Earnings call transcript Q4 2022

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Operator

Welcome to the Fourth Quarter 2022 Phillips 66 Earnings Conference Call. My name is Emily, and I'll 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 Relations. to turn President Dieter, now Investor of will call Jeff over Vice I may you Jeff, begin.

Jeff Dietert

will President Rich operating and along of presentation the XX and Fourth and Call. call Refining. website, material Quarter morning, Brian information. Earnings Mark Investor Good can welcome Commercial; Tim Roberts, Conference Harbison, Participants to the Mandell, Marketing on Mitchell, CEO; Kevin and Phillips section Midstream and be XX include CFO; supplemental Relations and Lashier, financial with Chemicals; and Today's found on today's Phillips

Slide X contains our safe harbor statement.

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

turn Mark. to I'll that, over call the With

Mark Lashier

Good $X.X adjusted $X.X earnings the you us for Thanks, and per in of generated flow. billion thank operating had joining share. fourth we Jeff. today. morning, We quarter, $X billion or In cash

billion share. earnings adjusted year, $XX.XX or were the For $X.X per

diversified Our favorable solid strong and flow cash environment market by and operations. XXXX, earnings supported in a portfolio integrated generated

allowed repurchases generation flow returned our billion financial We strengthen through repurchase to debt and cash Our resuming position by share shareholders to $X.X and program. our dividends. share repaying us

global on meet continue demand. vision to deliver of advancing We on focus operating we our to our lives improving providing and excellence strategic as priorities energy and

opportunities across wellhead we DCP significant NGL integrating and Midstream our continue Midstream, growth market unlock In value to to chain. synergies

at day. Additionally, the Hub, per barrels we Sweeny completed Frac adding X XXX,XXX

-- is hub largest or it Hub day, largest Sweeny in fraction making fractionation capacity fractionation per second barrels total Our the U.S. XXX,XXX the the

in in construction expected enhancing This at Ocean, portfolio base of Texas, the capacity the are a pursuing optimizing well of a projects unit one world asset expansion and is its start scale includes facility. second its half hexene to Both splitting produce as XXXX. existing to Cedar up CPChem of propylene high-return its Old as buying Chemicals, projects, operations. second of In

U.S. and Triangle Golden combined per polymers ethane billion Ras interest CPChem Qatar. pounds of to will two decisions per X.X the high-density year U.S. with CPChem facility Gulf Coast and cracker final integrated facilities on a include $X.X units XX% the on pounds announced will Energy Coast. Laffan, Gulf X.X billion a Qatar polyethylene investment in the construct petrochemical Polymers in capacity expected begin are year. The XXXX. facility a billion to have Operations

a Laffan ethane own per units The expected Ras two the capacity January, billion petrochemical complex. interest CPChem $X in total XX% in Start-up year. plant In will approved. X.X a include the Polymers pounds a was high-density billion of late XXXX. pounds per X.X will billion with integrated polyethylene year and is project cracker

renewable the largest fuels first we're of one fuels Francisco The converting track is refinery Renewed commercial per XXXX. into San Refining, of Rodeo production world's completion, project In facilities. renewable of barrels have day over in on quarter the will XX,XXX Upon begin capacity. Rodeo to our operations

holding shareholders to as ourselves announced know At and our are reward the and Investor We're future. we Phillips well. accountable, we in XX priorities you that Day, now

our summarizes progress. X Slide

the of agreement We through In Midstream. meet repurchases XXXX. of January, to share year-end are Since billion July delivering returns XXXX, by dividends. We're reached $X.X of on units held DCP target we've publicly track to billion to acquire and our returned common shareholders. all return we $XX shareholders an billion to to $XX

transaction, incremental the have including adjusted which in generate Midstream. to expected transaction quarter economic prior and operating EBITDA, of the third synergies. is The an $X.X XX%, we interest from to in XXXX, DCP interest expect XX% of will second an increase point, the We commercial our in to close quarter at billion economic

annualized in end mostly related basis savings achieved up million, reductions organization. team The of $XXX setting transformation. well over by our during for to on XXXX, business redesigned headcount we and year cost This an our streamlined at of XXXX. of the includes million reducing executing We're over as excess the us positions $XXX X,XXX

our of to sustaining reduction In program of XXXX and We're lower year-end a includes by $XXX business to sustainable capital deliver a expect addition, savings million transforming annualized $X cost billion model capital. XXXX.

