What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-10-29 compared with 2025-07-28 · 221 added, 147 removed, 900 unchanged (29% of the section changed)

3 unchanged sentences

Three Months Ended

June 30 Six Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

2 unchanged sentences

Equity in earnings of affiliates 337 549 643 1,564

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

Net gain on dispositions 11 2 1,005 239

Other income 116 84 311 239

26 unchanged sentences

Three Months Ended

June 30 Six Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

18 unchanged sentences

Cash and cash equivalents $ 1,845 1,738

Accounts and notes receivable (net of allowances of $ 70 million in 2025 and 2024)

Accounts and notes receivable (net of allowance of $ 73 million in 2025 and $ 70 million in 2024)

Accounts and notes receivable—related parties 1,381 1,489

41 unchanged sentences

Millions of Dollars

Six Months Ended

Nine Months Ended

Cash Flows From Operating Activities

6 unchanged sentences

Undistributed equity earnings 140 ( 519 )

Loss on early redemption of debt — 2

Gain on early redemption of debt — ( 3 )

Net gain on dispositions ( 1,005 ) ( 239 )

Unrealized investment loss 10 2

Other 52 ( 6 )

Working capital adjustments

8 unchanged sentences

Acquisitions, net of cash acquired ( 2,210 ) ( 567 )

Purchases of government obligations — ( 1,100 )

Return of investments in equity affiliates 58 122

19 unchanged sentences

Millions of Dollars

Six Months Ended

Nine Months Ended

Reconciliation of Cash and Cash Equivalents at end of period

5 unchanged sentences

Millions of Dollars

Three Months Ended June 30

Three Months Ended September 30

Attributable to Phillips 66

1 unchanged sentence

Other Comprehensive Loss Noncontrolling Interests Total

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

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

Net income — — — 133 — 34 167

Other comprehensive income — — — — 195 — 195

Other comprehensive loss — — — — ( 45 ) — ( 45 )

Dividends paid on common stock ($ 1.20 per share)

4 unchanged sentences

Benefit plan activity — 91 — ( 3 ) — — 88

September 30, 2025 $ 7 19,911 ( 23,656 ) 30,818 ( 163 ) 1,160 28,077

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

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

Net income — — — 346 — 23 369

5 unchanged sentences

Benefit plan activity — 42 — ( 4 ) — — 38

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

Three Months Ended June 30

September 30, 2024 $ 7 19,759 ( 22,140 ) 31,237 ( 141 ) 1,062 29,784

Three Months Ended September 30

Common Stock Issued Treasury Stock

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

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

Repurchase of common stock — 2,073,442

Shares issued—share-based compensation 870,312 —

September 30, 2025 659,131,505 256,210,370

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

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

Repurchase of common stock — 5,932,552

Shares issued—share-based compensation 352,596 —

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

September 30, 2024 656,887,405 243,898,178

See Notes to Consolidated Financial Statements.

Millions of Dollars

Six Months Ended June 30

Nine Months Ended September 30

Attributable to Phillips 66

10 unchanged sentences

Benefit plan activity — 123 — ( 10 ) — — 113

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

September 30, 2025 $ 7 19,911 ( 23,656 ) 30,818 ( 163 ) 1,160 28,077

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

Net income — — — 2,109 — 41 2,150

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

Other comprehensive income — — — — 141 — 141

Dividends paid on common stock ($ 3.35 per share)

3 unchanged sentences

Benefit plan activity — 109 — ( 12 ) — — 97

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

Six Months Ended June 30

September 30, 2024 $ 7 19,759 ( 22,140 ) 31,237 ( 141 ) 1,062 29,784

Nine Months Ended September 30

Common Stock Issued Treasury Stock

2 unchanged sentences

Shares issued—share-based compensation 2,143,644 —

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

September 30, 2025 659,131,505 256,210,370

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

1 unchanged sentence

Shares issued—share-based compensation 2,045,304 —

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

September 30, 2024 656,887,405 243,898,178

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

The results of operations for the three and nine months ended September 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 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:

In October 2024, we announced our intention to cease operations and begin idling the facilities at our Los Angeles Refinery in the fourth quarter of 2025.

In the third quarter of 2025, we began the permitting processes for new uses at the Los Angeles Refinery.

As a result of the decision to cease operations and begin idling the facilities, 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 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 and six months ended June 30, 2025, is reflected in the depreciation discussed above.

