What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-07-28 compared with 2025-04-25 · 280 added, 140 removed, 593 unchanged (41% of the section changed)

13 unchanged sentences

Phillips 66 is uniquely positioned as a leading integrated downstream energy provider operating with Midstream, Chemicals, Refining, Marketing and Specialties (M&S), and Renewable Fuels segments.

At March 31, 2025, we had total assets of $71.8 billion.

At June 30, 2025, we had total assets of $75.9 billion.

Our common stock trades on the New York Stock Exchange under the symbol PSX.

Executive Overview

In the first quarter of 2025, we reported earnings of $487 million and cash provided by operating activities of $187 million.

During the quarter, we funded capital expenditures and investments of $423 million and received proceeds from asset dispositions of $2 billion.

Additionally, we repaid $1.3 billion of debt, paid $247 million to repurchase shares of our common stock and paid $469 million of dividends to our common stockholders.

We ended the first quarter of 2025 with $1.5 billion of cash and cash equivalents and $5.4 billion of total committed capacity available under our credit facilities.

In the second quarter of 2025, we reported earnings of $877 million and cash provided by operating activities of $845 million.

During the quarter, we funded capital expenditures and investments of $587 million and an acquisition of $2.2 billion, net of cash acquired.

Additionally, we received $2.4 billion from net debt borrowings, paid $419 million to repurchase shares of our common stock and paid $487 million of dividends to our common stockholders.

We ended the second quarter of 2025 with $1.1 billion of cash and cash equivalents and $3.7 billion of total committed capacity available under our credit facilities.

Strategic Priorities Update

7 unchanged sentences

The amount and timing of future dividend payments and the level and timing of future share repurchases is subject to the discretion of, and approval by, our Board of Directors and will depend on various factors including our share price, results of operations, financial condition and cash required for future business plans.

• In April 2025, our Board of Directors declared a quarterly cash dividend of $1.20 per common share, representing a $0.05 increase, reflecting our commitment to a secure, competitive and growing dividend.

• In April and July 2025, our Board of Directors declared quarterly cash dividends of $1.20 per common share, reflecting our commitment to a secure, competitive and growing dividend.

• World-Class Operations – We are focused on achieving operational excellence by optimizing utilization rates and product yield at our refineries through reliable and safe operations, which will enable us to capture the value available in the market in terms of prices and margins.

4 unchanged sentences

Within our Midstream segment, we are primarily focused on maximizing the value of our fully integrated natural gas liquids (NGL) wellhead-to-market value chain.

• 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 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 joint venture, which will be formed prior to the closing of the transaction.

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

• In January 2025, we closed on the sale of our 49% ownership in Coop Mineraloel AG (Coop) and DCP Midstream, LP’s (DCP LP) 25% ownership in Gulf Coast Express Pipeline LLC (GCX) and received total proceeds of $2 billion.

1 unchanged sentence

We have budgeted $2.1 billion for 2025 capital expenditures and investments, exclusive of acquisitions, which includes $1.1 billion of growth capital, primarily in our Midstream segment.

Refer to Note 7—Investments, Loans and Long-Term Receivables, in the Notes to Consolidated Financial Statements for additional information on the investment dispositions.

• We continued expansion of our Midstream NGL wellhead-to-market platform with a recent 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.

Refer to Note 3—Business Combinations, in the Notes to Consolidated Financial Statements for additional information.

• Our new financial targets through 2027 reflect our plans to grow our Midstream and Chemicals businesses, as well as maintain total annual capital expenditures and investments of approximately $2 billion, excluding acquisitions.

See Note 7—Investments, Loans and Long-Term Receivables, in the Notes to Consolidated Financial Statements for additional information on the investment dispositions.

• We continued expansion of our Midstream NGL wellhead-to-market platform through acquiring all issued and outstanding equity interests in each of EPIC Y-Grade GP, LLC and EPIC Y-Grade, LP (collectively referred to herein as Coastal Bend), together with their respective subsidiaries, which own various long haul natural gas liquids pipelines, fractionation facilities and distribution systems.

See Note 3—Business Combinations, in the Notes to Consolidated Financial Statements for additional information.

• Our new 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 billion, excluding acquisitions.

• Financial Strength and Flexibility – We use a variety of funding sources to support our liquidity requirements, including cash from operations, debt and proceeds from dispositions.

Our focus remains on protecting the stable cash generation from the Midstream and Marketing and Specialties (M&S) businesses while balancing continued portfolio optimization.

Our focus remains on protecting the stable cash generation from the Midstream and M&S businesses while balancing continued portfolio optimization.

• We are targeting reductions of total debt to $17 billion and to lower our debt to capital ratio.

Basis of Presentation

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 Limited (NOVONIX) from our Midstream operating segment to Corporate and Other.

Business Environment

2 unchanged sentences

Our NGL business, including DCP Midstream Class A Segment, DCP Sand Hills Pipeline, LLC (DCP Sand Hills) and DCP Southern Hills Pipeline, LLC (DCP Southern Hills), contains both fee-based operations and operations directly impacted by NGL and natural gas prices.

The weighted-average NGL price was $0.74 per gallon during the first quarter of 2025, compared with $0.70 per gallon during the first quarter of 2024.

The Henry Hub natural gas price was $4.27 per million British thermal units (MMBtu) during the first quarter of 2025, compared with $2.41 per MMBtu during the first quarter of 2024.

The increases in NGL and natural gas prices were primarily due to colder weather and an increase in liquefied natural gas exports.

The weighted-average NGL price was $0.64 per gallon during the second quarter of 2025, compared with $0.68 per gallon during the second quarter of 2024.

