Core Insights - Elliott Investment Management L.P. has proposed a plan titled "Streamline 66" aimed at transforming Phillips 66 through board enhancements, operational improvements, and portfolio simplification [1] - The firm is a top-five shareholder in Phillips 66, managing approximately $72.7 billion in assets as of December 31, 2024 [3] Group 1 - The "Streamline 66" plan is designed to unlock substantial upside by reversing the company's cycle of underperformance [1] - Elliott has filed a definitive proxy statement with the SEC to solicit proxies for the election of its director candidates at the 2025 annual meeting of stockholders [2] - Stockholders are encouraged to review the proxy statement and related documents for important information regarding the solicitation [2] Group 2 - Elliott Investment Management was founded in 1977 and is one of the oldest funds under continuous management [3] - The firm's investors include a diverse range of entities such as pension plans, sovereign wealth funds, and high net worth individuals [3]

Financial Performance - Phillips 66 reported a first-quarter 2025 adjusted loss of $368 million, or $090 per share, based on 409 million adjusted weighted-average diluted shares[24, 26, 57] - The company's operating cash flow for the first quarter of 2025 was $187 million[24] - Shareholder distributions totaled $716 million, and capital expenditures and investments amounted to $423 million[25] - Net debt-to-capital ratio stood at 38%[25, 61] Segment Performance (Adjusted Earnings) - Midstream segment earned $683 million, a decrease of $25 million compared to the fourth quarter of 2024[27] - Chemicals segment earned $113 million, an increase of $41 million from the previous quarter[27] - Refining segment incurred a loss of $937 million, which is $178 million lower than the loss in the fourth quarter of 2024[27] - Marketing and Specialties segment earned $265 million, an increase of $80 million compared to the previous quarter[27] - Renewable Fuels segment reported a loss of $185 million, a decrease of $213 million from the fourth quarter of 2024[27] - Corporate and Other segment had a loss of $355 million, which is $61 million lower than the loss in the previous quarter[27] Refining Margins - The worldwide realized refining margin was $681 per barrel in the first quarter of 2025[50, 55] - Refining crude utilization is expected to be in the mid-90% range for the second quarter of 2025[32] Outlook - Global Olefins & Polyolefins utilization is expected to be in the mid-90% range for the second quarter of 2025[32] - Refining turnaround expense is projected to be between $65 million and $75 million for the second quarter of 2025[32] - Corporate & Other costs are estimated to be between $340 million and $360 million for the second quarter of 2025[32]

Financial Data and Key Metrics Changes - First quarter reported earnings were $487 million or $1.18 per share, while the adjusted loss was $368 million or $0.90 per share, reflecting a significant impact from accelerated depreciation due to the planned cessation of operations at the Los Angeles Refinery [24][25] - The total company adjusted loss increased by $307 million compared to the prior quarter, with Midstream results decreasing mainly due to lower volumes from turnaround activities in Refining [26] Business Line Data and Key Metrics Changes - Midstream results decreased due to lower volumes, although higher commodity prices benefited gathering and processing results [26] - Chemicals results increased mainly due to higher volumes and lower costs driven by turnaround activity in the prior quarter [28] - Renewable Fuels results decreased mainly due to the transition from blenders tax credits to production tax credits, inventory impacts, and lower international results [28] Market Data and Key Metrics Changes - The Sweeny Hub achieved record fractionation volumes of 650,000 barrels per day [27] - US gasoline demand is forecasted to increase by about 1% for the year, with global gasoline demand expected to rise by 0.5% [106] - Distillate demand is projected to increase by 1% globally and 2% in the US for the year [108] Company Strategy and Development Direction - The company is focused on executing its transformational strategy, improving refining operations, enhancing the NGL value chain, and pursuing growth opportunities [7][21] - The acquisition of EPIC NGL is expected to expand takeaway capacity from the Permian and is immediately