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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period endedMarch 31, 2024
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period fromto
Commission file number:001-35349

Phillips 66
(Exact name of registrant as specified in its charter) 
Delaware 45-3779385
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)

2331 CityWest Blvd., Houston, Texas 77042
(Address of principal executive offices) (Zip Code)
832-765-3010
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 Par ValuePSXNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filer
Smaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes      No  
The registrant had 423,952,135 shares of common stock, $0.01 par value, outstanding as of March 31, 2024.


PHILLIPS 66

TABLE OF CONTENTS
 



PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
 
Consolidated Statement of IncomePhillips 66

 Millions of Dollars
 Three Months Ended
March 31
 2024 2023 
Revenues and Other Income
Sales and other operating revenues$35,811 34,396 
Equity in earnings of affiliates528 611 
Net gain on dispositions 34 
Other income97 48 
Total Revenues and Other Income36,436 35,089 
Costs and Expenses
Purchased crude oil and products32,386 29,341 
Operating expenses1,452 1,578 
Selling, general and administrative expenses557 605 
Depreciation and amortization504 476 
Impairments165 8 
Taxes other than income taxes165 207 
Accretion on discounted liabilities9 6 
Interest and debt expense227 192 
Foreign currency transaction losses7 25 
Total Costs and Expenses35,472 32,438 
Income before income taxes964 2,651 
Income tax expense203 574 
Net Income 761 2,077 
Less: net income attributable to noncontrolling interests13 116 
Net Income Attributable to Phillips 66$748 1,961 
Net Income Attributable to Phillips 66 Per Share of Common Stock (dollars)
Basic$1.74 4.21 
Diluted1.73 4.20 
Weighted-Average Common Shares Outstanding (thousands)
Basic428,959 464,810 
Diluted431,906 467,034 
See Notes to Consolidated Financial Statements.
1

Consolidated Statement of Comprehensive Income Phillips 66
 
 Millions of Dollars
 Three Months Ended
March 31
 2024 2023 
Net Income$761 2,077 
Other comprehensive income (loss)
Defined benefit plans
Amortization of net actuarial loss and settlements2 10 
Plans sponsored by equity affiliates1 3 
Income taxes on defined benefit plans(1)(3)
Defined benefit plans, net of income taxes2 10 
Foreign currency translation adjustments(34)76 
Income taxes on foreign currency translation adjustments2 1 
Foreign currency translation adjustments, net of income taxes(32)77 
Other Comprehensive Income (Loss), Net of Income Taxes(30)87 
Comprehensive Income 731 2,164 
Less: comprehensive income attributable to noncontrolling interests13 116 
Comprehensive Income Attributable to Phillips 66$718 2,048 
See Notes to Consolidated Financial Statements.
2

Consolidated Balance SheetPhillips 66
 
 Millions of Dollars
 March 31
2024
December 31
2023
Assets
Cash and cash equivalents$1,570 3,323 
Accounts and notes receivable (net of allowances of $75 million in 2024 and $71 million in 2023)
10,078 10,483 
Accounts and notes receivable—related parties1,454 1,247 
Inventories6,286 3,750 
Prepaid expenses and other current assets1,316 1,138 
Total Current Assets20,704 19,941 
Investments and long-term receivables15,592 15,302 
Net properties, plants and equipment35,549 35,712 
Goodwill1,553 1,550 
Intangibles911 920 
Other assets2,090 2,076 
Total Assets$76,399 75,501 
Liabilities
Accounts payable$11,745 10,332 
Accounts payable—related parties729 569 
Short-term debt 2,325 1,482 
Accrued income and other taxes1,087 1,200 
Employee benefit obligations459 863 
Other accruals1,322 1,410 
Total Current Liabilities17,667 15,856 
Long-term debt17,829 17,877 
Asset retirement obligations and accrued environmental costs919 864 
Deferred income taxes7,368 7,424 
Employee benefit obligations613 630 
Other liabilities and deferred credits1,210 1,200 
Total Liabilities45,606 43,851 
Equity
Common stock (2,500,000,000 shares authorized at $0.01 par value)
     Issued (2024—656,284,691 shares; 2023—654,842,101 shares)
Par value7 7 
Capital in excess of par19,674 19,650 
Treasury stock (at cost: 2024—232,332,556 shares; 2023—224,377,439 shares)
(20,489)(19,342)
Retained earnings30,846 30,550 
Accumulated other comprehensive loss(312)(282)
Total Stockholders’ Equity29,726 30,583 
Noncontrolling interests1,067 1,067 
Total Equity30,793 31,650 
Total Liabilities and Equity$76,399 75,501 
See Notes to Consolidated Financial Statements.
3

Consolidated Statement of Cash FlowsPhillips 66

 Millions of Dollars
 Three Months Ended
March 31
 2024 2023 
Cash Flows From Operating Activities
Net income$761 2,077 
Adjustments to reconcile net income to net cash provided by operating
   activities
Depreciation and amortization504 476 
Impairments165 8 
Accretion on discounted liabilities9 6 
Deferred income taxes(55)146 
Undistributed equity earnings(180)(242)
Loss on early redemption of debt2  
Net gain on dispositions (34)
Unrealized investment (gain) loss(6)11 
Other11 14 
Working capital adjustments
Accounts and notes receivable199 1,663 
Inventories(2,555)(2,003)
Prepaid expenses and other current assets(179)469 
Accounts payable1,678 (739)
Taxes and other accruals(590)(653)
Net Cash Provided by (Used in) Operating Activities(236)1,199 
Cash Flows From Investing Activities
Capital expenditures and investments(628)(378)
Return of investments in equity affiliates 41 60 
Proceeds from asset dispositions2 77 
Other(80)(24)
Net Cash Used in Investing Activities(665)(265)
Cash Flows From Financing Activities
Issuance of debt3,815 2,488 
Repayment of debt(3,013)(1,223)
Issuance of common stock50 10 
Repurchase of common stock(1,164)(800)
Dividends paid on common stock(448)(486)
Distributions to noncontrolling interests(13)(58)
Other(73)(48)
Net Cash Used in Financing Activities(846)(117)
Effect of Exchange Rate Changes on Cash and Cash Equivalents(6)15 
Net Change in Cash and Cash Equivalents(1,753)832 
Cash and cash equivalents at beginning of period3,323 6,133 
Cash and Cash Equivalents at End of Period$1,570 6,965 
See Notes to Consolidated Financial Statements.

