PSXP - Earnings call transcript Q4 2020

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Operator

Welcome to the Fourth Quarter 2020 Phillips 66 Partners Earnings Conference Call. My name is David, 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 fourth XX earnings Good call Mitchell, Gorder, include CFO; on will Participants today's Kevin Vice and Operations. Tim President Vice COO; Manager, Casey General Roberts, and President presentation Phillips Partners operating the information. can section financial with XX found the website on Today's Events materials of supplemental along and be Slide our statement. harbor safe X contains

could to materially We session. Actual Q&A are presentation and from comments. as in will today's our well be results turn making With our forward-looking statements over cause Factors here included SEC that may to Kevin. differ that, the differ actual it during as results I'll filings.

Kevin Mitchell

market with loading the fourth Directors of everyone. dock from Partners unit completion of milestone major We the Board you, and performance of achieved a South results unchanged its operating at $X.XXX Thank fourth Texas Terminal fourth the challenging quarter, of solid In second The delivered distribution XXXX. good quarter environment. common strong Phillips approved XX afternoon, a VLCC. and and Jeff the Gateway per a the in quarter first the

Moving flow the of EBITDA our fee-based on year Despite discuss to XXXX portfolio. of unprecedented strong only cash strength declined the performance. challenges modestly and its XXXX partnership The distributable to adjusted Slide highlights. X demonstrated full from

Adjusted to continue the for EBITDA year million. reported operate was $XXX We safely billion. of and Partners reliably. XX earnings $X.X Phillips

July. our Gray was in Pipeline, Caverns expanded The We service at the the program. and largest to into continue quarter capacity date placed to our execute full in second Oak project reached operations growth Clemens

all further by CXG Terminal portfolio. and integrate Pipeline. long-term Texas customer In addition, These construction continued Gateway will we of advanced our commitments South the supported assets the

$X was quarter capital on Slide consistent is to facility. adjusted Slide crude $X to volumes Fourth This CXG flow basis $XXX Texas included quarter of compared partnership down The ventures. million, decrease revolver the due for $XX an investment partially joint with increase X from discuss $XXX X third the Moving decrease from and to million financial Hills under to of the Terminal. Bakken fourth in on reflects CapEx million. Fourth $XXX debt-to-EBITDA $X offset reported below in partnership target quarter. lower our flexibility of on this higher the Pipeline. X.X. a was two volumes, $XX cash EBITDA the growth million available oil during fourth and spend quarter. with investments on quarter. quarter, remain $XXX logistics prior quarter The our the maintenance impairments with million ended was We was The The was X.X, highlights distributable million, related cash $XXX quarter. liquidity. quarter fourth million revolving credit in covenant South quarter million of funded our million Pipeline Pipeline due ratio the the million earnings results and Gateway third the higher Sand in The of financial which the to to by

of be ongoing Lake that affirmed We which the appellate the environmental already impact Dakota of distribution court affirmed must to ratio this vacating an Earlier uncertainty The by recognized also study, X.X. and under completed was litigation. the the week, year. the underway the Our pipeline easement the Access court expected Oahe. with is coverage prepare Dakota associated is end

are believe a The history it prepared, EIS state extended throughout court should is energy temporary the Access and we pipeline, the workers the local value there's to the process. to this being pipeline and safe customers, while a motion chain. to Dakota allowed and mandate on matter injunction shutdown shutdown owners be issue consumers operate, has the economic while not did the in pipeline operations for beyond a court. recognized it pending of that implications the continues While governments, of lower

We plays safe, XX Phillips will those remains our reliable options on within flexibility. control focused disciplined including the allocation continue out. maintain areas as Partners legal operations consider capital process to and financial to

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

Casey Gorder

hello and Kevin, you, Thank everyone.

