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Phillips 66 Reports Fourth-Quarter Results and Announces Next Phase of Strategic Initiatives

1. Fourth-quarter earnings fell sharply to $8 million from $346 million. 2. Refining segment posted a significant pre-tax loss of $775 million. 3. Phillips 66 targets over 50% cash flow return to shareholders. 4. Acquisition of EPIC's NGL business boosts earnings potential. 5. New strategic targets set through 2027 focus on growth and debt reduction.

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Why Bearish?

The significant loss in earnings and refining segment downturn may lower investor confidence. Past earnings misses have negatively influenced stock prices and market perception.

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Earnings performance serves as a critical indicator of company health and stock value impact.

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Immediate market reactions to earnings reports typically create short-term volatility. Prior earnings announcements have resulted in quick price adjustments.

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EPICPSX
HOUSTON--(BUSINESS WIRE)--Phillips 66 (NYSE: PSX), a leading integrated downstream energy provider, announced fourth-quarter earnings. “During the fourth quarter, we achieved our strategic priority targets for shareholder distributions and asset dispositions,” said Mark Lashier, chairman and CEO. “We also delivered on our goal of improving Refining performance by continuing to run above industry-average crude utilization, setting record clean product yields and achieving our targeted cost reductions of $1 per barrel. “In support of our Midstream wellhead-to-market strategy, we recently announced an agreement to acquire EPIC’s NGL business, bolstering our Permian and Gulf Coast footprint,” said Lashier. “Upon closing, these assets will be accretive to earnings and highly integrated with our existing infrastructure, providing additional opportunities to enhance returns and shareholder value.” Lashier added, “Building on our successes, I am pleased to announce that we have set new financial and operational targets that prioritize debt reduction, a lowered cost structure and EBITDA growth. Supported by world-class operations, we are committed to returning over 50% of operating cash flow to shareholders.” On behalf of the Board of Directors, Glenn Tilton, lead independent director, remarked, “2024 was a pivotal year for Phillips 66. The team executed well on an ambitious set of strategic priorities, substantially improving the company’s competitiveness, and is well positioned to successfully deliver on a new set of targets through 2027.” Financial Results Summary (in millions of dollars, except as indicated) 4Q 2024 3Q 2024 Earnings $ 8 346 Adjusted Earnings (Loss)1 (61) 859 Adjusted EBITDA1 1,130 1,998 Earnings (Loss) Per Share Earnings Per Share - Diluted 0.01 0.82 Adjusted Earnings (Loss) Per Share - Diluted1 (0.15) 2.04 Cash Flow From Operations 1,198 1,132 Cash Flow From Operations, Excluding Working Capital1 901 1,513 Capital Expenditures & Investments2 506 358 Return of Capital to Shareholders 1,119 1,277 Repurchases of common stock 647 800 Dividends paid on common stock 472 477 Cash 1,738 1,637 Debt 20,062 19,998 Debt-to-capital ratio 41% 40% Net debt-to-capital ratio1 39% 38% 1Represents a non-GAAP financial measure. Reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure are included within this release. 2 Excludes net acquisitions of $58 million and $567 million in the fourth and third quarters of 2024, respectively, and purchases of government obligations of $1.1 billion in the third quarter of 2024. Segment Financial and Operating Highlights (in millions of dollars, except as indicated) 4Q 2024 3Q 2024 Change Earnings (Loss)1 $ 8 346 (338) Midstream 673 644 29 Chemicals 107 342 (235) Refining (775) (108) (667) Marketing and Specialties 252 (22) 274 Renewable Fuels 28 (116) 144 Corporate and Other (298) (327) 29 Income tax (expense) benefit 38 (44) 82 Noncontrolling interests (17) (23) 6 Adjusted Earnings (Loss)1,2 $ (61) 859 (920) Midstream 708 672 36 Chemicals 72 342 (270) Refining (759) (67) (692) Marketing and Specialties 185 583 (398) Renewable Fuels 28 (116) 144 Corporate and Other (294) (327) 33 Income tax (expense) benefit 16 (205) 221 Noncontrolling interests (17) (23) 6 Adjusted EBITDA2 $ 1,130 1,998 (868) Midstream 938 892 46 Chemicals 209 466 (257) Refining (298) 188 (486) Marketing and Specialties 307 656 (349) Renewable Fuels 50 (92) 142 Corporate and Other (76) (112) 36 Operating Highlights Pipeline Throughput - Y-Grade to Market (MB/D)3 759 762 (3) Chemicals Global O&P Capacity Utilization 98% 98% —% Refining Turnaround Expense 123 137 (14) Realized Margin ($/BBL)2 6.08 8.31 (2.23) Crude Capacity Utilization 94% 94% —% Clean Product Yield 88% 87% 1% Renewable Fuels Produced (MB/D) 42 44 (2) 1 Segment reporting is pre-tax. 2 Represents a non-GAAP financial measure. Reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure are included within this release. 