Phillips 66
For the period ended Mar 31, 2026. Filed Apr 29, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed Apr 29, 2026
PSX$245.72-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-10-29.
0001534701-25-000155
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-04-29.
0001534701-26-000022
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 241 previous paragraphs and 215 current paragraphs.
123 unchanged; 55 reworded; 36 added; 62 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 25 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (36)
Current report
In the first quarter of 2026, we reported earnings of $207 million. In response to the sharp increases in commodity prices and to preserve liquidity, we had net debt borrowings of $7.7 billion and increased our cash and cash equivalents by $4 billion. We used available cash to fund operating activities of $2.3 billion, capital expenditures and investments of $582 million, dividend payments to common stockholders of $509 million and repurchases of our common stock of $269 million. The use of cash in operating activities was primarily due to unfavorable net working capital impacts, which was primarily driven by an increase in inventory and higher accounts receivable, partially offset by higher accounts payable; as well as, the funding of approximately $3 billion of cash collateral on derivative positions. As of March 31, 2026, we had $5.2 billion of cash and cash equivalents and $0.8 billion of total committed capacity available under our credit facilities.
Current report
During March 2026, the business environment in which we operate was impacted by significant movements in commodity prices as a result of geopolitical events in the Middle East. The global crude oil market quickly shifted into structural deficit and the disruption materially reduced crude oil and refined products from the markets, pushing benchmark crude oil prices at the end of the quarter above $100 per barrel. In addition, natural gas, liquefied petroleum gas (LPG) and petrochemical markets have materially tightened. While these impacts were most notable during the last month of the quarter, due to the uncertainty regarding duration, continued disruptions could materially impact our future results.
Current report
Below is a discussion of additional factors impacting our environment during the three months ended March 31, 2026 as compared to the same period of 2025.
Current report
Net income attributable to Phillips 66 in the first quarter of 2026 was $207 million, compared with $487 million in the first quarter of 2025. The decrease was primarily due to a before-tax gain of $1 billion associated with the sale of our investment in Coop Mineraloel AG (Coop) recognized in January 2025 in the M&S segment and lower U.S. and international marketing fuel margins, mainly driven by commodity derivative activities. These decreases were partially offset by higher realized refining margins during the first quarter of 2026 and $246 million of accelerated depreciation recorded in the first quarter of 2025 associated with the cessation of fuel production and idling of the Los Angeles Refinery.
Current report
The increase in realized refining margins was primarily due to higher market crack spreads and increased feedstock advantage, partially offset by higher Renewable Identification Number (RIN) costs and commodity derivative activities.
Current report
See Note 6—Investments, Loans and Long-Term Receivables, in the Notes to Consolidated Financial Statements for additional information regarding the sale of our investment in Coop. See Note 7—Properties, Plants and Equipment, in the Notes to Consolidated Financial Statements for additional information regarding accelerated depreciation. See Note 13—Derivatives and Financial Instruments, in the Notes to Consolidated Financial Statements for additional information on commodity derivative activity.
Current report
Sales and other operating revenues increased 7% for the three months ended March 31, 2026, primarily due to higher refined petroleum product sales volumes, partially offset by losses from commodity derivative activity. Purchased crude oil and products increased 6% for the three months ended March 31, 2026, primarily due to losses from commodity derivative activity and higher crude oil purchase volumes. See Note 13—Derivatives and Financial Instruments, in the Notes to Consolidated Financial Statements for additional information.
Current report
Equity in earnings of affiliates increased 65% for the three months ended March 31, 2026. The increase was primarily due to equity losses from WRB Refining LP (WRB) in the first quarter of 2025, compared to no equity earnings impact from WRB in the first quarter of 2026 after we acquired the remaining 50% equity interest in WRB on October 1, 2025. See Note 2—Business Combinations, in the Notes to Consolidated Financial Statements for further details on the WRB acquisition.
Current report
Net gain on dispositions decreased $1 billion for the three months ended March 31, 2026, primarily due to a before-tax gain of $1 billion associated with the sale of our investment in Coop recognized in January 2025 in the M&S segment. See Note 6—Investments, Loans and Long-Term Receivables, in the Notes to Consolidated Financial Statements for additional information regarding the sale of Coop.
Current report
Other income increased $148 million for the three months ended March 31, 2026, primarily driven by higher results from trading activities and increased sales of Clean Fuel Production credits.
Current report
Operating expenses increased $259 million for the three months ended March 31, 2026, primarily due to our acquisition of WRB in October 2025, partially offset by lower turnaround costs.
Current report
Depreciation and amortization decreased 29% for the three months ended March 31, 2026, primarily due to $246 million of accelerated depreciation recorded in the first quarter of 2025 associated with the cessation of fuel production and idling of the Los Angeles Refinery. See Note 7—Properties, Plants and Equipment, in the Notes to Consolidated Financial Statements for additional information.
Current report
†Includes volumes from the Coastal Bend acquisition, effective April 1, 2025. See Note 2—Business Combinations, in the Notes to Consolidated Financial Statements for additional information.
Current report
Results from our Midstream segment decreased $160 million for the three months ended March 31, 2026.
Current report
Results from our Transportation business for the three months ended March 31, 2026, were in line with results for the three months ended March 31, 2025.
Current report
Results from our NGL business decreased $164 million for the three months ended March 31, 2026, primarily related to a before-tax gain of $68 million recognized in the first quarter of 2025 on the sale of DCP LP’s ownership interest in GCX, as well as lower margins associated with customer recontracting and winter weather impacts.
Current report
Results from the Chemicals segment for the three months ended March 31, 2026, were in line with results for the three months ended March 31, 2025; however, market conditions impacted the Chemicals segment in the 2026 period. The increase in the three months ended March 31, 2026, was primarily due to higher ethylene sales volumes, which were largely offset by reduced margins. The decrease in margins was driven by lower sales prices, partially offset by an inventory adjustment.
Current report
Includes our proportional share of our equity method investment in WRB through September 30, 2025. Beginning on October 1, 2025, 100% of Borger Refinery and Wood River Refinery are included in consolidated results.
Current report
In the fourth quarter of 2025, we ceased fuel production at our Los Angeles Refinery and effective in the first quarter of 2026, activities associated with the decommissioning and redevelopment of our idled Los Angeles Refinery site are included in Corporate and Other. See Note 7—Properties, Plants and Equipment, in the Notes to Consolidated Financial Statements for additional information.
Current report
Results from our Refining segment increased $1,145 million for the three months ended March 31, 2026. The increase in the three months ended March 31, 2026, was primarily driven by improved realized margins and $246 million of accelerated depreciation recorded in the first quarter of 2025 associated with the cessation of fuel production and idling of the Los Angeles Refinery. The increase in realized margins was primarily due to higher market crack spreads and increased feedstock advantage. These increases are partially offset by higher RIN costs and impacts of commodity derivative activities. See Note 13—Derivatives and Financial Instruments, in the Notes to Consolidated Financial Statements for additional information on commodity derivative activity.
Current report
Results from the M&S segment decreased $1.4 billion for the three months ended March 31, 2026. The decrease was primarily due to a before-tax gain of $1 billion associated with the sale of our investment in Coop recognized in January 2025, as well as lower U.S. and international marketing fuel margins, mainly driven by commodity derivative activities.
Current report
See Note 6—Investments, Loans and Long-Term Receivables, in the Notes to Consolidated Financial Statements for additional information regarding the sale of Coop. See Note 13—Derivatives and Financial Instruments, in the Notes to Consolidated Financial Statements for additional information on commodity derivative activity.
Current report
Results from the Renewable Fuels segment increased $144 million for the three months ended March 31, 2026. The increase was primarily due to higher renewable product pricing and credit generation. These increases were partially offset by commodity derivative activities and lower product sales volumes.
Current report
See Note 13—Derivatives and Financial Instruments, in the Notes to Consolidated Financial Statements for additional information on commodity derivative activity.
