical) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Income Statement [Abstract]
 
 
Includes excise taxes on petroleum products sales
$ 3,362 
$ 3,522 
Net of provision for income taxes on discontinued operations
$ 0 
$ 5 
Consolidated Statement of Comprehensive Income (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Statement of Comprehensive Income [Abstract]
 
 
Net Income
$ 997 
$ 1,578 
Actuarial gain/loss:
 
 
Amortization to net income of net actuarial loss and settlements
30 
12 
Plans sponsored by equity affiliates
5 
3 
Income taxes on defined benefit plans
(10)
(5)
Defined benefit plans, net of tax
25 
10 
Foreign currency translation adjustments
(197)
31 
Income taxes on foreign currency translation adjustments
9 
(1)
Foreign currency translation adjustments, net of tax
(188)
30 
Other Comprehensive Income (Loss), Net of Tax
(163)
40 
Comprehensive Income
834 
1,618 
Less: comprehensive income attributable to noncontrolling interests
10 
6 
Comprehensive Income Attributable to Phillips 66
$ 824 
$ 1,612 
Consolidated Balance Sheet (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Assets
 
 
Cash and cash equivalents
$ 5,390 
$ 5,207 
Accounts and notes receivable (net of allowances of $69 million in 2015 and $71 million in 2014)
4,717 
6,306 
Accounts and notes receivable - related parties
1,020 
949 
Inventories
4,166 
3,397 
Prepaid expenses and other current assets
851 
837 
Total Current Assets
16,144 
16,696 
Investments and long-term receivables
10,529 
10,189 
Net properties, plants and equipment
17,918 
17,346 
Goodwill
3,274 
3,274 
Intangibles
882 
900 
Other assets
330 
336 
Total Assets
49,077 
48,741 
Liabilities
 
 
Accounts payable
6,965 
7,488 
Accounts payable - related parties
728 
576 
Short-term debt
35 
842 
Accrued income and other taxes
1,112 
878 
Employee benefit obligations
283 
462 
Other accruals
741 
848 
Total Current Liabilities
9,864 
11,094 
Long-term debt
8,914 
7,842 
Asset retirement obligations and accrued environmental costs
650 
683 
Deferred income taxes
5,483 
5,491 
Employee benefit obligations
1,292 
1,305 
Other liabilities and deferred credits
279 
289 
Total Liabilities
26,482 
26,704 
Equity
 
 
Common stock (2,500,000,000 shares authorized at $.01 par value) Issued (2015—637,925,189 shares; 2014—637,031,760 shares) Par Value
6 
6 
Capital in excess of par
19,060 
19,040 
Treasury stock (at cost: 2015—96,293,110 shares; 2014—90,649,984 shares)
(6,633)
(6,234)
Retained earnings
10,021 
9,309 
Accumulated other comprehensive loss
(694)
(531)
Total Stockholders' Equity
21,760 
21,590 
Noncontrolling interests
835 
447 
Total Equity
22,595 
22,037 
Total Liabilities and Equity
$ 49,077 
$ 48,741 
Consolidated Balance Sheet (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Accounts and notes receivable - allowance
$ 69 
$ 71 
Common stock authorized, shares
2,500,000,000 
2,500,000,000 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock issued, shares
637,925,189 
637,031,760 
Treasury stock, shares
96,293,110 
90,649,984 
Consolidated Statement of Cash Flows (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Net Cash Provided by (Used in) Operating Activities, Continuing Operations [Abstract]
 
 
Net income
$ 997 
$ 1,578 
Adjustments to reconcile net income to net cash provided by operating activities
 
 
Depreciation and amortization
253 
234 
Impairments
 
1 
Accretion on discounted liabilities
5 
6 
Deferred taxes
(6)
(444)
Undistributed equity earnings
(337)
632 
Net gain on dispositions
(122)
(7)
Income from discontinued operations
 
(706)1 2
Other
90 
(21)
Working capital adjustments
 
 
Decrease (increase) in accounts and notes receivable
1,684 
619 
Decrease (increase) in inventories
(834)
(2,567)
Decrease (increase) in prepaid expenses and other current assets
(130)
(132)
Increase (decrease) in accounts payable
(349)
1,505 
Increase (decrease) in taxes and other accruals
101 
698 
Net cash provided by continuing operating activities
1,352 
1,396 
Net cash provided by discontinued operations
 
2 
Net Cash Provided by Operating Activities
1,352 
1,398 
Cash Flows From Investing Activities
 
 
Capital expenditures and investments
(1,081)
(572)
Proceeds from asset dispositions
(9)3
507 3
Advances/loans—related parties
(50)
 
Other
102 
13 
Net cash used in continuing investing activities
(1,038)
(52)
Net cash used in discontinued operations
 
(34)
Net Cash Used in Investing Activities
(1,038)
(86)
Cash Flows From Financing Activities
 
 
Issuance of debt
1,169 
 
Repayment of debt
(895)
(8)
Issuance of common stock
(25)
(20)
Repurchase of common stock
(399)
(640)
Share exchange—PSPI transaction
 
(450)
Dividends paid on common stock
(272)
(229)
Distributions to noncontrolling interests
(6)
(4)
Net proceeds from issuance of Phillips 66 Partners LP common units
384 
 
Other
(14)
(4)
Net cash used in continuing financing activities
(58)
(1,355)
Net Cash Used in Financing Activities
(58)
(1,355)
Effect of Exchange Rate Changes on Cash and Cash Equivalents
(73)
(31)
Net Change in Cash and Cash Equivalents
183 
(74)
Cash and cash equivalents at beginning of period
5,207 
5,400 
Cash and Cash Equivalents at End of Period
$ 5,390 
$ 5,326 
Consolidated Statement of Changes in Equity (USD $)
In Millions, except Share data, unless otherwise specified
Total
Par Value [Member]
Capital in Excess of Par [Member]
Treasury Stock [Member]
Treasury Stock Repurchase Plan [Member]
Treasury Stock Received On Disposition [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Noncontrolling Interests [Member]
Beginning Balance at Dec. 31, 2013
$ 22,392 
$ 6 
$ 18,887 
$ (2,602)
 
 
$ 5,622 
$ 37 
$ 442 
Beginning Balance, Treasury shares at Dec. 31, 2013
44,106,000 
 
 
 
 
 
 
 
 
Beginning Balance, Common Stocked Issued, shares at Dec. 31, 2013
634,286,000 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
Net income
1,578 
 
 
 
 
 
1,572 
 
6 
Other comprehensive loss
40 
 
 
 
 
 
 
40 
 
Cash dividends paid on common stock
(229)
 
 
 
 
 
(229)
 
 
Treasury stock, Repurchase of common stock and Share exchange-PSPI transaction
 
 
 
 
(640)
(1,350)
 
 
 
Benefit plan activity
 
 
45 
 
 
 
 
 
 
Benefit plan activity
 
 
 
 
 
 
(3)
 
 
Benefit plan activity
42 
 
 
 
 
 
 
 
 
Distributions to noncontrolling interests and other
 
 
 
 
 
 
 
 
(4)
Distributions to noncontrolling interests and other
(4)
 
 
 
 
 
 
 
 
Shares
 
 
 
 
 
 
 
 
 
Shares issued - share-based compensation
1,499,000 
 
 
 
 
 
 
 
 
Repurchase of common stock and share exchange-PSPI transaction, shares
 
 
 
 
8,410,000 
17,423,000 
 
 
 
Ending Balance at Mar. 31, 2014
21,829 
6 
18,932 
(4,592)
 
 
6,962 
77 
444 
Ending Balance, Treasury shares at Mar. 31, 2014
69,939,000 
 
 
 
 
 
 
 
 
Ending Balance, Common Stocked Issued, shares at Mar. 31, 2014
635,785,000 
 
 
 
 
 
 
 
 
Beginning Balance at Dec. 31, 2014
22,037 
6 
19,040 
(6,234)
 
 
9,309 
(531)
447 
Beginning Balance, Treasury shares at Dec. 31, 2014
90,649,984 
 
 
 
 
 
 
 
 
Beginning Balance, Common Stocked Issued, shares at Dec. 31, 2014
637,031,760 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
Net income
997 
 
 
 
 
 
987 
 
10 
Other comprehensive loss
(163)
 
 
 
 
 
 
(163)
 
Cash dividends paid on common stock
(272)
 
 
 
 
 
(272)
 
 
Treasury stock, Repurchase of common stock and Share exchange-PSPI transaction
(399)
 
 
(399)
 
 
 
 
 
Benefit plan activity
 
 
20 
 
 
 
 
 
 
Benefit plan activity
 
 
 
 
 
 
(3)
 
 
Benefit plan activity
17 
 
 
 
 
 
 
 
 
Issuance of Phillips 66 Partners LP common units
384 
 
 
 
 
 
 
 
384 
Distributions to noncontrolling interests and other
 
 
 
 
 
 
 
 
(6)
Distributions to noncontrolling interests and other
(6)
 
 
 
 
 
 
 
 
Shares
 
 
 
 
 
 
 
 
 
Shares issued - share-based compensation
893,000 
 
 
 
 
 
 
 
 
Repurchase of common stock and share exchange-PSPI transaction, shares
5,643,000 
 
 
 
 
 
 
 
 
Ending Balance at Mar. 31, 2015
$ 22,595 
$ 6 
$ 19,060 
$ (6,633)
 
 
$ 10,021 
$ (694)
$ 835 
Ending Balance, Treasury shares at Mar. 31, 2015
96,293,110 
 
 
 
 
 
 
 
 
Ending Balance, Common Stocked Issued, shares at Mar. 31, 2015
637,925,189 
 
 
 
 
 
 
 
 
Interim Financial Information
Interim Financial Information
Interim Financial Information

The interim financial information presented in the financial statements included in this report is unaudited and includes all known accruals and adjustments necessary, in the opinion of management, for a fair presentation of the consolidated financial position of Phillips 66 and its results of operations and cash flows for the periods presented. Unless otherwise specified, all such adjustments are of a normal and recurring nature. Certain notes and other information have been condensed or omitted from the interim financial statements included in this report. Therefore, these interim financial statements should be read in conjunction with the consolidated financial statements and notes included in our 2014 Annual Report on Form 10-K. The results of operations for the three months ended March 31, 2015, are not necessarily indicative of the results to be expected for the full year.
Variable Interest Entities (VIEs)
Variable Interest Entities (VIEs)
Variable Interest Entities (VIEs)

In 2013, we formed Phillips 66 Partners LP, a master limited partnership, to own, operate, develop and acquire primarily fee-based crude oil, refined petroleum product and natural gas liquids pipelines and terminals, as well as other transportation and midstream assets. We consolidate Phillips 66 Partners as we determined that Phillips 66 Partners is a VIE and we are the primary beneficiary. As general partner of Phillips 66 Partners, we have the ability to control its financial interests, as well as the ability to direct the activities of Phillips 66 Partners that most significantly impact its economic performance. See Note 20—Phillips 66 Partners LP, for additional information.

We hold variable interests in VIEs that have not been consolidated because we are not considered the primary beneficiary. Information on our significant VIEs follows:

Merey Sweeny, L.P. (MSLP) is a limited partnership that owns a delayed coker and related facilities at the Sweeny Refinery. As discussed more fully in Note 6—Investments, Loans and Long-Term Receivables, in August 2009, a call right was exercised to acquire the 50 percent ownership interest in MSLP of the co-venturer, Petróleos de Venezuela S.A. (PDVSA). That exercise was challenged, and the dispute has been arbitrated. In April 2014, the arbitral tribunal upheld the exercise of the call right and the acquisition of the 50 percent ownership interest. In July 2014, PDVSA filed a petition to vacate the tribunal’s award. Until this matter is resolved, we will continue to use the equity method of accounting for MSLP, and the VIE analysis below is based on the ownership and governance structure in place prior to the exercise of the call right. MSLP is a VIE because, in securing lender consents in connection with our separation from ConocoPhillips in 2012 (the Separation), we provided a 100 percent debt guarantee to the lender of the 8.85% Senior Notes issued by MSLP. PDVSA did not participate in the debt guarantee. In our VIE assessment, this disproportionate debt guarantee, plus other liquidity support provided jointly by us and PDVSA independently of equity ownership, results in MSLP not being exposed to all potential losses. We have determined we are not the primary beneficiary while our call exercise award is subject to vacatur because under the partnership agreement the co-venturers jointly direct the activities of MSLP that most significantly impact economic performance. At March 31, 2015, our maximum exposure to loss represented the outstanding debt principal balance of $189 million and our investment of $135 million.

We have a 50 percent ownership interest with a 50 percent governance interest in Excel Paralubes (Excel). Excel is a VIE because, in securing lender consents in connection with the Separation, ConocoPhillips provided a 50 percent debt guarantee to the lender of the 7.43% senior secured bonds issued by Excel. We provided a full indemnity to ConocoPhillips for this debt guarantee. Our co-venturer did not participate in the debt guarantee. In our assessment of the VIE, this debt guarantee, plus other liquidity support up to $60 million provided jointly by us and our co-venturer independently of equity ownership, results in Excel not being exposed to all potential losses. We have determined we are not the primary beneficiary because we and our co-venturer jointly direct the activities of Excel that most significantly impact economic performance. We use the equity method of accounting for this investment. At March 31, 2015, our maximum exposure to loss represented 50 percent of the outstanding debt principal balance of $58 million, or $29 million, plus half of the $60 million liquidity support, or $30 million. The book value of our investment in Excel at March 31, 2015, was $143 million.

In 2013, we entered into a multi-year consignment fuels agreement with a marketer that we supported with debt guarantees. Pursuant to the consignment fuels agreement, we own the fuels inventory, control the fuel marketing at each site, and pay a fixed monthly fee to the marketer. In November 2014, the marketer refinanced its debt which allowed us to remove the debt guarantees in exchange for an extended term on the consignment fuels agreement. We determined the consignment fuels agreement creates a variable interest in the marketer, with the marketer not being exposed to all potential losses as the consignment fuels agreement provides liquidity to the marketer for its debt service costs. We determined we are not the primary beneficiary because we do not have an ownership interest in the marketer or have the power to direct the activities that most significantly impact the economic performance of the marketer. At March 31, 2015, our maximum exposure to loss represented the fixed annual contractual payments under the consignment fuels agreement of approximately $90 million.
Inventories
Inventories
Inventories

Inventories consisted of the following:

 
Millions of Dollars
 
March 31
2015

 
December 31
2014

 
 
 
 
Crude oil and petroleum products
$
3,911

 
3,141

Materials and supplies
255

 
256

 
$
4,166

 
3,397




Inventories valued on the last-in, first-out (LIFO) basis totaled $3,798 million and $3,004 million at March 31, 2015, and December 31, 2014, respectively. The estimated excess of current replacement cost over LIFO cost of inventories amounted to approximately $3,200 million and $3,000 million at March 31, 2015, and December 31, 2014, respectively.

Certain planned year-to-date reductions in inventory caused liquidations of LIFO inventory values. These liquidations decreased net income by approximately $36 million during the three-month period ended March 31, 2015, while the impact to net income during the three-month period ended March 31, 2014, was not material.
Business Combinations
Business Combination Disclosure
Business Combinations

We completed the following acquisitions in 2014:

•
In August 2014, we acquired a 7.1 million-barrel-storage-capacity crude oil and petroleum products terminal located near Beaumont, Texas, to promote growth plans in our Midstream segment.
•
In July 2014, we acquired Spectrum Corporation, a private label and specialty lubricants business headquartered in Memphis, Tennessee. The acquisition supports our plans to selectively grow stable-return businesses in our Marketing and Specialties (M&S) segment.
•
In March 2014, we acquired our co-venturer’s interest in an entity that operates a power and steam generation plant located in Texas that is included in our M&S segment. This acquisition provided us with full operational control over a key facility providing utilities and other services to one of our refineries.

We funded each of these acquisitions with cash on hand. Total cash consideration paid in 2014 was $741 million, net of cash acquired. Cash consideration paid for acquisitions is included in the “Capital expenditures and investments” line of our consolidated statement of cash flows. In the aggregate, as of December 31, 2014, we provisionally recorded $471 million of properties, plants and equipment (PP&E), $232 million of goodwill, $196 million of intangible assets, $70 million of net working capital and $109 million of long-term liabilities. Our acquisition accounting for the transactions completed in March 2014 and August 2014 is final. The completion of our acquisition accounting for the July 2014 transaction is expected to be finalized in the second quarter of 2015. There were no material measurement period adjustments recorded in the first quarter of 2015.


Assets Held for Sale or Sold
Assets Held for Sale or Sold
Assets Held for Sale or Sold

In July 2014, we entered into an agreement to sell the Bantry Bay terminal in Ireland, which was included in our Refining segment. Accordingly, the net assets of the terminal were classified as held for sale, which resulted in a before-tax impairment of $12 million from reducing the carrying value of the long-lived assets to estimated fair value less costs to sell. As of December 31, 2014, long-lived assets of $77 million were recorded in the “Prepaid expenses and other current assets” line of our consolidated balance sheet. In addition, an immaterial amount of long-term liabilities were recorded in the “Other accruals” line of our consolidated balance sheet. In February 2015, we completed the sale of the terminal. At the time of the disposition, the terminal had a net carrying value of $68 million, which primarily related to net PP&E. An immaterial gain was recognized on this disposition.

In February 2014, we exchanged the stock of Phillips Specialty Products Inc. (PSPI), a flow improver business, which was included in our M&S segment, for shares of Phillips 66 common stock owned by another party. The PSPI share exchange resulted in the receipt of approximately 17.4 million shares of Phillips 66 common stock, which are held as treasury shares, and the recognition of a before-tax gain of $696 million. At the time of the disposition, PSPI had a net carrying value of $685 million, which primarily included $481 million of cash and cash equivalents, $60 million of net PP&E and $117 million of allocated goodwill. Cash and cash equivalents of $450 million included in PSPI’s net carrying value is reflected as a financing cash outflow in the “Share exchange—PSPI transaction” line of our consolidated statement of cash flows. Revenues, income before-tax and net income from discontinued operations, excluding the recognized before-tax gain of $696 million, were not material for the three-month period ended March 31, 2014.

