Phillips 66 (PSX) 31 Jan 242023 Q4 Earnings call transcript

Hello, and welcome to the Fourth Quarter and Full Year 2023 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.

you. Thank XX Call. Phillips Quarter Fourth to Earnings Welcome and Participants and Roberts, CEO; call will Mandell, Midstream Lashier, President include Mark Marketing Brian Kevin and Chemicals; Harbison, on Rich today's and Refining; Commercial. Mitchell, CFO; Tim Today's operating of along Phillips section Investor the be presentation financial XX and found can supplemental the Relations on with information. website,

X our harbor safe contains statement. Slide

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

With that, I'll turn it over to Mark.

our Thanks, everyone, items, year. investment quarter Welcome, reasons an shareholder on by delivered XX we Jeff. is and Phillips opportunity, We our our quarterly including the progress going a X%. XXXX, quarter to strategic return strong few Today, fourth we're we've attractive a our earnings and XX%, increased why and call. was highlight to we'll the cover total strong made priorities. dividend major In a

discuss our Next, then forward questions. fourth look results, we'll your to quarter financial we

X, the attractive attributes and us differentiated a proposition. value summarize Slide we that make On

diversified ratio Our growth. by delivered integrated by EBITDA on capital returns $XX mid-cycle by XX% We're increase path adjusted supported a to dividend high a to and employed and on billion portfolio payout strong XXXX.

this In of Refining. be of will addition, XX% outside growth

and going We attractive expect this growth total and flow to contribute to forward returns. more our valuation cash support stable shareholder

contributed portfolio capital. XX% Our of almost an disciplined our since XXXX, approach in has return to formation double on to our across employed our allocation average capital of capital cost

our rating peers. credit strong to financial relative We're flexibility, committed to our differentiated investment-grade and remains

of shareholders. flow expect return XX% our operating growing cash excess to We to in of

strong as attributes and growing these as reduction margins. share secure, competitive debt of will a mid-cycle at All repurchases well support dividend,

share strategic our grow adjusted successfully continued our of to On X call, the through to date our We're track our $X.X July raised and execute by we've on to $XX Since XXXX, mid-cycle of repurchases shareholder to EBITDA priorities. last end and to and we targets on achieve XXXX. distributed billion target distributions. our plan Slide billion summarizes billion achievements increase our dividends. $XX

of for the quarters. Refining performance consecutive crude operating to average above industry utilization in our execution rates X The has plan enhance resulted

fact, our since improving barrel. per focused and performance, highest at we earnings In We our reducing operated remain rate market to XXXX. annual increasing enhance on costs capture

In to exceed million Midstream, our The business our and Since DCP job remarkable integrating expect we Midstream of run $XXX for rate ownership $XXX and $X.X synergies captured synergies NGL DCP, has continues done million adjusted of run our by annual has year-end, been team of expectations. of over rate XXXX. EBITDA wellhead-to-market billion. a Midstream the as of increasing

generation company's be priorities, cash and on remain level sustaining in dividend. structure and stable capital our will from more delivering the We're providing cost has to capital our top covers laser-focused grown further a XXXX. Midstream The the details. business that business Kevin on funding transformation targets reducing

$X long-term fit be monetize billion approvals. to These including to market conditions strategic to priorities, dispositions of in asset In any expected plan assets subject over that and necessary satisfactory we that will to dispositions our are our generate regulatory Timing longer addition, support these proceeds will no shareholders. strategy. returns

and later project is our start progressing into convert returns. and Francisco San our only focused Rodeo expect Renewed refinery on this renewable strong to of to generate world's allocation, capital Our and and nearly total adjusted was project billion Marketing to the in we one mid-cycle $X facilities EBITDA Midstream up reflecting attractive is high-return Specialties Refining The more largest well, in stable fuels We're margins businesses. portfolio. $XX.X by our projects billion, XXXX expected above funding contributed quarter. across disciplined The

to significant our this positioned value commercial XXXX. our through well to on we're return operating of continued through by diversified deliver We'll portfolio. by and Looking do excellence strengths in shareholder targets as XX% capitalizing and forward, shareholder total the the integrated of achieve cycles, our demonstrated economic

a resulted in and has competitive a since growth growing annual Our commitment XX% to dividend secure, rate compound XXXX.

