How is the company managing its debt and liquidity?

Phillips 66 has actively managed its debt through issuances and repayments, including issuing $1.8 billion in senior unsecured notes in September 2024 and repaying $1.1 billion in debt through the extinguishment of senior notes. The company maintains a strong liquidity position, ending the quarter with $1.6 billion in cash and cash equivalents and $5.3 billion in available committed credit capacity.

What is the status of the Los Angeles Refinery operations?

Phillips 66 has approved a plan to cease operations at its Los Angeles Refinery in the fourth quarter of 2025. As a result, the company is accelerating depreciation on the refinery's assets to reduce their carrying value to estimated salvage value and has increased its asset retirement obligations.

What are the company's plans for shareholder returns?

Phillips 66 is committed to returning capital to shareholders. Since July 2022, the company has distributed $12.5 billion through share repurchases and dividends and is on track to achieve its target of $13 billion to $15 billion by the end of 2024. The Board declared a quarterly cash dividend of $1.15 per common share for both Q3 and Q4 2024.

PSX 10-Q Quarterly Report Q3 FY2024 — Revenue, Net Income, EPS

Q: What is the primary reason for the significant decrease in net income in Q3 2024 compared to Q3 2023?

The primary reason for the significant decrease in net income was a combination of lower realized refining margins, driven by decreased market crack spreads, and a substantial accrual of $604.9 million for the Propel Fuels litigation. This litigation resulted in a jury verdict against Phillips 66 Company.

Summary

Phillips 66 (PSX) reported a net income attributable to Phillips 66 of $346 million ($0.82 per diluted share) for the third quarter of 2024, a significant decrease from $2.1 billion ($4.69 per diluted share) in the same period last year. This decline was primarily driven by lower realized refining margins due to decreased market crack spreads and a substantial $605 million accrual recorded for the Propel Fuels litigation. For the nine months ended September 30, 2024, net income attributable to Phillips 66 was $2.1 billion ($4.94 per diluted share), down from $5.8 billion ($12.59 per diluted share) in the prior year's comparable period. The company has been actively managing its balance sheet through debt issuances and repayments, and has made progress on its strategic priorities, including returning capital to shareholders through dividends and share repurchases, achieving business transformation savings, and expanding its midstream NGL business. Despite the decrease in quarterly earnings, the company maintains a strong liquidity position with $1.6 billion in cash and cash equivalents and $5.3 billion in available committed credit capacity.

Financial Highlights

45 data points

Beta

Revenue

$35.53B

0.1% Gross Margin

Net Income

$346.00M

0.0% Net Margin

EPS (Diluted)

$0.82

Total Assets

$75.08B

Cash & Equivalents

$1.64B

Free Cash Flow

$1.13B

Financial Statements

Beta

Revenue	$35.53B
Cost of Revenue	$32.19B
Gross Profit	$3.33B
SG&A Expenses	$1.19B
Operating Income	$2.11B
Net Income	$346.00M
EPS (Basic)	$0.82
EPS (Diluted)	$0.82
Shares Outstanding (Basic)	417.31M
Shares Outstanding (Diluted)	418.80M

Key Highlights

1Third quarter 2024 net income attributable to Phillips 66 was $346 million, down from $2.1 billion in Q3 2023, primarily due to lower refining margins and a significant litigation accrual.
2A $604.9 million accrual was recorded for the Propel Fuels litigation, impacting Q3 2024 results.
3Refining segment income before taxes was a loss of $108 million, a sharp decrease from $1.7 billion in Q3 2023, driven by lower market crack spreads.
4The company continues to prioritize shareholder returns, distributing $12.5 billion through share repurchases and dividends since July 2022.
5Phillips 66 acquired Pinnacle Midland Parent LLC for $567 million to expand its Permian Basin natural gas gathering and processing operations.
6The company plans to cease operations at its Los Angeles Refinery in Q4 2025, with accelerated depreciation and increased asset retirement obligations recognized.
7Total assets at September 30, 2024, were $75.1 billion, with cash and cash equivalents of $1.6 billion.

Phillips 66 Quarterly Report for Q3 Ended Sep 30, 2024

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions