Phillips 66 (PSX) 31 Jan 252024 Q4 Earnings call transcript

Company Profile

Participants

Jeffrey Dietert	executive
Mark Lashier	executive
Kevin Mitchell	executive
Neil Mehta	analyst
Donald Baldridge	executive
Douglas George Blyth Leggate	analyst
Theresa Chen	analyst
Manav Gupta	analyst
Brian Mandell	executive
Jean Ann Salisbury	analyst
Roger Read	analyst
John Royall	analyst
Richard Harbison	executive
Jason Gabelman	analyst
Matthew Blair	analyst
Paul Cheng	analyst
Ryan Todd	analyst

Call transcript

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

Operator

Welcome to the Fourth Quarter 2024 Phillips 66 Earnings Conference Call. My name is Emily, and I'll be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded.

I will now turn the call over to Jeff Dietert, Vice President, Investor Relations. Jeff, you may begin.

Jeffrey Dietert

earnings XX Phillips to conference call. Welcome Commercial. today's CEO; Kevin on Rich Refining, Marketing call Midstream will and Chairman Harbison, and Mandell, Brian Lashier, Mark and Mitchell, Chemicals, include and Participants CFO; Baldridge, Don

of Today's presentation can and XX found on financial along supplemental information. the Relations with the website, operating Phillips Investor be section

Slide X statement. harbor contains our safe

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

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

Mark Lashier

Thanks, Jeff.

Our margin breadth platform, the results our demonstrating and reflect midstream strong The of of advantages of operating performance our in a stability resilient the environment. integrated challenging results portfolio. a provided strength

$XX.X July share and market. our performance, of In year the fourth This In quarter, XXXX. lower we more was achieved crude utilization. goals distributed with costs dividends repurchases billion to since our the year we target of average Refining, set shareholder capture improve above industry consecutive and through second distribution

both costs record the reducing while We also barrel. year, full product our for and this $X clean quarter per by set yields

These in dedication organization. the a by to commitment people results work, and excellence testament to the are Rich's hard

on We billion. DCP capturing synergies. exceeded In adjusted by $X.X $XXX transaction mid-cycle EBITDA the million total, has of run DCP target our Midstream by the million acquisition synergy $XXX rate increased Midstream's

We positioned our for billion goal ambitious exceeded an savings. $X.X company of $X.X transformation billion the set of savings. rate through We reductions achieving run these in success goal, and cost business

billion in least of dispositions. XXXX, asset As we part committed $X priorities of at the noncore enhanced to

announced currently are asset and portfolio divestitures. $X.X at the high-graded billion have of We

new strong making than ratio ended our component have continue level, of commitments. a key we debt are Although our and to sheet, target our net balance we reduction higher debt-to-capital a

done employees committed of the maintaining achieving XXXX. work industry-leading on safety XXXX commitments deliver while our am priorities in priorities important the proud I enhanced accomplish laid the that these performance. end to by out and we We've have and our XXXX, to shareholders completed strategic of to in

progress In brings X to COOP $X.X cash program. disposition cash priorities. the Coast dispositions. we're billion, This proceeds proceeds strategic XXXX, shows received Slide billion which of to advance our we asset of for Express the the and $X.X the Gulf January new using

continue to We assets of optimization. part evaluate our ongoing our as portfolio

This our between Slide through Midstream synergies strategy NGL transactions significant close recent of XXXX business, EBITDA of the strategic returns. year. provided and X organic the announcement the shows doubles the We've this anticipated and including growth that advanced nearly our projects transaction. transaction EPIC strong and wellhead-to-market later

our assets year, and, energy significant being furthers and our to the continue growth Similar a platform increases closing, of to We'll transaction and upon cash billion. an are at XXXX to EBITDA returns existing Midstream's the platform leading attractive for Pinnacle opportunities downstream capitalize beyond. to our generate integrated strong mid-cycle $X to in adjusted provider flow free to returns. acquisition on acquire opportunity The footprint high-quality and which saw growth last provide we further complementary vision

for world-class Slide We've shareholders. priorities flow are challenging outlines by Supported strategic to achievable X set committed XXXX new yet over cash to of our Midstream operations, our operational XXXX. operating through Refining XX% for returning targets and businesses. we our

barrel the improvement a next turnarounds, adjusted Refining targeting have years. controllable in and We X of are over cost, continuous culture per developed excluding $X.XX

X/X XXXX, These the to plans mega-projects in up non-Refining Midstream in in additional by Midstream, place and total EBITDA $XX Chemicals In will grow continue which we have by to Qatar our and billion company by mid-cycle total to bring high-return will are wellhead to We milestones opportunities. expand strategy to represent to the XXXX. adjusted XXXX. our market start In EBITDA are in EBITDA. an our with expected Coast mid-cycle U.S. of $X Chemicals, we billion Gulf expect late expected

debt also of on dispositions. total and to We margin plan the the end billion this the of planned to reduce environment $XX as timing as year, depending early

disciplined value We our shareholder will deliver through priorities. continue strong increase operating to as performance allocation capital and strategic new we on

to quarterly over Kevin Now our to cover results.

