Item 1. FINANCIAL STATEMENTS

Consolidated Statement of Income			Phillips 66

			Millions of Dollars
			Three Months Ended March 31
			2026						2025
Revenues and Other Income
Sales and other operating revenues			$	32,540					30,430
Equity in earnings of affiliates			252						153
Net gain on dispositions			6						1,087
Other income			204						56
Total Revenues and Other Income			33,002						31,726
Costs and Expenses
Purchased crude oil and products			29,216						27,660
Operating expenses			1,881						1,622
Selling, general and administrative expenses			537						519
Depreciation and amortization			558						791
Impairments			8						26
Taxes other than income taxes			234						233
Accretion on discounted liabilities			12						12
Interest and debt expense			286						221
Foreign currency transaction (gains) losses			10						(6)
Total Costs and Expenses			32,742						31,078
Income before income taxes			260						648
Income tax expense			41						122
Net Income			219						526
Less: net income attributable to noncontrolling interests			12						39
Net Income Attributable to Phillips 66			$	207					487
Net Income Attributable to Phillips 66 Per Share of Common Stock (dollars)
Basic			$	0.51					1.19
Diluted			0.51						1.18
Weighted-Average Common Shares Outstanding (thousands)
Basic			402,036						409,182
Diluted			403,273						410,505
See Notes to Consolidated Financial Statements.

Consolidated Statement of Comprehensive Income			Phillips 66

			Millions of Dollars
			Three Months Ended March 31
			2026						2025
Net Income			$	219					526
Other comprehensive income (loss)
Defined benefit plans
Amortization of net actuarial loss and settlements			4						5
Plans sponsored by equity affiliates			2						2
Income taxes on defined benefit plans			(1)						(1)
Defined benefit plans, net of income taxes			5						6
Foreign currency translation adjustments			(69)						90
Income taxes on foreign currency translation adjustments			—						(2)
Foreign currency translation adjustments, net of income taxes			(69)						88
Other Comprehensive Income (Loss), Net of Income Taxes			(64)						94
Comprehensive Income			155						620
Less: comprehensive income attributable to noncontrolling interests			12						39
Comprehensive Income Attributable to Phillips 66			$	143					581

See Notes to Consolidated Financial Statements.

Consolidated Balance Sheet			Phillips 66

			Millions of Dollars
			March 31 2026						December 31 2025
Assets
Cash and cash equivalents			$	5,150					1,116
Accounts and notes receivable (net of allowances of $66 million in 2026 and $68 million in 2025)			11,284						9,158
Accounts and notes receivable—related parties			626						613
Inventories			6,723						5,097
Prepaid expenses and other current assets			3,613						1,287
Total Current Assets			27,396						17,271
Investments and long-term receivables			12,005						11,905
Net properties, plants and equipment			39,149						39,097
Goodwill			1,433						1,433
Intangibles			969						978
Other assets			3,132						2,996
Total Assets			$	84,084					73,680
Liabilities
Accounts payable			$	11,437					8,581
Accounts payable—related parties			439						286
Short-term debt			8,448						1,038
Accrued income and other taxes			1,184						1,362
Employee benefit obligations			398						680
Other accruals			2,285						1,379
Total Current Liabilities			24,191						13,326
Long-term debt			18,676						18,678
Asset retirement obligations and accrued environmental costs			991						1,022
Deferred income taxes			7,376						7,308
Employee benefit obligations			562						573
Other liabilities and deferred credits			2,607						2,532
Total Liabilities			54,403						43,439
Equity
Common stock (2,500,000,000 shares authorized at $0.01 par value) Issued (2026—660,921,696 shares; 2025—659,391,484 shares)
Par value			7						7
Capital in excess of par			20,021						19,948
Treasury stock (at cost: 2026—259,986,676 shares; 2025—258,252,603 shares)			(24,203)						(23,934)
Retained earnings			32,934						33,239
Accumulated other comprehensive loss			(231)						(167)
Total Stockholders’ Equity			28,528						29,093
Noncontrolling interests			1,153						1,148
Total Equity			29,681						30,241
Total Liabilities and Equity			$	84,084					73,680

See Notes to Consolidated Financial Statements.

Consolidated Statement of Cash Flows			Phillips 66

			Millions of Dollars
			Three Months Ended March 31
			2026						2025
Cash Flows From Operating Activities
Net income			$	219					526
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization			558						791
Impairments			8						26
Accretion on discounted liabilities			12						12
Deferred income taxes			67						(133)
Undistributed equity earnings			(86)						120
Net gain on dispositions			(6)						(1,087)
Unrealized investment loss			9						10
Other			(82)						(6)
Working capital adjustments
Accounts and notes receivable			(2,471)						901
Inventories			(1,658)						(1,214)
Prepaid expenses and other current assets			(2,327)						(254)
Accounts payable			3,023						384
Taxes and other accruals			470						111
Net Cash Provided by (Used in) Operating Activities			(2,264)						187
Cash Flows From Investing Activities
Capital expenditures and investments			(582)						(423)
Acquisitions, net of cash acquired			(66)						—
Return of investments in equity affiliates			26						25
Proceeds from asset dispositions			7						2,034
Other			9						(45)
Net Cash Provided by (Used in) Investing Activities			(606)						1,591
Cash Flows From Financing Activities
Issuance of debt			9,629						—
Repayment of debt			(1,965)						(1,287)
Issuance of common stock			84						23
Repurchase of common stock			(269)						(247)
Dividends paid on common stock			(509)						(469)
Distributions to noncontrolling interests			(22)						(14)
Contributions from noncontrolling interests			15						—
Other			(43)						(55)
Net Cash Provided by (Used in) Financing Activities			6,920						(2,049)
Effect of Exchange Rate Changes on Cash and Cash Equivalents			(16)						22
Net Change in Cash and Cash Equivalents			4,034						(249)
Cash and cash equivalents at beginning of period			1,116						1,738
Cash and Cash Equivalents at End of Period			$	5,150					1,489

See Notes to Consolidated Financial Statements.

