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Phillips 66 Stock Price: Quote, Forecast, Splits & News (PSX)

Perplexity Finance

Company Profile

Phillips 66 Price & Performance (PSX)

Stock Performance

Updated Apr 25, 8:00 PM UTC

Phillips 66

$103.97USD

-$0.72 (-0.69%)

After Hours

-$0.96 (-0.92%)

Open

$103.28

Market Cap

$42.36B

Year High

$152.19

High

$104.06

P/E Ratio

23.4

Year Low

$91.01

Low

$101.54

Dividend Yield

4.42%

Volume

3.06M

Latest News

Earnings Miss and Maintenance Weigh Heavily on Phillips 66 Results
Apr 25, 2025
Phillips 66 reported a larger-than-expected first-quarter loss, citing reduced refining margins and extensive spring maintenance. The refining segment posted a $937 million loss, contrasting sharply with last year’s profit. Company shares dropped 1.4% after the announcement, reflecting industry-wide challenges from seasonal refinery downtime and rising turnaround expenses.12
Strategic Moves and Shareholder Returns Highlight Phillips 66’s Turbulent Quarter
Apr 2, 2025
Amid operational challenges, Phillips 66 returned $716 million to shareholders and increased its quarterly dividend. The company completed a major turnaround program and acquired EPIC NGL to boost Permian takeaway capacity. Despite these moves, quarterly losses were driven by depreciation and lower refining margins, while the firm works to reduce its above-target debt.34
Refinery Utilization Set to Rebound for Phillips 66 After Difficult Start to Year
today
After a tough first quarter marked by heavy losses and lower utilization, Phillips 66 plans to operate its refineries at about 90% capacity in Q2. Executives say the completion of major maintenance programs positions the company to benefit from improved margins as the year progresses, signaling cautious optimism.56

What's Happening

Peers

Earnings

Report Date

Apr 25, 2025

Reported Revenue

31.7B

Beat +0.09%

Avg 1d Change

3.08%

Report Period

Q1 2025

Reported EPS

-0.9

Miss -24.48%

Implied Move 1d

2.94%

Transcript

Your conference will begin in two minutes. Thank you for your patience. Welcome to the First Quarter twenty twenty five Phillips sixty six Earnings Conference Call. My name is Emily, and I'll be your operator for today's call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. Please note that this conference is being recorded. I will now turn the call over to Geoff Deetert, Vice President, Investor Relations. Jeff, you may begin.

10m 4s

Welcome to Phillips sixty six earnings conference call. Participants on today's call include Mark Lazier, Chairman and CEO Kevin Mitchell, CFO Don Baldridge, Midstream and Chemicals Rich Harvison, Refining and Brian Mandel, Marketing and Commercial. Today's presentation can be found on the Investor Relations section of the Phillips sixty six website. Along with supplemental financial and operating information. Slide two contains our safe harbor statement We will be making forward looking statements during today's call. Actual results may differ materially from today's comments. Factors that could cause actual results to differ are included here. As well as in our SEC filings. With that, I'll turn the call over to Mark. Thanks, Jeff. Welcome, everyone, to our first quarter earnings call.

10m 59s

During the quarter, we continued to execute on our transformational strategy and deliver returns to our shareholders. By staying focused on what we can control, we made important progress across our 2027 priorities. Improving refining operations, enhancing our NGL value chain, and executing on our growth opportunities. Underpinned by the strength of cash flow contributions from our midstream business, we returned $716,000,000 to shareholders this quarter. We did this in a challenged macro environment in refining renewables and chemicals. We also executed one of the largest spring turnaround programs in the history of Phillips sixty six. That impacted volumes, and margins. These important investments position us well for the future. While our results reflect the challenges of this environment, our ability to return significant capital to shareholders demonstrates the strength of our integrated business model. We remain focused on strategy execution disciplined capital allocation, and cash returns to shareholders. Slide four shows how we continue to improve refining operations through targeted low capital high return projects. These recent investments lead to greater feedstock flexibility and yield. Before I touch on some of these projects, want to highlight the success of our spring turnaround program, which was completed safely, on time and under budget.

12m 29s

Furthermore, our refineries not in turnaround this quarter ran well. These accomplishments would not have been possible without our employees unwavering dedication to operating excellence and safety. Thank you to the refining team. Well done. The bulk of the annual turnaround activity and associated costs are largely behind us, which you will see reflected in our guidance going forward. We are well positioned to capture upside in the market for the remainder of the year During this quarter's turnarounds, we achieved meaningful project at the Sweeny refinery we removed constraints and enhanced crude flexibility. We now have an additional 40,000 barrels per day of heavy light crude switching capability. Depending on market conditions, we will run additional Permian barrels displacing imported heavy crudes. We expect this flexibility in a rapidly changing price environment will enhance long term margins at this strategic refinery. Also at our Bayway facility, we completed a project that increases our FCC native feedstock capabilities. Reducing the need for VGO imports. Both of these low capital and high return projects are enabling us to enhance market capture. We're committed to our refining business. We have a clear path to increase operational run time improve yields and reduce cost per barrel.

13m 53s

Moving to Slide five, midstream is critical to our integrated strategy. It's a key growth driver and creates ongoing value for shareholders. We've made disciplined investments to build out our integrated wellhead to market strategy.

14m 7s

A strategy that allows us to efficiently move products from the wellhead to high value end markets. This strategy provides significant stability to our financial results and adds material benefits to other segments. Our value chain creates optionality in product placement and supports reliable, long term cash generation. We acquired Epic NGL on April 1 which is immediately accretive and expands our takeaway capacity from the Permian. The acquired assets are highly integrated with the existing Phillips sixty six asset base and provide long term fee based earnings growth. This acquisition enhances our ability to offer producers unmatched flow assurance while expanding connectivity to end markets. We also continue to expand our natural gas gathering and processing footprint in the Permian Basin. Our Dos Pikos II expansion plant which was part of our Pinnacle acquisition strategy is expected to come online in the third quarter of twenty twenty five. Today, we're announcing the construction of another gas processing plant in the Permian. The Iron Mesa plant will serve Delaware and Midland Basin production and will be funded within our existing capital budget. The facility is expected to come online in the first quarter of twenty twenty seven. Both of these projects are great examples of our highly strategic and selective investments at low build multiples.