Current report
Corporate overhead and other costs increased $13 million for the three months ended March 31, 2026, primarily due to costs associated with the decommissioning and redevelopment of our idled Los Angeles Refinery site and higher employee-related expenses. These were partially offset by lower depreciation expense associated with information technology assets and charges associated with canceled projects, both recorded in the first quarter of 2025.
Current report
During the first three months of 2026, net cash used in operating activities was $2.3 billion, compared with net cash provided by operating activities of $187 million for the first three months of 2025. The decrease was primarily due to unfavorable working capital impacts, mostly driven by an increase in inventory and higher accounts receivable as well as funding of approximately $3 billion of cash collateral on derivative positions, largely due to a sharp increase in commodity prices during the quarter. These decreases in working capital were partially offset by higher accounts payable.
Current report
Term Loan Agreement
Current report
On March 18, 2026 (the Term Loan Closing Date), Phillips 66 Company entered into a 364-day, $2.25 billion term loan agreement guaranteed by Phillips 66 (the Term Loan Agreement). The Term Loan Agreement provides for a single borrowing on the Term Loan Closing Date and matures 364 days after the Term Loan Closing Date. The Term Loan Agreement contains customary covenants similar to those contained in our revolving credit agreement, including a maximum consolidated net debt-to-capitalization ratio of 65% as of the last day of each fiscal quarter. The Term Loan Agreement has customary events of default, such as nonpayment of principal when due; nonpayment of interest, fees or other amounts after grace periods; and violation of covenants. We may at any time prepay outstanding borrowings under the Term Loan Agreement, in whole or in part, without premium or penalty. Outstanding borrowings under the Term Loan Agreement bear interest at either: (a) the term Secured Overnight Financing Rate (SOFR) in effect from time to time plus an applicable margin of 1.100%; or (b) the reference rate (as described in the Term Loan Agreement) plus an applicable margin of 0.100%. At March 31, 2026, the entire $2.25 billion was borrowed under the Term Loan Agreement, which matures in March 2027.
Current report
Borrowings under the Receivables Securitization Facility are recognized as short-term debt on the consolidated balance sheet. Borrowings are secured by the accounts receivable, held by P66 Receivables, which remain reported as accounts receivable on the consolidated balance sheet. At March 31, 2026, and December 31, 2025, we had outstanding borrowings of $384 million and $200 million, respectively. These borrowings were secured by accounts receivable held by P66 Receivables of $5.4 billion and $4.4 billion as of March 31, 2026, and December 31, 2025, respectively, which are included within the “Accounts and notes receivable” line item on our consolidated balance sheet.
Current report
Accounts Receivable Factoring
Current report
In addition to the Receivables Securitization Facility, discussed in Note 9—Debt, the Company maintains other accounts receivable factoring facilities with various financial institutions that enable the Company to sell certain eligible accounts receivable to these financial institutions on a non-recourse basis in which we retain the servicing of the accounts receivable transferred. Sales of accounts receivable under these facilities meet the sale criteria under ASC 860, Transfers and Servicing, and are derecognized from the consolidated balance sheet. Cash receipts from the sale of accounts receivable, received at the time of sale, are classified as cash flows from operating activities. For the three months ended March 31, 2026, we sold $330 million of accounts receivable for cash proceeds under these facilities. We recognized immaterial charges associated with these transfers, which are included as a component within the line item “Selling, general and administrative expense” on our consolidated statement of income for the three months ended March 31, 2026. We had $292 million and $195 million of sold accounts receivable uncollected as of March 31, 2026 and December 31, 2025, respectively, and these amounts were derecognized from our consolidated balance sheet.
Current report
In December 2025, the USACE published its final EIS, completing its analysis of alternatives. The final EIS evaluates five alternatives: two no-action alternatives (denial with restoration or abandonment) and three action alternatives, with one marked as USACE’s preferred alternative, that would grant the easement under varying conditions. The preferred alternative would grant the easement subject to the same conditions as the 2017 easement but would authorize an increased throughput volume of 1.1 million barrels per day (bpd), up from the previous 570,000 bpd under the original authorization. The remaining action alternatives would impose either additional operational conditions or require an alternate pipeline route, both of which may entail substantial implementation costs and could have a material impact on our financial statements.
Current report
We are still awaiting a Record of Decision (ROD), which will provide a definitive statement of the selected alternative and any related conditions. The Tribe and affiliated parties may file a new lawsuit in Washington, D.C., challenging the ROD shortly after it is issued. Most recently, the Tribe has appealed the dismissal, but the issuance of the ROD will supersede and effectively moot the appeal.
Current report
Acquisition
Current report
On April 28, 2026, we acquired the assets and associated infrastructure of the Lindsey Oil Refinery for a purchase price of approximately $115 million, subject to certain closing adjustments including, but not limited to, the purchase of the associated inventory with the assets acquired.
Current report
•Sanctioned construction of a new gas processing plant in the Permian and associated supporting infrastructure.
Removed paragraphs (62)
Previous report
In the third quarter of 2025, we reported earnings of $133 million and cash provided by operating activities of $1.2 billion. During the quarter, we received $838 million from net debt borrowings, funded capital expenditures and investments of $541 million, paid $484 million of dividends to our common stockholders and repurchased $267 million of common stock. We ended the third quarter of 2025 with $2 billion of cash and cash equivalents including cash classified within assets held for sale, and $5.2 billion of total committed capacity available under our credit facilities.
Previous report
•During 2025, we funded capital expenditures and investments of $1.6 billion and completed a Midstream acquisition of $2.2 billion. This growth was achieved in part through $2.0 billion in proceeds from asset dispositions, including $1.2 billion from the sale of our 49% interest in Coop Mineraloel AG (Coop) and $853 million from DCP Midstream, LP’s (DCP LP) 25% ownership in Gulf Coast Express Pipeline LLC (GCX). Also, in May 2025, we entered into a definitive agreement to divest 65% of our equity interest in our Germany and Austria retail marketing business (Germany and Austria Marketing) for expected cash proceeds of approximately $1.6 billion (1.5 billion Euros), subject to purchase price adjustments. We expect to complete the Germany and Austria Marketing transaction in the fourth quarter of 2025, subject to customary closing conditions. See Note 7—Investments, Loans and Long-Term Receivables, in the Notes to Consolidated Financial Statements for additional information on the investment dispositions. See Note 23—Assets Held for Sale, in the Notes to Consolidated Financial Statements for additional information.
Previous report
•We continued expansion of our Midstream NGL wellhead-to-market platform through acquiring all issued and outstanding equity interests in each of EPIC Y-Grade GP, LLC and EPIC Y-Grade, LP (collectively referred to herein as Coastal Bend), together with their respective subsidiaries, which own various long haul natural gas liquids pipelines, fractionation facilities and distribution systems. See Note 3—Business Combinations, in the Notes to Consolidated Financial Statements for additional information.
Previous report
Net income attributable to Phillips 66 in the third quarter of 2025 was $133 million, compared with $346 million in the third quarter of 2024. Net income attributable to Phillips 66 for the nine months ended September 30, 2025, was $1.5 billion, compared with $2.1 billion for the nine months ended September 30, 2024.
Previous report
The decrease in net income attributable to Phillips 66 in the third quarter of 2025 was due to a before-tax impairment of $948 million on our equity investment in WRB Refining LP (WRB), accelerated depreciation for the Los Angeles Refinery, and lower equity earnings from CPChem. These decreases were partially offset by improved realized refining margins, primarily driven by higher market crack spreads, lower legal accruals related to litigation with Propel Fuels, Inc. (Propel Fuels) recorded in the M&S segment and higher refining volumes.
Previous report
The decrease in net income attributable to Phillips 66 for the nine months ended September 30, 2025, was due to a before-tax impairment of $948 million on our equity investment in WRB, accelerated depreciation for the Los Angeles Refinery, and lower equity earnings from CPChem and WRB. These decreases were partially offset by a before-tax gain of $1 billion associated with the sale of our investment in Coop recognized in January 2025 in the M&S segment, lower legal accruals related to litigation with Propel Fuels and before-tax impairments recognized in 2024 related to certain crude oil processing and logistics assets in California and certain Midstream gathering and processing assets in Texas.