a executing sustainable and to on progress. deliver updating increase priorities you forward on to laser-focused and We're strategic We competitive look these returns way. distributions our in

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

Kevin Mitchell

$XX.XX million with NOVONIX financial fair for We $XXX of share reduced on overview Slide Starting flow. $XX.X Adjusted generated operating per the summarize $X.X value we billion the an results of our per or X, Mark. you, earnings cash decrease by our The in Thank share. in were billion $X.XX. year. earnings investment

from billion, from Cash were XX%. million We XXXX CPChem. ratio with $X.X ended net distributions including affiliates a equity $XXX of debt-to-capital

was for Our year return the adjusted after-tax capital XX%. on employed

the in during Slide loan flow shows Cash generated was We with cash affiliates, billion. received cash billion We X operations the cash the change year net record in equity from million. $XX.X $XXX $X.X during started from year. and repayments the year.

paid paid including billion Midstream of billion began share we consolidating since $X.X debt. by million This effective August down capital spending repurchases. and $X.X we returned of billion $X.X to $XXX down of We DCP year, the During billion 'XX. includes $X.X shareholders, of funded debt

of includes of category preferred A DCP Series units million. redemption the $XXX The Midstream's other

ending to by increased balance billion. billion $X.X $X Our cash

including earnings $XX Slide equity earnings of billion NOVONIX $X.X per cash affiliates of in $X.X operating working X and the from of quarter billion value distributions $XXX investment by capital $X in our summarizes share $X.X fair fourth flow million per generated $X.XX. decrease reduced of our The or billion, share. benefit million. a results. We were cash Adjusted

the growth with million million We shares $XXX million, projects. ended including million the of We to $X.X $XXX shareholders repurchases. for million for was quarter returned billion quarter share of spending $XXX outstanding. Capital and XXX $XXX dividends through

to the the fourth Moving quarter highlights change quarter. the third by to Slide X. This results segment adjusted slide in from

and mostly Specialties. adjusted lower in During decreased the $X.X Refining and period, billion earnings results Marketing due to

made and we quarter, the to results. composition fourth the of changes certain operating reporting our segment In

has The for information. and XXXX reflect XXXX period quarterly results these and slides supplemental purposes. been Our included and information been our changes is have recast in prior comparative recast

X -- pretax adjusted pretax income well of contributed compared Midstream income quarter. prior Hills and our adjusted Fourth volumes primarily was record decrease consolidating income the up Transportation $XXX as million increase the pipeline. Sand in in DCP as Pipeline Other was pretax Southern a to to third full adjusted was The million Hills fractionation previous Midstream, compared $XXX from million and $XXX to quarter. quarter. $XXX due with the Slide quarter the of shows quarter results. million million $XXX $X million, NGL

quarter. the the at Freeport facility barrels start-up Sweeny fractionators Frac per the of record record averaged X The XXX,XXX a loaded a the XXX,XXX export fourth Hub per third day, end of barrels quarter. day the LPG The reflecting in at

foreign mark-to-market quarter. quarter. $XX quarter investment, of in value of the $XX impacts, a including exchange is each in investment fair million the fourth third million the The NOVONIX Our decreased compared with decrease

in for third quarter. was costs turnaround and impact planned and on mainly by impact XX% and in Turning pretax of the activities of adjusted compared to in Global Slide olefins quarter, December. was accruals the the utility with lower volumes polyolefins $XXX quarter to The at XX. fourth the and decrease winter margins partially reflecting million quarter. Chemicals legal due offset decreased the of Chemicals storm income utilization previous million $XX the

Slide Refining quarter $X.X XX. quarter. to was billion decrease due Turning margins. adjusted fourth billion, in $X.X realized third on was down income Refining lower primarily pretax the from The to

were while per by composite margins quarter the Turnaround barrel, costs to yield the decreased realized was decreased [ph] fourth X to utilization XX% product $XX.XX Our XX% million. and crack $XXX clean Crude XX%. re-adjusted market by XX%. was in X

market capture. Slide XX covers

was a to of X quarter the market barrel barrel and X rent-adjusted in capture per crack $XX.XX more market per We are margin XX%. barrel in comparable consistent X crack quarter. for resulted per to peers our third more the an in adjusted compared be overall realized market now $XX.XX $XX.XX to margin. with X to using was Realized to and The composite fourth

