- Earnings call transcript Q3 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the Third Quarter 2022 Phillips 66 Earnings Conference Call. My name is Sylvie, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. the to turn President, Dietert, now Relations. Investor will call Jeff over Vice I begin. may you Jeff,

Jeff Dietert

with Good Relations to Mark Today's along SVP, Chemicals, supplemental and and of Brian EVP, Participants found statement. CEO; Harbor and morning, Midstream welcome be X the Mitchell, XX-Q presentation Mandell, website, on conference section return quarter the Kevin information will the for XX We and filing. information. morning Midstream. Commercial; on today's information to Slide material supplemental call. EVP, earnings contains and Marketing can call the normal Refining Tim and financial Chemicals; our provided Refining. available supplemental include Phillips EVP operating Marketing Lashier, and and with supplemental Safe Phillips be We'll quarter. President Investor The CFO; release XX this Roberts, remaining third Harbison, Rich and next

differ Actual making We to forward-looking be may well actual included cause that differ will today's as today's are results SEC here statements call. comments. our filings. could as Factors results materially in during from

begin Day X. we New an we hosting will on our Investor over highlight would turn discussion, be to Before like November the I'll With that Mark. that, York call in I to

Mark Lashier

Jeff. Thanks,

favorable fuels. transportation quarter summer critical driving the during environment third meet performance. the and demand at continued for results rates high We market season Our reflect our ran strong operating peak to

generated in $X.XX of Our this committed In or shareholder flow. heavy sour quarter, crudes. to adjusted we cash billion per third distillate share. billion Refining supported for $X.X business discounts improved operating wider cracks delivered market capture distributions. We're earnings and strong quarter, strong $X.X the We by had

repurchases the dividends, stock. During $XXX shareholders. we of returned million ramped purchasing common almost we $X.X Including share to in a billion way, up meaningful quarter,

to operating advancing focus quarter, excellence our During priorities. on continued and the we strategic

realigned look We Midstream, key week. is business Day results. to details LP at our interest our more and Our Investor LLC. initiatives The in Oak deliver forward governance underway. transformation Midstream, to Pipeline, team economic is next we implementing Gray providing enterprise-wide and In DCP

in the to to we offer publicly-held DCP time, Gray our made and decreased At to DCP X.X%. Oak in Midstream common interest economic Pipeline same acquire Midstream, Our an XX%, of economic units LP. increased all interest

our Our new DCP to capture increased value for interest will in The allows structure integration NGL optimize and wellhead across optimization further opportunities and chain business. us Midstream costs. allow market to commercial

completion, facility, achieved budget. base alpha bringing with splitter unit XXX is Sweeny constructed barrels operations. Frac portfolio capacity at normal its a a is Sweeny the petrochemical CPChem Frac This capacity The growing October, propylene U.S. first up Ras its X will run year. Gulf largest in and U.S. two new also as enhancing projects, Coast production $XXX per the Old produce started in pounds pursuing Rodeo by X-hexene, one as cost billion is In and Rodeo a produce fuels decision start half into barrels for high-performance world-scale well begin pounds the million CPChem capacity. and per olefins XXXX. before its will operations expected over renewable renewable at Bayou we asset facilities. In will San this X of is critical to expected full our world-scale converting expand a of have second component approximately commercial our X The its develop projects fuels Qatar. building which facilities the and Upon expected A we're day in up Ocean, rates, continues Both to is final in unit day. being second year. world's the the to Gulf CPChem Refining, on project under X-hexene optimizing includes project facility business at propylene to year. Additionally, refinery XXXX. end Renewed on splitter and Cedar the high-return total XX,XXX investment Texas per are million Laffan, per existing XXX,XXX Francisco Hub CPChem's the of polyethylene. its quarter of time to of Coast fractionation Hub of