the to financial reliable safe Before Kevin continued the to to I like review results, turn XX their dedication thank team to call the Phillips over and I'd for operations.

to enable our us on on energy mission to deliver execute our improve provide Our strategic and priorities lives. and employees

over you. to Kevin,

rate on year-end of run Slide $X.X business of sustaining reducing achieved on in are of efficiencies. progress and update reductions transformation as capital billion Thank cost how to generation. X with you, comprised costs sustain of Mark. XXXX, we We and our I'll $XXX million savings cash start an higher $XXX million

our of transformation one stories. is capital Sustaining business success

historically sustaining approximately capital $X billion added about consolidation Midstream. year, per and averaged with million the of Our $XXX we DCP

reflected capital end in Despite to sustaining of our realized we capital benefit the reductions. expenses also relate earnings well additional benefits Operating from SG&A million these as sustaining reductions to equity to we gross in of XXXX, in the and Through capital XXXX cost requirements million our spend reduced million plan. The is as XXXX. cost majority $XXX This $XXX and DCP, $XXX Refining, margin. under

the total billion company of X, year including On cost the controllable compared XXXX chart were in impact in Adjusted cost $X.X XXXX. $X.X with more illustrates Slide year-over-year, The drivers at of detail provide main level. on we a consolidation. DCP billion reductions the costs full the

cost integration. synergies We acquisition DCP the realize and from subsequent to continue

our business by transformation including already share continues. costs, and costs, successful $XXX of Our approximately WRB million, reduced work this has

turnaround MiRO expense proportionate by approximately to $X.X costs, $XXX controllable over million Slide reduced savings X costs our Refining decreased million. controllable WRB billion Business provides transformation a in XXXX. costs. adjusted and breakdown of and of $XXX share including Refining Refining costs,

These inflationary lower prices, lower reductions impacts, expense Additionally, more than costs. market and offset cost turnaround primarily from further impacts. reduced utility

includes basis, about business The our excluding allocations share that per SG&A cost $X or over savings $X.XX transformation turnaround were adjusted Refining's per a expense. $X.XX corporate per and fully barrel reduced barrel. costs adjusted dollar a XXXX is for per costs by On expenses. controllable burdened $X.XX This barrel of barrel,

target run the XXXX. full rate We per to of $X by expect achieve barrel end our

Additional details this to can presentation. be in the appendix referenced

return Adjusted affiliates $XXX per ratio $X.X Net $X.X XXXX, repurchases distributions X Slide capital to share. $X.XX our share cash of fourth billion at including million of cash of operating We equity flow from quarter year-end results. was $XXX was was million. We generated $X.X the million. earnings distributed of were dividends. the billion, XX% shareholders spending billion and for billion and through employed debt-to-capital $XXX summarizes on $X.X quarter year. or Capital for XX%

change the fourth the from quarter. third quarter in Slide X by segment highlights to the results

$XXX During results decreased and offset the adjusted Marketing to mostly in earnings lower Specialties, results partially period, due Midstream. and million, in improved by Refining

of volumes increased adjusted pretax $XXX related reflecting from primarily $XXX record, the million to was record Transportation quarter deficiency the the transportation. million In as The a quarter, due and reflecting prior deferred throughput to agreements. NGL margins and up recognition NGL Midstream, operating fourth both lower business improvements income of higher at well costs. also higher, revenue as Hub Sweeny and mainly results were in

equity increase Global from higher $XXX million margins, increased fourth mostly by earnings affiliates utilization income demand. volumes lower million was from This lower sales quarter. $X the pretax decreased mainly to CPChem's and was seasonal in O&P to due adjusted offset Chemicals XX%.

