PSXP - Earnings call transcript Q4 2018

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Operator

Welcome to the Fourth Quarter 2018 Phillips 66 Partners Earnings Conference Call. My name is Julie, 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 to turn President, Dietert, now Relations. Investor will call Jeff over Vice I begin. may you Jeff,

Jeff Dietert

The with Chief Phillips the will Events Good to will of materials And the be Vice call. Vice cause and afternoon. here supplemental welcome With and be Harbor President, are Actual using we Participants to could quarter Vice what the Q&A. President operating actual Partners a presentation will President Zuklic, results can on as Mitchell. earnings the as Operations; information. fourth will and Slide today's filings. It Tim call that SEC on we and the over included CFO; present X and results during include Rosy contains Mitchell, Partners may found along the Kevin during that, website, our Roberts, reminder Phillips XX financial statements our Operating Officer. I we call the call in section turn presentation Statement. differ Factors Safe differ Kevin well today. to XX be materially that forward-looking making is from

Kevin Mitchell

shows I Thank Slide which on afternoon our you, distribution everyone. will X history. Jeff good and start

common X.X% XX% compound fourth annual a distribution Board Directors achieving year X the Partners of its We Our approved significant distribution increase previous reached target. of unit, $XX.X quarter. quarter the per a from milestone with growth

demonstrating since IPO increases We of industry distribution have growth. delivered consecutive XX our leading quarters

ahead portfolio assets affiliates. strong reported volumes from rate. earnings safely billion ended million, prior second Moving The are financial We target reliably its for the of record on partnership for diversified and year. results. rate a successful schedule the year at our billion, $X.X year the $X.X the partnership. to in X. run up XXXX and XX% The of adjusted quarter accomplished We and operated $X.X EBITDA a year. Slide and XXXX XX% XXXX owned of was run partnerships $XXX the equity wholly from EBITDA billion was Adjusted across increase prior achieved

from we you rapid slide, this see pace. grown can XX As at the Phillips on a Partners chart have

We opportunities the and us. financial have ahead scaled strength of

well are deliver growth. program continued organic an to find capital positioned We to

XXX,XXX million Bakken by largest from and increase performance we quarter an our driven completed the the quarter. $X Gray Sand affiliates Oak our Slide the fourth the that improvement is of pipeline During project adjusted pipeline. expansion EBITDA of year, $XXX to-date, from reflects higher million On sanctioned this day. of X, pipeline the Hills previous the barrels equity per more than volumes The average strong to

to owned highlights Slide and XX due Our million distributions refineries. higher increased million, X primarily $XXX $XXX $X lower from with distributable JV ended quarter capital. in an cash and million increase the flexibility with our of and our was million prior facility. Phillips outstanding borrowings volumes financial at liquidity. of quarter wholly utilization flow fourth revolving credit associated million under We maintenance the cash $XXX $XX quarter Fourth assets of benefited increased

around revolver to the Long covenant on basis ratio X.Xx. we expect leverage debt-to-EBITDA X.Xx. Our be was term,

capital growth will and slide. Our The on strong over covered distribution flow billion provide $X.X financing to JV projects our growth pipeline operating which budget on partnerships X.XXx. coverage capital predominantly for the position reduce is financial program the will ratio cash XXXX debt for funding adjusted turn spending update the is capital Oak Gray our approximately to $XXX XXXX Rosy an capacity. projects. it of I'll now with be next enables to of million. The level

Rosy Zuklic

we will next two the have lists years. Slide everyone. drive Thanks EBITDA Kevin the hello for X, projects growth that underway and

to find capital financial and to will with enabled program us one combined provide strong investment but strength not Our a returns. capital scale larger our disciplined only approach that have

XXX,XXX progress day During Oak Texas good we projects. on from Gulf The provide will pipeline quarter Gray Ford and made Coast of growth per destination. the crude to Permian barrels our Eagle the oil transportation

capacity will Texas is X barrels million XXX tanks. of to miles South that Partners. two terminal and the Gateway in XX in Buckeye to planned million construction this Terminal Christi of The started water project the pipes, and trenched original terminals have will New on Oak from million have being barrels. completion up storage We remain for all on We by fourth pipeline Gray have year. developed of docks miles received deep scope multiple X.X the Corpus the quarter track XX including connect X.X

a XX% operation the which expected mid-XXXX. is have ownership in terminal by in be We to

PSXP complete is morning to remaining to net concludes expansion at Bridge are for are the storage the prepared James, offer on storage and along quarter improving its This additional with pipeline pipeline we this Pasadena connections The Pipeline expected St. Bayou customers partnership Commercial of operations XX,XXX XXXX. enables day barrels Louisiana capacity XX% placement in - interest products projects the capacity in schedule. services our XXX,XXX extension the expected joint remarks. by expanding to Partners venture. is Terminal now third in on adding track product a Phillips announced As optionality. be in to from second project March. capacity owns begin to net Sweeny barrels the terminal are completed The The the party XX Lake while terminal. per of to Charles

questions. open now We will line the for

Operator

[Operator Dounis from go Credit Suisse. Instructions] Spiro ahead. Please

Your line is open.

