What changed in this filing

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Item 1. Financial Statements

2026-04-29 compared with 2025-10-29 · 201 added, 460 removed, 661 unchanged (50% of the section changed)

2 unchanged sentences

Millions of Dollars

Three Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

Three Months Ended March 31

Revenues and Other Income

29 unchanged sentences

Millions of Dollars

Three Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

Three Months Ended March 31

Net Income $ 219 526

17 unchanged sentences

Cash and cash equivalents $ 5,150 1,116

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

Accounts and notes receivable (net of allowances of $ 66 million in 2026 and $ 68 million in 2025)

Accounts and notes receivable—related parties 626 613

1 unchanged sentence

Prepaid expenses and other current assets 3,613 1,287

Assets held for sale 1,594 —

Total Current Assets 27,396 17,271

11 unchanged sentences

Other accruals 2,285 1,379

Liabilities held for sale 1,419 —

Total Current Liabilities 24,191 13,326

23 unchanged sentences

Millions of Dollars

Nine Months Ended

Three Months Ended March 31

Cash Flows From Operating Activities

6 unchanged sentences

Undistributed equity earnings ( 86 ) 120

Gain on early redemption of debt — ( 3 )

Net gain on dispositions ( 6 ) ( 1,087 )

Unrealized investment loss 9 10

Other ( 82 ) ( 6 )

Working capital adjustments

4 unchanged sentences

Taxes and other accruals 470 111

Net Cash Provided by Operating Activities 2,210 2,993

Net Cash Provided by (Used in) Operating Activities ( 2,264 ) 187

Cash Flows From Investing Activities

1 unchanged sentence

Acquisitions, net of cash acquired ( 66 ) —

Purchases of government obligations — ( 1,100 )

Return of investments in equity affiliates 26 25

Proceeds from asset dispositions 7 2,034

Advances/loans—related parties ( 20 ) —

Collection of advances/loans—related parties 22 3

Other 9 ( 45 )

Net Cash Used in Investing Activities ( 1,630 ) ( 2,118 )

Net Cash Provided by (Used in) Investing Activities ( 606 ) 1,591

Cash Flows From Financing Activities

7 unchanged sentences

Other ( 43 ) ( 55 )

Net Cash Used in Financing Activities ( 411 ) ( 2,581 )

Net Cash Provided by (Used in) Financing Activities 6,920 ( 2,049 )

Effect of Exchange Rate Changes on Cash and Cash Equivalents ( 16 ) 22

Net Change in Cash and Cash Equivalents, including cash classified within Assets held for sale 212 ( 1,686 )

Net Change in Cash and Cash Equivalents 4,034 ( 249 )

Cash and cash equivalents at beginning of period 1,116 1,738

Cash and Cash Equivalents at End of Period, including cash classified within Assets held for sale $ 1,950 1,637

Millions of Dollars

Nine Months Ended

Reconciliation of Cash and Cash Equivalents at end of period

Cash and cash equivalents $ 1,845 1,637

Cash and cash equivalents included in Assets held for sale 105 —

Cash and cash equivalents at end of period, including cash classified within Assets held for sale $ 1,950 1,637

Cash and Cash Equivalents at End of Period $ 5,150 1,489

See Notes to Consolidated Financial Statements.

1 unchanged sentence

Millions of Dollars

Three Months Ended September 30

Attributable to Phillips 66

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

Other Comprehensive Loss Noncontrolling Interests Total

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

Net income — — — 133 — 34 167

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

Dividends paid on common stock ($ 1.20 per share)

— — — ( 484 ) — — ( 484 )

Repurchase of common stock — — ( 266 ) — — — ( 266 )

Distributions to noncontrolling interests — — — — — ( 28 ) ( 28 )

Contributions from noncontrolling interests — — — — — 18 18

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

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

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

Net income — — — 346 — 23 369

Other comprehensive income — — — — 168 — 168

Dividends paid on common stock ($ 1.15 per share)

— — — ( 477 ) — — ( 477 )

Repurchase of common stock — — ( 808 ) — — — ( 808 )

Distributions to noncontrolling interests — — — — — ( 13 ) ( 13 )

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

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

Three Months Ended September 30

Common Stock Issued Treasury Stock

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

Repurchase of common stock — 2,073,442

Shares issued—share-based compensation 870,312 —

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

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

Repurchase of common stock — 5,932,552

Shares issued—share-based compensation 352,596 —

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

See Notes to Consolidated Financial Statements.

