Phillips 66 (PSX) · Material Event (8-K) SEC Filing

EX-99.1 2 psx-2026630_ex991.htm EX-99.1 DocumentExhibit 99.1 Reported second-quarter earnings of $3.8 billion or $9.55 per share adjusted earnings of $3.8 billion or $9.41 per share Decreased total debt by $6.6 billion to $20.6 billion net debt reduced to $16.5 billion Achieved record NGL fractionation volumes and LPG export volumes Delivered strong Refining utilization of 96% and clean product yield of 86% Earned industry recognition for 2025 exemplary safety performance in Midstream, Refining and ChemicalsHOUSTON, August 5, 2026 Phillips 66 (NYSE PSX) announced second-quarter earnings. Second quarter results reflect the strength of our operations and value of our integrated portfolio, said Mark Lashier, chairman and CEO of Phillips 66. We remain committed to our strategic priorities and continuous improvement. Our focus on operating excellence, coupled with our commercial footprint, enables us to reliably supply energy products across the United States and to global consumers. Our capital allocation framework is an integral component of the investment opportunity of Phillips 66. We remain committed to creating value for our stakeholders through disciplined capital investment, dividends, share repurchases and debt reduction. Business Highlights Achieved full production at Dos Picos II, a 220 million cubic feet per day ( MMCFD ) gas plant in the Permian Basin. Announced the construction of the 300 MMCFD Zeus Gas Plant in the Permian Basin and a 100 thousand barrels per day ( MBD ) Coastal Bend NGL Fractionator in Corpus Christi. Completed successful turnarounds at the Wood River and Humber refineries. Chevron Phillips Chemical Company LLC ( CPChem ) progressed the Golden Triangle Polymers Project in Orange, Texas, and Ras Laffan Polymers Project in Qatar, with full operations expected in 2027.Financial Results Summary(in millions of dollars, except as indicated) 2Q 2026 1Q 2026 Earnings $ 3,847 207 Adjusted Earnings1 3,788 200 Adjusted EBITDA1 5,891 1,230 Earnings Per Share Earnings Per Share - Diluted 9.55 0.51 Adjusted Earnings Per Share - Diluted1 9.41 0.49 Cash Flow from (Used in) Operations 7,259 (2,264) Cash Flow from Operations, Excluding Working Capital1 4,317 699 Capital Expenditures Investments 726 582 Acquisitions, Net of Cash Acquired 113 66 Proceeds from Asset Dispositions 64 7 Return of Capital to Shareholders 887 778 Repurchases of Common stock 379 269 Dividends paid on Common stock 508 509 Cash and Cash Equivalents 4,099 5,150 Debt 20,565 27,124 Net Debt1 16,466 21,974 Debt-to-Capital Ratio 39% 48% Net Debt-to-Capital Ratio1 33% 43% 1 Represents a non-GAAP financial measure. Reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure are included within this release. Segment Financial and Operating Highlights (Millions of dollars, except as indicated) 2Q 2026 1Q 2026 Change Earnings (Loss)1 $ 3,847 207 3,640 Midstream 785 591 194 Chemicals 404 114 290 Refining 3,062 208 2,854 Marketing and Specialties 583 (161) 744 Renewable Fuels 544 (41) 585 Corporate and Other (407) (451) 44 Income tax expense (1,092) (41) (1,051) Noncontrolling interests (32) (12) (20) Adjusted Earnings (Loss)1,2 $ 3,788 200 3,588 Midstream 785 591 194 Chemicals 404 85 319 Refining 3,086 208 2,878 Marketing and Specialties 514 (141) 655 Renewable Fuels 544 (41) 585 Corporate and Other (407) (451) 44 Income tax expense (1,106) (39) (1,067) Noncontrolling interests (32) (12) (20) Adjusted EBITDA2 $ 5,891 1,230 4,661 Midstream 1,046 860 186 Chemicals 528 212 316 Refining 3,307 423 2,884 Marketing and Specialties 580 (86) 666 Renewable Fuels 568 (18) 586 Corporate and Other (138) (161) 23 Operating Highlights NGL Pipeline Throughput - Y-Grade to Market (MBD)3 943 930 13 NGL Fractionated (MBD) 1,020 980 40 Chemicals Global O P Capacity Utilization 91% 94% (3%) Refining Turnaround Expense 123 178 (55) Realized Margin ($ BBL)2 24.08 10.11 13.97 Crude Capacity Utilization 96% 95% 1% Clean Product Yield 86% 87% (1%) Renewable Fuels Produced (MBD) 53 40 13 1 Segment reporting is pre-tax. 2 Represents a non-GAAP financial measure. Reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure are included within this release. 