decrease results. margins realized $XXX commercial impacts, discounts third wider offset quarter. crude clean due strong was adjusted down Refining crack hedge and market primarily fourth spreads, from inventory product partially to Realized $XXX Market margins. was the million, by heavy Gulf XX% million to Coast The to quarter income increased due from lower lower decreased higher XXX%. realizations, capture pretax

pretax income primarily quarter the in due fuel of seasonal $XXX Specialties the $XXX Marketing The was a in a domestic decline decrease was mainly Mid-Continent. fourth margins, and previous million quarter. adjusted from wholesale million, decrease to

XX%. adjusted was effective Our tax rate

a working Cash Slide which change in of from shows was receivables commodity $X.X the $X payables, offset XX working billion movements capital in a in impact million, with of $XXX the accounts that and was We the prices. by included mainly capital, cash cash mostly inventory reduction billion. reflecting during benefit operations, There declining fourth excluding quarter a the was quarter. started balance.

funded capital and $XXX $XXX repaid of spending We approximately debt. million of million

shareholders we repurchases $X.X returned to through billion share dividends. Additionally, and

This was billion. ending concludes and cash the operating of review results. balance financial my Our $X.X

$XXX a expect low the we global million. In Chemicals, rate for we items quarter worldwide utilization few In outlook quarter $XXX quarter. XXs mid-XXs. be expect O&P the cover million utilization first expense Refining, the in the first turnaround I'll rate the first to and be Next, to crude between be in to and

up project. with Our San our start At refinery, Rodeo Rodeo turnaround down shut associated February of in the start-up prepared the and in as we a executing the operated renewable by to renewable were fuels guidance will The crude refinery as the January, are fuels of quarter. excludes oil facility the conversion costs expense facility. crude Francisco Renewed end we operations production we and

of costs XXXX $XXX Full first million presentation. is We this on decommissioning $XXX start-up anticipate guidance in first quarter. million million. quarter for and provided XX year between come costs Other anticipate $XXX to Corporate Slide We of in and and the

after will we for closing questions, Now line comments. open Mark the which will make

Piper [Operator Instructions] Ryan comes Todd with Our Sandler. from question first

capture about on sustainable strong the talked things, you might Maybe some you very and be know can the would that Can you the that performance? of transient some quarter? margin of be drivers more out terms -- underlying highlight what going about talk forward in in I margin, the What might performance but improved of quarter. of starting on seasonal maybe you or

Yes. Ryan, it's Kevin.

additional some make that. around me comments Let

different market few drivers a to capture. strong So the

hedge fact, the in we million to to back reverse in the You'll that a quarter. what that impacts And fourth and negative recall quarter, were we million inventory in about happened. talked is, expected that some third $XXX that $XXX

had which swing $XXX to you quarter-over-quarter. so a is And million benefit, circa that close

the pricing the market-driven Coast, Colonial. going benefit and had improved barrels a We the effect product really of on of on Central on item. effect sort we Canadian also in In because pricing up obviously, from product crude feedstock, had -- lagged for especially that's Corridor differentials, Gulf

of And is market-driven a a so factor. again, that, bit

It will the of tailwind is was quarter in happen in to So dependent the going And a that was the item first be end bit at. third headwind a what where a the quarter. quarter prices fourth in on quarter.

us. results, present result the also really is to this of as had take opportunities advantage market they able themselves strong we commercial to and of But being

the we pipeline and to were arbitrage that barrels. those able we capture as optimization around optimized So commercial strong

things you would organization. So some strong strong execution is the in to dynamics commercial a it's are combination a that by of of there unique were of but market the quarter, bit operations, that a function of say certain it

