Phillips 66 — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported earnings of $5.6 billion ($14.08 per diluted share) compared to $3.8 billion ($9.55 per diluted share) in the second quarter of 2026.
• Adjusted earnings were $5.6 billion ($14.08 per diluted share) versus $3.8 billion ($9.41 per diluted share) in the second quarter of 2026.
• Adjusted EBITDA reached $8.1 billion, an increase from $5.9 billion in the second quarter of 2026.
• Cash flow from operations was $7.3 billion, up from $7.3 billion in the second quarter of 2026.
• Cash flow from operations, excluding working capital, was $6.2 billion compared to $4.3 billion in the second quarter of 2026.
• Capital expenditures and investments totaled $680 million, down from $726 million in the second quarter of 2026.
• Return of capital to shareholders was $2.8 billion, consisting of $2.3 billion in stock repurchases and $504 million in dividends.
• Total debt decreased by $2.0 billion to $18.5 billion; net debt decreased by $3.8 billion to $12.7 billion.
• Debt-to-capital ratio improved to 34% from 39% in the second quarter of 2026.
• Net debt-to-capital ratio improved to 26% from 33% in the second quarter of 2026.
• Cash and cash equivalents were $5.8 billion as of September 30, 2026.

Guidance and Future Outlook:

• Targeted to return more than 50% of net operating cash flow to shareholders.
• Committed to delivering attractive, sustainable dividend growth across commodity cycles.
• Western Gateway Pipeline system expected to enter service in 2029.
• Golden Triangle Polymers Project (Orange, Texas) and Ras Laffan Polymers Project (Qatar) expected to reach full operations in 2027.
• Coastal Bend expansion project expected to begin initial volumes in the fourth quarter of 2026, with full ramp-up to 350 MBD in early 2027.

Business Segments and Product Lines:

• Refining: Adjusted pre-tax income increased to $6.1 billion from $3.1 billion in the second quarter of 2026, driven by higher realized margins and volumes. Refining utilization was 98% with record Central Corridor processed inputs of 848 MBD. Distillate yield reached a record 41%, and clean product yield was 86%.
• Midstream: Pre-tax income decreased to $702 million from $785 million in the second quarter of 2026, primarily due to lower gas transportation margins. NGL pipeline throughput (Y-Grade to Market) was 982 MBD, and NGL fractionated volumes were 1,003 MBD.
• Chemicals: Pre-tax income decreased to $311 million from $404 million in the second quarter of 2026, mainly due to lower polyethylene margins, partially offset by higher volumes and lower costs. Global O&P capacity utilization was 92%.
• Marketing and Specialties: Adjusted pre-tax income decreased to $245 million from $583 million in the second quarter of 2026, primarily due to lower global marketing fuel margins in a rising price environment.
• Renewable Fuels: Pre-tax income decreased to $191 million from $544 million in the second quarter of 2026, due to lower margins including inventory impacts and higher costs. Renewable fuels produced were 47 MBD.
• Corporate and Other: Pre-tax loss decreased to $372 million from $407 million in the second quarter of 2026, mainly due to lower net interest expense, partially offset by higher employee-related costs.
• Acquired the remaining 50% interest in WRB Refining LP on October 1, 2025, delivering greater than $50 million of near-term synergies.

Market and Competitive Landscape:

• Refining realized margins increased to $38.00 per barrel from $24.08 per barrel in the second quarter of 2026, primarily driven by an increase in market crack spreads.
• Turnaround expenses decreased to $79 million from $123 million in the second quarter of 2026.

Risks and Challenges:

• The press release includes a standard cautionary statement regarding forward-looking statements, noting risks such as fluctuations in NGL, crude oil, refined petroleum products, and renewable fuels prices; changes in government policies and regulations; permitting delays; and potential impacts from public health crises, geopolitical events, and climate change.

Management Commentary and Tone:

• Mark Lashier, Chairman and CEO, stated the company delivered strong operating performance and is executing on financial and operating commitments.
• Management emphasized a disciplined approach to capital allocation and the integrated portfolio's ability to create value for stakeholders.
• The tone reflects confidence in the company's commercial capabilities and focus on continuous improvement.

Other Key Points:

• The company announced a second dividend increase in 2026.
• Midstream fractionation volumes were 1 MMBD, wellhead volumes were 4.6 Bcf/D, and the Freeport LPG export dock operated at 105% utilization.
• A pre-tax special item adjustment of $29 million was recorded in the Refining segment.
• The company has $6.4 billion of committed capacity available under credit facilities as of September 30, 2026.