3 Represents volumes delivered to fractionation hubs, including Mont Belvieu, Sweeny and Conway. Includes 100% of DCP Midstream Class A Segment and Phillips 66's direct interest in DCP Sand Hills Pipeline, LLC and DCP Southern Hills Pipeline, LLC. Second-Quarter 2026 Financial ResultsReported earnings were $3.8 billion for the second quarter of 2026 versus $207 million in the first quarter of 2026. Second-quarter earnings included pre-tax special item adjustments of $69 million in the Marketing and Specialties segment and ($24) million in the Refining segment. Adjusted earnings for the second quarter were $3.8 billion versus adjusted earnings of $200 million in the first quarter of 2026. Midstream pre-tax income increased compared with the first quarter mainly due to higher margins, as well as higher volumes largely driven by the absence of last quarter s Winter Storm Fern impacts. Chemicals adjusted pre-tax income increased compared with the first quarter mainly due to higher margins. Refining adjusted pre-tax income increased compared with the first quarter mainly due to higher realized margins. Margins were primarily driven by an increase in market crack spreads and favorable mark-to-market impacts. Marketing and Specialties adjusted pre-tax income increased compared with the first quarter mainly due to higher global marketing margins and favorable mark-to-market impacts. Renewable Fuels pre-tax income increased compared with the first quarter mainly due to higher regulatory credits from higher pricing and renewable fuels production, as well as favorable mark-to-market impacts. Corporate and Other pre-tax loss decreased compared with the first quarter primarily due to lower net interest expense and employee-related costs.As of June 30, 2026, the company had $4.1 billion of cash and cash equivalents and $6.4 billion of committed capacity available under credit facilities.Investor WebcastMembers of Phillips 66 executive management will host a webcast at noon ET to provide an update on the company s strategic initiatives and discuss the company s second-quarter performance. To access the webcast and view related presentation materials, go to phillips66.com investors and click on Events Presentations. For detailed supplemental information, go to phillips66.com supplemental. About Phillips 66Phillips 66 (NYSE PSX) is a leading integrated downstream energy provider that manufactures, transports and markets products that drive the global economy. The company s portfolio includes Midstream, Chemicals, Refining, Marketing and Specialties, and Renewable Fuels businesses. Headquartered in Houston, Texas, Phillips 66 has employees around the globe who are committed to safely and reliably providing energy and improving lives while pursuing a lower-carbon future. For more information, visit phillips66.com or follow Phillips66Co on LinkedIn.- # # # - Investor Relations investorrelations p66.com Media Relations phillips66media p66.com Use of Non-GAAP Financial Information This news release includes the terms adjusted earnings (loss), adjusted pre-tax income (loss), adjusted EBITDA, adjusted earnings per share, adjusted controllable cost, cash from (used in) operations, excluding working capital, realized refining margin, net debt, and net debt-to-capital ratio. These are non-GAAP financial measures that are included to help facilitate comparisons of operating performance across periods, to help facilitate comparisons with other companies in our industry and to help facilitate determination of enterprise value. Where applicable, these measures exclude items that do not reflect the core operating results of our businesses in the current period or other adjustments to reflect how management analyzes results. Reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure are included within this release. References in the release to earnings refer to net income attributable to Phillips 66. References in the release to shareholder distributions refer to the sum of dividends paid to Phillips 66 stockholders and proceeds used by Phillips 66 to repurchase shares of its common stock.Basis of Presentation Phillips 66 and Refining results included herein through September 30, 2025, include our proportional share of WRB Refining LP equity earnings and beginning October 1, 2025, includes 100% of Borger Refinery and Wood River Refinery consolidated due to the acquisition of the remaining 50% of WRB.Cautionary Statement for the Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 This news release contains forward-looking statements within the meaning of the federal securities laws relating to Phillips 66 s operations, strategy and performance. Words such as anticipated, estimated, expected, planned, scheduled, targeted, believe, continue, intend, will, would, objective, goal, project, efforts, strategies and similar expressions that convey the prospective nature of events or outcomes generally indicate forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements included in this news release are based on management s expectations, estimates and projections as of the date they are made. These statements are not guarantees of future events or performance, and you should not unduly rely on them as they involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Factors that could cause actual results or events to differ materially from those described in the forward-looking statements include changes in governmental policies relating to NGL, crude oil, natural gas, refined petroleum or renewable fuels products pricing, regulation or taxation, including exports our ability to timely obtain or maintain permits, including those necessary for capital projects fluctuations in NGL, crude oil, refined petroleum products, renewable fuels, renewable feedstocks and natural gas prices, and refined product, marketing and petrochemical margins the effects of any widespread public health crisis and its negative impact on commercial activity and demand for our products changes to government policies relating to renewable fuels and greenhouse gas emissions that adversely affect programs including the renewable fuel standards program, low carbon fuel standards and tax credits for biofuels liability resulting from pending or future litigation or other legal proceedings liability for remedial actions, including removal and reclamation obligations under environmental regulations unexpected changes in costs or technical requirements for constructing, modifying or operating our facilities or transporting our products our ability to successfully complete, or any material delay in the completion of, any asset disposition, acquisition, shutdown or conversion that we may pursue, including receipt of any necessary regulatory approvals or permits related thereto unexpected technological or commercial difficulties in manufacturing, refining or transporting our products, including chemical products the level and success of producers drilling plans and the amount and quality of production volumes around our midstream assets risks and uncertainties with respect to the actions of actual or potential competitive suppliers and transporters of refined petroleum products, renewable fuels or specialty products changes in the cost or availability of adequate and reliable transportation for our NGL, crude oil, natural gas and refined petroleum and renewable fuels products failure to complete definitive agreements and feasibility studies for, and to complete construction of, announced and future capital projects on time or within budget our ability to comply with governmental regulations or make capital expenditures to maintain compliance limited access to capital or significantly higher cost of capital related to our credit profile or illiquidity or uncertainty in the domestic or international financial markets damage to our facilities due to accidents, weather and climate events, civil unrest, insurrections, political events, terrorism or cyberattacks domestic and international economic and political developments including war and armed hostilities, instability in the financial services and banking sector, excess inflation, expropriation of assets and changes in fiscal policy, including interest rates international monetary conditions and exchange controls changes in estimates or projections used to assess fair value of intangible assets, goodwill and properties, plants and equipment and or strategic decisions or other developments with respect to our asset portfolio that cause impairment charges substantial investments required, or reduced demand for products, as a result of existing or future environmental rules and regulations, including greenhouse gas emissions reductions and reduced consumer demand for refined petroleum products changes in tax, environmental and other laws and regulations (including alternative energy mandates) applicable to our business political and societal concerns about climate change that could result in changes to our business or increase expenditures, including litigation-related expenses the operation, financing and distribution decisions of our joint ventures that we do not control the potential impact of activist shareholder actions or tactics and other economic, business, competitive and or regulatory factors affecting Phillips 66 s businesses generally as set forth in our filings with the Securities and Exchange Commission. Phillips 66 is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. Earnings (Loss) Millions of Dollars 2026 2025 2Q 1Q