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Item 1. Financial Statements

2025-07-28 compared with 2025-04-25 · 306 added, 123 removed, 741 unchanged (37% of the section changed)

2 unchanged sentences

Millions of Dollars

Three Months Ended March 31

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Revenues and Other Income

1 unchanged sentence

Equity in earnings of affiliates 153 487 306 1,015

Net gain on dispositions 1,087 —

Net gain (loss) on dispositions ( 93 ) 237 994 237

Other income 139 58 195 155

25 unchanged sentences

Millions of Dollars

Three Months Ended March 31

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Net Income $ 908 1,020 1,434 1,781

21 unchanged sentences

Prepaid expenses and other current assets 1,478 1,144

Assets held for sale 1,625 —

Total Current Assets 21,076 17,910

11 unchanged sentences

Other accruals 1,698 1,160

Liabilities held for sale 1,425 —

Total Current Liabilities 19,685 15,087

23 unchanged sentences

Millions of Dollars

Three Months Ended March 31

Six Months Ended

Cash Flows From Operating Activities

8 unchanged sentences

Net gain on dispositions ( 994 ) ( 237 )

Unrealized investment (gain) loss 10 ( 6 )

Unrealized investment loss 14 1

Other 52 ( 6 )

5 unchanged sentences

Taxes and other accruals 654 ( 297 )

Net Cash Provided by (Used in) Operating Activities 187 ( 236 )

Net Cash Provided by Operating Activities 1,032 1,861

Cash Flows From Investing Activities

Capital expenditures and investments ( 1,010 ) ( 995 )

Acquisitions, net of cash acquired ( 2,220 ) —

Return of investments in equity affiliates 43 67

1 unchanged sentence

Advances/loans—related parties ( 20 ) —

Collection of advances/loans—related parties 21 2

Other 12 ( 99 )

Net Cash Provided by (Used in) Investing Activities 1,591 ( 665 )

Net Cash Used in Investing Activities ( 1,143 ) ( 338 )

Cash Flows From Financing Activities

5 unchanged sentences

Distributions to noncontrolling interests ( 95 ) ( 33 )

Contributions from noncontrolling interests 106 —

Other ( 61 ) ( 82 )

1 unchanged sentence

Effect of Exchange Rate Changes on Cash and Cash Equivalents 40 ( 13 )

Net Change in Cash and Cash Equivalents ( 249 ) ( 1,753 )

Net Change in Cash and Cash Equivalents, including cash classified within Assets held for sale ( 594 ) ( 879 )

Cash and cash equivalents at beginning of period 1,738 3,323

Cash and Cash Equivalents at End of Period $ 1,489 1,570

Cash and Cash Equivalents at End of Period, including cash classified within Assets held for sale $ 1,144 2,444

Millions of Dollars

Six Months Ended

Reconciliation of Cash and Cash Equivalents at end of period

Cash and cash equivalents $ 1,052 2,444

Cash and cash equivalents included in Assets held for sale 92 —

Cash and cash equivalents at end of period, including cash classified within Assets held for sale $ 1,144 2,444

See Notes to Consolidated Financial Statements.

1 unchanged sentence

Millions of Dollars

Three Months Ended March 31

Three Months Ended June 30

Attributable to Phillips 66

1 unchanged sentence

Other Comprehensive Loss Noncontrolling Interests Total

December 31, 2024 $ 7 19,788 ( 22,751 ) 30,771 ( 407 ) 1,055 28,463

March 31, 2025 $ 7 19,789 ( 22,995 ) 30,785 ( 313 ) 1,080 28,353

Net income — — — 877 — 31 908

4 unchanged sentences

Distributions to noncontrolling interests — — — — — ( 81 ) ( 81 )

Contributions from noncontrolling interests — — — — — 106 106

Benefit plan activity — 31 — ( 3 ) — — 28

June 30, 2025 $ 7 19,820 ( 23,390 ) 31,172 ( 118 ) 1,136 28,627

March 31, 2024 $ 7 19,674 ( 20,489 ) 30,846 ( 312 ) 1,067 30,793

Net income — — — 1,015 — 5 1,020

Other comprehensive income — — — — 3 — 3

Dividends paid on common stock ($ 1.15 per share)

— — — ( 485 ) — — ( 485 )

Repurchase of common stock — — ( 843 ) — — — ( 843 )

Distributions to noncontrolling interests — — — — — ( 20 ) ( 20 )

Benefit plan activity — 43 — ( 4 ) — — 39

June 30, 2024 $ 7 19,717 ( 21,332 ) 31,372 ( 309 ) 1,052 30,507

Three Months Ended June 30

Common Stock Issued Treasury Stock

March 31, 2025 658,173,402 250,591,516

Repurchase of common stock — 3,545,412

Shares issued—share-based compensation 87,791 —

June 30, 2025 658,261,193 254,136,928

March 31, 2024 656,284,691 232,332,556

Repurchase of common stock — 5,633,070

Shares issued—share-based compensation 250,118 —

June 30, 2024 656,534,809 237,965,626

See Notes to Consolidated Financial Statements.

Millions of Dollars

Six Months Ended June 30

Attributable to Phillips 66

Par Value Capital in Excess of Par Treasury Stock Retained Earnings Accum.

Other Comprehensive Loss Noncontrolling Interests Total

December 31, 2024 $ 7 19,788 ( 22,751 ) 30,771 ( 407 ) 1,055 28,463

Net income — — — 1,364 — 70 1,434

Other comprehensive income — — — — 289 — 289

Dividends paid on common stock ($ 2.35 per share)

— — — ( 956 ) — — ( 956 )

Repurchase of common stock — — ( 639 ) — — — ( 639 )

Distributions to noncontrolling interests — — — — — ( 95 ) ( 95 )

Contributions from noncontrolling interests — — — — — 106 106

Benefit plan activity — 32 — ( 7 ) — — 25

June 30, 2025 $ 7 19,820 ( 23,390 ) 31,172 ( 118 ) 1,136 28,627

December 31, 2023 $ 7 19,650 ( 19,342 ) 30,550 ( 282 ) 1,067 31,650

Net income — — — 1,763 — 18 1,781

Other comprehensive loss — — — — ( 27 ) — ( 27 )

4 unchanged sentences

Benefit plan activity — 67 — ( 8 ) — — 59

March 31, 2024 $ 7 19,674 ( 20,489 ) 30,846 ( 312 ) 1,067 30,793

Three Months Ended March 31

June 30, 2024 $ 7 19,717 ( 21,332 ) 31,372 ( 309 ) 1,052 30,507

Six Months Ended June 30

Common Stock Issued Treasury Stock

2 unchanged sentences

Shares issued—share-based compensation 1,273,332 —

March 31, 2025 658,173,402 250,591,516

June 30, 2025 658,261,193 254,136,928

December 31, 2023 654,842,101 224,377,439

1 unchanged sentence

Shares issued—share-based compensation 1,692,708 —

March 31, 2024 656,284,691 232,332,556

June 30, 2024 656,534,809 237,965,626

See Notes to Consolidated Financial Statements.