accretive [16] - The company plans to return over 50% of net operating cash flow to shareholders through share repurchases and dividends, with a recent increase in the quarterly dividend [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the macro environment for refining, renewables, and chemicals but emphasized the strength of the integrated business model [8][9] - The company expects to capture upside in the market for the remainder of the year, with refining operations positioned for high utilization rates [11][30] - Management expressed confidence in the long-term value creation strategy and the importance of disciplined capital allocation [57] Other Important Information - The company completed one of the largest spring turnaround programs in its history, impacting volumes and margins but completed safely, on time, and under budget [8][10] - The company has divested over $3.5 billion of non-core assets while making strategic acquisitions within Midstream [20] Q&A Session Summary Question: Discussion on strategic alternatives and board perspectives - Management highlighted the thorough analysis and strategic planning conducted with the board regarding potential structural changes, emphasizing the importance of understanding risks and consequences [34][40] Question: Path to reducing debt and maintaining shareholder returns - Management indicated a focus on achieving a $17 billion debt level while maintaining a commitment to returning over 50% of operating cash flow to shareholders [66][69] Question: Update on asset dispositions - Management confirmed ongoing negotiations for retail assets in Europe and indicated potential sales of non-core midstream assets [81][82] Question: Impact of tariffs on LPG exports - Management discussed the potential rerouting of LPG exports due to tariffs and the ability to optimize exports through strong international trading capabilities [92] Question: Insights on refining margins and market outlook - Management provided a positive outlook for refining margins, citing expected increases in gasoline and distillate demand, despite geopolitical uncertainties [106][109]

Core Insights - Phillips 66 reported a revenue of $31.73 billion for the quarter ended March 2025, which is a decrease of 12.9% compared to the same period last year [1] - The company's EPS was -$0.90, a significant drop from $1.90 in the year-ago quarter, indicating a negative performance [1] - The reported revenue exceeded the Zacks Consensus Estimate of $30.65 billion by 3.49%, while the EPS fell short of the consensus estimate of -$0.77 by 16.88% [1] Financial Performance Metrics - The refining margins for the Atlantic Basin/Europe were reported at $7.08 per barrel, surpassing the average estimate of $5.78 [4] - Worldwide refining margins were $6.81 per barrel, slightly below the average estimate of $6.98 [4] - Gulf Coast refining margins were $4.43 per barrel, lower than the estimated $5.65 [4] - Central Corridor refining margins were $8.29 per barrel, compared to the average estimate of $9.15 [4] - Total refined petroleum products sales in the U.S. were 1,828 thousand barrels per day, below the average estimate of 1,883.67 thousand barrels [4] - Total petroleum products sales volumes were 2,140 thousand barrels per day, also below the estimated 2,204.79 thousand barrels [4] - Midstream pipeline throughput was 2,893 thousand barrels per day, slightly below the estimate of 2,939.66 thousand barrels [4] - Midstream terminal throughput was 2,938 thousand barrels per day, compared to the average estimate of 3,051.71 thousand barrels [4] - Sales and other operating revenues were $30.43 billion, lower than the estimated $30.68 billion, reflecting a 15% decrease year over year [4] - Equity in earnings of affiliates was $153 million, significantly below the estimated $390.70 million, marking a 71% decline year over year [4] - Other income was reported at $56 million, compared to the average estimate of $61.52 million, representing a 42.3% year-over-year decrease [4] Stock Performance - Shares of Phillips 66 have declined by 16.1% over the past month, while the Zacks S&P 500 composite has decreased by 4.8% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Viewpoint - Phillips 66 reported a wider-than-expected adjusted loss in Q1 2025, with total revenues declining from the previous year, primarily due to lower refining volumes and margins [1][2]. Financial Performance - The adjusted loss per share was 90 