What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-20 compared with 2025-02-21 · 462 added, 435 removed, 1771 unchanged (34% of the section changed)

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We have audited the accompanying consolidated balance sheets of Phillips 66 (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”).

In our opinion, based on our audits and, for 2023 and 2022, the report of Deloitte & Touche LLP, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S.

In our opinion, based on our audits and, for 2023, the report of Deloitte & Touche LLP, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S.

generally accepted accounting principles.

We did not audit the 2023 and 2022 financial statements of DCP Midstream, LP (DCP LP), a consolidated subsidiary, whose financial statements reflect total assets constituting 14% of the Company’s total assets as of December 31, 2023 and total revenues constituting 4% and 3% of the Company’s revenues and other income for the years ended December 31, 2023 and 2022, respectively.

Those statements were audited by Deloitte & Touche LLP, whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for DCP LP for 2023 and 2022, is based solely on the report of Deloitte & Touche LLP.

We did not audit the 2023 financial statements of DCP Midstream, LP (DCP LP), a consolidated subsidiary, whose financial statements reflect total revenues constituting 4% of the Company’s revenues and other income for the year ended December 31, 2023.

Those financial statements were audited by Deloitte & Touche LLP, whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for DCP LP for 2023, is based solely on the report of Deloitte & Touche LLP.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 20, 2026 expressed an unqualified opinion thereon.

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The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment assessment of WRB Refining LP, an equity method investment

Description of the Matter As discussed in Note 1 to the financial statements, the Company assesses investments in unconsolidated affiliates accounted for using the equity method for impairment when events or changes in circumstances indicate a loss in value that is other than temporary may have occurred.

As discussed in Note 9 to the financial statements, the Company owns a 50% interest in WRB Refining LP (WRB), a joint venture that owns the Wood River and Borger refineries.

The carrying value of the Company’s investment in WRB was $2.3 billion as of December 31, 2024.

WRB’s earnings are subject to variability as they depend on, among other things, market conditions, the utilization of its refineries, cost levels and other factors relevant to its operations.

Accordingly, significant judgment is required in determining whether events or changes in circumstances indicate a loss in value may have occurred that is indicative of a possible impairment.

We determined the Company’s process for evaluating whether an other than temporary impairment of its investment in WRB has occurred is a critical audit matter because of the judgment and assumptions management uses to perform its identification and evaluation of such factors.

WRB Refining LP Acquisition

Description of the Matter As discussed in Note 5 to the financial statements, the Company entered into a definitive agreement to acquire the 50% equity interest in WRB Refining LP it did not already own from subsidiaries of Cenovus Energy Inc.

The transaction closed on October 1, 2025 and was accounted for as a business combination.

As a result of the transaction, the Company recognized $2.8 billion of properties, plants and equipment, which was composed primarily of refining assets.

Auditing management's accounting for the WRB Refining LP acquisition was complex due to the significant estimation required to determine the fair value of the refining assets.

In particular, the fair value estimates for certain refining assets were sensitive to economic obsolescence, which had a significant effect on the fair value estimates.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls for the assessment of potential other than temporary impairments in WRB, which included identifying and evaluating events or changes in circumstances that could indicate a potential other than temporary impairment.

We exercised professional judgment based on our knowledge of the industry and WRB’s business to assess the appropriateness of management’s conclusion that no such events existed or changes in circumstances had occurred as of December 31, 2024.

In our evaluation, among other things, we performed inquiries of management and evaluated WRB’s prior and current operating earnings to assess its ability to sustain an earnings capacity that justifies the Company’s recorded investment in WRB and to assess the Company’s ability to recover its investment in WRB.

In addition, we evaluated potential contrary evidence to management’s conclusion, considering both internally and externally available information, such as demand for WRB’s products, gross margins, costs, refinery utilization, and other operating information, as well as comparable market multiples.

We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company's controls over the valuation of the refining assets related to the acquisition.

For example, we tested controls over management’s review of the valuation models and the underlying assumptions used to develop estimated fair values of these assets.

To test the estimated fair value of the refining assets, our audit procedures included, among others, evaluating the Company’s selection of the valuation methodology, the underlying assumptions used by the Company, and the completeness and accuracy of the underlying data supporting the assumptions and estimates.

We involved our valuation specialists to assist in assessing the appropriateness of the valuation methodology used by the Company, to develop an expected range of values to assess the reasonableness of the Company’s estimates, and to evaluate the effects of economic obsolescence on the fair value estimates.

/s/ Ernst & Young LLP

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Opinion on the Financial Statements

We have audited the consolidated balance sheets of DCP Midstream, LP and subsidiaries (the "Partnership") as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income, changes in equity, and cash flows, for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”) (not presented herein).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Partnership as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have audited the consolidated statements of operations, comprehensive income, changes in equity, and cash flows, for the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”) of DCP Midstream, LP and subsidiaries (the “Partnership”) (not presented herein).

In our opinion, the financial statements present fairly, in all material respects the results of the Partnership’s operations and its cash flows for the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We did not audit the financial statements of Gulf Coast Express Pipeline, LLC, the Partnership’s investment which is accounted for by use of the equity method.

The consolidated financial statements of the Partnership include its equity investment in Gulf Coast Express Pipeline, LLC of $385 million and $408 million as of December 31, 2023 and 2022, and its equity earnings in Gulf Coast Express Pipeline, LLC of $68 million and $67 million for the years ended December 31, 2023 and 2022, respectively.

The consolidated financial statements of the Partnership include its equity earnings in Gulf Coast Express Pipeline, LLC of $68 million for the year ended December 31, 2023.

Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Gulf Coast Express Pipeline, LLC is based solely on the report of the other auditors.

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These financial statements are the responsibility of the Partnership’s management.

Our responsibility is to express an opinion on the Partnership’s financial statements based on our audits.

Our responsibility is to express an opinion on the Partnership’s financial statements based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Partnership in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America.

We conducted our audit in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits and the report of the other auditors provide a reasonable basis for our opinion.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit and the report of the other auditors provide a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

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Net actuarial gain (loss) arising during the period 25 ( 23 ) ( 11 )

Amortization of net actuarial loss, prior service credit and settlements 14 19 90

Amortization of net actuarial loss and settlements 19 14 19

Plans sponsored by equity affiliates 8 ( 19 ) ( 8 )

Divestiture ( 12 ) — —

Income taxes on defined benefit plans ( 13 ) 8 2

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Net gain on dispositions ( 2,984 ) ( 321 ) ( 115 )

Gain related to merger of businesses — — ( 3,013 )

Unrealized investment loss 12 — 38

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Proceeds from asset dispositions 3,520 1,082 392

Advances/loans—related parties — — ( 75 )

Collection of advances/loans—related parties 4 3 662

Other 24 ( 102 ) 35

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Repurchase of noncontrolling interests — — ( 4,067 )

Contributions from noncontrolling interests 132 — —

Other ( 104 ) ( 120 ) ( 97 )

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Net income — — — 7,015 — 224 7,239

Other comprehensive loss — — — — ( 15 ) — ( 15 )

Other comprehensive income — — — — 178 — 178

Dividends paid on common stock — — — ( 1,882 ) — — ( 1,882 )

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Distributions to noncontrolling interests — — — — — ( 163 ) ( 163 )

Acquisition of noncontrolling interest in Phillips 66 Partners LP — ( 901 ) 3,380 — — ( 2,163 ) 316

Merger of DCP Midstream, LLC and Gray Oak Holdings LLC — — — — — 4,622 4,622

Acquisition of noncontrolling interest in DCP Midstream, LP — ( 361 ) — — — ( 3,613 ) ( 3,974 )

Benefit plan activity — 188 — ( 15 ) — — 173

Benefit plan activity and other — 220 — ( 15 ) — 7 212

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

Net income — — — 2,117 — 58 2,175

Other comprehensive income — — — — 178 — 178

Other comprehensive loss — — — — ( 125 ) — ( 125 )

Dividends paid on common stock — — — ( 1,882 ) — — ( 1,882 )

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Distributions to noncontrolling interests — — — — — ( 70 ) ( 70 )

Acquisition of noncontrolling interest in DCP Midstream, LP — ( 361 ) — — — ( 3,613 ) ( 3,974 )

Benefit plan activity and other — 220 — ( 15 ) — 7 212

Benefit plan activity — 138 — ( 14 ) — — 124

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

Net income — — — 4,403 — 125 4,528

Other comprehensive loss — — — — ( 125 ) — ( 125 )

Other comprehensive income — — — — 240 — 240

Dividends paid on common stock — — — ( 1,922 ) — — ( 1,922 )

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Distributions to noncontrolling interests — — — — — ( 164 ) ( 164 )

Contributions from noncontrolling interests — — — — — 132 132

Benefit plan activity — 160 — ( 13 ) — — 147

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Shares issued—share-based compensation 2,468,456 —

Shares issued—acquisition of noncontrolling

interest in Phillips 66 Partners LP — ( 41,825,236 )

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

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Undivided interests in pipelines, natural gas plants and terminals are consolidated on a proportionate basis.

See Note 3—DCP Midstream, LLC and DCP Midstream, LP Mergers, for further discussion about a significant VIE that we began consolidating in August 2022, and Note 30—Phillips 66 Partners LP, for further discussion regarding our merger with Phillips 66 Partners LP (Phillips 66 Partners), a wholly owned subsidiary of Phillips 66.

See Note 3—DCP Midstream, LLC and DCP Midstream, LP Mergers, for further discussion about a significant VIE that we began consolidating in August 2022.

The equity method is used to account for investments in affiliates in which we have the ability to exert significant influence over the affiliates’ operating and financial policies, including VIEs, of which we are not the primary beneficiary.

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See Note 9—Investments, Loans and Long-Term Receivables, for further discussion on our significant unconsolidated VIEs.

Recast Financial Information

Certain prior period financial information has been recast and reclassified to reflect the current year’s presentation.

See Note 29—Segment Disclosures and Related Information and Note 26—Cash Flow Information, for further information.

Use of Estimates

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We have several valuation methods for our various types of inventories and consistently use the following methods for each type of inventory.

Crude oil and petroleum products inventories are valued at the lower of cost or market in the aggregate, primarily on the last-in, first-out (LIFO) basis.

Crude oil and products inventories are valued at the lower of cost or market in the aggregate, primarily on the last-in, first-out (LIFO) basis.

Any necessary lower-of-cost-or-market write-downs at year end are recorded as permanent adjustments to the LIFO cost basis.

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We will recognize liabilities for these obligations in the period when sufficient information becomes available to estimate a date or range of potential retirement dates.

See Note 4—Restructuring, for additional information regarding the change in asset retirement obligation related to our intention to cease operations at our Los Angeles Refinery.

Environmental Costs

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For our contracts that include variable consideration, we utilize the variable consideration allocation exception, whereby the variable consideration is only allocated to the performance obligations that are satisfied during the period.

The related revenue is recognized at a point in time when control passes to the customer, which is when title and the risk of ownership passes to the customer and physical delivery of goods occurs, either immediately or within a fixed delivery schedule that is reasonable and customary in the industry.

The related revenue is recognized at a point in time when control passes to the customer, which is when title and the risk of ownership pass to the customer and physical delivery of goods occurs, either immediately or within a fixed delivery schedule that is reasonable and customary in the industry.

The payment terms with our customers vary based on the product or service provided, but usually are 30 days or less.

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(1) the service period (i.e., the stated period of time required to earn the award);

or (2) the period beginning at the start of the service period and ending when an employee first becomes eligible for retirement, but not less than ten months for shared-based payment awards granted beginning in 2023 and not less than six months for share-based payment awards granted prior to 2023 as those are the minimum periods of time required for awards not to be subject to forfeiture.

or (2) the period beginning at the start of the service period and ending when an employee first becomes eligible for retirement, but not less than ten months as that is the minimum period of time required for awards not to be subject to forfeiture.

Our equity-classified programs generally provide accelerated vesting (i.e., a waiver of the remaining period of service required to earn an award) for awards held by employees at the time they become eligible for retirement (at age 55 with 5 years of service).

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Interest related to unrecognized income tax benefits is reflected in the “Interest and debt expense” line item, and penalties are reported in the “Operating expenses” or “Selling, general and administrative expenses” line items on our consolidated statement of income.

We have elected to treat the global intangible low-taxed income (GILTI) tax as a period expense.