In July 2013, we completed the sale of the Immingham Combined Heat and Power Plant (ICHP), which was included in our M&S segment. A gain was deferred due to an indemnity provided to the buyer, which expired in April 2015. A portion of the deferred gain is denominated in a foreign currency; accordingly, the amount of the deferred gain translated into U.S. dollars is subject to change based on currency fluctuations. Absent claims under the indemnity, the deferred gain will be recognized into earnings as our exposure under this indemnity declines. As of December 31, 2014, the deferred gain was $243 million. In the first quarter of 2015, we recognized $110 million of the previously deferred gain, which is recorded in the “Net gain on dispositions” line of our consolidated statement of income. As of March 31, 2015, the remaining deferred gain was $132 million, all of which we expect to recognize in the second quarter of 2015.
Investments, Loans and Long-Term Receivables
Investments, Loans and Long-Term Receivables
Investments, Loans and Long-Term Receivables

Equity Investments
Summarized 100 percent financial information for WRB Refining LP (WRB) and Chevron Phillips Chemical Company LLC (CPChem) were as follows:
 
 
Millions of Dollars
 
Three Months Ended
March 31
 
2015

 
2014

 
 
 
 
Revenues
$
4,906

 
7,998

Income before income taxes
692

 
1,124

Net income
672

 
1,101




WRB
WRB is a 50-percent-owned business venture with Cenovus Energy Inc. (Cenovus). Cenovus was obligated to contribute $7.5 billion, plus accrued interest, to WRB over a 10-year period that began in 2007. In the first quarter of 2014, Cenovus prepaid its remaining balance under this obligation. As a result, WRB declared a special dividend, which was distributed to the co-venturers in March 2014. Of the $1,232 million that we received, $760 million was considered a return on our investment in WRB (an operating cash inflow), and $472 million was considered a return of our investment in WRB (an investing cash inflow). The return of investment portion of the dividend was included in the “Proceeds from asset dispositions” line in our consolidated statement of cash flows. At March 31, 2015, the book value of our investment in WRB was $1,898 million and our basis difference was $3,326 million.

Other
In April 2015, Rockies Express Pipeline LLC (REX) repaid $450 million of its debt, reducing its long-term debt to approximately $2.6 billion.  REX funded the repayment through member cash contributions. Our 25 percent share was approximately $112 million, which we contributed to REX in April 2015.

MSLP owns a delayed coker and related facilities at the Sweeny Refinery. MSLP processes long residue, which is produced from heavy sour crude oil, for a processing fee. Fuel-grade petroleum coke is produced as a by-product and becomes the property of MSLP. Prior to August 28, 2009, MSLP was owned 50/50 by ConocoPhillips and PDVSA. Under the agreements that govern the relationships between the partners, certain defaults by PDVSA with respect to supply of crude oil to the Sweeny Refinery triggered the right to acquire PDVSA’s 50 percent ownership interest in MSLP, which was exercised on August 28, 2009. PDVSA initiated arbitration with the International Chamber of Commerce challenging the exercise of the call right and claiming it was invalid. The arbitral tribunal held hearings on the merits of the dispute in December 2012, and post-hearing briefs were exchanged in March 2013. The arbitral tribunal issued its ruling in April 2014, which upheld the exercise of the call right and the acquisition of the 50 percent ownership interest. In July 2014, PDVSA filed a petition in U.S. district court to vacate the tribunal’s ruling.  Following the Separation, Phillips 66 generally indemnifies ConocoPhillips for liabilities, if any, arising out of the exercise of the call right or otherwise with respect to the joint venture or the refinery. Until this matter is resolved, we will continue to use the equity method of accounting for our investment in MSLP.
Properties, Plants and Equipment
Properties, Plants and Equipment
Properties, Plants and Equipment

Our investment in PP&E, with the associated accumulated depreciation and amortization (Accum. D&A), was:

 
Millions of Dollars
 
March 31, 2015
 
December 31, 2014
 
Gross
PP&E

 
Accum.
D&A

 
Net
PP&E

 
Gross
PP&E

 
Accum.
D&A

 
Net
PP&E

 
 
 
 
 
 
 
 
 
 
 
 
Midstream
$
5,337

 
1,209

 
4,128

 
4,726

 
1,185

 
3,541

Chemicals
—

 
—

 
—

 
—

 
—

 
—

Refining
20,126

 
7,558

 
12,568

 
19,951

 
7,424

 
12,527

Marketing and Specialties
1,410

 
702

 
708

 
1,490

 
738

 
752

Corporate and Other
983

 
469

 
514

 
978

 
452

 
526

 
$
27,856

 
9,938

 
17,918

 
27,145

 
9,799

 
17,346

Earnings Per Share
Earnings Per Share
Earnings Per Share

The numerator of basic earnings per share (EPS) is net income attributable to Phillips 66, reduced by noncancelable dividends paid on unvested share-based employee awards during the vesting period (participating securities). The denominator of basic EPS is the sum of the daily weighted-average number of common shares outstanding during the periods presented and fully vested stock and unit awards that have not yet been issued as common stock. The numerator of diluted EPS is also based on net income attributable to Phillips 66, which is reduced only by dividend equivalents paid on participating securities for which the dividends are more dilutive than the participation of the awards in the earnings of the periods presented. To the extent unvested stock, unit or option awards and vested unexercised stock options are dilutive, they are included with the weighted-average common shares outstanding in the denominator. Treasury stock is excluded from the denominator in both basic and diluted EPS.
 
Three Months Ended
March 31
 
2015
 
2014
 
Basic

Diluted

 
Basic

Diluted

Amounts attributed to Phillips 66 Common Stockholders (millions):
 
 
 
 
 
Income from continuing operations attributable to Phillips 66
$
987

987

 
866

866

Income allocated to participating securities
(2
)
(1
)
 
(1
)
—

Income from continuing operations available to common stockholders
985

986

 
865

866

Discontinued operations
—

—

 
706

706

Net Income available to common stockholders
$
985

986

 
1,571

1,572

 
 
 
 
 
 
Weighted-average common shares outstanding (thousands):
543,469

548,200

 
580,027

584,053

Effect of stock-based compensation
4,731

4,137

 
4,026

5,522

Weighted-average common shares outstanding—EPS
548,200

552,337

 
584,053

589,575

 
 
 
 
 
 
Earnings Per Share of Common Stock (dollars):
 
 
 
 
 
Income from continuing operations attributable to Phillips 66
$
1.80

1.79

 
1.48

1.47

Discontinued operations
—

—

 
1.21

1.20

Earnings Per Share
$
1.80

1.79

 
2.69

2.67

Debt
Debt
Debt

In March 2015, we repaid $800 million of 1.95% Senior Notes upon maturity.

Debt Issuance
During February 2015, Phillips 66 Partners closed on a public offering of $1.1 billion aggregate principal amount of unsecured senior notes, consisting of:

•
$300 million aggregate principal amount of 2.646% Senior Notes due 2020.
•
$500 million aggregate principal amount of 3.605% Senior Notes due 2025.
•
$300 million aggregate principal amount of 4.680% Senior Notes due 2045.

Phillips 66 Partners utilized a portion of the net proceeds to fund part of the purchase price for its acquisition of our equity interests in Explorer Pipeline Company, DCP Sand Hills Pipeline, LLC, and DCP Southern Hills Pipeline, LLC. The remaining proceeds were used to repay existing borrowings from a subsidiary of Phillips 66, fund capital expenditures and for general partnership purposes. See Note 20—Phillips 66 Partners LP, for additional information.

Credit Facilities
At both March 31, 2015, and December 31, 2014, we had no direct outstanding borrowings under our $5 billion revolving credit agreement, while $51 million in letters of credit had been issued that were supported by it. At March 31, 2015, and December 31, 2014, no amount and $18 million, respectively, were outstanding under the $500 million revolving credit agreement of Phillips 66 Partners. Accordingly, as of March 31, 2015, an aggregate $5.4 billion of total capacity was available under these facilities.
Guarantees
Guarantees
Guarantees

At March 31, 2015, we were liable for certain contingent obligations under various contractual arrangements as described below. We recognize a liability, at inception, for the fair value of our obligation as a guarantor for newly issued or modified guarantees. Unless the carrying amount of the liability is noted below, we have not recognized a liability either because the guarantees were issued prior to December 31, 2002, or because the fair value of the obligation is immaterial. In addition, unless otherwise stated, we are not currently performing with any significance under the guarantee and expect future performance to be either immaterial or have only a remote chance of occurrence.

Guarantees of Joint Venture Debt
In 2012, in connection with the Separation, we issued a guarantee for 100 percent of the 8.85% Senior Notes issued by MSLP in July 1999. At March 31, 2015, the maximum potential amount of future payments to third parties under the guarantee was estimated to be $189 million, which could become payable if MSLP fails to meet its obligations under the senior notes agreement. The senior notes mature in 2019.

Other Guarantees
We have residual value guarantees associated with leases with maximum future potential payments totaling $361 million. We have other guarantees with maximum future potential payment amounts totaling $123 million, which consist primarily of guarantees to fund the short-term cash liquidity deficits of certain joint ventures and guarantees of the lease payment obligations of a joint venture. These guarantees generally extend up to 9 years or life of the venture.

Indemnifications
Over the years, we have entered into various agreements to sell ownership interests in certain corporations, joint ventures and assets that gave rise to qualifying indemnifications. Agreements associated with these sales include indemnifications for taxes, litigation, environmental liabilities, permits and licenses, supply arrangements, and employee claims; and real estate indemnity against tenant defaults. The provisions of these indemnifications vary greatly. The majority of these indemnifications are related to environmental issues with generally indefinite terms, and the maximum amount of future payments is generally unlimited. The carrying amount recorded for indemnifications at March 31, 2015, was $216 million. We amortize the indemnification liability over the relevant time period, if one exists, based on the facts and circumstances surrounding each type of indemnity. In cases where the indemnification term is indefinite, we will reverse the liability when we have information the liability is essentially relieved or amortize the liability over an appropriate time period as the fair value of our indemnification exposure declines. Although it is reasonably possible future payments may exceed amounts recorded, due to the nature of the indemnifications, it is not possible to make a reasonable estimate of the maximum potential amount of future payments. Included in the recorded carrying amount were $102 million of environmental accruals for known contamination that were included in asset retirement obligations and accrued environmental costs at March 31, 2015. For additional information about environmental liabilities, see Note 11—Contingencies and Commitments.

Indemnification and Release Agreement
In 2012, we entered into the Indemnification and Release Agreement with ConocoPhillips. This agreement governs the treatment between ConocoPhillips and us of matters relating to indemnification, insurance, litigation responsibility and management, and litigation document sharing and cooperation arising in connection with the Separation. Generally, the agreement provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of our business with us and financial responsibility for the obligations and liabilities of ConocoPhillips’ business with ConocoPhillips. The agreement also establishes procedures for handling claims subject to indemnification and related matters.
Contingencies and Commitments
Contingencies and Commitments
Contingencies and Commitments

A number of lawsuits involving a variety of claims that arose in the ordinary course of business have been filed against us or are subject to indemnifications provided by us. We also may be required to remove or mitigate the effects on the environment of the placement, storage, disposal or release of certain chemical, mineral and petroleum substances at various active and inactive sites. We regularly assess the need for accounting recognition or disclosure of these contingencies. In the case of all known contingencies (other than those related to income taxes), we accrue a liability when the loss is probable and the amount is reasonably estimable. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. We do not reduce these liabilities for potential insurance or third-party recoveries. If applicable, we record receivables for probable insurance or other third-party recoveries. In the case of income-tax-related contingencies, we use a cumulative probability-weighted loss accrual in cases where sustaining a tax position is less than certain.

Based on currently available information, we believe it is remote that future costs related to known contingent liability exposures will exceed current accruals by an amount that would have a material adverse impact on our consolidated financial statements. As we learn new facts concerning contingencies, we reassess our position both with respect to accrued liabilities and other potential exposures. Estimates particularly sensitive to future changes include contingent liabilities recorded for environmental remediation, tax and legal matters. Estimated future environmental remediation costs are subject to change due to such factors as the uncertain magnitude of cleanup costs, the unknown time and extent of such remedial actions that may be required, and the determination of our liability in proportion to that of other potentially responsible parties. Estimated future costs related to tax and legal matters are subject to change as events evolve and as additional information becomes available during the administrative and litigation processes.
Environmental
We are subject to international, federal, state and local environmental laws and regulations. When we prepare our consolidated financial statements, we record accruals for environmental liabilities based on management’s best estimates, using all information available at the time. We measure estimates and base liabilities on currently available facts, existing technology, and presently enacted laws and regulations, taking into account stakeholder and business considerations. When measuring environmental liabilities, we also consider our prior experience in remediation of contaminated sites, other companies’ cleanup experience, and data released by the U.S. Environmental Protection Agency (EPA) or other organizations. We consider unasserted claims in our determination of environmental liabilities, and we accrue them in the period they are both probable and reasonably estimable.

Although liability of those potentially responsible for environmental remediation costs is generally joint and several for federal sites and frequently so for state sites, we are usually only one of many companies alleged to have liability at a particular site. Due to such joint and several liabilities, we could be responsible for all cleanup costs related to any site at which we have been designated as a potentially responsible party. We have been successful to date in sharing cleanup costs with other financially sound companies. Many of the sites at which we are potentially responsible are still under investigation by the EPA or the state agencies concerned. Prior to actual cleanup, those potentially responsible normally assess the site conditions, apportion responsibility and determine the appropriate remediation. In some instances, we may have no liability or may attain a settlement of liability. Where it appears that other potentially responsible parties may be financially unable to bear their proportional share, we consider this inability in estimating our potential liability, and we adjust our accruals accordingly. As a result of various acquisitions in the past, we assumed certain environmental obligations. Some of these environmental obligations are mitigated by indemnifications made by others for our benefit and some of the indemnifications are subject to dollar and time limits.

We are currently participating in environmental assessments and cleanups at numerous federal Superfund and comparable state sites. After an assessment of environmental exposures for cleanup and other costs, we make accruals on an undiscounted basis (except those pertaining to sites acquired in a purchase business combination, which we record on a discounted basis) for planned investigation and remediation activities for sites where it is probable future costs will be incurred and these costs can be reasonably estimated. At March 31, 2015, our total environmental accrual was $480 million, compared with $496 million at December 31, 2014. We expect to incur a substantial amount of these expenditures within the next 30 years. We have not reduced these accruals for possible insurance recoveries. In the future, we may be involved in additional environmental assessments, cleanups and proceedings.

Legal Proceedings
Our legal organization applies its knowledge, experience and professional judgment to the specific characteristics of our cases, employing a litigation management process to manage and monitor the legal proceedings against us. Our process facilitates the early evaluation and quantification of potential exposures in individual cases. This process also enables us to track those cases that have been scheduled for trial and/or mediation. Based on professional judgment and experience in using these litigation management tools and available information about current developments in all our cases, our legal organization regularly assesses the adequacy of current accruals and determines if adjustment of existing accruals, or establishment of new accruals, is required.

Other Contingencies
We have contingent liabilities resulting from throughput agreements with pipeline and processing companies not associated with financing arrangements. Under these agreements, we may be required to provide any such company with additional funds through advances and penalties for fees related to throughput capacity not utilized.

At March 31, 2015, we had performance obligations secured by letters of credit and bank guarantees of $665 million (of which $51 million was issued under the provisions of our revolving credit facility, and the remainder was issued as direct bank letters of credit and bank guarantees) related to various purchase and other commitments incident to the ordinary conduct of business.
Derivatives and Financial Instruments
Derivatives and Financial Instruments
Derivatives and Financial Instruments

Derivative Instruments
We use financial and commodity-based derivative contracts to manage exposures to fluctuations in foreign currency exchange rates and commodity prices or to capture market opportunities. Since we are not currently using cash-flow hedge accounting, all gains and losses, realized or unrealized, from commodity derivative contracts have been recognized in the consolidated statement of income. Gains and losses from derivative contracts held for trading not directly related to our physical business, whether realized or unrealized, have been reported net in “Other income” on our consolidated statement of income. Cash flows from all our derivative activity for the periods presented appear in the operating section of the consolidated statement of cash flows.

Purchase and sales contracts with fixed minimum notional volumes for commodities that are readily convertible to cash (e.g., crude oil and gasoline) are recorded on the balance sheet as derivatives unless the contracts are eligible for, and we elect, the normal purchases and normal sales exception (i.e., contracts to purchase or sell quantities we expect to use or sell over a reasonable period in the normal course of business). We generally apply this normal purchases and normal sales exception to eligible crude oil, refined product, natural gas liquids (NGL), natural gas and power commodity purchase and sales contracts; however, we may elect not to apply this exception (e.g., when another derivative instrument will be used to mitigate the risk of the purchase or sales contract but hedge accounting will not be applied, in which case both the purchase or sales contract and the derivative contract mitigating the resulting risk will be recorded on the balance sheet at fair value). Our derivative instruments are held at fair value on our consolidated balance sheet. For further information on the fair value of derivatives, see Note 13—Fair Value Measurements.

Commodity Derivative Contracts—We operate in the worldwide crude oil, refined products, NGL, natural gas and electric power markets and are exposed to fluctuations in the prices for these commodities. These fluctuations can affect our revenues, as well as the cost of operating, investing and financing activities. Generally, our policy is to remain exposed to the market prices of commodities; however, we use futures, forwards, swaps and options in various markets to balance physical systems, meet customer needs, manage price exposures on specific transactions, and do a limited, immaterial amount of trading not directly related to our physical business. We also 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 used to optimize these activities, which may move our risk profile away from market average prices.

The following table indicates the balance sheet line items that include the fair values of commodity derivative assets and liabilities presented net (i.e., commodity derivative assets and liabilities with the same counterparty are netted where the right of setoff exists); however, the balances in the following table are presented gross. For information on the impact of counterparty netting and collateral netting, see Note 13—Fair Value Measurements.

