Phillips 66

What they do

Phillips 66 operates an integrated downstream energy portfolio across five reporting segments: Midstream, Chemicals, Refining, Marketing and Specialties (M&S), and Renewable Fuels. The company runs refineries, an NGL wellhead-to-market value chain, chemical joint ventures through CPChem, and retail and wholesale fuel marketing. At December 31, 2025, it reported total assets of $73.7 billion; at June 30, 2026, total assets were $81.8 billion.

Revenue drivers

• Refining — The largest earnings swing factor in the latest quarter, posting 2Q 2026 segment earnings of $3,062 million on realized margin of $24.08 per barrel and 96% crude capacity utilization.
• Midstream — Earns from NGL pipelines, fractionation and gas processing; 2Q 2026 earnings were $785 million with record NGL fractionation volumes of 1,020 MBD and NGL pipeline throughput of 943 MBD.
• Marketing and Specialties — Sells refined products through marketing and specialties channels; 2Q 2026 segment earnings were $583 million versus a $161 million loss in 1Q 2026.
• Chemicals and Renewable Fuels — Chemicals earned $404 million in 2Q 2026 with 91% global O&P capacity utilization; Renewable Fuels earned $544 million on 53 MBD produced.

Recent performance

In the second quarter of 2026, Phillips 66 reported earnings of $3.8 billion, or $9.55 per diluted share, and adjusted earnings of $3.8 billion, or $9.41 per share. Revenue for the quarter was $51.00 billion, up from $32.54 billion in the first quarter of 2026. Cash from operations was $7.3 billion, and the company reduced total debt by $6.6 billion to $20.6 billion, cutting net debt to $16.5 billion. Refining delivered 96% crude capacity utilization and an 86% clean product yield, while the company achieved record NGL fractionation and LPG export volumes.

Strategy

Management is focused on world-class operations, disciplined growth and returns, financial strength and flexibility, and shareholder returns through 2027. The company budgeted $2.4 billion for 2026 capital expenditures and investments, including $1.3 billion of growth capital primarily in Midstream. In 2025 it funded $2.2 billion of capital and a $2.2 billion Midstream acquisition, acquired the remaining 50% of WRB Refining LP for $1.3 billion, and raised $3.5 billion from asset dispositions including the Germany and Austria retail marketing business and the Coop interest. Growth efforts center on the NGL wellhead-to-market chain, including the Coastal Bend acquisition, the Dos Picos II gas plant, and announced construction of the Zeus Gas Plant and a Coastal Bend NGL Fractionator.

Risks

• Cyclical and volatile margins — Refining, petrochemical, plastics and renewable fuels margins depend on the spread between product prices and feedstock costs, which are largely outside the company's control.
• Feedstock and product price exposure — Prices for crude oil, natural gas, NGLs and renewable feedstocks, and the prices ultimately received for refined products, depend on global and local demand, competitor production, imports and exports, weather, and transportation availability.
• Regulatory and political conditions — Domestic and international economic, political and regulatory conditions, including tariffs or other tax incentives or disincentives, can affect the company's operations and margins.
• OPEC and global supply actions — The 10-K risk factors cite the impacts of members of the Organization of the Petroleum Exporting Countries as a factor affecting feedstock and product prices.

Outlook

Management states financial targets through 2027 reflect plans to organically grow Midstream and Chemicals, with total annual capital expenditures and investments of approximately $2.5 billion including WRB following consolidation on October 1, 2025. The company targets annual clean product yield above 86%, crude capacity utilization above industry average, and continued cost structure improvement. Budgeted 2026 capital expenditures and investments are $2.4 billion, including $1.3 billion of growth capital primarily in Midstream. Construction of the 300 MMCFD Zeus Gas Plant and a 100 MBD Coastal Bend NGL Fractionator was announced, and CPChem's Golden Triangle and Ras Laffan Polymers projects are expected to reach full operations in 2027.