5 unchanged sentences

Therefore, these interim financial statements should be read in conjunction with the consolidated financial statements and notes included in our 2024 Annual Report on Form 10-K.

The results of operations for the three months ended March 31, 2025, are not necessarily indicative of the results expected for the full year.

Certain prior period financial information has been recast for comparability.

See Note 19—Segment Disclosures and Related Information, for further information regarding recast prior period financial information.

The results of operations for the three and six months ended June 30, 2025, are not necessarily indicative of the results expected for the full year.

Note 2— Restructuring

Los Angeles Refinery

In October 2024, we announced our intention to cease operations at our Los Angeles Refinery in the fourth quarter of 2025, and we are evaluating potential future uses of the property.

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, and we are evaluating potential future uses of the property.

As a result of this decision, the following impacts were recorded in our Refining segment:

• We assessed the Los Angeles Refinery asset group for impairment and concluded that the carrying value of the asset group was recoverable.

However, the estimated useful lives of the Los Angeles Refinery assets were shortened to reflect the plan to cease the use of the assets in the fourth quarter of 2025.

As of March 31, 2025, the $ 1,019 million carrying value of the net properties, plants and equipment (PP&E) and intangible assets will be depreciated through the fourth quarter of 2025 to the estimated salvage value of $ 241 million.

Total depreciation related to the Los Angeles Refinery assets for the three months ended March 31, 2025 was $ 270 million, including $ 246 million of accelerated depreciation.

This accelerated depreciation is included within the “Depreciation and amortization” line item on our consolidated statement of income for the three months ended March 31, 2025.

• Our asset retirement obligations (AROs) at the Los Angeles Refinery were $ 276 million as of March 31, 2025, primarily reflecting asbestos abatement and decommissioning of assets.

However, the estimated useful lives of the Los Angeles Refinery assets were shortened to reflect the plan to cease operations and begin idling the assets in the fourth quarter of 2025, with the permitting processes for new uses at the Los Angeles Refinery beginning in the third quarter of 2025.

As of June 30, 2025, the $ 769 million carrying value of the net properties, plants and equipment (PP&E) and intangible assets will be depreciated through the fourth quarter of 2025 to the estimated salvage value of $ 241 million.

Total depreciation related to the Los Angeles Refinery assets for the three and six months ended June 30, 2025, was $ 265 million and $ 535 million, respectively, including $ 239 million and $ 485 million of accelerated depreciation, respectively.

This accelerated depreciation is included within the “Depreciation and amortization” line item on our consolidated statement of income for the three and six months ended June 30, 2025.

• Our asset retirement obligations (AROs) at the Los Angeles Refinery were $ 291 million as of June 30, 2025, primarily reflecting asbestos abatement and decommissioning of assets.

The estimation of asset retirement obligations requires significant judgment and is subject to changes in the underlying assumptions.

Depreciation of the related capitalized asset retirement costs also will be recorded through the fourth quarter of 2025, and the amount for the three months ended March 31, 2025, is reflected in the accelerated depreciation discussed above.

Depreciation of the related capitalized asset retirement costs also will be recorded through the fourth quarter of 2025, and the amount for the three and six months ended June 30, 2025, is reflected in the depreciation discussed above.

Note 3— Business Combinations

Midstream Acquisitions

On July 1, 2024, we acquired Pinnacle Midland Parent LLC to expand our natural gas gathering and processing operations in the Permian Basin for cash consideration of $ 565 million.

For this acquisition, we provisionally recorded $ 325 million of PP&E, including finance lease right of use assets;

On April 1, 2025, we acquired all issued and outstanding equity interests in each of EPIC Y-Grade GP, LLC and EPIC Y-Grade, LP, together with their respective subsidiaries (collectively referred to herein as Coastal Bend), which own various long haul natural gas liquids (NGL) pipelines, fractionation facilities and distribution systems, for total consideration of $ 2.2 billion, net of cash acquired.

For this acquisition, we provisionally recorded $ 2,226 million of PP&E;

$ 4 million of other assets;

$ 3 million of net working capital deficit (excluding cash);

and $ 22 million of other long-term liabilities.

The fair values of the assets acquired and liabilities assumed are preliminary and subject to change until we finalize the accounting for this acquisition.

On July 1, 2024, we acquired Pinnacle Midland Parent LLC (referred to herein as Dos Picos) to expand our natural gas gathering and processing operations in the Permian Basin for total cash consideration of $ 565 million.

We finalized the valuation of the assets acquired and liabilities assumed during the three months ended June 30, 2025.

For this acquisition, we recorded $ 325 million of PP&E, including finance lease right of use assets;

$ 256 million of amortizable intangible assets, primarily customer relationships;

3 unchanged sentences

and $ 6 million of finance lease liabilities.

The fair values of the assets acquired and liabilities assumed are preliminary and subject to change until we finalize the accounting for this acquisition.

Subsequent Midstream Acquisition

On April 1, 2025, we acquired all issued and outstanding equity interests in each of EPIC Y-Grade GP, LLC and EPIC Y-Grade, LP, together with their respective subsidiaries, which own various long haul natural gas liquids pipelines, fractionation facilities and distribution systems, for cash consideration of $ 2.2 billion, net of cash acquired.

The transaction will be accounted for as a business combination under FASB ASC 805 using the acquisition method, which requires assets acquired and liabilities assumed to be measured at their acquisition date fair values.

We are currently in the process of finalizing the initial accounting for the transaction and provisional fair value measurements will be made in the second quarter of 2025.

We may adjust the measurements in subsequent periods, up to one year from the acquisition date, as we identify additional information to complete the necessary analysis.