Business Combinations

In accounting for a business combination, assets acquired, liabilities assumed and noncontrolling interests are recorded based on estimated fair values as of the date of acquisition.

The excess or shortfall of the purchase price when compared to the fair value of the net tangible and identifiable intangible assets acquired, if any, is recorded as goodwill or a bargain purchase gain, respectively.

We use available information to make these fair value determinations and engage third-party specialists in the valuation process as necessary.

The fair values of assets acquired, liabilities assumed and noncontrolling interests as of the acquisition date are often estimated using a combination of approaches, including the income approach, which requires us to project future cash flows and apply an appropriate discount rate;

the cost approach, which requires estimates of replacement costs and depreciation and obsolescence estimates;

and the market approach which uses market data and adjusts for entity specific differences.

Subsequent to the acquisition date, and not later than one year from the acquisition date, we will record any material adjustments to the initial estimate based on new information obtained that would have existed as of the date of the acquisition.

Any adjustment that arises from information obtained that did not exist as of the date of the acquisition will be recorded in the period of the adjustment.

Acquisition-related costs are expensed as incurred in connection with each business combination.

Note 2—Changes in Accounting Principles

Effective December 31, 2024, we adopted ASU 2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.” This ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

Effective January 1, 2025, we adopted ASU 2023-09, “Income Taxes (Topic 740) – Improvements to Income Tax Disclosures,” which enhances the transparency, effectiveness, and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid.

The adoption of this pronouncement did not have an impact on our consolidated financial statements;

however, it resulted in additional disclosures within Note 29—Segment Disclosures and Related Information.

however, we applied the new disclosure requirements retrospectively, so all prior period disclosures have been adjusted to reflect the new disclosure requirements.

See additional and updated disclosures within Note 25—Income Taxes and Note 27—Cash Flow Information.

Note 3— DCP Midstream, LLC and DCP Midstream, LP Mergers

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As a result of the DCP Midstream Merger, we derecognized Enbridge’s noncontrolling interest in Gray Oak Holdings.

We accounted for our consolidation of DCP Midstream Class A Segment, DCP Sand Hills and DCP Southern Hills as a business combination using the acquisition method of accounting.

See Note 5—Business Combinations, for additional information regarding our accounting for this transaction.

DCP Midstream, LP Merger (DCP LP Merger)

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On October 16, 2023, DCP LP redeemed its Series C preferred units at the aggregated liquidation preference of $ 110 million, which approximated the book value of the preferred units.

On June 15, 2023, DCP LP redeemed its Series B preferred units at the aggregated liquidation preference of $ 161 million, which approximated the book value of the preferred units.

In December 2022, DCP LP redeemed its Series A preferred units with an aggregate liquidation preference of $ 500 million, which approximated the book value of the preferred units.

These preferred unit redemptions decreased the “Noncontrolling interests” balance on our consolidated balance sheet from December 31, 2022.

Trading and Reporting Status

In late 2023, DCP LP’s common units, Series B preferred units and Series C preferred units were delisted and deregistered from the New York Stock Exchange.

In addition, DCP LP has suspended its reporting obligations to the Securities and Exchange Commission under Sections 13 and 15(d) of the Exchange Act.

On June 15, 2023, DCP LP redeemed its Series B preferred units at the aggregated liquidation preference of $ 161 million, which approximated book value of the preferred units.

Distributions

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Los Angeles Refinery

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

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

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

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

As of December 31, 2024, the $ 1,248 million carrying value of the net PP&E and intangible assets will be depreciated through December 2025 to the estimated salvage value of $ 241 million.

Total depreciation related to the Los Angeles Refinery assets for the year ended December 31, 2024, was $ 350 million, including $ 253 million of accelerated depreciation.

This accelerated depreciation is included within the “Depreciation and amortization” line item on our consolidated statement of income for the year ended December 31, 2024.

• We increased our asset retirement obligations (AROs) to $ 231 million as of December 31, 2024, mainly reflecting our change in the estimated timing of spending for asbestos abatement and decommissioning of assets at the Los Angeles Refinery.

The asset retirement obligations recorded require significant judgment and are subject to changes in the underlying assumptions.

Depreciation of the related capitalized asset retirement costs also will be recorded through December 2025, and the amount for the year ended December 31, 2024, is reflected in the accelerated depreciation discussed above.

• We recorded $ 44 million of severance costs, which are included in the “Operating expenses” line item on our consolidated statement of income for the year ended December 31, 2024.

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 fourth quarter of 2025, consistent with our plan, we began idling the facility and ceased fuel production.

We have submitted redevelopment project applications for the facilities, initiating the review process and allowing us to continue pursuing the redevelopment of the property for future uses.

As a result of the decision to cease operations and begin idling the facilities, the following impacts were recorded in our Refining segment:

• In 2024, 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.

As of December 31, 2025, the carrying values of the net PP&E and intangible assets were depreciated to the estimated salvage value of $ 241 million.

Total depreciation related to the Los Angeles Refinery assets for the years ended December 31, 2025 and December 31, 2024, was $ 1,062 million and $ 350 million, including $ 964 million and $ 253 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 years ended December 31, 2025 and 2024.

• Our asset retirement obligations (AROs) at the Los Angeles Refinery were $ 253 million as of December 31, 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 was also recorded through the fourth quarter of 2025, and the amounts for the years ended December 31, 2025 and 2024, are reflected in the accelerated depreciation discussed above.

• We accrued $ 69 million in environmental expenses related to future groundwater mitigation plans at the Los Angeles Refinery.

Additionally, we recorded a $ 35 million write down of material and supplies inventory.

These expenses are included within the “Operating expenses” line item on our consolidated statement of income for the year ended December 31, 2025.

• We recorded $ 44 million of severance costs, which are included within the “Operating expenses” line item on our consolidated statement of income for the year ended December 31, 2024.

In April 2022, we began a multi-year business transformation focused on enterprise-wide opportunities to improve our cost structure.

For the years ended December 31, 2023 and 2022, we recorded restructuring costs totaling $ 177 million and $ 160 million, respectively, primarily related to consulting fees and severance costs.

Restructuring costs for the year ended December 31, 2022, also included an impairment related to assets held for sale.

These costs are primarily recorded in the “Selling, general and administrative expenses” and “Impairments” line items on our consolidated statement of income and are reported in Corporate and Other.

In addition, for the years ended December 31, 2023 and 2022, we recorded restructuring costs of $ 38 million and $ 18 million, respectively, associated with the integration of DCP Midstream Class A Segment primarily related to severance and contract exit costs.

For the year ended December 31, 2023, we recorded restructuring costs totaling $ 177 million primarily related to consulting fees and severance costs.

These costs are primarily recorded in the “Selling, general and administrative expenses” line item on our consolidated statement of income and are reported in Corporate and Other.

In addition, for the year ended December 31, 2023, we recorded restructuring costs of $ 38 million associated with the integration of DCP Midstream Class A Segment primarily related to severance and contract exit costs.

These costs are primarily recorded in the “Selling, general and administrative expenses” line item on our consolidated statement of income and are reported in our Midstream segment.

Note 5— Business Combinations

Refining Acquisition

On October 1, 2025, we acquired the remaining 50 % equity interest in WRB Refining LP (WRB) from subsidiaries of Cenovus Energy Inc.

(Cenovus) for total cash consideration of $ 1.3 billion, subject to post-closing adjustments.

This acquisition will enable full integration with our broader value chain and expand our position in the Central Corridor region.

The components of the fair value of the WRB acquisition consideration are:

Millions of Dollars

Cash paid to Cenovus $ 1,304

Fair value of previously held equity interest in WRB 1,304

Settlement of relationships with Phillips 66 and WRB 793

Total acquisition consideration $ 3,401

The acquisition date fair value of the previously held equity interest in WRB was determined in conjunction with the impairment recorded in the third quarter of 2025.

See Note 9—Investments, Loans and Long-Term Receivables for additional information on the impairment.

See Note 20—Fair Value Measurements for additional information on the determination of fair value.

We accounted for this acquisition as a business combination and provisionally recorded $ 2,767 million of PP&E;

$ 1,200 million of inventory;

$ 54 million of other long-term assets;

$ 9 million of intangibles;

$ 450 million of short-term debt assumed at acquisition and also fully repaid on October 1, 2025;

$ 119 million of net working capital deficit (excluding inventory and short-term debt);

$ 34 million of AROs and accrued environmental costs;

$ 21 million of other long-term liabilities;

and $ 5 million of deferred income tax liabilities.

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

Midstream Acquisitions

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

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

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

This acquisition further enhances our wellhead-to-market strategy.

For this acquisition, we provisionally recorded $ 2,224 million of PP&E;

$ 4 million of other assets;

$ 4 million of net working capital (excluding cash);

$ 33 million of other long-term liabilities;

and $ 4 million of AROs.

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

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

This acquisition expands our natural gas gathering and processing operations in the Permian Basin.

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

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

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

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and $ 6 million of finance lease liabilities.

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

DCP Midstream Merger

On August 17, 2022, we realigned our economic interest in, and governance rights over, DCP Midstream and Gray Oak Holdings through the DCP Midstream Merger, with DCP Midstream as the surviving entity.

As part of the DCP Midstream Merger, we transferred a 35.75 % indirect economic interest in Gray Oak Pipeline and contributed $ 404 million of cash to DCP Midstream, which was then paid to Enbridge, in return for a 15.05 % incremental indirect economic ownership interest in DCP LP.

As noted above, the additional governance rights we were granted as part of this transaction resulted in us consolidating DCP Midstream Class A Segment, as well as DCP Sand Hills and DCP Southern Hills.

Given the nature of this transaction, we have accounted for the consolidation of these entities using the acquisition method of accounting.

The components of the fair value of the DCP Midstream Merger consideration are:

Millions of Dollars

Cash contributed $ 404

Fair value of transferred equity interest 634

Fair value of previously held equity interests 3,853

Total merger consideration $ 4,891

The aggregate purchase consideration noted above was allocated to the assets acquired and liabilities assumed of the entities consolidated based upon their estimated fair values as of the DCP Midstream Merger on August 17, 2022.

We finalized the valuation of the assets acquired and liabilities assumed during the three months ended September 30, 2023, prior to the end of the one-year measurement period on August 16, 2023.

The following table shows the purchase price allocation as of the date of the DCP Midstream Merger, and cumulative adjustments we made during the one-year measurement period that ended on August 16, 2023:

Millions of Dollars

Fair value of assets acquired:

As Originally Reported Adjustments As Adjusted

Cash and cash equivalents $ 98 — 98

Accounts and notes receivable 1,003 — 1,003

Inventories 74 238 312

Prepaid expenses and other current assets 439 13 452

Investments and long-term receivables 2,192 ( 125 ) 2,067

Properties, plants and equipment 12,837 193 13,030

Intangibles 36 ( 36 ) —

Other assets 343 ( 158 ) 185

Total assets acquired 17,022 125 17,147

Fair value of liabilities assumed:

Accounts payable 912 3 915

Short-term debt 625 ( 2 ) 623

Accrued income and other taxes 107 13 120

Employee benefit obligation—current 50 22 72

Other accruals 497 ( 6 ) 491

Long-term debt 4,541 40 4,581

Asset retirement obligations and accrued environmental costs 168 16 184

Deferred income taxes 40 14 54

Employee benefit obligations 54 — 54

Other liabilities and deferred credits 227 36 263

Total liabilities assumed 7,221 136 7,357

Fair value of net assets 9,801 ( 11 ) 9,790

Fair value of noncontrolling interests 4,910 ( 11 ) 4,899

Total merger consideration $ 4,891 — 4,891

The adjustments reflected in the table above include reclassification adjustments we made to the purchase price allocation to conform with our historical presentation and adjustments we made to the estimated fair value of certain assets acquired and liabilities assumed during the measurement period.

The adjustments to our purchase price allocation recorded during the measurement period were not material.

See Note 19—Fair Value Measurements, for additional information on the determination of the fair value of the DCP Midstream Merger.

In connection with the DCP Midstream Merger, we recognized before-tax gains totaling $ 2,831 million from remeasuring our previously held equity investments in DCP Midstream, DCP Sand Hills and DCP Southern Hills to their fair values and a before tax gain of $ 182 million related to the transfer of a 35.75 % indirect economic interest in Gray Oak Pipeline to our co-venturer.

These before-tax gains are included in the “Other income” line item in our consolidated statement of income for the year ended December 31, 2022, and are reported in the Midstream segment.