15m 32s

They contribute to our plan to organically grow midstream run rate adjusted EBITDA to $4,500,000,000 by 2027. At Phillips sixty six, 've embraced a culture of continuous improvement and have taken decisive actions to create long term value for our shareholders. Slide six shows some of the achievements over the past three years. We have divested more than $3,500,000,000 of non core assets at high multiples while making strategic acquisitions within midstream at attractive multiples to build a world class NGL value chain. In refining, we're improving competitiveness by optimizing our assets to align with long term demand trends. We've made operational improvements throughout the portfolio and we've rationalized our footprint with the sale of Alliance conversion of Rodeo and plan to cease operations and repurpose the land at Los Angeles. We have taken steps to on our transformational strategy and we will do more. We remain committed to maintaining safe and reliable operations investing in high return growth opportunities and capturing integration benefits. We will return over 50% of net operating cash flow to shareholders through share repurchases and a secure competitive and growing dividend. Demonstrating this commitment we recently announced a $05 per share increase our quarterly dividend.

16m 58s

Since our formation in 2012, the annual dividend has increased every year resulting in a significant 15% compounded annual growth rate. We have delivered over $14,000,000,000 to shareholders since July 2022, We will continue to create long term value for shareholders as we execute on our 2027 strategic priorities. Maintaining operational excellence, pursuing disciplined growth returning capital and ensuring financial strength. Now over to Kevin to cover the results for the quarter. Thank you, Mark.

17m 34s

First quarter reported earnings were $487,000,000 or $1.18 per share. The adjusted loss was $368,000,000 or $0.90 per share. Both the reported earnings and adjusted loss include the $240,000,000 pretax impact of accelerated depreciation due to our plan to cease operations at the Los Angeles refinery at the end of twenty twenty five. The adjusted loss excludes the $1,000,000,000 pre tax gain on disposition of our non operated interest in co op. Generated $187,000,000 of operating cash flow and returned $716,000,000 to shareholders including $247,000,000 of share repurchases. I will now cover the segment results on Slide eight. Total company adjusted loss increased $3.00 $7,000,000 compared with the prior quarter. Midstream results decreased mainly due to lower volumes because of the turnaround activity in refining. This was partly offset by the impact of higher commodity prices benefiting gathering and processing results. Also during the quarter, the Sweeny Hub had record fractionation volumes of 650,000 barrels per day. In chemicals, results increased mainly due to higher volumes and lower costs, driven by turnaround activity in the prior quarter. Lower refining results reflect the impact of lower volumes and higher costs driven by turnaround activity and higher utility prices. This is partly offset by increased realized margins from higher market cracks.

19m 12s

Marketing and Specialties results improved due to lower depreciation and higher margins in the international business. In Renewable Fuels, results decreased mainly due to the transition from blenders tax credits to production credits.

19m 26s

Inventory impacts and lower international results. Slide nine shows cash flow for the first quarter. Cash from operations, including working capital, was $187,000,000 We received $2,000,000,000 from the sales of the non operated equity interest in co op and the Gulf Coast Express pipeline. We paid down $1,300,000,000 of debt and returned $716,000,000 to shareholders through share repurchases and dividends. We funded $423,000,000 of capital spending. Our ending cash balance was $1,500,000,000 Looking ahead to the second quarter of twenty twenty five on slide 10. In both chemicals and refining, we expect utilization rate to be in the mid-90s. In refining, we expect turnaround expense to be between 65 and $75,000,000 We anticipate corporate and other costs to be between $340 and $360,000,000 Now we will move to Slide 11 and open the line for questions. After which Mark will wrap up the call.

20m 36s

Thank you. We will now begin the question and answer session. As we open the call for questions, as a courtesy to all If you wish to be removed from the queue, please press star then 2. If you are using a speakerphone, you may need to pick up a hand first before pressing the numbers. Our first question today comes from Doug Leggate with Wolfe Research. Please go ahead Doug, your line is open.

21m 16s

Well, thanks. Good morning or good afternoon, everybody. [indiscernible] obviously, there's been a lot of dialogue, lot of backwards and forwards between yourselves and and Elliot regarding the right structure for the business. I guess my question is, I had an opportunity to chat to you about this a month or so ago. And our understanding at least is you guys have looked at a lot of these proposals before and [indiscernible] decisions that are perhaps different wonder if you could share the extent of which you did look at some of these ideas that they're putting forward, for example, separating the midstream. And and kind of rationalize why you came to a different outcome I think everyone would probably like to hear your perspectives on that. I've got a quick follow-up, please.

22m 5s

Sure, Doug. I I I welcome that question. And I think when we're talking about strategic alternatives or the strategy that drives the company forward, it really is important to understand the mindset of our board. And we've got a strong board. We've got talented board members that have deep experience. Many of them have deep experience in refining and energy. And they have high expectations for us when it comes to preparing and delivering strategic alternatives for them. And they expect a very detailed, intelligent overview of all the options available. And they want to fully understand the risk and the unintended consequences of any strategic actions that we might recommend. In fact, they wanna understand the risks and unintended consequences of not making strategic actions as well. So it's very comprehensive, and it's not just some simple high level spreadsheet that they might rubber stamp. They are I would I would put them in the classification of brilliant. They ask tough questions and they they was deeply accountable. And my experience with the board really goes back to when I came back to Phillips sixty six in 02/2021, and I was asked to prepare strategic materials for our fall deep dive into strategy.

23m 20s

And what we did is we took the board through scenario planning. Because if you remember back in '21, all the rates was net zero, twenty fifty, And so we we span the whole spectrum from net zero twenty fifty to a scenario where the world realized that there was a strong need over the long term for hydrocarbon and we established milestones to track and this analysis informed our strategic alternatives that then we did a deep dive on with with the board members. And and we've reviewed all of those options and refreshed our views on those options in the subsequent years. And I would say every board meeting the board asks us strong questions around the strategy and the implementation of the strategy. What's changed? What's new? Should we move this way or that way? And we talked about our stock valuation. And the evolving market conditions and the strategic alternatives. And we do this every board And then in the fall, again, we'll take them into another deep dive to review what's changed since the prior year, what is our most recent view of where we stand in those in those scenarios. And and I'll tell you that one of the underlying principles of every discussion is that everything in our portfolio is for sale at the right price.

24m 33s

But the board expects us to understand the full consequences if we should dispose of an asset or or or spin out a part of our company that they wanna understand what's the impact on the remaining what's the impact on the remaining company, what are the unintended consequences Where are all the financial impacts?

24m 52s

And I'd say that some of the parts is a part of that discussion, but it's not always the total driver that that discussion. One thing that we've learned and I believe many of you observed this as well, is that really when you talk about the multiple a company realizes in the marketplace, it's really correlated strongly with earnings volatility. And that's why the midstream business has become such an important part of our business. It generates very steady earnings and we've grown those earnings quite quickly from right around $2,000,000,000 of EBITDA a year to $4,000,000,000 and increasing. And so, if there was a spin off opportunity for that business, I will tell you that our board would be the first ones to challenge us to take a look at that. And they have challenges to take a look at that. When you step back and look at our board, you know, the people that we have on our board and the two new new nominees that we have, amongst them, they've overseen more than $300,000,000,000 in major separation transactions during their careers. You know, this includes sales and spin offs. So Phillips sixty six itself was the result of a spin off.

