PSX 10-K Fiscal year ended Dec. 31, 2024

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Board of Directors

The Audit and Finance Committee of the Board of Directors (the Audit and Finance Committee) is responsible for overseeing the company’s Enterprise Risk Management (ERM) program, including oversight of the processes management has implemented to assess, identify and manage risks associated with cybersecurity and information technology.

In carrying out this responsibility, the Audit and Finance Committee regularly receives written reports from the company’s Chief Information Security Officer (CISO) and periodic briefings from the CISO. These presentations may address a wide range of topics, such as the results of recent vulnerability assessments and third-party independent reviews, changes to the threat environment, technological trends and other recent developments, and peer and other third-party benchmarking.

The Audit and Finance Committee makes regular reports to the Board of Directors on data protection and cybersecurity matters. The company maintains an Enterprise Cybersecurity Incident Response Plan (ECIRP) which provides the framework for management’s response to cyber-related incidents and escalation protocols, including, when appropriate, prompt reporting to the Board of Directors.

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On an annual basis, we conduct an evaluation of our cybersecurity risks as part of the ERM program. Through the ERM program, the CISO and other internal subject matter experts review potential cybersecurity threat scenarios, such as data theft, cash theft, widespread outages and business disruptions, and the potential consequences of such scenarios. The results of the risk assessment are shared with management and the Audit and Finance Committee.

We have a continuous monitoring program to detect and respond to potential cybersecurity threats in real-time. Log data from our technical controls are collected, aggregated, and correlated in a Security Information and Event Management (SIEM) system that identifies and categorizes events, as well as analyzes them. If the SIEM system identifies a potential security event, it can direct other controls to stop the activity and also generate alerts for detection and response. These alerts are monitored by a managed security service provider that augments our dedicated internal Security Operations Center team.

In addition, we utilize a third-party risk management (TPRM) program to identify, assess, monitor, and mitigate risks associated with third-party relationships, including cybersecurity risks. The TPRM program is designed to help ensure proper controls and measures are in place to manage the potential risks and vulnerabilities associated with third parties. Our policies and procedures aid in the governance from initial due diligence, selection, and contracting to termination.

With respect to cybersecurity incident response, our ECIRP provides a documented framework for responding to cybersecurity incidents. The ECIRP sets out a coordinated approach to investigating, containing, documenting and mitigating incidents, including reporting findings and keeping senior management and other key stakeholders informed and involved as appropriate.

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Consolidation Principles and Investments

Our consolidated financial statements include the accounts of majority-owned, controlled subsidiaries and variable interest entities (VIEs) where we are the primary beneficiary. Undivided interests in pipelines, natural gas plants and terminals are consolidated on a proportionate basis. See Note 3—DCP Midstream, LLC and DCP Midstream, LP Mergers, for further discussion about a significant VIE that we began consolidating in August 2022, and Note 30—Phillips 66 Partners LP, for further discussion regarding our merger with Phillips 66 Partners LP (Phillips 66 Partners), a wholly owned subsidiary of Phillips 66.

The equity method is used to account for investments in affiliates in which we have the ability to exert significant influence over the affiliates’ operating and financial policies, including VIEs, of which we are not the primary beneficiary. Other securities and investments are generally carried at fair value, or cost less impairments, if any, adjusted up or down for price changes in similar financial instruments issued by the investee, when and if observed. See Note 9—Investments, Loans and Long-Term Receivables, for further discussion on our significant unconsolidated VIEs.

Recast Financial Information

Certain prior period financial information has been recast and reclassified to reflect the current year’s presentation. See Note 29—Segment Disclosures and Related Information and Note 26—Cash Flow Information, for further information.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from these estimates.

Foreign Currency

Adjustments resulting from the process of translating financial statements with foreign functional currencies into U.S. dollars are included in accumulated other comprehensive income (loss) in stockholders’ equity. Foreign currency transaction gains and losses result from remeasuring monetary assets and liabilities denominated in a foreign currency into the functional currency of our subsidiary holding the asset or liability. We include these transaction gains and losses in current earnings (loss). Most of our foreign operations use their local currency as the functional currency.

Cash Equivalents

Cash equivalents are highly liquid, short-term investments that are readily convertible to known amounts of cash and will mature within 90 days or less from the date of acquisition. We carry these investments at cost plus accrued interest.

Inventories

We have several valuation methods for our various types of inventories and consistently use the following methods for each type of inventory. Crude oil and petroleum products inventories are valued at the lower of cost or market in the aggregate, primarily on the last-in, first-out (LIFO) basis. Any necessary lower-of-cost-or-market write-downs at year end are recorded as permanent adjustments to the LIFO cost basis. LIFO is used to better match current inventory costs with current revenues and to meet tax-conformity requirements. Costs include both direct and indirect expenditures incurred in bringing an item or product to its existing condition and location. Materials and supplies inventories are valued using the weighted-average-cost method.

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Fair Value Measurements

We categorize assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, through market-corroborated inputs. Level 3 inputs are unobservable inputs for the asset or liability that are used to measure fair value to the extent that relevant observable inputs are not available, and that reflect the assumptions we believe market participants would use when pricing an asset or liability for which there is little, if any, market activity at the measurement date.

Derivative Instruments

Derivative instruments, except those designated as normal purchases and normal sales, are recorded on the balance sheet at fair value. We have master netting agreements with most of our exchange-cleared instrument counterparties and certain of our counterparties to other commodity instrument contracts (e.g., physical commodity forward contracts). We have elected to net derivative assets and liabilities with the same counterparty on the balance sheet if the legal right of offset exists and certain other criteria are met. When applicable, we also net collateral payables and receivables against derivative assets and derivative liabilities, respectively.

Recognition and classification of the gain or loss that results from recording and adjusting a derivative to fair value depends on the purpose for issuing or holding the derivative. All realized and unrealized gains and losses from derivative instruments for which we do not apply hedge accounting are immediately recognized in our consolidated statement of income. Unrealized gains or losses from derivative instruments that qualify for and are designated as cash flow hedges are recognized in other comprehensive income (loss) and appear on the balance sheet in accumulated other comprehensive income (loss) until the hedged transactions are recognized in earnings. However, to the extent the change in the fair value of a derivative instrument exceeds the change in the anticipated cash flows of the hedged transaction, the excess gain or loss is recognized immediately in earnings.

Loans and Long-Term Receivables

We enter into agreements with other parties to pursue business opportunities, which may require us to provide loans or advances to certain affiliated and nonaffiliated companies. Loans are recorded when cash is transferred or seller financing is provided to the affiliated or nonaffiliated company pursuant to a loan agreement. The loan balance will increase as interest is earned on the outstanding loan balance and will decrease as interest and principal payments are received. Interest is earned at the loan agreement’s stated interest rate. Loans and long-term receivables are evaluated for impairment based on an expected credit loss assessment.

Impairment of Investments in Unconsolidated Affiliates

Investments in unconsolidated affiliates accounted for under the equity method are assessed for impairment whenever changes in the facts and circumstances indicate a loss in value has occurred. When indicators exist, the fair value is estimated and compared to the investment carrying value. If any impairment is judgmentally determined to be other than temporary, the carrying value of the investment is written down to fair value. The fair value of the impaired investment is determined based on quoted market prices, if available, or upon the present value of expected future cash flows using discount rates and other assumptions believed to be consistent with those used by principal market participants and observed market earnings multiples of comparable companies.

Depreciation and Amortization

Depreciation and amortization of properties, plants and equipment (PP&E) are determined by either the individual-unit-straight-line method or the group-straight-line method (for those individual units that are highly integrated with other units).

Capitalized Interest

A portion of interest from external borrowings is capitalized on major projects with an expected construction period of one year or longer. Capitalized interest is added to the cost of the related asset, and is depreciated over the useful life of the related asset.

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Impairment of Properties, Plants and Equipment

PP&E used in operations are assessed for impairment whenever changes in facts and circumstances indicate a possible significant deterioration in the future cash flows expected to be generated by an asset group. If indicators of potential impairment exist, an undiscounted cash flow test is performed. If the sum of the undiscounted expected future before-tax cash flows of an asset group is less than the carrying value of the asset group, including applicable liabilities, the carrying value of the PP&E included in the asset group is written down to estimated fair value and the write down is reported in the “Impairments” line item on our consolidated statement of income in the period in which the impairment determination is made. Individual assets are grouped for impairment testing purposes at the lowest level for which identifiable cash flows are available. Because there is usually a lack of quoted market prices for long-lived assets, the fair value of impaired assets is typically determined using one or more of the following methods: the present values of expected future cash flows using discount rates and other assumptions believed to be consistent with those used by principal market participants; a market multiple of earnings for similar assets; historical market transactions for similar assets, adjusted using principal market participant assumptions when necessary; or replacement cost adjusted for physical deterioration and economic obsolescence. Long-lived assets held for sale are accounted for at the lower of amortized cost or fair value, less cost to sell, with fair value determined using a binding negotiated price, if available, estimated replacement cost, or present value of expected future cash flows as previously described.

The expected future cash flows used for impairment reviews and related fair value calculations are based on estimated future volumes, prices, costs, margins and capital project decisions, considering all available evidence at the date of review.

Property Dispositions

When complete units of depreciable property are sold, the asset cost and related accumulated depreciation are eliminated, with any gain or loss reflected in the “Net gain on dispositions” line item on our consolidated statement of income. When less than complete units of depreciable property are disposed of or retired, the difference between asset cost and salvage value is charged or credited to accumulated depreciation.

Goodwill

Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in a business combination. Goodwill is not amortized, but is assessed for impairment annually and when events or changes in circumstance indicate that the fair value of a reporting unit with goodwill is below its carrying value. The impairment assessment requires allocating goodwill and other assets and liabilities to reporting units. The fair value of each reporting unit is determined and compared to the book value of the reporting unit. If the fair value of the reporting unit is less than the book value, an impairment is recognized for the amount by which the book value exceeds the reporting unit’s fair value. A goodwill impairment cannot exceed the total amount of goodwill allocated to that reporting unit. For purposes of assessing goodwill for impairment, we have three reporting units with goodwill balances at our 2024 testing date: Marketing and Specialties (M&S), Transportation and Natural Gas Liquids (NGL).

Intangible Assets Other Than Goodwill

Intangible assets with finite useful lives are amortized using the straight-line method over their useful lives. Intangible assets with indefinite useful lives are not amortized, but are tested at least annually for impairment. Each reporting period, we evaluate intangible assets with indefinite useful lives to determine whether events and circumstances continue to support this classification. Indefinite-lived intangible assets are considered impaired if their fair value is lower than their net book value. The fair value of intangible assets is determined based on quoted market prices in active markets, if available. If quoted market prices are not available, the fair value of intangible assets is determined based upon the present values of expected future cash flows using discount rates and other assumptions believed to be consistent with those used by principal market participants, or upon estimated replacement cost, if expected future cash flows from the intangible asset are not determinable.

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Asset Retirement Obligations

When we have a legal obligation to incur costs to retire an asset, we record a liability in the period in which the obligation was incurred provided that a reasonable estimate of fair value can be made. If a reasonable estimate of fair value cannot be made at the time the obligation arises, we record the liability when sufficient information is available to estimate its fair value. When a liability is initially recorded, we capitalize the costs by increasing the carrying amount of the related PP&E. Over time, the liability is increased for changes in present value, and the capitalized costs in PP&E are depreciated over the useful life of the related assets. If our estimate of the liability changes after initial recognition, we record an adjustment to the liability and PP&E.

Our practice is to keep our refining and other processing assets in good operating condition through routine repair and maintenance of component parts in the ordinary course of business and by continuing to make improvements based on technological advances. As a result, we believe that generally these assets have no expected retirement dates for purposes of estimating asset retirement obligations since the dates or ranges of dates upon which we would retire these assets cannot be reasonably estimated at this time. We will recognize liabilities for these obligations in the period when sufficient information becomes available to estimate a date or range of potential retirement dates. See Note 4—Restructuring, for additional information regarding the change in asset retirement obligation related to our intention to cease operations at our Los Angeles Refinery.

Environmental Costs

Environmental expenditures are expensed or capitalized, depending upon their future economic benefit. Expenditures relating to an existing condition caused by past operations, and those having no future economic benefit, are expensed. When environmental assessments or cleanups are probable and the costs can be reasonably estimated, environmental expenditures are accrued on an undiscounted basis (unless acquired in a business combination). Recoveries of environmental remediation costs from other parties, such as state reimbursement funds, are recorded as a reduction to environmental expenditures.

Guarantees

The fair value of a guarantee is determined and recorded as a liability at the time the guarantee is given. The initial liability is subsequently reduced as we are released from exposure under the guarantee. We amortize the guarantee liability over the relevant time period, if one exists, based on the facts and circumstances surrounding each type of guarantee. We amortize the guarantee liability to the related statement of income line item based on the nature of the guarantee. In cases where the guarantee term is indefinite, we reverse the liability when we have information to support the reversal. When the performance on the guarantee becomes probable and the liability can be reasonably estimated, we accrue a separate liability for the excess amount above the guarantee’s book value based on the facts and circumstances at that time. We reverse the fair value liability only when there is no further exposure under the guarantee.

Treasury Stock

We record treasury stock purchases at cost, which includes related transaction costs and excise taxes. Amounts are recorded as reductions of stockholders’ equity on the consolidated balance sheet. Common stock reissued from treasury stock is valued based on the average cost of historical repurchases.

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Revenue Recognition

Our revenues are primarily associated with sales of refined petroleum products and renewable fuels, crude oil, NGL and natural gas. Each gallon, or other unit of measure of product, is separately identifiable and represents a distinct performance obligation to which a transaction price is allocated. The transaction prices of our contracts with customers are either fixed or variable, with variable pricing based upon various market indices. For our contracts that include variable consideration, we utilize the variable consideration allocation exception, whereby the variable consideration is only allocated to the performance obligations that are satisfied during the period. The related revenue is recognized at a point in time when control passes to the customer, which is when title and the risk of ownership passes to the customer and physical delivery of goods occurs, either immediately or within a fixed delivery schedule that is reasonable and customary in the industry. The payment terms with our customers vary based on the product or service provided, but usually are 30 days or less.

Revenues associated with pipeline transportation services are recognized at a point in time when the volumes are delivered based on contractual rates. Revenues associated with terminaling and storage services are recognized over time as the services are performed based on throughput volume or capacity utilization at contractual rates.

Revenues associated with transactions commonly called buy/sell contracts, in which the purchase and sale of inventory with the same counterparty are entered into in contemplation of one another, are combined and reported in the “Purchased crude oil and products” line item on our consolidated statement of income (i.e., these transactions are recorded net).

Taxes Collected from Customers and Remitted to Governmental Authorities

Excise taxes on sales of refined petroleum products and renewable fuels charged to our customers are presented net of taxes on sales of refined petroleum products and renewable fuels payable to governmental authorities in the “Taxes other than income taxes” line item on our consolidated statement of income. Other sales and value-added taxes are recorded net in the “Taxes other than income taxes” line item on our consolidated statement of income.

Shipping and Handling Costs

We have elected to account for shipping and handling costs as fulfillment activities and include these activities in the “Purchased crude oil and products” line item on our consolidated statement of income. Freight costs billed to customers are recorded in “Sales and other operating revenues.”

Maintenance and Repairs

Costs of maintenance and repairs, which are not significant improvements, are expensed when incurred. Major refinery maintenance turnarounds are expensed as incurred.

Share-Based Compensation

We recognize share-based compensation expense over the shorter of: (1) the service period (i.e., the stated period of time required to earn the award); or (2) the period beginning at the start of the service period and ending when an employee first becomes eligible for retirement, but not less than ten months for shared-based payment awards granted beginning in 2023 and not less than six months for share-based payment awards granted prior to 2023 as those are the minimum periods of time required for awards not to be subject to forfeiture. Our equity-classified programs generally provide accelerated vesting (i.e., a waiver of the remaining period of service required to earn an award) for awards held by employees at the time they become eligible for retirement (at age 55 with 5 years of service). We have elected to recognize expense on a straight-line basis over the service period for the entire award, irrespective of whether the award was granted with ratable or cliff vesting, and have elected to recognize forfeitures of awards when they occur.

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Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income (loss) in the period that includes the enactment date. Income tax effects are released from accumulated other comprehensive loss to retained earnings, when applicable, on an individual item basis as those items are reclassified into income. Interest related to unrecognized income tax benefits is reflected in the “Interest and debt expense” line item, and penalties are reported in the “Operating expenses” or “Selling, general and administrative expenses” line items on our consolidated statement of income.

Effective December 31, 2024, we adopted ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” This ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The adoption of this pronouncement did not have an impact on our consolidated financial statements; however, it resulted in additional disclosures within Note 29—Segment Disclosures and Related Information.

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DCP Midstream, LLC and Gray Oak Holdings LLC Merger (DCP Midstream Merger)

On August 17, 2022, we and our co-venturer, Enbridge Inc. (Enbridge), agreed to merge DCP Midstream, LLC (DCP Midstream) and Gray Oak Holdings LLC (Gray Oak Holdings), with DCP Midstream as the surviving entity. Prior to the DCP Midstream Merger, we and Enbridge each held a 50 % interest and jointly governed DCP Midstream, whose primary assets are its general partner and limited partner interests in DCP Midstream, LP (DCP LP), and we each held indirect economic interests in DCP LP of 28.26 %. DCP LP is a VIE because its limited partners do not have the ability to remove its general partner with a simple majority vote, nor do its limited partners have substantive participating rights in the significant decisions made in the ordinary course of business. DCP Midstream ultimately consolidates DCP LP because one of its wholly owned subsidiaries is the primary beneficiary of DCP LP. We and Enbridge also held 65 % and 35 % interests, respectively, in Gray Oak Holdings, whose primary asset was a 65 % noncontrolling interest in Gray Oak Pipeline, LLC (Gray Oak Pipeline). Our and Enbridge’s indirect economic interests in Gray Oak Pipeline were 42.25 % and 22.75 %, respectively. We had voting control over and consolidated Gray Oak Holdings and reported Gray Oak Holdings’ 65 % interest in Gray Oak Pipeline as an equity investment and Enbridge’s interest in Gray Oak Holdings as a noncontrolling interest.