Consolidated Statement of Changes in Equity			Phillips 66

			Millions of Dollars
			Three Months Ended March 31
			Attributable to Phillips 66
			Common Stock
			Par Value			Capital in Excess of Par			Treasury Stock			Retained Earnings			Accum. Other Comprehensive Loss			Noncontrolling Interests			Total
December 31, 2025			$	7		19,948			(23,934)			33,239			(167)			1,148			30,241
Net income			—			—			—			207			—			12			219
Other comprehensive loss			—			—			—			—			(64)			—			(64)
Dividends paid on common stock ($1.27 per share)			—			—			—			(509)			—			—			(509)
Repurchase of common stock			—			—			(269)			—			—			—			(269)
Distributions to noncontrolling interests			—			—			—			—			—			(22)			(22)
Contributions from noncontrolling interests			—			—			—			—			—			15			15
Benefit plan activity			—			73			—			(3)			—			—			70
March 31, 2026			$	7		20,021			(24,203)			32,934			(231)			1,153			29,681
December 31, 2024			$	7		19,788			(22,751)			30,771			(407)			1,055			28,463
Net income			—			—			—			487			—			39			526
Other comprehensive income			—			—			—			—			94			—			94
Dividends paid on common stock ($1.15 per share)			—			—			—			(469)			—			—			(469)
Repurchase of common stock			—			—			(244)			—			—			—			(244)
Distributions to noncontrolling interests			—			—			—			—			—			(14)			(14)
Benefit plan activity			—			1			—			(4)			—			—			(3)
March 31, 2025			$	7		19,789			(22,995)			30,785			(313)			1,080			28,353

			Shares
			Three Months Ended March 31
			Common Stock Issued			Treasury Stock
December 31, 2025			659,391,484			258,252,603
Repurchase of common stock			—			1,734,073
Shares issued—share-based compensation			1,530,212			—
March 31, 2026			660,921,696			259,986,676
December 31, 2024			656,987,861			248,594,923
Repurchase of common stock			—			1,996,593
Shares issued—share-based compensation			1,185,541			—
March 31, 2025			658,173,402			250,591,516
See Notes to Consolidated Financial Statements.

Notes to Consolidated Financial Statements			Phillips 66

Note 1—Interim Financial Information

The unaudited interim financial information presented in the financial statements included in this report is prepared in accordance with generally accepted accounting principles in the United States (GAAP) and includes all known accruals and adjustments necessary, in the opinion of management, for a fair presentation of the consolidated financial position of Phillips 66 and its results of operations and cash flows for the periods presented. Unless otherwise specified, all such adjustments are of a normal and recurring nature. Certain notes and other information have been condensed or omitted from the interim financial statements included in this report. Therefore, these interim financial statements should be read in conjunction with the consolidated financial statements and notes included in our 2025 Annual Report on Form 10-K. The results of operations for the three months ended March 31, 2026, are not necessarily indicative of the results expected for the full year.

Note 2—Business Combinations

Refining Acquisition

On October 1, 2025, we acquired the remaining 50% equity interest in WRB Refining LP (WRB) from subsidiaries of Cenovus Energy Inc. (Cenovus) for total cash consideration of $1.3 billion. This acquisition enables full integration with our broader value chain and expands our position in the Central Corridor region.

The components of the fair value of the WRB acquisition consideration are:

			Millions of Dollars
Cash paid to Cenovus			$	1,340
Fair value of previously held equity interest in WRB			1,304
Settlement of relationships with Phillips 66 and WRB			793
Total acquisition consideration			$	3,437

The acquisition date fair value of the previously held equity interest in WRB was determined using a market approach and the valuation resulted in a Level 3 nonrecurring fair value measurement.

We accounted for this acquisition as a business combination and provisionally recorded $2,771 million of PP&E; $1,200 million of inventory; $54 million of other long-term assets; $9 million of intangibles; $450 million of short-term debt assumed at acquisition and also fully repaid on October 1, 2025; $87 million of net working capital deficit (excluding inventory and short-term debt); $34 million of AROs and accrued environmental costs; $21 million of other long-term liabilities; and $5 million of deferred income tax 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. See Note 14—Fair Value Measurements for additional information on the determination of fair value.

Midstream Acquisition

On April 1, 2025, we acquired all issued and outstanding equity interests in each of EPIC Y-Grade GP, LLC and EPIC Y-Grade, LP, together with their respective subsidiaries (collectively referred to herein as Coastal Bend), which own various long haul natural gas liquids (NGL) pipelines, fractionation facilities and distribution systems, for total consideration of $2.2 billion, net of cash acquired. This acquisition further enhances our wellhead-to-market strategy. We finalized the valuation of the assets acquired and liabilities assumed during the three months ended March 31, 2026. For this acquisition, we recorded $2,224 million of PP&E; $4 million of other assets; $4 million of net working capital (excluding cash); $33 million of other long-term liabilities; and $4 million of AROs.