The Henry Hub natural gas price was $3.16 per million British thermal units (MMBtu) during the second quarter of 2025, compared with $2.04 per MMBtu during the second quarter of 2024.

The decrease in NGL prices was primarily due to lower crude oil prices, while the increase in natural gas prices was due to increased liquified natural gas exports.

Our Chemicals segment consists of our 50% equity investment in Chevron Phillips Chemical Company LLC (CPChem).

The chemicals and plastics industry is mainly a commodity-based industry where the margins for key products are based on supply and demand, as well as cost factors.

The benchmark high-density polyethylene chain margin was 10.9 cents per pound in the first quarter of 2025, compared with 16.4 cents per pound in the first quarter of 2024.

The benchmark high-density polyethylene chain margin was 7.4 cents per pound in the second quarter of 2025, compared with 18.3 cents per pound in the second quarter of 2024.

The decrease was mainly due to higher natural gas and ethane prices and lower polyethylene demand.

1 unchanged sentence

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 decreased to an average of $15.83 per barrel during the first quarter of 2025, from an average of $19.45 per barrel during the first quarter of 2024.

The decrease in the composite market crack spread was primarily driven by market instability as geopolitical events drove demand concerns.

The composite 3:2:1 market crack spread for our business increased to an average of $21.65 per barrel during the second quarter of 2025, from an average of $18.96 per barrel during the second quarter of 2024.

The increase in the composite market crack spread was primarily driven by stronger year on year petroleum diesel demand, which has resulted in low seasonal inventories.

The price of U.S.

benchmark crude oil, West Texas Intermediate (WTI) at Cushing, Oklahoma, decreased to an average of $71.46 per barrel during the first quarter of 2025, from an average of $77.07 per barrel during the first quarter of 2024, primarily due to increased supply.

benchmark crude oil, West Texas Intermediate (WTI) at Cushing, Oklahoma, decreased to an average of $63.86 per barrel during the second quarter of 2025, from an average of $80.73 per barrel during the second quarter of 2024, primarily due to increased supply.

Results for our M&S segment depend largely on marketing fuel and lubricant margins and sales volumes of our refined products.

3 unchanged sentences

RESULTS OF OPERATIONS

Unless otherwise indicated, discussion of results for the three months ended March 31, 2025, is based on a comparison with the corresponding period of 2024.

Unless otherwise indicated, discussion of results for the three and six months ended June 30, 2025, is based on a comparison with the corresponding period of 2024.

Consolidated Results

1 unchanged sentence

Millions of Dollars

Three Months Ended March 31

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Midstream $ 731 767 1,482 1,321

9 unchanged sentences

Net income attributable to Phillips 66 $ 877 1,015 1,364 1,763

Our net income attributable to Phillips 66 in the first quarter of 2025 was $487 million, compared with $748 million in the first quarter of 2024.

The decrease was primarily due to a decline in realized refining margins primarily driven by lower market crack spreads, as well as lower volumes and higher costs driven by planned turnaround activity.

The decrease was also attributable to lower equity earnings from CPChem and declining domestic marketing fuel margins.

These decreases were partially offset by a before-tax gain of $1 billion associated with the sale of our investment in Coop recognized in our M&S segment.

See the “Segment Results” section for additional information on our segment results.

Net income attributable to Phillips 66 in the second quarter of 2025 was $877 million, compared with $1,015 million in the second quarter of 2024.

Net income attributable to Phillips 66 for the six months ended June 30, 2025, was $1,364 million, compared with $1,763 million for the six months ended June 30, 2024.

The decrease in net income attributable to Phillips 66 in the second quarter of 2025, was due to accelerated depreciation for the Los Angeles Refinery, lower equity earnings from CPChem and a gain on the sale of our ownership interest in Rockies Express Pipeline LLC (REX) that was recognized in 2024.

These decreases were partially offset by higher U.S.

and international marketing fuel margins, improved realized refining margins, primarily driven by higher market crack spreads, and a before-tax impairment of certain Midstream assets recognized in 2024.

The decrease in net income attributable to Phillips 66 the six months ended June 30, 2025, was due to lower realized refining margins, accelerated depreciation for the Los Angeles Refinery, and the gain on sale of our ownership interest in REX recognized in the second quarter of 2024, partially offset by a before-tax gain of $1 billion associated with the sale of our investment in Coop recognized in January 2025 and the before-tax impairment of certain Midstream assets recognized in the second quarter of 2024.

See the “Segment Results” section for additional information on our segment results and Note 21—Income Taxes, in the Notes to Consolidated Financial Statements for additional information on income taxes.

Statement of Income Analysis

Sales and other operating revenues and purchased crude oil and products decreased 15% for the three months ended March 31, 2025.

The decreases in both line items were due to lower prices for refined petroleum products and crude oil, partially offset by an increase in prices for NGL, as well as lower volumes primarily attributable to turnaround activity.

Equity in earnings of affiliates decreased 71% for the three months ended March 31, 2025.

The decrease was primarily attributable to lower equity earnings from WRB Refining LP (WRB) resulting from lower margins, as well as lower equity earnings from CPChem.

Sales and other operating revenues decreased 13% and 14% for the three and six months ended June 30, 2025, respectively.

Purchased crude oil and products decreased 16% and 15% for the three and six months ended June 30, 2025, respectively.

The decreases in both line items for the three months ended June 30, 2025, were due to lower prices for crude oil and refined petroleum products, as well as reduced marketing volumes, partially offset by higher refining volumes.

The decreases in both line items for the six months ended June 30, 2025, were due to lower prices for crude oil and refined petroleum products.