See Note 19—Fair Value Measurements, for additional information on the determination of the fair value of DCP Midstream Class A Segment, DCP Sand Hills and DCP Southern Hills.

The following “Sales and other operating revenues” and “Net Income Attributable to Phillips 66” of DCP Midstream Class A Segment, DCP Sand Hills and DCP Southern Hills were included in our consolidated statement of income from August 18, 2022, forward, for the year ended December 31, 2022.

Millions of Dollars

Sales and other operating revenues $ 4,531

Net Income Attributable to Phillips 66 216

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presents consolidated results for the years ending December 31, 2022 and 2021, as if the DCP Midstream Merger occurred on January 1, 2021.

The unaudited pro forma information includes adjustments based on available information, and we believe the estimates and assumptions used are reasonable, and that the significant effects of the transactions are properly reflected in the unaudited pro forma information.

An aggregate before-tax gain of $ 2,831 million was included in the pro forma financial information for the year ended December 31, 2021, which is related to the remeasurement of the previously held equity investments in DCP Midstream, DCP Sand Hills and DCP Southern Hills to their fair values in connection with the DCP Midstream Merger.

Adjustments related to the economic interest change in our equity investment in Gray Oak Pipeline were excluded from the pro forma financial information.

The unaudited pro forma financial information presented is for comparative purposes only and does not give effect to any potential synergies that could be achieved and is not necessarily indicative of the results of future operations.

Year Ended December 31

Sales and other operating revenues (millions)

$ 177,127 119,027

Net Income Attributable to Phillips 66 (millions)

Net Income Attributable to Phillips 66 per share—basic (dollars)

Net Income Attributable to Phillips 66 per share—diluted (dollars)

Pending Midstream Acquisition

On January 6, 2025, we entered into a definitive agreement to acquire all issued and outstanding equity interests in each of EPIC Y-Grade GP, LLC (Y-Grade GP) and EPIC Y-Grade, LP (Y-Grade LP, and, together with Y-Grade GP and their respective subsidiaries, EPIC Y-Grade), which own various long haul natural gas liquids pipelines, fractionation facilities and distribution systems, for cash consideration of $ 2.2 billion, subject to certain closing adjustments.

The closing date of this transaction is dependent on regulatory approval and completion of other customary closing conditions.

Marketing and Specialties Acquisitions

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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 $ 17 million of amortizable intangible assets, primarily customer relationships;

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

$ 31 million of net working capital;

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.

On August 1, 2023, we acquired a marketing business on the U.S.

West Coast for total consideration of $ 272 million.

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

We finalized the valuation of the assets acquired and the liabilities assumed during the three months ended June 30, 2024, prior to the end of the one-year measurement period on July 31, 2024.

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;

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$ 31 million of net working capital;

$ 67 million of goodwill;

and $ 45 million of finance lease liabilities.

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Disaggregated Revenues

The following tables present our disaggregated sales and other operating revenues:

The following tables present our disaggregated sales and other operating revenues for the years ended December 31:

Millions of Dollars

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At December 31, 2025, the remaining performance obligations related to these minimum volume commitment contracts amounted to $ 854 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 2031 with a weighted average remaining life of three years as of December 31, 2024.

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 four years as of December 31, 2025.

Note 7— Credit Losses

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Based on an aging analysis at December 31, 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.

See Note 15—Debt, Note 16—Guarantees, and Note 17—Contingencies and Commitments, for more information on these off-balance sheet exposures.

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

See Note 15—Debt, Note 17—Guarantees, and Note 18—Contingencies and Commitments for additional information on these off-balance sheet exposures.

Note 8— Inventories

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Inventories valued on the LIFO basis totaled $ 4,461 million and $ 3,443 million at December 31, 2025 and 2024, respectively.

The increase in inventories in 2025 was primarily related to the consolidation of assets following our acquisition of the remaining ownership interest of WRB.

See Note 5—Business Combinations for additional information.

The estimated excess of current replacement cost over LIFO cost of inventories amounted to approximately $ 3.6 billion and $ 4.9 billion at December 31, 2025 and 2024, respectively.

During each of the three years ended December 31, 2025, certain volume reductions in inventory caused liquidations of LIFO inventory values.

For the year ended December 31, 2025, LIFO inventory liquidations increased net income by $ 13 million.

For the year ended December 31, 2024, LIFO inventory liquidations decreased net income by $ 10 million.

For the years ended December 31, 2023 and 2022, LIFO inventory liquidations increased net income by $ 94 million, and $ 75 million, respectively.

For the year ended December 31, 2023, LIFO inventory liquidations increased net income by $ 94 million.

Note 9— Investments, Loans and Long-Term Receivables

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Dakota Access, LLC 25.00 748 777

JET Management Holding GmbH & Co.

Front Range Pipeline LLC 33.33 436 459

Rockies Express Pipeline LLC **

CF United LLC † 47.09 298 284

47.09 284 350

OnCue Holdings, LLC ****

X 50.00 185 166

* See Note 15—Debt, for additional information regarding the non-cash distribution of WRB Refining LP’s (WRB) Advance Term Loan, which reduced our investment balance by $ 290 million.

** Sold as of June 14, 2024.

See discussion in Investment Dispositions section below.

OnCue Holdings, LLC †† X 50.00 211 185

* On October 1, 2025, we acquired the remaining 50 % equity interest in WRB from Cenovus and began consolidating the financial results of WRB Refining LP.

See Note 5—Business Combinations for additional information.

** Sold as of January 30, 2025.

See further discussion in “Dispositions” section below.

*** On December 1, 2025, we divested 65 % of our interest in Germany and Austria retail marketing business.

We retained a 35 % non-operating equity interest in a new entity, JET Management Holding GmbH & Co.

KG (JET Management Holding).

See further discussion in “Dispositions” section below.

† On January 1, 2024, CF United LLC (CF United) ceased to be a VIE following the completion of the acquisition of another joint venture in which we had an ownership interest.

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WRB Refining LP *

$ — ( 1,526 )

Gulf Coast Express Pipeline LLC **

Front Range Pipeline LLC 264 280

Rockies Express Pipeline LLC *

* Sold as of June 14, 2024.

* On October 1, 2025, we acquired the remaining 50 % equity interest in WRB from Cenovus and began consolidating the financial results of WRB Refining LP.

See Note 5—Business Combinations for additional information.

** Sold as of January 30, 2025.

See further discussion in “Investment Dispositions” section below.

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In 2020, the trial court presiding over litigation brought by the Standing Rock Sioux Tribe (the Tribe) ordered the U.S.

Army Corps of Engineers (USACE) to prepare an Environmental Impact Statement (EIS) addressing an easement under Lake Oahe in North Dakota.

The trial court later vacated the easement.

Although the easement is vacated, the USACE has no plans to stop pipeline operations while it proceeds with the EIS, and the Tribe’s request for a shutdown was denied in May 2021.

In June 2021, the trial court dismissed the litigation entirely.

Once the EIS is completed, new litigation or challenges may be filed.

In February 2022, the U.S.

Supreme Court (the Supreme Court) denied Dakota Access’ writ of certiorari requesting the Supreme Court to review the trial court’s decision to order the EIS and vacate the easement.

Therefore, the requirement to prepare the EIS stood.

Also in February 2022, the Tribe withdrew as a cooperating agency, causing the USACE to halt the EIS process while the USACE engaged with the Tribe on their reasons for withdrawing.

The draft EIS process resumed in August 2022, and in September 2023, the USACE published its draft EIS for public comment.

The USACE identified five potential outcomes but did not indicate which one it preferred.

The options comprise two “no action” alternatives where the USACE would deny an easement to Dakota Access and require it to shut down the pipeline and either remove the pipe from under Lake Oahe or allow the pipeline to be abandoned-in-place under the lake.

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.

The public comment period concluded on December 13, 2023.

The USACE plans to review the comments and issue its final EIS in early 2026.

The Record of Decision will follow within 30 to 60 days after the issuance of the final EIS.

The final EIS must be completed before the USACE can reauthorize the easement for the pipeline.

If reauthorization occurs, new litigation challenging the reauthorization may be filed.

In October 2024, the Tribe filed another lawsuit against the USACE in federal district court in Washington, D.C., again challenging USACE’s allowance of pipeline operations while the EIS process proceeds.

In this lawsuit, the Tribe purports to introduce new evidence regarding the pipeline’s proximity to a reservoir and attempts to relitigate arguments about the need for injunctive relief to support its position that the Supreme Court should halt pipeline operations.

A consortium of 13 states has joined Dakota Access as intervenors.

The consortium argues that the pipeline reduces pollution compared to other modes of transportation and that Dakota Access is integral to the health of regional energy and agriculture markets.

The Tribe’s prior request for a shutdown was denied in May 2021.

This latest lawsuit seeking a shutdown does not change the current deadline for the issuance of the final EIS.

Army Corps of Engineers (USACE) to prepare an Environmental Impact Statement (EIS) addressing environmental impacts from an easement allowing the passage of the Dakota Access Pipeline (DAPL) under Lake Oahe in North Dakota.

Later in 2020, the trial court vacated the easement, but operations have been allowed to continue while the USACE proceeds with the EIS as ordered.

The Tribe’s requests for a shutdown have been denied.

Most recently, in March 2025, the trial court dismissed a second lawsuit filed by the Tribe, again challenging USACE’s allowance of pipeline operations while the EIS process proceeds.

The Tribe’s lawsuit was premature, and the trial court held that it cannot be refiled until after a final EIS is issued.

In December 2025, the USACE published its final EIS, completing its analysis of alternatives.

The final EIS evaluates five alternatives:

two no-action alternatives (denial with restoration or abandonment) and three action alternatives, with one marked as USACE’s preferred alternative, that would grant the easement under varying conditions.

The preferred alternative would grant the easement subject to the same conditions as the 2017 easement but would authorize an increased throughput volume of 1.1 million barrels per day (bpd), up from the previous 570,000 bpd under the original authorization.

The remaining action alternatives would impose either additional operational conditions or require an alternate pipeline route, both of which may entail substantial implementation costs and could have a material impact on our financial statements.

We await a Record of Decision (ROD), which will provide a definitive statement of the selected alternative and any related conditions.

The Standing Rock Sioux Tribe and affiliated parties may file a new lawsuit in Washington, D.C., challenging the ROD shortly after it is issued.

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

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At December 31, 2025 and 2024, the aggregate book value of our investments in Dakota Access and ETCO was $ 846 million and $ 883 million, respectively.

Investment Dispositions

WRB Refining LP Impairment

In the third quarter of 2025, we identified impairment indicators related to our equity method investment in WRB, 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 then existing 50 % equity interest in 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 in our Refining segment to reduce the carrying value of our then 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.

As a result of the acquisition, effective October 1, 2025, we began consolidating the financial results of WRB.

See Note 5—Business Combinations for additional information regarding our acquisition of WRB and Note 20—Fair Value Measurements for additional information on the determination of fair value used to record these impairments.

On December 1, 2025, we divested 65 % of our interest in Germany and Austria retail marketing business (Germany and Austria Marketing) for cash proceeds of approximately $ 1.7 billion ( 1.4 billion Euros) and retained a 35 % non-operating equity interest in the newly formed entity, JET Management Holding.

We also settled the foreign currency forward contracts entered into in May 2025, in connection with the asset sale, 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 gain of $ 1.9 billion from these transactions, which is presented within the “Net gain on dispositions” line item on our consolidated statement of income for the year ended December 31, 2025, and is reported in our M&S segment.

The gain comprised of the following components:

Millions of Dollars

Cash proceeds received $ 1,664

Fair value of 35 % retained interest in JET Management Holding

Reclassification from accumulated other comprehensive income 49

Carrying value of assets net of liabilities sold (including cash)* ( 320 )

Goodwill allocated ( 141 )

Foreign currency forward contract loss ( 53 )

Liabilities incurred in conjunction with the sale ( 40 )

Gain on sale of Germany and Austria Marketing $ 1,903

* Includes trade name intangible assets associated with Germany and Austria Marketing.

See Note 11—Goodwill and Intangibles for additional information on the allocation of goodwill and trade name intangible assets.

See Note 20—Fair Value Measurements for additional information on the determination of fair value of the retained 35 % equity interest.

See Note 26—Accumulated Other Comprehensive Loss for additional information on the reclassification from accumulated other comprehensive loss.