25m 56s

So John Lowe, one of our key members has was involved in that. He's one of the architects of the spin off. You know, you've got the Dow DuPont three way break up into Dow DuPont. And and Cortiva. Our nominee, Howard Underleader, he was one of the architects of that and was right in the middle of all that. And the decision making there.

26m 13s

You look at, United Technologies.

26m 16s

That was a conglomerate that was was broken. It went through a three way breakup in Carrier, Otis and RTX, Greg Hayes, the architect of that. And Abbott Laboratories spin off into AbbVie, Glenn Tilton, was right in the middle of that as well. So I would say that few if any boards in this country have more experience in executing such transformational transactions than the Phillips sixty six board. They know how to do it. When it makes sense, and they're challenging us every step of the way to explain to them what makes sense and what doesn't make sense. And you know, and I mentioned the the the split up of United Technologies, a con conglomerate. That word's been used in the same sentence as Phillips sixty six. And the first time I heard that, I thought, well, I thought I knew what a conglomerate was, but I better look it up to be sure. When I looked it up, there was nothing there that resembled Phillips sixty six. We are a hydrocarbon transporter and processor. We gather and transport hydrocarbons from the oil fields or from imports and we move those to our transportation assets and we convert those materials into high value products that you use every day.

27m 22s

And whether it's the crude value chain or the NGL value chain, it's very synergistic and we're in the business of managing molecules, optimizing them every day. And if you look at what we have down at our 260,000 barrel per day refinery, five and fifty thousand barrel per day fractionation capacity. There's three ethane crackers on that site. Owned and operated by CPChem. We've got 37,000,000 barrels of capacity and 23 salt dome caverns at our Clemens Dome, and we've got direct access to Freeport export terminals. And we leverage that that infrastructure. We leverage it in an integrated way every day, moving the molecules where they can create the most value. And we've got a commercial organization that trades around that information every day. So there is no no hint of conglomerate in what we do. And if you look at the potential to spin off businesses, the board also asked us to bring in third parties to get a cold eyes review of what we do. And we've hired the best investment banks out there to look at strategic alternatives. And when you look at the midstream organization specifically, the third party independent analysis will tell you that there are incredible dis synergies based on that deep physical integration.

28m 47s

That there's massive tax burden that any spin would realize and that there are just economies of scale. We've got a very strong balance sheet as as an integrated company. The balance sheets of RemainCo and SpinCo would be impaired to what we have today. You throw additional SG and A on those remaining businesses. And the public company costs none of these things are fully reflected in a simple sum of the parts analysis. And so we take that into account. And we make sure that our board understands every step of the way and is verified by independent parties. And then if you look at just you know, you you just heard in our narrative that know, the accomplishments we've had over the last three years, the board was front and center in all those decisions. We took bold actions to make sure that we were position to be successful over the long term. The $3,500,000,000 of non core assets The only way we could define non core assets is to have a well defined strategy that was blessed by our board. That's how we define what is core and what is noncore. We expand our NGL wellhead to market strategy with the Pinnacle and Epic acquisitions fully supported by our Board.

29m 55s

Sold the Alliance refinery. We converted Rodeo and we have planned to cease the Los Angeles Refinery. Every one of those major strategic actions have been deeply considered, vetted and approved by our board. And refining operations we've improved utilization, we've raised product yield and reduced operating costs over the last three years. And we have plans for further progress. Again, part and parcel of our conversations with our board every time that we meet every action that we take. And because of all these actions that we put in place with the blessing of our board, we believe there's substantial upside to our stock, as we implement our 2027 strategic priorities. And we're going to maintain operational excellence. We're pursuing disciplined growth and we're returning capital and ensuring financial strength. And I just finally final point I wanna make be crystal clear on is we're making these strategic decisions at the board level, as we're making decisions at the operating and the management level, we are focused on data. We are focused on facts. We don't act out of fear or short term trends. We act on what we believe will create the most long term value for our shareholders each and every time.

31m 6s

And I will tell you that since the activists launched their campaign in February, the investor sentiment around their thesis has become more and more negative. And they become more and more positive around the process that or the progress that we've made in our refining in all of our businesses. And so we believe we're in a strong position We're committed to it. We're going to base it on data and facts going forward. So Doug, thank you for that question and look forward to your follow-up.

31m 33s

Well, I think first of all, Mark, thanks for the thorough answer. I I think I've taken enough time. I wanna be respectful to my sell side colleagues. So I'll I did have a follow-up, but I'll pass it back. Thanks so much for the the answer. Thanks, Doug.

31m 50s

The next question comes from John Royall with JPMorgan. John, please go ahead.

31m 57s

Hi, good morning. Thanks for taking my question.

32m

Tough to follow that back and forth, but maybe I'll maybe I'll go with a balance sheet question. So you're remaining well above your target at 38% You got the big turnaround quarter for the year in the rearview, and you also have a potential asset sale coming, which is good. But also the macro environment remains uncertain. So my question is, what do you view as your path to getting back to 30%? Does the path include maybe buying back a little less stock than your framework would otherwise imply?

32m 39s

Yeah. John, it's Kevin. Let me respond to that question. It's a very valid question. One we we put a lot of focus on. We we have a targets on leverage, the 30%. The real target that I focus on is the $17,000,000,000 absolute debt level. That's what I'm and the 30% becomes an output because it's a it's a measure of debt and equity as you know. And so our expectation is that between the cash that comes in from disposition of assets, and some improvement in the overall operating environment from where we were in the fourth quarter in the first quarter combined with in refining now being very well set for the remainder of the year to run at high utilization and you combine that with some margin recovery, which we have seen. As you look into April, we're seeing margins that are sort of $3 to $4 per barrel higher than where we were on average in the first quarter. Then that should position us quite well in terms of being able to make progress on debt reduction. I'd love to hit that $17,000,000,000 number by the end of this year. I can't guarantee that will happen.

33m 57s

It will be dependent on where operating cash flow comes out. But the overlay here is we're still committed to the 50% or more cash returns to shareholders in of operating cash flow. So that's the sort of basic criteria around returning cash to shareholders 50% or more of operating cash flow and at the same time through hopefully strong cash generation and proceeds from asset dispositions be able to make progress on debt reduction.

34m 27s

Great. And then my next question is on renewables. This was a little bit of a noisy quarter with the PTC coming into effect mid quarter. Can you help us really as detailed as you're willing to be on what the post PTC world kind of looks like in your renewables business. If you could give us any sense for maybe the proportion of production that's eligible and how much you expect to receive on a per gallon basis based on your current feedstocks weight that would be very helpful. Thank you.