Millions of Dollars

Nine Months Ended September 30

Three Months Ended March 31

Attributable to Phillips 66

3 unchanged sentences

Net income — — — 207 — 12 219

Other comprehensive income — — — — 244 — 244

Other comprehensive loss — — — — ( 64 ) — ( 64 )

Dividends paid on common stock ($ 1.27 per share)

4 unchanged sentences

Benefit plan activity — 73 — ( 3 ) — — 70

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

March 31, 2026 $ 7 20,021 ( 24,203 ) 32,934 ( 231 ) 1,153 29,681

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

6 unchanged sentences

Benefit plan activity — 1 — ( 4 ) — — ( 3 )

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

Nine Months Ended September 30

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

Three Months Ended March 31

Common Stock Issued Treasury Stock

2 unchanged sentences

Shares issued—share-based compensation 1,530,212 —

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

March 31, 2026 660,921,696 259,986,676

December 31, 2024 656,987,861 248,594,923

1 unchanged sentence

Shares issued—share-based compensation 1,185,541 —

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

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

See Notes to Consolidated Financial Statements.

5 unchanged sentences

Therefore, these interim financial statements should be read in conjunction with the consolidated financial statements and notes included in our 2025 Annual Report on Form 10-K.

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

Note 2— Restructuring

Los Angeles Refinery

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

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

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

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

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

As of September 30, 2025, the $ 512 million carrying value of the net properties, plants and equipment (PP&E) and intangible assets will be depreciated through the fourth quarter of 2025 to the estimated salvage value of $ 241 million.

Total depreciation related to the Los Angeles Refinery assets for the three and nine months ended September 30, 2025, was $ 265 million and $ 800 million, respectively, including $ 241 million and $ 726 million of accelerated depreciation, respectively.

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

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

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

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

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

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

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

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

The results of operations for the three months ended March 31, 2026, are not necessarily indicative of the results expected for the full year.

Note 2— Business Combinations

Midstream Acquisitions

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.

This acquisition enables full integration with our broader value chain and expands 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 $ 1,340

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

Settlement of relationships with Phillips 66 and WRB 793

Total acquisition consideration $ 3,437

The acquisition date fair value of the previously held equity interest in WRB was determined using a market approach and the valuation resulted in a Level 3 nonrecurring fair value measurement.

We accounted for this acquisition as a business combination and provisionally recorded $ 2,771 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;

$ 87 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.

See Note 14—Fair Value Measurements for additional information on the determination of fair value.

Midstream Acquisition

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

For this acquisition, we provisionally recorded $ 2,216 million of PP&E;

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

We finalized the valuation of the assets acquired and liabilities assumed during the three months ended March 31, 2026.

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

$ 4 million of other assets;

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

and $ 33 million of other long-term liabilities.

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

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

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

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

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

$ 21 million of goodwill;

$ 18 million of net working capital deficit;

$ 13 million of AROs;

and $ 6 million of finance lease liabilities.

Marketing and Specialties Acquisition

On October 1, 2024, we acquired a marketing business on the U.S.

West Coast for total consideration of $ 68 million.

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

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

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

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

$ 31 million of net working capital;

and $ 45 million of finance lease liabilities.

Subsequent Refining Acquisition

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

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

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

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

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

$ 33 million of other long-term liabilities;

and $ 4 million of AROs.

Note 3— Sales and Other Operating Revenues

2 unchanged sentences

Millions of Dollars

Three Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

Three Months Ended March 31

Product Line and Services

11 unchanged sentences

Consolidated sales and other operating revenues $ 32,540 30,430

* Includes derivatives-related activities.

* Includes economic hedging losses associated with derivatives-related activities.

See Note 13—Derivatives and Financial Instruments, for additional information.

1 unchanged sentence

Contract-Related Assets and Liabilities

At September 30, 2025, and December 31, 2024, receivables from contracts with customers were $ 8,623 million and $ 8,615 million, respectively.

At March 31, 2026, and December 31, 2025, receivables from contracts with customers were $ 9,250 million and $ 7,781 million, respectively.

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

1 unchanged sentence

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

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

At March 31, 2026, and December 31, 2025, our asset balances related to such payments were $ 852 million and $ 820 million, respectively.

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

At September 30, 2025, and December 31, 2024, contract liabilities were $ 215 million and $ 232 million, respectively.

At March 31, 2026, and December 31, 2025, contract liabilities were $ 210 million and $ 198 million, respectively.