As of December 1, 2025, following the divestitures, transactions with JET Management Holding will be classified and disclosed as related party transactions.

See Note 29—Related Party Transactions for additional information.

On January 31, 2025, we sold our 49 % ownership interest in Coop Mineraloel AG (Coop) and settled the foreign currency forward contracts entered into in connection with the asset sale.

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, which is included within the “Net gain on dispositions” line item on our consolidated statement of income for the year ended December 31, 2025, and is reported in our M&S segment.

The equity investment balance was $ 164 million as of December 31, 2024.

On January 30, 2025, DCP Midstream, 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 within the “Net gain on dispositions” line item on our consolidated statement of income for the year ended December 31, 2025, and is reported in our Midstream segment.

The equity investment balance was $ 776 million as of December 31, 2024.

On December 10, 2024, we sold our equity interests in certain pipeline and terminaling assets in North Dakota for cash proceeds of approximately $ 143 million and recorded an immaterial before-tax loss on the sale.

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On June 14, 2024, we sold our 25 % ownership interest in Rockies Express Pipeline LLC for cash proceeds of $ 685 million and recognized a before-tax gain of $ 238 million, which is included in the “Net gain on dispositions” line item on our consolidated statement of income for the year ended December 31, 2024, and is reported in the Midstream segment.

Subsequent Investment Dispositions

On January 30, 2025, we sold our 25 % ownership interest in Gulf Coast Express Pipeline LLC for cash proceeds of $ 853 million.

The equity investment balance was $ 776 million as of December 31, 2024.

On January 31, 2025, we sold our 49 % ownership interest in Coop Mineraloel AG (Coop).

We received cash proceeds of 1.06 billion Swiss francs, consisting of a sales price of approximately 977 million Swiss francs and a final dividend relating to financial year 2024 of 83 million Swiss francs from Coop that was paid on January 30, 2025.

We also settled the foreign currency forward contracts entered into in connection with the asset sale, in which we sold 1.06 billion Swiss francs in exchange for $ 1.24 billion U.S.

We recognized a before-tax unrealized gain of $ 67 million from the foreign currency forward contracts in the “Net gain on dispositions” line item on our consolidated income statement for the year ended December 31, 2024, which is reported in our M&S segment.

The equity investment balance was $ 164 million as of December 31, 2024.

Related Party Loans

We and our co-venturer have from time to time provided member loans to WRB.

At December 31, 2024 and 2023, no member loans were outstanding.

Equity Affiliate Distributions

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Summarized Equity Affiliate Financial Information

Summarized 100% financial information for all affiliated companies accounted for under the equity method, on a combined basis, as of and for the year ended December 31 was:

Summarized 100% financial information for all affiliated companies accounted for under the equity method, on a combined basis, as of and for the years ended December 31 was:

Millions of Dollars

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Noncontrolling interests — 2 2

Includes results from our equity method investment in WRB through September 30, 2025, and for the years ended December 31, 2024 and 2023.

On October 1, 2025, we acquired the remaining 50 % equity interest in WRB from Cenovus and began consolidating the financial results of WRB Refining LP.

See Note 5—Business Combinations for additional information

Note 10— Properties, Plants and Equipment

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$ 61,791 22,694 39,097 55,956 20,692 35,264

See Note 4—Restructuring for information regarding our intention to cease operations at our Los Angeles Refinery.

See Note 5—Business Combinations and Note 19—Fair Value Measurements, for additional information on the DCP Midstream Merger, accounting treatment and the associated fair value measurements.

See Note 12—Impairments, for information regarding PP&E impairments.

See Note 4—Restructuring, for information regarding the cessation of fuel production and idling of the Los Angeles Refinery.

See Note 5—Business Combinations and Note 20—Fair Value Measurements for additional information regarding our acquisitions in the Midstream, Refining and Marketing and Specialties segments.

See Note 9—Investments, Loans and Long-Term Receivables for additional information regarding the partial sale of Germany and Austria Marketing in the M&S segment.

See Note 12—Impairments, for information regarding PP&E impairments the Refining and Midstream segments.

On August 30, 2024, we sold certain Midstream gathering and processing assets in Texas for cash proceeds of $ 41 million and recognized a before-tax loss of $ 9 million, which is included in the “Net gain on dispositions” line item on our consolidated statement of income for the year ended December 31, 2024.

In the first quarter of 2024, we transferred $ 1 billion in gross PP&E and $ 656 million of accumulated depreciation and amortization from our Refining segment to our Renewable Fuels segment in connection with the conversion of the San Francisco Refinery to the Rodeo Complex and the change in composition of our operating segments recast in the second quarter of 2024.

See Note 29—Segment Disclosures and Related Information, for information regarding changes to our operating segments.

Note 11— Goodwill and Intangibles

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Balance at December 31, 2024 648 927 1,575

Goodwill assigned to acquisitions 22 3 25

Adjustments — ( 1 ) ( 1 )

Goodwill assigned to divestiture — ( 141 ) ( 141 )

Balance at December 31, 2025 $ 648 785 1,433

On July 1, 2024, we acquired Pinnacle Midstream in our Midstream segment and recognized goodwill of $ 21 million associated with this acquisition.

In August 2023, we acquired a marketing business on the U.S.

West Coast in our M&S segment and recognized goodwill of $ 67 million associated with this acquisition.

On December 1, 2025, we divested 65 % of our interest in Germany and Austria Marketing, and derecognized $ 141 million goodwill in connection with the disposition.

The $ 141 million goodwill allocated to Germany and Austria Marketing is based on the relative fair value of Germany and Austria Marketing compared to the fair value of the M&S reporting unit.

See Note 9—Investments, Loans and Long-Term Receivables for additional information on the disposition.

On July 1, 2024, we acquired Dos Picos in our Midstream segment and recognized goodwill of $ 21 million associated with this acquisition.

Refer to Note 5—Business Combinations for additional information.

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Refinery air and operating permits 117 109

During the year ended December 31, 2025, our trade names and trademarks intangible balances decreased $ 93 million, primarily due to the derecognition of a trade name in connection with the partial sale of Germany and Austria Marketing.

See Note 9—Investments, Loans and Long-Term Receivables for additional information on the disposition.

Intangible Assets with Finite Useful Lives

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The amortized intangible assets are primarily related to customer relationships.

On July 1, 2024, we acquired Dos Picos in our Midstream segment and recorded $ 256 million in amortizable intangible assets, which have a weighted-average amortization period of 20 years.

Associated with the 2024 acquisition and final valuation of a marketing business on the U.S.

West Coast, in our M&S segment, we recorded $ 20 million in amortizable intangible assets.

See Note 5—Business Combinations for additional information.

For the years ended December 31, 2025, 2024 and 2023, amortization expense was $ 138 million, $ 53 million and $ 33 million, respectively.

Expected expenses beyond 2025 are less than $ 50 million per year.

The amortization expenses are expected to be $ 130 million in 2025, which is primarily related to our plan to cease operations at our Los Angeles Refinery.

The book value of the amortized intangible assets, which were previously considered indefinite-lived, associated with our Los Angeles Refinery was $ 80 million at December 31, 2024.

Refer to Note 4—Restructuring, for additional information regarding our plan to cease operations at our Los Angeles Refinery.

On July 1, 2024, we acquired Pinnacle Midstream in our Midstream segment and recorded additions of $ 256 million in amortizable intangible assets, which have a weighted-average amortization period of 20 years.

Also during 2024, we recorded additions of $ 17 million in amortizable intangible assets associated with the acquisition of a marketing business on the U.S.

West Coast in our M&S segment.

In August 2023, we acquired a marketing business on the U.S.

West Coast in our M&S segment and recorded additions of $ 146 million in amortizable intangible assets.

The increases in amortization expense for the years ended December 31, 2025 and 2024 are primarily due to the accelerated amortization resulting from the cessation of fuel production and idling of our Los Angeles Refinery.

See Note 4—Restructuring for additional information.

Expected amortization expenses beyond 2026 are less than $ 50 million per year.

Note 12— Impairments

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Total impairments $ 1,060 456 24

For the year ended December 31, 2025, we recorded before-tax impairments totaling $ 1.1 billion, which included $ 955 million recorded in our Refining segment and $ 79 million recorded in our Midstream segment.

Refining segment impairments included a $ 948 million before-tax impairment related to our equity method investment in WRB.

See Note 9—Investments, Loans and Long-Term Receivables for additional information.

The Midstream segment included a $ 79 million before-tax impairment related to an equity investment in an NGL pipeline in Texas.

For the year ended December 31, 2024, we recorded before-tax impairments totaling $ 456 million, which included $ 346 million recorded in our Midstream segment and $ 106 million recorded in our Refining segment.

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Long-term asset retirement obligations and accrued environmental costs $ 1,022 1,129

* Classified as a current liability on the consolidated balance sheet, under the caption “Other accruals.”

* Classified as a current liability, which is presented within the “Other accruals” line item on our consolidated balance sheet.

Asset Retirement Obligations

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decommissioning, removal or dismantlement of certain assets at refineries that have ceased or will cease operations;

decommissioning, removal or dismantlement of certain midstream pipelines and processing facilities;

and dismantlement or removal of assets at certain leased international marketing sites.

and decommissioning, removal or dismantlement of certain midstream pipelines and processing facilities.

Asset retirement obligations related to dismantlement or removal of assets at certain leased international marketing sites were derecognized as of December 31, 2025, following the partial sale of Germany and Austria Marketing.

Most of our asset retirement obligations are not expected to be paid until many years in the future and are expected to be funded from general company resources at the time of removal.

Our overall asset retirement obligation changed as follows during the years ended December 31:

Our overall asset retirement obligations changed as follows during the years ended December 31:

Millions of Dollars

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Balance at December 31 $ 721 771

During the year ended December 31, 2024, our asset retirement balance increased $ 234 million.

This increase was primarily due to new obligations of $ 205 million associated with the expected cessation of operations at the Los Angeles Refinery in the fourth quarter of 2025.

See Note 4—Restructuring, for additional information.

During the year ended December 31, 2025, our asset retirement obligations balance decreased $ 50 million.

This decrease was primarily due to the derecognition of obligations as a result of the partial sale of Germany and Austria Marketing, partially offset by increased estimates in existing obligations of $ 81 million, primarily due to the cessation of fuel production and idling of the Los Angeles Refinery, and new obligations of $ 42 million, primarily from the WRB acquisition.

See Note 4—Restructuring for additional information on the cessation of fuel production and idling of the Los Angeles Refinery;

See Note 5—Business Combinations for additional information on the WRB acquisition;

See Note 9—Investments, Loans and Long-Term Receivables for additional information regarding the partial sale of Germany and Austria Marketing.

Accrued Environmental Costs

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100 — — — 100

5.375 % Senior Notes due July 2025

— — — 525 525

1.300 % Senior Notes due February 2026

500 — — — 500

3.550 % Senior Notes due October 2026

46 unchanged sentences

— 600 — — 600

Commercial paper due January 2025 at 4.695 % at year-end 2024

5.875 % Series A Junior Subordinated Notes due March 2056

— 1,000 — — 1,000

Uncommitted Facility due July 2025 at 5.300 % at year-end 2024

6.200 % Series B Junior Subordinated Notes due March 2056

— 1,000 — — 1,000

Receivables Securitization Facility due September 2025 at 5.182 % at year-end 2024

Commercial paper due January 2026 at 3.952 % at year-end 2025

200 — — — 200

Floating Rate Term Loan due June 2026 at

5.445 % at year-end 2024

Receivables Securitization Facility due September 2026 at 4.538 % at year-end 2025

200 — — — 200

Other 1 — — — 1

Debt at face value 7,350 9,052 165 2,950 19,517

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3.605 % Senior Notes due February 2025

$ 800 — — — 800

2.450 % Senior Notes due December 2024

— 277 23 — 300

3.605 % Senior Notes due February 2025

— 441 59 — 500

3.850 % Senior Notes due April 2025

650 — — — 650

5.375 % Senior Notes due July 2025

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850 — — — 850

5.250 % Senior Notes due June 2031

— 1,200 — — 1,200

3.250 % Senior Notes due February 2032

4 unchanged sentences

1,000 — — — 1,000

4.950 % Senior Notes due March 2035

— 600 — — 600

6.450 % Senior Notes due November 2036

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1,000 — — — 1,000

Securitization facility due August 2024 — — — 350 350

Floating Rate Term Loan due June 2026 at 6.456 % at year-end 2023

5.650 % Senior Notes due June 2054

— 500 — — 500

Floating Rate Advance Term Loan due 2035 at 6.096 % at year-end 2023—related party

Floating Rate Advance Term Loan due 2038 at 6.490 % at year-end 2023—related party

5.500 % Senior Notes due March 2055

— 600 — — 600

Revolving Credit Facility due 2027 6.512 % at year-end 2023

Commercial paper due January 2025 at 4.695 % at year-end 2024

435 — — — 435

Uncommitted Facility due July 2025 at 5.300 % at year-end 2024

— 400 — — 400

Receivables Securitization Facility due September 2025 at 5.182 % at year-end 2024

— 375 — — 375

Floating Rate Term Loan due June 2026 at 5.445 % at year-end 2024

— 550 — — 550

Other 1 — — — 1

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Maturities of borrowings outstanding at December 31, 2025, inclusive of net unamortized discounts and debt issuance costs, for each of the years from 2026 through 2030 are $ 1,038 million, $ 1,282 million, $ 1,319 million, $ 1,217 million and $ 1,192 million, respectively.