Equity in earnings of affiliates decreased 69% and 70% for the three and six months ended June 30, 2025, respectively.

The decreases for both periods of 2025 were primarily attributable to lower equity earnings from CPChem, as well as lower equity earnings from sales of ownership interests in REX, Coop and GCX.

The decrease for the six months ended June 30, 2025, was additionally impacted by lower equity earnings from WRB, as a result of decreased margins.

See the Chemicals segment analysis in the “Segment Results” section for additional information regarding CPChem.

Net gain on dispositions increased $1,087 million for the three months ended March 31, 2025, primarily due to a before-tax gain of $1 billion associated with the sale of our investment in Coop recognized in the M&S segment.

Refer to Note 7—Investments, Loans and Long-Term Receivables, in the Notes to Consolidated Financial Statements for additional information regarding the sale of Coop.

Other income decreased 42% for the three months ended March 31, 2025, primarily due to lower results from trading activities, as well as a decrease in the fair value of our investment in NOVONIX.

These decreases were partially offset by Clean Fuel Production credits recorded in the first quarter of 2025.

Operating expenses increased 12% for the three months ended March 31, 2025.

The increase was primarily due to higher turnaround and utility costs.

Depreciation and amortization increased 57% for the three months ended March 31, 2025, primarily due to $246 million of accelerated depreciation recorded in the first quarter of 2025 associated with our plan to cease operations at our Los Angeles Refinery in the fourth quarter of 2025.

See Note 2—Restructuring, in the Notes to Consolidated Financial Statements for information regarding our plans to cease operations at our Los Angeles Refinery.

Impairments decreased 84% for the three months ended March 31, 2025.

The decrease for the three months ended March 31, 2025, was primarily due to before-tax impairments of $163 million recorded in our Refining and Midstream segments in the first quarter of 2024 related to certain crude oil processing and logistics assets in California.

See Note 9—Impairments, in the Notes to Consolidated Financial Statements for additional information regarding impairments.

Taxes other than income taxes increased 41% for the three months ended March 31, 2025.

The increase was primarily driven by the expiration of the Biodiesel Blender Tax Credit, as well as an increase in taxes related to feedstock imports at the Rodeo Complex.

Income tax expense decreased 40% for the three months ended March 31, 2025, primarily due to lower income before income taxes.

See Note 7—Investments, Loans and Long-Term Receivables, in the Notes to Consolidated Financial Statements for additional information regarding the sales of ownership interests.

We had a net loss on dispositions of $93 million for the second quarter of 2025, compared with a net gain on dispositions of $237 million in the second quarter of 2024.

The decrease for the three months ended June 30, 2025, was due to a before-tax gain of $238 million recognized in the Midstream segment in the second quarter of 2024 associated with the sale of our 25% ownership interest in REX, compared with a before-tax loss primarily associated with an aggregate unrealized loss of $89 million on foreign currency forward contracts entered into in connection with the pending divestiture of 65% of Germany and Austria Marketing recognized in the second quarter of 2025.

Our net gain on dispositions increased $757 million for the six months ended June 30, 2025.

The increase for the six months ended June 30, 2025, was primarily due to a before-tax gain of $1 billion associated with the sale of our investment in Coop recognized in the M&S segment in 2025, partially offset by the before-tax gain of $238 million recognized in the Midstream segment in the second quarter of 2024.

See Note 7—Investments, Loans and Long-Term Receivables, in the Notes to Consolidated Financial Statements for additional information regarding the sale of Coop.

See Note 23—Assets Held for Sale or Sold, in the Notes to Consolidated Financial Statements for additional information on the Germany and Austria Marketing pending divestiture.

Other income increased $81 million and $40 million for the three and six months ended June 30, 2025, respectively.

The increase for the three months ended June 30, 2025, was primarily due to the recognition of Clean Fuel Production credits starting in 2025, as well as higher results from trading activities.

The increase for the six months ended June 30, 2025, was primarily due to the recognition of Clean Fuel Production credits starting in 2025, partially offset by changes in the fair value of our investment in NOVONIX.

Operating expenses increased 2% and 7% for the three and six months ended June 30, 2025, respectively.

The increase in the three months ended June 30, 2025, was primarily due to maintenance activity in the Midstream segment, partially offset by lower turnaround activity in the Refining segment.

The increase in the six months ended June 30, 2025, was primarily due to higher turnaround activity in the Refining segment and increased maintenance activity in the Midstream segment.

Depreciation and amortization increased 64% and 61% for the three and six months ended June 30, 2025, respectively, primarily due to $239 million and $485 million of accelerated depreciation for the Los Angeles Refinery, respectively, as well as depreciation from the recent acquisition of Coastal Bend.

See Note 2—Restructuring, in the Notes to Consolidated Financial Statements for information regarding our plans to cease operations and begin idling the facilities at our Los Angeles Refinery.

See Note 3—Business Combinations, in the Notes to Consolidated Financial Statements for information regarding the Coastal Bend acquisition.

Impairments decreased $221 million and $360 million for the three and six months ended June 30, 2025, respectively.

The decreases for both periods of 2025 were due to before-tax impairments of $224 million recognized in the second quarter of 2024 related to certain Midstream gathering and processing assets in Texas.

The decrease for the six months ended June 30, 2025, also included $163 million of before-tax impairments recognized in the first quarter of 2024 related to certain crude oil processing and logistics assets in California.

See Note 9—Impairments, in the Notes to Consolidated Financial Statements for additional information.

Taxes other than income taxes increased $169 million and $237 million for the three and six months ended June 30, 2025, respectively.

The increases for both periods in 2025 were primarily driven by the expiration of the Biodiesel Blender Tax Credit as of December 31, 2024, as well as increased property taxes on certain Midstream assets.