Jun YTD 2Q Jun YTD Midstream $ 785 591 1,376 731 1,482 Chemicals 404 114 518 20 133 Refining 3,062 208 3,270 359 (578) Marketing and Specialties 583 (161) 422 571 1,853 Renewable Fuels 544 (41) 503 (133) (318) Corporate and Other (407) (451) (858) (428) (804) Pre-Tax Income 4,971 260 5,231 1,120 1,768 Less Income tax expense 1,092 41 1,133 212 334 Less Noncontrolling interests 32 12 44 31 70 Phillips 66 $ 3,847 207 4,054 877 1,364 Adjusted Earnings (Loss) Millions of Dollars 2026 2025 2Q 1Q Jun YTD 2Q Jun YTD Midstream $ 785 591 1,376 731 1,414 Chemicals 404 85 489 20 133 Refining 3,086 208 3,294 392 (545) Marketing and Specialties 514 (141) 373 660 925 Renewable Fuels 544 (41) 503 (133) (318) Corporate and Other (407) (451) (858) (383) (738) Pre-Tax Income (Loss) 4,926 251 5,177 1,287 871 Less Income tax expense 1,106 39 1,145 283 205 Less Noncontrolling interests 32 12 44 31 61 Phillips 66 $ 3,788 200 3,988 973 605 Page 1Exhibit 99.1 Millions of Dollars Except as Indicated 2026 2025 2Q 1Q Jun YTD 2Q Jun YTD Reconciliation of Consolidated Earnings to Adjusted Earnings Consolidated Earnings $ 3,847 207 4,054 877 1,364 Pre-tax adjustments Impairments 21 Net (gain) loss on asset dispositions1 (110) (110) 89 (996) Lower-of-cost-or-market inventory adjustments (29) (29) Legal accrual2 65 20 85 33 33 Professional advisory fees 45 45 Tax impact of adjustments3 (14) 2 (12) (40) 160 Other tax impacts (31) (31) Noncontrolling interests 9 Adjusted earnings $ 3,788 200 3,988 973 605 Earnings per share of common stock (dollars) $ 9.55 0.51 10.05 2.15 3.32 Adjusted earnings per share of common stock (dollars) $ 9.41 0.49 9.88 2.38 1.47 Adjusted weighted-average diluted common shares outstanding (thousands) 402,618 403,273 403,472 407,934 409,012 Reconciliation of Segment Pre-Tax Income (Loss) to Adjusted Pre-Tax Income (Loss) Midstream Pre-Tax Income $ 785 591 1,376 731 1,482 Pre-tax adjustments Net gain on asset dispositions (68) Adjusted pre-tax income $ 785 591 1,376 731 1,414 Chemicals Pre-Tax Income $ 404 114 518 20 133 Pre-tax adjustments Lower-of-cost-or-market inventory adjustments (29) (29) Adjusted pre-tax income $ 404 85 489 20 133 Refining Pre-Tax Income (Loss) $ 3,062 208 3,270 359 (578) Pre-tax adjustments Legal accrual 24 24 33 33 Adjusted pre-tax income (loss) $ 3,086 208 3,294 392 (545) Marketing and Specialties Pre-Tax Income (Loss) $ 583 (161) 422 571 1,853 Pre-tax adjustments Net (gain) loss on asset dispositions1 (110) (110) 89 (928) Legal accrual2 41 20 61 Adjusted pre-tax income (loss) $ 514 (141) 373 660 925 Page 2Exhibit 99.1 Renewable Fuels Pre-Tax Income (Loss) $ 544 (41) 503 (133) (318) Pre-tax adjustments None Adjusted pre-tax income (loss) $ 544 (41) 503 (133) (318) Corporate and Other Pre-Tax Loss $ (407) (451) (858) (428) (804) Pre-tax adjustments Impairments 21 Professional advisory fees 45 45 Adjusted pre-tax loss $ (407) (451) (858) (383) (738) 1 Net gain on dispositions in the second quarter of 2026 relates to the post-closing adjustments from the December 2025 sale of 65% of our interest in our Germany and Austria retail marketing business. 2 Legal accrual primarily related to ongoing litigation with Propel Fuels, Inc. 3 We generally tax effect taxable U.S.-based special items using a combined federal and state annual statutory income tax rate of approximately 24%. Taxable special items attributable to foreign locations likewise generally use a local statutory income tax rate, but certain transactions may be partially exempt, which could result in a lower overall effective tax rate on these items. Nontaxable events reflect zero income tax. These events include, but are not limited to, most goodwill impairments, transactions legislatively exempt from income tax, transactions related to entities for which we have made an assertion that the undistributed earnings are permanently reinvested, or transactions occurring in jurisdictions with a valuation allowance. Page 3Exhibit 99.1 Millions of Dollars Except as Indicated 2026 2Q 1Q Reconciliation of Consolidated Net Income to Adjusted EBITDA Attributable to Phillips 66 Net Income $ 3,879 219 Plus Income tax expense 1,092 41 Net interest expense 233 255 Depreciation and amortization 585 558 Phillips 66 EBITDA $ 5,789 1,073 Special Item Adjustments (pre-tax) Lower-of-cost-or-market inventory adjustments (29) Net gain on asset dispositions (110) Legal accrual 65 20 Total Special Item Adjustments (pre-tax) (45) (9) Change in Fair Value of NOVONIX Investment 6 9 Phillips 66 EBITDA, Adjusted for Special Items and Change in Fair Value of NOVONIX Investment $ 