I the of the time terms some Great. that line then gave you couple follow-up of of we months. next That a in expect the appreciate update Rodeo. that And over maybe was on helpful. can there

the renewable terms to maybe walk long of start-up would it of of How first does PTU you and about the rate this of what capacity? diesel some of it plant, expect of running? As in to there. of quarter in how months can operation think there we go take ramp we full take run you you kind operating to terms long end up through X does to the terms a of until where have full Maybe those from X things in get

common Yes. then the we this to I'll Ryan, we're progression us the Kevin conversion points, see hydrocrackers, of here. his will will our that it at somebody way which take as currently off, is for in process. for tie and here, in utilities some question the down that is, in project is additional to going in fill shut mentioned facility. Rich. that the allow February, kick in color maybe And one the point this But

to expect up which of to will We capacity March quickly the start ramp frame, the time about Renewed that project. of stated up Rodeo in XX%

and answer up finish up the hydrocracker the time will and that second your rates roll to ramp the we'll continue that. process, be performance to into start Or... system reactor quarter for And up. the continue which and of conversion April the end and the commissioning full frame, to May then April, In question second up the finish the there, of PTU Does in then by Ryan? we'll period would be optimize that we expect

great. Yes, that was

Our question from Gupta with comes Manav UBS. next

degradation the part the focus to were DCP the together. Congrats like some on synergies strong is everything want NGL concerns delayed There just of It quickly or coming a very strong to looks will some start quarter and Midstream of be on earnings. a business. that I there's year.

fourth you critics a quarter. think through us there have over the I the improvement in the NGL earnings with we this silenced but lot walk in sequential release, saw of business help

make on to some I'm Thanks your comments Manav. just I high-level appreciate delivering Yes, recognizing and Tim, we it you are the integration. comments. turn to that for over going then but

fully Phillips decisions synergies being whole The the XX quicker, a And team The it's of seamlessly. that, better happening behold. and integrated something is integration really has performing across down really, seeing at DCP success. communications, chain the made things been even things and -- faster, to great, level been we're into have value

As million let that synergies of comments, him of got we on work, captured, we've color at did or up are noted another his the more on line hit you some to Tim and And give team I'll so getting million-plus. sight in $XXX $XXX we -- and hard that.

down. together, you executed that had were the was going really ultimately, representative executed generation the in mean, and see And pretty we're X forward. we more this We It Yes, of with commercially. the things. segment. Mark. Midstream does really, then deliver We put you what highlight of is X going we put you felt cash businesses of Manav, -- flow And this to strong what a results. earnings free couple does well to transaction, allow volumes. operationally. I improved When Thanks, Great. Costs the it's well simple. the business

under of Now quarter almost parallel. the We're those integration X accident. running a here sometime got We all with that integrated. in second all ERP done completely. systems in It's as the done the early slowly get still bit we versus we've IT happen doesn't and by a been once be should folks X all slog

and expect some see So just come additional call costs really, off. blocking it's what But I tackling. to we

this you market hasn't a environment. yourself and And it helpful, to you this had do The said, make execute give well we've overly been that. of can you like operate think commercially representative chance. what you I we so in I with think, And is well,

where we overall, going. and we So go like think we transaction, it's to and out it's itself compete. well like getting the And positioned

in always you very informed is of system view seeing within follow-up quick of diesel understand the gasoline, jet terms Help demand there. your My Perfect. macro. Refining have even fuel you're a us and out what

We U.S. it's finished year. I'll X% one. over Manav, year prior gasoline Brian. saw that about the last X% take Global demand about Hi, in

of stocks, both majority the We grow We expecting X%, X-year expect Gasoline to and winter-grade, continue particularly average the strong Europe. summer. back to inventories the the U.S. turnarounds octane toward we're high remain values. think, to stored the X-year we gasoline XXXX global of gasoline gasoline for should the flat. as move is almost and the we current spring U.S. end think Overall, the at given middle of move range with

down Latin side, mostly production distillate was imports. over West the diesel demand X% U.S. the the Coast, renewable X%. finished And due XXXX saw XXXX. distillate rains and to On actually X%, America, about up we the and in