I'll Kevin results. to review financial the over the call Now to turn

Kevin Mitchell

Thank you, Mark, everyone. and hello,

by as with begin DCP connection the Before I completed On talk Pipeline, Midstream. we rights of XX, LLC. governance LLC. Gray of let DCP the Oak impacts Pipeline, merger financials, DCP we Effective the its the Midstream, and Hills August about August reflect Sand DCP LP summarizing LLC transaction, results delegated well accounting over Pipeline, and were financial of our Southern In me these XX, the Hills Midstream, entities DCP as and general entities. partner consolidation LLC

amounting earnings Midstream, items with gain special transfer starting interest an billion. of these reported the of consolidation Pipeline in Hills billion, the Slide quarter including So Sand gain an had we overview We Southern of net We on the and to DCP $X.X Oak of Pipeline third X, and Pipeline. financial Gray after-tax to $X.X related results. summarize Hills

decrease quarter company's of ended with acquired. $XXX by net $X.X million in million, million items, We LLC associated billion including value repurchases. and Capital earnings billion in generated $XXX spending with fair the dividends through shareholders to reduced of of Midstream, XXX flow. of $X.XX. our outstanding. $XXX the for cash DCP cash NOVONIX the or million investment was investment operating merger, $X.X We returned the share shares million share We $XX per $X.X special Excluding earnings $X.XX adjusted $XXX per the share. in quarter were billion The of million

X. Phillips noncontrolling adjusted Midstream noncontrolling portion Hills interest Pipeline higher entities Moving by by effective results Other, Hills to The including of Pipeline XX. The DCP impacted the to quarter and Corporate reflects and consolidating slide consolidations. by Midstream, segment, the August in third XX. of This Southern these are change from second taxes and impact income the owned not highlights interests the segment Slide quarter, the the Sand

in During by X million, decreased and results. our and the lower partially earnings higher shows Midstream Slide to Refining Marketing Chemicals, results Midstream due results. Specialties and period, offset adjusted $XXX mostly

XXX,XXX lower due increase adjusted results per was income August DCP in Pipeline $XX with the Midstream, the compared Sweeny and quarter. income from the pretax million The consolidation now $XXX income the fractionators of was earnings million reported Pipeline down second was facility mainly Gray in within prior decrease of adjusted $XXX DCP barrels are Hills to the of was Midstream quarter. Oak in compared and to XXX,XXX million day the Transportation previous million Southern with consolidation Hills The LPG merger. XX. Other pretax from Freeport The $XXX primarily third pretax resulting due quarter and the Pipeline quarter. NGL million, Hub Third contributed $XXX barrels loaded the million and equity Sand from $XXX the NGL day, export quarter. adjusted The per at averaged effective Other.

quarter NOVONIX a million at million value of the third of each period. in $XX with of investment exchange is the in including quarter. the Our end $XXX the foreign reporting marked-to-market decreased investment, second compared impacts, decrease The fair

with from was Slide million million lower was previous with income X. and on the million. of had in decrease previous legal resulting the utilization line for sharp million to turnaround compared primarily $XX adjusted $XXX quarter. partially $XXX pretax Chemicals prices. in from O&P The $XXX the million, Olefins costs The Turning was a in polyethylene Polyolefins decline due Adjusted to third $XXX mainly contingencies. the lower margins income was quarter. reflect offset quarter XX% costs. income Chemicals higher quarter pretax adjusted quarter. This SA&S in by Other for Global was pretax second

we distributions from received in CPChem. During third million the quarter, cash $XX

lower Refining by was $X.X Slide realized volumes. billion, X. on pretax from third Refining The down adjusted billion due was quarter. in margins, to partially offset primarily decrease the quarter higher Turning $X.X second income to

quarter product margins quarter. decreased line clean realized XX%. global by $XXX capture. in third the covers to and X turnaround was the costs composite $XX.XX XX% Our previous X:X:X were decreased XX%. the million, per with in barrel, yield crack was while market utilization Pretax Crude by market Slide X%

composite second of barrel capture compared $XX.XX quarter barrel was overall configuration Our was XX%. per an $XX.XX for crack by to was $XX.XX previous capture in X:X:X Market the in is XX%. margin per third Market capture the market Realized global the resulted market in quarter refineries. quarter. and impacted per our barrel the of

yield higher X:X:X We have distillate the than indicator. and lower a gasoline yield market

gasoline or $X.XX the per and crack per decreased per quarter. $X.XX crack decreased During the previous barrel, products barrel barrel from barrel. the of higher $XX.XX per secondary than Losses the quarter, third distillate $X.XX

impact from previous dated the of widening $X.XX barrel was Our relative line per costs offset Feedstock by feedstock was Basin. the feedstock crude of Brent quarter. sour differentials advantage heavy with loss higher in Atlantic to the in