Previous report
See Note 2—Restructuring for additional information regarding our plans to cease operations and begin idling the facilities at our Los Angeles Refinery, Note 7—Investments, Loans and Long-Term Receivables for additional information regarding the impairment of our equity investment in WRB and sale of our investment in Coop, Note 9—Impairments for additional information on 2024 impairments and Note 13—Contingencies and Commitments for additional information on ongoing litigation with Propel Fuels, in the Notes to Consolidated Financial Statements.
Previous report
Sales and other operating revenues decreased 3% and 10% for the three and nine months ended September 30, 2025, respectively. Purchased crude oil and products decreased 6% and 12% for the three and nine months ended September 30, 2025, respectively. The decreases in both line items for the three and nine months ended September 30, 2025, were due to lower prices for crude oil, NGL, and refined petroleum products, partially offset by higher volumes.
Previous report
Equity in earnings of affiliates decreased 39% and 59% for the three and nine months ended September 30, 2025, respectively. The decreases for both periods of 2025 were primarily attributable to lower equity earnings from CPChem, as well as lower equity earnings from sales of ownership interests in Coop and GCX which were both sold in January 2025. The decrease for the three months ended September 30, 2025, was partially offset by improved WRB equity earnings, as a result of improved margins and utilization. The decrease for the nine months ended September 30, 2025, was additionally impacted by lower equity earnings from WRB, as a result of decreased margins, and lower equity earnings from the sale of our ownership interest in Rockies Express Pipeline LLC (REX) in 2024. See Note 7—Investments, Loans and Long-Term Receivables, in the Notes to Consolidated Financial Statements for additional information regarding the sales of ownership interests in 2025. See the Chemicals segment analysis in the “Segment Results” section for additional information regarding CPChem.
Previous report
Net gain on dispositions increased $766 million for the nine months ended September 30, 2025, primarily due to a before-tax gain of $1 billion associated with the sale of our investment in Coop in January 2025, recognized in the M&S segment. This gain was partially offset by the absence of a before-tax gain of $238 million recognized in the Midstream segment in the second quarter of 2024 associated with the sale of our ownership interest in REX, as well as an unrealized loss of $74 million on foreign currency forward contracts entered into in connection with the pending divestiture of Germany and Austria Marketing. See Note 7—Investments, Loans and Long-Term Receivables for additional information regarding the sale of Coop and Note 23—Assets Held for Sale for additional information on the Germany and Austria Marketing pending divestiture, in the Notes to Consolidated Financial Statements.
Previous report
Other income increased $32 million and $72 million for the three and nine months ended September 30, 2025, respectively. The increases for both periods of 2025 were primarily due to the recognition of Clean Fuel Production credits starting in 2025. The increase for the nine months ended September 30, 2025, was partially offset by changes in the fair value of our investment in NOVONIX, as well as decreased interest income.
Previous report
Operating expenses increased $196 million for the nine months ended September 30, 2025, primarily due to environmental expenses related to future groundwater mitigation plans at the Los Angeles Refinery, costs associated with the acquisition of Coastal Bend in April 2025, as well as higher compensation and utility expenses.
Previous report
Selling, general and administrative expenses decreased 34% and 18% for the three and nine months ended September 30, 2025, respectively, primarily due to lower legal accruals related to litigation with Propel Fuels. See Note 13—Contingencies and Commitments for additional information on ongoing litigation with Propel Fuels.
Previous report
Depreciation and amortization increased 52% and 58% for the three and nine months ended September 30, 2025, respectively, primarily due to accelerated depreciation for the Los Angeles Refinery, as well as additional depreciation from the acquisition of Coastal Bend in April 2025. See Note 2—Restructuring for information regarding our plans to cease operations and begin idling the facilities at our Los Angeles Refinery and Note 3—Business Combinations for information regarding the Coastal Bend acquisition, in the Notes to Consolidated Financial Statements.
Previous report
Impairments increased $922 million and $562 million for the three and nine months ended September 30, 2025, respectively. The increases for both periods of 2025 were due to the before-tax impairment of $948 million recognized in the third quarter of 2025 related to our equity investment in WRB. The increase for the nine months ended September 30, 2025, was partially offset by a before-tax impairment of $163 million recognized in the first quarter of 2024 related to certain crude oil processing and logistics assets in California and a before-tax impairment of $224 million recognized in the second quarter of 2024 related to certain Midstream gathering and processing assets in Texas. See Note 7—Investments, Loans and Long-Term Receivables for additional information regarding the impairment of our equity investment in WRB and Note 9—Impairments, in the Notes to Consolidated Financial Statements for additional information.
Previous report
Taxes other than income taxes increased $168 million and $405 million for the three and nine months ended September 30, 2025, respectively. The increases for both periods in 2025 were primarily driven by the expiration of the Biodiesel Blender Tax Credit as of December 31, 2024. The increase for the nine months ended September 30, 2025, was also impacted by an increase in tariffs and customs duties.
Previous report
Results from our Midstream segment increased $53 million and $214 million for the three and nine months ended September 30, 2025, respectively.
Previous report
Results from our Transportation business decreased $60 million and $366 million for the three and nine months ended September 30, 2025, respectively. The decreases for both periods of 2025 were primarily due to the retirement of a rail rack at the Los Angeles Refinery and lower equity earnings primarily from Dakota Access, LLC. Additionally, the decrease in the nine months ended September 30, 2025, was impacted by the sale of our ownership interest in REX in the second quarter of 2024.
Previous report
Results from our NGL business increased $113 million and $580 million for the three and nine months ended September 30, 2025, respectively. The increase in the three months ended September 30, 2025, is primarily due to results from the Coastal Bend operations, increased gathering and processing volumes and improved export margins. The increase in the nine months ended September 30, 2025, is primarily related to a before-tax impairment charge associated with certain gathering and processing assets in Texas recognized in 2024, results from the Coastal Bend operations, and a before-tax gain from the sale of DCP LP’s ownership interest in GCX in January 2025. In addition, the nine months ended September 30, 2025, reflected improved export margins and fewer weather-related impacts.
Previous report
Results from the Chemicals segment decreased $166 million and $460 million for the three and nine months ended September 30, 2025, respectively, primarily due to decreased polyethylene margins, mostly driven by lower sales prices.
Previous report
In October 2024, we announced our intention to cease operations and begin idling the facilities at our Los Angeles Refinery in the fourth quarter of 2025. In the third quarter of 2025, we began the permitting processes for new uses at the Los Angeles Refinery. See Note 2—Restructuring, in the Notes to Consolidated Financial Statements for additional information. In early 2024, we ceased crude operations at the San Francisco Refinery as part of the conversion of the refinery into the Rodeo Complex.
Previous report
Results from our Refining segment decreased $410 million and $1,506 million for the three and nine months ended September 30, 2025, respectively. The decrease in the three months ended September 30, 2025, was primarily driven by a before-tax impairment of $948 million related to our equity investment in WRB and accelerated depreciation for the Los Angeles Refinery, partially offset by improved realized margins and higher volumes. The increase in realized margins was primarily due to higher market crack spreads, partially offset by lower product differentials and unfavorable inventory hedging impacts. The decrease in the nine months ended September 30, 2025, was primarily driven by a before-tax impairment of $948 million related to our equity investment in WRB and accelerated depreciation for the Los Angeles Refinery.
Previous report
Results from the M&S segment increased $273 million and $1,345 million for the three and nine months ended September 30, 2025, respectively. The increases for both periods of 2025 were due to an accrual of $605 million recorded during the third quarter of 2024 related to litigation with Propel Fuels, compared with an accrual of $241 million recorded during the third quarter of 2025 related to the same matter. The increase in the three months ended September 30, 2025, was partially offset by lower U.S. marketing fuel margins. The increase in the nine months ended September 30, 2025, was additionally impacted by a before-tax gain of $1 billion associated with the sale of our investment in Coop, higher U.S. and international marketing fuel margins, partially offset by a before-tax aggregate unrealized loss on foreign currency forward contracts entered into in connection with the Germany and Austria Marketing pending divestiture.
