Phillips 66
For the period ended Sep 30, 2026. Filed Oct 28, 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.
Sep 30, 2026 · Filed Oct 28, 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 2026-06-30; filed 2026-08-05.
0001534701-26-000032
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-28.
0001534701-26-000037
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 213 previous paragraphs and 221 current paragraphs.
144 unchanged; 62 reworded; 15 added; 6 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 25 previous and 25 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 (15)
Current report
•During the third quarter of 2026, we executed a joint venture agreement and made a final investment decision on the proposed Western Gateway Pipeline system. This is a proposed 1,300-mile refined products pipeline system that will connect our Central Corridor and Gulf Coast refining assets to our West Coast and Southwest Marketing assets. Under the agreement, Phillips 66 owns 49.9% of the system.
Current report
Equity in earnings of affiliates increased $224 million and $805 million for the three and nine months ended September 30, 2026, respectively. The increases for both periods of 2026 were primarily due to higher equity earnings from CPChem and Excel Paralubes LLC (Excel Paralubes). The increase in equity earnings from Excel Paralubes was primarily due to higher margins resulting from increased prices, partially offset by higher feedstock costs. See the Chemicals segment analysis in the “Segment Results” section for additional information regarding CPChem.
Current report
Net gain on dispositions decreased 88% for the nine months ended September 30, 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 disposition.
Current report
Selling, general and administrative expenses decreased 21% and 10% for the three and nine months ended September 30, 2026, respectively, primarily due to lower legal accruals related to litigation with Propel Fuels, Inc. (Propel Fuels), partially offset by higher employee-related expenses. Additionally, the nine months ended September 30, 2026, was impacted by lower costs from the partial sale of Germany and Austria Marketing. In the Notes to Consolidated Financial Statements, see Note 6—Investments, Loans and Long-Term Receivables, for additional information regarding the partial sale of Germany and Austria Marketing and Note 12—Contingencies and Commitments, for additional information on ongoing litigation with Propel Fuels.
Current report
Impairments decreased $919 million and $932 million for the three and nine months ended September 30, 2026, respectively. The decreases for both periods of 2026 were primarily due to a before-tax impairment of $948 million recognized in the third quarter of 2025 related to our equity investment in WRB. See Note 6—Investments, Loans and Long-Term Receivables, in the Notes to Consolidated Financial Statements for additional information.
Current report
Results from our Transportation business increased $23 million and $35 million for the three and nine months ended September 30, 2026, respectively. The increase for the three months ended September 30, 2026, primarily reflected the 2025 retirement of a rail rack at the Los Angeles Refinery and results from the recently acquired Lindsey Oil Refinery logistics assets, partially offset by higher employee-related expenses. The increase for the nine months ended September 30, 2026, was primarily due to increased volumes supporting Refining and results from the Lindsey Oil Refinery logistics assets, partially offset by lower activity associated with our crude processing and logistics assets in California following the idling of the Los Angeles Refinery.
Current report
Results from the Renewable Fuels segment increased $234 million and $1,055 million for the three and nine months ended September 30, 2026, respectively. The increases for the three and nine months ended September 30, 2026, were primarily due to higher values of regulatory credits, partially offset by inventory impacts. Additionally, the three months ended September 30, 2026, was also offset by higher volumes and costs.
Current report
Junior Subordinated Notes Issuances
Current 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:
Current report
•$1 billion aggregate principal amount of 5.875% Series A Junior Subordinated Notes due 2056 (Series A 2056 Notes).
Current report
•$1 billion aggregate principal amount of 6.200% Series B Junior Subordinated Notes due 2056 (Series B 2056 Notes).
Current 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.
Current report
On October 9, 2026, the Tribe filed suit in the U.S. District Court for the District of Columbia against the USACE, the Pipeline and Hazardous Materials Safety Administration (PHMSA), and federal officials, challenging the pipeline’s expanded operating capacity of 1.1 million barrels per day. Similar to the last lawsuit from the Tribe, they seek to vacate the easement. Additionally, they seek vacatur of the ROD and PHMSA’s response plan approvals, as well as injunctive relief restricting operations through the Lake Oahe segment at the expanded capacity.