4

Consolidated Statement of Changes in EquityPhillips 66

Millions of Dollars
Three Months Ended March 31
 Attributable to Phillips 66 
 Common Stock   
 Par ValueCapital in Excess of ParTreasury StockRetained EarningsAccum. Other Comprehensive LossNoncontrolling InterestsTotal
December 31, 2023$7 19,650 (19,342)30,550 (282)1,067 31,650 
Net income   748  13 761 
Other comprehensive loss    (30) (30)
Dividends paid on common stock ($1.05 per share)
   (448)  (448)
Repurchase of common stock  (1,147)   (1,147)
Distributions to noncontrolling interests     (13)(13)
Benefit plan activity 24  (4)  20 
March 31, 2024$7 19,674 (20,489)30,846 (312)1,067 30,793 
December 31, 2022$7 19,791 (15,276)25,432 (460)4,612 34,106 
Net income— — — 1,961 — 116 2,077 
Other comprehensive income— — — — 87 — 87 
Dividends paid on common stock ($1.05 per share)
— — — (486)— — (486)
Repurchase of common stock— — (807)— — — (807)
Distributions to noncontrolling interests— — — — — (58)(58)
Benefit plan activity— 4 — (4)— (3)(3)
March 31, 2023$7 19,795 (16,083)26,903 (373)4,667 34,916 


Shares
Three Months Ended March 31
 Common Stock IssuedTreasury Stock
December 31, 2023654,842,101 224,377,439 
Repurchase of common stock  7,955,117 
Shares issued—share-based compensation1,442,590  
March 31, 2024656,284,691 232,332,556 
December 31, 2022652,373,645 186,529,667 
Repurchase of common stock — 7,874,201 
Shares issued—share-based compensation892,539 — 
March 31, 2023653,266,184 194,403,868 
See Notes to Consolidated Financial Statements.
5

Notes to Consolidated Financial StatementsPhillips 66

Note 1—Interim Financial Information

The unaudited interim financial information presented in the financial statements included in this report is prepared in accordance with generally accepted accounting principles in the United States (GAAP) and includes all known accruals and adjustments necessary, in the opinion of management, for a fair presentation of the consolidated financial position of Phillips 66 and its results of operations and cash flows for the periods presented. Unless otherwise specified, all such adjustments are of a normal and recurring nature. Certain notes and other information have been condensed or omitted from the interim financial statements included in this report. Therefore, these interim financial statements should be read in conjunction with the consolidated financial statements and notes included in our 2023 Annual Report on Form 10-K. The results of operations for the three months ended March 31, 2024, are not necessarily indicative of the results expected for the full year.


Note 2—DCP Midstream, LP Merger (DCP LP Merger)

On June 15, 2023, we completed the acquisition of all publicly held common units of DCP Midstream, LP (DCP LP) pursuant to the terms of the Agreement and Plan of Merger, dated as of January 5, 2023 (DCP LP Merger Agreement). The DCP LP Merger Agreement was entered into with DCP LP, its subsidiaries and its general partner entities, pursuant to which one of our wholly owned subsidiaries merged with and into DCP LP, with DCP LP surviving as a Delaware limited partnership. Under the terms of the DCP LP Merger Agreement, at the effective time of the DCP LP Merger, each publicly held common unit representing a limited partner interest in DCP LP (other than the common units owned by DCP Midstream and its subsidiaries) issued and outstanding as of immediately prior to the effective time was converted into the right to receive $41.75 per common unit in cash. We accounted for the DCP LP Merger as an equity transaction. The DCP LP Merger increased our aggregate direct and indirect economic interest in DCP LP from 43.3% to 86.8% and our aggregate direct and indirect economic interests in DCP Sand Hills Pipeline, LLC (DCP Sand Hills) and DCP Southern Hills Pipeline, LLC (DCP Southern Hills) increased from 62.2% to 91.2%.

See Note 20—DCP Midstream Class A Segment, for additional information regarding the equity transaction.


Note 3—Business Combination

On August 1, 2023, our Marketing and Specialties (M&S) segment acquired a marketing business on the U.S. West Coast for total consideration of $272 million. These operations were acquired to support the placement of renewable diesel produced by our Rodeo facility, now referred to as the Rodeo Renewable Energy Complex. At March 31, 2024, we provisionally recorded $146 million of amortizable intangible assets, primarily customer relationships; $82 million of properties, plants and equipment (PP&E), including finance lease right of use assets; $40 million of net working capital; $67 million of goodwill; and $63 million of finance lease liabilities for this acquisition. The fair values of the assets acquired and liabilities assumed are preliminary and subject to change until we finalize our accounting for this acquisition. We will complete a final determination of the fair values of assets acquired and liabilities assumed within the one-year measurement period from the date of the acquisition.





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Note 4—Sales and Other Operating Revenues

Disaggregated Revenues
The following tables present our disaggregated sales and other operating revenues:

 Millions of Dollars
 Three Months Ended
March 31
 2024 2023 
Product Line and Services
Refined petroleum products$25,739 24,718 
Crude oil resales5,578 4,565 
Natural gas liquids (NGL) and natural gas3,334 4,421 
Services and other*
1,160 692 
Consolidated sales and other operating revenues$35,811 34,396 
Geographic Location**
United States$28,377 27,065 
United Kingdom3,890 3,930 
Germany1,303 1,306 
Other countries2,241 2,095 
Consolidated sales and other operating revenues$35,811 34,396 
* Includes derivatives-related activities. See Note 13—Derivatives and Financial Instruments, for additional information.
** Sales and other operating revenues are attributable to countries based on the location of the operations generating the revenues.

Contract-Related Assets and Liabilities
At March 31, 2024, and December 31, 2023, receivables from contracts with customers were $9,592 million and $9,638 million, respectively. Significant noncustomer balances, such as buy/sell receivables and excise tax receivables, were excluded from these amounts.

Our contract-related assets also include payments we make to our marketing customers related to incentive programs. An incentive payment is initially recognized as an asset and subsequently amortized as a reduction to revenue over the contract term, which generally ranges from 5 to 15 years. At March 31, 2024, and December 31, 2023, our asset balances related to such payments were $546 million and $537 million, respectively.

Our contract liabilities represent advances from our customers prior to product or service delivery. At March 31, 2024, and December 31, 2023, contract liabilities were $162 million and $187 million, respectively.

Remaining Performance Obligations
Most of our contracts with customers are spot contracts or term contracts with only variable consideration. We do not disclose remaining performance obligations for these contracts as the expected duration is one year or less or because the variable consideration has been allocated entirely to an unsatisfied performance obligation. We also have certain contracts in our Midstream segment that include minimum volume commitments with fixed pricing. At March 31, 2024, the remaining performance obligations related to these minimum volume commitment contracts amounted to $326 million. This amount excludes variable consideration and estimates of variable rate escalation clauses in our contracts with customers, and is expected to be recognized through 2031 with a weighted average remaining life of two years as of March 31, 2024.


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Note 5—Credit Losses

We are exposed to credit losses primarily through our sales of refined petroleum products, crude oil, NGL and natural gas. We assess each counterparty’s ability to pay for the products we sell by conducting a credit review. The credit review considers our expected billing exposure and timing for payment and the counterparty’s established credit rating or our assessment of the counterparty’s creditworthiness based on our analysis of their financial statements when a credit rating is not available. We also consider contract terms and conditions, country and political risk, and business strategy in our evaluation. A credit limit is established for each counterparty based on the outcome of this review. We may require collateralized asset support or a prepayment to mitigate credit risk.

We monitor our ongoing credit exposure through active review of counterparty balances against contract terms and due dates. Our activities include timely account reconciliations, dispute resolution and payment confirmations. We may employ collection agencies and legal counsel to pursue recovery of defaulted receivables. In addition, when events and circumstances arise that may affect certain counterparties’ abilities to fulfill their obligations, we enhance our credit monitoring, and we may seek collateral to support some transactions or require prepayments from higher-risk counterparties.

At March 31, 2024, and December 31, 2023, we reported $11,532 million and $11,730 million of accounts and notes receivable, respectively, net of allowances of $75 million and $71 million, respectively. Based on an aging analysis at March 31, 2024, more than 95% of our accounts receivable were outstanding less than 60 days.

We are also exposed to credit losses from off-balance sheet exposures, such as guarantees of joint venture debt and standby letters of credit. See Note 11—Guarantees, and Note 12—Contingencies and Commitments, for more information regarding these off-balance sheet exposures.


8

Note 6—Inventories

Inventories consisted of the following:

 Millions of Dollars
 March 31
2024
December 31
2023
Crude oil and petroleum products$5,871 3,330 
Materials and supplies415 420 
$6,286 3,750 


Inventories valued on the last-in, first-out (LIFO) basis totaled $5,698 million and $3,050 million at March 31, 2024, and December 31, 2023, respectively. The estimated excess of current replacement cost over LIFO cost of inventories amounted to approximately $6.3 billion and $5.3 billion at March 31, 2024, and December 31, 2023, respectively.

Certain planned reductions in inventory that are not expected to be replaced by the end of the year cause liquidations of LIFO inventory values. LIFO inventory liquidations did not have a material impact on net income for the three months ended March 31, 2024, and 2023.
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Note 7—Investments, Loans and Long-Term Receivables

Equity Investments

Dakota Access, LLC (Dakota Access) and Energy Transfer Crude Oil Company, LLC (ETCO)
In 2020, the trial court presiding over litigation brought by the Standing Rock Sioux Tribe (the Tribe) ordered the U.S. Army Corps of Engineers (USACE) to prepare an Environmental Impact Statement (EIS) addressing an easement under Lake Oahe in North Dakota. The trial court later vacated the easement. Although the easement is vacated, the USACE has no plans to stop pipeline operations while it proceeds with the EIS, and the Tribe’s request for a shutdown was denied in May 2021. In June 2021, the trial court dismissed the litigation entirely. Once the EIS is completed, new litigation or challenges may be filed.

In February 2022, the U.S. Supreme Court (the Court) denied Dakota Access’ writ of certiorari requesting the Court to review the trial court’s decision to order the EIS and vacate the easement. Therefore, the requirement to prepare the EIS stood. Also in February 2022, the Tribe withdrew as a cooperating agency, causing the USACE to halt the EIS process while the USACE engaged with the Tribe on their reasons for withdrawing.

The draft EIS process resumed in August 2022, and in September 2023, the USACE published its draft EIS for public comment. The USACE identified five potential outcomes, but did not indicate which one it preferred. The options comprise two “no action” alternatives where the USACE would deny an easement to Dakota Access and require it to shut down the pipeline and either remove the pipe from under Lake Oahe, or allow the pipeline to be abandoned-in-place under the lake. The USACE also identified three “action” alternatives; two of them contemplate that the USACE would reissue the easement to Dakota Access under essentially the same terms as 2017 with either the same or a larger volume of oil allowed through the pipeline, while the third alternative would require decommissioning of the current pipeline and construction of a new line 39 miles upstream from the current location. The public comment period concluded on December 13, 2023. The USACE plans to review the comments and issue its final EIS in the fall of 2024. The Record of Decision will follow within 30 to 60 days after the issuance of the final EIS.

Dakota Access and ETCO have guaranteed repayment of senior unsecured notes issued by a wholly owned subsidiary of Dakota Access with an aggregate principal amount outstanding of $1.85 billion at March 31, 2024. In addition, Phillips 66 Partners LP (Phillips 66 Partners), a wholly owned subsidiary of Phillips 66, and its co-venturers in Dakota Access also provided a Contingent Equity Contribution Undertaking (CECU) in conjunction with the notes offering. Under the CECU, the co-venturers may be severally required to make proportionate equity contributions to Dakota Access if there is an unfavorable final judgment in the above-mentioned ongoing litigation. At March 31, 2024, our 25% share of the maximum potential equity contributions under the CECU was approximately $467 million.

If the pipeline is required to cease operations, it may have a material adverse effect on our results of operations and cash flows. Should operations cease and Dakota Access and ETCO not have sufficient funds to pay its expenses, we also could be required to support our 25% share of the ongoing expenses, including scheduled interest payments on the notes of approximately $20 million annually, in addition to the potential obligations under the CECU at March 31, 2024.

At March 31, 2024, the aggregate book value of our investments in Dakota Access and ETCO was $887 million.

On April 1, 2024, Dakota Access’ wholly owned subsidiary repaid $1 billion aggregate principal amount of its outstanding senior notes upon maturity. We funded our 25% share of the repayment, or $250 million, with a capital contribution of $171 million in March 2024 and $79 million of distributions we elected not to receive from Dakota Access in the first quarter of 2024. As a result of the debt repayment, on April 1, 2024, our share of the maximum potential equity contributions under the CECU decreased to approximately $215 million, and our share of scheduled interest payments on the notes that we could be required to support decreased to approximately $10 million annually.


10

CF United LLC (CF United)
On January 1, 2024, CF United, a retail marketing joint venture with operations primarily on the U.S. West Coast, completed the acquisition of another joint venture in which we had an ownership interest. In connection with this acquisition, the governing agreement for CF United was amended and restated. The amended and restated agreement included removal of a put option that required us to purchase our co-venturer’s interest based on a fixed multiple that was considered a variable interest. As a result of the removal of this put option, CF United ceased to be a variable interest entity (VIE) effective January 1, 2024. At March 31, 2024, we held a 50% voting interest and a 47% economic interest in CF United and the book value of our investment was $340 million.