Previous report
See Note 7—Investments, Loans and Long-Term Receivables for additional information regarding the sale of Coop, Note 13—Contingencies and Commitments for additional information regarding the Propel Fuels litigation and Note 23—Assets Held for Sale for additional information related to the Germany and Austria Marketing pending divestiture, in the Notes to Consolidated Financial Statements.
Previous report
Results from the Renewable Fuels segment increased $73 million and decreased $135 million for the three and nine months ended September 30, 2025, respectively. The increase in the three months ended September 30, 2025, was primarily due to improved margins driven by optimized feedstock volumes and higher international credits, partially offset by unfavorable inventory impacts. The decrease in the nine months ended September 30, 2025, was primarily driven by decreased margins as a result of increased feedstock volumes, unfavorable inventory impacts, partially offset by increased credit production.
Previous report
Corporate overhead and other costs increased $105 million for the nine months ended September 30, 2025, primarily due to higher depreciation expense associated with information technology assets as well as higher advisory fees recorded during the second quarter of 2025 related to proxy solicitation services.
Previous report
During the first nine months of 2025, cash generated by operating activities was $2.2 billion, compared with $3 billion for the first nine months of 2024. The decrease was primarily due to unfavorable working capital impacts.
Previous report
Debt Issuances
Previous report
On September 18, 2025, Phillips 66 Company, a wholly owned subsidiary of Phillips 66, issued $2 billion aggregate principal amount of junior subordinated notes that are fully and unconditionally guaranteed by Phillips 66. The junior subordinated notes issuance consisted of:
Previous report
•$1 billion aggregate principal amount of 5.875% Series A Junior Subordinated Notes due 2056 (Series A 2056 Notes).
Previous report
•$1 billion aggregate principal amount of 6.200% Series B Junior Subordinated Notes due 2056 (Series B 2056 Notes).
Previous report
Interest on the Series A 2056 Notes and Series B 2056 Notes is payable semi-annually in arrears on March 15 and September 15 of each year, commencing on March 15, 2026. The Series A 2056 Notes will bear interest at 5.875% per year until March 15, 2031. The interest rate will reset every five years beginning on March 15, 2031, to equal the then-current five-year U.S. Treasury rate plus a spread of 2.283%, provided that the interest rate will not reset below 5.875%. The Series B 2056 Notes will bear interest at 6.200% per year until March 15, 2036. The interest rate will reset every five years beginning on March 15, 2036, to equal the then-current five-year U.S. Treasury rate plus a spread of 2.166%, provided that the interest rate will not reset below 6.200%. We may defer interest payments on the Series A 2056 Notes and Series B 2056 Notes on one or more occasions for up to 10 consecutive years per deferral period. If interest payments on the Series A 2056 Notes or Series B 2056 Notes are deferred, we may not, subject to certain limited exceptions, declare or pay any dividends or distributions, or redeem, purchase, acquire, or make a liquidation payment on any of our capital stock during the deferral period. Also, during the deferral period, we may not (i) pay any principal of, or interest or premium, if any, on or repay, repurchase or redeem any debt securities of Phillips 66 or Phillips 66 Company that rank equally with, or junior to, the Series A 2056 Notes and Series B 2056 Notes, respectively, in right of payment or (ii) make any payments with respect to any guarantee by Phillips 66 or Phillips 66 Company of indebtedness if the guarantee ranks equally with or junior to the Series A 2056 Notes or Series B 2056 Notes, respectively, in right of payment.
Previous report
On September 11, 2024, Phillips 66 Company, a wholly owned subsidiary of Phillips 66, issued $1.8 billion aggregate principal amount of senior unsecured notes that are fully and unconditionally guaranteed by Phillips 66. The senior unsecured notes issuance consisted of:
Previous report
•$600 million aggregate principal amount of 5.250% Senior Notes due 2031 (Additional 2031 Notes).
Previous report
•$600 million aggregate principal amount of 4.950% Senior Notes due 2035 (2035 Notes).
Previous report
•$600 million aggregate principal amount of 5.500% Senior Notes due 2055 (2055 Notes).
Previous report
Interest on the Additional 2031 Notes is payable semi-annually on June 15 and December 15 of each year and commenced on December 15, 2024. Interest on the 2035 Notes and 2055 Notes is payable semi-annually on March 15 and September 15 of each year and commenced on March 15, 2025.
Previous report
On February 28, 2024, Phillips 66 Company, a wholly owned subsidiary of Phillips 66, issued $1.5 billion aggregate principal amount of senior unsecured notes that are fully and unconditionally guaranteed by Phillips 66. The senior unsecured notes issuance consisted of:
Previous report
•$600 million aggregate principal amount of 5.250% Senior Notes due 2031 (2031 Notes).
Previous report
•$400 million aggregate principal amount of 5.300% Senior Notes due 2033 (Additional 2033 Notes).
Showing the first 40 of 62 passages. Open the source sections for the rest.
Reworded paragraphs (55)
Previous wording
Phillips 66 is uniquely positioned as a leading integrated downstream energy provider operating with Midstream, Chemicals, Refining, Marketing and Specialties (M&S) and Renewable Fuels segments. At September 30, 2025, we had total assets of $76.1 billion. Our common stock trades on the New York Stock Exchange under the symbol PSX.
Current wording
Phillips 66 is uniquely positioned as a leading integrated downstream energy provider operating with Midstream, Chemicals, Refining, Marketing and Specialties (M&S) and Renewable Fuels segments. At March 31, 2026, we had total assets of $84.1 billion. Our common stock trades on the New York Stock Exchange under the symbol PSX.
Previous wording
In January 2025, we announced the next phase of priorities along with financial and operational initiatives through year-end 2027. With these targets, the company is continuing to focus on creating shareholder value; driving disciplined growth and returns; and maintaining financial strength and flexibility. We are focused on operational and cost reduction targets intended to drive world-class operations across our portfolio, while maintaining emphasis on growing our Midstream and Chemicals businesses.
Current wording
In early 2025, we announced the next phase of the company’s strategic priorities along with financial and operational performance targets through year-end 2027. These targets demonstrate the company’s continued focus on world-class operations; disciplined growth and returns; financial strength and flexibility and shareholder returns.
Previous wording
•World-Class Operations – We are focused on achieving operational excellence by optimizing utilization rates and product yield at our refineries through reliable and safe operations, which will enable us to capture the value available in the market in terms of prices and margins. With our new targets, we remain focused on a competitive cost structure and plan to enhance Refining segment returns and increase our utilization rates by focusing on low-capital, higher-return projects that increase asset reliability and improve market capture.
Current wording
•World-Class Operations – We are focused on operational and cost reduction targets driving world-class operations across our portfolio. Optimizing utilization rates and product yield at our refineries through reliable and safe operations will enable us to capture the value available in the market in terms of prices and margins. We remain focused on a competitive cost structure and plan to enhance Refining segment returns and increase our utilization rates by focusing on low-capital, higher-return projects that increase asset reliability and improve market capture.
Previous wording
•Disciplined Growth and Returns – A disciplined capital allocation process ensures we invest in projects that are expected to generate competitive returns. Our strategy remains focused on growing our Midstream and Chemicals businesses. Within our Midstream segment, we are primarily focused on maximizing the value of our fully integrated natural gas liquids (NGL) wellhead-to-market value chain.
Current wording
•Disciplined Growth and Returns – A disciplined capital allocation process ensures we make investments that are expected to generate competitive returns. Our strategy remains focused on growing our Midstream and Chemicals businesses. Within our Midstream segment, we are primarily focused on maximizing the value of our fully integrated natural gas liquids (NGL) wellhead-to-market value chain.
Previous wording
•We will continue to evaluate future opportunities to rationalize our asset portfolio. We budgeted $2.1 billion for 2025 capital expenditures and investments, exclusive of acquisitions and our share of capital spending by equity affiliates. This includes $1.1 billion of growth capital, primarily in our Midstream segment and additional capital related to consolidation of WRB as of October 1, 2025. See Note 3—Business Combinations, in the Notes to Consolidated Financial Statements for additional information.