 
Millions of Dollars
 
March 31
2015

 
December 31
2014

Assets
 
 
 
Accounts and notes receivable
$
—

 
(1
)
Prepaid expenses and other current assets
1,989

 
3,839

Other assets
36

 
29

Liabilities
 
 
 
Other accruals
1,776

 
3,472

Other liabilities and deferred credits
11

 
1

Hedge accounting has not been used for any item in the table.


The gains (losses) incurred from commodity derivatives, and the line items where they appear on our consolidated statement of income, were:
 
 
Millions of Dollars
 
Three Months Ended
March 31
 
2015

 
2014

 
 
 
 
Sales and other operating revenues
$
(31
)
 
57

Other income
43

 
14

Purchased crude oil and products
20

 
2

Hedge accounting has not been used for any item in the table.


The following table summarizes our material net exposures resulting from outstanding commodity derivative contracts. These financial and physical derivative contracts are primarily used to manage price exposure on our underlying operations. The underlying exposures may be from non-derivative positions such as inventory volumes. Financial derivative contracts may also offset physical derivative contracts, such as forward sales contracts. As of March 31, 2015, and December 31, 2014, the percentages of our derivative contract volume expiring within the next 12 months were approximately 98 percent and 99 percent, respectively.
 
Open Position
Long/(Short)
 
March 31
2015

 
December 31
2014

Commodity
 
 
 
Crude oil, refined products and NGL (millions of barrels)
(23
)
 
(11
)



Credit Risk
Financial instruments potentially exposed to concentrations of credit risk consist primarily of over-the-counter (OTC) derivative contracts and trade receivables.

The credit risk from our OTC derivative contracts, such as forwards and swaps, derives from the counterparty to the transaction. Individual counterparty exposure is managed within predetermined credit limits and includes the use of cash-call margins when appropriate, thereby reducing the risk of significant nonperformance. We also use futures, swaps and option contracts that have a negligible credit risk because these trades are cleared with an exchange clearinghouse and subject to mandatory margin requirements until settled; however, we are exposed to the credit risk of those exchange brokers for receivables arising from daily margin cash calls, as well as for cash deposited to meet initial margin requirements.

Our trade receivables result primarily from the sale of products from, or related to, our refinery operations and reflect a broad national and international customer base, which limits our exposure to concentrations of credit risk. The majority of these receivables have payment terms of 30 days or less. We continually monitor this exposure and the creditworthiness of the counterparties and recognize bad debt expense based on historical write-off experience or specific counterparty collectability. Generally, we do not require collateral to limit the exposure to loss; however, we will sometimes use letters of credit, prepayments, and master netting arrangements to mitigate credit risk with counterparties that both buy from and sell to us, as these agreements permit the amounts owed by us or owed to others to be offset against amounts due us.

Certain of our derivative instruments contain provisions that require us to post collateral if the derivative exposure exceeds a threshold amount. We have contracts with fixed threshold amounts and other contracts with variable threshold amounts that are contingent on our credit rating. The variable threshold amounts typically decline for lower credit ratings, while both the variable and fixed threshold amounts typically revert to zero if our credit ratings fall below investment grade. Cash is the primary collateral in all contracts; however, many contracts also permit us to post letters of credit as collateral.

The aggregate fair values of all derivative instruments with such credit-risk-related contingent features that were in a liability position were not material at March 31, 2015, or December 31, 2014.
Fair Value Measurements
Fair Value Measurements
Fair Value Measurements

Fair Values of Financial Instruments
We used the following methods and assumptions to estimate the fair value of financial instruments:

•
Cash and cash equivalents: The carrying amount reported on the consolidated balance sheet approximates fair value.
•
Accounts and notes receivable: The carrying amount reported on the consolidated balance sheet approximates fair value.
•
Debt: The carrying amount of our floating-rate debt approximates fair value. The fair value of our fixed-rate debt is estimated based on quoted market prices.
•
Commodity swaps: Fair value is estimated based on forward market prices and approximates the exit price at period end. When forward market prices are not available, we estimate fair value using the forward price of a similar commodity, adjusted for the difference in quality or location.
•
Futures: Fair values are based on quoted market prices obtained from the New York Mercantile Exchange, the InterContinental Exchange, or other traded exchanges.
•
Forward-exchange contracts: Fair value is estimated by comparing the contract rate to the forward rate in effect at the end of the reporting period, which approximates the exit price at that date.

We carry certain assets and liabilities at fair value, which we measure at the reporting date using an exit price (i.e., the price that would be received to sell an asset or paid to transfer a liability), and disclose the quality of these fair values based on the valuation inputs used in these measurements under the following hierarchy:

•
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.

We classify the fair value of an asset or liability based on the lowest level of input significant to its measurement; however, the fair value of an asset or liability initially reported as Level 3 will be subsequently reported as Level 2 if the unobservable inputs become inconsequential to its measurement or corroborating market data becomes available. Conversely, an asset or liability initially reported as Level 2 will be subsequently reported as Level 3 if corroborating market data becomes unavailable. We made no material transfers in or out of Level 1 during the three-month periods ended March 31, 2015 and 2014.

Recurring Fair Value Measurements
Financial assets and liabilities recorded at fair value on a recurring basis consist primarily of investments to support nonqualified deferred compensation plans and derivative instruments. The deferred compensation investments are measured at fair value using unadjusted prices available from national securities exchanges; therefore, these assets are categorized as Level 1 in the fair value hierarchy. We value our exchange-traded commodity derivatives using closing prices provided by the exchange as of the balance sheet date, and these are also classified 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. OTC financial swaps and physical commodity forward purchase and sales contracts are generally valued using quotations provided by brokers and price index developers such as Platts and Oil Price Information Service. We corroborate these quotes with market data and classify the resulting fair values as Level 2. In certain less liquid markets or for longer-term contracts, forward prices are not as readily available. In these circumstances, OTC swaps and physical commodity purchase and sales contracts are valued using internally developed methodologies that consider historical relationships among various commodities that result in management’s best estimate of fair value. We classify these contracts as Level 3. Financial OTC and physical commodity options are valued using industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and contractual prices for the underlying instruments, as well as other relevant economic measures. The degree to which these inputs are observable in the forward markets determines whether the options are classified as Level 2 or 3. We use a mid-market pricing convention (the mid-point between bid and ask prices). When appropriate, valuations are adjusted to reflect credit considerations, generally based on available market evidence.

The following tables display the fair value hierarchy for our material financial assets and liabilities either accounted for or disclosed at fair value on a recurring basis. These values are determined by treating each contract as the fundamental unit of account; therefore, derivative assets and liabilities with the same counterparty are shown gross (i.e., without the effect of netting where the legal right of setoff exists) in the hierarchy sections of these tables. These tables also show that our Level 3 activity was not material.

We have master netting arrangements for all of our exchange-cleared derivative instruments, the majority of our OTC derivative instruments, and certain physical commodity forward contracts (primarily pipeline crude oil deliveries). The following tables show the fair value of these contracts on a net basis in the column “Effect of Counterparty Netting,” which is how these also appear on the consolidated balance sheet.

The carrying values and fair values by hierarchy of our material financial instruments and commodity forward contracts, either carried or disclosed at fair value, including any effects of netting derivative assets with liabilities and netting collateral due to right of setoff or master netting agreements, were:

 
Millions of Dollars
 
March 31, 2015
 
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

Cash Collateral Received or Paid, Not Offset on Balance Sheet

 
Level 1

 
Level 2

 
Level 3

Commodity Derivative Assets
 
 
 
 
 
 
 
 
 
 
 
 
Exchange-cleared instruments
$
1,146

 
796

 
—

 
1,942

(1,734
)
(101
)
—

107

—

OTC instruments
—

 
10

 
—

 
10

(6
)
—

—

4

—

Physical forward contracts*
—

 
72

 
1

 
73

—

—

—

73

—

Rabbi trust assets
83

 
—

 
—

 
83

N/A

N/A

—

83

N/A

 
$
1,229

 
878

 
1

 
2,108

(1,740
)
(101
)
—

267

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commodity Derivative Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Exchange-cleared instruments
$
1,159

 
575

 
—

 
1,734

(1,734
)
—

—

—

—

OTC instruments
—

 
12

 
—

 
12

(6
)
—

—

6

—

Physical forward contracts*
—

 
41

 
—

 
41

—

—

—

41

—

Floating-rate debt
50

 
—

 
—

 
50

N/A

N/A

—

50

N/A

Fixed-rate debt, excluding capital leases**
—

 
9,410

 
—

 
9,410

N/A

N/A

(711
)
8,699

N/A

 
$
1,209

 
10,038

 
—

 
11,247

(1,740
)
—

(711
)
8,796


* Physical forward contracts may have a larger value on the balance sheet than disclosed in the fair value hierarchy when the remaining contract term at the reporting date is greater than 12 months and the short-term portion is an asset while the long-term portion is a liability, or vice versa.
** We carry fixed-rate debt on the balance sheet at amortized cost.


 
Millions of Dollars
 
December 31, 2014
 
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

Cash Collateral Received or Paid, Not Offset on Balance Sheet

 
Level 1

 
Level 2

 
Level 3

 
Commodity Derivative Assets
 
 
 
 
 
 
 
 
 
 
 
 
Exchange-cleared instruments
$
2,058

 
1,525

 
—

 
3,583

(3,255
)
(225
)
—

103

—

OTC instruments
—

 
24

 
—

 
24

(14
)
—

—

10

—

Physical forward contracts*
—

 
253

 
7

 
260

(38
)
—

—

222

—

Rabbi trust assets
76

 
—

 
—

 
76

N/A

N/A

—

76

N/A

 
$
2,134

 
1,802

 
7

 
3,943

(3,307
)
(225
)
—

411



 
 
 
 
 
 
 
 
 
 
 
 
 
Commodity Derivative Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Exchange-cleared instruments
$
1,833

 
1,422

 
—

 
3,255

(3,255
)
—

—

—

—

OTC instruments
—

 
29

 
—

 
29

(14
)
—

—

15

—

Physical forward contracts*
—

 
189

 
—

 
189

(38
)
—

—

151

—

Floating-rate debt
68

 
—

 
—

 
68

N/A

N/A

—

68

N/A

Fixed-rate debt, excluding capital leases**
—

 
8,806

 
—

 
8,806

N/A

N/A

(400
)
8,406

N/A

 
$
1,901

 
10,446

 
—

 
12,347

(3,307
)
—

(400
)
8,640


* Physical forward contracts may have a larger value on the balance sheet than disclosed in the fair value hierarchy when the remaining contract term at the reporting date is greater than 12 months and the short-term portion is an asset while the long-term portion is a liability, or vice versa.
** We carry fixed-rate debt on the balance sheet at amortized cost.


The values presented in the preceding tables appear on our balance sheet as follows: for commodity derivative assets and liabilities, see the first table in Note 12—Derivatives and Financial Instruments; rabbi trust assets appear in the “Investments and long-term receivables” line; and floating-rate and fixed-rate debt appear in the “Short-term debt” and “Long-term debt” lines.
 
Employee Benefit Plans
Employee Benefit Plans
Employee Benefit Plans

Pension and Postretirement Plans
The components of net periodic benefit cost for the three months ended March 31, 2015 and 2014, were as follows:
 
 
Millions of Dollars
 
Pension Benefits
 
Other Benefits
 
2015
 
2014
 
2015

 
2014

 
U.S.

 
Int’l.

 
U.S.

 
Int’l.

 
 
 
 
Components of Net Periodic Benefit Cost
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
31

 
10

 
30

 
10

 
2

 
2

Interest cost
27

 
7

 
27

 
9

 
2

 
2

Expected return on plan assets
(35
)
 
(10
)
 
(36
)
 
(9
)
 
—

 
—

Amortization of prior service cost (credit)
1

 
—

 
1

 
(1
)
 
—

 
—

Recognized net actuarial loss (gain)
19

 
4

 
10

 
3

 
—

 
(1
)
Settlements
1

 
—

 
—

 
—

 
—

 
—

Net periodic benefit cost
$
44


11


32


12


4


3



During the first three months of 2015, we contributed $3 million to our U.S. plans and $14 million to our international plans. We currently expect to make additional contributions of approximately $60 million to our U.S. plans and $45 million to our international plans during the remainder of 2015.
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss)

The following table depicts changes in accumulated other comprehensive income (loss) by component, as well as detail on reclassifications out of accumulated other comprehensive income (loss):
 
 
Millions of Dollars
 
Defined Benefit Plans

 
Foreign Currency Translation

 
Hedging

 
Accumulated Other Comprehensive Income (Loss)

 
 
 
 
 
 
 
 
December 31, 2013
$
(404
)
 
443

 
(2
)
 
37

Other comprehensive income before reclassifications
2

 
30

 
—

 
32

Amounts reclassified from accumulated other comprehensive income (loss)*
 
 
 
 
 
 
 
Amortization of defined benefit plan items**
 
 
 
 
 
 
 
Actuarial losses
8

 
—

 
—

 
8

Net current period other comprehensive income
10

 
30

 
—

 
40

March 31, 2014
$
(394
)
 
473

 
(2
)
 
77

 
 
 
 
 
 
 
 
December 31, 2014
$
(696
)
 
167

 
(2
)
 
(531
)
Other comprehensive income (loss) before reclassifications
3

 
(188
)
 
—

 
(185
)
Amounts reclassified from accumulated other comprehensive income (loss)*
 
 
 
 
 
 


Amortization of defined benefit plan items**
 
 
 
 
 
 
 
Actuarial losses and settlements
22

 
—

 
—

 
22

Net current period other comprehensive income (loss)
25

 
(188
)
 
—

 
(163
)
March 31, 2015
$
(671
)
 
(21
)
 
(2
)
 
(694
)
* There were no significant reclassifications related to foreign currency translation or hedging.
** These accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit cost (see Note 14—Employee Benefit Plans, for additional information).
Cash Flow Information
Cash Flow Information
Cash Flow Information

PSPI Noncash Stock Exchange
As discussed more fully in Note 5—Assets Held for Sale or Sold, in February 2014 we completed the exchange of the stock of PSPI for shares of Phillips 66 common stock owned by the other party to the transaction. The noncash portion of the net assets surrendered by us in the exchange was $204 million, and we received approximately 17.4 million shares of our common stock, with a fair value at the time of the exchange of $1.35 billion.
Related Party Transactions
Related Party Transactions
Related Party Transactions

Significant transactions with related parties were:

 
Millions of Dollars
 
Three Months Ended
March 31
 
2015

 
2014

 
 
 
 
Operating revenues and other income (a)
$
617

 
2,067

Purchases (b)
1,948

 
3,991

Operating expenses and selling, general and administrative expenses (c)
31

 
35

Interest expense (d)
2

 
2



In December 2014, we completed the sale of our interest in the Malaysian Refining Company Sdn. Bdh. (MRC). Accordingly, sales of crude oil to MRC and purchases of refined products from MRC are only included in the 2014 period in the table above.

(a)
NGL and other petrochemical feedstocks, along with solvents, were sold to CPChem, and gas oil and hydrogen feedstocks were sold to Excel. Certain feedstocks and intermediate products were sold to WRB. We also acted as agent for WRB in supplying crude oil and other feedstocks, wherein the transactional amounts did not impact operating revenues. In addition, we charged several of our affiliates, including CPChem and MSLP, for the use of common facilities, such as steam generators, waste and water treaters, and warehouse facilities.

(b)
We purchased refined products from WRB. We also acted as agent for WRB in distributing asphalt and solvents, wherein the transactional amounts did not impact purchases. We purchased natural gas and NGL from DCP Midstream, LLC (DCP Midstream) and CPChem for use in our refinery processes and other feedstocks from various affiliates. We also paid fees to various pipeline equity companies for transporting finished refined products. In addition, we paid a price upgrade to MSLP for heavy crude processing. 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.

(d)
We incurred interest expense on a note payable to MSLP.
Income Taxes
Income Taxes
Income Taxes

Our effective tax rate for the first quarter of 2015 was 28 percent, compared with 33 percent for the corresponding period of 2014. The decrease in the effective tax rate for the first quarter of 2015, compared with the first quarter of 2014, was primarily attributable to a favorable tax settlement in the United Kingdom and the recognition of a nontaxable gain associated with the sale of ICHP. For additional information on the nontaxable gain, see Note 5—Assets Held for Sale or Sold. The effective tax rate varies from the federal statutory tax rate of 35 percent primarily as a result of state tax expense, offset by the manufacturing deduction and foreign operations.
Phillips 66 Partners LP
Phillips 66 Partners LP
Phillips 66 Partners LP

In 2013, we formed Phillips 66 Partners, a master limited partnership, to own, operate, develop and acquire primarily fee-based crude oil, refined petroleum product and NGL pipelines and terminals, as well as other transportation and midstream assets.
On March 2, 2015, we contributed to Phillips 66 Partners our equity interests in Explorer Pipeline Company (19.5 percent), DCP Sand Hills Pipeline, LLC (33.3 percent), and DCP Southern Hills Pipeline, LLC (33.3 percent). We account for each of these investments under the equity method of accounting. The total consideration for the transaction was $1,010 million, which consisted of $880 million in cash and the issuance of common units and general partner units to us with an aggregate fair value of $130 million.
On February 23, 2015, Phillips 66 Partners completed a public offering of 5,250,000 common units representing limited partner interests, at a public offering price of $75.50 per unit. The net proceeds at closing were $384 million. Additionally, Phillips 66 Partners closed a public offering of $1.1 billion aggregate principal amount of senior notes. For additional information about the senior notes, see Note 9—Debt.
Phillips 66 Partners used the net proceeds of both offerings to fund the acquisition transaction discussed above and repay existing borrowings from a subsidiary of Phillips 66. The remainder is expected to be used for capital expenditures and for general partnership purposes.
At March 31, 2015, we owned a 69 percent limited partner interest and a 2 percent general partner interest in Phillips 66 Partners, while the public owned a 29 percent limited partner interest. We consolidate Phillips 66 Partners because we control the partnership through our general partner interest (see Note 2—Variable Interest Entities (VIEs), for additional information). The public’s ownership interest in Phillip’s 66 Partners was $801 million at March 31, 2015, and is reflected as a noncontrolling interest in our financial statements. The most significant assets of Phillips 66 Partners that are available to settle only its obligations were equity investments of $801 million and net PP&E of $465 million at March 31, 2015.
New Accounting Standards
New Accounting Standards
New Accounting Standards

In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-03, “Interest - Imputation of Interest (Subtopic 835-30) - Simplifying the Presentation of Debt Issuance Costs.” This ASU requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 is effective for annual and quarterly reporting periods of public entities beginning after December 15, 2015, applied on a retrospective basis. Early adoption is permitted for financial statements that have not been previously issued. We currently have debt issuance costs included as deferred charges in our balance sheet, which will be reclassified as a reduction of debt when we adopt ASU 2015-03.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” The new standard converged guidance on recognizing revenues in contracts with customers under accounting principles generally accepted in the United States and International Financial Reporting Standards. This ASU is intended to improve comparability of revenue recognition practices across entities, industries, jurisdictions and capital markets. ASU 2014-09 is effective for annual and quarterly reporting periods of public entities beginning after December 15, 2016. Early application for public entities is not permitted. In April 2015, the FASB issued for comment an exposure draft, “Revenue Recognition - Deferral of the Effective Date of ASU 2014-09,” which will delay implementation for one year. We are currently evaluating the provisions of ASU 2014-09 and assessing the impact, if any, it may have on our financial position and results of operations.
Condensed Consolidating Financial Information
Condensed Consolidating Financial Information

$7.5 billion of our senior notes were issued by Phillips 66, and are guaranteed by Phillips 66 Company, a 100-percent-owned subsidiary. Phillips 66 Company has fully and unconditionally guaranteed the payment obligations of Phillips 66 with respect to these debt securities. The following condensed consolidating financial information presents the results of operations, financial position and cash flows for:

•
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.