Note 3—Sales and Other Operating Revenues

Disaggregated Revenues

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

			Millions of Dollars
			Three Months Ended March 31
			2026						2025
Product Line and Services
Refined petroleum products and renewable fuels			$	24,878					22,249
Crude oil resales			4,324						3,102
Natural gas liquids and natural gas			4,541						4,506
Services and other*****			(1,203)						573
Consolidated sales and other operating revenues			$	32,540					30,430
Geographic Location**
United States			$	25,790					24,159
United Kingdom			3,774						2,962
Germany			709						1,218
Other countries			2,267						2,091
Consolidated sales and other operating revenues			$	32,540					30,430
** Includes economic hedging losses associated with derivatives-related activities. See Note 13—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 March 31, 2026, and December 31, 2025, receivables from contracts with customers were $9,250 million and $7,781 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 March 31, 2026, and December 31, 2025, our asset balances related to such payments were $852 million and $820 million, respectively.

Our contract liabilities primarily represent advances from our customers prior to product or service delivery. At March 31, 2026, and December 31, 2025, contract liabilities were $210 million and $198 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 March 31, 2026, the remaining performance obligations related to these minimum volume commitment contracts amounted to $819 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 2036, with a weighted average remaining life of four years as of March 31, 2026.

Note 4—Credit Losses

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 March 31, 2026, and December 31, 2025, we reported $11,910 million and $9,771 million of accounts and notes receivable, respectively, net of allowances of $66 million and $68 million, respectively. Based on an aging analysis at March 31, 2026, 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 receivable sold under a securitization facility, as well as standby letters of credit. See Note 9—Debt, Note 11—Guarantees, and Note 12—Contingencies and Commitments, for additional information on these off-balance sheet exposures.

Note 5—Inventories

Inventories consisted of the following:

			Millions of Dollars
			March 31 2026						December 31 2025
Crude oil and products			$	6,141					4,529
Materials and supplies			582						568
			$	6,723					5,097

Inventories valued on the last-in, first-out (LIFO) basis totaled $6,078 million and $4,461 million at March 31, 2026, and December 31, 2025, respectively. The estimated excess of current replacement cost over LIFO cost of inventories amounted to approximately $10.5 billion and $3.6 billion at March 31, 2026, and December 31, 2025, respectively.

Certain planned reductions in inventory that are not expected to be replaced by the end of the year cause liquidations of LIFO inventory values. LIFO liquidations did not have a material impact on net income for the three months ended March 31, 2026 and 2025.

Note 6—Investments, Loans and Long-Term Receivables

Equity Investments

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

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 environmental impacts from an easement allowing the passage of the Dakota Access Pipeline (DAPL) under Lake Oahe in North Dakota. Later in 2020, the trial court vacated the easement, but operations have been allowed to continue while the USACE proceeds with the EIS as ordered. The Tribe’s requests for a shutdown have been denied. In March 2025, the trial court dismissed a second lawsuit filed by the Tribe, again challenging USACE’s allowance of pipeline operations while the EIS process proceeds. The Tribe’s lawsuit was premature, and the trial court held that it cannot be refiled until after a final EIS is issued.

In December 2025, the USACE published its final EIS, completing its analysis of alternatives. The final EIS evaluates five alternatives: two no-action alternatives (denial with restoration or abandonment) and three action alternatives, with one marked as USACE’s preferred alternative, that would grant the easement under varying conditions. The preferred alternative would grant the easement subject to the same conditions as the 2017 easement but would authorize an increased throughput volume of 1.1 million barrels per day (bpd), up from the previous 570,000 bpd under the original authorization. The remaining action alternatives would impose either additional operational conditions or require an alternate pipeline route, both of which may entail substantial implementation costs and could have a material impact on our financial statements.

We are still awaiting a Record of Decision (ROD), which will provide a definitive statement of the selected alternative and any related conditions. The Tribe and affiliated parties may file a new lawsuit in Washington, D.C., challenging the ROD shortly after it is issued. Most recently, the Tribe has appealed the dismissal, but the issuance of the ROD will supersede and effectively moot the appeal.

Dakota Access and ETCO have guaranteed repayment of senior unsecured notes issued by a wholly owned subsidiary of Dakota Access. At March 31, 2026, the aggregate principal amount outstanding of Dakota Access’ senior unsecured notes was $850 million.

In addition, Phillips 66 Partners LP (Phillips 66 Partners), a wholly owned subsidiary of Phillips 66, 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 March 31, 2026, 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 March 31, 2026.

At March 31, 2026, the aggregate book value of our investments in Dakota Access and ETCO was $842 million.

OnCue Holdings, LLC (OnCue)

We hold a 50% interest in OnCue, a joint venture that owns and operates retail convenience stores. We fully guarantee various debt agreements of OnCue, and our co-venturer does not participate in the guarantees. This entity is considered a variable interest entity (VIE) because our debt agreements resulted in OnCue not being exposed to all potential losses. We have determined that we are not the primary beneficiary because we do not have the power to direct the activities that most significantly impact economic performance. At March 31, 2026, our maximum exposure to loss was $271 million, which represented the book value of our investment in OnCue of $218 million and guaranteed debt obligations of $53 million.