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.

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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, commencing on March 15, 2025.

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 issued $ 1.5 billion aggregate principal amount of senior unsecured notes that are fully and unconditionally guaranteed by Phillips 66.

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• $ 500 million aggregate principal amount of 5.300 % Senior Notes due June 2033.

On December 16, 2024, upon maturity, Phillips 66 Company and Phillips 66 Partners repaid the 2.450 % Senior Notes due December 2024 with an aggregate principal amount of $ 300 million.

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

On December 31, 2025, Phillips 66 early redeemed $ 400 million of its 1.300 % Senior Notes due February 2026.

After the redemption, an aggregate principal amount of $ 100 million remained outstanding.

On December 4, 2025, Phillips 66 Company repaid the remaining $ 550 million outstanding under its delayed draw term loan agreement (the Term Loan Agreement), which had a maturity date of June 2026, and terminated this agreement.

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

On February 18, 2025, upon maturity, Phillips 66 Partners repaid its 3.605 % Senior Notes due February 2025, with an aggregate principal amount of $ 59 million.

On December 16, 2024, upon maturity, Phillips 66 Company and Phillips 66 Partners repaid the 2.450 % Senior Notes due December 2024 with an aggregate principal amount of $ 300 million.

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

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

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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.

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 $ 1.1 billion 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 will yield sufficient principal and interest over their remaining term to permit the trustee to satisfy the remaining principal and interest due on the Discharged Notes.

Phillips 66 and Phillips 66 Company are no longer the primary obligors under the Discharged Notes.

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 is 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 will be revived and reinstated.

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

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

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

For the year ended December 31, 2024, we recognized an immaterial gain on the extinguishment of this debt.

Term Loan Agreement

On March 27, 2023, Phillips 66 Company, a wholly owned subsidiary of Phillips 66, entered into a $ 1.5 billion delayed draw term loan agreement guaranteed by Phillips 66 (the Term Loan Agreement).

On March 27, 2023, Phillips 66 Company, a wholly owned subsidiary of Phillips 66, entered into a $ 1.5 billion delayed draw term loan agreement guaranteed by Phillips 66.

The Term Loan Agreement provides for a single borrowing during a 90-day period commencing on the closing date, which borrowing was contingent upon the completion of the DCP LP Merger.

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or (b) the reference rate plus the applicable margin, as defined in the Term Loan Agreement.

At December 31, 2024 and 2023, $ 550 million and $ 1.25 billion were borrowed under the Term Loan Agreement, which matures in June 2026, respectively.

At December 31, 2025, no borrowings were outstanding under the Term Loan Agreement, as the remaining balance was prepaid in full on December 4, 2025.

At December 31, 2024, $ 550 million was outstanding under the Term Loan Agreement, which had a maturity date of June 2026.

This agreement was terminated as of December 31, 2025.

Related Party Advance Term Loan Agreements

At December 31, 2023, borrowings outstanding under our Advance Term Loan agreements with WRB totaled $ 290 million.

Borrowings under these agreements were due between 2035 and 2038 and bore interest at a floating rate based on an adjusted term SOFR plus an applicable margin, payable on the last day of each month.

On December 31, 2024, WRB distributed its Advance Term Loan with a principal balance of $ 290 million, including the right to receive any accrued but unpaid interest, to Phillips 66 Company, resulting in the reduction of our related party debt balance and our investment in WRB by $ 290 million.

The distribution was recognized as a non-cash investing and financing transaction.

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

On September 30, 2024, Phillips 66 Company entered into a 364 -day, $ 500 million accounts receivable securitization facility (the Receivables Securitization Facility).

Under the Receivables Securitization Facility, Phillips 66 Company sells or contributes on an ongoing basis, certain of its receivables, together with related security and interests in the proceeds thereof, to its wholly owned subsidiary, Phillips 66 Receivables LLC (P66 Receivables), a consolidated and bankruptcy-remote special purpose entity created for the sole purpose of transacting under the Receivables Securitization Facility.

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.

Accounts outstanding under the Receivables Securitization Facility accrue interest at an adjusted SOFR plus the applicable margin.

Under the Receivables Securitization Facility, Phillips 66 Company sells or contributes on an ongoing basis, certain of its accounts receivable, 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.

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.

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 receivables, together with related security and interests in the proceeds thereof, to PNC Bank, National Association, as Administrative Agent, for the benefit of the secured parties thereunder.

Accounts receivable outstanding under the Receivables Securitization Facility accrue interest at an adjusted SOFR plus the applicable margin.

In all instances, Phillips 66 Company retains the servicing of the accounts receivables transferred.

P66 Receivables’ sole activity consists of purchasing receivables from Phillips 66 Company, providing those receivables as collateral for P66 Receivables’ borrowings or on-selling certain of its receivables under the Receivables Securitization Facility.

P66 Receivables’ sole activity consists of purchasing accounts receivable from Phillips 66 Company, providing those accounts receivable as collateral for P66 Receivables’ borrowings or on-selling certain of its accounts receivable under the Receivables Securitization Facility.

P66 Receivables is a separate legal entity with its own separate creditors, who will be entitled, upon its liquidation, to be satisfied out of P66 Receivables’ assets prior to assets or value in P66 Receivables becoming available to P66 Receivables’ equity holders.

The assets of P66 Receivables, including any funds of P66 Receivables that may be commingled with funds of any of its affiliates for purposes of cash management and related efficiencies, are not available to pay creditors of Phillips 66 Company, Phillips 66 or any affiliate thereof.

Collections on receivables in excess of amounts owed by P66 Receivables under the Receivables Securitization Facility are available to P66 Receivables for payment to Phillips 66 Company, for sales of its receivables to P66 Receivables under the Receivables Securitization Facility, and otherwise for distribution to Phillips 66 Company, in each case, subject to the terms set forth in the Receivables Securitization Facility.

The amount available for borrowing or sale of receivables may be limited by the availability of eligible receivables and other customary factors and conditions, as well as the covenants set forth in the Receivables Securitization Facility.

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.

Cash receipts from the sale of accounts receivables under the Receivables Securitization Facility, received at the time of sale, are classified as cash flows from operating activities.

For the year-ended December 31, 2024, we sold $ 125 million of accounts receivables in exchange for a $ 125 million reduction in our borrowings under the Receivables Securitization Facility, which was recognized as a non-cash financing transaction.

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 year ended December 31, 2024.

At December 31, 2024, $ 121 million of the sold accounts receivable remained outstanding, which represents our maximum potential future exposure under the guarantee.

Collections on accounts receivable in excess of amounts owed by P66 Receivables under the Receivables Securitization Facility are available to P66 Receivables for payment to Phillips 66 Company, for sales of its accounts receivable to P66 Receivables under the Receivables Securitization Facility, and otherwise for distribution to Phillips 66 Company, in each case, subject to the terms set forth in the Receivables Securitization Facility.

The amount available for borrowing or sale

of accounts receivable may be limited by the availability of eligible accounts receivable and other customary factors and conditions, as well as the covenants set forth in the Receivables Securitization Facility.

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.

Cash receipts from the sale of accounts receivable under the Receivables Securitization Facility, received at the time of sale, are classified as cash flows from operating activities.

For the year-ended December 31, 2025, we sold $ 759 million in accounts receivable in exchange for cash proceeds of $ 290 million, and a $ 469 million reduction in our borrowings under the Receivables Securitization Facility which was recognized as a non-cash financing transaction.

For the year ended December 31, 2024, we sold $ 125 million in accounts receivable in exchange for a $ 125 million reduction in our borrowings under the Receivables Securitization Facility, which was recognized as a non-cash financing transaction.

We recognized immaterial charges associated with the 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 for the years ended December 31, 2025 and 2024.

Borrowings under the Receivables Securitization Facility are recognized as short-term debt on the consolidated balance sheet.

Borrowings are secured by the accounts receivables, held by P66 Receivables, which remain reported as accounts receivables on the consolidated balance sheet.

At December 31, 2024, we had outstanding borrowings of $ 375 million under the Receivables Securitization Facility, secured by approximately $ 4.6 billion of accounts receivable held by P66 Receivables.

At December 31, 2024, we had no unused capacity under the Receivables Securitization Facility.

Borrowings are secured by the accounts receivable, held by P66 Receivables, which remain reported as accounts receivable on the consolidated balance sheet.

At December 31, 2025 and 2024, we had outstanding borrowings of $ 200 million and $ 375 million, respectively.

These borrowings were secured by accounts receivable held by P66 Receivables of $ 4.4 billion and $ 4.6 billion for 2025 and 2024, respectively, which are included within the “Accounts and notes receivable” line item on our consolidated balance sheet.

At December 31, 2025, we had utilized $ 367 million of the $ 1.25 billion capacity of the Receivables Securitization Facility from $ 167 million of sold accounts receivable not yet remitted to the Administrative Agent and $ 200 million of outstanding borrowings.

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.

Credit Facilities and Commercial Paper

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

At February 21, 2025, no amount had been drawn under the 2025 Uncommitted Facility.

At December 31, 2025, no 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.

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

At December 31, 2024, the entire $ 400 million had been drawn under the 2024 Uncommitted Facility.

At December 31, 2025, no borrowings were outstanding, while at December 31, 2024, the entire $ 400 million had been drawn 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.

The Facility replaced our previous $ 5 billion revolving credit facility dated as of June 23, 2022, with Phillips 66 Company as the borrower and Phillips 66 as the guarantor, and the previous revolving credit facility was terminated.

The Facility contains customary covenants similar to the previous revolving credit facility, including a maximum consolidated net debt-to-capitalization ratio of 65 % as of the last day of each fiscal quarter.

The Facility contains customary covenants similar to the previous revolving credit facility, including a maximum consolidated net

debt-to-capitalization ratio of 65 % as of the last day of each fiscal quarter.

The Facility has customary events of default, such as nonpayment of principal when due;

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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 December 31, 2024 and 2023, no amounts were drawn under the Facility or the previous revolving credit facility, respectively.

At December 31, 2025 and 2024, no amounts were drawn under the Facility or the previous revolving credit 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 December 31, 2024, $ 435 million of commercial paper had been issued under this program.

At December 31, 2023, no borrowings were outstanding under this program.

At December 31, 2025, and 2024, $ 200 million and $ 435 million, respectively, of commercial paper had been issued under this program.

DCP Midstream Class A Segment

On March 15, 2024, DCP LP terminated its $ 1.4 billion credit facility and its accounts receivable securitization facility that previously provided for up to $ 350 million of borrowing capacity.

At December 31, 2023, DCP LP had $ 25 million in borrowings outstanding under its $ 1.4 billion credit facility and $ 350 million of borrowings outstanding under its accounts receivable securitization facility, both of which were repaid during the three months ended March 31, 2024.

In conjunction with the termination of these facilities, DCP LP repaid $ 25 million in borrowings outstanding under its $ 1.4 billion credit facility and $ 350 million of borrowings outstanding under its accounts receivable securitization facility during the three months ended March 31, 2024.

Total Committed Capacity Available

At December 31, 2025, and 2024, we had $ 5.7 billion and $ 4.6 billion, respectively, of total committed capacity available under the credit facilities described above.

Note 16— Accounts Receivable Factoring

In addition to the Receivables Securitization Facility, discussed in Note 15—Debt, the Company entered into other facilities with various financial institutions during the fourth quarter of 2025 that enable the Company to sell certain eligible accounts receivable to these financial institutions on a non-recourse basis.