OnCue Holdings, LLC (OnCue)
We hold a 50% interest in OnCue, a joint venture that owns and operates retail convenience stores. We fully guaranteed various debt agreements of OnCue and our co-venturer did not participate in the guarantees. This entity is considered a VIE because our debt guarantees resulted in OnCue not being exposed to all potential losses. We have determined we are not the primary beneficiary because we do not have the power to direct the activities that most significantly impact economic performance. At March 31, 2024, our maximum exposure to loss was $231 million, which represented the book value of our investment in OnCue of $168 million and guaranteed debt obligations of $63 million.


Note 8—Properties, Plants and Equipment

Our gross investment in PP&E and the associated accumulated depreciation and amortization (Accum. D&A) balances were as follows:

 Millions of Dollars
 March 31, 2024December 31, 2023
 Gross
PP&E
Accum.
D&A
  Net
PP&E
Gross
PP&E
Accum.
D&A
Net
PP&E
Midstream$26,207 4,665 21,542 26,124 4,382 21,742 
Chemicals      
Refining25,199 12,801 12,398 25,421 13,103 12,318 
Marketing and Specialties2,000 1,185 815 1,997 1,166 831 
Corporate and Other1,646 852 794 1,650 829 821 
$55,052 19,503 35,549 55,192 19,480 35,712 


In the first quarter of 2024, we recorded before-tax asset impairments totaling $163 million related to certain crude processing and logistics assets in California, of which $104 million was reported in our Refining segment and $59 million was reported in our Midstream segment.


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Note 9—Earnings Per Share

The numerator of basic earnings per share (EPS) is net income attributable to Phillips 66, adjusted for noncancelable dividends paid on unvested share-based employee awards during the vesting period (participating securities). The denominator of basic EPS is the sum of the daily weighted-average number of common shares outstanding during the periods presented and fully vested stock and unit awards that have not yet been issued as common stock. The numerator of diluted EPS is also based on net income attributable to Phillips 66, which is reduced by dividend equivalents paid on participating securities for which the dividends are more dilutive than the participation of the awards in the earnings of the periods presented. To the extent unvested stock, unit or option awards and vested unexercised stock options are dilutive, they are included with the weighted-average common shares outstanding in the denominator. Treasury stock is excluded from the denominator in both basic and diluted EPS.

 Three Months Ended
March 31
 20242023
BasicDilutedBasicDiluted
Amounts Attributed to Phillips 66 Common Stockholders (millions):
Net Income Attributable to Phillips 66$748 748 1,961 1,961 
Income allocated to participating securities(2)(1)(3)(1)
Net income available to common stockholders$746 747 1,958 1,960 
Weighted-average common shares outstanding (thousands):
427,165 428,959 462,870 464,810 
Effect of share-based compensation1,794 2,947 1,940 2,224 
Weighted-average common shares outstanding—EPS428,959 431,906 464,810 467,034 
Earnings Per Share of Common Stock (dollars)
$1.74 1.73 4.21 4.20 
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Note 10—Debt
Senior Notes and Term Loan Issuances and Repayments

Issuances

On February 28, 2024, Phillips 66 Company, a wholly owned subsidiary of Phillips 66, issued $1.5 billion aggregate principal amount of senior unsecured notes that are fully and unconditionally guaranteed by Phillips 66. The senior unsecured notes issuance consisted of:

$600 million aggregate principal amount of 5.250% Senior Notes due 2031 (2031 Notes).
$400 million aggregate principal amount of 5.300% Senior Notes due 2033 (Additional 2033 Notes).
$500 million aggregate principal amount of 5.650% Senior Notes due 2054 (2054 Notes).

Interest on the 2031 Notes and 2054 Notes is payable semi-annually on June 15 and December 15 of each year, commencing on June 15, 2024. Interest on the Additional 2033 Notes is payable semi-annually on June 30 and December 30 of each year, commencing on June 30, 2024.

On March 29, 2023, Phillips 66 Company, a wholly owned subsidiary of Phillips 66, issued $1.25 billion aggregate principal amount of senior unsecured notes that are fully and unconditionally guaranteed by Phillips 66. The senior unsecured notes issuance consisted of:

$750 million aggregate principal amount of 4.950% Senior Notes due December 2027 (2027 Notes).
$500 million aggregate principal amount of 5.300% Senior Notes due June 2033 (2033 Notes).

Repayments

On March 29, 2024, DCP LP early redeemed $300 million of its 5.375% Senior Notes due July 2025 at par with an aggregate principal amount of $825 million.

On March 4, 2024, Phillips 66 Company repaid $700 million of the $1.25 billion borrowed under its delayed draw term loan that matures in June 2026.

On February 15, 2024, upon maturity, Phillips 66 repaid its 0.900% senior notes due February 2024 with an aggregate principal amount of $800 million.

On March 15, 2023, DCP LP repaid its 3.875% senior unsecured notes due March 2023 with an aggregate principal amount of $500 million.


13

Credit Facilities and Commercial Paper

Phillips 66 and Phillips 66 Company

On February 28, 2024, we entered into a new $5 billion revolving credit agreement (the Facility) with Phillips 66 Company as the borrower and Phillips 66 as the guarantor and a scheduled maturity date of February 28, 2029. The Facility replaced our previous $5 billion revolving credit facility dated as of June 23, 2022, with Phillips 66 Company as the borrower and Phillips 66 as guarantor, and the previous revolving credit facility was terminated. The Facility contains customary covenants similar to the previous revolving credit facility, including a maximum consolidated net debt-to-capitalization ratio of 65% as of the last day of each fiscal quarter. The Facility has customary events of default, such as nonpayment of principal when due; nonpayment of interest, fees or other amounts after grace periods; and violation of covenants. We may at any time prepay outstanding borrowings under the Facility, in whole or in part, without premium or penalty. We have the option to increase the overall capacity to $6 billion, subject to certain conditions. We also have the option to extend the scheduled maturity of the Facility for up to two additional one-year terms, subject to, among other things, the consent of the lenders holding the majority of the commitments and of each lender extending its commitment. Outstanding borrowings under the Facility bear interest at either: (a) the adjusted term Secured Overnight Financing Rate (as described in the Facility) in effect from time to time plus the applicable margin; or (b) the reference rate (as described in the Facility) plus the applicable margin. The pricing levels for the commitment fee and interest-rate margins are determined based on the ratings in effect for our senior unsecured long-term debt from time to time. At March 31, 2024, and December 31, 2023, no amount had been drawn under our revolving credit facilities.

Phillips 66 also has a $5 billion uncommitted commercial paper program for short-term working capital needs that is supported by the Facility. Commercial paper maturities are contractually limited to less than one year. At March 31, 2024, $1.5 billion of commercial paper had been issued under this program. At December 31, 2023, no borrowings were outstanding under this program.