3 Represents volumes delivered to major fractionation hubs, including Mont Belvieu, Sweeny and Conway. Includes 100% of DCP Midstream Class A Segment and Phillips 66's direct interest in DCP Sand Hills Pipeline, LLC and DCP Southern Hills Pipeline, LLC Fourth-Quarter 2024 Financial Results Reported earnings were $8 million for the fourth quarter of 2024 versus $346 million in the third quarter. Fourth-quarter earnings included pre-tax special item adjustments of $67 million in the Marketing and Specialties segment, $35 million in the Chemicals segment, $(35) million in the Midstream segment, $(16) million in the Refining segment, and $(4) million impacting the Corporate and Other segment. Adjusted losses for the fourth quarter were $61 million versus earnings of $859 million in the third quarter. Midstream fourth-quarter 2024 adjusted pre-tax income increased compared with the third quarter mainly due to higher NGL margins and volumes. Chemicals adjusted pre-tax income decreased mainly due to lower margins, as well as higher turnaround and maintenance costs. Refining adjusted pre-tax loss increased primarily due to a decline in realized margins largely driven by lower market crack spreads and accelerated depreciation associated with the planned ceasing of operations at the Los Angeles Refinery, partially offset by a higher clean product yield. Marketing and Specialties adjusted pre-tax income decreased primarily due to seasonally lower margins. Renewable Fuels pre-tax results increased primarily due to higher margins at the Rodeo Complex and stronger international results. Corporate and Other adjusted pre-tax loss decreased mainly due to lower net interest expense and employee-related costs, partially offset by depreciation expense. As of Dec. 31, 2024, the company had $1.7 billion of cash and cash equivalents and $4.6 billion of committed capacity available under credit facilities. Strategic Priorities Update Phillips 66 successfully delivered on its strategic priorities first announced in October 2022. The company remains committed to leveraging its integrated portfolio to enhance long-term shareholder value and is announcing its next phase of priorities through 2027. Highlights include: Delivering shareholder returns by returning greater than 50% of operating cash flow to shareholders; Executing world-class operations by achieving 2% higher than industry-average crude utilization and targeting annual adjusted controllable costs of $5.50 per barrel in Refining, excluding adjusted turnaround expense; Delivering disciplined growth and returns by growing Midstream and Chemicals mid-cycle adjusted EBITDA $1 billion in total by 2027; and Maintaining financial strength and flexibility by reducing total debt to $17 billion. Additional details will be covered in our investor webcast. Investor Webcast Members of Phillips 66 executive management will host a webcast at noon ET to provide an update on the company’s strategic initiatives and discuss the company’s fourth-quarter performance. To access the webcast and view related presentation materials, go to phillips66.com/investors and click on “Events & Presentations.” For detailed supplemental information, go to phillips66.com/supplemental. About Phillips 66 Phillips 66 (NYSE: PSX) is a leading integrated downstream energy provider that manufactures, transports and markets products that drive the global economy. The company’s portfolio includes Midstream, Chemicals, Refining, Marketing and Specialties, and Renewable Fuels businesses. Headquartered in Houston, Phillips 66 has employees around the globe who are committed to safely and reliably providing energy and improving lives while pursuing a lower-carbon future. For more information, visit phillips66.com or follow @Phillips66Co on LinkedIn. Use of Non-GAAP Financial Information—This news release includes the terms “adjusted earnings (loss),” “adjusted pre-tax income (loss),” “adjusted EBITDA,” “adjusted earnings (loss) per share,” “refining realized margin per barrel,” “cash from operations, excluding working capital,” and “net debt-to-capital ratio.” These are non-GAAP financial measures that are included to help facilitate comparisons