The increase for the six months ended June 30, 2025, was also impacted by an increase in taxes related to feedstock imports at the Rodeo Complex.

Interest and debt expense increased 14% and 6% for the three and six months ended June 30, 2025, respectively, primarily due to debt issuances related to an asset acquisition.

Income tax expense decreased 27% and 32% for the three and six months ended June 30, 2025, respectively, primarily due to lower income before income taxes.

See Note 21—Income Taxes, in the Notes to Consolidated Financial Statements for information regarding our effective income tax rates.

Net income attributable to noncontrolling interests increased $26 million for the three months ended March 31, 2025, due to higher results from DCP LP primarily driven by the sale of GCX in January 2025.

See Note 7—Investments, Loans and Long-Term Receivables, in the Notes to Consolidated Financial Statements for additional information regarding the sale of GCX.

Net income attributable to noncontrolling interests increased $26 million and $52 million for the three and six months ended June 30, 2025, respectively.

The increase in the three months ended June 30, 2025, is due to higher results from DCP LP primarily driven by before-tax impairments of $224 million recognized in the second quarter of 2024 related to certain Midstream gathering and processing assets in Texas.

The increase for the six months ended June 30, 2025, was also due to impacts from the gain on sale of DCP LP’s investment in GCX in January 2025.

See Note 7—Investments, Loans and Long-Term Receivables and Note 9—Impairments, in the Notes to Consolidated Financial Statements for additional information regarding the sale of GCX and the before-tax impairments recorded in 2024, respectively.

Segment Results

Three Months Ended March 31

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Millions of Dollars

1 unchanged sentence

Transportation $ 242 547 485 791

NGL 489 220 997 530

Total Midstream $ 731 767 1,482 1,321

10 unchanged sentences

* * Includes 100% of DCP Midstream Class A Segment.

*** Represents volumes delivered to major fractionation market hubs, including Mont Belvieu, Sweeny and Conway.

*** Represents volumes delivered to fractionation market hubs, including Mont Belvieu, Sweeny and Conway.

Includes 100% of DCP Midstream Class A Segment and Phillips 66’s direct interest in DCP Sand Hills and DCP Southern Hills.

3 unchanged sentences

and condensate recovery.

Results from our Midstream segment increased $197 million for the three months ended March 31, 2025.

Results from our Transportation business for the three months ended March 31, 2025, were in line with results for the three months ended March 31, 2024.

Results from our NGL business increased $198 million for the three months ended March 31, 2025, primarily due to a before-tax gain of $68 million recognized in the first quarter of 2025 on the sale of DCP LP’s 25% ownership interest in GCX, contributions from recently acquired gathering and processing assets, increased liquefied petroleum gas cargo volumes and margins, as well as, improved NGL and natural gas prices and increased fractionation volumes.

Results from our Midstream segment decreased $36 million and increased $161 million for the three and six months ended June 30, 2025, respectively.

Results from our Transportation business decreased $305 million and $306 million for the three and six months ended June 30, 2025, respectively, primarily due to the sale of our ownership interest in the REX in the second quarter of 2024.

Results from our NGL business increased $269 million and $467 million for the three and six months ended June 30, 2025, respectively.

The increases for both periods of 2025 were primarily due to before-tax impairment charges associated with certain gathering and processing assets in Texas recognized in 2024 and results from the recently acquired Coastal Bend operations.

In addition, the six months ended June 30, 2025, reflected benefits from the sale of DCP LP’s ownership interest in GCX in January 2025, improved export margins, and increased gathering and processing activity in the Permian region associated with our acquisition of Dos Picos.

See the “Executive Overview and Business Environment” section for information on market factors impacting this quarter’s results.

Three Months Ended March 31

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Millions of Dollars

11 unchanged sentences

Unless otherwise noted, amounts referenced below reflect our net 50% interest in CPChem.

Results from the Chemicals segment decreased $92 million for the three months ended March 31, 2025, primarily due to decreased polyethylene margins driven by lower sales prices and higher feedstock costs, lower volumes, and increased utility costs.

Results from the Chemicals segment decreased $202 million and $294 million for the three and six months ended June 30, 2025, respectively.

The decrease in the three months ended June 30, 2025, was primarily driven by lower polyethylene margins due to lower sales prices and higher feedstock costs.

The decrease in the six months ended June 30, 2025, was primarily due to decreased polyethylene margins driven by lower sales prices.

See the “Executive Overview and Business Environment” section for information on market factors impacting CPChem’s results.

Three Months Ended March 31

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Millions of Dollars

19 unchanged sentences

* See the “Non-GAAP Reconciliations” section for a reconciliation of this non-GAAP measure to the most directly comparable measure under generally accepted accounting principles in the United States (GAAP), income (loss) before income taxes per barrel.

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.

See Note 2—Restructuring, in the Notes to Consolidated Financial Statements for additional information.

1 unchanged sentence

Thousands of Barrels Daily

Three Months Ended March 31

Three Months Ended

June 30 Six Months Ended

Operating Statistics 2025 2024 2025 2024

24 unchanged sentences

The Refining segment refines crude oil and other feedstocks into petroleum products, such as gasoline and distillates, including aviation fuels, at 11 refineries in the United States and Europe.

Results from our Refining segment decreased $1,153 million for the three months ended March 31, 2025, primarily due to lower realized margins as a result of declining market crack spreads, as well as lower volumes and higher costs driven by planned turnaround activity.

Our worldwide refining crude oil capacity utilization rate was 80% and 92% for the three months ended March 31, 2025 and 2024, respectively.