XX% stocks even season U.S. And maintenance XXXX take and given we'd the that a global last are year's anticipate draws closer And the stronger distillate expect economy. about U.S. X%, X.X% through grow should U.S. We spring distillate X-year inventories below to about levels. the is a to average. demand

in jet XXXX year think XX% cargo total seat demand, And on a on remain XXXX count we jet XXXX. expected that continue recovering demand as elevated, year, prior finally, to grow X%, is will finished to travel. seen And and we've about over last with continued well. international flights recovery global with

America. The from with next comes Doug Bank question Leggate of

I for wonder $XX.X you EBITDA the if I Gents, could you mentioned. about the billion XXXX, number ask

very seems you of only billion may go cutting. have to to target? to small those do rebase numbers. basically a It incremental a where got to to us upside cost you amount are $XX to If seems mid-cycle, some relative the you've we that It year

my help So really that if you be that, could helpful. rebase would question. us That's first

Yes, Doug, it's Kevin.

XXXX -- Let me billion to gaps terms there's items $XX mid-cycle, in what's bit current significant of one really that try couple the for probably from that are and the the on of fill a shift a target. you. There's more in

So on about increment then billion end put And which they is $XXX basis, most mid-cycle for mid-cycle an $X projects place, took get mid-cycle. into is happened the there's currently, billion to not mid-cycle. towards of year. a an last of million mid-cap that's business The that just one, at $XX the incremental to the have from of Chemicals and -- about remember,

$X so really billion Chemicals incremental in an And overall by driven environment. the

not is $XXX Rodeo reflected million in and a that's mid-cycle current, impact.

only of is Midstream to so additional still a you're come. -- $X increment. of to Remember, X, There billion of that we're in last that's had basis. close well, close basis ownership things. getting And And our -- there's adjusted There between the June some the billion on there's our cost from at side is rate year, those that of at a on step-up $XX.X so incremental run to since an mid-cycle DCP respect. current

addition, In business. talked $XXX commercial the additional about the we of million contribution to

see to talked that we're over past. expect also Refining has about And the Rich next on executing in that years. the projects We the materialize X

are $XX those us items going that XXXX to are that the level. so to And get mid-cycle billion

very system. realized very, capture Thanks, you we understand not perhaps question rebased what like is on get. My West of kind margins different -- historical if We're is Kevin. the appreciated. look if a a rate, versus Rodeo normally would trying your in Rodeo, Coast granular your the That's to much but indicators than a and follow-up with was relationship question

you And time. helpful. So Rodeo, the of extent there. us the leave characterize the question magnitude, be of years? it loss-making last most contribution? request can it's ex Rodeo was history would really But for I the order of I'll a give kind To Or a and the same guess at you would how EBITDA that several

that, that as facility want renewable we a financial and fuels the results we request to a because how we're is under take Yes, going generating be report we consideration that want asset, Doug, -- facility, to that the think that. as to demonstrate you fuels been want about. why understand And as also go-forward Rodeo about talking do would we'll of renewable we've able it's kind the --

so we'll recast And a under basis. that of take show we terms what consideration in from

it's the environment. a crude over has the few very it I function as mean, historically Rodeo I been challenged has strong what really past, last the was in advantage. years done think market of the on a question what been

declining with facility So supplies domestic more it the disappeared rely imported barrels. on having for to feedstocks and this of

you're it's as high-cost -- also then area, But know. a you

it's that that's is of into So -- looks environment that's like. typical, California although you're the all what And way. then market

And so everything then there's impacted, what when and operating the in it's in well, and more we've California is when you increase challenged. is look upsets typically see respectable. an running seen supply But is margins financials

Thanks forward to Kevin. look much indeed, very that. We'll

next comes The John from JPMorgan. question the of with line Royall

question So on my balance is first sheet. the

the top hitting guys You end guided by leverage of your year-end had 'XX. to range

You're was impact which, finishing that, by think, prices. just the I a of bit above driven capital falling working

working So get you'll price assuming do 'XX, you on in capital a updated that somewhat have think you back range? environment any into guidance and when for stable