of operating performance across periods and to help facilitate comparisons with other companies in our industry. Where applicable, these measures exclude items that do not reflect the core operating results of our businesses in the current period or other adjustments to reflect how management analyzes results. Reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure are included within this release. References in the release to earnings refer to net income attributable to Phillips 66. References to run-rate business transformation savings include cost savings and other benefits that will be captured in the sales and other operating revenues impacting gross margin; purchased crude oil and products costs impacting gross margin; operating expenses; selling, general and administrative expenses; and equity in earnings of affiliates lines on our consolidated statement of income when realized. Run-rate savings include run-rate sustaining capital savings. Run-rate sustaining capital savings include savings that will be captured in the capital expenditures and investments on our consolidated statement of cash flows when realized. Basis of Presentation— Effective April 1, 2024, we changed the internal financial information reviewed by our chief executive officer to evaluate performance and allocate resources to our operating segments. This included changes in the composition of our operating segments, as well as measurement changes for certain activities between our operating segments. The primary effects of this realignment included establishment of a Renewable Fuels operating segment, which includes renewable fuels activities and assets historically reported in our Refining, Marketing and Specialties (M&S), and Midstream segments; change in method of allocating results for certain Gulf Coast distillate export activities from our M&S segment to our Refining segment; reclassification of certain crude oil and international clean products trading activities between our M&S segment and our Refining segment; and change in reporting of our investment in NOVONIX from our Midstream segment to Corporate and Other. Accordingly, prior period results have been recast for comparability. In the third quarter of 2024, we began presenting the line item “Capital expenditures and investments” on our consolidated statement of cash flows exclusive of acquisitions, net of cash acquired. Accordingly, prior period information has been reclassified for comparability. Cautionary Statement for the Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995—This news release contains forward-looking statements within the meaning of the federal securities laws relating to Phillips 66’s operations, strategy and performance. Words such as “anticipated,” “estimated,” “expected,” “planned,” “scheduled,” “targeted,” “believe,” “continue,” “intend,” “will,” “would,” “objective,” “goal,” “project,” “efforts,” “strategies” and similar expressions that convey the prospective nature of events or outcomes generally indicate forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements included in this news release are based on management’s expectations, estimates and projections as of the date they are made. These statements are not guarantees of future events or performance, and you should not unduly rely on them as they involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Factors that could cause actual results or events to differ materially from those described in the forward-looking statements include: changes in governmental policies or laws that relate to our operations, including regulations that seek to limit or restrict refining, marketing and midstream operations or regulate profits, pricing, or taxation of our products or feedstocks, or other regulations that restrict feedstock imports or product exports; our ability to timely obtain or maintain permits necessary for projects; fluctuations in NGL, crude oil, refined petroleum, renewable fuels and natural gas prices, and refining, marketing and petrochemical margins; the effects of any widespread public health crisis and its negative impact on commercial activity and demand for refined petroleum or renewable fuels products; changes to worldwide government policies relating to renewable fuels and greenhouse gas emissions that adversely affect programs including the renewable fuel standards program, low carbon fuel standards and tax credits for renewable fuels; potential liability from pending or future litigation; liability for remedial actions, including removal and reclamation obligations under existing or future environmental regulations; unexpected