Kevin Mitchell

of Thank loss Mark. Both operations million at and adjusted our share. million by the due $XXX plan include Reported share you, per was at to per accelerated earnings Angeles earnings end This reduced a were $X share. of per $X.XX. XXXX. earnings or to pretax the adjusted reported $XX $X.XX million loss the The $X.XX impact Los Refinery cease depreciation or

cash $X.X returned repurchases. We including flow share shareholders, to million and generated operating billion of $XXX $X.X of billion

results to I volumes, polyethylene will chain record to decreased earnings costs the move mostly company on In margins margins and segment export $XXX to million the Midstream to Chemicals, Slide maintenance. LPG addition higher lower results cover quarter. due decreased in X adjusted related increased, to turnarounds prior fractionation LPG exports. and mainly Total to results. now higher and to due compared

the Refining included the depreciation was of benefits Refinery. market of primarily for Lower new reflect Los spreads of quarter indicator crack clean the record product yield XXX%. the increase the The quarter, our of butane was weaker market Angeles full results capture result and blending. in accelerated which partly of Capture

at as fuels, lower results In renewable mostly higher due due results. to complex Rodeo international were results stronger Specialties margins lower to as margins. and the Marketing increased seasonally well

in million. operations, flow working the working a quarter. Slide mainly excluding of Cash the million, cash $XXX benefit for in capital a X was fourth change $XXX capital, shows There was from reduction inventories. reflecting

$XXX share capital funded billion repurchases spending. we to $X.X We shareholders of million and through dividends, and returned

$X.X billion. Our balance was cash ending

first turnaround in the and global between crude worldwide to million. in and between $XXX the the have utilization In quarter to rate In XXXX. a million $XXX corporate to we expect O&P to costs low XXs million $XXX utilization to rate of anticipate we and million. expense be be other $XXX quarter be turnaround the ahead the Chemicals, expect Looking Refining, mid-XXs. and heavy We and be

full billion. million $XXX be year, Los expenses turnaround to per and accelerated Refinery. be and quarter million we of $XXX includes the the Depreciation expect million. This Angeles between $XXX depreciation approximately at amortization will For $X.X

Now questions, up the we call. open the line will for Mark wrap after will which

Operator

[Operator with Neil first Goldman Sachs. comes question Our of Instructions] line Mehta the today from

Neil Mehta

that that extent can what's off Wanted how transformation. to the on business this is there be helpful. best way fast part there? the your to feel M&A? To around a becoming the, Any to It grow? or the to what's Want a And and on much the focus there business. business through does where organically kick is get perspective Midstream to get of Midstream that evolving true, get more important would the major is parameters

Mark Lashier

dive had talk Neil, thanks align with the full capacity. us into that that XX wholly-owned question. and for been Phillips I'll into ago, DCP, about. the your And strategy the details. we've years rolled then several But that got control assets talking up Don wellhead-to-market assets high-level can with we allowed a view, of to about consolidate those fractionation to

but the perspective perspective. to of we they've also footprint acquisitions be the organically done, volumes had right based right the inorganic more us focused Permian. a seeing what piece, us And knew strategy we you've as look capture to that at an and inorganic And getting done, and on we've to we've have an on that from leverage allow But coming opportunities been inorganic to the been organic assets and position. fill the both that really immediately for to of value very out to you accretive that's the that things grow that could out the

of examples the Pinnacle are both So and acquisitions prime that. really EPIC

we believe opportunities details. So do to are into I'll both. dive of the let But I'll there let Don more

Donald Baldridge

we've a we to what platform EBITDA. And do you can an Sure. see can an clear NGL basis. growth to annual value and that being deck Neil, we on $XXX to growing the in that within a we capital digits opportunities sight able now I line execute $X we have grow growth put our organic million think billion chain here, see annual because program. what of you That's believe at organically that slide rate Midstream mid-single together is

have. make are are So if I to a it's that of that the strategic standpoint, really attractive from from a that acquisition there the we Certainly, platform think opportunities sense, testament strength an standpoint not dependent and look is it. here at on program our our activity. hard future or a within we'll premised and growth require footprint But opportunities on M&A take executing evaluation, return-enhancing organic

Mark Lashier

focused strategic whether businesses in as Yes, we capital that make Neil, in we the each Midstream, Refining enhancing saw return those or priorities on laid as of you employed allocation choices. on in that our we're it's everything these out, in capital we do,

focused. returns-focused very value we're So and

Neil Mehta

structure? capital of about than And the do You helpful. very disclosure a debt is new and becomes you think a the net then Marketing. the part Midstream being just to how optimal about That's as bigger Midstream provided less Xx today business, follow-up

argument there's why So can as earnings. more is an fee-based run a that has levered And little bit the it more the that right number? business

Kevin Mitchell

Neil, I mean Yes, right. exactly you're Kevin. it's

year, you heavy recall, not the able cash lean to we we As into last because reduce we which partly will shareholders. of deliver leverage returns had course were over to objectives on, to pretty

the debt and basis. back balance target to sheet of while to like sum-of-the-parts a so we balance billion $XX almost set we debt-to-cap of think also on And have a a sub-XX% getting the level,

a sorry, having net and cash at X Refining maybe or business. Xx as segments, $X balance bring stable even can billion than And debt in the of M&S the at earnings the and strong $X context Midstream Xx segments so level, a the for ourselves and of more -- think approximately X we sheet billion, those less mid-cycle generation,

cash in standpoint. look the company -- look how upside us Refining are So context a effect, you sheet the from balance in at of flows all at the