DCP Midstream Class A Segment

On March 15, 2024, DCP LP terminated its $1.4 billion credit facility and its accounts receivable securitization facility that previously provided for up to $350 million of borrowing capacity. At December 31, 2023, DCP LP had $25 million in borrowings outstanding under its $1.4 billion credit facility and $350 million of borrowings outstanding under its accounts receivable securitization facility, which were repaid during the three months ended March 31, 2024.


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Note 11—Guarantees

At March 31, 2024, we were liable for certain contingent obligations under various contractual arrangements as described below. We recognize a liability for the fair value of our obligation as a guarantor for newly issued or modified guarantees. Unless the carrying amount of the liability is noted below, we have not recognized a liability either because the guarantees were issued prior to December 31, 2002, or because the fair value of the obligation is immaterial. In addition, unless otherwise stated, we are not currently performing with any significance under the guarantees and expect future performance to be either immaterial or have only a remote chance of occurrence.

Lease Residual Value Guarantees
Under the operating lease agreement for our headquarters facility in Houston, Texas, we have the option, at the end of the lease term in September 2025, to request to renew the lease, purchase the facility or assist the lessor in marketing it for resale. We have a residual value guarantee associated with the operating lease agreement with a maximum potential future exposure of $514 million at March 31, 2024. We also have residual value guarantees associated with railcar, airplane and truck leases with maximum potential future exposures totaling $171 million. These leases have remaining terms of one to ten years.

Guarantees of Joint Venture Obligations
In March 2019, Phillips 66 Partners and its co-venturers in Dakota Access provided a CECU in conjunction with a senior unsecured notes offering. See Note 7—Investments, Loans and Long-Term Receivables, for additional information regarding Dakota Access and the CECU.

At March 31, 2024, we also had other guarantees outstanding primarily for our portion of certain joint venture debt, which have remaining terms of up to two years. The maximum potential future exposures under these guarantees were approximately $78 million. Payment would be required if a joint venture defaults on its obligations.

Indemnifications
Over the years, we have entered into various agreements to sell ownership interests in certain corporations, joint ventures and assets that gave rise to indemnifications. Agreements associated with these sales include indemnifications for taxes, litigation, environmental liabilities, permits and licenses, employee claims, and real estate tenant defaults. The provisions of these indemnifications vary greatly. The majority of these indemnifications are related to environmental issues, which generally have indefinite terms and potentially unlimited exposure. At March 31, 2024, and December 31, 2023, the carrying amount of recorded indemnifications was $155 million and $159 million, respectively.

We amortize the indemnification liability over the relevant time period, if one exists, based on the facts and circumstances surrounding each type of indemnity. In cases where the indemnification term is indefinite, we will reverse the liability when we have information to support the reversal. Although it is reasonably possible future payments may exceed amounts recorded, due to the nature of the indemnifications, it is not possible to make a reasonable estimate of the maximum potential amount of future payments. At March 31, 2024, and December 31, 2023, environmental accruals for known contamination of $110 million and $114 million, respectively, were included in the carrying amount of the recorded indemnifications noted above. These environmental accruals were primarily included in the “Asset retirement obligations and accrued environmental costs” line item on our consolidated balance sheet. For additional information about environmental liabilities, see Note 12—Contingencies and Commitments.

Indemnification and Release Agreement
In 2012, in connection with our separation from ConocoPhillips, we entered into an Indemnification and Release Agreement. This agreement governs the treatment between ConocoPhillips and us of matters relating to indemnification, insurance, litigation responsibility and management, and litigation document sharing and cooperation arising in connection with the separation. Generally, the agreement provides for cross indemnities principally designed to place financial responsibility for the obligations and liabilities of our business with us and financial responsibility for the obligations and liabilities of ConocoPhillips’ business with ConocoPhillips. The agreement also establishes procedures for handling claims subject to indemnification and related matters.
15

Note 12—Contingencies and Commitments

A number of lawsuits involving a variety of claims that arose in the ordinary course of business have been filed against us or are subject to indemnifications provided by us. We also may be required to remove or mitigate the effects on the environment of the placement, storage, disposal or release of certain chemical, mineral and petroleum substances at various active and inactive sites. We regularly assess the need for financial recognition or disclosure of these contingencies. In the case of all known contingencies (other than those related to income taxes), we accrue a liability when the loss is probable and the amount is reasonably estimable. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. We do not reduce these liabilities for potential insurance or third-party recoveries. If applicable, we accrue receivables for probable insurance or other third-party recoveries. In the case of income tax-related contingencies, we use a cumulative probability-weighted loss accrual in cases where sustaining a tax position is uncertain.

Based on currently available information, we believe it is remote that future costs related to known contingent liability exposures will exceed current accruals by an amount that would have a material adverse impact on our consolidated financial statements. As we learn new facts concerning contingencies, we reassess our position both with respect to accrued liabilities and other potential exposures. Estimates particularly sensitive to future changes include contingent liabilities recorded for environmental remediation, tax and legal matters. Estimated future environmental remediation costs are subject to change due to such factors as the uncertain magnitude of cleanup costs, the unknown time and extent of such remedial actions that may be required, and the determination of our liability in proportion to that of other potentially responsible parties. Estimated future costs related to tax and legal matters are subject to change as events evolve and as additional information becomes available during the administrative and litigation processes.

Environmental
We are subject to international, federal, state and local environmental laws and regulations. When we prepare our consolidated financial statements, we record accruals for environmental liabilities based on management’s best estimates, using information available at the time. We measure estimates and base contingent liabilities on currently available facts, existing technology and presently enacted laws and regulations, taking into account stakeholder and business considerations. When measuring contingent environmental liabilities, we also consider our prior experience in remediation of contaminated sites, other companies’ cleanup experience, and data released by the Environmental Protection Agency (EPA) or other organizations. We consider unasserted claims in our determination of environmental liabilities, and we accrue them in the period they are both probable and reasonably estimable.

Although liability for environmental remediation costs is generally joint and several for federal sites and frequently so for state sites, we are usually only one of many companies alleged to have liability at a particular site. Due to such joint and several liabilities, we could be responsible for all cleanup costs related to any site at which we have been designated as a potentially responsible party. We have been successful to date in sharing cleanup costs with other financially sound companies. Many of the sites for which we are potentially responsible are still under investigation by the EPA or the state agencies concerned. Prior to actual cleanup, those potentially responsible normally assess the site conditions, apportion responsibility and determine the appropriate remediation. In some instances, we may have no liability or may attain a settlement of liability. Where it appears that other potentially responsible parties may be financially unable to bear their proportional share, we consider this inability in estimating our potential liability, and we adjust our accruals accordingly. As a result of various acquisitions in the past, we assumed certain environmental obligations. Some of these environmental obligations are mitigated by indemnifications made by others for our benefit, although some of the indemnifications are subject to dollar and time limits.