changes in costs for constructing, modifying or operating our facilities; our ability to successfully complete, or any material delay in the completion of, any asset disposition, acquisition, shutdown or conversion that we have announced or may pursue, including receipt of any necessary regulatory approvals or permits related thereto; unexpected difficulties in manufacturing, refining or transporting our products; the level and success of drilling and production volumes around our midstream assets; risks and uncertainties with respect to the actions of actual or potential competitive suppliers and transporters of refined petroleum products, renewable fuels or specialty products; lack of, or disruptions in, adequate and reliable transportation for our products; failure to complete construction of capital projects on time or within budget; our ability to comply with governmental regulations or make capital expenditures to maintain compliance with laws; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets, which may also impact our ability to repurchase shares and declare and pay dividends; potential disruption of our operations due to accidents, weather events, including as a result of climate change, acts of terrorism or cyberattacks; general domestic and international economic and political developments, including armed hostilities (such as the Russia-Ukraine war), expropriation of assets, and other diplomatic developments; international monetary conditions and exchange controls; changes in estimates or projections used to assess fair value of intangible assets, goodwill and property and equipment and/or strategic decisions with respect to our asset portfolio that cause impairment charges; investments required, or reduced demand for products, as a result of environmental rules and regulations; changes in tax, environmental and other laws and regulations (including alternative energy mandates); political and societal concerns about climate change that could result in changes to our business or increase expenditures, including litigation-related expenses; the operation, financing and distribution decisions of equity affiliates we do not control; and other economic, business, competitive and/or regulatory factors affecting Phillips 66’s businesses generally as set forth in our filings with the Securities and Exchange Commission. Phillips 66 is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. Earnings (Loss) Millions of Dollars 2024 2023 4Q 3Q Year 4Q Year Midstream $ 673 644 2,638 759 2,819 Chemicals 107 342 876 106 600 Refining (775 ) (108 ) (365 ) 859 5,340 Marketing and Specialties 252 (22 ) 1,011 396 1,897 Renewable Fuels 28 (116 ) (198 ) (11 ) 153 Corporate and Other (298 ) (327 ) (1,287 ) (348 ) (1,340 ) Pre-Tax Income (Loss) (13 ) 413 2,675 1,761 9,469 Less: Income tax expense (benefit) (38 ) 44 500 476 2,230 Less: Noncontrolling interests 17 23 58 25 224 Phillips 66 $ 8 346 2,117 1,260 7,015 Adjusted Earnings (Loss) Millions of Dollars 2024 2023 4Q 3Q Year 4Q Year Midstream $ 708 672 2,746 757 2,672 Chemicals 72 342 841 106 600 Refining (759 ) (67 ) (211 ) 842 5,367 Marketing and Specialties 185 583 1,490 396 1,897 Renewable Fuels 28 (116 ) (198 ) (11 ) 153 Corporate and Other (294 ) (327 ) (1,283 ) (298 ) (1,110 ) Pre-Tax Income (Loss) (60 ) 1,087 3,385 1,792 9,579 Less: Income tax expense (benefit) (16 ) 205 693 405 2,173 Less: Noncontrolling interests 17 23 88 25 243 Phillips 66 $ (61 ) 859 2,604 1,362 7,163 Millions of Dollars Except as Indicated 2024 2023 4Q 3Q Year 4Q Year Reconciliation of Consolidated Earnings to Adjusted Earnings (Loss) Consolidated Earnings $ 8 346 2,117 1,260 7,015 Pre-tax adjustments: Certain tax impacts (9 ) — (9 ) (19 ) (19 ) Impairments1 35 28 450 — — Net gain on asset dispositions2 (67 ) — (305 ) — (123 ) Change in inventory method for acquired business — — — — (46 ) Winter-storm-related costs (recovery) (35 ) — (35 ) — — Los Angeles Refinery cessation costs3 7 41 48 — — Legal accrual4 22 605 627 — 30 Legal settlement — — (66 ) — — Business transformation restructuring costs — — — 50 177 Loss on early redemption of DCP debt — — — — 53 DCP integration restructuring costs — — — — 38 Tax impact of adjustments5 9 (161 ) (162 ) (12 ) (26 ) Other tax impacts (31 ) — (31 ) 83 83 Noncontrolling interests — — (30 ) — (19 ) Adjusted earnings (loss) $ (61 ) 859 2,604 1,362 7,163 Earnings per share of common stock (dollars) $ 0.01 0.82 4.99 2.86 15.48 Adjusted earnings (loss) per share of common stock (dollars)6 $ (0.15 ) 2.04 6.15 3.09 15.81 Reconciliation of Segment Pre-Tax Income (Loss) to Adjusted Pre-Tax Income (Loss)   Midstream Pre-Tax