PSXP - Earnings call transcript Q3 2019

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Operator

Welcome to the Third Quarter 2019 Phillips 66 Earnings Conference Call. My name is Julie and I will 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.

Jeff Dietert

to Partners welcome conference quarter and call. afternoon Phillips third XX earnings Good call Mitchell, Zuklic, include CFO; on will Participants today’s Kevin Chief Officer. Vice Operations; and Tim President, Vice and President Rosy Vice Operating Roberts, and President on Today’s Events the along supplemental section website information. operating the financial presentation Partners be and XX of can with materials found Phillips

Slide X contains our Safe Harbor statement.

that results we be presentation to included and session. SEC Factors Actual the present results forward-looking what the filings. from during may cause statements making materially differ We here will as differ actual as could today. in Q&A are well our

With turn the will that, over I to Kevin Mitchell. call

Kevin Mitchell

our and of afternoon adjusted reliable and wholly Thank We delivered joint at reflecting good venture assets. owned record you, and earnings another quarter EBITDA Jeff performance everyone. operating

on unit. assets We including this assets organic Charles products Lake continue multiple planned. as with pipeline Pipeline Lake growth well year, of startup the extension, These execute and our are isomerization to running successful and new performing the Bridge Bayou projects Charles

quarter of increase Our an of cash per higher distribution $X.XXX a and from the quarter previous third unit, X% than third approved common distribution. quarter $X.XX common the per of Directors unit XXXX Board

IPO. distribution since every have distribution We the increased committed the We July to while strong quarter coverage ratios. XXXX maintaining remain growth competitive delivering and leverage

expense. tariff quarter offset EBITDA of second the increased results, higher reported increase and rates, third partnership from during the the a quarter million, the maintenance Moving $XXX by improvement to quarter. financial to of million. X partially reflects million planned on Adjusted discuss Slide record volumes $X earnings The an was $XXX

$X million, $XXX Third the quarter. quarter of flow prior increase distributable million cash from an was

We under flexibility revolving with credit Slide and third available cash of facility. ended X quarter highlights our and $XXX million our the financial million $XXX liquidity.

due million million outstanding quarter, repay in term the under of interest $XXX the used the October, basis and environment. of proceeds was $XXX in X.X of to debt-to-EBITDA was quarter the February $XXX on notes issuance due in senior million ratio unsecured the the the to we loan attractive XXXX. notes ratio facility, Partnership timing repayment senior notes and The of third A the of times. remaining the in issued leverage higher off During was the fourth The revolver rate portion quarter. a debt covenant paid

coverage distribution X.XX Our was times. ratio

million This target major advanced over ratio up ratio Partnership Pipeline, to continue included to Texas times to The the X.X expansion as a Caverns We the X.X projects for Terminal. long-term its investment leverage and the well Clemens pipeline spend capital. Pasadena Gateway distribution in of times. growth the funding $XXX CXG during as South of quarter Sweeny coverage and the

Rosy Now, our growth update an provide will projects. on

Rosy Zuklic

we few the X a start-up I’ll a to the hello projects have Charles speak and Thanks, projects. lists production Slide full of Kevin September. and unit The successful in reached had Lake everyone. ongoing. isomerization

Gray The We quarter quarter. expect are operating Pipeline design contribution a The completion. performance full we meeting is asset. rates and project nearing earnings in Oak the initial about to is of excited this receive fourth

The the commissioning quarter first multiple XX activities with completed marine schedule We providing information Investor XX% Partners listed to are owns the barrels two as in service a will in the X upcoming connect more have to of The track will including day storage XXXX. Phillips interest deepwater started Oak capacity. with is look November, terminal million Texas line startup over planned. to and Corpus South to and per in Gateway projects mid We throughput full docks barrels be Phillips export to and XXXX. on up expected the have terminal, of XX startup at initial which the area, on XXX,XXX in Christi by Day. capacity of forward fill remaining Gray for are terminals Terminal.

remarks. our This prepared concludes

the We line will now for questions. open

Operator

you. Thank

now please We the Suisse, will Dounis session. begin question-and-answer from [Operator Instructions] ahead. go Spiro Credit

is line open. Your

Spiro Dounis

starting around got me change Maybe with maybe the some everyone. of afternoon seems things a a Terminal good lower that two movers the refinery of the sequential quarter, it like some off take bit off is Hey, shrugged up segment, step first, utilization. of

looking driving really to? on that is that And that volumes what’s just second wondering on and could JV just once So sustainable some I then maybe how if your you am again. and highlight from is pipelines that just was driving assets, here? really of really ratable strong of wondering some which