35m 4s

Yes. John, let me first just clear the the first quarter result because that was a it was somewhat of a mess result, to be honest. And let me just walk through what drove that. And then Brian will give a bit of the sort of forward expectations around it. So we had a significant drop from fourth quarter to first quarter. The transition from BTC was a significant impact. It was the largest driver of that drop. But we also had LIFO inventory impacts from drawing down low CI feedstock inventory where the LIFO rate exceeded market prices. That was about a $60,000,000 hit in the first quarter. And then also in international the recognition of the K. Credits, these are the RTFC credits is not ratable. So we recognize about $50,000,000 of those in the fourth quarter. We did not have any credit recognition. In the first quarter. And so when you put all those things together, you get back to why the result was where it sits. So maybe Brian can give a forward look Yes. So I would say, it's hard to provide guidance for Q2 you can tell I'm losing my voice, so I'm gonna try as hard as I can.

36m 18s

But with so many outstanding policy issues, including the tariffs, and the RVO for RINs that hasn't been set yet, it's it's it's difficult. But we believe the RVO will need to strengthen the d four RIN or the biodiesel RIN to continue to provide an incentive for RD production and margins continue to be challenged even in April. And the current market has us running the plant at reduced rates. In terms of tailwinds, there are some tailwinds we were seeing. Our biodiesel plants closing given the tight margins. And we've also seen demand for renewable diesel permitting and that's a seasonal firming of demand. And finally, we look forward to collaborating with the to support U. S. Manufacturing by addressing the unintended consequences of tariffs on feedstocks given international RD imports to The U. S. Are untariffed with which disadvantages domestic producers like Rodeo.

37m 17s

Thank you.

37m 22s

Thank you. Our next comes from the line of Roger Read with Wells Fargo. Roger, please go ahead.

37m 31s

Yes. Thank you. Good morning. Maybe just to kick this off, update on where you are on kind of final asset dispositions? I think there's still some stuff in retail, maybe something in the midstream space.

37m 50s

Yeah. Roger, it's Kevin. As you know, we done 3 and a half billion of dispositions to date. So we're ahead of the target that we laid out. Back in almost a couple of years ago, guess. The major item we're still working is the Europe retail, so the Jet Germany, Austria. That is a very active process And, I know I've said this several times, but we are we are legitimately in, in-depth negotiations on that and hope to have some updates soon.

38m 21s

Yeah. As far as this is Mark. As far as other asset dispositions, we have other assets that we would define as noncore, nonoperated assets. Many of them are in the midstream. We're not we're not gonna name any specific assets, but certainly, we're we're we know what what the value of those assets are and know that there are potential buyers out there. [indiscernible] follow-up on that, how should we think about the use of cash flows [indiscernible] cash raised? I guess, maybe I should say, from those asset sales at this point. Do you see it, Kevin, as you were talking earlier in terms of return of capital to shareholders, or is most of this targeted for debt reduction?

39m 8s

I would expect most of this to be debt reduction. And think of the cash returns to shareholders being the relative to operating cash generation So different, you know, different part of the cash flow statement, driving the cash returns.

39m 26s

Okay. And then if I could just toss in one more that didn't count as my, my follow-up, Jeff. I apologize if I'm I'm violating the rules. But heavy maintenance q one in refining, very low in q two. Were you essentially wrapped up as we started q two, or is there a little lingering into q two that we should think of within that mid nineties guidance?

39m 57s

Yeah. This is Rich, Rogers. Thanks.

39m 58s

Thanks for the question. You know, the q q one was the heavy concentration of the turnaround activity. And you can tell by the guidance that we provided for the second quarter there that the there there is a little bit of linger that comes from quarter to quarter, but it it's certainly winding down in the second quarter. And you see that in the overall guidance.

40m 22s

Good. Thank you.

40m 27s

Thank you. The next question comes from Manav Gupta with UBS. Please go ahead. Your line is now open. Good morning, team. Can you help us better understand how some of these LPG exports will have to reset to accommodate around tariffs because I think he was sending like 20 48% of our ATMs to China and about 22% of propane to China. So how do these NGL exports now reset globally to work around the tariffs?

41m 4s

Hey, Manav. This is Brian. I'd say, like you said, the majority of China's LPG supply, which is primarily propane, comes from The US tariffs will likely alter those routes for Chinese LPG supply. It's possible that China could get their supply from the AG from Australia, from Southeast Asia. And then The US will just supply, will backfill the hole left by those regions just rerouting trade flows. Maybe bringing it back to our assets, our Freeport LPG is mostly termed up. And we haven't seen any FOB cancellations for cargoes. We also have a strong international trading team and that they manage delivered cargoes allows us to capture additional value and optimize the Freeport exports when we see changes to fundamentals or when we have market dislocations like those caused by tariffs Perfect. My quick follow-up here is on the polyethylene chain margin. It was weaker even before the tariffs were announced. And again, some portion of polyethylene resin definitely moves to China made into products and sold back into U. S. Those flows cannot be sustainable with the tariffs. So your medium term outlook for the polyethylene chain margin here?

42m 22s

I think that there certainly is pressure from the tariff situation, purchasing decisions the AAR are going to be impacted. I do believe that CPChem has minimized their exposure to China. And they've also they've got the ability to to source material from The Middle East similar to to the propane discussion. And so they there would be rebalance But but no, it is certainly that it's clear that tariffs do the uncertainty around tariffs causes people to slow down their decision making. You see that across the economy.

43m

Thank you.

43m 7s

The next question comes from Neil Mehta with Goldman Sachs. Please go ahead, Neil. [indiscernible] Yeah. Thank you. Appreciate the the thorough answer to to the question around some of the parts. Kevin, I had a follow-up for you around the midstream side of the equation because that's where I think there's been a lot of focus around, you you built a good business, does it make sense to to try to monetize it. And I think you made a comment that there's there's significant tax leakage around monetization.

43m 36s

That in the case of the spin as well? And then can you provide a little bit more detail or help us quantify framework for thinking about tax leakage associated with midstream monetization?

43m 50s

Yeah, Neil. That, the the tax hit is in the context of a sale. Of the business, a spin off you would expect would be structured in a tax free manner. And so I would expect minimal tax implications from a spin. But in in terms of an actual disposition, of the business, it is significant tax effect because the majority of those assets were constructed or acquired during a period where we had accelerated depreciation. So the tax basis is extremely low. So just to put some context around that, you can depending on what number you use valuation, and there's a $50,000,000,000 number that's out there. Would drive a $10,000,000,000 tax, hit, to sort of quantify what we mean by, significant tax impacts.

44m 45s

Got it. And then there's no clear offsets that you could put against that, it sounds like?

44m 53s

Not that I'm aware of.

44m 56s

Okay.