Current wording
•We budgeted $2.4 billion for 2026 capital expenditures and investments, exclusive of acquisitions and our share of capital spending by equity affiliates. This includes $1.3 billion of growth capital, primarily in our Midstream segment.
Previous wording
•Our financial targets through 2027 reflect our plans to organically grow our Midstream and Chemicals businesses, as well as maintain total annual capital expenditures and investments of approximately $2.5 billion, including capital related to consolidation of WRB as of October 1, 2025.
Current wording
•Our financial targets through 2027 reflect our plans to organically grow our Midstream and Chemicals businesses, as well as maintain total annual capital expenditures and investments of approximately $2.5 billion.
Previous wording
•Financial Strength and Flexibility – We use a variety of funding sources to support our liquidity requirements, including cash from operations, debt and proceeds from dispositions. Our focus remains on protecting the stable cash generation from the Midstream and M&S businesses while balancing continued portfolio optimization.
Current wording
•Financial Strength and Flexibility – We use a variety of funding sources to support our liquidity requirements, including cash from operations, debt and proceeds from dispositions. Our focus remains on protecting the stable cash generation from the Midstream and M&S businesses while evaluating future opportunities to optimize our portfolio.
Previous wording
•We are targeting reductions of total debt to $17 billion and to lower our debt to capital ratio.
Current wording
•We are targeting reductions of total debt to $17 billion and reductions of our debt-to-capital ratio by the end of 2027.
Previous wording
•Shareholder Returns – We believe shareholder value is enhanced through, among other things, a secure, competitive and growing dividend, complemented by share repurchases. Our financial target aims to return greater than 50% of net cash provided by operating activities to shareholders through share repurchases and dividends. The amount and timing of future dividend payments and the level and timing of future share repurchases is subject to the discretion of, and approval by, our Board of Directors and will depend on various factors including our share price, results of operations, financial condition and cash required for future business plans.
Current wording
•Shareholder Returns – We believe shareholder value is enhanced through, among other things, a secure, competitive and growing dividend, complemented by share repurchases. Our financial target aims to return greater than 50% of net cash provided by operating activities, excluding working capital, to shareholders through share repurchases and dividends. This amount and timing of future dividend payments and the level and timing of future share repurchases is subject to the discretion of, and approval by, our Board of Directors and will depend on various factors including our share price, results of operations, financial condition and cash required for future business plans.
Previous wording
•In April, July, and October 2025, our Board of Directors declared quarterly cash dividends of $1.20 per common share, reflecting our commitment to a secure, competitive and growing dividend.
Current wording
•In February and April 2026, our Board of Directors declared a quarterly cash dividend of $1.27 per common share, reflecting our commitment to a secure, competitive and growing dividend.
Previous wording
Our Midstream segment includes our Transportation and natural gas liquids (NGL) businesses. Our Transportation business contains fee-based operations not directly exposed to commodity price risk. Our NGL business, including DCP Midstream Class A Segment, DCP Sand Hills Pipeline, LLC (DCP Sand Hills) and DCP Southern Hills Pipeline, LLC (DCP Southern Hills), contains both fee-based operations and operations directly impacted by NGL and natural gas prices. The weighted-average NGL price was $0.60 per gallon during the third quarter of 2025, compared with $0.64 per gallon during the third quarter of 2024. The Henry Hub natural gas price was $3.03 per million British thermal units (MMBtu) during the third quarter of 2025, compared with $2.09 per MMBtu during the third quarter of 2024. The decrease in NGL prices was primarily due to increased supply, while the improvement in natural gas prices was due to increased liquified natural gas exports as U.S. export infrastructure increases.
Current wording
Our Midstream segment includes our Transportation and NGL businesses. Our Transportation business contains fee-based operations not directly exposed to commodity price risk. Our NGL business contains both fee-based operations and operations directly impacted by NGL and natural gas prices. The weighted-average NGL price was $0.62 per gallon during the first quarter of 2026, compared with $0.74 per gallon during the first quarter of 2025. The Henry Hub natural gas price was $4.87 per million British thermal units (MMBtu) during the first quarter of 2026, compared with $4.27 per MMBtu during the first quarter of 2025. The decrease in NGL prices was primarily due to increased supply, while the increase in natural gas prices was due to increased liquified natural gas exports as U.S. export infrastructure increases.
Previous wording
Our Chemicals segment consists of our 50% equity investment in Chevron Phillips Chemical Company LLC (CPChem). The chemicals and plastics industry is mainly a commodity-based industry where the margins for key products are based on supply and demand, as well as cost factors. The benchmark high-density polyethylene chain margin was 7.6 cents per pound in the third quarter of 2025, compared with 23.7 cents per pound in the third quarter of 2024. The decrease was mainly due to higher ethane prices and industry oversupply driven by capacity additions.
Current wording
Our Chemicals segment consists of our 50% equity investment in Chevron Phillips Chemical Company LLC (CPChem). The chemicals and plastics industry is mainly a commodity-based industry where the margins for key products are based on supply and demand, as well as cost factors. The benchmark high-density polyethylene chain margin was 10.7 cents per pound in the first quarter of 2026, compared with 10.9 cents per pound in the first quarter of 2025. The decrease was mainly due to higher ethane prices, partially driven by rising natural gas prices, and continued industry capacity additions supporting higher global demand.
Previous wording
Our Refining segment results are driven by several factors, including market crack spreads, refinery throughput, feedstock costs, product yields, turnaround activity and other operating costs. Market crack spreads are used as indicators of refining margins and measure the difference between market prices for refined petroleum products and crude oil. The composite 3:2:1 market crack spread for our business increased to an average of $23.64 per barrel during the third quarter of 2025, from an average of $16.50 per barrel during the third quarter of 2024. The increase in the composite market crack spread was primarily driven by stronger year on year petroleum diesel demand, supported by low seasonal inventories. The price of U.S. benchmark crude oil, West Texas Intermediate (WTI) at Cushing, Oklahoma, decreased to an average of $65.03 per barrel during the third quarter of 2025, from an average of $75.19 per barrel during the third quarter of 2024, primarily due to increasing supply.
Current wording
Our Refining segment results are driven by several factors, including market crack spreads, refinery throughput, feedstock costs, product yields, turnaround activity and other operating costs. Market crack spreads are used as indicators of refining margins and measure the difference between market prices for refined petroleum products and crude oil. The composite 3:2:1 market crack spread for our business increased to an average of $20.56 per barrel during the first quarter of 2026, from an average of $15.83 per barrel during the first quarter of 2025. The increase in the composite market crack spread was primarily driven by stronger petroleum diesel demand, supported by low seasonal inventories, and geopolitical events reducing global product resupply. The price of U.S. benchmark crude oil, West Texas Intermediate (WTI) at Cushing, Oklahoma, increased to an average of $71.98 per barrel during the first quarter of 2026, from an average of $71.46 per barrel during the first quarter of 2025. The increase in crude oil prices was primarily driven by geopolitical events in the Middle East restricting global crude supply.
Previous wording
Our Renewable Fuels segment consists of the operations and assets of the Rodeo Renewable Energy Complex (Rodeo Complex) as well as the global activities to procure renewable feedstocks, manage certain regulatory credits, and market renewable fuels. Results for our Renewable Fuels segment are impacted by several factors, including the market price of renewable fuels, feedstock costs, throughput, operating costs and the value of certain regulatory credits, as well as other market factors, largely determined by the relationship between supply and demand.
Current wording
Our Renewable Fuels segment processes renewable feedstocks into renewable products at the Rodeo Renewable Energy Complex (Rodeo Complex) and at our Humber Refinery. In addition, this segment includes global activities to procure renewable feedstocks, manage certain regulatory credits, and market renewable fuels. Results for our Renewable Fuels segment are impacted by several factors, including the market price of renewable fuels, feedstock costs, throughput, operating costs and the value of certain regulatory credits, as well as other market factors, largely determined by the relationship between supply and demand.