Rosy Zuklic

Absolutely. Hi, is this Sure. Rosy. Spiro,

Bridge, terminal. the of got we where So have we Lake if Ridge you result is to are second Bayou where think we from as pipeline and the starting really online Charles got Lake up of the terminals you coming phase the had that in down seeing about projects refinery have pipeline mentioned, a we Charles the Clifton great have there benefit Kevin then have moving products that as

And we Ridge of so Clifton movement terminal. what are really seeing is the got and crude additional there product off movement we have

in coming the And that should and coming at definitely just there And think do different are a least so you something there. terminaling that so I for seeing uptick next really you an fruition is together. of quarter the that, projects kind the of uplift see all volumes that

On we had continuation the a in quarter. of quarter. record what another saw the second pipeline, it’s Explorer JV

Second quarter. quarter a was great

then from quarter last third think even was per day X better, running quarter the and then barrels the had benefit the throughput barrels had in uptick it quarter, you another if also a of again full pipeline Bakken fact about XXX,XXX Bayou XXX,XXX the Phase XXX,XXX day quarter Bridge, per volumes. that in started we up second quarter. and Third in

Spiro Dounis

helpful. Very

potentially question, Liberty becoming of and doing get as how dropdown certainly ahead part us looking a a But Second back understand you type transition you Investor of if greater I the maybe just specifically sort to to towards a Day story Red to little strategy. sort don’t too of especially forward want of about that. the help think bit Oak PSX

cost has capital the Greg that think the I still of on mentioned PSXP advantage. earlier call

wanted ties together? just all And to so understand that how really

Kevin Mitchell

Spiro, MLP is would around that across are I the suite organic you really morning at level get the PSX and projects to look the being that you had time. also it done at comments and taking Yes. at of place see would reiterate this and makes into fundamentally that both step just as done this made growth conclude back PSXP Kevin. at PSX sense what’s Greg the over those you

those projects. will I around Oak Liberty leave Red think specifics I

since those projects time, for PSX opportunities the fundamentally leave will feed they and period at of MLP the point large in actually this for We Investor some are of but growth backlog especially could time. quite Day that

Spiro Dounis

color. the for Thanks Understood.

Operator

Howard please from Weil, Stuart go Philip ahead. Scotia

open. Your line is

Philip Stuart

kind milestones Good through kind quarter. solid the afternoon, up kind to on reaching have of of the of I of Congrats in in the wonder I you the update appreciate we November kind could guys. Oak lumpy fill that understand that pipeline. kind really talk on kind ramp a Gray if of starting know, just more full they that ramp be, of other? to going going if capacity XQ, way curious ratable just of or you pretty end be is early one are to going the be period of over or time of by if it’s to that if the XQ,

Tim Roberts

with just it I And this touch a Roberts. as Oak, and commissioning. about, is let terminal pass bit expect, will that And are as to little have storage we we the this. complexity not Rosy our probably little it’s forth. its pipeline, me so Well, talked well on On line through going we and just are you going through would fill of off after the Gray Tim as pipe, a

can phases as We up are getting it in you imagine.

to move pipeline. the crude starting down are we So

with our currently are line. We

are would our in this we have FERC contract the phases. and to a Coast expecting to on various to that’s Central in at be very Gulf pipe Junction, single And on then, have shippers side November. service. at market. Junction can we get the So service limited other tariff this posted But shippers That or with is Central with sometime limited locations all Corpus Houston whether up goes on then third-party to point

November, will of into I but the Rosy, project wouldn’t year the additional then bits to tariff will get itself can subsequently start on out booking you closer commercialize we through Phase those then and like first that be market, the expect touch and And we quarter. do that ratable. want ramp-up, to to extent X be will especially there the on again of then this? will as they pieces we I as say end revenues. support the those, coming pieces of and a the there to may go we So in And a we get also we but complexity phases certainly start the wouldn’t it’s that said it’s say I

Rosy Zuklic

PSXP the quarter I of the modeling up a be. I I earnings Yes, Tim the quarter. benefit period, think I for see an as that’s I perspective. would perspective, specifically the a And really starting second think what would it’s is the it maybe way alluded half run-rate from really From fourth then EBITDA, in run-rate anticipate being say has that about any to don’t first probably from would quarter a ramp say from

probably would first quarter. in throughout phase the you it want So to

Philip Stuart

that Texas kind maybe Gateway, of ramp That’s capacity? really all on and great. getting of Okay, the about project throughput kind then South there helpful. towards up And can talk you