The decrease for the three months ended March 31, 2025, was primarily due to higher turnaround activity.

Results from our Refining segment increased $57 million and decreased $1,096 million for the three and six months ended June 30, 2025, respectively.

The increase in the three months ended June 30, 2025, was primarily driven by improved realized margins, higher volumes and lower operating costs, partially offset by accelerated depreciation for the Los Angeles Refinery.

The increase in realized margins was primarily due to higher market crack spreads, partially offset by lower product differentials.

The decrease in the six months ended June 30, 2025, was primarily driven by lower realized margins resulting from declining market crack spreads and reduced product differentials, as well as accelerated depreciation for the Los Angeles Refinery.

Our worldwide refining crude oil capacity utilization rate was 98% and 89% for the three and six months ended June 30, 2025, respectively, compared with 98% and 95% in the three and six months ended June 30, 2024, respectively.

The decrease for the six months ended June 30, 2025, was primarily due to higher turnaround activity.

See the “Executive Overview and Business Environment” section for information on market factors impacting this quarter’s results.

Marketing and Specialties

Three Months Ended March 31

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Millions of Dollars

2 unchanged sentences

Income Before Income Taxes

$ 2.32 1.16 1.55 1.26

International 1.96 5.02 20.74 4.00

Realized Marketing Fuel Margins*

$ 2.83 1.70 2.14 1.65

International 7.11 5.87 6.00 5.38

9 unchanged sentences

Distillates 971 1,008 938 988

Other 70 52 55 50

2,342 2,431 2,241 2,331

The M&S segment purchases for resale and markets refined products, mainly in the United States and Europe.

In addition, this segment includes the manufacturing and marketing of base oils and lubricants.

Results from the M&S segment increased $916 million for the three months ended March 31, 2025.

The increase was primarily due to a before-tax gain of $1 billion associated with the sale of our investment in Coop, partially offset by lower domestic marketing fuel margins.

Refer to Note 7—Investments, Loans and Long-Term Receivables, in the Notes to Consolidated Financial Statements for additional information regarding the sale of Coop.

Results from the M&S segment increased $156 million and $1,072 million for the three and six months ended June 30, 2025, respectively.

The increase in the three months ended June 30, 2025, was primarily due to higher U.S.

and international marketing fuel margins, partially offset by a before-tax aggregate unrealized loss of $89 million on foreign currency forward contracts entered into in connection with the Germany and Austria Marketing pending divestiture.

The increase in the six months ended June 30, 2025, was primarily due to a before-tax gain of $1 billion associated with the sale of our investment in Coop and higher U.S.

and international marketing fuel margins.

See Note 7—Investments, Loans and Long-Term Receivables, in the Notes to Consolidated Financial Statements for additional information regarding the sale of Coop.

See Note 23—Assets Held for Sale in the Notes to Consolidated Financial Statements for additional information related to the Germany and Austria Marketing pending divestiture.

See the “Executive Overview and Business Environment” section for information on marketing fuel margins and other market factors impacting this quarter’s results.

Renewable Fuels

Three Months Ended March 31

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Millions of Dollars

11 unchanged sentences

In addition, this segment includes the global activities to procure renewable feedstocks, manage certain regulatory credits, and market renewable fuels.

Results from the Renewable Fuels segment decreased $130 million for the three months ended March 31, 2025.

The decrease was primarily driven by higher feedstock costs at the Rodeo Complex, partially offset by increased renewable fuels sales.

Results from the Renewable Fuels segment decreased $78 million and $208 million for the three and six months ended June 30, 2025, respectively.

The decreases in both periods were primarily due to decreased margins driven by increased feedstock costs and unfavorable hedging impacts, partially offset by increased credit production.

See the “Executive Overview and Business Environment” section for information on market factors impacting this quarter’s results.

1 unchanged sentence

Millions of Dollars

Three Months Ended March 31

Three Months Ended

June 30 Six Months Ended

2025 2024 2025 2024

Loss Before Income Taxes

7 unchanged sentences

See Note 15—Fair Value Measurements, in the Notes to Consolidated Financial Statements for additional information regarding our investment in NOVONIX.

Net interest expense for the three months ended March 31, 2025, was in line with net interest expense for the three months ended March 31, 2024.

Corporate overhead and other costs increased $33 million for the three months ended March 31, 2025, primarily due to higher depreciation expense associated with information technology assets and a charge of $21 million associated with canceled projects, partially offset by lower employee-related expenses.

The fair value of our investment in NOVONIX declined by $15 million in the three months ended March 31, 2025, compared with an increase of $5 million in the three months ended March 31, 2024.

Net interest expense increased $30 million and $31 million for the three and six months ended June 30, 2025, respectively, primarily due to debt issuances related to an asset acquisition.

Corporate overhead and other costs increased $63 million and $96 million for the three and six months ended June 30, 2025, respectively.

The increases for both periods of 2025 were primarily due to higher depreciation expense associated with information technology assets and advisory fees related to proxy solicitation services.

CAPITAL RESOURCES AND LIQUIDITY

11 unchanged sentences

To meet our short- and long-term liquidity requirements, we use a variety of funding sources but rely primarily on cash generated from operating activities and debt financing.

During the first three months of 2025, we generated $187 million of cash from operations.

We funded capital expenditures and investments of $423 million and received proceeds from asset dispositions of $2 billion.

Additionally, we repaid $1.3 billion of debt, paid $247 million to repurchase shares of our common stock and paid $469 million of dividends to our common stockholders.

During the first three months of 2025, cash and cash equivalents decreased to $1.5 billion.

During the first six months of 2025, we generated $1 billion of cash from operations.

