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# Phillips 66 CEO On Midstream Reaching Half Of EBITDA: 'I Don't Think That's Crazy'
- URL: https://www.bullished.co/phillips-66-ceo-on-midstream-reaching-half-of-ebitda-i-dont-think-thats-crazy-50856235/
- Published: 2026-10-28T17:22:02.000Z
- Updated: 2026-10-28T17:22:02.000Z
- Description: CFO Kevin Mitchell tied a mid-to-high single-digit dividend growth assumption to a pipeline business he put at $4 billion of EBITDA a year.
- Author: Matteo Parrino
- Tags: Earnings, PSX, Industry: Energy

[Phillips 66](https://www.bullished.co/tag/psx/) Chairman and CEO Mark Lashier said on the company's third-quarter earnings call Wednesday that he does not think it is "crazy" to imagine midstream becoming half of EBITDA in a 10-year plan, a scenario put to him by a Wolfe Research analyst. Chief Financial Officer Kevin Mitchell, on the same call, tied the dividend's growth to that business, which he said earns about $4 billion a year.

## Lashier's answer, with caveats

Phillips 66, which refines crude oil, moves and processes oil and gas, makes chemicals and sells fuels and lubricants, reported [adjusted earnings of $5.6 billion, or $14.08 per share](https://seekingalpha.com/news/4658739-phillips-66-non-gaap-eps-of-14%5F08-beats-by-2%5F29-revenue-of-51%5F5b-beats-by-8%5F27b?ref=bullished.co), for the quarter, Mitchell said.

The Wolfe Research analyst asked whether it was "nuts" to say midstream could be 50% of EBITDA over a 10-year plan. Lashier answered: "I don't think that's crazy. I think that, yeah, the math is pretty straightforward."

He added a caution. The company has reset its refining baseline too, he said, and refining gains come through "blocking and tackling" and a list of projects rather than big visible increments.

Midstream growth, he said, will not be linear because projects come on in steps. He pointed to the Iron Mesa gas plant, an expansion of the Coastal Bend pipeline and a fractionator in Corpus Christi.

## The dividend math

Asked whether dividend growth could follow a similar path, Mitchell said an assumption of mid-to-high single-digit annual growth in the per-share dividend is "pretty reasonable." He noted midstream currently generates $4 billion a year of EBITDA, growing about 5% a year, against a dividend outlay of $2 billion a year.

Mitchell said the company recently announced its second dividend increase of 2026, a 10.8% rise from the fourth quarter of 2025\. Lashier said midstream earnings are the base that covers about $1 billion of sustaining capital and the dividend, and that share buybacks keep total dividend cash lower than per-share increases suggest.

Debt fell $2 billion in the quarter to $18.5 billion, with net debt at $12.7 billion. Mitchell said the company's target is $17 billion.

## Western Gateway raises the spending bill

Phillips 66's share of the Western Gateway pipeline project is $2.5 billion, Mitchell said, and it will lift capital spending. Engineering and right-of-way work run through the end of next year, with construction in 2028 and 2029\. He called 2028 the heaviest year, with 2027 and 2029 a little lower.

Lashier said midstream can still grow about 5% a year while the company builds the project.

More detail on Western Gateway spending will come with the capital budget in December, Mitchell said.

### Sources

- [Phillips 66 beats estimates on strong refining margins](https://finance.yahoo.com/energy/articles/phillips-66-beats-estimates-strong-114652139.html?ref=bullished.co) — Yahoo Finance
- [Phillips 66 Non-GAAP EPS of $14.08 beats by $2.29, revenue of $51.5B beats by $8.27B (PSX:NYSE)](https://seekingalpha.com/news/4658739-phillips-66-non-gaap-eps-of-14%5F08-beats-by-2%5F29-revenue-of-51%5F5b-beats-by-8%5F27b?ref=bullished.co) — seekingalpha.com
- [What Analyst Projections for Key Metrics Reveal About Phillips 66 (PSX) Q3 Earnings](https://finance.yahoo.com/markets/stocks/articles/analyst-projections-key-metrics-reveal-121506108.html?ref=bullished.co) — Yahoo Finance
- [Here's How PSX's Flexible Crude Slate Supports Its Refining Economics](https://finance.yahoo.com/energy/articles/heres-psxs-flexible-crude-slate-110900946.html?ref=bullished.co) — Yahoo Finance
- [Phillips 66 Q3 preview: Can record refining results keep PSX’s rally alive? (PSX:NYSE) | Seeking Alpha](https://seekingalpha.com/news/4658127-phillips-66-q3-preview-can-record-refining-results-keep-psxs-rally-alive?ref=bullished.co) — seekingalpha.com

### More on Phillips 66

- [Phillips 66 Earns $14.08 A Share In Third Quarter, Up From $9.55, As Refining Margins Jump](https://www.bullished.co/phillips-66-earns-14-08-a-share-in-third-quarter-up-from-9-55-as-refining-margins-jump-a6cf9966/)
- [Phillips 66 Refining Chief Richard Harbison Gives Notice He Will Retire December 31, 8-K Says](https://www.bullished.co/phillips-66-refining-chief-richard-harbison-gives-notice-he-will-retire-december-31-8-k-d90c1ac9/)

[All Phillips 66 (PSX) coverage →](https://www.bullished.co/tag/psx/)