Operator

Research. from with next Doug Leggate Our comes Wolfe question

Douglas George Blyth Leggate

to think I your Mark, don't I -- words mouth. want in put

I disposal of one don't heard new of actually you along something target. this our heard think say think new the targets. lines I disposal I I

early XXXX, is down wanted That's your So billion, lot are system -- rest with scale ask was of clearly what Europe. a but first dropped I heard I way I you the where the the about the additional hit I of guess it you and specifically your in debt the targets of retail disposals. $XX to scope for question. realize And my

obviously, hear stand-alone the EPIC in the see embedded of stand-alone know value versus of just in are midstream failure you it's the what or of trading. situation market a recognize a in My to and maybe I a follow-up is is see lot bolt-on, the a where the curved-ball companies to We about question. business? ever structure scale separated but bit for a midstream And the your midstream But specifically Neil's. terms Phillips, do is the importance where and terrific Midstream you of as somehow a players? the value the follow-up this a around really

Mark Lashier

On Mark. put another we is This Doug. questions, dispositions, did your there. for Thanks target out not

I that is there. working the think one with in But achieved actually we and strike date. firm we still targets and We there we're we've on think these We we found and still out to closed bit have the And it that active of a that. out our them Germany, deals. numbers out that received to counterproductive for cash opportunity discussions Austria retail in Europe, put can we're around negotiating when little in deal you're there. things a

others. We if we've will value that be to determine portfolio at have looking got to our always higher assets

some value to And about in shareholders, get it's we returning balance unlock to we'll proceeds creation, and capital what value in or as calls sheet our view into of investing always talk our whether redeploy about entertain businesses. people and trapped want those we But augmenting as we how it it's well. priorities, assets, strategic our those calls can sometimes that inbound things,

that going doing so to ongoing. we're And be

not you're to put there. going firm But see out targets

it focused can You operations. in about like improvement think just as our in portfolio, on continuous improvement continuous our we're

agree the from getting really that in that of full value things just the seeing Midstream, then the embedded of And we but we're started. Midstream, we've not done value we're

some great doing Midstream. People from market, and that some we're that. think in there's we've shares around are the good interest questions, gotten a long-onlies response understanding. what of We've in great our because our -- I excitement showing since EPIC got acquisition,

petrochemical we when we business to is to into lean as our those We do, that question So hear and integrated story better have that businesses. Midstream think a somehow. can is we're businesses that midstream Refining move our still evolving, an the story separate business you'll the out keeping that shareholder more going by business believe value more integrated to NGL like and through we it forward. going with create always you the There's on about year. And we

Kevin Mitchell

Kevin. it's Doug,

If comments. on a public create complete around marker has it, Mark's of add question that a helps not to we Just provide... to part would on the separation, but was a more vehicle

Douglas George Blyth Leggate

Yes. Exactly.

Kevin Mitchell

over before. That's are response feel of think down Valuation. times immediate there time, We parts, that you major And over been times I if now. we've And the that. phase that decision we full to went sum traded path there a we're have back that's at history, haven't. in where And probably the right look don't make. we where to

way appropriate the from leaning on that X chains messaging and point as that it, at have, the the that the really the the think, described Mark disclosures value Midstream this business, -- I value and and in in value primary we integration investor focus providing comes time. around

option that That, is what always is suggested there. you --

near-term plan. would we never. so never going But the And it's be not to say

Douglas George Blyth Leggate

risk I [ here. is MPLX because, thinking on the marker But risk really If I clearly, business the follow-up quick, I a remind guess. point. the because that, put obviously, us of your just German-Austria is there's to I the was appreciate EBITDA But there. a My on I take a example, Jeff's at we're multiple Mark, going was what quick ] follow-up lash about it. may

Kevin Mitchell

Yes, Doug, million. $XXX it's about

Operator

Theresa comes with from The next Barclays. Chen question

Theresa Chen

can on debt the capital? path including that? achieve there? time about you leverage to earmarked can we First XX% -- future asset think are to should you German-Austrian below the update, forward would the that? get net path the for us sales about the to about you think How think forward to expect assets And frame help What

Kevin Mitchell

$XX Yes, a at I'm one, all debt to but And way that definitely in context. and far the enable between XX% come sub-XX%, look -- think forward will all path fact, saying less kind It's that of of billion, in one well. we neat the Xx and the you won't a those Midstream same put that level absolute the be $XX and Theresa. other, the there's billion the I M&S metrics reasonably the too they together because, symmetry EBITDA, in the apart than than of out, kind less not

cash our not XX%-plus $X in really the generation, XX% a leaves it's goes sense, of do $X assumptions, based on acquisitions look mid-cycle you plus now, debt make if either of billion, allocation you I flexibility at a do. set model $X But of is a seen so and billion is combination buybacks, know sustaining so capital reduction, billion to dividend but of billion. buybacks organic $XX capital billion. things to distributed you've shareholders, shareholders, that's and/or $X to that's $X our you've of the about mid-cycle, on right and that of, do got billion capital And with budget, if program math $X $X us the that's -- we're the billion incremental bolt-on some That billion, that's so like -- lot capital mid-cycle

retail working are business. addition, Germany-Austria In still the we on

fair amount we flexibility of there. get a there's how of terms so And there in

including all ongoing cash targets commitment returning feel we comfortable are those pretty our achievable, to that to shareholders. So