Sales of accounts receivable under these facilities meet the sale criteria under ASC 860, Transfers and Servicing, and are derecognized from the consolidated balance sheet.

Cash receipts from the sale of accounts receivable, received at the time of sale, are classified as cash flows from operating activities.

The Company retains the servicing on all accounts receivable sold under these facilities.

For the year ended December 31, 2025, we sold $ 195 million of accounts receivable under these facilities for cash proceeds.

We recognized immaterial charges associated with these transfers, which are included as a component within the line item “Selling, general and administrative expense” on our consolidated statement of income for the year ended December 31, 2025.

Note 17— Guarantees

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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 December 31, 2024.

Under the operating lease agreement for 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 December 31, 2025.

We also have residual value guarantees associated with railcar, airplane and truck leases with maximum potential future exposures totaling $ 175 million.

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See Note 9—Investments, Loans and Long-Term Receivables for additional information regarding Dakota Access and the CECU.

At December 31, 2024, we also had other guarantees outstanding primarily for our portion of certain joint venture debt, which have remaining terms of up to five years .

At December 31, 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 $ 54 million.

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

At December 31, 2025 and 2024, $ 125 million and $ 121 million of the sold accounts receivable remained uncollected, respectively, which represents our maximum potential future exposure under the guarantee associated with the Receivables Securitization Facility.

See Note 15—Debt for information regarding the guarantee under our Receivables Securitization Facility.

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

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

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

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

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, and the Propel Court awarded Propel Fuels $ 195 million in exemplary damages on July 30, 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 November 14, 2025, Phillips 66 Company filed its Notice of Appeal, which has been assigned to Division Two of the First District Court of Appeal.

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

Phillips 66 Company filed its opposition to that request on January 13, 2026, 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, the Company has recorded an accrual of $ 604.9 million which is included in the “Selling, general and administrative expenses” line on our consolidated statement of income for the year ended December 31, 2024, and is reported in the M&S segment.

In addition, the accrued amount is reflected as “Other liabilities and deferred credits” on our consolidated balance sheet as of December 31, 2024.

As a result of the August 2025 final judgment and the October 2024 jury verdict, we recorded $ 262 million and $ 604.9 million of expense for the years ended December 31, 2025 and 2024, respectively, which are included within the “Selling, general and administrative expenses” line on our consolidated statement of income and reported in the M&S segment.

Therefore, our recorded accruals totaling $ 867 million and $ 604.9 million as of December 31, 2025 and 2024, respectively, are reflected as “Other liabilities and deferred credits” on our consolidated balance sheet.

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.

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.

While Phillips 66 Company believes the jury verdict is not legally or factually supported, there can be no assurances that such defense efforts will be successful.

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

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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.

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

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

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

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

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For further information on the fair value of derivatives, see Note 20—Fair Value Measurements.

Commodity Derivative Contracts —We sell into or receive supply from the worldwide crude oil, refined petroleum product, NGL, natural gas, renewable feedstocks and renewable fuels, and electric power markets, exposing our revenues, purchases, cost of operating activities and cash flows to fluctuations in the prices for these commodities.

Commodity Derivative Contracts

We sell into or receive supply from the worldwide crude oil, refined petroleum product, NGL, natural gas, renewable feedstocks and renewable fuels, and electric power markets, exposing our revenues, purchases, cost of operating activities and cash flows to fluctuations in the prices for these commodities.

Generally, our policy is to remain exposed to the market prices of commodities;

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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).

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

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

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

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

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

• Investment in NOVONIX —At December 31, 2024, our investment in NOVONIX was 13.75 %, which is measured at fair value using unadjusted quoted prices available from the Australian Securities Exchange and is therefore categorized as Level 1 in the fair value hierarchy.

• Investment in NOVONIX —At December 31, 2025, our investment in NOVONIX Limited (NOVONIX) was 14.29 %, which is measured at fair value using unadjusted quoted prices available from the Australian Securities Exchange and is therefore categorized as Level 1 in the fair value hierarchy.

• Other investments —Includes other marketable securities with observable market prices.

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Exchange-cleared instruments $ 2,731 — — 2,731 ( 2,660 ) — — 71

OTC instruments — 7 — 7 — — — 7

Physical forward contracts — 69 4 73 ( 10 ) — — 63

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Investment in NOVONIX 26 — — 26 N/A N/A — 26

Foreign currency derivative — 67 — 67 N/A N/A — 67

$ 2,901 69 4 2,974 ( 2,670 ) — — 304

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Investment in NOVONIX 36 — — 36 N/A N/A — 36

Foreign currency derivative* — 67 — 67 N/A N/A — 67

$ 2,326 144 3 2,473 ( 2,118 ) — — 355

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

* Related to foreign currency derivative entered into in connection with the sale of Coop.

See Note 9—Investments, Loans and Long-Term Receivables.

The rabbi trust assets and investment in NOVONIX are recorded in the “Investments and long-term receivables” line item, the foreign currency derivative is recorded in the “Prepaid expenses and other current assets” 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.

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Equity Investments and PP&E

In the fourth quarter of 2025, we remeasured the carrying value of an equity method investment in an NGL pipeline in Texas to fair value.

Fair value was determined using an income approach.

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

In the third quarter of 2025, we remeasured the carrying value of our equity method 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 5—Business Combinations and Note 9—Investments, Loans and Long-Term Receivables for additional information.

In the fourth quarter of 2024, we remeasured the carrying value of an equity method investment in a crude pipeline in Oklahoma to fair value.

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These valuations resulted in Level 3 nonrecurring fair value measurements.

See Note 12—Impairments, for additional information regarding before-tax impairments recorded in 2024.

DCP Midstream Merger

On August 17, 2022, we and Enbridge agreed to merge DCP Midstream and Gray Oak Holdings with DCP Midstream as the surviving entity.

As a result, we began consolidating the financial results of DCP Midstream Class A Segment, DCP Sand Hills and DCP Southern Hills, and accordingly, accounted for the business combination using the acquisition method of accounting, which required DCP Midstream Class A Segment’s, DCP Sand Hills’ and DCP Southern Hills’, assets and liabilities to be recorded at fair value as of the acquisition date on our consolidated balance sheet.

See Note 5—Business Combinations, for additional information on the DCP Midstream Merger.

Equity Method Investments

The fair value of the investments we acquired that are accounted for under the equity method was $ 2,034 million.

The fair value of these assets was determined using the income approach.

The income approach used discounted cash flow models that require various observable and non-observable inputs, such as margins, tariffs and rates, utilization, volumes, product costs, operating expenses, capital expenditures, terminal-year values and risk-adjusted discount rates.

These valuations resulted in Level 3 nonrecurring fair value measurements.

The fair value of PP&E was $ 13,030 million.

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

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

The fair value of properties was determined using a sales comparison approach.

These valuations resulted in Level 3 nonrecurring fair value measurements.

The fair value of DCP LP’s senior and junior subordinated notes was measured using a market approach, based on the average of quotes for the acquired debt from major financial institutions.

These valuations resulted in Level 2 nonrecurring fair value measurements.

Noncontrolling Interests

As a result of our consolidation of DCP Midstream Class A Segment, the noncontrolling interests held in DCP Midstream Class A Segment were recorded at their fair values on the DCP Midstream Merger date.

These noncontrolling interests on the DCP Midstream Merger date primarily included Enbridge’s indirect economic interest in DCP LP, the public holders of DCP LP’s common units and the public holders of DCP LP’s preferred units.

The fair value of the noncontrolling interests in DCP LP’s common units was based on their unit market price as of the date of the DCP Midstream Merger, August 17, 2022.

The fair value of the noncontrolling interests in DCP LP’s publicly traded preferred units was based on their respective market price as of the date of the DCP Midstream Merger, August 17, 2022.

These valuations resulted in Level 1 nonrecurring fair value measurements.

The fair value of the noncontrolling interests in DCP LP’s other preferred units was based on an income approach that used projected distributions that were discounted using an average implied yield of DCP LP’s publicly traded preferred units and expected redemption dates.

This valuation resulted in a Level 2 nonrecurring fair value measurement.

Gains Related to DCP Midstream Merger

In connection with the DCP Midstream Merger, we recognized before-tax gains totaling $ 2,831 million from remeasuring our previously held equity investments to their fair values and a before-tax gain of $ 182 million related to the transfer of a 35.75 % indirect economic interest in Gray Oak Pipeline to our co-venturer.

The fair values of our previously held equity interest in DCP Midstream and the equity interest in Gray Oak Pipeline we transferred were primarily based on DCP LP’s publicly traded common unit market price on the effective date of the DCP Midstream Merger, August 17, 2022, the cash consideration contributed and obligations that were deemed to be effectively settled.

See Note 12—Impairments for additional information regarding before-tax impairments recorded in 2025 and 2024.

JET Management Holding Equity Method Investment

On December 1, 2025, we divested 65 % of our interest in Germany and Austria Marketing.

We retained a 35 % non-operating equity interest in JET Management Holding subsequent to the divestiture.

The fair value of our 35 % interest in JET Management Holding of $ 744 million was determined using a market approach.

This valuation resulted in Level 3 nonrecurring fair value measurements.

The fair values of our previously held equity interests in DCP Sand Hills and DCP Southern Hills were determined using the income approach.

The income approach used discounted cash flow models that require various observable and non-observable inputs, such as tariffs, volumes, operating expenses, capital expenditures, terminal-year values and risk-adjusted discount rates.

See Note 9—Investments, Loans and Long-Term Receivables for additional information on the transaction.

WRB Acquisition

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

The preliminary fair value of PP&E was $ 2,767 million and was determined primarily using the cost approach.

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

The preliminary fair value of inventories was $ 1,200 million and was determined using a market approach.

These valuations resulted in Level 3 nonrecurring fair value measurements.

See Note 5—Business Combinations for additional information on the transaction.

Coastal Bend Acquisition

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

The preliminary fair value of PP&E was $ 2,224 million.

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

This valuation resulted in Level 3 nonrecurring fair value measurements.

See Note 5—Business Combinations for additional information on the transaction.

Note 21— Equity

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Our Board of Directors separately authorized two transactions in 2014 and 2018, which resulted in the repurchase of 52.4 million shares of Phillips 66 common stock with an aggregate value of $ 4.6 billion.

In March 2022, in connection with the Phillips 66 Partners merger, we issued 41.8 million shares of common stock from our treasury stock with an aggregate cost of $ 3.4 billion.

See Note 30—Phillips 66 Partners LP, for information on the merger with Phillips 66 Partners.

In addition, in connection with a transaction in 2022, we issued 41.8 million shares of common stock from our treasury stock with an aggregate cost of $ 3.4 billion.

Common Stock Dividends

On February 12, 2025, our Board of Directors declared a quarterly cash dividend of $ 1.15 per common share, payable March 5, 2025, to holders of record at the close of business on February 24, 2025.

On February 11, 2026, our Board of Directors declared a quarterly cash dividend of $ 1.27 per common share, payable March 4, 2026, to shareholders of record at the close of business on February 23, 2026.

Noncontrolling Interests

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Financing cash outflows—finance leases 30 28 19

During the years ended December 31, 2024, 2023 and 2022, we recorded noncash ROU assets and corresponding operating lease liabilities totaling $ 547 million, $ 398 million and $ 269 million, respectively, related to new and modified lease agreements.

During the years ended December 31, 2025, 2024 and 2023, we recorded noncash ROU assets and corresponding operating lease liabilities totaling $ 1,125 million, $ 547 million and $ 398 million, respectively, related to new and modified lease agreements, including leases acquired as part of the business combinations.

See Note 5—Business Combinations for additional information.

The weighted-average remaining lease terms and discount rates for our lease liabilities at December 31 were:

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Benefits paid ( 291 ) ( 35 ) ( 209 ) ( 34 ) ( 22 ) ( 22 )

Divestiture* — ( 127 ) — — — —

Foreign currency exchange rate change — 60 — ( 22 ) — —

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Benefits paid ( 291 ) ( 35 ) ( 209 ) ( 34 ) ( 22 ) ( 22 )

Divestiture* — ( 13 ) — — — —

Foreign currency exchange rate change — 60 — ( 15 ) — —

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Funded Status at December 31 $ ( 163 ) 184 ( 228 ) 54 ( 133 ) ( 137 )

* Derecognition in connection with the disposition of 65 % of our interest in Germany and Austria Marketing.