Current report
On July 31, 2026, Phillips 66 Company repaid the remaining $1.25 billion outstanding under the Term Loan Agreement, which had a maturity date of March 2027.
Current report
Capital spending for the Renewable Fuels segment during the first nine months of 2026 was $24 million. Capital spending focused on improving feedstock sourcing capability, product mix flexibility, and other reliability projects on existing assets.
Removed paragraphs (6)
Previous report
Equity in earnings of affiliates increased $482 million and $581 million for the three and six months ended June 30, 2026, respectively. The increases for both periods of 2026 were primarily due to higher equity earnings from CPChem. The increase for the six months ended June 30, 2026, was also driven by equity losses from WRB Refining LP (WRB) in the first half of 2025, compared to no equity earnings from WRB in the first half of 2026 due to the acquisition of 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.
Previous report
Net gain on dispositions for the three months ended June 30, 2026, was $117 million, compared with a Net loss on dispositions of $93 million for the three months ended June 30, 2025. This increase was primarily due to a before-tax gain of $110 million recorded in the second quarter of 2026, related to post-closing adjustments from the partial sale of Germany and Austria Marketing, as well as a before-tax loss recognized in the second quarter of 2025, primarily associated with an aggregate unrealized loss of $89 million on foreign currency forward contracts entered into in connection with this transaction. For the six months ended June 30, 2026 and 2025, we had a Net gain on dispositions of $123 million and $994 million, respectively. This 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 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 dispositions.
Previous report
Results from our Transportation business for the three and six months ended June 30, 2026, were in line with results for the three and six months ended June 30, 2025.
Previous report
Results from the Renewable Fuels segment increased $677 million and $821 million for the three and six months ended June 30, 2026, respectively, primarily due to higher values of regulatory credits.
Previous report
Because the ROD has been issued, challenges to USACE’s final decision and environmental analysis may now be brought forward. The Tribe and potentially affiliated environmental groups could file a new challenge in federal district court in Washington, D.C.
Previous report
Capital spending for the Renewable Fuels segment during the first six months of 2026 was $16 million. The capital spending was focused on product mix optimization, logistics and improving feed flexibility on existing assets.
Reworded paragraphs (62)
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 June 30, 2026, we had total assets of $81.8 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 September 30, 2026, we had total assets of $86.0 billion. Our common stock trades on the New York Stock Exchange under the symbol PSX.
Previous wording
In the second quarter of 2026, we reported earnings of $3.8 billion and generated $7.3 billion of cash from operations. We had net debt repayments of $6.7 billion, funded capital expenditures and investments of $726 million, paid dividends of $508 million to common stockholders and repurchased $379 million of our common stock. The cash provided by operating activities was due to higher earnings, primarily driven by an increase in realized refining margins and favorable net working capital impacts. Net working capital reflected favorable impacts from the net timing of payments and collections, lower inventory, and higher taxes and other accruals, partially offset by higher prepaid expenses and other current assets. As of June 30, 2026, we had $4.1 billion of cash and cash equivalents and $6.4 billion of total committed capacity available under our credit facilities.
Current wording
In the third quarter of 2026, we reported earnings of $5.6 billion and generated $7.3 billion of cash from operations. We had net debt repayments and repurchases of $2.1 billion, funded capital expenditures and investments of $680 million, paid dividends of $504 million to common stockholders and repurchased $2.3 billion of our common stock. The cash provided by operating activities was due to higher earnings, primarily driven by an increase in realized refining margins. As of September 30, 2026, we had $5.8 billion of cash and cash equivalents and $6.4 billion of total committed capacity available under our credit facilities.
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.