In connection with the DCP Midstream Merger, we and Enbridge entered into a Third Amended and Restated Limited Liability Company Agreement of DCP Midstream (Amended and Restated LLC Agreement), which realigned the members’ economic interests and governance responsibilities. Under the Amended and Restated LLC Agreement, two classes of membership interests in DCP Midstream were created, Class A and Class B, that are intended to track the assets, liabilities, revenues and expenses of the following operating segments of DCP Midstream:

• Class A Segment comprised of the businesses, activities, assets and liabilities of DCP LP and its subsidiaries and its general partner entities (DCP Midstream Class A Segment).

• Class B Segment comprised of the business, activities, assets and liabilities of Gray Oak Pipeline (DCP Midstream Class B Segment).

We hold a 76.64 % Class A membership interest, which represents an indirect economic interest in DCP LP of 43.3 %, and a 10 % Class B membership interest, which represents an indirect economic interest in Gray Oak Pipeline of 6.5 %. Enbridge holds the remaining Class A and Class B membership interests. We have been designated as the managing member of DCP Midstream Class A Segment and are responsible for conducting, directing and managing all activities associated with this segment, except as limited in certain instances. Enbridge has been designated as the managing member of DCP Midstream Class B Segment. Earnings and distributions from each segment are allocated to the members based on their membership interest in each membership class, except as otherwise provided.

DCP Midstream Class A Segment and DCP Midstream Class B Segment were determined to be silos under the variable interest consolidation model. As a result, DCP Midstream was also determined to be a VIE. We determined that we are the primary beneficiary of DCP Midstream Class A Segment because of the governance rights granted to us under the Amended and Restated LLC Agreement as managing member of the segment.

We hold a 33.33 % direct ownership interest in DCP Sand Hills Pipeline, LLC (DCP Sand Hills) and DCP Southern Hills Pipeline, LLC (DCP Southern Hills). DCP LP holds the remaining 66.67 % ownership interest in these entities. As a result of the governance rights granted to us over DCP Midstream Class A Segment and the governance rights we hold through our direct ownership interests, we obtained controlling financial interests in these entities in connection with the DCP Midstream Merger. As a result of the DCP Midstream Merger, our aggregate direct and indirect economic interests in DCP Sand Hills and DCP Southern Hills increased from 52.2 % to 62.2 %.

Starting on August 18, 2022, we began consolidating the financial results of DCP Midstream Class A Segment, DCP Sand Hills and DCP Southern Hills and reporting the direct and indirect economic interests held by others in these entities as noncontrolling interests on our financial statements.

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We account for our remaining indirect economic interest in Gray Oak Pipeline, now held through DCP Midstream Class B Segment, using the equity method of accounting. As a result of the DCP Midstream Merger, we derecognized Enbridge’s noncontrolling interest in Gray Oak Holdings.

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

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

DCP Midstream, LP Merger (DCP LP Merger)

On June 15, 2023, we completed the acquisition of all publicly held common units of DCP LP and eliminated the public common unit noncontrolling interest in our consolidated financial statements from the DCP LP Merger date, forward, pursuant to the terms of the Agreement and Plan of Merger, dated as of January 5, 2023 (DCP LP Merger Agreement). The DCP LP Merger Agreement was entered into with DCP LP, its subsidiaries and its general partner entities, pursuant to which one of our wholly owned subsidiaries merged with and into DCP LP, with DCP LP surviving as a Delaware limited partnership. Under the terms of the DCP LP Merger Agreement, at the effective time of the DCP LP Merger, each publicly held common unit representing a limited partner interest in DCP LP (other than the common units owned by DCP Midstream and its subsidiaries) issued and outstanding as of immediately prior to the effective time was converted into the right to receive $ 41.75 per common unit in cash. We paid $ 3,796 million in cash consideration to common unitholders, funded with a combination of available cash and debt proceeds. The DCP LP Merger was accounted for as an equity transaction. The DCP LP Merger increased our aggregate direct and indirect economic interest in DCP LP from 43.3 % to 86.8 % and our aggregate direct and indirect economic interests in DCP Sand Hills and DCP Southern Hills increased from 62.2 % to 91.2 %.

DCP Midstream Class A Segment

DCP Midstream Class A Segment is a VIE and we are the primary beneficiary. DCP Midstream Class A Segment is comprised of the businesses, activities, assets and liabilities of DCP LP and its subsidiaries and its general partner entities.

DCP LP is a master limited partnership whose operations currently include producing and fractionating NGL; gathering, compressing, treating and processing natural gas; recovering condensate; and transporting, trading, marketing and storing natural gas and NGL.

The most significant assets of DCP Midstream Class A Segment that are available to settle only its obligations, along with its most significant liabilities for which its creditors do not have recourse to Phillips 66’s general credit, were:

			Millions of Dollars
			December 31, 2024						December 31, 2023
Accounts receivable			$	638					601
Net properties, plants and equipment			8,861						9,319
Investments and long-term receivables			1,622						1,901
Accounts payable			909						815
Short-term debt			532						357
Long-term debt			2,913						3,759

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Preferred Units

On October 16, 2023, DCP LP redeemed its Series C preferred units at the aggregated liquidation preference of $ 110 million, which approximated the book value of the preferred units. On June 15, 2023, DCP LP redeemed its Series B preferred units at the aggregated liquidation preference of $ 161 million, which approximated the book value of the preferred units. In December 2022, DCP LP redeemed its Series A preferred units with an aggregate liquidation preference of $ 500 million, which approximated the book value of the preferred units. These preferred unit redemptions decreased the “Noncontrolling interests” balance on our consolidated balance sheet from December 31, 2022.

Trading and Reporting Status

In late 2023, DCP LP’s common units, Series B preferred units and Series C preferred units were delisted and deregistered from the New York Stock Exchange. In addition, DCP LP has suspended its reporting obligations to the Securities and Exchange Commission under Sections 13 and 15(d) of the Exchange Act.

Distributions

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Los Angeles Refinery

In October 2024, we announced our intention to cease operations at our Los Angeles Refinery in the fourth quarter of 2025, and are evaluating potential future uses of the property. As a result of this decision, the following impacts were recorded in our Refining segment:

• We assessed the Los Angeles Refinery asset group for impairment and concluded that the carrying value of the asset group was recoverable. However, the estimated useful lives of the Los Angeles Refinery assets were shortened to reflect the plan to cease the use of the assets in the fourth quarter of 2025. As of December 31, 2024, the $ 1,248 million carrying value of the net PP&E and intangible assets will be depreciated through December 2025 to the estimated salvage value of $ 241 million. Total depreciation related to the Los Angeles Refinery assets for the year ended December 31, 2024, was $ 350 million, including $ 253 million of accelerated depreciation. This accelerated depreciation is included within the “Depreciation and amortization” line item on our consolidated statement of income for the year ended December 31, 2024.

• We increased our asset retirement obligations (AROs) to $ 231 million as of December 31, 2024, mainly reflecting our change in the estimated timing of spending for asbestos abatement and decommissioning of assets at the Los Angeles Refinery. The asset retirement obligations recorded require significant judgment and are subject to changes in the underlying assumptions. Depreciation of the related capitalized asset retirement costs also will be recorded through December 2025, and the amount for the year ended December 31, 2024, is reflected in the accelerated depreciation discussed above.

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

In April 2022, we began a multi-year business transformation focused on enterprise-wide opportunities to improve our cost structure. For the years ended December 31, 2023 and 2022, we recorded restructuring costs totaling $ 177 million and $ 160 million, respectively, primarily related to consulting fees and severance costs. Restructuring costs for the year ended December 31, 2022, also included an impairment related to assets held for sale. These costs are primarily recorded in the “Selling, general and administrative expenses” and “Impairments” line items on our consolidated statement of income and are reported in Corporate and Other.

In addition, for the years ended December 31, 2023 and 2022, we recorded restructuring costs of $ 38 million and $ 18 million, respectively, associated with the integration of DCP Midstream Class A Segment primarily related to severance and contract exit costs. These costs are primarily recorded in the “Selling, general and administrative expenses” line item on our consolidated statement of income and are reported in our Midstream segment.

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Midstream Acquisitions

Acquisition

On July 1, 2024, we acquired Pinnacle Midland Parent LLC (Pinnacle Midstream) to expand our natural gas gathering and processing operations in the Permian Basin for cash consideration of $ 565 million. For this acquisition, we provisionally recorded $ 325 million of PP&E, including finance lease right of use assets; $ 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. The fair values of the assets acquired and liabilities assumed are preliminary and subject to change until we finalize the accounting for this acquisition.

DCP Midstream Merger

On August 17, 2022, we realigned our economic interest in, and governance rights over, DCP Midstream and Gray Oak Holdings through the DCP Midstream Merger, with DCP Midstream as the surviving entity. As part of the DCP Midstream Merger, we transferred a 35.75 % indirect economic interest in Gray Oak Pipeline and contributed $ 404 million of cash to DCP Midstream, which was then paid to Enbridge, in return for a 15.05 % incremental indirect economic ownership interest in DCP LP. As noted above, the additional governance rights we were granted as part of this transaction resulted in us consolidating DCP Midstream Class A Segment, as well as DCP Sand Hills and DCP Southern Hills. Given the nature of this transaction, we have accounted for the consolidation of these entities using the acquisition method of accounting.

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

			Millions of Dollars
Cash contributed			$	404
Fair value of transferred equity interest			634
Fair value of previously held equity interests			3,853
Total merger consideration			$	4,891

The aggregate purchase consideration noted above was allocated to the assets acquired and liabilities assumed of the entities consolidated based upon their estimated fair values as of the DCP Midstream Merger on August 17, 2022. We finalized the valuation of the assets acquired and liabilities assumed during the three months ended September 30, 2023, prior to the end of the one-year measurement period on August 16, 2023.

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

			Millions of Dollars
Fair value of assets acquired:			As Originally Reported			Adjustments			As Adjusted
Cash and cash equivalents			$	98		—			98
Accounts and notes receivable			1,003			—			1,003
Inventories			74			238			312
Prepaid expenses and other current assets			439			13			452
Investments and long-term receivables			2,192			( 125 )			2,067
Properties, plants and equipment			12,837			193			13,030
Intangibles			36			( 36 )			—
Other assets			343			( 158 )			185
Total assets acquired			17,022			125			17,147
Fair value of liabilities assumed:
Accounts payable			912			3			915
Short-term debt			625			( 2 )			623
Accrued income and other taxes			107			13			120
Employee benefit obligation—current			50			22			72
Other accruals			497			( 6 )			491
Long-term debt			4,541			40			4,581
Asset retirement obligations and accrued environmental costs			168			16			184
Deferred income taxes			40			14			54
Employee benefit obligations			54			—			54
Other liabilities and deferred credits			227			36			263
Total liabilities assumed			7,221			136			7,357
Fair value of net assets			9,801			( 11 )			9,790
Less: Fair value of noncontrolling interests			4,910			( 11 )			4,899
Total merger consideration			$	4,891		—			4,891

The adjustments reflected in the table above include reclassification adjustments we made to the purchase price allocation to conform with our historical presentation and adjustments we made to the estimated fair value of certain assets acquired and liabilities assumed during the measurement period. The adjustments to our purchase price allocation recorded during the measurement period were not material. See Note 19—Fair Value Measurements, for additional information on the determination of the fair value of the DCP Midstream Merger.

In connection with the DCP Midstream Merger, we recognized before-tax gains totaling $ 2,831 million from remeasuring our previously held equity investments in DCP Midstream, DCP Sand Hills and DCP Southern Hills to their fair values and a before tax gain of $ 182 million related to the transfer of a 35.75 % indirect economic interest in Gray Oak Pipeline to our co-venturer. These before-tax gains are included in the “Other income” line item in our consolidated statement of income for the year ended December 31, 2022, and are reported in the Midstream segment. See Note 19—Fair Value Measurements, for additional information on the determination of the fair value of DCP Midstream Class A Segment, DCP Sand Hills and DCP Southern Hills.

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

			Millions of Dollars
Sales and other operating revenues			$	4,531
Net Income Attributable to Phillips 66			216

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presents consolidated results for the years ending December 31, 2022 and 2021, as if the DCP Midstream Merger occurred on January 1, 2021. The unaudited pro forma information includes adjustments based on available information, and we believe the estimates and assumptions used are reasonable, and that the significant effects of the transactions are properly reflected in the unaudited pro forma information. An aggregate before-tax gain of $ 2,831 million was included in the pro forma financial information for the year ended December 31, 2021, which is related to the remeasurement of the previously held equity investments in DCP Midstream, DCP Sand Hills and DCP Southern Hills to their fair values in connection with the DCP Midstream Merger. Adjustments related to the economic interest change in our equity investment in Gray Oak Pipeline were excluded from the pro forma financial information.

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

			Year Ended December 31
			2022						2021
Sales and other operating revenues (millions)			$	177,127					119,027
Net Income Attributable to Phillips 66 (millions)			8,847						3,360
Net Income Attributable to Phillips 66 per share—basic (dollars)			18.74						7.61
Net Income Attributable to Phillips 66 per share—diluted (dollars)			18.68						7.60

Pending Midstream Acquisition

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

Marketing and Specialties Acquisitions

On October 1, 2024, we acquired a marketing business on the U.S. West Coast for total consideration of $ 65 million. These operations were acquired to support the placement of renewable diesel produced by the Rodeo Renewable Energy Complex (Rodeo Complex). For this acquisition, we provisionally recorded $ 17 million of amortizable intangible assets, primarily customer relationships; $ 62 million of PP&E, including finance lease right of use assets; $ 31 million of net working capital; and $ 45 million of finance lease liabilities. The fair values of the assets acquired and liabilities assumed are preliminary and subject to change until we finalize our accounting for this acquisition.

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Disaggregated Revenues

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

			Millions of Dollars
			2024						2023						2022
Product Line and Services
Refined petroleum products and renewable fuels			$	103,685					108,644						131,798
Crude oil resales			22,008						20,824						20,574
NGL and natural gas			14,548						14,467						16,174
Services and other*			2,912						3,464						1,444
Consolidated sales and other operating revenues			$	143,153					147,399						169,990
Geographic Location**
United States			$	113,599					118,786						136,995
United Kingdom			12,713						14,642						16,741
Germany			5,265						5,547						6,392
Other countries			11,576						8,424						9,862
Consolidated sales and other operating revenues			$	143,153					147,399						169,990
* Includes derivatives-related activities. See Note 18—Derivatives and Financial Instruments, for additional information.
** Sales and other operating revenues are attributable to countries based on the location of the operations generating the revenues.

Contract-Related Assets and Liabilities

At December 31, 2024 and 2023, receivables from contracts with customers were $ 8,615 million and $ 9,638 million, respectively. Significant noncustomer balances, such as buy/sell receivables and excise tax receivables, were excluded from these amounts.

Our contract-related assets also include payments we make to our marketing customers related to incentive programs. 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 December 31, 2024 and 2023, our asset balances related to such payments were $ 643 million and $ 537 million, respectively.

Our contract liabilities primarily represent advances from our customers prior to product or service delivery. At December 31, 2024 and 2023, contract liabilities were $ 232 million and $ 187 million, respectively.

Remaining Performance Obligations

Most of our contracts with customers are spot contracts or term contracts with only variable consideration. We do not disclose remaining performance obligations for these contracts as the expected duration is one year or less or because the variable consideration has been allocated entirely to an unsatisfied performance obligation. We also have certain contracts in our Midstream segment that include minimum volume commitments with fixed pricing. At December 31, 2024, the remaining performance obligations related to these minimum volume commitment contracts amounted to $ 566 million. This amount excludes variable consideration and estimates of variable rate escalation clauses in our contracts with customers, and is expected to be recognized through 2031 with a weighted average remaining life of three years as of December 31, 2024.

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We are exposed to credit losses primarily through our sales of refined petroleum products, renewable fuels, renewable feedstocks, crude oil, NGL and natural gas. We assess each counterparty’s ability to pay for the products we sell by conducting a credit review. The credit review considers our expected billing exposure and timing for payment and the counterparty’s established credit rating or our assessment of the counterparty’s creditworthiness based on our analysis of their financial statements when a credit rating is not available. We also consider contract terms and conditions, country and political risk, and business strategy in our evaluation. A credit limit is established for each counterparty based on the outcome of this review. We may require collateralized asset support or a prepayment to mitigate credit risk.

We monitor our ongoing credit exposure through active review of counterparty balances against contract terms and due dates. Our activities include timely account reconciliations, dispute resolution and payment confirmations. We may employ collection agencies and legal counsel to pursue recovery of defaulted receivables. 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 December 31, 2024 and 2023, we reported $ 11,033 million and $ 11,730 million of accounts and notes receivable, net of allowances of $ 70 million and $ 71 million, respectively. Based on an aging analysis at December 31, 2024, more than 95 % of our accounts receivable were outstanding less than 60 days.

We are also exposed to credit losses from off-balance sheet exposures, such as guarantees of joint venture debt and accounts receivables sold under a securitization facility, as well as standby letters of credit. See Note 15—Debt, Note 16—Guarantees, and Note 17—Contingencies and Commitments, for more information on these off-balance sheet exposures.