We received proceeds from asset dispositions of $2 billion and received $1.1 billion from net debt borrowings.

We funded capital expenditures and investments of $1 billion and an acquisition of $2.2 billion, net of cash acquired.

Additionally, we paid $666 million to repurchase shares of our common stock and paid $956 million of dividends to our common stockholders.

During the first six months of 2025, cash and cash equivalents decreased by $686 million.

At this time, we believe that our cash on hand, as well as the sources of liquidity described herein, will be sufficient to fund our obligations over the short- and long-term.

1 unchanged sentence

Operating Activities

During the first three months of 2025, cash generated by operating activities was $187 million, compared with cash used in operations of $236 million for the first three months of 2024.

The increase was primarily due to more favorable working capital impacts, partially offset by lower earnings.

During the first six months of 2025, cash generated by operating activities was $1 billion, compared with $1.9 billion for the first six months of 2024.

The decrease was primarily due to unfavorable working capital impacts and lower earnings.

Our short- and long-term operating cash flows are highly dependent upon refining and marketing margins, NGL prices and chemicals margins.

6 unchanged sentences

Our operating cash flows are also impacted by distribution decisions made by our equity affiliates.

During the first three months of 2025, cash from operations included aggregate distributions of $273 million from our equity affiliates, while cash from operations during the first three months of 2024 included aggregate distributions of $348 million from our equity affiliates.

During the first six months of 2025, cash from operations included aggregate distributions of $501 million from our equity affiliates, while cash from operations during the first six months of 2024 included aggregate distributions of $656 million from our equity affiliates.

We cannot control the amount of future dividends from equity affiliates;

11 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 ourReceivable 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

Total Committed Capacity Available

At March 31, 2025, and December 31, 2024, we had approximately $5.4 billion and $4.6 billion, respectively, of total committed capacity available under the credit facilities described above.

At June 30, 2025, and December 31, 2024, we had approximately $3.7 billion and $4.6 billion, respectively, of total committed capacity available under the credit facilities described above.

Pending Marketing Divestiture

On May 15, 2025, we entered into a definitive agreement to divest 65% of our equity interest in 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.

See Note 23—Assets Held for Sale in the Notes to Consolidated Financial Statements for additional information.

Investment Dispositions

6 unchanged sentences

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.

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.

See Note 7—Investments, Loans and Long-Term Receivables, in the Notes to Consolidated Financial Statements for additional information regarding our investments in Dakota Access and ETCO.

4 unchanged sentences

Debt Financing

Our debt balance at March 31, 2025, and December 31, 2024, was $18.8 billion and $20.1 billion, respectively.

Our total debt-to-capital ratio was 40% and 41% at March 31, 2025, and December 31, 2024, respectively.

Our debt balance at June 30, 2025, and December 31, 2024, was $20.9 billion and $20.1 billion, respectively.

Our total debt-to-capital ratio was 42% and 41% at June 30, 2025, and December 31, 2024, respectively.

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.

Subsequent Midstream Acquisition

Midstream Acquisition

During the second quarter of 2025, we completed the Coastal Bend acquisition, for total consideration of $2.2 billion, net of cash acquired.

This acquisition was funded with cash and borrowings under our short-term liquidity facilities.

On February 12, 2025, our Board of Directors declared a quarterly cash dividend of $1.15 per common share.

This dividend was paid on March 5, 2025, to holders of record at the close of business on February 24, 2025.

See Note 3—Business Combinations, in the Notes to Consolidated Financial Statements for additional information.

On April 21, 2025, our Board of Directors declared a quarterly cash dividend of $1.20 per common share.

This dividend is payable on June 2, 2025, to shareholders of record as of the close of business on May 19, 2025.

This dividend was paid on June 2, 2025, to shareholders of record as of the close of business on May 19, 2025.

On July 10, 2025, our Board of Directors declared a quarterly cash dividend of $1.20 per common share.

This dividend is payable on September 2, 2025, to shareholders of record as of the close of business on August 19, 2025.

Share Repurchases

2 unchanged sentences

Any future share repurchases will be made at the discretion of management and will depend on various factors including our share price, results of operations, financial condition and cash required for future business plans.

For the three months ended March 31, 2025, we repurchased 2 million shares at an aggregate cost of approximately $0.2 billion.

For the six months ended June 30, 2025, we repurchased 6 million shares at an aggregate cost of approximately $0.6 billion.

Since July 2012, we have repurchased 244 million shares under our share repurchase program at an aggregate cost of $22.1 billion.

1 unchanged sentence

Employee Benefit Plan Contributions

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.

3 unchanged sentences

Millions of Dollars

Three Months Ended March 31

Six Months Ended

Capital Expenditures and Investments*

8 unchanged sentences

CPChem 407 400

* Excludes, Acquisitions net of cash acquired.

** Our share of joint ventures’ capital spending.

During the first three months of 2025, capital spending in our Midstream segment was $216 million and included:

• Continued development of a second Dos Picos gas plant, further expanding our operations in the Permian Basin.

During the first six months of 2025, capital spending in our Midstream segment was $600 million and included:

• Continued development and completion of a second Dos Picos gas plant, further expanding our operations in the Permian Basin.

• Gathering and processing projects to further align our wellhead-to-market strategy.

• Spending associated with other reliability and maintenance projects in our Transportation and NGL businesses.

During the first three months of 2025, on a 100% basis, CPChem’s capital expenditures and investments were $363 million.

During the first six months of 2025, on a 100% basis, CPChem’s capital expenditures and investments were $813 million.

Capital spending was primarily for the development of petrochemical projects on the U.S.