Current wording
•Our financial targets through 2027 reflect our plans to organically grow our Midstream and Chemicals businesses and invest in low-capital, high-return projects in Refining. Following the Western Gateway final investment decision and other recent project approvals, we expect 2027 annual capital expenditures and investments to exceed our previously communicated target of approximately $2.5 billion. The amount and timing of the increase remain subject to finalizing the 2027 capital budget.
Previous wording
•In April and July 2026, our Board of Directors declared quarterly cash dividends of $1.27 per common share, reflecting our commitment to a secure, competitive and growing dividend.
Current wording
•In October 2026, our Board of Directors declared a quarterly cash dividend of $1.33 per common share, representing a $0.06 increase, reflecting our commitment to a secure, competitive and growing dividend.
Previous wording
•During the six months ended June 30, 2026, our net cash provided by operating activities was $5 billion and we returned $1.7 billion to shareholders through share repurchases and dividends.
Current wording
•During the nine months ended September 30, 2026, our net cash provided by operating activities was $12.3 billion and we returned $4.4 billion to shareholders through share repurchases and dividends.
Previous 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 $0.73 per gallon during the second quarter of 2026, compared with $0.64 per gallon during the second quarter of 2025. The Henry Hub natural gas price was $2.93 per million British thermal units (MMBtu) during the second quarter of 2026, compared with $3.16 per MMBtu during the second quarter of 2025. The increase in NGL prices was primarily due to a tight supply market with fewer cargos from the Middle East, while the decrease in natural gas prices was due to increased natural gas supply and the end of the winter demand season.
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 $0.74 per gallon during the third quarter of 2026, compared with $0.60 per gallon during the third quarter of 2025. The Henry Hub natural gas price was $2.88 per million British thermal units (MMBtu) during the third quarter of 2026, compared with $3.03 per MMBtu during the third quarter of 2025. The increase in NGL prices was primarily due to a tight supply market with fewer cargos from the Middle East, while the decrease in natural gas prices was due to increased natural gas supply.
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 43.6 cents per pound in the second quarter of 2026, compared with 7.4 cents per pound in the second quarter of 2025. The increase was mainly due to lower plant utilizations in Asia that were driven by Middle East supply concerns.
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 18.8 cents per pound in the third quarter of 2026, compared with 7.6 cents per pound in the third quarter of 2025. The increase was mainly due to lower plant utilizations in Asia driven by lower Middle East supply and higher feedstock costs.
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 $41.63 per barrel during the second quarter of 2026, from an average of $21.65 per barrel during the second quarter of 2025. The increase in the composite market crack spread was primarily driven by low seasonal product inventories, particularly diesel, 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 $93.21 per barrel during the second quarter of 2026, from an average of $63.86 per barrel during the second quarter of 2025. The increase in crude oil prices was primarily driven by geopolitical events in the Middle East restricting global crude 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 $60.17 per barrel during the third quarter of 2026, from an average of $23.64 per barrel during the third quarter of 2025. The increase in the composite market crack spread was primarily driven by low seasonal global product inventories, particularly diesel, and geopolitical events reducing global product supply. The price of U.S. benchmark crude oil, West Texas Intermediate (WTI) at Cushing, Oklahoma, increased to an average of $86.19 per barrel during the third quarter of 2026, from an average of $65.03 per barrel during the third quarter of 2025. The increase in crude oil prices was primarily driven by geopolitical events in the Middle East restricting global crude supply and changing trade flows.
Previous 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.
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, logistics, 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 six months ended June 30, 2026, is based on a comparison with the corresponding period of 2025.
Current wording
Unless otherwise indicated, discussion of results for the three and nine months ended September 30, 2026, is based on a comparison with the corresponding period of 2025.
Previous wording
Net income attributable to Phillips 66 in the second quarter of 2026 was $3.8 billion, compared with $0.9 billion in the second quarter of 2025. Net income attributable to Phillips 66 for the six months ended June 30, 2026, was $4.1 billion, compared with $1.4 billion for the six months ended June 30, 2025.
