Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

Selling, General, and Administrative Expenses (SG&A) [USD, Millions]

Research and Development (R&D) [USD, Millions]

Depreciation and Amortization (D&A) [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

Earnings Per Share (EPS) - Basic [USD, Units]

Earnings Per Share (EPS) - Diluted [USD, Units]

73f006ac3d608aed4c401f44fee5752e4d2aa5996f6c9ecc9586fc970f8cd4b1

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

137ab30a0055156337a7be9ab60ceb8e2dad4caa262f03df0c5bf52477a1ec85

| Segment / Quarter | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|-------------------|---------|---------|---------|---------|---------|---------|---------|
| **Midstream** (Million USD) | **4,597**  **[0001534701-23-000080_psx-20230331.htm:28]**  | **3,448**  **[0001534701-23-000123_psx-20230630.htm:29]**  | **3,936**  **[0001534701-23-000148_psx-20230930.htm:32]**  | N/A | **4,124**  **[0001534701-24-000104_psx-20240331.htm:24]**  | **3,626**  **[0001534701-24-000132_psx-20240630.htm:26]**  | **3,799**  **[0001534701-24-000166_psx-20240930.htm:32]**  |
| **Refining** (Million USD) | **8,246**  **[0001534701-23-000080_psx-20230331.htm:28]**  | **8,556**  **[0001534701-23-000123_psx-20230630.htm:29]**  | **9,187**  **[0001534701-23-000148_psx-20230930.htm:32]**  | N/A | **9,129**  **[0001534701-24-000104_psx-20240331.htm:24]**  | **9,200**  **[0001534701-24-000132_psx-20240630.htm:26]**  | **8,792**  **[0001534701-24-000166_psx-20240930.htm:32]**  |
| **Marketing and Specialties** (Million USD) | **21,544**  **[0001534701-23-000080_psx-20230331.htm:28]**  | **23,076**  **[0001534701-23-000123_psx-20230630.htm:29]**  | **26,512**  **[0001534701-23-000148_psx-20230930.htm:32]**  | N/A | **22,548**  **[0001534701-24-000104_psx-20240331.htm:24]**  | **24,945**  **[0001534701-24-000132_psx-20240630.htm:26]**  | **22,379**  **[0001534701-24-000166_psx-20240930.htm:32]**  |
| **Renewable Fuels** (Million USD) | N/A | N/A | N/A | N/A | N/A | **350**  **[0001534701-24-000132_psx-20240630.htm:26]**  | **548**  **[0001534701-24-000166_psx-20240930.htm:32]**  |
| **Corporate and Other** (Million USD) | **9**  **[0001534701-23-000080_psx-20230331.htm:28]**  | **10**  **[0001534701-23-000123_psx-20230630.htm:29]**  | N/A | N/A | N/A | N/A | **10**  **[0001534701-24-000166_psx-20240930.htm:32]**  |

d47e51167a9339c5f18692233fc763de728b7aa862189c65062f93a0d60c6b41

| Metric | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|--------|---------|---------|---------|---------|---------|---------|---------|---------|
| Realized Refining Margin (Dollars per Barrel) | $19.73 | $20.72 **[0001534701-24-000132_psx-20240630.htm:54]** | $15.32 | $18.96 **[0001534701-24-000166_psx-20240930.htm:65]** | $14.41 | $10.91 | $10.01 | $8.31 |
| Total Processed Inputs (Thousands of Barrels) | 154,178 | 145,241 | 153,663 | 156,300 [0_2_3] | 156,720 | 144,730 [0_1_2] | 151,296 | 145,440 |
| Adjusted Total Processed Inputs (Thousands of Barrels) | 175,033 | 163,552 **[0001534701-24-000132_psx-20240630.htm:54]** | 173,134 [0_2_3] | 178,929 | 173,786 | 166,984 | 174,107 | 168,951 |
| Composite 3:2:1 Market Crack Spread (Dollars per Barrel) | $23.50 | $22.39 | $28.65 | $36.06 | $18.18 | $19.45 | $18.96 **[0001534701-24-000166_psx-20240930.htm:65]** | $16.50 |
| Open Position Long / (Short) for Crude Oil, Refined Petroleum Products, NGL, and Renewable Feedstocks (Millions of Barrels) | (25) | (37) | (50) | (36) | (22) | (47) | (51) | (54) |
| Open Position Long / (Short) for Natural Gas (Billions of Cubic Feet) | (77) | (37) | (32) | (29) | (25) | (13) | (6) | (7) |
| Realized Marketing Fuel Margin (Dollars per Barrel) - U.S. | $2.05 | $2.30 **[0001534701-24-000166_psx-20240930.htm:65]** | $2.88 | $3.03 | $1.62 | $1.60 **[0001534701-24-000166_psx-20240930.htm:65]** | $1.70 | $2.45 |
| Realized Marketing Fuel Margin (Dollars per Barrel) - International | $9.94 | $6.45 **[0001534701-24-000166_psx-20240930.htm:65]** | $7.28 | $5.27 | $5.00 | $6.92 **[0001534701-24-000166_psx-20240930.htm:65]** | $5.87 | $6.19 |
| Worldwide Refining Crude Oil Capacity Utilization Rate (%) | 91% | 90% **[0001534701-24-000166_psx-20240930.htm:65]** | 93% **[0001534701-24-000166_psx-20240930.htm:65]** | 95% | 92% | 92% | 98% | 94% |
| Transportation Volumes - Pipelines (Thousands of Barrels Daily) | 3,109 | 3,039 **[0001534701-24-000166_psx-20240930.htm:65]** | 3,254 **[0001534701-24-000166_psx-20240930.htm:65]** | 3,039 **[0001534701-24-000166_psx-20240930.htm:65]** | 2,945 | 2,979 **[0001534701-24-000166_psx-20240930.htm:65]** | 3,059 **[0001534701-24-000166_psx-20240930.htm:65]** | 3,006 |
| Transportation Volumes - Terminals (Thousands of Barrels Daily) | 3,039 | 3,203 | 3,149 | 3,167 [0_1_3] | 3,464 | 3,109 | 3,226 | 3,049 |
| NGL Fractionated (Thousands of Barrels Daily) | 686 | 660 **[0001534701-24-000166_psx-20240930.htm:65]** | 738 **[0001534701-24-000166_psx-20240930.htm:65]** | 703 **[0001534701-24-000166_psx-20240930.htm:65]** | 743 | 679 | 744 **[0001534701-24-000166_psx-20240930.htm:65]** | 728 |
| NGL Production (Thousands of Barrels Daily) | 420 | 421 | 444 | 432 **[0001534701-24-000166_psx-20240930.htm:65]** | 452 | 417 | 437 | 439 |
| CPChem Externally Marketed Sales Volumes (Million Pounds) | N/A | 5,706 | 5,892 | 6,241 | N/A | 5,918 | 6,195 | 6,264 |
| Olefins and Polyolefins Capacity Utilization (%) | 83% **[0001534701-24-000166_psx-20240930.htm:65]** | 94% **[0001534701-24-000166_psx-20240930.htm:65]** | 98% **[0001534701-24-000166_psx-20240930.htm:65]** | 99% **[0001534701-24-000166_psx-20240930.htm:65]** | 94% **[0001534701-24-000166_psx-20240930.htm:65]** | 96% [0_1_2] | 98% **[0001534701-24-000166_psx-20240930.htm:65]** | 98% |
| Total Renewable Fuels Produced (Thousands of Barrels Daily) | N/A | N/A | N/A | N/A | N/A | 9 | 31 **[0001534701-24-000166_psx-20240930.htm:65]** | 44 **[0001534701-24-000166_psx-20240930.htm:65]** |
| Total Renewable Fuel Sales (Thousands of Barrels Daily) | N/A | N/A | N/A | N/A | N/A | 34 | 45 | 70 |