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.

As of September 30, 2025, the $ 512 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 nine months ended September 30, 2025, was $ 265 million and $ 800 million, respectively, including $ 241 million and $ 726 million of accelerated depreciation, respectively.

We recorded accelerated depreciation of $ 25 million for the three and nine months ended September 30, 2024.

This accelerated depreciation is included within the “Depreciation and amortization” line item on our consolidated statement of income for the three and nine months ended September 30, 2025 and 2024.

• Our asset retirement obligations (AROs) at the Los Angeles Refinery were $ 288 million as of September 30, 2025, primarily reflecting asbestos abatement and decommissioning of assets.

The estimation of asset retirement obligations requires 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 and nine months ended September 30, 2025, is reflected in the depreciation discussed above.

• In the third quarter of 2025, we accrued $ 69 million in environmental expenses related to future groundwater mitigation plans at the Los Angeles Refinery.

This charge is included within the “Operating expenses” line item on our consolidated statement of income for the three and nine months ended September 30, 2025.

• We recorded $ 41 million of severance costs, which are included within the “Operating expenses” line item on our consolidated statement of income for the three and nine months ended September 30, 2024.

Note 3— Business Combinations

3 unchanged sentences

$ 4 million of other assets;

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

$ 8 million of net working capital (excluding cash);

and $ 33 million of other long-term liabilities.

12 unchanged sentences

These operations were acquired to support the placement of renewable diesel produced by the Rodeo Renewable Energy Complex (Rodeo Complex).

For this acquisition, we provisionally recorded $ 20 million of amortizable intangible assets, primarily customer relationships;

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

For this acquisition, we recorded $ 20 million of amortizable intangible assets, primarily customer relationships;

$ 62 million of PP&E, including finance lease right of use assets;

1 unchanged sentence

and $ 45 million of finance lease liabilities.

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

Subsequent Refining Acquisition

On September 9, 2025, we entered into a definitive agreement to acquire the remaining 50 % equity interest in WRB Refining LP (WRB) from subsidiaries of Cenovus Energy Inc.

The transaction closed on October 1, 2025, for total cash consideration of $ 1.3 billion, subject to post-closing adjustments.

The transaction will be accounted for as a business combination and the assets acquired and liabilities assumed will be measured at fair value.

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

Note 4— Sales and Other Operating Revenues

3 unchanged sentences

Three Months Ended

June 30 Six Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

16 unchanged sentences

Contract-Related Assets and Liabilities

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

At September 30, 2025, and December 31, 2024, receivables from contracts with customers were $ 8,623 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 June 30, 2025, and December 31, 2024, our asset balances related to such payments were $ 730 million and $ 643 million, respectively.

At September 30, 2025, and December 31, 2024, our asset balances related to such payments were $ 769 million and $ 643 million, respectively.

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

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

At September 30, 2025, and December 31, 2024, contract liabilities were $ 215 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 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.

At September 30, 2025, the remaining performance obligations related to these minimum volume commitment contracts amounted to $ 894 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 September 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 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.

At September 30, 2025, and December 31, 2024, we reported $ 10,543 million and $ 11,033 million of accounts and notes receivable, respectively, net of allowances of $ 73 million and $ 70 million, respectively.

Based on an aging analysis at September 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

$ 6,419 3,995

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.

Inventories valued on the last-in, first-out (LIFO) basis totaled $ 5,864 million and $ 3,443 million at September 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 September 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 and six months ended June 30, 2025 and 2024.

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

Note 7— Investments, Loans and Long-Term Receivables

15 unchanged sentences

The USACE also identified three “action” alternatives;

two of them contemplate that the USACE would reissue the easement to Dakota Access under essentially the same terms as 2017 with either the same or a larger volume of oil allowed through the pipeline, while the third alternative would require decommissioning of the current pipeline and construction of a new line 39 miles upstream from the current location.

two of them contemplate that the USACE would reissue the easement to Dakota Access under essentially the same terms as in 2017 with either the same or a larger volume of oil allowed through the pipeline, while the third alternative would require decommissioning of the current pipeline and construction of a new line 39 miles upstream from the current location.

The public comment period concluded on December 13, 2023.

10 unchanged sentences

Motions to dismiss the latest lawsuit were filed by USACE, Dakota Access and Intervenors and opposed by the Tribe.

The parties are awaiting the district court’s decision.