Theresa Chen

visible potential considering coupling synergies seem on for the [ for that the comments Midstream assets Permian like and growth, and in market, as And totally as understanding back here, candidates to and more [ been incremental Hills perspective. shippers about the a Midstream ] obvious from there you are both that both in we additional what's then about well ], when processing. about right topic thinking some other bigger and BJ M&A going need strategic Sand doing EPIC, then are of economic opportunities When Permian think have that who acquisition both the the Don's with

here? of preclude Do major concern some a the midstream footprint? would along obvious also think more that you opportunities FTC your Is

Mark Lashier

from in what what what up importantly, to there, does necessarily grow that And to considerations Yes. our in and building And creation from earnings. our returns assets it does of returns the G&P is us multiple Theresa, how perspective. are looking additional that opportunity. in our to uptick accretive provides are play, I a we assets going and for things focus particular broad connect to But have low would at Because build pricing while intimately the what a things a those into FTC do from and easy full we us think adding also we perspective, value any but know obviously, quite on always that's at that greatest upside take it inorganically open range I consideration realizing attractive and we opportunities does take system, transportation out to have into really us we shy think it don't a that it at organically? see away assets. what

Donald Baldridge

Yes, I'll just add, Theresa.

I that that platform. creation, focused will is drives the And -- that on It's really opportunities. our as of lines lens our lens. just not opportunities what that's really that just think along process, that's down the we an value be M&A the see evaluate FTC thought really our path M&A we well what scalable enhance are

But again, organic just we lot I back think within of to our see footprint. I'd a opportunities go

we're very foremost. on way, so and those our that And first focused business executing growing and

Mark Lashier

disciplined grow Midstream, We're for recognize going constraints. our just constraints, to we we're grow to around value going Yes. and Midstream to grow just be shareholders, We about picky bigger. to We're create our got more to capital capital to going not get what that. and very do. we're Midstream We've very

Operator

with comes Manav question Gupta from UBS. Our next

Manav Gupta

mid-cycle margins I ethane and weaker Switching [ understand, we trying margins relates chain as gears weaker ethylene seasonally moving management's when ] just opinion, know saw chain chemicals? to quarter. the and -- a in start can to relatively closer here, margins I'm We the a little. to towards it it's

Mark Lashier

a Yes, question. great Manav, that's

in things margin. a chain saw quarter, I think on in fourth going the their of couple CPChem

strengthened, they've pricing pricing up. position. ethane a course, things weakened, advantage I those their with will think impact great their both when ethane crude of show Of got But which happen,

the macro think to grow. term, the Demand longer in continues I is supportive.

seeing in rationalizations You're Europe.

seeing You're shutdowns temporary in Europe.

the in American that I about locations this our North record world. the exports of economics tells here had versus year, you think North producers strength other America in

for ever, exported the polyethylene first think more than market. producer North of the world America half I was in time the into

strengths long So they're and playing the to midterm in term. CPChem

recovery you You next operating And will into really year it's we rates. healthy And their that can actually, healthy margins XXXX. improvement. this good that see we -- pretty year. their see see in through into assets continued right climb and margin continuing slow end on out. of that see And And new then slow be the stepping by XXXX.

Manav Gupta

very Perfect. breaking improvement raise us the congratulations, understand went follow-up in allowed dynamics My you of quick big even. way, to almost like in earnings is some feels, renewable which million. that renewable, a here fuels, Help quarter-over-quarter, your $XXX by

Brian Mandell

did is We're million this We'll quarter. Brian. saying, $XX happy off well the we Manav, as with yes, by start. We a in that start ran the quarter. in

We our continued to cost lower profile.

As in the of to prior we feed we processed last the feedstock off credit. implementation CI we a as the BTC call, valuable higher ran earnings less discussed quarter

to Additionally, up gallons Airlines for million because QX gallons in of the didn't secured quarter. to sell contracts we've supply did -- to higher X X And United fuel airlines. SAF. CI more million to a material, deal announce jet QX of SAF couple renewable We of produce in we the a

diesel market margins, or a the forward to at regulatory weakness, RVO, name renewable of somewhat renewable affecting on continued additional mostly tariffs, But LCFS just PTC, on to exemptions, about small the keeps footing. have anticipate margins, We'll the renewable, on factors weak need clarity rules, few. uncertainty a refinery including that looking number thinking we just the

flexible our we'll more of We lot So feedstock. buy feedstock system buy a manage system. than We our continue needs. to

favored can and the the LP feedstock system. we optionality But to so move around renewable the And those continue most manage the in refinery the feedstock. we'll net at use to provide