Income $ 673 644 2,638 759 2,819 Pre-tax adjustments: Impairments1 35 28 346 — — Certain tax impacts — — — (2 ) (2 ) Net gain on asset disposition — — (238 ) — (137 ) Change in inventory method for acquired business — — — — (46 ) DCP integration restructuring costs — — — — 38 Adjusted pre-tax income $ 708 672 2,746 757 2,672 Chemicals Pre-Tax Income $ 107 342 876 106 600 Pre-tax adjustments: Winter-storm-related costs (recovery) (35 ) — (35 ) — — Adjusted pre-tax income $ 72 342 841 106 600 Refining Pre-Tax Income (Loss) $ (775 ) (108 ) (365 ) 859 5,340 Pre-tax adjustments: Impairments1 — — 104 — — Los Angeles Refinery cessation costs3 3 41 44 — — Certain tax impacts (9 ) — (9 ) (17 ) (17 ) Net loss on asset disposition — — — — 14 Legal accrual 22 — 22 — 30 Legal settlement — — (7 ) — — Adjusted pre-tax income (loss) $ (759 ) (67 ) (211 ) 842 5,367 Marketing and Specialties Pre-Tax Income (Loss) $ 252 (22 ) 1,011 396 1,897 Pre-tax adjustments: Legal accrual4 — 605 605 — — Net gain on asset disposition2 (67 ) — (67 ) — — Legal settlement — — (59 ) — — Adjusted pre-tax income $ 185 583 1,490 396 1,897 Renewable Fuels Pre-Tax Income (Loss) $ 28 (116 ) (198 ) (11 ) 153 Pre-tax adjustments: None — — — — — Adjusted pre-tax income (loss) $ 28 (116 ) (198 ) (11 ) 153 Corporate and Other Pre-Tax Loss $ (298 ) (327 ) (1,287 ) (348 ) (1,340 ) Pre-tax adjustments: Business transformation restructuring costs — — — 50 177 Loss on early redemption of DCP debt — — — — 53 Los Angeles Refinery cessation costs3 4 — 4 — — Adjusted pre-tax loss $ (294 ) (327 ) (1,283 ) (298 ) (1,110 ) 1 Impairments primarily related to certain gathering and processing assets in the Midstream segment, as well as certain crude oil processing and logistics assets in California, reported in the Refining segment. 2 In connection with the asset sale of our 49% non-operated equity interest in Coop Mineraloel AG closing early 2025, a before-tax unrealized gain was recognized from a foreign currency derivative in the Marketing & Specialties segment. 3 Cessation costs include pre-tax charges for severance costs. 4 Third-quarter legal accrual primarily related to ongoing litigation. 5 We generally tax effect taxable U.S.-based special items using a combined federal and state statutory income tax rate of approximately 24%. Taxable special items attributable to foreign locations likewise use a local statutory income tax rate. Nontaxable events reflect zero income tax. These events include, but are not limited to, most goodwill impairments, transactions legislatively exempt from income tax, transactions related to entities for which we have made an assertion that the undistributed earnings are permanently reinvested, or transactions occurring in jurisdictions with a valuation allowance. 6 YTD 2024, Q4 2024, Q3 2024 and Q4 2023 are based on adjusted weighted-average diluted shares of 422,538 thousand, 411,687 thousand, 419,827 thousand and 440,582 thousand, respectively. Other periods are based on the same weighted-average diluted shares outstanding as that used in the GAAP diluted earnings per share calculation. Income allocated to participating securities, if applicable, in the adjusted earnings per share calculation is the same as that used in the GAAP diluted earnings per share calculation. Millions of Dollars Except as Indicated 2024 4Q 3Q Reconciliation of Consolidated Net Income to Adjusted EBITDA Net Income $ 25 369 Plus: Income tax expense (38 ) 44 Net interest expense 168 191 Depreciation and amortization 819 543 Phillips 66 EBITDA $ 974 1,147 Special Item Adjustments (pre-tax): Certain tax impacts (9 ) — Impairments 35 28 Winter-storm-related costs (recovery) (35 ) — Net gain on asset disposition (67 ) — Los Angeles Refinery cessation costs 7 41 Legal accrual 22 605 Total Special Item Adjustments (pre-tax) (47 ) 674 Change in Fair Value of NOVONIX Investment 1 — Phillips 66 EBITDA, Adjusted for Special Items and Change in Fair Value of NOVONIX Investment $ 928 1,821 Other Adjustments (pre-tax): Proportional share of selected equity affiliates income taxes 17 24 Proportional share of selected equity affiliates net interest 14 12 Proportional share of selected equity affiliates depreciation and amortization 209 188 Adjusted EBITDA attributable to noncontrolling interests (38 ) (47 ) Phillips 66 Adjusted EBITDA $ 1,130 1,998 Reconciliation of Segment Income before Income Taxes to Adjusted EBITDA Midstream Income before income taxes $ 673 644 Plus: Depreciation and amortization 234 233 Midstream EBITDA $ 907 877 Special Item Adjustments (pre-tax): Impairments 35 28 Midstream EBITDA, Adjusted for Special Items $ 942 905 Other