On March 19, 2025, the Tribe filed a notice in support of its latest lawsuit, indicating three additional facts for the district court to consider when making its ruling on the lawsuit.

These facts relate to events regarding Energy Transfer LP’s conduct and third-party actions against it.

Subsequently, the Court dismissed this lawsuit, finding that the Tribe’s lawsuit was premature and cannot be refiled until after a final EIS is issued.

Dakota Access and ETCO have guaranteed repayment of senior unsecured notes issued by a wholly owned subsidiary of Dakota Access.

1 unchanged sentence

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

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

At September 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 June 30, 2025.

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

At September 30, 2025, the aggregate book value of our investments in Dakota Access and ETCO was $ 848 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 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.

At September 30, 2025, our maximum exposure to loss was $ 258 million, which represented the book value of our investment in OnCue of $ 202 million and guaranteed debt obligations of $ 56 million.

WRB Refining LP Impairment

In the third quarter of 2025, we identified impairment indicators related to our equity investment in WRB, in our Refining segment, as a result of our definitive agreement to acquire the remaining 50 % equity interest in WRB for a purchase price that was below the carrying value of our existing 50 % equity interest in WRB.

See Note 3—Business Combinations, for additional information regarding our acquisition of WRB.

We performed an impairment analysis based on a market approach and concluded the decline in fair value to be other than temporary.

As a result, we recorded a $ 948 million before-tax impairment to reduce the carrying value of our existing 50 % equity interest in WRB to its fair value of $ 1.3 billion as of September 30, 2025.

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

See Note 15—Fair Value Measurements, for additional information on the determination of fair value used to record these impairments.

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 (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.

We recognized a before-tax gain of $ 1 billion associated with the sale, which is included within the “Net gain on dispositions” line item on our consolidated statement of income for the nine months ended September 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 (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.

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

Note 8— Properties, Plants and Equipment

2 unchanged sentences

Millions of Dollars

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Midstream $ 29,279 5,530 23,749 26,187 4,820 21,367

12 unchanged sentences

Three Months Ended

June 30 Six Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

4 unchanged sentences

Total impairments $ 951 29 981 419

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.

In the third quarter of 2025, we recorded a before-tax impairment of $ 948 million related to our equity investment in WRB, which is reported in our Refining segment.

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

For the three and nine months ended September 30, 2024, we recorded before-tax impairments totaling $ 29 million and $ 419 million, respectively.

In the third quarter of 2024, we recorded a before-tax impairment of $ 28 million reported in our Midstream segment related to certain crude gathering assets in Texas.

The nine-month period of 2024 also included $ 224 million of before-tax impairments recorded in our Midstream segment related to certain gathering and processing assets in Texas and $ 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.

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

7 unchanged sentences

Three Months Ended

June 30 Six Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

12 unchanged sentences

Senior Notes and Term Loan Issuances and Repayments

On September 11, 2024, Phillips 66 Company, a wholly owned subsidiary of Phillips 66, issued $ 1.8 billion aggregate principal amount of senior unsecured notes that are fully and unconditionally guaranteed by Phillips 66.

The senior unsecured notes issuance consisted of:

• $ 600 million aggregate principal amount of 5.250 % Senior Notes due 2031 (Additional 2031 Notes).

• $ 600 million aggregate principal amount of 4.950 % Senior Notes due 2035 (2035 Notes).

• $ 600 million aggregate principal amount of 5.500 % Senior Notes due 2055 (2055 Notes).

Interest on the Additional 2031 Notes is payable semi-annually on June 15 and December 15 of each year and commenced on December 15, 2024.

Interest on the 2035 Notes and 2055 Notes is payable semi-annually on March 15 and September 15 of each year and commenced on March 15, 2025.

On February 28, 2024, Phillips 66 Company, a wholly owned subsidiary of Phillips 66, issued $ 1.5 billion aggregate principal amount of senior unsecured notes that are fully and unconditionally guaranteed by Phillips 66.

10 unchanged sentences

On February 15, 2024, upon maturity, Phillips 66 repaid its 0.900 % Senior Notes due February 2024, with an aggregate principal amount of $ 800 million.