1 unchanged sentence

CPChem’s capital program was self-funded, and we expect CPChem to continue self-funding its capital program for the remainder of 2025.

Capital spending for the Refining segment during the first three months of 2025 was $176 million.

Major capital activities included installation of facilities to improve market capture at our refineries and capital spending to improve reliability at our refineries.

Capital spending for the Refining segment during the first six months of 2025 was $324 million.

Major capital activities included spend to improve reliability at our refineries and installation of facilities to improve market capture, product value, and utilization;

such as our recently completed Sweeny Crude Flex project.

Marketing and Specialties

Capital spending for the M&S segment during the first three months of 2025 was $15 million, primarily for the continued development and enhancement of retail sites in Europe, marketing-related information technology enhancements, spend associated with marketing and commercial fleet fueling businesses on the U.S.

Capital spending for the M&S segment during the first six months of 2025 was $49 million, primarily for the continued development and enhancement of retail sites in Europe, marketing-related information technology enhancements, spend associated with marketing and commercial fleet fueling businesses on the U.S.

West Coast, and reliability and maintenance projects for our Specialties business.

Renewable Fuels

Capital spending for the Renewable Fuels segment during the first three months of 2025 was $9 million.

Capital spending for the Renewable Fuels segment during the first six months of 2025 was $18 million.

The capital spending was focused on increasing reliability, debottlenecking opportunities and improving feed flexibility on existing assets.

Corporate and Other

Capital spending for Corporate and Other during the first three months of 2025 was $7 million, primarily related to information technology.

Capital spending for Corporate and Other during the first six months of 2025 was $19 million, primarily related to information technology.

Contingencies

31 unchanged sentences

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.

7 unchanged sentences

We are required to purchase RINs in the open market to satisfy the portion of our obligation under the Renewable Fuel Standard (RFS) that is not fulfilled by blending renewable fuels into the motor fuels we produce.

For the three months ended March 31, 2025, we were able to fully satisfy our obligations under the RFS through blending renewable fuels into the motor fuel we produce.

For the three months ended March 31, 2024, we incurred expenses of $93 million associated with our obligation to purchase RINs in the open market to comply with the RFS for our wholly owned refineries.

For the six months ended June 30, 2025, we were able to fully satisfy our obligations under the RFS through producing and blending renewable fuels into the motor fuel we produce.

For the six months ended June 30, 2024, we incurred expenses of $96 million associated with our obligation to purchase RINs in the open market to comply with the RFS for our wholly owned refineries.

These expenses are included in the “Purchased crude oil and products” line item on our consolidated statement of income.

Our jointly owned refineries also incurred expenses associated with the purchase of RINs in the open market, of which our share was $74 million and $59 million for the three months ended March 31, 2025 and 2024, respectively.

Our jointly owned refineries also incurred expenses associated with the purchase of RINs in the open market, of which our share was $175 million and $114 million for the six months ended June 30, 2025 and 2024, respectively.

These expenses are included in the “Equity in earnings of affiliates” line item on our consolidated statement of income.

3 unchanged sentences

These requests, notices and lawsuits assert potential liability for remediation costs at various sites that typically are not owned by us, but allegedly contain wastes attributable to our past operations.

At March 31, 2025, and December 31, 2024, we reported that we had been notified of potential liability under CERCLA and comparable state laws at 19 sites within the United States and Puerto Rico.

At March 31, 2025, we reported that we had been notified of potential liability under CERCLA and comparable state laws at 19 sites within the United States and Puerto Rico.

During the second quarter of 2025, our legal organization approved the removal of two sites, thus, leaving 17 unresolved sites with potential liability at June 30, 2025.

Notwithstanding any of the foregoing, and as with other companies engaged in similar businesses, environmental costs and liabilities are inherent concerns in certain of our operations and products, and there can be no assurance that those costs and liabilities will not be material.

14 unchanged sentences

All guarantees are full and unconditional.

At March 31, 2025, $14.4 billion of senior unsecured notes outstanding has been guaranteed by the Obligor Group.

At June 30, 2025, $14.4 billion of senior unsecured notes outstanding has been guaranteed by the Obligor Group.

Summarized financial information of the Obligor Group is presented on a combined basis.

2 unchanged sentences

Significant intercompany transactions and receivable/payable balances between the Obligor Group and non-guarantor subsidiaries are presented separately in the summarized financial information.

The summarized results of operations for the three months ended March 31, 2025, and the summarized financial position at March 31, 2025, and December 31, 2024, for the Obligor Group on a combined basis were:

The summarized results of operations for the six months ended June 30, 2025, and the summarized financial position at June 30, 2025, and December 31, 2024, for the Obligor Group on a combined basis were:

Summarized Combined Statement of Loss Millions of Dollars

Three Months Ended March 31, 2025

Six Months Ended June 30, 2025

Sales and other operating revenues $ 46,680

26 unchanged sentences

Total liabilities and equity 37,948 38,608

* Includes goodwill and intangibles held in Assets held for sale related to the Germany and Austria Marketing pending divestiture, see Note 23—Assets Held for Sale, in the Notes to Consolidated Financial Statements for additional information.