Investment Dispositions

On January 31, 2025, we sold our 49% ownership interest in Coop Mineraloel AG (Coop) and settled the foreign currency forward contracts entered into in connection with the asset sale. We received cash proceeds of $1.2 billion, consisting of a sales price of $1.15 billion and a final dividend relating to financial year 2024 of $92 million from Coop that was paid on January 30, 2025. We recognized a before-tax gain of $1 billion associated with the sale, which is included within the “Net gain on dispositions” line item on our consolidated statement of income for the three months ended March 31, 2025, and is reported in our M&S segment. The final dividend of $92 million is included within the “Cash Flows from Operating Activities” section on our consolidated statement of cash flows.

On January 30, 2025, DCP Midstream, LP (DCP LP) sold its 25% ownership interest in Gulf Coast Express Pipeline LLC for cash proceeds of $853 million. We recognized a before-tax gain of $68 million, which is included within the “Net gain on dispositions” line item on our consolidated statement of income for the three months ended March 31, 2025, and is reported in our Midstream segment.

Note 7—Properties, Plants and Equipment

Our investment in PP&E and the associated accumulated depreciation and amortization (Accum. D&A) balances were as follows:

			Millions of Dollars
			March 31, 2026																		December 31, 2025
			Gross PP&E						Accum. D&A						Net PP&E						Gross PP&E						Accum. D&A						Net PP&E
Midstream			$	29,903					5,973						23,930						29,558						5,771						23,787
Chemicals			—						—						—						—						—						—
Refining			22,959						11,027						11,932						25,955						13,685						12,270
Marketing and Specialties			1,029						556						473						1,014						543						471
Renewable Fuels			3,787						1,789						1,998						3,772						1,762						2,010
Corporate and Other			4,592						3,776						816						1,492						933						559
			$	62,270					23,121						39,149						61,791						22,694						39,097

In the fourth quarter of 2025, we began idling facilities at our Los Angeles Refinery and ceased fuel production. We have submitted redevelopment project applications for the facilities, initiating the review process and allowing us to continue pursuing the redevelopment of the property for future uses. As a result of the decision to cease operations and begin idling the facilities, the carrying values of the associated net properties, plants and equipment (PP&E) and intangible assets were depreciated to the estimated salvage value of $241 million at December 31, 2025. Total depreciation related to the Los Angeles Refinery assets for the three months ended March 31, 2025, was $270 million, including $246 million of accelerated depreciation, and was included within the “Depreciation and amortization” line item on our consolidated statement of income reported in our Refining segment. In the first quarter of 2026, we transferred $2,965 million in gross PP&E and $2,699 million of accumulated depreciation and amortization associated with the idled Los Angeles Refinery from our Refining segment to Corporate and Other.

Note 8—Earnings Per Share

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.

			Three Months Ended March 31
			2026									2025
			Basic			Diluted						Basic			Diluted
Amounts Attributed to Phillips 66 Common Stockholders (millions):
Net Income Attributable to Phillips 66			207			207						487			487
Income allocated to participating securities			(2)			(2)						(2)			(2)
Net income available to common stockholders			$	205		205						485			485
Weighted-average common shares outstanding (thousands):			400,933			402,036						407,926			409,182
Effect of share-based compensation			1,103			1,237						1,256			1,323
Weighted-average common shares outstanding—EPS			402,036			403,273						409,182			410,505
Earnings Per Share of Common Stock (dollars)			$	0.51		0.51						1.19			1.18

Note 9—Debt

Senior Notes and Term Loan Issuances and Repayments

Repayments

On February 17, 2026, upon maturity, Phillips 66 repaid the remaining $100 million outstanding on its 1.300% Senior Notes due February 2026, with an aggregate principal amount of $500 million.

On February 18, 2025, upon maturity, Phillips 66 Partners repaid its 3.605% Senior Notes due February 2025, with an aggregate principal amount of $59 million.

Term Loan Agreement

On March 18, 2026 (the Term Loan Closing Date), Phillips 66 Company entered into a 364-day, $2.25 billion term loan agreement guaranteed by Phillips 66 (the Term Loan Agreement). The Term Loan Agreement provides for a single borrowing on the Term Loan Closing Date and matures 364 days after the Term Loan Closing Date. 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 term Secured Overnight Financing Rate (SOFR) in effect from time to time plus an applicable margin of 1.100%; or (b) the reference rate (as described in the Term Loan Agreement) plus an applicable margin of 0.100%. At March 31, 2026, the entire $2.25 billion was borrowed under the Term Loan Agreement, which matures in March 2027.

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. During 2025, Phillips 66 Company amended the Receivables Securitization Facility to, among other things, increase the maximum size of the Receivables Securitization Facility to $1.25 billion and extend the term of the facility through September 28, 2026. On March 13, 2026, Phillips 66 Company amended the Receivables Securitization Facility to, among other things, increase the maximum size of the Receivables Securitization Facility from $1.25 billion to $1.75 billion and permit P66 Receivables to request a future increase in the maximum facility size to up to $2.0 billion. Under the amended Receivables Securitization Facility, P66 Receivables may borrow and incur indebtedness from, and/or sell certain accounts receivable in an amount not to exceed $1.75 billion 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 receivable outstanding under the Receivables Securitization Facility accrue interest at an adjusted term SOFR plus the applicable margin. In all instances, Phillips 66 Company retains the servicing of the accounts receivables transferred.