Operator

from question America. Bank comes Salisbury next with Ann Our of Jean

Jean Ann Salisbury

up question acquisition. on about Theresa's I EPIC wanted the follow to

pipelines. moves I by processing most fill investors the more getting those think little add to a midstream to without capacity pipeline to I talked were NGL surprised more

off? compared inorganically contracts the to medium are pipes were but processing contracted you few peers, kind does under-indexed I you organically or years pressure that this the to either as before already in to processing start next those of on know . to the roll Given put get deal term, more

Donald Baldridge

Jean this Ann, Don. is

Mark, regarding kind we've a unpack and couple As for you EPIC But variety kind acquisition compelling your the on to certainly of us it's heard question key and from supply, and attribute. a very I'll reasons. question times, address is focus because of of one this of capacity a but had to

And to that And us us already an supply very Permian our that capacity. XXX% that capacity. expansion now, important Sand our provides as Hills at we EPIC about needed is right brings And cost-effective. pipeline is very the that and That is see being is that portfolio capital-efficient, runs program of reason is, us.

we our So supply pipelines. at year. of in we 'XX years, plant a announce move as us. that a also bring we'll a of Permian if bring another to the expansion to July and that's later position out I'd the to Pinnacle next grow on on that third-party plant in third-party expansion through expect 'XX, level be in this dedicated we this of as plant as as kind will you And lot well continue year means on that product of look

And it well fits coming the with well to combines on, EPIC We'll so when third-party off really you pipelines. that think be about very and supply capacity. product move all able the very of

to As volumes at the in fill comes of expansion that EPIC. grow, G&P end able with be capacity 'XX online we'll our the

room So our to it us to continue G&P grow really footprint. gives

what's that's So exciting. quite

assets. existing already really the of right and a right EPIC lot from them. connected for capacity We're the standpoint. us, spots with expansion in time well with an size fits So and It really highly is our

really straightforward minimal think synergies, very integration and when integration achieve. approach you So to costs about a it's with

it service So for producers. our Gulf supply, and allow grow really Coast continue to our all to provide shippers in very our our this and in, to bring system, to put excited good lines pull supply the us third-party of

Operator

with comes from Wells Fargo. Read next Our Roger question

Roger Read

Kind at do gears a on crude kind here? of fundamentals, right. crude that's bit to supply, deeper market in of the X all Refining, little if the overall One, just second as see part that, look a shift availability. then questions. the you main you And Maybe of digging little how

tariffs, You've on supplying have obviously, here, a of thing. on that got, countries parts sanctions been sort crude side, lot policy that moving the of

Just kind how question, things? of a broad but see do you

Brian Mandell

Europe, Roger, we with Brian. demand start product and saw and and increased switching work Maybe U.S. bit stronger demand for where almost demand driven and stable saw on X%. gasoline, think, in then gasoline in in a vehicle XXXX lower We too was outlooks tariffs. sales. demand EV retail this on looks is vehicle kind I'll up strong demand reduction XXXX On showing with a lower we Asian demand fleet of crude the supply, by Chinese outlook, we'll up GDP a growth mostly bit, growth. prices. The

U.S. and our in X.X% gasoline the XXXX So X.X% demand globally is forecast up for up for

demand U.S. bit. actually was forecasting Malaysia for demand XXXX and over on X%. lower distillate demand X.X% side, particularly global demand 'XX focused distillate prior X% Currently, quite versus at was distillate averages, X-year distillate distillate Indonesia. year. And about with 'XX, across under India, U.S. inventories a X% up U.S. about gains We're XXXX And are global than the up X.X% XQ XXXX. XQ

Canada Mexico, differently. that and think, I markets bit act know view a of question, is there have our tariffs tariff the in On going that to tariffs. if all, But will little we're we don't are both assuming first

thing Canada, in think happens TMX tariffs So that first gets is we filled.

that incentivize the a U.S. because the are thing is, crude the any into move U.S. move Canadian happens fell. production of differentials, to actually in will into will crude There's before inventories The crude to to the inventories second lot the low, has differential, ultimately, the value But cuts. widen currently, WCS to start there's

as I IV the of do some to think [ and ] [indiscernible] work. will there supplies, PADD aren't II, parts crack have also many alternative PADD in

We into then that tariffs, Mexico Europe, on crude expect that those goes day to will crudes there's we And a come would be Mexican U.S. logistics. widen move displaced. to crude other the on would barrels and firm out. as will see of Asia, puts think comes year the We maybe will on differentials of the about It Mexican side, and OPEC on inefficiency a in. market, to the the back to XXX,XXX bit back more heavy expect crudes barrels the just But

Roger Read

I'll turn back. it comprehensive. Very

Operator

JPMorgan. Our next Royall with from comes John question

John Royall

a So my maybe Refining can for at your outlook $X initiatives targets? in that rates the ongoing billion slides, if at touched reliability capture Day about Investor you've on around that you talk think and of remember of is EBITDA. achieved question officially your working According you number you business those side. weren't your the around I also mid-cycle. I first had correctly, work you have some OpEx to But

the it that still there. remaining next like $X So some to I'm opportunity be Because years. couple does there's really just up over that of billion can possibility moving trying think through some if there's feel