5,750 1,073 Other Adjustments (pre-tax) Proportional share of selected equity affiliates income taxes 14 19 Proportional share of selected equity affiliates net interest 11 11 Proportional share of selected equity affiliates depreciation and amortization 168 161 Adjusted EBITDA attributable to noncontrolling interests (52) (34) Phillips 66 Adjusted EBITDA $ 5,891 1,230 Reconciliation of Segment Income before Income Taxes to Adjusted EBITDA Midstream Income before income taxes $ 785 591 Plus Depreciation and amortization 284 274 Midstream EBITDA $ 1,069 865 Special Item Adjustments (pre-tax) None Midstream EBITDA, Adjusted for Special Items $ 1,069 865 Other Adjustments (pre-tax) Proportional share of selected equity affiliates income taxes 2 3 Proportional share of selected equity affiliates net interest 3 3 Proportional share of selected equity affiliates depreciation and amortization 24 23 Adjusted EBITDA attributable to noncontrolling interests (52) (34) Midstream Adjusted EBITDA $ 1,046 860 Page 4Exhibit 99.1 Chemicals Income before income taxes $ 404 114 Plus None Chemicals EBITDA $ 404 114 Special Item Adjustments (pre-tax) Lower-of-cost-or-market inventory adjustment (29) Chemicals EBITDA, Adjusted for Special Items $ 404 85 Other Adjustments (pre-tax) Proportional share of selected equity affiliates income taxes 2 13 Proportional share of selected equity affiliates net interest (1) Proportional share of selected equity affiliates depreciation and amortization 122 115 Chemicals Adjusted EBITDA $ 528 212 Refining Income before income taxes $ 3,062 208 Plus Depreciation and amortization 221 215 Refining EBITDA $ 3,283 423 Special Item Adjustments (pre-tax) Legal accrual 24 Refining EBITDA, Adjusted for Special Items $ 3,307 423 Marketing and Specialties Income (loss) before income taxes $ 583 (161) Plus Depreciation and amortization 26 20 Marketing and Specialties EBITDA $ 609 (141) Special Item Adjustments (pre-tax) Legal accrual 41 20 Net gain on asset dispositions (110) Marketing and Specialties EBITDA, Adjusted for Special Items $ 540 (121) Other Adjustments (pre-tax) Proportional share of selected equity affiliates income taxes 10 3 Proportional share of selected equity affiliates net interest 8 9 Proportional share of selected equity affiliates depreciation and amortization 22 23 Marketing and Specialties Adjusted EBITDA $ 580 (86) Renewable Fuels Income (loss) before income taxes $ 544 (41) Plus Depreciation and amortization 24 23 Renewable Fuels EBITDA $ 568 (18) Special Item Adjustments (pre-tax) None Renewable Fuels EBITDA, Adjusted for Special Items $ 568 (18) Corporate and Other Loss before income taxes $ (407) (451) Plus Net interest expense 233 255 Depreciation and amortization 30 26 Corporate and Other EBITDA $ (144) (170) Page 5Exhibit 99.1 Special Item Adjustments (pre-tax) None Total Special Item Adjustments (pre-tax) Change in Fair Value of NOVONIX Investment 6 9 Corporate EBITDA, Adjusted for Special Items and Change in Fair Value of NOVONIX Investment $ (138) (161) Millions of Dollars Except as Indicated June 30, 2026 March 31, 2026 Debt-to-Capital Ratio Total Debt $ 20,565 27,124 Total Equity 32,703 29,681 Debt-to-Capital Ratio 39% 48% Cash and Cash Equivalents 4,099 5,150 Net Debt-to-Capital Ratio 33% 43% Millions of Dollars June 30, 2026 March 31, 2026 Net Debt Total Debt $ 20,565 27,124 Less Cash and Cash Equivalents 4,099 5,150 Net Debt $ 16,466 $ 21,974 Page 6Exhibit 99.1 Millions of Dollars Except as Indicated 2026 2Q 1Q Reconciliation of Refining Income Before Income Taxes to Realized Refining Margins Income before income taxes $ 3,062 208 Plus Taxes other than income taxes 88 106 Depreciation, amortization and impairments 222 217 Selling, general and administrative expenses 25 52 Operating expenses 1,144 1,229 Equity in losses of affiliates 1 Other segment income, net (63) (11) Proportional share of refining gross margins contributed by equity affiliates 20 26 Special items None Realized refining margins $ 4,499 1,827 Total processed inputs (thousands of barrels) 186,860 180,801 Income before income taxes (dollars per barrel)1 $ 16.39 1.15 Realized refining margins (dollars per barrel)2 $ 24.08 10.11 1 Income before income taxes divided by total processed inputs. 2 Realized refining margins per barrel, as presented, are calculated using the underlying realized refining margin amounts, in dollars, divided by total processed inputs, in barrels. As such, recalculated per barrel amounts using the rounded margins and barrels presented may differ from the presented per barrel amounts. Page 7