Tim Roberts

capable of regard partners along for Yes, and their so on project, They VLCC core this it’s and one dredging Roberts start actually our all permits. did docks have terminals that tanks the land and with that, is there, the Buckeye Tim go already with activity that got they pretty well. being of on They again. X started forth. On receive we’ve to can but moving engineer

well Buckeye progressing So very project. on the is

startup. are We XXXX this mid at a as far looking as being

of just the that currently like Oak, all you would probably could targeting. comes that on. a a little not imagine, after And that’s some it’s switch on Gray portions it XXXX mid will a Much and earlier. little see you come date, we’re As then terminal flip but

Philip Stuart

it me. Okay, from great. That’s

Operator

Barclays, please from Chen go Theresa ahead.

is open. line Your

Theresa Chen

at was discussion for and and of parent at questions. ago, given which related PSXP today’s only. PSXP, other anything PSX�� taking interesting, in lot again relation translate to was to would and long to was assets or the combination for $XXX clear I attractive you read pretty the it to fact didn’t interest my potential while because that DCP of more very But wondering want to term is feasible write-down outlook you the be all market afternoon the the more been this for that as to the data, at the observable the combination PSXP was the it now thank of impairment Partnership into the just around so based DCP there the XX%. now parent’s parent, less at Related has at on million related if reality. if to the Good PSXP don’t to given it outcome dilute it quality it mark-to-market there’s desired you tethered a write-down is and DCP a made Kevin

perhaps bid can narrow? So ask the

Kevin Mitchell

we for really not PSXP Theresa, the DCP. commenting to this be to parents appropriate it’s have Yes, pass and on question, ownership DCP on on

So I’m to going that on pass one.

Theresa Chen

Okay.

scale, business the most third-party I makeup to sensitivity soft grown the completely as couple hitting demand of contracts the with mean, years indeed lately the resiliency the the the lot and analysis NBC’s. it any with so? a the volatility that we’ve wanted last seen has are you of pretty fundamentals and around revenues the over on given of to patch is just the cycle, business we supply done size sort if related contracted understand macro current in touch of have of macro So support in Partnership a I partnership, the from or and of rapidly of data in But fee-based

Kevin Mitchell

Yes. would stream about of from revenue sort of comes like But back something PSXP do. assets that right We XX% take the direct PSX. to I of XX% owned – PSXP now it The business.

think it about very So the level much think those infrastructure. PSX supporting assets that you to refining if PSX are it’s the and when marketing the greater those that. of are you family connect And – – like those lot a supporting, being still within you volumes about that are

third-party, The Some so a that. period assets right. and than of term, chain. we time, a exposure long-term short-term, investing go in where in planning long-term commitments PSX feel back It context those is more third-party more to the comfortable of of very been we the is long around contracts, horizon, around comfortable for which that so us assets the sits. NGL we takes that reasonable fundamentally, very around our within that feel but venture we’ve more and there, joint value lot have

Theresa Chen

Thank you.

Operator

Jeremy ahead. go Tonet from JPMorgan please

Your line is open.

Unidentified Analyst

XXXX probably that? I Hi, mind talk relative takes Jeremy. for could I little wanted kind in this CapEx, Joe think some forthcoming we that XXXX is keep for on you puts but and bit realize we the ask first to of what to a should and about the of budgets of should

Rosy Zuklic

for in presentation couple at here Analyst So the Day weeks. XXXX, give we’ll color of more a

$XXX and as increase far forecast. we latest forecast the with what As last we million that I the said be was no between at going take was still budget, Oak the If XXXX, back to it million and first we quarter. $XXX to that about change we’re project, you to to said Gray $XXX did when in million the

Kevin Mitchell

just you spend isomerization that’s Gray to. will be the slide complete. Oak done there fundamentally about And Pipeline that’s year. supplement if but over think into that of Rosy some minor this by, units talked by the would I XXXX, that The carry end

You’ve Caverns XXXX. continues, expansion got Texas through CXG Pasadena spend Pipeline into Gateway South next XXXX, to and is the XXXX, year is of Pipeline into middle Clemens is Sweeny

give of projects it get can the you at you of flavor of that of comprise and some capital startup list But portion I’ll budget. a what will timing, So least expected timings. completion sort from the

Operator

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

Jeff Dietert

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

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

Operator

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

You may disconnect. now

Phillips 66 Partners (PSXP) 25 Oct 192019 Q3 Earnings call transcript