Marketing and Specialties Acquisition

11 unchanged sentences

Millions of Dollars

Three Months Ended March 31

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Product Line and Services

1 unchanged sentence

Crude oil resales 4,151 5,905 7,253 11,483

Natural gas liquids (NGL) and natural gas 4,506 3,334

Natural gas liquids and natural gas 4,076 3,583 8,582 6,917

Services and other *

885 570 1,458 1,730

Consolidated sales and other operating revenues $ 33,323 38,129 63,753 73,940

9 unchanged sentences

Contract-Related Assets and Liabilities

At March 31, 2025, and December 31, 2024, receivables from contracts with customers were $ 7,992 million and $ 8,615 million, respectively.

At June 30, 2025, and December 31, 2024, receivables from contracts with customers were $ 9,029 million and $ 8,615 million, respectively.

Significant noncustomer balances, such as buy/sell receivables and excise tax receivables, were excluded from these amounts.

1 unchanged sentence

An incentive payment is initially recognized as an asset and subsequently amortized as a reduction to revenue over the contract term, which generally ranges from 5 to 15 years.

At March 31, 2025, and December 31, 2024, our asset balances related to such payments were $ 659 million and $ 643 million, respectively.

At June 30, 2025, and December 31, 2024, our asset balances related to such payments were $ 730 million and $ 643 million, respectively.

Our contract liabilities primarily represent advances from our customers prior to product or service delivery.

At March 31, 2025, and December 31, 2024, contract liabilities were $ 203 million and $ 232 million, respectively.

At June 30, 2025, and December 31, 2024, contract liabilities were $ 208 million and $ 232 million, respectively.

Remaining Performance Obligations

2 unchanged sentences

We also have certain contracts in our Midstream segment that include minimum volume commitments with fixed pricing.

At March 31, 2025, the remaining performance obligations related to these minimum volume commitment contracts amounted to $ 579 million.

This amount excludes variable consideration and estimates of variable rate escalation clauses in our contracts with customers, and is expected to be recognized through 2035 with a weighted average remaining life of three years as of March 31, 2025.

At June 30, 2025, the remaining performance obligations related to these minimum volume commitment contracts amounted to $ 927 million.

This amount excludes variable consideration and estimates of variable rate escalation clauses in our contracts with customers, and is expected to be recognized through 2036 with a weighted average remaining life of five years as of June 30, 2025.

Note 5— Credit Losses

9 unchanged sentences

In addition, when events and circumstances arise that may affect certain counterparties’ abilities to fulfill their obligations, we enhance our credit monitoring, and we may seek collateral to support some transactions or require prepayments from higher-risk counterparties.

At March 31, 2025, and December 31, 2024, we reported $ 10,221 million and $ 11,033 million of accounts and notes receivable, net of allowances of $ 70 million for both periods.

Based on an aging analysis at March 31, 2025, more than 95 % of our accounts receivable were outstanding less than 60 days.

At June 30, 2025, and December 31, 2024, we reported $ 11,338 million and $ 11,033 million of accounts and notes receivable, respectively, net of allowances of $ 70 million for both periods.

Based on an aging analysis at June 30, 2025, more than 95 % of our accounts receivable were outstanding less than 60 days.

We are also exposed to credit losses from off-balance sheet exposures, such as guarantees of joint venture debt and accounts receivables sold under a securitization facility, as well as standby letters of credit.

7 unchanged sentences

$ 5,583 3,995

Inventories valued on the last-in, first-out (LIFO) basis totaled $ 4,694 million and $ 3,443 million at March 31, 2025, and December 31, 2024, respectively.

The estimated excess of current replacement cost over LIFO cost of inventories amounted to approximately $ 5.4 billion and $ 4.9 billion at March 31, 2025, and December 31, 2024, respectively.

Inventories valued on the last-in, first-out (LIFO) basis totaled $ 5,051 million and $ 3,443 million at June 30, 2025, and December 31, 2024, respectively.

The estimated excess of current replacement cost over LIFO cost of inventories amounted to approximately $ 4.5 billion and $ 4.9 billion at June 30, 2025, and December 31, 2024, respectively.

Certain planned reductions in inventory that are not expected to be replaced by the end of the year cause liquidations of LIFO inventory values.

LIFO liquidations did not have a material impact on net income for the three months ended March 31, 2025 and 2024.

LIFO liquidations did not have a material impact on net income for the three and six months ended June 30, 2025 and 2024.

Note 7— Investments, Loans and Long-Term Receivables

34 unchanged sentences

We funded our 25 % share of the repayment, or $ 250 million, with a capital contribution of $ 171 million in March 2024 and $ 79 million of distributions we elected not to receive from Dakota Access in the first quarter of 2024.

At March 31, 2025, the aggregate principal amount outstanding of Dakota Access’ senior unsecured notes was $ 850 million.

At June 30, 2025, the aggregate principal amount outstanding of Dakota Access’ senior unsecured notes was $ 850 million.

In addition, Phillips 66 Partners LP (Phillips 66 Partners), a wholly owned subsidiary of Phillips 66, and its co-venturers in Dakota Access also provided a Contingent Equity Contribution Undertaking (CECU) in conjunction with the notes offering.

Under the CECU, the co-venturers may be severally required to make proportionate equity contributions to Dakota Access if there is an unfavorable final judgment in the above-mentioned ongoing litigation.

At March 31, 2025, our 25 % share of the maximum potential equity contributions under the CECU was approximately $ 215 million.

At June 30, 2025, our 25 % share of the maximum potential equity contributions under the CECU was approximately $ 215 million.

If the pipeline is required to cease operations, it may have a material adverse effect on our results of operations and cash flows.

Should operations cease and Dakota Access and ETCO not have sufficient funds to pay its expenses, we also could be required to support our 25 % share of the ongoing expenses, including scheduled interest payments on the notes of approximately $ 10 million annually, in addition to the potential obligations under the CECU at March 31, 2025.

At March 31, 2025, the aggregate book value of our investments in Dakota Access and ETCO was $ 875 million.

At June 30, 2025, the aggregate book value of our investments in Dakota Access and ETCO was $ 862 million.

OnCue Holdings, LLC (OnCue)

3 unchanged sentences

We have determined that we are not the primary beneficiary because we do not have the power to direct the activities that most significantly impact economic performance.

At March 31, 2025, our maximum exposure to loss was $ 248 million, which represented the book value of our investment in OnCue of $ 190 million and guaranteed debt obligations of $ 58 million.

At June 30, 2025, our maximum exposure to loss was $ 251 million, which represented the book value of our investment in OnCue of $ 194 million and guaranteed debt obligations of $ 57 million.