Spiro Dounis

tariffs. want two the start off I to on part question pipeline

PSX they quarter thought, just about that to wondering and think it how impacts think that think we the first fourth as believe so I forward as some refinery How about we then PSXP? do about also call move than mentioned up. on in came turnaround thinking little weaker Just we coming I they bit quarter, heavy

Rosy Zuklic

adjustments both fourth are tariff that making quarter to and look pipeline the The is actually $X.XX rate. a little I actually routine to is run actually quarter is The variance the quarter-over-quarter what say bit off. T&D normal third that would $X.XX normal had

outside the both really of think fourth third them at at range. $X.XX in $X.XX and coming are the I quarter normal was the quarter

look your So the $X.XX I to of rate is question throughput impact eight last as say utilization our gauge And run to have spot $X.XX PSX of on. an that's more a The second far if going as would normal better to then for a the mid-XX% system quarters, use. kind really over that to to on rate, volumes. is you refining the you're guiding obviously

contributed fourth both saw that earnings at and over specifically to quarter - quarter in strong mid-con both we quarters. obviously the Third XXX% in

as of what always normally look quarters, four the period. you always so would weaker heavier outfall fourth and that far at system is the quarter the and refining first as turnaround is across you stronger the first trend the as say, know And the quarter the kind is I being quarter

Spiro Dounis

Red are Hills, gladiator guess Southern about just you that And line than am then first I I in new have into and SemGroup proposing Hills crude then DCP would on gladiator to build a I believe second to correctly. participate thinking known one Southern option to Oak? a rather on convert obviously Second Southern Hills replace NGL Southern effectively an develop pipeline maybe the and Hills,

Rosy Zuklic

they're talk day ongoing, crude At Southern little DCP early it NGL a at open thinking too that day So right. so current obviously bit could a be is XXX,XXX about Hills still pipeline. barrels that point to as season a about at what this the barrels about capacity are but a much the for is pipeline thinking line you XXX,XXX

but to a gets converted So much that build they're that share beyond then it. I could you crude really for that NGL if line could thinking on then, not then really line another

Operator

Elvira Markets. Scotto from go ahead. Please RBC Capital

Your line is open.

Elvira Scotto

the about You at open ACE press does detail season, that release pipeline in about run around for budget for XXXX? through, that, know the Can is talked open little you those provide guys a you anything more there season when the pipeline? an in

Rosy Zuklic

Yes, don't ends. tell normal you open. I it our really on timeline for us. just here can't practice just when did so season, It really open a we that's give recently

XX going James And to and normal in said specifically the with be So think clarify pipeline, St. somewhere XX the to is open just to down the to for days. Clovelly build new being premises a JV it that's season the Valero's from PSX about the servicing contributing from pipeline all CAM the CAM the up currently Harvest. that which refinery, obviously refinery. and PBS Clovelly runs refinery be is ourselves up Marao, Alliance Harvest all to would the being way PBS way to the timing

season. just obviously answering XXXX. so from excited We refining in budget the some I ourselves additionally So see for Hoping season we so would the directly crude have open here from but about open and your for Alliance, optionality think the we're there's really has perspective, a the question see there's from a do PBS upside that PSX that upside conclude premise it. to

Elvira Scotto

And should we is guys into growth. our continue targeting EBITDA distribution but top guidance consistent read your distributions, provide reward will versus comments didn't you quartile increasing on, unitholders anything then know to your we you comments with of kind your any previous which previous with

Kevin Mitchell

you growth So covered provide page projects. be impact, business, in online that and giving you're that talked first correct refining that fundamental about right to then we're that, and if in at PSX of will term guidance assets if terms new of look really near we look you the not coming being utilization did EBITDA guidance the all - the Really of XXXX. ahead in got had looking quarter the Rosy the the the you there the

- can some models that. there's with EBITDA and enable estimates you build your come available of sort that own EBITDA up so your around And information to

growth restate part distributions, little that back program flow way the kind but quartile manage focus was terms moderate there is a how particularly base It of was the appetite first the what shifted that not versus distribution the in within investor cash today. of some of at first growth and operating distribution is in to distribution the emphasis our of we we on capital in rates it's ability terms in to quartile growth lot wasn't regards given an helpful for looking different find high bit so In in case really a debt. did when guidance days with organic the of only because

to from And so expect increase the to distribution. dividend standpoint, do continue a distribution we

in be We competitive regard. that expect very to

going We’re away targets further look just that to is like. hard staying growth around from what

Elvira Scotto

given key you today? on of an that maybe IDRs of have elimination Can IDR captures kind the that investing PSXP ask investors we your may question IDRs of PSXP. process many the we away but know your thoughts keep latest did from the IDRs, eliminated and and of what large announcing factors keep provide from elimination own or in some eliminating always in are some And that us and PSX IDR

Kevin Mitchell

look originally you it's our and works. So back last shorter grown the is is, comment this very in or continue period. to what with IDR we've past consistent the this on years that assumed much over time than that, evolve cycle successfully we we five understand so. that understand PSXP we said Clearly way and The has life which over very

much we and IDRs going what to expected to be away PSXP to way take And that what is no transactional I later those would to When the we Phillips end appropriate so done specific in important get be. exactly to structured point, sooner expect be what's addressing going to are the reality fair is a a fair guidance is needs on and than range and the time that than XX we a unitholders we way this that to will triggers get is up shareholders but we have think transaction or the sooner in exactly to that the that to originally. be expect it's

Operator

Lynch. Bank go America/Merrill from Please ahead. Coleman Dennis of

Your line is open.