Discharge of Senior Notes

On September 20, 2024, we extinguished (i) the remaining $ 441 million outstanding principal amount of Phillips 66 Company’s 3.605 % Senior Notes due February 2025 (2025 P66 Co Notes), and (ii) the remaining $ 650 million outstanding principal amount of Phillips 66’s 3.850 % Senior Notes due April 2025 (the 2025 PSX Notes, and together with the 2025 P66 Co Notes, the Discharged Notes), whereby we irrevocably transferred a total of $ 1,100 million in government obligations to the trustee of the 2025 P66 Co Notes and the 2025 PSX Notes.

The cash paid to purchase the government obligations is included within investing cash flows on our consolidated statement of cash flows.

These government obligations yielded sufficient principal and interest over their remaining term to permit the trustee to satisfy the remaining principal and interest due on the Discharged Notes on the applicable maturity dates.

On September 20,

2024, Phillips 66 and Phillips 66 Company ceased to be the primary obligors under the Discharged Notes.

The transfer of the government obligations to the trustee was accounted for as a transfer of financial assets.

If the trustee was unable to apply the government obligations to fund the remaining principal and interest payments on the Discharged Notes, then the Company’s obligations under the Indenture with respect to the Discharged Notes would have been revived and reinstated.

We deemed the likelihood of such event to be remote with no impact to the legal isolation of the assets.

Accordingly, the Discharged Notes and the government obligations were derecognized on our balance sheet at December 31, 2024.

For the three and nine months ended September 30, 2024, we recognized an immaterial gain on the extinguishment of this debt.

Junior Subordinated Notes Issuances

On September 18, 2025, Phillips 66 Company, a wholly owned subsidiary of Phillips 66, issued $ 2 billion aggregate principal amount of junior subordinated notes that are fully and unconditionally guaranteed by Phillips 66.

The junior subordinated notes issuance consisted of:

• $ 1 billion aggregate principal amount of 5.875 % Series A Junior Subordinated Notes due 2056 (Series A 2056 Notes).

• $ 1 billion aggregate principal amount of 6.200 % Series B Junior Subordinated Notes due 2056 (Series B 2056 Notes).

Interest on the Series A 2056 Notes and Series B 2056 Notes is payable semi-annually in arrears on March 15 and September 15 of each year, commencing on March 15, 2026.

The Series A 2056 Notes will bear interest at 5.875 % per year until March 15, 2031.

The interest rate will reset every five years beginning on March 15, 2031, to equal the then-current five-year U.S.

Treasury rate plus a spread of 2.283 %, provided that the interest rate will not reset below 5.875 %.

The Series B 2056 Notes will bear interest at 6.200 % per year until March 15, 2036.

The interest rate will reset every five years beginning on March 15, 2036, to equal the then-current five-year U.S.

Treasury rate plus a spread of 2.166 %, provided that the interest rate will not reset below 6.200 %.

We may defer interest payments on the Series A 2056 Notes and Series B 2056 Notes on one or more occasions for up to 10 consecutive years per deferral period.

If interest payments on the Series A 2056 Notes or Series B 2056 Notes are deferred, we may not, subject to certain limited exceptions, declare or pay any dividends or distributions, or redeem, purchase, acquire, or make a liquidation payment on any of our capital stock during the deferral period.

Also, during the deferral period, we may not (i) pay any principal of, or interest or premium, if any, on or repay, repurchase or redeem any debt securities of Phillips 66 or Phillips 66 Company that rank equally with, or junior to, the Series A 2056 Notes and Series B 2056 Notes, respectively, in right of payment or (ii) make any payments with respect to any guarantee by Phillips 66 or Phillips 66 Company of indebtedness if the guarantee ranks equally with or junior to the Series A 2056 Notes or Series B 2056 Notes, respectively, in right of payment.

Accounts Receivable Securitization

2 unchanged sentences

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.

On September 29, 2025, Phillips 66 Company amended the Receivables Securitization Facility to, among other things, increase the maximum size of the Receivables Securitization Facility from $ 1 billion to $ 1.25 billion and extend the term of the facility through September 28, 2026.

Under the amended Receivables Securitization Facility, P66 Receivables may borrow and incur indebtedness from, and/or sell certain accounts receivable in an amount not to exceed $ 1.25 billion in the aggregate, and will secure its obligations with a pledge of undivided interests in such accounts receivable, together with related security and interests in the proceeds thereof, to PNC Bank, National Association, as Administrative Agent, for the benefit of the secured parties thereunder.

Accounts outstanding under the Receivables Securitization Facility accrue interest at an adjusted term Secured Overnight Financing Rate (SOFR) plus the applicable margin.