Moving the the quarter. X, vessels Texas at to oil and crude which the operations on loading to berthing in I'll the up of capacity. Slide time throughput South XXX,XXX Terminal, of day Gateway progress quarter. dock barrels per the update commenced second projects, to the This fourth continue an enables provide our major export same with two during At

total to interest quarter Partners XX% in the be expect million the $X.X of construction completed storage first barrels. in owns terminal. a with We capacity XX of XXXX Phillips

of We facilities continue Pipeline, by connecting XX% construction petrochemical CXG area. is storage Clemens start-up Caverns is the Corpus XXXX. the Christi is in expected The construction long-term mid to and Pipeline about in to backed commitments. complete project

including on base, Zena Lateral with execute optimize Pipeline. our that Oak the Gray existing to continue We projects asset the associated

Our created of projects. a for return efficient high integrated optimization opportunities portfolio has number capital

evaluate capital towards and capital optimization continue of projects. $XXX million budget capital to The meet our win customer $XXX includes discipline. maintenance This for in-flight concludes capital. Growth identify will and remarks. and be projects for million demand, prepared XXXX these to We $XXX million quick will directed while growth maintaining

for line questions. now the open will We

Operator

Thank you.

We [Operator line Dounis session. your begin the open. Please is Credit Spiro with Instructions] Suisse. will ahead, question-and-answer now go

Spiro Dounis

some is rate, about first $X.X in there not past Hi, Pipeline achieving barring you you Bakken Kevin Or market your the but going maybe, afternoon yet, a Question EBITDA the guys. run this the to way investment earnings current billion for realized we're as talked at base? second, to good that incremental is still think for to get point? take there asset of it normalizes power, about I guess, a

Kevin Mitchell

Yes.

me. billion asset right there of for get if current in this need you EBITDA; the I I to confirm think to and part don't I to probably get with $X.X base quite remember Tim

big that statement are and made we we the we where Liberty had in versus think difference the at included what today. I time so we that's that between

that's really projections. the differentiator those So previous primary versus

Spiro Dounis

out just a how I a realized year, fair on on to That's your at closure perhaps on from extent Kevin, and is disposal, the could legal amount perspective, that if would in what question but to of going control to terms on Okay. all your the really surprisingly of feel Access, measure closure to is Do what compelled people's and then a I you helpful. is minds. and I a is that's just I extends guess of most react sheet EIS potential what's only to And and a update not tools inside is the next react your in I appreciate but this you that are or probably if your Dakota guess control weighted focus you actually not a guess react type I we balance think But of strategy? just is that not that's out that how take. extent the temporary to just

Kevin Mitchell

Well, to situation I a there's fair where a if we're going if to there's uncertainty long temporary, even shutdown, going that's amount as how last. a in think, of to be

the Growth two do from a main the we about And and distribution. significantly. has options standpoint, really to capital come growth us. capital And are already financial levers there of so, and down that's available all think

year significantly of couple Casey been we've that's lower the years. than So last where the mentioned budget the $XXX this million in

lot. not there, bit So there's a room little but of a

be the And to are table. make going guidance we of so this any I other to the focused not sheet decisions point the at We're interest all to and best any just all say specific protecting going are time unitholders. preserving balance options the that than at PSXP give of on reinforce on

Spiro Dounis

it weekend. and Understood, for a have me. that's Thanks guys good

Kevin Mitchell

Thanks.

Operator

Barclays. Theresa go with Please Chen ahead.

Your line is open.

Theresa Chen

Hi.

to the currently XX% follow I to a sit, it words, mean, and XXth what the are up outcomes into DAPL their from hearing? hear own your PSXP for your likelihoods? probability shutdown where stock. wanted is I do XX% units the What you potential about looks the So I expectations to perspective are And February priced of think topic. on like wanted

Tim Roberts

is This Theresa. Hi, Tim.

then and with [indiscernible] Transfer. it's got that options we've not. going It would And look deal with I Kevin, we're feels binary fairly Energy actually that summarized point They've regard to think, this. at at want to to take as we deal earnings discussions our options point their to continue interest with want to legal far running. to the it's They'll we're on what in them but keeping as pursue the this, with pipeline call. we in got probably have. Obviously,

Casey Gorder

the is Yes, Energy leading project. legal effort Transfer on that

Theresa Chen

the about sheet balance to And preserve Okay. and a the potential lever your unitholders. protect distribution Kevin to earlier as comment

target something business the pipeline historically? you what given for you do than the you you if do remain what does business and think base So pull markets that coverage kind that plan target Midstream should you the lever, Would of closed? equity that long-term shut have have higher and

Kevin Mitchell

path to we're coverage from but where might metrics, of – trying to well a specifically, triangulating balance a as metrics the it's get distribution about sheet Well, debt standpoint. around as distribution love I on metrics speculate we thinking the into go

It's So the cash flow as generation, sheet that picture be cash the to balance able having it's distributable metrics the broader cover leverage not about around the just the and to well. distribution. of the

through of elements. those thinking just all we're so, And

Theresa Chen

you. Thank

Operator

with Tonet Please JPMorgan. Instructions] [Operator ahead. Jeremy go

line is Your open.