30d9d4c53a6fadcb9b805eae02693619d8c918507f638784895b0367dadc7665

Phillips 66 is a leading integrated downstream energy company with operations spanning multiple segments, including Midstream, Chemicals, Refining, Marketing and Specialties, and Renewable Fuels **[0001534701-24-000095_psx-20240402.htm:7]** **[0001534701-24-000163_psx-20240930_ex991.htm:3]** **[0001534701-24-000078_psx-20231231.htm:5]**. The company provides transportation, terminaling, and processing services for crude oil and refined petroleum products, as well as natural gas and natural gas liquids (NGL) services **[0001534701-24-000078_psx-20231231.htm:5]** **[0001534701-24-000166_psx-20240930.htm:32]**. Phillips 66 also engages in the manufacturing and marketing of petrochemicals and plastics through a joint venture, and processes crude oil into various petroleum products **[0001534701-24-000078_psx-20231231.htm:5]** **[0001534701-24-000166_psx-20240930.htm:32]**. Additionally, the company markets refined petroleum products and renewable fuels, and produces renewable products at its Rodeo Renewable Energy Complex **[0001534701-24-000166_psx-20240930.htm:32]**.

1. **Refining** - Processes crude oil and other feedstocks into petroleum products such as gasoline, distillates, and aviation fuels, operating 12 refineries in the United States and Europe.
2. **Marketing and Specialties** - Purchases and markets refined petroleum products and renewable fuels, including the manufacturing and marketing of base oils and lubricants.
3. **Midstream** - Provides transportation, terminaling, and processing services for crude oil and refined petroleum products, as well as natural gas and NGL services.
4. **Renewable Fuels** - Processes renewable feedstocks into renewable products at the Rodeo Renewable Energy Complex.
5. **Chemicals** - Involves a 50% equity investment in Chevron Phillips Chemical Company LLC, which manufactures and markets petrochemicals and plastics globally.

f38b0b5c724501a739769dd5d7ce2d48b3fc0199ad4e2723d8c09273aef465bc

4e70df06bf2d3c2a79ec098825ca8d6170337cfc1d17902ae19a51ba4e7768f7

| Geographical Segment | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|----------------------|---------|---------|---------|---------|---------|---------|---------|
| United States (USD million) | **27,065**  **[0001534701-23-000080_psx-20230331.htm:10]**  | N/A | N/A | N/A | **28,377**  **[0001534701-24-000104_psx-20240331.htm:6]**  | **30,464**  **[0001534701-24-000132_psx-20240630.htm:7]**  | **27,976**  **[0001534701-24-000166_psx-20240930.htm:8]**  |
| United Kingdom (USD million) | **3,930**  **[0001534701-23-000080_psx-20230331.htm:10]**  | N/A | N/A | N/A | **3,890**  **[0001534701-24-000104_psx-20240331.htm:6]**  | **3,207**  **[0001534701-24-000132_psx-20240630.htm:7]**  | **2,883**  **[0001534701-24-000166_psx-20240930.htm:8]**  |
| Germany (USD million) | **1,306**  **[0001534701-23-000080_psx-20230331.htm:10]**  | N/A | N/A | N/A | **1,303**  **[0001534701-24-000104_psx-20240331.htm:6]**  | **1,370**  **[0001534701-24-000132_psx-20240630.htm:7]**  | **1,344**  **[0001534701-24-000166_psx-20240930.htm:8]**  |
| Other Countries (USD million) | **2,095**  **[0001534701-23-000080_psx-20230331.htm:10]**  | N/A | N/A | N/A | **2,241**  **[0001534701-24-000104_psx-20240331.htm:6]**  | **3,088**  **[0001534701-24-000132_psx-20240630.htm:7]**  | **3,325**  **[0001534701-24-000166_psx-20240930.htm:8]**  |

aafd4626d458afbffc7e134830b825758f90b59855eadf9d216626ad89b66d96

1. With Chemicals expected to remain below mid-cycle and uncertainties around the Renewable Fuels segment, how confident are you that Refining will contribute sufficiently to reach your $14 billion mid-cycle EBITDA target by 2025?
2. You mentioned structural cost reductions in Refining, but with utilization rates historically unsustainable at current levels, how will you maintain these cost savings per barrel if utilization decreases?
3. Given that 2/3 of TMX pipeline volumes are going to Asia and increased Canadian production may not fully materialize, how does this impact your strategy for sourcing advantaged crude for your West Coast refineries?
4. With the industry running at high utilization rates and new capacity additions, what is your plan to mitigate the risks of overcapacity and margin compression in the refining sector over the medium term?
5. Considering low margins and regulatory uncertainties in the Renewable Diesel market, what measures are you taking to ensure the Rodeo Renewable Energy Complex achieves profitability and meets expected returns?

88681a20ea26ea4df50d3262d375ea0eff99f9d866a7d71f61bb2646ee7458b2

Realized Refining Margin (Dollars per Barrel)

Composite 3:2:1 Market Crack Spread (Dollars per Barrel)

Open Position Long / (Short) for Crude Oil, Refined Petroleum Products, NGL, and Renewable Feedstocks (Millions of Barrels)

Open Position Long / (Short) for Natural Gas (Billions of Cubic Feet)

Realized Marketing Fuel Margin (Dollars per Barrel) - U.S.

Realized Marketing Fuel Margin (Dollars per Barrel) - International

Worldwide Refining Crude Oil Capacity Utilization Rate (%)

Transportation Volumes - Pipelines (Thousands of Barrels Daily)

Transportation Volumes - Terminals (Thousands of Barrels Daily)

NGL Fractionated (Thousands of Barrels Daily)

NGL Production (Thousands of Barrels Daily)

CPChem Externally Marketed Sales Volumes (Million Pounds)

Olefins and Polyolefins Capacity Utilization (%)