This condensed consolidating financial information should be read in conjunction with the accompanying consolidated financial statements and notes. The 2014 quarterly condensed consolidating financial information was revised to eliminate intra-column lending transactions, to realign interest revenue from certain inter-column lending activities to the appropriate column, and to make the associated adjustments required to equity earnings and investments. These changes did not impact the total consolidated amounts.
 
 
 
Millions of Dollars
 
Three Months Ended March 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
$
—

15,587

7,191

—

22,778

Equity in earnings of affiliates
1,052

722

49

(1,367
)
456

Net gain on dispositions
—

(5
)
127

—

122

Other income
—

59

11

—

70

Intercompany revenues
—

140

2,149

(2,289
)
—

Total Revenues and Other Income
1,052

16,503

9,527

(3,656
)
23,426

 
 
 
 
 
 
Costs and Expenses
 
 
 
 
 
Purchased crude oil and products
—

12,277

6,673

(2,255
)
16,695

Operating expenses
4

874

230

(14
)
1,094

Selling, general and administrative expenses
2

292

101

(1
)
394

Depreciation and amortization
—

194

59

—

253

Impairments
—

—

—

—

—

Taxes other than income taxes
—

1,381

2,081

—

3,462

Accretion on discounted liabilities
—

4

1

—

5

Interest and debt expense
93

6

6

(19
)
86

Foreign currency transaction losses
—

—

49

—

49

Total Costs and Expenses
99

15,028

9,200

(2,289
)
22,038

Income from continuing operations before income taxes
953

1,475

327

(1,367
)
1,388

Provision (benefit) for income taxes
(34
)
423

2

—

391

Income from Continuing Operations
987

1,052

325

(1,367
)
997

Income from discontinued operations
—

—

—

—

—

Net income
987

1,052

325

(1,367
)
997

Less: net income attributable to noncontrolling interests
—

—

10

—

10

Net Income Attributable to Phillips 66
$
987

1,052

315

(1,367
)
987

 
 
 
 
 
 
Comprehensive Income
$
824

889

149

(1,028
)
834



 
Millions of Dollars
 
Three Months Ended March 31, 2014
Statement of Income
Phillips 66

Phillips 66 Company

All Other Subsidiaries

Consolidating Adjustments

Total Consolidated

Revenues and Other Income
 
 
 
 
 
Sales and other operating revenues
$
—

27,239

13,044

—

40,283

Equity in earnings of affiliates
922

738

178

(1,060
)
778

Net gain on dispositions
—

—

7

—

7

Other income
—

22

9

—

31

Intercompany revenues
—

376

4,603

(4,979
)
—

Total Revenues and Other Income
922

28,375

17,841

(6,039
)
41,099

 
 
 
 
 
 
Costs and Expenses
 
 
 
 
 
Purchased crude oil and products
—

24,384

14,938

(4,941
)
34,381

Operating expenses
2

893

201

(6
)
1,090

Selling, general and administrative expenses
3

286

138

(25
)
402

Depreciation and amortization
—

180

54

—

234

Impairments
—

1

—

—

1

Taxes other than income taxes
—

1,301

2,337

—

3,638

Accretion on discounted liabilities
—

5

1

—

6

Interest and debt expense
66

4

5

(7
)
68

Foreign currency transaction losses (gains)
—

—

(19
)
—

(19
)
Total Costs and Expenses
71

27,054

17,655

(4,979
)
39,801

Income from continuing operations before income taxes
851

1,321

186

(1,060
)
1,298

Provision (benefit) for income taxes
(25
)
399

52

—

426

Income from Continuing Operations
876

922

134

(1,060
)
872

Income from discontinued operations*
696

—

10

—

706

Net income
1,572

922

144

(1,060
)
1,578

Less: net income attributable to noncontrolling interests
—

—

6

—

6

Net Income Attributable to Phillips 66
$
1,572

922

138

(1,060
)
1,572

 
 
 
 
 
 
Comprehensive Income
$
1,612

962

176

(1,132
)
1,618

* Net of provision for income taxes on discontinued operations:
$
—

—

5

—

5




 
Millions of Dollars
 
March 31, 2015
Balance Sheet
Phillips 66

Phillips 66 Company

All Other Subsidiaries

Consolidating Adjustments

Total Consolidated

Assets
 
 
 
 
 
Cash and cash equivalents
$
—

1,686

3,704

—

5,390

Accounts and notes receivable
26

3,761

2,424

(474
)
5,737

Inventories
—

2,637

1,529

—

4,166

Prepaid expenses and other current assets
9

499

343

—

851

Total Current Assets
35

8,583

8,000

(474
)
16,144

Investments and long-term receivables
31,029

20,428

5,332

(46,260
)
10,529

Net properties, plants and equipment
—

12,369

5,549

—

17,918

Goodwill
—

3,040

234

—

3,274

Intangibles
—

694

188

—

882

Other assets
58

153

123

(4
)
330

Total Assets
$
31,122

45,267

19,426

(46,738
)
49,077

 
 
 
 
 
 
Liabilities and Equity
 
 
 
 
 
Accounts payable
$
—

4,659

3,508

(474
)
7,693

Short-term debt
—

20

17

(2
)
35

Accrued income and other taxes
—

612

500

—

1,112

Employee benefit obligations
—

258

25

—

283

Other accruals
143

236

362

—

741

Total Current Liabilities
143

5,785

4,412

(476
)
9,864

Long-term debt
7,456

162

1,294

2

8,914

Asset retirement obligations and accrued environmental costs
—

469

181

—

650

Deferred income taxes
—

4,289

1,198

(4
)
5,483

Employee benefit obligations
—

1,087

205

—

1,292

Other liabilities and deferred credits
1,734

2,493

2,067

(6,015
)
279

Total Liabilities
9,333

14,285

9,357

(6,493
)
26,482

Common stock
12,433

25,404

8,059

(33,463
)
12,433

Retained earnings
10,050

6,272

1,344

(7,645
)
10,021

Accumulated other comprehensive income (loss)
(694
)
(694
)
(169
)
863

(694
)
Noncontrolling interests
—

—

835

—

835

Total Liabilities and Equity
$
31,122

45,267

19,426

(46,738
)
49,077



 
Millions of Dollars
 
December 31, 2014
Balance Sheet
Phillips 66

Phillips 66 Company

All Other Subsidiaries

Consolidating Adjustments

Total Consolidated

Assets
 
 
 
 
 
Cash and cash equivalents
$
—

2,045

3,162

—

5,207

Accounts and notes receivable
14

5,069

3,274

(1,102
)
7,255

Inventories
—

2,026

1,371

—

3,397

Prepaid expenses and other current assets
9

429

399

—

837

Total Current Assets
23

9,569

8,206

(1,102
)
16,696

Investments and long-term receivables
30,141

18,896

4,631

(43,479
)
10,189

Net properties, plants and equipment
—

12,267

5,079

—

17,346

Goodwill
—

3,040

234

—

3,274

Intangibles
—

694

206

—

900

Other assets
60

159

121

(4
)
336

Total Assets
$
30,224

44,625

18,477

(44,585
)
48,741

 
 
 
 
 
 
Liabilities and Equity
 
 
 
 
 
Accounts payable
$
—

5,618

3,548

(1,102
)
8,064

Short-term debt
798

26

18

—

842

Accrued income and other taxes
—

356

522

—

878

Employee benefit obligations
—

409

53

—

462

Other accruals
65

242

541

—

848

Total Current Liabilities
863

6,651

4,682

(1,102
)
11,094

Long-term debt
7,457

159

226

—

7,842

Asset retirement obligations and accrued environmental costs
—

494

189

—

683

Deferred income taxes
—

4,240

1,255

(4
)
5,491

Employee benefit obligations
—

1,074

231

—

1,305

Other liabilities and deferred credits
285

1,919

2,126

(4,041
)
289

Total Liabilities
8,605

14,537

8,709

(5,147
)
26,704

Common stock
12,812

25,405

8,240

(33,645
)
12,812

Retained earnings
9,338

5,214

1,074

(6,317
)
9,309

Accumulated other comprehensive income
(531
)
(531
)
7

524

(531
)
Noncontrolling interests
—

—

447

—

447

Total Liabilities and Equity
$
30,224

44,625

18,477

(44,585
)
48,741




 
Millions of Dollars
 
Three Months Ended March 31, 2015
Statement of Cash Flows
Phillips 66

Phillips 66 Company

All Other Subsidiaries

Consolidating Adjustments

Total Consolidated

Cash Flows From Operating Activities
 
 
 
 
 
Net cash provided by continuing operating activities
$
52

60

1,298

(58
)
1,352

Net cash provided by discontinued operations
—

—

—

—

—

Net Cash Provided by Operating Activities
52

60

1,298

(58
)
1,352

 
 
 
 
 
 
Cash Flows From Investing Activities
 
 
 
 
 
Capital expenditures and investments*
—

(425
)
(1,490
)
834

(1,081
)
Proceeds from asset dispositions
—

881

(10
)
(880
)
(9
)
Intercompany lending activities
1,449

(833
)
(616
)
—

—

Advances/loans—related parties
—

(50
)
—

—

(50
)
Other
—

12

90

—

102

Net cash provided by (used in) continuing investing activities
1,449

(415
)
(2,026
)
(46
)
(1,038
)
Net cash used in discontinued operations
—

—

—

—

—

Net Cash Provided by (Used in) Investing Activities
1,449

(415
)
(2,026
)
(46
)
(1,038
)
 
 
 
 
 
 
Cash Flows From Financing Activities
 
 
 
 
 
Issuance of debt
—

—

1,169

—

1,169

Repayment of debt
(800
)
(4
)
(91
)
—

(895
)
Issuance of common stock
(25
)
—

—

—

(25
)
Repurchase of common stock
(399
)
—

—

—

(399
)
Dividends paid on common stock
(272
)
—

(39
)
39

(272
)
Distributions to controlling interests
—

—

(165
)
165

—

Distributions to noncontrolling interests
—

—

(6
)
—

(6
)
Net proceeds from issuance of Phillips 66 Partners LP common units
—

—

384

—

384

Other*
(5
)
—

91

(100
)
(14
)
Net cash provided by (used in) continuing financing activities
(1,501
)
(4
)
1,343

104

(58
)
Net cash provided by (used in) discontinued operations
—

—

—

—

—

Net Cash Provided by (Used in) Financing Activities
(1,501
)
(4
)
1,343

104

(58
)
 
 
 
 
 
 
Effect of Exchange Rate Changes on Cash and Cash Equivalents
—

—

(73
)
—

(73
)
 
 
 
 
 
 
Net Change in Cash and Cash Equivalents
—

(359
)
542

—

183

Cash and cash equivalents at beginning of period
—

2,045

3,162

—

5,207

Cash and Cash Equivalents at End of Period
$
—

1,686

3,704

—

5,390

* Includes intercompany capital contributions.

 
Millions of Dollars
 
Three Months Ended March 31, 2014
Statement of Cash Flows
Phillips 66

Phillips 66 Company

All Other Subsidiaries

Consolidating Adjustments

Total Consolidated

Cash Flows From Operating Activities
 
 
 
 
 
Net cash provided by continuing operating activities
$
52

10

1,439

(105
)
1,396

Net cash provided by discontinued operations
—

—

2

—

2

Net Cash Provided by Operating Activities
52

10

1,441

(105
)
1,398

 
 
 
 
 
 
Cash Flows From Investing Activities
 
 
 
 
 
Capital expenditures and investments*
—

(840
)
(450
)
718

(572
)
Proceeds from asset dispositions
—

871

36

(400
)
507

Intercompany lending activities
1,291

(66
)
(1,225
)
—

—

Other
—

(38
)
51

—

13

Net cash provided by (used in) continuing investing activities
1,291

(73
)
(1,588
)
318

(52
)
Net cash used in discontinued operations
—

—

(34
)
—

(34
)
Net Cash Provided by (Used in) Investing Activities
1,291

(73
)
(1,622
)
318

(86
)
 
 
 
 
 
 
Cash Flows From Financing Activities
 
 
 
 
 
Repayment of debt
—

(3
)
(5
)
—

(8
)
Issuance of common stock
(20
)
—

—

—

(20
)
Repurchase of common stock
(640
)
—

—

—

(640
)
Share exchange—PSPI transaction
(450
)
—

—

—

(450
)
Dividends paid on common stock
(229
)
—

(93
)
93

(229
)
Distributions to controlling interests
—

—

(274
)
274

—

Distributions to noncontrolling interests
—

—

(4
)
—

(4
)
Other*
(4
)
—

580

(580
)
(4
)
Net cash provided by (used in) continuing financing activities
(1,343
)
(3
)
204

(213
)
(1,355
)
Net cash provided by (used in) discontinued operations
—

—

—

—

—

Net Cash Provided by (Used in) Financing Activities
(1,343
)
(3
)
204

(213
)
(1,355
)
 
 
 
 
 
 
Effect of Exchange Rate Changes on Cash and Cash Equivalents
—

—

(31
)
—

(31
)
 
 
 
 
 
 
Net Change in Cash and Cash Equivalents
—

(66
)
(8
)
—

(74
)
Cash and cash equivalents at beginning of period
—

2,162

3,238

—

5,400

Cash and Cash Equivalents at End of Period
$
—

2,096

3,230

—

5,326

* Includes intercompany capital contributions.
Interim Financial Information Interim Financial Information (Policies)
Earnings Per Share 
The numerator of basic earnings per share (EPS) is net income attributable to Phillips 66, reduced by noncancelable dividends paid on unvested share-based employee awards during the vesting period (participating securities). The denominator of basic EPS is the sum of the daily weighted-average number of common shares outstanding during the periods presented and fully vested stock and unit awards that have not yet been issued as common stock. The numerator of diluted EPS is also based on net income attributable to Phillips 66, which is reduced only by dividend equivalents paid on participating securities for which the dividends are more dilutive than the participation of the awards in the earnings of the periods presented. To the extent unvested stock, unit or option awards and vested unexercised stock options are dilutive, they are included with the weighted-average common shares outstanding in the denominator. Treasury stock is excluded from the denominator in both basic and diluted EPS.
Commitments and Contingencies 
In the case of all known contingencies (other than those related to income taxes), we accrue a liability when the loss is probable and the amount is reasonably estimable. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. We do not reduce these liabilities for potential insurance or third-party recoveries. If applicable, we record receivables for probable insurance or other third-party recoveries. In the case of income-tax-related contingencies, we use a cumulative probability-weighted loss accrual in cases where sustaining a tax position is less than certain.