Remaining Performance Obligations

2 unchanged sentences

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

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

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

At March 31, 2026, the remaining performance obligations related to these minimum volume commitment contracts amounted to $ 819 million.

Note 4— Credit Losses

9 unchanged sentences

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

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

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

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

See Note 11—Debt, Note 12—Guarantees, and Note 13—Contingencies and Commitments, for more information on these off-balance sheet exposures.

At March 31, 2026, and December 31, 2025, we reported $ 11,910 million and $ 9,771 million of accounts and notes receivable, respectively, net of allowances of $ 66 million and $ 68 million, respectively.

Based on an aging analysis at March 31, 2026, 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 receivable sold under a securitization facility, as well as standby letters of credit.

See Note 9—Debt, Note 11—Guarantees, and Note 12—Contingencies and Commitments, for additional information on these off-balance sheet exposures.

Note 5— Inventories

5 unchanged sentences

$ 6,723 5,097

Inventories valued on the last-in, first-out (LIFO) basis totaled $ 5,864 million and $ 3,443 million at September 30, 2025, and December 31, 2024, respectively.

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

Inventories valued on the last-in, first-out (LIFO) basis totaled $ 6,078 million and $ 4,461 million at March 31, 2026, and December 31, 2025, respectively.

The estimated excess of current replacement cost over LIFO cost of inventories amounted to approximately $ 10.5 billion and $ 3.6 billion at March 31, 2026, and December 31, 2025, respectively.

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

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

LIFO liquidations did not have a material impact on net income for the three months ended March 31, 2026 and 2025.

Note 6— Investments, Loans and Long-Term Receivables

2 unchanged sentences

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 in 2017 with either the same or a larger volume of oil allowed through the pipeline, while the third alternative would require decommissioning of the current pipeline and construction of a new line 39 miles upstream from the current location.

The public comment period concluded on December 13, 2023.

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.

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

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

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

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

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.

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

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

Most recently, the Tribe has appealed the dismissal, but the issuance of the ROD will supersede and effectively moot the appeal.

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

On April 1, 2024, Dakota Access’ wholly owned subsidiary repaid $ 1 billion aggregate principal amount of its outstanding senior notes upon maturity.

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

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

At March 31, 2026, the aggregate principal amount outstanding of Dakota Access’ senior unsecured notes was $ 850 million.

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

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

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

At March 31, 2026, our 25 % share of the maximum potential equity contributions under the CECU was approximately $ 215 million.

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

Should operations cease and Dakota Access and ETCO not have sufficient funds to pay its expenses, we also could be required to support our 25 % share of the ongoing expenses, including scheduled interest payments on the notes of approximately $ 10 million annually, in addition to the potential obligations under the CECU at September 30, 2025.

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

At March 31, 2026, the aggregate book value of our investments in Dakota Access and ETCO was $ 842 million.

OnCue Holdings, LLC (OnCue)

3 unchanged sentences

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

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

WRB Refining LP Impairment

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

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

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

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

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

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

At March 31, 2026, our maximum exposure to loss was $ 271 million, which represented the book value of our investment in OnCue of $ 218 million and guaranteed debt obligations of $ 53 million.

Investment Dispositions

1 unchanged sentence

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

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

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 three months ended March 31, 2025, and is reported in our M&S segment.

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

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

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

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 three months ended March 31, 2025, and is reported in our Midstream segment.

Note 7— Properties, Plants and Equipment

2 unchanged sentences

Millions of Dollars

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Midstream $ 29,903 5,973 23,930 29,558 5,771 23,787

5 unchanged sentences

$ 62,270 23,121 39,149 61,791 22,694 39,097

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

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

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

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

Note 9— Impairments

Millions of Dollars

Three Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

Midstream $ — 28 — 312

Refining 951 — 955 105

Marketing & Specialties — 1 1 1

Corporate and Other — — 25 1

Total impairments $ 951 29 981 419

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

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

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

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

The nine-month period of 2024 also included $ 224 million of before-tax impairments recorded in our Midstream segment related to certain gathering and processing assets in Texas and $ 163 million related to certain crude oil processing and logistics assets in California, of which $ 104 million was reported in our Refining segment and $ 59 million was reported in our Midstream segment.

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

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

In the fourth quarter of 2025, we began idling facilities at our Los Angeles Refinery 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 carrying values of the associated net properties, plants and equipment (PP&E) and intangible assets were depreciated to the estimated salvage value of $ 241 million at December 31, 2025.