See Note 9—Investments, Loans and Long-Term Receivables.

Amounts recognized in the consolidated balance sheet for our pension and other postretirement benefit plans at December 31 include:

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Net actuarial gain (loss) arising during the period $ 14 12 ( 49 ) 18 ( 1 ) 8

Divestiture* — ( 12 ) — — — —

Amortization of net actuarial loss (gain) and settlements 25 ( 1 ) 19 — ( 5 ) ( 5 )

19 — 28 ( 3 ) ( 5 ) ( 6 )

Total recognized in other comprehensive income $ 39 ( 1 ) ( 30 ) 18 ( 6 ) 3

* Related to the disposition of 65 % of our interest in Germany and Austria Marketing and is included in the “Net gain on dispositions” line item on the consolidated statement of income.

See Note 9—Investments, Loans and Long-Term Receivables.

The accumulated benefit obligations for all U.S.

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Expected return on plan assets ( 151 ) ( 46 ) ( 153 ) ( 45 ) ( 126 ) ( 43 ) — — —

( 153 ) ( 45 ) ( 126 ) ( 43 ) ( 135 ) ( 56 ) — — —

Amortization of prior service credit — — — — — ( 1 ) — — ( 2 )

Amortization of net actuarial loss (gain) 16 ( 1 ) 12 — 11 ( 3 ) ( 5 ) ( 5 ) ( 6 )

12 — 11 ( 3 ) 21 12 ( 5 ) ( 6 ) ( 2 )

Settlement losses 9 — 7 — 17 — — — —

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The amount subject to amortization is determined on a plan-by-plan basis.

The following weighted-average assumptions were used to determine benefit obligations and net periodic benefit costs for years ended December 31:

The following weighted-average assumptions were used to determine benefit obligations and net periodic benefit costs for the years ended December 31:

Pension Benefits Other Benefits

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Interest crediting rate on cash balance plan 5.34 — 4.88 — — —

4.88 — 3.98 — — —

Assumptions Used to Determine Net Periodic Benefit Cost:

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Interest crediting rate on cash balance plan 4.88 — 3.98 — — —

3.98 — 3.88 — — —

For both U.S.

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For the year ended December 31, 2024, actuarial losses resulted in increases in our U.S.

and international pension benefit obligations of $ 58 million and $ 30 million, respectively.

The primary driver for the actuarial losses in 2024 was changes in demographic experience.

The primary driver for the actuarial gains in 2024 was increases in the discount rates.

The primary driver for the actuarial losses in 2023 was decreases in the discount rates.

pension benefit obligations of $ 68 million and actuarial gains resulted in a decrease in our international pension benefit obligation of $ 48 million.

The primary driver for the actuarial losses in 2025 were decreases in the discount rates and lump-sum conversion rates.

The primary driver for the actuarial gains in 2025 and 2024 were increases in the discount rates.

The primary driver for the actuarial losses in 2024 were changes in demographic experience.

For the year ended December 31, 2025, the weighted-average actual return on plan assets was 11 %, which resulted in an increase in our U.S.

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Millions of Dollars

International

United States International

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

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Total assets in the fair value hierarchy 655 115 — 770 6 — 235 241

656 109 — 765 21 — 190 211

Common/collective trusts measured at NAV 1,215 462

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Millions of Dollars

International

United States International

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

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Total assets in the fair value hierarchy 656 109 — 765 21 — 190 211

714 101 — 815 4 — 13 17

Common/collective trusts measured at NAV 1,079 419

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Actual return on plan assets ( 1 ) ( 6 )

Divestiture ( 13 ) —

Foreign currency exchange rate change 13 ( 3 )

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For the years ended December 31, 2025, 2024, and 2023, Phillips 66 provided a company match of participant contributions up to 8 % of eligible pay.

For the years ended December 31, 2023 and 2022, Phillips 66 provided an additional Success Share contribution ranging from 0 % to 4 % of eligible pay based on management discretion.

For the year ended December 31, 2023, Phillips 66 provided an additional Success Share contribution ranging from 0 % to 4 % of eligible pay based on management discretion.

For the years ended December 31, 2025, 2024 and 2023, we recorded expense of $ 163 million, $ 155 million and $ 196 million, respectively, related to our contributions to the Savings Plan.

Note 24— Share-Based Compensation Plans

Share-based payment awards, including stock options, stock appreciation rights, stock awards (including restricted stock and Restricted Stock Unit (RSU) awards), cash awards, and performance awards, are granted to our employees, nonemployee directors and other plan participants by the Human Resources and Compensation Committee (HRCC) of our Board of Directors under the applicable Omnibus Stock and Performance Incentive Plan of Phillips 66.

Share-based payment awards, including stock options, Restricted Stock Unit (RSU) awards, and performance awards, are granted to our employees, nonemployee directors and other plan participants by the Human Resources and Compensation Committee (HRCC) of our Board of Directors under the applicable Omnibus Stock and Performance Incentive Plan of Phillips 66.

Prior to May 11, 2022, share-based payment awards were granted under the 2013 Omnibus Stock and Performance Incentive Plan of Phillips 66 (the 2013 P66 Omnibus Plan).

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The recipients receive a quarterly dividend equivalent cash payment until the RSU is settled by issuing one share of our common stock for each RSU at the end of the service period.

RSUs granted to retirement-eligible employees are not subject to forfeiture ten months after the grant date for RSUs granted in 2024 and 2023, and six months after the grant date for RSUs granted prior to 2023.

For recipients outside of the United States and United Kingdom, expected dividend equivalents during the service period are reduced from the grant date fair value on the grant date.

RSUs granted to retirement-eligible employees are not subject to forfeiture ten months after the grant date.

Special RSUs are granted to attract or retain key personnel and the terms and conditions may vary by award.

The following table summarizes our RSU activity from January 1, 2025, to December 31, 2025:

Millions of Dollars

Stock Units Weighted-Average

Fair Value Total Fair Value

Outstanding at January 1, 2025 2,861,407 $ 109.20

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During 2024 and 2023, we granted RSUs with a weighted-average grant-date fair value of $ 145.65 and $ 100.39 , respectively.

During 2023 and 2022, we issued shares with an aggregate fair value of $ 126 million and $ 102 million, respectively, to settle RSUs.

During 2025, 2024 and 2023, we issued shares with an aggregate fair value of $ 186 million, $ 206 million and $ 126 million, respectively, to settle RSUs.

Performance Share Units

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The following table summarizes our PSU activity from January 1, 2025, to December 31, 2025:

Millions of Dollars

Share Units Weighted-Average

Fair Value Total Fair Value

Outstanding at January 1, 2025 432,093 $ 37.75

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During 2024 and 2023, we granted PSUs with a weighted-average grant-date fair value of $ 130.22 and $ 102.66 , respectively.

During 2023 and 2022, we issued shares with an aggregate fair value of $ 13 million and $ 9 million, respectively, to settle PSUs.

During 2023 and 2022, we cash settled PSUs with an aggregate fair value of $ 36 million and $ 18 million, respectively.

During 2025, 2024 and 2023, we issued shares with an aggregate fair value of $ 12 million, $ 14 million and $ 13 million, respectively, to settle PSUs.

During 2025, 2024 and 2023, we cash settled PSUs with an aggregate fair value of $ 106 million, $ 131 million and $ 36 million, respectively.

Stock Options

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The options have terms of 10 years and vest ratably over three years following the grant date, with one-third of the options becoming exercisable each year on the grant date anniversary.

Options granted to retirement-eligible employees are not subject to forfeiture ten months after the grant date for options granted in 2023 and six months after the grant date for options granted prior to 2023.

No options were granted in 2024.

Options granted to retirement-eligible employees are not subject to forfeiture ten months after the grant date.

No options were granted in 2025 and 2024.

The following table summarizes our stock option activity from January 1, 2025, to December 31, 2025:

Millions of Dollars

Options Weighted-Average

Exercise Price Weighted-Average

Fair Value Aggregate

Intrinsic Value

Exercise Price

Outstanding at January 1, 2025 4,056,466 $ 89.32

Granted — — $ —

Forfeited ( 3,301 ) 97.80

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At December 31, 2025, the remaining unrecognized compensation expense from unvested options was $ 0.3 million, which will be recognized over a weighted-average period of 3 months, the longest period being 5 months.

During 2023 and 2022, we granted options with a weighted-average grant-date fair value of $ 27.45 and $ 17.02 , respectively.

During 2023 and 2022, employees exercised options with an aggregate intrinsic value of $ 52 million and $ 42 million, respectively.

The following table provides the significant assumptions used to calculate the grant-date fair values of options granted in 2023 and 2022, as calculated using the Black-Scholes-Merton option-pricing model:

In 2025 and 2024, no options were granted.

In 2023, we granted options with a weighted-average grant-date fair value of $ 27.45 .

During 2025, 2024 and 2023, employees exercised options with an aggregate intrinsic value of $ 55 million, $ 68 million and $ 52 million, respectively.

At December 31, 2025, the aggregate intrinsic value of vested and exercisable options was $ 109 million and $ 103 million, respectively.

The following table provides the significant assumptions used to calculate the grant-date fair values of options granted in 2023, as calculated using the Black-Scholes-Merton option-pricing model:

Risk-free interest rate 3.84

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Expected life (years) 6.78

No options were granted in 2024.

No options were granted in 2025 or 2024.

We calculate the volatility factor using historical Phillips 66 end-of-week closing stock prices.

We periodically calculate the average period of time elapsed between grant dates and exercise dates of past grants to estimate the expected life of new option grants.

As a result of the DCP Midstream Merger, we began consolidating DCP Midstream Class A Segment starting on August 18, 2022.

DCP Midstream Class A Segment had a Long-Term Incentive Plan under which phantom units, performance units and distribution equivalent rights were awarded to key employees.

On June 15, 2023, DCP Midstream Class A Segment’s share-based payment awards were converted to Phillips 66 share-based payment awards and are included in the share-based payment award tables above.

Share-based compensation expense recognized for DCP Midstream Class A Segment’s share-based payment awards totaled $ 23 million for the period from August 18, 2022, through December 31, 2022, and $ 6 million for the period from January 1, 2023, through June 14, 2023.

See Note 4—Restructuring and Note 5—Business Combinations, for additional information regarding the DCP Midstream Merger and associated accounting treatment.

Note 25— Income Taxes

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government enacted the Inflation Reduction Act of 2022 (IRA) that includes, among other provisions, changes to the U.S.

corporate income tax system, including a 15% minimum tax based on adjusted financial statement income as defined in the IRA, which was effective after December 31, 2022.

We did not owe corporate alternative minimum tax in 2024 or 2023 as the regular U.S.

tax liability exceeded the corporate alternative minimum tax.

The IRA also included provisions that allow a company to purchase transferable tax credits.

corporate income tax system, including provisions that allow a company to purchase transferable tax credits.

In 2024 and 2023, we executed agreements to purchase eligible tax credits for a total of $ 485 million and $ 262 million, respectively.

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Net deferred tax liabilities $ 7,274 7,035

*2024 includes activity associated with our 50 % equity interest in WRB.

**Includes activity associated with our consolidated investments in Phillips 66 Partners and DCP LP.

2025 also includes activity associated with our consolidated investment in WRB, see Note 9—Investments, Loans and Long-Term Receivables for additional information.

At December 31, 2025, the loss and credit carryforward deferred tax assets were primarily related to a foreign tax credit carryforward in the United States of $ 150 million;

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Determination of the unrecognized deferred income tax liability related to this temporary difference is not practicable given the variables involved in performing such a calculation.

During the fourth quarter of 2024, we entered into a definitive agreement to sell our ownership interest in Coop.

In connection with the anticipated sale, we recorded a U.S.

deferred tax liability of $ 36 million for the excess of book over tax basis in this investment.

The sale of Coop closed in January 2025.

See Note 9—Investments, Loans and Long-Term Receivables, for additional information.

We file tax returns in the U.S.

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Included in the balance of unrecognized income tax benefits at December 31, 2025, 2024 and 2023, were $ 87 million, $ 87 million and $ 100 million, respectively, which, if recognized, would affect our effective income tax rate.

With respect to various unrecognized income tax benefits and the related accrued liabilities, we do not expect any to be recognized or paid within the next twelve months.