cents, compared to a consensus estimate of a 77-cent loss, and a decline from earnings of $1.90 in the same quarter last year [1]. - Total quarterly revenues were $32 billion, exceeding the consensus estimate of $31 billion but down from $36 billion year-over-year [1]. Segmental Results - **Midstream**: Adjusted pre-tax earnings increased to $683 million from $613 million year-over-year, surpassing estimates due to higher margins and NGL transportation volumes [3]. - **Chemicals**: Adjusted pre-tax earnings fell to $113 million from $205 million in the prior-year quarter, missing estimates [4]. - **Refining**: Reported an adjusted pre-tax loss of $937 million, a significant decline from earnings of $313 million in the previous year, primarily due to lower refining volumes and higher turnaround costs [5]. - **Marketing & Specialties**: Adjusted pre-tax earnings decreased to $265 million from $307 million, but exceeded projections [7]. - **Renewable Fuels**: Reported an adjusted pre-tax loss of $185 million, worsening from a loss of $55 million in the prior-year quarter, impacted by changes in tax credits and weak international results [8]. Refining Margins - Realized refining margins dropped to $6.81 per barrel from $11.01 year-over-year, with declines noted across various regions including the Central Corridor and Gulf Coast [6]. Costs and Expenses - Total costs and expenses decreased to $31.1 billion from $35.5 billion in the previous year, better than projections [9]. Financial Condition - The company generated $187 million in net cash from operations, an improvement from a net cash outflow of $236 million in the prior year [10]. - Capital expenditures totaled $423 million, with dividends paid out amounting to $469 million [10]. - As of March 31, 2025, cash and cash equivalents stood at $1.5 billion, with total debt at $18.8 billion, reflecting a debt-to-capitalization ratio of 40% [10].

Financial Performance - In Q1 2025, Phillips 66 reported net income attributable to the company of $487 million, a decrease of 35% from $748 million in Q1 2024, primarily due to lower refining margins and higher costs[137][148]. - The company generated cash provided by operating activities of $187 million and funded capital expenditures of $423 million during the same quarter[137]. - Phillips 66's Midstream segment reported income before income taxes of $751 million, up from $554 million in Q1 2024, while the Refining segment experienced a loss of $937 million compared to a profit of $216 million in the prior year[148]. - Chemicals segment income before income taxes decreased to $113 million in Q1 2025 from $205 million in Q1 2024, driven by lower polyethylene margins and increased utility costs[168][169]. - Refining segment results decreased by $1,153 million for the three months ended March 31, 2025, with a worldwide loss before income taxes of $937 million compared to a profit of $216 million in 2024[175]. - Renewable Fuels segment reported a loss before income taxes of $185 million in Q1 2025, compared to a loss of $55 million in Q1 2024, despite increased renewable fuel sales[182][184]. - Corporate and Other segment reported a total loss before income taxes of $376 million for the three months ended March 31, 2025, an increase from a loss of $322 million in 2024[186]. - For the three months ended March 31, 2025, the Obligor Group reported sales and other operating revenues of $22,482 million, with a net loss of $1,073 million[247]. Cash Flow and Capital Expenditures - The company completed the sale of its 49% ownership in Coop Mineraloel AG and DCP Midstream, LP's 25% ownership in Gulf Coast Express Pipeline LLC, receiving total proceeds of $2 billion[139]. - Operating expenses increased by 12% in Q1 2025, primarily due to higher turnaround and utility costs[153]. - Cash and cash equivalents decreased to $1,489 million as of March 31, 2025, down from $1,738 million at the end of 2024[190]. - Total debt decreased to $18,803 million as of March 31, 2025, from $20,062 million at the end of 2024, with total equity slightly down to $28,353 million[190]. - The company funded capital expenditures and investments totaling $423 million and repaid $1.3 billion of debt during the first three months of 2025[191]. - For the three months ended March 31, 2025, total capital expenditures and investments were $423 million, down from $628 million in the same period of 2024[226]. - Capital spending in the Midstream segment was $216 