44m 56s

Alright. And then the follow-up for the team is really on the refining side. It's obviously challenging conditions in Q1, but you guys are going to be running better here in Q2. Just love your thoughts on the path back to mid cycle. And one of the factors that's suppressing profitability has been the tightness of WCS. Just how do you guys see that move in from here as we work through turnaround and can that be a tailwind?

45m 27s

Hey, Neil. It's Brian. I'll try to get this out just on on market outlook in maybe the caveat is geopolitics and the slowing economy. Make everything hard to predict. But what we've seen, Kevin's mentioned this, The U. S. Margins in April are firming a good bit, and you can see that in our market indicator. We're estimating about 1,000,000 barrels worth of the global refining capacity shutting this year and most of that rationalization will be in The U. S. And in Europe. And in fact, if you look out through the end of the decade, we only show about 300,000 barrels a day of net additions per year, and we're likely to see that number continue to decrease But on gasoline, we're forecasting global gasoline demand to be about a half percent up for the year in US gasoline. Demand to be up about 1%. If you take a if you took a look at first quarter that was 1.1% year on year growth in The U. S. Lower pump prices, good unemployment numbers, less working from home, all contributed to that strength US gasoline inventories are now currently at about five year averages. And our current gasoline supply outlook is for those inventories to continue to tighten, particularly as we get in gasoline season and particularly in The U. S. On the distillate side, we see demand globally up about 1% and in The U. S. Up about 2% for the year.

46m 49s

Part of the demand increase will come from lower biodiesel and renewable diesel production driven by the weaker renewable margins. Also there's a shift to Mediterranean ECA fuel in May, which will help. US diesel inventories are really sitting at very low five year seasonal lows in part due to kind of ongoing maintenance both in the Gulf Coast and in in the Mid Con And then finally on jet, at a 01/2025 global jet demand was up about point 3% year on year. We're forecasting 2025 global jet demand to be up 2% know a lot of the airlines have talked about they can't predict for the rest of the year and some ways. If you think there's gonna be a recession or more tariffs, the bets are off. But this is if you don't think things are gonna happen, this is kind of our view. And we're starting to see trimming of of near month flights, so it's really hard to tell. US jet demand 1.4% up That's from fleet and flight schedule growth. Again, it's very, very difficult to tell. And then on the you mentioned on the Canadian differentials, In Q2, we anticipate about 358,000 barrels a day off the market mostly driven by planned maintenance at production facilities.

48m 9s

And then as you kind of look across the year, we see differentials start to widen out. You'll get the seasonal benefit of diluent in the product And also you'll get more OPEC barrels on the market, which will also help weaken the heavy differentials.

48m 30s

That's all great color. Thank you so much.

48m 37s

Thank you. The next question comes from Theresa Chen with Barclays. Please go ahead, Theresa. Hi. I wanted to, go back to the NGL conversation. There are some material circulating, about a carve out for NGLs within the Chinese reciprocal reciprocal tariff. Do you have an early view on this especially for ethane? And in the event of additional downside volatility for NGL prices in the Gulf Coast, how is your business positioned within the backdrop of potentially lower LPG arb, frac spreads and POP margins in processing?

49m 17s

Well, I think, first of all, of our business is termed up at the Freeport facility. And as I mentioned, we're not seeing anybody canceling any of those term contracts. I think you know, lot of the or most of the ethane for China comes from The US. And we would we've seen that still moving. We'd expect it continue to move. So I don't think that would really have an impact on our business.

49m 42s

Going forward?

49m 44s

Yeah. I think, Chris, at a high level, there's there's few other options for the Chinese that are consuming ethane. And so I think that it's clear that they're at least possibly some rational discussions going on around tariffs. It's all maybe rumors speculation at this point, hopefully those discussions move in a rational direction. Because the Chinese need access to US propane and ethane. And so it's in their best interest to seek that accommodation.

50m 21s

Got it.

50m 21s

And related to the FID of Iron Mesa, you be able to quantify the cost? And is this plant, the first of maybe several plants to increase the y grade under your control? Is in light of a competitor building out their own rack and dock infrastructure later this decade that maybe, you know, creates a volume shortfall in Sweeney and Freeport?

50m 50s

Hi, Theresa. This is Don.

50m 52s

Yeah. I mean, it it continues, I think, really just to demonstrate the progress we're making in building out our NGL value chain and it does support our Permian GNP growth position in terms of barrels coming out of our own gas plants. From an investment standpoint, it's it's a typical midstream return with a from a build multiple, kind of a sub five times type size. A little bit maybe to unpack Iron Mesa, it's it's gonna be located near our Goldsmith facility. So that really provides us with several benefits. We we'll be able to retire portions of our Goldsmith facility, upgrade the processing That's going to improve our operational efficiencies, our reliability, reduces our environmental footprint, improves our structure in that area. So we'll get an immediate uplift on the existing throughput that we have there. As we'll load this plant first. And then from a location perspective, given our pipeline network in that area, we'll be able to process and bring gas from both the Midland and the Delaware Basins to this facility. [indiscernible] this facility will be tied into our Sand Hills NGL system. And so it I'd expect us to continue to be successful commercially from a gathering and processing standpoint.

52m 21s

We have opportunities then to continue to grow our GMP footprint organically like this whether that's a partial upgrade of existing facilities as well as just expansion All of that is helpful for our overall NGL value chain. And maybe just to step back and think about it a broader context, at this plant and then the the two plants in the Midland Basin, the Dos Pikos and Dos Pikos two that's about to turn on later this year. We will have added close to 800,000 a day of gas processing capacity. That produces over 100,000 barrels a day of NGLs to feed our system. So really making good progress as we grow out this system. So we feel good about where our where our footprint is going and, again, what our supply outlook for Sweeny is.

53m 21s

Thank you.

53m 26s

Our next question comes from Jean Ann Sills with Bank of America. Hi, good morning. I think many midstream investors don't own PSX stock because of the volatility of the earnings of the other segments. Is that your view as well? And given your answer to Doug's question, which I think suggested you are not that interested in the spin, what other things can PSX do to get fuller credit for the stability of the midstream earnings in your stock?

53m 56s

Yeah. Jean Ann, that's that's a great question. And I think I I touched on that earlier that, you know, we're we're in the process of growing those earnings. Think really we weren't recognized as a strong midstream player per se until earlier this year when we announced the Epic transaction. And so as those stable earnings become a bigger and bigger part of our portfolio, I think those seeking that that that multiple from stable earnings will will take note. And across the spectrum of we're getting solid feedback and support for that. [indiscernible] Yeah.

54m 39s

I was just gonna add on, a little bit there in terms of we will continue to look at our disclosures and the information we provide around the midstream segment and enhance where appropriate. And as the midstream business grows, the part of the narrative is that the refining business yes, has volatility, but it also provides a lot of nice upside from a cash generation standpoint and returns to shareholders. And so that's where I see that value proposition that you've got that large stable midstream business supplemented by the upside that comes with the refining and marketing business.