Inventories at December 31 consisted of the following:

			Millions of Dollars
			2024						2023
Crude oil and products			$	3,547					3,330
Materials and supplies			448						420
			$	3,995					3,750

Inventories valued on the LIFO basis totaled $ 3,443 million and $ 3,050 million at December 31, 2024 and 2023, respectively. The estimated excess of current replacement cost over LIFO cost of inventories amounted to approximately $ 4.9 billion and $ 5.3 billion at December 31, 2024 and 2023, respectively.

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Components of investments and long-term receivables at December 31 were:

			Millions of Dollars
			2024						2023
Equity investments			$	14,013					14,728
Other investments			191						195
Loans and long-term receivables			174						379
			$	14,378					15,302

Equity Investments

The following table represents our significant investments in unconsolidated affiliates at December 31:

			At December 31, 2024												Millions of Dollars
			VIE						Ownership Percentage						2024						2023
Chevron Phillips Chemical Company LLC									50.00		%				$	7,819					7,341
WRB Refining LP *									50.00						2,323						2,736
Gulf Coast Express Pipeline LLC									25.00						776						800
Dakota Access, LLC									25.00						777						538
Front Range Pipeline LLC									33.33						459						477
Rockies Express Pipeline LLC **									—						—						451
CF United LLC ***									47.09						284						350
OnCue Holdings, LLC ****			X						50.00						185						166
* See Note 15—Debt, for additional information regarding the non-cash distribution of WRB Refining LP’s (WRB) Advance Term Loan, which reduced our investment balance by $ 290 million.
** Sold as of June 14, 2024. See discussion in Investment Dispositions section below.
*** On January 1, 2024, CF United LLC (CF United) ceased to be a VIE following the completion of the acquisition of another joint venture in which we had an ownership interest. In connection with this acquisition, the governing agreement for CF United was amended and restated. The amended and restated agreement included removal of a put option that required us to purchase our co-venturer’s interest based on a fixed multiple that was considered a variable interest.
**** We fully guarantee various debt agreements of OnCue Holdings, LLC (OnCue), and our co-venturer does not participate in the guarantees. This entity is considered a VIE because our debt guarantees resulted in OnCue not being exposed to all potential losses. We have determined we are not the primary beneficiary because we do not have the power to direct the activities that most significantly impact economic performance. At December 31, 2024, our maximum exposure to loss was $ 245 million, which represented the book value of our investment in OnCue of $ 185 million and guaranteed debt obligations of $ 60 million.

The following table presents significant basis differences between the carrying value of our investments in unconsolidated affiliates and our share of their underlying equity at December 31:

			Millions of Dollars
			2024						2023
Excess (deficit) of Carrying Value over (under) Underlying Equity in Unconsolidated Affiliates
WRB Refining LP			$	( 1,526 )					( 1,400 )
Gulf Coast Express Pipeline LLC			393						415
Front Range Pipeline LLC			280						292
Rockies Express Pipeline LLC *			—						261
* Sold as of June 14, 2024. See further discussion in “Investment Dispositions” section below.

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The basis differences result from the carrying values of our investments being higher or lower than our share of the underlying equity of our unconsolidated affiliates. Carrying amounts in excess of the underlying equity of our unconsolidated affiliates are amortized and recognized as a decrease to equity earnings over the remaining life of the underlying long-lived assets of the affiliate. Carrying amounts that are less than the underlying equity of our unconsolidated affiliates are amortized and recognized as a benefit to equity earnings over the remaining life of the underlying long-lived assets of the affiliate.

Dakota Access, LLC (Dakota Access) and Energy Transfer Crude Oil Company, LLC (ETCO)

Dakota Access is a 25 percent-owned joint venture that owns a pipeline system transporting crude oil from the Bakken/Three Forks production area in North Dakota to Patoka, Illinois. ETCO is a 25 percent-owned joint venture that owns a connecting crude oil pipeline system that extends from Patoka to Nederland, Texas. These two pipeline systems collectively form the Bakken Pipeline system, which is operated by a co-venturer.

In 2020, the trial court presiding over litigation brought by the Standing Rock Sioux Tribe (the Tribe) ordered the U.S. Army Corps of Engineers (USACE) to prepare an Environmental Impact Statement (EIS) addressing an easement under Lake Oahe in North Dakota. The trial court later vacated the easement. Although the easement is vacated, the USACE has no plans to stop pipeline operations while it proceeds with the EIS, and the Tribe’s request for a shutdown was denied in May 2021. In June 2021, the trial court dismissed the litigation entirely. Once the EIS is completed, new litigation or challenges may be filed.

In February 2022, the U.S. Supreme Court (the Supreme Court) denied Dakota Access’ writ of certiorari requesting the Supreme Court to review the trial court’s decision to order the EIS and vacate the easement. Therefore, the requirement to prepare the EIS stood. Also in February 2022, the Tribe withdrew as a cooperating agency, causing the USACE to halt the EIS process while the USACE engaged with the Tribe on their reasons for withdrawing.

The draft EIS process resumed in August 2022, and in September 2023, the USACE published its draft EIS for public comment. The USACE identified five potential outcomes but did not indicate which one it preferred. The options comprise two “no action” alternatives where the USACE would deny an easement to Dakota Access and require it to shut down the pipeline and either remove the pipe from under Lake Oahe or allow the pipeline to be abandoned-in-place under the lake. The USACE also identified three “action” alternatives; two of them contemplate that the USACE would reissue the easement to Dakota Access under essentially the same terms as 2017 with either the same or a larger volume of oil allowed through the pipeline, while the third alternative would require decommissioning of the current pipeline and construction of a new line 39 miles upstream from the current location.

The public comment period concluded on December 13, 2023. The USACE plans to review the comments and issue its final EIS in early 2026. The Record of Decision will follow within 30 to 60 days after the issuance of the final EIS. The final EIS must be completed before the USACE can reauthorize the easement for the pipeline. If reauthorization occurs, new litigation challenging the reauthorization may be filed.

In October 2024, the Tribe filed another lawsuit against the USACE in federal district court in Washington, D.C., again challenging USACE’s allowance of pipeline operations while the EIS process proceeds. In this lawsuit, the Tribe purports to introduce new evidence regarding the pipeline’s proximity to a reservoir and attempts to relitigate arguments about the need for injunctive relief to support its position that the Supreme Court should halt pipeline operations. A consortium of 13 states has joined Dakota Access as intervenors. The consortium argues that the pipeline reduces pollution compared to other modes of transportation and that Dakota Access is integral to the health of regional energy and agriculture markets. The Tribe’s prior request for a shutdown was denied in May 2021. This latest lawsuit seeking a shutdown does not change the current deadline for the issuance of the final EIS.

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 December 31, 2024, the aggregate principal amount outstanding of Dakota Access’ senior unsecured notes was $ 850 million.

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In addition, Phillips 66 Partners 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 December 31, 2024, 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 December 31, 2024.

At December 31, 2024 and 2023, the aggregate book value of our investments in Dakota Access and ETCO was $ 883 million and $ 640 million, respectively.

Investment Dispositions

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

On August 1, 2024, we sold our ownership interests in certain gathering and processing assets in Louisiana and Alabama for cash proceeds of $ 173 million and recognized a before-tax gain of $ 18 million, which is included in the “Net gain on dispositions” line item on our consolidated statement of income for the year ended December 31, 2024, and is reported in the Midstream segment.

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

Subsequent Investment Dispositions

On January 30, 2025, we sold our 25 % ownership interest in Gulf Coast Express Pipeline LLC for cash proceeds of $ 853 million. The equity investment balance was $ 776 million as of December 31, 2024.

On January 31, 2025, we sold our 49 % ownership interest in Coop Mineraloel AG (Coop). We received cash proceeds of 1.06 billion Swiss francs, consisting of a sales price of approximately 977 million Swiss francs and a final dividend relating to financial year 2024 of 83 million Swiss francs from Coop that was paid on January 30, 2025. We also settled the foreign currency forward contracts entered into in connection with the asset sale, in which we sold 1.06 billion Swiss francs in exchange for $ 1.24 billion U.S. dollars. We recognized a before-tax unrealized gain of $ 67 million from the foreign currency forward contracts in the “Net gain on dispositions” line item on our consolidated income statement for the year ended December 31, 2024, which is reported in our M&S segment. The equity investment balance was $ 164 million as of December 31, 2024.

Related Party Loans

We and our co-venturer have from time to time provided member loans to WRB. At December 31, 2024 and 2023, no member loans were outstanding.

Equity Affiliate Distributions

Total cash distributions received from affiliates were $ 1,525 million, $ 1,396 million, and $ 1,832 million for the years ended December 31, 2024, 2023 and 2022, respectively. In addition, at December 31, 2024, retained earnings included approximately $ 3.7 billion related to the undistributed earnings of affiliated companies.

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Summarized Equity Affiliate Financial Information

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

			Millions of Dollars
			2024						2023						2022
Revenues			$	42,069					42,078						60,981
Income before income taxes			4,846						5,350						7,616
Net income			4,674						5,160						7,414
Current assets			6,820						6,759						7,511
Noncurrent assets			46,480						46,241						46,527
Current liabilities			6,494						5,750						5,592
Noncurrent liabilities			9,304						10,980						11,412
Noncontrolling interests			2						2						2

Our investment in PP&E is recorded at cost. Investments in refining and processing facilities are generally depreciated on a straight-line basis over a 25-year life, pipeline assets over a 45 -year life, terminal assets over a 35 -year life, and gathering systems over a 35-year life. The company’s investment in PP&E, with the associated accumulated depreciation and amortization (Accum. D&A), at December 31 was:

			Millions of Dollars
			2024																		2023
			Gross PP&E						Accum. D&A						Net PP&E						Gross PP&E						Accum. D&A						Net PP&E
Midstream			$	26,187					4,820						21,367						26,124						4,382						21,742
Chemicals			—						—						—						—						—						—
Refining			22,274						11,991						10,283						23,110						12,150						10,960
Marketing and Specialties			2,091						1,267						824						1,997						1,166						831
Renewable Fuels			3,716						1,669						2,047						2,311						953						1,358
Corporate and Other			1,688						945						743						1,650						829						821
			$	55,956					20,692						35,264						55,192						19,480						35,712

See Note 4—Restructuring for information regarding our intention to cease operations at our Los Angeles Refinery. See Note 5—Business Combinations and Note 19—Fair Value Measurements, for additional information on the DCP Midstream Merger, accounting treatment and the associated fair value measurements. See Note 12—Impairments, for information regarding PP&E impairments.

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

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The carrying amount of goodwill by segment at December 31 was:

			Millions of Dollars
			Midstream												Marketing and Specialties						Total
Balance at December 31, 2022			$	626											860						1,486
Goodwill assigned to acquisitions			—												64						64
Balance at December 31, 2023			626												924						1,550
Goodwill assigned to acquisitions			22												3						25
Balance at December 31, 2024			$	648											927						1,575

On July 1, 2024, we acquired Pinnacle Midstream in our Midstream segment and recognized goodwill of $ 21 million associated with this acquisition. In August 2023, we acquired a marketing business on the U.S. West Coast in our M&S segment and recognized goodwill of $ 67 million associated with this acquisition. Refer to Note 5—Business Combinations, for additional information.

Intangible Assets

Intangible Assets with Indefinite Useful Lives

The gross carrying value of indefinite-lived intangible assets at December 31 consisted of the following:

			Millions of Dollars
			2024						2023
Trade names and trademarks			$	503					504
Refinery air and operating permits			109						196
			$	612					700

Intangible Assets with Finite Useful Lives

The net book value of our amortized intangible assets was $ 549 million at December 31, 2024, and $ 220 million at December 31, 2023. These balances include accumulated amortization of $ 408 million and $ 234 million, at December 31, 2024 and 2023, respectively. The amortized intangible assets are primarily related to customer relationships.

For the years ended December 31, 2024, 2023 and 2022, amortization expense was $ 53 million, $ 33 million and $ 27 million, respectively. Expected expenses beyond 2025 are less than $ 50 million per year. The amortization expenses are expected to be $ 130 million in 2025, which is primarily related to our plan to cease operations at our Los Angeles Refinery. The book value of the amortized intangible assets, which were previously considered indefinite-lived, associated with our Los Angeles Refinery was $ 80 million at December 31, 2024. Refer to Note 4—Restructuring, for additional information regarding our plan to cease operations at our Los Angeles Refinery.

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			Millions of Dollars
			2024						2023						2022
Midstream			$	346					3						1
Refining			106						10						13
Marketing and Specialties			3						3						—
Corporate and Other			1						8						46
Total impairments			$	456					24						60

For the year ended December 31, 2024, we recorded before-tax impairments totaling $ 456 million, which included $ 346 million recorded in our Midstream segment and $ 106 million recorded in our Refining segment. Midstream segment impairments included $ 224 million related to certain gathering and processing assets in Texas, $ 35 million related to an equity investment in a crude pipeline in Oklahoma, and $ 28 million related to certain crude gathering assets in Texas. Before-tax impairments for the year ended December 31, 2024 also included $ 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.

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Asset retirement obligations and accrued environmental costs at December 31 were:

			Millions of Dollars
			2024						2023
Asset retirement obligations			$	771					537
Accrued environmental costs			439						446
Total asset retirement obligations and accrued environmental costs			1,210						983
Asset retirement obligations and accrued environmental costs due within one year*			( 81 )						( 119 )
Long-term asset retirement obligations and accrued environmental costs			$	1,129					864

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

Asset Retirement Obligations

We have asset retirement obligations that we are required to perform under law or contract once an asset is permanently taken out of service. Our recognized asset retirement obligations primarily involve asbestos abatement at our current refineries, or at sites we own that were previously utilized as refineries; decommissioning, removal or dismantlement of certain assets at refineries that have ceased or will cease operations; decommissioning, removal or dismantlement of certain midstream pipelines and processing facilities; and dismantlement or removal of assets at certain leased international marketing sites. Most of our asset retirement obligations are not expected to be paid until many years in the future and are expected to be funded from general company resources at the time of removal.

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

			Millions of Dollars
			2024						2023
Balance at January 1			$	537					565
Accretion of discount			27						25
New obligations			261						—
Changes in estimates of existing obligations			33						23
Spending on existing obligations			( 25 )						( 58 )
Asset dispositions			( 55 )						( 23 )
Foreign currency translation			( 7 )						5
Balance at December 31			$	771					537

During the year ended December 31, 2024, our asset retirement balance increased $ 234 million. This increase was primarily due to new obligations of $ 205 million associated with the expected cessation of operations at the Los Angeles Refinery in the fourth quarter of 2025. See Note 4—Restructuring, for additional information.

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Accrued Environmental Costs

Of our total accrued environmental costs at December 31, 2024, $ 280 million was primarily related to cleanup at current domestic refineries, or at sites we own that were previously utilized as domestic refineries, and underground storage tanks at U.S. service stations; $ 111 million was associated with non-operated sites; and $ 48 million was related to sites at which we have been named a potentially responsible party under federal or state laws. A large portion of our expected environmental expenditures have been discounted as these obligations were acquired in various business combinations. Expected expenditures for acquired environmental obligations were discounted using a weighted-average discount rate of approximately 5 %. At December 31, 2024, the accrued balance for acquired environmental liabilities was $ 239 million. The expected future undiscounted payments related to the portion of the accrued environmental costs that have been discounted are: $ 12 million in 2025, $ 30 million in 2026, $ 12 million in 2027, $ 15 million in 2028, $ 18 million in 2029, and $ 219 million in the aggregate for all years after 2029.

The numerator of basic earnings per share (EPS) is net income attributable to Phillips 66, adjusted for noncancelable dividends paid on unvested share-based employee awards during the vesting period (participating securities). The denominator of basic EPS is the sum of the daily weighted-average number of common shares outstanding during the periods presented and fully vested stock and unit awards that have not yet been issued as common stock. The numerator of diluted EPS is also based on net income attributable to Phillips 66, which is reduced by dividend equivalents paid on participating securities for which the dividends are more dilutive than the participation of the awards in the earnings of the periods presented. To the extent unvested stock, unit or option awards and vested unexercised stock options are dilutive, they are included with the weighted-average common shares outstanding in the denominator. Treasury stock is excluded from the denominator in both basic and diluted EPS.