c5fb5adb35edd807f7f3f5f376880c85625e21ebf9605ed305aff49683e4cc82

United States

United Kingdom

Germany

Other countries

Other foreign countries

Total Revenue

0d9e274a1868ce871ae990a6f2cca00d9c5532c06f47f40d251522f471ef57f2

c54e632d1da058891151d241a9ce878aa79ddc9cebe6a6d1cd6508d43c0f155f

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: Q3 2024 and FY 2024
- **Guidance**:
  - **Chemicals**: Global O&P utilization rate expected in the mid-90s for Q3 2024  **[PSX_3395030_2]** .
  - **Refining**:
    - Worldwide crude utilization rate expected in the low 90s for Q3 2024  **[PSX_3395030_2]** .
    - Turnaround expense for Q3 2024 anticipated between **$140 million and $160 million**  **[PSX_3395030_2]** .
    - Full-year Refining turnaround expense expected between **$500 million and $530 million**  **[PSX_3395030_2]** .
  - **Corporate and Other Costs**: Expected between **$330 million and $350 million** for Q3 2024  **[PSX_3395030_2]** .
  - **Midstream**: On track to achieve **$3.6 billion** EBITDA guidance, with expectations to stabilize around **$675 million** a quarter of IBT  **[PSX_3395030_14]** .
  - **Marketing and Specialties**: Seasonality in Q3 is usually good, and the renewables segment value is about **$30 million to $50 million** per quarter  **[PSX_3395030_23]** .
  - **Refining Utilization**: Guidance for Q3 2024 is lower than Q2 2024 due to market softening and discretionary maintenance  **[PSX_3395030_10]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: Q2 2024
- **Guidance**:
  - **Chemicals Segment**: Global O&P utilization rate expected in the mid-90s%  **[PSX_3381147_3]** .
  - **Refining Segment**: Worldwide crude utilization rate expected in the mid-90s%  **[PSX_3381147_3]** .
  - **Turnaround Expense**: Expected between **$100 million and $120 million**, excluding Rodeo  **[PSX_3381147_3]** .
  - **Corporate and Other Costs**: Anticipated between **$330 million and $350 million**  **[PSX_3381147_3]** .
  - **Midstream Segment**: Guidance towards **$675 million per quarter** in income before taxes, maintaining a target of **$3.6 billion** for the year  **[PSX_3381147_10]** .
  - **Cost Reductions**: On track to achieve **$1 billion** of cost reductions in 2024  **[PSX_3381147_2]** .
  - **Market Capture**: Aiming to increase market capture by **5%** from a mid-cycle basis  **[PSX_3381147_19]** .
  - **Rodeo Renewable Energy Complex**: Expected to reach full production rates of approximately **50,000 barrels per day** by the end of Q2 2024  **[PSX_3381147_2]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: Q1 2024 and FY 2024
- **Guidance**:
  - **Mid-Cycle Adjusted EBITDA**: Path to increase by **40% to $14 billion by 2025**  **[PSX_3371368_1]** .
  - **Chemicals Utilization**: Global O&P utilization rate expected in the **mid-90s** for Q1 2024  **[PSX_3371368_4]** .
  - **Refining Utilization**: Worldwide crude utilization rate expected in the **low 90s** for Q1 2024  **[PSX_3371368_4]** .
  - **Turnaround Expense**: Expected between **$110 million and $130 million** for Q1 2024  **[PSX_3371368_4]** .
  - **Rodeo Renewed Project**: Anticipate **$100 million** of decommissioning and start-up costs in Q1 2024  **[PSX_3371368_4]** .
  - **Corporate and Other Costs**: Expected between **$290 million and $310 million** for Q1 2024  **[PSX_3371368_4]** .
  - **Deferred Tax Benefit**: Anticipate about a **$200 million** benefit for FY 2024  **[PSX_3371368_18]** .

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: N/A
- **Guidance**: The documents do not contain information from the Q3 2024 earnings call for Phillips 66 (PSX). Therefore, I cannot provide the guidance they may have given during that specific call.

9963fdd2bd8128a01efec88111b5a01fb8b15c06e55d2816fbfddf329c80b08c

| Name                        | Position                                                        | Start Date       | Short Bio                                                                                                                                                                                                 |
|-----------------------------|-----------------------------------------------------------------|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Mark E. Lashier             | President and Chief Executive Officer                           | July 2022        | Mark E. Lashier has been the President and CEO of Phillips 66 since July 2022. He previously served as President and COO of Phillips 66 and CEO of Chevron Phillips Chemical Company LLC  **[0001534701-24-000095_psx-20240402.htm:19]** **[0001534701-24-000078_psx-20231231.htm:53]** **[0001534701-23-000064_psx-20230329.htm:28]** .                                          |
| Kevin J. Mitchell           | Executive Vice President and Chief Financial Officer            | January 2016     | Kevin J. Mitchell has been the EVP and CFO at Phillips 66 since January 2016. He was previously Vice President, Investor Relations  **[0001534701-24-000078_psx-20231231.htm:53]** .                                                                                                        |
| Zhanna Golodryga            | Executive Vice President, Emerging Energy and Sustainability    | October 2022     | Zhanna Golodryga has been the EVP of Emerging Energy and Sustainability since October 2022. She was previously SVP, Chief Digital and Administrative Officer  **[0001534701-24-000078_psx-20231231.htm:53]** **[0001534701-23-000053_psx-20221231.htm:50]** .                                                                            |
| Richard G. Harbison         | Executive Vice President of Refining                            | June 2022        | Richard G. Harbison has been the EVP of Refining since June 2022. He previously held roles such as Vice President of the San Francisco Refinery and Manager of the Lake Charles Manufacturing Complex  **[0001534701-24-000078_psx-20231231.htm:53]** .                                      |
| Brian M. Mandell            | Executive Vice President, Marketing and Commercial              | March 2019       | Brian M. Mandell has been the EVP of Marketing and Commercial since March 2019. He previously served as SVP, Marketing and Commercial, and President, Global Marketing  **[0001534701-24-000078_psx-20231231.htm:53]** **[0001534701-23-000053_psx-20221231.htm:50]** .                                                                 |
| Timothy D. Roberts          | Executive Vice President, Midstream and Chemicals               | August 2018      | Timothy D. Roberts has been the EVP of Midstream and Chemicals since August 2018. He previously served as EVP, Marketing and Commercial, and EVP, Strategy and Business Development  **[0001534701-24-000078_psx-20231231.htm:53]** .                                                       |
| Vanessa L. Allen Sutherland | Executive Vice President, Government Affairs, General Counsel   | January 2022     | Vanessa L. Allen Sutherland has been the EVP, Government Affairs, General Counsel and Corporate Secretary since January 2022. She was previously EVP and Chief Legal Officer of Norfolk Southern Corporation  **[0001534701-24-000078_psx-20231231.htm:53]** **[0001534701-23-000053_psx-20221231.htm:50]** .                           |
| J. Scott Pruitt             | Vice President and Controller                                   | August 2021      | J. Scott Pruitt has been the VP and Controller since August 2021. He previously served as General Auditor and Assistant Controller  **[0001534701-24-000078_psx-20231231.htm:54]** **[0001534701-24-000078_psx-20231231.htm:53]** .                                                                                                       |
| Ann M. Kluppel              | Vice President and Controller (Chief Accounting Officer)        | May 2024         | Ann M. Kluppel serves as the VP and Controller (Chief Accounting and Duly Authorized Officer) at Phillips 66. She signed the company's reports as of October 29, 2024  **[0001534701-24-000166_psx-20240930.htm:80]** **[0001534701-24-000111_xslF345X02/wk-form3_1715897134.xml:0]** .                                                                   |
| Don A. Baldridge            | Executive Vice President, Midstream and Chemicals               | N/A              | Don A. Baldridge is the EVP of Midstream and Chemicals. He was introduced in this role during the second quarter earnings call and previously served as the interim CEO of DCP  **[PSX_3395030_1]** . The specific start date is not provided in the documents. |

9e8ce23b535052454310ea2dd623fd9374c3fbadfae91dccf05bccfcd0dae2f2

| Program Details            | Program 1       |
|----------------------------|-----------------|
| Approval Date              | **2012**  **[0001534701-24-000166_psx-20240930.htm:78]** **[0001534701-24-000166_psx-20240930.htm:57]**  |
| End Date/Duration          | No expiration  **[0001534701-24-000166_psx-20240930.htm:78]** **[0001534701-24-000166_psx-20240930.htm:57]**  |
| Total additional amount    | **$25 billion**  **[0001534701-24-000166_psx-20240930.htm:78]** **[0001534701-24-000166_psx-20240930.htm:57]**  |
| Remaining authorization amount | **$4.1 billion**  **[0001534701-24-000166_psx-20240930.htm:78]** **[0001534701-24-000166_psx-20240930.htm:57]**  |
| Details                    | The program is part of Phillips 66's capital allocation strategy to improve shareholder return. It resumed in Q2 2022 after a suspension in March 2020 due to COVID-19. The repurchases are discretionary and depend on factors like share price and financial condition.  **[PSX_305951_5]** **[0001534701-23-000053_psx-20221231.htm:76]** **[0001534701-24-000078_psx-20231231.htm:79]** **[0001534701-23-000053_psx-20221231.htm:53]** **[0001534701-22-000185_psx-20220930.htm:57]** **[0001534701-24-000078_psx-20231231.htm:56]**  |