Investment Dispositions

1 unchanged sentence

We received cash proceeds of $ 1.2 billion, consisting of a sales price of $ 1.15 billion and a final dividend relating to financial year 2024 of $ 92 million from Coop that was paid on January 30, 2025.

We recognized a before-tax gain of $ 1 billion associated with the sale in the “Net gain on dispositions” line item on our consolidated statement of income for the three months ended March 31, 2025, which is reported in our M&S segment.

The final dividend of $ 92 million is included within the “Cash Flows from Operating Activities” section of our consolidated statement of cash flows.

We recognized a before-tax gain of $ 1 billion associated with the sale in the “Net gain (loss) on dispositions” line item on our consolidated statement of income for the six months ended June 30, 2025, and is reported in our M&S segment.

The final dividend of $ 92 million is included within the “Cash Flows from Operating Activities” section on our consolidated statement of cash flows.

On January 30, 2025, DCP Midstream, LP (DCP LP) sold its 25 % ownership interest in Gulf Coast Express Pipeline LLC for cash proceeds of $ 853 million.

We recognized a before-tax gain of $ 68 million, which is included in the “Net gain on dispositions” line item on our consolidated statement of income for the three months ended March 31, 2025, and is reported in our Midstream segment.

We recognized a before-tax gain of $ 68 million, which is included in the “Net gain (loss) on dispositions” line item on our consolidated statement of income for the six months ended June 30, 2025, and is reported in our Midstream segment.

Note 8— Properties, Plants and Equipment

2 unchanged sentences

Millions of Dollars

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Midstream $ 28,945 5,257 23,688 26,187 4,820 21,367

5 unchanged sentences

$ 58,141 21,458 36,683 55,956 20,692 35,264

See Note 2—Restructuring, for information regarding our intention to cease operations at our Los Angeles Refinery.

See Note 2—Restructuring, for information regarding our intention to cease operations and begin idling the facilities at our Los Angeles Refinery.

See Note 3—Business Combinations, for information regarding our acquisitions in the Midstream and Marketing and Specialties segments.

See Note 9—Impairments, for information regarding PP&E impairments.

See Note 23—Assets Held for Sale, regarding the pending divestiture in our Marketing and Specialties segment.

Note 9— Impairments

1 unchanged sentence

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Midstream $ — 225 — 284

Refining 3 — 4 105

Marketing & Specialties 1 — 1 —

Corporate and Other — — 25 1

Total impairments $ 4 225 30 390

In the first quarter of 2024, we recorded before-tax impairments totaling $ 163 million related to certain crude oil processing and logistics assets in California, of which $ 104 million was reported in our Refining segment and $ 59 million was reported in our Midstream segment.

For the three and six months ended June 30, 2024, we recorded before-tax impairments totaling $ 225 million and $ 390 million, respectively, which included before-tax impairments of $ 224 million reported in our Midstream segment related to certain gathering and processing assets in Texas.

The six-month period of 2024 also included $ 163 million of before-tax impairments recorded in the first quarter of 2024 related to certain crude oil processing and logistics assets in California, of which $ 104 million was reported in our Refining segment and $ 59 million was reported in our Midstream segment.

These impairment charges are included within the “Impairments” line item on our consolidated statement of income.

6 unchanged sentences

Treasury stock is excluded from the denominator in both basic and diluted EPS.

Three Months Ended March 31

Basic Diluted Basic Diluted

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Basic Diluted Basic Diluted Basic Diluted Basic Diluted

Amounts Attributed to Phillips 66 Common Stockholders (millions) :

17 unchanged sentences

Interest on the Additional 2033 Notes is payable semi-annually on June 30 and December 30 of each year and commenced on June 30, 2024.

On June 27, 2025, DCP LP early redeemed the outstanding $ 525 million of its 5.375 % Senior Notes due July 2025 with an aggregate principal amount of $ 825 million.

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.

On March 29, 2024, DCP LP redeemed $ 300 million of its 5.375 % Senior Notes due July 2025.

After the redemption, an aggregate principal amount of $ 525 million remained outstanding.

On March 29, 2024, DCP LP early redeemed $ 300 million of its 5.375 % Senior Notes due July 2025 at par with an aggregate principal amount of $ 825 million.

On March 4, 2024, Phillips 66 Company repaid $ 700 million of the $ 1.25 billion borrowed under its delayed draw term loan that matures in June 2026.

3 unchanged sentences

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.

Under the Receivables Securitization Facility, P66 Receivables may borrow and incur indebtedness from, and/or sell certain receivables in an amount not to exceed $ 500 million 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.

Sales of accounts receivables 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 receivables sold to the purchasers.

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 an immaterial charge associated with the transfer of financial assets, which is 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, 2025.

At March 31, 2025, we had utilized $ 130 million of our $ 500 million Receivable Securitization Facility from sold accounts receivables not yet remitted to the purchaser.

Additionally, we had no outstanding borrowings at March 31, 2025.

Therefore, at March 31, 2025, we had unused capacity of $ 370 million.

At December 31, 2024, we had utilized the full $ 500 million of our Receivables Securitization Facility from $ 125 million of sold accounts receivables not yet remitted to the purchaser and $ 375 million of outstanding borrowings.

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.

Under the Receivables Securitization Facility, P66 Receivables may borrow and incur indebtedness from, and/or sell certain accounts receivable in an amount not to exceed $ 1 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.

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 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 in 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 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 six months ended June 30, 2025.

At June 30, 2025, we had utilized the full $ 1 billion capacity of our Receivable Securitization Facility from $ 303 million of sold accounts receivable not yet remitted to the purchaser and $ 697 million of outstanding borrowings, which is recognized within the “Short-term debt” line item on our consolidated balance sheet.

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 purchaser and $ 375 million of outstanding borrowings.

The outstanding borrowings at June 30, 2025, and December 31, 2024, were secured by approximately $ 4.5 billion and $ 4.6 billion of accounts receivable held by P66 Receivables at June 30, 2025, and December 31, 2024, respectively, which are included within the “Accounts and notes receivable” line item on our consolidated balance sheet.

Credit Facilities and Commercial Paper

6 unchanged sentences

We may at any time prepay outstanding borrowings, in whole or in part, without premium or penalty.

At March 31, 2025, no amount had been drawn under the 2025 Uncommitted Facility.

At June 30, 2025, $ 200 million of borrowings were outstanding under the 2025 Uncommitted Facility.

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.