Total depreciation related to the Los Angeles Refinery assets for the three months ended March 31, 2025, was $ 270 million, including $ 246 million of accelerated depreciation, and was included within the “Depreciation and amortization” line item on our consolidated statement of income reported in our Refining segment.

In the first quarter of 2026, we transferred $ 2,965 million in gross PP&E and $ 2,699 million of accumulated depreciation and amortization associated with the idled Los Angeles Refinery from our Refining segment to Corporate and Other.

Note 8— Earnings Per Share

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

Three Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

Basic Diluted Basic Diluted Basic Diluted Basic Diluted

Three Months Ended March 31

Basic Diluted Basic Diluted

Amounts Attributed to Phillips 66 Common Stockholders (millions) :

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$ 0.51 0.51 1.19 1.18

Note 11— Debt

Senior Notes and Term Loan Issuances and Repayments

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

The senior unsecured notes issuance consisted of:

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

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

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

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

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

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

The senior unsecured notes issuance consisted of:

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

• $ 400 million aggregate principal amount of 5.300 % Senior Notes due 2033 (Additional 2033 Notes).

• $ 500 million aggregate principal amount of 5.650 % Senior Notes due 2054 (2054 Notes).

Interest on the 2031 Notes and 2054 Notes is payable semi-annually on June 15 and December 15 of each year and commenced on June 15, 2024.

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

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

On February 17, 2026, upon maturity, Phillips 66 repaid the remaining $ 100 million outstanding on its 1.300 % Senior Notes due February 2026, with an aggregate principal amount of $ 500 million.

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

On March 29, 2024, DCP LP 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.

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

Discharge of Senior Notes

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

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

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

On September 20,

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

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

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

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

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

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

Junior Subordinated Notes Issuances

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

The junior subordinated notes issuance consisted of:

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

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

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

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

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

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

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

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

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

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

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

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

Term Loan Agreement

On March 18, 2026 (the Term Loan Closing Date), Phillips 66 Company entered into a 364-day , $ 2.25 billion term loan agreement guaranteed by Phillips 66 (the Term Loan Agreement).

The Term Loan Agreement provides for a single borrowing on the Term Loan Closing Date and matures 364 days after the Term Loan Closing Date.

The Term Loan Agreement contains customary covenants similar to those contained in our revolving credit agreement, including a maximum consolidated net debt-to-capitalization ratio of 65 % as of the last day of each fiscal quarter.

The Term Loan Agreement has customary events of default, such as nonpayment of principal when due;

nonpayment of interest, fees or other amounts after grace periods;

and violation of covenants.

We may at any time prepay outstanding borrowings under the Term Loan Agreement, in whole or in part, without premium or penalty.

Outstanding borrowings under the Term Loan Agreement bear interest at either:

(a) the term Secured Overnight Financing Rate (SOFR) in effect from time to time plus an applicable margin of 1.100 %;

or (b) the reference rate (as described in the Term Loan Agreement) plus an applicable margin of 0.100 %.

At March 31, 2026, the entire $ 2.25 billion was borrowed under the Term Loan Agreement, which matures in March 2027.

Accounts Receivable Securitization

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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.

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

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

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

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

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

On March 13, 2026, Phillips 66 Company amended the Receivables Securitization Facility to, among other things, increase the maximum size of the Receivables Securitization Facility from $ 1.25 billion to $ 1.75 billion and permit P66 Receivables to request a future increase in the maximum facility size to up to $ 2.0 billion.

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 $ 1.75 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 term SOFR plus the applicable margin.

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

Accounts receivable sold under the Receivables Securitization Facility meet the sale criteria under ASC 860, Transfers and Servicing, and are derecognized from the consolidated balance sheet.

P66 Receivables guarantees payment, in full, for accounts receivable sold to the purchasers.

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

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

We recognized immaterial charges associated with the transfer of financial assets, which are included as a component within the line item “Selling, general and administrative expense” on our consolidated statement of income during the three and nine months ended September 30, 2025.

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

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

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

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

For the three months ended March 31, 2026, we sold $ 264 million of accounts receivable in exchange for a $ 264 million reduction in our borrowings under the Receivables Securitization Facility, which was recognized as a non-cash financing transaction.

For the three months ended March 31, 2025, we sold $ 130 million of accounts receivables for cash proceeds under the Receivables Securitization Facility.

We recognized immaterial charges associated with the transfers of financial assets, which are included as a component within the line item “Selling, general and administrative expense” on our consolidated statement of income, during the three months ended March 31, 2026 and 2025.