other realizations and This reduced $X.XX in-product per category inventory RINs, margins costs, realized impacts. category The by barrel. freight includes

million Marketing higher with margins, $XXX interest shows to pretax prior $XXX and the was the The Specialties offset pretax third Other quarter. $X.X generated increase Moving income quarter The third and $XXX quarter. margins. of the was cash interest including was income increase million, adjusted third partially domestic compared was million $XX quarter to cash from during the quarter. second million Adjusted pretax of due consolidating quarter oil by international adjusted Slide the adjusted a the base $XX We XX, $XX and Cash quarter. Slide in million, operations The to up improved income. largely improvement Corporate On DCP higher lower Slide from results, XX. million, million. balance. started than inventory $XXX prior of $X.X reflects Specialties Other by billion $XX offset was million expense segment pretax due $XXX Midstream impacts. the XX with income in partially Marketing change higher had mainly billion. million costs on

net $XXX capital in Midstream, company's the funded with associated of $XXX million $X.X billion the million shareholders repurchases. dividends we During returned DCP merger, spending, acquired. and investment quarter, to share LLC the We including through cash of

of balance ended consolidation my Midstream. results. debt-to-capital This of quarter billion. concludes was $X.X cash DCP We including and ending the of a operating the review the net Our with ratio financial XX%,

crude the pretax a we the mid-XXs. rate I'll and In fourth we in in the be worldwide low $XXX between rate global utilization to quarter to fourth to outlook mid-XXs few Chemicals, be cover Next, turnaround be million items. million. O&P expect $XXX and quarter to expenses In expect utilization Refining, the

and million lower and of million pretax, DCP turnaround between As be to reflecting We Midstream million a $XXX result anticipate quarter and timing, million of of year guidance. fourth turnaround Corporate expenses full in interest $XXX we quarter execution $XXX come expense. full to than original $XXX our expect strong a Other costs to

Now we will open the line questions. for

Operator

America. question Instructions] And first Doug Leggate will at of your from [Operator be Bank

Doug Leggate

about you downturn. balance pretty sheet back before thoughts on clearly, ask to, just XX% could pre-COVID you're you're basis, the I if your on DCP still guess was the you wonder I absolute mean, capitalization But I -- Kevin, I back going where it up levels have debt, forward. now the a on about much. is to

So balance the be that you about sheet might into want and how your forward cash you how strategy? where to play are thinking going return

Kevin Mitchell

Yes, a good Doug, question. thanks. It's

debt-to-capital pretty we good cash, that consolidation that of ratio, net sub-XX%. feel is with So even of DCP,

reality we circa good debt But just $XX.X fully very also, that basis. on a billion, standpoint. you the of So debt-to-EBITDA billion $XX metric feel metrics, is at they're the look about from still if consolidated And strong. it's

continue we regardless think funded pressure between the financial of so that have, given and the Bear that the do on cash. generation of public, I some actually that we debt buy-in we execute funding to in, position sheet debt haven't on balance mind, the us yet overall so And you'll reduction. the how more see we're in puts cash

the get want to we the to we're debt so reduction continue where #X make to rid do the had where last we'll shareholders. away sufficient But gradually return over between same debt reductions. the of of Cash we need some at time, And pandemic some of couple don't were generation, difference that debt we years, now to amount balance to make the healthy is, to we'll chip to debt the priority cash added trying that -- be are continue able cash. at for cash balances discretionary a and,

Doug Leggate

I'm Day. the ask Kevin, that to know got you trying answer, given you've anything I not that Analyst hard, won't

mid-cycle with of some but things, came X call I last it's the want the the up. try industry Marathon preceded senior mid-cycle. Marathon. that really say, the about the I'm that in in So moved or -- one up this And to look, were do management's has of quite view to avoiding clear obvious And issue

I about, you go-forward Mark of $X but feel you talk can offer, earnings the billion next how maybe mid-cycle outlook anyone or about business? guess, used preempting Refining guys flow. Again, of to mid-cycle cash else, whether You to for business, $X week billion for not this the

Mark Lashier

to Yes, Doug, a we are bit cover week. going next that

provide there's has watching move. how our there. we're the And drive that that still doing to we'll What next we take we as far ability forward. on piece to more it mid-cycle focused into think -- be moves, things as market, generate and details we're the I moving we'll two see And week. evolves. the going to EBITDA certainly, that consideration But be what our mid-cycle market we'll that know to as control,