4 unchanged sentences

We may at any time prepay outstanding borrowings, in whole or in part, without premium or penalty.

At March 31, 2025, no amount had been drawn under the 2024 Uncommitted Facility, while at December 31, 2024, the entire $ 400 million had been drawn.

At June 30, 2025, and December 31, 2024, $ 400 million of borrowings were outstanding under the 2024 Uncommitted Facility.

On February 28, 2024, we entered into a new $ 5 billion revolving credit agreement (the Facility) with Phillips 66 Company as the borrower and Phillips 66 as the guarantor and a scheduled maturity date of February 28, 2029.

11 unchanged sentences

The pricing levels for the commitment fee and interest-rate margins are determined based on the ratings in effect for our senior unsecured long-term debt from time to time.

At March 31, 2025, and December 31, 2024, no amount had been drawn under the Facility.

At June 30, 2025, and December 31, 2024, no amount had been drawn under the Facility.

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, 2025, no borrowings were outstanding under this program, while at December 31, 2024, $ 435 million of commercial paper had been issued under this program.

At June 30, 2025, we had $ 1,349 million borrowings outstanding under this program, while at December 31, 2024, $ 435 million of commercial paper had been issued under this program.

DCP Midstream Class A Segment

2 unchanged sentences

Note 12— Guarantees

At March 31, 2025, we were liable for certain contingent obligations under various contractual arrangements as described below.

At June 30, 2025, we were liable for certain contingent obligations under various contractual arrangements as described below.

We recognize a liability for the fair value of our obligation as a guarantor for newly issued or modified guarantees.

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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 2025, to request to renew the lease, purchase the facility or assist the lessor in marketing it for resale.

We have a residual value guarantee associated with the operating lease agreement with a maximum potential future exposure of $ 514 million at March 31, 2025.

We have a residual value guarantee associated with the operating lease agreement with a maximum potential future exposure of $ 514 million at June 30, 2025.

We also have residual value guarantees associated with railcar, airplane and truck leases with maximum potential future exposures totaling $ 176 million.

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See Note 7—Investments, Loans and Long-Term Receivables, for additional information regarding Dakota Access and the CECU.

At March 31, 2025, we also had other guarantees outstanding primarily for our portion of certain joint venture debt, which have remaining terms of up to five years .

At June 30, 2025, we also had other guarantees outstanding primarily for our portion of certain joint venture debt, which have remaining terms of up to four years .

The maximum potential future exposures under these guarantees were approximately $ 244 million.

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The majority of these indemnifications are related to environmental issues, which generally have indefinite terms and potentially unlimited exposure.

At March 31, 2025, and December 31, 2024, the carrying amount of recorded indemnifications was $ 122 million and $ 125 million, respectively.

At June 30, 2025, and December 31, 2024, the carrying amount of recorded indemnifications was $ 121 million and $ 125 million, respectively.

We amortize the indemnification liability over the relevant time period, if one exists, based on the facts and circumstances surrounding each type of indemnity.

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Although it is reasonably possible future payments may exceed amounts recorded, due to the nature of the indemnifications, it is not possible to make a reasonable estimate of the maximum potential amount of future payments.

At March 31, 2025, and December 31, 2024, environmental accruals for known contamination of $ 98 million and $ 100 million, respectively, were included in the carrying amount of the recorded indemnifications noted above.

At June 30, 2025, and December 31, 2024, environmental accruals for known contamination of $ 98 million and $ 100 million, respectively, were included in the carrying amount of the recorded indemnifications noted above.

These environmental accruals were primarily included in the “Asset retirement obligations and accrued environmental costs” line item on our consolidated balance sheet.

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Additionally, P66 Receivables has guaranteed all borrowings and receivables sold under our Receivables Securitization Facility.

At March 31, 2025, $ 127 million of the sold accounts receivable remained uncollected, which represents our maximum potential future exposure under the guarantee associated with the Receivables Securitization Facility.

At June 30, 2025, $ 238 million of the sold accounts receivable remained uncollected, which represents our maximum potential future exposure under the guarantee associated with the Receivables Securitization Facility.

See Note 11—Debt, for information regarding our Receivables Securitization Facility.

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After an assessment of environmental exposures for cleanup and other costs, we make accruals on an undiscounted basis (except those pertaining to sites acquired in a business combination, which we record on a discounted basis) for planned investigation and remediation activities for sites where it is probable future costs will be incurred and these costs can be reasonably estimated.

At March 31, 2025, our total environmental accruals were $ 435 million, compared with $ 439 million at December 31, 2024.

At June 30, 2025, our total environmental accruals were $ 453 million, compared with $ 439 million at December 31, 2024.

We expect to incur a substantial amount of these expenditures within the next 30 years.

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As a result of the jury verdict in October 2024, the Company recorded an accrual of $ 604.9 million during the third quarter of 2024, which was reported in the M&S segment.

The accrued amount is reflected as “Other liabilities and deferred credits” on our consolidated balance sheet as of March 31, 2025, and December 31, 2024.

The accrued amount is reflected as “Other liabilities and deferred credits” on our consolidated balance sheet as of June 30, 2025, and December 31, 2024.

However, it is reasonably possible that the estimate of the loss could change based on the progression of the case, including the appeals process.

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Under these agreements, we may be required to provide any such company with additional funds through advances and penalties for fees related to throughput capacity not utilized.

At March 31, 2025, we had performance obligations secured by letters of credit and bank guarantees of $ 778 million related to various purchase and other commitments incident to the ordinary conduct of business.

At June 30, 2025, we had performance obligations secured by letters of credit and bank guarantees of $ 529 million related to various purchase and other commitments incident to the ordinary conduct of business.

Note 14— Derivatives and Financial Instruments

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Gains and losses from derivative contracts held for trading not directly related to our physical business are reported net in the “Other income” line item on our consolidated statement of income.

Realized and unrealized gains on the foreign currency derivative entered into in connection with the sale of our 49 % ownership interest in Coop are reported in the “Net gain on dispositions” line item on our consolidated statement of income.

Cash flows from all of our commodity derivative activity for the periods presented appear in the operating section on our consolidated statement of cash flows.

Realized and unrealized gains and losses on foreign currency derivatives entered into in connection with our investment dispositions are reported in the “Net gain (loss) on dispositions” line item on our consolidated statement of income.

Cash flows from all of our commodity derivative activity for the periods presented appear within the “Cash Flows from Operating Activities” section on our consolidated statement of cash flows.