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

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

At March 31, 2026, and December 31, 2025, we had outstanding borrowings of $ 384 million and $ 200 million, respectively.

These borrowings were secured by accounts receivable held by P66 Receivables of $ 5.4 billion and $ 4.4 billion as of March 31, 2026, and December 31, 2025, respectively, which are included within the “Accounts and notes receivable” line item on our consolidated balance sheet.

At March 31, 2026, we had utilized $ 650 million of the $ 1.75 billion capacity of the Receivables Securitization Facility from $ 266 million of sold accounts receivable not yet remitted to the Administrative Agent and $ 384 million of outstanding borrowings.

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.

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

On March 26, 2026, Phillips 66 amended the 2025 Uncommitted Facility to increase the capacity by $ 100 million.

At March 31, 2026, the entire $ 300 million was outstanding, while 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 September 30, 2025, and December 31, 2024, $ 400 million of borrowings were outstanding under the 2024 Uncommitted Facility.

At March 31, 2026, and December 31, 2025, no borrowings were outstanding under the 2024 Uncommitted Facility.

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

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

The pricing levels for the commitment fee and interest-rate margins are determined

based on the ratings in effect for our senior unsecured long-term debt from time to time.

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

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

At March 31, 2026, and December 31, 2025, no amount had been drawn under the Facility.

Phillips 66 also has a $ 5 billion uncommitted commercial paper program for short-term working capital needs that is supported by the Facility.

Commercial paper maturities are contractually limited to less than one year.

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

DCP Midstream Class A Segment

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.

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.

At March 31, 2026, we had $ 5 billion borrowings outstanding under this program, while at December 31, 2025, $ 200 million of commercial paper had been issued under this program.

Note 10—Accounts Receivable Factoring

In addition to the Receivables Securitization Facility, discussed in Note 9—Debt, the Company maintains other accounts receivable factoring facilities with various financial institutions that enable the Company to sell certain eligible accounts receivable to these financial institutions on a non-recourse basis in which we retain the servicing of the accounts receivable transferred.

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.

For the three months ended March 31, 2026, we sold $ 330 million of accounts receivable for cash proceeds under these facilities.

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 three months ended March 31, 2026.

We had $ 292 million and $ 195 million of sold accounts receivable uncollected as of March 31, 2026 and December 31, 2025, respectively, and these amounts were derecognized from our consolidated balance sheet.

Note 11— Guarantees

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

At March 31, 2026, we were liable for certain contingent obligations under various contractual arrangements as described below.

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

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Lease Residual Value Guarantees

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

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

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

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

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 2030, to request to renew the lease, purchase the facility or assist the lessor in marketing it for resale.

This agreement includes a residual value guarantee with a maximum potential future exposure of $ 404 million at March 31, 2026.

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

These leases have remaining terms of one to ten years .

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See Note 6—Investments, Loans and Long-Term Receivables, for additional information regarding Dakota Access and the CECU.

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

At March 31, 2026, 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 $ 53 million.

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

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

At March 31, 2026, and December 31, 2025, the carrying amount of recorded indemnifications was $ 52 million and $ 53 million, respectively.

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

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

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

At March 31, 2026, and December 31, 2025, environmental accruals for known contamination of $ 49 million and $ 50 million, respectively, were included in the carrying amount of the recorded indemnifications noted above.

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

For additional information about environmental liabilities, see Note 12—Contingencies and Commitments.

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

At September 30, 2025, $ 143 million of the sold accounts receivable remained uncollected, which represents our maximum potential future exposure under the guarantee associated with the Receivables Securitization Facility.

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

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

At March 31, 2026, $ 240 million of the sold accounts receivable remained uncollected, which represents our maximum potential future exposure under the guarantee associated with the Receivables Securitization Facility.

See Note 9—Debt, for information regarding the guarantee under our Receivables Securitization Facility.

Indemnification and Release Agreement

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

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

At March 31, 2026, our total environmental accruals were $ 487 million, compared with $ 506 million at December 31, 2025.

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

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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.

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.

From the date of final judgment, post-judgment interest of 10 % is accruing, which is included within the “Selling, general and administrative expenses” line on our consolidated statement of income and reported in the M&S segment.

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

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

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

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

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.

Phillips 66 Company intends to file its opening appellate brief in accordance with the applicable appellate deadlines and any extensions thereto.

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.

The Propel Court heard argument on the motions on February 10, 2026, and took the motions under submission.