million for the first three months of 2025, while Refining segment capital spending was $176 million[227][229]. - The company repurchased 2 million shares at an aggregate cost of approximately $0.2 billion during the three months ended March 31, 2025[224]. Market Conditions and Pricing - The weighted-average NGL price increased to $0.74 per gallon in Q1 2025 from $0.70 per gallon in Q1 2024, and the Henry Hub natural gas price rose to $4.27 per MMBtu from $2.41 per MMBtu[141]. - The composite 3:2:1 market crack spread decreased to an average of $15.83 per barrel in Q1 2025 from $19.45 per barrel in Q1 2024, reflecting market instability and geopolitical events[143]. - Realized refining margins for the three months ended March 31, 2025, amounted to $990 million, with a realized refining margin per barrel of $6.81[251]. - The total processed inputs for refining during the same period were 124,453 thousand barrels, with a loss before income taxes per barrel of $(7.53)[251]. - In the marketing segment, realized marketing fuel margins reached $224 million in the U.S. and $136 million internationally for the three months ended March 31, 2025[254]. - Total fuel sales volumes in the U.S. were 164,499 thousand barrels, with an income before income taxes per barrel of $0.67[254]. Shareholder Returns and Dividends - The company declared a quarterly cash dividend of $1.20 per common share in April 2025, representing a $0.05 increase, reflecting its commitment to shareholder returns[139]. - The company declared a quarterly cash dividend of $1.15 per common share on February 12, 2025, and a subsequent dividend of $1.20 per common share on April 21, 2025[223]. Debt and Liquidity - The percentage of total debt to capital improved to 40% as of March 31, 2025, compared to 41% at the end of 2024[190]. - The company has a $500 million accounts receivable securitization facility, of which $130 million was utilized as of March 31, 2025[199]. - A new $5 billion revolving credit agreement was established, replacing a previous facility, with no amounts drawn as of March 31, 2025[204]. - The company has approximately $5.4 billion of total committed capacity available under credit facilities as of March 31, 2025[207]. - The company has a $5 billion uncommitted commercial paper program for short-term working capital needs, with no borrowings outstanding as of March 31, 2025[205]. - The aggregate principal amount outstanding of Dakota Access' senior unsecured notes was $850 million as of March 31, 2025[216]. - As of March 31, 2025, the company's debt balance was $18.8 billion, with a total debt-to-capital ratio of 40%[221]. Strategic Initiatives and Future Outlook - Phillips 66 plans to maintain total annual capital expenditures and investments of approximately $2 billion, excluding acquisitions, with a focus on growing its Midstream and Chemicals businesses[139]. - The company acquired EPIC Y-Grade GP, LLC and EPIC Y-Grade, LP for $2.2 billion on April 1, 2025, expanding its midstream operations[222]. - The company anticipates continued focus on optimizing operations and enhancing refining margins in the upcoming quarters[256]. - The company emphasizes that forward-looking statements are based on current expectations and may not guarantee future performance, highlighting risks and uncertainties that could lead to material differences in actual outcomes[257]. - Market conditions and demand fluctuations could significantly impact prices of NGL, crude oil, and natural gas, affecting overall revenue[257]. - The company faces potential capacity constraints in pipelines and storage facilities, which could limit the delivery of natural gas and NGL[257]. - Changes in governmental policies regarding pricing and regulation of crude oil and renewable fuels could adversely affect the company's operations[258]. - The company is focused on sustainability goals, including reducing GHG emissions intensity and developing lower-carbon technologies[258]. - The impact of public health crises on commercial activity and product demand remains a concern for future performance[258]. - The company acknowledges the risk of delays in completing capital projects and asset acquisitions, which could affect growth strategies[258]. - Cybersecurity incidents pose a risk to the company's operations and could expose it to liability[258]. - The company’s commodity price risk and interest rate risk as of March 31, 2025, remain consistent with previous disclosures[259].