Accounts receivable sold 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 receivable sold to the purchasers. For the three months ended March 31, 2026, we sold $264 million of accounts receivable in exchange for a $264 million reduction in our borrowings under the Receivables Securitization Facility, which was recognized as a non-cash financing transaction. For the three months ended March 31, 2025, we sold $130 million of accounts receivables for cash proceeds under the Receivables Securitization Facility. We recognized immaterial charges associated with the transfers of financial assets, which are included as a component within the line item “Selling, general and administrative expense” on our consolidated statement of income, during the three months ended March 31, 2026 and 2025.

Borrowings under the Receivables Securitization Facility are recognized as short-term debt on the consolidated balance sheet. Borrowings are secured by the accounts receivable, held by P66 Receivables, which remain reported as accounts receivable on the consolidated balance sheet. At March 31, 2026, and December 31, 2025, we had outstanding borrowings of $384 million and $200 million, respectively. These borrowings were secured by accounts receivable held by P66 Receivables of $5.4 billion and $4.4 billion as of March 31, 2026, and December 31, 2025, respectively, which are included within the “Accounts and notes receivable” line item on our consolidated balance sheet.

At March 31, 2026, we had utilized $650 million of the $1.75 billion capacity of the Receivables Securitization Facility from $266 million of sold accounts receivable not yet remitted to the Administrative Agent and $384 million of outstanding borrowings. At December 31, 2025, we had utilized $367 million of the $1.25 billion capacity of the Receivables Securitization Facility from $167 million of sold accounts receivable not yet remitted to the Administrative Agent and $200 million of outstanding borrowings.

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. On March 26, 2026, Phillips 66 amended the 2025 Uncommitted Facility to increase the capacity by $100 million. At March 31, 2026, the entire $300 million was outstanding, while at December 31, 2025, no borrowings were outstanding 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 March 31, 2026, and December 31, 2025, no borrowings were outstanding under the 2024 Uncommitted Facility.

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 March 31, 2026, and December 31, 2025, no amount had been drawn under the Facility.

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 March 31, 2026, we had $5 billion borrowings outstanding under this program, while at December 31, 2025, $200 million of commercial paper had been issued under this program.

Note 10—Accounts Receivable Factoring

In addition to the Receivables Securitization Facility, discussed in Note 9—Debt, the Company maintains other accounts receivable factoring facilities with various financial institutions that enable the Company to sell certain eligible accounts receivable to these financial institutions on a non-recourse basis in which we retain the servicing of the accounts receivable transferred. Sales of accounts receivable under these facilities meet the sale criteria under ASC 860, Transfers and Servicing, and are derecognized from the consolidated balance sheet. Cash receipts from the sale of accounts receivable, received at the time of sale, are classified as cash flows from operating activities. For the three months ended March 31, 2026, we sold $330 million of accounts receivable for cash proceeds under these facilities. We recognized immaterial charges associated with these transfers, which are included as a component within the line item “Selling, general and administrative expense” on our consolidated statement of income for the three months ended March 31, 2026. We had $292 million and $195 million of sold accounts receivable uncollected as of March 31, 2026 and December 31, 2025, respectively, and these amounts were derecognized from our consolidated balance sheet.

Note 11—Guarantees

At March 31, 2026, 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 2030, to request to renew the lease, purchase the facility or assist the lessor in marketing it for resale. This agreement includes a residual value guarantee with a maximum potential future exposure of $404 million at March 31, 2026. In addition, we have residual value guarantees associated with railcar, airplane and truck leases with maximum potential future exposures totaling $176 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 6—Investments, Loans and Long-Term Receivables, for additional information regarding Dakota Access and the CECU.

At March 31, 2026, we also had other guarantees outstanding primarily for our portion of certain joint venture debt, which have remaining terms of up to four years. The maximum potential future exposures under these guarantees were approximately $53 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 March 31, 2026, and December 31, 2025, the carrying amount of recorded indemnifications was $52 million and $53 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 March 31, 2026, and December 31, 2025, environmental accruals for known contamination of $49 million and $50 million, respectively, were included in the carrying amount of the recorded indemnifications noted above. These environmental accruals were primarily included within the “Asset retirement obligations and accrued environmental costs” line item on our consolidated balance sheet. For additional information about environmental liabilities, see Note 12—Contingencies and Commitments.

Additionally, P66 Receivables has guaranteed all borrowings and receivables sold under the Receivables Securitization Facility. At March 31, 2026, $240 million of the sold accounts receivable remained uncollected, which represents our maximum potential future exposure under the guarantee associated with the Receivables Securitization Facility. See Note 9—Debt, for information regarding the guarantee under our Receivables Securitization Facility.

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.

Note 12—Contingencies and Commitments

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.

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.

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. At March 31, 2026, our total environmental accruals were $487 million, compared with $506 million at December 31, 2025. We expect to incur a substantial amount of these expenditures within the next 30 years. We have not reduced these accruals for possible insurance recoveries. In the future, we may be involved in additional environmental assessments, cleanups and proceedings.