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

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

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

The accrued amounts totaling $ 887 million and $ 867 million as of March 31, 2026 and December 31, 2025, 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 appeal s process.

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

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

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.

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

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

At March 31, 2026, we had performance obligations secured by letters of credit and bank guarantees of $ 592 million related to various purchase and other commitments incident to the ordinary conduct of business.

Note 13— Derivatives and Financial Instruments

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Gains and losses from derivative contracts held for trading not directly related to our physical business are reported net 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.

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

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

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Millions of Dollars

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

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

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Total $ 26,102 ( 27,524 ) 1,497 75 2,804 ( 2,711 ) 20 113

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

At March 31, 2026, and December 31, 2025, there was no material cash collateral received or paid that was not offset on our consolidated balance sheet.

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

Millions of Dollars

Three Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

Three Months Ended March 31

Sales and other operating revenues $ ( 1,536 ) ( 65 )

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Purchased crude oil and products ( 1,216 ) ( 176 )

Net gain from commodity derivative activity $ 65 499 95 176

Net loss from commodity derivative activity $ ( 2,646 ) ( 227 )

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

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

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

The percentage of our derivative contract volumes expiring within the next 12 months was more than 90 % at March 31, 2026, and December 31, 2025.

Open Position

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

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

The aggregate fair values of all derivative instruments with such credit-risk-related contingent features that were in a liability position were immaterial at March 31, 2026, and December 31, 2025.

Note 14— Fair Value Measurements

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

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

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.

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Millions of Dollars

September 30, 2025

March 31, 2026

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

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Physical forward contracts — 602 2 604 ( 3 ) — — 601

Foreign currency derivative — 74 — 74 — — — 74

Floating-rate debt — 7,916 — 7,916 N/A N/A — 7,916

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

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

See Note 13—Derivatives and Financial Instruments, for information regarding where the assets and liabilities related to our commodity derivatives are recorded on our consolidated balance sheet.

Nonrecurring Fair Value Measurements

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 $ 2,771 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.

The fair value of the previously held equity interest in WRB was determined using a market approach.

These valuations resulted in Level 3 nonrecurring fair value measurements.

See Note 2—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 $ 2,216 million.

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

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

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

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See Note 2—Business Combinations for additional information on the transaction.

Equity Investments and PP&E Impairments

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

Fair value was determined using a market approach.

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

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

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

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

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

These valuations resulted in Level 3 nonrecurring fair value measurements.

See Note 9—Impairments, for additional information regarding before-tax impairments recorded in 2024.

Note 15— Pension and Postretirement Plans

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

The components of net periodic benefit cost for the three months ended March 31, 2026 and 2025, were as follows:

Millions of Dollars

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Components of Net Periodic Benefit Cost

Three Months Ended September 30

Service cost $ 31 3 29 3 1 1

Interest cost 32 8 29 8 1 2

Expected return on plan assets ( 38 ) ( 11 ) ( 38 ) ( 11 ) — —

Amortization of net actuarial loss (gain) 4 — 3 — ( 1 ) ( 2 )

Settlements 4 — — — — —

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

Nine Months Ended September 30

Three Months Ended March 31

Service cost $ 34 2 31 3 — —

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

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

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

During the three months ended March 31, 2026, we contributed $ 10 million to our U.S.

pension and other postretirement benefit plan.

We currently expect to make additional contributions of approximately $ 190 million to our U.S.

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

Other comprehensive income before reclassifications 3 241 — 244

Other comprehensive income (loss) before reclassifications 2 ( 69 ) — ( 67 )

Amounts reclassified from accumulated other

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Hedging — — — —

Net current period other comprehensive income 15 229 — 244

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

Net current period other comprehensive income (loss) 5 ( 69 ) — ( 64 )

March 31, 2026 $ ( 108 ) ( 118 ) ( 5 ) ( 231 )

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

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Net current period other comprehensive income 6 88 — 94

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

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

* Included within the computation of net periodic benefit cost.

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Millions of Dollars

Three Months Ended September 30 Nine Months Ended September 30

2025 2024 2025 2024

Non-cash investing activities

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

Three Months Ended March 31

Non-cash financing activities

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

Reduction in borrowings under Receivables Securitization Facility $ 264 —

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Millions of Dollars

Three Months Ended

September 30 Nine Months Ended

2025 2024 2025 2024

Operating revenues and other income (a) $ 1,040 1,119 3,150 3,440

Purchases (b) 4,288 5,163 12,408 15,582

Three Months Ended March 31

Operating revenues and other income (a)(d) $ 1,521 1,036

Purchases (b)(d) 563 4,010

Operating expenses and selling, general and administrative expenses (c) 71 74

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

JET Management Holding is a newly formed entity, established in December 2025, in which we hold a 35 % non-operating equity interest.