Current wording
Net income attributable to Phillips 66 in the third quarter of 2026 was $5.6 billion, compared with $133 million in the third quarter of 2025. Net income attributable to Phillips 66 for the nine months ended September 30, 2026, was $9.7 billion, compared with $1.5 billion for the nine months ended September 30, 2025.
Previous wording
The increase in net income attributable to Phillips 66 in the second quarter of 2026 was primarily due to improved realized margins for our Refining segment and higher values of regulatory credits in the Renewable Fuels segment.
Current wording
The increase in net income attributable to Phillips 66 in the third quarter of 2026 was primarily due to improved realized margins for our Refining segment and a before-tax impairment of $948 million recorded in the third quarter of 2025 related to our equity investment in WRB Refining LP (WRB).
Previous wording
The increase in net income attributable to Phillips 66 for the six months ended June 30, 2026, was primarily due to improved realized margins for our Refining segment and higher values of regulatory credits in the Renewable Fuels segment, partially offset by 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.
Current wording
The increase in net income attributable to Phillips 66 for the nine months ended September 30, 2026, was primarily due to improved realized margins for our Refining segment, higher values of regulatory credits in the Renewable Fuels segment, and a before-tax impairment of $948 million recorded in the third quarter of 2025 related to our equity investment in WRB. These increases were partially offset by 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 activity.
Previous wording
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. Additionally, see the “Segment Results” section for additional information on our segment results.
Current wording
In the Notes to Consolidated Financial Statements, see Note 6—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, and Note 13—Derivatives and Financial Instruments for additional information. Additionally, see the “Segment Results” section for additional information on our segment results.
Previous wording
Sales and other operating revenues increased 53% and 31% for the three and six months ended June 30, 2026, respectively. Purchased crude oil and products increased 50% and 28% for the three and six months ended June 30, 2026, respectively. The increases in both line items for the three and six months ended June 30, 2026, were primarily due to higher prices for refined petroleum products and crude oil, partially offset by impacts associated with the sale of 65% of our interest in Germany and Austria retail marketing business (Germany and Austria Marketing) in December 2025. Additionally, the six months ended June 30, 2026, was impacted by losses from commodity derivative activity. See Note 13—Derivatives and Financial Instruments, in the Notes to Consolidated Financial Statements for additional information.
Current wording
Sales and other operating revenues increased 46% and 36% for the three and nine months ended September 30, 2026, respectively. Purchased crude oil and products increased 35% and 31% for the three and nine months ended September 30, 2026, respectively. The increases in both line items for the three and nine months ended September 30, 2026, were primarily due to higher prices for refined petroleum products, crude oil, and NGL, partially offset by impacts associated with the sale of 65% of our interest in the Germany and Austria retail marketing business (Germany and Austria Marketing) in December 2025 and losses from commodity derivative activity. In the Notes to Consolidated Financial Statements, see Note 6—Investments, Loans and Long-Term Receivables, for additional information regarding the partial sale of Germany and Austria Marketing and Note 13—Derivatives and Financial Instruments for additional information.
Previous wording
Other income increased $149 million and $297 million for the three and six months ended June 30, 2026, respectively. The increases for both periods were primarily attributable to higher results from trading activities, Clean Fuel Production credits and interest income due to increased average cash balances.
Current wording
Other income increased $288 million and $585 million for the three and nine months ended September 30, 2026, respectively. The increases for both periods were primarily attributable to higher results from trading activities and Clean Fuel Production credits.
Previous wording
Operating expenses increased $370 million and $629 million for the three and six months ended June 30, 2026, respectively. The increases for both periods were primarily driven by our acquisition of WRB in October 2025, partially offset by lower costs following the cessation of operations at the Los Angeles Refinery.