Previous wording
Unless otherwise indicated, discussion of results for the three and nine months ended September 30, 2025, is based on a comparison with the corresponding period of 2024.
Current wording
Unless otherwise indicated, discussion of results for the three months ended March 31, 2026, is based on a comparison with the corresponding period of 2025.
Previous wording
Interest and debt expense increased 13% and 8% for the three and nine months ended September 30, 2025, respectively, primarily due to higher average debt balances.
Current wording
Interest and debt expense increased 29% for the three months ended March 31, 2026, primarily due to higher average debt balances.
Previous wording
Income tax expense decreased 27% and 32% for the three and nine months ended September 30, 2025, respectively, primarily due to lower income before income taxes. See Note 21—Income Taxes, in the Notes to Consolidated Financial Statements for information regarding our effective income tax rates.
Current wording
Income tax expense decreased 66% for the three months ended March 31, 2026, primarily due to lower income before income taxes. See Note 20—Income Taxes, in the Notes to Consolidated Financial Statements for information regarding our effective income tax rates.
Previous wording
Net income attributable to noncontrolling interests increased $63 million for the nine months ended September 30, 2025, due to improved results from DCP LP driven by before-tax impairments recognized in 2024 related to certain DCP LP gathering and processing assets in Texas, as well as impacts from the gain on sale of DCP LP’s equity investment in GCX in January 2025. See Note 7—Investments, Loans and Long-Term Receivables and Note 9—Impairments, in the Notes to Consolidated Financial Statements for additional information.
Current wording
Net income attributable to noncontrolling interests decreased $27 million for the three months ended March 31, 2026, due to impacts from the gain on sale of DCP Midstream, LP’s (DCP LP’s) equity investment in Gulf Coast Express Pipeline LLC (GCX) recorded in January 2025. See Note 6—Investments, Loans and Long-Term Receivables, in the Notes to Consolidated Financial Statements for additional information.
Previous wording
The Midstream segment provides crude oil and refined petroleum product transportation, terminaling and processing services; NGL production, transportation, storage, fractionation, processing, marketing and export services; natural gas gathering, compressing, treating, processing, storage, transportation and marketing services; and condensate recovery.
Current wording
The Midstream segment provides crude oil and refined petroleum product transportation, terminaling and storage services; as well as natural gas and NGL gathering, processing, transportation, fractionation, storage and marketing services. In addition, this segment exports liquefied petroleum gas to global markets.
Previous wording
See the “Executive Overview and Business Environment” section for information on market factors impacting this quarter’s results. See Note 7—Investments, Loans and Long-Term Receivables, in the Notes to Consolidated Financial Statements for additional information regarding the sales of ownership interests in 2025.
Current wording
See the “Executive Overview and Business Environment” section for information on market factors impacting this quarter’s results. See Note 6—Investments, Loans and Long-Term Receivables, in the Notes to Consolidated Financial Statements for additional information regarding the sale of DCP LP’s ownership interest in GCX in 2025.
Previous wording
On September 9, 2025, we entered into a definitive agreement to acquire the remaining 50% ownership interest in WRB from subsidiaries of Cenovus Energy Inc. The transaction closed on October 1, 2025, for total cash consideration of $1.3 billion, subject to post-closing adjustments. See Note 3—Business Combinations, in the Notes to Consolidated Financial Statements for additional information.
Current wording
On October 1, 2025, we acquired the remaining 50% ownership interest in WRB from subsidiaries of Cenovus Energy Inc. (Cenovus). See Note 2—Business Combinations, in the Notes to Consolidated Financial Statements for additional information.
Previous wording
The Refining segment refines crude oil and other feedstocks into petroleum products, such as gasoline and distillates, including aviation fuels, at 11 refineries in the United States and Europe.
Current wording
The Refining segment refines crude oil and other feedstocks into petroleum products, such as gasoline and distillates, including aviation fuels, at 10 refineries in the United States and Europe.
Previous wording
Our worldwide refining crude oil capacity utilization rate was 99% and 93% for the three and nine months ended September 30, 2025, respectively, compared with 94% and 95% in the three and nine months ended September 30, 2024, respectively. The increase for the three months ended September 30, 2025, was primarily due to fewer weather-related impacts, as well as lower turnaround activity. The decrease for the nine months ended September 30, 2025, was primarily due to higher turnaround activity.
Current wording
Our worldwide refining crude oil capacity utilization rate was 95% and 80% for the three months ended March 31, 2026, and 2025, respectively. The increase for the three months ended March 31, 2026, was primarily due to lower turnaround activity. See the “Executive Overview and Business Environment” section for information on market factors impacting this quarter’s results.
Previous wording
Net interest expense consists of interest and financing expense, net of interest income and capitalized interest. Corporate overhead and other includes general and administrative expenses, technology costs, environmental costs associated with sites no longer in operation, foreign currency transaction gains and losses and other costs not directly associated with an operating segment. Corporate and Other also includes the change in the fair value of our investment in NOVONIX. See Note 15—Fair Value Measurements, in the Notes to Consolidated Financial Statements for additional information regarding our investment in NOVONIX.
Current wording
Net interest expense consists of interest and financing expense, net of interest income and capitalized interest. Corporate overhead and other includes general and administrative expenses, technology costs, environmental costs associated with sites no longer in operation, restructuring costs related to our business transformation, foreign currency transaction gains and losses and other costs not directly associated with an operating segment. Effective in the first quarter of 2026, activities associated with the decommissioning and redevelopment of our idled Los Angeles Refinery site are also included in corporate overhead and other. Corporate and Other also includes the change in the fair value of our investment in NOVONIX. See Note 14—Fair Value Measurements, in the Notes to Consolidated Financial Statements for additional information regarding our investment in NOVONIX.
Previous wording
Net interest expense increased $34 million and $65 million for the three and nine months ended September 30, 2025, respectively, primarily due to higher average debt balances.
Current wording
Net interest expense increased $68 million for the three months ended March 31, 2026, primarily due to higher average debt balances.
Previous wording
To meet our short- and long-term liquidity requirements, we use a variety of funding sources but rely primarily on cash generated from operating activities and debt financing. During the first nine months of 2025, we generated $2.2 billion of cash from operations. We received proceeds from asset dispositions of $2 billion and received $2 billion from net debt borrowings. We funded capital expenditures and investments of $1.6 billion and an acquisition of $2.2 billion, net of cash acquired. Additionally, we paid $933 million to repurchase shares of our common stock and paid $1.4 billion of dividends to our common stockholders. During the first nine months of 2025, cash and cash equivalents, including cash classified within assets held for sale, increased by $212 million. At this time, we believe that our cash on hand, as well as the sources of liquidity described herein, will be sufficient to fund our obligations over the short- and long-term.
Current wording
To meet our short- and long-term liquidity requirements, we use a variety of funding sources but rely primarily on cash generated from operating activities and debt financing. During the first three months of 2026, we had net debt borrowings of $7.7 billion and increased cash and cash equivalents by $4 billion. We used cash to fund operating activities of $2.3 billion, capital expenditures and investments of $582 million, paid $509 million of dividends to our common stockholders, and repurchased $269 million of our common stock. At this time, we believe that our cash on hand, as well as the sources of liquidity described herein, will be sufficient to fund our obligations over the short- and long-term.
Previous wording
Our operating cash flows are also impacted by distribution decisions made by our equity affiliates. During the first nine months of 2025, cash from operations included aggregate distributions of $783 million from our equity affiliates, while cash from operations during the first nine months of 2024 included aggregate distributions of $1,045 million from our equity affiliates. We cannot control the amount of future dividends from equity affiliates; therefore, future dividend payments by these equity affiliates are not assured.
Current wording
Our operating cash flows are also impacted by distribution decisions made by our equity affiliates. During the first three months of 2026, cash from operations included aggregate distributions of $166 million from our equity affiliates, while cash from operations during the first three months of 2025 included aggregate distributions of $273 million from our equity affiliates. We cannot control the amount of future dividends from equity affiliates; therefore, future dividend payments by these equity affiliates are not assured.