Market is XX%. by in Market quarter the impacted capture configuration capture our of previous the refineries. was

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

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

Our quarter due third feedstock to loss more of to $X.XX per compared barrel was crude the $X.XX barrel per differentials. favorable improved

improved than primarily the margins timing. per freight The realizations was other includes inventory This clean lower category clean due inventory realized $X.XX less quarter impacts. product by per quarter, and category $X.XX barrel. barrel previous realizations and product to Fourth costs,

mainly $XXX and income Moving million marketing on lower to pretax domestic XX. quarter, due quarter Marketing in compared Adjusted the fourth and international Slide margins. was with $XXX to million Specialties prior

increase prior well a net adjusted had segment higher Other and to $XXX mainly employee-related was Corporate $XX higher foreign due higher the and as tax costs the XX, a The million as expense than expenses. million, Slide to entity On reorganization pretax related of quarter. transfer interest

the shows receivable balance. change capital. $X.X net cash decrease had billion, capital our during was of in $X.X Cash working fourth reflecting was quarter. the a There strong mainly working in We generation. inventory benefit of position. operations in a and quarter started the cash cash $X.X another XX We quarter accounts billion, reduction billion Slide with a from a excluding

million. from a received of repayment We affiliate loan $XXX an equity

spending. April We XXXX senior and we $X.X billion returned quarter, through of and to the capital funded $XXX dividends During repaid share $XXX of due shareholders repurchases. million million notes

of other Series preferred $XXX A units the DCP of the Additionally, includes category Midstream's redemption million.

balance Our was billion. ending $X.X cash

review the results. concludes operating This of financial my and

and be $XXX turnaround other million. full In Chemicals, rate we in and few corporate outlook the to the to rate and quarter the quarter first million be Next, between we We the between in cover utilization expect Refining, O&P $XXX a million costs for I'll In global the anticipate crude quarter $XXX first mid-XXs. to expect $XXX year. first come to first mid-XXs and in the items and be worldwide utilization million. expenses quarter

For turnaround $XXX million. are XXXX, be and Refining between million $XXX expected expenses to

in full the costs between year. billion. to and effective And Other billion for $X XX% the be $X.X income to and tax rate year of anticipate D&A the $X we be Corporate expect We about of billion expect range finally, to We XX%.

open we the for questions. Now will line

Operator

Thank you.

Instructions] comes Neil from Please Mehta We question-and-answer question [Operator the today first Goldman of session. Neil. go ahead, will Our now Sachs. begin

open. is Your line

Neil Mehta

have it's of I rate, try guess I capture peers. to Yeah. question market is today, surprised I I isolate a first around Good the morning, lot afternoon, to folks if And to large-cap is refining. relative reacting what your good the the guys. think

year? structural? maybe And capture to in think more so us temporary us through is you continue was system. you we it for feel that and give going anything seeing versus about that rate you're the as Is progression to talk confidence the about the what And can simplify there that improve

Rich Harbison

activity. Pacific good year. really the stand at was That's refinery fourth that turnaround a that's the three the the me centric things for Yeah, simple It rate the shutdown the question. When quarter fourth here. And quarter, of one. third the entire our to Northwest. I Pacific an Coast are Rich and really the in Hey, look capture that impact of actual the Northwest Gulf shouldered was and that first out

I look those as So temporaries. at

in also that differentials There difference New market well. out Harbor from there European were in is the Northern Atlantic, reflective Europe Angeles some in as the and that was as York Pacific the dislocated also as price There turnaround reduction Northwest significant product the between market in prices and effect the price was distillate played across Los the system diesel product capture. price well our California a the

in the shutdown centric of winter really events third fourth Keystone the as in quarter capture well storm around the there. the influence was as pipeline And

there's associated impact when the -- majority effects, the rate of capture quarter. that's at in with the I fourth So those look the three