093593c7f3fdc903d3ffb28d8ff1eae325d95d57710cf50e77c41c37dd476ef5

**Quarterly guidance for Q4 2024:**
- **Worldwide crude utilization rate**: low to mid-90%  **[PSX_3404397_2]**  (raised from low 90s  **[PSX_3395030_2]** )  
- **Turnaround expense**: $125 million to $135 million  **[PSX_3404397_2]**  (lowered from $140 million to $160 million  **[PSX_3395030_2]** )  
- **Additional depreciation**: ~$230 million per quarter  **[PSX_3404397_2]**  (no prior guidance)  
- **Global O&P utilization rate**: mid-90%  **[PSX_3404397_2]**  (no change from prior guidance  **[PSX_3395030_2]** )  
- **Corporate and Other Costs**: $300 million to $330 million  **[PSX_3404397_2]**  (lowered from $330 million to $350 million  **[PSX_3395030_2]** )

**Annual guidance for FY 2024:**
- **Sustaining capital**: ~$1 billion per year  **[PSX_3404397_4]**  (no prior guidance)  
- **Dividend**: ~$2 billion per year  **[PSX_3404397_4]**  (no prior guidance)  
- **Returning 50% or more of operating cash flow**:  **[PSX_3404397_7]**  (no prior guidance)  
- **Proceeds from asset sales**: expected to exceed $3 billion  **[PSX_3404397_1]** **[PSX_3404397_16]**  (no prior guidance)  
- **Refining turnaround expense**: $485 million to $495 million  **[PSX_3404397_2]**  (lowered from $500 million to $530 million  **[PSX_3395030_2]** )  
- **Refining margin capture improvement target**: 5% by 2025 (~$400 million of earnings at mid-cycle pricing)  **[PSX_3404397_15]**  (no prior guidance)  
- **Net debt to capital target**: 25% to 30%  **[PSX_3404397_16]**  (no prior guidance)  
- **Absolute net debt target**: below $18 billion  **[PSX_3404397_16]**  (no prior guidance)  
- **Rodeo Renewable Energy Complex production**: 44,000 barrels per day during Q3 2024  **[PSX_3404397_2]**  (no prior guidance)

46e7942655c41e848cef7fc8deea85dee43f582885e0f77f680a9bd1059a2fce

1053ec2d4775c20d7eea47b214ae81ec93647f037cb263b0bf7e667140819cb8

- Total Revenue: $33,986 million (-12% YoY)  **[0001534701-24-000078_psx-20231231.htm:113]** **[0001534701-25-000035_psx-20241231_erxsuppinfoxe.htm:1]**   
- Cost of Goods Sold: $30,754 million (-9% YoY)  **[0001534701-24-000078_psx-20231231.htm:113]** **[0001534701-25-000035_psx-20241231_erxsuppinfoxe.htm:1]**   
- SG&A: $511 million (-22% YoY)  **[0001534701-24-000078_psx-20231231.htm:113]** **[0001534701-25-000035_psx-20241231_erxsuppinfoxe.htm:1]**   
- Depreciation & Amortization: **$819 million (+58% YoY)**  **[0001534701-24-000078_psx-20231231.htm:113]** **[0001534701-25-000035_psx-20241231_erxsuppinfoxe.htm:1]**   
- Net Income: **$25 million (-98% YoY)**  **[0001534701-24-000078_psx-20231231.htm:113]** **[0001534701-25-000035_psx-20241231_erxsuppinfoxe.htm:1]**   
- Diluted EPS: **$0.01 (-99% YoY)**  **[0001534701-24-000078_psx-20231231.htm:113]** **[0001534701-25-000035_psx-20241231_erxsuppinfoxe.htm:1]**   

50317e452302d43114720a8aa635ed465eaf7444f17c6ad82da219a3c2c5636e

| Name               | Start Date | End Date | Reason for Change |
|--------------------|------------|----------|-------------------|
| Ernst & Young LLP | 2011  **[0001534701-24-000078_psx-20231231.htm:106]**  | Present  | Current auditor   |

b93e5c37a84df652458d7b6a7c51085beb77ee53b10c36f3ec33073ad5d3188b

b0070edcbb24acc0f415534cd0cd0646209a7f1faba3336775e2451351ea16e1

- **Total Revenue**: $36.163 billion (-10% YoY)  **[0001534701-24-000166_psx-20240930.htm:1]** **[0001534701-23-000148_psx-20230930.htm:1]**   
- Marketing & Specialties: $22.379 billion (-16% YoY)  **[0001534701-24-000166_psx-20240930.htm:32]** **[0001534701-23-000148_psx-20230930.htm:32]**   
- United States: $27.976 billion (-14% YoY)  **[0001534701-24-000166_psx-20240930.htm:8]** **[0001534701-23-000148_psx-20230930.htm:11]**   
- Other Countries: $3.325 billion (+67% YoY)  **[0001534701-24-000166_psx-20240930.htm:8]** **[0001534701-23-000148_psx-20230930.htm:11]**   
- Net Income: $346 million (-82% YoY)  **[0001534701-24-000166_psx-20240930.htm:1]** **[0001534701-23-000148_psx-20230930.htm:1]**   
- Earnings Per Share (Diluted): $0.84 (-82% YoY)  **[0001534701-24-000166_psx-20240930.htm:14]** **[0001534701-23-000148_psx-20230930.htm:1]**   