NON-GAAP RECONCILIATIONS

12 unchanged sentences

Coast Worldwide

Three Months Ended March 31, 2025

Loss before income taxes $ (199) (333) (50) (355) (937)

Three Months Ended June 30, 2025

Income (loss) before income taxes $ 49 101 392 (183) 359

Taxes other than income taxes 20 24 25 25 94

11 unchanged sentences

49,270 52,111 51,477 21,914 174,772

Loss before income taxes per barrel ( dollars per

Income (loss) before income taxes per barrel ( dollars per

$ 1.00 1.93 13.67 (8.37) 2.36

1 unchanged sentence

8.16 8.71 15.61 14.06 11.25

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Income before income taxes $ 15 42 243 2 302

Taxes other than income taxes

15 19 22 18 74

Depreciation, amortization and impairments

51 64 44 44 203

Selling, general and administrative expenses

Operating expenses

264 269 142 209 884

Equity in (earnings) losses of affiliates 2 — (35) — (33)

Other segment (income) expense, net 18 1 (22) 2 (1)

Proportional share of refining gross margins contributed by equity affiliates

32 — 228 — 260

Realized refining margins

$ 409 404 647 280 1,740

Total processed inputs ( thousands of barrels )

50,545 51,204 27,994 21,553 151,296

Adjusted total processed inputs ( thousands of barrels )*

50,545 51,204 50,805 21,553 174,107

Income before income taxes per barrel ( dollars per barrel )**

$ 0.30 0.82 8.69 0.10 2.00

Realized refining margins ( dollars per barrel )***

8.10 7.88 12.75 13.06 10.01

* Adjusted total processed inputs include our proportional share of processed inputs of an equity affiliate.

** Income (loss) before income taxes divided by total processed inputs.

*** Realized refining margins per barrel, as presented, are calculated using the underlying realized refining margin amounts, in dollars, divided by adjusted total processed inputs, in barrels.

As such, recalculated per barrel amounts using the rounded margins and barrels presented may differ from the presented per barrel amounts.

Millions of Dollars, Except as Indicated

Realized Refining Margins Atlantic Basin/

Coast Central

Corridor West

Coast Worldwide

Six Months Ended June 30, 2025

Income (loss) before income taxes $ (150) (232) 342 (538) (578)

4 unchanged sentences

Selling, general and administrative expenses

14 14 36 14 78

Operating expenses

654 638 294 336 1,922

Equity in losses of affiliates 4 — 103 — 107

Other segment (income) expense, net (39) 1 (40) 26 (52)

Proportional share of refining gross margins contributed by equity affiliates

43 — 332 — 375

Realized refining margins

$ 677 619 1,203 460 2,959

Total processed inputs ( thousands of barrels )

87,986 89,317 55,879 43,276 276,458

Adjusted total processed inputs ( thousands of barrels )*

87,986 89,317 99,752 43,276 320,331

Income (loss) before income taxes per barrel ( dollars per barrel )**

$ (1.70) (2.60) 6.13 (12.43) (2.09)

Realized refining margins ( dollars per barrel )***

7.68 6.92 12.07 10.64 9.23

Six Months Ended June 30, 2024

Income (loss) before income taxes $ 93 162 456 (193) 518

Taxes other than income taxes

39 57 50 49 195

Depreciation, amortization and impairments

103 126 88 200 517

Selling, general and administrative expenses

15 15 49 10 89

Operating expenses

515 570 285 467 1,837

Equity in (earnings) losses of affiliates 3 (1) (143) — (141)

10 unchanged sentences

97,456 98,696 98,717 45,192 340,061

Income before income taxes per barrel ( dollars per barrel )**

Income (loss) before income taxes per barrel ( dollars per barrel )**

$ 0.95 1.64 8.51 (4.27) 1.76

13 unchanged sentences

Three Months Ended

March 31, 2025 Three Months Ended

March 31, 2024

June 30, 2025 Three Months Ended

June 30, 2024

International U.S.

6 unchanged sentences

Other operating revenues* (121) (8) (123) (9)

Other (income) expense, net 12 — 14 (2)

Special items:

Net loss on asset disposition — 89 — —

Marketing margins 523 221 328 186

margin for nonfuel related sales — 18 — 16

Realized marketing fuel margins $ 523 203 328 170

Total fuel sales volumes ( thousands of barrels )

184,591 28,560 192,398 28,893

Income before income taxes per barrel ( dollars per barrel )

$ 2.32 1.96 1.16 5.02

Realized marketing fuel margins ( dollars per barrel )**

2.83 7.11 1.70 5.87

* Includes other nonfuel revenues.

** Realized marketing fuel margins per barrel, as presented, are calculated using the underlying realized marketing fuel margin amounts, in dollars, divided by sales volumes, in barrels.

As such, recalculated per barrel amounts using the rounded margins and barrels presented may differ from the presented per barrel amounts.

Millions of Dollars, Except as Indicated

Six Months Ended

June 30, 2025 Six Months Ended

June 30, 2024

International U.S.

International

Realized Marketing Fuel Margins

Income before income taxes $ 540 1,173 465 226

Depreciation and amortization 25 15 19 36

Selling, general and administrative expenses 405 137 403 127

Equity in earnings of affiliates (18) (9) (14) (53)

Other operating revenues* (226) (20) (231) (15)

Other expense, net 21 3 25 13

Special items:

Net gain on asset disposition — (1,017) — —

Net gain on asset dispositions — (928) — —

Legal settlement — — (59) —

8 unchanged sentences

2.14 6.00 1.65 5.38

* Includes other nonfuel revenues and expenses.

* Includes other nonfuel revenues.

** Realized marketing fuel margins per barrel, as presented, are calculated using the underlying realized marketing fuel margin amounts, in dollars, divided by sales volumes, in barrels.

47 unchanged sentences

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our commodity price risk and interest rate risk at March 31, 2025, did not differ materially from the risks disclosed under Item 7A of our 2024 Annual Report on Form 10-K.

Our commodity price risk and interest rate risk at June 30, 2025, did not differ materially from the risks disclosed under Item 7A of our 2024 Annual Report on Form 10-K.

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 2. Management’s Discussion and Analysis