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. Based on the willfulness finding, Propel Fuels asked the Propel Court to award $1.2 billion in exemplary damages, and Phillips 66 Company filed a brief in opposition to that request. A hearing on exemplary damages was held on March 4, 2025, and the Propel Court awarded Propel Fuels $195 million in exemplary damages on July 30, 2025. On August 5, 2025, the Propel Court entered a final judgment against Phillips 66 Company in the amount of $833 million. The judgment includes the $604.9 million jury verdict, $195 million of exemplary damages, and $33.3 million of pre-judgment interest at 7%. From the date of final judgment, post-judgment interest of 10% is accruing, which is included within the “Selling, general and administrative expenses” line on our consolidated statement of income and reported in the M&S segment. On August 25, 2025, Phillips 66 Company filed three post-trial motions requesting that the Propel Court render judgment in favor of Phillips 66 Company, grant a new trial, and/or reduce the damages award. On October 20, 2025, the Propel Court denied Phillips 66 Company’s motions. On November 14, 2025, Phillips 66 Company filed its Notice of Appeal, which has been assigned to Division Two of the First District Court of Appeal. Phillips 66 Company intends to file its opening appellate brief in accordance with the applicable appellate deadlines and any extensions thereto. Separately, on October 24, 2025, Propel Fuels filed additional motions with the Propel Court seeking attorney’s fees and costs. Phillips 66 Company filed its opposition to that request on January 13, 2026. The Propel Court heard argument on the motions on February 10, 2026, and took the motions under submission. Phillips 66 Company denies any wrongdoing and intends to vigorously defend its position.

The accrued amounts totaling $887 million and $867 million as of March 31, 2026 and December 31, 2025, respectively, are reflected as “Other liabilities and deferred credits” on our consolidated balance sheet. However, it is reasonably possible that the estimate of the loss could change based on the progression of the case, including the appeals process. 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, there can be no assurances that such defense efforts will be successful. Until the final resolution of this matter, we may be exposed to losses in excess of the amount recorded, and such amounts may have a material adverse effect on our financial position.

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 March 31, 2026, we had performance obligations secured by letters of credit and bank guarantees of $592 million related to various purchase and other commitments incident to the ordinary conduct of business.

Note 13—Derivatives and Financial Instruments

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 within the “Other income” line item on our consolidated statement of income. Realized and unrealized gains and losses on foreign currency derivatives 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 of our commodity derivative activity for the periods presented appear within the “Cash Flows from Operating Activities” 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 14—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.

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
			March 31, 2026															December 31, 2025
			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			$	763		(88)			—			675									2,714			(2,583)			—			131
Other assets			5			(4)			—			1									23			(20)			—			3
Liabilities
Other accruals			25,153			(27,226)			1,472			(601)									67			(108)			20			(21)
Other liabilities and deferred credits			181			(206)			25			—									—			—			—			—
Total			$	26,102		(27,524)			1,497			75									2,804			(2,711)			20			113

At March 31, 2026, and December 31, 2025, 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
			Three Months Ended March 31
			2026						2025
Sales and other operating revenues			$	(1,536)					(65)
Other income			106						14
Purchased crude oil and products			(1,216)						(176)
Net loss from commodity derivative activity			$	(2,646)					(227)

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 March 31, 2026, and December 31, 2025.

			Open Position Long / (Short)
			March 31 2026						December 31 2025
Commodity
Crude oil, refined petroleum products, NGL and renewable feedstocks (millions of barrels)			(53)						(33)
Natural gas (billions of cubic feet)			(14)						(17)

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 March 31, 2026, and December 31, 2025.

Note 14—Fair Value Measurements

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 Level 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.

• 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.

•**Investment in NOVONIX Limited (NOVONIX)—Our investment in NOVONIX 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
			March 31, 2026
			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			$	25,427					—						—						25,427			(25,423)			—			—			4
Physical forward contracts			—						673						2						675			(3)			—			—			672
Rabbi trust assets			134						—						—						134			N/A			N/A			—			134
Investment in NOVONIX			17						—						—						17			N/A			N/A			—			17
			$	25,578					673						2						26,253			(25,426)			—			—			827
Commodity Derivative Liabilities
Exchange-cleared instruments			$	26,920					—						—						26,920			(25,423)			(1,497)			—			—
Physical forward contracts			—						602						2						604			(3)			—			—			601
Floating-rate debt			—						7,916						—						7,916			N/A			N/A			—			7,916
Fixed-rate debt, excluding finance leases and software obligations			—						18,046						—						18,046			N/A			N/A			800			18,846
			$	26,920					26,564						2						53,486			(25,426)			(1,497)			800			27,363

			Millions of Dollars
			December 31, 2025
			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			$	2,731					—						—						2,731			(2,660)			—			—			71
Physical forward contracts			—						69						4						73			(10)			—			—			63
Rabbi trust assets			144						—						—						144			N/A			N/A			—			144
Investment in NOVONIX			26						—						—						26			N/A			N/A			—			26
			$	2,901					69						4						2,974			(2,670)			—			—			304
Commodity Derivative Liabilities
Exchange-cleared instruments			$	2,680					—						—						2,680			(2,660)			(20)			—			—
Physical forward contracts			—						30						1						31			(10)			—			—			21
Floating-rate debt			—						400						—						400			N/A			N/A			—			400
Fixed-rate debt, excluding finance leases and software obligations			—						18,324						—						18,324			N/A			N/A			621			18,945
			$	2,680					18,754						1						21,435			(2,670)			(20)			621			19,366

The rabbi trust assets and investment in NOVONIX are recorded within the “Investments and long-term receivables” line item, and floating-rate and fixed-rate debt are recorded within the “Short-term debt” and “Long-term debt” line items on our consolidated balance sheet. See Note 13—Derivatives and Financial Instruments, for information regarding where the assets and liabilities related to our commodity derivatives are recorded on our consolidated balance sheet.

Nonrecurring Fair Value Measurements

WRB Acquisition

On October 1, 2025, we acquired and began consolidating the financial results of WRB and, accordingly, accounted for the business combination using the acquisition method of accounting, which requires WRB’s assets and liabilities to be recorded at fair value as of the acquisition date on our consolidated balance sheet.