Inventories (Tables)
Summary of Inventories
Inventories consisted of the following:

 
Millions of Dollars
 
March 31
2015

 
December 31
2014

 
 
 
 
Crude oil and petroleum products
$
3,911

 
3,141

Materials and supplies
255

 
256

 
$
4,166

 
3,397

Investments, Loans and Long-Term Receivables (Tables)
Summary of Financial Information
Summarized 100 percent financial information for WRB Refining LP (WRB) and Chevron Phillips Chemical Company LLC (CPChem) were as follows:
 
 
Millions of Dollars
 
Three Months Ended
March 31
 
2015

 
2014

 
 
 
 
Revenues
$
4,906

 
7,998

Income before income taxes
692

 
1,124

Net income
672

 
1,101

Properties, Plants and Equipment (Tables)
Properties, Plants and Equipment with Associated Accumulated Depreciation and Amortization
Our investment in PP&E, with the associated accumulated depreciation and amortization (Accum. D&A), was:

 
Millions of Dollars
 
March 31, 2015
 
December 31, 2014
 
Gross
PP&E

 
Accum.
D&A

 
Net
PP&E

 
Gross
PP&E

 
Accum.
D&A

 
Net
PP&E

 
 
 
 
 
 
 
 
 
 
 
 
Midstream
$
5,337

 
1,209

 
4,128

 
4,726

 
1,185

 
3,541

Chemicals
—

 
—

 
—

 
—

 
—

 
—

Refining
20,126

 
7,558

 
12,568

 
19,951

 
7,424

 
12,527

Marketing and Specialties
1,410

 
702

 
708

 
1,490

 
738

 
752

Corporate and Other
983

 
469

 
514

 
978

 
452

 
526

 
$
27,856

 
9,938

 
17,918

 
27,145

 
9,799

 
17,346

Earnings per Share (Tables)
Reconciliation of Basic and Diluted Earnings Per Share
 
Three Months Ended
March 31
 
2015
 
2014
 
Basic

Diluted

 
Basic

Diluted

Amounts attributed to Phillips 66 Common Stockholders (millions):
 
 
 
 
 
Income from continuing operations attributable to Phillips 66
$
987

987

 
866

866

Income allocated to participating securities
(2
)
(1
)
 
(1
)
—

Income from continuing operations available to common stockholders
985

986

 
865

866

Discontinued operations
—

—

 
706

706

Net Income available to common stockholders
$
985

986

 
1,571

1,572

 
 
 
 
 
 
Weighted-average common shares outstanding (thousands):
543,469

548,200

 
580,027

584,053

Effect of stock-based compensation
4,731

4,137

 
4,026

5,522

Weighted-average common shares outstanding—EPS
548,200

552,337

 
584,053

589,575

 
 
 
 
 
 
Earnings Per Share of Common Stock (dollars):
 
 
 
 
 
Income from continuing operations attributable to Phillips 66
$
1.80

1.79

 
1.48

1.47

Discontinued operations
—

—

 
1.21

1.20

Earnings Per Share
$
1.80

1.79

 
2.69

2.67

Derivatives and Financial Instruments (Tables)
Summary of Fair Value of Commodity Derivative Assets and Liabilities and Gains (Losses) from Derivative Contracts 
The following table indicates the balance sheet line items that include the fair values of commodity derivative assets and liabilities presented net (i.e., commodity derivative assets and liabilities with the same counterparty are netted where the right of setoff exists); however, the balances in the following table are presented gross. For information on the impact of counterparty netting and collateral netting, see Note 13—Fair Value Measurements.

 
Millions of Dollars
 
March 31
2015

 
December 31
2014

Assets
 
 
 
Accounts and notes receivable
$
—

 
(1
)
Prepaid expenses and other current assets
1,989

 
3,839

Other assets
36

 
29

Liabilities
 
 
 
Other accruals
1,776

 
3,472

Other liabilities and deferred credits
11

 
1

Hedge accounting has not been used for any item in the table.


The gains (losses) incurred from commodity derivatives, and the line items where they appear on our consolidated statement of income, were:
 
 
Millions of Dollars
 
Three Months Ended
March 31
 
2015

 
2014

 
 
 
 
Sales and other operating revenues
$
(31
)
 
57

Other income
43

 
14

Purchased crude oil and products
20

 
2

Hedge accounting has not been used for any item in the table.
Summary of Material Net Exposures and Notional Amount of Derivative Contracts 
 
Open Position
Long/(Short)
 
March 31
2015

 
December 31
2014

Commodity
 
 
 
Crude oil, refined products and NGL (millions of barrels)
(23
)
 
(11
)
Fair Value Measurements (Tables)
Fair Value Hierarchy for Material Financial Instruments and Derivative Assets and Liabilities, Including the Effect of Counterparty Netting
The carrying values and fair values by hierarchy of our material financial instruments and commodity forward contracts, either carried or disclosed at fair value, including any effects of netting derivative assets with liabilities and netting collateral due to right of setoff or master netting agreements, were:

 
Millions of Dollars
 
March 31, 2015
 
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

Cash Collateral Received or Paid, Not Offset on Balance Sheet

 
Level 1

 
Level 2

 
Level 3

Commodity Derivative Assets
 
 
 
 
 
 
 
 
 
 
 
 
Exchange-cleared instruments
$
1,146

 
796

 
—

 
1,942

(1,734
)
(101
)
—

107

—

OTC instruments
—

 
10

 
—

 
10

(6
)
—

—

4

—

Physical forward contracts*
—

 
72

 
1

 
73

—

—

—

73

—

Rabbi trust assets
83

 
—

 
—

 
83

N/A

N/A

—

83

N/A

 
$
1,229

 
878

 
1

 
2,108

(1,740
)
(101
)
—

267

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commodity Derivative Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Exchange-cleared instruments
$
1,159

 
575

 
—

 
1,734

(1,734
)
—

—

—

—

OTC instruments
—

 
12

 
—

 
12

(6
)
—

—

6

—

Physical forward contracts*
—

 
41

 
—

 
41

—

—

—

41

—

Floating-rate debt
50

 
—

 
—

 
50

N/A

N/A

—

50

N/A

Fixed-rate debt, excluding capital leases**
—

 
9,410

 
—

 
9,410

N/A

N/A

(711
)
8,699

N/A

 
$
1,209

 
10,038

 
—

 
11,247

(1,740
)
—

(711
)
8,796


* Physical forward contracts may have a larger value on the balance sheet than disclosed in the fair value hierarchy when the remaining contract term at the reporting date is greater than 12 months and the short-term portion is an asset while the long-term portion is a liability, or vice versa.
** We carry fixed-rate debt on the balance sheet at amortized cost.


 
Millions of Dollars
 
December 31, 2014
 
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

Cash Collateral Received or Paid, Not Offset on Balance Sheet

 
Level 1

 
Level 2

 
Level 3

 
Commodity Derivative Assets
 
 
 
 
 
 
 
 
 
 
 
 
Exchange-cleared instruments
$
2,058

 
1,525

 
—

 
3,583

(3,255
)
(225
)
—

103

—

OTC instruments
—

 
24

 
—

 
24

(14
)
—

—

10

—

Physical forward contracts*
—

 
253

 
7

 
260

(38
)
—

—

222

—

Rabbi trust assets
76

 
—

 
—

 
76

N/A

N/A

—

76

N/A

 
$
2,134

 
1,802

 
7

 
3,943

(3,307
)
(225
)
—

411



 
 
 
 
 
 
 
 
 
 
 
 
 
Commodity Derivative Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Exchange-cleared instruments
$
1,833

 
1,422

 
—

 
3,255

(3,255
)
—

—

—

—

OTC instruments
—

 
29

 
—

 
29

(14
)
—

—

15

—

Physical forward contracts*
—

 
189

 
—

 
189

(38
)
—

—

151

—

Floating-rate debt
68

 
—

 
—

 
68

N/A

N/A

—

68

N/A

Fixed-rate debt, excluding capital leases**
—

 
8,806

 
—

 
8,806

N/A

N/A

(400
)
8,406

N/A

 
$
1,901

 
10,446

 
—

 
12,347

(3,307
)
—

(400
)
8,640


* Physical forward contracts may have a larger value on the balance sheet than disclosed in the fair value hierarchy when the remaining contract term at the reporting date is greater than 12 months and the short-term portion is an asset while the long-term portion is a liability, or vice versa.
** We carry fixed-rate debt on the balance sheet at amortized cost.

Employee Benefit Plans (Tables)
Components of Net Periodic Benefit Cost
The components of net periodic benefit cost for the three months ended March 31, 2015 and 2014, were as follows:
 
 
Millions of Dollars
 
Pension Benefits
 
Other Benefits
 
2015
 
2014
 
2015

 
2014

 
U.S.

 
Int’l.

 
U.S.

 
Int’l.

 
 
 
 
Components of Net Periodic Benefit Cost
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
31

 
10

 
30

 
10

 
2

 
2

Interest cost
27

 
7

 
27

 
9

 
2

 
2

Expected return on plan assets
(35
)
 
(10
)
 
(36
)
 
(9
)
 
—

 
—

Amortization of prior service cost (credit)
1

 
—

 
1

 
(1
)
 
—

 
—

Recognized net actuarial loss (gain)
19

 
4

 
10

 
3

 
—

 
(1
)
Settlements
1

 
—

 
—

 
—

 
—

 
—

Net periodic benefit cost
$
44


11


32


12


4


3

Accumulated Other Comprehensive Income (Loss) (Tables)
Summary of Changes in and Reclassifications Out of Accumulated Other Comprehensive Income (Loss) by Component
The following table depicts changes in accumulated other comprehensive income (loss) by component, as well as detail on reclassifications out of accumulated other comprehensive income (loss):
 
 
Millions of Dollars
 
Defined Benefit Plans

 
Foreign Currency Translation

 
Hedging

 
Accumulated Other Comprehensive Income (Loss)

 
 
 
 
 
 
 
 
December 31, 2013
$
(404
)
 
443

 
(2
)
 
37

Other comprehensive income before reclassifications
2

 
30

 
—

 
32

Amounts reclassified from accumulated other comprehensive income (loss)*
 
 
 
 
 
 
 
Amortization of defined benefit plan items**
 
 
 
 
 
 
 
Actuarial losses
8

 
—

 
—

 
8

Net current period other comprehensive income
10

 
30

 
—

 
40

March 31, 2014
$
(394
)
 
473

 
(2
)
 
77

 
 
 
 
 
 
 
 
December 31, 2014
$
(696
)
 
167

 
(2
)
 
(531
)
Other comprehensive income (loss) before reclassifications
3

 
(188
)
 
—

 
(185
)
Amounts reclassified from accumulated other comprehensive income (loss)*
 
 
 
 
 
 


Amortization of defined benefit plan items**
 
 
 
 
 
 
 
Actuarial losses and settlements
22

 
—

 
—

 
22

Net current period other comprehensive income (loss)
25

 
(188
)
 
—

 
(163
)
March 31, 2015
$
(671
)
 
(21
)
 
(2
)
 
(694
)
* There were no significant reclassifications related to foreign currency translation or hedging.
** These accumulated other comprehensive income (loss) components are included in the computation of net periodic benefit cost (see Note 14—Employee Benefit Plans, for additional information).
Related Party Transactions (Tables)
Significant Transactions with Related Parties
Significant transactions with related parties were:

 
Millions of Dollars
 
Three Months Ended
March 31
 
2015

 
2014

 
 
 
 
Operating revenues and other income (a)
$
617

 
2,067

Purchases (b)
1,948

 
3,991

Operating expenses and selling, general and administrative expenses (c)
31

 
35

Interest expense (d)
2

 
2



In December 2014, we completed the sale of our interest in the Malaysian Refining Company Sdn. Bdh. (MRC). Accordingly, sales of crude oil to MRC and purchases of refined products from MRC are only included in the 2014 period in the table above.

(a)
NGL and other petrochemical feedstocks, along with solvents, were sold to CPChem, and gas oil and hydrogen feedstocks were sold to Excel. Certain feedstocks and intermediate products were sold to WRB. We also acted as agent for WRB in supplying crude oil and other feedstocks, wherein the transactional amounts did not impact operating revenues. In addition, we charged several of our affiliates, including CPChem and MSLP, for the use of common facilities, such as steam generators, waste and water treaters, and warehouse facilities.

(b)
We purchased refined products from WRB. We also acted as agent for WRB in distributing asphalt and solvents, wherein the transactional amounts did not impact purchases. We purchased natural gas and NGL from DCP Midstream, LLC (DCP Midstream) and CPChem for use in our refinery processes and other feedstocks from various affiliates. We also paid fees to various pipeline equity companies for transporting finished refined products. In addition, we paid a price upgrade to MSLP for heavy crude processing. 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.

(d)
We incurred interest expense on a note payable to MSLP.
Condensed Consolidating Financial Information (Tables)
Condensed Consolidating Statement of Income 
 
 
 
Millions of Dollars
 
Three Months Ended March 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
$
—

15,587

7,191

—

22,778

Equity in earnings of affiliates
1,052

722

49

(1,367
)
456

Net gain on dispositions
—

(5
)
127

—

122

Other income
—

59

11

—

70

Intercompany revenues
—

140

2,149

(2,289
)
—

Total Revenues and Other Income
1,052

16,503

9,527

(3,656
)
23,426

 
 
 
 
 
 
Costs and Expenses
 
 
 
 
 
Purchased crude oil and products
—

12,277

6,673

(2,255
)
16,695

Operating expenses
4

874

230

(14
)
1,094

Selling, general and administrative expenses
2

292

101

(1
)
394

Depreciation and amortization
—

194

59

—

253

Impairments
—

—

—

—

—

Taxes other than income taxes
—

1,381

2,081

—

3,462

Accretion on discounted liabilities
—

4

1

—

5

Interest and debt expense
93

6

6

(19
)
86

Foreign currency transaction losses
—

—

49

—

49

Total Costs and Expenses
99

15,028

9,200

(2,289
)
22,038

Income from continuing operations before income taxes
953

1,475

327

(1,367
)
1,388

Provision (benefit) for income taxes
(34
)
423

2

—

391

Income from Continuing Operations
987

1,052

325

(1,367
)
997

Income from discontinued operations
—

—

—

—

—

Net income
987

1,052

325

(1,367
)
997

Less: net income attributable to noncontrolling interests
—

—

10

—

10

Net Income Attributable to Phillips 66
$
987

1,052

315

(1,367
)
987

 
 
 
 
 
 
Comprehensive Income
$
824

889

149

(1,028
)
834



 
Millions of Dollars
 
Three Months Ended March 31, 2014
Statement of Income
Phillips 66

Phillips 66 Company

All Other Subsidiaries

Consolidating Adjustments

Total Consolidated

Revenues and Other Income
 
 
 
 
 
Sales and other operating revenues
$
—

27,239

13,044

—

40,283

Equity in earnings of affiliates
922

738

178

(1,060
)
778

Net gain on dispositions
—

—

7

—

7

Other income
—

22

9

—

31

Intercompany revenues
—

376

4,603

(4,979
)
—

Total Revenues and Other Income
922

28,375

17,841

(6,039
)
41,099

 
 
 
 
 
 
Costs and Expenses
 
 
 
 
 
Purchased crude oil and products
—

24,384

14,938

(4,941
)
34,381

Operating expenses
2

893

201

(6
)
1,090

Selling, general and administrative expenses
3

286

138

(25
)
402

Depreciation and amortization
—

180

54

—

234

Impairments
—

1

—

—

1

Taxes other than income taxes
—

1,301

2,337

—

3,638

Accretion on discounted liabilities
—

5

1

—

6

Interest and debt expense
66

4

5

(7
)
68

Foreign currency transaction losses (gains)
—

—

(19
)
—

(19
)
Total Costs and Expenses
71

27,054

17,655

(4,979
)
39,801

Income from continuing operations before income taxes
851

1,321

186

(1,060
)
1,298

Provision (benefit) for income taxes
(25
)
399

52

—

426

Income from Continuing Operations
876

922

134

(1,060
)
872

Income from discontinued operations*
696

—

10

—

706

Net income
1,572

922

144

(1,060
)
1,578

Less: net income attributable to noncontrolling interests
—

—

6

—

6

Net Income Attributable to Phillips 66
$
1,572

922

138

(1,060
)
1,572

 
 
 
 
 
 
Comprehensive Income
$
1,612

962

176

(1,132
)
1,618

* Net of provision for income taxes on discontinued operations:
$
—

—

5

—

5

Condensed Consolidating Balance Sheet 
 
Millions of Dollars
 
March 31, 2015
Balance Sheet
Phillips 66

Phillips 66 Company

All Other Subsidiaries

Consolidating Adjustments

Total Consolidated

Assets
 
 
 
 
 
Cash and cash equivalents
$
—

1,686

3,704

—

5,390

Accounts and notes receivable
26

3,761

2,424

(474
)
5,737

Inventories
—

2,637

1,529

—

4,166

Prepaid expenses and other current assets
9

499

343

—

851

Total Current Assets
35

8,583

8,000

(474
)
16,144

Investments and long-term receivables
31,029

20,428

5,332

(46,260
)
10,529

Net properties, plants and equipment
—

12,369

5,549

—

17,918

Goodwill
—

3,040

234

—

3,274

Intangibles
—

694

188

—

882

Other assets
58

153

123

(4
)
330

Total Assets
$
31,122

45,267

19,426

(46,738
)
49,077

 
 
 
 
 
 
Liabilities and Equity
 
 
 
 
 
Accounts payable
$
—

4,659

3,508

(474
)
7,693

Short-term debt
—

20

17

(2
)
35

Accrued income and other taxes
—

612

500

—

1,112

Employee benefit obligations
—

258

25

—

283

Other accruals
143

236

362

—

741

Total Current Liabilities
143

5,785

4,412

(476
)
9,864

Long-term debt
7,456

162

1,294

2

8,914

Asset retirement obligations and accrued environmental costs
—

469

181

—

650

Deferred income taxes
—

4,289

1,198

(4
)
5,483

Employee benefit obligations
—

1,087

205

—

1,292

Other liabilities and deferred credits
1,734

2,493

2,067

(6,015
)
279

Total Liabilities
9,333

14,285

9,357

(6,493
)
26,482

Common stock
12,433

25,404

8,059

(33,463
)
12,433

Retained earnings
10,050

6,272

1,344

(7,645
)
10,021

Accumulated other comprehensive income (loss)
(694
)
(694
)
(169
)
863

(694
)
Noncontrolling interests
—

—

835

—

835

Total Liabilities and Equity
$
31,122

45,267

19,426

(46,738
)
49,077



 
Millions of Dollars
 
December 31, 2014
Balance Sheet
Phillips 66

Phillips 66 Company

All Other Subsidiaries

Consolidating Adjustments

Total Consolidated

Assets
 
 
 
 
 
Cash and cash equivalents
$
—

2,045

3,162

—

5,207

Accounts and notes receivable
14

5,069

3,274

(1,102
)
7,255

Inventories
—

2,026

1,371

—

3,397

Prepaid expenses and other current assets
9

429

399

—

837

Total Current Assets
23

9,569

8,206

(1,102
)
16,696

Investments and long-term receivables
30,141

18,896

4,631

(43,479
)
10,189

Net properties, plants and equipment
—

12,267

5,079

—

17,346

Goodwill
—

3,040

234

—

3,274

Intangibles
—

694

206

—

900

Other assets
60

159

121

(4
)
336

Total Assets
$
30,224

44,625

18,477

(44,585
)
48,741

 
 
 
 
 
 
Liabilities and Equity
 
 
 