55m 19s

Great. I'll leave it there. Thank you.

55m 22s

Thanks, Jeanine.

55m 26s

Thank you. Our next question comes from Joe Lache with Morgan Stanley. Please go ahead, Joe.

55m 34s

Hey, team. Thanks for taking my questions. I just wanted to ask on shareholder returns. With the dividend increase a few days ago, the stock is yielding just north of 4.5%, which is above refining peers.

55m 44s

Could you just talk through the balance between raising the dividend and leaning into buyback given where shares are trading?

55m 53s

Yeah, Joe. It's you know, the dividends are principles there are secure competitive and growing. And the reason for the growing is we we do have, investors that are clearly dividend investors, and one of their criteria is a dividend that increases on an annual basis. And so you can expect to see us increase the dividend every year It was a relatively modest increase. It was $05 4%, smaller than some of our, more recent increases have been, but we felt appropriate in the overall context of the business environment that we're in today. And so therefore, the real upside from a shareholder return standpoint is going to be in share repurchases. And as you see operating cash flow increase then that increases the I go back to the 50% of operating cash flow returned to shareholders dividend is easy to get to compute, but so is the share repurchases. At the 50% and potentially above level depending on where we are in other priorities including balance sheet.

57m

Yes. And Joe when you look at the combination of share repurchases and our dividend that the gross dividend outlay has remained pretty stable because the shares are declining. And so it's it's it really is almost needed to catch up. And and and we're taking advantage of that. So think about that gross that overall dividend outlay as relatively constant and then share repurchases can are are the swing item that can that can grow even faster than the dividend when the cash there.

57m 37s

Great. Thanks. That makes sense. And then the other question that I had was around refined utilization and first quarter, which came in a little bit light versus what we and I think obviously been expecting based on the low 80% guidance. That economic driven or was that always part of the plan?

57m 53s

Yeah. This is Rich. So our guidance was low eighties. For the quarter. There was certainly a heavy focus of that downturn was related to the turnaround activity. And our turnaround activity was heavily focused on crude units as well for the quarter. So that was a big impact, especially in the Atlantic Basin. We had turnaround at the Bayway facility and the Gulf Coast. Both our refineries in the Gulf Coast had turnaround activity at Lake Charles and Sweeny. And then, so did Wood River and Border. So so those utilizations were were were down quite a bit. That that all said, there those were the majority and the major components of the downturn in the utilization. There were some minor market adjustments as well made through the year primarily in the January and February time frame. So those were relatively minor, call them a point a point, maybe two, point and a half on the overall utilization for the quarter. Great. For taking my questions.

59m 8s

Thank you. Our next question comes from Matthew Blair with Tudor, Pickering, Holt.

59m 17s

Thank you, and good morning. I have a two parter on MNS First, should we expect a pretty considerable tailwind to your Q2 M and S results from the falling crude price environment? We do track a retail indicator that's looking quite strong in the second quarter. I know your wholesale business is a little bit different, but what are your expectations on M and S for the second quarter? And is there a big pickup in line And then second, you know, every company reports things a little differently, and I think there's an argument to be made that Phillips were finding results are a little different than your large cap peers because your US wholesale activities are in MNS and not in refining. So my question is, could you help us understand roughly what percent of M and S EBITDA and op costs are related to those wholesale activities so we can look at things on a little bit more of a, apples to apples basis. Thank you.

1h 24s

Hey, Matthew. It's Brian. I'll start and then Kevin can take over. I I think you're right. When prices are falling, it's usually somewhat beneficial for marketing. Just to give you a little bit of color, we're seeing a stronger April margins. And our view is barring anything significant, so a slowdown in the economy or or something like that, we would expect a seasonal uptick in q two earnings or margins consistent with prior years.

1h 53s

Yeah.

1h 53s

Matt, it's Kevin. And just on the the second question, we don't break out our results by channel of trade, which is what you're referring to. Our Marketing and Specialty segment covers wholesale business, it also covers the retail to the extent we have retail But the bulk of that business is a wholesale model And so it's you know, we we don't have a a breakout of the of the EBITDA or the costs.

1h 1m 21s

The costs are relatively low when you think about the the the company owned retail business is gonna have a higher cost structure, for sure. But it's not something that we're, breaking out at that channel of trade level.

1h 1m 38s

Thanks, Paul. I'll leave it there.

1h 1m 45s

Thank you.

1h 1m 46s

Our next question comes from Ryan Todd with Piper Sandler. Please go ahead.

1h 1m 54s

Great. Thanks. Maybe just one follow-up on some of your earlier comments on renewable diesel.

1h 2m 1s

Outside of macro backdrop, which is obviously very noisy, as we think about the first quarter and into the second quarter, you talk about maybe some of the challenges that you had optimizing things from a feedstock point of view in the in the first quarter because of the timing of some of the announcements. And as you look into the second quarter and then maybe I don't know if you said this earlier, but do you have a rough estimate of maybe what percent of the product you were able to book credits on during the quarter? And as we think into the second quarter, how how will both of those things change and be a potential tailwind for you this quarter? [indiscernible] others can join in.

1h 2m 46s

I would say, like everybody, if you don't understand the rules of the game, it makes it more more difficult to play in the game. And the PTCs were it was kind of not completely known At that time, we we didn't have we had PTC value for imported used cooking oil. And now we don't. And so we made some decisions early on between the end of last year and beginning of this year that were suboptimized, frankly, given our view of what the what credits would be and how they how they turned out and some of the sanctions. I think going forward, we'll we'll have maybe a clearer view. We still don't have a complete view of the PTCs. We think that'll come in June or July with the tax bill. We talked about the RVO proposal. We expect to to come at the May, but not for implementation until Q3. So we're looking forward to that. We the good news is, I think, ag and oil are aligned that we need to increase the RVO to make to make up for some of the credit value that we lost in the BTCs. And then LCFS is also up for debate.

1h 3m 58s

We by the June, we'll have some more clarity on that. So more clarity we have on the credit values and how they work, the better we'll be able to run the plans and and the more focus will be on finding the right feedstock to make the right product.

1h 4m 16s

Great. Thank you.

1h 4m 21s

Thanks, Ryan.

1h 4m 24s

Thank you.

1h 4m 25s

Our next question comes from the line of Paul Cheng with Scotiabank. Paul, please go ahead.

1h 4m 32s

Hey, guys. Good morning or good afternoon.

1h 4m 36s

Mark, I think you can ease maybe for investors, a little bit easier that to understand the [indiscernible] to the rest of your business.