Purchase and sales contracts with firm minimum notional volumes for commodities that are readily convertible to cash are recorded on our consolidated balance sheet as derivatives unless the contracts are eligible for, and we elect, the normal purchases and normal sales exception, whereby the contracts are recorded on an accrual basis.

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Millions of Dollars

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Commodity Derivatives Effect of Collateral Netting Net Carrying Value Presented on the Balance Sheet Commodity Derivatives Effect of Collateral Netting Net Carrying Value Presented on the Balance Sheet

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Prepaid expenses and other current assets $ 4,078 ( 3,870 ) — 208 1,021 ( 922 ) — 99

Other assets 7 ( 5 ) — 2 — — — —

Other accruals 748 ( 946 ) 66 ( 132 ) 1,136 ( 1,226 ) 46 ( 44 )

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Total $ 4,951 ( 4,938 ) 70 83 2,217 ( 2,219 ) 62 60

At March 31, 2025, and December 31, 2024, there was no material cash collateral received or paid that was not offset on our consolidated balance sheet.

At June 30, 2025, and December 31, 2024, there was no material cash collateral received or paid that was not offset on our consolidated balance sheet.

The realized and unrealized gains (losses) incurred from commodity derivatives, and the line items where they appear on our consolidated statement of income, were:

Millions of Dollars

Three Months Ended March 31

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Sales and other operating revenues $ 149 29 84 ( 173 )

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Purchased crude oil and products 54 38 ( 122 ) ( 218 )

Net loss from commodity derivative activity $ ( 227 ) ( 420 )

Net gain (loss) from commodity derivative activity $ 257 97 30 ( 323 )

The following table summarizes our material net exposures resulting from outstanding commodity derivative contracts.

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Financial derivative contracts may also offset physical derivative contracts, such as forward purchase and sales contracts.

The percentage of our derivative contract volumes expiring within the next 12 months was more than 90 % at March 31, 2025, and December 31, 2024.

The percentage of our derivative contract volumes expiring within the next 12 months was more than 90 % at June 30, 2025, and December 31, 2024.

Open Position

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however, many contracts also permit us to post letters of credit as collateral.

The aggregate fair values of all derivative instruments with such credit-risk-related contingent features that were in a liability position were immaterial at March 31, 2025, and December 31, 2024.

The aggregate fair values of all derivative instruments with such credit-risk-related contingent features that were in a liability position were immaterial at June 30, 2025, and December 31, 2024.

Note 15— Fair Value Measurements

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When applicable, we determine the fair value of interest rate swaps based on observable market valuations for interest rate swaps that have notional amounts, terms and pay and reset frequencies similar to ours.

When applicable, we determine the fair value of foreign currency derivatives based on observable market data and classify the resulting fair values as Level 2.

When applicable, we determine the fair value of foreign currency derivatives based on observable market data.

Management’s best estimate of transaction dates may be used if relevant to the instrument valuation.

The degree to which these inputs are observable in the forward markets determines whether the instruments are classified as Level 2 or 3.

• Rabbi trust assets —These deferred compensation investments are measured at fair value using unadjusted quoted prices available from national securities exchanges and are therefore categorized as Level 1 in the fair value hierarchy.

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Millions of Dollars

March 31, 2025

June 30, 2025

Fair Value Hierarchy Total Fair Value of Gross Assets & Liabilities Effect of Counterparty Netting Effect of Collateral Netting Difference in Carrying Value and Fair Value Net Carrying Value Presented on the Balance Sheet

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Physical forward contracts — 137 1 138 ( 11 ) — — 127

Foreign currency derivative — 89 — 89 — — — 89

Floating-rate debt — 3,196 — 3,196 N/A N/A — 3,196

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The rabbi trust assets and investment in NOVONIX are recorded in the “Investments and long-term receivables” line item, and floating-rate and fixed-rate debt are recorded in the “Short-term debt” and “Long-term debt” line items on our consolidated balance sheet.

The foreign currency derivative was recorded in the “Prepaid expenses and other current assets” line item on our consolidated balance sheet at December 31, 2024.

Foreign currency derivatives are recorded in the “Other accruals” line item on our consolidated balance sheet at June 30, 2025, and in the “Prepaid expenses and other current assets” line item at December 31, 2024.

See Note 14—Derivatives and Financial Instruments, for information regarding where the assets and liabilities related to our commodity derivatives are recorded on our consolidated balance sheet.

Nonrecurring Fair Value Measurements

In the first quarter of 2024, we remeasured the carrying value of the net PP&E of certain crude oil processing and logistics assets in California to fair value.

Fair value was determined using a market approach.

Coastal Bend Acquisition

On April 1, 2025, we acquired and began consolidating the financial results of Coastal Bend, and accordingly, accounted for the business combination using the acquisition method of accounting, which requires Coastal Bend’s assets and liabilities to be recorded at fair value as of the acquisition date on our consolidated balance sheet.

The preliminary fair value of PP&E was $ 2,226 million.

The preliminary fair value of these assets was determined primarily using the cost approach.

The cost approach used assumptions for the current replacement cost of similar plant and equipment assets adjusted for estimated physical deterioration, functional obsolescence and economic obsolescence.

This valuation resulted in Level 3 nonrecurring fair value measurements.

See Note 3—Business Combinations, for additional information on the transaction.

Equity Investments and PP&E

In the second quarter of 2024, we remeasured the carrying value of the net PP&E and equity investment in a Texas gathering and processing asset group to fair value.

In the first quarter of 2024, we remeasured the carrying value of the net PP&E of certain crude oil and processing and logistics assets in California to fair value.

For both assessments, fair value was determined using a market approach.

These valuations resulted in Level 3 nonrecurring fair value measurements.

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Note 16— Pension and Postretirement Plans

The components of net periodic benefit cost for the three months ended March 31, 2025 and 2024, were as follows:

The components of net periodic benefit cost for the three and six months ended June 30, 2025 and 2024, were as follows:

Millions of Dollars

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Components of Net Periodic Benefit Cost

Three Months Ended March 31

Three Months Ended June 30

Service cost $ 30 3 29 4 1 —

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Net periodic benefit cost* $ 30 — 25 1 1 1

Six Months Ended June 30

Service cost $ 61 6 58 7 1 1

Interest cost 64 18 57 16 4 4

Expected return on plan assets ( 76 ) ( 23 ) ( 77 ) ( 22 ) — —

Amortization of net actuarial loss (gain) 8 ( 1 ) 6 — ( 3 ) ( 2 )

Settlements 4 — 4 — — —

Net periodic benefit cost* $ 61 — 48 1 2 3

* Included in the “Operating expenses” and “Selling, general and administrative expenses” line items on our consolidated statement of income.