 
 
Accounts payable
$
—

5,618

3,548

(1,102
)
8,064

Short-term debt
798

26

18

—

842

Accrued income and other taxes
—

356

522

—

878

Employee benefit obligations
—

409

53

—

462

Other accruals
65

242

541

—

848

Total Current Liabilities
863

6,651

4,682

(1,102
)
11,094

Long-term debt
7,457

159

226

—

7,842

Asset retirement obligations and accrued environmental costs
—

494

189

—

683

Deferred income taxes
—

4,240

1,255

(4
)
5,491

Employee benefit obligations
—

1,074

231

—

1,305

Other liabilities and deferred credits
285

1,919

2,126

(4,041
)
289

Total Liabilities
8,605

14,537

8,709

(5,147
)
26,704

Common stock
12,812

25,405

8,240

(33,645
)
12,812

Retained earnings
9,338

5,214

1,074

(6,317
)
9,309

Accumulated other comprehensive income
(531
)
(531
)
7

524

(531
)
Noncontrolling interests
—

—

447

—

447

Total Liabilities and Equity
$
30,224

44,625

18,477

(44,585
)
48,741

Condensed Consolidating Statement of Cash Flows 
 
Millions of Dollars
 
Three Months Ended March 31, 2015
Statement of Cash Flows
Phillips 66

Phillips 66 Company

All Other Subsidiaries

Consolidating Adjustments

Total Consolidated

Cash Flows From Operating Activities
 
 
 
 
 
Net cash provided by continuing operating activities
$
52

60

1,298

(58
)
1,352

Net cash provided by discontinued operations
—

—

—

—

—

Net Cash Provided by Operating Activities
52

60

1,298

(58
)
1,352

 
 
 
 
 
 
Cash Flows From Investing Activities
 
 
 
 
 
Capital expenditures and investments*
—

(425
)
(1,490
)
834

(1,081
)
Proceeds from asset dispositions
—

881

(10
)
(880
)
(9
)
Intercompany lending activities
1,449

(833
)
(616
)
—

—

Advances/loans—related parties
—

(50
)
—

—

(50
)
Other
—

12

90

—

102

Net cash provided by (used in) continuing investing activities
1,449

(415
)
(2,026
)
(46
)
(1,038
)
Net cash used in discontinued operations
—

—

—

—

—

Net Cash Provided by (Used in) Investing Activities
1,449

(415
)
(2,026
)
(46
)
(1,038
)
 
 
 
 
 
 
Cash Flows From Financing Activities
 
 
 
 
 
Issuance of debt
—

—

1,169

—

1,169

Repayment of debt
(800
)
(4
)
(91
)
—

(895
)
Issuance of common stock
(25
)
—

—

—

(25
)
Repurchase of common stock
(399
)
—

—

—

(399
)
Dividends paid on common stock
(272
)
—

(39
)
39

(272
)
Distributions to controlling interests
—

—

(165
)
165

—

Distributions to noncontrolling interests
—

—

(6
)
—

(6
)
Net proceeds from issuance of Phillips 66 Partners LP common units
—

—

384

—

384

Other*
(5
)
—

91

(100
)
(14
)
Net cash provided by (used in) continuing financing activities
(1,501
)
(4
)
1,343

104

(58
)
Net cash provided by (used in) discontinued operations
—

—

—

—

—

Net Cash Provided by (Used in) Financing Activities
(1,501
)
(4
)
1,343

104

(58
)
 
 
 
 
 
 
Effect of Exchange Rate Changes on Cash and Cash Equivalents
—

—

(73
)
—

(73
)
 
 
 
 
 
 
Net Change in Cash and Cash Equivalents
—

(359
)
542

—

183

Cash and cash equivalents at beginning of period
—

2,045

3,162

—

5,207

Cash and Cash Equivalents at End of Period
$
—

1,686

3,704

—

5,390

* Includes intercompany capital contributions.

 
Millions of Dollars
 
Three Months Ended March 31, 2014
Statement of Cash Flows
Phillips 66

Phillips 66 Company

All Other Subsidiaries

Consolidating Adjustments

Total Consolidated

Cash Flows From Operating Activities
 
 
 
 
 
Net cash provided by continuing operating activities
$
52

10

1,439

(105
)
1,396

Net cash provided by discontinued operations
—

—

2

—

2

Net Cash Provided by Operating Activities
52

10

1,441

(105
)
1,398

 
 
 
 
 
 
Cash Flows From Investing Activities
 
 
 
 
 
Capital expenditures and investments*
—

(840
)
(450
)
718

(572
)
Proceeds from asset dispositions
—

871

36

(400
)
507

Intercompany lending activities
1,291

(66
)
(1,225
)
—

—

Other
—

(38
)
51

—

13

Net cash provided by (used in) continuing investing activities
1,291

(73
)
(1,588
)
318

(52
)
Net cash used in discontinued operations
—

—

(34
)
—

(34
)
Net Cash Provided by (Used in) Investing Activities
1,291

(73
)
(1,622
)
318

(86
)
 
 
 
 
 
 
Cash Flows From Financing Activities
 
 
 
 
 
Repayment of debt
—

(3
)
(5
)
—

(8
)
Issuance of common stock
(20
)
—

—

—

(20
)
Repurchase of common stock
(640
)
—

—

—

(640
)
Share exchange—PSPI transaction
(450
)
—

—

—

(450
)
Dividends paid on common stock
(229
)
—

(93
)
93

(229
)
Distributions to controlling interests
—

—

(274
)
274

—

Distributions to noncontrolling interests
—

—

(4
)
—

(4
)
Other*
(4
)
—

580

(580
)
(4
)
Net cash provided by (used in) continuing financing activities
(1,343
)
(3
)
204

(213
)
(1,355
)
Net cash provided by (used in) discontinued operations
—

—

—

—

—

Net Cash Provided by (Used in) Financing Activities
(1,343
)
(3
)
204

(213
)
(1,355
)
 
 
 
 
 
 
Effect of Exchange Rate Changes on Cash and Cash Equivalents
—

—

(31
)
—

(31
)
 
 
 
 
 
 
Net Change in Cash and Cash Equivalents
—

(66
)
(8
)
—

(74
)
Cash and cash equivalents at beginning of period
—

2,162

3,238

—

5,400

Cash and Cash Equivalents at End of Period
$
—

2,096

3,230

—

5,326

* Includes intercompany capital contributions.
Variable Interest Entities (VIEs) (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 3 Months Ended
Mar. 31, 2015
Mar. 31, 2015
Merey Sweeny [Member]
Aug. 31, 2009
Merey Sweeny [Member]
Aug. 28, 2009
Merey Sweeny [Member]
Aug. 27, 2009
Merey Sweeny [Member]
Conocophillips [Member]
Dec. 31, 2012
Merey Sweeny [Member]
MSLP 8.85% Senior Notes [Member]
Guarantees of Joint Venture Debt [Member]
Mar. 31, 2015
Merey Sweeny [Member]
MSLP 8.85% Senior Notes [Member]
Guarantees of Joint Venture Debt [Member]
Jul. 31, 1999
Merey Sweeny [Member]
MSLP 8.85% Senior Notes [Member]
Guarantees of Joint Venture Debt [Member]
Mar. 31, 2015
Excel Paralubes [Member]
Dec. 31, 2012
Excel Paralubes [Member]
Mar. 31, 2015
Excel Paralubes [Member]
Excel 7.43% Senior Secured Bonds [Member]
Mar. 31, 2015
Excel Paralubes [Member]
Excel 7.43% Senior Secured Bonds [Member]
Guarantees of Joint Venture Debt [Member]
Dec. 31, 2012
Excel Paralubes [Member]
Excel 7.43% Senior Secured Bonds [Member]
Guarantees of Joint Venture Debt [Member]
Dec. 31, 2012
Excel Paralubes [Member]
Excel 7.43% Senior Secured Bonds [Member]
Conocophillips [Member]
Guarantees of Joint Venture Debt [Member]
Variable interest entities VIEs (Textual) [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additional ownership interest acquired in MSLP that is in dispute
 
 
50.00% 
50.00% 
 
 
 
 
 
 
 
 
 
 
Debt guarantee to lender of 8.85% senior notes issued by MSLP, percentage
 
 
 
 
 
100.00% 
 
 
 
 
 
 
 
 
Stated interest rate of debt issued, percentage
 
 
 
 
 
8.85% 
 
8.85% 
 
 
 
 
7.43% 
 
Maximum exposure under debt guarantee
 
 
 
 
 
 
$ 189 
 
 
 
 
$ 29 
 
 
Book value of investment
 
135 
 
 
 
 
 
 
143 
 
 
 
 
 
Percentage of ownership interest in Excel
 
 
 
 
50.00% 
 
 
 
50.00% 
 
 
 
 
 
Percentage of governance interest in Excel
 
 
 
 
 
 
 
 
50.00% 
 
 
 
 
 
Percentage of guarantee
 
 
 
 
 
100.00% 
 
 
 
 
 
50.00% 
 
50.00% 
Liquidity support guarantee of VIE shared with CoVenturer
 
 
 
 
 
 
 
 
60 
60 
 
 
 
 
Outstanding principal debt balance of Excel
 
 
 
 
 
 
 
 
 
 
58 
 
 
 
Liquidity support guarantee of Excel
 
 
 
 
 
 
 
 
30 
 
 
 
 
 
Purchase Commitment, Annual Obligation
$ 90 
 
 
 
 
 
 
 
 
 
 
 
 
 
Inventories (Summary of Inventory) (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Summary of inventories
 
 
Crude oil and petroleum products
$ 3,911 
$ 3,141 
Materials and supplies
255 
256 
Inventories
$ 4,166 
$ 3,397 
Inventories (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Dec. 31, 2014
Inventory Disclosure [Abstract]
 
 
Inventories valued on the last-in, first out (LIFO) basis
$ 3,798 
$ 3,004 
Estimated excess of current replacement cost over LIFO cost of inventories
3,200 
3,000 
Effect on net income due to LIFO inventory liquidation
$ 36 
 
Business Combinations (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
1 Months Ended 12 Months Ended
Mar. 31, 2014
Dec. 31, 2014
Aug. 31, 2014
Midstream Segment [Member]
Beaumont, Texas,Crude Oil And Petroleum Products Terminal, 7.1 Million-Barrel-Storage-Capacity [Member]
bbl
Dec. 31, 2014
CapitalExpendituresAndInvestments [Member]
Business Acquisition [Line Items]
 
 
 
 
Storage capacity, barrels
 
 
7,100,000 
 
Number of refineries
1 
 
 
 
Consideration paid, net of cash acquired
 
 
 
$ 741 
PP&E provisionally recorded
 
471 
 
 
Goodwill provisionally recorded
 
232 
 
 
Intangible assets provisionally recorded
 
196 
 
 
Net working capital provisionally recorded
 
70 
 
 
Assumed long-term liabilities provisionally recorded
 
$ 109 
 
 
Assets Held for Sale or Sold (Narrative) (Details) (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
3 Months Ended 1 Months Ended 3 Months Ended 1 Months Ended 1 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Feb. 28, 2014
Phillips Specialty Products Inc [Member]
Marketing and Specialties [Member]
Mar. 31, 2014
Phillips Specialty Products Inc [Member]
Marketing and Specialties [Member]
Mar. 31, 2015
Immingham Combined Heat and Power Plant [Member]
Marketing and Specialties [Member]
Dec. 31, 2014
Immingham Combined Heat and Power Plant [Member]
Marketing and Specialties [Member]
Jul. 31, 2014
IRELAND
Bantry Bay Terminal [Member]
Refining [Member]
Feb. 28, 2015
IRELAND
Bantry Bay Terminal [Member]
Refining [Member]
Dec. 31, 2014
Prepaid Expenses and Other Current Assets [Member]
IRELAND
Bantry Bay Terminal [Member]
Refining [Member]
Feb. 28, 2014
Share Exchange—PSPI Transaction [Member]
Phillips Specialty Products Inc [Member]
Marketing and Specialties [Member]
Assets Held for Sale or Sold (Narrative) [Abstract]
 
 
 
 
 
 
 
 
 
 
Held for sale impairment, before tax
 
 
 
 
 
 
$ 12 
 
 
 
Net carrying value at time of disposition
 
 
 
 
 
 
 
 
77 
 
Net PP&E included in net carrying value
 
 
60 
 
 
 
 
68 
 
 
Shares of Phillips 66 common stock received in exchange
5,643 
 
17,400 
 
 
 
 
 
 
 
PSPI before-tax gain
 
 
696 
696 
 
 
 
 
 
 
Net carrying value
 
 
685 
 
 
 
 
 
 
 
Cash and cash equivalents included in carrying value
 
 
481 
 
 
 
 
 
 
 
Allocated goodwill included in net carrying value
 
 
117 
 
 
 
 
 
 
 
PSPI's cash included in net carrying value
 
450 
 
 
 
 
 
 
 
450 
Deferred gain recognized
122 
7 
 
 
110 
 
 
 
 
 
Deferred gain
 
 
 
 
$ 132 
$ 243 
 
 
 
 
Investments, Loans and Long-Term Receivables (Summary of Financial Information for Equity Method Investments) (Details) (WRB Refining LP And Chevron Phillips Chemical Company LLC [Member], USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
WRB Refining LP And Chevron Phillips Chemical Company LLC [Member]
 
 
Summary of financial information
 
 
Revenues
$ 4,906 
$ 7,998 
Income before income taxes
692 
1,124 
Net income
$ 672 
$ 1,101 
Investments, Loans and Long-Term Receivables (Narrative) (Details) (USD $)
3 Months Ended 1 Months Ended 84 Months Ended 1 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Mar. 31, 2014
WRB Refining LP [Member]
Mar. 31, 2015
WRB Refining LP [Member]
Aug. 31, 2009
Merey Sweeny [Member]
Aug. 28, 2009
Merey Sweeny [Member]
Aug. 27, 2009
Petroleos De Venezuela S.A. (PDVSA) [Member]
Merey Sweeny [Member]
Dec. 31, 2013
Cenovus Energy Inc [Member]
WRB Refining LP [Member]
Aug. 27, 2009
Conocophillips [Member]
Merey Sweeny [Member]
Apr. 30, 2015
Subsequent Event [Member]
Rockies Express Pipeline Llc Rex [Member]
Schedule of Equity Method Investments [Line Items]
 
 
 
 
 
 
 
 
 
 
Percentage of ownership interest
 
 
 
50.00% 
 
 
 
 
50.00% 
25.00% 
Contribution to WRB Cenovus was obligated to make
 
 
 
 
 
 
 
$ 7,500,000,000 
 
 
Total distribution received
 
 
1,232,000,000 
 
 
 
 
 
 
 
Dividend considered an operating cash inflow
 
 
760,000,000 
 
 
 
 
 
 
 
Dividend considered an investing cash inflow
 
 
472,000,000 
 
 
 
 
 
 
 
Book value of our investment in WRB
 
 
 
1,898,000,000 
 
 
 
 
 
 
Basis difference in book value of our investment in WRB
 
 
 
3,326,000,000 
 
 
 
 
 
 
Repayments of Long-term Debt
 
 
 
 
 
 
 
 
 
450,000,000 
Long-term debt
 
 
 
 
 
 
 
 
 
2,600,000,000 
Capital Expenditures And Investments
$ 1,081,000,000 
$ 572,000,000 
 
 
 
 
 
 
 
$ 112,000,000 
Percentage of equity interest of others
 
 
 
 
 
 
50.00% 
 
 
 
Additional ownership interest acquired
 
 
 
 
50.00% 
50.00% 
 
 
 
 
Properties, Plants and Equipment (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Properties, plants and equipment with the associated accumulated depreciation and amortization
 
 
Gross PP&E
$ 27,856 
$ 27,145 
Accum D&A
9,938 
9,799 
Net PP&E
17,918 
17,346 
Midstream [Member]
 
 
Properties, plants and equipment with the associated accumulated depreciation and amortization
 
 
Gross PP&E
5,337 
4,726 
Accum D&A
1,209 
1,185 
Net PP&E
4,128 
3,541 
Refining [Member]
 
 
Properties, plants and equipment with the associated accumulated depreciation and amortization
 
 
Gross PP&E
20,126 
19,951 
Accum D&A
7,558 
7,424 
Net PP&E
12,568 
12,527 
Marketing and Specialties [Member]
 
 
Properties, plants and equipment with the associated accumulated depreciation and amortization
 
 
Gross PP&E
1,410 
1,490 
Accum D&A
702 
738 
Net PP&E
708 
752 
Corporate and Other [Member]
 
 
Properties, plants and equipment with the associated accumulated depreciation and amortization
 
 
Gross PP&E
983 
978 
Accum D&A
469 
452 
Net PP&E
$ 514 
$ 526 
Earnings per Share (Summary of Earnings Per Share Calculation) (Details) (USD $)
In Millions, except Share data in Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Basic EPS Calculation
 
 
Income from continuing operations attributable to Phillips 66
$ 987 
$ 866 
Income allocated to participating securities
(2)
(1)
Income from continuing operations available to common stockholders
985 
865 
Discontinued operations
   
706 
Net Income available to common stockholders
985 
1,571 
Weighted-average common shares outstanding (thousands)
543,469 
580,027 
Effect of stock-based compensation (thousands)
4,731 
4,026 
Weighted-average commons shares outstanding - EPS (thousands)
548,200 1
584,053 1
Income from continuing operations attributable to Phillips 66, per share (dollars)
$ 1.80 
$ 1.48 
Discontinued operations, per share (dollars)
 
$ 1.21 
Earnings Per Share (dollars)
$ 1.80 
$ 2.69 
Diluted EPS Calculation
 
 
Income allocated to participating securities
(1)
 
Income from continuing operations available to common stockholders
986 
866 
Net Income available to common stockholders
$ 986 
$ 1,572 
Effect of stock-based compensation (thousands)
4,137 
5,522 
Weighted-average commons shares outstanding - EPS (thousands)
552,337 1
589,575 1
Income from continuing operations attributable to Phillips 66, per share (dollars)
$ 1.79 
$ 1.47 
Discontinued operations, per share (dollars)
 