			2024									2023									2022
			Basic			Diluted						Basic			Diluted						Basic			Diluted
Amounts Attributed to Phillips 66 Common Stockholders (millions) :
Net Income Attributable to Phillips 66			$	2,117		2,117						7,015			7,015						11,024			11,024
Income allocated to participating securities			( 10 )			( 10 )						( 11 )			—						( 10 )			—
Net income available to common stockholders			$	2,107		2,107						7,004			7,015						11,014			11,024
Weighted-average common shares outstanding (thousands) :			418,607			420,174						448,381			450,136						469,436			471,497
Effect of share-based compensation			1,567			1,714						1,755			3,074						2,061			2,234
Weighted-average common shares outstanding—EPS			420,174			421,888						450,136			453,210						471,497			473,731
Earnings Per Share of Common Stock (dollars)			$	5.01		4.99						15.56			15.48						23.36			23.27

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Short-term and long-term debt at December 31 was:

			Millions of Dollars
			December 31, 2024
			Phillips 66			Phillips 66 Company			Phillips 66 Partners			DCP LP			Total
3.605 % Senior Notes due February 2025			$	—		—			59			—			59
5.375 % Senior Notes due July 2025			—			—			—			525			525
1.300 % Senior Notes due February 2026			500			—			—			—			500
3.550 % Senior Notes due October 2026			—			458			34			—			492
5.625 % Senior Notes due July 2027			—			—			—			500			500
4.950 % Senior Notes due December 2027			—			750			—			—			750
3.750 % Senior Notes due March 2028			—			427			73			—			500
3.900 % Senior Notes due March 2028			800			—			—			—			800
5.125 % Senior Notes due May 2029			—			—			—			600			600
3.150 % Senior Notes due December 2029			—			570			30			—			600
8.125 % Senior Notes due August 2030			—			—			—			300			300
2.150 % Senior Notes due December 2030			850			—			—			—			850
5.250 % Senior Notes due June 2031			—			1,200			—			—			1,200
3.250 % Senior Notes due February 2032			—			—			—			400			400
5.300 % Senior Notes due June 2033			—			900			—			—			900
4.650 % Senior Notes due November 2034			1,000			—			—			—			1,000
4.950 % Senior Notes due March 2035			—			600			—			—			600
6.450 % Senior Notes due November 2036			—			—			—			300			300
6.750 % Senior Notes due September 2037			—			—			—			450			450
5.875 % Senior Notes due May 2042			1,500			—			—			—			1,500
5.600 % Senior Notes due April 2044			—			—			—			400			400
4.875 % Senior Notes due November 2044			1,700			—			—			—			1,700
4.680 % Senior Notes due February 2045			—			442			8			—			450
4.900 % Senior Notes due October 2046			—			605			20			—			625
3.300 % Senior Notes due March 2052			1,000			—			—			—			1,000
5.650 % Senior Notes due June 2054			—			500			—			—			500
5.500 % Senior Notes due March 2055			—			600			—			—			600
Commercial paper due January 2025 at 4.695 % at year-end 2024			435			—			—			—			435
Uncommitted Facility due July 2025 at 5.300 % at year-end 2024			—			400			—			—			400
Receivables Securitization Facility due September 2025 at 5.182 % at year-end 2024			—			375			—			—			375
Floating Rate Term Loan due June 2026 at 5.445 % at year-end 2024			—			550			—			—			550
Other			1			—			—			—			1
Debt at face value			7,786			8,377			224			3,475			19,862
Finance leases															352
Software obligations															17
Net unamortized discounts, debt issuance costs and acquisition fair value adjustments															( 169 )
Total debt															20,062
Short-term debt															( 1,831 )
Long-term debt															$	18,231

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			Millions of Dollars
			December 31, 2023
			Phillips 66			Phillips 66 Company			Phillips 66 Partners			DCP LP			Total
0.900 % Senior Notes due February 2024			$	800		—			—			—			800
2.450 % Senior Notes due December 2024			—			277			23			—			300
3.605 % Senior Notes due February 2025			—			441			59			—			500
3.850 % Senior Notes due April 2025			650			—			—			—			650
5.375 % Senior Notes due July 2025			—			—			—			825			825
1.300 % Senior Notes due February 2026			500			—			—			—			500
3.550 % Senior Notes due October 2026			—			458			34			—			492
5.625 % Senior Notes due July 2027			—			—			—			500			500
4.950 % Senior Notes due December 2027			—			750			—			—			750
3.750 % Senior Notes due March 2028			—			427			73			—			500
3.900 % Senior Notes due March 2028			800			—			—			—			800
5.125 % Senior Notes due May 2029			—			—			—			600			600
3.150 % Senior Notes due December 2029			—			570			30			—			600
8.125 % Senior Notes due August 2030			—			—			—			300			300
2.150 % Senior Notes due December 2030			850			—			—			—			850
3.250 % Senior Notes due February 2032			—			—			—			400			400
5.300 % Senior Notes due June 2033			—			500			—			—			500
4.650 % Senior Notes due November 2034			1,000			—			—			—			1,000
6.450 % Senior Notes due November 2036			—			—			—			300			300
6.750 % Senior Notes due September 2037			—			—			—			450			450
5.875 % Senior Notes due May 2042			1,500			—			—			—			1,500
5.600 % Senior Notes due April 2044			—			—			—			400			400
4.875 % Senior Notes due November 2044			1,700			—			—			—			1,700
4.680 % Senior Notes due February 2045			—			442			8			—			450
4.900 % Senior Notes due October 2046			—			605			20			—			625
3.300 % Senior Notes due March 2052			1,000			—			—			—			1,000
Securitization facility due August 2024			—			—			—			350			350
Floating Rate Term Loan due June 2026 at 6.456 % at year-end 2023			—			1,250			—			—			1,250
Floating Rate Advance Term Loan due 2035 at 6.096 % at year-end 2023—related party			25			—			—			—			25
Floating Rate Advance Term Loan due 2038 at 6.490 % at year-end 2023—related party			265			—			—			—			265
Revolving Credit Facility due 2027 6.512 % at year-end 2023			—			—			—			25			25
Other			1			—			—			—			1
Debt at face value			9,091			5,720			247			4,150			19,208
Finance leases															305
Software obligations															13
Net unamortized discounts, debt issuance costs and acquisition fair value adjustments															( 167 )
Total debt															19,359
Short-term debt															( 1,482 )
Long-term debt															$	17,877

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Maturities of borrowings outstanding at December 31, 2024, inclusive of net unamortized discounts and debt issuance costs, for each of the years from 2025 through 2029 are $ 1,831 million, $ 1,578 million, $ 1,262 million, $ 1,331 million and $ 1,228 million, respectively.

Issuances

On September 9, 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, commencing on March 15, 2025.

On February 28, 2024, Phillips 66 Company issued $ 1.5 billion aggregate principal amount of senior unsecured notes that are fully and unconditionally guaranteed by Phillips 66. 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 March 29, 2023, Phillips 66 Company issued $ 1.25 billion aggregate principal amount of senior unsecured notes that are fully and unconditionally guaranteed by Phillips 66. The senior unsecured notes issuance consisted of:

• $ 750 million aggregate principal amount of 4.950 % Senior Notes due December 2027.

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

Repayments

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

On March 29, 2024, DCP LP redeemed $ 300 million of its 5.375 % Senior Notes due July 2025. After the redemption, an aggregate principal amount of $ 525 million remained outstanding.

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.

On May 19, 2023, DCP LP redeemed its 5.850 % junior subordinated notes due May 2043 with an aggregate principal amount outstanding of $ 550 million. On the date of redemption, our carrying value of DCP LP’s junior subordinated notes was $ 497 million, which resulted in a $ 53 million before-tax loss. DCP LP’s junior subordinated notes were adjusted to fair value on August 17, 2022, in connection with the consolidation of DCP LP. See Note 19—Fair Value Measurements, for additional information regarding the fair value of DCP LP’s junior subordinated notes.

On March 15, 2023, DCP LP repaid its 3.875 % senior unsecured notes due March 2023 with an aggregate principal amount of $ 500 million.

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Discharge of Senior Notes

On September 20, 2024, we extinguished (i) the remaining $ 441 million outstanding principal amount of Phillips 66 Company’s 3.605 % senior notes due February 2025 (2025 P66 Co Notes), and (ii) the remaining $ 650 million outstanding principal amount of Phillips 66’s 3.850 % senior notes due April 2025 (the 2025 PSX Notes, and together with the 2025 P66 Co Notes, the Discharged Notes), whereby we irrevocably transferred a total of $ 1,100 million in government obligations to the trustee of the 2025 P66 Co Notes and the 2025 PSX Notes. The cash paid to purchase the government obligations is included within investing cash flows on our consolidated statement of cash flows. These government obligations will yield sufficient principal and interest over their remaining term to permit the trustee to satisfy the remaining principal and interest due on the Discharged Notes. Phillips 66 and Phillips 66 Company are no longer the primary obligors under the Discharged Notes. The transfer of the government obligations to the trustee was accounted for as a transfer of financial assets. If the trustee is unable to apply the government obligations to fund the remaining principal and interest payments on the Discharged Notes, then the Company’s obligations under the Indenture with respect to the Discharged Notes will be revived and reinstated. We deem the likelihood of such event to be remote with no impact to the legal isolation of the assets. Accordingly, the senior notes and the government obligations were derecognized on our balance sheet at December 31, 2024. For the year ended December 31, 2024, we recognized an immaterial gain on the extinguishment of this debt.

Term Loan Agreement

On March 27, 2023, Phillips 66 Company, a wholly owned subsidiary of Phillips 66, entered into a $ 1.5 billion delayed draw term loan agreement guaranteed by Phillips 66 (the Term Loan Agreement). The Term Loan Agreement provides for a single borrowing during a 90-day period commencing on the closing date, which borrowing was contingent upon the completion of the DCP LP Merger. 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 adjusted term Secured Overnight Financing Rate (SOFR) in effect from time to time plus the applicable margin; or (b) the reference rate plus the applicable margin, as defined in the Term Loan Agreement. At December 31, 2024 and 2023, $ 550 million and $ 1.25 billion were borrowed under the Term Loan Agreement, which matures in June 2026, respectively.

Related Party Advance Term Loan Agreements

At December 31, 2023, borrowings outstanding under our Advance Term Loan agreements with WRB totaled $ 290 million. Borrowings under these agreements were due between 2035 and 2038 and bore interest at a floating rate based on an adjusted term SOFR plus an applicable margin, payable on the last day of each month. On December 31, 2024, WRB distributed its Advance Term Loan with a principal balance of $ 290 million, including the right to receive any accrued but unpaid interest, to Phillips 66 Company, resulting in the reduction of our related party debt balance and our investment in WRB by $ 290 million. The distribution was recognized as a non-cash investing and financing transaction.

Accounts Receivable Securitization

On September 30, 2024, Phillips 66 Company entered into a 364 -day, $ 500 million accounts receivable securitization facility (the Receivables Securitization Facility). Under the Receivables Securitization Facility, Phillips 66 Company sells or contributes on an ongoing basis, certain of its receivables, together with related security and interests in the proceeds thereof, to its wholly owned subsidiary, Phillips 66 Receivables LLC (P66 Receivables), a consolidated and bankruptcy-remote special purpose entity created for the sole purpose of transacting under the Receivables Securitization Facility. Under the Receivables Securitization Facility, P66 Receivables may borrow and incur indebtedness from, and/or sell certain receivables in an amount not to exceed $ 500 million in the aggregate, and will secure its obligations with a pledge of undivided interests in such receivables, together with related security and interests in the proceeds thereof, to PNC Bank, National Association, as Administrative Agent, for the benefit of the secured parties thereunder. Accounts outstanding under the Receivables Securitization Facility accrue interest at an adjusted SOFR plus the applicable margin. In all instances, Phillips 66 Company retains the servicing of the accounts receivables transferred.

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P66 Receivables’ sole activity consists of purchasing receivables from Phillips 66 Company, providing those receivables as collateral for P66 Receivables’ borrowings or on-selling certain of its receivables under the Receivables Securitization Facility. P66 Receivables is a separate legal entity with its own separate creditors, who will be entitled, upon its liquidation, to be satisfied out of P66 Receivables’ assets prior to assets or value in P66 Receivables becoming available to P66 Receivables’ equity holders. The assets of P66 Receivables, including any funds of P66 Receivables that may be commingled with funds of any of its affiliates for purposes of cash management and related efficiencies, are not available to pay creditors of Phillips 66 Company, Phillips 66 or any affiliate thereof. Collections on receivables in excess of amounts owed by P66 Receivables under the Receivables Securitization Facility are available to P66 Receivables for payment to Phillips 66 Company, for sales of its receivables to P66 Receivables under the Receivables Securitization Facility, and otherwise for distribution to Phillips 66 Company, in each case, subject to the terms set forth in the Receivables Securitization Facility. The amount available for borrowing or sale of receivables may be limited by the availability of eligible receivables and other customary factors and conditions, as well as the covenants set forth in the Receivables Securitization Facility.

Sales of accounts receivables under the Receivables Securitization Facility meet the sale criteria under ASC 860, Transfers and Servicing, and are derecognized from the consolidated balance sheet. P66 Receivables guarantees payment, in full, for accounts receivables sold to the purchasers. Cash receipts from the sale of accounts receivables under the Receivables Securitization Facility, received at the time of sale, are classified as cash flows from operating activities. For the year-ended December 31, 2024, we sold $ 125 million of accounts receivables in exchange for a $ 125 million reduction in our borrowings under the Receivables Securitization Facility, which was recognized as a non-cash financing transaction. We recognized an immaterial charge associated with the transfer of financial assets, which is included as a component within the line item “Selling, general and administrative expense” on our consolidated statement of income during the year ended December 31, 2024. At December 31, 2024, $ 121 million of the sold accounts receivable remained outstanding, which represents our maximum potential future exposure under the guarantee.

Borrowings under the Receivables Securitization Facility are recognized as short-term debt on the consolidated balance sheet. Borrowings are secured by the accounts receivables, held by P66 Receivables, which remain reported as accounts receivables on the consolidated balance sheet. At December 31, 2024, we had outstanding borrowings of $ 375 million under the Receivables Securitization Facility, secured by approximately $ 4.6 billion of accounts receivable held by P66 Receivables.

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

Credit Facilities and Commercial Paper

Phillips 66 and Phillips 66 Company

On January 13, 2025, we entered into a $ 200 million uncommitted credit facility (the 2025 Uncommitted Facility) with Phillips 66 Company as the borrower and Phillips 66 as the guarantor. The 2025 Uncommitted Facility contains covenants and events of default customary for unsecured uncommitted facilities. The 2025 Uncommitted Facility has no commitment fees or compensating balance requirements. Outstanding borrowings under the 2025 Uncommitted Facility bear interest at a rate of either (a) the adjusted term SOFR plus the applicable margin, (b) the adjusted daily simple SOFR plus the applicable margin or (c) the base rate, in each case plus the applicable margin. Each borrowing matures six months from the date of such borrowing. We may at any time prepay outstanding borrowings, in whole or in part, without premium or penalty. At February 21, 2025, no amount had been drawn under the 2025 Uncommitted Facility.

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. The 2024 Uncommitted Facility contains covenants and events of default customary for unsecured uncommitted facilities. The 2024 Uncommitted Facility has no commitment fees or compensating balance requirements. Outstanding borrowings under the 2024 Uncommitted Facility bear interest at a rate of either (a) the adjusted term SOFR, (b) the adjusted daily simple SOFR or (c) the reference rate, in each case plus the applicable margin. Each borrowing matures six months from the date of such borrowing. We may at any time prepay outstanding borrowings, in whole or in part, without premium or penalty. At December 31, 2024, the entire $ 400 million had been drawn under the 2024 Uncommitted Facility.

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On February 28, 2024, we entered into a new $ 5 billion revolving credit agreement (the Facility) with Phillips 66 Company as the borrower and Phillips 66 as the guarantor and a scheduled maturity date of February 28, 2029. The Facility replaced our previous $ 5 billion revolving credit facility dated as of June 23, 2022, with Phillips 66 Company as the borrower and Phillips 66 as the guarantor, and the previous revolving credit facility was terminated. The Facility contains customary covenants similar to the previous revolving credit facility, including a maximum consolidated net debt-to-capitalization ratio of 65 % as of the last day of each fiscal quarter. The Facility 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 Facility, in whole or in part, without premium or penalty. We have the option to increase the overall capacity to $ 6 billion, subject to certain conditions. We also have the option to extend the scheduled maturity of the Facility for up to two additional one -year terms, subject to, among other things, the consent of the lenders holding the majority of the commitments and of each lender extending its commitment. Outstanding borrowings under the Facility bear interest at either: (a) the adjusted term SOFR (as described in the Facility) in effect from time to time plus the applicable margin; 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 December 31, 2024 and 2023, no amounts were drawn under the Facility or the previous revolving credit facility, respectively.

Phillips 66 also has a $ 5 billion uncommitted commercial paper program for short-term working capital needs that is supported by the Facility. Commercial paper maturities are contractually limited to less than one year. At December 31, 2024, $ 435 million of commercial paper had been issued under this program. At December 31, 2023, no borrowings were outstanding under this program.

DCP Midstream Class A Segment

On March 15, 2024, DCP LP terminated its $ 1.4 billion credit facility and its accounts receivable securitization facility that previously provided for up to $ 350 million of borrowing capacity. At December 31, 2023, DCP LP had $ 25 million in borrowings outstanding under its $ 1.4 billion credit facility and $ 350 million of borrowings outstanding under its accounts receivable securitization facility, both of which were repaid during the three months ended March 31, 2024.

Total Committed Capacity Available

At December 31, 2024, and 2023, we had $ 4.6 billion and $ 6.4 billion, respectively, of total committed capacity available under the credit facilities described above.

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At December 31, 2024, 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. Unless the carrying amount of the liability is noted below, we have not recognized a liability either because the guarantees were issued prior to December 31, 2002, or because the fair value of the obligation is immaterial. In addition, unless otherwise stated, we are not currently performing with any significance under the guarantees and expect future performance to be either immaterial or have only a remote chance of occurrence.

Lease Residual Value Guarantees

Under the operating lease agreement for our headquarters facility in Houston, Texas, we have the option, at the end of the lease term in September 2025, to request to renew the lease, purchase the facility or assist the lessor in marketing it for resale. We have a residual value guarantee associated with the operating lease agreement with a maximum potential future exposure of $ 514 million at December 31, 2024. We also have residual value guarantees associated with railcar, airplane and truck leases with maximum potential future exposures totaling $ 175 million. These leases have remaining terms of one to ten years .

Guarantees of Joint Venture Obligations

In March 2019, Phillips 66 Partners and its co-venturers in Dakota Access provided a CECU in conjunction with a senior unsecured notes offering. See Note 9—Investments, Loans and Long-Term Receivables, for additional information regarding Dakota Access and the CECU.

At December 31, 2024, we also had other guarantees outstanding primarily for our portion of certain joint venture debt, which have remaining terms of up to five years . The maximum potential future exposures under these guarantees were approximately $ 189 million. Payment would be required if a joint venture defaults on its obligations.