Previous wording
On September 30, 2024, Phillips 66 Company entered into a 364-day, $500 million accounts receivable securitization facility (the Receivables Securitization Facility). Under the Receivables Securitization Facility, Phillips 66 Company sells or contributes on an ongoing basis, certain of its receivables, together with related security and interests in the proceeds thereof, to its wholly owned subsidiary, Phillips 66 Receivables LLC (P66 Receivables), a consolidated and bankruptcy-remote special purpose entity created for the sole purpose of transacting under the Receivables Securitization Facility. On April 1, 2025, Phillips 66 Company amended the Receivables Securitization Facility to, among other things, increase the maximum size of the Receivables Securitization Facility from $500 million to $1 billion. On September 29, 2025, Phillips 66 Company amended the Receivables Securitization Facility to, among other things, increase the maximum size of the Receivables Securitization Facility from $1 billion to $1.25 billion and extend the term of the facility through September 28, 2026. Under the amended Receivables Securitization Facility, P66 Receivables may borrow and incur indebtedness from, and/or sell certain accounts receivable in an amount not to exceed $1.25 billion in the aggregate, and will secure its obligations with a pledge of undivided interests in such accounts receivable, together with related security and interests in the proceeds thereof, to PNC Bank, National Association, as Administrative Agent, for the benefit of the secured parties thereunder. Accounts outstanding under the Receivables Securitization Facility accrue interest at an adjusted term Secured Overnight Financing Rate (SOFR) plus the applicable margin. In all instances, Phillips 66 Company retains the servicing of the accounts receivable transferred.
Current wording
On September 30, 2024, Phillips 66 Company entered into a 364-day, $500 million accounts receivable securitization facility (the Receivables Securitization Facility). Under the Receivables Securitization Facility, Phillips 66 Company sells or contributes on an ongoing basis, certain of its receivables, together with related security and interests in the proceeds thereof, to its wholly owned subsidiary, Phillips 66 Receivables LLC (P66 Receivables), a consolidated and bankruptcy-remote special purpose entity created for the sole purpose of transacting under the Receivables Securitization Facility. During 2025, Phillips 66 Company amended the Receivables Securitization Facility to, among other things, increase the maximum size of the Receivables Securitization Facility to $1.25 billion and extend the term of the facility through September 28, 2026. On March 13, 2026, Phillips 66 Company amended the Receivables Securitization Facility to, among other things, increase the maximum size of the Receivables Securitization Facility from $1.25 billion to $1.75 billion and permit P66 Receivables to request a future increase in the maximum facility size to up to $2.0 billion. Under the amended Receivables Securitization Facility, P66 Receivables may borrow and incur indebtedness from, and/or sell certain accounts receivable in an amount not to exceed $1.75 billion in the aggregate, and will secure its obligations with a pledge of undivided interests in such receivables, together with related security and interests in the proceeds thereof, to PNC Bank, National Association, as Administrative Agent, for the benefit of the secured parties thereunder. Accounts receivable outstanding under the Receivables Securitization Facility accrue interest at an adjusted term SOFR plus the applicable margin. In all instances, Phillips 66 Company retains the servicing of the accounts receivables transferred.
Previous wording
Sales of accounts receivable under the Receivables Securitization Facility meet the sale criteria under ASC 860, Transfers and Servicing and are derecognized from the consolidated balance sheet. P66 Receivables guarantees payment, in full, for accounts receivable sold to the purchasers. For the three months ended September 30, 2025, we sold $160 million of accounts receivable for cash proceeds under the Receivables Securitization Facility. For the nine months ended September 30, 2025, we sold $593 million in accounts receivable in exchange for cash proceeds of $290 million, and a $303 million reduction in our borrowings under the Receivables Securitization Facility was recognized as a non-cash financing transaction. We recognized immaterial charges associated with the transfer of financial assets, which are included as a component within the line item “Selling, general and administrative expense” on our consolidated statement of income during the three and nine months ended September 30, 2025.
Current wording
Accounts receivable sold under the Receivables Securitization Facility meet the sale criteria under ASC 860, Transfers and Servicing, and are derecognized from the consolidated balance sheet. P66 Receivables guarantees payment, in full, for accounts receivable sold to the purchasers. For the three months ended March 31, 2026, we sold $264 million of accounts receivable in exchange for a $264 million reduction in our borrowings under the Receivables Securitization Facility, which was recognized as a non-cash financing transaction. For the three months ended March 31, 2025, we sold $130 million of accounts receivables for cash proceeds under the Receivables Securitization Facility. We recognized immaterial charges associated with the transfers of financial assets, which are included as a component within the line item “Selling, general and administrative expense” on our consolidated statement of income, during the three months ended March 31, 2026 and 2025.
Previous wording
At September 30, 2025, we had utilized $160 million of the $1.25 billion capacity on our Receivable Securitization Facility from sold accounts receivable not yet remitted to the Administrative Agent. We had no outstanding borrowings under the Receivable Securitization Facility at September 30, 2025. At December 31, 2024, we had utilized the full $500 million capacity of our Receivables Securitization Facility from $125 million of sold accounts receivable not yet remitted to the Administrative Agent and $375 million of outstanding borrowings. The outstanding borrowings at December 31, 2024, were secured by approximately $4.6 billion of accounts receivable held by P66 Receivables at December 31, 2024, which are included within the “Accounts and notes receivable” line item on our consolidated balance sheet.
Current wording
At March 31, 2026, we had utilized $650 million of the $1.75 billion capacity of the Receivables Securitization Facility from $266 million of sold accounts receivable not yet remitted to the Administrative Agent and $384 million of outstanding borrowings. At December 31, 2025, we had utilized $367 million of the $1.25 billion capacity of the Receivables Securitization Facility from $167 million of sold accounts receivable not yet remitted to the Administrative Agent and $200 million of outstanding borrowings.
Previous wording
On January 13, 2025, we entered into a $200 million uncommitted credit facility (the 2025 Uncommitted Facility) with Phillips 66 Company as the borrower and Phillips 66 as the guarantor. The 2025 Uncommitted Facility contains covenants and events of default customary for unsecured uncommitted facilities. The 2025 Uncommitted Facility has no commitment fees or compensating balance requirements. Outstanding borrowings under the 2025 Uncommitted Facility bear interest at a rate of either (a) the adjusted term SOFR plus the applicable margin, (b) the adjusted daily simple SOFR plus the applicable margin or (c) the base rate, in each case plus the applicable margin. Each borrowing matures six months from the date of such borrowing. We may at any time prepay outstanding borrowings, in whole or in part, without premium or penalty. At September 30, 2025, $200 million of borrowings were outstanding under the 2025 Uncommitted Facility.
Current wording
On January 13, 2025, we entered into a $200 million uncommitted credit facility (the 2025 Uncommitted Facility) with Phillips 66 Company as the borrower and Phillips 66 as the guarantor. The 2025 Uncommitted Facility contains covenants and events of default customary for unsecured uncommitted facilities. The 2025 Uncommitted Facility has no commitment fees or compensating balance requirements. Outstanding borrowings under the 2025 Uncommitted Facility bear interest at a rate of either (a) the adjusted term SOFR plus the applicable margin, (b) the adjusted daily simple SOFR plus the applicable margin or (c) the base rate, in each case plus the applicable margin. Each borrowing matures six months from the date of such borrowing. We may at any time prepay outstanding borrowings, in whole or in part, without premium or penalty. On March 26, 2026, Phillips 66 amended the 2025 Uncommitted Facility to increase the capacity by $100 million. At March 31, 2026, the entire $300 million was outstanding, while at December 31, 2025, no borrowings were outstanding under the 2025 Uncommitted Facility.