Jeff Dietert

in early I margin might turnaround occurred was activity the the October part of just November, which the add, quarter. highest and

Neil Mehta

materialize just And like, through in about do the guides that. potentially mid-XXs? we quarter, some is with really year? potentially think that going for see QX that Or it utilization pretty a to be how the dynamics QX, Thanks more of as the looks given follow-up we of improvement these balance it's reverse especially the turnaround to heavy

Mark Lashier

bit the part and the start little guidance with a turnaround that for to about there I'll market Brian, you kick quarter. can Well, then it of first talk over the outlook

that guidance in our spend. range. our our turnaround, And So provided XXX quarter majority XXX there the by is can a of first quarter guidance first our annual tell is to that you Kevin

on a our are quarter just So we couple are centric heavy first sites. And primarily those turnaround. of in related

Gulf the So Coast impact I turnaround also on coastal see less the don't as turnarounds. our to impactful that of there well I -- that biggest that part really is Atlantic activity There some is as operations impactful. as

is primary centric So it's one spend, facility. really although in there a heavy

Brian Mandell

a Pacific New should distillate add would New over Bay saw York prices about Northwest I imported New in lot needs. the normalize. didn't next all And is European get they distillate York, prior Europe the and barrels and of York unusual. We price because Russian prices talking to the both gap L.A., to week. That's storm, it to that of winter Europe. And

York reason a is at it's prompt issue. over full now And now. you if Pipeline, why New So it's the Colonial running Europe at rates look

York or New forward. York get under be back fed rather will New will then -- Europe going -- over and or over

well. And versus L.A. Northwest issue versus Pacific the that's temporary that Bay -- a as and was

to to really for is across Our in the pad refineries given markets. Pacific exports build and Northwest. ran price infrastructure Bay the really needed December, oversupply, saw in we inventories And the exports the and well markets incentivize the November,

So exports that's the where came from.

need the exports. for we also, barrels aggregate to And

some that to normally went that go L.A. to didn't time. the barrels L.A. So of at

that L.A. between in But So we to we'd inventories spreads and Bay get the demand will come north back Pacific going Bay, the the areas. the expect south Northwest into decreased increased and with price, back moderate and turnarounds as work Pacific price. Northwest normal to seasonal heavy forward

Neil Mehta

guys. Thanks, Appreciate it.

Jeff Dietert

Thanks Neil.

Operator

next go Please Leggate comes Doug. from America. ahead, Bank Our with question today of Doug

Doug Leggate

quantify wonder there lost that Good possible? question, rate us ask differently. capture quarter Well, kind to try everyone. morning opportunity but I of can the Kevin if help you in I a going if may, cost build on wouldn't mind, the you. it I'm way, -- that thank Is reconcile like fourth Is I'd little any to you question? to Neil's that

Kevin Mitchell

And that's and through out a shown you that the areas want was put what is the any don't it LP component. was It -- terms than invariably usually certainly, Doug, of it, given what We've bit in that. that. higher quite period, Yeah. walk -- any historically some what we mean, I saw degree that. higher the consider. of you would element of in up a into we've market. talked where significantly that there we've fourth of some done kind not quarter in I than Rich about there's But has but of there's ideally,

So we've out. given not something historically

the the the million of guess, I you give probably $XXX is But order to it's of -- to number some million help, some $XXX in in quarter. probably LPO

Doug Leggate

-- Okay. a it's I tricky for top thank to know you answer. that. I one guess

the realize of speaks my follow-up So of is kind comments really that, more to your because first the Northeast. of normal fire back Energy Solutions the pushing to the a an was And But around since. hasn't I oil come outlook heating noise occurs Philadelphia to product us is during XXXX probably in without margins. winter that all it probably about everyone up question. when Northeast winter

just -- Northeast, in did about curious given any to the gasoline look does could the I'm And product given in Philadelphia think you how without Solutions? the U.S.? Northeast driving you push about the look if that up what thinking a thought, we in the market season you're So normal Energy summertime summer what like like have

Brian Mandell

the it's think future, an to that The an We need expect expect different to for come barrels I from we we typically imports but about Yeah, continue locations gasoline import up level. in that to gasoline market. would being a still -- always may day. we market import that XXX,XXX import do