Doug Leggate

wait We'll understand. week. I until next

Operator

Mehta at Sachs. be Goldman question Next Neil will from

Neil Mehta

as a how in deck in at -- structural if did XQ quarter? given help rates Central capitalize, bucket that And lag, WCS wanted of is there's that anything the to a on more we typically I that in move Really wondering there was And start tailwind? I capture Or if Slide this that it the know there's unusual region. the bunch. should be Yes. waterfall can I of other something comes exceptional in a fact much the that Corridor. on XX off around

Mark Lashier

that. to that details very we're a There third I'll Neil, into happened factors Rich second of that Corridor the the are Yes, in the number number pleased quarter quarter. Central with things differentiated of and let dive quarter third performance. the around the a

Rich Harbison

good very Central Okay, the Mark. Mid-Con a And yes, had quarter. Neil, Corridor good question.

resetting for by the start quarter. the me Let basis second

us quarter turnaround heavy a region. Second for this was in

the of turnarounds lot quarter. seeing difference a the in of the you're So is lack third

sitting corridor. and strong quarter product around availability utilizations very during at mechanical Our the the was third for We good. clean sitting XX% at high yields had XX%

those. performance So on both good of

And turnarounds, operating Of to the volumes. lower had with increased a as expense of we course, for well. those quarter lack relate the lot directly

were distillate We crack As kit, our for the spreads strong you for as indicated strong for plays which which well, well quite And kit. well a favorable market favorable producer. quite Neil, that as distillate is are Canadian conditions widening our as the us very in also a saw region.

conditions here a strong third So market for performance you're I in is what think seeing operating quarter. the in out playing us favorable

Neil Mehta

has it's been on 'XX out in as crude. Yes. pretty maybe point stay could the And we wide that here and around for Canadian Western widened It curve well.

And guys' what your QX? to in think disproportionate So tailwind going it come would you should given a love there. does in impact tend is of perspective a on lag, on at that we see

Brian Mandell

Neil, sulfur so generally, We've euros, barrels burn. this Brian. has Coast naphtha as saying sour into WCS of with and weak and forced Asia they the competes Gulf Most million WCS high and is because to then so cut, has unplanned and out that crude. were about compete by been is SPR business. also the very, of weakening as released that oil buying they forced and started very weak utility Russian WCS with has of it been end WCS. XXX was buying WCS a demand with weren't crude, also, finally, barrels. India, of we And well, and competed given start much. bunker And the High SPR summer weaker I'll been naphtha Chemicals has by that purchased maintenance. fuel

caused some also that So pressure.

the differential. So $XX curve about $XX and currently, year you at off look $XX is off. WCS is forward QX, at at if about next is

the players we also same it continue way. will to market and So that weak the be assume feel

Operator

Roger Next Fargo. at Read from Wells question is

Roger Read

of Chemicals things. take a I here guess at maybe I'd the side shot like to

of softer of was what 'XX, results off 'XX impressive early an sort obviously, So kind run. and coming the

Does here You it also impact Gulf decision Coast for does the in weakness of opportunity. on Ras then all timing and FID the mentioned the your Laffan have Chemicals at whatsoever? imperil any Or FID?

Mark Lashier

Thanks, Roger. question. a That's great

to as doing cyclic global that think advantaged time CPChem any on their the They've where what back long then and focused never tried capturing that's a made market look to investments if maintain particular here the drive well. back presence. And that's they of always -- be has feedstocks up they're history have here. projects tend in are long-term was to that I their And growth on there to to case you Frankly, turning just the countercyclical, they looks focusing when downturn, we movements plans. online when beneficial it come the and be happened a things history, may like that economics, fundamentals. the

turn projects. will it things when predict never four those to of but will can years each take execute around, You about

frame. does on say as time margin be focus And of we those a that we what mid-cycle so and for will yes, kind those fundamentals the But see crystal it in ball long-term what opportunities.