1h 4m 49s

Uh-huh. Maybe it's a little bit more difficult on the chemical Even CT can there's a joint venture and they won't they run by their own board and their own management and in theory that all transaction between you and PPCAM should be in harm's name. Maybe you can help us understand a little bit better why I mean, even though he has a great why that is important for them? To be part of the portfolio and work up synergy or that integration benefit you can receive from there.

1h 5m 26s

Yep. I'm glad to take that on. When you look at CPE Chem, first of all, the model has been great. For the last twenty five years, it's grown faster and more profitably than their competitors. It's been a great return on capital employed business. It's thrived and done quite well. And we've sat across the table from our partners, each of us expressing our undying love for the the company and in owning all of it if the other is interested in in parting from it. And so I think that there is great operational synergy, between CPChem and Phillips sixty six as an NGL provider and as asset operator around the Sweeney Complex where there's a very heavy presence of CPChem, whether it's the storage facilities at the Clemens Terminal, the physical location and streams going back and forth between between the assets. Yes, there is an arm's length agreement, but all of that happens quite seamlessly. Now I would say if Phillips owned those a %, it would there would be even greater synergies to capture. But being a a 50% owner and being deeply co located and integrated, there there are significant advantages there. And there those represent substantial assets.

1h 6m 52s

You've got three of their Gulf Coast crackers right there in the Sweeney Complex embedded and deeply integrated. And so it is real, and it and it happens every day. And if it was, if it was truly an independent separate entity, there would be more frictional losses in in making things happen over time. And less, I think, less direct level of financial integration. So there's benefits both ways. Okay. Great.

1h 7m 27s

The second question, I think, is for Calvin. Just curious then, I mean, with all volatility create given the Trump administration economic and tariff policy, [indiscernible] cash balance that you really want to keep on on the bulk as well as what is the that capital ratio and your payout ratio.

1h 7m 51s

To be quite frank that with higher volatility, should you have a high of a payout ratio still going to pay out more than 50% or should you prioritize and get the debt to be lower than what you [indiscernible] At least that for until maybe that the volatility become perhaps a little bit lower. And the result recession become less.

1h 8m 18s

Yeah, Paul. It's all about balancing the different priorities. And, you know, there there is a lot of uncertainty in the out there right now. But the point is it is uncertainty, and we don't know exactly which way this will play out. So we don't want to make any any dramatic decisions around that. And we think that the way we've set our prioritization is very measured and balanced. To where it works in low cycle environment or a more volatile environment, and it works in a more robust environment as well. It the the the 50% payout ratio is relatively modest. We do have cash from asset dispositions And from a balance sheet standpoint, the cash at the end of the quarter was $1,500,000,000 We've tended to run around about that somewhere between 1,500,000,000.0 and 2,000,000,000 to $2,500,000,000 at the end of most periods. Would it be nice to have more Yeah. But it's it's it's perfectly adequate. There's a natural cycle over the course of the month anyway. The end of the month the end of the quarter tends to be a relatively low point in that cycle. We have significant liquidity facilities that we can draw on as necessary.

1h 9m 39s

And when we need to, we do. But we just we look holistically at what that balance sheet needs to look like and feel that at the 17,000,000,000 level, when you consider that midstream with a pretty stable, very stable $4,000,000,000 of EBITDA. The marketing business also with stable EBITDA in the order of 2,000,000,000 that supports that debt.

1h 10m 3s

Supports the leverage at a modest ratio. And so that's how we think about it in terms of leverage ratio Leverage ratio is relative to the different business segments we operate in. So we expect to have a debt level that can be supported by the more stable cash generating businesses and think of the refining business and the chemicals business as being debt free from a Phillips 66 balance sheet standpoint.

1h 10m 33s

Thank you. This concludes the question and answer session. I will now turn the call over to Mark Lazier for closing comments.

1h 10m 43s

Thanks for all of your questions. Less than three years ago, we embarked on a transformative strategy. We've divested multiple non core assets at attractive multiples, strengthened our NGL value chain, and rationalized our refining portfolio. We improved refining operational reliability in reduced refining controllable costs all while returning over $14,000,000,000 to shareholders. Looking forward, we will deliver significant value through our 2027 strategic priorities maintaining operational excellence, pursuing disciplined growth, returning capital and ensuring financial strength. We value shareholder feedback. We're committed to maximizing long term value for our shareholders through operational excellence and disciplined capital allocation. Thank you for your interest in Phillips sixty six. If you have questions or feedback after today's call, please call Jeff or Owen.

1h 11m 43s

Thank you everyone for joining us today. This concludes your call and you may now disconnect your lines.

Key Insights

Phillips 66 reported Q1 2025 earnings of $487 million ($1.18/share) and an adjusted loss of $368 million ($0.90/share), impacted by $240 million in accelerated depreciation related to the planned closure of the Los Angeles refinery.
The company returned $716 million to shareholders in Q1, including $247 million in share repurchases, and increased its quarterly dividend by $0.05/share; it remains committed to returning over 50% of net operating cash flow to shareholders.
Major turnaround activity in refining led to lower volumes and higher costs in Q1, but these activities are largely complete, positioning the company for higher utilization (mid-90% range) and lower turnaround expenses ($65–$75 million) in Q2.
Phillips 66 continues to invest in its midstream and NGL value chain, with the acquisition of Epic NGL (immediately accretive), Dos Pikos II expansion coming online in Q3 2025, and the new Iron Mesa gas processing plant expected online in Q1 2027; targeting midstream run-rate adjusted EBITDA of $4.5 billion by 2027.
Management addressed strategic alternatives, emphasizing the board’s experience with major transactions and the integrated value of the business, noting that any potential midstream spin-off or sale would face significant tax and operational dis-synergies; the company remains focused on disciplined growth, operational excellence, and maintaining a strong balance sheet.

Recent Transcripts

Midstream growth and cost reductions drive resilience amid margin pressures; strategic priorities updated through 2027.

Income Statement

Revenue

	2020	2021	2022	2023	2024
Revenue	$64B	$111B	$170B	$147B	$143B
Cost of Revenue	$59B	$104B	$152B	$136B	$132B
Gross Profit	$5B	$7.8B	$18B	$11B	$11B
Gross Profit %	7.8%	7%	11%	7.6%	7.6%
R&D Expenses	$48M	$47M	$42M	$27M	$0

2020

2021

2022

2023

2024

Revenue

$64B

$111B

$170B

$147B

$143B

Cost of Revenue

$59B

$104B

$152B

$136B

$132B

Gross Profit

$5B

$7.8B

$18B

$11B

Gross Profit %

7.8%

11%

7.6%

R&D Expenses

$48M

$47M

$42M

$27M

Cash Flow

Net Income

	2020	2021	2022	2023	2024
Net Income	-$3.7B	$1.6B	$11B	$7B	$2.2B
Dep. & Amort.	$1.4B	$1.6B	$1.6B	$2B	$2.4B
Def. Tax	$126M	-$272M	$1.3B	$840M	-$251M
Stock Comp.	$127M	$144M	$210M	$0	$0
Chg. in WC	-$326M	$2.1B	$68M	-$1.8B	-$615M

2020

2021

2022

2023

2024

Net Income

-$3.7B

$1.6B

$11B

$7B

$2.2B

Dep. & Amort.