Jeremy Tonet

Hi, good afternoon.

Kevin Mitchell

Jeremy. Hi,

Jeremy Tonet

partnership could or – that just some Phillips had I'm how translate for opportunities business just the about expansions might to been and fuels real the there. world's overall? PSXP potentially that I with if PSX start impact wanted talking wondering into

Tim Roberts

can. pipelines change still fuels, to and it be I the not, example, terminals renewable would Rodeo, you're be do it’s moving market. and you that say to still really Yes, so whether using it's for the go that, going now ahead or fuel right get to to product going Rodeo, doesn't

West PSXP out much of Coast. bad and any good side on the have Now, really as not far as does is footprint that

assets. So were into this to overlap with clearly our expand if footprint locations the Midstream that PSX some renewable, benefit for segment. PSXP other would may But

Kevin Mitchell

assets Jeremy, as standpoint the qualifying Yes. And those then EBITDA would from structure. as say, would just it that for of its themselves that generates types MLP to I lend long

those if there's think types broader MLP. So, had they assets the couldn't be reason that portfolio, of be in to the within no to we candidates

certainly So could the I in future. some that something be think possible there's

Jeremy Tonet

U.S. touching on maybe for And a – there in it. there's the you the on potential we point raised just rationalization refinery the side Got capacity

on PSXP's that cost Going there? am could forward see stands the the what's it curve on that? view wondering partnership? refiners PSXP do the How you just impact I How

Tim Roberts

feel – it the lot a I I Mid-Con and PSXP we tell located competitive keep where really footprint. highly mean, are fairly around I got assets think highly that Jeremy, simple would is have a integrated, we of to

well with do so, assets. those now both assets like into with And our associated we're PSXP and and positioned those feel is the we future

Jeremy Tonet

volumes very terminal it. little touch bit Got on a there. want That's to helpful. And just

up a might when I bit we have think maybe they there. would XQ ticked little quarter-over-quarter, XQ into touched have thought they down

you Just could that. drivers if wondering to touch on

Kevin Mitchell

Yes, refinery I it's the just on piece, reflection really a volume think of utilization.

I terminal think saw you what that as the with quarter-over-quarter. pipeline that on decreased volumes was the we consistent assets well saw

Operator

your line Mackay Goldman is John open. with Sachs,

John Mackay

I up process. just more wanted to DAPL. you follow understand I made comments on this ongoing on one

to more able Just be one, looking answer. might for a specific maybe you

could Just And in the specific share during instance, DAPL terms shutdown case? – needing happen to of share – PSXP a EIS what an for look like? trigger was about would its that debt to for in of what you if talk this fund temporary the needing specifically would

Kevin Mitchell

under temporary shutdown would this trigger to debt. be an Yes. A action Kevin. John, unlikely is the

a is probably that way of terms being of conclusive determination we about this a long how shutdown it in temporary, is a but the be event. take picture of Now, sort into think triggering that that would would it around sort more you big permanent get

around out agreements loan all so And in that's that the of laid criteria. that terms within

shutdown shutdown about temporary way a the the trigger, permanent think we be be. And would so it a not would

John Mackay

quarter you. understood. the Maybe drove those slight Can That's on that you what one. slightly where? helpful. – and this turning just to and I Thank easier comment a what assets just impairment

Kevin Mitchell

of our oil crude the normal impairments we so at future the process. look a and sort they pipeline And In rail Dakota, for were of assets investment. the of really related, other it's around to Yes, when in logistics have both value in pass projections maintain we cases, two one assess them periodically. terminal revenues, North both book didn't sort just previous all Mid-Continent. was then the a crude We of impairment investments was production the threshold and

appropriate so, the took impairment. And we

John Mackay

you. thank Great,

Operator

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

Jeff Dietert

XX you. me Phillips follow in or interest your if appreciate We you. Thank have And up please Partners. you further any questions. Shannon with Thank

Operator

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

disconnect. You may now

Phillips 66 Partners (PSXP) 29 Jan 212020 Q4 Earnings call transcript