Roger Read

And other on That my the makes then Marketing question sense. business.

an an had of the exceptional the any there? QX. quarters You even background on signs here? kind last two Any more what's created reversing are on in now QX exceptional of going and showing that And fundamentals

Brian Mandell

Sure, both by that I'll and channels Western geographic trade. diverse the here saying portfolio diverse our our in with business again. in and start Roger. Brian Maybe U.S. of Europe

it us branded that unbranded, business. we business. about a have things was and QX, We Germany, we that when number help the In think our of helped retail saw But Marketing a helped end of the X Rhine Also overseas, and us at Austrian the down tax one starting and ending holiday and helps January actually August. generally low us. the in refinery

saw conversely, say, But in overall, QX a South Russian And MiRO competitive Shortage come also our as the at Germany. I helped had supply there market U.S., well us spot of in quarter. good us. in we helped of which the a in QX. alternative us which exchange distillate prices, Germany, of had actually give in falling south very we agreement particularly have And off would the then general terms margins the We helps Refinery of We from the internationally. us advantage.

Operator

Next Ryan question Sandler. will be from Piper at Todd

Ryan Todd

ask exposed a if refining, European decent on recent The months and European Maybe a amount. could to adjusted you're adjust had have kind spent lot dynamics. to I there Atlantic Basin prices. have natural refining, volatility gas systems in with one of of

as Looking out over Atlantic then how may Any forward, your months? you've and ban next impact and forward asset that's about overall to dynamics got import six a into import balances these early look go product play effect thoughts for Basin potentially year. a crude both and ban how to region the next the this you

Mark Lashier

at Rich and strength Mark. level, comment those is up. to and follow will details. generally, a let it Rich Brian come I on for it's from our then going This the constructive Yes. I I I'll It's strengthen Brian I'll are think around high could But let distillates in position, particularly But strength. think -- us. and

Brian Mandell

ranges under world -- the weak we're by that Maybe over I'll XX% Rich are macro making distillates. clearly, the U.S., that the and about inventories. inventories, the XXXX was around starting we're very, can assets. tight, very the our is diesel start particularly winter to talk to more Refineries given with That's gasoline season. XXXX around the on market a into currently. But world In go

So off there some on of lot alleviate the may that stress edge the some are and a market. things take of the of

the elsewhere. here we're forecast their The will back around so for in both market Europe. see those the to are in from of then U.S. be and And diesel First have the moderate world, end, Chinese seeing on coming you'll we're U.S. weather coming and refineries quotas increased so gasoline turnarounds up. refinery The Asia. more strikes French and back an the kind

think demand. expect for strong, we'd will remain margins So be ultimate moderator margins I why and those the the to

Rich Harbison

than expenses. market sanctions up don't play. higher Yes, gas here to these much add drive perspective, really a natural this will of into feedstock that I and evolves the have operating this into price -- we the course, costs see our other And don't Refining from will to I Rich. is go as future

out that So how interesting. be sails all will

Ryan Todd

comment buy-in a there. you don't may you reminder I plan for But step this you DCP, week, on talking closure term? any the synergies incremental -- timing remainder if benefits and of you're what position cash ability there, how I point can Great. back don't free into how have the flow either stock potential the the beyond of but on -- regarding with And And come or buy along impact operational in kind about to then that, a of term that deal about thinking know the of closure of that maybe your of consolidated the that from longer next deal? near financial the view may of

Mark Lashier

a Ryan, that the process high -- At underway. is level,

about will number. than the it negotiating say that, lot but let is represent opportunity create Tim and that better And that the we process Phillips quick wellhead with to dynamics, right the for believe directors want that get as this of will on We strategy unitholders. can independent out. more that? far a XX. you market we just need to long-term really about talk It's a comment really I get number to do that are to driving play to as value strategic And Tim,

Tim Roberts

Yes, think -- right. Exactly Mark, thanks. that's right. We I

there's and Marketing, a our things the what we Midstream. NGL no in think of we make a in is I thing to natural business see that in the believe We point Commercial than on see our want and Refining, space. do same integration gas different I integration, couple

that, allows key to to set basins, namely and this especially do up framework us in the Permian DJ. So that

opportunities potential going soon we well the to talk is the that, started the identify buy-in and as so we're cost more done yes, really what ability really and part to done, value, integration, be create road lot can for as are the already get and this to about think probably we starting buy-in the position we want a which behind from important that to I the on value. going as going but what we that So both us that the we've well to we pushing more are it's full capture are -- integration, a and are we that, that to Really as the commenting be. like as down get really compete standpoint and us, also worth get