Company Performance - Phillips 66 reported a wider-than-expected loss for Q1, with an adjusted loss of 90 cents per share, missing the consensus estimate of a loss of 72 cents per share [2] - The company achieved quarterly revenue of $31.73 billion, surpassing the consensus of $31.33 billion [2] Stock Movements - Coursera, Inc. shares increased by 13% to $8.70 following better-than-expected quarterly results [8] - Baijiayun Group Ltd saw a significant surge of 65% to $0.3053 after announcing plans to invest tens of millions of dollars over the next five years for autism rehabilitation [8] - SES AI Corporation shares rose by 23% to $1.07 after reporting better-than-expected Q1 EPS results and authorizing a $30 million share repurchase program [8] - Saia, Inc. shares dropped by 30% to $249.41 due to weaker-than-expected quarterly results [8] - Coeptis Therapeutics Holdings, Inc. shares fell by 36% to $8.00 following the announcement of a merger agreement with Z Squared Inc. [8] - Lexaria Bioscience Corp. shares decreased by 20% to $1.34 after announcing a $2 million registered direct offering of common stock [8] Market Trends - In commodity news, oil prices increased by 0.3% to $62.97, while gold prices decreased by 1.7% to $3,291.10 [4] - Silver and copper also saw declines of 1.7% to $32.945 and 1% to $4.8085, respectively [4]

Financial Performance - Total revenues for 2025 reached $31,726 million, compared to $36,436 million in 2024, reflecting a decrease of approximately 12.5% year-over-year[2] - Net income attributable to Phillips 66 for 2025 was $487 million, down from $748 million in 2024, representing a decline of about 34.8%[4] - The company reported a basic earnings per share of $1.19 for the first quarter of 2025, compared to $1.74 in the same quarter of 2024, indicating a decrease of approximately 31.6%[3] - Adjusted net income for 2025 was $882 million, down from $1,176 million in 2024, indicating a decline of approximately 25.0%[7] - Adjusted Net Income attributable to Phillips 66 was a loss of $368 million in 2025, compared to a profit of $2,604 million in 2024[8] - The company reported a diluted loss per share of $0.90 in 2025, down from a profit of $6.15 in 2024[8] - Net income for 2025 1st quarter was $526 million, compared to $2,175 million year-to-date for 2024[17] - Net income for 2025 YTD reached $1,726 million, compared to $1,770 million for the same period in 2024, reflecting a decrease of 2.5%[29] - The company reported a total loss before income taxes of $937 million for 2025, compared to a loss of $365 million for the full year 2024[32] Operating Expenses - Operating expenses for 2025 totaled $1,622 million, an increase from $1,452 million in 2024, marking an increase of about 11.7%[2] - The company’s total costs and expenses for 2025 were $31,078 million, compared to $35,472 million in 2024, a decrease of about 12.5%[2] - Total operating and SG&A expenses for 2025 Q1 were $511 million, a slight increase from $568 million in 2024 Q4, showing a decrease of 10%[22] - Operating and SG&A expenses totaled $1,120 million in 2025, an increase from $991 million in 2024[33] Segment Performance - The refining segment reported a loss of $937 million in the first quarter of 2025, compared to a profit of $216 million in the second quarter of 2024[5] - Midstream income for 2025 was $751 million, up from $554 million in 2024, reflecting an increase of approximately 35.6%[5] - The Chemicals segment reported an Adjusted EBITDA of $1,348 million for 2025, with Q4 contributing $348 million[10] - The Refining segment experienced a loss of $966 million in Adjusted EBITDA for 2025, with Q1 showing a loss of $452 million[10] - Marketing and Specialties segment generated an Adjusted EBITDA of $1,824 million in 2025, with Q4 contributing $484 million[10] Capital Expenditures - Consolidated capital expenditures and investments for 2025 1st quarter totaled $423 million, with a year-to-date total of $1,859 million for 2024[20] - The company’s capital expenditures for growth in 2025 1st quarter were $229 million, while sustaining expenditures were $194 million[20] - Capital expenditures and investments for 2025 YTD totaled $1,617 million, a decrease from $1,646 million in 2024 YTD[29] Taxation - The effective tax rate for the first quarter of 2025 was 18.8%, consistent with the same rate in the first quarter of 2024[3] - The income tax expense for Q1 2025 is $122 million, with a total of $500 million for the full year 2024[60] - The adjusted effective tax rate for the full year 2024 is 20.5%, reflecting the overall tax strategy[60] Market