We are currently participating in environmental assessments and cleanups at numerous federal Superfund and comparable state sites. After an assessment of environmental exposures for cleanup and other costs, we make accruals on an undiscounted basis (except those pertaining to sites acquired in a business combination, which we record on a discounted basis) for planned investigation and remediation activities for sites where it is probable future costs will be incurred and these costs can be reasonably estimated. At March 31, 2024, our total environmental accruals were $442 million, compared with $446 million at December 31, 2023. We expect to incur a substantial amount of these expenditures within the next 30 years. We have not reduced these accruals for possible insurance recoveries. In the future, we may be involved in additional environmental assessments, cleanups and proceedings.


16

Legal Proceedings
Our legal organization applies its knowledge, experience and professional judgment to the specific characteristics of our cases, employing a litigation management process to manage and monitor the legal proceedings against us. Our process facilitates the early evaluation and quantification of potential exposures in individual cases and enables the tracking of those cases that have been scheduled for trial and/or mediation. Based on professional judgment and experience in using these litigation management tools and available information about current developments in all our cases, our legal organization regularly assesses the adequacy of current accruals and determines if adjustment of existing accruals, or establishment of new accruals, is required.

Other Contingencies
We have contingent liabilities resulting from throughput agreements with pipeline and processing companies not associated with financing arrangements. Under these agreements, we may be required to provide any such company with additional funds through advances and penalties for fees related to throughput capacity not utilized.

At March 31, 2024, we had performance obligations secured by letters of credit and bank guarantees of $847 million related to various purchase and other commitments incident to the ordinary conduct of business.


Note 13—Derivatives and Financial Instruments

Derivative Instruments
We use financial and commodity-based derivative contracts to manage exposures to fluctuations in commodity prices, interest rates and foreign currency exchange rates, or to capture market opportunities. Because we do not apply hedge accounting for commodity derivative contracts, all realized and unrealized gains and losses from commodity derivative contracts are recognized in our consolidated statement of income. Gains and losses from derivative contracts held for trading not directly related to our physical business are reported net in the “Other income” line item on our consolidated statement of income. Cash flows from all our derivative activity for the periods presented appear in the operating section on our consolidated statement of cash flows.

Purchase and sales contracts with firm minimum notional volumes for commodities that are readily convertible to cash are recorded on our consolidated balance sheet as derivatives unless the contracts are eligible for, and we elect, the normal purchases and normal sales exception, whereby the contracts are recorded on an accrual basis. We generally apply the normal purchases and normal sales exception to eligible crude oil, refined petroleum product, NGL, natural gas, renewable feedstock, and power commodity contracts to purchase or sell quantities we expect to use or sell in the normal course of business. All other derivative instruments are recorded at fair value on our consolidated balance sheet. For further information regarding the fair value of derivatives, see Note 14—Fair Value Measurements.

Commodity Derivative Contracts—We sell into or receive supply from the worldwide crude oil, refined petroleum product, NGL, natural gas, renewable feedstock, and electric power markets, exposing our revenues, purchases, cost of operating activities and cash flows to fluctuations in the prices for these commodities. Generally, our policy is to remain exposed to the market prices of commodities; however, we use futures, forwards, swaps and options in various markets to balance physical systems, meet customer needs, manage price exposures on specific transactions, and do a limited amount of trading not directly related to our physical business, all of which may reduce our exposure to fluctuations in market prices. We also use the market knowledge gained from these activities to capture market opportunities such as moving physical commodities to more profitable locations, storing commodities to capture seasonal or time premiums, and blending commodities to capture quality upgrades.


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The following table indicates the consolidated balance sheet line items that include the fair values of commodity derivative assets and liabilities. The balances in the following table are presented on a gross basis, before the effects of counterparty and collateral netting. However, we have elected to present our commodity derivative assets and liabilities with the same counterparty on a net basis on our consolidated balance sheet when the legal right of offset exists.

 Millions of Dollars
 March 31, 2024December 31, 2023
Commodity DerivativesEffect of Collateral NettingNet Carrying Value Presented on the Balance SheetCommodity DerivativesEffect of Collateral NettingNet Carrying Value Presented on the Balance Sheet
 AssetsLiabilitiesAssetsLiabilities
Assets
Prepaid expenses and other current assets$190 (26) 164 2,148 (2,005) 143 
Other assets26 (13) 13 19 (2) 17 
Liabilities
Other accruals4,515 (4,818)171 (132)1,034 (1,127)18 (75)
Other liabilities and deferred credits3 (11) (8) (14) (14)
Total$4,734 (4,868)171 37 3,201 (3,148)18 71 

At March 31, 2024, there was $13 million of cash collateral paid that was not offset on our consolidated balance sheet. At December 31, 2023, there was $7 million of net cash collateral received that was not offset on our consolidated balance sheet.

The realized and unrealized gains (losses) incurred from commodity derivatives, and the line items where they appear on our consolidated statement of income, were:
 
 Millions of Dollars
 Three Months Ended
March 31
 2024 2023 
Sales and other operating revenues$(202)50 
Other income (loss)38 (14)
Purchased crude oil and products(256)137 
Net gain (loss) from commodity derivative activity$(420)173 


The following table summarizes our material net exposures resulting from outstanding commodity derivative contracts. These financial and physical derivative contracts are primarily used to manage price exposure on our underlying operations. The underlying exposures may be from nonderivative positions such as inventory volumes. Financial derivative contracts may also offset physical derivative contracts, such as forward purchase and sales contracts. The percentage of our derivative contract volumes expiring within the next 12 months was more than 90% at March 31, 2024, and December 31, 2023.
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 Open Position
Long / (Short)
 March 31
2024
December 31
2023
Commodity
Crude oil, refined petroleum products, NGL and renewable feedstocks (millions of barrels)
(47)(22)
Natural gas (billions of cubic feet)
(13)(25)


Credit Risk from Derivative and Financial Instruments
Financial instruments potentially exposed to concentrations of credit risk consist primarily of trade receivables and derivative contracts.

Our trade receivables result primarily from the sale of products from, or related to, our refinery operations and reflect a broad national and international customer base, which limits our exposure to concentrations of credit risk. The majority of these receivables have payment terms of 30 days or less. We continually monitor this exposure and the creditworthiness of the counterparties and recognize bad debt expense based on a probability assessment of credit loss. Generally, we do not require collateral to limit the exposure to loss; however, we will sometimes use letters of credit, prepayments or master netting arrangements to mitigate credit risk with counterparties that both buy from and sell to us, as these agreements permit the amounts owed by us to others to be offset against amounts owed to us.