The preliminary fair value of PP&E was $2,771 million and was determined primarily using the cost approach. The cost approach used assumptions for the current replacement cost of similar plant and equipment assets adjusted for estimated physical deterioration, functional obsolescence and economic obsolescence. The preliminary fair value of inventories was $1,200 million and was determined using a market approach. The fair value of the previously held equity interest in WRB was determined using a market approach. These valuations resulted in Level 3 nonrecurring fair value measurements. See Note 2—Business Combinations for additional information on the transaction.

Coastal Bend Acquisition

On April 1, 2025, we acquired and began consolidating the financial results of Coastal Bend and, accordingly, accounted for the business combination using the acquisition method of accounting, which requires Coastal Bend’s assets and liabilities to be recorded at fair value as of the acquisition date on our consolidated balance sheet.

The fair value of PP&E was $2,224 million. The fair value of these assets was determined primarily using the cost approach. The cost approach used assumptions for the current replacement cost of similar plant and equipment assets adjusted for estimated physical deterioration, functional obsolescence and economic obsolescence. This valuation resulted in Level 3 nonrecurring fair value measurements. See Note 2—Business Combinations for additional information on the transaction.

Note 15—Pension and Postretirement Plans

The components of net periodic benefit cost for the three months ended March 31, 2026 and 2025, were as follows:

			Millions of Dollars
			Pension Benefits																								Other Benefits
			2026												2025												2026						2025
			U.S.						Int’l.						U.S.						Int’l.
Components of Net Periodic Benefit Cost
Three Months Ended March 31
Service cost			$	34					2						31						3						—						—
Interest cost			32						9						32						8						2						2
Expected return on plan assets			(41)						(12)						(38)						(11)						—						—
Amortization of net actuarial loss (gain)			3						—						4						—						(1)						(1)
Settlements			2						—						2						—						—						—
Net periodic benefit cost*			$	30					(1)						31						—						1						1
** Included within the “Operating expenses” and “Selling, general and administrative expenses” line items on our consolidated statement of income.*

During the three months ended March 31, 2026, we contributed $10 million to our U.S. pension and other postretirement benefit plan. We currently expect to make additional contributions of approximately $190 million to our U.S. pension and other postretirement benefit plans and approximately $4 million to our international pension plans during the remainder of 2026. Cash contributions are included within the “Other” line item of the “Cash Flows From Operating Activities” section of our consolidated statement of cash flows.

Note 16—Accumulated Other Comprehensive Loss

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, 2025			$	(113)					(49)						(5)						(167)
Other comprehensive income (loss) before reclassifications			2						(69)						—						(67)
Amounts reclassified from accumulated other comprehensive loss
Defined benefit plans*
Amortization of net actuarial loss and settlements			3						—						—						3
Foreign currency translation			—						—						—						—
Hedging			—						—						—						—
Net current period other comprehensive income (loss)			5						(69)						—						(64)
March 31, 2026			$	(108)					(118)						(5)						(231)
December 31, 2024			$	(140)					(262)						(5)						(407)
Other comprehensive income before reclassifications			2						100						—						102
Amounts reclassified from accumulated other comprehensive loss
Defined benefit plans*
Amortization of net actuarial loss and settlements			4						—						—						4
Foreign currency translation**			—						(12)						—						(12)
Hedging			—						—						—						—
Net current period other comprehensive income			6						88						—						94
March 31, 2025			$	(134)					(174)						(5)						(313)
** Included within the computation of net periodic benefit cost. See Note 15—Pension and Postretirement Plans, for additional information.*
*** Included within the gain on sale of Coop, recognized in the “Net gain on dispositions” line item on our consolidated statement of income. See Note 6—Investments, Loans and Long-Term Receivables, for additional information.*

Note 17—Cash Flow Information

			Millions of Dollars
			Three Months Ended March 31
			2026						2025
Non-cash financing activities
Reduction in borrowings under Receivables Securitization Facility			$	264					—

See Note 9—Debt, for additional information regarding the above non-cash activity.

Note 18—Related Party Transactions

Significant transactions with related parties were:

			Millions of Dollars
			Three Months Ended March 31
			2026						2025
Operating revenues and other income (a)(d)			$	1,521					1,036
Purchases (b)(d)			563						4,010
Operating expenses and selling, general and administrative expenses (c)			71						74

(a)We sold NGL, other petrochemical feedstocks and solvents to Chevron Phillips Chemical Company LLC (CPChem), 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, CF United LLC (CF United), and JET Management Holding. JET Management Holding is a newly formed entity, established in December 2025, in which we hold a 35% non-operating equity interest. 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 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 WRB acquisition, we began consolidating WRB’s financial results beginning on October 1, 2025. As such, transactions after this date are not presented in the table above. See Note 2—Business Combinations for additional information.

Note 19—Segment Disclosures and Related Information

Our operating segments are:

1)**Midstream—**Provides crude oil and refined petroleum product transportation, terminaling and storage services, as well as natural gas and NGL gathering, processing, transportation, fractionation, storage 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 10 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. Effective in the first quarter of 2026, activities associated with the decommissioning and redevelopment of our idled Los Angeles Refinery site are included in Corporate and Other.

Intersegment sales are at prices that we believe approximate market.

Our chief operating decision maker (CODM), 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 significant expenses regularly provided to our CODM are provided below. The measure of segment assets reported on our consolidated balance sheet reviewed by our CODM is “Total Assets.”