Current wording
Operating expenses increased 25% and 22% for the three and nine months ended September 30, 2026, respectively. The increases for both periods were primarily driven by our acquisition of WRB in October 2025 and higher employee-related expenses. The increase for the nine months ended September 30, 2026, was partially offset by lower costs following the cessation of operations at the Los Angeles Refinery. In the Notes to Consolidated Financial Statements, see Note 2—Business Combinations for additional information on the WRB acquisition and Note 7—Properties, Plants and Equipment for additional information on the idled Los Angeles Refinery.
Previous wording
Depreciation and amortization decreased 28% and 29% for the three and six months ended June 30, 2026, respectively. These decreases were primarily due to depreciation recorded in 2025 for the Los Angeles Refinery. See Note 7—Properties, Plants and Equipment, in the Notes to Consolidated Financial Statements for additional information.
Current wording
Depreciation and amortization decreased 28% and 29% for the three and nine months ended September 30, 2026, respectively. These decreases were primarily due to depreciation recorded in 2025 prior to cessation of operations at the Los Angeles Refinery in the fourth quarter of 2025. See Note 7—Properties, Plants and Equipment, in the Notes to Consolidated Financial Statements for additional information.
Previous wording
Taxes other than income taxes decreased $91 million and $90 million for the three and six months ended June 30, 2026, respectively. The decreases for both periods were primarily driven by lower customs duties.
Current wording
Taxes other than income taxes decreased $20 million and $110 million for the three and nine months ended September 30, 2026, respectively. The decreases for both periods were primarily driven by lower customs duties.
Previous wording
Interest and debt expense increased 19% and 24% for the three and six months ended June 30, 2026, respectively, primarily due to higher average debt balances.
Current wording
Interest and debt expense increased 13% for the nine months ended September 30, 2026, primarily due to higher average debt balances. See Note 9—Debt, in the Notes to Consolidated Financial Statements for additional information.
Previous wording
Income tax expense increased $880 million and $799 million for the three and six months ended June 30, 2026, respectively, primarily due to higher income before income taxes. See Note 20—Income Taxes, in the Notes to Consolidated Financial Statements for information regarding our effective income tax rates.
Current wording
Income tax expense increased $1.4 billion and $2.2 billion for the three and nine months ended September 30, 2026, respectively, primarily due to higher 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 decreased $26 million for the six months ended June 30, 2026, primarily due to lower earnings from DCP Midstream, LP (DCP LP) following the sale of its equity investment in Gulf Coast Express Pipeline LLC (GCX) in the first quarter of 2025. See Note 6—Investments, Loans and Long-Term Receivables, in the Notes to Consolidated Financial Statements for additional information.
Current wording
Net income attributable to noncontrolling interests decreased 32% and 36% for the three and nine months ended September 30, 2026, respectively. The decreases for both periods of 2026 were due to lower results from DCP Midstream, LP (DCP LP), driven by higher fees associated with the early retirement of debt in 2026. Additionally, the nine months ended September 30, 2026, was impacted by lower earnings from DCP LP following the sale of its equity investment in Gulf Coast Express Pipeline LLC (GCX) in the first quarter of 2025. In the Notes to Consolidated Financial Statements, see Note 6—Investments, Loans and Long-Term Receivables, for additional information regarding the sale of GCX and Note 9—Debt for additional information.
Previous wording
Results from our Midstream segment increased $54 million and decreased $106 million for the three and six months ended June 30, 2026, respectively.
Current wording
Results from our Midstream segment increased $5 million and decreased $101 million for the three and nine months ended September 30, 2026, respectively.
Previous wording
Results from our NGL business increased $46 million and decreased $118 million for the three and six months ended June 30, 2026, respectively. The increase in the three months ended June 30, 2026, was primarily driven by widening natural gas transportation differentials out of the Permian Basin, as well as increased wellhead and fractionation volumes, partially offset by the effects of customer recontracting. The decrease in the six months ended June 30, 2026, was primarily due to the effects of customer recontracting, 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, and winter weather impacts, partially offset by widening natural gas transportation differentials out of the Permian Basin.