Indemnifications

Over the years, we have entered into various agreements to sell ownership interests in certain corporations, joint ventures and assets that gave rise to indemnifications. Agreements associated with these sales include indemnifications for taxes, litigation, environmental liabilities, permits and licenses, employee claims, and real estate tenant defaults. The provisions of these indemnifications vary greatly. The majority of these indemnifications are related to environmental issues, which generally have indefinite terms and potentially unlimited exposure. At December 31, 2024 and 2023, the carrying amount of recorded indemnifications was $ 125 million and $ 159 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. In cases where the indemnification term is indefinite, we will reverse the liability when we have information to support the reversal. 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 December 31, 2024 and 2023, environmental accruals for known contamination of $ 100 million and $ 114 million, respectively, were included in the carrying amount of the recorded indemnifications noted above. These environmental accruals were primarily included in the “Asset retirement obligations and accrued environmental costs” line item on our consolidated balance sheet. For additional information about environmental liabilities, see Note 13—Asset Retirement Obligations and Accrued Environmental Costs and Note 17—Contingencies and Commitments.

Additionally, P66 Receivables has guaranteed all borrowings and receivables sold under our Receivables Securitization Facility. See Note 15—Debt for information regarding the guarantee under our Receivables Securitization Facility.

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Indemnification and Release Agreement

In 2012, in connection with our separation from ConocoPhillips, we entered into an Indemnification and Release Agreement. This agreement governs the treatment between ConocoPhillips and us of matters relating to indemnification, insurance, litigation responsibility and management, and litigation document sharing and cooperation arising in connection with the separation. Generally, the agreement provides for cross indemnities principally designed to place financial responsibility for the obligations and liabilities of our business with us and financial responsibility for the obligations and liabilities of ConocoPhillips’ business with ConocoPhillips. The agreement also establishes procedures for handling claims subject to indemnification and related matters.

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A number of lawsuits involving a variety of claims that arose in the ordinary course of business have been filed against us or are subject to indemnifications provided by us. We also may be required to remove or mitigate the effects on the environment of the placement, storage, disposal or release of certain chemical, mineral and petroleum substances at various active and inactive sites. We regularly assess the need for financial recognition or disclosure of these contingencies. In the case of all known contingencies (other than those related to income taxes), we accrue a liability when the loss is probable and the amount is reasonably estimable. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. We do not reduce these liabilities for potential insurance or third-party recoveries. If applicable, we accrue receivables for probable insurance or other third-party recoveries. In the case of income tax-related contingencies, we use a cumulative probability-weighted loss accrual in cases where sustaining a tax position is uncertain. See Note 24—Income Taxes, for additional information about income-tax-related contingencies.

Other than with respect to the legal matters described herein, based on currently available information, we believe it is remote that future costs related to known contingent liability exposures will exceed current accruals by an amount that would have a material adverse impact on our consolidated financial statements. As we learn new facts concerning contingencies, we reassess our position both with respect to accrued liabilities and other potential exposures. Estimates particularly sensitive to future changes include contingent liabilities recorded for environmental remediation, tax and legal matters. Estimated future environmental remediation costs are subject to change due to such factors as the uncertain magnitude of cleanup costs, the unknown time and extent of such remedial actions that may be required, and the determination of our liability in proportion to that of other potentially responsible parties. Estimated future costs related to tax and legal matters are subject to change as events evolve and as additional information becomes available during the administrative and litigation processes.

Environmental

We are subject to international, federal, state and local environmental laws and regulations. When we prepare our consolidated financial statements, we record accruals for environmental liabilities based on management’s best estimates, using information available at the time. We measure estimates and base contingent liabilities on currently available facts, existing technology and presently enacted laws and regulations, taking into account stakeholder and business considerations. When measuring contingent environmental liabilities, we also consider our prior experience in remediation of contaminated sites, other companies’ cleanup experience, and data released by the Environmental Protection Agency (EPA) or other organizations. We consider unasserted claims in our determination of environmental liabilities, and we accrue them in the period they are both probable and reasonably estimable.

Although liability for environmental remediation costs is generally joint and several for federal sites and frequently so for state sites, we are usually only one of many companies alleged to have liability at a particular site. Due to such joint and several liabilities, we could be responsible for all cleanup costs related to any site at which we have been designated as a potentially responsible party. We have been successful to date in sharing cleanup costs with other financially sound companies. Many of the sites for which we are potentially responsible are still under investigation by the EPA or the state agencies concerned. Prior to actual cleanup, those potentially responsible normally assess the site conditions, apportion responsibility and determine the appropriate remediation. In some instances, we may have no liability or may attain a settlement of liability. Where it appears that other potentially responsible parties may be financially unable to bear their proportional share, we consider this inability in estimating our potential liability, and we adjust our accruals accordingly. As a result of various acquisitions in the past, we assumed certain environmental obligations. Some of these environmental obligations are mitigated by indemnifications made by others for our benefit, although some of the indemnifications are subject to dollar and time limits.

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We are currently participating in environmental assessments and cleanups at numerous federal Superfund and comparable state sites. 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. We have not reduced these accruals for possible insurance recoveries. In the future, we may be involved in additional environmental assessments, cleanups and proceedings. See Note 13—Asset Retirement Obligations and Accrued Environmental Costs, for a summary of our accrued environmental liabilities.

Legal Proceedings

Our legal organization applies its knowledge, experience and professional judgment to the specific characteristics of our cases, employing a litigation management process to manage and monitor the legal proceedings against us. Our process facilitates the early evaluation and quantification of potential exposures in individual cases and enables the tracking of those cases that have been scheduled for trial and/or mediation. Based on professional judgment and experience in using these litigation management tools and available information about current developments in all our cases, our legal organization regularly assesses the adequacy of current accruals and determines if adjustment of existing accruals, or establishment of new accruals, is required.

Propel Fuels Litigation

In late 2017, as part of Phillips 66 Company’s evaluation of various opportunities in the renewable fuels business, Phillips 66 Company engaged with Propel Fuels, Inc. (Propel Fuels), a California company that distributes E85 and other alternative fuels through fueling kiosks. Ultimately, the parties were not able to reach an agreement and negotiations were terminated in August 2018. On February 17, 2022, Propel Fuels filed a lawsuit in the Superior Court of California, County of Alameda (the Propel Court), alleging that Phillips 66 Company misappropriated trade secrets related to Propel Fuels’ renewable fuels business during and after due diligence. On October 16, 2024, a jury returned a verdict against Phillips 66 Company for $ 604.9 million in compensatory damages and issued a willfulness finding. In 2025, the Propel Court is expected to rule on motions anticipated to be filed by Propel Fuels seeking exemplary damages and attorneys’ fees. Propel Fuels has asked the Propel Court to grant treble damages and Phillips 66 Company has filed a brief in opposition to that request. Also in 2025, the Propel Court is expected to rule on Phillips 66 Company’s motions for a judgment in its favor as a matter of law, or in the alternative to reduce the jury’s verdict or to grant a new trial. Phillips 66 Company denies any wrongdoing and intends to vigorously defend its position. As a result of the jury verdict, the Company has recorded an accrual of $ 604.9 million which is included in the “Selling, general and administrative expenses” line on our consolidated statement of income for the year ended December 31, 2024, and is reported in the M&S segment. In addition, the accrued amount is reflected as “Other liabilities and deferred credits” on our consolidated balance sheet as of December 31, 2024. However, it is reasonably possible that the estimate of the loss could change based on the progression of the case, including the appeals process. Because of the uncertainties associated with ongoing litigation, we are unable to estimate the range of reasonably possible loss that may be attributable to exemplary damages, if any, in excess of the amount accrued. If information were to become available that would allow us to reasonably estimate a range of potential exposure in an amount higher or lower than the amount already accrued, we would adjust our accrued liabilities accordingly. While Phillips 66 Company believes the jury verdict is not legally or factually supported and intends to pursue post-judgment remedies and file an appeal, there can be no assurances that such defense efforts will be successful. To the extent Phillips 66 Company is required to pay exemplary damages, it may have a material adverse effect on our financial position and results of operations.

Other Contingencies

We have contingent liabilities resulting from throughput agreements with pipeline and processing companies not associated with financing arrangements. 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 December 31, 2024, we had performance obligations secured by letters of credit and bank guarantees of $ 804 million related to various purchase and other commitments incident to the ordinary conduct of business.

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Long-Term Throughput Agreements and Take-or-Pay Agreements

We have certain throughput agreements and take-or-pay agreements in support of third-party financing arrangements. The agreements typically provide for crude oil transportation to be used in the ordinary course of our business. At December 31, 2024, the estimated aggregate future payments under these agreements were on average $ 315 million per year for each year from 2025 through 2029 and $ 369 million in aggregate for all years after 2029. For the years ended December 31, 2024, 2023 and 2022, total payments under these agreements were $ 319 million, $ 319 million and $ 323 million, respectively.

Derivative Instruments

We use financial and commodity-based derivative contracts to manage exposures to fluctuations in commodity prices, interest rates and foreign currency exchange rates, or to capture market opportunities. Because we do not apply hedge accounting for commodity derivative contracts, all realized and unrealized gains and losses from commodity derivative contracts are recognized in our consolidated statement of income. Gains and losses from derivative contracts held for trading not directly related to our physical business are reported net in the “Other income” line item on our consolidated statement of income. Unrealized gains on the foreign currency derivative entered into in connection with the sale of our 49 % ownership interest in Coop are reported in the “Net gain on dispositions” line item on our consolidated statement of income. Cash flows from all our derivative activity for the periods presented appear in the operating section on our consolidated statement of cash flows.

Purchase and sales contracts with firm minimum notional volumes for commodities that are readily convertible to cash are recorded on our consolidated balance sheet as derivatives unless the contracts are eligible for, and we elect, the normal purchases and normal sales exception, whereby the contracts are recorded on an accrual basis. We generally apply the normal purchases and normal sales exception to eligible crude oil, refined petroleum product, NGL, natural gas, renewable feedstocks, and power commodity contracts to purchase or sell quantities we expect to use or sell in the normal course of business. All other derivative instruments are recorded at fair value on our consolidated balance sheet. For further information on the fair value of derivatives, see Note 19—Fair Value Measurements.

Commodity Derivative Contracts —We sell into or receive supply from the worldwide crude oil, refined petroleum product, NGL, natural gas, renewable feedstocks and renewable fuels, and electric power markets, exposing our revenues, purchases, cost of operating activities and cash flows to fluctuations in the prices for these commodities. Generally, our policy is to remain exposed to the market prices of commodities; however, we use futures, forwards, swaps and options in various markets to balance physical systems, meet customer needs, manage price exposures on specific transactions, and do a limited amount of trading not directly related to our physical business, all of which may reduce our exposure to fluctuations in market prices. We also use the market knowledge gained from these activities to capture market opportunities such as moving physical commodities to more profitable locations, storing commodities to capture seasonal or time premiums, and blending commodities to capture quality upgrades.

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The following table indicates the consolidated balance sheet line items that include the fair values of commodity derivative assets and liabilities. The balances in the following table are presented on a gross basis, before the effects of counterparty and collateral netting. However, we have elected to present our commodity derivative assets and liabilities with the same counterparty on a net basis on our consolidated balance sheet when the legal right of offset exists.

			Millions of Dollars
			December 31, 2024															December 31, 2023
			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
			Assets			Liabilities												Assets			Liabilities
Assets
Prepaid expenses and other current assets			$	1,021		( 922 )			—			99						2,148			( 2,005 )			—			143
Other assets			—			—			—			—						19			( 2 )			—			17
Liabilities
Other accruals			1,136			( 1,226 )			46			( 44 )						1,034			( 1,127 )			18			( 75 )
Other liabilities and deferred credits			60			( 71 )			16			5						—			( 14 )			—			( 14 )
Total			$	2,217		( 2,219 )			62			60						3,201			( 3,148 )			18			71

At December 31, 2024, and 2023, 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
			2024						2023						2022
Sales and other operating revenues			$	35					137						( 128 )
Other income			48						99						79
Purchased crude oil and products			( 5 )						( 269 )						( 348 )
Net gain (loss) from commodity derivative activity			$	78					( 33 )						( 397 )

The following table summarizes our material net exposures resulting from outstanding commodity derivative contracts. These financial and physical derivative contracts are primarily used to manage price exposure on our underlying operations. The underlying exposures may be from nonderivative positions such as inventory volumes. 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 December 31, 2024 and 2023.

			Open Position Long / (Short)
			2024						2023
Commodity
Crude oil, refined petroleum products, NGL and renewable feedstocks (millions of barrels)			( 22 )						( 22 )
Natural gas (billions of cubic feet)			( 14 )						( 25 )

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Credit Risk from Derivative and Financial Instruments

Financial instruments potentially exposed to concentrations of credit risk consist primarily of trade receivables and derivative contracts.

Our trade receivables result primarily from the sale of products from, or related to, our refinery operations and reflect a broad national and international customer base, which limits our exposure to concentrations of credit risk. The majority of these receivables have payment terms of 30 days or less. We continually monitor this exposure and the creditworthiness of the counterparties and recognize bad debt expense based on a probability assessment of credit loss. Generally, we do not require collateral to limit the exposure to loss; however, we will sometimes use letters of credit, prepayments or master netting arrangements to mitigate credit risk with counterparties that both buy from and sell to us, as these agreements permit the amounts owed by us to others to be offset against amounts owed to us.

The credit risk from our derivative contracts, such as forwards and swaps, derives from the counterparty to the transaction. Individual counterparty exposure is managed within predetermined credit limits and includes the use of cash-call margins when appropriate, thereby reducing the risk of significant nonperformance. We also use futures, swaps and option contracts that have a negligible credit risk because these trades are cleared with an exchange clearinghouse and subject to mandatory margin requirements, typically on a daily basis, until settled.

Certain of our derivative instruments contain provisions that require us to post collateral if the derivative exposure exceeds a threshold amount. We have contracts with fixed threshold amounts and other contracts with variable threshold amounts that are contingent on our credit ratings. The variable threshold amounts typically decline for lower credit ratings, while both the variable and fixed threshold amounts typically revert to zero if our credit ratings fall below investment grade. Cash is the primary collateral in all contracts; 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 December 31, 2024 and 2023.

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Recurring Fair Value Measurements

We carry certain assets and liabilities at fair value, which we measure at the reporting date using the price that would be received to sell an asset or paid to transfer a liability (i.e., an exit price), and disclose the quality of these fair values based on the valuation inputs used in these measurements under the following hierarchy:

• Level 1: Fair value measured with unadjusted quoted prices from an active market for identical assets or liabilities.

• Level 2: Fair value measured either with: (1) adjusted quoted prices from an active market for similar assets or liabilities; or (2) other valuation inputs that are directly or indirectly observable.

• Level 3: Fair value measured with unobservable inputs that are significant to the measurement.

We classify the fair value of an asset or liability based on the significance of its observable or unobservable inputs to the measurement. However, the fair value of an asset or liability initially reported as Level 3 will be subsequently reported as Level 2 if the unobservable inputs become inconsequential to its measurement or corroborating market data becomes available. Conversely, an asset or liability initially reported as Level 2 will be subsequently reported as Level 3 if corroborating market data becomes unavailable.

We used the following methods and assumptions to estimate the fair value of financial instruments:

• Cash and cash equivalents —The carrying amount reported on our consolidated balance sheet approximates fair value.

• Accounts and notes receivable —The carrying amount reported on our consolidated balance sheet approximates fair value.

• Derivative instruments —The fair value of our exchange-traded contracts is based on quoted market prices obtained from the New York Mercantile Exchange, the Intercontinental Exchange or other exchanges, and is reported as Level 1 in the fair value hierarchy. When exchange-cleared contracts lack sufficient liquidity, or are valued using either adjusted exchange-provided prices or nonexchange quotes, we classify those contracts as Level 2 or Level 3 based on the degree to which inputs are observable.

Physical commodity forward purchase and sales contracts and over-the-counter (OTC) financial swaps are generally valued using forward quotes provided by brokers and price index developers, such as Platts and Oil Price Information Service. We corroborate these quotes with market data and classify the resulting fair values as Level 2. When forward market prices are not available, we estimate fair value using the forward price of a similar commodity, adjusted for the difference in quality or location. In certain less liquid markets or for longer-term contracts, forward prices are not as readily available. In these circumstances, physical commodity purchase and sales contracts and OTC swaps are valued using internally developed methodologies that consider historical relationships among various commodities that result in management’s best estimate of fair value. We classify these contracts as Level 3. Physical and OTC commodity options are valued using industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and contractual prices for the underlying instruments, as well as other relevant economic measures. The degree to which these inputs are observable in the forward markets determines whether the options are classified as Level 2 or 3. We use a midmarket pricing convention (the midpoint between bid and ask prices). When appropriate, valuations are adjusted to reflect credit considerations, generally based on available market evidence.

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

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

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

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

• Debt —The carrying amount of our floating-rate debt approximates fair value. The fair value of our fixed-rate debt is estimated primarily based on observable market prices.

The following tables display the fair value hierarchy for our financial assets and liabilities either accounted for or disclosed at fair value on a recurring basis. These values are determined by treating each contract as the fundamental unit of account; therefore, derivative assets and liabilities with the same counterparty are shown on a gross basis in the hierarchy sections of these tables, before the effects of counterparty and collateral netting. The following tables also reflect the effect of netting derivative assets and liabilities with the same counterparty for which we have the legal right of offset and collateral netting.

