What changed in this filing

/stocks — the workspaceLOADING

Item 3. Legal Proceedings

2025-02-21 compared with 2024-02-21 · 40 added, 49 removed, 33 unchanged (73% of the section changed)

1 unchanged sentence

From time to time, we may be involved in litigation and claims arising out of our operations in the normal course of business.

Additionally, we have elected a $300,000 threshold to disclose certain proceedings arising under federal, state or local environmental laws when a governmental authority is a party to the proceedings.

The below matters are disclosed in accordance with that requirement.

We do not currently believe that the eventual outcome of any matters previously reported, but still unresolved, individually or in the aggregate, could have a material adverse effect on our business, financial condition, results of operations or cash flows.

Additionally, we have elected a $1 million threshold to disclose certain proceedings arising under federal, state or local environmental laws when a governmental authority is a party to the proceedings.

During the fourth quarter of 2024, two new matters arose, and there were material developments with respect to two matters previously reported, that resolved those matters, which are all described below.

Except as otherwise set forth herein, we do not currently believe that the eventual outcome of any matters previously reported, but still unresolved, individually or in the aggregate, could have a material adverse effect on our business, financial condition, results of operations or cash flows.

Further, our U.S.

4 unchanged sentences

If a specific request for stipulated penalties meeting the reporting threshold set forth in SEC rules is made pursuant to these decrees based on a given reported exceedance, we will separately report that matter and the amount of the proposed penalty.

Index to Financial Statements

We received such a request in the first quarter of 2023, and we expect to receive a final demand for, alleged stipulated penalties arising from self-reported Clean Air Act violations at our Alliance, Borger, Sweeny and Wood River refineries.

The proposed penalties exceed $500,000 and would be pursued pursuant to the consent decree referenced above and a related Wood River Refinery consent decree.

There have been no further developments with respect to this matter.

The California Department of Toxic Substances Control (DTSC), served Phillips 66 Company (as successor to Tosco) and approximately 50 other potentially responsible parties with Imminent and Substantial Endangerment Determinations and Orders and Remedial Action Orders in November 2016 related to historic waste sent to certain California landfill sites that were operated by a now bankrupt party.

Since that time, we have been coordinating with other potentially responsible parties to negotiate a proposed settlement with DTSC regarding funding future operations, maintenance, and financial assurance for post-closure activities at the sites.

As part of the settlement process and Consent Decree in the matter, in December 2023 we agreed to pay approximately $4 million in full satisfaction of our potential liability at the Vine Hill landfill complex located in Martinez, California.

The company does not expect any future financial liabilities related to the Vine Hill landfill complex to be material.

On December 1, 2023, the South Coast Air Quality Management District (SCAQMD) issued a demand for penalties that exceeds the $300,000 reporting threshold.

The penalty demand proposes to resolve seven Notices of Violation (NOVs) issued between 2020 and 2022 for alleged violations of air permit and air pollution regulatory requirements at the Los Angeles Refinery.

We are working with SCAQMD to negotiate and resolve these NOVs.

In December 2024, the Bay Area Air Quality Management District (BAAQMD) offered to settle 172 notices of alleged violations of air regulations by the Rodeo Complex dating back to 2016.

Settlement negotiations are underway, and resolution is expected in 2025.

In November 2024, Phillips 66 Company received an indictment from a federal grand jury in the United States District Court for the Central District of California alleging two counts of negligently violating the Clean Water Act and four counts of knowingly violating the Clean Water Act at its Los Angeles Refinery.

If convicted of all charges, Phillips 66 would face a statutory maximum fine exceeding $1 million.

The matter relates to alleged wastewater permit violations and is ongoing.

Matters Previously Reported (unresolved or resolved since the quarterly report on Form 10-Q for the quarterly period ended September 30, 2024)

In 2018, the Colorado Department of Public Health and Environment (CDPHE) issued a Compliance Advisory in relation to an improperly permitted facility flare and related air emissions from flare operations at one of DCP Operating Company LP’s (DCP Operating LP) gas processing plants, which DCP Operating LP self-disclosed to CDPHE in December 2017.