Doug Leggate

saw in is, Northeast? risk the I way an gasoline oil what heating outside an spike of guess the you see asking I'm do spike outside in the we in

Brian Mandell

volatility. that away. opportunity the resupply on resupply is Coast is distance away, comes any and four you short the time would close, say Coast, I some further for thing supplied same that we the just happens have in weeks resupply and that then Pad opportunity that in away X, West And volatility. in that needs any -- is but The has West from market

Jeff Dietert

look diesel it thing plan we've for period looks as turnaround other inventories, all jet they're five-year below industry the think refining ranges you I add above-average at is an the I'd got and to us and gasoline, spring. though

it tight point. So from our looks vantage

Doug Leggate

thinking. That's to one kind what That so guys. a your was perspective. of much we're Thanks Appreciate tricky answer.

Jeff Dietert

you, Thank Doug.

Operator

today comes ahead, Roger. Wells question Please from Read next go Our Roger with Fargo.

Roger Read

continue I theme expectations everybody. capture. guess of hammering morning, of on I'll Good the and with capture

why quarter curious explained And did this you you're gasoline know Just index using? and aspect. change the the that then I the diesel

might with products? something that through 'XX configuration, that carry secondary So to we see makes I on went here? What is sense. maybe guess, And

Kevin Mitchell

So referring change? crack Roger, the market crack, to the say when you adjusted market index you're

Roger Read

Yeah, your indicator, market yeah.

Kevin Mitchell

information, this -- that up and for the cleanest will And and in it's that that prior or results and a to for XXXX on for restate then way that up all about it we're Yeah. the basis. XXXX on XXXX do Really, XXXX we and change we're make first we've be our to enables supplemental talked recast setting -- to in fourth us while, setting basis. for quarter, is same report the same the

cleanest just little like considered that. it's for we while, but the It's a make we've so to the thing do. something appropriate And change thought a it timing to was

Jeff Dietert

of and to then off but in the refining, And maybe takes outlook relatively we actually. oils associated that. offsets price those Brian some to secondary third in on and fuel quarter flat for picks up Yeah. There it see that lot over asphalts it. fourth kick off quarter, I'll volume, with But and and then and butane are puts some that, products, turn drop a

relatively of overall the our flat products quarter-over-quarter. secondary was impact So

Brian Mandell

fuel coming cargoes market. on I'd in with to oil crude out the cargoes the the that remain market, will sulfur continue heavy and think fuel high say high-sulfur both Russian oil coming all we just weak,

market. in we'll So to continue I see think the that

Operator

John. Please ahead, question of Royall next JPMorgan. comes John from go Our

John Royall

Thank you Good question. taking for morning. my

for press So DCP just little the color hoping your you synergies million. out release, in I a on that more $XXX think called

anxious those been numbers. about speak think to I you've probably pretty

so and buckets can in? any how you And and on timing speak anything should that to trade

Mark Lashier

Yeah.

the categories. even upfront now falls units. publicly more think, combine capture Tim, that there. provide -- held And the business that Operating prolific then before color the commercial there's, into own. our more roll the think, of $XXX pursuing can two I into million or close you synergies really actively can we're little we John, synergies of the we we even a roll-up as I as

Tim Roberts

Look, to probably point, at with this time a out we're going with over is we We costs. this. At million. Yeah. about Mark it's to It's $XXX third looking regard correct. frame, came probably think

You got it two this around anticipating into like is anything this. we're the deeper, to hoping but side. they're two further third indications And years capture just there's more us once It going that. on to initial you that later likely and fully there and we commercial see that, take or get side We're confirm It's call commercial I hopefully, sense. driving to makes are probably do is you update another are. validate can else, the

the in at two processing now at effect, the you long-haul most at opportunities and those, value right key the we, creates the value. of make and in the pipelines means Permian. world, our have look coming place of where right Conway, the are DJ gas it in And you entities there place. put look coming sure Mont the now in to also you the Belvieu, When together, integrated tremendous gets capacity out barrel have out fractionation chain, these regions. We at Sweeny When

more So giving on you I that, as going to forward. forward looking like we dig said, we're details further