The credit risk from our derivative contracts, such as forwards and swaps, derives from the counterparty to the transaction. Individual counterparty exposure is managed within predetermined credit limits and includes the use of cash-call margins when appropriate, thereby reducing the risk of significant nonperformance. We also use futures, swaps and option contracts that have a negligible credit risk because these trades are cleared with an exchange clearinghouse and subject to mandatory margin requirements, typically on a daily basis, until settled.

Certain of our derivative instruments contain provisions that require us to post collateral if the derivative exposure exceeds a threshold amount. We have contracts with fixed threshold amounts and other contracts with variable threshold amounts that are contingent on our credit ratings. The variable threshold amounts typically decline for lower credit ratings, while both the variable and fixed threshold amounts typically revert to zero if our credit ratings fall below investment grade. Cash is the primary collateral in all contracts; however, many contracts also permit us to post letters of credit as collateral.

The aggregate fair values of all derivative instruments with such credit-risk-related contingent features that were in a liability position were immaterial at March 31, 2024, and December 31, 2023.


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Note 14—Fair Value Measurements

Recurring Fair Value Measurements
We carry certain assets and liabilities at fair value, which we measure at the reporting date using the price that would be received to sell an asset or paid to transfer a liability (i.e., an exit price), and disclose the quality of these fair values based on the valuation inputs used in these measurements under the following hierarchy:

Level 1: Fair value measured with unadjusted quoted prices from an active market for identical assets or liabilities.
Level 2: Fair value measured either with: (1) adjusted quoted prices from an active market for similar assets or liabilities; or (2) other valuation inputs that are directly or indirectly observable.
Level 3: Fair value measured with unobservable inputs that are significant to the measurement.

We classify the fair value of an asset or liability based on the significance of its observable or unobservable inputs to the measurement. However, the fair value of an asset or liability initially reported as Level 3 will be subsequently reported as Level 2 if the unobservable inputs become inconsequential to its measurement or corroborating market data becomes available. Conversely, an asset or liability initially reported as Level 2 will be subsequently reported as Level 3 if corroborating market data becomes unavailable.

We used the following methods and assumptions to estimate the fair value of financial instruments:

Cash and cash equivalents—The carrying amount reported on our consolidated balance sheet approximates fair value.
Accounts and notes receivable—The carrying amount reported on our consolidated balance sheet approximates fair value.
Derivative instruments—The fair value of our exchange-traded contracts is based on quoted market prices obtained from the New York Mercantile Exchange, the Intercontinental Exchange or other exchanges, and is reported as Level 1 in the fair value hierarchy. When exchange-cleared contracts lack sufficient liquidity, or are valued using either adjusted exchange-provided prices or nonexchange quotes, we classify those contracts as Level 2 or Level 3 based on the degree to which inputs are observable.
Physical commodity forward purchase and sales contracts and over-the-counter (OTC) financial swaps are generally valued using forward quotes provided by brokers and price index developers, such as Platts and Oil Price Information Service. We corroborate these quotes with market data and classify the resulting fair values as Level 2. When forward market prices are not available, we estimate fair value using the forward price of a similar commodity, adjusted for the difference in quality or location. In certain less liquid markets or for longer-term contracts, forward prices are not as readily available. In these circumstances, physical commodity purchase and sales contracts and OTC swaps are valued using internally developed methodologies that consider historical relationships among various commodities that result in management’s best estimate of fair value. We classify these contracts as Level 3. Physical and OTC commodity options are valued using industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors and contractual prices for the underlying instruments, as well as other relevant economic measures. The degree to which these inputs are observable in the forward markets determines whether the options are classified as Level 2 or 3. We use a midmarket pricing convention (the midpoint between bid and ask prices). When appropriate, valuations are adjusted to reflect credit considerations, generally based on available market evidence.
When applicable, we determine the fair value of interest rate swaps based on observable market valuations for interest rate swaps that have notional amounts, terms and pay and reset frequencies similar to ours.
Rabbi trust assets—These deferred compensation investments are measured at fair value using unadjusted quoted prices available from national securities exchanges and are therefore categorized as Level 1 in the fair value hierarchy.
Investment in NOVONIX—Our investment in NOVONIX is measured at fair value using unadjusted quoted prices available from the Australian Securities Exchange and is therefore categorized as Level 1 in the fair value hierarchy.
20

Other investments—Includes other marketable securities with observable market prices.
Debt—The carrying amount of our floating-rate debt approximates fair value. The fair value of our fixed-rate debt is estimated primarily based on observable market prices.

The following tables display the fair value hierarchy for our financial assets and liabilities either accounted for or disclosed at fair value on a recurring basis. These values are determined by treating each contract as the fundamental unit of account; therefore, derivative assets and liabilities with the same counterparty are shown on a gross basis in the hierarchy sections of these tables, before the effects of counterparty and collateral netting. The following tables also reflect the effect of netting derivative assets and liabilities with the same counterparty for which we have the legal right of offset and collateral netting.

The carrying values and fair values by hierarchy of our financial assets and liabilities, either carried or disclosed at fair value, including any effects of counterparty and collateral netting, were:

 Millions of Dollars
 March 31, 2024
Fair Value HierarchyTotal Fair Value of Gross Assets & LiabilitiesEffect of Counterparty NettingEffect of Collateral NettingDifference in Carrying Value and Fair ValueNet Carrying Value Presented on the Balance Sheet
 Level 1Level 2Level 3
Commodity Derivative Assets
Exchange-cleared instruments$4,565 41  4,606 (4,553)  53 
Physical forward contracts 125 3 128 (4)  124 
Rabbi trust assets159   159 N/AN/A 159 
Investment in NOVONIX44   44 N/AN/A 44 
$4,768 166 3 4,937 (4,557)  380 
Commodity Derivative Liabilities
Exchange-cleared instruments$4,724 45  4,769 (4,553)(171) 45 
Physical forward contracts 98 1 99 (4)  95 
Floating-rate debt 840  840 N/AN/A 840 
Fixed-rate debt, excluding finance leases and software obligations 18,423  18,423 N/AN/A584 19,007 
$4,724 19,406 1 24,131 (4,557)(171)584 19,987 