At December 31, 2025, 2024 and 2023, accrued liabilities for interest and penalties, net of accrued income taxes, totaled $ 1 million, $ 1 million and $ 8 million, respectively.

These accruals increased our results for the year ended December 31, 2024, by $ 7 million and decreased our results for the years ended December 31, 2023 and 2022, by $ 1 million and $ 3 million, respectively.

These accruals had no impact on our results for the year ended December 31, 2025, increased our results for the year ended December 31, 2024, by $ 7 million and decreased our results for the year ended December 31, 2023, by $ 1 million.

Audits in significant jurisdictions are generally complete as follows:

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and foreign income before income taxes, with a reconciliation of income tax at the federal statutory rate to the recorded income tax expense (benefit), were:

Millions of Dollars Percentage of

Income (Loss) Before Income Taxes

2025 2024 2023

Amount Percent Amount Percent Amount Percent

Income before income taxes

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State income tax, net of federal income tax benefit* 57 1.1 ( 43 ) ( 1.6 ) 290 3.1

Noncontrolling interests ( 2 ) ( 51 ) ( 74 ) ( 0.1 ) ( 0.5 ) ( 0.5 )

Non-taxable equity earnings ( 44 ) ( 42 ) ( 33 ) ( 1.6 ) ( 0.4 ) ( 0.2 )

Tax law changes — — ( 25 ) — — ( 0.2 )

Foreign tax effects

United Kingdom

Statutory tax rate difference between United Kingdom and United States 59 1.1 — — — —

Non-taxable gain on disposition** ( 251 ) ( 4.6 ) — — — —

Other ( 2 ) — — — — —

Statutory tax rate difference between Germany and United States 308 5.7 — — — —

Non-taxable gain on disposition*** ( 740 ) ( 13.7 ) — — — —

Other 12 0.2 — — — —

Other foreign jurisdictions 11 0.1 ( 11 ) ( 0.4 ) 39 0.4

Tax law and rate changes — — — — — —

Effect of cross-border tax laws

Disposition of Coop** 220 4.1 36 1.4 — —

Other 59 1.1 ( 11 ) ( 0.4 ) ( 43 ) ( 0.5 )

Tax credits ( 1 ) — ( 2 ) ( 0.1 ) ( 2 ) —

Changes in valuation allowances 21 0.4 17 0.6 22 0.2

Non-taxable or non-deductible items

Discount on purchased credits — — ( 36 ) ( 1.3 ) — —

Tax on outside basis difference in foreign investment

36 — — 1.3 — —

Other ( 7 ) ( 0.1 ) ( 12 ) ( 0.5 ) ( 74 ) ( 0.8 )

Changes in unrecognized tax benefits — — 4 0.1 16 0.2

Other 8 0.1 ( 4 ) ( 0.1 ) ( 7 ) —

$ 892 16.5 % 500 18.7 2,230 23.6

* “Other” is primarily attributable to foreign operations.

For the years ended December 31, 2024, 2023 and 2022, income tax benefits of $ 14 million, $ 113 million and $ 323 million, respectively, are reflected in “Capital in Excess of Par” on the consolidated statement of changes in equity.

Note - items that do not meet the 5% threshold for disaggregation have not been separately stated.

* The states that contribute to the majority (greater than 50 percent) of the tax effect in this category include Illinois, Oklahoma, New Jersey, California, and Louisiana for 2025 and 2024, and California, New Jersey, Oklahoma, and Illinois for 2023.

** Related to the disposition of our ownership interest in Coop.

See Note 9—Investments, Loans and Long-Term Receivables for additional information.

*** Related to the disposition of 65 % of our interest in Germany and Austria Marketing.

See Note 9—Investments, Loans and Long-Term Receivables for additional information.

Income tax expense of $ 47 million for the year ended December 31, 2025 and income tax benefits of $ 14 million and $ 113 million for the years ended December 31, 2024 and 2023, respectively, are reflected in “Capital in Excess of Par” on the consolidated statement of changes in equity.

Note 26— Accumulated Other Comprehensive Loss

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Defined benefit plans

Amortization of net actuarial loss, prior service credit and settlements 72 — — 72

Amortization of net actuarial loss and settlements* 14 — — 14

Foreign currency translation — — — —

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Defined benefit plans

Amortization of net actuarial loss, prior service credit and settlements 14 — — 14

Amortization of net actuarial loss and settlements* 11 — — 11

Foreign currency translation — — — —

Hedging — — — —

Net current period other comprehensive income (loss) 2 179 ( 3 ) 178

Net current period other comprehensive loss ( 20 ) ( 105 ) — ( 125 )

December 31, 2024 ( 140 ) ( 262 ) ( 5 ) ( 407 )

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Amortization of net actuarial loss and settlements* 14 — — 14

Divestiture** ( 12 ) — — ( 12 )

Foreign currency translation** †

— ( 50 ) — ( 50 )

Hedging — — — —

Net current period other comprehensive loss ( 20 ) ( 105 ) — ( 125 )

Net current period other comprehensive income 27 213 — 240

December 31, 2025 $ ( 113 ) ( 49 ) ( 5 ) ( 167 )

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See Note 23—Pension and Postretirement Plans for additional information.

** Related to the disposition of 65 % of our interest in Germany and Austria Marketing and is included in the “Net gain on dispositions” line item on the consolidated statement of income.

See Note 9—Investments, Loans and Long-Term Receivables.

† Related to the disposition of Coop and is included in the “Net gain on dispositions” line item on the consolidated statement of income.

See Note 9—Investments, Loans and Long-Term Receivables.

Note 27— Cash Flow Information

In the third quarter of 2024, we began presenting the line item “Capital expenditures and investments” on our consolidated statement of cash flows exclusive of acquisitions, net of cash acquired.

Prior period information has been reclassified for comparability.

Supplemental Cash Flow Information

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Interest $ 972 901 816

Income taxes* 1,186 1,397 2,071

* 2024 and 2023 include $ 551 million and $ 196 million of cash paid to counterparties to purchase IRA eligible tax credits.

Federal Income Taxes 92 800 565

State Income Taxes

California ( 19 ) ** 96

Illinois 10 ** **

New Jersey ( 13 ) ** 88

Oklahoma ( 19 ) ** **

Other ( 5 ) 85 176

Foreign Income Taxes

Austria 11 ** **

Canada 51 69 **

Germany 108 99 133

United Kingdom ( 22 ) 122 295

Other 6 11 44

Total income taxes* 200 1,186 1,397

* Federal income tax payments in 2024 and 2023 include $ 551 million and $ 196 million, respectively, of cash paid to counterparties to purchase IRA eligible tax credits.

** The amount of income taxes paid during the year does not meet the 5% disaggregation threshold.

Millions of Dollars

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Distribution of Advance Term Loan from WRB — ( 290 ) —

Reduction in borrowings under Receivables Securitization Facility ( 469 ) ( 125 ) —

See Note 15—Debt for additional information regarding the above non-cash activities.

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$ 997 919 842

1,060 928 928

Capitalized ( 21 ) ( 21 ) ( 31 )

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Interest income $ 141 158 269

Unrealized investment gain (loss)—NOVONIX — ( 38 ) ( 433 )

Gain related to merger of businesses — — 3,013

Unrealized investment loss—NOVONIX ( 15 ) — ( 38 )

Other, net* 312 85 128

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Operating expenses and selling, general and administrative expenses (c) 312 299 295

(a) We sold NGL, other petrochemical feedstocks and solvents to Chevron Phillips Chemical Company LLC (CPChem), NGL and certain feedstocks to DCP Midstream, 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.

(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, CF United LLC (CF United), and JET Management Holding.

See Note 9—Investments, Loans and Long-Term Receivables for additional information on JET Management Holding.

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.

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(d) As a result of the DCP Midstream Merger, we began consolidating DCP Midstream Class A Segment, DCP Sand Hills and DCP Southern Hills.

As such, transactions with these parties after August 17, 2022, are not presented in the table above.

(d) As a result of the WRB acquisition, we began consolidating WRB’s financial results beginning on October 1, 2025.

As such, transactions after this date are not presented in the table above.

See Note 5—Business Combinations for additional information.

Note 30— Segment Disclosures and Related Information

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

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

The primary effects are summarized below.

Prior period information has been recast for comparability.

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

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

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

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

Our operating segments are:

1) Midstream— Provides crude oil and refined petroleum product transportation, terminaling and processing services, as well as natural gas and NGL transportation, storage, fractionation, gathering, processing and marketing services in the United States.

1) Midstream— Provides crude oil and refined petroleum product transportation, terminaling and storage services, as well as natural gas and NGL gathering, processing, transportation, fractionation, storage and marketing services in the United States.

In addition, this segment exports liquefied petroleum gas to global markets.

1 unchanged sentence

3) Refining— Refines crude oil and other feedstocks into petroleum products, such as gasoline and distillates, including aviation fuels.

This segment includes 11 refineries in the United States and Europe.

At December 31, 2025, this segment included 10 refineries in the United States and Europe.

4) Marketing and Specialties— Purchases for resale and markets refined products, mainly in the United States and Europe.

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Corporate assets include all cash, cash equivalents, income tax-related assets and enterprise information technology assets.

See Note 4—Restructuring, for additional information regarding restructuring costs.

Effective in the first quarter of 2026, activities associated with decommissioning and redeveloping at our idled Los Angeles Refinery will be included in Corporate and Other.

See Note 4—Restructuring for additional information.

Intersegment sales are at prices that we believe approximate market.

26 unchanged sentences

Other segment items** 7 — 9 6 6 18 — 46

14 — 18 5 2 12 — 51

Total Costs and Expenses 18,839 — 75,137 84,482 6,761 1,741 ( 55,820 ) 131,140

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

† Includes our proportional share of our equity method investment in WRB through September 30, 2025.

Beginning on October 1, 2025, 100 % of Borger Refinery and Wood River Refinery are included in consolidated results.

Refer to Note 5—Business Combinations, in the Notes to Consolidated Financial Statements for additional information.

Millions of Dollars

6 unchanged sentences

Capital Expenditures and Investments 1,231 — 776 118 56 52 2,233

† Includes our proportional share of our equity method investment in WRB through September 30, 2025.

Beginning on October 1, 2025, 100 % of Borger Refinery and Wood River Refinery are included in consolidated results.

Refer to Note 5—Business Combinations, in the Notes to Consolidated Financial Statements for additional information.

Millions of Dollars

19 unchanged sentences

Other segment items** 14 — 18 5 2 12 — 51

2 — 35 5 4 5 — 51

Total Costs and Expenses 17,014 ( 13 ) 85,374 91,820 5,769 1,523 ( 58,666 ) 142,821

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Other segment items** 2 — 35 5 4 5 — 51

1 — 8 — ( 9 ) 14 — 14

Total Costs and Expenses 16,568 ( 14 ) 87,398 97,371 4,797 1,645 ( 67,344 ) 140,421

21 unchanged sentences

Worldwide consolidated $ 51,002 49,642 51,014

Note 30— Phillips 66 Partners LP

On March 9, 2022, we completed a merger between us and Phillips 66 Partners.

The merger resulted in the acquisition of all limited partnership interests in Phillips 66 Partners not already owned by us in exchange for 41.8 million shares of Phillips 66 common stock issued from treasury stock.

Phillips 66 Partners common unitholders received 0.50 shares of Phillips 66 common stock for each outstanding Phillips 66 Partners common unit.

Phillips 66 Partners’ perpetual convertible preferred units were converted into common units at a premium to the original issuance price prior to being exchanged for Phillips 66 common stock.

Upon closing, Phillips 66 Partners became a wholly owned subsidiary of Phillips 66 and its common units are no longer publicly traded.

The merger was accounted for as an equity transaction.

Note 31— New Accounting Standards

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We are evaluating the provisions of ASU 2024-03 and the incremental disclosures that will be required in our consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740) – Improvements to Income Tax Disclosures,” which enhances the transparency, effectiveness, and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid.

This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

Upon adoption, the provisions of ASU 2023-09 will require additional disclosures within Note 24—Income Taxes, and Note 26—Cash Flow Information.

In September 2025, the FASB issued ASU 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) Targeted Improvements to the Accounting for Internal-Use Software,” which simplifies the capitalization guidance by removing all references to software development project stages.

Under this standard, eligible software development costs will begin capitalization when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended.

This ASU is effective for annual reporting periods beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted.

We are evaluating the provisions of ASU 2025-06 on our consolidated financial statements and related disclosures.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data