The carrying values and fair values by hierarchy of our financial assets and liabilities, either carried or disclosed at fair value, including any effects of counterparty and collateral netting, were:

			Millions of Dollars
			December 31, 2024
			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
			Level 1						Level 2						Level 3
Commodity Derivative Assets
Exchange-cleared instruments			$	2,137					—						—						2,137			( 2,111 )			—			—			26
OTC instruments			—						7						—						7			—			—			—			7
Physical forward contracts			—						70						3						73			( 7 )			—			—			66
Rabbi trust assets			153						—						—						153			N/A			N/A			—			153
Investment in NOVONIX			36						—						—						36			N/A			N/A			—			36
Foreign currency derivative			—						67						—						67			N/A			N/A			—			67
			$	2,326					144						3						2,473			( 2,118 )			—			—			355
Commodity Derivative Liabilities
Exchange-cleared instruments			$	2,173					—						—						2,173			( 2,111 )			( 62 )			—			—
Physical forward contracts			—						45						1						46			( 7 )			—			—			39
Floating-rate debt			—						1,760						—						1,760			N/A			N/A			—			1,760
Fixed-rate debt, excluding finance leases and software obligations			—						16,913						—						16,913			N/A			N/A			1,020			17,933
			$	2,173					18,718						1						20,892			( 2,118 )			( 62 )			1,020			19,732

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			Millions of Dollars
			December 31, 2023
			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
			Level 1						Level 2						Level 3
Commodity Derivative Assets
Exchange-cleared instruments			$	3,075					54						—						3,129			( 3,039 )			—			—			90
OTC instruments			—						1						—						1			—			—			—			1
Physical forward contracts			—						70						1						71			( 2 )			—			—			69
Rabbi trust assets			155						—						—						155			N/A			N/A			—			155
Investment in NOVONIX			39						—						—						39			N/A			N/A			—			39
			$	3,269					125						1						3,395			( 3,041 )			—			—			354
Commodity Derivative Liabilities
Exchange-cleared instruments			$	3,057					41						—						3,098			( 3,039 )			( 18 )			—			41
Physical forward contracts			—						50						—						50			( 2 )			—			—			48
Floating-rate debt			—						1,915						—						1,915			N/A			N/A			—			1,915
Fixed-rate debt, excluding finance leases and software obligations			—						16,718						—						16,718			N/A			N/A			408			17,126
			$	3,057					18,724						—						21,781			( 3,041 )			( 18 )			408			19,130

The rabbi trust assets and investment in NOVONIX are recorded in the “Investments and long-term receivables” line item, the foreign currency derivative is recorded in the “Prepaid expenses and other current assets” line item, and floating-rate and fixed-rate debt are recorded in the “Short-term debt” and “Long-term debt” line items on our consolidated balance sheet. See Note 18—Derivatives and Financial Instruments, for information regarding where the assets and liabilities related to our commodity derivatives are recorded on our consolidated balance sheet.

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Nonrecurring Fair Value Measurements

Equity Investments and PP&E

In the fourth quarter of 2024, we remeasured the carrying value of an equity method investment in a crude pipeline in Oklahoma to fair value. Fair value was determined using an income approach. The valuation resulted in a Level 3 nonrecurring fair value measurement.

In the second and third quarters of 2024, we remeasured the carrying value of the net PP&E and equity method investment in certain crude gathering, and gathering and processing asset groups in Texas to fair value. Fair value was determined using a market approach. These valuations resulted in Level 3 nonrecurring fair value measurements.

In the first quarter of 2024, we remeasured the carrying value of the net PP&E of certain crude oil processing and logistics assets in California to fair value. Fair value was determined using a market approach. These valuations resulted in Level 3 nonrecurring fair value measurements.

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

DCP Midstream Merger

On August 17, 2022, we and Enbridge agreed to merge DCP Midstream and Gray Oak Holdings with DCP Midstream as the surviving entity. As a result, we began consolidating the financial results of DCP Midstream Class A Segment, DCP Sand Hills and DCP Southern Hills, and accordingly, accounted for the business combination using the acquisition method of accounting, which required DCP Midstream Class A Segment’s, DCP Sand Hills’ and DCP Southern Hills’, assets and liabilities to be recorded at fair value as of the acquisition date on our consolidated balance sheet. See Note 5—Business Combinations, for additional information on the DCP Midstream Merger.

Equity Method Investments

The fair value of the investments we acquired that are accounted for under the equity method was $ 2,034 million. The fair value of these assets was determined using the income approach. The income approach used discounted cash flow models that require various observable and non-observable inputs, such as margins, tariffs and rates, utilization, volumes, product costs, operating expenses, capital expenditures, terminal-year values and risk-adjusted discount rates. These valuations resulted in Level 3 nonrecurring fair value measurements.

PP&E

The fair value of PP&E was $ 13,030 million. The fair value of these assets was determined primarily using the cost approach. The cost approach used assumptions for the current replacement costs of similar plant and equipment assets adjusted for estimated physical deterioration, functional obsolescence and economic obsolescence. The fair value of properties was determined using a sales comparison approach. These valuations resulted in Level 3 nonrecurring fair value measurements.

Debt

The fair value of DCP LP’s senior and junior subordinated notes was measured using a market approach, based on the average of quotes for the acquired debt from major financial institutions. These valuations resulted in Level 2 nonrecurring fair value measurements.

Noncontrolling Interests

As a result of our consolidation of DCP Midstream Class A Segment, the noncontrolling interests held in DCP Midstream Class A Segment were recorded at their fair values on the DCP Midstream Merger date. These noncontrolling interests on the DCP Midstream Merger date primarily included Enbridge’s indirect economic interest in DCP LP, the public holders of DCP LP’s common units and the public holders of DCP LP’s preferred units. The fair value of the noncontrolling interests in DCP LP’s common units was based on their unit market price as of the date of the DCP Midstream Merger, August 17, 2022. The fair value of the noncontrolling interests in DCP LP’s publicly traded preferred units was based on their respective market price as of the date of the DCP Midstream Merger, August 17, 2022. These valuations resulted in Level 1 nonrecurring fair value measurements. The fair value of the noncontrolling interests in DCP LP’s other preferred units was based on an income approach that used projected distributions that were discounted using an average implied yield of DCP LP’s publicly traded preferred units and expected redemption dates. This valuation resulted in a Level 2 nonrecurring fair value measurement.

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Gains Related to DCP Midstream Merger

In connection with the DCP Midstream Merger, we recognized before-tax gains totaling $ 2,831 million from remeasuring our previously held equity investments to their fair values and a before-tax gain of $ 182 million related to the transfer of a 35.75 % indirect economic interest in Gray Oak Pipeline to our co-venturer. The fair values of our previously held equity interest in DCP Midstream and the equity interest in Gray Oak Pipeline we transferred were primarily based on DCP LP’s publicly traded common unit market price on the effective date of the DCP Midstream Merger, August 17, 2022, the cash consideration contributed and obligations that were deemed to be effectively settled. This valuation resulted in Level 1 nonrecurring fair value measurements. The fair values of our previously held equity interests in DCP Sand Hills and DCP Southern Hills were determined using the income approach. The income approach used discounted cash flow models that require various observable and non-observable inputs, such as tariffs, volumes, operating expenses, capital expenditures, terminal-year values and risk-adjusted discount rates. These valuations resulted in Level 3 nonrecurring fair value measurements.

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Preferred Stock

Phillips 66 has 500 million shares of preferred stock authorized, with a par value of $ 0.01 per share, none of which have been issued.

Treasury Stock

On October 25, 2023, our Board of Directors approved a $ 5 billion increase to our share repurchase authorization. Since the inception of our share repurchase program in 2012, our Board of Directors has authorized an aggregate of $ 25 billion of repurchases of our outstanding common stock, and we have repurchased 238 million shares at an aggregate cost of $ 21.5 billion. In 2024, we repurchased 24.2 million shares at an aggregate cost of $ 3.4 billion. Our share repurchase authorizations do not expire. Any future share repurchases will be made at the discretion of management and will depend on various factors including our share price, results of operations, financial condition and cash required for future business plans. Shares of stock repurchased are held as treasury shares.

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

In March 2022, in connection with the Phillips 66 Partners merger, we issued 41.8 million shares of common stock from our treasury stock with an aggregate cost of $ 3.4 billion. See Note 30—Phillips 66 Partners LP, for information on the merger with Phillips 66 Partners.

Common Stock Dividends

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

Noncontrolling Interests

At December 31, 2024 and 2023, our noncontrolling interests primarily represented Enbridge’s indirect economic interest in DCP LP. On June 15, 2023, as part of the DCP LP Merger, we acquired all publicly held common units of DCP LP and eliminated the public common unit noncontrolling interest in our consolidated financial statements from the DCP LP Merger date, forward. See Note 3—DCP Midstream, LLC and DCP Midstream, LP Mergers, for further information on the DCP LP Merger and preferred unit redemptions.

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We lease marine vessels, pipelines, storage tanks, railcars, service station sites, office buildings, corporate aircraft, land and other facilities and equipment. In determining whether an agreement contains a lease, we consider our ability to control the asset and whether third-party participation or vendor substitution rights limit our control. Certain leases include escalation clauses for adjusting rental payments to reflect changes in price indices, as well as renewal options and/or options to purchase the leased property. Renewal options have been included only when reasonably certain of exercise. There are no significant restrictions imposed on us in our lease agreements with regards to dividend payments, asset dispositions or borrowing ability. Certain leases have residual value guarantees, which may require additional payments at the end of the lease term if future fair values decline below contractual lease balances.

We discount lease obligations using our incremental borrowing rate. We separate costs for lease and service components for contracts involving marine vessels, consignment service stations, and refining processing equipment. For these contracts, we allocate the consideration payable between the lease and service components using the relative standalone prices of each component. For contracts involving all other asset types, we account for the lease and service components on a combined basis. For short-term leases, which are leases that, at the commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying asset that is reasonably certain to be exercised, we do not recognize the right-of-use (ROU) asset and corresponding lease liability on our consolidated balance sheet.

The following table indicates the consolidated balance sheet line items that include the ROU assets and lease liabilities for our finance and operating leases at December 31:

			Millions of Dollars
			2024												2023
			Finance Leases						Operating Leases						Finance Leases						Operating Leases
Right-of-Use Assets
Prepaid expenses and other current assets			$	—					20						—						—
Net properties, plants and equipment			323						—						298						—
Other assets			—						1,300						—						1,116
Total right-of-use assets			$	323					1,320						298						1,116
Lease Liabilities
Short-term debt			$	30					—						25						—
Other accruals			—						421						—						362
Long-term debt			322						—						280						—
Other liabilities and deferred credits			—						934						—						790
Total lease liabilities			$	352					1,355						305						1,152

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Future minimum lease payments at December 31, 2024, for finance and operating lease liabilities were:

												Millions of Dollars
															Finance Leases						Operating Leases
2025															$	44					476
2026															46						342
2027															37						254
2028															38						175
2029															34						101
Remaining years															284						178
Future minimum lease payments															483						1,526
Amount representing interest or discounts															( 131 )						( 171 )
Total lease liabilities															$	352					1,355

Our finance lease liabilities relate primarily to our marketing business, service station consignment agreements with a marketing joint venture, and a crude oil terminal in the United Kingdom. The lease liability for the terminal finance lease is subject to foreign currency translation adjustments each reporting period.

Components of net lease cost for the years ended December 31 were:

			Millions of Dollars
			2024						2023						2022
Finance lease cost
Amortization of right-of-use assets			$	33					30						24
Interest on lease liabilities			13						9						9
Total finance lease cost			46						39						33
Operating lease cost			478						390						387
Short-term lease cost			88						76						63
Variable lease cost			53						55						19
Sublease income			( 19 )						( 12 )						( 13 )
Total net lease cost			$	646					548						489

Cash paid for amounts included in the measurement of our lease liabilities for the years ended December 31 was:

			Millions of Dollars
			2024						2023						2022
Operating cash outflows—finance leases			$	13					15						11
Operating cash outflows—operating leases			473						390						392
Financing cash outflows—finance leases			28						19						32

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

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

			2024						2023
Weighted-average remaining lease term—finance leases (years)			13.0						13.4
Weighted-average remaining lease term—operating leases (years)			4.9						4.9
Weighted-average discount rate—finance leases			4.4		%				3.9
Weighted-average discount rate—operating leases			4.8						4.5

The following table provides a reconciliation of the projected benefit obligations and plan assets for our pension plans and accumulated benefit obligations for our other postretirement benefit plans:

			Millions of Dollars
			Pension Benefits																								Other Benefits
			2024												2023												2024						2023
			U.S.						Int’l.						U.S.						Int’l.
Change in Benefit Obligations
Benefit obligations at January 1			$	2,260					752						2,209						675						150						156
Service cost			116						14						108						13						3						3
Interest cost			114						32						118						31						7						8
Plan participant contributions			—						3						—						2						7						7
Actuarial loss (gain)			68						( 48 )						58						30						( 8 )						2
Benefits paid			( 209 )						( 34 )						( 233 )						( 33 )						( 22 )						( 26 )
Foreign currency exchange rate change			—						( 22 )						—						34						—						—
Benefit obligations at December 31			$	2,349					697						2,260						752						137						150
Change in Fair Value of Plan Assets
Fair value of plan assets at January 1			$	2,139					778						1,778						707						—						—
Actual return on plan assets			172						14						203						44						—						—
Company contributions			19						5						391						20						15						19
Plan participant contributions			—						3						—						2						7						7
Benefits paid			( 209 )						( 34 )						( 233 )						( 33 )						( 22 )						( 26 )
Foreign currency exchange rate change			—						( 15 )						—						38						—						—
Fair value of plan assets at December 31			$	2,121					751						2,139						778						—						—
Funded Status at December 31			$	( 228 )					54						( 121 )						26						( 137 )						( 150 )

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

			Millions of Dollars
			Pension Benefits																								Other Benefits
			2024												2023												2024						2023
			U.S.						Int’l.						U.S.						Int’l.
Amounts Recognized in the Consolidated Balance Sheet
Noncurrent assets			$	—					181						—						157						—						—
Current liabilities			( 60 )						—						( 55 )						—						( 15 )						( 20 )
Noncurrent liabilities			( 168 )						( 127 )						( 66 )						( 131 )						( 122 )						( 130 )
Total recognized			$	( 228 )					54						( 121 )						26						( 137 )						( 150 )

Included in accumulated other comprehensive loss at December 31 were the following before-tax amounts that had not been recognized in net periodic benefit cost:

			Millions of Dollars
			Pension Benefits																								Other Benefits
			2024												2023												2024						2023
			U.S.						Int’l.						U.S.						Int’l.
Unrecognized net actuarial loss (gain)			$	141					( 16 )						111						2						( 54 )						( 51 )

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss):

			Millions of Dollars
			Pension Benefits																								Other Benefits
			2024												2023												2024						2023
			U.S.						Int’l.						U.S.						Int’l.
Sources of Change in Other Comprehensive Income
Net actuarial gain (loss) arising during the period			$	( 49 )					18						20						( 26 )						8						( 2 )
Amortization of net actuarial loss (gain) and settlements			19						—						28						( 3 )						( 5 )						( 6 )
Total recognized in other comprehensive income			$	( 30 )					18						48						( 29 )						3						( 8 )

The accumulated benefit obligations for all U.S. and international pension plans were $ 2,218 million and $ 609 million, respectively, at December 31, 2024, and $ 2,101 million and $ 661 million, respectively, at December 31, 2023.

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Information for U.S. and international pension plans with an accumulated benefit obligation in excess of plan assets at December 31 was:

			Millions of Dollars
			Pension Benefits
			2024												2023
			U.S.						Int’l.						U.S.						Int’l.
Accumulated benefit obligations			$	100					134						101						136
Fair value of plan assets			—						13						—						13

Information for U.S. and international pension plans with a projected benefit obligation in excess of plan assets at December 31 was:

			Millions of Dollars
			Pension Benefits
			2024												2023
			U.S.						Int’l.						U.S.						Int’l.
Projected benefit obligations			$	2,349					139						2,260						144
Fair value of plan assets			2,121						13						2,139						13

Components of net periodic benefit cost for all defined benefit plans are presented in the table below:

			Millions of Dollars
			Pension Benefits																																				Other Benefits
			2024												2023												2022												2024						2023						2022
			U.S.						Int’l.						U.S.						Int’l.						U.S.						Int’l.
Components of Net Periodic Benefit Cost
Service cost			$	116					14						108						13						123						28						3						3						4
Interest cost			114						32						118						31						100						21						7						8						5
Expected return on plan assets			( 153 )						( 45 )						( 126 )						( 43 )						( 135 )						( 56 )						—						—						—
Amortization of prior service credit			—						—						—						—						—						( 1 )						—						—						( 2 )
Amortization of net actuarial loss (gain)			12						—						11						( 3 )						21						12						( 5 )						( 6 )						( 2 )
Settlement losses			7						—						17						—						53						9						—						—						—
Net periodic benefit cost (credit)*			$	96					1						128						( 2 )						162						13						5						5						5

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

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In determining net periodic benefit cost, we amortize prior service costs on a straight-line basis over the average remaining service period of employees expected to receive benefits under the plan. For net actuarial gains and losses, we amortize 10 % of the unamortized balance each year. The amount subject to amortization is determined on a plan-by-plan basis.