And us John, it's of Yes, -- reasons for would. a materialize percentage the we that debt-to-capital X quite the see thought tailwind to we they you're X net variety that points right probably capital way on the impacted to by that metric. working didn't expected

in make XXXX. We reduction expect modest debt on some progress to

Phillips 'XX total maturities $X.X in level. billion a XX at of have We the of

say, of on metric. the manage quarter, And and in the will a has that of though, that over working bit can dollars because capital gives tune a the is of of swing this. I a an billion terms always wildcard it us how stated we couple component so that impact the course of to little us some a flexibility

XX% with you XX% say we is, we look, I when the we're target are. aggregate I'd where what So comfortable back in still step range. think But terms, and look to very

there, And sheet which debt with priorities allocation we've be the the balance of of is them. one our capital different and made got decisions all going are that of out to consideration

factoring to sure commit sort We right want priorities. want to don't to all just of any the X make we different metric. in to I make that rash the of particular target So decisions, overall decisions

my is for And Understood. turnaround year. on the next just guide question the

step-down, ballpark pretty I a year like year 'XX. very as You 'XX, big in took pretty catch-up was was 'XX is a 'XX of think, big basically which, meaningful a year. looks and the year in Last somewhat guidance or same a

change average think So an that kind average should year being all? here in And we from somewhere the of million range? that the does -- of as conversion $XXX at turnaround Rodeo

Yes, an most quarters in we're fourth And and is average take you our consider I'll this I year do the concentrate the maintenance that. in companies, activity the what is year given year us. in in that first John, that. would this for range at think stays that Like we last our year. This system and outlook any for planned year Rich.

these we year. the really to cycles. the way our in out is those compliment driving turnaround during second lighten And third the heavy need But to on effort organization, a periods which them, the quarter season, huge I and flatten tend our of peak working are by turnarounds to

Now of on sites get a occasionally up we stacked couple ourselves. get that will

turnaround we've a $XXX But as to those range do out average long-term this really is push to on cycle. work out, level towards and the million what $XXX our basis million spend tried

it'll So slightly sense, may that there'll that's then general that, there'll that good to be in be a bit years But little a some use. be and a a well. be few as higher under that than number

comes next The from with Scotiabank. Paul Cheng question

suppose Kevin, that's and for run that quarter, us Kevin. in and in was is associated through the what a million the treated quarter, first you one cost what can going is -- item? not being of first the that? as the the $XXX decommission what's to And special tell decommission expense, that at fourth with and Maybe I running

I that part So the missed first of first Paul, piece. what was question? the

yes us is Rodeo quarter, is fourth fourth cost, to in can is the the run rate what cost understand and -- what or you in without that that run the the We're throughput rate if Rodeo, that actually, also? trying tell the quarter? And what the is what

versus first quarter performance fourth Rodeo in So the quarter. the

So of of financial Rodeo we What look is starting to out mean, that quarter -- don't impact fourth operations full have -- a asset-specific the did in and of when quarter down, our information. were the I operations versus turn detrimental capture the give level we on the results fourth to say results traditional can sort at shut if down that the at we crude one crude That the rates, units the just I quarter. in normal carrying fourth you Rodeo. we

So it did have an impact.

In terms the of through I decommissioning in a factor. we a the not report first not GAAP not impact, it's as those be what normal results. item. unique $XXX -- will that and It's earnings million of Because the treat we're for special mean, they're will start-up They would as how we costs doing. quarter, flow and or

operating you Now results. of we our can us, just part normal own it be to of choose it, can talk it. will make and But about sort your adjustments around for

terms product you the pricing. on Kevin, right. call Colonial Page talking $XXX at I $X.XX. capture, the if column, in about the of presentation, of, Pipeline look that you're in think, it here swing the benefit from And XX million have, All they I margin your your on And other

So that's $X.XX. about translating to

barrel is where other, per there? the contributor $X So say,

Yes.