Adjustments (pre-tax): Proportional share of selected equity affiliates income taxes 3 5 Proportional share of selected equity affiliates net interest 3 3 Proportional share of selected equity affiliates depreciation and amortization 28 26 Adjusted EBITDA attributable to noncontrolling interests (38 ) (47 ) Midstream Adjusted EBITDA $ 938 892 Chemicals Income before income taxes $ 107 342 Plus: None — — Chemicals EBITDA $ 107 342 Special Item Adjustments (pre-tax): Winter-storm-related costs (recovery) (35 ) — Chemicals EBITDA, Adjusted for Special Items $ 72 342 Other Adjustments (pre-tax): Proportional share of selected equity affiliates income taxes 11 13 Proportional share of selected equity affiliates net interest — (2 ) Proportional share of selected equity affiliates depreciation and amortization 126 113 Chemicals Adjusted EBITDA $ 209 466 Refining Loss before income taxes $ (775 ) (108 ) Plus: Depreciation and amortization 435 230 Refining EBITDA $ (340 ) 122 Special Item Adjustments (pre-tax): Certain tax impacts (9 ) — Los Angeles Refinery cessation costs 3 41 Legal accrual 22 — Refining EBITDA, Adjusted for Special Items $ (324 ) 163 Other Adjustments (pre-tax): Proportional share of selected equity affiliates income taxes (1 ) (1 ) Proportional share of selected equity affiliates net interest — (1 ) Proportional share of selected equity affiliates depreciation and amortization 27 27 Refining Adjusted EBITDA $ (298 ) 188 Marketing and Specialties Income (loss) before income taxes $ 252 (22 ) Plus: Depreciation and amortization 79 32 Marketing and Specialties EBITDA $ 331 10 Special Item Adjustments (pre-tax): Legal accrual — 605 Net gain on asset disposition (67 ) — Marketing and Specialties EBITDA, Adjusted for Special Items $ 264 615 Other Adjustments (pre-tax): Proportional share of selected equity affiliates income taxes 4 7 Proportional share of selected equity affiliates net interest 11 12 Proportional share of selected equity affiliates depreciation and amortization 28 22 Marketing and Specialties Adjusted EBITDA $ 307 656 Renewable Fuels Income (loss) before income taxes $ 28 (116 ) Plus: Depreciation and amortization 22 24 Renewable Fuels EBITDA $ 50 (92 ) Special Item Adjustments (pre-tax): None — — Renewable Fuels EBITDA, Adjusted for Special Items $ 50 (92 ) Corporate and Other Loss before income taxes $ (298 ) (327 ) Plus: Net interest expense 168 191 Depreciation and amortization 49 24 Corporate and Other EBITDA $ (81 ) (112 ) Special Item Adjustments (pre-tax): Los Angeles Refinery cessation costs 4 — Total Special Item Adjustments (pre-tax) 4 — Change in Fair Value of NOVONIX Investment 1 — Corporate EBITDA, Adjusted for Special Items and Change in Fair Value of NOVONIX Investment $ (76 ) (112 ) Millions of Dollars Except as Indicated December 31, 2024 Debt-to-Capital Ratio Total Debt $ 20,062 Total Equity 28,463 Debt-to-Capital Ratio 41 % Total Cash 1,738 Net Debt-to-Capital Ratio 39 % Millions of Dollars December 31, 2024 Reconciliation of Net Cash Provided by Operating Activities to Operating Cash Flow, Excluding Working Capital Net Cash Provided by Operating Activities $ 1,198 Less: Net Working Capital Changes 297 Operating Cash Flow, Excluding Working Capital $ 901 Millions of Dollars Except as Indicated 2024 4Q 3Q Reconciliation of Refining Loss Before Income Taxes to Realized Refining Margins Loss before income taxes $ (775 ) (108 ) Plus: Taxes other than income taxes 92 100 Depreciation, amortization and impairments 436 230 Selling, general and administrative expenses 60 60 Operating expenses 968 922 Equity in earnings of affiliates 79 12 Other segment expense, net 58 (4 ) Proportional share of refining gross margins contributed by equity affiliates 132 193 Special items: Certain tax impacts (9 ) — Realized refining margins $ 1,041 1,405 Total processed inputs (thousands of barrels) 147,880 145,440 Adjusted total processed inputs (thousands of barrels)* 171,031 168,951 Loss before income taxes (dollars per barrel)** $ (5.24 ) (0.74 ) Realized refining margins (dollars per barrel)*** $ 6.08 8.31 *Adjusted total processed inputs include our proportional share of processed inputs of an equity affiliate. **Income before income taxes divided by total processed inputs. ***Realized refining margins per barrel, as presented, are calculated using the underlying realized refining margin amounts, in dollars, divided by adjusted total processed inputs, in barrels. As such, recalculated per barrel amounts using the rounded margins and barrels presented may differ from the presented per barrel amounts.

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