Richard Harbison

going organization fantastic. question. the you I am the of is can't been tell work for organization, This how and been organization. proud on Thanks the I It's the inside Rich, John. that's

a system. we've well as On operated the reliability quite front,

that is utilization for of drove a that's actually We a In a fact, the healthy, quarter, at which sitting number fourth consecutive entire XX%, underlying really us part a driven healthy to industry and the over reliability crude were average. we availability nice matter year on a quarters by the of mechanical for actually the As us. And X program. very XX% across year. achieved units, our XX%

well really, when working that have programs being the market in for So the right? to fundamental that's reliability the been And us. So there, really reliability. market is

there are them high-return, on of been we've environment and tough has ever the now is been And highest is in signposts an some we've that quarter their 'XX. yield clean record right are achieved program showing And it's working see that increasing around market comments. our That one but low-margin product the XX% And of through. part other capture, as you the really in really mentioned there good this projects The organization. series opening -- way those low-capital fourth indicated. was there. as the to a of

that's been Now by for supported years. but on butane, that's going seasonally,

yield entire achieved There's product some -- that's across yield product year. also clean we still underlying the an And XX% that clean improving.

performance. fantastic a So

And what's is the most our actually through yield distillate marketplace, Brian's that pretty we've important increased about consistent process. is on with that which stayed but gasoline that flat, the comments yield

seeing that of we're solid aren't improvements. led These inside quarter yield capture changes occurring here plant. XXX. in -- And to So fractionation actually the market the that a fourth that's just pretty are

on reduction, And The per last that our part share proportionate working we've out of we that's right, the our line. $XXX includes that that And there. -- cost been hitting expense. that really see we've share that But roughly, barrel. our is million WRB, clearly of of that operating dollar moved mantra

that, to range. the with to reliability is that very additional through talking market billion. on And well target improve. components, to continues as within achievable, that strive mid-cycle that's So $X about feel And you're that the and market the capture, continue we're going we that that that

don't the going with we're this whole I out to program, continue to that business. drive We're efficiencies opinion the think leave But with you let of done me right? the

return these that And environment. over. high be standards of in the reliability products. focus our all industry-leading valuable to Our safety going our small going production we're is on with to going health, of increasing to never continue most And our journey and do we're with projects

Mark Lashier

Yes.

units, journey on well. the as actively from the units operators just pressure up harvesting those are the and puts crude Because refineries. with they units opportunities get the that and and downstream in you as them on are the there throughout reliability plants crude out the better taking downstream, out engineers and teeing of the Our pushing hyper-focused

to more up inefficiencies opportunities to and improve, for continue and open do those drive ways this going day, out, we're looking every So more reliable each and throughput. to for throughput

John Royall

if Very thorough. and follow RD I margins. could on just up

you Would that will Z already You've or are thoughts expect to [ have seeing play for period out capacity your look was of we hoping the no some in scenarios maybe But XX RIN what on PTC time, could Or out? difference? given the plug that different end the for to year? up the on in like on where some the in a extreme industry? BTC coming this I margins. sustained ] we of And dig kind would And what for particular. how the thoughts

Brian Mandell

happen, margins John, PTC to the margins, when or BTC renewable and have about the the it's feedstock or the above, and to the think a the product. that think we're think in a value have start see product of cost to about value there's and of Brian. jet final if credits, drive tandem the none to all of doesn't cut. you stock feedstock you going credits, Yes, if I RD And the margin. to of plans there's other And the the move then

biodiesel their we've when for even back cut the plants back market. less helps biodiesel, on seen cut they as margin so expand because margins there's are So diesel now the low runs, that renewable

margins So the we'll see all drive those tandem things to in work operations. for

Operator

comes next question from TD The with Jason Gabelman Cowen.

Jason Gabelman

assets? the relative your to base? to position asset company, down optimize shut some further but the has think refining you're Midstream multiple been within the only one refining wanted more with kind COVID corporate Refining system ask right right Refining not pretty of of L.A. support your the on you the to to the in -- structure. And of I see to rationalize feel and peers. like they've as about you after size you Phillips assets footprint, the potential a refining since Or get do shutdown, competitive do another

Mark Lashier

structure, our impact on Exiting material part -- L.A. there. of Jason. that's does Thanks, story have and a the will cost

I where pressures, it our a if was those not make And change, those that California, viable we'll really conditions the it continue, we're an different of things -- our location it evaluating to evaluation and what of assets always really, those in certainly, that's But in each different decisions. moved is portfolio. and we saw to think has set assets opportunities. ongoing all

focus, to focus may us be get day. want better need We Refining, anything we to in would that assets, we we those where need want what we've in entertain those don't face need people better that we'd but of do on would that every we're we We know getting to don't going get We to in conversations. know bigger necessarily to Refining. to to some down. indicate There have other assets staring buy the shut and got

array to enhance upstream the markets opportunities ROCE there's And to that of their that volumes just grow not to of positions facilitate. because we there some opportunities the grow can our Midstream to grow. Midstream get can again, are for really materials business while And leverage going we grow we're that got we've we we and to a up Midstream. going We're process, customers to wide open Midstream to advantaged growing volumes grow and

brings Corpus one into upstream that's us. can we monetize to Christi that opportunities Mont Corpus of affords the It hub, bring array wide hydrocarbons. from to Belvieu. all us volumes the perspective, to It customers, really the does of And way things a EPIC Sweeny and just Christi, their for our the