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

			Pension Benefits																								Other Benefits
			2024												2023												2024						2023
			U.S.						Int’l.						U.S.						Int’l.
Assumptions Used to Determine Benefit Obligations:
Discount rate			5.75		%				4.99						5.35						4.36						5.70						5.45
Rate of compensation increase			4.25						3.74						4.30						3.34						—						—
Interest crediting rate on cash balance plan			4.88						—						3.98						—						—						—
Assumptions Used to Determine Net Periodic Benefit Cost:
Discount rate			5.35		%				4.36						5.70						4.64						5.45						5.70
Expected return on plan assets			7.50						5.86						7.50						5.91						—						—
Rate of compensation increase			4.30						3.34						4.30						3.32						—						—
Interest crediting rate on cash balance plan			3.98						—						3.88						—						—						—

For both U.S. and international pension plans, the overall expected long-term rate of return is developed from the expected future return of each asset class, weighted by the expected allocation of pension assets to that asset class. We rely on a variety of independent market forecasts in developing the expected rate of return for each class of assets.

For the year ended December 31, 2024, actuarial losses resulted in increases in our U.S. pension benefit obligations of $ 68 million and actuarial gains resulted in a decrease in our international pension benefit obligation of $ 48 million. For the year ended December 31, 2023, actuarial losses resulted in increases in our U.S. and international pension benefit obligations of $ 58 million and $ 30 million, respectively. The primary driver for the actuarial losses in 2024 was changes in demographic experience. The primary driver for the actuarial gains in 2024 was increases in the discount rates. The primary driver for the actuarial losses in 2023 was decreases in the discount rates.

For the year ended December 31, 2024, the weighted-average actual return on plan assets was 7 %, which resulted in an increase in our U.S. and international plan assets of $ 172 million and $ 14 million, respectively. For the year ended December 31, 2023, the weighted-average actual return on plan assets was 10 %, which resulted in an increase in our U.S. and international plan assets of $ 203 million and $ 44 million, respectively. The primary driver of the return on plan assets in 2024 and 2023 was fluctuations in the equity and fixed income markets.

Our other postretirement benefit plans for health insurance are contributory. Effective December 31, 2012, we terminated the subsidy for retiree medical plans. Since January 1, 2013, eligible employees have been able to utilize notional amounts credited to an account during their period of service with the company to pay all, or a portion, of their cost to participate in postretirement health insurance. In general, employees hired after December 31, 2012, will not receive credits to an account, but will have unsubsidized access to health insurance through the plan. The cost of health insurance will be adjusted annually by the company’s actuary to reflect actual experience and expected health care cost trends. The measurement of the accumulated benefit obligation assumes a health care cost trend rate of 6.75 % in 2025 that declines to 5 % by 2032.

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Plan Assets

The investment strategy for managing pension plan assets is to seek a reasonable rate of return relative to an appropriate level of risk and provide adequate liquidity for benefit payments and portfolio management. We follow a policy of diversifying pension plan assets across asset classes, investment managers, and individual holdings. As a result, our plan assets have no significant concentrations of credit risk. Asset classes that are considered appropriate include equities, fixed income, cash, real estate and infrastructure investments and insurance contracts. Plan fiduciaries may consider and add other asset classes to the investment program from time to time. The target allocations for plan assets are approximately 44 % equity securities, 34 % debt securities, 10 % real estate investments and 12 % in all other types of investments as of December 31, 2024. Generally, the investments in the plans are publicly traded, therefore minimizing the liquidity risk in the portfolio.

The following is a description of the valuation methodologies used for the pension plan assets.

• Fair values of equity securities and government debt securities are based on quoted market prices.

• Fair values of corporate debt securities are estimated using recently executed transactions and market price quotations. If there have been no market transactions in a particular fixed income security, its fair value is calculated by pricing models that benchmark the security against other securities with actual market prices.

• Fair values of cash and cash equivalents approximate their carrying amounts.

• Fair values of insurance contracts are valued at the present value of the future benefit payments owed by the insurance company to the plans’ participants.

• Fair values of investments in common/collective trusts (CCT) and real estate and infrastructure investments, which include a CCT, limited partnerships, and other real estate funds, are valued at the net asset value (NAV) as a practical expedient. The NAV is based on the underlying net assets owned by the fund and the relative interest of each participating investor in the fair value of the underlying assets. These investments valued at NAV are not classified within the fair value hierarchy, but are presented in the fair value table to permit reconciliation of total plan assets to the amounts presented in the fair value table.

The fair values of our pension plan assets at December 31, by asset class, were:

			Millions of Dollars
			U.S.																								International
			Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
2024
Equity securities			$	298					—						—						298						—						—						—						—
Government debt securities			330						—						—						330						—						—						—						—
Corporate debt securities			—						109						—						109						—						—						—						—
Cash and cash equivalents			28						—						—						28						21						—						—						21
Insurance contracts			—						—						—						—						—						—						190						190
Total assets in the fair value hierarchy			656						109						—						765						21						—						190						211
Common/collective trusts measured at NAV																					1,079																								419
Real estate and infrastructure investments measured at NAV																					277																								121
Total			$	656					109						—						2,121						21						—						190						751

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			Millions of Dollars
			U.S.																								International
			Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
2023
Equity securities			$	295					—						—						295						—						—						—						—
Government debt securities			388						—						—						388						—						—						—						—
Corporate debt securities			—						101						—						101						—						—						—						—
Cash and cash equivalents			31						—						—						31						4						—						—						4
Insurance contracts			—						—						—						—						—						—						13						13
Total assets in the fair value hierarchy			714						101						—						815						4						—						13						17
Common/collective trusts measured at NAV																					1,013																								636
Real estate and infrastructure investments measured at NAV																					311																								125
Total			$	714					101						—						2,139						4						—						13						778

The following table is a reconciliation of the changes in our Level 3 plan asset balance:

			Millions of Dollars
			2024						2023
Balance at January 1			$	13					13
Transfer in			186						—
Actual return on plan assets			( 6 )						—
Foreign currency exchange rate change			( 3 )						—
Balance at December 31			$	190					13

Our funding policy for U.S. plans is to contribute at least the minimum required by the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986, as amended. Contributions to international plans are subject to local laws and tax regulations. Actual contribution amounts are dependent upon plan asset returns, changes in pension obligations, regulatory environments, and other economic factors. In 2025, we expect to contribute approximately $ 75 million to our U.S. pension plans and other postretirement benefit plans and $ 5 million to our international pension plans.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid to plan participants in the years indicated:

			Millions of Dollars
			Pension Benefits												Other Benefits
			U.S.						Int’l.
2025			$	266					26						16
2026			224						28						16
2027			227						29						15
2028			225						33						15
2029			231						34						15
2030-2034			1,168						183						69

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Defined Contribution Plans

Most U.S. employees are eligible to participate in the Phillips 66 Savings Plan (Savings Plan). Employees can contribute up to 75 % of their eligible pay, subject to certain statutory limits, in the Savings Plan to a choice of investment funds. For the years ended December 31, 2024, 2023, and 2022, Phillips 66 provided a company match of participant contributions up to 8 % of eligible pay. For the years ended December 31, 2023 and 2022, Phillips 66 provided an additional Success Share contribution ranging from 0 % to 4 % of eligible pay based on management discretion.

For the years ended December 31, 2024, 2023 and 2022, we recorded expense of $ 155 million, $ 196 million and $ 210 million, respectively, related to our contributions to the Savings Plan.

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Share-based payment awards, including stock options, stock appreciation rights, stock awards (including restricted stock and Restricted Stock Unit (RSU) awards), cash awards, and performance awards, are granted to our employees, nonemployee directors and other plan participants by the Human Resources and Compensation Committee (HRCC) of our Board of Directors under the applicable Omnibus Stock and Performance Incentive Plan of Phillips 66. Prior to May 11, 2022, share-based payment awards were granted under the 2013 Omnibus Stock and Performance Incentive Plan of Phillips 66 (the 2013 P66 Omnibus Plan). On May 11, 2022, Phillips 66’s shareholders approved the 2022 Omnibus Stock and Performance Incentive Plan of Phillips 66 (the 2022 P66 Omnibus Plan), which replaced the 2013 P66 Omnibus Plan. No future awards will be made under the 2013 P66 Omnibus Plan. As of December 31, 2024, approximately 12 million shares of Phillips 66’s common stock remained available to be issued to settle share-based payment awards under the 2022 P66 Omnibus Plan.

Total share-based compensation expense recognized in income and the associated income tax benefit for the years ended December 31 were:

			Millions of Dollars
			2024						2023						2022
Restricted stock units			$	121					130						101
Performance share units			83						139						68
Stock options			4						19						17
Other			2						9						24
Total share-based compensation expense			$	210					297						210
Income tax benefit			$	( 84 )					( 87 )						( 55 )

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Restricted Stock Units

Generally, RSUs are granted annually under the provisions of the applicable Phillips 66 incentive plan, and vest either ratably over three years following the grant date or cliff vest at the end of three years for awards granted in 2024 and 2023. For awards granted prior to 2023, RSUs cliff vest at the end of three years . The grant date fair value is equal to the average of the high and low market price of our stock on the grant date. The recipients receive a quarterly dividend equivalent cash payment until the RSU is settled by issuing one share of our common stock for each RSU at the end of the service period. RSUs granted to retirement-eligible employees are not subject to forfeiture ten months after the grant date for RSUs granted in 2024 and 2023, and six months after the grant date for RSUs granted prior to 2023. Special RSUs are granted to attract or retain key personnel and the terms and conditions may vary by award.

The following table summarizes our RSU activity from January 1, 2024, to December 31, 2024:

															Millions of Dollars
			Stock Units						Weighted-Average Grant-Date Fair Value						Total Fair Value
Outstanding at January 1, 2024			3,532,083						$	89.80
Granted			873,735						145.65
Forfeited			( 95,752 )						117.15
Issued			( 1,448,659 )						83.34						$	206
Outstanding at December 31, 2024			2,861,407						$	109.20
Not Vested at December 31, 2024			1,945,190						$	109.41

At December 31, 2024, the remaining unrecognized compensation cost from unvested RSU awards was $ 88 million, which will be recognized over a weighted-average period of 19 months, the longest period being 34 months.

During 2023 and 2022, we granted RSUs with a weighted-average grant-date fair value of $ 100.39 and $ 88.16 , respectively. During 2023 and 2022, we issued shares with an aggregate fair value of $ 126 million and $ 102 million, respectively, to settle RSUs.

Performance Share Units

Under the applicable Phillips 66 incentive plan, senior management is annually awarded restricted performance share units (PSUs) with three-year performance periods. These awards vest when the HRCC approves the three-year performance results, which represents the grant date. Retirement-eligible employees may retain a prorated share of the award if they retire prior to the grant date. PSUs are classified as liability awards and compensation expense is recognized over the three-year performance periods.

PSUs granted under the applicable Phillips 66 incentive plan are settled by cash payments equal to the fair value of the awards, which is based on the market prices of our stock near the end of the performance periods. The HRCC must approve the three-year performance results prior to payout. Dividend equivalents are not paid on these awards.

PSUs granted under prior incentive compensation plans were classified as equity awards. These equity awards are settled upon an employee’s retirement by issuing one share of our common stock for each PSU held. Dividend equivalents are paid on these awards.

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The following table summarizes our PSU activity from January 1, 2024, to December 31, 2024:

															Millions of Dollars
			Performance Share Units						Weighted-Average Grant-Date Fair Value						Total Fair Value
Outstanding at January 1, 2024			534,261						$	37.57
Granted			1,007,525						130.22
Forfeited			—						—
Issued			( 102,168 )						36.83						$	14
Cash settled			( 1,007,525 )						130.22						131
Outstanding at December 31, 2024			432,093						$	37.75

At December 31, 2024, there was no remaining unrecognized compensation cost from unvested PSU awards.

During 2023 and 2022, we granted PSUs with a weighted-average grant-date fair value of $ 102.66 and $ 71.82 , respectively. During 2023 and 2022, we issued shares with an aggregate fair value of $ 13 million and $ 9 million, respectively, to settle PSUs. During 2023 and 2022, we cash settled PSUs with an aggregate fair value of $ 36 million and $ 18 million, respectively.

Stock Options

Stock options granted under the provisions of the applicable Phillips 66 incentive plan and earlier plans permit purchases of our common stock at exercise prices equivalent to the average of the high and low market price of our stock on the date the options were granted. The options have terms of 10 years and vest ratably over three years following the grant date, with one-third of the options becoming exercisable each year on the grant date anniversary. Options granted to retirement-eligible employees are not subject to forfeiture ten months after the grant date for options granted in 2023 and six months after the grant date for options granted prior to 2023. No options were granted in 2024.

The following table summarizes our stock option activity from January 1, 2024, to December 31, 2024:

																					Millions of Dollars
			Options						Weighted-Average Exercise Price						Weighted-Average Grant-Date Fair Value						Aggregate Intrinsic Value
Outstanding at January 1, 2024			5,117,914						$	87.89
Granted			—						—						$	—
Forfeited			( 10,201 )						97.05
Exercised			( 1,051,247 )						82.26												$	68
Outstanding at December 31, 2024			4,056,466						$	89.32
Vested at December 31, 2024			3,915,693						$	88.93											$	171
Exercisable at December 31, 2024			3,220,753						$	87.62											$	147

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The weighted-average remaining contractual terms of vested options and exercisable options at December 31, 2024, were 5.75 and 5.35 years, respectively. During 2024, we received $ 86 million in cash and realized an income tax benefit of $ 16 million from the exercise of options. At December 31, 2024, the remaining unrecognized compensation expense from unvested options was $ 2 million, which will be recognized over a weighted-average period of 13 months, the longest period being 18 months.

During 2023 and 2022, we granted options with a weighted-average grant-date fair value of $ 27.45 and $ 17.02 , respectively. During 2023 and 2022, employees exercised options with an aggregate intrinsic value of $ 52 million and $ 42 million, respectively.

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

									2023						2022
Risk-free interest rate									3.84		%				1.97
Dividend yield									3.80		%				5.10
Volatility factor									35.19		%				33.67
Expected life (years)									6.78						6.61
No options were granted in 2024.

We calculate the volatility factor using historical Phillips 66 end-of-week closing stock prices. We periodically calculate the average period of time elapsed between grant dates and exercise dates of past grants to estimate the expected life of new option grants.

Other

As a result of the DCP Midstream Merger, we began consolidating DCP Midstream Class A Segment starting on August 18, 2022. DCP Midstream Class A Segment had a Long-Term Incentive Plan under which phantom units, performance units and distribution equivalent rights were awarded to key employees. On June 15, 2023, DCP Midstream Class A Segment’s share-based payment awards were converted to Phillips 66 share-based payment awards and are included in the share-based payment award tables above. Share-based compensation expense recognized for DCP Midstream Class A Segment’s share-based payment awards totaled $ 23 million for the period from August 18, 2022, through December 31, 2022, and $ 6 million for the period from January 1, 2023, through June 14, 2023.

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Components of income tax expense (benefit) were:

			Millions of Dollars
			2024						2023						2022
Income Tax Expense (Benefit)
Federal
Current			$	662					661						1,263
Deferred			( 282 )						830						1,171
Foreign
Current			78						394						492
Deferred			95						( 23 )						( 109 )
State and local
Current			11						335						173
Deferred			( 64 )						33						258
			$	500					2,230						3,248

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (IRA) that includes, among other provisions, changes to the U.S. corporate income tax system, including a 15% minimum tax based on adjusted financial statement income as defined in the IRA, which was effective after December 31, 2022. We did not owe corporate alternative minimum tax in 2024 or 2023 as the regular U.S. tax liability exceeded the corporate alternative minimum tax. The IRA also included provisions that allow a company to purchase transferable tax credits. In 2024 and 2023, we executed agreements to purchase eligible tax credits for a total of $ 485 million and $ 262 million, respectively. In 2024 and 2023, we paid $ 551 million and $ 196 million to our counterparties, respectively. These tax credits were used to offset estimated tax payments in 2024 and 2023.

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. Major components of deferred tax liabilities and assets at December 31 were:

			Millions of Dollars
			2024						2023
Deferred Tax Liabilities
Properties, plants and equipment, and intangibles			$	3,493					3,320
Investment in joint ventures			1,864						1,979
Investment in subsidiaries			2,511						2,628
Other			318						268
Total deferred tax liabilities			8,186						8,195
Deferred Tax Assets
Benefit plan accruals			355						362
Loss and credit carryforwards			162						151
Asset retirement obligations and accrued environmental costs			299						127
Other financial accruals and deferrals			91						68
Inventory			82						34
Other			299						274
Total deferred tax assets			1,288						1,016
Less: valuation allowance			137						121
Net deferred tax assets			1,151						895
Net deferred tax liabilities			$	7,035					7,300

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At December 31, 2024, the loss and credit carryforward deferred tax assets were primarily related to a foreign tax credit carryforward in the United States of $ 128 million; a state tax net operating loss carryforward of $ 26 million; and capital loss and net operating loss carryforwards in the United Kingdom of $ 9 million. State net operating loss carryforwards begin to expire in 2040. Foreign tax credit carryforwards, which have a full valuation allowance against them, begin to expire in 2029. The other loss and credit carryforwards, all of which relate to foreign operations, and have a full valuation allowance against them, have indefinite lives.

Valuation allowances have been established to reduce deferred tax assets to an amount that will, more likely than not, be realized. During the year ended December 31, 2024, our total valuation allowance balance increased by $ 16 million. Based on our historical taxable income, expectations for the future and available tax planning strategies, management expects the remaining net deferred tax assets will be realized as offsets to reversing deferred tax liabilities and the tax consequences of future taxable income.

Earnings of our foreign subsidiaries and foreign joint ventures after December 31, 2017, are generally not subject to incremental income taxes in the United States or withholding taxes in foreign countries upon repatriation. As such, we only assert that the earnings of one of our foreign subsidiaries are indefinitely reinvested. At December 31, 2024 and 2023, the unrecorded deferred tax liability related to the undistributed earnings of this foreign subsidiary was not material.