Previous wording
On June 25, 2024, we entered into a $400 million uncommitted credit facility (the 2024 Uncommitted Facility) with Phillips 66 Company as the borrower and Phillips 66 as the guarantor. The 2024 Uncommitted Facility contains covenants and events of default customary for unsecured uncommitted facilities. The 2024 Uncommitted Facility has no commitment fees or compensating balance requirements. Outstanding borrowings under the 2024 Uncommitted Facility bear interest at a rate of either (a) the adjusted term SOFR, (b) the adjusted daily simple SOFR or (c) the reference rate, in each case plus the applicable margin. Each borrowing matures six months from the date of such borrowing. We may at any time prepay outstanding borrowings, in whole or in part, without premium or penalty. At September 30, 2025, and December 31, 2024, $400 million of borrowings were outstanding under the 2024 Uncommitted Facility.
Current wording
On June 25, 2024, we entered into a $400 million uncommitted credit facility (the 2024 Uncommitted Facility) with Phillips 66 Company as the borrower and Phillips 66 as the guarantor. The 2024 Uncommitted Facility contains covenants and events of default customary for unsecured uncommitted facilities. The 2024 Uncommitted Facility has no commitment fees or compensating balance requirements. Outstanding borrowings under the 2024 Uncommitted Facility bear interest at a rate of either (a) the adjusted term SOFR, (b) the adjusted daily simple SOFR or (c) the reference rate, in each case plus the applicable margin. Each borrowing matures six months from the date of such borrowing. We may at any time prepay outstanding borrowings, in whole or in part, without premium or penalty. At March 31, 2026, and December 31, 2025, no borrowings were outstanding under the 2024 Uncommitted Facility.
Previous wording
Phillips 66 also has a $5 billion uncommitted commercial paper program for short-term working capital needs that is supported by the Facility. Commercial paper maturities are contractually limited to less than one year. At September 30, 2025, we had $897 million borrowings outstanding under this program, while at December 31, 2024, $435 million of commercial paper had been issued under this program.
Current wording
Phillips 66 also has a $5 billion uncommitted commercial paper program for short-term working capital needs that is supported by the Facility. Commercial paper maturities are contractually limited to less than one year. At March 31, 2026, we had $5 billion borrowings outstanding under this program, while at December 31, 2025, $200 million of commercial paper had been issued under this program.
Previous wording
At September 30, 2025, and December 31, 2024, we had approximately $5.2 billion and $4.6 billion, respectively, of total committed capacity available under the credit facilities described above.
Current wording
At March 31, 2026, and December 31, 2025, we had approximately $0.8 billion and $5.7 billion, respectively, of total committed capacity available under the credit facilities described above. At March 31, 2026, and December 31, 2025, we had $6 billion and $6.8 billion of total liquidity, respectively, including cash and cash equivalents and total committed capacity available under credit facilities. Although our total liquidity remained strong, given the uncertainty from geopolitical events in the Middle East during the first quarter of 2026 we shifted to prioritizing cash and cash equivalents over committed capacity available under credit facilities.
Previous wording
Under the operating lease agreement on our headquarters facility in Houston, Texas, we had the option at the end of the existing lease term to request to renew the lease, purchase the facility or assist the lessor in marketing it for resale. In September 2025, we amended and extended the lease term to September 2030. Under the new operating lease agreement, we have a residual value guarantee with a maximum potential future exposure of $404 million at September 30, 2025. We also have residual value guarantees associated with railcar, airplane and truck leases with maximum potential future exposures totaling $174 million. These leases have remaining terms of one to ten years.
Current wording
Under the operating lease agreement for our headquarters facility in Houston, Texas, we have the option, at the end of the lease term in September 2030, to request to renew the lease, purchase the facility or assist the lessor in marketing it for resale. This agreement includes a residual value guarantee with a maximum potential future exposure of $404 million at March 31, 2026. In addition, we have residual value guarantees associated with railcar, airplane and truck leases with maximum potential future exposures totaling $176 million. These leases have remaining terms of one to ten years.
Previous wording
In 2020, the trial court presiding over litigation brought by the Standing Rock Sioux Tribe (the Tribe) ordered the U.S. Army Corps of Engineers (USACE) to prepare an Environmental Impact Statement (EIS) addressing an easement under Lake Oahe in North Dakota. The trial court later vacated the easement. Although the easement is vacated, the USACE has no plans to stop pipeline operations while it proceeds with the EIS, and the Tribe’s request for a shutdown was denied in May 2021. In June 2021, the trial court dismissed the litigation entirely. Once the EIS is completed, new litigation or challenges may be filed.
Current wording
In 2020, the trial court presiding over litigation brought by the Standing Rock Sioux Tribe (the Tribe) ordered the U.S. Army Corps of Engineers (USACE) to prepare an Environmental Impact Statement (EIS) addressing environmental impacts from an easement allowing the passage of the Dakota Access Pipeline (DAPL) under Lake Oahe in North Dakota. Later in 2020, the trial court vacated the easement, but operations have been allowed to continue while the USACE proceeds with the EIS as ordered. The Tribe’s requests for a shutdown have been denied. In March 2025, the trial court dismissed a second lawsuit filed by the Tribe, again challenging USACE’s allowance of pipeline operations while the EIS process proceeds. The Tribe’s lawsuit was premature, and the trial court held that it cannot be refiled until after a final EIS is issued.
Previous wording
Access in the first quarter of 2024. At September 30, 2025, the aggregate principal amount outstanding of Dakota Access’ senior unsecured notes was $850 million.
Current wording
Dakota Access and ETCO have guaranteed repayment of senior unsecured notes issued by a wholly owned subsidiary of Dakota Access. At March 31, 2026, the aggregate principal amount outstanding of Dakota Access’ senior unsecured notes was $850 million.
Previous wording
Our debt balance at September 30, 2025, and December 31, 2024, was $21.8 billion and $20.1 billion, respectively. Our total debt-to-capital ratio was 44% and 41% at September 30, 2025, and December 31, 2024, respectively.
Current wording
Our debt balance at March 31, 2026, and December 31, 2025, was $27.1 billion and $19.7 billion, respectively. Our total debt-to-capital ratio was 48% and 39% at March 31, 2026, and December 31, 2025, respectively.
Previous wording
On February 18, 2025, upon maturity, Phillips 66 Partners repaid its 3.605% Senior Notes due February 2025, with an aggregate principal amount of $59 million.
Current wording
On February 17, 2026, upon maturity, Phillips 66 repaid the remaining $100 million outstanding on its 1.300% Senior Notes due February 2026, with an aggregate principal amount of $500 million.
Previous wording
On April 21, 2025, our Board of Directors declared a quarterly cash dividend of $1.20 per common share. This dividend was paid on June 2, 2025, to shareholders of record as of the close of business on May 19, 2025. On July 10, 2025, our Board of Directors declared a quarterly cash dividend of $1.20 per common share. This dividend was paid on September 2, 2025, to shareholders of record as of the close of business on August 19, 2025. On October 8, 2025, our Board of Directors declared a quarterly cash dividend of $1.20 per common share. This dividend is payable on December 1, 2025, to shareholders of record as of the close of business on November 17, 2025.
Current wording
On February 11, 2026, our Board of Directors declared a quarterly cash dividend of $1.27 per common share. This dividend was paid on March 4, 2026, to shareholders of record at the close of business on February 25, 2026. On April 17, 2026, our Board of Directors declared a quarterly cash dividend of $1.27 per common share. This dividend is payable on June 1, 2026, to shareholders of record as of the close of business on May 18, 2026.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The accrued amounts totaling $887 million and $867 million as of March 31, 2026 and December 31, 2025, respectively, are reflected as “Other liabilities and deferred credits” on our consolidated balance sheet. However, it is reasonably possible that the estimate of the loss could change based on the progression of the case, including the appeals process. If information were to become available that would allow us to reasonably estimate a range of potential exposure in an amount higher or lower than the amount already accrued, we would adjust our accrued liabilities accordingly. While Phillips 66 Company believes the jury verdict is not legally or factually supported, there can be no assurances that such defense efforts will be successful. Until the final resolution of this matter, we may be exposed to losses in excess of the amount recorded, and such amounts may have a material adverse effect on our financial position.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
See the “Executive Overview and Business Environment” section for information on market factors impacting this quarter’s results.