44cad9b41af6bb61f5375d044cd43ea585aeaa445d15da1af72f2821dd3f6878

c4aa00805bad2e006c4606396bcf4842d16a3a27d041a999d77124a26992f99b

15e443b33177569b4b4b5182d10734a2cc190194f7e55eb674b24b19868df914

| Year | Amount Due (Billions) | Debt Type                  | Interest Rate (%) | % of Total Debt                                                                 |
|----------|---------------------------|--------------------------------|-----------------------|------------------------------------------------------------------------------------|
| 2024     | 0.200                     | Commercial Paper              | N/A                   | 1.0% = (0.200 / 19.998) * 100 **[0001534701-24-000166_psx-20240930.htm:48]** **[0001534701-24-000166_psx-20240930.htm:18]**                                     |
| 2024     | 0.800                     | 0.900% Senior Notes           | 0.900                 | 4.0% = (0.800 / 19.998) * 100 **[0001534701-24-000166_psx-20240930.htm:48]** **[0001534701-24-000166_psx-20240930.htm:15]**                                     |
| 2026     | 1.300                     | 1.300% Senior Notes           | 1.300                 | 6.5% = (1.300 / 19.998) * 100 **[0001534701-24-000166_psx-20240930.htm:48]** **[0001534701-24-000166_psx-20240930_ex22.htm:0]**                                     |
| 2026     | 3.550                     | 3.550% Senior Notes           | 3.550                 | 17.8% = (3.550 / 19.998) * 100 **[0001534701-24-000166_psx-20240930.htm:48]** **[0001534701-24-000166_psx-20240930_ex22.htm:0]**                                    |
| 2027     | 4.950                     | 4.950% Senior Notes           | 4.950                 | 24.8% = (4.950 / 19.998) * 100 **[0001534701-24-000166_psx-20240930.htm:48]** **[0001534701-24-000166_psx-20240930_ex22.htm:0]**                                    |
| 2028     | 3.900                     | 3.900% Senior Notes           | 3.900                 | 19.5% = (3.900 / 19.998) * 100 **[0001534701-24-000166_psx-20240930.htm:48]** **[0001534701-24-000166_psx-20240930_ex22.htm:0]**                                    |
| 2028     | 3.750                     | 3.750% Senior Notes           | 3.750                 | 18.8% = (3.750 / 19.998) * 100 **[0001534701-24-000166_psx-20240930.htm:48]** **[0001534701-24-000166_psx-20240930_ex22.htm:0]**                                    |
| 2029     | 3.150                     | 3.150% Senior Notes           | 3.150                 | 15.8% = (3.150 / 19.998) * 100 **[0001534701-24-000166_psx-20240930.htm:48]** **[0001534701-24-000166_psx-20240930_ex22.htm:0]**                                    |
| 2030     | 2.150                     | 2.150% Senior Notes           | 2.150                 | 10.8% = (2.150 / 19.998) * 100 **[0001534701-24-000166_psx-20240930.htm:48]** **[0001534701-24-000166_psx-20240930_ex22.htm:0]**                                    |
| 2031     | 5.250                     | 5.250% Senior Notes           | 5.250                 | 26.3% = (5.250 / 19.998) * 100 **[0001534701-24-000166_psx-20240930.htm:48]** **[0001534701-24-000166_psx-20240930_ex22.htm:0]**                                    |
| 2033     | 5.300                     | 5.300% Senior Notes           | 5.300                 | 26.5% = (5.300 / 19.998) * 100 **[0001534701-24-000166_psx-20240930.htm:48]** **[0001534701-24-000166_psx-20240930_ex22.htm:0]**                                    |
| 2034     | 4.650                     | 4.650% Senior Notes           | 4.650                 | 23.3% = (4.650 / 19.998) * 100 **[0001534701-24-000166_psx-20240930.htm:48]** **[0001534701-24-000166_psx-20240930_ex22.htm:0]**                                    |
| 2035     | 4.950                     | 4.950% Senior Notes           | 4.950                 | 24.8% = (4.950 / 19.998) * 100 **[0001534701-24-000166_psx-20240930.htm:48]** **[0001534701-24-000166_psx-20240930_ex22.htm:0]**                                    |
| 2042     | 5.875                     | 5.875% Senior Notes           | 5.875                 | 29.4% = (5.875 / 19.998) * 100 **[0001534701-24-000166_psx-20240930.htm:48]** **[0001534701-24-000166_psx-20240930_ex22.htm:0]**                                    |
| 2044     | 4.875                     | 4.875% Senior Notes           | 4.875                 | 24.4% = (4.875 / 19.998) * 100 **[0001534701-24-000166_psx-20240930.htm:48]** **[0001534701-24-000166_psx-20240930_ex22.htm:0]**                                    |
| 2045     | 4.680                     | 4.680% Senior Notes           | 4.680                 | 23.4% = (4.680 / 19.998) * 100 **[0001534701-24-000166_psx-20240930.htm:48]** **[0001534701-24-000166_psx-20240930_ex22.htm:0]**                                    |
| 2046     | 4.900                     | 4.900% Senior Notes           | 4.900                 | 24.5% = (4.900 / 19.998) * 100 **[0001534701-24-000166_psx-20240930.htm:48]** **[0001534701-24-000166_psx-20240930_ex22.htm:0]**                                    |
| 2052     | 3.300                     | 3.300% Senior Notes           | 3.300                 | 16.5% = (3.300 / 19.998) * 100 **[0001534701-24-000166_psx-20240930.htm:48]** **[0001534701-24-000166_psx-20240930_ex22.htm:0]**                                    |
| 2054     | 5.650                     | 5.650% Senior Notes           | 5.650                 | 28.3% = (5.650 / 19.998) * 100 **[0001534701-24-000166_psx-20240930.htm:48]** **[0001534701-24-000166_psx-20240930_ex22.htm:0]**                                    |
| 2055     | 5.500                     | 5.500% Senior Notes           | 5.500                 | 27.5% = (5.500 / 19.998) * 100 **[0001534701-24-000166_psx-20240930.htm:48]** **[0001534701-24-000166_psx-20240930_ex22.htm:0]**                                    |

a70e914707e4fc4289187e826f3914e4b703ddad48ef840717b2f59704249a5b

1. **EBITDA Mid-Cycle Target**  
   **Q:** What's needed to reach the $14B mid-cycle EBITDA target?  
   **A:** Kevin Mitchell explained that reaching the **$14 billion** 2025 mid-cycle EBITDA target involves several factors. The Chemicals business requires an incremental **$1 billion**, driven by overall market environment, plus **$200 million** from mid-cap projects.  **[PSX_3371368_9]**  The Rodeo project will contribute about **$700 million** mid-cycle impact.  **[PSX_3371368_9]**  Additional contributions come from cost reductions, **$600 million** in commercial contributions, and ongoing Refining projects.  **[PSX_3371368_9]** 

2. **Rodeo Project Start-Up**  
   **Q:** How will Rodeo ramp up to full operation?  
   **A:** Richard Harbison outlined that the Rodeo Renewable Diesel plant will shut down in February to tie in utilities.  **[PSX_3371368_6]**  One hydrocracker will start up in March, quickly ramping to **50%** capacity.  **[PSX_3371368_6]**  The Pretreatment Unit will be completed in April, leading to commissioning in May and full rates by the end of the second quarter.  **[PSX_3371368_6]**  Initially, they'll use easier feedstocks like used vegetable oils and introduce lower carbon intensity feedstocks as the Pretreatment Unit is optimized, expecting full rates and lower CI feedstocks by mid-year.  **[PSX_3371368_17]** 

3. **Midstream Performance & Synergies**  
   **Q:** How is the NGL Midstream business improving?  
   **A:** Mark Lashier and Tim Roberts highlighted that the integration of DCP has been a success, with **$250 million** of synergies captured and line of sight to **$400 million-plus**.  **[PSX_3371368_7]**  Improved volumes, cost reductions, and strong operational and commercial execution led to sequential improvement in the NGL business in the fourth quarter.  **[PSX_3371368_7]** 

4. **Strong Margin Capture Drivers**  
   **Q:** What drove strong margin capture in Q4?  
   **A:** Kevin Mitchell explained that strong margin capture was due to the reversal of prior inventory hedge impacts, resulting in a **$300 million** swing quarter-over-quarter.  **[PSX_3371368_5]**  Improved feedstock differentials, especially in the Central Corridor, and product pricing benefits in the Gulf Coast due to lag effects on barrels going up the Colonial Pipeline contributed to performance.  **[PSX_3371368_5]**  Strong commercial results, capturing pipeline arbitrage, also played a significant role.  **[PSX_3371368_5]**  The "Other" margin capture included approximately **$200 million** benefit from Colonial Pipeline pricing, about **$3.90** per barrel, with the remainder from commercial performance and inventory effects.  **[PSX_3371368_14]** 

5. **Balance Sheet and Leverage**  
   **Q:** When will leverage return to target range?  
   **A:** Kevin Mitchell stated that, due to less working capital tailwind than expected, net debt-to-capital metrics were impacted by **2 to 3 percentage points**.  **[PSX_3371368_11]**  The company expects modest debt reduction in 2024, with **$1.1 billion** of maturities.  **[PSX_3371368_11]**  Working capital swings can significantly affect the metric. While targeting the **25% to 30%** range, capital allocation decisions will consider all priorities, not just the leverage metric.  **[PSX_3371368_11]** 