Operator

be Next at Royall JPMorgan. John question from will

John Royall

post So pretty probably to on number I big did you DCP the kind for But framework. XQ have some real that until in have a to buyback, have I of a wait go-forward people. think think surprised we'll now,

you kind the between and how short-term think then the conserving that? DCP for buyback about and deal about of talk can push-pull maybe the cash you upcoming so And with

Mark Lashier

At quarter in level, to are hold We due had second period. a high John, committed the we a buybacks. blackout to to back

And a what it so record, that a share will kind have between the say a about buybacks. more of of solid about repurchases. versus serious held us back last require we for I'll like a execute roll-up Day. you'll Kevin it But bit. we hear is I'll quarter balance the plan. Investor are And But about that to And let what at you got DCP just broken saw talk signal

Kevin Mitchell

Yes, John.

we'll cash that we'll overall a to debt. of amounts cash we So generation pretty fund in use in feel of on is combination my terms sheet hand of debt the to I where with -- the want And DCP we and able earlier continue position significant But roll-up, that should to to to we cash the return with manage with have, we issuance with shareholders. position balance yes, cash subsequently sits confident reduce our that. be position, terms of expectation be to cash that will the comments, the a to will have, be in

ability too shares. impact So concerned buy going transaction that DCP the our to back I'm to negatively not is

John Royall

if prior guys your repeat from to X on then things the the the but was to you apologies Other going X.XX about XQ. I'm commentary wrong, Okay. not me necessarily Central positive through question, a flipping just if in I'm sure XQ address to correct bar, strength I negative talked And Corridor. from And thinking but

I would if if could apologies bar the So dynamics missed you that really be that this, Other specifically, helpful. through in but go

Tim Roberts

see. in primary Central in area, In and the bar drivers let's issues bar RIN of the two costs there some at are inventory John. timing some the Coast that the Okay, Other we're there, looking really in that, or Atlantic

Operator

question Next from be Blair at TPH. will Matthew

Matthew Blair

and do? outperformed third what's there have Your for peers quarter. And at? this exposure as Chems Europe I the Was your but peers really results down simple we came as should they guess just Is much all that you outlook QX? look don't your else anything in pretty

Mark Lashier

Yes. Thanks, Matt. talked folks the at That's CPChem We've to a that. great question. about

to part that The have we of do, though. and profitable. heavy lot Europe that of but it back lack to European I didn't of -- have Though different high-density the They were supply East there do exposed had position. cut and of those they segment they're back polyethylene. assets And a volume well. is that Middle think were capacity into They cost inventory. is to the market. perform contain continue to interesting back cutting continued intentional in North back into that reflects due their polyethylene dynamics And America, the of thing production to more CPChem some are a And they cutbacks. have They little I is than They strong didn't no had economics. others to cut but linear to had ran low-density part were production. that think cut outage unplanned strong

-- as typically difficult they're digested. are capacity gone in being fun think we having a about soft little see fourth gone have while coming breakpoint. down have just margins continue that environment right a new I online Marker positioned fourth far that's quarter, the to Margins -- and one's quarter this to the is down. time. now, productive they more be any as to So And no during little then this

to it's cut and to see marketplace, -- see in but the upward, polyethylene a of you that So It to I continue signs a provide hit I movement the need as see We'll seeing feeling to the like and think have then people to them fourth couple what quarters hit see bottom go bottoming more of you to slowly those think signaling kind will it really probably quarter as take up back, it's you're market bottom. recover. in lot is needed of prices that they sounding out.

Matthew Blair

have been They market? then could Is is? really me premium the to this Sounds rolling a octane just also you function could spreads? good. you exposure Tier Phillips' remind And impacts X through quite And what strong recently. talk of on gasoline about

Brian Mandell

marketers, Matt, you Generally, high the very gasoline about naphtha, our blend octane XX% weak so would our on when very, Marketing like that into to weak to the you or say Yes. I premium or make gasoline have need spreads, XX% and in blenders have large finished most grade. naphtha's And octane been we're business.