Strategy - The company plans to focus on market expansion and new technology development to enhance future performance[6] - The company plans to enhance market expansion strategies and invest in new technologies to improve operational efficiency[39] Asset Dispositions - The company recognized impairments totaling $346 million in the Midstream segment for 2024[12] - The net gain on asset disposition in the Marketing and Specialties segment was $1,017 million in 2025[12] - The company reported a net gain on asset disposition of $(68) million in 2025 Q1, compared to $(238) million in 2024 Q3, indicating a reduction in losses[25] - The company recorded a net gain on asset disposition of $(1,085) million in Q1 2025, impacting overall financial performance[47] Market Conditions - The realized refining margin for the Atlantic Basin/Europe was $7.08 per barrel in 2025, down from $7.42 per barrel in 2024[32] - Worldwide refining margins averaged $6.81 per barrel in 2025, down from $8.84 per barrel in 2024[32] - The weighted-average NGL price in 2025 Q1 was $0.74 per gallon, up from $0.68 per gallon in 2024 Q4, indicating an increase of 8.8%[22] - Henry Hub natural gas price in 2025 Q1 was $4.27 per MMBtu, significantly higher than $2.24 per MMBtu in 2024 Q4, marking an increase of 90.5%[22] - WTI price in 2025 Q1 was $71.46 per BBL, a decrease from $75.83 per BBL in 2024 Q4, reflecting a decline of 5.0%[22] Debt and Equity - Total Debt as of Q1 2025 was $18,803 million, down from $20,154 million in Q4 2024[46] - Total Equity as of Q1 2025 was $28,353 million, a decrease from $30,794 million in Q4 2024[46] - Debt-to-Capital Ratio remained stable at 40% in Q1 2025[46] Special Items - Total special items (pre-tax) amounted to $1,064 million in 2025, compared to a loss of $710 million in 2024[12] - The special items impacted the income (loss) before income taxes significantly, with $(1,064) million in Q1 2025[60]

Core Viewpoint - Phillips66 reported a significant loss in Q1 2025, with adjusted earnings per share of -$0.90, exceeding analyst expectations of -$0.72, highlighting severe challenges in the refining sector [1] Financial Performance - The refining segment posted a net loss of $937 million, contrasting sharply with a profit of $216 million in the same period last year [1] - Refining profit margins plummeted by 38% year-over-year to $6.81 per barrel, while turnaround costs surged over twofold to $270 million [1] Operational Challenges - Seasonal maintenance led to a decline in capacity utilization from 92% in the previous year to 80% [1] - The CEO acknowledged that this was one of the largest spring maintenance periods in the company's history, indicating inevitable short-term performance pressure [2] Industry Context - Competitor Valero Energy also reported quarterly losses due to declining refining margins, reflecting a broader industry struggle [1] - Concerns are rising regarding potential tariffs and trade war escalations under the Trump administration, which could further suppress demand for gasoline and aviation fuels [1] Strategic Considerations - Following maintenance, the CEO expressed optimism for a rebound in profit margins [2] - The company is facing a board seat contest from activist investor Elliott Management, which advocates for the separation of refining and midstream operations to unlock value, while management emphasizes the risk mitigation benefits of a full value chain approach [2] - The traditional refining sector is grappling with dual challenges of short-term maintenance and cost inflation, alongside long-term pressures for low-carbon transitions and the search for new growth opportunities [2]

分组1 - Phillips 66 reported a quarterly loss of $0.90 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.77, and a significant decline from earnings of $1.90 per share a year ago, indicating an earnings surprise of -16.88% [1] - The company posted revenues of $31.73 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.49%, but down from $36.44 billion in the same quarter last year [2] - Over the last four quarters, Phillips 66 has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] 分组2 - The stock has underperformed, losing about 8.1% since the beginning of the year, compared to a decline of -6.8% for the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $2.15 on revenues of $31.81 billion, and for the current fiscal year, it is $4.80 on revenues of $125.7 billion [7] - The Zacks Industry Rank for Oil and Gas - Refining and Marketing is in the top 37% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]