6. **Turnaround Guidance**  
   **Q:** Is $600M the new average annual turnaround spend?  
   **A:** Richard Harbison confirmed that the **$500 million to $600 million** range is considered an average annual turnaround cycle.  **[PSX_3371368_12]**  The company aims to flatten heavy peak periods in turnaround cycles, concentrating maintenance in the first and fourth quarters and leveling out spend long-term.  **[PSX_3371368_12]** 

7. **Asset Sales Update**  
   **Q:** What's the progress on asset sales?  
   **A:** Mark Lashier indicated that active discussions are underway regarding asset sales, emphasizing that every asset has value and that decisions are based on capturing more value if others own certain assets. Further comments may be provided in the first-quarter earnings call.  **[PSX_3371368_20]** 

8. **Chemical Segment Outlook**  
   **Q:** What's driving recent PE price improvements?  
   **A:** Tim Roberts explained that polyethylene prices remained stable through the fourth quarter, with a **$0.05** increase in January.  **[PSX_3371368_15]**  Strong U.S. demand, destocking, and the U.S. feedstock advantage contributed to momentum.  **[PSX_3371368_15]**  Europe remains soft, and Asia is also soft, but CPChem is running at high rates, demonstrating resilience during the down cycle.  **[PSX_3371368_15]** 

9d8d878b16537c5685ce0c64c50ca5f8b427429e04b0dcc89560ff668360e3a4

- **Phillips 66 increased its shareholder return target to $13 billion to $15 billion by year-end 2024**, up from the original $10 billion to $12 billion, **representing over 50% of operating cash flow**.  **[PSX_3362554_26]** **[PSX_3362554_5]**
- **The company raised its mid-cycle adjusted EBITDA growth target to $4 billion between 2022 and 2025**, driven by enhanced business transformation and additional synergies from the DCP Midstream acquisition.  **[PSX_3362554_5]**
- **Phillips 66 has consistently grown its dividend every year since its spin-off** and is committed to maintaining this trend.  **[PSX_3362554_26]**

69095e7421a965012166b26af334923f60546ef1398985bcd75f6c8cd4dd509a

1. **Renewable Diesel Margin Outlook**  
   **Q:** What is the progress and profitability outlook for the Rodeo Renewable diesel project?  
   **A:** Management reported that the Rodeo Renewable Energy Complex is processing **50,000 barrels per day of renewable feedstocks**, having ramped up ahead of schedule.  **[PSX_3395030_4]**  They are transitioning to lower carbon intensity feedstocks and will begin producing **sustainable aviation fuel in Q3**, with up to **20,000 barrels per day** offered to the market in Q4.  **[PSX_3395030_4]**  While biofuels margins were positive but at the lower end in Q2, they expect margins to improve due to factors like increased renewable jet production reducing renewable diesel supply, potential increases in RIN prices, firmer distillate demand, and falling vegetable oil prices.  **[PSX_3395030_4]**  However, they note that there is still significant regulatory uncertainty for next year.  **[PSX_3395030_4]** 

2. **Cost Reduction Sustainability**  
   **Q:** Are the cost reductions in refining structural and sustainable?  
   **A:** Management views the cost reductions as primarily **structural** and **sustainable**.  **[PSX_3395030_3]**  They've reduced adjusted controllable costs by **$0.83 per barrel** in the first half of the year.  **[PSX_3395030_3]**  Over **1,000 employees** have implemented over **1,000 initiatives**, resulting in over **$600 million** of structural costs removed.  **[PSX_3395030_3]**  Examples include saving **$5 million annually** by adopting best practices in tank turnarounds and reducing fuel usage by **$5.6 million annually** through optimization in hydrogen plant operations.  **[PSX_3395030_3]**  They are committed to a **relentless pursuit of cost efficiencies** for sustained value creation.  **[PSX_3395030_3]** 

3. **Midstream Performance and Guidance**  
   **Q:** How is midstream performing and what is the outlook?  
   **A:** The Midstream segment had a **great quarter**, with strong volumes and improved costs due to synergy capture from the DCP integration.  **[PSX_3395030_5]**  NGL volume performance was strong, and they are confident in hitting their synergy capture targets.  **[PSX_3395030_5]**  They are on track to the **$3.6 billion EBITDA guidance**, expecting to stabilize around **$675 million per quarter**.  **[PSX_3395030_14]**  Some Q2 performance was due to onetime items, and they anticipate some volume impact in Q3 due to Hurricane Beryl.  **[PSX_3395030_5]** 

4. **Asset Sales and Capital Allocation**  
   **Q:** What is the status of asset sales, particularly the European retail business?  
   **A:** Management is in **active discussions** regarding the sale of their European retail marketing assets, with **strong interest** from multiple parties.  **[PSX_3395030_6]**  This sale would be a significant step toward their **$3 billion** asset disposition target.  **[PSX_3395030_6]** 

5. **Leverage Targets and Capital Allocation**  
   **Q:** How will you balance returning capital to shareholders with achieving leverage targets?  
   **A:** They will meet their **$13 billion to $15 billion** cash return target range this year, even though the refining margin environment is weaker.  **[PSX_3395030_7]**  Next year, they are confident in managing both cash returns to shareholders and improving the balance sheet, aided by **EBITDA growth** and expected cash from **asset dispositions**.  **[PSX_3395030_7]** 

6. **M&A Strategy and Future Plans**  
   **Q:** What is the M&A strategy following the Pinnacle acquisition?  
   **A:** The Pinnacle acquisition enhances their wellhead-to-market Midstream backbone and provides opportunities for organic growth.  **[PSX_3395030_8]**  They are looking for assets that, when connected to their system, generate more value.  **[PSX_3395030_8]**  They will continue to seek similar opportunities that are immediately accretive and backed by solid fee-based contracts, particularly in the Permian Basin.  **[PSX_3395030_8]** 

7. **TMX Pipeline Impact**  
   **Q:** How is the TMX pipeline affecting Canadian crude availability and West Coast refining?  
   **A:** The TMX pipeline is running at **650,000 to 675,000 barrels per day**, heading to **700,000 barrels** by year-end.  **[PSX_3395030_9]**  About **two-thirds** of incremental TMX barrels are going to Asia, which was a surprise, and **one-third** to the West Coast.  **[PSX_3395030_9]**  This benefits their Ferndale and especially their L.A. refineries by providing more barrels at advantaged prices.  **[PSX_3395030_9]**  Increased Canadian production may put more pressure on pipelines in the next 2-3 years, potentially widening heavy crude differentials.  **[PSX_3395030_9]** 

8. **Refining Utilization and Macro Outlook**  
   **Q:** What are the refining utilization guidance and macro outlook?  
   **A:** They are guiding down utilization in Q3 due to market softening, particularly on the West and East Coasts.  **[PSX_3395030_10]**  They are taking the opportunity to perform discretionary maintenance to ensure strong operations when market conditions improve.  **[PSX_3395030_10]**  Overall, they believe medium- and long-term refining fundamentals are positive, with U.S. refiners remaining advantaged globally.  **[PSX_3395030_10]** 

9. **Mid-Cycle EBITDA Guidance**  
   **Q:** Are you still confident in achieving mid-cycle EBITDA targets?  
   **A:** Management remains confident in achieving **$14 billion** in EBITDA at mid-cycle conditions by 2025.  **[PSX_3395030_13]**  While some segments like Midstream and Marketing are at or above mid-cycle, others like Chemicals and Renewable Fuels may not reach mid-cycle by then.  **[PSX_3395030_13]**  The Refining segment is executing projects and cost reductions to contribute to this target.  **[PSX_3395030_13]** 