2 unchanged sentences

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.

For the three months ended September 30, 2025, we sold $ 160 million of accounts receivable for cash proceeds under the Receivables Securitization Facility.

For the nine months ended September 30, 2025, we sold $ 593 million in accounts receivable in exchange for cash proceeds of $ 290 million, and a $ 303 million reduction in our borrowings under the Receivables Securitization Facility was recognized as a non-cash financing transaction.

At September 30, 2025, we had utilized $ 160 million of the $ 1.25 billion capacity on our Receivable Securitization Facility from sold accounts receivable not yet remitted to the Administrative Agent.

We had no outstanding borrowings under the Receivable Securitization Facility at September 30, 2025.

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

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

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

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

At September 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.

10 unchanged sentences

or (b) the reference rate (as described in the Facility) plus the applicable margin.

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

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 September 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 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.

At September 30, 2025, we had $ 897 million borrowings outstanding under this program, while at December 31, 2024, $ 435 million of commercial paper had been issued under this program.

DCP Midstream Class A Segment

2 unchanged sentences

Note 12— Guarantees

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

At September 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.

2 unchanged sentences

Lease Residual Value Guarantees

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 June 30, 2025.

Under the operating lease agreement on our headquarters facility in Houston, Texas, we had the option at the end of the existing lease term to request to renew the lease, purchase the facility or assist the lessor in marketing it for resale.

In September 2025, we amended and extended the lease term to September 2030.

Under the new operating lease agreement, we have a residual value guarantee with a maximum potential future exposure of $ 404 million at September 30, 2025.

We also have residual value guarantees associated with railcar, airplane and truck leases with maximum potential future exposures totaling $ 174 million.

3 unchanged sentences

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

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 .

At September 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 $ 281 million.

5 unchanged sentences

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

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

At September 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.

1 unchanged sentence

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 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.

At September 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 within the “Asset retirement obligations and accrued environmental costs” line item on our consolidated balance sheet.

For additional information about environmental liabilities, see Note 13—Contingencies and Commitments.

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

At September 30, 2025, $ 143 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.

35 unchanged sentences

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

At September 30, 2025, our total environmental accruals were $ 521 million, compared with $ 439 million at December 31, 2024.

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

11 unchanged sentences

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

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

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

A hearing on the exemplary damages was held on March 4, 2025.

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

Based on the willfulness finding, Propel Fuels asked the Propel Court to award $ 1.2 billion in exemplary damages, and Phillips 66 Company filed a brief in opposition to that request.

A hearing on exemplary damages was held on March 4, 2025.

On August 5, 2025, the Propel Court entered a final judgment against Phillips 66 Company in the amount of $ 833 million.

The judgment includes the $ 604.9 million jury verdict, $ 195 million of exemplary damages, and $ 33.3 million of pre-judgment interest at 7 %.

Post-judgment interest of 10 % is accruing from the date of the final judgment.

On August 25, 2025, Phillips 66 Company filed three post-trial motions requesting that the Propel Court render judgment in favor of Phillips 66 Company, grant a new trial, and/or reduce the damages award.

On October 20, 2025, the Propel Court denied Phillips 66 Company’s motions.

On October 24, 2025, Propel Fuels filed additional motions with the Propel Court seeking attorney’s fees and costs.

Phillips 66 will file its opposition and once the record on this issue is complete, the Propel Court will rule on these motions.

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

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 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.

Because of the uncertainties associated with ongoing litigation, we are unable to estimate the range of reasonably possible loss that may be attributable to exemplary damages, if any, in excess of the amount accrued.

As a result of the August 2025 final judgment and the October 2024 jury verdict, our recorded accruals totaled $ 846 million and $ 604.9 million which are included within the “Selling, general and administrative expenses” line on our consolidated statement of income for the periods ending September 30, 2025 and 2024, respectively, and are reported in the M&S segment.

The accrued amounts are reflected as “Other liabilities and deferred credits” on our consolidated balance sheet as of September 30, 2025, and December 31, 2024, respectively.

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

If information were to become available that would allow us to reasonably estimate a range of potential exposure in an amount higher or lower than the amount already accrued, we would adjust our accrued liabilities accordingly.

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

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

Until the final resolution of this matter, we may be exposed to losses in excess of the amount recorded, and such amounts may have a material adverse effect on our financial position.

Other Contingencies

1 unchanged sentence

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 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.

