01—Abstract
Summary
Summary of the 10-K filed February 21, 2025. Cited figures are marked; the original filing is the authoritative source.
Phillips 66 (PSX) reported net income attributable to Phillips 66 of $2.1 billiona for the fiscal year ended December 31, 2024, a significant decrease from $7.0 billion in 2023.
This decline was primarily driven by lower realized refining margins, largely due to decreased market crack spreads, which were only partially offset by lower income tax expenses. The company's strategic priorities for 2025-2027 focus on returning capital to shareholders (targeting over 50%b of net cash from operations), driving disciplined growth in Midstream and Chemicals, and maintaining financial strength.
Significant capital expenditures and strategic acquisitions in the Midstream segment, including the acquisition of Pinnacle Midstream and the pending acquisition of EPIC Y-Grade, highlight the company's focus on expanding its natural gas liquids value chain. However, the company also announced its intention to cease operations at its Los Angeles Refinery in late 2025 and incurred significant restructuring costs and impairments, particularly in the Midstream and Refining segments.
02—Key points
Key Highlights
- Net income attributable to Phillips 66 decreased significantly to $2.1 billion in 2024 from $7.0 billion in 2023, primarily due to lower refining margins.
- The company returned $5.3 billion to shareholders through share repurchases and dividends in 2024, meeting its target, and aims to return over 50% of net cash from operations to shareholders going forward.
- Phillips 66 continues to invest in growth, notably acquiring Pinnacle Midstream and entering into an agreement to acquire EPIC Y-Grade for a total of approximately $2.8 billion, strengthening its Midstream NGL business.
- The company plans to cease operations at its Los Angeles Refinery in the fourth quarter of 2025 and incurred accelerated depreciation and restructuring costs related to this decision.
- Significant impairments were recorded, particularly in the Midstream segment ($346 million) and Refining segment ($106 million), impacting overall profitability.
- The Renewable Fuels segment reported a loss of $198 million in 2024, primarily due to costs associated with the ramp-up of the Rodeo Complex.
- The company's total debt increased to $20.1 billion, with a debt-to-capital ratio of 41% as of December 31, 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Phillips 66 kept $0.01.
- Revenue$143.15B100.0%
- Cost of revenue−$129.96B90.8%
- Gross profit$13.19B9.2%
- Operating costs−$11.07B7.7%
- Operating income$2.12B1.5%
- Interest, other & tax$-00.0%
- Net income$2.12B1.5%
Where FY2024 revenue went
$143.15B- Cost of revenue: $129.96B, 91% of revenue
- Net income: $2.12B, 1.5% of revenue
- R&D: $15.0M, 0.0% of revenue
- SG&A: $2.81B, 2.0% of revenue
- Other operating costs: $8.24B, 5.8% of revenue
Kept 1.5% as net incomeNet income $2.12B · 1.5%R&D $15.0M · 0.0%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 21, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $143.15B$147.40B | −2.9% |
| Cost of Revenue | $129.96B$128.09B | +1.5% |
| Gross Profit | $13.19B$19.31B | −31.7% |
| R&D Expenses | $15.00M$27.00M | −44.4% |
| SG&A Expenses | $2.81B$2.52B | +11.4% |
| Operating Income | $2.12B$7.01B | −69.8% |
| Interest Expense | $919.00M$842.00M | +9.1% |
| Net Income | $2.12B$7.01B | −69.8% |
| EPS (Basic) | $5.01$15.56 | −67.8% |
| EPS (Diluted) | $4.99$15.48 | −67.8% |
| Shares Outstanding (Basic) | 420.17M450.14M | −6.7% |
| Shares Outstanding (Diluted) | 421.89M453.21M | −6.9% |
05—Questions
Frequently Asked Questions
What were the primary drivers of Phillips 66's financial performance in 2024?
Phillips 66's financial performance in 2024 was primarily impacted by a significant decrease in refining margins, largely due to lower market crack spreads. This was partially offset by lower income tax expenses. The company also incurred substantial impairments and restructuring costs, particularly in its Midstream and Refining segments, and experienced a loss in its Renewable Fuels segment during its ramp-up phase.
What are Phillips 66's key strategic priorities for the upcoming years?
Phillips 66's strategic priorities for 2025-2027 focus on returning capital to shareholders, aiming to return over 50% of net cash from operations through dividends and share repurchases. They also aim to drive disciplined growth in their Midstream and Chemicals businesses, and maintain financial strength and flexibility. The company will continue to focus on operational excellence and cost reduction initiatives.
What are the significant transactions or events that occurred in 2024 and are planned for the near future?
In 2024, Phillips 66 acquired Pinnacle Midstream for $565 million to expand its Permian Basin operations and completed several asset dispositions. Looking ahead, the company has agreed to acquire EPIC Y-Grade for $2.2 billion, subject to regulatory approval. A significant operational change is the planned cessation of operations at the Los Angeles Refinery in late 2025.
06—Continue