Jason Gabelman

seasonally follow-up larger quarter-over-quarter, a my what be pretty on is business. And the large There was than marketing expected. decline would

increased when really in tend you moves in crude marketing to but think see outside rapidly, see to don't I prices XQ. that downside the we

what if wondering you that elaborate continue on you if could expect marketing was in I to not. drove So the and XQ or weakness

Brian Mandell

Brian. it's Jason,

a But [ other spreads. turnaround sequential lower actually volumes had quarter. were sold, so overall, You're plant in strong that million were got things. a marketing and inventory created with our the when earnings saw, a $XX We a margins barrels we weakness. XX-day big thing of oil out the in impact marketing prices. base oil right, million we impact. $XXX QX QX about for There from QX, base But off that the And from -- little negative M&S reversed in ] in benefit falling couple were hedging physical the seasonal remained

winter to expect operational forward we see trend. the see business say, I'd question, of lubricants [indiscernible] new So from QX fires, impact California looking the volume In we storms that effects although Marketing should the And business. about on our follow your close January, volume historical from our fires did any didn't gap. we X% the addition from to and

Operator

comes from question next The Matthew Blair with Tudor, Holt. Pickering,

Matthew Blair

target a delta of additional much were progress. to Los the of levers I the in $X.XX On of to pretty pull? $X.XX you can you which the XXXX, think Refinery the controllable will the refinery that good barrel reflected the further Angeles new talk closure about contribute of Could then you already target, that of some cost, how improvement? new And at

Richard Harbison

Good Rich. question. is this Matt,

we So talk to how cost, base the pretty too. of So to is ex is all, do about. plan achieve This the barrel? $X.XX per turnaround $X.XX important first

expense, turnarounds. $X.XX XXXX, operating about barrel approximately a excluding we So our ended in

that. a about there's there delta in $X.XX So

operation see operations. has at the historically fourth ceasing of in do Angeles We our of Los occurring the quarter. been cost one This higher

the XX% So a deduction there'll across gap. the be that's of net and system impact, roughly

business we up And a will that's our the organization reliability you the using expense closing talked of that, inefficiencies. of operating at built about ourselves continually the opportunities challenging drives more already We're the exercises. and continued lot balance reliability your that down momentum through the I've been actually look to and transformation as programs reduce reliable. become

of push then, yield numbers denominator the barrel and to the the up the course, number. equation as product this the there's on of clean continuing And and well on backside

stretch, clear this a a It's achievable? stretch? it it yes. we a So of bit Is see pretty path. Absolutely. a Is as

down basis. we'll routine this. achieve And a by We confident I'm have that number very will on there 'XX,

Jeffrey Dietert

just to XX cost, our and Refining there, supplemental, of Page excluding the the line turnaround expense. second it's for you last on listening Matthew, for others controllable in, adjusted

number where is comparable. that's the $X.XX So

Matthew Blair

you the mentioned production that quarter. there Sounds good. SAF then fourth in was And no

X% into turn the is we XXXX, mandate. the SAF blending EU implementing As

XXXX? you EU increase we as talk that calls you're of production materialized SAF increased yet? And that SAF in So this Are you about what really not result would for expect you market? demand could has seeing as Or seeing mandate? a your to progress through

Brian Mandell

renewable going products February. and important are made think be We make renewable jet in SAF it in January. We'll we again to Yes.

If you tight or most market. in But what we what of out right to a jet pretty terms program linear the use the now, refineries value look continue at makes our make, determine in RD to market. versus renewable it's we sense netback of should

to we'll forward. do that So continue going

Operator

question The Paul with Cheng Scotiabank. from next comes

Paul Cheng

and I think here. is for Kevin the first Mark question

said a of target reduction You billion. $XX

this and is about billion $X So some current EBITDA on that a EPIC, priority. leverage. that accretive also But other probably you're acquisition. grow your than saying to hand, you're good through acquisition, you like to is your and add I think a meanwhile -- that's that the But that perhaps bolt-on level. lower your Meanwhile, looking

remarks more debt think that, do you priority mean, his I prioritize at you comfortable. I already That how actually So should how until feel reasonably saying, you we the that between level? Or -- Kevin X? a the think take are a reduction prepared as in lower

on So it that put opportunity, go and think if there's it's with you acquisition an delay reduction you will the further inorganic good debt opportunity. that

Kevin Mitchell

Yes, Paul.

$X to be billion be the So where debt are. clear, $XX just from we would reduction billion level a

is... $X it's insignificant. I that's looking think you the are said which billion, $X is not at reality But still this. billion, And how we

Paul Cheng

including I'm sorry, I'm but EPIC.

