PSXP - Earnings call transcript Q1 2020

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

Operator

Welcome to the First Quarter 2020, Phillips 66 Partners Earnings Conference Call. My name is David, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded.

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

Jeffrey Dietert

Good to will and Vice and call. Vice afternoon, Chief welcome and President, Participants earnings first President Zuklic, on conference Operations; quarter Operating and today's Vice Tim Officer. call CFO; include Rosy Mitchell, Phillips Kevin Roberts, XX President Partners

Slide safe with events Phillips XX the statement. presentation can supplemental and Today's financial of materials our be section found X operating information. website harbor on along contains the Partners

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

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

Kevin Mitchell

and afternoon, good Jeff, everyone. Thank you,

delivered starting Phillips financial in safely operations. Partners achieved the and lively projects. Pipeline quarter, milestone the advanced major operating Oak full During and Gray first results, growth April with We solid XX

the environment, strong challenging quality we grade high allocation. disciplined deferred Pipeline and assets, our $X.XXX a Liberty held portfolio ACE unchanged The unit, supported from approved and current strength, of strong Phillips Board quarter sheet over and distribution this flat. of the XXXX remain fee-based credit a the a a XX Directors distribution liquidity. fourth first postponed rating investment focused from navigating of and of We position per first balance of business maintaining the is X% by financial the XXXX. capital common on the FID on approach quarter In quarterly Partners Pipeline, of environment quarter to

utilization quarter The financial adjusted in million driven Phillips Refineries. decrease discuss adjusted $XX EBITDA wholly-owned EBITDA to Slide first XX of X Moving results. $XXX The low million. due to and assets Partnership by in rates was million $XXX of to earnings reported

quarter reflects million, distributions quarter million the $XX Pipeline. in prior $XXX Gray from joint over increase fourth venture in was distribution cash flow million from Oak First quarter. the distributable up $XXX the The first

quarter $XXX with million our capital million and highlights Oak, our and funded the investments flexibility include Texas Gray X Pipeline $XXX of Slide revolving This million acquired financial The under after Liberty $XX ended quarter. first it Gateway credit Partnership in facility. of total the South cash the the during and liquidity. was Terminal. We available

The a debt-to-EBITDA basis ratio on covenant X.X. was revolver

Our X.XX. distribution ratio coverage was

a long-term to target to X.X. ratio continue up We of leverage

between Given conditions, current expect X.X X.X. market the the ratio be year coverage we for to and

navigate focused we position these unprecedented strong on times. Looking disciplined through a ahead, financial as and allocation maintaining we remain capital

update an on growth our provide will Rosy projects. Now

Rosy Zuklic

lists of the West and Pipeline ongoing. the the Eagle the Kevin, hello, Texas PSXP everyone. further We in the started operation. XX.XX% Oak completion Thanks, Slide X projects Texas, online Ford Service a full Oak owned enhances started X. the Pipeline. segment Eagle and asset marking from Gray Ford stable came recently, South milestone Christi have The on This April for Corpus and we portfolio. our More is pipeline has of project. Gray significant

have will which Gateway third owns Partners Construction the Phillips Ingleside. and capacity XX% X.X barrels start The capacity. with quarter of continues in of a barrels Terminal day XXX,XXX the interest million South expected in XX of terminal to export deepwater two at in Texas per the docks, up to terminal, throughput marine storage up is XXXX.

expect Phillips commitments net June. Partnership in Pasadena from with in mechanical and track we reach This project project to volume capacity to The remained terminal long-term XX. is with great a completion Sweeny pipeline on expansion

Pipeline decision been the the the has to uncertainty response In postponed. and market environment been investment on Liberty that current Pipeline in deferred has project ACE final

are safe capital remaining on insight side. the growth projects These sustaining find operations projects to continue this as included as as will to We ensure well planned. progressing

anticipate venture we This to We and Oak quarter, to joint to first results earnings many from wholly-owned anticipate more refinery lower impact and from ahead utilization. our mainly the the Gray assets. a pipeline. the domestic of decrease offset increased second due the production quarter Looking from than throughput impact

prepared This our remarks. concludes

for We line will questions. now open the

Operator

Thank you.