At September 30, 2025, we had performance obligations secured by letters of credit and bank guarantees of $ 894 million related to various purchase and other commitments incident to the ordinary conduct of business.

Note 14— Derivatives and Financial Instruments

2 unchanged sentences

Because we do not apply hedge accounting for commodity derivative contracts, all realized and unrealized gains and losses from commodity derivative contracts are recognized in our consolidated statement of income.

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 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.

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

Realized and unrealized gains and losses on foreign currency derivatives entered into in connection with our investment dispositions are reported within 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 within the “Cash Flows from Operating Activities” section on our consolidated statement of cash flows.

12 unchanged sentences

Millions of Dollars

June 30, 2025 December 31, 2024

September 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

5 unchanged sentences

Total $ 2,618 ( 2,448 ) 30 200 2,217 ( 2,219 ) 62 60

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.

At September 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:

1 unchanged sentence

Three Months Ended

June 30 Six Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

2 unchanged sentences

Purchased crude oil and products 42 234 ( 80 ) 16

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

Net gain from commodity derivative activity $ 65 499 95 176

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

2 unchanged sentences

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 June 30, 2025, and December 31, 2024.

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

Open Position

4 unchanged sentences

Natural gas (billions of cubic feet)

( 16 ) ( 14 )

Credit Risk from Derivative and Financial Instruments

13 unchanged sentences

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 June 30, 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 September 30, 2025, and December 31, 2024.

Note 15— Fair Value Measurements

21 unchanged sentences

Physical and OTC commodity options are valued using industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and contractual prices for the underlying instruments, as well as other relevant economic measures.

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

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

We use a midmarket pricing convention (the midpoint between bid and ask prices).

3 unchanged sentences

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.

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

9 unchanged sentences

Millions of Dollars

June 30, 2025

September 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

31 unchanged sentences

$ 2,173 18,718 1 20,892 ( 2,118 ) ( 62 ) 1,020 19,732

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.

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.

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

Foreign currency derivatives are recorded within the “Other accruals” line item on our consolidated balance sheet at September 30, 2025, and within 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.

7 unchanged sentences

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.

Equity Investments and PP&E Impairments

In the third quarter of 2025, we remeasured the carrying value of our equity investment in WRB to fair value.

Fair value was determined using a market approach.

The valuation resulted in a Level 3 nonrecurring fair value measurement.

See Note 7—Investments, Loans and Long-Term Receivables, and Note 9—Impairments, for additional information regarding the impairment of our investment in WRB.

In the second and third quarters of 2024, we remeasured the carrying value of the net PP&E and equity investment in certain crude gathering, and gathering and processing asset groups in Texas 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.

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

These valuations resulted in Level 3 nonrecurring fair value measurements.

1 unchanged sentence

Note 16— Pension and Postretirement Plans

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

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

Millions of Dollars

2 unchanged sentences

Components of Net Periodic Benefit Cost

Three Months Ended June 30

Three Months Ended September 30

Service cost $ 31 3 29 3 1 1

4 unchanged sentences

Net periodic benefit cost* $ 33 — 23 — 1 1

Six Months Ended June 30

Nine Months Ended September 30

Service cost $ 92 9 87 10 2 2

4 unchanged sentences

Net periodic benefit cost* $ 94 — 71 1 3 4

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

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

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

During the nine months ended September 30, 2025, we contributed $ 157 million to our U.S.

pension and other postretirement benefit plans and $ 4 million to our international pension plans.

1 unchanged sentence

pension and other postretirement benefit plans and approximately $ 2 million to our international pension plans during the remainder of 2025.

Cash contributions are included in the “Other” line item of the “Cash Flows From Operating Activities” section of our consolidated statement of cash flows.

Cash contributions are included within the “Other” line item of the “Cash Flows From Operating Activities” section of our consolidated statement of cash flows.

Note 17— Accumulated Other Comprehensive Loss

11 unchanged sentences

Net current period other comprehensive income 15 229 — 244

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

September 30, 2025 $ ( 125 ) ( 33 ) ( 5 ) ( 163 )

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

Other comprehensive income (loss) before reclassifications 1 ( 33 ) — ( 32 )

Other comprehensive income before reclassifications 1 133 — 134

Amounts reclassified from accumulated other comprehensive loss

3 unchanged sentences

Hedging — — — —

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

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

* Included in the computation of net periodic benefit cost.