Kevin Mitchell

of EPIC. the including You're purchase

you have But selling been also at we've look to assets. Okay. also

proceeds on negotiations in Austria And we $X jet so from north this active collected and dispositions. about billion that assets in are retail on. just year, of in Germany we've the January of asset talked We've

of just operating And thinking the so than about cash the there's more flow inflow company.

be to fair to we're all a pieces we together, So flexibility able amount when to everything want these at of we actually accomplish you do. have look going think to

granted, like easier I digest have impacts. that say a a more a differently think allocation of In of And Now than doing when like a acquisitions. Pinnacle obviously million think capital bolt-on, $X something to balance lot acquisition billion I and that EPIC. something is naturally sheet $XXX than that about we'd instance, looks to string or

to and operating the the And as we I flow accomplish a half of alluded year, got we which well, here. Refining side. on terms, to lot boost want this we earlier margins of cash be Brian lot as overall in Refining what further flexibility we've on outlook, to this I second think into a provide get the bullish more think become able But will

it. debt And of we how would there's to end by of $XX look still we We this billion in to have must-have. around not love at but get not year. of the a a some that's flexibility that terms degrees -- of

Mark Lashier

billion be That capital that is Midstream EBITDA bolt-on CPChem and in would of growth of about the any the budget. premised not from projects on Paul, growth in increment organic, Yes, are our and half acquisitions. is Chemicals $X outside it

primarily, that Don's projecting. half business so billion-ish midstream capital kind And we're the the it's organically. other And budget of in business growing the all within is $X

Paul Cheng

if deleveraging, fully take that think on I you comparing to objective some to I'm is understanding, get will to $X of you just the consider which it's actually how I and priority? understand that. you quite or or billion say, better going deal $X opportunity, point of mean that with, billion that the trying acquisition do at accretive,

Kevin Mitchell

own we I -- if that we wouldn't the would at executing but opportunity, we'll that kind from need our what's make how that that we're faced of with to -- wouldn't -- balance funding a standpoint. may assessment and we of be be We time. have that. relook transaction make incapable We to on priorities, the able we'll about have Yes, think flexibility like a with other a would execute. deal sheet at on to to

Paul Cheng

certain business. will first Okay. recording you of XXX% the or see start the you PTC benefit the Kevin, think for second one on in your PTC of still Do credits are a that to on you're one. going to everything? is some until not real any bit RD report related uncertainty quarter We you a short PTC

Kevin Mitchell

a also rulemaking. executive been on We subject notices, what's lot Yes. I is highlighted. have can been of proposed of to many uncertainty, on PTC have certainty these is that PTC is or as put thing these published sweeping executive not only have reality orders Paul, what we are not. on a The know There there's orders you pause with don't say if forms rules. the

through we're this. still so all And working

first is is the reality we'll clarity. in we quarter anything One record X just until here. have options more or The there's don't

provisions we The more is those. course other could is of And go in the and is provided I that through first I are we'll are wish this over the which clarity. provide that information with something that these the quarter. the available, notices work

Operator

Piper comes Ryan Sandler. question with next from The Todd

Ryan Todd

outlook, really moving in drive early strong. of that see appreciate quarter, year comments comments the Refining lower you would quick higher any on is of on capture couple the gave Any side? which the a in part on Maybe or the Refining pieces might I you ones. capture this fourth rate the how

you as where things. terms think of maybe just progress transformation part of curious business as in are you then of commercial to And the on process, side the

Richard Harbison

capture on Refining rate, Yes, some course, the in turnarounds have indicated we of there. that we've

blending. an That impact from will in quarter those we a turnarounds will markets are certainly the seasonal as in that those butane benefit saw have well. that the So occurring. quarter, fourth Overall, continue first the through

impact that be there. should So

the our regional really balance the And in IR indicators is that on website. put reflected then are out there

Ryan, to So run you ]. really give or But run the haven't viewed if those, those. I'd encourage seen you that us good you those as [ will market how a insight to

Kevin Mitchell

also XXs impact. going The an to have XX% low or is utilization

Richard Harbison

the with associated correct. that's That's Right. Right, turnaround.

Brian Mandell

We to grow goal the had organization. a

more grow opportunities the the We're look to continue to at We're organization. hiring expertise. We lot a building outside. from

look and at And look margin do business grow as cost-cutting our business. as opportunities. our to the returns grow to in so well. of size continue that, We We'll we continue continue to we and opportunities at our

Operator

call back turn will the concludes over to Mark This for closing question-and-answer now Lashier the I comments. session.

Mark Lashier

enhancing we anticipated We're the XXXX. remain And ticked XXXX close Midstream to all $X this a the place XXXX. of strategic new cost stable We've off growing add $X EPIC mid-cycle steadfast priorities, priorities business in EBITDA competitive in our Chemicals And shareholder plans with with total and by year. with we EBITDA have Day billion questions. in and for mid-cycle to Midstream in XXXX later of pursuing Thanks your our structure billion to from value. Investor operational excellence

We're clean yield and product continuing to Refining. enhance reliability in to make investments

other Marketing and before Our to a company's assets the covers are of upside Specialties billion we dividends. base $X ready have from segments. adding stable and returns. from Midstream our as generation business, our The for strong cash the capital the capture with earnings contributions market expected sustaining Combined

compelling unique, opportunity. The power provides a integration investment of

be in downstream to with we shareholders provider. We as vision the forward future our reward energy move will now and the integrated leading

interest Phillips XX. your for you Thank in

or have you Owen. call questions please Jeff after If call, today's

Operator

you you, today. lines. our concludes Thank may everyone, disconnect now This and call, joining for your us

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.