John Royall

of Is does that say doesn't at then just growth how bottom seen the you just of market, then any expect let's CPChem's Okay. do looking to two That's improve the hypothetically, helpful. reopening the here. And that market? market from risk a there China impact ability the projects? And self-fund future we've And there? chemicals

Mark Lashier

Yeah.

producers -- think, value John, bottom. kind back I were pulled really that that the squeezed on of chain seen polyethylene that Those you've ethane at production. margins hit the

continue period. and where So point you clearly nobody North demand they're and online Margins to then up, capacity passed great hit digested, some of we've bottom kind that through cash, to that we'll start time, work for see a we've way you'll our increase. to have modestly out gets and can going bleeding coming see operate is that's globally -- because as ticked at but continues the there's while in America to discipline be that

there And certainly back. and coming an number China signs at upside of China back. is to We're their call that is not are going

starts, of and think I noise the it productive is fits China coming could directionally. but come in certainly, out

Operator

Our Please Ryan. Ryan comes Piper question ahead, from go Todd next Sandler. with

Ryan Todd

on returns. The Great. quarter. buyback out was X starting Thanks. strong Maybe this shareholder with

we something a about million quarter at guidance As mid-cycle that XXXX of $XXX on think Analyst of Day $XXX you've buyback going suggest million order would recent forward, provided the in environment. the to a

We're clearly mid-cycle above the environment.

the pace Should You the high use aggressive very cash remain guided building to we be on should shareholder of of returns about on might How were balance backdrop think sheet? the more the cash? the quarter. end look that how this at you excess And constructive? versus

Kevin Mitchell

Kevin. it's Ryan, Yeah,

you're of where end overall level. So balance And it's -- we're I pandemic. give over context the relative the and to billion. the sitting to to that about somewhere condition on cash just in decent just reasonable we we some fourth assume a range we sheet of right, round healthy that before continue would year did the the also to the We're think high end $X were quarter,

$X end added our the over debt we position XXXX. by million added billion I'm billion of pandemic, subsequently cash here. We the of we've Over consolidation since paid the and but of off BCP We that improved impact $X pandemic. X.X $X.X ignoring the

we enhanced we've into net-net, by billion the going the balance from pandemic. the $X So sheet where were

quarter. flexibility. also the in care be roll-up second to we expect the DCP to lot which a But got of, us take of And so that gives we've sometime

tell as $X.X we into for and sure we that's cash to we above some continue these make won't all while want really of have flexibility use I transaction. billion to flexibility to close conditions, do you we all a go But that So we And to of it. of look dividend, should we do increase pay be a expect some dividend. to also the returns about to the think DCP impact want dividend. we context but off shareholders, remain would all especially We'll positioned at debt, the incremental -- we I on of bit that that we roll-up, as the mid-cycle to the to year, a what the speaks that, think would cash to growing good This both plenty competitive in see retain will we committed secure, it rollout. of

at at And We're but buyback the healthy on level flexibility we'll look pace. potential clearly there's a today, very that.

we'll it's very got keep we've And in given we with comfortable out ahead we -- probably we're the focused so near something and that transaction that us. the are where prioritize of on. there But DCP pretty term,

Ryan Todd

the product thoughts going Excellent. else. what declined wonder Europe you're gas in big months, natural and you in coming in There's has could the market a expect effect. if and seeing you you going And now? the What somewhere ban upcoming shifting U.S. any bit seeing Russian discuss the some recent about I And spread you've months? on pieces between expectations into gears significantly an in got and then what right moving are European maybe little forward refining.