Following information exchanges and discussions with CDPHE, a resolution was proposed pursuant to which the plant’s air permit would be revised, and DCP Operating LP would be assessed an administrative penalty and economic benefit payment.

A revised air permit was issued in May 2019, but the parties had not yet entered into a final settlement agreement to complete the matter.

Subsequently, in July 2020, CDPHE issued a NOV in relation to amine treater emissions at this plant, which DCP Operating LP self-disclosed to CDPHE in April 2020.

Two additional and related NOVs were then issued in 2021 and 2023.

DCP Operating LP and the CDPHE have reached a tentative agreement to resolve these matters for aggregate monetary civil penalties of approximately $4 million.

As part of the settlement, DCP Operating LP will install emissions management equipment that will address the alleged violations.

A final order to resolve these matters is expected to be issued during the first quarter of 2024.

As described further in the “Legal Proceedings” section of Note 17—Contingencies and Commitments, in the Notes to Consolidated Financial Statements, on February 17, 2022, Propel Fuels, Inc.

(Propel Fuels) filed a lawsuit in the Superior Court of California, County of Alameda (the Propel Court), alleging that Phillips 66 Company misappropriated trade secrets related to Propel Fuels’ renewable fuels business.

On October 16, 2024, a jury returned a verdict against Phillips 66 Company for $604.9 million in compensatory damages and issued a willfulness finding.

In 2025, the Propel Court is expected to rule on motions anticipated to be filed by Propel Fuels seeking exemplary damages and attorneys’ fees.

Propel Fuels has asked the Propel Court to grant treble damages and Phillips 66 Company has filed a brief in opposition to that request.

Also in 2025, the Propel Court is expected to rule on Phillips 66 Company’s motions for a judgment in its favor as a matter of law, or in the alternative to reduce the jury’s verdict or to grant a new trial.

Phillips 66 Company denies any wrongdoing and intends to vigorously defend its position.

While Phillips 66 Company believes the jury verdict is not legally or factually supported and intends to pursue post-judgment remedies and file an appeal, there can be no assurances that such defense efforts will be successful.

To the extent Phillips 66 Company is required to pay exemplary damages, it may have a material adverse effect on our financial position and results of operations.

On August 30, 2024, the Colorado Department of Public Health & Environment, Air Pollution Control Division (APCD) sent DCP Operating Company, LP (DCP) a Compliance Order on Consent alleging violations at its Enterprise Compressor Station of AQCC Regulation 7 and DCP’s permit conditions.

This matter was resolved in the fourth quarter of 2024 with an agreement to pay a penalty and an economic benefit reimbursement totaling less than $1 million.

On May 12, 2023, the EPA, Region 6, sent DCP a Notice of Violation and Opportunity to Confer regarding alleged violations of 40 C.F.R.

Part 60, Subpart OOOOa (NOV).

The NOV alleged non-compliances at the Artesia and Eunice Natural Gas Processing Plants in New Mexico.

This matter was resolved in the fourth quarter of 2024 with an agreement to implement scheduled corrective actions and pay a penalty of $1.9 million.

Dakota Access, LLC (Dakota Access) and Energy Transfer Crude Oil Company, LLC (ETCO)

See “Dakota Access, LLC (Dakota Access) and Energy Transfer Crude Oil Company, LLC (ETCO)” section of Note 9—Investments, Loans and Long-Term Receivables and Note 17—Contingencies and Commitments, in the Notes to Consolidated Financial Statements for additional information regarding Legal Proceedings and other regulatory actions.

1 unchanged sentence

Not applicable.

Index to Financial Statements

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

Name Position Held Age*

Lashier President and Chief Executive Officer 62

Lashier Chairman and Chief Executive Officer 63

Mitchell Executive Vice President and Chief Financial Officer 58

Baldridge Executive Vice President, Midstream and Chemicals 55

Zhanna Golodryga Executive Vice President, Emerging Energy and Sustainability 69

1 unchanged sentence

Mandell Executive Vice President, Marketing and Commercial 61

Roberts Executive Vice President, Midstream and Chemicals 62

Allen Sutherland Executive Vice President, Government Affairs, General Counsel and Corporate Secretary 53

Scott Pruitt Vice President and Controller 59

Kluppel Vice President and Controller 57

* As of February 21, 2025.