factor that. So that's on bulk of so X I think rest, the the

swing the product on I got You've also pricing the effect. Gulf Coast mentioned

in show benefit a also we quarter. during quarter will up the our performance in X You from talked there the to there next. our That -- swing of have also that commercial And about bar. had the you

reflected in So that all part those the things representation. of get

contributed even minor bulk So that, operation? you the I by that suppose the contributor? that gap, things piece a of say, have commercial just other $X Or of a that's is bigger is

of items. combination those a it's of mean, I Yes. all

on see benefit the So side. product you

see benefit You commercial from contribution.

see inventory the benefit that hedging items from You talked the about. we

make they of all that $X. So bulk the combine up to

question of with next comes the Holt. Matthew line Pickering, Our Tudor, Blair from

share the trends could side, for improvement also, once either export-related the QX. provided any you then On that? And PE strong again prices? on or Could What's demand seeing, you Chem domestic? in that recent guidance talk you driving about you're utilization

regard couple the relatively is the good that from get, point. flat through with Chem seen Yes. $X.XX December, from stability Matt, got think then bit January. $X.XX prices might I this October fourth they a in Things on a Yes, we've discussion a Tim. quarter. actually Yes, little things much of standpoint. the be they How increase actually of polyethylene pretty through that of were to a

But Demand did nonetheless, in feedstock advantage running steady U.S. highlight CPChem, Asia. Gulf is, good, the The you've it U.S. they're hard. in soft utilized and Coast has in hard. a is U.S. been running that the namely kit, really, Europe, highly got albeit here

destocking some as seen you've So on that's going well.

So I bit helped momentum. think that's underpin of a little

Now anybody's at this victory this on declaring I don't think point.

rebalancing in balance lot it I will still needs the year. of forces through think the a there's to you and you throughout a that are happen see of play, XXXX. destocking But does tell that market the

returns really just of Matthew, they run and them out this to demonstrates CPChem positioned down be anxious They've And downturn, come resilience and with. the positive that at high cycle. rates across term. cash done well, relatively well really, but been We're this this I see to long think the happy are compete cyclical and bottom-of-the-cycle we're for of Yes. able show

overall And your good. believe then provide I Sounds expectations. for you deferred your an It's volatile could but above in did little on that recently, XXXX outlook taxes come been XXXX? a

the what's outlook for XXXX? So

those tax had it's Yes, roll-up. to driver the MLP a the Matt, both deferred benefit in And great also pretty strong and primary XXXX question. XXXX. years, were in We

drops were with benefit scaling combination is of associated spend into last bonus that advantage less that, the off so drove then lower than PSXP, roll-up. depreciation benefit had and in saw And as benefit And that, XXXX year. That down go bigger of. in which some anticipating, DCP we XXXX, well. XXXX, of take as end, in in with the So a the a we that movements and you depreciation less significantly -- it's to capital we was

dropped X in XX% year XXXX. we So bonus

tax extend And provisions X $XXX a Jobs some we so backdated there's on and caveat XXXX. There sunset to XXXX, the Tax out. than So passed, to from lower about right see in that what now, ultimately that bill year we're is Cuts XXXX. lot starting benefit will million for the if that, bonus in process we're Congress of the that, had in if anticipating of Act current quite a in depreciation the we'll actually XXX% a this in passes,

XXX%. So that the an XXXX, tune you'd XXXX, on and to $XXX XXXX million in legislation so, but and at of all get that's incremental passing. benefit us or would contingent XXXX probably That