Net current period other comprehensive income 8 133 — 141

September 30, 2024 $ ( 112 ) ( 24 ) ( 5 ) ( 141 )

* Included within 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 (loss) on dispositions” line item on our consolidated statement of income.

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

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

1 unchanged sentence

Millions of Dollars

Three Months Ended June 30 Six Months Ended June 30

Three Months Ended September 30 Nine Months Ended September 30

2025 2024 2025 2024

Non-cash investing activities

Derecognition of government obligations $ — 1,100 — 1,100

Non-cash financing activities

Derecognition of Discharged Notes — ( 1,100 ) — ( 1,100 )

Reduction in borrowings under Receivables Securitization Facility — — 303 —

4 unchanged sentences

Three Months Ended

June 30 Six Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

3 unchanged sentences

(a) We sold NGL, other petrochemical feedstocks and solvents to Chevron Phillips Chemical Company LLC (CPChem), gas oil and hydrogen feedstocks to Excel Paralubes LLC (Excel Paralubes) and refined petroleum products to several of our equity affiliates in the M&S segment, including OnCue and CF United LLC (CF United).

We also sold certain feedstocks and intermediate products to WRB Refining LP (WRB) and acted as an agent for WRB in supplying crude oil and other feedstocks for a fee.

We also sold certain feedstocks and intermediate products to WRB and acted as an agent for WRB in supplying crude oil and other feedstocks for a fee.

In addition, we charged several of our equity affiliates, including CPChem, for the use of common facilities, such as steam generators, waste and water treaters and warehouse facilities.

26 unchanged sentences

Millions of Dollars

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

Operating Segments

4 unchanged sentences

Total sales and other operating revenues 5,075 — 19,335 22,588 1,610 13 ( 14,106 ) 34,515

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

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

Equity in earnings of affiliates 93 176 31 36 1 — — 337

Net gain (loss) on dispositions ( 8 ) — 3 16 — — — 11

Other income 20 — 1 ( 6 ) 53 48 — 116

17 unchanged sentences

Millions of Dollars

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Operating Segments

25 unchanged sentences

Millions of Dollars

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Operating Segments

25 unchanged sentences

Millions of Dollars

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Operating Segments

28 unchanged sentences

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

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

Interest Income $ — — — — — 34 34

Capital Expenditures and Investments* 347 — 145 26 15 8 541

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Interest Income $ — — — — — 38 38

Capital Expenditures and Investments* 172 — 146 18 12 10 358

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Interest Income $ — — — — — 102 102

Capital Expenditures and Investments* 947 — 469 75 33 27 1,551

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Interest Income $ — — — — — 110 110

4 unchanged sentences

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

As of June 30, 2025

As of September 30, 2025

Investments In and Advances to Affiliates $ 2,204 7,902 1,361 573 15 3 12,058

4 unchanged sentences

Note 21— Income Taxes

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.

Our effective income tax rates for the three and nine months ended September 30, 2025, were 16 % and 19 %, compared to 11 % and 20 % for the corresponding periods of 2024, respectively.

The increase in our effective rate for the three months ended September 30, 2025, was primarily attributable to the impact of foreign operations and state income taxes, partially offset by non-taxable items and tax credits.

The decrease in our effective rate for the nine months ended September 30, 2025, was primarily attributable to the effects of state income taxes.

The effective tax rate for the three months ended September 30, 2025, varied from the U.S.

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

The effective tax rate for the nine months ended September 30, 2025, varied from the U.S.

federal statutory income tax rate primarily due to the impact of foreign operations and non-taxable items.

Note 22— DCP Midstream Class A Segment

17 unchanged sentences

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.

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 close this transaction in the fourth quarter of 2025, subject to 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 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 September 30, 2025, Germany and Austria Marketing has a net carrying value of approximately $ 175 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.

1 unchanged sentence

Assets Held for Sale:

June 30, 2025

September 30, 2025

Cash and cash equivalents $ 105

Accounts and notes receivable 328

Accounts and notes receivable—related parties 7

Inventories 73

16 unchanged sentences

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.

We recognized a before-tax aggregate unrealized gain of $ 15 million and a before-tax aggregate unrealized loss of $ 74 million for the three and nine months ended September 30, 2025, respectively.

These foreign currency forward contracts are presented within the “Net gain on dispositions” line item on our consolidated statement of income and are 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