$ 1.20 
Earnings Per Share (dollars)
$ 1.79 
$ 2.67 
Debt (Narrative) (Details) (USD $)
1 Months Ended
Mar. 31, 2015
Revolving Credit Facility [Member]
Dec. 31, 2014
Revolving Credit Facility [Member]
Mar. 31, 2015
Phillips 66 Partners LP [Member]
Revolving Credit Facility [Member]
Dec. 31, 2014
Phillips 66 Partners LP [Member]
Revolving Credit Facility [Member]
Mar. 31, 2015
One Point Nine Five Zero Senior Notes Due Two Thousand Fifteen [Member]
Mar. 31, 2015
Senior Notes [Member]
Feb. 28, 2015
Senior Notes [Member]
Phillips 66 Partners LP [Member]
Feb. 23, 2015
Senior Notes [Member]
Phillips 66 Partners LP [Member]
Mar. 31, 2015
Senior Notes [Member]
One Point Nine Five Zero Senior Notes Due Two Thousand Fifteen [Member]
Feb. 28, 2015
Senior Notes [Member]
TwoPointSixFourSixSeniorNotesDueTwoThousandTwenty [Member]
Phillips 66 Partners LP [Member]
Feb. 28, 2015
Senior Notes [Member]
ThreePointSixZeroFiveSeniorNotesDueTwoThousandTwentyFive [Member]
Phillips 66 Partners LP [Member]
Feb. 28, 2015
Senior Notes [Member]
FourPointSixEightZeroSeniorNotesDueTwoThousandFortyFive [Member]
Phillips 66 Partners LP [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Senior Notes repaid upon maturity
 
 
 
 
$ 800,000,000 
 
 
 
 
 
 
 
Senior Notes, Interest Rate, Stated Percentage
 
 
 
 
 
 
 
 
1.95% 
2.646% 
3.605% 
4.68% 
Public offering of aggregate principal amount of debt issued
 
 
 
 
 
7,500,000,000 
1,100,000,000 
1,100,000,000 
 
300,000,000 
500,000,000 
300,000,000 
Amount of outstanding borrowings under revolving credit agreement
0 
0 
0 
18,000,000 
 
 
 
 
 
 
 
 
Borrowing capacity under revolving credit agreement
5,000,000,000 
 
500,000,000 
 
 
 
 
 
 
 
 
 
Letters of credit issued
51,000,000 
51,000,000 
 
 
 
 
 
 
 
 
 
 
Aggregate total capacity available under credit facilities
$ 5,400,000,000 
 
 
 
 
 
 
 
 
 
 
 
Guarantees (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Mar. 31, 2015
Residual Value Guarantees [Member]
Mar. 31, 2015
Other Guarantees [Member]
Mar. 31, 2015
Indemnifications [Member]
Mar. 31, 2015
MSLP 8.85% Senior Notes [Member]
Merey Sweeny [Member]
Guarantees of Joint Venture Debt [Member]
Dec. 31, 2012
MSLP 8.85% Senior Notes [Member]
Merey Sweeny [Member]
Guarantees of Joint Venture Debt [Member]
Jul. 31, 1999
MSLP 8.85% Senior Notes [Member]
Merey Sweeny [Member]
Guarantees of Joint Venture Debt [Member]
Guarantees (Textual) [Abstract]
 
 
 
 
 
 
 
 
Percentage of guarantee
 
 
 
 
 
 
100.00% 
 
Stated interest rate of debt issued, percentage
 
 
 
 
 
 
8.85% 
8.85% 
Maximum potential amount of future payments under the guarantees
 
 
$ 361 
$ 123 
 
$ 189 
 
 
Carrying amount of indemnifications
 
 
 
 
216 
 
 
 
Environmental accruals included in recorded carrying amount
$ 480 
$ 496 
 
 
$ 102 
 
 
 
Contingencies and Commitments (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Dec. 31, 2014
Contingencies and Commitments (Textual) [Abstract]
 
 
Total environmental accrual
$ 480 
$ 496 
Expected years to incur a substantial amount of expenditures
30 years 
 
Revolving Credit Facility [Member]
 
 
Contingencies and Commitments (Textual) [Abstract]
 
 
Letters of credit issued
51 
51 
Performance Guarantee [Member]
 
 
Contingencies and Commitments (Textual) [Abstract]
 
 
Letters of credit and bank guarantees
665 
 
Performance Guarantee [Member] |
Revolving Credit Facility [Member]
 
 
Contingencies and Commitments (Textual) [Abstract]
 
 
Letters of credit issued
$ 51 
 
Derivatives and Financial Instruments (Summary of Commodity Derivative Assets and Liabilities) (Details) (Commodity Derivatives [Member], USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Accounts and notes receivable [Member]
 
 
Fair value of commodity derivative assets and liabilities, without netting
 
 
Commodity derivative assets, fair value gross
 
$ (1)1
Prepaid Expenses and Other Current Assets [Member]
 
 
Fair value of commodity derivative assets and liabilities, without netting
 
 
Commodity derivative assets, fair value gross
1,989 1
3,839 1
Other Assets [Member]
 
 
Fair value of commodity derivative assets and liabilities, without netting
 
 
Commodity derivative assets, fair value gross
36 1
29 1
Other Accruals [Member]
 
 
Fair value of commodity derivative assets and liabilities, without netting
 
 
Commodity derivative liabilities, fair value gross
1,776 1
3,472 1
Other Liabilities and Deferred Credits [Member]
 
 
Fair value of commodity derivative assets and liabilities, without netting
 
 
Commodity derivative liabilities, fair value gross
$ 11 1
$ 1 1
Derivatives and Financial Instruments (Summary of Gains/(Losses) From Commodity Derivatives) (Details) (Commodity Derivatives [Member], USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Sales and Other Operating Revenues [Member]
 
 
Summary of gains (losses) from commodity derivatives
 
 
Gains (losses) from commodity derivatives
$ (31)1
$ 57 1
Other Income [Member]
 
 
Summary of gains (losses) from commodity derivatives
 
 
Gains (losses) from commodity derivatives
43 1
14 1
Purchased Crude Oil and Products [Member]
 
 
Summary of gains (losses) from commodity derivatives
 
 
Gains (losses) from commodity derivatives
$ 20 1
$ 2 1
Derivatives and Financial Instruments (Summary of Outstanding Commodity Derivative Contracts) (Details)
Mar. 31, 2015
MMBbls
Dec. 31, 2014
MMBbls
Derivative [Line Items]
 
 
Crude oil, refined products and NGL (millions of barrels)
(23)
(11)
Derivatives and Financial Instruments (Narrative) (Details)
3 Months Ended 12 Months Ended
Mar. 31, 2015
Dec. 31, 2014
Financial instruments and derivative contracts (Textual) [Abstract]
 
 
Estimated percentage of derivative contract volume expiring within twelve months
98.00% 
99.00% 
Fair Value Measurements (Summary of Fair Value of Derivative Assets and Liabilities and Effect of Counterparty Netting) (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Effect of counterparty netting, commodity derivative assets
$ (1,740)
$ (3,307)
Effect of collateral netting, commodity derivative assets
(101)
(225)
Rabbi trust assets
83 
76 
Total assets, fair value disclosure gross
2,108 
3,943 
Effect of counterparty netting, commodity derivative liabilities
(1,740)
(3,307)
Difference in carrying value and fair value
(711)
(400)
Total liabilities, fair value disclosure gross
11,247 
12,347 
Net carrying value presented on balance sheet, commodity derivative liabilities and debt
8,796 
8,640 
Carrying (Reported) Amount, Fair Value Disclosure [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Rabbi trust assets
83 
76 
Net carrying value presented on balance sheet, commodity derivative assets and investments
267 
411 
Floating Rate Debt [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Debt excluding capital leases, fair value gross
50 
68 
Net carrying value presented on balance sheet, debt
50 
68 
Fixed Rate Debt Excluding Capital Leases [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Debt excluding capital leases, fair value gross
9,410 1
8,806 1
Net carrying value presented on balance sheet, debt
8,699 1
8,406 1
Difference in carrying value and fair value
(711)1
(400)1
Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Rabbi trust assets
83 
76 
Total assets, fair value disclosure gross
1,229 
2,134 
Total liabilities, fair value disclosure gross
1,209 
1,901 
Level 1 [Member] |
Floating Rate Debt [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Debt excluding capital leases, fair value gross
50 
68 
Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Total assets, fair value disclosure gross
878 
1,802 
Total liabilities, fair value disclosure gross
10,038 
10,446 
Level 2 [Member] |
Fixed Rate Debt Excluding Capital Leases [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Debt excluding capital leases, fair value gross
9,410 1
8,806 1
Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Total assets, fair value disclosure gross
1 
7 
Exchange-cleared Instruments [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Commodity derivative assets, fair value gross
1,942 
3,583 
Effect of counterparty netting, commodity derivative assets
(1,734)
(3,255)
Effect of collateral netting, commodity derivative assets
(101)
(225)
Net carrying value presented on balance sheet, commodity derivative assets
107 
103 
Derivative, Collateral, Obligation to Return Cash
0 
 
Commodity derivative liabilities, fair value gross
1,734 
3,255 
Effect of counterparty netting, commodity derivative liabilities
(1,734)
(3,255)
Exchange-cleared Instruments [Member] |
Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Commodity derivative assets, fair value gross
1,146 
2,058 
Commodity derivative liabilities, fair value gross
1,159 
1,833 
Exchange-cleared Instruments [Member] |
Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Commodity derivative assets, fair value gross
796 
1,525 
Commodity derivative liabilities, fair value gross
575 
1,422 
OTC Instruments [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Commodity derivative assets, fair value gross
10 
24 
Effect of counterparty netting, commodity derivative assets
(6)
(14)
Net carrying value presented on balance sheet, commodity derivative assets
4 
10 
Commodity derivative liabilities, fair value gross
12 
29 
Effect of counterparty netting, commodity derivative liabilities
(6)
(14)
Net carrying value presented on balance sheet, commodity derivative liabilities
6 
15 
OTC Instruments [Member] |
Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Commodity derivative assets, fair value gross
10 
24 
Commodity derivative liabilities, fair value gross
12 
29 
Physical Forward Contracts [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Commodity derivative assets, fair value gross
73 2
260 2
Effect of counterparty netting, commodity derivative assets
 
(38)2
Net carrying value presented on balance sheet, commodity derivative assets
73 2
222 2
Commodity derivative liabilities, fair value gross
41 2
189 2
Effect of counterparty netting, commodity derivative liabilities
 
(38)2
Net carrying value presented on balance sheet, commodity derivative liabilities
41 2
151 2
Physical Forward Contracts [Member] |
Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Commodity derivative assets, fair value gross
72 2
253 2
Commodity derivative liabilities, fair value gross
41 2
189 2
Physical Forward Contracts [Member] |
Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Commodity derivative assets, fair value gross
$ 1 2
$ 7 2
Employee Benefit Plans (Summary of Components of Net Periodic Benefit Cost) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
United States Pension Plans of U S Entity, Defined Benefit [Member]
 
 
Components of Net Periodic Benefit Cost
 
 
Service cost
$ 31 
$ 30 
Interest cost
27 
27 
Expected return on plan assets
(35)
(36)
Amortization of prior service cost (credit)
1 
1 
Recognized net actuarial loss (gain)
19 
10 
Settlements
1 
 
Total net periodic benefit cost
44 
32 
Foreign Pension Plans, Defined Benefit [Member]
 
 
Components of Net Periodic Benefit Cost
 
 
Service cost
10 
10 
Interest cost
7 
9 
Expected return on plan assets
(10)
(9)
Amortization of prior service cost (credit)
 
(1)
Recognized net actuarial loss (gain)
4 
3 
Total net periodic benefit cost
11 
12 
Other Postretirement Benefit Plans, Defined Benefit [Member]
 
 
Components of Net Periodic Benefit Cost
 
 
Service cost
2 
2 
Interest cost
2 
2 
Recognized net actuarial loss (gain)
 
(1)
Total net periodic benefit cost
$ 4 
$ 3 
Employee Benefit Plans (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
United States Pension Plans of U S Entity, Defined Benefit [Member]
 
Employee Benefit Plans (Textual) [Abstract]
 
Company contributions to plans
$ 3 
Additional contributions expected to be made in remainder of 2015
60 
Foreign Pension Plans, Defined Benefit [Member]
 
Employee Benefit Plans (Textual) [Abstract]
 
Company contributions to plans
14 
Additional contributions expected to be made in remainder of 2015
$ 45 
Accumulated Other Comprehensive Income (Loss) (Summary of the Components of Accumulated Other Comprehensive Income (Loss) and Detail on Reclassifications) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Mar. 31, 2015
Defined Benefit Plans [Member]
Mar. 31, 2014
Defined Benefit Plans [Member]
Mar. 31, 2015
Foreign Curency Translation [Member]
Mar. 31, 2014
Foreign Curency Translation [Member]
Mar. 31, 2015
Hedging [Member]
Dec. 31, 2014
Hedging [Member]
Mar. 31, 2014
Hedging [Member]
Dec. 31, 2013
Hedging [Member]
Changes in accumulated other comprehensive income (loss) by component
 
 
 
 
 
 
 
 
 
 
Accumulated other comprehensive income (loss), beginning balance
$ (531)
$ 37 
$ (696)
$ (404)
$ 167 
$ 443 
$ (2)
$ (2)
$ (2)
$ (2)
Other comprehensive income (loss) before reclassifications
(185)
32 
3 
2 
(188)
30 
 
 
 
 
Actuarial losses
22 1
8 1
22 1
8 1
 
 
 
 
 
 
Other Comprehensive Income (Loss), Net of Tax
(163)
40 
25 
10 
(188)
30 
 
 
 
 
Accumulated other comprehensive income (loss), ending balance
$ (694)
$ 77 
$ (671)
$ (394)
$ (21)
$ 473 
$ (2)
$ (2)
$ (2)
$ (2)
Cash Flow Information (Narrative) (Details) (Phillips Specialty Products Inc [Member], USD $)
Share data in Millions, unless otherwise specified
1 Months Ended
Feb. 28, 2014
Phillips Specialty Products Inc [Member]
 
Noncash or Part Noncash Divestitures [Line Items]
 
Noncash portion of net assets surrendered in exchange
$ 204,000,000 
Number of shares of Phillips 66 common stock received in exchange
17.4 
Fair value of shares at time of the exchange
$ 1,350,000,000 
Income Taxes (Narrative) (Details)
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Income Taxes (Textual) [Abstract]
 
 
Effective tax rate, percent
28.00% 
33.00% 
Federal statutory tax rate, percent
35.00% 
 
Phillips 66 Partners LP (Narrative) (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 2 Months Ended 2 Months Ended
Mar. 31, 2015
Dec. 31, 2014
Mar. 31, 2015
Phillips 66 Partners LP [Member]
Mar. 31, 2015
Phillips 66 Partners LP [Member]
Feb. 23, 2015
Phillips 66 Partners LP [Member]
Common Units [Member]
Mar. 31, 2015
Noncontrolling Interest [Member]
Phillips 66 Partners LP [Member]
Mar. 2, 2015
Phillips 66 Partners LP [Member]
Explorer Pipeline Company [Member]
Mar. 2, 2015
Phillips 66 Partners LP [Member]
DCP Sand Hills Pipeline, LLC [Member]
Mar. 2, 2015
Phillips 66 Partners LP [Member]
DCP Southern Hills Pipeline, LLC [Member]
Mar. 2, 2015
Phillips 66 Partners LP [Member]
ExplorerPipelineCompanyDcpSandHillsPipelineLlcDcpSouthernHillsPipelineLlc [Member]
Mar. 2, 2015
Common And General Partner Units [Member]
Phillips 66 Partners LP [Member]
ExplorerPipelineCompanyDcpSandHillsPipelineLlcDcpSouthernHillsPipelineLlc [Member]
Mar. 31, 2015
Senior Notes [Member]
Feb. 28, 2015
Senior Notes [Member]
Phillips 66 Partners LP [Member]
Feb. 23, 2015
Senior Notes [Member]
Phillips 66 Partners LP [Member]
Subsidiary or Equity Method Investee [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Equity interests contributed, percentage
 
 
 
 
 
 
0.195 
0.333 
0.333 
 
 
 
 
 
Total consideration for contributed assets
 
 
 
 
 
 
 
 
 
$ 1,010 
 
 
 
 
Cash received for contributed assets
 
 
 
 
 
 
 
 
 
880 
 
 
 
 
Aggregate fair value of units received
 
 
 
 
 
 
 
 
 
 
130 
 
 
 
Public offering of common units
 
 
 
 
5,250,000 
 
 
 
 
 
 
 
 
 
Public offering price, per share
 
 
 
 
$ 75.50 
 
 
 
 
 
 
 
 
 
Partners' Capital Account, Public Sale of Units Net of Offering Costs
 
 
 
 
384 
 
 
 
 
 
 
 
 
 
Public offering of aggregate principal amount of debt issued
 
 
 
 
 
 
 
 
 
 
 
7,500 
1,100 
1,100 
Limited partnership interest in Phillips 66 Partners, percentage
 
 
69.00% 
 
 
 
 
 
 
 
 
 
 
 
General partnership interest in Phillips 66 Partners, percentage
 
 
2.00% 
 
 
 
 
 
 
 
 
 
 
 
Limited partner interest in Phillips 66 Partners owned by public, percentage
 
 
 
29.00% 
 
 
 
 
 
 
 
 
 
 
Public's ownership interest in Phillips 66 Partners reflected as a noncontrolling interest
835 
447 
 
 
 
801 
 
 
 
 
 
 
 
 
Equity investments
 
 
 
801 
 
 
 
 
 
 
 
 
 
 
Net properties, plants and equipment
$ 17,918 
$ 17,346 
 
$ 465 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidating Financial Information (Condensed Consolidating Statement of Income) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Revenues and Other Income
 
