Phillips 66 announced the permanent cessation of fuel production at its Los Angeles Refinery, its sole remaining refinery in California. A filing with the California Employment Development Department indicates the company will lay off approximately half of the facility’s workforce, equating to roughly 400 employees. The decision follows an accelerated depreciation charge of $239 million taken in Q4 2025 related to the refinery, reflecting the company’s shift away from higher-cost coastal refining assets toward its larger Midwestern and Gulf Coast complexes.

In the quarter ended December 31, 2025, Phillips 66 delivered adjusted earnings of $2.47 per share, exceeding consensus forecasts by $0.31. Revenue of $36.3 billion topped expectations by over $4 billion, driven by higher realized refining margins and robust throughput. GAAP net income was $2.9 billion, or $7.17 per share, which included the Los Angeles depreciation charge. The company generated $2.8 billion in net operating cash flow, with $2.0 billion excluding working capital movements, underscoring strong cash conversion in its integrated downstream model.

During 2025, Phillips 66 completed the acquisition of the remaining 50% interest in WRB Refining LP, consolidating the Wood River and Borger refineries. It also sold a 65% stake in its Germany and Austria retail marketing business and ceased operations at the Los Angeles facility. Segment results in Q4 included: Midstream adjusted pre-tax income of $717 million (up $20 million sequentially), Refining adjusted pre-tax income of $542 million (up $112 million), Chemicals adjusted pre-tax income of $19 million (down $157 million), and Renewable Fuels pre-tax loss of $19 million (an improvement of $24 million). Clean product yield rose to 88% and crude capacity utilization held at 99%.

Looking ahead to the first quarter of 2026, Phillips 66 expects global olefins and polyolefins utilization in the mid-90% range and refining utilization in the low-90%. The company has set a 2026 capital budget of $2.4 billion, split between $1.1 billion for sustaining capital and $1.3 billion for organic growth. Management reiterated its commitment to debt reduction—net debt-to-capital stood at 38% as of December 31—and returning cash flow to shareholders through dividends and share repurchases, with $756 million returned in Q4 2025.