Brian Mandell

at We're natural mean I about with talk gas some. Rich -- issues gas natural not off plant. think the coming can the I

Rich Harbison

either. that natural on really disadvantage not our purchase as operations, to certainly for we So has primarily see of our us, for peers but some a gas impact electricity, the

with cost of So that's still impacts associated out continue to with gas today refining past and as play there higher numbers some be nature will in well. the the are we put the natural in competitive

set of that market the continued for and Russian scenarios impact really will are as that then marketplaces, minimum The price the shapes see that forward. here resupply those and will the be moves we'll challenge supply for the the up the

Mark Lashier

like cash own mitigating to project, questions risk these self-fund U.S.-based covered will CPChem risk -- to Ras projects, the I mitigating that of Laffan don't exposure around both Both XX% there. project off-balance cash generating asked market the our those Chems think XX% of sheet I the one of John and they substantially the that's their of of circle back. enough projects. I'd the two be finance, project, outflows,

So predict structuring because but undertake mitigated it's you is debt they're risk, support the going never to I of can that highly to those no projects. think there

Operator

ahead. comes next Cheng question Paul, from with go Paul Scotiabank. The please

Your line open. is

Paul Cheng

Hi, back that is cracker into you under be several guys. the the How going to we is major with CPC going the morning. Kevin, two should assume? for to go years distribution for construction? assume the CPC we to Good Maybe it's be next can So [Indiscernible] of minimum the that given continue quite some spending more will also financing and will just think that that a do own build up the their there's they and that in year you Or cash is that capacity use heavy that ahead? payout? they decision and to

Mark Lashier

And exposure those assumptions look if that think at to if foregone XX% we you Day, I probably at financing, combined. you maybe two of look our really spend years. and over about that's dividends at out Investor look on the project four If aggregate you spread about capital is had projects those the at you earlier, -- again, if talked projects even look

a impact -- generate ability you it's major to overall. cash on So not want our Kevin, to do

Kevin Mitchell

Yeah.

Mark on referring that financing. expand to level specifically just financing, -- a bit. little So project off-balance talks The to when he about sheet is

Triangle So Golden Ras and the Laffan Polymers at Petrochemical the project project financing those level. at level projects

ventures equity And that's the distributions fund not sheet, fund those joint its anticipating sheet those continue projects. into So to own and to that would to its be owners. CPChem fact, to balance not on have able to that making we're we'll still go in balance contributions and CPChem's do to

But seeing, based but be is expectation environment that's there discretionary distributions there's like. any will out, market distribution CPChem the available be. impact. the period. dependency this overall cash is -- it's an by Obviously, all pretty not CPChem their a manageable looks we through within Anything flows spend capital a investment receiving what to into from where for of cash still on overall what Clearly, expect we're on

Paul Cheng

sensory to pay any Kevin, rough expect to have? XX% estimate or do or or you out XX% estimate you that XXX% earn have you CPC any whether

Kevin Mitchell

have Yeah. to than Well, XXX% do expect it less would because be you projects underway. they capital the

slate ones So projects, there's there's big a this we've then which the about, smaller will and of two been year. that actually talking several finish of

to to going less actually the guidance to on be. specific we We've it's from coming never expect XXX%. regard has be distributions pretty strong So back And been cash our history than given CPChem. with what

Operator

question Jason. Cowen. Please Gabelman from ahead, go comes next Our Jason with

Your line is open.

Jason Gabelman

midstream. rationale PSXP wanted of first in obviously, the Hey, brought portfolio, in more was And ask whole M&A part the on afternoon. rolled to you've, know and across DCP. to up flexibility you I good have I when

on the the not the core you portfolio some assets at other reoptimize that there is of be wonder I may any that midstream in this side, point? desire So to have

my then is dynamics XXXX? your mid-cycle marketing which just for in business wondering that to markets on an business, the in perform I is above can that has pretty any there continued Thanks. that well. question second And continue was support that, be maybe to if were margins. And there margins outlook

Tim Roberts

Brian. Roberts. Tim front is that handle to it I'll end hand this Jason, Yeah. off

from. regard think the much a is market had the this And our producers levels industry, I side cleaner important, some recognize going as that evolving. on in we'll and consolidating. just did work you to We a right. you're There consolidation overall in think DCP. cleaner with are it's ownership in done do We well talk have completing is of simplifying We position process do structure. PSXP about be

the see that doing some midstream too. infrastructure guys of You'll

clear if probably a that. to pay And So task got there happening hand. as going I attention it's is we're what's going opportunities, be there, out to real at think but we've to