Operator

from Cheng will at Scotiabank. question Paul be Next

Paul Cheng

questions, Two please.

is doing? news onstream windfall in does just second it mean, latest tax, -- the whether to renewable one? strategy, with the to D.C., XXXX. strategy the guess was conversion the and pass diesel the that, The what Senate that your they I beyond the vote soon R&D full you're retail them -- what's profit I be that, that sufficient want come currently from talk the see wondering First, phase will probably when with that talking if propose to Biden first is in question will in mean, oil over your then for completion is President industry your about there the senator, people

maybe be to going is And one-off so see wanted more that forward say, to that strategy going or on that that? beyond let's that,

Mark Lashier

Mark. is This Paul. Thanks, Yes.

around And very of I question, with first our the rest oils comments. that's the earnings are the the in think lot they results. we've coming a it's very, the Your marketplace. solid President's in engaged season, latest with administration been, out that target the Biden of with integrated industry, the peers of And challenges along see

disrupt It's them we they supply off the into to address have public And caution know that when view and advice things they giving been engage with of peers. the to taking Our rhetoric inventories could is issues and to try listening of And markets cost do price. we've that with our get and constructive. that even they the are and account because along are they them the they more. been with proceed and

up time. have there's right an I that a week, of You in there's remember lot be next going that to to think to that and rhetoric election point

Operator

be... Next question will

Mark Lashier

project. and small execution Paul. first Francisco your the diesel it Oh, Renewed our Rodeo put We answer to the San focused in unit is question, XXX. at of on marketplace. first water Yes. question, Obviously, the commissioning in Renewable we with forgot I'm quite so -- sorry, the successful been the refinery. I step second Unit there a That's the I call We've successful toe that strategy. Paul. was

We for our as feedstocks, well both Rodeo Humber are as well. fuel. sustainable fuels Rodeo including involved facility. preparation aviation fuel producing as aviation We're there, aggregating renewable in provide some in will sustainable

of we kind fuel. Bottom we've sustainable business taking renewable look just hard we've got thoughts so -- cost to these not was advantage looking that supportive to SAF. we're we're that directions, in be got going right execute a sight capital got whatever Certainly, competitive around we IRA And off do, we've ensure we a we've we've feedstocks to incredibly got that of And fuels, the renewable these diesel. line we that at And aviation and line at when look disciplined, projects. and we're when at. got go there some on as we're options the of going Act that is

focus, do. So the those we one but primary of just getting that's better in bigger things being every that not

Operator

Gabelman is question Jason from last Cowen. at Our

Jason Gabelman

the and there -- about but optimizing a have you And that were just and discuss then walk. some that ask to this cash impacted that you result? have cash the that plans on detail operations, discuss conversion? wanted and typically some there workforce. working the do next could doing flow cost cash provide flow capital you just of just the you Can otherwise reducing impacted discuss maybe the improvement some secondly, front-running that since I some week, didn't as and cash in something you reports on were Can your may items around headcount from that any you of

Mark Lashier

reports on Yes, talk cash headcount. the about on I'll flow Kevin those will detail. touch

Kevin Mitchell

Yes, Jason.

In terms when say, will of what detail a is, significant operating week I cash say finalizing I file the -- time cash flow. don't in of the of level flow, XX-Q. I next would a that But week seen available we've component next working know capital on be early But interest to lot think based and everything operating there's would we're working we that detail. capital of was that what very date, we still at

leave working just numbers some of So pretty that will that. minor there. it impact, to the relative but there'll be it And seen be I'll capital other out have you a at

Mark Lashier

Yes.

transformation -- over issue, focused now, that On well portion that our the year we've this work, on work. Jason, been for we've of facet been a on material. yes, business and executing is It's the headcount and a of the

will We provide at more details next Day. week Investor

a in our have did two volatile is to optimal to reduction though, lower an to ever-changing go an force our it's signal best quarters forward commitment clear environment organization in execution work, our the what eliminate that in we during history. think cost, of I unnecessary to

Operator

conclude sorry, back the time, will This question-and-answer -- this I conference At over session. today's does to turn Jeff. call

Jeff Dietert

your thank in you XX. interest of for We Phillips all

And questions Shannon to of at have Investor the today's we Thank call Day forward you on you look next me. please week. many seeing and If call, you.

Operator

today's Ladies conference. this and does gentlemen, conclude

you. You now lines. begin may now you may your disconnect -- Thank

Phillips 66 (PSX) 1 Nov 222022 Q3 Earnings call transcript