Dennis Coleman

to them perhaps projects me on for those for in think would. question topic - forward Is I you it's bring sort XXXX? late but been the the more one first be there a I related PSX that's obviously guess supposed fracs lately. a accelerate of ability that more - to XXXX any of quite Couple if on is but to

Tim Roberts

from that that is Tim the answer Yes, by Roberts on sponsor way. view. the - this I'll

PSX these space, the lined the up. and as looks project space, to one with but move You're that you fabrication as it's fairly we've stands. contractors, schedules procurement, far had on it schedule line it level that because It's up, like well now forward shop getting all things right as a this seen hard

a So slight Certainly if what do the but those. it's market going right see we to we're it's Gulf now accelerate forward hard on Coast. pretty hot may to we movement a

maybe but So incrementally not much.

Dennis Coleman

X.Xx, to I guess balance then level going just And any downs? you the that at up current about Kevin, the thoughts incremental talked X.Xx drop sheet with from availability on

Kevin Mitchell

capital at there's a we organic I today program. like look No, PSXP that at significant you mean the We program that. got

available that the generates and sheet ability available. the balance that's and cash the between the have coverage We that

to program execute that We have continue the that. organic on ability to and do

the we think PSX organic down drop very remain drop the So from if gives on the a but being the optionality just future much for focused standpoint, point build-out. time some for option that's down - the in appropriate

Operator

ahead. Please Tonet Jeremy JPMorgan. go from

is line Your open.

Jeremy Tonet

Just South gateway. Texas want to touch on based

of noted at how of think about mid-XXXX I kind the do if earlier that kind the at I Gray for with 'XX there. just you could enter stages? coincide end Oak than completion come of coming wondering line you parts of that kind on was online year that service or think

Rosy Zuklic

X.X of kind of obviously it size being original we're at is Partners get the up Yes, this barrels the speed, and this about was. course just original project at X scope everybody to to million of so what off Buckeye the is of of scope million almost barrels, now started talking the operator twice and

So as of that and going it of being the so becomes the the and at facility is whether docks the project are the the the available reflecting to mid available then to scope the is customers. be the of available, sections XXXX of project significant indicative entirety it made growth timing in done or tanks those become facility really

terminals think corpus mind are we Oak all, to that now really there's obviously, multiple within And so multiple no delivering going so is at corpus destination about even we yes, of our we Oak to we're area Gray not with Gray just any concern have the and in points, add not but have the timing. right

Jeremy Tonet

what definitely was and if share of the of I a environments be - seems just the expansion able DAPL it the interests there timeframe expansion? capacity quarter would achieve is like also for of to take that wondering kind the XXX, were for you And kind would what to for

Rosy Zuklic

we day of quarter Yes third and so over term. to the looking XXX,XXX are the and short with out the a capacity we as quarter you successful it to in has concluded and the both know that have XXX. so and energy be as modifications went get sustainably done full here ran quarter - so is far was going to Minor at season to and are barrels to fourth open the transfer run XXX,XXX

So I of time that rate. quarters in some couple here you would the at see next it would think sustainable that

that, what enough question further would done the market, be And our see to so has beyond I season needs trying did address better - think partner they order the communicated what to expand still obviously to but the be assess they need as from the would is interest open the market ETP that to ask to would in to. and so person the operator

Jeremy Tonet

not level drivers the the like and the as it if at Last as if I this PSX done announced I'm behind the was just Pipes, it more wondering versus could, you one far were extend seasons and PSXP mistaken the could having seems level. PSX at open the if Borger Liberty I

Tim Robert

is Well point, this to right see now and we’ve already capital Tim so really this side. PSXP it's solid growth Robert. got Yes pivot ambitious a nice program organic the really a to at

don't also on there. and PSXP, out lot a now we plan their got are we also want we manage as that opportunities out lose right So on to

the the we a also at had will or this So tell hesitate see open think we're partnership we out down us, this we We looking PSX from opportunity this at real now this project there's point wait right if there. an point a sitting season that at from but be standpoint. to incubate it and as want time to doesn't it didn't on us in preclude some moving which

at why that's at So in PSX we're handling time. point it this

Operator

further the no Jeff. at back will turn have now I to We time. questions this call over

Jeff Dietert

Partners. in Thank you, you your Julie, of Phillips interest for and thank all XX

Brent. questions additional have you or If call Thank me please you.

Operator

and conference. today's Ladies concludes this you. Thank gentlemen

disconnect. may now You

Phillips 66 Partners (PSXP) 8 Feb 192018 Q4 Earnings call transcript