10. **Chemicals Pricing Outlook**  
    **Q:** What is the outlook for polyethylene pricing and demand?  
    **A:** CPChem is operating well and seeing **strengthening demand** in North America and increased exports.  **[PSX_3395030_12]**  Margins are gradually improving as the value chain recovers from previous lows.  **[PSX_3395030_12]**  They expect margins to continue recovering due to stronger global markets and improving inventory positions, particularly domestically.  **[PSX_3395030_12]** 

a36cf30f9a8b2f6e71cb8ad869eb2ee5a75cf3cdb99bd826e92b57153452c260

b7ae9986a4993296cc06e4af9cf352b66d7f6d188f6a433230aba20b0dad726f

- **Oversupply in the California market** due to increased supply after the Rodeo shutdown led to decreased margins, with the margin basis dropping by **$0.80 per gallon**.  **[PSX_3395030_18]**
- **Uncertainty in renewable diesel profitability** caused by increased distillate volumes and reliance on regulatory incentives like RINs and LCFS, which are adjusting to higher production levels, posing risks to achieving mid-cycle targets.  **[PSX_3395030_16]**
- **Expected Midstream volume declines in Q3** due to power outages from **Hurricane Beryl**, impacting connected systems and potentially reducing throughput and earnings.  **[PSX_3395030_5]**

61a7ba9715fae3ff4ffb6fe333f7a8cd91401e7f01b29d3c559f7266fc654163

- **Phillips 66 plans to sell high-performing assets**, but management is not providing specific guidance on which assets will be sold or the impact on EBITDA, creating uncertainty about future earnings capacity.  **[PSX_3362554_5]** **[PSX_3362554_12]** **[PSX_3362554_7]**
- **Refining capture rates came in lower than expected** due to unfavorable price differentials and impacts from inventory hedges, which negatively affected profitability and may continue to do so.  **[PSX_3362554_6]**
- **Management's reluctance to raise mid-cycle estimates** despite better performance suggests uncertainty or lack of confidence in sustaining current performance levels.  **[PSX_3362554_18]** **[PSX_3362554_17]**

66119234841cb32984df126869e653e263bf3e18211e96bb3fb3f68a5849417c

1. **Capital Allocation and Shareholder Returns**  
   **Q:** How will you approach capital returns amid a softer commodity environment?  
   **A:** Kevin Mitchell explained that going forward, they plan to return **50% or more of operating cash flow** to shareholders, even in a softer commodity environment. The dividend remains a priority at approximately **$2 billion per year**, and they expect to have flexibility to continue share repurchases while also investing in the business and managing the balance sheet.  **[PSX_3404397_7]** **[PSX_3404397_16]** 

2. **Balance Sheet Outlook and Leverage**  
   **Q:** What's your outlook for the balance sheet and leverage targets?  
   **A:** The company expects to finish the year with a stronger cash or net debt position, aided by proceeds from asset dispositions. They aim to move towards their leverage target of **25% to 30%**, with an absolute net debt goal of below **$18 billion**. Asset sales will provide added flexibility for balance sheet priorities and shareholder returns.  **[PSX_3404397_4]** **[PSX_3404397_16]** **[PSX_3404397_17]** **[PSX_3404397_21]** 

3. **Refining Margins and Mid-Cycle Outlook**  
   **Q:** How do you view refining margins and mid-cycle earnings capacity?  
   **A:** Mark Lashier indicated that while they don't expect to be at mid-cycle margins in 2025, they are **bullish on the medium-term outlook**. They anticipate global demand growth exceeding capacity additions and rationalizations beyond 2025. The company plans to update their mid-cycle earnings capacity, considering changes in the refining landscape and inflation impacts on crack spreads.  **[PSX_3404397_9]** **[PSX_3404397_17]** **[PSX_3404397_18]** 

4. **Renewable Diesel and Sustainable Aviation Fuel**  
   **Q:** What is the outlook for renewable diesel margins and SAF production?  
   **A:** Brian Mandell expects renewable diesel margins to **strengthen** due to factors like depressed feedstock prices, fewer imports into the U.S., and stronger credit markets. The company began producing sustainable aviation fuel in September and plans to be a supplier to the market, expecting steady-state production by the first quarter of next year.  **[PSX_3404397_10]** **[PSX_3404397_24]** 

5. **Refining Business Improvements**  
   **Q:** How are you progressing on refining cost reductions and margin capture?  
   **A:** The company has removed over **$600 million** of costs from refining and is focusing on earnings per barrel. They have completed a series of small capital projects aimed at improving market capture, contributing to an expected **5% improvement** by 2025, equivalent to about **$400 million** in earnings at mid-cycle pricing.  **[PSX_3404397_9]** **[PSX_3404397_15]** 

6. **Asset Dispositions Above $3 Billion Target**  
   **Q:** How should we think about asset sale proceeds going forward?  
   **A:** Mark Lashier stated that the **$3 billion** in asset dispositions was considered a **floor**, not a target. The company will continue to evaluate non-core assets and pursue dispositions that are favorable, expecting to exceed the initial target.  **[PSX_3404397_12]** **[PSX_3404397_17]** 

7. **Chemicals Business Outlook**  
   **Q:** What is your outlook for the Chemicals business?  
   **A:** Mark Lashier noted that CPChem's performance is strong due to their ability to operate at high rates with advantaged feedstock positions. They expect some seasonal softness but anticipate continued improvement in the macro environment for chemicals.  **[PSX_3404397_8]** **[PSX_3404397_19]** 

8. **Central Corridor Performance**  
   **Q:** What drove the strong performance in the Central Corridor?  
   **A:** The Central Corridor benefited from higher margins, including a **10% increase** in regional cracks, favorable impacts from inventory hedges due to falling **WTI prices**, improved pricing in NGLs and heavy intermediates, and excellent operating performance with **100% crude utilization** and **89% clean product yields**.  **[PSX_3404397_11]** 

9. **Cost Reductions vs. Inflation**  
   **Q:** How are cost reductions balancing against inflationary pressures?  
   **A:** Kevin Mitchell acknowledged that while inflation has been a headwind, the worst appears to be behind them. The cost reductions they are achieving are within their control, such as energy reduction initiatives, which help offset inflationary impacts.  **[PSX_3404397_5]** **[PSX_3404397_6]** 

10. **Demand Outlook for Fuels**  
    **Q:** What are you seeing in terms of demand for gasoline, diesel, and jet fuel?  
    **A:** Brian Mandell indicated that global gasoline demand is up about **1%**, with strong growth in Europe and the U.S. Distillate demand is down slightly, but there are optimistic signs from freight companies. Jet fuel demand is up about **8.5%**, driven largely by Asia.  **[PSX_3404397_23]** 

11. **Hedges in Different Regions**  
    **Q:** Do you utilize hedges across all regions or only in the Central Corridor?  
    **A:** Brian Mandell confirmed that they have hedges in all regions, primarily using **WTI crude**, which can positively impact earnings in a falling market.  **[PSX_3404397_21]** 

12. **Impact of TW Products Pipeline on PADD 4**  
    **Q:** Are you seeing the impact of the TW Products pipeline on PADD 4 margins?  
    **A:** Brian Mandell stated that they are **not yet** seeing the impact of the pipeline on PADD 4 margins.  **[PSX_3404397_22]** 

706c232d0f928fe2acca568ce040cfcc609ebd000c3104e7817a4226eab03ecf

1. **Rodeo Project Earnings Impact**  
   **Q:** How will the Rodeo Renewed project affect earnings and when will it be profitable?  
   **A:** The Rodeo facility is ramping up production after completing its conversion to renewable fuels.  **[PSX_3381147_8]**  By the end of the second quarter, it will reach full production of **50,000 barrels per day**.  **[PSX_3381147_8]**  Initially, margins are impacted due to higher carbon intensity (CI) feedstocks, but as we shift to lower CI feeds and start producing sustainable aviation fuel in the third quarter, profitability will improve.  **[PSX_3381147_8]**  The **$180 million** loss in the first quarter was due to transition and start-up costs  **[PSX_3381147_4]** , but we expect this to turn positive as operations stabilize.  **[PSX_3381147_15]** 