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 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 2—Business Combinations for additional information.

Note 19— Segment Disclosures and Related Information

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.

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

Corporate and Other includes general corporate overhead, interest income, interest expense, our investment in research of new technologies, our investment in NOVONIX and various other corporate activities.

Corporate and Other includes general corporate overhead, interest income, interest expense, our investment in research of new technologies, business transformation restructuring costs, our investment in NOVONIX, and various other corporate activities.

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

Effective in the first quarter of 2026, activities associated with the decommissioning and redevelopment of our idled Los Angeles Refinery site are included in Corporate and Other.

Intersegment sales are at prices that we believe approximate market.

Through our implementation of ASU No.

2023-07, “Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures,” we are including additional disclosures regarding significant segment expenses regularly provided to our chief operating decision maker (CODM), who is our Chief Executive Officer.

Our chief operating decision maker (CODM), is our Chief Executive Officer.

The measure of segment profit or loss reviewed by our CODM is “income (loss) before income taxes.” The CODM uses segment income (loss) before income taxes to allocate resources to each segment predominantly in the annual budgeting and forecasting process.

The CODM compares budget-to-actual segment income (loss) before income taxes on a monthly and quarterly basis and considers trend analyses as well as other market factors when making decisions about allocating capital and personnel to the segments.

The significant expenses regularly provided to our CODM are provided below.

The measure of segment assets reported on our consolidated balance sheet reviewed by our CODM is “Total Assets.”

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Millions of Dollars

Three Months Ended September 30, 2025

Three Months Ended March 31, 2026

Operating Segments

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Equity in earnings of affiliates 103 114 — 35 — — — 252

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

Other income 20 — 1 ( 6 ) 53 48 — 116

Total Revenues and Other Income 5,180 176 19,370 22,634 1,664 61 ( 14,106 ) 34,979

Costs and Expenses

Purchased crude oil and products 3,578 — 17,443 21,743 1,531 1 ( 14,077 ) 30,219

Operating expenses* 501 2 909 19 84 6 ( 29 ) 1,492

Selling, general and administrative expenses* 58 ( 2 ) 40 584 19 93 — 792

Depreciation and amortization 278 — 444 23 25 56 — 826

Impairments — — 951 — — — — 951

Taxes other than income taxes 66 — 90 8 52 5 — 221

Interest and debt expense — — — — — 259 — 259

Other segment items **

2 — 11 6 ( 4 ) 5 — 20

Total Costs and Expenses 4,483 — 19,888 22,383 1,707 425 ( 14,106 ) 34,780

Income (loss) before income taxes $ 697 176 ( 518 ) 251 ( 43 ) ( 364 ) — 199

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

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

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

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

Millions of Dollars

Three Months Ended September 30, 2024

Operating Segments

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

Revenues and Other Income

Third-party sales and other operating revenues $ 3,799 — 8,792 22,379 548 10 — 35,528

Intercompany revenues 633 — 12,207 538 795 2 ( 14,175 ) —

Total sales and other operating revenues 4,432 — 20,999 22,917 1,343 12 ( 14,175 ) 35,528

Equity in earnings (losses) of affiliates 134 339 ( 12 ) 89 ( 1 ) — — 549

Net gain (loss) on dispositions 10 — ( 8 ) — — — — 2

Other income 3 — 8 18 2 54 ( 1 ) 84

Total Revenues and Other Income 4,579 339 20,987 23,024 1,344 66 ( 14,176 ) 36,163

Costs and Expenses

Purchased crude oil and products 3,076 — 19,787 22,041 1,439 — ( 14,149 ) 32,194

Operating expenses* 484 — 921 18 100 3 ( 27 ) 1,499

Selling, general and administrative expenses* 52 ( 3 ) 60 940 18 127 — 1,194

Depreciation and amortization 233 — 230 32 23 25 — 543

Impairments 28 — — 1 — — — 29

Taxes other than income taxes 59 — 100 16 ( 131 ) 9 — 53

Interest and debt expense — — — — — 229 — 229

Other segment items **

3 — ( 3 ) ( 2 ) 11 — — 9

Total Costs and Expenses 3,935 ( 3 ) 21,095 23,046 1,460 393 ( 14,176 ) 35,750

Income (loss) before income taxes $ 644 342 ( 108 ) ( 22 ) ( 116 ) ( 327 ) — 413

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

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

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

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

Millions of Dollars

Nine Months Ended September 30, 2025

Operating Segments

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

Revenues and Other Income

Third-party sales and other operating revenues $ 13,828 — 20,065 62,072 2,274 29 — 98,268