Current wording
Results from our NGL business decreased $18 million and $136 million for the three and nine months ended September 30, 2026, respectively. The decreases for the three and nine months ended September 30, 2026, were primarily driven by the effects of customer recontracting, partially offset by widening natural gas transportation differentials out of the Permian Basin. Additionally, the decrease for the nine months ended September 30, 2026, was due 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 and accelerated depreciation recorded in 2026 related to a Permian Basin gas plant.
Previous 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.
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. See Note 7—Properties, Plants and Equipment, in the Notes to Consolidated Financial Statements for additional information regarding the acquired assets and infrastructure of the Lindsey Oil Refinery in April 2026 and on the idled Los Angeles Refinery.
Previous wording
Results from the Chemicals segment increased $384 million and $385 million for the three and six months ended June 30, 2026, respectively, primarily due to improved polyethylene margins driven by higher sales prices.
Current wording
Results from the Chemicals segment increased $135 million and $520 million for the three and nine months ended September 30, 2026, respectively, primarily due to improved margins driven by higher sales prices, mainly for polyethylene.
Previous wording
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 wording
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. See Note 2—Business Combinations, in the Notes to Consolidated Financial Statements for additional information.
Previous 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. 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 wording
On October 1, 2025, we acquired the remaining 50% ownership interest in WRB from subsidiaries of Cenovus Energy Inc. (Cenovus). 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. In the Notes to Consolidated Financial Statements, see Note 2—Business Combinations and Note 7—Properties, Plants and Equipment, for additional information.
Previous wording
Results from our Refining segment increased $2,703 million and $3,848 million for the three and six months ended June 30, 2026, respectively. The increase in the three months ended June 30, 2026, was primarily due to higher realized margins as a result of improved market crack spreads and inventory impacts, including commodity derivative activity, partially offset by increased feedstock costs. The increase in the six months ended June 30, 2026, was primarily driven by higher realized margins and volumes. The increase in realized margins in the six months ended June 30, 2026, was due to improved market crack spreads, partially offset by increased feedstock costs. See Note 13—Derivatives and Financial Instruments, in the Notes to Consolidated Financial Statements for additional information and the “Executive Overview and Business Environment” section for information on industry crack spreads and other market factors impacting this quarter’s results.
Current wording
Results from our Refining segment increased $6.5 billion and $10.4 billion for the three and nine months ended September 30, 2026, respectively. The increase for the three and nine months ended September 30, 2026, was primarily due to higher realized margins, a before-tax impairment of $948 million recorded in the third quarter of 2025 related to our equity investment in WRB, and depreciation recorded in 2025 for the Los Angeles Refinery. The increase in realized margins in the three and nine months ended September 30, 2026, was due to improved market crack spreads, partially offset by increased feedstock costs. See the “Executive Overview and Business Environment” section for information on industry crack spreads and other 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 WRB equity investment impairment in 2025.
Previous wording
Our worldwide refining crude oil capacity utilization rate was 96% and 95% for the three and six months ended June 30, 2026, respectively, compared with 98% and 89% in the three and six months ended June 30, 2025, respectively. The decrease for the three months ended June 30, 2026, was primarily due to higher turnaround activity. The increase for the six months ended June 30, 2026, was due to lower turnaround activity.
Current wording
Our worldwide refining crude oil capacity utilization rate was 98% and 96% for the three and nine months ended September 30, 2026, respectively, compared with 99% and 93% in the three and nine months ended September 30, 2025, respectively. The increase for the nine months ended September 30, 2026, was due to lower turnaround activity.
Previous wording
Results from the M&S segment increased $12 million and decreased $1,431 million for the three and six months ended June 30, 2026, respectively. The increase in the three months ended June 30, 2026, was primarily driven by impacts associated with the partial sale of Germany and Austria Marketing, along with higher equity earnings from Excel Paralubes. These increases were partially offset by lower domestic marketing fuel margins and legal accruals. The decrease in the six months ended June 30, 2026, 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 activity. These decreases were partially offset by activity associated with the partial sale of Germany and Austria Marketing.