A deferred income tax liability has not been recognized on the excess of the book basis over the tax basis of an investment in a controlled foreign subsidiary that is essentially permanent in duration. Recognition of a deferred tax liability will only be required if it becomes apparent that this subsidiary will be sold or liquidated in the foreseeable future. At December 31, 2024, the temporary difference resulting from the investment book basis exceeding the tax basis was $ 1,745 million. Determination of the unrecognized deferred income tax liability related to this temporary difference is not practicable given the variables involved in performing such a calculation. During the fourth quarter of 2024, we entered into a definitive agreement to sell our ownership interest in Coop. In connection with the anticipated sale, we recorded a U.S. deferred tax liability of $ 36 million for the excess of book over tax basis in this investment. The sale of Coop closed in January 2025. See Note 9—Investments, Loans and Long-Term Receivables, for additional information.

We file tax returns in the U.S. federal jurisdiction and in many foreign and state jurisdictions. Unrecognized tax benefits reflect the difference between positions taken on income tax returns and the amounts recognized in the financial statements.

The following table is a reconciliation of the changes in our unrecognized income tax benefits balance:

			Millions of Dollars
			2024						2023						2022
Balance at January 1			$	116					54						54
Additions for tax positions of current year			—						—						1
Additions for tax positions of prior years			—						66						2
Reductions for tax positions of prior years			( 28 )						( 4 )						( 3 )
Balance at December 31			$	88					116						54

Included in the balance of unrecognized income tax benefits at December 31, 2024, 2023 and 2022, were $ 87 million, $ 100 million and $ 37 million, respectively, which, if recognized, would affect our effective income tax rate. With respect to various unrecognized income tax benefits and the related accrued liabilities, we do not expect any to be recognized or paid within the next twelve months.

At December 31, 2024, 2023 and 2022, accrued liabilities for interest and penalties, net of accrued income taxes, totaled $ 1 million, $ 8 million and $ 7 million, respectively. These accruals increased our results for the year ended December 31, 2024, by $ 7 million and decreased our results for the years ended December 31, 2023 and 2022, by $ 1 million and $ 3 million, respectively.

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Audits in significant jurisdictions are generally complete as follows: United Kingdom (2022), Germany (2017) and United States (2020). Certain issues remain in dispute for audited years, and unrecognized income tax benefits for years still subject to or currently undergoing an audit are subject to change. As a consequence, the balance in unrecognized income tax benefits can be expected to fluctuate from period to period. Although it is reasonably possible such changes could be significant when compared with our total unrecognized income tax benefits, the amount of change is not estimable.

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

			Millions of Dollars																		Percentage of Income (Loss) Before Income Taxes
			2024						2023						2022						2024						2023						2022
Income before income taxes
United States			$	1,796					7,887						12,628						67.1		%				83.3						86.3
Foreign			879						1,582						2,011						32.9						16.7						13.7
			$	2,675					9,469						14,639						100.0		%				100.0						100.0
Federal statutory income tax			$	562					1,989						3,074						21.0		%				21.0						21.0
State income tax, net of federal income tax benefit			( 43 )						290						341						( 1.6 )						3.1						2.3
Noncontrolling interests			( 2 )						( 51 )						( 74 )						( 0.1 )						( 0.5 )						( 0.5 )
Non-taxable equity earnings			( 44 )						( 42 )						( 33 )						( 1.6 )						( 0.4 )						( 0.2 )
Tax law changes			—						—						( 25 )						—						—						( 0.2 )
Discount on purchased credits			( 36 )						( 15 )						( 4 )						( 1.3 )						( 0.2 )						—
Tax on outside basis difference in foreign investment			36						—						—						1.3						—						—
Other*			27						59						( 31 )						1.0						0.6						( 0.2 )
			$	500					2,230						3,248						18.7		%				23.6						22.2

* “Other” is primarily attributable to foreign operations.

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Changes in the balances of each component of accumulated other comprehensive loss were as follows:

			Millions of Dollars
			Defined Benefit Plans						Foreign Currency Translation						Hedging						Accumulated Other Comprehensive Loss
December 31, 2021			$	( 398 )					( 45 )						( 2 )						( 445 )
Other comprehensive income (loss) before reclassifications			204						( 291 )						—						( 87 )
Amounts reclassified from accumulated other comprehensive loss
Defined benefit plans*
Amortization of net actuarial loss, prior service credit and settlements			72						—						—						72
Foreign currency translation			—						—						—						—
Hedging			—						—						—						—
Net current period other comprehensive income (loss)			276						( 291 )						—						( 15 )
December 31, 2022			( 122 )						( 336 )						( 2 )						( 460 )
Other comprehensive income (loss) before reclassifications			( 12 )						179						( 3 )						164
Amounts reclassified from accumulated other comprehensive loss
Defined benefit plans*
Amortization of net actuarial loss, prior service credit and settlements			14						—						—						14
Foreign currency translation			—						—						—						—
Hedging			—						—						—						—
Net current period other comprehensive income (loss)			2						179						( 3 )						178
December 31, 2023			( 120 )						( 157 )						( 5 )						( 282 )
Other comprehensive loss before reclassifications			( 31 )						( 105 )						—						( 136 )
Amounts reclassified from accumulated other comprehensive loss
Defined benefit plans*
Amortization of net actuarial loss and settlements			11						—						—						11
Foreign currency translation			—						—						—						—
Hedging			—						—						—						—
Net current period other comprehensive loss			( 20 )						( 105 )						—						( 125 )
December 31, 2024			$	( 140 )					( 262 )						( 5 )						( 407 )

* Included in the computation of net periodic benefit cost. See Note 22—Pension and Postretirement Plans, for additional information.

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In the third quarter of 2024, we began presenting the line item “Capital expenditures and investments” on our consolidated statement of cash flows exclusive of acquisitions, net of cash acquired. Prior period information has been reclassified for comparability.

Supplemental Cash Flow Information

			Millions of Dollars
			2024						2023						2022
Cash Payments (Receipts)
Interest			$	901					816						572
Income taxes*			1,186						1,397						2,071
* 2024 and 2023 include $ 551 million and $ 196 million of cash paid to counterparties to purchase IRA eligible tax credits.

															Millions of Dollars
															2024						2023						2022
Non-cash investing activities
Derecognition of government obligations															$	1,100					—						—
Reduction of WRB investment balance															290						—						—
Non-cash financing activities
Derecognition of Discharged Notes															$	( 1,100 )					—						—
Distribution of Advance Term Loan from WRB															( 290 )						—						—

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

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			Millions of Dollars
			2024						2023						2022
Interest and Debt Expense
Incurred
Debt			$	919					842						611
Other			9						86						41
			928						928						652
Capitalized			( 21 )						( 31 )						( 33 )
Expensed			$	907					897						619
Other Income
Interest income			$	158					269						82
Unrealized investment gain (loss)—NOVONIX			—						( 38 )						( 433 )
Gain related to merger of businesses			—						—						3,013
Other, net*			85						128						75
			$	243					359						2,737
* Includes derivatives-related activities. See Note 18—Derivatives and Financial Instruments, for additional information.
Research and Development Expenses			$	15					27						42
Advertising Expenses			$	51					54						56
Foreign Currency Transaction (Gains) Losses
Midstream			$	—					—						—
Chemicals			—						—						—
Refining			—						19						( 7 )
Marketing and Specialties			3						2						( 2 )
Renewable Fuels			2						3						( 8 )
Corporate and Other			6						( 2 )						8
			$	11					22						( 9 )

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Significant transactions with related parties were:

			Millions of Dollars
			2024						2023						2022
Operating revenues and other income (a)(d)			$	4,443					4,623						6,111
Purchases (b)(d)			20,620						17,208						21,244
Operating expenses and selling, general and administrative expenses (c)			299						295						281

(a) We sold NGL, other petrochemical feedstocks and solvents to Chevron Phillips Chemical Company LLC (CPChem), NGL and certain feedstocks to DCP Midstream, gas oil and hydrogen feedstocks to Excel Paralubes LLC (Excel Paralubes), and refined petroleum products to several of our equity affiliates in the M&S segment, including OnCue and CF United. We also sold certain feedstocks and intermediate products to WRB and acted as an agent for WRB in supplying crude oil and other feedstocks for a fee. In addition, we charged several of our equity affiliates, including CPChem, for the use of common facilities, such as steam generators, waste and water treaters and warehouse facilities.

(b) We purchased crude oil, refined petroleum products, NGL and solvents from WRB. We also purchased natural gas and NGL from DCP Midstream and CPChem, as well as other feedstocks from various equity affiliates, for use in our refinery and fractionation processes. In addition, we purchased base oils and fuel products from Excel Paralubes for use in our specialty and refining businesses. We paid NGL fractionation fees to CPChem. We also paid fees to various pipeline equity affiliates for transporting crude oil, refined petroleum products and NGL.

(c) We paid consignment fees to CF United, and utility and processing fees to various equity affiliates.

(d) As a result of the DCP Midstream Merger, we began consolidating DCP Midstream Class A Segment, DCP Sand Hills and DCP Southern Hills. As such, transactions with these parties after August 17, 2022, are not presented in the table above.

Effective April 1, 2024, we changed the internal financial information reviewed by our chief executive officer to evaluate performance and allocate resources to our operating segments. This resulted in changes to the composition of our operating segments, as well as measurement changes for certain activities between our operating segments. The primary effects are summarized below. Prior period information has been recast for comparability.

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

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

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

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

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

2) Chemicals— Consists of our 50 % equity investment in CPChem, which manufactures and markets petrochemicals and plastics on a worldwide basis.

3) Refining— Refines crude oil and other feedstocks into petroleum products, such as gasoline and distillates, including aviation fuels. This segment includes 11 refineries in the United States and Europe.

4) Marketing and Specialties— Purchases for resale and markets refined products, mainly in the United States and Europe. In addition, this segment includes the manufacturing and marketing of base oils and lubricants.

5) Renewable Fuels— Processes renewable feedstocks into renewable products at the Rodeo Complex and at our Humber Refinery. 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, 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. See Note 4—Restructuring, for additional information regarding restructuring costs.

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

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Analysis of Results by Operating Segment

			Millions of Dollars
			Year Ended December 31, 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			$	16,012		—			34,793			90,318			1,995			35			—			143,153
Intercompany revenues			2,775			—			50,171			2,129			3,567			15			( 58,657 )			—
Total sales and other operating revenues			18,787			—			84,964			92,447			5,562			50			( 58,657 )			143,153
Equity in earnings of affiliates			591			863			50			276			( 1 )			—			—			1,779
Net gain on dispositions			263			—			( 8 )			66			—			—			—			321
Other income			11			—			3			42			10			186			( 9 )			243
Total Revenues and Other Income			19,652			863			85,009			92,831			5,571			236			( 58,666 )			145,496
Costs and Expenses
Purchased crude oil and products			13,429			—			79,850			89,572			5,664			—			( 58,553 )			129,962
Operating expenses*			1,876			( 3 )			3,727			70			370			12			( 113 )			5,939
Selling, general and administrative expenses*			213			( 10 )			209			1,932			51			419			—			2,814
Depreciation and amortization			920			—			1,077			179			64			123			—			2,363
Impairments			346			—			106			3			—			1			—			456
Taxes other than income taxes			216			—			387			59			( 382 )			49			—			329
Interest and debt expense			—			—			—			—			—			907			—			907
Other segment items **			14			—			18			5			2			12			—			51
Total Costs and Expenses			17,014			( 13 )			85,374			91,820			5,769			1,523			( 58,666 )			142,821
Income (loss) before income taxes			$	2,638		876			( 365 )			1,011			( 198 )			( 1,287 )			—			2,675
* 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 income statement: “Accretion on discounted liabilities” and “Foreign currency transaction (gains) losses.”

						Millions of Dollars
						As of and for the Year Ended December 31, 2024
						Operating Segments
						Midstream			Chemicals			Refining			M&S			Renewable Fuels			Corporate and Other			Total Consolidated
			Interest Income			$	—		—			—			—			—			158			158
			Investments In and Advances to Affiliates			3,080			7,819			2,381			719			16			2			14,017
			Total Assets			28,334			7,842			19,599			9,799			3,142			3,866			72,582
			Capital Expenditures and Investments			751			—			582			85			375			66			1,859

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			Millions of Dollars
			Year Ended December 31, 2023
			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			$	15,780		—			34,241			95,931			1,412			35			—			147,399
Intercompany revenues			2,824			—			57,985			3,000			3,534			13			( 67,356 )			—
Total sales and other operating revenues			18,604			—			92,226			98,931			4,946			48			( 67,356 )			147,399
Equity in earnings of affiliates			648			586			439			345			( 1 )			—			—			2,017
Net gain on dispositions			130			—			( 13 )			3			( 3 )			( 2 )			—			115
Other income			5			—			86			( 11 )			8			259			12			359
Total Revenues and Other Income			19,387			586			92,738			99,268			4,950			305			( 67,344 )			149,890
Costs and Expenses
Purchased crude oil and products			13,126			—			81,726			95,808			4,667			—			( 67,241 )			128,086
Operating expenses*			1,844			( 3 )			4,245			57			98			16			( 103 )			6,154
Selling, general and administrative expenses*			441			( 11 )			169			1,336			8			582			—			2,525
Depreciation and amortization			923			—			831			122			8			93			—			1,977
Impairments			3			—			10			3			—			8			—			24
Taxes other than income taxes			229			—			382			40			12			44			—			707
Interest and debt expense			—			—			—			—			—			897			—			897
Other segment items **			2			—			35			5			4			5			—			51
Total Costs and Expenses			16,568			( 14 )			87,398			97,371			4,797			1,645			( 67,344 )			140,421
Income (loss) before income taxes			$	2,819		600			5,340			1,897			153			( 1,340 )			—			9,469
* 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 income statement: “Accretion on discounted liabilities” and “Foreign currency transaction (gains) losses.”

						Millions of Dollars
						As of and for the Year Ended December 31, 2023
						Operating Segments
						Midstream			Chemicals			Refining			M&S			Renewable Fuels			Corporate and Other			Total Consolidated
			Interest Income			$	—		—			—			—			—			269			269
			Investments In and Advances to Affiliates			3,749			7,341			2,802			824			18			2			14,736
			Total Assets			29,052			7,357			21,013			10,834			2,012			5,233			75,501
			Capital Expenditures and Investments			625			—			586			101			753			90			2,155

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			Millions of Dollars
			Year Ended December 31, 2022
			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			$	16,189		—			40,234			112,569			963			35			—			169,990
Intercompany revenues			2,932			—			69,807			2,144			2,475			9			( 77,367 )			—
Total sales and other operating revenues			19,121			—			110,041			114,713			3,438			44			( 77,367 )			169,990
Equity in earnings of affiliates			914			842			747			464			1			—			—			2,968
Net gain on dispositions			( 1 )			—			1			—			—			7			—			7
Other income			3,009			—			43			35			( 4 )			( 367 )			21			2,737
Total Revenues and Other Income			23,043			842			110,832			115,212			3,435			( 316 )			( 77,346 )			175,702
Costs and Expenses
Purchased crude oil and products			15,496			—			96,808			111,638			3,222			—			( 77,232 )			149,932
Operating expenses*			1,401			( 9 )			4,731			50			37			15			( 114 )			6,111
Selling, general and administrative expenses*			255			( 5 )			151			1,304			5			458			—			2,168
Depreciation and amortization			567			—			860			110			7			85			—			1,629
Impairments			1			—			13			—			—			46			—			60
Taxes other than income taxes			146			—			285			38			2			59			—			530
Interest and debt expense			—			—			—			—			—			619			—			619
Other segment items **			1			—			8			—			( 9 )			14			—			14
Total Costs and Expenses			17,867			( 14 )			102,856			113,140			3,264			1,296			( 77,346 )			161,063
Income (loss) before income taxes			$	5,176		856			7,976			2,072			171			( 1,612 )			—			14,639
* 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 income statement: “Accretion on discounted liabilities” and “Foreign currency transaction (gains) losses.”

						Millions of Dollars
						As of and for the Year Ended December 31, 2022
						Operating Segments
						Midstream			Chemicals			Refining			M&S			Renewable Fuels			Corporate and Other			Total Consolidated
			Interest Income			$	—		—			—			—			—			82			82
			Investments In and Advances to Affiliates			4,254			6,785			2,484			881			19			2			14,425
			Total Assets			30,179			6,785			21,009			9,812			715			7,942			76,442
			Capital Expenditures and Investments			737			—			607			87			323			134			1,888

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Geographic Information

Long-lived assets, defined as net PP&E plus investments and long-term receivables, by geographic location at December 31 were:

			Millions of Dollars
			2024						2023						2022
United States			$	47,889					49,124						48,286
United Kingdom			1,341						1,406						1,349
Germany			325						394						391
Other countries			87						90						87
Worldwide consolidated			$	49,642					51,014						50,113

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On March 9, 2022, we completed a merger between us and Phillips 66 Partners. The merger resulted in the acquisition of all limited partnership interests in Phillips 66 Partners not already owned by us in exchange for 41.8 million shares of Phillips 66 common stock issued from treasury stock. Phillips 66 Partners common unitholders received 0.50 shares of Phillips 66 common stock for each outstanding Phillips 66 Partners common unit. Phillips 66 Partners’ perpetual convertible preferred units were converted into common units at a premium to the original issuance price prior to being exchanged for Phillips 66 common stock. Upon closing, Phillips 66 Partners became a wholly owned subsidiary of Phillips 66 and its common units are no longer publicly traded. The merger was accounted for as an equity transaction.

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40),” which will require additional disclosure of certain costs and expenses within the notes to the consolidated financial statements. This ASU is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. We are evaluating the provisions of ASU 2024-03 and the incremental disclosures that will be required in our consolidated financial statements.

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