During the three months ended March 31, 2025, we contributed $ 49 million to our U.S.

During the six months ended June 30, 2025, we contributed $ 56 million to our U.S.

pension and other postretirement benefit plans and $ 3 million to our international pension plans.

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Net current period other comprehensive income 9 280 — 289

March 31, 2025 $ ( 134 ) ( 174 ) ( 5 ) ( 313 )

June 30, 2025 $ ( 131 ) 18 ( 5 ) ( 118 )

December 31, 2023 $ ( 120 ) ( 157 ) ( 5 ) ( 282 )

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Net current period other comprehensive income (loss) 6 ( 33 ) — ( 27 )

March 31, 2024 $ ( 118 ) ( 189 ) ( 5 ) ( 312 )

June 30, 2024 $ ( 114 ) ( 190 ) ( 5 ) ( 309 )

* Included in the computation of net periodic benefit cost.

See Note 16—Pension and Postretirement Plans, for additional information.

** Included in the gain on sale of Coop, recognized in the “Net gain on dispositions” line item on our consolidated statement of income.

** Included in the gain on sale of Coop, recognized in the “Net gain (loss) on dispositions” line item on our consolidated statement of income.

See Note 7—Investments, Loans and Long-Term Receivables, for additional information.

Note 18— Cash Flow Information

Millions of Dollars

Three Months Ended June 30 Six Months Ended June 30

2025 2024 2025 2024

Non-cash financing activities

Reduction in borrowings under Receivables Securitization Facility $ 303 — 303 —

See Note 11—Debt, for additional information regarding the above non-cash activity.

Note 19— Related Party Transactions

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Millions of Dollars

Three Months Ended March 31

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Operating revenues and other income (a) $ 1,074 1,188 2,110 2,321

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Note 20— Segment Disclosures and Related Information

Effective April 1, 2024, we changed the internal financial information reviewed by our chief executive officer to evaluate performance and allocate resources to our operating segments.

This resulted in changes to the composition of our operating segments, as well as measurement changes for certain activities between our operating segments.

The primary effects are summarized below.

Prior period information has been recast for comparability.

• Establishment of a Renewable Fuels operating segment, which includes renewable fuels activities and assets historically reported in our Refining, M&S and Midstream operating segments.

• Change in method of allocating results for certain Gulf Coast distillate export activities from our M&S operating segment to our Refining operating segment.

• Reclassification of certain crude oil and international clean products trading activities between our M&S operating segment and our Refining operating segment.

• Change in reporting of our investment in NOVONIX from our Midstream operating segment to Corporate and Other.

Our operating segments are:

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Millions of Dollars

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Operating Segments

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Total sales and other operating revenues 5,056 — 18,694 21,417 1,615 12 ( 13,471 ) 33,323

Equity in earnings of affiliates 110 113 ( 105 ) 36 ( 1 ) — — 153

Net gain on dispositions 69 — — 1,018 — — — 1,087

Equity in earnings (losses) of affiliates 98 20 ( 2 ) 38 ( 1 ) — — 153

Net loss on dispositions ( 4 ) — — ( 89 ) — — — ( 93 )

Other income 3 — 34 15 44 43 — 139

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Millions of Dollars

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Operating Segments

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Total sales and other operating revenues 4,346 — 23,099 25,525 1,501 12 ( 16,354 ) 38,129

Equity in earnings of affiliates 155 201 108 64 — — — 528

Equity in earnings (losses) of affiliates 170 219 33 66 ( 1 ) — — 487

Net gain (loss) on dispositions 238 — — ( 1 ) — — — 237

Other income 1 — 7 13 8 26 3 58

Total Revenues and Other Income 4,755 219 23,139 25,603 1,508 38 ( 16,351 ) 38,911

Costs and Expenses

Purchased crude oil and products 3,002 — 21,618 24,786 1,545 — ( 16,323 ) 34,628

Operating expenses* 433 — 884 16 99 3 ( 28 ) 1,407

Selling, general and administrative expenses* 42 ( 3 ) 51 342 11 109 — 552

Depreciation and amortization 224 — 204 32 12 25 — 497

Impairments 225 — — — — — — 225

Taxes other than income taxes 59 — 74 9 ( 104 ) 11 — 49

Interest and debt expense — — — — — 231 — 231

Other segment items **

3 — 6 3 — ( 1 ) — 11

Total Costs and Expenses 3,988 ( 3 ) 22,837 25,188 1,563 378 ( 16,351 ) 37,600

Income (loss) before income taxes $ 767 222 302 415 ( 55 ) ( 340 ) — 1,311

* These significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

The total of the line items "Operating expenses" and "Selling, general and administrative expenses" is considered "Controllable costs" and is provided to the CODM.

** “Other segment items” for each reportable segment includes the following line items on our consolidated statement of income:

“Accretion on discounted liabilities” and “Foreign currency transaction (gains) losses.”

Millions of Dollars

Six Months Ended June 30, 2025

Operating Segments

Midstream Chemicals Refining M&S Renewable Fuels Corporate and Other Consolidating Adjustments Total Consolidated

Revenues and Other Income

Third-party sales and other operating revenues $ 9,355 — 12,807 40,062 1,509 20 — 63,753

Intercompany revenues 1,159 — 21,762 996 1,615 4 ( 25,536 ) —

Total sales and other operating revenues 10,514 — 34,569 41,058 3,124 24 ( 25,536 ) 63,753

Equity in earnings (losses) of affiliates 208 133 ( 107 ) 74 ( 2 ) — — 306

Net gain on dispositions 65 — — 929 — — — 994

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“Accretion on discounted liabilities” and “Foreign currency transaction (gains) losses.”