1 unchanged sentence

The Board of Directors annually elects the officers to serve until a successor is elected and qualified or as otherwise provided in our By-Laws.

Set forth below is information about the executive officers identified above.

Lashier is President and Chief Executive Officer, a position he has held since July 2022.

Set forth below is the name, title and period of service of each executive officer identified above over the last five years.

Lashier is Chairman and Chief Executive Officer, a position he has held since May 2024.

Previously, Mr.

Lashier served as President and Chief Operating Officer of Phillips 66 from April 2021 to July 2022;

President and Chief Executive Officer of CPChem from August 2017 to April 2021;

and as Executive Vice President, Commercial of CPChem from August 2015 to August 2017.

Lashier served Phillips 66 as President and Chief Executive Officer from July 2022 to May 2024 and as President and Chief Operating Officer from April 2021 to July 2022.

Lashier served as President and Chief Executive Officer of CPChem from August 2017 to April 2021.

Mitchell is Executive Vice President and Chief Financial Officer, a position he has held since January 2016.

Baldridge is Executive Vice President, Midstream and Chemicals, a position he has held since June 2024.

Previously, Mr.

Mitchell served as Vice President, Investor Relations from September 2014 to January 2016.

Baldridge served as Interim Chief Executive Officer of DCP Midstream from January 2023 to May 2024.

Prior to that, he served as DCP Midstream’s President of Operations from January 2019 to December 2022.

Zhanna Golodryga is Executive Vice President, Emerging Energy and Sustainability, a position she has held since October 2022.

4 unchanged sentences

General Manager, San Francisco Refinery from June 2020 to February 2021;

Manager, Lake Charles Manufacturing Complex from February 2016 to May 2020 and Manager of the Ferndale Refinery from August 2014 to January 2016.

and Manager, Lake Charles Manufacturing Complex from February 2016 to May 2020.

Mandell is Executive Vice President, Marketing and Commercial, a position he has held since March 2019.

Mandell served as Senior Vice President, Marketing and Commercial from August 2018 to March 2019;

Senior Vice President, Commercial from November 2016 to August 2018;

and President, Global Marketing from March 2015 to November 2016.

Roberts is Executive Vice President, Midstream and Chemicals, a position he has held since August 2018.

Previously, Mr.

Roberts served as Executive Vice President, Marketing and Commercial from January 2017 to August 2018 and as Executive Vice President, Strategy and Business Development from April 2016 to January 2017.

Allen Sutherland is Executive Vice President, Government Affairs, General Counsel and Corporate Secretary, a position she has held since January 2022.

Sutherland previously served as Executive Vice President and Chief Legal Officer of Norfolk Southern Corporation from April 2020 to January 2022;

Senior Vice President, Government Relations and Chief Legal Officer from August 2019 to April 2020;

Senior Vice President, Law and Chief Legal Officer from April 2019 to August 2019;

and Vice President, Law from June 2018 to April 2019.

Prior to joining Norfolk Southern Corporation, Ms.

Sutherland served as Chairperson of the U.S.

Chemical Safety and Hazard Investigation Board from August 2015 to June 2018.

Scott Pruitt is Vice President and Controller, a position he has held since August 2021.

Pruitt previously served as General Auditor from September 2020 to August 2021 and Assistant Controller from May 2012 to September 2020.

Index to Financial Statements

Sutherland previously served as Executive Vice President and Chief Legal Officer of Norfolk Southern Corporation from April 2020 to January 2022 and Senior Vice President, Government Relations and Chief Legal Officer of Norfolk Southern Corporation from August 2019 to April 2020.

Kluppel is Vice President and Controller, a position she has held since May 2024.

Kluppel previously served as General Auditor from August 2021 to May 2024.

Prior to that, Ms.

Kluppel served as Managing Director, Corporate Finance from January 2021 to August 2021, and as Manager, Midstream Financial Planning & Analysis from August 2018 to December 2020.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 3. Legal Proceedings