Intercompany revenues 1,761 — 33,839 1,574 2,460 8 ( 39,642 ) —

Total sales and other operating revenues 15,589 — 53,904 63,646 4,734 37 ( 39,642 ) 98,268

Equity in earnings (losses) of affiliates 301 309 ( 76 ) 110 ( 1 ) — — 643

Net gain on dispositions 6 — — — — — — 6

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Other segment items** 2 — 15 2 ( 2 ) 5 — 22

5 — ( 4 ) 4 8 14 — 27

Total Costs and Expenses 5,061 — 22,352 20,458 1,662 488 ( 17,279 ) 32,742

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Millions of Dollars

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Operating Segments

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

Net gain (loss) on dispositions 248 — ( 8 ) ( 1 ) — — — 239

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

Other income 10 — 3 6 19 18 — 56

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Other segment items** 2 — ( 2 ) ( 1 ) 4 3 — 6

9 — 6 7 10 4 — 36

Total Costs and Expenses 4,896 — 16,710 19,419 1,712 406 ( 12,065 ) 31,078

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

Three Months Ended September 30, 2025

Interest Income $ — — — — — 34 34

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

Three Months Ended September 30, 2024

Interest Income $ — — — — — 38 38

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

Nine Months Ended September 30, 2025

Three Months Ended March 31, 2026

Interest Income $ — — — — — 31 31

Capital Expenditures and Investments 343 — 210 9 10 10 582

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Interest Income $ — — — — — 34 34

Capital Expenditures and Investments 216 — 176 15 9 7 423

* Excludes Acquisitions, net of cash acquired.

Millions of Dollars

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

As of September 30, 2025

As of March 31, 2026

Investments In and Advances to Affiliates $ 2,097 8,018 70 1,293 15 3 11,496

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Note 20— Income Taxes

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

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

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

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

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

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

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

Our effective income tax rate for the three months ended March 31, 2026, was 16 %, compared to 19 % for the corresponding period of 2025.

The decrease in our effective rate for the three months ended March 31, 2026, was primarily attributable to the impact of tax benefits from the vesting of share-based compensation awards and state income taxes on lower income before income taxes.

The effective tax rate for the three months ended March 31, 2026, varied from the U.S.

federal statutory income tax rate primarily due to tax benefits from the vesting of share-based compensation awards and state income taxes.

Note 21— DCP Midstream Class A Segment

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Accounts receivable $ 390 530

Net properties, plants and equipment 9,128 8,861

Investments and long-term receivables 696 705

Net properties, plants and equipment 9,363 9,211

Accounts payable 697 785

Short-term debt 4 532

Long-term debt 2,904 2,903

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

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

Note 23— Assets Held for Sale

On May 15, 2025, we entered into a definitive agreement to divest 65 % of our equity interest in our Germany and Austria retail marketing business (Germany and Austria Marketing) for expected cash proceeds of approximately $ 1.6 billion ( 1.5 billion Euros), subject to purchase price adjustments for working capital and certain long-term liabilities on the closing date.

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

We expect to close this transaction in the fourth quarter of 2025, subject to customary closing conditions.

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

As of September 30, 2025, Germany and Austria Marketing has a net carrying value of approximately $ 175 million.

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

Millions of Dollars

Assets Held for Sale:

September 30, 2025

Cash and cash equivalents $ 105

Accounts and notes receivable 328

Accounts and notes receivable—related parties 7

Inventories 73

Prepaid expenses and other current assets 3

Net properties, plant and equipment 438

Intangibles 93

Other assets 406

Total assets classified as held for sale 1,594

Liabilities Held for Sale:

Accounts payable 636

Accrued income and other taxes 89

Employee benefit obligations, current 6

Other accruals 75

Asset retirement obligations and accrued environmental costs 127

Deferred income taxes 22

Employee benefit obligations, non-current 127

Other liabilities and deferred credits 337

Total liabilities classified as held for sale 1,419

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

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

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

These foreign currency forward contracts are presented within the “Net gain on dispositions” line item on our consolidated statement of income and are reported in our M&S segment.

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

What changed 10-Q

Item 1. Financial Statements