Millions of Dollars

Six Months Ended June 30, 2024

Operating Segments

Midstream Chemicals Refining M&S Renewable Fuels Corporate and Other Consolidating Adjustments Total Consolidated

Revenues and Other Income

Third-party sales and other operating revenues $ 7,750 — 18,425 47,029 718 18 — 73,940

Intercompany revenues 1,437 — 26,583 1,098 1,926 7 ( 31,051 ) —

Total sales and other operating revenues 9,187 — 45,008 48,127 2,644 25 ( 31,051 ) 73,940

Equity in earnings (losses) of affiliates 325 420 141 130 ( 1 ) — — 1,015

Net gain (loss) on dispositions 238 — — ( 1 ) — — — 237

Other income 5 — 40 22 13 82 ( 7 ) 155

Total Revenues and Other Income 9,755 420 45,189 48,278 2,656 107 ( 31,058 ) 75,347

Costs and Expenses

Purchased crude oil and products 6,602 — 42,023 46,701 2,694 — ( 31,006 ) 67,014

Operating expenses* 867 ( 2 ) 1,837 32 171 6 ( 52 ) 2,859

Selling, general and administrative expenses* 118 ( 5 ) 89 661 22 224 — 1,109

Depreciation and amortization 453 — 412 68 18 50 — 1,001

Impairments 284 — 105 — — 1 — 390

Taxes other than income taxes 103 — 195 24 ( 138 ) 30 — 214

Interest and debt expense — — — — — 458 — 458

Other segment items **

7 — 10 11 ( 1 ) — — 27

Total Costs and Expenses 8,434 ( 7 ) 44,671 47,497 2,766 769 ( 31,058 ) 73,072

Income (loss) before income taxes $ 1,321 427 518 781 ( 110 ) ( 662 ) — 2,275

* These significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

The total of the line items "Operating expenses" and "Selling, general and administrative expenses" is considered "Controllable costs" and is provided to the CODM.

** “Other segment items” for each reportable segment includes the following line items on our consolidated statement of income:

“Accretion on discounted liabilities” and “Foreign currency transaction (gains) losses.”

Other Segment Disclosures

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Midstream Chemicals Refining M&S Renewable Fuels Corporate and Other Total Consolidated

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Interest Income $ — — — — — 34 34

Capital Expenditures and Investments* 384 — 148 34 9 12 587

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Interest Income $ — — — — — 30 30

Capital Expenditures and Investments* 96 — 105 20 128 18 367

Six Months Ended June 30, 2025

Interest Income $ — — — — — 68 68

Capital Expenditures and Investments* 600 — 324 49 18 19 1,010

Six Months Ended June 30, 2024

Interest Income $ — — — — — 72 72

Capital Expenditures and Investments* 351 — 240 35 345 24 995

* Excludes Acquisitions, net of cash acquired.

Millions of Dollars

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Midstream Chemicals Refining M&S Renewable Fuels Corporate and Other Total Consolidated

As of March 31, 2025

As of June 30, 2025

Investments In and Advances to Affiliates $ 2,228 7,890 2,279 553 14 2 12,966

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Note 21— Income Taxes

Our effective income tax rate for the three months ended March 31, 2025, was 19 %, compared to 21 % for the corresponding period of 2024.

The decrease in our effective rate for the three months ended March 31, 2025, was primarily attributable to the effects of state income taxes in the period.

The effective tax rate for the three months ended March 31, 2025, varied from the U.S.

federal statutory income tax rate primarily due to the impact of tax benefits from share-based compensation plans and non-taxable items.

Our effective income tax rates for the three and six months ended June 30, 2025, were 19 %, compared to 22 % for the corresponding periods of 2024.

The decrease in our effective rates for the three and six months ended June 30, 2025, were primarily attributable to the effects of state income taxes and the impact of foreign operations.

The effective tax rates for the three and six months ended June 30, 2025, varied from the U.S.

federal statutory income tax rate primarily due to the impact of foreign operations and non-taxable items, partially offset by state income taxes.

Note 22—DCP Midstream Class A Segment

DCP Midstream Class A Segment is comprised of the businesses, activities, assets and liabilities of DCP LP, its subsidiaries and its general partner entities.

DCP LP is a master limited partnership whose operations currently include producing and fractionating NGL;

DCP LP is a master limited partnership whose operations include producing and fractionating NGL;

gathering, compressing, treating and processing natural gas;

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Long-term debt 2,910 2,913

See Note 7—Investments, Loans and Long-Term Receivables for additional information regarding the sale of DCP LP’s ownership interest in GCX.

See Note 11—Debt for further information regarding DCP LP’s repayment of debt.

Note 23—Assets Held for Sale

On May 15, 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 pre-tax cash proceeds of approximately $ 1.6 billion ( 1.5 billion Euros), subject to purchase price adjustments for working capital and certain long-term liabilities on the closing date.

We will retain a 35 % non-operating equity interest in Germany and Austria Marketing through a new joint venture, which will be formed prior to the closing of the transaction.

We expect to close this transaction in the second half of 2025, subject to regulatory approvals and other customary closing conditions.

In the second quarter of 2025, Germany and Austria Marketing, which is part of our M&S segment and reporting unit, met the held for sale criteria, and as of June 30, 2025, we reclassified the assets and liabilities to the “Assets held for sale” and “Liabilities held for sale” line items, respectively, on our consolidated balance sheet.

As of June 30, 2025, Germany and Austria Marketing has a net carrying value of approximately $ 200 million.

The following table presents the carrying value of assets and liabilities as presented within “Assets held for sale” and “Liabilities held for sale” line items on our consolidated balance sheet.

Millions of Dollars

Assets Held for Sale:

June 30, 2025

Cash and cash equivalents $ 92

Accounts and notes receivable 357

Inventories 95

Prepaid expenses and other current assets 40

Net properties, plant and equipment 420

Intangibles 93

Other assets 387

Total assets classified as held for sale 1,625

Liabilities Held for Sale:

Accounts payable 693

Accrued income and other taxes 41

Employee benefit obligations, current 4

Other accruals 77

Asset retirement obligations and accrued environmental costs 126

Deferred income taxes 22

Employee benefit obligations, non-current 128

Other liabilities and deferred credits 334

Total liabilities classified as held for sale 1,425

The goodwill allocated to Germany and Austria Marketing was derived from the goodwill balance of our M&S reporting unit and the amount allocated was based on the relative fair value of Germany and Austria Marketing compared to the fair value of the M&S reporting unit.

On May 15, 2025, we entered into foreign currency forward contracts in connection with our pending disposition, in which we sold an aggregate of approximately 1.5 billion Euros in exchange for an aggregate of approximately $ 1.6 billion.

We recognized a before-tax aggregate unrealized loss of $ 89 million on these foreign currency forward contracts in the “Net gain (loss) on dispositions” line item on our consolidated statement of income for the three and six months ended June 30, 2025, which is reported in our M&S segment.

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-Q

Item 1. Financial Statements