2. **Refining Performance and Capture Rates**  
   **Q:** What affected refining capture rates this quarter and what's the outlook?  
   **A:** First-quarter headwinds, including turnaround activities and the Rodeo conversion, reduced our capture rates to **69%**, below our target of **75%**.  **[PSX_3381147_4]**  We faced a **$50 million** headwind from Gulf Coast pricing differentials and a **$100 million** headwind from inventory hedges.  **[PSX_3381147_4]**  With turnarounds complete and catalysts refreshed, we're positioned to improve capture rates and clean product yields in the upcoming driving season.  **[PSX_3381147_4]** 

3. **Cost Reduction in Refining**  
   **Q:** How are cost reductions translating into refining OpEx savings?  
   **A:** Our business transformation initiatives have achieved over **$500 million** in run-rate cost savings, equivalent to **$0.75 per barrel**.  **[PSX_3381147_6]**  We're on track to reach **$650 million** in savings by year-end, targeting a **$1 per barrel** reduction.  **[PSX_3381147_6]**  These savings are beginning to manifest in lower OpEx, despite inflationary pressures.  **[PSX_3381147_6]** 

4. **Sale of European Retail Assets**  
   **Q:** What are the implications of selling European retail assets on refining operations?  
   **A:** We're selling our Germany and Austria retail assets, which contribute approximately **$350 million** in EBITDA.  **[PSX_3381147_14]**  The sale does not include our stake in the MiRO refinery.  **[PSX_3381147_7]**  Proceeds from the sale could potentially enhance our cash return targets, but we haven't made definitive decisions on allocation yet.  **[PSX_3381147_14]** 

5. **Midstream Earnings Variability**  
   **Q:** What caused the quarter-on-quarter variability in Midstream earnings?  
   **A:** First-quarter Midstream earnings were impacted by a **$30 million** effect from the winter storm and commercial true-ups from the fourth quarter.  **[PSX_3381147_10]**  Despite this, we remain on track with our guidance of **$675 million** per quarter in Midstream income before taxes.  **[PSX_3381147_10]** 

6. **Chemicals Segment Performance**  
   **Q:** What's driving the improved performance in the chemicals segment?  
   **A:** The advantage of light feedstock cracking and lower feedstock costs, such as natural gas and ethane, have improved margins.  **[PSX_3381147_9]**  CPChem benefited from mid-cap projects coming online, including a C3 splitter and a 1-hexene unit, contributing to earnings in the first quarter.  **[PSX_3381147_9]** 

7. **Diesel Market Outlook**  
   **Q:** What is the outlook for diesel margins and market conditions?  
   **A:** Diesel margins have been pressured due to factors like a warm U.S. winter and robust refinery operations.  **[PSX_3381147_11]**  However, we anticipate improvement as run cuts in Europe and Asia occur, gasoline demand rises during the driving season, and jet fuel demand increases.  **[PSX_3381147_11]** 

8. **Balance Sheet and Leverage Targets**  
   **Q:** How are you approaching net debt levels and capital allocation?  
   **A:** Our leverage is currently above our target range of **25% to 30%**, but we're comfortable due to strong business outlook and cash generation.  **[PSX_3381147_5]**  We're prioritizing share repurchases, reflecting confidence in our growth trajectory toward **$14 billion** of mid-cycle adjusted EBITDA.  **[PSX_3381147_5]** 

9. **Commercial Optimization Efforts**  
   **Q:** How are efforts to optimize commercial operations impacting earnings?  
   **A:** We're enhancing our commercial supply and trading by integrating across the value chain, reducing costs, and capturing embedded optionality.  **[PSX_3381147_18]**  This includes reorganizing our commercial group and advancing capabilities to improve market capture and overall earnings.  **[PSX_3381147_18]** 

10. **Near-Term Capture Rate Outlook**  
    **Q:** What is the expected trend for capture rates in the upcoming quarters?  
    **A:** With completion of maintenance and turnaround activities, our facilities are positioned to improve capture rates.  **[PSX_3381147_19]**  We expect clean product yields and product values to be strong entering the summer driving season, and our flexibility allows us to adapt to market changes like WCS price movements.  **[PSX_3381147_19]** 

868ab4764b7b0ab8e70c3a8a8f6e912df10bedb9e776b82171fe4c71b3992206

- **Weak refining margins in the Mid-Continent region**, particularly in Chicago where the crack spread is now close to zero, due to poor demand from winter weather and strong refinery runs, which may negatively impact refining profitability.  **[PSX_3371368_23]**
- **Increased costs and negative impacts due to the Rodeo Renewable Fuels project**, including $100 million of decommissioning and start-up costs in Q1 2024 that will impact GAAP earnings, and detrimental effects on Q4 2023 results from shutting down crude units.  **[PSX_3371368_13]** **[PSX_3371368_14]**
- **Significant reduction in deferred tax benefits expected in 2024**, dropping to about $200 million compared to higher benefits in 2023, which could negatively affect net income.  **[PSX_3371368_18]**

a53d4dec0da1fa11dffbbea3c476a7e45f7121d84fbf1f065f789d3ff69f7574

- **Strong commercial execution leading to improved margins**: Phillips 66 achieved strong market capture in Q4 due to improved feedstock costs, strong commercial results, and operational excellence.  **[PSX_3371368_4]**
- **Resilience in the Chemicals business (CPChem) with high utilization rates**: Despite a cyclical downturn, CPChem has demonstrated resilience by running at high rates, maintaining cash positivity, and being well-positioned for long-term growth.  **[PSX_3371368_18]**
- **Positive outlook for refined product demand, especially jet fuel**: The company expects **global jet demand to grow about 6% in 2024**, with continued recovery in international travel, which bodes well for their refining business.  **[PSX_3371368_8]**

eeb95cb7fccf788166d3f83a4c4121e64308416fe2d377a647b7e27eca13b875

- **Phillips 66 achieved over $600 million in structural cost reductions, enhancing profitability and efficiency.**  **[PSX_3395030_3]**
- **Midstream segment delivered strong volumes and near-record results, benefiting from synergy capture and operational excellence.**  **[PSX_3395030_5]**
- **Strategic acquisitions like Pinnacle immediately add accretive value and enhance Phillips 66's wellhead-to-market position in the Permian Basin.**  **[PSX_3395030_20]** **[PSX_3395030_8]**

7de98669c38d620e761307e1714a83f97b7633925ef1db6fd94233609e73925e

- **Phillips 66 reported lower refining margins and capture rates in Q1, with a capture rate of only 69% compared to their target of 75%, due to maintenance activities and the renewable fuels conversion at Rodeo, impacting financial performance.**  **[PSX_3381147_4]**
- **The Rodeo renewable energy complex resulted in a $180 million loss in the first quarter, higher than expected, and EBITDA generation is expected to be challenged during the ramp-up phase, potentially affecting near-term profitability.**  **[PSX_3381147_4]** **[PSX_3381147_15]**
- **The company's net debt to capital ratio is above their target range at 38%, yet they continue to prioritize share repurchases over debt reduction, potentially risking financial stability.**  **[PSX_3381147_5]**

ddc3fe995a5f376e154c753f7226430c7f614e3e54351d7926dc1286f4457e23

Phillips 66 (PSX)

Financials