$1.4B

$1.6B

$2B

$2.4B

Def. Tax

$126M

-$272M

$1.3B

$840M

-$251M

Stock Comp.

$127M

$144M

$210M

Chg. in WC

-$326M

$2.1B

$68M

-$1.8B

-$615M

Balance Sheet

Cash

	2020	2021	2022	2023	2024
Cash	$2.5B	$3.1B	$6.1B	$3.3B	$1.7B
ST Investments	$0	$0	$329M	$0	$0
Cash & ST Inv.	$2.5B	$3.1B	$6.1B	$3.3B	$1.7B
Receivables	$6.5B	$7.5B	$11B	$12B	$9.5B
Inventory	$3.9B	$3.4B	$3.3B	$3.8B	$4B

2020

2021

2022

2023

2024

Cash

$2.5B

$3.1B

$6.1B

$3.3B

$1.7B

ST Investments

$329M

Cash & ST Inv.

$2.5B

$3.1B

$6.1B

$3.3B

$1.7B

Receivables

$6.5B

$7.5B

$11B

$12B

$9.5B

Inventory

$3.9B

$3.4B

$3.3B

$3.8B

$4B

Go Deeper

Financial information provided by Financial Modeling Prep. Options data provided by Unusual Whales. Live transcripts provided by Quartr. Reported revenue and EPS data from Earnings powered by FinChat.io. All data is provided for informational purposes only, and is not intended for trading purposes or financial, investment, tax, legal, accounting or other advice. · See all tickers.

Overview
Latest News
Earnings
Income Statement
Cash Flow
Balance Sheet
Related

Earnings

Report Date

Apr 25, 2025

Reported Revenue

31.7B

Beat +0.09%

Avg 1d Change

3.08%

Report Period

Q1 2025

Reported EPS

-0.9

Miss -24.48%

Implied Move 1d

2.94%

Transcript

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You look at, United Technologies.

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The next question comes from John Royall with JPMorgan. John, please go ahead.

31m 57s

Hi, good morning. Thanks for taking my question.

32m

32m 39s

33m 57s

34m 27s

35m 4s

36m 18s

37m 17s

Thank you.

37m 22s

Thank you. Our next comes from the line of Roger Read with Wells Fargo. Roger, please go ahead.

37m 31s

37m 50s

38m 21s

39m 8s

39m 26s

39m 57s

Yeah. This is Rich, Rogers. Thanks.

39m 58s

40m 22s

Good. Thank you.

40m 27s

41m 4s

42m 22s

43m

Thank you.

43m 7s

43m 36s

That in the case of the spin as well? And then can you provide a little bit more detail or help us quantify framework for thinking about tax leakage associated with midstream monetization?

43m 50s

44m 45s

Got it. And then there's no clear offsets that you could put against that, it sounds like?

44m 53s

Not that I'm aware of.

44m 56s

Okay.

44m 56s

45m 27s

46m 49s

48m 9s

48m 30s

That's all great color. Thank you so much.

48m 37s

49m 17s

49m 42s

Going forward?

49m 44s

50m 21s

Got it.

50m 21s

50m 50s

Hi, Theresa. This is Don.

50m 52s

52m 21s

53m 21s

Thank you.

53m 26s

53m 56s

54m 39s

55m 19s

Great. I'll leave it there. Thank you.

55m 22s

Thanks, Jeanine.

55m 26s

Thank you. Our next question comes from Joe Lache with Morgan Stanley. Please go ahead, Joe.

55m 34s

55m 44s

Could you just talk through the balance between raising the dividend and leaning into buyback given where shares are trading?

55m 53s

57m

57m 37s

57m 53s

59m 8s

Thank you. Our next question comes from Matthew Blair with Tudor, Pickering, Holt.

59m 17s

1h 24s

1h 53s

Yeah.

1h 53s

1h 1m 21s

1h 1m 38s

Thanks, Paul. I'll leave it there.

1h 1m 45s

Thank you.

1h 1m 46s

Our next question comes from Ryan Todd with Piper Sandler. Please go ahead.

1h 1m 54s

Great. Thanks. Maybe just one follow-up on some of your earlier comments on renewable diesel.

1h 2m 1s

1h 2m 46s

1h 3m 58s

1h 4m 16s

Great. Thank you.

1h 4m 21s

Thanks, Ryan.

1h 4m 24s

Thank you.

1h 4m 25s

Our next question comes from the line of Paul Cheng with Scotiabank. Paul, please go ahead.

1h 4m 32s

Hey, guys. Good morning or good afternoon.

1h 4m 36s

Mark, I think you can ease maybe for investors, a little bit easier that to understand the [indiscernible] to the rest of your business.

1h 4m 49s

1h 5m 26s

1h 6m 52s

1h 7m 27s

1h 7m 51s

1h 8m 18s

1h 9m 39s

1h 10m 3s

1h 10m 33s

Thank you. This concludes the question and answer session. I will now turn the call over to Mark Lazier for closing comments.

1h 10m 43s

1h 11m 43s

Thank you everyone for joining us today. This concludes your call and you may now disconnect your lines.

Key Insights

Phillips 66 reported Q1 2025 earnings of $487 million ($1.18/share) and an adjusted loss of $368 million ($0.90/share), impacted by $240 million in accelerated depreciation related to the planned closure of the Los Angeles refinery.
The company returned $716 million to shareholders in Q1, including $247 million in share repurchases, and increased its quarterly dividend by $0.05/share; it remains committed to returning over 50% of net operating cash flow to shareholders.
Major turnaround activity in refining led to lower volumes and higher costs in Q1, but these activities are largely complete, positioning the company for higher utilization (mid-90% range) and lower turnaround expenses ($65–$75 million) in Q2.
Phillips 66 continues to invest in its midstream and NGL value chain, with the acquisition of Epic NGL (immediately accretive), Dos Pikos II expansion coming online in Q3 2025, and the new Iron Mesa gas processing plant expected online in Q1 2027; targeting midstream run-rate adjusted EBITDA of $4.5 billion by 2027.
Management addressed strategic alternatives, emphasizing the board’s experience with major transactions and the integrated value of the business, noting that any potential midstream spin-off or sale would face significant tax and operational dis-synergies; the company remains focused on disciplined growth, operational excellence, and maintaining a strong balance sheet.

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