Analysis of Results by Operating Segment

			Millions of Dollars
			Three Months Ended March 31, 2026
			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			$	4,718					7,772			19,544			496			10			—			32,540
Intercompany revenues			806			—			14,762			656			1,051			2			(17,277)			—
Total sales and other operating revenues			5,524			—			22,534			20,200			1,547			12			(17,277)			32,540
Equity in earnings of affiliates			103			114			—			35			—			—			—			252
Net gain on dispositions			6			—			—			—			—			—			—			6
Other income			19			—			26			62			74			25			(2)			204
Total Revenues and Other Income			5,652			114			22,560			20,297			1,621			37			(17,279)			33,002
Costs and Expenses
Purchased crude oil and products			4,109			—			20,733			20,118			1,498			1			(17,243)			29,216
Operating expenses*			541			2			1,229			19			89			37			(36)			1,881
Selling, general and administrative expenses*			56			(2)			52			297			21			113			—			537
Depreciation and amortization			274			—			215			20			23			26			—			558
Impairments			4			—			2			—			2			—			—			8
Taxes other than income taxes			75			—			106			2			31			20			—			234
Interest and debt expense			—			—			—			—			—			286			—			286
Other segment items**			2			—			15			2			(2)			5			—			22
Total Costs and Expenses			5,061			—			22,352			20,458			1,662			488			(17,279)			32,742
Income (loss) before income taxes			$	591		114			208			(161)			(41)			(451)			—			260
** 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 statement of income: “Accretion on discounted liabilities” and “Foreign currency transaction (gains) losses.”*

			Millions of Dollars
			Three Months Ended March 31, 2025
			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			$	4,827		—			5,702			19,163			728			10			—			30,430
Intercompany revenues			631			—			10,173			478			781			2			(12,065)			—
Total sales and other operating revenues			5,458			—			15,875			19,641			1,509			12			(12,065)			30,430
Equity in earnings (losses) of affiliates			110			113			(105)			36			(1)			—			—			153
Net gain on dispositions			69			—			—			1,018			—			—			—			1,087
Other income			10			—			3			6			19			18			—			56
Total Revenues and Other Income			5,647			113			15,773			20,701			1,527			30			(12,065)			31,726
Costs and Expenses
Purchased crude oil and products			4,089			—			15,025			19,045			1,536			—			(12,035)			27,660
Operating expenses*			458			2			1,074			18			96			4			(30)			1,622
Selling, general and administrative expenses*			53			(2)			46			328			18			76			—			519
Depreciation and amortization			233			—			456			20			23			59			—			791
Impairments			—			—			1			—			—			25			—			26
Taxes other than income taxes			61			—			110			9			35			18			—			233
Interest and debt expense			—			—			—			—			—			221			—			221
Other segment items**			2			—			(2)			(1)			4			3			—			6
Total Costs and Expenses			4,896			—			16,710			19,419			1,712			406			(12,065)			31,078
Income (loss) before income taxes			$	751		113			(937)			1,282			(185)			(376)			—			648
** 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 statement of income: “Accretion on discounted liabilities” and “Foreign currency transaction (gains) losses.”*

Other Segment Disclosures

			Millions of Dollars
			Operating Segments
			Midstream			Chemicals			Refining			M&S			Renewable Fuels			Corporate and Other			Total Consolidated
Three Months Ended March 31, 2026
Interest Income			$	—		—			—			—			—			31			31
Capital Expenditures and Investments			343			—			210			9			10			10			582
Three Months Ended March 31, 2025
Interest Income			$	—		—			—			—			—			34			34
Capital Expenditures and Investments			216			—			176			15			9			7			423

			Millions of Dollars
			Operating Segments
			Midstream			Chemicals			Refining			M&S			Renewable Fuels			Corporate and Other			Total Consolidated
As of March 31, 2026
Investments In and Advances to Affiliates			$	2,097		8,018			70			1,293			15			3			11,496
Total Assets			30,348			8,018			22,632			12,637			3,182			7,267			84,084
As of December 31, 2025
Investments In and Advances to Affiliates			$	2,117		7,899			65			1,330			15			2			11,428
Total Assets			30,172			7,899			19,435			10,059			3,197			2,918			73,680

Note 20—Income Taxes

Our effective income tax rate for the three months ended March 31, 2026, was 16%, compared to 19% for the corresponding period of 2025. The decrease in our effective rate for the three months ended March 31, 2026, was primarily attributable to the impact of tax benefits from the vesting of share-based compensation awards and state income taxes on lower income before income taxes.

The effective tax rate for the three months ended March 31, 2026, varied from the U.S. federal statutory income tax rate primarily due to tax benefits from the vesting of share-based compensation awards and state income taxes.

Note 21—DCP Midstream Class A Segment

DCP Midstream Class A Segment is comprised of the businesses, activities, assets and liabilities of DCP LP, its subsidiaries and its general partner entities. DCP LP is a master limited partnership whose operations include producing and fractionating NGL; gathering, compressing, treating and processing natural gas; recovering condensate; and transporting, trading, marketing and storing natural gas and NGL. DCP Midstream Class A Segment is a consolidated VIE as we are the primary beneficiary.

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
			March 31 2026						December 31 2025
Accounts receivable			$	390					530
Investments and long-term receivables			696						705
Net properties, plants and equipment			9,363						9,211
Accounts payable			697						785
Long-term debt			2,904						2,903