[Operator will Please We begin Your ahead. question with Instructions] Dounis of the now line first from Credit the question-and-answer session. Spiro Suisse. comes go

line Your open. is

Spiro Dounis

see have still First some that about around out previously laid guess, question, of you Analyst about intact? to exit ratefor guidance maybe you $X.X some EBITDA target maybe that out? just provided a billion [up given I guys just last You just guidance And as as sort to] target, of XXXX, think all is that of of how the visit a the the Day, forward

Kevin Mitchell

Hey, just of tied Kevin. now throughput are projects business the refine is that where this running course at and online PSX and was and underway with point those What in pipeline also the over what portfolio -- in guidance terms we time we through on of is of which sort the the crude I That to long the haul Spiro, both then of anticipate business. come impact it’s that we product the the were year. on refining the would -- didn't situation knew had assets side

So we at are not this giving guidance specific point.

back it’s some state, of way probably back – we that that when think level to as there’s things uncertainty unreasonable -- X.X I normal to think like. X.X recovery know back the this is that lot a you out looks it’s form we see consider pushed to we based not on the and to what to anticipate now get of but getting to probably as would get to right some way

sustainable of the will I the then upstream on hard to demand forever. utilization rise I prices you think see the to on get to moving increase and refining side that the demand back that business go It’s the you start will a But, back impact to that in people products will view and part $XX normal. see oil back to work get sector. read also country the get and clearer product refine meet that once on it’s

just timing. a it’s question of So

Spiro Dounis

I that and sense. appreciate Yes makes

drop-down one, might here of assets cash right your sound of up to now. PSX about is maybe some interest bolster sort some Second provide flows for there discussion and another time? mutual just that drop-downs you crazy is liquidity or to is But help talk really with a

Kevin Mitchell

standpoint going a see it at would Yes, raise transaction, funds discussion and markets time, have those for the manage Realistically, another that's sheet to a way sort – they our hard if we Phillips get kind it’s a cash to level even of the it’s XX are probably or of objective really initiated but because and be drop-down then anyway, question all level would to trying either PSX from these through was to equity out PSX Partners are funding to debt conversations be leverage to would is. back and funding be balance as on the to the equity that

like So right timing. it it's feel doesn’t the

Operator

question next go of Instructions] Robert the Mizuho. from Your [Operator from Please Mosca comes line ahead.

Your line is open.

Robert Mosca

Hi, good everyone. afternoon

of or So a an one maybe answered and some shifts how a on about at from organic know I thinking guess thinking from it guess angle, thinking midstream standpoint some the think my but for bit set -- of kind about looking acquisitions about possible from a management reduced strategy was come – PSX the I -- comments different of inorganic maybe kind size you little opportunity call on from drop-downs, on management there growth whether third-party I questions be growth in And the further your M&A in ‘XX like drop-downs XXXX. out I by view? the

Kevin Mitchell

potential while – we come – done think like done parent from the relatively some haven’t the that any the sort from grow acquisitions back but opportunities to means, Yes, where I XXXX we’ve frame. done small and the for right have also organic through growth we a the through acquisitions that, and said we while, of, think, some we through I the time beginning have acquisitions in from drop-downs PSXP

the opportunities but opportunities none organic early be of construction And organic asset time, Most MLP. in then is – any different best in at attractive the project the an most through right, becomes are. space sources it of seen we’ve and where different, from where come drop-downs will principle, at growth we areas points see different the organic still it’s the on three comes depending different recently -- prioritized the will stage those project PSX, in from the project categorizes sort comes that

say there the the expect whatever then growth. I’d not it’s it’s accomplishing not return the projects kind at – But are of opportunities with we also those thresholds. returns do, going meet our we are other look ways there we If would of to would

to MLP. for investment sense Our make has criteria the

but that, right that PSXP in trend So possible. point a the are could focused potentially in at acquisitions it’s on often we cycle, sort not certainly you future, consolidation. of see positioned And be something that of for sustained down now. some

Robert Mosca

And kind of then maybe just yourselves be how helpful. afterwards? on things the a go or flat and an one XXXX quarter-to-quarter evaluation for shakeout it to maybe touch distribution. the that’s see do that you holding of remainder and easier seeing going Okay, Is

Kevin Mitchell

every mean decision distribution I by Yes, is a quarter.

to decision we like it prudent time. holding just it the do but every This So practice felt flat a thing in break make it's a the for by is us given environment.

what increasing depend distribution. year out lot shake whether the point back get how we things as the the on a will remainder to are to of or and of whether So this over transitioned – we

Operator

call. I’ll Dietert. the we now And Jeff end to reached today's call turn have of over the back

Jeffrey Dietert

Thank you Partners. your for interest XX Phillips in

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

Operator

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

You may disconnect. now

Phillips 66 Partners (PSXP) 1 May 202020 Q1 Earnings call transcript