Gabelman The next question Jason of TD Cowen. comes line with from the

follow-up slate, plan, CI feed question meaning hit once on from that lower ramping up you running be it to kind was is mentioned going and more all midyear. dirty color. Rodeo indicative ramp-up include by rates be be I the that the Does middle I going to a also full Or had appreciate you're of of to of I you feed year? to a full start-up the know going rates? the

and Jason, some vegetable and Yes, oils. this oils maybe used We'll start those meat is are vegetable the cooking Rich. off some feedstocks, easier used with generally, oils,

quarter. types of towards the and As we we the CI, continuously the the second lower processing with and well. as into fully reduce as lower the which expect to out, get units and introduced we and third inside unit quarter, their feedstocks, of that more impacts includes get and second more the up feedstock system quality unit introducing running we lined greases, those the half of pretreatment the the carbon operation and tallows, intensity fats, into those slowly the pretreatment will be maybe comfortable carbon-intensive feedstocks. And we'll And the start

up lined is and I And facilities. out think about commercial aggregation these they've feedstocks with And developing gathering organization actively and up that the been theme. our

the they're team Rodeo the sending so quite -- for light be go positioning the and these from ready well And start looking that green for ready. in to and we're ahead direction, when they'll

earnings for should then is there's you've storage demand in relative pulled Got results, else would business be and if very like call. being XQ. I'm and segment Midstream And And result of about that, my weaker and things drive that the strong to blending. maybe that anything But the butane kind follow-up that lower on propane winter discussed on it. we to would and would clearly, any summer results of as of results XQ included XQ wondering stronger think thinking XQ like out higher the and, seasonality

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mid-cycle. at that's Now

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of from Chen Barclays. with comes the line question next Theresa Our

Hi.

control do own plants you NGL from the run your of can your your you terms third strategy, of In remind versus Y-grade is processing assets a just anticipate downstream breakdown party? flowing on longer you rate basis, to volumes us, wellhead-to-market what

go will Theresa. But tell won't you into what long. on lot that, I is of I we're a detail Well,

to we're are third by offload I'd We integrated think over point, us, future build to chain We for I some design. run that in-house. long we whether parties and are product want on we'll And on of for value our that's volumes to whether to got, we as and to said, But on we frac. some to transport actually, like in we've scale be, NGLs. at point to at long they're those or this time, continue NGLs. bringing time the like foreseeable the But

would narrowed have further? the you down process? How Got this are on the with far us it. you an asset giving you And things update along And progress sales? mind

Yes.

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of Our Joe comes from Morgan the next with question Stanley. line Laetsch

on good quarter. Congrats a

to Central I dynamics kind year latest So in the I from you there the gasoline on watching get side, I particularly benefit hoping thoughts have your wanted running to WCS the weak was on which on of start as but know ask year. the progresses. cracks remained Mid-Con Corridor, there, and just to

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moved particularly up has Gulf a our is clear and to summer-grade things gasoline. Coast of soon and winter-grade market the in We So tank closed think kind there of view U.S. will out to turnaround, refineries from up, going switches Chicago as there's are be north. gasoline the

you limitations? ask Suez Europe? flows shift a then shipping the capacity Canal more on I any wanted any to maybe in Panama diversions, Have export Canal Or And crude to seen with or product side. product just the Great.

with would first, the Red now been Russia, say, with have different I different arbitrage, Sea, seeing we places.

barrels time. used it's know, going But you different rates to. places by freight and are just than they large, and As increasing Russian

For buy out, we widen the and does barrels, Brent TIs, that, us, WTI. as the helpful European-type because that's it actually more barrels basis on

benefits it's robust we So voyages. strong fueling sales us, for also bunker have benefit. the the for and higher Also, which a from bunker longer business, a

it closing This concludes for back to turn remarks. I'll Mark session. now the question-and-answer

Slide Thanks have and your for some up all to been where XX and we've wrap comments we're about going with I'm where headed. questions.

ambitious on that XXXX to our strong on results deliver and in what our delivered some attractive we goals, financial at shareholder focused control, enabled us those operating we with to we the pretty shareholders Day, about today. feedback. goals You'll Then based were Investor results. recall set and you returns and on plans heard back Those in we XXXX,

Now, in reward the to bar XXXX, performance we're once enhance to raising shareholders the now again stronger our who's in future. ability and

are you we in of confidence. your thank for invested XX, those that Phillips you For

Thanks for XX. in interest all Phillips your

me. further have please questions, Thank you you. If or Owen call

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