 Millions of Dollars
 December 31, 2023
Fair Value HierarchyTotal Fair Value of Gross Assets & LiabilitiesEffect of Counterparty NettingEffect of Collateral NettingDifference in Carrying Value and Fair ValueNet Carrying Value Presented on the Balance Sheet
 Level 1Level 2Level 3
Commodity Derivative Assets
Exchange-cleared instruments$3,075 54  3,129 (3,039)  90 
OTC instruments 1  1    1 
Physical forward contracts 70 1 71 (2)  69 
Rabbi trust assets155   155 N/AN/A 155 
Investment in NOVONIX39   39 N/AN/A 39 
$3,269 125 1 3,395 (3,041)  354 
Commodity Derivative Liabilities
Exchange-cleared instruments$3,057 41  3,098 (3,039)(18) 41 
Physical forward contracts 50  50 (2)  48 
Floating-rate debt 1,915  1,915 N/AN/A 1,915 
Fixed-rate debt, excluding finance leases and software obligations 16,718  16,718 N/AN/A408 17,126 
$3,057 18,724  21,781 (3,041)(18)408 19,130 

21

The rabbi trust assets and investment in NOVONIX are recorded in the “Investments and long-term receivables” line item, and floating-rate and fixed-rate debt are recorded in the “Short-term debt” and “Long-term debt” line items on our consolidated balance sheet. See Note 13—Derivatives and Financial Instruments, for information regarding where the assets and liabilities related to our commodity derivatives are recorded on our consolidated balance sheet.


Note 15—Pension and Postretirement Plans

The components of net periodic benefit cost for the three months ended March 31, 2024 and 2023, were as follows:
 Millions of Dollars
 Pension BenefitsOther Benefits
 202420232024 2023 
U.S.Int’l.U.S.Int’l.
Components of Net Periodic Benefit Cost
Three Months Ended March 31
Service cost$29 3 27 3 1 1 
Interest cost28 8 29 8 2 2 
Expected return on plan assets(38)(11)(31)(10)  
Amortization of net actuarial loss (gain)3  3 (1)(1)(2)
Settlements1  10    
Net periodic benefit cost*$23  38  2 1 
* Included in the “Operating expenses” and “Selling, general and administrative expenses” line items on our consolidated statement of income.


During the three months ended March 31, 2024, we contributed $5 million to our U.S. pension and other postretirement benefit plans and $1 million to our international pension plans. We currently expect to make additional contributions of approximately $70 million to our U.S. pension and other postretirement benefit plans and approximately $4 million to our international pension plans during the remainder of 2024. Cash contributions are included in the “Other” line item of the “Cash Flows From Operating Activities” section of our consolidated statement of cash flows.
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Note 16—Accumulated Other Comprehensive Loss

Changes in the balances of each component of accumulated other comprehensive loss were as follows:

 Millions of Dollars
 Defined Benefit PlansForeign Currency TranslationHedgingAccumulated Other Comprehensive Loss
December 31, 2023$(120)(157)(5)(282)
Other comprehensive income (loss) before reclassifications1 (32) (31)
Amounts reclassified from accumulated other
   comprehensive loss
Defined benefit plans*
Amortization of net actuarial loss and settlements1   1 
Foreign currency translation    
Hedging    
Net current period other comprehensive income (loss)2 (32) (30)
March 31, 2024$(118)(189)(5)(312)
December 31, 2022$(122)(336)(2)(460)
Other comprehensive income before reclassifications2 77  79 
Amounts reclassified from accumulated other comprehensive loss
Defined benefit plans*
Amortization of net actuarial loss and settlements8 — — 8 
Foreign currency translation— — — — 
Hedging— — — — 
Net current period other comprehensive income10 77  87 
March 31, 2023$(112)(259)(2)(373)
* Included in the computation of net periodic benefit cost. See Note 15—Pension and Postretirement Plans, for additional information.

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Note 17—Related Party Transactions

Significant transactions with related parties were:

 Millions of Dollars
 Three Months Ended
March 31
 2024 2023 
Operating revenues and other income (a)$1,133 1,304 
Purchases (b)5,231 3,699 
Operating expenses and selling, general and administrative expenses (c)69 72 

(a)We sold NGL, other petrochemical feedstocks and solvents to Chevron Phillips Chemical Company LLC (CPChem), gas oil and hydrogen feedstocks to Excel Paralubes LLC (Excel Paralubes), and refined petroleum products to several of our equity affiliates in the M&S segment, including OnCue and CF United. We also sold certain feedstocks and intermediate products to WRB and acted as an agent for WRB in supplying crude oil and other feedstocks for a fee. In addition, we charged several of our equity affiliates, including CPChem, for the use of common facilities, such as steam generators, waste and water treaters and warehouse facilities.

(b)We purchased crude oil, refined petroleum products, NGL and solvents from WRB. We also purchased natural gas and NGL from CPChem, as well as other feedstocks from various equity affiliates, for use in our refinery and fractionation processes. In addition, we purchased base oils and fuel products from Excel Paralubes for use in our specialty and refining businesses. We paid NGL fractionation fees to CPChem. We also paid fees to various pipeline equity affiliates for transporting crude oil, refined petroleum products and NGL.

(c)We paid consignment fees to CF United, and utility and processing fees to various equity affiliates.


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Note 18—Segment Disclosures and Related Information

Our operating segments are:

1)Midstream—Provides crude oil and refined petroleum product transportation, terminaling and processing services, as well as natural gas and NGL transportation, storage, fractionation, gathering, processing and marketing services, mainly in the United States. This segment also includes our 16% investment in NOVONIX.

2)Chemicals—Consists of our 50% equity investment in CPChem, which manufactures and markets petrochemicals and plastics on a worldwide basis.

3)Refining—Refines crude oil and other feedstocks into petroleum products, such as gasoline, distillates and aviation fuels, as well as renewable fuels. This segment includes 12 refineries in the United States and Europe.

4)Marketing and Specialties—Purchases for resale and markets refined petroleum products and renewable fuels, mainly in the United States and Europe. In addition, this segment includes the manufacturing and marketing of base oils and lubricants.

Corporate and Other includes general corporate overhead, interest income, interest expense, our investment in research of new technologies, business transformation restructuring costs, and various other corporate activities. Corporate assets include all cash, cash equivalents and income tax-related assets. See Note 21—Restructuring for additional information regarding restructuring costs.

Intersegment sales are at prices that we believe approximate market.

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Analysis of Results by Operating Segment

 Millions of Dollars
 Three Months Ended
March 31
 2024 2023 
Sales and Other Operating Revenues*
Midstream
Total sales$4,841 5,292 
Intersegment eliminations(717)(695)
Total Midstream4,124 4,597 
Chemicals  
Refining
Total sales22,130 22,341 
Intersegment eliminations(13,001)(14,095)
Total Refining9,129 8,246 
Marketing and Specialties
Total sales23,176 22,399 
Intersegment eliminations(628)(855)