Current wording
Results from the M&S segment decreased $6 million and $1,437 million for the three and nine months ended September 30, 2026, respectively. The decreases for both periods were primarily due to lower U.S. and international marketing fuel margins, mainly driven by commodity derivative activity, as well as activity associated with the partial sale of Germany and Austria Marketing. These decreases were partially offset by lower legal accruals related to litigation with Propel Fuels and higher equity earnings from Excel Paralubes. The decrease for the nine months ended September 30, 2026, was also due to a before-tax gain of $1 billion associated with the sale of our investment in Coop recognized in January 2025. In the Notes to Consolidated Financial Statements see Note 6—Investments, Loans and Long-Term Receivables, for additional information regarding the sale of Coop and partial sale of Germany and Austria Marketing, Note 12—Contingencies and Commitments, for additional information regarding legal accruals and Note 13—Derivatives and Financial Instruments, for additional information on commodity derivative activity. Additionally, reference the “Executive Overview and Business Environment” section for information on marketing fuel margins and other 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, 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. In addition, Corporate and Other 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.
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. In addition, Corporate and Other includes the change in the fair value of our investment in NOVONIX. In the Notes to Consolidated Financial Statements, see Note 7—Properties, Plants and Equipment for additional information on the idled Los Angeles Refinery and Note 14—Fair Value Measurements for additional information regarding our investment in NOVONIX.
Previous wording
Net interest expense increased $3 million and $71 million for the three and six months ended June 30, 2026, respectively. The increase in the six months ended June 30, 2026, was primarily driven by higher average debt balances, partially offset by increased average cash balances.
Current wording
Net interest expense decreased $38 million and increased $33 million for the three and nine months ended September 30, 2026, respectively. The decrease for the three months ended September 30, 2026, was primarily driven by increased average cash balances and lower interest expense due to debt retirements. The increase for the nine months ended September 30, 2026, was due to higher average debt balances, partially offset by increased average cash balances and higher capitalized interest.
Previous wording
Corporate overhead and other costs decreased $28 million and $15 million for the three and six months ended June 30, 2026, respectively. The decreases for both periods were primarily due to lower depreciation expense associated with information technology assets and advisory fees related to proxy solicitation services, both recorded in 2025, partially offset by costs associated with the decommissioning and redevelopment of our idled Los Angeles Refinery site. The decrease for the three months ended June 30, 2026, was additionally impacted by the timing of corporate charitable contributions, while the decrease for the six months ended June 30, 2026, also reflected charges associated with canceled projects recorded in the first quarter of 2025.
Current wording
Corporate overhead and other costs increased $37 million and $22 million for the three and nine months ended September 30, 2026, respectively. The increases for both periods were primarily due to costs associated with the idled Los Angeles and San Francisco Refineries. Additionally, the increase for the nine months ended September 30, 2026, was partially offset by lower depreciation expense associated with information technology assets and advisory fees related to proxy solicitation services, both recorded in 2025.
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 six months of 2026, we generated $5 billion of cash from operations, increased cash and cash equivalents by $3 billion and had net debt borrowings of $1 billion. We funded capital expenditures and investments of $1.3 billion, paid $1 billion of dividends to our common stockholders, and repurchased $0.6 billion 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.
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 nine months of 2026, we generated $12.3 billion of cash from operations and increased cash and cash equivalents by $4.7 billion. We funded repurchases of our common stock of $2.9 billion, capital expenditures and investments of $2.0 billion, paid $1.5 billion of dividends to our common stockholders, and repaid or repurchased $1.1 billion of debt, net of proceeds from debt issuances. 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
During the first six months of 2026, cash generated by operating activities was $5 billion, compared with $1 billion for the first six months of 2025. The increase was primarily due to higher earnings, driven by an increase in realized refining margins, as well as favorable working capital impacts. The favorable working capital impacts were primarily driven by the net timing of payments and collections, lower inventory, and higher taxes and other accruals. These increases in working capital were partially offset by higher prepaid expenses and other current assets.
Current wording
During the first nine months of 2026, cash generated by operating activities was $12.3 billion, compared with $2.2 billion for the first nine months of 2025. The increase was primarily due to higher earnings driven by an increase in realized refining margins.
Previous wording
Our operating cash flows are also impacted by distribution decisions made by our equity affiliates. During the first six months of 2026, cash from operations included aggregate distributions of $287 million from our equity affiliates, while cash from operations during the first six months of 2025 included aggregate distributions of $501 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 nine months of 2026, cash from operations included aggregate distributions of $496 million from our equity affiliates, while cash from operations during the first nine months of 2025 included aggregate distributions of $783 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 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 June 30, 2026, $1.25 billion was outstanding under the Term Loan Agreement, which matures in March 2027. On July 31, 2026, this amount was fully repaid.
Current wording
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 provided for a single borrowing on the Term Loan Closing Date and was scheduled to mature 364 days after the Term Loan Closing Date. The Term Loan Agreement contained 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 had 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 could prepay outstanding borrowings under the Term Loan Agreement, in whole or in part, at any time without premium or penalty. Outstanding borrowings under the Term Loan Agreement accrued 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%. The $2.25 billion borrowed in early 2026 was fully repaid as of September 30, 2026.
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. 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 up to $2 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 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 up to $2 billion. On August 20, 2026, Phillips 66 Company amended the Receivables Securitization Facility to, among other things, establish an uncommitted facility of up to $250 million, increase the maximum committed facility size from $1.75 billion to $2 billion and extend the maturity date from September 28, 2026 to August 19, 2027. Under the amended Receivables Securitization Facility, P66 Receivables may borrow and incur indebtedness from, and/or sell certain accounts receivable, 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 receivable transferred.
Previous 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 June 30, 2026, we sold $342 million of accounts receivable for cash proceeds. For the six months ended June 30, 2026, we sold $606 million of accounts receivable in exchange for cash proceeds of $342 million and 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 June 30, 2025, we sold $303 million of accounts receivable in exchange for a $303 million reduction in our borrowings under the Receivables Securitization Facility, which was recognized as a non-cash financing transaction. For the six months ended June 30, 2025, we sold $433 million of accounts receivable in exchange for cash proceeds of $130 million and a $303 million reduction in our borrowings 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 expenses” on our consolidated statement of income, during the three and six months ended June 30, 2026 and 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 September 30, 2026, we sold $250 million of accounts receivable for cash proceeds. For the nine months ended September 30, 2026, we sold $856 million of accounts receivable for cash proceeds of $592 million and 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 September 30, 2025, we sold $160 million of accounts receivable for cash proceeds. For the nine months ended September 30, 2025, we sold $593 million of accounts receivable for cash proceeds of $290 million and a $303 million reduction in our borrowings under the Receivables Securitization Facility, which was recognized as a non-cash financing transaction. We recognized immaterial charges associated with the transfers of financial assets, included within the line item “Selling, general and administrative expenses” on our consolidated statement of income, during the three and nine months ended September 30, 2026 and 2025.
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Previous report — wording carried elsewhere
In the Notes to Consolidated Financial Statements, see Note 6—Investments, Loans and Long-Term Receivables, for additional information regarding the sale of Coop and partial sale of Germany and Austria Marketing, Note 12—Contingencies and Commitments, for additional information regarding legal accruals and Note 13—Derivatives and Financial Instruments, for additional information on commodity derivative activity. Additionally, reference the “Executive Overview and Business Environment” section for information on marketing fuel margins and other market factors impacting this quarter’s results.