Phillips 66(PSX) - 2025 Q2 - Quarterly Results

Financial Summary Consolidated Income Statement Phillips 66 reported Q2 2025 net income of $908 million, down from Q2 2024, due to lower sales and equity earnings Consolidated Income Statement Highlights (Millions of Dollars) | Financial Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Sales and other operating revenues | 33,323 | 38,129 | 63,753 | 143,153 | | Total Revenues and Other Income | 33,522 | 38,911 | 65,248 | 145,496 | | Income before income taxes | 1,120 | 1,311 | 1,768 | 2,675 | | Net Income | 908 | 1,020 | 1,434 | 2,175 | | Net Income Attributable to Phillips 66 | 877 | 1,015 | 1,364 | 2,117 | Earnings Per Share (Dollars) | EPS Type | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Basic | $2.15 | $2.39 | | Diluted | $2.15 | $2.38 | Special Items Q2 2025 recorded a net pre-tax special charge of $167 million, mainly from derivatives and legal accruals, contrasting with a YTD gain of $897 million - Total pre-tax special items for Q2 2025 were a charge of ($167) million, while YTD 2025 special items were a gain of $897 million[12] - The Marketing and Specialties segment recorded a $928 million YTD gain from asset dispositions, including the sale of its interest in Coop Mineraloel AG, but also recognized an $89 million unrealized loss from foreign currency derivatives in Q2[12] - The Midstream segment had a $68 million gain on an asset disposition in Q1 2025[12][13] Segment Performance Overall Segment Performance Midstream and Marketing & Specialties drove Q2 2025 earnings, with Refining recovering significantly and Chemicals declining, leading to $2,501 million in adjusted EBITDA Adjusted Income (Loss) Before Income Taxes by Segment (Millions of Dollars) | Segment | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Midstream | 731 | 683 | 753 | | Chemicals | 20 | 113 | 222 | | Refining | 392 | (937) | 302 | | Marketing and Specialties | 660 | 265 | 415 | | Renewable Fuels | (133) | (185) | (55) | Adjusted EBITDA by Segment (Millions of Dollars) | Segment | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Midstream | 972 | 885 | 971 | | Chemicals | 148 | 244 | 348 | | Refining | 867 | (452) | 531 | | Marketing and Specialties | 718 | 315 | 484 | | Renewable Fuels | (110) | (162) | (43) | Midstream Midstream reported Q2 2025 income before taxes of $731 million and adjusted EBITDA of $972 million, driven by NGLs and increased transportation volumes Midstream Financials (Millions of Dollars) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Income before Income Taxes | 731 | 751 | 767 | | Adjusted EBITDA | 972 | 885 | 971 | Midstream Operating Volumes | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Pipelines (MB/D) | 3,093 | 2,893 | 3,059 | | NGL Production (MB/D) | 456 | 437 | 437 | | NGL Fractionated (MB/D) | 883 | 748 | 744 | Chemicals Chemicals saw a significant Q2 2025 earnings drop to $20 million income before taxes, driven by lower margins and decreased Olefins and Polyolefins capacity utilization to 92% Chemicals Financials (Millions of Dollars) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Income before Income Taxes | 20 | 113 | 222 | | Adjusted EBITDA | 148 | 244 | 348 | - Olefins and Polyolefins capacity utilization was 92% in Q2 2025, down from 98% in Q2 2024[31] - The Ethylene to High Density Polyethylene chain cash margin decreased to 7.4 cents/lb in Q2 2025 from 18.3 cents/lb in Q2 2024[31] Refining Refining achieved a strong Q2 2025 turnaround with $359 million income before taxes, driven by higher worldwide realized margins of $11.25/BBL and 98% crude oil capacity utilization Refining Financials (Millions of Dollars) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Income (Loss) before Income Taxes | 359 | (937) | 302 | | Adjusted EBITDA | 867 | (452) | 531 | Refining Margins and Utilization | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Worldwide Realized Refining Margins ($/BBL) | 11.25 | 6.81 | 10.01 | | Worldwide Crude Oil Capacity Utilization (%) | 98% | 80% | 98% | - Total turnaround expenses dropped to $53 million in Q2 2025 from $270 million in Q1 2025, contributing to improved profitability[36] Marketing and Specialties Marketing and Specialties reported increased Q2 2025 income before taxes of $571 million, driven by strong realized fuel margins, particularly in the U.S. at $2.83/BBL, and higher sales volumes Marketing and Specialties Financials (Millions of Dollars) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Income (Loss) before Income Taxes | 571 | 1,282 | 415 | | Adjusted EBITDA | 718 | 315 | 484 | Realized Marketing Fuel Margins ($/BBL) | Region | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | U.S. | 2.83 | 1.36 | 1.70 | | International | 7.11 | 4.87 | 5.87 | Renewable Fuels Renewable Fuels continued to incur a Q2 2025 pre-tax loss of $133 million, an increased loss year-over-year but an improvement from Q1, with 40 MB/D produced and 71 MB/D sold Renewable Fuels Financials (Millions of Dollars) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Income (Loss) before Income Taxes | (133) | (185) | (55) | | Adjusted EBITDA | (110) | (162) | (43) | Renewable Fuels Operating Statistics (MB/D) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Total Renewable Fuels Produced | 40 | 44 | 31 | | Total Renewable Fuel Sales | 71 | 63 | 45 | Corporate and Other Corporate and Other reported a Q2 2025 pre-tax loss of $428 million, primarily from net interest expense and corporate overhead, with the debt-to-capital ratio increasing to 42% Corporate and Other Loss Detail (Millions of Dollars) | Component | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net interest expense | (230) | (200) | | Corporate overhead and other | (196) | (133) | | Total Loss before Income Taxes | (428) | (340) | Capital Structure | Metric | End of Q2 2025 | End of Q2 2024 | | :--- | :--- | :--- | | Total Debt (Millions) | $20,935 | $19,960 | | Total Equity (Millions) | $28,626 | $30,507 | | Debt-to-Capital Ratio | 42% | 40% | Cash Flow and Capital Program Cash Flow Information Net cash from operating activities significantly decreased to $1,032 million in H1 2025 due to working capital, while investing activities used $1,143 million, including a $2,220 million acquisition, and financing used $523 million Summary of Cash Flows (YTD, Millions of Dollars) | Cash Flow Activity | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | 1,032 | 4,191 | | Net Cash Used in Investing Activities | (1,143) | (2,463) | | Net Cash Used in Financing Activities | (523) | (3,305) | | Net Change in Cash | (594) | (1,585) | - Investing activities in YTD 2025 included $1,010 million in capital expenditures and a significant $2,220 million acquisition, offset by $2,031 million in proceeds from asset dispositions[18] - Financing activities in YTD 2025 included $3,499 million in debt issuance, $2,375 million in debt repayment, $666 million in stock repurchases, and $956 million in dividend payments[18] Capital Program Consolidated capital expenditures and investments for H1 2025 totaled $1,010 million, with $608 million for growth and $402 million for sustaining capital, primarily allocated to Midstream Consolidated Capital Expenditures by Type (YTD 2025, Millions of Dollars) | Category | Amount | | :--- | :--- | | Growth | $608 | | Sustaining | $402 | | Total | $1,010 | Consolidated Capital Expenditures by Segment (YTD 2025, Millions of Dollars) | Segment | Amount | | :--- | :--- | | Midstream | $600 | | Refining | $324 | | Marketing and Specialties | $49 | | Renewable Fuels | $18 | | Corporate and Other | $19 | | Total | $1,010 | Non-GAAP Reconciliations Reconciliation to Adjusted EBITDA This section reconciles Q2 2025 GAAP net income of $908 million to Phillips 66 Adjusted EBITDA of $2,501 million through adjustments for taxes, interest, depreciation, and special items Reconciliation of Net Income to Adjusted EBITDA (Q2 2025, Millions of Dollars) | Line Item | Amount | | :--- | :--- | | Net income | 908 | | Plus: Income tax expense | 212 | | Plus: Net interest expense | 230 | | Plus: Depreciation and amortization | 816 | | Phillips 66 EBITDA | 2,166 | | Plus: Special Item Adjustments (pre-tax) | 167 | | Plus: Other Adjustments | 168 | | Phillips 66 Adjusted EBITDA | 2,501 | Realized Margin Reconciliations This section details reconciliations for non-GAAP Realized Refining and Marketing Fuel Margins, bridging GAAP income before taxes to these metrics by adjusting for various operating costs - For the Refining segment, worldwide income before taxes of $359 million in Q2 2025 was reconciled to a realized refining margin of $1,968 million[56] - For the Marketing segment, U.S. income before taxes of $429 million in Q2 2025 was reconciled to a realized marketing fuel margin of $523 million[60] Adjusted Effective Tax Rate Reconciliation This section reconciles the Q2 2025 GAAP effective tax rate of 19.0% to an adjusted effective tax rate of 22.0% by removing special item tax effects, providing insight into recurring operations Effective Tax Rate Reconciliation (Q2 2025) | Metric | Rate | | :--- | :--- | | Effective tax rate (%) | 18.8% | | Adjusted effective tax rate (%) | 22.0% |