We and at is be going believe it. end the the integrated It's year well. somewhere end us, It integrated to to the it to towards get XXXX, take leak may our get want we this now successful at task into and Our by expectation right DCP of synergies. done deliver hand is year. of but

company. along value the pretty and most with regard You drove to that's of impactful those

makes And shareholders. can eye talk it assured, that for something an value So and successfully. spree, we integrated But any what's there's if do to and there ant now, compelling, we'll we're out rest if do that, always spending it see we it's on truly right have what that's about but being open, sense. going our create on not out

Brian Mandell

year. well, increased business, that the business. will say perform in as well perhaps better that drives continue On record But marketing generally That not a was volatility as we to market, I'd XXXX. with the

also there record has things a our U.S., we joint and European market our in the in to retail business. perform. even been We venture card that expanding Also, business grow to helpful retail helped the venture are continues issues growing to have year, us, and credit our had year that joint last like continue

business. I think we'll continue to the So grow

see but as the earnings You'll strong, perhaps as quite strong not XXXX.

Operator

The Blair Holt. next ahead. comes from of Please go Matthew Tudor, Pickering, question

Matthew Blair

think might my for how Could Thanks the do pretty And about talk affect favorable. QX morning. able wide taking that? so then ask you you I Trans you to the Corridor? question. wanted what's expansion they're on these driving in discounts, discounts good Mountain discounts? the finally, will Hey, these be about Central WCS Thanks. WCS to And in capitalize

Brian Mandell

XX we'll the production the Inventories X Well, but been demand. shut supply weren't and border, down. much million And of of barrels of and kind market that's differentials. the Canada crude in were the million on December, market another pulling in the off about all was refiners had X.X of barrels of of for XX was million XX refiners storm off as heavy had a off backed million winter WCS January. of then WCS. pulling you in market the not Keystone north where that barrels crude, barrels There you with out, which had and things off market. you we're pushing have high, days, the number There North very the start board

So add of -- if that of you that weaker have they than that meant kind dips all all up, been. it were WCS

early now said an TMX of in they date ground. update their haven't in-service provided the pipe of in the XX% quarter They the their fourth this that changed that is year. January for

the slip and will think full won't We to is start-up expectations internal don't immediately. into are in Canada. rates that need product be you pipeline another XXXX exit that Our achieved

don't much. doing we So it see

always into to The get markets. have X and China to first overseas, those they'll anywhere call for to be go before they Pad price those or so X barrels Pad will

Matthew Blair

you. Thank Great.

Operator

ahead. we Next, Please question Cheng a have go from from Scotiabank. follow-up Paul

Paul Cheng

Hey, guys.

that you keystone quarter? the also, running to going the first of Because downtime, way. run been And has quick. -- after a then in that real what WCS one in quarter? share Just fourth depressed the pretty you do And can expect you is the how with at much you're believe turnaround year I the actually

XX% where are XX%, the Wood River? I one we about think at in and point,

Mark Lashier

we less talk reasons, commercial for system normally. our how run. Wood don't, into some what River refineries generally of about we in hiccups. But run much QX, In we ran So WCS than had we and course,

importer We of to the largest U.S. are crude Canadian the

Wood We Rich, talk expect, comes we Wood up, are as more, maybe run can about River River. you in where we'll back

Brian Mandell

Yeah.

River, go event that affected their start River that contractors an there with associated out incident -- unplanned for Wood and and the by our let employees, occurred at thoughts So Wood were me families that was event. saying

an was But incident there there.

right we to diligently affected to utilization normal by quarter expect second is early to first We outlook operations quarter continue returned the are this, to our now and Paul. that, that that working utilization and on increase increase was current the through

Paul Cheng

tell you Wood River? that the Can what's us of runway current Okay.

Tim Roberts

plant? give by we Do normally guidance

Brian Mandell

Not that specific.

Mark Lashier

give run of plant don't that Paul, Unfortunately, current Yeah. we as what are. to guidance rates by type our

Operator

of Jeff. We have turn now call. today's call to the reached I will end now back over the

Jeff Dietert

Phillips Emily. your Thanks, in XX. for you all of Thank interest

or call please your you call, time. Owen today's Thanks have questions me after Simpson. If for

Operator

today's ladies you, and conference. This concludes Thank gentlemen.

may disconnect. You now

Phillips 66 (PSX) 31 Jan 232022 Q4 Earnings call transcript