 
Sales and other operating revenues
$ 22,778 1
$ 40,283 1
Equity in earnings of affiliates
456 
778 
Net gain on dispositions
122 
7 
Other income
70 
31 
Total Revenues and Other Income
23,426 
41,099 
Cost And Expenses
 
 
Purchased crude oil and products
16,695 
34,381 
Operating expenses
1,094 
1,090 
Selling, general and administrative expenses
394 
402 
Depreciation and amortization
253 
234 
Impairments
 
1 
Taxes other than income taxes
3,462 1
3,638 1
Accretion on discounted liabilities
5 
6 
Interest and debt expense
86 
68 
Foreign currency transaction losses (gains)
49 
(19)
Total Costs and Expenses
22,038 
39,801 
Income from continuing operations before income taxes
1,388 
1,298 
Provision (benefit) for income taxes
391 
426 
Income From Continuing Operations
997 
872 
Income from discontinued operations
 
706 2 3
Net income
997 
1,578 
Less: net income attributable to noncontrolling interests
10 
6 
Net Income Attributable to Phillips 66
987 
1,572 
Comprehensive Income
834 
1,618 
Phillips 66 [Member]
 
 
Revenues and Other Income
 
 
Equity in earnings of affiliates
1,052 
922 
Total Revenues and Other Income
1,052 
922 
Cost And Expenses
 
 
Operating expenses
4 
2 
Selling, general and administrative expenses
2 
3 
Interest and debt expense
93 
66 
Total Costs and Expenses
99 
71 
Income from continuing operations before income taxes
953 
851 
Provision (benefit) for income taxes
(34)
(25)
Income From Continuing Operations
987 
876 
Income from discontinued operations
 
696 3
Net income
987 
1,572 
Net Income Attributable to Phillips 66
987 
1,572 
Comprehensive Income
824 
1,612 
Phillips 66 Company [Member]
 
 
Revenues and Other Income
 
 
Equity in earnings of affiliates
722 
738 
Net gain on dispositions
(5)
 
Other income
59 
22 
Total Revenues and Other Income
16,503 
28,375 
Cost And Expenses
 
 
Purchased crude oil and products
12,277 
24,384 
Operating expenses
874 
893 
Selling, general and administrative expenses
292 
286 
Depreciation and amortization
194 
180 
Impairments
 
1 
Taxes other than income taxes
1,381 
1,301 
Accretion on discounted liabilities
4 
5 
Interest and debt expense
6 
4 
Total Costs and Expenses
15,028 
27,054 
Income from continuing operations before income taxes
1,475 
1,321 
Provision (benefit) for income taxes
423 
399 
Income From Continuing Operations
1,052 
922 
Net income
1,052 
922 
Net Income Attributable to Phillips 66
1,052 
922 
Comprehensive Income
889 
962 
All Other Subsidiaries [Member]
 
 
Revenues and Other Income
 
 
Equity in earnings of affiliates
49 
178 
Net gain on dispositions
127 
7 
Other income
11 
9 
Total Revenues and Other Income
9,527 
17,841 
Cost And Expenses
 
 
Purchased crude oil and products
6,673 
14,938 
Operating expenses
230 
201 
Selling, general and administrative expenses
101 
138 
Depreciation and amortization
59 
54 
Taxes other than income taxes
2,081 
2,337 
Accretion on discounted liabilities
1 
1 
Interest and debt expense
6 
5 
Foreign currency transaction losses (gains)
49 
(19)
Total Costs and Expenses
9,200 
17,655 
Income from continuing operations before income taxes
327 
186 
Provision (benefit) for income taxes
2 
52 
Income From Continuing Operations
325 
134 
Income from discontinued operations
 
10 3
Net income
325 
144 
Less: net income attributable to noncontrolling interests
10 
6 
Net Income Attributable to Phillips 66
315 
138 
Comprehensive Income
149 
176 
Reportable Legal Entities [Member] |
Phillips 66 Company [Member]
 
 
Revenues and Other Income
 
 
Sales and other operating revenues
15,587 
27,239 
Reportable Legal Entities [Member] |
All Other Subsidiaries [Member]
 
 
Revenues and Other Income
 
 
Sales and other operating revenues
7,191 
13,044 
Consolidating Adjustments [Member]
 
 
Revenues and Other Income
 
 
Sales and other operating revenues
(2,289)
(4,979)
Equity in earnings of affiliates
(1,367)
(1,060)
Total Revenues and Other Income
(3,656)
(6,039)
Cost And Expenses
 
 
Purchased crude oil and products
(2,255)
(4,941)
Operating expenses
(14)
(6)
Selling, general and administrative expenses
(1)
(25)
Interest and debt expense
(19)
(7)
Total Costs and Expenses
(2,289)
(4,979)
Income from continuing operations before income taxes
(1,367)
(1,060)
Income From Continuing Operations
(1,367)
(1,060)
Net income
(1,367)
(1,060)
Net Income Attributable to Phillips 66
(1,367)
(1,060)
Comprehensive Income
(1,028)
(1,132)
Consolidating Adjustments [Member] |
Phillips 66 Company [Member]
 
 
Revenues and Other Income
 
 
Sales and other operating revenues
(140)
(376)
Consolidating Adjustments [Member] |
All Other Subsidiaries [Member]
 
 
Revenues and Other Income
 
 
Sales and other operating revenues
$ (2,149)
$ (4,603)
Condensed Consolidating Financial Information (Condensed Consolidating Balance Sheet) (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2015
Dec. 31, 2014
Mar. 31, 2014
Dec. 31, 2013
Assets [Abstract]
 
 
 
 
Cash and cash equivalents
$ 5,390 
$ 5,207 
$ 5,326 
$ 5,400 
Accounts and notes receivable
5,737 
7,255 
 
 
Inventories
4,166 
3,397 
 
 
Prepaid expenses and other current assets
851 
837 
 
 
Total Current Assets
16,144 
16,696 
 
 
Investments and long-term receivables
10,529 
10,189 
 
 
Net properties, plants and equipment
17,918 
17,346 
 
 
Goodwill
3,274 
3,274 
 
 
Intangibles
882 
900 
 
 
Other assets
330 
336 
 
 
Total Assets
49,077 
48,741 
 
 
Liabilities and Equity [Abstract]
 
 
 
 
Accounts payable
7,693 
8,064 
 
 
Short-term debt
35 
842 
 
 
Accrued income and other taxes
1,112 
878 
 
 
Employee benefit obligations
283 
462 
 
 
Other accruals
741 
848 
 
 
Total Current Liabilities
9,864 
11,094 
 
 
Long-term debt
8,914 
7,842 
 
 
Asset retirement obligations and accrued environmental costs
650 
683 
 
 
Deferred income taxes
5,483 
5,491 
 
 
Employee benefit obligations
1,292 
1,305 
 
 
Other liabilities and deferred credits
279 
289 
 
 
Total Liabilities
26,482 
26,704 
 
 
Common stock
12,433 
12,812 
 
 
Retained earnings
10,021 
9,309 
 
 
Accumulated other comprehensive income (loss)
(694)
(531)
77 
37 
Noncontrolling interests
835 
447 
 
 
Total Liabilities and Equity
49,077 
48,741 
 
 
Phillips 66 [Member]
 
 
 
 
Assets [Abstract]
 
 
 
 
Accounts and notes receivable
26 
14 
 
 
Prepaid expenses and other current assets
9 
9 
 
 
Total Current Assets
35 
23 
 
 
Investments and long-term receivables
31,029 
30,141 
 
 
Other assets
58 
60 
 
 
Total Assets
31,122 
30,224 
 
 
Liabilities and Equity [Abstract]
 
 
 
 
Short-term debt
 
798 
 
 
Other accruals
143 
65 
 
 
Total Current Liabilities
143 
863 
 
 
Long-term debt
7,456 
7,457 
 
 
Other liabilities and deferred credits
1,734 
285 
 
 
Total Liabilities
9,333 
8,605 
 
 
Common stock
12,433 
12,812 
 
 
Retained earnings
10,050 
9,338 
 
 
Accumulated other comprehensive income (loss)
(694)
(531)
 
 
Total Liabilities and Equity
31,122 
30,224 
 
 
Phillips 66 Company [Member]
 
 
 
 
Assets [Abstract]
 
 
 
 
Cash and cash equivalents
1,686 
2,045 
2,096 
2,162 
Accounts and notes receivable
3,761 
5,069 
 
 
Inventories
2,637 
2,026 
 
 
Prepaid expenses and other current assets
499 
429 
 
 
Total Current Assets
8,583 
9,569 
 
 
Investments and long-term receivables
20,428 
18,896 
 
 
Net properties, plants and equipment
12,369 
12,267 
 
 
Goodwill
3,040 
3,040 
 
 
Intangibles
694 
694 
 
 
Other assets
153 
159 
 
 
Total Assets
45,267 
44,625 
 
 
Liabilities and Equity [Abstract]
 
 
 
 
Accounts payable
4,659 
5,618 
 
 
Short-term debt
20 
26 
 
 
Accrued income and other taxes
612 
356 
 
 
Employee benefit obligations
258 
409 
 
 
Other accruals
236 
242 
 
 
Total Current Liabilities
5,785 
6,651 
 
 
Long-term debt
162 
159 
 
 
Asset retirement obligations and accrued environmental costs
469 
494 
 
 
Deferred income taxes
4,289 
4,240 
 
 
Employee benefit obligations
1,087 
1,074 
 
 
Other liabilities and deferred credits
2,493 
1,919 
 
 
Total Liabilities
14,285 
14,537 
 
 
Common stock
25,404 
25,405 
 
 
Retained earnings
6,272 
5,214 
 
 
Accumulated other comprehensive income (loss)
(694)
(531)
 
 
Total Liabilities and Equity
45,267 
44,625 
 
 
All Other Subsidiaries [Member]
 
 
 
 
Assets [Abstract]
 
 
 
 
Cash and cash equivalents
3,704 
3,162 
3,230 
3,238 
Accounts and notes receivable
2,424 
3,274 
 
 
Inventories
1,529 
1,371 
 
 
Prepaid expenses and other current assets
343 
399 
 
 
Total Current Assets
8,000 
8,206 
 
 
Investments and long-term receivables
5,332 
4,631 
 
 
Net properties, plants and equipment
5,549 
5,079 
 
 
Goodwill
234 
234 
 
 
Intangibles
188 
206 
 
 
Other assets
123 
121 
 
 
Total Assets
19,426 
18,477 
 
 
Liabilities and Equity [Abstract]
 
 
 
 
Accounts payable
3,508 
3,548 
 
 
Short-term debt
17 
18 
 
 
Accrued income and other taxes
500 
522 
 
 
Employee benefit obligations
25 
53 
 
 
Other accruals
362 
541 
 
 
Total Current Liabilities
4,412 
4,682 
 
 
Long-term debt
1,294 
226 
 
 
Asset retirement obligations and accrued environmental costs
181 
189 
 
 
Deferred income taxes
1,198 
1,255 
 
 
Employee benefit obligations
205 
231 
 
 
Other liabilities and deferred credits
2,067 
2,126 
 
 
Total Liabilities
9,357 
8,709 
 
 
Common stock
8,059 
8,240 
 
 
Retained earnings
1,344 
1,074 
 
 
Accumulated other comprehensive income (loss)
(169)
7 
 
 
Noncontrolling interests
835 
447 
 
 
Total Liabilities and Equity
19,426 
18,477 
 
 
Consolidating Adjustments [Member]
 
 
 
 
Assets [Abstract]
 
 
 
 
Accounts and notes receivable
(474)
(1,102)
 
 
Total Current Assets
(474)
(1,102)
 
 
Investments and long-term receivables
(46,260)
(43,479)
 
 
Other assets
(4)
(4)
 
 
Total Assets
(46,738)
(44,585)
 
 
Liabilities and Equity [Abstract]
 
 
 
 
Accounts payable
(474)
(1,102)
 
 
Short-term debt
(2)
 
 
 
Total Current Liabilities
(476)
(1,102)
 
 
Long-term debt
2 
 
 
 
Deferred income taxes
(4)
(4)
 
 
Other liabilities and deferred credits
(6,015)
(4,041)
 
 
Total Liabilities
(6,493)
(5,147)
 
 
Common stock
(33,463)
(33,645)
 
 
Retained earnings
(7,645)
(6,317)
 
 
Accumulated other comprehensive income (loss)
863 
524 
 
 
Total Liabilities and Equity
$ (46,738)
$ (44,585)
 
 
Condensed Consolidating Financial Information (Condensed Consolidating Statement of Cash Flows) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Condensed Financial Statements, Captions [Line Items]
 
 
Net cash provided by continuing operating activities
$ 1,352 
$ 1,396 
Net cash provided by discontinued operations
 
2 
Net Cash Provided by Operating Activities
1,352 
1,398 
Capital expenditures and investments
(1,081)
(572)
Proceeds from asset dispositions
(9)1
507 1
Advances/loans—related parties
(50)
 
Other
102 
13 
Net cash used in continuing investing activities
(1,038)
(52)
Net cash used in discontinued operations
 
(34)
Net Cash Provided by (Used in) Investing Activities
(1,038)
(86)
Issuance of debt
1,169 
 
Repayment of debt
(895)
(8)
Issuance of common stock
(25)
(20)
Repurchase of common stock
(399)
(640)
Share exchange—PSPI transaction
 
(450)
Dividends paid on common stock
(272)
(229)
Distributions to noncontrolling interests
(6)
(4)
Net proceeds from issuance of Phillips 66 Partners LP common units
384 
 
Other
(14)
(4)
Net cash provided by (used in) continuing financing activities
(58)
(1,355)
Net Cash Provided by (Used in) Financing Activities
(58)
(1,355)
Effect of Exchange Rate Changes on Cash and Cash Equivalents
(73)
(31)
Net Change in Cash and Cash Equivalents
183 
(74)
Cash and cash equivalents at beginning of period
5,207 
5,400 
Cash and Cash Equivalents at End of Period
5,390 
5,326 
Phillips 66 [Member]
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
Net cash provided by continuing operating activities
52 
52 
Net Cash Provided by Operating Activities
52 
52 
Intercompany lending activities
1,449 
1,291 
Net cash used in continuing investing activities
1,449 
1,291 
Net Cash Provided by (Used in) Investing Activities
1,449 
1,291 
Repayment of debt
(800)
 
Issuance of common stock
(25)
(20)
Repurchase of common stock
(399)
(640)
Share exchange—PSPI transaction
 
(450)
Dividends paid on common stock
(272)
(229)
Other
(5)
(4)
Net cash provided by (used in) continuing financing activities
(1,501)
(1,343)
Net Cash Provided by (Used in) Financing Activities
(1,501)
(1,343)
Phillips 66 Company [Member]
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
Net cash provided by continuing operating activities
60 
10 
Net Cash Provided by Operating Activities
60 
10 
Capital expenditures and investments
(425)
(840)
Proceeds from asset dispositions
881 
871 
Intercompany lending activities
(833)
(66)
Advances/loans—related parties
(50)
 
Other
12 
(38)
Net cash used in continuing investing activities
(415)
(73)
Net Cash Provided by (Used in) Investing Activities
(415)
(73)
Repayment of debt
(4)
(3)
Net cash provided by (used in) continuing financing activities
(4)
(3)
Net Cash Provided by (Used in) Financing Activities
(4)
(3)
Net Change in Cash and Cash Equivalents
(359)
(66)
Cash and cash equivalents at beginning of period
2,045 
2,162 
Cash and Cash Equivalents at End of Period
1,686 
2,096 
All Other Subsidiaries [Member]
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
Net cash provided by continuing operating activities
1,298 
1,439 
Net cash provided by discontinued operations
 
2 
Net Cash Provided by Operating Activities
1,298 
1,441 
Capital expenditures and investments
(1,490)
(450)
Proceeds from asset dispositions
(10)
36 
Intercompany lending activities
(616)
(1,225)
Other
90 
51 
Net cash used in continuing investing activities
(2,026)
(1,588)
Net cash used in discontinued operations
 
(34)
Net Cash Provided by (Used in) Investing Activities
(2,026)
(1,622)
Issuance of debt
1,169 
 
Repayment of debt
(91)
(5)
Dividends paid on common stock
(39)
(93)
Distributions to noncontrolling interests
(6)
(4)
Net proceeds from issuance of Phillips 66 Partners LP common units
384 
 
Other
91 
580 
Net cash provided by (used in) continuing financing activities
1,343 
204 
Net Cash Provided by (Used in) Financing Activities
1,343 
204 
Effect of Exchange Rate Changes on Cash and Cash Equivalents
(73)
(31)
Net Change in Cash and Cash Equivalents
542 
(8)
Cash and cash equivalents at beginning of period
3,162 
3,238 
Cash and Cash Equivalents at End of Period
3,704 
3,230 
Consolidating Adjustments [Member]
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
Net cash provided by continuing operating activities
(58)
(105)
Net Cash Provided by Operating Activities
(58)
(105)
Capital expenditures and investments
834 
718 
Proceeds from asset dispositions
(880)
(400)
Net cash used in continuing investing activities
(46)
318 
Net Cash Provided by (Used in) Investing Activities
(46)
318 
Dividends paid on common stock
39 
93 
Distributions to controlling interests
165 
274 
Other
(100)
(580)
Net cash provided by (used in) continuing financing activities
104 
(213)
Net Cash Provided by (Used in) Financing Activities
104 
(213)
Consolidating Adjustments [Member] |
All Other Subsidiaries [Member]
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
Distributions to controlling interests
$ (165)
$ (274)
Condensed Consolidating Financial Information (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2015
Mar. 31, 2014
Condensed Financial Statements, Captions [Line Items]
 
 
Percentage of ownership in subsidiary
100.00% 
 
Net of provision for income taxes on discontinued operations
$ 0 
$ 5 
All Other Subsidiaries [Member]
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
Net of provision for income taxes on discontinued operations
0 
5 
Senior Notes [Member]
 
 
Condensed Financial Statements, Captions [Line Items]
 
 
Senior notes issued by Phillips 66
$ 7,500